S-4

As filed with the Securities and Exchange Commission on August 14, 2009

Registration No. 333-                

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

(exact name of registrant as specified in its charter)

Delaware	5063	41-1978822
(state or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code)	(I.R.S. employer identification no.)

10700 Bren Road West

Minnetonka, Minnesota 55343

Telephone: (952) 930-6000

(Address, including ZIP code, and telephone number, including area code, of registrant’s principal executive offices)

Anthony P. Bihl, III

President and Chief Executive Officer

American Medical Systems Holdings, Inc.

10700 Bren Road West

Minnetonka, Minnesota 55343

Telephone: (952) 930-6000

(Name, address, including ZIP code, and telephone number, including area code, of agent for service)

With Copies to:

Charles K. Ruck Witold Balaban Latham & Watkins LLP 650 Town Center Drive, Suite 2000 Costa Mesa, California 92626 Telephone: (714) 540-1235 Alan F. Denenberg Davis Polk & Wardwell LLP 1600 El Camino Real Menlo Park, California 94025 Telephone: (650) 752-2000

TABLE OF ADDITIONAL REGISTRANTS

(Exact Name of Registrant as Specified in Charter)	(State or Other Jurisdiction of Incorporator or Organization)	(I.R.S. Employer Identification Number)
American Medical Systems, Inc.	Delaware	13-4018241
AMS Sales Corporation	Delaware	41-2018414
AMS Research Corporation	Delaware	13-3798523
Laserscope	California	77-0049527

(Address, including zip code, and telephone number, including area code, of additional registrant’s principal executive offices)

Each Additional Registrant’s principal executive office and telephone number is

10700 Bren Road West, Minnetonka, Minnesota 55343 and (952) 930-6000, respectively

Approximate date of commencement of proposed sale to the public: The offering of the securities will commence promptly following the filing date of this Registration Statement. No tendered securities will be accepted for exchange until this Registration Statement has been declared effective.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  þ	Accelerated filer  ¨	Non-accelerated filer  ¨	Smaller reporting company  ¨
	(Do not check if a smaller reporting company)

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ¨

Exchange Act Rule 14d-1(d) (Cross Border Third-Party Tender Offer)  ¨

CALCULATION OF REGISTRATION FEE

Title of each class of Securities to be registered	Amount to be registered	Proposed maximum aggregate offering price(1)	Amount of registration fee
3.75% Convertible Senior Subordinated Notes due 2041	$250,000,000(2)	$250,000,000	$13,950
Common Stock, $.01 par value	12,882,946 shares(3)	(3)	(3)
Guarantee(4)	(5)	(5)	(5)

(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(f) under the Securities Act of 1933, as amended.

(2) Represents the maximum aggregate principal amount of American Medical Systems Holdings, Inc.’s 3.75% Convertible Senior Subordinated Notes due 2041 that may be issued in the exchange offer to which this Registration Statement relates.

(3) The number of shares of common stock to be issued upon conversion of the 3.75% Convertible Senior Subordinated Notes due 2041 was calculated based on the minimum initial conversion price of $19.4055 per share (which represents the maximum amount of shares issuable). In addition to the shares set forth in the table, the amount to be registered includes an indeterminate number of shares issuable upon conversion of the 3.75% Convertible Senior Subordinated Notes due 2041, as such amount may be adjusted due to the anti-dilution provisions applicable to the 3.75% Convertible Senior Subordinated Notes due 2041 or otherwise pursuant to the terms of the 3.75% Convertible Senior Subordinated Notes due 2041. Pursuant to Rule 457(i) under the Securities Act, there is no filing fee with respect to the shares of common stock issuable upon such conversion of the 3.75% Convertible Senior Subordinated Notes due 2041 registered hereby.

(4) Guarantees are provided by American Medical Systems, Inc., AMS Sales Corporation, AMS Research Corporation and Laserscope, as wholly-owned subsidiaries of American Medical Systems Holdings, Inc.

(5) No separate consideration will be received for such guarantees and, pursuant to Rule 457(n), no separate registration fee is payable for such guarantees.

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a) may determine.

The information in this prospectus may change. We may not complete the exchange offer and issue these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer is not permitted.

PRELIMINARY PROSPECTUS DATED AUGUST 14, 2009

PROSPECTUS

OFFER TO EXCHANGE

3.75% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2041

FOR UP TO $250,000,000 OF OUR

3.25% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2036

Upon the terms and subject to the conditions set forth in this prospectus and the related letter of transmittal, we are offering to exchange $1,000 principal amount of our new 3.75% Convertible Senior Subordinated Notes due 2041, or the 2041 Notes, for each $1,000 principal amount of our 3.25% Convertible Senior Subordinated Notes due 2036, or the 2036 Notes, for up to a maximum of $250,000,000 aggregate principal amount of our 2036 Notes. In the event that more than $250,000,000 aggregate principal amount of the 2036 Notes is validly tendered and not validly withdrawn, such notes will be subject to proration as described in “The Exchange Offer—Maximum exchange amount; proration.” We will also pay in cash accrued and unpaid interest on 2036 Notes accepted for exchange from the last applicable interest payment date to, but excluding, the date on which the exchange of 2036 Notes accepted for exchange is settled, which we refer to as the Settlement Date. We refer to this offer as the Exchange Offer.

The Exchange Offer is open to all holders of our outstanding 2036 Notes. The Exchange Offer will expire at midnight, New York City time, on September 11, 2009 (which is the end of the day on September 11, 2009), unless extended or earlier terminated by us. We refer to that date and time, as the same may be extended or earlier terminated as the Expiration Date. You may withdraw your tendered 2036 Notes at any time prior to the Expiration Date under the circumstances described in this prospectus and the letter of transmittal.

The 2041 Notes will initially be our unsecured senior subordinated obligations, and will be guaranteed on an unsecured senior subordinated basis by certain of our subsidiaries as described herein.

The 2041 Notes will be convertible, at the holder’s option and only under certain circumstances, into cash up to the aggregate principal amount of the 2041 Notes to be converted and shares of our common stock in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the 2041 Notes being converted at an initial conversion rate of 51.5318 shares of our common stock per $1,000 principal amount of 2041 Notes (equivalent to an initial conversion price of approximately $19.4055 per share of common stock), subject to adjustment. The 2041 Notes will be redeemable by us prior to maturity under certain circumstances described in this prospectus and we may be required to repurchase the 2041 Notes at the option of holders on September 15, 2016 or following a fundamental change. The 2041 Notes will be issued only in denominations of $1,000 or multiples thereof.

The Exchange Offer is conditioned on (i) at least $100,000,000 aggregate principal amount of the 2036 Notes being validly tendered and not validly withdrawn, (ii) the last reported sale price of our common stock on The NASDAQ Global Select Market not exceeding $17.64 per share on the Expiration Date and (iii) the satisfaction of certain other customary conditions. We may waive any of the conditions to the Exchange Offer other than the condition that the registration statement of which this prospectus forms a part be declared effective by the Commission. See “The Exchange Offer—Conditions to the Exchange Offer.”

Our common stock is traded on The NASDAQ Global Select Market under the symbol “AMMD.” The last reported sale price of our common stock on August 13, 2009 was $14.98 per share. The 2041 Notes will not be listed on any national securities exchange, but the common stock underlying the 2041 Notes will be approved for listing by The NASDAQ Global Select Market upon issuance.

We urge you to carefully read the “Risk factors ” section beginning on page 27 of this prospectus before you make any decision regarding the Exchange Offer.

None of us, our Board of Directors, the Dealer Managers, the Exchange Agent, the Information Agent or any other person is making any recommendation as to whether or not you should tender your 2036 Notes for exchange in the Exchange Offer. You must make your own decision whether to tender 2036 Notes in the Exchange Offer, and, if so, the amount of 2036 Notes to tender.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The Sole Lead Dealer Manager for the Exchange Offer is:

J.P. Morgan

The Co-Dealer Manager for the Exchange Offer is:

Goldman, Sachs & Co.

The date of this prospectus is                     , 2009.

Table of contents

	Page
Forward-looking statements	1
Where you can find more information	2
Questions and answers about the Exchange Offer	4
Summary	12
Risk factors	27
Selected historical financial data	52
Use of proceeds	55
Ratio of earnings to fixed charges	55
Capitalization	56
The Exchange Offer	57
Price range of common stock and dividend policy	73
Description of other indebtedness	74
Description of the 2041 notes	76
United States federal income tax consequences	118
Interests of directors and executive officers	127
The Dealer Managers	127
The exchange agent	128
The information agent	128
Legal matters	129
Experts	129

American Medical Systems Holdings, Inc. is a Delaware corporation. Each of our subsidiary guarantors, American Medical Systems, Inc., AMS Sales Corporation and AMS Research Corporation, are Delaware corporations and are our wholly owned subsidiaries. Laserscope, another subsidiary guarantor and wholly-owned subsidiary, is a California corporation. Our principal executive offices and those of our subsidiary guarantors are each located at 10700 Bren Road West, Minnetonka, Minnesota 55343, and the telephone number at that address is (952) 930-6000. Our website is located at http://www.americanmedicalsystems.com. The information in our website is not part of this prospectus.

Acticon, Apogee, AMS Ambicor, AMS 650, AMS 700, AMS 700 CX, AMS 700 Ultrex, AMS 800 Urinary Control System, BioArc SP, BioArc SP, BioArc TO, Dura II, Her Option, In-Fast Ultra, InhibiZone, InteDerm, InteGraft, InteMesh, IntePro, InteLata, InteX—en LP, InVance, Monarc, Parylene, Perigee, Solutions for Life, SPARC, Straight-In, TherMatrx, UroLume and WomenShare are trademarks of ours or our subsidiaries.

None of us, our Board of Directors, the Dealer Managers, the Exchange Agent, the Information Agent or any other person is making any representation to you regarding the legality of a tender

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of 2036 Notes by you under applicable laws. You should consult with your own advisors as to legal, tax, business, financial and related aspects of tendering your 2036 Notes in the Exchange Offer.

In making a decision to tender 2036 Notes in the Exchange Offer, you must rely on your own examination of our business and the terms of the Exchange Offer, including the merits and risks involved. No person has been authorized to give any information or make any representation concerning us, the Exchange Offer or the 2041 Notes (other than as contained in this prospectus and the related letter of transmittal), and, if given or made, that other information or representation should not be relied upon as having been authorized by us, the Dealer Managers, the Information Agent, the Exchange Agent or the Trustee. Neither we, our subsidiary guarantors nor any of their respective representatives are making an offer to sell these securities in any jurisdiction where the Exchange Offer is not permitted. You should not assume that the information contained or incorporated by reference in this prospectus is accurate as of any date other than the date on the front cover of this prospectus or the date of the incorporated document, as applicable.

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Forward-looking statements

This prospectus and the documents incorporated or deemed to be incorporated by reference herein or therein contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. These statements often contain words such as “may,” “should,” “could,” “expects,” “seeks to,” “anticipates,” “plans,” “believes,” “estimates,” “intends,” “predicts,” “projects,” “potential” or “continue” or the negative of such terms and other comparable terminology, although not all forward-looking statements contain these identifying words. All statements contained or incorporated by reference in this prospectus regarding our future strategy, future operations, projected financial position, estimated future revenues, projected costs, future prospectus and the future of our industries and results are forward-looking statements.

You should not place undue reliance on our forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control. Our forward-looking statements are based on the information currently available to us and speak only as of the date on the cover of this prospectus, or, in the case of forward-looking statements in the documents incorporated by reference, as of the date of filing of the document that includes the statement. New risks and uncertainties arise from time to time, and it is impossible for us to predict these matters or how they may affect us. Over time, our actual results, performance or achievements will likely differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements, and such difference might be significant and materially adverse to our security holders. We do not undertake and specifically decline any obligation to update any forward-looking statements or to publicly announce the results of any revisions to any statements to reflect new information or future events or developments.

We have identified some of the important factors that could cause future events to differ from our current expectations and they are described in this prospectus under the caption “Risk factors” as well as in our most recent Annual Report on Form 10-K for the year ended January 3, 2009, including without limitation under the captions “Risk Factors,” “Management Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures About Market Risk,” in our most recent Quarterly Report on Form 10-Q for the period ended July 4, 2009 and in other documents that we may file with the SEC, all of which you should review carefully.

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Where you can find more information

Available information

We have filed with the SEC a registration statement on Form S-4 under the Securities Act of 1933, as amended (the “Securities Act”), to register the offer of the 2041 Notes and exchange of the 2036 Notes and a tender offer statement on Schedule TO under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This prospectus does not contain all of the information included in the registration statement or the Schedule TO or the exhibits to such filings. We strongly encourage you to read carefully the registration statement, the Schedule TO and the exhibits to such filings.

We file annual, quarterly and current reports, proxy statements and other information with the SEC. These reports, proxy statements and other information that we file with the SEC can be read and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 to obtain further information on the operation of the Public Reference Room. The SEC maintains an internet website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC, including us. The SEC’s internet website’s address is http://www.sec.gov. In addition, our common stock is listed on The NASDAQ Global Select Market under the ticker symbol “AMMD,” and our reports and other information can be inspected at the offices of The NASDAQ Global Select Market, One Liberty Plaza, 165 Broadway New York, New York 10006.

Our internet website is http://www.americanmedicalsystems.com. We make available free of charge on or through our internet website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Any internet addresses provided in this prospectus are for informational purposes only and are not intended to be hyperlinks. Accordingly, no information in any of these internet addresses is included or incorporated herein.

Incorporation by reference

The SEC allows us to “incorporate by reference” information that we file with it. This means that we can disclose important information to you, including business and financial information, by referring you to other documents. Any information we incorporate in this manner is considered part of this prospectus except to the extent updated and superseded by information contained in this prospectus or in documents incorporated by reference in this prospectus. Some information that we file with the SEC after the date of this prospectus, and until the completion of the Exchange Offer, will automatically update and supersede the information contained in this prospectus.

We incorporate by reference the following documents that we have filed with the SEC:

Our SEC filings (file no. 1-14989)	Period for or date of filing
Annual Report on Form 10-K	Year Ended January 3, 2009
Quarterly Reports on Form 10-Q	Quarters Ended April 4, 2009 and July 4, 2009
Current Reports on Form 8-K	February 12, 2009, February 17, 2009, and August 4, 2009 (Items 8.01 and 9.01)
The description of our common stock contained in the Registration Statement on Form 8-A	May 31, 2000

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We also incorporate by reference any filings that we make with the SEC in the future under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, until we complete the Exchange Offer, including between the date of this prospectus and the date on which the registration statement of which this prospectus forms a part is declared effective. However, we are not incorporating by reference any information furnished under Item 2.02 or Item 7.01 of Form 8-K into any filing under the Securities Act or the Exchange Act or into this prospectus.

Any statement contained in a document incorporated by reference, or deemed to be incorporated by reference, into this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein, therein or in any other subsequently filed document which also is incorporated by reference in this prospectus modifies or supersedes that statement. Any such statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

We will provide without charge, upon written or oral request, a copy of any or all of the documents that are incorporated by reference into this prospectus and a copy of any or all other contracts, agreements or documents which are referred to in this prospectus or that are exhibits to the registration statement of which this prospectus is a part. Requests should be directed to: American Medical Systems Holdings, Inc., 10700 Bren Road West, Minnetonka, Minnesota 55343, Attention: Corporate Secretary; telephone number: (952) 930-6000. You also may review a copy of the registration statement and its exhibits and the Schedule TO and its exhibits at the SEC’s Public Reference Room in Washington, D.C., as well as through the SEC’s internet website (See “—Available information” above).

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Questions and answers about the Exchange Offer

These answers to questions that you may have as a holder of our 2036 Notes are highlights of selected information included elsewhere or incorporated by reference in this prospectus. To fully understand the Exchange Offer and the other considerations that may be important to your decision about whether to participate in the Exchange Offer, you should carefully read this prospectus in its entirety, including the section entitled “Risk factors,” as well as the information incorporated by reference in this prospectus. See the section of this prospectus entitled “Where you can find more information.”

Why are you making the Exchange Offer?

Holders of 2036 Notes may require us to repurchase all or a portion of their 2036 Notes on certain future dates, the first of which will occur on July 1, 2013. The purpose of the Exchange Offer is to provide us with improved financial flexibility by allowing us to exchange a portion of the 2036 Notes with the 2041 Notes. The 2041 Notes would provide for only one future date, September 15, 2016, when holders may require us to repurchase all or a portion of the 2041 Notes. The 2041 Notes also extend the maturity of the debt to 2041 to the extent of the 2036 Notes exchanged.

What securities are the subject of the Exchange Offer?

The securities that are the subject of the Exchange Offer are our 2036 Notes. As of the date of this prospectus, the aggregate principal amount of 2036 Notes outstanding was approximately $312,000,000.

Are there any conditions of the Exchange Offer?

Yes. The Exchange Offer is conditioned on (i) at least $100,000,000 aggregate principal amount of the 2036 Notes being validly tendered and not validly withdrawn, (ii) the last reported sale price of our common stock on The NASDAQ Global Select Market not exceeding $17.64 per share on the Expiration Date of the Exchange Offer and (iii) satisfaction of certain customary conditions. We may waive, in accordance with applicable law, any of the conditions to the Exchange Offer except for the condition that the registration statement of which this prospectus is a part be declared effective by the Commission. See “The Exchange offer—Conditions to the Exchange Offer.”

What aggregate principal amount of 2036 Notes is being sought in the Exchange Offer?

Assuming the conditions for the tender are satisfied, we will accept for exchange up to $250,000,000 aggregate principal amount of 2036 Notes. In the event that more than $250,000,000 aggregate principal amount of the 2036 Notes is validly tendered and not validly withdrawn, such notes will be subject to proration as described in “The Exchange Offer—Maximum exchange amount; proration.”

How soon must I act if I decide to participate in the Exchange Offer?

Unless we extend the Expiration Date, the Exchange Offer will expire on September 11, 2009 at midnight (which is the end of the day on September 11, 2009), New York City time. The Exchange

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Agent must receive all required documents and instructions on or before September 11, 2009 or, subject to guaranteed delivery procedures, you will not be able to participate in the Exchange Offer.

What will I receive in the Exchange Offer if my 2036 Notes are accepted for exchange?

Upon the terms and subject to the conditions set forth in this prospectus and the related letter of transmittal, we are offering to exchange $1,000 principal amount of our new 2041 Notes for each $1,000 principal amount of our 2036 Notes. We will only issue 2041 Notes in denominations of $1,000 or multiples thereof. We will pay in cash accrued and unpaid interest on 2036 Notes accepted for exchange from the last applicable interest payment date to, but excluding, the date on which the exchange of 2036 Notes accepted for exchange is settled, or the Settlement Date.

How does the interest rate on the 2041 Notes offered in the Exchange Offer compare to the interest rate on the 2036 Notes?

Holders of 2041 Notes will receive interest payments at an annual rate of 3.75%. Interest will be payable on the 2041 Notes on March 15 and September 15 of each year, beginning on March 15, 2010, until the 2041 Notes mature on September 15, 2041, unless earlier converted, redeemed or repurchased. See “Description of the 2041 Notes—Interest” and “Summary—Summary of material of differences between the 2041 Notes and the 2036 Notes.”

If you do not exchange all of your 2036 Notes in the Exchange Offer, interest will continue to be payable on your 2036 Notes not tendered and accepted for exchange at an annual rate of 3.25%. Interest on the 2036 Notes is payable on January 1 and July 1 of each year until July 1, 2036, unless earlier converted, redeemed or repurchased.

How do the conversion price and conversion rate of my 2036 Notes compare with the conversion price and conversion rate of the 2041 Notes offered in the Exchange Offer?

Each $1,000 principal amount of 2036 Notes is convertible under certain circumstances into 51.5318 shares of our common stock (which is equivalent to a conversion price of $19.4055), subject to adjustment under certain circumstances.

Each $1,000 principal amount of 2041 Notes will be initially convertible under certain circumstances into the same number of shares of our common stock as $1,000 principal amount of 2036 Notes, subject to adjustment under certain circumstances.

Can holders currently exercise the conversion rights under the 2036 Notes? When can I exercise the conversion rights associated with the 2036 Notes and the 2041 Notes?

As of August 14, 2009, holders may not exercise their conversion rights with respect to their 2036 Notes. Absent the occurrence of certain circumstances, in which case the 2036 Notes may become convertible earlier, the 2036 Notes will only become convertible at the option of the holders thereof for a period of 60 days prior to each of July 1, 2013, July 1, 2016, July 1, 2021, July 1, 2026, July 1, 2031 and July 1, 2036.

The 2041 Notes will only be convertible upon occurrence of certain circumstances. Absent the occurrence of any of those circumstances, in which case the 2041 Notes may become convertible

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earlier, the 2041 Notes will only become convertible at the option of the holders thereof for a period of 60 days prior to September 15, 2016 and September 15, 2041. See “Summary—Summary of material differences between the 2041 Notes and 2036 Notes” for summary of the conversion conditions applicable to the 2041 Notes and the 2036 Notes. See also “Description of the 2041 Notes” for a description of conversion conditions applicable to the 2041 Notes.

What other rights will I lose if I exchange my 2036 Notes in the Exchange Offer?

If you validly tender your 2036 Notes and we accept them for exchange, you will lose the rights of a holder of 2036 Notes with respect to the 2036 Notes that are accepted for exchange. For example, you will lose the right to receive semi-annual interest payments and principal payments in accordance with the terms of the 2036 Notes with respect to those 2036 Notes that are accepted for exchange (but you will receive accrued interest on such 2036 Notes from July 1, 2009 until the Settlement Date). In addition, you will not have the right to require us at your option to repurchase all or a portion of your 2036 Notes on specified dates in the future, beginning on July 1, 2013. See “Summary—Summary of material differences between the 2041 Notes and 2036 Notes.”

Are the 2036 Notes listed on a national securities exchange?

No, the 2036 Notes are not listed on a national securities exchange. Additionally, we do not intend to list the 2041 Notes on a national securities exchange. Investors are urged to consult with their bank, broker or financial advisor in order to obtain information regarding the market prices for the 2036 Notes.

What is a recent market price of your common stock?

Our common stock is traded on The NASDAQ Global Select Market under the symbol “AMMD.” The last reported sale price of our common stock on August 13, 2009 was $14.98 per share.

May I tender only a portion of the 2036 Notes that I hold?

Yes. You do not have to tender all of your 2036 Notes in order to participate in the Exchange Offer. However, you may only tender 2036 Notes for exchange in multiples of $1,000 principal amount.

If the Exchange Offer is consummated and I do not participate in the Exchange Offer or I do not exchange all of my 2036 Notes in the Exchange Offer, how will my rights and obligations under my remaining outstanding 2036 Notes be affected?

The terms of your 2036 Notes that remain outstanding after the consummation of the Exchange Offer will not change as a result of the Exchange Offer. However, if a significant number of the 2036 Notes are tendered in the Exchange Offer, the trading market for the remaining outstanding principal amount of 2036 Notes may be less liquid.

What do you intend to do with the 2036 Notes that are accepted for exchange in the Exchange Offer?

The 2036 Notes accepted for exchange by us in the Exchange Offer will be cancelled and retired.

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Are you making a recommendation regarding whether I should participate in the Exchange Offer?

None of us, the Dealer Managers, the Exchange Agent, the Information Agent or the Trustee is making any recommendation regarding whether you should tender or refrain from tendering your 2036 Notes for exchange in the Exchange Offer. Accordingly, you must make your own determination as to whether to tender your 2036 Notes for exchange in the Exchange Offer and, if so, the amount of 2036 Notes to tender. Before making your decision, we urge you to read this prospectus carefully in its entirety, including the information set forth in the section of this prospectus entitled “Risk factors,” and in the documents incorporated by reference in this prospectus.

When will I receive the Exchange Offer consideration for my 2036 Notes tendered and accepted for exchange pursuant to the Exchange Offer?

The 2041 Notes and cash, if any, deliverable in respect of 2036 Notes accepted for exchange pursuant to the Exchange Offer will be delivered to the Exchange Agent (or upon its instruction to The Depository Trust Company, or DTC), as agent for the holders whose 2036 Notes have been accepted for exchange, promptly following the Expiration Date.

Settlement will not occur until after any proration to the extent the aggregate principal amount of 2036 Notes tendered is in excess of $250,000,000. See “The Exchange Offer—Maximum exchange amount; proration.” We may not be able to announce any proration until at least three trading days after the Expiration Date to the extent that 2036 Notes are tendered by notice of guaranteed delivery, which notices will not require the 2036 Notes tendered thereby to be delivered until the third trading day following the Expiration Date.

Will the 2041 Notes to be issued in the Exchange Offer be freely tradable?

The 2041 Notes received pursuant to this Exchange Offer generally may be offered for resale, resold and otherwise transferred without further registration under the Securities Act and without delivery of a prospectus meeting the requirements of Section 10 of the Securities Act if the holder is not our “affiliate” within the meaning of Rule 144(a)(1) under the Securities Act. Any holder who is our affiliate at the time of the exchange must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resales, unless such sale or transfer is made pursuant to an exemption from such requirement and the requirements under applicable state securities laws.

Do you or any of your affiliates have any current plans to purchase any 2036 Notes that remain outstanding subsequent to the Expiration Date?

No. Although we and our affiliates do not have any current plans to purchase any 2036 Notes that remain outstanding subsequent to the Expiration Date, we and our affiliates reserve the right, in our or their absolute discretion, to do so. Following completion of the Exchange Offer, we may repurchase additional 2036 Notes that remain outstanding in the open market, in privately negotiated transactions, in new exchange offers, through redemptions or otherwise. Future purchases or exchanges of 2036 Notes that remain outstanding after the Exchange Offer may be on terms that are more or less favorable than the Exchange Offer. Exchange Act Rules 14e-5 and 13e-4 generally prohibit us and our affiliates from purchasing any 2036 Notes other than pursuant to the Exchange Offer until 10 business days after the Expiration Date of the

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Exchange Offer. Future purchases or exchanges, if any, will depend on many factors, which include market conditions and the condition of our business.

When does the Exchange Offer expire?

The Exchange Offer will expire at midnight, New York City time, on September 11, 2009 (which is the end of the day on September 11, 2009), unless extended or earlier terminated by us.

Under what circumstances can the Exchange Offer be extended, amended or terminated?

We reserve the right to extend the Exchange Offer for any reason. We also expressly reserve the right, at any time or from time to time, to amend the terms of the Exchange Offer in any respect prior to the Expiration Date of the Exchange Offer. However, we may be required by law to extend the Exchange Offer if we make a material change in the terms of the Exchange Offer or to the information contained in this prospectus. During any extension of the Exchange Offer, 2036 Notes that were previously tendered for exchange and not validly withdrawn will remain subject to the Exchange Offer. We also reserve the right to terminate the Exchange Offer at any time prior to the Expiration Date of the Exchange Offer if any condition to the Exchange Offer is not met. If the Exchange Offer is terminated, no 2036 Notes will be accepted for exchange, and any 2036 Notes that have been tendered for exchange will be returned to the holder promptly after the termination. For more information regarding our right to extend, amend or terminate the Exchange Offer, see the section of this prospectus entitled “The Exchange Offer—Expiration Date; extension; termination; amendment.”

How will I be notified if the Exchange Offer is extended, amended or terminated?

We will issue a press release or otherwise publicly announce any extension, amendment or termination of the Exchange Offer. In the case of an extension, we will promptly make a public announcement by issuing a press release no later than 9:00 a.m., New York City time, on the first business day after the previously scheduled Expiration Date of the Exchange Offer. For more information regarding notification of extensions, amendments or the termination of the Exchange Offer, see the section of this prospectus entitled “The Exchange Offer—Expiration Date; extension; termination; amendment.”

What risks should I consider in deciding whether or not to tender my 2036 Notes?

In deciding whether to participate in the Exchange Offer, you should carefully consider the discussion of risks and uncertainties affecting our business, the 2041 Notes and our common stock that are described in the section of this prospectus entitled “Risk factors,” and the documents incorporated by reference in this prospectus.

What are the material U.S. federal income tax consequences of my participating in the Exchange Offer?

Please see the section of this prospectus entitled “United States federal income tax consequences.” You should consult your own tax advisor for a full understanding of the tax considerations of participating in the Exchange Offer.

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How will the Exchange Offer affect the trading market for the 2036 Notes that are not exchanged?

There currently is a limited trading market for the 2036 Notes. To the extent that 2036 Notes are tendered and accepted for exchange pursuant to the Exchange Offer, the trading market for the remaining 2036 Notes will be even more limited or may cease to exist altogether. A debt security with a small outstanding aggregate principal amount or “float” may command a lower price than would a comparable debt security with a larger float. Therefore, the market price for the unexchanged 2036 Notes may be adversely affected. The reduced float may also make the trading prices of the remaining 2036 Notes more volatile. See “Risk Factors—Risks related to participation in the Exchange Offer by holders of 2036 Notes—The liquidity of any trading market that currently exists for the 2036 Notes may be adversely affected by the Exchange Offer, and holders of 2036 Notes who fail to participate in the Exchange Offer may find it more difficult to sell their 2036 Notes after the Exchange Offer is completed.”

The 2036 Notes are not listed for trading on any national securities exchange. We do not expect to list the 2041 Notes for trading on any national securities exchange either.

Are your financial condition and your results of operations relevant to my decision to tender my 2036 Notes for exchange in the Exchange Offer?

Yes. We believe that the respective market prices of our common stock and the 2036 Notes are closely linked to our financial condition and results of operations. In addition, the market price of our 2041 Notes issued pursuant to this Exchange Offer is expected to be closely linked to our financial condition and results of operations. For information about the accounting treatment of the Exchange Offer, see the section of this prospectus entitled “The Exchange Offer—Accounting treatment.”

Are any 2036 Notes held by your directors or executive officers?

To our knowledge, none of our directors, executive officers or controlling persons, or any of their affiliates, beneficially own any 2036 Notes. For more information, see the section of this prospectus entitled “Interests of directors and executive officers.”

Will you receive any proceeds from the Exchange Offer?

No. We will not receive any proceeds from the Exchange Offer.

How do I tender my 2036 Notes for exchange in the Exchange Offer?

If you beneficially own 2036 Notes that are held in the name of a broker or other nominee and wish to tender such 2036 Notes, you should promptly instruct your broker or other nominee to tender on your behalf. To tender in the Exchange Offer, a holder must:

(1) either:

• properly complete, duly sign and date the letter of transmittal, or a facsimile of the letter of transmittal, have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires and deliver the letter of transmittal or facsimile together with any other documents required by the letter of transmittal, to the Exchange Agent on or prior to midnight, New York City time, on the Expiration Date; or

• instruct DTC to transmit on behalf of the holder a computer-generated message to the Exchange Agent in which the holder of the 2036 Notes acknowledges and agrees to be

9

bound by the terms of the letter of transmittal, which computer-generated message shall be received by the Exchange Agent on or prior to midnight, New York City time, on the Expiration Date, according to the procedure for book-entry transfer described below; and

(2) deliver to the Exchange Agent on or prior to the Expiration Date confirmation of book-entry transfer of the holder’s 2036 Notes into the Exchange Agent’s account at DTC pursuant to the procedure for book-entry transfers described in this prospectus under the heading “The Exchange Offer—Procedures for tendering 2036 Notes.”

Alternatively, if a holder wishes to tender its 2036 Notes for exchange in the Exchange Offer and the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Exchange Agent on or prior to the Expiration Date, the holder must tender its 2036 Notes or according to the guaranteed delivery procedures set forth under “The Exchange Offer—Guaranteed delivery procedures.”

For more information regarding the procedures for exchanging your 2036 Notes, see the section of this prospectus entitled “The Exchange Offer—Procedures for tendering 2036 Notes” and “The Exchange Offer—Book-entry transfer.”

Are there procedures for guaranteed delivery of 2036 Notes?

Yes. If you wish to tender your 2036 Notes for exchange in the Exchange Offer and the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Exchange Agent on or prior to the Expiration Date, you must tender your 2036 Notes according to the guaranteed delivery procedures set forth under “The Exchange Offer—Guaranteed delivery procedures.”

What happens if some or all of my 2036 Notes are not accepted for exchange?

Any 2036 Notes not accepted by us will be returned to you, at our expense, promptly after the expiration or termination of the Exchange Offer to the address specified by you in the letter of transmittal or by book entry transfer into an account with DTC specified by you. For more information, see the section of this prospectus entitled “The Exchange Offer—Withdrawal rights.”

Until when may I withdraw 2036 Notes previously tendered for exchange?

You may withdraw 2036 Notes that were previously tendered for exchange at any time on or prior to the Expiration Date of the Exchange Offer. In addition, you may withdraw any 2036 Notes that you tender that are not accepted for exchange by us after the expiration of 40 business days from August 14, 2009, if such 2036 Notes have not been previously returned to you. For more information, see the section of this prospectus entitled “The Exchange Offer—Withdrawal rights.”

How do I withdraw 2036 Notes previously tendered for exchange in the Exchange Offer?

For a withdrawal to be effective, the Exchange Agent must receive a computer-generated notice of withdrawal, transmitted by DTC on behalf of the holder in accordance with the standard operating procedure of DTC or a written notice of withdrawal, sent by facsimile transmission, receipt confirmed by telephone, or letter, on or prior to the Expiration Date. For more information regarding the procedures for withdrawing tenders of 2036 Notes, see the section of

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this prospectus entitled “The Exchange Offer—Withdrawal rights.” A form of notice of withdrawal may be obtained from D.F. King & Co., Inc., the Information Agent for the Exchange Offer. The Information Agent’s contact information appears on the back cover of this prospectus.

Will I have to pay any fees or commissions if I tender my 2036 Notes for exchange in the Exchange Offer?

You will not be required to pay any fees or commissions to us, the Dealer Managers, the Exchange Agent or the Information Agent in connection with the Exchange Offer. If your 2036 Notes are held through a broker or other nominee who tenders the 2036 Notes on your behalf (other than those tendered through the Dealer Managers), your broker may charge you a commission for doing so. You should consult with your broker or nominee to determine whether any charges will apply.

With whom may I talk if I have questions about the Exchange Offer?

If you have questions regarding the terms of the Exchange Offer, please contact J.P. Morgan Securities Inc. The address and telephone number for J.P. Morgan Securities Inc. is set forth on the back cover of this prospectus. If you have questions regarding the procedures for tendering your 2036 Notes for exchange in the Exchange Offer, please contact the Information Agent. Its address and telephone number are set forth on the back cover of this prospectus. You may also write to any of these entities at one of their respective addresses set forth on the back cover of this prospectus.

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Summary

This summary provides an overview of selected information. Because this is only a summary, it may not contain all of the information that may be important to you in deciding whether to participate in the Exchange Offer. Before making a decision on whether to participate in the Exchange Offer, you should carefully read this entire prospectus, including the financial data and other information contained and incorporated by reference in this prospectus and the section of this prospectus entitled “Risk factors.”

Unless the context otherwise requires, in this prospectus, the terms “the Company,” “we,” “us,” “our” and “Holdings” refer to American Medical Systems Holdings, Inc. and its subsidiaries. Additionally, in this prospectus the term subsidiary guarantors refers to American Medical Systems, Inc., AMS Sales Corporation, AMS Research Corporation and Laserscope.

American Medical Systems Holdings, Inc.

We are the world leader in developing and delivering innovative solutions to physicians treating men’s and women’s pelvic health conditions, thereby recognized as the technology leader in the markets we serve. We have built a business that is fueled by a robust pipeline of innovative products for significant, under-penetrated markets. We have diversified our product portfolio, building on our traditional base of products for men’s incontinence and erectile restoration, to include products and therapies targeted at benign prostatic hyperplasia (BPH) in men, as well as urinary incontinence, pelvic organ prolapse and menorrhagia in women. We estimate there are as many as 1.8 billion incidences of these conditions in the global markets we serve, with many people suffering from multiple conditions. Treatment options for these conditions vary considerably depending on the severity of the condition. Approximately 450 million of these men and women have conditions sufficiently severe so as to profoundly diminish their quality of life and significantly impact their relationships. Our addressable market is contained within this group of patients. Our product development and acquisition strategies have focused on expanding our product offering for surgical solutions, including less-invasive solutions for surgeons and their patients. Our primary physician customers include urologists, gynecologists, urogynecologists and colorectal surgeons.

We completed our 36^th year of operations in 2008, with a continued focus on technological innovation, market expansion and financial strength.

Our net sales grew from $463.9 million in 2007 to $501.6 million in 2008. In 2008, men’s health contributed $219.2 million, or 44 percent of total net sales, BPH therapy contributed $116.3 million, or 23 percent of total net sales, and women’s health contributed $166.1 million, or 33 percent of total net sales.

Our products for treating incontinence in both the men’s and women’s health businesses drove revenue growth in 2008, particularly through the success of the AdVance^® male sling and the MiniArc^® Single Incision Sling for treating female stress urinary incontinence. Our erectile restoration product revenues grew through notable expansion in a number of international markets. We provide a full line of medical laser systems to deliver minimally invasive procedures for the treatment of obstructive BPH and urinary stones. BPH therapy revenues declined in 2008, as a result of a slower than anticipated market penetration rate, but we have made considerable

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improvements to product performance in 2008 and are now selling our GreenLight HPS^® (High Performance System) throughout our global markets, and we continue to market our TherMatrx^® solution for in-office treatment of BPH. Revenue from our prolapse repair products, notably Apogee^® and Perigee^®, also grew more significantly through expansion in international markets and exited 2008 with strong sales in all regions with the recent launch of our new Elevate^® posterior transvaginal prolapse repair system in the back half of 2008. Our Her Option^® product for the treatment of menorrhagia, or excessive uterine bleeding, experienced a decline in revenues during the year, with lower than expected adoption rates for office-based procedures.

In 2008, we implemented a number of company-wide initiatives to reduce working capital, manage expenses and drive operating leverage throughout our business. As a result, we generated income from operations of approximately $50.2 million in 2008, compared to $16.6 million in 2007, and cash from operations of approximately $115.8 million in 2008, which more than doubled the 2007 amount of $47.8 million. We also retired approximately $120 million of debt in 2008 compared to approximately $50 million in 2007. For the first six months of 2009, we generated income from operations of approximately $53.3 million, compared to $29.8 million in the first six months of 2008, and cash from operations of approximately $59.8 million, compared to $46.5 million in the first six months of 2008.

We maintain a website at www.AmericanMedicalSystems.com. The information contained on our website is not a part of, nor is it incorporated by reference into, this prospectus.

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The Exchange Offer

The following summary contains basic information about the Exchange Offer. It does not contain all of the information that may be important to you. For a more complete description of the terms of the Exchange Offer, see “The Exchange Offer.”

Offeror American Medical Systems Holdings, Inc.

Securities Subject to the Exchange Offer We are making this Exchange Offer for up to a maximum of $250,000,000 aggregate principal amount of our outstanding 3.25% Convertible Senior Notes due 2036. The 2036 Notes are guaranteed on a senior subordinated basis by our subsidiary guarantors.

The Exchange Offer Upon the terms and subject to the conditions set forth in this prospectus and the related letter of transmittal, we are offering to exchange $1,000 principal amount of our new 2041 Notes for each $1,000 principal amount of our 2036 Notes, provided that the maximum aggregate principal amount of 2036 Notes that we will accept for exchange is $250,000,000. In the event that more than $250,000,000 aggregate principal amount of the 2036 Notes is validly tendered and not validly withdrawn, such notes will be subject to proration as described in “The Exchange Offer—Maximum exchange amount; proration.” We will also pay in cash accrued and unpaid interest on 2036 Notes accepted for exchange from the last applicable interest payment date to, but excluding, the Settlement Date.

See “The Exchange Offer” for more information on the terms of the Exchange Offer.

Purpose of the Exchange Offer Holders of the 2036 Notes may require us to repurchase all or a portion of their 2036 Notes on certain future dates, the first of which will occur on July 1, 2013. The purpose of the Exchange Offer is to provide us with improved financial flexibility by allowing us to exchange a portion of the 2036 Notes with the 2041 Notes. The 2041 Notes would only permit holders to require us to repurchase all or a portion of the 2041 Notes on September 15, 2016. The 2041 Notes extend the maturity of the debt to 2041 to the extent the 2036 Notes are tendered and accepted in the exchange offer.

Market Trading The 2036 Notes are not listed for trading on any national securities exchange. Investors are urged to consult with their bank, broker or financial advisor in order to obtain information regarding the market prices for the 2036 Notes. We do not intend to have the 2041 Notes listed for trading on any national securities exchange.

Our common stock is traded on The NASDAQ Global Select Market under the symbol “AMMD.” The last reported sale price of our common stock on August 13, 2009 was $14.98 per share.

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Expiration Date The Expiration Date of the Exchange Offer will be midnight, New York City time, on September 11, 2009 (which is the end of the day on September 11, 2009), unless extended or earlier terminated by us. The term “Expiration Date” means such date and time or, if we extend the Exchange Offer, the latest date and time to which we extend the Exchange Offer.

Settlement Date The settlement of the Exchange Offer will occur promptly after the Expiration Date.

Conditions to the Exchange Offer The Exchange Offer is conditioned on (i) at least $100,000,000 aggregate principal amount of the 2036 Notes being validly tendered and not validly withdrawn, (ii) the last reported sale price of our common stock on The NASDAQ Global Select Market not exceeding $17.64 per share on the Expiration Date of the Exchange Offer and (iii) satisfaction of other customary conditions. We may waive, in accordance with applicable law, any of the conditions to the Exchange Offer except for the condition that the registration statement of which this prospectus is a part be declared effective by the Commission. See “The Exchange Offer—Conditions to the Exchange Offer.”

Extensions; Waivers and Amendments; Termination Subject to applicable law, we reserve the right to (1) extend the Exchange Offer; (2) waive any and all conditions to or amend the Exchange Offer in any respect (except as to the condition that the registration statement of which this prospectus forms a part having been declared effective and not being subject to a stop order or any proceedings for that purpose, which conditions we cannot waive); or (3) terminate the Exchange Offer. Any extension, waiver, amendment or termination will be followed as promptly as practicable by a public announcement thereof, such announcement, in the case of an extension, to be issued no later than 9:00 a.m., New York City time, on the next business day after the last previously scheduled Expiration Date. See “The Exchange Offer—Expiration Date; extension; termination; amendment.”

Summary of Material Differences Between the 2041 Notes and the 2036 Notes There are material differences between the terms of the 2036 Notes and the 2041 Notes. See “— Summary of material differences between the 2041 Notes and the 2036 Notes.”

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Procedures for Tendering 2036 Notes You may tender your 2036 Notes by transferring them through The Depository Trust Company’s (“DTC”) Automated Tender Offer Program (“ATOP”) or following the other procedures described under “The Exchange Offer—Procedures for tendering 2036 Notes,” “The Exchange Offer—Book-entry transfer” and “The Exchange Offer—Guaranteed delivery procedures.”

For further information on how to tender your 2036 Notes, call the Information Agent at the telephone numbers set forth on the back cover of this prospectus or consult your broker, dealer, commercial bank, trust company or other nominee for assistance.

If you are a beneficial owner of 2036 Notes that are held by or registered in the name of a broker, dealer, commercial bank, trust company or other nominee or custodian and you wish to tender your 2036 Notes, you should contact your intermediary entity promptly and instruct it to tender the 2036 Notes on your behalf if you wish to participate in the Exchange Offer. You should keep in mind that your intermediary may require you to take action with respect to the Exchange Offer a number of days before the Expiration Date in order for such entity to tender 2036 Notes on your behalf on or prior to the Expiration Date in accordance with the terms of the Exchange Offer.

Guaranteed Delivery Procedures If you wish to tender your 2036 Notes for exchange in the Exchange Offer and the procedures for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Exchange Agent on or prior to the Expiration Date, you must tender your 2036 Notes according to the guaranteed delivery procedures set forth under “The Exchange Offer—Guaranteed delivery procedures.”

Consequences of Failure to Participate in the Exchange Offer Any 2036 Notes that are not exchanged in the Exchange Offer will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits their holders have under the applicable governing indenture. If a significant number of 2036 Notes do not remain outstanding after the Exchange Offer, the trading market for the remaining outstanding aggregate principal amount of 2036 Notes may be less liquid. See “The Exchange Offer—Consequences of failure to participate in the Exchange Offer” and “Risk factors.”

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Withdrawal Rights; Non-Acceptance You may withdraw your tender of 2036 Notes at any time on or prior to midnight, New York City time, on the Expiration Date. In addition, if not previously returned, you may withdraw 2036 Notes that you tender that are not accepted by us for exchange after expiration of 40 business days from August 14, 2009. In the event that tendered 2036 Notes are not withdrawn, not exchanged by us due to proration or otherwise not accepted by us for exchange, such 2036 Notes will be promptly returned to such holder or credited to such holder’s DTC account in the same manner as tendered to us, unless the holder has indicated other delivery instructions in the related letter of transmittal or computer-generated message. See “The Exchange Offer—Withdrawal rights.”

Required Approvals We are not aware of any regulatory or other approvals necessary to complete the Exchange Offer, other than compliance with applicable securities laws.

Appraisal Rights You do not have dissenters’ rights or appraisal rights with respect to this Exchange Offer.

Material United States Federal Income Tax Considerations of the Exchange Offer The United States federal income tax consequences of the exchange of 2036 Notes for 2041 Notes are not entirely clear. For United States federal income tax purposes, we will take the position that the exchange of 2036 Notes for 2041 Notes should constitute a significant modification of the terms of the 2036 Notes and that, as a result, the 2041 Notes should be treated as a newly issued indebtedness with a new issue price, issue date, comparable yield and projected payment schedule.

By participating in the Exchange Offer, each holder will be deemed to have agreed pursuant to the indenture governing the 2041 Notes to treat the exchange as constituting a significant modification of the terms of the 2041 Notes for United States federal income tax purposes. If, contrary to this position, the exchange of 2036 Notes for 2041 Notes does not constitute an exchange for United States federal income tax purposes, the tax consequences to holders may be materially different. For a discussion of the potential tax consequences of the exchange, see “United States federal income tax consequences.”

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United States Federal Income Taxation of the 2041 Notes Under the indenture governing the 2041 Notes, we and each holder agree for United States federal income tax purposes to treat the 2041 Notes as indebtedness subject to the Treasury Regulations governing contingent payment debt instruments. Holders of debt instruments subject to the Treasury Regulations governing contingent payment debt instruments are required to accrue interest at the “comparable yield” for the 2041 Notes, which we have estimated to be 14%, compounded semi-annually, subject to adjustments. This comparable yield may differ from the comparable yield we determine as of the initial issue date. As a result of accruing interest at the comparable yield, a United States holder (as defined herein) may recognize taxable income in each year significantly in excess of the coupon rate. Additionally, a United States holder generally will be required to recognize any gain realized on a sale, taxable exchange, conversion, redemption or repurchase of the 2041 Notes as ordinary income, rather than capital gain. In computing such gain, the amount realized by a United States holder will be required to include, in the case of a conversion, the amount of cash and fair market value of any shares of common stock received. The application of the contingent payment debt rules is uncertain, and no ruling will be obtained from the Internal Revenue Service concerning the application of these rules to the 2041 Notes. You should consult your tax advisor concerning the tax consequences of owning the 2041 Notes. For more information, see “United States federal income tax consequences.”

Fees and Commissions You are not required to pay fees or commissions to us, the Dealer Managers, the Exchange Agent or the Information Agent in connection with the Exchange Offer. If your 2036 Notes are held through a broker or other nominee who tenders the 2036 Notes on your behalf (other than those tendered through the Dealer Managers), your broker may charge you a commission for doing so. You should consult with your broker or nominee to determine whether any charges will apply.

Dealer Managers The Sole Lead Dealer Manager is J.P. Morgan Securities Inc. and the Co-Dealer Manager is Goldman, Sachs & Co. J.P. Morgan Securities Inc.’s address and telephone number are set forth on the back cover of this prospectus.

Exchange Agent The Exchange Agent for the Exchange Offer is U.S. Bank National Association. Its address and telephone number are set forth on the back cover of this prospectus.

Information Agent The Information Agent for the Exchange Offer is D.F. King & Co., Inc. Its address and telephone numbers are set forth on the back cover of this prospectus.

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Further Information Additional copies of this prospectus, the related letter of transmittal and other materials related to this Exchange Offer, including the form of notice of guaranteed delivery and the form of notice of withdrawal, may be obtained by contacting the Information Agent. For questions regarding the procedures to be followed for tendering your 2036 Notes, please contact the Information Agent. For all other questions, please contact J.P. Morgan Securities Inc. The contact information for each of these parties is set forth on the back cover of this prospectus.

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Summary of material differences between the 2041 Notes and the 2036 Notes

Material differences between the 2041 Notes and the 2036 Notes are summarized below. The table below is qualified in its entirety by the information contained in this prospectus and the respective documents governing the 2041 Notes and the 2036 Notes. The “Description of the 2041 Notes” section of this prospectus contains a more detailed description of the terms and conditions of the 2041 Notes.

	2041 Notes	2036 Notes
Securities	Up to $250,000,000 in aggregate principal amount of new 3.75% Convertible Senior Subordinated Notes due 2041 is being offered in the exchange offer.	As of the date of this prospectus, there is approximately $312,000,000 in outstanding aggregate principal amount of our existing 3.25% Convertible Senior Subordinated Notes due 2036.
Issuer	American Medical Systems Holdings, Inc., a Delaware corporation.	Same as 2041 Notes.
Maturity	The maturity date of the 2041 Notes will be September 15, 2041, unless earlier repurchased, redeemed or converted.	The maturity date of the 2036 Notes is July 1, 2036, unless earlier repurchased, redeemed or converted.
Interest rate	The per annum interest rate of the 2041 Notes will be 3.75%, in addition to contingent interest and additional interest, if any, that may accrue at the rates described below.	The per annum interest rate of the 2036 Notes is 3.25%, in addition to any contingent interest that may accrue at the rate described below.
Contingent interest	Beginning with the semiannual interest period commencing on September 15, 2016, contingent interest will accrue on the 2041 Notes during any semiannual interest period where the average trading price of the 2041 Notes for the five trading days immediately preceding the first day of such semiannual period is greater than or equal to $1,300 per $1,000 principal amount of the 2041 Notes, in which case such contingent interest will be payable at a rate per annum equal to 0.75% of such average trading price.	Beginning with the semiannual interest period commencing on July 1, 2011, contingent interest will accrue on the 2036 Notes during any semiannual interest period where the average trading price of the 2036 Notes during the five consecutive trading days immediately preceding the last trading day before the applicable interest period is greater than or equal to $1,200 per $1,000 principal amount of the 2036 Notes, in which case such contingent interest will be payable at a rate per annum equal to 0.25% of such trading price.

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	2041 Notes	2036 Notes
Additional interest	In the event that we fail to comply with certain reporting obligations under the indenture governing the 2041 Notes, we may elect to pay additional interest on the principal amount of the outstanding 2041 Notes for each day during the period, not to exceed 180 days, while such event of default is continuing. We will pay additional interest at a rate equal to 0.25% per annum for the first 90-day period and 0.50% per annum for the second 90-day period. If we elect to pay additional interest, the additional interest shall constitute the sole remedy of the holders for such event of default during this 180-day period.	None.
Optional redemption	On or after September 15, 2016, we may redeem for cash all or a portion of the 2041 Notes if the last reported sale price of our common stock has been at least 130% of the applicable conversion price for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period prior to the date on which we provide notice of redemption. The redemption price will equal 100% of the principal amount of the 2041 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.	On or after July 6, 2011, we may redeem for cash all or a portion of the 2036 Notes. If we redeem the 2036 Notes on or prior to June 30, 2012, the redemption price will equal 100.929% of the principal amount of the 2036 Notes to be redeemed. If we redeem the 2036 Notes on or prior to June 30, 2013, the redemption price will equal 100.464% of the principal amount of the 2036 Notes to be redeemed. If we redeem the 2036 Notes after June 30, 2013, the redemption price will equal 100% of the principal amount of the 2036 Notes to be redeemed. We will also pay the accrued and unpaid interest on the redeemed 2036 Notes to the redemption date.

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	2041 Notes	2036 Notes
Repurchase at option of the holder	Holders of the 2041 Notes will have the right to require us to repurchase their notes for cash on September 15, 2016 and upon occurrence of certain fundamental change. Fundamental changes will not include a change in the composition of the majority of the board of directors.	Holders of the 2036 Notes will have the right to require us to repurchase their notes for cash on July 1, 2013, July 1, 2016, July 1, 2021, July 1, 2026 and July 1, 2031 and upon certain designated events. Designated events will include a change in the composition of the majority of the board of directors.
Optional tax redemption	We may also redeem all or a portion of the 2041 Notes for cash on or prior to September 17, 2010 if certain U.S. federal tax legislation, regulations or rules are enacted or are issued. The redemption price for any such redemption will be 101.5% of the principal amount of the 2041 Notes being redeemed plus (i) accrued and unpaid interest, if any, to but excluding the redemption date and (ii) if the current conversion value of the 2041 Notes being redeemed exceeds their initial conversion value, 85% of the amount determined by subtracting the initial conversion value of such 2041 Notes from their current conversion value. See “Description of the 2041 Notes—Optional redemption.”	None
Withholding and backup withholding taxes on conversion rate adjustments	If we pay withholding or backup withholding taxes on behalf of a holder as a result of an adjustment to the conversion rate, we may, at our option, set off such payments against payments of cash and common stock on the 2041 Notes.	None.

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	2041 Notes	2036 Notes
Events of default	A default by us or any of our significant subsidiaries or subsidiary guarantors with respect to certain indebtedness in excess of $25 million that results in such indebtedness becoming due and payable or constituting a failure to pay principal of or interest on such indebtedness when due and payable is an event of default under the 2041 Notes.	Same as the 2041 Notes, except that the threshold amount is $10 million.
Ranking	The senior debt under the Credit Facility (or any extension or replacement thereof) to which the 2041 Notes are expressly subordinated is not limited in amount and is not required to be secured.	Under the 2036 Notes, such senior debt may not exceed $650 million and must be secured by our assets.

Risk factors

Investors are urged to read the information set forth under the caption “Risk factors” in this prospectus for a discussion of certain risks associated with an investment in the 2041 Notes.

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Summary consolidated financial data

The table below sets forth certain of our historical consolidated financial data as of and for each of the periods indicated. We have a 52-or 53-week fiscal year ending on the Saturday nearest December 31. Accordingly, fiscal years 2008, 2007 and 2006 ended on January 3, 2009, December 29, 2007 and December 30, 2006, respectively, and are identified herein as 2008, 2007 and 2006. Fiscal year 2008 had 53 weeks and fiscal years 2007 and 2006 consisted of 52 weeks. The financial information for the fiscal years 2008, 2007 and 2006 is derived from our audited consolidated financial statements which are incorporated by reference into this prospectus from our Current Report on Form 8-K filed on August 4, 2009 (with respect to Item 8.01 and 9.01 only). The consolidated historical financial information as of and for the six-month periods ended June 28, 2008 and July 4, 2009 is derived from our unaudited condensed consolidated financial statements, which are incorporated by reference into this prospectus from our Quarterly Report on Form 10-Q for the period ended July 4, 2009. In our opinion, such unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the financial data for such periods. The results for the six months ended July 4, 2009 are not necessarily indicative of the results to be achieved for the fiscal year ending January 2, 2010 or for any other future period.

The data below should be read in conjunction with “Capitalization” and “Selected Historical Financial Data” included elsewhere in this prospectus and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the notes thereto, which are incorporated by reference in this prospectus from our Annual Report on Form 10-K for the year ended January 3, 2009 and Quarterly Report on Form 10-Q for the period ended July 4, 2009.

	Year ended			Six months ended
	2008	2007	2006	June 28, 2008	July 4, 2009
				(Unaudited)
	(Dollars in thousands, except share data and ratios)
Statement of Operations Data
Net sales	$501,641	$463,928	$358,318	$250,159	$250,026
Cost of sales	111,097	105,592	68,872	58,175	44,950
Gross profit	390,544	358,336	289,446	191,984	205,076
Operating expenses
Marketing and selling	175,670	169,495	123,204	91,382	86,201
Research and development	46,247	43,315	33,877	22,666	25,977
In-process research and development(1)	7,500	7,500	94,035	—	—
General and administrative	39,281	43,070	34,471	20,707	22,439
Integration costs(2)	—	1,103	1,712	—	—
Litigation settlement(3)	—	14,303	—	—	—
Amortization of intangibles(4)	34,465	18,264	12,393	8,647	6,666
Total operating expenses	303,163	297,050	299,638	143,402	141,283

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	Year ended									Six months ended
	2008			2007			2006			June 28, 2008			July 4, 2009
										(Unaudited)
	(Dollars in thousands, except share data and ratios)
Operating income (expense)	$	87,381		$	61,286		$	(10,192)		$	45,582		$	63,793
Other (expense) income
Royalty and other		2,279			8,099			1,984			4,761			3,083
Interest income		747			1,153			2,754			352			146
Interest expense(5)		(27,398	)		(37,760	)		(18,395	)		(14,876	)		(10,376	)
Amortization of financing costs(6)		(18,482	)		(16,145	)		(14,434	)		(9,041	)		(7,955	)
Gain on extinguishment of debt(7)		5,631			—			—			—			4,562
Total other (expense) income		(37,223	)		(44,653	)		(28,091	)		(18,804	)		(10,540	)
Income (loss) from continuing operations before income taxes		50,158			16,633			(38,283)			29,778			53,253
Provision for income taxes(8)		19,323			11,888			9,469			11,873			19,308
Net income (loss) from continuing operations		30,835			4,745			(47,752)			17,905			33,945
Loss from discontinued operations, net of tax benefit of $0.4 million and $2.7 million for 2007 and 2006, respectively(9)		—			(691	)		(5,435)			—			—
Net income (loss)	$	30,835		$	4,054		$	(53,187)		$	17,905		$	33,945
Net income (loss) per share
Basic net income (loss) from continuing operations	$	0.42		$	0.07		$	(0.68)		$	0.25		$	0.46
Discontinued operations, net of tax		—			(0.01	)		(0.08)			—			—
Basic net income (loss)	$	0.42		$	0.06		$	(0.76)		$	0.25		$	0.46
Diluted net income (loss) from continuing operations	$	0.42		$	0.06		$	(0.68)		$	0.24		$	0.46
Discontinued operations, net of tax		—			(0.01	)		(0.08)			—			—
Diluted net income (loss)	$	0.42		$	0.06		$	(0.76)		$	0.24		$	0.46
Balance Sheet Data
Cash, cash equivalents, and short-term investments	$	42,965		$	35,181		$	29,541		$	42,376		$	49,331
Working capital		130,999			143,298			135,635			153,149			133,184
Total assets		1,044,497			1,115,868			1,126,620			1,092,141			1,039,717
Long-term liabilities		553,705			650,410			678,897			619,429			512,165
Stockholders’ equity		427,482			383,371			345,189			413,442			467,741

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(1) In 2008 and 2007, we recognized $7.5 million each year for in-process research and development charges related to the payments for achieving certain milestones related to our BioControl acquisition. In 2006, we recognized $25.6 million, $2.1 million, $62.1 million and $4.3 million, respectively, for in-process research and development charges related to the acquisitions of BioControl, Solarant, Laserscope and Ovion.

(2) In 2007 and 2006, we recorded $1.1 million and $1.7 million, respectively, of integration costs associated with the 2006 Laserscope acquisition, primarily related to travel, legal, consulting and retention bonuses.

(3) During 2007, we recorded a charge of $14.3 million for litigation settlements, primarily for the arbitration award to the former shareholders of CryoGen, Inc. (CryoGen) concerning an earnout payment related to our 2002 acquisition of CryoGen.

(4) In 2008, we recorded additional amortization expense of $17.1 million for the acceleration of amortization to adjust the carrying value of certain intangible assets to their current fair values

(5) During 2008, 2007, 2006, the six months ended June 28, 2008 and the six months ended July 4, 2009, interest expense included interest incurred on $373.8 million principal amount of 2036 Notes we issued on June 27, 2006. Average borrowings under the 2036 Notes were $371.1 million during 2008, 373.8 million during 2007, 2006 and the six months ended June 28, 2008, and $322.0 million during the six months ended July 4, 2009. Interest expense also included interest incurred on our Credit Facility entered into on July 20, 2006. Our average borrowings under the Credit Facility were approximately $281.7 million during 2008, $332.3 million during 2007, $366.0 million from inception through December 30, 2006, 298.7 million during the six months ended June 28, 2008, and $221.1 million during the six months ended July 4, 2009. We also incurred interest expense related to short-term borrowing activity during 2006.

(6) Amortization of financing costs relates to the deferred financing costs and debt discount for our 2036 Notes and our Credit Facility. Charges during 2006 also include a $7.0 million commitment fee for a bridge loan of up to $180 million in preparation for the acquisition of Laserscope. We did not use this financing for the Laserscope acquisition.

(7) During the fourth quarter of 2008, we recognized a $5.6 million gain on extinguishment of $34.5 million of 2036 Notes. During the first quarter of 2009, we recognized a $4.6 million gain on extinguishment of $27.3 million of 2036 Notes.

(8) In 2007, we experienced adverse tax effects from the $14.3 million of litigation settlement charges primarily resulting from the resolution of the CryoGen arbitration. Partially offsetting this unfavorable impact was the favorable settlement of a tax audit for $0.9 million, which allowed us to release a reserve for uncertain tax benefits. The in-process research and development charges described above for 2006 have no related tax benefit, except for BioControl. In 2006, we received a $2.4 million tax refund associated with the favorable agreement reached with the IRS involving the review of our 2001 and 2002 federal income tax returns.

(9) In conjunction with our acquisition of Laserscope in the third quarter of 2006, we committed to a plan to divest Laserscope’s aesthetics business. On January 16, 2007, we sold the aesthetics business to Iridex Corporation. The financial results of the aesthetics business have been reported as discontinued operations beginning from the date of acquisition of July 20, 2006 through the date of sale of January 16, 2007. The income tax benefit from the loss from discontinued operations was $0.4 million and $2.7 million in 2007 and 2006, respectively.

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Risk factors

Any investment in our securities involves a high degree of risk. You should carefully consider the risks described below and all of the information contained in and incorporated by reference into this prospectus before making a decision on whether or not to participate in the Exchange Offer. In addition, you should carefully consider, among other things, the matters discussed under “Risk Factors” in our Annual Report on Form 10-K for our fiscal year ended January 3, 2009, in our subsequently filed quarterly reports on Form 10-Q and in other documents that we file with the SEC prior to completion of this Exchange Offer, all of which are incorporated by reference into this prospectus. The risks and uncertainties described below are not the only risks and uncertainties we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. If any of the following risks actually occur, our business, financial condition and results of operations could suffer. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. The risks discussed below also include forward-looking statements and our actual results may differ substantially from those discussed in these forward-looking statements. See “Forward-looking statements.”

Risks related to the company

Our revenues and operating results may be negatively affected and we may not achieve future growth projections if we fail to compete successfully against our competitors or fail to develop our presence in new markets and technologies.

Our competitors include several large medical device manufacturers, including Johnson & Johnson, Medtronic, Inc., C.R. Bard, Inc., Boston Scientific Corporation, Coloplast and Hologic, Inc. These and other of our competitors may have greater resources, more widely accepted products, better distribution channels, less invasive therapies, greater technical capabilities and stronger name recognition than we do. This is particularly the case when we enter new markets or develop technologies for new therapies, such as our laser therapy products. We expect our competitors will continue to improve their products and develop new competing products, including less invasive or non-invasive products, pharmaceuticals and cell or gene therapies. These new technologies and products may beat our products to the market, be more effective than our products, render our products obsolete by substantially reducing the prevalence of the conditions our products and therapies treat, or provide the same benefits as our existing products at the same or lower price. We may be unable to compete effectively with our competitors, or achieve our internally established growth targets, if we cannot keep up with existing or new alternative products, techniques, therapies and technologies in the markets we serve.

Current worldwide economic conditions may adversely affect our business, operating results and financial condition.

We believe the current worldwide economic crisis has resulted and may continue to result in some reduction in the procedures using our products. Although a majority of our products are subject to reimbursement from third party government and non-government entities, some procedures that use our products can be deferred by patients. In light of the current economic conditions, patients may not have employer-provided healthcare, be as willing to take time off from work or spend their money on deductibles and co-payments often required in connection with the procedures that use our products. Beyond patient demand, hospitals and clinics may be less likely to purchase capital equipment given the current economic conditions and credit

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environment. In addition, economic conditions could affect the financial strength of our vendors and their ability to fulfill their commitments to us, and could also affect the financial strength of our customers and our ability to collect accounts receivable. While we believe current economic conditions may have contributed to a softening in our recent revenue growth rates, the specific impact is difficult to measure. Furthermore, we cannot predict how these economic conditions will impact our future sales, cost of goods sold, or bad debt expense.

Disruptions in the global financial markets could impact the ability of our counterparties and others to perform their obligations to us and our ability to obtain future financing.

Recent economic events, including failures of financial service companies and the related liquidity crisis, have considerably disrupted the capital and credit markets. Our credit risk consists of cash and cash equivalents, short-term investments, trade receivables, derivative instruments, lending commitments and insurance relationships in the ordinary course of business. We place cash, cash equivalents, short-term investments and derivative instruments with high quality financial institutions, which we monitor regularly and take action where possible to mitigate risk. We do not hold investments in auction rate securities, mortgage backed securities, collateralized debt obligations, individual corporate bonds, special investment vehicles or any other investments which have been directly impacted by the financial crisis. The carrying value of accounts receivable approximates fair value due to the relatively short payment terms on these instruments, or current payment patterns of our customers. To date, all lending commitments remain available to us, and we have not incurred any charges specific to the increased credit risks. Insurance programs are with carriers that remain highly rated and we have no significant pending claims. However, these disruptions in the capital and credit markets could cause our counterparties and others to breach their obligations or commitments to us under our contracts with them. While all of our debt maturities are long-term, any debt amendment or requirement for financing in the future would have a significant negative impact on our financing costs.

If our strategies to improve the performance of our laser therapy business are unsuccessful, our growth and profitability may be negatively impacted.

We have begun to implement a number of strategies in 2009 to improve the growth and profitability of our laser therapy business. These strategies include an internal reorganization and hiring of a general manager for BPH therapies, to focus dedicated resources to this part of our business. We also plan to reorganize our sales force and grow our relationships with mobile providers to increase revenues and continue to reduce costs and improve reliability of our laser therapy products to improve profitability. If these strategies are unsuccessful our growth and profitability may be negatively impacted.

Our sales may be adversely affected if physicians do not recommend, endorse or accept our products.

We rely upon physicians to recommend, endorse and accept our products. Many of the products we acquired or are developing are based on new treatment methods. Acceptance of our products is dependent on educating the medical community as to the distinctive characteristics, perceived benefits, clinical efficacy, and cost-effectiveness of our products compared to competitive products, and on training physicians in the proper application of our products. We believe our products address major market opportunities, but if we are unsuccessful in marketing them to physicians, or our products are identified in regulatory agency public health communications, our sales and earnings could be adversely affected. In addition, most of our products are used by

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physicians who are required to maintain certain levels of medical malpractice insurance to maintain their hospital privileges. As the cost of this insurance increases, certain physicians who have used our products to treat their patients may stop performing surgeries or providing therapies. Unless the patients who would have been treated by these physicians are referred to other physicians who would use our products, sales of our products could decline.

Our growth will be slowed if new products are delayed or are not accepted.

As part of our growth strategy, we intend to introduce a number of new products and product improvements. Product introductions depend upon a variety of factors, including timely receipt of appropriate regulatory approvals. If we do not introduce these new products and product improvements on schedule, for any reason, or if they are not well accepted by the market or approved, in a timely manner or at all, by applicable regulatory authorities, our business may be adversely affected.

Our sales could decline if our procedures are not accepted by patients.

We predominantly sell implants and therapies for surgical procedures or treatments. If patients do not accept our products and therapies, our sales may decline. Patient acceptance of our products and therapies depends on a number of factors, including the failure of non-invasive therapies, the degree of invasiveness involved in the procedures using our products, the rate and severity of complications, and other adverse side effects from the procedures using our products. Patients are more likely to first consider non-invasive alternatives to treat their urological and related disorders. Broader patient acceptance of alternative therapies or the introduction of new oral medications or other less-invasive therapies could adversely affect our business.

Our products face the risk of technological obsolescence, which, if realized, could have a material adverse effect on our business.

The medical device industry is characterized by rapid and significant technological change. We depend on our medical device technology and products to generate revenue. Therefore, we face the risk that third parties will succeed in developing or marketing technologies and products that are more effective than ours or that would render our technology and products obsolete or noncompetitive. Additionally, new, less invasive procedures and medications could be developed that replace or reduce the importance of current procedures that use our products or may cause our customers to delay or defer purchasing our products. Accordingly, our success depends in part upon our ability to respond quickly to medical and technological changes through the development and introduction of new products. The relative speed with which we can develop products, complete clinical testing and regulatory clearance or approval processes, train physicians in the use of our products, gain reimbursement acceptance, and supply commercial quantities of the products to the market are expected to be important competitive factors. Any delays could result in a loss of market acceptance and market share. Product development involves a high degree of risk, and we cannot provide assurance that our new product development efforts will result in any commercially successful products.

Changes in third party reimbursement for our products and therapies may influence our customers’ purchasing activity.

Our physician and hospital customers depend on third party government and non-government entities around the world to reimburse them for services provided to patients. The level of such third party reimbursement has fluctuated from time to time in the past, may fluctuate in the

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future, and is subject to review or withdrawal at any time. The level of reimbursement may influence whether customers purchase our products. Further, as we expand our offerings from implants surgically delivered to patients in hospital settings to minimally-invasive therapies delivered to patients in physician offices, we must address the information needs of varied reimbursement systems and processes. Reimbursement rates vary depending on whether the procedure is performed in a hospital, ambulatory surgery center or physician office. While our sales history of devices in the U.S. does not reflect an obvious correlation between sales levels and changes in the Center for Medicare and Medicaid Services, or CMS, reimbursement rates, office-based business may be more directly impacted by reimbursement rate fluctuations than our hospital-based business has been historically. For example, CMS is revising the methodology for calculating the physician practice expense component of the physician fee schedule, which accounts for, among other things, the cost of devices when a procedure is performed in a physician office or clinic. A significant change in practice expense payment levels may play a role in physician choices. Furthermore, a significant portion of our international sales are in Europe, where health care regulations and reimbursement for medical devices vary significantly from country to country. This changing environment could adversely affect our ability to sell our products in some European countries. Additionally, as we continue to expand into new global markets, we face the potential for lengthy reimbursement approval timeframes, process delays or a lack of transparency in certain reimbursement approval requirements. In summary, any unfavorable change in reimbursement could have a negative impact on our business.

Failure to satisfy our debt obligations could have a material adverse effect on our business.

As of July 4, 2009, we have approximately $312,000,000 in principal amount of 2036 Notes and $199.7 million outstanding under our Credit Facility as described in Notes to Consolidated Financial Statements — No. 9, Debt. If we are unable to generate sufficient cash flow or otherwise obtain funds necessary to make required payments on either of these debt obligations or if we are in material breach of the covenants contained in the loan agreements, we would default under the terms of the applicable loan agreement or indenture. Any such default would likely result in an acceleration of the repayment obligations to such lenders as well as the lenders under any of our other debt agreements under applicable cross default provisions.

The terms of our 2036 Notes and our Credit Facility contain conditions which may adversely affect our business in a number of ways, including the following:

• requiring us to use a substantial portion of our cash to pay principal and interest on our debt instead of utilizing those funds for other purposes such as working capital, capital expenditures, and acquisitions;

• limiting our ability to obtain any necessary additional financing in the future for working capital, capital expenditures, debt service requirements, or other purposes;

• placing us at a competitive disadvantage relative to our competitors who have lower levels of debt;

• decreasing our debt ratings and increasing our cost of borrowed funds;

• making us more vulnerable to a downturn in our business or the economy generally; and

• subjecting us to the risk of being forced to refinance at higher interest rates than these amounts when due.

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Conversion of our 2036 Notes into common stock could result in dilution to our shareholders.

Our 2036 Notes are convertible, at the option of the holder but subject to certain conditions, into shares of our common stock at an initial conversion price of $19.4055 per share, subject to adjustment. Upon conversion, in lieu of shares of our common stock, for each $1,000 principal amount of 2036 Notes a holder will receive an amount in cash equal to the lesser of (i) $1,000 or (ii) the conversion value (determined in the manner set forth in the indenture under which the 2036 Notes were issued) of the number of shares of our common stock as determined based on the conversion rate. If the conversion value exceeds $1,000, we will also deliver, in addition to cash, a number of shares of our common stock equal to the sum of the daily share amounts, as defined in the indenture. If a holder elects to convert its 2036 Notes in connection with a designated event that occurs prior to July 1, 2013, we will pay, to the extent described in the indenture, a make whole premium by increasing the conversion rate applicable to such 2036 Notes. The number of shares of common stock issuable upon conversion of the 2036 Notes increases as the market price of our common stock increases, as described in the “Liquidity and Capital Resources” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended January 3, 2009. All of the above conversion rights are subject to certain limitations imposed by our Credit Facility.

Our Credit Facility contains financial covenants and other restrictions which may limit our ability to operate our business.

In addition to cash generated from operations, our Credit Facility represents our primary source of liquidity. The Credit Facility contains various restrictive covenants, compliance with which is essential to continued credit availability. Among the most significant of these restrictive covenants are financial covenants which require us to maintain predetermined ratio levels related to leverage, interest coverage, fixed charges, and a limit on capital expenditures. The covenants and restrictions contained in the Credit Facility could limit our ability to fund our business, make capital expenditures, and make acquisitions or other investments in the future. Any failure to comply with any of these financial and other affirmative and negative covenants would constitute an event of default under the credit agreement, entitling a majority of the bank lenders to, among other things, terminate future credit availability under the agreement, and/or increase the interest rate on outstanding debt, and/or accelerate the maturity of outstanding obligations under that agreement.

Our borrowing costs are sensitive to fluctuations in interest rates, and changes in interest rates may affect our profitability.

Because our Credit Facility carries a floating interest rate tied to LIBOR, we are subject to market risk exposure related to changes in interest rates. During 2008, we began using financial instruments, including interest-swaps, to manage our interest rate risk on our floating rate debt. Under these arrangements, we effectively convert an amount of the principal balance under our Credit Facility, equal to a notional amount agreed upon in the financial instrument, from a floating rate to a fixed rate in a swap (or a range of floating rates should we utilize a collar or a limit on the floating rate in a cap), for an agreed-upon period of time. There is no certainty that we will continue to enter into financial instruments to hedge our risks in the future. Also, when we enter into a financial arrangement for a portion of our risk, there is no certainty that it would be effective or the rate will be at market for the entire term of the instrument. At the expiration or termination of any such financial instrument, we are again exposed to the market risk of increases in interest rates for our floating rate debt. We are also subject to the conditions of the debt market.

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Our capital structure includes term loans and convertible note debt which are traded in public and private transactions with fluctuating prices. Any future amendment to our Credit Facility could result in higher costs due to the trading price or market conditions at that time.

We could become obligated to make significant contingent payments or be subject to claims under prior acquisition agreements.

We have agreed to make contingent payments, based upon achievement of various milestone and product sales, under various acquisition agreements. We have also made commitments to use commercially reasonable efforts to achieve some of these milestones and, in some cases, product sales. If we achieve these milestones and product sales, we will be obligated to make significant contingent payments. If we fail to achieve milestones or generate product sales related to these acquisitions, we could become involved in disputes or legal proceedings challenging our compliance with our contractual obligations, including the efforts we expended to achieve the relevant milestones or product sales, as applicable. Any such legal proceedings would likely be costly and time-consuming, and, if we were found not to have complied with our contractual obligations, we could be subject to significant damages.

We may not be able to supply products that incorporate materials or components which are single or sole-sourced.

Some of our products utilize raw materials or components that are either single- or sole-sourced. These sources of supply could encounter manufacturing difficulties or may unilaterally decide to stop supplying us because of product liability concerns or other factors. We currently rely on single source suppliers for the silicone and fabric used in our male prostheses and for the porcine dermis and mesh used in many of our female products. Furthermore, we use single sources for the TherMatrx^® consoles and disposables. A key component of the InteXen^® and IntePro^® antibiotic technology is also procured from a single source. We rely on single and sole source suppliers for certain components in our GreenLight HPS^® system. We do not have written agreements with many of our key suppliers requiring them to supply us with these raw materials or components, and we cannot be certain that we would be able to timely or cost-effectively replace any of these sources upon any disruption. The loss of any of these suppliers could have a material adverse effect on our financial results in the near term, as we would be required to qualify alternate designs or sources.

The start-up, transfer, termination or interruption of any of these relationships or products, or the failure of our suppliers to supply product to us on a timely basis or in sufficient quantities, would likely cause us to be unable to meet customer orders for our products and harm our reputation with customers and our business. If we obtain a new supplier for a component, we may need to obtain FDA approval of a PMA supplement to reflect changes in product manufacturing and the FDA may require additional testing of any component from new suppliers prior to our use of these components. Further, if FDA approval of a PMA supplement is required, any delays in delivery of our product to customers would be extended and our costs associated with the change in product manufacturing may increase.

Loss of our principal manufacturing and distribution facilities would adversely affect our financial position.

We are currently operating with one manufacturing shift at each of our three principal locations, with no redundancy between facilities. We distribute our products from one location for a given product line. Although we believe we have adequate physical capacity to serve our business

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operations for the foreseeable future, and we carry property insurance on our facilities, we do not have a back up facility, and the loss or impairment of any of our Minnesota, California or Arizona facilities would have a material adverse effect on our sales, earnings, and financial condition.

Inadequate data submissions or clinical study results which do not support a product approval may delay or preclude a product’s commercialization.

Regulatory authorities around the world dictate different levels of manufacturing and design information and/or clinical data for various products and therapies in order to ensure their safety and efficacy. In the event the data submitted is deemed inadequate or the clinical study results do not support approval by any one or more of these regulatory authorities, a product may either not be fit for commercialization or may require a redesign to satisfy the regulatory authorities and/or clinical study outcomes. In addition, though a product’s clinical results may meet the regulatory requirements for product approval and commercialization, market acceptance and adoption of the product may not meet our expectations.

Our sale of products could be reduced if we are unable to comply with regulatory requirements or obtain the regulatory approvals necessary to market our products in the United States and foreign jurisdictions.

If we fail to receive regulatory approval for future products, or for modifications to the design, labeling or indications of existing products, we will be unable to market and sell these products. In the United States, we must obtain approval from the FDA before we can begin commercializing most of our products. The FDA approval processes are typically lengthy and expensive, and approval is never certain. Products distributed outside of the United States are also subject to foreign government regulations which vary from country to country. The time required to obtain approval from a foreign country may be longer or shorter than that required for FDA approval. In addition, we are required to comply with medical device reporting regulations, which require us to report to FDA or similar governmental bodies in other countries when our products cause or contribute to a death or serious injury or malfunction in a way that would be reasonably likely to contribute to death or serious injury if the malfunction were to recur. Our failure to comply or FDA disagreement with the approach taken to comply with regulatory requirements or obtain the necessary product approvals could result in government authorities:

• imposing fines and penalties on us;

• preventing us from manufacturing or distributing our products;

• bringing civil or criminal charges against us;

• delaying the introduction or denying marketing approval of our new products;

• recalling, withdrawing, or seizing our products; and

• requiring additional regulatory filings and/or approvals.

In the event we fail to comply with manufacturing regulations, we could be prevented from selling our products.

In order to commercially manufacture our products, we must comply with the FDA’s and other authorities’ manufacturing regulations which govern design controls, quality systems, labeling

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requirements and documentation policies and procedures. The FDA and foreign authorities periodically inspect our manufacturing facilities for compliance with these requirements. Our failure to comply with these manufacturing regulations may prevent or delay us from marketing or distributing our products, or cause the FDA to take other enforcement actions against us which could have a negative impact on our business.

We may experience an interruption in sales of a product and incur significant costs and negative publicity if that product is recalled or withdrawn.

In the event that any of our products present a health hazard to the patient or physician, fail to meet product performance criteria or specifications, including labeling, or fail to comply with applicable laws including those administered by the FDA, we could voluntarily recall or withdraw the products. The FDA and similar international regulatory bodies have the authority to require us to recall or withdraw our products in the event of material deficiencies or defects in design or manufacturing. A government mandated or voluntary recall or withdrawal by us could occur as a result of unanticipated safety risks, manufacturing errors or design defects, including defects in labeling. In addition, significant negative publicity could result in an increased number of product liability claims, whether or not these claims are supported by applicable law. We have initiated product recalls in the past and there is a possibility that we may recall or withdraw products in the future and that future recalls or withdrawals could result in significant costs to us and in significant negative publicity which could harm our ability to market our products in the future.

Our business may suffer if our new products are not cleared to market in the United States or any other market.

We sell some of our products only in international markets because they have not been approved for marketing in the United States. We may be unable to sell future products in Europe, the United States or any other market for a number of reasons. These reasons include, among others, that the potential products could be:

• ineffective or cause harmful side effects during preclinical testing or clinical trials;

• difficult to manufacture on a large scale; or

• uneconomical for the healthcare reimbursement system.

