Restructuring Agreement

Exhibit 10.29

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

RESTRUCTURING AGREEMENT dated as of September 28, 2004 among ARADIGM CORPORATION NOVO NORDISK A/S and NOVO NORDISK DELIVERY TECHNOLOGIES, INC.


TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS SECTION 1.01. Definitions 1 SECTION 1.02. Other Definitional And Interpretative Provisions 5 SECTION 1.03. Knowledge Of Aradigm 6 ARTICLE 2 PRE-CLOSING ACTIVITIES: CLOSING; THE TRANSACTIONS; POST-CLOSING ACTIVITIES SECTION 2.01. Pre-closing Activities 6 SECTION 2.02. Closing 6 SECTION 2.03. Effect of Closing 6 SECTION 2.04. Post-closing Activities 6 ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF ARADIGM SECTION 3.01. Corporate Existence and Power 7 SECTION 3.02. Corporate Authorization 7 SECTION 3.03. Governmental Authorization 7 SECTION 3.04. Noncontravention 7 SECTION 3.05. Required and Other Consents 7 SECTION 3.06. Absence of Certain Changes 8 SECTION 3.07. No Undisclosed Material Liabilities 8 SECTION 3.08. Material Contracts 8 SECTION 3.09. Litigation 9 SECTION 3.10. Compliance with Laws and Court Orders 9 SECTION 3.11. Properties 9 SECTION 3.12. Title to the Transferred Assets 10 SECTION 3.13. Intellectual Property 10 SECTION 3.14. Insurance Coverage 11 SECTION 3.15. Licenses and Permits 11 SECTION 3.16. Inventories and Supplies 12 SECTION 3.17. Documents 12 SECTION 3.18. Finders' Fees 12 SECTION 3.19. Employees 12 SECTION 3.20. Environmental Compliance 12 SECTION 3.21. Representations 13 SECTION 3.22. Compliance With Existing Agreements 13


Page ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF NOVO NORDISK SECTION 4.01. Corporate Existence and Power 13 SECTION 4.02. Corporate Authorization 13 SECTION 4.03. Governmental Authorization 13 SECTION 4.04. Noncontravention 13 SECTION 4.05. Litigation 14 SECTION 4.06. Finders' Fees 14 SECTION 4.07. Information 14 SECTION 4.08 Compliance with Existing Agreements 14 ARTICLE 5 COVENANTS OF ARADIGM SECTION 5.01. Conduct of the Development Program 14 SECTION 5.02. Access to Information 14 SECTION 5.03. Notices of Certain Events 15 SECTION 5.04. Shareholder Votes 15 ARTICLE 6 COVENANTS OF NOVO NORDISK SECTION 6.01. Access 15 SECTION 6.02. Information 16 ARTICLE 7 COVENANTS OF THE PARTIES SECTION 7.01. Best Efforts; Further Assurances 16 SECTION 7.02. Certain Filings 16 SECTION 7.03. Public Announcements 16 SECTION 7.04. Confidentiality 16 SECTION 7.05. Warn Act 17 SECTION 7.06. Nonsolicitation 17 SECTION 7.07. Compliance with Existing Agreements 17 ARTICLE 8 EMPLOYEE BENEFITS SECTION 8.01. Employment Offers 18 SECTION 8.02. Employee Benefits Definitions 18 SECTION 8.03. Employee Benefits Representations 18 SECTION 8.04. Employee Benefits Covenants 19 SECTION 8.05. No Third Party Beneficiaries 20 ARTICLE 9 CONDITIONS TO CLOSING SECTION 9.01. Conditions to Obligations of the Parties 20 SECTION 9.02. Conditions to Obligations of Novo Nordisk and Novo Nordisk Delivery Technologies, Inc. 20 SECTION 9.03. Conditions to Obligation of Aradigm 21


Page ARTICLE 10 SURVIVAL; INDEMNIFICATION SECTION 10.01. Survival 22 SECTION 10.02. Indemnification 22 SECTION 10.03. Procedures 22 ARTICLE 11 TERMINATION SECTION 11.01. Grounds for Termination 23 SECTION 11.02. Effect of Termination 23 ARTICLE 12 MISCELLANEOUS SECTION 12.01. Notices 23 SECTION 12.02. Amendments and Waivers 24 SECTION 12.03. Expenses 24 SECTION 12.04. Successors and Assigns 24 SECTION 12.05. Governing Law 24 SECTION 12.06. Jurisdiction 24 SECTION 12.07. Waiver of Jury Trial 25 SECTION 12.08. Counterparts; Third Party Beneficiaries; Effectiveness 25 SECTION 12.09. Entire Agreement 25 SECTION 12.10. Bulk Sales Laws 25 SECTION 12.11. Severability 25 SECTION 12.12. Specific Performance 25 Exhibit A Amended and Restated License Agreement A-1 Exhibit B Asset Purchase Agreement B-1 Exhibit C Sublease Agreement C-1 Exhibit D Contract Manufacturing Agreement D-1 Exhibit E Quality Agreement E-1 Exhibit F Amended and Restated Stock Purchase Agreement F-1 Exhibit G Transition Services Agreement G-1 Exhibit H Assignment Agreements H-1 Appendix A Press Release Appendix B Form of Cooley Godward Opinion


