Document:

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 AgreementExhibit
10.2

 

INVESTMENT
MANAGEMENT TRUST AGREEMENT

 

This
Investment Management Trust Agreement (this “Agreement”) is made as of [●], 2022 by and between Redwoods Acquisition
Corp. (the “Company”) and American Stock Transfer & Trust Company, LLC, as trustee (the “Trustee”).

 

WHEREAS,
the Company’s registration statement on Form S-1, No. 333-[●] (the “Registration Statement”), for its initial
public offering of securities (“IPO”) has been declared effective as of the date hereof (the “Effective Date”)
by the U.S. Securities and Exchange Commission (capitalized terms used herein and not otherwise defined shall have the meanings set forth
in the Registration Statement);

 

WHEREAS,
Chardan Capital Markets, LLC (the “Representative”) is acting as the representative of the underwriters in the IPO pursuant
to an underwriting agreement between the Company and the Representative (the “Underwriting Agreement”);

 

WHEREAS,
simultaneously with the IPO, Redwoods Capital LLC, the Company’s sponsor, and the Representative will be purchasing 477,500 (or
up to 530,000 if the underwriters’ over-allotment option is exercised in full) private units (“Private Placement Units”)
from the Company at $10.00 per private unit (for a total purchase price of $4,775,000 or $5,300,000 if the underwriters’ over-allotment
option is exercised in full);

 

WHEREAS,
as described in the Registration Statement, and in accordance with the Company’s Amended and Restated Certificate of Incorporation,
as the same may be amended from time to time (the “Charter”), $101,000,000 (or $116,150,000 if the underwriters’ over-allotment
option is exercised in full) of the net proceeds of the IPO and sale of the Private Placement Units will be delivered to the Trustee
to be deposited and held in a segregated trust account located at all times in the United States for the benefit of the Company and the
holders of the Company’s shares of common stock, par value $0.0001 per share (“Common Stock”), issued in the IPO as
hereinafter provided (the amount to be delivered to the Trustee will be referred to herein as the “Property,” the shareholders
for whose benefit the Trustee shall hold the Property will be referred to as the “Public Shareholders,” and the Public Shareholders
and the Company will be referred to together as the “Beneficiaries”);

 

WHEREAS,
pursuant to the Underwriting Agreement, a portion of the Property equal to $3,750,000, or $4,312,500 if the underwriters’ over-allotment
option is exercised in full, is attributable to deferred underwriting discounts and commissions that may become payable by the Company
to the underwriters upon the consummation of an initial business combination (as described in the Registration Statement, a “Business
Combination”); and

 

WHEREAS,
the Company and the Trustee desire to enter into this Agreement to set forth the terms and conditions pursuant to which the Trustee shall
hold the Property.

 

IT
IS AGREED:

 

1. Agreements and Covenants of Trustee. The Trustee hereby agrees and covenants to:

 

(a)
 Hold the Property in trust for the Beneficiaries in accordance with the terms of this Agreement
in a segregated trust account (“Trust Account”) established by the Trustee in the United States at [JPMorgan Chase Bank,
N.A.] (or at another U.S. chartered commercial bank with consolidated assets of $100 billion or more), maintained by the Trustee, and
at a brokerage institution selected by the Trustee that is reasonably satisfactory to the Company;

 

(b) Manage, supervise and administer the Trust Account subject to the terms and conditions set
forth herein;

 

(c) In
a timely manner, upon the instruction of the Company, invest and reinvest the Property (i) in United States “government securities”
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”),
having a maturity of 185 days or less and/or (ii) in money market funds meeting certain conditions under Rule 2a-7 promulgated under
the Investment Company Act and that invest solely in U.S. treasuries, as determined by the Company, it being understood that
the Trustee has no obligation to monitor or question the Company’s determination that an investment is in compliance with the foregoing
clause; the Company shall not instruct the Trustee to invest in any other securities or assets, it being understood that the Trust Account
will earn no interest while account funds are uninvested awaiting the Company’s instructions hereunder;

 

    

     

    

 

(d) Collect and receive, when due, all principal and income arising from the Property, which shall
become part of the “Property,” as such term is used herein;

 

(e) Notify the Company and the Representative of all communications received by it with respect
to any Property requiring action by the Company;

 

(f) Supply any necessary information or documents as may be requested by the Company in connection
with the Company’s preparation of its tax returns;

