Document:

<PAGE>

                                                                  EXHIBIT 10.38

                                LICENSE AGREEMENT

                                     BETWEEN

                         NOVARTIS CONSUMER HEALTH, INC.

                                       AND

                                  GALAGEN INC.

                                                         Dated: October 25, 1999

<PAGE>

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                            PAGE

<S>                                                                                                         <C>
1.   DEFINITIONS...............................................................................................1
2.   GRANTS....................................................................................................3
3.   COVENANTS.................................................................................................3
4.   LICENSE FEES, MILESTONE PAYMENTS AND ROYALTIES............................................................4
5.   PAYMENT PROCEDURES, RECORDS, AUDITING.....................................................................5
6.   REPRESENTATIONS AND WARRANTIES............................................................................6
7.   CONFIDENTIALITY...........................................................................................7
8.   TERM AND TERMINATION......................................................................................9
9.   PATENTS AND TRADEMARKS...................................................................................10
10.  INFRINGEMENT OF PATENTS AND TRADEMARKS...................................................................10
11.  INFRINGEMENT OF THIRD PARTY RIGHTS.......................................................................10
12.  NOTICES..................................................................................................11
13.  FORCE MAJEURE............................................................................................12
14.  DISPUTE RESOLUTION.......................................................................................15
15.  PUBLICITY................................................................................................12
16.  ASSIGNMENT...............................................................................................12
17.  GOVERNING LAW............................................................................................13
18.  SEVERABILITY.............................................................................................13
19.  MISCELLANEOUS............................................................................................13
20.  INDEPENDENT CONTRACTORS..................................................................................13
21.  COUNTERPARTS.............................................................................................13
22.  ENTIRE AGREEMENT.........................................................................................14
</TABLE>

EXHIBIT A - PATENTS

<PAGE>

                                LICENSE AGREEMENT

This License Agreement (this "License Agreement") is made and entered into as of
this 25th day of October, 1999 ("Effective Date"), by and between Novartis
Consumer Health, Inc., a corporation organized and existing under the laws of
the State of Delaware, having an office at 560 Morris Avenue, Summit, New Jersey
07901-1312, and GalaGen Inc. (hereinafter referred to as "GalaGen"), a
corporation organized and existing under the laws of the State of Delaware,
having an office at 1275 Red Fox Road, Arden Hills, Minnesota 55112.

                                   WITNESSETH:

WHEREAS, GalaGen owns or possesses rights to certain products, trademarks,
patents and know-how and has the right to grant licenses with respect to same;
and

WHEREAS, GalaGen wishes to grant to NCH (as hereinafter defined) a license to
Licensed Ingredients (as hereinafter defined), as well as GalaGen Patents,
Trademarks and Know-How (as hereinafter defined) associated with Licensed
Ingredients, so that NCH may make, have made, use, market, distribute, import,
export, offer for sale and sell Products (as hereinafter defined) in the
Territory (as hereinafter defined) (the "License"); and

WHEREAS, NCH desires to acquire said License on the terms and subject to the
conditions set forth herein; and

WHEREAS, the parties are entering into a Supply Agreement (the "Supply
Agreement") with respect to the supply by GalaGen to NCH of NCH's commercial
requirements of Licensed Ingredients covered by the terms of this License
Agreement; and

WHEREAS, the parties are entering into a Product Development Agreement (the
"Product Development Agreement") to (a) [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] (b) such conduct such other research/ development work as the
parties mutually agree.

NOW, THEREFORE, in consideration of the mutual covenants, agreements and
obligations set forth herein, GalaGen and NCH hereby agree as follows:

1.       DEFINITIONS

The following terms, as used in this License Agreement, shall have the meanings
set forth in this Article 1:

"Affiliate" shall mean any corporation or entity which directly or indirectly
owns, is owned by, or is under common ownership with, a party to this License
Agreement, where own or ownership

<PAGE>

means direct or indirect possession of at least fifty percent (50%) of the
outstanding voting securities of a corporation or a comparable equity
interest in any other type of entity.

"Agreement Period" shall have the meaning set out in Section 8.1 of this License
Agreement.

"Date of First Sale" shall mean the date of first commercial sale of one or more
of the Products by NCH or any of its Affiliates to an unrelated third party.

"DSHEA" shall mean the U.S. Dietary Supplement Health and Education Act.

"Field of Use" shall be defined as follows: [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]

[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]

"Improvements" shall mean any enhancement to Licensed Ingredients (as
hereinafter defined) and/ or Products (as hereinafter defined) in the Field of
Use, including process technology and/or formulation improvements made during
the Agreement Period.

"Know-How" shall mean all tangible and intangible inventions, technology, trade
secrets, data, processes, methods and any physical or chemical material,
including any replication of any part of such material, other information that
GalaGen owns, controls or has a license to, with the right to sublicense,
existing as of the Effective Date, which are necessary or useful to the
formulation, development, manufacture, packaging or commercialization of
Licensed Ingredients or Products within the Field of Use, and any Improvements
made to any of the foregoing.

"Licensed Ingredients" shall mean [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

"NCH" shall mean Novartis Consumer Health, Inc. and its Affiliates.

"Net Sales" shall mean [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

"Patents" shall mean all patents and patent applications owned, or controlled,
or licensed (with the right to sublicense) during the term of this License
Agreement, by or on behalf of GalaGen or any of its Affiliates, which contain a
claim covering inventions necessary to the development, manufacture, packaging,
use, offer for sale or sale of Licensed Ingredients and/or Products, including
those patents and patent applications now owned, controlled or licensed by
GalaGen listed in EXHIBIT A, attached hereto. EXHIBIT A shall be updated from
time to time as appropriate and mutually agreed to by the parties, but at least
once per calendar year, to incorporate any

                                       2
<PAGE>

additional patents and patent applications NOT listed in EXHIBIT A as of the
Effective Date having a claim covering inventions necessary for the sale of
Licensed Ingredients and/or Products in the Field of Use, including patents
covering any Improvements, as well as any continuations,
continuations-in-part, divisions, re-examinations, reissues or extensions to
the patents or patent applications listed in EXHIBIT A, THAT HAVE A CLAIM
COVERING INVENTIONS NECESSARY FOR THE SALE OF LICENSED INGREDIENTS AND/OR
PRODUCTS IN THE FIELD OF USE.

"Products" shall mean products incorporating either or both of the Licensed
Ingredients within the Field of Use.

[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]

"Royalty Computation Period" shall mean a three (3) month calendar quarter
ending on the last day of March, June, September and December of a given year.

"Royalty Period" means that period beginning on the Date of First Sale of the
Products in the Territory by NCH and ending on (a) the expiration of the
Agreement Period or (b) the earlier termination of this License Agreement.

"Territory" shall mean worldwide.

[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]

2.       GRANTS

2.1 Subject to the terms of this License Agreement, GalaGen hereby grants, and
Novartis Consumer Health, Inc. hereby accepts on behalf of itself and its
Affiliates, an exclusive worldwide license under GalaGen's Patents and Know-How
to permit NCH to use Licensed Ingredients to make, have made, use, market,
distribute, import, export, offer for sale and sell Products in the Field of
Use.

2.1.1 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

2.2 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***]

3.       COVENANTS

3.1 GalaGen hereby covenants and agrees that it shall use the Confidential
Information belonging to NCH (as to which obligations of confidentiality apply)
solely for the purposes specified in this License Agreement and for no other
purpose.

                                       3
<PAGE>

3.2 NCH hereby covenants and agrees that it shall use the licensed Patents,
Trademarks and Know-How and Confidential Information belonging to GalaGen (as to
which obligations of confidentiality apply) solely for the purposes specified in
this License Agreement and for no other purpose.

3.3 GalaGen hereby covenants and agrees to keep NCH fully informed of all
Improvements to Licensed Ingredients.

3.4 GalaGen hereby covenants and agrees during the term of this License
Agreement not to (a) commercialize, or cause to be commercialized, or fund, or
provide services, including, without limitation, consulting, research,
development and/or manufacturing services, with respect to the commercialization
of, products incorporating either or both of the Licensed Ingredients in the
Field of use, or (b) license, assign or otherwise convey, to any third party,
except as may be expressly permitted in this License Agreement, any of the
rights or licenses granted to NCH under this License Agreement.

3.5 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***]

3.5.1 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

3.5.2 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

3.6 Novartis Consumer Health, Inc. hereby covenants and agrees to guarantee the
performance and any payments due from any NCH Affiliates under the terms of this
License Agreement.

