<PAGE>   1




                                                                    EXHIBIT 4.1




                     AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

                          REGISTRATION RIGHTS AGREEMENT


                  REGISTRATION RIGHTS AGREEMENT, dated as of June __, 2000,
among the investors listed on Schedule I hereto (the "Investors") and American
Medical Systems Holdings, Inc., a Delaware corporation (the "Company").

                                 R E C I T A L S

                  WHEREAS, the Investors, pursuant to the terms of an exchange
agreement with the Company, dated as of April 17, 2000, exchanged their shares
of preferred stock of American Medical Systems, Inc. ("AMS") for the number of
shares of Series A Non-Voting Preferred Stock, par value $0.01 per share (the
"Series A Preferred Stock"), shares of Series B Convertible Voting Preferred
Stock, par value $0.01 per share ("Series B Preferred Stock"), shares of Series
C Convertible Non-Voting Preferred Stock, $0.01 par value per share ("Series C
Preferred Stock"), shares of Series D Convertible Voting Preferred Stock, $0.01
par value per share ("Series D Preferred Stock") and shares of Series E
Convertible Non-Voting Preferred Stock, $0.01 par value per share ("Series E
Preferred Stock" and, together with Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock and Series D Preferred Stock, the "Preferred
Stock"), all of the Company equal to the number of shares of such series of
preferred stock of AMS such Investor had held; and

                  WHEREAS, the shares of Series B Preferred Stock and Series D
Preferred Stock are convertible into shares of the Company's common stock, par
value $0.01 per share ("Voting Common Stock" and, together with any non-voting
common stock, par value $0.01 per share, of the Company, the "Common Stock");
and

                  WHEREAS, the Company has agreed, as a condition to the
Investors' consenting, as stockholders of the Company, to the amendment to the
Company's Certificate of Incorporation which amendment provides for the
mandatory conversion of Series A Preferred Stock into shares of Common Stock
simultaneously with the closing of the Company's Initial Public Offering (as
defined herein), to grant the Investors certain registration rights; and

                  WHEREAS, the Company and the Investors desire to define the
registration rights of the Investors on the terms and subject to the conditions
herein set forth.

                  NOW, THEREFORE, in consideration of the foregoing premises
and for other good and valuable consideration, the parties hereby agree as
follows:


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                  SECTION 1. DEFINITIONS

                  As used in this Agreement, the following terms have the
respective meaning set forth below:

                  Commission:  shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act;
                  Exchange Act:  shall mean the Securities Exchange Act of 1934,
 as amended;
                  Holder:  shall mean any holder of Registrable Securities;

                  Initial Public Offering:  shall mean the initial public
offering of shares of Common Stock pursuant to a registration under the
Securities Act;
                  Initiating Holder:  shall mean any Holder or Holders who in
 the aggregate are Holders of more than 50% of the then outstanding Registrable
 Securities;
                  Person:  shall mean an individual, partnership, joint-stock
 company, corporation, trust or unincorporated organization, and a government
 or agency or political subdivision thereof;

                  register, registered and registration: shall mean to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement;

                  Registrable Securities: shall mean (A) shares of Common Stock
issuable upon conversion of the shares of Preferred Stock, (B) any additional
shares of Common Stock acquired by the Investors (other than shares acquired
upon the exercise of employee stock options) and (C) any stock of the Company
issued as a dividend or other distribution with respect to, or in exchange for
or in replacement of, the shares of Preferred Stock or Common Stock referred to
in clause (A) or (B);

                  Registration Expenses: shall mean all expenses incurred by the
Company in compliance with Sections 2(a), (b) and (c) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, fees and expenses of one counsel for
all the Holders in an amount not to exceed $15,000, blue sky fees and expenses
and the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company);

                  Security, Securities:  shall have the meaning set forth in
Section 2(1) of the Securities Act;

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                  Securities Act:  shall mean the Securities Act of 1933, as
 amended; and

                  Selling Expenses: shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and all
fees and disbursements of counsel for each of the Holders other than fees and
expenses of one counsel for all the Holders in an amount not to exceed $15,000.

                  SECTION  2.  REGISTRATION RIGHTS

                  (a)   Requested Registration.


