Exhibit 10.1


 


[●], 2022


 


Redwoods Acquisition Corp.


1115 Broadway, 12th Floor


New York, NY 10010


 


Chardan Capital
Markets, LLC


17 State Street, Suite 2130


New York, NY 10004


 


		Re:	Initial Public Offering


 


Ladies and Gentlemen:


 


This letter agreement is being
delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”) entered into by
and between Redwoods Acquisition Corp., a Delaware corporation (the “Company”), and Chardan Capital Markets,
LLC, as representative (the “Representative”) of the several underwriters named on Schedule A thereto (the “Underwriters”),
relating to an underwritten initial public offering (the “IPO”) of the Company’s units (the “Units”),
each comprised of one share of common stock of the Company, $0.0001 par value (the “Common Stock”), one redeemable
warrant, each warrant entitling its holder to purchase one-half (1/2) of one share of Common Stock at an exercise price of $11.50 per
full share (the “Warrants”), and one right to receive one-tenth (1/10) of one share of Common Stock (the “Rights”).
Certain capitalized terms used herein are defined in paragraph 16 hereof.


 


In order to induce the Company
and the Underwriters to enter into the Underwriting Agreement and to proceed with the IPO, and in recognition of the benefit that such
IPO will confer upon the undersigned as a shareholder of the Company, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the undersigned hereby agrees with the Company as follows:


 


1.    If
the Company solicits approval of its shareholders of a Business Combination, the undersigned will vote all shares of Common Stock beneficially
owned by him, her or it, whether acquired before, in or after the IPO, in favor of such Business Combination.


 


2.    (a)
In the event that the Company fails to consummate a Business Combination within 12 months from the closing of the Company’s IPO
(or, in the event that the Company extended the period of time to consummate a business combination, up to 18 months from the closing
of the Company’s IPO, as specified in the Company’s amended and restated certificate of incorporation), the undersigned shall
take all reasonable steps to (i) cause the Trust Fund to be liquidated and distributed to the holders of the IPO Shares and (ii) cause
the Company to liquidate as soon as reasonably practicable.


 


(b) The undersigned hereby
waives any and all right, title, interest or claim of any kind in or to any distribution of the Trust Fund and any remaining net assets
of the Company as a result of such liquidation with respect to his, her or its Insider Shares (“Claim”) and
hereby waives any Claim the undersigned may have in the future as a result of, or arising out of, any contracts or agreements with the
Company and will not seek recourse against the Trust Fund for any reason whatsoever. [The undersigned acknowledges and agrees that there
will be no distribution from the Trust Fund with respect to any Warrants or Rights underlying the Private Units, all of which will terminate
on the Company’s liquidation.]1 


 





 






		1	Redwoods Capital LLC only.



 






    


     


    

 







[3. In the event of the
liquidation of the Trust Fund, the undersigned agrees to indemnify and hold harmless the Company against any and all loss, liability,
claims, damage and expense whatsoever (including, but not limited to, any and all legal or other expenses reasonably incurred in investigating,
preparing or defending against any litigation, whether pending or threatened, or any claim whatsoever) which the Company may become subject
as a result of any claims by a third party (excluding the Company’s independent
registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which
the Company has entered into a written letter of intent, confidentiality or similar agreement or business combination agreement, reduce
the amount of funds in the Trust Fund to below the lesser of (i) $10.10 per IPO Share and (ii) the actual amount per IPO Share
held in the Trust Fund as of the date of the liquidation of the Trust Fund, if less than $10.10 per share due to reductions in the value
of the trust assets, in each case less taxes payable, provided that such liability will not apply to any claims by a third party or prospective
target business who executed a waiver of any and all rights to the monies held in the Trust Fund (whether or not such waiver is enforceable),
nor will it apply to any claims under the Company’s indemnity of the Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended (the “Securities Act”).]2


 


4.    [In
the event that the Company does not consummate a Business Combination and must liquidate and its remaining net assets are insufficient
to complete such liquidation, the undersigned agrees to advance such funds necessary to complete such liquidation and agrees not to seek
recourse for such expenses.]3


 


5.    The
undersigned will escrow all of his, her or its Insider Shares pursuant to the terms of a Stock Escrow Agreement, which the Company will
enter into with the undersigned and an escrow agent acceptable to the Company. [If the underwriters’ over-allotment option is not
exercised in full within 45 days of the date hereof, the undersigned agrees to cancel a portion of the undersigned’s Insider Shares
such that the total number of Insider Shares determined by multiplying (a) the product of (i) 375,000, by (b) a fraction, (i) the numerator
of which is 1,500,000 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 1,500,000.]4


 


[6. The undersigned agrees
that until the Company consummates a Business Combination, the undersigned’s Private Units will be subject to the transfer restrictions
described in the Subscription Agreement relating to the undersigned’s Private Units.]5


 


7.    In
order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the
Company for its consideration, prior to presentation to any other person or entity, any suitable opportunity to acquire a target business,
until the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company, subject to any pre-existing
fiduciary and contractual obligations the undersigned might have.


