SC 14D9/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20459

SCHEDULE 14D-9

Solicitation/Recommendation Statement Under
Section 14(d)(4) of the Securities Exchange Act of 1934

(Amendment No. 2)

LASERSCOPE

(Name of Subject Company)

LASERSCOPE

(Name of Persons Filing Statement)

Common Stock, no par value

(Title of Class of Securities)

518081104

(CUSIP Number of Class of Securities)

Peter Hadrovic
Vice President, Legal Affairs and Business Development,
General Counsel and Secretary
Laserscope
3070 Orchard Drive
San Jose, California 95143-2011
(408) 943-0636

(Name, address, and telephone number of person
authorized to receive notices and communications
on behalf of the persons filing statement)

with copies to:

Richard V. Smith, Esq.
Orrick, Herrington & Sutcliffe LLP
405 Howard Street
San Francisco, CA 94105
(415) 773-5830

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

TABLE OF CONTENTS

	Item 3. Past Contacts, Transactions, Negotiations and Agreements.
	Item 4. The Solicitation or Recommendation.
	Item 8. Additional Information.
	Item 9. Material to be Filed as Exhibits. **
SIGNATURE
Exhibits Index**
EXHIBIT 99.(E)(12)

     This Amendment No. 2 amends and supplements the Solicitation/Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission (the “SEC”) on June 14, 2006, as amended to by Amendment No. 1 thereto filed with the SEC on July 5, 2006 (collectively, the “Schedule 14D-9”). The Schedule 14D-9 relates to the offer by Kermit Merger Corp. (“Purchaser”), a California corporation and an indirect, wholly owned subsidiary of American Medical Systems Holdings, Inc., a Delaware corporation (“AMS”), to purchase for cash all of the issued and outstanding shares of common stock, no par value (the “Shares”), of Laserscope, a California corporation (“Laserscope”), at a price of $31.00 per Share 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 (the “Letter of Transmittal” and, together with the Offer to Purchase, each as amended or supplemented from time to time, collectively constitute the “Offer”). The Offer is further described in a Tender Offer Statement on Schedule TO (as amended or supplemented from time to time, the “Schedule TO”) that was filed by Purchaser and AMS with the Securities and Exchange Commission on June 14, 2006. Copies of the Offer to Purchase and the Letter of Transmittal are filed as Exhibit (a)(1)(A) and Exhibit (a)(1)(B), respectively, to the Schedule TO. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Schedule 14D-9.

     This Amendment No. 2 makes certain changes to Items 3, 4, 8 and 9 of the Schedule 14D-9 and should be read in conjunction with the Schedule 14D-9.

Item 3. Past Contacts, Transactions, Negotiations and Agreements.

     Item 3 of the Schedule 14D-9 is hereby amended and supplemented by adding the following:

Merger Agreement

     Laserscope, AMS and Merger Sub have entered into an amendment to the Merger Agreement (“Amendment No. 1”) dated as of July 11, 2006 which:

• extends the expiration date of the Offer by five business days to 12:00 midnight Central time on July 19, 2006 rather than July 12, 2006;

• amends the Revised Minimum Condition to mean 49.9% of the total number of shares of Laserscope common stock outstanding at the expiration of the Offer;

• effects the waiver by AMS and Merger Sub of the conditions to the Offer pertaining to the absence of any adverse actions or proceedings, any uncured material inaccuracy in Laserscope’s representations and warranties, any uncured material failure by Laserscope to perform its covenants and any material adverse effect on Laserscope since March 31, 2006 during the five business day extension of the Offer; however, such conditions will be reinstated if the Offer is extended in accordance with the terms of the Merger Agreement beyond July 19, 2006; and

• effects a waiver by AMS and Merger Sub of their right to terminate the Merger Agreement due to Laserscope’s breach of the covenants or agreements in the Merger Agreement or due to any breach of any of the representations and warranties of Laserscope in the Merger Agreement during the five business day extension of the Offer; however, such right will be reinstated if the Offer is extended in accordance with the terms of the Merger Agreement beyond July 19, 2006.