4.       LICENSE FEES, MILESTONE PAYMENTS AND ROYALTIES

4.1 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***]

4.2 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***]

4.3 NCH's obligation to make payments pursuant to Sections 4.1 and 4.2 shall not
commence until it completes its due diligence review to its satisfaction. NCH
shall use reasonable commercial efforts to complete its due diligence, including
inspection of GalaGen's facilities, by November 8, 1999.

4.4 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***]

                                       4

<PAGE>

4.5      [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***].

5.       PAYMENT PROCEDURES, RECORDS, AUDITING

5.1      All payments due to GalaGen pursuant to Article 4 hereof shall be
made in U.S. dollars by wire transfer to such bank in the United States of
America as GalaGen shall specify from time to time. For purposes of
determining the running royalty payment due to GalaGen, Net Sales shall be
converted on a country-by-country basis to U.S. dollars at the exchange rate
prevailing at the close of the last business day of the relevant Royalty
Computation Period as published the next day in The Wall Street Journal.

         5.1.1 Payments hereunder shall be made without deduction other than
such amounts, if any, as NCH is required by law to deduct or withhold. NCH shall
obtain a receipt from the relevant taxing authorities for all withholding taxes
paid and forward such receipts to GalaGen to enable GalaGen to claim any and all
tax credits for which it may be eligible. NCH shall reasonably assist GalaGen in
claiming exemption from such deductions or withholdings under any double
taxation or similar agreement or treaty from time to time.

5.2      NCH shall pay to GalaGen royalties as set forth in Article 4 hereof
within [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] days after the end of each
Royalty Computation Period. Each payment of royalties shall be accompanied by a
statement, on a country-by-country basis, of the amount of Net Sales during such
quarter, the amount of aggregate Net Sales in the Territory during such quarter
and the amount of royalties or other payments due on such sales.

5.3      During the Agreement Period, NCH shall keep complete and accurate
books and records setting forth gross sales, net sales, amounts deducted from
gross sales to arrive at Net Sales, calculations of royalty payments owed to
GalaGen, and any other information necessary to allow the calculation of
royalties to be paid by NCH to GalaGen for each country within the Territory,
for no less than three (3) years after the end of each Royalty Computation
Period. NCH shall permit GalaGen, at GalaGen's expense, to have said books
and records examined by independent certified public accountants retained by
GalaGen and acceptable to NCH, during regular business hours upon reasonable
advance notice but not later than three (3) years following the close of the
Royalty Computation Period in question, and no more than one (1) time per
year. Such accountant shall report to GalaGen only those findings required to
verify or contradict the royalty amounts calculated by NCH to be owed to
GalaGen and the amounts of any discrepancy. Any information obtained or
reports completed by said accountants during such examination will be
considered Confidential Information of NCH under Article 7 hereof. If it is
determined as a result of said examination that there was an underpayment of
royalties due GalaGen, NCH will pay to GalaGen the balance of the royalties
due within thirty (30) days and will reimburse GalaGen for the reasonable
costs of such examination. Similarly, in the event it is determined that
there has been an overpayment of royalties, GalaGen will credit such overpaid
amount against running royalty payments owed by NCH at the end of the next
Royalty Computation

                                       5
<PAGE>

Period, or subsequent Royalty Computation Periods when required, until such
time as such overpayment has been fully credited against the running
royalties; PROVIDED, HOWEVER, such credit shall not exceed fifty percent
(50%) of any royalties due GalaGen in such Royalty Computation Period, and
any residual credit shall be carried over to the next Royalty Computation
Period and applied in accordance with this Section 5.3.

6.       REPRESENTATIONS AND WARRANTIES

6.1      GalaGen warrants and represents that:

         6.1.1 It is a corporation duly organized, existing and in good standing
under the laws of the State of Delaware, with full right, power and authority to
enter into and perform this License Agreement and to grant all of the rights,
powers and authorities herein granted in Article 2 hereof.

         6.1.2 The execution, delivery and performance of this License Agreement
do not conflict with, violate or breach any agreement to which GalaGen is a
party, or GalaGen's Certificate of Incorporation or Bylaws.

         6.1.3 This License Agreement has been duly executed and delivered by
GalaGen and is a legal, valid and binding obligation enforceable against GalaGen
in accordance with its terms.

         6.1.4 With respect to the Patents, Trademarks and Know-How which are
the subject of this License Agreement, GalaGen has the right and authority
necessary to grant the License pursuant to Article 2 hereof, and which are free
of any lien or encumbrance or any rights or claims of any third party in the
Territory.

         6.1.5 To GalaGen's knowledge, the Licensed Ingredients do not infringe
any valid trademarks, patents or other proprietary rights of third parties, nor
do said third parties have any claim of ownership with respect to the Licensed
Ingredients, Trademarks, Patents and Know-How.

         6.1.6 To GalaGen's knowledge, the Patents licensed under this License
Agreement are neither invalid nor unenforceable, nor would a court of competent
jurisdiction hold them invalid or unenforceable. If, during the Agreement
Period, GalaGen (a) becomes aware that anyone (including GalaGen) has requested
a re-examination of any such Patents, (b) requests a re-issuance of any such
Patents, or (c) becomes aware that a declaratory judgment action has been filed
to have any such Patents declared invalid or unenforceable, GalaGen promptly
shall notify NCH of such and specify which Patents are involved.

         6.1.7 During the term of this License Agreement, GalaGen shall not
enter into any agreement that is inconsistent with or in derogation of GalaGen's
representations and warranties under this License Agreement.

                                       6
<PAGE>

         6.1.8 As of the Effective Date, GalaGen is not aware of any third party
that is infringing the Patents licensed to NCH.

         6.1.9 Both of the Licensed Ingredients are safe and GalaGen has in its
possession sufficient clinical data to support structure function claims under
DSHEA as enacted as of the Effective Date.

6.2      NCH warrants and represents that:

         6.2.1 It is a corporation duly organized, existing and in good standing
under the laws of the State of Delaware, with full right, power and authority to
enter into and perform this License Agreement.

         6.2.2 The execution, delivery and performance of this License Agreement
do not conflict with, violate or breach any agreement to which NCH is a party,
or NCH's Certificate of Incorporation or Bylaws.

         6.2.3 This License Agreement has been duly executed and delivered by
NCH and is a legal, valid and binding obligation enforceable against NCH in
accordance with its terms.

7.       CONFIDENTIALITY

7.1      Both GalaGen and NCH agree that, subject to the limitations set
forth in Section 7.3 hereof, all information disclosed to the other party,
whether in oral, written or graphic form, and identified in writing by the
disclosing party as confidential shall be deemed "CONFIDENTIAL INFORMATION"
of the disclosing party. In particular, Confidential Information shall be
deemed to include, but not be limited to, any patent application or drawing
or potential patent claim, trade secrets, information, ideas, inventions,
samples, processes, procedures, methods, formulations, packaging designs and
materials, test data, future development plans, Products launch date,
Know-How and engineering, manufacturing, regulatory, marketing, servicing,
sales, financing or human resources matters relating to the disclosing party
and its business.

7.2      Each party will take precautions as it normally takes with its own
confidential and proprietary information to prevent disclosure to third
parties.

7.3      Both GalaGen and NCH agree that, notwithstanding the above, the
obligations of confidentiality shall not be deemed to apply to:

         7.3.1 Information which at the time of disclosure is or thereafter
becomes generally known or available to the public, through no wrongful act or
failure to act on the part of the receiving party.

         7.3.2 Information that was known by or in the possession of the
receiving party at the time of receiving such information from the disclosing
party as evidenced by written records.

                                       7
<PAGE>

         7.3.3 Information obtained by the receiving party from a third party
source who is not breaching a commitment of confidentiality to the disclosing
party by revealing such information to the receiving party.

         7.3.4 Information that is independently developed by the receiving
party without use of confidential information of the other party as evidenced by
written records.

         7.3.5 Information that is the subject of a granted written permission
to disclose that is issued by the disclosing party to the other party.

         7.3.6 Information that is required to be disclosed pursuant to the law
(including SEC regulations), but only to the extent required to be disclosed;
PROVIDED, HOWEVER, the disclosing party notifies the other party in writing and
gives the other party reasonable time to comment on the same prior to
disclosure.