 

(g) Participate in any plan or proceeding for protecting or enforcing any right or interest arising
from the Property if, as and when instructed by the Company to do so;

 

(h) Render to the Company monthly written statements of the activities of and amounts in the Trust
Account reflecting all receipts and disbursements of the Trust Account; and

 

(i) Commence liquidation
of the Trust Account only after and promptly after receipt of, and only in accordance with, the terms of a letter (“Termination
Letter”), in a form substantially similar to that attached hereto as either Exhibit A or Exhibit B, signed on behalf
of the Company by its Chief Executive Officer and Chief Financial Officer and, in the case of a Termination Letter in a form substantially
similar to that attached hereto as Exhibit A, acknowledged and agreed to by the Representative, and complete the liquidation of
the Trust Account and distribute the Property in the Trust Account only as directed in the Termination Letter and the other documents
referred to therein; provided, however, that in the event that a Termination Letter has not been received by the Trustee by the 12-month
anniversary of the closing of the IPO (the “Closing”) or, in the event that the Company extended the time to complete the
Business Combination for up to 15 or 18 months, as applicable, from the Closing but has not completed the Business Combination within
such 15- or 18-month period, as applicable, the 15- or 18-month anniversary, as applicable, of the Closing (as applicable, the “Applicable
Deadline”), the Trust Account shall be liquidated in accordance with the procedures set forth in the Termination Letter attached
as Exhibit B hereto and distributed to the Public Shareholders as of the Applicable Deadline.

 

(j) Upon receipt of an extension letter (“Extension Letter”) substantially similar
to Exhibit D hereto at least five business days prior to the Applicable Deadline, signed on behalf of the Company by its Chief
Executive Officer and Chief Financial Officer, and receipt of the dollar amount specified in the Extension Letter on or prior to the
Applicable Deadline, to follow the instructions set forth in the Extension Letter.

 

(k) Upon receipt of a letter (an “Amendment Notification Letter”) in the form of Exhibit
E, signed on behalf of the Company by its Chief Executive Officer and Chief Financial Officer and, distribute to Public Stockholders
who exercised their conversion rights in connection with an amendment to Article Sixth of the Charter (an “Amendment”) an
amount equal to the pro rata share of the Property relating to the Common Stock for which such Public Stockholders have exercised conversion/redemption
rights in connection with such Amendment.

 

(l) Not disburse any amounts from the Trust Account in connection with a Business Combination in
the event that the amount per share to be received by the redeeming Public Shareholders is less than $10.10 per share (plus the amount
per share deposited in the Trust Account pursuant to any Extension Letter).

 

(m) In connection with a Business Combination, before making disbursements to the Depository Trust
Company, the Company or any other person, disburse the per share amount to redeeming Public Shareholders (other than shares tendered
through the Depository Trust Company) that have tendered their shares directly to the Trustee. 

 

2. Limited Distributions of Income from Trust Account.

 

(a) Upon written request from the Company, which may be given from time to time in a form substantially
similar to that attached hereto as Exhibit C, the Trustee shall distribute to the Company the amount of interest income earned
on the Trust Account requested by the Company to cover any income or other tax obligations owed by the Company.

 

    2

     

    

 

(b) The limited distributions referred to in Section 2(a) above shall be made only from income
collected on the Property. Except as provided in Section 2(a), no other distributions from the Trust Account shall be permitted except
in accordance with Section 1(i) and 1(k) hereof.

 

(c) The Company shall provide the Representative with a copy of any Termination Letters and/or
any other correspondence that it issues to the Trustee with respect to any proposed withdrawal from the Trust Account promptly after
such issuance.

 

(d) If applicable, the Company shall issue a press release at least three days prior to the Applicable
Deadline announcing that, at least five days prior to the Applicable Deadline, the Company received notice from the Company’s insiders
or their affiliates or designees that the insiders or their affiliates or designees intend to extend the Applicable Deadline and, promptly
following the Applicable Deadline, disclose whether or not the term the Company has to consummate a Business Combination has been extended.

 

3. Agreements and Covenants of the Company. The Company hereby agrees and covenants to:

 

(a) Give all instructions to the Trustee hereunder in writing, signed by the Company’s Chairman
of the Board, Chief Executive Officer or Chief Financial Officer. In addition, except with respect to its duties under Sections 1(i)
and 2(a) above, the Trustee shall be entitled to rely on, and shall be protected in relying on, any verbal or telephonic advice or instruction
which it in good faith believes to be given by any one of the persons authorized above to give written instructions, provided that the
Company shall promptly confirm such instructions in writing.

