Exhibit 10.3


 


STOCK ESCROW AGREEMENT


 


This STOCK ESCROW AGREEMENT,
dated as of [●], 2021 (this “Agreement”), by and among MODIV ACQUISITION CORP., a Delaware corporation (“Company”),
and the initial shareholders listed on the signature pages hereto (collectively, the “Initial Shareholders”) and CONTINENTAL
STOCK TRANSFER & TRUST COMPANY, a New York corporation (“Escrow Agent”).


 


WHEREAS, the Company
has entered into an Underwriting Agreement, dated as of [●], 2021 (“Underwriting Agreement”), with Chardan Capital
Markets, LLC acting as representative (the “Representative”) of the several underwriters (collectively, the “Underwriters”),
pursuant to which, among other matters, the Underwriters have agreed to purchase 10,000,000 units (“Units”) of the
Company, plus an additional 1,500,000 Units if the Underwriters exercise their over- allotment option in full. Each Unit consists
of one share of common stock of the Company, par value $0.0001 per share (“Common Stock”), one warrant, with each warrant
entitling the holder thereof to purchase one-half (1⁄2) of one share of Common Stock at an exercise price of $11.50 per share,
all as more fully described in the Company’s final Prospectus, dated [●], 2021 (“Prospectus”), comprising
part of the Company’s Registration Statement on Form S-1 (File No. 333-[●]) under the Securities Act of 1933, as amended
(“Registration Statement”), declared effective on [●], 2021 (“Effective Date”).


 


WHEREAS, the Initial
Shareholders have agreed as a condition of the sale of the Units to deposit their “founder shares” (as defined in the
Prospectus), as set forth opposite their respective names on Exhibit A attached hereto (collectively “Escrow Shares”),
in escrow as hereinafter provided.


 


WHEREAS, the Company
and the Initial Shareholders desire that the Escrow Agent accept the Escrow Shares, in escrow, to be held and disbursed as hereinafter
provided.


 


IT IS AGREED:


 


1.            Appointment
of Escrow Agent. The Company and the Initial Shareholders hereby appoint the Escrow Agent to act in accordance with and subject
to the terms of this Agreement and the Escrow Agent hereby accepts such appointment and agrees to act in accordance with and subject
to such terms.


 


2.            Deposit
of Escrow Shares. On or prior to the date hereof, each of the Initial Shareholders delivered to the Escrow Agent certificates
representing such Initial Shareholder’s respective Escrow Shares, together with applicable share powers, to be held and disbursed
subject to the terms and conditions of this Agreement. Each of the Initial Shareholders acknowledges that the certificate representing
such Initial Shareholder’s Escrow Shares is legended to reflect the deposit of such Escrow Shares under this Agreement.


 


3.            Disbursement
of the Escrow Shares.


 


3.1       The
Escrow Agent shall hold the Escrow Shares during the period (the “Escrow Period”) commencing on the date hereof and
(i) for 50% of the Escrow Shares, ending on the earlier of (x) six months after the date of the consummation of the Company’s
initial business combination (as described in the Registration Statement, hereinafter a “Business Combination”) and
(y) the date on which the closing price of the Common Stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock
dividends, stock capitalizations, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period
following the closing of the Company’s initial Business Combination and (ii) for the remaining 50% of the Escrow Shares,
ending six months after the date of the closing of an initial Business Combination. The Company shall promptly provide notice of
the consummation of a Business Combination to the Escrow Agent. Upon completion of the Escrow Period, the Escrow Agent shall disburse
such amount of each Initial Shareholder’s Escrow Shares (and any applicable share power) to such Initial Shareholder;


 




    	 		 



     


    




 


provided, however, that if the Escrow Agent
is notified by the Company pursuant to Section 6.7 hereof that the Company is being liquidated at any time during the Escrow Period,
then the Escrow Agent shall promptly destroy the certificates representing the Escrow Shares; provided further, however, that if,
after the Company consummates an initial Business Combination, the Company (or the surviving entity) subsequently consummates a
liquidation, merger, stock exchange or other similar transaction which results in all of the shareholders of such entity having
the right to exchange their shares of Common Stock for cash, securities or other property, then the Escrow Agent will, upon receipt
of a notice executed by the Chairman of the Board, Chief Executive Officer, Chief Financial Officer or other authorized officer
of the Company, in form reasonably acceptable to the Escrow Agent, certifying that such transaction is then being consummated or
such conditions have been achieved, as applicable, release the Escrow Shares to the Initial Shareholders. The Escrow Agent shall
have no further duties hereunder after the disbursement or destruction of the Escrow Shares in accordance with this Section 3.1.


