**Exhibit 4(c)(2)**

 

THESE SECURITIES HAVE NOTBEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIESACT”) AND MAY NOT BE OFFERED, TRANSFERRED, SOLD, PLEDGED, HYPOTHECATED,ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT (i) PURSUANT TO A REGISTRATIONSTATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS WHICHHAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE SECURITIES, OR (ii)PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER RULE 144 OF THE SECURITIES ACTBUT ONLY IF THE REGISTERED HOLDER HEREOF HAS FIRST OBTAINED THE WRITTEN OPINIONOF COUNSEL TO GATEWAY ENERGY CORPORATION (THE “COMPANY”), OR OTHER COUNSELREASONABLY ACCEPTABLE TO THE COMPANY, TO THE EFFECT THAT THE PROPOSEDDISPOSITION IS CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACTAS WELL AS ANY APPLICABLE STATE SECURITIES LAWS.

 
| VOID AFTER FEBRUARY 28, 2006 | No. WT-1       |
|-----------------------------------|----------------|
|                              | 100,000 Shares |

 

**COMMONSTOCK PURCHASE WARRANT**

 

**of**

 

**GATEWAYENERGY CORPORATION**

 

THIS CERTIFIES THAT Josh H. Buterin (the “Warrantholder”)is entitled to subscribe for and purchase from GATEWAY ENERGY CORPORATION, aDelaware corporation (the “Company”), at a price of $0.30 per share (the “WarrantPrice”), payable in cash, check, or common stock of the Company, pursuant tothe further terms hereof, One Hundred Thousand (100,000) fully paid andnon-assessable shares of the Company’s common stock, par value $0.25 per share(the “Common Stock”), such price and such number of shares being subject toadjustment as set forth in this warrant. This warrant may be exercised at any time from the date of grant untilthe close of business on February 28, 2006.

 

Upon delivery of this warrant, together with paymentof the Warrant Price for the shares of Common Stock purchased, at the principaloffice of the Company or at such other office or agency as the Company maydesignate by notice in writing to the Warrantholder, the Warrantholder shall beentitled to receive a certificate or certificates for the shares of CommonStock so purchased.  All shares of CommonStock which may be issued upon the

 

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exerciseof this warrant will, upon issuance, be fully paid and non-assessable and freefrom all taxes, liens, charges and encumbrances with respect thereto.

 

This warrant is subject to the following terms andconditions:

 

1.                                       Exercise of Warrant.

 

(a)                                  Manner of Exercise.  Thiswarrant may be exercised in whole or in part by the surrender of this warrantat the principal office of the Company and by the payment to the Company bycash, check, or Common Stock of the Company for the number of shares of CommonStock being purchased.  Common Stocksurrendered shall be valued as follows:

 

(i)                                     If traded on a national securities exchangeor reported through the automated quotation system of a registered securitiesassociation, the value shall be deemed to be the average of the closing pricesof the Common Stock on such exchange or system during the thirty calendar dayperiod ending three (3) calendar days prior to the exercise date;

 

(ii)                                  If actively traded over-the-counter, thevalue shall be deemed to be the average of the closing bid or sale prices(whichever is applicable) during the thirty calendar day period ending three(3) calendar days prior to the exercise date; and

 

(iii)                               If there is no active public market, thevalue shall be the fair market value thereof, as determined by the Board ofDirectors in the good faith exercise of its reasonable business judgment.

 

(b)                                 Partial Exercise.  Onany partial exercise, the Company shall promptly issue and deliver to theWarrantholder a new warrant or warrants of like tenor in the name of thatWarrantholder providing for the right to purchase that number of shares as towhich this warrant has not been exercised.

 

2.                                       Delivery of Stock Certificates. Within a reasonable time after full or partial exercise of this warrant,the Company, at its expense, will cause to be issued in the name of anddelivered to the Warrantholder, a certificate or certificates for the number ofshares of Common Stock to which the Warrantholder shall be entitled upon suchexercise.  No fractional shares will beissued upon exercise of rights to purchase under this warrant.  If upon any exercise of this warrant afraction of a share results, the Company will pay the fair cash value of thatfractional share.

 

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3.                                       Anti-Dilution Provisions. In the event of any change incapitalization affecting the Common Stock of the Company, such as a stockdividend, stock split or recapitalization, the Company shall make proportionateadjustments with respect to (i) the aggregate number of shares of Common Stockissuable upon exercise of this warrant, (ii) the Warrant Price, and (iii) suchother matters as may be appropriate in light of the circumstances.