                  (i)   Request for Registration. Following the Initial Public
          Offering, if the Company shall receive from an Initiating Holder, at
          any time, a written request that the Company effect any registration
          with respect to all or a part of the Registrable Securities, the
          Company will:

                  (1)   promptly give written notice of the proposed
          registration, qualification or compliance to all other Holders; and

                  (2)   as soon as practicable, use its diligent best efforts
          to effect such registration (including, without limitation, the
          execution of an undertaking to file post-effective amendments,
          appropriate qualification under applicable blue sky or other state
          securities laws and appropriate compliance with applicable regulations
          issued under the Securities Act) as may be so requested and as would
          permit or facilitate the sale and distribution of all or such portion
          of such Registrable Securities as are specified in such request,
          together with all or such portion of the Registrable Securities of any
          Holder or Holders joining in such request as are specified in a
          written request received by the Company within 10 business days after
          written notice from the Company is given under Section 2(a)(i)(1)
          above; provided that the Company shall not be obligated to effect, or
          take any action to effect, any such registration pursuant to this
          Section 2(a):

                             (x) In any particular jurisdiction in which the
                  Company would be required to execute a general consent to
                  service of process in effecting such registration,
                  qualification or compliance, unless the Company is already
                  subject to service in such jurisdiction and except as may be
                  required by the Securities Act or applicable rules or
                  regulations thereunder;

                             (y) After the Company has effected two (2) such
                  registrations pursuant to this Section 2(a) and such
                  registrations have been declared or ordered effective and
                  the sales of such Registrable Securities shall have closed;
                  or

                             (z) If the Registrable Securities requested by all
                  Holders to be registered pursuant to such request do not
                  have an anticipated aggregate public offering price (before
                  any underwriting discounts and commissions) of at least
                  $15,000,000.


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The registration statement filed pursuant to the request of the Initiating
Holders may, subject to the provisions of Section 2(a)(ii) below, include other
securities of the Company which are held by Persons who, by virtue of agreements
with the Company, are entitled to include their securities in any such
registration ("Other Stockholders"). In the event any Holder requests a
registration pursuant to this Section 2(a) in connection with a distribution of
Registrable Securities to its partners, the registration shall provide for the
resale by such partners, if requested by such Holder.

The Company may, on not more than one occasion, delay the filing of any
registration statement requested under this Section 2(a) to a date not more than
90 days following the date of the Initiating Holder's request for registration
in the event that the Company has furnished the Holders with a certificate
executed by the Company's President or Chief Executive Officer stating that, in
the good faith judgment of the Board of Directors of the Company, such delay is
necessary in order not to (A) significantly adversely affect financing efforts
then underway at the Company or (B) disclose material non-public information.

                  (ii)  Underwriting. If the Initiating Holders intend to
          distribute the Registrable Securities covered by their request by
          means of an underwriting, they shall so advise the Company as a part
          of their request made pursuant to Section 2(a).

If Other Stockholders request such inclusion, the Holders shall offer to include
the securities of such Other Stockholders in the underwriting and may condition
such offer on their acceptance of the further applicable provisions of this
Section 2. The Holders whose shares are to be included in such registration and
the Company shall (together with all Other Stockholders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the representative of the underwriter or underwriters
selected for such underwriting by the Initiating Holders and reasonably
acceptable to the Company. Notwithstanding any other provision of this Section
2(a), if the representative advises the Holders in writing that marketing
factors require a limitation on the number of shares to be underwritten, the
securities of the Company held by Other Stockholders shall be excluded from such
registration to the extent so required by such limitation. If, after the
exclusion of such shares, further reductions are still required, the number of
shares included in the registration by each Holder shall be reduced on a pro
rata basis (based on the number of shares held by such Holder), by such minimum
number of shares as is necessary to comply with such request. No Registrable
Securities or any other securities excluded from the underwriting by reason of
the underwriter's marketing limitation shall be included in such registration.
If any Other Stockholder who has requested inclusion in such registration as
provided above disapproves of the terms of the underwriting, such person may
elect to withdraw therefrom by written notice to the Company, the underwriter
and the Initiating Holders. The securities so withdrawn shall also be withdrawn
from registration. If the underwriter has not limited the number of Registrable
Securities or other securities to be underwritten, the Company and officers and
directors of the Company may include its or their securities for its or their
own account in such registration if the representative so agrees and if the
number of Registrable Securities and other securities which would otherwise have
been included in such registration and underwriting will not thereby be limited.


