EX-4.3




 Exhibit 4.3 

FACE OF PIK NOTE 
 [Legend
for Grifols & First Eagle Notes:] 
 [THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE ACQUIRER: 
 (1) AGREES FOR THE BENEFIT OF ARADIGM CORPORATION (THE “COMPANY”) THAT IT WILL
NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT: 
 (A)    TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, OR 
 (B)    PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE
SECURITIES ACT, OR 
 (C)    PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. 
 PRIOR TO THE REGISTRATION OF ANY TRANSFER IN
ACCORDANCE WITH CLAUSE (1)(C) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS
BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. 

NO AFFILIATE (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT OF THE COMPANY OR PERSON THAT HAS BEEN AN AFFILIATE (AS DEFINED IN RULE 144
UNDER THE SECURITIES ACT) OF THE COMPANY DURING THE THREE IMMEDIATELY PRECEDING MONTHS MAY OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR A BENEFICIAL INTEREST HEREIN UNLESS PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE
UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IN A TRANSACTION THAT RESULTS IN SUCH SECURITY OR COMMON STOCK, AS THE CASE MAY BE, NO LONGER BEING A “RESTRICTED SECURITY” (AS
DEFINED IN RULE 144 UNDER THE SECURITIES ACT).] 











 [Legend for Laurence Lytton Notes:] 

[THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER: 

(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS AN “ACCREDITED INVESTOR” (WITHIN THE MEANING OF REGULATION D UNDER
THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND 
 (2) AGREES FOR THE BENEFIT OF
ARADIGM CORPORATION (THE “COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE
HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT: 

(A)    TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR 

(B)    PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR 

(C)    PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. 
 PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE
(2)(C) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE
WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.] 











 Aradigm Corporation 

9.0% Convertible Senior Note due 2021 
  

			
	 No. [●]
	 	$[●]

 CUSIP No. [038505 AB9]1[ 038505 AA1]2[038505 AC7]3 
 Aradigm Corporation,
a corporation duly organized and validly existing under the laws of the State of California (the “Company,” which term includes any successor corporation or other entity under the Indenture referred to on the reverse hereof), for value
received hereby promises to pay to [21 APRIL FUND, LTD.][FIRST EAGLE VALUE IN BIOTECHNOLOGY MASTER FUND, LTD.][21 APRIL FUND, LP][GRIFOLS WORLDWIDE OPERATIONS LIMITED][LAURENCE LYTTON], or registered assigns, the principal sum of
$[    ], which amount, taken together with the principal amounts of all other outstanding Notes, shall not, unless permitted by the Indenture, exceed $[___]), in accordance with the rules and procedures of the Depositary, on
May 1, 2021, and interest thereon as set forth below. 
 This Note shall bear interest at the rate of 9.0% per year from May 1,
2018 or from the most recent date to which interest has been paid or provided for to, but excluding, the next scheduled Interest Payment Date until May 1, 2021, unless earlier repurchased, redeemed or converted pursuant to and in accordance
with the provisions of the Indenture. Accrued interest on this Note shall be computed on the basis of a 360-day year composed of twelve 30-day months and, for partial
months, on the basis of actual days elapsed over a 30-day month. Interest is payable semi-annually in arrears on each May 1 and November 1, commencing on November 1, 2018, to Holders of record
at the close of business on the preceding April 15 and October 15 (whether or not such day is a Business Day), respectively. Additional Interest will be payable as set forth in Section 4.06(d), Section 4.06(e) and
Section 6.03 of the within-mentioned Indenture, and any reference to interest on, or in respect of, any Note therein shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to
any of such Section 4.06(d), Section 4.06(e) or Section 6.03, and any express mention of the payment of Additional Interest in any provision therein shall not be construed as excluding Additional Interest in those provisions thereof
where such express mention is not made. 
 Any Defaulted Amounts shall accrue interest per annum at the rate borne by the Notes plus
one percent, subject to the enforceability thereof under applicable law, from, and including, the relevant payment date to, but excluding, the date on which such Defaulted Amounts shall have been paid by the Company, at its election, in
accordance with Section 2.03(c) of the Indenture. 
 As provided in and subject to the provisions of the Indenture, the Company shall
pay the principal of any Notes (other than Notes that are Global Notes) at the office or agency designated by the Company for that purpose. The Company has initially designated the Trustee as its Paying Agent and Note Registrar in respect of the
Notes and its agency in the Borough of Manhattan, The City of New York, as a place where Notes may be presented for payment or for registration of transfer and exchange. 