 


8.    The
undersigned acknowledges and agrees that prior to entering into a Business Combination with a target business that is affiliated with
any Insiders of the Company or their affiliates, including any company that is a portfolio company of, or otherwise affiliated with, or
has received financial investment from, an entity with which any Insider or their affiliates is affiliated, such transaction must be approved
by a majority of the Company’s disinterested and independent directors and the Company must obtain an opinion from an independent
investment banking firm that such Business Combination is fair to the Company’s unaffiliated shareholders from a financial point
of view.


 


9.    Neither
the undersigned, any member of the family of the undersigned, nor any affiliate of the undersigned will be entitled to receive and will
not accept any compensation or other cash payment prior to, or for services rendered in connection with, the consummation of the Business
Combination; provided that the Company shall be allowed to repay working capital loans made by the undersigned to the Company
in cash upon consummation of the Business Combination. Notwithstanding the foregoing, the undersigned and any affiliate of the undersigned
shall be entitled to reimbursement from the Company for their out-of-pocket expenses incurred in connection with identifying, investigating
and consummating a Business Combination.







 





 






		2	Redwoods Capital LLC only.



		3	Redwoods Capital LLC only.



		4	Redwoods Capital LLC only.



		5	Redwoods Capital LLC only.





 






    2


     


    

 


10.    Neither
the undersigned, any member of the family of the undersigned, nor any affiliate of the undersigned will be entitled to receive and will
not accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or
any affiliate of the undersigned originates a Business Combination.


 


11.    [The
undersigned agrees to be a director and/or officer of the Company, as applicable, until the earlier of the consummation by the Company
of a Business Combination or the liquidation of the Company. The undersigned’s biographical information previously furnished to
the Company and the Representative is true and accurate in all material respects, does not omit any material information with respect
to the undersigned’s biography and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K,
promulgated under the Securities Act.]6 The undersigned’s
FINRA Questionnaire or/and D&O Questionnaire previously furnished to the Company and the Representative is true and accurate in all
material respects. The undersigned represents and warrants that:


 


		(a)	He, she or it has never had a petition under the federal bankruptcy laws or any state insolvency law been
filed by or against (i) him, her or it, or any partnership in which he, she or it was a general partner at or within two years before
the time of filing; or (ii) any corporation or business association of which he or she was an executive officer at or within two years
before the time of such filing;



 


		(b)	He, she or it has never had a receiver, fiscal agent or similar officer been appointed by a court for
his business or property, or any such partnership;



 


		(c)	He, she or it has never been convicted of fraud in a civil or criminal proceeding;



 


		(d)	He, she or it has never been convicted in a criminal proceeding or named the subject of a pending criminal
proceeding (excluding traffic violations and minor offenses);



 


		(e)	He, she or it has never been the subject of any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining or otherwise limiting him, her or it
from (i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission (“CFTC”) or an associated
person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and loan association or insurance company, or from engaging in or continuing
any conduct or practice in connection with any such activity; or (ii) engaging in any type of business practice; or (iii) engaging in
any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state
securities or federal commodities laws;



 


		(f)	He, she, or it has never been the subject of any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days his, her or its
right to engage in any activity described in 11(e)(i) above, or to be associated with persons engaged in any such activity;



 


		(g)	He, she, or it has never been found by a court of competent jurisdiction in a civil action or by the SEC
to have violated any federal or state securities law, where the judgment in such civil action or finding by the SEC has not been subsequently
reversed, suspended or vacated;



 


		(h)	He, she, or it has never been found by a court of competent jurisdiction in a civil action or by the CFTC
to have violated any federal commodities law, where the judgment in such civil action or finding by the CFTC has not been subsequently
reversed, suspended or vacated;



 


 






	6	Directors
                                            and officers only.






 






    3


     


    

 










		(i)	He, she, or it has never been the subject of, or a party to, any Federal, State or foreign judicial or
administrative order, judgment, decree or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of
(i) any Federal, State or foreign securities or commodities law or regulation, (ii) any law or regulation respecting financial institutions
or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil
money penalty or temporary or permanent cease-and desist order, or removal or prohibition order or (iii) any law or regulation prohibiting
mail or wire fraud or fraud in connection with any business entity;



 


		(j)	He, she or it has never been the subject of, or party to, any sanction or order, not subsequently reversed,
suspended or vacated, or any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization
that has disciplinary authority over its members or persons associated with a member;



 


		(k)	He, she or it has never been convicted of any felony or misdemeanor: (i) in connection with the purchase
or sale of any security; (ii) involving the making of any false filing with the SEC; or (iii) arising out of the conduct of the business
of an underwriter, broker, dealer, municipal securities dealer, investment advisor or paid solicitor of purchasers of securities;