7.4      During the Agreement Period and for a period of five (5) years after
the end of the Agreement Period, each party shall maintain all Confidential
Information in trust and confidence and shall not disclose any Confidential
Information to any third party or use any such information for any
unauthorized purpose, other than as authorized in Section 7.3 hereof or as
necessary to accomplish the purpose of this License Agreement subject to an
appropriate binder of confidentiality as set forth in Section 7.5 hereof.
Each party may use such Confidential Information only to the extent required
to accomplish the purposes of this License Agreement. Confidential
Information shall not be used for any purpose or in any manner that is not
consistent with this License Agreement or that would constitute a violation
of any laws or regulations including, without limitation, the export control
laws of the United States. Each party hereby agrees that it will not in any
way attempt to obtain, either directly or indirectly, any information
regarding any Confidential Information from any third party who has been
employed by, provided consulting services to, or received in confidence
information from, the other party.

7.5      Both parties will make diligent efforts to ensure that all
employees, consultants, agents, subcontractors and manufacturing contractors
who may have access to Confidential Information of the other party, and any
other third parties who might have access to Confidential Information, will
use such information in a manner consistent with the terms of this License
Agreement and will be bound by the terms set forth in this Article 7. No
Confidential Information shall be disclosed to any employees, subcontractors,
agents or consultants who do not have a need to receive such information.

7.6      To the extent either party discloses Confidential Information of the
other party to an employee, consultant, subcontractor or manufacturing
contractor (collectively "Agents") or permits an Agent to have access to such
Confidential Information, such party shall indemnify the other party for any
claims, damages, losses, liabilities, costs or expenses, including reasonable
attorneys' fees, incurred by the other party as a result of the indemnifying
party's Agent further disclosing or misusing such Confidential Information.

                                       8
<PAGE>

8.       TERM AND TERMINATION

8.1      [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

8.2      In the event either party commits a material breach or defaults in the
performance or observance of any of the material provisions of this License
Agreement, and such breach or default is not cured within ninety (90) days after
the receipt of notice thereof from the other party specifying such breach or
default, the party not in breach or default shall be entitled (without prejudice
to any of its other rights) following arbitration and determination of material
breach, to terminate this License Agreement, without additional penalty,
termination fee or cost, by giving notice to take effect immediately.
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]. The parties agree that a material
breach is a serious breach of a party's obligations such that the nature of the
transaction would be significantly modified or the economics underlying this
License Agreement would be significantly and negatively impacted.

         8.2.1 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

8.3      [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

8.4      [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

8.5      The termination of this License Agreement by either party shall not
release either party from any obligation that matured prior to the effective
date of the termination.

8.6      The confidentiality provisions set forth in Article 7 hereof shall
survive the termination or expiration of this License Agreement as set forth
therein.

8.7      Except as otherwise expressly provided in this License Agreement,
upon a termination of this License Agreement:

         8.7.1 All licensed rights under the Patents, Trademarks and Know-How
granted to NCH shall terminate and revert to GalaGen, and NCH shall not make any
use whatsoever of said rights, nor sell any Products in the Territory, except as
expressly provided for elsewhere in this License Agreement.

         8.7.2 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

         8.7.3 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

                                       9
<PAGE>

         8.7.4 Except as otherwise set forth herein, termination under this
Article 8 shall be without prejudice to and shall not affect the right of either
party to recover any and all damages to which it may be entitled, or exercise
any other remedies which it may otherwise have under this License Agreement.

9.       PATENTS AND TRADEMARKS

         GalaGen shall undertake and shall bear all costs of the prosecution and
maintenance of the Patents and Trademarks in the Territory. GalaGen shall employ
reasonable efforts to keep NCH fully and timely informed, at NCH's reasonable
expense, in respect to the course and conduct of the patent application
prosecution matters within the scope of the Patents licensed under this License
Agreement and such information (to which the obligation of confidentiality
applies) disclosed pursuant to this Article 9 shall be Confidential Information
for purposes of Article 7 hereof.

10.      INFRINGEMENT OF PATENTS AND TRADEMARKS

10.1     If either party shall become aware of any material infringement of any
Patent or Trademark in the Territory, then the party having such knowledge shall
give notice to the other within ten (10) days of becoming aware of such
infringement and the basis therefor.

10.2     Subject to Section 10.3 hereof, GalaGen shall have the sole right to
take such action, as it deems appropriate and reasonable, whether by action,
suit, proceeding or otherwise, at its own expense, to prevent or eliminate
the infringement of the Patents or Trademarks by others and to collect
damages. NCH agrees to cooperate with GalaGen in any reasonable manner in an
action brought by GalaGen. GalaGen agrees to pay all reasonable out-of-pocket
expenses incurred by NCH as a result of NCH's cooperation at GalaGen's
request in the prosecution of any such action, suit or proceeding for
infringement. GalaGen shall be entitled to retain any damages recovered by
bringing the action for patent infringement.

10.3      [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

11.      INFRINGEMENT OF THIRD PARTY RIGHTS

11.1     If either party to this License Agreement shall become aware of any
action, or suit, or receive a written threat of action or suit, by a third
party alleging that the manufacture, use, marketing, distribution, offer for
sale or sale of any Licensed Ingredients infringes a patent or trademark, or
violates any other proprietary rights of any third party, the party aware of
same shall notify the other party of the same and fully disclose the basis
therefor within ten (10) days of becoming aware of such action, or suit, or
threat of such action or suit.

                                       10

<PAGE>

11.2 GalaGen shall have the right, but not the obligation: (a) to secure a
license, at GalaGen's expense, with the right to sublicense, which would obviate
the alleged infringement and GalaGen shall grant to NCH, at no additional cost,
a sublicense under such license; or (b) to develop at GalaGen's expense one or
more substitute Licensed Ingredients acceptable to NCH which are free of the
alleged infringement. NCH shall cooperate at NCH's reasonable expense in such
development, and in negotiations for such license, as GalaGen may reasonably
request.

11.3 In the event GalaGen elects not to exercise its rights under Section 11.2
within ninety (90) days of receiving notice of such claim, or otherwise notifies
NCH within such ninety (90) days that it does not intend to exercise such right,
NCH shall have the right to defend any such claim at its own expense and sole
discretion as to the control, conduct and prosecution of such defense.
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]

11.4 Nothing in this Article 11, or in Article 10 hereof, shall be construed as
a waiver or cure of any breach of any warranties set forth in Article 6 hereof
or any release of any claim by NCH as may be appropriate relating thereto.

12.      DISPUTE RESOLUTION

If a claim of breach, nonperformance, nonpayment or repudiation should arise
related to or connection with this License Agreement (a "DISPUTE"), the parties
shall attempt to resolve the matter (a) within sixty (60) days from the date
that the party raising the Dispute notifies the other party in writing of the
Dispute, or (b) if this License Agreement specifies a cure period for the
subject of the Dispute, (b) within such cure period. If the parties do not
resolve the Dispute within the sixty (60) day period or relevant cure period, as
appropriate, then the parties agree to submit the matter to binding arbitration
administered by the American Arbitration Association under its Commercial
Arbitration Rules by a panel of three mutually agreeable qualified arbitrators.
GalaGen and NCH agree to make available to the arbitrators on a confidential
basis any information, test results, or research in either party's possession
related to the subject of the Dispute in addition to supplying any other
information requested or necessary to allow the arbitrators to deliver an
opinion, which shall be rendered within forty-five (45) days of selection of the
full panel or such additional time as the arbitrators reasonably need. The
arbitrators shall be required to provide to the parties a written summary of
their findings and the facts and law on which their decision is based.

13.      NOTICES

All notices required or permitted hereunder shall be given in writing and sent
by facsimile transmission, or mailed postage prepaid by first class certified or
registered mail, or sent by a nationally recognized express courier service, or
hand delivered or sent by facsimile at the following addresses:

         Novartis Consumer Health, Inc.

                                       11
<PAGE>

         560 Morris Avenue
         Summit, New Jersey 07901-1312
         Attention: General Counsel

         GalaGen Inc.
         1275 Red Fox Road
         Arden Hills, Minnesota 55112
         Attention: Henry J. Cardello

Any notice, if mailed properly addressed, postage prepaid, shall be deemed made
three (3) days after the date of mailing as indicated on the certified or
registered mail receipt, or on the next business day if sent by express courier
service or on the date of delivery or transmission if hand delivered or sent by
facsimile transmission.

14.      FORCE MAJEURE

Neither party shall be responsible or liable to the other hereunder for failure
or delay in performance of this License Agreement due to any war, fire, flood,
accident or other casualty, or any labor disturbance or act of God or the public
enemy, or any other contingency beyond such party's reasonable control. In
addition, in the event of the applicability of this Article 13, the party
affected by such force majeure shall use reasonable efforts, consistent with
good business judgment, to eliminate, cure and overcome any of such causes and
resume performance of its obligations.

