Company: LGN
Filing Date: 2025-07-15
Form Type: DRS/A
Source: 0000950123-25-006399
Chunk: 83

Company: Legence Corp.
Filing Date: 2025-07-15
Form: DRS/A
Chunk 83
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 claim, and the amounts of such payments could be significant.

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 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. “Certain Relationships and Related
Party Transactions—Tax Receivable Agreement” contains more information.

The payment obligations under the Tax Receivable
Agreement are our obligations and not obligations of Legence Holdings. For purposes of the Tax Receivable Agreement, cash savings in tax generally are calculated by comparing our actual tax liability to the amount we would have been required to pay
had we not been able to utilize any of the tax benefits subject to the Tax Receivable Agreement. The amounts payable, as well as the timing of any payments, under the Tax Receivable Agreement are dependent upon future events and assumptions,
including the timing of the exchanges of LGN Units along with surrendering a corresponding number of our Class B Common Stock, the price of our Class A Common Stock at the time of each exchange, the extent to which such exchanges are
taxable transactions, the amount of the exchanging LGN Unit Holder’s tax basis in its LGN Units at the time of the relevant exchange, the depreciation, depletion and amortization periods that apply to the increase in