HBM ASSOCIATES, INC
20 Stuyvesant Oval
New York, NY 10009
July 24, 2000
Mr. Benjamin Brucker Weisman, Ph.D.
Chief Executive Officer
DIABETEX INTERNATIONAL CORP.
142 Ferry Road
Suite 1&2
Old Saybrook, Connecticut 06475
Dear Ben:
This is to confirm our mutual understanding concerning the relationship
between Diabetex International Corp. (hereinafter the "Company')and HBM
Associates, Inc. (hereinafter "HBM" or "Markovitz").
The Company agrees to engage the services of HBM and HBM agrees to perform
the services indicated below in consideration of the terms contained herein.
Harvey Markovitz, on behalf of HBM, shall represent, develop, direct and
implement the services provided by HBM to the Company and shall be
accountable for the execution of this understanding on behalf of HBM.
Markovitz shall use all of the resources available to HBM to execute the
terms of this understanding on behalf of HBM.
The term of this agreement shall be for a period of one-year commencing on
the date first indicated above. Should both parties agree, this
understanding will be continued for another like term. However, Diabetex may
terminate this agreement with 30 days written notice, provided that all
outstanding financial obligations are mutually satisfied and all tangible
deliverable projects previously agreed to be due to the Company by HBM for
that period are completed to the satisfaction of the Company.
1. HBM and Markovitz agree to the following:
1. Markovitz shall:
a. Serve the Company as its Vice President, Director of Marketing and
Business Development and member of the Executive Strategic Planning Committee.
b. Write or edit the Company's business plan as required.
c. Develop, write, direct and manage the execution of the Company's marketing
plan(s) for launching the commercialization of its Metabolic Activation
Clinics, Non-Invasive Glucose Measurement Device, Intravenous Infusion Device
and other products or services as may be deemed suitable by the Company to
commercialize.
d. Develop, direct, manage and be accountable for the execution of the
Company's marketing budget including periodic variance analysis and
contingency planning.
e. Participate as part of the Company's strategic planning and team building
effort to exploit opportunities and limit problems for the Company as required.
f. Be accountable for achieving the Company's sales and marketing,
quantifiable (example: enrollment, revenue, budget) and qualified
(marketing message, market awareness, market image, marketing creative
objectives provided that the Company is able to common [illegible] its
business product development initiatives and endeavors and it maintains
normal societal ethical business practices.
g. Shall execute the above directly or through other individual, third party
contractors engaged by HBM or engaged by the Company as well as Company
employees where appropriate.
h. Shall upon the signing of a Company confidentiality statement, engage the
services of individuals who shall be accountable to Markovitz and HBM:
a. Fred Segal as Media Director and general assistant to the Marketing
Director in executing the media marketing communication strategies; and
b. Janice Kasper as Sales Director and general assistant to the Marketing
Director in executing the direct sales effort and pharmacy channel
communications strategies;
c. Other personnel that may be deemed necessary by Markovitz and confirmed by
the Company.
i. [illegible] behavior norms and represent the Company management as required.
j. Shall devote his and HBM's best efforts on a non-exclusive basis to
accomplish the above objectives according to agreed upon timeliness in the
execution of Company marketing and business plans or strategic endeavors
a. Markovitz and HBM shall maintain client relationships with others besides
the Company.
b. HBM and Markovitz shall consider the client relationship with the Company
as a business priority to other client relationships so long as that
relationship does not interfere with HBM's or Markovitz's obligations to its
other clients.
II. The Company agrees that
1. Upon its acceptance of the Marketing Plan and Business Plan, defining the
marketing and sales strategies of the Company, it will give to Markovitz the
authority of normal chief of marketing officers in publicly held companies to
act on behalf of the Company to execute the Marketing initiatives, strategies
and tactics agreed upon or such ad hoc marketing decisions that might seem to
Markovitz to be prudent at the time of his decision to act.
2. Markovitz, as the Vice President of Marketing and Business Development
shall, organizationally report and be accountable to the Company's Chief
Executive Officer (CEO) as well as maintain cooperative liaison and cohort
relationships with other Company managers defined by the CEO;
3. A table of authority shall be established by the Company defining a
delegation of that authority from the Chief Executive Officer to the Vice
President Marketing and Business Development which defines the limitations of
Markovitz's authority to act alone or in concert wit other Company managers;
4. The Company will provide the necessary financial and operating resources
to Markovitz, according to agreed upon budgets and resource requirements so
that he will not be encumbered to accomplish the above objectives.
PAYMENTS AND COMPENSATION
1. In consideration of the above, the Company agrees to the following
provisions:
1. HBM Associates, Inc. shall be compensated for the term of this agreement
$120,000 paid in fifty-two (52) equal payments of $2,308 due and payable the
Monday following the start date of this agreement (or the next business day
should Monday be a legal Holiday) and on each Monday for the term of this
agreement.
2. HBM shall be reimbursed for all out of pocket expenses incurred in the
course of executing the above objectives according to the standard processes
of the Company, but within 10 days of invoices submitted by HBM to the
Company, or
a. Markovitz shall be issued a Company American Express Card, Air Travel Card
and telephone card and shall submit monthly expense reports to the Company's
financial officer for auditing and to the CEO for approval with explanations
of all charges made to those cards. Should it be deemed by the CEO that such
charges are for Markovitz's personal benefit and not for the Company's
benefit, then Markovitz shall reimburse the Company for any such expense.
3. Shares of the Company Common Stock shall be issued to HBM Associates, Inc.
personnel as follows:
a. Harvey Markovitz
1. Upon execution of this agreement, the Company agrees to issue to
Markovitz, options to purchase 25,000 common shares at $0.75 (seventy-five
cents) per share at a rate of 2,084 shares per month for the term of this
agreement beginning with the month of July, 2000 with such letter authorizing
these options to be issued to Markovitz on the last business day of each
month; such shares shall be the same class and treated in the same manner
with the same privileges as those of the Company's CEO
CONTINGENCIES AND RISKS:
1. In consideration of the above HBM/Markovitz et al and the Company agree to
the following:
1. Should the Company terminate its relationship with HBM, as stipulated
above, because HBM failed to accomplish the Company's marketing objectives,
considering the Company provided all resources required by HBM to achieve
these objectives, HBM/Markovitz et al shall have no claim against the Company
for any additional compensation, with the exception of any outstanding
invoices for out of pocket, travel and entertainment expenses.
2. It is understood that forecasting results is an uncertainty and risky,
however, prudential business judgment is utilized in developing forecasts in
business and marketing plans presented by HBM.
3. At all times the Company's investment in this activity is at complete risk.
It is agreed that HBM/Markovitz et al will make a genuine priority based,
best effort to achieve the objectives of this understanding and to minimize.
risks to the Company while exploiting all marketing opportunities available
to it.
Upon engagement, the immediate priority for HBM/Markovitz et al is to:
1. Develop a calendarized marketing budget of tasks and monetary investments;
2. Develop the Company's business plan;
3. Develop the Company's marketing plan.
Thank you for the opportunity to serve your needs.
This agreement is effective upon the approval of this agreement and the
attached invoice for the first week's engagement for so indicated below and
upon receipt of the first month's monthly fee of $2,308.00
Sincerely yours,
/s/ H. Markovitz
Harvey Markovitz
President
Agreed to for: DIABETEX INTERNATIONAL CORP.
By: Mr. Benjamin Brucker Weisman, Ph.D.
Chairman and Chief Executive Officer
/s/ Benjamin B. Weisman
Date: 7/24/00