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                  (b)   Company Registration.

                  (i)   If the Company shall determine to register any of its
          equity securities either for its own account or for the account of
          Other Stockholders, other than a registration relating to the Initial
          Public Offering, a registration relating solely to employee benefit
          plans or a registration relating solely to a Commission Rule 145
          transaction, or a registration on any registration form which does not
          permit secondary sales or does not include substantially the same
          information as would be required to be included in a registration
          statement covering the sale of Registrable Securities, the Company
          will:

                  (1)   promptly give to each of the Holders a written notice
          thereof (which shall include a list of the jurisdictions in which the
          Company intends to attempt to qualify such securities under the
          applicable blue sky or other state securities laws); and

                  (2)   include in such registration (and any related
          qualification under blue sky laws or other compliance), and in any
          underwriting involved therein, all the Registrable Securities
          specified in a written request or requests, made by the Holders within
          fifteen (15) days after receipt of the written notice from the Company
          described in clause (i) above, except as set forth in Section 2(b)(ii)
          below. Such written request may specify all or a part of the Holders'
          Registrable Securities. In the event any Holder requests inclusion in
          a registration pursuant to this Section 2(b) in connection with a
          distribution of Registrable Securities to its partners, the
          registration shall provide for the resale by such partners, if
          requested by such Holder.

                  (ii)  Underwriting.  If the registration of which the Company
          gives notice is for a registered public offering involving an
          underwriting, the Company shall so advise each of the Holders as a
          part of the written notice given pursuant to Section 2(b)(i)(1). In
          such event, the right of each of the Holders to registration pursuant
          to this Section 2(b) shall be conditioned upon such Holders'
          participation in such underwriting and the inclusion of such Holders'
          Registrable Securities in the underwriting to the extent provided
          herein. The Holders whose shares are to be included in such
          registration shall (together with the Company and the Other
          Stockholders distributing their securities through such underwriting)
          enter into an underwriting agreement in customary form with the
          representative of the underwriter or underwriters selected for
          underwriting by the Company. Notwithstanding any other provision of
          this Section 2(b), if the representative determines that marketing
          factors require a limitation on the number of shares to be
          underwritten, the representative may (subject to the allocation
          priority set forth below) limit the number of Registrable Securities
          to be included in the registration and underwriting to not less than
          twenty five percent (25%) of the shares included therein (based on the
          number of shares). The Company shall so advise all holders of
          securities requesting registration, and the number of shares of
          securities that are entitled to be included in the registration and
          underwriting shall be allocated in the following manner: The
          securities of the Company held by officers, directors and Other
          Stockholders of the Company (other than Registrable Securities and
          other than securities held by holders who by contractual right
          demanded such registration ("Demanding Holders")) shall be

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          excluded from such registration and underwriting to the extent
          required by such limitation, and, if a limitation on the number of
          shares is still required, the number of shares that may be included in
          the registration and underwriting by each of the Holders and Demanding
          Holders shall be reduced, on a pro rata basis (based on the number of
          shares held by such Holder), by such minimum number of shares as is
          necessary to comply with such limitation. If any of the Holders or any
          officer, director or Other Stockholder disapproves of the terms of any
          such underwriting, he may elect to withdraw therefrom by written
          notice to the Company and the underwriter. Any Registrable Securities
          or other securities excluded or withdrawn from such underwriting shall
          be withdrawn from such registration.


                  (iii) Withdrawal. The Company may, in its sole discretion,
          withdraw any such registration and abandon the proposed offering in
          which any such Holder had requested to participate.


                  (c)   Form S-3. Following the Initial Public Offering, the
Company shall use its best efforts to qualify for registration on Form S-3 for
secondary sales. After the Company has qualified for the use of Form S-3, the
Holders shall have the right to request three (3) registrations on Form S-3
(such requests shall be in writing and shall state the number of shares of
Registrable Securities to be disposed of and the intended method of disposition
of shares by such holders), subject only to the following:

                  (i)   The Company shall not be required to effect a
          registration pursuant to this Section 2(c) unless the Holder or
          Holders requesting registration propose to dispose of shares of
          Registrable Securities having an aggregate price to the public (before
          deduction of underwriting discounts and expenses of sale) of more than
          $5,000,000.