15.      PUBLICITY

GalaGen and NCH agree not to issue any press release or other public statement
disclosing the existence of or relating to this License Agreement without prior
written consent of the other party; PROVIDED, HOWEVER, that neither GalaGen nor
NCH shall be prevented from complying with any duty of disclosure it may have
pursuant to law (including SEC regulations) subject to notifying the other party
in writing and giving such other party reasonable time to comment on the same
prior to disclosure.

16.      ASSIGNMENT

This License Agreement and all rights and obligations hereunder are personal to
the parties hereto and may not be assigned without the express prior written
consent of the other party. Any assignment or attempt at same in the absence of
such prior written consent shall be void and without effect; PROVIDED, HOWEVER,
either party may assign this License Agreement to an Affiliate or any successor
by merger or sale of all or substantially all of its business units to which
this License Agreement relates without such consent. This License Agreement
shall be binding upon the successors and permitted assigns of the parties and
the name of a party appearing herein will be deemed to include the names of such
party's successors and permitted assigns to the extent necessary to carry out
the intent of this License Agreement.

                                       12
<PAGE>

17.      GOVERNING LAW

This Agreement shall be governed by, and construed in accordance with, the laws
of the State of New Jersey as though made and to be fully performed in said
State.

18.      SEVERABILITY

If any one or more of the provisions of this License Agreement shall be held to
be invalid, illegal or unenforceable, the validity, legality or enforceability
of the remaining provisions hereof shall not in any way be affected or impaired
thereby. In the event any provision shall be held invalid, illegal or
unenforceable, the parties shall use commercially reasonable efforts to
substitute a valid, legal and enforceable provision which, insofar as possible,
implements the purposes hereof.

19.      MISCELLANEOUS

19.1 GalaGen must inform NCH in writing of GalaGen's intention to file a
voluntary petition in bankruptcy or of another's intention to file an
involuntary petition in bankruptcy in respect to GalaGen at least thirty (30)
days prior to the filing of such a petition; PROVIDED, HOWEVER, if GalaGen is
not aware of another's intention to file an involuntary petition in bankruptcy
in respect of GalaGen thirty (30) days prior to the filing of such petition,
GalaGen shall inform NCH in writing of such other party's intention to file as
soon as reasonably possible after GalaGen becomes aware of it. Upon receipt of
such notice, NCH in its sole discretion shall have the option of terminating
this License Agreement upon sixty (60) days' written notice to GalaGen, unless
GalaGen refrains from filing its petition, withdraws its petition, prevents the
other party from filing its involuntary petition or obtains dismissal of the
petition, as the case may be, during this sixty (60) day period. The filing of
such petition without conforming to this requirement shall be deemed a material,
pre-petition incurable breach of this License Agreement.

19.2 The failure of any party hereto at any time or times to require performance
of any provisions hereof shall in no manner affect its rights to enforce such
provision at a later time.

20.      INDEPENDENT CONTRACTORS

The parties shall perform their obligations under this License Agreement as
independent contractors and nothing contained in this License Agreement shall be
construed to be inconsistent with such relationship or status. This License
Agreement shall not constitute, create or in any way be interpreted as a joint
venture or partnership of any kind.

21.      COUNTERPARTS

This License Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, and all of which together shall constitute
one and the same instrument.

                                       13
<PAGE>

22.      ENTIRE AGREEMENT

This License Agreement, together with the Supply Agreement and the Product
Development Agreement, constitute the entire understanding between the parties
relating to the subject matter thereof, and no amendment or modification to this
License Agreement shall be valid or binding upon the parties unless made in
writing and signed by the representatives of such parties.

                                       14
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this License
Agreement to be executed as of the date first written above by their duly
authorized officers.

NOVARTIS CONSUMER HEALTH, INC.      GALAGEN INC.

By:     /s/ Al Piergallini                    By:      /s/ H.J. Cardello
        -------------------                            -------------------

Name:   Al Piergallini                        Name:    H.J. Cardello
        -------------------                            -------------------

Title:  President & CEO                       Title:   President
        --------------------                           -------------------

                                       15<PAGE>

                                                                   EXHIBIT 10.39

                                SUPPLY AGREEMENT

                                     BETWEEN

                         NOVARTIS CONSUMER HEALTH, INC.

                                       AND

                                  GALAGEN, INC.

                                                         Dated: October 25, 1999

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>

SECTION                                                                                                            PAGE
-------                                                                                                            ----
<S>                                                                                                                <C>
     Dated: October 25, 1999.........................................................................................1
1.   Definitions.....................................................................................................2
2.   Purchase and Sale; Licensed Ingredients Specifications..........................................................3
3.   Price; Payment; Miscellaneous Terms and Conditions of Sale......................................................4
4.   Forecasts; Shipments; Orders....................................................................................5
5.   Inspection of Shipments.........................................................................................6
6.   Trade Secrets and Confidentiality...............................................................................7
7.   Safety and Health--Responsible Care.............................................................................9
8.   Quality of the Licensed Ingredients; Certain Regulatory Matters.................................................9
9.   Changes in ________________________'s Manufacturing Processes..................................................10
10.  Indemnification................................................................................................11
11.  Term and Termination...........................................................................................12
12.  Meeting Licensed Ingredients Supply Demands; Back-Up Supplier; Right to Manufacture............................13
13.  Dispute Resolution.............................................................................................12
14.  Recalls........................................................................................................14
15.  Insurance......................................................................................................14
16.  Environmental, Safety and Health Responsibilities..............................................................14
17.  Publicity......................................................................................................15
18.  Force Majeure..................................................................................................16
19.  Assignability..................................................................................................16
20.  Waiver; Severability...........................................................................................17
21.  Governing Law .................................................................................................17
22.  Notices........................................................................................................17
23.  Headings.......................................................................................................18
24.  Entire Agreement...............................................................................................19
25.  Parties' Relationship..........................................................................................19
26.  NCH Affiliates.................................................................................................19
27.  Counterparts...................................................................................................20
      Annex A - Licensed Ingredient Specifications..................................................................21
      Annex B - Logistics Lead Times/Obsolescence...................................................................23
</TABLE>

                                       1

<PAGE>

                               SUPPLY AGREEMENT

This Supply Agreement, including all attached Annexes which are incorporated and
made a part hereof, dated this 25th day of October, 1999 (the "Effective Date"),
by and between NOVARTIS CONSUMER HEALTH, INC., with offices at 560 Morris
Avenue, Summit, NJ 07901-1312 ("NCH"), and GALAGEN INC., with offices at 1275
Red Fox Road, MS 7420, Arden Hills, Minnesota 55112 ("GalaGen"), sets forth the
terms and conditions for the commercial supply of the Licensed Ingredients (as
defined in the License Agreement);

WHEREAS, NCH and GalaGen have simultaneously entered into the License Agreement,
that establishes all terms and conditions relating to the license exclusivity of
the Licensed Ingredients, and both parties desire to proceed to
commercialization of the Products (as defined in the License Agreement); and

WHEREAS, GalaGen owns or has rights to certain patents and know-how applicable
to the Licensed Ingredients and/or the Products; and

WHEREAS, GalaGen has the requisite experience and facilities to manufacture and
package the Licensed Ingredients; and

WHEREAS, NCH and its Affiliates wish to purchase commercial quantities of the
Licensed Ingredients from GalaGen, and GalaGen is willing to supply the Licensed
Ingredients exclusively to NCH and its Affiliates for use in the Products in the
Field of Use (as defined in the License Agreement) and in the Territory, in each
case, upon the terms and conditions set forth herein;

NOW, THEREFORE, the parties hereto agree as follows:

1.        DEFINITIONS

The following terms shall have the meanings set forth below, or where indicated,
for purposes of this Agreement. Defined terms used, but not defined, herein
shall have the meaning assigned to them in the License Agreement.

"ACT" means the U.S. Food, Drug and Cosmetic Act and the regulations promulgated
thereunder, as amended from time to time and all other applicable laws and
regulations in any other Territory.

"BACK-UP SUPPLIER" shall have the meaning given thereto in Section 12.1 hereof.

"CGMP" means current good manufacturing practices for food products as required
by the Act.

                                       2

<PAGE>

"COMMERCIAL QUANTITIES" means quantities of the Licensed Ingredients sufficient
for launch and on-going market supply in the Territory consistent with the
forecasting mechanism set forth in Article 4 of this Agreement.