We may be unable to adequately protect our intellectual property rights or obtain necessary intellectual property rights from third parties which could adversely affect our business, including losing market share to our competitors and the inability to operate our business profitably.

Our success depends in part on our ability to obtain and defend patent and other intellectual property rights that are important to the commercialization of our products and therapies. We rely on patents, trade secrets, copyrights, know-how, trademarks, license agreements and contractual provisions to establish our intellectual property rights and protect our products. These legal means, however, afford only limited protection and may not adequately protect our rights. In addition, we cannot be assured that pending patent applications will be issued. The U.S. Patent and Trademark Office, or PTO, may deny or significantly narrow claims made under patent applications and the issued patents, if any, may not provide us with sufficient commercial protection. We could incur substantial costs in proceedings before the PTO. These proceedings could result in adverse decisions as to the priority of our inventions. We cannot be sure that patents we hold or may hold in the future will not be successfully challenged, invalidated or

34

circumvented in the future. Others, including our competitors, may independently develop similar or competing technology or design around any of our patents and may have or may in the future seek to apply for and obtain patents that may prevent, limit or interfere with our ability to make, issue, use and sell our products and product candidates. We have not secured patent protection in certain foreign countries in which our products are sold. The laws of some of the countries in which our products are or may be sold may not protect our products and intellectual property to the same extent as United States laws, or at all. We may be unable to protect our rights in trade secrets and unpatented proprietary technology in these countries.

We seek to protect our trade secrets and unpatented proprietary technology, in part, with confidentiality agreements with our employees and consultants. We cannot ensure, however, that:

• these agreements will not be breached;

• we will have adequate remedies for any breach; or

• our trade secrets will not otherwise become known to or independently developed by our competitors.

Any disclosure of confidential information to third parties or into the public domain could allow our competitors to use such information in competition against us. In addition, we may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed trade secrets or other proprietary information of their former employers.

Should financial results severely decline, we might have to record a significant goodwill impairment charge.

Under Statement of Financial Accounting Standard No. 142, Goodwill and Other Intangible Assets, we are required to evaluate goodwill each year for impairment. If we determine the fair value is less than the carrying value, an impairment loss will be recorded in our statement of operations. The determination of fair value is a highly subjective exercise and can produce significantly different results based on the assumptions used and methodologies employed. It is likely that if our financial results were to decline substantially and if macroeconomic conditions eroded substantially, we would have to record a non-cash goodwill impairment loss in our statement of operations.

We could incur significant costs and/or be required to stop the sale of the related product as a result of litigation or other proceedings relating to patent and other intellectual property rights.

Our success and competitive position depends in part on our ability to effectively prosecute claims against others that we believe are infringing our intellectual property rights and to defend against such claims made against us. The medical device industry is highly litigious with respect to patents and other intellectual property rights. Companies in the medical device industry have used intellectual property litigation to seek to gain a competitive advantage. In the future, we may become a party to lawsuits involving patents or other intellectual property. A legal proceeding, regardless of the outcome, would draw upon our financial resources and divert the time and efforts of our management. If we lose one of these proceedings, a court, or a similar foreign governing body, could require us to pay significant damages to third parties, require us to seek licenses from third parties and pay ongoing royalties, or require us to redesign our products. If we were unable to develop alternative technologies or acquire a license upon

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reasonable terms we may be prevented from manufacturing, using or selling our products. In addition to being costly, protracted litigation to defend or enforce our intellectual property rights could result in our customers or potential customers deferring or limiting their purchase or use of the affected products until the litigation is resolved.

We could incur significant costs or other negative impacts if significant product liability claims are made against us.

The manufacture and sale of medical devices exposes us to risk of product liability claims. In the past, and at present, we have a number of product liability claims relating to our products. In the future, we may be subject to additional product liability claims, some of which may damage our reputation, divert the time, attention and resources of our management, require us to pay substantial damage awards as a result of any successful claim, or otherwise have a negative impact on our business. As our product and therapy portfolio broadens into the treatment of additional medical indications, our historical product liability experience may not be a reflection of our longer term future exposure. As a result of our exposure to product liability claims, we currently carry product liability insurance with policy limits per occurrence and in the aggregate that we believe to be adequate. We cannot provide assurance, however, whether this insurance is sufficient, or if not, whether we will be able to obtain sufficient insurance to cover the risks associated with our business or whether such insurance will be available at premiums that are commercially reasonable. If a product liability claim or series of claims is brought against us for uninsured liabilities or for amounts in excess of our insurance coverage, our business could suffer.

We are required to comply with broad, pervasive and continually changing federal and state “fraud and abuse” laws, and, if we are unable to fully comply with such laws, we could face substantial penalties and our products could be excluded from government healthcare programs.

We are subject to various federal and state laws pertaining to healthcare fraud and abuse. These laws, which directly or indirectly affect our ability to operate our business, include, but are not limited to, the following:

• the federal Anti-Kickback Statute, which prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual, or the purchase, lease or order (or the arranging for or recommending of the purchase, lease or order) of a good or service, for which payment may be made under federal healthcare programs, such as the Medicare and Medicaid programs, and corresponding state laws;

• the federal False Claims Act, which imposes civil and criminal liability on individuals and entities who submit, or cause to be submitted, false or fraudulent claims for payment to the government; and

• the federal False Statements Statute, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services.

In the recent past, federal and state enforcement authorities, as well as private “whistleblowers” operating under the “qui tam” provisions of the federal False Claims Act, have sought to enforce these laws against manufacturers of medical devices, alleging, among other things, that certain financial relationships with physicians are not bona fide consulting or other legitimate

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agreements, but are instead intended to induce those physicians to use and recommend company products. These actions have resulted in some instances in substantial fines, penalties, and governmental supervision of those companies’ operations. Because our business necessitates frequent contact with physicians and other healthcare professionals, including financial relationships such as consulting agreements, training programs, and cooperative marketing arrangements, we have implemented a broad-based corporate compliance program, and voluntarily follow the AdvaMed Code of Ethics on Interactions with Health Care Professionals, in order to inform our employees regarding and maintain compliance with the foregoing laws and regulations. However, if our past or present operations are found to be in violation of any of the laws described above or other similar governmental regulations to which we or our customers are subject, we or our officers may be subject to the applicable penalty associated with the violation, including civil and criminal penalties, damages, fines, imprisonment, exclusion from the Medicare and Medicaid programs and the curtailment or restructuring of our operations. Similarly, if the physicians or other providers or entities with which we do business are found to be non-compliant with applicable laws, they may be subject to sanctions, which could also have a negative impact on us. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management’s attention from the operation of our business and damage our reputation especially when considering the high public scrutiny in this area. If enforcement action were to occur, our reputation and our business and financial condition may be harmed, even if we were to prevail or settle the action.

Our international operations expose us to various risks, including risks related to fluctuations in foreign currency exchange rates.

We derive a significant portion of our net sales from operations in international markets. During fiscal 2008 and 2007, 29.1 percent and 28.0 percent, respectively, of our sales were to customers outside the United States. Some of these sales were to governmental entities and other organizations with extended payment terms. A number of factors, including differing economic conditions, changes in political climate, differing tax structures, changes in diplomatic and trade relationships, and political or economic instability in the countries where we do business, could affect payment terms and our ability to collect foreign receivables. We have little influence over these factors and changes could have a material adverse impact on our business. In addition, foreign sales are influenced by fluctuations in currency exchange rates, primarily the Euro, Canadian dollar, Australian dollar, and Great Britain pound. Increases in the value of the foreign currencies relative to the United States dollar would positively impact our earnings and decreases in the value of the foreign currencies relative to the United States dollar would negatively impact our earnings.

We use derivative instruments, such as foreign exchange forward contracts, to hedge a portion of estimated currency exposures. The use of derivatives would only offset the portion hedged for adverse effects of an unfavorable change in foreign currency exchange rates and would also offset a portion of favorable movements in rates.

The risks of selling and shipping our products and of purchasing components and products internationally may adversely impact our revenues, results of operations and financial condition.

The sale and shipping of our products and services across international borders subject us to extensive United States and foreign governmental trade regulations, such as various anti-bribery laws, including the United States Foreign Corrupt Practices Act, export control laws, customs and

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import laws, and anti-boycott laws Any failure to comply with applicable laws and regulations could impact us in a variety of ways that include, but are not limited to, significant criminal, civil and administrative penalties, including imprisonment of individuals, fines and penalties, denial of export privileges, seizure of shipments, restrictions on certain business activities, and exclusion or debarment from government contracting. Also, the failure to comply with applicable legal and regulatory obligations could result in the disruption of our shipping and sales activities.

In addition, some countries in which we sell our products are, to some degree, subject to political, economic and/or social instability. Our international sales operations expose us and our representatives, agents and distributors to risks inherent in operating in foreign jurisdictions. These risks include:

• the imposition of additional United States and foreign governmental controls or regulations;

• the imposition of costly and lengthy new export licensing requirements;

• the imposition of United States and/or international sanctions against a country, company, person or entity with whom the company does business that would restrict or prohibit continued business with the sanctioned country, company, person or entity;

• economic instability;

• changes in duties and tariffs, license obligations and other non-tariff barriers to trade;

• the imposition of new trade restrictions;

• the imposition of restrictions on the activities of foreign agents, representatives and distributors;

• scrutiny of foreign tax authorities which could result in significant fines, penalties and additional taxes being imposed on us;

• pricing pressure that we may experience internationally;

• laws and business practices favoring local companies;

• difficulties in enforcing or defending intellectual property rights; and

• exposure to different legal and political standards due to our conducting business in several foreign countries.

We cannot provide assurance that one or more of these factors will not harm our business. Any material decrease in our international sales would adversely impact our revenues, results of operations and financial condition.

Risks related to participation in the Exchange Offer by holders of 2036 Notes

Our Board of Directors has not made a recommendation as to whether you should tender your 2036 Notes in exchange for 2041 Notes in the Exchange Offer, and we have not obtained a third-party determination that the Exchange Offer is fair to holders of our 2036 Notes.

Our Board of Directors has not made, and will not make, any recommendation as to whether holders of 2036 Notes should tender their 2036 Notes in exchange for 2041 Notes pursuant to the Exchange Offer. We have not retained, and do not intend to retain, any unaffiliated

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representative to act solely on behalf of the holders of the 2036 Notes for purposes of negotiating the terms of this Exchange Offer, or preparing a report or making any recommendation concerning the fairness of this Exchange Offer. Therefore, if you tender your 2036 Notes, you may receive less value than if you chose to keep them. Holders of 2036 Notes must make their own independent decisions regarding their participation in the Exchange Offer.

Upon consummation of the Exchange Offer, holders who exchange 2036 Notes will lose their rights under the 2036 Notes.

If you tender 2036 Notes and your 2036 Notes are accepted for exchange pursuant to the Exchange Offer, you will lose all of your rights as a holder of the exchanged 2036 Notes, including, without limitation, your right to future interest and principal payments with respect to the exchanged 2036 Notes, and your right to require us to repurchase the exchanged 2036 Notes as early as July 1, 2013 and your corresponding right to convert your 2036 Notes for a period of 60 days prior to such repurchase date. See “Summary—Summary of material difference between the 2041 Notes and the 2036 Notes.”

To the extent that a holder of 2036 Notes exchanges 2036 Notes for 2041 Notes in the Exchange Offer, the holder ultimately may find that we would have been able to repay the 2036 Notes when they otherwise may have been subject to repurchase at the option of the holder or would have matured but are unable to repay or refinance the 2041 Notes when they mature or are subject to repurchase at the option of the holder.

If you tender your 2036 Notes and your 2036 Notes are accepted for exchange, you will receive 2041 Notes, which have a later final maturity than the 2036 Notes that you presently own and postpone the first holder put right from July 1, 2013 to September 15, 2016. It is possible that holders of 2036 Notes who participate in the Exchange Offer will be adversely affected by the postponement of their put right by slightly more than three years, the elimination of additional put rights and the extension of maturity. Following the respective put dates and maturity date of the 2036 Notes, but prior to the put date and/or the maturity date of the 2041 Notes, we may become subject to a bankruptcy or similar proceeding or we may otherwise be in a position in which we are unable to repay or refinance the 2041 Notes when we are required to repurchase them or when they mature. If so, holders of the 2036 Notes who opted not to participate in the Exchange Offer may have been paid in full, and there is a risk that the holders of the 2041 Notes will not be paid in full. If you decide to tender 2036 Notes, you will be exposed to the risk of nonpayment for a longer period of time.

We intend to take the position that, although not free from doubt, the exchange of 2036 Notes for 2041 Notes will be treated as an exchange of old indebtedness for new indebtedness, which exchange will qualify as a recapitalization for United States federal income tax purposes. Nevertheless, a court could determine that for United States federal income tax purposes the exchange does not qualify as an exchange of old indebtedness for new indebtedness and/or a recapitalization.

We intend to take the position that, although not free from doubt, the exchange of 2036 Notes for 2041 Notes will be treated as an exchange of old indebtedness for new indebtedness, which exchange will qualify as a recapitalization for United States federal income tax purposes. If the exchange so qualifies, you generally should not recognize gain or loss as a result of the exchange, except that you will recognize any gain in an amount equal to the lesser of: (i) the excess, if any, of the issue price of the 2041 Notes received and any cash (including cash paid in respect of

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accrued interest) received in the Exchange Offer over your adjusted tax basis in your 2036 Notes, and (ii) any cash (including cash paid in respect of accrued interest) you receive in the Exchange Offer, plus, if the principal amount of the 2041 Notes you receive exceeds the principal amount of the 2036 Notes that you surrender in exchange therefor for United States federal income tax purposes, the fair market value of such excess principal amount of 2041 Notes. Any gain recognized on the exchange should be treated as ordinary interest income.

The application of the exchange and recapitalization provisions to the exchange of debt instruments such as the 2041 Notes and 2036 Notes is unclear. Moreover, due to the facts and circumstances surrounding a determination of whether an exchange of debt instruments has occurred, and whether such exchange qualifies as a recapitalization, a court could determine for United States federal income tax purposes that the 2041 Notes are a continuation of the 2036 Notes or that the Exchange Offer does not qualify as a recapitalization. In the event of a successful challenge by the IRS to the recapitalization characterization of the Exchange Offer, you generally would recognize gain or loss with respect to the 2036 Notes being exchanged equal to the difference between: (i) the issue price of the 2041 Notes received and any cash (including cash paid in respect of accrued interest) received in the Exchange Offer, and (ii) the adjusted tax basis in your 2036 Notes exchanged. Any gain recognized should be treated as ordinary interest income. The character of any loss recognized should be subject to special rules under the contingent debt regulations. See “United States federal income tax consequences.”

The liquidity of any trading market that currently exists for the 2036 Notes may be adversely affected by the Exchange Offer, and holders of 2036 Notes who fail to participate in the Exchange Offer may find it more difficult to sell their 2036 Notes after the Exchange Offer is completed.

There currently is a limited trading market for the 2036 Notes. To the extent that 2036 Notes are tendered and accepted for exchange pursuant to the Exchange Offer, the trading market for the remaining 2036 Notes will be even more limited or may cease to exist altogether. A debt security with a small outstanding aggregate principal amount or “float” may command a lower price than would a comparable debt security with a larger float. Therefore, the market price for the unexchanged 2036 Notes may be adversely affected. The reduced float may also make the trading prices of the remaining 2036 Notes more volatile.

The 2036 Notes are not listed for trading on any national securities exchange. We do not intend to list the 2041 Notes on any national securities exchange either.

Failure to complete the Exchange Offer successfully could negatively affect the prices of the 2036 Notes and our common stock.

Several conditions must be satisfied or waived in order to complete the Exchange Offer. The Exchange Offer is conditioned on (i) at least $100,000,000 aggregate principal amount of 2036 Notes being validly tendered and not validly withdrawn, (ii) the last reported sale price of our common stock on The NASDAQ Global Select Market not exceeding $17.64 per share on the Expiration Date and (iii) satisfaction of certain other customary conditions. We may waive any of the conditions to the Exchange Offer other than the condition that the registration statement of which this prospectus forms a part be declared effective by the Commission. The conditions to the Exchange Offer may not be satisfied, and if not satisfied or waived, to the extent that the conditions may be waived, the Exchange Offer may not occur or may be delayed. If the Exchange Offer is not completed or is delayed, the respective market prices of our common stock and the

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2036 Notes may decline to the extent that the respective current market prices reflect an assumption that the Exchange Offer has been or will be completed.

During the pendency of the Exchange Offer, it is likely that the market prices of the 2036 Notes and our common stock will be volatile.

It is likely that during the pendency of the Exchange Offer, the market price of our 2036 Notes and our common stock will be volatile. Certain holders of 2036 Notes who do not wish to participate in the Exchange Offer may sell their 2036 Notes in the secondary market to buyers who may wish to participate in the Exchange Offer. If such sellers did not hedge their 2036 Notes and such buyers wish to hedge their 2036 Notes and 2041 Notes, the buyers will seek to establish hedge positions with respect to the 2036 Notes and/or 2041 Notes by selling short shares of our common stock in the public market. In addition, holders of 2036 Notes wishing to exchange their 2036 Notes in the Exchange Offer who have been hedging their 2036 Notes are likely to adjust their hedge positions by selling short additional shares of our common stock in the public market. Such selling activity may lead to volatility in the price of our 2036 Notes and/or our common stock and/or may lead to unusually high trading volumes during the period of the Exchange Offer.

Risks related to the 2041 Notes

The 2041 Notes are our unsecured senior obligations and are subordinated in right of payment to our existing or future Credit Facility, any other existing or future secured indebtedness of ours or our subsidiary guarantors, and all indebtedness and other liabilities of our non-guarantor subsidiaries.

The 2041 Notes will be unsecured and subordinated in right of payment to the Credit Facility (or any future credit facility the amount of which is not limited) and to any other existing or future secured indebtedness of ours or our subsidiaries. In the event we default on any such indebtedness or in the event we undergo a bankruptcy, liquidation, dissolution, reorganization, or similar proceeding, the proceeds of the sale of our assets would first be applied to the repayment of indebtedness under the Credit Facility and, with respect to assets securing such indebtedness, to the repayment of such secured indebtedness before any of those proceeds would be available to make payments on the 2041 Notes. Accordingly, upon an acceleration of the 2041 Notes, there may be no assets remaining from which claims of the holders of the 2041 Notes could be satisfied or, if any assets remained, they might be insufficient to satisfy those claims in full. No payment in respect of the 2041 Notes will be permitted during certain periods when there exists a default or an event of default under the credit agreement governing our Credit Facility or when a default or event of default would result from such payment.

Certain of our subsidiaries, which we refer to as our subsidiary guarantors, serve as guarantors for the 2041 Notes. The payment of the principal of, and interest on, the 2041 Notes, including amounts payable on any redemption or required repurchase, will be effectively subordinated to any existing or future secured indebtedness of any of our subsidiary guarantors. The guarantees of the 2041 Notes by the subsidiary guarantors will rank junior to the guarantees of the Credit Facility (or any future credit facility the amount of which is not limited) by such subsidiaries and, in the case of American Medical Systems, Inc., to the payment obligations of such subsidiary under the Credit Facility as borrower. Each subsidiary guarantee will rank equally in right of payment with all senior subordinated debt of each subsidiary guarantor. The 2041 Notes are also structurally subordinated to any debt or other liabilities of our subsidiaries that do not guarantee

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the 2041 Notes, including all of our current foreign subsidiaries. Consequently, our right to receive assets of any subsidiaries upon their liquidation or reorganization, and the rights of holders of the 2041 Notes to share in those assets, would be subordinate to the claims of the creditors of our subsidiary guarantors that are effectively senior to the 2041 Notes, and structurally subordinate to all claims of the creditors of our non-guarantor subsidiaries. In addition, if a guarantee of the 2041 Notes by a subsidiary guarantor were held to be unenforceable or to constitute a fraudulent conveyance or fraudulent transfer under applicable law, such guarantee may be invalidated and the 2041 Notes would then be subordinated to all creditors’ claims of such guarantor.

The indenture governing the 2041 Notes does not prohibit us from incurring additional senior debt or secured debt, nor does it prohibit any of our subsidiaries from incurring additional liabilities. As of July 4, 2009, our aggregate principal amount of indebtedness was $511.7 million, of which an aggregate of $199.7 million was our senior debt (as defined herein) under the Credit Facility and an aggregate of $312.0 million was our senior subordinated indebtedness. Our non-guarantor subsidiaries had total indebtedness and other liabilities, including trade payables but excluding inter-company liabilities and liabilities not required to be reflected as a liability on a balance sheet in accordance with GAAP, of approximately $84 million. From time to time we and our subsidiaries may incur additional indebtedness, including indebtedness that is effectively or structurally senior to the 2041 Notes, which could adversely affect our ability to pay our obligations under the 2041 Notes.

Our operations are conducted through, and substantially all of our consolidated assets are held by, our subsidiaries.

We are a holding company. Our subsidiaries are separate and distinct legal entities with no obligation to pay any amounts due under the 2041 Notes except with respect to the guarantees to be entered into by the subsidiary guarantors of the 2041 Notes. Our ability to service our debt, including the 2041 Notes, and the ability of the subsidiary guarantors to meet their respective obligations under the guarantees, depends in part on the results of operations of our non-guarantor subsidiaries and upon the ability of such subsidiaries to provide us with cash, whether in the form of dividends, loans or otherwise, to pay amounts due on our obligations, including the 2041 Notes. These subsidiaries had net sales of $113.1 million, representing approximately 22.5% of our consolidated net sales of $501.6 million for fiscal 2008. Dividends, loans or other distributions to us from such subsidiaries may be subject to contractual and other restrictions and are subject to other business considerations. The Credit Facility also prohibits us and our subsidiaries from making payments of dividends and other distributions, except that we may make limited payments that are in compliance with all of the facility’s covenants and when no default or event of default exists under the facility.

We may not be able to finance future needs or adapt our business plan to changes because of restrictions placed on us by the Credit Facility and future instruments governing our debt.

The Credit Facility contains various covenants that limit our ability, and that of our subsidiaries, to, among other things:

• incur additional debt, including guarantees by us or our subsidiaries;

• make investments, pay dividends on our capital stock, redeem or repurchase our capital stock, redeem, repurchase or pay conversion obligations with respect to 2036 Notes and 2041 Notes or other subordinated obligations;

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• create specified liens;

• make capital expenditures;

• sell assets;

• make acquisitions;

• create or permit restrictions on the ability of our subsidiaries to pay dividends or make other distributions to us;

• engage in transactions with affiliates;

• engage in sale and leaseback transactions; and

• consolidate or merge with or into other companies or sell all or substantially all of our assets.

Our ability to comply with covenants contained in the Credit Facility and any future agreements governing other debt to which we are or may become a party may be affected by events beyond our control, including prevailing economic, financial and industry conditions. The Credit Facility requires us to comply with limits on key ratios including, without limitation, our total leverage ratio, senior leverage ratio, interest coverage ratio and fixed charge coverage ratio. Additionally, the Credit Facility contains numerous affirmative covenants, including covenants regarding payment of taxes and other obligations, maintenance of insurance, reporting requirements and compliance with applicable laws and regulations. Additional debt we incur in the future may subject us to further covenants.

Our failure to comply with these covenants could result in a default under the agreements governing the relevant debt. In addition, if any such default is not cured or waived, the default could result in an acceleration of debt under our other debt instruments that contain cross-acceleration or cross-default provisions, which could require us to repay or repurchase debt, together with accrued interest, prior to the date it otherwise is due and that could adversely affect our financial condition. If a default occurs under the Credit Facility, the lenders could cause all of the outstanding debt obligations under the Credit Facility to become due and payable, which would result in a default under the 2036 Notes and the 2041 Notes and could lead to an acceleration of obligations related to the 2036 Notes and the 2041 Notes. Upon a default or cross-default, the collateral agent, at the direction of some or all of the lenders under the Credit Facility, could proceed against the collateral. Even if we are able to comply with all of the applicable covenants, the restrictions on our ability to manage our business in our sole discretion could adversely affect our business by, among other things, limiting our ability to take advantage of financings, mergers, acquisitions and other corporate opportunities that we believe would be beneficial to us.

Recent developments in the convertible debt markets may adversely affect the market value of the 2041 Notes.

Governmental actions that interfere with the ability of convertible debt investors to effect short sales of the underlying common stock could significantly affect the market value of the 2041 Notes. Such government actions would make the convertible arbitrage strategy that many convertible debt investors employ difficult to execute for outstanding convertible debt of any company whose common stock or common shares are subject to such actions. The convertible debt markets recently experienced unprecedented disruptions resulting from, among other

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things, the recent instability in the credit and capital markets and the emergency orders issued by the SEC on September 17 and 18, 2008 (and extended on October 1, 2008). These orders were issued as a stop-gap measure while Congress worked to provide a comprehensive legislative plan to stabilize the credit and capital markets. Among other things, these orders temporarily imposed a prohibition on effecting short sales of common stock of certain financial companies. As a result, the SEC orders made the convertible arbitrage strategy that many convertible debt investors employ difficult to execute for outstanding convertible debt of those companies whose common stock was subject to the short sale prohibition. Although the SEC orders expired on October 8, 2008, the SEC is currently considering instituting other limitations on effecting short sales (such as the up-tick rule) and other regulatory organizations may do the same. On April 8, 2009, the SEC voted unanimously to seek public comment on whether short sale price restrictions or circuit breaker restrictions should be imposed. The SEC voted to propose two approaches to restrictions on short selling. One approach would apply on a market wide and permanent basis, including adoption of a new uptick rule, while the other would apply only to a particular security during severe market declines in that security, and would involve, among other limitations, bans on short selling in a particular security during a day if there is a severe decline in price in that security. If such limitations are instituted by the SEC or any other regulatory agencies, the market value of the 2041 Notes could be adversely affected.

Volatility in the market price and trading volume of our common stock could adversely impact the trading price of the 2041 Notes.

The stock market in recent years has experienced significant price and volume fluctuations that have often been unrelated to the operating performance of companies. The market price of our common stock could fluctuate significantly for many reasons, including in response to the risks described in this section, elsewhere in this prospectus or the documents we have incorporated by reference in this prospectus or for reasons unrelated to our operations, such as reports by industry analysts, investor perceptions or negative announcements by our customers, competitors or suppliers regarding their own performance, as well as industry conditions and general financial, economic and political instability. A decrease in the market price of our common stock would likely adversely impact the trading price of the 2041 Notes. The price of our common stock could also be affected by possible sales of our common stock by investors who adjust their hedge positions in connection with exchanging their 2036 Notes for the 2041 Notes. This trading activity could, in turn, affect the trading prices of the 2041 Notes.

Despite our current debt levels, we may still incur substantially more debt or take other actions which would intensify the risks discussed above.

Despite our current consolidated debt levels, we and our subsidiaries may be able to incur substantial additional debt in the future, subject to the restrictions contained in our debt instruments, some of which may be secured debt. The indenture will provide that we shall not, directly or indirectly, incur, or suffer to exist, any indebtedness that by its terms expressly rank senior in right of payment to the 2041 Notes and subordinate in right of payment to any senior debt; however, it will not limit our ability to incur additional indebtedness, including additional senior or secured indebtedness. The Credit Facility restricts our ability to incur additional indebtedness, including secured indebtedness, but in the event that the facility matures or is repaid, we may not be subject to such restrictions under the terms of any subsequent indebtedness.

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We may not have the ability to raise the funds necessary to settle conversions of the 2041 Notes or to repurchase the 2041 Notes when required, and our current debt contains and our future debt may contain limitations on our ability to pay cash due upon conversion or repurchase of the 2041 Notes.

Holders of the 2041 Notes will have the right to require us to repurchase the 2041 Notes on September 15, 2016, or upon the occurrence of a fundamental change at 100% of their principal amount, plus accrued and unpaid interest (including contingent and additional interest), if any, as described under “Description of the 2041 Notes—Fundamental change permits holders to require us to repurchase notes.” In addition, upon conversion of the 2041 Notes, we will be required to make cash payments of up to $1,000 for each $1,000 in principal amount of 2041 Notes converted as described in under “Description of the 2041 Notes—Settlement upon conversion.” However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of 2041 Notes surrendered therefor or 2041 Notes being converted.

In addition, our Credit Facility prohibits us from making any cash payments on the conversion of the 2041 Notes if a default or an event of default exists under that facility or if, after giving effect to such conversion (and any additional indebtedness incurred in connection with such conversion), a default or an event of default thereunder would result from such conversion and under certain other circumstances provided for in the Credit Facility. See “Description of other indebtedness—Senior secured credit facility.” If you tender 2041 Notes for conversion at a time when we are prohibited from paying amounts due upon conversion in cash, in certain circumstances described under “Description of the 2041 Notes—Conversion rights,” the conversion date with respect to the conversion of your notes will not occur and you will be prohibited from converting such notes. Our failure to convert your notes or to pay any amounts due upon conversion in such circumstances will not constitute a default or event of default under the indenture governing the 2041 Notes. In such circumstances, we will agree, however, to use reasonable efforts to permit such conversions, which efforts may include, without limitation, seeking to obtain the consent from our lenders under the Credit Facility, attempting to refinance the debt and the issuance and sale of additional equity securities. If despite our reasonable efforts conversions continue to be prohibited, we will promptly inform such converting holder and return such holder’s notes and the related notice of conversion will be deemed to be revoked to the extent of such returned notes.

We cannot assure you that the lenders under the Credit Facility will consent to the conversion of the 2041 Notes after we seek their consent. In addition, there can be no assurance that our efforts to refinance the Credit Facility and take such other actions as may be required to permit conversions will be sufficient.

Our ability to repurchase the 2041 Notes or to pay cash upon conversion of the 2041 Notes may be limited by law, by regulatory authority or by agreements governing our current and future indebtedness. Our failure to repurchase 2041 Notes at a time when the repurchase is required by the indenture or to pay any cash payable on future conversions of the 2041 Notes as required by the indenture would constitute a default under the indenture, except under certain circumstances described under “Description of the 2041 Notes—Conversion rights” when it would not constitute a default, whether or not such failure is due to restrictions under the Credit Facility. A default under the indenture or the occurrence of a fundamental change would also lead to a default under the Credit Facility or agreements governing future indebtedness. As a result, because our Credit Facility is defined as our Senior Debt, we would not be permitted to

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pay amounts due on the 2041 Notes under the subordination provisions of the indenture until all amounts due with respect to the Senior Debt are paid in full. See “Description of the 2041 Notes—Subordination.” If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the 2041 Notes or make cash payments upon conversions thereof.

The conditional conversion features of the 2041 Notes, if triggered, may adversely affect our financial condition and operating results.

In the event the conditional conversion features of the 2041 Notes are triggered, holders of 2041 Notes will be entitled to convert the 2041 Notes at any time during specified periods at their option. See “Description of the 2041 Notes—Conversion rights.” If one or more holders elect to convert their 2041 Notes, we would be required to settle any converted principal through the payment of cash, which could adversely affect our liquidity, unless we are prohibited from settling such conversions under the terms of our Credit Facility. See “—We may not have the ability to raise the funds necessary to settle conversions of the 2041 Notes or to repurchase the 2041 Notes when required, and our current debt contains and our future debt may contain limitations on our ability to pay cash due upon conversion or repurchase of the 2041 Notes” above. In addition, even if holders do not elect to convert their 2041 Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2041 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

Future sales of our common stock in the public market could lower the market price for our common stock and adversely impact the trading price of the 2041 Notes.

In the future, we may sell additional common stock to raise capital. In addition, a substantial number of our shares of common stock are reserved for issuance upon the exercise of stock options and upon conversion of the 2036 Notes and 2041 Notes. We cannot predict the size of future issuances or the effect, if any, that they may have on the market price for our common stock. The issuance and sale of substantial amounts of our common stock, or the perception that such issuances and sales may occur, could adversely affect the trading price of the 2041 Notes and the market price of our common stock and impair our ability to raise capital through the sale of additional equity securities.

Holders of 2041 Notes will not be entitled to any rights with respect to our common stock, but will be subject to all changes made with respect to them to the extent our conversion obligation includes our common stock.

Holders of 2041 Notes will not be entitled to any rights with respect to our common stock (including, without limitation, voting rights and rights to receive any dividends or other distributions on our common stock) prior to the last trading day of the observation period, but, to the extent our conversion obligation includes our common stock, holders of 2041 Notes will be subject to all changes affecting our common stock. For example, if an amendment is proposed to our certificate of incorporation or by laws requiring stockholder approval and the record date for determining the stockholders of record entitled to vote on the amendment occurs prior to the last trading day of the relevant observation period, then, to the extent our conversion obligation includes shares of our common stock, such holder will not be entitled to vote on the amendment, although such holder will nevertheless be subject to any changes affecting our common stock.

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The conditional conversion feature of the 2041 Notes could result in your receiving less than the value of our common stock into which the 2041 Notes would otherwise be convertible.

Except during the 60 calendar days prior to the business day immediately preceding September 15, 2016 and September 15, 2041 you may convert your 2041 Notes only if specified conditions are met. If the specific conditions for conversion are not met, you will not be able to convert your 2041 Notes, and you may not be able to receive the value of the cash and shares of common stock, if any, into which the 2041 Notes would otherwise be convertible.

Upon conversion of the 2041 Notes, you may receive less valuable consideration than expected because the value of our common stock may decline after you exercise your conversion right.

Under the 2041 Notes, a converting holder will be exposed to fluctuations in the value of our common stock during the period from the date such holder surrenders 2041 Notes for conversion until the date we settle our conversion obligation.

Under the 2041 Notes, the amount of consideration that you will receive upon conversion of your 2041 Notes will be determined by reference to the volume weighted average prices of our common stock for each trading day in a 20 trading day observation period. As described under “Description of the 2041 notes—Settlement upon conversion,” the “observation period” means (i) if the relevant conversion date occurs on or after the date of issuance of a notice of redemption as described under “Description of the 2041 Notes—Optional redemption,” but prior to the relevant redemption date, the 20 consecutive trading days beginning on and including the third scheduled trading day after such redemption date, (ii) if the relevant conversion date occurs during the 60 calendar days prior to the close of business on the business day immediately preceding September 15, 2016 or September 15, 2041, the 20 consecutive trading days beginning on and including the third scheduled trading day after September 15, 2016 or September 15, 2041, as applicable, and (iii) in all other instances, the 20 consecutive trading days beginning on and including the third scheduled trading day after the relevant conversion date.

Accordingly, if the price of our common stock decreases during this period, the amount and/or value of consideration you receive will be adversely affected. In addition, if the market price of our common stock at the end of such period is below the average of the volume weighted average price of our common stock during such period, the value of any common stock that you will receive in satisfaction of our conversion obligation will be less than the value used to determine the number of shares that you will receive.

The 2041 Notes are not protected by restrictive covenants.

The indenture governing the 2041 Notes does not contain any financial or operating covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or purchase of securities by us or any of our subsidiaries. The indenture contains no covenants or other provisions to afford protection to holders of the 2041 Notes in the event of a fundamental change involving us except to the extent described under “Description of the 2041 Notes—Fundamental Change Permits Holders to Require Us to Repurchase 2041 Notes,” “Description of the 2041 notes—Conversion rights—Adjustment to shares delivered upon conversion upon a make-whole fundamental change” and “Description of the 2041 notes—Consolidation, merger and sale of assets.”

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The adjustment to the conversion rate for 2041 Notes converted in connection with a make-whole fundamental change may not adequately compensate you for any lost value of your 2041 Notes as a result of such transaction.

If a make-whole fundamental change occurs prior to maturity, under certain circumstances, we will increase the conversion rate by a number of additional shares of common stock for 2041 Notes converted in connection with such make-whole fundamental change. The increase in the conversion rate will be determined based on the date on which the specified corporate transaction becomes effective and the price paid (or deemed paid) per share of common stock in such transaction, as described below under “Description of the 2041 Notes—Conversion rights—Adjustment to shares delivered upon a conversion upon a make-whole fundamental change.” The adjustment to the conversion rate for 2041 Notes converted in connection with a make-whole fundamental change may not adequately compensate you for any lost value of your 2041 Notes as a result of such transaction. In addition, if the price of our common stock in the transaction is greater than $100.00 per share or less than $14.83 per share (in each case, subject to adjustment), no additional shares will be added to the conversion rate. Moreover, in no event will the total number of additional shares of common stock issuable upon conversion as a result of this adjustment exceed 15.8991 per $1,000 principal amount of 2041 Notes, subject to adjustment in the same manner as the conversion rate as set forth under “Description of the 2041 Notes—Conversion rights—Conversion rate adjustments.”

Our obligation to increase the conversion rate upon the occurrence of a make-whole fundamental change could be considered a penalty, in which case the enforceability thereof would be subject to general principles of reasonableness of economic remedies.

The conversion rate of the 2041 Notes may not be adjusted for all dilutive events.

The conversion rate of the 2041 Notes is subject to adjustment for certain events, including, but not limited to, the issuance of stock dividends on our common stock, the issuance of certain rights or warrants, subdivisions, combinations, distributions of capital stock, indebtedness, or assets, cash dividends and certain issuer tender or exchange offers as described under “Description of the 2041 Notes—Conversion rights—Conversion rate adjustments.” However, the conversion rate will not be adjusted for other events, such as a third-party tender or exchange offer or an issuance of common stock for cash, that may adversely affect the trading price of the 2041 Notes or our common stock unless such third-party offer constitutes a make-whole fundamental change. An event that adversely affects the value of the 2041 Notes may occur, and that event may not result in an adjustment to the conversion rate.

Some significant restructuring transactions may not constitute a fundamental change, in which case we would not be obligated to offer to repurchase the 2041 Notes.

Upon the occurrence of a fundamental change, you have the right to require us to repurchase your 2041 Notes. However, the fundamental change provisions will not afford protection to holders of 2041 Notes in the event of other transactions that could adversely affect the 2041 Notes. For example, transactions such as leveraged recapitalizations, refinancings, restructurings, or acquisitions initiated by us may not constitute a fundamental change requiring us to repurchase the 2041 Notes. In the event of any such transaction, the holders would not have the right to require us to repurchase the 2041 Notes, even though each of these transactions could increase the amount of our indebtedness, or otherwise adversely affect our capital structure or any credit ratings, thereby adversely affecting the holders of 2041 Notes.

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We cannot assure you that an active trading market will develop for the 2041 Notes.

Prior to this offering, there has been no trading market for the 2041 Notes, and we do not intend to apply for listing of the 2041 Notes on any securities exchange or to arrange for quotation on any interdealer quotation system. We have been informed by the Sole Lead Dealer Manager that it intends to make a market in the 2041 Notes after the exchange offer is completed. However, the Sole Lead Dealer Manager may cease its market-making at any time without notice. In addition, the liquidity of the trading market in the 2041 Notes, and the market price quoted for the 2041 Notes, may be adversely affected by changes in the overall market for this type of security and by changes in our financial performance or prospects or in the prospects for companies in our industry generally. As a result, we cannot assure you that an active trading market will develop for the 2041 Notes. If an active trading market does not develop or is not maintained, the market price and liquidity of the 2041 Notes may be adversely affected. In that case you may not be able to sell your 2041 Notes at a particular time or you may not be able to sell your 2041 Notes at a favorable price.

You may be subject to tax if we make or fail to make certain adjustments to the conversion rate of the 2041 Notes even though you do not receive a corresponding cash distribution.

The conversion rate of the 2041 Notes is subject to adjustment in certain circumstances, including the payment of cash dividends. If the conversion rate is adjusted as a result of a distribution that is taxable to our common stockholders, such as a cash dividend, you may be deemed to have received a dividend subject to United States federal income tax without the receipt of any cash. In addition, a failure to adjust (or to adjust adequately) the conversion rate after an event that increases your proportionate interest in us could be treated as a deemed taxable dividend to you. If a make-whole fundamental change occurs on or prior to the maturity date of the 2041 Notes, under some circumstances, we will increase the conversion rate for 2041 Notes converted in connection with the make-whole fundamental change. Such increase may also be treated as a distribution subject to United States federal income tax as a dividend. Any deemed dividend may be subject to United States federal withholding or backup withholding tax, which may be set off against subsequent payments of cash and common stock on the 2041 Notes. See “United States federal income tax consequences.”

Federal and state statutes allow courts, under specific circumstances, to void guarantees of the notes. In such event, holders of the 2041 Notes would be structurally subordinated to creditors of the issuer of the voided guarantee.

Federal and state statutes allow courts, under specific circumstances, to void guarantees, subordinate claims under the guarantees to the guarantor’s other debt or take other action detrimental to holders of the guarantees of notes. Under the federal bankruptcy law and comparable provisions of state fraudulent transfer laws, the guarantees made by the subsidiary guarantors of the 2041 Notes could be voided or subordinated to other debt if, among other things:

• any subsidiary guarantor issued the guarantee to delay, hinder or defraud present or future creditors;

• any subsidiary guarantor received less than reasonably equivalent value or fair consideration for issuing such subsidiary guarantee and, at the time it issued its subsidiary guarantee, any subsidiary guarantor;

• was insolvent or rendered insolvent by reason of such incurrence;

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• was engaged in a business or transaction for which such guarantor’s remaining unencumbered assets constituted unreasonably small capital;

• intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature; or

• was a defendant in an action for money damages, or had a judgment for money damages docketed against it if, in either case, after final judgment, the judgment is unsatisfied.

Among other things, a legal challenge of a guarantee on fraudulent conveyance grounds may focus on the benefits, if any, realized by the guarantor as a result of our issuance of the notes. The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a subsidiary guarantor would be considered insolvent if, at the time it incurred the debt,

• the sum of its debts is greater than the fair value of all of its assets;

• the present fair saleable value of its assets was less than the amount that would be required in order to pay its probable liability on its existing debts and liabilities, including contingent liabilities, as they become absolute and mature; or

• it could not pay or is generally not paying its debts as they become due.

There is no way to predict with certainty what standards a court would apply to determine whether a guarantor was solvent at the relevant time. It is possible that a court could view the issuance of guarantees as a fraudulent conveyance. To the extent that a subsidiary guarantee were to be voided as a fraudulent conveyance or were to be held unenforceable for any other reason, holders of the 2041 Notes would cease to have any claim in respect of such subsidiary guarantor and would be creditors solely of ours and of the subsidiary guarantors whose guarantees had not been avoided or held unenforceable. In this event, the claims of the holders of the 2041 Notes against the issuer of an invalid guarantee would be subject to the prior payment in full of all other liabilities of the guarantor thereunder. After providing for all prior claims, there may not be sufficient assets to satisfy the claims of the holders of the notes relating to the voided guarantees.

The guarantees may be released under certain circumstances upon resale, exchange or transfer by us of the stock of the related guarantor or all or substantially all of the assets of the guarantor to a non-affiliate.

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Risks related to our common stock

The price of our common stock historically has been volatile. This volatility may affect the price at which you could sell your common stock, and the sale of substantial amounts of our common stock could adversely affect the price of our common stock.

The closing market price for our common stock has varied between a high of $18.20 per share and a low of $8.25 per share in the twelve month period ended July 4, 2009. This volatility may affect the price at which you could sell the common stock, if any, you receive upon conversion of your 2041 Notes, and the sale of substantial amounts of our common stock could adversely affect the price of our common stock. Our stock price is likely to continue to be volatile and subject to significant price and volume fluctuations in response to market and other factors, including the other factors discussed in “Risk factors” in this prospectus, as well as:

• the announcement of new products, acquisitions, commercial relationships, or service enhancements by us or our competitors;

• quarterly variations in our or our competitors’ operating results;

• changes in earnings estimates, investors’ perceptions, recommendations by securities analysts or our failure to achieve analysts’ earning estimates;

• general economic and market conditions and other factors unrelated to our operating performance or the operating performance of our competitors; and

• announcement by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments.

In addition, the sale of substantial amounts of our common stock could adversely impact its price. As of July 4, 2009, we had outstanding approximately 74.2 million shares of common stock and options to purchase approximately 7.5 million shares of common stock (of which approximately 4.5 million were exercisable as of that date). The sale or the availability for sale of a large number of shares of our common stock in the public market could cause the price of our common stock to decline.

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Selected historical financial data

The table below sets forth certain of our historical consolidated financial data as of and for each of the periods indicated. We have a 52-or 53-week fiscal year ending on the Saturday nearest December 31. Accordingly, fiscal years 2008, 2007, 2006, 2005 and 2004 ended on January 3, 2009, December 29, 2007, December 30, 2006, December 31, 2005 and January 1, 2005, respectively. The financial information for fiscal years 2008, 2007 and 2006 and as of December 29, 2007 and January 3, 2009, is derived from our audited consolidated financial statements which are incorporated by reference into this prospectus from our Current Report on Form 8-K filed on August 4, 2009. The financial information for fiscal years 2005 and 2004, and as of December 31, 2005 and January 1, 2005 is derived from our audited consolidated financial statements which are not incorporated by reference in this prospectus. The consolidated historical financial information as of and for the six-month periods ended June 28, 2008 and July 4, 2009 is derived from our unaudited condensed consolidated financial statements, which are incorporated by reference into this prospectus. In our opinion, such unaudited condensed consolidated financial statements include all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the financial data for such periods. The results for the six months ended July 4, 2009 are not necessarily indicative of the results to be achieved for the fiscal year ending January 2, 2010 or for any other future period.

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The data below should be read in conjunction with “Capitalization” included elsewhere in this prospectus and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the notes thereto, in the documents incorporated by reference in this prospectus.

	Year ended															Six months ended
	2008			2007			2006			2005			2004			June 28, 2008			July 4, 2009
																(Unaudited)
	(Dollars in thousands, except share data and ratios)
Statement of Operations Data
Net sales	$	501,641		$	463,928		$	358,318		$	262,591		$	208,772		$	250,159		$	250,026
Cost of sales		111,097			105,592			68,872			46,111			38,331			58,175			44,950
Gross profit		390,544			358,336			289,446			216,480			170,441			191,984			205,076
Operating expenses
Marketing and selling		175,670			169,495			123,204			92,001			72,910			91,382			86,201
Research and development		46,247			43,315			33,877			20,966			15,786			22,666			25,977
In-process research and development(1)		7,500			7,500			94,035			9,220			35,000			—			—
General and administrative		39,281			43,070			34,471			21,713			21,617			20,707			22,439
Integration costs(2)		—			1,103			1,712			—			—			—			—
Litigation settlement(3)		—			14,303			—			—			—			—			—
Amortization of intangibles(4)		34,465			18,264			12,393			7,884			5,708			8,647			6,666
Total operating expenses		303,163			297,050			299,638			151,784			151,021			143,402			141,283
Operating income (expense)		87,381			61,286			(10,192	)		64,696			19,420			45,582			63,793
Other (expense) income
Royalty and other		2,279			8,099			1,984			500			2,249			4,761			3,083
Interest income		747			1,153			2,754			1,246			517			352			146
Interest expense(5)		(27,398	)		(37,760	)		(18,395	)		(217	)		(783	)		(14,876	)		(10,376	)
Amortization of financing costs(6)		(18,482	)		(16,145	)		(14,434	)		—			—			(9,041	)		(7,955	)
Gain on extinguishment of debt(7)		5,631			—			—			—			—			—			4,562
Investment impairment(8)		—			—			—			—			(4,500	)		—			—
Total other (expense) income		(37,223	)		(44,653	)		(28,091	)		1,529			(2,517	)		(18,804	)		(10,540	)
Income (loss) from continuing operations before income taxes		50,158			16,633			(38,283	)		66,225			16,903			29,778			53,253
Provision for income taxes (9)		19,323			11,888			9,469			26,950			20,023			11,873			19,308
Net income (loss) from continuing operations		30,835			4,745			(47,752	)		39,275			(3,120	)		17,905			33,945
Loss from discontinued operations, net of tax benefit of $0.4 million and $2.7 million for 2007 and 2006, respectively(10)		—			(691	)		(5,435	)		—			—			—			—
Net income (loss)	$	30,835		$	4,054		$	(53,187	)	$	39,275		$	(3,120	)	$	17,905		$	33,945
Net income (loss) per share
Basic net income (loss) from continuing operations	$	0.42		$	0.07		$	(0.68	)	$	0.57		$	(0.05	)	$	0.25		$	0.46
Discontinued operations, net of tax		—			(0.01	)		(0.08	)		—			—			—			—
Basic net income (loss)	$	0.42		$	0.06		$	(0.76	)	$	0.57		$	(0.05	)	$	0.25		$	0.46
Diluted net income (loss) from continuing operations	$	0.42		$	0.06		$	(0.68	)	$	0.55		$	(0.05	)	$	0.24		$	0.46
Discontinued operations, net of tax		—			(0.01	)		(0.08	)		—			—			—			—
Diluted net income (loss)	$	0.42		$	0.06		$	(0.76	)	$	0.55		$	(0.05	)	$	0.24		$	0.46
Balance Sheet Data
Cash, cash equivalents, and short-term investments	$	42,965		$	35,181		$	29,541		$	46,390		$	51,168		$	42,376		$	49,331
Working capital		130,999			143,298			135,635			69,533			79,575			153,149			133,184
Total assets		1,044,097			1,115,868			1,126,620			359,326			300,550			1,092,141			1,039,717
Long-term liabilities		553,705			650,410			678,897			3,072			3,126			619,429			512,165
Stockholders’ equity		427,482			383,371			345,189			302,879			249,172			413,442			467,741

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(1) In 2008 and 2007, we recognized $7.5 million each year for in-process research and development charges related to the payments for achieving certain milestones related to our BioControl acquisition. In 2006, we recognized $25.6 million, $2.1 million, $62.1 million and $4.3 million, respectively, for in-process research and development charges related to the acquisitions of BioControl, Solarant, Laserscope and Ovion. In 2005 and 2004, we recognized in-process research and development charges of $9.2 million and $35.0 million, respectively, related to the acquisitions of Ovion and TherMatrx.

(2) In 2007 and 2006, we recorded $1.1 million and $1.7 million, respectively, of integration costs associated with the 2006 Laserscope acquisition, primarily related to travel, legal, consulting and retention bonuses.

(3) During 2007, we recorded a charge of $14.3 million for litigation settlements, primarily for the arbitration award to the former shareholders of CryoGen, Inc. (CryoGen) concerning an earnout payment related to our 2002 acquisition of CryoGen.

(4) In 2008, we recorded additional amortization expense of $17.1 million for the acceleration of amortization to adjust the carrying value of certain intangible assets to their current fair values

(5) During 2008, 2007, 2006, the six months ended June 28, 2008 and the six months ended July 4, 2009, interest expense included interest incurred on $373.8 million principal amount of 2036 Notes we issued on June 27, 2006. Average borrowings under the 2036 Notes were $371.1 million during 2008, 373.8 million during 2007, 2006 and the six months ended June 28, 2008, and $322.0 million during the six months ended July 4, 2009. Interest expense also included interest incurred on our Credit Facility entered into on July 20, 2006. Our average borrowings under the Credit Facility were approximately $281.7 million during 2008, $332.3 million during 2007, $366.0 million from inception through December 30, 2006, 298.7 million during the six months ended June 28, 2008, and $221.1 million during the six months ended July 4, 2009. We also incurred interest expense related to short-term borrowing activity during 2006.

(6) Amortization of financing costs relates to the deferred financing costs and debt discount for our 2036 Notes and our Credit Facility. Charges during 2006 also include a $7.0 million commitment fee for a bridge loan of up to $180 million in preparation for the acquisition of Laserscope. We did not use this financing for the Laserscope acquisition.

(7) During the fourth quarter of 2008, we recognized a $5.6 million gain on extinguishment of $34.5 million of 2036 Notes. During the first quarter of 2009, we recognized a $4.6 million gain on extinguishment of $27.3 million of 2036 Notes.

(8) During the fourth quarter of 2004, we recognized an investment impairment loss of $4.5 million related to our investment in InjecTx, when we determined that the likelihood of commercialization of the product had diminished dramatically.

(9) In 2007, we experienced adverse tax effects from the $14.3 million of litigation settlement charges primarily resulting from the resolution of the CryoGen arbitration. Partially offsetting this unfavorable impact was the favorable settlement of a tax audit for $0.9 million, which allowed us to release a reserve for uncertain tax benefits. The in-process research and development charges described above for 2004 through 2006, as well as the investment impairment charge in 2004, have no related tax benefit, except for BioControl. In 2006, we received a $2.4 million tax refund associated with the favorable agreement reached with the IRS involving the review of our 2001 and 2002 federal income tax returns.

(10) In conjunction with our acquisition of Laserscope in the third quarter of 2006, we committed to a plan to divest Laserscope’s aesthetics business. On January 16, 2007, we sold the aesthetics business to Iridex Corporation. The financial results of the aesthetics business have been reported as discontinued operations beginning from the date of acquisition of July 20, 2006 through the date of sale of January 16, 2007. The income tax benefit from the loss from discontinued operations was $0.4 million and $2.7 million in 2007 and 2006, respectively.

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Use of proceeds

We will not receive any proceeds from the exchange of the 2041 Notes for the 2036 Notes pursuant to the Exchange Offer.

Ratio of earnings to fixed charges

The following table sets forth information with respect to our consolidated ratios of earnings to fixed charges for the periods indicated:

	Quarter period ended		Fiscal year ended
	July 4, 2009	June 28, 2008	Jan. 3, 2009	Dec. 29, 2007	Dec. 30, 2006		Dec. 31, 2005	Jan. 1, 2005
Ratio of Earnings to Fixed Charges	3.9x	3.8x	2.1x	1.3x	(a	)	140.1x	17.5x

(a) Due to the registrant’s loss in 2006, the ratio coverage was less than 1:1. The registrant would have needed to generate additional earnings of $38.3 million to achieve a coverage of 1:1 in 2006.

For purposes of computing this ratio, “earnings” consist of pre-tax income from continuing operations before adjustment for income or loss from equity investees; fixed charges; amortization of capitalized interest; distributed income of equity investees; and the registrant’s share of pre-tax losses of equity investees for which charges arising from guarantees are included in fixed charges, less interest capitalized; preference security dividend requirements of consolidated subsidiaries; and the noncontrolling interest in pre-tax income of subsidiaries that have not incurred fixed charges. “Fixed charges” include interest whether expensed or capitalized, amortization of debt expense, discount or premium related to indebtedness and such portion of rental expense that we deem to be representative of interest.

In May 2008, the Financial Accounting Standards Board (“FASB”) issued a new Staff Position No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“FSP APB 14-1”) that became effective for fiscal years beginning after December 15, 2008 that impacts the accounting for the components of convertible debt that can be settled wholly or partly in cash upon conversion. The new requirements are to be applied retrospectively to previously issued convertible debt instruments, and thus the ratio of earnings to fixed charges shown above are calculated using financial statement amounts accounted for under the new requirements. Please see our Form 8-K dated August 4, 2009 for more information on the adoption of FSP APB 14-1.

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Capitalization

The following table shows our consolidated historical cash and cash equivalents, short-term investments and our capitalization as of July 4, 2009 and as adjusted to give effect to the consummation of the Exchange Offer. For purposes of the “as adjusted” information in the following table, we have assumed $250,000,000 aggregate principal amount of 2036 Notes is exchanged in the Exchange Offer for an equal aggregate principal amount of 2041 Notes. We cannot assure you that such amounts of securities will be exchanged. The table below reflects the impact of FSP APB14-1. The “as adjusted” information is not intended to provide any indication of what our actual financial position, including actual cash balances and borrowings, would have been had the Exchange Offer been completed as of July 4, 2009 or to project our financial position for any future date. The “as adjusted” information is based on our best current assumptions and those assumptions could change.

This table should be read in conjunction with “Selected historical financial data” and with our consolidated financial statements, which are incorporated by reference in this prospectus.

	As of July 4, 2009
	Actual		As adjusted
	(Unaudited)
	(Dollars in millions)
Cash and cash equivalents	$	29.6	$	21.5
Short term investments		19.7		19.7
Long term liabilities
Senior secured credit facility		194.6		194.6
3.25% Convertible senior subordinated notes, due 2036, net of discount of $64.5 and $12.3, respectively		247.5		49.7
3.75% Convertible senior subordinated notes, due 2041, net of discount of $96.6		—		153.4
Total long term liabilities	$	442.1	$	397.7
Stockholders’ equity:
Common stock, par value $.01 per share; authorized 200,000,000 shares; issued and outstanding: 74,160,172 shares at July 4, 2009, actual and as adjusted*	$	0.7	$	0.7
Additional paid-in capital		375.2		389.5
Accumulated other comprehensive income		3.9		3.9
Retained earnings		87.9		95.0
Total stockholders’ equity		467.7		489.1
Total capitalization	$	909.8	$	886.8

* Does not reflect shares issuable upon exercise of outstanding options or upon conversion of 2036 Notes or 2041 Notes.

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The Exchange Offer

Purpose of the Exchange Offer

Holders of 2036 Notes may require us to repurchase all or a portion of their 2036 Notes on certain future dates, the first of which will occur on July 1, 2013. The purpose of the Exchange Offer is to provide us with improved financial flexibility by allowing us to exchange a portion of the 2036 Notes with the 2041 Notes. The 2041 Notes would only permit holders to require us to repurchase all or a portion of the Notes on September 15, 2016. The 2041 Notes also extend the maturity of the debt out to 2041.

Terms of the Exchange Offer

Upon the terms and subject to the conditions set forth in this prospectus and the related letter of transmittal, we are offering to exchange up to $250,000,000 maximum aggregate principal amount of our new 2041 Notes for an equal aggregate principal amount of our 2036 Notes. In the event that more than $250,000,000 aggregate principal amount of the 2036 Notes is validly tendered and not validly withdrawn, such notes will be subject to proration as described in “The Exchange Offer—Maximum exchange amount; proration.” We will also pay in cash accrued and unpaid interest on 2036 Notes accepted for exchange from the last applicable interest payment date to, but excluding, the Settlement Date. Subject to the satisfaction or waiver of all conditions to the Exchange Offer and the terms of the Exchange Offer described in this prospectus, 2036 Notes that are validly tendered and not validly withdrawn will be accepted for exchange in accordance with the terms of the Exchange Offer. The 2041 Notes will be issued only in minimum denominations of $1,000 and integral multiples of $1,000.

The Exchange Offer is subject to the conditions discussed under “—Conditions to the Exchange Offer,” including, among other things, that the registration statement of which this prospectus forms a part is declared effective and is not subject to a stop order or any proceedings for that purpose. The Exchange Offer is also conditioned on (i) at least $100,000,000 aggregate principal amount of 2036 Notes being validly tendered and not validly withdrawn, (ii) the last reported sale price of our common stock on The NASDAQ Global Select Market not exceeding $17.64 per share on the Expiration Date and (iii) the satisfaction of certain other customary conditions. We may waive, in accordance with applicable law, any of the conditions to the Exchange Offer other than the condition that the registration statement of which this prospectus forms a part be declared effective by the Commission. See “—Conditions to the Exchange Offer.” We will not be required to accept for exchange any outstanding 2036 Notes tendered and may terminate this Exchange Offer if any condition of this Exchange Offer as described under “—Conditions to the Exchange Offer” remains unsatisfied.

The Exchange Offer will expire at midnight, New York City time, on September 11, 2009, unless extended or earlier terminated by us. You may withdraw your tendered 2036 Notes at any time prior to the Expiration Date. You must validly tender your 2036 Notes for exchange in the Exchange Offer on or prior to the Expiration Date to be eligible to receive the Exchange Offer consideration.

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Assuming that we have not previously elected to terminate the Exchange Offer, 2036 Notes validly tendered in accordance with the procedures set forth in this prospectus and the related letter of transmittal on or prior to midnight, New York City time, on the Expiration Date, will, upon the terms and subject to the conditions of the Exchange Offer (including the proration provisions), be accepted for exchange and payment by us of the exchange consideration, and payments will be made therefor on the Settlement Date, which will be promptly after the Expiration Date.

This prospectus and the related letter of transmittal are being sent to all registered holders of 2036 Notes. There will be no fixed record date for determining registered holders of 2036 Notes entitled to participate in the Exchange Offer.

Any 2036 Notes that are accepted for exchange in the Exchange Offer will be cancelled and retired. Any 2036 Notes tendered but not accepted because they were not validly tendered or were validly withdrawn shall remain outstanding upon completion of the Exchange Offer. If any tendered 2036 Notes are not accepted for exchange and payment because of proration, an invalid tender, the occurrence of other events set forth in this prospectus or otherwise, they will be returned, without expense, to the tendering holder as promptly as practicable after the Expiration Date. Any 2036 Notes that are not exchanged in the Exchange Offer will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits their holders have under the applicable governing indenture. Holders of 2036 Notes do not have any appraisal or dissenters’ rights under the applicable governing indenture or otherwise in connection with the Exchange Offer.

If your 2036 Notes are held through a broker or other nominee who tenders the 2036 Notes on your behalf (other than those tendered through either Dealer Manager), your broker may charge you a commission for doing so. You should consult with your broker or nominee to determine whether any charges will apply. In addition, holders who tender 2036 Notes in the Exchange Offer will not be required to pay transfer taxes with respect to the exchange of 2036 Notes, subject to the instructions in the related letter of transmission. We will pay all charges and expenses in connection with the Exchange Offer, other than applicable taxes as described below in “—Transfer taxes.” It is important that you read “—Fees and expenses” below for more details regarding fees and expenses incurred in the Exchange Offer.

We shall be deemed to have accepted for exchange 2036 Notes validly tendered and not validly withdrawn when we have given oral or written notice of the acceptance to the Exchange Agent. The Exchange Agent will act as agent for the holders of 2036 Notes who tender their 2036 Notes in the Exchange Offer for the purposes of receiving the Exchange Offer consideration from us and delivering the Exchange Offer consideration to the exchanging holders. We expressly reserve the right to amend or terminate the Exchange Offer, and not to accept for exchange any 2036 Notes not previously accepted for exchange, upon the occurrence of any of the conditions specified below under “—Conditions to the Exchange Offer.”

We will not accept any tender that would result in the issuance of less than $1,000 principal amount of 2041 Notes. We will also pay in cash accrued and unpaid interest on 2036 Notes accepted for exchange from the last applicable interest payment date to, but excluding, the Settlement Date.

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Maximum exchange amount; proration

The maximum aggregate principal amount of 2036 Notes that we will accept for tender in the Exchange Offer is $250,000,000. In the event that more than $250,000,000 aggregate principal amount of the 2036 Notes is validly tendered and not validly withdrawn, such notes will be subject to proration. Proration for each holder validly tendering 2036 Notes will be based on the ratio of the aggregate principal amount of 2036 Notes validly tendered by the holder to the total aggregate principal amount of 2036 Notes validly tendered by all holders. The ratio for each tendering holder will be applied to determine the total principal amount of 2036 Notes that will be purchased from such holder pursuant to the offer. If proration of tendered 2036 Notes is required, we will determine the final proration factor promptly after the Expiration Date of the offer but may not be able to announce any proration until at least three NASDAQ Global Select Market trading days after the Expiration Date to the extent that 2036 Notes are tendered by guaranteed delivery.

The preliminary results of any proration will be announced by press release promptly after the expiration date. Holders may obtain preliminary proration information from the information agent, and may be able to obtain this information from their brokers. In the event of proration, we anticipate that we will commence exchange of the tendered 2036 Notes promptly after the Expiration Date, but no later than five business days after the Expiration Date.

Resale of 2041 Notes received pursuant to the Exchange Offer

Any 2041 Notes received pursuant to this Exchange Offer generally may be offered for resale, resold and otherwise transferred without further registration under the Securities Act and without delivery of a prospectus meeting the requirements of Section 10 of the Securities Act if the holder is not our “affiliate” within the meaning of Rule 144(a)(1) under the Securities Act. Any holder who is our affiliate at the time of the exchange must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resales, unless such sale or transfer is made pursuant to an exemption from such requirements and the requirements under applicable state securities laws.

Consequences of failure to participate in the Exchange Offer

Any 2036 Notes that are not exchanged in the Exchange Offer will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits their holders have under the applicable governing indenture.

There is currently a limited trading market for the 2036 Notes. To the extent that 2036 Notes are tendered and accepted for exchange pursuant to the Exchange Offer, the trading market for the remaining 2036 Notes will be even more limited or may cease to exist altogether. A debt security with a small outstanding aggregate principal amount or “float” may command a lower price than would a comparable debt security with a larger float. Therefore, the market price for the unexchanged 2036 Notes may be adversely affected. The reduced float may also make the trading prices of the remaining 2036 Notes more volatile.

Holders of 2036 Notes may require us to repurchase all or a portion of their 2036 Notes on July 1, 2013, July 1, 2016, July 1, 2021, July 1, 2026, and July 1, 2031 for cash at a repurchase price equal to 100% of the principal amount of the 2036 Notes, plus accrued and unpaid interest (including contingent interest, if any) to, but not including, the repurchase date. Holders of the 2041 Notes may require us to repurchase all or a portion of their 2041 Notes on September 15, 2016 only.

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On or after July 6, 2011, the 2036 Notes will be subject to optional redemption in full by us. As a result, holders who do not exchange all of their 2036 Notes in the Exchange Offer and who do not convert their 2036 Notes pursuant to their respective terms on or prior to the date we are entitled to redeem the 2036 Notes may lose the ability to receive the applicable conversion consideration upon conversion of their 2036 Notes. In addition, following completion of the Exchange Offer, we may repurchase additional 2036 Notes that remain outstanding after the Exchange Offer in the open market, in privately negotiated transactions, additional exchange offers, or otherwise. Future purchases of 2036 Notes that remain outstanding after the Exchange Offer may be on terms that are more or less favorable than the Exchange Offer. Exchange Act Rules 14e-5 and 13e-4 generally prohibit us and our affiliates from purchasing any 2036 Notes, other than pursuant to the Exchange Offer, until 10 business days after the Expiration Date of the Exchange Offer. Future purchases, if any, will depend on many factors, which include market conditions and the condition of our business.

Expiration Date; extension; termination; amendment

The Exchange Offer will expire at midnight, New York City time, on September 11, 2009 (which is the end of the day on September 11, 2009), unless we have extended the period of time that the Exchange Offer is open. The Exchange Offer will be open for at least 20 business days as required by Rule 14e-1(a) under the Exchange Act.

We reserve the right to extend the period of time that the Exchange Offer is open, and delay acceptance for exchange of any 2036 Notes, by giving oral or written notice to the Exchange Agent and by timely public announcement no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. During any extension, all 2036 Notes previously tendered will remain subject to the Exchange Offer unless properly withdrawn.

In addition, we reserve the right to:

• terminate or amend the Exchange Offer and not to accept for exchange any 2036 Notes not previously accepted for exchange upon the occurrence of any of the events specified below under “—Conditions to the Exchange Offer” that have not been waived by us; and

• amend the terms of the Exchange Offer in any manner permitted or not prohibited by law.

If we terminate or amend the Exchange Offer, we will notify the Exchange Agent by oral or written notice (with any oral notice to be promptly confirmed in writing) and will issue a timely press release or other public announcement regarding the termination or amendment.

If we make a material change in the terms of the Exchange Offer or the information concerning the Exchange Offer, we will promptly disseminate disclosure regarding the changes to the Exchange Offer and extend the Exchange Offer, if required by law, to ensure that the Exchange Offer remains open a minimum of five business days from the date we disseminate disclosure regarding the changes.

If we make a change in the principal amount of 2036 Notes sought or the Exchange Offer consideration, including the applicable exchange ratio, or we make any changes to the offered 2041 Notes, we will promptly disseminate disclosure regarding the changes and extend the Exchange Offer, if required by law, to ensure that the Exchange Offer remains open a minimum of ten business days from the date we disseminate disclosure regarding the changes.

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Procedures for tendering 2036 Notes

We have forwarded to you, along with this prospectus, a letter of transmittal relating to the Exchange Offer. A holder need not submit a letter of transmittal if the holder tenders 2036 Notes in accordance with the procedures mandated by DTC’s Automated Tender Offer Program (“ATOP”). To tender 2036 Notes without submitting a letter of transmittal, the electronic instructions sent to DTC and transmitted to the Exchange Agent must contain your acknowledgment of receipt of, and your agreement to be bound by and to make all of the representations contained in, the letter of transmittal. In all other cases, a letter of transmittal must be manually executed and delivered as described in this prospectus.

Only a holder of record of 2036 Notes may tender 2036 Notes in the Exchange Offer. To tender in the Exchange Offer, a holder must:

(1) either:

• properly complete, duly sign and date the letter of transmittal, or a facsimile of the letter of transmittal, have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires and deliver the letter of transmittal or facsimile together with any other documents required by the letter of transmittal, to the Exchange Agent on or prior to the Expiration Date; or

• instruct DTC to transmit on behalf of the holder a computer-generated message to the Exchange Agent in which the holder of the 2036 Notes acknowledges and agrees to be bound by the terms of, and to make all of the representations contained in, the letter of transmittal, which computer-generated message shall be received by the Exchange Agent on or prior to midnight, New York City time, on the Expiration Date, according to the procedure for book-entry transfer described below; and

(2) deliver to the Exchange Agent on or prior to the Expiration Date confirmation of book-entry transfer of your 2036 Notes into the Exchange Agent’s account at DTC pursuant to the procedure for book-entry transfers described below.

Alternatively, if a holder wishes to tender its 2036 Notes for exchange in the Exchange Offer and the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Exchange Agent on or prior to the Expiration Date, the holder must tender its 2036 Notes according to the guaranteed delivery procedures set forth under “—Guaranteed delivery procedures.”

To be tendered effectively, the Exchange Agent must receive any physical delivery of the letter of transmittal and other required documents at the address set forth on the back cover of this prospectus on or prior to the Expiration Date, or, in the case of guaranteed delivery, no later than three NASDAQ Global Select Market trading days after the Expiration Date. To receive confirmation of valid tender of 2036 Notes, a holder should contact the Exchange Agent at its telephone number listed on the back cover of this prospectus.

The tender of 2036 Notes by a holder that is not validly withdrawn prior to expiration of the Exchange Offer will constitute an agreement between that holder and us in accordance with the terms and subject to the conditions set forth in this prospectus and the related letter of transmittal. Such agreement will be governed by, and construed in accordance with, the laws of the State of New York.

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If the related letter of transmittal or any other required documents are physically delivered to the Exchange Agent, the method of delivery is at the holder’s election and risk. Rather than mail these items, we recommend that holders use an overnight or hand delivery service, properly insured. In all cases, holders should allow sufficient time to assure delivery to the Exchange Agent before expiration of the Exchange Offer. Holders should not send letters of transmittal to us, the Dealer Managers or the Information Agent. Holders may request their respective brokers, dealers, commercial banks, trust companies or other nominees to effect the above transactions for them.

Any beneficial owner whose 2036 Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct it to tender on the owner’s behalf if it wishes to participate in the Exchange Offer. You should keep in mind that your intermediary may require you to take action with respect to the Exchange Offer a number of days before the Expiration Date in order for such entity to tender 2036 Notes on your behalf on or prior to the Expiration Date in accordance with the terms of the Exchange Offer.

If the applicable letter of transmittal is signed by a participant in DTC, the signature must correspond with the name as it appears on the security position listing as the holder of the 2036 Notes.

A signature on a letter of transmittal or a notice of withdrawal must be guaranteed by an eligible institution in certain circumstances. As used in this prospectus, “eligible institution” means a bank, broker, dealer, municipal securities dealer, municipal securities broker, government securities dealer, government securities broker, credit union, national securities exchange, registered securities association, clearing agency or savings association. The signature need not be guaranteed by an eligible institution if the 2036 Notes are tendered:

• by a registered holder who has not completed either of the boxes entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal; or

• for the account of an eligible institution.

If the letter of transmittal is signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, these persons should so indicate when signing. Unless we waive this requirement, they should also submit evidence satisfactory to us of their authority to deliver the letter of transmittal.

We will determine in our sole discretion all questions as to the validity, form, eligibility, including time of receipt, acceptance and withdrawal, of tendered 2036 Notes. Our determination will be final and binding, absent a finding to the contrary by a court of competent jurisdiction. We reserve the absolute right to reject any 2036 Notes not validly tendered or any 2036 Notes the acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular 2036 Notes. A waiver of any defect or irregularity with respect to the tender of one tendered security shall not constitute a waiver of the same or any other defect or irregularity with respect to the tender of any other tendered securities except to the extent we may otherwise so provide. Our interpretation of the terms and conditions of the Exchange Offer, including the instructions in the letter of transmittal, will be final and binding on all parties, absent a finding to the contrary by a court of competent jurisdiction.

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Unless waived, any defects or irregularities in connection with tenders of 2036 Notes must be cured within the time that we determine. Although we intend to notify holders of defects or irregularities with respect to tenders of 2036 Notes, none of us, our Board of Directors, the Dealer Managers, the Information Agent, the Exchange Agent or any other person will incur any liability for failure to give notification. Tenders of 2036 Notes will not be deemed made until those defects or irregularities have been cured or waived. Any 2036 Notes received by the Exchange Agent that are not validly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent without cost to the tendering holder, unless otherwise provided in the letter of transmittal, promptly following the Expiration Date.

In all cases, we will accept 2036 Notes for exchange pursuant to the Exchange Offer only after the Exchange Agent timely receives:

• a timely book-entry confirmation that 2036 Notes have been transferred into the Exchange Agent’s account at DTC; and

• a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted computer-generated message to the Exchange Agent.

Holders should receive copies of the letter of transmittal with the prospectus. A holder may obtain additional copies of the letter of transmittal for the 2036 Notes from the Information Agent at its offices listed on the back cover of this prospectus.

Book-entry transfer

The Exchange Agent has established accounts with respect to the 2036 Notes at DTC for purposes of the Exchange Offer.

The Exchange Agent and DTC have confirmed that any financial institution that is a participant in DTC may utilize DTC’s ATOP procedures to tender 2036 Notes.

Any participant in DTC may make book-entry delivery of 2036 Notes by causing DTC to transfer the 2036 Notes into the Exchange Agent’s applicable account in accordance with DTC’s ATOP procedures for transfer.

However, the exchange for the 2036 Notes so tendered will be made only after a book-entry confirmation of such book-entry transfer of 2036 Notes into the Exchange Agent’s applicable account, and timely receipt by the Exchange Agent of an agent’s message and any other documents required by the letter of transmittal. The term “agent’s message” means a message, transmitted by DTC and received by the Exchange Agent and forming part of a book-entry confirmation, which states that DTC has received an express acknowledgment from a participant tendering 2036 Notes that are the subject of the book-entry confirmation that the participant has received and agrees to be bound by the terms of, and to make all of the representations contained in, the letter of transmittal, and that we may enforce that agreement against the participant.

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Guaranteed delivery procedures

Holders who wish to tender their 2036 Notes and (i) who cannot comply with the procedures for book-entry transfer in a timely manner, or (ii) who cannot deliver a letter of transmittal, agent’s message (as defined above under “—Book-entry transfer”) or any other required documents to the Exchange Agent on or prior to the Expiration Date, may effect a tender if all the following conditions are met:

• your tender is made by or through an eligible institution;

• a validly completed and duly executed notice of guaranteed delivery in the form we have provided is received by the Exchange Agent, as provided below, prior to the Expiration Date; and

• the Exchange Agent receives, at its address set forth on the back cover of this prospectus and within the period of three NASDAQ Global Select Market trading days after the Expiration Date, a book-entry confirmation of the transfer of the 2036 Notes into the Exchange Agent’s account at DTC, and either:

• a properly completed and duly executed letter of transmittal, which includes all signature guarantees required thereon and all other required documents or

• a properly transmitted agent’s message.

A notice of guaranteed delivery must be delivered to the Exchange Agent by hand, overnight courier, facsimile transmission or mail before the Expiration Date and must include a guarantee by an eligible institution in the form set forth in the notice of guaranteed delivery.

Withdrawal rights

You may withdraw your tender of 2036 Notes at any time on or prior to midnight, New York City time, on the Expiration Date. In addition, if not previously returned, you may withdraw 2036 Notes that you tender that are not accepted by us for exchange after expiration of 40 business days from August 14, 2009. For a withdrawal to be effective, the Exchange Agent must receive a computer generated notice of withdrawal, transmitted by DTC on behalf of the holder in accordance with the standard operating procedure of DTC or a written notice of withdrawal, sent by facsimile transmission, receipt confirmed by telephone, or letter, before the Expiration Date. A form of notice of withdrawal may be obtained from the Information Agent. Any notice of withdrawal must:

• specify the name of the person that tendered the 2036 Notes to be withdrawn;

• identify the 2036 Notes to be withdrawn, including the certificate number or numbers, if physical certificates were tendered, and principal amount of such 2036 Notes;

• include a statement that the holder is withdrawing its election to have the 2036 Notes exchanged;

• be signed by the holder in the same manner as the original signature on the letter of transmittal by which the 2036 Notes were tendered, or by the same entity previously delivering the related agent’s message, including any required signature guarantees, and, in the case of certificated securities, be accompanied by documents of transfer sufficient to have the trustee under the applicable indenture register the transfer of the 2036 Notes into the name of the person withdrawing the tender; and

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• specify the name in which any of the 2036 Notes are to be registered, if different from that of the person that tendered the 2036 Notes.

Any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn 2036 Notes or otherwise comply with DTC’s procedures, or, in the case of certificated securities, the name and address to which such withdrawn 2036 Notes are to be sent.

Any 2036 Notes validly withdrawn will not have been validly tendered for exchange for purposes of the Exchange Offer. Any 2036 Notes that have been tendered for exchange but which are not exchanged for any reason will be credited to an account with DTC specified by the holder, or, in the case of certificated securities, if any, returned to the tendering holder, as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn 2036 Notes may be re-tendered by following one of the procedures described under “—Procedures for tendering 2036 Notes” above at any time on or prior to the Expiration Date.

Acceptance of 2036 Notes for exchange; Delivery of Exchange Offer consideration

Upon satisfaction or waiver of all of the conditions to the Exchange Offer and upon the terms and subject to the conditions of the Exchange Offer, we will promptly accept such 2036 Notes validly tendered that have not been validly withdrawn, subject any applicable proration. We will pay the Exchange Offer consideration in exchange for such 2036 Notes accepted for exchange promptly after the Expiration Date. For purposes of the Exchange Offer, we will be deemed to have accepted 2036 Notes for exchange when we give oral (promptly confirmed in writing) or written notice of acceptance to the Exchange Agent.

In all cases, we will pay the Exchange Offer consideration in exchange for 2036 Notes that are accepted for exchange pursuant to the Exchange Offer only after the Exchange Agent timely receives a book-entry confirmation of the transfer of the 2036 Notes into the Exchange Agent’s account at DTC, and a properly completed and duly executed letter of transmittal and all other required documents, or a properly transmitted agent’s message.

We will deliver 2041 Notes in exchange for 2036 Notes accepted for exchange in the Exchange Offer and pay in cash accrued and unpaid interest on 2036 Notes accepted for exchange, promptly after the expiration of the Exchange Offer, by issuing the 2041 Notes and paying such accrued and unpaid interest on the Settlement Date to the Exchange Agent (or upon its instructions, to DTC), which will act as agent for you for the purpose of receiving the 2041 Notes and accrued and unpaid interest and transmitting the 2041 Notes and accrued and unpaid interest to you. Tendering holders of the 2036 Notes should indicate in the applicable box in the letter of transmittal or to the book-entry transfer facility in the case of holders who electronically transmit their acceptance through ATOP the name and address to which delivery of the 2041 Notes and payment of accrued and unpaid interest on the 2036 Notes accepted for exchange is to be sent, if different from the name and address of the person signing the letter of transmittal or transmitting such acceptance through ATOP.

We expressly reserve the right, subject to applicable law, to (1) delay acceptance for exchange of 2036 Notes tendered under the Exchange Offer or the delivery of 2041 Notes in exchange for the 2036 Notes accepted for purchase (subject to Rule 14e-1 under the Exchange Act, which requires that we pay the consideration offered or return the 2036 Notes deposited by or on behalf of the

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holders promptly after the termination or withdrawal of any of the Exchange Offer), or (2) terminate the Exchange Offer at any time.

You will not be obliged to pay brokerage commissions or fees to the Dealer Managers, the Exchange Agent, the Information Agent or us with respect to the Exchange Offer. However, if a tendering holder handles the transactions through its broker, dealer, commercial bank, trust company or other institution (other than the Dealer Managers) such holder may be required to pay brokerage fees or commissions.

We will pay all transfer taxes applicable to the exchange and transfer of 2036 Notes pursuant to the Exchange Offer, except if the delivery of the 2041 Notes and payment of accrued and unpaid interest is being made to, or if 2036 Notes not tendered or not accepted for payment are registered in the name of, any person other than the holder of 2036 Notes tendered thereby or 2036 Notes are credited in the name of any person other than the person(s) signing the letter of transmittal or electronically transmitting acceptance through ATOP, as applicable; then, in such event, delivery and payment shall not be made unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted.

The Company will not be liable for any interest as a result of a delay by the Exchange Agent or DTC in distributing the consideration for the Exchange Offer.

Conditions to the Exchange Offer

Notwithstanding any other provision of the Exchange Offer to the contrary, the Exchange Offer is subject to the following conditions that we cannot waive: the registration statement of which this prospectus forms a part shall have become effective and no stop order suspending the effectiveness of the registration statement and no proceedings for that purpose shall have been instituted or be pending, or to our knowledge, be contemplated or threatened by the SEC.

