Document:

<PAGE>

                                                                    EXHIBIT 10.3

                      NON-QUALIFIED STOCK OPTION AGREEMENT
                           FOR NON-EMPLOYEE DIRECTORS

                               UNDER MEDWAVE, INC.
                   2004 AMENDED AND RESTATED STOCK OPTION PLAN

Name of Optionee:
No. of Shares:
Option Exercise Price per Share:

Grant Date:
Expiration Date:

      Pursuant to Medwave, Inc. 2004 Amended and Restated Stock Option Plan (the
"Plan") as amended through the date hereof, Medwave, Inc. (the "Company") hereby
grants to the Optionee named above an option (the "Option") to purchase on or
prior to the Expiration Date specified above all or part of the number of shares
of common stock, no par value (the "Common Stock") of the Company specified
above at the Option Exercise Price per Share specified above subject to the
terms and conditions set forth herein and in the Plan.

      1.    Exercisability.

            (a) Exercisability Schedule. No portion of this Option may be
exercised until such portion shall have become exercisable. Except as set forth
below, and subject to the discretion of the Committee (as defined in Article 3
of the Plan) to accelerate the exercisability schedule hereunder, this Option
shall be exercisable with respect to the following number of Shares on the dates
indicated:

<TABLE>
<CAPTION>
Number of Shares Exercisable             Exercisability Date
----------------------------             -------------------
<S>                                      <C>
(25%)
(25%)
(25%)
(25%)
</TABLE>

Once exercisable, this Option shall continue to be exercisable at any time or
times prior to the close of business on the Expiration Date, subject to the
provisions hereof and of the Plan.

            (b) Vesting Upon Change of Control. Notwithstanding anything herein
to the contrary, this Option shall become fully vested and exercisable
immediately prior to a change of control, subject to the change of control
actually occurring.

      2.    Manner of Exercise.

            (a) An Option may be exercised by an Optionee in whole or in part
from time to time on or prior to the Expiration Date of this Option, by
delivery, in person or through certified or registered mail, of written notice
of exercise to the Company at its principal executive office (Attention:
Secretary). This notice shall specify the particular Option (or portion thereof)
that is being exercised and the number of Shares with respect to which the
Option is being exercised.

Payment of the purchase price for the Shares may be made by one or more of the
following methods: (i) in cash, by certified or bank check or other instrument
acceptable to the Committee; (ii) through the delivery (or attestation to the
ownership) of shares of Common Stock that have been previously purchased by the
Optionee and have been beneficially owned by the Optionee for at least six
months (or for such other period of time as may be required by generally
exercised accounting principles), and are not then subject to any restrictions
under any Company plan; or (iii) a combination of (i) and (ii) above. Payment
instruments, if permitted by the Committee in its sole discretion, will be
received subject to collection.

                                       64
<PAGE>

The delivery of certificates representing the Shares will be contingent upon the
Company's receipt from the Optionee of full payment for the Shares, as set forth
above and any agreement, statement or other evidence that the Company may
require to satisfy itself that the issuance of Common Stock to be purchased
pursuant to the exercise of Options under the Plan and any subsequent resale of
the shares of Common Stock will be in compliance with applicable laws and
regulations. In the event the Optionee chooses to pay the purchase price by
previously-owned shares of Common Stock through the attestation method, the
number of shares of Common Stock transferred to the Optionee upon the exercise
of the Option shall be net of the shares attested to.

            (b) Certificates for the shares of Common Stock purchased upon
exercise of this Option shall be issued and delivered to the Optionee upon
compliance to the satisfaction of the Committee with all requirements under
applicable laws or regulations in connection with such issuance and with the
requirements hereof and of the Plan. The determination of the Committee as to
such compliance shall be final and binding on the Optionee. The Optionee shall
not be deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Common Stock subject to this Option unless and until
this Option shall have been exercised pursuant to the terms hereof, the Company
shall have issued and delivered the shares to the Optionee, and the Optionee's
name shall have been entered as the stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such shares of Common Stock.

            (c) Notwithstanding any other provision hereof or of the Plan, no
portion of this Option shall be exercisable after the Expiration Date hereof.

      3.    Termination of Service as a Director. If the Optionee's service as a
director of the Company or its Subsidiaries (as defined in the Plan) is
terminated, the period within which to exercise the Option may be subject to
earlier termination as set forth in this Section 3.

            (a) Termination Due to Death. If the Optionee's employment
terminates by reason of death, any Option held by the Optionee shall become
fully exercisable and may thereafter be exercised by the Optionee's legal
representative or legatee for a period of 12 months from the date of death or
until the Expiration Date, if earlier.

            (b) Termination Due to Disability. If the Optionee's employment
terminates by reason of disability (as defined in the Plan), any Option held by
the Optionee shall become fully exercisable and may thereafter be exercised by
the Optionee for a period of 12 months from the date of termination or until the
Expiration Date, if earlier.