 

	1 	 Include for First Eagle entities Physical Notes. 



	2 	 Include for Laurence Lytton Physical Notes. 



	3 	 Include for Grifols Physical Notes. 













 Reference is made to the further provisions of this Note set forth on the reverse hereof,
including, without limitation, provisions giving the Holder of this Note the right to convert this Note into shares of Common Stock on the terms and subject to the limitations set forth in the Indenture. Such further provisions shall for all
purposes have the same effect as though fully set forth at this place. 
 This Note, and any claim, controversy or dispute arising under
or related to this Note, shall be construed in accordance with and governed by the laws of the State of New York (without regard to the conflicts of laws provisions thereof other than Section 5-1401 of
the General Obligations Law). 
 In the case of any conflict between this Note and the Indenture, the provisions of the Indenture shall
control and govern. 
 This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon
shall have been manually signed by the Trustee or a duly authorized authenticating agent under the Indenture. 
 [Remainder of page
intentionally left blank] 











 IN WITNESS WHEREOF, the Company has caused this Note to be duly executed. 

 

			
	ARADIGM CORPORATION
		
	By:	 	 
	Name:	 	John M. Siebert
	Title:	 	Executive Chairman, Interim Principal Executive Officer and Acting Principal Financial Officer


 Dated: November 1, 2018 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION 
  

			
	 U.S. BANK NATIONAL ASSOCIATION,
 as
Trustee



			
		
	By:	 	 
	Name:	 	
	Title:	 	

 [Signature Page to PIK Note – [NAME OF HOLDER]] 











 REVERSE OF NOTE 

Aradigm Corporation 
 9.0%
Convertible Senior Note due 2021 
 This Note is one of a duly authorized issue of Notes of the Company, designated as its 9.0% Convertible
Senior Notes due 2021 (the “Notes”), initially limited to the aggregate principal amount of $23,000,000 (as increased by an amount equal to the aggregate principal amount of any additional Notes purchased by Purchasers requiring the
effectiveness of a Registration Statement prior to the issuance of Notes to such Purchasers) all issued or to be issued under and pursuant to an Indenture dated as of April 25, 2016 (the “Indenture”), between the Company and
U.S. BANK NATIONAL ASSOCIATION (the “Trustee”), as supplemented by the Indenture, dated as of April 18, 2018, to which the Indenture and all indentures supplemental thereto reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Notes. Additional Notes may be issued in an unlimited aggregate principal amount, subject to certain conditions specified
in the Indenture. Capitalized terms used in this Note and not defined in this Note shall have the respective meanings set forth in the Indenture. 

In case certain Events of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of, and interest on, all
Notes may be declared, by either the Trustee or Holders of at least 25% in aggregate principal amount of Notes then outstanding, and upon said declaration shall become, due and payable, in the manner, with the effect and subject to the conditions
and certain exceptions set forth in the Indenture. 
 Subject to the terms and conditions of the Indenture, the Company will make all
payments and deliveries in respect of the Redemption Price on the Redemption Date and the principal amount on the Maturity Date, as the case may be, to the Holder who surrenders a Note to a Paying Agent to collect such payments in respect of the
Note. The Company will pay cash amounts in money of the United States that at the time of payment is legal tender for payment of public and private debts. 

