<PAGE>
                                                              EXHIBIT 10.7

                            THIRD AMENDMENT TO LEASE

   THIS THIRD AMENDMENT TO LEASE is made this 21 day of March, 1997, 
between DAVID D. BOHANNON ORGANIZATION, a California corporation, herein 
referred to as "Landlord", and PERCLOSE, INC., a Delaware corporation, herein 
referred to as "Tenant".

                                   RECITALS

   1. Landlord and Tenant's predecessor in interest have previously entered 
into a Lease entitled "Business Park Lease" dated July 6, 1993 for demised 
premises located at 195-199 Jefferson Drive, Menlo Park, California, as more 
particularly described in said Lease.

   2. Landlord and Tenant's predecessor in interest have previously entered 
into a First Amendment to Lease dated January 31, 1995, which First Amendment 
to Lease demised to Tenant certain additional space located at 191 and 193 
Jefferson Drive as more fully set out therein.

   3. Tenant acquired its interest in the Lease as a result of the 
reincorporation of Perclose, Inc., a California corporation, to Perclose, 
Inc., a Delaware corporation, on or about September 1, 1995.

   4. Landlord and Tenant have previously entered into a Second Amendment to 
Lease date September 10, 1996 (the Lease, as amended, is herein referred to 
as the "Lease"), which Second Amendment to Lease demised to Tenant certain 
additional space located at 177 Jefferson Drive, Menlo Park, California, as 
more fully set out therein.

   5. Landlord and Tenant now wish to provide for the expansion of Tenant 
into additional space located at 171 Jefferson Drive and 175 Jefferson Drive, 
Menlo Park, California, and to amend the base rent due under the Lease, the 
Security Deposit held pursuant to the Lease, and otherwise modify the Lease, 
all as more particularly set forth hereinbelow.

   NOW, THEREFORE, in consideration of the covenants and conditions contained 
herein, Landlord and Tenant agree to amend the Lease as follows:

   1. A Landlord hereby leases to Tenant and Tenant hereby leases from 
Landlord the demised premises located at 171 Jefferson Drive (hereinafter, 
"171 Expansion Space") as described in EXHIBIT "X" and shown on EXHIBIT "X-1" 
hereto for a term commencing on February 1, 1997 (the date Landlord delivered 
possession of the 171 Expansion Space to Tenant in an "as is" condition), and 
continuing through and including February 29, 1999. Base rent for the 171 
Expansion Space shall be as set forth in paragraph 1.B. hereof. Effective 
February 1, 1997, the 171 Expansion Space shall become part of the demised 
premises under the Lease for all purposes set forth therein.

                                      1


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      B. Commencing on February 1, 1997, Tenant's base rent under the Lease 
shall increase by Forty Eight Thousand Two Hundred Ten Dollars ($48,210.00) 
per annum, payable in twelve (12) equal monthly installments of Four Thousand 
Seventeen and 50/100 Dollars ($4,017.50).

   2. A. Landlord hereby leases to Tenant and Tenant hereby leases from 
Landlord the demised premises located at 175 Jefferson Drive (hereinafter, 
"175 Expansion Space") as described in EXHIBIT "Y" and shown on EXHIBIT "Y-1" 
hereto for a term commencing on the EARLIER to occur of: (i) delivery of 
possession of the 175 Expansion Space to Tenant after Landlord's work for 
such 175 Expansion Space is completed pursuant to paragraph 6.B. hereinbelow, 
or (ii) July 1, 1997 (the "175 Expansion Space Commencement Date"), and 
continuing through and including June 30, 1999. Base rent for the 175 
Expansion Space shall be as set forth in paragraph 2.B. hereof. Upon the 175 
Expansion Space Commencement Date, the 175 Expansion Space shall become part 
of the demised premises under the Lease for all purposes set forth herein.

      B. Commencing on the 175 Expansion Space Commencement Date, Tenant's 
base rent under the Lease shall increase by Sixty Thousand Dollars 
($60,000.00) per annum, payable in twelve (12) equal monthly installments of 
Five Thousand Dollars ($5,000.00).

