<PAGE>
 
                                                                   EXHIBIT 10.25

August 2, 1996

Lawrence E. Sturchio
President & Chief Executive Officer
Nutra Quest International, Inc.
17595 Harvard, C-533
Irvine, CA 92714


Re: Revised Proposed Acquisition of Nutra Quest, Incorporated:
--------------------------------------------------------------

Via Fax to (818) 704-7554

Dear Larry:

  This Revised Proposal incorporates the terms and conditions from prior
Proposals, as well as the terms and conditions that were discussed and agreed to
during the meeting held at IMT on Thursday July 25, 1996.  This Revised Proposal
supersedes all Previous Proposals and understandings, written or oral. Upon
signing, this Revised Proposal will become a legally binding agreement between
the parties as to the terms and conditions contained herein, and shall remain so
until such time as it is replaced by a more formal Purchase Agreement (the
"Purchase Agreement").

For the purpose of clarity, in the context of this letter the Parties have
agreed to the use and meaning of the Terms & Definitions listed below:

TERMS & DEFINITIONS:
--------------------
  ORGANIZATIONAL PHASE- AUGUST 1 TO SEPTEMBER 1
     The period of time allotted for NQI to prepare for the start of commercial
     operations.  IMT will provide NQI with $100,000 during this phase.

  START UP PHASE - SEPTEMBER 1 THROUGH NOVEMBER 30, 1996:
  -------------------------------------------------------
     NQI will begin commercial operations on september 1, 1996, providing a full
     30 continuous days is allotted for LES to set up operations, computers,
     phone systems, and the warehouse.  if an extension is required due to the
     leasing of the NQI office/warehouse, the starting phase will be executed
     for the same number of days said set-up is delayed.

     The Start Up Phase will continue until November 30, 1996, or until NQI
     Gross Sales have reached $200,000, which ever comes first. IMT will provide
     NQI with $250,000 during this phase, as follows. $100,000 during September,
     $100,000 during October, and $75,000 during November.  Portions may be
     advanced, within reason to the previous month if LES deems it necessary.
     the detailed Use of Proceeds called for $75,000 the fourth month (Nov),
     $50,000 the fifth month (Dec), and $25,000 the sixth
August 2, 1996
<PAGE>
 
Lawrence E. Sturchio
Nutra Quest International, Inc.
PAGE 2 OF 9

     month(Jan), I'd like to stay with that plan.

  OPERATIONAL PHASE . BEGINS ON DECEMBER 1, 1996:
  -----------------------------------------------

     The period NQI is fully operational. This period is expected to continue as
     long as NQI remains successful.  IMT will continue to fund NQI @ $ 25,000
     for January and February.  Plus additional funding necessary for growth up
     to $1 million in stages, as the infrastructure can handle growth.

  PERFORMANCE CRITERIA:
  ---------------------

     In the context of this acquisition the Parties have agreed that the
     following NQI Gross Sales amounts and the dates by which these Gross Sales
     are to be achieved for the purpose of the Employment Agreement shall be
     referred to as the PERFORMANCE CRITERIA.  Upon the successful completion of
     the PERFORMANCE CRITERIA for the 3 years, or sooner, as outlined below,
     the terms of the Employment Agreement shall be in full effect.  With
     options to renew, which will not be unreasonably withheld.

<TABLE>
<CAPTION>

        EMPLOYMENT AGREEMENT PERFORMANCE CRITERIA                GROSS SALES
        -----------------------------------------                -----------
        <S>                                                      <C>
        a) START UP PHASE                                        $  200,000

        b) FIRST 12 MONTHS, COMMENCING WITH THE GRAND OPENING    $  2 MILLION

        c) SECOND 12 MONTHS FOLLOWING THE GRAND OPENING          $  4 MILLION

        d) THIRD 12 MONTHS FOLLOWING THE GRAND OPENING           $  10 MILLION
</TABLE> 
* Twelve (12) months periods, or sooner.