The Indenture contains provisions permitting the Company and the Trustee in certain circumstances, without the consent of the Holders of the
Notes, and in certain other circumstances, with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes at the time outstanding, evidenced as in the Indenture provided, to execute supplemental indentures
modifying the terms of the Indenture and the Notes as described therein. It is also provided in the Indenture that, subject to certain exceptions, the Holders of a majority in aggregate principal amount of the Notes at the time outstanding may on
behalf of the Holders of all of the Notes waive any past Default or Event of Default under the Indenture and its consequences. 
 No
reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay or deliver, as the case may be, the principal (including the
Redemption Price, if applicable) of, accrued and unpaid interest on, and the consideration due upon conversion of, this Note at the place, at the respective times, at the rate and in the lawful money herein prescribed. 

The Notes are issuable in registered form without coupons in denominations of $1,000 principal amount and integral multiples thereof. At the
office or agency of the Company referred to on the face hereof, and in the manner and subject to the limitations provided in the Indenture, 











 
Notes may be exchanged for a like aggregate principal amount of Notes of other authorized denominations, without payment of any service charge but, if required by the Company or Trustee, with
payment of a sum sufficient to cover any transfer or similar tax that may be imposed in connection therewith as a result of the name of the Holder of the new Notes issued upon such exchange of Notes being different from the name of the Holder of the
old Notes surrendered for such exchange. 
 The Company may redeem all or any portion of the Notes, at the Company’s option, if the
Last Reported Sale Price of the Common Stock for at least 20 Trading Days (whether or not consecutive) during the 30 consecutive Trading Day period ending within five Trading Days prior to the Redemption Notice Date is greater than or equal to 200%
of the Conversion Price on each applicable Trading Day. No sinking fund is provided for the Notes. 
 Subject to the provisions of the
Indenture, the Holder hereof has the right, at its option, prior to the close of business on the second Business Day immediately preceding the Maturity Date, to convert any Notes or portion thereof that is $1,000 or an integral multiple thereof,
into shares of Common Stock at the Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture; provided that unless and until the Company obtains Shareholder Approval, the number of shares of Common
Stock a Holder shall receive upon conversion of its Notes (i) will be subject to a Conversion Share Cap and (ii) the Company shall pay cash in lieu of any shares that would otherwise be deliverable in excess of the Conversion Share Cap.

 Terms used in this Note and defined in the Indenture are used herein as therein defined. 











 ABBREVIATIONS 

The following abbreviations, when used in the inscription of the face of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations: 
 TEN COM = as tenants in common 

UNIF GIFT MIN ACT = Uniform Gifts to Minors Act 
 CUST =
Custodian 
 TEN ENT = as tenants by the entireties 
 JT TEN =
joint tenants with right of survivorship and not as tenants in common 
 Additional abbreviations may also be used though not in the above
list. 











 ATTACHMENT 1 

FORM OF NOTICE OF CONVERSION 
 To: Aradigm
Corporation 
 To: U.S. BANK NATIONAL ASSOCIATION, 60 Livingston Avenue,
EP-MN-WS3C, St. Paul, Minnesota 55107-2292, Attention: Corporate Trust Administrator – Aradigm Corp. 

The undersigned registered owner of this Note hereby exercises the option to convert this Note, or the portion hereof (that is $1,000
principal amount or an integral multiple thereof) below designated, into shares of Common Stock in accordance with the terms of the Indenture referred to in this Note, and directs that the shares of Common Stock issuable and deliverable upon such
conversion, together with any cash for any fractional share, and any Notes representing any unconverted principal amount hereof, be issued and delivered to the registered Holder hereof unless a different name has been indicated below. If any shares
of Common Stock or any portion of this Note not converted are to be issued in the name of a Person other than the undersigned, the undersigned will pay all documentary, stamp or similar issue or transfer taxes, if any in accordance with
Section 14.02(d) and Section 14.02(e) of the Indenture. Any amount required to be paid to the undersigned on account of interest accompanies this Note. Capitalized terms used herein but not defined shall have the meanings ascribed to such
terms in the Indenture. 
 The undersigned hereby represents and warrants that the undersigned has full power and authority to execute this
document and take all action in connection with this Note required hereby. 
 The undersigned hereby agrees to indemnify and hold harmless
U.S. Bank National Association, its successors and assigns, from and against all costs, expenses and liabilities of any nature in the event the undersigned is not the beneficial owner of the foregoing bonds as represented above. 

