Business Context and Reporting Period
Company: LiveWire Group, Inc. (LVWR)
Filing Type: Form 8-K (Current Report)
Date of Report: December 23, 2024
Event: Entry into a Material Agreement with Harley-Davidson, Inc. (H-D).
Key Financial Metrics
This filing does not contain revenue, profit, cash flow, margin, debt, or liquidity figures. The document focuses exclusively on the terms of a new contractual agreement.
Material Changes and Agreement Details
On December 23, 2024, LiveWire entered into a new Master Services Agreement (MSA) with Harley-Davidson, Inc., effective January 1, 2025. This agreement supersedes the prior MSA dated September 22, 2022.
- Scope of Services: H-D will provide outsourced services including testing and development, regulatory support, engineering, supply chain management, HR, finance, marketing, and warranty analytics.
- Term: Initial term of seven years, renewable upon mutual agreement.
- Termination Rights:
- Either party may terminate for material, uncured breach.
- H-D may terminate upon a change of control at LiveWire.
- H-D may terminate with 180 days' notice at the end of a calendar year if LiveWire fails to engage H-D to manufacture at least 40% of its production during that year.
- Compensation: Services are charged at a flat monthly fee, adjustable annually via a joint steering committee.
- Intellectual Property: LiveWire owns IP created by H-D under the agreement (excluding H-D's background IP). LiveWire receives a non-exclusive, royalty-free license to use H-D's background IP.
Guidance, Risks, and Contingencies
Management Commentary: LiveWire determined that the listed services would be better outsourced at this time.
Risks and Contingencies:
- Production Dependency: The agreement includes a termination clause if LiveWire does not utilize H-D for at least 40% of its production, creating a potential risk to the continuity of services if production targets are missed.
- Liability Caps: Aggregate liability for either party is generally capped at the total fees paid in the preceding 12-month period, except for fraud, gross negligence, willful misconduct, or indemnification claims.
- Remedies: For failure to meet acceptance criteria, H-D's sole remedy is re-performance or a refund after three correction attempts.
Investor Verification Checklist
- Verify the specific flat monthly fee amount and any escalation clauses in the full text of Exhibit 10.1 (Master Services Agreement).
- Confirm LiveWire's current production volume and manufacturing strategy to assess the risk of triggering the 40% production threshold termination clause.
- Review the definition of "background intellectual property" to understand the scope of H-D's retained rights.
- Monitor future filings for any side letters or letter agreements that may modify the scope or fees of the MSA.