"CONFIDENTIAL INFORMATION" shall have the meaning given thereto in Section
6.1hereof.

"FDA" means the United States Food and Drug Administration.

"GALAGEN INDEMNIFIED PARTIES" shall have the meaning given thereto in Section
10.2 hereof.

"INITIAL TERM" shall have the meaning given thereto in Section 11.1 hereof.

"MANUFACTURING PROCESS" means the processes, means and procedures used by
GalaGen and/or a Third Party Manufacturer in the manufacture and production of
the Licensed Ingredients.

"NCH INDEMNIFIED PARTIES" shall have the meaning given thereto in Section 10.1
hereof.

"NCH MANUFACTURING FACILITY" shall mean a manufacturing and/or packaging
facility of NCH or a NCH Affiliate.

"ORDER DATE" shall have the meaning given thereto in Section 4.1(b) hereof.

"QUALITY ASSURANCE AGREEMENT" shall mean the Quality Assurance Agreement, to be
entered into between GalaGen and NCH.

"RELEASE DATE" shall have the meaning given thereto in Section 4.2(b) hereto.

"TECHNICAL INFORMATION" means all know how, trade secrets, inventions, data,
technology and other information now owned or licensed by GalaGen or hereafter
acquired or licensed by GalaGen during the term of this Agreement which are
necessary or useful to the manufacture, packaging, use or sale of Licensed
Ingredients and/or the Products including, but not limited to, (i) medical,
chemical and other scientific data, (ii) processes and analytic methodology used
in the validation, stability testing and other testing or analysis of such
Licensed Ingredients and/or the Products and (iii) packaging and manufacturing
data and processes.

"THIRD PARTY MANUFACTURER" shall mean a third party manufacturer, reasonably
acceptable to NCH, retained by GalaGen to manufacture either or both of the
Licensed Ingredients.

2.       PURCHASE AND SALE; LICENSED INGREDIENTS SPECIFICATIONS

2.1 (a) Except as otherwise specifically permitted in this Agreement, during
the term of this Agreement, and subject to the provisions hereof, GalaGen
agrees to manufacture, package, and supply the Licensed Ingredients for use
in the Products in the Field of Use exclusively to NCH and

                                       3

<PAGE>

its Affiliates in sufficient quantities to meet the total requirements,
consistent with the forecasting mechanism set forth in Article 4 of this
Agreement, of NCH and its Affiliates for use in the Territory, and NCH agrees
to purchase from GalaGen all of its requirements for the Licensed Ingredients.

    (b) Except as otherwise specifically permitted in Article 12 of this
Agreement, GalaGen shall manufacture, package and supply the Licensed
Ingredients for use in the Field of Use exclusively for NCH for the term of
this Agreement, including all renewal periods.

2.2 (a) GalaGen and/or the Third Party Manufacturer shall manufacture and
package the Licensed Ingredients supplied to NCH in accordance with mutually
agreed upon specifications to be attached as ANNEX A to this Agreement (the
"Specifications"), as ANNEX A is updated from time to time. Once established, no
change in the specifications, methods, processes and/or procedures set forth in
ANNEX A may be made unless (i) NCH agrees in writing thereto or (ii) such change
is required by any regulatory agency which has jurisdiction over NCH, GalaGen,
the Licensed Ingredients and/or the Products; PROVIDED THAT, GalaGen shall
notify NCH in writing prior to making any such required change. Any such change
must also be made in compliance with Article 9 hereof.

3. PRICE; PAYMENT; MISCELLANEOUS TERMS AND CONDITIONS OF SALE

3.1 Pricing for commercial quantities of the Licensed Ingredients shall be :

    [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

3.2 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***]

3.3 NCH shall have the right to review the relevant books and records of
GalaGen, during regular business hours upon reasonable advance notice, to
determine if it agrees, acting reasonably, that such increase or decrease in the
actual Cost of Production is accurate. In the event that GalaGen has a Third
Party Manufacturer produce some or all of the Licensed Ingredients to be
supplied to NCH, GalaGen shall use its best efforts to obtain the relevant books
and records of the Third Party Manufacturer for review by NCH.

    (a) For the most recent calendar year in question, if NCH believes that
the estimated increase or decrease in the actual Cost of Production is not
accurate, it shall bring the believed inaccuracy to GalaGen's attention to
try to resolve the discrepancy. If NCH and GalaGen agree that GalaGen
overestimated the actual increase in Cost of Production or underestimated the
actual decrease in Cost of Production, the price charged by GalaGen to NCH
shall be adjusted accordingly, GalaGen shall reimburse NCH for the
overpayments made, and GalaGen will

                                       4

<PAGE>

reimburse NCH for its reasonable costs incurred in its review of GalaGen's
and the Third Party Manufacturer's books and records.

     (b) If NCH and GalaGen do not come to agreement on what the actual
increase or decrease in the Cost of Production is, NCH shall have the right
to have the relevant books and records of GalaGen examined by independent
certified public accountants retained by NCH and acceptable to GalaGen,
during regular business hours upon reasonable advance notice. If it is
determined as a result of said examination that GalaGen overestimated the
actual increase in Cost of Production or underestimated the actual decrease
in Cost of Production, the price charged by GalaGen to NCH shall be adjusted
accordingly, GalaGen shall reimburse NCH for the overpayments made and
GalaGen shall reimburse NCH for the cost of the third party audit. In the
event that GalaGen has a Third Party Manufacturer produce some or all of the
Licensed Ingredients to be supplied to NCH, GalaGen shall use its best
efforts to obtain the relevant books and records of the Third Party
Manufacturer for review by the third party auditor.

3.4 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

3.5 NCH and GalaGen shall confer on a regular basis, but no less than annually,
to consider whether new technologies or new manufacturing methods may exist
which likely would reduce the Cost of Production of the Licensed Ingredients.
Should any such technologies and/or methods be identified, then the parties
shall share the mutually agreed upon costs of developing and implementing such
technologies and/or methods, and the proceeds from any resulting reductions in
Cost of Production in amounts to be agreed upon.

3.6 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***]

4. FORECASTS; SHIPMENTS; ORDERS

4.1 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***]

4.2 (a) Each purchase order shall specify the quantity of Licensed
Ingredients ordered and the required delivery date; PROVIDED THAT, such purchase
order shall not specify a delivery date sooner than the lead times set forth in
ANNEX B would permit calculated from the Order Date; PROVIDED FURTHER THAT,
GalaGen shall use commercially reasonable efforts to accommodate "Rush" orders
from NCH. NCH shall bear the reasonable incremental costs of "Rush" orders.
Transportation details will be coordinated between NCH and GalaGen.

    (b) When all appropriate validation and quality control release criteria
for a particular shipment of Licensed Ingredients, as set forth in the
Quality Assurance Agreement, have been met (the "NCH Release Date"), GalaGen
shall promptly notify NCH in writing of the expected delivery

                                       5
<PAGE>

dates (including details of destination, date and time) to enable delivery
and receipt to be coordinated. [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

4.3   If for any reason GalaGen experiences a shortage of materials required to
manufacture products and GalaGen is therefore unable to supply NCH with the full
quantity of Licensed Ingredients ordered by it and accepted by GalaGen, NCH
shall be entitled to the same proportionate quantity of available GalaGen
product as the quantity of Licensed Ingredients purchased by NCH from GalaGen in
the twelve (12) months preceding the supply shortage bears to all orders for
applicable products received by GalaGen from other customers.

4.4   GalaGen agrees to use commercially reasonable best efforts to maintain
available manufacturing and packaging capacities dedicated to NCH and their
current forecasted production requirements. (Refer to section 4.1)

4.5   [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

4.6   The Licensed Ingredients shall be delivered to NCH as packed finished
goods. In addition, NCH shall have the right to require any special or varied
packing that it believes is reasonably necessary to meet the customs and
regulatory requirements within the Territory. Incremental costs that can be
shown to result directly from any packing changes required by NCH will be
borne by NCH.

5.    INSPECTION OF SHIPMENTS

[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]

6.    TRADE SECRETS AND CONFIDENTIALITY

6.1   Both GalaGen and NCH agree that subject to the limitations set forth in
Section 6.3, all information disclosed to the other party, whether in oral,
written or graphic form, and identified in writing by the disclosing party as
confidential shall be deemed "Confidential Information" of the disclosing party.
In particular, Confidential Information shall be deemed to include, but not be
limited to any patent application or drawing or potential patent claim, trade
secrets, information, ideas, inventions, samples, processes, procedures,
methods, formulations, packaging designs and materials, test data, future
development plans, Licensed Ingredients launch date, technological know-how and
engineering, manufacturing, regulatory, marketing, servicing, sales, financing
or human resources matters relating to the disclosing party and its business.