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     This summary is qualified in its entirety by reference to Amendment No. 1, which has been filed as Exhibit (e)(11) to this Schedule 14D-9 and is hereby incorporated herein by reference.

Item 4. The Solicitation or Recommendation.

     Item 4 of the Schedule 14D-9 is hereby amended and supplemented by adding the following:

Background of the Offer

     On July 10, 2006, Martin J. Emerson, the President and Chief Executive of AMS, sent to Eric M. Reuter, the President and Chief Executive of Laserscope, a letter, the body of which reads as follows:

“Dear Eric:

As our respective legal counsel have discussed, I am writing to update you regarding the status of the senior secured financing for the pending acquisition of Laserscope by American Medical Systems, and to request that Laserscope’s board of directors consider and approve an extension to the initial tender offer period in order to accommodate the financing closing.

In the time since we executed the acquisition agreement, AMS and its advisors, bankers and lenders have worked diligently, against an admittedly aggressive schedule, to complete our public offering of convertible notes, obtain favorable bank ratings and to be in a position to close on the senior secured loan facility.

At this point in time, I am pleased to inform you that we have made very substantial progress on the senior facility. Participants in the syndication have been confirmed, and all of the material agreements for the credit facility have been fully negotiated and are ready for review by syndicate members. In short, there are no substantive issues left to be resolved that will impact the closing of this facility.

Although we have completed our negotiations, we do, however, still need to complete various mechanical steps necessary to effect the senior secured loan and be in a position to close on the facility (including obtaining consents, entering

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into control agreements with various third parties, granting mortgages, completing title work, obtaining environmental reviews of real property etc.). As this loan is secured and involves each of our subsidiaries, it is far more document intensive than other types of facilities. Our personnel and advisors and our lenders are working diligently on these items, but given the tasks that need to be completed, we believe that closing at any time before the current initial expiration time of the tender offer would be unlikely.

For this reason, AMS is requesting that Laserscope consider and approve an appropriate amendment to the Agreement and Plan of Merger, extending the initial tender offer period by five (5) business days. We are confident that this will provide adequate time to complete the financing and ensure that AMS is in a position to consummate the offer.”

     Subsequently, counsel to AMS and Laserscope exchanged drafts of Amendment No. 1. Counsel to AMS and counsel to Laserscope discussed the CIT financing, Amendment No. 1 and the conditions to consummation of the tender offer under the Merger Agreement that Laserscope must satisfy in order for AMS to be obligated to accept tendered Shares. Later in the day on July 10, 2006, the Board held a special meeting to consider the proposed amendment to the Merger Agreement. After discussion, the Board approved and adopted Amendment No. 1.

     On July 11, 2006, Laserscope, AMS and Merger Sub entered into Amendment No. 1.

Item 8. Additional Information.

     Item 8 of the Schedule 14D-9 is hereby amended and supplemented by adding the following:

Litigation

     In order to avoid the uncertainties, burden and expense of protracted litigation, the parties entered into discussions with respect to a potential settlement of the Shareholder Actions. On July 10, 2006, the plaintiffs and the named defendants in the Shareholder Actions reached a tentative settlement of the class action lawsuits and entered into a Memorandum of Understanding setting forth the terms of the proposed settlement. Among other conditions, the settlement is subject to negotiation of a final stipulation of settlement and court approval.

     Pursuant to the Memorandum of Understanding, Laserscope agreed to pay $275,000 to the plaintiffs’ counsel for their fees and expenses, subject to final approval of the settlement terms, other than the terms with respect to such fees and expenses, and to approval of such fees and expenses by the court.

