<PAGE>

                                                                     EXHIBIT 4.3
                                                                     -----------
                    CardioDynamics International Corporation
                       6175 Nancy Ridge Drive, Suite 300
                              San Diego, CA 92121

                                 July 18, 2001



The Allen E. Paulson Living Trust
c/o Paulson Enterprises
P.O. Box 9660
Rancho Santa Fe, California 92067
Attention:  J. Michael Paulson and Edward White

Ladies and Gentlemen:

Reference is made to a certain Securities Purchase Agreement dated as July 19,
2001 (the "Purchase Agreement"), pursuant to which the Trust has agreed to sell
(the "Sale") up to one million five hundred thousand (1,500,000) shares of
CardioDynamics International Corporation (the "Company") Common Stock (the
"Shares") to Pine Ridge Financial Inc. (the "Purchasers").

As contemplated by the Purchase Agreement, the Company will enter into a
Registration Rights Agreement dated as of July 19, 2001 (the "Rights Agreement")
with the Purchasers, whereby the Company will agree to register the Shares for
resale and keep such registration statement effective for a period of two (2)
years, as more fully described in the Rights Agreement.  The Company hereby
agrees to use its best efforts to cause such registration statement to be
declared effective within 90 days following the Closing Date as such term is
defined in the Purchase Agreement.  The Trust hereby agrees to reimburse the
Company, out of escrow established in connection with the Purchase Agreement,
for all of the Company's expenses (up to a maximum of $25,000 in the aggregate)
that the Company incurs in connection with any registration, qualification and
compliance requested pursuant to the Rights Agreement, including without
limitation, all filing, registration and qualification, and accounting fees and
the fees and disbursements of its counsel.

Further, as compensation for (i) our introduction of the Purchasers to the
Trust, (ii) fees and expenses we incurred in connection with such introduction,
and (iii) the otherwise unreimbursed fees and expenses related to the
registration of the Shares as well as the devotion of management time to and
opportunity cost associated with preparation and review of the documents
associated with the Sale and the registration and qualification of the Shares,
the Trust hereby agrees to pay to the Company, in cash at the time of the
Settlement Date of the Sale as set forth in the Purchase Agreement, a fee equal
to three and one-half percent (3  1/2 %) of the gross purchase price paid by the
Purchasers for the Shares.  The Company shall refund the foregoing fee to the
Trust in the event that the Trust is required to repurchase the Shares and does
so repurchase such Shares from the Purchaser because the registration statement
that the Company has agreed to file with respect to the Shares has not been
declared effective within 90 days following the Closing Date.
<PAGE>

Please execute and return this letter agreement (which may be executed in
counterparts) to the undersigned to concur that (i) this sets forth the Trust's
complete and entire understanding with regards to the subjects described within,
and (ii) that this letter agreement may not be amended or modified except in a
writing executed on behalf of both the Company and the Trust.  By execution
hereof, we both further agree that this letter agreement is to be governed by
and construed in accordance with the laws of the State of California, as applied
to contracts among California residents, made and to be performed entirely
within the State of California.

                                    CardioDynamics International Corporation
                                    a California corporation

                                    By:  /s/Michael K. Perry
                                       --------------------------------
                                        Name:  Michael K. Perry
                                        Title:  Chief Executive Officer

Accepted and agreed as of July 19, 2001:
The Allen E. Paulson Living Trust


By:  /s/ J. Michael Paulson
   ---------------------------------------
    Name:  J. Michael Paulson, Co-Trustee


By:  /s/ Edward White
   ---------------------------------------
    Name:  Edward White, Co-Trustee