                  (ii)  The Company shall not be required to effect a
          registration pursuant to this Section 2(c) within 180 days of the
          effective date of the most recent registration pursuant to this
          Section 2 in which securities held by the requesting Holder could have
          been included for sale or distribution.

                  (iii) The Company shall not be obligated to effect any
          registration pursuant to this Section 2(c) in any particular
          jurisdiction in which the Company would be required to execute a
          general consent to service of process in effecting such registration,
          qualification or compliance, unless the Company is already subject to
          service in such jurisdiction and except as may be required by the
          Securities Act or applicable rules or regulations thereunder.


                  (iv)  The Company may, on not more than one occasion, delay
          the filing of any registration statement requested under this Section
          2(c) to a date not more than 90 days following the date of the
          Holder's request for registration in the event that the Company has
          furnished the Holders with a certificate executed by the Company's
          President or Chief Executive Officer stating that, in the good faith
          judgment of the Board of Directors of the Company, such delay is
          necessary in order not to (A) significantly adversely affect


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<PAGE>   7


          financing efforts then underway at the Company or (B) disclose
          material non-public information.


The Company shall give written notice to all Holders of the receipt of a request
for registration pursuant to this Section 2(c) and shall provide a reasonable
opportunity for other Holders to participate in the registration, provided that
if the registration is for an underwritten offering, the terms of Section
2(a)(ii) shall apply to all participants in such offering. Subject to the
foregoing, the Company will use its best efforts to effect promptly the
registration of all shares of Registrable Securities on Form S-3 to the extent
requested by the Holder or Holders thereof for purposes of disposition. In the
event any Holder requests a registration pursuant to this Section 2(c) in
connection with a distribution of Registrable Securities to its partners, the
registration shall provide for the resale by such partners, if requested by such
Holder.

                  (d)   Expenses of Registration. All Registration Expenses
incurred in connection with any registration, qualification or compliance
pursuant to this Section 2 shall be borne by the Company, and all Selling
Expenses shall be borne by the Holders of the securities so registered pro rata
on the basis of the number of their shares so registered.


                  (e)   Registration Procedures. In the case of each
registration effected by the Company pursuant to this Section 2, the Company
will keep the Holders, as applicable, advised in writing as to the initiation of
each registration and as to the completion thereof. At its expense, the Company
will:

                  (i)   keep such registration effective for a period of one
          hundred twenty (120) days or until the Holders (or in the case of a
          distribution to the partners of such Holder, such partners), as
          applicable, have completed the distribution described in the
          registration statement relating thereto, whichever first occurs;
          provided, however, that (A) such 120-day period shall be
          extended for a period of time equal to the period during which
          the Holders or partners, as applicable, refrain from selling any
          securities included in such registration in accordance with provisions
          in Section 2(i) hereof; and (B) in the case of any registration of
          Registrable Securities on Form S-3 which are intended to be offered on
          a continuous or delayed basis, such 120-day period shall be extended
          until all such Registrable Securities are sold, provided that Rule
          415, or any successor rule under the Securities Act, permits an
          offering on a continuous or delayed basis, and provided further that
          applicable rules under the Securities Act governing the obligation to
          file a post-effective amendment permit, in lieu of filing a
          post-effective amendment which (y) includes any prospectus required by
          Section 10(a) of the Securities Act or (z) reflects facts or events
          representing a material or fundamental change in the information set
          forth in the registration statement, the incorporation by reference of
          information required to be included in (y) and (z) above to be
          contained in periodic reports filed pursuant to Section 12 or 15(d) of
          the Exchange Act in the registration statement;

                  (ii)  furnish such number of prospectuses and other documents
          incident thereto as each of the Holders, as applicable, from time to
          time may reasonably request;