   3. The increase in base rent scheduled to occur as of October 1, 1997 with 
respect to certain premises demised to Tenant under the Lease (i.e., the 
191-199 Jefferson Drive premises) shall not apply to the base rent reserved 
hereunder for the 171 Expansion Space nor for the 175 Expansion Space which 
will remain the same throughout the demised term thereof.

   4. Upon execution of this Third Amendment to Lease, Tenant shall pay to 
Landlord the amount of Nine Thousand Seventeen and 50/100 Dollars ($9,017.50) 
which shall be held as a Security Deposit pursuant to the terms of SECTION 
19.9. of the Lease. Upon payment of said amount to Landlord, Tenant's total 
Security Deposit held pursuant to the Lease, as amended herein, shall be 
Twenty Thousand Six Hundred Fifty Seven and 50/100 Dollars ($20,657.50).

   5. The option to extend the demised term of the Lease contained in SECTION 
1.3. of the Lease shall apply to the entire demised premises leased by Tenant 
(including the 171 Expansion Space and the 175 Expansion Space) pursuant to 
the Lease, as amended herein, and the parties agree to the following with 
respect thereto:

      A. In the event Tenant exercises its option to extend the demised term 
of the Lease, the dates of the extended term shall be as follows: (i) for the 
demised premises located at 195-199 Jefferson Drive, 191 and 193 Jefferson 
Drive, and 177 Jefferson Drive (the "177, 191-199 Jefferson Premises"), from 
October 1, 1998, to and including September 30, 2001; (ii) for the 171 
Expansion Space (i.e., 171 Jefferson Drive), from March 1, 1999, to and 
including February 28, 2002; and (iii) for the 175 Expansion Space (i.e., 175 
Jefferson Drive), from July 1, 1999, to and including June 30, 2002.

                                      2

<PAGE>


      B. The base rent during the extended term shall be established pursuant 
to SECTIONS 1.3, 2.3 AND 19.20 (if applicable) of the Lease, and shall 
commence as of the applicable commencement dates of the extended term (i.e., 
October 1, 1998, for the 177, 191-199 Jefferson Premises; March 1, 1999, for 
the 171 Expansion Space; and July 1, 1999 for the 175 Expansion Space). The 
"fair market rental value" defined in SECTION 2.3 of the Lease shall also 
include the value associated with the Tenant Improvements made by Landlord in 
the 171 Expansion Space, as provided hereinbelow, as well as all other 
improvements made to the 171 Expansion Space and 175 Expansion Space.

      C. Should Tenant elect to exercise the option to extend, Tenant's 
written notice to Landlord shall be given at least one hundred eighty (180) 
days before September 30, 1998, with respect to the entire demised premises, 
including the 171 Expansion Space and the 175 Expansion Space.

      D. The option to extend the demised term can only be exercised by 
Perclose, Inc., a Delaware corporation, for its use of the entire demised 
premises and may not be transferred to any assignee, sublessee or other 
successor in interest nor may it be exercised by Perclose, Inc., a Delaware 
corporation, for any such assignee, sublessee or other successor in interest.

   6. A. Subject to the provisions hereof, Landlord shall provide certain 
leasehold improvements ("Tenant Improvements") to be made to the 171 
Expansion Space in accordance with the plans and specifications dated 
December 26, 1996, for the Tenant Improvements (the "Plans") prepared by 
Stevens Design (the "Architect"). Once approved by Landlord and Tenant the 
Plans shall be made a part hereof as EXHIBIT C. Landlord's and Tenant's 
approval of the Plans shall not be unreasonably withheld. The actual cost of 
the Tenant Improvements made pursuant to the Plans shall be borne by Landlord.

