Company: LGN
Filing Date: 2025-08-15
Form Type: S-1
Source: 0001193125-25-181698
Chunk: 150

Company: Legence Corp.
Filing Date: 2025-08-15
Form: S-1
Chunk 150
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 the consummation of a Qualified IPO (as defined in the Credit Agreement), the margin for term loans and revolving credit loans and the fee rate on letters of credit will automatically be reduced by 0.25%.

The Credit Agreement contains a springing financial maintenance covenant that requires the First Lien Net Leverage Ratio not to exceed 8.50 to
1.00. The Credit Agreement generally defines this as the ratio of first lien secured indebtedness (net of cash) to consolidated pro forma adjusted EBITDA for the preceding four fiscal quarters. The springing financial maintenance covenant is only
tested if, as of the last day of each fiscal quarter, the amount of loans and/or letters of credit outstanding under the Revolving Credit Facility is greater than 35% of the aggregate revolving credit commitments. The total revolving credit
commitments have remained $90.0 million since August 5, 2021, and the Company has never been required to test the springing financial maintenance covenant.

The Credit Agreement includes customary covenants restricting the ability of Legence Holdings and its subsidiaries to, among other things,
incur additional indebtedness, sell or convey assets, make loans to or investments in others, enter into mergers, incur liens and pay dividends or distributions.

Other Notes Payable

The Company holds
various other promissory notes payable in connection with certain acquisitions. These notes payable comprise a small portion of our outstanding indebtedness. Please refer to “Note 9—Debt” in the Notes of Consolidated Financial
Statements for further information.

Tax Receivable Agreement

In connection with the consummation of this offering, we will enter into a Tax Receivable Agreement with the TRA Members. This agreement
generally provides for the payment by us to the TRA Members of 85% of the net cash savings, if any, in U.S. federal, state and local income tax that we (a) actually realize with respect to taxable periods ending after this offering or
(b) are deemed to realize in the event the Tax Receivable Agreement terminates early at our election, as a result of our breach or upon a change of control (as defined under the Tax Receivable Agreement, which includes certain mergers, asset
sales and other forms of business combinations and

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certain changes to the composition of our board of directors) with respect to any taxable periods ending on or after such early termination event, in each case, as a result of (i) our allocable share of existing