 

(b) Subject to the provisions of Sections 5 and 7(g) of this Agreement, hold the Trustee harmless
and indemnify the Trustee from and against, any and all expenses, including reasonable counsel fees and disbursements, or loss suffered
by the Trustee in connection with any claim, potential claim, action, suit or other proceeding brought against the Trustee involving
any claim, or in connection with any claim or demand which in any way arises out of or relates to this Agreement, the services of the
Trustee hereunder, or the Property or any income earned from investment of the Property, except for expenses and losses resulting from
the Trustee’s gross negligence or willful misconduct. Promptly after the receipt by the Trustee of notice of demand or claim or
the commencement of any action, suit or proceeding, pursuant to which the Trustee intends to seek indemnification under this Section
3(b), it shall notify the Company in writing of such claim (hereinafter referred to as the “Indemnified Claim”); provided,
however, that the Trustee’s failure to provide such notice shall not relieve the Company of its liability hereunder, except to
the extent that it is materially prejudiced by such failure. The Trustee shall have the right to conduct and manage the defense against
such Indemnified Claim, provided, that the Trustee shall obtain the consent of the Company with respect to the selection of counsel,
which consent shall not be unreasonably withheld. The Trustee may not agree to settle any Indemnified Claim without the prior written
consent of the Company, which consent shall not be unreasonably withheld or delayed. The Company may participate in such action with
its own counsel.

 

(c) Pay the Trustee an initial acceptance fee, an annual fee and a transaction processing fee for
each disbursement made pursuant to Section 2(a) as set forth on Schedule A hereto, which fees shall be subject to modification by the
parties from time to time. It is expressly understood that the Property shall not be used to pay such fees and further agreed that any
fees owed to the Trustee shall be deducted by the Trustee from the disbursements made to the Company pursuant to Section 1(i) solely
in connection with the consummation of the Company’s Business Combination. The Company shall pay the Trustee the initial acceptance
fee and first year’s fee at the consummation of the IPO and thereafter on the anniversary of the Effective Date. Except as set
forth in this Section 3(c), the Company shall not be responsible for any other fees or charges of the Trustee.

 

(d) In connection with any vote of the Company’s shareholders regarding a Business Combination,
provide to the Trustee an affidavit or certificate of a firm regularly engaged in the business of soliciting proxies and/or tabulating
shareholder votes verifying the vote of the Company’s shareholders regarding such Business Combination.

 

(e) In the event that the Company directs the Trustee to commence liquidation of the Trust Account
pursuant to Section 1(i), the Company agrees that it will not direct the Trustee to make any payments that are not specifically authorized
by this Agreement.

 

    3

     

    

 

4. Limitations of Liability. The Trustee shall have no responsibility or liability to:

 

(a) Take any action with respect to the Property, other than as directed in Sections 1 and 2 hereof
and the Trustee shall have no liability to any party except for liability arising out of its own gross negligence or willful misconduct;

 

(b) Institute any proceeding for the collection of any principal and income arising from, or institute,
appear in or defend any proceeding of any kind with respect to, any of the Property unless and until it shall have received instructions
from the Company given as provided herein to do so and the Company shall have advanced or guaranteed to it funds sufficient to pay any
expenses incident thereto;

 

(c) Change the investment
of any Property, other than in compliance with Section 1(c), and in no event shall the Trustee be liable for the selection of investments
or for investment losses incurred thereon or for losses incurred as a result of the liquidation of any such investment prior to its maturity
date or the failure of the Company to provide timely written investment instruction;

 

(d) Refund any depreciation in principal of any Property;

 

(e) Assume that the authority of any person designated by the Company to give instructions hereunder
shall not be continuing unless provided otherwise in such designation, or unless the Company shall have delivered a written revocation
of such authority to the Trustee;

 

