Exhibit 10.3

 

FIRST AMENDMENT TO

THIRD AMENDED AND RESTATED ADVISORY AGREEMENT

 

This FIRST AMENDMENT TO THIRD AMENDED AND RESTATED ADVISORY AGREEMENT is entered
into as of July 19, 2018, by and among American Finance Trust, Inc. (f/k/a
American Realty Capital Trust V, Inc.) (the “Company”), American Finance
Operating Partnership, L.P. (f/k/a American Realty Capital Operating Partnership
V, L.P.) (the “Operating Partnership”) and American Finance Advisors, LLC (f/k/a
American Realty Capital Advisors V, LLC) (the “Advisor”).

 

RECITALS

 

WHEREAS, the Company, the Operating Partnership and the Advisor entered into
that certain Third Amended and Restated Advisory Agreement, dated as of
September 6, 2016 (as may be amended, modified or supplemented from time to
time, the “Advisory Agreement”);

 

WHEREAS, the Nominating and Corporate Governance Committee (the “NGC”) of the
Board of Directors (the “Board”) of the Company reviewed the the implementation
of the Company’s current Board-approved business strategy of a diversified net
lease portfolio with a retail focus (the “Current Strategy”), which differs
substantially from the proposed hybrid mortgage and net lease focus at the time
the Second Amended and Restated Advisory Agreement was executed in 2015;

 

WHEREAS, upon completion of its review of the implementation Current Strategy,
the NGC recommended to the Board that the Company amend certain provisions of
the Advisory agreement in order to further align the Advisor with the Company’s
shareholders by incentiviging growth through the continued implementation of the
Current Strategy; and

 

WHEREAS, based on the recommendation of the NGC and the approval of the Board,
the Company, the Operating Partnership and the Advisor desire to make certain
amendments to the Advisory Agreement.

 

NOW, THEREFORE, in consideration of the premises made hereunder, and for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:

 

1.Amendment to Section 1 of the Advisory Agreement. The definition of “Adjusted
Outstanding Shares” set forth in Section 1 of the Advisory Agreement is hereby
replaced in its entirety with the following:

 

““Adjusted Outstanding Shares” means, for the applicable period, the diluted
weighted-average shares of Common Stock outstanding computed in accordance with
GAAP during such period, excluding any equity based awards that are subject to
performance metrics that are not currently achieved.”

 

2.Amendment to Section 10(f) of the Advisory Agreement. Section 10(f) of the
Advisory Agreement is hereby replaced in its entirety with the following:

 

“(f) Variable Management Fee. The Company shall pay the Advisor a Variable
Management Fee, payable quarterly in arrears, in an amount equal to (i) the
product of (A) the Adjusted Outstanding Shares for the calendar quarter
multiplied by (B) 15% multiplied by (C) the excess of Core Earnings Per Adjusted
Share for the previous 3-month period over $0.275, plus (ii) the product of (X)
the Adjusted Outstanding Shares for the calendar quarter multiplied by (Y) 10%
multiplied by (Z) the excess of Core Earnings Per Adjusted Share for the
previous 3-month period over $0.3125.”

 

 

 

 

3.Miscellaneous. Except as expressly modified by this Amendment, the terms,
covenants and conditions of the Advisory Agreement shall remain in full force
and effect. Capitalized terms used herein but not defined herein shall have the
respective meanings ascribed to such terms in the Advisory Agreement. Signatures
on this Amendment which are transmitted electronically shall be valid for all
purposes, however any party shall deliver an original signature of this
Amendment to the other party upon request.

 

[Signature page follows.]

 

 

 

 

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, have
duly executed this agreement as of the date first set forth above.

 

  AMERICAN FINANCE TRUST, INC.           By:  /s/ Edward M. Weil, Jr.      
Name: Edward M. Weil, Jr.
Title: Chief Executive Officer and President                   AMERICAN FINANCE
OPERATING PARTNERSHIP, L.P.           By: American Finance Trust, Inc.,      
its General Partner             By: /s/ Edward M. Weil, Jr.       Name: Edward
M. Weil, Jr.
Title: Chief Executive Officer and President                   AMERICAN FINANCE
ADVISORS, LLC           By: American Finance Special Limited Partner, LLC,    
its sole member             By: AR Global Investments, LLC,     its managing
member             By: /s/ Michael Anderson       Name: Michael Anderson
Title: Authorized Signatory