 


		(l)	He, she or it was never subject to a final order of a state or foreign securities commission (or an agency
of officer of a state performing like functions); a state or foreign authority that supervises or examines banks, savings associations,
or credit unions; a state or foreign insurance commission (or an agency or officer of a state performing like functions); an appropriate
federal or foreign banking agency; the CFTC; or the National Credit Union Administration that is based on a violation of any law or regulation
that prohibits fraudulent, manipulative, or deceptive conduct;



 


		(m)	He, she or it has never been subject to any order, judgment or decree of any court of competent jurisdiction,
that, at the time of the sale of the Units, restrained or enjoined him, her or it from engaging or continuing to engage in any conduct
or practice: (i) in connection with the purchase or sale of any security; (ii) involving the making of any false filing with the SEC or
any foreign regulatory agency with similar functions; or (iii) arising out of the conduct of the business of an underwriter, broker, dealer,
municipal securities dealer, investment adviser or paid solicitor of purchasers of securities;



 


		(n)	He, she or it has never been subject to any order of the SEC or any foreign regulatory agency with similar
functions that orders him, her or it to cease and desist from committing or causing a future violation of: (i) any scienter-based anti-fraud
provision of the federal securities laws, including, but not limited to, Section 17(a)(1) of the Securities Act, Section 10(b) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 thereunder, Section 15(c) and Section 206(1)
of the Investment Advisers Act of 1940 (the “Advisers Act”) or any other rule or regulation thereunder; or (ii) Section 5
of the Securities Act;



 


		(o)	He, she or it has never filed (as a registrant or issuer), or been named as an underwriter in any registration
statement or Regulation A offering statement filed with the SEC that was the subject of a refusal order, stop order, or order suspending
the Regulation A exemption, or is, currently, the subject of an investigation or proceeding to determine whether a stop order or suspension
order should be issued;



 


		(p)	He, she or it has never been subject to a United States Postal Service false representation order, or
is currently subject to a temporary restraining order or preliminary injunction with respect to conduct alleged by the United States Postal
Service to constitute a scheme or device for obtaining money or property through the mail by means of false representations;



 


		(q)	He, she or it is not subject to a final order of a state securities commission (or an agency of officer
of a state performing like functions); a state authority that supervises or examines banks, savings associations, or credit unions; a
state insurance commission (or an agency or officer of a state performing like functions); an appropriate federal banking agency; the
CFTC; or the National Credit Union Administration that bars the undersigned from: (i) association with an entity regulated by such commission,
authority, agency or officer; (ii) engaging in the business of securities, insurance or banking; or (iii) engaging in savings association
or credit union activities;



 






    4


     


    

 


		(r)	He, she or it is not subject to an order of the SEC entered pursuant to Section 15(b) or 15B(c) of the
Exchange Act or Section 203(e) or 203(f) of the Advisers Act that: (i) suspends or revokes the undersigned’s registration as a broker,
dealer, municipal securities dealer or investment adviser; (ii) places limitations on the activities, functions or operations of, or imposes
civil money penalties on, such person; or (iii) bars the undersigned from being associated with any entity or from participating in the
offering of any penny stock; and



 


		(s)	He, she or it has never been suspended or expelled from membership in, or suspended or barred from association
with a member of, a securities self-regulatory organization (e.g., a registered national securities exchange or a registered national
or affiliated securities association) for any act or omission to act constituting conduct inconsistent with just and equitable principles
of trade.



 


12.    The
undersigned has full right and power, without violating any agreement by which he, she or it is bound, to enter into this letter agreement
[and to serve as a director and/or officer of the Company, as applicable, and consents to being named in the registration statement on
Form S-1 and prospectus filed by the Company with the U.S. Securities and Exchange Commission, road show and any other materials as an
officer and/or director of the Company, as applicable.]7.


 


13.    The
undersigned hereby waives his, her or its right to exercise redemption rights with respect to any shares of Common Stock owned or to be
owned by the undersigned, directly or indirectly, whether purchased by the undersigned prior to the IPO, in the IPO or in the aftermarket,
and agrees that he, she or it will not seek redemption with respect to or otherwise sell, such shares in connection with any vote to approve
a Business Combination with respect thereto, a vote to amend the provisions of the Company’s Amended and Restated Certificate of
Incorporation, or a tender offer by the Company prior to a Business Combination.


