Masterworks Advisers LLC

Item 5. Fees and Compensation

Adviser charges advisory fees as outlined below. Adviser reserves the right to waive all or some
advisory fees at its sole discretion, and routinely does reduce or waive fees. Adviser is a wholly
owned subsidiary of Masterworks, and Masterworks receives fees and compensation from
Masterworks Issuers that Adviser recommends to advisory Clients, and therefore, Adviser has an
indirect financial incentive to recommend Art Investments to investors and Clients. By virtue of
investing in Single-Asset Issuers, Clients will indirectly pay the underlying fees and expenses
charged by Single-Artwork Issuers, which will diminish returns on investment.

Ongoing Advisory Service Fees

Adviser charges an asset-based Advisory Fee of 0.10% (10 basis points) of Assets Under
Management (“AUM”) per annum for Long-Term Advisory SServices and an asset based Advisory
Fee of up to 0.50% (50 basis points) for Private Client Advisory Services. AUM is determined on the

last business day of each month. The Advisory Fee is accrued monthly and is calculated by
determining the Month-end AUM times the fee rate divided by 12. AUM is based on the aggregate
Net Asset Value (“NAV”) of Client's Art Investments acquired during the term of the Ongoing
advisory relationship and under Adviser’s regular and continuous oversight.

       Fee Payment

       The Advisory Fee accrues monthly from the Effective Date of the Advisory Agreement until
       the advisory relationship is terminated. All accrued fees will survive termination of the
       advisory relationship and are due and payable upon an Art Investment “Liquidating Event”.
       The full accrued fee for each completed month is payable, without interest, at the time of the
       Liquidating Event. If proceeds are insufficient, the unpaid amount will continue to accrue and
       is payable upon subsequent Liquidating Events. The Adviser is authorized to deduct
       accrued fees from Liquidating Event proceeds before distribution to the Client.

       Fee Adjustments

       NAV for AUM calculations is determined by Adviser in good faith, relying on Masterworks'
       Artwork Appraisal Policy. No fee refunds are given for early termination. The Adviser may
       modify the fee with 30 days' written notice and may reduce or waive the fee at its discretion
       with or without prior notice.

Adviser does not currently charge an advisory fee for providing Point-in-Time advice, Secondary
Advice, or services to investment vehicles.

Masterworks Compensation

Adviser is a wholly owned subsidiary of Masterworks which earns compensation based on the
administrative and management services provided to the Single-Artwork Issuers and other art
market activities. Masterworks receives the following amounts from Single-Artwork Issuers in
connection with services provided to the Single-Artwork Issuers:

   ●​ A one-time cash “expense allocation” payment for each Single-Artwork Issuer, equal to 11%
      of the purchase price of the artwork, which translates to approximately 10% of the offering
      size and which covers all costs and expenses relating to financing, sourcing and acquiring
      the artwork, and utilizing the Masterworks Platform and its intellectual property to securitize
      the artwork;
   ●​ An administrative services fee for administering artwork and the securitization vehicle paid in
      the form of preferred equity interests in the securitization vehicle that holds title to the
      artwork in an amount equal to 1.50% per annum of the total equity interests outstanding in
      such securitization vehicle; and
   ●​ A 20% profits interest, if any, which is net of all fees and expenses, upon sale of the artwork.

The Masterworks model incorporates what is known in the financial industry as a “unitary” fee
structure, meaning that in exchange for the above amounts, Masterworks performs all ordinary and
necessary services and pays all costs and expenses associated with sourcing, securitizing and

administering the artwork and organizing and administering the securitization vehicle. Accordingly,
unlike the vast majority of investment vehicles in which the investment entity pays a variety of
organizational, transactional and ongoing operational costs, which are indirectly borne by investors
in the vehicle, Masterworks issuers, and investors do not typically incur any costs or expenses other
than the amounts payable to Masterworks as described above, though Clients may incur advisory
fees as described herein and Masterworks issuers remain obligated to pay any extraordinary or
non-recurring expenses, as well as third-party costs associated with a sale of the artwork.

The services Masterworks provides in connection with the Single-Artwork Issuers and the costs
borne by Masterworks include, without limitation:

    ●​ Sourcing Services - such as market research and analysis, proprietary database
       management, appraisal, transaction sourcing, negotiation and execution, travel, art and
       counterparty and object level due diligence, financing, currency conversion, legal and
       contracting;
    ●​ Securitization Services - such as entity structuring and formation, legal, governance, offering
       materials, regulatory filings and compliance, anti-money laundering, distribution and
       marketing, payment for advisory services; and
    ●​ Administrative Services - such as insurance, professional art storage, transport (if not part of
       acquisition price) and care, SEC filings, audits, appraisals and valuations, tax reporting,
       investor relations services, transfer agent services, banking and paying agent services,
       transactional services in connection with selling the artwork, including the operation of an art
       gallery (though Masterworks may charge a reasonable and customary sales commission or
       fee if it sells artwork without employing a third party intermediary), and liquidating the
...

Item 7. Types of Clients
Adviser provides investment advisory services to individuals, high-net worth individuals, trusts,
estates, and others interested in Art Investments. Clients are primarily sourced through the
Masterworks Platform and through in-person meetings and events. Adviser reserves the right to
decline any investor or Client. Adviser also reserves the right to terminate any advisory relationship
if the size of the relationship impacts its ability to provide investment advice or recommendations.