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<PAGE>   8

                  (iii) notify each Holder of Registrable Securities covered
          by such registration at any time when a prospectus relating thereto is
          required to be delivered under the Securities Act of the happening of
          any event as a result of which the prospectus included in such
          registration statement, as then in effect, includes an untrue
          statement of a material fact or omits to state a material fact
          required to be stated therein or necessary to make the statements
          therein not misleading in the light of the circumstances then
          existing; and

                  (iv) if the Registrable Securities are being sold through
          underwriters, furnish on the date that such securities are delivered
          to the underwriters for sale, (1) an opinion, dated as of such date,
          of the counsel representing the Company for the purposes of such
          registration, in form and substance as is customarily given to
          underwriters in an underwritten public offering and reasonably
          satisfactory to a majority in interest of the Holders participating in
          such registration, addressed to the underwriters, if any, and to the
          Holders participating in such registration and (2) a letter, dated as
          of such date, from the independent certified public accountants of the
          Company, in form and substance as is customarily given by independent
          certified public accountants to underwriters in an underwritten public
          offering and reasonably satisfactory to a majority in interest of the
          Holders participating in such registration, addressed to the
          underwriters, if any, and if permitted by applicable accounting
          standards, to the Holders participating in such registration.

                  (f) Indemnification.

                  (i) The Company will indemnify each of the Holders, as
          applicable, each of its officers, directors and partners, and each
          person controlling each of the Holders, with respect to each
          registration which has been effected pursuant to this Section 2, and
          each underwriter, if any, and each person who controls any
          underwriter, against all claims, losses, damages and liabilities (or
          actions in respect thereof) arising out of or based on any untrue
          statement (or alleged untrue statement) of a material fact contained
          in any prospectus, offering circular or other document (including any
          related registration statement, notification or the like) incident to
          any such registration, qualification or compliance, or based on any
          omission (or alleged omission) to state therein a material fact
          required to be stated therein or necessary to make the statements
          therein not misleading, or any violation by the Company of the
          Securities Act or the Exchange Act or any rule or regulation
          thereunder applicable to the Company and relating to action or
          inaction required of the Company in connection with any such
          registration, qualification or compliance, and will reimburse each of
          the Holders, each of its officers, directors and partners, and each
          person controlling each of the Holders, each such underwriter and each
          person who controls any such underwriter, for any legal and any other
          expenses reasonably incurred in connection with investigating and
          defending any such claim, loss, damage, liability or action, provided
          that the Company will not be liable in any such case to the extent
          that any such claim, loss, damage, liability or expense arises out of
          or is based on any untrue statement or omission based upon written
          information furnished to the Company by the Holders or underwriter and
          stated to be specifically for use therein.

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<PAGE>   9


                  (ii) Each of the Holders will, if Registrable Securities
          held by it are included in the securities as to which such
          registration, qualification or compliance is being effected, indemnify
          the Company, each of its directors and officers and each underwriter,
          if any, of the Company's securities covered by such a registration
          statement, each person who controls the Company or such underwriter,
          each Other Stockholder and each of their officers, directors, and
          partners, and each person controlling such Other Stockholder against
          all claims, losses, damages and liabilities (or actions in respect
          thereof) arising out of or based on any untrue statement (or alleged
          untrue statement) of a material fact contained in any such
          registration statement, prospectus, offering circular or other
          document made by such Holder, or any omission (or alleged omission) to
          state therein a material fact required to be stated therein or
          necessary to make the statements by such Holder therein not
          misleading, and will reimburse the Company and such Other
          Stockholders, directors, officers, partners, persons, underwriters or
          control persons for any legal or any other expenses reasonably
          incurred in connection with investigating or defending any such claim,
          loss, damage, liability or action, in each case to the extent, but
          only to the extent, that such untrue statement (or alleged untrue
          statement) or omission (or alleged omission) is made in such
          registration statement, prospectus, offering circular or other
          document in reliance upon and in conformity with written information
          furnished to the Company by such Holder and stated to be specifically
          for use therein; provided, however, that the obligations of each of
          the Holders hereunder shall be limited to an amount equal to the net
          proceeds to such Holder of securities sold as contemplated herein.

