ventures, contractual rights or obligations of the Company or Parent or their respective affiliates, and (z) taking or committing to take any action that would limit Parent’s freedom of action with respect to, or its ability to retain or hold, directly or indirectly, any businesses, assets, equity interests, product lines or properties of Parent or the Company (including any of their respective affiliates) (each, a “Regulatory Remedy”), in each case, if such Regulatory Remedy should be reasonably necessary, proper, or advisable, so as to permit the consummation of the Merger to occur under applicable competition or investment laws no later than the Termination Date, as extended, if applicable. The Company, however, will not propose, negotiate, effect or agree to any such actions without the prior written consent of Parent. The “reasonable best efforts” standard will not require, nor be construed to require, Parent to waive any of the closing conditions as they apply to Parent, or Parent or any of its subsidiaries or affiliates to propose, negotiate, commit to, effect, agree to, or otherwise take or commit to take any action that constitutes or would reasonably be expected to result in a Burdensome Condition. In addition, Parent agrees to use reasonable best efforts to contest and resist any such action or proceeding and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the Transactions.
“Burdensome Condition” means any Regulatory Remedy that, individually or in the aggregate with any other Regulatory Remedy, would reasonably be expected to (i) substantially and materially impair the benefits expected by Parent, as of the date of the Merger Agreement, to be realized from the consummation of the Merger or (ii) have more than an immaterial impact on Parent or any of its subsidiaries (other than, following the Effective Time, Meritor or any of its subsidiaries) or any of the assets, licenses, product lines, operations or businesses of Parent or any of its subsidiaries in existence as of the date of the Merger Agreement (other than, following the Effective Time, Meritor or any of its subsidiaries).
Indemnification and Insurance
From and after the Effective Time, Parent shall cause the surviving corporation to, to the full extent permitted under applicable law and consistent with the rights and obligations set forth in the Company’s articles of incorporation and bylaws, (i) indemnify and hold harmless each present and former (or future, but prior to the Effective Time), director, officer employee or agent of Meritor or any of its subsidiaries and any person who is, presently or formerly (or will be prior to the Effective Time), serving at the request of the Company or any of its subsidiaries as a director, officer, employee, agent, partner, trustee or in another authorized capacity of or for another corporation, unincorporated association, business trust, estate, partnership, joint venture, individual trust, employee benefit plan or other legal entity, whether or not organized or formed for profit (collectively, the “Covered Persons”) in connection with any “D&O Claim” (as defined in the Merger Agreement), any losses, claims, damages, liabilities, claim expenses, judgments, fines, penalties and amounts paid in settlement relating to or resulting from such D&O Claim and (ii) promptly advance claim expenses as incurred by the Covered Persons in connection with any D&O Claim, provided that any Covered Person to whom expenses are advanced provides an undertaking to repay the advance if it is ultimately determined that such Covered Person is not entitled to indemnification from the surviving corporation.
In addition, prior to the Effective Time, Meritor will obtain, and prepay the premium for, a six year “tail” insurance policy for D&O Claims arising from facts, acts, events or omissions that occurred on or prior to the Effective Time. Any such tail policy must have at least the same coverage and amounts and contain terms and conditions that are no less favorable to the covered individuals as the Company’s and its subsidiaries’ existing directors’ and officers’ insurance policy with a claims period of six years from the Effective Time. Notwithstanding the foregoing, in no event will such tail policy have a total premium amount greater than 275% of the annual premium most recently paid by the Company for its existing directors’ and officers’ insurance policy as of the date of the Merger Agreement (such amount, the “Maximum Annual Premium”). If such tail policy is not reasonably available or the premium of such tail policy exceeds the Maximum Annual Premium, the Company will obtain a tail policy with the greatest coverage available for a total premium not exceeding the Maximum Annual Premium. If the Company fails to obtain such tail policy prior to the Effective Time, Parent or the surviving corporation will obtain such a tail policy.
Coordination on Transaction Litigation
Meritor has agreed to provide Parent with prompt notice (and in any event within 48 hours) of, and keep Parent informed on a reasonably prompt basis of the status of, any transaction litigation or books and records demand brought by any shareholder or purported shareholder of the Company against the Company, its