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     On July 7, 2006, Bank of America Securities LLC filed a purported lawsuit in the District Court for the Southern District of New York, captioned Banc of America Securities LLC v. Laserscope, Case Number: 06 CV 5168 (the “BAS Action”), against Laserscope. The BAS Action arises out of an engagement letter between Laserscope and Bank of America Securities LLC (“BAS”) dated June 3, 2004, which Laserscope terminated effective as of July 25, 2005. The BAS Action includes an allegation that Laserscope agreed in the BAS engagement letter to use BAS as its sole financial advisor in connection with any sale of Laserscope, that Laserscope never offered to engage BAS in connection with the AMS transaction, that BAS demanded that Laserscope engage BAS as its financial advisor in connection with the AMS transaction and that Laserscope is in breach of the engagement letter. In the BAS Action, BAS seeks monetary damages for breach of the engagement letter of $75,000 for fees of BAS, plus an additional amount to be determined at trial. Laserscope intends to vigorously defend the BAS Action.

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Item 9. Material to be Filed as Exhibits. **

EXHIBIT NO.	DESCRIPTION
(a)(1)	Section 11 and Section 15 of the Offer to Purchase, dated June 14, 2006 (incorporated herein by reference to Exhibit (a)(1)(A) to the Schedule TO filed by American Medical Systems Holdings, Inc. and Kermit Merger Corp. with the Securities and Exchange Commission (the “SEC”) on June 14, 2006).
(a)(2)	Letter to Shareholders of Laserscope dated June 14, 2006.*
(a)(3)	Joint Press Release issued by American Medical Systems Holdings, Inc. and Laserscope dated June 5, 2006 (incorporated herein by reference to Exhibit 99.2 to Laserscope’s Current Report on Form 8-K filed with the SEC on June 5, 2006).
(e)(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. (incorporated herein by reference to Exhibit 2.1 to Laserscope’s Current Report on Form 8-K filed with the SEC on June 5, 2006)(Exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K and copies thereof will be furnished to the Securities and Exchange Commission supplementally upon request).
(e)(2)(i)	Form of Management Continuity Agreements between Laserscope and each of its executive officers (incorporated herein by reference to Exhibit 10.1 to Laserscope’s Current Report on Form 8-K filed with the SEC on December 28, 2005).
(e)(2)(ii)	Form of First Amendment to Management Continuity Agreements between Laserscope and each of its executive officers (incorporated herein by reference to Exhibit 10.1 to Laserscope’s Current Report on Form 8-K filed with the SEC on June 5, 2006).
(e)(3)	Form of Shareholder Agreement by and between American Medical Systems Holdings, Inc. and each of the directors and certain of the officers of Laserscope (incorporated herein by reference to Exhibit 99.1 to Laserscope’s Current Report on Form 8-K filed with the SEC on June 5, 2006).
(e)(4)	Confidentiality Agreement dated February 16, 2006 between Laserscope and American Medical Systems Holdings, Inc. (incorporated herein by reference to Exhibit (d)(3) to the Schedule TO)
(e)(5)	Form of Indemnification Agreement.

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EXHIBIT NO.	DESCRIPTION
(e)(6)	Information Statement of Laserscope pursuant to Section 14(f) of the Securities Exchange Act of 1934, as amended, and Rule 14f-1 thereunder dated June 14, 2006 (included as Schedule I hereto).*
(e)(7)	Opinion of Goldman, Sachs & Co. dated June 3, 2006 (included as Schedule II hereto).*
(e)(8)	Complaint of Mark Greenwald against Laserscope et. al., filed in the Superior Court of the State of California County of Santa Clara on June 7, 2006.
(e)(9)	Complaint of Benjamin Del Vecchio against Laserscope et. al., filed in the Superior Court of the State of California County of Santa Clara on June 7, 2006.
(e)(10)(i)	Form of Retention Agreement (for eligible finance and accounting employees).
(e)(10)(ii)	Form of Retention Agreement (for other eligible employees).
(e)(11)	Amendment to Agreement and Plan of Merger, dated as of July 11, 2006, by and among Laserscope, American Medical Systems Holdings, Inc. and Kermit Merger Corp. (incorporated herein by reference to Exhibit 2.1 to Laserscope’s Current Report on Form 8-K filed with the SEC on July 11, 2006).
(e)(12)	Memorandum of Understanding dated as of July 10, 2006 among Laserscope and the plaintiffs listed therein.
(g)(1)	Not Applicable.