                  (iii) Each party entitled to indemnification under this
          Section 2(f) (the "Indemnified Party") shall give notice to the party
          required to provide indemnification (the "Indemnifying Party")
          promptly after such Indemnified Party has actual knowledge of any
          claim as to which indemnity may be sought, and shall permit the
          Indemnifying Party to assume the defense of any such claim or any
          litigation resulting therefrom; provided that counsel for the
          Indemnifying Party, who shall conduct the defense of such claim or any
          litigation resulting therefrom, shall be approved by the Indemnified
          Party (whose approval shall not unreasonably be withheld) and the
          Indemnified Party may participate in such defense at such party's
          expense (unless the Indemnified Party shall have reasonably concluded
          that there may be a conflict of interest between the Indemnifying
          Party and the Indemnified Party in such action, in which case the fees
          and expenses of counsel shall be at the expense of the Indemnifying
          Party), and provided further that the failure of any Indemnified Party
          to give notice as provided herein shall not relieve the Indemnifying
          Party of its obligations under this Section 2 unless the Indemnifying
          Party is materially prejudiced thereby. No Indemnifying Party, in the
          defense of any such claim or litigation shall, except with the consent
          of each Indemnified Party, consent to entry of any judgment or enter
          into any settlement which does not include as an unconditional term
          thereof the giving by the claimant or plaintiff to such Indemnified
          Party of a release from all liability in respect to such claim or
          litigation. Each Indemnified Party shall furnish such information
          regarding itself or the claim in question as an Indemnifying Party may
          reasonably request in writing and as shall be reasonably required in
          connection with the defense of such claim and litigation resulting
          therefrom.

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<PAGE>   10

                  (iv)  If the indemnification provided for in this Section
          2(f) is held by a court of competent jurisdiction to be unavailable to
          an Indemnified Party with respect to any loss, liability, claim,
          damage or expense referred to herein, then the Indemnifying Party, in
          lieu of indemnifying such Indemnified Party hereunder, shall
          contribute to the amount paid or payable by such Indemnified Party as
          a result of such loss, liability, claim, damage or expense in such
          proportion as is appropriate to reflect the relative fault of the
          Indemnifying Party on the one hand and of the Indemnified Party on the
          other in connection with the statements or omissions which resulted in
          such loss, liability, claim, damage or expense, as well as any other
          relevant equitable considerations. The relative fault of the
          Indemnifying Party and of the Indemnified Party 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 Indemnifying Party or by the Indemnified Party and the parties'
          relative intent, knowledge, access to information and opportunity to
          correct or prevent such statement or omission.

                  (v)   Notwithstanding the foregoing, to the extent that the
          provisions on indemnification and contribution contained in the
          underwriting agreement entered into in connection with any
          underwritten public offering contemplated by this Agreement are in
          conflict with the foregoing provisions, the provisions in such
          underwriting agreement shall be controlling.

                  (vi)  The foregoing indemnity agreement of the Company and
          Holders is subject to the condition that, insofar as they relate to
          any loss, claim, liability or damage arising out of a statement made
          in or omitted from a preliminary prospectus but eliminated or remedied
          in the amended prospectus on file with the Commission at the time the
          registration statement in question becomes effective or the amended
          prospectus filed with the Commission pursuant to Commission Rule
          424(b) (the "Final Prospectus"), such indemnity or contribution
          agreement shall not inure to the benefit of any underwriter or Holder
          if a copy of the Final Prospectus was furnished to the underwriter and
          was not furnished to the person asserting the loss, liability, claim
          or damage at or prior to the time such action is required by the
          Securities Act.

                  (g)   Information by the Holders.

                  (i)   Each of the Holders holding securities included in any
          registration shall furnish to the Company such information regarding
          such Holder and the distribution proposed by such Holder as the
          Company may reasonably request in writing and as shall be reasonably
          required in connection with any registration, qualification or
          compliance referred to in this Section 2.

                  (ii)  In the event that, either immediately prior to or
          subsequent to the effectiveness of any registration statement, any
          Holder shall distribute Registrable Securities to its partners, such
          Holder shall so advise the Company and provide such information as
          shall be necessary to permit an amendment to such registration
          statement

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<PAGE>   11

          to provide information with respect to such partners, as selling
          securityholders. Promptly following receipt of such information, the
          Company shall file an appropriate amendment to such registration
          statement reflecting the information so provided. Any incremental
          expense to the Company resulting from such amendment shall be borne by
          such Holder.