 


3.2       Notwithstanding
Section 3.1, if the Underwriters do not exercise their over-allotment option to purchase an additional 1,500,000 Units of the Company
in full within 45 days of the date of the Prospectus (as described in the Underwriting Agreement), the Initial Shareholders agree
that the Escrow Agent shall return to the Company for cancellation, at no cost, the number of Escrow Shares held by the Initial
Shareholders listed on Exhibit B determined by multiplying (a) the product of (i) 375,000 multiplied by (ii) a fraction,
(x) the numerator of which is the number of Escrow Shares held by each such holder, and (y) the denominator of which is the total
number of Escrow Shares, by (b) a fraction, (i) the numerator of which is 1,500,000 minus the number of Units purchased by the
Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which is 1,500,000. The Company shall
promptly provide notice to the Escrow Agent of the expiration or termination of the Underwriters’ over- allotment option
and the number of Units, if any, purchased by the Underwriters in connection with their exercise thereof.


 


4.            Rights
of Initial Shareholders in Escrow Shares.


 


4.1       Voting
Rights as a Shareholder. Subject to the terms of the Insider Letters (as defined below) described in Section 4.4 hereof
and except as herein provided, the Initial Shareholders shall retain all of their rights as shareholders of the Company during
the Escrow Period, including, without limitation, the right to vote such shares.


 


4.2       Dividends
and Other Distributions in Respect of the Escrow Shares. During the Escrow Period, all dividends payable in cash with respect
to the Escrow Shares shall be paid to the Initial Shareholders, but all dividends payable in stock or other non-cash property (“Non-Cash
Dividends”) shall be delivered to the Escrow Agent to hold in accordance with the terms hereof. As used herein, the term
“Escrow Shares” shall be deemed to include the Non-Cash Dividends distributed thereon, if any.


 


4.3       Restrictions
on Transfer. During the Escrow Period, the only permitted transfers of the Escrow Shares will be (1) to any persons or entities
(including their affiliates and stockholders) participating in the private placement of the “private warrants” (as
defined in the Prospectus), and officers, directors, stockholders, employees and members of the Initial Shareholders and their
respective affiliates, (2) amongst the Initial Shareholders (including, to the extent the Initial Shareholders are entities, to
such entity’s members, partners, stockholders or other equity holders) or to the Company’s officers, directors and
employees, (3) if any Initial Shareholder is an entity, as a distribution to its partners, stockholders, or members upon its liquidation,
(4) by bona fide gift to a member of the Initial Shareholder’s (or its permitted transferee’s) immediate family or
to a trust, the beneficiary of which is the Initial Shareholder (or its permitted transferee) or a member of the Initial Shareholder’s
(or its permitted transferee’s) immediate family, for estate planning purposes, (5) by virtue of the laws of descent and
distribution upon death, (6) pursuant to a qualified domestic relations order, (7) by certain pledges to secure obligations incurred
in


 




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connection with purchases of the Company’s
securities, (8) by private sales at prices no greater than the price at which the founder shares were originally purchased or (9)
for the cancellation of up to 375,000 shares of Common Stock subject to forfeiture to the extent that the Underwriters’ over-allotment
is not exercised in full or in part or in connection with the consummation of the Company’s initial business combination,
in each case (except for clause 9 or with the Company’s prior consent) where such permitted transferee agrees to the terms
of this Agreement and the Insider Letter (as defined below).


 


4.4       Insider
Letters. Each of the Initial Shareholders has executed a letter agreement with the Representative and the Company, dated as
indicated on Exhibit C hereto, and the form of which is filed as an exhibit to the Registration Statement (“Insider
Letter”), respecting the rights and obligations of such Initial Shareholder in certain events, including but not limited
to the liquidation of the Company.


