EX-10.3






Aradigm Corporation




International Scientific Advisory Agreement




This Agreement is made by Aradigm Corporation (“Aradigm”) and Babatunde Otulana,
M.D., an individual (“Consultant”), effective the 1st of January, 2009, (the “Effective Date”) for
the purpose of setting forth the exclusive terms and conditions by which Aradigm will acquire
Consultant’s services.



In consideration of the mutual obligations specified in this Agreement, and any compensation
paid to Consultant for his or her services, the parties agree to the following




1. Engagement of Services.



Consultant, pursuant to the terms of this Agreement, is retained by Aradigm to provide the
services as described in Exhibit A.



2. Payment for Services.



(a) In consideration for services specified in Exhibit A, Aradigm will grant to Consultant,
subject to approval of Aradigm’s Board of Directors, a non-statutory stock option covering twenty
thousand (20,000) shares of Aradigm’s common stock for up to eight (8) days of service. Such
options shall be granted at the next Board of Directors meeting and shall vest quarterly over a two
(2) year period from the Effective Date. In addition, Aradigm will pay the Consultant a fee of ten
thousand dollars ($10,000). First installment ($5,000) will be made upon execution of the
agreement, with the balance due on the first anniversary (January 1, 2010). Aradigm will pay the
Consultant a fee based on a rate per day of one thousand two hundred dollars ($1,200) for each day
beyond the eight (8) days of service.



(b) Aradigm will also reimburse Consultant for reasonable travel and other incidental expenses
incurred by Consultant in performing the services under this Agreement; provided, however, that
Aradigm shall not be obligated hereunder unless (i) Aradigm has agreed in advance to reimburse
costs other than travel and accommodation costs associated with ISAB meetings, and (ii) Consultant
provides Aradigm with appropriate receipts or other relevant documentation for all such costs as
part of any submission for reimbursement.




3. Nondisclosure and Trade Secrets.



3.1 Company Information. During the term of this Agreement and in the course of Consultant’s
performance hereunder, Consultant may receive or otherwise be exposed to confidential and/or
proprietary information relating to Aradigm’s technology know-how, trade secrets, data, inventions,
developments, plans business practices, and strategies. Such confidential and/or proprietary
information of Aradigm (collectively referred to as “Information”) may include but not be limited
to: (i) confidential and/or proprietary information supplied to Consultant with the legend “Aradigm
Confidential” or equivalent; (ii) Aradigm’s marketing and customer support strategies, financial
information (including sales, costs, profits and pricing methods), internal organization, employee
information, and customer lists; (iii) Aradigm’s technology, including, but not limited to,
discoveries, inventions, research and development efforts, data, software, trade secrets,
processes, samples, AERx® drug delivery technology, AERx Strip® dosage forms and other related
technology, formulas, methods, product and know-how and show-how; (iv) all derivatives,
improvements, additions, modifications, and enhancements to any of the above, including any such
information or material created or developed by Consultant under this Agreement; or (v) information
of third parties as to which Aradigm has an obligation of confidentiality.



Consultant acknowledges the confidential and secret character of the Information and agrees
that the Information is the sole, exclusive and extremely valuable property of Aradigm.
Accordingly, Consultant agrees not to reproduce any of the Information without the applicable prior
written consent of Aradigm, not to use the Information except in the performance of this Agreement,
and not to disclose all or any part of the Information in any form to any third party, either
during or after the term of this Agreement. Consultant agrees to protect all Information of
Aradigm with the same degree of care that it protects its own Information (which, in any event,
shall be not less than a reasonable degree of care under the circumstances). Upon notice of
termination of this Agreement for any reason, including expiration of term, or upon Aradigm’s
request, Consultant agrees to cease using and to immediately return to Aradigm all whole and
partial copies and derivatives of the Information, whether in Consultant’s possession or under
Consultant’s direct or indirect control.



3.2 Other Employer Information. Consultant agrees that he will not, during his engagement
with Aradigm, improperly use or disclose any proprietary information or trade secrets of his former
or concurrent clients, employers or companies, and that he will not bring onto the premises of
Aradigm any unpublished documents or any property belonging to his former or concurrent clients,
employers or companies unless consented to in writing by said employers or companies. .



3.3 Third Party Information. Consultant recognizes that Aradigm has received and in the
future will receive from third parties their confidential or proprietary information subject to a
duty on Aradigm’s part to maintain the confidentiality of such information and, in some cases, to
use it only for certain limited purposes. Consultant agrees that he owes Aradigm and such third
parties, both during the term of his engagement and thereafter, a duty to hold all such
confidential or proprietary information in the strictest confidence and not to disclose it to any
person, firm or corporation (except in a manner that is consistent with Aradigm’s agreement with
the third party) or use it for the benefit of anyone other than Aradigm or such third party
(consistent with Aradigm’s agreement with the third party).




