IN EFFECT AS OF THE EFFECTIVE DATE, GSK SHALL NOT BE REQUIRED TO
WITHHOLD ANY TAXES FROM THE WITHHOLDING-FREE PAYMENTS PAYABLE TO REGULUS UNDER
THIS AGREEMENT.
CONSEQUENTLY, GSK AGREES NOT TO WITHHOLD ANY TAXES FROM PAYMENT
OF THE WITHHOLDING-FREE PAYMENTS HEREUNDER.
ANY TAX PAID OR REQUIRED TO BE
WITHHELD BY GSK FOR THE BENEFIT OF REGULUS ON ACCOUNT OF ANY ROYALTIES OR OTHER
PAYMENTS (OTHER THAN THE WITHHOLDING-FREE PAYMENTS) PAYABLE TO REGULUS UNDER
THIS AGREEMENT SHALL BE DEDUCTED FROM THE AMOUNT OF ROYALTIES OR OTHER PAYMENTS
OTHERWISE DUE.
GSK SHALL SECURE AND SEND TO REGULUS PROOF OF ANY SUCH TAXES
WITHHELD AND PAID BY GSK FOR THE BENEFIT OF REGULUS, AND SHALL, AT REGULUS'
REQUEST, PROVIDE REASONABLE ASSISTANCE TO REGULUS IN RECOVERING SUCH TAXES.
REGULUS WARRANTS THAT REGULUS IS A DELAWARE CORPORATION AS OF THE EFFECTIVE DATE
AND, PRIOR TO THE PAYMENT OF ROYALTIES BY GSK HEREUNDER, SHALL BE A RESIDENT FOR
TAX PURPOSES IN THE US AND THAT, AS OF SUCH TIME, REGULUS SHALL BE ENTITLED TO
RELIEF FROM UNITED KINGDOM INCOME TAX UNDER THE TERMS OF THE DOUBLE TAX
AGREEMENT BETWEEN THE UK AND THE US.
REGULUS SHALL NOTIFY GSK IMMEDIATELY IN
WRITING IN THE EVENT THAT REGULUS CEASES TO BE ENTITLED TO SUCH RELIEF. PENDING
RECEIPT OF FORMAL CERTIFICATION FROM THE UK INLAND REVENUE, GSK MAY PAY ROYALTY
INCOME AND ANY OTHER PAYMENTS (OTHER THAN THE WITHHOLDING-FREE PAYMENTS) UNDER
THIS AGREEMENT TO REGULUS BY DEDUCTING TAX AT THE APPLICABLE RATE SPECIFIED IN
THE DOUBLE TAX TREATY BETWEEN THE UK AND US.
REGULUS AGREES TO INDEMNIFY AND
HOLD HARMLESS GSK AGAINST ANY LOSS, DAMAGE, EXPENSE OR LIABILITY ARISING IN ANY
WAY FROM A BREACH OF THE ABOVE WARRANTIES OR ANY FUTURE CLAIM BY A UK TAX
AUTHORITY OR OTHER SIMILAR BODY ALLEGING THAT GSK WAS NOT ENTITLED TO DEDUCT
WITHHOLDING TAX ON SUCH PAYMENTS AT SOURCE AT THE TREATY RATE, EXCEPT THAT
REGULUS' INDEMNIFICATION OBLIGATION UNDER THIS SECTION 5.11.2 SHALL NOT APPLY TO
GSK'S PAYMENT OF THE WITHHOLDING-FREE PAYMENTS.
REGULUS SHALL TIMELY COMPLETE
ALL US AND UK TAX FORMS AS REASONABLY REQUESTED BY GSK WITH RESPECT TO TAXES
WITHHELD PURSUANT TO THIS SECTION 5.11.2.
NOTWITHSTANDING THE FOREGOING, IF UK
TAX LAW
11
CHANGES AFTER THE EFFECTIVE DATE AND GSK HAS A GOOD FAITH BELIEF
THAT SUCH
CHANGE REQUIRES GSK TO WITHHOLD TAXES FROM ANY WITHHOLDING-FREE PAYMENT, THEN
GSK WILL FIRST NOTIFY REGULUS IN WRITING THEREOF, AND GSK MAY WITHHOLD TAXES
FROM THE WITHHOLDING-FREE PAYMENTS THAT GSK REASONABLY BELIEVES IS NECESSARY TO
COMPLY WITH THE NEW UK TAX LAW, CONSISTENTLY APPLIED BY GSK TO SIMILARLY
SITUATED LICENSING ARRANGEMENTS.
ARTICLE 6
OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT PROSECUTION
6.1
OWNERSHIP.
THE DETERMINATION OF INVENTORSHIP SHALL BE MADE IN
ACCORDANCE WITH UNITED STATES PATENT LAWS.
6.2
PROSECUTION AND MAINTENANCE OF PATENTS.
6.2.1
REGULUS PATENTS.
AT REGULUS' EXPENSE, REGULUS SHALL (BUT SHALL NOT
BE OBLIGATED TO) CONTROL AND BE RESPONSIBLE FOR ALL ASPECTS OF THE PROSECUTION,
MAINTENANCE, ENFORCEMENT AND DEFENSE OF ALL REGULUS PATENTS.
6.2.2
DUTY TO NOTIFY OF COMPETITIVE INFRINGEMENT.