(f) The other parties hereto or to anyone else for any action taken or omitted by it, or any action
suffered by it to be taken or omitted, in good faith and in the exercise of its own best judgment, except for its gross negligence or
willful misconduct. The Trustee 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 Trustee), 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 Trustee, in good faith, to be genuine and to be signed or presented by the proper person
or persons. The Trustee shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this Agreement
or any of the terms hereof, unless evidenced by a written instrument delivered to the Trustee signed by the proper party or parties and,
if the duties or rights of the Trustee are affected, unless it shall give its prior written consent thereto;

 

(g) Verify the correctness of the information set forth in the Registration Statement or to confirm
or assure that any acquisition made by the Company or any other action taken by it is as contemplated by the Registration Statement;

 

(h) File local, state and/or federal tax returns or information returns with any taxing authority
on behalf of the Trust Account and payee statements with the Company documenting the taxes, if any, payable by the Company or the Trust
Account, relating to the income earned on the Property;

 

(i) Pay any taxes on behalf of the Trust Account (it being expressly understood that the Property
shall not be used to pay any such taxes and that such taxes, if any, shall be paid by the Company from funds not held in the Trust Account
or released to it under Section 2(a) hereof);

 

(j) Imply obligations, perform duties, inquire or otherwise be subject to the provisions of any
agreement or document other than this Agreement and that which is expressly set forth herein; and

 

(k) Verify calculations, qualify or otherwise approve Company requests for distributions pursuant
to Section 1(i), 1(k) or 2(a) above.

 

5. Trust Account Waiver. The Trustee has no right of set-off or any right, title, interest
or claim of any kind (“Claim”) to, or to any monies in, the Trust Account, and hereby irrevocably waives any Claim to, or
to any monies in, the Trust Account that it may have now or in the future. In the event the Trustee has any Claim against the Company
under this Agreement, including, without limitation, under Section 3(b) or Section 3(c) hereof, the Trustee shall pursue such Claim solely
against the Company and its assets outside the Trust Account and not against the Property or any monies in the Trust Account.

 

    4

     

    

 

6. Termination. This Agreement shall terminate as follows:

 

(a) If the Trustee gives written notice to the Company that it desires to resign under this Agreement,
the Company shall use its reasonable efforts to locate a successor trustee during which time the Trustee shall act in accordance with
this Agreement. At such time that the Company notifies the Trustee that a successor trustee has been appointed by the Company and has
agreed to become subject to the terms of this Agreement, the Trustee shall transfer the management of the Trust Account to the successor
trustee, including but not limited to the transfer of copies of the reports and statements relating to the Trust Account, whereupon this
Agreement shall terminate; provided, however, that, in the event that the Company does not locate a successor trustee within ninety (90)
days of receipt of the resignation notice from the Trustee, the Trustee may submit an application to have the Property deposited with
any court in the State of New York or with the United States District Court for the Southern District of New York and upon such deposit,
the Trustee shall be immune from any liability whatsoever; or

 

(b) At such time that the Trustee has completed the liquidation of the Trust Account in accordance
with the provisions of Section 1(i) hereof, and distributed the Property in accordance with the provisions of the Termination Letter,
this Agreement shall terminate except with respect to Section 3(b).

 

7. 
Miscellaneous.

 

(a) The Company and the Trustee each acknowledge that the Trustee will follow the security procedures
set forth below with respect to funds transferred from the Trust Account. The Company and the Trustee will each restrict access to confidential
information relating to such security procedures to authorized persons. Each party must notify the other party immediately if it has
reason to believe unauthorized persons may have obtained access to such information, or of any change in its authorized personnel. In
executing funds transfers, the Trustee will rely upon all information supplied to it by the Company, including account names, account
numbers and all other identifying information relating to a beneficiary, beneficiary’s bank or intermediary bank. The Trustee shall
not be liable for any loss, liability or expense resulting from any error in the information or transmission of the wire.

 

(b) This Agreement shall be governed by and construed and enforced 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. It may be executed in several original or facsimile counterparts, each one of which shall constitute an
original, and together shall constitute but one instrument.

 

(c) This Agreement contains the entire agreement and understanding of the parties hereto with respect
to the subject matter hereof. Except for Sections 1(i), 1(k), 1(l), 1(m), 7(c) and 7(g) (which may only be amended with the approval
of the holders of at least a majority of the outstanding shares of Common Stock, this Agreement or any provision hereof may only be changed,
amended or modified by a writing signed by each of the parties hereto; provided, however, that no such change, amendment or modification
may be made without the prior written consent of the Representative. As to any claim, cross-claim or counterclaim in any way relating
to this Agreement, each party waives the right to trial by jury. The Trustee may require from Company counsel an opinion as to the propriety
of any proposed amendment.

