SC TO-T

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE TO

TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)

OF THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No.             )

LASERSCOPE

(Name of Subject Company (Issuer))

Kermit Merger Corp.

an indirect subsidiary of

American Medical Systems Holdings, Inc.

(Names of Filing Persons (Offerors))

COMMON STOCK, NO PAR VALUE

(Title of Class of Securities)

518081104

(CUSIP Number of Class of Securities)

Carmen L. Diersen

Executive Vice President and Chief Financial Officer

American Medical Systems Holdings, Inc.

10700 Bren Road West

Minnetonka, Minnesota 55343

(Name, address, and telephone number of person authorized

to receive notices and communications on behalf of filing persons)

With Copies to:

Thomas A. Letscher and Michael J. Kolar

Oppenheimer Wolff & Donnelly LLP

45 South Seventh Street, Suite 3300

Minneapolis, Minnesota 55402

CALCULATION OF FILING FEE

Transaction Valuation(1)	Amount of Filing Fee(2)
$716,915,280	$76,710

(1)

The transaction value is estimated for purposes of calculating the filing fee only. This calculation assumes the purchase of all outstanding shares of common stock at a purchase price of $31.00 per share, and payment for all in-the-money options at the expiration of the Offer at $31.00 per share, net of the applicable option exercise price. As of June 2, 2006, there were 22,396,973 shares of common stock outstanding and options to purchase 1,359,990 shares of common stock with exercise prices less than $31.00 per share outstanding.

(2)

The amount of the filing fee is calculated in accordance with Fee Rate Advisory No. 5 for fiscal year 2005 issued by the Securities and Exchange Commission on November 23, 2005. Such fee equals 0.000107% of the transaction value.

o  Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.

Amount Previously Paid: N/A	Filing Party: N/A
Form or Registration No.: N/A	Date Filed: N/A

o  Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes to designate any transactions to which this statement relates:

          þ third party tender offer subject to Rule 14d-l

          o issuer tender offer subject to Rule 13e-4

          o going-private transaction subject to Rule 13e-3

          o amendment to Schedule 13D under Rule 13d-2

Check the following box if the filing is a final amendment reporting the results of the tender offer.    o

     This Tender Offer Statement on Schedule TO (this “Schedule TO”) relates to the third-party tender offer by Kermit Merger Corp., a California corporation (“Purchaser”) and an indirect subsidiary of American Medical Systems Holdings, Inc., a Delaware corporation (“AMS”), to purchase all of the issued and outstanding shares of common stock of Laserscope, a California corporation (“Laserscope”), no par value (the “Shares”), at a purchase price of $31.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 14, 2006, a copy of which is attached hereto as Exhibit (a)(1)(A), and in the related Letter of Transmittal, a copy of which is attached hereto as Exhibit (a)(1)(B) (which, each as amended or supplemented from time to time, collectively constitute the “Offer”).

Items 1 through 9 and Item 11.

      The information in the Offer to Purchase and the related Letter of Transmittal, copies of which are filed with this Schedule TO as Exhibits (a)(1)(A) and (a)(1)(B) hereto, respectively, are incorporated herein by reference in response to Items 1 through 9 and Item 11 in this Schedule TO.

Item 10. Financial Statements.

      Not Applicable.

Item 12. Exhibits

(a)(1)(A)	Offer to Purchase, dated June 14, 2006.
(a)(1)(B)	Form of Letter of Transmittal.
(a)(1)(C)	Form of Notice of Guaranteed Delivery.
(a)(1)(D)	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees.
(a)(1)(E)	Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees.
(a)(1)(F)	Summary Advertisement as published in The Wall Street Journal on June 14, 2006.
(a)(1)(G)	Press release issued by American Medical Systems Holdings, Inc., dated June 14, 2006.
(b)(1)	Commitment Letter and Term Sheet, dated June 3, 2006, between CIT Healthcare LLC and American Medical Systems, Inc.
(b)(2)	Commitment Letter and Term Sheet, dated June 3, 2006, between Piper Jaffray & Co. and Deephaven Capital Management, LLC and American Medical Systems, Inc.

2

(d)(1)	Agreement and Plan of Merger, dated as of June 3, 2006, by and among Laserscope, American Medical Systems Holdings, Inc. and Kermit Merger Corp.
(d)(2)	Form of Shareholder Agreement by and between American Medical Systems Holdings, Inc. and each of the directors and certain officers of Laserscope.
(d)(3)	Confidentiality Agreement, dated as of February 16, 2006, by and between Laserscope and American Medical Systems Holdings, Inc.
(d)(4)(i)	Form of Retention Agreement for eligible finance and accounting employees of Laserscope (incorporated by reference to Exhibit (e)(10)(i) to Laserscope’s Schedule 14D-9 filed with the SEC on June 14, 2006).
(d)(4)(ii)	Form of Retention Agreement for other eligible employees of Laserscope (incorporated by reference to Exhibit (e)(10)(ii) to Laserscope’s Schedule 14D-9 filed with the SEC on June 14, 2006).
(g),(h)	None

Item 13. Information Required by Schedule 13E-3.

      Not applicable.

3

SIGNATURE

      After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

KERMIT MERGER CORP.

By:  /s/ Carmen L. Diersen

Name: Carmen L. Diersen

Title:   Chief Financial Officer and Secretary

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

By:  /s/ Carmen L. Diersen

Name: Carmen L. Diersen

Title:   Executive Vice President and
            Chief Financial Officer

Dated: June 14, 2006

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EXHIBIT INDEX

Exhibit
Number		Description
	(a)(1)(A)	Offer to Purchase, dated June 14, 2006.
	(a)(1)(B)	Form of Letter of Transmittal.
	(a)(1)(C)	Form of Notice of Guaranteed Delivery.
	(a)(1)(D)	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees.
	(a)(1)(E)	Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees.
	(a)(1)(F)	Summary Advertisement as published in The Wall Street Journal on June 14, 2006.
	(a)(1)(G)	Press release issued by American Medical Systems Holdings, Inc., dated June 14, 2006.
	(b)(1)	Commitment Letter and Term Sheet, dated June 3, 2006, between CIT Healthcare LLC and American Medical Systems, Inc.
	(b)(2)	Commitment Letter and Term Sheet, dated June 3, 2006, between Piper Jaffray & Co. and Deephaven Capital Management, LLC and American Medical Systems, Inc.
	(d)(1)	Agreement and Plan of Merger, dated as of June 3, 2006, by and among Laserscope, American Medical Systems Holdings, Inc. and Kermit Merger Corp.
	(d)(2)	Form of Shareholder Agreement by and between American Medical Systems Holdings, Inc. and each of the directors and certain officers of Laserscope.
	(d)(3)	Confidentiality Agreement, dated as of February 16, 2006, by and between Laserscope and American Medical Systems Holdings, Inc.
	(d)(4)(i)	Form of Retention Agreement for eligible finance and accounting employees of Laserscope (incorporated by reference to Exhibit (e)(10)(i) to Laserscope’s Schedule 14D-9 filed with the SEC on June 14, 2006).
	(d)(4)(ii)	Form of Retention Agreement for other eligible employees of Laserscope (incorporated by reference to Exhibit (e)(10)(ii) to Laserscope’s Schedule 14D-9 filed with the SEC on June 14, 2006).
	(g),(h)	None.

EX-99.(A)(1)(A)

Exhibit (a)(1)(A)

OFFER TO PURCHASE FOR CASH

ALL OUTSTANDING SHARES OF COMMON STOCK

of

LASERSCOPE

at

$31.00 NET PER SHARE

by

KERMIT MERGER CORP.

an indirect subsidiary of

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

THE OFFER (AS DEFINED HEREIN) AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, CENTRAL TIME, ON WEDNESDAY, JULY 12, 2006 UNLESS THE OFFER IS EXTENDED.

     This Offer is being made pursuant to the Agreement and Plan of Merger, dated as of June 3, 2006 (the “Merger Agreement”), among American Medical Systems Holdings, Inc. (“AMS”), Kermit Merger Corp. (“Purchaser”) and Laserscope. The Board of Directors of Laserscope (the “Laserscope Board”) at a meeting held on June 3, 2006, by the unanimous vote of all directors (a) determined the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger (both as defined herein), to be advisable and in the best interests of Laserscope and its shareholders, (b) approved and adopted the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger, (c) determined that it was in the best interests of Laserscope and its shareholders to enter into the Merger Agreement and consummate the Offer and the Merger on the terms and conditions set forth in the Merger Agreement, and (d) recommended that Laserscope shareholders accept the Offer and, to the extent shareholder action is required by applicable law, approve and adopt the Merger Agreement and the transactions contemplated thereby.

     The Offer is conditioned upon, among other things, (i) there being validly tendered and not properly withdrawn as of the expiration of the Offer the number of shares of Laserscope common stock, no par value (the “Shares”), that would constitute at least 90% of Laserscope’s “fully diluted shares” (as defined in the “Introduction” hereto), (ii) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and similar statutes or regulations of foreign jurisdictions, and (iii) the satisfaction, removal or waiver of certain other conditions as set forth in Section 15 of this Offer to Purchase entitled “The Tender Offer — Certain Conditions of the Offer.” The Offer is not subject to any financing contingency.

IMPORTANT

     Any shareholder wishing to tender all or any portion of its Shares in the Offer should do one of the following: (i) complete and sign the Letter of Transmittal (as defined herein) (or a facsimile thereof) in accordance with the instructions in the Letter of Transmittal and mail or deliver the Letter of Transmittal and all other required documents to the Depositary (as defined herein) together with certificates representing the Shares tendered; (ii) follow the procedures for book-entry transfer set forth in Section 3 of this Offer to Purchase entitled “The Tender Offer — Procedures for Accepting the Offer and Tendering Shares;” or (iii) request such shareholder’s broker, dealer, commercial bank, trust company or other nominee to effect the transaction for the shareholder. A shareholder having Shares registered in the name of a broker, dealer, commercial bank, trust company, or other nominee must contact such person if they desire to tender such Shares.

     Any shareholder who wishes to tender Shares and cannot deliver certificates representing such Shares and all other required documents to the Depositary on or prior to the date on which the Offer expires or who cannot comply with the procedures for book-entry transfer on a timely basis may tender such Shares pursuant to the guaranteed delivery procedure set forth in Section 3 of this Offer to Purchase entitled “Procedures for Accepting the Offer and Tendering Shares.” Questions and requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers set forth on the back cover page of this Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may be obtained from the Information Agent or the Dealer Manager. Shareholders may also contact their broker, dealer, commercial bank, trust company or other nominee to request additional copies of these materials.

The Dealer Manager for the Offer is:

800 Nicollet Mall, Mailstop J12S03

Minneapolis, Minnesota 55402

Call Toll Free (877) 371-5212

The date of this Offer to Purchase is June 14, 2006

     A summary of the principal terms of the Offer appears on pages 1 through 6. You should read this entire document carefully before deciding whether to tender your Shares in the Offer.

TABLE OF CONTENTS

SUMMARY TERM SHEET	1
INTRODUCTION	7
THE TENDER OFFER	11
1.  Terms of the Offer	11
2.  Acceptance of Payment and Payment for Shares	13
3.  Procedures for Accepting the Offer and Tendering Shares	14
4.  Withdrawal Rights	16
5.  U.S. Federal Income Tax Consequences	16
6.  Price Range of Shares; Dividends	18
7.  Certain Information Concerning Laserscope	18
8.  Certain Information Concerning AMS and Purchaser	19
9.  Source and Amount of Funds	20
10. Background of the Offer; Past Contacts or Negotiations with Laserscope	21
11. The Merger Agreement; Other Arrangements	24
12. Purpose of the Offer and the Merger; Plans for Laserscope	36
13. Certain Effects of the Offer	36
14. Dividends and Distributions	37
15. Certain Conditions of the Offer	38
16. Certain Legal Matters; Regulatory Approvals	39
17. Dissenters’ Appraisal Rights	41
18. Fees and Expenses	42
19. Miscellaneous	43
SCHEDULE I: DIRECTORS AND EXECUTIVE OFFICERS OF AMS AND PURCHASER	44
1.  Directors and Executive Officers of AMS	44
2.  Directors and Executive Officers of Purchaser	46
SCHEDULE II: DIRECTORS AND EXECUTIVE OFFICERS OF AMS AND PURCHASER WHO OWN SHARES OF LASERSCOPE	48
SCHEDULE III: CHAPTER 13 OF THE CALIFORNIA GENERAL CORPORATION LAW	49

SUMMARY TERM SHEET

Securities Sought	All outstanding shares of common stock, no par value, of Laserscope.
Price Offered Per Share	$31.00 net to you in cash, without interest.
Scheduled Expiration of Offer	12:00 midnight, Central Time, on Wednesday, July 12, 2006, unless extended.
Purchaser	Kermit Merger Corp., an indirect subsidiary of American Medical Systems Holdings, Inc.
Laserscope Board Recommendation	Laserscope’s board of directors has unanimously recommended that you accept the Offer and tender your Shares.

      The following are answers to some of the questions you, as a shareholder of Laserscope, may have about the Offer. We urge you to carefully read the remainder of this Offer to Purchase and the related Letter of Transmittal in their entirety because the information in this summary term sheet is not complete and additional important information is contained in the remainder of this Offer to Purchase and in the Letter of Transmittal.

Who is offering to buy my Shares?

      Our name is Kermit Merger Corp. We are a California corporation formed for the purpose of making this tender offer. We are an indirect subsidiary of AMS, a Delaware corporation.

      The tender offer is the first step in AMS’ plan to acquire control of, and the entire equity interest in, Laserscope. Following the Offer, we intend to acquire any remaining equity interest in Laserscope that was not acquired during the tender offer through the merger of Purchaser with and into Laserscope, with Laserscope being the surviving corporation (the “Merger”). See “Introduction,” Section 8 of this Offer to Purchase entitled “The Tender Offer — Certain Information Concerning AMS and Purchaser” and Section 12 of this Offer to Purchase entitled “The Tender Offer — Purpose of the Offer and the Merger; Plans for Laserscope.”

What is the number of Shares sought in the Offer?

      We are seeking to purchase all of the outstanding Shares (other than Shares owned by AMS and its subsidiaries). As of June 2, 2006, based on information provided by Laserscope, there were 22,396,973 Shares and options to purchase 1,604,390 Shares outstanding.

      In connection with the execution of the Merger Agreement, all of Laserscope’s directors and certain of its officers entered into Shareholder Agreements with AMS. Under these agreements, these individuals agreed, among other things, to tender in the Offer all Shares that they own or control and to vote all such Shares in favor of approval of the Merger Agreement and the Merger to the extent shareholder action is required by applicable law. These Shareholder Agreements apply, in the aggregate, to approximately 3.6% of the Shares and options to purchase Shares outstanding on June 1, 2006. See “Introduction” and Section 1 of this Offer to Purchase entitled “The Tender Offer — Terms of the Offer.”

How much are you offering to pay for my Shares, what will be the form of payment and will I have to pay any fees or commissions?

      We are offering to pay $31.00 per Share, net to you in cash without interest, less any required tax withholdings. If you are the record owner of your Shares and you tender your Shares to us in the Offer, you will not have to pay brokerage fees or similar expenses. If you own your Shares through a broker or other nominee, and your broker tenders your Shares on your behalf, your broker or nominee may charge you a fee for doing so. You should consult your broker or nominee to determine whether any charges will apply. We will not be obligated to pay for or reimburse you for such broker or nominee charges. See the “Introduction” to this Offer to Purchase. In addition, if you do not complete and sign the Substitute Form W-9 included in the Letter of Transmittal, you may be subject to required backup federal income tax withholding. See Instruction 9 to the Letter of Transmittal. You should also consult your

tax advisor regarding the particular tax consequences to you of tendering your Shares. See Section 5 of this Offer to Purchase entitled “The Tender Offer — U.S. Federal Income Tax Consequences.”

How will my stock options be treated in the Offer and the Merger?

      If you hold vested stock options issued by Laserscope, you may accept the Offer in relation to the Shares issuable upon exercise of such Laserscope options so long as, prior to the expiration of the Offer, you have validly exercised the options (including payment of the required exercise price) and tendered the Shares issued upon exercise according to the terms of the Offer.

      At the effective time of the Merger, all your Laserscope options that remain outstanding and unexercised, regardless of whether they are vested or unvested, will be accelerated in full and, as part of the Merger, will be automatically cancelled and converted into the right to receive a per share cash amount equal to the positive difference, if any, between the Offer Price of $31.00 per share, without interest, less the exercise price per share applicable to your Laserscope options, less any applicable tax withholdings.

Do you have the financial resources to pay for my Shares?

      The total amount of funds necessary to complete the Offer and the Merger and pay related fees and expenses is estimated to be approximately $757 million. AMS will use cash on hand and funds borrowed by its wholly owned subsidiary pursuant to credit arrangements with CIT Healthcare LLC and other lenders. CIT Healthcare LLC has underwritten a senior secured financing for up to $565 million. Piper Jaffray & Co. and other lenders have provided a commitment for additional senior subordinated unsecured financing for the balance of the transaction, although AMS is currently evaluating lower cost financing options. These commitments are subject to normal and customary conditions.

      AMS (together with its subsidiaries) is the world’s leading independent company focused on developing, manufacturing and marketing medical devices that restore male and female pelvic health. AMS’ products are sold in more than 50 countries throughout the world. As of December 31, 2005, AMS’ fiscal year-end, AMS had total assets of $359 million and, for the fiscal year then ended, net income of $39 million. See Section 8 of this Offer to Purchase entitled “The Tender Offer — Certain Information Concerning AMS and Purchaser.”

Is your financial condition or that of AMS relevant to my decision to tender in the Offer?

      We do not think our financial condition or the financial condition of AMS is relevant to your decision whether to tender your Shares and accept the Offer because:

•  the Offer is being made for all outstanding Shares solely for cash;

•  the Offer is not subject to any financing conditions; and

•  if we consummate the Offer, we will acquire all remaining Shares for the same cash price in the Merger. See Section 12 of this Offer to Purchase entitled “The Tender Offer — Purpose of the Offer and the Merger; Plans for Laserscope.”

      Also, see Section 1 of this Offer to Purchase, “The Tender Offer — Terms of the Offer.”

How long do I have to decide whether to tender in the Offer?

      You will have until 12:00 midnight, Central Time, on Wednesday, July 12, 2006, to decide whether to tender your Shares in the Offer. If you cannot deliver everything that is required in order to make a valid tender by that time, you may be able to use a guaranteed delivery procedure, which is described later in this Offer to Purchase. See Sections 1 and 3 of this Offer to Purchase entitled “The Tender Offer — Terms of the Offer” and “The Tender Offer — Procedures for Accepting the Offer and Tendering Shares,” respectively.

2

Can the Offer be extended, and if so, under what circumstances?

      Yes. The Merger Agreement provides that the Offer may be extended, and in certain events is required to be extended, as follows:

•  By Purchaser:

•  for an additional period of not more than 10 business days if, immediately prior to the initial expiration of the Offer, the number of Shares validly tendered and not properly withdrawn is at least 70% but less than 90% of the fully diluted shares; or

•  for any period required by any rule, regulation, interpretation or position of the Securities and Exchange Commission (“SEC”) applicable to the Offer.

•  Upon the request of Laserscope for an additional period of not more than 10 business days if, immediately prior to the initial expiration of the Offer, the number of Shares validly tendered and not properly withdrawn is either:

•  greater than 35% but less than 49.9% of the fully diluted shares; or

•  greater than 70% but less then 90% of the fully diluted shares.

•  At the one-time option of Purchaser or Laserscope (so long as it has not breached in any material respect its non-solicitation obligations under the Merger Agreement) for an additional period of not more than 10 business days if, immediately prior to the initial expiration of the Offer or any permitted or required extension, an unsolicited third party acquisition proposal has been made with respect to Laserscope and remains pending.

•  At the obligation of Purchaser if, immediately prior to the initial expiration date of the Offer or any permitted or required extension thereof, the minimum condition requiring that 90% of the fully diluted shares have been validly tendered and not properly withdrawn (subject to any revisions thereof required by the Merger Agreement) has been satisfied but any of the other conditions to the Offer exists and has not been waived. In any such case, the extension will last until the earlier of the removal or waiver of all such other conditions to the Offer or termination of the Merger Agreement.

      Except as set forth above, the Offer shall not be extended without the prior written consent of Laserscope. See Section 1 of this Offer to Purchase entitled “The Tender Offer — Terms of the Offer.”

How will I be notified if the Offer is extended?

      We will make a public announcement if we extend the Offer, and we will inform American Stock Transfer & Trust Company (the “Depositary”), of the extension no later than 9:00 a.m., Central Time, on the next business day after the day on which the Offer was scheduled to expire. See Section 1 of this Offer to Purchase entitled “The Tender Offer — Terms of the Offer.”

What are the most significant conditions to the Offer?

      The most significant conditions to the Offer are the following:

•  we are not obligated to purchase any tendered Shares if the total number of Shares validly tendered and not properly withdrawn as of the expiration date of the Offer is less than 90% of the fully diluted shares (the “Minimum Condition”); and

•  we are not obligated to purchase any tendered Shares prior to expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and similar statutes or regulations of foreign jurisdictions.

      The Offer is also subject to a number of other customary conditions. For a complete list of the conditions to the Offer, see Sections 1 and 15 of this Offer to Purchase entitled “The Tender Offer — Terms of the Offer” and “The Tender Offer — Certain Conditions of the Offer,” respectively.

3

What happens if the 90% Minimum Condition is not satisfied?

      In order to facilitate the satisfaction of the Minimum Condition, as part of the Merger Agreement, Laserscope granted Purchaser an irrevocable option to purchase the number of newly-issued Shares that, when added to the number of Shares owned by Purchaser following completion of the Offer, results in Purchaser owning 90% of the fully diluted shares (the “Top-Up Option”). However, the number of Shares subject to the Top-Up Option is limited to the number of Shares authorized and available for issuance and, in any event, cannot exceed 19.9% of the total number of Shares outstanding immediately prior to the issuance (collectively, the “Top-Up Limitations”).

      If, at the initial expiration of the Offer or any permitted or required extension thereof, the Minimum Condition is not satisfied but at least 49.9% of the fully diluted shares have been validly tendered and not properly withdrawn, then Laserscope has the right to require Purchaser to exercise the Top-Up Option, but only to the extent that doing so, after giving effect to the Top-Up Limitations, would result in Purchaser owning 90% of the fully diluted shares. In such event, Purchaser would be obligated to reduce the Minimum Condition to the percentage of the fully diluted shares then tendered and consummate the Offer under such circumstances, subject only to removal or waiver of any other outstanding conditions to the Offer.

      However, if at the expiration of the Offer or any permitted or required extension thereof, the number of Shares validly tendered and not properly withdrawn is greater than 49.9% of the fully diluted shares but less than the percentage of the fully diluted shares necessary to require the exercise of the Top-Up Option, then Laserscope has the right to require Purchaser to waive the Minimum Condition and amend the Offer to reduce the number of Shares that Purchaser is required to purchase in the Offer to 49.9% of the fully diluted shares (the “Revised Minimum Condition”).

      In the event the Revised Minimum Condition becomes applicable to the Offer, Purchaser would be obligated to consummate the Offer as to the number of Shares constituting 49.9% of the fully diluted shares, subject only to removal or waiver of any other outstanding conditions to the Offer. In such event, if more than 49.9% of the fully diluted shares have been validly tendered and not properly withdrawn as of the expiration of the Offer, we will reduce the number of Shares we purchase from you by the same proportion as we reduce the number of Shares purchased from all other tendering shareholders.

How do I tender my Shares?

      To tender your Shares, you must deliver the certificates representing your Shares, together with a completed Letter of Transmittal, to American Stock Transfer & Trust Company, the Depositary for the Offer, not later than the time the Offer expires. If your Shares are held in street name (that is, through a broker, dealer or other nominee), the Shares can be tendered by your nominee through the Depositary. If you cannot deliver a required item to the Depositary by the expiration of the Offer, you may get a little extra time to do so by having a broker, a bank or other fiduciary which is a member of the Securities Transfer Agents Medallion Program, the Nasdaq Stock Market Guarantee Program, the Stock Exchange Medallion Program or any other eligible guarantor institution, guarantee that the missing items will be received by the Depositary within three trading days of The Nasdaq National Market. However, the Depositary must receive the missing items within that three-trading-day period. See Section 3 of this Offer to Purchase entitled “The Tender Offer — Procedures for Accepting the Offer and Tendering Shares.”

When will I get paid if I tender my Shares?

      If all of the conditions of the Offer are removed or waived and your Shares are accepted for payment, we will pay you promptly after the expiration of the Offer. See Section 2 of this Offer to Purchase entitled “The Tender Offer — Acceptance of Payment and Payment for Shares.”

Until what time can I withdraw previously tendered Shares?

      You can withdraw previously tendered Shares at any time until the Offer has expired and, if we have not agreed to accept your Shares for payment by August 13, 2006, you can withdraw them at any time after such date until we accept the Shares for payment. See Section 4 of this Offer to Purchase entitled “The Tender Offer — Withdrawal Rights.”

4

How do I withdraw previously tendered Shares?

      To validly withdraw previously tendered Shares, you must deliver a written notice of withdrawal, or a facsimile of one, with the required information to the Depositary while you still have the right to withdraw the Shares. If you tendered by giving instructions to a broker or bank, you must instruct the broker or bank to arrange for the withdrawal of your Shares. See Sections 1 and 4 of this Offer to Purchase entitled “The Tender Offer — Terms of the Offer,” and “The Tender Offer — Withdrawal Rights,” respectively.

What does the Laserscope Board think of the Offer?

      The Laserscope Board, at a meeting held on June 3, 2006, by the unanimous vote of all directors:

•  determined the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger, to be advisable and in the best interests of Laserscope and its shareholders;

•  approved and adopted the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger;

•  determined that it was in the best interests of Laserscope and its shareholders to enter into the Merger Agreement and consummate the Offer and the Merger on the terms and conditions set forth in the Merger Agreement; and

•  recommended that Laserscope shareholders accept the Offer and, to the extent shareholder action is required by applicable law, approve and adopt the Merger Agreement and the transactions contemplated thereby.

      See Section 10 of this Offer to Purchase entitled “The Tender Offer — Background of the Offer; Past Contacts or Negotiations with Laserscope.”

If Purchaser consummates the Offer, what happens to Laserscope?

      If we acquire at least 90% of the fully diluted shares (through the purchase of Shares in the Offer or in combination with the exercise of the Top-Up Option), we intend to complete the Merger promptly pursuant to a “short-form” merger, which, as permitted by Section 1110 of the California General Corporation Law (“CGCL”), does not require any further approval of the Laserscope Board or the Laserscope shareholders. In such event, this Offer to Purchase also constitutes notice to you pursuant to Section 1110 of the CGCL that the Merger will become effective without any further notice to Laserscope shareholders.

      If we are unable to acquire at least 90% of the fully diluted shares and the Revised Minimum Condition applies to the Offer, we will purchase in the Offer the number of Shares constituting 49.9% of the fully diluted shares. Thereafter, Laserscope will seek the approval of the Merger by holders of a majority of the then outstanding Shares. In such event, we intend to complete the Merger promptly following such approval by Laserscope shareholders.

      As a result of the Merger, all Shares that were not purchased in the Offer and remain outstanding (other than Shares held by AMS, Purchaser or Laserscope and Shares held by Laserscope shareholders who have properly exercised dissenters’ appraisal rights under the CGCL), will be converted into the right to receive the same per share amount paid in the Offer — $31.00 per Share in cash, without interest (or any greater amount per Share we pay in the Offer), less applicable tax withholdings. See “Introduction” and Section 12 of this Offer to Purchase entitled “The Tender Offer — Purpose of the Offer and the Merger; Plans for Laserscope.”

      Once the Merger takes place, Laserscope will no longer be publicly owned, will become an indirect subsidiary of AMS, and the Shares will no longer be traded through The Nasdaq National Market or on any other securities exchange. See the “Introduction” and Section 13 of this Offer to Purchase entitled “The Tender Offer — Certain Effects of the Offer.”

Are dissenters’ appraisal rights available in either the Offer or the Merger?

      No appraisal rights are available in connection with the Offer. After the Offer, appraisal rights will be available to holders of Shares who do not vote in favor of the Merger (if a shareholder vote is required), subject to and in accordance with California state law. A holder of Shares must validly exercise such holder’s dissenters’ appraisal rights under California state law in connection with the Merger to have appraisal rights as provided under California state law. See Section 17 of this Offer to Purchase entitled “The Tender Offer — Dissenters’ Appraisal Rights.”

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What are the federal income tax consequences of the Offer and the Merger?

      The receipt of cash by you in exchange for your Shares pursuant to the Offer or the Merger is a taxable transaction for U.S. federal income tax purposes and may also be a taxable transaction under applicable state, local or foreign tax laws. In general, you will recognize capital gain or loss equal to the difference between your adjusted tax basis in the Shares you tender in the Offer or exchange in the Merger and the amount of cash you receive for those Shares. You should consult your tax advisor about the particular tax consequences to you of tendering your Shares in the Offer or exchanging your Shares in the Merger. See Section 5 of this Offer to Purchase entitled “The Tender Offer — U.S. Federal Income Tax Consequences.”

What happens if I tender my Shares and you do not accept the tendered Shares?

      If any Shares that you tender are not accepted for any reason, certificates representing such Shares will be returned to you or to the person you specify in your tendering documents. See Section 2 of this Offer to Purchase entitled “The Tender Offer — Acceptance of Payment and Payment for Shares.”

What was the market value of my Shares as of a recent date?

      On June 2, 2006, the last trading day before AMS and Laserscope announced that they had signed the Merger Agreement, the last sale price of the Shares reported on The Nasdaq National Market was $21.41 per Share. On June 13, 2006, the last trading day before Purchaser commenced the Offer, the last sale price of the Shares reported on The Nasdaq National Market was $30.68 per Share. We advise you to obtain a recent quotation for the Shares in deciding whether to tender your Shares. See Section 6 of this Offer to Purchase entitled “The Tender Offer — Price Range of Shares; Dividends.”

If I decide not to tender, how will the Offer affect my Shares?

      If you do not tender your Shares in the Offer and the Merger takes place, your Shares will be cancelled. Unless you exercise dissenters’ appraisal rights under California state law, you will receive the same amount of cash per Share that you would have received had you tendered your Shares in the Offer. Accordingly, if the Merger takes place, the only difference to you between tendering your Shares in the Offer and not tendering your Shares is that you will be paid earlier if you tender your Shares and you will not have dissenters’ appraisal rights under California state law.

Under what circumstances would Laserscope be obligated to pay AMS a termination fee if the Merger Agreement is terminated?

      The Merger Agreement provides that Laserscope will pay AMS a termination fee of $25 million in the following circumstances:

•  if the Merger Agreement is terminated by AMS or Laserscope in the event the Laserscope Board or Laserscope takes certain actions opposed to the Offer or the Merger, including a change of recommendation to pursue a superior proposal;

•  if (1) the Merger Agreement is terminated by AMS or Laserscope in the event the Offer has not been consummated by December 31, 2006, (2) prior to termination of the Merger Agreement there has been a third party acquisition proposal for Laserscope and (3) within 12 months after such termination Laserscope is acquired by a third party or enters into a binding agreement for its acquisition; and

•  if the Merger Agreement is terminated by AMS due to a material uncured breach of Laserscope’s representations, warranties or covenants in the Merger Agreement and within 12 months after such termination Laserscope is acquired by a third party or enters into a binding agreement for its acquisition.

Who can I talk to if I have questions about the Offer?

      You can call Georgeson Shareholder Communications, Inc., the Information Agent for the Offer, at 1-866-695-6069 (toll free) or Piper Jaffray & Co., the Dealer Manager for the Offer, at (877) 371-5212 (toll free). See the back cover page of this Offer to Purchase for additional information on how to contact our Information Agent or Dealer Manager.

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To the Holders of Common Stock of Laserscope:

INTRODUCTION

      Kermit Merger Corp., a California corporation (“Purchaser”) and an indirect subsidiary of American Medical Systems Holdings, Inc., a Delaware corporation (“AMS”), hereby offers to purchase all of the outstanding shares of common stock, no par value (the “Shares”), of Laserscope, a California corporation (“Laserscope”), at a purchase price of $31.00 per Share, net to the seller in cash without interest (the “Offer Price”), upon the terms and subject to the conditions set forth in this Offer to Purchase and the related Letter of Transmittal (which, as each may be amended or supplemented from time to time, collectively constitute the “Offer”).

      Tendering shareholders who are record owners of their Shares and tender directly to the Depositary (as defined below) will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 6 of the Letter of Transmittal, stock transfer taxes with respect to the purchase of Shares by Purchaser pursuant to the Offer. However, shareholders that do not complete and sign the Substitute Form W-9 that is included in the Letter of Transmittal (or if such shareholder is not a U.S. person, the appropriate IRS Form W-8 may be subject to a U.S. federal income tax backup withholding at the rate of 28%. Shareholders who hold their Shares in street name (that is, through a broker, bank or other nominee), should consult such institution as to whether it charges any service fees in connection with the tender of such Shares. AMS or Purchaser will pay all charges and expenses of Piper Jaffray & Co., as dealer manager (the “Dealer Manager”), and American Stock Transfer & Trust Company, as depositary (the “Depositary”), incurred in connection with the Offer as well as all charges and expenses of Georgeson Shareholder Communications, Inc., as Information Agent, incurred in connection with a summary advertisement regarding the Offer published in The Wall Street Journal on June 14, 2006. Laserscope will pay all other charges and expenses of the Information Agent incurred in connection with the Offer. See Section 18 of this Offer to Purchase entitled “The Tender Offer — Fees and Expenses.”

      The Offer is conditioned upon, among other things, (i) there being validly tendered and not withdrawn prior to the initial expiration of the Offer, or any permitted or required extension thereof, at least 90% (the “Minimum Condition”) of Laserscope’s “fully diluted shares,” which is defined in the Merger Agreement to include all shares of Laserscope common stock then outstanding plus all shares of Laserscope common stock underlying outstanding options to purchase Laserscope common stock, whether vested or unvested, other than options having an exercise price greater than the Offer Price and options held by holders who have entered into binding written agreements with Laserscope agreeing to refrain from exercising any of their options during any period that the Offer remains pending, and (ii) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and similar statutes or regulations of foreign jurisdictions.

      The Offer will expire at 12:00 midnight, Central Time, on Wednesday, July 12, 2006, unless the Offer is extended.

      The Offer is being made pursuant to an Agreement and Plan of Merger dated as of June 3, 2006, among Laserscope, AMS and Purchaser (the “Merger Agreement”) pursuant to which, after completion of the Offer and satisfaction or waiver of certain conditions, Purchaser will be merged with and into Laserscope and Laserscope will be the surviving corporation (the “Merger”). At the time the Merger becomes effective (the “Effective Time”), each outstanding Share (other than Shares owned by AMS, Purchaser or Laserscope and Shares held by shareholders who have properly exercised dissenters’ appraisal rights under the CGCL) will by virtue of the Merger, and without any action by the holder thereof, be cancelled and converted into the right to receive $31.00 per Share in cash, or any higher price per Share paid pursuant to the Offer, without interest thereon (the “Merger Consideration”). The Merger Agreement is more fully described in Section 11 of this Offer to Purchase entitled “The Tender Offer — The Merger Agreement; Other Arrangements.” Certain United States federal income tax consequences of the sale of Shares pursuant to the Offer and the Merger are discussed in Section 5 of this Offer to Purchase entitled “The Tender Offer — U.S. Federal Income Tax Consequences.”

      The Laserscope Board, at a meeting held on June 3, 2006, by the unanimous vote of all directors (a) determined the Merger Agreement and the transactions contemplated by the Merger Agreement, including the

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Offer and the Merger, to be advisable and in the best interests of Laserscope and its shareholders, (b) approved and adopted the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger, (c) determined that it was in the best interests of Laserscope and its shareholders to enter into the Merger Agreement and consummate the Offer and the Merger on the terms and conditions set forth in the Merger Agreement, and (d) recommended that Laserscope shareholders accept the Offer and, to the extent shareholder action is required by applicable law, approve and adopt the Merger Agreement and the transactions contemplated thereby.

      Laserscope has informed Purchaser that, as of June 2, 2006, there were 22,396,973 Shares issued and outstanding and there were 1,604,390 Shares reserved for issuance pursuant to outstanding options under Laserscope’s stock option plans. As of the date of this Offer to Purchase, neither AMS nor Purchaser beneficially owns any Shares or any rights to acquire Shares of Laserscope. See Section 12 of this Offer to Purchase entitled “The Tender Offer — Purpose of the Offer and the Merger; Plans for Laserscope.”

      In order to facilitate the satisfaction of the Minimum Condition, as part of the Merger Agreement, Laserscope granted to Purchaser an irrevocable option (the “Top-Up Option”) to purchase the number of newly-issued Shares at a per share purchase price equal to the Offer Price that, when added to the number of Shares owned by Purchaser immediately following consummation of the Offer, results in Purchaser owning 90% of the fully diluted shares (the “Top-Up Option”). However, the number of Shares subject to the Top-Up Option is limited to the number of Shares authorized and available for issuance and, in any event, cannot exceed 19.9% of the total number of Shares outstanding immediately prior to such issuance (collectively, the “Top-Up Limitations”). If the Top-Up Option is exercised by Purchaser (resulting in Purchaser and AMS owning 90% or more of the fully diluted shares), Purchaser will be able to effect a short-form merger under the CGCL, subject to the terms and conditions of the Merger Agreement. For a description of the Top-Up Option, see Section 11 of this Offer to Purchase entitled “The Tender Offer — The Merger Agreement; Other Arrangements — The Top-Up Option.”

      The purpose of the Offer is for AMS, indirectly through Purchaser, to acquire a voting interest in Laserscope as the first step in a business combination. If, as of the initial expiration of the Offer or any permitted or required extension thereof, and subject to any applicable termination rights under the Merger Agreement, the number of Shares validly tendered and not properly withdrawn is:

•  less than 90% but more than 70% of the fully diluted shares, Purchaser will have a one time right, exercisable in its sole discretion, to extend the Offer for up to 10 business days; or

•  less than 90% but more than 70% of the fully diluted shares or less than 49.9% but more than 35% of the fully diluted shares, Laserscope will have a one time right, exercisable in its sole discretion, to require Purchaser to extend the Offer for up to 10 business days.

      If, on the initial expiration date of the Offer or any permitted or required extension thereof, and subject to any applicable termination rights under the Merger Agreement, the number of Shares validly tendered and not properly withdrawn is less than 90% but more than 49.9% of the fully diluted shares, Purchaser is required, upon the request of Laserscope, to:

•  waive the Minimum Condition, consummate the Offer, subject only to removal or waiver of any other outstanding conditions to the Offer, and exercise the Top-Up Option, but only to the extent that doing so, after giving effect to the Top-Up Limitations, would result in Purchaser owning 90% of the fully diluted shares; or

•  waive the Minimum Condition, amend the Offer to reduce the number of Shares subject to the Offer to the Revised Minimum Condition of 49.9% of the fully diluted shares and, subject only to the removal or waiver of any other outstanding conditions to the Offer, consummate the Offer by purchasing, on a pro rata basis, the number of Shares comprising the Revised Minimum Condition.

      In no event shall Purchaser be required to accept for payment, or pay for, Shares if the number of Shares tendered pursuant to the Offer and not withdrawn at the expiration of the Offer is less than the number of Shares comprising the Revised Minimum Condition. See Sections 1 and 11 of this Offer to Purchase entitled “The Tender Offer — Terms of the Offer” and “The Tender Offer — The Merger Agreement; Other Arrangements,” respectively.

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      The consummation of the Merger is subject to the satisfaction or waiver of certain conditions, including the approval and adoption of the Merger Agreement by the requisite vote of the Laserscope shareholders, if required by the CGCL. Under the CGCL, if Purchaser acquires, pursuant to the Offer or otherwise, at least 90% of the Shares then outstanding, it will be able to effect the Merger without a vote of the Laserscope shareholders. In such event, AMS, Purchaser and Laserscope have agreed to take, subject to the satisfaction or waiver of the conditions to the Merger set forth in the Merger Agreement, all necessary and appropriate action to cause the Merger to be effective as soon as practicable after the acceptance for payment and purchase of Shares pursuant to the Offer, without a meeting of shareholders of Laserscope, in accordance with Section 1110 of the CGCL (the “Short-Form Merger”). This Offer to Purchase also constitutes notice pursuant to Section 1110 of the CGCL that if Purchaser acquires at least 90% of the fully diluted shares, AMS and Purchaser will cause the Short-Form Merger to become effective without any further notice to Laserscope shareholders.

      Under the CGCL, the merger consideration paid to the shareholders of Laserscope may not be cash if AMS and Purchaser own, directly or indirectly, more than 50% but less than 90% of the then outstanding Shares, unless either all the shareholders of Laserscope consent to the Merger or the Commissioner of Corporations of the State of California approves, after a hearing, the terms and conditions of the Merger and the fairness thereof. If, pursuant to the Offer or otherwise, Purchaser does not acquire Shares that, taken together with Shares owned by AMS, represent at least 90% of the fully diluted shares as of any scheduled expiration date of the Offer, and Purchaser instead amends the Offer to reduce the number of Shares subject to the Offer to the Revised Minimum Condition, then Purchaser would own 49.9% of the Shares then outstanding upon consummation of the Offer, and would thereafter solicit the approval of the Merger and the Merger Agreement by a majority vote of the Laserscope shareholders. Under such circumstances, a significantly longer period of time will be required to effect the Merger. See Sections 11, 15 and 17 of this Offer to Purchase entitled “The Tender Offer — The Merger Agreement; Other Arrangements,” “The Tender Offer — Certain Conditions of the Offer” and “The Tender Offer — Dissenters’ Appraisal Rights,” respectively.

      Laserscope shareholders do not have dissenters’ appraisal rights in connection with the Offer. However, if the Merger is consummated, certain holders of Shares who fully comply with and meet all the requirements of Chapter 13 of the CGCL (“Qualifying Shareholders”), may have certain rights to dissent and to require Laserscope to purchase their Shares for cash at “fair market value.” See Section 17 of this Offer to Purchase entitled “The Tender Offer — Dissenters’ Appraisal Rights.”

      The Merger Agreement provides that, effective upon consummation of the Offer, AMS shall, subject to compliance with The Nasdaq National Market corporate compliance requirements and Section 14(f) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), be entitled to designate the number of directors, rounded up to the next whole number, on the Laserscope Board that equals the product of (i) the total number of directors on the Laserscope Board (giving effect to the election of any additional directors) and (ii) the percentage that the number of Shares owned by AMS or Purchaser (including Shares accepted for payment in connection with the Offer) bears to the total number of Shares then outstanding, and Laserscope shall take all action necessary to cause AMS’ designees to be elected or appointed to the Laserscope Board, including increasing the number of directors, or seeking and accepting resignations of incumbent directors, or both; provided that, prior to the Effective Time, the Laserscope Board shall always have at least two directors who were directors on the Laserscope Board prior to the consummation of the Offer.

      Shareholder Agreements. Concurrently with the execution and delivery of the Merger Agreement, AMS entered into Shareholder Agreements dated June 3, 2006 (the “Shareholder Agreements”) with each of Laserscope’s directors and certain of its executive officers. Pursuant to these agreements, these individuals have agreed, among other things, to tender into the Offer, and not withdraw, all outstanding Shares they hold of record or “beneficially own,” (other than any Shares disclaimed by these shareholders), and to vote all such Shares in favor of the approval of the Merger Agreement and the Merger, to the extent a shareholder vote is required by applicable law. The Shares and options to acquire Shares represented by the Shareholder Agreements constitute approximately 3.6% of the Shares and options to acquire Shares outstanding as of June 1, 2006.

      Retention and Option Lock-Up Agreements. AMS has agreed to provide retention and severance packages for Laserscope employees and, in return, employees receiving these benefits will be required to agree to refrain from

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exercising any of their options to purchase Shares at any time prior to the earlier of the Effective Time or the termination of the Merger Agreement (excluding, however, any options that would otherwise expire before the Effective Time according to their terms). These agreements would have the effect of removing any options held by the employee executing the agreement from the calculation of “fully diluted shares.”

      The Merger Agreement, the Shareholder Agreements and the Retention and Lock-Up Agreements are more fully described in Section 11 of this Offer to Purchase entitled “The Tender Offer — The Merger Agreement; Other Arrangements.”

      THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY AND IN THEIR ENTIRETY BEFORE YOU MAKE ANY DECISION REGARDING THE OFFER.

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THE TENDER OFFER

1. Terms of the Offer.

      Upon the terms and subject to the conditions of the Offer (including the terms and conditions of any extension or amendment, if the Offer is extended or amended), Purchaser will accept for payment and pay the Offer Price for all Shares validly tendered and not properly withdrawn pursuant to the procedures set forth in Section 4 of this Offer to Purchase prior to 12:00 midnight, Central Time, on Wednesday, July 12, 2006 (the “Expiration Date”). If Purchaser extends the deadline for tendering Shares in accordance with the Merger Agreement, the term “Expiration Date” will mean the latest time and date on which the Offer, as so extended, expires.

      The Offer is conditioned upon, among other things, satisfaction of the Minimum Condition, expiration or termination of any applicable waiting period under the HSR Act and similar statutes or regulations of foreign jurisdictions and certain other terms and conditions set forth in the Merger Agreement (collectively, the “Offer Conditions”). See Section 15 of this Offer to Purchase entitled “Certain Conditions of the Offer.”

      We expressly reserve the right to waive any of the Offer Conditions and to make any change in the terms or conditions of the Offer. However, in the Merger Agreement, we have agreed that, without the prior written consent of Laserscope, we will not make any change that:

•  changes the form or amount of consideration to be paid (other than by adding consideration) or changes the number of Shares sought in the Offer;

•  imposes any conditions to the Offer other than the Offer Conditions or modifies any of the Offer Conditions (other than to waive the Offer Conditions to the extent permitted by the Merger Agreement);

•  changes or waives the Minimum Condition, except as required pursuant to the Merger Agreement as described below in this Section 1;

•  extends the Offer beyond the initial Expiration Date, except as permitted or required by the Merger Agreement, as described below in this Section 1; or

•  changes the terms of the Offer in any other manner that is adverse to the Laserscope shareholders.

      Subject to the terms of the Offer and the Merger Agreement, satisfaction of the Minimum Condition (subject to any revisions thereof required by the Merger Agreement), and the removal or waiver to the extent permitted by the Merger Agreement of any other Offer Conditions, Purchaser shall accept for payment all Shares validly tendered and not properly withdrawn pursuant to the Offer as soon as it is permitted to do so under applicable law and shall pay for all such Shares promptly after acceptance.

      Extension of the Offer. Notwithstanding anything to the contrary contained in the Merger Agreement, but subject to the parties’ termination rights under the Merger Agreement, the Offer may be extended as follows:

•  By Purchaser:

•  for an additional period of not more than 10 business days if, immediately prior to the initial expiration of the Offer, the number of Shares validly tendered and not properly withdrawn is at least 70% but less than 90% of the fully diluted shares; or

•  for any period required by any rule, regulation, interpretation or position of the SEC applicable to the Offer.

•  Upon the request of Laserscope for an additional period of not more than 10 business days if, immediately prior to the initial expiration of the Offer, the number of Shares validly tendered and not properly withdrawn is either:

•  greater than 35% but less than 49.9% of the fully diluted shares; or

•  greater than 70% but less then 90% of the fully diluted shares.

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•  At the one-time option of Purchaser or Laserscope (so long as it has not breached in any material respect its non-solicitation obligations under the Merger Agreement) for an additional period of not more than 10 business days if, immediately prior to the initial expiration of the Offer or any permitted or required extension thereof, an unsolicited third party acquisition proposal has been made with respect to Laserscope and remains pending.

•  At the obligation of Purchaser if, immediately prior to the initial expiration date of the Offer or any permitted or required extension thereof, the Minimum Condition (subject to any revisions thereof required by the Merger Agreement) has been satisfied but any of the other Offer Conditions exists and has not been waived. In any such case, the extension will last until the earlier of the removal or waiver of all such other Offer Conditions or the termination of the Merger Agreement.

      Except as set forth above, the Expiration Date of the Offer shall not be extended without the prior written consent of Laserscope.

      Any extension, delay, termination, waiver or amendment of the Offer will be followed as promptly as practicable by public announcement. An announcement, in the case of an extension, will be made no later than 9:00 a.m., Central Time, on the next business day after the previously scheduled expiration of the Offer, in accordance with the public announcement requirements of Rule 14e-1(d). Subject to applicable law (including Rules 14d-4(d) and 14d-6(c) under the Exchange Act, which require that material changes be promptly disseminated to shareholders in a manner reasonably designed to inform them of such changes) and without limiting the manner in which Purchaser may choose to make any public announcement, Purchaser shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release.

      Required Revisions to the Minimum Condition. If, at the initial expiration of the Offer or any permitted or required extension thereof, the Minimum Condition is not satisfied but at least 49.9% of the fully diluted shares have been validly tendered and not properly withdrawn, then Laserscope has the right to require Purchaser to exercise the Top-Up Option, but only to the extent that doing so, after giving effect to the Top-Up Limitations, would result in Purchaser owning 90% of the fully diluted shares. In such event, Purchaser would be obligated to reduce the Minimum Condition to the percentage of the fully diluted shares then tendered and consummate the Offer, subject only to removal or waiver of any other outstanding Offer Conditions.

      However, if at the expiration of the Offer or any permitted or required extension thereof, the number of Shares validly tendered and not properly withdrawn is greater than 49.9% of the fully diluted shares but less than the percentage of the fully diluted shares necessary to require the exercise of the Top-Up Option, then Laserscope has the right to require Purchaser to waive the Minimum Condition and amend the Offer to reduce the number of Shares that Purchaser is required to purchase to the Revised Minimum Condition of 49.9% of the fully diluted shares.

      In the event the Revised Minimum Condition becomes applicable to the Offer, Purchaser would be obligated to consummate the Offer as to the number of Shares constituting 49.9% of the fully diluted shares, subject only to removal or waiver of any other outstanding Offer Conditions. In such event, if more than 49.9% of the fully diluted shares have been validly tendered and not properly withdrawn as of the expiration of the Offer, Purchaser will reduce the number of Shares it purchases from each tendering shareholder by the same proportion as it reduces the number of Shares purchased from all other tendering shareholders.

      In no event shall Purchaser be required to accept for payment, or pay for, any Shares if the number of Shares tendered pursuant to the Offer and not properly withdrawn at the expiration of the Offer is less than the number of Shares comprising the Revised Minimum Condition.

      Dissemination of the Offer. Laserscope has provided AMS and Purchaser with its shareholder list and security position listings for the purpose of disseminating the Offer to Laserscope shareholders. This Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of Shares whose names appear on Laserscope’s shareholder list and will be furnished, for subsequent transmittal to beneficial owners of Shares, to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the shareholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing.

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2. Acceptance of Payment and Payment for Shares.

      Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), Purchaser will accept for payment, purchase and pay for all Shares which have been validly tendered and not properly withdrawn pursuant to the Offer at the earliest time following expiration of the Offer when all Offer Conditions described in Section 15 of this Offer to Purchase entitled “— Certain Conditions of the Offer” have been removed or waived by Purchaser. Subject to the Merger Agreement and any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating to Purchaser’s obligation to pay for or return tendered Shares promptly after termination or withdrawal of the Offer), Purchaser expressly reserves the right to delay the acceptance for payment of or the payment for any tendered Shares in order to comply in whole or in part with any applicable laws, including, without limitation, the HSR Act and similar foreign statutes and regulations. See Section 16 of this Offer to Purchase entitled, “The Tender Offer — Certain Legal Matters; Regulatory Approvals.”

      For purposes of the Offer, Purchaser will be deemed to have accepted for payment (and thereby purchased) Shares validly tendered and not properly withdrawn as, if and when Purchaser gives oral or written notice to the Depositary of Purchaser’s acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price for the Shares with the Depositary, which will act as agent for tendering shareholders for the purposes of receiving payments from Purchaser and transmitting payments to tendering shareholders.

      Under no circumstances will Purchaser or AMS pay interest on the purchase price for any Shares accepted for payment, regardless of any extension of the Offer or any delay in making payment.

      The reservation by Purchaser of the right to delay the acceptance, purchase of or payment for Shares is subject to the provisions of Rule 14e-1(c) under the Exchange Act, which requires Purchaser to pay the consideration offered or return the Shares deposited by or on behalf of tendering shareholders promptly after the termination or withdrawal of the Offer.

      In all cases, Purchaser will pay for Shares purchased in the Offer only after timely receipt by the Depositary of (i) the certificates representing the Shares (the “Share Certificates”) or confirmation of a book-entry transfer of such Shares (a “Book-Entry Confirmation”) into the Depositary’s account at The Depository Trust Company (the “Book-Entry Transfer Facility”) pursuant to the procedures set forth in Section 3 of this Offer to Purchase entitled “— Procedure for Accepting the Offer and Tendering Shares;” (ii) the appropriate Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees or, in the case of a book-entry transfer, an Agent’s Message (as defined below) in lieu of the Letter of Transmittal; and (iii) any other documents required by the Letter of Transmittal.

      “Agent’s Message” means a message transmitted by a Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which message states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares which are the subject of the Book-Entry Confirmation that the participant has received and agrees to be bound by the terms of the Letter of Transmittal and that Purchaser may enforce the Letter of Transmittal against the participant.

      If Purchaser does not purchase any tendered Shares pursuant to the Offer for any reason, or if a holder of Shares submits Share Certificates representing more Shares than are tendered, Share Certificates representing un-purchased or un-tendered Shares will be returned, without expense to the tendering shareholder (or, in the case of Shares tendered by book-entry transfer into the Depositary’s account at the Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3 of this Offer to Purchase entitled “— Procedures for Accepting the Offer and Tendering Shares,” such Shares will be credited to an account maintained at the Book-Entry Transfer Facility), as promptly as practicable following the expiration or termination of the Offer.

      If, prior to the Expiration Date, Purchaser increases the Offer Price, Purchaser will pay the increased Offer Price to all holders of Shares that are purchased in the Offer, whether or not the Shares were tendered before the increase in the Offer Price.

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      Purchaser reserves the right to transfer or assign, in whole or in part, from time to time, to one or more direct or indirect subsidiaries of AMS, the right to purchase all or any portion of the Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve Purchaser of its obligations under the Offer and will in no way prejudice the rights of tendering shareholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer.

3. Procedures for Accepting the Offer and Tendering Shares.

      Valid Tenders. To validly tender Shares pursuant to the Offer, a shareholder must comply with one of the following procedures:

•  for Shares held as physical certificates, a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) in accordance with the instructions of the Letter of Transmittal, with any required signature guarantees, Share certificates and any other documents required by the Letter of Transmittal must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase on or prior to the Expiration Date;

•  for Shares held in book-entry form, such Shares must be properly delivered pursuant to the procedures for book-entry transfer described below and a confirmation of such delivery received by the Depositary, which confirmation must include an Agent’s Message if the tendering shareholder has not delivered a Letter of Transmittal, on or prior to the Expiration Date; or

•  the tendering shareholder must comply with the guaranteed delivery procedures set forth below under “— Guaranteed Delivery” before the Expiration Date.

      Book-Entry Transfer. The Depositary will establish accounts with respect to the Shares at the Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the system of the Book-Entry Transfer Facility may make a book-entry delivery of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary’s account at the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility’s procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer at the Book-Entry Transfer Facility, either the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent’s Message in lieu of the Letter of Transmittal, and any other required documents, must, in any case, be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase on or prior to the Expiration Date, or the tendering shareholder must comply with the guaranteed delivery procedure set forth below.

      Delivery of documents to the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility’s procedures does not constitute delivery to the Depositary. The method of delivery of Share Certificates, the Letter of Transmittal and all other required documents, including delivery through the Book-Entry Transfer Facility, is at the option and risk of the tendering shareholder, and the delivery will be deemed made only when actually received by the Depositary (including, in the case of a book-entry transfer, a Book-Entry Confirmation). If delivery is by mail, registered mail with return receipt requested and properly insured is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

      Signature Guarantees. No signature guarantee is required on the Letter of Transmittal (i) if the Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this Section 3 includes any participant in the Book-Entry Transfer Facility’s systems whose name appears on a security position listing as the owner of the Shares) of Shares tendered therewith and such registered holder has not completed either the box labeled “Special Delivery Instructions” or the box labeled “Special Payment Instructions” on the Letter of Transmittal, or (ii) if Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agents Medallion Program, the Nasdaq Stock Market Guarantee Program, the Stock Exchange Medallion Program or any other “eligible guarantor institution” as defined in Rule 17Ad-15 under the Exchange Act (each of the foregoing, an “Eligible Institution”). In all other cases, all signatures on a Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 1 of the Letter of Transmittal.

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      If a Share Certificate is registered in the name of a person or persons other than the signer of the Letter of Transmittal, or if payment is to be made or delivered to a person other than the registered holder, or if a Share Certificate for un-purchased Shares is to be issued or returned to a person other than the registered holder, then the Share Certificate must be endorsed or accompanied by a duly executed stock power, in either case signed exactly as the name of the registered holder appears on the Share Certificate, with the signature on such Share Certificate or stock power guaranteed by an Eligible Institution as provided in the Letter of Transmittal. See Instructions 1 and 5 of the Letter of Transmittal.

      Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to the Offer and the Share Certificates evidencing such shareholder’s Shares are not immediately available or such shareholder cannot deliver the Share Certificates and all other required documents to the Depositary on or prior to the Expiration Date, or such shareholder cannot complete the procedures for delivery by book-entry transfer on a timely basis, the shareholder’s Shares may nevertheless be tendered, provided that all of the following conditions are satisfied:

•  the tender is made by or through an Eligible Institution;

•  the Depositary receives, as described below, a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by Purchaser, on or prior to the Expiration Date; and

•  the Depositary receives the Share Certificates (or a Book-Entry Confirmation) evidencing all tendered Shares, in proper form for transfer, in each case together with the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message), and any other documents required by the Letter of Transmittal, within three Nasdaq National Market trading days after the date of execution of such Notice of Guaranteed Delivery.

      The Notice of Guaranteed Delivery may be delivered by hand or mail or transmitted by telegram or facsimile transmission to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the form of Notice of Guaranteed Delivery distributed with this Offer to Purchase.

      Notwithstanding any other provision of the Offer, Purchaser will pay for Shares only after timely receipt by the Depositary of: (i) Share Certificates representing, or Book-Entry Confirmation with respect to, the Shares, (ii) a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), together with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message), and (iii) any other documents required by the Letter of Transmittal.

      Determination of Validity. All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by Purchaser in its sole discretion, which determination will be final and binding on all parties. Purchaser reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance for payment of which may, in the opinion of its counsel, be unlawful. Subject to the terms of the Merger Agreement, Purchaser also reserves the absolute right to waive any condition of the Offer to the extent permitted by applicable law.

      Subject to the Merger Agreement, Purchaser’s interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto) will be final and binding. No tender of Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived. None of AMS, Purchaser, or any of their respective affiliates or assigns, the Dealer Manager, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification.

      Appointment as Proxy. By executing the Letter of Transmittal, a tendering shareholder irrevocably appoints designees of Purchaser as such shareholder’s agents, attorneys-in-fact and proxies, with full power of substitution, in the manner set forth in the Letter of Transmittal, to the full extent of such shareholder’s rights with respect to the Shares tendered by such shareholder and accepted for payment by Purchaser and with respect to any and all other Shares or other securities or rights issued or issuable in respect of those Shares on or after the date of this Offer to Purchase. All such powers of attorney and proxies will be considered irrevocable and coupled with an interest in the tendered Shares. This appointment will be effective when, and only to the extent that, Purchaser accepts such Shares for payment. Upon such acceptance for payment, all other powers of attorney and proxies given by such shareholder

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with respect to such Shares and such other securities or rights prior to such payment will be revoked without further action, and no subsequent powers of attorney or proxies may be given, nor may any subsequent written consent be executed by such shareholder (and, if given or executed, will not be deemed to be effective) with respect thereto. With respect to the Shares for which the appointment is effective, the designees of Purchaser will be empowered to exercise all voting and other rights of such shareholder as the designees, in their sole discretion, may deem proper at any annual or special meeting of Laserscope shareholders or any adjournment or postponement thereof, or by written consent in lieu of any such meeting or otherwise. In order for Shares to be deemed validly tendered, immediately upon the acceptance for payment of such Shares, Purchaser or its designees must be able to exercise full voting rights to the extent permitted under applicable law with respect to such Shares.

      Tender Constitutes Binding Agreement. Purchaser’s acceptance for payment of Shares tendered pursuant to any of the procedures described above will constitute a binding agreement between Purchaser and the tendering shareholder upon the terms and subject to the conditions of the Offer.

4. Withdrawal Rights.

      Tenders of Shares made pursuant to the Offer are irrevocable, except that such Shares may be withdrawn (i) at any time on or prior to the Expiration Date, and (ii) at any time after August 13, 2006 (or such later date as may apply if the Offer is extended), unless accepted for payment by Purchaser pursuant to the Offer on or prior to that date. See Section 1 of this Offer to Purchase, “— Terms of the Offer.”

      For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover page of this Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and, if Share Certificates have been tendered, the name of the registered holder of such Shares if different from that of the person who tendered such Shares. If Share Certificates representing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Share Certificates, the serial numbers shown on such Share Certificates must be submitted to the Depositary and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution, except in the case of Shares tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer as set forth in Section 3 of this Offer to Purchase entitled “— Procedures for Accepting the Offer and Tendering Shares,” the notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares, in which case a notice of withdrawal will be effective if delivered to the Depositary by any method of delivery described in the first sentence of this paragraph.

      If Purchaser extends the Offer, is delayed in its acceptance for payment of Shares, or is unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to Purchaser’s rights under the Offer, the Depositary may nevertheless retain tendered Shares on behalf of Purchaser, and such Shares may not be withdrawn, except to the extent that tendering shareholders are entitled to and duly exercise their withdrawal rights as described in this Section 4. Any such delay will be by an extension of the Offer to the extent required by law.

      Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn will be considered not validly tendered for purposes of the Offer. However, withdrawn Shares may be tendered again at any time on or prior to the Expiration Date by following one of the procedures described in Section 3 of this Offer to Purchase entitled “— Procedures for Accepting the Offer and Tendering Shares.”