 


		5.	Concerning the Escrow Agent.



 


5.1       Good
Faith Reliance. The Escrow Agent shall not be liable for any action taken or omitted by it in good faith and in the exercise
of its own best judgment, and may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate,
opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report or other paper or document
(not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability
of any information therein contained) which is believed by the Escrow Agent to be genuine and to be signed or presented by the
proper person or persons. The Escrow Agent shall not be bound by any notice or demand, or any waiver, modification, termination
or rescission of this Agreement unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties
and, if the duties or rights of the Escrow Agent are affected, unless it shall have given its prior written consent thereto.


 


5.2       Indemnification.
The Escrow Agent shall be indemnified and held harmless by the Company from and against any expenses, including reasonable counsel
fees and disbursements, or loss suffered by the Escrow Agent in connection with any action, suit or other proceeding involving
any claim which in any way, directly or indirectly, arises out of or relates to this Agreement, the services of the Escrow Agent
hereunder, or the Escrow Shares held by it hereunder, other than expenses or losses arising from the gross negligence or willful
misconduct of the Escrow Agent. Promptly after the receipt by the Escrow Agent of notice of any demand or claim or the commencement
of any action, suit or proceeding, the Escrow Agent shall notify the other parties hereto in writing. In the event of the receipt
of such notice, the Escrow Agent, in its sole discretion, may commence an action in the nature of interpleader in an appropriate
court to determine ownership or disposition of the Escrow Shares or it may deposit the Escrow Shares with the clerk of any appropriate
court or it may retain the Escrow Shares pending receipt of a final, non-appealable order of a court having jurisdiction over all
of the parties hereto directing to whom and under what circumstances the Escrow Shares are to be disbursed and delivered. The provisions
of this Section 5.2 shall survive in the event the Escrow Agent resigns or is discharged pursuant to Sections 5.5 or 5.6 below.


 


5.3       Compensation.
The Escrow Agent shall be entitled to reasonable compensation from the Company for all services rendered by it hereunder. The Escrow
Agent shall also be entitled to reimbursement from the Company for all expenses paid or incurred by it in the administration of
its duties hereunder including, but not limited to, all counsel, advisors’ and agents’ fees and disbursements and all
taxes or other governmental charges.


 


5.4       Further
Assurances. From time to time on and after the date hereof, the Company and the Initial Shareholders shall deliver or cause
to be delivered to the Escrow Agent such further documents and instruments and shall do or cause to be done such further acts as
the Escrow Agent shall reasonably request to carry out more effectively the provisions and purposes of this Agreement, to evidence
compliance herewith or to assure itself that it is protected in acting hereunder.


 




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5.5       Resignation.
The Escrow Agent may resign at any time and be discharged from its duties as escrow agent hereunder by its giving the other parties
hereto written notice and such resignation shall become effective as hereinafter provided. Such resignation shall become effective
at such time that the Escrow Agent shall turn over to a successor escrow agent appointed by the Company, the Escrow Shares held
hereunder. If no new escrow agent is so appointed within the [90]1
day period following the giving of such notice of resignation, the Escrow Agent may deposit the Escrow Shares with any court it
reasonably deems appropriate.


 


5.6       Discharge
of Escrow Agent. The Escrow Agent shall resign and be discharged from its duties as escrow agent hereunder if so requested
in writing at any time by the other parties hereto, jointly; provided, however, that such resignation shall become effective only
upon acceptance of appointment by a successor escrow agent as provided in Section 5.5.


 


5.7       Liability.
Notwithstanding anything herein to the contrary, the Escrow Agent shall not be relieved from liability hereunder for its own gross
negligence or its own willful misconduct.


 


5.8       Waiver.
The Escrow Agent hereby waives any right of set-off or any other right, title, interest or claim of any kind (“Claim”)
in, or to any distribution of, the Trust Account (as defined in that certain Investment Management Trust Agreement, dated as of
the date hereof, by and between the Company and the Escrow Agent as trustee thereunder) and hereby agrees not to seek recourse,
reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever.


 


6.            Miscellaneous.


 


6.1       Governing
Law. This Agreement shall for all purposes be deemed to be made under and shall be construed in accordance with the laws
of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive
laws of another jurisdiction.


 


6.2       Third
Party Beneficiaries. Each of the Initial Shareholders hereby acknowledges that Representative is a third party beneficiary
of this Agreement and this Agreement may not be modified or changed without the prior written consent of the Representative.


 


6.3       Entire
Agreement. This Agreement contains the entire agreement of the parties hereto with respect to the subject matter hereof
and, except as expressly provided herein, may not be changed or modified except by an instrument in writing signed by the party
to the charged.


