0001072613-05-000779.txt : 20120615 0001072613-05-000779.hdr.sgml : 20120615 20050328172158 ACCESSION NUMBER: 0001072613-05-000779 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20050328 DATE AS OF CHANGE: 20050328 GROUP MEMBERS: GIBBS HOLDINGS, LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: REDWOOD MICROCAP FUND INC CENTRAL INDEX KEY: 0000742094 IRS NUMBER: 840937822 FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-35849 FILM NUMBER: 05707335 BUSINESS ADDRESS: STREET 1: 6180 LEHMAN DR STREET 2: STE 103 CITY: COLORADO SPRINGS STATE: CO ZIP: 80918 BUSINESS PHONE: 7195932111 MAIL ADDRESS: STREET 1: 6180 LEHMAN DR STREET 2: STE 103 CITY: COLORADO SPRINGS STATE: CO ZIP: 80918 FORMER COMPANY: FORMER CONFORMED NAME: INFINITY SPECULATIVE FUND INC DATE OF NAME CHANGE: 19911105 FORMER COMPANY: FORMER CONFORMED NAME: PENNY STOCK FUND OF NORTH AMERICA INC DATE OF NAME CHANGE: 19910801 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Gibbs John D CENTRAL INDEX KEY: 0001318279 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: BUSINESS PHONE: 580-226-6700 MAIL ADDRESS: STREET 1: 16 E STREET SOUTHWEST CITY: ARDMORE STATE: OK ZIP: 73402 SC 13D 1 schedule13-d_13373.txt SCHEDULE 13-D ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 Redwood Microcap Fund, Inc. (Name of Issuer) Common Stock, Par Value $0.001 Per Share (Title of Class of Securities) (CUSIP Number 758058 10 1) John Gibbs 807 Wood n Creek Ardmore, OK 74301 (580) 226-7534 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) March 31, 2004 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss. ss. 240.13D-1(e), 240.13D-1(f) or 240.13D-1(g), check the following box. [ ] ================================================================================ Page 1 of 8 Pages -------------------- ----------------- CUSIP NO 758058 10 1 13D Page 2 of 8 Pages -------------------- ----------------- -------------------------------------------------------------------------------- 1. Names of Reporting Persons: John Gibbs I.R.S. Identification Nos. of Above Persons (entities only) ----- ------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) (b) ----- ------------------------------------------------------------------------- 3. SEC Use Only ----- ------------------------------------------------------------------------- 4. Source of Funds PF, OO ----- ------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 29(d) or 2(e) [ ] ----- ------------------------------------------------------------------------- 6. Citizenship or Place of Organization: United States -------------------------------------------------------------------------------- 7. Sole Voting Power 824,394 Number of Shares Beneficially ----- ------------------------------------------ Owned by 8. Shared Voting Power 1,195,576 Each Reporting ----- ------------------------------------------ Person 9. Sole Dispositive Power 824,394 With ----- ------------------------------------------ 10. Shared Dispositive Power 1,195,576 ----- ------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 2,019,970 ----- ------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row 11 Excludes Certain Shares (See Instructions) [ ] ----- ------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row 11: 61.3% ----- ------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions): IN -------------------------------------------------------------------------------- Page 2 of 8 Pages -------------------- ----------------- CUSIP NO 758058 10 1 13D Page 3 of 8 Pages -------------------- ----------------- -------------------------------------------------------------------------------- 1. Names of Reporting Persons: Gibbs Holdings, LLC I.R.S. Identification Nos. of Above Persons (entities only): 20-2541867 ----- ------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) (b) ----- ------------------------------------------------------------------------- 3. SEC Use Only ----- ------------------------------------------------------------------------- 4. Source of Funds OO ----- ------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items 29(d) or 2(e) [ ] ----- ------------------------------------------------------------------------- 6. Citizenship or Place of Organization: United States -------------------------------------------------------------------------------- 7. Sole Voting Power 0 Number of Shares Beneficially ----- ------------------------------------------ Owned by 8. Shared Voting Power 989,176 Each Reporting ----- ------------------------------------------ Person 9. Sole Dispositive Power 0 With ----- ------------------------------------------ 10. Shared Dispositive Power 989,176 ----- ------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 989,176 ----- ------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row 11 Excludes Certain Shares (See Instructions) [ ] ----- ------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row 11: 39.6% ----- ------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions): OO -------------------------------------------------------------------------------- Page 3 of 8 Pages -------------------- ----------------- CUSIP NO 758058 10 1 13D Page 4 of 8 Pages -------------------- ----------------- ITEM 1. SECURITY AND ISSUER (a) Name of Issuer: Redwood Microcap Fund, Inc. ("RWMC") (b) Address of Issuer's Principal Executive Offices: 6180 Lehman Drive, #103 Colorado Springs, Colorado 80918 ITEM 2. Identity and Background (a) Name of Persons Filing: John Gibbs ("Gibbs") and Gibbs Holdings, LLC ("Holdings"), an Oklahoma limited liability company, wholly-owned by John Gibbs, who is also its sole manager. Holdings was organized for the purpose of acquiring shares of RWMC. (b) Residence or business address: For both Gibbs and Holdings: 807 Wood n Creek Ardmore, OK 73401 (c) Principal occupation or employment: John Gibbs is President of TriPower Resources (oil and gas exploration and development) and Vice-President of TDP Energy Company (which owns 100% of TriPower). 16 E Street Southwest, Ardmore OK 73401 RWMC owns 57.5% of TDP Energy Company (d) During the last five years, the reporting person has been convicted in the following criminal proceeding(s) (excluding traffic violations or similar misdemeanors): None (e) During the last five years, the reporting person was a party to civil proceeding(s) of a judicial or administrative body of competent jurisdiction and as a result of such proceeding(s) was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws: None (f) Citizenship: United States Page 4 of 8 Pages -------------------- ----------------- CUSIP NO 758058 10 1 13D Page 5 of 8 Pages -------------------- ----------------- ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION: The consideration used for Gibbs' historical acquisitions of RWMC common stock consisted of shares of TDP Energy Company, the parent of TriPower Resources, Inc., which he sold to RWMC, personal funds and accrued interest on RWMC indebtedness owed to him. The consideration used by Holdings for purchases of RWMC common stock on March 24, 2005, as described below, consisted of cash obtained from loans from Gibbs and promissory notes payable to the sellers. ITEM 4. PURPOSE OF TRANSACTION At the time of the acquisition of the Convertible Note (and the underlying right to acquire shares of common stock on March 31, 2004) described in Item 5, Gibbs acquired the shares for investment purposes. Subsequent to June 2004, Gibbs began to evaluate possible transactions that might enable him to acquire a majority or all of RWMC. On March 24, 2005, Holdings entered into a stock purchase agreement ("Agreement") with John Power, Randy Butchard and Allan Williams (the "Shareholders") whereby Holdings acquired in a "first closing" 901,632 shares of RWMC common stock and agreed to acquire in a "second closing" an additional 670,731 shares of RWMC common stock for an aggregate purchase price of $2,515,781, or $1.60 per share, payable $375,000 in cash and $2,140,781 in promissory notes from Holdings to the Shareholders payable in quarterly installments of $150,000 beginning on the earlier of (i) the date Holdings acquires 100% of the stock of RWMC or (ii) March 24, 2006. The promissory notes are personally guaranteed by Gibbs and secured by the Convertible Note. In the first closing, Holdings paid or will pay $375,000 in cash and $1,067,611 in promissory notes and will pay in the second closing $1,703,170 in promissory notes. The purchase of the 670,731 shares in the second closing is subject to Federal Communications Commission approval of a sale of control of RWMC by reason of RWMC's ownership of control of a subsidiary which owns radio stations and associated FCC licenses. It is anticipated that such approval will be obtained within 60 days. Gibbs intends to acquire through Holdings 100% of RWMC and has agreed to make a cash tender offer to the remaining shareholders at a price of at least $1.60 per share as soon as practicable and to effect a merger at the tender offer price to purchase any shares not tendered. Effective March 24, 2005, John Power resigned as an officer and director of RWMC and its affiliated entities and John Gibbs was elected President of RWMC. The Board of RWMC consists of its existing remaining independent directors, Joseph O. Smith and Peter Hirschburg. Gibbs intends to continue the previously stated objective of RWMC, of terminating its registration as an investment company under the Investment Company Act of 1940 ("Act") which, if implemented, will result in RWMC's no longer being required to file Page 5 of 8 Pages -------------------- ----------------- CUSIP NO 758058 10 1 13D Page 6 of 8 Pages -------------------- ----------------- reports under the Act and the termination of trading of its common stock on the over-the-counter bulletin board. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER Gibbs acquired on March 31, 2004, beneficial ownership of 719,000 shares of common stock of RWMC, which he has the right to acquire on conversion of a RWMC convertible note in the amount of $1,230,000 ("Convertible Note") issued to him in 2001 which first became convertible on March 31, 2004. The conversion price for the shares is $1.71 per share. The Convertible Note was issued to Gibbs in exchange for the sale of 15% of the outstanding stock of TDP Energy Company in an arm's length negotiated transaction between Mr. Gibbs and RWMC. Gibbs acquired 87,444 shares for accrued interest on the Convertible Note during the period from original issuance in 2001 through March 31, 2003. Gibbs also acquired 29,200 shares in open market transactions at various prices during the period between December 1996 and February 2004. At March 31, 2004, Gibbs beneficially owned with sole voting and investment power an aggregate of 835,744 shares of common stock, including the 795,194 shares he has the right to acquire upon conversion of, or as interest on, the Convertible Note. On September 30, 2004, Gibbs obtained the right to acquire an additional 76,194 shares of common stock issuable to him for accrued interest of $110,801 on the Convertible Note through September 30, 2004. By reason of the acquisition of the 901,632 shares on March 24, 2005, Gibbs beneficially owns 2,019,970 shares of RWMC common stock, including 795,194 shares he has the right to acquire on conversion of the Convertible Note and for accrued interest through September 30, 2004. Of these shares, 989,176 are owned by Holdings with shared voting and dispositive power, 206,400 shares are owned by TriPower with shared voting and investment power and the balance are owned by Gibbs with sole voting and dispositive power. Upon acquisition by Holdings of the remaining 670,731 shares under the Agreement, Gibbs will beneficially own a total of 2,690,701 shares of RWMC common stock, including the 795,194 shares he has the right to acquire, representing 81.7% of the shares of RWMC outstanding, including the shares he has the right to acquire. Of these 1,659,907 shares will be owned with shared voting and investment power with Holdings, 206,400 shares with shared voting and investment power with TriPower and the balance with sole voting and investment power. Excluding the shares which Gibbs has the right to acquire, as of March 24, 2005, Gibbs beneficially owns 1,224,776 shares of RWMC common stock, representing 49.0% of the shares outstanding. After the acquisition of the remaining 670,731 shares, Gibbs will beneficially own 1,895,507 shares, representing 75.8% of the shares outstanding. Page 6 of 8 Pages -------------------- ----------------- CUSIP NO 758058 10 1 13D Page 7 of 8 Pages -------------------- ----------------- ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER As described in Item 2, Holdings has a contract to acquire an additional 670,731 shares of RWMC from the Shareholders after Federal Communications Commission approval of such acquisition. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS The following are included as exhibits to this report: NO. DESCRIPTION 1. Stock Purchase Agreement dated March 24, 2005 between Gibbs Holdings, LLC and the Shareholders named therein. 2. Form of Pledge and Security Agreement between John Gibbs and the Shareholders. Page 7 of 8 Pages -------------------- ----------------- CUSIP NO 758058 10 1 13D Page 8 of 8 Pages -------------------- ----------------- SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: March 25, 2005. /s/ John Gibbs -------------------------------- John Gibbs GIBBS HOLDINGS, LLC /s/ John Gibbs --------------------------- By: John Gibbs, Manager Page 8 of 8 Pages EX-1 2 exhibit1_13373.txt STOCK PURCHASE AGREEMENT EXHIBIT 1 --------- STOCK PURCHASE AGREEMENT ------------------------ This STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered into effective as of the 24th day of March, 2005, by and among Gibbs Holdings, LLC ("Purchaser") and those individual Shareholders who have executed counterparts of this Agreement (each individually referred to herein as a "Shareholder" and collectively the "Shareholders"). W I T N E S S E T H: ------------------- WHEREAS, the Shareholders collectively own 1,572,363 shares of the common stock (the "Common Stock") of Redwood Microcap Fund, Inc. (the "Company" or "RWMC"), which shares constitute 62.9% of the issued and outstanding shares of capital stock of the Company (the "Shares"); and WHEREAS, RWMC owns greater than a 50% equity interest in various entities (the Affiliated Entities"); and WHEREAS, Purchaser desires to purchase the Shares and Shareholders desire to sell the Shares to Purchaser (the "Acquisition"). In consideration of the foregoing and of the mutual agreements contained in this Agreement, the parties agree as follows: ARTICLE I THE ACQUISITION 1.01 The Acquisition. Purchaser shall purchase the Shares and Shareholders shall sell and deliver the Shares to Purchaser, free and clear of all liens, security interests, pledges, encumbrances, adverse claims and demands of every kind, character and description whatsoever. 1.02 Purchase Price. The purchase price that Purchaser shall pay to Shareholders for the Shares shall be $1.60 per share or a total of Two Million Five Hundred Fifteen Thousand Seven Hundred Eighty-One and no/100 Dollars ($2,515,781) payable $375,000 in cash to the Shareholders, pro rata, and the balance of $2,140,781 by promissory notes in the form attached as Exhibit A payable to the individual Shareholders in the amounts as set forth in Exhibit B. The promissory notes shall be personally guaranteed by John Gibbs, the owner of Purchaser, using the form of guaranty attached as Exhibit C. 1.03 Closings and Closing Dates. The sale and purchase of the Shares shall be consummated in two separate closings. In the first closing ("First Closing") which will occur simultaneously with the execution of this Agreement or in installments as Shares are delivered, Purchaser shall purchase an aggregate of 901,632 of the Shares from the Shareholders, pro rata, which will result in Purchaser's owning 49% of the outstanding Company common stock (including shares of Common Stock owned by TriPower Resources, Inc.("TriPower")). In the First Closing, each Shareholder shall sell the number of shares owned by such Shareholder set forth on Exhibit B hereto. At the First Closing, upon receipt of certificates for Shares, Purchaser shall first deliver the cash and then the promissory notes in the amount set out on Exhibit B to each of the Shareholders. The second closing ("Second Closing") shall not be later than two (2) business days after the date Purchaser receives the initial approval of the Federal Communications Commission necessary for the purchase of the remainder of the Shares (as required by Section 2.02 of this Agreement). The parties acknowledge and agree that "final" approval, i.e., approval no longer subject to Federal Communications Commission or judicial appeal or reconsideration, shall not be required prior to the Second Closing. At the Second Closing, Purchaser shall purchase the balance of the Shares and deliver promissory notes to the Shareholders as set forth on Exhibit B. The First and Second Closings are collectively referred to as the "Closings." The Closings shall take place at the specific time and place as Purchaser and Shareholders may agree. 1.04 Actions to be Taken at the Closings by the Purchaser and Shareholders. At the Closings, Shareholders and Purchaser shall each execute and deliver to each other such documents and certificates as either may reasonably request, including the Shareholders' delivery of the stock certificates for the Shares being sold duly endorsed and ready for transfer, free and clear of all claims and encumbrances of any kind whatsoever. 1.05 Further Assurances. At any time and from time to time after the Closings, at the request of any party to this Agreement and without further consideration, any party so requested will execute and delivery such other instruments and take such other action as the requesting party may reasonably deem necessary or desirable in order to effectuate the transactions contemplated hereby. ARTICLE II CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER ------------------------------------------------ All obligations of Purchaser under this Agreement are subject to the fulfillment, prior to or at the Closings, of each of the following conditions (except for those only applicable to one of the Closings), any or all of which may be waived in whole or in part by Purchaser. 2.01 Compliance with Representations, Warranties and Agreements. All representations and warranties made by the Shareholders in Article IV of this Agreement (at the First Closing) and in Sections 4.01, 4.02 and 4.03 of this Agreement (at the Second Closing) shall have been true and correct when made and shall be true and correct as of the Closings with the same force and effect as if such representations and warranties were made at and as of the Closings. The Shareholders shall have performed or complied in all material respects with all agreements, terms, covenants and conditions required by this Agreement to be performed or complied with by the Shareholders prior to or at the Closings. 2.02 Governmental and Regulatory Approvals. With respect to the Second Closing, Purchaser shall have received initial approval on terms and conditions acceptable to Purchaser in its sole discretion, of the transactions contemplated by this Agreement to occur at the Second Closing from the Federal Communications Commission. 2 2.03 No Material Adverse Change. As of the First Closing, since September 30, 2004, there shall not have occurred any material adverse change in the financial condition, assets, properties, liabilities, business or results of operations of the Company ("Material Adverse Change") and Purchaser shall be satisfied, in his sole discretion, with the condition of the Company. 2.04 No Litigation. No action shall have been taken, and no statute, rule, regulation or order shall have been promulgated, enacted, entered, enforced or deemed applicable to this Agreement or the transactions contemplated hereby by any governmental authority or by any court, including the entry of a preliminary or permanent injunction, that would (a) make this Agreement or the transactions contemplated hereby illegal, invalid or unenforceable, (b) require the divestiture of a material portion of the assets of the Company or any Affiliated Entity, (c) impose material limits on the ability of any party to this Agreement to consummate the Agreement or the transactions contemplated hereby, (d) otherwise result in a Material Adverse Change, or (e) if this Agreement or the transactions contemplated hereby are consummated, subject Purchaser or its officers or directors to criminal or civil liability. No action or proceeding before any court or governmental authority shall be threatened, instituted or pending that would reasonably be expected to result in any of the consequences referred to in clauses (a) through (e) above. 