Exhibit 10.27
Certain confidential information in this document, marked by brackets, has been
omitted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
SECOND AMENDED AND RESTATED
LICENSE AGREEMENT
dated as of
July 3, 2006
between
ARADIGM CORPORATION
and
NOVO NORDISK A/S

 

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TABLE OF CONTENTS

                      Page  
 
  ARTICLE 1        
 
  Definitions        
 
           
Section 1.01.
  Definitions     2  
Section 1.02.
  Other Defined Terms     9  
Section 1.03.
  Other Definitional and Interpretative Provisions     9  
 
           
 
  ARTICLE 2        
 
  Rights and Obligations of the Parties        
 
           
Section 2.01.
  Development Program     10  
Section 2.02.
  Review Committee     10  
Section 2.03.
  Obligations of the Parties in Respect of the Review Committee     11  
Section 2.04.
  Responsibilities of the Review Committee     12  
Section 2.05.
  Diligent Efforts     12  
Section 2.06.
  Use Restrictions     13  
Section 2.07.
  Alternative Technology     13  
Section 2.08.
  Noncompetition     15  
Section 2.09.
  Product Liability     16  
 
           
 
  ARTICLE 3        
 
  Grant of License        
 
           
Section 3.01.
  License     16  
Section 3.02.
  Sublicense     16  
Section 3.03.
  Additional Licenses     16  
Section 3.04.
  Publicly Available Information     17  
 
           
 
  ARTICLE 4        
 
  Supply        
 
           
Section 4.01.
  Novo Nordisk Supply Obligations     18  
 
           
 
  ARTICLE 5        
 
  Royalty Payments        
 
           
Section 5.01.
  Royalty Payment     18  
Section 5.02.
  Royalty Payments Schedule     19  
Section 5.03.
  Additional Royalty Provisions     20  
Section 5.04.
  Record Keeping     20  
Section 5.05.
  Audit Right     21  
Section 5.06.
  Withholding Taxes     21  
Section 5.07.
  Currency     21  

i 

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                      Page  
 
  ARTICLE 6        
 
  Intellectual Property        
 
           
Section 6.01.
  Aradigm Intellectual Property Rights     22  
Section 6.02.
  Novo Nordisk Intellectual Property Rights     22  
Section 6.03.
  Notice by Aradigm     23  
Section 6.04.
  Notice by Novo Nordisk     24  
Section 6.05.
  Pursuit of Patents     25  
Section 6.06.
  License Option in Lieu of Ownership     26  
 
           
 
  ARTICLE 7        
 
  Patent Cooperation        
 
           
Section 7.01.
  Enforcement of Patent Rights     27  
Section 7.02.
  Initiation of Action Relating to Patents     27  
Section 7.03.
  Interferences     32  
Section 7.04.
  Defense and Settlement of Third Party Patent Claims     33  
Section 7.05.
  Sharing Of License Revenue     34  
 
           
 
  ARTICLE 8        
 
  Secrecy        
 
           
Section 8.01.
  Confidentiality     34  
Section 8.02.
  Publication Planning     36  
Section 8.03.
  Term of Confidentiality Provisions     36  
 
           
 
  ARTICLE 9        
 
  Notice        
 
           
Section 9.01.
  Notice     36  
Section 9.02.
  Deemed Receipt of Notice     37  
 
           
 
  ARTICLE 10        
 
  Term and Termination        
 
           
Section 10.01.
  Term     37  
Section 10.02.
  Termination by Novo Nordisk     37  
Section 10.03.
  Termination by Aradigm     38  
Section 10.04.
  Termination By Either Party     38  
Section 10.05.
  Rights and Obligations of the Parties after Termination     38  
Section 10.06.
  Additional Effects of Termination or Expiration     45  
 
           
 
  ARTICLE 11        
 
  Dispute Resolution and Governing Law        
 
           
Section 11.01.
  Dispute Resolution     45  
Section 11.02.
  Governing Law     46  

ii 

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                      Page  
 
  ARTICLE 12        
 
  Miscellaneous        
 
           
Section 12.01.
  Bankruptcy Code Considerations     46  
Section 12.02.
  Binding Agreement     47  
Section 12.03.
  Severability     47  
Section 12.04.
  Amendments and Waivers     47  
Section 12.05.
  Expenses     47  
Section 12.06.
  Successors and Assigns     47  
Section 12.07.
  Counterparts; Third Party Beneficiaries     47  
Section 12.08.
  Entire Agreement     48  
 
           
Appendix A    –
  Transferred Patents        
Appendix B
  Transferred Selected Pulmonary Delivery Patents        

iii 

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SECOND AMENDED AND RESTATED AND LICENSE AGREEMENT
     This SECOND AMENDED AND RESTATED LICENSE AGREEMENT (the “Agreement”) is
entered into as of July 3, 2006 by and between Aradigm Corporation, a
corporation duly organized and existing under the laws of the State of
California (“Aradigm”) and Novo Nordisk A/S, a company duly organized and
existing under the laws of Denmark (“Novo Nordisk”).
     WHEREAS, Novo Nordisk and Aradigm entered into a Development and License
Agreement dated as of June 2, 1998, as amended by Amendment No. 1 thereto dated
as of October 22, 2001 (the “Development and License Agreement”) to develop a
system for pulmonary delivery of insulin (and potentially other compounds) and
under which Aradigm granted to Novo Nordisk an exclusive, world-wide license
under certain patent rights and “know-how”, to use, market, distribute, sell and
sublicense products resulting from such development program in the Field (as
defined herein and therein);
     WHEREAS, Aradigm, Novo Nordisk and Novo Nordisk Delivery Technologies,
Inc., a corporation duly organized and existing under the laws of the State of
Delaware (“Novo Nordisk Delivery Technologies, Inc.”) entered into a
Restructuring Agreement dated as of September 28, 2004 (the “Restructuring
Agreement”) pursuant to which they restructured their existing arrangements
regarding the development, production and commercialization of the Development
Program (as defined herein) and to certain other matters as set forth therein;
     WHEREAS, Novo Nordisk and Aradigm entered into an Amended and Restated
License Agreement dated as of January 26, 2005 (the “First Amended License
Agreement”) as a precondition to performance on the part of Aradigm, Novo
Nordisk and Novo Nordisk Delivery Technologies, Inc. of their respective
obligations under the Restructuring Agreement;
     WHEREAS, Novo Nordisk and Aradigm have entered into an Assignment of
Letters Patent and Applications for Letters Patent dated as of the date hereof
relating to certain U.S. patents and patent applications (the “U.S. Patent
Assignment”) and an Assignment of Non-U.S. Letters Patent and Applications for
Non-U.S. Letters Patent dated as of the date hereof relating to certain foreign
patents and patent applications (the “Non-U.S. Patent Assignment” and, together
with the U.S. Patent Assignment, the “Patent Assignment”) pursuant to which
Aradigm has assigned to Novo Nordisk all right, title and interest in and to the
Transferred Patents (as defined herein) and the Transferred Selected Pulmonary
Delivery Patents (as defined herein);
     WHEREAS, Novo Nordisk and Aradigm have entered into a Promissory Note and
Security Agreement dated as of the date hereof (the “Loan and Security
Agreement”) pursuant to which Novo Nordisk has lent U.S. $7.5 million to Aradigm
on the terms and conditions set forth therein;

 

--------------------------------------------------------------------------------

 

     WHEREAS, Novo Nordisk and Aradigm have agreed to amend and restate the
First Amended License Agreement concurrent with the assignment to Novo Nordisk
of the Transferred Patents and the Transferred Selected Pulmonary Delivery
Patents; and
     WHEREAS, Novo Nordisk has paid U.S. $8.0 million to Aradigm in
consideration of Aradigm’s agreement to a reduction in the royalty rates set
forth in the First Amended License Agreement and such reduced royalty rates are
set forth in this Agreement.
     NOW, THEREFORE, in consideration of the premises set forth above and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the Parties hereto agree as follows:
ARTICLE 1
Definitions
     Section 1.01. Definitions.
     The following terms, as used herein, shall have the following meanings:
     “Affiliates” shall have the meaning set forth in the Restructuring
Agreement.
     “Alternative Technology” shall mean any pulmonary drug delivery technology
that may be covered by Transferred Patents and/or Transferred Selected Pulmonary
Delivery Patents, but that (a) does not use any Aradigm Know-How and (b) is not
claimed by any Aradigm Patent Rights.
     “Alternative Technology Effective Date” means the date that is the earlier
of (a) three (3) years after the delivery (without subsequent withdrawal) as
permitted under Section 2.07(c)) by Novo Nordisk to Aradigm of an Alternative
Technology Notice for a product using a specific insulin or insulin analog class
described in such Alternative Technology Notice and (b) the granting of
Regulatory Approval for such product.
     “Alternative Technology Notice” means written notice provided by Novo
Nordisk to Aradigm pursuant to Section 2.07(c) stating that Novo Nordisk intends
to commence commercialization of a product using an Alternative Technology to
deliver insulin and insulin analogs.
     “Aradigm Background IPR” shall mean any and all knowledge, information,
expertise, results, improvements or inventions (whether patentable or not), and
all related intellectual property rights, Made Jointly by the Parties or
individually by one (1) of the Parties as a part of the Development Program
under the Development and License Agreement prior to the Original Effective Date
and

2

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which relate to the Packaged Product (except as specified with respect to the
Program Compounds, formulations thereof or the interactions between materials
and such formulations) and the Device; provided that Aradigm Background IPR
shall not include any Transferred Patents or Transferred Selected Pulmonary
Delivery Patents or knowledge, information, expertise, results, improvements or
inventions, or related intellectual property with respect to the Transferred
Patents or Transferred Selected Pulmonary Delivery Patents. The Aradigm
Background IPR shall be included within the Aradigm Patent Rights or Aradigm
Know-How, as applicable.
     “Aradigm Know-How” shall mean all knowledge, information and expertise made
or developed by Aradigm prior to the Original Effective Date related to the
development and production of the Device, the Packaged Product and the Program
Compounds (introduced into the Development Program prior to the Original
Effective Date), whether or not covered by Aradigm Patent Rights or any other
industrial or intellectual property right of Aradigm, including but not limited
to clinical data, technical data, experimental results, specifications,
techniques, methods, processes and written materials.
     “Aradigm New IPR” shall mean any and all knowledge, information, expertise,
results, improvements or inventions, whether patentable or not, and all related
intellectual property rights, that are made or developed after the Original
Effective Date and prior to the termination of this Agreement, and that: (a) are
Made Jointly by Novo Nordisk and Aradigm or by Aradigm alone and that relate
solely to any Device (including without limitation the manufacturing thereof)
and/or Packaged Product (including without limitation the manufacturing thereof,
except as specified with respect to the Program Compounds, formulations thereof
or the interactions between materials and such formulations); or (b) are made or
developed by Aradigm alone and that relate solely to any method of treatment
within the Field (including without limitation medical data, algorithms for
dosing, models for predicting dosing and/or optimizing treatment, clinical data
and patient data); provided that Aradigm New IPR shall not include any
knowledge, information, expertise, results, improvements or inventions or
related intellectual property rights with respect to the Transferred Patents or
Transferred Selected Pulmonary Delivery Patents.
     “Aradigm Patent Rights” shall mean any and all of Aradigm’s patents and
patent applications possessed by Aradigm prior to the Original Effective Date
(other than the Transferred Patents and Transferred Selected Pulmonary Delivery
Patents) related to the Device, the Packaged Product and the Program Compounds
introduced into the Development Program prior to the Original Effective Date,
including (a) the patents and patent applications listed on Schedule 3.13(a)(i)
to the Restructuring Agreement (other than the Transferred Patents and
Transferred Selected Pulmonary Delivery Patents), (b) patents and patent
applications relating to the development, production and use of the Device, the
Packaged Product, and the Program Compounds introduced into the Development
Program prior to the Original Effective Date (other than the Transferred Patents
and Transferred

3

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Selected Pulmonary Delivery Patents), and (c) all continuations,
continuations-in-part, divisionals or re-issues of such patents and patent
applications and any patents issuing thereon or extensions thereof or any
foreign counterparts thereof. Extensions of patents shall include: (i)
extensions under the U.S. Patent Term Restoration Act, (ii) extensions of
patents under the Japanese Patent Law, (iii) Supplementary Protection
Certificates for members of the European Patent Convention and other countries
in the European Economic Area and (iv) similar extensions under any applicable
law in the Territory.
     “Baselines” shall mean the forecast amounts of Net Sales of the Insulin
Compound Packaged Products and the Device separately communicated to Aradigm
prior to the Original Effective Date and “Baseline” shall mean the forecast
amount for any particular calendar year following First Marketing of the Insulin
Compound Packaged Products and the Device by any member of the Novo Nordisk
Affiliate Group or any permitted sublicensees thereof.
     “Broad Regulatory Approval” shall mean, with respect to Packaged Products
and the Device, Regulatory Approval authorizing marketing thereof for the
treatment of patients with diabetes mellitus (type 1 and type 2).
     “Business Day” shall mean a day, other than Saturday, Sunday or other day
on which commercial banks in New York, New York are authorized or required by
law to close.
     “Co-Existence Agreement” shall have the meaning set forth in the
Restructuring Agreement.
     “Development Program” shall mean the development of the Packaged Product
and the Device, including the pre-clinical and clinical development programs
required for registration and approval of the Packaged Product and the Device in
the Territory conducted by the Parties under the Development and License
Agreement prior to the Original Effective Date, and as thereafter conducted by
Novo Nordisk in accordance with the First Amended License Agreement and this
Agreement.
     “Device” shall mean: (a) any pulmonary delivery device that (i) has been
developed in the course of the Development Program prior to the Original
Effective Date, and (ii) is based on the device technology described by the
Transferred Patents, the Transferred Selected Pulmonary Delivery Patents and the
Aradigm Patent Rights or utilizing Aradigm Know-How; and (b) any improved or
later generation version thereof, in each case, together with any accessories,
used to administer any Program Compound contained in a disposable unit dose
package, developed in the course of the Development Program after the Original
Effective Date.
     “Diligent Efforts” shall mean, with respect to efforts of any Party hereto,
no less than the efforts that such Party applies to: (a) development,
manufacture or

4

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commercialization of its own compounds or products with similar regulatory
requirements and market potential; and (b) prosecution, maintenance and/or
defense of intellectual property rights of similar importance.
     “Field” shall mean pulmonary administration of insulin, insulin analogs and
any other compounds whose principal therapeutic effect is to control blood
glucose levels in humans, including but not limited to glucagon-like peptide
(“GLP”), GLP-1 and analogs of GLP.
     “First Marketed Product and Device” shall be deemed to mean the first of
any of the following products for which First Marketing by any member of the
Novo Nordisk Affiliate Group or any permitted sublicensees thereof shall have
occurred: (1) the Insulin Compound Packaged Product and the Device, (2) any
Packaged Product (relating to Program Compounds other than the Insulin Compound)
and the Device and (3) any products using an Alternative Technology to deliver a
specific insulin or insulin analog class (in such case, only to the extent that
royalties are payable under Section 2.07(e)(i)).
     “First Marketing” shall mean the making available for sale of the
applicable product in commercial quantities for the first time in any country in
the Territory.
     “First Marketing Commencement Date” shall mean the date on which the
applicable First Marketing shall have commenced.
     [****]
     “Insulin Compound” shall mean recombinant human insulin.
     “Insulin Compound Packaged Product” shall mean the disposable unit dose
packages developed in the course of the Development Program containing Insulin
Compound, packaged for use with the Device for pulmonary delivery of such
Insulin Compound.
     “Joint Marketing Partners” shall mean any co-marketers, co-promoters and/or
rental sales forces.
     “Later Marketed Product and Device” shall be deemed to mean any and all of
the following products for which First Marketing by any member of the Novo
Nordisk Affiliate Group or any permitted sublicensees thereof shall have
occurred following First Marketing of the First Marketed Product and Device:
(1) the Insulin Compound Packaged Product and the Device, (2) any Packaged
Product (relating to Program Compounds other than the Insulin Compound) and the
Device or (3) any products using an Alternative Technology to deliver a specific
insulin or insulin analog class (in such case, only to the extent that royalties
are payable under Section 2.07(e)(i)).
 