 


6.4       Headings.
The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation
thereof.


 


6.5       Binding
Effect. This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their legal representatives,
successors and assigns; provided, that the Escrow Agent may not assign this Agreement without the prior written consent of the
Company.


 


6.6       Notices.
Any notice or other communication required or which may be given hereunder shall be in writing and either be delivered personally
or be mailed, certified or registered mail, or by private national courier service, return receipt requested, postage prepaid,
or by e-mail as described below, and shall be deemed given when so delivered personally or by e-mail or, if mailed or sent by private


  


 






		1	Note to Draft: To match successor trustee period in Investment Management Trust Agreement.



 






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national courier service, two days after
the date of mailing or the date of delivery to the private national courier service, as follows:


 


If to the Company, to: 


 


Modiv Acquisition Corp.


120 Newport Center Drive


Newport Beach, CA 92660


Attn: Raymond J. Pacini


Email: rpacini@modiv.com


 


with a copy (which copy shall
not constitute notice) to:


Loeb & Loeb LLP


345 Park Avenue


New York, NY 10154


Attn: Mitchell S. Nussbaum, Esq.
and Tahra Wright, Esq.


Email: mnussbaum@loeb.com; twright@loeb.com


 


If to an Initial Shareholder, to such Initial
Shareholder’s address set forth in Exhibit A.


 


If to the Escrow Agent, to:


 


Continental Stock Transfer &
Trust Company


1 State Street, 30th Floor


New York, NY 10004


Attn: Francis Wolf and Douglas
Reed


Email: fwolf@continentalstock.com;
dreed@continentalstock.com


 


with a copy (which copy shall
not constitute notice) to:


Chardan Capital Markets LLC


17 State Street, 21st Floor


New York, NY 10004


Attn: George Kaufman


Email: gkaufman@chardancm.com


 


and


Reed Smith LLP


599 Lexington Avenue


New York, NY 10022


Attn: Ari Edelman, Esq. and Jared
Kelly, Esq.


Email: AEdelman@reedsmith.com;
Jared.Kelly@reedsmith.com


 


The parties hereto
consent to the delivery of notices or other communication by electronic transmission at the e-mail address set forth below the
respective party’s name in this Section 6.6. To the extent that any notice given by means of electronic transmission is returned
or undeliverable for any reason, the foregoing consent shall be deemed to have been revoked until a new or corrected e-mail address
has been provided, and such attempted electronic notice shall be ineffective and deemed to not have been given. Each party agrees
to promptly notify the other parties of any change in its e-mail address, and that failure to do so shall not affect the foregoing.
The parties may change the persons and addresses to which the notices or other communications are to be sent by giving written
notice to any such change in the manner provided herein for giving notice.


 




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6.7       Liquidation
of the Company. The Company shall give the Escrow Agent written notification of the liquidation and dissolution of the Company
in the event that the Company fails to consummate a Business Combination within the time period specified in the Prospectus.


 


[Signature Page Follows]


 




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WITNESS the execution
of this Agreement as of the date first above written.


 


	 	COMPANY:
	 	 
	 	MODIV ACQUISITION CORP.
	 	 	 
	 	By:	 
	 	Name:	Raymond J. Pacini
	 	Title:	Chief Financial Officer
	 	 	 
	 	CONTINENTAL STOCK TRANSFER & TRUST COMPANY
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	INITIAL SHAREHOLDERS: 
	 	 	 
	 	MODIV VENTURE FUND, LLC
	 	 	 
	 	By:	 
	 	Name:	Aaron S. Halfacre
	 	Title:	Chief Executive Officer


 


[Signature Page to Stock Escrow Agreement]


 




    	 		 



     


    




 


EXHIBIT A


Initial Shareholders


 


	Name of Initial Shareholder	Number of Shares	Date of Insider Letter
	Modiv Venture Fund, LLC	2,875,000	[●], 2021
	 	 	 


 




    	 		 



     


    

 


EXHIBIT B


Escrow Shares Subject to Forfeiture


 


Modiv Venture Fund, LLC – 375,000


 




    	 		 



     


    

 


EXHIBIT C


Insider Letter(s)


 


Insider Letter by and between the Company,
Modiv Venture Fund, LLC and Chardan Capital Markets LLC, dated [●], 2021.