6.2   Both parties will take precautions as it normally takes with its own
confidential and proprietary information to prevent disclosure to third parties.

                                   6
<PAGE>

6.3   Both GalaGen and NCH agree that, notwithstanding the above, the
obligations of confidentiality shall not be deemed to apply to:

         6.3.1  Information which at the time of disclosure is or thereafter
becomes generally known or available to the public, through no wrongful act or
failure to act on the part of the receiving party.

         6.3.2  Information that was known by or in the possession of the
receiving party at the time of receiving such information from the disclosing
party as evidenced by written records.

         6.3.3  Information obtained by the receiving party from a third-party
source who is not breaching a commitment of confidentiality to the disclosing
party by revealing such information to the receiving party.

         6.3.4  Information that is independently developed by the receiving
party without use of confidential information of the other party as evidenced by
written records.

         6.3.5  Information that is the subject of a granted written
permission to disclose that is issued by the disclosing party to the other
party.

         6.3.6  Information that is required to be disclosed pursuant to the
law (including SEC regulations), but only to the extent required to be
disclosed; PROVIDED THAT, the disclosing party notifies the other party in
writing and gives the other party reasonable time to comment on the same prior
to disclosure.

6.4   During the term of this Agreement and for a period of five (5) years after
the expiration or termination of this Agreement each party shall maintain all
Confidential Information in trust and confidence and shall not disclose any
Confidential Information to any third party or use any such information for any
unauthorized purpose, other than as authorized in Section 6.3 or as necessary to
accomplish the purpose of this Agreement subject to an appropriate binder of
confidentiality as set forth in Section 6.5. Each party may use such
Confidential Information only to the extent required to accomplish the purposes
of this Agreement. Confidential Information shall not be used for any purpose or
in any manner that is not consistent with this Agreement or that would
constitute a violation of any laws or regulations including, without limitation,
the export control laws of the United States. Each party hereby agrees that it
will not in any way attempt to obtain, either directly or indirectly, any
information regarding any Confidential Information from any third party who has
been employed by, provided consulting services to, or received in confidence
information from, the other party.

6.5   Both parties will make diligent efforts to ensure that all employees,
consultants, agents, subcontractors and manufacturing contractors who may have
access to Confidential Information of the other party, and any other third
parties who might have access to Confidential Information, will use such
information in a manner consistent with the terms of this Agreement and will be
bound by

                                   7
<PAGE>

the terms set forth in this Article 6. No Confidential Information
shall be disclosed to any employees, subcontractors, agents or consultants who
do not have a need to receive such information.

6.6   To the extent either party discloses confidential information of the other
party to an employee, consultant, subcontractor or manufacturing contractor
(collectively "Agents") or permits an Agent to have access to such confidential
information, such party shall indemnify the other party for any claims, damages,
losses, liabilities, costs or expenses, including reasonable attorneys' fees,
incurred by the other party as a result of the indemnifying party's Agent
further disclosing or misusing such confidential information.

7.    SAFETY AND HEALTH--RESPONSIBLE CARE

7.1   From time to time GalaGen may provide NCH with safety and health
information, including, without limitation, warnings, material safety data
sheets, precautionary safety measures, and instructions on proper care, use and
handling, storage, and disposal of the Licensed Ingredients. NCH agrees to
observe all precautions and instructions provided by GalaGen and to communicate
all such environmental, safety and health information to its employees.

7.2   Both parties shall follow safe handling, storage, transportation, use, and
disposal practices with respect to the Licensed Ingredients, including, but not
limited to, those required by U.S. federal, state, and local laws, regulations,
and ordinances.

8.    QUALITY OF THE LICENSED INGREDIENTS; CERTAIN REGULATORY MATTERS

8.1   GalaGen hereby represents and warrants that:

         (a)  the Licensed Ingredients shall be manufactured, packaged and
delivered in compliance with the provisions of the Act and FDA's current GMP for
foods and the other applicable rules and regulations promulgated under the Act
relating to the manufacture and packaging of food products;

         (b)  no Licensed Ingredients constituting any shipment to NCH shall
be at the time of shipment (i) adulterated or misbranded within the meaning of
the Act, or the rules and regulations promulgated thereunder, as such law, rule
or regulation is constituted and in effect at the time of any such shipment or
(ii) an article which may not, under the provisions of Sections 404, 505 or 512
of the Act, be introduced into interstate commerce;

         (c)  the Licensed Ingredients shall be manufactured, tested,
packaged, stored and delivered in compliance with the terms and conditions of
the Quality Assurance Agreement;

         (d)  it has complied with, and during the term of this Agreement
will continue to comply with, the laws, rules and regulations which affect the
ability of GalaGen to manufacture and

                                   8
<PAGE>

package the Licensed Ingredients in commercial quantities for use and sale in
the Field of Use in the United States of America;

         (e)  its manufacturing, laboratory and packaging facilities shall
remain in compliance with the FDA's current GMPs for foods at all times during
the term of this Agreement to the extent applicable to the manufacture and
packaging of the Licensed Ingredients; and

         (f)  it shall obtain and maintain all necessary permits,
registrations and licenses required to manufacture, package and supply the
Licensed Ingredients and it shall produce the Licensed Ingredients and dispose
of all waste in compliance with all applicable environmental laws, regulations,
and standards. GalaGen makes no representations with respect to the waste
disposal practices of its suppliers.

The foregoing warranties are the only warranties made by GalaGen with respect to
the Licensed Ingredients delivered hereunder, and may only be modified or
amended by a written instrument signed by a duly authorized officer of GalaGen
and a duly authorized officer/employee of NCH. EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED IN THIS AGREEMENT, EACH PARTY MAKES NO WARRANTY, EXPRESS OR IMPLIED,
CONCERNING THE LICENSED INGREDIENTS, OR THE MERCHANTABILITY OR FITNESS THEREOF
FOR ANY PURPOSE.

8.2   [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

8.3   If requested in writing by NCH, GalaGen shall supply at NCH's reasonable
expense Technical Information and methods of manufacture and packaging to NCH to
enable NCH to fulfill its obligations under this Agreement or to the extent that
such information, in NCH's judgment, is necessary to enable it to comply with
any statutory or regulatory requirements, or with a request by any governmental
or regulatory authority.

8.4   (a)  If requested in writing by NCH, GalaGen shall permit NCH to
inspect, twice per year, during normal business hours and hours during which
GalaGen is manufacturing Licensed Ingredients, GalaGen's facilities and records
to the extent NCH deems reasonably necessary to enable NCH to verify compliance
by GalaGen with its obligations under this Agreement in relation to the Licensed
Ingredients and to verify compliance with any statutory or regulatory
requirements to which NCH is subject and which are applicable to the manufacture
and/or packaging of the Licensed Ingredients. Notwithstanding the foregoing, NCH
shall have the right to inspect GalaGen's facilities and records at any time
without prior written notice, in the event that there is a quality or regulatory
problem or other manufacturing problem with Licensed Ingredients. In the event
that GalaGen has a Third Party Manufacturer produce some or all of the Licensed
Ingredients to be supplied to NCH, GalaGen shall use its best efforts to gain
access for NCH to the Third Party Manufacturer' facility to conduct such audits.

                                   9
<PAGE>

         (b)  If, as a result of any such inspection, NCH concludes that
GalaGen and/or the Third Party Manufacturer is not in compliance with any of the
foregoing obligations or requirements, it shall so notify GalaGen in writing,
specifying such areas of noncompliance in reasonable detail and GalaGen shall
provide a problem resolution plan within thirty (30) days of NCH's request.
GalaGen shall use its best efforts to remedy and/or provide an action plan with
an actual time line for the problems identified within a reasonably mutually
agreed upon time frame.

9.    CHANGES IN GALAGEN'S MANUFACTURING PROCESSES

9.1   Subject to Section 2.2(a)(ii) hereof and the Quality Assurance Agreement,
unless NCH agrees otherwise in writing, GalaGen shall not make any modification
to any method or process in the manufacture or packaging of the Licensed
Ingredients that will affect the quality, properties or composition of the
Licensed Ingredients. Any change requires NCH's QA prior written consent. If NCH
consents to such modification or change, GalaGen shall comply with all
requirements of the Act and current GMP for foods with respect to such
modification or change.