****   Certain confidential information in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

5

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     “Know-How” shall mean the Aradigm Know-How and Novo Nordisk Know-How,
collectively.
     “Made Jointly” shall mean “made jointly” as such term is interpreted under
applicable U.S. patent law.
     “Net Sales” shall mean the invoiced gross revenue from sales of the
applicable product, when invoiced to any third party in an arm’s-length
transaction less: (a) Trade, cash and/or quantity discounts or rebates, if any;
(b) Credits or allowances given for rejection or return of such products
previously sold as well as the cost of replacement products, including shipping
and other incidental charges related thereto; (c) Any tax or governmental charge
other than income tax levied on the sale thereof or customs duties associated
therewith; and (d) Freight, insurance and other similar expenses billed
separately to the customer. Upon a request by Aradigm or Novo Nordisk, as the
case may be, supported by suitable documentation reflecting actual operating
experience, the Parties will agree on a fixed percentage of Net Sales of the
applicable product to represent item (d).
     “Novo Nordisk Affiliate Group” shall mean Novo Nordisk and its Affiliates,
collectively.
     “Novo Nordisk Background IPR” shall mean any and all knowledge,
information, expertise, results, improvements or inventions (whether patentable
or not), and all related intellectual property rights, Made Jointly by the
Parties or individually by one (1) of the Parties as a part of the Development
Program under the Development and License Agreement prior to the Original
Effective Date and which relate to any Program Compound, formulations thereof or
the interactions between materials and such formulations, but excluding aspects
of the formulation relating to the aerosolization of the Program Compounds. The
Novo Nordisk Background IPR shall be included within the Novo Nordisk Patent
Rights or Novo Nordisk Know-How, as applicable.
     “Novo Nordisk Know-How” shall mean all knowledge, information and expertise
made or developed by Novo Nordisk prior to the Original Effective Date related
to the Insulin Compound or that Novo Nordisk otherwise has contributed (or will
contribute) to the Development Program, whether or not covered by Novo Nordisk
Patent Rights or any other industrial or intellectual property right of Novo
Nordisk, including but not limited to technical data, experimental results,
specifications, techniques, methods, processes and written materials.
     “Novo Nordisk New IPR” shall mean (a) any and all knowledge, information,
expertise, results, improvements or inventions, whether patentable or not, and
all related intellectual property rights, made or developed by Novo Nordisk
alone as a part of the Development Program after the Original Effective Date and
prior to the termination of this Agreement that relate solely to any Device
(including without limitation the manufacturing thereof) and/or Packaged

6

--------------------------------------------------------------------------------

 

Product (including without limitation the manufacturing thereof); (b) any and
all knowledge, information, expertise, results, improvements or inventions,
whether patentable or not, and all related intellectual property rights, Made
Jointly by Novo Nordisk and Aradigm or by Novo Nordisk alone as a part of the
Development Program after the Original Effective Date and prior to the
termination of this Agreement and which relate solely to any method of treatment
within the Field (including without limitation medical data, algorithms for
dosing, models for predicting dosing and/or optimizing treatment, clinical data
and patient data); and (c) any and all results, improvements or inventions,
whether patentable or not, and all related intellectual property rights, Made
Jointly by Novo Nordisk and Aradigm, by Aradigm alone or by Novo Nordisk alone
as a part of the Development Program after the Original Effective Date and prior
to the termination of this Agreement and which relate to any Program Compound,
formulations thereof or the interactions between materials and such
formulations.
     “Novo Nordisk Patent Rights” shall mean any and all of Novo Nordisk’s
patents and patent applications possessed by Novo Nordisk prior to the Original
Effective Date related to any Program Compound, including (a) patents and patent
applications relating to the production, development and use of any Program
Compound and (b) all continuations, continuations-in-part, divisionals or
re-issues of such patents and patent applications and any patents issuing
thereon or extensions thereof or any foreign counterparts thereof. Extensions of
patents shall include: (i) extensions under the U.S. Patent Term Restoration
Act, (ii) extensions under the Japanese Patent Law, (iii) Supplementary
Protection Certificates for members of the European Patent Convention and other
countries in the European Economic Area and (iv) similar extensions under any
applicable law in the Territory.
     “Original Effective Date” shall mean January 26, 2005.
     “Packaged Product” shall mean any disposable unit dose package developed in
the course of the Development Program containing the Insulin Compound or other
Program Compounds, packaged for use with the Device for pulmonary delivery of
such Insulin Compound or other Program Compounds.
     “Parties” shall mean the parties hereto and “Party” shall mean any one of
the parties hereto.
     “Patent Rights” shall mean the Aradigm Patent Rights, patent rights under
the Aradigm New IPR, Novo Nordisk Patent Rights and patent rights under the Novo
Nordisk New IPR, collectively.
     “Person” shall mean an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.

7

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     “Program Compounds” shall mean the Insulin Compound and any other insulin
compounds, insulin analog compounds and non-insulin compounds included in the
Development Program by Novo Nordisk in its sole discretion.
     “Regulatory Approval” shall mean the granting of a commercial marketing
authorization for (a) a Packaged Product for delivery of a Program Compound
using the Device, (b) the Device or (c) any product based on any Alternative
Technology, as the case may be.
     “Regulatory Submission” shall mean the filing of an application for a
commercial marketing authorization for (a) a Packaged Product for delivery of a
Program Compound using the Device, (b) the Device or (c) any product based on
any Alternative Technology, as the case may be.
     “Stage 1 Commercialization Period” shall mean the period commencing on the
applicable First Marketing Commencement Date and ending on the third anniversary
thereof.
     “Stage 2 Commercialization Period” shall mean the period commencing on the
expiration of the applicable Stage 1 Commercialization Period and ending on the
first anniversary thereof.
     “Stage 3 Commercialization Period” shall mean the period commencing on the
expiration of the applicable Stage 2 Commercialization Period and ending on the
termination of this Agreement; provided that, in the event of a termination by
Novo Nordisk pursuant to either or both of Section 10.02 and Section 10.04, the
Stage 3 Commercialization Period shall end on the later of (A) the date that is
ten (10) years from the First Marketing of any Packaged Product and the Device,
or another pulmonary product, as the case may be, and (B) the expiration date of
the last patent (including any Transferred Patent or any Transferred Selected
Pulmonary Delivery Patent) that covers the Packaged Product and the Device, or
another pulmonary product, as the case may be, and the development,
manufacturing, use, marketing, distribution, sale, offer for sale, importation
and/or exportation thereof in and from the Territory.
     “Status Report” shall mean the status report on the Development Program to
be provided by Novo Nordisk to Aradigm at meetings of the Review Committee as
contemplated by Section 2.04(f) in a form consistent with Novo Nordisk’s
practice.
     “Territory” shall include any and all countries of the world.
     “Transaction Agreements” shall have the meaning set forth in the
Restructuring Agreement.
     “Transferred Patents” shall mean the Patents (as defined in the U.S. Patent
Assignment) and the Patents (as defined in the Non-U.S. Patent

8

--------------------------------------------------------------------------------

 

Assignment), each assigned by Aradigm to Novo Nordisk under the Patent
Assignment and listed in Appendix A.
     “Transferred Selected Pulmonary Delivery Patents” shall mean the Patents
(as defined in the U.S. Patent Assignment) assigned by Aradigm to Novo Nordisk
under the U.S. Patent Assignment and listed in Appendix B.
     Section 1.02. Other Defined Terms. Each of the following terms is defined
in the Section set forth opposite such term:

      Term   Section
Agreement
  Recitals
Aradigm
  Recitals
Bankruptcy Code
  12.01(a)
Confidential Information
  8.01(d)
Development and License Agreement
  Recitals
Directly Infringing Product
  7.02(e)
Field Claim
  7.02(d)
Field Infringement
  7.04(a)
First Amended License Agreement
  Recitals
Independent Auditor
  5.05(a)
Loan and Security Agreement
  Recitals
Non-Insulin Compound
  2.07(b)
Non-U.S. Patent Assignment
  Recitals
Novo Nordisk
  Recitals
Novo Nordisk Delivery Technologies, Inc.
  Recitals
Patent Assignment
  Recitals
Representatives
  8.01(d)
Restructuring Agreement
  Recitals
Review Committee
  2.02
Royalty Paying Party
  5.02
Royalty Receiving Party
  5.02
substantially the same as
  7.02(e)
U.S. Patent Assignment
  Recitals

     Section 1.03. Other Definitional and Interpretative Provisions. Unless
specified otherwise, in this Agreement the obligations of any Party consisting
of

9

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more than one person are joint and several. The words “hereof”, “herein” and
“hereunder” and words of like import used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
captions herein are included for convenience of reference only and shall be
ignored in the construction or interpretation hereof. References to Articles,
Sections, Exhibits and Schedules are to Appendices, Articles, Sections, Exhibits
and Schedules of this Agreement unless otherwise specified. All Appendices,
Exhibits and Schedules annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise
defined therein, shall have the meaning as defined in this Agreement. Any
singular term in this Agreement shall be deemed to include the plural, and any
plural term the singular. Whenever the words “include”, “includes” or
“including” are used in this Agreement, they shall be deemed to be followed by
the words “without limitation”, whether or not they are in fact followed by
those words or words of like import. “Writing”, “written” and comparable terms
refer to printing, typing and other means of reproducing words (including
electronic media) in a visible form. References to any agreement or contract are
to that agreement or contract as amended, modified or supplemented from time to
time in accordance with the terms hereof and thereof. References to any Person
include the successors and permitted assigns of that Person. References from or
through any date mean, unless otherwise specified, from and including or through
and including, respectively.
ARTICLE 2
Rights and Obligations of the Parties
     Section 2.01. Development Program. Novo Nordisk shall conduct the
Development Program in its sole discretion and at its own expense.
     Section 2.02. Review Committee. The Parties have established a Review
Committee (“Review Committee”). The Review Committee shall
     (a) consist of up to three (3) representatives of each Party, as notified
by such Party to the other Party from time to time in writing. Other non-voting
representatives of a Party may attend each meeting upon the approval of the
Review Committee;
     (b) be chaired by a representative of Aradigm from the date hereof until
December 31, 2006; provided that, after such date a representative from Novo
Nordisk will chair the Review Committee from January 1, 2007 until December 31,
2007, and thereafter the Parties will alternate chairing the Review Committee on
a calendar year basis;
     (c) meet periodically (at least once every six (6) months). Meetings shall
be convened by the chairperson with at least thirty (30) calendar days prior

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written notice and such notice shall include an agenda. Either Party may request
the chairperson to call a meeting, but in no event shall any Party request the
chairperson to call more than four (4) meetings per calendar year; and
     (d) have minutes drafted of each meeting by the chairperson and signed by
one representative of each Party.
     Section 2.03. Obligations of the Parties in Respect of the Review
Committee. (a) The Parties agree that during the meetings of the Review
Committee at which the semi-annual technology review required under Section 2.04
shall take place, they shall disclose and provide reasonable details relating
to: (i) intellectual property rights and/or know-how with potential application
in the Field in general and in later generation Packaged Products and Devices in
particular; and (ii) plans, programs, results and ongoing developments that
could lead to or result in Aradigm New IPR or Novo Nordisk New IPR, as
applicable, including Aradigm New IPR and Novo Nordisk New IPR relating to later
generation Packaged Products and Devices. For the avoidance of doubt, the
obligation of Novo Nordisk to disclose and provide reasonable details under this
Section 2.03 shall extend only to plans, programs, results and ongoing
developments within the Development Program.
     (b) After Aradigm discloses and provides reasonable details relating to its
intellectual property rights with potential application in the Field in
accordance with Section 2.03(a), the Parties shall discuss and determine in good
faith whether or not such intellectual property rights constitute Aradigm New
IPR, Novo Nordisk New IPR or neither. In the event such determination requires
further research and/or development to evaluate the utility of such intellectual
property rights within the Development Program, the Parties shall agree in
writing to the scope and design of such research and/or development activities
pursuant to consulting arrangements as contemplated by Section 2.04(c) below.
The Parties shall discuss in good faith and agree whether or not any knowledge,
information, expertise, results, improvements or inventions, whether patentable
or not, and all related intellectual property rights, made or developed by
Aradigm solely, Novo Nordisk solely, or Aradigm and Novo Nordisk jointly arising
out of any such further research and/or development following disclosure of such
Aradigm intellectual property rights constitute Aradigm New IPR, Novo Nordisk
New IPR or neither. In the event the Parties determine that the Aradigm
intellectual property rights have applications outside the Development Program
or have applications both inside and outside the Development Program, upon
written request by Novo Nordisk to Aradigm, Aradigm shall in good faith consider
granting, but shall have no obligation to grant, a license under such
intellectual property rights to Novo Nordisk for applications outside of the
Development Program on terms to be agreed in writing between the Parties.
     (c) Novo Nordisk shall provide Aradigm with a copy of a presentation
relating to any Status Report to be delivered at a Review Committee meeting at
least ten (10) days prior to such Review Committee meeting.