RESTRUCTURING AGREEMENT

AGREEMENT dated as of September 28, 2004 by and among Aradigm Corporation, a corporation duly organized and existing under the law of the State of California ("Aradigm") , Novo Nordisk A/S, a company duly organized and existing under the law of Denmark ("Novo Nordisk") and Novo Nordisk Delivery Technologies, Inc., a corporation duly organized and existing under the law of the State of Delaware ("Novo Nordisk Delivery Technologies, Inc.") . Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in Article 1.

WITNESSETH:

WHEREAS, Aradigm and Novo Nordisk desire to restructure their existing arrangements regarding, among other things, the development and commercialization of the Development Program (as such term is defined in the Amended and Restated License Agreement) as set forth in this Agreement; and

WHEREAS, it is intended that the foregoing shall be effected on the terms and subject to the applicable conditions contained herein and in the other Transaction Agreements.

NOW, THEREFORE, in consideration of the premises set forth above and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

SECTION 1.01. Definitions. (a) The following terms, as used herein, shall have the following meanings:

"Affiliate" shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such other Person. For the purposes hereof "control" shall mean the power to direct or cause the direction of the management and the policies of any Person, whether through the ownership of a majority of the outstanding voting securities of such Person, by contract or otherwise.

"Amended and Restated License Agreement" shall mean the Amended and Restated License Agreement, to be entered into as of the Closing, by and between Aradigm and Novo Nordisk, in the form attached hereto as Exhibit A.

"Amended and Restated Stock Purchase Agreement" shall mean the Amended and Restated Stock Purchase Agreement, to be entered into as of the Closing, by and between Aradigm, Novo Nordisk and Novo Nordisk Pharmaceuticals, Inc., in the form attached hereto as Exhibit F.

"Aradigm Balance Sheet" shall mean the unaudited balance sheet of Aradigm as of June 30, 2004.

"Aradigm Balance Sheet Date" shall mean June 30, 2004.

"Aradigm Employee Stock Purchase Plan" shall mean the employee stock purchase plan of Aradigm as in effect immediately prior to the date hereof.

"Aradigm Intellectual Property Rights" shall mean the Aradigm Patent Rights, the Aradigm Selected Pulmonary Delivery Patent Rights and the Aradigm Know-How, as each is defined in the Amended and Restated License Agreement.

"Aradigm Material Adverse Effect" shall mean (i) an effect on the condition (financial or otherwise), business, assets, results of operations or prospects of Aradigm, which impairs, or is reasonably likely to impair, the ability of Aradigm to perform in any material respect any of its obligations under the Transaction Agreements or (ii) a material adverse effect on the business opportunity represented by the Development Program.

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"Asset Purchase Agreement" shall mean the Asset Purchase Agreement, to be entered into as of the Closing, by and between Aradigm and Novo Nordisk Delivery Technologies, Inc., in the form attached hereto as Exhibit B.

"Assignment Agreements" shall mean the Assignment Agreements, to be entered into as of the Closing, by and among Aradigm, Novo Nordisk Delivery Technologies, Inc. and the other parties thereto, in the forms attached hereto as Exhibit H.

"Authorization" shall mean any waiver, amendment, consent, approval, license, franchise, permit (including construction permits), certificate, exemption, variance or authorization of, expiration or termination of any waiting period requirement (including pursuant to the HSR Act) or other action by, or notice, filing, registration, qualification, declaration or designation with, any Person (including any Governmental Authority).

"Business Day" shall mean a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York or Copenhagen, Denmark are authorized or required by law to close.

"CERCLA" shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, and any rules or regulations promulgated thereunder.

"Competition Law" shall mean the European Commission Merger Regulation, Sherman Act, the Clayton Act, the HSR Act, the Federal Trade Commission Act and all other Laws that are designed or intended to prohibit, restrict or regulate (a) mergers, acquisitions or other business combinations or (b) actions having the purpose or effect of monopolization or restraint of trade or lessening of competition.