4. Ownership of Work Product.



4.1 Disclosure of Work Product. As used in this Agreement, the term “Work Product” means any
invention, whether or not patentable, and all related know-how, designs, mask works, trademarks,
formulae, processes, manufacturing techniques, trade secrets, ideas, artwork, software or other
copyrightable or patentable works. Consultant agrees to disclose promptly in writing to Aradigm,
or any person designated by Aradigm, all Work Product which is solely or jointly conceived, made,
reduced to practice, or learned by Consultant in the course of any work performed for Aradigm
(“Aradigm Work Product”). Consultant represents that any Work Product relating to Aradigm’s
business or any project which Consultant has made, conceived or reduced to practice at the time of
signing this Agreement (“Prior Work Product”) has been disclosed in writing to Aradigm and attached
to this Agreement as Exhibit B. If disclosure of any such Prior Work Product would cause
Consultant to violate any prior confidentiality agreement, Consultant understands that it is not to
list such Prior Work Product in Exhibit B but it will disclose a cursory name for each such
invention, a listing of the party(ies) to whom it belongs, and the fact that full disclosure as to
such Prior Work Product has not been made for that reason. A space is provided in Exhibit B for
such purpose.



4.2 Ownership of Work Product. Consultant shall specifically describe and identify in Exhibit
B all technology which (a) Consultant intends to use in performing under this Agreement, (b) is
either owned solely by Consultant or licensed to Consultant with a right to sublicense and (c) is
in existence in the form of a writing or working prototype prior to the Effective Date (“Background
Technology”). Consultant agrees that any and all Inventions conceived, written, created or first
reduced to practice in the performance of work under this Agreement shall be the sole and exclusive
property of Aradigm.



4.3 Assignment of Aradigm Work Product. Except for Consultant’s rights in the Background
Technology, Consultant irrevocably assigns to Aradigm or its designee, all right, title and
interest worldwide in and to the Aradigm Work Product and all applicable intellectual property
rights related to the Aradigm Work Product, including without limitation, copyrights, trademarks,
trade secrets, patents, moral rights, contract and licensing rights, whether or not patentable or
registerable under copyright or similar laws, (the “Proprietary Rights”). Except as set forth
below, Consultant retains no rights to use the Aradigm Work Product and agrees not to challenge the
validity of Aradigm’s ownership in the Aradigm Work Product. Consultant hereby grants to Aradigm a
non-exclusive, royalty-free, irrevocable and world-wide right, with rights to sublicense through
multiple tiers of sublicensees, to reproduce, make derivative works of, publicly perform, and
publicly display in any form or medium, whether now known or later developed, distribute, make, use
and sell Background Technology and any Prior Work Product incorporated or used in the Aradigm Work
Product for the purpose of developing and marketing Aradigm products. Consultant further
acknowledges that all original works of authorship which are made by Consultant (solely or jointly
with others) within the scope of and during the period of this agreement and which are protectable
by copyright are “works made for hire” as that term is defined in the United States Copyright Act
(17 U.S.C., Section 101).



4.4 Waiver of Assignment of Other Rights. If Consultant has any rights to the Aradigm Work
Product that cannot be assigned to Aradigm, Consultant unconditionally and irrevocably waives the
enforcement of such rights, and all claims and causes of action of any kind against Aradigm with
respect to such rights, and agrees, at Aradigm’s request and expense, to consent to and join in any
action to enforce such rights. If Consultant has any right to the Aradigm Work Product that cannot
be assigned to Aradigm or waived by Consultant, Consultant unconditionally and irrevocably grants
to Aradigm during the term of such rights, an exclusive, irrevocable, perpetual, worldwide, fully
paid and royalty-free license, with rights to sublicense through multiple levels of sublicensees,
to reproduce, create derivative works of, distribute, publicly perform and publicly display by all
means now known or later developed, such rights.



4.5 Assistance. Consultant agrees to cooperate with Aradigm or its designee(s), both during
and after the term of this Agreement, in the procurement and maintenance of Aradigm’s rights in
Aradigm Work Product and to execute, when requested, any other documents deemed necessary by
Aradigm to carry out the purpose of this Agreement. Consultant agrees to execute upon Aradigm’s
request a signed transfer of copyright to Aradigm in the form attached to this Agreement as Exhibit
D for all Aradigm Work Product subject to copyright protection, including, without limitation,
computer programs, notes, sketches, drawings and reports.