      All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by AMS and Purchaser in their sole discretion, whose determination will be final and binding. None of AMS, Purchaser, Laserscope or their respective affiliates or assigns, the Dealer Manager, the Depositary, the Information Agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification.

5. U.S. Federal Income Tax Consequences.

      The following is a summary of the United States federal income tax consequences that are generally applicable to holders of Shares who exchange such shares for cash pursuant to the Offer or the Merger. This discussion is based

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on currently existing federal income tax laws, all of which are subject to change. Any such change, which may or may not be retroactive, could alter the tax consequences of the Offer and the Merger that are described below. Shareholders should be aware that this discussion does not deal with all federal income tax considerations that may be relevant to particular shareholders in light of their individual circumstances. For example, this discussion does not address the tax consequences of the Offer and the Merger to shareholders who are dealers in securities, who are foreign persons, or who do not hold their Shares as capital assets. Nor does it address the tax consequences of the Offer or the Merger to shareholders who acquired their Shares as part of a position in a “straddle” or as part of a “hedging” or “conversion” transaction or through the exercise of employee stock options or otherwise as compensation. It also does not address shareholders who are otherwise subject to special tax treatment under the Internal Revenue Code of 1986, as amended (such as financial institutions, insurance companies, tax-exempt entities and regulated investment companies). In addition, the following discussion does not address the tax consequences of the Offer or the Merger to shareholders under foreign, state, or local tax laws.

      All shareholders are urged to consult their own tax advisors to determine the particular tax consequences to them of the Offer and the Merger, including the applicable federal, state, local and foreign tax consequences.

      In general, the receipt of cash by the holders of Shares pursuant to the Offer and/or the Merger will constitute a taxable transaction for United States federal income tax purposes. For United States federal income tax purposes, a tendering shareholder would generally recognize gain or loss in an amount equal to the difference between the amount of cash received by the shareholder pursuant to the Offer and/or exchanged in the Merger and the shareholder’s tax basis for the Shares that are tendered and purchased pursuant to the Offer and/or the Merger. Generally, gain or loss must be calculated separately for each identifiable block of Shares (i.e., Shares acquired at the same cost in a single transaction). If tendered Shares are held by a tendering shareholder as capital assets, that gain or loss will be a capital gain or loss. Any such capital gain or loss will be long term if, as of the date of the disposition of its Shares, the shareholder held such Shares for more than one year, or will be short term if, as of such date, the shareholder held such Shares for one year or less. In the case of Laserscope shareholders who are individuals, long term capital gain is currently subject to tax at a favorable tax rate. There are limitations on the deductibility of capital losses.

      Backup U.S. Federal Income Tax Withholding. Under the United States federal income tax laws, the payments made by the Depositary to shareholders of Laserscope, pursuant to the Offer and/or the Merger may, under certain circumstances, be subject to backup withholding at a rate of 28%. To avoid backup withholding with respect to payments made pursuant to the Offer and/or the Merger, each shareholder must provide the Depositary with proof of an applicable exemption or a correct taxpayer identification number, and must otherwise comply with the applicable requirements of the backup withholding rules. The Letter of Transmittal provides instructions on how to provide the Depositary with information to prevent backup withholding with respect to cash received pursuant to the Offer and/or the Merger. See Instruction 9 of the Letter of Transmittal. Any amount withheld under the backup withholding rules is not an additional tax. Rather, the tax withheld will be credited against the actual tax liability of the persons subject to backup withholding.

      The foregoing is intended as a general summary only. Because the tax consequences to a particular shareholder may differ based on that shareholder’s particular circumstances, each shareholder should consult his or her own tax adviser regarding the tax consequences of the Offer and the Merger.

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6. Price Range of Shares; Dividends.

      The Shares trade on The Nasdaq National Market under the symbol “LSCP.” The following tables set forth, for the calendar quarters shown, the high and low sale prices for the Shares on The Nasdaq National Market based on published financial sources.

Laserscope Common Stock

		High		Low
Fiscal 2004
	First Quarter	$	27.85	$	14.91
	Second Quarter		34.18		22.54
	Third Quarter		27.94		15.27
	Fourth Quarter		36.68		18.83
Fiscal 2005
	First Quarter	$	37.11		26.55
	Second Quarter		42.47		28.59
	Third Quarter		43.67		27.25
	Fourth Quarter		30.47		20.52
Fiscal 2006
	First Quarter	$	27.49		20.12
	Second Quarter (through 6/13/06)		30.72		19.71

      Laserscope has never paid any dividends on its Shares and the Merger Agreement prohibits Laserscope from declaring or paying any dividends without AMS’ approval.

Shareholders are urged to obtain a current market quotation for the Shares.

      In the Merger Agreement, Laserscope has represented to AMS and Purchaser that as of June 2, 2006, there were: 22,396,973 Shares issued and outstanding; 844,411 Shares reserved for issuance pursuant to Laserscope’s 2004 Stock Option Plan (of which 802,571 Shares are subject to outstanding options); 522,587 Shares reserved for issuance pursuant to Laserscope’s 1994 Stock Option Plan (all of which are subject to outstanding options), 126,760 Shares reserved for issuance pursuant to Laserscope’s 1999 Retention Stock Option Plan (of which 115,232 Shares are subject to outstanding options); 404,000 Shares reserved for issuance pursuant to Laserscope’s 1999 Directors Stock Option Plan (of which 164,000 Shares are subject to outstanding options); and 92,692 Shares reserved for issuance pursuant to Laserscope’s 1999 Employee Stock Purchase Plan. On June 2, 2006, the last full day of trading before the public announcement of the execution of the Merger Agreement, the closing price of the Shares on The Nasdaq National Market was $21.41 per Share. On June 13, 2006, the last full day of trading before the commencement of the Offer, the closing price of the Shares on The Nasdaq National Market was $30.68 per Share.

7. Certain Information Concerning Laserscope.

      Laserscope is a California corporation with its principal offices located at 3070 Orchard Drive, San Jose, California 95134-2011. The telephone number of Laserscope is (408) 943-0636.

      According to Laserscope’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005, Laserscope designs, manufactures, sells and services, on a worldwide basis, an advanced line of medical laser systems and related energy delivery devices for the medical office, outpatient surgical center and hospital markets. Its product portfolio consists of lasers and other light-based systems and related energy delivery devices for medical applications. Laserscope’s primary medical markets include urology, dermatology and aesthetic surgery. Its secondary markets include ear, nose and throat surgery, general surgery, gynecology, photo-dynamic therapy and other surgical specialties.

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      Laserscope is subject to the informational filing requirements of the Exchange Act and, in accordance therewith, is required to file periodic reports, proxy statements and other information with the SEC relating to its business, financial condition and other matters. Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Information regarding the public reference facilities may be obtained from the SEC by telephoning 1-800-SEC-0330. Laserscope’s filings are also available to the public on the SEC’s Internet site (http://www.sec.gov). Copies of such materials may also be obtained by mail from the Public Reference Section of the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549 at prescribed rates.

8. Certain Information Concerning AMS and Purchaser.

      Purchaser is a California corporation and, to date, has engaged in no activities other than those incident to its formation and the Offer and the Merger. Purchaser is currently an indirect subsidiary of AMS. The principal executive offices of Purchaser are located at 10700 Bren Road West, Minnetonka, Minnesota 55343 and Purchaser’s telephone number is (952) 930-6000. AMS is a Delaware corporation with its principal executive offices located at 10700 Bren Road West, Minnetonka, Minnesota 55343. The telephone number of AMS is (952) 930-6000.

      The name, citizenship, business address, principal occupation or employment and five-year employment history for each of the directors and executive officers of AMS and Purchaser and certain other information are set forth in Schedule I to this Offer to Purchase.

      Except as described elsewhere in this Offer to Purchase or in Schedule I hereto: (i) none of AMS, Purchaser or, to the best knowledge of AMS and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase or any associate or majority-owned subsidiary of AMS or Purchaser or any of the persons so listed beneficially owns or has any right to acquire, directly or indirectly, any Shares; and (ii) none of AMS, Purchaser or, to the best knowledge of AMS and Purchaser, any of the persons or entities referred to above nor any director, executive officer or subsidiary of any of the foregoing has effected any transaction in the Shares during the past 60 days.

      Except as provided in the Merger Agreement or as otherwise described in this Offer to Purchase, none of AMS, Purchaser or, to the best knowledge of AMS and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of Laserscope, including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or voting of such securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss, guarantees of profits, division of profits or loss or the giving or withholding of proxies.

      Except as set forth in this Offer to Purchase: (i) none of AMS, Purchaser or, to the best knowledge of AMS and Purchaser, any of the persons listed on Schedule I to this Offer to Purchase, has had any business relationship or transaction with Laserscope or any of its executive officers, directors or affiliates that is required to be reported under the rules and regulations of the SEC applicable to the Offer; and (ii) there have been no contracts, negotiations or transactions between AMS or any of its subsidiaries or, to the best knowledge of AMS, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and Laserscope or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, a tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets.

      None of the persons listed in Schedule I to this Offer to Purchase has, during the past five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). None of the persons listed in Schedule I to this Offer to Purchase has, during the past five years, been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to federal or state securities laws, or a finding of any violation of federal or state securities laws.

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9. Source and Amount of Funds.

      The Offer is not conditioned upon any financing arrangements.

      AMS and Purchaser estimate that the total amount of funds required to purchase all of the outstanding Shares that AMS or its affiliates do not own pursuant to the Offer and the Merger, and to pay related fees and expenses, will be approximately $757 million. Purchaser expects to obtain the funds necessary to consummate the Offer and the Merger from AMS.

      AMS’ primary operating subsidiary, American Medical Systems, Inc., has received financing commitments to fund the purchase of Shares in the Offer and the Merger in the form of up to $600 million of senior secured financing from CIT Healthcare LLC, and up to $180 million of senior subordinated unsecured financing from Piper Jaffray & Co. and Deephaven Capital Management, LLC. The following summarizes the material terms of the commitments from these lenders, but is qualified in its entirety by the specific terms of the commitment documents.

      The debt to be issued under the senior secured commitment will be rated and have a maturity of six years. Interest rates on the senior secured debt will be set at an applicable margin over LIBOR, based upon public ratings to be received from Moody’s and S&P, and upon market conditions. All obligations under the senior secured debt will be unconditionally guaranteed by, and secured by substantially all of the assets of, AMS and existing and future domestic subsidiaries. The senior secured debt will be subject to mandatory prepayments based upon excess cash flow, all net proceeds of asset sales, all net proceeds of debt or preferred stock issuance, and 50% of net proceeds of any other equity issuance, and voluntary prepayments will be permitted at any time without premium or penalty (but subject to applicable breakage fees and to minimum amounts to be agreed upon). Funding of the senior secured facility is subject to the following material conditions:

•  CIT’s approval of the amount and other material terms of the senior subordinated financing, it being understood that the material terms documented in the senior subordinated commitment letter from Piper Jaffray & Co. and Deephaven Capital Management LLC are, subject to certain limitations, acceptable;

•  consummation of the Offer according to all applicable laws and the Merger Agreement;

•  no “material adverse effect” (substantially as defined in the Merger Agreement), shall have occurred since March 31, 2006 with respect to AMS, certain of its subsidiaries and Laserscope, taken as a whole; and

•  the negotiation, execution and delivery of definitive loan documentation and other customary deliverables evidencing the senior secured financing and the senior subordinated financing.

      The senior subordinated commitment provides that, if funded, the senior subordinated debt will not be rated and will have a maturity of seven years. Interest on the senior subordinated debt will be set at the greater of a rate established in the commitment letter or spread on the three-month LIBOR on the date of the execution and delivery of the commitment letter, in each case plus a spread that will increase on a periodic basis if the debt is not repaid, and which will be subject to additional increases if the notes evidencing the senior subordinated debt remain unrated by Moody’s and S&P or an exchange offer for registered notes is not consummated. AMS will be required to prepay the senior subordinated notes from the net proceeds from its incurrence of any debt or the issuance of any equity or any asset sales, subject to exceptions to be agreed, and must offer to purchase these notes upon a “change of control.” AMS may, at its option, redeem some or all of the senior subordinated notes not more than once every 30 days, and subject to minimum redemption amounts. The senior subordinated debt is subordinated to the senior secured debt discussed above. All obligations under the senior subordinated debt will be guaranteed by existing and future domestic subsidiaries of AMS. Under the senior subordinated commitment, funding of the senior subordinated debt is subject to the following material conditions:

•  no pending or overtly threatened litigation or other proceedings (private or governmental) with respect to the Offer or the Merger that is reasonably likely to result in a “material adverse effect” (as defined in the senior subordinated commitment but substantially as defined in the Merger Agreement);

•  the absence of any change since March 31, 2006 that results in a “material adverse effect;”

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•  the Offer shall be consummated concurrently with the initial funding of the facility in accordance with the Merger Agreement and related acquisition documentation without waiver or amendment thereof unless consented to by each of the requisite lenders; and

•  prior to or concurrently with the initial funding of the senior subordinated debt, the documentation for the senior secured credit facility shall have been executed and delivered, and AMS shall have received gross proceeds from borrowings under the senior secured credit facility.

      AMS is currently actively pursuing lower cost financing options that may include convertible senior subordinated notes. The timing and composition of such financing will be determined based on market conditions.

      AMS currently intends to repay amounts borrowed under the credit facilities or other financing options from available cash on hand and future earnings.

      Except as expressly stated above, no alternate financing plans exist.

10. Background of the Offer; Past Contacts or Negotiations with Laserscope.

      In mid-January 2006, Goldman, Sachs & Co. (“Goldman Sachs”) contacted AMS to inquire as to whether AMS would be interested in a possible acquisition of Laserscope. Laserscope informed AMS that if it desired to evaluate a possible acquisition, AMS would be allowed to meet with senior management of Laserscope following execution of a confidentiality agreement. AMS informed its Board of Directors (the “AMS Board”) of the inquiry AMS received regarding a potential acquisition of Laserscope at a regular meeting of the AMS Board held on February 9, 2006. On February 16, 2006, AMS executed a confidentiality agreement with Laserscope. Goldman Sachs sent to AMS a document describing Laserscope’s business and management team and setting forth certain investment considerations, financial information and other information about Laserscope. In late January, AMS began consulting with Piper Jaffray & Co. (“Piper”) regarding the potential acquisition of Laserscope. AMS formally engaged Piper to act as its financial advisor on March 21, 2006.

      On February 17, 2006, Martin J. Emerson, President and Chief Executive Officer, Ross Longhini, Executive Vice President and Chief Technology Officer, and John Nealon, Senior Vice President, Business Development, of AMS, met with Eric Reuter, President and Chief Executive Officer of Laserscope and Peter Hadrovic, the then Vice President, Legal Affairs and General Counsel of Laserscope. Also attending this meeting were representatives of Piper and representatives of Goldman Sachs. On February 22, 2006, Goldman Sachs sent a letter to Piper inviting AMS to submit a preliminary, non-binding acquisition proposal. AMS conducted preliminary due diligence on Laserscope during January, February and March 2006.

      On March 20, 2006, the AMS Board held a special meeting at which management and representatives of Piper updated the AMS Board on AMS’ discussions with representatives of Laserscope and Goldman Sachs, the results of AMS’ preliminary due diligence of Laserscope, the strategic reasons for the possible acquisition of Laserscope, AMS’ valuation range of Laserscope and AMS’ proposed acquisition structure. The AMS Board authorized AMS to submit an indication of interest to acquire Laserscope in the range of $593 to $668 million.

      On March 24, 2006, AMS submitted a non-binding indication of interest to Laserscope in which AMS valued Laserscope’s equity in the range of $593 to $668 million (approximately $25.75 to $28.85 per share). AMS also stated that the form of acquisition consideration would consist of 50% cash and 50% AMS stock. AMS also stated that it did not desire to own Laserscope’s aesthetics business and, therefore, would require that this business be divested simultaneously with AMS’ acquisition of Laserscope and generate $100 million of pre-tax proceeds for Laserscope. AMS further explained that it desired to work with Laserscope and its advisers to identify companies that might be interested in partnering with AMS to purchase Laserscope’s aesthetics business. Lastly, AMS indicated that it would need to finance the cash portion of its purchase price. On March 24, 2006, representatives of Goldman Sachs contacted representatives of Piper in order to clarify the implications of Laserscope realizing less than $100 million in a divestiture of its aesthetics business. Piper indicated that any value less than $100 million would reduce the value to be received by Laserscope’s shareholders on a dollar for dollar basis.

      On March 29, 2006, representatives of Goldman Sachs, acting at Laserscope’s direction, informed representatives of Piper that (a) the upper end of AMS’ valuation range represented a minimum starting point for valuation based on

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Laserscope’s current product line (exclusive of products to be introduced in 2006), (b) the strategic value associated with Laserscope’s new products (and product acquisitions) to be introduced in 2006 justified a valuation higher than the upper end of this valuation range, and (c) AMS needed to increase the upper end of its valuation range. In addition, representatives of Goldman Sachs asked whether AMS was willing and able to effect an all cash acquisition of Laserscope and whether AMS would be agreeable to a price collar with respect to the stock AMS was offering in an acquisition of Laserscope. Representatives of Goldman Sachs also informed representatives of Piper that Laserscope was not willing to bear the risk associated with a transaction or a valuation conditioned on a concurrent or post-closing divestiture of Laserscope’s aesthetics business.

      On April 7, 2006, Mr. Reuter made a presentation by telephone to Messrs. Longhini, Nealon, and Roychowdhury, Director of Research and Development, regarding the new products that Laserscope intended to introduce in 2006. Mr. Hadrovic and representatives of Goldman Sachs and Piper listened to this call. On April 18, 2006, an in-person follow-up diligence session, primarily related to Laserscope’s products and revenue model, was held in San Jose, California, which was attended by Mr. Reuter, Mr. Hadrovic and Kester Nahen, PhD., Vice President of Applications Research, of Laserscope, Messrs. Emerson, Stephen McGill, Nealon, Roychowdhury, and Andrew Joiner, Vice President of Marketing, of AMS, and representatives of Goldman Sachs and Piper. Following this session, Laserscope demonstrated for AMS its GreenLight PV^® and new GreenLight HPS^® laser systems at a Laserscope facility. Mr. Emerson and Mr. Reuter also met over dinner on the evening of April 18, 2006. On April 26, 2006, representatives of Laserscope (consisting of Mr. Reuter and Derek Bertocci, Vice President Finance and Chief Financial Officer), AMS (consisting of Messrs. Longhini, Nealon, McGill, Carmen Diersen, Executive Vice President and Chief Financial Officer and Scott Etlinger, Vice President of Operations), and representatives of Goldman Sachs and Piper held another diligence session by telephone during which Laserscope provided additional information regarding Laserscope, including operating expense data for the urology division.

      On April 9, 2006, AMS was granted access to Laserscope’s electronic data room for due diligence purposes.

      Between April 12 and 14, 2006, representatives of Goldman Sachs and Piper had several telephone conversations related to Laserscope’s aesthetics business. On behalf of Laserscope, representatives of Goldman Sachs advised Piper of the firms that Laserscope believed might have an interest in acquiring this business and gave Piper permission to contact two companies, subject to execution of appropriate confidentiality agreements. Ultimately, Piper informed Goldman Sachs that none of such firms were interested in completing such a transaction.

      At a regular AMS Board meeting held on April 26, 2006, AMS management updated the AMS Board on the status of due diligence and discussions with Laserscope regarding a possible acquisition. The AMS Board instructed Piper to communicate its revised valuation of $29.00 per share, but that it had the ability to value Laserscope above $29.00 per share depending upon the outcome of its continuing due diligence of Laserscope. In addition, the AMS Board supported management’s decision to acquire the aesthetics business along with the urology business.

      On April 28, 2006, representatives of Goldman Sachs and Piper held a telephone conversation during which Piper, on behalf of AMS, informed Goldman Sachs that AMS had concluded that Laserscope’s aesthetics business warranted a lower valuation than previously indicated and that AMS might be willing to acquire the aesthetics business but that AMS likely would explore the sale of that business if it acquired Laserscope. Piper, on behalf of AMS, informed Goldman Sachs that, based on its work to date, AMS currently valued Laserscope at $29.00 per share, but that it had the ability to value Laserscope above $29.00 per share depending upon the outcome of its continuing due diligence review of Laserscope and specifically the launch of the new GreenLight HPS laser system. At this time, AMS’ proposed structure consisted of cash and AMS stock.

      On April 30, 2006, Goldman Sachs sent AMS a letter outlining the procedures for submitting a firm and final proposal to acquire Laserscope. The letter instructed AMS to submit its proposal no later than May 25, 2006, and, among other things, to state a purchase price and provide a mark-up of a draft merger agreement prepared by Laserscope’s counsel, Orrick, Herrington & Sutcliffe LLP (“Orrick”), which specified the terms of a possible acquisition transaction.

      On May 2, 2006, at the direction of Laserscope, representatives of Goldman Sachs informed AMS that AMS would need to improve its valuation of Laserscope and make a bid above $30.00 per share. Goldman Sachs further

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stressed the particular importance of speed to closing, certainty of closing and certainty of value in connection with the AMS bid. Goldman Sachs and Piper also discussed stock collars and all cash transaction structures.

      Over the next three weeks, AMS continued to conduct extensive due diligence concerning Laserscope. The legal and financial representatives of AMS and Laserscope also held numerous telephone conversations concerning possible transaction structures, forms of acquisition consideration, financing documentation, transaction timing and diligence matters. On May 11, 2006, AMS, along with its financial and legal advisors, participated in a full day of diligence meetings hosted by Laserscope in San Jose, California. During this time period, representatives of both Laserscope and AMS and their financial and legal advisors also participated in several diligence related meetings and conference calls.

      On May 15, 2006, AMS, its advisors and certain members of the AMS Board met to review a preliminary analysis of the various forms of consideration available to AMS in its bid for Laserscope. At the conclusion of this meeting, AMS decided to pursue an all cash bid.

      On May 22, 2006, the AMS Board held a special meeting at which it discussed the AMS bid to acquire Laserscope. Management reviewed the strategic value of Laserscope to AMS and reported on the results of its due diligence investigation. Representatives of Piper presented a valuation analysis, alternatives for financing the acquisition, potential bid structures and the timeline for the potential acquisition. The AMS Board met again on May 24, 2006, to further discuss AMS’ bid to acquire Laserscope. Management and representatives of Piper updated the AMS Board on the results of due diligence activities since the prior meeting of the AMS Board, and the AMS Board authorized AMS to submit a bid to acquire Laserscope.

      On May 25, 2006, AMS submitted its proposal to acquire 100% of the equity of Laserscope for $30.00 per share in cash using a two step acquisition structure, with the first step being the Offer. The AMS proposal stated that it had obtained firm financing commitments from CIT Healthcare LLC (“CIT”) for a senior debt facility and Piper and Deephaven Capital Management LLC (collectively, “Piper/ Deephaven”) for a senior subordinated debt facility.

      On May 26, 2006, representatives of Piper contacted representatives of Goldman Sachs, stating that AMS had offered $30.00 per share. Piper also informed Goldman Sachs that AMS had largely completed its due diligence, although AMS desired to have Mr. Emerson hold a marketing related meeting with Mr. Reuter and certain other executives of Laserscope with respect to Laserscope’s rollout of its new GreenLight HPS^® laser system.

      On May 29, 2006, Goldman Sachs informed Piper that, while AMS’ bid was attractive, the Laserscope Board did not consider the proposed price to be sufficient and the proposed contract terms did not satisfy Laserscope’s goal regarding certainty of closing. The Goldman Sachs representatives acknowledged, however, that AMS had offered a transaction structure which addressed the Laserscope Board’s desire for speed to closing. Goldman Sachs then reviewed with Piper a number of contract issues and advised that these issues needed to be resolved by the end of the week and only then would the issue of value be revisited and only then could a meeting take place between Mr. Reuter and Mr. Emerson.

      On May 30 and 31, 2006, representatives of Oppenheimer and Orrick discussed various aspects of AMS’ mark-up of the draft merger agreement and the commitment letters provided by CIT and Piper/ Deephaven as well as the status of these lenders’ due diligence review of Laserscope. They also discussed a shareholder agreement AMS proposed that would require the directors and officers of Laserscope, among other things, to tender any shares that they own in the Offer, not transfer such shares to any third party and to grant to AMS an irrevocable proxy to vote such shares in favor of the Merger and against any actions that would impede the Merger.

      On June 1, 2006, representatives of Goldman Sachs informed representatives of Piper that Laserscope was prepared to focus on, but not grant exclusivity to, AMS and enter into definitive documents on Sunday, June 4, 2006 if AMS increased its bid to $31.50 per share. On June 2, 2006, the AMS Board held a special meeting at which Oppenheimer and Piper reported on the results of negotiations since AMS had submitted its bid and to consider Laserscope’s proposal. At the conclusion of the meeting, the AMS Board decided not to increase the bid at that time above $30.00 per share. On June 2, 2006, Piper informed Goldman Sachs that the AMS Board had not authorized an increase in the AMS bid. The Goldman Sachs representatives replied that they would relay this message to the Laserscope Board.

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      Later in the morning of June 2, 2006, Messrs. Reuter, Emerson, McGill, Nealon, Bertocci, Hadrovic and Robert Mann, Laserscope’s Vice President of Global Sales and Marketing — Surgical, held a meeting to discuss Laserscope’s plans to launch its new GreenLight HPS^® laser system.

      Between June 1 and June 3, 2006, the legal advisors for Laserscope and AMS continued their contract discussions, focusing particular attention on the terms and conditions of the Offer, the circumstances for extending the Offer, the representations and warranties contained in the draft merger agreement, aspects of the draft merger agreement’s termination and deal protection provisions, and the conditions contained in the commitment letters relating to AMS’ financing for the transaction.

      On the morning of June 3, 2006, the AMS Board met to discuss the status of contract negotiations with Laserscope and the AMS bid. At this meeting, the AMS Board authorized AMS to increase its bid to $31.00 per share, provided that the parties executed definitive documents no later than the evening of June 3, 2006. The AMS Board directed that the AMS bid remain at $30.00 per share if the parties did not execute definitive documents on June 3, 2006. After this meeting, representatives of Piper contacted representatives of Goldman Sachs to advise them of the AMS Board’s decision. At the same time, AMS counsel informed counsel for Laserscope of AMS’ $31.00 proposal and the foregoing conditions of that proposal.

      In the evening of June 3, 2006, Laserscope’s counsel informed AMS’ counsel that the Laserscope Board had accepted AMS’ offer and approved the Merger Agreement. The AMS Board then met in the evening of June 3, 2006 and approved the Merger Agreement. At this meeting Piper delivered to the AMS Board its oral opinion, subsequently confirmed in writing, to the effect that, as of June 3, 2006 and based upon and subject to the foregoing and based upon such other factors as Piper considered relevant, that the $31.00 per Share in cash to be paid by AMS pursuant to the Merger Agreement is fair, from a financial point of view, to AMS. In addition, the AMS Board had retained Thomas Weisel Partners to provide an independent fairness opinion to the AMS Board, and Thomas Weisel Partners delivered to the AMS Board its independent oral opinion, subsequently confirmed in writing, to the effect that, as of June 3, 2006 and based upon and subject to the factors and assumptions set forth in their opinion, the $31.00 per Share in cash to be paid by AMS is fair to AMS from a financial point of view.

      Following the meeting of the AMS Board, AMS’ financial and legal advisors informed Laserscope’s financial and legal advisors that the AMS board also had approved the transaction. Later in the evening of June 3, 2006, AMS, Purchaser and Laserscope signed the Merger Agreement. All of Laserscope’s directors and certain of its executive officers signed Shareholder Agreements that same evening or during the following day. AMS and Laserscope issued a joint press release announcing the Merger Agreement prior to the opening of The Nasdaq National Market on June 5, 2006.

      On June 14, 2006, AMS and the Purchaser commenced the Offer and filed this Schedule TO with the SEC. In addition, on June 14, 2006, Laserscope filed its Schedule 14D-9 with the SEC relating to the Offer.

11. The Merger Agreement; Other Arrangements.

The Merger Agreement

      The following is a summary of the material provisions of the Merger Agreement. This summary is not a complete description of the terms and conditions of the Merger Agreement and is qualified in its entirety by reference to the full text of the Merger Agreement filed with the SEC as an exhibit to the Schedule TO and incorporated herein by reference. Capitalized terms used in the following summary and not otherwise defined in this Offer to Purchase will have the respective meanings set forth in the Merger Agreement. The Merger Agreement may be examined, and copies obtained, at the places and in the manner set forth in Section 7 of this Offer to Purchase entitled “— Certain Information Concerning Laserscope.”

      The Offer. The Merger Agreement provides for commencement of the Offer no later than June 14, 2006, which is eight business days after the parties’ execution of the Merger Agreement. Purchaser’s obligation to accept for payment, purchase and pay for Shares validly tendered and not properly withdrawn pursuant to the Offer is subject to satisfaction, removal or waiver of the Minimum Condition (subject to any revisions thereof required by the Merger Agreement) and the other Offer Conditions as set forth in Section 15 of this Offer to Purchase entitled “— Certain

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Conditions of the Offer.” Purchaser will purchase all Shares validly tendered and not properly withdrawn pursuant to the Offer.

      Purchaser expressly reserved the right to waive any of the Offer Conditions and to make any change in the terms or conditions of the Offer. However, without the prior written consent of Laserscope, AMS and Purchaser are not permitted under the Merger Agreement to:

•  change the form or amount of consideration to be paid (other than by adding consideration) or change the number of Shares sought in the Offer;

•  impose any conditions to the Offer other than the Offer Conditions or modify any of the Offer Conditions (other than to waive the Offer Conditions to the extent permitted by the Merger Agreement);

•  change or waive the Minimum Condition, except as required pursuant to the Merger Agreement;

•  extend the Offer beyond the initial Expiration Date, except as permitted or required by the Merger Agreement; or

•  change the terms of the Offer in any other manner that is adverse to the Laserscope shareholders.

      The Offer is initially scheduled to expire at 12:00 midnight, Central Time, on the initial Expiration Date of July 12, 2006, which is the 20th business day after the commencement date of the Offer. Notwithstanding anything to the contrary contained in the Merger Agreement, but subject to the parties’ termination rights under the Merger Agreement, the Expiration Date of the Offer may be extended as follows:

•  By Purchaser:

•  for an additional period of not more than 10 business days if, immediately prior to the initial expiration of the Offer, the number of Shares validly and not properly withdrawn is at least 70% but less than 90% of the fully diluted shares; or

•  for any period required by any rule, regulation, interpretation or position of the SEC applicable to the Offer.

•  Upon the request of Laserscope for an additional period of not more than 10 business days if, immediately prior to the initial expiration of the Offer, the number of Shares validly tendered and not properly withdrawn is either:

•  greater than 35% but less than 49.9% of the fully diluted shares; or

•  greater than 70% but less then 90% of the fully diluted shares.

•  At the one-time option of Purchaser or Laserscope (so long as it has not breached in any material respect its non-solicitation obligations under the Merger Agreement) for an additional period of not more than 10 business days if, immediately prior to the initial expiration of the Offer or any permitted or required extension thereof, an unsolicited third party acquisition proposal has been made with respect to Laserscope and remains pending.

•  At the obligation of Purchaser if, immediately prior to the initial expiration date of the Offer or any permitted or required extension, the Minimum Condition (subject to any revisions thereof required by the Merger Agreement) has been satisfied but any of the other Offer Conditions exists and has not been waived. In any such case, the extension will last until the earlier of the removal or waiver of all such other Offer Conditions or the termination of the Merger Agreement.

      Except as set forth above, the Expiration Date of the Offer shall not be extended without the prior written consent of Laserscope.

      The Top-Up Option. In order to facilitate the satisfaction of the Minimum Condition, as part of the Merger Agreement, Laserscope granted to Purchaser the Top-Up Option, which is an irrevocable option to purchase the number of newly-issued Shares at a per share purchase price equal to the Offer Price that, when added to the number of Shares owned by Purchaser immediately following consummation of the Offer, results in Purchaser owning 90% of

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the fully diluted shares. However, the number of Shares purchasable upon exercise of the Top-Up Option is subject to the Top-Up Limitations, which include the requirement that such number of Shares not exceed, in any event, the remaining number of Shares authorized and available for issuance or 19.9% of the total number of Shares outstanding immediately prior to such issuance. In addition, Laserscope is not required to issue any Shares subject to the Top-Up Option if such issuance is prohibited by any court or regulatory order then in effect.

      Purchaser’s exercise of the Top-Up Option becomes both permissible and obligatory only if required by Laserscope under the circumstances described immediately below prior to the termination of the Top-Up Option, which occurs on the earlier of the Effective Time or the termination of the Merger Agreement.

      Required Revisions to the Minimum Condition. If, at the initial expiration of the Offer or any permitted or required extension thereof, the Minimum Condition is not satisfied but at least 49.9% of the fully diluted shares have been validly tendered and not properly withdrawn, then Laserscope has the right to require Purchaser to exercise the Top-Up Option, but only to the extent that doing so, after giving effect to the Top-Up Limitations, would result in Purchaser owning 90% of the fully diluted shares. In such event, Purchaser would be obligated to reduce the Minimum Condition to the percentage of the fully diluted shares then tendered and consummate the Offer, subject only to removal or waiver of any other outstanding Offer Conditions.

      However, if at the expiration of the Offer or any permitted or required extension thereof, the number of Shares validly tendered and not withdrawn is greater than 49.9% of the fully diluted shares but less than the percentage of the fully diluted shares necessary to require the exercise of the Top-Up Option, then Laserscope has the right to require Purchaser to waive the Minimum Condition and amend the Offer to reduce the number of Shares that Purchaser is required to purchase to the Revised Minimum Condition of 49.9% of the fully diluted shares.

      In the event the Revised Minimum Condition becomes applicable to the Offer, Purchaser would be obligated to consummate the Offer as to the number of Shares constituting 49.9% of the fully diluted shares, subject only to removal or waiver of any other outstanding Offer Conditions. In such event, if more than 49.9% of the fully diluted shares have been validly tendered and not withdrawn as of the expiration of the Offer, Purchaser will reduce the number of Shares it purchases from each tendering shareholder by the same proportion as it reduces the number of Shares purchased from all other tendering shareholders.

      In no event shall Purchaser be required to accept for payment, or pay for, any Shares if the number of Shares tendered pursuant to the Offer and not properly withdrawn at the expiration of the Offer is less than the number of Shares comprising the Revised Minimum Condition.

      Directors. The Merger Agreement provides that, effective upon consummation of the Offer, AMS will be entitled to designate the number of directors, rounded up to the next whole number, on the Laserscope Board that equals the product of (i) the total number of directors on the Laserscope Board (giving effect to the election of any additional directors), and (ii) the percentage that the number of Shares owned by AMS or Purchaser (including Shares accepted for payment in connection with the Offer) bears to the total number of Shares then outstanding.

      In connection with such right, Laserscope has agreed to take all necessary action to cause AMS’ designees to be elected or appointed to the Laserscope Board, including increasing the number of directors, or seeking and accepting resignations of incumbent directors, or both, provided that, prior to the Effective Time, the Laserscope Board will always have at least two directors who were directors of Laserscope prior to the consummation of the Offer (the “Continuing Directors”). In the event the number of Continuing Directors is reduced to less than two for any reason prior to the Effective Time, the remaining and departing Continuing Directors will be entitled to designate a person to fill the vacancy. Laserscope has further agreed to use its commercially reasonable efforts to cause individuals designated by AMS to constitute the same percentage as such individuals represent on the Laserscope Board of (i) each committee of the Laserscope Board, (ii) the board of directors of each Laserscope subsidiary, and (iii) each committee of each such board. Notwithstanding the above, AMS has agreed that it will not exercise its right to designate members of the Laserscope Board in any manner that would result in Laserscope becoming non-compliant with the corporate governance requirements of The Nasdaq National Market applicable to listed companies.

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      From the time that Purchaser’s designees are elected to the Laserscope Board through the Effective Time, the unanimous affirmative vote of the Continuing Directors will be required for Laserscope to:

•  amend or terminate the Merger Agreement or agree to consent to any amendment or termination of the Merger Agreement;

•  waive any of Laserscope’s rights, benefits or remedies under the Merger Agreement;

•  extend the time for performance by AMS and Purchaser of their respective obligations under the Merger Agreement; or

•  approve any other action by Laserscope which is reasonably likely to adversely affect the interests of the Laserscope shareholders with respect to the transactions contemplated by the Merger Agreement.

      In addition, in the event approval of the Laserscope shareholders is required by applicable law to consummate the Merger, the Continuing Directors will retain responsibility for, and control over, Laserscope’s obligations with respect to any SEC filings that are required to be filed by Laserscope in connection with the Merger Agreement.

The Merger.

      The Surviving Corporation. The Merger Agreement provides that, at the Effective Time, Purchaser will be merged with and into Laserscope. Following the Merger, Laserscope will continue as the surviving corporation (the “Surviving Corporation”) and will be an indirect subsidiary of AMS.

      Articles of Incorporation and Bylaws. The Merger Agreement provides that at the Effective Time (i) the Articles of Incorporation of the Surviving Corporation will be in the form of the Articles of Incorporation of Purchaser as in effect immediately prior to the Effective Time (except with respect to the name of the Surviving Corporation, which will be “Laserscope”), and (ii) the Bylaws of Purchaser as in effect immediately prior to the Effective Time will be the Bylaws of the Surviving Corporation until thereafter amended.

      Directors and Officers. Pursuant to the Merger Agreement and subject to applicable law (i) the initial directors of the Surviving Corporation will be the directors of Purchaser immediately prior to the Effective Time, until their respective successors are duly elected or appointed and qualified, and (ii) the initial officers of the Surviving Corporation will be the officers of Purchaser immediately prior to the Effective Time, until their respective successors are duly elected or appointed.

      Conversion of Shares. At the Effective Time, by virtue of the Merger and without any action on the part of the holders of any Laserscope securities or the holders of common stock, no par value, of Purchaser:

•  each issued and outstanding share of Purchaser common stock will be converted into and become one fully paid share of common stock, no par value, of the Surviving Corporation;

•  all Shares that are owned by AMS, Purchaser or Laserscope will be cancelled and will cease to exist, and no consideration will be delivered in exchange for such Shares; and

•  each issued and outstanding Share (other than Shares to be cancelled in accordance with the preceding bullet point and Shares held by shareholders who validly exercise their dissenters’ appraisal rights with respect to such Shares) will be converted into the right to receive the Offer Price, payable to the holder in cash, without interest.

      Treatment of Options. At the Effective Time, each outstanding unexercised option to purchase Shares automatically will become fully vested and cancelled and the holder thereof will be entitled to receive, as soon as practicable following the Effective Time a cash payment, without interest and subject to any required tax withholdings, equal to the product of (x) the excess, if any, of the Offer Price over the applicable exercise price per Share otherwise issuable upon exercise of such option, times (y) the total number of Shares otherwise issuable upon exercise of such option.

      Laserscope Employee Stock Purchase Plan. The “offering period” and “purchase period,” each as defined in Laserscope’s 1999 Employee Stock Purchase Plan (the “ESPP”), that is in process as of the date of the Merger Agreement will continue and Shares will continue to be issued to participants according to the terms and conditions

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of the ESPP. However, if the Effective Time occurs prior to the scheduled expiration of the current purchase period, then immediately prior to the Effective Time, such purchase period will end and each participant will be deemed to have purchased immediately prior to the Effective Time, to the extent of payroll deductions accumulated by the participant as of the purchase period end, the number of whole Shares at a per Share price determined pursuant to the provisions of the ESPP. In addition, each participant will receive a cash payment equal to the balance, if any, of the accumulated payroll deductions remaining after such deemed purchase of Shares. At the Effective Time, each of the Shares deemed purchased under the Merger Agreement will be converted into the right to receive the Offer Price, without interest. No new offering periods or purchase periods under the ESPP will be commenced following the date of the Merger Agreement and the ESPP will be terminated as of the Effective Time. The Laserscope Board has agreed to take all necessary action to provide that participants under the ESPP may not increase their payroll deductions from those in effect on the date of the Merger Agreement.

      Representations and Warranties. The Merger Agreement contains customary representations and warranties of the parties. These include representations and warranties of Laserscope with respect to, among other things, its corporate organization, standing and power, capitalization, subsidiaries, authority, SEC filings, financial statements, governmental approvals, compliance with laws, litigation, intellectual property and trade secrets, employment matters, environmental laws and regulations and tax matters. The Merger Agreement also contains customary representations and warranties of AMS and Purchaser with respect to, among other things, their respective organization and qualification, authority and financial capability to complete the Offer and the Merger. The representations and warranties contained in the Merger Agreement expire at the Effective Time.

      The representations, warranties and covenants made by Laserscope in the Merger Agreement are qualified by information contained in disclosure schedules that Laserscope delivered to AMS and Purchaser in connection with the execution of the Merger Agreement. Representations and warranties may be used as a tool to allocate risks between the parties to the Merger Agreement, including where the parties do not have complete knowledge of all facts. Laserscope shareholders are not third party beneficiaries under the Merger Agreement and should not rely on the representations, warranties and covenants of Laserscope therein or any descriptions thereof as characterizations of the actual state of facts or condition of Laserscope or any of its affiliates.

      Conduct of Business. The Merger Agreement obligates Laserscope and its subsidiaries, from the date of the Merger Agreement through the Effective Time, to conduct its business in the ordinary course. The Merger Agreement also contains customary covenants restricting certain activities of Laserscope and its subsidiaries during the same period. These covenants provide that, subject to limited exceptions, Laserscope will not (and will not permit any of its subsidiaries) to take certain actions without the prior written consent of AMS, which will be deemed given if AMS does not object within five business days of Laserscope’s request. Such restricted actions include, among other things, initiating stock splits or reclassifications, repurchasing, redeeming or acquiring shares of capital stock, declaring or paying dividends or making other distributions in respect of capital stock, selling or encumbering its material properties or assets other than in the ordinary course of business consistent with past practice, acquiring other businesses, entering into, amending or terminating material contracts, entering into new employment agreements, paying special bonuses or severances, increasing compensation to directors, employees or consultants (other than in the ordinary course of business), amending its Articles of Incorporation, Bylaws or similar governing documents, introducing material new products, services or sales incentive programs, entering into new lines of business or changing material operating policies, incurring or guaranteeing debt, materially changing tax elections or accounting methods, taking actions intended to result in any conditions to the Merger not being satisfied, discharging or settling disputed claims, litigation or liabilities (including for taxes), or agreeing to do any of the foregoing.

      Shareholder Approval. Laserscope has agreed that if Laserscope shareholders’ approval is required under California law to consummate the Merger, upon the consummation of the Offer, Laserscope, acting through the Laserscope Board, will call, give notice of, convene and hold a special meeting of its shareholders (the “Shareholders Meeting”) as soon as practicable for the purpose of considering and voting upon the approval and adoption of the Merger Agreement and the approval of the Merger. Laserscope has also agreed, among other things, to promptly prepare and file proxy materials with the SEC in connection with the Shareholders Meeting, use commercially reasonable efforts to respond as promptly as practicable to any comments of the SEC or its staff with respect to the proxy materials and mail final proxy materials to the Laserscope shareholders.

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      Access to Information. The Merger Agreement provides that from the date of the Merger Agreement until the Effective Time, Laserscope will, and will cause each of its subsidiaries to, grant the officers, employees, accountants, counsel and other representatives of AMS access to all of Laserscope’s properties, books, contracts, commitments and records, and to its officers, employees, accountants, counsel and other representatives. All information furnished and obtained by AMS and its representatives will be kept confidential in accordance with the confidentiality provisions of the Confidentiality Agreement dated February 16, 2006 between AMS and Laserscope.

      Further Actions. The Merger Agreement provides that each of AMS, Purchaser and Laserscope will, and will cause their respective subsidiaries to, use their commercially reasonable efforts to:

•  cause the conditions precedent to the Offer and the Merger to be satisfied and thereafter consummate the transactions contemplated by the Merger Agreement;

•  resolve any instituted or pending action or proceeding by any governmental entity that prevents the removal of any of the Offer Conditions; and

•  obtain (and to cooperate with the other party to obtain) any approvals or consents of third parties or governmental entities required in connection with the Offer and the Merger and the other transactions contemplated by the Merger Agreement.

      In addition, each party has agreed, within 10 business days after the execution of the Merger Agreement, to file all necessary documentation required to obtain all requisite approvals or termination of applicable waiting periods for the transactions contemplated by the Merger Agreement under the HSR Act.

      Notwithstanding any other provision of the Merger Agreement to the contrary, none of AMS, any of its subsidiaries or the Surviving Corporation, will be required (and Laserscope will not, without the prior written consent of the AMS, agree, but will, if so directed by the AMS, agree, effective after the Effective Time) to hold separate or divest any of their respective assets or operations or enter into any consent decree or licensing or other arrangement with respect to any of their assets or operations or to otherwise take or commit to take any action that limits its freedom of action with respect to, or its ability to retain as of and after the Effective Time, any businesses or assets of Laserscope, AMS or any of their respective affiliates.

      No Solicitation. The Merger Agreement requires Laserscope, its subsidiaries and their respective officers, directors, representatives and agents to:

•  immediately cease any ongoing discussions or negotiations with any third party with respect to an Acquisition Proposal (as defined below);

•  use their best efforts to cause all persons other than AMS who have been furnished with confidential information regarding Laserscope within the preceding 12 months in connection with any Acquisition Proposal to promptly return or destroy such information; and

•  refrain from releasing any third party from the confidentiality and stand still provisions of any agreement to which Laserscope or its subsidiaries is a party or becomes a party.

      In addition, the Merger Agreement prohibits Laserscope, its subsidiaries and their respective officers, directors, representatives and agents from, directly or indirectly:

•  soliciting, initiating, entertaining or knowingly encouraging an Acquisition Proposal;

•  furnishing or disclosing to a third party non-public information with respect to an Acquisition Proposal;

•  negotiating or engaging in substantive discussions with any third party with respect to an Acquisition Proposal; or

•  entering into any agreement (whether or not binding) or agreement in principle with respect to an Acquisition Proposal.

      Notwithstanding the above, at any time prior to the consummation of the Offer, in response to a bona fide written Acquisition Proposal that was not solicited by Laserscope, its subsidiaries or any of their respective officers, directors, representatives or agents and which is reasonably determined by the Laserscope Board in good faith, after

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consulting with its financial advisors and legal counsel, to constitute, or to be reasonably likely to constitute, a Superior Proposal (as defined below), Laserscope may:

•  furnish information with respect to Laserscope and its subsidiaries to the person making the Acquisition Proposal and such person’s representatives; and

•  participate in discussions or negotiations with, and provide draft documents and agreements to, the person making the Acquisition Proposal and such person’s representatives;

provided, however, that prior to furnishing information to, or entering into a discussion or negotiation with, any such person or its representatives, Laserscope (i) provides reasonable notice to AMS to the effect that it is furnishing information to, or entering into discussions or negotiations with, such person, (ii) provides AMS with all information to be provided to such person which AMS has not previously been provided, and (iii) receives from such person an executed confidentiality agreement reasonably satisfactory to the Laserscope Board with terms, as a whole, that are no less favorable to Laserscope than those contained in its confidentiality agreement with AMS.

      The Merger Agreement further provides that the Laserscope Board may not:

•  withdraw or modify, or propose to withdraw or modify, in a manner adverse to AMS, Laserscope’s recommendation of the Offer and, to the extent required by applicable law, the Merger Agreement and the Merger to Laserscope’s shareholders (the “Laserscope Recommendation”);

•  approve or recommend, or propose to approve or recommend, any Acquisition Proposal; or

•  enter into any agreement (whether or not binding) or agreement in principle with respect to any Acquisition Proposal (other than a confidentiality agreement referred to above).

      Notwithstanding the above, prior to consummation of the Offer, in response to the receipt of an unsolicited Acquisition Proposal, if the Laserscope Board (i) reasonably determines in good faith after consultation with its legal counsel and financial advisors that such Acquisition Proposal is a Superior Proposal, and (ii) determines in good faith after consultation with its legal counsel that failure to take such action would be inconsistent with its fiduciary duties to the Laserscope shareholders under applicable law, then the Laserscope Board may approve and recommend such Superior Proposal and, in connection with such approval and recommendation, withdraw, or modify or change in a manner adverse to AMS, the Laserscope Recommendation (each, a “Recommendation Change”); provided, however, that no Recommendation Change will be valid or effective until (i) Laserscope has provided written notice to AMS advising AMS of its receipt of a Superior Proposal, the terms and conditions of such Superior Proposal and the identity of the person making such Superior Proposal, and (ii) AMS fails to make, within three business days after receipt of such notice from Laserscope, an offer that the Laserscope Board reasonably determines in good faith, after consultation with its financial and legal advisors, is at least as favorable to the Laserscope shareholders as the Superior Proposal. In the event that Laserscope enters into a definitive agreement with a third party with respect to a Superior Proposal and the Merger Agreement is terminated, then, notwithstanding anything to the contrary in the standstill provisions of the confidentiality agreement between AMS and Laserscope, AMS will be entitled to present an Acquisition Proposal to the Laserscope Board.

      Nothing contained in the Merger Agreement will prohibit Laserscope or the Laserscope Board from (i) taking and disclosing to the shareholders of Laserscope a position contemplated by Rule 14e-2 promulgated under the Exchange Act, or (ii) making any disclosure to the shareholders of Laserscope if the Laserscope Board determines in good faith that such disclosure is required by applicable law.

      Under the Merger Agreement, “Acquisition Proposal” means any inquiry, proposal or offer relating to (i) the acquisition of 20% or more of the outstanding shares of capital stock or any other voting securities of Laserscope by any third party, (ii) a merger, consolidation, business combination, reorganization, share exchange, sale of assets, recapitalization, liquidation, dissolution or similar transaction which would result in any third party acquiring 20% or more of the fair market value of the assets of Laserscope and its subsidiaries, taken as a whole (including capital stock of subsidiaries of Laserscope), (iii) any other transaction which would result in a third party acquiring 20% or more of the fair market value of the assets of Laserscope and its subsidiaries, taken as a whole (including capital stock of subsidiaries of Laserscope), immediately prior to such transaction (whether by purchase of assets, acquisition of stock of a subsidiary or otherwise), (iv) any combination of the foregoing, or (v) any other transaction that is

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conditioned or predicated on the Merger not being completed in accordance with the terms of the Merger Agreement or would reasonably be expected to result in the Merger not being completed.

      Under the Merger Agreement, “Superior Proposal” means an Acquisition Proposal (with all of the percentages included in the definition of Acquisition Proposal increased to 75%) the terms of which the Laserscope Board determines in good faith (after consultation with its financial advisors and legal counsel), taking into account, among other things, (i) the legal, financial and regulatory aspects of the Acquisition Proposal and the third party making the Acquisition Proposal, (ii) whether the acquiring party is capable of consummating the Acquisition Proposal on the terms proposed, and (iii) whether the Acquisition Proposal is subject to any financing contingency, would, if consummated, be more favorable from a financial point of view to the Laserscope shareholders than those set forth in the Merger Agreement.

      Indemnification. Pursuant to the Merger Agreement, AMS and the Surviving Corporation have agreed to indemnify and hold harmless all officers and directors of Laserscope and its subsidiaries to the fullest extent such persons would be entitled to such indemnification under applicable law, the applicable organizational documents of Laserscope and its subsidiaries and existing contractual indemnification agreements with Laserscope and its subsidiaries. AMS and the Surviving Corporation have also agreed to continue in full force and effect, after the Merger, the indemnification provisions contained in such existing contractual indemnification agreements in accordance with their terms, and to maintain in effect the indemnification provisions of Laserscope’s and its subsidiaries’ organizational documents with respect to matters occurring before the effectiveness of the Merger.

      The Merger Agreement also requires that, for a period of six years after the Effective Time, AMS, Laserscope and the Surviving Corporation maintain in effect a prepaid directors’ and officers’ liability insurance that is no less favorable than Laserscope’s current policy.

      Except as described in this Offer to Purchase, to Laserscope’s knowledge, there are no material agreements, arrangements or understandings that would result in any actual or potential conflicts of interest between Laserscope or its affiliates and (i) any of its executive officers, directors or affiliates, or (ii) Purchaser or any of its executive officers, directors or affiliates.

      Company Employee Benefit Matters. The Merger Agreement provides that AMS will, or will cause the Surviving Corporation and its subsidiaries to, provide employees of Laserscope and its subsidiaries (the “Laserscope Employees”) retained following the Merger (the “Continuing Employees”) with compensation and benefit arrangements that are no less favorable in the aggregate than provided to AMS’ similarly situated employees, provided that the Surviving Corporation will be under no obligation to retain any Laserscope Employee (subject to certain severance terms or other provisions of existing employment agreements). As soon as practicable after the Effective Time, AMS will, or will cause the Surviving Corporation and its subsidiaries to, cause the Continuing Employees to commence participation in employee benefit plans or arrangements maintained by AMS, the Surviving Corporation or any subsidiary of AMS or the Surviving Corporation (collectively, the “AMS Plans”) as are provided to similarly situated employees of AMS.

      AMS will, and will cause the Surviving Corporation and its subsidiaries to:

•  give Continuing Employees full credit for purposes of eligibility, vesting and benefit accruals under any AMS Plans for such Continuing Employees’ service with Laserscope or any of its subsidiaries or predecessors to the same extent recognized by Laserscope and its subsidiaries;

•  waive all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Continuing Employees under any AMS Plan that is a welfare benefit plan that such employees may be able to participate in after the Effective Time;

•  provide credit under any welfare plan for any co-payments, deductibles and out-of-pocket expenditures for the remainder of the coverage period during which any transfer of coverage occurs, provided, however, that no such service will be recognized to the extent such recognition would result in the duplication of benefits; and

•  honor in accordance with their terms all employee benefit plans or arrangements maintained by Laserscope immediately prior to the Effective Time.

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      Prior to the Effective Time, Laserscope will take all action necessary to terminate Laserscope’s 401(k) Savings and Investment Plan, including notifying the participants that the 401(k) Savings and Investment Plan has been terminated, provided that immediately following the Effective Time, all Continuing Employees are permitted to participate in AMS’ 401(k) Savings and Investment Plan.

      From and after the Effective Time, AMS and the Surviving Corporation will keep in full force and effect any agreement in effect as of the date of the Merger Agreement between or among Laserscope or any of its subsidiaries and any Laserscope employees relating to severance pay or similar benefits.

      Conditions to the Merger. The respective obligations of Laserscope, AMS and Purchaser to complete the Merger are subject to the fulfillment of the following conditions:

•  the Merger Agreement having been approved by a majority of the outstanding Shares, if required by applicable law;

•  the applicable waiting period under the HSR Act having expired or been terminated;

•  no order, injunction, statute, rule, regulation or decree having been issued, enacted, entered, promulgated or enforced by a governmental entity that prohibits or makes illegal the consummation of the Merger; and

•  Purchaser having purchased the Shares validly tendered and not properly withdrawn pursuant to the Offer in an amount sufficient to meet the Minimum Condition (or any revisions thereto required by the Merger Agreement), provided that no party may be entitled to invoke this condition if, in breach of its obligations under the Merger Agreement, it was the cause of the failure of Purchaser to purchase the Shares validly tendered and not properly withdrawn pursuant to the Offer.

      Termination and Abandonment. The Merger Agreement may be terminated and the Offer, the Merger and the other transactions contemplated by the Merger Agreement may be abandoned at any time prior to the Effective Time by mutual written consent of Laserscope and AMS, if the board of directors of each so determine. In addition, the Merger Agreement may be terminated:

•  by either AMS or Laserscope if:

•  any governmental entity of competent jurisdiction has issued a final non-appealable order which has the effect of making consummation of the Offer or the Merger illegal or otherwise preventing or prohibiting consummation of the Offer or the Merger;

•  the Offer has not been consummated on or before December 31, 2006; provided, however, that this right to terminate the Merger Agreement will not be available to a party whose failure to fulfill any obligation under the Merger Agreement materially contributed to the failure of the Offer to be consummated on or before such date; or

•  the Offer terminates or expires in accordance with its terms, after giving effect to the rights and obligations of the parties to extend the Offer, any required revisions to the Minimum Condition and any required exercise of the Top-Up Option, without Purchaser having accepted for payment any Shares pursuant to the Offer due to its failure to achieve the Revised Minimum Condition of 49.9% of the fully diluted shares, except that this right to terminate the Merger Agreement will not be available to any party whose failure to perform any obligation under the Merger Agreement has been the proximate cause of, or resulted in, such failure to achieve the Revised Minimum Condition.

•  by Laserscope if:

•  Laserscope is not in material breach of the Merger Agreement, and if (i) the representations and warranties of AMS and Purchaser in the Merger Agreement relating to the financial capability of AMS to consummate the Offer and the Merger and pay fees and expenses in connection with the Merger Agreement are or become untrue or inaccurate, or (ii) any of the representations and warranties of AMS and Purchaser in the Merger Agreement, other than those described in clause (i), are or become untrue or inaccurate, or (iii) there has been a breach on the part of AMS or Purchaser of any of their respective covenants or agreements in the Merger Agreement, and, in the case of clause (ii) and (iii) only, (A) such breach has

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not been, or cannot be, cured in all material respects within 30 business days after written notice to AMS and Purchaser, or (B) without regard to any qualification or reference to materiality or a “Material Adverse Effect” set forth in such representations and warranties, such inaccuracy or breach would, individually or in the aggregate, have a “Material Adverse Effect;” or

•

(i) the Laserscope Board has effected a Recommendation Change prior to the consummation of the Offer and Laserscope is not concurrently in material breach of its obligations under the Merger Agreement and has materially complied with its obligations under the Merger Agreement regarding non-solicitation of Acquisition Proposals, or (ii) AMS or Purchaser has failed to commence the Offer within eight business days of the execution of the Merger Agreement; provided, however, Laserscope will not have this right of termination if such failure to have commenced the Offer was caused by Laserscope’s failure to perform in all material respects its obligations under the Merger Agreement.

•  by AMS if:

•  AMS is not in material breach of the Merger Agreement and (i) Laserscope fails to perform or comply in any material respect with its covenants or agreements in the Merger Agreement, except where such failure is cured within 30 business days of notification or would not have, individually or in the aggregate, a Material Adverse Effect with respect to Laserscope, or (ii) any of the representations and warranties of Laserscope in the Merger Agreement is untrue or incorrect, except where such failure to be true and correct is cured within 30 business days of notification or, without regard to any qualification or reference to materiality or a “Material Adverse Effect” set forth in such representations and warranties, would not, individually or in the aggregate, have a Material Adverse Effect with respect to Laserscope; or

•  (i) Laserscope breaches in any material respect any of its obligations under the Merger Agreement regarding non-solicitation of Acquisition Proposals, (ii) the Laserscope Board has effected a Recommendation Change, or (iii) Laserscope has failed to include in the proxy statement distributed to the Laserscope shareholders, if any, its recommendation that shareholders approve the Merger Agreement and the Merger.

      Under the Merger Agreement a “Material Adverse Effect,” as to AMS, means a material adverse effect on the ability of AMS or Purchaser to consummate the transactions contemplated by the Merger Agreement in a timely manner or otherwise prevent or materially delay AMS or Purchaser from performing any of its material obligations under the Merger Agreement.

      The Merger Agreement defines a “Material Adverse Effect” as to Laserscope to mean any change or effect that is materially adverse to the business, operations, assets, properties, results of operations or financial condition of Laserscope and its subsidiaries, taken as a whole, or that prevents Laserscope from consummating the transactions contemplated by the Merger Agreement on a timely basis. However, in determining whether a Material Adverse Effect has occurred with respect to Laserscope, the Merger Agreement definition excludes:

•  Any event, occurrence, circumstance or trend, including a diminution in value of Laserscope that to the actual knowledge of certain officers of AMS existed on the date of the Merger Agreement,

•  Any fact, circumstance or condition specifically disclosed in the disclosure schedules provided by Laserscope,

•  Any change in market price or trading volume of the Shares, in and of itself,

•  Any failure, in and of itself, by Laserscope to meet projections,

•  Any changes in relevant laws, GAAP or regulatory accounting requirements but only to the extent changes do not disproportionately affect Laserscope,

•  Changes generally affecting Laserscope’s industries but only to the extent changes do not disproportionately affect Laserscope,

•  Changes in economic conditions in the United States, any U.S. region or any non-U.S. or global economy but only to the extent changes do not disproportionately affect Laserscope, and

•  Any war activities, terrorism or natural disaster.

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      Publicity. Laserscope, AMS and Purchaser may not issue any press release or make any other public announcement with respect to the Offer, the Merger or the Merger Agreement without the prior consent of the other party (which may not be unreasonably withheld or delayed), except as may be required by applicable law or the rules and regulations of any applicable stock exchange.

      Amendment. The Merger Agreement may be amended by Laserscope, AMS and Purchaser, by action taken or authorized by their respective boards of directors, at any time before the Effective Time. However, after receipt of the approval of the Merger by the Laserscope shareholders, if required by applicable law, the Merger Agreement may not be amended if further approval by the Laserscope shareholders would be required by applicable law or in accordance with the rules of any relevant stock exchange.

      Waiver. At any time prior to the Effective Time, each of Laserscope, AMS and Purchaser may, to the extent legally allowed: (i) extend the time for the performance of any of the obligations or other acts of the other parties, (ii) waive any inaccuracies in the representations and warranties contained in the Merger Agreement or in any document delivered pursuant to the Merger Agreement, or (iii) waive compliance with any of the agreements or conditions contained in the Merger Agreement. However, after receipt of the approval of the Merger by the Laserscope shareholders, if required by applicable law, the Merger Agreement may not be extended or waived without the approval of such shareholders if such extension or waiver decreases the consideration to be paid to the Laserscope shareholders or adversely affects the rights of the Laserscope shareholders under the Merger Agreement.

      Termination Fees. If the Merger Agreement has been terminated under the following circumstances:

•  by AMS if, (i) Laserscope breaches in any material respect any of its obligations under the Merger Agreement regarding non-solicitation of Acquisition Proposals, (ii) the Laserscope Board has effected a Recommendation Change, or (iii) Laserscope has failed to include in the proxy statement distributed to the Laserscope shareholders, if any, its recommendation that shareholders approve the Merger Agreement and the Merger, or

•  by Laserscope if the Laserscope Board has effected a Recommendation Change prior to the consummation of the Offer and Laserscope is not concurrently in material breach of its obligations under the Merger Agreement and has materially complied with its obligations under the Merger Agreement regarding non-solicitation of Acquisition Proposals,

then, Laserscope is obligated to pay AMS a termination fee of $25 million on the second business day after the termination date, but in each case so long as neither AMS nor the Purchaser was in material breach of the Merger Agreement.

