<PAGE>   1
                                                                     Exhibit 4.3

                                                                  Execution Copy




                               ARADIGM CORPORATION

                          SECURITIES PURCHASE AGREEMENT

                                 AUGUST 21, 2001





<PAGE>   2

                                  TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                PAGE
                                                                                ----
<S>            <C>                                                              <C>
ARTICLE 1      AUTHORIZATION AND SALE OF COMMON STOCK AND WARRANTS................1

        1.1    Authorization......................................................1

        1.2    Sale of Common Stock and Warrants..................................1

ARTICLE 2      CLOSING DATE; DELIVERY.............................................1

        2.1    Closing Date.......................................................1

        2.2    Delivery...........................................................2

ARTICLE 3      REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................2

        3.1    Organization and Standing..........................................2

        3.2    Corporate Power; Authorization.....................................2

        3.3    Issuance and Delivery of the Shares................................2

        3.4    SEC Documents; Financial Statements................................3

        3.5    Governmental Consents..............................................3

        3.6    No Material Adverse Change.........................................3

        3.7    Authorized Capital Stock...........................................3

        3.8    Litigation.........................................................4

ARTICLE 4      REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS........4

        4.1    Authorization......................................................4

        4.2    Investment Experience..............................................4

        4.3    Investment Intent..................................................4

        4.4    Registration or Exemption Requirements.............................5

        4.5    Dispositions.......................................................5

        4.6    No Legal, Tax or Investment Advice.................................5

        4.7    Confidentiality....................................................5

        4.8    Residency..........................................................5

        4.9    Governmental Review................................................5

        4.10   Legend.............................................................5

        4.11   Foreign Investors..................................................6

ARTICLE 5      CONDITIONS TO CLOSING OBLIGATIONS OF PURCHASERS....................6

        5.1    Representations and Warranties.....................................6

        5.2    Covenants..........................................................6
</TABLE>



                                       i.
<PAGE>   3

                                TABLE OF CONTENTS
                                   (CONTINUED)
<TABLE>
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<S>            <C>                                                              <C>
        5.3    Certificates.......................................................7

        5.4    Legal Opinion......................................................7

ARTICLE 6      CONDITIONS TO CLOSING OBLIGATIONS OF COMPANY.......................7

        6.1    Receipt of Payment.................................................7

        6.2    Representations and Warranties.....................................7

        6.3    Covenants..........................................................7

        6.4    Blue Sky...........................................................7

        6.5    Delivery of Purchaser Questionnaire................................7

ARTICLE 7      COVENANTS OF THE COMPANY...........................................7

        7.1    Definitions........................................................7

        7.2    Registration Procedures and Expenses...............................8

        7.3    Delay in Effectiveness.............................................9

        7.4    Indemnification....................................................9

        7.5    Prospectus Delivery...............................................11

        7.6    Termination of Obligations........................................11

        7.7    Reporting Requirements............................................11

        7.8    No Draw Downs.....................................................12

ARTICLE 8      RESTRICTIONS ON TRANSFERABILITY OF SECURITIES; COMPLIANCE WITH
               SECURITIES ACT....................................................12

        8.1    Restrictions on Transferability...................................12

        8.2    Instruction Sheet.................................................12

        8.3    Transfer of Securities After Registration.........................12

        8.4    Purchaser Information.............................................12

ARTICLE 9      MISCELLANEOUS.....................................................12

        9.1    Waivers and Amendments............................................12

        9.2    Broker's Fee......................................................12

        9.3    Governing Law.....................................................13

        9.4    Survival..........................................................13

        9.5    Successors and Assigns............................................13

        9.6    Entire Agreement..................................................13
</TABLE>



                                       ii.
<PAGE>   4

                                TABLE OF CONTENTS
                                   (CONTINUED)
<TABLE>
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<S>            <C>                                                              <C>
        9.7    Notices, etc......................................................13

        9.8    Severability of this Agreement....................................13

        9.9    Counterparts......................................................13

        9.10   Further Assurances................................................13

        9.11   Expenses..........................................................14

        9.12   Currency..........................................................14

        9.13   Waiver of Conflicts...............................................14

Exhibit A - Schedule of Purchasers
Exhibit B - Form of Warrant
Exhibit C - Form of Purchaser's Questionnaire
Exhibit D - Form of Company Counsel Opinion
Exhibit E - Instruction Sheet
Exhibit F - Form of Purchaser's Certificate of Subsequent Sale
</TABLE>


                                      iii.
<PAGE>   5

                               ARADIGM CORPORATION

                          SECURITIES PURCHASE AGREEMENT

      THIS SECURITIES PURCHASE AGREEMENT (this "AGREEMENT") is made as of August
21, 2001, by and among ARADIGM CORPORATION, a California corporation (the
"COMPANY") with its principal office at 3929 Point Eden Way, Hayward, California
94545, and the persons listed on the Schedule of Purchasers attached hereto as
EXHIBIT A (the "PURCHASERS").

                                    ARTICLE 1

               AUTHORIZATION AND SALE OF COMMON STOCK AND WARRANTS

      1.1   AUTHORIZATION. The Company has authorized the sale and issuance of
up to 3,639,314 shares of its Common Stock (the "COMMON SHARES") and warrants,
in the form attached hereto as EXHIBIT B (the "WARRANTS"), to purchase up to
363,927 shares of its Common Stock pursuant to this Agreement.

      1.2   SALE OF COMMON STOCK AND WARRANTS. Subject to the terms and
conditions of this Agreement, the Company agrees to issue and sell to each
Purchaser and each Purchaser severally agrees to purchase from the Company:

            (a)   Common Shares in the amount and at the purchase price set
forth opposite each Purchaser's name on EXHIBIT A; and

            (b)   Warrants to purchase a number of shares of the Company's
Common Stock equal to ten percent (10%) of the Common Shares issued to such
Purchaser on the Closing Date (defined below) rounded down to the nearest whole
number of shares, at an exercise price equal to $5.41 per share of Common Stock.
The shares of Common Stock issuable upon exercise of or otherwise pursuant to
the Warrants are referred to herein as the "WARRANT SHARES". The Common Shares
and Warrant Shares are collectively referred to herein as the "SHARES". The
Shares and the Warrants are collectively referred to herein as the "SECURITIES".

                                    ARTICLE 2

                             CLOSING DATE; DELIVERY

      2.1   CLOSING DATE. The closing of the purchase and sale of the Common
Shares and Warrants hereunder (the "CLOSING") shall be held at the offices of
Cooley Godward LLP, One Maritime Plaza, 20th Floor, San Francisco, California
94111, at 10:00 a.m. California time on August 21, 2001 or at such other time
and place upon which the Company and the Purchasers purchasing the majority of
the Common Shares shall agree. The date of the Closing is hereinafter referred
to as the "CLOSING DATE".



                                       1.
<PAGE>   6

      2.2   DELIVERY. At the Closing, the Company will deliver to each Purchaser
a duly executed Warrant and a certificate representing the number of Common
Shares to be purchased by such Purchaser, registered in the Purchaser's name as
shown on EXHIBIT A. Such delivery shall be against payment of the purchase price
therefor by wire transfer of immediately available funds to the Company in
accordance with the Company's written wiring instructions in the amounts set
forth on EXHIBIT A.

                                    ARTICLE 3

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

      The Company represents and warrants to the Purchasers as of the Closing
Date as follows:

      3.1   ORGANIZATION AND STANDING. The Company is a corporation duly
organized and validly existing under, and by virtue of, the laws of the State of
California and is in good standing as a domestic corporation under the laws of
said state.

      3.2   CORPORATE POWER; AUTHORIZATION. The Company has all requisite legal
and corporate power and has taken all requisite corporate action to execute and
deliver this Agreement, to sell and issue the Common Shares and Warrants, to
issue the Warrant Shares upon exercise of the Warrants in accordance with the
terms of such Warrants and to carry out and perform all of its obligations under
this Agreement. This Agreement constitutes, and upon execution and delivery by
the Company of the Warrants, the Warrants will constitute, legal, valid and
binding obligations of the Company, enforceable in accordance with their
respective terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the enforcement of
creditors' rights generally and (ii) as limited by equitable principles
generally. The execution and delivery of this Agreement does not, and the
performance of this Agreement and the compliance with the provisions hereof and
the issuance, sale and delivery of the Common Shares and the Warrants by the
Company will not materially conflict with, or result in a material breach or
violation of the terms, conditions or provisions of, or constitute a material
default under, or result in the creation or imposition of any material lien
pursuant to the terms of, the Articles of Incorporation or Bylaws of the Company
or any statute, law, rule or regulation or any state or federal order, judgment
or decree or any indenture, mortgage, lease or other material agreement or
instrument to which the Company or any of its properties is subject.

      3.3   ISSUANCE AND DELIVERY OF THE SHARES. The Common Shares, when issued
in compliance with the provisions of this Agreement, will be validly issued,
fully paid and non-assessable. Upon exercise of the Warrants in accordance with
the terms thereof, the Warrant Shares will be validly issued, fully paid and
non-assessable. The issuance and delivery of the Common Shares and the Warrants
is not subject to preemptive or any other similar rights of the shareholders of
the Company or any liens or encumbrances, except for rights created in
connection with the Common Stock Purchase Agreement, dated as of November 3,
2000 (the "Acqua Purchase Agreement"), by and between the Company and Acqua
Wellington North American Equities Fund, Ltd. ("Acqua").