*	Included with Schedule 14D-9 mailed to the shareholders of Laserscope.
**	All exhibits previously filed, other than Exhibits (e)(11) and (e)(12), which are filed herewith.

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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.

Dated: July 11, 2006

By:	/s/ Peter Hadrovic
	Name:	Peter Hadrovic
	Title:	Vice President, Legal Affairs and Business Development, General Counsel and Secretary

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Exhibits Index**

EXHIBIT NO.	DESCRIPTION
(a)(1)	Section 11 and Section 15 of the Offer to Purchase, dated June 14, 2006 (incorporated herein by reference to Exhibit (a)(1)(A) to the Schedule TO filed by American Medical Systems Holdings, Inc. and Kermit Merger Corp. with the Securities and Exchange Commission (the “SEC”) on June 14, 2006).
(a)(2)	Letter to Shareholders of Laserscope dated June 14, 2006.*
(a)(3)	Joint Press Release issued by American Medical Systems Holdings, Inc. and Laserscope dated June 5, 2006 (incorporated herein by reference to Exhibit 99.2 to Laserscope’s Current Report on Form 8-K filed with the SEC on June 5, 2006).
(e)(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. (incorporated herein by reference to Exhibit 2.1 to Laserscope’s Current Report on Form 8-K filed with the SEC on June 5, 2006)(Exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K and copies thereof will be furnished to the Securities and Exchange Commission supplementally upon request).
(e)(2)(i)	Form of Management Continuity Agreements between Laserscope and each of its executive officers (incorporated herein by reference to Exhibit 10.1 to Laserscope’s Current Report on Form 8-K filed with the SEC on December 28, 2005).
(e)(2)(ii)	Form of First Amendment to Management Continuity Agreements between Laserscope and each of its executive officers (incorporated herein by reference to Exhibit 10.1 to Laserscope’s Current Report on Form 8-K filed with the SEC on June 5, 2006).
(e)(3)	Form of Shareholder Agreement by and between American Medical Systems Holdings, Inc. and each of the directors and certain of the officers of Laserscope (incorporated herein by reference to Exhibit 99.1 to Laserscope’s Current Report on Form 8-K filed with the SEC on June 5, 2006).
(e)(4)	Confidentiality Agreement dated February 16, 2006 between Laserscope and American Medical Systems Holdings, Inc. (incorporated herein by reference to Exhibit (d)(3) to the Schedule TO)
(e)(5)	Form of Indemnification Agreement.

EXHIBIT NO.	DESCRIPTION
(e)(6)	Information Statement of Laserscope pursuant to Section 14(f) of the Securities Exchange Act of 1934, as amended, and Rule 14f-1 thereunder dated June 14, 2006 (included as Schedule I hereto).*
(e)(7)	Opinion of Goldman, Sachs & Co. dated June 3, 2006 (included as Schedule II hereto).*
(e)(8)	Complaint of Mark Greenwald against Laserscope et. al., filed in the Superior Court of the State of California County of Santa Clara on June 7, 2006.
(e)(9)	Complaint of Benjamin Del Vecchio against Laserscope et. al., filed in the Superior Court of the State of California County of Santa Clara on June 7, 2006.
(e)(10)(i)	Form of Retention Agreement (for eligible finance and accounting employees).
(e)(10)(ii)	Form of Retention Agreement (for other eligible employees).
(e)(11)	Amendment to Agreement and Plan of Merger, dated as of July 11, 2006, by and among Laserscope, American Medical Systems Holdings, Inc. and Kermit Merger Corp. (incorporated herein by reference to Exhibit 2.1 to Laserscope’s Current Report on Form 8-K filed with the SEC on July 11, 2006).
(e)(12)	Memorandum of Understanding dated as of July 10, 2006 among Laserscope and the plaintiffs listed therein.
(g)(1)	Not Applicable.

