Sec Form 4 Filing - Grimes D Jeffery @ ARADIGM CORP - 2009-10-14

FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person Grimes D Jeffery 2. Issuer Name and Ticker or Trading Symbol ARADIGM CORP [ ARDM] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner X __ Officer (give title below) _____ Other (specify below) VP Legal Affairs, Secretary (Last) (First) (Middle) 3929 POINT EDEN WAY 3. Date of Earliest Transaction (MM/DD/YY) 10/14/2009 (Street) HAYWARD, CA94545 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (Check Applicable Line) __ X __ Form filed by One Reporting Person _____ Form filed by More than One Reporting Person (City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned 1.Title of Security (Instr. 3) 2. Transaction Date (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 10/14/2009 S 13,803 ( 1 ) D $ 0.183 351,012 ( 2 ) ( 3 ) D Common Stock 01/08/2010 S 6,350 ( 4 ) D $ 0.17 344,662 ( 2 ) D

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities) 1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) 6. Date Exercisable and Expiration Date (MM/DD/YY) 7. Title and Amount of Underlying Securities (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other Grimes D Jeffery 3929 POINT EDEN WAY HAYWARD, CA94545 VP Legal Affairs, Secretary Signatures /s/ Jeffrey Grimes 03/12/2010 Signature of Reporting Person Date

Explanation of Responses:

( 1 )Represents shares sold to cover taxes upon vesting and release of shares issued pursuant to a Restricted Stock Award dated October 11, 2007 which vested in full on October 11, 2009. ( 2 )Amount reported includes shares subject to unvested Restricted Stock Awards. ( 3 )Includes 1 share acquired by the reporting person pursuant to the issuer's Employee Stock Purchase Plan on 9/30/2009 at a prices of $0.12 per share, 62,501 shares acquired by the reporting person pursuant to the issuer's Employee Stock Purchase Plan on 3/31/2009 at a prices of $0.12 per share, and 21,420 shares acquired by the reporting person pursuant to the issuer's Employee Stock Purchase Plan on 9/30/2008 at a prices of $0.33 per share ( 4 )Represents shares sold to cover taxes upon partial vesting and release of a Restricted Stock Award dated January 21, 2009 which vests as to 50% of the shares on January 1, 2010 and 50% of the shares on January 1, 2011

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).

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