In addition, we will not be required to accept for exchange, or to pay the offer consideration in exchange for, any 2036 Notes and may terminate or amend the Exchange Offer, by oral or written notice (with any oral notice to be promptly confirmed in writing) to the Exchange Agent, followed by a timely press release, at any time before accepting any of the 2036 Notes for exchange, if at least $100,000,000 aggregate principal amount of 2036 Notes shall not have been tendered and not withdrawn as of the Expiration Date or the last reported sale price of our common stock on The NASDAQ Global Select Market on the Expiration Date exceeds $17.64 per share, or in our reasonable judgment:

• there shall have been instituted, threatened in writing or be pending any action or proceeding before or by any court, governmental, regulatory or administrative agency or instrumentality, or by any other person, in connection with the Exchange Offer, that is, or is reasonably likely to be, in our reasonable judgment, materially adverse to our business, operations, properties, condition, assets, liabilities or prospects, or which would or might, in our reasonable judgment, prohibit, prevent, restrict or delay consummation of the Exchange Offer or materially impair the contemplated benefits to us (as set forth under “—Purpose of the Exchange Offer”) of the Exchange Offer;

• an order, statute, rule, regulation, executive order, stay, decree, judgment or injunction shall have been proposed, enacted, entered, issued, promulgated, enforced or deemed applicable by any court or governmental, regulatory or administrative agency or instrumentality, or there shall have occurred any development, that, in our reasonable judgment, would or would be

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reasonably likely to prohibit, prevent, restrict or delay consummation of the Exchange Offer or materially impair the contemplated benefits to us of the Exchange Offer, or that is, or is reasonably likely to be, materially adverse to our business, operations, properties, condition, assets, liabilities or prospects;

• there shall have occurred:

• any general suspension of, or limitation on prices for, trading in securities in U.S. securities or financial markets;

• a declaration of a banking moratorium or any suspension of payments in respect to banks in the United States;

• any limitation (whether or not mandatory) by any government or governmental, regulatory or administrative authority, agency or instrumentality, domestic or foreign, or other event that, in our reasonable judgment, would or would be reasonably likely to affect the extension of credit by banks or other lending institutions; or

• a commencement or significant worsening of a war or armed hostilities or other national or international calamity, including but not limited to, catastrophic terrorist attacks against the United States or its citizens.

We expressly reserve the right to amend or terminate the Exchange Offer and to reject for exchange any 2036 Notes not previously accepted for exchange, upon the occurrence of any of the conditions of the Exchange Offer specified above. In addition, we expressly reserve the right, at any time or at various times, to waive any of the conditions of the Exchange Offer, in whole or in part, except as to the requirements that the registration statement of which this prospectus forms a part shall have become effective and that the registration statement of which this prospectus forms a part not be subject to a stop order or any proceedings for that purpose, which conditions we cannot waive. We will give oral or written notice (with any oral notice to be promptly confirmed in writing) of any amendment, non-acceptance, termination or waiver to the Exchange Agent as promptly as practicable, followed by a timely press release.

These conditions are for our sole benefit, and we may assert them regardless of the circumstances that may give rise to them or waive them in whole or in part at any or at various times in our sole discretion. If we fail at any time to exercise any of the foregoing rights, this failure will not constitute a waiver of such right. Each such right will be deemed an ongoing right that we may assert at any time or at various times.

All conditions to the Exchange Offer must be satisfied or, to the extent permitted by the terms of the Exchange Offer, waived, prior to the Expiration Date.

Fees and expenses

We will bear the fees and expenses of soliciting tenders for the Exchange Offer and tendering holders of 2036 Notes will not be required to pay any expenses of soliciting tenders in the Exchange Offer, including any fee or commission payable to the Dealer Managers. However, if a tendering holder handles the transactions through its broker, dealer, commercial bank, trust company or other institution, such holder may be required to pay brokerage fees or commissions. The principal solicitation is being made by mail. However, additional solicitations may be made by facsimile transmission, telephone or in person by the Dealer Managers as well as by our officers and other employees.

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Transfer taxes

We will pay all transfer taxes, if any, applicable to the exchange of 2036 Notes pursuant to the Exchange Offer. The tendering holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if:

• tendered 2036 Notes are registered in the name of any person other than the person signing the letter of transmittal; or

• a transfer tax is imposed for any reason other than the exchange of 2036 Notes under the Exchange Offer.

If satisfactory evidence of payment of transfer taxes is not submitted with the letter of transmittal, the amount of any transfer taxes will be billed to the tendering holder.

Future purchases and exchanges

Following completion of the Exchange Offer, we may acquire additional 2036 Notes that remain outstanding in the open market, in privately negotiated transactions, in new exchange offers, by redemption or otherwise. Future purchases, exchanges or redemptions of 2036 Notes that remain outstanding after the Exchange Offer may be on terms that are more or less favorable than the Exchange Offer. However, Exchange Act Rules 14e-5 and 13e-4 generally prohibit us and our affiliates from purchasing any 2036 Notes other than pursuant to the Exchange Offer until 10 business days after the Expiration Date of the Exchange Offer. Future purchases, exchanges and redemptions, if any, will depend on many factors, which include market conditions and the condition of our business.

No appraisal rights

No appraisal or dissenters’ rights are available to holders of 2036 Notes under applicable law in connection with the Exchange Offer.

Compliance with “short tendering” rule

It is a violation of Rule 14e-4 under the Exchange Act for a person, directly or indirectly, to tender 2036 Notes for such person’s own account unless the person so tendering (a) has a net long position equal to or greater than the aggregate principal amount of the securities being tendered and (b) will cause such securities to be delivered in accordance with the terms of the Exchange Offer. Rule 14e-4 provides a similar restriction applicable to the tender or guarantee of a tender on behalf of another person.

A tender of 2036 Notes in response to the Exchange Offer under any of the procedures described above will constitute a binding agreement between the tendering holder and us with respect to the Exchange Offer upon the terms and subject to the conditions of the Exchange Offer, including the tendering holder’s acceptance of the terms and conditions of the Exchange Offer, as well as the tendering holder’s representation and warranty that (a) such holder has a net long position in the 2036 Notes being tendered pursuant to the Exchange Offer within the meaning of Rule 14e-4 under the Exchange Act and (b) the tender of such 2036 Notes complies with Rule 14e-4.

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Compliance with securities laws

We are making the Exchange Offer to all holders of outstanding 2036 Notes. Except for Italy, where the offer is not being made, we are not aware of any jurisdiction in which the making of the Exchange Offer is not in compliance with applicable law. If we become aware of any jurisdiction in which the making of the Exchange Offer would not be in compliance with applicable law, we will make a good faith effort to comply with any such law. If, after such good faith effort, we cannot comply with any such law, the Exchange Offer will not be made to, nor will tenders of 2036 Notes be accepted from or on behalf of, the holders of 2036 Notes residing in any such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the Exchange Offer to be made by a licensed broker or dealer, the Exchange Offer will be deemed to be made on our behalf by one of the Dealer Managers if licensed under the laws of that jurisdiction.

No action has been or will be taken in any jurisdiction other than in the United States that would permit a public offering of our 2041 Notes, or the possession, circulation or distribution of this prospectus or any other material relating to us or our 2041 Notes in any jurisdiction where action for that purpose is required. Accordingly, our 2041 Notes may not be offered or sold, directly or indirectly, and neither this prospectus nor any other offering material or advertisement in connection with our 2041 Notes may be distributed or published, in or from any country or jurisdiction except in compliance with any applicable rules and regulations of any such country or jurisdiction. This prospectus does not constitute an offer to sell or a solicitation of any offer to buy in any jurisdiction where such offer or solicitation would be unlawful. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to this Exchange Offer, the distribution of this prospectus, and the resale of the 2041 Notes.

European Economic Area

In relation to each Member State of the European Economic Area (the “EEA”) which has implemented the Prospectus Directive (each, a “Relevant Member State”), no offer to the public of any 2041 Notes as contemplated by this document may be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of any such 2041 Notes may be made at any time under the following exemptions under the Prospectus Directive, to the extent those exemptions have been implemented in that Relevant Member State; provided that no offer will be made in Italy:

(a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000; and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;

(c) by any managers to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the Dealer Managers for any such offer; or

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(d) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of such 2041 Notes shall result in a requirement for the publication by us or any manager of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer to the public” in relation to any 2041 Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any 2041 Notes to be offered so as to enable an investor to decide to exchange for any 2041 Notes, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State, and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

This prospectus has been prepared on the basis that all offers of such 2041 Notes will be made pursuant to an exemption under the Prospectus Directive, as implemented in member states of the EEA, from the requirement to produce a prospectus for offers of such 2041 Notes. Accordingly any person making or intending to make any offer within the EEA of 2041 Notes which are the subject of the placement contemplated in this document should only do so in circumstances in which no obligation arises for us or the Dealer Managers to produce a prospectus for such offer. Neither we nor any of the Dealer Managers have authorized, nor do we or any Dealer Manager authorize, the making of any offer of such 2041 Notes through any financial intermediary, other than offers made by the Dealer Managers which constitute the final placement of such 2041 Notes contemplated in this prospectus.

Each person in a Relevant Member State who receives any communication in respect of, or who acquires any 2041 Notes under, the offer contemplated in this document will be deemed to have represented, warranted and agreed to and with the Dealer Managers and us that in the case of any 2041 Notes acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the 2041 Notes acquired by it in the offer have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than qualified investors, as that term is defined in the Prospectus Directive, or in circumstances in which the prior consent of the Dealer Managers has been given to the offer or resale; or (ii) where 2041 Notes have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those 2041 Notes to it is not treated under the Prospectus Directive as having been made to such persons.

United Kingdom

This prospectus is only being distributed to and directed at (i) persons outside the United Kingdom, (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons, “relevant persons”). 2041 Notes are only available to, and any invitation, offer or agreement to subscribe or otherwise acquire such 2041 Notes will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

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Australia

This prospectus does not constitute a disclosure document under Part 6D.2 of the Corporations Act 2001 of the Commonwealth of Australia (the “Australian Corporations Act”) and has not been, and will not be, lodged with the Australian Securities and Investments Commission.

No offer of securities is being made in Australia, and the distribution or receipt of this document in Australia does not constitute an offer of securities capable of acceptance by any person in Australia, except in the limited circumstances described in this prospectus relying on certain exemptions in section 708 of the Australian Corporations Act.

Hong Kong

No offer or sale of securities has been or will be made in Hong Kong, by means of any document other than (a) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance or (b) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance. There has not been issued in Hong Kong or elsewhere any advertisement, invitation or document relating to the 2036 Notes which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to our securities which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made under that Ordinance. The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice.

Japan

The Exchange Offer is not being made directly or indirectly in, nor is the Exchange Offer capable of acceptance from, Japan. Copies of this prospectus and any related offering documents are being mailed to holders of 2036 Notes with registered addresses in Japan for information purposes only.

Singapore

This prospectus or any other offering material relating to 2036 Notes has not been and will not be registered as a prospectus with the Monetary Authority of Singapore, and the 2041 Notes will be offered in Singapore pursuant to exemptions under Section 274 and Section 275 of the Securities and Futures Act, Chapter 289 of Singapore (the “Securities and Futures Act”). Accordingly, this prospectus and any other document or material relating to the offer or sale, or invitation for subscription or purchase, of the 2036 Notes may not be circulated or distributed, nor may the 2041 Notes be offered or sold, or be the subject of an invitation for subscription or purchase, whether directly or indirectly, to the public or any member of the public in Singapore other than (a) to an institutional investor or other person specified in Section 274 of the Securities and Futures Act; (b) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the Securities and Futures Act; or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the Securities and Futures Act.

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Where the 2041 Notes are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, notes and units of shares and notes of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the shares under Section 275 except: (1) to an institutional investor under Section 274 of the Securities and Futures Act or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the Securities and Futures Act; (2) where no consideration is given for the transfer; or (3) by operation of law.

Schedule TO

Pursuant to Rule 13e-4 under the Exchange Act, we have filed with the SEC an Issuer Tender Offer Statement on Schedule TO which contains additional information with respect to the Exchange Offer. Such Schedule TO, including the exhibits and any amendment thereto, may be examined, and copies may be obtained, at the same places and in the same manner as is set forth under the caption “Where You Can Find More Information.”

Accounting treatment

We will consider the respective fair values of the debt components of the 2036 Notes tendered versus their respective book values and we expect to record a resulting book gain on the transaction subject to there being no material changes to the terms of the Exchange Offer and such gain would be recorded on our consolidated statement of operations in the period the Exchange Offer closes. Any excess between the face value of the 2041 Notes to be issued and the aggregate fair values of the debt components of the 2036 Notes will reduce stockholders’ equity. The deferred tax liability adjustment relating to the 2036 Notes will increase stockholders’ equity.

The 2036 Notes and the 2041 Notes are accounted for under guidance issued in May 2008 pursuant to FASB Staff Position (FSP) No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement), which the Company adopted in the first quarter 2009. This FSP changed the balance sheet classification of a component of the notes between equity and debt, and resulted in additional non-cash interest charges being reflected in the statement of operations. We estimate that the Exchange Offer will decrease the non-cash interest charges associated with the notes exchanged during the first three years following the effective date of the Exchange Offer. This is offset by an increase in cash interest charges of a relatively like amount resulting from the higher coupon rate on the 2041 Notes, such that the combined impact to net income for each of the first three years following the effective date of the Exchange Offer is minimal. In years four through seven following the Exchange Offer, book net income would be reduced, primarily as a result of the extended repurchase date of the 2041 Notes compared to the 2036 Notes. The Exchange Offer is expected to be cash flow accretive over time. These estimates of financial impact are based on the Company’s best current assumptions and those assumptions may change.

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Price range of common stock and dividend policy

Our common stock is listed on The NASDAQ Global Select Market under the symbol “AMMD.” The following table sets forth, for the periods indicated, the range of high and low closing sale prices per share of our common stock as reported on The NASDAQ Global Select Market for the periods indicated.

	High	Low
Year Ended December 29, 2007
First Quarter	$21.78	$18.65
Second Quarter	21.75	17.33
Third Quarter	21.50	16.95
Fourth Quarter	17.31	12.03
Year Ended January 3, 2009
First Quarter	$14.98	$13.20
Second Quarter	15.87	13.99
Third Quarter	18.20	13.95
Fourth Quarter	17.93	8.25
Year Ended January 2, 2010
First Quarter	$11.92	$8.90
Second Quarter	16.40	11.06
Third Quarter (through August 13, 2009)	17.10	14.46

On August 13, 2009, the closing price of our common stock on The NASDAQ Global Select Market was $14.98 per share.

We have not paid dividends on our common stock, and do not presently plan to pay dividends in the foreseeable future. We currently expect that earnings will be retained and reinvested to support business growth, share repurchases or debt reduction. In addition, our revolving credit facility, as amended, restricts our ability to pay dividends.

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Description of other indebtedness

Senior secured Credit Facility

On July 20, 2006, in conjunction with the Laserscope acquisition, our wholly-owned subsidiary, American Medical Systems, Inc., entered into a credit and guarantee agreement (the “Credit Facility”) with CIT Healthcare LLC, as agent, and certain lenders from time to time party thereto (the Lenders). American Medical Systems, Inc. and each majority-owned domestic subsidiary of American Medical Systems, Inc. are parties to the Credit Facility as guarantors of all of the obligations of American Medical Systems, Inc. arising under the Credit Facility. Each of the subsidiary guarantors is 100 percent owned by us and the guarantees are joint and several. The obligations of American Medical Systems, Inc. and each of the guarantors arising under the Credit Facility are secured by a first priority security interest granted to the agent on substantially all of their respective assets, including a mortgage on the American Medical Systems, Inc. facility in Minnetonka, Minnesota.

The six-year senior secured Credit Facility consists of (i) term loan debt and (ii) a revolving credit facility of up to $65.0 million which is available to fund ongoing working capital needs, including future capital expenditures and permitted acquisitions. During January 2008, we borrowed $12.0 million under the revolving credit facility to fund the payment of certain litigation settlements (refer to Note 4, Litigation Settlements in our Annual Report on Form 10-K for the year ended January 3, 2009). We repaid the outstanding balance with operating cash in February 2008. As of July 4, 2009 and January 3, 2009, there were $199.7 million and $228.8 million, respectively, of term loans outstanding under the Credit Facility.

At our option, term loans under the Credit Facility (other than swing line loans) bear interest at a variable rate based on LIBOR or an alternative variable rate based on the greater of the prime rate or the federal funds effective rate plus 0.5 of 1.0 percent (Federal Funds Rate) plus an applicable margin. The applicable margin for term loans based on LIBOR is 2.25 percent per annum, while the applicable margin for term loans based on the prime rate or the Federal Funds Rate is 1.25 percent per annum. As of January 3, 2009, all debt under the Credit Facility had a variable interest rate based on the LIBOR index. The applicable margin for loans under the revolving credit facility is determined by reference to our total leverage ratio, as defined in the Credit Facility. In addition to initial Credit Facility fees and reimbursement of agent expenses, we are obligated to pay commitment fees on the revolving credit facility.

The term loans amortize 1.0 percent of the current principal balance quarterly from December 2006 through September 2011 and the remaining 95 percent will amortize December 2011 through July 2012. In addition, mandatory prepayments are due under the Credit Facility equal to (i) 75 percent of Excess Cash Flow (defined generally as net income, plus depreciation and amortization and other non-cash charges including IPR&D, plus decreases or minus increases in working capital, minus capital expenditures (to the extent not financed) and amortization payments with respect to the term loan, and any other indebtedness permitted under the loan documents) with a step-down of 50 percent of Excess Cash Flow when the Total Leverage Ratio is less than 4.00 to 1.00, (ii) 100 percent of the net proceeds of any asset sale (subject to a limited reinvestment option and a $2.5 million exception), (iii) 100 percent of the net proceeds of any debt (including convertible securities) or preferred stock issuance, and (iv) 50 percent of the net proceeds of any other equity issuance. Amounts due under the Credit Facility may also be voluntarily prepaid without premium or penalty.

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Amortization and other prepayments of $85.2 million and $50.1 million were made during 2008 and 2007, respectively, including $17.6 million during 2007 for prepayments related to the disposal of the aesthetics business.

The Credit Facility contains affirmative and negative covenants and other limitations (subject to various carve-outs and baskets). The covenants limit: (a) the making of investments, the amount of capital expenditures, the payment of dividends and other payments with respect to capital, the redemption and conversion of the 2036 Notes and the 2041 Notes, the disposition of material assets other than in the ordinary course of business, and mergers and acquisitions under certain conditions, (b) transactions with affiliates unless such transactions are completed in the ordinary course of business and upon fair and reasonable terms, (c) the incurrence of liens and indebtedness, and (d) substantial changes in the nature of the companies’ business. The Credit Facility also contains financial covenants which require us to maintain predetermined ratio levels related to leverage, interest coverage, fixed charges, and a limit on capital expenditures. In addition, the Credit Facility contains customary events of default, including payment and covenant defaults and material inaccuracy of representations. The Credit Facility further permits the taking of customary remedial action upon the occurrence and continuation of an event of default, including the acceleration of obligations then outstanding under the Credit Facility.

Fees of $10.5 million are classified as debt discount and are being accreted to amortization of financing costs using the effective interest method over a six year period. Additional debt issuance costs of approximately $2.4 million are recorded as other long term assets and are being amortized over six years using the straight-line method. Upon payment of the prepayments described above, a pro rata portion of the related fees and debt issuance costs of $2.0 million and $1.4 million was immediately charged to amortization of financing costs in the years ending January 3, 2009 and December 29, 2007, respectively. Of these charges, $0.4 million related to the sale of the aesthetics business and were charged to discontinued operations during 2007.

The scheduled amortization payments under the Credit Facility are adjusted after each prepayment. As of January 3, 2009, the amortization payments for the next five years are as follows (in thousands):

Fiscal 2009	$	2,341
Fiscal 2010		2,341
Fiscal 2011		57,350
Fiscal 2012		166,785
Fiscal 2013		—

Amendments of Credit Facility

On October 29, 2007, we entered into a first amendment of our Credit Facility to modify certain financial covenant ratios as defined in the Credit Facility. Pursuant to the terms of the first amendment, certain of the financial tests and covenants provided in Section 6.8 of the Credit Facility were amended and restated, including the interest coverage ratio, the total leverage ratio, the fixed charge coverage ratio, and the prior year maximum consolidated capital expenditures. Separately, on August 12, 2009, we entered into a second amendment of our Credit Facility that enables us to make the Exchange Offer.

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Description of the 2041 Notes

We will issue the 2041 Notes under an indenture by and among us, the subsidiary guarantors named therein and U.S. Bank National Association, as trustee. In this section, we refer to such indenture as the “indenture.” The terms of the 2041 Notes include those expressly set forth in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).

You may request a copy of the indenture from us as described under “Where you can find more information.”

The following description is a summary of the material provisions of the 2041 Notes and the indenture and does not purport to be complete. This summary is subject to and is qualified by reference to all the provisions of the notes and the indenture, including the definitions of certain terms used in the indenture. We urge you to read these documents because they, and not this description, define your rights as a holder of the notes.

For purposes of this description, references to “we,” “our” and “us” refer only to American Medical Systems Holdings, Inc. and not to its subsidiaries.

General

The 2041 Notes:

• will be our general unsecured senior subordinated obligations;

• will be limited to a maximum aggregate principal amount of $250 million;

• will bear cash interest from the date of their initial issuance at an annual rate of 3.75% payable on March 15 and September 15 of each year, beginning on March 15, 2010;

• beginning with the semiannual interest period commencing on September 15, 2016, may bear contingent interest at the rates and under the circumstances described under “—Contingent interest”;

• will be subject to redemption at our option, in whole or in part, on or after September 15, 2016 at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest and contingent interest and additional interest, if any, to, but excluding, the redemption date if the last reported sale price of our common stock has been at least 130% of the applicable conversion price for at least 20 trading days during any 30 consecutive trading day period prior to the date on which we provide notice of redemption;

• will also be subject to redemption at our option, in whole or in part, on or prior to September 17, 2010 in connection with certain tax-related events as described under “—Optional redemption”;

• will be subject to repurchase by us at the option of the holders on September 15, 2016 and following a fundamental change (as defined below under “—Fundamental change permits holders to require us to repurchase 2041 Notes”), in each case at a price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date or the fundamental change repurchase date, as the case may be;

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• will mature on September 15, 2041 unless earlier converted, redeemed or repurchased;

• will be issued in denominations of $1,000 and multiples of $1,000;

• will be represented by one or more registered notes in global form, but in certain limited circumstances may be represented by notes in definitive form. See “Book-entry, settlement and clearance”;

• will be guaranteed on an unsecured senior subordinated basis by certain of our domestic subsidiaries and certain future domestic subsidiaries in the manner set forth under “—Subsidiary guarantees.” The 2041 Notes will be structurally subordinated to all indebtedness and other liabilities (including trade payables) of our subsidiaries that do not guarantee the notes, including all of our foreign subsidiaries.

Subject to satisfaction of certain conditions and during the periods described below, the notes may be converted at an initial conversion rate of 51.5318. The initial conversion price is equal to $19.4055. The conversion rate is subject to adjustment if certain events occur.

Upon conversion of a 2041 Note, we will pay cash and deliver shares of our common stock, if any, based upon a daily conversion value calculated on a proportionate basis for each trading day in the applicable 20 trading day observation period as described below under “—Conversion rights —Settlement upon conversion.” You will not receive any separate cash payment for interest, if any, accrued and unpaid to the conversion date except under the limited circumstances described below.

Except as described under “—Limitation on incurring senior subordinated indebtedness,” the indenture does not limit the amount of debt which may be issued by us or our subsidiaries under the indenture or otherwise. The indenture does not contain any financial covenants and does not restrict us from paying dividends or issuing or repurchasing our other securities. Other than restrictions described under “—Fundamental change permits holders to require us to repurchase notes” and “—Consolidation, merger and sale of assets” below and except for the provisions set forth under “—Conversion rights—Adjustment to shares delivered upon conversion upon a make-whole fundamental change,” the indenture does not contain any covenants or other provisions designed to afford holders of the 2041 Notes protection in the event of a highly leveraged transaction involving us or in the event of a decline in our credit rating as the result of a takeover, recapitalization, highly leveraged transaction or similar restructuring involving us that could adversely affect such holders.

We may from time to time repurchase the 2041 Notes in open market purchases or negotiated transactions without giving prior notice to holders. Any 2041 Notes repurchased by us will be retired and no longer outstanding under the indenture.

We use the term “2041 Note” in this prospectus to refer to each $1,000 principal amount of 2041 Notes. We use the term “common stock” in this prospectus to refer to the Company’s common stock, $0.01 par value. References in this prospectus to a “holder” or “holders” of 2041 Notes that are held through The Depository Trust Company (“DTC”) are references to owners of beneficial interests in such 2041 Notes, unless the context otherwise requires. However, we and the trustee will treat the person in whose name 2041 Notes are registered (Cede & Co., in the case of notes held through DTC) as the owner of such 2041 Notes for all purposes.

We do not intend to list the 2041 Notes on a national securities exchange or interdealer quotation system.

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Payments on the 2041 Notes; paying agent and registrar; transfer and exchange

We will pay the principal of and interest on 2041 Notes in global form registered in the name of or held by DTC or its nominee in immediately available funds to DTC or its nominee, as the case may be, as the registered holder of such global note.

We will pay the principal of any certificated 2041 Notes at the office or agency designated by us for that purpose. We have initially designated the trustee as our paying agent and registrar and its agency in New York, New York as a place where 2041 Notes may be presented for payment or for registration of transfer. We may, however, change the paying agent or registrar without prior notice to the holders of the 2041 Notes, and we may act as paying agent or registrar. Interest on certificated 2041 Notes will be payable (i) to holders having an aggregate principal amount of $2,000,000 or less, by check mailed to the holders of these 2041 Notes and (ii) to holders having an aggregate principal amount of more than $2,000,000, either by check mailed to each holder or, upon application by a holder to the registrar not later than the relevant record date, by wire transfer in immediately available funds to that holder’s account within the United States, which application shall remain in effect until the holder notifies, in writing, the registrar to the contrary.

A holder of 2041 Notes may transfer or exchange 2041 Notes at the office of the registrar in accordance with the indenture. The registrar and the trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents. No service charge will be imposed by us, the trustee or the registrar for any registration of transfer or exchange of notes, but we may require a holder to pay a sum sufficient to cover any transfer tax or other similar governmental charge required by law or permitted by the indenture. We are not required to transfer or exchange any note selected for redemption or surrendered for conversion or required repurchase.

The registered holder of a 2041 Note will be treated as the owner of it for all purposes.

Interest

The 2041 Notes will bear cash interest at a rate of 3.75% per year until maturity. Interest on the 2041 Notes will accrue from the date of their initial issuance or from the most recent date on which interest has been paid or duly provided for. We will also pay contingent interest (as defined below) on the 2041 Notes at the rates and under the circumstances described under “— Contingent interest.” Interest will be payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2010.

Interest will be paid to the person in whose name a 2041 Note is registered at the close of business on March 1 or September 1, as the case may be, immediately preceding the relevant interest payment date. Interest on the 2041 Notes will be computed on the basis of a 360-day year composed of twelve 30-day months.

If any interest payment date, the maturity date or any earlier required repurchase date upon a fundamental change of a 2041 Note falls on a day that is not a business day, the required payment will be made on the next succeeding business day and no interest on such payment will accrue in respect of the delay. The term “business day” means, with respect to any 2041 Note, any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.

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All references to interest in this “Description of the 2041 Notes” include (i) contingent interest, if any, payable as described under “—Contingent interest” and (ii) additional interest, if any, payable at our election as the sole remedy relating to the failure to comply with our reporting obligations as described under “—Events of default and remedies.”

Contingent interest

Subject to the accrual, record date and payment provisions described above, beginning with the semiannual interest period commencing on September 15, 2016, contingent interest (“contingent interest”) will accrue during any semiannual interest period where the average trading price of the 2041 Notes (as determined below) for the five trading days immediately preceding the first day of such semiannual period is greater than or equal to the upside trigger (as defined below), in which case such contingent interest will be payable at a rate per annum equal to 0.75% of such average trading price.

“Upside trigger” means $1,300 per $1,000 principal amount of 2041 Notes.

We will notify the trustee upon a determination that contingent interest on the notes will accrue during a relevant semiannual period.

For purposes of determining whether contingent interest is payable in respect of the 2041 Notes, the “trading price” of the 2041 Notes on any date of determination means the average of the secondary market bid quotations per $1,000 principal amount of 2041 Notes obtained by the trustee for $5,000,000 principal amount of notes at approximately 3:30 p.m., New York City time, on such determination date from three independent nationally recognized securities dealers we select; provided that if at least three such bids cannot reasonably be obtained by the trustee, but two such bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the trustee, that one bid shall be used. We will provide prompt written notice to the trustee identifying the three independent nationally recognized securities dealers selected by us. If the trustee cannot reasonably obtain at least one bid for $5,000,000 principal amount of 2041 Notes from an independent nationally recognized securities dealer selected by us and identified in writing to the trustee or, in the reasonable judgment of our board of directors (acting through the board or a committee thereof), the bid quotations are not indicative of the secondary market value of the 2041 Notes, then the trading price per $1,000 principal amount of 2041 Notes will be determined by our board of directors (acting through the board or a committee thereof) based on a good faith estimate of the fair value of the 2041 Notes; provided that the trustee shall not determine the trading price of the 2041 Notes unless requested by us to do so; and provided, further, that we shall have no obligation to make such request unless a holder of 2041 Notes provides us with reasonable evidence that the trading price of the 2041 Notes is greater than or equal to the upside trigger, at which time we will instruct the trustee to determine the trading price of the 2041 Notes in the manner described herein beginning on the next trading day and on each successive trading day until the trading price of the 2041 Notes is less than the upside trigger. The trustee shall be entitled to all of the rights of the trustee set forth in the indenture in connection with any such determination, and any such determination shall be conclusive absent manifest error.

Subordination

The payment of the principal of, and interest on, the 2041 Notes, including amounts payable on any redemption or required repurchase, will be subordinated to the prior payment in full of all

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of the senior debt incurred under the credit agreement (as defined under “— Restrictions on conversion imposed by the Credit Facility”) and will be effectively subordinated to any other existing or future secured indebtedness of us or any of our subsidiaries. The 2041 Notes are also structurally subordinated to any debt or other liabilities, including trade payables, of our subsidiaries that do not guarantee the 2041 Notes, including all of our foreign subsidiaries and certain of our non-significant domestic subsidiaries. The 2041 Notes are equal or senior in right of payment with all of our debt other than the senior debt.

As of July 4, 2009, our total consolidated indebtedness was $442.1 million, net of debt discounts of $64.5 million, of which an aggregate of $194.6 million was our senior debt (as defined below), an aggregate of $247.5 million was our senior subordinated indebtedness, net of debt discounts of $64.5 million. After giving effect to the Exchange Offer and assuming the exchange of $250.0 million of the 2036 Notes pursuant to the exchange offer, our total consolidated indebtedness would have been $397.7 million, net of debt discounts of $108.8 million.

“Senior debt” means the principal of, premium, if any, interest on, including any interest accruing after the commencement of any bankruptcy or similar proceeding, whether or not a claim for post-petition interest is allowed as a claim in the proceeding, or termination payment with respect to or in connection with, and all fees, costs, expenses and other amounts accrued or due on or under, the credit agreement and any guarantees thereof (including by any pledge, lien or security interest of collateral with respect thereto), as such facility may be amended, modified or supplemented from time to time, including any deferrals, renewals, extensions, refinancings or refundings thereof.

We may not make any payment in respect of the principal of or interest on the 2041 Notes, or redeem or repurchase the 2041 Notes, if either of the following occurs:

• we default in our payment obligations on any senior debt, and the default continues beyond any grace period that we may have to make those payments (a “payment default”); or

• any other default occurs and is continuing on any senior debt (a “nonpayment default”) and (i) the default permits the holders of the designated senior debt to accelerate its maturity and (ii) the trustee has received a notice (a “payment blockage notice”) of the default from us, the holder of such debt or such other person permitted to give such notice under the indenture; provided, however, that if the maturity of such senior debt has been accelerated, no payment may be made on the 2041 Notes until such default is cured or waived or such senior debt is discharged or paid in full.

If payments on the 2041 Notes have been blocked by a payment default on senior debt, payments on the notes may resume when the payment default has been cured or waived or ceases to exist. If payments on the 2041 Notes have been blocked by a nonpayment default, payments on the 2041 Notes may resume on the earlier of (i) the date the nonpayment default is cured or waived or ceases to exist and (ii) 179 days after the payment blockage notice is received.

No nonpayment default that existed on the day a payment blockage notice was delivered to the trustee can be used as the basis for any subsequent payment blockage notice. In addition, once a holder of designated senior debt has blocked payment on the notes by giving a payment blockage notice, no new period of payment blockage can be commenced pursuant to a subsequent payment blockage notice until both of the following are satisfied:

• 365 days have elapsed since our receipt of the immediately prior payment blockage notice; and

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• all scheduled payments of principal of and interest on the 2041 Notes that have come due have been paid in full in cash.

Upon any acceleration of the principal due on the 2041 Notes as a result of an event of default or payment or distribution of our assets to creditors upon any dissolution, winding up, liquidation or reorganization, whether voluntary or involuntary, marshaling of assets, assignment for the benefit of creditors, or in bankruptcy, insolvency, receivership or other similar proceedings, all principal, premium, if any, interest and other amounts due on all senior debt must be paid in full before you are entitled to receive any payment. See “— Events of default and remedies.” By reason of such subordination, in the event of insolvency, our creditors who are holders of senior debt are likely to recover more, ratably, than you are, and you will likely experience a reduction or elimination of payments on the 2041 Notes.

If either the trustee or any holder of 2041 Notes receives any payment or distribution of our assets in contravention of these subordination provisions before all senior debt is paid in full, then such payment or distribution will be held by the recipient in trust for the benefit of holders of senior debt to the extent necessary to make payment in full of all senior debt remaining unpaid.

We are obligated to pay reasonable compensation to the trustee. We will indemnify the trustee against any losses, liabilities or expenses incurred by it in connection with its duties. The trustee’s claims for such payments will be senior to the claims of the 2041 Note holders.

Each subsidiary guarantee of the 2041 Notes will be subordinated to the senior debt of the subsidiary guarantors and the guarantees of the subsidiary guarantors of senior debt, to the same extent and in the same manner as the 2041 Notes are subordinated to the senior debt.

We have a stockholder’s claim on the assets of our subsidiaries. This stockholder’s claim is junior to the claims that creditors (including trade creditors) of our subsidiaries have against those subsidiaries. Holders of the 2041 Notes will only be creditors of ours and our subsidiaries that are subsidiary guarantors. In the case of our subsidiaries that are not subsidiary guarantors, all the existing and future liabilities of such subsidiaries, including any claims of trade creditors and preferred stockholders, will be structurally senior to the 2041 Notes. The liabilities, including contingent liabilities, of our subsidiaries that are not subsidiary guarantors may be significant in future periods. As of July 4, 2009, our non-guarantor subsidiaries had total indebtedness and other liabilities, including trade payables but excluding inter-company liabilities and liabilities not required to be reflected as a liability on a balance sheet in accordance with GAAP, of approximately $84.0 million. These subsidiaries had net sales of $113.1 million, representing approximately 22.5% of our consolidated net sales of $501.6 million for fiscal 2008.

A portion of our operations is conducted through our non-guarantor subsidiaries. Therefore, our ability to service our debt, including the 2041 Notes, is dependent in part upon the earnings of these non-guarantor subsidiaries and their ability to distribute those earnings as dividends, loans or other payments to us. The ability of these subsidiaries to pay dividends and make other payments to us is also restricted by, among other things, applicable corporate and other laws and regulations as well as agreements to which such subsidiaries may become a party. If the ability of our non-guarantor subsidiaries to make these distributions were restricted, by law or otherwise, then we would not be able to use the cash flow of our non-guarantor subsidiaries to make payments on the 2041 Notes.

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We may not be able to pay the cash portions of any settlement amount upon conversion of the 2041 Notes, or to pay cash for the repurchase price or the fundamental change repurchase price if a holder requires us to repurchase 2041 Notes as described below. See “Risk factors—Risks related to the 2041 Notes—We may not have the ability to raise the funds necessary to settle conversions of the 2041 Notes or to repurchase the 2041 Notes when required, and our current debt contains, and our future debt may contain, limitations on our ability to pay cash due upon conversion or repurchase of the 2041 Notes.”

Limitation on incurring senior subordinated indebtedness

The indenture will provide that we shall not, directly or indirectly, incur, or suffer to exist, any indebtedness that by its terms expressly ranks senior in right of payment to the 2041 Notes and subordinate in right of payment to any senior debt.

For purposes of the indenture for the 2041 Notes, “incur” means, with respect to any indebtedness or other obligations to any person, to create, issue, incur (including by conversion, exchange or otherwise), assume, guarantee or otherwise become liable in respect of such indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such indebtedness or other obligation on the balance sheet of such person (and “incurrence,” “incurred” and “incurring” shall have the meanings correlative to the foregoing). Indebtedness of any person or company that we acquire or any of such person or company’s subsidiaries existing at the time such person or company becomes our subsidiary (or is merged into or consolidated with any subsidiary of ours), whether or not such indebtedness was incurred in connection with, as a result of, or in contemplation of, such person or company becoming a subsidiary of ours (or being merged into or consolidated with us or any subsidiary of ours), shall be deemed incurred at the time any such person or company becomes a subsidiary or merges into or consolidates with us or any of our subsidiaries.

Subsidiary guarantees

Our subsidiary guarantors (as defined below) will, jointly and severally, unconditionally guarantee our payment obligations under the 2041 Notes. Each subsidiary guarantee will be subordinated in right of payment to the guarantees of the subsidiary guarantors under the credit agreement. Each subsidiary guarantee will effectively rank junior to any secured indebtedness of its respective subsidiary guarantor to the extent of the value of the assets securing such indebtedness. Each subsidiary guarantee will rank equally in right of payment with all senior subordinated debt of each subsidiary guarantor. The subsidiary guarantees with respect to a 2041 Note will automatically terminate immediately prior to such note’s conversion. Under the terms of the full and unconditional guarantees, holders of the 2041 Notes will not be required to exercise their remedies against us before they proceed directly against the subsidiary guarantors.

“Subsidiary guarantors” means American Medical Systems, Inc., AMS Sales Corporation, AMS Research Corporation and Laserscope and such of our other domestic subsidiaries whether now existing or that become domestic subsidiaries of ours following the initial issue date of the notes that are required to become subsidiary guarantors pursuant to the immediately following paragraph.

At no time shall all of our domestic subsidiaries that are not subsidiary guarantors have an aggregate book value of total assets that exceeds 10% of the net tangible assets of ours

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(exclusive of our foreign subsidiaries) and of all of our domestic subsidiaries (exclusive of their respective foreign subsidiaries). For purposes of the above calculation, aggregate book value of the assets of a non-guarantor subsidiary shall be based on the balance sheet of such non-guarantor subsidiary used in the preparation of our most recent consolidated financial statement required to be delivered to the trustee or, if sooner, filed with the SEC.

“Net tangible assets” means, as of any date of determination, the sum of the amounts that would appear on a consolidated balance sheet of ours and our domestic subsidiaries as the total assets (less accumulated depreciation and amortization, allowances for doubtful receivables, other applicable reserves and other properly deductible items) after giving effect to purchase accounting and after deducting therefrom, current liabilities and, to the extent otherwise included in the determination of net tangible assets, the amounts of (without duplication): (a) the excess of cost over fair market value of assets or businesses acquired; (b) unamortized debt discount and expenses and other unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, licenses, organization, research and developmental expenses and other intangible items; (c) minority interests in domestic subsidiaries held, directly or indirectly, by persons other than us; (d) treasury stock; (e) cash or securities set aside and held in a sinking or other analogous fund established for the purpose of redemption or other retirement of capital stock to the extent such obligation is not reflected in current liabilities; and (f) the value of any capital stock of any of our foreign subsidiaries.

A subsidiary guarantor will be released and relieved from all its obligations under its subsidiary guarantee in the following circumstances, each of which is permitted by the indenture:

• upon the sale or other disposition (including by way of merger or consolidation) of all or substantially all the assets or all of the capital stock of such subsidiary guarantor (other than to us or any of our domestic subsidiaries); or

• upon the delivery by us to the trustee of an officers’ certificate certifying compliance with certain requirements of the indenture after giving effect to such release.

The obligations of each subsidiary guarantor under its subsidiary guarantee will be limited as necessary to prevent that subsidiary guarantee from constituting a fraudulent conveyance or fraudulent transfer under applicable law.

Optional redemption

No sinking fund is provided for the 2041 Notes. Except as described below in connection with a tax triggering event, prior to September 15, 2016 the 2041 Notes will not be redeemable at our option. On or after September 15, 2016, we may redeem for cash all or a portion of the 2041 Notes if the last reported sale price of our common stock has been at least 130% of the applicable conversion price for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period prior to the date on which we provide notice of redemption. The redemption price will equal 100% of the principal amount of the 2041 Notes being redeemed, plus accrued and unpaid interest to, but excluding, the redemption date (unless the redemption date falls after a record date but on or prior to the immediately succeeding interest payment date, in which case we will instead pay the full amount of accrued and unpaid interest to the holder of record as of the close of business on such record date and the redemption price will be equal to 100% of the principal amount of the 2041 Notes being redeemed). The redemption date must be a business day.

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On or prior to September 17, 2010, we may redeem the 2041 Notes in whole or in part for cash if a tax triggering event (as defined below) has occurred. The redemption price for any such redemption will be equal to 101.5% of the principal amount of the 2041 Notes being redeemed plus (i) accrued and unpaid interest to, but excluding, the redemption date (unless the redemption date falls after a record date but on or prior to the immediately succeeding interest payment date, in which case we will instead pay the full amount of accrued and unpaid interest to the holder of record as of the close of business on such record date and the redemption price will not include any accrued and unpaid interest) and (ii) if the current conversion value of the 2041 Notes being redeemed exceeds their initial conversion value, 85% of the amount determined by subtracting the initial conversion value (as defined below) of such 2041 Notes from their current conversion value (as defined below).

We will give notice of any redemption not less than 20 nor more than 60 days before the redemption date by mail to the trustee, the paying agent and each holder of the 2041 Notes.

We may not redeem any 2041 Notes unless all accrued and unpaid interest thereon, if any, has been or is simultaneously paid for all semiannual periods or portions thereof terminating prior to the redemption date.

If we decide to redeem fewer than all of the outstanding 2041 Notes, the trustee will select the 2041 Notes to be redeemed (in principal amounts of $1,000 or any multiple thereof) by lot, on a pro rata basis or by another method the trustee considers fair and appropriate.

If the trustee selects a portion of your 2041 Notes for partial redemption and you convert a portion of your notes, the converted portion will be deemed to be from the portion selected for redemption.

In the event of any redemption in part, we will not be required to (i) issue, register the transfer of or exchange any 2041 Notes during a period beginning at the open of business 15 days before the mailing of a notice of redemption of 2041 Notes and ending at the close of business on the date on which the relevant notice of redemption is mailed or (ii) register the transfer of or exchange any 2041 Note so selected for redemption, in whole or in part, except the unredeemed portion of any note being redeemed in part.

No 2041 Notes may be redeemed if the principal amount of the notes has been accelerated, and such acceleration has not been rescinded, on or prior to the redemption date (except in the case of an acceleration resulting from a default by us in the payment of the redemption price with respect to such notes).

“Tax triggering event” means the enactment of U.S. federal legislation, promulgation of Treasury regulations, issuance of a published ruling, notice, announcement or equivalent form of guidance by the Treasury or the Internal Revenue Service, or the issuance of a judicial decision if we determine that, or receive an opinion of our outside counsel to the effect that, any such authority will have the effect of lowering the comparable yield or delaying or otherwise limiting the current deductibility of interest or original issue discount with respect to the notes, provided that we determine that such reduction, delay, or limitation is material.

“Current conversion value” means the product of (i) the conversion rate in effect on the redemption date and (ii) the average of the daily VWAP (as defined below under “—Conversion rights—Conversion procedures) of our common stock for the five consecutive trading days ending on the trading day immediately preceding the redemption date.

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“Initial conversion value” means the product of (i) the initial conversion rate, prior to any adjustment as described under “—Conversion rights—Conversion rate adjustments” and (ii) 100% of the last reported sale price of our common stock on The NASDAQ Global Select Market on the Expiration Date of the Exchange Offer.

Conversion rights

General

Except during the 60 calendar days prior to the close of business on the business day immediately preceding September 15, 2016 and September 15, 2041 and, in certain cases, except as described below under “—Restrictions on conversion imposed by the Credit Agreement,” the 2041 Notes will be convertible only upon satisfaction of one or more of the conditions described under the headings “—Conversion upon satisfaction of sale price condition,” “—Conversion upon satisfaction of trading price condition,” “—Conversion upon redemption,” “—Conversions prior to September 15, 2016,” and “—Conversion upon specified corporate transactions.” For the 60 calendar days prior to the business day immediately preceding September 15, 2041 holders may convert each of their 2041 Notes at the applicable conversion rate at any time prior to the close of business on the business day immediately preceding the maturity date irrespective of the foregoing conditions.

The initial conversion rate of the notes will be 51.5318. The initial conversion price will be $19.4055.

Upon conversion of a 2041 Note, we will pay cash and deliver shares of our common stock, if any, based on a daily conversion value (as defined below) calculated on a proportionate basis for each trading day in a 20 trading day observation period (as defined below under “—Settlement upon conversion”). The trustee will initially act as the conversion agent.

The conversion rate and the equivalent conversion price in effect at any given time are referred to as the “applicable conversion rate” and the “applicable conversion price,” respectively, and will be subject to adjustment as described below. A holder may convert fewer than all of such holder’s 2041 Notes so long as the notes converted are a multiple of $1,000 principal amount.

If we call 2041 Notes for redemption, a holder of 2041 Notes may convert its notes only until the close of business on the third scheduled trading day prior to the redemption date unless we fail to pay the redemption price. If a holder of 2041 Notes has submitted notes for repurchase upon a fundamental change or for repurchase on the date specified below, the holder may convert those 2041 Notes only if that holder first withdraws its repurchase election.

Upon conversion, you will not receive any separate cash payment for accrued and unpaid interest, if any, except as described below. We will not issue fractional shares of our common stock upon conversion of 2041 Notes. Instead, we will pay cash in lieu of any fractional share as described under “—Settlement upon conversion.” Our delivery to you of cash or a combination of cash and the full number of shares of our common stock, if applicable, together with any cash payment for any fractional share, into which a note is convertible, will be deemed to satisfy in full our obligation to pay:

• the principal amount of the 2041 Note; and

• accrued and unpaid interest, if any, to, but not including, the conversion date.

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As a result, accrued and unpaid interest, if any, to, but not including, the conversion date will be deemed to be paid in full rather than cancelled, extinguished or forfeited. Upon a conversion of 2041 Notes, accrued and unpaid interest will be deemed to be paid first out of the cash paid upon such conversion.

Notwithstanding the preceding paragraph, if notes are converted after 5:00 p.m., New York City time, on a regular record date for the payment of interest, holders of such 2041 Notes at 5:00 p.m., New York City time, on such record date will receive the interest payable on such 2041 Notes on the corresponding interest payment date notwithstanding the conversion. 2041 Notes surrendered for conversion during the period from 5:00 p.m., New York City time, on any record date to 9:00 a.m., New York City time, on the immediately following interest payment date must be accompanied by funds equal to the amount of interest payable on the notes so converted; provided that no such payment need be made:

• for conversions following the record date immediately preceding the maturity date;

• for conversions following the record date for the interest payment due September 15, 2016 and on or prior to such interest payment date;

• if we have specified a redemption date that is after a record date and on or prior to the business day immediately following the corresponding interest payment date;

• if we have specified a fundamental change repurchase date that is after a record date and on or prior to the business day immediately following the corresponding interest payment date; or

• to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to such note.

If a holder converts 2041 Notes, we will pay any documentary, stamp or similar issue or transfer tax due on the issue of any shares of common stock upon the conversion, unless the tax is due because the holder requests any shares to be issued in a name other than the holder’s name, in which case the holder will pay that tax.

Holders may surrender their 2041 Notes for conversion under the following circumstances:

Conversion upon satisfaction of sale price condition

Except as described below under “—Restrictions on conversion imposed by the Credit Facility,” during the 60 calendar days prior to the close of business on the business day immediately preceding September 15, 2041, a holder may surrender all or a portion of its 2041 Notes for conversion during any fiscal quarter commencing after January 2, 2010 (and only during such fiscal quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the preceding calendar quarter is greater than or equal to 130% of the applicable conversion price on each applicable trading day.

The “last reported sale price” of our common stock on any date means the closing sale price per share (or if no closing sale price is reported, the average of the last bid and last ask prices or, if more than one in either case, the average of the average last bid and the last average ask prices) on that date as reported in composite transactions for the principal United States securities exchange on which our common stock is traded. If our common stock is not listed for trading on

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a United States national or regional securities exchange on the relevant date, the “last reported sale price” will be the last quoted bid price for our common stock in the over-the-counter market on the relevant date as reported by Pink OTC Markets Inc. or a similar organization. If our common stock is not so quoted, the “last reported sale price” will be the average of the mid-point of the last bid and last ask prices for our common stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by us for this purpose. Any such determination will be conclusive absent manifest error.

“Trading day” means a day on which (i) trading in our common stock generally occurs on The NASDAQ Global Select Market or, if our common stock is not then listed on The NASDAQ Global Select Market, on the principal other United States national or regional securities exchange on which our common stock is then listed or, if our common stock is not then listed on a United States national or regional securities exchange, on the principal other market on which our common stock is then traded, and (ii) a last reported sale price for our common stock is available on such securities exchange or market. If our common stock (or other security for which a closing sale price must be determined) is not so listed or traded, “trading day” means a “business day.”

Conversion upon satisfaction of trading price condition

Except as described below under “—Restrictions on conversion imposed by the Credit Facility,” prior to the close of business on the business day immediately preceding July 17, 2041, a holder of 2041 Notes may surrender its 2041 Notes for conversion during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” per $1,000 principal amount of 2041 Notes, as determined following a request by a holder of 2041 Notes in accordance with the procedures described below, for each day of that period was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate.

The “trading price” of the notes on any date of determination means the average of the secondary market bid quotations per $1,000 principal amount of notes obtained by the bid solicitation agent for $5,000,000 principal amount of 2041 Notes at approximately 3:30 p.m., New York City time, on such determination date from three independent nationally recognized securities dealers we select; provided that if three such bids cannot reasonably be obtained by the bid solicitation agent but two such bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the bid solicitation agent, that one bid shall be used. If the bid solicitation agent cannot reasonably obtain at least one bid for $5,000,000 principal amount of 2041 Notes from an independent nationally recognized securities dealer, then the trading price per $1,000 principal amount of notes will be deemed to be less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate. If we do not so instruct the bid solicitation agent to obtain bids when required, the trading price per $1,000 principal amount of the 2041 Notes will be deemed to be less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate on each day we fail to do so.

The bid solicitation agent shall have no obligation to determine the trading price of the 2041 Notes unless we have requested such determination; and we shall have no obligation to make such request unless a holder of a note provides us with reasonable evidence that the trading price per $1,000 principal amount of 2041 Notes would be less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate. At such time, we

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shall instruct the bid solicitation agent to determine the trading price of the 2041 Notes beginning on the next trading day and on each successive trading day until the trading price per $1,000 principal amount of 2041 Notes is greater than or equal to 98% of the product of the last reported sale price of our common stock and applicable conversion rate. If the trading price condition has been met, we will so notify the holders and the trustee. If, at any time after the trading price condition has been met, the trading price per $1,000 principal amount of 2041 Notes is greater than 98% of the product of the last reported sale price of our common stock and the conversion rate for such date, we will so notify the holders and the trustee.

The trustee will initially act as the bid solicitation agent.

Conversion upon notice of redemption

If we call any or all of the 2041 Notes for redemption, holders may convert 2041 Notes that have been so called for redemption at any time prior to the close of business on the business day immediately preceding the redemption date, even if the 2041 Notes are not otherwise convertible at such time, after which time the holder’s right to convert will expire (unless we default in the payment of the redemption price, in which case a holder of 2041 Notes may convert such notes until the redemption price has been paid or duly provided for).

Conversion upon specified corporate events

Certain distributions

If we elect to:

• issue to all or substantially all holders of our common stock rights, options or warrants entitling them for a period of not more than 45 calendar days after the announcement date of such issuance to subscribe for or purchase our common stock, at a price per share less than the average of the last reported sale prices of our common stock for the 10 consecutive trading day period ending on the trading day immediately preceding the date of announcement of such issuance; or

• distribute to all or substantially all holders of our common stock our assets, debt securities or rights to purchase our securities, which distribution has a per share value, as reasonably determined by our board of directors, exceeding 10% of the last reported sale price of our common stock on the trading day preceding the date of announcement for such distribution,

then, in either case, we must notify the holders of the 2041 Notes at least 25 scheduled trading days prior to the ex-dividend date for such issuance or distribution. Once we have given such notice, except as described below under “—Restrictions on conversion imposed by the Credit Facility,” holders may surrender their notes for conversion at any time until the earlier of 5:00 p.m., New York City time, on the business day immediately preceding the ex-dividend date and our announcement that such issuance or distribution will not take place, even if the 2041 Notes are not otherwise convertible at such time. Holders of the 2041 Notes may not exercise their right to surrender their notes for conversion if they may participate (as a result of holding their notes) in any of the transactions described above as if such holders of the 2041 Notes held a number of shares of our common stock equal to the applicable conversion rate, multiplied by the principal amount (expressed in thousands) of 2041 Notes held by such holders, without having to convert their 2041 Notes.

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Certain corporate events

If a transaction or event that constitutes a “Fundamental Change” (as defined under “—Fundamental change permits holders to require us to repurchase the 2041 Notes”) or a “make-whole fundamental change” (as defined under “—Adjustment to shares delivered upon conversion upon a make-whole fundamental change”) occurs, regardless of whether a holder has the right to require us to repurchase the notes as described under “—Fundamental change permits holders to require us to repurchase the 2041 notes,” or if we are a party to a consolidation, merger, binding share exchange, or transfer or lease of all or substantially all of our assets, pursuant to which our common stock would be converted into cash, securities or other assets, the notes may be surrendered for conversion at any time from or after the effective date of the transaction (or, if later, the business day after we give notice of such transaction) until 30 days after the effective date of such transaction or, if such transaction also constitutes a fundamental change, until the related fundamental change repurchase date. We will notify holders and the trustee about such transaction on the effective date of such transaction.

Conversions prior to September 15, 2016

For 60 calendar days prior to the business day immediately preceding September 15, 2016, holders may convert notes even if the notes are not otherwise convertible at such time.

Conversions prior to maturity

For 60 calendar days prior to the business day immediately preceding September 15, 2041, a holder may convert any of its notes at any time prior to the close of business on the business day immediately preceding the maturity date regardless of the foregoing conditions.

Restrictions on conversion imposed by the Credit Facility

Even if the notes are otherwise convertible as described above under “—Conversion upon satisfaction of sale price condition,” “—Conversion upon satisfaction of trading price condition” or “—Conversion upon specified corporate events—Certain distributions,” unless convertible pursuant to one of the other circumstances described above, the 2041 Notes will not be convertible if, at the time you tender your 2041 Notes for conversion, there exists a default or event of default under the credit agreement, or a default or event of default thereunder would result from such conversion. Your inability to convert your 2041 Notes because of this circumstance will not constitute a default or event of default under the indenture governing the notes. See “Description of Other Indebtedness—Senior secured Credit Facility.”

The term “Credit Facility” means the credit and guarantee agreement entered into on July 20, 2006 by and among AMS, as borrower, us and each of our majority-owned direct domestic subsidiaries, as guarantors, CIT Healthcare LLC as agent and certain lenders from time to time party thereto, as amended on October 29, 2007 and August 12, 2009, and any amendment, modification, renewal, extension, or refinancing of such credit and guaranty agreement; provided that such amended, modified, renewed, extended, or refinanced credit and guaranty agreement is (i) an unsubordinated credit facility with a group of institutional lenders and (ii) contains restrictions on conversion of the 2041 Notes (including, without limitation, the provision by us for the cash payment upon conversion of the 2041 Notes), which restrictions shall not be materially less favorable to the holders of the 2041 Notes than the terms of the credit and guaranty agreement as initially entered into.

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If the 2041 Notes would be convertible but are not convertible because of the restrictions described in this section and you tender your 2041 Notes for conversion, the conversion date with respect to conversion of such 2041 Notes will not occur, and we will use reasonable efforts to permit such conversion, which may include, without limitation, seeking to obtain the consent from our lenders under the Credit Facility, attempting to refinance the debt under the Credit Facility and the issuance and sale of additional equity securities. If our reasonable efforts are successful and the conversion of such 2041 Notes is permitted to occur, we will provide notice to the relevant holder or holders of the conversion date for any such conversion. If despite our reasonable efforts conversions continue to be prohibited, we will promptly inform such converting holder and return such holders’ 2041 Notes and the related notice of conversion will be deemed to be revoked to the extent of such returned 2041 Notes.

We cannot assure you that the lenders under the Credit Facility will consent to the conversion of the 2041 Notes after we seek their consent. In addition, there can be no assurance that our efforts to refinance the Credit Facility and take such other actions as may be required to permit conversions will be sufficient. See “Risk factors—Risks related to the 2041 Notes—We may not have the ability to raise the funds necessary to settle conversions of the notes or to repurchase the 2041 Notes when required, and our current debt contains, and our future debt may contain, limitations on our ability to pay cash due upon conversion or repurchase of the 2041 Notes.”

Conversion procedures

If you hold a beneficial interest in a global note, to convert you must comply with DTC’s procedures for converting a beneficial interest in a global note and, if required, pay funds equal to interest payable on the next interest payment date to which you are not entitled and, if required, pay all taxes or duties, if any.

If you hold a certificated 2041 Note, to convert you must:

• complete and manually sign the conversion notice on the back of the 2041 Note, or a facsimile of the conversion notice;

• deliver the conversion notice, which is irrevocable, and the 2041 Note to the conversion agent;

• if required, furnish appropriate endorsements and transfer documents;

• if required, pay all transfer or similar taxes; and

• if required, pay funds equal to interest payable on the next interest payment date to which you are not entitled.

We refer to the date you comply with the relevant procedures for conversion described above as the “conversion date.”

If a holder has already delivered a repurchase notice as described under either “—Repurchase of 2041 Notes by us at the option of the holder” or “—Fundamental change permits holders to require us to repurchase the 2041 Notes” with respect to a 2041 Note, the holder may not surrender that 2041 Note for conversion until the holder has withdrawn the notice in accordance with the indenture.

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Settlement upon conversion

Upon conversion, we will deliver to holders in respect of each $1,000 principal amount of 2041 Notes being converted a “settlement amount” equal to the sum of the daily settlement amounts for each of the 20 trading days during the observation period.

The “daily settlement amount,” for each of the 20 consecutive trading days during the observation period, shall consist of:

• cash equal to the lesser of (i) $50 and (ii) the daily conversion value; and

• if the daily conversion value exceeds $50, a number of shares equal to (i) the difference between the daily conversion value and $50, divided by (ii) the daily VWAP for such trading day.

The “daily conversion value” means, for each of the 20 consecutive trading days during the observation period, 5% of the product of (1) the applicable conversion rate and (2) the daily VWAP of our common stock on such trading day.

The “daily VWAP” means the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “AMMD.UQ <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such trading day (or if such volume-weighted average price is unavailable, the market value of one share of our common stock on such trading day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by us). The “daily VWAP” will be determined without regard to after hours trading or any other trading outside of the regular trading session trading hours.

The “observation period” with respect to any note surrendered for conversion means:

• if the relevant conversion date occurs on or after the date of issuance of a notice of redemption as described under “—Optional redemption,” but prior to the relevant redemption date, the 20 consecutive trading days beginning on and including the third scheduled trading day after such redemption date;

• if the relevant conversion date occurs during the 60 calendar days prior to the business day immediately preceding September 15, 2016 or September 15, 2041, the 20 consecutive trading days beginning on and including the third scheduled trading day after September 15, 2016 or September 15, 2041, as applicable; and

• in all other instances, the 20 consecutive trading days beginning on and including the third scheduled trading day after the relevant conversion date.

For the purposes of determining amounts due upon conversion only, “trading day” means a day on which (i) there is no “market disruption event” (as defined below) and (ii) trading in our common stock generally occurs on The NASDAQ Global Select Market or, if our common stock is not then listed on The NASDAQ Global Select Market, on the principal other United States national or regional securities exchange on which our common stock is then listed or, if our common stock is not then listed on a United States national or regional securities exchange, on the principal other market on which our common stock is then traded. If our common stock (or other security for which a daily VWAP must be determined) is not so listed or traded, “trading day” means a “business day.”

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“Scheduled trading day” means a day that is scheduled to be a trading day on the primary United States national securities exchange or market on which our common stock is listed or admitted for trading. If our common stock is not so listed or admitted for trading, “scheduled trading day” means a “business day.”

For the purposes of determining amounts due upon conversion, “market disruption event” means (i) a failure by the primary United States national or regional securities exchange or market on which our common stock is listed or admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any scheduled trading day for our common stock for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in our common stock or in any options, contracts or future contracts relating to our common stock.

Except as described under “—Adjustment to shares delivered upon conversion upon a make-whole fundamental change,” we will deliver the settlement amount to converting holders on the third business day immediately following the last trading day of the observation period.

We will deliver cash in lieu of any fractional share of common stock issuable upon conversion based on the daily VWAP of the common stock on the last trading day of the applicable observation period.

Each conversion will be deemed to have been effected as to any notes surrendered for conversion on the conversion date; provided, however, that the person in whose name any shares of our common stock shall be issuable upon such conversion will become the holder of record of such shares as of the close of business on the last trading day of the relevant observation period.

Conversion rate adjustments

The conversion rate will be adjusted as described below, except that we will not make any adjustments to the conversion rate if holders of the 2041 Notes participate (other than in the case of a share split or share combination), at the same time and upon the same terms as holders of our common stock and solely as a result of holding the 2041 Notes, in any of the transactions described below without having to convert their 2041 Notes as if they held a number of shares of our common stock equal to the applicable conversion rate, multiplied by the principal amount (expressed in thousands) of 2041 Notes held by such holder.

(1) If we exclusively issue shares of our common stock as a dividend or distribution on shares of our common stock, or if we effect a share split or share combination, the conversion rate will be adjusted based on the following formula:

CR1 = CR0 x	OS1
	OS0

where,

CR₀ = the conversion rate in effect immediately prior to the open of business on the ex-dividend date of such dividend or distribution, or immediately prior to the open of business on the effective date of such share split or combination, as applicable;

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CR1 =	the conversion rate in effect immediately after the open of business on such ex-dividend date or effective date;
OS0 =	the number of shares of our common stock outstanding immediately prior to the open of business on such ex-dividend date or effective date; and
OS1 =	the number of shares of our common stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination.

Any adjustment made under this clause (1) shall become effective immediately after the open of business on the ex-dividend date for such dividend or distribution, or immediately after the open of business on the effective date for such share split or share combination. If any dividend or distribution of the type described in this clause (1) is declared but not so paid or made, or any share split or combination of the type described in this clause (1) is announced but the outstanding shares of our common stock are not split or combined, as the case may be, the conversion rate shall be immediately readjusted, effective as of the date our board of directors determines not to pay such dividend or distribution, or not to split or combine the outstanding shares of our common stock, as the case may be, to the conversion rate that would then be in effect if such dividend, distribution, share split or share combination had not been declared or announced.

(2) If we issue to all or substantially all holders of our common stock any rights, options or warrants entitling them for a period of not more than 45 calendar days after the announcement date of such issuance to subscribe for or purchase shares of our common stock, at a price per share less than the average of the last reported sale prices of our common stock for the 10 consecutive trading day period ending on the trading day immediately preceding the date of announcement of such issuance, the conversion rate will be increased based on the following formula:

CR1 = CR0 x	OS0  + X
	OS0 + Y

where,

CR0 =	the conversion rate in effect immediately prior to the open of business on the ex-dividend date for such issuance;
CR1 =	the conversion rate in effect immediately after the open of business on such ex-dividend date;
OS0 =	the number of shares of our common stock outstanding immediately prior to the open of business on such ex-dividend date;
X =	the total number of shares of our common stock issuable pursuant to such rights, options or warrants; and
Y =	the number of shares of our common stock equal to the aggregate price payable to exercise such rights, options or warrants, divided by the average of the last reported sale prices of our common stock over the 10 consecutive trading day period ending on the trading day immediately preceding the date of announcement of the issuance of such rights, options or warrants.

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Any increase made under this clause (2) will be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the open of business on the ex-dividend date for such issuance. To the extent that shares of common stock are not delivered after the expiration of such rights, options or warrants, the conversion rate shall be decreased to the conversion rate that would then be in effect had the increase with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of common stock actually delivered. If such rights, options or warrants are not so issued, the conversion rate shall be decreased to the conversion rate that would then be in effect if such ex-dividend date for such issuance had not occurred.

In determining whether any rights, options or warrants entitle the holders to subscribe for or purchase shares of the common stock at less than such average of the last reported sale prices for the 10 consecutive trading day period ending on the trading day immediately preceding the date of announcement for such issuance, and in determining the aggregate offering price of such shares of the common stock, there shall be taken into account any consideration received by us for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by our board of directors.

(3) If we distribute shares of our capital stock, evidences of our indebtedness, other assets or property of ours or rights, options or warrants to acquire our capital stock or other securities, to all or substantially all holders of our common stock, excluding:

• dividends, distributions, rights, options or warrants as to which an adjustment was effected pursuant to clause (1) or (2) above or clause (5) below;

• dividends or distributions paid exclusively in cash; and

• spin-offs as to which the provisions set forth below in this clause (3) shall apply;

then the conversion rate will be increased based on the following formula:

CR1 = CR0 x	SP0
	SP0 -FMV

where,

CR0 =	the conversion rate in effect immediately prior to the open of business on the ex-dividend date for such distribution;
CR1 =	the conversion rate in effect immediately after the open of business on such ex-dividend date;
SP0 =	the average of the last reported sale prices of our common stock over the 10 consecutive trading day period ending on the trading day immediately preceding the ex-dividend date for such distribution; and
FMV =	the fair market value (as determined by our board of directors) of the shares of capital stock, evidences of indebtedness, assets, property, rights or warrants distributed with respect to each outstanding share of our common stock on the ex-dividend date for such distribution.

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If “FMV” (as defined above) is equal to or greater than the “SP₀” (as defined above), in lieu of the foregoing increase, each holder of a 2041 Note shall receive, in respect of each $1,000 principal amount thereof, at the same time and upon the same terms as holders of our common stock, the amount and kind of our capital stock, evidences of our indebtedness, other assets or property of ours or rights, options or warrants to acquire our capital stock or other securities that such holder would have received if such holder owned a number of shares of our common stock equal to the conversion rate in effect on the ex-dividend date for the distribution.

Any increase made under the portion of this clause (3) above will become effective immediately after the open of business on the ex-dividend date for such distribution. If such distribution is not so paid or made, the conversion rate shall be decreased to be the conversion rate that would then be in effect if such dividend or distribution had not been declared.

With respect to an adjustment pursuant to this clause (3) where there has been a payment of a dividend or other distribution on our common stock of shares of capital stock of any class or series, or similar equity interest, of or relating to a subsidiary or other business unit, which we refer to as a “spin-off,” the conversion rate will be increased based on the following formula:

CR1 = CR0 x	FMV0  + MP0
	MP0

where,

CR0 =	the conversion rate in effect immediately prior to the end of the valuation period (as defined below);
CR1 =	the conversion rate in effect immediately after the end of the valuation period;
FMV0 =	the average of the last reported sale prices of the capital stock or similar equity interest distributed to holders of our common stock applicable to one share of our common stock over the first 10 consecutive trading day period after, and including, the effective date of the spin-off (the “valuation period”); and
MP0 =	the average of the last reported sale prices of our common stock over the valuation period.

The adjustment to the conversion rate under the preceding paragraph will occur on the last day of the valuation period; provided that in respect of any conversion during the valuation period, references in the preceding paragraph with respect to 10 trading days shall be deemed replaced with such lesser number of trading days as have elapsed between the effective date of such spin-off and the conversion date in determining the applicable conversion rate.

(4) If any cash dividend or distribution is made to all or substantially all holders of our common stock, the conversion rate will be adjusted based on the following formula:

CR1 = CR0 x	SP0
	SP0 -C

where,

CR₀ = the conversion rate in effect immediately prior to the open of business on the ex-dividend date for such dividend or distribution;

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CR1 =	the conversion rate in effect immediately after the open of business on the ex-dividend date for such dividend or distribution;
SP0 =	the last reported sale price of our common stock on the trading day immediately preceding the ex-dividend date for such dividend or distribution; and
C =	the amount in cash per share we distribute to holders of our common stock.

If “C” (as defined above) is equal to or greater than “SP₀” (as defined above), in lieu of the foregoing increase, each holder of a note shall receive, for each $1,000 principal amount of 2041 Notes, at the same time and upon the same terms as holders of shares of our common stock, the amount of cash that such holder would have received if such holder owned a number of shares of our common stock equal to the conversion rate on the ex-dividend date for such cash dividend or distribution. Such increase shall become effective immediately after the open of business on the ex-dividend date for such dividend or distribution. If such dividend or distribution is not so paid, the conversion rate shall be decreased to be the conversion rate that would then be in effect if such dividend or distribution had not been declared.

(5) If we or any of our subsidiaries make a payment in respect of a tender offer or exchange offer for our common stock, to the extent that the cash and value of any other consideration included in the payment per share of common stock exceeds the last reported sale price of our common stock on the trading day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the conversion rate will be increased based on the following formula:

CR1 = CR0 x	AC + (SP1 x OS1)
	OS0 x SP1

where,

CR0 =	the conversion rate in effect immediately prior to the close of business on the 10th trading day immediately following, and including, the trading day next succeeding the date such tender or exchange offer expires;
CR1 =	the conversion rate in effect immediately after the close of business on the 10th trading day immediately following, and including, the trading day next succeeding the date such tender or exchange offer expires;
AC =	the aggregate value of all cash and any other consideration (as determined by our board of directors) paid or payable for shares purchased in such tender or exchange offer;
OS0 =	the number of shares of our common stock outstanding immediately prior to the date such tender or exchange offer expires (prior to giving effect to the purchase of all shares accepted for purchase or exchange in such tender offer or exchange offer);
OS1 =	the number of shares of our common stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares accepted for purchase or exchange in such tender or exchange offer); and
SP1 =	the average of the last reported sale prices of our common stock over the 10 consecutive trading day period commencing on the trading day next succeeding the date such tender or exchange offer expires.

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The adjustment to the conversion rate under the preceding paragraph will occur at the close of business on the 10th trading day immediately following, and including, the trading day next succeeding the date such tender or exchange offer expires; provided that in respect of any conversion within the 10 trading days immediately following, and including, the expiration date of any tender or exchange offer, references with respect to 10 trading days shall be deemed replaced with such lesser number of trading days as have elapsed between the expiration date of such tender or exchange offer and the conversion date in determining the applicable conversion rate.

Notwithstanding the above, certain listing standards of The NASDAQ Global Select Market may limit the amount by which we may increase the conversion rate pursuant to the events described in clauses (2) through (5) in this section and as described in the section captioned “—Adjustment to shares delivered upon conversion upon a make-whole fundamental change.” These standards generally require us to obtain the approval of our stockholders before entering into certain transactions that potentially result in the issuance of 20% or more of our common stock outstanding at the time the 2041 Notes are issued unless we obtain stockholder approval of issuances in excess of such limitations. In accordance with these listing standards, these restrictions will apply at any time when the 2041 Notes are outstanding, regardless of whether we then have a class of securities listed on The NASDAQ Global Select Market. Accordingly, in the event of an increase in the conversion rate above that which would result in the 2041 Notes, in the aggregate, becoming convertible into shares in excess of such limitations, we will, at our option, either obtain stockholder approval of such issuances or deliver cash in lieu of any shares otherwise deliverable upon conversions in excess of such limitations based on the daily VWAP of our common stock on each trading day of the relevant observation period in respect of which, in lieu of delivering our common stock, we deliver cash pursuant to this paragraph.

Except as stated herein, we will not adjust the conversion rate for the issuance of shares of our common stock or any securities convertible into or exchangeable for shares of our common stock or the right to purchase shares of our common stock or such convertible or exchangeable securities.

As used in this section, “ex-dividend date” means the first date on which the shares of our common stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question.

We are permitted to increase the conversion rate of the 2041 Notes by any amount for a period of at least 20 business days if our board of directors determines that such increase would be in our best interest. We may also (but are not required to) increase the conversion rate to avoid or diminish income tax to holders of our common stock or rights to purchase shares of our common stock in connection with a dividend or distribution of shares (or rights to acquire shares) or similar event.

A holder may, in some circumstances, including a distribution of cash dividends to holders of shares of our common stock, be deemed to have received a distribution subject to U.S. federal income tax as a result of an adjustment or the nonoccurrence of an adjustment to the conversion rate. Because a constructive dividend deemed received by a holder would not give rise to any cash from which any applicable withholding or backup withholding taxes could be satisfied, if we pay withholding or backup withholding taxes on behalf of a holder (because such holder failed to establish an exemption from withholding or backup withholding taxes), we may, at our option, set off any such payment against payments of cash and common stock payable on the

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2041 Notes. For a discussion of the U.S. federal income tax treatment of an adjustment to the conversion rate, see “United States federal income tax consequences.”

To the extent that we have a rights plan in effect upon conversion of the 2041 Notes into common stock, you will receive, in addition to any shares of common stock received in connection with such conversion, the rights under the rights plan, unless prior to any conversion, the rights have separated from the common stock, in which case, and only in such case, the conversion rate will be adjusted at the time of separation as if we distributed to all holders of our common stock, shares of our capital stock, evidences of indebtedness, assets, property, rights, options or warrants as described in clause (3) above, subject to readjustment in the event of the expiration, termination or redemption of such rights.

Notwithstanding any of the foregoing, the applicable conversion rate will not be adjusted:

• upon the issuance of any shares of our common stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on our securities and the investment of additional optional amounts in shares of our common stock under any plan;

• upon the issuance of any shares of our common stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by us or any of our subsidiaries;

• upon the issuance of any shares of our common stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in the preceding bullet and outstanding as of the date the notes were first issued;

• for a change in the par value of the common stock; or

• for accrued and unpaid interest, if any.

Adjustments to the applicable conversion rate will be calculated to the nearest 1/10,000th of a share. We will not be required to make an adjustment in the conversion rate unless the adjustment would require a change of at least 1% in the conversion rate. However, we will carry forward any adjustments that are less than 1% of the conversion rate and take them into account in any subsequent adjustment of the conversion rate or in connection with any conversion of the notes. Except as described above in this section and as described under “—Adjustment to shares delivered upon conversion upon a make-whole fundamental change,” we will not adjust the conversion rate.

Recapitalizations, reclassifications and changes of our common stock

In the case of:

• any recapitalization, reclassification or change of our common stock (other than changes resulting from a subdivision or combination),

• any consolidation, merger or combination involving us,

• any sale, lease or other transfer to a third party of the consolidated assets of ours and our subsidiaries substantially as an entirety, or

• any statutory share exchange,

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in each case as a result of which our common stock would be converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof), then, at and after the effective time of the transaction, the right to convert each $1,000 principal amount of 2041 Notes will be changed into a right to convert such principal amount of 2041 Notes into the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) that a holder of a number of shares of common stock equal to the conversion rate immediately prior to such transaction would have owned or been entitled to receive (the “reference property”) upon such transaction. However, at and after the effective time of the transaction (x) the amount otherwise payable in cash upon conversion of the notes as set forth under “—Settlement upon conversion” above will continue to be payable in cash, (y) the number of shares of our common stock otherwise deliverable upon conversion of the notes as set forth under “—Settlement upon conversion” above will instead be deliverable in the amount and type of reference property that a holder of that number of shares of our common stock would have received in such transaction and (z) the daily VWAP will be calculated based on the value of a unit of reference property that a holder of one share of our common stock would have received in such transaction. If the transaction causes our common stock to be converted into, or exchanged for, the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), the reference property into which the notes will be convertible will be deemed to be the weighted average of the types and amounts of consideration received by holders of our common stock that affirmatively make such an election. We will notify holders of the weighted average as soon as practicable after such determination is made. We will agree in the indenture not to become a party to any such transaction unless its terms are consistent with the foregoing.

Adjustments of prices

Whenever any provision of the indenture requires us to calculate the last reported sale prices, the daily VWAPs, the daily conversion values or the daily settlement amounts over a span of multiple days (including an observation period and the “stock price” for purposes of a make-whole fundamental change), we will make appropriate adjustments to each to account for any adjustment to the conversion rate that becomes effective, or any event requiring an adjustment to the conversion rate where the ex-dividend date of the event occurs, at any time during the period when the last reported sale prices, the daily VWAPs, the daily conversion values or the daily settlement amounts are to be calculated.

Adjustment to shares delivered upon conversion upon a make-whole fundamental change

If a “fundamental change” (as defined below and determined after giving effect to any exceptions to or exclusions from such definition, but without regard to clause (iii) in the proviso to clause (2) of the definition thereof, a “make-whole fundamental change”) occurs and a holder elects to convert its 2041 Notes in connection with such make-whole fundamental change, we will, under certain circumstances, increase the conversion rate for the 2041 Notes so surrendered for conversion by a number of additional shares of common stock (the “additional shares”), as described below. A conversion of 2041 Notes will be deemed for these purposes to be “in connection with” such make-whole fundamental change if the notice of conversion of the 2041 Notes is received by the conversion agent from, and including, the effective date of the make-whole fundamental change up to, and including, the business day immediately prior to the related fundamental change repurchase date (or, in the case of a make-whole fundamental change that would have been a fundamental change but for clause (iii) in the proviso to clause

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(2) of the definition thereof, the 15th trading day immediately following the effective date of such make-whole fundamental change).

Upon surrender of 2041 Notes for conversion in connection with a make-whole fundamental change, we will pay or deliver, as the case may be, in lieu of shares of common stock, including the additional shares, cash or a combination of cash and shares of common stock, as described under “—Settlement upon conversion.” However, if the consideration for our common stock in any make-whole fundamental change described in clause (2) of the definition of fundamental change is comprised entirely of cash, for any conversion of 2041 Notes following the effective date of such make-whole fundamental change, the conversion obligation will be calculated based solely on the “stock price” (as defined below) for the transaction and will be deemed to be an amount equal to the applicable conversion rate (including any adjustment as described in this section), multiplied by such stock price. In such event, the conversion obligation will be determined and paid to holders in cash on the third business day following the conversion date. We will notify holders of the effective date of any make-whole fundamental change and issue a press release announcing such effective date no later than five business days after such effective date.

The number of additional shares, if any, by which the conversion rate will be increased will be determined by reference to the table below, based on the date on which the make-whole fundamental change occurs or becomes effective (the “effective date”) and the price (the “stock price”) paid (or deemed paid) per share of our common stock in the make-whole fundamental change. If the holders of our common stock receive only cash in a make-whole fundamental change described in clause (2) of the definition of fundamental change, the stock price shall be the cash amount paid per share. Otherwise, the stock price shall be the average of the last reported sale prices of our common stock over the five trading day period ending on, and including, the trading day immediately preceding the effective date of the make-whole fundamental change.

The stock prices set forth in the column headings of the table below will be adjusted as of any date on which the conversion rate of the 2041 Notes is otherwise adjusted. The adjusted stock prices will equal the stock prices immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the conversion rate immediately prior to the adjustment giving rise to the stock price adjustment and the denominator of which is the conversion rate as so adjusted. The number of additional shares will be adjusted in the same manner and at the same time as the conversion rate as set forth under “—Conversion rate adjustments.”

The following table sets forth the number of additional shares to be received per $1,000 principal amount of 2041 Notes for each stock price and effective date set forth below:

	Stock price
Effective date	$14.83	$16.00	$17.00	$18.00	$19.00	$20.00	$25.00	$25.23	$30.00	$40.00	$50.00	$75.00	$100.00
9/15/2009	15.8991	14.9001	13.5461	12.3761	11.3576	10.4650	7.2957	7.2092	5.3964	3.2952	2.1947	0.9443	0.4392
9/15/2010	15.8991	15.1278	13.6807	12.4362	11.3579	10.4175	7.1198	7.0318	5.1884	3.1051	2.0432	0.8654	0.3974
9/15/2011	15.8991	15.1793	13.6364	12.3169	11.1799	10.1939	6.7900	6.7017	4.8509	2.8280	1.8333	0.7631	0.3453
9/15/2012	15.8991	15.0936	13.4396	12.0342	10.8316	9.7958	6.2920	6.2043	4.3690	2.4534	1.5604	0.6382	0.2849
9/15/2013	15.8991	15.2047	13.3673	11.8180	10.5032	9.3809	5.6846	5.5969	3.7601	1.9789	1.2182	0.4865	0.2135
9/15/2014	15.8991	14.7852	12.7501	11.0519	9.6276	8.4269	4.6284	4.5455	2.8095	1.3187	0.7744	0.3084	0.1356
9/15/2015	15.8991	13.8746	11.5673	9.6730	8.1143	6.8282	3.0271	2.9562	1.4701	0.4861	0.2523	0.1047	0.0456
9/15/2016	15.8991	10.9691	7.2925	5.5387	4.6487	3.8396	0.9146	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000

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The exact stock prices and effective dates may not be set forth in the table above, in which case

• If the stock price is between two stock prices in the table or the effective date is between two effective dates in the table, the number of additional shares will be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower stock prices and the earlier and later effective dates, as applicable, based on a 365-day year.