      If the Merger Agreement has been validly terminated under the following circumstances:

•  by either AMS or Laserscope, if the Offer has not been consummated on or before December 31, 2006; or

•  by either AMS or Laserscope, if the Offer terminates or expires in accordance with its terms, after giving effect to the rights and obligations of the parties to extend the Offer, any required revisions to the Minimum Condition and any required exercise of the Top-Up Option, without Purchaser having accepted for payment any Shares pursuant to the Offer due to its failure to achieve the Revised Minimum Condition of 49.9% of the fully diluted shares, or

•  by AMS, if AMS is not in material breach of the Merger Agreement and (i) Laserscope fails to perform or comply in any material respect with its covenants or agreements in the Merger Agreement, except where such failure is cured within 30 business days of notification or would not have, individually or in the aggregate, a Material Adverse Effect with respect to Laserscope, or (ii) any of the representations and warranties of Laserscope in the Merger Agreement is untrue or incorrect, except where such failure to be true and correct is cured within 30 business days of notification or, without regard to any qualification or reference to materiality or a “Material Adverse Effect” set forth in such representations and warranties, would not, individually or in the aggregate, have a Material Adverse Effect with respect to Laserscope,

      and

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•  in the circumstances described in the first and second bullet points above in this paragraph, there has been an Acquisition Proposal prior to the termination date,

      and

•  within 12 months of the termination date, Laserscope enters into a definitive agreement with a third party with respect to an Acquisition Proposal or any Acquisition Proposal is consummated by the third party,

then, Laserscope is obligated to pay AMS a termination fee of $25 million upon consummation of the Acquisition Proposal, but only so long as neither AMS nor Purchaser was in material breach of the Merger Agreement.

      Shareholder Agreements. Concurrently with the execution and delivery of the Merger Agreement, AMS entered into Shareholder Agreements, each dated as of June 3, 2006, with each of Laserscope’s directors and the following executive officers: Robert J. Pressley, Ph.D., Eric M. Reuter, James Baumgardt, Robert C Pearson, Rodney Perkins, Elisha Finney, Derek Bertocci, Ken Arnold, Lloyd Diamond, Van Frazier, Robert Mann, Robert L. Mathews and Kester Nahen, Ph.D. (the “Supporting Shareholders”). Pursuant to the Shareholder Agreements, the Supporting Shareholders have agreed, among other things, to tender into the Offer, and not withdraw, all outstanding Shares they hold of record or beneficially own (other than any Shares disclaimed by these shareholders) to vote all such Shares in favor of the approval of the Merger Agreement and the Merger to the extent required by applicable law, and to refrain from transferring any such Shares prior to the consummation of the Merger except in limited circumstances. The Shareholder Agreements also irrevocably appoint AMS as the Supporting Shareholders’ proxy to vote all their Shares in the manner specified in the Shareholder Agreements. The Shareholder Agreements terminate upon the termination of the Merger Agreement. The Shares and options to acquire Shares represented by the Shareholder Agreements constitute approximately 3.6% of the Shares and options to acquire Shares outstanding as of June 1, 2006.

      Retention and Option Lock-Up Agreements. Following the execution and delivery of the Merger Agreement, on June 14, 2006, Laserscope delivered to its eligible employees for their consideration retention letter agreements (the “Retention Agreements”). The Retention Agreements provide that:

•  the employee will be provided a retention bonus having a value of two months of the employee’s base salary (as of June 3, 2006) payable in either:

•  restricted shares if the transactions contemplated by the Merger Agreement are consummated and the employee remains employed with Laserscope, AMS, or any of their affiliates through December 31, 2006 (April 30, 2007 in the case of finance and accounting employees); one-half of such restricted shares shall be fully vested upon grant and one-half of such restricted shares shall vest on December 31, 2007 subject to continued employment with Laserscope, AMS, or any of their affiliates, but will vest in full if the employee’s employment is terminated by Laserscope, AMS, or any of their affiliates on or prior to December 31, 2007 for any reason other than “cause” (as defined therein) or the employee’s termination of the employee’s employment for “good reason” (as defined therein) on or prior to December 31, 2007; or,

•  cash if the transactions contemplated by the Merger Agreement are consummated and the employee’s employment is terminated by Laserscope, AMS, or any of their affiliates on or prior to December 31, 2006 (April 30, 2007 in the case of finance and accounting employees) for any reason other than “cause” or the employee’s termination of the employee’s employment for “good reason” on or prior to December 31, 2006 (April 30, 2007 in the case of finance and accounting employees); and

•  subject to consummation of the transactions contemplated by the Merger Agreement, AMS will adopt a severance plan which will provide eligible employees a severance benefit equal to three months of the employee’s base salary (as of June 3, 2006), plus one week of base salary (as of June 3, 2006) per year of credited service with Laserscope in the event that within 12 months after the effective time of the Merger the employee’s employment is terminated by Laserscope, AMS, or any of their affiliates for any reason other than “cause” or the employee’s termination of the employee’s employment for “good reason.”

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Confidentiality Agreement provides that AMS will keep confidential all non-public, confidential information of Laserscope. The Confidentiality Agreement provides that neither AMS nor Laserscope will, without the agreement of the other, acquire the capital stock of the other for a period of two years. However, pursuant to the Merger Agreement, AMS, Purchaser and Laserscope agreed that in the event Laserscope terminates the Merger Agreement to accept a proposal from a third party that is more favorable than the Offer, AMS will be able to submit an Acquisition Proposal to the Laserscope Board.

12. Purpose of the Offer and the Merger; Plans for Laserscope.

      Purpose of the Offer. The purpose of the Offer is to acquire control of, and the entire common stock equity interest in, Laserscope. The Offer is intended to increase the likelihood that the Merger will be effected and reduce the time required for Laserscope shareholders to receive the transaction consideration and AMS to complete the acquisition of Laserscope. The purpose of the Merger is to acquire all outstanding Shares not tendered and purchased pursuant to the Offer. The transaction structure includes the Merger to ensure the acquisition of all issued and outstanding Shares. If the Offer is successful, Purchaser intends to consummate the Merger as soon as practicable following the satisfaction or waiver of each of the conditions to the Merger set forth in the Merger Agreement. Purchaser will own 100% of Laserscope following the Merger and will be entitled to all of the benefits resulting from that ownership, including any increase or decrease in Laserscope’s value. As of the date of this Offer to Purchase, AMS and Purchaser beneficially own no Shares and no rights to acquire Shares.

      Plans for Laserscope. Except as otherwise set forth in this Offer to Purchase, it is expected that, initially following the Merger, the business operations of Laserscope will be continued by the Surviving Corporation substantially as they are currently being conducted. The directors of Purchaser will be the initial directors of the Surviving Corporation, and the officers of Laserscope, together with certain officers of Purchaser, will be the initial officers of the Surviving Corporation. Upon completion of the Offer and the Merger, AMS intends to conduct a detailed review of Laserscope and its assets, corporate structure, capitalization, operations, policies, management and personnel. After such review, AMS will determine what actions or changes, if any, would be desirable in light of the circumstances which then exist. Notwithstanding any statement contained in this Offer to Purchase, Laserscope’s aesthetics business is not considered a strategic fit for AMS so, upon completion of the Merger, AMS will consider alternatives for that business including divestiture.

      Except as described in this Offer to Purchase, neither AMS nor Purchaser has any present plans or proposals that would relate to or result in: (i) any extraordinary corporate transaction, such as a merger, reorganization or liquidation involving Laserscope or any of its subsidiaries; (ii) a purchase, sale or transfer of a material amount of assets of Laserscope or any of its subsidiaries; (iii) except as contemplated by the Merger Agreement, any change in Laserscope Board or management, including, but not limited to, any plans or proposals to change the number or term of directors or to fill any existing vacancies on Laserscope Board or to change any material term of the employment contract of any executive officer; (iv) any material change in Laserscope’s capitalization, indebtedness or dividend policy; (v) any other material change in Laserscope’s corporate structure or business; (vi) a class of securities being de-listed from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; or (vii) a class of equity securities of Laserscope becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act. See Sections 11 and 13 of this Offer to Purchase entitled “The Merger Agreement; Other Arrangements” and “Certain Effects of the Offer,” respectively.

13. Certain Effects of the Offer.

      Market for the Shares. The purchase of Shares pursuant to the Offer will reduce the number of holders of Shares and the number of Shares that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining Shares held by shareholders other than Purchaser. Purchaser cannot predict whether the reduction in the number of Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price for, or marketability of, the Shares or whether such reduction would cause future market prices to be greater or less than the Offer Price.

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      Stock Quotation. Listing the Shares on The Nasdaq National Market is voluntary, so Laserscope may terminate such listing at any time. Neither AMS nor Purchaser has any intention of causing Laserscope to terminate the inclusion of the Shares on The Nasdaq National Market prior to the Merger. However, depending upon the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the standards for continued inclusion in The Nasdaq National Market. According to its published guidelines, The Nasdaq National Market would give consideration to delisting the Shares if, among other things, the number of publicly held Shares falls below 750,000 or the number of holders of round lots of Shares falls below 400. Shares held by officers or directors of Laserscope or their immediate families, or by any beneficial owner of more than 10 percent or more of the Shares, ordinarily will not be considered as being publicly held for this purpose. In the event the Shares are no longer eligible for listing on The Nasdaq National Market, quotations might still be available from other sources. The extent of the public market for the Shares and the availability of such quotations would, however, depend upon the number of holders of Shares at such time, the interest in maintaining a market in Shares on the part of securities firms, the possible termination of registration of Shares under the Exchange Act as described below and other factors. If, as a result of the purchase of Shares pursuant to the Offer, the Shares no longer meet the criteria for continued inclusion in The Nasdaq National Market, the market for the Shares could be adversely affected.

      If The Nasdaq National Market were to de-list the Shares, it is possible that such shares would continue to trade on another securities exchange or in the over-the-counter market and that price or other quotations would be reported by such exchange or other sources. The extent of the public market for such de-listed Shares and the availability of such quotations would depend upon such factors as the number of shareholders and/or the aggregate market value of the publicly traded Shares remaining at such time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration under the Exchange Act (as described below) and other factors. We cannot predict whether the reduction in the number of Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price for or marketability of such Shares or whether it would cause future market prices to be greater or less than the Offer Price.

      Exchange Act Registration. The Shares are currently registered under the Exchange Act. The purchase of the Shares pursuant to the Offer may result in the Shares becoming eligible for deregistration under the Exchange Act. Such registration of the Shares may be terminated upon application of Laserscope to the SEC if the Shares are not listed on a national securities exchange and there are fewer than 300 holders of record of the Shares. Termination of registration of the Shares under the Exchange Act would substantially reduce the information required to be furnished by Laserscope to its shareholders and to the SEC and would make certain provisions of the Exchange Act no longer applicable to Laserscope, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in connection with shareholders’ meetings and the related requirement of furnishing an annual report to shareholders, and the requirements of Rule 13e-3 under the Exchange Act with respect to “going private” transactions. Furthermore, the ability of “affiliates” of Laserscope and persons holding “restricted securities” of Laserscope to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933 may be impaired or eliminated. If registration of the Shares under the Exchange Act were terminated, the Shares would no longer be “margin securities” or be eligible for inclusion on The Nasdaq National Market.

      Purchaser believes that the purchase of the Shares pursuant to the Offer may result in the Shares becoming eligible for deregistration under the Exchange Act and it would be the intention of Purchaser to cause Laserscope to make an application for termination of registration of the Shares as soon as possible after successful completion of the Merger, if the Shares are then eligible for such termination.

14. Dividends and Distributions.

      The Merger Agreement provides that, from date of the Merger Agreement until the Effective Date, Laserscope shall not, without the prior written consent of AMS, among other things, make, declare or pay any dividend or make any other distribution on any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock.

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15. Certain Conditions of the Offer.

      Notwithstanding any other provision of the Offer, subject to the terms of the Merger Agreement, Purchaser shall not be required to accept for payment (subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating to Purchaser’s obligation to pay for or return tendered Shares after the termination or withdrawal of the Offer)) any Shares tendered if, by the expiration of the Offer, (1) the Minimum Condition (after giving effect to any revisions thereto required by the Merger Agreement), shall not have been satisfied, (2) the applicable waiting period under the HSR Act and any other applicable antitrust laws shall not have expired or been terminated, or (3) at any time on or after the date of the Merger Agreement and prior to the acceptance for payment of Shares pursuant to the Offer, any of the following conditions exist:

•  there shall be any action taken, or any statute, rule, regulation, injunction, order or decree proposed, enacted, enforced, promulgated, issued or deemed applicable to the Merger Agreement, the Shareholder Agreements, the Offer or the Merger, by any Governmental Entity (as defined in the Merger Agreement) (other than in connection with any action or proceeding initiated by or on behalf of any shareholder of Laserscope) that has resulted in, or is reasonably likely to result in, directly or indirectly, (i) the making of the Offer, the acceptance for payment of some of or all the Shares by AMS or Purchaser or the consummation by AMS or Purchaser of the Merger becoming illegal or exposing AMS or Purchaser to liability for material damages, (ii) any restraint or prohibition on AMS’ or Purchaser’s ownership or operation (or that of their respective Subsidiaries or Affiliates (each as defined in the Merger Agreement)) of all or any portion of the business or assets of Laserscope and its Subsidiaries, taken as a whole, or of AMS and its Subsidiaries, taken as a whole, or compelling AMS or any of its Subsidiaries or Affiliates to dispose of or hold separate all or any portion of the business or assets of Laserscope and its Subsidiaries, taken as a whole, or of AMS and its Subsidiaries, taken as a whole, (iii) the imposition of limitations on the ability of AMS or any of its Subsidiaries or Affiliates effectively to exercise full rights of ownership of the Shares, including, without limitation, the right to vote any Shares acquired or owned by AMS or any of its Subsidiaries or Affiliates on all matters properly presented to Laserscope’s shareholders, or (iv) the imposition of an obligation of AMS or any of its Subsidiaries or Affiliates to divest any of the Shares; or

•  Laserscope shall have failed to perform in any material respect, or to comply in any material respect with, its covenants or agreements in the Merger Agreement, except where the failure to so perform or comply (i) is curable and has been cured within 30 Business Days (as defined in the Merger Agreement) after receipt of written notice of such failure from AMS, or (ii) individually or in the aggregate, would not have a Material Adverse Effect with respect to Laserscope (as defined in the Merger Agreement); or

•  any representation and warranty of Laserscope in the Merger Agreement is not true and correct (except as to any such representation or warranty that speaks as of a specific date, which must be true and correct only as of such specific date), except where the failure to be so true and correct (i) is curable and has been cured within 30 Business Days after receipt of written notice of such failure from AMS, or (ii) without regard to any qualification or reference to materiality or Material Adverse Effect set forth in such representation and warranty, would not, individually or in the aggregate, have a Material Adverse Effect with respect to Laserscope; or

•  AMS shall have failed to receive a certificate executed on behalf of Laserscope by the Chief Executive Officer and the Chief Financial Officer of Laserscope (in their respective capacities as officers of Laserscope), dated as of the scheduled Expiration Date of the Offer, to the effect that the conditions described herein have not occurred; or

•  the Merger Agreement shall have been terminated in accordance with its terms; or

•  the Laserscope Board (or any committee thereof) shall have made a Recommendation Change; or

•  Laserscope shall have entered into an agreement or agreement in principle (other than a confidentiality agreement permitted by the Merger Agreement) with respect to any Acquisition Proposal; or

•  a Material Adverse Effect with respect to Laserscope shall have occurred subsequent to March 31, 2006 and continue to exist.

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      The foregoing conditions are for the sole benefit of AMS and Purchaser and may be asserted by AMS regardless of the circumstances (including any action or omission by AMS or Purchaser) giving rise to any such condition or (other than the Minimum Condition) may, subject to the terms of the Merger Agreement, be waived by AMS and Purchaser in their reasonable discretion in whole at any time or in part from time to time. The failure by AMS or Purchaser at any time to exercise its rights under any of the foregoing conditions shall not be deemed a waiver of any such right; the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances, and each such right shall be deemed an ongoing right which may be asserted at any time or from time to time.

16. Certain Legal Matters; Regulatory Approvals.

      General. Except as described below, Purchaser is not aware of any material pending legal proceeding relating to the Offer. On June 7, 2006, two shareholders filed purported class action lawsuits in the Superior Court of the State of California, County of Santa Clara (collectively the “Shareholder Actions”) against Laserscope and five of its six directors. The Shareholder Actions purport to be brought on behalf of holders of Shares and allege the defendants breached their fiduciary duties in connection with the Offer and the Merger. The Shareholder Actions seek equitable relief, including a permanent injunction enjoining the Offer and the Merger.

      Based on its examination of publicly available information filed by Laserscope with the SEC and other publicly available information concerning Laserscope, Purchaser is not aware of any governmental license or regulatory permit that appears to be material to Laserscope’s business that might be adversely affected by Purchaser’s purchase of the Shares as contemplated herein or, except as set forth below, of any approval or other action by any government or governmental administrative or regulatory authority or agency, domestic or foreign, that would be required for the purchase or ownership of Shares by Purchaser or AMS as contemplated herein. Should any such approval or other action be required, Purchaser currently contemplates that, except as described below under “State Takeover Statutes — California” and “State Takeover Statutes — Other Jurisdictions,” such approval or other action will be sought. There can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that if such approval were not obtained or such other action were not taken, adverse consequences might not result to Laserscope’s business, or certain parts of Laserscope’s business might not have to be disposed of, any of which could cause Purchaser to elect to terminate the Offer without the purchase of Shares under certain conditions. See Section 15 of this Offer to Purchase, “— Certain Conditions of the Offer.”

      State Takeover Statutes — California. Laserscope is incorporated under the laws of the State of California. Section 1203 of the CGCL provides that if a tender offer is made to some or all of a corporation’s shareholders by an “interested party,” an affirmative opinion in writing as to the fairness of the consideration to the shareholders of such corporation is required to be delivered to the shareholders at the time that the tender offer is first made in writing to the shareholders. However, if the tender offer is commenced by publication and tender offer materials are subsequently mailed or otherwise distributed to the shareholders, the opinion may be omitted in the publication if the opinion is included in the materials distributed to the shareholders.

      Section 1203 also provides that if a tender offer is made to some or all of a corporations’ shareholders by an “interested party” and a later third party proposal to acquire the same corporation is made to the corporation or its shareholders at least ten days prior to the date for acceptance of the tendered shares, the shareholders of the corporation shall be informed of such later proposal, forwarded copies of any written materials provided by the person making the later proposal and given a reasonable period of time (10 days from the date of notice of the later proposal) to withdraw any tender in favor of the “interested party” tender offer.

      For purposes of Section 1203, the term “interested party” includes, among other things, a person who is a party to the transaction and who (A) directly or indirectly controls the corporation that is the subject of the tender offer or proposal, (B) is, or is directly or indirectly controlled by, an officer or director of the subject corporation or (C) is an entity in which a material financial interest is held by any director or executive officer of the subject corporation. None of Laserscope, AMS or Purchaser believes that the Offer constitutes a transaction that falls within the provisions of Section 1203.

      Under the CGCL, the Merger consideration paid to the shareholders of Laserscope may not be cash if Purchaser or AMS owns directly or indirectly more than 50% but less than 90% of the then outstanding Shares, unless either all

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the shareholders of Laserscope consent or the Commissioner of Corporations of the State of California approves, after a hearing, the terms and conditions of the Merger and the fairness thereof (the so called, “50-90 Rule”). If such shareholders do not consent or if the Commissioner of Corporation’s approval is not obtained, the 50-90 Rule states that the consideration received in the Merger may consist only of non-redeemable common stock of Purchaser. If, on any scheduled Expiration Date of the Offer, and subject to any applicable termination rights under the Merger Agreement, the number of Shares validly tendered and not properly withdrawn is less than 90% but more than 49.9%, Laserscope has the right to require Purchaser to either (i) exercise the Top-Up Option, but only to the extent that doing so would result in Purchaser, upon consummation of the Offer and the issuance of the Shares subject to the Top-Up Option, owning 90% of the fully diluted shares, or (ii) reduce the Minimum Condition to the 49.9% Revised Minimum Condition and purchase only 49.9% of the fully diluted shares in the Offer. Since AMS’ acquisition of Laserscope is an all cash transaction, these rights ensure that, following the consummation of the Offer in accordance with the terms of the Merger Agreement, Purchaser will not be permitted or required to issue any stock consideration in the Merger pursuant to the 50-90 Rule.

      See Section 11 of this Offer to Purchase entitled “— The Merger Agreement; Other Arrangements.”

      State Takeover Statutes — Other Jurisdictions. A number of states have adopted laws which purport, to varying degrees, to apply to attempts to acquire corporations that are incorporated in, or which have shareholders, principal executive offices or principal places of business, substantial assets, or whose business operations otherwise have substantial economic effects in, such states. Except as described herein, Purchaser does not know whether any of these laws will, by their terms, apply to the Offer or the Merger or any other business combination between Purchaser or any of its affiliates and Laserscope. To the extent that certain provisions of these laws purport to apply to the Offer or the Merger or other business combination, Purchaser believes that there are reasonable bases for contesting such laws. In 1982, in Edgar v. MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the Supreme Court of the United States held that the State of Indiana could, as a matter of corporate law, constitutionally disqualify a potential acquiror from voting shares of a target corporation without the prior approval of the remaining shareholders where, among other things, the corporation is incorporated in, and has a substantial number of shareholders in, the state. Subsequently, in TLX Acquisition Corp. v. Telex Corp., a Federal District Court in Oklahoma ruled that the Oklahoma statutes were unconstitutional insofar as they apply to corporations incorporated outside Oklahoma in that they would subject such corporations to inconsistent regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a Federal District Court in Tennessee ruled that four Tennessee takeover statutes were unconstitutional as applied to corporations incorporated outside Tennessee. This decision was affirmed by the United States Court of Appeals for the Sixth Circuit.

      Neither AMS nor Purchaser has determined whether any other state takeover laws or regulations will by their terms apply to the Offer or the Merger, and, except as set forth above, neither Purchaser nor AMS have attempted to comply with any state takeover statutes in connection with the Offer or the Merger. Purchaser and AMS reserve the right to challenge the validity or applicability of any state law allegedly applicable to the Offer or the Merger, and neither anything in this Offer to Purchase nor any action taken by AMS or Purchaser in connection with the Offer is intended as a waiver of that right. In the event it is asserted that one or more state takeover statutes is applicable to the Offer or the Merger and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer or the Merger, Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities or holders of Shares, and Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer or the Merger. In such case, Purchaser may not be obligated to accept for payment or pay for any tendered Shares. See Section 15 of this Offer to Purchase entitled “— Certain Conditions of the Offer.”

      Antitrust in the United States. Under the HSR Act and the rules that have been promulgated thereunder by the Federal Trade Commission (“FTC”), certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the “Antitrust Division”) and the FTC and certain waiting period requirements have been satisfied. The purchase of Shares pursuant to the Offer is subject to such requirements.

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      Pursuant to the requirements of the HSR Act, Purchaser expects to file a Notification and Report Form with respect to the Offer and Merger with the Antitrust Division and the FTC on or about June 15, 2006. The waiting period applicable to the purchase of Shares pursuant to the Offer is scheduled to expire at 11:59 p.m., Eastern Time, 15 days after such filing. However, prior to such time, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material relevant to the Offer from Purchaser. If such a request is made, the waiting period will be extended until 11:59 p.m., Eastern Time, on the tenth day after substantial compliance by Purchaser with such request. Thereafter, such waiting period can be extended only by court order.

      In practice, complying with a request for additional information or material can take a significant amount of time. In addition, if the Antitrust Division or the FTC raises substantive issues in connection with a proposed transaction, the parties frequently engage in negotiations with the relevant governmental agency concerning possible means of addressing those issues and may agree to delay consummation of the transaction while such negotiations continue. Expiration or termination of the applicable waiting period under the HSR Act is a condition to Purchaser’s obligation to accept for payment and pay for Shares tendered pursuant to the Offer.

      The Merger will not require an additional filing under the HSR Act if Purchaser owns 50% or more of the outstanding Shares at the time of the Merger or if the Merger occurs within one year after the HSR Act waiting period applicable to the Offer expires or is terminated.

      Any extension of the waiting period will not give rise to any withdrawal rights not otherwise provided for by applicable law. See Section 4 of this Offer to Purchase entitled “— Withdrawal Rights.” If Purchaser’s purchase of Shares is delayed pursuant to a request by the Antitrust Division or the FTC for additional information or documentary material pursuant to the HSR Act, the Offer will be extended in certain circumstances. See Section 15 of this Offer to Purchase entitled “— Certain Conditions of the Offer.”

      The Antitrust Division and the FTC scrutinize the legality under the antitrust laws of transactions such as the purchase of Shares by Purchaser pursuant to the Offer. At any time before or after the consummation of any such transactions, the Antitrust Division or the FTC could take such action under the antitrust laws of the United States as it deems necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer or seeking divestiture of the Shares so acquired or divestiture of substantial assets of AMS or Laserscope. Private parties (including individual states) may also bring legal actions under the antitrust laws of the United States under certain circumstances. Purchaser does not believe that the consummation of the Offer will result in a violation of any applicable antitrust laws. There can be no assurance that a challenge to the Offer on antitrust grounds will not be made, or if such a challenge is made, what the result will be. See Section 15 of this Offer to Purchase entitled, “— Certain Conditions of the Offer,” including conditions with respect to litigation and certain governmental actions and Section 11 of this Offer to Purchase entitled “— The Merger Agreement; Other Arrangements” for certain termination rights.

      Foreign Antitrust. AMS and Laserscope conduct operations in a large number of other jurisdictions throughout the world, where other antitrust filings or approvals may be required or advisable in connection with the completion of the Offer and the Merger. AMS and Purchaser currently intend to make filings or seek approvals in certain other jurisdictions if necessary; however, AMS and Purchaser do not expect such filings or approvals to materially delay the completion of the Offer or the consummation of the Merger. However, it cannot be ruled out that any foreign antitrust authority might seek to require remedial undertakings as a condition to its approval.

17. Dissenters’ Appraisal Rights.

      Holders of Shares do not have dissenters’ appraisal rights solely as a result of the Offer. If the Merger is consummated following the completion of the Offer, each holder of Shares who fully complies with and meets all the requirements of the provisions of Chapter 13 of the CGCL (“Qualifying Shareholders”) may have the right to require Laserscope to purchase the holder’s Shares for cash at “fair market value.” A Qualifying Shareholder will be entitled to exercise these dissenters’ appraisal rights under the CGCL only if (a) the holders of five percent or more of the outstanding Shares properly file demands for payment of the fair market value, or (b) if the Shares held by such holder are subject to any restriction on transfer imposed by Laserscope or by any law or regulation (“Restricted Shares”). Accordingly, if any holder of Restricted Shares or the holders of five percent or more of the Shares properly file demands for payment in compliance with Chapter 13 of the CGCL, all other Qualifying Shareholders

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will be entitled to require Laserscope to purchase their Shares for cash at their fair market value if the Merger is consummated. If the holders of less than five percent of the Shares properly file demands for payment in compliance with Chapter 13 of the CGCL but any holder of Restricted Shares properly files such a demand, only such holder or holders of Restricted Shares shall be entitled to require Laserscope to purchase their Shares as described in the preceding sentence. In addition, if immediately prior to the Effective Time, the Shares are not listed on a national securities exchange certified by the California Commissioner of Corporations or listed on the National Market System of The Nasdaq Stock Market, holders of Shares may exercise dissenters’ appraisal rights as to any or all of their Shares entitled to such rights. If the Merger is not consummated, no Qualifying Shareholder will be entitled to have Laserscope purchase such holder’s Shares under Chapter 13 of the CGCL.

      Under the CGCL, the “fair market value” of the Shares may be one agreed to by Laserscope and the Qualifying Shareholders or judicially determined, depending on the circumstances. The “fair market value” is determined as of the day before the first announcement of the terms of the proposed Merger, excluding any appreciation or depreciation as a result of the Merger and subject to adjustments. The value so determined could be more or less than the Offer Price. Moreover, a damages remedy or injunctive relief may be available if the Merger is found to be the product of procedural unfairness, including fraud, misrepresentation or other misconduct.

      If a shareholder and Laserscope do not agree on whether that shareholder is a Qualifying Shareholder, or if a Qualifying Shareholder and Laserscope fail to agree on the fair market value of Shares and neither Laserscope nor the Qualifying Shareholder files a complaint or intervenes in a pending action within six months after Laserscope mails the required notice that shareholders have approved the Merger, that shareholder does not have (or will cease to have) rights as a dissenting shareholder. After a shareholder files a demand to exercise dissenters’ appraisal rights, that shareholder may not withdraw the demand without Laserscope’s consent.

      The foregoing discussion of the rights of Qualifying Shareholders does not purport to be a complete statement of the procedures to be followed by shareholders desiring to exercise any available dissenters’ appraisal rights and is qualified in its entirety by reference to Chapter 13 of the CGCL, which is set forth in Schedule III to this Offer to Purchase and incorporated herein by reference.

18. Fees and Expenses.

      Piper Jaffray & Co. is acting as the Dealer Manager in connection with the Offer and as financial advisor to AMS in connection with the Offer and the Merger, for which services Piper Jaffray & Co. will receive reasonable and customary compensation. AMS has agreed to reimburse Piper Jaffray & Co. for reasonable fees and expenses incurred by it in performing its services as financial advisor and Dealer Manager, including reasonable fees and expenses of its legal counsel, and to indemnify Piper Jaffray & Co. and certain related parties against certain liabilities, including liabilities under the federal securities laws, arising out of its engagement as financial advisor and Dealer Manager. In its capacity as Dealer Manager, Piper Jaffray & Co. may contact holders of shares regarding the Offer and may request brokers, dealers and other nominees to forward this Offer to Purchase and related materials to beneficial owners of Shares. Piper Jaffray & Co. and its affiliates have engaged, and may from time to time in the future engage, in various investment banking and financial advisory transactions with AMS and its affiliates, including in connection with the Offer and in various financing transactions related to the Offer. Additionally, in the ordinary course of business, Piper Jaffray & Co. and its affiliates may actively trade or hold the securities of AMS, Laserscope and their respective affiliates for Piper Jaffray & Co. and its affiliates’ own account or for the account of customers and, accordingly, may at any time hold a long or short position in such securities.

      AMS and Purchaser have retained American Stock Transfer & Trust Company to be the Depositary in connection with the Offer. The Depositary will receive reasonable and customary compensation for its services in connection with the Offer, will be reimbursed for reasonable out-of-pocket expenses, and will be indemnified against certain liabilities and expenses in connection therewith, including certain liabilities under federal securities laws. Neither AMS nor Purchaser will pay any fees or commissions to any broker or dealer or to any other person (other than to the Dealer Manager and the Depositary, and, to the limited extent provided below, the Information Agent, in connection with the solicitation of tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies will, upon request, be reimbursed by Purchaser for customary mailing and handling expenses incurred by them in forwarding offering materials to their customers.

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      Laserscope retained a tender and proxy solicitation firm, Georgeson Shareholder Communications Inc. (“Georgeson”), to solicit tenders in connection with the Offer and proxies for any special meeting Laserscope holds from Laserscope shareholders. Pursuant to a letter agreement dated June 8, 2006, Laserscope agreed to pay a fee of $20,000, plus reasonable expenses, to Georgeson for its services. Laserscope also agreed to indemnify Georgeson against claims brought by third parties arising in connection with its solicitation of tenders for the Offer and proxies for the special meeting. AMS has agreed to pay all charges and expenses of Georgeson incurred in connection with a summary advertisement regarding the Offer published in The Wall Street Journal on June 14, 2006.

      None of the Dealer Manager, the Information Agent or the Depositary assumes any responsibility for the accuracy or completeness of the information contained or referred to in this Offer to Purchase or for any failure of AMS, Purchaser or Laserscope to disclose events that affect the significance or accuracy of such information.

19. Miscellaneous.

      Neither Purchaser nor AMS is aware of any jurisdiction where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If either Purchaser or AMS becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares, AMS and Purchaser will make a good faith effort to comply with that state statute. If, after a good faith effort, Purchaser and AMS cannot comply with the state statute, the Offer will not be made to, nor will tenders be accepted from or on behalf of, the holders of Shares in that state.

      No person has been authorized to give any information or to make any representation on behalf of AMS or Purchaser not contained in this Offer to Purchase or the related Letter of Transmittal and, if given or made, such information or representation must not be relied upon as having been authorized.

      Purchaser has filed with the SEC a Tender Offer Statement on Schedule TO pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act, together with exhibits furnishing certain additional information with respect to the Offer, and may file amendments thereto. In addition, Laserscope has filed with the SEC a Solicitation/ Recommendation Statement on Schedule 14D-9, together with exhibits, pursuant to Rule 14d-9 under the Exchange Act, setting forth the recommendations of Laserscope Board with respect to the Offer and the reasons for such recommendations and furnishing certain additional related information. A copy of such documents, and any amendments thereto, may be examined at, and copies may be obtained from, the SEC (but not the regional offices of the SEC) in the manner set forth in Section 7 of this Offer to Purchase entitled “— Certain Information Concerning Laserscope.”

Kermit Merger Corp.

June 14, 2006

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SCHEDULE I:

DIRECTORS AND EXECUTIVE OFFICERS OF AMS AND PURCHASER

1. Directors and Executive Officers of AMS.

      The following table sets forth the name and present principal occupation or employment, and material occupations, positions, offices or employment for the past five years of each director and executive officer of AMS. Unless otherwise indicated below, each occupation set forth opposite each person refers to employment with AMS. Unless otherwise indicated, the business address of each such person is c/o American Medical Systems Holdings, Inc. at 10700 Bren Road West, Minnetonka, Minnesota 55343 and each such person is a citizen of the United States.

Directors and Executive Officers	Present Principal and Five-Year Employment History
Thomas E. Timbie	Director; Audit Committee Chair; Nominating/ Corporate Governance Committee Chair. President of Timbie & Company, LLC, a financial and management consulting firm he founded in 2000. From January 2005 to June 2005, he was also the interim Vice President and Chief Financial Officer for ev3 Inc., an endovascular company. Formerly, he was the Interim Vice President and Chief Financial Officer of e-dr. Network, Inc., a business-to-business exchange in the optical market from January 2000 to October 2000. From April 1996 to December 1999, Mr. Timbie was the Vice President and Chief Financial Officer of Xomed Surgical Products, Inc., which was acquired by Medtronic, Inc. in November 1999. Mr. Timbie has over 20 years of financial and accounting experience in a variety of industries with particular emphasis on medical devices. Mr. Timbie is currently a director of two other public companies: Wright Medical Group, Inc. and ev3 Inc. Mr. Timbie is also the audit committee chairman for Wright Medical Group, Inc.
Elizabeth H. Weatherman	Director; Compensation Committee Member. She is a Managing Director of Warburg Pincus LLC, where she has been a member of the health care group since 1988. She is responsible for Warburg Pincus’s medical device investment activities. Ms. Weatherman currently serves on the board of directors of two other publicly held companies: Kyphon Inc. and ev3 Inc. Ms. Weatherman also serves on the compensation committee of each of the foregoing boards.
Martin J. Emerson	Director; President and Chief Executive Officer. Mr. Emerson has been a director since January 4, 2005, and also serves on Purchaser’s Board and is Purchaser’s President and Chief Executive Officer. Mr. Emerson also served as AMS’ President and Chief Operating Officer from March 2004 until January 4, 2005. From January 2003 to March 2004, he served as Executive Vice President, Global Sales and Marketing, and Chief Operating Officer. From 2000 through 2002, he served as Vice President and General Manager of International. Mr. Emerson has over 20 years experience in the medical device field in finance and general management capacities. From 1998 to 2000, he served as General Manager and Finance Director for Boston Scientific Corporation (a worldwide developer, manufacturer and marketer of medical devices that are used in a broad range of interventional medical specialties) in Singapore. Also in Singapore, he was Vice President and Regional Financial Officer with MasterCard International, a leading global payment solutions company that provides a variety of services in support of the credit, debit and related payment programs of nearly 25,000 financial institutions, from 1997 to 1998. Mr. Emerson’s earlier experience was with Baxter International from 1985 to 1997, most recently as Vice President Finance, Hospital Business, Brussels, from 1995 to 1997.

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Directors and Executive Officers	Present Principal and Five-Year Employment History
Albert Jay Graf	Director; Audit Committee Member; Compensation Committee Chair. He has served as one of AMS’ directors since September 2001. From 2000 through May 2004, Mr. Graf was Group Chairman, Office of the President of Guidant Corporation, a provider of therapies for cardiovascular and vascular disease, responsible for Guidant’s four operating groups. From 1994 until 2000, Mr. Graf served as President of Guidant’s Cardiac Rhythm Management operating group. In October 2005, Mr. Graf joined New Enterprise Associates, a venture capital firm, as a venture partner. Mr. Graf currently serves on the board of CVRx, a privately held company and Intermagnetics General Corporation, a developer, manufacturer and marketer of high-field MRI magnets, radio frequency coils used with MRI systems, patient monitors and other diagnostic subsystems and components and North State Neuroscience, a developer and manufacturer of therapeutic devices for the treatment of stroke related motor disorders, both public companies.
Richard B. Emmitt	Director; Audit Committee Member. He has been a Managing Director of The Vertical Group, Inc., an investment management and venture capital firm focused on the medical device industry, since 1989. From 1998 through March 9, 2006, Mr. Emmitt served on the board of directors of Wright Medical Group, Inc., a global orthopedic medical device company specializing in the design, manufacture and marketing of reconstructive joint devices and biologics products, a publicly held company. Mr. Emmitt currently serves on the board of directors of ev3 Inc., a publicly held company and a leading global medical device company focused on catheter-based, or endovascular, technologies for the minimally invasive treatment of vascular diseases and disorders, as well as Axya Medical, Inc., BioSET, Inc., Incumed Inc., OsteoBiologics, Inc., SPMR, Inc., Spondylogix, Inc., and Tepha, Inc., all privately held companies.
Christopher H. Porter, Ph.D.	Director; Nominating/ Corporate Governance Committee Member. He is the Principal of Medical Genesis, a consulting company he founded in 1992. His 30-year career in the medical device industry includes research and development and management experience with 3M, Johnson & Johnson and Pfizer, Inc., as well as several early stage companies. Dr. Porter also served as AMS’ Vice President, Research and Development from 1981 to 1987. He has introduced over 30 medical products during his career and holds 34 U.S. patents. Dr. Porter currently serves as Trustee of SBRI, a non-profit biotech company that is engaged in the business of developing cures for infectious disease.
Carmen L. Diersen	Executive Vice President, Chief Financial Officer and Corporate Secretary. Ms. Diersen also serves on Purchaser’s Board and is Purchaser’s Chief Financial Officer and Secretary. She has served as AMS’ Executive Vice President, Chief Financial Officer, and Corporate Secretary since March 2004. From 1992 to 2004, she held positions of increasing domestic and international responsibility in finance, business development, and general management at Medtronic, Inc., a global leader in medical technology. Most recently, Ms. Diersen was Vice President, Business Development. From March 2002 through 2003, she was Vice President, General Manager, Musculoskeletal Tissue Services; and from February 1999 through March 2002, she was Vice President of Finance and Administration and Vice President of Business Development, Americas and Asia Pacific. From 1982 to 1992, she held various positions at Honeywell, Inc. Ms. Diersen currently serves as a director of Memry Corporation, a publicly-held company that provides design, engineering, development and manufacturing services to the medical device industry and other industries, and as a director of SonoSite, Inc., a publicly-held company that develops, manufactures and markets hand-held ultrasound systems.

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Directors and Executive Officers	Present Principal and Five-Year Employment History
Ross A. Longhini	Executive Vice President and Chief Technology Officer. He has served as AMS’ Executive Vice President and Chief Technology Officer since January 2003. Mr. Longhini has over 20 years of experience in the field of medical device product development. From 1998 to 2002, he served in various management positions in Sulzer Spine-Tech of Minnesota including Vice President, Research and Development, Clinical & Regulatory. From 1991 to 1998, he worked at I.V. Infusion Therapy of 3M which was sold to Gaseby in 1996 then purchased by Smiths Medical Systems in 1997. From 1983 to 1991, he worked at 3M Dental Products.
Lawrence W. Getlin	Senior Vice President, Regulatory, Medical Affairs and Quality Systems and Corporate Compliance Officer. He has served as AMS’ Vice President, Regulatory, Medical Affairs, and Quality Systems since 1990 and as Corporate Compliance Officer since 2003. He is a member of the American Bar Association and the California State Bar, as well as the U.S. Court of Appeals 9th District, and District Court, Central District of California, and is Regulatory Affairs Certified.
Janet L. Dick	Senior Vice President, Human Resources. She has served as AMS’ Vice President of Human Resources since 1996. Overall, Ms. Dick has spent 20 years in positions of increasing responsibility within AMS’ human resources department and Schneider’s human resources department, both of which were divisions of Pfizer at one time. Her prior human resources career was in banking, commercial construction, and mortgage banking.
John F. Nealon	Senior Vice President, Business Development. Mr. Nealon also serves as Purchaser’s Senior Vice President of Business Development. He has served as AMS’ Senior Vice President of Business Development since April 2005 and previously as AMS’ Vice President of Global Marketing from January 2002. From 1996 to 2001, he served on the management team at Survivalink, a start-up medical device company which developed and marketed automated external defibrillators. In 1996, he served as Director of Product Marketing for Summit Medical, a provider of specialty clinical research services to pharmaceutical, medical device and biotechnology manufacturers and from 1989 to 1996, he served in a variety of global product marketing roles at GE Medical Systems.
Stephen J. McGill	Vice President, Global Sales. He has served as AMS’ Vice President, Global Sales since May 2005. Previously he was Vice President and General Manager of International, and Vice President of Sales and Marketing for Europe, and he held various sales leadership positions within Europe after joining AMS in November 2000. Mr. McGill’s medical device experience includes Boston Scientific Corporation (urology division) (a worldwide developer, manufacturer and marketer of medical devices that are used in a broad range of interventional medical specialties), Bolton Medical, Stryker UK and Allergan.

2. Directors and Executive Officers of Purchaser.

      The following table sets forth the name and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each director and executive officer of Purchaser. Unless otherwise indicated below, each occupation set forth opposite each person refers to employment with AMS. Unless otherwise indicated, the business address of each such person is c/o American Medical Systems Holdings, Inc. at 10700 Bren Road West, Minnetonka, Minnesota 55343 and each such person is a citizen of the United States.

Directors and Executive Officers Present Principal and Five-Year Employment History

Martin J. Emerson Director; President and Chief Executive Officer. Mr. Emerson also serves as a Director of AMS and as AMS’ President and Chief Executive Officer. He has been a director of AMS since January 4, 2005. Mr. Emerson also served as

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	AMS’ President and Chief Operating Officer from March 2004 until January 4, 2005. From January 2003 to March 2004, he served as AMS’ Executive Vice President, Global Sales and Marketing, and Chief Operating Officer. From 2000 through 2002, he served as Vice President and General Manager of International for AMS. Mr. Emerson has over 20 years experience in the medical device field in finance and general management capacities. From 1998 to 2000, he served as General Manager and Finance Director for Boston Scientific Corporation (a worldwide developer, manufacturer and marketer of medical devices that are used in a broad range of interventional medical specialties) in Singapore. Also in Singapore, he was Vice President and Regional Financial Officer with MasterCard International, a leading global payment solutions company that provides a variety of services in support of the credit, debit and related payment programs of nearly 25,000 financial institutions, from 1997 to 1998. Mr. Emerson’s earlier experience was with Baxter International from 1985 to 1997, most recently as Vice President Finance, Hospital Business, Brussels, from 1995 to 1997.
Carmen L. Diersen	Director; Chief Financial Officer and Secretary. Ms. Diersen also serves as AMS’ Executive Vice President, Chief Financial Officer and Corporate Secretary. She has served as AMS’ Executive Vice President, Chief Financial Officer, and Corporate Secretary since March 2004. From 1992 to 2004, she held positions of increasing domestic and international responsibility in finance, business development, and general management at Medtronic, Inc., a global leader in medical technology. Most recently, Ms. Diersen was Vice President, Business Development. From March 2002 through 2003, she was Vice President, General Manager, Musculoskeletal Tissue Services; and from February 1999 through March 2002, she was Vice President of Finance and Administration and Vice President of Business Development, Americas and Asia Pacific. From 1982 to 1992, she held various positions at Honeywell, Inc. Ms. Diersen currently serves as a director of Memry Corporation, a publicly-held company that provides design, engineering, development and manufacturing services to the medical device industry and other industries, and as a director of SonoSite, Inc., a publicly-held company that develops, manufactures and markets hand-held ultrasound systems.
John Nealon	Senior Vice President of Business Development. Mr. Nealon also serves as AMS’ Senior Vice President, Business Development. He has served as AMS’ Senior Vice President of Business Development since April 2005 and previously as AMS’ Vice President of Global Marketing from January 2002. From 1996 to 2001, he served on the management team at Survivalink, a start-up medical device company which developed and marketed automated external defibrillators. In 1996, he served as Director of Product Marketing for Summit Medical, a provider of specialty clinical research services to pharmaceutical, medical device and biotechnology manufacturers and from 1989 to 1996, he served in a variety of global product marketing roles at GE Medical Systems.

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SCHEDULE II:

DIRECTORS AND EXECUTIVE OFFICERS OF AMS AND PURCHASER WHO OWN SHARES OF LASERSCOPE

      The following table sets forth the name of each director and executive officer of AMS and Purchaser who beneficially owns Shares of Laserscope and the number of Shares beneficially owned by each.

      None.

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SCHEDULE III:

CHAPTER 13 OF THE CALIFORNIA GENERAL CORPORATION LAW

DISSENTERS’ RIGHTS

      1300.

      (a) If the approval of the outstanding shares (Section 152) of a corporation is required for a reorganization under subdivisions (a) and (b) or subdivision (e) or (f) of Section 1201, each shareholder of the corporation entitled to vote on the transaction and each shareholder of a subsidiary corporation in a short-form merger may, by complying with this chapter, require the corporation in which the shareholder holds shares to purchase for cash at their fair market value the shares owned by the shareholder which are dissenting shares as defined in subdivision (b). The fair market value shall be determined as of the day before the first announcement of the terms of the proposed reorganization or short-form merger, excluding any appreciation or depreciation in consequence of the proposed action, but adjusted for any stock split, reverse stock split, or share dividend which becomes effective thereafter.

      (b) As used in this chapter, “dissenting shares” means shares which come within all of the following descriptions:

      (1) Which were not immediately prior to the reorganization or short-form merger either (A) listed on any national securities exchange certified by the Commissioner of Corporations under subdivision (o) of Section 25100 or (B) listed on the National Market System of the NASDAQ Stock Market, and the notice of meeting of shareholders to act upon the reorganization summarizes this section and Sections 1301, 1302, 1303 and 1304; provided, however, that this provision does not apply to any shares with respect to which there exists any restriction on transfer imposed by the corporation or by any law or regulation; and provided, further, that this provision does not apply to any class of shares described in subparagraph (A) or (B) if demands for payment are filed with respect to 5 percent or more of the outstanding shares of that class.

      (2) Which were outstanding on the date for the determination of shareholders entitled to vote on the reorganization and (A) were not voted in favor of the reorganization or, (B) if described in subparagraph (A) or (B) of paragraph (1) (without regard to the provisos in that paragraph), were voted against the reorganization, or which were held of record on the effective date of a short-form merger; provided, however, that subparagraph (A) rather than subparagraph (B) of this paragraph applies in any case where the approval required by Section 1201 is sought by written consent rather than at a meeting.

      (3) Which the dissenting shareholder has demanded that the corporation purchase at their fair market value, in accordance with Section 1301.

      (4) Which the dissenting shareholder has submitted for endorsement, in accordance with Section 1302.

      (c) As used in this chapter, “dissenting shareholder” means the recordholder of dissenting shares and includes a transferee of record.

      1301.

      (a) If, in the case of a reorganization, any shareholders of a corporation have a right under Section 1300, subject to compliance with paragraphs (3) and (4) of subdivision (b) thereof, to require the corporation to purchase their shares for cash, such corporation shall mail to each such shareholder a notice of the approval of the reorganization by its outstanding shares (Section 152) within 10 days after the date of such approval, accompanied by a copy of Sections 1300, 1302, 1303, 1304 and this section, a statement of the price determined by the corporation to represent the fair market value of the dissenting shares, and a brief description of the procedure to be followed if the shareholder desires to exercise the shareholder’s right under such sections. The statement of price constitutes an offer by the corporation to purchase at the price stated any dissenting shares as defined in subdivision (b) of Section 1300, unless they lose their status as dissenting shares under Section 1309.

      (b) Any shareholder who has a right to require the corporation to purchase the shareholder’s shares for cash under Section 1300, subject to compliance with paragraphs (3) and (4) of subdivision (b) thereof, and who desires the corporation to purchase such shares shall make written demand upon the corporation for the purchase of such

49

shares and payment to the shareholder in cash of their fair market value. The demand is not effective for any purpose unless it is received by the corporation or any transfer agent thereof (1) in the case of shares described in clause (i) or (ii) of paragraph (1) of subdivision (b) of Section 1300 (without regard to the provisos in that paragraph), not later than the date of the shareholders’ meeting to vote upon the reorganization, or (2) in any other case within 30 days after the date on which the notice of the approval by the outstanding shares pursuant to subdivision (a) or the notice pursuant to subdivision (i) of Section 1110 was mailed to the shareholder.

      (c) The demand shall state the number and class of the shares held of record by the shareholder which the shareholder demands that the corporation purchase and shall contain a statement of what such shareholder claims to be the fair market value of those shares as of the day before the announcement of the proposed reorganization or short-form merger. The statement of fair market value constitutes an offer by the shareholder to sell the shares at such price.

      1302. Within 30 days after the date on which notice of the approval by the outstanding shares or the notice pursuant to subdivision (i) of Section 1110 was mailed to the shareholder, the shareholder shall submit to the corporation at its principal office or at the office of any transfer agent thereof, (a) if the shares are certificated securities, the shareholder’s certificates representing any shares which the shareholder demands that the corporation purchase, to be stamped or endorsed with a statement that the shares are dissenting shares or to be exchanged for certificates of appropriate denomination so stamped or endorsed or (b) if the shares are uncertificated securities, written notice of the number of shares which the shareholder demands that the corporation purchase. Upon subsequent transfers of the dissenting shares on the books of the corporation, the new certificates, initial transaction statement, and other written statements issued therefor shall bear a like statement, together with the name of the original dissenting holder of the shares.

      1303.

      (a) If the corporation and the shareholder agree that the shares are dissenting shares and agree upon the price of the shares, the dissenting shareholder is entitled to the agreed price with interest thereon at the legal rate on judgments from the date of the agreement. Any agreements fixing the fair market value of any dissenting shares as between the corporation and the holders thereof shall be filed with the secretary of the corporation.

      (b) Subject to the provisions of Section 1306, payment of the fair market value of dissenting shares shall be made within 30 days after the amount thereof has been agreed or within 30 days after any statutory or contractual conditions to the reorganization are satisfied, whichever is later, and in the case of certificated securities, subject to surrender of the certificates therefor, unless provided otherwise by agreement.

      1304.

      (a) If the corporation denies that the shares are dissenting shares, or the corporation and the shareholder fail to agree upon the fair market value of the shares, then the shareholder demanding purchase of such shares as dissenting shares or any interested corporation, within six months after the date on which notice of the approval by the outstanding shares (Section 152) or notice pursuant to subdivision (i) of Section 1110 was mailed to the shareholder, but not thereafter, may file a complaint in the superior court of the proper county praying the court to determine whether the shares are dissenting shares or the fair market value of the dissenting shares or both or may intervene in any action pending on such a complaint.

      (b) Two or more dissenting shareholders may join as plaintiffs or be joined as defendants in any such action and two or more such actions may be consolidated.

      (c) On the trial of the action, the court shall determine the issues. If the status of the shares as dissenting shares is in issue, the court shall first determine that issue. If the fair market value of the dissenting shares is in issue, the court shall determine, or shall appoint one or more impartial appraisers to determine, the fair market value of the shares.

      1305.

      (a) If the court appoints an appraiser or appraisers, they shall proceed forthwith to determine the fair market value per share. Within the time fixed by the court, the appraisers, or a majority of them, shall make and file a report

50

in the office of the clerk of the court. Thereupon, on the motion of any party, the report shall be submitted to the court and considered on such evidence as the court considers relevant. If the court finds the report reasonable, the court may confirm it.

      (b) If a majority of the appraisers appointed fail to make and file a report within 10 days from the date of their appointment or within such further time as may be allowed by the court or the report is not confirmed by the court, the court shall determine the fair market value of the dissenting shares.

      (c) Subject to the provisions of Section 1306, judgment shall be rendered against the corporation for payment of an amount equal to the fair market value of each dissenting share multiplied by the number of dissenting shares which any dissenting shareholder who is a party, or who has intervened, is entitled to require the corporation to purchase, with interest thereon at the legal rate from the date on which judgment was entered.

      (d) Any such judgment shall be payable forthwith with respect to uncertificated securities and, with respect to certificated securities, only upon the endorsement and delivery to the corporation of the certificates for the shares described in the judgment. Any party may appeal from the judgment.

      (e) The costs of the action, including reasonable compensation to the appraisers to be fixed by the court, shall be assessed or apportioned as the court considers equitable, but, if the appraisal exceeds the price offered by the corporation, the corporation shall pay the costs (including in the discretion of the court attorneys’ fees, fees of expert witnesses and interest at the legal rate on judgments from the date of compliance with Sections 1300, 1301 and 1302 if the value awarded by the court for the shares is more than 125 percent of the price offered by the corporation under subdivision(a) of Section 1301).

      1306. To the extent that the provisions of Chapter 5 prevent the payment to any holders of dissenting shares of their fair market value, they shall become creditors of the corporation for the amount thereof together with interest at the legal rate on judgments until the date of payment, but subordinate to all other creditors in any liquidation proceeding, such debt to be payable when permissible under the provisions of Chapter 5.

      1307. Cash dividends declared and paid by the corporation upon the dissenting shares after the date of approval of the reorganization by the outstanding shares (Section 152) and prior to payment for the shares by the corporation shall be credited against the total amount to be paid by the corporation therefor.

      1308. Except as expressly limited in this chapter, holders of dissenting shares continue to have all the rights and privileges incident to their shares, until the fair market value of their shares is agreed upon or determined. A dissenting shareholder may not withdraw a demand for payment unless the corporation consents thereto.

      1309. Dissenting shares lose their status as dissenting shares and the holders thereof cease to be dissenting shareholders and cease to be entitled to require the corporation to purchase their shares upon the happening of any of the following:

      (a) The corporation abandons the reorganization. Upon abandonment of the reorganization, the corporation shall pay on demand to any dissenting shareholder who has initiated proceedings in good faith under this chapter all necessary expenses incurred in such proceedings and reasonable attorneys’ fees.

      (b) The shares are transferred prior to their submission for endorsement in accordance with Section 1302 or are surrendered for conversion into shares of another class in accordance with the articles.

      (c) The dissenting shareholder and the corporation do not agree upon the status of the shares as dissenting shares or upon the purchase price of the shares, and neither files a complaint or intervenes in a pending action as provided in Section 1304, within six months after the date on which notice of the approval by the outstanding shares or notice pursuant to subdivision (i) of Section 1110 was mailed to the shareholder.

      (d) The dissenting shareholder, with the consent of the corporation, withdraws the shareholder’s demand for purchase of the dissenting shares.

      1310. If litigation is instituted to test the sufficiency or regularity of the votes of the shareholders in authorizing a reorganization, any proceedings under Sections 1304 and 1305 shall be suspended until final determination of such litigation.

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      1311. This chapter, except Section 1312, does not apply to classes of shares whose terms and provisions specifically set forth the amount to be paid in respect to such shares in the event of a reorganization or merger.

      1312.

      (a) No shareholder of a corporation who has a right under this chapter to demand payment of cash for the shares held by the shareholder shall have any right at law or in equity to attack the validity of the reorganization or short-form merger, or to have the reorganization or short-form merger set aside or rescinded, except in an action to test whether the number of shares required to authorize or approve the reorganization have been legally voted in favor thereof; but any holder of shares of a class whose terms and provisions specifically set forth the amount to be paid in respect to them in the event of a reorganization or short-form merger is entitled to payment in accordance with those terms and provisions or, if the principal terms of the reorganization are approved pursuant to subdivision (b) of Section 1202, is entitled to payment in accordance with the terms and provisions of the approved reorganization.

      (b) If one of the parties to a reorganization or short-form merger is directly or indirectly controlled by, or under common control with, another party to the reorganization or short-form merger, subdivision (a) shall not apply to any shareholder of such party who has not demanded payment of cash for such shareholder’s shares pursuant to this chapter; but if the shareholder institutes any action to attack the validity of the reorganization or short-form merger or to have the reorganization or short-form merger set aside or rescinded, the shareholder shall not thereafter have any right to demand payment of cash for the shareholder’s shares pursuant to this chapter. The court in any action attacking the validity of the reorganization or short-form merger or to have the reorganization or short-form merger set aside or rescinded shall not restrain or enjoin the consummation of the transaction except upon 10 days’ prior notice to the corporation and upon a determination by the court that clearly no other remedy will adequately protect the complaining shareholder or the class of shareholders of which such shareholder is a member.

      (c) If one of the parties to a reorganization or short-form merger is directly or indirectly controlled by, or under common control with, another party to the reorganization or short-form merger, in any action to attack the validity of the reorganization or short-form merger or to have the reorganization or short-form merger set aside or rescinded, (1) a party to a reorganization or short-form merger which controls another party to the reorganization or short-form merger shall have the burden of proving that the transaction is just and reasonable as to the shareholders of the controlled party, and (2) a person who controls two or more parties to a reorganization shall have the burden of proving that the transaction is just and reasonable as to the shareholders of any party so controlled.

      1313. A conversion pursuant to Chapter 11.5 (commencing with Section 1150) shall be deemed to constitute a reorganization for purposes of applying the provisions of this chapter, in accordance with and to the extent provided in Section 1159.

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      Facsimile copies of the Letter of Transmittal, properly completed and duly signed, will be accepted. The Letter of Transmittal, Share Certificates and any other required documents should be sent by each shareholder or such shareholder’s broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of the addresses set forth below:

The Depositary and Paying Agent for the Offer is:

By Mail or Overnight Courier:	By Hand:
American Stock Transfer & Trust Company	American Stock Transfer & Trust Company
Operations Center	Attn: Reorganization Department
Attn: Reorganization Department	59 Maiden Lane
6201 15th Avenue	New York, NY 10038
Brooklyn, NY 11219
By Facsimile Transmission:	Confirmation Receipt of Facsimile
(For Eligible Institutions Only)	by Telephone Only:
718-234-5001	718-921-8317

      Questions and requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers as set forth below. Additional copies of this Offer to Purchase, the Letter of Transmittal, or other related tender offer materials may be obtained from the Information Agent or from brokers, dealers, commercial banks or trust companies.

The Information Agent for the Offer is:

17 State Street — 10th Floor

New York, NY 10004

Banks and Brokers Call 212.440.9800

All others call Toll-Free 1.866.695.6069

The Dealer Manager for the Offer is:

800 Nicollet Mall, Mailstop J12S03

Minneapolis, Minnesota 55402

Call Toll Free (877) 371-5212

EX-99.(A)(1)(B)

Exhibit (a)(1)(B)

LETTER OF TRANSMITTAL

to

Tender Shares of Common Stock

of

LASERSCOPE

at

$31.00 NET PER SHARE

to

KERMIT MERGER CORP.

an indirect subsidiary of

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

THE OFFER (AS DEFINED HEREIN) AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, CENTRAL TIME, ON WEDNESDAY, JULY 12, 2006 UNLESS THE OFFER IS EXTENDED.

The Depositary for the Offer is:

By Mail or Overnight Courier:	By Hand:
American Stock Transfer & Trust Company Operations Center Attn: Reorganization Department 6201 15th Avenue Brooklyn, NY 11219	American Stock Transfer & Trust Company Attn: Reorganization Department 59 Maiden Lane New York, NY 10038

By Facsimile Transmission:
(For Eligible Institutions Only)
718-234-5001 Confirmation Receipt of Facsimile
by Telephone Only:
718-921-8317

Name(s) and Address of Registered Holder(s)
If there is any error in the name or address shown below, please make the necessary corrections
This Letter of Transmittal is to be completed by shareholders, either if Share Certificates (as defined below) are to be forwarded herewith or, unless an Agent’s Message (as defined in the Offer to Purchase, as referred to below) is utilized, if tenders of Shares (as defined below) are to be made by book-entry transfer into the account of American Stock Transfer & Trust Company, as Depositary (the “Depositary”), at The Depository Trust Company (the “Book-Entry Transfer Facility”) pursuant to the procedures set forth in Section 3 of the Offer to Purchase. Shareholders who tender Shares by book-entry transfer are referred to herein as “Book-Entry Shareholders.” Shareholders whose Share Certificates are not immediately available or who cannot deliver their Share Certificates and all other required documents to the Depositary on or prior to the Expiration Date (as defined in the Offer to Purchase), or who cannot complete the procedure for book-entry transfer on a timely basis, must tender their Shares according to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary.

DESCRIPTION OF SHARES TENDERED

Shares Tendered
(Attach additional list if necessary)
	Total Number of Shares	Number of
Certificate Number(s)*	Represented by Certificate(s)*	Shares Tendered**
Total Shares

  * Need not be completed by shareholders tendering by book-entry transfer.

  **  Unless otherwise indicated, it will be assumed that all Shares represented by any certificates delivered to the Depositary are being tendered. See Instruction 4.

SPECIAL TENDER INSTRUCTIONS

     o  CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):

     Name of Tendering Institution: 

     Account Number: 

     Transaction Code Number: 

     o  CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING (please enclose a photocopy of such notice of guaranteed delivery):

     Name(s) of Registered Owner(s): 

     Window Ticket Number (if any): 

     Date of Execution of Notice of Guaranteed Delivery: 

     Name of Institution that Guaranteed Delivery: 

     Account Number: 

     Transaction Code Number: 

     o CHECK HERE IF ANY SHARE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE BEEN LOST, STOLEN OR DESTROYED AND SEE INSTRUCTION 11.