 

(d) The parties hereto consent to the jurisdiction and venue of any state or federal court located
in the City of New York, Borough of Manhattan, for purposes of resolving any disputes hereunder.

  

(e) Any notice, consent or request to be given in connection with any of the terms or provisions
of this 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 Trustee, to:

 

American
Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, NY 11219

Attn: Relationship Management

E-mail:
admin12@astfinancial.com

 

    5

     

    

 

if
to the Company, to:

 

Redwoods Acquisition Corp.

1115 Broadway, 12th Floor

New York, NY 10010

Attn: Jiande Chen, Chief Executive Officer

E-mail: jiande.chen@rewoodsac.com

 

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

 

Chardan Capital Markets, LLC

17 State Street, Suite 2130

New York, NY 10004

Attn: George Kaufman

E-mail: gkaufman@chardancm.com

 

and:

 

Loeb
& Loeb LLP

345 Park Avenue

New York, NY 10154

Attn: Giovanni Caruso, Esq.

E-mail: gcaruso@loeb.com

 

and:

 

Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas

New York, NY 10105

Attn: Stuart Neuhauser, Esq.

E-mail: sneuhauser@egsllp.com

 

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 7(e). 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.

 

(f) This Agreement may not be assigned by the Trustee without the prior consent of the Company.

 

(g) Each of the Trustee and the Company hereby represents that it has the full right and power
and has been duly authorized to enter into this Agreement and to perform its respective obligations as contemplated hereunder. The Trustee
acknowledges and agrees that it shall not make any claims or proceed against the Trust Account, including by way of set-off, and shall
not be entitled to any funds in the Trust Account under any circumstance.

  

(h) This Agreement is the joint product of the Company and the Trustee and each provision hereof
has been subject to the mutual consultation, negotiation and agreement of such parties and shall not be construed for or against any
party hereto.

 

(i) This Agreement may be executed in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and the same instrument. Delivery of a signed counterpart
of this Agreement by facsimile or electronic transmission shall constitute valid and sufficient delivery thereof.

 

(j) Each of the Company and the Trustee hereby acknowledges that the Representative and the underwriters
in the IPO are third party beneficiaries of this Agreement.

 

(k) Except as specified herein, no party to this Agreement may assign its rights or delegate its
obligations hereunder to any other person or entity.

 

[Signature
Page Follows]

 

    6

     

    

 

IN
WITNESS WHEREOF, the parties have duly executed this Investment Management Trust Agreement as of the date first written above.

 

	 	AMERICAN STOCK TRANSFER & TRUST COMPANY,
    LLC, as Trustee
	 	 
	 	By:	            
	 	 	Name: 	               
	 	 	Title: 	 

 

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

 

Signature
Page to Investment Management Trust Agreement

 

    

     

    

 

SCHEDULE
A

 

	Fee
    Item	Time
    and method of payment	Amount
	Initial
    acceptance fee	Initial
    closing of IPO by wire transfer	[_______]
	Annual
    fee	First
    year ($[______]), on the initial closing of IPO by wire transfer; thereafter on the anniversary of the effective date of the IPO
    by wire transfer or check	[_______]
	Transaction
    processing fee for disbursements to Company under Section 2	Billed
    to the Company following disbursement made to Company under Section 2	[_______]
	Paying
    Agent services as required pursuant to Section 1(i)	Billed
    to Company upon delivery of service pursuant to Section 1(i)	Prevailing
    rates

  

    

     

    

 

EXHIBIT
A

 

[Letterhead
of Company]

 

[Insert date]

 

American
Stock Transfer & Trust Company, LLC

6201
15th Avenue

Brooklyn,
NY 11219

Attn:
Relationship Management

 

	 	Re:	Trust Account No. [●]
    − Termination Letter

 

Ladies
and Gentlemen:

 

Pursuant
to Section 1(i) of the Investment Management Trust Agreement between Redwoods Acquisition Corp. (“Company”) and American
Stock Transfer & Trust Company, LLC (“Trustee”), dated as of [●], 2022 (“Trust Agreement”), this is
to advise you that the Company has entered into an agreement with [___________] (“Target Business”) to consummate a business
combination with Target Business (“Business Combination”) on or about [insert date]. The Company shall notify
you at least 48 hours in advance of the actual date of the consummation of the Business Combination (“Consummation Date”).
Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Trust Agreement.