"Contract Manufacturing Agreement" shall mean the Contract Manufacturing Agreement, to be entered into as of Closing, by and between Aradigm, Novo Nordisk and Novo Nordisk Delivery Technologies, Inc., in the form attached hereto as Exhibit D.

"Co-Existence Agreement" shall mean the Co-Existence Agreement dated as of June 23, 2003 by and between Aradigm and Novo Nordisk.

"Development and License Agreement" shall mean the Development and License Agreement dated as of June 2, 1998, as amended, by and between Aradigm and Novo Nordisk.

"Development Program" shall have the meaning set forth in the Amended and Restated License Agreement.

"Development Program Employee" shall mean any employee of Aradigm listed on Schedule 1 to the Letter Agreement.

"Employee Transition Plan" shall have the meaning set forth in the Letter Agreement.

"Environmental Laws" shall mean any federal, state, local or foreign law (including common law), treaty, judicial decision, regulation, rule, judgment, order, decree, injunction, permit or governmental restriction or any agreement with any Governmental Authority or other third party, whether now or hereafter in effect, relating to the environment, human health and safety or to pollutants, contaminants, wastes or chemicals or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substances, wastes or materials.

"Environmental Liabilities" shall mean any and all liabilities arising in connection with or in any way relating to Aradigm (or any predecessor of Aradigm or any prior owner of all or part of its business and assets), any property now or previously owned, leased or operated by Aradigm, the Development Program (as currently or previously conducted), the Transferred Assets or any activities or operations occurring or conducted at the Real Property (including offsite disposal), whether accrued, contingent, absolute, determined, determinable or otherwise, which (i) arise under or relate to any Environmental Law and (ii) relate to actions occurring or conditions existing on or prior to the Closing Date (including any matter disclosed or required to be disclosed in Schedule 3.20).

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"Environmental Permits" shall mean all permits, licenses, franchises, certificates, approvals and other similar authorizations of governmental authorities relating to or required by Environmental Laws and affecting, or relating in any way to, the Development Program, the Real Property and the Transferred Assets.

"Estimated Purchase Price" shall mean the sum of the book values of the equipment set forth in Part I of Annex 1 to Exhibit A to the Asset Purchase Agreement as reflected on the accounting books and records of Aradigm in accordance with GAAP as of the date hereof that would be included in the Purchased Assets if the Closing were to occur on the date hereof.

"Excluded Assets" shall have the meaning set forth in the Asset Purchase Agreement.

"Excluded Liabilities" shall have the meaning set forth in the Asset Purchase Agreement.

"GAAP" shall mean generally accepted accounting principles in the United States.

"Governmental Authority" shall mean any supranational, national, state, municipal or local government, political subdivision or other governmental department, court, commission, board, bureau, agency, instrumentality, or other authority thereof, or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority, whether domestic or foreign, or any official of any of the foregoing.

"Hazardous Substances" shall mean any pollutant, contaminant, waste or chemical or any toxic, radioactive, ignitable corrosive, reactive or otherwise hazardous substance, waste or material or any substance, waste or material having any constituent elements displaying any of the foregoing characteristics including petroleum, its derivatives, by-products and other hydrocarbons, and any substance, waste or material regulated under any Environmental Law.

"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

"Intellectual Property Rights" shall mean (i) national and multinational statutory invention registrations, patents and patent applications (including all reissues, divisions, continuations, continuations-in-part, extensions and reexaminations thereof) registered or applied for in the United States and/or all other nations throughout the world, all improvements to the inventions disclosed in each such registration, patent or patent application, (ii) copyrights (whether or not registered) and registrations and applications for registration thereof in the United States and/or all other nations throughout the world, including all derivative works, moral rights, renewals, extensions, reversions or restorations associated with such copyrights, now or hereafter provided by law, regardless of the medium of fixation or means of expression, and (iii) trade secrets and know-how (including manufacturing and production processes, firmware, data and techniques and research and development information).

"Joint Steering Committee" shall have the meaning set forth in the Development and License Agreement.

"Judgment" shall mean any judicial decision, judgment, writ, order, injunction, stipulation, award or decree of any court, judge, justice or magistrate, including any bankruptcy court or judge or the arbitrator in any binding arbitration, and any order of or by any Governmental Authority.

"Law" shall mean any foreign or domestic law, statute, code, ordinance, rule, regulation, treaty, Judgment or principles of common law or equity (including negligence and strict liability) enacted, entered, promulgated or applied by a Governmental Authority.