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     Section 2.04. Responsibilities of the Review Committee. The Review
Committee shall be responsible for the following matters:
     (a) ensuring optimal cooperation between the Parties;
     (b) conducting semi-annual technology reviews within the field of pulmonary
administration of drugs;
     (c) identifying and recommending, subject to the Parties’ agreement,
consulting and other assignments to be performed by Aradigm under the
Development Program or as contemplated by Section 2.03(b) at Novo Nordisk’s
expense;
     (d) reviewing the status, process and strategy for prosecution and
maintenance of patents in accordance with Article 6 and addressing any issues or
developments arising therefrom;
     (e) overseeing ongoing implementation of the technology transfer process
contemplated in the Restructuring Agreement;
     (f) reviewing any Status Report on the Development Program presented by
Novo Nordisk; and
     (g) discussing any other matters as mutually agreed between the Parties.
     Section 2.05. Diligent Efforts. Novo Nordisk agrees that it will use its
Diligent Efforts to develop and commercialize the Insulin Compound Packaged
Product and the Device, including without limitation the following:
     (a) Novo Nordisk must use Diligent Efforts to clinically develop and
register the Insulin Compound Packaged Product and the Device until it has
obtained Broad Regulatory Approval of such Insulin Compound Packaged Product and
the Device in the United States and the European Union;
     (b) Novo Nordisk must fund the Development Program for the Insulin Compound
Packaged Product and the Device with [****] until a Regulatory Submission for
Broad Regulatory Approval of such Insulin Compound Packaged Product and the
Device has been made in the United States and the European Union;
     (c) until receipt of Broad Regulatory Approval by Novo Nordisk in the
United States and the European Union, Novo Nordisk must expend [****]; and
     (d) within the three-year period following Novo Nordisk’s receipt of Broad
Regulatory Approval in the United States in respect of the Insulin Compound
Packaged Product and the Device, a member of the Novo Nordisk Affiliate Group or
any permitted sublicensees thereof must accomplish First
 

****   Certain confidential information in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

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Marketing of the Insulin Compound Packaged Product and the Device in the United
States.
     For purposes of this Section 2.05, any reference to amounts in U.S. dollars
to be funded or expended by Novo Nordisk shall be calculated on a pro rata basis
for any calendar year in which this Agreement is not in full force and effect
for the entire calendar year based on the actual number of days elapsed prior to
the end of such calendar year.
     Section 2.06. Use Restrictions. Aradigm shall use Insulin Compounds
supplied by Novo Nordisk, the Novo Nordisk Know-How and the know-how included
within Novo Nordisk New IPR only as provided for in this Agreement. Novo Nordisk
shall use the Aradigm Know-How and know-how included within Aradigm New IPR only
as provided for in this Agreement.
     Section 2.07. Alternative Technology. (a) Subject to the terms of this
Agreement, Novo Nordisk shall have the right to develop and commercialize
products based on Alternative Technology for pulmonary delivery of insulin,
insulin analogs, and non-insulin compounds within the Field.
     (b) In the event that Novo Nordisk commences clinical trials in humans for
any product based on any Alternative Technology to deliver a non-insulin
compound (a “Non-Insulin Compound”), such Non Insulin Compound will then be
excluded from the Field, and Aradigm shall have the right to research, develop
and/or commercialize (directly or through licensees) products based on Aradigm
Patent Rights, Aradigm New IPR and/or Aradigm Know-How to deliver such
Non-Insulin Compound or any compound that is in the same chemical class as such
Non-Insulin Compound; provided that, Aradigm shall not be entitled to any
license, including any implied license, under any patent rights or know-how of
Novo Nordisk covering such Non-Insulin Compound. Novo Nordisk shall notify
Aradigm in writing prior to the first dosing of the first patient in the first
such clinical trial, if any.
     (c) Aradigm hereby acknowledges that: (i) subject to the terms of this
Agreement, Novo Nordisk may be simultaneously conducting research and
development alone or in collaboration with third parties on products using an
Alternative Technology to deliver insulin and insulin analogs; and (ii) Novo
Nordisk may supply insulin and insulin analogs to third parties free of charge
for use in such third parties’ clinical studies using such third parties’
pulmonary delivery technology in exchange for rights in such technology in the
Field; provided that, notwithstanding the foregoing, in the event that Novo
Nordisk is conducting research on and developing any products using any
Alternative Technology to deliver a specific insulin or insulin analog class,
Novo Nordisk shall provide an Alternative Technology Notice to Aradigm of its
intention to commence commercialization of such product at least three (3) years
prior to First Marketing of such product. The Alternative Technology Notice may
be withdrawn by Novo Nordisk, without penalty, for a specific insulin or insulin

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analog class at any time during the twelve (12) months following delivery of the
Alternative Technology Notice.
     (d) From receipt of the Alternative Technology Notice until, if applicable,
such notice is withdrawn as permitted under Section 2.07(c), the license
described in Section 3.01 shall become non-exclusive to the extent necessary to
permit Aradigm to discuss the product opportunity with potential marketing
partners, prepare for potential development activities, and/or engage in
exploratory trials, for the delivery of the specific insulin or insulin analog
class that is the subject of such Alternative Technology Notice. In the event
that Novo Nordisk has not withdrawn such Alternative Technology Notice within
twelve (12) months as permitted under Section 2.07(c), the license described in
Section 3.01 shall become non-exclusive, and the licenses described in
Section 3.03(b) and Section 3.03(c) shall include the Field, to the extent
necessary to enable Aradigm, alone or in collaboration with one (1) marketing
partner, to develop and, from and after the Alternative Technology Effective
Date, to commercialize devices and/or dose packages for the delivery of the
specific insulin or insulin analog class that is the subject of such Alternative
Technology Notice. Thereafter, for each Alternative Technology Notice delivered
by Novo Nordisk, Aradigm may engage one (1) additional marketing partner in
accordance with the procedures, for the purposes, on the timetables and subject
to the limitations, set forth in this Section 2.07. Notwithstanding anything
else contained herein, if Novo Nordisk withdraws the Alternative Technology
Notice for a specific insulin or insulin analog class at any time during the
twelve (12) months following delivery of the Alternative Technology Notice, then
(i) the license granted under Section 3.01 shall become exclusive again with
respect to the specific insulin or insulin analog class that is the subject of
such withdrawn Alternative Technology Notice and (ii) the licenses described in
Section 3.03(b) and Section 3.03(c) shall exclude the Field again.
     (e) No later than two (2) years after receipt of the Alternative Technology
Notice, without subsequent withdrawal by Novo Nordisk, Aradigm may elect, by
notifying Novo Nordisk in writing, to market, either alone or in collaboration
with one (1) marketing partner, an insulin or insulin analog class that it would
have the right to commercialize from and after the Alternative Technology
Effective Date.
     (i) In the event that Aradigm delivers written notice to Novo Nordisk that
Aradigm will not market or fails to deliver any notice regarding its intent to
market, either alone or in collaboration with one (1) marketing partner, an
insulin or insulin analog class that it would have the right to commercialize
from and after the Alternative Technology Effective Date, notwithstanding
Section 2.07(d), then the license granted to Novo Nordisk pursuant to
Section 3.01 shall remain exclusive with respect thereto, and (A) until the
sixth (6th) anniversary of the earlier of (I) First Marketing of a Packaged
Product and the Device and (II) First Marketing of any product based on an
Alternative Technology that has been described in the applicable Alternative
Technology Notice, Aradigm

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shall be entitled to a royalty (in accordance with Section 5.01) on the Net
Sales by any member of the Novo Nordisk Affiliate Group, or any permitted
sublicensees thereof, of the product described in the applicable Alternative
Technology Notice (whether or not such product is covered by any Transferred
Patent or any Transferred Selected Pulmonary Delivery Patent); and (B) following
the sixth (6th) anniversary of the earlier of (I) and (II) above, Aradigm shall
be entitled to a royalty (in accordance with Section 5.01) on the Net Sales by
any member of the Novo Nordisk Affiliate Group, or any permitted sublicensees
thereof, of (1) any Packaged Product and the Device and (2) any product based on
an Alternative Technology that has been described in the applicable Alternative
Technology Notice to the extent that, and for so long as, such product is
covered by any Transferred Patent or any Transferred Selected Pulmonary Delivery
Patents.
     (ii) In the event that Aradigm delivers written notice to Novo Nordisk that
Aradigm will market, either alone or in collaboration with one (1) marketing
partner, any insulin or insulin analog class similar to the insulin or insulin
analog class specified in the applicable Alternative Technology Notice, then
Aradigm shall be entitled to a royalty only on Net Sales of any Packaged Product
and the Device in accordance with Section 5.01 and shall not be entitled to a
royalty on any product based on an Alternative Technology that has been
described in such Alternative Technology Notice.
     (f) To the extent that Novo Nordisk obtains Regulatory Approval of any
product using any Alternative Technology prior to the expiration of three
(3) years following delivery of an Alternative Technology Notice for such
product to Aradigm pursuant to Section 2.07(c), Aradigm and Novo Nordisk agree
to negotiate in good faith regarding the potential for Novo Nordisk to commence
First Marketing of such product using any Alternative Technology prior to the
expiration of such three (3) year period; provided that, nothing in this
Section 2.07(f) shall serve to limit in any way Aradigm’s rights or obligations
hereunder or to provide Novo Nordisk with a right to commence First Marketing of
any product using any Alternative Technology until the expiration of three
(3) years following delivery of the Alternative Technology Notice for such
product to Aradigm pursuant to Section 2.07(c).
     Section 2.08. Noncompetition. For so long as the license granted to Novo
Nordisk under Section 3.01 is exclusive in the Field, except for activities and
agreements otherwise expressly permitted under this Agreement, Aradigm shall be
prohibited from entering into any agreement with any third party with respect to
any activities within the Field, and shall not conduct any work program in the
Field with Insulin Compound or any other Program Compound provided by any third
party supplier without the prior written consent of Novo Nordisk.

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     Section 2.09. Product Liability. Subject to the terms of this Section 2.09,
product liabilities that are incurred prior to the first Regulatory Submission
will be allocated between the Parties based on the fault or relative fault of
the Parties. If negligence or fault cannot be so determined or allocated, then
such liability shall be borne 80% by Novo Nordisk and 20% by Aradigm. Until the
first Regulatory Submission, Aradigm shall be responsible for product liability
to the extent such liability is attributable to: (a) any failure by Aradigm
prior to the Original Effective Date to manufacture the Packaged Product and/or
the Device in accordance with applicable standards and practices; (b) defects or
flaws in design that are caused by Aradigm until the subsystem of the Packaged
Product and/or Device as to which any such defect or flaw in design relates
shall have been validated and verified by Novo Nordisk; or (c) Aradigm’s
negligence. Following the first Regulatory Submission, Novo Nordisk shall assume
responsibility for all product liability arising out of the conduct of the
Development Program and the practice by any member of the Novo Nordisk Affiliate
Group of the licenses granted to Novo Nordisk in this Agreement and Aradigm
shall have no responsibility for any product liability arising out of the
practice by any agent or permitted sublicensees of any member of the Novo
Nordisk Affiliate Group of the licenses granted to Novo Nordisk in this
Agreement.
ARTICLE 3
Grant of License
     Section 3.01. License. Subject to the terms of this Agreement, Aradigm
hereby grants Novo Nordisk a world-wide, exclusive, royalty-bearing license
under the Aradigm Patent Rights (including applicable Aradigm Background IPR),
Aradigm New IPR and Aradigm Know-How (including applicable Aradigm Background
IPR) to (a) develop, manufacture, use, market, distribute, sell, offer for sale,
have made, import and/or export any Packaged Product and the Device in and from
the Territory for use within the Field, with the right to sublicense its
customers and Joint Marketing Partners pursuant to Section 3.02, and
(b) otherwise exercise and perform its rights and obligations under this
Agreement.
     Section 3.02. Sublicense. Subject to the terms of this Agreement, Aradigm
hereby grants Novo Nordisk the right to sublicense its customers and Joint
Marketing Partners, under Novo Nordisk’s licenses under the Aradigm Patent
Rights (including applicable Aradigm Background IPR), Aradigm New IPR and
Aradigm Know-How (including applicable Aradigm Background IPR) in this Agreement
(as applicable) to: (a) use any Packaged Product and the Device and (b) market,
distribute, sell, offer to sell, import and/or export any Packaged Product and
the Device, so long as said items were bought from any member of the Novo
Nordisk Affiliate Group or from a Joint Marketing Partner.
     Section 3.03. Additional Licenses. (a) Subject to the terms of this
Agreement, Aradigm shall and hereby does grant Novo Nordisk a perpetual,
world-wide, non-exclusive, royalty-free license under any Aradigm New IPR

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Made Jointly by Novo Nordisk and Aradigm to develop, manufacture, use, market,
distribute, sell, offer for sale, have made, import and/or export any product
outside the Field, with the right to sublicense its customers and Joint
Marketing Partners pursuant to Section 3.02.
     (b) Subject to the terms of this Agreement, Novo Nordisk shall and hereby
does grant Aradigm a perpetual, world-wide, non-exclusive, royalty-free license
under any Novo Nordisk New IPR that relate solely to any Device (or
manufacturing thereof) and/or Packaged Product (or manufacturing thereof, except
the Program Compounds, formulations thereof and the interactions between
materials and such formulations) to develop, manufacture, use, market,
distribute, sell, offer for sale, have made, import and/or export any product
outside the Field, with a right to sublicense. Such right to sublicense shall be
royalty-bearing (such royalty to be determined in accordance with the provisions
set forth in Section 5.03(a)) to the extent that (i) Aradigm receives from the
sublicensee thereof a royalty or other compensation and (ii) without such
sublicense, the applicable product would otherwise infringe the patents included
within Novo Nordisk New IPR.
     (c) Subject to the terms of this Agreement, Novo Nordisk shall and hereby
does grant Aradigm a perpetual, world-wide, exclusive, royalty-free license
under the Transferred Patents and Transferred Selected Pulmonary Delivery
Patents to develop, manufacture, use, market, distribute, sell, offer for sale,
have made, import and/or export any product outside the Field, with a right to
sublicense.
     (d) Subject to the terms of this Agreement, Novo Nordisk shall and hereby
does grant Aradigm a perpetual, world-wide, non-exclusive, royalty-free license
under any Novo Nordisk New IPR Made Jointly by Novo Nordisk and Aradigm relating
solely to any method of treatment to develop, manufacture, use, market,
distribute, sell, offer for sale, have made, import and/or export any product
outside the Field.
     (e) Aradigm hereby agrees not to object to or disagree with the use by Novo
Nordisk of the AERIX trademark pursuant to the terms of the Co-Existence
Agreement.
     Section 3.04. Publicly Available Information. For the avoidance of doubt,
nothing contained in this Agreement shall preclude any member of the Novo
Nordisk Affiliate Group from using any publicly-available knowledge, information
and expertise related to or disclosed in the Patent Rights or that is otherwise
publicly-available.

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ARTICLE 4
Supply
     Section 4.01. Novo Nordisk Supply Obligations. Novo Nordisk agrees that it
will use its reasonable efforts to obtain consent from third party suppliers to
permit Aradigm to purchase inventory at a cost no greater to Aradigm than the
cost to Novo Nordisk so long as (i) the inventory is identical to inventory
purchased by Novo Nordisk for exclusive use in the Development Program and
(ii) the delivery of such inventory is consistent in all respects with the
delivery of inventory ordered by Novo Nordisk. Notwithstanding the foregoing,
Novo Nordisk shall not be responsible for ordering, invoicing, logistical
support or warehousing of the inventory purchased by Aradigm in accordance with
this Section 4.01 and Aradigm shall be responsible for any and all actions
relating to such ordering, invoicing, logistical support and warehousing.
ARTICLE 5
Royalty Payments
     Section 5.01. Royalty Payment. (a) In consideration of the rights which
Novo Nordisk has obtained in Aradigm Patent Rights, Aradigm Background IPR,
Aradigm Know-How, Aradigm New IPR, Transferred Patents and Transferred Selected
Pulmonary Delivery Patents, Novo Nordisk shall pay to Aradigm:
     (i) in the event that the First Marketed Product and Device is the Insulin
Compound Packaged Product and the Device, (A) three and one-quarter percent
(3.25%) of Net Sales thereof (if any) by any member of the Novo Nordisk
Affiliate Group or any permitted sublicensees thereof during any year during the
Stage 1 Commercialization Period up to and including the applicable Baseline for
such year plus three and fifty-five hundredths percent (3.55%) of Net Sales
thereof (if any) by any member of the Novo Nordisk Affiliate Group or any
permitted sublicensees thereof in excess of the applicable Baseline for such
year; (B) four percent (4.00%) of Net Sales thereof (if any) by any member of
the Novo Nordisk Affiliate Group or any permitted sublicensees thereof during
the Stage 2 Commercialization Period up to and including the applicable Baseline
for such period plus four and three-tenths percent (4.30%) of Net Sales thereof
(if any) by any member of the Novo Nordisk Affiliate Group or any permitted
sublicensees thereof in excess of the applicable Baseline for such period; and
(C) five percent (5.00%) of Net Sales thereof (if any) by any member of the Novo
Nordisk Affiliate Group or any permitted sublicensees thereof during any year
during the Stage 3 Commercialization Period up to and including the applicable
Baseline in such year plus five and three-tenths percent (5.30%) of Net Sales
thereof (if any) by any member of the Novo Nordisk Affiliate Group or any
permitted sublicensees thereof in excess of the applicable Baseline for such
year; or