                                       2.
<PAGE>   7

      3.4   SEC DOCUMENTS; FINANCIAL STATEMENTS. Each report or proxy statement
delivered to the Purchasers is a true and complete copy of such document as
filed by the Company with the Securities and Exchange Commission (the "SEC").
The Company has filed in a timely manner all documents that the Company was
required to file with the SEC under Sections 13, 14(a) and 15(d) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), during the
twelve (12) months preceding the date of this Agreement. As of their respective
filing dates, all documents filed by the Company with the SEC (the "SEC
DOCUMENTS") complied in all material respects with the requirements of the
Exchange Act or the Securities Act of 1933, as amended (the "SECURITIES ACT"),
as applicable. None of the SEC Documents as of their respective dates contained
any untrue statement of material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Documents (the
"FINANCIAL STATEMENTS") comply as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto. The Financial Statements have been prepared in
accordance with generally accepted accounting principles consistently applied
and fairly present the consolidated financial position of the Company and any
subsidiaries at the dates thereof and the consolidated results of their
operations and consolidated cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal, recurring adjustments or to the
extent that such unaudited statements do not include footnotes).

      3.5   GOVERNMENTAL CONSENTS. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal, state, or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated by
this Agreement except for (a) compliance with the securities and blue sky laws
in the states in which Common Shares and Warrants are offered and/or sold, which
compliance will be effected in accordance with such laws, (b) the filing of Form
S-3 and all amendments thereto with the SEC as contemplated by Section 7.2 of
this Agreement and (c) the filing of the Nasdaq National Market Notification
Form with the Nasdaq National Market.

      3.6   NO MATERIAL ADVERSE CHANGE. Except as otherwise disclosed herein or
in the SEC Documents, since December 31, 2000, there have not been any changes
in the assets, liabilities, financial condition, business prospects or
operations of the Company from that reflected in the Financial Statements except
changes in the ordinary course of business which have not been, either
individually or in the aggregate, materially adverse.

      3.7   AUTHORIZED CAPITAL STOCK. The authorized capital stock of the
Company consists of (i) 40,000,000 shares of Common Stock, no par value, of
which, as of August 31, 2001, 20,026,252 shares were outstanding, and (ii)
5,000,000 shares of Preferred Stock, no par value, none of which shares is
currently outstanding.

      3.8   LITIGATION. Except as disclosed in the SEC Documents, there are no
actions, suits proceedings or investigations pending or, to the best of the
Company's knowledge, threatened against the Company or any of its properties
before or by any court or arbitrator or any governmental body, agency or
official in which there is a reasonable likelihood (in the judgment of the
Company) of an adverse decision that (a) could have a material adverse effect on
the



                                       3.
<PAGE>   8

Company's properties or assets or the business of the Company as currently
conducted or (b) could impair the ability of the Company to perform in any
material respect its obligations under this Agreement.

                                    ARTICLE 4

           REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS

      Each Purchaser hereby severally represents and warrants to the Company,
effective as of the Closing Date, as follows:

      4.1   AUTHORIZATION. Purchaser represents and warrants to the Company
that: (i) Purchaser has all requisite legal and corporate or other power and
capacity and has taken all requisite corporate or other action to execute and
deliver this Agreement, to purchase the Common Shares and the Warrant to be
purchased by it and to carry out and perform all of its obligations under this
Agreement; and (ii) this Agreement constitutes the legal, valid and binding
obligation of such Purchaser, enforceable in accordance with its terms, except
(a) as limited by applicable bankruptcy, insolvency, reorganization, or similar
laws relating to or affecting the enforcement of creditors' rights generally and
(b) as limited by equitable principles generally.

      4.2   INVESTMENT EXPERIENCE. Purchaser is an "accredited investor" as
defined in Rule 501(a) under the Securities Act. Purchaser is aware of the
Company's business affairs and financial condition and has had access to and has
acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Common Shares and the Warrant. Purchaser
has such business and financial experience as is required to give it the
capacity to protect its own interests in connection with the purchase of the
Common Shares and Warrant.

      4.3   INVESTMENT INTENT. Purchaser is purchasing the Common Shares and the
Warrant for its own account as principal, for investment purposes only, and not
with a present view to, or for, resale, distribution or fractionalization
thereof, in whole or in part, within the meaning of the Securities Act, other
than as contemplated by Article 7. Purchaser understands that its acquisition of
the Common Shares and the Warrant has not been registered under the Securities
Act or registered or qualified under any state securities law in reliance on
specific exemptions therefrom, which exemptions may depend upon, among other
things, the bona fide nature of Purchaser's investment intent as expressed
herein. Purchaser has completed or caused to be completed the Purchaser
Questionnaire attached hereto as EXHIBIT C for use in preparation of the
Registration Statement (as defined below), and the responses provided therein
shall be true and correct as of the Closing Date and will be true and correct as
of the effective date of the Registration Statement. Purchaser has, in
connection with its decision to purchase the Common Shares and the Warrant,
relied solely upon the SEC Documents and the representations and warranties of
the Company contained herein. Purchaser will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the Securities except
in compliance with the Securities Act, and the rules and regulations promulgated
thereunder.



                                       4.
<PAGE>   9

      4.4   REGISTRATION OR EXEMPTION REQUIREMENTS. Purchaser further
acknowledges and understands that the Securities may not be resold or otherwise
transferred except in a transaction registered under the Securities Act or
unless an exemption from such registration is available.

      4.5   DISPOSITIONS. Purchaser will not, prior to the effectiveness of the
Registration Statement, if then prohibited by law or regulation, sell, offer to
sell, solicit offers to buy, dispose of, loan, pledge or grant any right with
respect to (collectively, a "DISPOSITION"), the Shares or Warrant Shares, nor
will such Purchaser engage in any hedging or other transaction which is designed
or could reasonably be expected to lead to or result in a Disposition of Shares
or Warrant Shares by such Purchaser or any person or entity. In addition, the
Purchaser agrees that for so long as it owns any Shares or Warrant Shares, it
will not enter into any Short Sales. For such purposes, a "Short Sale" by the
Purchaser means a short sale of Common Stock executed at a time when the
Purchaser has no equivalent offsetting long position in the Common Stock. For
purposes of determining whether the Purchaser has an equivalent offsetting long
position in the Common Stock, shares that the Purchaser is entitled to receive
within sixty (60) days (whether pursuant to contract or upon conversion or
exercise of convertible securities) will be included as if held long by the
Purchaser.

      4.6   NO LEGAL, TAX OR INVESTMENT ADVICE. Such Purchaser understands that
nothing in this Agreement or any other materials presented to Purchaser in
connection with the purchase and sale of the Common Shares and the Warrants
constitutes legal, tax or investment advice. Such Purchaser has consulted such
legal, tax and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of the Common Shares
and the Warrant.

      4.7   CONFIDENTIALITY. Such Purchaser will hold in confidence all
information concerning this Agreement and the placement of the Securities
hereunder until the earlier of such time as (i) the Company has made a public
announcement concerning the Agreement and the placement of the Securities
hereunder or (ii) this Agreement is terminated; provided, however, that the
foregoing provision of this Section 4.7 shall not apply if the Company does not
issue a press release concerning the Agreement and the placement of the
Securities hereunder within two (2) days of the Closing.

      4.8   RESIDENCY. Such Purchaser's principal executive officers are in the
jurisdiction set forth immediately below such Purchaser's name of the signature
pages hereto.

      4.9   GOVERNMENTAL REVIEW. Such Purchaser understands that no United
States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Shares or the
Warrants.

      4.10  LEGEND. Purchaser understands that, until such time as the
Registration Statement (as defined below) has been declared effective or the
Shares may be sold pursuant to Rule 144 under the Securities Act without any
restriction as to the number of securities as of a particular date that can then
be immediately sold, the Shares may bear a restrictive legend in substantially
the following form (and a stop transfer order may be placed against transfer of
the certificates for the Shares):



                                       5.
<PAGE>   10

                  "THE SECURITIES REPRESENTED BY THIS CERTIFICATE
            HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
            1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF
            THE UNITED STATES OR IN ANY OTHER JURISDICTION. THE
            SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD
            OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
            REGISTRATION STATEMENT FOR THE SECURITIES UNDER
            APPLICABLE SECURITIES LAWS UNLESS OFFERED, SOLD OR
            TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
            REGISTRATION REQUIREMENTS OF THOSE LAWS."

      4.11  FOREIGN INVESTORS. If Purchaser is not a United States person (as
defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as
amended), Purchaser hereby represents that it has satisfied itself as to the
full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Common Shares and the Warrants or any use of
this Agreement, including (i) the legal requirements within its jurisdiction for
the purchase of the Common Shares and the Warrants, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any government or other consents
that may need to be obtained, and (iv) the income tax and other tax
consequences, if any, that may be relevant to the purchase, holding, redemption,
sale or transfer of the Securities. Purchaser's subscription and payment for and
continued beneficial ownership of the Securities will not violate any applicable
securities or other laws of Purchaser's jurisdiction.

                                    ARTICLE 5

                 CONDITIONS TO CLOSING OBLIGATIONS OF PURCHASERS

      Each Purchaser's obligation to purchase the Common Shares and the Warrants
at the Closing is, at the option of such Purchaser, subject to the fulfillment
or waiver as of the Closing Date of the following conditions:

      5.1   REPRESENTATIONS AND WARRANTIES. The representations made by the
Company in Article 3 hereof shall be true and correct in all material respects
when made, and shall be true and correct in all material respects on the Closing
Date with the same force and effect as if they had been made on and as of such
date.