• If the stock price is greater than $100.00 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be issued upon conversion.

• If the stock price is less than $14.83 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be issued upon conversion.

Notwithstanding the foregoing, in no event will the number of additional shares of common stock issuable upon conversion in connection with a make-whole fundamental change exceed 15.8991 per $1,000 principal amount of notes, subject to adjustment in the same manner, and subject to the same limitations, as adjustments to the conversion rate set forth under “—Conversion rate adjustments.”

Our obligation to satisfy the additional shares requirement could be considered a penalty, in which case the enforceability thereof would be subject to general principles of reasonableness and equitable remedies.

Repurchase of the 2041 Notes by us at the option of the holder

Holders have the right to require us to repurchase the 2041 Notes on September 15, 2016 (the “repurchase date”). We will be required to repurchase any outstanding 2041 Notes for which a holder delivers a written repurchase notice to the paying agent. This notice must be delivered during the period beginning at any time from the open of business on the date that is 20 business days prior to the repurchase date until the close of business on the business day prior to the repurchase date. If the repurchase notice is given and withdrawn during such period, we will not be obligated to repurchase the related 2041 Notes.

We may be unable to repurchase the 2041 Notes if you elect to require us to repurchase the 2041 Notes pursuant to this provision. If you elect to require us to repurchase the 2041 Notes we may not have enough funds to pay the repurchase price for all tendered 2041 Notes. For example, our credit facility contains provisions prohibiting repurchase of the 2041 Notes under certain circumstances. If you elect to require us to repurchase the 2041 Notes at a time when we are prohibited from repurchasing 2041 Notes, we could seek the consent of our lenders to repurchase the 2041 Notes or attempt to refinance this debt. If we do not obtain consent to repurchase, or successfully refinance the 2041 Notes, we would not be permitted to repurchase the 2041 Notes. Our failure to so repurchase 2041 Notes would constitute an event of default under the indenture, which might constitute a default under the terms of the credit facility and may constitute an event of default under any further agreement governing our indebtedness. As a result, because our credit facility is defined as our senior debt, we would not be permitted to pay amounts due on the 2041 Notes under the subordination provisions of the indenture until all amounts due with respect to the senior debt are paid in full. See “—Subordination.” In addition, our ability to repurchase 2041 Notes with cash may be limited by the terms of any of our other

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then-existing debt. Even though we become obligated to repurchase any outstanding 2041 Note on a repurchase date, we may not have sufficient funds to pay the repurchase price on that repurchase date. “See “Risk factors—Risks related to the 2041 Notes—We may not have the ability to raise the funds necessary to settle conversions of the 2041 Notes or to repurchase the 2041 Notes when required, and our current debt contains, and our future debt may contain, limitations on our ability to pay cash due upon conversion or repurchase of the 2041 Notes.”

The repurchase price payable will be equal to 100% of the principal amount of the 2041 Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, such repurchase date; provided that any such accrued and unpaid interest will be paid not to the holder submitting the 2041 Notes for repurchase on the relevant repurchase date but instead to the holder of record at the close of business on the corresponding record date. Any 2041 Notes repurchased by us will be paid for in cash.

On or before the 20th business day prior to each repurchase date, we will provide to the trustee, the paying agent and to all holders of the 2041 Notes at their addresses shown in the register of the registrar, and to beneficial owners as required by applicable law, a notice stating, among other things:

• the last date on which a holder may exercise the repurchase right;

• the repurchase price;

• the name and address of the paying agent; and

• the procedures that holders must follow to require us to repurchase their 2041 Notes.

Simultaneously with providing such notice, we will publish a notice containing this information in a newspaper of general circulation in The City of New York or publish the information on our website or through such other public medium as we may use at that time.

A notice electing to require us to repurchase your 2041 Notes must state:

• if certificated 2041 Notes have been issued, the certificate numbers of the 2041 Notes, or if not certificated, your notice must comply with appropriate DTC procedures;

• the portion of the principal amount of 2041 Notes to be repurchased, in multiples of $1,000; and

• that the 2041 Notes are to be repurchased by us pursuant to the applicable provisions of the 2041 Notes and the indenture.

No 2041 Notes may be repurchased at the option of holders if the principal amount of the 2041 Notes has been accelerated, and such acceleration has not been rescinded, on or prior to the relevant repurchase date (except in the case of an acceleration resulting from a default by us in the payment of the repurchase price with respect to such 2041 Notes).

You may withdraw any repurchase notice in whole or in part by a written notice of withdrawal delivered to the paying agent prior to the close of business on the business day prior to the repurchase date. The notice of withdrawal must state:

• the principal amount of the withdrawn 2041 Notes;

• if certificated 2041 Notes have been issued, the certificate numbers of the withdrawn 2041 Notes, or if not certificated, your notice must comply with appropriate DTC procedures; and

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• the principal amount, if any, that remains subject to the repurchase notice.

You must either effect book-entry transfer or deliver the 2041 Notes, together with necessary endorsements, to the office of the paying agent after delivery of the repurchase notice to receive payment of the repurchase price. You will receive payment on the later of (i) the repurchase date and (ii) the time of book-entry transfer or the delivery of the 2041 Notes. If the paying agent holds money sufficient to pay the repurchase price of the 2041 Notes on the repurchase date, then:

• the 2041 Notes will cease to be outstanding and interest will cease to accrue (whether or not book-entry transfer of the 2041 Notes is made or whether or not the 2041 Note is delivered to the paying agent); and

• all other rights of the holder will terminate (other than the right to receive the repurchase price and previously accrued and unpaid interest upon delivery or transfer of the 2041 Notes).

Our ability to repurchase the 2041 Notes for cash on any repurchase date may be limited by restrictions on our ability to obtain funds for such repurchase through dividends from our subsidiaries, the terms of our then existing borrowing arrangements or otherwise. See “Risk factors—Risks related to the 2041 Notes—We may not have the ability to raise the funds necessary to settle conversions of the 2041 Notes or to repurchase the 2041 Notes when required, and our current debt contains, and our future debt may contain, limitations on our ability to pay cash due upon conversion or repurchase of the 2041 Notes.” If we fail to repurchase the 2041 Notes when required, we will be in default under the indenture.

We will comply with the provisions of Rule 13e-4 and any other rules under the Exchange Act that may be applicable.

Fundamental change permits holders to require us to repurchase 2041 Notes

If a “fundamental change” (as defined below in this section) occurs at any time, you will have the right, at your option, to require us to repurchase for cash any or all of your 2041 Notes, or any portion of the principal amount thereof, that is equal to $1,000 or a multiple of $1,000. The price we are required to pay is equal to 100% of the principal amount of the 2041 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date (unless the fundamental change repurchase date is after a record date but on or prior to the interest payment date to which such record date relates, in which case we will instead pay the full amount of accrued and unpaid interest to the holder of record on such record date and the fundamental change repurchase price will be equal to 100% of the principal amount of the 2041 Notes to be repurchased). The fundamental change repurchase date will be a date specified by us that is not less than 20 or more than 40 calendar days following the date of our fundamental change notice as described below. Any 2041 Notes repurchased by us will be paid for in cash.

A “fundamental change” will be deemed to have occurred at the time after the 2041 Notes are originally issued if any of the following occurs:

(1) a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than us, our subsidiaries and our and their employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the

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Exchange Act, of our common equity representing more than 50% of the voting power of our common equity;

(2) consummation of any share exchange, consolidation or merger of us pursuant to which our common stock will be converted into cash, securities or other property or any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of us and our subsidiaries, taken as a whole, to any person other than one of our subsidiaries; provided, however, that a transaction (i) that does not result in a reclassification, conversion, exchange or cancellation of our outstanding common stock (provided, however, that this clause (i) shall not apply to any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of us and our subsidiaries, taken as a whole, to any person other than one of our subsidiaries), or (ii) that is effected solely to change our jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding shares of our common stock solely into shares of common stock of the surviving entity or (iii) pursuant to which the holders of all classes of our common equity immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of common equity of the continuing or surviving corporation or transferee or the parent thereof immediately after such event shall not, in each case, be a fundamental change;

(3) our stockholders approve any plan or proposal for the liquidation or dissolution of us; or

(4) our common stock (or other common stock underlying the 2041 Notes) ceases to be listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors).

A transaction or transactions described in clause (1) or (2) above will not constitute a fundamental change, however, if at least 90% of the consideration received or to be received by our common stockholders, excluding cash payments for fractional shares, in connection with such transaction or transactions consists of shares of common stock that are listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions and as a result of this transaction or transactions the 2041 Notes become convertible into such consideration, excluding cash payments for fractional shares (subject to the provisions set forth above under “—Conversion rights—settlement upon conversion”).

On or before the 20th day after the occurrence of a fundamental change, we will provide to all holders of the 2041 Notes and the trustee and paying agent a notice of the occurrence of the fundamental change and of the resulting repurchase right. Such notice shall state, among other things:

• the events causing a fundamental change;

• the date of the fundamental change;

• the last date on which a holder may exercise the repurchase right;

• the fundamental change repurchase price;

• the fundamental change repurchase date;

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• the name and address of the paying agent and the conversion agent, if applicable;

• if applicable, the applicable conversion rate and any adjustments to the applicable conversion rate;

• if applicable, that the 2041 Notes with respect to which a fundamental change repurchase notice has been delivered by a holder may be converted only if the holder withdraws the fundamental change repurchase notice in accordance with the terms of the indenture; and

• the procedures that holders must follow to require us to repurchase their 2041 Notes.

Simultaneously with providing such notice, we will publish a notice containing this information in a newspaper of general circulation in The City of New York or publish the information on our website or through such other public medium as we may use at that time.

To exercise the fundamental change repurchase right, you must deliver, on or before the business day immediately preceding the fundamental change repurchase date, the 2041 Notes to be repurchased, duly endorsed for transfer, together with a written repurchase notice and the form entitled “Form of Fundamental Change Repurchase Notice” on the reverse side of the 2041 Notes duly completed, to the paying agent. Your repurchase notice must state:

• if certificated, the certificate numbers of your 2041 Notes to be delivered for repurchase or if not certificated, your notice must comply with appropriate DTC procedures;

• the portion of the principal amount of 2041 Notes to be repurchased, which must be $1,000 or a multiple thereof; and

• that the 2041 Notes are to be repurchased by us pursuant to the applicable provisions of the 2041 Notes and the indenture.

You may withdraw any repurchase notice (in whole or in part) by a written notice of withdrawal delivered to the paying agent prior to the close of business on the business day immediately preceding the fundamental change repurchase date. The notice of withdrawal shall state:

• the principal amount of the withdrawn 2041 Notes;

• if certificated 2041 Notes have been issued, the certificate numbers of the withdrawn 2041 Notes, or if not certificated, your notice must comply with appropriate DTC procedures; and

• the principal amount, if any, which remains subject to the repurchase notice.

We will be required to repurchase the 2041 Notes on the fundamental change repurchase date. You will receive payment of the fundamental change repurchase price on the later of (i) the fundamental change repurchase date and (ii) the time of book-entry transfer or the delivery of the 2041 Notes. If the paying agent holds money sufficient to pay the fundamental change repurchase price of the 2041 Notes on the fundamental change repurchase date, then:

• the 2041 Notes will cease to be outstanding and interest will cease to accrue (whether or not book-entry transfer of the 2041 Notes is made or whether or not the 2041 Notes are delivered to the paying agent); and

• all other rights of the holder will terminate (other than the right to receive the fundamental change repurchase price).

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In connection with any repurchase offer pursuant to a fundamental change repurchase notice, we will, if required:

• comply with the provisions of the tender offer rules under the Exchange Act that may then be applicable; and

• file a Schedule TO or any other required schedule under the Exchange Act.

No 2041 Notes may be repurchased at the option of holders upon a fundamental change if the principal amount of the 2041 Notes has been accelerated, and such acceleration has not been rescinded, on or prior to such date (except in the case of an acceleration resulting from a default by us in the payment of the fundamental change repurchase price with respect to such 2041 Notes).

The repurchase rights of the holders could discourage a potential acquirer of us. The fundamental change repurchase feature, however, is not the result of management’s knowledge of any specific effort to obtain control of us by any means or part of a plan by management to adopt a series of anti-takeover provisions.

The term fundamental change is limited to specified transactions and may not include other events that might adversely affect our financial condition. In addition, the requirement that we offer to repurchase the 2041 Notes upon a fundamental change may not protect holders in the event of a highly leveraged transaction, reorganization, merger or similar transaction involving us.

Furthermore, holders will not be entitled to require us to repurchase their 2041 Notes upon a fundamental change or entitled to an increase in the conversion rate upon conversion as described under “—Adjustment to shares delivered upon conversion upon a make-whole fundamental change” in certain circumstances involving a significant change in the composition of our board, including in connection with a proxy contest.

The definition of fundamental change includes a phrase relating to the conveyance, transfer, sale, lease or disposition of “all or substantially all” of our consolidated assets. There is no precise, established definition of the phrase “substantially all” under applicable law. Accordingly, the ability of a holder of the 2041 Notes to require us to repurchase its 2041 Notes as a result of the conveyance, transfer, sale, lease or other disposition of less than all of our assets may be uncertain.

If a fundamental change were to occur, we may not have enough funds to pay the fundamental change repurchase price. In addition, we are not permitted to repurchase the 2041 Notes for cash under certain circumstances by our credit agreement. If we are not permitted to repurchase the 2041 Notes, we could seek consent from our lenders to repurchase the 2041 Notes. If we are unable to obtain their consent, we could attempt to refinance the 2041 Notes. If we were unable to obtain the consent or refinance, we would not be permitted to repurchase the 2041 Notes. Moreover, our ability to repurchase the 2041 Notes may be further limited by restrictions on our ability to obtain funds for such repurchase through dividends from our subsidiaries or otherwise. See “Risk Factors—Risks related to the 2041 Notes—We may not have the ability to raise the funds necessary to settle conversions of the 2041 Notes or to repurchase the 2041 Notes when required, and our current debt contains, and our future debt may contain, limitations on our ability to pay cash due upon conversion or repurchase of the 2041 Notes.” If we fail to repurchase the 2041 Notes when required following a fundamental change, either because our credit

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agreement does not permit it or for any other reason, we will be in default under the indenture. A default under the indenture could result in an event of default under our senior debt and/or our senior debt may contain similar change in control provisions permitting holders of such senior debt to accelerate or to require us to repurchase our indebtedness upon the occurrence of similar events or on some specific dates. As a result, we would be prohibited from paying amounts due on the 2041 Notes under the subordination provisions of the indenture until all amounts due with respect to the senior debt are paid in full. See “—Subordination.”

Consolidation, merger and sale of assets

The indenture provides that we shall not consolidate with or merge with or into, or sell, convey, transfer or lease all or substantially all of our properties and assets to, another person, unless (i) the resulting, surviving or transferee person (if not us) is a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and such corporation (if not us) expressly assumes by supplemental indenture all of our obligations under the 2041 Notes and the indenture; and (ii) immediately after giving effect to such transaction, no default or event of default has occurred and is continuing under the indenture. Upon any such consolidation, merger or sale, conveyance, transfer or lease, the resulting, surviving or transferee person shall succeed to, and may exercise every right and power of, ours under the indenture, and we shall be discharged from our obligations under the 2041 Notes and the indenture except in the case of any such lease.

Although these types of transactions are permitted under the indenture, certain of the foregoing transactions could constitute a fundamental change permitting each holder to require us to repurchase the 2041 Notes of such holder as described above.

Events of default and remedies

Each of the following is an event of default:

(1) default in any payment of interest on any 2041 Note when due and payable and the default continues for a period of 30 days, whether or not prohibited by the subordination provisions of the indenture;

(2) default in the payment of principal of any 2041 Note when due and payable at its stated maturity, upon optional redemption, upon any required repurchase, upon declaration of acceleration or otherwise, whether or not prohibited by the subordination provisions of the indenture;

(3) our failure to comply with our obligation to convert the 2041 Notes in accordance with the indenture upon exercise of a holder’s conversion right and such failure continues for a period of 10 calendar days;

(4) our failure to give a fundamental change notice as described under “—Fundamental change permits holders to require us to repurchase 2041 Notes”, a make-whole fundamental change notice as described under “—Adjustment to shares delivered upon conversion upon make-whole fundamental change” or notice of a specified corporate transaction as described under “—Conversion upon specified corporate events,” in each case when due;

(5) our failure to comply with our obligations under “—Consolidation, merger and sale of assets;”

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(6) our failure for 60 days after written notice from the trustee or the holders of at least 25% in principal amount of the 2041 Notes then outstanding has been received to comply with any of our other agreements contained in the 2041 Notes or indenture;

(7) default by us or any of our significant subsidiaries (as defined in Article 1, Rule 1-02 of Regulation S-X) or subsidiary guarantors with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed in excess of $25 million in the aggregate of us and/or any such subsidiary, whether such indebtedness now exists or shall hereafter be created (i) resulting in such indebtedness becoming or being declared due and payable or (ii) constituting a failure to pay the principal or interest of any such debt when due and payable at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise, including any applicable grace period, without such indebtedness having been discharged or such acceleration having been rescinded or annulled within 30 days after written notice to us from the trustee or the holders of at least 25% in principal amount of the 2041 Notes then outstanding;

(8) certain events of bankruptcy, insolvency, or reorganization of us or any subsidiary guarantor; or

(9) except as permitted by the indenture, any subsidiary guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect, or any subsidiary guarantor, or any person acting on its behalf, shall deny or disaffirm its obligation under the subsidiary guarantee.

If an event of default occurs and is continuing, the trustee by notice to us, or the holders of at least 25% in principal amount of the outstanding 2041 Notes by notice to us and the trustee, may, and the trustee at the request of such holders shall, declare 100% of the principal of and accrued and unpaid interest, if any, on all the 2041 Notes to be due and payable. In case of certain events of bankruptcy, insolvency or reorganization, involving us, 100% of the principal of and accrued and unpaid interest on the 2041 Notes will automatically become due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, will be due and payable immediately.

Notwithstanding the foregoing, the indenture will provide that, to the extent we elect, the sole remedy for an event of default relating to (i) our failure to file with the trustee pursuant to Section 314(a)(1) of the Trust Indenture Act any documents or reports that we are required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act or (ii) our failure to comply with our obligations as set forth under “—Reports” below, will for the first 180 days after the occurrence of such an event of default, consist exclusively of the right to receive additional interest on the 2041 Notes at a rate equal to 0.25% per annum of the principal amount of the 2041 Notes outstanding during the first 90 days after the occurrence of such an event of default and 0.50% per annum of the principal amount of the 2041 Notes outstanding from the 91st day until the 180th day following the occurrence of such an event of default during which such event of default is continuing.

If we so elect, such additional interest will be payable on all outstanding 2041 Notes from and including the date on which such event of default first occurs to but not including the 180th day thereafter (or such earlier date on which the event of default relating to a failure to comply with such requirements has been cured or waived). On the 180th day after such event of default (or

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earlier, if the event of default relating to the reporting obligations is cured or waived prior to such 180th day), additional interest will cease to accrue and, to the extent the event of default is continuing after such 180th day, the 2041 Notes will be subject to acceleration as provided above. The provisions of the indenture described in this paragraph will not affect the rights of holders of 2041 Notes in the event of the occurrence of any other event of default. In the event we do not elect to pay the additional interest following an event of default in accordance with this paragraph, the 2041 Notes will be subject to acceleration as provided above.

In order to elect to pay the additional interest as the sole remedy during the first 180 days after the occurrence of an event of default relating to the failure to comply with the reporting obligations in accordance with the immediately preceding paragraph, we must notify all holders of 2041 Notes, the trustee and the paying agent of such election prior to the beginning of such 180-day period. Upon our failure to timely give such notice, the 2041 Notes will be immediately subject to acceleration as provided above.

If any portion of the amount payable on the 2041 Notes upon acceleration is considered by a court to be unearned interest (through the allocation of the value of the instrument to the embedded warrant or otherwise), the court could disallow recovery of any such portion.

The holders of a majority in principal amount of the outstanding 2041 Notes may waive all past defaults (except with respect to nonpayment of principal (including the redemption price, the repurchase price or the fundamental repurchase price, if applicable) or interest or with respect to the failure to deliver the consideration due upon conversion) and rescind any such acceleration with respect to the 2041 Notes and its consequences if (i) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (ii) all existing events of default, other than the nonpayment of the principal of and interest on the 2041 Notes that have become due solely by such declaration of acceleration, have been cured or waived.

Each holder shall have the right to receive payment or delivery, as the case may be, of:

• the principal (including the redemption price, the repurchase price or the fundamental change repurchase price, if applicable) of;

• accrued and unpaid interest, if any, on; and

• the consideration due upon conversion of,

its 2041 Notes, on or after the respective due dates expressed or provided for in the indenture, or to institute suit for the enforcement of any such payment or delivery, as the case may be, and such right to receive such payment or delivery, as the case may be, on or after such respective dates shall not be impaired or affected without the consent of such holder.

Subject to the provisions of the indenture relating to the duties of the trustee, if an event of default occurs and is continuing, the trustee will be under no obligation to exercise any of the rights or powers under the indenture at the request or direction of any of the holders unless such holders have offered to the trustee indemnity or security reasonably satisfactory to it against any loss, liability or expense. Except to enforce the right to receive payment of principal or interest when due, or the right to receive payment or delivery of the consideration due upon conversion, no holder may pursue any remedy with respect to the indenture or the 2041 Notes unless:

(1) such holder has previously given the trustee notice that an event of default is continuing;

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(2) holders of at least 25% in principal amount of the outstanding 2041 Notes have requested the trustee to pursue the remedy;

(3) such holders have offered the trustee security or indemnity reasonably satisfactory to it against any loss, liability or expense;

(4) the trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity; and

(5) the holders of a majority in principal amount of the outstanding 2041 Notes have not given the trustee a direction that, in the opinion of the trustee, is inconsistent with such request within such 60-day period.

Subject to certain restrictions, the holders of a majority in principal amount of the outstanding 2041 Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or of exercising any trust or power conferred on the trustee.

The indenture provides that in the event an event of default has occurred and is continuing, the trustee will be required in the exercise of its powers to use the degree of care that a prudent person would use in the conduct of its own affairs. The trustee, however, may refuse to follow any direction that conflicts with law or the indenture or that the trustee determines is unduly prejudicial to the rights of any other holder or that would involve the trustee in personal liability. Prior to taking any action under the indenture, the trustee will be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

The indenture provides that if a default occurs and is continuing and is known to the trustee, the trustee must mail to each holder notice of the default within 90 days after it occurs. Except in the case of a default in the payment of principal of or interest on any 2041 Note or a default in the payment or delivery of the consideration due upon conversion, the trustee may withhold notice if and so long as a committee of trust officers of the trustee in good faith determines that withholding notice is in the interests of the holders. In addition, we are required to deliver to the trustee, within 120 days after the end of each fiscal year, a certificate indicating whether the signers thereof know of any default that occurred during the previous year. We are also required to deliver to the trustee, within 30 days after the occurrence thereof, written notice of any events which would constitute certain defaults, their status and what action we are taking or proposes to take in respect thereof.

Modification and amendment

Subject to certain exceptions, the indenture or the 2041 Notes may be amended with the consent of the holders of at least a majority in principal amount of the 2041 Notes then outstanding (including without limitation, consents obtained in connection with a repurchase of, or tender offer or exchange offer for, 2041 Notes) and, subject to certain exceptions, any past default or compliance with any provisions may be waived with the consent of the holders of a majority in principal amount of the 2041 Notes then outstanding (including, without limitation, consents obtained in connection with a repurchase of, or tender offer or exchange offer for, 2041 Notes). However, without the consent of each holder of an outstanding 2041 Note affected, no amendment may, among other things:

(1) reduce the amount of 2041 Notes whose holders must consent to an amendment;

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(2) reduce the rate of or extend the stated time for payment of interest on any 2041 Note;

(3) reduce the principal of or extend the stated maturity of any 2041 Note;

(4) make any change that adversely affects the conversion rights of any 2041 Notes;

(5) reduce the redemption price, the repurchase price or the fundamental change repurchase price of any 2041 Note or amend or modify in any manner adverse to the holders of 2041 Notes our obligation to make such payments, whether through an amendment or waiver of provisions in the covenants, definitions or otherwise;

(6) make any 2041 Note payable in money other than that stated in the 2041 Note;

(7) other than in accordance with the provisions of the indenture, eliminate any existing subsidiary guarantee of the 2041 Notes;

(8) change the ranking of the 2041 Notes;

(9) impair the right of any holder to receive payment of principal and interest on such holder’s 2041 Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holder’s 2041 Notes;

(10) make any change to the subordination provisions of the indenture if such change would adversely affect the rights of holders; or

(11) make any change in the amendment provisions which require each holder’s consent or in the waiver provisions.

Without the consent of any holder, we and the trustee may amend the indenture to:

(1) cure any ambiguity, omission, defect or inconsistency that does not adversely affect holders of the 2041 Notes;

(2) provide for the assumption by a successor corporation to us of our obligations under the indenture and the 2041 Notes or provide for a successor to any subsidiary guarantor under the subsidiary guarantees, as applicable;

(3) add guarantees with respect to the 2041 Notes;

(4) secure the 2041 Notes or a subsidiary guarantor’s obligations in respect of the 2041 Notes or a subsidiary guarantee;

(5) add to our covenants for the benefit of the holders or surrender any right or power conferred upon us;

(6) make any change that does not adversely affect the rights of any holder in any material respect;

(7) comply with any requirement of the SEC in connection with the qualification of the indenture under the Trust Indenture Act of 1939, as amended, as contemplated by the indenture or otherwise;

(8) conform the provisions of the indenture to the “Description of the 2041 Notes” section in the prospectus; or

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(9) evidence and provide the acceptance of the appointment of a successor trustee under the indenture.

Holders do not need to approve the particular form of any proposed amendment. It will be sufficient if such holders approve the substance of the proposed amendment. After an amendment under the indenture becomes effective, we are required to mail to the holders a notice briefly describing such amendment. However, the failure to give such notice to all the holders, or any defect in the notice, will not impair or affect the validity of the amendment.

The holders of a majority in aggregate principal amount of the outstanding 2041 Notes may, on behalf of all the holders of all 2041 Notes:

• waive compliance by us and any subsidiary guarantor with restrictive provisions of the indenture, as detailed in the indenture; or

• waive any past default under the indenture and its consequences, except a default in the payment of any amount due, or in the obligation to deliver common stock or cash, with respect to any 2041 Note or in respect of any provision which under the indenture cannot be modified or amended without the consent of the holder of each outstanding 2041 Note affected.

Discharge

We may satisfy and discharge our obligations under the indenture by delivering to the securities registrar for cancellation all outstanding 2041 Notes or by depositing with the trustee or delivering to the holders, as applicable, after the 2041 Notes have become due and payable, whether at the stated maturity, the repurchase date, any fundamental change repurchase date, any redemption date, upon conversion or otherwise, cash and (in the case of conversion) shares of common stock sufficient to pay all of the outstanding 2041 Notes and paying all other sums payable under the indenture by us. Such discharge is subject to terms contained in the indenture.

Calculations in respect of the 2041 Notes

Except as otherwise provided above, we will be responsible for making all calculations called for under the 2041 Notes. These calculations include, but are not limited to, determinations of the last reported sale prices of our common stock, accrued interest payable on the 2041 Notes and the conversion rate of the 2041 Notes. We will make all these calculations in good faith and, absent manifest error, our calculations will be final and binding on holders of 2041 Notes. We will provide a schedule of our calculations to the trustee and the conversion agent, and the trustee and conversion agent are entitled to rely conclusively upon the accuracy of our calculations without independent verification. The trustee will forward our calculations to any holder of 2041 Notes upon the request of that holder.

Reports

The indenture provides that any documents or reports that we are required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act must be filed by us with the trustee within 15 days after the same are required to be filed with the SEC (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act). Documents filed by us with the SEC via the EDGAR system will be deemed to be filed with the trustee as of the time such documents are filed via EDGAR.

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Trustee

U.S. Bank National Association is the trustee, security registrar, paying agent and conversion agent. U.S. Bank National Association, in each of its capacities, including without limitation as trustee, security registrar, paying agent and conversion agent, assumes no responsibility for the accuracy or completeness of the information concerning us or our affiliates or any other party contained in this document or the related documents or for any failure by us or any other party to disclose events that may have occurred and may affect the significance or accuracy of such information.

We maintain banking relationships in the ordinary course of business with the trustee and its affiliates.

Governing law

The indenture provides that it and the 2041 Notes, and any claim, controversy or dispute arising under or related to the indenture or the 2041 Notes, will be governed by and construed in accordance with the laws of the State of New York (without regard to the conflicts of laws provisions thereof).

Book-entry, settlement and clearance

The global notes

The 2041 Notes will be initially issued in the form of one or more registered notes in global form, without interest coupons (the “global notes”). Upon issuance, each of the global notes will be deposited with the trustee as custodian for DTC and registered in the name of Cede & Co., as nominee of DTC.

Ownership of beneficial interests in a global note will be limited to persons who have accounts with DTC (“DTC participants”) or persons who hold interests through DTC participants. We expect that under procedures established by DTC:

• upon deposit of a global note with DTC’s custodian, DTC will credit portions of the principal amount of the global note to the accounts of the DTC participants designated by the Dealer Managers; and

• ownership of beneficial interests in a global note will be shown on, and transfer of ownership of those interests will be effected only through, records maintained by DTC (with respect to interests of DTC participants) and the records of DTC participants (with respect to other owners of beneficial interests in the global note).

Beneficial interests in global notes may not be exchanged for 2041 Notes in physical, certificated form except in the limited circumstances described below.

Book-entry procedures for the global notes

All interests in the global notes will be subject to the operations and procedures of DTC. We provide the following summary of those operations and procedures solely for the convenience of investors. The operations and procedures of DTC are controlled by that settlement system and may be changed at any time. We are not, and the Dealer Managers are not, responsible for those operations or procedures.

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DTC has advised us that it is:

• a limited purpose trust company organized under the laws of the State of New York;

• a “banking organization” within the meaning of the New York State Banking Law;

• a member of the Federal Reserve System;

• a “clearing corporation” within the meaning of the Uniform Commercial Code; and

• a “clearing agency” registered under Section 17A of the Exchange Act.

DTC was created to hold securities for its participants and to facilitate the clearance and settlement of securities transactions between its participants through electronic book-entry changes to the accounts of its participants. DTC’s participants include securities brokers and dealers, including the Dealer Managers; banks and trust companies; clearing corporations and other organizations. Indirect access to DTC’s system is also available to others such as banks, brokers, dealers and trust companies; these indirect participants clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly. Investors who are not DTC participants may beneficially own securities held by or on behalf of DTC only through DTC participants or indirect participants in DTC.

So long as DTC’s nominee is the registered owner of a global note, that nominee will be considered the sole owner or holder of the 2041 Notes represented by that global note for all purposes under the indenture. Except as provided below, owners of beneficial interests in a global note:

• will not be entitled to have 2041 Notes represented by the global note registered in their names;

• will not receive or be entitled to receive physical, certificated 2041 Notes; and

• will not be considered the owners or holders of the 2041 Notes under the indenture for any purpose, including with respect to the giving of any direction, instruction or approval to the trustee under the indenture.

As a result, each investor who owns a beneficial interest in a global note must rely on the procedures of DTC to exercise any rights of a holder of 2041 Notes under the indenture (and, if the investor is not a participant or an indirect participant in DTC, on the procedures of the DTC participant through which the investor owns its interest).

Payments of principal and interest with respect to the 2041 Notes represented by a global note will be made by the trustee to DTC’s nominee as the registered holder of the global note. Neither we nor the Trustee will have any responsibility or liability for the payment of amounts to owners of beneficial interests in a global note, for any aspect of the records relating to or payments made on account of those interests by DTC, or for maintaining, supervising or reviewing any records of DTC relating to those interests.

Payments by participants and indirect participants in DTC to the owners of beneficial interests in a global note will be governed by standing instructions and customary industry practice and will be the responsibility of those participants or indirect participants and DTC.

Transfers between participants in DTC will be effected under DTC’s procedures and will be settled in same-day funds.

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Certificated notes

2041 Notes in physical, certificated form will be issued and delivered to each person that DTC identifies as a beneficial owner of the related 2041 Notes only if:

• DTC notifies us at any time that it is unwilling or unable to continue as depositary for the global notes and a successor depositary is not appointed within 90 days;

• DTC ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 days; or

• an event of default with respect to the 2041 Notes has occurred and is continuing and such beneficial owner requests that its notes be issued in physical, certificated form.

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Description of capital stock

The following summary of the terms of our common stock, including our Second Amended and Restated Certificate of Incorporation and By-Laws, may not be complete and is subject to, and qualified in its entirety by reference to, the terms and provisions of our Second Amended and Restated Certificate of Incorporation and By-Laws and relevant provisions of Delaware law. You should refer to, and read this summary together with, our Certificate of Incorporation and By-Laws to review all of the terms of our common stock that may be important to you.

Common stock

Under our Second Amended and Restated Certificate of Incorporation, we are authorized to issue a total of 200,000,000 shares of common stock, par value $.01 per share. As of August 3, 2009, we had 74,287,009 issued and outstanding shares of our common stock held by approximately 126 stockholders of record. All outstanding shares of our common stock are fully paid and nonassessable. Our common stock is quoted on The NASDAQ Global Select Market under the symbol “AMMD.”

Voting Rights.    Each share of our common stock entitles the holder to one vote on all matters submitted to a vote of the stockholders, including the election of directors, and the holders of such shares exclusively possess all voting power, except as provided by law or in any resolution adopted by our Board of Directors with respect to any series of preferred stock. Our Second Amended and Restated Certificate of Incorporation does not provide for cumulative voting for the election of directors.

Dividend Rights.    The holders of shares of our common stock are entitled to participate equally in dividends when our Board of Directors declares dividends on our common stock out of legally available funds.

Other Rights.    In the event of our liquidation, dissolution or winding up, voluntarily or involuntarily, holders of our common stock will have the right to a ratable portion of the assets remaining after satisfaction in full of the prior rights of our creditors and of all liabilities, except as provided in any resolution adopted by our Board of Directors with respect to any series of preferred stock. No shares of our common stock have any preemptive, redemption or conversion rights, or the benefits of any sinking fund.

Certain provisions of our restated certificate of incorporation and by-laws

Our Second Amended and Restated Certificate of Incorporation and By-Laws and Delaware law include a number of provisions that we believe may have the effect of encouraging persons considering unsolicited tender offers or other takeover proposals to negotiate with our Board of Directors rather than pursue non-negotiated takeover attempts. The following is a summary description of these provisions, and we refer you to our Second Amended and Restated Certificate of Incorporation and By-Laws and Delaware law for more information since their terms affect a holder’s rights as a stockholder. The anti-takeover provisions include:

Classification of the board

Our Board of Directors is divided into three classes, each of which consists, as nearly as may be possible, of one-third of the total number of directors constituting the entire board. Our Board

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of Directors currently consists of eight members. Each class of directors serves a three-year term. At each annual meeting of our stockholders, successors to the class of directors whose term expires at the annual meeting are elected for three-year terms.

The classification of our Board of Directors could have the effect of making it more difficult for stockholders, including those holding a majority of the outstanding shares, to force an immediate change in the composition of our Board of Directors. Two stockholder meetings, instead of one, generally will be required to effect a change in the control of our Board of Directors. Our Board of Directors believes that the longer time required to elect a majority of a classified board will help to ensure the continuity and stability of our management and policies since a majority of the directors at any given time will have had prior experience as our directors.

Removal of directors

Our Second Amended and Restated Certificate of Incorporation provides that our directors may be removed only for cause and upon the affirmative vote of the holders of a majority of our outstanding shares.

Business combinations with interested stockholders

The Delaware legislature has enacted legislation (Section 203 of the DGCL) which generally prohibits a corporation from engaging in any “business combination” with an “interested stockholder” for a period of three years from the date such person becomes an interested stockholder, unless the interested stockholder:

• prior to becoming an interested stockholder, obtained the approval of our Board of Directors for either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

• becomes the beneficial owner of at least 85% of our outstanding voting stock in the same transaction in which the stockholder became an interested stockholder, excluding for purposes of determining the number of shares outstanding those shares owned by officers, directors and certain employee stock plans; or

• subsequent to the acquisition of 15% or more of our outstanding voting stock, obtains approval of the business combination by our Board of Directors and the holders of two-thirds of our outstanding shares, other than those shares held by the interested stockholder.

The term “business combination” refers to a merger, consolidation or other specified corporate transaction. The term “interested stockholder” refers to a 15% stockholder or an affiliate which was a 15% stockholder at any time within the preceding three years.

Special meetings

Our By-Laws provide that only our Board of Directors, our President or our President, at the request of the holders of a majority of our outstanding capital stock entitled to vote, may call a special meeting of the stockholders.

Transfer agent and registrar

The Transfer Agent and Registrar for our common stock is Wells Fargo Bank, N.A.

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United States federal income tax consequences

The following is a discussion of the material United States federal income tax consequences relating to the Exchange Offer and the ownership and disposition of the 2041 Notes. This discussion does not purport to be a complete analysis of all potential United States federal income tax considerations relating thereto, and does not address any tax considerations arising under any state, local or foreign tax laws or under any other United States federal tax laws.

This discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations promulgated thereunder, judicial decisions and administrative pronouncements and published rulings of the Internal Revenue Service (“IRS”), all as of the date hereof. These authorities may change, possibly retroactively, resulting in United States federal income tax consequences different from those set forth below. We have not sought and will not seek any ruling from the IRS regarding the tax consequences of the Exchange Offer or the ownership and disposition of 2041 Notes. The IRS may not agree with our positions regarding such tax consequences, and a contrary position could be sustained by a court.

This discussion is limited to holders who receive 2041 Notes in exchange for 2036 Notes pursuant to the Exchange Offer or, with respect to the discussion under “Consequences of the Exchange Offer—Non-exchanging holders,” holders who do not exchange their 2036 Notes pursuant to the Exchange Offer. In addition, this discussion only addresses holders who hold the 2036 Notes and the 2041 Notes (collectively, the “notes”) as capital assets. This discussion does not address tax considerations that may be relevant to a holder in light of such holder’s particular circumstances or to holders subject to special rules under the United States federal income tax laws, including, without limitation:

• banks, insurance companies, or other financial institutions;

• holders subject to the alternative minimum tax;

• tax-exempt organizations or tax-qualified retirement plans;

• dealers in securities or currencies;

• traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;

• foreign persons or entities (except to the extent specifically set forth below);

• United States expatriates;

• United States holders (as defined below) whose functional currency is not the United States dollar;

• individuals that are Non-United States holders (as defined below) and are present in the United States for 183 days or more in the taxable year of disposition of notes;

• persons treated as partnerships or other pass-through entities for United States federal income tax purposes; or

• persons who hold the notes as part of a hedge, straddle, conversion transaction or other risk reduction strategy, or as a part of an integrated investment.

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If a partnership or other entity treated as a partnership for United States federal income tax purposes holds notes, the tax treatment of each partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. Such partnerships or entities and their partners should consult their tax advisors regarding their tax treatment. For purposes of this discussion, a “United States holder” means a beneficial owner of notes that is:

• an individual citizen or resident of the United States;

• a corporation or other entity taxable as a corporation for United States federal income tax purposes, created or organized under the laws of the United States, any state thereof, or the District of Columbia;

• an estate, the income of which is subject to United States federal income taxation regardless of its source; or

• a trust that (1) is subject to the primary supervision of a United States court and the control of one or more United States persons or (2) has validly elected to be treated as a United States person for United States federal income tax purposes.

A Non-United States holder is a beneficial owner of notes that is not a United States holder.

YOU ARE URGED TO CONSULT YOUR TAX ADVISOR REGARDING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO YOU OF THE EXCHANGE OFFER AND THE OWNERSHIP AND DISPOSITION OF 2041 NOTES, AS WELL AS THE APPLICATION OF THE FEDERAL ESTATE OR GIFT TAX LAWS, ANY STATE, LOCAL OR FOREIGN TAX LAWS, AND ANY APPLICABLE TAX TREATY.

Classification of the 2036 Notes

Under the indenture governing the 2036 Notes, we and each holder of the 2036 Notes agreed to treat the 2036 Notes, for United States federal income tax purposes, as indebtedness subject to the Treasury Regulations governing contingent payment debt instruments (the “CPDI Regulations”). The remainder of this discussion assumes that the 2036 Notes were properly treated as indebtedness subject to the CPDI Regulations. However, the application of the CPDI Regulations to instruments such as the 2036 Notes remains uncertain, and no rulings have been sought from the IRS with respect to any of the tax consequences relating to the 2036 Notes. Accordingly, the IRS or a court may not agree with the treatment described herein. Any differing treatment could affect the amount, timing and character of income, gain, or loss recognized by a holder pursuant to the Exchange Offer or with respect to the ownership of the 2041 Notes from that described in this summary.

Classification of the 2041 Notes

Under the indenture governing the 2041 Notes, we and each holder of the 2041 Notes agree to treat the 2041 Notes, for United States federal income tax purposes, as indebtedness subject to the CPDI Regulations in the manner described below. Under the indenture governing the 2041 Notes, we and each holder agree to use the comparable yield and projected payment schedule that we determine for the 2041 Notes, which will be different from those we determined for the 2036 Notes. The remainder of this discussion does not address any other possible tax treatment of the notes. The IRS has issued a revenue ruling with respect to instruments similar to the notes which supports certain aspects of the treatment described below. However, the application of the CPDI Regulations to instruments such as the notes remains uncertain in several other respects,

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and no rulings have been sought from the IRS with respect to any of the tax consequences discussed below. Accordingly, the IRS or a court may not agree with the treatment described herein. Any different tax treatment could affect the amount, timing and character of income, gain or loss in respect of an investment in the notes. In particular, a holder might be required to accrue original issue discount at a different rate than the “comparable yield” described below, might recognize different amounts of income, gain or loss (or possibly no loss) upon conversion of the notes to cash or cash and common stock, and might recognize capital gain or loss upon a taxable disposition of the notes. Holders should consult their tax advisors concerning the tax consequences of holding the notes.

Consequences of the Exchange Offer

Exchanging holders

The United States federal income tax consequences of the exchange of 2036 Notes for 2041 Notes will depend on whether the exchange constitutes a “significant modification” of the terms of the 2036 Notes for United States federal income tax purposes. If the exchange does not constitute a “significant modification” of the terms of the 2036 Notes, it will not be a taxable event for exchanging holders. If, however, the exchange is viewed as a “significant modification” of the terms of the 2036 Notes, such exchange will be treated as an exchange for United States federal income tax purposes and will be characterized as either a recapitalization or as a taxable exchange.

In general, a “significant modification” of an existing debt instrument, whether effected pursuant to an amendment of the terms of a debt instrument or an actual exchange of an existing debt instrument for a new debt instrument, will be treated as an exchange of the existing debt instrument for a new debt instrument for United States federal income tax purposes. A modification will be generally considered “significant” if, based on all facts and circumstances, the legal rights or obligations that are altered and the degree to which they are altered are economically significant.

Whether the exchange of 2036 Notes for 2041 Notes will be treated as a “significant modification” of the terms of the 2036 Notes is unclear, because there is no authority directly on point that interprets what constitutes an economically “significant modification.” We intend to take the position for United States federal income tax purposes that the exchange of 2036 Notes for 2041 Notes constitutes a “significant modification” of the terms of 2036 Notes and, thus, that the 2041 Notes (with their modified terms) should be treated as newly issued debt. By participating in the Exchange Offer, each holder will be deemed to have agreed pursuant to the indenture governing the 2041 Notes to treat the exchange of the 2036 Notes for the 2041 Notes as resulting in a “significant modification” of the terms of the 2036 Notes, and except as otherwise noted, the remainder of this discussion assumes such treatment.

The tax consequences of the exchange will depend on whether the notes are considered “securities” for United States federal income tax purposes. Whether a debt instrument constitutes a security depends on a variety of factors, including the term of the instrument. As a general rule, a debt instrument with a term of five years or less will not be considered a security, and a debt instrument with a term of ten years or more will be considered a security. Whether a debt instrument with a term between five and ten years is a security is unclear. There is no direct authority that clearly addresses the impact of the repurchase and redemption features included in both the 2036 and 2041 Notes on considering the term of the notes for these purposes. If both

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the 2036 Notes and the 2041 Notes are considered securities, the exchange would be treated as a non-taxable recapitalization. We intend to treat, and by participating in the Exchange Offer, each holder will be deemed to have agreed to treat, the exchange of the 2041 Notes for the 2036 Notes as a recapitalization, and, except as otherwise noted, the remainder of this discussion assumes such exchange will be treated as a recapitalization.

The application of the recapitalization provisions to debt instruments subject to the CPDI Regulations is unclear. Nevertheless, we believe that a United States holder should not recognize taxable gain or loss as a result of the exchange, except that such holder will recognize gain (but not loss) in an amount equal to the lesser of: (i) the excess, if any, of the issue price (as described below) of the 2041 Notes received and any cash (including cash paid in respect of accrued interest) received in the exchange over such holder’s adjusted tax basis in its 2036 Notes, and (ii) any cash (including cash paid in respect of accrued interest) received in the exchange, plus, if the principal amount of the 2041 Notes received exceeds the principal amount of the 2036 Notes surrendered in exchange therefor, the fair market value of such excess principal amount of the 2041 Notes. For purposes of determining the amount of gain recognized as a result of the exchange, the rules regarding the determination of the principal amount of the 2041 Notes and 2036 Notes are uncertain. Holders should consult their tax advisors regarding the determination, for purposes of determining the amount (if any) of gain holders would recognize as a result of the exchange, of the principal amount of the 2041 Notes received in the exchange offer and 2036 Notes surrendered in exchange therefor. Any gain recognized on the exchange will be treated as ordinary interest income. A United States holder’s initial tax basis in a 2041 Note received in the exchange should equal such holder’s adjusted tax basis in the 2036 Notes exchanged, increased by the amount of any gain recognized on the exchange and reduced by any cash (including cash paid in respect of accrued interest) received. A United States holder’s holding period for the 2041 Notes should include such holder’s holding period in the 2036 Notes exchanged therefor. Any gain recognized by a Non-United States holder on the exchange of 2036 Notes for 2041 Notes generally will be treated as ordinary interest income and will not be subject to United States federal income tax, provided such gain satisfies requirements for exemption similar to those described with respect to gain on the 2041 Notes under “—Non-United States holders—Consequences of ownership and disposition of the 2041 Notes.”

Because holders have the right to require us to redeem, and we may redeem at our option, the notes at certain times prior to the notes’ maturity, it is possible that either the 2036 Notes or the 2041 Notes would not be viewed as constituting securities for United States federal income tax purposes. If the exchange results in a “significant modification” of the 2036 Notes and either the 2036 Notes or the 2041 Notes are not considered securities for United States federal income tax purposes, then the exchange would be a taxable transaction. In that case, holders of the notes would recognize gain or loss (subject to possible application of the wash sale rules) equal to the difference between the amount realized and the adjusted tax basis in their 2036 Notes. The amount realized would equal the issue price of the 2041 Notes, plus any cash received in the Exchange Offer. Any gain generally would be treated as ordinary income. Any loss would be treated as ordinary loss to the extent of the excess of previous interest inclusions over the total negative adjustments previously taken into account as ordinary loss with respect to the 2036 Notes; the balance would be treated as capital loss. Each holder’s holding period in the 2041 Notes would begin the day after the exchange, and each holder’s initial tax basis in the 2041 Notes generally would equal the issue price of the 2041 Notes (as described below).

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If the 2041 Notes are considered to be traded on an established securities market, the issue price of the 2041 Notes will equal the fair market value of the 2041 Notes at the time such notes are issued. If the 2036 Notes, but not the 2041 Notes, are considered to be traded on an established securities market, the issue price of the 2041 Notes will equal the fair market value of the 2036 Notes at the time the 2041 Notes are issued. In either case, the 2041 Notes will have a new comparable yield and projected payment schedule, described below. Alternatively, if both the 2036 Notes and 2041 Notes were not considered to be traded on an established securities market, then the 2041 Notes would be subject to a different set of rules applicable to certain contingent payment debt instruments that might have a material effect on the amount, timing and character of the income, gain or loss recognized by a holder with respect to a 2041 Note. We intend to treat the 2036 Notes, and possibly the 2041 Notes, as traded on an established securities market, and the issue price of the 2041 Notes as equal to the fair market value of the 2041 Notes at the time such notes were issued, and the remainder of this discussion assumes such treatment.

The IRS may not agree that the exchange of 2036 Notes for 2041 Notes results in a “significant modification” of the terms of the 2036 Notes. In such event, the holder will continue to have the same tax basis, holding period, projected payment schedule and comparable yield in their 2041 Notes as they had in their 2036 Notes prior to the Exchange Offer.

Non-exchanging holders

Holders who do not exchange their 2036 Notes for 2041 Notes in the Exchange Offer will not recognize any gain or loss for United States federal income tax purposes as a result of the Exchange Offer. Non-exchanging holders will continue to have the same tax basis, holding period, projected payment schedule and comparable yield in their 2036 Notes as they had prior to the Exchange Offer, and the treatment of such 2036 Notes will not otherwise be affected by the Exchange Offer.

United States holders—consequences of ownership and disposition of 2041 Notes

The following discussion describes the material United States federal income tax consequences to United States holders of owning and disposing of the 2041 Notes. It is not a complete analysis of all the potential tax consequences or considerations, and holders are urged to consult their tax advisors.

Accrual of Interest

As discussed more fully below, the effect of the CPDI Regulations will be to:

• require you, regardless of your usual method of tax accounting, to use the accrual method with respect to the 2041 Notes;

• require you to accrue and include in taxable income each year original issue discount at the comparable yield set forth below, even though the amount of actual payments of interest received may be less than the amount of such accrued original issue discount; and

• generally require you to recognize ordinary income, rather than capital gain or, to some extent, ordinary loss rather than capital loss, on the sale, taxable exchange, repurchase or redemption of the notes.

Under the CPDI Regulations, noncontingent payments on the 2041 Notes (i.e., stated interest payments) will not be reported separately as taxable income, but will be taken into account

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under such regulations. Subject to the adjustments described below under “—Adjustments to interest accruals on the notes” that apply to holders whose initial tax basis in the 2041 Notes is different than the issue price of the 2041 Notes, you will be required to accrue an amount of ordinary interest income as original issue discount for United States federal income tax purposes, for each accrual period prior to and including the maturity date of the 2041 Note that equals:

• the product of (i) the adjusted issue price of the 2041 Notes as of the beginning of the accrual period and (ii) the comparable yield (determined as set forth below) of the 2041 Notes, adjusted for the length of the accrual period;

• divided by the number of days in the accrual period; and

• multiplied by the number of days during the accrual period that you held the 2041 Notes.

The adjusted issue price of a 2041 Note is equal to the issue price of the 2041 Note, increased by any original issue discount previously accrued with respect to the 2041 Note, determined without regard to any adjustments to original issue discount accruals described below, and decreased by the amount of any noncontingent payments and the projected amount of any contingent payments previously scheduled to be made on the 2041 Note. We have estimated the comparable yield for the 2041 Notes to be 14%, compounded semi-annually. This estimate may differ from the comparable yield we determine as of the issue date of the 2041 Notes.

We will prepare a projected payment schedule for the 2041 Notes, solely for United States federal income tax purposes that estimates the amount and timing of contingent interest payments and a payment upon maturity on the 2041 Notes taking into account the fair market value of the common stock and the amount of any cash that might be paid upon a conversion of the 2041 Notes. Under the indenture governing the 2041 Notes, holders agree to be bound by our determination of the comparable yield for the 2041 Notes and the projected payment schedule that we prepare for the 2041 Notes. For United States federal income tax purposes, you are required to use the comparable yield and the schedule of projected payments in determining your original issue discount accruals, and the adjustments thereto described below, in respect of the 2041 Notes. You may obtain the comparable yield and the projected payment schedule by submitting a written request to us at American Medical Systems Holdings, Inc., 10700 Bren Road West, Minnetonka, Minnesota 55343, Attention: Treasurer.

The comparable yield and the projected payment schedule are not provided for any purpose other than the determination of your original issue discount accruals and adjustments thereof in respect of the 2041 Notes for United States federal income tax purposes and do not constitute a projection or representation regarding the actual amount of the payments on a 2041 Note.

Adjustments to interest accruals on the 2041 Notes

If the actual contingent payments made on the 2041 Notes differ from the projected contingent payments, adjustments will be made to account for the difference. In addition to the interest accrual discussed above, if you receive actual payments with respect to 2041 Notes for a taxable year that in the aggregate exceed the total amount of projected payments for the taxable year, you will incur a “positive adjustment” and be required to include additional original issue discount in income equal to the amount of the excess of actual payments over projected payments. For these purposes, payments in a taxable year include the fair market value of property received in that year, including the fair market value of any common stock received upon a conversion of the 2041 Notes. If you receive actual payments in a taxable year that in the

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aggregate are less than the amount of projected payments for the taxable year, you will incur a “negative adjustment” equal to the amount of such deficit. A negative adjustment will be treated as follows:

• first, a negative adjustment will reduce the amount of original issue discount required to be accrued in the current year;

• second, any negative adjustment that exceeds the amount of original issue discount accrued in the current year will be treated as an ordinary loss to the extent of your total prior original issue discount inclusions with respect to the 2041 Notes, reduced to the extent such prior original issue discount was offset by prior negative adjustments on the 2041 Notes; and

• third, any excess negative adjustments will be carried forward as a negative adjustment to reduce future original issue discount or to reduce the amount realized on a sale, taxable exchange, conversion or redemption of the 2041 Notes.

A negative adjustment is not subject to the two percent floor limitation on miscellaneous itemized deductions. It is unclear whether any of your prior inclusions on the 2036 Notes would be treated as prior inclusions on the 2041 Notes for this purpose.

Special rules will apply if all of the remaining contingent payments become contemporaneously substantially fixed. For this purpose, the contingent payments will be treated as becoming fixed if the likelihood of the contingencies occurring, or not occurring, becomes remote, or the amount of the potential contingent payments is incidental. You are urged to consult your tax advisor concerning the application of these special rules.

If your tax basis in the 2041 Notes immediately after the exchange differs from the issue price of the 2041 Notes, you must, upon acquiring the 2041 Notes, reasonably allocate the difference between your tax basis and the issue price to daily portions of interest or projected payments over the remaining term of the 2041 Note. In this regard, since we are treating the 2041 Notes as new debt issued in exchange for the 2036 Notes at a new issue price, your initial tax basis in the 2041 Notes is likely not the same as their issue price, and accordingly, your 2041 Notes will likely have either a discount or premium that is subject to an allocation. You should consult your tax advisor regarding these allocations.

If your initial tax basis in your 2041 Notes is greater than the issue price of the 2041 Notes, the amount of the difference allocated to a daily portion of interest or to a projected payment is treated as a negative adjustment on the date the daily portion accrues or the payment is made. On the date of the adjustment, your adjusted basis in your 2041 Note is reduced by the amount treated as a negative adjustment.

If your initial tax basis in your 2041 Notes is less than the issue price of the 2041 Notes, the amount of the difference allocated to a daily portion of interest or to a projected payment is treated as a positive adjustment on the date the daily portion accrues or the payment is made. On the date of the adjustment, your adjusted basis in your 2041 Note is increased by the amount treated as a positive adjustment.

Sale, taxable exchange, conversion or redemption of the 2041 Notes

Upon the sale, taxable exchange, repurchase or redemption of a 2041 Note, or upon the conversion of a 2041 Note for cash or a combination of cash and common stock, you generally

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will recognize gain or loss equal to the difference between the amount realized and your adjusted tax basis in the 2041 Note. As a holder of a 2041 Note, you agree that, under the CPDI Regulations, the amount realized will include the fair market value of any common stock that you receive on the conversion as a contingent payment. Gain on a 2041 Note generally will be treated as interest income. Loss from the disposition of a 2041 Note will be treated as ordinary loss to the extent of your prior net original issue discount inclusions with respect to the 2041 Note. It is unclear whether any of your prior inclusions on the 2036 Notes would be treated as prior inclusions on the 2041 Notes for this purpose. Any loss in excess of prior net original issue discount inclusions will be treated as capital loss. Capital loss is treated as long-term if the holding period is longer than one year. The deductibility of capital losses is subject to limitations.

Your initial tax basis in a 2041 Note will be equal to your adjusted tax basis in the 2036 Notes exchanged, increased by the amount of any gain recognized on the exchange and reduced by any cash (including cash paid in respect of accrued interest) received. Your adjusted tax basis in a 2041 Note generally will be equal to your initial tax basis in the 2041 Note, increased by original issue discount (determined without regard to any adjustments to interest accruals described above, other than any positive or negative adjustments to reflect discount (which increase basis) or premium (which decrease basis), respectively, to the issue price, if any), and reduced by the amount of any noncontingent payments and the projected amount of any contingent payments previously scheduled to be made on the 2041 Note (without regard to the actual amount paid).

Under the CPDI Regulations, your tax basis in our common stock received upon conversion of a 2041 Note will equal the then current fair market value of such common stock. Your holding period for our common stock will commence on the day after receipt.

Constructive dividends

Holders of convertible debt instruments such as the 2041 Notes may, in certain circumstances, be deemed to have received distributions of stock if the conversion price of such instruments is adjusted. However, adjustments to the conversion price made pursuant to a bona fide reasonable adjustment formula which has the effect of preventing the dilution of the interest of the holders of the debt instruments will generally not be deemed to result in a constructive distribution of stock. Certain of the possible adjustments provided in the 2041 Notes (including, without limitation, adjustments in respect of taxable dividends to our stockholders) would not qualify as being made pursuant to a bona fide reasonable adjustment formula. The adjustment to the conversion rate of the 2041 Notes converted in connection with a designated event, as described under “Description of the 2041 Notes—Conversion rights—Adjustment to shares delivered upon conversion upon a make-whole fundamental change” above, also may be treated as a taxable stock distribution. If adjustments are made that are treated as taxable stock distributions, you will be deemed to have received constructive distributions generally includible in your income as if they were dividends paid on stock, even though you have not received any cash or property as a result of such adjustments. In certain circumstances, the failure to provide for such an adjustment may also result in a constructive distribution to you. It is not clear whether a constructive dividend deemed paid to a United States holder would be eligible for the preferential rates of United States federal income tax applicable in respect of certain dividends received. It is also unclear whether corporate holders would be entitled to claim the dividends received deduction with respect to any such constructive dividends. Because a constructive dividend deemed received by a United States holder would not give rise to any cash from which any applicable withholding tax could be satisfied, if we pay backup withholding on behalf of a

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United States holder (because such United States holder failed to establish an exemption from backup withholding), we may, at our option, set off any such payment against payments of cash and common stock payable on the 2041 Notes.

Possible effect of a change of control

In certain situations, we may provide for the conversion of the 2041 Notes into shares of an acquirer or an acquirer could assume the 2041 Notes. Depending on the circumstances, such adjustments or change in the obligor could result in a deemed taxable exchange to a holder and the modified note could be treated as newly issued at that time, potentially resulting in the recognition of taxable gain or loss.

Non-United States holders—consequences of ownership and disposition of 2041 Notes

Payments on the 2041 Notes made to a Non-United States holder, including a payment in common stock and cash pursuant to a conversion, payments of contingent interest, and any gain realized on a sale, taxable exchange, repurchase, redemption or conversion of the 2041 Notes, will be exempt from United States income or withholding tax provided that: (i) such Non-United States holder does not own, actually, indirectly or constructively, 10% or more of the total combined voting power of all classes of our stock entitled to vote, and is not a controlled foreign corporation related, directly or indirectly, to us through stock ownership; (ii) the statement requirement set forth in section 871(h) or section 881(c) of the Code has been fulfilled with respect to the beneficial owner, as discussed below; (iii) such payments and gain are not effectively connected with the conduct by such Non-United States holder of a trade or business in the United States (and, generally, if an income tax treaty applies, the payments and gains are not attributable to a U.S. permanent establishment maintained by the Non-United States holder); (iv) our common stock continues to be actively traded within the meaning of section 871(h)(4)(C)(v)(I) of the Code (which, for these purposes and subject to certain exceptions, includes trading on The NASDAQ Global Market); and (v) we are not a “United States real property holding corporation.” We believe that we are not and do not anticipate becoming a “United States real property holding corporation.”

If a Non-United States holder were deemed to have received a constructive dividend (see “—Constructive dividends” above), the Non-United States holder will generally be subject to United States federal withholding tax at a 30% rate, subject to a reduction by an applicable treaty, on the taxable amount of such dividend. Because a constructive dividend deemed received by a Non-United States holder would not give rise to any cash from which any applicable withholding tax could be satisfied, if we pay withholding taxes on behalf of a Non-United States holder, we may, at our option, set off any such payment against payments of cash and common stock payable on the 2041 Notes.

The statement requirement referred to in clause (ii) of the second preceding paragraph will be fulfilled if the beneficial owner of a 2041 Note certifies on a properly executed IRS Form W-8BEN (or successor form), under penalties of perjury, that it is not a United States person and provides its name and address or otherwise satisfies applicable documentation requirements. If a Non-United States holder is eligible for the benefits of an applicable treaty, a Non-United States holder might also be able to obtain an exemption from, or a reduction in, the withholding taxes discussed in the preceding paragraphs by providing a properly executed IRS Form W-8BEN (or successor form) claiming the benefits of such treaty. If a Non-United States holder of the 2041

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Notes is engaged in a trade or business in the United States, and if income and gain with respect to the 2041 Notes is effectively connected with the conduct of such trade or business (and, if an income tax treaty applies and the income and gain is attributable to a U.S. permanent establishment maintained by the Non-United States holder), the Non-United States holder, although exempt from the withholding taxes discussed in the preceding paragraphs, will generally be subject to regular United States federal income tax on interest, constructive dividends and on any gain realized on the sale, taxable exchange, repurchase, redemption or conversion of the 2041 Notes in the same manner as if it were a United States holder. In lieu of an IRS Form W-8BEN (or successor form), such a Non-United States holder would be required to provide to the withholding agent a properly executed IRS Form W-8ECI (or successor form) in order to claim an exemption from withholding tax. In addition, if such a Non-United States holder is a foreign corporation, such holder may be subject to a branch profits tax equal to 30% (or such lower rate provided by an applicable treaty) of its effectively connected earnings and profits for the taxable year, subject to certain adjustments.

Backup withholding and information reporting

Payments of principal, premium, if any, and interest (including original issue discount and a payment in common stock pursuant to a conversion of the 2041 Notes) on, and the proceeds of dispositions of, the 2041 Notes may be subject to United States federal backup withholding if the United States holder thereof fails to supply an accurate taxpayer identification number or otherwise fails to comply with applicable United States certification requirements. In addition, a United States holder may also be subject to information reporting with respect to income on the 2041 Notes unless such holder provides proof of an applicable exemption from the information reporting rules. Information returns will be filed with the IRS in connection with payments on the 2041 Notes held by Non-United States holders. A Non-United States holder may be subject to United States backup withholding on payments on the 2041 Notes and the proceeds from a sale or other disposition of the 2041 Notes, and information returns may be filed with the IRS in connection with such proceeds, unless the Non-United States holder complies with certification procedures to establish that it is not a United States person. The certification procedures required to claim the exemption from withholding tax described above will satisfy the certification requirements necessary to avoid backup withholding as well. Any amounts so withheld will be allowed as a credit against a holder’s United States federal income tax liability and may entitle a holder to a refund, provided the required information is timely furnished to the IRS.

Interests of directors and executive officers

To our knowledge, none of our directors, executive officers or controlling persons, or any of their affiliates, beneficially own any 2036 Notes.

The Dealer Managers

The Sole Lead Dealer Manager for the Exchange Offer is J.P. Morgan Securities Inc. and the Co-Dealer Manager is Goldman, Sachs & Co. The address and telephone number for the Sole Lead Dealer Manager is set forth on the back cover of this prospectus. The Dealer Managers for the Exchange Offer will perform services customarily provided by investment banking firms acting as Dealer Managers of exchange offers of a like nature, including, but not limited to, soliciting tenders of the 2036 Notes pursuant to the Exchange Offer and communicating generally regarding the Exchange Offer with brokers, dealers, commercial banks and trust companies and

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other persons, including the holders of the 2036 Notes. The Dealer Managers will receive customary compensation for such services. The Dealer Managers have agreed to reimburse us for certain out-of-pocket expenses incurred in connection with the Exchange Offer. We have also agreed to indemnify the Dealer Managers against certain claims and liabilities, including those that may arise under the U.S. federal securities laws.

The Dealer Managers and their respective affiliates have rendered, and the Dealer Managers may in the future render, various investment banking, lending and commercial banking services and other advisory services to us and our subsidiaries. The Dealer Managers have received, and the Dealer Managers may in the future receive, customary compensation from us and our subsidiaries for such services.

The Dealer Managers and their respective affiliates may from time to time hold 2036 Notes, shares of our common stock and other securities of ours in their proprietary accounts, which holdings may be substantial. The Dealer Managers and their respective affiliates currently hold 2036 Notes, and, to the extent they own 2036 Notes in these accounts at the time of the Exchange Offer, the Dealer Managers and their respective affiliates may tender such 2036 Notes for exchange pursuant to the Exchange Offer. During the course of the Exchange Offer and subject to applicable law, the Dealer Managers and their respective affiliates may trade 2036 Notes and shares of our common stock or effect transactions in other securities of ours for their own account or for the accounts of their customers. As a result, the Dealer Managers and their respective affiliates may hold a long or short position in the 2036 Notes, our common stock or other of our securities.

The exchange agent

We have appointed U.S. Bank National Association as the Exchange Agent for the Exchange Offer. We have agreed to pay the Exchange Agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection with the Exchange Offer. We have also agreed to indemnify the Exchange Agent against certain claims and liabilities, including those that may arise under the U.S. federal securities laws. All completed letters of transmittal and requests for assistance in connection with the tender of your 2036 Notes, should be directed to the Exchange Agent as set forth on the back cover of this prospectus.

DELIVERY OF A LETTER OF TRANSMITTAL OR TRANSMISSION OF INSTRUCTIONS TO AN ADDRESS OR FACSIMILE NUMBER OTHER THAN THAT OF THE EXCHANGE AGENT AS SET FORTH ON THE BACK COVER OF THIS PROSPECTUS IS NOT A VALID DELIVERY.

The information agent

The Information Agent for the Exchange Offer is D.F. King & Co., Inc. Its address and telephone number are set forth on the back cover of this prospectus. We have agreed to pay the Information Agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection with the Exchange Offer. We have also agreed to indemnify the Information Agent against certain claims and liabilities, including those that may arise under the U.S. federal securities laws. Any requests for assistance in connection with the Exchange Offer or for additional copies of this prospectus, the related letter of transmittal and other materials related to this Exchange Offer, including the form of notice of guaranteed delivery and the form of notice of withdrawal, should be directed to the Information Agent at the addresses set forth on the back cover of this prospectus.

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Legal matters

The validity of the 2041 Notes issuable in the Exchange Offer will be passed upon for us by Latham & Watkins LLP, Costa Mesa, California. The validity of the 2041 Notes issuable in the Exchange Offer will be passed upon for the Dealer Managers by Davis Polk & Wardwell LLP, Menlo Park, California.

Experts

The consolidated financial statements and schedule of American Medical Systems Holdings, Inc. appearing in American Medical Systems Holdings, Inc.’s Annual Report on Form 10-K for the year

ended January 3, 2009, as revised by a Current Report on Form 8-K dated August 4, 2009, and the effectiveness of American Medical Systems Holdings, Inc.’s internal control over financial reporting appearing in American Medical Systems Holdings, Inc.’s Annual Report on Form 10-K for the year ended January 3, 2009 have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements and schedule are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.

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The Exchange Agent for the Exchange Offer is:

U.S. Bank National Association

By Overnight Delivery or Mail (Registered or Certified Mail Recommended): U. S. Bank National Association 60 Livingston Ave. St. Paul, Minnesota 55107 Attn: Specialized Finance	By Facsimile Transmission: (651) 495-8097 Confirmation number: (800) 934-6802
By Hand: U. S. Bank National Association 60 Livingston Avenue 1st Floor—Bond Drop Window St. Paul, MN 55107

The Information Agent for the Exchange Offer is:

D.F. King & Co., Inc.

48 Wall Street, 22^nd Floor

New York, NY 10005

Banks and Brokers Call Collect: (212) 269-5550

All Others Please Call Toll-Free: (800) 549-6697

Additional copies of this prospectus, the letter of transmittal or other tender offer materials may be obtained from the Information Agent and will be furnished at our expense. Questions and requests for assistance regarding the procedures to be followed for tendering your 2036 Notes should be directed to the Information Agent. For all other questions, please contact the Sole Lead Dealer Manager.

The Sole Lead Dealer Manager for the Exchange Offer is:

J.P. Morgan Securities Inc.

Convertible Bond Desk

383 Madison Avenue, Floor 5

New York, New York 10179

Toll-Free: (800) 261-5767

Collect: (212) 622-2781

The Co-Dealer Manager for the Exchange Offer is:

Goldman, Sachs & Co.

Part II

Information not required in document

Item 20. Indemnification of officers and directors

Section 102(b)(7) of the Delaware General Corporation Law (the “DGCL”) permits a corporation, in its certificate of incorporation, to limit or eliminate, subject to certain statutory limitations, the liability of directors to the corporation or its stockholders for monetary damages for breaches of fiduciary duty, except for liability (a) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under Section 174 of the DGCL or (d) for any transaction from which the director derived an improper personal benefit. Our Second Amended and Restated Certificate of Incorporation provides, among other things, that the personal liability of our directors is so eliminated.

Under Section 145 of the DGCL, a corporation has the power to indemnify directors and officers under certain prescribed circumstances and subject to certain limitations against certain costs and expenses, including attorneys’ fees actually and reasonably incurred in connection with any action, suit or proceeding, whether civil, criminal, administrative or investigative, to which any of them is a party by reason of his being a director or officer of the corporation if it is determined that he acted in accordance with the applicable standard of conduct set forth in such statutory provision.

Our Second Amended and Restated Certificate of Incorporation provides that we will, and Delaware law permits us to, under certain situations, indemnify any of our directors, officers, employees or agents made or threatened to be made a party to a proceeding, by reason of the former or present official capacity of the person, against judgments, penalties, fines, settlements and reasonable expenses, including attorney’s fees, incurred by the person in connection with the proceeding if certain statutory standards are met. Any of these persons is also entitled, subject to certain limitations, to payment or reimbursement of reasonable expenses in advance of the final disposition of the proceeding upon board approval. A proceeding means a threatened, pending or completed civil, criminal, administrative, arbitration or investigative proceeding, including one by, or in the right of us. Our bylaws also provide that we will indemnify our directors or officers, and any employee, to the fullest extent under Delaware law. Reference is made to Section 145 of the Delaware General Corporation Law, bylaws and our Second Amended and Restated Certificate of Incorporation.

We maintain an insurance policy providing for indemnification of our officers, directors and certain other persons against liabilities and expenses incurred by any of them in certain stated proceedings and under certain stated conditions.

We have entered into indemnification agreements with our directors, executive officers and certain other employees, and change in control agreements with our executive officers with indemnification obligations after a change in control. Our indemnification agreements provide that we will, under certain circumstances, and subject to certain limitations, indemnify our directors and officers who are made or are threatened to be made a party to a suit or proceeding, by reason of their official capacity with us, against losses, liabilities, damages, judgments, penalties, fines, settlements and reasonable expenses. Our change in control agreements provide that we will indemnify our officers to the same extent as the indemnification agreements for any matter that arises prior to the change in control, subject to certain time restrictions. In addition to indemnification provided for in our Second Amended and Restated Certificate of Incorporation and bylaws, we intend to enter into indemnification agreements with any new directors and indemnification and change in control agreements with any new executive officers in the future.

Item 21. Exhibits and financial statement schedules

(a) Exhibits. The following exhibits are filed as part of this Registration Statement:

Exhibit No.	Description of Exhibit	Prior Filing
1.1	Form Dealer Manager Agreement by and among American Medical Systems Holdings, Inc., the Guarantors (as defined therein) and J.P.Morgan Securities Inc., as Dealer Manager.	Filed herewith
3.1	Second Amended and Restated Certificate of Incorporation of the Company.	Incorporated by reference to Exhibit 3.1 of the Company’s Form S-3 filed on June 19, 2006 (File No. 333-135135).
3.2	Bylaws, as amended, of the Company.	Incorporated by reference to Exhibit 3.2 of the Company’s Form 10-K for the Fiscal Year Ended January 3, 2004 (File No. 000-30733).
4.9	Indenture, dated as of June 27, 2006, between American Medical Systems Holdings, Inc., the Notes Guarantors (as defined therein), and U.S. Bank National Association, as trustee.	Incorporated by reference to Exhibit 4.1 of the Company’s Form 8-K filed on June 28, 2006 (File No. 000-30733).
4.10	Form of 3 1/4% Convertible Senior Subordinated Note.	Incorporated by reference to Exhibit 4.2 of the Company’s Form 8-K filed on June 28, 2006 (File No. 000-30733).
4.11	First Supplemental Indenture, dated as of September 6, 2006, by and between Laserscope and U.S. Bank National Association, as trustee.	Incorporated by reference to Exhibit 4.1 of the Company’s Form 8-K filed on September 8, 2006 (File No. 000-30733).
4.12	Guarantee, dated as of September 6, 2006, made by Laserscope in favor of U.S. Bank National Association, as trustee.	Incorporated by reference to Exhibit 4.2 of the Company’s Form 8-K filed on September 8, 2006 (File No. 000-30733)
4.13	Form of Indenture by and among American Medical Systems Holdings, Inc., the Subsidiary Guarantors (as defined therein) and U.S. Bank National Association, as Trustee, governing 2041 Notes.	Filed herewith
4.14	Form of 3.75% Convertible Senior Subordinated Notes due 2041.	Included in Exhibit 4.13
5.1	Opinion of Latham & Watkins LLP.	Filed herewith
8.1	Tax opinion of Latham & Watkins LLP.	Filed herewith
12.1	Statement re computation of ratios.	Filed herewith
23.1	Consent of Ernst & Young LLP.	Filed herewith
23.2	Consent of Latham & Watkins LLP.	Included in Exhibit 5.1
23.3	Consent of Latham & Watkins LLP.	Included in Exhibit 8.1
24.1	Powers of Attorney.	Included on signature page

Exhibit No.	Description of Exhibit	Prior Filing
25.1	Form T-1 of U.S. Bank National Association, under the Trust Indenture Act of 1939.	Filed herewith
99.1	Form of Letter of Transmittal.	Filed herewith
99.2	Form of Notice of Guaranteed Delivery.	Filed herewith
99.3	Form of Notice of Withdrawal.	Filed herewith

The registrants hereby agree to furnish supplementally to the SEC, upon request, a copy of any omitted schedule to any of the agreements contained herein.

(b) Financial Statement Schedules. Incorporated herein by reference to Item 8 of the Company’s Annual Report on Form 10-K for the Year Ended January 3, 2009.

Item 22. Undertakings

The undersigned registrants hereby undertake:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(a) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(b) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(c) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; and

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included

in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(5) That, for the purpose of determining liability of the registrants under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrants undertake that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrants will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(a) Any preliminary prospectus or prospectus of the undersigned registrants relating to the offering required to be filed pursuant to Rule 424;

(b) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrants or used or referred to by the undersigned registrants;

(c) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrants or their securities provided by or on behalf of the undersigned registrants; and

(d) Any other communication that is an offer in the offering made by the undersigned registrants to the purchaser.

The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, each filing of American Medical Systems Holdings, Inc.’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, each registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form,

within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

The undersigned registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

Signatures

Pursuant to the requirements of the Securities Act of 1933, the Registrants have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the City of Minnetonka, Minnesota, on August 14, 2009.

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.
By:	/s/    ANTHONY P. BIHL, III
	Name: Anthony P. Bihl, III
	Title: President and Chief Executive Officer

Power of attorney

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Anthony P. Bihl, III and Mark A. Heggestad and each of them, each of whom may act without joinder of the other, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all pre- and post-effective amendments to this Registration Statement or any registration statement for the same offering that is to be effective upon filing pursuant to 462(b) under the Securities Act, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and each of them, or the substitute or substitutes of any or all of them, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in their capacities with American Medical Systems Holdings, Inc., and on the dates indicated.

Signature	Title	Date
/s/    ANTHONY P. BIHL, III Anthony P. Bihl, III	Director, President and Chief Executive Officer (Principal Executive Officer)	August 14, 2009
/s/    MARK A. HEGGESTAD Mark A. Heggestad	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	August 14, 2009
/s/    RICHARD B. EMMITT Richard B. Emmitt	Director	August 14, 2009
/s/    ALBERT JAY GRAF Albert Jay Graf	Director	August 14, 2009
/s/    JANE E. KIERNAN Jane E. Kiernan	Director	August 14, 2009
/s/    ROBERT MCLELLAN, M.D. Robert McLellan, M.D.	Director	August 14, 2009
/s/    CHRISTOPHER H. PORTER, PH.D. Christopher H. Porter, Ph.D.	Director	August 14, 2009
/s/    D. VERNE SHARMA D. Verne Sharma	Director	August 14, 2009
/s/    THOMAS E. TIMBIE Thomas E. Timbie	Director	August 14, 2009

Signatures

Pursuant to the requirements of the Securities Act of 1933, as amended, American Medical Systems, Inc. certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, Minnesota, on August 14, 2009.

AMERICAN MEDICAL SYSTEMS, INC.
By:	/s/    ANTHONY P. BIHL, III
	Name: Anthony P. Bihl, III
	Title: President and Chief Executive Officer

Power of attorney

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Anthony P. Bihl, III and Mark A. Heggestad and each of them, each of whom may act without joinder of the other, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all pre- and post-effective amendments to this Registration Statement or any registration statement for the same offering that is to be effective upon filing pursuant to 462(b) under the Securities Act, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and each of them, or the substitute or substitutes of any or all of them, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in their capacities with American Medical Systems, Inc., and on the dates indicated.

Signature	Title	Date
/s/    ANTHONY P. BIHL, III Anthony P. Bihl, III	Director, President and Chief Executive Officer	August 14, 2009
/s/    MARK A. HEGGESTAD Mark A. Heggestad	Director, Executive Vice President and Chief Financial Officer	August 14, 2009

Signatures

Pursuant to the requirements of the Securities Act of 1933, as amended, AMS Sales Corporation certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, Minnesota, on August 14, 2009.

AMS SALES CORPORATION
By:	/s/    ANTHONY P. BIHL, III
	Name: Anthony P. Bihl, III
	Title: President and Chief Executive Officer

Power of attorney

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Anthony P. Bihl, III and Mark A. Heggestad and each of them, each of whom may act without joinder of the other, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all pre- and post-effective amendments to this Registration Statement or any registration statement for the same offering that is to be effective upon filing pursuant to 462(b) under the Securities Act, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and each of them, or the substitute or substitutes of any or all of them, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in their capacities with AMS Sales Corporation, and on the dates indicated.

Signature	Title	Date
/s/    ANTHONY P. BIHL Anthony P. Bihl, III	Director, President and Chief Executive Officer	August 14, 2009
/s/    MARK A. HEGGESTAD Mark A. Heggestad	Director, Executive Vice President and Chief Financial Officer	August 14, 2009

Signatures

Pursuant to the requirements of the Securities Act of 1933, as amended, AMS Research Corporation certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, Minnesota, on August 14, 2009.

AMS RESEARCH CORPORATION
By:	/s/    ANTHONY P. BIHL, III
	Name: Anthony P. Bihl, III
	Title: President and Chief Executive Officer

Power of attorney

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Anthony P. Bihl, III and Mark A. Heggestad and each of them, each of whom may act without joinder of the other, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all pre- and post-effective amendments to this Registration Statement or any registration statement for the same offering that is to be effective upon filing pursuant to 462(b) under the Securities Act, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and each of them, or the substitute or substitutes of any or all of them, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in their capacities with AMS Research Corporation, and on the dates indicated.

Signature	Title	Date
/s/    ANTHONY P. BIHL, III Anthony P. Bihl, III	Director, President and Chief Executive Officer	August 14, 2009
/s/    MARK A. HEGGESTAD Mark A. Heggestad	Director, Executive Vice President and Chief Financial Officer	August 14, 2009

Signatures

Pursuant to the requirements of the Securities Act of 1933, as amended, Laserscope certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, Minnesota, on August 14, 2009.