   Immediately following approval of the Plans, Landlord shall apply for all 
requisite building permits and approvals for construction of the Tenant 
Improvements in accordance with the Plans. On or about June 1, 1997, subject 
to the provisions hereof, Landlord shall cause a contractor ("Contractor") 
selected by Landlord to commence construction of the Tenant Improvements and 
diligently prosecute the same to completion in a good and workmanlike manner 
in accordance with the Plans.

   Tenant shall have the right to make changes in the Plans on or before 
April 30, 1997, provided such changes are approved by Landlord, such approval 
not to be unreasonably withheld or delayed, and provided further that the 
increased construction costs for any and all changes to the approved Plans 
shall be borne by Tenant. Tenant shall pay to Landlord the aggregate net 
increase in cost for such changes within five (5) days after substantial 
completion of the Tenant Improvements. Any such change(s) may be made only in 
a writing approved and signed by Landlord. As used herein the cost of 
providing the changes to the Plans shall include all soft costs, including 
reasonable fees, architect's fees, fees for permits, consulting engineer 
fees, contractor fees, inspection fees, fees for testing services and fees 
for processing and completing changes to the Plans, in addition to actual 
hard costs of construction.

                                      3


<PAGE>

   Landlord and Tenant agree that construction of the Tenant Improvements is 
anticipated to commence on or about June 1, 1997, and is anticipated to be 
substantially completed on or about July 1, 1997. The parties agree to the 
following: (i) the Plans shall be approved by Landlord and Tenant on or 
before May 1, 1997, to allow for the timely issuance of building permits and 
approvals; (ii) Tenant, its employees, agents, contractors and 
representatives, shall vacate the entire 171 Expansion Space before June 1, 
1997 (or such later date as advised by Landlord to Tenant if commencement of 
construction of the Tenant Improvements is delayed due to a delay in 
obtaining building permits or approvals), to allow the Contractor to commence 
to construct the Tenant Improvements and shall remain vacated until 
substantial completion of the Tenant Improvements; (iii) the applicable 
portion of Tenant's base rent for the 171 Expansion Space (i.e., the amount 
of $4,017.50) shall abate during the thirty (30) day period during which the 
Tenant Improvements are being constructed, and the parties agree that in no 
event shall the abatement of said portion of base rent be extended beyond 
thirty (30) days; and (iv) upon notice from Landlord to Tenant of the 
substantial completion of such work as certified by the Architect, Tenant 
shall accept the 171 Expansion Space in an "as is" condition subject to the 
punch list items described in the following sentence. Tenant shall, within 
thirty (30) days of certification by Architect that the Tenant Improvements 
are substantially complete, notify Landlord and Contractor of any items of 
work that are defective or incomplete. Landlord shall thereafter diligently 
pursue on Tenant's behalf the correction or completion of said items.

      B. In addition to the Tenant Improvements to be made to the 171 
Expansion Space in accordance with the Plans, Landlord shall, at Landlord's 
expense, cause the Contractor to provide and install a fire sprinkler system 
in the 171 Expansion Space and 175 Expansion Space.

      C. Any additional work to be performed in the 171 Expansion Space and 
175 Expansion Space other than that provided for hereinabove and designated 
as Landlord's work shall be performed at the sole cost of Tenant in 
accordance with detailed plans and specifications therefor which must be 
approved, in writing, by Landlord or Landlord's Architect before work is 
commenced. Tenant shall furnish Landlord with a set of "as built" plans after 
any such work is completed.


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<PAGE>

   7. Except as herein modified, the terms of the Lease are and shall remain 
the same.

   IN WITNESS WHEREOF, the parties have executed this Third Amendment to 
Lease as of the date first hereinabove written.