2.05 Resignations. On or before the First Closing, (i) John Power shall have resigned as a director and officer of the Company and shall have delivered to the Company a release of any claims in form satisfactory to Purchaser (other than compensation in the ordinary course of business); (ii) the Board of the Company shall have elected John Gibbs as the President of the Company; and (iii) the remaining independent directors of the Board shall have agreed to remain on the Board until the completion of the tender offer described in Article VII. ARTICLE III CONDITIONS PRECEDENT TO OBLIGATIONS OF SHAREHOLDERS --------------------------------------------------- All obligations of the Shareholders under this Agreement are subject to the fulfillment, prior to or at the Closing, of each of the following conditions, any or all of which may be waived in whole or in part by the Shareholders. 3.01 Compliance with Representations, Warranties and Agreements. All representations and warranties made by Purchaser in Article V of this Agreement shall have been true and correct when made and shall be true and correct as of the Closings with the same force and effect as if such representations and warranties were made at and as of the Closings. Purchaser shall have performed or complied in all material respects with all agreements, terms, covenants and conditions required by this Agreement to be performed or complied with by Purchaser prior to or at the Closings. 3.02 Regulatory Approvals. Any and all governmental or regulatory approvals or consents required by law for the Acquisition shall have been obtained. 3 3.03 No Litigation. No action shall have been taken, and no statute, rule, regulation or order shall have been promulgated, enacted, entered, enforced or deemed applicable to the Acquisition by any federal, state or foreign government or governmental authority or by any court, domestic or foreign, including the entry of a preliminary or permanent injunction, that would (a) make the Agreement or any other agreement contemplated hereby, or the transactions contemplated hereby or thereby illegal, invalid or unenforceable, (b) impose material limits in the ability of any party to this Agreement to consummate the Agreement or any other agreement contemplated hereby, or the transactions contemplated hereby or thereby, or (c) if the Agreement or any other agreement contemplated hereby, or the transactions contemplated hereby or thereby are consummated, subject the Company or any Affiliated Entity or subject any officer, director, shareholder or employee of the Company or any Affiliated Entity to criminal or civil liability. No action or proceeding before any court or governmental authority, domestic or foreign, by any government or governmental authority or by any other person, domestic or foreign, shall be threatened, instituted or pending that would reasonably be expected to result in any of the consequences referred to in clauses (a) through (c) above. 3.04 Indemnification. The Company and John Power shall have entered into an indemnification agreement in the form attached as Exhibit D. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS -------------------------------------------------- Each of the Shareholders, individually, and not jointly and severally, hereby makes the following representations, warranties and covenants in Sections 4.01, 4.02 and 4.03 to Purchaser as of the date of this Agreement. 4.01 Ownership of Stock. Each of the Shareholders individually or jointly with his or her spouse is the sole record and beneficial owner of not less than the number of shares of Common Stock listed beside his or her name on the signature page to this Agreement. Each of the Shareholders has good and marketable title to such shares and the absolute right to sell, assign and transfer such shares free and clear of all liens, pledges, security interests, encumbrances, buy-sell agreements, preemptive rights or adverse claims of any kind or character. 4.02 Authority and Enforceability; No Default; Each Shareholder has full legal capacity and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. This Agreement has been, and the other agreements and documents contemplated hereby have been or at Closing will be, duly executed by such Shareholder and will constitute the legal, valid and binding obligation of such Shareholder, enforceable against such Shareholder in accordance with its respective terms and conditions, except as enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws and judicial decisions affecting the rights of creditors generally and by general principles of equity (whether applied in a proceeding at law or in equity). The execution, delivery and (provided required regulatory approvals are obtained) performance of this agreement will not conflict with or result by itself or with giving of notice or passage of time any mortgage indenture, lease, contract, agreement or other instrument applicable to such Shareholder. 4 4.03 Shareholders' Claims. Each Shareholder does not have any claims against the Company or any Affiliated Entity except, if applicable, for compensation in the ordinary course of business. John Power, individually, hereby makes all of the following representations, warranties and covenants to Purchaser to the best of his knowledge. 4.04 Organization and Qualification. The Company is a Colorado corporation and a closed end investment company under the Investment Company Act of 1940, as amended, and is duly organized, validly existing and in good standing under the laws of the State of Colorado. The Company has all requisite corporate power and authority (including all licenses, franchises, permits and other governmental authorizations as are legally required) to carry on its business as now being conducted, to own, lease and operate its properties and assets as now owned, leased or operated, and to carry out its obligations under this Agreement. The Company does not own or control any Affiliated Entitles other than those listed in its most recent reports filed with the Securities and Exchange Commission ("SEC"). The Company has no equity interest, direct or indirect, in any other corporation or in any partnership, joint venture or other business enterprise or entity, other than those listed in its most recent reports filed with the SEC. 4.05 Company Capitalization. The entire authorized capital stock of the Company consists solely of 500,000,000 shares of common stock, par value $0.001 per share, of which 2,499,544 shares are issued and outstanding (the "Common Stock"). Other than shares of Common Stock issuable for interest or on conversion of a convertible note in the amount of $1,230,000 issued to John Gibbs (the "Convertible Note"), there are no (i) other outstanding equity securities of any kind or character, (ii) outstanding subscriptions, options, convertible securities, rights, warrants, calls or other agreements or commitments of any kind issued or granted by, or binding upon, the Company to (a) purchase or otherwise acquire any security of or equity interest in the Company or (b) issue any shares of, restricting the transfer of or otherwise relating to shares of its capital stock. All of the issued and outstanding shares of common stock have been duly authorized, validly issued and are fully paid and nonassessable, and have not been issued in violation of the securities laws of the United States or any other applicable jurisdiction or in violation of the preemptive rights of any person. 4.06 No Default. The execution, delivery and (provided the required regulatory approvals are obtained) performance of this Agreement and the other agreements contemplated hereby, and the consummation of the transactions contemplated hereby and thereby will not conflict with, or result, by itself or with the giving of notice or the passage of time, or both, in any violation of or default or loss of a benefit under, (i) any provision of the Certificates of Incorporation or Bylaws of the Company or any subsidiary, (ii) any material mortgage, indenture, lease, contract, agreement or other instrument applicable to the Company or any Affiliated Entity or their respective assets, operations, properties or businesses, or (iii) any permit, concession, grant, franchise, license, authorization, judgment, writ, injunction, order, decree, statute, law, ordinance, rule or regulation applicable to the Company or any Affiliated Entity or their respective assets, operations, properties or businesses. 5 4.07 Consents and Approvals. Except for such consents and approvals as Purchaser shall attempt to obtain as described in Section 2.02 of this Agreement, no consent, approval, order or authorization of, or registration, declaration or filing with, any governmental or administrative authority or other third party is required on the part of the Company or any Affiliated Entity in connection with the execution, delivery and performance of this Agreement or the agreements contemplated hereby or the consummation by the Shareholders of the transactions contemplated hereby. 4.08 SEC Reports. The reports filed by the Company with the Securities and Exchange Commission since January 1, 2004 comply as to form with all requirements under the Investment Company Act and are true, accurate and complete in all material respects and do not contain any material omissions required to make the statements made therein not misleading. The financial statements included in such reports fairly present the financial position of the Company as of the dates thereof and the results of operations and changes in financial position of the Company for the periods then ended (collectively, the "Financial Statements"). The Financial Statements are presented in accordance with generally accepted accounting principles ("GAAP") applied on a consistent basis, subject, in case of unaudited financial statements, to year-end adjustments (which, in the aggregate, are not material). 4.09 Litigation. Except for the litigation pending against Primrose Drilling Ventures, Ltd., there are no actions, claims, suits, investigations, reviews or other legal, quasi-judicial or administrative proceedings of any kind or nature now pending or threatened against or affecting the Company or any Affiliated Entity at law or in equity, or by or before any federal, state or municipal court or other governmental or administrative department, commission, board, bureau, agency or instrumentality, domestic or foreign, that in any manner involve the Company or any of its respective properties or capital stock that, if determined adversely to the Company, would result in a Material Adverse Change or materially and adversely affect the transactions contemplated by this Agreement. 4.10 Books and Records. The minute books, stock certificate books and stock transfer ledgers of the Company (i) have been kept accurately in the ordinary course of business, (ii) are complete and correct in all material respects, (iii) the transactions entered therein represent bona fide transactions and (iv) there have been no transactions involving the business of the Company that were required to have been set forth therein and that have not been accurately so set forth. 