Exhibit 10.3


 


STOCK
ESCROW AGREEMENT


 


This
STOCK ESCROW AGREEMENT, dated as of ________, 2020 (“Agreement”), by and among CHARDAN HEALTHCARE ACQUISITION 2 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 ________, 2019 (“Underwriting Agreement”), with
Chardan Capital Markets, LLC (“Chardan”) acting as representative of the several underwriters (collectively, the “Underwriters”),
pursuant to which, among other matters, the Underwriters have agreed to purchase 8,500,000 units (“Units”) of the
Company, plus an additional 1,275,000 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 (the “Common Stock”), one warrant, with each
warrant entitling the holder thereof to purchase one-half (1/2) of a share of the Common Stock at an exercise price of $11.50
per share, all as more fully described in the Company’s final Prospectus, dated ________, 2020 (“Prospectus”),
comprising part of the Company’s Registration Statement on Form S-1 (File No. 333-236977) under the Securities Act of 1933,
as amended (“Registration Statement”), declared effective on ___________, 2020 (“Effective Date”).


 


WHEREAS,
the Initial Shareholders have agreed as a condition of the sale of the Units to deposit their Insider 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, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after
the Company’s initial Business Combination and (ii) for the remaining 50% of the Escrow Shares, ending six months after
the date of the consummation 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, within six months 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
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 1,275,000 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) 318,750 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 1,275,000 minus the number of shares of
Common Stock purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which
is 1,275,000. 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.


 


3.3 On
the termination date of the Escrow Period, the Escrow Agent shall, upon written instructions from the Company disburse the Escrow
shares as set forth in such instructions.


 


4. Rights
of Initial Shareholders in Escrow Shares.


 


4.1 Voting
Rights as a Shareholder. Subject to the terms of the Insider Letters 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.


 






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4.3 Restrictions
on Transfer. During the Escrow Period, the only permitted transfers of the Escrow Shares will be to (1) Chardan Investments
2, LLC, and its affiliates, officers, directors, stockholders, employees and members, (2) to the Company’s pre-IPO stockholders
or their respective affiliates, or to the Company’s offices, directors, advisors and employees (3) if the 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 immediate family or to a trust, the beneficiary of which is the Initial Shareholder or a member
of the Initial Shareholder’s immediate family for estate planning purposes, (5) by virtue of the laws of descent and distribution
upon death of the Initial Shareholder, (6) pursuant to a qualified domestic relations order, (7) by certain pledges to secure
obligations incurred in connection with purchases of the Company’s securities, (8) by private sales at prices no greater
than the price at which the Insider Shares were originally purchased or (9) for the cancellation of up to 318,750 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 our initial Business Combination, in each case (except for clause 9 or with our prior consent)
on the condition that such transfers may be implemented only upon the respective transferee’s written agreement to be bound
by the terms and conditions of this Agreement and of the Insider Letter (as defined below) signed by the Initial Shareholder transferring
the Escrow Shares.


 


4.4 Insider
Letters. Each of the Initial Shareholders has executed a letter agreement with Chardan 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 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.


 






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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.


 


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 60 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.


 






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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 Chardan is a third party beneficiary of this
Agreement and this Agreement may not be modified or changed without the prior written consent of Chardan.


 


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.


 


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,
and shall be deemed given when so delivered personally or, if mailed, two days after the date of mailing, as follows:


 





	 	If to the Company, to:	 	Chardan Healthcare Acquisition 2 Corp.
	 	 	 	17 State Street, 21st Floor
	 	 	 	New York, NY 10004
	 	 	 	Attn: Jonas Grossman
	 	 	 	 
	 	If to a Shareholder, to his address set forth in Exhibit A.
	 	 	 	 
	 	and if to the Escrow Agent, to:	 	Continental Stock Transfer & Trust Company
	 	 	 	1 State Street, 30th Floor
	 	 	 	New York, New York 10004
	 	 	 	Attn: Erika Young
	 	 	 	 
	 	A copy (which copy shall not constitute notice) sent hereunder shall be sent to:
	 	 	 	 
	 	 	 	Chardan Capital Markets LLC
	 	 	 	17 State Street, 21st Floor
	 	 	 	New York, NY 10004
	 	 	 	Attn:  George Kaufman
	 	 	 	Fax:  (646) 465-9039
	 	 	 	 
	 	and:	 	Kirkland & Ellis
	 	 	 	601 Lexington Avenue
	 	 	 	New York, NY 10022
	 	 	 	Attn:  Christian O. Nagler
	 	 	 	Fax: (212) 446-4900
	 	 	 	 
	 	and: 	 	Loeb & Loeb LLP
	 	 	 	345 Park Avenue
	 	 	 	New York, New York 10154
	 	 	 	Attn:  Mitchell S. Nussbaum, Esq. and Giovanni Caruso, Esq.
	 	 	 	Fax: (212) 407-4000


 


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.


 


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:
	 	 	 
	 	CHARDAN HEALTHCARE ACQUISITION 2 CORP.
	 	 	 
	 	By:	 
	 	 	Name:  	Jonas Grossman
	 	 	Title:	 President
	 	 	 
	 	CONTINENTAL STOCK TRANSFER & TRUST COMPANY
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	INITIAL SHAREHOLDERS:
	 	 	 
	 	CHARDAN INVESTMENTS 2, LLC.
	 	 	 
	 	By:	 
	 	 	Name: 	Jonas Grossman
	 	 	Title: 	Managing Member


 


[Signature
Page to Escrow Agreement]


 






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EXHIBIT
A


 


Initial
Shareholders


 


	Name of Initial Shareholder	 	Number
 of
                                         Shares
	 	 	Date
                                         of
 Insider
                                         Letter
	 
	 	 	 	 	 	 	 	 	 
	Chardan Investments 2, LLC	 	 	2,443,750	 	 	 	_________,2020	 



 




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EXHIBIT
B


 


Escrow
Shares


 


Chardan
Investments, LLC – 318,750


 




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EXHIBIT
C


 


Insider
Letter


 


___________,
2020




 


 


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