      5.2   COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to the Closing Date
shall have been performed or complied with in all material respects.

      5.3   CERTIFICATES. The Company shall have delivered to the Purchasers
duly executed certificates for the Common Shares and Warrants (in such
denominations as set forth opposite each Purchaser's name on EXHIBIT A).



                                       6.
<PAGE>   11

      5.4   LEGAL OPINION. The Purchasers shall have received on the Closing
Date an opinion of Cooley Godward LLP, counsel for the Company, dated the
Closing Date, to the effect set forth in EXHIBIT D.

                                    ARTICLE 6

                  CONDITIONS TO CLOSING OBLIGATIONS OF COMPANY

      The Company's obligation to sell and issue the Common Shares and the
Warrants at the Closing is, at the option of the Company, subject to the
fulfillment or waiver of the following conditions:

      6.1   RECEIPT OF PAYMENT. The Purchasers shall have delivered payment of
the purchase price to the Company for the Common Shares and the Warrants being
issued hereunder.

      6.2   REPRESENTATIONS AND WARRANTIES. The representations made by the
Purchasers in Article 4 hereof shall be true and correct in all material
respects when made, and shall be true and correct in all material respects on
the Closing Date with the same force and effect as if they had been made on and
as of such date.

      6.3   COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by the Purchasers on or prior to the Closing Date
shall have been performed or complied with in all material respects.

      6.4   BLUE SKY. The Company shall have obtained and maintained all
necessary blue sky law permits and qualifications, or secured exemptions
therefrom, required by any state for the offer and sale of the Securities.

      6.5   DELIVERY OF PURCHASER QUESTIONNAIRE. The Company shall have received
from each Purchaser a fully completed Purchaser Questionnaire in the form
attached hereto as EXHIBIT C prior to the Closing for the Company's use in
preparing the Registration Statement pursuant to Article 7 below.

                                    ARTICLE 7

                            COVENANTS OF THE COMPANY

      7.1   DEFINITIONS. For the purpose of this Article 7:

            (a)   the term "REGISTRATION STATEMENT" shall mean any registration
statement required to be filed by Section 7.2 below, and shall include any
preliminary prospectus, final prospectus, exhibit or amendment included in or
relating to such registration statement; and

            (b)   the term "UNTRUE STATEMENT" shall include any untrue statement
or alleged untrue statement, or any omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and



                                       7.
<PAGE>   12

            (c)   the term "REGISTRABLE SHARES" shall mean the shares of Common
Stock issued pursuant to this Agreement and the Warrant Shares.

      7.2   REGISTRATION PROCEDURES AND EXPENSES. The Company shall:

            (a)   use its best efforts to file a Registration Statement with the
SEC within thirty (30) days following the Closing Date to register the
Registrable Shares on Form S-3 under the Securities Act (providing for shelf
registration of the Registrable Shares under SEC Rule 415) or on such other form
which is appropriate to register all of the Registrable Shares for resale from
time to time by the Purchasers;

            (b)   use its best efforts, subject to receipt of necessary
information from the Purchasers, to cause such Registration Statement to become
effective as promptly after filing as practicable but in any event by the date
(the "EFFECTIVENESS DEADLINE DATE") that is thirty (30) days following the date
of the initial filing of the Registration Statement with the SEC; provided,
however, that in the event that the Registration Statement or any documents
incorporated therein by reference are reviewed by the SEC, then the
Effectiveness Deadline Date shall mean the date that is one hundred twenty (120)
days following the Closing Date;

            (c)   prepare and file with the SEC such amendments and supplements
to such Registration Statement and the prospectus used in connection therewith
as may be necessary to keep such Registration Statement effective until
termination of such obligation as provided in Section 7.6 below, subject to the
Company's right to suspend pursuant to Section 7.5;

            (d)   furnish to each Purchaser (and to each underwriter, if any, of
such Registrable Shares) such number of copies of prospectuses in conformity
with the requirements of the Securities Act and such other documents as the
Purchasers may reasonably request, in order to facilitate the public sale or
other disposition of all or any of the Registrable Shares by the Purchasers;

            (e)   file such documents as may be required of the Company for
normal securities law clearance for the resale of the Registrable Shares in such
states of the United States as may be reasonably requested by each Purchaser;
provided, however, that the Company shall not be required in connection with
this paragraph (e) to qualify as a foreign corporation or execute a general
consent to service of process in any jurisdiction;

            (f)   advise each Purchaser promptly:

                  (i)   of any request by the SEC for amendments to the
Registration Statement or amendments to the prospectus or for additional
information relating thereto;

                  (ii)  of the issuance by the SEC of any stop order suspending
the effectiveness of the Registration Statement under the Securities Act or of
the suspension by any state securities commission of the qualification of the
Registrable Shares for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes; and

                  (iii) of the existence of any fact and the happening of any
event that makes any statement of a material fact made in the Registration
Statement, the prospectus and



                                       8.
<PAGE>   13

amendment or supplement thereto, or any document incorporated by reference
therein, untrue, or that requires the making of any additions to or changes in
the Registration Statement or the prospectus in order to make the statements
therein not misleading;

            (g)   use its best efforts to cause all Registrable Shares to be
listed on each securities exchange, if any, on which equity securities by the
Company are then listed; and

            (h)   bear all expenses in connection with the procedures in
paragraphs (a) through (g) of this Section 7.2 and the registration of the
Registrable Shares on such Registration Statement and the satisfaction of the
blue sky laws of such states.

      7.3   DELAY IN EFFECTIVENESS. If the Registration Statement is not
declared effective by the SEC on or prior to the Effectiveness Deadline Date,
then for each thirty (30) day period following the Effectiveness Deadline Date,
until but excluding the date the Registration Statement is declared effective,
the Company shall, for such period, pay each Purchaser, as liquidated damages
and not as a penalty, an amount equal to one percent (1%) of the purchase price
of the Common Shares purchased by such Purchaser hereunder, for such period (or
prorated for any partial period); and for any such period, such payment shall be
made no later than the first business day of the calendar month next succeeding
the last month in which such period occurs. The parties hereto agree that the
liquidated damages provided for in this Section 7.2 constitute a reasonable
estimate of the damages that may be incurred by the Purchasers by reason of the
failure of the Registration Statement to be declared effective in accordance
with the provisions hereof.

      7.4   INDEMNIFICATION.

            (a)   The Company agrees to indemnify and hold harmless each
Purchaser from and against any losses, claims, damages or liabilities to which
such Purchaser may become subject (under the Securities Act or otherwise)
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case on the effective date thereof, or arise out
of any failure by the Company to fulfill any undertaking included in the
Registration Statement and the Company will, as incurred, reimburse such
Purchaser for any legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim; provided,
however, that the Company shall not be liable in any such case to the extent
that such loss, claim, damage or liability arises out of, or is based upon, an
untrue statement or omission or alleged untrue statement or omission made in
such Registration Statement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Purchaser
specifically for use in preparation of the Registration Statement or any breach
of this Agreement by Purchaser.

            (b)   Each Purchaser, severally and not jointly, agrees to indemnify
and hold harmless the Company (and each person, if any, who controls the Company
within the meaning of Section 5 of the Securities Act or Section 20 of the
Exchange Act, each officer of the Company who signs the Registration Statement
and each director of the Company), from and



                                       9.
<PAGE>   14

against any losses, claims, damages or liabilities to which the Company (or any
such officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, any breach of this Agreement by such Purchaser or any untrue
statement of a material fact contained in the Registration Statement or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in
each case, on the effective date thereof, if, and to the extent, such untrue
statement was made in reliance upon and in conformity with written information
furnished by or on behalf of such Purchaser specifically for use in preparation
of the Registration Statement, and such Purchaser will reimburse the Company
(and each of its officers, directors or controlling persons) for any legal or
other expenses reasonably incurred in investigating, defending or preparing to
defend any such action, proceeding or claim.

            (c)   Promptly after receipt by any indemnified person of a notice
of a claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 7.4, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and such indemnifying shall have been notified thereof, such
indemnifying person shall be entitled to participate therein, and, to the extent
that it shall wish, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified person. After notice from the indemnifying
person to such indemnified person of its election to assume the defense thereof,
such indemnifying person shall not be liable to such indemnified person for any
legal expenses subsequently incurred by such indemnified person in connection
with the defense thereof; provided, however, that if there exists or shall exist
a conflict of interest that would make it inappropriate in the reasonable
judgment of the indemnified person for the same counsel to represent both the
indemnified person and such indemnifying person or any affiliate or associate
thereof, the indemnified person shall be entitled to retain its own counsel at
the expense of such indemnifying person; provided, further, that no indemnifying
person shall be responsible for the fees and expense of more than one separate
counsel for all indemnified parties. The indemnifying party shall not settle an
action without the consent of the indemnified party, which consent shall not be
unreasonably withheld.

            (d)   If after proper notice of a claim or the commencement of any
action against the indemnified party, the indemnifying party does not choose to
participate, then the indemnified party shall assume the defense thereof and
upon written notice by the indemnified party requesting advance payment of a
stated amount for its reasonable defense costs and expenses, the indemnifying
party shall advance payment for such reasonable defense costs and expenses (the
"Advance Indemnification Payment") to the indemnified party. In the event that
the indemnified party's actual defense costs and expenses exceed the amount of
the Advance Indemnification Payment, then upon written request by the
indemnified party, the indemnifying party shall reimburse the indemnified party
for such difference; in the event that the Advance Indemnification Payment
exceeds the indemnified party's actual costs and expenses, the indemnified party
shall promptly remit payment of such difference to the indemnifying party.