 

In
accordance with the terms of the Trust Agreement, we hereby authorize you to liquidate the Trust Account investments and to transfer
the proceeds to the above-referenced account to the effect that, on the Consummation Date, all of funds held in the Trust Account will
be immediately available for transfer to the account or accounts that the Company shall direct on the Consummation Date. It is acknowledged
and agreed that while the funds are on deposit in the trust operating account awaiting distribution, the Company will not earn any interest
or dividends.

 

On
the Consummation Date (i) counsel for the Company shall deliver to you written notification that the Business Combination has been consummated,
and (ii) the Company shall deliver to you (a) a certificate by its Chief Executive Officer, which verifies the vote of the Company’s
shareholders in connection with the Business Combination if a vote is held and (b) joint written instructions from the Company and Chardan
Capital Markets, LLC with respect to the transfer of the funds held in the Trust Account, which must provide for the disbursement of
no less than $10.10 per share plus the amount per share deposited in the Trust Account per Extension Letter to redeeming Public Shareholders
(“Instruction Letter”). You are hereby directed and authorized to transfer the funds held in the Trust Account immediately
upon your receipt of the counsel’s letter and the Instruction Letter, in accordance with the terms of the Instruction Letter. In
the event that certain deposits held in the Trust Account may not be liquidated by the Consummation Date without penalty, you will notify
the Company of the same and the Company shall direct you as to whether such funds should remain in the Trust Account and distributed
after the Consummation Date to the Company. Upon the distribution of all the funds in the Trust Account pursuant to the terms hereof,
the Trust Agreement shall be terminated.

 

In
the event that the Business Combination is not consummated on the Consummation Date described in the notice thereof and we have not notified
you on or before the original Consummation Date of a new Consummation Date, then upon receipt by the Trustee of written instructions
from the Company, the funds held in the Trust Account shall be reinvested as provided in the Trust Agreement on the business day immediately
following the Consummation Date as set forth in the notice.

 

    A-1

     

    

 

	 	Very truly yours,
	 	 
	 	REDWOODS ACQUISITION CORP.
	 	By:	 
	 	 	Name: 	                   
	 	 	Title:	 

  

	 	By:	 
	 	 	Name: 	         
	 	 	Title: 	 

 

Acknowledged
and Agreed:

Chardan
Capital Markets, LLC

 

	By:	 	 
	Name: 	 	 
	Title:	 	 

 

    A-2

     

    

 

EXHIBIT
B

 

[Letterhead
of Company]

 

[Insert date]

 

American
Stock Transfer & Trust Company, LLC

6201
15th Avenue

Brooklyn,
NY 11219

Attn:
Relationship Management

 

	 	Re:	Trust Account No. [●]
    − Termination Letter

 

Ladies
and Gentlemen:

 

Pursuant
to Section 1(i) of the Investment Management Trust Agreement between Redwoods Acquisition Corp. (“Company”) and American
Stock Transfer & Trust Company, LLC (“Trustee”), dated as of [●], 2022 (“Trust Agreement”), this is
to advise you that the Company has been unable to effect a Business Combination with a Target Company within the time frame specified
in the Company’s Charter, as described in the Company’s prospectus relating to its IPO. Capitalized terms used herein and
not otherwise defined shall have the meanings set forth in the Trust Agreement.

 

In
accordance with the terms of the Trust Agreement, we hereby authorize you to liquidate all the Trust Account investments and to transfer
the total proceeds to the trust operating account to await distribution to the Public Shareholders. The Company has selected [__________,
20__] as the record date for the purpose of determining the Public Shareholders entitled to receive their share of the liquidation proceeds.
It is acknowledged that no interest will be earned by the Company on the liquidation proceeds while on deposit in the trust operating
account. You agree to be the Paying Agent of record and in your separate capacity as Paying Agent, to distribute said funds directly
to the Public Shareholders in accordance with the terms of the Trust Agreement and the Charter. Upon the distribution of all the funds
in the Trust Account, your obligations under the Trust Agreement shall be terminated.

 

	 	Very truly yours,
	 	 
	 	REDWOODS ACQUISITION CORP.
	 	 