4.11 No Adverse Change. There has not been any Material Adverse Change since September 30, 2004, nor has any event or condition occurred that has resulted in, or has a reasonable possibility of resulting in the future in a Material Adverse Change. 4.12 Approval by Board of Company. The independent directors of the Company have reviewed this Agreement and have agreed to recommend to the Shareholders of the Company that they accept the tender offer as described in Section VII, subject to any material change in circumstances. 6 ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER ------------------------------------------- Purchaser hereby makes the representations and warranties set forth in this Article V to the Shareholders. 5.01 Execution and Delivery. This Agreement has been, and the other agreements and documents contemplated hereby have been or at Closing will be, duly executed by Purchaser and each constitutes the valid and binding obligation of Purchaser, enforceable in accordance with its respective terms and conditions, except as enforceability may be limited by bankruptcy, conservatorship, insolvency, moratorium, reorganization, receivership or similar laws and judicial decisions affecting the rights of creditors generally and by general principles of equity (whether applied in a proceeding at law or in equity). 5.02 Compliance with Laws, Permits and Instruments. The execution, delivery and (provided the required regulatory approvals are obtained) performance of this Agreement and the other agreements contemplated hereby, and the consummation of the transactions contemplated hereby and thereby, will not conflict with, or result, by itself or with the giving of notice or the passage of time, or both, in any violation of or default or loss of a benefit under, (i) any material provision of any mortgage, indenture, lease, contract, agreement or other instrument applicable to Purchaser or its assets, operations, properties or businesses now conducted or heretofore conducted or (ii) any permit, concession, grant, franchise, license, authorization, judgment, writ, injunction, order, decree, award, statute, federal state or local law, ordinance, rule or regulation of any court, arbitrator or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality applicable to Purchaser. 5.03 No Litigation. No legal action, suit or proceeding or judicial, administrative or governmental investigation is pending or threatened against Purchaser that questions or might question the validity of this Agreement or the agreements contemplated hereby, or any actions taken or to be taken by Purchaser pursuant hereto or thereto or seeks to enjoin or otherwise restrain the transactions contemplated hereby or thereby. 5.04 Consents and Approvals. Except for regulatory approvals contemplated by Section 2.02, no approval, consent, order or authorization of, or registration, declaration or filing with, any governmental authority or other third party is required on the party of Purchaser in connection with the execution, delivery or performance of this Agreement or the agreements contemplated hereby or the consummation by Purchaser of the transactions contemplated hereby or thereby. 5.05 Financing. Purchaser has separate funds or financing available to fund the cash payments to Shareholders and payments to other shareholders in the tender offer and will not use the assets of the Company or any of its Affiliated Entities to provide or guaranty such financing so long as the Company is registered as an investment company. 5.06 Investment Intent. Purchaser is acquiring the Shares for investment and is not acquiring the Shares with a view to or for sale in connection with any distribution thereof within 7 the meaning of the Securities Act of 1933, as amended, and the rules and regulations thereunder. Purchaser will not sell or otherwise transfer the Shares without compliance with the registration requirements of applicable federal or state securities laws or an exemption therefrom. ARTICLE VI OBLIGATIONS AND COVENANTS OF THE SHAREHOLDERS --------------------------------------------- Each of the Shareholders hereby individually make the covenants set forth in this Article VI to Purchaser, except for Section 6.02 which is only made by Power. 6.01 Best Efforts; Ordinary Course. Each of the Shareholders will use his, her or its best efforts to cause consummation of the transactions contemplated hereby in accordance with the terms and conditions of this Agreement. Shareholders shall each execute any application for governmental approvals required to be executed by each of them. 6.02 Information for Applications and Statements. Power will use his best efforts to cause the Company and any Affiliated Entity to cooperate with Purchaser and to execute any application or filing to be made by Purchaser, Shareholders, Company and/or any Affiliated Entity with any governmental body in connection with the transactions contemplated by this Agreement and to provide any additional information that may be requested in such applications or any appeal or request for reconsideration. Application to the Federal Communications Commission for approval of the transactions contemplated by the Second Closing and, if necessary, the tender offer shall be filed by the parties as soon as practicable after the First Closing. The filing fee shall be paid by the Purchaser. 6.03 Exclusivity. Each of the Shareholders will not solicit, negotiate or enter into any other transaction relating to the sale of the Shares or any other transaction relating to the acquisition of the Shares or Company, or any of the assets of the Company or any affiliate by any other person. If any person makes an offer to any of the Shareholders relating to any of the foregoing, or to the Company of which any Shareholder is aware, such Shareholder shall promptly notify Purchaser of the receipt thereof and the identity of the offer or and the terms thereof. ARTICLE VII OBLIGATIONS AND COVENANTS OF PURCHASER -------------------------------------- Purchaser hereby makes the covenants set forth in this Article VII to the Shareholders. 7.01 Best Efforts. Purchaser shall promptly file jointly with the Shareholders and any Affilaited Entity if required all necessary applications to obtain any necessary governmental or regulatory approvals for the transactions described in this Agreement, shall promptly respond to all requests for additional information requested in connection with such applications, shall use its best efforts to obtain such approvals in a timely manner, and shall perform or cause to be satisfied each covenant or condition specified in this Agreement to be performed or satisfied by Purchaser. 8 7.02 Confidentiality. Purchaser shall maintain in confidence any confidential information about the Company which it receives, except as disclosure of confidential information may be necessary to obtain governmental or regulatory approvals of the transactions described in this Agreement. In the event that this Agreement is terminated, any and all copies of the books and records of the Company in the possession of Purchaser shall be returned to the Company. 7.03 Consulting. After the First Closing, Purchaser will use his best efforts to cause the Company to retain John Power as a consultant to the Company for a period as long as requested by Purchaser at a consulting fee of $10,500 per month. Power will provide assistance in management or sale of the Affiliated Entities on a substantially full time basis, but will not have any authority to bind the Company or any of such entities. 7.04 Tender Offer. Within 30 days after the First Closing (or as soon thereafter as practicable), the Purchaser shall commence a cash tender offer for all of the remaining shares of Common Stock not owned by the Shareholders (other than shares of Common Stock owned by Purchaser, John Gibbs or any Affiliated Entity) at a price of at least $1.60 per share, net to the seller in cash, subject to customary terms and conditions including regulatory approval. Purchaser shall accept and pay for all shares properly tendered. Following completion of the tender offer, subject to prior approval of the Federal Communications Commission, if required, Purchaser will acquire the balance of the shares of Common Stock outstanding by means of a short form or long form merger in the manner provided by Colorado law for a price of $1.60 per share or such greater price as Purchaser pays in the tender offer. ARTICLE VIII TERMINATION AND ABANDONMENT --------------------------- 8.01 Right of Termination. The transactions contemplated for the Second Closing may be terminated and abandoned at any time prior to or at the Second Closing as follows, and in no other manner: 1. By the mutual consent of Purchaser and the Shareholders. 2. By either the Shareholders or Purchaser at any time after August 31, 2005; provided that (i) the conditions precedent to such parties' obligations to close specified in Articles II and III, respectively, hereof have not been met or waived in writing and (ii) the Second Closing shall have not been consummated. 3. By either Purchaser or the Shareholders if any of the transactions contemplated by the Second Closing are disapproved by any regulatory authority whose approval is required to consummate such transactions, which disapproval is final and nonappealable, or if any court of competent jurisdiction or other governmental body shall have issued an order, decree or ruling or taken any other action restraining, enjoining, invalidating or otherwise prohibiting the Agreement or the transactions contemplated hereby and such order, decree, ruling or other action shall have become final and nonappealable. 9 4. By Purchaser if it reasonably determines, in good faith and after consulting with counsel, there is substantial likelihood that any necessary regulatory approval will not be obtained or will be obtained only upon a condition or conditions that make it inadvisable to proceed with the transactions contemplated by this Agreement. 5. By Purchaser if the Shareholders shall fail to comply in any material respect with any of their respective covenants or agreements contained in this Agreement or in any other agreement contemplated hereby and such failure shall not have been cured within a period of five (5) calendar days after notice from Purchaser, or if any of the representations or warranties of the Shareholders contained herein or therein shall be inaccurate in any material respect. 