     The following performances are established for the purposes of the Purchase
     Agreement.  Upon the successful completion of the PERFORMANCE CRITERIA for
     the first year, as outlined below,  the terms of  the Purchase Agreement
     shall be in full effect.

<TABLE>
<CAPTION>

         EMPLOYMENT AGREEMENT PERFORMANCE CRITERIA              GROSS SALES
         -----------------------------------------              -----------
         <S>                                                    <C>
         A) START UP PHASE                                      $  200,000

         B) FIRST 12 MONTHS, COMMENCING WITH THE GRAND OPENING  $  2 MILLION
</TABLE>
  NQI GROSS SALES:
  ----------------
     Gross dollars into NQI from any and all products, and sales aids or
     material sold to distributors, or customers.

August 2, 1996
<PAGE>
 
Lawrence E. Sturchio
Nutra Quest International, Inc.
PAGE 3 OF 9

  NQI PRODUCTS:
  -------------
     Shall include (CURRENT PRODUCTS), but not be limited to the Personalized
     Nutrition Program, Kick Start, Melt Down, Melt Away, Cheaters Delight I &
     II, Ultra Tone, Aloe Up, Nutra Meal, Nutra Fuel, (FUTURE PRODUCTS)
     Essential Nutra Minerals, Nutra "C" & Nutra "C+" w/ Co Enzyme Q10, Nutra
     Enzyme, OPC (Oligomeric Proantho Cyanididin) Grape Seed Extract with
     Hawthorn Berry, Billberry, Ginko Biliba, Milk Thistle, Catalase, and Yacca,
     Nutra Shield, Renew, Competitive Edge, Nutra Cal, LIPOSPRAY
     products (CitriMax w/ Chromium, Melatonin/Kava Kava, Ginkgo Biliba, Oxygen
     Combo, DHEA, CoEnzyme Q-10, Cats Claw, Sharks Cartilage, etc. ), Nutracap I
     (Fruit) & Nutracap II (Vegetable)(Spray dried juice powder, from Carrots to
     Garlic & Apples to Tangerine Juice), Premier Anti-Oxidant, OxyMax,
     Nutrition In The Kitchen, The Senergy Stop Smoking Program & Stop Smoking
     II Program, related products and replacement product therefore. NQI
     Products includes New Products introduced or developed by an employee of
     NQI, and is not limited to nutrition. (Providing the only cost to the
     company is inventory, labels, and packaging).


  GROSS RETAIL SALES:
  -------------------
     Defined as NQI and/or distributor sales of NQI Products to end users.

  SOFT ROLL OUT:
  --------------
     The period before the Grand Opening (September through February).

  GRAND OPENING:
  --------------
     Mass hotel meeting to be held during the middle of February.  Introducing
     management, IMT management & R & D personal, new products, etc.

  COMPANY:
  --------
     Interactive Medical Technologies, Ltd.

  TRAINING & OPPORTUNITY VIDEOS:
  ------------------------------
     Videos produced by an outside vender such as Video Plus, at a cost of
     $25,000 to $30,000 each.

  NUTRA NEWS:
  -----------

     A NQI publication to be produced by NQI on a quarterly bases to start, then
     monthly. this publication will be utilized as a sales and marketing tool to
     be sent to all NQI distributors and customers.