                  (h)   Rule 144 Reporting.

                  With a view to making available the benefits of certain rules
and regulations of the Commission which may permit the sale of restricted
securities to the public without registration, the Company agrees to:

                  (i)   make and keep public information available as those
          terms are understood and defined in Rule 144 under the Securities Act
          ("Rule 144"), at all times from and after ninety (90) days following
          the effective date of the first registration under the Securities Act
          filed by the Company for an offering of its securities to the general
          public;

                  (ii)   use its best efforts to file with the Commission in a
          timely manner all reports and other documents required of the Company
          under the Securities Act and the Exchange Act at any time after it has
          become subject to such reporting requirements; and

                  (iii) so long as the Holder owns any Registrable Securities,
          furnish to the Holder upon request, a written statement by the Company
          as to its compliance with the reporting requirements of Rule 144 (at
          any time from and after ninety (90) days following the effective date
          of the first registration statement filed by the Company for an
          offering of its securities to the general public), and of the
          Securities Act and the Exchange Act (at any time after it has become
          subject to such reporting requirements), a copy of the most recent
          annual or quarterly report of the Company, and such other reports and
          documents so filed as the Holder may reasonably request in availing
          itself of any rule or regulation of the Commission allowing the Holder
          to sell any such securities without registration.

                  (i)   "Market Stand-off" Agreement. Each of the Holders
agrees, if requested by the Company and an underwriter of equity securities of
the Company, not to sell or otherwise transfer or dispose of any Registrable
Securities held by such Holder during the 180-day period following the effective
date of a registration statement of the Company filed under the Securities Act,
provided that:

                  (i)   such agreement only applies to the Initial Public
          Offering; and

                  (ii)  all officers and directors of the Company enter into
          similar agreements.

                  If requested by the underwriters, the Holders shall execute a
separate agreement to the foregoing effect. The Company may impose stop-transfer
instructions with respect to the shares (or securities) subject to the foregoing
restriction until the end of said 180-day period. The provisions of this Section
2(i) shall be binding upon any transferee who acquires Registrable Securities.


                                      -11-

<PAGE>   12


                  (j)   The registration rights set forth in this Section 2 may
be assigned, in whole or in part, to any transferee of Registrable Securities
(who shall be bound by all obligations of this Agreement).

                  (k)   Termination. The registration rights set forth in this
Section 2 shall not be available to any Holder if, (i) in the opinion of counsel
to the Company, all of the Registrable Securities then owned by such Holder
could be sold in any 90-day period pursuant to Rule 144 (without giving effect
to the provisions of Rule 144(k)) or (ii) all of the Registrable Securities held
by such Holder have been sold in a registration pursuant to the Securities Act
or pursuant to Rule 144.

                  SECTION  3.  MISCELLANEOUS

                  (a)   Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person.

                  (b)   Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.

                  (c)   Section Headings. The headings of the sections and
subsections of this Agreement are inserted - for convenience only and shall not
be deemed to constitute a part thereof.

                  (d)   Notices.

                  (i)   All communications under this Agreement shall be in

          writing and shall be delivered by hand or facsimile or mailed by
          overnight courier or by registered or certified mail, postage prepaid:

                  (1)   if to the Company, to American Medical Systems Holdings,
          Inc., 10700 Bren Road West, Minnetonka, Minnesota 55343, Attention:
          Chief Executive Officer (facsimile: (952) 930-6777), or at such other
          address as it may have furnished in writing to the Holders;

                  (2)   if to the Holders, at the address or facsimile number
          listed on Schedule I hereto, or at such other address or facsimile
          number as may have been furnished the Company in writing.

                  (ii)  Any notice so addressed shall be deemed to be given: if
          delivered by hand or facsimile, on the date of such delivery; if
          mailed by courier, on the first business day following the date of
          such mailing; and if mailed by registered or certified mail, on the
          third business day after the date of such mailing.