6. By the Shareholders if Purchaser shall fail to comply in any material respect with any of its covenants or agreements contained in this Agreement or in any other agreement contemplated hereby and such failure shall not have been cured within a period of five (5) calendar days after notice from the Shareholders, or if any of the representations or warranties of Purchaser contained herein or therein shall be inaccurate in any material respect. 8.02 Notice of Termination. The power of termination provided for by Section 8.01 hereof may be exercised only by a notice given in writing, as provided in Section 9.01 of this Agreement. 8.03 Effect of Termination. Any termination of this Agreement shall not limit any other relief to which either party may be entitled for breach of this Agreement but shall not affect the obligations of the parties relating to the First Closing, which shall not be affected if the Second Closing does not occur. ARTICLE IX MISCELLANEOUS 9.01 Notices. Any and all payments (other than payments at the Closing), notices, requests, instructions and other communications required or permitted to be given under this Agreement after the date hereof by any party hereto to any other party may be delivered personally or by nationally recognized overnight courier service or sent by mail or (except in the case of payments) by facsimile transmission, at the respective addresses or transmission numbers set forth below and shall be effective (1) in the case of personal delivery, facsimile transmission or overnight delivery, when received; and (b) in the case of mail, upon the actual receipt after deposit in the United States Postal Service, first class certified or registered mail, postage prepaid, return receipt requested. The parties may change their respective addresses and transmission numbers by written notice to all other parties, sent as provided in this Section 9.01. All communications must be in writing and addressed as follows: 10 IF TO THE SHAREHOLDERS: At the addresses set forth on the signature page. IF TO PURCHASER: Gibbs Holdings, LLC 807 Wood n Creek Ardmore, Oklahoma 73401 9.02 Survival of Representations and Warranties; Indemnity. All representations and warranties contained in this Agreement shall survive the Closings. Shareholders shall indemnify and hold harmless the Purchaser for any loss, damage, diminution in value or expense (including reasonable attorneys fees) (collectively, "Adverse Consequences") arising from any breach of their respective representations, warranties or agreements contained in this Agreement. 9.03 Entire Agreement. This Agreement contains the entire agreement between the parties hereto with respect to the transaction contemplated hereby. This Agreement may be amended, modified or supplemented only by an instrument in writing executed by the party against which enforcement of the amendment, modification or supplement is sought. 9.04 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF OKLAHOMA (INCLUDING THOSE LAWS RELATING TO CHOICE OF LAW) APPLYING TO CONTRACTS ENTERED INTO AND TO BE PERFORMED WITHIN THE STATE OF OKLAHOMA, WITHOUT REGARD FOR THE PROVISIONS THEREOF REGARDING CHOICE OF LAW. 9.05 Severability. In the event that any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws, then (a) such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision were not a part hereof; (b) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by such illegal, invalid or unenforceable provision or by its severance from this Agreement; and (c) there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and still be legal, valid and enforceable. 9.06 Attorneys' Fees and Costs. In the event attorneys' fees or other costs are incurred to secure performance of any of the obligations herein provided for, or to establish damages for the breach thereof, or to obtain any other appropriate relief, whether by way of prosecution or defense, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs incurred therein. 9.07 Multiple Counterparts. For the convenience of the parties hereto, this Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all counterparts hereof so executed by the parties hereto, whether or not such counterpart shall bear 11 the execution of each of the parties hereto, shall be deemed to be, and shall be construed as, one and the same Agreement. A telecopy or facsimile transmission of a signed counterpart of this Agreement shall be sufficient to bind the party or parties whose signature(s) appear thereon. 9.08 Articles, Sections and Exhibits. All articles and sections referred to herein are articles and sections, respectively, of this Agreement and all exhibits referred to herein are exhibits attached to this Agreement. Descriptive headings as to the contents of particular sections are for convenience only and shall not control or affect the meaning, construction or interpretation of any provision of this Agreement. Any and all exhibits or other documents or instruments referred to herein or attached hereto are and shall be incorporated herein by reference hereto as though fully set forth herein verbatim. 9.09 Rules of Construction. The descriptive headings in this Agreement are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. Each use herein of the masculine, neuter or feminine gender shall be deemed to include the other genders. Each use herein of the plural shall include the singular and vice versa, in each case as the context requires or as it is otherwise appropriate. 9.10 Commissions. The Shareholders and Purchaser agree and represent to each other that there are no commissions due to any broker or any other person relating to the transactions that are the subject of this Agreement, and each party hereto agrees to indemnify and hold harmless the other party hereto from any commission due as a result of its actions with respect to this transaction. 9.11 Binding Agreement; No Assignment. This Agreement shall be binding upon and inure to the benefit of each corporate party hereto, its successors and assigns, and each individual party hereto and his heirs, personal representatives, successors and assigns, provided, however, neither Shareholders nor Purchaser may assign their rights and obligations under this Agreement without the consent of the other. 9.12 Public Disclosure. Neither Purchaser nor the Shareholders will make, and Shareholders will cause the Company to refrain from making, any announcement, statement, press release, acknowledgment or other public disclosure concerning the Acquisition without the prior written consent of the other parties to this Agreement; provided, however, that notwithstanding the foregoing, Purchaser and the Shareholders and Company will be permitted to make any public disclosures or governmental filings as legal counsel may deem necessary to maintain compliance with or to prevent violations of applicable federal or state laws or regulations or which may be necessary to obtain regulatory approval for the transactions contemplated hereby. 9.13 Effective Date. This Agreement shall not be effective until signed by all the parties whose names appear on the signature page hereto. 12 Purchaser and the Shareholders have caused this Agreement to be executed as of the date first above written. "PURCHASER" GIBBS HOLDINGC, LLC /s/ John Gibbs ------------------------------ John Gibbs, Manager Number of Shares "SHAREHOLDERS" Name of Common Stock ---- --------------- /s/John Power ------------------------------------------------------------ John Power 1,025,331 shares P.O. Box 44 Sea Ranch CA 95497 /s/ Randy Burchard ------------------------------------------------------------ Randy Burchard 303,079 shares 13811 32nd Avenue Surrey, British Columbi Canada V4P 2B6 /s/ Allan Williams ------------------------------------------------------------ Allan Williams 244,953 shares C/o Cliff Neuman 1507 Pine Street Boulder CO 80302 13 Exhibit A PROMISSORY NOTE $________________ Ardmore, Oklahoma ___________, 2005 For value received, Gibbs Holdings, LLC ("Maker") promises to pay to the order of ________________________ ("Payee") the principal sum of _______________________ ($_________). Maker promises to pay interest on the unpaid principal balance outstanding hereunder from the date of this Note at a rate of the Wall Street Journal prime rate in effect from time to time plus 0.5%. Interest shall be computed for the actual number of days elapsed on the basis of the year consisting of 365 days. Principal and accrued interest shall be due and payable quarterly with the first quarterly payment due on the earlier of (i) the date that Maker acquires 100% of the outstanding stock of Redwood Microcap Fund, Inc. ("RWMC"), or (ii) twelve months from the date of the First Closing as defined in the Stock Purchase Agreement dated _________________, 2005 between Maker, John Power, Randy Butchard and Allan Williams ("Purchase Agreement"). Unless otherwise defined herein, all capitalized terms used herein shall have the meanings set forth in the Purchase Agreement. Quarterly payments shall be in the amount of $__________ [$150,000 pro rated for number of total shares] plus accrued interest. In any event, the total outstanding balance of principal and accrued and unpaid interest due hereunder shall be due and payable no later than March 31, 2010. Payment of both principal and interest are to be made in lawful money of the United States of America. Any amount not paid when due shall bear interest at the rate of five percent (5%) per annum greater than the stated rate of this note accrued from the date of such default to the date on which such default is cured to the satisfaction of the Payee or other holder hereof. The Maker agrees that if and as often as this Note is placed in the hands of an attorney for collection or to enforce the holder's rights hereunder, Maker will pay to the holder hereof its reasonable attorneys fees, together with all court costs and other expenses incurred by such holder. Repayment of this Note is secured by certain collateral described in that certain Security Agreement dated the date hereof between Maker and Payee. Maker and all endorsers, sureties, guarantors and all other persons who may become liable for all or any part of this obligation severally waive presentment for payment, protest and notice of nonpayment. Said parties consent to an extension of time (whether one or more) of payment hereof, any renewal (whether one or more) hereof, and any release of any party liable for payment of this obligation. Any such extension, renewal or release may be made without notice to any such party and without discharging such party's liability hereunder. Maker shall be entitled to set off any claims he has for indemnification from Payee under the terms of the Purchase Agreement against his obligations under this Note. In the event any payment of