     Number of Shares represented by lost, stolen or destroyed Share Certificates: 

     *  YOU MUST CONTACT THE TRANSFER AGENT TO HAVE ALL LOST SHARE CERTIFICATES REPLACED IF YOU WANT TO TENDER SUCH SHARES. SEE PARAGRAPH 11 OF THE ATTACHED INSTRUCTIONS FOR CONTACT INFORMATION FOR THE TRANSFER AGENT.

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NOTE: SIGNATURES MUST BE PROVIDED ON PAGE 6

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

      The undersigned hereby tenders to Kermit Merger Corp., a California corporation (“Purchaser”) and an indirect subsidiary of American Medical Systems Holdings, Inc., a Delaware corporation (“AMS”), the above described shares of common stock of Laserscope, a California corporation (“Laserscope”), no par value (the “Shares,” and the certificates representing such Shares the “Share Certificates”), at a price of $31.00 per Share, net to the seller in cash, less any required withholding of taxes and without the payment of interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 14, 2006 (the “Offer to Purchase”), receipt of which is hereby acknowledged, and in this Letter of Transmittal (the “Letter of Transmittal,” which, together with the Offer to Purchase, as each may be amended or supplemented from time to time, collectively constitute the “Offer”).

      Subject to, and effective upon, acceptance for payment of the Shares tendered herewith in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, Purchaser all right, title and interest in and to all of the Shares that are being tendered hereby and any and all dividends, distributions, rights, other Shares or other securities issued, paid or distributed or issuable, payable or distributable in respect of such Shares on or after June 14, 2006, and prior to the transfer to the name of Purchaser (or a nominee or transferee of Purchaser) on the Company’s stock transfer records of the Shares tendered herewith (collectively, a “Distribution”), and irrevocably appoints the Depositary the true and lawful agent, attorney-in-fact and proxy of the undersigned with respect to such Shares (and any Distribution), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) deliver such Share Certificates (and any Distribution) or transfer ownership of such Shares (and any Distribution) on the account books maintained by the Book-Entry Transfer Facility, together, in either case, with appropriate evidences of transfer, to the Depositary for the account of Purchaser, (b) present such Shares (and any Distribution) for transfer on the books of the Company, and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any Distribution), all in accordance with the terms and subject to the conditions of the Offer.

      The undersigned irrevocably appoints designees of Purchaser as such undersigned’s agents, attorneys-in-fact and proxies, with full power of substitution, to the full extent of the undersigned’s rights with respect to the Shares (and any Distribution) tendered by the undersigned and accepted for payment by Purchaser. All such powers of attorney and proxies shall be considered irrevocable and coupled with an interest. Such appointment will be effective when, and only to the extent that, Purchaser accepts such Shares for payment. Upon such acceptance for payment, all prior powers of attorney, proxies and consents given by the undersigned with respect to such Shares (and any Distribution) will be revoked without further action, and no subsequent powers of attorney and proxies may be given nor any subsequent written consents executed (and, if given or executed, will not be deemed effective). The designees of Purchaser will, with respect to the Shares (and any Distribution) for which such appointment is effective, be empowered to exercise all voting and other rights of the undersigned as they in their sole discretion may deem proper at any annual or special meeting of shareholders or any adjournment or postponement thereof, by written consent in lieu of any such meeting or otherwise. Purchaser reserves the right to require that, in order for the Shares to be deemed validly tendered, immediately upon Purchaser’s acceptance of such Shares, Purchaser must be able to exercise full voting rights with respect to such Shares (and any Distribution), including, without limitation, voting at any meeting of shareholders.

      The undersigned hereby represents and warrants that (a) the undersigned has full power and authority to tender, sell, assign and transfer the undersigned’s Shares (and any Distribution) tendered hereby, and (b) when the Shares are accepted for payment by Purchaser, Purchaser will acquire good, marketable and unencumbered title to the Shares (and any Distribution), free and clear of all liens, restrictions, charges and encumbrances, and the same will not be subject to any adverse claim and will not have been transferred to Purchaser in violation of any contractual or other restriction on the transfer thereof. The undersigned, upon request, will execute and deliver any additional documents deemed by the Depositary or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares (and any Distribution) tendered hereby. In addition, the undersigned shall promptly remit and transfer to the Depositary for the account of Purchaser any and all Distributions in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance or appropriate assurance

3

thereof, Purchaser will be, subject to applicable law, entitled to all rights and privileges as the owner of any such Distribution and may withhold the entire purchase price or deduct from the purchase price the amount or value thereof, as determined by Purchaser, in its sole discretion.

      All authority herein conferred or agreed to be conferred shall not be affected by and shall survive the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.

      Tenders of Shares made pursuant to the Offer are irrevocable, except that Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date, and, unless theretofore accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after August 13, 2006.

      The undersigned understands that tenders of Shares pursuant to any of the procedures described in Section 3 of the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and Purchaser upon the terms and subject to the conditions set forth in the Offer, including the undersigned’s representation that the undersigned owns the Shares being tendered.

      Unless otherwise indicated herein under “Special Payment Instructions,” please issue the check for the purchase price and/or issue or return any Share Certificate(s) not tendered or not accepted for payment in the name(s) of the registered holder(s) appearing under “Description of Shares Tendered.” Similarly, unless otherwise indicated herein under “Special Delivery Instructions,” please mail the check for the purchase price and/or any Share Certificate(s) not tendered or not accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing under “Description of Shares Tendered.” In the event that both the “Special Delivery Instructions” and the “Special Payment Instructions” are completed, please issue the check for the purchase price and/or any Share Certificate(s) not tendered or accepted for payment in the name of, and deliver such check and/or such Share Certificate(s) to, the person or persons so indicated. Unless otherwise indicated herein under “Special Payment Instructions,” please credit any Shares tendered herewith by book-entry transfer that are not accepted for payment by crediting the account at the Book-Entry Transfer Facility designated above. The undersigned recognizes that Purchaser has no obligation, pursuant to the Special Payment Instructions, to transfer any Shares from the name(s) of the registered holder(s) thereof if Purchaser does not accept for payment any of the Shares so tendered.

4

SPECIAL PAYMENT INSTRUCTIONS

(See Instructions 1, 5, 6 and 7)

   To be completed ONLY if Share Certificate(s) not tendered or not accepted for payment and/or the check for the purchase price of Shares accepted for payment are to be issued in the name of someone other than the undersigned or if Shares tendered by book-entry transfer that are not accepted for payment are to be returned by credit to an account maintained at the Book-Entry Transfer Facility other than that designated above.

Issue     o Check     o  Share Certificate(s) to:

Name:

(Please Print)

Address:

(Include Zip Code)

(Tax Identification or Social Security No.)

(See Substitute Form W-9 Included Herein)

o  Credit Shares tendered by book-entry transfer that are not accepted for payment to Depositary to the account set forth below:

(Depositary Account Number)

SPECIAL DELIVERY INSTRUCTIONS

(See Instructions 1, 5, 6 and 7)

   To be completed ONLY if Share Certificate(s) not tendered or not accepted for payment and/or the check for the purchase price of Shares accepted for payment are to be issued in the name of someone other than the undersigned or to the undersigned at an address other than that shown above.

Issue     o Check     o  Share Certificate(s) to:

Name:

(Please Print)

Address:

(Include Zip Code)

(Tax Identification or Social Security No.)

(See Substitute Form W-9 Included Herein)

5

IMPORTANT

SHAREHOLDER: SIGN HERE

(Please complete accompanying substitute form W-9)

Signature(s) of Holder(s)

(See guarantee requirement below)

Date: ______________________________ , 2006

(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share Certificate(s). If signed by person(s) to whom the Shares represented hereby have been assigned or transferred as evidenced by endorsement or stock powers transmitted herewith, the signatures must be guaranteed. If signature is by an officer on behalf of a corporation or by an executor, administrator, trustee, guardian, attorney, agent or any other person acting in a fiduciary or representative capacity, please provide the following information. See Instructions 2, 3 and 5.)

Name(s):

(Please Print)

Capacity (full title):

Address:

(Zip Code)

Area Code and Telephone Number:

Tax Identification or Social Security Number:

GUARANTEE OF SIGNATURE(S)

(If required — see Instructions 1, 2 and 5)

Authorized Signature:

Name(s):

(Please Print)

Capacity (full title):

Name of Firm:

Address:

(Zip Code)

Area Code and Telephone Number:

Date: ______________________________ , 2006

6

INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

      1. Guarantee of Signatures. No signature guarantee is required on this Letter of Transmittal if: (a) this Letter of Transmittal is signed by the registered holder(s) of Shares (which term, for purposes of this document, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) tendered herewith, unless such holder(s) has completed either the box entitled “Special Payment Instructions” or the box entitled “Special Delivery Instructions,” or (b) such Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Securities Transfer Agents Medallion Program, the Nasdaq Stock Market Guarantee Program, the Stock Exchange Medallion Program or any other “eligible guarantor institution” as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934 (each of the foregoing, an “Eligible Institution”). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5 of this Letter of Transmittal.

      2. Requirements of Tender. This Letter of Transmittal is to be completed by shareholders either if Share Certificates are to be forwarded herewith or, unless an Agent’s Message is utilized, if tenders are to be made pursuant to the procedure for tender by book-entry transfer set forth in Section 3 of the Offer to Purchase. Share Certificates evidencing tendered Shares, or timely confirmation (a “Book-Entry Confirmation”) of a book-entry transfer of Shares into the Depositary’s account at the Book-Entry Transfer Facility, as well as this Letter of Transmittal (or a facsimile hereof), properly completed and duly executed, with any required signature guarantees, or an Agent’s Message in connection with a book-entry transfer, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth herein on or prior to the Expiration Date. Shareholders whose Share Certificates are not immediately available or who cannot deliver their Share Certificates and all other required documents to the Depositary on or prior to the Expiration Date or who cannot complete the procedure for delivery by book-entry transfer on a timely basis may tender their Shares by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (a) such tender must be made by or through an Eligible Institution; (b) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by Purchaser, must be received by the Depositary on or prior to the Expiration Date; and (c) the Share Certificates (or a Book-Entry Confirmation) representing all tendered Shares in proper form for transfer, in each case, together with this Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry delivery, an Agent’s Message) and any other documents required by this Letter of Transmittal, must be received by the Depositary within three Nasdaq National Market trading days after the date of execution of such Notice of Guaranteed Delivery. If Share Certificates are forwarded separately in multiple deliveries to the Depositary, a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) must accompany each such delivery.

      The method of delivery of this Letter of Transmittal, Share Certificates and all other required documents, including delivery through the Book-Entry Transfer Facility, is at the option and risk of the tendering shareholder, and the delivery will be deemed made only when actually received by the Depositary (including, in the case of book-entry transfer, by Book-Entry Confirmation). If delivery is by mail, registered mail with return receipt requested and properly insured is recommended. In all cases, sufficient time should be allowed to ensure timely delivery. No alternative, conditional or contingent tenders will be accepted and no fractional Shares will be purchased. All tendering shareholders, by execution of this Letter of Transmittal (or a facsimile hereof if by an Eligible Institution), waive any right to receive any notice of the acceptance of their Shares for payment.

      3. Inadequate Space. If the space provided herein is inadequate, the Share Certificate numbers and/or the number of Shares and any other required information should be listed on a separate signed schedule attached hereto.

      4. Partial Tenders (Not Applicable to Shareholders Who Tender by Book-Entry Transfer). If fewer than all the Shares evidenced by any Share Certificate submitted are to be tendered, fill in the number of Shares which are to be tendered in the box entitled “Number of Shares Tendered” in the “Description of Shares Tendered.” In such cases, new Share Certificates for the Shares that were evidenced by your old Share Certificates, but were not tendered by

7

you, will be sent to you, unless otherwise provided in the appropriate box on this Letter of Transmittal, as soon as practicable after the Expiration Date. All Shares represented by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated.

      5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificate(s) without alteration, enlargement or any change whatsoever.

      If any of the Shares tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any of the tendered Shares are registered in different names on several Share Certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of Share Certificates.

      If this Letter of Transmittal or any Share Certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to Purchaser of their authority so to act must be submitted.

      If this Letter of Transmittal is signed by the registered holder(s) of the Shares listed and transmitted hereby, no endorsements of Share Certificates or separate stock powers are required unless payment is to be made to, or Share Certificates for Shares not tendered or not purchased are to be issued in the name of, a person other than the registered holder(s). In such latter case, signatures on such Share Certificates or stock powers must be guaranteed by an Eligible Institution.

      If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Share Certificate(s) listed, the Share Certificate(s) must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear on the Share Certificate(s). Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution.

      6. Stock Transfer Taxes. Except as otherwise provided in this Instruction 6, Purchaser will pay any stock transfer taxes with respect to the transfer and sale of Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or if Share Certificates for Shares not tendered or accepted for payment are to be registered in the name of, any person other than the registered holder(s), or if tendered Share Certificates are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s) or such person) payable on account of the transfer to such person will be deducted from the purchase price, unless satisfactory evidence of the payment of such taxes or an exemption therefrom is submitted. Except as otherwise provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Share Certificate(s) listed in this Letter of Transmittal.

      7. Special Payment and Delivery Instructions. If a check is to be issued in the name of, and/or Share Certificates for Shares not tendered or not accepted for payment are to be issued or returned to, a person other than the signer of this Letter of Transmittal or if a check and/or such Share Certificates are to be returned to a person other than the person(s) signing this Letter of Transmittal or to an address other than that shown in this Letter of Transmittal, the appropriate boxes on this Letter of Transmittal must be completed. A Book-Entry Shareholder may request that Shares not accepted for payment be credited to such account maintained at the Book-Entry Transfer Facility as such Book-Entry Shareholder may designate under “Special Payment Instructions.” If no such instructions are given, such Shares not accepted for payment will be returned by crediting the account at the Book-Entry Transfer Facility designated above.

      8. Waiver of Conditions. Subject to the terms and conditions of the Agreement and Plan of Merger (as defined in the Offer to Purchase) and applicable law, the conditions of the Offer may be waived by AMS or Purchaser in whole or in part at any time and from time to time in their sole discretion.

      9. 28% Backup Withholding; Substitute Form W-9. Under U.S. federal income tax law, a shareholder whose tendered Shares are accepted for payment pursuant to the Offer may be subject to backup withholding at a rate of 28%. To prevent backup withholding on any payment made to a shareholder pursuant to the Offer, the shareholder is required to notify the Depositary of the shareholder’s current taxpayer identification number (“TIN”) by completing

8

the enclosed Substitute Form W-9, certifying that the TIN provided on that form is correct (or that such shareholder is awaiting a TIN), and that (i) the shareholder has not been notified by the Internal Revenue Service that the shareholder is subject to backup withholding as a result of failure to report all interest or dividends or (ii) after being so notified, the Internal Revenue Service has notified the shareholder that the shareholder is no longer subject to backup withholding. If the Depositary is not provided with the correct TIN, such shareholder may be subject to a $50 penalty imposed by the Internal Revenue Service and payments that are made to such shareholder with respect to Shares pursuant to the Offer may be subject to backup withholding (see below).

      Each shareholder is required to give the Depositary the TIN (e.g., Social Security number or employer identification number) of the record holder of the Shares. If the Shares are registered in more than one name or are not registered in the name of the actual owner, consult the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9” for additional guidance on which number to report. A shareholder who does not have a TIN may check the box in Part 3 of the Substitute Form W-9 if such shareholder has applied for a number or intends to apply for a TIN in the near future. If the box in Part 3 is checked, the shareholder must also complete the “Certificate of Awaiting Taxpayer Identification Number” below in order to avoid backup withholding. If the box is checked, payments made will be subject to backup withholding unless the shareholder has furnished the Depositary with his or her TIN by the time payment is made. A shareholder who checks the box in Part 3 in lieu of furnishing such shareholder’s TIN should furnish the Depositary with such shareholder’s TIN as soon as it is received.

      Certain shareholders (including, among others, corporations and certain foreign individuals) are exempt from the backup withholding requirements for certain payments. To avoid possible erroneous backup withholding, a shareholder who is exempt from backup withholding should complete the Substitute Form W-9 by providing his or her correct TIN, signing and dating the form, and writing “exempt” on the face of the form. A shareholder who is a foreign individual or a foreign entity should also submit to the Depositary a properly completed Form W-8BEN, Certificate of Foreign Status or appropriate substitute form (which the Depositary will provide upon request), signed under penalty of perjury, attesting to the shareholder’s exempt status. Shareholders are urged to consult their own tax advisors to determine whether they are exempt from these backup withholding and reporting requirements. A summary of the types of exempt shareholders is included in the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.”

      If backup withholding applies, the Depositary is required to withhold 28% of any payments to be made to the shareholder. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained by filing a tax return with the Internal Revenue Service. The Depositary cannot refund amounts withheld by reason of backup withholding.

      10. Requests for Assistance or Additional Copies. Questions or requests for assistance may be directed to the Dealer Manager or the Information Agent at their respective addresses and telephone numbers set forth on the back cover page of the Offer to Purchase. Additional copies of the Offer to Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery also may be obtained from the Information Agent or from brokers, dealers, commercial banks or trust companies.

      11. Lost, Destroyed or Stolen Certificates. If any Share Certificate has been lost, destroyed or stolen, the shareholder should promptly notify the Depositary, American Stock Transfer & Trust Company at 1-800-937-5449. The shareholder then will be instructed as to the steps that must be taken in order to replace the Share Certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed Share Certificates have been followed.

      Important: This Letter of Transmittal (or a facsimile hereof), together with Share Certificates or confirmation of book-entry transfer or the Notice of Guaranteed Delivery, and all other required documents, must be received by the Depositary on or prior to the Expiration Date.

9

What Number to Give the Payer

      The holder is required to give the Payer his or her TIN (e.g., Social Security Number or Employer Identification Number). If the Shares are held in more than one name or are held not in the name of the actual owner, consult the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9” for additional guidance on which number to report.

10

PAYER’S NAME: American Stock Transfer & Trust Company
	SUBSTITUTE Form W-9 Department of the Treasury Internal Revenue   Service	Part 1 — PLEASE PROVIDE YOUR TIN IN THE BOX TO THE RIGHT AND CERTIFY BY SIGNING AND DATING BELOW.	TIN:   Social Security Number OR    Employer Identification Number
	Payer’s Request for Taxpayer Identification Number (TIN)	Part 2 — Certification — Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), (2) I am not subject to backup withholding because (a) I am exempt from backup withholding, (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and (3) I am a U.S. person (including a U.S. resident alien).
		Certificate instructions — You must cross out item (2) in Part 2 above if you have been notified by the IRS that you are subject to backup withholding because of under-reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you receive another notification from the IRS stating that you are no longer subject to backup withholding, do not cross out item (2).	Part 3 Awaiting TIN o Part 4 Exempt from backup withholding o

  Signature: 

  Name: 

  Address: 

(Please Print)

  Date: 

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED

THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

    I certify under penalty of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, all reportable payments made to me thereafter will be subject to backup withholding at the applicable withholding rate (which is currently 28%) until I provide such a number.

Signature:  Date:

Name (please print)

11

     Facsimile copies of the Letter of Transmittal, properly completed and duly signed, will be accepted. The Letter of Transmittal, Share Certificates and any other required documents should be sent by each shareholder or such shareholder’s broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of the addresses set forth below:

      The Depositary and Paying Agent for the Offer is:

By Mail or Overnight Courier:	By Hand:
American Stock Transfer & Trust Company	American Stock Transfer & Trust Company
Operations Center	Attn: Reorganization Department
Attn: Reorganization Department	59 Maiden Lane
6201 15th Avenue	New York, NY 10038
Brooklyn, NY 11219
By Facsimile Transmission:	Confirmation Receipt of Facsimile by Telephone Only:
(For Eligible Institutions Only)	718-921-8317
718-234-5001

      Questions and requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers as set forth below. Additional copies of the Offer to Purchase, this Letter of Transmittal, or other related tender offer materials may be obtained from the Information Agent or from brokers, dealers, commercial banks or trust companies.

The Information Agent for the Offer is:

17 State Street — 10^th Floor

New York, NY 10004

Banks and Brokers Call 212.440.9800

All others call Toll-Free 1.866.695.6069

The Dealer Manager for the Offer is:

800 Nicollet Mall, Mailstop J12S03

Minneapolis, Minnesota 55402

Call Toll Free (877) 371-5212

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

Page 1

      GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER. — Social security numbers have nine digits separated by two hyphens, e.g., 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen, e.g., 00-0000000. The table below will help determine the number to give the Payer.

		Give name and SOCIAL
For this type of account:		SECURITY number of —
1.	Individual	The individual
2.	Two or more individuals (joint account)	The actual owner of the account or, if combined funds, the first individual on the account(1)(5)
3.	Custodian account of a minor (Uniform Gift to Minors Act)	The minor(2)
4.	a. A revocable savings trust account (in which grantor is also trustee)	The grantor-trustee(1)
	b. Any “trust” account that is not a legal or valid trust under State law	The actual owner(1)
5.	Sole proprietorship or single owner LLC	The owner(3)

		Give name and EMPLOYER
For this type of account:		IDENTIFICATION number of —
6.	A valid trust, estate, or pension trust	The legal entity (do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title)(4)
7.	Corporate or LLC electing corporate status	The corporation
8.	Association, club, religious, charitable or educational organization, or other tax-exempt organization	The organization
9.	Partnership or multiple member LLC	The partnership
10.	A broker or registered nominee	The broker or nominee
11.	Account with the Department of Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agriculture program payments	The public entity

(1)	List first and circle the name of the person whose number you furnish.
(2)	Circle the minor’s name and furnish the minor’s social security number.
(3)	You must show your individual name, but you may also enter your business or “doing business as” name. You may use either your Employer Identification Number or your Social Security Number.
(4)	List first and circle the name of the legal trust, estate, or pension trust.
(5)	If joint foreign payees, every foreign payee must provide an applicable version of Form W-8, certifying their foreign status, or a joint payee who has not established foreign status must provide a taxpayer identification number on form W-9, which must be used for purposes of backup withholding and information reporting.

NOTE:     If no name is circled when there is more than one name, the number will be considered to be that of the first name listed.

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

Page 2

Obtaining a Number

If you don’t have a taxpayer identification number or you do not know your number, obtain Form SS-5, Application for a Social Security Number Card (for resident individuals), Form SS-4, Application for Employer Identification Number (for businesses and all other entities), or Form W-7 for International Taxpayer Identification Number (for alien individuals required to file U.S. tax returns), at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number.

To complete Substitute Form W-9 if you do not have a taxpayer identification number, write “Applied For” in the space for the taxpayer identification number in Part I, sign and date the Form, and give it to the requester. Generally, you will then have 60 days to obtain a taxpayer identification number and furnish it to the requester. If the requester does not receive your taxpayer identification number within 60 days, backup withholding, if applicable, will begin and will continue until you furnish your taxpayer identification number to the requester.

Payees Exempt from Backup Withholding

Unless otherwise noted herein, all references below to section numbers or to regulations are references to the Internal Revenue Code and the regulations promulgated thereunder.

Payees specifically exempted from backup withholding on ALL payments include the following:

1.	An organization exempt from tax under Section 501(a), or an individual retirement plan or a custodial account under Section 403(b)(7), if the account satisfies the requirements of Section 401(F)(2).
2.	The United States or any agency or instrumentality thereof.
3.	A State, the District of Columbia, a possession of the United States, or any political subdivision or instrumentality thereof.
4.	A foreign government or a political subdivision thereof, or any agency or instrumentality thereof.
5.	An international organization or any agency or instrumentality thereof.

Other Payees that may be exempt from backup withholding depending on the type of payment include the following:

6.	A corporation.
7.	A foreign central bank of issue.
8.	A dealer in securities or commodities registered in the United States, the District of Columbia or a possession of the United States.
9.	A futures commission merchant registered with the Commodity Futures Trading Commission.

10.	A real estate investment trust.
11.	An entity registered at all times during the tax year under the Investment Company Act of 1940.
12.	A common trust fund operated by a bank under Section 584(a).
13.	A financial institution.
14.	A middleman known in the investment community as a nominee or custodian.
15.	A trust exempt from tax under Section 664 or described in Section 4947.
16.	A person registered under the Investment Advisors Act of 1940 who regularly acts as a broker.

All Payees, except for No. 9 above, are exempt for interest and dividend payments. For broker transactions, all payees included in No. 1 through No. 13 are exempt, as well as No. 16.

Payments of dividends and patronage dividends not generally subject to backup withholding include the following:

•  Payments to nonresident aliens subject to withholding under Section 1441.

•  Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident alien partner.

•  Payments of patronage dividends not paid in money.

•  Payments made by certain foreign organizations.

•  Section 404(k) distributions made by an ESOP.

Payments of interest not generally subject to backup withholding include the following:

•  Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if (i) this interest is $600 or more, (ii) the interest is paid in the course of the Payer’s trade or business, and (iii) you have not provided your correct taxpayer identification number to the Payer.

•  Payments of tax-exempt interest (including exempt-interest dividends under Section 852).

•  Payments described in Section 6049(b)(5) to nonresident aliens.

•  Payments on tax-free covenant bonds under Section 1451.

•  Payments made by certain foreign organizations.

•  Mortgage or student loan interest paid to you.

Exempt payees described above should file a Substitute Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE “EXEMPT” ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER.

Certain payments other than interest, dividends, and patronage dividends that are not subject to information reporting are also not subject to backup withholding. For details, see the statute and regulations under Sections 6041, 6041A(a), 6042, 6044, 6045, 6049, 6050A and 6050N.

Privacy Act Notices — Section 6109 requires most recipients of dividends, interest, or other payments to give taxpayer identification numbers to the Payer who must report the payments to the IRS. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. The Payer must be given the numbers whether or not recipients are required to file tax returns. The Payer must generally withhold tax at the applicable withholding rate (which is currently 28%) on taxable interest, dividends, and certain other payments to a payee who does not furnish a taxpayer identification number to the Payer. Certain penalties may also apply.

Penalties

(1) Penalty for Failure to Furnish Taxpayer Identification Number — If you fail to furnish your taxpayer identification number to the Payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

(2) Civil Penalty for False Statements With Respect to Withholding — If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500.

(3) Criminal Penalty for Falsifying Information — If you willfully falsify certifications or affirmations, you are subject to criminal penalties including fines and/or imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE

EX-99.(A)(1)(C)

Exhibit (a)(1)(C)

NOTICE OF GUARANTEED DELIVERY

(Not To Be Used For Signature Guarantees)

to

Tender Shares of Common Stock

LASERSCOPE

at

$31.00 NET PER SHARE

to

KERMIT MERGER CORP.

an indirect subsidiary of

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

THE OFFER (AS DEFINED HEREIN) AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, CENTRAL TIME, ON WEDNESDAY, JULY 12, 2006 UNLESS THE OFFER IS EXTENDED.

       This Notice of Guaranteed Delivery or one substantially equivalent hereto must be used to accept the Offer (as defined below) if certificates representing shares of common stock of Laserscope, no par value (the “Shares,” and the certificates representing such Shares, the “Share Certificates”) are not immediately available or time will not permit the Share Certificates and all required documents to reach American Stock Transfer & Trust Company (the “Depositary”) on or prior to the Expiration Date (as defined in the Offer to Purchase) or if the procedures for delivery by book-entry transfer, as set forth in the Offer to Purchase, cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand or transmitted by facsimile transmission or mailed to the Depositary. See Section 3 of the Offer to Purchase.

The Depositary for the Offer is:

By Mail or Overnight Courier:

American Stock Transfer & Trust Company
Operations Center
Attn: Reorganization Department
6201 15th Avenue
Brooklyn, NY 11219 By Hand:

American Stock Transfer & Trust Company
Attn: Reorganization Department
59 Maiden Lane
New York, NY 10038

By Facsimile Transmission:
(For Eligible Institutions Only)
718-234-5001 Confirmation Receipt of Facsimile
by Telephone Only:

718-921-8317

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.

THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX IN THE LETTER OF TRANSMITTAL.

THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.

Ladies and Gentlemen:

      The undersigned hereby tenders to Kermit Merger Corp., a California corporation (“Purchaser”) and an indirect subsidiary of American Medical Systems Holdings, Inc., a Delaware corporation, in accordance with the terms and subject to the conditions set forth in Purchaser’s Offer to Purchase, dated June 14, 2006, and in the related Letter of Transmittal (which, as each may be amended or supplemented from time to time, collectively constitute the “Offer”), receipt of which is hereby acknowledged, the number of Shares indicated below pursuant to the procedures for guaranteed delivery set forth in Section 3 of the Offer to Purchase.

Certificate Nos. (If Available):

Number of Shares:

(Check if Shares will be tendered by book-entry transfer)               o

Account Number:

Dated:

Name(s) of Record Holder(s):

(Please Type or Print)

Address(es):

Zip Code:

Area Code and Tel. No(s):

Signature(s):

2

GUARANTEE

(NOT TO BE USED FOR SIGNATURE GUARANTEE)

The undersigned is a financial institution (including a commercial bank, savings and loan association and brokerage house) that is a participant in the Securities Transfer Agents Medallion Program, The Nasdaq Stock Market Guarantee Program, the Stock Exchange Medallion Program or any other “eligible guarantor institution” as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934 (“Exchange Act”), (a) represents that the above named person(s) “own(s)” the Shares tendered hereby within the meaning of Rule 14e-4 promulgated under Exchange Act, (b) represents that such tender of Shares complies with Rule 14e-4 under the Exchange Act, and (c) guarantees to deliver to the Depositary either the Share Certificates evidencing all tendered Shares, in proper form for transfer, or a Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to such Shares, in either case, together with the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees or an Agent’s Message (as defined in the Offer to Purchase) in the case of a book-entry delivery, and any other required documents, all within three Nasdaq National Market trading days after the date hereof. The eligible guarantor institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal and Share Certificates to the Depositary within the time period indicated herein. Failure to do so may result in financial loss to such eligible guarantor institution.

Name of Firm:

Authorized Signature:

Name:

(Please Print or Type)

Title:

Address:

Zip Code:

Area Code and Telephone Number:

Dated: ______________________________ , 2006

NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.

3 EX-99.(A)(1)(D) 5 c05965toexv99wxayx1yxdy.htm FORM OF LETTER TO BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES AND OTHER NOMINEES

Exhibit (a)(1)(D)

OFFER TO PURCHASE FOR CASH

ALL OUTSTANDING SHARES OF COMMON STOCK

of

LASERSCOPE

at

$31.00 NET PER SHARE

by

KERMIT MERGER CORP.

an indirect subsidiary of

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

THE OFFER (AS DEFINED HEREIN) AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, CENTRAL TIME, ON WEDNESDAY, JULY 12, 2006 UNLESS THE OFFER IS EXTENDED.

June 14, 2006

To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:

      We have been engaged to act as Dealer Manager in connection with the third party tender offer by Kermit Merger Corp., a California corporation (“Purchaser”) and an indirect subsidiary of American Medical Systems Holdings, Inc., a Delaware corporation (“AMS”), to purchase all of the outstanding shares of common stock of Laserscope, no par value (the “Shares”), at a price of $31.00 per Share, net to the seller in cash, less any required withholding of taxes and without payment of any interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 14, 2006, and in the related Letter of Transmittal for the Shares (which, as each may be amended or supplemented from time to time, collectively constitute the “Offer”).

      The Offer is conditioned upon, among other things, (i) there being validly tendered and not properly withdrawn at least 90% of the “fully diluted shares” (as defined in the Offer to Purchase) as of the date Shares are accepted for payment pursuant to the Offer and (ii) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or similar statutes or regulations of foreign jurisdictions. The Offer also is subject to certain other conditions as set forth in Section 15 of the Offer to Purchase entitled “The Tender Offer — Certain Conditions of the Offer.”

      Please forward the enclosed materials to your clients for whom you hold Shares registered in your name or in the name of your nominee or who hold Shares registered in their own names. For your information we enclose the following documents:

      1. Offer to Purchase, dated June 14, 2006.

      2. Letter of Transmittal to tender Shares (including Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9) for your use and for the information of your clients who hold Shares. Manually signed facsimile copies of the Letter of Transmittal may be used to tender Shares.

      3. A letter to clients, which may be sent to your clients for whose account you hold Shares, registered in your name or in the name of your nominee, with space provided for obtaining such clients’ instructions with regard to the Offer.

      4. Notice of Guaranteed Delivery to be used to accept the Offer if Share Certificates (as defined in the Offer to Purchase) are not immediately available or time will not permit the Share Certificates and all required documents to reach the Depositary on or prior to the Expiration Date (as defined in the Offer to Purchase) or if the procedures for delivery by book-entry transfer, as set forth in the Offer to Purchase, cannot be completed on a timely basis.

      5. Letter to shareholders of Laserscope from the President and Chief Executive Officer of Laserscope, accompanied by Laserscope’s Solicitation/Recommendation Statement on Schedule 14D-9.

      6. Return envelope addressed to American Stock Transfer & Trust Company, as Depositary.

      In accordance with the terms and subject to the satisfaction or waiver (where applicable) of the conditions to the Offer, Purchaser will accept for payment, purchase and pay for, all Shares validly tendered and not properly withdrawn pursuant to the Offer at the earliest time following expiration of the Offer when all such conditions shall have been satisfied or waived (where applicable). For purposes of the Offer, Purchaser will be deemed to have accepted for payment (and thereby purchased), Shares validly tendered and not properly withdrawn if, as and when Purchaser gives oral followed by written notice to the Depositary of Purchaser’s acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (1) the Share Certificates, or Book-Entry Confirmation (as defined in the Offer to Purchase) of a book-entry transfer of such Shares into the Depositary’s account at the Book-Entry Transfer Facility (as defined in the Offer to Purchase) pursuant to the procedures set forth in Section 3 of the Offer to Purchase; (2) the Letter of Transmittal to tender Shares (or a facsimile thereof) properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer, an Agent’s Message (as defined in the Offer to Purchase) in lieu of the Letter of Transmittal; and (3) any other documents required under the Letter of Transmittal. Accordingly, tendering shareholders may be paid at different times depending upon when Share certificates or Book-Entry Confirmations with respect to Shares are actually received by the Depositary. Under no circumstances will interest be paid on the purchase price of the Shares to be paid by the Purchaser, regardless of any extension of the Offer or any delay in making payment.

      Neither Purchaser nor AMS will pay any commissions or fees to any broker, dealer or other person (other than the Depositary, the Dealer Manager and limited advertising expenses to the Information Agent, as described in the Offer to Purchase) in connection with the solicitation of tenders of Shares pursuant to the Offer. Purchaser will, however, upon request, reimburse you for customary clerical and mailing expenses incurred by you in forwarding any of the enclosed materials to your clients.

      Purchaser will pay any stock transfer taxes with respect to the transfer and sale of Shares to it or to its order pursuant to the Offer, except as otherwise provided in Instruction 6 of the enclosed Letter of Transmittal.

      Your prompt action is requested. We urge you to contact your clients promptly. Please note that the Offer and any withdrawal rights expire at 12:00 Midnight, Central Time, on Wednesday, July 12, 2006, unless the Offer is extended.

      In order for a shareholder of Laserscope to take advantage of the Offer, the Letter of Transmittal to tender Shares (or a facsimile thereof), properly completed and duly executed, together with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message in lieu of the Letter of Transmittal) and any other documents required by such Letter of Transmittal should be sent to the Depositary and Share Certificates should be delivered, or Shares should be tendered pursuant to the procedure for book-entry transfer, all in accordance with the instructions set forth in the Letter of Transmittal and the Offer to Purchase.

      Holders of Shares whose Share Certificates are not immediately available or who cannot deliver their Share Certificates and all other required documents to the Depositary on or prior to the Expiration Date of the Offer, or who cannot complete the procedure for delivery by book-entry transfer on a timely basis, must tender their Shares according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase.

2

      Inquiries you may have with respect to the Offer may be addressed to the Information Agent or us, as Dealer Manager, at the addresses and telephone numbers set forth on the back cover page of the Offer to Purchase. Requests for copies of the Offer to Purchase, the Letter of Transmittal and all other tender offer materials may be directed to the Information Agent.

Very truly yours,

Piper Jaffray & Co.

Enclosures

      Nothing contained herein or in the enclosed documents shall render you or any other person as an agent of AMS, Purchaser, Laserscope, the Depositary, the Information Agent, the Dealer Manager or any affiliate of any of them, or authorize you or any other person to make any statement or use any document on behalf of any of them in connection with the Offer other than the enclosed documents and the statements contained therein.

3 EX-99.(A)(1)(E) 6 c05965toexv99wxayx1yxey.htm FORM OF LETTER TO CLIENTS

Exhibit (a)(1)(E)

OFFER TO PURCHASE FOR CASH

All Outstanding Shares of Common Stock

of

Laserscope

at

$31.00 Net Per Share

by

Kermit Merger Corp.

An indirect subsidiary of

American Medical Systems Holdings, Inc.

THE OFFER (AS DEFINED HEREIN) AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, CENTRAL TIME, ON WEDNESDAY, JULY 12, 2006 UNLESS THE OFFER IS EXTENDED.

June 14, 2006

To Our Clients:

      Enclosed for your consideration is an Offer to Purchase, dated June 14, 2006, and the related Letter of Transmittal (which, as each may be amended or supplemented from time to time, collectively constitute the “Offer”) relating to the third party tender offer by Kermit Merger Corp., a California corporation (“Purchaser”) and an indirect subsidiary of American Medical Systems Holdings, Inc., a Delaware corporation (“AMS”), to purchase all of the outstanding shares of common stock of Laserscope, no par value (the “Shares”), at a price of $31.00 per Share (the “Offer Price”), net to the seller in cash, less any required withholding of taxes and without the payment of any interest, upon the terms and subject to the conditions set forth in the Offer.

      We are the holder of record of Shares held by us for your account. The Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender Shares held by us for your account. A tender of such Shares can be made only by us as the holder of record and pursuant to your instructions.

      Accordingly, we request instructions as to whether you wish to have us tender on your behalf any or all of the Shares held by us for your account, in accordance with the terms and subject to the conditions set forth in the Offer.

      Your attention is directed to the following:

      1. The Offer Price is $31.00 per Share, net to the seller in cash, without interest and less any required withholding of taxes, upon the terms and subject to the conditions set forth in the Offer.

      2. The Offer is being made for all outstanding Shares (other than Shares owned by AMS and Purchaser).

      3. The Offer is being made pursuant to the terms of an Agreement and Plan of Merger, dated as of June 3, 2006, among AMS, Purchaser and Laserscope (the “Merger Agreement”). The Merger Agreement provides, among other things, for the making of the Offer by Purchaser. The Merger Agreement further provides that Purchaser will be merged with and into Laserscope (the “Merger”) following the completion of the Offer and promptly after satisfaction or waiver of certain conditions. Laserscope will continue as the surviving corporation after the Merger and will be an indirect subsidiary of AMS.

      4. The Board of Directors of Laserscope at a meeting held on June 3, 2006, by the unanimous vote of all directors (i) determined the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger (both as defined herein), to be advisable and in the best interests of Laserscope and its shareholders, (ii) approved and adopted the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger, (iii) determined that it was in the best interests of Laserscope and its shareholders to enter into the Merger Agreement and consummate the Offer and the Merger on the terms and conditions set forth in the Merger Agreement, and (iv) recommended that Laserscope shareholders accept the Offer and, to the extent shareholder action is required by applicable law, approve and adopt the Merger Agreement and the transactions contemplated thereby.

      5. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, CENTRAL TIME, ON WEDNESDAY, JULY 12, 2006 UNLESS THE OFFER IS EXTENDED.

      6. Tendering shareholders will not be obligated to pay any commissions or fees to any broker, dealer or other person or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes with respect to the transfer and sale of Shares to Purchaser or to its order pursuant to the Offer.

      7. The Offer is conditioned upon, among other things, (i) there being validly tendered and not properly withdrawn at least 90% of the “fully diluted shares” (as defined in the Offer to Purchase) (the “Minimum Condition”) as of the date the Shares are accepted for payment pursuant to the Offer, and (ii) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and similar statutes or regulations of foreign jurisdictions. In certain circumstances described in the Offer to Purchase, the Minimum Condition may be reduced to a percentage of the fully diluted shares that is lower than 90%. The Offer also is subject to certain other terms and conditions.

      If you wish to have us tender any or all of the Shares held by us for your account, please instruct us by completing, executing and returning to us the instruction form contained in this letter. If you authorize a tender of your Shares, all such Shares will be tendered unless otherwise specified in such instruction form. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF ON OR PRIOR TO THE EXPIRATION OF THE OFFER.

      Payment for Shares accepted for payment in the Offer will in all cases be made only after timely receipt by American Stock Transfer & Trust Company (the “Depositary”) of (a) Share certificates (or a timely Book-Entry Confirmation (as defined in the Offer to Purchase)), (b) a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof), with any acquired signature guarantees (or, in the case of a book-entry transfer effected pursuant to the procedures set forth in Section 3 of the Offer to Purchase, an Agent’s Message (as defined in the Offer to Purchase) in lieu of a Letter of Transmittal), and (c) any other documents required by the Letter of Transmittal. Accordingly, tendering shareholders may be paid at different times depending upon when Share certificates or Book-Entry Confirmations with respect to Shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING PAYMENT.

      The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction or any administrative or judicial action pursuant thereto. However, Purchaser may, in its sole discretion, take such action as it deems necessary to make the Offer in any jurisdiction and extend the Offer to holders of such Shares in such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser by Piper Jaffray & Co., which is acting as the Dealer Manager for the Offer, or by one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.

2

INSTRUCTIONS WITH RESPECT TO

THE OFFER TO PURCHASE FOR CASH

ALL OUTSTANDING SHARES OF COMMON STOCK

of

LASERSCOPE

at

$31.00 NET PER SHARE

by

KERMIT MERGER CORP.

an indirect subsidiary of

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

        The undersigned acknowledge(s) receipt of your letter enclosing the Offer to Purchase, dated June 14, 2006, and the related Letter of Transmittal, in connection with the offer by Kermit Merger Corp., a California corporation (“Purchaser”) and an indirect subsidiary of American Medical Systems Holdings, Inc., a Delaware corporation, to purchase all of the outstanding shares of common stock of Laserscope, no par value (the “Shares”), at a price of $31.00 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase and related Letter of Transmittal.

      This will instruct you to tender to Purchaser the number of Shares indicated below (or, if no number is indicated below, all Shares) which are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal furnished to the undersigned.

Number of Shares
to be Tendered:	Shares:*	SIGN BELOW
		Signature(s)
		Please print name(s)
		Address
		Account Number
		Area Code & Telephone Number
		Taxpayer Identification Number(s) or Social Security Number(s)
		Date:         , 2006
* Unless otherwise indicated, it will be assumed that all of your Shares held by us for your account are to be tendered.

EX-99.(A)(1)(D)

exv99wxayx1yxdy

EX-99.(A)(1)(E)

exv99wxayx1yxey

EX-99.(A)(1)(F)

Exhibit (a)(1)(F)

This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined below) is made only by the Offer to Purchase (as defined below), dated June 14 , 2006, and the related Letter of Transmittal (as defined below), and any amendments or supplements thereto, and is being made to all holders of Shares. The Offer, however, is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares residing in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. However, Purchaser (as defined below) may, in its discretion, take such action as it may deem necessary to make the Offer in any jurisdiction and extend the Offer to holders of Shares in such jurisdiction. In those jurisdictions where securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser by Piper Jaffray & Co. (the “Dealer Manager”), or by one or more registered brokers or dealers licensed under the laws of such jurisdictions.

NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
of
LASERSCOPE
at
$31.00 Net Per Share
by
KERMIT MERGER CORP.
an indirect subsidiary of
AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

     Kermit Merger Corp., a California corporation (“Purchaser”) and an indirect subsidiary of American Medical Systems Holdings, Inc., a Delaware corporation (“AMS”), is offering to purchase all of the outstanding shares of common stock of Laserscope, no par value (the “Shares”), at a price of $31.00 per Share, net to the seller in cash (the “Offer Price”), less any required withholding of taxes and without payment of any interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 14, 2006 (the “Offer to Purchase”), and in the related Letter of Transmittal (the “Letter of Transmittal,” which, together with the Offer to Purchase, as each may be amended or supplemented from time to time, collectively constitute the “Offer”). Tendering shareholders who have Shares registered in their name and who tender directly to American Stock Transfer & Trust Company (the “Depositary”) will not be charged brokerage fees or commissions or, subject to Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer. Shareholders who hold their Shares through a broker or bank should consult such institution as to whether it charges any service fees. AMS or Purchaser will pay all charges and expenses of the Depositary and the Dealer Manager incurred in connection with the Offer, as well as charges and expenses of Georgeson Shareholder Communications, Inc., which is acting as information agent (the “Information Agent”), incurred in connection with this summary advertisement. Laserscope will pay all other charges and expenses of the Information Agent incurred in connection with the Offer. Following the successful completion of the Offer, AMS intends to effect the Merger (as defined below) of Purchaser and Laserscope, unless it is not lawful to do so.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, CENTRAL TIME, ON JULY 12, 2006, UNLESS THE OFFER IS EXTENDED.

     The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of June 3, 2006 (the “Merger Agreement”), by and among AMS, Purchaser and Laserscope. The purpose of the Offer is to acquire control of, and the entire common equity interest in, Laserscope. Pursuant to the Merger Agreement, after completion of the Offer and the satisfaction or waiver of certain conditions, Purchaser will be merged with and into Laserscope and Laserscope will be the surviving corporation (the “Merger”) and an indirect, wholly-owned subsidiary of AMS. At the effective time of the Merger (the “Effective Time”), each outstanding Share (other than Shares held by Laserscope, AMS or Purchaser and Shares held by shareholders who have properly exercised dissenters’ appraisal rights under the California General Corporation Law) will by virtue of the Merger, and without any action by the holder thereof, be cancelled and converted into the right to receive $31.00 per Share in cash, or any higher price paid in the Offer, without interest and less any required tax withholdings. If, however, after consummation of the Offer, the Purchaser owns less than 90% of the then outstanding Shares, Laserscope’s shareholders must vote to approve the Merger pursuant to California General Corporation Law Section 1101, and a significantly longer time period will be required to effect the Merger. The Merger Agreement is more fully described in Section 11 of the Offer to Purchase.

     Concurrently with the execution and delivery of the Merger Agreement, AMS entered into Shareholder Agreements with each of Laserscope’s directors and certain of its executive officers (the “Supporting Shareholders”). Pursuant to the Shareholder Agreements, the Supporting Shareholders have agreed, among other things, to tender into the Offer, and not withdraw, all outstanding Shares they hold of record or beneficially own (other than any Shares for which beneficial ownership is disclaimed by these shareholders), to vote all such Shares in favor of the approval of the Merger Agreement and the Merger, to the extent shareholder action is required by applicable law, and to refrain from transferring any such Shares prior to the consummation of the Merger except in limited circumstances. The Shareholder Agreements also irrevocably appoint AMS as the Supporting Shareholders’ proxy to vote all their Shares in the manner specified in the Shareholder Agreements. The Shares represented by the Shareholder Agreements constitute approximately 3.6% of the Shares and options to acquire Shares outstanding as of June 1, 2006.

     The Board of Directors of Laserscope has unanimously (1) determined the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger, to be advisable and in the best interests of Laserscope and its shareholders, (2) approved and adopted the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger, (3) determined that it was in the best interests of Laserscope and its shareholders to enter into the Merger Agreement and consummate the Offer and the Merger on the terms and conditions set forth in the Merger Agreement, and (4) recommended that Laserscope shareholders accept the Offer and, to the extent shareholder action is required by applicable law, approve and adopt the Merger Agreement and the transactions contemplated thereby.

     The Offer is conditioned upon there being validly tendered and not withdrawn prior to the Offer’s Expiration Date (defined below), a number of shares which, together with the Shares then owned by AMS and Purchaser, constitute at least ninety percent (90%) of the total number of “fully diluted shares,” as defined in the Merger Agreement (the “Minimum Condition”). The Offer is also conditioned upon the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and similar statutes or regulations of foreign jurisdictions, and other terms and conditions set forth in Section 15 of the Offer to Purchase. If the Minimum Condition is not satisfied by the Expiration Date, Purchaser may, and in certain events will be required to, extend the Offer as described in the Offer to Purchase. If any condition to the Offer other than the Minimum Condition (after giving effect to any reduction thereto required by the Merger Agreement) is not satisfied by the Expiration Date, Purchaser is required to extend the Offer until the earlier of the removal or waiver of such condition or the termination of the Merger Agreement. If the Offer is extended, Purchaser will,

2

subject to the terms of the Offer (including withdrawal rights as set forth below), retain all tendered Shares until the expiration of the Offer as so extended. If the Offer expires prior to its consummation, Purchaser will return all tendered Shares to tendering shareholders.

     The term “Expiration Date” means 12:00 midnight, Central Time, on July 12, 2006, unless and until AMS or Purchaser, in their sole discretion (but subject to the terms of the Merger Agreement), shall have extended the period of time during which the Offer is open, in which event the term “Expiration Date” shall mean the latest time and date on which the Offer, as so extended by AMS or Purchaser, shall expire. Subject to the applicable rules and regulations of the Securities and Exchange Commission, applicable law and the terms of the Merger Agreement, AMS and Purchaser expressly reserve the right, in their sole discretion, at any time, from time to time, to extend the period of time during which the Offer is open by giving written or oral notice of such extension to the Depositary. Any such extension will be followed as promptly as possible by a public announcement, not later than 9:00 a.m., Central Time, on the next business day after the day on which the Offer is scheduled to expire. During any such extension, all Shares previously tendered and not properly withdrawn will remain subject to the Offer, subject to the right of a tendering shareholder to withdraw its Shares.

     For purposes of the Offer, Purchaser will be deemed to have accepted for payment (and thereby purchased) Shares validly tendered and not properly withdrawn as, if and when Purchaser gives oral followed by written notice to the Depositary of its acceptance for payment of such Shares pursuant to the Offer.

     In all cases, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for all tendering shareholders for the purpose of receiving payments from Purchaser and transmitting such payments to tendering shareholders whose Shares have been accepted for payment. Payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (1) certificates representing the Shares or a Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to such Shares, (2) a Letter of Transmittal to tender Shares (or a manually signed facsimile thereof), properly completed and duly executed, with any required signature guarantees or, in the case of a book-entry transfer, an Agent’s Message (as defined in the Offer to Purchase) in lieu of such Letter of Transmittal, and (3) any other documents required by the Letter of Transmittal. Under no circumstances will any interest be paid on the Offer Price for tendered Shares, regardless of any extension of the Offer or any delay in making such payment.

     In order to facilitate the satisfaction of the Minimum Condition, as part of the Merger Agreement, Laserscope granted Purchaser an irrevocable option to purchase the number of newly-issued Shares that, when added to the number of Shares owned by Purchaser following completion of the Offer, results in Purchaser owning 90% of the fully diluted shares (the “Top-Up Option”). However, the number of Shares subject to the Top-Up Option is limited to the number of Shares authorized and available for issuance and, in any event, cannot exceed 19.9% of the total number of Shares outstanding immediately prior to the issuance (collectively, the “Top-Up Limitations”).

     If, at the initial expiration of the Offer or any permitted or required extension thereof, the Minimum Condition is not satisfied but at least 49.9% of the fully diluted shares have been validly tendered and not properly withdrawn, then Laserscope has the right to require Purchaser to exercise the Top-Up Option, but only to the extent that doing so, after giving effect to the Top-Up Limitations, would result in Purchaser owning 90% of the fully diluted shares. In such event, Purchaser would be obligated to reduce the Minimum Condition to the percentage of the fully diluted shares then tendered and consummate the Offer, subject only to removal or waiver of any other outstanding conditions to the Offer.

3

     However, if at the expiration of the Offer, the number of Shares validly tendered and not properly withdrawn is greater than 49.9% of the fully diluted shares but less than the percentage of the fully diluted shares necessary to require the exercise of the Top-Up Option, then Laserscope has the right to require Purchaser to waive the Minimum Condition and amend the Offer to reduce the number of Shares that Purchaser is required to purchase in the Offer to 49.9% of the fully diluted shares (the “Revised Minimum Condition”).

     In the event the Revised Minimum Condition becomes applicable to the Offer, Purchaser would be obligated to consummate the Offer as to the number of Shares constituting 49.9% of the fully diluted shares, subject only to removal or waiver of any other outstanding conditions to the Offer. In such event, if more than 49.9% of the fully diluted shares have been validly tendered and not withdrawn as of the expiration of the Offer, the number of Shares purchased from each tendering shareholder will be reduced by the same proportion as applicable to all other tendering shareholders.

     Except as otherwise provided in Section 4 of the Offer to Purchase, tenders of Shares made pursuant to the Offer are irrevocable, Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless theretofore accepted for payment pursuant to the Offer, also may be withdrawn at any time after August 13, 2006.

     For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the names in which the certificate(s) evidencing the Shares to be withdrawn are registered, if different from the name of the person who tendered such Shares. The signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in the Offer to Purchase), unless such Shares have been tendered for the account of any Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer as set forth in Section 3 of the Offer to Purchase, any notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility (as defined in the Offer to Purchase) to be credited with the withdrawn Shares and must otherwise comply with such Book-Entry Transfer Facility’s procedures. If certificates for Shares to be withdrawn have been delivered or otherwise identified to the Depositary, the name of the registered holder and the serial numbers of the particular certificates evidencing the Shares to be withdrawn must also be furnished to the Depositary as aforesaid prior to the physical release of such certificates. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by Purchaser or its designee, in its sole discretion, which determination shall be final and binding. None of Purchaser, AMS, the Dealer Manager, the Depositary, the Information Agent, Laserscope or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give such notification. Withdrawals of tenders of Shares may not be rescinded, and any Shares properly withdrawn will be considered not validly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered by following one of the procedures described in Section 3 of the Offer to Purchase at any time prior to the Expiration Date.

     The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference.

     Laserscope has provided Purchaser with its shareholder list and security position listings for the purpose of disseminating the Offer to shareholders. The Offer to Purchase, the related Letter of Transmittal and other relevant materials will be mailed to record holders of Shares and will be furnished to brokers, banks and similar persons whose names, or the names of whose nominees, appear on the

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shareholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of Shares.

     The Offer to Purchase and the Letter of Transmittal contain important information that should be read carefully before any decision is made with respect to the Offer.

     Questions and requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers set forth below. Shareholders may request additional copies of the Offer to Purchase, the related Letter of Transmittal and other tender offer materials from the Information Agent, the Dealer Manager or their broker, dealer, commercial bank or trust company. Such additional copies will be furnished at Purchaser’s expense. No fees or commissions will be paid to brokers, dealers or other persons (other than the Information Agent and the Dealer Manager) for soliciting tenders of Shares pursuant to the Offer.

The Information Agent for the Offer is:

17 State Street — 10^th Floor
New York, NY 10004

Banks and Brokers Call 212.440.9800
All others call Toll-Free 1.866.695.6069

The Dealer Manager for the Offer is:

800 Nicollet Mall, Mailstop J12S03
Minneapolis, Minnesota 55402
Call Toll Free (877) 371-5212

June 14, 2006

5

EX-99.(A)(1)(G)

Exhibit (a)(1)(G)

DATE: June 14, 2006

FOR IMMEDIATE RELEASE

AMERICAN MEDICAL SYSTEMS ANNOUNCES COMMENCEMENT OF CASH TENDER OFFER TO ACQUIRE LASERSCOPE

MINNEAPOLIS, MN, June 14, 2006 — American Medical Systems Holdings, Inc. (NASDAQ: AMMD), the global leader in providing pelvic health solutions to urologists, announced today that a newly-formed indirect subsidiary has commenced a cash tender offer as the first step of AMS’ acquisition of Laserscope (NASDAQ: LSCP).

As previously announced and unanimously approved by the Boards of Directors of both companies, the tender offer is to acquire all of the outstanding shares of Laserscope at a purchase price of $31.00 net per share, pursuant to the Agreement and Plan of Merger, dated June 3, 2006, between American Medical Systems Holdings, Inc. and Laserscope. The Laserscope Board of Directors has recommended that Laserscope shareholders tender their shares into the offer.

The tender offer will expire at 12:00 midnight, central time, on Wednesday July 12, 2006, unless extended. The acquisition transaction is expected to close during the third quarter of 2006 and will be subject to the satisfaction of customary closing conditions and clearance under the Hart-Scott-Rodino Antitrust Improvements Act. Following the purchase of shares in the tender offer, AMS’ merger subsidiary and Laserscope will merge. Owners of Laserscope shares not purchased in the tender offer, other than dissenting shares, will be entitled to receive $31.00 per share in cash in the merger. Upon the closing of the transaction, Laserscope will become an indirect wholly owned subsidiary of AMS. American Stock Transfer & Trust Company is the Depositary for the tender offer, Piper Jaffray & Co. is the Dealer Manager and Georgeson Shareholder Communications Inc. is the Information Agent.

About American Medical Systems

American Medical Systems, headquartered in Minnetonka, Minnesota is a diversified supplier of medical devices and procedures to cure erectile dysfunction, benign prostatic hyperplasia, incontinence, menorrhagia, prolapse and other pelvic disorders in men and women. These disorders can significantly diminish one’s quality of life and profoundly affect social relationships. In recent years, the number of people seeking treatment has increased markedly as a result of longer lives, higher quality-of-life expectations and greater awareness of new treatment alternatives. American Medical Systems’ products reduce or eliminate the incapacitating effects of these diseases, often through minimally invasive therapies. The Company’s products were used to provide approximately 170,000 patient cures in 56 countries during 2005. More information about AMS can be found on its website at www.AmericanMedicalSystems.com.

About Laserscope

Laserscope designs, manufactures, sells and services an advanced line of minimally invasive medical products worldwide including medical laser systems and related energy delivery devices for the office, outpatient surgical center and hospital markets. More information about Laserscope can be found on its website at www.Laserscope.com.

American Medical Systems
June 14, 2006
Page 2 of 2

Additional Information

This announcement is neither an offer to purchase nor a solicitation of an offer to sell shares of Laserscope. American Medical Systems Holdings, Inc. has filed a tender offer statement with the Securities and Exchange Commission (SEC) and Laserscope has filed a solicitation/recommendation statement with respect to the offer. Laserscope shareholders are advised to read the tender offer statement regarding the acquisition of Laserscope referenced in this news release, and the related solicitation/recommendation statement, when they receive those statements. The tender offer statement and the solicitation/recommendation statement will contain important information that should be read carefully before any decision is made with respect to the offer. These documents will be made available to all shareholders of Laserscope at no expense to them. These documents will also be available at no charge on the SEC’s web site at www.sec.gov. Shareholders may also obtain copies of these documents without charge by requesting them from Laserscope, Inc. in writing at 3070 Orchard Drive, San Jose, CA 95134 Attention: Secretary, or by phone at 408-943-0636.

Contact:	Carmen Diersen Executive Vice President and Chief Financial Officer 952-930-6495 Carmen.Diersen@AmericanMedicalSystems.com
	Marty Emerson President and Chief Executive Officer 952-930-6334 Marty.Emerson@AmericanMedicalSystems.com

EX-99.(B)(1)

Exhibit (b)(1)

June 3, 2006

American Medical Systems, Inc.
10700 Bren Road West
Minnetonka, Minnesota 55343

     RE: Commitment Letter (“Commitment Letter”) for Secured Financing

Ladies and Gentlemen:

     You have advised CIT Healthcare LLC that American Medical Systems, Inc. (“you” or “Borrower”), through a wholly-owned subsidiary (the “Merger Sub”), intends to acquire (the “Acquisition”) Laserscope, Inc. (together with its subsidiaries, the “Acquired Business”). The Acquisition will be effected pursuant to an agreement (the “Acquisition Agreement”) pursuant to which Merger Sub shall acquire all of the equity of the Acquired Business. CIT Healthcare LLC (the “Agent”) is pleased to inform you that the Agent has approved, and hereby commits to provide to Borrower, a credit facility (the “Facilities”) in the amount of $600,000,000, consisting of (i) a senior secured revolving line of credit in the amount of $50,000,000 (the “Revolver”) and (ii) a senior secured first lien term loan in the amount of $550,000,000 (the “Senior Term Loan” and together with the Revolver collectively referred to as the “Facilities”), subject to the terms and conditions set forth in the Summary of Terms and Conditions attached to this Commitment Letter as Exhibit A (the “Terms and Conditions”) and in the letter of even date herewith addressed to you providing, among other things, for certain fees relating to the Facilities (the “Fee Letter”). Borrower, together with its parent, American Medical Systems Holdings, Inc. (“Holdings”) any direct or indirect domestic subsidiaries of Borrower or Holdings (other than Borrower) (each of whom shall guarantee the obligations of Borrower under the Facilities and including for this purpose, the Acquired Business, are collectively referred to herein as the “Loan Parties” and individually as a “Loan Party.”) Other capitalized terms used herein without definition have the meanings provided therefor in the Terms and Conditions.

     The Facilities shall be evidenced by a credit agreement (the “Credit Agreement”) among Borrower, the Agent, the Lead Arranger (defined below) and the lenders that are from time to time a party thereto (the “Lenders”). The Terms and Conditions are intended as a summary of the principal terms of the Facilities; however, the other terms, conditions, covenants, representations, warranties, defaults and other provisions to be contained in the Credit

Agreement and the other loan documents shall be customary for financings of this type and mutually satisfactory to Borrower and the Agent, to be executed by Borrower and all other persons or entities providing guaranties or collateral to support the Facilities (collectively, the “Loan Documents”). The Loan Documents shall include, in addition to the provisions outlined in this Commitment Letter, provisions consistent with those set forth in this Commitment Letter, the Fee Letter and the Terms and Conditions that are customarily contained in documents relating to healthcare industry senior secured financing transactions that are similar to this transaction.

     The Agent intends, prior to the execution of the Loan Documents, to syndicate a portion of its commitments hereunder to one or more Lenders. The Agent’s commitments set forth herein are not contingent on such syndication. Upon any such additional Lender issuing its commitment to provide a portion of the Facilities, the Agent shall be released from a portion of its commitments with respect to the Facilities in an aggregate amount equal to the commitment of such Lender. It is agreed that CIT Capital Securities LLC (the “Lead Arranger”) will act as the sole and exclusive advisor, arranger and bookmanager for the Facilities, and will exclusively manage the syndication of the Facilities, and will, in such capacities, exclusively perform the duties and exercise the authority customarily associated with such roles, including, in respect of the syndication of the Facilities, selection (in consultation with Borrower) of additional Lenders, determination of when the Lead Arranger will approach potential additional Lenders, any naming rights and the final allocations of the commitments in respect of the Facilities among the Agent and the additional Lenders. It is further agreed that no additional advisors, agents, co-agents, arrangers or bookmanagers will be appointed and no Lender will receive compensation with respect to any of the Facilities outside the terms contained herein and in the Fee Letter in order to obtain its commitment to participate in such Facilities, in each case unless you and we so agree.