 

							
				
	 Dated:
	 	 	 	     
	 	 
				
		 		 		 	 
		 		 		 	 Signature(s)


  

			
	 	  	
	 Signature Guarantee
	  	
		
	 Signature(s) must be guaranteed
 by an eligible
Guarantor Institution
 (banks, stock brokers, savings and
 loan
associations and credit unions)
 with membership in an approved

signature guarantee medallion program
 pursuant to Securities and
Exchange
 Commission Rule 17Ad-15 if shares
 of Common Stock
are to be issued, or
 Notes are to be delivered, other than

to and in the name of the registered holder.
	  	













			
		
	 Fill in for registration of shares if
 to be
issued, and Notes if to
 be delivered, other than to and in the

name of the registered holder:
	  	
		
	 	  	
	 (Name)
	  	
		
	 	  	
	 (Street Address)
	  	
		
	 	  	
	 (City, State and Zip Code)
	  	
	 Please print name and address
	  	
		  	Principal amount to be converted (if less than all): $______,000
		
		  	 NOTICE: The above signature(s) of the Holder(s) hereof must correspond

with the name as written upon the face of the Note in every particular

without alteration or enlargement or any change whatever.

		
		  	                                      
              
		  	 Social Security or Other Taxpayer

Identification Number













 ATTACHMENT 2 

[INTENTIONALLY OMITTED] 











 ATTACHMENT 3 

FORM OF ASSIGNMENT AND TRANSFER 
 U.S. BANK
NATIONAL ASSOCIATION 
 as Trustee and Registrar 
 60 Livingston
Avenue 
 EP-MN-WS3C 

St. Paul, Minnesota 55107-2292 
 Attention: Corporate Trust
Administrator – Aradigm Corp. 
 For value received ____________________________ hereby sell(s), assign(s) and transfer(s) unto _________________
(Please insert social security or Taxpayer Identification Number of assignee) the within Note, and hereby irrevocably constitutes and appoints _____________________ attorney to transfer the said Note on the books of the Company, with full power of
substitution in the premises. 
 The undersigned confirms that such Note is being transferred: 

☐To Aradigm Corporation or a subsidiary thereof; or 

☐Pursuant to a registration statement that has become or been declared effective under the Securities Act of 1933, as amended; 

☐Pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or 

☐Pursuant to a registration statement under the Securities Act of 1933, as amended, or any other available exemption from the registration requirements
of the Securities Act of 1933, as amended. 
 The undersigned hereby represents and warrants that the undersigned has full power and authority to execute
this document and take all action in connection with this Note required hereby. 
 The undersigned hereby agrees to indemnify and hold harmless U.S. Bank
National Association, its successors and assigns, from and against all costs, expenses and liabilities of any nature in the event the undersigned is not the beneficial owner of the foregoing bonds as represented above. 

 

			
	Dated:	 	 


			
	
	 
	
	 
	Signature(s)
	
	 
	Signature Guarantee
	
	Signature(s) must be guaranteed by an
eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and
credit unions) with membership in an approved
signature guarantee medallion
program pursuant
to Securities and Exchange Commission
Rule 17Ad-15 if Notes are to be delivered, other
than to and in the name of the registered holder.

 NOTICE: The signature on the assignment must correspond with the name as written upon the face of the Note in
every particular without alteration or enlargement or any change whatever.