*	Included with Schedule 14D-9 mailed to the shareholders of Laserscope.
**	All exhibits previously filed, other than Exhibits (e)(11) and (e)(12), which are filed herewith.

EX-99.(E)(12)

EXHIBIT (e)(12)

MEMORANDUM OF UNDERSTANDING

     The plaintiffs and defendants in the actions styled Del Vecchio v. Laserscope, et al., Case No. 1:06-CV-065047 and Greenwald v. Laserscope, et al., Case No. 1:06-CV-065035, both pending in the Santa Clara County Superior Court (the “Court”), have reached an agreement in principle providing for the settlement of the actions (collectively, the “Actions”) on the terms and subject to the conditions set forth in this Memorandum of Understanding (the “MOU”), subject to Court approval (the “Settlement”):

     WHEREAS, on June 5, 2006, Laserscope (“Laserscope”) announced that its board of directors had unanimously approved an agreement and plan of merger (the “Merger Agreement”), pursuant to which, among other things, American Medical Systems Holdings, Inc. (“AMS”) would acquire the outstanding shares of common stock of Laserscope via a tender offer and subsequent short-form merger for $31.00 per share (the “Acquisition”);

     WHEREAS, on June 7, 2006, plaintiff Del Vecchio commenced an action against Laserscope and its directors (“Defendants”) in the Court, challenging the Merger Agreement on behalf of Laserscope’s common stockholders;

     WHEREAS, on June 7, 2006, plaintiff Greenwald commenced an action against Laserscope and its directors (“Defendants”) in the Court, challenging the Merger Agreement on behalf of Laserscope’s common stockholders;

     WHEREAS, the Actions allege, inter alia, that Defendants breached their fiduciary duties, and/or aided and abetted other Defendants’ breaches of their fiduciary duties by, among other things, failing to disclose all material information to Laserscope’s shareholders in connection with the Acquisition;

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     WHEREAS, on June 14, 2006, AMS filed with the Securities and Exchange Commission (the “SEC”) a Schedule TO with respect to the Acquisition and subsequently mailed to Laserscope shareholders an Offer to Purchase in connection with the Acquisition and on the same date Laserscope filed with the SEC and mailed to shareholders a Schedule 14D-9 (the “14D-9”) with respect to the Acquisition (collectively, the “Tender Offer Documents”);

     WHEREAS, after reviewing the Tender Offer Documents, on June 27, 2006, Plaintiffs’ counsel communicated with counsel for Defendants setting forth, inter alia, the terms upon which Plaintiffs would consider a settlement of the Actions (the “Settlement Communication”);

     WHEREAS, following the receipt of the Settlement Communication by counsel for Defendants, the Plaintiffs and Defendants (collectively the “Parties”) engaged in negotiations pursuant to which Defendants agreed to file with the SEC an amended 14D-9 to make supplemental disclosures to Laserscope shareholders, as set forth in ¶1 below;

     WHEREAS, the Parties recognize the substantial time and expense that would be incurred by further litigation in this matter and the uncertainties inherent in any such litigation;

     WHEREAS, the Parties have concluded that their interests would be best served by a settlement of the Actions herein; and

     WHEREAS, Defendants deny all allegations of wrongdoing, fault, liability or damage to Plaintiffs and the putative class, deny that they engaged in any wrongdoing, deny that they committed any violation of law, deny that they acted improperly in any way, believe that they acted properly at all times, and believe the Actions have no merit, but wish to settle the Actions on the terms and conditions stated in this MOU in order to eliminate the burden and expense of further litigation, and to put the Released Claims (defined below) to rest, without in any way acknowledging any wrongdoing, fault, liability or damage to Plaintiffs and the putative class.