9.2   GalaGen hereby covenants that, to GalaGen's knowledge, its process for
manufacturing and packaging the Licensed Ingredients does not infringe any
process patent in effect in the Territory. GalaGen shall not modify the Licensed
Ingredients or any process for manufacturing and packaging the Licensed
Ingredients in any manner that would give rise to any patent infringement
liability. If NCH determines that the change may give rise to patent
infringement liability, it shall be permitted to object thereto. If NCH does so
object, GalaGen either shall refrain from introducing such change or,
notwithstanding any other provision of this Agreement, shall defend, indemnify
and hold NCH harmless with respect to the potential infringement liability.

10.   INDEMNIFICATION

10.1  GalaGen agrees to and hereby does indemnify, defend and hold NCH, NCH's
Affiliates, its officers, directors and shareholders, and its successors and
assigns (collectively the "NCH Indemnified Parties") harmless from and against
all claims, liabilities, suits and proceedings, and all damages (other than
consequential, incidental, special or indirect damages), losses, costs,
recoveries and expenses, including reasonable legal expenses and costs
(including attorney's fees) which the NCH Indemnified Parties may incur, arising
out of any third party claim of property damage or personal injury or death
arising from (i) GalaGen's negligent or willful misconduct in its performance
under this Agreement or (ii) GalaGen's breach of any obligation, representation
or warranty hereunder.

10.2   NCH agrees to and hereby does indemnify, defend and hold GalaGen,
GalaGen's Affiliates, its officers, directors and shareholders, and its
successors and assigns (collectively the "GalaGen Indemnified Parties")
harmless from and against all claims, liabilities, suits and proceedings, and
all damages (other than consequential, incidental, special or indirect
damages), losses, costs, recoveries and expenses, including reasonable legal
expenses and costs (including attorneys' fees) which the GalaGen Indemnified
Party may incur, arising out of any third party claim of property damage or

                                   10
<PAGE>

personal injury or death arising from (i) NCH's negligent or willful misconduct
in its performance under this Agreement or in the marketing and/or sale of the
Products or (ii) NCH's breach of any obligation, representation or warranty
hereunder.

10.3 The foregoing indemnification obligations of NCH and GalaGen are subject to
the following: (a) the indemnifying party must be notified by or on behalf of
the indemnified party in writing promptly after a claim is made, a suit is filed
or an action or investigation is initiated (each, a "Proceeding") against the
indemnified party; (b) the indemnifying party shall be permitted, at its own
cost, to defend, control, conduct and prosecute, in the indemnifying party's
sole discretion and by counsel of the indemnifying party's choosing, the defense
of such Proceeding brought against the indemnified party; (c) except as may
otherwise be required by law, the indemnified party shall not compromise the
position of the indemnifying party by admission, statements, disclosure or
conduct (collectively, "Disclosure") in a way that could prejudice the defense,
control, conduct or prosecution of said cause of action (it being understood
that no indemnified party shall be deemed to have violated this provision so
long as such party has acted in good faith to fulfill its obligations under this
provision); and (d) the indemnified party shall cooperate with the indemnifying
party in the defense, conduct, prosecution or termination of the Proceeding,
including the furnishing of information and the assistance from employees of the
indemnified party at the indemnifying party's reasonable request and at no
charge to the indemnifying party. With respect to clause (c) above, the
indemnified party will provide the indemnifying party with prompt written notice
in advance of any such Disclosure being made to permit the indemnifying party to
seek an appropriate protective order, restriction on response or withdrawal of
the request for Disclosure. If, however, any such request for relief by the
indemnifying party is denied or is otherwise unavailable, the relevant
indemnified party may make the disclosure without any liability to the
indemnifying party.

11.      TERM AND TERMINATION

         11.1 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

         11.2 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

         11.3 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

         11.4 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]

11.5 The termination of this Agreement shall not release NCH from the obligation
to pay any sum that may be owed to GalaGen or operate to discharge any liability
that had been incurred by any party prior to any such termination, including
sums incurred in connection with the manufacture of Licensed Ingredients in
process at the time of the termination. The termination of

                                      11
<PAGE>

this Agreement shall be without prejudice to and shall not affect the right of
either party to recover any and all damages to which it may be entitled, or to
exercise any other remedies which it might otherwise have under this Agreement.

11.6 Notwithstanding any termination of this Agreement, the provisions of
Articles 6, 8, 10, 12, 14, and 15 shall remain in effect.

12.      MEETING LICENSED INGREDIENTS SUPPLY DEMANDS; BACK-UP SUPPLIER; RIGHT TO
         MANUFACTURE

[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]

13.      DISPUTE RESOLUTION

If a claim of breach, nonperformance, nonpayment or repudiation should arise
related to or connection with this Agreement (a "DISPUTE"), the parties shall
attempt to resolve the matter (a) within sixty (60) days from the date that the
party raising the Dispute notifies the other party in writing of the Dispute, or
(b) if this Agreement specifies a cure period for the subject of the Dispute,
(b) within such cure period. If the parties do not resolve the Dispute within
the sixty (60) day period or relevant cure period, as appropriate, then the
parties agree to submit the matter to binding arbitration administered by the
American Arbitration Association under its Commercial Arbitration Rules by a
panel of three qualified arbitrators. GalaGen and NCH agree to make available to
the arbitrators on a confidential basis any information, test results, or
research in either party's possession related to the subject of the Dispute in
addition to supplying any other information requested or necessary to allow the
arbitrators to deliver an opinion, which shall be rendered within forty-five
(45) days of selection of the full panel or such additional time as the
arbitrators reasonably need. The arbitrators shall be required to provide to the
parties a written summary of their findings and the facts and law on which their
decision is based.

14.      RECALLS

Licensed Ingredients recalls shall be handled in accordance with the Quality
Assurance Agreement.

15.      INSURANCE

GalaGen shall obtain and maintain an insurance policy of at least Two Million
Dollars ($2,000,000) in aggregate which covers any and all potential claims,
suits, losses expenses or damages arising out of GalaGen's manufacturing and
packaging obligations under this Agreement. The insurance policy shall name NCH
as an additional insured. Upon NCH's request, GalaGen shall furnish NCH with
certification of insurance evidencing the foregoing, and shall provide at least
thirty (30) days prior written notice to NCH of cancellation or modification.

                                      12
<PAGE>

16.      ENVIRONMENTAL, SAFETY AND HEALTH RESPONSIBILITIES

16.1 To the extent applicable to GalaGen's activities, GalaGen represents and
warrants, and shall take all actions reasonably necessary to ensure, that all
facilities, equipment and practices used to perform its responsibilities under
this Supply Agreement by or on behalf of GalaGen hereunder, including those of
the Third Party Supplier and any of GalaGen contractors of any rank (including,
without limitation, environmental or safety and health consultants or waste
management or disposal firms) ("GalaGen Contractors") will be during the Term of
this Supply Agreement, in full compliance with all relevant health, safety and
environmental laws, statutes, ordinances, regulations, rules, permits and
pronouncements. GalaGen assumes responsibility for disposing of any and all
waste generated during the performance of its responsibilities under this Supply
Agreement (including, without limitation, during any manufacturing, storage and
transportation activities) in accordance with all relevant legal and
professional standards. Notwithstanding anything to the contrary herein, (i)
should GalaGen, the Third Party Supplier and/or any GalaGen Contractor fail to
comply with the obligations set forth in this paragraph, then GalaGen shall be
solely responsible for any claims, suits, or liabilities resulting therefrom
(including, without limitation, those based on strict liability and joint and
several liability), and GalaGen shall indemnify, defend and save NCH (including
officers, directors, employees and agents of NCH) harmless from and against any
and all such claims, suits, and liabilities; and (ii) GalaGen shall indemnify,
defend and save NCH (including officers, directors, employees and agents of NCH)
harmless from and against any and all claims, suits, and liabilities which arise
directly or indirectly from the storage, release, transportation or disposal of
chemicals, raw materials, Licensed Ingredients, waste or any other substance by
GalaGen, and/or any GalaGen Contractor. GalaGen's obligations to indemnify,
defend and save NCH harmless shall survive and continue after the termination of
this Agreement.