LASERSCOPE
By:	/s/    ANTHONY P. BIHL, III
	Name: Anthony P. Bihl, III
	Title: President and Chief Executive Officer

Power of attorney

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Anthony P. Bihl III and Mark A. Heggestad and each of them, each of whom may act without joinder of the other, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all pre- and post-effective amendments to this Registration Statement or any registration statement for the same offering that is to be effective upon filing pursuant to 462(b) under the Securities Act, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and each of them, or the substitute or substitutes of any or all of them, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in their capacities with Laserscope, and on the dates indicated.

Signature	Title	Date
/s/    ANTHONY P. BIHL, III Anthony P. Bihl, III	Director, President and Chief Executive Officer	August 14, 2009
/s/    MARK A. HEGGESTAD Mark A. Heggestad	Director, Executive Vice President and Chief Financial Officer	August 14, 2009

Exhibit index

Exhibit no.	Description of exhibit	Prior filing
1.1	Form Dealer Manager Agreement by and among American Medical Systems Holdings, Inc., the Guarantors (as defined therein) and J.P.Morgan Securities Inc., as Dealer Manager.	Filed herewith
3.1	Second Amended and Restated Certificate of Incorporation of the Company.	Incorporated by reference to Exhibit 3.1 of the Company’s Form S-3 filed on June 19, 2006 (File No. 333-135135).
3.2	Bylaws, as amended, of the Company.	Incorporated by reference to Exhibit 3.2 of the Company’s Form 10-K for the Fiscal Year Ended January 3, 2004 (File No. 000-30733).
4.9	Indenture, dated as of June 27, 2006, between American Medical Systems Holdings, Inc., the Notes Guarantors (as defined therein), and U.S. Bank National Association, as trustee.	Incorporated by reference to Exhibit 4.1 of the Company’s Form 8-K filed on June 28, 2006 (File No. 000-30733).
4.10	Form of 3 1/4% Convertible Senior Subordinated Note.	Incorporated by reference to Exhibit 4.2 of the Company’s Form 8-K filed on June 28, 2006 (File No. 000-30733).
4.11	First Supplemental Indenture, dated as of September 6, 2006, by and between Laserscope and U.S. Bank National Association, as trustee.	Incorporated by reference to Exhibit 4.1 of the Company’s Form 8-K filed on September 8, 2006 (File No. 000-30733).
4.12	Guarantee, dated as of September 6, 2006, made by Laserscope in favor of U.S. Bank National Association, as trustee.	Incorporated by reference to Exhibit 4.2 of the Company’s Form 8-K filed on September 8, 2006 (File No. 000-30733)
4.13	Form of Indenture by and among American Medical Systems Holdings, Inc., the Subsidiary Guarantors (as defined therein) and U.S. Bank National Association, as Trustee, governing 2041 Notes.	Filed herewith
4.14	Form of 3.75% Convertible Senior Subordinated Notes due 2041.	Included in Exhibit 4.13
5.1	Opinion of Latham & Watkins LLP.	Filed herewith
8.1	Tax opinion of Latham & Watkins LLP.	Filed herewith
12.1	Statement re computation of ratios.	Filed herewith
23.1	Consent of Ernst & Young LLP.	Filed herewith
23.2	Consent of Latham & Watkins LLP.	Included in Exhibit 5.1
23.3	Consent of Latham & Watkins LLP.	Included in Exhibit 8.1
24.1	Powers of Attorney.	Included on signature page

Exhibit no.	Description of exhibit	Prior filing
25.1	Form T-1 of U.S. Bank National Association, under the Trust Indenture Act of 1939.	Filed herewith
99.1	Form of Letter of Transmittal.	Filed herewith
99.2	Form of Notice of Guaranteed Delivery.	Filed herewith
99.3	Form of Notice of Withdrawal.	Filed herewith

The registrants hereby agree to furnish supplementally to the SEC, upon request, a copy of any omitted schedule to any of the agreements contained herein.

EX-1.1

Exhibit 1.1

DEALER MANAGER AGREEMENT

August 14, 2009

J.P. MORGAN SECURITIES INC.

    As Representative of the

    several Dealer Managers listed in

    Schedule I hereto

383 Madison Avenue

New York, New York 10179

Ladies and Gentlemen:

American Medical Systems Holdings, Inc., a Delaware corporation (the “Company”), plans to make an offer (such offer, as it may from time to time be amended and supplemented, the “Exchange Offer”) to exchange no less than $100,000,000 and up to $250,000,000, aggregate principal amount of the Company’s newly issued 3.75% Convertible Senior Subordinated Notes due 2041 (the “New Notes”) for an equal amount of its outstanding 3.25% Convertible Senior Subordinated Notes due 2036 (the “Old Notes”), issued in an original aggregate principal amount of $373,750,000, on the terms and subject to the conditions set forth in the Exchange Offer Materials referred to below.

The Old Notes were issued pursuant to an indenture dated as of June 27, 2006 among the Company, as issuer, American Medical Systems, Inc. (“AMS”), AMS Sales Corporation and AMS Research Corporation, as guarantors (collectively, the “Initial Guarantors”), and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the first supplemental indenture thereto dated as of September 6, 2006, between Laserscope, as an additional guarantor (“Laserscope” and together with the Initial Guarantors, each individually, a “Guarantor” and collectively, the “Guarantors”) and the Trustee. The Old Notes are fully and unconditionally guaranteed, jointly and severally, by the Guarantors on an unsecured senior subordinated basis (the “Old Guarantees”). The Old Notes and the related Old Guarantees are collectively referred to herein as the “Old Securities.”

The New Notes will be issued pursuant to an indenture (the “New Indenture”) to be entered into between the Company, the Guarantors and the Trustee, and will be fully and unconditionally guaranteed, jointly and severally, by the Guarantors on an unsecured senior subordinated basis (the “New Guarantees”). The New Notes and the related New Guarantees are collectively referred to herein as the “New Securities.”

The New Securities will be issued in exchange for Old Securities that are validly tendered and not validly withdrawn prior to the expiration date of the Exchange Offer (as extended from time to time, the “Expiration Date”) and are accepted pursuant to the terms of the Exchange Offer. The New Notes will be convertible into shares (the “Underlying Securities”) of common stock of the Company, par value $0.01 per share (the “Common Stock”).

Any reference in this letter to “you” or “your” refers to J.P. Morgan Securities Inc.

The Company and the Guarantors hereby confirm their agreement with the Dealer Manager concerning the Exchange Offer, as follows:

1. Appointment of Dealer Manager.

(a) The Company and the Guarantors hereby appoint and authorize the several dealer managers listed in Schedule I hereto (the “Dealer Managers” and each a “Dealer Manager”), for whom you are acting as representative (the “Representative”), to act as the dealer managers to the Company and the Guarantors in connection with the Exchange Offer. On the basis of the representations, warranties and agreements contained in this Agreement, the Dealer Managers hereby accept such appointment upon the terms and subject to the conditions set forth in this Agreement. As Dealer Managers, each Dealer Manager agrees, in accordance with its customary practice, to perform those services in connection with the Exchange Offer as are customarily performed by it in connection with exchange offers of like nature, including, but not limited to, soliciting tenders of Old Securities pursuant to the Exchange Offer and communicating generally regarding the Exchange Offer with brokers, dealers, commercial banks and trust companies and other persons, including holders of Old Securities.

(b) The Company and the Guarantors acknowledge and agree that, except as set forth in Section 9(b), neither of the Dealer Managers shall have any liability (in tort, contract, or otherwise) to the Company, any Guarantor, any of their respective affiliates, or any other person for any losses, claims, damages, liabilities, or expenses arising from any act or omission on the part of any broker or dealer in securities, bank or trust company, or any other person in connection with the Exchange Offer or arising from their engagement or services as Dealer Managers hereunder or otherwise in connection with the Exchange Offer, except for any such losses, claims, damages, liabilities, or expenses that are determined by a final and nonappealable judgment of a court of competent jurisdiction to have resulted from their gross negligence or willful misconduct. The Company and the Guarantors acknowledge and agree that each of the Dealer Managers shall act as an independent contractor, and nothing herein contained shall constitute the Dealer Managers as agents of the Company, the Guarantors or any other person in connection with the solicitation of any Old Securities pursuant to the Exchange Offer. None of the Company, any Guarantor or any of their respective affiliates shall be deemed to act as the Dealer Managers’ agents. The Company and the Guarantors acknowledge and agree that each of the Dealer Managers may perform its services as Dealer Managers hereunder through or in conjunction with its respective affiliates, and any such affiliates performing services hereunder shall be entitled to the benefits and subject to the terms and conditions of this Agreement. The Company and the Guarantors acknowledge and agree that the Dealer Managers shall not be deemed for any purpose, to act as a partner or joint venture of, or a member of a syndicate or group with, the Company, any Guarantor or any of their respective affiliates in connection with the Exchange Offer, any exchange of Old Securities for New Securities or otherwise.

(c) The Company and the Guarantors acknowledge and agree that each of the Dealer Managers is acting solely in the capacity of an arm’s length contractual counterparty

to the Company and the Guarantors with respect to the Exchange Offer (including in connection with determining the terms of the Exchange Offer and the New Securities) and not as a financial advisor or a fiduciary to, or an agent of, the Company, the Guarantors or any other person. Additionally, the Company and the Guarantors acknowledge and agree that neither of the Dealer Managers is advising the Company, the Guarantors or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Company and the Guarantors shall consult with their own advisors concerning such matters and shall be responsible for making their own independent investigation and appraisal of the terms of the New Securities and the Exchange Offer, and the Dealer Managers shall have no responsibility or liability to the Company or any Guarantor with respect thereto. Any review by either of the Dealer Managers of the Company, the Guarantors, the Exchange Offer, the New Securities or other matters relating to the Exchange Offer will be performed solely for the benefit of such Dealer Manager and shall not be on behalf of the Company or any Guarantor.

2. Exchange Offer Materials.

(a) On or prior to the date of the commencement of the Exchange Offer the Company will have prepared and filed with the Securities and Exchange Commission (the “Commission”), in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Securities Act”), a registration statement on Form S-4, including a prospectus, relating to the Exchange Offer, the New Securities and the Underlying Securities (such registration statement, as initially filed, including all documents incorporated therein by reference, the “Original Registration Statement”). Except where the context otherwise requires, as used herein, the term “Registration Statement” refers to the Original Registration Statement, as amended (if applicable), when it becomes effective, including the exhibits thereto and all documents filed as a part thereof or incorporated by reference therein; provided that if the Company files a registration statement with the Commission pursuant to Rule 462(b) under the Securities Act (the “Rule 462(b) Registration Statement”) after the Original Registration Statement, as amended (if applicable), that becomes effective, then after any such filing, all references to “Registration Statement” shall be deemed to include the Rule 462(b) Registration Statement. Any preliminary prospectus included in the Original Registration Statement or in any amendment thereto prior to the effectiveness of the Registration Statement (excluding the last amendment thereto prior to effectiveness), or any preliminary prospectus filed with the Commission pursuant to Rule 424(a) under the Securities Act, in each case, including all documents incorporated therein by reference, is referred to herein as a “Preliminary Prospectus.” The final prospectus, in the form filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act, including all documents incorporated by reference, is herein called the “Prospectus.”

On the date of commencement of the Exchange Offer (the “Commencement Date”), the Company will prepare and file with the Commission, in accordance with the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Exchange Act”), a Statement on Schedule TO with respect to the Exchange Offer (the “Schedule TO”) pursuant to Rule 13e-4 under the Exchange Act.

Any reference in this Agreement (i) to financial statements and schedules and other information “contained,” “included” or “stated” in the Registration Statement, any Preliminary Prospectus, the Prospectus or the Schedule TO (or other references of like import) refers to and includes all such financial statements and schedules and other information that is incorporated by reference in or otherwise deemed by the Securities Act to be a part of or included in the Registration Statement, such Preliminary Prospectus, the Prospectus or the Schedule TO, as the case may be, and (ii) to “amend,” “amendment” or “supplement” with respect to the Registration Statement, any Preliminary Prospectus, the Prospectus or the Schedule TO refers to and includes any documents filed after such date under the Exchange Act, that are incorporated by reference therein or otherwise deemed by the Securities Act or the Exchange Act, as applicable, to be a part of or included in the Registration Statement, such Preliminary Prospectus, the Prospectus or the Schedule TO, as the case may be.

(b) The Original Registration Statement, the Registration Statement, the Schedule TO, any Preliminary Prospectus, the Prospectus, the accompanying letter of transmittal (the “Letter of Transmittal”), any Issuer Free Writing Prospectus (as defined in Section 6(e) hereof), all press releases and any other documents, materials, or filings whatsoever relating to the Exchange Offer that the Company may use, prepare, file, approve, publicly disseminate, provide to registered or beneficial holders of the Old Securities or authorize for use in connection with the Exchange Offer, and in each case, including any amendment or supplement thereto and any documents or information incorporated by reference therein, are referred to herein collectively as the “Exchange Offer Materials” and individually as an “Exchange Offer Material.”

(c) The Company agrees to furnish each of the Dealer Managers with as many copies as it may reasonably request of the Exchange Offer Materials from the date hereof to and including the date of the issuance of the New Securities pursuant to the Exchange Offer (the “Settlement Date”). The Company authorizes each of the Dealer Managers and any other broker or dealer or any commercial bank or trust company to use the Exchange Offer Materials, without assuming responsibility for the accuracy, completeness or fairness of the statements contained therein except with respect to any information furnished in writing by the Dealer Managers as indicated in Section 11 hereof (such information, the “Dealer Manager Information”). The Company represents and agrees that all of the Exchange Offer Materials furnished or to be furnished to the Dealer Managers that are filed or hereafter will be filed with the Commission, are or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to the Commission’s Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”) and the Interactive Data Electronic Applications system (“IDEA” ), except to the extent permitted by Regulation S-T.

3. Compensation and Expenses.

(a) The Company agrees to pay the Dealer Managers, as compensation for their services as Dealer Managers in connection with the Exchange Offer, the fee set forth in the attached Schedule IV (the “Fee”).

(b) In addition to the Dealer Managers’ compensation for services as Dealer Managers, whether or not the Exchange Offer is commenced or any Old Securities are tendered and accepted for exchange pursuant to the Exchange Offer, the Company will pay or cause to be paid all costs and expenses incident to the performance of the Company’s and Guarantors’ obligations hereunder and under the Exchange Offer, including without limitation, (i) all fees and expenses relating to the preparation, filing, printing, mailing and publishing of the Registration Statement, any Preliminary Prospectus, the Prospectus and any other Exchange Offer Material (including all exhibits, amendments and supplements thereto) and the distribution thereof, (ii) all costs and expenses incurred by securities brokers and dealers, commercial banks, trust companies and other nominees for their customary mailing and handling expenses incurred in forwarding any Exchange Offer Materials, (iii) all fees and expenses of the Exchange Agent (as defined in Section 4 hereof) and the Information Agent (as defined in Section 5 hereof), (iv) all advertising charges, (v) the fees and expenses of the Company’s counsel and the fees and expenses of the Company’s independent accountants, (vi) the fees and expenses incurred in connection with the registration or qualification and determination of eligibility for investment of the New Securities under all applicable state securities or “blue sky” laws, (vii) any fees charged by rating agencies for rating the New Securities, (viii) the fees and expenses of the Trustee and any paying agent (including related fees and expenses of any counsel to such parties), (ix) all expenses and application fees incurred in connection with any filing with, and clearance of the offering by, Financial Industry Regulatory Authority, Inc. (“FINRA”), (x) all expenses and application fees related to the listing of the Underlying Securities on any stock exchange and (xi) all other fees and expenses incident to the performance by the Company of its obligations hereunder and in connection with the Exchange Offer.

4. Exchange Agent. The Company will arrange for U.S. Bank National Association to serve as exchange agent (the “Exchange Agent”) in connection with the Exchange Offer and will instruct the Exchange Agent to advise the Representative at least daily as to the principal amount of each series of Old Securities that have been validly tendered and not validly withdrawn pursuant to the Exchange Offer and as to such other matters relating to the Exchange Offer as the Representative may reasonably request and to furnish the Representative with any written reports concerning such information as it may reasonably request. The Company authorizes the Representative to communicate with the Exchange Agent in connection with the Exchange Offer.

5. Information Agent. The Company will arrange for D.F. King & Co., Inc. to serve as information agent (the “Information Agent”) in connection with the Exchange Offer and will instruct the Information Agent to advise the Representative as to such matters relating to the Exchange Offer as the Representative may reasonably request and to furnish the Representative with any written reports concerning such information as it may reasonably request.

6. Representations and Warranties of the Company and the Guarantors. The Company and the Guarantors hereby, jointly and severally, represent and warrant to the Dealer Managers, and agree with the Dealer Managers, as of the date hereof and as of all dates and times from the date hereof to and including the Settlement Date, as follows:

(a) Preliminary Prospectus. No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus included in the Exchange Offer Materials, at the time of filing thereof, complied in all material respects with the Securities Act, and no Preliminary Prospectus, at the time of filing thereof, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company and the Guarantors make no representation and warranty with respect to any statements in or omissions from any Preliminary Prospectus made in reliance upon and in conformity with any Dealer Manager Information.

(b) Registration Statement. Prior to the Expiration Date, the Registration Statement will have become, and will be, effective under the Securities Act. No order suspending the effectiveness of the Registration Statement has been issued by the Commission, and no proceeding for that purpose or pursuant to Section 8A of the Securities Act against the Company or related to the Exchange Offer has been initiated or threatened by the Commission. As of the applicable effective date of the Registration Statement and any post-effective amendment thereto, the Registration Statement and any such post-effective amendment complied and will comply in all material respects with the Securities Act, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; provided that the Company and Guarantors make no representation and warranty with respect to any statements in or omissions from the Original Registration Statement, the Registration Statement or any amendment thereto made in reliance upon and in conformity with any Dealer Manager Information. The Company has paid the registration fee for the issuance of the New Securities pursuant to the Exchange Offer in accordance with Rule 457 under the Securities Act. The Company and the Guarantors meet the conditions for the use of Form S-4 with respect to the Registration Statement in connection with the Exchange Offer as contemplated by this Agreement.

(c) Prospectus. As of the date of the Prospectus and any amendment or supplement thereto and at all times thereafter to and including the Expiration Date, the Prospectus will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company and the Guarantors make no representation and warranty with respect to any statements in or omissions from the Prospectus made in reliance upon and in conformity with any Dealer Manager Information.

(d) Schedule TO. On the Commencement Date, the Company will duly file with the Commission a Schedule TO with respect to the Exchange Offer pursuant to Rule 13e-4 under the Exchange Act. As of the date of the Schedule TO and any amendment or supplement thereto and all times thereafter to and including the Expiration Date, the Schedule TO as so filed, and as amended or supplemented from time to time, will comply in all material respects with the provisions of the Exchange Act and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they

were made, not misleading; provided that the Company and the Guarantors make no representation and warranty with respect to any statements in or omissions from the Schedule TO made in reliance upon and in conformity with any Dealer Manager Information.

(e) Exchange Offer Materials. Other than the Registration Statement, any Preliminary Prospectus and the Prospectus, the Company (including its agents and representatives, other than the Dealer Managers) has not prepared, used, authorized, approved or referred to and will not prepare, use, authorize, approve or refer to any Exchange Offer Material, including, without limitation, any “written communication” (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of an offer to buy the New Securities (each such communication by the Company or its agents and representatives, an “Issuer Free Writing Prospectus”) other than (i) the documents listed on Schedule II hereto and (ii) any other written communications approved in writing in advance by the Representative (any Exchange Offer Material that is not the Registration Statement, a Preliminary Prospectus or the Prospectus, the “Other Exchange Offer Material”). The Other Exchange Offer Materials, to the extent the same are filed with Commission in response to a requirement under the Securities Act or the Exchange Act, comply or will comply in all material respects with the Securities Act and the Exchange Act, as applicable. None of the Other Exchange Offer Materials (including, without limitation, any documents incorporated by reference in any Other Exchange Offer Materials), when considered together with all other Exchange Offer Materials, as of the date thereof, contained or will contain any untrue statement of a material fact or omitted or will omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company and the Guarantors make no representation and warranty with respect to any statements in or omissions from the Other Exchange Offer Materials made in reliance upon and in conformity with any Dealer Manager Information. There is no material fact or information concerning the Company, any Guarantor, or any of their respective subsidiaries, or the business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the Company, any Guarantor or any of their respective subsidiaries, that is required to be made generally available to the public and that has not been, or is not being, or will not be, made generally available to the public through the Exchange Offer Materials or otherwise.

(f) Incorporated Documents. The documents incorporated by reference in the Registration Statement, any Preliminary Prospectus, the Prospectus or any other Exchange Offer Material, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act, and none of such documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Any further documents so filed and incorporated by reference in any Exchange Offer Material, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act, and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(g) Financial Statements. The financial statements (including the related notes thereto) of the Company and its consolidated subsidiaries included or incorporated by reference in the Registration Statement, any Preliminary Prospectus, the Prospectus or any other Exchange Offer Material comply in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as applicable, and present fairly the financial position of the Company and its consolidated subsidiaries as of the dates indicated and the results of their operations and the changes in their cash flows for the periods specified. Such financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis throughout the periods covered thereby, and any supporting schedules included or incorporated by reference in the Registration Statement, any Preliminary Prospectus, the Prospectus or any other Exchange Offer Material present fairly the information required to be stated therein. The other financial information included or incorporated by reference the Registration Statement, any Preliminary Prospectus, the Prospectus or any other Exchange Offer Material has been derived from the accounting records of the Company and its consolidated subsidiaries and presents fairly the information shown thereby.

(h) No Material Adverse Change. Since the date of the most recent financial statements of the Company and its consolidated subsidiaries included or incorporated by reference in the Original Registration Statement, (i) there has not been any material change in the capital stock (other than the issuance of shares of Common Stock upon exercise of stock options and warrants described as outstanding in, and the grant of options and awards under existing equity incentive plans described in, the Registration Statement, any Preliminary Prospectus and the Prospectus), short-term debt or long-term debt of the Company, any Guarantor or any of their respective subsidiaries, or any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company, any Guarantor or any of their respective subsidiaries on any class of capital stock, or any material adverse change, or any development involving a prospective material adverse change, in or affecting the business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the Company and its subsidiaries taken as a whole; (ii) none of the Company, any Guarantor or any of their respective subsidiaries has entered into any transaction or agreement (whether or not in the ordinary course of business) that is material to the Company or any Guarantor, or any of their respective subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the Company, any Guarantor or any of their respective subsidiaries taken as a whole; and (iii) none of the Company, any Guarantor or any of their respective subsidiaries has sustained any loss or interference with its business that is material to the Company, any Guarantor, or any of their respective subsidiaries taken as a whole and that is either from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority, except in each case as otherwise disclosed in the Registration Statement, any Preliminary Prospectus and the Prospectus.

(i) Organization and Good Standing. The Company, the Guarantors, and each of their respective subsidiaries have been duly organized and are validly existing and in good standing under the laws of their respective jurisdictions of organization, are duly qualified to do business and are in good standing in each jurisdiction in which their respective ownership

or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to be so qualified or in good standing or have such power or authority has not had and would not be reasonably expected to have, individually or in the aggregate, a material adverse effect on the business, properties, management, financial position, stockholders’ equity or results of operations of the Company, any Guarantor or any of their respective subsidiaries taken as a whole or on the performance by the Company or the Guarantors of their respective obligations under this Agreement (a “Material Adverse Effect”). The Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed in Exhibit 21 to the Registration Statement. The subsidiaries listed in Schedule III hereto are the only significant subsidiaries of the Company.

(j) Capitalization. The Company has an authorized capitalization as set forth in the Registration Statement, any Preliminary Prospectus and the Prospectus under the heading “Capitalization.” All the outstanding shares of capital stock of the Company and the Guarantors have been duly and validly authorized and issued and are fully paid and non-assessable and are not subject to any pre-emptive or similar rights. Except as described in or expressly contemplated by the Registration Statement, any Preliminary Prospectus or the Prospectus, there are no outstanding rights (including, without limitation, pre-emptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interests in the Company, any Guarantor or any of their respective subsidiaries or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock of the Company, any Guarantor or any of their respective subsidiaries, any such convertible or exchangeable securities or any such rights, warrants or options. The capital stock of the Company conforms in all material respects to the description thereof contained in the Registration Statement, any Preliminary Prospectus and the Prospectus. All the outstanding shares of capital stock or other equity interests of each subsidiary owned, directly or indirectly, by the Company or any Guarantor has been duly and validly authorized and issued, are fully paid and non-assessable (except, in the case of any foreign subsidiary, for directors’ qualifying shares and except as otherwise described in the Registration Statement, any Preliminary Prospectus or the Prospectus,) and are owned directly or indirectly by the Company or any Guarantor, free and clear of any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party.

(k) Dealer Manager Agreement. This Agreement has been duly authorized, executed and delivered by the Company and the Guarantors and, assuming due authorization, execution and delivery by the Representative, constitutes a valid and legally binding agreement of the Company and the Guarantors, enforceable against the Company and the Guarantors in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by equitable principles relating to enforceability, and except that rights to indemnity and contribution contained in this Agreement may be limited by U.S. federal or state securities laws or public policy.

(l) New Notes. The New Notes have been duly authorized and, when issued and delivered in exchange for the Old Notes pursuant to the Exchange Offer, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by equitable principles relating to enforceability, and will be entitled to the benefits of the New Indenture.

(m) New Guarantees. The New Guarantees have been duly authorized and, when issued and delivered in exchange for the Old Guarantees pursuant to the Exchange Offer, will be (i) valid and binding obligations of the Guarantors, enforceable against the Guarantors, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by equitable principles relating to enforceability and (ii) in the form contemplated by, and entitled to the benefits of, the New Indenture.

(n) New Indenture. The New Indenture has been duly authorized, executed and delivered by the Company and the Guarantors and, when duly authorized, executed and delivered in accordance with its terms by the Trustee, will constitute a valid and legally binding agreement of the Company and the Guarantors, enforceable against the Company and the Guarantors in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by equitable principles relating to enforceability. The New Indenture will conform in all material respects to the requirements of the Trust Indenture Act of 1939, as amended, and the regulations of the Commission applicable to an indenture that is qualified thereunder (collectively, the “Trust Indenture Act”).

(o) Underlying Securities. Upon issuance and delivery of the New Notes pursuant to the Exchange Offer, the New Notes will be convertible at the option of the holders thereof into shares of the Underlying Securities in accordance with the terms of the New Notes. The Company has reserved a sufficient amount of Underlying Securities for issuance upon conversion of the New Notes and when such Underlying Securities are issued upon conversion of the New Notes in accordance with the terms of the New Notes and the New Indenture, they will be validly issued, fully paid and non-assessable, and the issuance of the Underlying Securities will not be subject to any preemptive or similar rights.

(p) Descriptions of the Transaction Documents. The New Securities and the New Indenture will each conform in all material respects to the descriptions thereof contained in the Registration Statement, any Preliminary Prospectus and the Prospectus.

(q) No Violation or Default. None of the Company, any Guarantor or any of their respective subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents, (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of the property or assets of it is subject, or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect.

(r) No Conflicts. The execution, delivery and performance by the Company and the Guarantors of this Agreement and the consummation of the transactions contemplated herein and in the Exchange Offer Materials, including the commencement and consummation of the Exchange Offer, the issuance of the New Securities pursuant to the Exchange Offer and the issuance of the Underlying Securities upon conversion thereof, and the compliance by the Company and the Guarantors with their obligations hereunder and thereunder will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company, any Guarantor or any of their respective subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company, any Guarantor or any of their respective subsidiaries is a party or by which the Company or any Guarantor, or any of their respective subsidiaries, is bound or to which any of the property or assets of the Company, any Guarantor or any of their respective subsidiaries is subject, (ii) result in any violation of the provisions of the charter or by-laws or similar organizational documents of the Company, any Guarantor or any of their respective subsidiaries, or (iii) result in any violation of any law or statute or any judgment, order, rule, regulation, writ or decree of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Company, any Guarantor, any of their respective subsidiaries or any of their respective properties, except, in the case of clauses (i) and (iii), for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect. In connection with the Exchange Offer, the Company has complied, and will continue to comply, in all material respects with the Exchange Act, including, without limitation, Sections 10, 13 and 14 of the Exchange Act and Rules 10b-5, 13e-4 and 14e-1 under the Exchange Act.

(s) No Consents, Filings, Etc. Required. No consent, filings, approval, authorization, order, license, registration or qualification of or with any court or arbitrator or governmental or regulatory authority is required to commence and consummate the Exchange Offer, to issue the New Securities pursuant to the Exchange Offer (including issuing the Underlying Securities upon conversion thereof) or to execute, deliver and perform the Company’s or the Guarantors’ obligations under this Agreement or to consummate the transactions contemplated by this Agreement or the Exchange Offer Materials, except for the qualification of the New Indenture under the Trust Indenture Act and such consents, filings, approvals, authorizations, orders and registrations or qualifications as have already been obtained under the Securities Act and the Exchange Act, as applicable, or as may be required by FINRA, the NASDAQ Global Select Market, or under applicable state securities laws in connection with the tender of the Old Securities or the issuance of the New Securities pursuant to the Exchange Offer (including the issuance of the Underlying Securities upon conversion thereof).

(t) Legal Proceedings. Except as described in the Registration Statement, any Preliminary Prospectus and the Prospectus, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Company, any Guarantor or any of their respective subsidiaries is or may be a party or to which any property or assets

of the Company, any Guarantor or any of their respective subsidiaries is or may be the subject that, individually or in the aggregate, if determined adversely to the Company, any Guarantor or any of their respective subsidiaries, could reasonably be expected to have a Material Adverse Effect. No such investigations, actions, suits or proceedings are threatened or, to the knowledge of the Company or any Guarantor, contemplated by any governmental or regulatory authority or threatened by others and (i) there are no current or pending legal, governmental or regulatory actions, suits or proceedings that are required under the Securities Act to be described in the Registration Statement, any Preliminary Prospectus or the Prospectus that are not so described in the Registration Statement, any Preliminary Prospectus and the Prospectus and (ii) there are no statutes, regulations or contracts or other documents that are required under the Securities Act to be filed as exhibits to the Registration Statement or described in the Registration Statement, any Preliminary Prospectus or the Prospectus that are not so filed as exhibits to the Registration Statement or described in the Registration Statement, any Preliminary Prospectus and the Prospectus.

(u) Independent Accountants. To the Company’s knowledge, Ernst & Young LLP, who have certified the financial statements and supporting schedules of the Company and its subsidiaries, all incorporated by reference in the Exchange Offer Materials, is an independent registered public accounting firm with respect to the Company and its subsidiaries within the applicable rules and regulations adopted by the Commission and the Public Company Accounting Oversight Board (United States) and as required by the Securities Act.

(v) Title to Real and Personal Property. The Company, the Guarantors and their respective subsidiaries have good and marketable title in fee simple (in the case of real property) to, or have valid and marketable rights to lease or otherwise use, all items of real and personal property and assets that are material to the business of the Company, the Guarantors and their respective subsidiaries, taken as a whole, in each case free and clear of all liens, encumbrances, claims and defects and imperfections of title except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Company, the Guarantors and their respective subsidiaries or (ii) could not reasonably be expected, individually or in the aggregate, to have Material Adverse Effect.

(w) Title to Intellectual Property. The Company, each Guarantor and each of their respective subsidiaries owns, possesses, or can acquire on reasonable terms, all Intellectual Property necessary for the conduct of the business of the Company, the Guarantors and their respective subsidiaries as now conducted or as described in the Exchange Offer Materials. Except as set forth in the in Item 1. Business of the Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 2009 under the caption “Intellectual Property”, (i) to the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of any such Intellectual Property, except as such infringement, misappropriation or violation would not result in a Material Adverse Effect; (ii) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the rights of the Company, any Guarantor or any of their respective subsidiaries in or to any such Intellectual Property, and the Company is unaware of any other fact which would form a reasonable basis for any such claim; (iii) the Intellectual Property owned by the Company, each Guarantor and each of their respective subsidiaries and to the knowledge of the Company, the

Intellectual Property licensed to the Company, each Guarantor and each of their respective subsidiaries has not been adjudged invalid or unenforceable, in whole or in part, and there is no pending or threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property, and the Company is unaware of any other fact which would form a reasonable basis for any such claim; and (iv) there is no pending or threatened action, suit, proceeding or claim by others that the Company, any Guarantor or any of their subsidiaries infringes, misappropriated or otherwise violates any Intellectual Property or other proprietary rights of others, the Company has not received any written notice of such claim and the Company is unaware of any other fact which would form a reasonable basis for any such claim. “Intellectual Property” shall mean all patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, know-how and other intellectual property of the Company and its subsidiaries.

(x) No Undisclosed Relationships. No relationship, direct or indirect, exists between or among the Company or any of its subsidiaries, on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company or any of its subsidiaries, on the other, that is required by the Securities Act to be described in the Registration Statement, any Preliminary Prospectus and the Prospectus and that is not so described in such documents.

(y) Investment Company Act. Neither the Company nor any of its subsidiaries is, and after giving effect to the tender of the Old Securities and the issuance of the New Securities pursuant to the Exchange Offer as described in the Registration Statement, any Preliminary Prospectus and the Prospectus, none of them will be required to register as, an “investment company” or an entity “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder.

(z) Taxes. The Company, the Guarantors and their respective subsidiaries have paid all material U.S. federal, state, local and foreign taxes and filed all material tax returns required to be paid or filed through the date hereof. There is no tax material deficiency that has been, or could reasonably be expected to be, asserted against the Company, any Guarantor, any of their respective subsidiaries, or any of their respective properties or assets for which there is not an adequate reserve reflected in the Company’s financial statements included or incorporated by reference in the Registration Statement, any Preliminary Prospectus and the Prospectus.

(aa) Licenses and Permits. The Company, the Guarantors and their respective subsidiaries possess and are operating in compliance with all licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in the Registration Statement, any Preliminary Prospectus and the Prospectus, except where the failure to possess, make or comply with the same would not, individually or in the aggregate, have a Material Adverse Effect. Except as described in the Registration Statement, any Preliminary Prospectus and the Prospectus, none of the

Company, any Guarantor or any of their respective subsidiaries has received notice of any revocation or modification of any such license, certificate, permit or authorization or has any reason to believe that any such license, certificate, permit or authorization will not be renewed in the ordinary course.

(bb) No Labor Disputes. No labor disturbance by or dispute with employees of the Company, any Guarantor or any of their respective subsidiaries exists or, to the knowledge of the Company and the Guarantors, is contemplated or threatened and the Company and the Guarantors are not aware of any existing or imminent labor disturbance by, or dispute with, the employees of any of its or any of its subsidiaries’ principal suppliers, contractors or customers, except as would not have a Material Adverse Effect.

(cc) Compliance with Governmental Authority. Except as described in the Registration Statement, any Preliminary Prospectus and the Prospectus, the Company, the Guarantors and their respective subsidiaries: (i) are and at all times have been in full compliance with all statutes, rules, regulations, or guidances applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution, marketing, labeling, promotion, sale, offer for sale, storage, import, export or disposal of any product manufactured or distributed by the Company, any Guarantor or any of their respective subsidiaries (“Applicable Laws”), except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; (ii) since January 1, 2006, have not received any FDA Form 483, notice of adverse finding, warning letter, untitled letter or other correspondence or notice from the U.S. Food and Drug Administration or any other federal, state or foreign governmental authority having authority over the Company, any Guarantor or any of their respective subsidiaries (“Governmental Authority”) alleging or asserting noncompliance with any Applicable Laws or any licenses, certificates, approvals, clearances, authorizations, permits and supplements or amendments thereto required by any such Applicable Laws (“Authorizations”), except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; (iii) possess all material Authorizations and such Authorizations are valid and in full force and effect and are not in violation of any term of any such Authorizations, except for such violations as would not, individually or in the aggregate, have a Material Adverse Effect; (iv) since January 1, 2006, have not received notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any Governmental Authority or third party alleging that any product operation or activity is in violation of any Applicable Laws or Authorizations and have no knowledge that any such Governmental Authority or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (v) have not received notice that any Governmental Authority has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations and have no knowledge that any such Governmental Authority is considering such action; and (vi) have filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were complete and correct in all material respects on the date filed (or were corrected or supplemented by a subsequent submission).

(dd) Compliance with and Liability under Environmental Laws. (i) The Company, the Guarantors and their respective subsidiaries (A) are, and at all prior times were, in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, requirements, decisions, judgments, decrees, orders and the common law relating to pollution or the protection of the environment, natural resources or human health or safety, including those relating to the generation, storage, treatment, use, handling, transportation, Release or threat of Release of Hazardous Materials (collectively, “Environmental Laws”), (B) have received and are in compliance with all permits, licenses, certificates or other authorizations or approvals required of them under applicable Environmental Laws to conduct their respective businesses, (C) have not received notice of any actual or potential liability under or relating to, or actual or potential violation of, any Environmental Laws, including for the investigation or remediation of any Release or threat of Release of Hazardous Materials, and have no knowledge of any event or condition that would reasonably be expected to result in any such notice, (D) are not conducting or paying for, in whole or in part, any investigation, remediation or other corrective action pursuant to any Environmental Law at any location, and (E) are not a party to any order, decree or agreement that imposes any obligation or liability under any Environmental Law, (ii) there are no costs or liabilities associated with Environmental Laws of or relating to the Company, any Guarantor or any of their respective subsidiaries, except in the case of each of clauses (i) and (ii) above, for any such matter, as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and (iii) except as described in the Registration Statement, any Preliminary Prospectus and the Prospectus, (A) there are no proceedings that are pending, or that are known to be contemplated, against the Company, any Guarantor or any of their respective subsidiaries under any Environmental Laws in which a governmental entity is also a party, other than such proceedings regarding which it is reasonably believed no monetary sanctions of $100,000 or more will be imposed, (B) the Company, the Guarantors and their respective subsidiaries are not aware of any facts or issues regarding compliance with Environmental Laws, or liabilities or other obligations under Environmental Laws, including the Release or threat of Release of Hazardous Materials, that could reasonably be expected to have a material effect on the capital expenditures, earnings or competitive position of the Company, the Guarantors and their respective subsidiaries, and (C) none of the Company, any Guarantor or any of their respective subsidiaries anticipates material capital expenditures relating to any Environmental Laws. “Hazardous Materials” means any material, chemical, substance, waste, pollutant, contaminant, compound, mixture, or constituent thereof, in any form or amount, including petroleum (including crude oil or any fraction thereof) and petroleum products, natural gas liquids, asbestos and asbestos containing materials, naturally occurring radioactive materials, brine, and drilling mud, regulated or which can give rise to liability under any Environmental Law. “Release” means any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, or migrating in, into or through the environment, or in, into from or through any building or structure.

(ee) Compliance with Occupational Laws. The Company, each Guarantor and each of their respective subsidiaries (i) is in compliance, in all material respects, with any and all applicable foreign, federal, state and local laws, rules, regulations, treaties, statutes and codes promulgated by any and all governmental authorities (including pursuant to the Occupational Health and Safety Act) relating to the protection of human health and safety in

the workplace (“Occupational Laws”); (ii) has received all material permits, licenses or other approvals required of it under applicable Occupational Laws to conduct its business as currently conducted; and (iii) is in compliance, in all material respects, with all terms and conditions of such permit, license or approval. No action, proceeding, revocation proceeding, writ, injunction or claim is pending or, to the Company’s and the Guarantors’ knowledge, threatened against the Company, any Guarantor or any of their respective subsidiaries relating to Occupational Laws, and the Company and the Guarantors do not have knowledge of any facts, circumstances or developments relating to its operations or cost accounting practices that could reasonably be expected to form the basis for or give rise to such actions, suits, investigations or proceedings.

(ff) Compliance with ERISA. (i) Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), for which the Company or any member of its “Controlled Group” (defined as any organization which is a member of a controlled group of corporations within the meaning of Section 414 of the Internal Revenue Code of 1986, as amended (the “Code”)) would have any liability (each, a “Plan”) has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Code, except for noncompliance that could not reasonably be expected to result in material liability to the Company, any Guarantor or any of their respective subsidiaries, (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan excluding transactions effected pursuant to a statutory or administrative exemption that could reasonably be expected to result in a material liability to the Company, any Guarantor or any of their respective subsidiaries, (iii) for each Plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, the minimum funding standard of Section 412 of the Code or Section 302 of ERISA, as applicable, has been satisfied (without taking into account any waiver thereof or extension of any amortization period) and is reasonably expected to be satisfied in the future (without taking into account any waiver thereof or extension of any amortization period), (iv) the fair market value of the assets of each Plan that is subject to the funding rules of Code Section 412 or ERISA Section 302 exceeds the present value of all benefits accrued under such Plan (determined based on those assumptions used to fund such Plan), (v) no “reportable event” (within the meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur that either has resulted, or could reasonably be expected to result, in material liability to the Company or its subsidiaries, (vi) neither the Company nor any member of the Controlled Group has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the PBGC, in the ordinary course and without default) in respect of a Plan (including a “multiemployer plan”, within the meaning of Section 4001(a)(3) of ERISA), and (vii) there is no pending audit or investigation by the Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation or any other governmental agency or any foreign regulatory agency with respect to any Plan that could reasonably be expected to result in material liability to the Company, any Guarantor or any of their respective subsidiaries.

(gg) Disclosure Controls. The Company and its subsidiaries maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the

Exchange Act) that has been designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure. The Company and its subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.

(hh) Accounting Controls. The Company and its subsidiaries maintain systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Based on the Company’s most recent evaluation of its internal controls over financial reporting pursuant to Rule 13a-15(c) under the Exchange Act, except as disclosed in the Registration Statement, any Preliminary Prospectus and the Prospectus, there are no material weaknesses in the Company’s internal controls. The Company’s auditors and the audit committee of the board of directors of the Company have been advised of: (i) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which have adversely affected or are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information, and (ii) 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.

(ii) Insurance. The Company and the Guarantors have insurance covering their respective properties, operations, personnel and businesses, including business interruption insurance, which insurance is in amounts and insures against such losses and risks as are adequate to protect the Company, the Guarantors and their respective businesses. Neither the Company nor the Guarantors has (i) received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business.

(jj) No Unlawful Payments. None of the Company, any Guarantor or any of their respective subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or other person associated with or acting on behalf of the Company, any Guarantor

or any of their respective subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds, (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977 or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

(kk) Compliance with Money Laundering Laws. The operations of the Company, the Guarantors and their respective subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company, any Guarantor or any of their respective subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Guarantor, threatened.

(ll) Compliance with OFAC. None of the Company, any Guarantor or any of their respective subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company, any Guarantors or their respective subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”).

(mm) No Restrictions on Subsidiaries. Except (i) as disclosed in the Registration Statement, any Preliminary Prospectus and the Prospectus and (ii) as set forth in the credit and guarantee agreement entered into on July 20, 2006, as amended by the First Amendment to Credit and Guaranty dated as of October 29, 2007, and further amended by the Consent and Second Amendment to Credit and Guaranty Agreement dated August 12, 2009, by and among American Medical Systems, Inc., as borrower, the Company and each of the Company’s majority-owned direct domestic subsidiaries, as guarantors, CIT Healthcare LLC as agent and certain lenders from time to time party thereto (as amended, the “Credit Agreement”), no subsidiary of the Company or any Guarantor is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company or any Guarantor, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company or any Guarantor any loans or advances to such subsidiary from the Company or any Guarantor or from transferring any of such subsidiary’s properties or assets to the Company, any Guarantor or any other subsidiary of the Company or any Guarantor.

(nn) No Broker’s Fees. None of the Company, any Guarantor or any of their respective subsidiaries is a party to any contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against the Company, any Guarantor, any of their respective subsidiaries, or either of the Dealer Managers for a brokerage commission, finder’s fee or like payment in connection with the Exchange Offer.

(oo) No Registration Rights. Except as disclosed in the Registration Statement, any Preliminary Prospectus and the Prospectus, there are no persons with registration or other similar rights to have any securities of the Company registered pursuant to the Registration Statement or otherwise registered by the Company under the Securities Act by reason of the filing of the Registration Statement with the Commission or the issuance and sale of the New Securities.

(pp) No Stabilization. Neither the Company nor any of its subsidiaries has taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of any security of the Company to facilitate the exchange of the Old Securities for New Securities in connection with the Exchange Offer or the resale of the New Securities.

(qq) Margin Rules. The issuance of the New Securities pursuant to the Exchange Offer in the manner described in the Registration Statement, any Preliminary Prospectus and the Prospectus will not violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.

(rr) Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Registration Statement, any Preliminary Prospectus, the Prospectus or any other Exchange Act Material has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

(ss) Statistical and Market Data. Nothing has come to the attention of the Company that has caused the Company to believe that the statistical and market-related data included or incorporated by reference in any Exchange Offer Materials is not based on or derived from sources that are reliable and accurate in all material respects.

(tt) Sarbanes-Oxley Act. There is and has been no failure on the part of the Company or, to the knowledge of the Company, any of the Company’s directors or officers, in their capacities as such, to comply with any applicable provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications.

(uu) Status under the Exchange Act. The Company is subject to and in compliance with the reporting requirements of Section 13 or Section 15(d) of the Exchange Act.

(vv) Payment of Costs. The Company has, or has made arrangements to obtain, funds sufficient to enable the Company to pay promptly, upon the terms and subject to the conditions of the Exchange Offer, any costs required to be paid in connection with the Exchange Offer, and such arrangements comply with Section 7 of the Exchange Act.

(ww) Rule 425. The Company has filed and will continue to file with the Commission pursuant to Rule 425 of the Securities Act all written communications made by the Company in connection with or relating to the Exchange Offer required to be filed on the date of their first use.

(xx) Book-Entry Transfer. The Company has made or will make appropriate arrangements with The Depository Trust Company (“DTC”) and any other “qualified” registered securities depository to allow for the book-entry transfer of tendered Old Securities between depository participants and the Exchange Agent.

(yy) Solvency. On and immediately after the Settlement Date, the Company and the Guarantors (after giving effect to Exchange Offer in the manner described in the Exchange Offer Materials) will be Solvent. As used in this paragraph, the term “Solvent” means, with respect to a particular date, that on such date (i) the present fair market value (or present fair saleable value) of the assets of the Company or any Guarantor, as the case may be, is not less than the total amount required to pay the liabilities of the Company on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured, (ii) the Company or any Guarantor, as the case may be, is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business, (iii) assuming consummation of the Exchange Offer in the manner described in the Exchange Offer Materials, the Company or any Guarantor, as the case may be, is not incurring debts or liabilities beyond its ability to pay as such debts and liabilities mature, (iv) the Company or any Guarantor, as the case may be, is not engaged in any business or transaction, and does not propose to engage in any business or transaction, for which its property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which the Company or any Guarantor, as the case may be, is engaged and (v) the Company or any Guarantor, as the case may be, as the case may be, is not a defendant in any civil action that would result in a judgment that the Company or any Guarantor, as the case may be, is or would become unable to satisfy.

Any certificate signed by any officer or authorized representative of the Company or any Guarantor, as the case may be, delivered to the Representative or its counsel in connection with this Agreement and the Exchange Offer shall be deemed a representation and warranty by the Company or such Guarantor, as the case may be, to the Representative as to the matters covered thereby as of the date of such certificate and, unless subsequently amended or supplemented, as of all dates from the date thereof to and including the Settlement Date.

7. Further Agreements of the Company and Guarantors. The Company and the Guarantors covenant and agree with the Dealer Managers that:

(a) Required Filings; Representative Approval. The Company will prepare the Exchange Offer Materials and will file all Exchange Offer Materials with the Commission to the extent required by the Securities Act and the Exchange Act, as applicable. The Company will not use, amend or supplement or file with the Commission or with any other federal, state or other governmental agency or instrumentality (each, an “Other Agency”) any Exchange Offer Materials without first submitting copies of such Exchange Offer Materials to the Representative a reasonable time prior to using, amending or supplementing or filing such Exchange Offer Material and giving reasonable consideration to the Representative’s and its counsel’s comments. Unless the Company obtains the Representative’s prior written consent, it will not make any offer in connection with the Exchange Offer that would constitute an Issuer Free Writing Prospectus and will not prepare, use, authorize or refer to

any Exchange Offer Materials other than (i) the documents listed on Schedule II hereto and (ii) other written communications approved in writing in advance by the Representative. From the date hereof and to and including the Expiration Date, the Company will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Securities Act or the Exchange Act.

(b) Delivery of Exchange Offer Materials to Holders. Following commencement of the Exchange Offer, the Company will cause to be mailed to each registered holder of any Old Securities, as soon practicable, a copy of the most current Preliminary Prospectus and the Letter of Transmittal, together with all other appropriate Exchange Offer Materials.

(c) Delivery of Copies. The Company will deliver to each of the Dealer Managers, upon its request, without charge, two signed copies of the Registration Statement (as originally filed and each amendment thereto), in each case including all exhibits and consents filed therewith and as many copies of any Preliminary Prospectus, the Prospectus and any other Exchange Offer Materials (including all amendments and supplements thereto and documents incorporated by reference therein) as it may reasonably request.

(d) Notice to the Representative. The Company will advise the Representative promptly, and confirm such advice in writing, (i) when the Registration Statement has become effective, (ii) when any amendment to the Registration Statement has been filed or becomes effective, (iii) when any Preliminary Prospectus or supplement to the Prospectus or any Issuer Free Writing Prospectus or any amendment to the Prospectus has been filed, (iv) when the Schedule TO or any amended Schedule TO has been filed, (v) of any request by the Commission for any amendment to the Registration Statement, any amendment or supplement to the Prospectus or any amendment to the Schedule TO or the receipt of any comments from the Commission relating to the Registration Statement or any other request by the Commission for any additional information, (vi) of the issuance by the Commission of any order suspending the effectiveness of the Registration Statement or preventing or suspending the use of any Preliminary Prospectus, the Prospectus or the Schedule TO or the initiation or threatening of any proceeding for that purpose or pursuant to Section 8A of the Securities Act, (vii) of the occurrence of any event prior to the Settlement Date as a result of which the Registration Statement, any Preliminary Prospectus, the Prospectus or any Other Exchange Offer Material (when such Other Exchange Offer Material is considered with all Exchange Offer Material) as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances existing when such the Registration Statement, any Preliminary Prospectus, the Prospectus or any other Exchange Offer Material is delivered, not misleading, (viii) of any injunction or litigation or administrative action or claim relating to the Exchange Offer and (ix) of the receipt by the Company or any Guarantor of any notice with respect to any suspension of the qualification of the New Securities for issuance in any jurisdiction or the initiation or threatening of any proceeding for such purpose. The Company and the Guarantors will use their best efforts to prevent the issuance of any such order suspending the effectiveness of the Registration Statement, preventing or suspending the use of any Preliminary Prospectus, the Prospectus or the Schedule TO or suspending any such qualification of the New Securities and, if any such order is issued, will obtain as soon as possible the withdrawal thereof.

(e) Ongoing Compliance. The Company and the Guarantors will comply with the Securities Act and the Exchange Act, as applicable, so as to permit the completion of the Exchange Offer and the issuance of the New Securities pursuant thereto as contemplated in the Registration Statement, any Preliminary Prospectus and the Prospectus. The Company shall immediately notify the Representative, and confirm such notice in writing, of (i) the occurrence of any event that could reasonably be expected to cause the Company and the Guarantors to withdraw, rescind or terminate the Exchange Offer or would permit the Company and the Guarantors to exercise any right not to exchange the Old Securities tendered pursuant to the Exchange Offer for New Securities, (ii) any filing made by the Company or the Guarantors of information relating to the Exchange Offer with any securities exchange or any other regulatory body in the United States or any other jurisdiction and (iii) at any time prior to the Expiration Date, any material developments in or affecting the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company or the Guarantors that (A) make any statement in the Exchange Offer Materials false or misleading or (B) are not disclosed in the Exchange Offer Materials. In such event or if during such time (i) any event shall occur or condition shall exist as a result of which any Exchange Offer Material as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances existing at the time delivered to a holder of the Old Securities, not misleading, or (ii) it is necessary to amend or supplement any Exchange Offer Material to comply with law, the Company will immediately notify the Representative thereof and forthwith prepare and, subject to paragraph (a) above, file with the Commission (to the extent required) and furnish to the Representative such amendments or supplements to such Exchange Offer Material as may be necessary so that the statements in such Exchange Offer Material as so amended or supplemented will not, in the light of the circumstances existing at the time delivered to a holder of the Old Securities, be misleading or so that such Exchange Offer Material will comply with law.

(f) Blue Sky Compliance. The Company and the Guarantors will use their best efforts to obtain the registration or qualification of the New Securities under all state securities or “blue sky” laws of such jurisdictions as may be required for the consummation of the Exchange Offer and will continue such qualifications in effect so long as required for the offer and distribution of the New Securities pursuant to the Exchange Offer.

(g) Earning Statement. The Company will make generally available to its security holders and the Representative as soon as practicable an earning statement that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder covering a period of at least 12 months beginning with the first fiscal quarter of the Company occurring after the “effective date” (as defined in Rule 158) of the Registration Statement.

(h) No Stabilization. Neither the Company nor any Guarantor will take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of any security of the Company to facilitate the exchange of Old Securities for New Securities in connection with the Exchange Offer or the resale of the New Securities.

(i) Exchange Listing. The Company will use its reasonable best efforts to cause all Underlying Securities to be listed on the Nasdaq Global Select Market upon notice of issuance.

(j) Underlying Securities. The Company will reserve and keep available at all times, free of pre-emptive or similar rights, a sufficient amount of Underlying Securities to permit conversion of the New Notes pursuant to the terms thereof.

(k) Reports. From the date hereof to and including the Settlement Date, the Company will furnish to the Representative, as soon as they are available, copies of all reports or other communications (financial or other) furnished to holders of the Old Securities, and copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange or automatic quotation system; provided the Company will be deemed to have furnished such reports and financial statements to the Representative to the extent they are filed on EDGAR and IDEA.

(l) Record Retention. The Company will, pursuant to reasonable procedures developed in good faith, retain copies of each Issuer Free Writing Prospectus and any other Exchange Offer Materials that are not filed with the Commission in accordance with Rule 433 under the Securities Act or otherwise.

(m) References to the Dealer Managers. Except as required by applicable law, the use of any reference to either of the Dealer Managers in the Registration Statement, any Preliminary Prospectus, the Prospectus or any other Exchange Offer Materials or any other document or communication prepared, approved or authorized by the Company in connection with the Exchange Offer is subject to such Dealer Manager’s prior approval; provided that if such reference to either of the Dealer Managers is required by applicable law, the Company shall notify such Dealer Manager within a reasonable time prior to such use but the Company is nonetheless permitted to use such reference.

(n) Book-Entry Transfer. On or prior to the Commencement Date, the Company will make appropriate arrangements with DTC to allow for the book-entry transfer of tendered Old Securities between depository participants and the Exchange Agent.

8. Conditions of the Dealer Managers’ Obligations. The obligations of the Dealer Managers in this Agreement are subject to the performance by the Company and the Guarantors of their covenants and other obligations hereunder and to the following additional conditions:

(a) Registration Compliance; No Stop Order. The Registration Statement shall have become effective prior to the Expiration Date and no order suspending the effectiveness of the Registration Statement shall be in effect, and no proceeding for such purpose or pursuant to Section 8A under the Securities Act shall be pending before or threatened by the Commission. The Prospectus and any amendment or supplement thereto and each Issuer Free Writing Prospectus shall have been timely filed with the Commission under the Securities Act (in the case of an Issuer Free Writing Prospectus, to the extent required by Rule 433 under the Securities Act) and in accordance with Section 7(a) hereof. All requests by the Commission for additional information shall have been complied with to the

reasonable satisfaction of the Representative and its counsel. All other Exchange Offer Materials required to be filed with the Commission shall have been filed with the applicable time prescribed for such filing under the Securities Act and the Exchange Act, as applicable.

(b) Representations and Warranties. The representations and warranties of the Company and the Guarantors contained herein shall be true and correct on and as of the date hereof and as of all dates and times from the date hereof to and including the Settlement Date. The statements of the Company, the Guarantors and their respective officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the date made and as of all dates and times from the date hereof to and including the Settlement Date.

(c) No Downgrade. Subsequent to the execution of this Agreement, if there are any debt securities or preferred stock of, or guaranteed by, the Company or any Guarantor that are rated by a “nationally recognized statistical rating organization,” as such term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act, (i) no downgrading shall have occurred in the rating accorded any such debt securities or preferred stock and (ii) no such organization shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, its rating of any such debt securities or preferred stock (other than an announcement with positive implications of a possible upgrading).

(d) No Material Adverse Change. No event or condition of a type described in 6(h) hereof shall have occurred or shall exist, which event or condition is not described in the Registration Statement (excluding any amendment or supplement thereto), any Preliminary Prospectus (excluding any amendment or supplement thereto) and the Prospectus (excluding any amendment or supplement thereto) and the effect of which in the judgment of the Representative makes it impracticable or inadvisable to proceed with the Exchange Offer on the terms and in the manner described in the Exchange Offer Materials.

(e) Officers’ Certificates. The Representative shall have received: (A) on Expiration Date a certificate of the chief financial officer or chief accounting officer of the Company and one additional senior executive officer of the Company who is satisfactory to the Representative (x) confirming that such officers have carefully reviewed the Registration Statement, each Preliminary Prospectus and the Prospectus and, to the knowledge of such officers, the representations set forth in Sections 6(a), 6(b) and 6(c) hereof are true and correct, (y) confirming that the other representations and warranties of the Company and Guarantors in this Agreement are true and correct, as of the date of such officers’ certificate and that the Company and the Guarantors have complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the date of such officers’ certificate, and (z) to the effect set forth in paragraphs (a), (c) and (d) above; and (B) on each of the Commencement Date and the Expiration Date an officer’s certificate from Larry W. Getlin, Senior Vice President, Corporate Compliance, Quality and Legal, with respect to certain regulatory matters, in form and substance reasonably satisfactory to the Representative, to the effect set forth in Annex B.

(f) Comfort Letters. On each of the Commencement Date and the Expiration Date, Ernst & Young LLP shall have furnished to the Representative, at the request of the Company, letters, dated the respective dates of delivery thereof and addressed to the Representative, in form and substance reasonably satisfactory to the Representative, containing statements and information of the type customarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained or incorporated by reference in the Registration Statement, any Preliminary Prospectus and the Prospectus; provided that each such letter shall use a “cut-off” date no more than three business days prior to the date of such letter.

(g) Opinions and Negative Assurance Letters of Counsel for the Company and the Guarantors. Latham & Watkins, LLP, counsel for the Company and the Guarantors, shall have furnished to the Representative, at the request of the Company and the Guarantors, (i) their written opinion, on and as of the Commencement Date and again on and as of the Settlement Date, in form and substance reasonably satisfactory to the Representative, to the effect set forth in Annexes A-1 and A-2 hereto, respectively, and (ii) their negative assurance letter, on and as of the Commencement Date and again on and as of the Expiration Date, in form and substance reasonably satisfactory to the Representative, to the effect set forth in Annexes A-3 and A-4 hereto, respectively.

(h) Opinions and Negative Assurance Letters of Counsel for the Dealer Managers. Davis Polk & Wardwell LLP, counsel for the Dealer Managers, shall have furnished to the Representative, with respect to such matters as it may reasonably request, (i) their written opinion, on and as of the Commencement Date and again on and as of the Settlement Date, and (ii) their negative assurance letter, on and as of the Commencement Date and again on and as of the Expiration Date, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.

(i) No Legal Impediment to Issuance. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would prevent the consummation of the Exchange Offer in the manner described in the Exchange Offer Materials, as of the date hereof. No injunction or order of any U.S. federal, state or foreign court shall have been issued that would, as of the date hereof, prevent the consummation of the Exchange Offer in the manner described in the Exchange Offer Materials.

(j) Good Standing. The Representative shall have received on and as of the Commencement Date and the Settlement Date satisfactory evidence of the good standing of the Company, its significant subsidiaries and the Guarantors in their respective jurisdictions of organization and their good standing as foreign entities in such other jurisdictions as the Representative may reasonably request, in each case in writing or any standard form of telecommunication from the appropriate governmental authorities of such jurisdictions.

(k) Additional Documents. Upon request at any time on or prior to the Settlement Date, the Company and the Guarantors shall have furnished to the Representative such further certificates and documents as it may reasonably request.

All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to the Representative and its counsel.

If any condition specified in this Section 8 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Representative as provided in Section 13 hereof.

9. Indemnification and Contribution.

(a) Indemnification of the Dealer Managers. The Company and the Guarantors agree, jointly and not severally, to indemnify and hold harmless each Dealer Manager and its affiliates, and the directors, officers, agents, and employees of each Dealer Manager and its respective affiliates and each other entity or person, if any, controlling either of the Dealer Managers or any such affiliates within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each of the Dealer Managers and each such entity or person being referred to as a “Dealer Manager Indemnitee”) from and against any and all losses, claims, damages and liabilities (or actions or proceedings in respect thereof), and to reimburse each of the Dealer Managers and any other Dealer Manager Indemnitee for all costs and expenses (including, without limitation, fees and disbursements of counsel) incurred by either of the Dealer Managers or any such other Dealer Manager Indemnitee in connection with investigating, preparing, or defending any such action, claim, or proceeding, whether or not in connection with pending or threatened litigation to which either of the Dealer Managers (or any other Dealer Manager Indemnitee), the Company, any Guarantor or any of their respective security holders is a party, in each case as such expenses are incurred or paid, (i) arising out of or based upon (A) any untrue statement or alleged untrue statement of a material fact contained in any Exchange Offer Material (when considered with all other Exchange Offer Materials), or any omission or alleged omission to state in any Exchange Offer Material a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they are made in the case of any Exchange Offer Materials (when considered with all other Exchange Offer Materials) other than the Registration Statement, not misleading, or (B) any withdrawal, termination, rescission or modification by the Company or any Guarantor of, or failure by the Company or any Guarantor to make or consummate, the Exchange Offer or to acquire any Old Securities pursuant to the Exchange Offer or (C) any breach by the Company or any Guarantor of any representation or warranty or failure to comply with any of the agreements contained herein, or (ii) otherwise, in any way, arising out of, relating to or in connection with or alleged to, in any way, arise out of, relate to or be in connection with the Exchange Offer, this Agreement or either of the Dealer Managers’ role in connection therewith; except in the case of clause (ii) above for any such loss, claim, damage, liability, or expense that is determined by final and nonappealable judgment of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Dealer Manager Indemnitee and except in the case of clauses (i)(A) and (B) above for any such loss, claim, damage, liability, or expense which arises out of or is based upon (A) any untrue statement of a material fact contained in any Exchange Offer Material, or (B) any omission to state in the Exchange Offer Material a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they are

made, not misleading, if in any such case such statement or omission was made in reliance upon and in conformity with the Dealer Manager Information. The foregoing indemnity shall be in addition to any liability which the Company or any Guarantor might otherwise have to the Dealer Managers and such other Dealer Manager Indemnitees.

(b) Indemnification of the Company and the Guarantors. Each of the Dealer Managers agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who signed the Registration Statement, each person, if any, who controls the Company, the Guarantors, their respective directors, their respective officers who signed the Registration Statement and each person, if any, who controls any Guarantor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to either of the Dealer Managers furnished to the Company in writing by such Dealer Manager through the Representative for use in the Exchange Offer Materials, it being understood and agreed upon that the only such information furnished through the Representative by the Dealer Managers is the Dealer Manager Information.

(c) Notice and Procedures. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such person (the “Indemnified Person”) shall promptly notify the person against whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under paragraph (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under paragraph (a) or (b) above. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person (who shall not, without the consent of the Indemnified Person, be counsel to the Indemnifying Person) to represent the Indemnified Person in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary, (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person, (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person, or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interest between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceedings in the same

jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be paid or reimbursed as they are incurred. Any such separate firm for any Dealer Manager, its respective affiliates, directors and officers and any control persons of such Dealer Manager shall be designated in writing by the Representative and any such separate firm for the Company, its directors, its officers who signed the Registration Statement, each person, if any, who controls the Company, the Guarantors, their respective directors, their respective officers who signed the Registration Statement and each person, if any, who controls any Guarantor shall be designated in writing by the Company or the Guarantors, as the case may be. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as contemplated by this paragraph (c), the Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (i) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (ii) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.

(d) Contribution. If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors, on the one hand, and by the Dealer Managers, on the other, from the Exchange Offer or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company and the Guarantors, on the one hand, and of the Dealer Managers, on the other, in connection with the statements, actions or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company and Guarantors, on the one hand, and by the Dealer Managers on the other, shall be deemed to be in the same proportion as the aggregate principal amount of New Securities issued pursuant to the Exchange Offer bears to the fees actually received by the Dealer Managers pursuant to Section 3(a) hereof. The relative fault of the Company and the Guarantors, on the one hand, and of the Dealer Managers, on the other, (i) in the case of

an untrue or alleged untrue statement of a material fact or an omission or alleged omission to state a material fact, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, any Guarantor or by the Dealer Managers and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, and (ii) in the case of any other action or omission, shall be determined by reference to, among other things, whether such action or omission was taken or omitted to be taken by the Company, any Guarantor or by the Dealer Managers and the parties’ relative intent, knowledge, access to information, and opportunity to prevent such action or omission.

(e) Limitation on Liability. The Company, the Guarantors and the Dealer Managers agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of this Section 9, in no event shall a Dealer Manager be required to contribute any amount in excess of the amount by which the fees actually received by such Dealer Manager pursuant to Section 3(a) hereof exceed the amount of any damages that such Dealer Manager has otherwise been required to pay in connection with its role as a Dealer Manager pursuant to this Agreement. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(f) Non-Exclusive Remedies. The remedies provided for in this Section 9 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Person at law or in equity.

10. Survival. The indemnity and contribution agreements contained in Section 9 hereof and the covenants, representations and warranties of the Company and the Guarantors set forth in this Agreement shall remain operative and in full force and effect regardless of (a) any failure to commence, or the withdrawal, termination or consummation of, the Exchange Offer or the termination or assignment of this Agreement, (b) any investigation made by or on behalf of any Indemnified Person, (c) any withdrawal or termination by the Dealer Managers pursuant to Section 13(b) hereof or otherwise and (d) the issuance and delivery of the New Securities pursuant to the Exchange Offer.

11. Dealer Manager Information. The Company and the Guarantors acknowledge that the following information set forth in the Exchange Offer Materials constitutes the Dealer Manager Information: the second, third and fourth sentences of the third paragraph under the caption “The Dealer Managers” in the Prospectus.

12. Confidentiality. Any advice or opinions provided by either of the Dealer Managers in connection with or related to this Agreement shall not be disclosed to any third party or referred

to publicly by the Company or any Guarantor without such Dealer Manager’s prior written consent except (a)(i) to such Dealer Manager’s officers, directors and employees (such employees being those who are involved in this matter on a need to know basis), (ii) to such Dealer Manager’s legal advisors who are involved in this matter on a need to know basis provided they have been made aware of the confidential nature of such information, and (iii) to such Dealer Manager’s accountants and other advisors who are involved in this matter on a need to know basis provided they have been made aware of the confidential nature of such information and do not rely on such information, or (b) as may be compelled in a judicial or administrative proceeding or as otherwise necessary to comply with applicable law.

13. Termination.

(a) The Representative may terminate this Agreement, by notice to the Company, at any time at or prior to the Settlement Date, if there has been, since the time of execution of this Agreement or since the earlier of the respective dates as of which information is given in the Registration Statement, any Preliminary Prospectus and the Prospectus, a material adverse change, or any development involving a prospective material adverse change, in or affecting the business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the Company and its subsidiaries taken as a whole, whether or not arising in the ordinary course of business, the effect of which is such as to make it, in the Representative’s reasonable judgment, impracticable or inadvisable to proceed with the Exchange Offer in the manner described in the Exchange Offer Materials.

(b) In addition, if (i) the Company uses or permits the use of, or files with the Commission or any Other Agency, any Exchange Offer Materials (A) that have not been submitted to the Representative for its comments or (B) that have been so submitted and with respect to which the Representative has made comments, but which comments have not resulted in a response satisfactory to it and its counsel to reflect its comments, (ii) the Company or any Guarantor has breached any of its representations, warranties, agreements or covenants herein, or failed to fulfill any condition set forth in Section 8 hereof, (iii) there is a good faith disagreement between the Representative and the Company or any Guarantor with respect to a material term or condition of the Exchange Offer or the Exchange Offer Materials, (iv) the Exchange Offer is terminated or withdrawn for any reason or any stop order, restraining order, injunction or denial of an application for approval has been issued and not thereafter stayed or vacated with respect to the exchange of the Old Securities pursuant thereto or the performance of this Agreement, or any proceeding, litigation or investigation has been initiated that is reasonably likely to have a material adverse effect on the Company’s and any Guarantor’s ability to carry out the Exchange Offer or (v) a statute, rule, regulation or order shall have been enacted, adopted or issued by the Commission or any Other Agency that would prevent the making or consummation of the Exchange Offer or prevent the Dealer Managers from rendering their services pursuant to this Agreement or continuing so to act, as the case may be, then, in any such case, the Dealer Managers shall be entitled to withdraw as a Dealer Manager in connection with the Exchange Offer by written notice to the Company without any liability or penalty to the Dealer Managers or any other Dealer Manager Indemnitee (as defined in Section 9 hereof). The Company shall make any appropriate revision to the Prospectus or any Preliminary Prospectus to reflect such withdrawal or termination under this Section 13.

(c) If this Agreement is terminated by the Representative or either of the Dealer Managers withdraw as a Dealer Manager, pursuant to this Section 13, such termination or withdrawal shall be without liability of any party to any other party except as provided in Section 3 hereof, and except that Sections 1(b), 1(c), 9, 10, 13 and 14 hereof shall survive such termination and remain in full force and effect.

(d) If either of the Dealer Managers withdraws as a Dealer Manager or the Representative terminates this Agreement in accordance with the provisions of Sections 13(b) hereof, the Company agrees to pay to the Dealer Managers the fees accrued through the date of such termination or withdrawal, promptly after the Expiration Date. In the event of any such withdrawal, for the purpose of determining the fees payable to the Dealer Managers pursuant to this Agreement, the amount of Old Securities tendered as of the close of business on the date of such termination that are thereafter exchanged pursuant to the Exchange Offer, shall be deemed to have been exchanged, pursuant to the Exchange Offer, as of the date of such withdrawal.

14. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act; (b) the term “business day” means any day other than a day on which banks are permitted or required to be closed in New York City; (c) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act; and (d) the term “significant subsidiary” has the meaning set forth in Rule 1-02 of Regulation S-X under the Exchange Act.

15. Miscellaneous.

(a) Severability. In the event that any provision hereof shall be determined to be invalid or unenforceable in any respect, such determination shall not affect such provision in any other respect or any other provision hereof, which shall remain in full force and effect.

(b) Counterparts. This Agreement may be executed in one or more separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(c) Persons Entitled to Benefit of Agreement. This Agreement, including any right to indemnity or contribution hereunder, shall inure to the benefit of and be binding upon the Company, the Guarantors, the Dealer Managers and the other Indemnified Persons, and their respective successors and assigns. Nothing in this Agreement is intended, or shall be construed, to give to any other person or entity any right hereunder or by virtue hereof.

(d) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in such state.

(e) Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements, understandings and arrangements, oral or written, between the parties hereto with respect to the subject matter hereof.

(f) Amendments or Waivers. This Agreement may not be amended or modified except by a writing executed by each of the parties hereto.

(g) Assignment. This Agreement may not be assigned by any party hereto without the prior written consent of each other party hereto.

(h) Notices. All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally to the parties hereto as follows:

(i) If to the Dealer Managers:

J.P. Morgan Securities Inc.

383 Madison Avenue

New York, New York 10179

Attention: Equity Syndicate Desk

Facsimile: Fax: (212) 622-8358

with a copy to:

Davis Polk & Wardwell LLP

1600 El Camino Real

Menlo Park, CA 94025

Attention: Alan F. Denenberg

Facsimile: (650) 752-3604

(ii) If to the Company or the Guarantors:

American Medical Systems Holdings, Inc.

10700 Bren Road West

Minnetonka, MN 55343

Attention: Mark Heggestad

Facsimile: (952) 930-5730

with a copy to:

Latham & Watkins, LLP

650 Town Center Drive

Costa Mesa, CA 92626

Attention: Charles K. Ruck

Facsimile: (714) 755-8290

(i) Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

[SIGNATURE PAGES FOLLOW]

Please indicate your willingness to act as Representative and a Dealer Manager on the terms set forth herein and your acceptance of the foregoing provisions by signing in the space provided below for that purpose and returning to us a copy of this letter, whereupon this letter and your acceptance shall constitute a binding agreement between us.

Very truly yours,

AMERICAN MEDICAL SYSTEMS

HOLDINGS, INC.

Name:

Title:

GUARANTORS:

AMERICAN MEDICAL SYSTEMS, INC.

Name:

Title:

AMERICAN SALES CORPORATION

Name:

Title:

AMS RESEARCH CORPORATION

Name:

Title:

LASERSCOPE

Name:

Title:

Accepted as of the

date first above written:

J.P. MORGAN SECURITIES INC.

Name:

Title:

EX-4.13

Exhibit 4.13

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.,

as Issuer

THE SUBSIDIARY GUARANTORS PARTY HERETO,

as Guarantors

and

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

Indenture

DATED AS OF [    ], 2009

3.75% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2041

TABLE OF CONTENTS

	Page
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01.   Definitions	2
Section 1.02.   Compliance Certificates and Opinions	16
Section 1.03.   Form of Documents Delivered to Trustee	16
Section 1.04.   Acts of Holders; Record Dates	17
Section 1.05.   Notices, Etc., to Trustee, Company and Subsidiary Guarantors	18
Section 1.06.   Notice to Holders; Waiver	18
Section 1.07.   Conflict with Trust Indenture Act	19
Section 1.08.   Effect of Headings and Table of Contents	19
Section 1.09.   Successors and Assigns	19
Section 1.10.   Severability Clause	19
Section 1.11.   Benefits of Indenture	19
Section 1.12.   Governing Law; Waiver of Jury Trial	20
Section 1.13.   Legal Holiday	20
Section 1.14.   No Recourse Against Others	20
Section 1.15.   Force Majeure	20
Section 1.16.   U.S.A. Patriot Act	20
Section 1.17.   Execution in Counterparts	21
Section 1.18.   Calculations	21
Section 1.19.   Qualification Under the Trust Indenture Act	21
ARTICLE 2
SECURITY FORMS
Section 2.01.   Forms Generally	21
Section 2.02.   Form of Face of Security	22
Section 2.03.   Form of Reverse of Security	26
Section 2.04.   Form of Trustee’s Certificate of Authentication	35
ARTICLE 3
THE SECURITIES
Section 3.01.   Title and Terms; Payments	35
Section 3.02.   Denominations	36
Section 3.03.   Execution, Authentication, Delivery and Dating	36
Section 3.04.   Temporary Securities	36
Section 3.05.   Registration; Registration of Transfer and Exchange	37
Section 3.06.   Mutilated, Destroyed, Lost and Stolen Securities	38
Section 3.07.   Persons Deemed Owners	39

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Section 3.08.   Book-Entry Provisions for Global Securities	40
Section 3.09.   Cancellation and Transfer Provisions	41
Section 3.10.   CUSIP Numbers	41
ARTICLE 4
INTEREST
Section 4.01.   Generally	42
Section 4.02.   Contingent Interest	44
Section 4.03.   Trustee’s Responsibilities in Respect of Contingent Interest	44
Section 4.04.   Payment of Contingent Interest	44
Section 4.05.   Contingent Interest Notification	45
ARTICLE 5
SUBORDINATION
Section 5.01.   Agreement of Subordination	45
Section 5.02.   Payments to Holders	45
Section 5.03.   Subrogation of Securities	48
Section 5.04.   Authorization to Effect Subordination	49
Section 5.05.   Notice to Trustee	49
Section 5.06.   Trustee’s Relation to Senior Debt	50
Section 5.07.   No Impairment of Subordination	51
Section 5.08.   Certain Conversions Deemed Payment	51
Section 5.09.   No Impairment of Conversion Right	51
Section 5.10.   Existing Senior Subordinated Convertible Notes	52
Section 5.11.   Article Applicable to Paying Agents	52
Section 5.12.   Senior Debt Entitled to Rely	52
Section 5.13.   Reinstatement	52
Section 5.14.   Actions by Holders of Senior Debt	52
Section 5.15.   Subordination of Subsidiary Guarantees	53
ARTICLE 6
GUARANTEES
Section 6.01.   Subsidiary Guarantee	53
Section 6.02.   Execution and Delivery of The Subsidiary Guarantees	55
Section 6.03.   Limitation on Subsidiary Guarantors’ Liability	56
Section 6.04.   Rights Under The Subsidiary Guarantees	56
Section 6.05.   Primary Obligations	57
Section 6.06.   Subsidiary Guarantees By Future Domestic Subsidiaries	57
Section 6.07.   Release of Subsidiary Guarantors	58

ii

ARTICLE 7
COVENANTS
Section 7.01.   Payments	58
Section 7.02.   Maintenance of Office or Agency	59
Section 7.03.   Appointments to Fill Vacancies in Trustee’s Office	59
Section 7.04.   Money for Security Payments to be Held in Trust	59
Section 7.05.   Statement by Officers as to Default	60
Section 7.06.   Existence	61
Section 7.07.   Book-Entry System	61
Section 7.08.   Additional Interest	61
Section 7.09.   Commission Filings and Reports	61
Section 7.10.   Stay, Extension and Usury Laws	62
Section 7.11.   Information for IRS Filings	62
Section 7.12.   Further Instruments and Acts	62
Section 7.13.   Tax Treatment of the Securities	62
Section 7.14.   Limitation on Incurring Senior Subordinated Indebtedness	63
ARTICLE 8
REDEMPTION
Section 8.01.   Right to Redeem; Notices to Trustee	63
Section 8.02.   Selection of Securities to be Redeemed	64
Section 8.03.   Notice of Redemption	65
Section 8.04.   Effect of Notice of Redemption	66
Section 8.05.   Deposit of Redemption Price	66
Section 8.06.   Securities Redeemed in Part	66
ARTICLE 9
FUNDAMENTAL CHANGES AND REPURCHASES THEREUPON
Section 9.01.   Repurchase at Option of Holders Upon a Fundamental Change	67
Section 9.02.   Effect of Fundamental Change Repurchase Notice	70
Section 9.03.   Withdrawal of Fundamental Change Repurchase Notice	70
Section 9.04.   Deposit of Fundamental Change Repurchase Price	70
Section 9.05.   Securities Repurchased in Whole or in Part	71
Section 9.06.   Covenant to Comply with Securities Laws Upon Repurchase of Securities Pursuant to a Fundamental Change Repurchase Notice	71
Section 9.07.   Repayment to the Company	71
ARTICLE 10
REPURCHASES AT THE OPTION OF THE HOLDER
Section 10.01.   Generally	72

iii

Section 10.02.   Effect of A Repurchase Election Notice	74
Section 10.03.   Withdrawal of Repurchase Election Notice	74
Section 10.04.   Deposit of Repurchase Price	74
Section 10.05.   Securities Repurchased in Whole or Part	75
Section 10.06.   No Payments During Events of Default	75
Section 10.07.   Payment of Repurchase Price	75
Section 10.08.   Covenant to Comply with Securities Laws Upon Repurchase of Securities Pursuant to a Repurchase Election Notice	75
Section 10.09.   Repayment to the Company	76
ARTICLE 11
CONVERSION
Section 11.01.   Conversion Obligation	76
Section 11.02.   Conversion Procedure	80
Section 11.03.   Adjustment of Conversion Rate	92
Section 11.04.   Shares to Be Fully Paid	92
Section 11.05.   Adjustments of Average Prices	93
Section 11.06.   Adjustments Upon a Make-Whole Fundamental Change	93
Section 11.07.   Effect of Recapitalizations, Reclassifications and Changes to the Common Stock	95
Section 11.08.   Certain Covenants	96
Section 11.09.   Responsibility of Trustee	96
Section 11.10.   Notice to Holders Prior to Certain Actions	97
Section 11.11.   Stockholder Rights Plans	98
ARTICLE 12
EVENTS OF DEFAULT; REMEDIES
Section 12.01.   Events of Default	98
Section 12.02.   Acceleration of Maturity; Rescission and Annulment	100
Section 12.03.   Additional Interest	101
Section 12.04.   Collection of Indebtedness and Suits for Enforcement by Trustee	102
Section 12.05.   Trustee may File Proofs of Claim	102
Section 12.06.   Application of Money Collected	102
Section 12.07.   Limitation on Suits	103
Section 12.08.   Unconditional Right of Holders to Receive Payment	104
Section 12.09.   Restoration of Rights and Remedies	104
Section 12.10.   Rights and Remedies Cumulative	104
Section 12.11.   Delay or Omission Not Waiver	104
Section 12.12.   Control by Holders	104
Section 12.13.   Waiver of Past Defaults	105
Section 12.14.   Undertaking for Costs	105

iv

ARTICLE 13
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 13.01.   Company May Consolidate, etc., Only on Certain Terms	106
Section 13.02.   Successor Substituted	106
ARTICLE 14
THE TRUSTEE
Section 14.01.   Certain Duties and Responsibilities	106
Section 14.02.   Notice of Defaults	107
Section 14.03.   Certain Rights of Trustee	107
Section 14.04.   Not Responsible for Recitals	109
Section 14.05.   May Hold Securities	110
Section 14.06.   Money Held in Trust	110
Section 14.07.   Compensation, Reimbursement; Indemnification	110
Section 14.08.   Disqualification; Conflicting Interests	111
Section 14.09.   Corporate Trustee Required; Eligibility	111
Section 14.10.   Resignation and Removal; Appointment of Successor	111
Section 14.11.   Acceptance of Appointment by Successor	113
Section 14.12.   Merger, Conversion, Consolidation or Succession to Business	113
Section 14.13.   Preferential Collection of Claims against the Company	113
ARTICLE 15
HOLDERS’ LISTS AND REPORTS BY TRUSTEE
Section 15.01.   Company to Furnish Trustee Names and Addresses of Holders	114
Section 15.02.   Preservation of Information; Communications to Holders	114
Section 15.03.   Reports by Trustee	115
ARTICLE 16
SATISFACTION AND DISCHARGE
Section 16.01.   Satisfaction and Discharge of Indenture	115
Section 16.02.   Application of Trust Money	116
Section 16.03.   Release Of Subsidiary Guarantors	116
ARTICLE 17
SUPPLEMENTAL INDENTURES
Section 17.01.   Supplemental Indentures Without Consent of Holders	116
Section 17.02.   Supplemental Indentures With Consent of Holders	117
Section 17.03.   Execution of Supplemental Indentures	118

v

Section 17.04.   Effect of Supplemental Indentures	119
Section 17.05.   Notice of Supplemental Indenture	119
Section 17.06.   Conformity with Trust Indenture Act	119
Section 17.07.   Reference in Securities to Supplemental Indentures	119

vi

INDENTURE, dated as of [    ], 2009, among American Medical Systems Holdings, Inc., a corporation duly organized and existing under the laws of the State of Delaware, as Issuer (the “Company”), having its principal office at 10700 Bren Road West, Minnetonka, Minnesota 55343, the Subsidiary Guarantors (as defined herein) and U.S. Bank National Association, a national banking association organized and existing under the laws of the United States, as Trustee (the “Trustee”).