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     NOW THEREFORE THE PARTIES AGREE TO SETTLE THESE ACTIONS (SUBJECT TO APPROVAL OF THE COURT) ON THE FOLLOWING TERMS:

     1. The Parties agree that as a result of the Actions and negotiations Defendants made supplemental disclosures contained in an Amendment No. 1 to the 14D-9, attached hereto as Exhibit A, which was filed with the SEC on or about July 5, 2006 (the “Amended 14D-9”);

     2. Without admitting any wrongdoing, Defendants acknowledge that the pendency and prosecution of the Actions, and the efforts of the Plaintiffs and Plaintiffs’ counsel, were factors underlying their decision to make the additional disclosures;

     3. Defendants will provide Plaintiffs’ counsel in the Actions with limited confirmatory discovery, including such documents and interviews as may be reasonably requested by Plaintiffs’ counsel at times mutually agreed upon by the Parties to confirm the fairness and adequacy of the Settlement and the disclosures relating to the Acquisition (the “Settlement-Related Proceedings”).

     4. The parties to the Actions will use their best efforts to agree upon, execute and present to the Court within thirty (30) days of the date hereof a formal stipulation of settlement (“Stipulation”) and such other documents as may be necessary and appropriate to obtain the prompt approval by the Court of the Settlement and the dismissal with prejudice of the Actions in the manner contemplated herein and by the Stipulation.

     5. Pending the negotiation and execution of the Stipulation, all proceedings in the Actions, except for Settlement-Related Proceedings, shall be stayed, and the Parties shall take such actions as are necessary to accomplish the same. The Stipulation shall provide that all proceedings in the Actions, except for Settlement-Related Proceedings, shall be stayed until the Settlement-Related Proceedings are concluded.

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     6. The Stipulation shall include, among other things, the following provisions:

          (a) for the certification as a non-opt out class for settlement purposes of all holders of Laserscope common stock as of June 5, 2006 through and including the date of the closing of the Acquisition, including any and all of their respective successors in interest, predecessors, representatives, trustees, executors, administrators, heirs, assigns or transferees, immediate and remote, and any person or entity acting for or on behalf of, or claiming under, any of them, and each of them (the “Class”). Excluded from the Class are Defendants, members of the immediate family of any individual Defendant, any entity which a Defendant has or had a controlling interest, officers of Laserscope and the legal representatives, agents, executors, heirs, successors or assigns of any such excluded person;

          (b) for the complete discharge, dismissal with prejudice, settlement and release of all claims, demands, rights, actions or causes of action, liabilities, damages, losses, obligations, judgments, suits, injunctions, fees, expenses, costs, matters and issues of any kind or nature whatsoever, whether known or unknown, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, hidden or concealed, matured or unmatured, that have been, could have been, or in the future can or might be asserted in the Actions or in any court, tribunal or proceeding (including, but not limited to, any claims arising under federal or state statutory or common law relating to alleged fraud, breach of any duty, negligence, violations of the federal securities laws or otherwise) by or on behalf of any member of the Class (whether individual, class, derivative, representative, legal, equitable or any other type or in any other capacity), against Defendants, AMS, and/or their respective families, parent entities, associates, affiliates or subsidiaries, and each and all of their respective past, present or future officers, directors, stockholders, agents, representatives, employees, attorneys, financial or investment advisors, advisors, consultants, accountants, investment bankers, commercial bankers, trustees, engineers, agents, insurers, co-insurers and reinsurers, heirs, executors, trustees, general or limited partners or partnerships, limited liability companies, members, investors, heirs, executors, personal or legal representatives, estates, administrators, predecessors,

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successors and assigns(collectively, the “Released Persons”), whether or not any such Released Persons were named, served with process or appeared in the Actions which have arisen, could have arisen, arise now or hereafter arise out of, or relate in any manner to the allegations, facts, events, Acquisition, matters, acts, occurrences, statements, representations, misrepresentations, omissions, or any other matter, thing or cause whatsoever, or any series thereof, embraced, involved or set forth in, or referred to or otherwise related to: (i) the Acquisition, the Merger Agreement or any amendment thereto; (ii) the fiduciary obligations of any of the Released Persons in connection with the Acquisition, or any amendment thereto; (iii) the negotiations in connection with the Acquisition, or any amendment or supplement thereto; and (iv) the disclosure obligations of any of the Released Persons in connection with the Acquisition, or any amendment thereto including any allegations of misrepresentations and/or omissions in the Tender Offer Documents and exhibits thereto or any amendment thereto, including the Amended 14D-9 (collectively, the “Settled Claims”); provided however, that the Settled Claims shall not include the right of the Plaintiffs or any members of the Class to enforce in the Court the terms of the Stipulation;

