Document:

<PAGE>

                                                                   Exhibit 10.38

                             MODIFICATION AGREEMENT
                             ----------------------

          WHEREAS, as of October 26, 2000 and January 10, 2001, Kaire Holdings,
Incorporated, a Delaware corporation (the "Company"), pursuant to Subscription
Agreement dated October 26, 2000 ("Subscription Agreement") issued Convertible
Notes ("Notes") to the Subscribers, and Warrants in connection with the initial
funding (amounts designated on Schedule A hereto); and

          WHEREAS, the Company and Subscribers have determined that it is in the
Company's best interests to modify the Subscription Agreement as to the amount
of the funding and the nature and number of warrants issued pursuant to the
Subscription Agreement.

          It is now therefore agreed by the Company and Subscribers for good and
valuable consideration, receipt of which is hereby acknowledged, that:

     1.   Pursuant to the Subscription Agreement, specifically Sections 6,
11.2(e)ii, 11.2(e)iii and 11.4, the cumulative number of warrants (hereinafter
referred to as "Cumulative Warrants") to be issued and registered shall be
10,409,836. Of this amount, 2,500,000 warrants have been previously issued
(hereinafter referred to as "Initial Warrants"). The balance of the warrants to
be issued, upon effectiveness of the Registration Agreement, is 7,909,836
(hereinafter referred to as "Remainder Warrants"). All warrants will have a
cashless feature as specified in section 2.2 "Cashless Exercise" of the Common
Stock Purchase Warrant agreements.

     2.   The Registration Statement contemplated under Section 10.1 of the
Subscription Agreement, shall affect the registration of the Cumulative
Warrants.

     3.   The Remainder Warrants shall be issued to: Talbiya B. Investments LTD
("Talbiya") and Libra Finance S.A. ("Libra"). Talbiya shall be issued 5,273,224
Remainder Warrants, and Libra shall be issued 2,636,612 Remainder Warrants.

     4.   The cumulative financing amount contemplated in the Subscription
Documents is USD 8,000,000.00. The investors put obligations (remaining amounts
to be funded) are as follows:

               Investor                             Put Amount
               --------                             ----------
               THE KESHET FUND L.P.                 $1,013,440
               KESHET, L.P                          $3,486,650
               BALMORE S.A.                         $2,249,910

     5.   All terms employed in this Modification Agreement, unless otherwise
defined herein, shall have the same meanings attributed to them in the
Subscription Agreement and Notes.

     6.   Except as modified herein, the Subscription Documents shall remain in
full force and effect.
<PAGE>

     7.   This Modification Agreement constitutes the binding obligation of the
Company.

                     [THIS SPACE INTENTIONALLY LEFT BLANK]

                                Please acknowledge your acceptance of the
                                foregoing Modification Agreement by signing and
                                returning a copy to the undersigned whereupon it
                                shall become a binding agreement between us.

                         Kaire Holdings, Incorporated

                         By:    ________________________________
                         Name:
                         Title:

                         Dated: March 6, 2001

PUT
---

Put Note Purchase Price
(including Section 11.2(e) Put Amount): $1,013,440

ACCEPTED: Dated as of March 6, 2001

THE KESHET FUND L.P. - Subscriber
135 West 50/th/ Street, Suite 1700
New York, NY 10020
Fax: 212-541-4434

By:______________________________

<PAGE>

     Please acknowledge your acceptance of the foregoing Modification Agreement
by signing and returning a copy to the undersigned whereupon it shall become a
binding agreement between us.

                               KAIRE HOLDINGS INCORPORATED
                               A Delaware Corporation

                               By:____________________________

                               Dated: March 6, 2001

PUT
---

Put Note Purchase Price
(including Section 11.2(e) Put Amount): $3,486,650

ACCEPTED: Dated as of March 6, 2001

KESHET, L.P.- Subscriber
Ragnall House, 18 Peel Road
Douglas, Isle of Man
1M1 4L2, United Kingdom
Fax: 011-44-1624-661594

By:______________________________
<PAGE>

     Please acknowledge your acceptance of the foregoing Modification Agreement
by signing and returning a copy to the undersigned whereupon it shall become a
binding agreement between us.