  EFFECTIVE DATE:
  -----------------
    August 2, 1996.
August 2, 1996
<PAGE>
 
Lawrence E. Sturchio
Nutra Quest International, Inc.
PAGE 4 OF 9

                                    PROPOSAL
                                    --------
                                        
     IMT proposes to acquire NQI in its entirety based on the terms
     described below, after which NQI would become a wholly owned subsidiary of
     IMT. The proposed acquisition shall include all NQI assets and liabilities
     including but not limited to all research and development; all
     formulations, all formulation or manufacturing processes including
     technical know how and trade secrets; all trade marks, brands, registered
     trade mine, logo's or other identifying or distinctive marks or insignias;
     all patents or patent applications; all intellectual property; all product
     inventory, ingredients, packaging components, shipping materials, packaging
     and shipping containers; all sales and marketing materials, inventories,
     and works in progress, all information. materials, documentation, and
     clinical information relating to personalized nutrition programs; all
     distributor agreements, lists, and relationships; all customer lists; all
     manufacturing or co-packer agreements; all computers, office furniture,
     telephones, merchant account, all good will; all receivable; all
     liabilities* ( hereinafter referred to as "the assets" ), IMT/NQI will hire
     Lawrence E. Sturchio as a full time employee (as NQI President and Chief
     Executive Officer) for the periods defined below.

     ( *AS DEFINED ON THE ATTACHED NQI LIABILITIES PAGE PROVIDED BY LES)

     The acquisition will take place in two (2) separate phases. Phase One
     consists of the combined Organizational and Start Up Phases. Phase Two is
     the Operational Phase, however, Phase Two is conditioned upon NQI achieving
     the start up phase performance criteria. this purchase agreement is not to
     be considered an installment purchase. upon IMT'S approval of phase one
     performance criteria, and implementation of phase two, IMT shall receive
     and hold full title to NQI as if IMT had paid the full purchase price on
     the Effective Date.

     If IMT does not exercise it's option to continue the purchase of NQI at
     any time, all assets, and all items and properties in the paragraph titled
     "PROPOSAL" reverts back to  LES immediately, and all moneys generated by
     NQI, shall remain the property of NQI AND/OR LES.

     1. PHASE ONE:
     -------------
        Subject to approval of the final terms and conditions by the IMT Board
        of Directors, IMT agrees that during Phase One it will:

        a) Advance LES $60,000 cash against the total NQI purchase price of
          $600,000. Such advance shall be payable in three $20,000 payment,. The
August 2, 1996
<PAGE>
 
Lawrence E. Sturchio
Nutra Quest International, Inc.
PAGE 5 OF 9

         first payment shall be due upon signing of this Letter Of Intent, the
         second $20,000 payment shall be due 30 days from the Effective Date,
         the final $20,000 payment is due 60 days from the Effective Date.

       b) Pay LES a salary of $8500 per month as NQI President and Chief
         Executive Officer beginning on the EFFECTIVE DATE and continuing for
         four (4) months, or the end of the START UP PHASE.

       c) Pay LES a $500 per month auto allowance beginning on the Effective
         Date and continuing for four (4) months, or the end of the START UP
         PHASE.

       d) Pay LES an amount equal to 3% of NQI Gross Sales of NQI Products,
         payable 120 days from the EFFECTIVE DATE. ( In the event of
         termination, such royalty will be offset as repayment to IMT)

     2. PHASE TWO:
     -------------
        Subject to satisfaction of the START UP PHASE PERFORMANCE CRITERIA, IMT
        agrees that during Phase Two it will:

        a) Complete the purchase of NQI assets in a total amount of $600,000,
          payable $200,000 in cash (of which $60,000 was received in Phase I ),
          and $400,000 in non-restricted IMT common stock(subject to approval of
          SEC Form S-8, by the SEC) valued at $0.15 per share (equal to
          2,666,666 shares), and assume NQI liabilities of $90,000. (IMT
          reserves an option to arrange payment of such liabilities directly
          with creditors), subject to approval of LES, which shall not
          unreasonably be withheld.

        b) IMT will pay the $140,000 balance of the cash purchase price at
          $10,000 or more per month beginning 120 days after the Effective Date
          and continuing until paid.

        c) IMT to continue funding NQI @ $75,000 the fourth month (Nov), $50,000
          the fifth month (Dec), and $25,000 the sixth month (Jan), six months
          total for $450,000 as per USE OF PROCEEDS.

        d) IMT WILL PAY THE STOCK PORTION OF THE PURCHASE PRICE AS FOLLOWS:
             1)  500,000 shares @ $0.15 per share, upon executing the Agreement
                 this LETTER OF INTENT represents.