TENANT:                                  LANDLORD:

PERCLOSE, INC.,                          DAVID D. BOHANNON ORGANIZATION,
a Delaware corporation                   a California corporation



By: /s/ Hank Plain                       By:  /s/ Robert J. Webster
   ----------------------------------        ---------------------------------
           Vice President                           Vice President


By: /s/ Kenneth E. Ludlum                By:  /s/ Ernest Lotti, Jr.
   ----------------------------------        ---------------------------------
            Secretary                              Assistant Secretary



                                      5
<PAGE>

                             EXHIBIT "X"

                      BOHANNON INDUSTRIAL PARK

                        171 JEFFERSON DRIVE
                      MENLO PARK, CALIFORNIA

                   DESCRIPTION OF DEMISED PREMISES

                                FOR

                             "PERCLOSE"


     All that certain real property situate in the State of California, 
Country of San Mateo, City of Menlo Park and is described as follows:

     A portion of Parcel 2, as said parcel is designated on the map entitled 
"PARCEL MAP, BEING A RESUBDIVISION OF PARCEL 2 OF P.M. REC. IN VOLUME 27 AT 
PAGE 39 AND PARCELS 2 AND 3 OF P.M. RECORDED IN VOLUME 28 AT PAGE 8, SAN 
MATEO COUNTY RECORDS BOHANNON INDUSTRIAL PARK, MENLO PARK, SAN MATEO COUNTY, 
CALIFORNIA," which map was filed in the Office of the Recorded of the County 
of San Mateo, State of California on January 12, 1976 in Volume 30 of Parcel 
Maps at Page 20, more particularly described as follows:

     Commencing at the most westerly corner of said Parcel 2, from which 
corner the point of beginning of the demised premises bears South 67 DEG. 17'
East 51.00 feet and North 22 DEG. 43' East 56.00 feet; Thence from said 
point of beginning North 22 DEG. 43' East 100.00 feet; Thence South 
67 DEG. 17' East 40.00 feet; Thence South 22 DEG. 43' West 40.00 feet; 
Thence North 67 DEG. 17' West 13.10 feet; Thence South 22 DEG. 43' West 
60.00 feet; Thence North 67 DEG. 17' West 26.90 feet to the point of 
beginning.

     Containing approximately 3,214 SQUARE FEET, more of less.


Jan. 14, 1997

<PAGE>

                          [FLOOR PLAN]

                        JEFFERSON DRIVE


                                                              EXHIBIT "X-1"


<PAGE>


                                   EXHIBIT "Y"

                             BOHANNON INDUSTRIAL PARK

                               175 JEFFERSON DRIVE
                              MENLO PARK, CALIFORNIA

                           DESCRIPTION OF DEMISED PREMISES

                                        FOR

                                    "PERCLOSE"


     All that certain real property situate in the State of 
California, County of San Mateo, City of Menlo Park and is described as 
follows:

     A portion of Parcel 2, as said parcel is designated on the map entitled 
"PARCEL MAP, BEING A RESUBDIVISION OF PARCEL 2 OF P.M. REC. IN VOLUME 
27 AT PAGE 39 AND PARCELS 2 AND 3 OF P.M. RECORDED IN VOLUME 28 AT 
PAGE 8, SAN MATEO COUNTY RECORDS BOHANNON INDUSTRIAL PARK, MENLO PARK, SAN 
MATEO COUNTY, CALIFORNIA," which map was filed in the Office of the Recorded 
of the County of San Mateo, State of California on January 12, 1976 in 
Volume 30 of Parcel Maps at Page 20, more particularly described as 
follows:

     Commencing at the most westerly corner of said Parcel 2, from which 
corner the point of beginning of the demised premises bears South 67 DEG. 17'
East 51.00 feet, North 22 DEG. 43' East 56.00 feet and South 67 DEG. 17' 
East 80.00 feet; Thence from said point of beginning North 22 DEG. 43' East 
100.00 feet; Thence South 67 DEG. 17' East 40.00 feet; South 22 DEG. 43' 
West 100.00 feet; Thence North 67 DEG. 17' West 40.00 feet to the point of 
beginning.

     Containing approximately 4,000 SQUARE FEET, more or less.

March 13, 1997

<PAGE>

                         [FLOOR PLAN]

                        JEFFERSON DRIVE


                                                              EXHIBIT "Y-1"