4.6 Enforcement of Proprietary Rights. Consultant will assist Aradigm in every proper way to
obtain, and from time to time enforce, United States and foreign Proprietary Rights relating to
Aradigm Work Product in any and all countries. To that end Consultant will execute, verify and
deliver such documents and perform such other acts (including appearances as a witness) as Aradigm
may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and
enforcing such Proprietary Rights and the assignment thereof. In addition, Consultant will
execute, verify and deliver assignments of such Proprietary Rights to Aradigm or its designee.
Consultant’s obligation to assist Aradigm with respect to Proprietary Rights relating to such
Aradigm Work Product in any and all countries shall continue beyond the termination of this
Agreement, but Aradigm shall compensate Consultant at a reasonable rate after such termination for
the time actually spent by Consultant at Aradigm’s request on such assistance.



4.7 Execution of Documents. In the event Aradigm is unable for any reason, after reasonable
effort, to secure Consultant’s signature on any document needed in connection with the actions
specified in the preceding sections 4.5 and 4.6, Consultant hereby irrevocably designates and
appoints Aradigm and its duly authorized officers and agents as its agent and attorney in fact,
which appointment is coupled with an interest, to act for and in its behalf to execute, verify and
file any such documents and to do all other lawfully permitted acts to further the purposes of the
preceding paragraph with the same legal force and effect as if executed by Consultant. Consultant
hereby waives and quitclaims to Aradigm any and all claims, of any nature whatsoever, which
Consultant now or may hereafter have for infringement of any Proprietary Rights assigned hereunder
to Aradigm.



4.8 Exception to Assignments. Consultant understands that the provisions of this Agreement
requiring assignment of inventions and works of authorship to Aradigm do not apply to any invention
which qualifies fully under the provisions of the California Labor Code Section 2870 (attached
hereto as Exhibit C). Consultant will advise Aradigm promptly in writing of any inventions or
works of authorship which Consultant believes meet the criteria in California Labor Code Section
2870 and not otherwise disclosed in Exhibit B.



4.9 Obligation to Keep Aradigm Informed. During the term of this Agreement, and for one (1)
year after its termination for any reason, Consultant will promptly disclose to Aradigm fully and
in writing all patent applications filed by him or on his behalf.




5. Conflicting Engagements.



Consultant will notify Aradigm in writing prior to entering into any employment or consulting
arrangement with one or more third parties which involves subject matter substantially similar to
services Consultant is to provide hereunder or which is provided for the benefit of third parties
who are competitors of Aradigm. During the term of this Agreement, Consultant shall not accept any
employment or consulting work which conflicts with Consultant’s obligations to Aradigm hereunder or
which may involve use or disclosure of Information other than as permitted hereunder.




6. Term; Termination.



Unless otherwise terminated, the term of this Agreement shall be for two (2) years from the
Effective Date. Either Aradigm or Consultant may terminate this Agreement upon thirty (30) days
prior written notice to the other. In the event this Agreement is terminated, Consultant shall,
promptly upon termination, return all Information (including all copies thereof) as provided in
Section 3, deliver all Work Product and related documentation to Aradigm, and provide Aradigm with
an invoice for any work provided by Consultant for which compensation has not already been paid.
If compensation has been advanced to Consultant, Consultant shall reimburse any amounts for which
work has not been performed prior to the date of the notice of termination. Sections 3, 4 and 8
shall survive the termination of this Agreement for any reason, including expiration of the term of
this Agreement.




7. Independent Contractor.



Consultant is an independent contractor, is not an agent or employee of Aradigm and is not
authorized to act on behalf of Aradigm. Consultant will not be eligible for any employee benefits,
nor will Aradigm make deductions from any amounts payable to Consultant for taxes. Payment of all
taxes due on any amounts paid to Consultant hereunder shall be the sole responsibility of
Consultant.




8. General.



The parties’ rights and obligations under this Agreement will bind and inure to the benefit of
their respective successors and assigns, except that Consultant may not delegate or assign any of
his or her obligations or rights under this Agreement without Aradigm’s prior written consent. If
Consultant assigns any rights or delegates any obligations without Aradigm’s prior written consent,
then such assignment or delegation shall be null and void. This Agreement and Exhibit A, attached
hereto and hereby incorporated herein, constitute the parties’ final, exclusive and complete
understanding and agreement with respect to the subject matter hereof, and supersede all prior and
contemporaneous understandings and agreements relating to its subject matter. This Agreement may
not be waived, modified or amended unless mutually agreed upon in writing by both parties. In the
event any provision of this Agreement is found to be legally unenforceable, such provision shall be
deemed deleted from the Agreement and such unenforceability shall not prevent enforcement of any
other provision of the Agreement. This Agreement shall be governed by the laws of the State of
California, excluding its conflicts of laws principles. Any notices required or permitted
hereunder shall be given to the appropriate party at the address specified below or at such other
address as the party shall specify in writing. Such notice shall be deemed given either upon
personal delivery, one (1) day after being sent by overnight delivery service, three (3) days after
the date of mailing if sent by certified or registered mail, postage prepaid, or on the day of
transmission by facsimile, provided that the notifying party confirms receipt of such transmission
with the other party by telephone. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which together shall constitute a single
instrument.



In Witness Whereof, the parties hereto have executed this Agreement as of the Effective
Date.



ARADIGM CONSULTANT



	 	 	 	 	 	 	 
	Signature:

	 	/s/ Igor Gonda
	 	Signature:
	 	/s/ Babatunde Otulana
	
 
	 	 
	 	 	 	 
	Date:

	 	12/12/08
	 	Date:
	 	12/12/08
	
 
	 	 
	 	 	 	 
	Name:

	 	Igor Gonda
	 	Name:
	 	Tunde Otulana, M.D.
	Title:

	 	Chief Executive Officer
	 	Title:
	 	

	Address:

	 	Aradigm Corporation

3929 Point Eden Way

Hayward, CA 94545
	 	Address:





	 	On file with Aradigm





	Phone:

	 	(510) 265-9000
	 	Phone:
	 	On file with Aradigm






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EXHIBIT A




Description of services to be provided from January 1, 2009 to December 31, 2010:




	•	 	Consulting services:





1. Serve as a member of Aradigm’s scientific advisory board (“SAB”) and perform the duties of
a member to be decided upon by the mutual agreement of Aradigm, the chairman of the SAB and its
members.



2. Meet with other SAB members, review goals of Aradigm and develop strategies for achieving
them.



3. Provide advice, support, theories, techniques and improvements in Aradigm’s scientific
research and product development activities.



4. The services that are the subject of this Agreement consist of: (1) assisting Aradigm with
selection of drug development candidates; (2) clinical critique of product development; (3)
assistance with the design and analysis of clinical trials; and (4) discussions with third parties
designated by Aradigm with respect to Aradigm’s business. Consultant has performed, and will
continue to perform, these services for Aradigm in good faith and to the best of Consultant’s
ability, upon Aradigm’s request at places and times agreeable to Aradigm and Consultant.




	•	 	All invoices will be submitted to the attention of: Accounting Department, Aradigm
Corporation, 3929 Point Eden Way, Hayward, CA 94545.






	•	 	Igor Gonda, Ph.D. is the primary Aradigm contact, with the assistance of Kathy Pitta.




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Exhibit B




Prior Work Product Disclosure



EXCEPT AS LISTED IN SECTION 2 BELOW, THE FOLLOWING IS A COMPLETE LIST OF ALL PRIOR WORK
PRODUCT THAT HAVE BEEN MADE OR CONCEIVED OR FIRST REDUCED TO PRACTICE BY CONSULTANT ALONE OR
JOINTLY WITH OTHERS PRIOR TO MY ENGAGEMENT BY ARADIGM:



No inventions or improvements.



See below:




Additional sheets attached.



DUE TO A PRIOR CONFIDENTIALITY AGREEMENT, CONSULTANT CANNOT COMPLETE THE DISCLOSURE UNDER
SECTION 1 ABOVE WITH RESPECT TO INVENTIONS OR IMPROVEMENTS GENERALLY LISTED BELOW, THE PROPRIETARY
RIGHTS AND DUTY OF CONFIDENTIALITY WITH RESPECT TO WHICH CONTRACTOR OWES TO THE FOLLOWING
PARTY(IES):



Invention or Improvement Party(ies) Relationship



1.


2.


3.




Additional sheets attached.



Background Technology Disclosure



The following is a list of all Background Technology which Consultant intends to use in
performing under this Agreement:



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EXHIBIT C




CALIFORNIA LABOR CODE SECTION 2870

EMPLOYMENT AGREEMENTS;

ASSIGNMENT OF RIGHTS




"(a) Any provision in an employment agreement which provides that an employee shall assign, or
offer to assign, any of his or her rights in an invention to his or her employer shall not apply to
an invention that the employee developed entirely on his or her own time without using the
employer’s equipment, supplies, facilities, or trade secret information except for those inventions
that either:



(1) Relate at the time of conception or reduction to practice of the invention to the
employer’s business, or actual or demonstrably anticipated research or development of the employer.



(2) Result from any work performed by the employee for the employer.



(b) To the extent a provision in an employment agreement purports to require an employee to
assign an invention otherwise excluded from being required to be assigned under subdivision (a),
the provision is against the public policy of this state and is unenforceable.”



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Exhibit D



Assignment of Copyright



For good and valuable consideration which has been received, the undersigned sells, assigns
and transfers to Aradigm Corporation, a California corporation, and its successors and assigns, the
copyright in and to the following work, which was created by the following indicated author(s):



Title:



Author(s):



Copyright Office Identification No. (if any):



and all of the right, title and interest of the undersigned, vested and contingent, therein and
thereto.



Executed this      day of      , 20     .



Signature:



Printed Name:




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