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     (ii) in the event that the First Marketed Product and Device is any
Packaged Product (relating to Program Compounds other than the Insulin Compound)
and the Device or any product using an Alternative Technology to deliver a
specific insulin or insulin analog class (in such case, only to the extent that
royalties are payable under Section 2.07(e)(i)), (A) three and four-tenths
percent (3.40%) of Net Sales thereof (if any) by any member of the Novo Nordisk
Affiliate Group or any permitted sublicensees thereof during the Stage 1
Commercialization Period; (B) four and fifteen-hundredths percent (4.15%) of Net
Sales thereof (if any) by any member of the Novo Nordisk Affiliate Group or any
permitted sublicensees thereof during the Stage 2 Commercialization Period; and
(C) five and fifteen-hundredths percent (5.15%) of Net Sales thereof (if any) by
any member of the Novo Nordisk Affiliate Group or any permitted sublicensees
thereof during the Stage 3 Commercialization Period.
     (b) In consideration of the rights which Novo Nordisk has obtained in
Aradigm Patent Rights, Aradigm Background IPR, Aradigm Know-How, Aradigm New
IPR, Transferred Patents and Transferred Selected Pulmonary Delivery Patents,
Novo Nordisk shall also pay to Aradigm (i) four and one-quarter percent (4.25%)
of Net Sales of any Later Marketed Product and Device by any member of the Novo
Nordisk Affiliate Group or any permitted sublicensees thereof during the Stage 1
Commercialization Period; and (ii) five percent (5.00%) of Net Sales of any
Later Marketed Product and Device by any member of the Novo Nordisk Affiliate
Group or any permitted sublicensees thereof during the Stage 2 Commercialization
Period and the Stage 3 Commercialization Period; provided that: in the event
that such Later Marketed Product and Device is the Insulin Compound Packaged
Product and the Device and that Net Sales thereof exceed the Baseline in any
year during the Stage 2 Commercialization Period and the Stage 3
Commercialization Period, Novo Nordisk shall pay to Aradigm five percent (5.00%)
of such Net Sales of such Insulin Compound Packaged Product and the Device up to
and including the applicable Baseline in such year plus five and three-tenths
percent (5.30%) of Net Sales (if any) of such Insulin Compound Packaged Product
and the Device in excess of the applicable Baseline in such year.
     Section 5.02. Royalty Payments Schedule. Payments due in accordance with
Section 5.01 and any royalty payments due under Articles 2 and 10 shall be
payable within forty-five (45) days after January 1, April 1, July 1 and October
1 of each calendar year in which such royalties are due under this Agreement.
The Party with a royalty payment obligation hereunder shall provide the other
Party with a reconciliation report in a form to be agreed between the Parties
showing the calculation of Net Sales for each calendar year within seventy-five
(75) days after the end of such year. In the event that a reconciliation report
demonstrates that a Party (the “Royalty Paying Party”) shall have paid an amount
in excess of or less than the royalty payments due under Section 5.01 or
Articles 2 or 10, as the case may be, then the other Party (the “Royalty
Receiving Party”) shall pay to the Royalty Paying Party such excess amount, or
the Royalty Paying Party shall

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pay to the Royalty Receiving Party the difference between the amount otherwise
due hereunder and the amount such Royalty Paying Party shall have paid in
accordance with the first sentence of this Section 5.02, as the case may be.
     Section 5.03. Additional Royalty Provisions. (a) Any reference to
“royalty-bearing” or to a “royalty” shall mean, unless otherwise expressly
established in this Agreement, a royalty or other compensation that will be
negotiated in good faith between the Parties in respect of the applicable
patent(s) included within the licensed intellectual property rights. Each such
royalty will be agreed on a case-by-case basis, taking into account the
non-exclusive or exclusive term, the importance of the originator’s invention
and the strength and commercial importance of the applicable intellectual
property rights (including the effect of any trade secret status of any Aradigm
Know-How or Novo Nordisk Know-How, as the case may be). Additionally, the
payment schedules, audit and other provisions of this Article 5 shall apply to
the extent practicable, unless otherwise agreed by the Parties in writing.
     (b) For the avoidance of doubt, in no event shall either Aradigm pay a
royalty to Novo Nordisk or Novo Nordisk pay a royalty to Aradigm, respectively,
for Novo Nordisk New IPR or Aradigm New IPR, respectively, if such Novo Nordisk
New IPR or Aradigm New IPR, respectively, is Made Jointly.
     (c) Following the expiration of the last to expire of the Aradigm Patent
Rights, the Transferred Patents, the Transferred Selected Pulmonary Delivery
Patents and patents included in the Aradigm New IPR, if: (i) Novo Nordisk
experiences a material reduction in the gross margins of products bearing
royalties under this Agreement in the United States, any member state of the
European Union and/or Japan as a result of pricing actions by competitors who,
had such patents not expired, would be infringing one (1) or more of the Aradigm
Patent Rights, the Transferred Patents, the Transferred Selected Pulmonary
Delivery Patents or patents included in the Aradigm New IPR; and (ii) Novo
Nordisk is in compliance with all of its material obligations under this
Agreement at the time of such material reduction in gross margins, then Novo
Nordisk may request a reduction in the applicable royalty rates hereunder for
the specific geographic area (whether the United States, any member state of the
European Union and/or Japan). Within sixty (60) days of such request, the
Parties will meet to review Novo Nordisk’s financial and marketing information
pertinent to such request and to negotiate and agree on a reduction in the
royalty rates hereunder that is proportionate to the reduction in gross margins
experienced by Novo Nordisk or that otherwise fairly reflects the diminished
value of the applicable products to Novo Nordisk.
     Section 5.04. Record Keeping. Each Party shall maintain, for a period of
three (3) years following the last day of the year to which such records and
other financial information relate, complete and correct records of Net Sales
and other financial information that it deems necessary to determine such Net
Sales and

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shall report such information as it deems relevant along with each royalty
payment made to the other Party in accordance with this Article 5.
     Section 5.05. Audit Right. (a) Aradigm may, no more than once in respect of
each calendar year, at Aradigm’s expense, appoint an independent auditor (the
“Independent Auditor”) reasonably acceptable to Novo Nordisk to review the
payments made by Novo Nordisk to Aradigm in accordance with the provisions set
forth in Articles 2, 5 and 10 in such calendar year. In the event the
Independent Auditor determines that additional amounts are due to Aradigm, Novo
Nordisk shall pay such additional amounts to Aradigm and, to the extent that
such additional amounts represent at least five percent (5.00%) of the total
amounts paid to Aradigm under Section 5.02 in respect of such calendar year,
shall reimburse Aradigm for the fees and expenses of the Independent Auditor. In
the event the Independent Auditor determines that additional amounts are due to
Aradigm representing less than five percent (5.00%) of the total amounts paid to
Aradigm under Section 5.02 in any calendar year, then Novo Nordisk shall have no
obligation to reimburse Aradigm for the fees and expenses of the Independent
Auditor.
     (b) Novo Nordisk may, no more than once in respect of each calendar year,
at Novo Nordisk’s expense, appoint an Independent Auditor reasonably acceptable
to Aradigm to review the payments made (if any) by Aradigm to Novo Nordisk in
accordance with the provisions set forth in Articles 2, 5 and 10 in such
calendar year. In the event the Independent Auditor determines that additional
amounts are due to Novo Nordisk, Aradigm shall pay such additional amounts to
Novo Nordisk and, to the extent that such additional amounts represent at least
five percent (5.00%) of the total amounts paid to Novo Nordisk under
Section 5.02 in respect of such calendar year, shall reimburse Novo Nordisk for
the fees and expenses of the Independent Auditor. In the event the Independent
Auditor determines that additional amounts representing less than five percent
(5.00%) of the total amounts paid to Novo Nordisk under Section 5.02 in any
calendar year are due to Novo Nordisk, then Aradigm shall have no obligation to
reimburse Novo Nordisk for the fees and expenses of the Independent Auditor.
     Section 5.06. Withholding Taxes. Under no circumstances shall either Party
be required to pay any amount in excess of or in addition to the payments agreed
under this Agreement. If any payment made by either Party under this Agreement
is subject to withholding tax, such withholding tax shall be borne by the other
Party and shall be deducted from any such payments made. Each Party shall
support the other Party in its efforts of minimizing any such withholding taxes
and reasonably provide such other Party with relevant information about
documentation needed to reduce the withholding tax to a legal minimum or to
secure applicable credits in respect thereof.
     Section 5.07. Currency. Payments under this Agreement in respect of Net
Sales made, and amounts expended, in currencies other than U.S. dollars shall be
calculated on the average daily exchange rate for the applicable year-to-date

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period (i.e., from January 1 of each year to the last Business Day of the
financial quarter in which such payment is made) for exchanging such currency
into U.S. dollars at the rate for buying U.S. dollars published in the Wall
Street Journal.
ARTICLE 6
Intellectual Property
     Section 6.01. Aradigm Intellectual Property Rights. (a) Except as provided
in this Article 6, Aradigm shall remain the sole owner of all Aradigm Background
IPR, Aradigm Patent Rights, Aradigm Know-How and Aradigm New IPR and shall use
Diligent Efforts to maintain and defend such Aradigm Background IPR, Aradigm
Patent Rights, Aradigm Know-How and Aradigm New IPR.
     (b) Aradigm shall be responsible for filing, maintaining and defending any
patents filed based on Aradigm Background IPR and will timely inform Novo
Nordisk of its intentions, activities and filings in this respect. Aradigm will
grant Novo Nordisk a perpetual, world-wide, non-exclusive, royalty-free license
under the Aradigm Background IPR, to develop, manufacture, use, market,
distribute, sell, offer for sale, have made, import and/or export any product
outside the field of pulmonary delivery, with the right to sublicense. Should
Aradigm decide not to patent an invention included in the Aradigm Background IPR
in any country, or should Aradigm decide to abandon any such patent or patent
application in any country, then Novo Nordisk shall have the right to do so at
its expense. In such case, Novo Nordisk shall in its sole discretion have the
option of becoming the owner thereof or, in the alternative, an exclusive
licensee thereof pursuant to Section 6.06. If Novo Nordisk elects to become the
owner of any patent or patent application based on such Aradigm Background IPR,
Novo Nordisk shall grant Aradigm a royalty-free license thereunder to develop,
manufacture, use, market, distribute, sell, offer for sale, have made, import
and/or export any product for the life of the patent (and such license shall be
limited to products outside the Field for so long as Novo Nordisk’s license
under Section 3.01 remains exclusive as to any Aradigm Patent Right and,
thereafter, outside and inside the Field), with the right to sublicense.
     Section 6.02. Novo Nordisk Intellectual Property Rights. (a) Except as
provided in this Article 6, Novo Nordisk shall remain the sole owner of all Novo
Nordisk Background IPR, Novo Nordisk Patent Rights, Novo Nordisk Know-How, Novo
Nordisk New IPR, the Transferred Patents and the Transferred Selected Pulmonary
Delivery Patents and shall use Diligent Efforts to maintain and defend the
Transferred Patents and Transferred Selected Pulmonary Delivery Patents.
     (b) Novo Nordisk shall be responsible for filing, maintaining and defending
any patents filed based on Novo Nordisk Background IPR and will timely inform
Aradigm of its intentions, activities and filings in this respect. Novo

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Nordisk will grant Aradigm a perpetual, world-wide, non-exclusive, royalty-free
license under the Novo Nordisk Background IPR (to the extent such Novo Nordisk
Background IPR relates to the Insulin Compound), to develop, manufacture, use,
market, distribute, sell, offer for sale, have made, import and/or export any
product outside the Field, with the right to sublicense. Should Novo Nordisk
decide not to patent an invention included in the Novo Nordisk Background IPR in
any country, or should Novo Nordisk decide to abandon any such patent or patent
application in any country, then Aradigm shall have the right to do so at its
expense. In such case, Aradigm shall in its sole discretion have the option of
becoming the owner thereof or, in the alternative, an exclusive licensee thereof
pursuant to Section 6.06. If Aradigm elects to become the owner of any patent or
patent application based on such Novo Nordisk Background IPR, Aradigm shall
grant Novo Nordisk a royalty-free license thereunder to develop, manufacture,
use, market, distribute, sell, offer for sale, have made, import and/or export
any product within the Field, with the right to sublicense.
     (c) Novo Nordisk shall be responsible for filing, maintaining and defending
any patents filed based on Transferred Patents and Transferred Selected
Pulmonary Delivery Patents and will timely inform Aradigm of its intentions,
activities and filings in this respect and provide Aradigm with copies of all
substantive communications between Novo Nordisk and the United States Patent and
Trademark Office (or any other relevant patent authority). Furthermore, Novo
Nordisk shall provide Aradigm with a reasonable opportunity to comment on
proposed strategies and responses relating to such prosecution. Should Novo
Nordisk decide not to patent an invention included in the Transferred Patents or
the Transferred Selected Pulmonary Delivery Patents in the European Union, the
United States, Japan or Australia, or should Novo Nordisk decide to abandon any
such patent or patent application in the European Union, the United States,
Japan or Australia, then Aradigm shall in its sole discretion have the option of
becoming the owner thereof or, in the alternative, an exclusive licensee thereof
pursuant to Section 6.06. If Aradigm elects to become the owner of any such
patent or patent application, Aradigm shall grant Novo Nordisk a royalty-bearing
license thereunder to develop, manufacture, use, market, distribute, sell, offer
for sale, have made, import and/or export any product within the Field, with the
right to sublicense.
     Section 6.03. Notice by Aradigm. (a) During the term of this Agreement,
Aradigm shall provide written notice to Novo Nordisk of any results,
improvements or inventions relevant to the Field prior to public disclosure of
such results, improvements or inventions in order to enable Novo Nordisk to
determine, upon consultation with Aradigm, the best method of protecting such
results, improvements or inventions.
     (b) Aradigm shall provide periodically, but no less than twice per calendar
year, to Novo Nordisk a list of results, improvements or inventions made by
Aradigm relevant to the Field (including without limitation changes to the
manufacturing process).

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     (c) Aradigm shall provide reasonable access to its employees, contractors
and suppliers to enable Novo Nordisk to perform intellectual property audits
once per calendar year to ensure that adequate protection is sought and
maintained for intellectual property developed by Aradigm within the Field or
relevant to the Field. In the event that Novo Nordisk determines, as a result of
its intellectual property audit or otherwise, that patent applications should be
filed in any country, Novo Nordisk shall request Aradigm to pursue such patent
applications; provided that, to the extent that Aradigm reasonably refuses such
request, and solely with respect to any Aradigm New IPR under which Novo Nordisk
is licensed pursuant to Section 3.01, Novo Nordisk shall have the right to file
any such patent applications. In such case, Novo Nordisk shall in its sole
discretion have the option of becoming the owner thereof or, in the alternative,
an exclusive licensee thereof pursuant to Section 6.06. If Novo Nordisk elects
to become the owner of any patent or patent application based on such Aradigm
Background IPR, Novo Nordisk shall grant Aradigm a royalty-free license
thereunder to develop, manufacture, use, market, distribute, sell, offer for
sale, have made, import and/or export any product for the life of the patent
(provided that, such license shall be limited to products outside the Field for
so long as Novo Nordisk’s license under Section 3.01 remains exclusive as to any
Aradigm Patent Right and thereafter, outside and inside the Field), with the
right to sublicense. Aradigm shall use its Diligent Efforts to cause its
employees and contractors to assist in prosecuting any patent applications
requested by Novo Nordisk in accordance with this Section 6.03(c).
     (d) Novo Nordisk shall be entitled to bring or enter any litigation in the
defense and enforcement of any patents filed by Novo Nordisk following Aradigm’s
abandonment of such patent or patent application as contemplated in
Section 6.01(b), Section 6.02(b) or Section 6.03(c) in respect of the activities
of any infringer thereof in the Field or any patents licensed exclusively to
Novo Nordisk under Section 6.06. Aradigm agrees to be joined as a party, and
Novo Nordisk agrees to pay Aradigm’s reasonable litigation costs.
     Section 6.04. Notice by Novo Nordisk. (a) During the term of this
Agreement, Novo Nordisk shall provide written notice to Aradigm of any results,
improvements or inventions relevant to the Development Program (other than any
results, improvements or inventions relevant to formulation of compounds or to
the interactions between materials and formulation of compounds) prior to public
disclosure of such results, improvements or inventions to enable Aradigm to
determine, upon consultation with Novo Nordisk, the best method of protecting
the results, improvements or inventions.
     (b) Novo Nordisk shall provide periodically, but no less than twice per
calendar year, to Aradigm a list of results, improvements or inventions made by
Novo Nordisk relevant to the Development Program (other than any results,
improvements or inventions relating to formulation of compounds or to the
interactions between materials and formulation of compounds).