principal or interest is not paid within 5 days of the due date, at the option of the holder hereof, the entire indebtedness hereby evidenced shall become due, payable and collectible then or thereafter as the holder may elect, regardless of the date of maturity hereof. Notice of the exercise of such option is hereby expressly waived. [For Power Note Only] Following the Second Closing, Maker shall have the right to withhold payments of principal and interest hereunder ("Withheld Payment"), and to pay such Withheld Payment to RWMC or an Affiliated Entity if in the judgment of Maker such funds are needed by RWMC or the Affiliated Entity to meet its obligations; provided that the making of such advance can be made in conformity with all applicable legal requirements; and provided further, however, that the Withheld Payments may not exceed 50% of any quarterly payment or $200,000 in the aggregate unless the holder shall have first reviewed and approved the amount of Withheld Payment and its proposed use by the Affiliated Entity or Entities. The amount of any such Withheld Payment shall be deemed and treated as a loan by holder to the Affiliated Entity or Entities receiving same and shall be repaid, with interest as provided for in this Note, to holder as a priority and prior to any payment of principal and accrued interest due and owing by such Affiliated Entity or Entities to either RWMC or any other Affiliated Entity or Entities. This Note contains no prepayment penalty and may be paid at any time prior to maturity. Maker will use commercially reasonable efforts to prepay this Note if permitted by its lending institution and if Maker has sufficient resources. Any prepayments shall be paid prorata to all holders of notes issued in connection with Purchase Agreement. This Note will be interpreted according to the laws of the State of Oklahoma. MAKER Gibbs Holdings, LLC ------------------------ By: John Gibbs, Manager REDWOOD MICROCAP FUND, INC. EXHIBIT B TO STOCK PURCHASE AGREEMENT ALLOCATION OF CONSIDERATION

NAME FIRST CLOSING SECOND CLOSING TOTALS -------------------------------------- ------------------------------- --------------------------------------- QTRLY QTRLY TOTAL PRINCIPAL PRINCIPAL CASH SHARES CASH NOTE PAYMENT SHARES CASH NOTE PAYMENY SHARES CASH NOTE & NOTE ------ ---- ---- ------- ------ ---- ---- ------- ------ ---- ---- ------ John Power 587,950 244,536 696,184 48,780 437,381 0 699,810 49,034 1,025,331 244,536 1,395,994 1,640,530 Randy Butchard 173,220 72,044 205,107 14,371 128,859 0 206,175 14,446 302,079 72,044 411,282 483,326 Allan Williams 140,462 58,420 166,320 11,654 104,491 0 167,185 11,714 244,953 58,420 333,505 391,925 0 TOTALS 901,632 375,000 1,067,611 74,805 670,731 0 1,073,170 75,195 1,572,363 375,000 2,140,781 2,515,781 Gibbs Ownership(1) 323,144 Total Gibbs after First Closing 1,224,776 Percent 49.00% (1) Includes 206,400 shares ownd by Tripower but excludes 74,364 interest shares and 719,300 principal shares under convertible note CONVERTIBLE NOTE PLEDGED John Power 399,997 402,081 Randy Butchard 117,846 118,459 Allan Williams 95,560 96,057 613,403 616,597 1,230,000

Redwood Microcap Fund, Inc. Exhibit B to Stock Purchase Agreement Allocation of Consideration

First Closing Second Closing Totals Name Shares Sold Cash Note Shares Sold Cash Note Shares Sold Cash Note ----------- ---- ---- ----------- ---- ---- ----------- ---- ---- John Power 587,950 244,536 696,184 437,381 0 699,809 1,025,331 244,536 1,395,994 Randy Butchard 173,220 72,044 205,107 128,859 0 206,175 302,079 72,044 411,282 Allan Williams 140,462 58,420 166,319 104,491 0 167,185 244,953 58,420 333,505 0 Totals 901,632 375,000 1,067,611 670,731 0 1,073,170 1,572,363 375,000 2,140,781 Gibbs Ownership(1) 323,144 Total Gibbs after First Closing 1,224,776 Percent 49.00% (1) Includes 206,400 shares owned by Tripower but excludes 74,364 interest shares and 719,300 principal shares under convertible note Convertible Note Pledged John Power 396,420 398,484 Randy Butchard 116,792 117,400 Allan Williams 94,705 95,198 607,917 611,083 1219000

Exhibit C GUARANTY THIS GUARANTY, dated __________, 2005, is from John Gibbs, an individual, whose address is 807 Wood n Creek, Ardmore, Oklahoma, 73401 (the "GUARANTOR") to ______________, an individual ("Payee"). WHEREAS, Payee and Gibbs Holdings, LLC, an Oklahoma limited liability company ("DEBTOR"), entered into that certain Stock Purchase Agreement dated effective March 24, 2005 pursuant to which Payee agreed to sell a total of ______ shares of common stock of Redwood Microcap Fund, Inc. ("COMPANY") to Debtor for a purchase price of $1.60 per share payable $_________ in cash and $___________ by promissory note(s) ("NOTE"); and WHEREAS, Guarantor is the sole member of Debtor and will derive substantial benefit from the Stock Purchase Agreement; and WHEREAS, Guarantor and Payee have entered into that certain Pledge and Security Agreement pursuant to which the Note will be secured by the Convertible Note between Guarantor and the Company, on the terms and conditions set forth therein; and WHEREAS, Payee requires that Guarantor guarantees payment and performance of the Note. NOW THEREFORE, in consideration of the premises and of the mutual covenants contained herein, and other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 1. The parties hereby incorporate the foregoing recitals in this Guaranty as though fully set forth herein, agreeing that such recitals are material, true and correct. The terms "Event of Default", "Obligation" and "Collateral" shall have the meanings set forth in the Pledge and Security Agreement. 2. Guarantor hereby guarantees to Payee that Debtor will fully and promptly pay and discharge any and all liabilities, obligations or indebtedness of Debtor arising out of or relating to the Note. 3. This is an individual, absolute, unconditional and continuing guaranty that shall continue until all obligations of the Debtor to Payee under the Note have been satisfied in full. 4. Guarantor agrees that upon the occurrence of an Event of Default and written demand by Payee, Guarantor shall pay to Payee the full amount of Guarantor's obligations hereunder, as if the Obligation constituted the direct and primary obligations of Guarantor. Payee shall be entitled to proceed directly against Guarantor for payment of the amount owing hereunder without first pursuing or exhausting any remedy which Payee then may have against Debtor or any other guarantor or the Collateral securing the Note. 5. Guarantor agrees that Payee's rights and remedies against Debtor, Guarantor and all other obligations in connection with the Note shall be cumulative and may be exercised excessively or concurrently. 6. Guarantor hereby consents that a release of any other guaranty of the Note shall not diminish or release the obligations of Guarantor hereunder. Guarantor further agrees that Payee may from time to time take, permit or suffer to occur any Permitted Action, as defined herein, all without modifying, reducing, waiving, releasing, impairing or otherwise affecting the obligations of Guarantor, or Guarantor's respective heirs, successors or assigns, hereunder, without giving notice to or obtaining the consent of Guarantor, or Guarantor's respective heirs, successors or assigns, so long as any of such events do not increase the amount due under the Note. As used herein the following shall constitute "Permitted Actions": (a) any renewal, extension, acceleration, substitution, consolidation, restatement or other modification of the Note; (b) any taking or release of any additional collateral or a guaranty for payment of the Obligation; (c) any delay or failure for any reason to exercise any right or remedy Payee may have under the Note or Pledge and Security Agreement; (d) any waiver of any Events of Default under the Note or Pledge and Security Agreement; and (e) the granting of any other leniencies, waivers, extensions, and indulgences under the Note or Pledge and Security Agreement as Payee may in good faith deem appropriate or desirable, or as may occur through inadvertence, estoppel, in action or by operation of law. Guarantor further agrees that Guarantor's liability hereunder will not be modified, reduced, waived, released, impaired or otherwise affected by the insolvency, bankruptcy, dissolution, liquidation or reorganization of Debtor, or upon or as a result of the appointment of a receiver, intervenor or conservator or trustee or similar office for Debtor. 7. Any notice, demand or request by Payee to Guarantor shall be in writing, and shall be deemed to have been duly given or made if (i) delivered personally to Guarantor, (ii) mailed by certified mail or registered mail, postage prepaid, return receipt requested and addressed to Guarantor's addresses above or to such other address as Guarantor may substitute by written notice to Payee, or (iii) by facsimile transmission, provided however, the receipt by any party other than Guarantor shall not be deemed necessary in any event, for the effectiveness of any notice or other communication. All notices shall be deemed to be given on the date of actual receipt. 8. This instrument shall inure to the benefit of Payee and Payee's successors and assigns, and shall bind Guarantor, and Guarantor's respective heirs, executors, administrators, legal representatives, successors and assigns. 9. Guarantor agrees to pay reasonable attorneys' fees and expenses incurred (prior to payment in full of this Guaranty) by Payee in enforcement of the Note or the Pledge and Security Agreement, including this Guaranty. 10. This Guaranty shall be governed by, and construed and enforced in accordance with, the laws of the State of Oklahoma, and shall not be subject to any right of Guarantor to setoff the fair market value of the Collateral for the Note against the Obligation of Guarantor. 11. The parties intend this writing to be a final expression of this agreement of guaranty and a complete and exclusive statement of the terms of this agreement of guaranty. No course of prior dealings between the parties, no usage of the trade, and no parol or extrinsic evidence of any nature, shall be used or be relevant to supplement or explain or modify any term used in this agreement of guaranty. Guarantor has executed this Guaranty as of the date first above written. ______________________________ JOHN GIBBS, An Individual Exhibit D INDEMNITY AGREEMENT This Agreement is made as of the 24th day of March, 2005, between John Power, an individual, ("Indemnitee") and Redwood Microcap Fund, Inc., a Colorado corporation ("Company") with reference to the following circumstances: A. The Indemnitee is an existing or former officer and/or member of the Board of Directors of the Company; B. The Company desires to indemnify or reimburse the Indemnitee with respect to certain matters. Now therefore, for good and valuable consideration, the receipt and sufficiency whereof is acknowledged, the parties agree as follows: 1. Indemnification. The Company shall indemnify the Indemnitee to the maximum extent permitted by Colorado law, the Company's Certificate of Incorporation and Bylaws, it being the intention of the Company to afford the Indemnitee the maximum protection legally possible at all times. 