     From the date of this Commitment Letter until the Lead Arranger’s completion of syndication of the Facilities, you will ensure that no debt or bank financing for Borrower is announced, syndicated or placed, without the prior written consent of the Lead Arranger and the Agent, if such financing, syndication or placement would have, in the judgment of the Lead Arranger and Agent, a detrimental effect upon the transactions contemplated hereby. The Agent and the Lead Arranger acknowledge that you are negotiating a subordinated bridge loan facility that will provide additional financing for the closing of the Acquisition and intend to access the capital markets for convertible debt or equity financing to replace all or a portion of the subordinated bridge loan facility and a portion of the Senior Term Loan and agree that, so long as the terms of such debt and/or equity financings are reasonably acceptable to Agent and Lead Arranger, such facilities or financings are not restricted by the terms of this paragraph (it being understood (i) that the material terms identified in that certain Bridge Facility Commitment Letter, dated as of June 3, 2006, between Piper Jaffray & Co. and the Borrower are, subject to the Terms and Conditions, acceptable to Agent and the Lead Arranger, and (ii) that you have presented to us an initial summary of the principal terms with respect to the convertible senior subordinated notes to be offered by Piper Jaffray & Co., including without limitation, terms related to ranking, coupon, conversion price and ratio, redemption and maturity, and that such terms in their current form are, subject to the Terms and Conditions, reasonably acceptable to Agent and the Lead Arranger). The agreements in this paragraph shall survive termination of this Commitment Letter and the closing of the Facilities.

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     You agree to actively assist the Lead Arranger and the Agent in achieving a timely syndication of the Facilities in a manner satisfactory to Lead Arranger, the Agent, and the Lenders participating in the Facilities. To assist the Lead Arranger in its syndication efforts, you agree that you will, and will cause your representatives and advisors to, and will use best efforts to cause each Loan Party and its respective representatives and advisors, both before and after the closing of Acquisition, (a) to promptly prepare and provide all financial and other information as the Lead Arranger reasonably may request with respect to the Loan Parties and the transactions contemplated hereby, including but not limited to financial projections (the “Projections”) relating to the foregoing, (b) to use best efforts to ensure that the syndication efforts benefit materially from existing lending relationships of the Loan Parties, (c) to make available to prospective Lenders the senior management and advisors of the Loan Parties, (d) to host, with the Lead Arranger and the Agent, one or more meetings with prospective Lenders no later than 16 business days prior to the closing of the Facilities, (e) to assist the Lead Arranger in the preparation of one or more confidential information memoranda satisfactory to the Lead Arranger and other marketing materials to be used in connection with the syndication of the Facilities and (f) to obtain, at your expense, monitored public ratings of the Facilities from Moody’s Investors Service (“Moody’s”) and Standard & Poor’s Ratings Group (“S&P”) prior to the closing of the Facilities and to participate actively in the process of securing such ratings, including having senior management of Borrower and the Acquired Business meet with such rating agencies.

     You hereby represent and covenant that (a) all information including the confidential information memoranda (other than the Projections) that has been or will be made available to the Lead Arranger, the Agent and any of the Lenders by you in connection with the transactions contemplated hereby (the “Information”), when taken as a whole, is or will be complete and correct in all material respects, and does not or will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances under which such statements are made, not misleading, and (b) all of the Projections have been and will be prepared in good faith based upon assumptions believed by you to be reasonable. You agree to supplement the Information and the Projections from time to time and agree to advise the Lead Arranger and the Agent of all developments materially affecting Borrower, the transactions contemplated hereby or the accuracy of the Information and the Projections previously furnished to the Lead Arranger, the Agent or any of the Lenders. You acknowledge that the Lead Arranger and the Agent may share with any of their affiliates, and such affiliates may share with the Lead Arranger and the Agent, any information relating to Borrower and the transactions contemplated hereby. You understand that in arranging and syndicating the Facilities, the Lead Arranger and the Agent (i) will use and rely on the Information and the Projections without independent verification or evaluation thereof, (ii) do not assume any responsibility for the accuracy, completeness or reasonableness thereof, and (iii) will make appropriate disclaimers consistent with the foregoing.

     You hereby acknowledge that (a) the Lenders and/or the Lead Arranger will make available Information and Projections (collectively, “Borrower Materials”) to the proposed syndicate of Lenders by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the proposed Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to Borrower, the Acquired Business or their respective securities) (each, a “Public Lender”). You hereby agree that (w) you will use commercially reasonable efforts to identify, and to cause the

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other Loan Parties to identify, that portion of the Borrower Materials that may be distributed to the Public Lenders and include a reasonably detailed term sheet among such Borrower Materials and that all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” you shall be deemed to have authorized the Lenders, the Lead Arranger and the proposed Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower, the Acquired Business or their respective securities for purposes of United States federal and state securities laws, it being understood that certain of such Borrower Materials may be subject to the confidentiality requirements of this Commitment Letter and the definitive credit documentation; (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) the Lead Arranger and the Lenders shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.”

     Regardless of whether the commitments herein are terminated or expire or the Facilities close, you hereby agree to pay upon demand to Agent all reasonable out-of-pocket expenses (“Transaction Expenses”) which have been incurred to date and will continue to be incurred by Agent at any time prior to or after the date hereof in connection with the evaluation, negotiation, documentation and syndication of the Facilities (including all reasonable legal, environmental, insurance and other consultant costs and fees incurred in the preparation of this Commitment Letter, the Terms and Conditions, the Fee Letter and the evaluation and documentation of the Facilities). Regardless of whether the commitments of Agent herein are terminated or expire or the Facilities close, by signing this Commitment Letter where indicated below, you hereby agree to indemnify and hold harmless the Lead Arranger, the Agent and its affiliates, directors, officers, employees, advisors and agents (each, an “Indemnified Party”) from and against (and will reimburse each Indemnified Party for) any and all losses, claims, damages, liabilities, and expenses (including, without limitation, the reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) any matters contemplated by this Commitment Letter, the Fee Letter, any transaction related hereto or thereto, the Facilities or any use made or proposed to be made with the proceeds thereof (collectively, the “Indemnified Losses”); provided however, that you shall not be required to indemnify an Indemnified Party for any Indemnified Losses that have been determined in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnified Party. No Indemnified Party shall be liable for any damages arising from the use by others of Borrower Materials or other materials obtained through the internet, IntraLinks or similar information transmission systems in connection with the Facilities. Under no circumstances shall the Agent, the Lead Arranger or any of their affiliates be liable to any Loan Party, or any other person for any punitive, exemplary, consequential or indirect damages in connection with this Commitment Letter, the Terms and Conditions, the Fee Letter the Facilities, the documentation related thereto or any other financing, regardless of whether the commitments of Agent herein are terminated or expire or the Facilities close.

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     The provisions of the immediately preceding paragraph shall remain in full force and effect regardless of whether definitive financing documentation for the Facilities shall be executed and delivered and notwithstanding the termination or expiration of this Commitment Letter or the commitments of Agent hereunder or the initial funding of the loans under the Facilities and shall survive termination of this Commitment Letter. The provisions of the immediately preceding paragraph shall be in addition to any rights that any Indemnified Party may have at common law or otherwise.

     Except as required by law, you hereby agree not to disclose, publicly or privately, this Commitment Letter, the Fee Letter, and the Terms and Conditions nor any of their contents except to (a) those individuals who are directors, officers, employees or advisors of the Borrower, who have a need to know of them as a result of their being specifically involved in the Facilities under consideration and (b) with respect to the Commitment Letter and the Terms and Conditions only, to the Acquired Business and its directors, officers, employees and advisors; provided, however, that such disclosure shall be made only on the conditions that such matters may not, except as required by law, be further disclosed. No person, other than the parties hereto, is entitled to rely upon this Commitment Letter or any of its contents or have any beneficial or legal right, remedy, or claim hereunder. No person shall, except as required by law, use the name of, or refer to, Agent, or any of its affiliates, in any correspondence, discussions, press release, advertisement or disclosure made in connection with the Facilities without the prior written consent of Agent. If this Commitment Letter and the Fee Letter are not accepted by you as provided for below, you are to immediately return this Commitment Letter and the Terms and Conditions (and any copies hereof and thereof) to the undersigned or confirm to the undersigned that they have been destroyed. Each party acknowledges and agrees that Borrower is subject to the terms and conditions of a nondisclosure agreement with the Acquired Business; it being understood that the terms of the nondisclosure agreement do not limit the Borrower’s ability to assist the Lead Arranger with the syndication of the Facilities and the use of the Borrower Materials in connection therewith.

     You hereby agree that, on or after the closing of the Facilities, Agent or any of its affiliates may place “tombstone” advertisements (which may include any of the Loan Parties’ trade names or corporate logos and a brief description of the Facilities and the Acquisition) in publications or other media of their choice (including without limitation “e-tombstones” published or otherwise circulated in electronic form and related hyperlinks to the Loan Parties’ corporate website) at Agent’s own expense. In addition, Agent may disclose the information about the Facilities and the Acquisition to market data collectors and similar service providers to the financing community.

     This Commitment Letter and the financing arrangements described herein are delivered with the understanding that neither this Commitment Letter nor the substance of such financing arrangements shall be disclosed by any Loan Party to any other potential source of senior secured financing directly or indirectly without the prior written consent of the Lead Arranger and the Agent. The agreements in this paragraph shall survive termination of this Commitment Letter.

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     If the terms of this Commitment Letter, the Fee Letter and the Terms and Conditions are acceptable to the Borrower, the Borrower must indicate their agreement by signing and returning to the Agent the enclosed copies of this Commitment Letter and the Fee Letter prior to close of business (Eastern Daylight Time) on June 15, 2006. If not accepted by the Borrower as herein provided, the Agent’s commitment shall expire at the close of business (Eastern Daylight Time) on June 15, 2006. If accepted, the commitment with respect to the Facilities offered herein will expire at the close of business on December 31, 2006 unless the Loan Documents have been fully executed and delivered to Agent and the conditions specified therein have been satisfied. In addition to the conditions stated above, the commitments of Agent are subject to the following: (a) the negotiation and execution of a definitive Credit Agreement, the other Loan Documents and other related documentation reasonably satisfactory to Agent (in all cases on terms and conditions substantively consistent with the terms and conditions set forth in the Terms and Conditions and with such other terms and conditions as are customary for similar senior secured leveraged financing transactions); (b) there being no Material Adverse Effect (as defined on Exhibit B hereto) since March 31, 2006; and (c) the satisfaction of the terms and conditions of this Commitment Letter and the Terms and Conditions in a manner reasonably acceptable to the Lead Arranger.

     By signing and returning to us the enclosed copy of this Commitment Letter, Borrower hereby authorizes the Agent to prepare and file Uniform Commercial Code financing statements against each of the Loan Parties (other than the Acquired Business) covering their respective collateral in the appropriate filing office(s) prior to the closing of the Facilities, provided, however, that Agent shall make no such filings until such time as you have obtained the consent of the lender under your principal credit facility, which consent you agree to obtain as promptly as possible but in no event any later than 15 days prior to the closing of the Facilities. Should the closing of the Facilities not occur, the Agent agrees to prepare and forward to Borrower Uniform Commercial Code termination statements for all such filings promptly following any request for the same.

     We hereby notify you that pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Patriot Act”), each Lender may be required to obtain, verify and record information that identifies Borrower and the Acquired Business, which information includes the name, address and tax identification number and other information regarding them that will allow such Lender to identify them in accordance with the Patriot Act. This notice is given in accordance with the requirements of the Patriot Act and is effective as to the Lenders.

     By signing this Commitment Letter, (a) you and Agent acknowledge that this Commitment Letter supersedes any and all discussions and understandings, written or oral, between or among Agent and any other person as to the subject matter hereof, and (b) you agree to pay (or cause the Loan Parties to pay) the fees described in the Fee Letter (and once paid, such fees shall not be refundable under any circumstances.) No amendments, waivers, or modifications of this Commitment Letter or any of its contents shall be effective unless expressly set forth in writing and executed by Agent and Borrower. This Commitment Letter may not be assigned without the written consent of Agent.

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     The parties hereto consent and agree that the state or federal courts located in New York, New York, shall have exclusive jurisdiction to hear and determine any claims or disputes between them pertaining to this Commitment Letter, the Fee Letter, the Terms and Conditions, or the Facilities under consideration, any other financing related thereto, and any investigation, litigation, or proceeding related to or arising out of any such matters. The parties hereto expressly submit and consent in advance to such jurisdiction in any action or suit commenced in any such court, and hereby waive any objection which such party may have based upon lack of personal jurisdiction, improper venue or inconvenient forum.

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     We welcome the opportunity to work with you on this transaction and we hope to hear from you soon. Should you have any questions or comments, please feel free to contact us at anytime.

Very truly yours,
CIT HEALTHCARE LLC
By:	/s/ Margaret A. Brown
Title:	Executive Vice President

Confidential

Accepted, acknowledged and agreed
this 3rd day of June, 2006:

AMERICAN MEDICAL SYSTEMS, INC.
By:	/s/ Martin J. Emerson
Title:	President & CEO

Page 1

Confidential

Exhibit A

Summary of Terms and Conditions
American Medical Systems, Inc.
$600 million Senior Secured Credit Facilities
June 3, 2006

Borrower:	American Medical Systems, Inc.
Lead Arranger and Sole Book Runner:	CIT Capital Securities LLC
Agent:	CIT Healthcare LLC
Lenders:	The Agent and a syndicate of lenders acceptable to Lead Arranger (in consultation with the Borrower).
Facilities:	(i) $50 million senior secured revolving credit facility (“Revolver”).
	(ii) $550 million senior secured term loan (the “Term Loan”, and together with the Revolver, the “Senior Facilities”).
Expansion Feature:	The Borrower may request that the Revolver be increased by up to $50 million. Each Lender will be permitted to commit its pro rata share of the increase, although no existing Lender shall be obligated to participate.
Purpose:	The Senior Facilities will be used to (i) provide for a portion of the purchase price of Laserscope, Inc. (the “Acquisition”), (ii) provide ongoing working capital needs of the Borrower including future capital expenditures and permitted acquisitions, (collectively with the Acquisition, the “Transaction”), and (iii) pay fees and expenses related to the Senior Facilities and the Transaction.
Fees:	See Fee Letter. In addition, the Revolver will have an initial unused commitment fee of 0.50%.

Page 2

Confidential

Interest Rates: Pricing on the Revolver and Term Loan will be based on public ratings from Moody’s and S&P as follows:

If implied rating of Senior Facilities is:	Pricing will be LIBOR plus
B2 (Moody’s) and B (S&P)	275 basis points
B1 (Moody’s) and B+ (S&P)	225 basis points
B1 (Moody’s) and BB- (S&P)	200 basis points
Ba3 (Moody’s) and BB- (S&P)	175 basis points
Ba2 (Moody’s) and BB (S&P)	150 basis points

	provided that if the respective ratings assigned by S&P and Moody’s do not appear together in the table above (e.g., there is a Moody’s rating of B2 and an S&P rating of BB-), the margin over LIBOR will be based on the lower of the two ratings (in the preceding example the margin would be 275 basis points, not 200 basis points).
Maturity:	The Revolver and Term Loan will mature 6 years from the closing date.
Amortization:	The Revolver will be due and payable in full at maturity.
	The Term Loan will amortize 1% of the initial principal balance in each of the first 5 years from closing and the remaining 95% in the final year on a quarterly basis.
Guarantors:	All obligations of the Borrower under the Senior Facilities will be unconditionally guaranteed by American Medical Systems Holding, Inc. (“Holdings”) and each existing and future subsidiary of the Borrower and Holdings (other than Borrower); subject to exceptions for foreign subsidiaries to the extent such guarantees would be prohibited by applicable law or could be expected to have material adverse tax consequences (collectively together with the Borrower, the “Loan Parties”).
Security:	The Senior Facilities will be secured by substantially all assets of the Loan Parties including but not limited to: (i) a first priority pledge of all stock or other equity interests owned by any Loan Party other than Holdings, (iii) a pledge of 100% of the stock or other equity interests of each subsidiary of each Loan Party, except in the case of any foreign subsidiary, to the extent such pledge or security interest would be prohibited by applicable law or could be expected to have material adverse tax consequences and (iii)

Page 3

Confidential

	perfected first priority security interest in all tangible and intangible assets of the Loan Parties.
Mandatory
Prepayments:	The Senior Facilities will be prepaid with (i) 75% of Excess Cash Flow (defined generally as net income, plus depreciation and amortization and other non-cash charges, plus decreases or minus increases in working capital, minus capital expenditures (to the extent not financed) and scheduled amortization payments with respect to the Senior Facilities, and any other indebtedness permitted under the Loan Documents) with a step-down of 50% of Excess Cash Flow when the Total Leverage Ratio is less than 4.00 to 1.00, (ii) 100% of the net proceeds of any asset sale (subject to a limited reinvestment option and a de minimus exception), (iii) 100% of the net proceeds of any debt (including convertible securities) or preferred stock issuance, and (iv) 50% of the net proceeds of any other equity issuance. Notwithstanding the foregoing, to the extent the Borrower has any subordinated bridge facility (the “Subordinated Bridge Facility”) in its capital structure, proceeds from any debt or equity issuance will go first to prepay the Subordinated Bridge Facility and then to prepay the Senior Facilities.
Voluntary
Prepayments:	Voluntary prepayments of borrowings under the Senior Facilities and permanent reductions of unutilized portions of the Revolver will be permitted at any time without premium or penalty (but subject to applicable breakage fees) subject to minimum amounts to be agreed upon.
	All voluntary prepayments of the Term Loans shall be applied pro rata to the remaining scheduled principal amortization payments under the Term Loans.
Representations
and Warranties:	Usual for facilities and transactions of this type including, but not limited to, representations with respect to: due organization and power; due authorization and enforceability; subsidiaries; governmental approvals; no conflicts with laws, organizational documents or contractual obligations; financial condition; no material adverse change in the business, assets, operations, properties or financial condition of the Loan Parties; ownership of properties; litigation and environmental matters; compliance with laws (including but not limited to margin regulations and applicable healthcare and medical expense reimbursement laws); taxes; ERISA matters; accuracy of disclosure; subsidiaries;

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insurance; labor matters; solvency; status of obligations; intellectual property; no default; Investment Company Act compliance; Patriot Act compliance; liens; and validity, priority and perfection of security interests in the collateral, in each case, subject to usual and customary materiality qualifiers and baskets.

Conditions Precedent:

The closing of the Senior Facilities will be subject to the following terms and conditions: (i) the Lead Arranger’s approval of the amount and other material terms of the Subordinated Bridge Facility or the convertible senior subordinated notes, as applicable, (it being understood that the material terms identified in that certain Bridge Facility Commitment Letter, dated as of June 3, 2006, between Piper Jaffray & Co. and the Borrower are, subject to clause (v) below, acceptable to the Lead Arranger and that the initial summary of the principal terms with respect to the convertible senior subordinated notes to be offered by Piper Jaffray & Co., including without limitation, terms related to ranking, coupon, conversion price and ratio, redemption and maturity, in its current form is reasonably acceptable to Agent and the Lead Arranger); (ii) the Transaction will be consummated in accordance with all applicable laws and purchase agreement documentation; (iii) no Material Adverse Effect shall have occurred since March 31, 2006; (iv) delivery of reasonably satisfactory legal opinions (including opinions issued in connection with the Transaction and local and foreign counsel opinions with respect to real property and foreign security interest perfection and priority issues), financial information (including, without limitation all reports, audits or certifications as the Agent may reasonably request), corporate records, documents from public officials and officers’ certificates and other information usual and customary for senior secured leveraged financing transactions; (v) the execution and delivery of appropriate legal documentation, with terms and conditions (including intercreditor and subordination terms) usual and customary for senior secured/unsecured subordinated financing structures, which shall be satisfactory in form and substance to the Borrower and the Lead Arranger in respect of the Subordinated Bridge Facility, and which shall include, without limitation, (a) a definition of “senior debt” which shall mean the initial commitments under the Senior Facilities of $600 million, plus the expansion feature under the Senior Facilities of $50 million, plus interest, fees and expenses with respect thereto and any refinancings replacements, amendments, and substitutions of the foregoing; (b) blockage provisions, which shall include a permanent payment block upon the occurrence and continuance of any payment related default, and a 180 day payment block upon any covenant default or event of default with an additional one-

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time 45 day block for new defaults arising during the period (other than those related to payment as provided above); and (c) amendment and waiver provisions which shall require consent by the senior and subordinated debt holders for any amendment related to payment terms (including, but not limited to amounts, rates, amortization, prepayments and timing) and consent by the senior debt holders for any other amendments to the subordinated debt documents; (d) standstill periods which shall operate under the construct provided under clause (b) above (provided that during the blockage period the subordinated debt holders may accelerate the subordinated debt obligations if the senior debt holders have elected to do so); (vi) the negotiation, execution and delivery of definitive documentation evidencing the Senior Facilities, including without limitation, a credit agreement, guaranties, security agreements, debt and equity pledge agreements (including, without limitation, the pledge of intercompany notes and equity interests of the Loan Parties and their subsidiaries, which shall include at least 65% of equity interests of each foreign subsidiary, if any), fee and leasehold mortgages, landlord and warehouseman waivers and consents, deposit and security account control agreements, collateral assignment of rights under merger, acquisition and other material contracts, collateral assignment of proceeds from business interruption insurance policies, third party consents and releases and such other similar documents, agreements and certificates as the Agent shall reasonably request (collectively, the “Loan Documents”), which Loan Documents shall be in form and substance reasonably satisfactory to the Agent and its counsel; (vii) a perfected first priority lien on all of the tangible and intangible assets of the Loan Parties; (viii) the Loan Parties shall be in compliance, with all applicable foreign and U.S. federal, state and local laws and regulations, including all applicable environmental laws and regulations (except where such noncompliance would not have a Material Adverse Effect); (ix) the delivery of an executed officer’s certificate of the Loan Parties as to the financial condition of the Loan Parties, solvency, bring down of the representations and warranties in the Loan Documents, no defaults or events of default, and related matters, in each case on a pro forma basis after giving effect to the initial funding under the Senior Facilities, the Transaction and the other transactions contemplated to then occur; (x) all costs, fees and expenses (including, without limitation, legal fees and expenses) and other fees or compensation payable to the Agent, Lead Arranger and Lenders shall have been paid; (xi) the delivery of insurance documentation (including without limitation, certificates of insurance and loss payable endorsements) reasonably required by the Agent and Lenders; (xii) the receipt of all necessary third party

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	and governmental waivers and consents; and (xiii) the receipt of evidence reasonably satisfactory to the Agent that all existing indebtedness of the Loan Parties (other than indebtedness which is permitted under the terms of the Loan Documents) shall be concurrently repaid in full and all commitments to lend or make other extensions of credit thereunder shall be concurrently terminated and all liens securing such indebtedness or other obligations thereunder have been released and/or terminated (or authorizing the Agent or the Loan Parties to make the necessary filings with respect thereto).
Affirmative
Covenants:	Usual for facilities and transactions of this type including, but not limited to, covenants with respect to: delivery of audited annual consolidated financial statements and other financial information including quarterly financial statements; delivery of notices of default and litigation; delivery of information regarding collateral; delivery of other information and reports, including without limitation, monthly management reports, budgets and reports to shareholders; maintenance of corporate existence and rights and conduct of business; payment and performance of obligations; maintenance of properties in good working order; maintenance of satisfactory insurance; notice and application of proceeds of casualty or condemnation; maintenance of books and records; compliance with laws and material contractual obligations; use of proceeds; additional subsidiaries; inspection rights of Lenders; agreement to hold an annual meeting of Lenders; and further assurances, in each case, subject to usual and customary carve-outs and baskets.
Negative
Covenants:	Usual for facilities and transactions of this type including, but not limited to, covenants with respect to limitations on: indebtedness and certain preferred equity securities; liens; fundamental changes; investments, loans, advances, guarantees, acquisitions (with limits for permitted acquisitions to be agreed upon) and other capital expenditures; asset sales; sale-leaseback transactions; operating leases; restricted payments (including, without limitation, dividends and stock repurchases and redemptions); transactions with affiliates; changes in business; changes in fiscal year; restrictive agreements and amendments of subordinated debt agreements and certain other material agreements to be agreed; additional restrictive covenants with respect to material non-guarantor subsidiaries to be discussed, in each case, subject to usual and customary carve-outs and baskets.

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Financial
Covenants:

Total Leverage Ratio
Period	Ratio
Closing to December 31, 2006		7.20
January 1, 2007 to June 30, 2007		5.90
July 1, 2007 to December 31, 2007		4.85
January 1, 2008 to June 30, 2008		4.25
July 1, 2008 to December 31, 2008		3.70
January 1, 2009 to June 30, 2009		3.20
July 1, 2009 to thereafter		3.00

Senior Leverage Ratio
Period	Ratio
Closing to December 31, 2006		5.40
January 1, 2007 to June 30, 2007		4.40
July 1, 2007 to December 31, 2007		3.60
January 1, 2008 to June 30, 2008		3.15
July 1, 2008 to December 31, 2008		2.65
January 1, 2009 to June 30, 2009		2.25
July 1, 2009 to thereafter		2.00

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Interest Coverage Ratio
Period	Ratio
Closing to December 31, 2006		1.50
January 1, 2007 to June 30, 2007		1.80
July 1, 2007 to December 31, 2007		2.05
January 1, 2008 to June 30, 2008		2.30
July 1, 2008 to December 31, 2008		2.60
January 1, 2009 to June 30, 2009		2.95
July 1, 2009 to December 31, 2009		3.35
January 1 to thereafter		3.85

Fixed Charge Coverage Ratio
Period	Ratio
Closing to December 31, 2006		1.05
January 1, 2007 to June 30, 2007		1.20
July 1, 2007 to December 31, 2007		1.30
January 1, 2008 to June 30, 2008		1.40
July 1, 2008 to December 31, 2008		1.50
January 1, 2009 to June 30, 2009		1.55
July 1, 2009 to December 31, 2009		1.65
January 1, 2010 to June 30, 2010		1.75
July 1, 2010 to thereafter		1.80

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	The Lead Arranger anticipates, on the basis of historical and pro forma financial information provided to it, that the covenant levels will be set so that the Borrower will have access to the full amount of the Term Loan at closing.
Events of Default:	Usual for facilities and transactions of this type including, but not limited to, non-payment of principal or interest, violation of covenants, incorrectness of representations and warranties in any material respect, cross default and cross acceleration, bankruptcy, material judgments, ERISA, actual or asserted invalidity of security interests or Guarantees and Change in Control (to be defined) , in each case, subject to usual and customary grace periods and baskets. The spread for default interest (over the rates generally applicable from time to time) shall be 200 basis points.
Expenses:	All reasonable out-of-pocket expenses (including, without limitation, expenses incurred in connection with due diligence) of the Lead Arranger and the Agent associated with the syndication of the Senior Facilities and with the preparation, execution and delivery, administration, waiver or modification and enforcement of the credit agreement for the Senior Facilities and the other documentation contemplated hereby and thereby (including the reasonable fees, disbursements and other charges of counsel) are to be paid by the Borrower.
Indemnification:	The Borrower will indemnify the Lead Arranger, the Agent, each other Lender and their affiliates, and each such person’s officers, directors, employees, advisors and agents (each Lender and any affiliate thereof or, as the case may be, the Lead Arranger and any affiliate thereof or the Agent and any affiliate thereof, and its officers, directors, employees, advisors and agents are herein referred to as members of the same “Indemnified Person Group”), and hold them harmless from and against all costs, expenses (including reasonable fees, disbursements and other charges of counsel) and liabilities of the Lead Arranger, the Agent and the other Lenders arising out of or relating to any claim or any litigation or other proceedings (regardless of whether the Lead Arranger, the Agent or any other Lender is a party thereto) that relate to the proposed Transaction, including the financing contemplated hereby, the Acquisition or any other transactions connected therewith, provided, that no such person will be indemnified for costs, expenses or liabilities which are determined in a final non-appealable judgment of a court of competent

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	jurisdiction to have arisen from the gross negligence or willful misconduct of such person.
Assignments and Participations:	Assignments and participations in loans under the Senior Facilities will be allowed in minimum amounts to be agreed upon.
Governing Law:	The State of New York.

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Exhibit B

     As used in the Commitment Letter and Terms and Conditions, the term “Material Adverse Effect” means (a) with respect to any time on or prior to the closing date and the initial funding of the Senior Facilities, any change or effect that (i) is materially adverse to the business, operations, assets, properties, results of operations or financial condition of the Loan Parties taken as whole, or (ii) prevents a Loan Party’s ability from consummating the transactions contemplated hereby on a timely basis, and (b) with respect to any time after the closing date and the initial funding of the Senior Facilities, any change or effect that, individually or when taken together with all other such changes or effects that have occurred prior to the date of determination of the Material Adverse Effect, is or is reasonably likely to have (i) a material adverse effect on the business (including its regulatory clearances and approvals, current products or products under development), operations, assets, properties, results of operations or financial condition of the Loan Parties, or (ii) a material adverse effect on a Loan Party’s ability to consummate the transactions contemplated hereby on a timely basis; provided, however, that in the case of each of clause (a) and (b) above, in determining whether a Material Adverse Effect has occurred, there shall be excluded any effect on the Loan Parties relating to or arising in connection with (A) the negotiation (including activities relating to due diligence), execution, delivery or public announcement or the pendency of the Acquisition Agreement or the transactions contemplated thereby or any actions required to be taken in compliance therewith (exclusive, however, of the actions required to be taken by Section 7.1 thereof) or otherwise with the consent of the Borrower, including the impact thereof on the relationships of the Loan Parties (or any one or more of them) with customers, suppliers, distributors, consultants, employees or independent contractors or other third parties with whom the Loan Parties (or any one or more of them) has any relationship and including any litigation brought by any shareholder of any of the Loan Parties solely as a result of the transactions contemplated thereby, (B) any fact, circumstance or condition disclosed in the “Company Disclosure Schedule” delivered by American Medical Systems Holding, Inc. to the Lead Arranger under cover letter dated May 31, 2006 (the “Disclosure Schedule”) to the extent such change, effect or circumstance is specifically set forth in the Disclosure Schedule or is reasonably apparent from the face of the Disclosure Schedule without additional information, (C) any change in the market price or trading volume of the Target’s securities, in and of itself, (D) any failure, in and of itself (i.e., which does not otherwise trigger an actual or pro forma failure of the Borrower to reasonably be expected to meet its financial covenants in the Loan Documents), by the Borrower or the Target to meet any projections or forecasts for any period ending (or for which revenues or earnings are released) on or after the date hereof, (E) any change in federal, state, non-U.S. or local law, regulations, policies or procedures, or interpretations thereof, generally accepted accounting principles or regulatory accounting requirements applicable or potentially applicable to the industries in which the Loan Parties operate, (F) changes generally affecting the industries in which the Loan Parties operate, (G) changes in economic conditions (including changes in the prevailing interest rates) in the United States, in any region thereof, or in any non-U.S. or global economy or (H) any attack on, or by, outbreak or escalation of hostilities or acts of terrorism involving, the United States, or any declaration of war by the United States Congress or any hurricane or other natural disaster; provided, however, that the changes referred to in clauses (E) through (G) do not have a materially disproportionate effect (relative to other industry participants) on the Loan Parties, taken as a whole. For purposes of this definition, “Loan Parties” includes the Acquired Business, whether or not the Acquisition has been consummated.

EX-99.(B)(2)

Exhibit (b)(2)

Execution Copy

Piper Jaffray & Co.
800 Nicollet Mall
Minneapolis, Minnesota 55402-7020

Deephaven Capital Management LLC
130 Cheshire Parkway, Suite 102
Minnetonka, Minnesota 55305

June 3, 2006

American Medical Systems, Inc.
10700 Bren Road West
Minnetonka, Minnesota 55343
Attention: Marty Emerson

Bridge Facility Commitment Letter

Ladies and Gentlemen:

          You have advised Piper Jaffray & Co. (“Piper Jaffray”) and Deephaven Capital Management LLC (“Deephaven” and, together with Piper Jaffray and any entities that become lenders in accordance with this Commitment Letter (as defined below), the “Lenders”, “we” or “us”) that American Medical Systems, Inc. (“you” or “Borrower”), through a wholly-owned subsidiary (“Merger Sub”), intends to acquire (the “Acquisition”) the outstanding equity of Laserscope, Inc. (together with its subsidiaries, the “Acquired Business”) pursuant to an agreement and plan of merger (the “Acquisition Agreement”) pursuant to which Merger Sub shall merge with and into and be survived by the Acquired Business. All references to “dollars” or “$” in this agreement and the attachments hereto (collectively, this “Commitment Letter”) are references to United States dollars.

          We understand that the sources of funds required to fund the Acquisition consideration of up to $745.0 million in connection with the Transactions (as defined below) will include:

• borrowings by Borrower of up to $565.0 million of debt under a senior secured credit facility (the “Senior Secured Credit Facility”); and

• borrowings by Borrower of up to $180.0 million under a senior subordinated unsecured bridge note facility (the “Bridge Facility”), as described in the Bridge Facility Summary of Principal Terms and Conditions attached hereto as Annex I (the “Bridge Term Sheet”).

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We also understand that American Medical Systems Holding, Inc. (“Holdings”) is considering the issuance of convertible debt or equity securities in a registered offering or private placement (the “Offering”), which financing would be in lieu of the Bridge Facility. No other financing will be required for the uses described above. If the Offering or any debt financing, other than the Senior Secured Credit Facility, is completed prior to the Funding Closing Date (as defined in the Bridge Term Sheet), our commitments and obligations with respect to the Bridge Facility shall immediately terminate and expire. As used herein, the term “Transactions” means the Acquisition, the borrowings under the Senior Secured Credit Facility or the borrowings under the Bridge Facility and the payments of fees, commissions and expenses in connection with each of the foregoing.

     Commitments.

          You have requested that the Lenders commit to provide the Bridge Facility. Each of the Lenders is pleased to advise you of its commitment (each, a “Commitment” and, collectively, the “Commitments”), severally and not jointly, to provide the proposed amount of the Bridge Facility to Borrower upon the terms and subject to the conditions set forth or referred to in this Commitment Letter. The Commitment of each Lender individually is set forth opposite its name on Schedule 1 hereto; which such Commitments in the aggregate shall equal $180.0 million. The Commitment of each Lender hereunder is subject to the negotiation, execution and delivery of definitive documentation (the “Bridge Documentation”) with respect to the Bridge Facility satisfactory to each of the Requisite Lenders (as defined in Annex II hereto (the “Conditions Annex”) and their respective counsel reflecting the terms and conditions set forth in the Bridge Term Sheet, in the Conditions Annex and in the letter of even date herewith addressed to you providing, among other things, for certain fees relating to the Bridge Facility (the “Fee Letter”).

     Information.

          You hereby represent and covenant that all information (other than projections that have been provided to Piper Jaffray and not Deephaven) that has been or will be made available to any of the Lenders, either directly or indirectly, by you, Holdings or the Acquired Business or any of your or its respective representatives in connection with the Transactions (the “Information”), when taken as a whole, is and will be complete and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in the light of the circumstances under which such statements are made, not misleading. You agree to supplement the Information from time to time and agree to promptly advise us and each of the Requisite Lenders of all developments materially affecting you, Holdings or the Acquired Business or any of your or their respective subsidiaries or affiliates or the Transactions or the accuracy of Information previously furnished to any of the Lenders. You also agree that any information, documentation or other data disseminated to Deephaven in connection with the

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Bridge Facility, electronically, in presentations at meetings or otherwise, will not contain any non-public information concerning Borrower, Holdings or the Acquired Business, their respective subsidiaries and affiliates or their respective securities.

     Compensation.

          As consideration for the commitments of the Lenders hereunder with respect to the Bridge Facility and the agreement of Piper Jaffray to structure and arrange the Bridge Facility and to provide advisory services in connection therewith, you agree to pay, or cause to be paid, the fees set forth in the Bridge Term Sheet and the Fee Letter. Once paid, such fees shall not be refundable under any circumstances.

     Conditions.

          The commitment of each of the Lenders hereunder with respect to the Bridge Facility and Piper Jaffray’s agreement to perform the services described herein may be terminated by the Lenders acting together if (i) there shall be any pending or overtly threatened litigation or other proceedings (private or governmental) with respect to any of the Transactions that is reasonably likely to result in a Material Adverse Effect (as defined below); (ii) any change shall occur since March 31, 2006 that shall result in a Material Adverse Effect; or (iii) any condition set forth in either the Bridge Term Sheet or the Conditions Annex is not satisfied or any covenant or agreement in this Commitment Letter or the Fee Letter is not complied with in any material respect.

          As used in this Commitment Letter, the term “Material Adverse Effect” means any change or effect that (i) is materially adverse to the business, operations, assets, properties, results of operations or financial condition of Holdings, the Borrower, the Acquired Business and their respective subsidiaries, taken as a whole, or (ii) prevents Holdings, the Borrower or the Acquired Business from consummating the transactions contemplated hereby on a timely basis; provided, however, that in determining whether a Material Adverse Effect has occurred, there shall be excluded any effect on Holdings, the Borrower or the Acquired Business relating to or arising in connection with (A) the negotiation (including activities relating to due diligence), execution, delivery or public announcement or the pendency of the Acquisition Agreement or the transactions contemplated thereby or any actions required to be taken in compliance therewith (exclusive, however, of the actions required to be taken by Section 7.1 of the Acquisition Agreement) or otherwise with the consent of the other party hereto, including the impact thereof on the relationships of Holdings, the Borrower or the Acquired Business with customers, suppliers, distributors, consultants, employees or independent contractors or other third parties with whom Holdings, the Borrower or the Acquired Business has any relationship and including any litigation brought by any shareholder of Holdings, the Borrower or the Acquired Business solely as a result of the transactions contemplated thereby, (B) any fact, circumstance or

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condition disclosed in the Company Disclosure Schedule (as defined in the Acquisition Agreement) to the extent such change, effect or circumstance is specifically set forth in the Company Disclosure Schedule or is reasonably apparent from the face of the Company Disclosure Schedule without additional information, (C) any change in the market price or trading volume of Holdings’, the Borrower’s or the Acquired Business’ securities, in and of itself, (D) any failure, in and of itself, by Holdings, the Borrower or the Acquired Business to meet any projections or forecasts for any period ending (or for which revenues or earnings are released) on or after the date of the Acquisition Agreement, (E) any change in federal, state, non-U.S. or local law, regulations, policies or procedures, or interpretations thereof, generally accepted accounting principles or regulatory accounting requirements applicable or potentially applicable to the industries in which Holdings, the Borrower or the Acquired Business operates, (F) changes generally affecting the industries in which Holdings, the Borrower or the Acquired Business operates, (G) changes in economic conditions (including changes in the prevailing interest rates) in the United States, in any region thereof, or in any non-U.S. or global economy or (H) any attack on, or by, outbreak or escalation of hostilities or acts of terrorism involving, the United States, or any declaration of war by the United States Congress or any hurricane or other natural disaster; provided, however, that the changes referred to in clauses (E) through (G) do not have a materially disproportionate effect (relative to other industry participants) on Holdings, the Borrower and the Acquired Business, taken as a whole.

     Clear Market.

          From the date of this Commitment Letter until the closing date of the Acquisition, you will ensure that no financing (other than the Senior Credit Facility) for you, Holdings, the Acquired Business or any of your or their respective subsidiaries or affiliates, other than the Offering, is announced, syndicated or placed without the prior written consent of Piper Jaffray or Deephaven if such financing, syndication or placement would have, in the judgment of Piper Jaffray or Deephaven, a detrimental effect upon the Transactions.

     Indemnity and Expenses.

          By your acceptance below, you hereby agree to indemnify and hold harmless each Lender and its respective affiliates (including, without limitation, controlling persons) and the directors, officers, employees, advisors and agents of the foregoing (each, an “Indemnified Person”) from and against any and all losses, claims, costs, expenses, damages or liabilities (or actions or other proceedings commenced or threatened in respect thereof) that arise out of or in connection with this Commitment Letter, the Bridge Term Sheet, the Conditions Annex, the Fee Letter, the Bridge Facility or any of the Transactions (or the actual or proposed use of the proceeds thereof), and to reimburse each Indemnified Person promptly upon its written demand for any legal or other expenses incurred in connection with investigating, preparing to defend or defending against, or participating in, any such loss,

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claim, cost, expense, damage, liability or action or other proceeding (whether or not such Indemnified Person is a party to any action or proceeding); provided, however that any such obligation to indemnify, hold harmless and reimburse an Indemnified Person shall not be applicable to the extent determined by a final, non-appealable judgment of a court of competent jurisdiction to have resulted solely from the gross negligence or willful misconduct of such Indemnified Person. You shall not be liable for any settlement of any such proceeding effected without your written consent, but if settled with such consent or if there shall be a final judgment against an Indemnified Person, you shall, subject to the proviso in the preceding sentence, indemnify such Indemnified Person from and against any loss or liability by reason of such settlement or judgment. You shall not, without the prior written consent of any Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which such Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement (i) includes an unconditional release of such Indemnified Person from all liability or claims that are the subject matter of such proceeding and (ii) does not include a statement as to or an admission of fault, culpability, or a failure to act by or on behalf of such Indemnified Person. No Lender (or any of their respective affiliates) shall be responsible or liable to Borrower, Holdings, the Acquired Business or any of their respective subsidiaries, affiliates or stockholders or any other person or entity for any indirect, punitive or consequential damages which may be alleged as a result of this Commitment Letter, the Bridge Term Sheet, the Conditions Annex, the Fee Letter, the Bridge Facility or the transactions contemplated hereby or thereby. In addition, you hereby agree to reimburse each Lender from time to time upon demand for all reasonable out-of-pocket costs and expenses (including, without limitation, reasonable legal fees and expenses of each Lender, appraisal, consulting and audit fees, and printing, reproduction, document delivery, travel, communication and publicity costs) incurred in connection with the execution of the Bridge Facility, and the preparation, review, negotiation, execution and delivery of this Commitment Letter, the Bridge Term Sheet, the Conditions Annex, the Fee Letter, the Bridge Documentation and other related documents and the administration, amendment, modification or waiver thereof (or any proposed amendment, modification or waiver), whether or not the Funding Closing Date occurs or any Bridge Documentation is executed and delivered or any extensions of credit are made under the Bridge Facility.

     Confidentiality.

          This Commitment Letter is delivered to you upon the condition that neither the existence of this Commitment Letter, the Bridge Term Sheet, the Conditions Annex, the Fee Letter nor any of their contents shall be disclosed by you or any of your affiliates, directly or indirectly, to any other person, except that such existence and contents may be disclosed (i) as may be compelled in a judicial or administrative proceeding or as otherwise required by law (including filings with the Securities and Exchange Commission or other regulatory authorities and stock exchanges) and (ii) to your directors, officers, employees, legal counsel

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and accountants, in each case on a confidential and “need-to-know” basis and only in connection with the Transactions. In addition, this Commitment Letter, the Bridge Term Sheet and the Conditions Annex (but not the Fee Letter) may be disclosed to the Acquired Business and its directors, officers, employees, advisors and agents, in each case on a confidential and “need-to-know” basis and only in connection with the Transactions. Each party hereto acknowledges and agrees that Borrower is subject to the terms and conditions of a nondisclosure agreement with the Acquired Business.

     Other Services.

          It is agreed that Piper Jaffray will act as the sole and exclusive advisor, arranger and bookmanager for the Bridge Facility and will, in such capacities, exclusively perform the duties and exercise the authority customarily associated with such roles. It is further agreed that no additional advisors, agents, co-agents, arrangers or bookmanagers will be appointed and no Lender will receive compensation with respect to the Bridge Facility outside the terms contained herein and in the Fee Letter in order to obtain its commitment to participate in the Bridge Facility, in each case unless you and we so agree.

          You acknowledge and agree that we and/or our respective affiliates may be requested to provide additional services with respect to you, Holdings or the Acquired Business and/or your or their respective affiliates or other matters contemplated hereby. Any such services will be set out in and governed by a separate agreement(s) (containing terms relating, without limitation, to services, fees and indemnification) in form and substance satisfactory to the parties thereto. Nothing in this Commitment Letter is intended to obligate or commit us or any of our respective affiliates to provide any services other than as set out herein. You acknowledge that Piper Jaffray is acting as financial advisor to Borrower in connection with various matters, including the Transactions.

     Governing Law, Etc.

          This Commitment Letter and the commitment of each of the Lenders shall not be assignable by you without the prior written consent of the Lenders, and any purported assignment without such consent shall be void. We reserve the right to employ the services of our respective affiliates in providing services contemplated by this Commitment Letter and to allocate, in whole or in part, to our respective affiliates certain fees payable to us in such manner as we and our respective affiliates may agree in our sole discretion. You also agree that each Lender may at any time and from time to time assign all or any portion of its respective commitments hereunder to one or more of its affiliates. You further acknowledge that, to the extent necessary to provide the services contemplated hereby, we may share with any of our respective affiliates, and such affiliates may share with us, any information related to Borrower, Holdings, the Acquired Business, or any of their respective subsidiaries or affiliates (including, without limitation, information relating to creditworthiness) and the

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Transactions. We each agree to treat, and cause any such affiliate to treat, all non-public information provided to us by you as confidential information in accordance with customary banking industry practices.

          This Commitment Letter may not be amended or any provision hereof waived or modified except by an instrument in writing signed by each of the Requisite Lenders and you. This Commitment Letter may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile transmission shall be effective as delivery of a manually executed counterpart of this Commitment Letter. Headings are for convenience of reference only and shall not affect the construction of, or be taken into consideration when interpreting, this Commitment Letter. This Commitment Letter is intended to be for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, and may not be relied on by, any persons other than the parties hereto and, with respect to the indemnification provided under the heading “Indemnity and Expenses,” each Indemnified Person.

          This Commitment Letter shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflicts of law to the extent that the application of the laws of another jurisdiction will be required thereby. Any right to trial by jury with respect to any claim or action arising out of this Commitment Letter is hereby waived. You hereby submit to the exclusive jurisdiction of the federal and Minnesota State courts located in The City of Minneapolis (and appellate courts thereof) in connection with any dispute related to this Commitment Letter or any of the matters contemplated hereby, and agree that service of any process, summons, notice or document by registered mail addressed to you shall be effective service of process against you for any suit, action or proceeding relating to any such dispute. You irrevocably and unconditionally waive any objection to the laying of such venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. A final judgment in any such suit, action or proceeding brought in any such court may be enforced in any other courts to whose jurisdiction you are or may be subject by suit upon judgment.

     Patriot Act.

          We hereby notify you that pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Patriot Act”), each Lender may be required to obtain, verify and record information that identifies Borrower, Holdings and the Acquired Business, which information includes the name, address and tax identification number and other information regarding them that will allow such Lender to identify them in accordance with the Patriot Act. This notice is given in accordance with the requirements of the Patriot Act and is effective as to the Lenders.

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     General.

          Please indicate your acceptance of the terms hereof and of the Bridge Term Sheet, the Conditions Annex and the Fee Letter by returning to us executed counterparts of this Commitment Letter and the Fee Letter and paying the amounts due thereunder not later than 5:00 p.m., New York City time, on June 15, 2006 (the “Deadline”). This Commitment Letter and the commitments of the Lenders hereunder and the agreement of Piper Jaffray to provide the services described herein are also conditioned upon your acceptance hereof and of the Fee Letter, and our receipt of executed counterparts hereof and thereof on or prior to the Deadline, at which time this Commitment Letter shall expire if not accepted. Upon the earliest to occur of (A) the execution and delivery of the Bridge Documentation by all of the parties thereto, (B) 90 days after your acceptance of this Commitment Letter or, if certain events mutually agree upon by you and Piper Jaffray or Deephaven occur, December 31, 2006, in each case, if the Bridge Documentation shall not have been executed and delivered by all such parties prior to that date and (C) if earlier than (B), the date of termination of the Acquisition Agreement, this Commitment Letter and the commitments of each of the Lenders hereunder and the agreement of Piper Jaffray to provide the services described herein shall automatically terminate unless each of the Lenders shall, in their discretion, agree to an extension. The compensation, expense reimbursement, confidentiality, indemnification and governing law and forum provisions hereof and in the Bridge Term Sheet and the Fee Letter shall survive termination of (i) this Commitment Letter (or any portion hereof) and (ii) any or all of the commitments of each of the Lenders hereunder. The provisions under the headings “Clear Market” above shall survive the execution and delivery of the Bridge Documentation.

[Signature Page Follows]

          We are pleased to have been given the opportunity to assist you in connection with the financing for the Transactions.

Very truly yours, PIPER JAFFRAY & CO.
By:	/s/ David B. Holden
	Name:  David B. Holden
	Title:    Managing Director

DEEPHAVEN CAPITAL MANAGEMENT LLC
By:	/s/ Jeff Golbus
	Name:  Jeff Golbus
	Title:    Portfolio Manager

Accepted and agreed to as of
the date first written above:

AMERICAN MEDICAL SYSTEMS, INC.
By:	/s/ Martin J. Emerson
	Name:  Martin J. Emerson
	Title:    President & CEO

Signature Page to Bridge Facility Commitment Letter

ANNEX I

BRIDGE FACILITY

SUMMARY OF PRINCIPAL TERMS AND CONDITIONS¹

Borrower:	American Medical Systems, Inc. (the “Borrower”).
Guarantors:	All obligations of Borrower under the Bridge Facility and the Bridge Notes will be unconditionally guaranteed by each existing and future domestic subsidiary of Holdings (other than certain immaterial subsidiaries of Holdings to be agreed upon) including, without limitation, the Acquired Business and any parent holding companies of Borrower, including, without limitation, American Medical Systems Holdings, Inc. (“Holdings”).
Lenders:	Piper Jaffray & Co (“Piper Jaffray”), Deephaven Capital Management LLC (“Deephaven”) and each holder of any Bridge Notes or assignee of any portion of the Bridge Facility or Piper Jaffray’s or Deephaven’s Commitment with respect to the Bridge Facility are collectively referred to as (the “Lenders”).
Type and Amount of Bridge Facility:	$180.0 million senior subordinated unsecured bridge note facility (the “Bridge Facility”) in the form of notes (the “Bridge Notes”) issued by the Borrower under an indenture which complies with the Trust Indenture Act (the “Indenture”).
Purpose:	Proceeds from the issuance of the Bridge Notes will be used to finance a portion of the Acquisition and to pay fees, commissions and expenses in connection therewith.
Funding Closing Date:	The date of the funding under the Bridge Facility, but no later than 90 days after the acceptance by Borrower

¹ All capitalized terms used but not defined herein shall have the meanings provided in the Commitment Letter to which this summary is attached.

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	of the Commitment Letter, or if certain events mutually agreed upon by Borrower and Piper Jaffray or Deephaven occur, December 31, 2006.
Initial Maturity/Conversion:	If any Bridge Notes have not been previously repaid in full on or prior to the date that is 18 months following the Funding Closing Date (the “Extension Date”), subject to the conditions outlined below under “Conditions to Conversion of the Bridge Notes,” the Bridge Notes will have the terms set forth on Exhibit A.
Availability:	Upon satisfaction of conditions precedent to drawing to be specified in the Bridge Documentation, a single drawing may be made on the Funding Closing Date of up to the full amount of the Bridge Facility and not less than $100.0 million. Borrower shall provide each Lender at least 10 business days notice in advance of drawing.
Funding Fee:	Upon the funding of the Bridge Facility, Borrower will pay a 2.00% Funding Fee on the aggregate dollar amount funded by the Lenders on a pro-rata basis as set forth in Schedule 1, which shall be netted against and reduce the amount funded to the Borrower.
Interest:	Prior to the Extension Date, the Bridge Notes will accrue interest at a rate per annum equal to the greater (as determined on the Funding Closing Date and each three-month period thereafter) of (x) 10.00% plus a spread (the “Spread”) and (y) the three-month London Interbank Offered Rate (“LIBOR”) as determined by the Lenders on the date of the execution and delivery by the Borrower of the Commitment Letter (the “LIBOR Lock Rate”) for a corresponding U.S. dollar deposit amount (adjusted quarterly, provided, however, that LIBOR shall not be greater than 100 basis points above or less than 100 basis points below the LIBOR Lock Rate) plus the Spread. The Spread will initially be, with respect to clause (x), 0 basis points and with respect to clause (y), 750 basis points. If the Bridge Notes are not repaid in full within three months following the Funding Closing Date, each

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Spread will increase by 50 basis points at the end of such three-month period and shall increase by (x) an additional 50 basis points at the end of each three-month period thereafter through the end of the twelve-month period following the Funding Closing Date and (y) an additional 100 basis points at the end of each three-month period ending twelve months following the Funding Closing Date through the Extension Date.

If within 120 days after the Funding Closing Date (a) the Bridge Notes have not been rated by Moody’s Investor Services, Inc. (“Moody’s”) and Standard & Poor’s Ratings Group, a division of The McGraw Hill Corporation (“S&P”) or (b) the Borrower has not filed a registration statement for an offer to exchange the Bridge Notes for publicly registered notes with identical terms and consummated the exchange offer, each Spread will increase as follows on a cumulative basis in addition to the otherwise applicable rate until (a) the Bridge Notes receive such a rating from Moody’s and S&P and (b) such exchange offer is consummated:

Days After the Funding	Cumulative Increase
Closing Date	to Spread
121 through 150	100 basis points
151 through 240	200 basis points
241 through 330	200 basis points
Each 90 days thereafter	200 basis points

Interest on the Bridge Notes will be payable in arrears at the end of each three-month period and at the Extension Date. To the extent the interest payable on the Bridge Notes exceeds 14.00% per annum (the “Cash Cap”), Borrower may, at its option, cause such excess interest to be added to the principal amount of the Bridge Notes (the “PIK Option”) ; provided,

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	however, if Borrower exercises the PIK Option interest payable on the Bridge Notes in excess of the Cash Cap thereafter shall be added to the principal amount of the Bridge Notes. Once the PIK Option is exercised, it shall be mandatory thereafter.
	Calculation of interest shall be on the basis of actual days elapsed in a year of 360 days.
Default Interest:	Upon the occurrence and during the continuance of an event of default, interest will accrue on the Bridge Notes at a rate of 2.0% per annum plus the rate otherwise applicable to the Bridge Notes.
Mandatory Redemption:	Borrower will be required to prepay the Bridge Notes on a pro rata basis, at par plus accrued and unpaid interest, from the net proceeds from the incurrence of any debt or the issuance of any equity or any asset sales, subject to exceptions to be agreed. Any such incurrence, issuance or sale is subject to the negative covenants set forth below unless for the repayment in full of the Bridge Notes.
Mandatory Offer to Purchase:	Borrower will be required to offer to purchase the Bridge Notes upon a Change of Control (to be defined in the Indenture) at the greater of 101% of the principal amount thereof and the applicable redemption price plus accrued interest to the date of purchase.
Optional redemption:	Borrower may, at its option, redeem some or all of the Bridge Notes at any time prior to the Extension Date at 100.0% of the accreted value plus accrued and unpaid interest to the date of purchase provided, the Bridge Notes shall be redeemable in amounts of $25,000,000 or an integral multiple of $25,000,000 (or a lesser amount if such amount constitutes the entirety of the Bridge Notes outstanding) not more than once every 30 days.
Guarantees:	The Bridge Notes will be guaranteed on a senior subordinated basis by the Guarantors.

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Security:	None.
Intercreditor Agreement:	The Bridge Documentation will include the execution and delivery of appropriate legal documentation, with terms and conditions (including intercreditor and subordination terms) usual and customary for senior secured/unsecured subordinated financing structures, which shall be satisfactory in form and substance to the Borrower and Majority Lenders in respect of the Bridge Facility, and which shall include, without limitation, (a) a definition of “senior debt” which shall mean the initial commitments under the Senior Secured Credit Facility of $615 million, plus the expansion feature under the Senior Secured Credit Facility of $50 million, plus interest, fees and expenses with respect thereto and any refinancings replacements, amendments, and substitutions of the foregoing; (b) blockage provisions, which shall include a permanent payment block upon the occurrence and continuance of any payment related default, and a 180 day payment block upon any covenant default or event of default with an additional one-time 45 day block for new defaults arising during the period (other than those related to payment as provided above); and (c) amendment and waiver provisions which shall require consent under the Senior Secured Credit Facility and under the Bridge Facility for any amendment related to payment terms (including, but not limited to amounts, rates, amortization, prepayments and timing) and consent under the Senior Secured Credit Facility for any other amendments with respect to the Bridge Facility; (d) standstill periods which shall operate under the construct provided under clause (b) above (provided that during the blockage period the Bridge Facility may accelerate the obligations thereunder if the Senior Secured Credit Facility has elected to do so).
Ranking:	Subordinated to the Senior Secured Credit Facility; senior to all other obligations of Holdings, Borrower and their respective subsidiaries for borrowed money.

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Conditions to Borrowing:	Conditions precedent to borrowing under the Bridge Facility consist of those set forth in the Commitment Letter and Annex II to the Commitment Letter.
Representations and Warranties:	Representations and warranties will apply to Holdings and its subsidiaries and will include such customary representations and warranties by Holdings with respect to Holdings, Borrower, the Acquired Business and their respective subsidiaries as are usual and customary for financings of this kind, in each case, subject to usual and customary materiality qualifiers, including (without limitation):
	Accuracy and completeness of financial statements (including pro forma financial statements); absence of undisclosed liabilities; no material adverse change; corporate existence; compliance with law; corporate power and authority; enforceability of the Bridge Documentation; no conflict with law or contractual obligations; compliance with Food and Drug Administration or other regulatory requirements; no material litigation; no default; ownership of property; liens, other than permitted liens; intellectual property; no burdensome restrictions; taxes; Federal Reserve regulations; ERISA; Investment Company Act; subsidiaries; environmental matters; solvency; accuracy and completeness of disclosure and Patriot Act compliance.
Affirmative Covenants:	Affirmative covenants will apply to Holdings and its subsidiaries and will include such customary affirmative covenants with respect to Holdings, Borrower, the Acquired Business and their respective subsidiaries as are usual and customary for financings of this kind, in each case, subject to usual and customary carve-outs, including (without limitation):
	Delivery of certified quarterly and audited annual financial statements and reports to shareholders and requirements to make SEC filings; payment of other obligations; continuation of business and maintenance of existence and material rights and privileges; compliance with all applicable laws and regulations

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	(including, without limitation, environmental matters, taxation and ERISA) and material contractual obligations; maintenance of property and insurance; maintenance of books and records; right of each of the Lenders to inspect property and books and records; and further assurances.
Negative Covenants:	Negative covenants will apply to Holdings and its subsidiaries and will include such customary negative covenants with respect to Holdings, Borrower, the Acquired Business and their respective subsidiaries as are usual and customary for financings of this kind, in each case, subject to usual and customary carve-outs, including (without limitation):

	1.	Limitation on dispositions of assets and changes of business and ownership.
	2.	Limitation on mergers and acquisitions.
	3.	Limitation on dividends, stock repurchases and redemptions and other restricted payments.
	4.	Limitation on indebtedness (including guarantees and other contingent obligations) and preferred stock and prepayment, amendment and redemption thereof (with an exception for indebtedness incurred for the repayment in full of the Bridge Facility). Limitation on size of and interest on Senior Secured Facility.
	5.	Limitation on loans and investments.
	6.	Limitation on liens and further negative pledges.
	7.	Limitation on transactions with affiliates.
	8.	Limitation on sale and leaseback transactions.
	9.	Limitation on capital expenditures.
1	0.	Limitation on operating leases.

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11.	Maintenance of holding companies and/or any inactive subsidiaries as passive, non-operating enterprises.
12.	No modification or waiver of material documents (including, without limitation, charter documents of Borrower and its subsidiaries) in any manner materially adverse to any of the Lenders without the consent of the Requisite Lenders.

Events of Default:	Events of default usual and customary for financings of this kind, including (without limitation) the following (subject to usual and customary grace periods): nonpayment, breach of representations and covenants, cross-payment default and cross-acceleration, invalidity of guarantees, bankruptcy and insolvency events, ERISA events, judgments and change of ownership or control (to be defined) or failure to obtain governmental or other approval with respect to such change of ownership or control.
Conditions to Conversion of Bridge Notes:	On the Extension Date, unless (i) Holdings, Borrower or any material subsidiary thereof is subject to a bankruptcy or other insolvency proceeding, (ii) there exists a default with respect to the Bridge Notes or (iii) there exists a default in the payment when due at final maturity of any indebtedness of Borrower or any of its subsidiaries, or the maturity of such indebtedness shall have been accelerated, the terms of the Bridge Notes shall automatically be converted as set forth in Exhibit A hereto.
Right to Transfer Bridge Notes:	The holders of the Bridge Notes shall have the absolute and unconditional right to transfer the Bridge Notes in compliance with applicable law to any third parties.
Transferability and Participations:	Each Lender may assign a portion of its commitments under the Commitment Letter and the Bridge Facility without the consent of Borrower and upon such assignment, such Lender will be released from the portion of its commitment that has been assigned.

