The LLC entered into a MSA with CGM effective May 16, 2006, as amended. Our Chief Executive Officer is a partner of CGM. The MSA provides for, among other things, CGM to perform services for the LLC in exchange for a management fee paid quarterly and equal to 0.5% of the LLC’s adjusted net assets, as defined in the MSA. The management fee is required to be paid prior to the payment of any distributions to shareholders.

Pursuant to the MSA, CGM is entitled to enter into off-setting management service agreements with each of the operating segments. The amount of the fee is negotiated between CGM and the operating management of each segment and is based upon the value of the services to be provided. The fees paid directly to CGM by the segments offset on a dollar for dollar basis the amount due CGM by the LLC under the MSA.

During 2022, CGM entered into a waiver of the MSA for the period through June 30, 2023 to receive a 1% annual management fee related to PrimaLoft, rather than the 2% called for under the MSA, which resulted in a lower management fee at September 30, 2022 and December 31, 2022 than would normally have been due. At March 31, 2022 and June 30, 2022, CGM entered into a waiver to exclude cash balances held at the LLC from the calculation of the management fee.

During 2021, CGM entered into a waiver of the MSA for a period through December 31, 2021 to receive a 1% annual management fee related to BOA, rather than the 2% called for under the MSA, which resulted in a lower management fee paid during 2021 than would have normally been due. In the first quarter of 2021, the LLC and CGM entered into a waiver agreement whereby CGM agreed to waive the portion of the management fee related to the amount of the proceeds deposited with the Trustee that was in excess of the amount payable related to the

2026 Senior Notes at March 31, 2021. Additionally, CGM entered into a waiver of the MSA at December 31, 2021 to exclude the cash balances held at the LLC from the calculation of the management fee.

In March 2020, as a proactive measure to provide the LLC with additional cash liquidity in light of the COVID-19 pandemic, the LLC elected to draw down $200 million on our 2018 Revolving Credit Facility. The LLC and CGM entered into a waiver agreement whereby CGM agreed to waive the portion of the management fee attributable to the cash balances held at the LLC as of March 31, 2020. In addition, due to the unprecedented uncertainty as a result of the COVID-19 pandemic, CGM agreed to waive 50% of the management fee calculated at June 30, 2020 that was paid in July 2020. Further, for the third quarter of 2020, the LLC and CGM entered into a waiver agreement whereby CGM agreed to waive the portion of the management fee attributable to the cash balances held at the LLC as of September 30, 2020.

The LLC paid CGM $0.4 million and $0.1 million, respectively, in the years ended December 31, 2021 and 2020, representing the management fee due from Arnold for the fourth quarter of 2020 and the first three quarters of 2021. At December 31, 2021, Arnold reimbursed the LLC for the management fee paid on their behalf.


	Year ended December 31,
(in thousands)	2022		2021		2020

5.11	$	1,000	$	1,000	$	1,000
BOA	1,000		1,000		250
Ergobaby	500		500		500
Lugano	750		188		N/a
Marucci	500		500		347
PrimaLoft	500		N/a		N/a
Velocity	500		500		500
Advanced Circuits	500		500		500
Altor Solutions	750		750		750
Arnold	500		500		500
Sterno	500		500		500
Corporate	56,604		41,505		29,402
	$	63,604	$	47,443	$	34,249

Approximately $15.7 million and $11.8 million of the management fees incurred were unpaid as of December 31, 2022 and 2021, respectively, and are reflected in "Due to related party" on the consolidated balance sheets.

The LLC agreement gives Holders the right to distributions pursuant to a profit allocation formula upon the occurrence of a Sale Event or a Holding Event. The Holders are entitled to receive and as such can elect to receive the positive contribution-based profit allocation payment for each of the business acquisitions during the 30-day period following the fifth anniversary of the date upon which we acquired a controlling interest in that business (Holding Event) and upon the sale of the business (Sale Event). Holders received $34.1 million and $9.1 million in distributions related to Sale and Holding Events that occurred during 2021 and 2020, respectively. Refer to "Note K - Stockholders' Equity" for a description of the profit allocation payments.

