Company: LGN
Filing Date: 2025-05-14
Form Type: DRS/A
Source: 0000950123-25-005247
Chunk: 66

Company: Legence Corp.
Filing Date: 2025-05-14
Form: DRS/A
Chunk 66
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 project properly. If the project does not perform, the reconciliation
of these variables and their effect on the performance can be disputed, presenting certain legal and financial risks. Further, variations in energy prices can alter a client’s baseline energy usage, potentially limiting savings from efficiency
measures, reducing project scope, or affecting the client’s perceived savings achieved through energy efficiency measures, each of which may lead to legal disputes or financial challenges and impact our reputation and ability to secure future
projects.

We rely in part on warranties from our equipment suppliers and subcontractors to back-stop the warranties we provide to our
customers under ESPCs and, where appropriate, pass on the warranties to our customers. However, the warranties we provide to our customers are sometimes broader in scope or longer in duration than the corresponding warranties we receive from our
suppliers and subcontractors, and we may bear the risk for any differences, as well as the risk of warranty default by our suppliers and subcontractors.

ESPCs are long-term contractual agreements that may carry a heightened risks of liabilities or expenses in the future, which we may not be
able to predict. Such liabilities or expenses could be substantial, and they could materially harm our business, financial condition and results of operations.

41

Confidential Treatment Requested by Legence Corp.

Pursuant to 17 C.F.R. Section 200.83

Despite our current indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks associated with our leverage.

Under the terms of the Credit
Agreement, Legence Holdings and its subsidiaries may be able to incur substantial additional indebtedness in the future. Subject to certain conditions, Legence Holdings may incur additional indebtedness in the form of term loans or revolving loans
in an aggregate principal amount equal to the sum of (x) the greater of $68.0 million and 100% of the company’s most recently reported last-twelve-month EBITDA (calculated in accordance with the Credit Agreement), (y) the aggregate amount of
certain voluntary prepayments and permanent commitment reductions of other indebtedness of Legence Holdings and its subsidiaries and (z) additional unlimited amounts, subject to compliance with the following leverage ratios: (i) for debt
secured on a pari passu basis with the obligations under the Credit Agreement, a first lien net leverage ratio no greater than 5.25x, (ii) for debt secured on a junior-priority basis to the obligations under the Credit Agreement