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     (c) Novo Nordisk shall provide reasonable access to its employees,
contractors and suppliers who are (or have been within one (1) year of the time
at which such access is requested by Aradigm) working on the Development Program
to enable Aradigm to perform intellectual property audits once per calendar year
to ensure that adequate protection is sought and maintained for intellectual
property developed by Novo Nordisk relevant to the Development Program (other
than any results, improvements or inventions relating to formulation of
compounds or to the interactions between materials and formulation of
compounds). In the event that Aradigm determines, as a result of its
intellectual property audit or otherwise, that patent applications should be
filed in any country, Aradigm shall request Novo Nordisk to pursue such patent
applications; provided that, to the extent that Novo Nordisk reasonably refuses
such request, and solely with respect to any Novo Nordisk New IPR licensed under
Section 3.03(b) and (d), Aradigm shall have the right to file any such patent
applications. In such case, Aradigm shall in its sole discretion have the option
of becoming the owner thereof or, in the alternative, an exclusive licensee
thereof pursuant to Section 6.06. If Aradigm elects to become the owner of any
such patent application, Aradigm shall grant Novo Nordisk a world-wide,
nonexclusive, royalty-free license thereunder to develop, manufacture, use,
market, distribute, sell, offer for sale, have made, import and/or export any
product within the Field, with the right to sublicense. Novo Nordisk shall use
its Diligent Efforts to cause its employees and contractors to assist in
prosecuting any patent applications requested by Aradigm in accordance with this
Section 6.04(c).
     (d) Aradigm shall be entitled to bring or enter any litigation in the
defense and enforcement of any patents filed by Aradigm following Novo Nordisk’s
abandonment of such patent or patent application as contemplated in
Section 6.02(b) or Section 6.04(c) in respect of the activities of any infringer
thereof outside the Field or any patents licensed exclusively to Aradigm under
Section 6.06. Novo Nordisk agrees to be joined as a party, and Aradigm agrees to
pay Novo Nordisk’s reasonable litigation costs.
     Section 6.05. Pursuit of Patents. (a) The Parties agree that Aradigm’s
counsel shall continue to file, prosecute and maintain all Aradigm Background
IPR, Aradigm Patent Rights and Aradigm New IPR that are in each case in the
Field. Aradigm shall keep Novo Nordisk reasonably informed of the progress of
the applications and shall provide Novo Nordisk with copies of all substantive
communications between Aradigm and the United States Patent and Trademark Office
(or any other relevant patent authority). Furthermore, Aradigm shall provide
Novo Nordisk with a reasonable opportunity to comment on proposed strategies and
responses relating to such prosecution in the Field prior to their
implementation by Aradigm’s counsel.
     (b) Aradigm’s costs for preparing, filing and prosecuting additional patent
applications in respect of patents included within Aradigm Background IPR
pursuant to Section 6.05(a), and the costs of maintaining any patents that may
issue from such applications, shall be shared equally (i.e., 50/50) between Novo

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Nordisk and Aradigm. In the event that one (1) or more patents that are part of
the Aradigm Background IPR serve as the basis for recovery of damages or other
monetary award pursuant to a suit, action or proceeding under Section 7.02, then
any amounts received by either Party from such recovery or award shall first be
used to reimburse Aradigm and Novo Nordisk for their respective expenses related
to the suit, action or proceeding, then to reimburse the Parties for the
preparation, prosecution and maintenance costs of such patents or patent
applications (to the extent incurred pursuant to this Section 6.05(b) and not
previously reimbursed), and after such reimbursement any additional amounts
shall be shared 1:2 by Aradigm and Novo Nordisk respectively. Further, if
Aradigm licenses such patents outside the Field, or obtains damages or other
recovery by enforcing such patents outside the Field, then, after Aradigm has
recovered its duly documented internal and external costs of enforcing such
patents, 50% of the amount of license fees reasonably allocable to the licensing
of such patents, and 50% of the amount of such damages or other recovery, shall
be paid to Novo Nordisk until such time as Novo Nordisk has received an amount
equal to the amount of the costs of preparing, filing and maintaining such
patents (and respective applications) that were paid by Novo Nordisk hereunder,
and were not previously otherwise reimbursed.
     (c) In the event that Novo Nordisk does not agree that a particular patent
application should be prepared, filed or prosecuted pursuant to Section 6.05(a),
Aradigm’s costs for preparing and prosecuting such application, and the costs of
maintaining any patents that may issue from such application, shall be the sole
responsibility of Aradigm; and any amounts received by Aradigm resulting from
the granting of licenses and/or recovery of damages or other monetary awards
shall belong to Aradigm. Should Aradigm decide to abandon any patent application
or patent that is filed, prosecuted or maintained pursuant to this Section 6.05,
Novo Nordisk shall in its sole discretion have the option of becoming the owner
thereof or, in the alternative, an exclusive licensee thereof pursuant to
Section 6.06. If Novo Nordisk elects to become the owner of any patent or patent
application, Novo Nordisk shall grant Aradigm a royalty-free license thereunder
to develop, manufacture, use, market, distribute, sell, offer for sale, have
made, import and/or export any product for the life of the patent (provided
that, such license shall be limited to products outside the Field for so long as
Novo Nordisk’s license under Section 3.01 remains exclusive as to any Aradigm
Patent Right and thereafter, outside and inside the Field), with the right to
sublicense.
     Section 6.06. License Option in Lieu of Ownership. In each case in which a
Party has the right pursuant to this Article 6 of becoming the owner of a patent
or patent application that the other Party has refused to file or otherwise
decided to abandon, the Party having such right may elect (in its sole
discretion and by notifying the other Party in writing) to become the exclusive
licensee thereof rather than becoming the owner. If this election is made, then:
(a) the electing Party will prepare, file, prosecute and/or maintain (as
applicable) such patent application or patent at the electing Party’s direction
and sole expense; (b) the

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non-electing Party shall, and hereby does, grant the electing Party a worldwide,
exclusive, royalty-free license under such patent application or patent, where
the scope and duration of such license will be equivalent to the scope and
duration of rights such electing Party would have had if it became the owner of
such patent application or patent under the applicable section of this
Article 6; and (c) the non-electing Party shall continue to own such patent
application or patent and shall retain for itself the same rights to the extent
it would have been granted in the form of a non-exclusive license, with a right
to sublicense, had the electing Party become the owner of such patent or patent
application under the applicable section of this Article 6.
ARTICLE 7
Patent Cooperation
     Section 7.01. Enforcement of Patent Rights. (a) If Aradigm or Novo Nordisk,
as the case may be, becomes aware of (i) an actual or potential infringement of
any of the Patent Rights, Transferred Patents or Transferred Selected Pulmonary
Delivery Patents by a third party practicing in the Field or an actual or
potential infringement of Aradigm Patent Rights, Transferred Patents,
Transferred Selected Pulmonary Delivery Patents or patent rights under the
Aradigm New IPR by a third party practicing outside the Field, or (ii) the fact
that a third party practicing inside or outside the Field is challenging the
enforceability or validity of any of the Patent Rights, Transferred Patents or
Transferred Selected Pulmonary Delivery Patents, Aradigm or Novo Nordisk, as the
case may be, shall so notify Novo Nordisk or Aradigm, as the case may be, in
writing within fifteen (15) days. The notice shall set forth the relevant facts
(to the extent known by the notifying Party) in reasonable detail.
     (b) If Aradigm or Novo Nordisk, as the case may be, is served by a third
party with legal process initiating any proceeding alleging (i) non-infringement
of any Patent Rights, Transferred Patents or Transferred Selected Pulmonary
Delivery Patents by such third party practicing inside or outside the Field,
(ii) that such third party practicing inside or outside the Field is challenging
the enforceability or validity of any Patent Rights, Transferred Patents or
Transferred Selected Pulmonary Delivery Patents or (iii) anything that would
adversely affect the other Party’s rights under this Agreement, including
allegations of co-ownership, coinventorship, or implied or explicit license,
Aradigm or Novo Nordisk, as the case may be, shall so notify Novo Nordisk or
Aradigm, as the case may be, in writing within five (5) days.
     Section 7.02. Initiation of Action Relating to Patents. (a) With respect to
(i) Aradigm Patent Rights or Aradigm New IPR that are licensed exclusively to
Novo Nordisk hereunder, except for those which Novo Nordisk has the option of
exclusively licensing under Section 6.06 in lieu of ownership, when action is
deemed necessary or advisable by Novo Nordisk and Aradigm to prevent
infringement of such Aradigm Patent Rights or Aradigm New IPR by a third party

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practicing or making preparations to practice within the Field, to enforce such
Aradigm Patent Rights or Aradigm New IPR against such third party, and/or to
defend against an action by such third party challenging the enforceability or
the validity or asserting the noninfringement of such Aradigm Patent Rights or
Aradigm New IPR, then Novo Nordisk shall have the right (but not the obligation)
to initiate any action or conduct any such suit. Aradigm shall have the right to
join, at its own expense, such action and/or suit and to be represented in such
action and/or suit by its own counsel. Furthermore, if Aradigm is required under
applicable law to join any such suit, action, or proceeding, or if the failure
of Aradigm to be a party to such suit, action, or proceeding would in the
opinion of counsel to Novo Nordisk prejudice Novo Nordisk’s ability to enforce
the Aradigm Patent Rights or Aradigm New IPR, Aradigm shall execute all papers
and perform such other acts as may be reasonably required to permit the
litigation to be conducted, and Novo Nordisk shall reimburse Aradigm for its
expenses relating to its joining and participation thereto. If Aradigm is
required to be joined as a party in any such action by a third party practicing
within the Field challenging the enforceability or validity or asserting the
non-infringement of Aradigm Patent Rights or Aradigm New IPR, then upon the
request of Novo Nordisk, Aradigm shall waive any objection to such joinder on
the grounds of personal jurisdiction, venue or forum non conveniens.
     (b) With respect to Transferred Patents and Transferred Selected Pulmonary
Delivery Patents that are licensed exclusively to Aradigm outside the Field,
when action is deemed necessary or advisable by Aradigm and Novo Nordisk to
prevent infringement of the Transferred Patents or Transferred Selected
Pulmonary Delivery Patents by a third party practicing or making preparations to
practice outside the Field, to enforce such Transferred Patents or Transferred
Selected Pulmonary Delivery Patents against such third party and/or to defend
against an action by such third party challenging the enforceability or the
validity or asserting the noninfringement of such Transferred Patents or
Transferred Selected Pulmonary Delivery Patents, then Aradigm shall have the
right (but not the obligation) to initiate any action or conduct any such suit.
In its determination as to whether or not any action as contemplated in the
preceding sentence is necessary or advisable, Novo Nordisk shall consider in
good faith Aradigm’s interests outside the Field and shall not withhold its
consent to an action deemed necessary or advisable by Aradigm unless Novo
Nordisk reasonably believes taking such action would have a material adverse
impact on Novo Nordisk’s interests inside the Field. Novo Nordisk shall have the
right to join, at its own expense, such action and/or suit and to be represented
in such action and/or suit by its own counsel. Furthermore, if Novo Nordisk is
required under applicable law to join any such suit, action, or proceeding, or
if the failure of Novo Nordisk to be a party to such suit, action, or proceeding
would in the opinion of counsel to Aradigm prejudice Aradigm’s ability to
enforce the Transferred Patents or Transferred Selected Pulmonary Delivery
Patents, Novo Nordisk shall execute all papers and perform such other acts as
may be reasonably required to permit the litigation to be conducted, and Aradigm
shall reimburse Novo Nordisk for its expenses relating to its joining and
participation thereto as

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such expenses are incurred. If Novo Nordisk is required to be joined as a party
in any such action by a third party practicing outside the Field challenging the
enforceability or validity or asserting the non-infringement of the Transferred
Patents or Transferred Selected Pulmonary Delivery Patents, then upon the
request of Aradigm, Novo Nordisk shall waive any objection to such joinder on
the grounds of personal jurisdiction, venue or forum non conveniens.
     (c) With respect to the Transferred Patents and Transferred Selected
Pulmonary Delivery Patents, when action is deemed necessary or advisable by Novo
Nordisk to prevent infringement of the Transferred Patents or Transferred
Selected Pulmonary Delivery Patents by a third party practicing or making
preparations to practice within the Field, to enforce such Transferred Patents
or Transferred Selected Pulmonary Delivery Patents against such third party
and/or to defend against an action by such third party challenging the
enforceability or the validity or asserting the noninfringement of such
Transferred Patents or Transferred Selected Pulmonary Delivery Patents, then
Novo Nordisk shall have the right (but not the obligation) to initiate any
action or conduct any such suit. If Aradigm is required under applicable law to
join any such suit, action, or proceeding, or if the failure of Aradigm to be a
party to such suit, action, or proceeding would in the opinion of counsel to
Novo Nordisk prejudice Novo Nordisk’s ability to enforce the Transferred Patents
or Transferred Selected Pulmonary Delivery Patents, Aradigm shall execute all
papers and perform such other acts as may be reasonably required to permit the
litigation to be conducted, and Novo Nordisk shall reimburse Aradigm for its
expenses relating to its joining and participation thereto as such expenses are
incurred. If Aradigm is required to be joined as a party in any such action by a
third party practicing within the Field challenging the enforceability or
validity or asserting the non-infringement of the Transferred Patents or
Transferred Selected Pulmonary Delivery Patents, then upon the request of Novo
Nordisk, Aradigm shall waive any objection to such joinder on the grounds of
personal jurisdiction, venue or forum non conveniens.
     (d) If either (x) Novo Nordisk and Aradigm agree in accordance with the
provisions set forth in Section 7.02(a) above that action is necessary, but Novo
Nordisk does not commence such action within sixty (60) days of such agreement,
or (y) in respect of an Aradigm Patent Right that is not a Field Claim (as
defined below), Aradigm believes that action is necessary as to such Patent
Right, but Novo Nordisk does not agree in the discussions above that action is
necessary, then in either case Aradigm shall have the right to initiate and
conduct, at its expense, an independent action against the third party infringer
of the Aradigm Patent Rights or Aradigm New IPR in the Field. If Aradigm
subsequently ceases to continue (other than by settlement) an action initiated
or conducted under this Section 7.02(d), or such action is dismissed voluntarily
or involuntarily, then Novo Nordisk shall have the right, but not the obligation
to initiate, continue, and/or conduct, at its expense and subject to all other
applicable provisions of this Section 7.02, an action as permitted by law
against the third party within sixty (60) days of Aradigm’s ceasing to continue
its action against such third party or of such dismissal. For purposes of this
Section 7.02(d), a “Field Claim” is a claim in

