BH3 Fund Advisors LLC

Item 5: Fees and Compensation

The following is a general description of the fees, compensation, and other expenses received by BH3 in
connection with advisory services the Firm provides to the Funds. Each Fund’s Governing Documents will
generally describe fees, compensation, and expenses in greater detail; this summary is qualified in its
entirety by reference to the applicable Governing Documents. Investors should refer to such Governing
Documents of the applicable Fund for a complete understanding of how BH3 is compensated for its
advisory services.

Management Fees
BH3 generally receives a management fee (the “Management Fee”) from each Fund in consideration for
providing investment advisory, sourcing, acquisition, asset management, monitoring, disposition and
related services. The manner in which the Management Fee is calculated varies among the Funds as is
outlined in each Fund’s respective Governing Documents.
In the case of the BH3 Debt Funds, the Management Fee is generally charged at an annual rate of up to
approximately 1.5% and is typically calculated as a percentage of an investor’s contributed capital,
committed capital or a combination thereof, as specified in the applicable Governing Documents. In certain
Debt Funds, the Management Fee is based solely on contributed capital, which refers to capital
contributions made by the investor, while in other Debt Funds the Management Fee is calculated based on
a combination of funded capital and unfunded commitments, with different rates applied to each
component. “Committed capital” generally refers to the total amount an investor has agreed to contribute
to a Fund, whether or not such capital has been funded.
In the case of the BH3 Signage Funds, the Management Fee is typically calculated as a percentage of an
investor’s committed capital during the investment period and thereafter based on contributed capital,
invested capital, net invested capital, or a similar measure of deployed capital; in certain cases, the
Management Fee may be calculated based on a combination of committed capital and contributed or
invested capital, in each case as specified in the applicable Governing Documents. Management Fees are
generally charged at an annual rate of up to approximately 2.0%, although the applicable rate may vary by
Fund and investor. In certain Signage Funds, Management Fees may alternatively be structured based on
the operating performance of underlying investments or portfolio companies, including fees of up to
approximately 6.0% of gross revenues generated by such operating entities, payable to BH3 or its affiliates
for management services.
Management Fees are typically charged quarterly in arrears directly to the applicable Fund or allocated to
investors’ capital accounts, and may be paid from Fund assets, operating revenues of portfolio investments,
or funded through capital contributions, in each case as provided in the applicable Governing Documents.
Some Funds may charge fees on a more infrequent basis or in advance, subject to requirements listed under
the applicable Fund’s Governing Documents. The calculation of the Management Fee may include step-
downs following the investment period, exclusions for certain assets, and offsets or reductions for specified
fees received by BH3 or its affiliates. In certain circumstances, Management Fees may continue for a
specified period following the termination of BH3 or the dissolution of a Fund. BH3 or its affiliates may,
in their sole discretion, waive, reduce or otherwise modify the Management Fee for certain investors,
including pursuant to side letters or other arrangements, and as a result, similarly situated investors may
pay different Management Fees.

BH3 or its affiliates, including the General Partner or Managing Member of a Fund, are generally entitled
to receive performance-based compensation, which may take different forms depending on the Fund. In the
case of the BH3 Debt Funds, performance-based compensation may include income-based incentive fees,
profit participation, or carried interest allocations based on the performance of underlying investments,
including interest income or realized gains. In the case of the BH3 Signage Funds, such compensation is
typically structured as a carried interest or promote determined pursuant to a distribution waterfall. The
specific mechanics of such performance-based compensation, including preferred returns, catch-up
provisions and allocation percentages, are set forth in the applicable Governing Documents. Please refer to
Item 6: Performance Fees and Side-By-Side Management of this Brochure for more information pertaining
to performance-based fees BH3 may receive.
Other Fees & Expenses
In addition to Management Fees and performance-based compensation, BH3 and its affiliates may receive
additional compensation in connection with the activities of the Funds and their portfolio investments, to
the extent permitted by the applicable Governing Documents.
In the case of the BH3 Debt Funds, such additional compensation may include, without limitation,
acquisition or origination fees, commitment fees, structuring fees, servicing or monitoring fees, extension
or modification fees, exit fees, restructuring or workout fees, development or construction management
fees, asset, property or signage management fees, leasing or brokerage commissions, and other similar fees
customarily associated with the origination, management, financing, operation or disposition of
investments. Many of these fees are borne by, and paid directly or indirectly by, borrowers or other
counterparties in connection with underlying loan investments, rather than by the Funds themselves. Certain
fees received in connection with loan investments, including origination, commitment, servicing and
restructuring fees, may be retained by BH3 or its affiliates up to specified thresholds, with any excess
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Item 7: Types of Clients

BH3 provides investment advisory services to private funds, which are its only Clients. Interest in the Funds
are offered privately in accordance with exemption provisions provided generally under the Investment
Company Act of 1940, Investment Advisers Act of 1940, and the Securities Act of 1933 to a limited number
of sophisticated investors, including institutional investors (which may include but are not limited to public
and private pension funds) and individuals who qualify to invest in the Funds because they have sufficient
income and/or net worth.

BH3 typically requires a minimum commitment of $1,000,000 to enter its Funds. This typical minimum
investment may be waived by BH3 and its affiliates in their sole discretion. Each Fund’s minimum capital
commitment and investor qualification requirements are also set forth in each Fund’s Governing
Documents.