Company: LGN
Filing Date: 2025-04-30
Form Type: DRS/A
Source: 0000950123-25-003868
Chunk: 146

Company: Legence Corp.
Filing Date: 2025-04-30
Form: DRS/A
Chunk 146
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 forms of business combinations and 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 tax basis acquired in connection with this offering and increases to such allocable share of
existing tax basis; (ii) our utilization of certain tax attributes of the Blocker Entities; (iii) Basis Adjustments; and (iv) certain additional tax benefits arising from payments made under the Tax Receivable Agreement. We will
retain the benefit of the remaining 15% of these cash savings, if any. If the Tax Receivable Agreement terminates early, we could be required to make a substantial, immediate lump-sum payment.

We expect that the payments that we will be required to make under the Tax Receivable Agreement could be substantial. The exact amount of
expected future payments under the Tax Receivable Agreement is dependent upon a number of factors, including the Company’s cash tax savings, the timing of exercises of the Exchange Right, the enacted tax rate in the years in which it utilizes
tax attributes subject to the Tax Receivable Agreement, and current taxable income forecasts. These estimated rates and forecasts are subject to change based on actual results and realizations, which could have a material impact on the liability to
be paid. Due to the uncertainty of these factors, we cannot precisely quantify the likely tax benefits we will realize. Any payments made by us to the TRA Members under the Tax Receivable Agreement will not be available for reinvestment in Legence
Holdings (or indirectly, its business) and generally will reduce the amount of overall cash flow that might have otherwise been available to us. We expect to fund the required payments under the Tax Receivable Agreement with our actual cash tax
savings generated by the exchanges of LGN Units in the UP-C structure. Our ability to satisfy our long-term liquidity requirements depends on our future operating performance, which is affected by and subject to prevailing economic conditions,
market conditions in our industry and financial, business and other factors that we will not be able to predict or control.

The term of
the Tax Receivable Agreement will commence upon the completion of this offering and will continue until all such tax benefits have been utilized or expired and all required payments are made, unless we exercise our right to terminate the Tax
Receivable Agreement (or the Tax Receivable Agreement is terminated due to other circumstances, including our breach of a material obligation thereunder or certain mergers or