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Expenses and Indemnification:	All reasonable out-of-pocket expenses (including but not limited to reasonable legal fees and expenses and expenses incurred in connection with due diligence and travel, courier, reproduction, printing and delivery expenses) of each of the Lenders associated with the preparation, execution and delivery, administration, amendment, waiver or modification (including proposed amendments, waivers or modifications) of the documentation contemplated hereby are to be paid by Borrower. In addition, all out-of-pocket expenses (including but not limited to reasonable legal fees and expenses) of each of the Lenders for workout proceedings, enforcement costs and documentary taxes associated with the Bridge Facility are to be paid by Borrower.
	Borrower will indemnify each of the Lenders and their respective affiliates, and hold them harmless from and against all reasonable out-of-pocket costs, expenses (including but not limited to reasonable legal fees and expenses) and liabilities arising out of or relating to the transactions contemplated hereby and any actual or proposed use of the proceeds of the Bridge Notes; provided, however, that no such person will be indemnified for costs, expenses or liabilities to the extent determined by a final, non-appealable judgment of a court of competent jurisdiction to have been incurred solely by reason of the gross negligence or willful misconduct of such person.
Yield Protection, Taxes and Other Deductions:	The Bridge Documentation will contain yield protection provisions, customary for facilities of this nature, including, without limitation, protecting each of the Lenders in the event of unavailability of LIBOR, breakage losses and reserve and capital adequacy requirements.
	All payments are to be free and clear of any present or future taxes, withholdings or other deductions whatsoever (other than any tax imposed on or measured by the net income of a Lender and franchise taxes imposed on it pursuant to the laws of the

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	jurisdiction under which such Lender is organized or the jurisdiction in which the principal office or Applicable Lending Office of such Lender, as applicable, is located or any subdivision thereof or therein). Borrower will indemnify each of the Lenders for such taxes paid by each of the Lenders. The Lenders will use commercially reasonable efforts to minimize to the extent possible any applicable taxes and Borrower will indemnify each of the Lenders for such taxes paid by each such Lender, as the case may be.
Requisite Lenders:	Piper Jaffray and Deephaven.
Governing Law and Forum:	The laws of the State of New York. Each party to the Bridge Documentation will waive the right to trial by jury and will consent to jurisdiction of the state and federal courts located in The City of Minnesota.
Counsel to Lenders:	Latham & Watkins llp.

Exhibit A to
ANNEX I

Summary of Principal Terms and Conditions
after the Extension Date

          Capitalized terms used but not defined herein have the meanings given (or incorporated by reference) in the Summary of Principal Terms and Conditions of the Bridge Facility to which this Exhibit A is attached.

Maturity:	The Bridge Notes will mature on the seventh anniversary of the Funding Closing Date (the “Final Maturity Date”).
Interest Rate:	The Bridge Notes will bear interest at a rate equal to the interest rate applicable to the Bridge Notes in effect on the Extension Date.
Optional Redemption:	Borrower may, at its option, redeem some or all of the Bridge Notes at any time at the redemption prices listed below (expressed as a percentage of the accreted value) plus accrued and unpaid interest to the date of purchase:

Months After the Funding
Closing Date	Price
Month 19 through 30		103.00	%
Month 31 through 42		102.00	%
Month 43 through 54		101.00	%
Thereafter		100.00	%

provided, the Bridge Notes shall be redeemable in amounts of $25,000,000 or an integral multiple of $25,000,000 (or a lesser amount if such amount constitutes the entirety of the Bridge Notes outstanding) not more than once every 30 days.

ANNEX II

CONDITIONS TO CLOSING²

          The commitment of each of the Lenders under the Commitment Letter with respect to the Bridge Facility, the agreements of Piper Jaffray to perform the services described in the Commitment Letter, the consummation of the Transactions and the funding of the Bridge Facility are subject to the conditions set forth in the Commitment Letter and satisfaction of each of the conditions precedent set forth below.

          1. The Acquisition and the other Transactions shall be consummated concurrently with the initial funding of the Bridge Facility in accordance with the Acquisition Documents and such other documentation without waiver or amendment thereof unless consented to by each of the Requisite Lenders.

          2. Holdings and its subsidiaries and the transactions contemplated by the Commitment Letter shall be in compliance, in all material respects, with all applicable foreign and U.S. federal, state and local laws and regulations, including all applicable environmental laws and regulations. All necessary governmental and material third party approvals in connection with the Transactions shall have been obtained and shall be in effect.

          3. Sources and uses of funds and the assumptions relating thereto (including indebtedness or preferred equity of Borrower, Holdings, the Acquired Business or any of their respective subsidiaries after giving effect to the Transactions) shall be as set forth in the Commitment Letter.

          4. Pro Forma EBITDA (calculated in a manner acceptable to each of the Requisite Lenders) for the latest four-quarter period ending more than 30 days prior to the Funding Closing Date shall not be less than $115.0 million (the “Trailing Four Quarters EBITDA Amount”). The ratio of (x) pro forma total consolidated indebtedness of Holdings as of the Funding Closing Date after giving effect to the Transactions to (y) the Trailing Four Quarters EBITDA Amount shall not be greater than 6.75x.

          5. Each of the Lenders shall have received all opinions, certificates and closing documentation as Piper Jaffray or Deephaven shall reasonably request and as are usual and customary for financings of this type, in form and substance reasonably satisfactory to Piper Jaffray or Deephaven.

² All capitalized terms used but not defined herein shall have the meanings provided in the Commitment Letter to which this Annex II is attached.

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          6. Borrower and each of the Guarantors shall have provided the documentation and other information to each of the Lenders that is required by regulatory authorities under applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the Patriot Act.

          7. All costs, fees, expenses (including, without limitation, legal fees and expenses and the fees and expenses of appraisers, consultants and other advisors) and other compensation payable to each of the Lenders shall have been paid to the extent due.

          8. Prior to or concurrently with the borrowings under the Bridge Facility, the documentation for the Senior Secured Credit Facility shall have been executed and delivered, and Holdings shall have received gross proceeds of up to $565 million from borrowings under the Senior Secured Credit Facility. The documentation with respect to the Senior Secured Credit Facility shall be reasonably satisfactory in form and substance to each of the Lenders and shall not provide for (a) a non-default interest rate higher than LIBOR plus 450 basis points or (b) a default interest rate higher than an additional 200 basis points. If the Senior Secured Credit Facility provides for an interest rate higher than LIBOR plus 300 basis points, then the Spread applicable to the Bridge Notes will increase in each case by 75 basis points.

SCHEDULE 1

Commitments

Lender	Commitment		Pro Rata Share
Piper Jaffray & Co.	$	89,000,000		49.444445	%
Deephaven Capital Management	$	91,000,000		50.555555	%
Total	$	180,000,000		100	%

EX-99.(D)(1)

[EXECUTION COPY]

AGREEMENT AND PLAN OF MERGER

by and among

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.,

KERMIT MERGER CORP.

and

LASERSCOPE

Dated as of June 3, 2006

TABLE OF CONTENTS

			Page
1.	THE OFFER			2
	1.1	The Offer		2
	1.2	Company Action		4
	1.3	Directors		5
	1.4	Grant of Top-Up Stock Option		6
2.	THE MERGER			7
	2.1	The Merger		7
	2.2	Effective Time		7
	2.3	Effects of the Merger		7
	2.4	Closing of the Merger		7
	2.5	Articles of Incorporation		8
	2.6	Bylaws		8
	2.7	Board of Directors; Officers		8
3.	EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS			8
	3.1	Conversion of Company Capital Stock		8
	3.2	Effect on Capital Stock of Merger Sub		9
	3.3	Dissenting Shares		9
	3.4	Treatment of Options and Other Stock-Based Awards; Company Employee Stock
		Purchase Plan		9
4.	EXCHANGE OF CERTIFICATES FOR MERGER CONSIDERATION			10
	4.1	Parent to Make Merger Consideration Available		10
	4.2	Exchange of Shares		11
	4.3	Adjustments to Prevent Dilution		12
5.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY			12
	5.1	Corporate Organization		13
	5.2	Capitalization		14
	5.3	Authority; No Violation		15
	5.4	Consents and Approvals		16
	5.5	SEC Filings		17
	5.6	Financial Statements		17
	5.7	Broker’s Fees		18
	5.8	Absence of Certain Changes or Events		18
	5.9	Legal Proceedings		19
	5.10	Taxes		20
	5.11	Employee Benefit Plans		22
	5.12	Compliance with Applicable Law		23
	5.13	Certain Contracts		24
	5.14	Undisclosed Liabilities		24

TABLE OF CONTENTS
(continued)

			Page
	5.15	Anti-Takeover Provisions		25
	5.16	Company Information		25
	5.17	Title to Property		25
	5.18	Insurance		26
	5.19	Environmental Liability		26
	5.20	Intellectual Property		27
	5.21	Labor Matters		30
	5.22	Interested Party Transactions		30
	5.23	FDA and Regulatory Matters		31
	5.24	Government Inspections		31
	5.25	No Other Representations or Warranties		31
6.	REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB			32
	6.1	Corporate Organization		32
	6.2	Authority; No Violation		32
	6.3	Consents and Approvals		33
	6.4	Broker’s Fees		33
	6.5	Legal Proceedings		33
	6.6	Financial Capability		34
	6.7	Parent Information		34
	6.8	No Business Activities by Merger Sub		34
	6.9	Ownership of Company Common Stock; No Other Agreements		35
	6.10	Acknowledgement of Parent		35
7.	COVENANTS RELATING TO CONDUCT OF BUSINESS			35
	7.1	Conduct of Business Prior to the Effective Time		35
	7.2	Company Forbearances		35
	7.3	No Fundamental Parent Changes		38
8.	ADDITIONAL AGREEMENTS			38
	8.1	Proxy Statement; Other Filings		38
	8.2	Access to Information		39
	8.3	Merger With Shareholder Meeting		40
	8.4	Merger Without Shareholder Meeting		40
	8.5	Further Actions		40
	8.6	Employees; Employee Benefit Plans		41
	8.7	Indemnification; Directors’ and Officers’ Insurance		42
	8.8	No Solicitation		44
	8.9	Section 16 Matters		47
	8.10	InnovaQuartz Stock Purchase Agreement		47
	8.11	Notification of Certain Matters		47

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TABLE OF CONTENTS
(continued)

			Page
9.	CONDITIONS PRECEDENT			47
10.	TERMINATION AND AMENDMENT			48
	10.1	Termination		48
	10.2	Effect of Termination		49
	10.3	Amendment		50
	10.4	Extension; Waiver		50
11.	GENERAL PROVISIONS			50
	11.1	Nonsurvival of Representations, Warranties and Agreements		50
	11.2	Expenses		51
	11.3	Notices		51
	11.4	Interpretation; Construction		51
	11.5	Counterparts; Facsimile		52
	11.6	Entire Agreement		52
	11.7	Governing Law; Venue		52
	11.8	Severability		53
	11.9	Publicity		53
	11.10	Assignment; Third Party Beneficiaries		53

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INDEX OF DEFINED TERMS

	Page
Acquisition Proposal		46
Affiliate		12
Agreement		1
Agreement of Merger		7
AMS		34
Bankruptcy and Equity Exceptions		16
Business Day		8
California Secretary		7
Capitalization Date		14
Certificate		10
CGCL		7
Claim		43
Closing		7
Closing Date		8
COBRA		23
Code		12
Commitments		34
Company		1
Company Benefit Plans		22
Company Board		4
Company Common Stock		8
Company Contract		24
Company Disclosure Schedule		12
Company Domain Name		27
Company Material Adverse Effect		13
Company Option		9
Company Owned IP		29
Company Preferred Stock		14
Company Product		31
Company Recommendation		4
Company Recommendation Change		45
Company Registered IP		27
Company Representatives		44
Company Required Vote		16
Company SEC Reports		17
Company Shareholder Meeting		40
Company Source Code		30
Company Stock Plans		15
Confidentiality Agreement		40
Continuing Directors		6
Continuing Employees		41
Dissenting Shareholders		9
Dissenting Shares		9
Effective Time		7
Environmental Laws		27
ERISA		23

INDEX OF DEFINED TERMS
(Cont.)

	Page
ESPP		9
Exchange Act		17
Exchange Fund		10
Expenses		43
FDA		31
Fully Diluted Shares		2
GAAP		13
Governmental Entity		16
HIPPA		23
HSR Act		16
Indemnified Parties		42
InnovaQuartz		47
InnovaQuartz Stock Purchase Agreement		47
Intellectual Property		30
Intellectual Property Rights		30
Knowledge of the Company		19
Knowledge of Parent		33
Legal Proceeding		30
Liens		15
Material Trade Secrets		28
Merger		1, 7
Merger Consideration		8
Merger Sub		1
Minimum Condition		2
New Product Introductions		32
Offer		1
Offer Conditions		2
Offer Documents		3
Offer Price		1
Option Consideration		10
Option Exercise Minimum Condition		3
Other Filings		38
Parent		1
Parent Material Adverse Effect		32
Parent Plans		41
Paying Agent		10
Permitted Liens		26
Person		11
Proxy Statement		16
Related Party		31
Revised Minimum Condition		3
Schedule 14D-9		5
SEC		3
Securities Act		17
Shareholder Agreements		1
Shares		1

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INDEX OF DEFINED TERMS
(Cont.)

	Page
Subsidiary		14
Superior Proposal		46
Surviving Company		7
Tax Return		22
Taxes		21
Termination Date		48
Termination Fee		49
Top-Up Closing		7
Top-Up Exercise Notice		7
Top-Up Notice Date		7
Top-Up Option Shares		6
Top-Up Stock Option		6
Top-Up Termination Time		7

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AGREEMENT AND PLAN OF MERGER

     This AGREEMENT AND PLAN OF MERGER, dated as of June 3, 2006 (as amended, supplemented or otherwise modified from time to time, and together with all schedules hereto, this “Agreement”), is entered into by and among AMERICAN MEDICAL SYSTEMS HOLDINGS, INC., a Delaware corporation (“Parent”), KERMIT MERGER CORP., a California corporation and an indirect subsidiary of Parent (“Merger Sub”), and LASERSCOPE, a California corporation (the “Company”).

     WHEREAS, the respective Boards of Directors of each of the Company, Parent, and Merger Sub have approved the acquisition of the Company by Parent on the terms and subject to the conditions of this Agreement;

     WHEREAS, the Board of Directors of the Company has (a) determined that the Offer and the Merger (both as defined herein) and the other transactions contemplated hereby are advisable and in the best interests of the Company and its shareholders, (b) approved and adopted this Agreement and the transactions contemplated hereby, including the Offer and the Merger, and (c) to the extent required by applicable law, recommended that the Company’s shareholders adopt this Agreement;

     WHEREAS, in furtherance thereof, it is proposed that Merger Sub shall, as promptly as practicable, commence an offer (as it may be amended from time to time as permitted under this Agreement, the “Offer”) to acquire all of the outstanding shares (the “Shares”) of Company Common Stock (as defined in Section 3.1(a)), at a price for each Share of $31.00 in cash (such price, or such higher price per Share as may be paid in the Offer, is referred to as the “Offer Price”), in accordance with the terms and subject to the conditions provided herein;

     WHEREAS, also in furtherance thereof, it is proposed that, following the consummation of the Offer, Merger Sub will merge with and into the Company (the “Merger”) and that the Shares not tendered and accepted pursuant to the Offer will thereupon be converted into the right to receive cash in the amounts set forth in Section 3 hereof;

     WHEREAS, simultaneously with the execution and delivery of this Agreement and as a condition and inducement to the willingness of Parent and Merger Sub to enter into this Agreement, Parent and the officers and directors of the Company are entering into agreements pursuant to which such Persons will agree to tender for payment all of their Shares in the Offer, to the extent required by applicable law, to vote to adopt and approve this Agreement and to take certain other actions in furtherance of the transactions contemplated by this Agreement upon the terms and subject to the conditions set forth in such agreements (the “Shareholder Agreements”); and

     WHEREAS, the Company, Parent and Merger Sub desire to make certain representations, warranties, covenants and agreements in connection with the Offer and the Merger and to prescribe certain conditions to the Offer and the Merger.

     NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

1. THE OFFER

     1.1 The Offer.

          (a) Provided that (i) this Agreement shall not have been terminated in accordance with Section 10 and (ii) none of the events set forth in Annex I hereto shall have occurred or be existing, Merger Sub shall, as promptly as practicable (and in any event not later than eight (8) Business Days after the date of this Agreement), commence (within the meaning of Rule 14d-2 under the Exchange Act) the Offer for all of the Shares, at the Offer Price, without interest.

          (b) The obligation of Parent and Merger Sub to accept and pay for Shares tendered shall be subject only to (i) the condition that there shall be validly tendered in accordance with the terms of the Offer prior to the expiration date of the Offer and not withdrawn a number of Shares (including the Shares tendered under the Shareholder Agreements) which, together with the Shares then owned by Parent and Merger Sub, represents at least ninety percent (90%) of the total number of Fully Diluted Shares (as defined below) (the “Minimum Condition”), subject to such waivers of, and changes to, the Minimum Condition as may be required pursuant to Section 1.1(e), and (ii) the other conditions set forth in Annex I hereto (collectively, the “Offer Conditions”). For purposes of this Agreement, “Fully Diluted Shares” shall mean the total number of outstanding shares of Company Common Stock, assuming (A) exercise on a cash basis of all outstanding Company Options, whether vested or unvested (excluding for this purpose all Company Options, whether vested or unvested, held by holders who have entered into binding written agreements with the Company agreeing to refrain from exercising all or any portion of such Company Options during any period that the Offer remains pending and all Company Options with an exercise price greater than the Offer Price, irrespective of whether the holders thereof have entered into such binding written agreements), and (B) exercise or conversion of all other rights to acquire Company Common Stock or securities convertible into Company Common Stock and issuance of all shares of Company Common Stock that the Company is obligated to issue.

          (c) Parent and Merger Sub expressly reserve the right to waive any of the Offer Conditions and to make any change in the terms or conditions of the Offer; provided that, without the prior written consent of the Company, no change may be made which (i) changes the form or amount of consideration to be paid (other than by adding consideration) or changes the number of Shares sought in the Offer, (ii) imposes any conditions to the Offer other than the Offer Conditions or modifies the Offer Conditions (other than to waive any Offer Condition to the extent permitted by this Agreement), (iii) changes or waives the Minimum Condition, except as required pursuant to Section 1.1(e), (iv) extends the Offer beyond the initial expiration date of the Offer (except as permitted or required by Section 1.1(d)), or (v) makes any other change to the terms of the Offer which is adverse to the holders of Shares.

          (d) Subject to the terms of the Offer and this Agreement, satisfaction of the Minimum Condition (subject to such waivers of, and changes to, the Minimum Condition as may be required pursuant to Section 1.1(e)) and the absence (or waiver to the extent permitted by this Agreement) of the other Offer Conditions, Merger Sub shall accept for payment all Shares validly tendered and not withdrawn pursuant to the

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Offer as soon as it is permitted to do so under applicable law and shall pay for all such Shares promptly after acceptance. The Offer shall initially be scheduled to expire at 12:00 midnight Central time on the date that is the 20th Business Day after the commencement date of the Offer. Notwithstanding anything to the contrary contained in this Agreement, but subject to the parties’ termination rights under Section 10.1, (i) if, immediately prior to the initial expiration of the Offer, the number of Shares validly tendered in accordance with the terms of the Offer and not withdrawn is at least seventy percent (70%) of the Fully Diluted Shares but less than the Minimum Condition, Merger Sub shall have a one time right to extend the expiration date of the Offer, without the consent of the Company, for an additional period not to exceed ten (10) Business Days; (ii) if, immediately prior to the initial expiration of the Offer, the number of Shares validly tendered in accordance with the terms of the Offer is either (A) greater than thirty five percent (35%) of the Fully Diluted Shares but less than forty nine and nine-tenths percent (49.9%) of the Fully Diluted Shares or (B) greater than seventy percent (70%) of the Fully Diluted Shares but less than the Minimum Condition, the Company shall have the right to require Merger Sub to extend the expiration date of the Offer for an additional period not to exceed ten (10) Business Days; (iii) if, immediately prior to the initial expiration of the Offer or the expiration of any extension thereof permitted or required pursuant to this Section 1.1(d), an unsolicited Acquisition Proposal has been made and remains pending, Merger Sub shall have a one time right to extend, and the Company shall, so long as it has not breached in any material respect its obligations under Section 8.8, have a one time right to require Merger Sub to extend, the expiration date of the Offer for an additional period not to exceed ten (10) Business Days; (iv) if, immediately prior to the initial expiration date of the Offer or any extension thereof permitted or required by this Section 1.1(d), the Minimum Condition, the Option Exercise Minimum Condition or the Revised Minimum Condition, as applicable, has been satisfied but any of the other Offer Conditions exists and has not been waived, Merger Sub shall, and Parent shall cause Merger Sub to, take all action necessary to extend the expiration date of the Offer until the earlier of the removal or waiver of all of such other Offer Conditions or the termination of this Agreement; and (v) without the consent of the Company, Merger Sub shall have the right, subject to its compliance with the terms of this Agreement, to extend the expiration date of the Offer for any period required by any rule, regulation, interpretation or position of the Securities Exchange Commission (the “SEC”) applicable to the Offer. Except as set forth in the preceding sentence, the expiration date of the Offer shall not be extended without the prior written consent of the Company.

          (e) Notwithstanding anything to the contrary set forth herein, if, at the end of the initial expiration of the Offer or any extension thereof permitted or required pursuant to Section 1.1(d), the Minimum Condition is not satisfied but the number of Shares then tendered pursuant to the Offer and not withdrawn is equal to or greater than forty nine and nine-tenths percent (49.9%) of the Fully Diluted Shares, then, at the request of the Company and subject to any right of Parent or Merger Sub to terminate this Agreement pursuant to the terms hereof, Merger Sub shall, and Parent shall cause Merger Sub to: (i) exercise the Top-Up Stock Option (as defined below), waive the Minimum Condition, and, in contemplation of the exercise of the Top-Up Stock Option, reduce the number of shares of Company Common Stock subject to the Offer to that percentage of the Fully Diluted Shares (the “Option Exercise Minimum Condition”) that, when combined with the number of shares issued upon exercise of the Top-Up Stock Option, equals ninety percent (90%) of the Fully Diluted Shares; or (ii) waive the Minimum Condition and amend the Offer to reduce the number of shares of Company Common Stock subject to the Offer to 49.9% of the Fully Diluted

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Shares (the “Revised Minimum Condition”) and, subject to the prior satisfaction or waiver of the other Offer Conditions, purchase, on a pro rata basis, the number of Shares comprising the Revised Minimum Condition (it being understood that the Company’s right to require Merger Sub to take the actions described in clause (ii) is triggered if and only if the exercise of the Top-Up Stock Option would not, when combined with the number of Shares then tendered pursuant to the Offer and not withdrawn, result in Merger Sub holding ninety percent (90%) of the Fully Diluted Shares; it being further understood that Merger Sub shall not in any event be required to accept for payment, or pay for, any Shares if the number of Shares tendered pursuant to the Offer and not withdrawn at the expiration date is less than the Revised Minimum Condition).

          (f) As soon as practicable on or prior to the date of commencement of the Offer, Parent and Merger Sub shall (i) file with the SEC a Tender Offer Statement on Schedule TO with respect to the Offer which will contain or incorporate by reference all or part of the form of the related letter of transmittal (together with any supplements or amendments thereto, collectively the “Offer Documents”) and (ii) cause the Offer Documents to be disseminated to holders of Shares. Parent, Merger Sub and the Company each agree promptly to correct any information provided by it for use in the Offer Documents if and to the extent that such information contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. Parent and Merger Sub agree to take all steps necessary to cause the Offer Documents as so corrected to be filed with the SEC and to be disseminated to holders of Shares, in each case as and to the extent required by applicable federal securities laws. The Company and its counsel shall be given a reasonable opportunity to review and comment on the Schedule TO and the Offer Documents before they are filed with the SEC.

     1.2 Company Action.

          (a) The Company hereby approves and consents to the Offer and represents that its Board of Directors (the “Company Board”), at a meeting duly called and held, has unanimously (i) determined that this Agreement and the transactions contemplated hereby, including the Offer and the Merger, are advisable and are in the best interest of the Company’s shareholders, (ii) approved this Agreement and the transactions contemplated hereby, including the Offer and the Merger, and the Shareholder Agreements and the transactions contemplated thereby, such that the Offer, the Merger, this Agreement and the other transactions contemplated hereby and thereby are not and shall not be subject to any state takeover statutes, and (iii) resolved to recommend acceptance of the Offer and, to the extent required by applicable law, approval and adoption of this Agreement and the Merger by the Company’s shareholders (the recommendations referred to in this clause (iii) are collectively referred to in this Agreement as the “Company Recommendation”). The Company further represents that Goldman Sachs & Co. has rendered to the Company Board its opinion that the $31.00 in cash to be received by the holders of Shares in the Offer and the Merger is fair from a financial point of view to such holders. The Company has been advised that all of its directors and executive officers presently intend to tender their Shares pursuant to the Offer pursuant to the Shareholder Agreements. The Company will promptly furnish Parent and Merger Sub with a list of its shareholders, mailing labels and any available listing or computer file containing the names and addresses of all record holders of Shares and lists of securities positions of Shares held in stock depositories, in each case as of the most

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recent practicable date, engage a third party solicitor on customary terms for the purpose of contacting all record holders of Shares regarding the Offer and provide to Parent and Merger Sub such additional information (including, without limitation, updated lists of shareholders, mailing labels and lists of securities positions) and such other assistance as Parent or Merger Sub may reasonably request in connection with the Offer.

          (b) As soon as practicable on the day that the Offer is commenced, the Company will file with the SEC and disseminate to holders of Shares a Solicitation/Recommendation Statement on Schedule 14D-9 (the “Schedule 14D-9”) which shall reflect the Company Recommendation. The Company, Parent and Merger Sub each agree promptly to correct any information provided by it for use in the Schedule 14D-9 if and to the extent that it contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. The Company agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be disseminated to holders of Shares, in each case as and to the extent required by applicable federal securities laws. Parent and its counsel shall be given a reasonable opportunity to review and comment on the Schedule 14D-9 before it is filed with the SEC.

     1.3 Directors.

          (a) Effective upon consummation of the Offer, Parent shall, subject to Section 1.3(c), be entitled to designate the number of directors, rounded up to the next whole number, on the Company Board that equals the product of (i) the total number of directors on the Company Board (giving effect to the election of any additional directors pursuant to this Section 1.3) and (ii) the percentage that the number of Shares owned by Parent or Merger Sub (including Shares accepted for payment in connection with the Offer) bears to the total number of Shares then outstanding, and the Company shall take all action necessary to cause Parent’s designees to be elected or appointed to the Company Board, including increasing the number of directors, or seeking and accepting resignations of incumbent directors, or both; provided that, prior to the Effective Time, the Company Board shall always have at least two (2) Continuing Directors (as defined below). If the number of Continuing Directors is reduced to less than two (2) for any reason prior to the Effective Time, the remaining and departing Continuing Directors shall be entitled to designate a person to fill the vacancy. At such times, the Company will use its commercially reasonable efforts to cause individuals designated by Parent to constitute the same percentage as such individuals represent on the Company Board of (x) each committee of the Company Board, (y) each board of directors of each subsidiary and (z) each committee of each such board. Notwithstanding anything in this Agreement to the contrary, in the event that Parent’s designees are elected to the Company Board prior to the Effective Time, the unanimous affirmative vote of the Continuing Directors shall be required for the Company to (a) amend or terminate this Agreement or agree or consent to any amendment or termination of this Agreement, (b) waive any of the Company’s rights, benefits or remedies hereunder, (c) extend the time for performance of Parent’s and Merger Sub’s respective obligations hereunder, or (d) approve any other action by the Company which is reasonably likely to adversely affect the interests of the shareholders of the Company (other than Parent, Merger Sub and their Affiliates (other than the Company and its Subsidiaries)), with respect to the transactions contemplated by this Agreement. In addition, in the event approval of

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the Company’s shareholders is required by applicable law in order to consummate the Merger other than pursuant to Section 1110 of the CGCL, the Continuing Directors shall retain responsibility for, and control over, the Company’s obligations with respect to the Other Filings (as defined in Section 8.1(a) hereof). For purposes of this Agreement, “Continuing Directors” shall mean members of the Company Board who were directors of the Company prior to the consummation of the Offer.

          (b) The Company’s obligations to appoint designees to the Company Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-l promulgated thereunder. The Company shall promptly take all actions required pursuant to Section 14(f) and Rule 14f-l in order to fulfill its obligations under this Section 1.3 and shall include in the Schedule 14D-9 such information with respect to the Company and its officers and directors as is required under Section 14(f) and Rule 14f-l to fulfill its obligations under this Section 1.3. Parent will supply to the Company in writing and be solely responsible for any information with respect to itself and its nominees, officers, directors and Affiliates required by Section 14(f) and Rule 14f-1. The provisions of Section 1.3(a) are in addition to and shall not limit any rights that Parent, Merger Sub or any of their Affiliates may have as a holder or beneficial owner of Shares as a matter of law with respect to the election of directors or otherwise.

          (c) Parent agrees that it will not exercise its right to designate members of the Company Board pursuant to this Section 1.3 in any manner that would result in the Company becoming non-compliant with the corporate governance requirements of the Nasdaq National Market applicable to listed companies, including Rule 4350 thereof.

     1.4 Grant of Top-Up Stock Option.

          (a) Subject to the terms and conditions set forth herein, the Company hereby grants to Merger Sub an irrevocable option (the “Top-Up Stock Option”) to purchase that number of newly-issued shares of Company Common Stock (the “Top-Up Option Shares”) equal to the number of shares of Company Common Stock that, when added to the number of shares of Company Common Stock owned by Merger Sub, Parent and their Subsidiaries immediately following consummation of the Offer and the issuance of such Top-Up Option Shares, shall constitute ninety percent (90%) of the total number of Fully Diluted Shares (assuming the issuance of the Top-Up Option Shares), at a purchase price per Top-Up Option Share equal to the Offer Price; provided, however, that (i) the total number of shares of Company Common Stock subject to the Top-Up Stock Option shall not exceed the number of authorized shares of Company Common Stock available for issuance by the Company at such time (giving effect to such shares of Company Common Stock reserved for issuance pursuant to outstanding Company Options or pursuant to the ESPP as though such shares of Company Common Stock were outstanding), (ii) the number of Top-Up Shares subject to the Top-Up Option shall not exceed 19.9% of the total number of shares of Company Common Stock outstanding immediately prior to such issuance and (iii) the Company shall not be required to issue shares of Company Common Stock pursuant to the Top-Up Stock Option if any temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal or regulatory restraint then in effect shall prohibit such issuance. The Company agrees to provide Parent and Merger Sub with information regarding the number of shares of Company Common Stock available for issuance on an ongoing basis, as and when requested by Parent from time to time prior to the Top-Up Termination Time (as defined below).

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          (b) Merger Sub shall, if and only if required by the Company pursuant to Section 1.1(e) prior to the Top-Up Termination Date, promptly exercise the Top-Up Stock Option in whole, but not in part.

          (c) Except as provided in the last sentence of this Section 1.4(c), the “Top-Up Termination Time” shall occur upon the earliest to occur of: (i) the Effective Time, and (iii) the termination of this Agreement. The occurrence of the Top-Up Termination Time shall not affect any rights hereunder which by their terms do not terminate or expire prior to or as of such date, unless this Agreement has been terminated under Section 10 prior to the occurrence of the Top-Up Closing.

          (d) In the event Merger Sub is obligated pursuant to this Agreement to exercise the Top-Up Stock Option, Merger Sub shall send to the Company a written notice (a “Top-Up Exercise Notice,” the date of which notice is referred to herein as the “Top-Up Notice Date”) specifying the denominations of the certificate or certificates evidencing the Top-Up Option Shares which Merger Sub wishes to receive, the place for the closing of the purchase and sale pursuant to the Top-Up Stock Option (the “Top-Up Closing”) and a closing date not earlier than one (1) day nor later than three (3) Business Days from the Top-Up Notice Date for the Top-Up Closing. The Company shall, promptly after receipt of the Top-Up Exercise Notice, deliver a written notice to Parent and Merger Sub confirming the number of Top-Up Option Shares and the aggregate purchase price therefor.

2. THE MERGER

     2.1 The Merger. Upon the terms and subject to the conditions of this Agreement, in accordance with the California General Corporation Law (“CGCL”), at the Effective Time (as hereinafter defined), Merger Sub shall merge with and into the Company (the “Merger”). The Company shall be the surviving corporation (hereinafter sometimes called the “Surviving Company”) of the Merger, and shall continue its corporate existence under the laws of the State of California. Upon consummation of the Merger, the separate corporate existence of Merger Sub shall terminate.

     2.2 Effective Time. The Merger shall become effective as set forth in an agreement of merger or certificate of ownership pursuant to Section 1110 of the CGCL satisfying the applicable requirements of the CGCL (in either case, the “Agreement of Merger”), together with such other certificates satisfying the applicable requirements of the CGCL, which shall be duly executed by the Company and Merger Sub and filed with the Secretary of State of the State of California (the “California Secretary”) on the Closing Date (as hereinafter defined) or as soon thereafter as practicable. As used herein, the term “Effective Time” shall mean the date and time when the Merger becomes effective as provided by the Agreement of Merger and otherwise in accordance with applicable law.

     2.3 Effects of the Merger. At and after the Effective Time, the Merger shall have the effects and consequences set forth in Section 1107 of the CGCL.

     2.4 Closing of the Merger. Upon the terms and subject to the conditions of this Agreement, the closing of the Merger (the “Closing”)

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will take place (a) at the offices of Orrick, Herrington & Sutcliffe LLP, 405 Howard Street, San Francisco, California, at 7:00 a.m., California time, on the date that is the second Business Day after the satisfaction or waiver of the conditions set forth in Section 9 hereof, other than conditions which by their terms are to be satisfied at the Closing, or (b) such other location, date or time as the parties may mutually agree (the “Closing Date”). For purposes of this Agreement, a “Business Day” shall mean any day that is not a Saturday, a Sunday or other day on which the office of the California Secretary is closed.

     2.5 Articles of Incorporation. At the Effective Time, the Articles of Incorporation of the Surviving Company shall be amended and restated in their entirety to be identical to the Articles of Incorporation of Merger Sub, as in effect immediately prior to the Effective Time, until thereafter amended in accordance with applicable law; provided, however, that at the Effective Time, Article I of the Articles of Incorporation of the Surviving Company shall be amended to read as follows: “Laserscope”.

     2.6 Bylaws. At the Effective Time, the Bylaws of the Surviving Company shall be amended and restated in their entirety to be identical to the Bylaws of Merger Sub, as in effect immediately prior to the Effective Time, until thereafter amended in accordance with applicable law.

     2.7 Board of Directors; Officers. The directors of Merger Sub immediately prior to the Effective Time shall be the directors of the Surviving Company, each to hold office in accordance with the Articles of Incorporation and Bylaws of the Surviving Company and applicable law, until the earlier of their resignation or removal or until their respective successors are duly elected or appointed (as the case may be) and qualified. The officers of Merger Sub immediately prior to the Effective Time shall be the officers of the Surviving Company, each to hold office in accordance with the Articles of Incorporation and Bylaws of the Surviving Company and applicable law, until the earlier of their resignation or removal or until their respective successors are duly elected or appointed (as the case may be).

3. EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS

     3.1 Conversion of Company Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of Parent, the Company or the holder of any of the shares of Company Common Stock:

          (a) All shares of common stock, without par value, of the Company (the “Company Common Stock”) owned directly by the Company, Merger Sub or Parent (other than shares in trust accounts, managed accounts and the like or shares held in satisfaction of a debt previously contracted) shall be cancelled and retired and shall not represent capital stock of the Surviving Company and shall not be exchanged for the Merger Consideration (as defined below); and

          (b) Each outstanding share of Company Common Stock (other than those cancelled pursuant to Section 3.1(a) and Dissenting Shares (as defined below)) shall be converted into and become the right to receive an amount in cash, without interest, equal to the Offer Price (the “Merger Consideration”).

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     3.2 Effect on Capital Stock of Merger Sub. At and after the Effective Time, each share of common stock, without par value, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one (1) fully paid share of common stock, without par value, of the Surviving Company and constitute the only outstanding shares of capital stock of the Surviving Company and shall not be effected by the Merger.

     3.3 Dissenting Shares. Notwithstanding anything in this Agreement to the contrary, in the event that the applicable requirements of Section 1300(b) of the CGCL have been satisfied, shares of Company Common Stock that are issued and outstanding immediately prior to the Effective Time and that are held by a shareholder (the “Dissenting Shareholders”) who (a) voted such shareholder’s shares of Company Common Stock against the Merger (or did not consent thereto in writing, if approval the Merger is obtained by written consent), (b) is entitled to demand and properly demand that the Company purchase such shares at their fair market value in accordance with Section 1301 of the CGCL, (c) has submitted such shares for endorsement in accordance with Section 1302 of the CGCL and (d) has not otherwise failed to perfect or effectively withdrawn or lost such right to require the Company to so purchase such shares, shall not be converted into or be exchangeable for the right to receive the Merger Consideration (the “Dissenting Shares”), but instead such Dissenting Shareholder shall be entitled to have the Dissenting Shares purchased by the Company for cash at the fair market value thereof as agreed upon or determined in accordance with the provisions of Chapter 13 of the CGCL (and at the Effective Time, such Dissenting Shares shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and such Dissenting Shareholder shall cease to have any rights with respect thereto, except the right to have the Dissenting Shares purchased by the Company in accordance with the provisions of Chapter 13 of the CGCL), unless and until such Dissenting Shareholder shall have failed to perfect or shall have effectively withdrawn or lost such right to require the Company to so purchase the Dissenting Shares. If any Dissenting Shareholder shall have failed to perfect or shall have effectively withdrawn or lost such right, such holder’s shares of Company Common Stock shall thereupon be treated as if they had been converted into and become exchangeable for the right to receive, as of the Effective Time, the Merger Consideration for each such share of Company Common Stock, in accordance with Section 3.1(b), without any interest thereon. The Company shall give Parent (i) prompt notice of any written demands for pursuant to Chapter 13 of the CGCL, attempted withdrawals of such demands and any other instruments served pursuant to Chapter 13 of the CGCL and received by the Company relating to a shareholder’s demand that the Company purchase shares of Company Common Stock, and (ii) the opportunity to direct all negotiations and proceedings with respect to such demands. The Company shall not, except with the prior written consent of Parent, voluntarily make any payment with respect to, or settle, or offer or agree to settle, any such demand for purchase and payment.

     3.4 Treatment of Options and Other Stock-Based Awards; Company Employee Stock Purchase Plan.

          (a) Except as provided below with respect to Company’s 1999 Employee Stock Purchase Plan (the “ESPP”), as of the Effective Time, each option to purchase shares of Company Common Stock or other right to receive Company Common Stock under any Company Stock Plan (each a “Company Option”) which is outstanding and unexercised immediately prior thereto shall become fully vested as of the Effective Time

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and shall by virtue of the Merger and without any action on the part of any holder of any Company Option be cancelled and the holder thereof will receive as soon as reasonably practicable following the Effective Time a cash payment (without interest) with respect thereto equal to the product of (i) the excess, if any, of the Merger Consideration over the exercise price per share of such Company Option and (ii) the number of shares of Company Common Stock issuable upon exercise of such Company Option (collectively, the “Option Consideration”). The Option Consideration shall be reduced by any withholding or other taxes that may be due as a result of the transactions contemplated by this Section 3.4. As of the Effective Time, all Company Options, whether or not vested or exercisable, shall no longer be outstanding and shall automatically cease to exist, and each holder of a Company Option shall cease to have any rights with respect thereto, except the right to receive the Option Consideration, if any. The Company Board or compensation committee of the Company Board shall take all necessary action to make such amendments and adjustments to or make such determinations with respect to the Company Options as are necessary to implement the provisions of this Section 3.4(a).

          (b) The “offering period” and “purchase period” (as defined in the ESPP) currently in process as of the date of this Agreement under the ESPP shall continue and shares shall be issued to participants thereunder as provided under, and subject to the terms and conditions of, the ESPP; provided, however, that if the Effective Time occurs prior to the originally scheduled expiration of such current purchase period, then immediately prior to the Effective Time, such current purchase period under the ESPP shall be ended, and each participant shall be deemed to have purchased immediately prior to the Effective Time, to the extent of payroll deductions accumulated by such participant as of such purchase period end, the number of whole shares of Company Common Stock at a per share price determined pursuant to the provisions of the ESPP, and each participant shall receive a cash payment equal to the balance, if any, of such accumulated payroll deductions remaining after such purchase of such shares. As of the Effective Time, all such deemed purchased shares shall be converted into the right to receive cash pursuant to Section 3.1. No offering periods or purchase periods under the ESPP that are subsequent to the current purchase period in process as of the date of this Agreement shall be commenced, and the ESPP and all purchase rights thereunder shall terminate effective as of the Effective Time. The Company Board or compensation committee of the Company Board shall take all necessary action to provide that participants under the ESPP may not increase their payroll deductions from those in effect on the date of this Agreement.

4. EXCHANGE OF CERTIFICATES FOR MERGER CONSIDERATION

     4.1 Parent to Make Merger Consideration Available. Prior to the Effective Time, Parent shall (a) deposit, or shall cause to be deposited, with a bank or trust company designated by Parent and reasonably acceptable to the Company (the “Paying Agent”) in a separate fund (the “Exchange Fund”), for the benefit of the holders of certificates or evidence of shares in book-entry form which immediately prior to the Effective Time evidenced shares of Company Common Stock (each a “Certificate”), an amount in cash sufficient to pay the aggregate Merger Consideration and the Option Consideration, and (b) instruct the Paying Agent to timely pay the Merger Consideration and the Option Consideration in accordance with this Agreement. The Merger Consideration and the Option Consideration deposited with the Paying Agent pursuant to this Section 4.1 shall be invested by the Paying Agent as directed by Parent; provided, however, that any such investment or any

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payment of earnings from any such investment shall not delay the receipt by the holders of record of the Certificates of the Merger Consideration or otherwise impair such holders’ rights hereunder. Any interest or income produced by such investments shall not be deemed part of the Exchange Fund and shall be payable to the Surviving Company. In the event that the funds in the Exchange Fund shall be insufficient to make the payments contemplated by Sections 3.3 and 3.4, Parent shall promptly deposit, or cause to be deposited, additional funds with the Paying Agent in an amount which is equal to the deficiency in the amount required to make such payment. The Paying Agent shall cause the Exchange Fund to be (i) held for the benefit of the holders of shares Company Common Stock and Company Options and (ii) applied promptly to making the payments provided for in Section 3. The Exchange Fund shall not be used for any purpose that is not expressly provided for in this Agreement.

     4.2 Exchange of Shares.

          (a) As soon as reasonably practicable after the Effective Time, the Paying Agent shall mail to each holder of record of a Certificate a form of letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Paying Agent) and instructions for use in effecting the surrender of the Certificates in exchange for payment of the Merger Consideration. Upon proper surrender of a Certificate for exchange and cancellation to the Paying Agent, together with a properly completed letter of transmittal, duly executed, the holder of such Certificate shall be entitled to receive in exchange therefor a check representing the amount of the Merger Consideration that such former holder has the right to receive pursuant to the provisions of Section 3, in each case, in respect of the Certificate surrendered pursuant to the provisions of this Section 4, and the Certificate so surrendered shall forthwith be cancelled.

          (b) If payment of the Merger Consideration is to be made to any Person other than the registered holder of the Certificate surrendered in exchange therefor, it shall be a condition of the payment thereof that the Certificate so surrendered shall be properly endorsed (or accompanied by an appropriate instrument of transfer) and otherwise in proper form for transfer, and that the Person requesting such exchange shall pay to the Paying Agent in advance any transfer or other similar taxes required by reason of the payment of the Merger Consideration to any Person other than the registered holder of the Certificate surrendered, or required for any other reason relating to such holder or requesting Person, or shall establish to the reasonable satisfaction of the Paying Agent that such tax has been paid or is not payable. As used herein, “Person” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other entity of whatever nature.

          (c) At or after the Effective Time, there shall be no transfers on the stock transfer books of the Company of the shares of Company Common Stock which were issued and outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates representing such shares are presented for transfer to the Paying Agent, they shall be cancelled and exchanged for the Merger Consideration as provided in this Section 4.

          (d) Any portion of the Exchange Fund that remains unclaimed by the Company’s shareholders for one year after the Effective Time shall

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be paid, at the request of Parent, to Parent. Any shareholder of the Company who has not theretofore complied with this Section 4 shall thereafter look only to Parent for payment of the Merger Consideration payable in respect of each share of Company Common Stock held by such shareholder at the Effective Time as determined pursuant to this Agreement, in each case, without any interest thereon. Notwithstanding anything to the contrary contained herein, none of Parent, the Company, the Paying Agent, Merger Sub or any other Person shall be liable to any former holder of shares of Company Common Stock for any amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar laws.

          (e) In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by Parent, the posting by such Person of a bond in such amount as Parent may determine is reasonably necessary as indemnity against any claim that may be made against it with respect to such Certificate, the Paying Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger Consideration deliverable in respect thereof pursuant to this Agreement.

          (f) Parent or the Paying Agent will be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement or the transactions contemplated hereby to any holder of Company Common Stock such amounts as Parent, or any affiliate (as defined under the Exchange Act (an “Affiliate”)) thereof, or the Paying Agent are required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code of 1986, as amended (the “Code”), or any applicable provision of U.S. federal, state, local or non-U.S. tax law. To the extent that such amounts are properly withheld by Parent or the Paying Agent and paid over to the appropriate taxing authority, such withheld amounts will be treated for all purposes of this Agreement as having been paid to the holder of the Company Common Stock in respect of whom such deduction and withholding were made by Parent or the Paying Agent.

     4.3 Adjustments to Prevent Dilution. Without limiting the other provisions of the Agreement, in the event that the Company changes the number of shares of Company Common Stock issued and outstanding prior to the Offer or the Effective Time as a result of a reclassification, stock split (including a reverse stock split), stock dividend or distribution, recapitalization, merger, subdivision, issuer tender or exchange offer, or other similar transaction, the Offer Price, the Merger Consideration and the Option Consideration shall be equitably adjusted to reflect such change.

5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     Except as set forth in (a) the Company’s filings with the SEC required by the Securities Act (as defined below) or the Exchange Act (as defined below) during the two year period immediately preceding the date of this Agreement, which filings shall qualify all sections and subsections of this Agreement for which it is reasonably apparent from the face of the disclosure contained therein that such disclosure is applicable or relevant, or (b) the disclosure schedule of the Company delivered to Parent concurrently herewith (the “Company Disclosure Schedule”) (with specific reference to the section of this Agreement to which the information stated in such Company Disclosure Schedule relates; provided that (i) disclosure in any section of such Company Disclosure Schedule shall be deemed to be disclosed with respect to any

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other Section of this Agreement to the extent that it is reasonably apparent from the face of such disclosure that such disclosure is applicable or relevant to such other Section and (ii) the mere inclusion of an item in such Company Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had or would have a Company Material Adverse Effect), the Company hereby represents and warrants to Parent and Merger Sub as follows:

     5.1 Corporate Organization.

          (a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of California. The Company has the corporate power and corporate authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted, and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business currently conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified would not reasonably be expected to result in a Company Material Adverse Effect. As used in this Agreement, the term “Company Material Adverse Effect” means any change or effect that is (i) materially adverse to the business, operations, assets, properties, results of operations or financial condition of the Company and its Subsidiaries taken as a whole or (ii) prevents the Company from consummating the transactions contemplated hereby on a timely basis; provided, however, that in determining whether a Company Material Adverse Effect has occurred, there shall be excluded any effect on the Company or its Subsidiaries relating to or arising in connection with (A) the negotiation (including activities relating to due diligence), execution, delivery or public announcement or the pendency of this Agreement or the transactions contemplated hereby or any actions required to be taken in compliance herewith (exclusive, however, of the actions required to be taken by Section 7.1 hereof) or otherwise with the consent of the other party hereto, including the impact thereof on the relationships of the Company or any of its Subsidiaries with customers, suppliers, distributors, consultants, employees or independent contractors or other third parties with whom the Company or any of its Subsidiaries has any relationship and including any litigation brought by any shareholder of the Company solely as a result of the transactions contemplated hereby, (B) any event, occurrence, circumstance or trend, including a diminution in value, related to the Company, any of its Subsidiaries or any of their respective businesses, properties, assets, results of operations or financial condition that, to the Knowledge of Parent, exists as of the date hereof, (C) any fact, circumstance or condition disclosed in the Company Disclosure Schedule to the extent such change, effect or circumstance is specifically set forth in the Company Disclosure Schedule or is reasonably apparent from the face of the Company Disclosure Schedule without additional information, (D) any change in the market price or trading volume of the Company’s securities, in and of itself, (E) any failure, in and of itself, by the Company to meet any projections or forecasts for any period ending (or for which revenues or earnings are released) on or after the date hereof, (F) any change in federal, state, non-U.S. or local law, regulations, policies or procedures, or interpretations thereof, generally accepted accounting principles (“GAAP”) or regulatory accounting requirements applicable or potentially applicable to the industries in which the Company or its Subsidiaries operate, (G) changes generally affecting the industries in which the Company or its Subsidiaries operate, (H) changes in economic conditions (including changes in the prevailing interest rates) in the United States, in any region thereof, or in any non-U.S. or global economy or (I) any attack on,

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or by, outbreak or escalation of hostilities or acts of terrorism involving, the United States, or any declaration of war by the United States Congress or any hurricane or other natural disaster; provided, however, that the changes referred to in clauses (F) through (I) do not have a materially disproportionate effect (relative to other industry participants) on the Company and its Subsidiaries, taken as a whole. As used herein, “Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company or any other entity that is consolidated with such Person for financial reporting purposes.

          (b) The copies of the Articles of Incorporation and Bylaws of the Company and the equivalent organizational documents of each Subsidiary of the Company which have previously been made available to Parent are true, complete and correct copies of such documents as in effect as of the date of this Agreement.

          (c) Each Subsidiary of the Company (i) is duly organized and validly existing as a corporation, partnership, limited liability company or other entity, as the case may be, under the laws of its jurisdiction of organization, (ii) is duly licensed or qualified to do business and is in good standing in all jurisdictions (whether federal, state, local or non-U.S.) where its ownership or leasing of property or the conduct of its business requires it to be so licensed or qualified and in which the failure to be so qualified would reasonably be expected to result in, either individually or in the aggregate, a Company Material Adverse Effect and (iii) has all requisite corporate or other requisite power and authority to own or lease its properties and assets and to carry on its business as now conducted.

          (d) The minute books of the Company and each of its Subsidiaries previously made available to Parent contain true, complete and correct records in all material respects of all meetings and other material corporate actions held or taken since January 1, 2004 of their respective shareholders, members, partners or other equity holders and Boards of Directors or other governing bodies (including committees of their respective Boards of Directors or other governing bodies) through the date hereof.

     5.2 Capitalization.

          (a) The authorized capital stock of the Company consists of 30,000,000 shares of Common Stock, without par value, and 5,000,000 shares of Preferred Stock, without par value, (the “Company Preferred Stock”). As of the close of business on June 2, 2006 (the “Capitalization Date”), there were 22,396,973 shares of Company Common Stock outstanding and no shares of Company Preferred Stock outstanding. As of the close of business on the Capitalization Date, no shares of Company Common Stock or Company Preferred Stock were reserved or to be made available for issuance, except as set forth in Section 5.2(a) of the Company Disclosure Schedule. All of the issued and outstanding shares of Company Common Stock have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof. Except (i) as set forth in Section 5.2(a) of the Company Disclosure Schedule, (ii) pursuant to any cashless exercise provisions of any Company Options or pursuant to the surrender of shares to the Company or the withholding of shares by the Company to cover tax withholding obligations under the Company’s stock plans and arrangements set forth in Section 5.2(a) of the Company Disclosure Schedule (collectively, and in each case as the same may be amended to

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the date hereof, the “Company Stock Plans”), and (iii) as set forth elsewhere in this Section 5.2(a), the Company does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any shares of Company Common Stock or Company Preferred Stock or any other equity securities of the Company or any securities representing the right to purchase or otherwise receive any shares of the Company capital stock (including any rights plan or agreement). Section 5.2(a) of the Company Disclosure Schedule sets forth a true, complete and correct list of the aggregate number of shares of Company Common Stock issuable upon the exercise of each stock option granted under the Company Stock Plans that was outstanding as of the Capitalization Date and the exercise price for each such stock option. Since the Capitalization Date, the Company has not (i) issued or repurchased any shares of its capital stock or any securities convertible into or exercisable for any shares of its capital stock, other than upon the exercise of employee stock options granted prior to such date and disclosed in this Section 5.2(a) or pursuant to the surrender of shares to the Company or the withholding of shares by the Company to cover tax withholding obligations under the Company Stock Plans, or (ii) issued or awarded any options, restricted shares or other equity-based awards under the Company Stock Plans.

          (b) Section 5.2(b) of the Company Disclosure Schedule lists the name, jurisdiction of organization, authorized and outstanding shares of capital stock and record and beneficial owners of such capital stock for each Subsidiary of the Company. Except as set forth in Section 5.2(b) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries own, directly or indirectly, any equity or similar interest in, or any interest convertible into or exchangeable for, any equity or similar interest in, any corporation, partnership, joint venture or other similar business association or entity (other than its wholly owned Subsidiaries). Except as set forth in Section 5.2(b) of the Company Disclosure Schedule, the Company owns, directly or indirectly, all of the issued and outstanding shares of capital stock of or all other equity interests in each of the Company’s Subsidiaries free and clear of any liens, charges, encumbrances, adverse rights or claims and security interests whatsoever (“Liens”), and all of such shares are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof. Neither the Company nor any of its Subsidiaries has or is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase, sale or issuance of any shares of capital stock or any other equity security of any Subsidiary of the Company or any securities representing the right to purchase or otherwise receive any shares of capital stock or any other equity security of any such Subsidiary.

     5.3 Authority; No Violation.

          (a) The Company has full corporate power and corporate authority to execute and deliver this Agreement and, subject to receipt of the Company Required Vote (as hereinafter defined) (to the extent such Company Required Vote is required by applicable law), to consummate the transactions contemplated hereby. The Company Board at a duly held meeting has (i) determined that this Agreement, the Offer and the Merger are in the best interests of the Company and its shareholders and declared this Agreement, the Offer and the Merger to be advisable, (ii) approved the Offer and the Merger, the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and (iii) subject to Section 8.8, recommended that shareholders of the Company adopt this Agreement and, if required by

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applicable law, directed that such matter be submitted for consideration by the Company’s shareholders at the Company Shareholder Meeting (as hereinafter defined). Except for the adoption of this Agreement by the affirmative vote of a majority of the outstanding shares of Company Common Stock entitled to vote in accordance with applicable law, if required (the “Company Required Vote”), no other corporate proceedings on the part of the Company are necessary to approve this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Company and (assuming due authorization, execution and delivery by Parent and Merger Sub) constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforcement may be limited by general principles of equity whether applied in a court of law or a court of equity and by bankruptcy, insolvency and similar laws affecting creditors’ rights and remedies generally (the “Bankruptcy and Equity Exceptions”).

          (b) Neither the execution and delivery of this Agreement by the Company nor the consummation by the Company of the transactions contemplated hereby (including, without limitation, the Offer and the Merger), nor compliance by the Company with any of the terms or provisions hereof, will (i) violate any provision of the Articles of Incorporation or Bylaws of the Company or any of the similar governing documents of any of its Subsidiaries or (ii) assuming that the consents, approvals and filings referred to in Section 5.4 are duly obtained or made, (A) violate any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to the Company or any of its Subsidiaries or any of their respective properties or assets, or (B) violate, conflict with, result in a breach of any provision of, or require redemption or repurchase or otherwise require the purchase or sale of any securities, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation of any Lien upon any of the respective properties or assets of the Company or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any of its Subsidiaries is a party, or by which they or any of their respective properties or assets may be bound or affected, except (in the case of clause (ii) above) for such violations, conflicts, breaches, defaults or other events which, either individually or in the aggregate, would not reasonably be expected to result in a Company Material Adverse Effect.

     5.4 Consents and Approvals. No consents or approvals of, or filings or registrations with, any federal or state court, administrative agency or commission or other governmental authority or instrumentality or self-regulatory organization of competent jurisdiction (each a “Governmental Entity”) or with any third Person are necessary in connection with the execution and delivery by the Company of this Agreement or the consummation by the Company of the Merger and the other transactions contemplated hereby, except for (a) any notices required to be filed under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), (b) the filing with the SEC of a proxy statement in definitive form relating to the Company Shareholder Meeting (the “Proxy Statement”) as well as any other filings required to be made with the SEC pursuant to the Securities Act or the Exchange Act, (c) the filing of the Agreement of Merger and related certificates with the California Secretary pursuant to the CGCL, and (d) consents or approvals of, or filings or registrations with, Governmental

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Entities or third parties, the failure of which to be obtained or made would not be reasonably expected to result in, individually or in the aggregate, a Company Material Adverse Effect.

     5.5 SEC Filings. The Company has filed all forms, reports, statements, certifications and other documents (including all exhibits, amendments and supplements thereto) required to be filed by it with the SEC since January 1, 2004 (collectively, the “Company SEC Reports”). None of the Company’s Subsidiaries is required to file periodic reports with the SEC pursuant to the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder (the “Exchange Act”). Each of the Company SEC Reports, as amended prior to the date of this Agreement, complied as to form in all material respects with the applicable requirements of the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder (the “Securities Act”) and the Exchange Act, each as in effect on the date so filed (or if amended or superseded by a filing prior to the date of this Agreement, then on the date of such subsequent filing). None of the Company SEC Reports contained, when filed or, if amended or supplemented prior to the date hereof, as of the date of such amendment or supplement, any untrue statement of a material fact or omitted to state a material fact required to be stated or incorporated by reference therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company has furnished to Parent a complete and correct copy of any amendments or modifications which have not yet been filed with the SEC but which are required to be filed, to reports, agreements, documents or other instruments which previously had been filed by the Company with the SEC pursuant to the Securities Act or the Exchange Act or any material agreements potentially required to be filed that have not been so filed.

     5.6 Financial Statements.

          (a) Each of the financial statements included (or incorporated by reference) in the Company SEC Reports (including the related notes, where applicable), after giving effect to any restatements made by the Company prior to the date of this Agreement and which have been provided to Parent, fairly present in all material respects (subject, in the case of the unaudited statements, to normal recurring adjustments, none of which would be reasonably expected to result in, individually or in the aggregate, a Company Material Adverse Effect) the results of the consolidated operations and changes in shareholders’ equity and consolidated financial position of the Company and its Subsidiaries for the respective fiscal periods or as of the respective dates therein set forth. Each of such financial statements (including the related notes, where applicable), after giving effect to any restatements made by the Company prior to the date of this Agreement and which have been provided to Parent, complies in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto and each of such financial statements (including the related notes, where applicable) has been prepared in accordance with GAAP, as in effect on the date or for the period with respect to which such principles are applied, in all material respects consistently applied during the periods involved, except in each case as indicated in such statements or in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q. The books and records of the Company and its Subsidiaries have been, and are being, maintained in all material respects in accordance with GAAP and any other applicable legal and accounting requirements and reflect only actual transactions.

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          (b) The records, systems, controls, data and information of the Company and its Subsidiaries are recorded, stored, maintained and operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of the Company or its Subsidiaries or accountants (including all means of access thereto and therefrom), except for any non-exclusive ownership and non-direct control that would not reasonably be expected to have a material adverse effect on the system of internal accounting controls described below in this Section 5.6(b). The Company (i) has established and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to ensure that material information relating to the Company, including its consolidated Subsidiaries, is made known to the chief executive officer and the chief financial officer of the Company by others within those entities and (ii) has disclosed, based on its most recent evaluation prior to the date hereof, to the Company’s outside auditors and the audit committee of the Company Board (A) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting. These disclosures were made in writing by management to the Company’s auditors and audit committee and a copy has previously been made available to Parent.

     5.7 Broker’s Fees. Except for the Company’s engagement of Goldman Sachs & Co., neither the Company nor any of its Subsidiaries has employed any broker or finder or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with any of the transactions contemplated by this Agreement.

     5.8 Absence of Certain Changes or Events. Except as set forth in Section 5.8 of the Company Disclosure Schedule or the Company SEC Reports, since March 31, 2006, the Company and its Subsidiaries have carried on their respective businesses in all material respects in the ordinary course of business and there has not been:

               (i) any change, effect, event, occurrence, state of facts or development that individually or in the aggregate, has had or could reasonably be expected to have a Company Material Adverse Effect;

               (ii) any declaration, setting aside or payment of any dividend or other distribution with respect to any shares of capital stock of the Company, or any repurchase, redemption or other acquisition by the Company or any of its Subsidiaries (other than any wholly-owned Subsidiary) of any outstanding shares of capital stock or other equity or debt securities of, or other ownership interests in, the Company;

               (iii) any split, combination or reclassification of any of its capital stock;

               (iv) any amendment of any provision of the Articles of Incorporation, Bylaws or other governing documents of, or of any material term of any outstanding security issued by, the Company or any of its Subsidiaries (other than any wholly-owned Subsidiary);

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               (v) any incurrence, assumption or guarantee by the Company or any of its Subsidiaries of any indebtedness for borrowed money;

               (vi) any change in any method of accounting or accounting practice by the Company or any of its Subsidiaries, except for any such change required by reason of a change in GAAP and concurred with by the Company’s independent public accountants;

               (vii) issuance of any equity or debt securities of the Company other than pursuant to the Company Stock Plans or Company Options in the ordinary course of business and consistent with past practice;

               (viii) acquisition or disposition of assets material to the Company and its Subsidiaries, except for sales of inventory in the ordinary course of business consistent with past practice, or any acquisition or disposition of capital stock of any third party (other than acquisitions or dispositions of non-controlling equity interests of third parties in the ordinary course of business) or any merger or consolidation with any third party, by the Company or any of its Subsidiaries;

               (ix) any creation or assumption by the Company or any of its Subsidiaries of any Lien on any asset other than in the ordinary course of business consistent with past practice;

               (x) any individual capital expenditure (or series of related capital expenditures) either involving more than $500,000 or outside the ordinary course of business;

               (xi) any material damage, destruction or loss (whether or not covered by insurance) from fire or other casualty to its tangible property;

               (xii) any material increase in the base salary of any officer or employee of the Company;

               (xiii) any adoption, amendment, modification, or termination of any bonus, profit-sharing, incentive, severance or other similar plan for the benefit of any of its directors, officers or employees;

               (xiv) entry by the Company into any joint venture, partnership or similar agreement with any person other than any of its Subsidiaries; or

               (xv) any authorization of, or commitment or agreement to take any of, the foregoing actions except as otherwise permitted by this Agreement.

     5.9 Legal Proceedings.

          (a) Except as set forth in Section 5.9(a) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party to any, and there are no pending or, to the Knowledge of the Company (as defined below), threatened, material legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any nature involving the Company or any of its Subsidiaries.

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“Knowledge of the Company” means the actual knowledge of the directors and executive officers of the Company listed in Section 5.9(a) of the Company Disclosure Schedule, in each case without such individual being obligated to conduct any special inquiry or investigation into the affairs or records of the Company. The directors and executive officers of the Company listed in Section 5.9(a) of the Company Disclosure Schedule shall not be deemed to have knowledge (actual, constructive or otherwise) of any fact, event, condition or occurrence known or deemed to be known by any other person other than as expressly set forth in the foregoing sentence.