16.2 GalaGen shall Dispose of Waste only in accordance with this Section 16.2.
GalaGen shall only Dispose or arrange for the Disposal of Waste in the manner
consented to in writing by NCH in advance of the Disposal and at an Approved
Disposal Facility. NCH shall have the right to unilaterally modify any
designation of any Approved Disposal Facility at any time based upon audit and
inspection results. GalaGen shall only transport Waste to any Approved Disposal
Facility by means of a transporter lawfully permitted to transport the
particular types of Waste at issue. GalaGen shall be solely responsible for the
proper Disposal of Waste. For purposes of this Section, (i) "Dispose" or
"Disposal" shall mean any discharge, deposit, injection, dumping, spilling,
leaking, or placing of any Waste into or on any land or water and the
arrangement of any of the foregoing, and shall include any storage,
pretreatment, treatment (including incineration), any other actual disposal,
use, sale, sampling or other transfer or application of Waste of any kind or
nature whatsoever; (ii) "Waste" shall mean all materials that are produced or
generated in connection with the manufacture of any chemical compounds pursuant
to this Supply Agreement, including but not limited to materials that are
Hazardous Waste, co-product, by-product, chemical compounds that fail to conform
to the requirements of this Supply Agreement, wastewaters, residues, wastes,
bottoms and other remainders and materials, packaging of, or components of the
chemical compounds, and components of any chemical compounds that are not used
in the manufacture of

                                      13
<PAGE>

the chemical compounds; (iii) "Hazardous Waste" shall mean (a) any material or
substance defined as or containing materials defined as a "hazardous substance"
pursuant to any applicable laws or regulations, including the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, the Resource
Conservation and Recovery Act, as amended, and any similar successor or
supplementary legislation, and the regulations promulgated thereunder, or (b)
any material or substance that is radioactive; and (iv) "Approved Disposal
Facility" shall mean a disposal facility approved by NCH.

17.      PUBLICITY

GalaGen and NCH agree not to issue any press release or other public statement
disclosing the existence of or relating to this Agreement without prior written
consent of the other party; PROVIDED, HOWEVER, that neither GalaGen nor NCH
shall be prevented from complying with any duty of disclosure it may have
pursuant to law (including SEC regulations) subject to notifying the other party
in writing and giving such other party reasonable time to comment on the same
prior to disclosure.

18.      FORCE MAJEURE

18.1 No party shall be responsible or liable to the other hereunder for failure
or delay in the performance of this Agreement due to factors beyond its
reasonable control, including without limitation, any war, fire, accident,
earthquake or other casualty, or any act of God or the public enemy. Upon the
occurrence of an event of force majeure, the party failing or delaying
performance, shall promptly notify the other party, in writing, setting forth
the nature to the occurrence, its expected duration and how such party's
performance is affected. In the event of the applicability of this Section 17,
the party failing or delaying performance shall use its best efforts to
eliminate, cure and overcome any such causes and resume the performance of its
obligations as soon as practicable under the circumstances.

18.2 Except as provided below, if a force majeure event occurs, then the
affected party's performance shall be excused and the time for performance shall
be extended for the period of delay or inability to perform due to such
occurrence. If, however, any such event shall delay any shipment hereunder or
the receipt thereof for more than thirty (30) days beyond the scheduled delivery
date, then (a) if such event is suffered by NCH and not also by GalaGen, GalaGen
shall have the right, at its option, to cancel such shipment without incurring
any liability to NCH with respect thereto, and (b) if such event is suffered by
GalaGen and not also by NCH, NCH shall have the right to cancel its order and to
purchase from a third party the amount of Licensed Ingredients ordered without
incurring any liability to GalaGen with respect thereto until such time as
GalaGen is able to perform its obligations hereunder. If any such disability
exists for more than ninety (90) days, the party not under such disability may
terminate this contract without liability to the other party or parties by
giving such other party or parties thirty (30) days prior written notice of
termination, and this Agreement shall terminate on such thirtieth (30th) day
unless prior thereto the

                                      14
<PAGE>

force majeure event ceases to exist and performance under this Agreement resumes
and the party or parties giving the notice of termination is/are so notified in
writing.

19.      ASSIGNABILITY

Neither party hereto shall assign or otherwise transfer any of its rights or
obligations under this Agreement, in whole or in part, without the prior written
consent of the other party, except that either party may, without the necessity
for such consent, assign this Agreement or any interest herein or any right
hereunder, to any of its Affiliates or successors by merger or sale of all or
substantially all of its business unit to which this Agreement relates. This
Agreement shall be binding upon any permitted Assignee or successor of either
party. Any assignment that is not in accordance with this Article 18 will be
void.

20.      WAIVER; SEVERABILITY

20.1 Each party acknowledges and agrees that any party's failure to enforce at
any time any of the provisions of this Agreement shall not be deemed to be a
waiver of such provisions or of the right of such other party or parties
thereafter to enforce each and every such provision.

20.2 The rights and remedies set forth herein shall be the exclusive rights and
remedies of the parties, except that nothing herein shall limit the right of
GalaGen to be paid for Licensed Ingredients delivered to, and deemed accepted
by, NCH.

20.3 If and to the extent that any provision of this Agreement is determined by
any legislature, court or administrative agency to be in whole or in part
invalid or unenforceable, such provision or part thereof shall be deemed to be
surplusage and, to the extent not so determined to be invalid or unenforceable,
each provision hereof shall remain in full force and effect unless the purposes
of this Agreement cannot be achieved. In the event any provisions shall be held
invalid, illegal or unenforceable the parties shall use commercially reasonable
efforts to substitute a valid, legal and enforceable provision which insofar as
practical implements the purposes hereof.

21.      GOVERNING LAW

This Agreement shall be governed by, and construed in accordance with, the
internal laws of the State of New Jersey as though made and to be fully
performed in said State.

22.      NOTICES

All notices required or permitted hereunder shall be given in writing and sent
by facsimile transmission, or mailed postage prepaid by first class certified or
registered mail, or hand delivered to the following addresses:

NCH:                       Novartis Consumer Health, Inc.

                                      15
<PAGE>

                           560 Morris Avenue, Building F
                           Summit, NJ  07901

                           Attention:       Third Party Supply Department

Copy to:                   Novartis Consumer Health, Inc.
                           General Counsel
                           560 Morris Avenue
                           Summit, NJ  07901

GalaGen:                   GalaGen, Inc.
                           1275 Red Fox Road, MS 7420
                           Arden Hills, Minnesota 55112
                           Attention: Henry J. Cardello

Copy to:                   GalaGen, Inc.
                           1275 Red Fox Road, MS 7420
                           Arden Hills, Minnesota 55112
                           Attention: Vice President, Manufacturing

or to such other addresses as the parties may hereafter advise each other in
writing. Any notice, if sent properly addressed, postage prepaid, shall be
deemed made seven (7) days after the date of mailing as indicated on the
certified or registered mail receipt, or on the next business day if sent by
express courier service or if hand delivered or sent by facsimile transmission.

23.      HEADINGS

The headings of each section in this Agreement are intended for guidance only
and shall not be considered part of this written understanding between the
parties hereto.

24.      ENTIRE AGREEMENT

This Agreement, represents and incorporates the entire understanding among the
parties hereto with respect to the subject matter of this Agreement, and each
party acknowledges that there are no warranties, representations, covenants or
understandings of any kind, nature or description whatsoever made by any party
to the other or others, except such as are expressly herein above set forth.

24.2 This Agreement shall not be subject to change or modification unless
specifically agreed to in writing by both parties.

                                      16
<PAGE>

24.3 The parties recognize that, during the term of this Agreement, a purchase
order, acknowledgment form or similar routine document (collectively "Forms")
may be used to implement or administer provisions of this Agreement. Therefore,
the parties agree that the terms of this Agreement prevail in the event of any
conflict between this Agreement and the printed provisions of such Forms, or
typed provisions of Forms that add to, vary, modify or are at conflict with the
provisions of this Agreement.

25.      PARTIES' RELATIONSHIP

Nothing in this Agreement shall create among the parties a partnership, joint
venture or principal-agent relationship and, for the avoidance of doubt, both
parties now confirm they are independent contractors trading for and on their
own behalf.

26.      COUNTERPARTS

This Agreement may be executed in counterparts, each of which shall be deemed an
original, and all of which taken together shall constitute one and the same
instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

NOVARTIS CONSUMER HEALTH, INC.                    GALAGEN, INC.

By:     /s/ Al Piergallin        i                By:     /s/ H.J. Cardello
        --------------------------                        -------------------
Name:   Al Piergallini                            Name:   H.J. Cardello
        ---------------------------                       ------------------
Title:  President & CEO                           Title:  President
        --------------------------                        --------------

                                      17

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}]]