                               KAIRE HOLDINGS INCORPORATED
                               A Delaware Corporation

                               By:__________________________

                               Dated: March 6, 2001

PUT
---

Put Note Purchase Price
(including Section 11.2(e) Put Amount): $2,249,910

ACCEPTED: Dated as of March 6, 2001

BALMORE S.A. - Subscriber
P.O. Box 4603
Zurich, Switzerland
Fax: 011-411-201-6262

By:_______________________<PAGE>

                                                                   Exhibit 10.39

                 Final Agreement and Asset for Equity Exchange
                 ---------------------------------------------

          This Final Agreement and Asset for Equity Exchange ("Agreement") is
hereby entered into on this _______ day of January, 2001, by and between by and
between Kaire Holdings, Inc., (hereinafter referred to as "Kaire") with
principle executive offices located at 7348 Bellaire Avenue, North Hollywood,
California 91605, and STASON U.S. Pharmaceuticals, Inc., (hereinafter referred
to as "STASON") with U.S. offices located 11 Morgan, Irvine, California 92618-
2005, and is intended to memorialize the final negotiated terms of a February
2000 Letter of Intent (hereinafter referred to as "LOI" and attached hereto as
Exhibit 1).

                                   RECITALS:

          WHEREAS, the Board of Directors of Kaire and Stason deem advisable and
in the best interests of their respective shareholders to enter into this
Agreement in an effort to create a new company ("NewCo") to be called Stason
Biotech, and to each respectively convey certain assets described herein to
Stason Biotech in exchange for equity in Stason Biotech.

          NOW, THEREFORE, in consideration of the promises and mutual covenants
and agreements set forth herein, and in reliance upon the representations and
warranties contained herein, the parties hereto covenant and agree as follows:

                                  ARTICLE 1.
                                  ----------

     CREATION OF NEWCO

1.1  Creation of NewCo.  Within 30 days of the execution of this Agreement, and
     -----------------
     in accordance with the Delaware Corporations Code, Newco shall be formed as
     a Delaware "C" Corporation and shall be called "Stason Biotech."

1.2  Directors and Officers.  Stason Biotech shall be formed with a six person
     ----------------------
     Board of Directors (hereinafter referred to as "SB Board"). Five of the
     Directors shall be chosen Stason. One of the Directors shall be chosen by
     Kaire. Subsequent to their selection, and in accordance with the law of the
     state of Delaware, said Directors and Officers shall be duly elected and
     qualified as such in accordance with the Articles of Incorporation and
     Bylaws of Stason Biotech.

1.3  Articles of Incorporation and Bylaws.  The Articles of Incorporation and
     ------------------------------------
     Bylaws of Stason Biotech shall be approved and filed in accordance with the
     law of the State of Delaware.

1.4  Initial Common Stock Allocation.  Stason Biotech shall issue no more than
     -------------------------------
     two percent (2%) of the total common stock authorization of common shares
     as an Initial Common Stock Authorization.
<PAGE>

                                  ARTICLE 2.
                           ASSET FOR EQUITY EXCHANGE

2.1  Kaire.  In consideration of forty percent (40%) of the Initial Common Stock
     -----
     Allocation of Stason Biotech, Kaire shall sell, transfer, convey and assign
     any and all rights to property, tangible or intangible, associated with EZ-
     TRAC, a wholly owned subsidiary of Kaire.

2.2  Stason.  In consideration of sixty percent (60%) of the Initial Common
     ------
     Stock Allocation to Stason Biotech, Stason shall transfer all rights and
     clear title to seven hundred and fifty thousand dollars (USD $750,000.00)
     in tangible assets (hereinafter referred to as "Stason Assets" and attached
     hereto as Exhibit 2) to Stason Biotech.

                                  ARTICLE 3.
                                     COSTS

3.1  Professional Fees.  Any and all costs for professional fees associated with
     -----------------
     this transaction and Agreement shall be borne by the respective party
     requesting and thusly incurring such costs.

3.2  Transaction Costs.  Kaire shall pay for the first fifteen hundred dollars
     -----------------
     (USD $1,500.00) in such costs.  Any and all transaction costs subsequently
     incurred shall be split by Stason and Kaire, Stason to pay 60% and Kaire to
     pay 40% of such costs.

                                  ARTICLE 4.
                                 GENERAL TERMS

4.1  Choice of Law.  This Agreement, and any dispute arising from the
     -------------
     relationship between the parties to this Agreement, shall be governed by
     California law, excluding any laws that direct the application of another
     jurisdiction's laws.

4.2  Attorney Fees Provision.  In any litigation, arbitration, or other
     -----------------------
     proceeding by which one party either seeks to enforce its rights under this
     Agreement (whether in contract, tort, or both) or seeks a declaration of
     any rights or obligations under this Agreement, the prevailing party shall
     be awarded its reasonable attorney fees, and costs and expenses incurred.

