EXHIBIT 5
GREGORY Z. GERGANOFF
Attorney at Law
10352 Owens Circle
Westminster, Colorado 80302
June 8, 2000
Arete Industries, Inc.
2955 Valmont Road, Suite 310
Boulder, Colorado 80301
Re: SEC Registration Statement on Form S-8
Gentlemen:
I am counsel for Arete Industries, Inc., a Colorado corporation (the "Company")
in connection with its proposed registration under Form S-8 of the Securities
Act of 1933, as amended ("the Act"), of Fifty Million (50,000,000) shares of its
no par value Common Stock which may be issued to certain employees, advisors and
consultants under several individual stock compensation plans as to which this
opinion is a part, to be filed with the Securities and Exchange Commission ("the
Commission").
In connection with rendering my opinion as set forth below, I have reviewed and
examined originals or copies identified to my satisfaction of the following:
(1) Amended and Restated Articles of Incorporation of the Company, as filed
with the Secretary of State of the State of Colorado on April 22, 1999.
(2) By-laws of the Company and Resolutions of the Board of Directors
authorizing the issuance of Common Shares pursuant to certain stock
compensation plans to certain employees, consultants and advisors, which
have been certified by the proper officers of the Company as being in full
force and effect.
(3) The Registration Statement and exhibits thereto as filed with the
Commission.
I have examined such other documents and records, instruments and certificates
of public officials, officers and representatives of the Company, and have made
such other investigations as I have deemed necessary or appropriate under the
circumstances. In connection with rendering this opinion, I have reviewed such
statutes and judicial precedents as I have deemed relevant and necessary. In my
examination, I have assumed the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of all documents submitted to us
as originals, the conformity with, the original documents of all documents
submitted to us as certified or photostatic copies, and the authenticity of the
originals of such copies. I have further assumed that the recipients of shares
under advisory or consulting agreements will pay the consideration required
under the terms of the respective agreement prior to the issuance of such
shares. Based upon the foregoing and in reliance thereon, it is my opinion that
shares of Common Stock to be issued in the manner contemplated under the
referenced compensation plan and underlying agreements will, upon the receipt of
full payment, issuance and delivery in accordance with the terms thereof, be
duly and validly authorized, legally issued, fully paid and nonassessable in
accordance with the Company's Articles of Incorporation, as amended and pursuant
to the Colorado Business Corporation Act, 1973 C.R.S. 7-101-101 et seq., as
amended.
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This opinion is limited to the laws of the state of Colorado and the Colorado
Business Corporation Act, and I express no opinion with respect to the laws of
any other jurisdiction. While this opinion is given for the sole benefit of the
Company, I consent to you filing this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement on Form S-8. This opinion
is not to be used, circulated, quoted or otherwise referred to for any other
purpose without my prior written consent. This opinion is based upon my
knowledge of the law and facts as of the date hereof. I assume no duty to
communicate with you with respect to any matter which comes to my attention
hereafter. This opinion has been issued after full disclosure to the Company and
waiver by duly authorized officers of the Company of a conflict of interest
created by the fact that the undersigned is receiving certain shares of common
stock from the Company as compensation for services as an employee of the
Registrant, which shares are being registered under the Form S-8 registration
statement for which this opinion is being provided.
Very truly yours,
By: /s/ Gregory Z. Gerganoff
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Gregory Z. Gerganoff , Attorney at Law