                  (e)   Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitation, any consents, waivers
and modifications which may hereafter be executed may be reproduced by the
Holders by any photographic, photostatic,

                                      -12-

<PAGE>   13



microfilm, microcard, miniature photographic or other similar process and the
Holders may destroy any original document so reproduced. The parties hereto
agree and stipulate that any such reproduction shall be admissible in evidence
as the original itself in any judicial or administrative proceeding (whether or
not the original is in existence and whether or not such reproduction was made
by the Holders in the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.

                  (f)   Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each of the
parties.

                  (g)   Entire Agreement; Amendment and Waiver. This Agreement
constitutes the entire understanding of the parties hereto and supersedes all
prior understanding among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of the Company and the Holders holding a majority of the then
outstanding Registrable Securities.

                  (h)   Severability. In the event that any part or parts of
this Agreement shall be held illegal or unenforceable by any court or
administrative body of competent jurisdiction, such determination shall not
affect the remaining provisions of this Agreement which shall remain in full
force and effect.

                  (i)   Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.








                       [THIS SPACE IS INTENTIONALLY BLANK]



                                      -13-

<PAGE>   14



                  IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.

                                      AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.


                                      By:
                                         -------------------------
                                        Name:
                                        Title:

WARBURG, PINCUS EQUITY PARTNERS, L.P.

By:  WARBURG, PINCUS & CO.,
General Partner

By:
    -------------------------------------------------
   Name:
   Title:

STANDBY FUND 1998

By:
     ------------------------------------------------
    Name:
    Title:

AMS INVESTORS

By:
     ------------------------------------------------
    Name:
    Title:

AMS INVESTORS II

By:
     ------------------------------------------------
    Name:
    Title:

SECOND CENTURY GROWTH DEFERRED COMPENSATION PLAN

By:  PIPER JAFFRAY INC.

By:
     ------------------------------------------------
    Name:
    Title:


                                      -14-


<PAGE>   15


VERTICAL FUND ASSOCIATES, L.P.

By:  VERTICAL GROUP, L.P.,
General Partner

By:
     ------------------------------------------------
    Name:
    Title:

UPPER LAKE GROWTH CAPITAL LLC

By:

By:
     ------------------------------------------------
    Name:
    Title:

CRANE ISLAND VENTURES LLC

By:

By:
     ------------------------------------------------
    Name:
    Title:

DOUGLAS W. KOHRS


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

                                      -15-

<PAGE>   16




                                   SCHEDULE I

                                    Investors



INVESTOR NAME AND ADDRESS

Warburg, Pincus Equity Partners, L.P.
466 Lexington Avenue
New York, NY 10017
Facsimile: (212) 878-9361
Attention: Elizabeth H. Weatherman

Vertical Fund Associates, L.P.
c/o The Vertical Group
18 Bank Street
Summit, New Jersey  07901
Facsimile: (908) 273-9434
Attention:  Richard Emmitt

Second Century Growth Deferred
   Compensation Plan
c/o Piper Jaffray Ventures
222 South Ninth Street
Minneapolis, Minnesota  55402
Facsimile: (612) 342-8514
Attention:  Buzz Benson

Standby Fund 1998
c/o Piper Jaffray Ventures
222 South Ninth Street
Minneapolis, Minnesota  55402
Facsimile: (612) 342-8514
Attention:  Buzz Benson


                                      -16-
<PAGE>   17



                                   SCHEDULE I
                                    (CONT'D)

AMS Investors
c/o Piper Jaffray Ventures
222 South Ninth Street
Minneapolis, Minnesota  55402
Facsimile: (612) 342-8514
Attention:  Buzz Benson

AMS Investors II
c/o Piper Jaffray Ventures
222 South Ninth Street
Minneapolis, Minnesota  55402
Facsimile: (612) 342-8514
Attention:  Buzz Benson

Douglas Kohrs
7432 Hyde Park Drive
Edina, Minnesota  55429
Facsimile:  (952) 930-6777

Upper Lake Growth Capital LLC
10400 Viking Drive, Suite 530
Eden Prairie, Minnesota  55344
Facsimile:  (612) 995-7499
Attention:  David Stassen

Crane Island Ventures LLC
10400 Viking Drive, Suite 530
Eden Prairie, Minnesota  55344
Facsimile:  (612) 995-7499
Attention:  David Stassen




                                      -17-