          (c) that the Released Persons release Plaintiffs, members of the Class and their counsel, from all claims arising out of the instituting, prosecution, settlement or resolution of the Actions, provided however, that the Released Persons shall retain the right to enforce in the Court the terms of the Stipulation or this MOU;

          (d) that the Court’s order approving the Settlement and dismissing with prejudice the Actions will permanently bar and enjoin the institution and prosecution by Plaintiffs and any member of the Class of any other action against any Released Party in any court asserting any Settled Claims;

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          (e) that Defendants have denied, and continue to deny, that any of them have committed or have threatened to commit any violations of law or breaches of duty to the Plaintiffs, the Class or anyone else;

          (f) that Defendants are entering into the Settlement solely because it will eliminate the uncertainty, distraction, burden and expense of further litigation;

          (g) that the Settlement is subject to the successful completion of the Acquisition, including any amendment thereto;

          (h) that in the event the Settlement does not become final for any reason, Defendants reserve the right to oppose certification of any class in future proceedings; and

          (i) that subject to the order of the Court, pending final determination of whether the Settlement should be approved, Plaintiffs and all members of the Class, and any of them, are barred and enjoined from commencing, prosecuting, instigating or in any way participating in the commencement or prosecution of any action asserting any Settled Claims, either directly, representatively, derivatively or in any other capacity, against any Released Person.

     7. This MOU shall be null and void and of no force and effect, unless otherwise agreed to by the Parties pursuant to the terms hereof, if: (a) the Settlement does not obtain final Court approval for any reason, provided, however, that failure of the Court to approve the amount of attorneys’ fees provided for in ¶14 shall not void this MOU or the Stipulation; (b) Plaintiffs in the Actions conclude, after obtaining any confirmatory discovery requested and agreed upon, that the Settlement memorialized herein is not fair, adequate, and in the best interests of the Class; or (c) the Acquisition, including any amendment thereto, is not concluded for any other reason. In the event any Party withdraws from the Settlement, this MOU shall not be deemed to prejudice in any way the respective positions of the Parties with respect to the Actions, and neither the existence of this MOU, nor its contents, nor the negotiations leading to it, shall be admissible in evidence or shall be referred to for any purpose in the Actions or in any other litigation or proceeding.

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     8. The Stipulation shall provide a statement that: (a) the release contemplated by the Stipulation shall extend to claims that the parties granting the release (the “Releasing Parties”) do not know or suspect to exist at the time of the release, which if known, might have affected the Releasing Parties’ decision to enter into the release; (b) the Releasing Parties shall be deemed to relinquish, to the extent applicable, and to the full extent permitted by law, the provisions, rights and benefits of §1542 of the California Civil Code; and (c) the Releasing Parties shall be deemed to waive any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, which is similar, comparable or equivalent to California Civil Code §1542.

     9. This MOU will be executed by counsel for the Parties to the Actions, each of whom represents and warrants that they have the authority from their client(s) to enter into this MOU and bind their clients thereto, that Plaintiffs are the only holders and owners of their claims and causes of action asserted in the Actions, and that none of Plaintiffs’ claims or causes of action referred to in any complaint in the Actions or this MOU has been assigned, encumbered or in any manner transferred in whole or in part.

     10. This MOU, the Stipulation and the Settlement shall be governed by and construed in accordance with the laws of the State of California, without regard to California’s principles governing choice of law. The Parties agree that any dispute arising out of or relating in any way to this MOU, the Stipulation or the Settlement shall not be litigated or otherwise pursued in any forum or venue other than the Court, and the Parties expressly waive any right to demand a jury trial as to any such dispute.