            (e)   If the indemnification provided for in this Section 7.4 is
required by its terms, but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless



                                      10.
<PAGE>   15

an indemnified party in respect of any losses, claims, damages or liabilities
referred to above, then the indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities.

      7.5   PROSPECTUS DELIVERY. Each Purchaser hereby covenants with the
Company not to make any sale of the Shares without effectively causing the
prospectus delivery requirement under the Securities Act to be satisfied. The
Purchaser acknowledges that there may be times when the Company must suspend the
use of the prospectus forming a part of the Registration Statement until such
time as an amendment to the Registration Statement has been filed by the Company
and declared effective by the SEC, or until such time as the Company has filed
an appropriate report with the SEC pursuant to the Exchange Act. The Purchaser
hereby covenants that it will not sell any Securities pursuant to said
prospectus during the period commencing at the time at which the Company gives
the Purchaser notice of the suspension of the use of said prospectus and ending
at the time the Company gives the Purchaser notice that the Purchaser may
thereafter effect sales pursuant to said prospectus. Such suspension periods
shall in no event exceed sixty (60) days in any twelve (12) month period.

      7.6   TERMINATION OF OBLIGATIONS. The obligations of the Company pursuant
to Section 7.2 hereof shall cease and terminate upon the earlier to occur of (i)
such time as all of the Registrable Shares have been resold, (ii) such time as
all of the Registrable Shares may be resold in a three-month period pursuant to
Rule 144, or (iii) the third anniversary of the Closing Date.

      7.7   REPORTING REQUIREMENTS.

            (a)   With a view to making available the benefits of certain rules
and regulations of the SEC that may at any time permit the sale of the
Securities to the public without registration or pursuant to a registration
statement on Form S-3, the Company agrees to use its best efforts to:

                  (i)   make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act;

                  (ii)  file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and

                  (iii) so long as any of the Purchasers own Registrable Shares,
to furnish to such Purchaser forthwith upon request (1) a written statement by
the Company as to whether it is in compliance with the reporting requirements of
said Rule 144, the Securities Act and the Exchange Act, or whether it is
qualified as a registrant whose securities may be resold pursuant to SEC Form
S-3, and (2) a copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company.

      7.8   NO DRAW DOWNS. The Company agrees that, if the Acqua Purchase
Agreement has not been terminated as of the Closing, the Company will not
exercise its right under the Acqua Purchase Agreement to request the purchase of
shares of the Company's Common Stock by Acqua.



                                      11.
<PAGE>   16

                                    ARTICLE 8

                 RESTRICTIONS ON TRANSFERABILITY OF SECURITIES;
                         COMPLIANCE WITH SECURITIES ACT

      8.1   RESTRICTIONS ON TRANSFERABILITY. The Securities shall not be
transferable in the absence of a registration under the Securities Act or an
exemption therefrom or in the absence of compliance with any term of this
Agreement. The Company shall be entitled to give stop transfer instructions to
its transfer agent with respect to the Securities in order to enforce the
foregoing restrictions.

      8.2   INSTRUCTION SHEET. Each certificate representing Shares shall bear
the Instruction Sheet attached hereto as EXHIBIT E (in addition to any legends
required under applicable securities laws).

      8.3   TRANSFER OF SECURITIES AFTER REGISTRATION. Each Purchaser hereby
covenants with the Company not to make any sale of the Securities except either
(i) in accordance with the Registration Statement, in which case Purchaser
covenants to comply with the requirement of delivering a current prospectus, or
(ii) in accordance with Rule 144, in which case Purchaser covenants to comply
with Rule 144. Purchaser further acknowledges and agrees that such Securities
are not transferable on the books of the Company unless the certificate
submitted to the Company's transfer agent evidencing such Securities is
accompanied by a separate certificate executed by an officer of, or other person
duly authorized by, the Purchaser in the form attached hereto as EXHIBIT F.

      8.4   PURCHASER INFORMATION. Each Purchaser covenants that it will
promptly notify the Company of any changes in the information set forth in the
Registration Statement regarding such Purchaser or such Purchaser's "Plan of
Distribution."

                                    ARTICLE 9

                                  MISCELLANEOUS

      9.1   WAIVERS AND AMENDMENTS. With the exception of Article 7 hereof, the
terms of this Agreement may be waived or amended with the written consent of the
Company and each Purchaser. With respect to Article 7 hereof, with the written
consent of the Company and the record holders of more than fifty percent (50%)
of the Shares then outstanding and held by Purchasers, the terms of this
Agreement may be waived or amended and any such amendment or waiver shall be
binding upon the Company and all holders of Shares.

      9.2   BROKER'S FEE. Each Purchaser acknowledges that the Company intends
to pay a fee in respect of the sale of the Securities to SG Cowen (the
"PLACEMENT AGENT"). Each of the parties hereto hereby represents that, on the
basis of any actions and agreements by it, there are no other brokers or finders
entitled to compensation in connection with the sale of Securities to the
Purchasers.



                                      12.
<PAGE>   17

      9.3   GOVERNING LAW. This Agreement shall be governed in all respects by
and construed in accordance with the laws of the State of California without any
regard to conflicts of laws principles.

      9.4   SURVIVAL. The representations, warranties, covenants and agreements
made in this Agreement shall survive any investigation made by the Company or
the Purchasers and the Closing.

      9.5   SUCCESSORS AND ASSIGNS. The provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties to this Agreement. Notwithstanding the foregoing,
no Purchaser shall assign this Agreement without the prior written consent of
the Company.

      9.6   ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
thereof.

      9.7   NOTICES, ETC. All notices and other communications required or
permitted under this Agreement shall be in writing and may be delivered in
person, by telecopy, overnight delivery service or registered or certified
United States mail, addressed to the Company or the Purchasers, as the case may
be, at their respective addresses set forth at the beginning of this Agreement
or on EXHIBIT A, or at such other address as the Company or the Purchasers shall
have furnished to the other party in writing. All notices and other
communications shall be effective upon the earlier of actual receipt thereof by
the person to whom notice is directed or (i) in the case of notices and
communications sent by personal delivery or telecopy, one business day after
such notice or communication arrives at the applicable address or was
successfully sent to the applicable telecopy number, (ii) in the case of notices
and communications sent by overnight delivery service, at noon (local time) on
the second business day following the day such notice or communication was sent,
and (iii) in the case of notices and communications sent by United States mail,
seven days after such notice or communication shall have been deposited in the
United States mail.

      9.8   SEVERABILITY OF THIS AGREEMENT. If any provision of this Agreement
shall be judicially determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

      9.9   COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

      9.10  FURTHER ASSURANCES. Each party to this Agreement shall do and
perform or cause to be done and performed all such further acts and things and
shall execute and deliver all such other agreements, certificates, instruments
and documents as the other party hereto may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

      9.11  EXPENSES. The Company shall bear the expenses incurred on its behalf
with respect to this Agreement and the transactions contemplated hereby,
including fees of legal counsel. The Company agrees to reimburse the Purchasers
for the expenses reasonably incurred



                                      13.
<PAGE>   18

by them with respect to this Agreement and the transactions contemplated hereby,
including reasonable fees of legal counsel.

      9.12  CURRENCY. All references to "dollars" or "$" in this Agreement shall
be deemed to refer to United States dollars.

      9.13  WAIVER OF CONFLICTS. Each party to this Agreement acknowledges that
legal counsel for the Company, Cooley Godward LLP ("COOLEY GODWARD"), has in the
past and may continue in the future to perform legal services for one or more of
the Purchasers or their affiliates in matters unrelated to the transactions
contemplated by this Agreement, including, but not limited to, the
representation of the Purchasers in matters of a similar nature to the
transactions contemplated herein. Each party to this Agreement hereby (a)
acknowledges that they have had an opportunity to ask for and have obtained
information relevant to such representation, including disclosure of the
reasonably foreseeable adverse consequences of such representation; (b)
acknowledges that with respect to the transactions contemplated herein, Cooley
Godward has represented the Company and not any individual Purchaser or any
individual shareholder, director or employee of the Company; and (c) gives its
informed consent to Cooley Godward's representation of the Company in the
transactions contemplated by this Agreement and Cooley Godward's representation
of one or more of the Purchasers or their affiliates in matters unrelated to
such transactions.



                                      14.
<PAGE>   19

      The foregoing agreement is hereby executed as of the date first above
written.

                                          ARADIGM CORPORATION,
                                          a California corporation


                                          By: /s/ Richard P. Thompson
                                             ----------------------------------
                                          Name:   Richard P. Thompson

                                          Title:  President and Chief Executive
                                                  Officer



                 SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT


<PAGE>   20

                                          NEW ENTERPRISE ASSOCIATES 10, LIMITED
                                          PARTNERSHIP


                                          By: NEA Partners 10, L.P.


                                              Name: /s/ Robert T. Coneybeer
                                                   ----------------------------

                                              By:       Robert T. Coneybeer
                                                 ------------------------------

                                              Title:    General Partner
                                                    ---------------------------


                                          NEA VENTURES 2001, L.P.