          (b) As of the date of this Agreement, except as set forth in Section 5.9(b) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries or any of their businesses or properties are subject to or bound by any injunction, order, judgment, decree or regulatory restriction of any Governmental Entity specifically imposed upon the Company, any of its Subsidiaries or the assets of the Company or any of its Subsidiaries which would reasonably be expected to result in, individually or in the aggregate, a Company Material Adverse Effect.

     5.10 Taxes.

          (a) Except as set forth in Section 5.10(a) of the Company Disclosure Schedule: (i) each of the Company and its Subsidiaries has (A) duly and timely filed (including pursuant to applicable extensions granted without penalty) all material Tax Returns (as hereinafter defined) required to be filed by it, and such Tax Returns are true, correct and complete in all material respects, and (B) paid in full all Taxes (as hereinafter defined) required to have been paid by them on or before the date that the payment of such Taxes were due; (ii) no material deficiencies for any Taxes have been proposed, asserted or assessed in writing against the Company or any of its Subsidiaries which deficiencies have not since been resolved; and (iii) there are no material Liens for Taxes upon the assets of either the Company or its Subsidiaries except for statutory liens for current Taxes not yet due or Liens for Taxes that are being contested in good faith by appropriate proceedings and for which reserves adequate in accordance with GAAP have been provided.

          (b) Except as set forth in Section 5.10(b) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries (i) is or has ever been a member of an “affiliated group” (other than a group the common parent of which is the Company) filing a consolidated tax return (or a group of corporations filing a consolidated, combined or unitary income Tax Return under comparable provisions of state, local or foreign Tax law) for any taxable period; (ii) is a party to or bound by any tax sharing agreement or tax indemnity agreement, arrangement or practice; (iii) has entered into a “listed transaction” within the meaning of Treasury Regulation sections 1.6011-4(b)(2); or (iv) has any liability for Taxes of any Person (other than the Company and its Subsidiaries) arising from the application of Treasury Regulation section 1.1502-6 or any analogous provision of state, local or non-U.S. law.

          (c) No closing agreement pursuant to Section 7121 of the Code (or any similar provision of state, local or non-U.S. law) has been entered into by or with respect to the Company or any of its Subsidiaries.

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          (d) None of the Company or any of its Subsidiaries has been a “distributing corporation” or a “controlled corporation” in any distribution occurring during the last five years in which the parties to such distribution treated the distribution as one to which Section 355 of the Code is applicable.

          (e) All Taxes required to be withheld, collected or deposited by or with respect to the Company and each Subsidiary have been timely withheld, collected or deposited as the case may be, and to the extent required, have been paid to the relevant taxing authority, except for failures to so withhold, collect or deposit that are immaterial, individually and in the aggregate, or for which adequate reserves have been established in accordance with GAAP.

          (f) Neither the Company nor any of its Subsidiaries has granted any waiver of any federal, state, local or non-U.S. statute of limitations with respect to, or granted any extension of a period for the assessment of, any Tax, which waiver or extension has not since expired.

          (g) Neither the Company nor any of its Subsidiaries will be required to include in a taxable period ending after the Effective Time taxable income attributable to income that accrued in a prior taxable period (or portion of a taxable period) but was not recognized for tax purposes in any prior taxable period as a result of (A) an open transaction disposition made on or before the Effective Time, (B) a prepaid amount received on or prior to the Effective Time, (C) the installment method of accounting, (D) the long-term contract method of accounting, (E) the cash method of accounting or (F) any comparable provisions of state, local, domestic or foreign tax law, other than any amounts that are reflected in a reserve for Taxes on the most recent financial statements of the Company included in the Company SEC Reports;

          (h) Neither the Company nor any of its Subsidiaries will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Effective Time as a result of any: (A) change in method of accounting for a taxable period ending on or prior to the Effective Time pursuant to Section 481 of the Code, or otherwise; (B) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Effective Time; or (C) intercompany transaction or excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law), other than any amounts that are reflected in a reserve for Taxes on the most recent financial statements of the Company.

          (i) Neither the Company nor any of its Subsidiaries is a party to any agreement, contract, arrangement or plan that has resulted or could result, separately or in the aggregate, in the payment of (i) any “excess parachute payment” within the meaning of Section 280G of the Code (or any corresponding provision of state, local or foreign Tax law) and (ii) any amount that will not be fully deductible as a result of Section 162(m) of the Code (or any corresponding provision of state, local or foreign Tax law).

          (j) As used herein, “Taxes” shall mean all taxes, charges, levies or other assessments imposed by any United States federal, state, local or

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non-U.S. taxing authority, including income, excise, property, sales, transfer, franchise, payroll, withholding, social security or other similar taxes, including any interest or penalties attributable thereto.

          (k) As used herein, “Tax Return” shall mean any return, report, information return or other document (including any related or supporting information) required to be filed with any taxing authority with respect to Taxes, including all information returns relating to Taxes of third parties, any claims for refunds of Taxes and any amendments or supplements to any of the foregoing.

     5.11 Employee Benefit Plans.

          (a) Section 5.11(a) of the Company Disclosure Schedule sets forth a true and complete list or description of each employee benefit plan, arrangement, policy, program or agreement and any amendments or modifications thereof (including all stock purchase, stock option, stock incentive, severance, employment, change-in-control, health/welfare plans, fringe benefit, bonus, incentive, deferred compensation, pension and other agreements, programs, policies and arrangements, whether formal or informal, oral or written, whether or not subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) that is sponsored by, or maintained or contributed to as of the date of this Agreement by the Company or any of its Subsidiaries and any related funding agreements thereto (collectively, the “Company Benefit Plans”).

          (b) Except as set forth in Section 5.11(b) of the Company Disclosure Schedule, the Company has previously provided or made available to Parent true and complete copies of each of the Company Benefit Plans and each of the following (if applicable): (i) the most recent actuarial valuation report for each Company Benefit Plan, (ii) the most recent determination or opinion letter from the Internal Revenue Service for each Company Benefit Plan that is intended to constitute a qualified plan under Section 401(a) of the Code, (iii) any summary plan description by the Company or its Subsidiaries concerning the extent of the benefits provided under a Company Benefit Plan, and (iv) the most recent Form 5500, including the attached schedules, required to have been filed with the Internal Revenue Service.

          (c) Neither the Company nor any Person treated as a single employer with the Company under Section 414(b), (c), (m) or (o) of the Code or Sections 3(5) or 4001(b)(1) of ERISA maintains or sponsors (or has ever maintained or sponsored) or makes or is required to make (or has ever made contributions) to any Company Benefit Plan that (i) is a “multiemployer plan” as defined in Sections 3(37) of ERISA, (ii) is subject to the funding requirements of Section 412 of the Code or Title IV of ERISA, (iii) provides for post-retirement medical, life insurance or other welfare-type benefits (other than as required by Part 6 of Subtitle B of Title I of ERISA or Section 4980B of the Code or under a similar state law), or (iv) is or was a “welfare benefit fund” as defined under Section 418(e) of the Code or an organization described in Sections 501(c)(9) or 501(c)(20) of the Code.

          (d) The Company Benefit Plans and their related trusts intended to qualify under Sections 401 and 501(a) of the Code are subject to current favorable determination or opinion letters from the IRS and, to the Knowledge of the Company, nothing has occurred that is reasonably

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likely to result in the revocation of such letter, except where the failure to so comply would not reasonably be expected to result in, individually or in the aggregate, a Company Material Adverse Effect.

          (e) The Company Benefit Plans have been maintained and administered in all material respects in accordance with their terms and applicable laws, including, but not limited to, the applicable health care continuation and notice provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) and the applicable requirements of the Health Insurance Portability and Accountability Act of 1956, amended (“HIPAA”), except where the failure to so comply would not reasonably be expected to result in, individually or in the aggregate, a Company Material Adverse Effect.

          (f) There are no suits, actions, disputes, claims (other than routine claims for benefits), arbitrations, administrative or other proceedings pending or, to the Knowledge of the Company, threatened with respect to any Company Benefit Plan or any related trust or other funding medium thereunder or with respect to the Company as the sponsor or fiduciary thereof or with respect to any other fiduciary thereof, which would reasonably be expected to have a Company Material Adverse Effect.

          (g) Neither the Company nor any Person treated as a single employee with the Company under Section 414(b), (c), (m), or (o) of the Code or Section 3(5) or 4001(b)(1) of ERISA is or was a party to a collective bargaining agreement.

     5.12 Compliance with Applicable Law.

          (a) Except as set forth in Section 5.12(a) of the Company Disclosure Schedule, the Company and each of its Subsidiaries holds all licenses, registrations, franchises, permits, orders and authorizations necessary for the lawful conduct of their respective businesses under and pursuant to, and have complied with and are not in violation in any material respect under, any applicable law, statute, order, rule or regulation of any Governmental Entity relating to the Company or any of its Subsidiaries, except where the failure to hold such license, franchise, permit or authorization or such non-compliance or violation would not, individually or in the aggregate, reasonably be expected to result in a Company Material Adverse Effect, and neither the Company nor any of its Subsidiaries has received written notice of any violations of any of the above which, individually or in the aggregate, would reasonably be expected to result in a Company Material Adverse Effect.

          (b) Since the enactment of the Sarbanes-Oxley Act, the Company has been and is in compliance in all material respects with (i) the applicable provisions of the Sarbanes-Oxley Act and (ii) the applicable listing standards of NASDAQ, including those related to corporate governance.

          (c) The Company and each of its Subsidiaries has complied in all material respects with all applicable laws relating to government health care fraud and abuse (including the federal Anti-Kickback Law, 42 U.S.C. §1320a-7b, and the False Claims Act, 31 U.S.C. §3729 et seq. and any regulations related thereto, as well as with any similar state statutes).

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     5.13 Certain Contracts.

          (a) Except as filed as an exhibit to the Company SEC Reports filed prior to the date hereof or except as set forth in Section 5.13(a) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party to or is bound by any contract, arrangement, commitment or understanding (whether written or oral) (i) which is a material contract (as defined in Item 601(b)(10) of Regulation S-K of the SEC) to be performed after the date of this Agreement, (ii) which restricts the rights of the Company or any of its Subsidiaries to compete in any line of business in any geographic area or with any Person, or which requires exclusive referrals of business or requires the Company or any of its Subsidiaries to offer specified products or services to their customers on a priority or exclusive basis, (iii) with or to a labor union or guild (including any collective bargaining agreement), (iv) which relates to the incurrence of indebtedness, any guarantee or the borrowing or lending of money in the principal amount of $1,000,000 or more, (v) which grants any Person a right of first refusal, right of first offer or similar right with respect to any material properties, assets or businesses of the Company or its Subsidiaries, (vi) which involves the purchase or sale of assets with a purchase price of $500,000 or more in any single case or $1,000,000 in all such cases, (vii) which the Company or any of its Subsidiaries has granted to, or obtained from, a third party a license to any Intellectual Property, (viii) pursuant to which any agent, sales representative, distributor or other third party markets or sells any Company Product, (ix) (A) with the Company’s executive officers, (B) with the Company’s other employees involving annual compensation exceeding $125,000, and (C) with any agents or consultants involving annual compensation exceeding $200,000, (x) involves a dollar amount in excess of $1,000,000 or extends for a period of 12 months or more (other than any contract or commitment that is terminable on ninety (90) or fewer days notice without penalty), or (xi) any partnership or joint venture agreement. Each contract, arrangement, commitment or understanding of the type described in this Section 5.13(a), whether or not publicly disclosed in the Company SEC Reports filed prior to the date hereof or set forth in Section 5.13(a) of the Company Disclosure Schedule, is referred to herein as a “Company Contract”, and neither the Company nor any of its Subsidiaries has received written notice of any material violation of a Company Contract by any of the other parties thereto. The Company has made available to Parent all Company Contracts.

          (b) Except as set forth in Section 5.13(b) of the Company Disclosure Schedule, (i) each Company Contract is valid and binding on the Company and in full force and effect (other than due to the ordinary expiration of the term thereof), and, to the Knowledge of the Company, is valid and binding on the other parties thereto, in each case, as enforceability may be limited by the Bankruptcy and Equity Exceptions, (ii) the Company and each of its Subsidiaries has performed all obligations required to be performed by it to date under each Company Contract, and (iii) no event or condition exists which constitutes or, after notice or lapse of time or both, would constitute a default on the part of the Company or any of its Subsidiaries under any such Company Contract, except, in each case, with respect to the foregoing clauses (i) through (iii) as would not reasonably be expected to result in, either individually or in the aggregate, a Company Material Adverse Effect.

     5.14 Undisclosed Liabilities. Except for (a) liabilities that are fully reflected or reserved against on the consolidated balance sheet of the Company included in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, (b) liabilities incurred in

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the ordinary course of business consistent with past practice since March 31, 2006, (c) liabilities arising under the terms of (but not from any breach or default under) any agreement, contract, commitment, license, permit, lease or other instrument or obligation that is either (x) disclosed in the Company Disclosure Schedule or (y) not required to be so disclosed by the terms of this Agreement (and including any of the foregoing types of instruments or obligations that are entered into or obtained after the date of this Agreement, as long such action does not result in a breach of this Agreement), (d) liabilities incurred pursuant to or in connection with this Agreement or the transactions contemplated hereby or (e) liabilities that would not reasonably be expected to result in, individually or in the aggregate, a Company Material Adverse Effect, neither the Company nor any of its Subsidiaries has any liability of any nature whatsoever (whether absolute, accrued or contingent or otherwise and whether due or to become due) that would be required by GAAP to be reflected in the consolidated balance sheet of the Company.

     5.15 Anti-Takeover Provisions. To the Knowledge of the Company, no state takeover statute or similar statute or regulation applies or purports to apply to the Company with respect to the Offer, the Agreement, the Shareholder Agreements, the Merger or any of the transactions contemplated hereby and thereby.

     5.16 Company Information. Neither the Schedule 14D-9 or the Offer Documents will, at the respective times any such documents or any amendments or supplements thereto are filed with the SEC, are first published, sent or given to shareholders or become effective under the Securities Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. The Proxy Statement will not, at the time the Proxy Statement is first mailed to the Company’s shareholders or, at the time of the Company Shareholder Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Schedule 14D-9 and the Proxy Statement (except for such portions thereof as relate only to Parent, Merger Sub or any of their respective Subsidiaries) will comply as to form in all material respects with the requirements of all applicable laws, including the Exchange Act and the rules and regulations thereunder. No representation or warranty is made by the Company with respect to statements made or incorporated by reference therein based on information supplied by Parent or Merger Sub for inclusion or incorporation by reference therein.

     5.17 Title to Property.

          (a) Real Property. Except as disclosed in Section 5.17(a) of the Company Disclosure Schedule, the Company and its Subsidiaries do not own any real property. All real property and fixtures material to the business, operations or financial condition of the Company and its Subsidiaries are in substantially good condition and repair except as would not reasonably be expected to result in, individually or in the aggregate, a Company Material Adverse Effect.

          (b) Personal Property. The Company and its Subsidiaries have good, valid and marketable title to all tangible personal property owned by them, free and clear of all Liens other than Permitted Liens, except where the failure to have such title would not reasonably be expected to result in, either individually or in the aggregate, a Company Material Adverse Effect.

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With respect to personal property used in the business of the Company and its Subsidiaries which is leased rather than owned, neither the Company nor any Subsidiary thereof is in default under the terms of any such lease the loss of which would reasonably be expected to result in, either individually or in the aggregate, a Company Material Adverse Effect.

          (c) Leased Property. All leases of real property and all other leases material to the Company and its Subsidiaries under which the Company or a Subsidiary, as lessee, leases real or personal property are valid and binding in accordance with their respective terms, there is not under such lease any existing default by the Company or such Subsidiary or, to the Knowledge of the Company, the lessors thereunder, or any event which with notice or lapse of time would constitute such a default, and in the case of real estate leases the Company or such Subsidiary quietly enjoys the premises provided for in such lease except, in each case, as would not reasonably be expected to result in, individually or in the aggregate, a Company Material Adverse Effect.

          As used herein, “Permitted Liens” means (i) Liens publicly disclosed in the Company SEC Reports filed prior to the date hereof, (ii) Liens disclosed in Section 5.17 of the Company Disclosure Schedule, (iii) Liens for current Taxes not yet due and payable and other standard exceptions commonly found in title policies in the jurisdiction where the property is located, (iv) such encumbrances and imperfections of title, if any, as do not materially detract from the value of the properties and do not materially interfere with the present or proposed use of such properties or otherwise materially impair such operations, (v) Liens imposed or promulgated by laws with respect to real property and improvements, including zoning regulations, (vi) mechanics’, carriers’, workmen’s, repairmen’s and similar Liens incurred in the ordinary course of business or (vii) Liens that would not reasonably be expected to result in, individually or in the aggregate, a Company Material Adverse Effect.

     5.18 Insurance. The Company and its Subsidiaries are insured with reputable insurers against such risks and in such amounts as the management of the Company reasonably has determined to be prudent in accordance with industry practice (taking into account the cost and availability of such insurance) except as would not reasonably be expected to result in, individually or in the aggregate, a Company Material Adverse Effect. The Company and its Subsidiaries are in compliance with their insurance policies, including any State Self Insurance program, and are not in default under any of the terms thereof, except for any such non-compliance or default that would not reasonably be expected to result in a Company Material Adverse Effect. Each such policy is outstanding and in full force and effect (other than due to the ordinary expiration of the term thereof) and, except as set forth on Section 5.18 of the Company Disclosure Schedule. All premiums and other payments due under any such policy have been paid.

     5.19 Environmental Liability. Except as set forth in Section 5.19 of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries has received any written notice of any legal, administrative, arbitral or other proceedings, claims, actions, causes of action or private environmental investigations or remediation activities or governmental investigations of any nature seeking to impose, or that would reasonably be expected to result in the imposition, on the Company or any of its Subsidiaries of any liability or obligation arising under

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common law standards relating to protection of the environment or human health, or under any local, state or federal environmental statute, regulation or ordinance, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (collectively, “Environmental Laws”), which liability or obligation would reasonably be expected to result in a Company Material Adverse Effect. During or prior to the period of (a) its or any of its Subsidiaries’ ownership or operation of any of their respective current properties, (b) its or any of its Subsidiaries’ participation in the management of any property, or (c) its or any of its Subsidiaries’ holding of a security interest or other interest in any property, there were no releases or threatened releases of hazardous, toxic, radioactive or dangerous materials or other materials regulated under Environmental Laws in, on, under or affecting any such property in violation of any Environmental Laws. Neither the Company nor any of its Subsidiaries is subject to any agreement, order, judgment, decree, letter or memorandum by or with any Governmental Entity or third Person imposing any material liability or obligation pursuant to or under any Environmental Law that would reasonably be expected to result in a Company Material Adverse Effect. The Company and its Subsidiaries are in compliance in all material respects with all Environmental Laws, including possessing all material permits required for its currently conducted operations under applicable Environmental Laws.

     Notwithstanding any other provision of this Agreement to the contrary (including Section 5.12), the representations and warranties of the Company in this Section 5.19 constitute the sole representations and warranties of the Company with respect to any matter (including any liability) relating to Environmental Laws.

     5.20 Intellectual Property.

          (a) Except as, individually or in the aggregate, would not reasonably be expected to result in a Company Material Adverse Effect, Section 5.20(a) of the Company Disclosure Schedule accurately identifies:

               (i) in Section 5.20(a)(i) of the Company Disclosure Schedule: (A) each domain name (“Company Domain Name”) or trademark registration or application for trademark registration patent or patent application, or copyright registration or application for copyright registration (“Company Registered IP”) that is owned by or registered or filed in the name of any of the Company and its Subsidiaries; and (B) the domain registrar (as to Company Domain Names) and jurisdiction (as to Company Registered IP) in which such Company Domain Name or Company Registered IP has been registered or filed; and

               (ii) in Section 5.20(a)(ii) of the Company Disclosure Schedule, each contract material to the operation of the business of the Company or its Subsidiaries as presently conducted pursuant to which any Intellectual Property Rights or Intellectual Property is licensed by or to Company or its Subsidiaries, where the license of such Intellectual Property Rights or Intellectual Property is a material element of such contract (other than software license agreements for any third-party software that is generally available to the public at a cost of less than $50,000 and other than non-exclusive licenses granted by Company or its Subsidiaries in connection with the provision of services in the ordinary course of business).

          (b) The Company has made available to Parent an accurate and complete copy of the standard form of the following documents and

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contracts currently used by Company or its Subsidiaries (and no other standard form used by Company or its Subsidiaries at any time since January 1, 2004, has differed materially from the standard forms made available to Parent): (i) employee agreement or similar contract with employees of the Company or its Subsidiaries containing any assignment or license of Intellectual Property or Intellectual Property Rights or any confidentiality provision; and (ii) consulting or independent contractor agreement or similar contract containing any assignment or license of Intellectual Property or Intellectual Property Rights or any confidentiality provision. To the Knowledge of the Company, all personnel, including employees, agents, consultants and contractors, who have contributed to or participated in the conception or development, or both, of the Intellectual Property on behalf of the Company and all officers and technical employees of the Company either (i) have been a party to “work-for-hire” arrangements or agreements with the Company in accordance with applicable federal and state law that has accorded the Company full, effective, sole, exclusive and original ownership of all tangible and intangible property thereby arising, or (ii) have executed appropriate instruments of assignment in favor of the Company as assignee that have conveyed to the Company effective, sole and exclusive ownership of all tangible and intangible property arising thereby.

          (c) The Company or its Subsidiaries own all right, title and interest to and in the Company Owned IP (other than Intellectual Property Rights or Intellectual Property licensed by the Company, as identified in Section 5.20(a)(ii) of the Company Disclosure Schedule and other than non-exclusive licenses granted by the Company or its Subsidiaries in connection with the provision of services in the ordinary course of business, free and clear of any Liens that would reasonably be expected to materially interfere with the use of such Company Owned IP in providing any services). To the Knowledge of the Company, all patents included in the Company Owned IP are valid and enforceable. To the Knowledge of the Company, none of the information withheld from Parent during due diligence on the basis of attorney-client privilege or work product immunity is materially adverse to the ownership, validity or enforceability of any Company Owned IP. To the Knowledge of the Company, the Intellectual Property owned or licensed by the Company and its Subsidiaries constitutes all of the Intellectual Property necessary to the conduct of the business of the Company and its Subsidiaries.

          (d) Each of the Company and its Subsidiaries has taken reasonable steps to maintain the confidentiality of and otherwise protect and enforce its rights in Company Owned IP that is a trade secret and that is material to the operation of the business of the Company and its Subsidiaries as presently conducted (“Material Trade Secrets”) including: (i) obtaining an appropriate non-disclosure agreement with respect to the disclosure of any Material Trade Secrets of Company or its Subsidiaries to a third party; and (ii) imposing restrictions on unauthorized copying, unauthorized sale, transfer or use in connection with providing a third party with access to such Material Trade Secrets.

          (e) To the Knowledge of the Company, except as set forth on Section 5.20(e) of the Company Disclosure Schedule, neither the execution, delivery or performance of this Agreement nor the consummation of any of the transactions contemplated hereby will result in or give any other Person the right or option to cause, create, impose or declare: (i) a loss of, or Lien on, any Company Owned IP; or (ii) the grant, assignment or transfer to any other Person of any license or other right or interest under, to or in any of the Company Owned IP.

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          (f) To the Knowledge of the Company, except as set forth on Section 5.20(f) of the Company Disclosure Schedule, no Person is infringing, misappropriating or otherwise violating, any Company Owned IP that is material to the operation of the business of the Company and its Subsidiaries as presently conducted. Section 5.20(f) of the Company Disclosure Schedule: (i) accurately identifies (and the Company has provided to Parent an accurate and complete copy of) each letter or other written or electronic communication or correspondence that has been sent or otherwise delivered by or to the Company and its Subsidiaries or any Representative of any of the Company and its Subsidiaries since January 1, 2003 regarding any actual, alleged or suspected infringement or misappropriation of any Company Owned IP; and (ii) provides a brief description of the current status of the matter referred to in such letter, communication or correspondence; provided, however, that the Company is not required to provide the information described in clauses “(i)” and "(ii)” of this sentence for correspondence or other communications that have been sent from time to time by the Company or any of its Subsidiaries to third parties based upon any unauthorized linking to any website of the Company or its Subsidiaries, which correspondence or other communication did not result in any litigation, informal dispute resolution or other Legal Proceeding.

          (g) To the Knowledge of the Company, except as set forth on Section 5.20(g) of the Company Disclosure Schedule, the operations of the Company and its Subsidiaries as presently conducted do not infringe, misappropriate or otherwise violate any Intellectual Property Right of any other Person.

          (h) Except as set forth on Section 5.20(h) of the Company Disclosure Schedule, no claim or Legal Proceeding with respect to infringement, misappropriation or violation of any Intellectual Property Right is or, since January 1, 2004, has been pending or, to the Knowledge of the Company, threatened against any Company or its Subsidiaries.

          (i) To the Knowledge of the Company, except as set forth on Section 5.20(i) of the Company Disclosure Schedule, since January 1, 2004, none of the Company or its Subsidiaries has received any written notice or other written communication relating to any actual, alleged or suspected infringement, misappropriation or violation of any Intellectual Property Right of another Person by any of the Company or its Subsidiaries.

          (j) To the Knowledge of the Company, no Company Source Code has been delivered, licensed or made available to any escrow agent or other Person (other than employees of the Company and its Subsidiaries). None of the Company or its Subsidiaries has any duty or obligation (whether present, contingent or otherwise) to deliver, license or make available any Company Source Code to any escrow agent or other Person. Section 5.20(j) of the Company Disclosure Schedule identifies each contract pursuant to which the Company or its Subsidiaries is or may become obligated (with or without the passage of time, the occurrence of certain events or otherwise) to provide Company Source Code to any Person.

     As used herein “Company Owned IP” shall mean all Intellectual Property Rights and Intellectual Property with respect to which any of the Company or its Subsidiaries has the entire ownership interest.

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     As used herein “Company Source Code” shall mean any source code, or any portion, aspect or segment of any source code, relating to any Intellectual Property owned by or licensed to any of the Company or its Subsidiaries or otherwise used by any of the Company or its Subsidiaries.

     As used herein “Intellectual Property” shall mean algorithms, apparatus, databases, data collections, diagrams, formulae, inventions (whether or not patentable), know–how, logos, marks (including brand names, product names, logos, and slogans), methods, processes, proprietary information, protocols, schematics, specifications, software, software code (in any form, including source code and executable or object code), techniques, user interfaces, URLs, web sites, works of authorship and other forms of technology (whether or not embodied in any tangible form and including all tangible embodiments of the foregoing, such as instruction manuals, laboratory notebooks, prototypes, samples, studies and summaries).

     As used herein “Intellectual Property Rights” shall mean all rights of the following types, which may exist or be created under the laws of any jurisdiction in the world: (a) rights associated with works of authorship, including exclusive exploitation rights, copyrights and moral rights; (b) trademark, trade name and domain name rights and similar rights; (c) trade secret rights; (d) patent and industrial property rights; (e) other proprietary rights in Intellectual Property; and (f) rights in or relating to registrations, renewals, extensions, combinations, divisions and reissues of, and applications for, any of the rights referred to in clauses “(a)” through “(e)” above.

     As used herein “Legal Proceeding” shall mean any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), hearing, inquiry, audit, examination or investigation commenced, brought, conducted or heard by or before, or otherwise involving, any court or other Governmental Entity or any arbitrator or arbitration panel.

     5.21 Labor Matters. Neither the Company nor any of its Subsidiaries is a party to or is bound by any collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization, nor is the Company or any of its Subsidiaries the subject of a proceeding asserting that it or any such Subsidiary has committed an unfair labor practice (within the meaning of the National Labor Relations Act) or seeking to compel the Company or any such Subsidiary to bargain with any labor organization as to wages or conditions of employment, nor is there any strike or other material labor dispute involving it or any of its Subsidiaries pending or, to the Knowledge of the Company, threatened, nor, to the Knowledge of the Company, is there any activity involving its or any of its Subsidiaries’ employees seeking to certify a collective bargaining unit or engaging in other organizational activity.

     5.22 Interested Party Transactions. Since January 1, 2004, except as publicly disclosed in the Company SEC Reports or Section 5.22 of the Company Disclosure Schedule: (a) no event has occurred that would be required to be reported by the Company pursuant to Item 404 of Regulation S-K promulgated by the SEC; and (b) there are no existing contracts, agreements, business dealings, arrangements or other understandings between the Company or any of its Subsidiaries and any Related Party. There are no assets of any Related Party that are used in

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or necessary to the conduct of the business of the Company or any of its Subsidiaries. For purposes of this Agreement, “Related Party” shall mean any officer, director or beneficial owner of more than five percent (5%) of the outstanding voting securities of the Company or any of its Subsidiaries (or any entity of which such person is an officer, director or beneficial owner of more than five percent (5%) of such entity’s outstanding voting securities).

     5.23 FDA and Regulatory Matters. To the extent any product produced, manufactured, marketed or distributed at any time by the Company or any of its Subsidiaries (“Company Product”) is being marketed in the United States or internationally, the Company has obtained all necessary approvals of the U.S. Food and Drug Administration (the “FDA”) and any other Governmental Entity and is in compliance in all material respects with applicable laws relating to the manufacturing, labeling, marketing and selling of medical devices. There have been no recalls, field notifications or seizures ordered or adverse regulatory actions taken or, to the Company’s Knowledge, threatened by the FDA or any other Governmental Entity with respect to any of the Company Products, including any facilities where any Company Products are produced, processed, packaged or stored. All filings with and submissions to the FDA and any other Governmental Entity made by the Company with regard to the Company Products were true, accurate and complete in all material respects as of the date made, and, to the extent required to be updated, as so updated remain true, accurate and complete in all material respects as of the date hereof, and do not materially misstate any of the statements or information included therein, or omit to state a material fact necessary to make the statements therein not misleading.

     5.24 Government Inspections. The Company (i) is not a party to a Corporate Integrity Agreement with the Office of the Inspector General of the Department of Health and Human Services, (ii) has no reporting obligations pursuant to any settlement agreement entered into with any governmental body, (iii) to the Company’s Knowledge, has not been the subject of any Government Program investigation conducted by any governmental body, (iv) has not been a defendant in any qui tam/False Claims Act litigation (other than by reason of an unsealed complaint of which the Company has no Knowledge), and (v) has not been served with or received any search warrant, subpoena, civil investigation demand, contact letter, or to the Company’s Knowledge, telephone or personal contact by or from any Governmental Entity relating to any of the matters referred to in clauses (i) through (v) above.

     5.25 No Other Representations or Warranties. Except for the representations and warranties expressly contained in this Section 5, neither the Company nor any other Person makes any other express or implied representation or warranty with respect to the Company, the Company’s Subsidiaries or the transactions contemplated by this Agreement, and the Company disclaims any other representations or warranties, whether made by the Company or any of its Affiliates, officers, directors, employees, agents or representatives. Except for the representations and warranties expressly contained in this Section 5, the Company hereby disclaims all liability and responsibility for any representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to Parent, Merger Sub or any of their Affiliates or representatives (including any opinion, information, projection, or advice that may have been or may be provided to Parent by any director, officer, employee, agent, consultant, or representative of the Company or any of its Affiliates). Without limiting the generality of the

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foregoing, and for the avoidance of doubt, neither the Company nor any other Person makes any representation or warranty with respect to the performance of the Company’s new GreenLight HPS™ technology or any of the Company’s other new urology products that were introduced at the American Urological Association annual meeting in late May 2006 (collectively, the “New Product Introductions”), the attractiveness of the New Product Introductions to, or the rate of adoption of the New Product Introductions by, current and new customers, the effect of the New Product Introductions on sales of the Company’s other product offerings, the Company’s ability to ramp up production of the New Product Introductions to meet anticipated demand, the Company’s ability to compete with similar product offerings and other therapies for the treatment of BPH, or the impact on sales and pricing of the New Product Introductions and the Company’s other product offerings of possible reductions in private and public payer reimbursement levels for the PVP procedure.

6. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

     Parent and Merger Sub hereby represent and warrant to the Company as follows:

     6.1 Corporate Organization. Each of Parent and Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation. Each of Parent and Merger Sub has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted, and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business currently conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified would not reasonably be expected to result in a Parent Material Adverse Effect. The copies of the charter documents of Parent and Merger Sub which have previously been made available to the Company are true, complete and correct copies of such documents as in effect as of the date of this Agreement. As used in this Agreement, a “Parent Material Adverse Effect” means a material adverse effect on the ability of Parent or Merger Sub to consummate the transactions contemplated by this Agreement in a timely manner or otherwise prevent or materially delay Parent or Merger Sub from performing any of its material obligations under this Agreement.

     6.2 Authority; No Violation.

          (a) Each of Parent and Merger Sub has full corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (including the Offer and the Merger) have been duly and validly approved by the Board of Directors of Parent and Merger Sub and no other corporate proceedings on the part of Parent or Merger Sub are necessary to approve this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by each of Parent and Merger Sub and (assuming due authorization, execution and delivery by the Company) constitutes a valid and binding obligation of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms, except as enforcement may be limited by the Bankruptcy and Equity Exceptions.

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          (b) Neither the execution and delivery of this Agreement by Parent or Merger Sub, nor the consummation by Parent or Merger Sub of the transactions contemplated hereby (including the Offer and the Merger), nor compliance by Parent or Merger Sub with any of the terms or provisions hereof, will (i) violate any provision of charter documents of Parent or Merger Sub or (ii) assuming that the consents, approvals and filings referred to in Section 6.3 are duly obtained or made, (A) violate any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to Parent, Merger Sub or any of their respective Subsidiaries or any of their respective properties or assets, or (B) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, or require redemption or repurchase or otherwise require the purchase or sale of any securities, constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation of any Lien upon any of the respective properties or assets of Parent, Merger Sub or any of their respective Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which Parent, Merger Sub or any of their respective Subsidiaries is a party, or by which they or any of their respective properties or assets may be bound or affected, except (in the case of clause (ii) above) for such violations, conflicts, breaches, defaults or other events which either individually or in the aggregate would not reasonably be expected to result in a Parent Material Adverse Effect.

     6.3 Consents and Approvals. No consents or approvals of, or filings or registrations with, any Governmental Entity or any third Person are necessary in connection with (a) the execution and delivery by Parent or Merger Sub of this Agreement or (b) the consummation by Parent or Merger Sub of the Offer or the Merger and the other transactions contemplated hereby, except for (i) any notices required to be filed under the HSR Act, (ii) the filing of the Articles of Merger and related certificates with the California Secretary pursuant to the CGCL, (iii) any notices or filing requirements under the Exchange Act and (iv) consents or approvals of, or filings or registrations with, Governmental Entities or third parties the failure of which to be obtained would not be reasonably expected to result in, individually or in the aggregate, a Parent Material Adverse Effect.

     6.4 Broker’s Fees. Except as set forth in Schedule 6.4, neither Parent, Merger Sub nor any of their respective Subsidiaries has employed any broker or finder or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with any of the transactions contemplated by this Agreement.

     6.5 Legal Proceedings.

          (a) Neither Parent, Merger Sub nor any of their respective Subsidiaries is a party to any, and there are no pending or, to the Knowledge of Parent, threatened, material legal, administrative, arbitral or other material proceedings, claims, actions or governmental or regulatory investigations of any nature challenging the validity or propriety of the transactions contemplated by this Agreement. As used herein, “to the Knowledge of Parent” means the actual knowledge of the officers of the Parent listed in Schedule 6.5(a), in each case without such individual being obligated to conduct any special inquiry or investigation into the affairs or records of the Company. The officers of the Parent listed in

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Schedule 6.5(a) shall not be deemed to have knowledge (actual, constructive or otherwise) of any fact, event, condition or occurrence known or deemed to be known by any other person other than as expressly set forth in the foregoing sentence.

          (b) There is no injunction, order, judgment, decree or regulatory restriction of any Governmental Entity specifically imposed upon Parent, Merger Sub or any of their respective Subsidiaries or the assets of Parent, Merger Sub or any of their respective Subsidiaries which has resulted in or would reasonably be expected to result in, individually or in the aggregate, a Parent Material Adverse Effect.

     6.6 Financial Capability. Parent, through its wholly owned subsidiary American Medical Systems, Inc. (“AMS”), will have available at the consummation of the Offer sufficient immediately available funds through cash on hand or binding credit facility commitments from reputable lenders and financial institutions for borrowings of up to $745,000,000 in funds (the “Commitments”), true and complete copies of which have been furnished to the Company, to enable Merger Sub to perform all of its obligations under this Agreement, to consummate the Offer and the Merger and to pay in full all fees and expenses payable by Parent in connection with this Agreement and the transactions contemplated hereby. Each of the Commitments, in the form so delivered, is a legal, valid and binding obligation of AMS and, to the Knowledge of Parent or Merger Sub, the other parties thereto. No event has occurred which, with or without notice, lapse of time or both, would constitute a default or breach on the part of AMS, Parent or Merger Sub under any term or condition of the Commitments. Neither Parent nor Merger Sub has any reason to believe that AMS, Parent and Merger Sub will be unable to satisfy on a timely basis any term or condition of closing to be satisfied by it contained in the Commitments. AMS, Parent or Merger Sub will pay in full any and all commitment fees or other fees required by the Commitments prior to the end of the first Business Day following the date of this Agreement. Without limiting the generality of the foregoing, Parent’s ability to consummate the transactions contemplated hereby is not contingent on Parent’s ability to complete any public offering or private placement of equity or debt securities or to obtain any other type of financing prior to consummating the Offer and the Merger.

     6.7 Parent Information. Neither the Offer Documents nor any of the information supplied or to be supplied by Parent or its Subsidiaries or representatives for inclusion or incorporation by reference in the Schedule 14D-9 or the Proxy Statement will, at the respective times any such documents or any amendments or supplements thereto are filed with the SEC, are first published, sent or given to shareholders or become effective under the Securities Act or, in the case of the Proxy Statement, at the time of the Company Shareholder Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. The Offer Documents will comply as to form in all material respects with the requirements of all applicable laws, including the Securities Act and the Exchange Act, as applicable, and the rules and regulations thereunder. No representation or warranty is made by Parent or Merger Sub with respect to statements made or incorporated by reference therein based on information supplied by the Company for inclusion or incorporation by reference therein.

     6.8 No Business Activities by Merger Sub. All of the outstanding capital stock of Merger Sub is owned by AMS and all of the outstanding

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capital stock of AMS is owned by Parent. Merger Sub is not a party to any contract and has not conducted any activities other than in connection with the organization of Merger Sub, the negotiation and execution of this Agreement and the consummation of the transactions contemplated hereby. Merger Sub has no Subsidiaries.

     6.9 Ownership of Company Common Stock; No Other Agreements. Neither Parent, Merger Sub nor any of their respective Subsidiaries or, to the Knowledge of Parent, any of their respective Affiliates or associates (as such term is defined under the Exchange Act) (a) beneficially owns, directly or indirectly, or (b) is a party to any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of, in case of either clause (a) or (b), any Company Common Stock, in each case, except in accordance with this Agreement, including the Offer and the Merger. Neither Parent, Merger Sub nor any of their respective Subsidiaries or, to the Knowledge of Parent, any of their respective Affiliates or associates (as such term is defined under the Exchange Act) has entered into any contract or agreement with any officer or director of the Company in connection with the transactions contemplated by this Agreement.

     6.10 Acknowledgement of Parent. Parent acknowledges and agrees that it has conducted its own independent review and analysis of the business, assets, condition and operations of the Company and its Subsidiaries. In entering into this Agreement, Parent has relied solely upon its own investigation and analysis and the representations and warranties, covenants and agreements of the Company contained in this Agreement and Parent (a) acknowledges that, other than as set forth in this Agreement, none of the Company nor any of its respective directors, officers, employees, Affiliates, agents or representatives makes or has made any representation or warranty, either express or implied, as to the accuracy or completeness of any of the information provided or made available to Parent or its agents or representatives prior to the execution of this Agreement, (b) agrees, to the fullest extent permitted by law, that none of the Company nor any of its respective directors, officers, employees, Affiliates, agents or representatives shall have any liability or responsibility whatsoever to Parent on any basis (including in contract, tort or otherwise) based upon any information provided or made available, or statements made, to Parent prior to the execution of this Agreement, and (c) acknowledges that to the Knowledge of Parent, none of the representations or warranties of the Company set forth in Section 5 of this Agreement are untrue or inaccurate.

7. COVENANTS RELATING TO CONDUCT OF BUSINESS

     7.1 Conduct of Business Prior to the Effective Time. Except as expressly contemplated or permitted by this Agreement, or as required by applicable law, rule or regulation, during the period from the date of this Agreement to the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, conduct its business in the ordinary course.

     7.2 Company Forbearances. Without limiting the generality of Section 7.1, except as set forth in Section 7.2 of the Company Disclosure Schedule, as expressly contemplated or permitted by this Agreement, or as required by applicable law, rule or regulation, or by any

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Governmental Entity, during the period from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed); provided, however, that consent of Parent shall be deemed to have been given if Parent does not object within five (5) Business Days from the date on which request for such consent is provided by the Company to Parent:

          (a) (i) adjust, split, combine or reclassify its capital stock, (ii) set any record or payment dates for the payment of any dividends or distributions on its capital stock or make, declare or pay any dividend or make any other distribution on any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock, except that a wholly owned Subsidiary of the Company may declare and pay dividends to its parent and other wholly owned Subsidiaries of the Company, (iii) directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock (except pursuant to the exercise of stock options outstanding as of the date hereof or permitted to be issued under this Section 7.2 or pursuant to the surrender of shares to the Company or the withholding of shares by the Company to cover tax withholding obligations under the Company Stock Plans), or (iv) grant any stock appreciation rights or grant any Person any right to acquire any shares of its capital stock, or issue or commit to issue any additional shares of capital stock (except pursuant to the exercise of stock options outstanding as of the date hereof or permitted to be issued under this Section 7.2) any securities convertible into or exercisable for, or any rights, warrants or options to acquire, any additional shares of capital stock;

          (b) sell, transfer, mortgage, encumber or otherwise dispose of any of its assets or properties to any Person (other than a direct wholly owned Subsidiary), by merger, consolidation, asset sale or other business combination (including formation of a joint venture) or cancel, release or assign any indebtedness to any such Person or any claims held by any such Person, in each case, except (i) in the ordinary course of business consistent with past practice, including sales of repossessed assets, (ii) dispositions of obsolete or worthless assets, (iii) sales of loans, receivables and other assets in the ordinary course of business consistent with past practice and (iv) sales of immaterial assets which involve the sale of assets with a purchase price of $500,000 or less in any single case or $1,000,000 in all such cases;

          (c) make any acquisition, by purchase or other acquisition of stock or other equity interests, by merger, consolidation, asset purchase or other business combination, or by contributions to capital; or make any material purchases of any property or assets, in or from any other Person other than a wholly owned Subsidiary of the Company, except (i) as expressly required by the terms of any contracts or agreements in force at the date of this Agreement and set out in Section 7.2(c) of the Company Disclosure Schedule, (ii) as otherwise permitted by this Section 7.2, and (iii) other acquisitions in the ordinary course of business consistent with past practice and, in any case, involving consideration in an aggregate amount not in excess of $500,000;

          (d) enter into, renew, extend, amend or terminate any contract, lease or agreement that is or would be a Company Contract;

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          (e) other than general salary increases, including in connection with promotions, made in the ordinary course of business consistent with past practice, for employees, directors or independent contractors generally or as required by any agreement in effect on the date hereof (true and correct copies of which have been delivered to Parent prior to the date of this Agreement), (i) increase, or commit to increase, in any material respect the compensation or severance payable to any of its employees, directors or independent contractors, (ii) pay any severance, annual incentive payment or benefit in the form of a welfare benefit or discretionary pension or retirement allowance contribution to any employees, directors or independent contractors not required by any existing plan or agreement identified in Section 5.11(a) of the Company Disclosure Schedule or any agreement in effect on the date hereof (true and correct copies of which have been delivered to Parent prior to the date of this Agreement), in any case in this clause (ii) above other than in the ordinary course of business consistent with past practice (including in terms of the amount of such payments on a per person basis, levels of benefits provided, timing of payments, and selection of and eligibility requirements for the applicable recipients), which does not otherwise materially increase the aggregate cost to the Company of paying all such payments and benefits during the period in which this Section 7.2(e) applies, from the aggregate cost to the Company of paying all such payments and benefits during the same period of time in the immediately preceding calendar year, or (iii) except as may be required, or advisable, to comply with applicable law, amend, establish or enter into any pension, retirement, profit-sharing, severance, retention or welfare benefit plan or agreement or incentive or employment, agreement with or for the benefit of any employee, director or independent contractor or accelerate the vesting of any stock options or other stock-based compensation;

          (f) amend its Articles of Incorporation, Bylaws or similar governing documents;

          (g) introduce any material new products or services or any material new sales compensation or incentive programs or arrangements (except those the material terms of which have been fully disclosed in writing to Parent prior to the date hereof);

          (h) enter into any new material line of business or change its lending, investment, risk and asset-liability management and other material operating policies in any material respect;

          (i) incur any indebtedness for borrowed money, issue any debt securities or assume, guarantee or endorse or otherwise become responsible for the obligations of another Person, except in the ordinary course of business consistent with past practice;

          (j) make or change any material Tax election or settle or compromise any material Tax liability of the Company or any of its Subsidiaries;

          (k) make any material changes in its accounting methods or method of Tax accounting, practices or policies, except as may be required under applicable law, rule, regulation or GAAP;

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          (l) except as permitted pursuant to Section 8.8, take any action that is intended or may reasonably be expected to result in any of the conditions to the Merger set forth in Section 9 not being satisfied;

          (m) institute, settle or compromise any claim, action, suit or proceeding pending or threatened by or against it, at law or in equity or before any Governmental Entity or any non-governmental self-regulatory agency; or

          (n) agree to, or make any commitment to, take any of the actions prohibited by this Section 7.2.

     7.3 No Fundamental Parent Changes. Except as expressly contemplated or permitted by this Agreement or as required by applicable law, rule or regulation, during the period from the date of this Agreement to the Effective Time, neither Parent nor Merger Sub shall, without the prior written consent of the Company (which consent shall not be unreasonably withheld), (a) take any action that is intended or may reasonably be expected to result in any of the Offer Conditions set forth in Annex I or any of the conditions to the Merger set forth in Section 9 not being satisfied, (b) take any action or fail to take any action which would reasonably be expected to materially and adversely impair or delay consummation of the transactions contemplated hereby beyond the time period contemplated by this Agreement or (c) agree to, or make any commitment to, take any of the actions prohibited by this Section 7.3.

8. ADDITIONAL AGREEMENTS

     8.1 Proxy Statement; Other Filings.

          (a) If approval of the Company’s shareholders is required by applicable law in order to consummate the Merger other than pursuant to Section 1110 of the CGCL, within ten (10) Business Days of a request to do so by Parent, (a) the Company (under the direction of the Continuing Directors) shall prepare and file with the SEC the preliminary Proxy Statement, and (b) each of the Company (under the direction of the Continuing Directors) and Parent shall, or shall cause their respective Affiliates to, prepare and file with the SEC any other filings that are required to be filed by such party with the SEC (“Other Filings”) in connection with the transactions contemplated hereby. Each of the Company and Parent shall furnish all information concerning itself and its Affiliates that is required to be included in the Proxy Statement or, to the extent applicable, the Other Filings, or that is customarily included in proxy statements or other filings prepared in connection with transactions of the type contemplated by this Agreement. Each of the Company and Parent shall use its commercially reasonable efforts to respond as promptly as practicable to any comments of the SEC with respect to the Proxy Statement or the Other Filings, and the Company shall use its commercially reasonable efforts to cause the definitive Proxy Statement to be mailed to the Company’s shareholders as promptly as reasonably practicable after the filing of such definitive Proxy Statement with the SEC. Each party shall promptly notify the other parties upon the receipt of any comments from the SEC or its staff or any request from the SEC or its staff for amendments or supplements to the Proxy Statement or the Other Filings and shall provide the other party with copies of all correspondence between it and its Representatives, on the one hand, and the SEC and its staff, on the other hand relating to the Proxy Statement or the Other Filings. If at any time prior to the

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Company Shareholder Meeting, any information relating to the Company, Merger Sub, Parent or any of their respective Affiliates, officers or directors, should be discovered by the Company or Parent which should be set forth in an amendment or supplement to the Proxy Statement or the Other Filings, so that the Proxy Statement or the Other Filings shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, the party which discovers such information shall promptly notify the other parties, and an appropriate amendment or supplement describing such information shall be filed with the SEC and, to the extent required by applicable law, disseminated to the shareholders of the Company. Notwithstanding anything to the contrary stated above, prior to filing or mailing the Proxy Statement or filing the Other Filings (or, in each case, any amendment or supplement thereto) or responding to any comments of the SEC with respect thereto, the party responsible for filing or mailing such document shall provide the other party a reasonable opportunity to review and comment on such document or response.

          (b) Subject to the other provisions of this Agreement, the parties hereto shall cooperate with each other and use commercially reasonable efforts to promptly prepare and file all necessary documentation, to effect all applications, notices, petitions and filings, to obtain as promptly as practicable all material permits, consents, approvals and authorizations of all third parties and Governmental Entities which are necessary or advisable to consummate the transactions contemplated by this Agreement (including the Offer and the Merger) and to comply with the terms and conditions of all such permits, consents, approvals and authorizations of all such third parties and Governmental Entities.

          (c) Parent and the Company shall, upon request, furnish each other with all information concerning themselves, their Subsidiaries, directors, officers and shareholders and such other matters as may be reasonably necessary or advisable in connection with any statement, filing, notice or application made by or on behalf of Parent, the Company or any of their respective Subsidiaries to any Governmental Entity in connection with the Offer and the Merger and the other transactions contemplated by this Agreement.

          (d) Nothing in this Section 8.1 shall be deemed to prevent the Company or the Company Board from taking any action they are permitted or required to take under, and in compliance with, Section 8.8 or are required to take under applicable law.

     8.2 Access to Information.

          (a) Upon reasonable prior notice and subject to applicable law, the Company shall, and shall cause each of its Subsidiaries to, afford to the officers, employees, accountants, counsel and other representatives of Parent access, during normal business hours during the period prior to the Effective Time, to all its properties, books, contracts, commitments and records, and to its officers, employees, accountants, counsel and other representatives, in each case in a manner not unreasonably disruptive to the operation of the business of the Company and its Subsidiaries, and, during such period, the Company shall, and shall cause its Subsidiaries to, make available to Parent (i) a copy of each report, schedule, registration statement and other document filed or received by it during such period pursuant to the requirements of federal securities

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laws or federal or state lending laws (other than reports or documents which the Company is not permitted to disclose under applicable law) and (ii) all other information concerning its business, properties and personnel as Parent may reasonably request. At the request of Parent, the Company shall comply with its obligations under the preceding sentence by providing electronic access to such documents and information on the online data room established by the Company prior to the date hereof. Neither the Company nor any of its Subsidiaries shall be required to provide access to or to disclose information where such access or disclosure would (A) jeopardize the attorney-client privilege of the institution in possession or control of such information, (B) contravene any law, rule, regulation, order, judgment, decree, fiduciary duty or binding agreement entered into prior to the date of this Agreement in the ordinary course of business consistent with past practice, or (C) be adverse to the interests of the Company or any of its Subsidiaries in any pending or threatened litigation between the parties hereto over the terms of this Agreement.

          (b) All information and materials furnished pursuant to this Agreement shall be subject to the provisions of the Confidentiality Agreement, dated February 16, 2006, between Parent and the Company (the “Confidentiality Agreement”). The Company makes no representation or warranty as to the accuracy of any information provided pursuant to Section 8.2(a), and neither Parent nor Merger Sub may rely on the accuracy of any such information, in each case other than as expressly set forth in the Company’s representations and warranties contained in Section 5.

     8.3 Merger With Shareholder Meeting. If approval of the Company’s shareholders is required by applicable law in order to consummate the Merger other than pursuant to Section 1110 of the CGCL, the Company (under the direction of the Continuing Directors) shall duly call, give notice of, convene and hold a special meeting of its shareholders (the “Company Shareholder Meeting”) for the purpose of voting upon the approval of this Agreement. Subject to Section 8.8, the Company Board shall make the Company Recommendation and shall include such recommendation in the Proxy Statement. Subject to Section 8.8, the Company will use commercially reasonable efforts to solicit from its shareholders proxies in favor of the approval of this Agreement and will take all other action reasonably necessary or advisable to secure the vote or consent of its shareholders required by the rules of NASDAQ or applicable law to obtain such approval.

     8.4 Merger Without Shareholder Meeting. In the event that Merger Sub shall acquire at least ninety percent (90%) of the Fully Diluted Shares pursuant to the Offer or otherwise, each of the parties hereto shall take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after such acquisition, without the Company Shareholder Meeting, in accordance with Section 1110 of the CGCL.

     8.5 Further Actions.

          (a) Subject to the terms and conditions of this Agreement, each of Parent, Merger Sub and the Company shall, and shall cause their respective Subsidiaries to, use their commercially reasonable efforts (i) to take, or cause to be taken, all actions necessary, proper or advisable to comply promptly with all legal requirements which may be imposed on such party or its Subsidiaries with respect to the Offer and the Merger and, subject to the conditions set forth in Section 9 hereof, to consummate the transactions contemplated by this Agreement, (ii) to

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resolve any instituted or pending action or proceeding by any Governmental Entity of the types described in paragraph (a) of Annex I to enable such Offer Conditions to be satisfied, and (iii) to obtain (and to cooperate with the other party to obtain) any consent, authorization, order or approval of, or any exemption by, any Governmental Entity and any other third Person which is required to be obtained by the Company, Merger Sub or Parent or any of their respective Subsidiaries in connection with the Offer and the Merger and the other transactions contemplated by this Agreement. Without limiting the generality of the foregoing, each party shall, within ten (10) Business Days after the execution of this Agreement, file all necessary documentation required to obtain all requisite approvals or termination of applicable waiting periods for the transactions contemplated hereby under the HSR Act.

          (b) Notwithstanding any other provision of this Agreement to the contrary, none of Parent, any of its Subsidiaries or the Surviving Company, will be required (and the Company will not, without the prior written consent of the Parent, agree, but will, if so directed by the Parent, agree, effective after the Effective Time) to hold separate or divest any of their respective assets or operations or enter into any consent decree or licensing or other arrangement with respect to any of their assets or operations or to otherwise take or commit to take any action that limits its freedom of action with respect to, or its ability to retain as of and after the Effective Time, any businesses or assets of the Company, the Parent or any of their respective Affiliates.

          (c) Nothing in this Section 8.5 shall be deemed to prevent the Company or the Company Board from taking any action they are permitted or required to take under, and in compliance with, Section 8.8 or are required to take under applicable law.

     8.6 Employees; Employee Benefit Plans.

          (a) Parent shall, or shall cause the Surviving Company and its Subsidiaries to, (i) give those employees who are, as of the Effective Time, employed by the Company and its Subsidiaries (the “Continuing Employees”) full credit for purposes of eligibility, vesting and benefit accruals under any employee benefit plans or arrangements maintained by Parent, the Surviving Company or any Subsidiary of Parent or the Surviving Company (collectively, the “Parent Plans”) for such Continuing Employees’ service with the Company or any of its Subsidiaries (or any predecessor entity) to the same extent recognized by the Company and its Subsidiaries; (ii) waive all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Continuing Employees under any Parent Plan that is a welfare benefit plan that such employees may be eligible to participate in after the Effective Time; (iii) provide credit under any such welfare plan for any co-payments, deductibles and out-of-pocket expenditures for the remainder of the coverage period during which any transfer of coverage occurs; provided, however, that no such service shall be recognized to the extent such recognition would result in the duplication of benefits; and (iv) honor in accordance with their terms all employee benefit plans or arrangements maintained by the Company immediately prior to the Effective Time.

          (b) As soon as administratively practicable after the Effective Time but no later than December 31, 2006, and subject to the immediately following sentence, Parent shall, or shall cause the Surviving Company and its Subsidiaries to, provide to the Continuing Employees

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compensation and benefit arrangements that are no less favorable in the aggregate than the compensation and benefit arrangements that are provided to similarly situated employees of Parent. As soon as practicable after the Effective Time, Parent shall, or shall cause the Surviving Company and its Subsidiaries to, cause the Continuing Employees to commence participation in such Parent Plans as are provided to similarly situated employees of Parent. From and after the Effective Time, Parent and the Surviving Company shall keep in full force and effect, and comply with the terms and conditions of, any agreement in effect as of the date of this Agreement between or among the Company or any of its Subsidiaries and any of its or their employees relating to severance pay or similar benefits.

          (c) The provisions of this Section 8.6 are for the sole benefit of the parties to this Agreement and nothing herein, expressed or implied, is intended or shall be construed to confer upon or give to any Person (including for the avoidance of doubt any Continuing Employees, present or former employees or directors, consultants or independent contractors of the Company or any of its Subsidiaries, Parent or any of its Subsidiaries, or on or after the Effective Time, the Surviving Company or any of its Subsidiaries), other than the parties hereto and their respective permitted successors and assigns, any legal or equitable or other rights or remedies (with respect to the matters provided for in this Section 8.6) under or by reason of any provision of this Agreement. Nothing contained in this Section 8.6 or elsewhere in the Agreement shall be construed to prevent, from and after the Effective Time, the termination of employment of any individual Continuing Employee or, subject to the provisions of Section 8.6(a), any change in the employee benefits available to any Continuing Employee or the amendment or termination of any particular Plan in accordance with its terms.

          (d) The Company shall, prior to the Effective Time, take all requisite action necessary to terminate the Company’s 401(k) Savings and Investment Plan, including notifying the participants that the 401(k) Savings and Investment Plan has been terminated; provided, that immediately following the Effective Time all Continuing Employees are permitted to participate in Parent’s 401(k) Savings and Investment Plan.

     8.7 Indemnification; Directors’ and Officers’ Insurance.

          (a) From and after the Effective Time, each of Parent and the Surviving Company shall jointly and severally: (i) indemnify and hold harmless each individual who served as a director or officer of the Company or its Subsidiaries prior to the Effective Time (collectively, the “Indemnified Parties”) to the fullest extent authorized or permitted by California law, as now or hereafter in effect, in connection with any Claim (as defined below) and any judgments, fines (including excise taxes), penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such judgments, fines, penalties or amounts paid in settlement) resulting therefrom; and (ii) promptly pay on behalf of or, within thirty (30) days after any request for advancement, advance to each of the Indemnified Parties, to the fullest extent authorized or permitted by California law, as now or hereafter in effect, any Expenses (as defined below) incurred in defending, serving as a witness with respect to or otherwise participating in any Claim in advance of the final disposition of such Claim, including payment on behalf of or advancement to the Indemnified Party of any Expenses incurred by such Indemnified Party in connection with enforcing any rights with respect to such indemnification and/or advancement, in each case without the

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requirement of any bond or other security, but in the case of advancement of Expenses upon receipt of an undertaking, to the extent required by applicable law, from such Indemnified Party to repay such advanced Expenses if it is determined by a court of competent jurisdiction in a final order that such Indemnified Party was not entitled to indemnification hereunder with respect to such Expenses. In the event any Claim is brought against any Indemnified Party, Parent and the Surviving Company shall each use all commercially reasonable efforts to assist in the vigorous defense of such matter, provided that neither Parent nor the Surviving Company shall settle, compromise or consent to the entry of any judgment in any Claim (and in which indemnification could be sought by such Indemnified Party hereunder) without the prior written consent of such Indemnified Party if and to the extent the claimant seeks any non-monetary relief from such Indemnified Party, which consent will not be unreasonably withheld. The indemnification and advancement obligations of Parent and the Surviving Company pursuant to this Section 8.7(a) shall extend to acts or omissions occurring at or before the Effective Time and any Claim relating thereto (including with respect to any acts or omissions occurring in connection with the approval of this Agreement and the consummation of the transactions contemplated hereby and any Claim relating thereto) and all rights to indemnification and advancement conferred hereunder shall continue as to an individual who has ceased to be a director or officer of the Company or its Subsidiaries prior to the Effective Time and shall inure to the benefit of such individual’s heirs, executors and personal and legal representatives. In connection with any determination as to whether the Indemnified Parties are entitled to the benefits of this Section 8.7(a), the burden of proof shall be on Parent and the Surviving Company to establish that an Indemnified Party is not so entitled. As used in this Section 8.7(a), (A) the term “Claim” means any threatened, asserted, pending or completed action, suit or proceeding, or any inquiry or investigation, whether instituted by the Company, any Governmental Entity or any other party, that any Indemnified Party in good faith believes might lead to the institution of any such action, suit or proceeding, whether civil, criminal, administrative, investigative or other, including any arbitration or other alternative dispute resolution mechanism, arising out of or pertaining to matters that relate to such Indemnified Party’s duties or service as a director, officer, trustee, employee, agent, or fiduciary of the Company, any of its Subsidiaries, any employee benefit plan maintained by any of the foregoing at or prior to the Effective Time and any other Person at the request the Company or any of its Subsidiaries; and (B) the term “Expenses” means attorneys’ fees and all other costs, expenses and obligations (including experts’ fees, travel expenses, court costs, retainers, transcript fees, duplicating, printing and binding costs, as well as telecommunications, postage and courier charges) paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to investigate, defend, be a witness in or participate in, any Claim for which indemnification is authorized pursuant to this Section 8.7(a), including any action relating to a claim for indemnification or advancement brought by an Indemnified Party.

          (b) From and after the Effective Time, Parent and the Surviving Company shall keep in full force and effect, and comply with the terms and conditions of, any agreement in effect as of the date of this Agreement between or among the Company or any of its Subsidiaries and any Indemnified Party providing for the indemnification of such Indemnified Party.

          (c) Without limiting any of the obligations under paragraph (a) of this Section 8.7, Parent agrees that all rights to indemnification and all limitations of liability existing in favor of the Indemnified Parties as provided in the Company’s Articles of Incorporation or Bylaws or

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in the corresponding constituent documents of any of the Company’s Subsidiaries as in effect as of the date of this Agreement with respect to matters occurring on or prior to the Effective Time shall survive the Merger and shall continue in full force and effect thereafter, without any amendment thereto.