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the Aradigm Patent Rights or patent rights under the Aradigm New IPR that
expressly and directly is limited to activities in the Field. For purposes of
Sections 7.02(a) and (d), Novo Nordisk shall not disagree, based primarily on
any contractual obligations Novo Nordisk may have to a third party, with
Aradigm’s belief that action is deemed necessary to prevent infringement of such
Patent Rights by a third party practicing within the Field. For purposes of
Sections 7.02(b) and (d), Aradigm shall not disagree, based principally on any
contractual obligations Aradigm may have to a third party, with Novo Nordisk’s
belief that action is deemed necessary to prevent infringement of Transferred
Patents or Transferred Selected Pulmonary Delivery Patents by a third party
practicing outside the Field.
     (e) If the infringement in the Field involves sales of a Directly
Infringing Product (as defined below), and Novo Nordisk believes that action is
necessary, but Aradigm does not agree in the discussions above that action is
necessary within sixty (60) days of commencing such discussions, then Novo
Nordisk shall thereafter have the right to initiate and conduct, at its expense,
an action against the third party based on the Directly Infringing Product,
subject to all other applicable provisions of this Section 7.02. For purposes of
this Section 7.02, a “Directly Infringing Product” shall mean either (x) a
disposable unit dose package intended and capable for use to deliver a
medicament within the Field in a device that is a copy of, or substantially the
same as, a Device used or tested by Novo Nordisk in clinical trials under this
Agreement, or (y) a pulmonary delivery device intended for and capable of using
disposable unit dose package that is a copy of, or substantially the same as,
that utilized in a Packaged Product used or tested by Novo Nordisk in clinical
trials under this Agreement. As used herein and in Section 10.05(b)(ii) and
Section 10.05(c)(i), the term “substantially the same as” with respect to a
device means that the two devices being compared have the same general
principles of function, such as: (A) active breath control; (B) delivery of an
aerosol of fine particles; and (C) an aerosol created from a liquid formulation
of drug. As used herein and in Section 10.05(b)(ii) and Section 10.05(c)(i), the
term “substantially the same as” with respect to a disposable unit dose package
means that the two disposable unit dose packages being compared have the same
general principles of function, such as: (X) liquid drug formulation; and (Y) an
aerosol of fine particles created through an aerosol nozzle integrated with a
flexible porous membrane.
     (f) In a suit initiated or conducted by Novo Nordisk pursuant to
Sections 7.02(a), (c), (d) or (e), in the initiation, conduct and settlement of
the suit Novo Nordisk shall consider in good faith the interests of Aradigm,
both inside and outside the Field. Novo Nordisk shall keep Aradigm reasonably
informed of the progress of the suit, action, or proceeding, and shall provide
Aradigm in a manner reasonably designed to preserve attorney-client privilege
with copies of all substantive communications relating to the suit, action, or
proceeding , subject to confidentiality obligations to third parties. To the
extent that Aradigm believes that a particular strategy for conduct and/or
settlement of the suit proposed by Novo Nordisk would have a material adverse
impact on Aradigm’s activities

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outside the Field and/or Aradigm’s interests outside the Development Program,
the Parties agree to meet and discuss in good faith an alternative strategy to
address Aradigm’s concerns, and Novo Nordisk shall not proceed with any strategy
without Aradigm’s approval, which shall not be unreasonably withheld or delayed.
Aradigm shall fully cooperate with and supply all assistance reasonably
requested by Novo Nordisk in an action conducted by Novo Nordisk under
Sections 7.02(a), (c), (d) or (e) above, and Novo Nordisk shall reimburse
Aradigm for its costs and expenses relating thereto.
     (g) In a suit initiated or conducted by Aradigm pursuant to Section 7.02(b)
or (d), in the initiation, conduct and settlement of the suit Aradigm shall
consider in good faith the interests of Novo Nordisk both inside and outside the
Field. Aradigm shall keep Novo Nordisk reasonably informed of the progress of
the suit, action, or proceeding, and shall provide Novo Nordisk in a manner
reasonably designed to preserve attorney-client privilege with copies of all
substantive communications relating to the suit, action, or proceeding, subject
to confidentiality obligations to third parties. To the extent that Novo Nordisk
believes that a particular strategy for conduct and/or settlement of the suit
proposed by Aradigm would have a material adverse impact on Novo Nordisk’s
interests in the Field, the Parties agree to meet and discuss in good faith an
alternative strategy to address Novo Nordisk’s concerns, and Aradigm shall not
proceed with any strategy without Novo Nordisk’s approval, which shall not be
unreasonably withheld or delayed. Novo Nordisk shall fully cooperate with and
supply all assistance reasonably requested by Aradigm in such action.
     (h) In any suit initiated or conducted by Novo Nordisk pursuant to
Sections 7.02(a), (c), (d) or (e), all internal and external costs and expenses
of every kind and character incurred by Novo Nordisk, including attorney’s fees,
involved in the prosecution of the suit, shall be the responsibility of Novo
Nordisk. In any suit initiated or conducted by Aradigm pursuant to Section
7.02(b) or (d), all internal and external costs and expenses of every kind and
character incurred by Aradigm, including attorney’s fees, involved in the
prosecution of the suit, shall be the responsibility of Aradigm.
     (i) Any damages or other monetary or non-monetary awards recovered in such
a suit initiated or conducted by Novo Nordisk pursuant to Section 7.02(a), (c),
(d) or (e), or by Aradigm pursuant to Section 7.02(d), shall be allocated to the
Parties in the following manner: First, Novo Nordisk and Aradigm shall be
reimbursed for their respective internal and external expenses (including
reasonable attorney’s fees and costs) incurred in the suit (to the extent not
previously reimbursed in accordance with Section 6.05(b)); and, second, the
remaining balance from such recovery shall be shared by Novo Nordisk and Aradigm
according to the following formula: [2:1] Novo Nordisk:Aradigm. If the recovery
is less than both Parties’ costs, the recovery shall be allocated on a pro rata
basis based on each Party’s internal and external expenses. The determination of
the value of non-monetary benefits or awards shall be through mutual agreement
between the parties. If an agreement cannot be reached between

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the Parties, then the fair value of such non-monetary benefits or awards shall
be established by arbitration conducted as provided for in Section 11.01. Any
damages or other monetary or non-monetary awards recovered in such a suit
initiated and conducted by Aradigm pursuant to Section 7.02(b) shall be retained
entirely by Aradigm.
     (j) Notwithstanding the above provisions, with respect to Novo Nordisk
Patent Rights and patents included in the Novo Nordisk New IPR, Novo Nordisk
shall bear the sole responsibility for initiating and conducting any suits to
defend such rights; shall bear all costs of such suits; shall have the right to
settle any such suit without consulting with Aradigm; and shall retain the full
recovery from such suit. Novo Nordisk will keep Aradigm reasonably informed of
the status of any such threatened, pending, or actual suit or proceeding
regarding the Novo Nordisk Patent Rights involving activity in the Field.
     (k) Notwithstanding anything else contained herein, with respect to any
practice or activity outside the Field, Aradigm (or its licensees, as
applicable) shall have the sole right and responsibility for initiating and
conducting any suits to defend or enforce the Aradigm Patent Rights and patents
included in the Aradigm New IPR against practice outside the Field and shall
bear all costs of such suits. To the extent that such a suit or proceeding could
have a material impact on Novo Nordisk’s interests in the Field, Aradigm shall
keep Novo Nordisk reasonably informed of the status of any such suit or
proceeding regarding Aradigm Patent Rights or patents included in the Aradigm
New IPR outside the Field and shall offer Novo Nordisk an opportunity to comment
on Aradigm’s strategy in conducting, and/or settling such suit, to the extent
not prevented by confidentiality or other contractual obligations to third
parties. Subject to the preceding provision, Aradigm shall have the right to
settle any such suit without consulting with Novo Nordisk and shall retain the
full recovery from such suit.
     (l) For any of the disclosure or notification obligations of the Parties
hereunder, it is understood that all information disclosed under such
obligations is covered by the confidentiality provisions set forth in Article 8,
and further that neither Party shall be required, by such obligations, to
disclose privileged information (e.g., information protected by work product
and/or attorney client privilege) or information in respect of which such Party
is subject to confidentiality or other contractual obligations to third parties.
However, each Party agrees to use reasonable efforts to disclose the substance
of any such information in a manner that does not destroy the privilege, and the
Parties shall use good faith efforts to work together to establish a procedure
or relationship that enables the disclosure of such privileged information
without destroying the privilege.
     Section 7.03. Interferences. (a) With respect to Aradigm Patent Rights and
Aradigm New IPR that are licensed to Novo Nordisk under Article 3, in the event
that any of such Aradigm Patent Rights or Aradigm New IPR are subject to

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an interference action in the United States Patent and Trademark Office, Aradigm
shall provide Novo Nordisk with copies of all communications relating to the
interference action and shall keep Novo Nordisk reasonably informed of the
progress of the interference action. Furthermore, Aradigm shall not enter into
any settlement agreement or take other dispositive action in the interference
without giving good faith consideration to Novo Nordisk’s interests and
concerns, and if such action would have a material adverse impact on Novo
Nordisk’s activities in the Field, without obtaining the prior consent of Novo
Nordisk (which consent shall not be unreasonably withheld or delayed); and
(b) With respect to Transferred Patents and Transferred Selected Pulmonary
Delivery Patents that are licensed to Aradigm under Article 3, in the event that
any of such Transferred Patents or Transferred Selected Pulmonary Delivery
Patents are subject to an interference action in the United States Patent and
Trademark Office, Novo Nordisk shall provide Aradigm with copies of all
communications relating to the interference action and shall keep Aradigm
reasonably informed of the progress of the interference action. Furthermore,
Novo Nordisk shall not enter into any settlement agreement or take other
dispositive action in the interference without giving good faith consideration
to Aradigm’s interests and concerns, and if such action would have a material
adverse impact on Aradigm’s activities outside the Field, without obtaining the
prior consent of Aradigm (which consent shall not be unreasonably withheld or
delayed).
     Section 7.04. Defense and Settlement of Third Party Patent Claims. (a) If
conduct of the Development Program or the manufacture, use, marketing, or sale
of a Device or Packaged Product results in a claim, suit, action, or proceeding
by a third party against a Party for patent infringement of such third party’s
patent rights (a “Field Infringement”), the Party first having notice of such
claim of Field Infringement shall notify the other Party in writing within
fifteen (15) days. The notice shall set forth the facts of the claim (to the
extent known by the Party having notice) in reasonable detail.
     (b) If during the term of this Agreement, a third party makes or attempts
to enforce a claim, files suit, or initiates a proceeding or any action that has
the potential to affect enforceability, validity, or exclusivity of any Patent
Rights or Transferred Patents or Transferred Selected Pulmonary Delivery Patents
that would materially affect rights within the Field, then the Party having
notice shall notify the other Party in writing within fifteen (15) days. Any
notice to be provided pursuant to this Section 7.04(b) shall set forth the facts
(to the extent known by the Party having notice) in reasonable detail.
     (c) Within fifteen (15) days of notification under Section 7.04(a) or
Section 7.04(b), if applicable and upon agreement of the Parties, a senior
officer of each Party shall meet to discuss in good faith and agree upon a
strategy for responding to such third party suit, action, or proceeding, which
strategy shall accommodate both Parties’ commercial interests and investment in
the Development Program. To the extent that the Parties cannot agree to such a
strategy for conduct and/or settlement of the proceeding or suit, then the Party
that

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is the subject of such proceeding or suit may conduct or settle such suit in its
sole discretion, unless the other Party agrees in writing to assume the defense
of such action and bear the cost of such defense and settlement or any final
judgment at its own expense; provided that, the Party assuming the defense of
such proceeding or suit shall bear only the excess of the cost of any final
settlement or judgment over the cost to which the Party that is the subject of
the proceeding or suit was to have paid in any proposed final settlement that
such Party had agreed to pay prior to the assumption of the defense by the other
Party.
     Section 7.05. Sharing Of License Revenue. In the event Novo Nordisk grants
any license under any or all of the Transferred Patents and Transferred Selected
Pulmonary Delivery Patents in the Field (other than a license of the Transferred
Patents and Transferred Selected Pulmonary Delivery Patents by Novo Nordisk to
its customers or Joint Marketing Partners, which shall not be subject to the
revenue share described in the following clause), any revenue received in
respect of such license shall be shared by Aradigm and Novo Nordisk according to
the following formula: [2:1] Novo Nordisk: Aradigm. Notwithstanding the
foregoing, if such license is granted by Novo Nordisk in connection with the
settlement of a suit initiated or conducted by Novo Nordisk pursuant to Section
7.02 (a), (c), (d) or (e) or by Aradigm pursuant to Section 7.02(d), and the
Parties’ expenses of suit have not otherwise been fully reimbursed pursuant to
Section 7.02(i), then license revenue shall first be applied to reimbursement of
such expenses until they are fully reimbursed. License revenue shall include
license fees, milestones, royalties and other amounts received in respect of
such license. If any non-monetary compensation is received by Novo Nordisk, then
Novo Nordisk will pay Aradigm for its share in cash based on the fair value of
such non-monetary compensation, as established by mutual agreement of the
Parties. If an agreement cannot be reached between the Parties, then the fair
value of such non-monetary consideration shall be established by arbitration
conducted as provided in Section 11.01.
ARTICLE 8
Secrecy
     Section 8.01. Confidentiality. (a) Each Party agrees that it shall use, and
that it shall cause any Person to whom Confidential Information is disclosed
pursuant to clause (b)(i) below to use, the Confidential Information only in
connection with the Transaction Agreements, and the exercise of its rights
hereunder and not for any other purpose.
     (b) Each Party further acknowledges and agrees that it shall not disclose
any Confidential Information to any Person, except that Confidential Information
may be disclosed:

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     (i) to such Party s Representatives (as defined below) in the normal course
of the performance of their duties or to any financial institution providing
credit to such Party,
     (ii) to the extent required by applicable law, rule or regulation
(including complying with any oral or written questions, interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process to which a Party is subject; provided that, such Party shall
give the other Party prompt notice of such request(s), to the extent
practicable, so that such other Party may seek an appropriate protective order
or similar relief (and the Party shall cooperate with such efforts by such other
Party, and shall in any event make only the minimum disclosure required by such
law, rule or regulation)),
     (iii) to any governmental or regulatory authority or agency in order to
obtain from such authority or agency any authorization required or contemplated
by this Agreement or any of the other Transaction Agreements as long as such
authority or agency is advised of the confidential nature of such information,
or
     (iv) as mutually agreed between the Parties.
     (c) Nothing contained herein shall prevent the use (subject, to the extent
possible, to a protective order) of Confidential Information in connection with
the assertion or defense of any claim by or against any Party.
     (d) For purposes of this Section 8.01, “Confidential Information” means any
information concerning this Agreement or the Parties respective rights and
obligations hereunder, including trade secrets, business methods, cost,
manufacturing and customer information and information relating to the Patent
Rights, the Transferred Patents, the Transferred Selected Pulmonary Delivery
Patents and the Know-How in the possession of or furnished to a Party by the
other Party; provided that, the term “Confidential Information” does not include
information to the extent that it (i) is or becomes generally available to the
public other than as a result of a disclosure by a Party or its partners,
directors, officers, employees, agents, counsel, investment advisers or
representatives (all such persons being collectively referred to as
“Representatives”) in violation of this Agreement or any of the Transaction
Agreements, (ii) is or was available to such Party on a non-confidential basis
(as demonstrated by the written records of such Party) prior to its disclosure
to such Party by the other Party or (iii) was or becomes available to such Party
on a non-confidential basis from a source other than the other Party, which
source is or was (at the time of receipt of the relevant information) not, to
the best of such Party’s knowledge, bound by a confidentiality agreement with
(or other confidentiality obligation to) the other Party or another Person.