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     11. This MOU may be modified or amended only by a writing, signed by all of the Parties hereto, that refers specifically to this MOU.

     12. The provisions contained in this MOU shall not be deemed a presumption, concession or admission by any Defendant of any fault, liability or wrongdoing as to any facts or claims that have been or might be alleged or asserted in the Actions, or any other action or proceeding that has been, will be, or could be brought, and shall not be interpreted, construed, deemed, invoked, offered, or received in evidence or otherwise used by any person in the Actions, or in any other action or proceeding, whether civil, criminal or administrative, for any purpose other than as provided expressly herein.

     13. Notwithstanding the intention of the Parties to enter into a Stipulation, this MOU shall be binding upon and inure to the benefit of the Parties and their respective legal representatives, agents, executors, heirs, successors and assigns.

     14. Subject to the terms and conditions of this MOU, the terms and conditions of the Stipulation contemplated hereby and subject to final approval of the Settlement and such fees by the Court, Laserscope, on behalf of itself and for the benefit of the other defendants in the Actions and Released Persons, shall pay $275,000 to Plaintiffs’ counsel for their fees and expenses incurred in connection with the Actions. In the event that the Court shall award a lesser amount of fees and expenses to Plaintiffs’ counsel, the remaining terms of the Stipulation shall remain in full force and effect. Laserscope or its successor shall pay the fees and expenses award to Plaintiffs’ counsel in the Actions within five (5) business days of the entry of the Court’s final order approving the Settlement and dismissing the Actions with prejudice. In the event that such order is reversed or modified on appeal, Plaintiffs’ counsel shall refund to Defendants the advanced amount and all interest accrued or accumulated thereon. Except as provided herein, the Released Persons shall bear no other expenses, costs, damages, or fees alleged or incurred by any of the named Plaintiffs, by any member of the Class, or by any of their attorneys, experts, advisors, agents or representatives.

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     15. Defendants shall pay all reasonable costs and expenses incurred in providing notice of the Settlement to the members of the Class, with the understanding that notice shall be effected by mail.

     16. This MOU may be executed in any number of actual or telecopied counterparts and by each of the different Parties on several counterparts, each of which when so executed and delivered will be an original. The executed signature page(s) from each actual or telecopied counterpart may be joined together and attached and will constitute one and the same instrument.

     17. IN WITNESS WHEREOF, the Parties have executed this MOU effective as of the date set forth below.

DATED: July 10, 2006	LERACH COUGHLIN STOIA GELLER
	RUDMAN & ROBBINS LLP
	DARREN J. ROBBINS
	RANDALL J. BARON
	STEPHEN J. ODDO
	/s/ Stephen Oddo
	STEPHEN J. ODDO
	655 West Broadway, Suite 1900
	San Diego, CA 92101
	Telephone: 619/231-1058
	619/231-7423 (fax)

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ADEMI & O’REILLY, LLP

GURI ADEMI

SHPETIM ADEMI

3620 East Layton Avenue

Cudahy, WI 53110

Telephone: 414/482-8000

414/482-8001 (fax)

JOHNSON LAW FIRM, A.P.C.

FRANK J. JOHNSON

BRETT M. WEAVER

402 West Broadway, 27th Floor

San Diego, CA 92101

Telephone: 619/230-0063

619:230-1839 (fax)

CROWLEY DOUGLAS & NORMAN, LLP

RICHARD E. NORMAN

1301 McKinney Street, Suite 3500

Houston, TX 77010-3034

Telephone: 713/651-1771

713/651-1775 (fax)

Attorneys for Plaintiff

DATED: July 10, 2006	ORRICK HERRINGTON & SUTCLIFFE LLP
	JAMES KRAMER
	/s/ James Kramer
	JAMES KRAMER
	The Orrick Building
	405 Howard Street
	San Francisco, CA 94105
	Telephone: 415/773-5700
	415/773-5759 (fax)
	Attorneys for Defendants

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