1.

 
     **1.2**Article 4.9(h) of the Development Agreement is hereby amended by deleting the sentence “Insuch case ARADIGM shall continue to be entitled to receive on an ongoing basis its [ * ] asspecified in Article 5.2, but reduced by the [ * ] associated with the transfer prices, asspecified in Articles 4.5 and 4.6, which shall be retained by NOVO NORDISK as compensation forbeing required to undertake the manufacturing function”, and replacing such sentence with thefollowing:“In such case ARADIGM shall be entitled to, and NOVO NORDISK shall pay, all amounts owedunder Articles 5.2 and 5.5 of the Development Agreement with respect to ARADIGM’s [ * ] onNet Sales of such Packaged Product, but, for clarification purposes, Aradigm will notreceive payments of the interim transfer price pursuant to Article 4.5.”     **1.3**Article 4.11 of the Development Agreement is hereby amended by deleting the sentence“ARADIGM shall continue to share in the Gross Profit associated with Packaged Products produced inthis facility as specified by Article 5 (with the [ * ] of product produced at such facility to beincluded in the calculation of Gross Profit)”, and replacing such sentence with the following:“ARADIGM shall continue to share in the Gross Profit associated with Packaged Productsproduced in this facility as specified by Article 5 (with the [ * ] of product produced atsuch facility to be included in the calculation of Gross Profit), but, for clarificationpurposes, Aradigm will not receive payments of the interim transfer price pursuant toArticle 4.5.”     **1.4**Article 5.2 of the Development Agreement is hereby amended by deleting the sentence “Inaddition to the payments referred to in Article 5.1 above, each year during the term of thisAgreement NOVO NORDISK shall pay to ARADIGM [ * ] on Net Sales of the Packaged Products and theDevices during such year; provided, however, that a different percentage may be applicable toPackaged Products containing Other Compounds as agreed by the parties pursuant to Article 2.1”,and replacing such sentence with the following:“In addition to the payments referred to in Article 5.1 above, each year during the term ofthis Agreement NOVO NORDISK shall pay to ARADIGM [ * ] on Net Sales of the Packaged Productsand the Devices during such year; provided, however, that a different percentage may beapplicable to Packaged Products containing Other Compounds as agreed by the parties pursuantto Article 2.1.”**2. Miscellaneous**     **2.1 Full Force and Effect.**This Amendment amends the terms of the Agreement and is deemedincorporated into, and governed by all the other terms of, the DevelopmentAgreement. The provisions of the Development Agreement, as amended by this Amendment, remainin full force and effect.     **2.2 Counterparts; Facsimile**. This First Amendment may be executed in counterparts and byfacsimile. **[ * ] = Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.**
2.

 
     In Witness Whereof, the Parties have executed this First Amendment as of theEffective Date.           Novo Nordisk A/S   Aradigm Corporation           Novo Allé DK-2880   3929 Point Eden WayBagsværd, Denmark   Hayward, CA 94545           By: /s/ Kåre Schultz   By: /s/ Richard P. Thompson  Name:  Kåre Schultz   Name:  Rich Thompson  Title: Executive Vice President   Title: Chairman, President and ChiefExecutive Officer   **[ * ] = Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.**
3.