                                          Name: /s/ Pamela J. Clark
                                               --------------------------------

                                          By:       Pamela J. Clark
                                             ----------------------------------

                                          Title:    General Partner
                                                -------------------------------


                                          THE INTERNATIONAL BIOTECHNOLOGY TRUST
                                          PLC


                                          Name: /s/ Kate Bingham
                                               --------------------------------

                                          By:       Kate Bingham
                                             ----------------------------------

                                          Title:    Signatory
                                                -------------------------------



                 SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT


<PAGE>   21

                                          STEELHEAD INVESTMENTS LTD.


                                          Name: /s/  Kevin O'Neal
                                               --------------------------------

                                          By:        Kevin O'Neal
                                             ----------------------------------

                                          Title:     Authorized Signatory
                                                -------------------------------


                                          VERTICAL INTERNATIONAL LIMITED


                                          Name: /s/ Kenneth L. Henderson
                                               --------------------------------

                                          By:       Kenneth L. Henderson
                                             ----------------------------------

                                          Title:    Attorney-in-Fact
                                                -------------------------------


                                          VERTICAL VENTURES, LLC


                                          Name: /s/  Vertical Ventures, LLC
                                               --------------------------------

                                          By:        Josh Silverman
                                             ----------------------------------

                                          Title:     Partner
                                                -------------------------------


                                          MANAGED RISK TRADING, L.P.


                                          Name: /s/  Gregory I. Porges
                                               --------------------------------

                                          By:        Gregory I. Porges
                                             ----------------------------------

                                          Title:     President of the General
                                                     Partner
                                                -------------------------------



                 SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT


<PAGE>   22

                                    EXHIBIT A

                             SCHEDULE OF PURCHASERS
<TABLE>
<CAPTION>

PURCHASER                           PURCHASE PRICE     COMMON SHARES     WARRANTS
<S>                                 <C>                <C>               <C>
New Enterprise Associates 10,           $9,958,340         2,489,585      248,958
Limited Partnership
1119 St. Paul Street
Baltimore, Maryland 21202
Tel: (410) 244-0115
Fax: (410) 752-7721
Attn: John Nehra

State or Country of Residence:
Maryland

NEA Ventures 2001, L.P.                    $39,992             9,998          999
1119 St. Paul Street
Baltimore, Maryland 21202
Tel: (410) 244-0115
Fax: (410) 752-7721
Attn: John Nehra

State or Country of Residence:
Maryland

The International Biotechnology         $2,000,000           500,000       50,000
Trust Plc
31 Gresham Street
London
EC2V 7QA
United Kingdom
Tel: 011-44-207-421-7053
Fax: 011-44-207-421-7077
Attn: Nick Coleman

State or Country of Residence:
United Kingdom

Steelhead Investments Ltd.              $1,036,120           259,030       25,903
P.O. Box 309, Ugland House
Georgetown, Grand Cayman
Cayman Islands

State or Country of Residence:
Cayman Islands
</TABLE>


                                      A-1.
<PAGE>   23
<TABLE>
<CAPTION>
<S>                                 <C>                <C>               <C>
Managed Risk Trading, L.P.                $304,812            76,203        7,620
120 Broadway
7th Floor Mail Center
New York, New York 10271
Tel: (212) 433-6151
Fax: (212) 433-6188
Attn: Greg Porges

State or Country of Residence:
New York

Vertical International Limited            $803,552           200,888       20,088
160 Central Park South, Ste. 3212
New York, New York 10019
Tel: (212) 974-3070
Fax: (212) 974-2365
Attn: Josh Silverman

State or Country of Residence:
New York

Vertical Ventures, LLC                    $414,448           103,612       10,361
160 Central Park South, Ste. 3212
New York, New York 10019
Tel: (212) 974-3070
Fax: (212) 974-2365
Attn: Josh Silverman

State or Country of Residence:
New York

TOTAL                                  $14,557,264         3,639,316      363,929
</TABLE>


                                      A-2.
<PAGE>   24

                                                                       EXHIBIT B
                                                          to Securities Purchase
                                                                       Agreement

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

                               ARADIGM CORPORATION

                        WARRANT TO PURCHASE COMMON STOCK

                                                                 AUGUST 21, 2001
                            VOID AFTER AUGUST 21,2005

      THIS CERTIFIES THAT, for value received, ___________________________, with
its principal office at __________________________, or assigns (the "Holder"),
is entitled to subscribe for and purchase at the Exercise Price (defined below)
from Aradigm Corporation, a California corporation, with its principal office at
3929 Point Eden Way Hayward, CA 94545 (the "Company") up to ____________________
(_____) shares of the Common Stock of the Company (the "Common Stock").

      1.    DEFINITIONS. As used herein, the following terms shall have the
following respective meanings:

            (a)   "Exercise Period" shall mean the period commencing with the
date hereof and ending four years from the date hereof, unless sooner terminated
as provided below.

            (b)   "Exercise Price" shall mean $5.41 per share(1), subject to
adjustment pursuant to Section 5 below.

            (c)   "Exercise Shares" shall mean the shares of the Company's
Common Stock issuable upon exercise of this Warrant.

      2.    EXERCISE OF WARRANT. The rights represented by this Warrant may be
exercised in whole or in part at any time during the Exercise Period, by
delivery of the following to the Company at its address set forth above (or at
such other address as it may designate by notice in writing to the Holder):

            (a)   An executed Notice of Exercise in the form attached hereto;

--------
(1)   Price will be 115% of the Closing Price under the Securities Purchase
Agreement, dated as of the date hereof (the "Securities Purchase Agreement"), by
and among the Company and the purchasers named therein.



                                       1.
<PAGE>   25

            (b)   Payment of the Exercise Price either (i) in cash or by check,
or (ii) by cancellation of indebtedness; and

            (c)   This Warrant.

      Upon the exercise of the rights represented by this Warrant, a certificate
or certificates for the Exercise Shares so purchased, registered in the name of
the Holder or persons affiliated with the Holder, if the Holder so designates,
shall be issued and delivered to the Holder within a reasonable time after the
rights represented by this Warrant shall have been so exercised.

      The person in whose name any certificate or certificates for Exercise
Shares are to be issued upon exercise of this Warrant shall be deemed to have
become the holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Exercise Price was made, irrespective of the date
of delivery of such certificate or certificates, except that, if the date of
such surrender and payment is a date when the stock transfer books of the
Company are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.

      2.1   NET EXERCISE. Notwithstanding any provisions herein to the contrary,
if the fair market value of one share of the Company's Common Stock is greater
than the Exercise Price (at the date of calculation as set forth below), in lieu
of exercising this Warrant by payment of cash, the Holder may elect to receive
shares equal to the value (as determined below) of this Warrant (or the portion
thereof being canceled) by surrender of this Warrant at the principal office of
the Company together with the properly endorsed Notice of Exercise in which
event the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:

                   X = Y (A-B)
                       -------
                          A

      Where X =  the number of shares of Common Stock to be issued to the Holder

            Y =  the number of shares of Common Stock purchasable under the
                 Warrant or, if only a portion of the Warrant is being
                 exercised, the portion of the Warrant being canceled (at the
                 date of such calculation)

            A =  the fair market value of one share of the Company's Common
                 Stock (at the date of such calculation)

            B =  Exercise Price (as adjusted to the date of such calculation)

      For purposes of the above calculation, the "fair market value" of one
share of Common Stock shall mean (i) the average of the closing sales prices for
the shares of Common Stock on the Nasdaq National Market or other trading market
where such security is listed or traded as reported by Bloomberg Financial
Markets (or a comparable reporting service of national reputation selected by
the Company and reasonably acceptable to the holders if Bloomberg Financial
Markets is not then reporting sales prices of such security) (collectively,
"Bloomberg") for the ten (10) consecutive trading days immediately preceding
such date, or (ii) if the Nasdaq



                                       2.
<PAGE>   26

National Market is not the principal trading market for the shares of Common
Stock, the average of the reported sales prices reported by Bloomberg on the
principal trading market for the Common Stock during the same period, or, if
there is no sales price for such period, the last sales price reported by
Bloomberg for such period, or (iii) if neither of the foregoing applies, the
last sales price of such security in the over-the-counter market on the pink
sheets or bulletin board for such security as reported by Bloomberg, or if no
sales price is so reported for such security, the last bid price of such
security as reported by Bloomberg, or (iv) if fair market value cannot be
calculated as of such date on any of the foregoing bases, the fair market value
shall be as determined by the Board of Directors of the Company in the exercise
of its good faith judgment.

      3.    COVENANTS OF THE COMPANY.

      3.1   COVENANTS AS TO EXERCISE SHARES. The Company covenants and agrees
that all Exercise Shares that may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be validly issued and
outstanding, fully paid and nonassessable, and free from all taxes, liens and
charges with respect to the issuance thereof. The Company further covenants and
agrees that the Company will at all times during the Exercise Period, have
authorized and reserved, free from preemptive rights, a sufficient number of
shares of its Common Stock to provide for the exercise of the rights represented
by this Warrant. If at any time during the Exercise Period the number of
authorized but unissued shares of Common Stock shall not be sufficient to permit
exercise of this Warrant, the Company will take such corporate action as may, in
the opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purposes.

      3.2   NO IMPAIRMENT. Except and to the extent as waived or consented to by
the Holder, the Company will not, by amendment of its Articles of Incorporation
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may be necessary or appropriate in order to protect
the exercise rights of the Holder against impairment.