          (d) If Parent or the Surviving Company or any of its successors or assigns shall (i) consolidate with or merge into any other Person and shall not be the continuing or surviving Person of such consolidation or merger or (ii) transfer all or substantially all of its properties and assets to any Person, then, in each such case, proper provisions shall be made so that the successors and assigns of Parent and the Surviving Company, as the case may be (including Parent’s ultimate parent entity, if applicable), assume all of the obligations of Parent and the Surviving Company set forth in this Section 8.7.

          (e) As of the Effective Time, Parent, the Surviving Company or the Company (with the election being at Parent’s option) shall have purchased and shall maintain in full force and effect for a period of six (6) years after the Closing Date (or, if any Claim is asserted or made within such six-year period, Parent shall ensure that such insurance remains in effect until final disposition of such Claim) a directors’ and officers’ liability insurance policy or policies providing each individual currently covered by the Company’s directors’ and officers’ liability insurance coverage for events occurring at or prior to the Effective Time (including acts or omissions relating to the approval of this Agreement and consummation of the transactions contemplated hereby) that is no less favorable than the Company’s existing policy; provided, however, that Parent may substitute therefor policies of at least the same coverage and amounts containing terms and conditions which are in the aggregate no less advantageous to such directors and officers of the Company than the terms and conditions of the existing directors’ and officers’ liability insurance policy of the Company from reputable carriers having a rating comparable to the Company’s current carrier.

          (f) The provisions of this Section 8.7 shall survive the consummation of the Merger and (i) are intended to be for the benefit of, and shall be enforceable by, each Indemnified Party and his or her heirs and representatives and (ii) are in addition to, and not in substitution for, any other rights to indemnification or contribution that any such Person may have by contract or otherwise. The obligations of Parent or the Surviving Company under this Section 8.7 shall not be terminated or modified in such a manner as to adversely affect the rights of any Indemnified Party under this Section 8.7 without the consent of such affected Indemnified Party. Parent shall cause the Surviving Company to perform all of the obligations of the Surviving Company under this Section 8.7.

     8.8 No Solicitation.

          (a) The Company shall, and shall cause each of its Subsidiaries, and shall cause their respective officers, directors, representatives and agents (including any investment banker, attorney or accountant retained by it or any of its Subsidiaries) (collectively, “Company Representatives”) to, immediately cease any existing discussions or negotiations, if any, with any Third Party that may be ongoing with respect to an Acquisition Proposal and will use its best efforts to cause all Persons other than Parent who have been furnished with confidential

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information regarding the Company in connection with the solicitation of or discussions regarding an Acquisition Proposal within the 12 months prior to the date hereof promptly to return or destroy such information. The Company agrees not to, and to cause its Subsidiaries not to, release any third party from the confidentiality and stand still provisions of any agreement to which the Company or its Subsidiaries is a party or becomes a party, and will immediately take all steps necessary to terminate any approval that may have heretofore been given under any such provisions authorizing any Person to make an Acquisition Proposal, unless the Company Board reasonably determines in good faith that such Acquisition Proposal is, or is reasonably likely to be, a Superior Proposal. The Company shall not, and shall not authorize or permit any of its Subsidiaries or any Company Representative to, directly or indirectly, (i) solicit, initiate or knowingly encourage an Acquisition Proposal, (ii) furnish or disclose to any Third Party non-public information with respect to an Acquisition Proposal, (iii) negotiate or engage in substantive discussions with any Third Party with respect to an Acquisition Proposal or (iv) enter into any agreement (whether or not binding) or agreement in principle with respect to an Acquisition Proposal; provided, however, that at any time prior to the consummation of the Offer, in response to a bona fide written Acquisition Proposal that was not solicited by the Company, its Subsidiaries or any Company Representative and which the Company Board reasonably determines in good faith, after consulting with its financial advisors and legal counsel, constitutes, or is reasonably likely to constitute, a Superior Proposal, the Company may (A) furnish information with respect to the Company and its Subsidiaries to the Person making such Acquisition Proposal (and its officers, directors, employees, accountants, consultants, legal counsel, advisors, agents and other representatives) and (B) participate in discussions or negotiations with, and provided draft documents and agreements to, the Person making such Acquisition Proposal (and its officers, directors, employees, accountants, consultants, legal counsel, advisors, agents and other representatives) regarding such Acquisition Proposal, if (prior to furnishing such information to, or entering into such discussions or negotiations with, such Person) the Company (A) provides reasonable notice to Parent to the effect that it is furnishing information to, or entering into discussions or negotiations with, such Person, (B) provides Parent with all information to be provided to such Person which Parent has not previously been provided, and (C) receives from such Person an executed confidentiality agreement reasonably satisfactory to the Company Board with terms, as a whole, that are no less favorable to the Company than those contained in the Confidentiality Agreement.

          (b) Except as set forth in this Section 8.8(b), the Company Board shall not (i) withdraw or modify, or propose to withdraw or modify, in a manner adverse to Parent, the Company Recommendation, (ii) approve or recommend, or propose to approve or recommend, any Acquisition Proposal or (iii) enter into any agreement (whether or not binding) or agreement in principle with respect to any Acquisition Proposal (other than a confidentiality agreement referred to in Section 8.8(a)). Notwithstanding the foregoing, prior to consummation of the Offer, in response to the receipt of an unsolicited Acquisition Proposal, if the Company Board (A) reasonably determines in good faith after consultation with its legal counsel and financial advisors that such Acquisition Proposal is a Superior Proposal and (B) determines in good faith after consultation with its legal counsel that failure to take such action would be inconsistent with its fiduciary duties to the shareholders of the Company under applicable law, then the Company Board may approve and recommend such Superior Proposal and, in connection with such approval and recommendation, withdraw, or modify or change in a manner adverse to Parent, the Company Recommendation (either, a “Company Recommendation Change”);

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provided, however, that no Company Recommendation Change shall be valid or effective until (i) the Company has provided written notice to Parent advising Parent that the Company Board has received a Superior Proposal, specifying in writing all of the terms and conditions of such Superior Proposal and the identity of the Person making such Superior Proposal and, (ii) Parent does not make, within three (3) Business Days after receipt of such notice from the Company, an offer that the Company Board reasonably determines in good faith, after consultation with its financial and legal advisors, is at least as favorable to the holders of Company Common Stock as the Superior Proposal and during such three (3) Business Day period the Company reasonably considers and discusses in good faith all proposals submitted by Parent and, without limiting the foregoing, causes its financial advisors and legal advisors as requested by Parent to reasonably consider and discuss with Parent and its representatives such proposals in good faith. In the event that the Company enters into a definitive agreement with a Third Party with respect to a Superior Proposal and in connection therewith this Agreement is terminated, then, notwithstanding anything to the contrary in the standstill provisions of the Confidentiality Agreement, Parent shall be entitled to present an Acquisition Proposal to the Company Board (it being understood that except as modified hereby such standstill provisions shall remain in full force and effect).

          (c) Nothing contained in this Agreement shall prohibit the Company or the Company Board from (i) taking and disclosing to the shareholders of the Company a position contemplated by Rule 14e-2 promulgated under the Exchange Act or (ii) making any disclosure to the shareholders of the Company if the Company Board determines in good faith that such disclosure is required by applicable law.

          (d) As used in this Agreement:

               (i) “Acquisition Proposal” means any inquiry, proposal or offer relating to (i) the acquisition of 20% or more of the outstanding shares of capital stock or any other voting securities of the Company by any Third Party, (ii) a merger, consolidation, business combination, reorganization, share exchange, sale of assets, recapitalization, liquidation, dissolution or similar transaction which would result in any Third Party acquiring 20% or more of the fair market value of the assets of the Company and its Subsidiaries, taken as a whole (including capital stock of Subsidiaries of the Company), (iii) any other transaction which would result in a Third Party acquiring 20% or more of the fair market value of the assets of the Company and its Subsidiaries, taken as a whole (including capital stock of Subsidiaries of the Company), immediately prior to such transaction (whether by purchase of assets, acquisition of stock of a Subsidiary or otherwise), (iv) any combination of the foregoing or (v) any other transaction that is conditioned or predicated on the Merger not being completed in accordance with the terms of this Agreement or would reasonably be expected to result in the Merger not being so completed.

               (ii) “Superior Proposal” means an Acquisition Proposal (with all of the percentages included in the definition of Acquisition Proposal increased to 75%) the terms of which the Company Board determines in good faith (after consultation with its financial advisors and legal counsel), taking into account, among other things, the legal, financial and regulatory aspects of such Acquisition Proposal and the Third Party making such Acquisition Proposal, whether the acquiring party is capable of consummating the Acquisition Proposal on the terms

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proposed, and whether the Acquisition Proposal is subject to any financing contingency, would, if consummated, be more favorable from a financial point of view to the holders of Company Common Stock than those set forth in this Agreement.

     8.9 Section 16 Matters. Prior to the Effective Time, the Board of Directors of the Company shall take all such steps as may be required and permitted to cause the transactions contemplated by this Agreement, including any dispositions of shares of Company Common Stock (including derivative securities with respect to such Company Common Stock) by each individual who is or will be subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the Company, to be exempt under Rule 16b-3 promulgated under the Exchange Act.

     8.10 InnovaQuartz Stock Purchase Agreement. Parent hereby agrees and acknowledges that following the Effective Time, the Surviving Company shall assume (i) any and all of the Company’s payments obligations specified in Sections 1.3 and 1.4 of that certain Stock Purchase Agreement dated as of April 30, 2006 by and between the Company, InnovaQuartz Incorporated, an Arizona corporation (“InnovaQuartz”), and the stockholders of InnovaQuartz (the “InnovaQuartz Stock Purchase Agreement”), and (ii) any and all of the Company’s operational covenants specified in Section 6.10 of the InnovaQuartz Stock Purchase Agreement.

     8.11 Notification of Certain Matters. The Company will give prompt written notice to the Parent, and the Parent will give prompt written notice to the Company, of any material failure of the Company or Parent or Merger Sub, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this Section 8.11 will not limit or otherwise affect the remedies available hereunder to the party receiving such notice; provided, further, the failure to deliver any such notice shall not be considered in determining whether the condition set forth in paragraph (c) of Annex I exists.

9. CONDITIONS PRECEDENT

     Conditions to Each Party’s Obligation to Effect the Merger. The respective obligations of each party to effect the Merger shall be subject to the satisfaction at or prior to the Effective Time of the following conditions:

          (a) Shareholder Approval. If required by applicable law, the Agreement of Merger shall have been approved by the Company Required Vote.

          (b) HSR Compliance. The applicable waiting period under the HSR Act shall have expired or been terminated.

          (c) No Injunctions or Restraints; Illegality. No order, injunction, statute, rule, regulation or decree shall have been issued, enacted, entered, promulgated or enforced by a Governmental Entity that prohibits or makes illegal the consummation of the Merger.

          (d) Purchase of Shares. Merger Sub shall have purchased the Shares validly tendered pursuant to the Offer in an amount sufficient to meet the Minimum Condition or, if applicable pursuant to the provisions of this Agreement, the Option Exercise Minimum

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Condition or the Revised Minimum Condition, provided that no party shall be entitled to invoke this condition if, in breach of its obligations under this Agreement, it shall have been the cause of the failure of Merger Sub to purchase pursuant to the Offer, the Shares validly tendered and not withdrawn.

10. TERMINATION AND AMENDMENT

     10.1 Termination. This Agreement may be terminated and the Offer, the Merger and the transactions contemplated hereby may be abandoned at any time prior to the Effective Time by action taken or authorized by the Board of Directors of the terminating party or parties, notwithstanding any requisite approval of this Agreement by the shareholders of the Company, and whether before or after the shareholders of the Company have approved this Agreement at the Company Shareholder Meeting, as follows (the date of any such termination, the “Termination Date”):

          (a) by mutual consent of Parent and the Company in a written instrument, if the Board of Directors of each so determines;

          (b) by either Parent or the Company if any Governmental Entity of competent jurisdiction shall have issued a final nonappealable order which has the effect of making consummation of the Offer or the Merger illegal or otherwise preventing or prohibiting consummation of the Offer or the Merger;

          (c) by either Parent or the Company if the Offer has not been consummated on or before December 31, 2006; provided, however, that the right to terminate this Agreement under this Section 10.1(c) shall not be available to a party whose failure to fulfill any obligation under this Agreement materially contributed to the failure of the Offer to be consummated on or before such date;

          (d) by either Parent or the Company if the Offer terminates or expires in accordance with its terms, after giving effect to the rights and obligations of the parties set forth in Section 1.1(d) and Section 1.1(e), without Merger Sub having accepted for payment any Shares pursuant to the Offer due to its failure to achieve the Revised Minimum Condition, except that the right to terminate this Agreement under this Section 10.1(d) will not be available to any party whose failure to perform any obligation under this Agreement has been the proximate cause of, or resulted in, such failure to achieve the Revised Minimum Condition;

          (e) by Parent if it is not in material breach of this Agreement and if (i) there has been a breach on the part of the Company of any of its covenants or agreements herein such that the condition set forth in paragraph (b) of Annex I exists or (ii) any of the representations and warranties of the Company herein are or become untrue or incorrect such that the condition set forth in paragraph (c) of Annex I exists (in each case, after giving effect to the cure periods specified therein);

          (f) by the Company if it is not in material breach of this Agreement, and if (i) the representations and warranties of Parent and Merger Sub in Section 6.6 are or become untrue or inaccurate or (ii) any of the representations and warranties of Parent and Merger Sub herein, other

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than those set forth in Section 6.6, are or become untrue or inaccurate, or (iii) there has been a breach on the part of Parent or Merger Sub of any of their respective covenants or agreements herein, and, in the case of clause (ii) and (iii) only, (A) such breach has not been, or cannot be, cured in all material respects within thirty (30) Business Days after written notice to Parent and Merger Sub, or (B) without regard to any qualification or reference to materiality or Parent Material Adverse Effect set forth in such representations and warranties, such inaccuracy or breach would, individually or in the aggregate, have a Parent Material Adverse Effect;

          (g) by Parent (i) if the Company breaches in any material respect any of its obligations under Section 8.8, (ii) if the Company Board shall have effected a Company Recommendation Change, or (iii) the Company shall have failed to include in the Proxy Statement distributed to the Company’s shareholders, if any, its recommendation that shareholders approve this Agreement and the Merger;

          (h) by the Company (i) if the Company Board shall have effected a Company Recommendation Change prior to the consummation of the Offer and the Company is not concurrently in material breach of its obligations under this Agreement and has materially complied with its obligations under Section 8.8, or (ii) if Parent or Merger Sub shall have failed to commence the Offer in accordance with Section 1.1(a); provided, however, the Company may not terminate this Agreement pursuant to this Section 10.1(h)(ii) if such failure to have commenced the Offer shall have been caused by the Company’s failure to perform in all material respects its obligations under this Agreement.

     10.2 Effect of Termination.

          (a) In the event of termination of this Agreement by either Parent or the Company as provided in Section 10.1, this Agreement shall forthwith become void and have no effect, and none of Parent, Merger Sub, the Company, any of their respective Subsidiaries or any of the officers or directors of any of them shall have any liability of any nature whatsoever hereunder, or in connection with the transactions contemplated hereby; provided, however, that (i) Section 8.2(b), the last sentence of Section 8.8(b), Section 10.2 and Section 11 shall survive any termination of this Agreement and (ii) notwithstanding anything to the contrary contained in this Agreement, neither Parent, Merger Sub nor the Company shall be relieved or released from any liabilities or damages arising out of its willful and material breach of this Agreement; provided, however, that receipt of the Termination Fee (as defined below) as provided herein shall be the sole and exclusive remedy of Parent and Merger Sub under circumstances where the Termination Fee is payable by the Company.

          (b) The Company shall pay Parent, by wire transfer of immediately available funds, the sum of $25,000,000 (the “Termination Fee”) if this Agreement is terminated as follows:

               (i) if this Agreement is terminated pursuant to Sections 10.1(g) or 10.1(h)(i), then (so long as neither Parent nor Merger Sub was in material breach of this Agreement) the Company shall pay the Termination Fee to Parent on the second Business Day after the date of

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               termination; or (ii) if (A) this Agreement is terminated by either Parent or the Company pursuant to Sections 10.1(c), 10.1(d) or 10.1(e), (B) in the case of a termination pursuant to Sections 10.1(c) and 10.1(d) only, prior to the Termination Date there shall have been an Acquisition Proposal, and (C) within twelve (12) months of the Termination Date, the Company enters into a definitive agreement with a Third Party with respect to an Acquisition Proposal or any Acquisition Proposal is consummated by such Third Party, then (so long as neither Parent nor Merger Sub was not in material breach of this Agreement) the Company shall pay, or cause to be paid to, Parent the Termination Fee upon consummation of such Acquisition Proposal.

          (c) Any amount that becomes payable pursuant to Section 10.2(b) shall be paid by wire transfer of immediately available funds to an account designated by Parent. For the avoidance of doubt, in no event shall the Company be obligated to pay the Termination Fee on more than one occasion.

          (d) The Company and Parent agree that the agreements contained in Section 10.2(b) are an integral part of the transactions contemplated by this Agreement, that without such agreements Parent would not have entered into this Agreement, and that the amount of the Termination Fee does not constitute a penalty.

     10.3 Amendment. Subject to compliance with applicable law, this Agreement may be amended by the parties hereto, by action taken or authorized by their respective boards of directors, at any time before the Effective Time; provided, however, that after receipt of the Company Required Vote, there may not be any amendment of this Agreement which, by applicable law or in accordance with the rules of any relevant stock exchange, requires further approval of the Company’s shareholders. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

     10.4 Extension; Waiver. At any time prior to the Effective Time, the parties hereto may, to the extent legally allowed, (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto and (c) waive compliance with any of the agreements or conditions contained herein; provided, however, that, after receipt of the Company Required Vote, there may not be any extension or waiver of this Agreement which decreases the Merger consideration or which adversely affects the rights of the Company’s shareholders hereunder without the approval of such shareholders. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party, but such extension or waiver or failure to insist on strict compliance with an obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.

11. GENERAL PROVISIONS

     11.1 Nonsurvival of Representations, Warranties and Agreements. None of the representations, warranties, covenants and agreements in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time, except for those

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covenants and agreements contained herein and therein which by their terms apply in whole or in part after the Effective Time.

     11.2 Expenses. Except as provided in Section 10.2 hereof, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expense, except that each of the Company and Parent shall bear and pay one-half of the costs and expenses incurred in connection with the filing, printing and mailing of the Offer Documents, Schedule 14D-9 and the Proxy Statement (including any SEC filing fees) and any filing fees required to be paid under the HSR Act.

     11.3 Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (with confirmation) or delivered by an overnight courier (with confirmation) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

          (a) if to Parent or Merger Sub, to:

American Medical Systems Holdings, Inc.
10700 Bren Road West
Minnetonka, Minnesota 55343
Attention: Chief Executive Officer
Facsimile: (952) 930-6695

          with a copy to:

Oppenheimer Wolff & Donnelly LLP
Plaza VII
45 South Seventh Street, Suite 3300
Minneapolis, MN 55402
Attention: Thomas A. Letscher, Esq.
Facsimile: (612) 607-7100

          (b) If to the Company, to:

Laserscope
3070 Orchard Drive
San Jose, CA 95134-2011
Attention: Chief Executive Officer
Facsimile: (408) 943-9630

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with a copy to:

Orrick, Herrington & Sutcliffe LLP
The Orrick Building
405 Howard Street
San Francisco, CA 94105
Attention: Richard Vernon Smith, Esq.
Facsimile: (415) 773-5759

     11.4 Interpretation; Construction. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and the schedules hereto and not to any particular provision of this Agreement, and Section references are to this Agreement unless otherwise specified. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” Unless the context otherwise requires, “or” is not exclusive. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. No provision of this Agreement shall be construed to require the Company, Merger Sub, Parent or any of their respective officers, directors, Subsidiaries or Affiliates to take any action which would violate or conflict with any applicable law (whether statutory or common), rule or regulation. This Agreement shall be construed without regard to any presumption or interpretation against the party drafting or causing any instrument to be drafted. All schedules accompanying this Agreement and all information specifically referenced in any such schedule form an integral part of this Agreement, and references to this Agreement include reference to them.

     11.5 Counterparts; Facsimile. This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart. Signatures transmitted by facsimile shall be accepted as originals for all purposes of this Agreement.

     11.6 Entire Agreement. This Agreement (together with the documents, schedules and the instruments referred to herein or delivered herewith) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, other than the Confidentiality Agreement, which shall survive the execution and delivery of this Agreement and any termination of this Agreement.

     11.7 Governing Law; Venue. This Agreement shall be governed and construed in accordance with the laws of the State of California, without regard to any applicable conflicts of law provisions (except to the extent that mandatory provisions of federal law). Each of the parties hereto irrevocably submit to the exclusive jurisdiction and venue of the courts of the State of California or of the United States of America, in each located in the County of Santa Clara, California, for the purpose of any suit, action or other proceeding arising out of this Agreement, or any of the agreements or transactions contemplated hereby, which is brought by or against any other party hereto and hereby irrevocably agree

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(a) that all claims in respect of any such suit, action or proceeding may be heard and determined in any such court and (b) not to commence any action suit or proceeding relating to this Agreement other than in such court. Each party hereto irrevocably and unconditionally waives and agrees not to assert in any such suit, action or proceeding, in each case, to the fullest extent permitted by applicable law, (i) any objection to the laying of venue of any such suit, action or proceeding brought in any such court, (ii) any claim that such party is not personally subject to the jurisdiction of any such court, and (iii) any claim that any such suit, action or proceeding is brought in an inconvenient forum. Each party hereto agrees that service of any process, summons, notice or document by U.S. registered mail addressed to such party shall be effective service of process for any action, suit or proceeding brought against such party in any such court. Each party hereto agrees that a final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon such party and may be enforced in any other courts to whose jurisdiction such party is or may be subject, by suit upon such judgment.

     11.8 Severability. Any term or provision of this Agreement which is determined by a court of competent jurisdiction to be invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction, and if any provision of this Agreement is determined to be so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable, in all cases so long as neither the economic nor legal substance of the transactions contemplated hereby is affected in any manner materially adverse to any party or its shareholders. Upon any such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.

     11.9 Publicity. Parent, Merger Sub and the Company shall consult with each other before issuing any press release with respect to the Offer, the Merger or this Agreement and shall not issue any such press release or make any such public statement without the prior consent of the other party, which shall not be unreasonably withheld or delayed; provided, however, that a party may, without the prior consent of the other party (but after prior consultation, to the extent practicable in the circumstances) issue such press release or make such public statement or SEC filing as may upon the advice of outside counsel be required by law or the rules and regulations of any applicable stock exchange (including the NASDAQ National Market). The parties have agreed upon the form of a joint press release announcing the Offer, the Merger and the execution of this Agreement.

     11.10 Assignment; Third Party Beneficiaries. Neither this Agreement nor any of the rights, interests or obligations of any party hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other party. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns. Except as otherwise specifically provided in Section 8.5 and Section 8.6, this Agreement (including the documents and instruments referred to herein) is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder.

[Remainder of Page Left Blank Intentionally]

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     IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement to be executed by their respective officers hereunto duly authorized as of the date first above written.

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

By: /s/ Martin J. Emerson                                                  

Name: Martin J. Emerson

Title: President & CEO

KERMIT MERGER CORP.

By: /s/ Martin J. Emerson                                                  

Name: Martin J. Emerson

Title: President & CEO

LASERSCOPE

By: /s/ Eric Reuter                                                               

Name: Eric Reuter

Title: President & CEO

SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER

ANNEX I

CONDITIONS TO THE OFFER

     Notwithstanding any other provision of the Offer, subject to the terms of this Agreement, Merger Sub shall not be required to accept for payment (subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating to Merger Sub’s obligation to pay for or return tendered Shares after the termination or withdrawal of the Offer)) any Shares tendered if, by the expiration of the Offer (as it may be extended in accordance with the requirements of Section 1.1(d)), (1) the Minimum Condition or, if applicable pursuant to the provisions of this Agreement, the Option Exercise Minimum Condition or the Revised Minimum Condition, shall not have been satisfied, (2) the applicable waiting period under the HSR Act and any other applicable antitrust laws shall not have expired or been terminated, or (3) at any time on or after the date of this Agreement and prior to the acceptance for payment of Shares pursuant to the Offer, any of the following conditions exist:

     (a) there shall be any action taken, or any statute, rule, regulation, injunction, order or decree proposed, enacted, enforced, promulgated, issued or deemed applicable to this Agreement, the Shareholder Agreements, the Offer or the Merger, by any Governmental Entity (other than in connection with any action or proceeding initiated by or on behalf of any shareholder of the Company) that has resulted in, or is reasonably likely to result in, directly or indirectly, (i) the making of the Offer, the acceptance for payment of some of or all the Shares by Parent or Merger Sub or the consummation by Parent or Merger Sub of the Merger becoming illegal or exposing Parent or Merger Sub to liability for material damages, (ii) any restraint or prohibition on Parent’s or Merger Sub’s ownership or operation (or that of their respective Subsidiaries or Affiliates) of all or any portion of the business or assets of the Company and its Subsidiaries, taken as a whole, or of Parent and its Subsidiaries, taken as a whole, or compelling Parent or any of its Subsidiaries or Affiliates to dispose of or hold separate all or any portion of the business or assets of the Company and its Subsidiaries, taken as a whole, or of Parent and its Subsidiaries, taken as a whole, (iii) the imposition of limitations on the ability of Parent or any of its Subsidiaries or Affiliates effectively to exercise full rights of ownership of the Shares, including, without limitation, the right to vote any Shares acquired or owned by Parent or any of its Subsidiaries or Affiliates on all matters properly presented to the Company’s shareholders or (iv) the imposition of an obligation of Parent or any of its Subsidiaries or Affiliates to divest any of the Shares; or

     (b) the Company shall have failed to perform in any material respect, or to comply in any material respect with, its covenants or agreements in this Agreement, except where the failure to so perform or comply (i) is curable and has been cured within thirty (30) Business Days after receipt of written notice of such failure from Parent, or (ii) individually or in the aggregate, would not have a Company Material Adverse Effect; or

     (c) any representation and warranty of the Company in this Agreement is not true and correct (except as to any such representation or

I-1

warranty that speaks as of a specific date, which must be true and correct only as of such specific date), except where the failure to be so true and correct (i) is curable and has been cured within thirty (30) Business Days after receipt of written notice of such failure from Parent, or (ii) without regard to any qualification or reference to materiality or Company Material Adverse Effect set forth in such representation and warranty, would not, individually or in the aggregate, have a Company Material Adverse Effect; or

     (d) Parent shall have failed to receive a certificate executed on behalf of the Company by the Chief Executive Officer and the Chief Financial Officer of the Company (in their respective capacities as officers of the Company), dated as of the scheduled expiration date of the Offer, to the effect that the conditions set forth in paragraphs (b) and (c) of this Annex I have not occurred; or

     (e) the Agreement shall have been terminated in accordance with its terms; or

     (f) the Company Board (or any committee thereof) shall have made a Company Recommendation Change; or

     (g) the Company shall have entered into an agreement or agreement in principle (other than a confidentiality agreement permitted by Section 8.8 of this Agreement) with respect to any Acquisition Proposal; or

     (h) a Company Material Adverse Effect shall have occurred subsequent to March 31, 2006 and continue to exist.

       The foregoing conditions are for the sole benefit of Parent and Merger Sub and may be asserted by Parent regardless of the circumstances (including any action or omission by Parent or Merger Sub) giving rise to any such condition or (other than the Minimum Condition) may, subject to the terms of this Agreement, be waived by Parent and Merger Sub in their reasonable discretion in whole at any time or in part from time to time. The failure by Parent or Merger Sub at any time to exercise its rights under any of the foregoing conditions shall not be deemed a waiver of any such right; the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances, and each such right shall be deemed an ongoing right which may be asserted at any time or from time to time.

       Capitalized terms used but not defined in this Annex I shall have the meanings ascribed to such terms in the Agreement to which it is annexed, except that the term “Agreement” shall be deemed to refer to the Agreement to which this Annex I is appended.

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EX-99.(D)(2)

SHAREHOLDER AGREEMENT

     AGREEMENT, dated as of June 3, 2006, by and between American Medical Systems Holdings, Inc., a Delaware corporation (“Parent”), and the person listed on the signature page hereto (the “Shareholder”), a holder of shares of common stock, without par value (“Company Common Stock”), of Laserscope, a California corporation (“Company”).

     WHEREAS, Parent, the Company and Kermit Merger Corp., a California corporation and an indirect, wholly-owned subsidiary of Parent (“Merger Sub”), have entered into an Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”), pursuant to which Merger Sub has agreed, subject to the terms and conditions contained therein, to (i) offer to acquire (the “Offer”) all of the outstanding shares of Company Common Stock at a price for each share of $31.00 in cash (or such higher price per share as may be paid by Merger Sub in the Offer) and (ii) merge with and into the Company, with the Company to be the surviving corporation;

     WHEREAS, the Shareholder beneficially owns (as described herein) that number of shares of the Company Common Stock specified on the signature page hereof;

     WHEREAS, in order to induce Parent and Merger Sub to enter into the Merger Agreement, Parent has requested that the Shareholder, and the Shareholder has agreed, to enter into this Agreement with respect to all Shares (as defined below) of Company Common Stock now or hereafter held of record or Beneficially Owned (as defined below) by the Shareholder; and

     WHEREAS, capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Merger Agreement.

     NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE 1
Grant of Proxy; Voting Agreement; Agreement to Tender

     1.1 Voting Agreement. The Shareholder hereby agrees that, during the period commencing on the date hereof and continuing until the first to occur of (a) the Effective Time or (b) termination of the Merger Agreement in accordance with its terms, at any meeting of the holders of Company Common Stock, however called, or in connection with any written consent of the holders of Company Common Stock, the Shareholder shall vote (or cause to be voted) to the extent not voted by Parent as proxy in Section 1.2 below, all of the Shares, whether heretofore owned or hereafter acquired and to the extent such Shares may be voted: (i) in favor of approval of the Merger Agreement, the Offer, the Merger and other related agreements (or any amended versions thereof) and any actions required in furtherance thereof and hereof; (ii) against any action or agreement that would result in a breach in any respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Merger Agreement; and (iii) except as otherwise agreed to in writing in advance by Parent, against the following actions (other than the Offer, the Merger and the transactions contemplated by the Merger Agreement): (A) any Acquisition Proposal or any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the

Company, a sale, lease or transfer of a material amount of assets of the Company, or a reorganization, recapitalization, dissolution or liquidation of the Company; or (B) (1) any change in a majority of the persons who constitute the board of directors of the Company; (2) any change in the present capitalization of the Company or any amendment of the Company’s Articles of Incorporation or Bylaws; (3) any other material change in the Company’s corporate structure or business; or (4) any other action which is intended, or could reasonably be expected, to impede, interfere with, delay, postpone, or materially and adversely affect the Offer, the Merger or any of the transactions contemplated by this Agreement or the Merger Agreement. The Shareholder shall not enter into any agreement or understanding with any Person the effect of which would be inconsistent or violative of this Agreement. For purposes of this Agreement, “Beneficially Own,” “Beneficially Owned” or “Beneficial Ownership” (or any other derivative of such terms) with respect to any securities shall mean having “beneficial ownership” of such securities (as determined pursuant to Rule 13d-3 under the Exchange Act), including pursuant to any agreement, arrangement or understanding, whether or not in writing. Without duplicative counting of the same securities by the same holder, securities Beneficially Owned by a Person shall include securities Beneficially Owned by all other Persons with whom such Person would constitute a “group” within the meaning of Section 13(d)(3) of the Exchange Act. The “Shares” shall include all shares of Company Common Stock held of record on the date hereof or at any other time prior to the termination of this Agreement (or Beneficially Owned by the Shareholder as of March 31, 2006), but shall exclude any Shares as to which the Shareholder disclaims Beneficial Ownership in any Company filing under the Exchange Act.

     1.2 Irrevocable Proxy. The Shareholder hereby revokes any and all previous proxies granted with respect to the Shares. By entering into this Agreement, the Shareholder hereby grants a proxy appointing Parent as the Shareholder’s attorney-in-fact and proxy, with full power of substitution, for and in the Shareholder’s name, to vote, express, consent or dissent, or otherwise to utilize such voting power as Parent or its proxy or substitute shall, in Parent’s sole discretion, deem proper with respect to the Shares to effect any action contemplated by Section 1.1 above (including the right to sign its name (as Shareholder) to any consent, certificate or other document relating to Company that the law of the State of California may permit or require). The proxy granted by the Shareholder pursuant to this Section 1.2 is irrevocable, is coupled with an interest and is granted in consideration of Parent entering into this Agreement and the Merger Agreement and incurring certain related fees and expenses, provided, however, that the proxy granted by the Shareholder shall be revoked upon termination of this Agreement in accordance with its terms.

     1.3 Agreement to Tender. The Shareholder hereby agrees to tender for payment in the Offer all of the outstanding Shares within five (5) Business Days after the commencement of the Offer, pursuant to and in accordance with the terms of the Offer, and agrees that, prior to the termination of the Merger Agreement in accordance with its terms, the Shareholder will not withdraw its tender of the Shares. To effect such tender, the Shareholder shall, within such five (5) Business Day period, (a) deliver to the Paying Agent designated in the Offer: (i) a letter of transmittal with respect to such Shares complying with the terms of the Offer, (ii) certificates representing such Shares and (iii) all other documents or instruments required to be delivered pursuant to the terms of the Offer, and/or (b) instruct its broker or such other person who is the holder of record of any Shares beneficially owned by the Shareholder to tender such shares for payment in the Offer pursuant to the terms and conditions of the Offer.

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ARTICLE 2
Representations and Warranties of Shareholder

     The Shareholder represents and warrants to Parent that:

     2.1 Power; Binding Agreement. The Shareholder has the necessary power and authority to enter into and perform all of the Shareholder’s obligations under this Agreement, and the person signing this Agreement on behalf of the Shareholder has the legal capacity, power and authority to execute and deliver this Agreement on behalf of the Shareholder. This Agreement has been duly and validly authorized, executed and delivered by the Shareholder and, assuming that this Agreement has been duly executed and delivered by Parent, constitutes a valid and binding agreement of the Shareholder, enforceable against the Shareholder in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws of applicability relating to or affecting creditors’ rights and general principles of equity. There is no beneficiary or holder of a voting trust certificate or other interest of any trust of which the Shareholder is trustee whose consent is required for the authorization, execution and delivery of this Agreement or the consummation by the Shareholder of the transactions contemplated hereby whose consent has not been obtained. If the Shareholder is married and the Shares constitute community property, this Agreement has been duly authorized, executed and delivered by, and assuming that this Agreement has been duly executed and delivered by Parent, constitutes a valid and binding agreement of, the Shareholder’s spouse, enforceable against such person in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws of applicability relating to or affecting creditors’ rights and general principles of equity.

     2.2 Non-Contravention. The execution, delivery and, subject to compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and securities laws, as applicable, performance by the Shareholder of this Agreement, do not and will not (i) conflict with or violate, or require any consent or other action by any Person, with respect to the Shareholder, under any applicable law, statute, rule, regulation, judgment, injunction, order or decree applicable to the Shareholder, (ii) conflict with, require any consent or other action by any Person under, or constitute a default under, or give rise to any right of termination, cancellation or acceleration under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, contract, commitment, arrangement, understanding, agreement or other instrument or obligation of any kind to which the Shareholder is a party or by which any of the Shareholder’s properties or assets are bound, including, without limitation, any voting agreement, Shareholders agreement, voting trust, trust or similar agreement with respect to the Shares, (iii) result in the imposition of any encumbrance on the Shares or (iv) require any consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, with respect to the Shareholder.

     2.3 Ownership of Shares. Except as otherwise set forth on the signature page hereto, the Shareholder is the sole record and Beneficial Owner of the Shares. The outstanding Shares are, and shall be delivered to Parent pursuant to this Agreement, free and clear of any encumbrance and any other limitation or restriction (including any restriction on the right to vote or otherwise dispose of the Shares), other than

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restrictions under the Securities Act of 1933, as amended. Except for the Shares which are community property as set forth on the signature page hereto, the Shareholder has sole voting power and sole power to issue instructions with respect to the matters set forth in Article 1, sole power of disposition, sole power of conversion, sole power to demand appraisal rights and sole power to agree to all of the matters set forth in this Agreement, in each case with respect to all of the Shares with no limitations, qualifications or restrictions on such rights.

     2.4 Total Shares. Except for the Shares set forth on the signature page hereto next to the Shareholder’s name, the Shareholder does not Beneficially Own any shares of capital stock or voting securities of Company (other than Shares as to which the Shareholder disclaims Beneficial Ownership in any Company filing under the Exchange Act). Except as set forth on the signature page hereto, the Shareholder does not Beneficially Own any (i) securities of Company convertible into or exchangeable for shares of capital stock or voting securities of the Company or (ii) options or other rights to acquire from Company any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of Company.

     2.5 No Finder’s Fees. Other than existing financial advisory and investment banking arrangements and agreements set forth in the Merger Agreement, no broker, investment banker, financial adviser or other person is entitled to any broker’s, finder’s, financial adviser’s or other similar fee or commission in connection with the transactions contemplated by the Merger Agreement based upon arrangements made by the Shareholder.

     2.6 Reliance by Parent. The Shareholder understands and acknowledges that Parent is entering into the Merger Agreement in reliance upon the Shareholder’s execution, delivery and performance of this Agreement.

ARTICLE 3
Representations and warranties of parent

     Parent represents and warrants to the Shareholder:

     3.1 Corporate Authorization. The execution, delivery and performance by Parent of this Agreement and the consummation by Parent of the transactions contemplated hereby are within the corporate powers of Parent and have been duly authorized by all necessary corporate action. This Agreement constitutes a legal valid and binding agreement of Parent, enforceable against Parent in accordance with its terms.

ARTICLE 4
Covenants of Shareholder

     The Shareholder hereby covenants and agrees that:

     4.1 No Proxies for or Encumbrances on Shares. Except pursuant to the terms of this Agreement, the Shareholder shall not, without the prior written consent of Parent, directly or indirectly, (i) grant any proxy or power of attorney, deposit any Shares into any voting trust or enter into any other agreement or arrangement with respect to the voting of any Shares or (ii) acquire (other than upon the exercise out outstanding

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options to purchase Company Common Stock), sell, assign, transfer, distribute, encumber or otherwise dispose of, or enter into any contract, option or other arrangement or understanding with respect to the direct or indirect acquisition or sale, assignment, transfer, tender, pledge, distribution, encumbrance or other disposition of, any Shares. The Shareholder shall not, solely in the Shareholder’s capacity as a Shareholder, directly or indirectly, (i) solicit, initiate or encourage an Acquisition Proposal, (ii) furnish or disclose to any Third Party non-public information of the Company with respect to an Acquisition Proposal, (iii) negotiate or engage in substantive discussions on behalf of the Company with any Third Party with respect to an Acquisition Proposal or (iv) enter into any agreement (whether or not binding) or agreement in principle on behalf of the Company with respect to an Acquisition Proposal or permit any of the Shareholder’s agents to do any of the foregoing, and the Shareholder agrees promptly to notify Parent orally (in all events within two (2) Business Days) and in writing (as soon thereafter as practicable) of the material terms and status of any inquiry or proposal which the Shareholder or any of its agents may receive from any Person after the date hereof relating to any of such matters and, if such inquiry or proposal is in writing, the Shareholder shall deliver to Parent a copy of such inquiry or proposal promptly. The Shareholder will immediately cease and cause to be terminated any existing activities, discussions or negotiations with any parties conducted heretofore with respect to the foregoing. The Shareholder shall not take any action that would make any representation or warranty of the Shareholder contained herein untrue or incorrect or have the effect of preventing or disabling the Shareholder from performing the Shareholder’s obligations under this Agreement.

     4.2 Dissenters’ Rights. The Shareholder agrees not to exercise any rights (including, without limitation, under Section 1300 et seq. of the CGCL to demand dissenters’ rights which may arise with respect to the Merger.

     4.3 Stop Transfer. The Shareholder agrees with, and covenants to, Parent that the Shareholder shall not request that the Company register the transfer (book-entry or otherwise) of any certificate or uncertificated interest representing any of the Shares, unless such transfer is made in compliance with this Agreement.

     4.4 Disclosure. The Shareholder hereby permits Parent to publish and disclose in the Offer Documents and, if approval of the Company’s Shareholders is required under applicable law, a proxy statement (including all documents and schedules filed with the SEC), the Shareholders identity and ownership of the Shares and the nature of their commitments, arrangements and understandings under this Agreement to the extent required under the Exchange Act; provided Parent first gives the Company a written copy of such disclosure and the Company confirms in writing that such disclosure is accurate.

ARTICLE 5
Miscellaneous

     5.1 Further Assurances. Parent and the Shareholder will each execute and deliver, or cause to be executed and delivered, all further documents and instruments necessary, proper or advisable under applicable laws and regulations, to consummate and make effective the transactions contemplated by this Agreement, and use all commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations, to consummate and make effective the transactions contemplated by this Agreement.

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     5.2 Amendments; Termination. Any provision of this Agreement may be amended or waived if, but only if, such amendment or, waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement or, in the case of a waiver, by the party against whom the waiver is to be effective. This Agreement shall terminate upon the termination of the Merger Agreement in accordance with its terms; provided, however, that in such case Article 5 hereof shall survive the termination of this Agreement in its entirety.

     5.3 Remedies Cumulative. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise of any of such rights, powers or remedies by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party.

     5.4 Recovery of Attorney’s Fees. In the event of any litigation between the parties relating to this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and costs (including court costs) from the non-prevailing party, provided that if both parties prevail in part, the reasonable attorneys’ fees and costs shall be awarded by the court in such manner as it deems equitable to reflect the relative amounts and merits of the parties’ claims.

     5.5 Certain Events. Subject to Section 4.1 hereof, the Shareholder agrees that this Agreement and the obligations hereunder shall attach to the Shares and shall be binding upon any person or entity to which legal ownership or Beneficial Ownership of the Shares shall pass, whether by operation of law or otherwise, including, without limitation, the Shareholder’s heirs, guardians, administrators or successors. Notwithstanding any such transfer of Shares, the transferor shall remain liable for the performance of all obligations under this Agreement of the transferor.

     5.6 Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the written consent of the other parties hereto, except that Parent may transfer or assign its rights and obligations to any affiliate of Parent.

     5.7 Severability. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision of this Agreement in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

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     5.8 No Waiver. The failure of any party hereto to exercise any right, power or remedy provided under this Agreement or otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other party hereto with its obligations hereunder, and any custom or practice of the parties at variance with the terms hereof, shall not constitute a waiver by such party of its right to exercise any such or other right, power or remedy or to demand such compliance.

     5.9 Specific Performance. Each of the parties hereto recognizes and acknowledges that a breach by it of any covenants or agreements contained in this Agreement will cause the other party to sustain damages for which it would not have an adequate remedy at law for money damages, and therefore each of the parties hereto agrees that in the event of any such breach the aggrieved party shall be entitled to the remedy of specific performance of such covenants and agreements and injunctive and other equitable relief, without the necessity of posting bond, in addition to any other remedy to which it may be entitled at law or in equity.

     5.10 Antidilution. In the event that the Company institutes any change in the Company Common Stock by reason of stock dividends, split-ups, mergers, recapitalizations, combinations, conversions, exchanges of shares or the like, all Shares resulting from such change shall be subject to this Agreement and the prices referred to herein shall be proportionately adjusted to reflect such change.

     5.11 Shareholder Capacity. If the Shareholder is or becomes during the term hereof, or has designated or designates during the term hereof, a director of the Company, the Shareholder does not make any agreement or understanding herein in the Shareholder’s capacity as a director or on behalf of any director designated by the Shareholder, as the case may be. The Shareholder signs solely in the Shareholder’s capacity as the record and Beneficial Owner of the Shares. Nothing in this Agreement will be deemed to restrict or limit the Shareholder’s right to act in his, her or its capacity as an officer or director of the Company consistent with his, her or its fiduciary obligations in such capacity as permitted under the Merger Agreement.

     5.12 Mutual Release.

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     (a) The Shareholder, solely in such capacity as a Shareholder of the Company, hereby releases and discharges Parent, the Company, the Surviving Corporation and their respective officers, directors, employees, agents, attorneys, representatives, successors and assigns (and the respective heirs, executors, administrators, representatives, successors and assigns of such officers, directors, employees, agents, attorneys and representatives) from any and all claims, actions, causes of action, suits, debts, sums of money, controversies, agreements, promises, damages, judgments, claims and demands whatsoever, at law or in equity, which the Shareholder, solely as a result of the Shareholder’s status as a Shareholder of the Company, had or now has as of the date of this Agreement, upon or by reason of any matter, cause or thing whatsoever relating, directly or indirectly, to Parent, the Company or the Surviving Corporation; provided, however, that this release shall not cover any claims the Shareholder may have against the Parent for failure to pay the purchase price for the Shares tendered pursuant to Section 1.3 or otherwise for breach of the Merger Agreement.

     (b) Parent, the Company, the Surviving Corporation and their respective officers, directors, employees, agents, attorneys, representatives, successors and assigns (and the respective heirs, executors, administrators, representatives, successors and assigns of such officers, directors, shareholders, employees, agents, attorneys and representatives) hereby release and discharge Shareholder, solely in such capacity as a Shareholder of the Company, from any and all claims, actions, causes of action, suits, debts, sums of money, controversies, agreements, promises, damages, judgments, claims and demands whatsoever, at law or in equity, which Parent, the Company, the Surviving Corporation and their respective officers, directors, employees, agents, attorneys, representatives, successors and assigns (and the respective heirs, executors, administrators, representatives, successors and assigns of such officers, directors, shareholders, employees, agents, attorneys and representatives), had or now has as of the date of this Agreement, upon or by reason of any matter, cause or thing whatsoever relating, directly or indirectly, to Parent, the Company or the Surviving Corporation; provided, however, that this release shall not cover any claims the Parent may have against the Shareholder for breach of this Agreement.

     (c) With respect to the release under this Section 5.12, Parent, on behalf of itself, the Company and the Surviving Corporation and their respective officers, directors, employees, agents, attorneys, representatives, successors and assigns (and the respective heirs, executors, administrators, representatives, successors and assigns of such officers, directors, employees, agents, attorneys and representatives), and the Shareholder, on behalf of himself, herself or itself (as applicable) and the Shareholder’s affiliates, each (A) represents, warrants and acknowledges that he, she or it, as applicable, has been fully advised by its attorney of the contents of Section 1542 of the Civil Code of the State of California, and (B) hereby expressly waives the benefits thereof that he, she or it, as applicable, may have thereunder. Section 1542 of the Civil Code of the State of California provides as follows:

“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”

8

Parent, on behalf of itself, the Company and the Surviving Corporation and their respective officers, directors, employees, agents, attorneys, representatives, successors and assigns (and the respective heirs, executors, administrators, representatives, successors and assigns of such officers, directors, employees, agents, attorneys and representatives), and the Shareholder, on behalf of himself, herself or itself (as applicable) and the Shareholder’s affiliates, also hereby waive the benefits of, and any rights that such party may have under, any statute or common law principle of similar effect in any jurisdiction to the extent relating to the claims released by such party under this Section 5.12.

     5.13 Governing Law; Venue. This Agreement shall be governed and construed in accordance with the laws of the State of California, without regard to any applicable conflicts of law provisions (except to the extent that mandatory provisions of federal law). Each of the parties hereto irrevocably submit to the exclusive jurisdiction and venue of the courts of the State of California or of the United States of America, in each located in the County of Santa Clara, California, for the purpose of any suit, action or other proceeding arising out of this Agreement, or any of the agreements or transactions contemplated hereby, which is brought by or against any other party hereto and hereby irrevocably agree (a) that all claims in respect of any such suit, action or proceeding may be heard and determined in any such court and (b) not to commence any action suit or proceeding relating to this Agreement other than in such court. Each party hereto irrevocably and unconditionally waives and agrees not to assert in any such suit, action or proceeding, in each case, to the fullest extent permitted by applicable law, (i) any objection to the laying of venue of any such suit, action or proceeding brought in any such court, (ii) any claim that such party is not personally subject to the jurisdiction of any such court, and (iii) any claim that any such suit, action or proceeding is brought in an inconvenient forum. Each party hereto agrees that service of any process, summons, notice or document by U.S. registered mail addressed to such party shall be effective service of process for any action, suit or proceeding brought against such party in any such court. Each party hereto agrees that a final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon such party and may be enforced in any other courts to whose jurisdiction such party is or may be subject, by suit upon such judgment.

     5.14 Entire Agreement. This Agreement and the Merger Agreement constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof.

     5.15 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed to have been given at the earlier of the date personally delivered or sent by telephonic facsimile transmission (with a copy via other means specified herein) or one day after sending via nationally recognized overnight courier or five days after deposit in the United States mail, certified or registered mail, postage prepaid, return receipt requested, addressed as follows:

If to the Shareholder:	At the address set forth
	on the signature pages hereof
If to Parent:	American Medical Systems Holdings, Inc.

9

	10700 Bren Road West
	Minnetonka, Minnesota 55343
	Fax: (952) 930-6695
	Attn: Chief Executive Officer
with a copy to:	Oppenheimer Wolff & Donnelly LLP
	Plaza VII, Suite 3300
	Minneapolis, Minnesota 55402-1609
	Fax: (612) 607-7100
	Attention: Thomas A. Letscher

or to such other address as the Person to whom notice is given may have previously furnished to the others in writing in the manner set forth in this Section 5.15.

     5.16 Expenses. All costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense.

     5.17 No Third Party Beneficiaries. Except as provided in Section 5.12, this Agreement is not intended to be for the benefit of, and shall not be enforceable by, any Person other than the parties hereto and Merger Sub.

     5.18 Descriptive Headings. The descriptive headings used herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

     5.19 Counterparts. This Agreement may be signed in two counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

10

     IN WITNESS WHEREOF, the parties hereto have caused this Shareholder Agreement to be duly executed as of the day and year first above written.

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

By: 

Name:

Title:

SHAREHOLDER

Class of Stock	Shares Owned
Common Stock
		[Signature]

Name:

Address:

Telephone:

Fax:

[IF THE SHARES ARE COMMUNITY PROPERTY, PLEASE HAVE THE
SHAREHOLDER’S SPOUSE COMPLETE THE FOLLOWING AND SIGN BELOW]

		SPOUSE
Class of Stock	Shares Owned
Common Stock
		[Signature]

Name:

Address:

Telephone:

Fax:

11

EX-99.(D)(3)

Exhibit (d)(3)

LASERSCOPE
3070 Orchard Drive San Jose, CA
95134-2011

February 16, 2006

John Nealon
Senior Vice President, Business Development
American Medical Systems Holdings, Inc.
10700 Bren Road West
Minnetonka, MN 55343

     Dear Mr. Nealon:

     In connection with a possible sale or other business combination transaction involving, Laserscope, a California corporation (the “Company”) and you (the “Potential Transaction”), the Company is prepared to provide you with certain information concerning the Company and make available to you certain representatives of its financial advisor. In consideration thereof, you shall not, and you shall direct your directors, officers, employees, affiliates, managers, members, partners, representatives (including, without limitation, attorneys, accountants, consultants, bankers and financial and other advisors) and agents (collectively, “Representatives”) not to, disclose to any other person (other than your Representatives, as provided below), the following (collectively, the “Confidential Information”): the fact that information has been made available to you, that the Company is considering the Potential Transaction or that discussions or negotiations are taking place (or have taken place) concerning a Potential Transaction or any of the terms, conditions or other facts with respect thereto (including the status thereof or the existence of this letter agreement (this “Agreement”), any non-public information or materials disclosed by the Company to you, including, but not limited to the business and strategic plans, business summaries, business procedures and processes, business’ and financial forecasts and reports, prospective product offerings, pricing policies and methods, vendor and business partner identities, purchasing methods and information, operational material and manuals, financial data, accounting information and systems, customer lists, customer profiles and purchase preferences, marketing plans, market analysis reports, sales data, marketing forecasts, licensing procedures, leasing information, trademarks, service marks, copyrights, patents, proposed trademarks or service marks, patent applications, trade secrets, technical and engineering data, drawings, models, software products, source code, algorithms, object and load modules, content, formulas, design specifications, progress and development reports, employee information, corporate information, and phone lists.

     The term “Confidential Information” as used in this Agreement shall not include information that (i) is or becomes generally available to the public other than as a result of a disclosure by you or your Representatives in violation of this Agreement; (ii) was within your possession prior to its being furnished to you by or on behalf of the Company, provided that to your knowledge, the source of such information is not and was not bound at the time of delivery by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, the Company, (iii) is or becomes available to you on a non-confidential basis from a source that to your knowledge, is not and was not bound at the

American Medical Systems Holdings, Inc.
February 16, 2006
Page 2

time such information becomes available by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, the Company with respect to such information, or (iv) is independently developed by you without use of Confidential Information.

     You hereby further agree that the Confidential Information will be used solely for the purpose of evaluating the Potential Transaction described to you and that such Confidential Information will be kept strictly confidential by you and your Representatives. However, you may disclose Confidential Information to your Representatives who need to know such information solely for purposes of evaluating the Potential Transaction described to you, provided that such Representatives are informed by you of the confidential nature of such information and agree to treat such information confidentially to the same extent as though they were parties hereto. You shall be responsible for any breach of this Agreement by your Representatives.

     In the event that you or any of your Representatives are requested pursuant to, or required by, applicable law, regulation, oral questions, interrogatories, requests for information or documents in legal or arbitration proceedings, subpoena, civil investigative demand or similar legal process to disclose any Confidential Information, you will give the Company prompt written notice of such request or requirement so that the Company may seek an appropriate protective order or other appropriate remedy. If, in the absence of a protective order or other appropriate remedy, you or any of your Representatives, in the opinion of counsel, are compelled in a proceeding to disclose Confidential Information, you or such Representative may disclose only such portion of the Confidential Information which counsel advises you or such Representative is compelled to disclose, without liability under this Agreement; provided, however, that you give the Company written notice of the Confidential Information to be disclosed as far in advance of its disclosure as is practicable (but, in any event, within 24 hours of your receipt of any request), that you use reasonable efforts to obtain assurances that confidential treatment will be accorded to such Confidential Information and that you provide the Company the opportunity to intervene to preserve the confidentiality of such Confidential Information.

     You agree that money damages will not be a sufficient remedy for any breach of this Agreement by you or your Representatives and that the Company shall be entitled to specific performance and injunctive or other equitable relief as a remedy for any such breach without proof of actual damages. You agree, and to cause your subsidiaries and affiliates, not to oppose the granting of such relief, and to waive, and to cause your subsidiaries and affiliates to waive, any requirement for the securing or posting of any bond in connection with such remedy. You also agree to use your best efforts to cause your directors, officers, employees, managers, members, and partners, and to use reasonable efforts to cause your representatives (including, without limitation, attorneys, accountants, consultants, bankers and financial and other advisors) and agents to waive, any requirement for the securing or posting of any bond in connection with such remedy.

American Medical Systems Holdings, Inc.
February 16, 2006
Page 3

     We mutually agree that neither this Agreement nor any conduct by either of us or any person acting on our behalf shall be deemed to constitute a binding agreement or understanding to proceed with any Potential Transaction under consideration by the Company unless and until a final definitive agreement has been executed and delivered, and the parties hereto hereby waive, in advance, any claims (including, without limitation, breach of contract) in connection with any transactions involving the Company unless and until you and the Company shall have entered into a final definitive agreement. We also mutually agree that unless and until a final definitive agreement regarding any transactions has been executed and delivered, neither the Company nor you will be under any legal obligation of any kind whatsoever with respect to such Potential Transaction by virtue of this Agreement, except for the matters specifically agreed to herein.

     You acknowledge and agree that (a) the Company shall have no obligation to authorize or pursue with you or any other party any Potential Transaction, (b) you understand that the Company has not, as of the date hereof, authorized any such Potential Transaction and (c) the Company reserves the right, in its sole and absolute discretion, to reject all proposals and to terminate discussions and negotiations with you at any time.

     All Confidential Information disclosed under this Agreement shall remain the property of the Company and shall be returned or destroyed upon request together with all copies made of such Confidential Information by you or your Representatives, except as required to comply with a court, NASDAQ, NYSE, SEC or administrative subpoena or order, provided that you first use reasonable efforts to obtain an order preserving the confidentiality of such Confidential Information and provided that you give timely notice of the contemplated disclosure to provide the Company the opportunity to intervene to preserve the confidentiality of such Confidential Information. Subject to the preceding exception, all documents, memoranda, notes and other writings whatsoever prepared by you or your Representatives based on Confidential Information shall be destroyed and such destruction shall be certified in writing to the Company.

     Each party hereby acknowledges that it is, and that it will make each of its Representatives involved in evaluating the Confidential Information, (a) aware that the United States securities laws would restrict any person who has material non-public information about a company from purchasing or selling securities of such Company, or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities, and (b) familiar with the Securities Exchange Act of1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”) to the extent they relate to the matters referred to in this paragraph. Each party agrees that it will not use or permit any third party to use, and that it will use reasonable efforts to ensure that none of its Representatives will use or permit any third party to use, any Confidential Information in contravention of the United States securities laws, including the Exchange Act.

     Each party agrees that, for a period of two years from the date of this Agreement (the “Standstill Period”), unless such party shall have been invited in writing by the other party (it being agreed and understood that the entering into of this Agreement shall not constitute such an

American Medical Systems Holdings, Inc.
February 16, 2006
Page 4

invitation), it will not, directly or indirectly, (a) effect or seek, offer or propose to effect or participate in, or any way assist any other person to effect or seek, offer or propose to effect or participate in (i) any acquisition of any securities of the other party (including any warrant, option or other right to acquire any such securities) or assets of the other party, other than the acquisition of assets in the ordinary course of business, (ii) any tender or exchange offer, merger or other business combination involving the other party, (iii) any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the other party, or (iv) any “solicitation” of “proxies” (as such terms are used in the proxy rules of the Securities and Exchange Commission) or consents to vote any voting securities of the other party, (b) form, join or in any way participate in any “group” (as defined under the Exchange Act) with respect to the matters set forth in clause (a) above, (c) otherwise act, alone or in concert with others, to seek to control or influence the management, Board of Directors or policies of the other party, (d) seek to advise or influence any person with respect to voting any securities of the other party, ( e) demand, alone or in concert with others, a copy of the stock ledger or any other books or records of the other party, (f) have any discussions or enter into any arrangements, understandings or agreements (whether written or oral) with, or advise, finance, assist or encourage, any other person or persons in connection with the foregoing, or make any investment in any other person that engages, or offers or proposes to engage, in any of the foregoing or (g) make any publicly disclosed proposal regarding any of the foregoing (the matters referred to in the preceding clauses (a) through (g) are referred to as “Prohibited Actions”). Each party also agrees during the Standstill Period not to make any proposal or statement, or disclose any intention, plan or arrangement, whether written or oral, inconsistent with the foregoing, or request or suggest to the other party, directly or indirectly, to amend, waive or terminate any provision of this paragraph (including this sentence). If, at any time during the Standstill Period, a party is approached by any person concerning its participation in a transaction involving the other party’s assets, businesses or securities or any other Prohibited Actions, such party agrees to promptly inform the other party of the nature of such contact and, unless it is legally prohibited from doing so, the parties thereto.

     You agree that, for a period of two years from the date of this Agreement, you will not, directly or indirectly, hire or solicit for employment any officer or managerial or sales or skilled technical employee of the Company who became known to you in connection with your evaluation of a Potential Transaction; provided, however, that this provision shall not prevent hiring any such person who responds to a media advertisement, general advertisement, other solicitation not specifically directed toward employees of the Company, or to a non-directed executive search inquiry, without any direct or indirect solicitation, encouragement, contact or other interference or assistance from any of your Representatives, or who makes an unsolicited contact for employment.

     This Agreement contains the entire agreement between you and the Company concerning the subject matter hereof. No amendment, modification or discharge of this Agreement, and no waiver hereunder, shall be valid or binding unless set forth in writing and signed by you and the Company. Any such waiver by either party shall constitute a waiver only with respect to the specific matter described in such writing and shall in no way impair such party’s rights in any other respect or at any other time. Each party also agrees that no failure or delay by the

American Medical Systems Holdings, Inc.
February 16, 2006
Page 5

other party in exercising any right, power or privilege under this Agreement will operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege under this Agreement.

     The validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of California, without giving effect to its conflict of laws principles or rules. You shall irrevocably submit to the exclusive jurisdiction and venue of any court of the State of California or of the United States District Court for the Northern District of the State of California for the purpose of any suit, action or other proceeding arising out of this Agreement, or any of the agreements or transactions contemplated hereby, which is brought by or against the Company and hereby irrevocably agree (a) that all claims in respect of any such suit, action or proceeding may be heard and determined in any such court and (b) not to commence any action suit or proceeding relating to this Agreement other than in such court.

     You hereby irrevocably and unconditionally waive and agree not to assert in any such suit, action or proceeding, in each case, to the fullest extent permitted by applicable law, (i) any objection to the laying of venue of any such suit, action or proceeding brought in any such court, (ii) any claim that you are not personally subject to the jurisdiction of any such court, and (iii) any claim that any such suit, action or proceeding is brought in an inconvenient forum. You hereby agree that service of any process, summons, notice or document by overnight delivery service addressed to your Chief Executive Officer (with a copy to your counsel: Oppenheimer Wolff & Donnelly LLP, 3300 Plaza VII, 45 South Seventh Street, Minneapolis, Minnesota 55402, Attention: Thomas Letscher, Esq.) shall be effective service of process for any action, suit or proceeding brought against you in any such court. You agree that a final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon you and may be enforced in any other courts to whose jurisdiction you are or may be subject, by suit upon such judgment.

     For the convenience of the parties, any number of counterparts of this Agreement may be executed by the parties hereto. Each counterpart shall be, and shall be deemed to be, an original instrument, but all such counterparts taken together shall constitute one and the same agreement.

Remainder of Page Intentionally Left Blank

American Medical Systems Holdings, Inc.
February 16, 2006
Page 6

     Please confirm your agreement with the foregoing by signing and returning one copy of this Agreement to the undersigned, whereupon this Agreement shall become a binding agreement between you and the Company.

Very truly yours, LASERSCOPE
By:	/s/ Peter Hadrovic
	Peter Hadrovic
	Vice President, Legal Affairs and General Counsel

Accepted and agreed as of
the date first written above:

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

By:	/s/ John Nealon
	John Nealon
	Senior Vice President, Business Development