"Letter Agreement" shall mean the letter agreement entered into as of the date hereof by and among Aradigm, Novo Nordisk and Novo Nordisk Delivery Technologies, Inc.

"Lien" shall mean, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, encumbrance or other adverse claim of any kind in respect of such property or asset. For the purposes of this Agreement and the other Transaction Agreements, a Person shall be deemed to own subject to a Lien any property or asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such property or asset.

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"Manufacturing and Supply Agreement" shall mean the Manufacturing and Supply Agreement dated as of October 22, 2001 by and between Aradigm and Novo Nordisk.

"1933 Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"1934 Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"Patent Cooperation Agreement" shall mean the Patent Cooperation Agreement dated as of October 22, 2001 by and between Aradigm and Novo Nordisk.

"Person" shall mean an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

"Purchased Assets" shall have the meaning set forth in the Asset Purchase Agreement.

"Purchase Price" shall have the meaning set forth in the Asset Purchase Agreement.

"Quality Agreement" shall mean the Quality Agreement, to be entered into as of the Closing, by and between Aradigm and Novo Nordisk Delivery Technologies, Inc., in the form attached hereto as Exhibit E.

"Required Shareholder Approvals" shall mean the approval of the Transactions (i) in accordance with the law of the State of California and the certificate of incorporation, bylaws and certificate of designation of Aradigm by (A) the common shareholders and the preferred shareholders of Aradigm, voting together as a class and (B) the preferred shareholders of Aradigm, voting separately as a class and (ii) by a majority of the votes cast by proxy or in person by the common shareholders and the preferred shareholders of Aradigm, voting together as a class, at the special shareholders' meeting of Aradigm at which the vote described in (i)(A) above will be held, without counting votes cast by Novo Nordisk Pharmaceuticals, Inc. and Novo Nordisk.

"Signing Date" shall mean the day and year first above written.

"Stock Purchase Agreement" shall mean the Stock Purchase Agreement dated as of October 22, 2001 by and between Novo Nordisk Pharmaceuticals, Inc. and Aradigm.

"Sublease Agreement" shall mean the Sublease Agreement, to be entered into as of the Closing, by and among Aradigm and Novo Nordisk Delivery Technologies, Inc., in the form attached hereto as Exhibit C.

"Transactions" shall mean the transactions contemplated by the Transaction Agreements.

"Transaction Agreements" shall mean the Amended and Restated License Agreement, the Asset Purchase Agreement, the Sublease Agreement, the Contract Manufacturing Agreement, the Quality Agreement, the Amended and Restated Stock Purchase Agreement, the Letter Agreement, the Transition Services Agreement and the Assignment Agreements.

"Transferred Assets" shall mean the Purchased Assets, but excluding the Excluded Assets.

"Transition Services Agreement" shall mean the Transition Services Agreement, to be entered into as of the Closing, by and between Aradigm and Novo Nordisk Delivery Technologies, Inc., in the form attached hereto as Exhibit G.

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(b) Each of the following terms is defined in the Section set forth opposite such term: Term Section Approved Leave of Absence 8.01 Aradigm Recitals Aradigm Proxy Statement 5.04 Building 1 Landlord 9.02 (h) Building 1 Lease 9.02 (h) Closing 2.02 Closing Date 2.02 Code 8.02 Confidential Information 7.04 Damages 10.02 Development Program Employee Plans 8.03 ERISA 8.02 ERISA Affiliate 8.02 Indemnified Party 10.03 Indemnifying Party 10.03 Multiemployer Plan 8.03 Novo Nordisk Recitals Novo Nordisk Delivery Technologies, Inc. Recitals Other Consents 3.05 Permits 3.15 Permitted Liens 3.11 Real Property 3.11 Representatives 7.04 Required Consents 3.05 Transferred Development Program Employees 8.01 WARN Act 7.05 Warranty Breach 10.02

SECTION 1.02. Other Definitional And Interpretative Provisions. The words "hereof", "herein" and "hereunder" and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Appendices, Articles, Sections, Exhibits and Schedules are to Appendices, Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation", whether or not they are in fact followed by those words or words of like import. "Writing", "written" and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.

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SECTION 1.03. Knowledge Of Aradigm. References in this Agreement or in any of the other Transaction Agreements to the "knowledge" or "best knowledge" or any similar expression of Aradigm shall be the actual knowledge, after due and diligent inquiry, of the individuals listed on Schedule 1.03.

ARTICLE 2

PRE-CLOSING ACTIVITIES: CLOSING; THE TRANSACTIONS; POST-CLOSING ACTIVITIES

SECTION 2.01. Pre-closing Activities.