      3.3   NOTICES OF RECORD DATE. In the event of any taking by the Company of
a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend which is the same as cash dividends paid in previous
quarters) or other distribution, the Company shall mail to the Holder, at least
ten (10) days prior to the date specified herein, a notice specifying the date
on which any such record is to be taken for the purpose of such dividend or
distribution.

      4.    REPRESENTATIONS OF HOLDER.

      4.1   ACQUISITION OF WARRANT FOR PERSONAL ACCOUNT. The Holder represents
and warrants that it is acquiring the Warrant solely for its account for
investment and not with a view to or for sale or distribution of said Warrant or
any part thereof. The Holder also represents that the entire legal and
beneficial interests of the Warrant and Exercise Shares the Holder is acquiring
is being acquired for, and will be held for, its account only.



                                       3.
<PAGE>   27

      4.2   SECURITIES ARE NOT REGISTERED.

            (a)   The Holder understands that the Warrant and the Exercise
Shares have not been registered under the Securities Act of 1933, as amended
(the "Act") on the basis that no distribution or public offering of the stock of
the Company is to be effected. The Holder realizes that the basis for the
exemption may not be present if, notwithstanding its representations, the Holder
has a present intention of acquiring the securities for a fixed or determinable
period in the future, selling (in connection with a distribution or otherwise),
granting any participation in, or otherwise distributing the securities. The
Holder has no such present intention.

            (b)   The Holder recognizes that the Warrant and the Exercise Shares
must be held indefinitely unless they are subsequently registered under the Act
or an exemption from such registration is available. The Holder recognizes that
the Company will register the Exercise Shares pursuant to the provisions of
Section 7 of the Securities Purchase Agreement.

            (c)   The Holder is aware that neither the Warrant nor the Exercise
Shares may be sold pursuant to Rule 144 adopted under the Act unless certain
conditions are met, including, among other things, the existence of a public
market for the shares, the availability of certain current public information
about the Company, the resale following the required holding period under Rule
144 and the number of shares being sold during any three month period not
exceeding specified limitations.

      4.3   DISPOSITION OF WARRANT AND EXERCISE SHARES.

            (a)   The Holder further agrees not to make any disposition of all
or any part of the Warrant or Exercise Shares in any event unless and until:

                  (i)   The Company shall have received a letter secured by the
Holder from the Securities and Exchange Commission stating that no action will
be recommended to the Commission with respect to the proposed disposition; or

                  (ii)  There is then in effect a registration statement under
the Act covering such proposed disposition and such disposition is made in
accordance with said registration statement; or

                  (iii) The Holder shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and if
reasonably requested by the Company, the Holder shall have furnished the Company
with an opinion of counsel, reasonably satisfactory to the Company, for the
Holder to the effect that such disposition will not require registration of such
Warrant or Exercise Shares under the Act or any applicable state securities
laws.

            (b)   The Holder understands and agrees that all certificates
evidencing the shares to be issued to the Holder may bear the following legend:

      "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
      OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED FOR
      SALE, PLEDGED OR HYPOTHECATED IN



                               4.
<PAGE>   28

      THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
      SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO
      THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."

      5.    ADJUSTMENT OF EXERCISE PRICE.

            (a)   In the event of changes in the outstanding Common Stock of the
Company by reason of stock dividends, split-ups, recapitalizations,
reclassifications, combinations or exchanges of shares, separations,
reorganizations, liquidations, or the like, the number and class of shares
available under the Warrant in the aggregate and the Exercise Price shall be
correspondingly adjusted to give the Holder of the Warrant, on exercise for the
same aggregate Exercise Price, the total number, class, and kind of shares as
the Holder would have owned had the Warrant been exercised prior to the event
and had the Holder continued to hold such shares until after the event requiring
adjustment. The form of this Warrant need not be changed because of any
adjustment in the number of Exercise Shares subject to this Warrant.

            (b)   If at any time or from time to time the holders of Common
Stock of the Company (or any shares of stock or other securities at the time
receivable upon the exercise of this Warrant) shall have received or become
entitled to receive, without payment therefor,

                  (i)   Common Stock or any shares of stock or other securities
which are at any time directly or indirectly convertible into or exchangeable
for Common Stock, or any rights or options to subscribe for, purchase or
otherwise acquire any of the foregoing by way of dividend or other distribution,

                  (ii)  any cash paid or payable otherwise than as a cash
dividend, or

                  (iii) Common Stock or additional stock or other securities or
property (including cash) by way of spinoff, split-up, reclassification,
combination of shares or similar corporate rearrangement (other than shares of
Common Stock pursuant to Section 5(a) above),

then and in each such case, the Holder hereof will, upon the exercise of this
Warrant, be entitled to receive, in addition to the number of shares of Common
Stock receivable thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property (including cash
in the cases referred to in clauses (ii) and (iii) above) which such Holder
would hold on the date of such exercise had he been the holder of record of such
Common Stock as of the date on which holders of Common Stock received or became
entitled to receive such shares or all other additional stock and other
securities and property.

      6.    FRACTIONAL SHARES. No fractional shares shall be issued upon the
exercise of this Warrant as a consequence of any adjustment pursuant hereto. All
Exercise Shares (including fractions) issuable upon exercise of this Warrant may
be aggregated for purposes of determining whether the exercise would result in
the issuance of any fractional share. If, after aggregation, the exercise would
result in the issuance of a fractional share, the Company shall, in lieu of
issuance of any fractional share, pay the Holder otherwise entitled to such
fraction a sum in cash



                                       5.
<PAGE>   29

equal to the product resulting from multiplying the then current fair market
value of an Exercise Share by such fraction.

      7.    NO SHAREHOLDER RIGHTS. This Warrant in and of itself shall not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company.

      8.    TRANSFER OF WARRANT. Subject to applicable laws and the restriction
on transfer set forth on the first page of this Warrant, this Warrant and all
rights hereunder are transferable, by the Holder in person or by duly authorized
attorney, upon delivery of this Warrant and the form of assignment attached
hereto to any transferee designated by Holder. The transferee shall sign an
investment letter in form and substance satisfactory to the Company.

      9.    LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is
lost, stolen, mutilated or destroyed, the Company may, on such terms as to
indemnity or otherwise as it may reasonably impose (which shall, in the case of
a mutilated Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed.
Any such new Warrant shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant shall be at any time enforceable by anyone.

      10.   NOTICES, ETC. All notices required or permitted hereunder shall be
in writing and shall be deemed effectively given: (a) upon personal delivery to
the party to be notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day, (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one (1) day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the Company
at the address listed on the signature page and to Holder at ___________________
or at such other address as the Company or Holder may designate by ten (10) days
advance written notice to the other parties hereto.

      11.   ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to all of the terms and conditions contained herein.

      12.   GOVERNING LAW. This Warrant and all rights, obligations and
liabilities hereunder shall be governed by the laws of the State of California.



                                       6.
<PAGE>   30

      IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its duly authorized officer as of August 21, 2001.


                                          ARADIGM CORPORATION


                                          By:__________________________________

                                          Name:________________________________

                                          Title:_______________________________

                                          Address:_____________________________



                                       7.
<PAGE>   31

                               NOTICE OF EXERCISE

TO:  ARADIGM CORPORATION

      (1)   [ ]   The undersigned hereby elects to purchase ________ shares of
the Common Stock of ARADIGM CORPORATION (the "Company") pursuant to the terms of
the attached Warrant, and tenders herewith payment of the exercise price in
full, together with all applicable transfer taxes, if any.

            [ ]   The undersigned hereby elects to purchase ________ shares of
Common Stock of the Company pursuant to the terms of the net exercise provisions
set forth in Section 2.1 of the attached Warrant, and shall tender payment of
all applicable transfer taxes, if any.

      (2)   Please issue a certificate or certificates representing said shares
of Common Stock of the Company in the name of the undersigned or in such other
name as is specified below:

                     ______________________________________
                                     (Name)

                     ______________________________________

                     ______________________________________
                                    (Address)

      (3)   The undersigned represents that (i) the aforesaid shares of Common
Stock are being acquired for the account of the undersigned for investment and
not with a view to, or for resale in connection with, the distribution thereof
and that the undersigned has no present intention of distributing or reselling
such shares, other than as contemplated by Article 7 of the Securities Purchase
Agreement dated as of August 21, 2001 by and among the Company and the
purchasers named therein; (ii) the undersigned is aware of the Company's
business affairs and financial condition and has acquired sufficient information
about the Company to reach an informed and knowledgeable decision regarding its
investment in the Company; (iii) the undersigned is experienced in making
investments of this type and has such knowledge and background in financial and
business matters that the undersigned is capable of evaluating the merits and
risks of this investment and protecting the undersigned's own interests; (iv)
the undersigned understands that the shares of Common Stock issuable upon
exercise of this Warrant have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), by reason of a specific exemption from
the registration provisions of the Securities Act, which exemption depends upon,
among other things, the bona fide nature of the investment intent as expressed
herein, and, because such securities have not been registered under the
Securities Act, they must be held indefinitely unless subsequently registered
under the Securities Act or an exemption from such registration is available;
(v) the undersigned is aware that the aforesaid shares of Common Stock may not
be sold pursuant to Rule 144 adopted under the Securities Act unless certain
conditions are met and until the undersigned has held the shares for the number
of years prescribed by Rule 144, that among the conditions for use of the Rule
is the availability of current information to the public about the Company; and
(vi) the undersigned agrees not to make any disposition of all or any part of
the aforesaid shares of Common Stock unless and until there is then in effect a
registration statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with said registration



                                       1.
<PAGE>   32

statement, or the undersigned has provided the Company with an opinion of
counsel satisfactory to the Company, stating that such registration is not
required.