             2)  500,000 shares @ $0.15 per share, upon NQI reaching $500,000
                 or more, Gross Sales in one month and reaching within $450,000
August 2, 1996
<PAGE>
 
Lawrence E. Sturchio
Nutra Quest International, Inc.
PAGE 6 OF 9

            gross monthly sales the second month.

            3)  366,666 shares, @ $0.15 per share, upon reaching $750,000 Gross
                Sales per month for two consecutive months, or and reaching
                within $675,000 Gross monthly sales the second month.

            4)  650,000 shares, @ $0.15 per share, upon reaching $5,000,000
                Gross Sales in any consecutive twelve month period.

            5)  650,000 shares, @ $0.15 per share, upon reaching $12,500,000
                Gross Sales in any consecutive twelve month period.

3. NQI EMPLOYMENT AGREEMENT:
  --------------------------
   LES is to enter into a five year Employment Agreement with IMT, with options
   to renew in two year intervals with NQI/IMT, to be executed upon the signing
   of the Agreement this Letter Of Intent represents. see EXHIBIT A for sample
   Employment Agreement.

   In consideration of services to be performed by LES, NQI will employ LES as
   President and Chief Executive Officer on the terms and conditions contained
   below. Further, IMT agrees to issue LES 1,733,334 additional Warrants to
   purchase IMT common stock at prices and vesting dates described below:

   a.) SALARY:
       1) $8,500 per month for the first 4 months following the Effective Date,
          and $8,500 for the 5th through 12th month provided that NQI achieves
          the Start Up Phase Performance Criteria.

       2) $10,000 for the second 12 months provided NQI achieved $2 million
          Gross Sales the first 12 month, or sooner.

       3) $12,000 per month upon NQI achieving Gross Sales of $4 Million in any
          consecutive 12 month period, or sooner.

       4) $16,000 per month upon NQI achieving Gross Sales of $10 Million in any
          consecutive 12 month period, or sooner.

       5) $20,000 per month upon NQI achieving Gross Sales of $20 Million in any
          consecutive 12 month period, or sooner.


August 2, 1996
<PAGE>
 
Lawrence E. Sturchio
Nutra Quest International, Inc.
PAGE 7 OF 9

*IF ANY PERFORMANCE CRITERIA IS REACHED IN LESS THAN THE DESIGNATED PERIOD, THE
NEXT SALARY LEVEL SHALL COMMENCE THE FOLLOWING MONTH.

  b)  BENEFITS:
      1) $500 per month automobile allowance.

      2) Medical Insurance, Blue Cross was agreed to by all parties.

      3) 4 Weeks Vacation (To be taken in accordance with Company policy).

      4) Other benefits as normally provided to senior Company management.

  c)  ROYALTIES:
      1) a 4% royalty of gross NQI Gross Sales of NQI Products created by or
      introduced by LES and/or associates, payable monthly with Distributor
      check runs. (PRODUCTS INTRODUCED BY OR THROUGH IMT AND DISTRIBUTED BY NQI
      ARE NOT SUBJECT TO A ROYALTY, UNLESS SAID PRODUCT(S) REPLACES AN NQI
      PRODUCT, SUCH AS CHEATERS DELIGHT I. IF AN IMT PRODUCT REPLACES AN NQI
      PRODUCT, AND USES THE NQI NAME, SUCH AS CHEATERS DELIGHT I, THE ROYALTY
      SHALL BE REDUCED TO 3%. IF AN NQI NAME IS NOT USED, SAID ROYALTY SHALL BE
      REDUCED TO 2%, WITH A MAXIMUM NUMBER OF THREE (3) NQI PRODUCTS TO BE
      REPLACED WITHIN THREE YEARS, AND A MAXIMUM NUMBER OF SIX (6) NQI PRODUCTS
      TO BE REPLACED WITHIN TEN YEARS).