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     Section 8.02. Publication Planning. Novo Nordisk shall be solely
responsible for all publication planning, it being understood that Novo Nordisk
will endeavor to present to the Review Committee its overall publication
planning strategy relating to the Development Program in good time prior to
implementation and will in such event in good faith consider any reasonable
suggestion made by Aradigm for amendments to such strategy, it being at all
times understood that Novo Nordisk shall not be entitled to publish or present
any information covered by Section 8.01 without the prior written consent of
Aradigm. For other publications or public presentations not covered by Novo
Nordisk’s publication planning hereunder, Novo Nordisk shall be solely
responsible for any publication in any technical or scientific article or other
presentation of any of the results of the Development Program; provided that,
Novo Nordisk shall not publish or publicly present any conclusions regarding the
safety and efficacy of the Device and Packaged Product and/or pulmonary delivery
of drugs without first: (a) providing Aradigm a draft of such publication or
public presentation; and (b) obtaining the prior written consent of Aradigm for
the release of such publication or public presentation, such consent not to be
unreasonably withheld or delayed. For purposes of this Section 8.02, Aradigm
shall be deemed to have consented to the release of such draft publication or
public presentation if it shall not have provided comments to such draft
publication or public presentation to Novo Nordisk in writing within ten
(10) days of its receipt thereof.
     Section 8.03. Term of Confidentiality Provisions. This Article 8 shall
remain in force for ten (10) years from the date of termination of this
Agreement.
ARTICLE 9
Notice
     Section 9.01. Notice. Any notice to be given under this Agreement shall be
sent in writing in English by registered airmail or telecopied,
     if to Aradigm, to:
Aradigm Corporation
3929 Point Eden Way
Hayward, California 94545
Attention: Chief Financial Officer
Telephone: +1 510-265-9000
Telefax: +1 510-265-0277

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     with a copy to:
Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, California 94306
Attention: James C. Kitch
Telephone: +1 650-843-5027
Telefax: +1 650-849-7400
     if to Novo Nordisk, to:
Novo Nordisk A/S
Novo Alle
DK-2880 Bagsvaerd
Denmark
Attention: General Counsel
Telephone: +45 44 44 88 88
Telefax: +45 44 42 41 35
     and
Attention: Vice President, Business Development
Telephone: + 45 44 42 39 00
Telefax: + 45 44 42 16 98
     or to such other addresses and telecopier numbers as may from time to time
be notified by either Party to the other hereunder.
     Section 9.02. Deemed Receipt of Notice. Any notice sent by registered
airmail shall be deemed to have been delivered within seven (7) working days
after dispatch and any notice sent by telex or telefax shall be deemed to have
been delivered within twenty-four (24) hours after dispatch. Notice of change of
address shall be effective upon receipt.
ARTICLE 10
Term and Termination
     Section 10.01. Term. This Agreement shall commence on the date hereof and
shall continue in full force and legal effect thereafter until terminated in
accordance with this Article 10.
     Section 10.02. Termination by Novo Nordisk. (a) Novo Nordisk shall have the
right to terminate this Agreement at its sole discretion upon one hundred and
twenty (120) days’ prior written notice to Aradigm.
     (b) Novo Nordisk shall also have the right to terminate this Agreement upon
thirty (30) days’ prior written notice to Aradigm in the event that Aradigm
shall have committed a material breach of this Agreement or any of the other
Transaction Agreements and shall have failed to remedy such breach within sixty
(60) days of written notice of such breach.

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     Section 10.03. Termination by Aradigm. (a) Aradigm shall have the right to
terminate this Agreement upon thirty (30) days’ prior written notice to Novo
Nordisk in the event that Novo Nordisk shall have committed a material breach of
this Agreement and shall have failed to remedy such breach within sixty
(60) days of written notice of such breach; provided that, notwithstanding the
foregoing, Novo Nordisk shall have one hundred twenty (120) days following
written notice by Aradigm to remedy any breach of the obligations set forth in
Section 2.05(a)-(d).
     Section 10.04. Termination By Either Party. Either Party, in addition to
any other remedies available to it in law, may terminate this Agreement upon
written notice to the other Party in the event such other Party shall
     (a) become insolvent or bankrupt;
     (b) make an assignment for the benefit of its creditors;
     (c) appoint a trustee or receiver for itself for all or a substantial part
of its property, seek reorganization, liquidation, dissolution, a winding
arrangement, composition or readjustment of its debts;
     (d) have its controlling interests acquired by a third party manufacturer
of an approved insulin product or an insulin product under clinical development
at any time unless such manufacturer promptly and expressly assumes and agrees
in writing to be directly bound by the terms of this Agreement; or
     (e) have its controlling interest acquired by any company reasonably deemed
to be a competitor by Novo Nordisk or Aradigm, as applicable, unless such
company promptly and expressly assumes and agrees in writing to be directly
bound by the terms of this Agreement.
     Section 10.05. Rights and Obligations of the Parties after Termination.
(a) In the event that either Party terminates this Agreement, (i) Aradigm shall
retain its perpetual licenses under Section 3.03 and (ii) both Parties shall
retain perpetual, world-wide, non-exclusive, royalty-free, licenses, to Aradigm
New IPR and Novo Nordisk New IPR Made Jointly by Aradigm and Novo Nordisk, to
the extent not already owned by such Party, to develop, manufacture, use,
market, distribute, sell, offer for sale, have made, import and/or export any
product within and outside the Field; provided that, in the event of termination
by Novo Nordisk in accordance with the provisions set forth in Section 10.02(b)
or Section 10.04, and in the event that Novo Nordisk elects to continue the
Development Program pursuant to Section 10.05(b)(i), the license retained by
Novo Nordisk hereunder shall be exclusive within the Field and non-exclusive
outside the Field.
     (b) In the event that Novo Nordisk terminates this Agreement in accordance
with the provisions set forth in Section 10.02(b) or Section 10.04, the Parties
hereto shall have the following additional rights and obligations:

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     (i) in the event that Novo Nordisk, in its notice of termination, informs
Aradigm of Novo Nordisk’s intent to continue the Development Program: (1) Novo
Nordisk shall retain its licenses under Section 3.01 and shall pay royalties
under Section 5.01 until the later of (A) the date that is ten (10) years from
First Marketing of any Packaged Product and the Device and (B) the expiration
date of the last patent (including any Transferred Patent and any Transferred
Selected Pulmonary Delivery Patent) that covers the Packaged Product and the
Device and the development, manufacturing, use, marketing, distribution, sale,
offer for sale, importation and/or exportation thereof in and from the
Territory, and (2) all rights and obligations of the Parties under
Sections 2.02, 2.03, 2.04, 2.08, 4.01, 6.03 and 6.04 will terminate. For the
avoidance of doubt, the remaining provisions of this Agreement will survive,
including Novo Nordisk’s license rights and payment obligations (as set forth in
(1) above) and Novo Nordisk’s obligation to expend Diligent Efforts to
clinically develop and register the Insulin Compound Packaged Product and the
Device for Broad Regulatory Approval in the United States and the European
Union.
     (ii) in the event that Novo Nordisk fails to provide Aradigm with written
notice of its intent to continue the Development Program pursuant to
Section 10.05(b)(i), (A) the license granted to Novo Nordisk under Section 3.01,
and to its permitted sublicensees thereunder, shall immediately terminate,
(B) Aradigm shall be, and hereby is, granted a perpetual, world-wide,
non-exclusive, royalty-free license under the Transferred Patents and
Transferred Selected Pulmonary Delivery Patents to develop, manufacture, use,
market, distribute, sell, offer for sale, have made, import and/or export any
product within the Field, with a right to sublicense and (C) Novo Nordisk shall
be, and hereby is, granted a perpetual, world-wide, non-exclusive,
royalty-bearing, license, with the right to sublicense its customers and Joint
Marketing Partners in accordance with Section 3.02, under the Aradigm Patent
Rights, Aradigm Know-How and Aradigm New IPR to develop, manufacture, use,
market, distribute, sell, offer for sale, have made, import and/or export
pulmonary products (other than Packaged Products, Devices or products that are
substantially the same as such Packaged Products or Devices) in the Field. In
such case, in consideration of the rights which Novo Nordisk has obtained in
Aradigm Patent Rights, Aradigm Background IPR, Aradigm Know-How, Aradigm New
IPR, Transferred Patents and Transferred Selected Pulmonary Delivery Patents,
Novo Nordisk shall pay to Aradigm a royalty on Net Sales within the Field (by
any member of the Novo Nordisk Affiliate Group or any permitted sublicensee
thereof), if any, of pulmonary products that use, or are covered by, any Aradigm
Know-How or any know-how included in the Aradigm New IPR, or that are covered by
any Transferred Patents, Transferred Selected Pulmonary Delivery Patents,
Aradigm Patent Rights or any patents included in the Aradigm New IPR. Such
royalty shall be payable until the later of: (A) the date that

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is ten (10) years from First Marketing of such pulmonary product; and (B) the
expiration date of the last patent (including any Transferred Patent or any
Transferred Selected Pulmonary Delivery Patent) that covers such pulmonary
product and the development, manufacturing, use, marketing, distribution, sale,
offer for sale, importation and/or exportation thereof in and from the
Territory. The rate for such royalty shall be determined in accordance with the
provisions set forth in Section 5.03(a) in respect of the applicable patents and
know-how, but in no event shall such royalty exceed: (X) in the case of any
pulmonary products using an Alternative Technology to deliver a specific insulin
or insulin analog class, (1) for a First Marketed Product and Device, three and
one quarter percent (3.25%) of Net Sales thereof during the applicable Stage 1
Commercialization Period, four percent (4.00%) of Net Sales thereof during the
applicable Stage 2 Commercialization Period, and five percent (5.00%) of Net
Sales thereof during the applicable Stage 3 Commercialization Period or (2) for
any Later Marketed Product and Device, four and one-quarter percent (4.25%) of
Net Sales thereof during the applicable Stage 1 Commercialization Period and
five percent (6.00%) of Net Sales thereof during the applicable Stage 2
Commercialization Period and the applicable Stage 3 Commercialization Period;
and (Y) for any other pulmonary products, four and one-quarter percent (4.25%)
of Net Sales thereof during the applicable Stage 1 Commercialization Period and
five percent (5.00%) of Net Sales thereof during the applicable Stage 2
Commercialization Period and the applicable Stage 3 Commercialization Period.
     (c) In the event that Novo Nordisk terminates this Agreement in accordance
with any provision contained herein other than as set forth in Section 10.02(b)
or Section 10.04, the Parties hereto shall have the following additional rights
and obligations:
     (i) The license granted to Novo Nordisk under Section 3.01, and to its
permitted sublicensees thereunder, shall immediately terminate, and Novo Nordisk
shall be, and hereby is, granted a perpetual, world-wide, non-exclusive,
royalty-bearing license, with the right to sublicense its customers and Joint
Marketing Partners in accordance with Section 3.02, under the Aradigm Patent
Rights, Aradigm Know-How and Aradigm New IPR to develop, manufacture, use,
market, distribute, sell, offer for sale, have made, import and/or export
pulmonary products (other than Packaged Products, Devices or products that are
substantially the same as such Packaged Products or Devices) in the Field. In
such case, in consideration of the rights which Novo Nordisk has obtained in
Aradigm Patent Rights, Aradigm Background IPR, Aradigm Know-How, Aradigm New
IPR, Transferred Patents and Transferred Selected Pulmonary Delivery Patents,
Novo Nordisk shall pay to Aradigm a royalty on Net Sales within the Field (by
any member of the Novo Nordisk Affiliate Group or any permitted sublicensee
thereof), if any, of pulmonary products that use, or are covered by, any Aradigm
Know-How or any

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know-how included in the Aradigm New IPR, or that are covered by any Transferred
Patents, Transferred Selected Pulmonary Delivery Patents, Aradigm Patent Rights
or any patents included in the Aradigm New IPR. Such royalty shall be payable
until the later of: (A) the date that is ten (10) years from First Marketing of
such pulmonary product; and (B) the expiration date of the last patent
(including any Transferred Patent or any Transferred Selected Pulmonary Delivery
Patent) that covers such pulmonary product and the development, manufacturing,
use, marketing, distribution, sale, offer for sale, importation and/or
exportation thereof in and from the Territory. The rate for such royalty shall
be determined in accordance with the provisions set forth in Section 5.03(a) in
respect of the applicable patents and know-how, but in no event shall such
royalty exceed: (X) in the case of any pulmonary products using an Alternative
Technology to deliver a specific insulin or insulin analog class, (1) for a
First Marketed Product and Device, three and one quarter percent (3.25%) of Net
Sales thereof during the applicable Stage 1 Commercialization Period, four
percent (4.00%) of Net Sales thereof during the applicable Stage 2
Commercialization Period, and five percent (5.00%) of Net Sales thereof during
the applicable Stage 3 Commercialization Period; or (2) for any Later Marketed
Product and Device, four and one-quarter percent (4.25%) of Net Sales thereof
during the applicable Stage 1 Commercialization Period and five percent (5.00%)
of Net Sales during the applicable Stage 2 Commercialization Period and the
applicable Stage 3 Commercialization Period; and (Y) for any other pulmonary
products, four and one-quarter percent (4.25%) of Net Sales thereof during the
applicable Stage 1 Commercialization Period and five percent (5.00%) of Net
Sales thereof during the applicable Stage 2 Commercialization Period and the
applicable Stage 3 Commercialization Period;
     (ii) Aradigm shall be, and hereby is, granted a perpetual, world-wide,
non-exclusive, royalty-bearing (as described below in this Section 10.05(c)(ii))
license, with the right to sublicense, under the Novo Nordisk Know-How and
know-how included within Novo Nordisk New IPR and certain claims under the Novo
Nordisk Patent Rights and the patents included within Novo Nordisk New IPR,
which are necessary to develop, manufacture, use, market, distribute, sell,
offer for sale, import and/or export: (1) the Insulin Compound Packaged Product
containing the Insulin Compound formulation as it exists on the date of
termination and the Device and/or later generation pulmonary products in the
Field derived from such Insulin Compound Packaged Product containing the Insulin
Compound formulation as it exists on the date of termination and the Device; and
(2) any pulmonary drug delivery product outside the Field. Novo Nordisk shall in
good faith specify in writing to Aradigm promptly following termination the
patent claims that describe such Insulin Compound formulation to enable Aradigm
to practice its rights under the foregoing license, as further described below;
provided that, if Aradigm notifies Novo Nordisk in writing of any additional
claims that Aradigm