            (c) Termination Due to Retirement. If the Optionee's employment
terminates by reason of retirement (as defined in the Plan), any Option held by
the Optionee shall become fully exercisable and may thereafter be exercised by
the Optionee for a period of 3 months from the date of termination or until the
Expiration Date, if earlier.

            (d) Change of Control. This Option shall terminate and be of no
further force or effect upon consummation of a change of control transaction.

            (e) Other Termination. If the Optionee's service as a director
terminates for any reason other than death, disability, retirement or because of
a change of control, and unless otherwise determined by the Committee, any
Option held by the Optionee may be exercised, to the extent exercisable on the
date of termination, for a period of thirty days from the date of termination.
Any Option that is not exercisable at such time shall terminate immediately and
be of no further force or effect.

The Committee's determination of termination date and the reason for termination
of the Optionee's service as a director shall be conclusive and binding on the
Optionee and his or her representatives or legatees.

      4.    Incorporation of Plan. Notwithstanding anything herein to the
contrary, this Option shall be subject to and governed by all the terms and
conditions of the Plan, including the powers of the Committee set forth in
Article 3 of the Plan. Capitalized terms in this Agreement shall have the
meaning specified in the Plan, unless a different meaning is specified herein.

      5.    Transferability. This Agreement is personal to the Optionee, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and

                                       65
<PAGE>

distribution. This Option is exercisable, during the Optionee's lifetime, only
by the Optionee, and thereafter, only by the Optionee's legal representative or
legatee.

      6.    Status of the Stock Option. This Option does not qualify as an
"incentive stock option," and shall be a Nonstatutory Stock Option (as defined
in the Plan).

      7.    Tax Withholding. The Optionee shall, not later than the date as of
which the exercise of this Option becomes a taxable event for Federal income tax
purposes, pay to the Company or make arrangements satisfactory to the Committee
for payment of any Federal, state, and local taxes required by law to be
withheld on account of such taxable event.

The Company shall be entitled to (i) withhold and deduct from future wages of
the Optionee (to the extent permitted by any applicable law), or make other
arrangements for the collection of, all legally required amounts necessary to
satisfy any and all withholding taxes, or (ii) require the Optionee promptly to
remit the amount of such withholding to the Company before acting on the
Optionee's notice of exercise of the Option.

The Committee may, in its sole discretion, permit the Optionee to have the
minimum required tax withholding obligation satisfied, in whole or in part, by
(i) authorizing the Company to withhold from shares of Common Stock to be
issued, or (ii) transferring to the Company, a number of shares of Common Stock
with an aggregate Fair Market Value that would satisfy the withholding amount
due; provided, that these shares of Common Stock have been previously purchased
by the Optionee and have been beneficially owned by the Optionee for at least
six months (or for such other period of time as may be required by generally
exercised accounting principles), and are not then subject to any restrictions
under any Company plan.

      8.    Miscellaneous.

            (a) Notice hereunder shall be given to the Company at its principal
place of business, and shall be given to the Optionee at the address set forth
below, or in either case at such other address as one party may subsequently
furnish to the other party in writing.

            (b) This Option does not confer upon the Optionee any rights with
respect to continuance of employment by the Company or any Subsidiary.

                                             MEDWAVE, INC.

                                             By:______________________________
                                                Title:

The foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned.

Dated:______________________________
                                          _____________________________________
                                          Optionee's Signature

                                          Optionee's name and address:

                                          ______________________________________

                                          ______________________________________

                                          ______________________________________

                                       66<PAGE>

                                                                    EXHIBIT 10.9

                SECOND LEASE MODIFICATION AND EXTENSION AGREEMENT

      THIS SECOND LEASE MODIFICATION AND EXTENSION AGREEMENT is made and entered
into this 12th day of April, 2004, by and between AMB PROPERTY, L.P., a Delaware
limited partnership (hereinafter referred to as "Lessor"), and MEDWAVE, INC., a
Minnesota corporation (hereinafter referred to as "Lessee").

WITNESSETH:

      WHEREAS, Lessor and Lessee have entered into a lease agreement dated the
10th day of April, 1997, (hereinafter referred to as "Lease"), and the Lease was
amended on November 30, 1999, and on March 29, 2002, wherein Lessor leased to
Lessee and Lessee rented from Lessor 4382 Round Lake Road West ("Premises")
consisting of approximately 5,964 square feet of net rentable area in the
Building commonly known as Round Lake Business Center;

WHEREAS, the Term of the Lease as set forth in the Lease was to expire May 31,
2004; and

      WHEREAS, at the special insistence and request of Lessee, Lessor has
agreed to extend the Term of the Lease, and make such other amendments to the
Lease as provided below.