 

4.                                       Compliance with Securities Act.  TheWarrantholder, by acceptance hereof, agrees that this warrant and the shares ofCommon Stock to be issued upon exercise hereof are being acquired forinvestment and that such Warrantholder will not offer, sell or otherwisedispose of this warrant or any shares to be issued upon exercise hereof exceptunder circumstances which will not result in a violation of the SecuritiesAct.  Certificates representing allshares (unless registered under the Act or an opinion of counsel has beengiven, reasonably satisfactory to the Company, that an exemption fromregistration under the Act is available), shall be stamped or imprinted with alegend in substantially the following form:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THESECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND MAY NOT BEOFFERED, TRANSFERRED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR OTHERWISEDISPOSED OF EXCEPT (i) PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIESACT AND APPLICABLE STATE SECURITIES LAWS WHICH HAS BECOME EFFECTIVE AND ISCURRENT WITH RESPECT TO THESE SECURITIES, OR (ii) PURSUANT TO AN EXEMPTION FROMREGISTRATION UNDER RULE 144 OF THE SECURITIES ACT BUT ONLY IF THE REGISTEREDHOLDER HEREOF HAS FIRST OBTAINED THE WRITTEN OPINION OF COUNSEL TO GATEWAYENERGY CORPORATION (THE “COMPANY”), OR OTHER COUNSEL REASONABLY ACCEPTABLE TOTHE COMPANY, TO THE EFFECT THAT THE PROPOSED DISPOSITION IS CONSISTENT WITH ALLAPPLICABLE PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY APPLICABLE STATESECURITIES LAWS.

 

5.                                       Notices.  Upon any adjustments of theWarrant Price and any increase or decrease in the number of shares of CommonStock purchasable upon the exercise of this warrant, then, and in each suchcase, the Company, within thirty (30) days thereafter, shall give writtennotice thereof to the registered Warrantholder at the address of suchWarrantholder as shown on the books of the Company which notice shall state theWarrant Price as adjusted and the increased or decreased number of sharespurchasable upon the exercise of this warrant, setting forth in reasonabledetail the method of calculation of each.

 

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6.                                       Miscellaneous.

 

(a)                                  Reservation of Stock.  TheCompany covenants that it will at all times reserve and keep available, solelyfor issuance upon exercise of this warrant, all shares of Common Stock fromtime to time issuable upon exercise of this warrant.

 

(b)                                 Modification.  Thiswarrant and any of its terms may be changed, waived, or terminated only by awritten instrument signed by the Company and the Warrantholder.

 

(c)                                  Replacement.  On receipt of evidencereasonably satisfactory to the Company of the loss, theft, destruction, ormutilation of this warrant and, in the case of loss, theft, or destruction, ondelivery of any indemnity agreement or bond reasonably satisfactory in form andamount to the Company or, in the case of mutilation, upon surrender orcancellation of this warrant, the Company, at its expense, will execute anddeliver, in lieu of this warrant, a new warrant of like tenor.

 

(d)                                 No Rights as Stockholder.  NoWarrantholder, as such, shall be entitled to vote or receive dividends or beconsidered a stockholder of the Company for any purpose, nor shall anything inthis warrant be construed to confer on any Warrantholder as such, any rights ofa stockholder of the Company or any right to vote, to give or withhold consentto any corporate action, to receive notice of meetings of stockholders, toreceive dividends or otherwise.

 

(e)                                  Notices.  Notices hereunder to theWarrantholder shall be sent by certified or registered mail to the addressgiven to the Company by the Warrantholder and shall be deemed given when somailed.

 

(f)                                    Arbitration.  Any disputes arising out of,related to or in connection with this warrant shall be submitted to bindingarbitration pursuant to the commercial arbitration rules of the AmericanArbitration Association.  The parties agreethat the exclusive jurisdiction and venue for (a) any such arbitration and (b)any action to compel any such arbitration shall be in the county and state ofdomicile of the party being served with the arbitration demand, and each partyhereto hereby consents to such jurisdiction and venue for the purpose of anysuch arbitration or action to compel arbitration.  Each party shall have thirty (30) days fromthe date of service of the arbitration demand to appoint an independent andneutral arbitrator.  The two arbitratorsappointed by the parties shall then have thirty (30) days to appoint a thirdarbitrator.  The arbitrators shalldetermine the applicable substantive and procedural law for the arbitrationproceedings, and

 

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mayaward reasonable attorneys’ fees and actual costs incurred in connectionherewith.

 

(g)                                 Transferability. Subject to the restrictions set forth on the face of this Warrant and inSection 4 hereof, this Warrant may be assigned or transferred by theWarrantholder.  In the event of the deathor disability of the Warrantholder, this Warrant may be exercised by any dulyappointed guardian, conservator or personal representative of the estate of theWarrantholder.

 

IN WITNESS WHEREOF, the Company has caused thiswarrant to be signed by its duly authorized officer.

 

DATED:  November 1, 2004

 

 
|   | GATEWAY ENERGY CORPORATION |
|--------|----------------------------|
|   |                       |
|   |                       |
|   | By:                        | /s/ John A. Raasch |   |
|   |                       |   |   |
|   |                       |   |   |
|   |                       |     John A. Raasch |   |
|   |                       | (Name) |   |
|   |                       |   |   |
|   |                       |   |   |
|   |                       |     President |   |
|   |                       | (Title) |   |

 

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