4.3  Notice.  Any notices required or permitted to be given hereunder shall be
     ------
     given in writing and shall be delivered (a) in person, (b) by certified
     mail, postage prepaid, return receipt requested, (c) by facsimile, or (d)
     by a commercial overnight courier that guarantees next day delivery and
     provides a receipt, and such notices shall be addressed as follows:

For Kaire:     Steven Westlund, 7348 Bellaire Avenue, North Hollywood, CA  91605
---------
For Stason:    Harry Fan, 11 Morgan, Irvine, California 92618-2005
----------
<PAGE>

     or to such other address as either party may from time to time specify in
     writing to the other party. Any notice shall be effective only upon
     delivery, which for any notice given by facsimile shall mean notice which
     has been received by the party to whom it is sent as evidenced by
     confirmation slip.

4.4  Modification of Agreement.  This Agreement may be supplemented, amended, or
     -------------------------
     modified only by the mutual agreement of the parties. No supplement,
     amendment, or modification of this Agreement shall be binding unless it is
     in writing and signed by all parties.

4.5  Entire Agreement.  This Agreement and all other agreements, exhibits, and
     ----------------
     schedules referred to in this Agreement constitute(s) the final, complete,
     and exclusive statement of the terms of the agreement between the parties
     pertaining to the subject matter of this Agreement and supersedes all prior
     and contemporaneous understandings or agreements of the parties. This
     Agreement may not be contradicted by evidence of any prior or
     contemporaneous statements or agreements. No party has been induced to
     enter into this Agreement by, nor is any party relying on, any
     representation, understanding, agreement, commitment or warranty outside
     those expressly set forth in this Agreement.

4.6  Severability of Agreement.  If any term or provision of this Agreement is
     -------------------------
     determined to be illegal, unenforceable, or invalid in whole or in part for
     any reason, such illegal, unenforceable, or invalid provisions or part
     thereof shall be stricken from this Agreement, and such provision shall not
     affect the legality, enforceability, or validity of the remainder of this
     Agreement. If any provision or part thereof of this Agreement is stricken
     in accordance with the provisions of this section, then this stricken
     provision shall be replaced, to the extent possible, with a legal,
     enforceable, and valid provision that is as similar in tenor to the
     stricken provision as is legally possible.

4.7  Separate Writings and Exhibits.  The following Contract constitutes a part
     ------------------------------
     of this Agreement and is incorporated into this Agreement by this
     reference: February 1999, Letter of Intent. Should any inconsistency exist
     or arise between a provision of this Agreement and a provision of any
     exhibit, schedule, or other incorporated writing, the provision of this
     Agreement shall prevail.

4.8  Time of the Essence.  Time is of the essence in respect to all provisions
     -------------------
     of this Agreement that specify a time for performance; provided, however,
     that the foregoing shall not be construed to limit or deprive a party of
     the benefits of any grace or use period allowed in this Agreement.

4.9  Survival.  Except as otherwise expressly provided in this Agreement,
     --------
     representations, warranties, and covenants contained in this Agreement, or
     in any instrument, certificate, exhibit, or other writing intended by the
     parties to be a part of this Agreement, shall survive for the maximum
     number of years as provided for under the law of the State of California
     after the date of this Agreement.

4.10 Ambiguities.  Each party and its counsel have participated fully in the
     -----------
     review and revision of this Agreement. Any rule of construction to the
     effect that ambiguities are to be resolved against the drafting party shall
     not apply in interpreting this Agreement. The language in this Agreement
     shall be interpreted as to its fair meaning and not strictly for or against
     any party.

4.11 Waiver.  No waiver of a breach, failure of any condition, or any right or
     ------
     remedy contained in or granted by the provisions of this Agreement shall be
     effective unless it is in writing and signed by the party waiving the
     breach, failure, right, or remedy. No waiver of any breach, failure, right,
     or remedy, whether or not similar, nor shall any waiver constitute a
     continuing waiver unless the writing so specifies.

4.12 Headings.  The headings in this Agreement are included for convenience only
     --------
     and shall neither affect the construction or interpretation of any
     provision in this Agreement nor affect any of the rights or obligations of
     the parties to this Agreement.

4.13 Necessary Acts, Further Assurances.  The parties shall at their own cost
     ----------------------------------
     and expense
<PAGE>

     execute and deliver such further documents and instruments and shall take
     such other actions as may be reasonably required or appropriate to evidence
     or carry out the intent and purposes of this Agreement.