______________________________________    _____________________________________
(Date)                                    (Signature)

                                          _____________________________________
                                          (Print name)



                                       2.
<PAGE>   33

                                 ASSIGNMENT FORM

            (To assign the foregoing Warrant, execute this form and
            supply required information. Do not use this form to
            purchase shares.)


      FOR VALUE RECEIVED, the foregoing Warrant and all rights
evidenced thereby are hereby assigned to

Name:__________________________________________________________________________
                                 (Please Print)

Address:_______________________________________________________________________
                                 (Please Print)

Dated:  __________, 20__

Holder's
Signature:____________________________

Holder's
Address:______________________________



NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatever. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.



                                       3.
<PAGE>   34

                                    EXHIBIT C

                         INSTRUCTION SHEET FOR PURCHASER
                   (TO BE READ IN CONJUNCTION WITH THE ENTIRE
                         SECURITIES PURCHASE AGREEMENT)


A.    Complete the following items in the Securities Purchase Agreement:

      1.    Provide the information regarding the Purchaser requested on the
            signature page. The Agreement must be executed by an individual
            authorized to bind the Purchaser.

      2.    EXHIBIT C-1 - Stock Certificate Questionnaire:

            Provide the information requested by the Stock Certificate
            Questionnaire;

      3.    EXHIBIT C-2 - Registration Statement Questionnaire:

            Provide the information requested by the Registration Statement
            Questionnaire:

      4.    EXHIBIT C-3 - Purchaser Certificate:

            Provide the information requested by the Certificate for Individual
            Purchasers or the Certificate for Corporate, Partnership, Trust,
            Foundation and Joint Purchasers, as applicable.

      5.    Return the signed Securities Purchase Agreement to:

                      Cathlin Suh, Esq.
                      Cooley Godward LLP
                      One Maritime Plaza, 20th Floor
                      San Francisco, California 94111

B.    Instructions regarding the transfer of funds for the purchase of
      Securities will be telecopied to the Purchaser by the Placement Agent at a
      later date.

C.    Upon the resale of the Securities by the Purchaser after the Registration
      Statement covering the Securities is effective, as described in the
      Securities Purchase Agreement, the Purchaser:

      (i)   must deliver a current prospectus, and annual and quarterly reports
            of the Company to the buyer (prospectuses, and annual and quarterly
            reports may be obtained from the Company at the Purchaser's
            request); and

      (ii)  must send a letter in the form of Exhibit E to the Company so that
            the Securities may be properly transferred.



                                      C-1.
<PAGE>   35

                                   EXHIBIT C-1

                               ARADIGM CORPORATION
                         STOCK CERTIFICATE QUESTIONNAIRE


Pursuant to Section 4.3 of the Agreement, please provide us with the following
information:


1.    The exact name that the Securities
      are to be registered in (this is
      the name that will appear on the
      stock certificate(s)). You may use
      a nominee name if appropriate:      _____________________________________

2.    The relationship between the
      Purchaser of the Securities and
      the Registered Holder listed in
      response to item 1 above:           _____________________________________

3.    The mailing address of the
      Registered Holder listed in
      response to item 1 above:           _____________________________________

                                          _____________________________________

                                          _____________________________________

                                          _____________________________________

                                          _____________________________________

4.    The Tax Identification Number of
      the Registered Holder listed in
      response to item 1 above:           _____________________________________



                                     C-1-1.
<PAGE>   36

                                   EXHIBIT C-2

                               ARADIGM CORPORATION

                      REGISTRATION STATEMENT QUESTIONNAIRE


      In connection with the preparation of the Registration Statement, please
provide us with the following information regarding the Purchaser.

      1.    Please state your organization's name exactly as it should appear in
the Registration Statement: __________________________

      2.    Have you or your organization had any position, office or other
material relationship within the past three years with the Company or its
affiliates other than as disclosed in the Prospectus included in the
Registration Statement?

                                [ ] Yes   [ ] No

      If yes, please indicate the nature of any such relationships below:

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________



                                     C-2-1.
<PAGE>   37

                                   EXHIBIT C-3

                               ARADIGM CORPORATION
                      CERTIFICATE FOR INDIVIDUAL PURCHASERS


      If the investor is an individual Purchaser (or married couple) the
Purchaser must complete, date and sign this Certificate.

                                   CERTIFICATE

      I certify that the representations and responses below are true and
accurate:

      In order for the Company to offer and sell the Securities in conformance
with state and federal securities laws, the following information must be
obtained regarding your investor status. Please INITIAL EACH CATEGORY applicable
to you as an investor in the Company.

      _____ (1) A natural person whose net worth, either individually or jointly
with such person's spouse exceeds $1,000,000;

      _____ (2) A natural person who had an income in excess of $200,000, or
joint income with the person's spouse in excess of $300,000, in 1998, 1999 and
2000, and reasonably expects to have individual income reaching the same level
in 2001;

      _____ (3) An executive officer or director of the Company.

Date:_____________________________        _____________________________________
                                          Name(s) of Purchaser

                                          _____________________________________
                                          Signature

                                          _____________________________________
                                          Signature



                                     C-3-1.
<PAGE>   38

                                   EXHIBIT C-3

                               ARADIGM CORPORATION
                     CERTIFICATE FOR CORPORATE, PARTNERSHIP,
                     TRUST, FOUNDATION, AND JOINT PURCHASERS


      If the investor is a corporation, partnership, trust, pension plan,
foundation, joint purchaser (other than a married couple) or other entity, an
authorized officer, partner, or trustee must complete, date and sign this
Certificate.

                                   CERTIFICATE

      The undersigned certifies that the representations and responses below are
true and accurate:

      (a)   The investor has been duly formed and is validly existing and has
full power and authority to invest in the Company. The person signing on behalf
of the undersigned has the authority to execute and deliver the Securities
Purchase Agreement on behalf of the Purchaser and to take other actions with
respect thereto.

      (b)   Indicate the form of entity of the undersigned:

            [ ]   Limited Partnership

            [ ]   General Partnership

            [ ]   Corporation

            [ ]   Revocable Trust (identify each grantor and indicate under
                  what circumstances the trust is revocable by the grantor:
                  _____________________________________________________________
                  _____________________________________________________________
                  _____________________________________________________________
                  _____________________________________________________________
                      (Continue on a separate piece of paper, if necessary.)

            [ ]   Other Type of Trust (indicate type of trust and, for trusts
                  other than pension trusts, name the grantors and
                  beneficiaries:_______________________________________________
                  _____________________________________________________________
                  _____________________________________________________________
                  _____________________________________________________________
                      (Continue on a separate piece of paper, if necessary.)

            [ ]   Other form of organization (indicate form of organization
                  (___________).

      (c)   Indicate the approximate date the undersigned entity was formed:
            ___________________________________________________________________



                                     C-3-2.
<PAGE>   39

      (d)   In order for the Company to offer and sell the Securities in
conformance with state and federal securities laws, the following information
must be obtained regarding your investor status. Please INITIAL EACH CATEGORY
applicable to you as an investor in the Company.

            _______ (1) A bank as defined in Section 3(a)(2) of the Securities
      Act, or any savings and loan association or other institution as defined
      in Section 3(a)(5)(A) of the Securities Act whether acting in its
      individual or fiduciary capacity;

            _______ (2) A broker or dealer registered pursuant to Section 15 of
      the Securities Exchange Act of 1934;

            _______ (3) An insurance company as defined in Section 2(13) of the
      Securities Act;

            _______ (4) An investment company registered under the Investment
      Company Act of 1940 or a business development company as defined in
      Section 2(a)(48) of that Act;

            _______ (5) A Small Business Investment Company licensed by the U.S.
      Small Business Administration under Section 301(c) or (d) of the Small
      Business Investment Act of 1958;

            _______ (6) A plan established and maintained by a state, its
      political subdivisions, or any agency or instrumentality of a state or its
      political subdivisions, for the benefit of its employees, if such plan has
      total assets in excess of $5,000,000;

            _______ (7) An employee benefit plan within the meaning of the
      Employee Retirement Income Security Act of 1974, if the investment
      decision is made by a plan fiduciary, as defined in Section 3(21) of such
      act, which is either a bank, savings and loan association, insurance
      company, or registered investment adviser, or if the employee benefit plan
      has total assets in excess of $5,000,000 or, if a self-directed plan, with
      investment decisions made solely by persons that are accredited investors;

            _______ (8) A private business development company as defined in
      Section 202(a)(22) of the Investment Advisers Act of 1940;

            _______ (9) An organization described in Section 501(c)(3) of the
      Internal Revenue Code, a corporation, Massachusetts or similar business
      trust, or partnership, not formed for the specific purpose of acquiring
      the Securities, with total assets in excess of $5,000,000;

            _______ (10) A trust, with total assets in excess of $5,000,000, not
      formed for the specific purpose of acquiring the Securities, whose
      purchase is directed by a sophisticated person who has such knowledge and
      experience in financial and business matters that such person is capable
      of evaluating the merits and risks of investing in the Company;



                                     C-3-3.
<PAGE>   40

            _______ (11) An entity in which all of the equity owners qualify
      under any of the above subparagraphs. If the undersigned belongs to this
      investor category only, list the equity owners of the undersigned, and the
      investor category which each such equity owner satisfies:
      _________________________________________________________________________
      _________________________________________________________________________
      _________________________________________________________________________
      _________________________________________________________________________
      (Continue on a separate piece of paper, if necessary.)