2. Advancement of Expenses. Upon written request of the Indemnitee, the Company shall advance such monies for expenses of any action for which Indemnitee may be entitled to indemnification as the Indemnitee may reasonably request to enable the Indemnitee to protect reasonably his or her interests upon receipt of an undertaking by Indemnitee, in form and substance satisfactory to the Company to reimburse the Company for all monies so advanced in the event a final determination is made by a competent court of law that the Indemnitee was not, under the applicable law, entitled to recover any such expenses from the Company. 3. Notice of Claim(s). The Indemnitee agrees to give the Company prompt notice of each and every claim which might result in indemnification hereunder and to cooperate fully with the Company in the defense of any such claim. The Company shall be entitled to appoint counsel reasonable satisfactory to the Indemnitee, to assume the defense of Indemnitee in any such action, and Indemnitee agrees to cooperate fully in defending against each such claim. The Indemnitee agrees not to enter into any settlement or other compromise arrangement without the prior written consent of the Company as to any such claim that may arise out of an indemnifiable event for which the Company is obliged to bear the expenses thereof. 4. Subrogation. As to any expenses or payment incurred by the Company, the Company shall be subrogated to the Indemnitee's rights against any third party with respect to same. 5. Severability. If any section of this Agreement, or any part thereof, is found to be of no legal effect by a final decision of a court of competent jurisdiction, the remaining sections and any part or parts thereof, shall remain in full force and effect. 6. Binding Effect. This Agreement shall be binding on the parties hereto, their legal representatives, successors and assigns and shall supercede any prior agreement covering the same subject matter. 7. Governing Law. This Agreement shall be governed by and construed in accordance with applicable federal law and the laws of the State of Colorado and applicable federal law. 8. Notices. Any notices required or allowed to be given hereunder shall be in writing and shall be effective upon receipt by the other party hereto. 9. Attorneys Fees. Indemnitee shall be entitled to recover from Company his or her attorneys fees and expenses incurred in connection with any action to enforce Indemnitee's rights under this Agreement, if Indemnitee is successful, in whole or in part, in any such action. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first shown above. INDEMNITEE: ------------------------------ John Power REDWOOD MICROCAP FUND, INC. By: -------------------------- EX-2 3 exhibit2_13373.txt FORM OF PLEDGE AND SECURITY AGREEMENT EXHIBIT 2 --------- FORM OF PLEDGE AND SECURITY AGREEMENT ----------------------------- This Pledge and Security Agreement ("AGREEMENT") is made and entered into effective this _____ day of __________, ____, by John Gibbs, an individual ("PLEDGOR") in favor of ______________________, ("SECURED PARTY"). RECITALS -------- A. Secured Party and Gibbs Holdings, LLC, an Oklahoma limited liability company ("Debtor"), entered into that certain Stock Purchase Agreement dated effective March 24, 2005 pursuant to which Secured Party agreed to sell a total of ________ shares of common stock of Redwood Microcap Fund, Inc. ("COMPANY") to Debtor for a purchase price of $1.60 per share payable $________ in cash and $________ by promissory note(s) ("NOTE"); B. Pledgor is the sole member of Debtor and will derive substantial benefit from the Stock Purchase Agreement; and C. Debtor and Secured Party have agreed that as security and collateral for the Note, Pledgor shall assign and pledge all of his right, title, and interest to those certain convertible notes dated March __, 2005 in the amounts of $_________ and $________, respectively, issued by Company in favor of Pledgor ("CONVERTIBLE NOTE"). NOW THEREFORE, in consideration of the premises and of the mutual covenants contained herein, and other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 1. PLEDGE AND SECURITY INTEREST. As security and collateral for the obligation of Debtor under the Note (the "OBLIGATION"), together with any and all costs and expenses paid or incurred by Secured Party in the collection of the Obligation and in enforcing and administering this Agreement and Secured Party's rights hereunder (the "EXPENSES"), Pledgor hereby pledges unto Secured Party the Convertible Note on the terms and conditions set forth therein (the Convertible Note and any securities of the Company received in exchange or upon conversion of the Convertible Note may sometimes be referred to as the "COLLATERAL"). TO HAVE AND TO HOLD the Collateral together with all rights, titles, interests, powers, privileges and preferences appertaining or incidental thereto, unto Secured Party, its successors and assigns, forever as security for the Obligation and the Expenses, subject, however, to the terms, covenants and conditions hereinafter set forth. 2. REPRESENTATIONS AND WARRANTIES. Pledgor represents and warrants as follows: 2.1 Ownership. The Pledgor owns the Collateral of record and beneficially free and clear of any liens, charges or encumbrances thereon or affecting the title thereto, respectively. 2.2 Defense of Interest. Pledgor has good right and lawful authority to pledge the Collateral as provided herein and warrant and will preserve and defend all right, title and interest in and to the Collateral delivered to Secured Party hereunder against the claims of all persons and will maintain and preserve the lien hereof as long as this Agreement shall remain in full force and effect. 3. APPOINTMENT OF AGENTS; REGISTRATION IN NOMINEE NAME. Secured Party shall have the right to appoint one or more agents for the purpose of retaining physical possession of the instruments representing or evidencing the Collateral, which may be held in the name of Pledgor, endorsed or assigned in blank or in favor of Secured Party or an agent appointed by Secured Party. In addition to all other rights possessed by Secured Party, Secured Party may from time to time after the occurrence of an Event of Default (as hereinafter defined), or an event which with the giving of notice or the lapse of time, or both, would be such an Event of Default, take any or all of the following actions: (a) transfer all or any part of the Collateral into the name of Secured Party or its nominee, with or without disclosing that such Collateral is subject to the lien and security interest hereunder; (b) take control of any proceeds of any of the Collateral; and (c) exchange certificates or instruments representing or evidencing Collateral for certificates or instruments of smaller or larger denominations for any purpose consistent with its performance of this Agreement. Provided, however, that prior to taking any of the foregoing actions the Secured Party shall provide written notice to Pledgor identifying the Event of Default and allow Pledgor fifteen (15) days to correct such default. 4. RIGHTS, INTEREST, DIVIDENDS, CONVERSION, ETC. 4.1 Pledgor's Rights Prior to Event of Default. So long as there has not occurred an Event of Default or an event which with the giving of notice of the lapse of time, or both, would be such an Event of Default, Pledgor shall be entitled to exercise any and all rights and powers relating or pertaining to the Collateral or any part thereof for any purpose not inconsistent with the terms of this Agreement, including any rights to enforce payment of the Note, to convert the Note and to vote any shares of stock issued upon conversion of the Note. 4.2 Pledgor's Right to Interest Prior to Event of Default. So long as there has not occurred an Event of Default or an event which with the giving of notice or the lapse of time, or both, would be such an Event of Default, Pledgor shall receive and be entitled to retain any and all interest, cash dividends and distributions, if any, paid on the Collateral. Any and all stock received upon conversion of the Note, stock and/or liquidating dividends, distributions in property, redemptions or other distributions made on or in respect of the Collateral, whether resulting from a subdivision, combination or reclassification of the outstanding capital stock of the issuer thereof or received in exchange for Collateral or any part thereof or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer or Pledgor may be a party or otherwise, and any and all cash and other property received in payment of the principal of or in redemption of or in exchange for any Collateral (either at maturity, upon call for redemption or otherwise), shall become part of the Collateral and, if received by Pledgor, shall be held in trust for the benefit of Secured Party and shall forthwith be delivered to Secured Party or its designated agent (accompanied by proper instruments of assignment and/or stock powers executed by Pledgor in accordance with Secured Party's instructions) to be held subject to the terms of this Agreement. 2 4.3 Secured Party's Rights in an Event of Default. Upon the occurrence of an Event of Default or an event which with the giving of notice or the lapse of time, or both, would be such an Event of Default, at the option of Secured Party, (i) all rights of Pledgor to exercise the rights and powers which he is entitled to exercise pursuant to Section 4.1 shall cease, and all such rights shall thereupon become vested in Secured Party, which shall have the sole and exclusive right and authority to exercise such rights and powers, and (ii) Secured Party shall receive and be entitled to retain any and all interest, cash dividends and distributions, if any, paid in respect of the Collateral. Any and all money and other property paid over to or received by Secured Party pursuant to the provisions of Section 4.2 above shall be retained by Secured Party as part of the Collateral and be applied in accordance with the provisions hereof. Provided, however, that Secured Party must provide written notice to Pledgor identifying the Event of Default and allow Pledgor fifteen (15) days to correct such default. 