Document:

Exhibit 10.2

 

INVESTMENT MANAGEMENT TRUST AGREEMENT

 

This Investment Management
Trust Agreement (this “Agreement”) is made as of March 30, 2022 by and between Redwoods Acquisition Corp. (the “Company”)
and Continental Stock Transfer & Trust Company, a New York limited purpose trust company as trustee (the “Trustee”).

 

WHEREAS, the Company’s
registration statement on Form S-1, No. 333-263407 (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 or in money market funds meeting the conditions of paragraph (d) of Rule 2a-7 promulgated under the Investment
Company Act, which invest only in direct U.S. government treasury obligations and/or (ii) cause the brokerage institution referred to
in 1(a) above to place the Property in a cash demand deposit account; it being understood that unless the Company instructs the Trustee
to do either of the foregoing, the Trust Account will earn no interest while account funds are uninvested awaiting the Company’s
instructions hereunder; while the funds are invested or uninvested, and the Trustee may earn bank credits or other consideration.

 

     

     

    

 

(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.

 

    3

     

    

 

(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.

 

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);

 

(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:

 

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004-1561

Attn: Francis Wolf and Celeste Gonzalez

E-mail: fwolf@continentalstock.com; cgonzalez@continentalstock.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@redwoodsac.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)  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.

  

(g)  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.

 

(h)  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.

 

(i)  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.

 

(j)  Except
as specified herein, no party to this Agreement may assign its rights or delegate its obligations hereunder to any other person or entity
without the written consent of the other party.

 

[Signature Page Follows]

 

    6

     

    

 

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

 

	 	CONTINENTAL STOCK TRANSFER & TRUST

                    COMPANY, as Trustee

	 	 
	 	By:	/s/ Francis Wolf
	 	 	Name: 	Francis Wolf
	 	 	Title: 	Vice President
	 	 	 	 
	 	REDWOODS ACQUISITION CORP.
	 	 
	 	By:	/s/ Jiande Chen
	 	 	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	 	$	3,500.00	 
	Annual fee	 	First year ($10,000.00), 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	 	$	10,000.00	 
	Transaction processing fee for disbursements to Company under Section 2	 	Billed to the Company following disbursement made to Company under Section 2	 	$	2,500.00	 
	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]

 

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004-1561

Attn: Francis Wolf and Celeste Gonzalez

 

	 	Re:	Trust Account − Termination Letter

 

Dear Mr. Wolf and Ms. Gonzalez:

 

Pursuant to Section 1(i) of
the Investment Management Trust Agreement between Redwoods Acquisition Corp. (“Company”) and Continental Stock Transfer &
Trust Company (“Trustee”), dated as of March 30, 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 72 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 at JPMorgan Chase Bank, N.A., 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]

 

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004-1561

Attn: Francis Wolf and Celeste Gonzalez

 

	 	Re:	Trust Account − Termination Letter

 

Dear Mr. Wolf and Ms. Gonzalez:

 

Pursuant to Section 1(i) of
the Investment Management Trust Agreement between Redwoods Acquisition Corp. (“Company”) and Continental Stock Transfer &
Trust Company (“Trustee”), dated as of March 30, 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]

 

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004-1561

Attn: Francis Wolf and Celeste Gonzalez

 

	 	Re:	Trust Account − Tax Withdrawal Instruction Letter

 

Dear Mr. Wolf and Ms. Gonzalez:

 

Pursuant to Section 2(a) of
the Investment Management Trust Agreement between Redwoods Acquisition Corp. (“Company”) and Continental Stock Transfer &
Trust Company (“Trustee”), dated as of March 30, 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]

 

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004-1561

Attn: Francis Wolf and Celeste Gonzalez

 

	 	Re:	Trust Account − Extension Letter

 

Dear Mr. Wolf and Ms. Gonzalez:

 

Pursuant to Section 1(j) of
the Investment Management Trust Agreement between Redwoods Acquisition Corp. (“Company”) and Continental Stock Transfer &
Trust Company, dated as of March 30, 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]

 

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004-1561

Attn: Francis Wolf and Celeste Gonzalez

 

	 	Re:	Trust Account – Amendment Notification Letter

 

Dear Mr. Wolf and Ms. Gonzalez:

 

Reference is made to that
certain Investment Management Trust Agreement between Redwoods Acquisition Corp. (“Company”) and Continental Stock Transfer
& Trust Company, dated as of March 30, 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-1Exhibit 10.3

 

STOCK ESCROW AGREEMENT

 

This STOCK ESCROW AGREEMENT,
dated as of March 30, 2022 (this “Agreement”), by and among REDWOODS ACQUISITION CORP., a Delaware corporation (the “Company”),
the initial shareholders listed on the signature pages hereto (collectively, the “Initial Shareholders”), and CONTINENTAL
STOCK TRANSFER & TRUST COMPANY, a New York limited purpose trust company (the “Escrow Agent”).

 

WHEREAS, the Company has entered
into an Underwriting Agreement, dated as of March 30, 2022 (the “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 10,000,000 units (“Units”) of the Company, plus an
additional 1,500,000 Units if the Underwriters exercise their over-allotment option in full. Each Unit consists of one share of common
stock of the Company, par value $0.0001 per share (the “Common Stock”), one redeemable warrant, each redeemable warrant entitling
its holder to purchase one share of Common Stock at an exercise price of $11.50 per share of Common Stock, and one right to receive one-tenth
(1/10) of a share of common stock upon the consummation of an initial business combination, all as more fully described in the Company’s
final Prospectus, dated March 30, 2022 (“Prospectus”), comprising part of the Company’s Registration Statement on Form
S-1 (File No. 333-263407) under the Securities Act of 1933, as amended (“Registration Statement”), declared effective on March
30, 2022 (“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 with authority and power to transfer the Escrow Shares, and the Escrow Agent hereby accepts such appointment
and agrees to act in accordance with and subject to such terms without the need for any further guaranteed share power from the Initial
Shareholders.