	 	By:	 
	 	 	Name: 	                  
	 	 	Title:	 

  

	 	By:	 
	 	 	Name: 	            
	 	 	Title: 	 

 

		cc:	Chardan
Capital Markets, LLC

 

    B-1

     

    

 

EXHIBIT
C

 

[Letterhead
of Company]

 

[Insert
date]

 

American
Stock Transfer & Trust Company, LLC

6201
15th Avenue

Brooklyn,
NY 11219

Attn:
Relationship Management

 

	 	Re:	Trust Account No. [●]
    − Tax Withdrawal Instruction Letter

 

Pursuant
to Section 2(a) of the Investment Management Trust Agreement between Redwoods Acquisition Corp. (“Company”) and American
Stock Transfer & Trust Company, LLC (“Trustee”), dated as of [●], 2022 (“Trust Agreement”), the Company
hereby requests that you deliver to the Company [$      ] of
the interest income earned on the Property as of the date hereof. The Company needs such funds to pay for its tax obligations. In accordance
with the terms of the Trust Agreement, you are hereby directed and authorized to transfer (via wire transfer) such funds promptly upon
your receipt of this letter to the Company’s operating account at:

 

[WIRE
INSTRUCTION INFORMATION]

 

	 	REDWOODS ACQUISITION CORP.
	 	 
	 	By:	 
	 	 	Name: 	                
	 	 	Title:	 

 

		cc:	Chardan
Capital Markets, LLC

 

    C-1

     

    

 

EXHIBIT
D

 

[Letterhead
of Company]

 

[Insert
date]

 

American
Stock Transfer & Trust Company, LLC

6201
15th Avenue

Brooklyn,
NY 11219

Attn:
Relationship Management

 

	 	Re:	Trust Account No. [●]
    − Extension Letter

 

Ladies
and Gentlemen:

 

Pursuant
to Section 1(j) of the Investment Management Trust Agreement between Redwoods Acquisition Corp. (“Company”) and American
Stock Transfer & Trust Company, LLC, dated as of [●], 2022 (“Trust Agreement”), this is to advise you that the
Company is extending the time available in order to consummate a Business Combination with the Target Businesses for an additional [three
(3) months], from ______________ to ____________ (the “Extension”).

 

This
Extension Letter shall serve as the notice required with respect to the Extension prior to the Applicable Deadline. Capitalized words
used herein and not otherwise defined shall have the meanings ascribed to them in the Trust Agreement.

 

In
accordance with the terms of the Trust Agreement, we hereby authorize you to deposit [$1,000,000] [(or $1,150,000 if the underwriters’
over-allotment option was exercised in full)], which will be wired to you, into the Trust Account investments upon receipt.

 

	 	Very truly yours,
	 	 
	 	REDWOODS ACQUISITION CORP.
	 	 
	 	By:	 
	 	 	Name: 	               
	 	 	Title:	 

 

	 	cc:	Chardan Capital Markets,
    LLC

 

    D-1

     

    

 

EXHIBIT
E

 

[Letterhead
of Company]

 

[Insert
date]

 

American
Stock Transfer & Trust Company, LLC

6201
15th Avenue

Brooklyn,
NY 11219

Attn:
Relationship Management

 

	 	Re:	Trust Account No. [●]
    – Amendment Notification Letter

 

Ladies
and Gentlemen:

 

Reference
is made to that certain Investment Management Trust Agreement between Redwoods Acquisition Corp. (“Company”) and American
Stock Transfer & Trust Company, LLC, dated as of [●], 2022 (“Trust Agreement”). Capitalized words used herein and
not otherwise defined shall have the meanings ascribed to them in the Trust Agreement.

 

Pursuant
to Section 1(k) of the Trust Agreement, this is to advise you that the Company has sought an Amendment. Accordingly, in accordance with
the terms of the Trust Agreement, we hereby authorize you to liquidate a sufficient portion of the Trust Account and to transfer [$      ]
of the proceeds of the Trust to the trust operating account for distribution to the stockholders that have requested conversion of their
shares in connection with such Amendment. The remaining funds shall be reinvested by you as previously instructed.

 

	 	REDWOODS ACQUISITION CORP.
	 	 
	 	By:	 
	 	 	Name: 	                    
	 	 	Title:	 

 

	cc:	Chardan
    Capital Markets, LLC

 

 

E-1

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