4.14 Execution.  This Agreement may be executed in counterparts and by fax.
     ---------

4.15 Consent to Jurisdiction and Forum Selection.  The parties hereto agree that
     -------------------------------------------
     all actions or proceedings arising in connection with this Agreement shall
     be tried and litigated exclusively in the State and Federal courts located
     in the County of Los Angeles, State of California. The aforementioned
     choice of venue is intended by the parties to be mandatory and not
     permissive in nature, thereby precluding the possibility of litigation
     between the parties with respect to or arising out of this Agreement in any
     jurisdiction other than that specified in this paragraph. Each party hereby
     waives any right it may have to assert the doctrine of forum non conveniens
     or similar doctrine or to object to venue with respect to any proceeding
     brought in accordance with this paragraph, and stipulates that the State
     and Federal courts located in the County of Los Angeles, State of
     California shall have in personam jurisdiction and venue over each of them
     for the purpose of litigating any dispute, controversy, or proceeding
     arising out of or related to this Agreement. Each party hereby authorizes
     and accepts service of process sufficient for personal jurisdiction in any
     action against it as contemplated by this paragraph by registered or
     certified mail, return receipt requested, postage prepaid, to its address
     for the giving of notices as set forth in this Agreement. Any final
     judgement rendered against a party in any action or proceeding shall be
     conclusive as to the subject of such final judgement and may be enforced in
     other jurisdictions in any manner provided by law.

4.16 Jury Trial Waivers.  To the fullest extent permitted by law, and as
     ------------------
     separately bargained-for-consideration, each party hereby waives any right
     to trial by jury in any action, suit, proceeding, or counterclaim of any
     kind arising out of or relating to this Agreement.

4.17 Specific Performance.  The parties acknowledge that it will be impossible
     --------------------
     to measure in money the damage to them caused by any failure to comply with
     the covenants set forth in Section 1, that each such covenant is material,
     and that in the event of any such failure, the injured party will not have
     an adequate remedy at law or in damages. Therefore, the parties consent to
     the issuance of an injunction or the enforcement of other equitable
     remedies against them at the suit of the other, without bond or other
     security, to compel performance of all of the terms of Section 1, and waive
     the defense of the availability of relief in damages.

4.18 Representation on Authority of Parties/Signatories.  Each person signing
     --------------------------------------------------
     this Agreement represents and warrants that he or she is duly authorized
     and has legal capacity to execute and deliver this Agreement. Each party
     represents and warrants to the other that the execution and delivery of the
     Agreement and the performance of such party's obligations hereunder have
     been duly authorized and that the Agreement is a valid and legal agreement
     binding on such party and enforceable in accordance with its terms.

4.19 Force Majeure.  No party shall be liable for any failure to perform its
     -------------
     obligations in connection with any action described in this Agreement, if
     such failure results from any act of God, riot, war, civil unrest, flood,
     earthquake, or other cause beyond such party's reasonable control
     (including any mechanical, electronic, or communications failure, but
     excluding failure caused by a party's financial condition or negligence).

4.20 Assignment.  Neither party shall voluntarily or by operation of law assign,
     ----------
     hypothecate, give, transfer, mortgage, sublet, license, or otherwise
     transfer or encumber all or part of its rights, duties, or other interests
     in this Agreement or the proceeds thereof (collectively, "Assignment'),
     without the other party's prior written consent. Any attempt to make an
     Assignment in violation of this provision shall be a material default under
     this Agreement and any Assignment in violation of this provision shall be
     null and void.

4.21 Arbitration.  Any controversy, claim or dispute arising out of or relating
     -----------
     to this Agreement, shall be settled by binding arbitration in Los Angeles,
     California. Such
<PAGE>

     arbitration shall be conducted in accordance with the then prevailing
     commercial arbitration rules of JAMS/Endispute ("JAMS"), with the following
     exceptions if in conflict: (a) one arbitrator shall be chosen by JAMS; (b)
     each party to the arbitration will pay its pro rata share of the expenses
     and fees of the arbitrator, together with other expenses of the arbitration
     incurred or approved by the arbitrator; and (c) arbitration may proceed in
     the absence of any party if written notice (pursuant to the JAMS' rules and
     regulations) of the proceedings has been given to such party. The parties
     agree to abide by all decisions and awards rendered in such proceedings.
     Such decisions and awards rendered by the arbitrator shall be final and
     conclusive and may be entered in any court having jurisdiction thereof as a
     basis of judgment and of the issuance of execution for its collection. All
     such controversies, claims or disputes shall be settled in this manner in
     lieu of any action at law or equity; [provided however, that nothing in
     this subsection shall be construed as precluding the bringing an action for
     injunctive relief or other equitable relief]. The arbitrator shall not have
     the right to award punitive damages or speculative damages to either party
     and shall not have the power to amend this Agreement. The arbitrator shall
     be required to follow applicable law.

Signed this ______ day of ___________________, 2000.

Kaire Holdings, Inc.
--------------------

By:  Steven R. Westlund       ___________________________________

Stason USA, Inc.

By:  Harry Fan                ___________________________________

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