(a) Aradigm, Novo Nordisk and Novo Nordisk Delivery Technologies, Inc. agree that, prior to the Closing Date, they will discuss, in good faith, and subject to applicable Competition Laws, the transfer of applicable know-how and the provision of other assistance by Aradigm to Novo Nordisk and its Affiliates for the conduct of the Development Program.

(b) Part I of Annex 1 to Exhibit A to the Asset Purchase Agreement contains the list of equipment, the location thereof, the book value thereof as reflected on the accounting books and records of Aradigm in accordance with GAAP as of the date hereof that would be included in the Purchased Assets if the Closing were to occur on the date hereof, and the Estimated Purchase Price. The Parties agree to update such list periodically (but not less than monthly) during the period from the date hereof until Closing to reflect (i) the addition of equipment purchased by Aradigm for use in the Development Program with the prior written approval of Novo Nordisk, (ii) downward adjustments that may be required under GAAP, including normal depreciation and amortization, to correctly state the book value of such equipment on the accounting books and records of Aradigm as of the date that is three (3) Business Days prior to the Closing Date and (iii) changes otherwise agreed by the Parties. The final version of Annex 1 to Exhibit A to the Asset Purchase Agreement shall be completed by the Parties no later than three (3) Business Days prior to the Closing Date, and shall be used to determine the Purchase Price.

(c) Aradigm shall provide notice to Novo Nordisk Delivery Technologies, Inc. no later than two (2) Business Days prior to the Closing Date regarding the account with a U.S. bank to which Novo Nordisk Delivery Technologies, Inc. shall deliver the Purchase Price on the Closing Date.

SECTION 2.02. Closing. (a) The closing (the "Closing" ) of the Transactions shall take place at the offices of Aradigm, as soon as possible, but in no event later than five (5) Business Days, following the satisfaction or waiver (and notice thereof to the parties) of the conditions precedent set forth in Article 9 below (other than conditions that by their nature are to be satisfied at the Closing and will in fact be satisfied at the Closing), or such other date as the parties shall agree. At the Closing, the transactions described in Section 2.02(b) below shall be deemed to occur simultaneously. The date on which the Closing occurs is referred to as the "Closing Date".

(b) At the Closing, the parties shall execute all of the Transaction Agreements to which such entities are parties that were not previously executed and, to the extent contemplated therein, consummate the Transactions.

SECTION 2.03. Effect of closing. Effective as of the Closing Date, the Manufacturing and Supply Agreement and the Patent Cooperation Agreement shall terminate and be of no further force and effect.

SECTION 2.04. Post-closing Activities.

(a) After the Closing, Aradigm agrees that it will cooperate with and allow Novo Nordisk Delivery Technologies, Inc. reasonable access to any of its personnel who have knowledge of the Development Program such that Novo Nordisk Delivery Technologies, Inc. may, to its reasonable satisfaction, become informed as to the operation, transition and specifications of the Development Program and the Purchased Assets.

(b) At any time after the Closing, each Party may (upon reasonable prior written notice to the other Party) request the ability to copy and/or certify documents that are in the possession of the other Party and that, in the case of a request by Novo Nordisk or Novo Nordisk Delivery Technologies, Inc., relate to the

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Development Program and other AERx development activities, and in the case of a request by Aradigm, relate to its prior conduct of the Development Program or other AERx development activities. Upon receipt of any such notice, the Party possessing such documents shall, subject to applicable Competition Laws and/or confidentiality obligations to third parties, provide the requesting Party with reasonable access to such documents, and the Party making such request shall bear all costs of such copying and/or certification.

(c) Novo Nordisk Delivery Technologies, Inc. agrees to reimburse Aradigm for fifty percent (50%) of the replacement cost to Aradigm of purchasing the equipment listed on Schedule 2.04(c).

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF ARADIGM

Aradigm represents and warrants to Novo Nordisk and Novo Nordisk Delivery Technologies, Inc. as of the date hereof and as of the Closing Date that:

SECTION 3.01. Corporate Existence and Power. Aradigm is a corporation duly incorporated, validly existing and in good standing under the laws of the State of California and has all corporate powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted. Aradigm has heretofore delivered to Novo Nordisk true and complete copies of the certificate of incorporation and bylaws of Aradigm as currently in effect.

SECTION 3.02. Corporate Authorization. The execution, delivery and performance by Aradigm of the Transaction Agreements and the consummation of the Transactions are within Aradigm's corporate powers and, except for the Required Shareholder Approvals, have been duly authorized by all necessary corporate action on the part of Aradigm. This Agreement constitutes, and when executed each other Transaction Agreement will constitute, a valid and binding ...