3rd Lease Modification & Extension Agreement

EXHIBIT 10.3

THIRD LEASE MODIFICATION AND EXTENSION AGREEMENT

     THIS THIRD LEASE MODIFICATION AND EXTENSION AGREEMENT (this “Agreement”) is made and entered into as of the 26^th day of January, 2005, by and between AMB PROPERTY, L.P., a Delaware limited partnership (the “Lessor”) and MEDWAVE, INC., a Delaware corporation (the “Lessee”);

WITNESSETH:

     WHEREAS, Lessor; the successor in title to Round Lake LLC, and Lessee are the parties to that certain Office/Warehouse Lease dated April 10, 1997, as amended by that certain Lease Modification and Extension Agreement dated March 29, 2002 and that certain Second Lease Modification and Extension Agreement dated April 12, 2004 (collectively, the “Lease”), wherein Lessor leased to Lessee and Lessee leased from Lessor that certain premises containing approximately 5,964 square feet, commonly known as 4382-84 Round Lake Boulevard, Arden Hills, Minnesota and designated as Bays 5 and 6, which premises is more particularly depicted on the site plan attached hereto as Exhibit A (the “Original Premises”); and

     WHEREAS, in addition to extending the term of the Lease, Lessor desires to lease to Lessee and Lessee desires to lease from Lessor, both the Original Premises and that certain premises adjacent to the Original Premises containing 7,073 square feet designated as Bays 7 and 8 and depicted on attached Exhibit A (the “Expansion Area”).

     NOW, THEREFORE, in consideration of the above and the mutual promises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each of the parties hereto, the parties agree as follows:

Extension. The Term of the Lease is hereby extended for a period of three (3) years commencing June 1, 2007 and ending on June 30, 2010 (the “Extended Term”).

Expansion/Improvements.

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Base Rent, Operating Expenses and Utilities.

Broker. Lessee and Lessor cash represent and warrant to the other that it has dealt with no broker, agent or other person its connection with this transaction other then CB Richard Ellis (the “Broker”) or that no broker, agent or other person other than the Broker brought about this transaction, other than as may be referenced in a separate written agreement executed by such party, and delivered to the other party, and each party agrees to indemnify and hold the other harmless from and against any claims by any other broker, agent or other person other than the Broker claiming a commission or other form of compensation by virtue of having dealt with such party with regard to this leasing transaction. Lessor agrees to pay the leasing commission of the Broker payable in connection with this transaction.

Estoppel/Acknowledgements of Lessee.

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Miscellaneous.

     IN WITNESS WHEREOF, Lessor and Lessee have each caused this Agreement to be executed as of the date first above written.

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