RECITALS OF THE COMPANY

WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issue of [·]% Convertible Senior Subordinated Notes due 2041 in aggregate amount not to exceed $250,000,000 (each a “Security” and collectively, the “Securities”) of the terms, tenor, amount and other provisions hereinafter set forth, and, to provide therefor, has duly authorized the execution and delivery of this Indenture; and

WHEREAS, the Subsidiary Guarantors have agreed to provide certain Guarantees (as defined herein) of the Securities, having the terms, tenor, amount and other provisions hereinafter set forth and, to provide therefor, each Subsidiary Guarantor has duly authorized the execution and delivery of this Indenture; and

WHEREAS, the Securities, the certificate of authentication to be borne by the Securities, a form of guarantee, a form of assignment, a form of option to elect repayment upon a Fundamental Change (as defined herein), a form of option to elect repayment on a Repurchase Date (as defined herein), a form of conversion notice and certificate of transfer to be borne by the Securities are to be substantially in the forms hereinafter provided for; and

WHEREAS, all acts and things necessary to make the Securities, when executed by the Company and authenticated and delivered by the Trustee or other authorized agent, as provided in this Indenture, the valid, binding and legal obligations of the Company, and all acts and things necessary to make the Guarantees, when executed by the Subsidiary Guarantors and delivered hereunder, as in this Indenture provided, the valid, binding and legal obligation of the Subsidiary Guarantors, and to make this Indenture a valid agreement of the Company and the Subsidiary Guarantees, in accordance with the terms of the Securities, the Subsidiary Guarantees and the Indenture, have been done and performed, and the execution of this Indenture and the issue hereunder of the Securities and the Subsidiary Guarantees have in all respects been duly authorized.

THIS INDENTURE WITNESSETH, for and in consideration of the premises and the exchange of the Securities for the Company’s 3.25% Convertible Senior Subordinated Notes due 2036 (the “Existing Securities”) pursuant to the exchange offer as set forth in the Final Prospectus (as defined herein), it is mutually covenanted and agreed, for the equal and proportionate benefit of the Holders (as defined herein) of the Securities as follows:

1

ARTICLE 1

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.01. Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(i) the terms defined in this Article 1 have the meanings assigned to them in this Article 1 and include the plural as well as the singular;

(ii) all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

(iii) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP; and

(iv) the words “herein,” “hereof’ and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

“Act,” when used with respect to any Holder, has the meaning specified in Section 1.04.

“Additional Interest” means all amounts, if any, payable pursuant to Section 12.03 hereof.

“Additional Shares” has the meaning specified in Section 11.06.

“Adjustment Determination Date” has the meaning specified in Section 11.03(j).

“Adjustment Event” has the meaning specified in Section 11.03(j).

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

2

“Agent Members” has the meaning specified in Section 3.08.

“AMS” means American Medical Systems, Inc., a Delaware corporation and a wholly-owned Subsidiary of the Company.

“Bid Solicitation Agent” means an independent nationally recognized securities dealer selected by the Company to solicit market bid quotations for the Securities, which shall in no event be an Affiliate of the Company. The Trustee shall initially be the Bid Solicitation Agent.

“Board of Directors” means, with respect to any Person, either the board of directors of such Person or any duly authorized committee of that board.

“Board Resolution” means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“Business Day” means any day other than a Saturday, a Sunday, a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.

“Capital Stock” means any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock and, with respect to partnerships, partnership interests (whether general or limited) and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership.

“Code” means the Internal Revenue Code of 1986, as amended.

“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

“Common Stock” means the shares of common stock, par value $0.01 per share, of the Company as they exist on the date of this Indenture or any other shares of Capital Stock of the Company into which the Common Stock shall be reclassified or changed or, in the event of a merger, consolidation or other similar transaction involving the Company that is otherwise permitted hereunder in which the Company is not the surviving corporation, the common stock, common equity interests, ordinary shares or depositary shares or other certificates representing common equity interests of such surviving corporation or its direct or indirect parent corporation.

3

“Company” has the meaning specified in the Recitals to this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.

“Company Request” or “Company Order” means a written request or order signed in the name of the Company by any Officer of the Company, and delivered to the Trustee.

“Contingent Debt Regulations” has the meaning specified in Section 7.13.

“Contingent Interest” has the meaning specified in Section 4.02(a).

“Conversion Agent” means the Trustee or such other office or agency designated by the Company where Securities may be presented for conversion.

“Conversion Date” has the meaning specified in Section 11.02(e).

“Conversion Price” means as of any date $1,000 divided by the Conversion Rate as of such date.

“Conversion Rate” has the meaning specified in Section 11.01(a).

“Conversion Value” means, at any date, the product of (i) the Conversion Rate in effect on such date and (ii) the average of the Volume-Weighted Average Prices of the Common Stock for the five consecutive Trading Days ending on the Trading Day immediately preceding the such date. In calculating the Conversion Value of any Security, the principal amount of such Security shall be multiplied by the Conversion Value calculated in the preceding sentence and divided by $1,000.

“Corporate Trust Office” means the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular time, be principally administered, which office is, at the date of this Indenture, located at U.S. Bank National Association, [633 West 5^th Street, 24^th Floor, Los Angeles, California 90071], Attention: [Corporate Trust Services], and shall mean for purposes of Section 7.02, U.S. Bank National Association, [· ], Attention: [Bondholder Communications Dept.]

“Corporation” means a corporation, association, company, joint-stock company or business trust.

“Credit Agreement” means the Credit and Guaranty Agreement entered into on July 20, 2006 by and among AMS, as borrower, each of the Company’s majority-owned direct domestic subsidiaries and the Company, as Guarantors,

4

CIT Healthcare LLC, as agent, and certain lenders from time to time party thereto, as amended on October 29, 2007 and August 12, 2009, and any amendment, modification, renewal, extension, or refinancing of such Credit and Guaranty Agreement; provided that such amended, modified, renewed, extended, or refinanced Credit and Guaranty Agreement is (i) an unsubordinated credit facility with a group of institutional lenders and (ii) contains restrictions on conversion of the Securities (including, without limitation, the provision by the Company for the cash payment upon conversion of the Securities), which restrictions shall not be materially less favorable to the Holders than the terms of the Credit and Guaranty agreement as initially entered into.

“Daily Conversion Value” has the meaning specified in Section 11.02(a).

“Daily Settlement Amount” has the meaning specified in Section 11.02(a).

“Default” means any event that is or with the passage of time or the giving of notice or both would become an Event of Default.

“Depositary” means The Depository Trust Company until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Depositary” shall mean such successor Depositary.

“Domestic Subsidiary” means any Subsidiary of the Company or any of the Company’s Subsidiaries that is organized and existing under the laws of the United States of America or any state thereof or the District of Columbia.

“Event of Default” has the meaning specified in Section 12.01.

“Ex-Dividend Date” means, with respect to any dividend, distribution or issuance on the Common Stock or any other equity security, the first date on which the shares of Common Stock or such other equity security trade on the applicable exchange or in the applicable market, regular way, without the right to receive such issuance, dividend or distribution.

“Existing Securities” has the meaning specified in the Recitals to this Indenture.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“Final Prospectus” means the final prospectus dated August 14, 2009, relating to the Securities and filed by the Company with the SEC pursuant to Rule 424(b) promulgated under the Securities Act on 14, 2009.

5

“Fundamental Change” shall mean the occurrence of any of the following:

(i) a “person” or “group” within the meaning of Section 13(d) of the Exchange Act other than the Company, its Subsidiaries and the Company’s and its Subsidiaries’ employee benefit plans files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Common Stock representing more than 50% of the voting power of all shares of the Company’s common equity; or

(ii) consummation of any share exchange, consolidation or merger of the Company pursuant to which the Common Stock will be converted into cash, securities or other property or any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any person other than the Company or one of its Subsidiaries; provided, however, that a transaction (A) that does not result in a reclassification, conversion, exchange or cancellation of the outstanding Common Stock (provided, however, that this subclause (A) shall not apply to any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any Person other than one of the Company’s Subsidiaries), or (B) that is effected solely to change the Company’s jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of common stock of the surviving entity or (C) pursuant to which the holders of all classes of the Company’s common equity immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of common equity of the continuing or surviving corporation or transferee or the parent thereof immediately after such event shall, in each case, not be deemed a Fundamental Change;

(iii) the Company’s stockholders approve any plan or proposal for the liquidation or dissolution of the Company;

(iv) the Common Stock or other common stock into which the Securities are convertible cease to be listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors).

Notwithstanding the foregoing, a Fundamental Change as a result of clause (i) or (ii) above will not be deemed to have occurred if at least 90% of the consideration received or to be received by holders of Common Stock

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(excluding cash payments for fractional shares) in connection with the transaction or transactions constituting the Fundamental Change consists of shares of common stock that are listed or traded on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions the Securities become convertible into such consideration, excluding cash payments for fractional shares (subject to Section 11.02).

“Fundamental Change Company Notice” has the meaning specified in Section 9.01(b).

“Fundamental Change Repurchase Date” has the meaning specified in Section 9.01(a).

“Fundamental Change Repurchase Notice” has the meaning specified in Section 9.01(a).

“Fundamental Change Repurchase Price” has the meaning specified in Section 9.01(a).

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, in each case, as in effect in the United States on the date hereof.

“Global Security” means a Security in global form registered in the Security Register in the name of a Depositary or a nominee thereof.

“Guarantee” means any obligation, contingent or otherwise, of any Person guaranteeing in any manner any indebtedness of any other Person. The term “Guarantee” used as a verb has a corresponding meaning. The term “Guarantor” shall mean any Person guaranteeing any obligation.

“Holder” means a Person in whose name a Security is registered in the Security Register.

“Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively.

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“Initial Conversion Rate” has the meaning specified in Section 11.03.

“Initial Conversion Value” means [·]

“Interest” means (i) Regular Interest, (ii) Contingent Interest, if any, and (iii) Additional Interest, if any.

“Interest Payment Date” means, with respect to any payment of Interest, each March 15 and September 15 of each year, beginning March 15, 2010.

“Investment Company Act” means the Investment Company Act of 1940 and any statutory successor thereto, in each case as amended from time to time.

“Issue Date” means the date the Securities are originally issued as set forth on the face of the Security under this Indenture.

“Junior Securities” has the meaning specified in Section 5.08.

“Last Reported Sale Price” of the Common Stock on any date means the closing sale price per share (or if no closing sale price is reported, the average of the last bid and last ask prices or, if more than one in either case, the average of the average last bid and the average last ask prices) on that date as reported in composite transactions for the principal U.S. securities exchange on which the Common Stock is traded. If the Common Stock is not listed for trading on a U.S. national or regional securities exchange on the relevant date, the Last Reported Sale Price will be the last quoted bid price for the Common Stock) in the over-the-counter market on the relevant date as reported by Pink OTC Markets Inc. or a similar organization. If the Common Stock is not so quoted, the Last Reported Sale Price will be the average of the mid-point of the last bid and last ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose. Any such determination will be conclusive absent manifest error.

“Majority Owned” means, with respect to an entity, that another entity has “beneficial ownership” (as defined in Rule 13(d)(3) under the Exchange Act) of more than 50% of the total voting power of all shares of the first entity’s Capital Stock that are entitled to vote generally in the election of directors. “Majority Owner” has the correlative meaning.

“Make-Whole Effective Date” has the meaning specified in Section 11.06(b).

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“Make-Whole Fundamental Change” means any transaction or event that constitutes a Fundamental Change (determined after giving effect to any exceptions or exclusions to such definition, but without regard to subclause (C) in the proviso in clause (ii) of the definition thereof).

“Market Disruption Event” means (i) a failure by the primary United States national or regional securities exchange or market on which the Common Stock is listed or admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Trading Day for the Common Stock for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Common Stock or in any options, contracts or future contracts relating to the Common Stock.

“Maturity,” when used with respect to any Security, means the date on which the principal, Redemption Price, Fundamental Change Repurchase Price or Repurchase Price of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity, on a Redemption Date, Fundamental Change Repurchase Date or Repurchase Date, by declaration of acceleration or otherwise.

“Measurement Period” has the meaning specified in Section 11.02(a)(ii).

“Net Tangible Assets” means, as of any date of determination, the sum of the amounts that would appear on a consolidated balance sheet of the Company and its Domestic Subsidiaries as the total assets (less accumulated depreciation and amortization, allowances for doubtful receivables, other applicable reserves and other properly deductible items) after giving effect to purchase accounting and after deducting therefrom, current liabilities and, to the extent otherwise included in the determination of Net Tangible Assets, the amounts of (without duplication): (a) the excess of cost over fair market value of assets or businesses acquired; (b) unamortized debt discount and expenses and other unamortized deferred charges, goodwill, patents, trademarks, service marks, trade names, copyrights, licenses, organization, research and developmental expenses and other intangible items; (c) minority interests in Domestic Subsidiaries held, directly or indirectly, by persons other than the Company; (d) treasury stock; (e) cash or securities set aside and held in a sinking or other analogous fund established for the purpose of redemption or other retirement of Capital Stock to the extent such obligation is not reflected in current liabilities; and (f) the value of any Capital Stock of any foreign Subsidiary of the Company.

“New Subsidiary Guarantor” has the meaning specified in Section 6.06.

“Non-Payment Default” has the meaning specified in Section 5.02(b).

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“Notice of Conversion” has the meaning specified in Section 11.02(d).

“Notice of Default” has the meaning specified in Section 12.01.

“Observation Period” means, with respect to any Security surrendered for conversion, (i) if the relevant Conversion Date occurs on or after the date of issuance of a Notice of Redemption pursuant to Section 8.03, but prior to the relevant Redemption Date, the 20 consecutive Trading Days beginning on and including the third Scheduled Trading Day after such Redemption Date; (ii) if the relevant Conversion Date occurs during the 60 days prior to, but excluding, September 15, 2016 or September 15, 2041, the 20 consecutive Trading Days beginning on and including the third Scheduled Trading Day after September 15, 2016 or September 15, 2041, as applicable; and (iii) in all other instances, the 20 consecutive Trading Days beginning on and including the third Scheduled Trading Day after the relevant Conversion Date.

“Officer” means the Chairman or any Co-Chairman of the Board of Directors, any Vice Chairman of the Board of Directors, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Secretary, or any Assistant Secretary of the Company or any of the Subsidiary Guarantors, as the case may be.

“Officers’ Certificate” means a certificate signed on behalf of the Company or a Subsidiary Guarantor, as the case may be, by two Officers thereof, and delivered to the Trustee. One of the Officers signing an Officers’ Certificate given pursuant to Section 7.05 shall be the principal executive, financial or accounting officer of the Company or such Subsidiary Guarantor, as the case may be.

“Opinion of Counsel” means a written opinion of counsel, who may be external or in-house counsel for the Company, and who shall be reasonably acceptable to the Trustee.

“Outstanding,” when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:

(i) Securities theretofore cancelled by the Trustee or accepted by the Trustee for cancellation;

(ii) Securities, or portions thereof, for whose payment, redemption or repurchase money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such

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Securities; provided that if such Securities are to be redeemed or repurchased prior to the maturity thereof, notice of such redemption or repurchase shall have been given to the Holders as herein provided, or provision satisfactory to a Responsible Officer of the Trustee shall have been made for giving such notice; and

(iii) Securities that have been paid or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture;

provided, however, that, in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company, any Subsidiary Guarantor or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company, any Subsidiary Guarantor or any other obligor upon the Securities or any Affiliate of the Company, any Subsidiary Guarantor or of such other obligor.

“Paying Agent” means any Person (including the Company) authorized by the Company to pay the principal amount of, Interest on or Redemption Price, Fundamental Change Repurchase Price or Repurchase Price of, any Securities on behalf of the Company. The Trustee shall initially be the Paying Agent.

“Payment Blockage Notice” has the meaning specified in Section 5.02(b).

“Payment Default” has the meaning specified in Section 5.02(a).

“Person” means any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.

“Physical Securities” means permanent certificated Securities in registered form issued in denominations of $1,000 principal amount and multiples thereof.

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“Record Date” means, with respect to any payment of Interest, the close of business on each March 1 and September 1, as the case may be, immediately preceding the relevant Interest Payment Date (whether or not a Business Day).

“Regular Interest” has the meaning specified in Section 4.01(a).

“Redemption Date” shall mean the date specified for redemption of the Securities in accordance with the terms of the Securities and Article 8 hereof.

“Redemption Price” has the meaning specified in Section 8.01.

“Repurchase Date” has the meaning specified in Section 10.01(a).

“Repurchase Election Notice” has the meaning specified in Section 10.01(b).

“Repurchase Notice” has the meaning specified in Section 10.01(b).

“Repurchase Notice Date” has the meaning specified in Section 10.01(b).

“Repurchase Price” has the meaning specified in Section 10.01(a).

“Reference Property” has the meaning specified in Section 11.07(a).

“Representative” means the (i) indenture trustee or other trustee, agent or representative for any Senior Debt or (ii) with respect to any Senior Debt that does not have any such trustee, agent or other representative, (1) in the case of such Senior Debt issued pursuant to an agreement providing for voting arrangements as among the holders or owners of such Senior Debt, any holder or owner of such Senior Debt acting with the consent of the required Persons necessary to bind such holders or owners of such Senior Debt and (2) in the case of all other such Senior Debt, the holder or owner of such Senior Debt.

“Responsible Officer” means any officer of the Trustee within the Corporate Trust Office of the Trustee with direct responsibility for the administration of this Indenture and also, with respect to a particular matter, any other officer of the Trustee to whom such matter is referred because of such officer’s knowledge and familiarity with the particular subject.

“Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the primary United States national securities exchange or market on which the Common Stock is listed or admitted for trading. If the Common Stock is not so listed or admitted for trading, “Scheduled Trading Day” shall mean a Business Day.

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“Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

“Security” or “Securities” has the meaning specified in the Recitals to this Indenture, and includes any Security or Securities, as the case may be, authenticated and delivered under this Indenture, including any Global Security.

“Security Register” and “Security Registrar” have the respective meanings specified in Section 3.05. The Trustee shall initially be the Security Registrar.

“Senior Debt” means, with respect to the Company, the principal of, premium, if any, interest on, including any interest accruing after the commencement of any bankruptcy or similar proceeding, whether or not a claim for post-petition interest is allowed as a claim in the proceeding, or termination payment with respect to or in connection with, and all fees, costs, expenses and other amounts accrued or due on or under, the Credit Agreement and any Guarantees thereof (including by any pledge, lien or security interest of collateral with respect thereto), as such facility may be amended, modified or supplemented from time to time, including any deferrals, renewals, extensions, refinancings or refundings thereof.

“Settlement Amount” has the meaning specified in Section 11.02(a).

“Spin-Off” has the meaning specified in Section 11.03(c).

“Stated Maturity,” when used with respect to any Security, means the date specified in such Security as the fixed date on which an amount equal to the principal amount of such Security together with accrued and unpaid Interest, if any, is due and payable.

“Stock Price” means, with respect to the Common Stock in connection with a Make-Whole Fundamental Change, (i) if holders of Common Stock receive only cash in a Make-Whole Fundamental Changed described in clause (ii) of the definition of Fundamental Change, the cash amount paid per share of Common Stock and (ii) if holders of Common Stock receive any consideration other than cash in such Make-Whole Fundamental Change, the average of the Last Reported Sales Price of the Common Stock over the five Trading Day period ending on, and including, the Trading Day immediately preceding the effective date of such Make-Whole Fundamental Change.

“Stock Transfer Agent” means [Wells Fargo Bank, National Association] or such other Person as may be designated by the Company as the transfer agent for the Common Stock.

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“Subsidiary” means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, “voting stock” means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.

“Subsidiary Guarantees” means Guarantees of the Company’s obligations under this Indenture and the Securities by the Subsidiary Guarantors in accordance with the provisions of this Indenture.

“Subsidiary Guarantors” means AMS, AMS Sales Corporation, AMS Research Corporation and Laserscope and each other Person that guarantees the Company’s obligations hereunder and under the Securities pursuant to Article 6 hereof and/or who executes a supplemental indenture to this Indenture providing for a Subsidiary Guarantee.

“Surviving Entity” has the meaning specified in Section 13.01.

“Tax Triggering Event” means the enactment of U.S. federal legislation, promulgation of Treasury regulations, issuance of a published ruling, notice, announcement or equivalent form of guidance by the Treasury or the Internal Revenue Service, or the issuance of a judicial decision if the Company determines, or receives an opinion of its outside counsel to the effect that, any such authority will have the effect of lowering the comparable yield or delaying or otherwise limiting the current deductibility of interest or original issue discount with respect to the Securities, provided that the Company determines that such reduction, delay, or limitation is material.

“Trading Day” means a day on which (i) trading of the Common Stock generally occurs on The NASDAQ Global Select Market, or if the Common Stock is not then listed on The NASDAQ Global Select Market on the principal other United States national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a United States national or regional securities exchange, on the principal other market on which the Common Stock is then traded, or (ii) a Last Reported Sale Price for the Common Stock is available on such securities exchange or market. If the Common Stock (or other security for which the closing sale price must be determined) is not so listed or traded, “Trading Day” means any Business Day.

“Trading Price” of the Securities on any date of determination means the average of the secondary market bid quotations per $1,000 principal amount of Securities obtained by the Bid Solicitation Agent (or for purposes of Section 4.02, the Trustee) for $5,000,000 principal amount of Securities at approximately 3:30 p.m., New York

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City time, on such determination date from three independent nationally recognized securities dealers that are selected by the Company; provided that if at least three such bids cannot reasonably be obtained by the Bid Solicitation Agent (or for purposes of Section 4.02, the Trustee), but two such bids can reasonably be obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained, that one bid shall be used. For purposes of Section 4.02, if the Trustee cannot reasonably obtain at least one such bid for $5,000,000 principal amount of Securities from a Bid Solicitation Agent selected by the Company or, in the reasonable judgment of the Company’s Board of Directors, the bid quotations are not indicative of the secondary market value of the Securities, the Trading Price per $1,000 principal amount of the Securities will be determined by the Company’s Board of Directors based on a good faith estimate of the fair value of the Securities.

“Trading Price Condition” has the meaning specified in Section 11.02(a)(ii).

“Trust Indenture Act” means the Trust Indenture Act of 1939 as in effect on the date as of which this Indenture was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

“Trustee” has the meaning specified in the Recital of this Agreement until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean such successor Trustee.

“Upside Trigger” means $1,300 per $1,000 principal amount of Securities.

“Vice President,” when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title “vice president.”

“Valuation Period” has the meaning specified in 11.03(c).

“Volume-Weighted Average Price” means the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “AMMD.UQ <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of the Common Stock on such Trading Day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by the Company). The Volume-Weighted Average Price will be determined without regard to after hours trading or any other trading outside of the regular trading session trading hours.

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Section 1.02. Compliance Certificates and Opinions. Upon any application or request by the Company or a Subsidiary Guarantor to the Trustee to take any action under any provision of this Indenture, the Company or such Subsidiary Guarantor, as applicable, shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers’ Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirement set forth in this Indenture.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(a) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(c) a statement that, in the opinion of each such individual, such individual has made such examination or investigation as is necessary to enable such individual to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

Section 1.03. Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates

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to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company or a Subsidiary Guarantor, as applicable, stating that the information with respect to such factual matters is in the possession of the Company or a Subsidiary Guarantor, as applicable, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Section 1.04. Acts of Holders; Record Dates. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as an “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 14.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section 1.04.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee reasonably deems sufficient.

(c) The Company may, in the circumstances permitted by the Trust Indenture Act, fix any day as the record date for the purpose of determining the Holders entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action, or to vote on any action, authorized or permitted to be given or taken by Holders. If not set by the Company prior to the first solicitation of a Holder made by any Person in respect of any such action, or, in the

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case of any such vote, prior to such vote, the record date for any such action or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 15.01) prior to such first solicitation or vote, as the case may be. With regard to any record date, only the Holders on such date (or their duly designated proxies) shall be entitled to give or take, or vote on, the relevant action.

(d) The ownership of Securities shall be proved by the Security Register.

(e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.

Section 1.05. Notices, Etc., to Trustee, Company and Subsidiary Guarantors. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with:

(i) the Trustee by any Holder, by the Company or by any Subsidiary Guarantor shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (including facsimile) to or with the Trustee at its applicable Corporate Trust Office; or

(ii) the Company or any Subsidiary Guarantor by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing (including facsimile) and mailed, first-class postage prepaid, to the Company addressed to it or such Subsidiary Guarantor at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company or such Subsidiary Guarantor, Attention: Secretary.

Section 1.06. Notice to Holders; Waiver. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at such Holder’s address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where

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this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

Whenever under this Indenture the Trustee is required to provide any notice by mail, in all cases the Trustee may alternatively provide notice by overnight courier or by facsimile, with confirmation of transmission.

Section 1.07. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required hereunder to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.

Section 1.08. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof, and all Article and Section references are to Articles and Sections, respectively, of this Indenture unless otherwise expressly stated.

Section 1.09. Successors and Assigns. All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

Section 1.10. Severability Clause. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 1.11. Benefits of Indenture. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their respective successors hereunder and the Holders of Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture.

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Section 1.12. Governing Law; Waiver of Jury Trial. This Indenture, the Securities and the Subsidiary Guarantees, and any claim, controversy, or dispute arising under or related to this Indenture, the Securities and the Subsidiary Guarantees, shall be governed by and construed in accordance with the laws of the State of New York without regard to the conflicts of law principles thereof. EACH OF THE COMPANY, EACH SUBSIDIARY GUARANTOR AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES, THE SUBSIDIARY GUARANTEES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 1.13. Legal Holiday. In any case where the Stated Maturity of any Security shall not be a Business Day, then (notwithstanding any other provision of this Indenture or the Securities) payment of principal need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on at the Stated Maturity. If any Interest Payment Date, the Stated Maturity or any earlier Fundamental Change Repurchase Date of a Security falls on a day that is not a Business Day, the required payment will be made on the next succeeding Business Day and no Interest on such payment will accrue in respect of the delay.

Section 1.14. No Recourse Against Others. None of the Company’s, any of the Subsidiary Guarantors’ or any of their respective successor entity’s, direct or indirect stockholders, employees, officers or directors, as such, past, present or future, shall have any personal liability in respect of the obligations of the Company under the Indenture, the Securities or the Subsidiary Guarantees solely by reason of his, her or its status as such stockholder, employee, officer or director.

Section 1.15. Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

Section 1.16. U.S.A. Patriot Act. The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that

20

establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.

Section 1.17. Execution in Counterparts. This Indenture may be executed in two or more counterparts, which when so executed shall constitute one and the same agreement. The exchange of copies of this Indenture and of signature pages by facsimile or Portable Document Format (“PDF”) transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

Section 1.18. Calculations. Except as otherwise provided herein, the Company or its agents (other than the Trustee) will be responsible for making all calculations and determinations called for under the Indenture and the Securities. The Company or its agents (other than the Trustee) will make all such calculations and determinations in good faith and, absent manifest error, its calculations and determinations will be final and binding on Holders. The Company upon request will provide a schedule of its calculations to the Trustee, and the Trustee is entitled to rely conclusively upon the accuracy of the Company’s calculations and determinations without independent verification. The Trustee will deliver a copy of such schedule to any Holder upon the written request of such Holder.

Section 1.19. Qualification Under the Trust Indenture Act. The Company shall qualify this Indenture under the Trust Indenture Act and shall pay all reasonable costs and expenses (including attorneys’ fees and expenses for the Company, the Trustee and the Holders) incurred in connection therewith, including, but not limited to, costs and expenses of qualification of this Indenture and the Securities and the printing of this Indenture and the Securities.

ARTICLE 2

SECURITY FORMS

Section 2.01. Forms Generally. The Securities and the Trustee’s certificates of authentication shall be in substantially the forms set forth in this Article 2, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary therefor, the Code and regulations thereunder, or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution thereof. Each Security shall include the Subsidiary Guarantee in the form of Exhibit A attached hereto, executed by the Subsidiary Guarantors existing on the date of issuance of such Note, the terms of which Exhibit are incorporated in and made a part of this Indenture.

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The Securities shall initially be issued in the form of permanent Global Securities in registered form in substantially the form set forth in this Article 2. The aggregate principal amount of the Global Securities may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary, as hereinafter provided.

[IF SECURITY IS A GLOBAL SECURITY — UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED

22

REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]

[INCLUDE IN ALL SECURITIES — THE OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN INDENTURE DATED AS OF EVEN DATE HEREWITH, BY AND AMONG AMERICAN MEDICAL SYSTEMS HOLDINGS, INC., AS ISSUER, THE SUBSIDIARY GUARANTORS PARTY THERETO, AS GUARANTORS, AND U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, AND EACH HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE INDENTURE, INCLUDING WITHOUT LIMITATION, THE SUBORDINATION TERMS THEREIN.]

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[·]% Convertible Senior Subordinated Notes due 2041

No.                                 CUSIP NO.                                 U.S. $                    

American Medical Systems Holdings, Inc., a corporation duly organized and validly existing under the laws of the State of Delaware (herein called the “Company”), which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to Cede & Co., or registered assigns, the principal sum of [·] ($[·]) (which amount may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary, in accordance with the rules and procedures of the Depositary) on September 15, 2041. Payment of the principal of this Security shall be made by check mailed to the address of the Holder of this Security specified in the register of Securities, or, at the option of the Company, by wire transfer in immediately available funds, in such lawful money of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.

The issue date of this Security is [    ], 2009.

Reference is made to the further provisions of this Security set forth on the reverse hereof, including, without limitation, provisions giving the Company the right to redeem this Security under certain circumstances and provisions giving the Holder the right to convert this Security into Common Stock of the Company and to require the Company to repurchase this Security upon certain events on at certain date, in each case, on the terms and subject to the limitations referred to on the reverse hereof and as more fully specified in the Indenture.

The Subsidiary Guarantors that are parties to the Indenture, and their successors under the Indenture, have jointly and severally, fully and unconditionally, guaranteed the payment of principal of and interest on the Securities, subject to the subordination provisions and other terms and conditions set forth in the Indenture.

Such further provisions shall for all purposes have the same effect as though fully set forth at this place. Capitalized terms used but not defined herein shall have such meanings as are ascribed to such terms in the Indenture.

This Security shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be construed in accordance with and governed by the laws of said State.

This Security shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by the Trustee or a duly authorized authenticating agent under the Indenture.

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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.
By:
	Authorized Signatory

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Section 2.03. Form of Reverse of Security.

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

[·]% Convertible Senior Subordinated Notes due 2041

This Security is one of a duly authorized issue of Securities of the Company, designated as its [·]% Convertible Senior Subordinated Notes due 2041 (the “Securities”), all issued or to be issued under and pursuant to an Indenture dated as of [    ], 2009 (the “Indenture”), among the Company, the Subsidiary Guarantors and U.S. Bank National Association (the “Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company, the Subsidiary Guarantors and the Holders of the Securities.

Interest. The Securities will bear Regular Interest at a rate of [·]% per year, payable semiannually in arrears on March 15 and September 15 of each year beginning on March 15, 2010. In addition to Regular Interest, the Securities will also bear Contingent Interest commencing on March 15, 2017, during any semiannual interest period in which the average trading price of the Securities for the five Trading Day period immediately preceding the first day of such semiannual period is greater than or equal to $1,300 per $1,000 principal amount of the Securities, at a rate of 0.75% of such trading price per annum. Pursuant to Section 12.03 of the Indenture, in certain circumstances, the Holders shall be entitled to receive Additional Interest.

Subordination. To the extent provided in the Indenture, the Securities and the Subsidiary Guarantees are subordinated to Senior Debt. To the extent provided in the Indenture, Senior Debt must be paid in full before the Securities may be paid. The Company and each Subsidiary Guarantor agrees, and each Holder by accepting a Security agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give it effect and appoints the Trustee as attorney-in-fact for such purpose.

Subsidiary Guarantees. The Company’s obligations under the Securities are fully and unconditionally guaranteed, jointly and severally, by the Subsidiary Guarantors as such Subsidiary Guarantors may change from time to time in accordance with the terms of the Indenture (including, without limitation, the subordination terms and conditions set forth in Article 5 of the Indenture).

Redemption at the Option of the Company. No sinking fund is provided for the Securities. The Securities are redeemable as a whole, or from time to time in part, (i) at any time commencing on September 15, 2016 at the option of the Company if the Last Reported Sale Price of the Common Stock has been greater than or equal to 130% of Conversion Price

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then in effect for at least 20 Trading Days (whether or not consecutive) during any 30 consecutive Trading Day period prior to the date on which the Company provides notice of redemption and (ii) on or prior to September 17, 2010, if certain U.S. federal tax legislation, regulations or rules are enacted or are issued. The redemption price (the “Redemption Price”) for any such redemption is equal to (a) in the case of a redemption described in clause (i) above, 100%, expressed as a percentage of the principal amount of Securities to be redeemed, together with accrued and unpaid Interest (subject to Section 4.01(c)(ii) of the Indenture) to, but excluding, the Redemption Date and (b) in the case of a redemption described in clause (ii) above, 101.5%, expressed as a percentage of the principal amount of Securities to be redeemed, together with accrued and unpaid Interest (subject to Section 4.01(c)(ii) of the Indenture) to, but excluding, the Redemption Date and, if the Conversion Value of the Securities being redeemed exceeds their Initial Conversion Value, 85% of the amount determined by subtracting the Initial Conversion Value of the Securities being redeemed from their Conversion Value.

Repurchase by the Company at the Option of the Holder Upon a Fundamental Change. Subject to the terms and conditions of the Indenture, the Company shall become obligated, at the option of the Holder, to repurchase the Securities if a Fundamental Change occurs at any time prior to the Stated Maturity at 100% of the principal amount plus accrued and unpaid Interest (subject to Section 4.01(c)(iii) of the Indenture) to, but excluding, the Fundamental Change Repurchase Date (the “Fundamental Change Repurchase Price”), which Fundamental Change Repurchase Price will be paid in cash.

Repurchase at the Option of the Holders. The Holders may require the Company to repurchase any outstanding Securities for cash on September 15, 2016 at a purchase price per Security equal to 100% of the aggregate principal amount of the Security, together with any accrued and unpaid interest, (subject to Section 4.01(c)(iv) of the Indenture) to but not including the applicable Repurchase Date.

Withdrawal of Fundamental Change Repurchase Notice and Repurchase Election Notice. Holders have the right to withdraw, in whole or in part, any Fundamental Change Repurchase Notice or Repurchase Election Notice, as the case may be, by delivering to the Paying Agent a written notice of withdrawal in accordance with the provisions of the Indenture.

Payment of Redemption Price, Fundamental Change Repurchase Price and Repurchase Price. If cash sufficient to pay the Redemption Price, Fundamental Change Repurchase Price or Repurchase Price, as the case may be, of all Securities or portions thereof to be redeemed or repurchased on a Redemption Date, a Fundamental Change Repurchase Date or Repurchase Date, as the case may be, is deposited with the Paying Agent on the Redemption Date,

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the Fundamental Change Repurchase Date or Repurchase Date, as the case may be, such Securities will cease to be outstanding and Interest will cease to accrue on such Securities (or portions thereof) immediately after such Redemption Date, Fundamental Change Repurchase Date or Repurchase Date, as the case may be, and the Holder thereof shall have no other rights as such (other than the right to receive the Redemption Price, Fundamental Change Repurchase Price or Repurchase Price, as the case may be, upon surrender of such Security).

Conversion. Subject to and in compliance with the provisions of the Indenture (including without limitation the conditions of conversion of this Security set forth in Article 11 thereof), the Holder hereof has the right, at its option, to convert the principal amount hereof or any portion of such principal which is $1,000 or a multiple thereof, into, subject to Section 11.01 of the Indenture, cash and shares of Common Stock, if any, at the Conversion Rate. The initial Conversion Rate (the “Initial Conversion Rate”) is 51.5318 shares of Common Stock per $1,000 principal amount of Securities, subject to adjustment in certain events described in the Indenture. Upon conversion, the Company shall deliver, for each $1,000 principal amount of Securities being converted, cash and shares of Common Stock, if any, equal to the Settlement Amount in accordance with the Indenture. No fractional shares will be issued upon any conversion, but an adjustment and payment in cash will be made, as provided in the Indenture, in respect of any fraction of a share which would otherwise be issuable upon the surrender of any Securities for conversion. Securities in respect of which a Holder is exercising its right to require repurchase on a Fundamental Change Repurchase Date or Repurchase Date may be converted only if such Holder withdraws its election to exercise such right in accordance with the terms of the Indenture.

In the event of a deposit or withdrawal of an interest in this Security, including an exchange, transfer, repurchase or conversion of this Security in part only, the Trustee, as custodian of the Depositary, shall make an adjustment on its records to reflect such deposit or withdrawal in accordance with the rules and procedures of the Depositary.

If an Event of Default shall occur and be continuing, the principal amount plus Interest through such date on all the Securities may be declared due and payable in the manner and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and any Subsidiary Guarantors and the rights of the Holders of the Securities under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Outstanding Securities, on behalf of the

28

Holders of all the Securities, to waive compliance by the Company and any Subsidiary Guarantors with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of any provision of or applicable to this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities, the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity satisfactory to it, the Trustee shall not have received from the Holders of a majority in principal amount of Outstanding Securities a direction inconsistent with such request, and the Trustee shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of the principal amount, Redemption Price, Fundamental Change Repurchase Price hereof on or after the respective due dates expressed herein or to convert the Securities in accordance with Article 11.

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal amount, Redemption Price, Fundamental Change Repurchase Price or Repurchase Price of, and Interest on, this Security at the times, place and rate, and in the coin or currency, herein prescribed.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

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The Securities are issuable only in registered form in denominations of $1,000 and any multiple of $1,000 above that amount, as provided in the Indenture and subject to certain limitations therein set forth. Securities are exchangeable for a like aggregate principal amount of Securities of a different authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or exchange, but the Company and the Security Registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and the Security Registrar and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

This Security shall be governed by and construed in accordance with the laws of the State of New York.

All terms used in this Security that are defined in the Indenture shall have the meanings assigned to them in the Indenture.

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ASSIGNMENT FORM

If you want to assign this Security, fill in the form below and have your signature guaranteed:

I or we assign and transfer this Security to:

(Print or type name, address and zip code and social security or tax ID number of assignee)

and irrevocably appoint                                                                                                    agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Date:  Signed: 

        (Sign exactly as your name appears on the other side of this Security)

        Signature Guarantee:                                                               

Note: Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

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CONVERSION NOTICE

If you want to convert this Security into Common Stock of the Company, check the box: ¨

To convert only part of this Security, state the principal amount to be converted (which must be $1,000 or a multiple of $1,000):

$                              

If you want the stock certificate made out in another person’s name, fill in the form below:

(Insert other person’s social security or tax ID no.)

(Print or type other person’s name, address and zip code)

Date:  Signed: 

        (Sign exactly as your name appears on the other side of this Security)

        Signature Guarantee:                                                               

Note: Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

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Form of Fundamental Change Repurchase Notice

                                             ,             

U.S. Bank National Association

[633 West 5^th Street, 24^th Floor

Los Angeles, California 90071]

Attention: [Corporate Trust Services]

Re: American Medical Services Holdings, Inc. (the “Company”)

[·]% Convertible Senior Subordinated Notes due 2041

This is a Fundamental Change Repurchase Notice as defined in Section 9.01(a) of the Indenture dated as of [    ], 2009 (the “Indenture”) among the Company, the Subsidiary Guarantors and U.S. Bank National Association, as Trustee. Terms used but not defined herein shall have the meanings ascribed to them in the Indenture.

Certificate No(s). of Securities:                                                              

I intend to deliver the following aggregate principal amount of Securities for purchase by the Company pursuant to Section 9.01 of the Indenture (in multiples of $1,000):

$                                                                   

I hereby agree that the Securities will be purchased as of the Fundamental Change Repurchase Date pursuant to the terms and conditions thereof and of the Indenture.

Date:  Signed: 

        (Sign exactly as your name appears on the other side of this Security)

        Signature Guarantee:                                                               

Note: Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

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Form of Repurchase Election Notice

                                             ,             

U.S. Bank National Association

[633 West 5^th Street, 24^th Floor

Los Angeles, California 90071]

Attention: [Corporate Trust Services]

Re: American Medical Services Holdings, Inc. (the “Company”)

[·]% Convertible Senior Subordinated Notes due 2041

This is a Repurchase Election Notice as defined in Section 10.01(b) of the Indenture dated as of [    ], 2009 (the “Indenture”) among the Company, the Subsidiary Guarantors and U.S. Bank National Association, as Trustee. Terms used but not defined herein shall have the meanings ascribed to them in the Indenture.

Certificate No(s). of Securities:                                                              

I intend to deliver the following aggregate principal amount of Securities for purchase by the Company pursuant to Section 10.01 of the Indenture (in multiples of $1,000):

$                                                               

I hereby agree that the Securities will be purchased as of the Repurchase Date pursuant to the terms and conditions thereof and of the Indenture.

Date:  Signed: 

        (Sign exactly as your name appears on the other side of this Security)

        Signature Guarantee:                                                               

Note: Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

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Section 2.04. Form of Trustee’s Certificate of Authentication. This is one of the Securities referred to in the within-mentioned Indenture.

Dated:                         

U.S. BANK NATIONAL ASSOCIATION, as Trustee
By
	Authorized Signatory

ARTICLE 3

THE SECURITIES

Section 3.01. Title and Terms; Payments. The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is limited to $250,000,000, except for Securities authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of, other Securities pursuant to Section 3.04, 3.05, 3.06, 8.06, 9.05, 10.05 or 17.07.

The Securities shall be known and designated as the “[· ]% Convertible Senior Subordinated Notes due 2041” of the Company. The principal amount shall be payable at the Stated Maturity.

The Securities shall not have the benefit of a sinking fund.

The Securities shall be subordinated to all Senior Debt of the Company.

The principal amount of and Interest on Global Securities registered in the name of The Depository Trust Company or its nominee shall be paid by wire transfer in immediately available funds to The Depository Trust Company or its nominee, as applicable.

The principal amount of Physical Securities shall be payable at the office or agency of the Company maintained for such purpose. Interest on Physical Securities will be payable (i) to Holders having an aggregate principal amount of $2,000,000 or less of Securities, by check mailed to such Holders and (ii) to Holders having an aggregate principal amount of more than $2,000,000 of Securities, either by check mailed to such Holders or, upon application by a Holder to the Security Registrar not later than the relevant Record Date for such Interest payment, by wire transfer in immediately available funds to such Holder’s account within the United States, which application shall remain in effect until the Holder notifies the Security Registrar to the contrary in writing.

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Section 3.02. Denominations. The Securities shall be issuable only in registered form without coupons and in denominations of $1,000 and a multiple of $1,000 above that amount.

Section 3.03. Execution, Authentication, Delivery and Dating. The Securities shall be executed on behalf of the Company by its Chairman or Co-Chairman of the Board of Directors, any Vice-Chairman of the Board of Directors, the President or any Vice President.

Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities. The Company Order shall specify the amount of Securities to be authenticated, and shall further specify the amount of such Securities to be issued as a Global Security or as Physical Securities. The Trustee in accordance with such Company Order shall authenticate and deliver such Securities as in this Indenture provided and not otherwise.

Each Security shall be dated the date of its authentication.

No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder.

Section 3.04. Temporary Securities. Pending the preparation of definitive Securities, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities; provided, that any such temporary Securities shall bear legends on the face of such Securities as set forth in Section 2.01.

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If temporary Securities are issued, the Company will cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at any office or agency of the Company designated pursuant to Section 7.02, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of Physical Securities of authorized denominations. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as Physical Securities.

Section 3.05. Registration; Registration of Transfer and Exchange. (a) The Company shall cause to be kept at the applicable Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency designated pursuant to Section 7.02 being herein sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed Security Registrar (the “Security Registrar”) for the purpose of registering Securities and transfers of Securities as herein provided.

Upon surrender for registration of transfer of any Security at an office or agency of the Company designated pursuant to Section 7.02 for such purpose, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of any authorized denominations and of a like aggregate principal amount and tenor.

At the option of the Holder and subject to the other provisions of this Section 3.05 and to Section 3.09, Securities may be exchanged for other Securities of any authorized denominations and of a like aggregate principal amount and tenor, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive.

All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.

Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing.

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No service charge shall be made for any registration of transfer or exchange of Securities, but the Company and the Security Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.04 not involving any transfer.

Neither the Company nor the Security Registrar shall be required to exchange or register a transfer of any Security (i) during the period beginning at the opening of business 15 days before the mailing of a notice of redemption to all Holders of Securities to be redeemed and ending at the close of business on the date on which a notice of redemption is mailed to all Holders of Securities to be redeemed, (ii) after any notice of redemption has been given to Holders, except that where such notice provides that such Security is to be redeemed only in part, the Company and the Security Registrar shall be required to exchange or register a transfer of the portion thereof not to be redeemed, (iii) that has been surrendered for conversion (iv) as to which a Fundamental Change Repurchase Notice has been delivered and not withdrawn, except that where such Fundamental Change Repurchase Notice provides that such Security is to be purchased only in part, the Company and the Security Registrar shall be required to exchange or register a transfer of the portion thereof not to be purchased or (v) as to which a Repurchase Election Notice has been delivered and not withdrawn, except that where such Repurchase Election Notice provides that such Security is to be purchased only in part, the Company and the Security Registrar shall be required to exchange or register a transfer of the portion thereof not to be purchased.

(b) Neither the Trustee, the Security Registrar nor any of their respective agents shall have any obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Agent Members or other beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

Section 3.06. Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding.

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If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable or has been called for redemption in full, the Company in its discretion may, instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section 3.06, the Company may require payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Security issued pursuant to this Section 3.06 in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder.

The provisions of this Section 3.06 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

Section 3.07. Persons Deemed Owners. Prior to due presentment of a Security for registration of transfer, the Company, the Trustee, the Security Registrar and any agent of the Company, the Trustee or the Security Registrar may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of the principal of such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee, the Security Registrar nor any agent of the Company, the Trustee or the Security Registrar shall be affected by notice to the contrary.

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Section 3.08. Book-Entry Provisions for Global Securities. (a) The Global Securities initially shall (i) be registered in the name of the Depositary or the nominee of such Depositary, (ii) be delivered to the Trustee as custodian for the Depositary and (iii) bear legends as set forth on the face of the form of Security in Section 2.01.

Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depositary, or the Trustee as its custodian, or under the Global Security, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of the Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of any Holder.

(b) Transfers of the Global Securities shall be limited to transfers in whole, but not in part, to the Depositary, its successors or their respective nominees. Interests of beneficial owners in a Global Security may be transferred or exchanged, in whole or in part, for Physical Securities in accordance with the rules and procedures of the Depositary and the provisions of Section 3.09. In addition, Physical Securities shall be transferred to all beneficial owners in exchange for their beneficial interests in the Global Securities if (A) such Depositary has notified the Company that the Depositary (i) is unwilling or unable to continue as Depositary for such Global Security or (ii) has ceased to be a clearing agency registered under the Exchange Act when the Depositary is required to be so registered to act as such Depositary and, in either such case, no successor Depositary shall have been appointed within 90 days of such notification, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Security and the Outstanding Securities shall have become due and payable pursuant to Section 12.02 and the Trustee requests that Physical Securities be issued or (C) the Company, at its option, notifies the Trustee that it elects to cause the issuance of Physical Securities, subject to applicable procedures of the Depositary.

(c) In connection with any transfer or exchange of a portion of the beneficial interest in the Global Security to beneficial owners pursuant to paragraph (b) above, the Security Registrar shall (if one or more Physical Securities are to be issued) reflect on its books and records the date and a decrease in the principal amount of the Global Security in an amount equal to the principal amount of the beneficial interest in the Global Security to be transferred, and the Company shall execute, and the Trustee shall authenticate and deliver, one or more Physical Securities of like tenor and amount.

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(d) In connection with the transfer of the entire Global Security to beneficial owners pursuant to paragraph (b) above, the Global Security shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and the Trustee shall authenticate and deliver, to each beneficial owner identified by the Depositary in exchange for its beneficial interest in the Global Security, an equal aggregate principal amount of Physical Securities of authorized denominations and the same tenor.

(e) The Holder of the Global Securities may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action that a Holder is entitled to take under this Indenture or the Securities.

Section 3.09. Cancellation and Transfer Provisions. The Company at any time may deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder that the Company may have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold. The Trustee shall cancel and dispose of all Securities surrendered for registration of transfer, exchange, payment, purchase, repurchase, redemption, conversion (pursuant to Article 11 hereof) or cancellation in accordance with its customary practices. If the Company shall acquire any of the Securities, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities unless and until the same are delivered to the Trustee for cancellation. The Company may not issue new Securities to replace Securities it has paid in full or delivered to the Trustee for cancellation.

The Security Registrar shall retain, in accordance with its customary procedures, copies of all letters, notices and other written communications received pursuant to this Section 3.09. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Security Registrar.

Section 3.10. CUSIP Numbers. In issuing the Securities, the Company may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee in writing of any change in the “CUSIP” numbers.

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ARTICLE 4

INTEREST

Section 4.01. Generally.

(a) Regular interest (“Regular Interest”) shall accrue on the Securities from [                    ], 2009 at a rate of [·]% per annum until the principal thereof is paid or made available for payment. Regular Interest shall be payable semiannually in arrears on March 15 and September 15 of each year, commencing March 15, 2010.

(b) Interest on the Securities shall be computed (i) for any full semiannual period for which a particular interest rate (inclusive of any Contingent Interest or Additional Interest payable with respect to the Securities) is applicable, on the basis of a 360-day year of twelve 30-day months and (ii) for any period for which a particular interest rate (inclusive of any Contingent Interest or Additional Interest payable with respect to the Securities) is applicable shorter than a full semiannual period for which interest is calculated, on the basis of a 30-day month and, for such periods of less than a month, the actual number of days elapsed over a 30-day month.

(c) Except as otherwise provided in this Section 4.01(c), a Holder of any Securities at the close of business on a Record Date shall be entitled to receive Interest on such Securities on the corresponding Interest Payment Date.

(i) A Holder of any Securities as of a Record Date that are converted after the close of business on such Record Date and prior to the opening of business on the corresponding Interest Payment Date shall be entitled to receive Interest on the principal amount of such Securities, notwithstanding the conversion of such Securities prior to such Interest Payment Date. However, a Holder that surrenders any Securities for conversion between the close of business on a Record Date and the opening of business on the corresponding Interest Payment Date shall be required to pay the Company an amount equal to the Interest payable by the Company with respect to such Securities on such Interest Payment Date at the time such Holder surrenders such Securities for conversion, provided, however, that this sentence shall not apply to a Holder that converts Securities:

(A) in respect of which the Company has given notice of redemption pursuant to Section 8.03 on a Redemption Date that is after the relevant Record Date and on or prior to the Business Day immediately following the corresponding Interest Payment Date;

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(B) in respect of which the Company has specified a Fundamental Change Repurchase Date that is after the relevant Record Date and on or prior to the Business Day immediately following the corresponding Interest Payment Date;

(C) following the Record Date for the payment of Regular Interest on September 15, 2016 or September 15, 2041; or

(D) to the extent of any overdue Interest, if any overdue Interest exists at the time of conversion with respect to the Securities being converted.

Accordingly, a Holder that converts Securities under any of the circumstances described in clauses (A), (B), (C) or (D) above (in the case of clause (D), to the extent that applicable) will not be required to pay to the Company an amount equal to the Interest payable by the Company with respect to such Securities on the relevant Interest Payment Date.

(ii) Notwithstanding any other provision of this Section 4.01(c), any Interest payable on a Redemption Date that falls after the close of business on a Record Date but at or prior to the close of business on the corresponding Interest Payment Date shall be payable to the Holder of record on the corresponding Record Date as provided in Section 8.01(b) and shall not be payable to the Holder of the Securities being redeemed. The payment of such Interest to the Holder on the Record Date as provided in Section 8.01(b) shall be deemed to satisfy the Company’s obligations in respect of such Interest.

(iii) Notwithstanding any other provision of this Section 4.01(c), any Interest payable on a Fundamental Change Repurchase Date that falls after the close of business on a Record Date but at or prior to the close of business on the corresponding Interest Payment Date shall be payable to the Holder of record on the corresponding Record Date as provided in Section 9.01(a) and shall not be payable to the Holder of the Securities being repurchased. The payment of such Interest to the Holder on the Record Date as provided in Section 9.01(a) shall be deemed to satisfy the Company’s obligations in respect of such Interest.

(iv) Notwithstanding any other provision of this Section 4.01(c), any Interest payable on a Repurchase Date that falls after the close of business on a Record Date but at or prior to the close of business on the corresponding Interest Payment Date shall be payable to the Holder of record on the corresponding Record Date as provided in Section 10.01(a) and shall not be payable to the Holder of the Securities being repurchased. The payment of such Interest to the Holder on the Record Date as provided in Section 10.01(a) shall be deemed to satisfy the Company’s obligations in respect of such Interest.

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Section 4.02. Contingent Interest. (a) Contingent interest on the Securities (“Contingent Interest”) shall accrue and the Company shall pay such Contingent Interest to the Holders as follows:

(i) beginning with the semiannual interest period commencing September 15, 2016, during any semiannual interest period where the average Trading Price for the five Trading Days immediately preceding the first day of such semiannual period is greater than or equal to the Upside Trigger, in which case the Contingent Interest payable on each $1,000 principal amount for such semiannual period shall be equal to 0.75% per annum of the average Trading Price for the five Trading Days immediately preceding the first day of such semiannual period.

(b) The Company shall have no obligation to determine the Trading Price of the Securities or to request the Trustee to determine the Trading Price of the Securities unless a Holder of Securities provides the Company with reasonable evidence that the Trading Price of the Securities is greater than or equal to the Upside Trigger, at which time the Company shall instruct the Trustee to determine the Trading Price of the Securities beginning on the next Trading Day and on each successive Trading Day until the Trading Price of the Securities is less than the Upside Trigger.

Section 4.03. Trustee’s Responsibilities in Respect of Contingent Interest. The Trustee’s sole responsibility pursuant to Section 4.02 shall be, upon request of the Company, to obtain the Trading Price of the Securities for each of the five Trading Days immediately preceding the first day of the applicable semiannual interest period and to provide such information to the Company. The Company shall determine whether Holders are entitled to receive Contingent Interest, and if so, provide written notice to the Trustee and issue a press release as required by Section 4.05. Notwithstanding any term contained in this Indenture or any other document to the contrary, the Trustee shall have no responsibilities, duties or obligations for or with respect to (i) determining whether the Company must pay Contingent Interest or (ii) determining the amount of Contingent Interest, if any, payable by the Company.

Section 4.04. Payment of Contingent Interest. Subject to Section 4.01 hereof, Contingent Interest for any semiannual interest period shall be paid on the applicable Interest Payment Date to the Holder in whose name any Security is registered on the Security Register at the corresponding Record Date. Contingent Interest due under this Article 4 shall be treated for all purposes of this Indenture like any other interest accruing on the Securities.

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Section 4.05. Contingent Interest Notification. By the third Business Day of a semiannual interest period for which Contingent Interest specified in Section 4.02(a)(i) will be paid, the Company will disseminate a press release through Reuters Economic Services and Bloomberg Business News stating that Contingent Interest will be paid on the Securities and identifying such semiannual period as the semiannual period for which such Contingent Interest will be paid.

ARTICLE 5

SUBORDINATION

Section 5.01. Agreement of Subordination. The Company covenants and agrees, and each Holder of Securities issued hereunder by its acceptance thereof likewise covenants and agrees, that all Securities and the Subsidiary Guarantees shall be issued subject to the provisions of this Article 5; and each Person holding any Security, whether upon original issue or upon transfer, assignment or exchange thereof, accepts and agrees to be bound by such provisions.

The payment of the principal of and Interest on all Securities (including, but not limited to, the Redemption Price, the Fundamental Change Repurchase Price and the Repurchase Price with respect to the Securities subject to redemption or repurchase in accordance with Articles 8, 9 or 10, as the case may be, and the payment of any cash upon conversion in accordance with Article 11) issued hereunder shall, to the extent and in the manner hereinafter set forth, be subordinated and subject in right of payment to the prior payment in full in cash or other payment satisfactory to the holders of all Senior Debt, whether outstanding at the date of this Indenture or thereafter incurred.

No provision of this Article 5 shall prevent the occurrence of any Default or Event of Default hereunder.

Section 5.02. Payments to Holders. No payment shall be made with respect to the principal of or Interest on the Securities (including, but not limited to, the Redemption Price, the Fundamental Change Repurchase Price and the Repurchase Price with respect to the Securities subject to redemption or repurchase in accordance with Articles 8, 9 or 10, as the case may be, and any payment of cash upon conversion in accordance with Article 11), except payments and distributions made by the Trustee as permitted by the first or second paragraph of Section 5.05, if:

(a) a default in the payment of principal, premium, interest or other amounts due on any Senior Debt, or in respect of any redemption or repurchase obligation under any Senior Debt, occurs and is continuing (or, in the case of Senior Debt for which there is a period of grace, in the event of such a default that continues beyond the period of grace, if any, specified in the instrument or lease evidencing such Senior Debt) (a “Payment Default”); or

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(b) a default, other than a Payment Default, on any Senior Debt occurs and is continuing that then permits holders of such Senior Debt (or any Representative) to accelerate its maturity (a “Non-Payment Default”) and a Responsible Officer of the Trustee receives at the Corporate Trust Office a written notice of the default (a “Payment Blockage Notice”) from the Company or a Representative of Senior Debt.

Notwithstanding the foregoing, following the delivery of a Payment Blockage Notice, no new Payment Blockage Notice may be delivered and no new period of payment blockage with respect to the Securities may begin until both (i) 365 consecutive days have elapsed since the Company’s receipt of the first Payment Blockage Notice and (ii) all scheduled payments of principal of and Interest with respect to the Securities that have come due have been paid in full in cash. No default that existed or was continuing on the date of delivery to the Trustee of any Payment Blockage Notice with respect to the Senior Debt whose holders delivered the Payment Blockage Notice may be made the basis of a subsequent Payment Blockage Notice by the holders of such Senior Debt, whether or not within a period of 365 consecutive days.

The Company may and shall resume payments on and distributions in respect of the Securities upon:

(1) in the case of a Payment Default, the date upon which the default is cured or waived or ceases to exist, or

(2) in the case of a Non-Payment Default, on the earlier to occur of (A) the date on which such default is cured or waived or otherwise ceases to exist, or (B) 179 days after the date on which the applicable Payment Blockage Notice is received; provided, that if the maturity of such Senior Debt has been accelerated, no payment or distribution may be made on the Securities until such default is cured or waived or such Senior Debt is discharged or paid in full.

Upon any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution or winding-up or liquidation or reorganization of the Company (whether voluntary or involuntary) or in bankruptcy, insolvency, receivership or similar proceedings, all amounts due or to become due upon all Senior Debt shall first be paid in full in cash, or other payments satisfactory to the holders of Senior Debt before any payment of cash, property or securities is made on account of the principal of or Interest on, or with respect to the conversion of, the Securities (except, to the extent required by applicable law, payments made

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pursuant to Article 16 from monies deposited with the Trustee pursuant thereto prior to commencement of proceedings for such dissolution, winding-up, liquidation or reorganization); and upon any such dissolution or winding-up or liquidation or reorganization of the Company or bankruptcy, insolvency, receivership or other proceeding, any payment by the Company, or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which the Holders of the Securities or the Trustee would be entitled, except for the provision of this Article 5, shall (except as aforesaid) be paid by the Company, or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by the Holders of the Securities or by the Trustee under this Indenture if received by them or it, directly to the holders of Senior Debt (pro rata to such holders on the basis of the respective amounts of Senior Debt held by such holders, or as otherwise required by law or a court order) or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any Senior Debt may have been issued, as their respective interests may appear, to the extent necessary to pay all Senior Debt in full in cash, or other payment satisfactory to the holders of Senior Debt, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt, before any payment or distribution is made to the Holders of the Securities or to the Trustee.

For purposes of this Article 5, the words, “cash, property or securities” shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other Corporation provided for by a plan of reorganization or readjustment, the payment of which is subordinated at least to the extent provided in this Article 5 with respect to the Securities to the payment of all Senior Debt which may at the time be outstanding; provided that (i) the Senior Debt is assumed by the new corporation, if any, resulting from any reorganization or readjustment, and (ii) the rights of the holders of Senior Debt (other than leases which are not assumed by the Company or the new Corporation, as the case may be) are not, without the consent of such holders, altered by such reorganization or readjustment. The consolidation of the Company with, or the merger of the Company into, another corporation or the liquidation or dissolution of the Company following the conveyance, transfer or lease of all or substantially all its property to another corporation upon the terms and conditions provided for in Article 13 shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 5.02 if such other corporation shall, as a part of such consolidation, merger, conveyance, transfer or lease, comply with the conditions stated in Article 13.

In the event of the acceleration of the Securities because of an Event of Default, no payment or distribution shall be made to the Trustee or any Holder of Securities in respect of the principal of, premium, if any, or interest on the Securities (including, but not limited to, the Redemption Price, the Fundamental Change Repurchase Price and the Repurchase

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Price with respect to the Securities subject to redemption or repurchase in accordance with Articles 8, 9 or 10, as the case may be, and any payment of cash upon conversion in accordance with Article 11), except payments and distributions made by the Trustee as permitted by the first or second paragraph of Section 5.05, until all Senior Debt has been paid in full in cash or other payment satisfactory to the holders of Senior Debt or such acceleration is rescinded in accordance with the terms of this Indenture. If payment of the Securities is accelerated because of an Event of Default, the Company shall promptly notify holders of Senior Debt of such acceleration.

In the event that, notwithstanding the foregoing provisions, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities (including, without limitation, by way of setoff or otherwise), prohibited by the foregoing, shall be received by the Trustee or the Holders of the Securities before all Senior Debt is paid in full, in cash or other payment satisfactory to the holders of Senior Debt, or provision is made for such payment thereof in accordance with its terms in cash or other payment satisfactory to the holders of Senior Debt, such payment or distribution shall be held in trust for the benefit of and shall be paid over or delivered to the holders of Senior Debt or their Representative or Representatives, as their respective interests may appear, as calculated by the Company, for application to the payment of all Senior Debt remaining unpaid to the extent necessary to pay all Senior Debt in full, in cash or other payment satisfactory to the holders of Senior Debt or their Representative, after giving effect to any concurrent payment or distribution to or for the holders of such Senior Debt.

Nothing in this Section 5.02 shall apply to claims of, or payments to, the Trustee under or pursuant to Sections 12.06 and 14.07. This Section 5.02 shall be subject to the further provisions of Section 5.05.

Section 5.03. Subrogation of Securities. Subject to the payment in full, in cash or other payment satisfactory to the holders of Senior Debt, of all Senior Debt, the rights of the Holders of the Securities shall be subrogated to the extent of the payments or distributions made to the holders of such Senior Debt pursuant to the provisions of this Article 5 (equally and ratably with the holders of all indebtedness of the Company which by its express terms is subordinated to other indebtedness of the Company to substantially the same extent as the Securities are subordinated and is entitled to like rights of subrogation) to the rights of the holders of Senior Debt to receive payments or distributions of cash, property or securities of the Company applicable to the Senior Debt until the principal of and Interest on the Securities shall be paid in full in cash or other payment satisfactory to the Holders of Securities; and, for the purposes of such subrogation, no payments or distributions to the holders of the Senior Debt of any cash, property or securities to which the Holders of the Securities or the Trustee would be entitled except for the provisions of this Article 5, and no payment over pursuant to the provisions of this Article 5, to or for the benefit of the holders of Senior Debt by Holders of the Securities or the Trustee,

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shall, as between the Company, its creditors other than holders of Senior Debt, and the Holders of the Securities, be deemed to be a payment by the Company to or on account of the Senior Debt; and no payment or distribution of cash, property or securities to or for the benefit of the Holders of the Securities pursuant to the subrogation provisions of this Article 5, which would otherwise have been paid to the holders of Senior Debt shall be deemed to be a payment by the Company to or for the account of the Securities. It is understood that the provisions of this Article 5 are and are intended solely for the purposes of defining the relative rights of the Holders of the Securities, on the one hand, and the holders of the Senior Debt, on the other hand.

Nothing contained in this Article 5 or elsewhere in this Indenture or in the Securities is intended to or shall impair, as among the Company, its creditors other than the holders of Senior Debt, and the Holders of the Securities, the obligation of the Company, which is absolute and unconditional, to pay to the Holders of the Securities the principal of and Interest on the Securities as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders of the Securities and creditors of the Company other than the holders of the Senior Debt.

Upon any payment or distribution of assets of the Company or any Subsidiary Guarantor referred to in this Article 5, the Trustee, subject to the provisions of Section 14.01, and the Holders of the Securities shall be entitled to conclusively rely upon any order or decree made by any court of competent jurisdiction in which such bankruptcy, dissolution, winding-up, liquidation or reorganization proceedings are pending, or a certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment or distribution, delivered to the Trustee or to the Holders of the Securities, for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Debt and other indebtedness of the Company, the amount thereof or payable thereon and all other facts pertinent thereto or to this Article 5.

Section 5.04. Authorization to Effect Subordination. Each Holder of a Security by the Holder’s acceptance thereof authorizes and directs the Trustee on the Holder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article 5 and appoints the Trustee to act as the Holder’s attorney-in-fact for any and all such purposes.

Section 5.05. Notice to Trustee. The Company shall give prompt written notice in the form of an Officers’ Certificate to a Responsible Officer of the Trustee and to any Paying Agent of any fact known to the Company that would prohibit the making of any payment of monies to or by the Trustee or any Paying Agent in respect of the Securities pursuant to the provisions of this Article 5. Notwithstanding the provisions of this Article 5 or any other provision of this Indenture, the

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Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment of monies to or by the Trustee in respect of the Securities pursuant to the provisions of this Article 5, unless and until a Responsible Officer of the Trustee shall have received written notice thereof at the applicable Corporate Trust Office from the Company (in the form of an Officers’ Certificate) or a Representative or a holder or holders of Senior Debt or from any trustee thereof; and before the receipt of any such written notice, the Trustee, subject to the provisions of Section 14.01, shall be entitled in all respects to assume that no such facts exist; provided that, if on a date not less than one Business Day prior to the date upon which by the terms hereof any such monies may become payable for any purpose (including, without limitation, the payment of the principal of or Interest on any Security) the Trustee shall not have received, with respect to such monies, the notice provided for in this Section 5.05, then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such monies and to apply the same to the purpose for which they were received, and shall not be affected by any notice to the contrary which may be received by it on or after such prior date. Notwithstanding anything in this Article 5 to the contrary, nothing shall prevent any payment by the Trustee to the Holders of monies deposited with it pursuant to Article 16, and any such payment shall not be subject to the provisions of this Article 5; provided that, at the time of any such deposit, such deposit and payment were permitted under this Article 5 without giving effect to the first clause this sentence; provided further that, if the Trustee shall receive any such notice on the date upon which, by the terms hereof, such monies shall be payable, the Trustee may, in its reasonable discretion, waive the foregoing proviso.

The Trustee, subject to the provisions of Section 14.01, shall be entitled to conclusively rely on the delivery to it of a written notice by a Representative or a Person representing himself to be a holder of Senior Debt (or a trustee on behalf of such holder) to establish that such notice has been given by a Representative or a holder of Senior Debt. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Debt to participate in any payment or distribution pursuant to this Article 5, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Debt held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article 5, and if such evidence is not furnished the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.

Section 5.06. Trustee’s Relation to Senior Debt. The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article 5 in respect of any Senior Debt at any time held by it, to the same extent as any other holder of Senior Debt, and nothing in Section 14.13 or elsewhere in this Indenture shall deprive the Trustee of any of its rights as such holder.

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With respect to the holders of Senior Debt, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article 5, and no implied covenants or obligations with respect to the holders of Senior Debt shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Debt and, subject to the provisions of Section 14.01, the Trustee shall not be liable to any holder of Senior Debt if it shall pay over or deliver to Holders of Securities, the Company or any other Person money or assets to which any holder of Senior Debt shall be entitled by virtue of this Article 5 or otherwise.

Section 5.07. No Impairment of Subordination. No right of any present or future holder of any Senior Debt to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or any Subsidiary Guarantor or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company or any Subsidiary Guarantor with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof which any such holder may have or otherwise be charged with.

Section 5.08. Certain Conversions Deemed Payment. For the purposes of this Article 5 only, (a) the issuance and delivery of any Junior Securities upon conversion of Securities in accordance with Article 11 shall not be deemed to constitute a payment or distribution on account of the principal of Interest on the Securities or on account of the purchase or other acquisition of Securities, and (b) the payment, issuance or delivery of cash (except in satisfaction of fractional shares), securities (other than Junior Securities) or other property upon conversion of a Security shall be deemed to constitute payment on account of the principal of such Security, the payment, issuance and delivery of such cash being made subject to the subordination provisions of this Article 5. For the purposes of this Section 5.08, the term “Junior Securities” means (i) shares of any stock of any class of the Company or (ii) securities of the Company which are subordinated in right of payment to all Senior Debt which may be outstanding at the time of issuance or delivery of such securities to substantially the same extent as, or to a greater extent than, the Securities are so subordinated as provided in this Article 5 and which otherwise have terms no less disadvantageous to Senior Debt herein.

Section 5.09. No Impairment Of Conversion Right. Nothing contained in this Article 5 or elsewhere in this Indenture or in the Securities is intended to or shall impair, as among the Company, its creditors other than holders of Senior Debt and the Holders, the right, which is absolute and unconditional, of the Holder of any Security to convert such Security in accordance with Article 11.

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Section 5.10. Existing Senior Subordinated Convertible Notes. The Securities are not senior in right of payment to, and will rank equal with, the Existing Securities.

Section 5.11. Article Applicable to Paying Agents. If at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term “Trustee” as used in this Article 5 shall (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article 5 in addition to or in place of the Trustee; provided, however, that the first paragraph of Section 5.05 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as Paying Agent.

Section 5.12. Senior Debt Entitled to Rely. The holders of Senior Debt shall have the right to rely upon this Article 5, and no amendment or modification of the provisions contained herein shall diminish the rights of such holders unless such holders shall have agreed in writing thereto.

Section 5.13. Reinstatement. To the extent the payment of or distribution in respect of any Senior Debt (whether by or on behalf of the Company as proceeds of security or enforcement of any right of setoff or otherwise) is declared to be fraudulent or preferential, set aside or required to be paid to any receiver, trustee in bankruptcy, liquidating trustee, agent or similar Person under any bankruptcy, insolvency, receivership, fraudulent conveyance or similar law, then if such payment or distribution is recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent or similar Person, the Senior Debt or part thereof originally intended to be satisfied shall be deemed to be reinstated and outstanding as if such payment had not occurred.

Section 5.14. Actions by Holders of Senior Debt. The holders of the Senior Debt may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders, without incurring responsibility to the Holders and without impairing or releasing the subordination provided in this Indenture or the obligations of the Holders hereunder to the holders of the Senior Debt, do any one or more of the following:

(a) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, the Senior Debt or any instrument evidencing the same or any agreement under which any Senior Debt is outstanding or secured;

(b) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise secured;

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(c) release any Person liable in any manner for the collection of Senior Debt;

(d) exercise or refrain from exercising any rights against the Company or any other Person; and

(e) take any other action in the reasonable business judgment of the holders of Senior Debt.

Section 5.15. Subordination Of Subsidiary Guarantees. The Subsidiary Guarantee of each Subsidiary Guarantor is subordinated to the Senior Debt to the same extent and in the same manner as the Securities are subordinated to the Senior Debt.

ARTICLE 6

GUARANTEES

Section 6.01. Subsidiary Guarantee. (a) Subject to the provisions of this Article 6, each Subsidiary Guarantor, jointly and severally, hereby fully and unconditionally guarantees on a senior subordinated, unsecured basis to each holder of a Security authenticated and delivered by the Trustee and to the Trustee, irrespective of the validity or enforceability of this Indenture, the Securities, or the obligations of the Company hereunder or thereunder:

(i) the due and punctual payment of the principal of and Interest on, the Securities, whether at the Stated Maturity or on an Interest Payment Date, by acceleration, call for redemption, repurchase, or otherwise (subject to any applicable grace period);

(ii) the due and punctual payment of Interest on the overdue principal, if any, of, and Interest on, the Securities, if lawful;

(iii) the due and punctual payment and performance (subject to any applicable grace period) of all other obligations of the Company under this Indenture and the Securities; and

(iv) in case of any extension of time of payment or renewal of any Securities or any of such other obligations under this Indenture or under the Securities, the due and punctual payment or performance thereof (subject to any applicable grace period) in accordance with the terms of the extension or renewal, whether at the Stated Maturity, by acceleration, call for redemption, repurchase, or otherwise.

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(b) Failing payment when due by the Company of any amount so guaranteed for whatever reason, the Subsidiary Guarantors shall be jointly and severally obligated to pay the same immediately. An Event of Default under this Indenture or the Securities shall constitute an Event of Default under the Subsidiary Guarantees, and shall entitle the Holders or the Trustee to accelerate the obligations of the Subsidiary Guarantors hereunder in the same manner and to the same extent as the obligations of the Company.

(c) Each Subsidiary Guarantor hereby agrees that (i) its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Securities, this Indenture, or the obligations of the Company hereunder or thereunder, the absence of any action to enforce the same, whether or not a Subsidiary Guarantee is affixed to any particular Security, any waiver or consent by any Holder with respect to any provisions hereof or thereof, any amendment of this Indenture or the Securities, the recovery of any judgment against the Company or any of its Subsidiaries, any action to enforce the same, or any other circumstance that might otherwise constitute a legal or equitable discharge or defense of a Guarantor (other than payment in full of the Securities) and (ii) subject to Section 6.07, no Subsidiary Guarantee will be discharged except by complete performance of the obligations of the Company under the Securities and this Indenture.

(d) The Subsidiary Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Company for liquidation or reorganization, should the Company become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Company’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Securities are pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Securities, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Securities shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(e) Each Subsidiary Guarantor hereby agrees that it shall not be entitled to and irrevocably waives diligence, presentment, demand of payment, filing of claim with a court in the event of insolvency or bankruptcy of the Company, any Subsidiary Guarantor, any other Subsidiary of the Company or any other obligor under the Securities, any right to require a proceeding first against the Company, any Subsidiary Guarantor, any other Subsidiary of the Company or any other obligor under this Indenture, or the Securities and any right, protest, notice and all demands whatsoever.

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(f) If any Holder or the Trustee is required by any court or otherwise to return to the Company, any Subsidiary Guarantor, any other Subsidiary of the Company or any other obligor under this Indenture, or the Securities, or any trustee, liquidator or other similar official, any amount paid by the Company, any Subsidiary Guarantor, any other Subsidiary of the Company or any other obligor under this Indenture, or the Securities to the Trustee or such Holder, the Subsidiary Guarantees, to the extent theretofore discharged, shall be reinstated in full force and effect.

(g) Each Subsidiary Guarantor agrees that, as between the Subsidiary Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the obligations of the Company guaranteed hereby may be accelerated as provided in Article 12 for the purposes of the Subsidiary Guarantees, notwithstanding any stay, injunction or other prohibition preventing such acceleration as to the Company of the obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of those obligations as provided in Article 12, those obligations (regardless of whether due and payable) will forthwith become due and payable by each of the Subsidiary Guarantors for the purpose of the Subsidiary Guarantees.

(h) No stockholder, Officer, director, employee or incorporator, past, present or future, of any Subsidiary Guarantor, as such, shall have any personal liability under this Subsidiary Guarantee by reason of his, her or its status as such stockholder, Officer, director, employee or incorporator.

Section 6.02. Execution and Delivery of The Subsidiary Guarantees.

(a) To evidence the Subsidiary Guarantees set forth in Section 6.01, the Company and each Subsidiary Guarantor hereby agrees that:

(i) a notation of the Subsidiary Guarantees substantially as set forth on Exhibit A hereto shall be endorsed on each Security authenticated and delivered by the Trustee; and

(ii) such endorsement shall be executed on behalf of each Subsidiary Guarantor by any one officer of such Subsidiary Guarantor.

(b) Each Subsidiary Guarantor hereby agrees that its Subsidiary Guarantee set forth in Section 6.01 shall remain in full force and effect notwithstanding any failure to endorse on each Security a notation of such Subsidiary Guarantee.

(c) If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Securities on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall nevertheless be valid.

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(d) The delivery of any Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Subsidiary Guarantees set forth in this Indenture on behalf of the Subsidiary Guarantors.

Section 6.03. Limitation on Subsidiary Guarantors’ Liability. Each Subsidiary Guarantor and, by its acceptance hereof, each Holder hereby confirms that it is the intention of all such parties that the Guarantee by such Subsidiary Guarantor pursuant to its Subsidiary Guarantee shall not constitute a fraudulent transfer or conveyance for purposes of any federal or state law. To effectuate the foregoing intention, the Holders and the Subsidiary Guarantors hereby irrevocably agree that the obligations of each Subsidiary Guarantor under its Subsidiary Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor and to any collections from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under its Subsidiary Guarantee, result in the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law and not rendering a Subsidiary Guarantor insolvent.

Section 6.04. Rights Under The Subsidiary Guarantees. (a) Until payment in full of the Securities, no payment by any Subsidiary Guarantor pursuant to the provisions shall give rise to any claim of the Subsidiary Guarantors against the Trustee or any Holder.

(b) Each Subsidiary Guarantor waives notice of the issuance, sale and purchase of the Securities and notice from the Trustee or the Holders from time to time of any of the Securities of their acceptance and reliance on its Subsidiary Guarantee.

(c) No set-off, counterclaim, reduction or diminution of any obligation or any defense of any kind or nature (other than performance by the Subsidiary Guarantors of their obligations hereunder) that any Subsidiary Guarantor may have or assert against the Trustee or any Holder shall be available hereunder to such Subsidiary Guarantor.

(d) Each Subsidiary Guarantor shall pay all reasonable costs, expenses and fees, including all reasonable attorneys’ fees, that may be incurred by the Trustee in enforcing or attempting to enforce the Subsidiary Guarantees or protecting the rights of the Trustee or the Holder, if any, in accordance with this Indenture.

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Section 6.05. Primary Obligations. The obligations of each Subsidiary Guarantor hereunder shall constitute a Guarantee of payment and not of collection. Each Subsidiary Guarantor agrees that it is directly liable to each Holder hereunder, that the obligations of each Subsidiary Guarantor hereunder are independent of the obligations of the Company or any other Subsidiary Guarantor, and that a separate action may be brought against each Subsidiary Guarantor, whether such action is brought against the Company or any other Subsidiary Guarantor or whether the Company or any other Subsidiary Guarantor is joined in such action. Each Subsidiary Guarantor agrees that its liability hereunder shall be immediate and shall not be contingent upon the exercise or enforcement by the Trustee or the Holders of whatever remedies they may have against the Company or any other Subsidiary Guarantor or the enforcement of any lien or realization upon any security the Trustee may at any time possess. Each Subsidiary Guarantor agrees that any release that may be given by the Trustee or the Holders to the Company or any other Subsidiary Guarantor shall not release such Subsidiary Guarantor.

