Company: LGN
Filing Date: 2025-04-30
Form Type: DRS/A
Source: 0000950123-25-003868
Chunk: 86

Company: Legence Corp.
Filing Date: 2025-04-30
Form: DRS/A
Chunk 86
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 be significantly in advance of, and could materially exceed, the realized future tax benefits to which the payment relates. This payment obligation could
(i) make us a

51

Confidential Treatment Requested by Legence Corp.

Pursuant to 17 C.F.R. Section 200.83

less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the tax benefits that are the subject of the Tax Receivable Agreement and
(ii) result in holders of our Class A Common Stock receiving substantially less consideration in connection with a change of control transaction than they would receive in the absence of such obligation. Accordingly, the TRA Members’
interests may conflict with those of the holders of our Class A Common Stock.

If 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 certain changes to the composition of the
Legence board of directors), we could be required to make payments under the Tax Receivable Agreement that exceed our actual cash tax savings under the Tax Receivable Agreement. Consequently, our obligations under the Tax Receivable Agreement could
have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations or other changes of control. For example, assuming no material
changes in the relevant tax law, we expect that if we experienced a change of control or the Tax Receivable Agreement were terminated immediately after this offering, the estimated lump-sum payment to the TRA
Members would be approximately $ (calculated using a discount rate equal to a per annum rate of basis points, applied against an undiscounted liability of approximately $
million). There can be no assurance that we will be able to finance our obligations under the Tax Receivable Agreement. We may need to cause Legence Holdings to incur debt and make distributions to the holders of LGN Units, including us and the
Pubco Subsidiaries, to finance payments under the Tax Receivable Agreement to the extent our cash resources are insufficient to meet our obligations under the Tax Receivable Agreement as a result of timing discrepancies or otherwise.

We will not be reimbursed for any payments made under the Tax Receivable Agreement in the event that any tax benefits are subsequently disallowed.

Payments under the Tax Receivable Agreement will be based on the tax reporting positions