      NOW, THEREFORE, in consideration of the mutual promises of the parties
hereto and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Lease shall be amended as follows:

      1.    Recitals. The above recitals shall constitute an integral pact of
            this Amendment.

      2.    Capitalized Terms. Capitalized terms set forth in this Amendment
            shall have the same meaning as in the Lease, unless specifically
            modified and amended herein.

      3.    Term of Lease. The Term of the Lease shall be extended for an
            additional three (3) years commencing June 1, 2004, and terminating
            May 31, 2007, unless earlier terminated, as provided in the Lease
            (the "Extended Term").

      4.    Monthly Base Rent. During the Extended Term, Lessee shall pay to
            Lessor as Monthly Base Rent on or before the fret day of each month
            per the terms and conditions set forth in the Lease as follows:

            (a)   June 1, 2004, through May 31, 2005: Two Thousand Eight Hundred
                  Fifty-Seven and 75/100 Dollars ($2,857.75).

            (b)   June 1, 2005, through May 31, 2006: Two Thousand Nine Hundred
                  Thirty-Two and 30/100 Dollars ($2,932.30).

            (c)   June 1, 2006, through May 31, 2007: Two Thousand Nine Hundred
                  Seventy-Two and 06/100 Dollars ($2,972.06).

      5.    Tenant Improvements: Lessor shall, at Lessor's expense, replace one
            HVAC unit on the westerly portion of the Premises. The work will be
            performed during regular business hours.

      6.    Notices. All bills, statements or notices of communications which
            Lessor may desire or be required to give to Lessee shall be deemed
            sufficiently given or rendered if in writing and either delivered to
            Lessee personally or sent by registered or certified mail addressed
            to Lessee at the Demised Premises, and at the time of the rendition
            thereof of such notice or communication shall be deemed to be the
            time when the same is delivered to Lessee or deposited in the mail
            as herein

                                       67
<PAGE>

provided. Any notice by Lessee or Lessor must be served by registered or
certified mail addressed to Lessor at the following address:

AMB Property, L.P.                           WITH A COPY TO:
c/o CB Richard Ellis, Inc.                   AMB Property Corporation
770 Minnesota Center                         Asset Manager - Minneapolis
7760 France Avenue South                     60 State Street, Suite 3700
Minneapolis, MN  55435-5852                  Boston, MA  02109

      7.    Headings. Paragraph headings used in this Amendment are for
            convenience only, and shall not affect the construction of this
            Amendment.

      8.    Construction. This Amendment shall be construed under the laws of
            the State of Minnesota. Whenever possible, each provision of this
            Amendment shall be interpreted in such manner as to be effective and
            valid under applicable law. If any term or provision of this
            Amendment shall to any extent be held invalid or unenforceable, the
            remainder shall not be affected thereby, and each other term or
            provision of this Amendment shall be valid and be enforced to the
            fullest extent permitted by law.

      9.    Survival of Other Terms and Conditions. Except as modified herein,
            all other terms and conditions of the Lease shall remain in full
            force and effect, and nothing herein shall be construed to relieve
            either Lessor or Lessee of any obligations as set forth herein.

      10.   Entire Agreement. This Least Modification and Extension Agreement,
            the Lease and Exhibits thereto set forth all covenants, promises,
            agreements, conditions and understandings between Lessor and Lessee
            concerning the Leased Premises. No representations, warranties,
            undertakings or promises, whether oral, implicated, written or
            otherwise, have been made by either party hereto to the other unless
            expressly stated in this Lease Modification and Extension Agreement
            or unless mutually agreed to in writing between the parties hereto
            after the date hereof, and neither party has relied upon any verbal
            representations, agreements, or understandings not expressly set
            forth herein. Except as herein otherwise provided, no subsequent
            alteration, amendment, change or addition to this Lease shall be
            binding upon Lessor or Lessee unless reduced to writing and signed
            by them. All other tears and conditions as stated in the Lease
            remain in full force and effect.

      11.   Option Rights. Any option rights which may have existed under the
            terms of the Lease shall terminate as of the date of the execution
            of this Amendment.

      12.   Submission of Amendment. The submission of this Amendment to Lease
            Agreement for examination does not constitute a reservation of or
            option for the Leased Premises, and this Amendment shall become
            effectively only upon execution and delivery thereof by Lessor and
            Lessee.

                                       68
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written.

LESSEE:                                    LESSOR:

Medwave, Inc.,                             AMB PROPERTY, L.P.,
a Minnesota corporation                    a Delaware limited partnership

                                           By: AMB Property Corporation
                                               a Maryland corporation
                                               Its general partner

By: _________________________________      By: _________________________________

Its: ________________________________      Its:_________________________________

Medwave
Attn:  Tim O'Malley
435 Newbury Street, Suite 206
Danvers, MA  01923

                                       69

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}]]