5. REMEDIES UPON DEFAULT. Upon the occurrence of an Event of Default, then, in addition to having the right to exercise any rights and remedies of a secured party upon default under the Uniform Commercial Code in effect in the State of Oklahoma, Secured Party may, apply the cash (if any) then held by it pursuant to Section 4 hereof in the order and manner specified in Section 7 hereof. If there shall be so such cash or the cash so applied shall be insufficient to pay all Obligations and Expenses in full, Secured Party may thereupon sell the Collateral, or any part thereof, in accordance with Section 6 hereof and shall apply the proceeds of such sale in the order and manner specified in Section 7 hereof. 6. SALE OF COLLATERAL. 6.1 Secured Party's Right to Sell Collateral. Sale of Collateral may be made at any public sale or at any broker's board or on any securities exchange, for cash, upon credit or for future delivery, as Secured Party shall deem appropriate. Secured Party shall be authorized at any such sale (to the extent it deems it advisable to do so, in its sole discretion) to restrict the prospective bidders or purchasers to persons who will represent and agree that they are purchasing the Collateral then being sold for their own account for investment and not with a view to the distribution or resale thereof, and upon consummation of any such sale Secured Party shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any such sale shall hold the property sold absolutely, free from any claim or right on the part of Pledgor, and Pledgor hereby waives (to the extent permitted by law) all rights of redemption, stay and/or appraisal which they may now have or may at any time in the future have under any rule or statute now existing or hereafter enacted. Secured Party shall give Debtor and Pledgor at least fifteen (15) days' written notice of Secured Party's intention to make any such public sale or sale at any broker's board or on any such securities exchange. Such notice, in case of public sale, shall state the time and place fixed for such sale and, in the case of sale at a broker's board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as Secured Party may fix in the notice of such sale. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as Secured Party may (in its sole discretion) determine, and Secured Party may bid (which bid may be, in whole or in part, in the form of cancellation of indebtedness) for and purchase the whole or any part of the Collateral. Secured Party shall not be obligated to make any sale of Collateral if it shall determine 3 not to do so, regardless of the fact the notice of sale of Collateral may have been given. Secured Party may, without notice or publication, adjourn any public sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by Secured Party until the sale price is paid by the purchaser or purchasers thereof, but Secured Party shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in the case of any such failure, such Collateral may be sold again upon like notice. As an alternative to exercising the power of sale herein conferred upon it, Secured Party may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral, or any portion thereof, pursuant to a judgment or decree of a court or courts of competent jurisdiction. 6.2 Secured Party's Right to Restrict Sale. Debtor and Pledgor understand that the Collateral has not been registered under the Securities Act of 1933, as amended, or any applicable state securities acts in reliance on exemptions from registration provided by such acts. The parties further understand that the Collateral may not be sold or transferred in the absence of an effective registration statement under the Securities Act of 1933, as amended, and any applicable state securities acts or an opinion of counsel acceptable to the parties that such registration is not required. Debtor and Pledgor agree that in any sale of the Collateral, Secured Party is hereby authorized to comply with any such limitation or restriction in connection with such sale as it may be advised by counsel is necessary in order to avoid any violation of applicable law (including, without limitation, compliance with such procedures as may restrict the number of prospective bidders and purchasers and/or further restrict such prospective bidders or purchasers to persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of such Collateral) or, in order to obtain any required approval of the sale or of the purchaser by any governmental regulatory authority or official, and Debtor and Pledgor further agree that such compliance shall not result in such sale being considered or deemed not to have been made in a commercially reasonable manner, nor shall Secured Party be liable or accountable to Debtor and/or Pledgor for any discount allowed by reason of the fact that such Collateral is sold in compliance with any such limitation or restriction. 7. APPLICATION OF PROCEEDS OF COLLATERAL SALE. Secured Party shall apply all cash held by it pursuant to Section 4 hereof and the proceeds of sale of Collateral as follows: First. First: to the payment of the Expenses; Second. Second: to the payment of the Obligation as Secured Party in its sole discretion may determine; and Third. Third: the balance, if any, of such proceeds shall be paid to Pledgor or their assigns, or as a court of competent jurisdiction may direct. 8. AGENT APPOINTED ATTORNEY-IN-FACT. Pledgor hereby appoints Secured Party to serve as his attorney-in-fact for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument which Secured Party may deem necessary or 4 advisable to accomplish the purposes hereof, which appointment is irrevocable and coupled with an interest. Without limiting the generality of the foregoing, Secured Party shall, to the extent permitted under Section 4 hereof, have the right and power to receive, endorse and collect all checks and other orders for the payment of money made payable to Pledgor representing any dividend, interest payment or other distribution payable or distributable in respect of the Collateral or any part thereof and to give full discharge for the same. 9. MISCELLANEOUS. 9.1 No Waiver. No failure on the part of Secured Party to exercise and no delay in exercising any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy by Secured Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All remedies hereunder are cumulative and not exclusive of any other remedies provided by law. Secured Party may extend or renew the Obligation, and grant releases, compromises or indulgences with respect to the Obligation or any extension or renewal thereof or any security therefor or to any obligor hereunder or thereunder, and no such action shall impair Secured Party's rights hereunder. 9.2 Termination. This Agreement shall terminate when the Obligation is paid in full, at which time Secured Party shall reassign and redeliver (or cause to be so reassigned and redelivered) to Pledgor, without recourse or warranty and at the expense of Pledgor against receipt, the Collateral which is still held by Secured Party hereunder together with appropriate instruments of reassignment and release. 9.3 Addresses for Notices, etc. All notices, requests, demands, directions and other communications provided for hereunder shall be in writing (including telegraphic communication) and mailed or sent via facsimile transmission or delivered to the applicable party at the addresses indicated below: If to Debtor: Gibbs Holdings, LLC Attn: John Gibbs, Manager 807 Wood n Creek Ardmore, Oklahoma 73401 If to Pledgor: John Gibbs 807 Wood n Creek Ardmore, Oklahoma 73401 If to Secured Party: ---------------- ---------------- ---------------- ---------------- 5 or, as to any party, to such other address as such party shall specify by a notice in writing to the other parties. Notice will be deemed effective upon actual receipt. 9.4 Further Assurances. Pledgor agree to do such further reasonable acts and things, and to execute and deliver such additional conveyances, assignments, agreements and instruments, as Secured Party may at any time request in connection with the administration or enforcement of this Agreement (including, without limitation, to aid Secured Party in the sale of all or any part of the Collateral) or related to the Collateral or any part thereof or in order better to assure and confirm unto Secured Party their rights, powers and remedies hereunder. Pledgor hereby consents and agree that the issuer of the Collateral, or any registrar or transfer agent for any of the Collateral, shall be entitled to accept the provisions hereof as conclusive evidence of the right of Secured Party to effect any transfer pursuant to Section 6 hereof, notwithstanding any other notice or direction to the contrary heretofore or hereafter given by Pledgor or any other person to such issuer or to any such registrar or transfer agent. 9.5 Binding Agreement; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto, their respective legal representatives, successors and assigns, except that Pledgor shall not be permitted to assign this Agreement or any interest herein or in the Collateral, or any part thereof, or otherwise pledge, encumber or grant any option with respect to the Collateral, or any part thereof, or any cash or property held by Secured Party as Collateral under this Agreement. 9.6 Governing Law; Amendments. This Agreement shall be governed by the laws of the State of Oklahoma. No provision of this Agreement may be amended, waived or modified, nor may any of the Collateral be released, unless specifically provided for herein, except in writing signed by Secured Party. 9.7 Headings. Paragraph headings used herein are for convenience only and shall not affect the construction of this Agreement. 10. DEFINITIONS. "Event of Default" shall include but not be limited to the following: 10.1 Performance Default. Default by the Pledgor in the due observance or performance of any covenant or agreement contained herein or breach by the Pledgor of any representation or warranty herein contained; and 10.2 Other Default. The occurrence of any default, breach or violation under the provisions of any instrument representing the Obligation of the Debtor or any other instrument, document or agreement securing any of the Obligations. 6 IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date first above written notwithstanding the actual execution date. "DEBTOR" GIBBS HOLDINGS, LLC By: ---------------------------- John Gibbs, Manager "PLEDGOR" -------------------------------- John Gibbs, An Individual "SECURED PARTY" -------------------------------- 7