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believes are necessary to practice such license, then the Parties shall meet and
discuss in good faith whether to specify such additional claims. For the
avoidance of doubt, Aradigm’s license with respect to the Insulin Compound
Packaged Product under the Novo Nordisk Know-How and the know-how included
within the Novo Nordisk New IPR and the specific claims under the Novo Nordisk
Patent Rights and the patents included in the Novo Nordisk New IPR permit
Aradigm to make only (a) the exact formulation of the Insulin Compound as it
exists at the time of termination; (b) a formulation of such Insulin Compound
with a lower (but not higher) concentration of insulin, in each case falling
within the concentration ranges in the specified claims; (c) subject to
(b) above, a formulation of such Insulin Compound that increases or decreases
the range of excipients or other non-Insulin Compound components included within
such existing formulation, provided such excipients or other non-Insulin
Compound components remain within a range of two (2) times the quality
specification for such component; and/or (d) a formulation of such Insulin
Compound to which excipients or other components may be added or deleted
provided such additional excipients or other compounds do not infringe any
intellectual property rights of Novo Nordisk or any of its Affiliates, other
than such intellectual property rights licensed to Aradigm under this
Section 10.05(c)(i). Within the Field, such license shall be royalty-free prior
to First Marketing of any Packaged Product and/or Device by Aradigm or its
sublicensees; after such First Marketing, such license shall bear a royalty of
(A) two and seven-tenths percent (2.70%) of Net Sales (by Aradigm, any of its
Affiliates or permitted sublicensees) of Device and Packaged Products falling
within (a)-(d) above for the first four (4) years following First Marketing and
thereafter four percent (4.00%) of such Net Sales of the Packaged Product and
the Device; and (B) four percent (4.00%) of Net Sales (by Aradigm, any of its
Affiliates or sublicensees) of later generation pulmonary products derived from
such Device and/or Packaged Products. Outside the Field, such royalty shall bear
a royalty determined in accordance with the provisions set forth in
Section 5.03(a). Additionally, Aradigm shall retain its licenses under
Sections 3.03(b) and (c), which licenses shall be expanded to include the
ability to develop, manufacture, use, market, distribute, sell, offer for sale,
have made, import and/or export any product inside the Field (provided, however,
that the license in Section 3.03(c) shall be non-exclusive inside the Field);
and
     (iii) Novo Nordisk shall supply insulin to Aradigm in accordance with the
provisions set forth in Section 10.05(f) until the date of the first Regulatory
Submission if, and only if, Novo Nordisk shall have terminated this Agreement
prior to First Marketing of the Insulin Compound Packaged Product and the
Device.
     (d) In the event that Aradigm terminates this Agreement in accordance with
the provisions set forth in Section 10.03 or Section 10.04, Aradigm shall be,

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and hereby is, granted a perpetual, world-wide, non-exclusive license, with the
right to sublicense, under the Novo Nordisk Know-How and know-how included
within Novo Nordisk New IPR and certain claims under the Novo Nordisk Patent
Rights and the patents included within Novo Nordisk New IPR, which are necessary
to develop, manufacture, use, market, distribute, sell, offer for sale, import
and/or export: (1) the Insulin Compound Packaged Product containing the Insulin
Compound formulation as it exists on the date of termination and the Device
and/or later generation pulmonary products in the Field derived from such
Insulin Compound Packaged Product containing the Insulin Compound formulation as
it exists on the date of termination and the Device; and (2) any product outside
the Field. Such royalty shall be royalty-free in the Field and royalty-bearing
(as determined in accordance with the provisions set forth in Section 5.03(a))
outside the Field. Novo Nordisk shall in good faith specify in writing to
Aradigm promptly following termination the patent claims that describe such
Insulin Compound formulation to enable Aradigm to practice its rights under the
foregoing license, as further described below; provided that, if Aradigm
notifies Novo Nordisk in writing of any additional claims that Aradigm believes
are necessary to practice such license, then the Parties shall meet and discuss
in good faith whether to specify such additional claims. For the avoidance of
doubt, Aradigm’s license with respect to the Insulin Compound Packaged Product
under the Novo Nordisk Know-How and the know-how included within the Novo
Nordisk New IPR and the specific claims under the Novo Nordisk Patent Rights and
the patents included in the Novo Nordisk New IPR permit Aradigm to make only
(a) the exact formulation of the Insulin Compound as it exists at the time of
termination; (b) a formulation of such Insulin Compound with a lower (but not
higher) concentration of insulin, in each case falling within the concentration
ranges in the specified claims; (c) subject to (b) above, a formulation of such
Insulin Compound that increases or decreases the range of excipients or other
non-Insulin Compound components included within such existing formulation,
provided such excipients or other non-Insulin Compound components remain within
a range of two (2) times the quality specification for such component; and/or
(d) a formulation of such Insulin Compound to which excipients or other
components may be added or deleted provided such additional excipients or other
compounds do not infringe any intellectual property rights of Novo Nordisk or
any of its Affiliates, other than such intellectual property rights licensed to
Aradigm under this Section 10.05(d). Additionally, Aradigm shall retain its
licenses under Sections 3.03(b) and (c), which licenses shall be expanded to
include the ability to develop, manufacture, use, market, distribute, sell,
offer for sale, have made, import and/or export any product inside the Field
(provided, however, that the license in Section 3.03(c) shall be non-exclusive
inside the Field). In the event that Aradigm terminates this Agreement prior to
the first Regulatory Submission of the Insulin Compound Packaged Product and the
Device, Novo Nordisk shall supply insulin to Aradigm in accordance with the
provisions set forth in Section 10.05(f).
     (e) In the event that either Party terminates this Agreement in accordance
with the provisions set forth herein, other than in accordance with the

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provisions set forth in Section 10.02(b) or Section 10.04 as and to the extent
requested in writing by Aradigm, Novo Nordisk will cooperate with Aradigm to
transfer the technology and any related development or production equipment (as
specified by Aradigm) back to Aradigm, and Aradigm will pay Novo Nordisk:
(i) for its transfer activities (on terms and conditions substantially similar
to those set forth in the Transition Services Agreement and the Restructuring
Agreement); and (ii) the replacement value for any custom-made equipment and the
fair market value for any equipment that is not custom-made to Novo Nordisk for
any such equipment; provided that, Novo Nordisk shall be entitled to payment of
fair market value for any custom-made equipment in respect of which Novo Nordisk
does not provide Aradigm with reasonably satisfactory evidence of its intention
to replace such equipment. Additionally, Aradigm shall be entitled to use the
data generated under the Development Program to work with a third party and
shall have reasonable access to the relevant sections of applicable regulatory
filings by any member of the Novo Nordisk Affiliate Group; provided that, it is
expressly understood that neither Aradigm nor any marketing partner of Aradigm
shall have access to any Regulatory Approval in respect of Novo Nordisk bulk
insulin or Novo Nordisk Know-How, production process details or other
information relating to the production of bulk insulin by Novo Nordisk or any of
its Affiliates.
     (f) In the event that either Party terminates this Agreement in accordance
with the provisions set forth herein, other than in accordance with the
provisions set forth in Section 10.02(b) or Section 10.04 and if, and only if,
such termination occurs prior to First Marketing of the Insulin Compound
Packaged Product and the Device, Novo Nordisk shall supply insulin [****] to
Aradigm until the earliest of (i) notice to Novo Nordisk by Aradigm that it no
longer needs such supply, (ii) the first Regulatory Submission for the Insulin
Compound Packaged Product and the Device in the United States or the European
Union and (iii) the tenth (10th) anniversary of the date of termination of this
Agreement.
     (g) In the event that either Party terminates this Agreement in accordance
with the provisions set forth herein, Aradigm agrees that it will not use,
directly or indirectly, any Novo Nordisk Know-How or other confidential
information received from Novo Nordisk pursuant to this Agreement, and Novo
Nordisk agrees that it will not use, directly or indirectly, any Aradigm
Know-How or other confidential information received from Aradigm pursuant to
this Agreement, in either case other than as expressly provided herein.
     (h) Upon termination of this Agreement, Aradigm undertakes to return, upon
Novo Nordisk’s written request, all written documentation embodying Novo Nordisk
Know-How and any and all remaining Program Compound to Novo Nordisk, except and
to the extent retention thereof is reasonably necessary during any post
termination period in which Novo Nordisk continues to supply insulin to Aradigm.
In the event that Aradigm terminates this Agreement in accordance with the
provisions set forth in Section 10.03, Novo Nordisk shall return, upon Aradigm’s
written request, all written documentation embodying Aradigm Know- How to
Aradigm.
 
**** Certain confidential information in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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     Section 10.06. Additional Effects of Termination or Expiration. Termination
or expiration of this Agreement shall not affect the continuing validity and
enforceability of Sections 5.02, 5.03, 5.04, 5.05, 5.06, 5.07, 6.01, 6.02, 6.06,
Articles 7, 8, 9, 10, 11 and 12 and the applicable definitions in Article 1 of
this Agreement. All confidential information provided under the Agreement shall
be returned to the respective Parties within ninety (90) days of the termination
date, except as otherwise contemplated by this Agreement and except as to
confidential information required by the Parties to exercise their respective
rights under this Agreement.
ARTICLE 11
Dispute Resolution and Governing Law
     Section 11.01. Dispute Resolution. (a) All disputes arising out of this
Agreement shall be settled as far as possible by negotiations between the
Parties. If the Parties cannot agree on an amicable settlement within thirty
(30) days from written submission of the matter by one Party to the other Party,
the matter shall be submitted for decision and final resolution to arbitration
to the exclusion of any courts of law, under the Arbitration Rules of the
American Arbitration Association.
     (b) The arbitration tribunal shall be composed of three disinterested
arbitrators, appointed pursuant to the following procedure: the Party invoking
arbitration shall notify the other Party stating the substance of its claim and
the name and address of the arbitrator it has chosen, who may be a citizen of
any country. Within thirty (30) days of receipt of such notification, the other
Party shall notify the first party of its answer to the claim made, any
counterclaim that it wishes to assert in the arbitration, and the name and
address of its arbitrator, who may be a citizen of any country. If this is not
done within the 30-day period, appointment of the second arbitrator shall be
made in accordance with the Arbitration Rules of the American Arbitration
Association upon request of the initiating Party.
     (c) The arbitrators shall choose a third arbitrator, who shall serve as
president of the tribunal thus composed. If the arbitrators fail to agree upon
the choice of a third arbitrator within thirty (30) days from the appointment of
the second arbitrator, the third arbitrator will be appointed in accordance with
the Arbitration Rules of the American Arbitration Association upon the request
of the arbitrators or either of the Parties.
     (d) The arbitrators shall decide the dispute by majority decision and in
accordance with the laws of the State of New York. The decision shall be
rendered in writing, shall state the reasons on which it is based, and shall
bear the signatures of at least two arbitrators. It shall also identify the
members of the arbitration tribunal, and the time and place of the award
granted. Finally, it shall determine the expenses of the arbitration and the
Party who shall be charged

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therewith or the allocation of the expenses between the Parties at the
discretion of the tribunal.
     (e) The arbitration decision shall be rendered as soon as possible, not
later, however, if possible, than six months after the constitution of the
arbitration tribunal. The arbitration decision shall be final and binding upon
both Parties and the Parties agree that any award granted pursuant to such
decision may be entered forthwith in any court of competent jurisdiction. This
arbitration clause and any award granted pursuant to an arbitration decision
thereunder shall be enforceable against the Parties in accordance with the 1958
Convention on the Recognition and Enforcement of Foreign Arbitral Awards, as
amended.
     (f) The seat of arbitration shall be New York City, unless the Parties
otherwise agree in writing. The official arbitration language shall be English.
     Section 11.02. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of New York.
ARTICLE 12
Miscellaneous
     Section 12.01. Bankruptcy Code Considerations. (a) The Parties agree that
this Agreement is an “executory contract” (involving continuing executory
obligations of Aradigm to provide licenses of the Aradigm Patent Rights, the
Aradigm New IPR and the Aradigm Know-How, Novo Nordisk to provide licenses of
the Transferred Patents, Transferred Selected Pulmonary Delivery Patents, Novo
Nordisk Patent Rights, Novo Nordisk New IPR and the Novo Nordisk Know-How, and
continuing executory obligations to pay royalties hereunder), under which
Aradigm and Novo Nordisk, as the case may be, is a “licensor of a right to
intellectual property,” and that this Agreement is governed under 11 U.S.C. §
365(n) of the United States Bankruptcy Code (“Bankruptcy Code”).
     (b) The Parties further agree that the Aradigm Patent Rights, the Aradigm
New IPR and the Aradigm Know-How, the Transferred Patents, Transferred Selected
Pulmonary Delivery Patents, Novo Nordisk Patent Rights, Novo Nordisk New IPR and
the Novo Nordisk Know-How collectively constitute the “intellectual property”
(as such term is defined in Section 11 U.S.C. § 101(35A) of the Bankruptcy Code)
being licensed hereunder. If a Party as debtor in possession or a trustee of
bankruptcy for a Party in a case under the Bankruptcy Code, rejects this
Agreement, the other Party may elect to retain its rights under this Agreement
as provided for in 11 U.S.C. § 365(n). In addition, if a Party as debtor in
possession or a trustee of bankruptcy for a Party in a case under the Bankruptcy
Code chooses to assign this Agreement to any Person as may be permitted under
the Bankruptcy Code, such Party or such trustee shall only assign this Agreement
to an assignee that, in conformity with Section 11

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U.S.C. § 365(f) of the Bankruptcy Code, affirmatively agrees to assume all of
such Party’s obligations under this Agreement, and that provides adequate
assurance of future performance.
     Section 12.02. Binding Agreement. This Agreement shall not be binding upon
the Parties until it has been signed herein below by or on behalf of each Party,
in which event it shall be effective as of the date hereof.
     Section 12.03. Severability. If any provision in any Article of this
Agreement is found by competent authority to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of such other Article in every other respect and the remainder of
this Agreement shall continue in effect so long as the Agreement still expresses
the intent of the Parties. However, if the intent of the Parties cannot be
preserved, this Agreement shall be either renegotiated or terminated.
     Section 12.04. Amendments and Waivers. (a) Any provision of this Agreement
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed, in the case of an amendment, by each Party to this Agreement, or
in the case of a waiver, by the Party against whom the waiver is to be
effective.
     (b) No failure or delay by any Party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
     Section 12.05. Expenses. Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement shall be paid by the Party
incurring such cost or expense.
     Section 12.06. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the Parties hereto and their
respective successors and assigns; provided that, no Party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other Party hereto, except pursuant to the
provisions of Articles 3 and 10.
     Section 12.07. Counterparts; Third Party Beneficiaries. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each Party hereto shall
have received a counterpart hereof signed by the other Party hereto. No
provision of this Agreement is intended to confer upon any person other than the
Parties hereto any rights or remedies hereunder.

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     Section 12.08. Entire Agreement. This Agreement, the other Transaction
Agreements, the Patent Assignment and the Loan and Security Agreement constitute
the entire agreement between the Parties with respect to the subject matter of
this Agreement and supersede all prior agreements and understandings, both oral
and written, between the Parties with respect to the subject matter of this
Agreement.
[SIGNATURE PAGE FOLLOWS]

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                  ARADIGM CORPORATION    
 
           
 
  By:        
 
           
 
      Name:    
 
      Title:    
 
                NOVO NORDISK A/S    
 
           
 
  By:        
 
           
 
      Name:    
 
      Title:    

 

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Appendix A
Transferred Patents

         
 
  Terminal    
Patent
  Disclaimer   Patents/Applications
No./Application
  Filed As of   Related by Terminal
Serial No.
  June 30, 2006   Disclaimer
 
       

[****]

         
Patent No./
      Corresponding or Related
Serial No.
  Foreign Filed   Patents/Applications Filed
 
       

[****]
 
**** Certain confidential information in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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Appendix B
Transferred Selected Pulmonary Delivery Patents
Patent No.
[****]
 
**** Certain confidential information in this document, marked by brackets, has
been omitted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended