BRANDED PRODUCTS AGREEMENT

E XHIBIT 10.5

PHYSICIANPLUS ^™ AGREEMENT

(Branded Products)

This PHYSICIAN PLUS AGREEMENT (“Agreement”), effective August 15, 2004 (“Effective Date”), is between Hemosense, Inc., a California corporation with its principal offices located at 651 River Oaks Parkway, San Jose, California 95134, hereinafter called “SUPPLIER,” and Cardinal Health 200, Inc., a Delaware Corporation that is the Medical Products and Services Group of Cardinal Health, with offices located at 1450 Waukegan Road, McGaw Park, Illinois 60085, hereinafter called “DISTRIBUTOR.”

BACKGROUND

DISTRIBUTOR works with its physician customers to provide a broad product offering while helping those customers make the best possible product choices to maximize their supply budget dollars. This broad product offering contains, among other products, PhysicianPlus ^™ products. Distributor’s intent is, through its strategic program called the PhysicianPlus ^™ Program, to encourage its physician customers’ conversion to Distributor’s portfolio of PhysicianPlus products.

SUPPLIER desires to have certain of its products (specifically, the “Products” as defined in Section 1 below) included in the PhysicianPlus Program and DISTRIBUTOR is willing to include the Products in such program subject to the terms and conditions of this Agreement.

SUPPLIER and DISTRIBUTOR agree as follows:

1. Products Covered by this Agreement; Exclusivity.

The products covered by this Agreement are those products listed on Schedule “A” (the “Products”). Products may be added to or deleted from this Agreement by mutual consent of the parties. SUPPLIER hereby appoints DISTRIBUTOR as, and DISTRIBUTOR hereby accepts such appointment as, the exclusive distributor of the Products for physician offices, clinics and surgery centers in the United States (the “Customers”). SUPPLIER shall have the right, upon written notice to DISTRIBUTOR, to terminate this Agreement in the event DISTRIBUTOR fails to achieve the quarterly order volume targets as listed in Schedule “B” (the “Minimums”) and fails to cure such failure by placing a purchase order for Products an amount necessary to reach such Minimums within 30 days after written notice from SUPPLIER.

For so long as DISTRIBUTOR continues to achieve the Minimums, SUPPLIER shall not appoint any other person or entity to distribute the Products (or any products with the same specifications as the Products) to the Customers. SUPPLIER shall notify DISTRIBUTOR in the event SUPPLIER elects to exercise its rights to appoint any other distributors as permitted in the preceding sentence. Notwithstanding anything to the contrary above, SUPPLIER may, in its sole discretion, (i) solicit orders directly from and distribute Products directly to Customers without violating SUPPLIER’s exclusivity obligation described above (it being understood that SUPPLIER shall use commercially reasonable efforts to refer all inquiries from Customers regarding the purchase of Products to DISTRIBUTOR), and (ii) solicit orders and distribute Products to Customers through Quality Assured Services without violating SUPPLIER’s exclusivity obligation described above provided Quality Assured Services is not currently, and is not for so long as DISTRIBUTOR continues to achieve the Minimums set forth in this Agreement, authorized to resell the Products through other distributors and SUPPLIER uses best efforts to enforce its contractual rights against Quality Assurance Services as they relate to unauthorized distribution of Products.

The parties also acknowledge that as of the Effective Date, SUPPLIER has appointed a third-party distributor for the skilled nursing-care facility and extended-care markets. If that distribution agreement is terminated, the parties shall, upon Distributor’s request, discuss the possibility of extending the scope of Distributor’s exclusivity under this Agreement to cover such markets; provided that in any such case extension of Distributor’s exclusivity would require an increase in the Minimums described above.

2. Distributor’s Duties:

DISTRIBUTOR agrees that, during the term of this Agreement, the Products shall be included in the PhysicianPlus Program; as such program may be amended from time to time by DISTRIBUTOR in its sole

discretion (provided that such amendments shall in all cases be subject to the limitations of this Agreement). With regard to the PhysicianPlus Program, DISTRIBUTOR agrees to: (i) position the Products to its physician and clinic customers as PhysicianPlus products; (ii) provide financial incentives to its sales force to sell the Products to Distributor’s physician customers; (iii) provide focus on the development of marketing tools and promotions relating to the Products; (iv) assist and actively cooperate with SUPPLIER in complementary physician customer-focused promotional activities with regard to the Products; (v) provide access, when appropriate, to Distributor’s senior management, regional presidents and sales staff to facilitate the meeting of mutual objectives; (vi) maintain such inventory levels of Products as, DISTRIBUTOR in its sole discretion, deems necessary to meet customary demand; and (vii) provide SUPPLIER with a rolling 12-month non binding forecast of anticipated purchases updated quarterly. For purposes of this Agreement, the determination of whether a particular facility is classified a “physician” customer shall generally be based upon the “bill-to” location for that customer. Notwithstanding the foregoing, SUPPLIER acknowledges that DISTRIBUTOR reserves the right to classify facilities within integrated delivery networks or particular group purchasing organizations as an “acute”, “non-acute” or “physician” customer based upon the overall composition and purchasing characteristics of such networks or groups. DISTRIBUTOR agrees that, for so long as SUPPLIER has not exercised its rights to appoint additional distributors pursuant to the first sentence of the second paragraph of Section 1 and SUPPLIER has complied with requirements of the scope of the exceptions with regard to DISTRIBUTOR’s exclusive distribution rights as set forth in the remainder of that paragraph, DISTRIBUTOR will not sell or promote any third-party point-of-care anti-coagulation products during the term of this Agreement other than any such products sold to DISTRIBUTOR by vendors who were selling these types of products to DISTRIBUTOR as of the Effective Date. SUPPLIER acknowledges and agrees that (i) except as described above, DISTRIBUTOR is not prohibited from using, selling or promoting products which are competitive with the Products and (ii) DISTRIBUTOR has no minimum purchase obligations under this Agreement, provided that DISTRIBUTOR acknowledges that its failure to achieve the Minimums and to cure such failure will give SUPPLIER the right to terminate this Agreement as described in Section 1 above.

3. Term . The term of this Agreement shall begin on the Effective Date and shall continue for three (3) years, or until earlier terminated in accordance with the provisions of Section 6 below. At the end of the term, the parties may renew the Agreement for successive one (1) year terms on mutual written agreement.

4. Pricing and Payment Terms.

a. The prices for Products ordered by the DISTRIBUTOR shall be as set forth on Schedule A. All such prices shall remain firm until [***]. Shall a price change be incurred, SUPPLIER agrees to give DISTRIBUTOR 90 days of notification, and incorporate such price changes at the start of the calendar year. Notwithstanding anything to the contrary set forth herein or in any other agreement between SUPPLIER and DISTRIBUTOR: (i) payments are due net 30 days from the date of DISTRIBUTOR’s receipt of Product, (ii) for payments received within 30 days from the date of DISTRIBUTOR’s receipt of Product, DISTRIBUTOR shall receive a [***]% discount on such payment; provided that, upon SUPPLIER’s implementation of EDI transaction #810, such discount shall only apply where payments are received within 10 days of the date of DISTRIBUTOR’s receipt of Product; (iv) SUPPLIER shipments to DISTRIBUTOR’s locations in the U.S. will be FOB Destination, transportation expenses included, and (v) to the extent SUPPLIER agrees in its discretion to expedite Product shipments, (including through Direct (Drop) shipments to DISTRIBUTOR’s customers) shipment by SUPPLIER must be F.O.B. Destination, with shipment Prepaid by SUPPLIER and added to the invoice to DISTRIBUTOR.

b. DISTRIBUTOR and SUPPLIER agree to work together in good faith to review the opportunity of utilizing DISTRIBUTOR’s third-party logistics freight program pursuant to terms to be mutually agreed upon.

c. Distributor shall deduct an administrative fee of [***]% at the time of invoice payment to cover the costs of trace sales reports, the rebate process, contract administration, master merchandise file costs and other costs to assist with ongoing administration and support of the program

d. SUPPLIER agrees to the following process with regard to rebates: DISTRIBUTOR uses an auto-debit system where rebate dollars are automatically deducted from a supplier’s payables balance upon the sale to the end-user customer. Rebate dollars are accumulated until a specified time period (usually one month) and then the deduction is made. A remittance advice will follow showing which deductions have been made.

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e. As additional consideration for Distributor’s agreement to include the Products in the PhysicianPlus Program in accordance with the terms and conditions of this Agreement, SUPPLIER shall pay DISTRIBUTOR an annual volume growth incentive in the event Distributor’s purchases of Products (valued at the acquisition cost provided to DISTRIBUTOR hereunder) in any 12-month period following the Effective Date meet or exceed the following hurdles:

Any volume growth incentive earned by DISTRIBUTOR will be paid in the form of a check within 30 days after the close of the applicable 12-month period. If this agreement is terminated prior to the expiration date, any earned growth incentives for the final consecutive twelve-month period, if any, will be prorated for the number of months this agreement was in effect during such final twelve-month period.

5. Supplier’s Duties. SUPPLIER shall:

a. Maintain silver status on Distributor’s Supply Chain Management Scoreboard, as set forth on Attachment 1 to this Agreement (attached and incorporated into this Agreement) (the “Scoreboard”).

b. Provide DISTRIBUTOR, free of charge, with reasonable quantities of available materials which would aid in the promotion and sale of the Products.

c. On or before the Effective Date, provide to DISTRIBUTOR, electronically via Excel or Access or such other format as the parties shall agree, such competitive cross referencing information with regard to the Products as DISTRIBUTOR shall reasonably request and, thereafter, update such information no less frequently than quarterly.

d. Attend Distributor’s Annual National Sales Meeting at the then-current PhysicianPlus supplier rate.

e. Collaborate with DISTRIBUTOR to review its various businesses and determine other market segment opportunities for the Products.

f. Provide various promotional opportunities for DISTRIBUTOR and its sales force, including without limitation, the “[***]” promotion, at times mutually agreed upon between the parties.

g. Make any claims for unpaid invoices in writing within ninety (90) days of the date of SUPPLIER’s first invoice for such amount. DISTRIBUTOR will not be obligated to make payments for, or investigate, entries which are dated more than ninety (90) days before SUPPLIER’s written claim or request for investigation.

h. On a [***] basis, use commercially reasonable efforts, in conjunction with DISTRIBUTOR, to [***]. Excess/no move inventory is any inventory of Products in a given distribution center that exceeds [***] ([***]) months of customer demand for that distribution center. “Salable” Product is defined as undamaged Product in its original sealed shipping carton.

i. Not impose any item or order minimums inconsistent with SUPPLIER’s standard terms and conditions of sale.

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j. Use commercially reasonable efforts to maintain [***]% Fill Rate (defined below) on all orders for Products. Fill Rate is defined as complete line items shipped within [***] hours of receipt of DISTRIBUTOR’s purchase order.

k. In addition to any electronic data interchange (EDI) transactions which are required under DISTRIBUTORR