Certain persons who are employees and partners of the Manager, including the Company’s Chief Executive Officer, beneficially own (through Sostratus LLC) 62.0% of the Allocation Interests at December 31, 2022 and 57.8% at December 31, 2021. Of the remaining 38.0% at December 31, 2022 and 42.2% at December 31, 2021, 5.0% is held by CGI Diversified Holdings LP, 5.0% is held by a Director on the Company’s Board of Directors, and the remaining percentage of Allocation Interests are held by the former founding partners of the Manager.

Integration services represent fees paid by newly acquired companies to the Manager for integration services performed during the first year of ownership. Under the Integration Services Agreement ("ISA"), CGM provides services for new platform acquisitions to, amongst other things, assist the management at the acquired entities in establishing a corporate governance program, implement compliance and reporting requirements of the Sarbanes-Oxley Act of 2002, as amended, and align the acquired entity's policies and procedures with our other subsidiaries.

PrimaLoft, which was acquired in July 2022, entered into an ISA with CGM whereby PrimaLoft will pay CGM a total integration services fee of $4.8 million, payable quarterly over a twelve-month period ended June 30, 2023.

Lugano, which was acquired in September 2021, entered into an ISA with CGM whereby Lugano will pay CGM a total integration services fee of $2.3 million, payable quarterly over a twelve month period as services are rendered, beginning in the quarter ended December 31, 2021.

BOA, which was acquired in October 2020 and Marucci Sports, which was acquired in April 2020, each entered into an ISA with CGM. Each ISA was for the twelve month period subsequent to the acquisition and was payable quarterly. BOA paid CGM a total of $4.4 million under the ISA, beginning in the quarter ended December 31, 2020. Marucci paid CGM a total of $2.0 million in integration services fees, beginning in the quarter ended September 30, 2020.

During the years ended December 31, 2022, 2021 and 2020, CGM received $4.1 million, $4.9 million, and $2.1 million, respectively, in total integration service fees. Integration service fees are included in selling, general and administrative expense on the subsidiaries' statement of operations in the period in which they are incurred.

The Company reimbursed its Manager, CGM, approximately $6.5 million, $5.4 million, and $5.2 million, principally for occupancy and staffing costs incurred by CGM on the Company’s behalf during the years ended December 31, 2022, 2021 and 2020, respectively.

Recapitalization - In August 2021, the Company completed a recapitalization of 5.11 whereby the LLC entered into an amendment to the intercompany loan agreement with 5.11 (the "5.11 Loan Agreement"). The 5.11 Loan Agreement was amended to provide for additional term loan borrowings of $55.0 million to fund a distribution to shareholders. The LLC owned 97.7% of the outstanding shares of 5.11 on the date of the distribution and received $53.7 million. The remaining amount of the distribution went to minority shareholders.

Related Party Vendor Purchases - 5.11 purchases inventory from a vendor who is a related party to 5.11 through one of the executive officers of 5.11 via the executive's 40% ownership interest in the vendor. During the years ended December 31, 2022, 2021 and 2020, 5.11 purchased approximately $2.0 million, $1.1 million, and $2.7 million, respectively, in inventory from the vendor.

Repurchase of Noncontrolling Interest - In September 2021, BOA repurchased shares of its issued and outstanding common shares from its largest minority shareholder for a total payment of $48.0 million, which BOA financed by borrowing under their intercompany credit facility with the LLC (the "BOA Credit Agreement"). The BOA Credit Agreement was amended to (i) provide for additional term loan borrowings of $38.0 million, and (ii) consent to the repurchase of the shares from the minority shareholder. The transaction was accounted for in accordance with ASC 810 - Consolidation, whereby the carrying amount of the noncontrolling interest was adjusted to reflect the change in the ownership interest in BOA that occurred as a result of the share repurchase. The difference between the fair value of the consideration paid of $48.0 million and the amount by which the noncontrolling interest was adjusted of $39.4 million was recognized in equity attributable to the LLC.

Related Party Vendor Purchases - A contract manufacturer used by BOA as the primary supplier of molded injection parts is a noncontrolling shareholder of BOA. During the years ended December 31, 2022 and 2021 and for the period from October 16, 2020 (date of acquisition) through December 31, 2020, BOA purchased approximately $56.1 million, $48.3 million and $6.7 million, respectively, from this supplier.