Dated:________________________________

______________________________________
Name of investor

______________________________________
Signature and title of authorized
officer, partner or trustee



                                     C-3-4.
<PAGE>   41

                                    EXHIBIT D

                           OPINION OF COMPANY COUNSEL

<PAGE>   42

[COOLEY GODWARD LLP LETTERHEAD]


August 21, 2001

TO THE PURCHASERS LISTED
ON EXHIBIT A HERETO


Ladies and Gentlemen:

      We have acted as counsel for Aradigm Corporation, a California corporation
(the "Company"), in connection with the issuance and sale pursuant to the terms
of the Securities Purchase Agreement dated as of August 21, 2001 (the
"Agreement"), by and among the Company and the purchasers named therein (each, a
"Purchaser" and collectively, the "Purchasers"), of an aggregate of 3,639,316
shares of the Company's common stock (the "Common Shares") and warrants to
purchase an aggregate of up to 363,929 shares of the Company's common stock (the
"Warrants"). We are rendering this opinion pursuant to Section 5.4 of the
Agreement. Except as otherwise defined herein, capitalized terms used but not
defined herein have the respective meanings given to them in the Agreement.

      In connection with this opinion, we have examined and relied upon the
representations and warranties as to factual matters contained in and made
pursuant to the Agreement by the various parties and originals or copies
certified to our satisfaction, of such records, documents, certificates,
opinions, memoranda and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below. As to certain
factual matters, we have relied upon certificates of officers of the Company and
have not independently sought to verify such matters. Where we render an opinion
"to the best of our knowledge" or concerning an item "known to us" or our
opinion otherwise refers to our knowledge, it is based solely upon (i) an
inquiry of attorneys within this firm who perform legal services for the
Company, (ii) receipt of a certificate executed by an officer of the Company
covering such matters, and (iii) such other investigation, if any, that we
specifically set forth herein.

      In rendering this opinion, we have assumed: the genuineness and
authenticity of all signatures on original documents; the authenticity of all
documents submitted to us as originals; the conformity to originals of all
documents submitted to us as copies; the accuracy, completeness and authenticity
of certificates of public officials; and the due authorization, execution and
delivery of all documents (except the due authorization, execution and delivery
by the Company of the Agreement and the Warrants (collectively, the "Transaction
Documents")), where authorization, execution and delivery are prerequisites to
the effectiveness of such documents. We have also assumed: that all individuals
executing and delivering documents had the legal capacity to so execute and
deliver; that you have received all documents you were to receive under the
Transaction Documents; that the Transaction Documents are obligations binding
upon the parties thereto other than the Company; if you or any Purchasers are a


<PAGE>   43

[COOLEY GODWARD LLP LOGO]

To the Purchasers Listed
On Exhibit A Hereto
August 21, 2001
Page Three


corporation or other entity, that such entities have filed any required
California franchise or income tax returns and have paid any required California
franchise or income taxes; and that there are no extrinsic agreements or
understandings among the parties to the Transaction Documents that would modify
or interpret the terms of the Transaction Documents or the respective rights or
obligations of the parties thereunder.

      Our opinion is expressed only with respect to the federal laws of the
United States of America and the laws of the State of California. We express no
opinion as to whether the laws of any particular jurisdiction apply, and no
opinion to the extent that the laws of any jurisdiction other than those
identified above are applicable to the subject matter hereof. We are not
rendering any opinion as to compliance with any antifraud law, rule or
regulation relating to securities, or to the sale or issuance thereof.

      With regard to our opinion in paragraph 2 below with respect to the
Company's obligation to qualify to do business in various states, we have relied
solely on a certificate of an officer of the Company regarding the states in
which the Company owns or leases property or has employees or other
representatives with authority to bind it to contracts; we have made no further
investigation.

      On the basis of the foregoing, in reliance thereon and with the foregoing
qualifications, we are of the opinion that:

1.    The Company has been duly incorporated and is a validly existing
      corporation in good standing under the laws of the State of California.

2.    The Company has the requisite corporate power to own its properties and
      assets and to conduct its business as, to the best of our knowledge, it is
      currently being conducted, and, to the best of our knowledge, is not
      required to qualify as a foreign corporation to do business in any other
      jurisdiction in the United States.

3.    The Transaction Documents have been duly and validly authorized, executed
      and delivered by the Company and constitute valid and binding agreements
      of the Company enforceable against the Company in accordance with their
      respective terms, except as rights to indemnity under Section 7.4 of the
      Agreement may be limited by applicable laws and except as enforcement may
      be limited by applicable bankruptcy, insolvency, reorganization,
      arrangement, moratorium or other similar laws affecting creditors' rights,
      and subject to general equity principles and to limitations on
      availability of equitable relief, including specific performance.

4.    The Common Shares and the Warrants have been duly authorized, and upon
      issuance and delivery against payment therefor in accordance with the
      terms of the Agreement, the


<PAGE>   44

[COOLEY GODWARD LLP LOGO]

To the Purchasers Listed
On Exhibit A Hereto
August 21, 2001
Page Four


      Common Shares and the Warrants will be duly authorized and validly issued
      and the Common Shares will be fully paid and nonassessable. The shares of
      Common Stock issuable upon exercise of the Warrants have been duly
      authorized and reserved for issuance, and upon issuance and delivery upon
      exercise of the Warrants in accordance with the terms of the Warrants,
      will be validly issued, fully paid and nonassessable.

      This opinion is intended solely for your benefit and is not to be made
available to or be relied upon by any other person, firm, or entity without our
prior written consent; except that each Purchaser may rely on this opinion as if
it were addressed and delivered to such Purchaser on the date hereof.

Cooley Godward LLP


<PAGE>   45

                                    EXHIBIT A


                             SCHEDULE OF PURCHASERS

      New Enterprise Associates 10, Limited Partnership
      1119 St. Paul Street
      Baltimore, Maryland 21202

      NEA Ventures 2001, L.P.
      1119 St. Paul Street
      Baltimore, Maryland 21202

      The International Biotechnology Trust Plc
      31 Gresham Street
      London
      EC2V 7QA
      United Kingdom

      Steelhead Investments Ltd.
      P.O. Box 309, Ugland House
      Georgetown, Grand Cayman
      Cayman Islands

      Managed Risk Trading, L.P.
      120 Broadway, 7th Floor Mail Center
      New York, New York 10271

      Vertical International Limited
      160 Central Park South, Ste. 3212
      New York, New York 10019

      Vertical Ventures, LLC
      160 Central Park South, Ste. 3212
      New York, New York 10019


<PAGE>   46

                                    EXHIBIT E

                               ARADIGM CORPORATION


IMPORTANT - DO NOT REMOVE THIS INSTRUCTION SHEET FROM THE ATTACHED SHARE
CERTIFICATE UNLESS AND UNTIL THE SHARES ARE SOLD AS FOLLOWS:

(1)   THE SHARES ARE RESOLD PURSUANT TO THE REGISTRATION STATEMENT ON FORM S-3
(NO. [________________]), AND, IN CONNECTION WITH SUCH RESALE, THE HOLDER HAS
DELIVERED TO THE PURCHASER OF THE SHARES A CURRENT PROSPECTUS AND HAS PROVIDED
TO THE COMPANY OR TO THE TRANSFER AGENT FOR THE COMPANY'S STOCK A PURCHASER'S
CERTIFICATE OF SUBSEQUENT SALE; OR

(2)   THE SHARES ARE RESOLD IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, PROVIDED THAT, PRIOR TO
SUCH RESALE, THE HOLDER HAS NOTIFIED THE COMPANY OF SUCH DISPOSITION AND
PROVIDED THE COMPANY WITH WRITTEN ASSURANCES, IN FORM AND SUBSTANCE SATISFACTORY
TO THE COMPANY OF COMPLIANCE WITH THE REQUIREMENTS OF SUCH EXEMPTION.























                    DO NOT REMOVE THIS INSTRUCTION SHEET FROM
                         THE ATTACHED SHARE CERTIFICATE
                            EXCEPT IN ACCORDANCE WITH
                        THE INSTRUCTIONS SET FORTH ABOVE.



                                      E-1.
<PAGE>   47

                                    EXHIBIT F

                   PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE


To:   [INSERT TRANSFER AGENT]

      ATTENTION: [________________]

      The undersigned, the Purchaser or an officer of, or other person duly
authorized by the Purchaser, hereby certifies that _____________________________
institution was the                                [FILL IN NAME OF INSTITUTION]

Purchaser of the shares evidenced by the attached certificate, and as such,
proposes to transfer such shares on or about _________________ either (i) in
accordance with the registration                   [DATE]

statement, file number [_______________] in which case the Purchaser certifies
that the requirement of delivering a current prospectus has been complied with
or will be complied with in connection with such sale, or (ii) in accordance
with Rule 144 under the Securities Act of 1933 ("RULE 144"), in which case the
Purchaser certifies that it has complied with or will comply with the
requirements of Rule 144.

Print or type:

      Name of Purchaser:       ________________________________________________

      Name of Individual
      representing Purchaser
      (if an Institution):     ________________________________________________

      Title of Individual
      representing Purchaser
      (if an Institution):     ________________________________________________

Signature by:

      Purchaser or Individual
      representing Purchaser:  ________________________________________________



                                      F-1.