Section 6.06. Subsidiary Guarantees By Future Domestic Subsidiaries. (a) The Company shall cause each Domestic Subsidiary that does not execute a Subsidiary Guarantee as of the Issue Date (whether now existing or that becomes a Domestic Subsidiary after the Issue Date) to execute and deliver to the Trustee a supplemental indenture hereto providing for a Subsidiary Guarantee on an unsecured basis and subordinated pursuant to the terms of this Indenture and execute such Subsidiary Guarantee substantially in the form attached as Exhibit A hereto (each, a “New Subsidiary Guarantor”) such that at no time shall all of the Company’s Domestic Subsidiaries that are not Subsidiary Guarantors have an aggregate book value of total assets that exceeds 10% of the Net Tangible Assets of the Company (exclusive of foreign Subsidiaries) and of all of its Domestic Subsidiaries (exclusive of their foreign Subsidiaries). For purposes of the above calculation, aggregate book value of the assets of a non-guarantor Subsidiary shall be based on the balance sheets of such non-guarantor Subsidiary used in the preparation of the Company’s most recent consolidated financial statement required to be delivered to the Trustee or, if sooner, filed with the SEC.

(b) The Company shall deliver to the Trustee an Opinion of Counsel, in form reasonably satisfactory to the Trustee, to the effect that (i) such supplemental indenture has been duly authorized, executed and delivered by such New Subsidiary Guarantor and (ii) such supplemental indenture constitutes the legal, valid, binding and enforceable obligations of such New Subsidiary Guarantor, subject to customary exceptions and carve-outs applicable to other similar opinions.

(c) The fact that any Security may fail to have endorsed thereon a Subsidiary Guarantee executed by a New Subsidiary Guarantor shall not affect the validity or enforceability of such New Subsidiary Guarantee against such Subsidiary Guarantor.

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Section 6.07. Release Of Subsidiary Guarantors. (a) So long as no Default or Event of Default shall have occurred and be continuing under this Indenture or any Subsidiary Guarantee and no such Default or Event of Default would result from the release, a Subsidiary Guarantor shall be released from all of its obligations under its Subsidiary Guarantee, this Indenture and the Securities:

(i) in connection with any sale or other disposition (including by way of merger or consolidation) of all or substantially all of the assets or all of the Capital Stock of that Subsidiary Guarantor to a Person that is not (either before or after giving effect to such transaction) the Company or a Domestic Subsidiary of the Company; or

(ii) upon the delivery by the Company to the Trustee of an Officers’ Certificate certifying that, after giving effect to such release, such Subsidiary Guarantor would not be required to provide a Subsidiary Guarantee pursuant to Section 6.06;

and in each case the Company has delivered to the Trustee an Officers’ Certificate, each stating that all conditions precedent herein provided for relating to such transactions have been complied with and that such release is authorized and permitted hereunder.

(b) If all of the conditions to release contained in this Section 6.07 have been satisfied, the Trustee shall execute any documents reasonably requested by the Company or any Subsidiary Guarantor in order to evidence the release of such Subsidiary Guarantor from its obligations under its Subsidiary Guarantee under this Article 6.

ARTICLE 7

COVENANTS

Section 7.01. Payments. The Company shall duly and punctually make all payments in respect of the Securities in accordance with the terms of the Securities and this Indenture.

Any payments made or due pursuant to this Indenture shall be considered paid on the applicable date due if by 10:00 a.m., New York City time, on such date the Paying Agent holds, in accordance with this Indenture, cash sufficient to pay all such amounts then due. Payment of the principal of and Interest on the Securities shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

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Section 7.02. Maintenance of Office or Agency. The Company shall in the Borough of Manhattan, The City of New York maintain an office or agency where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served, which shall initially be the applicable Corporate Trust Office of the Trustee. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

Section 7.03. Appointments to Fill Vacancies in Trustee’s Office. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 14.10, a Trustee, so that there shall at all times be a Trustee hereunder.

Section 7.04. Money for Security Payments to be Held in Trust. If the Company shall at any time act as its own Paying Agent, it shall, on or before each due date of any payment in respect of any of the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to make the payment so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and shall promptly notify the Trustee of its action or failure so to act.

Whenever the Company shall have one or more Paying Agents, it will, prior to each due date of any payment in respect of any Securities, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.

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The Company shall cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section 7.04, that such Paying Agent will (i) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the continuance of any default by the Company (or any other obligor upon the Securities) in the making of any payment in respect of the Securities, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent as such.

The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the making of payments in respect of any Security and remaining unclaimed for two years after such payment has become due shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, shall at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining shall be repaid to the Company. In the absence of a written request from the Company to return funds remaining unclaimed for two years after such payment has become due to the Company, the Trustee shall from time to time deliver all unclaimed payments to or as directed by applicable escheat authorities, as determined by the Trustee in its sole discretion, in accordance with the customary practices and procedures of the Trustee. Any such unclaimed funds held by the Trustee pursuant to this Section 7.04 shall be held uninvested and without any liability for interest.

Section 7.05. Statement by Officers as to Default. The Company and each Subsidiary Guarantor (to the extent that such Subsidiary Guarantor is so required under the Trust Indenture Act) will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers’ Certificate, stating whether or not to the knowledge of the signers thereof the Company is in Default in the performance and observance of any of the terms,

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provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in Default, specifying all such Defaults and the nature and status thereof of which they may have knowledge. The Company shall also deliver to the Trustee, within 30 days after the occurrence of an Event of Default, an Officers’ Certificate setting forth the status and the nature of such Event of Default and what action the Company is taking or proposes to take in respect thereof.

Section 7.06. Existence. Subject to Article 13, the Company and the Subsidiary Guarantors shall do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises; provided, however, that the Company or any Subsidiary Guarantor, as the case may be, shall not be required to preserve any such right or franchise if the Company or such Subsidiary Guarantor shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company or such Subsidiary Guarantor and that the loss thereof is not disadvantageous in any material respect to the Holders.

Section 7.07. Book-Entry System. If the Securities cease to trade in the Depositary’s book-entry settlement system, the Company covenants and agrees that it shall use reasonable efforts to make such other book entry arrangements that it determines are reasonable for the Securities.

Section 7.08. Additional Interest. If at any time Additional Interest becomes payable by the Company pursuant to Section 12.03, the Company shall promptly deliver to the Trustee a certificate to that effect and stating (1) the amount of such Additional Interest that is payable and (2) the date on which such Additional Interest is payable. Additional Interest payable in accordance with Section 12.03 shall be payable in arrears on each Interest Payment Date following accrual in the same manner as Regular Interest on the Securities. Unless and until a Responsible Officer of the Trustee receives such a certificate, the Trustee may assume without inquiry that no Additional Interest is payable. If the Company has paid Additional Interest directly to the Persons entitled to such Additional Interest, the Company shall deliver to the Trustee a certificate setting forth the particulars of such payment.

Section 7.09. Commission Filings And Reports. The Company covenants to comply with Section 314(a) of the Trust Indenture Act as it relates to reports, information and documents that the Company may be required to file with the Trustee pursuant to such Section 314(a) and with the Commission pursuant to Section 13 or 15(d) of the Exchange Act or otherwise by the Exchange Act, the Trust Indenture Act or other rules and regulations of the Commission and to file such reports, information and documents with the Trustee within 15 days after the same is required to be filed with the Commission (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act); provided that

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in each case the delivery of materials to the Trustee by electronic means or filing of documents pursuant to the Commission’s “EDGAR” system and the Interactive Data Electronic Applications System (“IDEA”) (or any successor electronic filing system) shall be deemed to constitute “filing” with the Trustee for purposes of this Section 7.09. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

Section 7.10. Stay, Extension and Usury Laws. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Securities as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and the Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

Section 7.11. Information for IRS Filings. The Company shall provide to the Trustee on a timely basis such information as the Trustee requires to enable the Trustee to prepare and file any form required to be submitted by the Company to the Internal Revenue Service and the Holders of the Securities.

Section 7.12. Further Instruments and Acts. Upon request of the Trustee, the Company and each Subsidiary Guarantor will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture.

Section 7.13. Tax Treatment of the Securities. The Company agrees, and by acceptance of a beneficial ownership interest in the Securities each Holder or other beneficial owner of Securities will be deemed to have agreed, for United States federal income tax purposes, (a) to treat the Securities as indebtedness of the Company subject to United States Treasury regulations section 1.1275-4 (the “Contingent Debt Regulations”) and, for purposes of the Contingent Debt Regulations, to treat the Fair Market Value of any Common Stock beneficially received upon any conversion of the Securities as a contingent payment, (b) to be bound by the Company’s determination of the “comparable yield” and “projected payment schedule,” within the meaning of the Contingent Debt Regulations, with respect to the Securities, (c) to use

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such “comparable yield” and “projected payment schedule” in determining interest accruals with respect to such Holder’s or beneficial owner’s Securities and in determining adjustments thereto, (d) to treat the exchange of the Securities for the Existing Securities as a significant modification of the Existing Securities and (e) to treat such exchange as a recapitalization. A Holder of Securities may obtain the issue date, issue price, yield to maturity, comparable yield and the projected payment schedule by submitting a written request for such information to: American Medical Systems Holdings, Inc., 10700 Bren Road West, Minnetonka, Minnesota 55343, Attention: Treasurer.

Section 7.14. Limitation On Incurring Senior Subordinated Indebtedness. The Company will not, directly or indirectly, incur, or suffer to exist, any indebtedness that by its terms would expressly rank senior in right of payment to the Securities and subordinate in right of payment to any of its Senior Debt.

For the purposes of this Section 7.14, “incur” means, with respect to any indebtedness or other obligation of any Person, to create, issue, incur (including by conversion, exchange or otherwise), assume, guarantee or otherwise become liable in respect of such indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such indebtedness or other obligation on the balance sheet of such Person (and “incurrence,” “incurred” and “incurring” shall have meanings correlative to the foregoing). Indebtedness of any Person or any of its subsidiaries acquired by the Company or existing at the time such Person becomes a Subsidiary of the Company (or is merged into or consolidated with the Company or any Subsidiary of the Company), whether or not such indebtedness was incurred in connection with, as a result of, or in contemplation of, such Person becoming a Subsidiary of the Company (or being merged into or consolidated with the Company or any Subsidiary of the Company), shall be deemed incurred at the time any such Person becomes a Subsidiary or merges into or consolidates with the Company or any Subsidiary of the Company.

ARTICLE 8

REDEMPTION

Section 8.01. Right to Redeem; Notices to Trustee. (a) The Securities may be redeemed in whole or in part at the option of the Company

(i) on or prior to September 17, 2010, if a Tax Triggering Event has occurred; and

(ii) on or after September 15, 2016, if the Last Reported Sale Price of the Common Stock has been greater than or equal to 130% of Conversion Price then in effect for at least 20 Trading Days (whether or not consecutive) during any 30 consecutive Trading Day period prior to the date on which the Company provides notice of redemption.

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(b) The redemption price at which the Securities are redeemable (the “Redemption Price”) shall be payable in cash and shall be equal to:

(i) in the case of a redemption pursuant to Section 8.01(a)(i), 101.5% of the principal amount of the Securities being redeemed plus (A) accrued and unpaid Interest to, but excluding, the Redemption Date; provided, however, that if a Redemption Date falls after the close of business on a Record Date but at or prior to the close of business on the corresponding Interest Payment Date, the Interest payable in respect of such Interest Payment Date shall be payable to the Holder of record as of the corresponding Record Date, in which case, the Redemption Price shall not include any such accrued and unpaid Interest; and (B) if the Conversion Value as of the Redemption Date of the Securities being redeemed exceeds their Initial Conversion Value, 85% of the amount determined by subtracting the Initial Conversion Value of such Securities from their Conversion Value as of the Redemption Date; or

(ii) in the case of a redemption pursuant to Section 8.01(a)(ii), 100% of the principal amount of Securities to be redeemed, together with accrued and unpaid Interest to, but excluding, the Redemption Date; provided, however, that if a Redemption Date falls after the close of business on a Record Date but at or prior to the close of business on the corresponding Interest Payment Date, the Interest payable in respect of such Interest Payment Date shall be payable to the Holders of record as of the corresponding Record Date, in which case, the Redemption Price shall be equal to 100% of the principal amount of the Securities being redeemed.

(c) The Company may not redeem any Securities unless all accrued and unpaid Interest thereon has been or is simultaneously paid for all semiannual periods or portions thereof terminating prior to the Redemption Date.

(d) No Securities may be redeemed by the Company pursuant to this Section 8.01 if the principal amount of the Securities has been accelerated, and such acceleration has not been rescinded, on or prior to the Redemption Date, except in the case of an acceleration resulting from a Default by the Company in the payment of the Redemption Price with respect to such Securities.

(e) Except as provided in this Section 8.01, the Securities shall not be redeemable by the Company.

Section 8.02. Selection of Securities to be Redeemed. If less than all the Securities are to be redeemed, the Trustee shall select the Securities to be redeemed by lot, on a pro rata basis or by any other method the Trustee considers fair and appropriate (so long as such method is not prohibited by the rules of The NASDAQ Global Select Market or any stock

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exchange on which the Securities are then listed, as applicable). The Trustee shall make the selection within seven days from its receipt of the notice from the Company delivered pursuant to Section 8.03 from Outstanding Securities not previously called for redemption.

Securities and portions of them the Trustee selects shall be in principal amounts of $1,000 or any multiple thereof. Provisions of this Indenture that apply to Securities called for redemption in whole also apply to Securities called for redemption in part. The Trustee shall notify the Company promptly of the Securities or portions of Securities to be redeemed.

If any Security selected for partial redemption is converted in part before termination of the conversion right with respect to the portion of the Security so selected, the converted portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption. Securities which have been converted during a selection of Securities to be redeemed may be treated by the Trustee as outstanding for the purpose of such selection.

Section 8.03. Notice of Redemption. At least 20 days but not more than 60 days before a Redemption Date, the Company shall mail a notice of redemption by first-class mail, postage prepaid, to the Trustee, the Paying Agent and each Holder of Securities to be redeemed.

The notice shall specify the Securities to be redeemed and shall state:

(i) the Redemption Date;

(ii) the Redemption Price;

(iii) the Conversion Price;

(iv) the name and address of the Paying Agent and Conversion Agent;

(v) that Securities called for redemption may be converted at any time before the close of business on the Business Day immediately preceding the Redemption Date;

(vi) that Holders who want to convert Securities must satisfy the requirements set forth therein and in this Indenture;

(vii) that Securities called for redemption must be surrendered to the Paying Agent for cancellation to collect the Redemption Price;

(viii) if fewer than all the outstanding Securities are to be redeemed, the certificate numbers (if such Securities are held other than in global form) and principal amounts of the particular Securities to be redeemed;

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(ix) that, unless the Company defaults in making payment of such Redemption Price, Interest will cease to accrue on and after the Redemption Date; and

(x) the CUSIP number of the Securities.

At the Company’s written request delivered at least 30 days prior to the date such notice is to be given (unless a shorter time period shall be acceptable to the Trustee), the Trustee shall give the notice of redemption to each Holder of Securities to be redeemed in the Company’s name and at the Company’s expense.

Section 8.04. Effect of Notice of Redemption. Once notice of redemption is given, Securities called for redemption become due and payable on the Redemption Date and at the Redemption Price stated in the notice except for Securities that are converted in accordance with the terms of this Indenture. Upon surrender to the Paying Agent, such Securities shall be paid at the Redemption Price stated in the notice.

Section 8.05. Deposit of Redemption Price. Prior to 10:00 a.m. (New York City time) on a Redemption Date, the Company shall deposit with the Paying Agent (or if the Company or a Subsidiary or an Affiliate of either of them is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the Redemption Price of all Securities to be redeemed on that date other than Securities or portions of Securities called for redemption which on or prior thereto have been delivered by the Company to the Trustee for cancellation or have been converted. The Paying Agent shall as promptly as practicable return to the Company any money not required for that purpose because of conversion of Securities pursuant to Article 11. If such money is then held by the Company in trust and is not required for such purpose it shall be discharged from such trust.

Section 8.06. Securities Redeemed in Part. Upon surrender of a Security that is redeemed in part, the Company shall execute and the Trustee shall authenticate and deliver to the Holder a new Security in an authorized denomination equal in principal amount to the unredeemed portion of the Security surrendered. The Company shall not be required to (i) issue, register the transfer of, or exchange any Securities during a period of 15 days before the mailing of a notice of redemption or (ii) register the transfer of, or exchange any, Securities so selected for redemption, in whole or in part, except the unredeemed portion of any Security being redeemed in part.

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ARTICLE 9

FUNDAMENTAL CHANGES AND REPURCHASES THEREUPON

Section 9.01. Repurchase at Option of Holders Upon a Fundamental Change.

(a) Generally. If a Fundamental Change occurs at any time, then each Holder shall have the right, at such Holder’s option, to require the Company to repurchase all of such Holder’s Securities or any portion thereof that is a multiple of $1,000 principal amount, on the date (the “Fundamental Change Repurchase Date”) specified by the Company that is not less than 20 Business Days and not more than 40 calendar days following the date of the Fundamental Change Company Notice (as defined below) at a repurchase price equal to 100% of the principal amount thereof, together with accrued and unpaid Interest thereon to, but excluding, the Fundamental Change Repurchase Date (the “Fundamental Change Repurchase Price”); provided, however, that if Securities are repurchased pursuant to this Section 9.01 on a Fundamental Change Repurchase Date that falls after the close of business on a Record Date but at or prior to the close of business on the corresponding Interest Payment Date, the Interest payable in respect of such Interest Payment Date shall be payable to the Holders of record as of the corresponding Record Date, in which case, the Fundamental Change Repurchase Price shall be equal to 100% of the principal amount of the Securities being repurchased.

Repurchases of Securities under this Section 9.01 shall be made, at the option of the Holder thereof, upon:

(i) delivery to the Trustee (or other Paying Agent appointed by the Company) by a Holder of a duly completed notice (the “Fundamental Change Repurchase Notice”) in the form set forth on the reverse of the Securities on or prior to the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date; and

(ii) delivery or book-entry transfer of the Securities to the Trustee (or other Paying Agent appointed by the Company) at any time after delivery of the Fundamental Change Repurchase Notice (together with all necessary endorsements) at the applicable Corporate Trust Office of the Trustee (or other Paying Agent appointed by the Company), such delivery being a condition to receipt by the Holder of the Fundamental Change Repurchase Price therefor; provided that such Fundamental Change Repurchase Price shall be so paid pursuant to this Section 9.01 only if the Securities so delivered to the Trustee (or other Paying Agent appointed by the Company) shall conform in all respects to the description thereof in the related Fundamental Change Repurchase Notice.

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The Fundamental Change Repurchase Notice shall state:

(A) if certificated, the certificate numbers of Securities to be delivered for repurchase, or if not certificated, such Fundamental Repurchase Notice must comply with appropriate procedures of the Depositary;

(B) the portion of the principal amount of Securities to be repurchased, which must be $1,000 or a multiple thereof; and

(C) that the Securities are to be repurchased by the Company pursuant to the applicable provisions of the Securities and the Indenture.

Any purchase by the Company contemplated pursuant to the provisions of this Section 9.01 shall be consummated by the delivery of the consideration to be received by the Holder promptly following the later of the Fundamental Change Repurchase Date and the time of the book-entry transfer or delivery of the Securities.

Notwithstanding anything herein to the contrary, any Holder delivering to the Trustee (or other Paying Agent appointed by the Company) the Fundamental Change Repurchase Notice contemplated by this Section 9.01 shall have the right to withdraw such Fundamental Change Repurchase Notice at any time prior to the close of business on the Business Day immediately preceding to the Fundamental Change Repurchase Date by delivery of a written notice of withdrawal to the Trustee (or other Paying Agent appointed by the Company) in accordance with Section 9.03 below.

The Trustee (or other Paying Agent appointed by the Company) shall promptly notify the Company of the receipt by it of any Fundamental Change Repurchase Notice or written notice of withdrawal thereof.

(b) Fundamental Change Company Notice. On or before the 20^th day after the occurrence of a Fundamental Change, the Company shall provide to all Holders of record of the Securities and the Trustee and Paying Agent a notice (the “Fundamental Change Company Notice”) of the occurrence of such Fundamental Change and of the repurchase right at the option of the Holders arising as a result thereof. Such mailing shall be by first class mail. Simultaneously with providing such Fundamental Change Company Notice, the Company shall publish a notice containing the information included therein once in a newspaper of general circulation in The City of New York or publish such information on the Company’s website or through such other public medium as the Company may use at such time.

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Each Fundamental Change Company Notice shall specify:

(i) the events causing the Fundamental Change;

(ii) the date of the Fundamental Change;

(iii) the last date on which a Holder may exercise the repurchase right;

(iv) the Fundamental Change Repurchase Price;

(v) the Fundamental Change Repurchase Date;

(vi) the name and address of the Paying Agent and the Conversion Agent, if applicable;

(vii) if applicable, the applicable Conversion Rate and any adjustments to the applicable Conversion Rate;

(viii) if applicable, that the Securities with respect to which a Fundamental Change Repurchase Notice has been delivered by a Holder may be converted only if the Holder withdraws the Fundamental Change Repurchase Notice in accordance with Section 9.03; and

(ix) the procedures that Holders must follow to require the Company to repurchase their Securities.

No failure of the Company to give the foregoing notices and no defect therein shall limit the Holders’ repurchase rights or affect the validity of the proceedings for the repurchase of the Securities pursuant to this Section 9.01.

(c) No Payment During Events of Default. There shall be no purchase of any Securities pursuant to Article 9 if there has occurred (prior to, on or after as the case may be, the giving, by the Holders of such Securities, of the required Fundamental Change Repurchase Notice) and is continuing an Event of Default (other than a default in the payment of the Fundamental Change Repurchase Price) and the principal amount of the Securities has been accelerated in accordance with the Indenture and such acceleration has not been rescinded. The Paying Agent will promptly return to the respective Holders thereof any Securities (i) with respect to which a Fundamental Change Repurchase Notice has been withdrawn in compliance with this Indenture, or (ii) held by it during the continuance of an Event of Default (other than a default in the payment of the Fundamental Change Repurchase Price) in which case, upon such return, the Fundamental Change Repurchase Notice with respect thereto shall be deemed to have been withdrawn.

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(d) Payment of Fundamental Change Repurchase Price. The Securities to be repurchased pursuant to this Section 9.01 shall be paid for in cash.

Section 9.02. Effect of Fundamental Change Repurchase Notice. Upon receipt by the Paying Agent of the Fundamental Change Repurchase Notice specified in Section 9.01(a), the Holder of the Security in respect of which such Fundamental Change Repurchase Notice was given shall (unless such Fundamental Change Repurchase Notice is withdrawn as specified in Section 9.03) thereafter be entitled to receive solely the Fundamental Change Repurchase Price with respect to such Security. Such Fundamental Change Repurchase Price shall be paid to such Holder, subject to receipt of funds by the Paying Agent, promptly following the later of (x) the Fundamental Change Repurchase Date (provided the conditions in Section 9.01(a) have been satisfied) and (y) the time of delivery of such Security to the Paying Agent by the Holder thereof in the manner required by Section 9.01(a) and the time of the book-entry transfer or delivery of the Securities.

Section 9.03. Withdrawal of Fundamental Change Repurchase Notice.

(a) A Fundamental Change Repurchase Notice may be withdrawn by means of a written notice of withdrawal delivered to the Paying Agent in accordance with the Fundamental Change Company Notice at any time prior to the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date, specifying:

(i) the principal amount of the Securities with respect to which such notice of withdrawal is being submitted;

(ii) if Physical Securities have been issued, the certificate numbers of the withdrawn Securities; and

(iii) the principal amount, if any, of such Securities that remains subject to the original Fundamental Change Repurchase Notice, which portion must be in principal amounts of $1,000 or a multiple of $1,000;

provided, however, that if the Securities are not in certificated form, the notice must comply with appropriate procedures of the Depositary.

Section 9.04. Deposit of Fundamental Change Repurchase Price. Prior to 10:00 a.m. (local time in the City of New York) on the Fundamental Change Repurchase Date, the Company shall deposit with the Trustee or with the Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of them is acting as the Paying Agent, shall segregate and hold in trust as provided herein) an amount of money (in immediately available funds if deposited on such Business Day) sufficient to pay the Fundamental Change Repurchase Price, of all the Securities or portions thereof that are to be

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repurchased as of the Fundamental Change Repurchase Date. The Company shall promptly notify the Trustee in writing of the amount of any deposits of cash made pursuant to this Section 9.04. If the Paying Agent holds cash sufficient to pay the Fundamental Change Repurchase Price of any Security for which a Fundamental Change Repurchase Notice has been tendered and not withdrawn in accordance with this Indenture as of the close of business on the Business Day prior to the Fundamental Change Repurchase Date, then immediately following the Fundamental Change Repurchase Date, (a) such Security will cease to be outstanding and Interest will cease to accrue thereon and (b) all other rights of the Holder in respect thereof will terminate (other than the right to receive the Fundamental Change Repurchase Price upon delivery or transfer of such Security).

Section 9.05. Securities Repurchased in Whole or in Part. Any Security that is to be repurchased, whether in whole or in part, shall be surrendered at the office of the Paying Agent (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing) and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security, without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Security so surrendered which is not repurchased.

Section 9.06. Covenant to Comply With Securities Laws Upon Repurchase of Securities Pursuant to a Fundamental Change Repurchase Notice. In connection with any offer to repurchase Securities under Section 9.01 (provided that such offer or repurchase constitutes an “issuer tender offer” for purposes of Rule 13e-4 (which term, as used herein, includes any successor provision thereto) under the Exchange Act at the time of such offer or repurchase), the Company shall (i) comply with Rule 13e-4 and Rule 14e-1 under the Exchange Act, (ii) file the related Schedule TO (or any successor schedule, form or report) under the Exchange Act, and (iii) otherwise comply with all Federal and state securities laws so as to permit the rights and obligations under Section 9.01 to be exercised in the time and in the manner specified in Section 9.01.

Section 9.07. Repayment to the Company. The Trustee and the Paying Agent shall return to the Company any cash that remains unclaimed, together with interest or dividends, if any, thereon, held by them for the payment of the Fundamental Change Repurchase Price; provided that to the extent that the aggregate amount of cash deposited by the Company pursuant to Section 9.04 exceeds the aggregate Fundamental Change Repurchase Price of the Securities or portions thereof which the Company is obligated to repurchase as of the Fundamental Change Repurchase Date, then as soon as practicable following the Fundamental Change Repurchase Date, the Trustee or the Paying Agent, as the case may be, shall return any such excess to the Company.

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ARTICLE 10

REPURCHASES AT THE OPTION OF THE HOLDER

Section 10.01. Generally. (a) The Holders may require the Company to repurchase any outstanding Securities for cash on September 15, 2016 (the “Repurchase Date”) at a purchase price equal to 100% of the principal amount of the Securities to be repurchased, plus any accrued and unpaid Interest to, but excluding the applicable Repurchase Date (the “Repurchase Price”); provided that if such Repurchase Date is an Interest Payment Date, Interest on the Securities will be payable to the Holders in whose names the Securities are registered at the close of business on the corresponding Record Date.

(b) The Company shall give written notice (the “Repurchase Notice”) of the Repurchase Date by notice to the Trustee, the Paying Agent and to all Holders at their addresses shown in the register of the Registrar, and to beneficial owners as required by applicable law, not less than 20 Business Days prior to the Repurchase Date (the “Repurchase Notice Date”). Each Repurchase Notice shall include a repurchase election notice, in substantially the form on the reverse of the Securities (a “Repurchase Election Notice”) to be completed by a Holder. Each Repurchase Notice shall specify:

(i) the Repurchase Price;

(ii) the Repurchase Date

(iii) the Conversion Rate;

(iv) the name and address of the Paying Agent and the Conversion Agent;

(v) that Securities as to which a Repurchase Election Notice has been given may be converted in accordance with Article 11 only if the Holder withdraws the Repurchase Election Notice in accordance with Section 10.03;

(vi) the procedures the Holders must follow to require the Company to repurchase their Securities;

On or before the Repurchase Notice Date, the Company shall publish a notice containing substantially the same information that is required in the Company Repurchase Notice in a newspaper of general circulation in the City of New York or publish the information on the Company’s website or through such other public medium as the Company may use at that time.

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(c) Repurchases of Securities by the Company pursuant to this Section 10.01 shall be made, at the option of the Holder thereof, upon:

(i) delivery to the Paying Agent by the Holder of the Repurchase Election Notice at any time from the opening of business on the date that is 20 Business Days prior to the applicable Repurchase Date until the close of business on the Business Day immediately preceding such Repurchase Date; and

(ii) book-entry transfer or delivery of such Security to the Trustee (or other Paying Agent appointed by the Company) at any time after delivery of the Repurchase Notice (together with all necessary endorsements) at the applicable Corporate Trustee Office or the Trustee (or other Paying Agent appointed by the Company). Delivery of such Security shall be a condition to receipt by the Holder of the Repurchase Price therefor; provided that, the Repurchase Price shall be paid pursuant to this Section 10.01 only if the Security delivered to the Trustee (or other Paying Agent appointed by the Company) shall conform in all respects to the description thereof in the related Repurchase Election Notice.

The Repurchase Election Notice shall state:

(A) if certificated, the certificate number of the Securities to be delivered for repurchase, or if not certificated, the Repurchase Election Notice must comply with applicable procedures of the Depositary);

(B) the portion of the principal amount of Securities to be repurchased, which must be $1,000 or a multiple thereof; and

(C) that such Securities are to be repurchased by the Company pursuant to the applicable provisions of the Securities and in this Indenture.

Any purchase by the Company contemplated pursuant to the provisions of this Section 10.01 shall be consummated by the delivery of the consideration to be received by the Holder promptly following the later of the Repurchase Date and the time of the book-entry transfer or delivery of the Securities.

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Notwithstanding anything herein to the contrary, any Holder delivering to the Trustee (or other Paying Agent appointed by the Company) the Repurchase Election Notice contemplated by this Section 10.01 shall have the right to withdraw such Repurchase Election Notice at any time prior to the close of business on the Business Day immediately preceding to the Repurchase Date by delivery of a written notice of withdrawal to the Trustee (or other Paying Agent appointed by the Company) in accordance with Section 10.03 below.

The Trustee (or other Paying Agent appointed by the Company) shall promptly notify the Company of the receipt by it of any Repurchase Election Notice or written notice of withdrawal thereof.

Section 10.02. Effect Of A Repurchase Election Notice. Upon receipt by the Paying Agent of the Repurchase Election Notice specified in Section 10.01(a), the Holder of the Security in respect of which such Repurchase Election Notice was given shall (unless such Repurchase Election Notice is withdrawn as specified in Section 10.03) thereafter be entitled to receive solely the Repurchase Price with respect to such Security. Such Repurchase Price shall be paid to such Holder, subject to receipt of funds by the Paying Agent, promptly following the later of (x) the Repurchase Date (provided the conditions in Section 10.01 have been satisfied) and (y) the time of delivery of such Security to the Paying Agent by the Holder thereof in the manner required by Section 10.01 and the time of the book-entry transfer or delivery of the Securities.

Section 10.03. Withdrawal Of Repurchase Election Notice. (a) A Repurchase Election Notice may be withdrawn by means of a written notice of withdrawal delivered to the Paying Agent in accordance with the Repurchase at any time prior to the close of business on the Business Day immediately preceding the Repurchase Date, specifying:

(i) the principal amount of the Securities with respect to which such notice of withdrawal is being submitted;

(ii) if Physical Securities have been issued, the certificate number of the withdrawn Securities; and

(iii) the principal amount, if any, of such Securities that remains subject to the original Repurchase Election Notice, which portion must be in principal amounts of $1,000 or a multiple of $1,000;

provided, however, that if Securities are not in certificated form, the notice must comply with the applicable procedures of the Depositary.

Section 10.04. Deposit of Repurchase Price. Prior to 10:00 a.m. (local time in the City of New York) on the Repurchase Date, the Company shall deposit with the Trustee or with the Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of them is acting as the Paying Agent, shall segregate and hold in trust as provided herein) an

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amount of money (in immediately available funds if deposited on such Business Day) sufficient to pay the Repurchase Price, of all the Securities or portions thereof that are to be repurchased as of the Repurchase Date. The Company shall promptly notify the Trustee in writing of the amount of any deposits of cash made pursuant to this Section 10.04. If the Paying Agent holds cash sufficient to pay the Repurchase Price of any Security for which a Repurchase Notice has been tendered and not withdrawn in accordance with this Indenture as of the close of business on the Business Day prior to the Repurchase Date, then immediately following the Repurchase Date, (a) such Security will cease to be outstanding and Interest will cease to accrue thereon and (b) all other rights of the Holder in respect thereof will terminate (other than the right to receive the Repurchase Price and previously accrued and unpaid Interest upon delivery or transfer of such Security).

Section 10.05. Securities Repurchased in Whole or Part. Upon surrender of a Security that is repurchased in part, the Company shall execute and the Trustee shall authenticate and deliver to the Holder a new Security in an authorized denomination equal in principal amount to the portion not repurchased of the Security surrendered. The Company shall not be required to (i) issue, register the transfer of, or exchange any Securities during a period beginning at the open of 15 days before the mailing of a notice of redemption or (ii) register the transfer of, or exchange any, Securities so selected for redemption, in whole or in part, except the unredeemed portion of any Security being redeemed in part.

Section 10.06. No Payments During Events of Default. There shall be no purchase of any Securities pursuant to this Article 10 if there has occurred (prior to, on or after as the case may be, the giving, by the Holders of such Securities, of the required Repurchase Election Notice) and is continuing an Event of Default (other than a default in the payment of the Repurchase Price) and the principal amount of the Securities has been accelerated in accordance with the Indenture and such acceleration has not been rescinded. The Paying Agent will promptly return to the respective Holders thereof any Securities (i) with respect to which a Repurchase Election Notice has been withdrawn in compliance with this Indenture, or (ii) held by it during the continuance of an Event of Default (other than a default in the payment of the Repurchase Price) in which case, upon such return, the Repurchase Election Notice with respect thereto shall be deemed to have been withdrawn.

Section 10.07. Payment Of Repurchase Price. The Securities to be purchased pursuant to this Article 10 shall be paid for in cash.

Section 10.08. Covenant to Comply with Securities Laws Upon Repurchase of Securities Pursuant to a Repurchase Election Notice. In connection with any offer to repurchase Securities under Section 10.01 (provided that such offer or repurchase constitutes an “issuer tender offer” for purposes of Rule 13e-4 (which term, as used herein, includes any

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successor provision thereto) under the Exchange Act at the time of such offer or repurchase), the Company shall (a) comply with Rule 13e-4 and Rule 14e-1 under the Exchange Act, (b) file the related Schedule TO (or any successor schedule, form or report) under the Exchange Act, and (c) otherwise comply with all Federal and state securities laws so as to permit the rights and obligations under Section 10.01 to be exercised in the time and in the manner specified in Section 10.01.

Section 10.09. Repayment to the Company. The Trustee and the Paying Agent shall return to the Company any cash that remains unclaimed, together with interest or dividends, if any, thereon, held by them for the payment of the Repurchase Price; provided that to the extent that the aggregate amount of cash deposited by the Company pursuant to Section 10.04 exceeds the aggregate Repurchase Price of the Securities or portions thereof which the Company is obligated to repurchase as of the Repurchase Date, then as soon as practicable following the Repurchase Date, the Trustee or the Paying Agent, as the case may be, shall return any such excess to the Company.

ARTICLE 11

CONVERSION

Section 11.01. Conversion Obligation.

(a) Subject to and upon compliance with the provisions of this Indenture, each Holder shall have the right, at such Holder’s option, through the close of business on the Business Day immediately prior to the Stated Maturity to convert the principal amount of any such Securities, or any portion of such principal amount which is $1,000 or a multiple thereof at the rate per $1,000 principal amount of such Security (the “Conversion Rate”) then in effect, (x) during the 60 calendar days prior to the business day immediately preceding September 15, 2041, without regard to the conditions described in clauses (i) through (vi) below and (y) except during the 60 calendar days prior to the business day immediately preceding September 15, 2041, only upon the satisfaction of any of the following conditions:

(i) A Holder may surrender all or a portion of its Securities for conversion during any fiscal quarter commencing after January 2, 2010 (and only during such fiscal quarter) if the Last Reported Sale Price for the Common Stock for at least 20 Trading Days (whether or not consecutive) during the period of 30 consecutive Trading Days ending on the last Trading Day of the preceding fiscal quarter is greater than or equal to 130% of the Conversion Price on each applicable Trading Day.

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(ii) A Holder may surrender its Securities for conversion during the five Business Day period after any five consecutive Trading Day period (the “Measurement Period”) in which the Trading Price per $1,000 principal amount of Securities, as determined following a request by a Holder in accordance with the procedures set forth in this Section 11.01(a)(ii), for each day of such period was less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate (“Trading Price Condition”). For purposes of this Section 11.01(a)(ii), if the Bid Solicitation Agent cannot reasonably obtain at least one bid for $5,000,000 principal amount of Securities from an independent nationally recognized securities dealer as required by the definition of Trading Price, then the Trading Price per $1,000 principal amount of Securities will be deemed to be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate. If the Company does not instruct the Bid Solicitation Agent to obtain bids when required, the Trading Price per $1,000 principal amount of the Securities will be deemed to be less than 98% of the product of the Last Reported Sale Price on each day that the Company fails to do so. In connection with any conversion in accordance with this Section 11.01(a)(ii), the Bid Solicitation Agent shall have no obligation to determine the Trading Price of the Securities unless requested by the Company; and the Company shall have no obligation to make such request to the Bid Solicitation Agent unless a Holder provides the Company with reasonable evidence that the Trading Price per $1,000 principal amount of Securities would be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate and such Holder requests that the Company require the Bid Solicitation Agent to determine the Trading Price. Promptly after receiving such evidence, the Company shall instruct the Bid Solicitation Agent to determine the Trading Price of the Securities beginning on the next Trading Day and on each successive Trading Day until the Trading Price per $1,000 principal amount of Securities is greater than or equal to 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate. If and when the Trading Price per $1,000 principal amount of Securities, for each day of the Measurement Period is less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate, the Company will notify the Holders and the Trustee. If at anytime thereafter, the Trading Price per $1,000 principal amount of Securities is greater than or equal to 98% of the product of the Last Reported Sale Price of the Common Stock and the Conversion Rate for such date, the Company will also notify the Holders and the Trustee.

(iii) A Holder may surrender its Securities for conversion if the Company calls such Securities for redemption as provided in Article 8, at any time prior to the close of business on the Business Day immediately preceding the Redemption Date, even if the Securities are not otherwise convertible at such time, after which time the Holder’s

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right to convert its Securities pursuant to this Section 11.01 will expire unless the Company defaults in the payment of the Redemption Price (in which case, a Holder may convert such Securities until the Redemption Price has been paid or duly provided for).

(iv) During the 60 days prior to close of business on the business day immediately preceding September 15, 2016, a Holder may surrender its Securities for conversion even if the Securities are not otherwise convertible.

(v) In the event that the Company elects to:

(A) issue to all or substantially all holders of Common Stock rights, options or warrants convertible into or exchangeable or exercisable for Common Stock, for a period expiring not more than 45 calendar days after the announcement date of such issuance, at a price less than the average of the Last Reported Sale Prices of a share of Common Stock for the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the announcement of such issuance; or

(B) distribute to all or substantially all holders of Common Stock assets, debt securities or other rights to purchase securities of the Company, which distribution has a per share value, as reasonably determined by the Company’s Board of Directors in good faith, exceeding 10% of the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the date of announcement for such distribution,

then, in each, the Company shall notify the Holders, in the manner provided in Section 1.06, at least 25 Scheduled Trading Days prior to the Ex-Dividend Date for such issuance or distribution. Once the Company has given such notice, Holders may surrender Securities for conversion at any time until the earlier of 5:00 p.m., New York City time, on the Business Day immediately preceding such Ex-Dividend Date and the Company’s announcement that such issuance or distribution will not take place, even if the Securities are not otherwise convertible at such time.

Holders shall not have the right to convert their Securities pursuant to this Section 11.01(a)(v) if in connection with the distribution described in this Section 11.01(a)(v) that gives rise to a right to convert their Securities, such Holders are entitled to participate (as a result of holding their Securities, and at the same time as holders of Common Stock participate) in any such transaction as if such Holders held a number of shares of Common Stock equal to the applicable Conversion Rate on the Ex-Date for such distribution, multiplied by the principal amount of Securities held by such Holder divided by $1,000, without having to convert their Securities.

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(vi) If the Company is party to a transaction or event that constitutes a Fundamental Change or a Make-Whole Fundamental Change, regardless of whether a Holder has the right to require the Company to repurchase its Securities pursuant to Section 9.01, or if the Company is a party to a consolidation, merger, binding share exchange, or transfer or lease of all or substantially all of the assets of the Company, pursuant to which the Common Stock would be converted into cash, securities or other assets, the Securities may be surrendered for conversion at any time from or after the date which is 30 days after the effective date of such transaction or, if such transaction also constitutes a Fundamental Change, until the related Fundamental Change Repurchase Date. The Company shall notify Holders about such transaction on the effective date of such transaction.

Notwithstanding the foregoing, unless otherwise convertible pursuant to this Section 11.01(a) (excluding Sections 11.01(a)(i), 11.01(a)(ii) or Section 11.01(a)(v)), Securities shall not be convertible pursuant Sections 11.01(a)(i), 11.01(a)(ii) or Section 11.01(a)(v), if, at the time a Holder of Securities tenders its Securities for conversion, there exists a default or event of default under the Credit Agreement, or a default or event of default under the Credit Agreement would result from such conversion. The inability of a Holder to convert its Securities because of this restriction set forth in the immediately preceding sentence will not constitute a Default or an Event of Default under the Indenture.

If the Securities would be convertible but are not convertible because of the restrictions set forth in the immediately preceding paragraph and a Holder tenders its Securities for conversion the Conversion Date with respect to the conversion of such Securities will not occur, and the Company will use reasonable efforts to permit such conversions, which may include, without limitation, seeking to obtain the consent of the lenders under the Credit Agreement, attempting to refinance the debt under the Credit Agreement and the issuance and sale of additional equity securities. If the Company’s reasonable efforts are successful and the conversion of such Securities is permitted to occur, the Company provide notice to the relevant Holder or Holders of the Conversion Date for any such conversion. If, despite the Company’s reasonable efforts, conversions continue to be prohibited, the Company will promptly inform such converting Holder and return such Holder’s Securities and any related Notice of Conversion will be deemed to be revoked to the extent of such returned Securities.

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Section 11.02. Conversion Procedure.

(a) Upon conversion of any Security, subject to this Section 11.02 and Sections 11.01 and 11.07, the Company will deliver to Holders in respect of each $1,000 principal amount of Securities tendered for conversion a settlement amount equal to the sum of the Daily Settlement Amounts for each of the 20 Trading Days during the Observation Period (the “Settlement Amount”).

The “Daily Settlement Amount” for each of the 20 consecutive Trading Days during the Observation Period shall consist of:

(i) cash equal to the lesser of $50 and the Daily Conversion Value; and

(ii) if the Daily Conversion Value exceeds $50, a number of shares of Common Stock equal to (A) the difference between the Daily Conversion Value and $50, divided by (B) the Volume-Weighted Average Price for such Trading Day.

The “Daily Conversion Value” means, for each of the 20 consecutive Trading Days during the Observation Period, 5% of the product of (i) the applicable Conversion Rate on such day and (ii) the Volume-Weighted Average Price of the Common Stock on such Trading Day.

(b) If any adjustment to the Conversion Rate or conversion of Securities pursuant to this Article 11 would require the Company to issue shares of Common Stock in excess of the amount permitted by applicable listing standards of The NASDAQ Global Select Market to be issued without approval by the Company’s stockholders, the Company shall, at its option, either (i) obtain the approval of its stockholders with respect to such issuance or (ii) in lieu of delivering shares of Common Stock in excess of such limitations, pay cash on a pro rata basis to the Holders of Securities being converted in an amount per share of Common Stock equal to the Volume-Weighted Average Price of the Common Stock on each Trading Day of the relevant Observation Period in respect of which such shares would otherwise be required to be delivered to the converting Holders.

(c) For purposes of this Section 11.02, and notwithstanding the definition contained in Section 1.01, the term “Trading Day” shall mean a day during which (A) there is no Market Disruption Event and (B) trading in the Common Stock generally occurs on The NASDAQ Global Select Market or, if the Common Stock is not then listed on The NASDAQ Global Select Market, on the other principal U.S. national or regional securities exchange on which the Common Stock is listed or, if the Common Stock is not then listed on a United States national or regional securities exchange, on the principal other market on which the Common Stock is then traded. If the Common Stock (or other security for which a Volume-Weighted Average Price must be determined for purposes of this Section 11.02) is not so listed or traded, then for purposes of this Section 11.02, “Trading Day” shall mean a Business Day.

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(d) Before any Holder of a Security shall be entitled to convert the same as set forth above, such Holder shall (1) in the case of a Global Security, comply with the procedures of the Depositary in effect at that time and, if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 11.02(k) and, if required pursuant to Section 11.02(h), pay all stamp, transfer or similar taxes or duties, if any, in connection with such conversion and (2) in the case of a Security issued in certificated form, (A) complete and manually sign and deliver an irrevocable written notice to the Conversion Agent in the form on the reverse of such certificated Security (or a facsimile thereof) (a “Notice of Conversion”) at the office of the Conversion Agent and shall state in writing therein the principal amount of Securities to be converted and the name or names (with addresses) in which such Holder wishes the certificate or certificates for any shares of Common Stock, if any, to be delivered upon settlement of the Company’s conversion obligation to be registered, (B) surrender such Securities, duly endorsed to the Company or in blank (and accompanied by appropriate endorsement and transfer documents), at the office of the Conversion Agent, (C) if required pursuant to Section 11.02(h), pay all stamp, transfer or similar taxes or duties, if any, in connection with such conversion, and (D) if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 11.02(k). No Notice of Conversion with respect to any Securities may be tendered by a Holder thereof if such Holder has also tendered a Fundamental Change Repurchase Notice or Repurchase Election Notice and not validly withdrawn such Fundamental Change Repurchase Notice or Repurchase Election Notice, as the case may be, in accordance with Section 9.03 or Section 10.03.

If more than one Security shall be surrendered for conversion at one time by the same Holder, the Company’s conversion obligation with respect to such Securities, if any, that shall be payable upon conversion shall be computed on the basis of the aggregate principal amount of the Securities (or specified portions thereof to the extent permitted thereby) so surrendered.

(e) A Security shall be deemed to have been converted immediately prior to the close of business on the date (the “Conversion Date”) that the Holder has complied with the requirements set forth in clause (d); provided, however, that the Person in whose name any shares of the Common Stock shall be issuable upon such conversion will become the Holder of record of such shares as of the close of business on the last Trading Day of the relevant Observation Period.

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(f) Payment of the Settlement Amount pursuant to Section 11.02(a) in satisfaction of the Company’s conversion obligation shall be made by the Company in no event later than the third Business Day immediately following the last Trading Day of the Observation Period. The Company shall deliver cash in lieu of any fractional share of Common Stock issuable in connection with payment of the Settlement Amount (based on the Volume-Weighted Average Price of the last Trading Day of the applicable Observation Period), provided that record ownership shall be determined as set forth in Section 11.02(e) above.

(g) In case any Security shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to or upon the written order of the Holder of the Security so surrendered, without charge to such Holder, a new Security or Securities in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Securities.

(h) If a Holder submits a Security for conversion, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of any shares of Common Stock upon the conversion, unless the tax is due because the Holder requests any shares to be issued in a name of other than the Holder’s name, in which case the Holder will pay that tax. The Conversion Agent may refuse to deliver the certificates representing the shares of Common Stock being issued in a name other than the Holder’s name until the Trustee receives a sum sufficient to pay any tax which will be due because the shares are to be issued in a name other than the Holder’s name. Nothing herein shall preclude any tax withholding required by law or regulations.

(i) Except as provided in Section 11.03, no adjustment shall be made for dividends on any shares issued upon the conversion of any Security as provided in this Article 11.

(j) Upon the conversion of an interest in a Global Security, the Trustee shall make a notation on such Global Security as to the reduction in the principal amount represented thereby. The Company shall notify the Trustee in writing of any conversion of any Security effected through any Conversion Agent other than the Trustee.

(k) Upon conversion, a Holder will not receive any separate cash payment for accrued and unpaid Interest except as set forth below. The Company’s settlement of the conversion obligation as described above shall be deemed to satisfy its obligation to pay the principal amount of the Security and accrued and unpaid Interest to, but not including, the Conversion Date. As a result, accrued and unpaid Interest to, but not including, the Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited, and to have been paid first out of such conversion. Notwithstanding the preceding sentence, payments in respect of accrued and unpaid Interest on Securities converted after the close of business on a Record Date and prior to the opening of business on the related Interest Payment Date shall be governed by the provisions of Section 4.01 hereof. Except as described above, no payment or adjustment will be made for accrued interest on converted Securities.

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Section 11.03. Adjustment of Conversion Rate. The initial Conversion Rate (the “Initial Conversion Rate”) is [51.5318] shares of Common Stock per $1,000 principal amount of Securities (equivalent to a Conversion Price of $19.4055). The Conversion Rate shall be adjusted from time to time by the Company as follows, except that the Conversion Rate shall not be adjusted if Holders of the Securities participate (other than in a case of a share split of share combination), at the same time as holders of Common Stock and as a result of holding the Securities and solely as a result of holding the Securities, in any of the transactions described in this Section 11.03 without having to convert their Securities and as if they held a number of shares of Common Stock equal to the applicable Conversion Rate, multiplied by the principal amount of Securities held by such Holders divided by $1,000:

(a) In case the Company shall exclusively issue shares of Common Stock as a dividend or distribution on all or substantially all shares of the outstanding Common Stock, or shall effect a share split into a greater number of shares of Common Stock or a share combination into a lesser number of shares of Common Stock, the Conversion Rate shall be adjusted based on the following formula:

where

CR₀  =   the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date of such dividend or distribution, or immediately prior to the open of business on the effective date of such share split or share combination, as applicable;

CR₁  =   the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date or the effective date;

OS₀  =   the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date or effective date; and

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OS₁  =   the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination.

Such adjustment shall become effective immediately after the open of business on the Ex-Dividend Date for such dividend or distribution, or immediately after the open of business on the effective date for such share split or share combination. If any dividend or distribution of the type described in this Section 11.03(a) is declared but not so paid or made, or any share split or combination of the type described in this Section 11.03(a) is announced but the outstanding shares of Common Stock are not split or combined, as the case may be, the Conversion Rate shall be immediately readjusted, effective as of the date the Company’s Board of Directors determines not to pay such dividend or distribution, or not to split or combine the outstanding shares of Common Stock, as the case may be, to the Conversion Rate that would then be in effect if such dividend, distribution, share split or share combination had not been declared or announced.

(b) In case the Company shall issue to all or substantially all holders of its outstanding shares of Common Stock rights, options or warrants entitling them (for a period expiring within 45 calendar days after the announcement date of such issuance) to subscribe for or purchase shares of Common Stock at a price per share less than the average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the date of announcement of such issuance, the Conversion Rate shall be increased based on the following formula:

where

CR₀  =   the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such issuance;

CR₁  =   the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date;

OS₀  =   the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date;

X      =   the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and

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Y      = the number of shares of Common Stock equal to the aggregate price payable to exercise or convert such rights, options or warrants divided by the average of the Last Reported Sale Prices of Common Stock over the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants.

Such increase shall be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the open of business on the Ex-Dividend Date for such issuance. To the extent that shares of Common Stock are not delivered after the expiration of such rights, options or warrants, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect had the increase with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights, options or warrants are not so issued, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such Ex-Dividend Date for such issuance had not occurred.

In determining whether any rights, options or warrants entitle the Holders to subscribe for or purchase shares of the Common Stock at less than such average of the Last Reported Sale Prices for the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the date of announcement for such issuance, and in determining the aggregate offering price of such shares of the Common Stock, there shall be taken into account any consideration received by the Company for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Company’s Board of Directors.

(c) If the Company distributes shares of its Capital Stock, evidences of its indebtedness, other assets or property of the Company or rights, options or warrants to acquire Company’s Capital Stock or other securities, to all or substantially all holders of its Common Stock, excluding:

(i) dividends or distributions and rights, options or warrants described in Section 11.03(a) or 11.03(b) above or Section 11.03(e) below;

(ii) dividends or distributions paid exclusively in cash; and

(iii) Spin-Offs to which the provisions set forth below in this Section 11.03(c) apply;

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then the Conversion Rate will be increased based on the following formula:

where

CR₀    = the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution;

CR₁    = the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date;

SP₀    = the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and

FMV   = the fair market value (as determined by the Company’s Board of Directors) of the shares of Capital Stock, evidences of indebtedness, assets, property, rights or warrants distributed with respect to each outstanding share of Common Stock on the Ex-Dividend Date for such distribution;

provided that if “FMV” as set forth above is equal to or greater than “SP₀” as set forth above, in lieu of the foregoing increase, adequate provision will be made so that each Holder shall receive, in respect of each $1,000 principal amount of the Securities, at the same time upon the same terms as holders of the Common Stock, the amount and kind of the Company’s Capital Stock, evidences of indebtedness, other assets or property or rights of the Company, options or warrants to acquire Company’s Capital Stock or other securities that such Holder would have received if such Holder owned a number of shares of the Common Stock equal to the Conversion Rate in effect on the Ex-Dividend Date for the distribution.

Such increase shall become effective immediately after the open of business on the Ex-Dividend Date for such distribution. If such distribution is not so paid or made, the Conversion Rate shall be decreased to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. If the Board of Directors of the Company determines the fair market value of any distribution for purposes of this Section 11.03(c) by reference to the actual or when issued trading market for any securities, it shall in doing so consider the prices in such market over the same period used above in computing the average of the Last Reported Sale Prices of Common Stock.

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With respect to an adjustment pursuant to this Section 11.03(c) where there has been a payment of a dividend or other distribution on the Common Stock of shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit (a “Spin-Off”), the Conversion Rate will be increased based on the following formula:

where

CR₀    = the Conversion Rate in effect immediately prior to the end of the Valuation Period;

CR₁    = the Conversion Rate in effect immediately after the end of the Valuation Period;

FMV₀  = the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common Stock over the first 10 consecutive Trading Day period after, and including, the effective date of the Spin-Off (the “Valuation Period”); and

MP₀    = the average of the Last Reported Sale Prices of Common Stock over the Valuation Period.

Such adjustment shall occur on the last day of the Valuation Period; provided that in respect of any conversion during the Valuation Period, references above with respect to 10 Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed between the effective date of such Spin-Off and the Conversion Date in determining the applicable Conversion Rate.

For purposes of this Section 11.03(c) and Sections 11.03(a) and 11.03(b), any dividend or distribution to which this Section 11.03(c) is applicable that also includes shares of Common Stock, or rights or warrants to subscribe for, purchase or convert into shares of Common Stock to which Section 11.03(a) and/or Section 11.03(b) applies, shall be deemed instead to be (1) a dividend or distribution of the evidences of indebtedness, assets or shares of Capital Stock other than such shares of Common Stock or rights or warrants to which Section 11.03(a) or 11.03(b) applies (and any Conversion Rate adjustment required by this Section 11.03(c) with respect to such dividend or distribution shall then be

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made) immediately followed by (2) a dividend or distribution of such shares of Common Stock or such rights or warrants to which Section 11.03(a) or 11.03(b) applies (and any further Conversion Rate adjustment required by Sections 11.03(a) and 11.03(b) with respect to such dividend or distribution shall then be made), except (A) the Ex-Dividend Date of such dividend or distribution shall be substituted for the “Ex-Dividend Date,” the “the Ex-Dividend Date or effective date,” and “the Ex-Dividend Date for such issuance” within the meaning of Sections 11.03(a) and 11.03(b) and (B) any shares of Common Stock included in such dividend or distribution shall not be deemed “outstanding immediately prior to such Ex-Dividend Date or effective date” within the meaning of Section 11.03(a).

(d) If the Company shall pay a dividend or make a distribution consisting exclusively of cash to all or substantially all holders of Common Stock, the Conversion Rate shall be adjusted based on the following formula:

where

CR₀  = the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution;

CR₁  = the Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution;

SP₀  = the Last Reported Sale Prices of the Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution; and

C     = the amount in cash per share the Company distributes to holders of Common Stock;

provided that if “C” as set forth above is equal to or greater than “SP₀” as set forth above, in lieu of the foregoing increase, each Holder shall receive, for each $1,000 principal amount of Securities, at the same time and upon the same terms as holders of shares of Common Stock, the amount of cash that such Holder would have received if such Holder owned a number of shares of Common Stock equal to the Conversion Rate on the Ex-Dividend Date for such cash dividend or distribution. Such increase shall become effective immediately after the open of business on the Ex-Dividend Date for such dividend or distribution. If such dividend or distribution is not so paid, the Conversion Rate shall be decreased to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

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Such adjustment to the Conversion Rate shall become effective immediately after the opening of business on the Ex-Dividend Date for such dividend or distribution. If such dividend or distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

For the avoidance of doubt, for purposes of this Section 11.03(d), in the event of any reclassification of the Common Stock, as a result of which the Securities become convertible into more than one class of Common Stock, if an adjustment to the Conversion Rate is required pursuant to this Section 11.03(d), references in this Section 11.03(d) to one share of Common Stock or Last Reported Sale Price of one share of Common Stock shall be deemed to refer to a unit or to the price of a unit consisting of the number of shares of each class of Common Stock into which the Securities are then convertible equal to the numbers of shares of such class issued in respect of one share of Common Stock in such reclassification. The above provisions of this paragraph shall similarly apply to successive reclassifications.

(e) In case the Company or any of its Subsidiaries make a payment in respect of a tender offer or exchange offer for all or any portion of the Common Stock, to the extent that the cash and value of any other consideration included in the payment per share of Common Stock exceeds the Last Reported Sale Price of the Common Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (as it may be amended), the Conversion Rate shall be increased based on the following formula:

where

CR₀  = the Conversion Rate in effect immediately prior to the close of business on the 10^th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires;

CR₁  = the Conversion Rate in effect immediately after to the close of business on the 10^th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires;

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AC   = the aggregate value of all cash and any other consideration (as determined by the Company’s Board of Directors) paid or payable for shares purchased in such tender or exchange offer;

OS₀  = the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires (prior to giving effect to the purchase of all shares accepted for purchase or exchange in such tender or exchange offer);

OS₁  = the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares accepted for purchase or exchange in such tender or exchange offer); and

SP₁  = the average of the Last Reported Sale Prices of Common Stock over the 10 consecutive Trading Day period commencing on the Trading Day next succeeding the date such tender or exchange offer expires,

such adjustment to the Conversion Rate to occur at the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; provided that in respect of any conversion within the 10 Trading Days immediately following, and including, the expiration date of any tender or exchange offer, references with respect to 10 Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed between the expiration date of such tender or exchange offer and the Conversion Date in determining the applicable Conversion Rate. If the Company is obligated to purchase shares pursuant to any such tender or exchange offer, but the Company is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such tender or exchange offer had not been made.

(f) For purposes of this Section 11.03, (i) the term “record date” shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of stockholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise) and (ii) the term “effective date” shall mean the first date on which the shares trade on the applicable exchange or in the applicable market, regular way, reflecting the transaction.

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(g) In addition to those required by clause (a), (b), (c), (d) or (e) of this Section 11.03, the Company from time to time may increase the Conversion Rate by any amount for a period of at least 20 Business Days if the Company’s Board of Directors determines that such increase would be in the Company’s best interest. In addition, the Company may also (but is not required to) increase the Conversion Rate to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock in connection with any dividend or distribution of shares (or rights to acquire shares) or similar event. Whenever the Conversion Rate is increased pursuant to the preceding sentence, the Company shall mail to the Holder of each Security at such Holder’s last address appearing on the Security Register provided for in Section 3.05 a notice of the increase at least fifteen days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.

(h) All calculations and other determinations under this Article 11 shall be made by the Company or its agents and shall be made to the nearest cent or to the nearest one-ten thousandth (1/10,000) of a share, as the case may be. No adjustment shall be made for the Company’s issuance of Common Stock or convertible or exchangeable securities or rights to purchase Common Stock or convertible or exchangeable securities, other than as provided in this Section 11.03. No adjustment shall be made to the Conversion Rate unless such adjustment would require a change of at least 1% in the Conversion Rate then in effect at such time. Any adjustment that would otherwise be required to be made shall be carried forward and taken into account in any subsequent adjustment or in connection with any conversion of Securities.

(i) Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly file with the Trustee and any Conversion Agent other than the Trustee an Officers’ Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee and the Conversion Agent shall have received such Officers’ Certificate, neither the Trustee nor the Conversion Agent shall be deemed to have knowledge of any adjustment of the Conversion Rate and may assume without inquiry that the last Conversion Rate of which a Responsible Officer of the Trustee or the Conversion Agent, as applicable, has actual knowledge is still in effect. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Rate to each Holder at his last address appearing on the Security Register provided for in Section 3.05 of this Indenture, within 20 days of the effective date of such adjustment. Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

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(j) In any case in which this Section 11.03 provides that an adjustment shall become effective immediately after (1) an Ex-Dividend Date or effective for an event or (2) the expiration date for any tender or exchange offer pursuant to Section 11.03(e) (each an “Adjustment Determination Date”), the Company may elect to defer until the occurrence of the applicable Adjustment Event (as hereinafter defined) (x) issuing to the Holder of any Security converted after such Adjustment Determination Date and before the occurrence of such Adjustment Event, the additional shares of Common Stock or other securities issuable upon such conversion by reason of the adjustment required by such Adjustment Event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment and (y) paying to such Holder any amount in cash in lieu of any fraction pursuant to Section 11.03. For purposes of this Section 11.03(j), the term “Adjustment Event” shall mean:

(i) in any case referred to in clause (1) hereof, the occurrence of such event,

(ii) in any case referred to in clause (2) hereof, the date a sale or exchange of Common Stock pursuant to such tender or exchange offer is consummated and becomes irrevocable.

(k) For purposes of this Section 11.03, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.

(l) Notwithstanding any of the foregoing, the Conversion Rate will not be adjusted: (i) upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the securities of the Company and the investment of additional optional amounts in shares of Common Stock under any plan; (ii) upon the issuance of any shares of Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any Subsidiary; (iii) upon the issuance of any shares of Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in clause (ii) and outstanding as of the date the Securities were first issued; (iv) for a change in the par value of the Common Stock; or (v) for accrued and unpaid Interest.

(m) If the Company pays withholding or backup withholding taxes on behalf of a Holder or other beneficial owner of the Securities as a result of an adjustment to the Conversion Rate, the Company may, at its option, set off such payments against payments of cash and Common Stock on the Securities.

Section 11.04. Shares to Be Fully Paid. The Company shall provide, free from preemptive rights, out of its authorized but unissued shares or shares held in treasury, sufficient shares of Common Stock to provide for conversion of the Securities from time to time as such Securities are presented for conversion.

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Section 11.05. Adjustments of Average Prices. Whenever a provision of the Indenture requires the calculation of an average of Last Reported Sale Prices, Volume-Weighted Average Prices, the Daily Conversion Values or the Daily Settlement Amounts over a span of multiple days (including an Observation Period and Stock Price), the Company will make appropriate adjustments to each to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date of the event occurs, at any time during the period when the Last Reported Sale Prices, Volume-Weighted Average Prices, the Daily Conversion Values or the Daily Settlement Amounts are to be calculated, including upon the occurrence of multiple events that each result in an adjustment to the Conversion Rate in such period.

Section 11.06. Adjustments Upon a Make-Whole Fundamental Change. (a) If a Make-Whole Fundamental Change occurs and a Holder elects to convert its Securities in connection with such Make-Whole Fundamental Change, the Company shall increase the Conversion Rate for the Securities so surrendered for conversion by a number of additional Ordinary Shares (the “Additional Shares”) as described below. A conversion of Securities shall be deemed for these purposes to be “in connection with” such Make-Whole Fundamental Change if the notice of conversion of the Securities is received by the Conversion Agent from, and including, the Effective Date of the Make-Whole Fundamental Change up to, and including, the Business Day immediately prior to the related Fundamental Change Purchase Date (or, in the case of a Make-Whole Fundamental Change that would have been a Fundamental Change but for subclause (C) in the proviso in clause (ii) of the definition thereof, the 15th Trading Day immediately following the Effective Date of such Make-Whole Fundamental Change).

(b) The number of Additional Shares, if any, by which the Conversion Rate will be increased shall be determined by reference to the table attached as Exhibit B hereto, based on the date on which the Make-Whole Fundamental Change occurs or becomes effective (the “Make-Whole Effective Date”) and the Stock Price; provided that if the actual Stock Price is between two Stock Price amounts in such table or the Make-Whole Effective Date is between two Make-Whole Effective Dates in such table, the number of Additional Shares shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the next higher and next lower Stock Price amounts and the two nearest Make-Whole Effective Dates, as applicable, based on a 365-day year; provided further that if (1) the Stock Price is greater than $100.00 per share of Common Stock (subject to adjustment in the same manner and at the same time as

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set forth in Section 11.03), no Additional Shares will be issued upon conversion and (2) the Stock Price is less than $14.83 per share (subject to adjustment in the same manner as set forth in Section 11.03), no Additional Shares will be issued upon conversion. Notwithstanding the foregoing, in no event will the total number of shares of Common Stock issuable upon conversion exceed 15.8991 per $1,000 principal amount of Securities (subject to adjustment in the same manner as set forth in Section 11.03).

(c) The Stock Prices set forth in the first row of the table in Exhibit B hereto shall be adjusted as of any date on which the Conversion Rate of the Securities is adjusted. The adjusted Stock Prices shall equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate in effect immediately prior to the adjustment giving rise to the Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted. The number of Additional Shares within the table shall be adjusted in the same manner as the Conversion Rate as set forth in Section 11.03 (other than by operation of an adjustment to the Conversion Rate by adding Additional Shares).

(d) The table in Exhibit B hereto sets forth the number of additional shares to be received per $1,000 principal amount of Securities.

(e) Upon surrender of Securities for conversion in connection with a Make-Whole Fundamental Change, the Company shall pay or deliver, as the case may be, in lieu of shares of Common Stock, including the Additional Shares, cash or a combination of cash and shares of Common Stock as provided under Section 11.02; provided, however, that if the consideration for the Common Stock in any Make-Whole Fundamental Change described in clause (ii) of the definition of Fundamental Change is comprised entirely of cash, for any conversion of Securities following the Make-Whole Effective Date of such Make-Whole Fundamental Change, the conversion obligation will be calculated based solely on the Stock Price for the transaction and will be deemed to be an amount equal to the applicable Conversion Rate (including any adjustment) multiplied by the Stock Price. In such event, the conversion obligation shall be determined and paid to Holders in cash on the third Business Day following the Conversion Date. The Company shall notify holders of the Make-Whole Effective Date and issue a press release announcing such Make-Whole Effective Date no later than five Business Days after such Make-Whole Effective Date.

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Section 11.07. Effect of Recapitalizations, Reclassifications and Changes to the Common Stock.

(a) If any of the following events occur:

(i) any recapitalization, reclassification or change of shares of Common Stock issuable upon conversion of the Securities (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination, or any other change for which an adjustment is provided in Section 11.03);

(ii) any consolidation, merger or combination of the Company with another Person;

(iii) any sale, lease or other transfer of all of the consolidated assets of the Company and its Subsidiaries to any other Person substantially as an entirety; or

(iv) any statutory share exchange,

in each case as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof), then, at and after the effective time of the transaction, the right to convert a Security will be changed to a right to convert each $1,000 principal amount of such Security into the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) that a Holder of a number of shares of Common Stock equal to the Conversion Rate immediately prior to such transaction would have owned or been entitled to receive (the “Reference Property”) upon such transaction. However, at and after the effective time of such transaction, (x) any amount otherwise payable in cash upon conversion of the Securities pursuant to Section 11.02 will continue to be payable in cash, (y) the number of shares of Common Stock otherwise deliverable upon conversion of the Securities pursuant to Section 11.02 will instead be deliverable in the amount and type of Reference Property that a holder of that number of shares of Common Stock would have received in such transaction and (z) the Volume-Weighted Average Price will be calculated based on the value of a unit of Reference Property that a holder of one share of Common Stock would have received in such transaction. If the transaction causes the Common Stock to be converted into, or exchanged for, the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), the Reference Property into which the Securities will be convertible shall be deemed to be the weighted average of the types and amounts of consideration received by the holders of Common Stock that affirmatively make such election. The Company shall notify Holders of such weighted average as soon as practicable after such determination is made.

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Section 11.08. Certain Covenants.

(a) Before taking any action which would cause an adjustment reducing the Conversion Rate below the then par value, if any, of the shares of Common Stock issuable upon conversion of the Securities, the Company will take all corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue shares of such Common Stock at such adjusted Conversion Rate.

The Company covenants that all shares of Common Stock issued upon conversion of Securities will be fully paid and non-assessable by the Company and free from all taxes, liens and changes with respect to the issue thereof.

(b) The Company covenants that, if any shares of Common Stock to be provided for the purpose of conversion of Securities hereunder require registration with or approval of any governmental authority under any federal or state law before such shares may be validly issued upon conversion, the Company will in good faith and as expeditiously as possible, to the extent then permitted by the rules and interpretations of the Commission (or any successor thereto), endeavor to secure such registration or approval, as the case may be.

(c) The Company covenants that if at any time the Common Stock shall be listed on any other national securities exchange or automated quotation system the Company will, if permitted and required by the rules of such exchange or automated quotation system, list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, all Common Stock issuable upon conversion of the Securities.

(d) The Company covenants that it shall not become a party to any transaction described in Section 11.07 unless the terms of such transaction are consistent with the foregoing.

Section 11.09. Responsibility of Trustee. The Trustee and any other Conversion Agent shall not at any time be under any duty or responsibility to any Holder to determine the Conversion Rate or whether any facts exist which may require any adjustment of the Conversion Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, which may at any time be issued or delivered upon the conversion of any Security; and the Trustee and any other Conversion Agent make no representations with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Security for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article 11. Without limiting the generality of the foregoing, neither the Trustee nor any Conversion Agent shall be under any responsibility to determine the correctness of any

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provisions contained in any supplemental indenture entered into pursuant to Section 11.07 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Holders upon the conversion of their Securities after any event referred to in such Section 11.07 or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 14.01, may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in conclusively relying upon, the Officers’ Certificate (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto.

Section 11.10. Notice to Holders Prior to Certain Actions. In case:

(a) the Company shall declare a dividend (or any other distribution) on its Common Stock that would require an adjustment in the Conversion Rate pursuant to Section 11.03;

(b) the Company shall authorize the granting to all of the holders of its Common Stock of rights or warrants to subscribe for or purchase any share of any class or any other rights or warrants;

(c) of any reclassification of the Common Stock of the Company (other than a subdivision or combination of its outstanding Common Stock, or a change in par value, or from par value to no par value, or from no par value to par value), or of any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or of the sale or transfer of all or substantially all of the assets of the Company; or

(d) of the voluntary or involuntary dissolution, liquidation or winding-up of the Company;

the Company shall cause to be filed with the Trustee and to be mailed to each Holder at his address appearing on the Security Register, provided for in Section 3.05 of this Indenture, as promptly as possible but in any event at least twenty days prior to the applicable date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.

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Failure to give such notice, or any defect therein, shall not affect the legality or validity of such dividend, distribution, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.

Section 11.11. Stockholder Rights Plans. Each share of Common Stock issued upon conversion of Securities pursuant to this Article 11 shall be entitled to receive the appropriate number of rights, if any, and the certificates representing the Common Stock issued upon such conversion shall bear such legends, if any, in each case as may be provided by the terms of any stockholder rights plan adopted by the Company, as the same may be amended from time to time. If at the time of conversion, however, the rights have separated from the shares of Common Stock in accordance with the provisions of the applicable stockholder rights agreement so that the Holders of the Securities would not be entitled to receive any rights in respect of Common Stock issuable upon conversion of the Securities, the Conversion Rate will be adjusted at the time of separation as if the Company has distributed to all holders of Common Stock, shares of the Capital Stock of the Company, evidences of indebtedness, assets, property, rights, options or warrants as provided in Section 11.03(c), subject to readjustment in the event of the expiration, termination or redemption of such rights.

ARTICLE 12

EVENTS OF DEFAULT; REMEDIES

Section 12.01. Events of Default. “Event of Default,” wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(a) default in the payment of Interest on any Securities when due and payable and such default continues for a period of 30 days, whether or not prohibited by Article 5;

(b) default in the payment of the principal amount, Redemption Price, Fundamental Change Repurchase Price or Repurchase Price on any Security when it becomes due and payable, upon declaration of acceleration or otherwise, whether or not prohibited by Article 5;

(c) default in the Company’s obligation to convert the Securities into shares of its Common Stock or cash, as applicable, upon exercise of a Holder’s conversion rights in accordance with Article 11 hereof and such default continues for a period of 10 calendar days;

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(d) failure by the Company to give a Fundamental Change Company Notice or a notice of certain corporate events pursuant to Section 11.01(a)(v) in each case when due;

(e) failure by the Company to comply with its obligations under Article 13 hereof;

(f) default in the performance of any covenant, agreement or condition of the Company in this Indenture or the Securities (other than a default specified in paragraph (a) or (b) above), and such default continues for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Outstanding Securities a written notice specifying such default and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder;

(g) default by the Company or any of its significant Subsidiaries (as defined in Article 1, Rule 1-02 of Regulation S-X) or Subsidiary Guarantors with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed in excess of $25 million in the aggregate of the Company and/or any such Subsidiary, whether such indebtedness now exists or shall hereafter be created (i) resulting in such indebtedness becoming or being declared due and payable or (ii) constituting a failure to pay the principal or interest of any such debt when due and payable at its Stated Maturity, upon required repurchase, upon declaration of acceleration or otherwise, including any applicable grace period, without such indebtedness having been discharged or such acceleration having been rescinded or annulled within 30 days after written notice to the Company from the Trustee or the Holders of at least 25% in principal amount of the Securities then Outstanding;

(h) the entry by a court having jurisdiction in the premises of (i) a decree or order for relief in respect of the Company or any Subsidiary Guarantor of a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or (ii) a decree or order adjudging the Company or any Subsidiary Guarantor as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company or any Subsidiary Guarantor under any applicable federal or state law or (iii) appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or of any Subsidiary Guarantor of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days;

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(i) the commencement by the Company or any Subsidiary Guarantor of a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company or any Subsidiary Guarantor in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal or state law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or of any Subsidiary Guarantor or any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company or any Subsidiary Guarantor in furtherance of any such action; or

(j) except as permitted by this Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect, or any Subsidiary Guarantor, or any person acting on its behalf, shall deny or disaffirm its obligation under the Subsidiary Guarantee.

Section 12.02. Acceleration of Maturity; Rescission and Annulment. (a) If an Event of Default (other than those specified in Sections Section 12.01(h) and 12.01(i)) occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities may declare the principal amount plus accrued and unpaid Interest on all the Outstanding Securities to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount plus accrued and unpaid Interest shall become immediately due and payable.

Notwithstanding the foregoing, in the case of an Event of Default specified in Section 12.01(h) or Section 12.01(i) (in each case, with respect to the Company), the 100% of the principal amount plus accrued and unpaid Interest on all Outstanding Securities will ipso facto become due and payable without any declaration or other act on the part of the Trustee or any Holder.

(b) At any time after such a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article 12 provided, the Holders of a majority in aggregate principal amount of the Outstanding Securities, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if:

(i) such rescission and annulment will not conflict with any judgment or decree of a court of competent jurisdiction; and

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(ii) all Events of Default, other than the non-payment of the principal amount plus accrued and unpaid Interest on Securities that have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 12.13.

No such rescission shall affect any subsequent default or impair any right consequent thereon.

Section 12.03. Additional Interest. Notwithstanding Section 12.02, if so elected by the Company, the sole remedy for any Event of Default relating Company’s failure to comply with Section 7.09 hereof, will for the first 180 days after the occurrence of such an Event of Default consist exclusively of the right to receive Additional Interest on the Securities at an annual rate equal to 0.25% of the principal amount of Outstanding Securities during the first 90 days after the occurrence of such an Event of Default and 0.50% of the principal amount of Outstanding Securities from the 91^st day until the 180^th day following the occurrence of such an Event of Default. If the Company so elects, the Additional Interest payable under this Section 12.03 will be payable on all Outstanding Securities from and including the date on which such Event of Default first occurs, but not including the, the 180^th day thereafter, or such earlier date on which such Event of Default has been cured or waived. On the 180^th day after such Event of Default (or earlier, if the Event of Default is cured or waived prior to such 180^th day), Additional Interest payable pursuant to this Section 12.03 will cease to accrue and, to the extent the Event of Default is continuing after such 180^th day, the Securities will be subject to acceleration as provided in Section 12.02. In the event the Company does not elect to pay the Additional Interest payable pursuant to this Section 12.03 upon an Event of Default in accordance with this paragraph, the Securities will be subject to acceleration as provided in Section 12.02.

In order to elect to pay the Additional Interest payable pursuant to this Section 12.03 as the sole remedy during the first 180 days after the occurrence of an Event of Default relating to the failure to comply with Section 7.09 in accordance with the immediately preceding paragraph, the Company must notify all Holders, the Trustee and Paying Agent of such election prior to the close of business on the first Business Day after the occurrence of such Event of Default. Upon the failure to timely give all Holders, the Trustee and Paying Agent such notice, the Securities will be subject to acceleration as provided in Section 12.02.

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Section 12.04. Collection of Indebtedness and Suits for Enforcement by Trustee. If an Event of Default occurs and is continuing, the Trustee may, but shall not be obligated to, pursue any available remedy to collect the payment of the principal amount plus accrued but unpaid Interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture. The Trustee may maintain a proceeding even if the Trustee does not possess any of the Securities or does not produce any of the Securities in the proceeding.

Section 12.05. Trustee may File Proofs of Claim. In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities, including the Subsidiary Guarantors), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due the Trustee under Section 14.07.

No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 12.06. Application of Money Collected. Any money collected by the Trustee pursuant to this Article 12 shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money to Holders, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee under Section 14.07;

SECOND: To the Holders of Senior Debt to the extent required by Article 5;

THIRD: To the payment of the amounts then due and unpaid on the Securities for the principal amount, Redemption Price, Fundamental Change Repurchase Price, Repurchase Price or Interest, as the case may be, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities;

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FOURTH: To such other Person or Persons, if any, to the extent entitled thereto; and

FIFTH: The balance, if any, to the Company and the Subsidiary Guarantors.

Section 12.07. Limitation on Suits. No Holder of any Security shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder (other than in the case of an Event of Default specified in Section 12.01(a), 12.01(b) or 12.01(c)), unless:

(i) such Holder has previously given written notice to the Trustee of a continuing Event of Default;

(ii) the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

(iii) such Holder or Holders have offered to the Trustee indemnity reasonably satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;

(iv) the Trustee for 60 days after its receipt of such notice, request and offer of security or indemnity satisfactory to it has failed to institute any such proceeding; and

(v) no direction, in the opinion of the Trustee, inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in aggregate principal amount of the Outstanding Securities;

it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing itself of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders).

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Section 12.08. Unconditional Right of Holders to Receive Payment. Notwithstanding any other provision of this Indenture but subject to the provisions of Article 5 thereof, the right of any Holder to receive payment of the principal amount, Redemption Price, Fundamental Change Repurchase Price, Repurchase Price or Interest in respect of the Securities held by such Holder, on or after the respective due dates expressed in the Securities or any Redemption Date, Fundamental Change Purchase Date or Repurchase Date, as applicable, and to convert the Securities in accordance with Article 11, or to bring suit for the enforcement of any such payment on or after such respective dates or the right to convert, shall not be impaired or affected adversely without the consent of such Holder.

Section 12.09. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

Section 12.10. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 3.06, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 12.11. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 12 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

Section 12.12. Control by Holders. The Holders of a majority in principal amount of the Outstanding Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee, provided that:

(i) such direction shall not be in conflict with any rule of law or with this Indenture; and

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(ii) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

Section 12.13. Waiver of Past Defaults. The Holders of not less than a majority in principal amount of the Outstanding Securities may on behalf of the Holders of all the Securities waive any past Default hereunder and its consequences, except a Default:

(i) Described in Section 12.01(a), 12.01(b) or Section 12.01(c); or

(ii) in respect of a covenant or provision hereof which under Article 17 cannot be modified or amended without the consent of the Holder of each Outstanding Security affected.

Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

Section 12.14. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, in either case in respect of the Securities, a court may require any party litigant in such suit to file an undertaking to pay the costs of the suit, and the court may assess reasonable costs, including reasonable attorney’s fees and expenses, against any party litigant in the suit having due regard to the merits and good faith of the claims or defenses made by the party litigant; but the provisions of this Section 12.14 shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities, or to any suit instituted by any Holder for the enforcement of the payment of the principal amount on any Security on or after Maturity of such Security, the Redemption Price, the Fundamental Change Repurchase Price, the Repurchase Price or the Settlement Amount.

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ARTICLE 13

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 13.01. Company may Consolidate, etc., Only on Certain Terms. The Company shall not consolidate with or merge into any other Person or sell, convey, transfer or lease all or substantially all of its properties and assets to any Person, unless:

(a) either (i) the Company is the resulting, surviving or transferee Person or (ii) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, all or substantially all of the properties and assets of the Company (the “Surviving Entity”), (1) is a Corporation organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia, (2) the Surviving Entity (if other than the Company) expressly assumes, by an indenture supplemental hereto, executed and delivered to the Trustee, all of the obligations of the Company under the Securities and this Indenture;

(b) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and

(c) if a supplemental indenture is required in connection with such transaction, the Company or the Surviving Entity has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or sale, conveyance, transfer or lease and such supplemental indenture comply with this Article 13 and Article 17, respectively.

Section 13.02. Successor Substituted. Upon any consolidation of the Company with, or merger or sale of the Company into, any other Person or any conveyance, transfer or lease of all or substantially all of the properties and assets of the Company in accordance with Section 13.01, the successor Person formed by such consolidation or into which the Company is merged or sold or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease of all or substantially all of the Company’s properties and assets, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

ARTICLE 14

THE TRUSTEE

Section 14.01. Certain Duties and Responsibilities. The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Except during the continuance of an Event of Default of which a Responsible Officer of the Trustee has actual knowledge, the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee.

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In case an Event of Default of which a Responsible Officer of the Trustee has actual knowledge with respect to the Securities has occurred (which has not been cured or waived), the Trustee shall exercise the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 14.01.

Section 14.02. Notice of Defaults. The Trustee shall give the Holders notice of any Default hereunder within 90 days after the occurrence thereof; provided, that (except in the case of any Default in the payment or delivery, as the case may be, of principal amount or Interest on any of the Securities, Redemption Price, Fundamental Change Repurchase Price, Repurchase Price or the Settlement Amount), the Trustee shall be protected in withholding such notice if and so long as a Responsible Officer of the Trustee in good faith determines that the withholding of such notice is in the interest of the Holders of Securities.

Section 14.03. Certain Rights of Trustee. Subject to the provisions of Section 14.01:

(a) the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors of the Company may be sufficiently evidenced by a Board Resolution;

(c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, request and conclusively rely upon an Officers’ Certificate;

(d) the Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

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(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture or to institute, conduct or defend any litigation hereunder or in relation hereto at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

(f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit; and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation;

(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys or custodians and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent, attorney or custodian appointed with due care by it hereunder;

(h) the Trustee shall not be charged with knowledge or required to take notice of any Default or Event of Default with respect to the Securities unless either (i) a Responsible Officer shall have actual knowledge of such Default or Event of Default or (ii) written notice of such Default or Event of Default shall have been given to a Responsible Officer of the Trustee by the Company or any other obligor on such Securities, including the Subsidiary Guarantors, or by any Holder of such Securities;

(i) the Trustee shall not be liable in its individual capacity for any action taken, suffered or omitted by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;

(j) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian, director, officer, employee and other Person employed to act hereunder;

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(k) the Trustee may request that the Company deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by any person authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded;

(l) the permissive rights of the Trustee to take certain actions under or perform any discretionary act enumerated in this Indenture shall not be construed as a duty unless so specified herein, and the Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of such action or act;

(m) the Trustee shall not be liable in its individual capacity with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with this Indenture or at the direction of the Holders of a majority in aggregate principal amount of the Outstanding Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising or omitting to exercise any trust or power conferred upon the Trustee, under this Indenture;

(n) in no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action; and

(o) the Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.

Section 14.04. Not Responsible for Recitals. The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company or the Subsidiary Guarantors, as applicable, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity, sufficiency or priority of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof. Except with respect to the authentication of Securities pursuant to Section 3.03, the Trustee shall not be responsible for the legality or the validity of this Indenture or the Securities issued or intended to be issued hereunder.

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Section 14.05. May Hold Securities. The Trustee, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Section 14.08 and 14.13, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Paying Agent, Security Registrar or such other agent.

Section 14.06. Money Held in Trust. Subject to the provisions of Section 16.02, all monies and properties received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company.

Section 14.07. Compensation, Reimbursement; Indemnification. The Company agrees:

(i) to pay to the Trustee from time to time such compensation for all services rendered by it hereunder as the Company and the Trustee shall from time to time agree in writing (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

(ii) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or willful misconduct; and

(iii) to indemnify the Trustee and any predecessor Trustee for, and to hold it harmless against, any and all loss, liability, damage, claim or expense including taxes (other than taxes based upon, measured by or determined by the income of the Trustee) incurred without negligence or willful misconduct on its part, arising out of or in connection with the acceptance or administration of this trust, including the reasonable costs and expenses of defending itself against any claim (whether assessed by the Company, by any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder.

Notwithstanding any other provision of this Indenture to the contrary, in no event shall the Trustee be liable for special, indirect or consequential loss or damage of any kind whatsoever (including, but not limited to, lost profits) even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

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The obligations of the Company under this Section 14.07 shall survive the resignation or removal of the Trustee and the satisfaction and discharge of this Indenture. To secure the Company’s payment obligations in this Section 14.07, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal on the Securities. Such lien shall survive the resignation or removal of the Trustee and the satisfaction and discharge of this Indenture. When the Trustee incurs expenses or renders services after a Default or an Event of Default specified in Section 12.01(g) or 12.01(i) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under U.S. Code, Title 11 or any other similar foreign, federal or state law for the relief of debtors.

Section 14.08. Disqualification; Conflicting Interests. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.

Section 14.09. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has, or whose parent banking company has, a combined capital and surplus of at least $50,000,000. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section 14.09, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 14.09, it shall resign immediately in the manner and with the effect hereinafter specified in this Article 14.

Section 14.10. Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article 14 shall become effective until the acceptance of appointment by the successor Trustee under Section 14.11.

(b) The Trustee may resign at any time by giving written notice thereof to the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction at the expense of the Company for the appointment of a successor Trustee.

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(c) The Trustee may be removed at any time by Act of the Holders of majority in principal amount of the Outstanding Securities, delivered to the Trustee and to the Company. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the notice of removal, the Trustee being removed may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities.

(d) If at any time:

(i) the Trustee shall fail to comply with Section 14.08 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or

(ii) the Trustee shall cease to be eligible under Section 14.09 and shall fail to resign after written request therefor by the Company or by any such Holder, or

(iii) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent, or

(iv) a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

then, in any such case, (A) the Company by a Company Order may remove the Trustee, or (B) subject to Section 12.14, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of such Holder and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Company, by a Company Order, shall promptly appoint a successor Trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the successor Trustee appointed by the Company. If no successor Trustee shall have been so appointed by the Company or the Holders and accepted appointment in the manner hereinafter provided, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee.

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(f) The Company shall give written notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to all Holders in the manner provided in Section 1.06. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office.

Section 14.11. Acceptance of Appointment by Successor. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts.

No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article 14.

Section 14.12. Merger, Conversion, Consolidation or Succession to Business. Any Person into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee by sale or otherwise, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article 14, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

Section 14.13. Preferential Collection of Claims against the Company. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).

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ARTICLE 15

HOLDERS’ LISTS AND REPORTS BY TRUSTEE

Section 15.01. Company to Furnish Trustee Names and Addresses of Holders. The Company will furnish or cause to be furnished to the Trustee:

(i) semiannually, not more than 15 days after each Record Date, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of such Record Date; and

(ii) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;

excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar; provided, however, that no such list need be furnished so long as the Trustee is acting as Security Registrar.

Section 15.02. Preservation of Information; Communications to Holders. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 15.01 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 15.01 upon receipt of a new list so furnished.

(b) The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and duties of the Trustee, shall be as provided by the Trust Indenture Act.

(c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.

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Section 15.03. Reports By Trustee. (a) The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. Reports so required to be transmitted at stated intervals of not more than 12 months shall be transmitted no later than July 15 in each calendar year, commencing in July 15, 2010. Each such report shall be dated as of a date not more than 60 days prior to the date of transmission.

(b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange, if any, upon which the Securities are listed, with the Commission and with the Company. The Company will promptly notify the Trustee in writing when the Securities are listed on any stock exchange or of any delisting thereof.

ARTICLE 16

SATISFACTION AND DISCHARGE

Section 16.01. Satisfaction and Discharge of Indenture. This Indenture shall cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when

(a) either

(i) all Securities theretofore authenticated and delivered (other than (A) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.06 and (B) Securities for whose payment money has theretofore been deposited with the Trustee in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust as provided in Section 7.04) have been delivered to the Trustee for cancellation; or

(ii) all such Securities not theretofore delivered to the Trustee for cancellation have become due and payable, whether at the Stated Maturity or with respect to any Redemption Date, Fundamental Change Repurchase Date or Repurchase Date or by delivery of a notice of conversion or otherwise and the Company has deposited or caused to be deposited with the Trustee cash or a combination of cash and Common Stock, as applicable, as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness evidenced by such Securities not theretofore delivered to the Trustee for cancellation;

(b) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and

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(c) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 14.07 and, if money shall have been deposited with the Trustee pursuant to Section 16.01(a)(ii), the obligations of the Trustee under Section 16.02 and the last paragraph of Section 7.04 shall survive.

Section 16.02. Application of Trust Money. Subject to the provisions of the last paragraph of Section 7.04, all money deposited with the Trustee pursuant to Section 16.01 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and Interest for whose payment such money has been deposited with the Trustee.

Section 16.03. Release of Subsidiary Guarantors. If the Company discharges its obligations under the Indenture pursuant to Section 16.01, the Subsidiary Guarantors will be released from their obligations under the Subsidiary Guarantees.

ARTICLE 17

SUPPLEMENTAL INDENTURES

Section 17.01. Supplemental Indentures without Consent of Holders. Without the consent of any Holders, the Company and the any Subsidiary Guarantor, if applicable, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

(i) to cure any ambiguity, omission, defect or inconsistency that does not adversely affect to a material extent the interests of the Holders; provided that any such action made solely to conform the provisions of this Indenture to the description thereof contained in the Final Prospectus shall be deemed not to adversely affect the interests of the Holders;

(ii) to evidence the succession of another Person to the Company or a Subsidiary Guarantor and the assumption by any such successor of the covenants of the Company’s obligations under the Indenture and the Securities or the Subsidiary Guarantees, as applicable;

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(iii) add Guarantees with respect to the Securities;

(iv) secure the Securities or a Subsidiary Guarantor’s obligations in respect of the Securities or a Subsidiary Guarantee;

(v) to add to the covenants of the Company for the benefit of the Holders, or to surrender any right or power herein conferred upon the Company;

(vi) make any change that does not adversely affect the rights of any Holder in any material respect;

(vii) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualifications of this Indenture under the Trust Indenture Act, or under any similar federal statute hereafter enacted; or

(viii) to conform the provisions of this Indenture to the “Description of Notes” section contained in the Final Prospectus; or

(ix) to evidence and provide for the acceptance of the appointment of a successor Person to the Trustee and the assumption by any such successor Person of the obligations of the Trustee hereunder.

Section 17.02. Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities, by Act of said Holders delivered to the Company and the Trustee, the Company and the any Subsidiary Guarantor, if applicable, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby,

(i) reduce the percentage in principal amount of the Outstanding Securities, the consent of whose Holders is required for any supplemental indenture, or the consent of whose Holders is required for any waiver under this Indenture (including any waiver of past defaults pursuant to Section 12.13);

(ii) reduce the rate or extend the time of payment of any Interest on any Security;

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(iii) reduce the principal amount of, or extend the Stated Maturity of, any Security;

(iv) make any change that impairs or adversely affects the conversion rights or Conversion Rate of any Securities;

(v) reduce the Redemption Price, Fundamental Change Repurchase Price or Repurchase Price of any Security or amend or modify in any manner adverse to the Holders of the Securities, the Company’s obligation to make such payments, whether through an amendment or waiver of provisions in the covenants, definitions or otherwise;

(vi) make any Security payable in money other than that stated in the Security or other than in accordance with the provisions of this Indenture;

(vii) other than in accordance with the provisions of this Indenture, eliminate any existing Subsidiary Guarantee;

(viii) change the ranking of the Securities;

(ix) impair the right of any Holder to receive payment of the principal amount of, or Interest on, a Holder’s Securities on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Securities;

(x) modify the provisions of Article 5 relating to the subordination of the Securities in a manner adverse to the Holders of Securities; or

(xi) modify any of the provisions of this Section 17.02 or Section 12.13, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby.

It shall not be necessary for any Act of Holders under this Section 17.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

Section 17.03. Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article 17 or the modifications thereby of the trusts created by this Indenture, the Trustee shall receive, and (subject to Section 14.01) shall be fully protected in conclusively relying upon, in addition to the documents required by Section 1.02, an Opinion of Counsel stating that the execution of such supplemental indenture is

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authorized or permitted by this Indenture. Subject to the preceding sentence, the Trustee shall sign such supplemental indenture if the same does not adversely affect the Trustee’s own rights, duties or immunities under this Indenture or otherwise. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture that adversely affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

Section 17.04. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article 17, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

Section 17.05. Notice of Supplemental Indenture. After a Supplemental Indenture becomes effective, the Company shall mail to the Holders a notice briefly describing such Supplemental Indenture; provided, however, that the failure to give such notice to all Holders, or any defect in such notice will not impair or affect the validity of the Supplemental Indenture.

Section 17.06. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article 17 shall conform to the requirements of the Trust Indenture Act.

Section 17.07. Reference in Securities to Supplemental Indentures. Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article 17 shall bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities.

119

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

By: 

[Trustee Signature Follows]

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

By: 

EXHIBIT A

FORM OF GUARANTEE

THE OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN INDENTURE DATED AS OF EVEN DATE HEREWITH, BY AND AMONG AMERICAN MEDICAL SYSTEMS HOLDINGS, INC., AS ISSUER, THE SUBSIDIARY GUARANTORS PARTY THERETO, AS GUARANTORS, AND U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, AND EACH HOLDER OF THIS GUARANTEE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE INDENTURE, INCLUDING WITHOUT LIMITATION, THE SUBORDINATION TERMS THEREIN.

For good and valuable consideration received from the Company by the undersigned (hereinafter referred to as the “Subsidiary Guarantors,” which term includes any successor or additional Subsidiary Guarantors), the receipt and sufficiency of which is hereby acknowledged, subject to Sections 5.15 and 6.03 of the Indenture, each Subsidiary Guarantor, jointly and severally, hereby unconditionally guarantees, irrespective of the validity or enforceability of the Indenture, the Securities, or the obligations of any party under the Indenture of the Securities, (a) the due and punctual payment of the principal of and Interest on the Securities, whether at the Stated Maturity or on an Interest Payment Date, by acceleration, call for redemption, repurchase, or otherwise (subject to any applicable grace period), (b) the due and punctual payment of Interest on the overdue principal and Interest on the Securities, if lawful, (c) the due and punctual payment and performance (subject to any applicable grace period) of all other obligations of the Company under this Security and the Indenture, all in accordance with the terms set forth therein and (d) in case of any extension of time of payment or renewal of any Securities or any of such other obligations under the Securities or the Indenture, the due and punctual payment or performance thereof (subject to any applicable grace period) in accordance with the terms of the extension or renewal, whether at the Stated Maturity, by acceleration or otherwise. To the extent provided in the Indenture, the Subsidiary Guarantees are subordinated to Senior Debt, as defined in the Indenture.

No past, present or future director, officer, employee, incorporator, stockholder, members or controlling person of the Subsidiary Guarantor (or any successor entity), as such, shall have any liability under this Subsidiary Guarantee for any obligations of the Subsidiary Guarantor under this Security or the Indenture, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting this Security waives and releases all such liability.

Terms used in this Subsidiary Guarantee and defined in the Indenture are used herein as therein defined. [SIGNATURE PAGE FOLLOWS]

A-1

IN WITNESS WHEREOF, each of the Subsidiary Guarantors has caused this Subsidiary Guarantee to be signed by a duly authorized officer.

Dated:                     , 2009

By:
	Name:
	Title:
By:
	Name:
	Title:
By:
	Name:
	Title:
By:
	Name:
	Title:

A-2

EXHIBIT B

Additional Shares to Be Delivered in Connection with Conversion

Upon a Make-Whole Fundamental Change

	Stock Price
Effective Date	$14.83	$16.00	$17.00	$18.00	$19.00	$20.00	$25.00	$25.23	$30.00	$40.00	$50.00	$75.00	$100.00
9/15/2009	15.8991	14.9001	13.5461	12.3761	11.3576	10.4650	7.2957	7.2092	5.3964	3.2952	2.1947	0.9443	0.4392
9/15/2010	15.8991	15.1278	13.6807	12.4362	11.3579	10.4175	7.1198	7.0318	5.1884	3.1051	2.0432	0.8654	0.3974
9/15/2011	15.8991	15.1793	13.6364	12.3169	11.1799	10.1939	6.7900	6.7017	4.8509	2.8280	1.8333	0.7631	0.3453
9/15/2012	15.8991	15.0936	13.4396	12.0342	10.8316	9.7958	6.2920	6.2043	4.3690	2.4534	1.5604	0.6382	0.2849
9/15/2013	15.8991	15.2047	13.3673	11.8180	10.5032	9.3809	5.6846	5.5969	3.7601	1.9789	1.2182	0.4865	0.2135
9/15/2014	15.8991	14.7852	12.7501	11.0519	9.6276	8.4269	4.6284	4.5455	2.8095	1.3187	0.7744	0.3084	0.1356
9/15/2015	15.8991	13.8746	11.5673	9.6730	8.1143	6.8282	3.0271	2.9562	1.4701	0.4861	0.2523	0.1047	0.0456
9/15/2016	15.8991	10.9691	7.2925	5.5387	4.6487	3.8396	0.9146	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000

C-1

EX-5.1

Exhibit 5.1

August 14, 2009

American Medical Systems Holdings, Inc.

10700 Bren Road West

Minnesota, Minnesota 55343

Re: American Medical Systems Holdings, Inc. Offer to Exchange Up To $250,000,000 Aggregate Principal Amount of 3.75% Convertible Senior Subordinated Notes Due 2041 For An Equal Amount of Outstanding 3.25% Convertible Senior Subordinated Notes due 2036

Ladies and Gentlemen:

We have acted as special counsel to American Medical Systems Holdings, Inc., a Delaware corporation (the “Company”), in connection with the proposed issuance of (i) up to $250,000,000 aggregate principal amount of 3.75% Convertible Senior Subordinated Notes due 2041 (the “Notes”) and the guarantees of the Notes (the “Guarantees”) by American Medical Systems, Inc., AMS Sales Corporation, AMS Research Corporation and Laserscope (the “Guarantors”), convertible into common stock, $0.01 par value, of the Company (the “Common Stock”), under an Indenture, including the Guarantees, in the form filed as an exhibit to the Registration Statement (as herein defined) (collectively, the “Indenture”) among the Company, the Guarantors, and U.S. Bank National Association, as trustee (the “Trustee”), which Notes are to be offered in exchange for up to an equal amount of the Company’s outstanding 3.25% Convertible Senior Subordinated Notes due 2036 and (ii) up to 12,882,950 shares of Common Stock issuable upon conversion of the Notes based on an initial conversion rate of 51.5318 shares per $1,000 principal amount of the Notes (which represents a maximum amount of shares issuable per $1000 principal amount of the Notes absent any adjustment to the conversion rate pursuant to the terms of the Notes), each pursuant to a registration statement on Form S-4 under the Securities Act of 1933, as amended (the “Act”), filed with the Securities and Exchange Commission (the “Commission”) on Form S-4 on the date hereof (the “Registration Statement”). This opinion is being furnished in connection with the requirements of Item 601(b)(5) of Regulation S-K under the Act, and no opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement or related prospectus, other than as expressly stated herein with respect to the issue of the Notes, the Guarantees and the Common Stock.

As such counsel, we have examined such matters of fact and questions of law as we have considered appropriate for purposes of this letter. With your consent, we have relied upon certificates and other assurances of officers of the Company, the Guarantors, and others as to factual matters without having independently verified such factual matters.

American Medical Systems Holdings, Inc.

August 14, 2009

Page 2

We are opining herein as to the internal laws of the State of New York, and, the general corporation law of the state of Delaware, and we express no opinion with respect to the applicability thereto, or the effect thereon, of the laws of any other jurisdiction or, in the case of Delaware, any other laws, or as to any matters of municipal law or the laws of any local agencies within any state.

Subject to the foregoing and the other matters set forth herein, it is our opinion that, as of the date hereof:

(1) When (i) the Indenture has been duly exercised and delivered by the Company and the Trustee and (ii) the Notes have been duly executed, issued, and authenticated in accordance with the terms of the Indenture and delivered by and on behalf of the Company in accordance with the Indenture and in exchange for the 2036 Notes as contemplated in the Registration Statement, the Notes and the Guarantees will have been duly authorized by all necessary corporate action of the Company and the Guarantors, respectively, and will be legally valid and binding obligations of the Company and the Guarantors, respectively, enforceable against the Company and the Guarantors in accordance with their respective terms.

(2) When certificates (in the form of the specimen certificate most recently filed as an exhibit to the Registration Statement) representing the Common Stock initially reserved for issuance upon conversion of the Notes have been manually signed by an authorized officer of the transfer agent and registrar therefor, and have been delivered in accordance with the terms of the authorization thereof and the Indenture upon conversion of Notes in a principal amount not less than the par value of the Common Stock to be issued, such Common Stock will have been duly authorized by all necessary corporate action of the Company, and will be validly issued, fully paid, and nonassessable.

Our opinions are subject to: (i) the effect of bankruptcy, insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar laws relating to or affecting the rights and remedies of creditors; (ii) the effect of general principles of equity, whether considered in a proceeding in equity or at law (including the possible unavailability of specific performance or injunctive relief), concepts of materiality, reasonableness, good faith and fair dealing, and the discretion of the court before which a proceeding is brought; (iii) the invalidity under certain circumstances under law or court decisions of provisions providing for the indemnification of or contribution to a party with respect to a liability where such indemnification or contribution is contrary to public policy; and (iv) we express no opinion as to (a) any provision for liquidated damages, default interest, late charges, monetary penalties, make-whole premiums or other economic remedies to the extent such provisions are deemed to constitute a penalty, (b) consents to, or restrictions upon, governing law, jurisdiction, venue, arbitration, remedies, or judicial relief, (c) the waiver of rights or defenses contained in the Indenture; (d) any provision requiring the payment of attorneys’ fees, where such payment is contrary to law or public policy; (e) any provision permitting, upon acceleration of the Notes, collection of that portion of the stated principal amount thereof which might be determined to constitute unearned interest thereon; (f) any provision to the extent it requires that a claim with respect to the Notes (or a judgment in respect of such a claim) be converted into U.S. dollars at a rate of exchange at a particular date, to the extent applicable law otherwise provides; (g) provisions purporting to make a guarantor primarily liable rather than as a surety provisions purporting to waive modifications of any guaranteed obligation to the extent such

American Medical Systems Holdings, Inc.

August 14, 2009

Page 3

modification constitutes a novation; (h) other applicable exceptions; and (i) the severability, if invalid, of provisions to the foregoing effect.

With your consent, we have assumed (a) that the Indenture, the Guarantees, and the Notes (collectively, the “Documents”) have been duly authorized, executed and delivered by the parties thereto other than the Company and each of the Guarantors, (b) that the Documents constitute legally valid and binding obligations of the parties thereto other than the Company and each of the Guarantors, enforceable against each of them in accordance with their respective terms, and (c) that the status of the Documents as legally valid and binding obligations of the parties is not affected by any (i) breaches of, or defaults under, agreements or instruments, (ii) violations of statutes, rules, regulations or court or governmental orders, or (iii) failures to obtain required consents, approvals or authorizations from, or make required registrations, declarations or filings with, governmental authorities.

This opinion is for your benefit in connection with the Registration Statement and may be relied upon by you and by persons entitled to rely upon it pursuant to the applicable provisions of the Act. We consent to your filing this opinion as an exhibit to the Registration Statement and to the reference to our firm contained in the Prospectus under the heading “Legal Matters.” In giving such consent, we do not thereby admit that we are in a category of person whose consent is required under Section 7 of the Act and the rules and regulations of the Commission thereunder.

Very truly yours,

/S/ LATHAM & WATKINS LLP

EX-8.1

Exhibit 8.1

August 14, 2009

American Medical Systems Holdings, Inc.

10700 Bren Road West

Minnesota, Minnesota 55343

Re: American Medical Systems Holdings, Inc. Offer to Exchange Up To $250,000,000 Aggregate Principal Amount of 3.75% Convertible Senior Subordinated Notes Due 2041 For An Equal Amount of Outstanding 3.25% Convertible Senior Subordinated Notes due 2036

Ladies and Gentlemen:

We have acted as special tax counsel to American Medical Systems Holdings, Inc., a Delaware corporation (the “Company”), in connection with the proposed issuance of (i) up to $250,000,000 aggregate principal amount of 3.75% Convertible Senior Subordinated Notes due 2041 (the “Notes”) and the guarantees of the Notes (the “Guarantees”) by American Medical Systems, Inc., AMS Sales Corporation, AMS Research Corporation and Laserscope (the “Guarantors”), convertible into common stock, $0.01 par value, of the Company (the “Common Stock”), under an Indenture, including the Guarantees, in the form filed as an exhibit to the Registration Statement (as herein defined) (collectively, the “Indenture”) among the Company, the Guarantors, and U.S. Bank National Association, as trustee, which Notes are to be offered in exchange for the Company’s outstanding 3.25% Convertible Senior Subordinated Notes due 2036 and (ii) up to 12,882,946 shares of Common Stock issuable upon conversion of the Notes based on an initial conversion rate of 19.4055 shares per $1,000 principal amount of the Notes (which represents a maximum amount of shares issuable per $1000 principal amount of the Notes absent any adjustment to the conversion rate pursuant to the terms of the Notes), each pursuant to a registration statement on Form S-4 under the Securities Act of 1933, as amended (the “Act”), filed with the Securities and Exchange Commission (the “Commission”) on Form S-4 on the date hereof (the “Registration Statement”).

In rendering our opinion, we have examined and are familiar with originals or copies, certified or otherwise identified to our satisfaction, of the Registration Statement and related prospectus (the “Prospectus”), the Indenture and such other agreements and documents as we have deemed necessary or appropriate as a basis for the opinion set forth below. For purposes of our opinion, we have assumed timely compliance by the parties to the agreements we have reviewed in connection with the transaction covered hereby, and the accuracy of the representations with respect to factual matters provided or to be provided by such parties pursuant to such agreements.

American Medical Systems Holdings, Inc.

August 14, 2009

Page 2

In rendering our opinion, we have examined the Internal Revenue Code of 1986, as amended, the Treasury Regulations promulgated thereunder, judicial decisions, legislative history and such other authorities as we have deemed appropriate, all as of the date hereof. The statutory provisions, regulations, interpretations, and other authorities on which our opinion is based are subject to change, and such changes could apply retroactively. We express no opinion as to any laws other than the federal income tax laws of the United States of America as of the date hereof.

Based on such facts and subject to the qualifications, assumptions and limitations set forth herein and in the Prospectus, we hereby confirm that the statements in the Prospectus under the heading “United States Federal Income Tax Consequences,” insofar as such statements purport to constitute summaries of United States federal income tax law and regulations or legal conclusions thereto, constitute accurate summaries of the matters described therein in all material respects.

The foregoing opinion and the discussion contained in the Prospectus under the heading “United States Federal Income Tax Consequences” represent our conclusions as to the application of existing law as of the date hereof. Our opinion is not binding on the Internal Revenue Service or the courts and the Internal Revenue Service may assert contrary positions or the law (including the interpretation thereof) may change, possibly retroactively. Accordingly, our opinion is not a guarantee that our conclusions will be upheld if challenged. We express no opinion either as to any matter not specifically covered by the foregoing opinion or as to the effect on the matters covered by this opinion of the laws of any other jurisdiction.

Any change in applicable law, which may change at any time, or a change in the facts, documents or agreements upon which our opinion is based and upon which we have relied, may affect the validity of the foregoing opinion. This firm undertakes no obligation to update this opinion in the event that there is a change in the legal authorities, facts, documents or agreements upon which this opinion is based.

This opinion is for your benefit in connection with the Registration Statement and is furnished to you upon the understanding that we are not hereby assuming professional responsibility to any other person whatsoever. This opinion may not be relied upon by you for any other purpose or relied upon by any other person, firm or corporation, for any purpose, without our prior written consent in each instance, except that this opinion may be relied upon by persons entitled to rely upon it pursuant to the applicable provisions of federal securities laws. We consent to your filing this opinion as an exhibit to the Registration Statement and to the reference to our firm contained in the Prospectus under the heading “Legal Matters.” In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.

Very truly yours,

/S/ LATHAM & WATKINS LLP

EX-12.1

Exhibit 12.1

American Medical Systems Holdings, Inc.

Computation of Ratio of Earnings to Fixed Charges

for the Quarters Ended July 4, 2009 and April 4, 2009 and for the Fiscal Years 2008, 2007, 2006, 2005 and 2004

(Unaudited) (amounts in thousands)

	Quarter Ended								Year Ended
	7/4/2009		4/4/2009		1/3/2009		12/29/2007		12/30/2006			12/31/2005		1/1/2005
Income before income taxes	$	26,401	$	26,852	$	50,158	$	16,633	$	(38,282	)	$	66,225	$	16,903
Fixed charges:
Interest expense		4,966		5,410		27,398		37,760		18,395			217		783
Imputed interest on leases		123		123		490		403		298			259		240
Amortization of financing costs (a)		3,974		3,981		18,482		16,145		14,434			—		—
Total fixed charges		9,063		9,514		46,370		54,308		33,127			476		1,023
Income before income taxes and fixed charges		35,464		36,366		96,528		70,941		(5,155	)		66,701		17,926
Ratio of earnings to fixed charges		3.9		3.8		2.1		1.3		(b	)		140.1		17.5

(a) Represents amortization of debt issuance costs incurred in connection with the Company’s registered debt securities. Please see our Form 8-K dated August 4, 2009 for more information on the adoption of FSP APB 14-1 and further information regarding the debt securities.

(b) Due to the registrant’s loss in 2006, the ratio coverage was less than 1:1. The registrant would have needed to generate additional earnings of $38.3 million to achieve a coverage of 1:1 in 2006.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the reference to our firm under the caption “Experts” in this Registration Statement (Form S-4) and related Prospectus of American Medical Systems Holdings, Inc. for the exchange of 3.25% convertible senior subordinated notes due 2036 and to the incorporation by reference herein of our report dated February 26, 2009 except for Note 1, as to which the date is August 4, 2009, with respect to the consolidated financial statements and schedule listed in Item 15 of American Medical Systems Holdings, Inc., included in the Current Report on Form 8-K dated August 4, 2009 and our report dated February 26, 2009 with respect to the effectiveness of internal control of American Medical Systems Holdings, Inc., included in its Annual Report (Form 10-K) for the year ended January 3, 2009, filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

Minneapolis, Minnesota

August 12, 2009

EX-25.1

Exhibit 25.1

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY UNDER

THE TRUST INDENTURE ACT OF 1939 OF A

CORPORATION DESIGNATED TO ACT AS TRUSTEE

Check if an Application to Determine Eligibility of

a Trustee Pursuant to Section 305(b)(2)

U.S. BANK NATIONAL ASSOCIATION

(Exact name of Trustee as specified in its charter)

31-0841368

I.R.S. Employer Identification No.

800 Nicollet Mall Minneapolis, Minnesota	55402
(Address of principal executive offices)	(Zip Code)

Raymond S. Haverstock

U.S. Bank National Association

60 Livingston Avenue

St. Paul, MN 55107

(651) 495-3909

(Name, address and telephone number of agent for service)

American Medical Systems Holdings, Inc.

(Issuer with respect to the Securities)

Delaware	41-1978822
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

10700 Bren Road West Minnetonka, Minnesota	55343
(Address of Principal Executive Offices)	(Zip Code)

Convertible Senior Subordinated Notes Due 2041

(Title of the Indenture Securities)

FORM T-1

Item 1. GENERAL INFORMATION. Furnish the following information as to the Trustee.

a) Name and address of each examining or supervising authority to which it is subject.

Comptroller of the Currency

Washington, D.C.

b) Whether it is authorized to exercise corporate trust powers.

Yes

Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation.

None

Items 3-15 Items 3-15 are not applicable because to the best of the Trustee’s knowledge, the obligor is not in default under any Indenture for which the Trustee acts as Trustee.

Item 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this statement of eligibility and qualification.

1. A copy of the Articles of Association of the Trustee.*

2. A copy of the certificate of authority of the Trustee to commence business.*

3. A copy of the certificate of authority of the Trustee to exercise corporate trust powers.*

4. A copy of the existing bylaws of the Trustee.**

5. A copy of each Indenture referred to in Item 4. Not applicable.

6. The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939, attached as Exhibit 6.

7. Report of Condition of the Trustee as of March 31, 2009 published pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7.

* Incorporated by reference to Exhibit 25.1 to Amendment No. 2 to registration statement on S-4, Registration Number 333-128217 filed on November 15, 2005.

** Incorporated by reference to Exhibit 25.1 to registration statement on S-4, Registration Number 333-145601 filed on August 21, 2007.

2

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of St. Paul, State of Minnesota on the 12^th of August, 2009.

By:	/S/ RAYMOND S. HAVERSTOCK
	Raymond S. Haverstock
	Vice President

By:	/S/ JAY PAULSON
	Jay Paulson
	Vice President

3

Exhibit 6

CONSENT

In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, U.S. BANK NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor.

Dated: August 12, 2009

By:	/S/ RAYMOND S. HAVERSTOCK
	Raymond S. Haverstock
	Vice President

By:	/S/ JAY PAULSON
	Jay Paulson
	Vice President

4

Exhibit 7

U.S. Bank National Association

Statement of Financial Condition

As of 3/31/2009

($000’s)

3/31/2009

Assets
Cash and Balances Due From Depository Institutions	$6,290,222
Securities	37,422,789
Federal Funds	3,418,378
Loans & Lease Financing Receivables	180,410,691
Fixed Assets	4,527,063
Intangible Assets	12,182,455
Other Assets	14,275,149
Total Assets	$258,526,747
Liabilities
Deposits	$175,049,211
Fed Funds	10,281,149
Treasury Demand Notes	0
Trading Liabilities	745,122
Other Borrowed Money	34,732,595
Acceptances	0
Subordinated Notes and Debentures	7,779,967
Other Liabilities	6,523,925
Total Liabilities	$235,111,969
Equity
Minority Interest in Subsidiaries	$1,650,987
Common and Preferred Stock	18,200
Surplus	12,642,020
Undivided Profits	9,103,571
Total Equity Capital	$23,414,778
Total Liabilities and Equity Capital	$258,526,747

To the best of the undersigned’s determination, as of the date hereof, the above financial information is true and correct.

U.S. Bank National Association

By:
	Vice President

Date: August 12, 2009

5

EX-99.1

Exhibit 99.1

LETTER OF TRANSMITTAL

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

OFFER TO EXCHANGE

3.75% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2041

FOR UP TO $250,000,000 OF OUR

3.25% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2036

(CUSIP NO. 02744M AA 6)

Pursuant to the Prospectus Dated August 14, 2009

THE EXCHANGE OFFER WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON SEPTEMBER 11, 2009, UNLESS EXTENDED OR EARLIER TERMINATED BY US (SUCH DATE, AS THE SAME MAY BE EXTENDED OR EARLIER TERMINATED, THE “EXPIRATION DATE”). HOLDERS MUST VALIDLY TENDER THEIR 2036 NOTES FOR EXCHANGE IN THE EXCHANGE OFFER ON OR PRIOR TO THE EXPIRATION DATE TO BE ELIGIBLE TO RECEIVE THE APPLICABLE EXCHANGE OFFER CONSIDERATION. THIS LETTER OF TRANSMITTAL NEED NOT BE COMPLETED BY HOLDERS TENDERING 2036 NOTES BY ATOP (AS HEREINAFTER DEFINED). TENDERED 2036 NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO MIDNIGHT, NEW YORK CITY TIME, ON THE EXPIRATION DATE.

The Exchange Agent for the Exchange Offer is:

U.S. Bank National Association

By Overnight Delivery or Mail (Registered or Certified Mail Recommended):	By Facsimile Transmission:
U. S. Bank National Association 60 Livingston Ave. St. Paul, Minnesota 55107 Attention: Specialized Finance	(651) 495-8097 Confirm by Telephone: (800) 934-6802
By Hand: U. S. Bank National Association 60 Livingston Avenue 1st Floor—Bond Drop Window St. Paul, MN 55107

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION VIA FACSIMILE TO A NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

Capitalized terms used but not defined herein shall have the same meanings given them in the Prospectus (as defined below).

THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED AND SIGNED.

QUESTIONS AND REQUESTS FOR ASSISTANCE RELATING TO THE PROCEDURES FOR TENDERING 2036 NOTES AND REQUESTS FOR ADDITIONAL COPIES OF THE PROSPECTUS, THIS LETTER OF TRANSMITTAL, THE FORM OF NOTICE OF GUARANTEED DELIVERY AND/OR THE FORM OF NOTICE OF WITHDRAWAL MAY BE DIRECTED TO THE INFORMATION AGENT AT ITS ADDRESS AND TELEPHONE NUMBERS ON THE BACK COVER OF THIS LETTER OF TRANSMITTAL.

This Letter of Transmittal is to be completed if tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth under “The Exchange Offer—Procedures for tendering 2036 Notes” in the Prospectus and an Agent’s Message (as defined below) is not delivered. Book-entry confirmation of a book-entry transfer of 2036 Notes (as defined herein) into the Exchange Agent’s accounts at The Depository Trust Company (“DTC”), as well as this Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, and any other documents required by this Letter of Transmittal, or an Agent’s Message in lieu thereof, must be received by the Exchange Agent at its address set forth herein on or prior to the expiration of the Exchange Offer, or, in the case of guaranteed delivery, no later than three NASDAQ Global Select Market trading days after the Expiration Date. The term “book-entry confirmation” means a confirmation of a book-entry transfer of 2036 Notes into the Exchange Agent’s account at DTC. The term “Agent’s Message” means a message, transmitted by DTC to and received by the Exchange Agent and forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by the terms of, and to make all of the representations contained in, this Letter of Transmittal and that American Medical Systems Holdings, Inc. may enforce this Letter of Transmittal against such participant.

Holders of 2036 Notes who wish to participate in the Exchange Offer and who cannot complete the procedures for book-entry transfer on a timely basis must tender their 2036 Notes according to the guaranteed delivery procedures set forth in the Prospectus under “The Exchange Offer—Guaranteed delivery procedures.”

If you hold 2036 Notes through a broker dealer, commercial bank, trust company or other nominee, you should contact such nominee promptly and instruct them to tender 2036 Notes on your behalf. You should keep in mind that your intermediary may require you to take action with respect to the Exchange Offer a number of days before the Expiration Date in order for such entity to tender 2036 Notes on your behalf on or prior to the Expiration Date in accordance with the terms of the Exchange Offer.

Holders who wish to tender their 2036 Notes using this Letter of Transmittal must complete the box below entitled “Description of 2036 Notes Tendered” and complete the section below entitled “Method of Delivery” and sign in the appropriate box below.

DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.

ALL TENDERING HOLDERS COMPLETE THIS BOX:

DESCRIPTION OF 2036 NOTES TENDERED

Name(s) and Address(es) of Holder(s) (Please fill in, if Blank)	Principal Amount Represented	Principal Amount Tendered*
	2036 Notes
*  2036 Notes may be tendered in whole or in part in multiples of $1,000. Unless otherwise indicated in the column labeled “Principal Amount Tendered,” a holder will be deemed to have tendered all 2036 Notes represented by the 2036 Notes indicated in the column “Principal Amount Represented.” See Instruction 4.

METHOD OF DELIVERY

¨ CHECK HERE IF TENDERED 2036 NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING:

Name of Tendering Institution:                                                                                                                                

DTC Account Number:                                                                                                                                                

Transaction Code Number                                                                                                                                        

¨ CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED 2036 NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:

Name of Registered Holder(s):                                                                                                                                

Window Ticket Number (if any):                                                                                                                           

Date of Execution of Notice of Guaranteed Delivery:                                                                                       

Name of Institution that Guaranteed Delivery:                                                                                                 

Name of Tendering Institution:                                                                                                                              

DTC Account Number:                                                                                                                                                

Transaction Code Number                                                                                                                                        

NOTE: SIGNATURES MUST BE PROVIDED BELOW

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

The undersigned hereby tenders to American Medical Systems Holdings, Inc., a Delaware corporation (the “Company”), the above described principal amount of the Company’s 3.25% Convertible Senior Subordinated Notes due 2036 (the “2036 Notes”) in exchange for the Exchange Offer consideration set forth in the Prospectus dated August 14, 2009 (as the same may be amended or supplemented from time to time, the “Prospectus”), receipt of which is hereby acknowledged, upon the terms and subject to the conditions set forth in the Prospectus and in this Letter of Transmittal (which, together with the Prospectus, constitute the “Exchange Offer”).

Subject to and effective upon the acceptance for exchange of all or any portion of the 2036 Notes tendered herewith in accordance with the terms and conditions of the Exchange Offer (including, if the Exchange Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, the Company, all right, title and interest in and to such 2036 Notes as are being tendered herewith, waives any and all other rights with respect to the 2036 Notes, and releases and discharges the Company and American Medical Systems Holdings, Inc. from any and all claims such Holder may now have, or may have in the future, arising out of, or related to, the 2036 Notes, including, without limitation, any claims arising from any existing or past defaults, or any claims that such Holder is entitled to receive additional interest with respect to the 2036 Notes (other than any accrued and unpaid interest up to, but excluding, the date of settlement

of the Exchange Offer) or to participate in any redemption or repurchase of the 2036 Notes. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent the true and lawful agent and attorney-in-fact of the undersigned, with full knowledge that the Exchange Agent also acts as the agent of the Company, with respect to such 2036 Notes, with full power of substitution and re-substitution (such power-of-attorney being deemed to be an irrevocable power coupled with an interest) to (1) transfer ownership of such 2036 Notes on the account books maintained by DTC to, or upon the order of, the Company and (2) receive all benefits and otherwise exercise all rights of beneficial ownership of such 2036 Notes, all in accordance with the terms of and conditions to the Exchange Offer as described in the Offer Documents.

The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as its agent and attorney-in-fact (with full knowledge that the Exchange Agent is also acting as agent of the Company in connection with the Exchange Offer) with respect to the tendered 2036 Notes, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) subject only to the right of withdrawal described in the Prospectus, to (i) deliver 2036 Notes to the Company, or transfer ownership of such 2036 Notes on the account books maintained at DTC, together, in either such case, with all accompanying evidences of transfer and authenticity to, or upon the order of, the Company, upon receipt by the Exchange Agent, as the undersigned’s agent, of the Exchange Offer consideration to be paid in exchange for such 2036 Notes, (ii) present such 2036 Notes for transfer, and to transfer the 2036 Notes on the books of trustees for the securities and the Company, and (iii) receive for the account of the Company all benefits and otherwise exercise all rights of beneficial ownership of such 2036 Notes, all in accordance with the terms and conditions of the Exchange Offer.

The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, exchange, sell, assign and transfer the 2036 Notes tendered hereby and that when the same are accepted for exchange, the Company will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances, and that the 2036 Notes tendered hereby are not subject to any adverse claims, rights or proxies. The undersigned also represents and warrants that the undersigned is not the Company’s “affiliate”, as defined below. The undersigned will, upon request, execute and deliver any additional documents deemed by the Company or the Exchange Agent to be necessary or desirable to complete the exchange, assignment and transfer of the 2036 Notes tendered hereby. The undersigned acknowledges receipt of the Prospectus and this Letter of Transmittal and has read and agrees to all of the terms of the Exchange Offer.

As used herein, “affiliate” means a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified.

The name(s) and address(es) of the Holder(s) (as defined in Instruction 2 below) of the 2036 Notes tendered hereby should be printed above, if they are not already set forth above, as they appear on the account books maintained at DTC. The 2036 Notes that the undersigned wishes to tender should be indicated in the appropriate boxes above.

The undersigned understands and acknowledges that each Exchange Offer will expire on midnight, New York City time, on September 11, 2009 (which is the end of the day on September 11, 2009), unless extended or earlier terminated (such date, as the same may be extended with respect to an Exchange Offer, the “Expiration Date”). In addition, the undersigned understands and acknowledges that, in order to receive the 2041 Notes offered in exchange for the 2036 Notes, the undersigned must have validly tendered (and not validly withdrawn) the 2036 Notes on or prior to the Expiration Date.

If any tendered 2036 Notes are not exchanged pursuant to the Exchange Offer for any reason, including as a result of any proration, such 2036 Notes will be credited to an account maintained at DTC, without expense to the tendering Holder, promptly following the expiration or termination of the Exchange Offer.

The undersigned understands that tenders of 2036 Notes pursuant to any one of the procedures described in “The Exchange Offer—Procedures for tendering 2036 Notes” in the Prospectus and in the instructions attached hereto will, upon the Company’s acceptance for exchange of such tendered 2036 Notes, constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer. The Exchange Offer is subject to the conditions set forth in the Prospectus under the caption “The Exchange Offer—Conditions to the Exchange Offer.” The undersigned recognizes that as a result of these conditions (some of which may be waived, in whole or in part, by the Company) as more particularly set forth in the Prospectus, the Company may not be required to accept for exchange any of the outstanding 2036 Notes tendered by this Letter of Transmittal and, in such event, the outstanding 2036 Notes not accepted for exchange will be returned to the undersigned at the address shown below the signature of the undersigned.

The undersigned acknowledges that the maximum aggregate principal amount of 2036 Notes that the Company will accept for tender in the Exchange Offer is $250,000,000. In the event that more than $250,000,000 aggregate principal amount of the 2036 Notes is validly tendered and not validly withdrawn, the portion of the undersigned’s 2036 Notes accepted will be determined on a prorata basis as described the Prospectus under “The Exchange Offer—Maximum exchange amount; proration.” If proration of tendered 2036 Notes is required, the Company will determine the final proration factor promptly after the Expiration Date of the Exchange Offer. The undersigned understands that in the event of proration, the Company will commence exchange of the tendered 2036 Notes promptly after the Expiration Date, but no later than five business days after the Expiration Date. To the extent that any tendered 2036 Notes are not accepted for exchange as a result of the proration, any such 2036 Notes will be returned to the undersigned at the address shown below the signature of the undersigned.

Unless otherwise indicated herein in the box entitled “Special Issuance and Delivery Instructions” below, the undersigned hereby directs that the exchange offer consideration be credited to the account indicated above maintained at DTC. If applicable, 2036 Notes not exchanged or not accepted for exchange will be credited to the account indicated above maintained at DTC.

For purposes of the Exchange Offer, the undersigned understands that the Company will be deemed to have accepted for exchange validly tendered 2036 Notes, or defectively tendered 2036 Notes with respect to which the Company has waived such defect, if, as and when the Company gives oral (promptly confirmed in writing) or written notice thereof to the Exchange Agent.

The undersigned understands that the delivery and surrender of the 2036 Notes is not effective, and the risk of loss of the 2036 Notes does not pass to the Exchange Agent, until receipt by the Exchange Agent of (1) timely confirmation of a book-entry transfer of such 2036 Notes into the Exchange Agent’s account at DTC pursuant to the procedures set forth in the Prospectus, (2) a properly transmitted Agent’s Message through ATOP and (3) all accompanying evidences of authority and any other required documents in form satisfactory to the Company. All questions as to the form of all documents and the validity (including time of receipt) and acceptance of tenders and withdrawals of 2036 Notes will be determined by the Company, in its sole discretion, which determination shall be final and binding.

All authority herein conferred or agreed to be conferred in this Letter of Transmittal shall survive the death or incapacity (if an individual) or dissolution (if an entity) of the undersigned and any representation, warranty, undertaking and obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, legal representatives, successors and assigns of the undersigned.

PLEASE SIGN HERE

(TO BE COMPLETED BY ALL HOLDERS OF 2036 NOTES)

This Letter of Transmittal must be signed by the Holder(s) of 2036 Notes exactly as their name(s) appear(s) on a security position listing or by person(s) authorized to become registered holder(s) (evidence of such authorization must be transmitted herewith). If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person must provide their full title below under “capacity” and submit evidence satisfactory to the Company of such person’s authority to act and see Instruction 2 below.

If the signature appearing below is not of the record holder(s) of the 2036 Notes, then the record holder(s) must sign a valid bond power.

X                                                                                                                                                                                       

X                                                                                                                                                                                       

(Signature(s) of Holder(s) or Authorized Signatory)

DATED:                     , 2009

NAME(S):                                                                                                                                                                         

(Please Print)

CAPACITY (FULL TITLE):                                                                                                                                             

ADDRESS (INCLUDING ZIP CODE):                                                                                                                          

AREA CODE AND TELEPHONE NUMBER:                                                                                                            

Please Complete Substitute Form W-9 Herein or Appropriate IRS Form W-8 as Applicable

SIGNATURE GUARANTEE

(SEE INSTRUCTION 2 BELOW)

X                                                                                                                                                                                       

DATED:                     , 2009

NAME:                                                                                                                                                                            

(Please Print)

TITLE:                                                                                                                                                                             

NAME OF FIRM:                                                                                                                                                          

ADDRESS (INCLUDING ZIP CODE):                                                                                                                         

AREA CODE AND TELEPHONE NUMBER:                                                                                                            

SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS

To be completed ONLY if the exchange offer consideration or 2036 Notes not tendered or not accepted for exchange are to be sent to someone other than the registered holder of the 2036 Notes whose name(s) appear(s) above, or such registered holder at an address other than that shown above.

ISSUE:	¨    Returned 2036 Notes to:
	¨    Exchange offer consideration to:             (check as applicable)

NAME:                                                                                                                                                                                                              

(Please Print)

ADDRESS (INCLUDING ZIP CODE:                                                                                                                                                    

DTC Account Number

Taxpayer Identification or Social Security Number

Please Complete Substitute Form W-9 Herein or

Appropriate IRS Form W-8, as Applicable

INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

1. Delivery of Letter of Transmittal and Book-Entry Confirmations; Guaranteed Delivery Procedures.    This Letter of Transmittal is to be completed if tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in “The Exchange Offer—Book-entry transfer” in the Prospectus and an Agent’s Message is not delivered. Timely confirmation of a book-entry transfer of such 2036 Notes into the Exchange Agent’s account at DTC, as well as this Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, and any other documents required by this Letter of Transmittal, or an Agent’s Message in lieu of a Letter of Transmittal, must be received by the Exchange Agent at its address set forth herein on or prior to the expiration of the Exchange Offer, or, in the case of guaranteed delivery, no later than three NASDAQ Global Select Market trading days after the Expiration Date. 2036 Notes may be tendered in whole or in part in multiples of $1,000.

Holders who wish to tender their 2036 Notes and who cannot complete the procedures for delivery by book-entry transfer on a timely basis may tender their 2036 Notes by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in the Prospectus under “The Exchange Offer—Guaranteed delivery procedures.” Pursuant to such procedures: (i) such tender must be made by or through an Eligible Institution (as defined below); (ii) a validly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Company, must be received by the Exchange Agent prior to midnight, New York City time, on the Expiration Date; and (iii) a Book-Entry Confirmation representing all tendered 2036 Notes, in proper form for transfer, together with a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees and any other documents required by this Letter of Transmittal, or an Agent’s Message in lieu of a Letter of Transmittal, must be received by the Exchange Agent within three NASDAQ Global Select Market trading days after the Expiration Date, all as provided in the Prospectus under “The Exchange Offer—Guaranteed delivery procedures.”

The Notice of Guaranteed Delivery may be delivered by hand or transmitted by facsimile or mail to the Exchange Agent, and must include a guarantee by an Eligible Institution in the form set forth in such Notice. For 2036 Notes to be validly tendered pursuant to the guaranteed delivery procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery prior to midnight, New York City time, on the Expiration Date. As used herein and in the Prospectus, “Eligible Institution” means a firm or other entity identified in Rule 17Ad-15 under the Exchange Act as “an eligible guarantor institution,” including (as such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities broker, municipal securities dealer, government securities broker or governmental securities dealer, (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency, or (v) a savings association, with membership in an approved signature medallion guarantee program, that is a participant in a Securities Transfer Association, the New York Stock Exchange Medallion Signature Program or the Stock Exchanges Medallion Program.

THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, THEN REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

The Company will not accept any alternative, conditional or contingent tenders. Each tendering Holder, by execution of a Letter of Transmittal (or facsimile thereof), waives any right to receive any notice of the acceptance of such tender.

2. Guarantee of Signatures.    No signature guarantee on this Letter of Transmittal is required if:

• this Letter of Transmittal is signed by the registered holder (which term, for purposes of this document, shall include any participant in DTC whose name appears on a security position listing as the owner (the “Holder”)) of 2036 Notes tendered herewith, unless such Holder(s) has completed the box entitled “Special Issuance and Delivery Instructions”; or

• such of the 2036 Notes are tendered for the account of a firm that is an Eligible Institution.

In all other cases, an Eligible Institution must guarantee the signature(s) on this Letter of Transmittal. See Instruction 5.

3. Inadequate Space.    If the space provided in the box captioned “Description of 2036 Notes Tendered” is inadequate, the principal amount of 2036 Notes and any other required information should be listed on a separate signed schedule that is attached to this Letter of Transmittal.

4. Partial Tenders and Withdrawal Rights.    Tenders of 2036 Notes will be accepted only in multiples of $1,000. If less than all the 2036 Notes listed under the “Principal Amount Represented” in the box entitled “Description of 2036 Notes Tendered” are to be tendered, fill in the principal amount of 2036 Notes that is to be tendered in the column entitled “Principal Amount Tendered” in the box entitled “Descriptions of 2036 Notes Tendered.” All 2036 Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated.

Except as otherwise provided herein, tenders of 2036 Notes may be withdrawn at any time on or prior to the expiration of the Exchange Offer. In order for a withdrawal to be effective on or prior to that time, a written or facsimile transmission of such notice of withdrawal, a form of which is filed as an exhibit to the registration statement of which the Prospectus forms a part and which is available from the Information Agent upon request, or by a properly transmitted “Request Message” through ATOP, must be timely received by the Exchange Agent at one of its addresses set forth above or in the Prospectus on or prior to the expiration of the Exchange Offer. Any such notice of withdrawal must specify the name of the person who tendered the 2036 Notes to be withdrawn, the aggregate principal amount of 2036 Notes to be withdrawn and the other information required to be included therein as provided in the Prospectus under “The Exchange Offer—Withdrawal rights.” If 2036 Notes have been tendered pursuant to the procedures for book-entry transfer set forth in the Prospectus under “The Exchange Offer—Book-entry transfer,” the notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawal of 2036 Notes, in which case a notice of withdrawal will be effective if delivered to the Exchange Agent by written, telegraphic, telex or facsimile transmission. Withdrawals of tenders of 2036 Notes may not be rescinded. 2036 Notes validly withdrawn will not be deemed validly tendered for purposes of the Exchange Offer, but may be retendered at any subsequent time on or prior to the expiration of the Exchange Offer by following any of the procedures described in the Prospectus under “The Exchange Offer—Procedures for tendering 2036 Notes.”

All questions as to the validity, form and eligibility (including time of receipt) of such withdrawal notices will be determined by the Company, in its sole discretion, whose determination shall be final and binding on all parties, absent a finding to the contrary by a court of competent jurisdiction. The Company, any affiliates or assigns of the Company, the Exchange Agent or any

other person shall not be under any duty to give any notification of any irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Any 2036 Notes which have been tendered but which are withdrawn will be returned to the Holder thereof without cost to such Holder promptly after withdrawal.

5. Signatures on Letter of Transmittal, Assignments and Endorsements.    If this Letter of Transmittal is signed by the registered Holder(s) of the 2036 Notes tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the certificate(s) without alteration, enlargement or any change whatsoever, or if this Letter of Transmittal is signed by a participant in DTC, the signature must correspond with the name as it appears on the security position listing of the Holder of 2036 Notes.

If any 2036 Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal.

If this Letter of Transmittal or bond 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, unless waived by the Company, must submit proper evidence satisfactory to the Company, in its sole discretion, of each such person’s authority to so act.

When this Letter of Transmittal is signed by the Holder(s) of the 2036 Notes listed and transmitted hereby, no endorsement(s) of 2036 Notes or separate bond power(s) is required unless 2041 Notes are to be issued in the name of a person other than the Holder(s). Signatures on such bond power(s) must be guaranteed by an Eligible Institution.

If this Letter of Transmittal is signed by a person other than the Holder(s) of the 2036 Notes listed, the 2036 Notes must be endorsed or accompanied by appropriate bond powers, signed exactly as the name or names of the registered owner(s) appear(s) on the certificates or on the security position listing, and also must be accompanied by such opinions of counsel, certifications and other information as the Company or the Trustee for the 2036 Notes may require in accordance with the restrictions on transfer applicable to the 2036 Notes. Signatures on such 2036 Notes or bond powers must be guaranteed by an Eligible Institution.

6. Special Issuance and Delivery Instructions.    If the exchange offer consideration is to be issued in the name of a person other than the signer of this Letter of Transmittal, or if the exchange offer consideration is to be sent to someone other than the signer of this Letter of Transmittal or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. Any 2036 Notes not exchanged will be returned by book-entry transfer, by crediting the account indicated in the appropriate boxes above maintained at DTC. See Instruction 4.

7. Irregularities.    The Company will determine, in its sole discretion, all questions as to the form of documents, validity, eligibility (including time of receipt) and acceptance for exchange of any tender of 2036 Notes, which determination shall be final and binding on all parties, absent a finding to the contrary by a court of competent jurisdiction. The Company reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance of which, or exchange for which, may, in the view of counsel to the Company, be unlawful. The Company also reserves the absolute right, subject to applicable law, to waive certain of the conditions of the Exchange Offer set forth in the Prospectus under “The Exchange Offer—Conditions to the Exchange Offer” or any conditions or irregularities in any tender of 2036 Notes of any particular Holder whether or not similar conditions or irregularities are waived in the case

of other holders. The Company’s interpretation of the terms and conditions of the Exchange Offer (including this Letter of Transmittal and the instructions hereto) will be final and binding, absent a finding to the contrary by a court of competent jurisdiction. No tender of 2036 Notes will be deemed to have been validly made until all irregularities with respect to such tender have been cured or waived. None of the Company, any affiliates or assigns of the Company, the Exchange Agent, the Dealer Managers, the Information Agent or any other person shall be under any duty to give notification of any irregularities in tenders or incur any liability for failure to give such notification.

8. Questions, Requests for Assistance and Additional Copies.    Questions and requests for assistance may be directed to the Exchange Agent at its address and telephone number set forth on the front of this Letter of Transmittal. Additional copies of the Prospectus and the Letter of Transmittal may be obtained from the Exchange Agent or from your broker, dealer, commercial bank, trust company or other nominee. Questions and requests for information regarding the terms of the Exchange Offer should be directed to the Information Agent at its telephone numbers set forth on the back of this Letter of Transmittal.

9. Taxpayer Identification Number and Backup Withholding.    Under United States federal income tax law, a United States Holder (as defined in the Prospectus) or other United States payee whose tendered 2036 Notes are accepted for exchange is required to (i) provide the Exchange Agent with such Holder’s (or such Holder’s assignee’s) correct taxpayer identification number (“TIN”) on Substitute Form W-9 or (ii) establish another basis for exemption from backup withholding. For this purpose, a Holder’s assignee is also referred to as a “Holder.” A tendering United States Holder must cross out item (2) in the certification box (Part 3) on Substitute Form W-9 if such Holder is subject to backup withholding. Failure to provide the information on the Substitute Form W-9 may subject the tendering United States Holder to a $50 penalty imposed by the Internal Revenue Service (“IRS”) and a federal income tax backup withholding (currently 28%) on any payment made on account of the Exchange Offer (including interest). More serious penalties may be imposed for providing false information, which, if willfully done, may result in fines and/or imprisonment.

To prevent backup withholding, each United States Holder must provide the Exchange Agent with such Holder’s correct TIN by completing the Substitute Form W-9 accompanying this Letter of Transmittal, certifying, under penalty of perjury, that such TIN is correct, such Holder is not currently subject to backup withholding and such payee is a United States person (including a United States citizen or resident alien; a partnership, corporation, company or association created or organized in the United States or under the laws of the United States; an estate other than a foreign estate; or a domestic trust for United States federal tax purposes).

The box in Part 1 of the Substitute Form W-9 may be checked if the tendering United States Holder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 1 is checked, the United States Holder or other payee must also complete the Certification of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 1 is checked and the Certification of Awaiting Taxpayer Identification Number is completed, the Company or the Exchange Agent will withhold a percentage (currently 28%) of all payments made prior to the time a properly certified TIN is provided to the Company or the Exchange Agent.

The Holder is required to give the Exchange Agent the TIN of the registered owner of the 2036 Notes or of the last transferee appearing on the transfers attached to, or endorsed on, the 2036 Notes. If the 2036 Notes are registered in more than one name or are 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.

Certain Holders (including, among others, corporations, financial institutions and certain foreign persons) may not be subject to the backup withholding and reporting requirements. Such Holders should nevertheless complete the attached Substitute Form W-9 below, and check the box marked “exempt” in Part 2, to avoid possible erroneous backup withholding. A foreign person may qualify as an exempt recipient by submitting a properly completed IRS Form W-8 applicable to such foreign person, signed under penalties of perjury, attesting to that Holder’s exempt status.

Backup withholding is not an additional United States federal income tax. Rather, the United States federal income tax liability of a person 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, provided that the required information is timely furnished to the IRS.

HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE WHETHER THEY ARE EXEMPT FROM BACKUP WITHHOLDING.

10. Waiver of Conditions.    The Company reserves the absolute right to waive satisfaction of any or all conditions enumerated in the Prospectus, other than the non-waivable conditions described in the Prospectus under “The Exchange Offer—Conditions to the Exchange Offer.”

11. Security Transfer Taxes.    Holders who tender their 2036 Notes for exchange will not be obligated to pay any transfer taxes in connection therewith. If, however, 2041 Notes are to be delivered to, or are to be issued in the name of, any person other than the registered Holder of the 2036 Notes tendered, or if a transfer tax is imposed for any reason other than the exchange of 2036 Notes in connection with the Exchange Offer, then the amount of any such transfer tax (whether imposed on the registered Holder or any other persons) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering Holder.

SUBSTITUTE FORM W-9

REQUEST FOR TAXPAYER IDENTIFICATION NUMBER AND CERTIFICATION

PAYER’S NAME: U.S. BANK NATIONAL ASSOCIATION

PAYEE INFORMATION

(Please print or type)

Individual or business name (as shown on your income tax return; if joint account list first and circle the name of person or entity whose number you furnish in Part 1 below):

Check appropriate box:	¨ Individual/Sole proprietor
	¨ Corporation
	¨ Partnership
	¨ Limited liability company. Enter tax classification (D = disregarded entity, C = corporation, P = partnership)
	¨ Other

Address (Number, Street and Apt. or Suite No.)

City, State and Zip Code

PART 1: TAXPAYER IDENTIFICATION NUMBER (“TIN”)

Enter your TIN below. For individuals, this is your social security number. For other entities, it is your employer identification number. Refer to the chart on page 1 of the Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 (the “Guidelines”) for further clarification. If you do not have a TIN, see instructions on how to obtain a TIN on page 2 of the Guidelines, check the appropriate box below indicating that you have applied for a TIN and, in addition to the Part 3 Certification, sign the attached Certification of Awaiting Taxpayer Identification Number.

Social Security Number:                     -                       -                     

Employer Identification number:                     -                      

¨    Applied For

PART 2: PAYEES EXEMPT FROM BACKUP WITHHOLDING

Check box (See page 2 of the Guidelines for further clarification. Even if you are exempt from backup withholding, you should still complete and sign the certification below):

¨    Exempt

PART 3: CERTIFICATION

Certification instructions: You must cross out item 2 below if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return.

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); and

2. I am not subject to backup withholding because (i) I am exempt from backup withholding, (ii) I have not been notified by the Internal Revenue Service that I am subject to backup withholding as a result of a failure to report all interest or dividends or (iii) the Internal Revenue Service has notified me that I am no longer subject to backup withholding; and

3. I am a U.S. citizen or other U.S. person (including a U.S. resident alien).

Signature or U.S. person

Date

NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF 28% OF ANY PAYMENT MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED “GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9” FOR ADDITIONAL DETAILS.

YOU MUST COMPLETE THE FOLLOWING CERTIFICATION IF YOU CHECKED THE BOX “APPLIED FOR” IN PART 1 OF SUBSTITUTE FORM W-9

CERTIFICATION OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify, under penalties of perjury, that a TIN has not been issued to me, and either (i) I have mailed or delivered an application to receive a TIN to the appropriate Internal Revenue Service Center or Social Security Administration Office or (ii) I intend to mail or deliver an application in the near future. I understand that if I do not provide a TIN to the payor, the payor may be required to withhold and remit to the Internal Revenue Service a percentage (currently 28%) of all reportable payments made to me until I furnish the payor with a TIN.

Signature

Date

NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING AT THE APPLICABLE WITHHOLDING RATE (WHICH IS CURRENTLY 28%) ON ANY REPORTABLE PAYMENTS MADE TO YOU.

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: i.e., 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer.

For this type of account:	Give the name and SOCIAL SECURITY number of—
1.    An individual’s account	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)
3.    Custodian account of a minor (Uniform Gift to Minors Act)	The minor(2)
4.    (a) The usual revocable savings trust account (grantor is also trustee)	The grantor-trustee(1)
(b) So-called trust account that is not a legal or valid trust under State law	The actual owner(1)
5.    Sole proprietorship or disregarded entity owned by an individual	The owner(3)
For this type of account:	Give the name and EMPLOYER IDENTIFICATION number of—
6.    Disregarded entity not owned by an individual	The owner
7.    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)
8.    Corporate or LLC electing corporate status on Form 8832	The corporation
9.    Association, club, religious, charitable, or educational organization account	The organization
10.   Partnership or multi-member LLC	The partnership
11.   A broker or registered nominee	The broker or nominee
12.   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 agricultural program payments	The public entity

(1) List first and circle the name of the person whose number you furnish. If only one person on a joint account has a Social Security Number, that person’s number must be furnished.

(2) Circle the minor’s name and furnish the minor’s social security number.

(3) You must show your individual name and you may also enter your business or “DBA” name. You may use your Social Security Number or Employer Identification Number (if you have one). If you are a sole proprietor, the IRS encourages you to use your Social Security Number.

(4) List first and circle the name of the legal trust, estate, or pension trust.

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.

Obtaining a Number

If you don’t have a TIN or you don’t know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the IRS and apply for a number.

CAUTION: A disregarded domestic entity that has a foreign owner must use the appropriate FORM W-8.

GUIDELINES FOR CERTIFICATION OF TAXPAYER

IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9

PAGE 2

Payees Exempt from Backup Withholding

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

• An organization exempt from tax under section 501(a) of the Internal Revenue Code of 1986, as amended (the “Code”), an individual retirement account, or a custodial account under section 403(b)(7) of the Code if the account satisfies the requirements of section 401(f)(2) of the Code.

• The United States or any of its agencies or instrumentalities.

• A state, the District of Columbia, a possession of the United States or any of their political subdivisions or instrumentalities.

• A foreign government, or any of its political subdivisions, agencies or instrumentalities.

• An international organization or any of its agencies or instrumentalities.

Other payees that may be exempt from backup withholding include the following:

• A corporation.

• A foreign central bank of issue.

• A dealer in securities or commodities required to register in the United States, the District of Columbia or a possession of the United States.

• A futures commission merchant registered with the Commodity Futures Trading Commission.

• A real estate investment trust.

• An entity registered at all times during the tax year under the Investment Company Act of 1940.

• A common trust fund operated by a bank under section 584(a) of the Code.

• A financial institution.

• A middleman known in the investment community as a nominee or custodian.

• A trust exempt from tax under section 664 of the Code or described in section 4947 of the Code.

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 of the Code.

• Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner.

• Payments of patronage dividends where the amount received is not paid in money.

• Payments made by certain foreign organizations.

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 this interest is $600 or more and is paid in the course of the payer’s trade or business and you have not provided your correct TIN to the payer.

• Payments described in section 6049(b)(5) of the Code to non-resident aliens.

• Payments on tax-free covenant bonds under section 1451 of the Code.

• Payments made by certain foreign organizations.

• Mortgage interest paid to an individual.

Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TIN, WRITE “EXEMPT” ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM.

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 regulations under sections 6041, 6041A(a), 6045, and 6050A of the Code.

Privacy Act Notice—Section 6109 of the Code requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers 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 IRS may also provide information to the Department of Justice for civil and criminal litigation and to cities, states and the District of Columbia to carry out their tax laws. The IRS may also disclose this information to other countries under a tax treaty or to federal and state agencies to enforce federal non tax criminal laws and to combat terrorism. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 28% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. The penalties described below may also apply.

Penalties

(1) Penalty for Failure to Furnish TIN—If you fail to furnish your TIN to a 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 Information 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—Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE IRS.

The Exchange Agent for the Exchange Offer is:

U.S. BANK NATIONAL ASSOCIATION

By Overnight Delivery or Mail (Registered or Certified Mail Recommended):	By Facsimile Transmission:
U. S. Bank National Association 60 Livingston Ave. St. Paul, Minnesota 55107 Attention: Specialized Finance	(651) 495-8097 Confirm by Telephone: (800) 934-6802
By Hand: U. S. Bank National Association 60 Livingston Avenue 1st Floor—Bond Drop Window St. Paul, MN 55107

Any questions or requests for assistance may be directed to the Dealer Manager or the Information Agent at their respective telephone numbers as set forth below. Any requests for additional copies of the Prospectus, this Letter of Transmittal or related documents may be directed to the Information Agent. A holder may also contact such holder’s broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer.

The Information Agent for the Exchange Offer is:

D.F. KING & CO., INC.

48 Wall Street, 22^nd Floor

New York, NY 10005

Banks and Brokers Call Collect: (212) 269-5550

All Others Please Call Toll-Free: (800) 549-6697

The Dealer Manager for the Exchange Offer is:

J.P. Morgan

Convertible Bond Desk

383 Madison Avenue, Floor 5

New York, New York 10179

Toll-Free: (800) 261-5767

Collect: (212) 622-2781

The Co-Dealer Manager for the Exchange Offer is:

Goldman, Sachs & Co.

EX-99.2

Exhibit 99.2

NOTICE OF GUARANTEED DELIVERY

for

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

OFFER TO EXCHANGE

3.75% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2041

FOR UP TO $250,000,000 OF OUR

3.25% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2036

(CUSIP NO. 02744M AA 6)

This form or one substantially equivalent hereto must be used to participate in the Exchange Offer made by American Medical Systems Holdings, Inc., a Delaware corporation, pursuant to the prospectus dated August 14, 2009, as it may be amended from time to time (the “Prospectus”) and the related letter of transmittal, as it may be amended from time to time (the “Letter of Transmittal”), if the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach U.S. Bank National Association, as exchange agent (the “Exchange Agent”), on or prior to midnight, New York City time, on the Expiration Date of the Exchange Offer. Such form may be delivered or transmitted by facsimile transmission, mail or hand delivery to the Exchange Agent as set forth below. In addition, in order to utilize the guaranteed delivery procedure to tender any 3.25% Convertible Senior Subordinated Notes due 2036 (the “2036 Notes”) pursuant to the Exchange Offer, a completed, signed and dated Letter of Transmittal (or facsimile thereof) or a properly transmitted Agent’s Message and, in each case, confirmation of book-entry transfer and all other documents required by the Letter of Transmittal or the Agent’s Message, in each case, must be received by the Exchange Agent no later than three NASDAQ Global Select Market trading days after the Expiration Date. Holders of 2036 Notes who have previously validly tendered 2036 Notes for exchange or who validly tender 2036 Notes for exchange in accordance with this form may withdraw any 2036 Notes so tendered at any time prior to the Expiration Date. See the section of the Prospectus under the heading “The Exchange Offer” for a more complete description of the tender and withdrawal provisions. Capitalized terms not defined herein shall have the respective meanings ascribed to them in the Prospectus.

The Exchange Agent for the Exchange Offer is:

U.S. Bank National Association

By Overnight Delivery or Mail (Registered or Certified Mail Recommended):	By Facsimile Transmission:
U. S. Bank National Association 60 Livingston Ave.	(651) 495-8097
St. Paul, Minnesota 55107 Attention: Specialized Finance	Confirm by Telephone: (800) 934-6802
By Hand: U. S. Bank National Association 60 Livingston Avenue 1st Floor—Bond Drop Window St. Paul, MN 55107

DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF THIS INSTRUMENT VIA FACSIMILE 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 (as defined in the Letter of Transmittal) under the instructions to the Letter of Transmittal, such signature guarantee must appear in the applicable space provided on the signature in the Letter of Transmittal.

BY EXECUTING THIS NOTICE OF GUARANTEED DELIVERY, YOU ARE GUARANTEEING THAT (I) THE 2036 NOTES LISTED ON THIS NOTICE, (II) A LETTER OF TRANSMITTAL PROPERLY COMPLETED AND DULY EXECUTED (INCLUDING ANY SIGNATURE GUARANTEES THAT MAY BE REQUIRED), OR AN AGENT’S MESSAGE AND, IN EITHER CASE, CONFIRMATION OF BOOK-ENTRY TRANSFER AND (III) ANY OTHER REQUIRED DOCUMENTS WILL IN FACT BE DELIVERED TO THE EXCHANGE AGENT ON THE THIRD NASDAQ GLOBAL SELECT MARKET TRADING DAY AFTER THIS NOTICE OR GUARANTEED DELIVERY IS DELIVERED TO THE EXCHANGE AGENT.

Ladies and Gentlemen:

Upon the terms and conditions set forth in the Prospectus and the Letter of Transmittal, receipt of each of which is hereby acknowledged, the undersigned hereby tenders to American Medical Systems Holdings, Inc., the principal amount of 2036 Notes set forth below pursuant to the guaranteed delivery procedure described in the Prospectus under “The Exchange Offer—Guaranteed delivery procedures.”

Name(s) and Addresses of Holder(s)	DTC Account Number	Principal Amount Represented	Principal Amount Tendered*
	2036 Notes
*  2036 Notes may be tendered in whole or in part in multiples of $1,000. All 2036 Notes held as shown under “Principal Amount Represented” shall be deemed tendered unless a lesser number is specified in this column.

All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned (if an individual) or dissolution (if an entity) and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors, administrators and assigns of the undersigned.

PLEASE SIGN HERE
X	, 2009
X	, 2009
X	, 2009
Please type or print name here

Area Code and Telephone Number:                                                                                                                                             

Taxpayer Identification or Social Security Numbers(s):                                                                                                   

Must be signed by the holder(s) of the 2036 Notes as their name(s) appear(s) on a security position listing, or by person(s) authorized to become registered holder(s) by endorsement and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below.

Please print name(s) and address(es)

Names:                                                                                                                                                                                                             

GUARANTEE

(Not to be used for signature guarantees)

The undersigned, a financial institution that is a participant in the Securities Transfer Agents Medallion Program or an eligible guarantor institution (as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (each of the foregoing, an “Eligible Institution”), hereby (i) represents and guarantees that the immediately preceding named person(s) “own(s)” the 2036 Notes tendered hereby within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended (“Rule 14e-4”), (ii) represents and guarantees that such tender of 2036 Notes comply with Rule 14e-4 and (iii) guarantees that timely confirmation of the book-entry transfer of such 2036 Notes into the Exchange Agent’s account at The Depository Trust Company pursuant to the procedures set forth in the Prospectus under “The Exchange Offer—Book-entry transfer,” together with one or more properly completed and duly executed Letters of Transmittal (or facsimile thereof) or a properly transmitted Agent’s Message, and all other documents required by the Letter of Transmittal or the Agent’s Message, in each case, will be received by the Exchange Agent at the address set forth above, no later than three NASDAQ Global Select Market trading days after the Expiration Date.

Name of Firm:                                                                                                                                                                                             

Address: 

Zip Code:                                                                                                                                                                                                        

Telephone Number with Area Code:                                                                                                                                            

X	, 2009
Signature of Authorized Signatory	Date

    DO NOT SEND ANY OTHER DOCUMENTS WITH THIS NOTICE OF GUARANTEED DELIVERY.

EX-99.3

Exhibit 99.3

Notice of Withdrawal

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

OFFER TO EXCHANGE

3.75% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2041

FOR UP TO $250,000,000 OF OUR

3.25% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2036

(CUSIP NO. 02744M AA 6)

Pursuant to the Prospectus

Dated August 14, 2009

THE EXCHANGE OFFER WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON SEPTEMBER 11, 2009, UNLESS EXTENDED OR EARLIER TERMINATED BY US (SUCH DATE, AS THE SAME MAY BE EXTENDED OR EARLIER TERMINATED, THE “EXPIRATION DATE”). TENDERED NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO MIDNIGHT, NEW YORK CITY TIME, ON THE EXPIRATION DATE.

The undersigned acknowledges receipt of the prospectus dated August 14, 2009, as it may be amended from time to time (the “Prospectus”), of American Medical Systems Holdings, Inc., a Delaware corporation (the “Company”), in connection with the offer to exchange (the “Exchange Offer”) the Company’s newly issued 3.75% Convertible Senior Subordinated Notes due 2041 for up to $250,000,000 aggregate principal amount of the Company’s outstanding 3.25% Convertible Senior Subordinated Notes due 2036 (the “2036 Notes”) that are validly tendered and not validly withdrawn under the terms and conditions set forth in the Prospectus. All withdrawals of the 2036 Notes previously tendered in the Exchange Offer must comply with the procedures described in the Prospectus under “The Exchange Offer—Withdrawal rights.”

The undersigned has identified in the table below the 2036 Notes that it is withdrawing from the Exchange Offer:

DESCRIPTION OF 2036 NOTES WITHDRAWN

Principal Amount Previously Tendered	Principal Amount Withdrawn*	Date(s) 2036 Notes Notes were Tendered
TOTAL PRINCIPAL AMOUNT WITHDRAWN:
*  2036 Notes may be withdrawn in whole or in part in multiples of $1,000. All 2036 Notes listed under “Principal Amount Previously Tendered” shall be deemed withdrawn unless a lesser number is specified in this column.

You may transmit this Notice of Withdrawal to the Exchange Agent, U.S. Bank National Association, at the addresses listed on the back of the Prospectus, or by facsimile transmission at (651) 495-8097.

If any 2036 Notes were tendered through The Depository Trust Company (“DTC”), please provide the DTC Participant Number below. This form should only be used for withdrawals of 2036 Notes delivered through DTC if the undersigned needs to withdraw 2036 Notes on the final day of the Exchange Offer and withdrawal through DTC is no longer available. Otherwise, the DTC form of withdrawal should be used for withdrawal.

If you hold your 2036 Notes through a broker, dealer, commercial bank, trust company, custodian or similar institution, do not submit this form to the Exchange Agent. If you hold your 2036 Notes through such an institution, that institution must deliver the notice of withdrawal with respect to any 2036 Notes you wish to withdraw. You should consult the institution through which you hold your 2036 Notes regarding the procedures you must comply with and the time by which such procedures must be completed in order for that institution to provide a written notice of withdrawal or facsimile notice of withdrawal to the Exchange Agent on your behalf before midnight, New York City time, on the Expiration Date.

This notice of withdrawal must be signed below by the registered holder(s) of the 2036 Notes tendered as its or their names appear on the certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by endorsements and documents transmitted with the letter of transmittal used to tender such 2036 Notes. If signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, please set forth the full title of such persons below under “Capacity” and submit evidence satisfactory to the Company of such person’s authority to act.

NAMES:                                                                                                                                                                                                           

ACCOUNT NUMBERS:                                                                                                                                                                             

X                                                                                                                                                                                                                           

X                                                                                                                                                                                                                           

Signatures

CAPACITY (FULL TITLE):                                                                                                                                                                         

ADDRESS (INCLUDING ZIP CODE):                                                                                                                                                  

AREA CODE AND TELEPHONE NUMBER:                                                                                                                                    

TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER:                                                                                       

DTC PARTICIPANT NUMBER (IF APPLICABLE):                                                                                                                          

DATED:                     , 2009

The Company will determine all questions as to the validity, form and eligibility (including time of receipt) of any notice of withdrawal in its sole discretion, and its determination shall be final and binding, absent a finding to the contrary by a court of competent jurisdiction. None of the Company, the Dealer Managers, the Exchange Agent, the Information Agent (each as defined in the Prospectus) or any other person is under any duty to give notice of any defects or irregularities in any notice of withdrawal and none of them will incur any liability for failure to give any such notice.