 


14.    The
undersigned hereby agrees (a) not to propose, or vote in favor of, an amendment
to the Company’s certificate of incorporation that would affect the substance or timing of the Company’s obligation to redeem
100% of the IPO Shares if the Company does not complete its initial Business Combination within 12 months (or up to 18 months,
if the Company extends the time to complete a Business Combination) from the closing of the IPO, unless the Company provides holders of
the IPO Shares with the opportunity to redeem their IPO Shares upon approval of any such amendment at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the Trust Fund, net of taxes payable, divided by the number of then outstanding IPO Shares,
(b) not to redeem any shares (including the Insider Shares) to receive cash from the Trust Fund in connection with a stockholder
vote to approve the Company’s proposed initial Business Combination (or sell any shares they hold to the Company in a tender offer
in connection with a proposed initial Business Combination) or a vote to amend the provisions of the Company’s certificate of incorporation
relating to the substance or timing of the Company’s obligation to redeem 100% of our public shares if the Company does not complete
its initial Cusiness Combination within 12 months (or up to 18 months, as applicable), from the closing of the IPO, and (c) that
the Insider Shares shall not be entitled to be redeemed for a pro rata portion of the funds held in the Trust Fund if a Business Combination
is not consummated.


 


15.    In
connection with Section 5-1401 of the General Obligations Law of the State of New York, this letter agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard to principles of conflicts of law that would result in
the application of the substantive law of another jurisdiction. The parties hereto agree that any action, proceeding or claim arising
out of or relating in any way to this letter agreement shall be resolved through final and binding arbitration in accordance with the
International Arbitration Rules of the American Arbitration Association (“AAA”). The arbitration shall be brought before the
AAA International Center for Dispute Resolution’s offices in New York City, New York, will be conducted in English and will be decided
by a panel of three arbitrators selected from the AAA Commercial Disputes Panel and that the arbitrator panel’s decision shall be
final and enforceable by any court having jurisdiction over the party from whom enforcement is sought. The cost of such arbitrators and
arbitration services, together with the prevailing party’s legal fees and expenses, shall be borne by the non-prevailing party or
as otherwise directed by the arbitrators.


 


 






		7	Directors and officers only.



 






    5


     


    

 


16.    As
used herein, (i) a “Business Combination” shall mean a merger, share exchange, asset acquisition, stock
purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities; (ii) “Insiders”
shall mean all officers, directors and shareholders of the Company immediately prior to the IPO; (iii) “Insider Shares”
shall mean all of the shares of Common Stock of the Company acquired by an Insider prior to the IPO and any shares of Common Stock underlying
the Private Units; (iv) “IPO Shares” shall mean the shares of Common Stock issued in the Company’s IPO;
(v) “Private Units” shall mean (x) the units purchased in the private placement taking place simultaneously
with the consummation of the Company’s IPO and (y) the additional units that may be purchased in connection with the exercise of
the over-allotment option by the underwriters in the IPO as described in the Registration Statement; (vi) “Registration Statement”
means the registration statement on Form S-1 filed by the Company with respect to the IPO; and (vii) “Trust Fund”
shall mean the trust fund into which a portion of the net proceeds of the Company’s IPO will be deposited.


 


17.    Any
notice, consent or request to be given in connection with any of the terms or provisions of this letter agreement shall be in writing
and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery or
by e-mail transmission.


 


If to the Representative:


 


Chardan Capital Markets, LLC


17 State Street, Suite 2130


New York, NY 10004


Attn: George Kaufman


E-mail: gkaufman@chardancm.com


 


 


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


 


Ellenoff Grossman & Schole LLP


1345 Avenue of the Americas


New York, NY 10105

Attn: Stuart Neuhauser, Esq.


E-mail: sneuhauser@egsllp.com


 


If to the Company:


 


Redwoods Acquisition Corp.


1115 Broadway, 12th Floor


New York, NY 10010


Attn: Jiande Chen, Chief Executive Officer


E-mail: jiande.chen@rewoodsac.com


 


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


 


Loeb & Loeb LLP


345 Park Avenue


New York, NY 10154


Attn: Giovanni Caruso, Esq.


E-mail: gcaruso@loeb.com


 






    6


     


    

 


The parties hereto consent
to the delivery of notices or other communications by electronic transmission at the e-mail address set forth below the respective party’s
name in this Section 17. 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.


 










18.    No
party hereto may assign either this letter agreement or any of its rights, interests, or obligations hereunder without the prior written
consent of the other party. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate
to transfer or assign any interest or title to the purported assignee. This letter agreement shall be binding on the parties hereto and
any successors and assigns thereof.


 


19.    The
undersigned acknowledges and understands that the Underwriters and the Company will rely upon the agreements, representations and warranties
set forth herein in proceeding with the IPO.


 


[Signature Page Follows]


 




    7


     


    

 


	Sincerely,	 
	 	 
	By:	 	 
	 	Name of Insider:	 


 


Signature Page to Letter Agreement


 




    


     


    

 


Acknowledged and Agreed:


 


	REDWOODS ACQUISITION CORP.	 
	 	 
	By:	 	 
	Name: 	Jiande Chen	 
	Title:	Chief Executive Officer	 


 


Signature Page to Letter Agreement