 

2. Deposit of Escrow
Shares. On or prior to the date hereof, the Escrow Shares shall have been issued to each of the Initial Shareholders in book-entry
form representing such Initial Shareholder’s respective Escrow Shares, to be held and disbursed subject to the terms and conditions
of this Agreement. Each of the Initial Shareholders acknowledges that 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 written 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 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 cancel 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 written
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 cancellation of the Escrow Shares in accordance with this Section 3.1.

 

     

     

    

 

3.2 Notwithstanding Section
3.1, if the Underwriters do not exercise their over-allotment option to purchase an additional 1,500,000 Units of the Company in full
within 45 days of the date of the Prospectus (as described in the Underwriting Agreement), the sponsor, Redwoods Capital LLC, agrees that
the Escrow Agent shall return to the Company for cancellation, at no cost, the number of Escrow Shares held by it 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. The Company
shall promptly provide written 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. The Initial Shareholders hereby
irrevocably constitute and appoint Escrow Agent to transfer the said Escrow Shares on the books of the Company with full power of substitution
in the premises.

 

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.

 

4.3 Restrictions on
Transfer. During the Escrow Period, the only permitted transfers of the Escrow Shares will be for transfers (i) to the Company’s
pre-IPO shareholders, or to the Company’s officers, directors, advisors and employees, (ii) transfers to an Initial Shareholder’s
affiliates or its members upon its liquidation, (iii) to relatives and trusts for estate planning purposes, (iv) by virtue of the laws
of descent and distribution upon death, (v) pursuant to a qualified domestic relations order, (vi) by private sales made at prices no
greater than the price at which the Escrow Shares were originally purchased, or (vii) to the Company for cancellation in connection with
the consummation of a Business Combination or for the cancellation of up to 375,000 shares of Common Stock subject to forfeiture to the
extent that the Underwriters’ over-allotment is not exercised in full or in part, in each case (except for clause vii) 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 forfeiture, as the case may be, and of the Insider Letter (as defined below) signed by the Initial Shareholder
transferring the Escrow Shares, as well as the other applicable restrictions
and agreements of the holders of the Escrow Shares.

 

4.4 Insider Letters. Each
of the Initial Shareholders has executed a letter agreement with the Company, dated as of the date hereof, 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 in good faith 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. 

 

    2

     

    

 

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

 

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

 

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

 

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 and approved by Chardan, which approval will
not be unreasonably withheld, conditioned or delayed, 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.

  

    3

     

    

 

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 change, Chardan and the Escrow Agent.

 

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:	Redwoods Acquisition Corp.
	 	 	
    1115 Broadway, 12th Floor

    New York, NY 10010

    Attn: Jiande Chen, Chief Executive Officer

	 	 	 
	 	If to an Initial Shareholder, to his, her or its 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, NY 10004-1561
	 	 	Attn: Legal Department
	 	 	 
	 	A copy (which copy shall not constitute notice) sent hereunder shall be sent to:

  

	 	 	Chardan Capital Markets LLC
	 	 	17 State Street, Suite 2130
	 	 	New York, NY 10004
	 	 	Attn: Jack Liu
	 	 	Facsimile: (646) 465-9039

   

	 	and:	
    Ellenoff Grossman & Schole LLP

    1345 Avenue of the Americas

    New York, New York 10105

    Attn: Stuart Neuhauser, Esq.

    Facsimile: (212) 370-7889

 

	 	and:	
    Loeb & Loeb LLP

    345 Park Avenue

    New York, New York 10154

    Attn: Giovanni Caruso, Esq.

    Facsimile: (212) 407-4990

  

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]

 

    4

     

    

 

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

 

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

 

	 	INITIAL SHAREHOLDERS:
	 	 
	 	 	Redwoods Capital LLC
	 	 	 
	 	 	/s/ Min
    Gan 
	 	 	Name: 	Min Gan 
	 	 	Title:	Authorized Representative 
	 	 	 	 
	 	 	/s/ Jiande
    Chen
	 	 	Jiande Chen
	 	 	 
	 	 	/s/ Edward
    Cong Wang
	 	 	Edward Cong Wang
	 	 	 
	 	 	/s/ Raymond
    J. Gibbs
	 	 	Raymond J. Gibbs
	 	 	 
	 	 	/s/ Wei
    Kwang Ng
	 	 	Wei Kwang Ng
	 	 	 
	 	 	/s/ Hong
    Li
	 	 	Hong Li
	 	 	 
	 	ESCROW
    AGENT:

	 	 
	 	CONTINENTAL STOCK TRANSFER & TRUST COMPANY
	 	 
	 	By:	/s/ Douglas
    Reed
	 	 	Name: 	Douglas Reed
	 	 	Title:	Vice President

 

Signature Page to Stock
Escrow Agreement

 

     

     

    

 

EXHIBIT A

 

Initial Shareholders

 

	Name and Address of Initial1 Shareholder	 	Number of Shares	 	 	Date of Insider Letter
	Redwoods Capital LLC	 	 	2,700,000	 	 	March 30, 2022
	Jiande Chen	 	 	45,000	 	 	March 30, 2022
	Edward Cong Wang	 	 	35,000	 	 	March 30, 2022
	Raymond J. Gibbs	 	 	35,000	 	 	March 30, 2022
	Wei Kwang Ng	 	 	30,000	 	 	March 30, 2022
	Hong Li	 	 	30,000	 	 	March 30, 2022

 

 

	1	The address of each of the individuals is c/o, Redwoods Acquisition
Corp., 1115 Broadway, 12th Floor, New York, NY 10010.

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