      ROYALTY payments shall remain in effect for fifteen years, and if LES is
      still employed by NQI, for an additional ten years.

  d) OTHER TERMS AND CONDITIONS:
     1) LES will serve as NQI director.

     2) At the first anniversary, LES will be nominated for the Board and
       current Board members will not withhold their vote for LES to become a
       Director

  e) WARRANTS TO PURCHASE:
     1) 300,000 shares, @ $0.15 per share, upon reaching $40,000,000 Gross Sales
       in any consecutive twelve month period.

     2) 400,000 shares, @ $0.15 per share, upon reaching $50,000,000 Gross Sales
       in any consecutive twelve month period.


August 2, 1996

<PAGE>
 
Lawrence E. Sturchio
Nutra Quest International, Inc.
PAGE 8 OF 9

     3) 300,000 shares @ $0.15 per share upon reaching $65,000,000 Gross Sales
       in any consecutive twelve month period.

     4) 350,000 shares @ $.50 upon NQI reaching $75,000,000 Gross Sales in any
        consecutive twelve month period.

     5) 383,334 shares @ $.50 upon NQI reaching $100,000,000 Gross Sales in any
        consecutive twelve month period.

     6) 300,000 additional shares (above 4,400,000), @ $1.00 per share, for each
        $50,000,000 increase in NQI Gross Sales above $100,000,000 in any
        consecutive twelve month period.

4. ADDITIONAL TERMS AND CONDITIONS:
-----------------------------------
   a) IMT agrees to include certain key NQI personnel in a stock option plan
      containing 1,000,000 warrants to purchase IMT common stock @ value
      existing at the time the Employment and/or Distributor Agreement is
      executed. These Warrants should be tied to personal income per week, and
      time frame for vesting. i.e. (33 1/3 % vesting after one year, 66 2/3 %
      vesting after two years, and full vesting after three years.)

   b) In the event NQI fails to meet the Start Up Phase and first 12 months
      PERFORMANCE CRITERIA and IMT does not exercise its option to continue with
      the proposed acquisition, then all moneys provided by IMT, with the
      exception of salaries, shall be converted into a Promissory Note payable
      to IMT, payment not to exceed 10% of Gross Sales per month.

   c) If terminated without cause, by IMT at any time, no debt to IMT, and
      there will be no Note in favor of IMT.

      This letter is intended to reflect the general understanding of the terms
      and conditions of the proposed acquisition. If you agree that terms and
      conditions contained herein accurately reflect the general understanding
      between the Parties, please indicate so by executing page 9, the signature
      page. Upon receipt of your signed copy, IMT will immediately begin
      drafting the formal agreements in anticipation of the August 2, 1996
      Organizational Phase.

     Sincerely;
     Interactive Medical Technologies, Ltd.

     By: /s/ Steven Westlund
        -----------------------------------
        Steven Westlund/CEO & Chairman


     cc: Peter Benz/IMT President
         Robert Schulman, Esq./IMT Counsel

<PAGE>
 
August 2, 1996
Lawrence E. Sturchio
Nutra Quest International Inc.
PAGE 9 OF 9



                                SIGNATURE PAGE

                                      FOR

             THE PROPOSED ACQUISITION OF NUTRA QUEST, INCORPORATED

                                      BY

                    INTERACTIVE MEDICAL TECHNOLOGIES, LTD.



INTERACTIVE MEDICAL TECHNOLOGIES, LTD.     LAWRENCE E. STURCHIO & NQI



Agreed and Accepted By:                    Agreed and Accepted By:
 
  /s/ Steven Westlund                        /s/ Lawrence E. Sturchio
------------------------------             -----------------------------------
Steven Westlund/CEO & Chairman             Lawrence E. Sturchio/CEO & Chairman


Date: August  2 , 1996                     Date: August  2 , 1996
             ---                                        ---