Dorsey & Whitney LLP
1420 Fifth Avenue, Suite 3400
Seattle, Washington 98101
August 8, 2000
Pawnbroker.com, Inc.
85 Keystone, Suite A
Reno, NV 89503
Re: Registration Statement on Form S-1 for Selling Shareholders
Ladies and Gentlemen:
We have acted as counsel to Pawnbroker.com, Inc., a Delaware corporation
(the "Company"), in connection with a Registration Statement on Form S-1 (the
"Registration Statement") filed July 31, 2000, relating to the resale of an
aggregate of 9,831,091 Company common shares (the "Shares") by Lamothe
Investment Corp. ("Lamothe"), Gestrow Investments Limited ("Gestrow"), and
Ladenburg Thalmann & Co. Inc. ("Ladenburg"). The Shares are issuable by the
Company as follows: (i) 8,727,273 shares that may be sold by the Company to
Gestrow pursuant to a common stock purchase agreement dated July 6, 2000 (the
"Gestrow Stock Purchase Agreement"); (ii) an aggregate of 668,524 shares
issuable upon the exercise of two warrants exercisable by each of Gestrow and
Ladenburg (the "Gestrow and Ladenburg Warrants"); (iii) 58,824 shares issuable
upon the exercise of a warrant exercisable by Lamothe (the "Lamothe Warrant");
and (iv) 376,470 shares issuable upon the conversion of a nine percent (9%)
convertible debenture held by Lamothe (the "Lamothe Debenture"). Each of the
Gestrow Stock Purchase Agreement, the Gestrow and Ladenburg Warrants, the
Lamothe Warrant, and the Lamothe Convertible Debenture are hereafter referred to
as the "Instruments".
We have examined such documents and have reviewed such questions of law as
we have considered necessary and appropriate for the purposes of the opinions
set forth below. In rendering our opinions set forth below, we have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures and the conformity to authentic originals of all documents
submitted to us as copies. We have also assumed the legal capacity for all
purposes relevant hereto of all natural persons and, with respect to all parties
to agreements or instruments relevant hereto other than the Company, that such
parties had the requisite power and authority (corporate or otherwise) to
execute, deliver and perform such agreements or instruments, that such
agreements or
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Pawnbroker.com Inc.
85 Keystone Suite A
Reno NV 89503
August 8, 2000
Page 2
instruments have been duly authorized by all requisite action (corporate or
otherwise), executed and delivered by such parties and that such agreements or
instruments are the valid, binding and enforceable obligations of such parties.
As to questions of fact material to our opinions, we have relied upon
certificates of officers of the Company and of public officials.
Based on the foregoing, we are of the opinion that the Shares to be issued
to the Selling Shareholders under the terms of the Instruments have been duly
authorized and, upon issuance, delivery and payment therefor in accordance with
the terms of the Instruments as described in the Registration Statement, will be
validly issued, fully paid and nonassessable.
Our opinions expressed above are limited to the Delaware General
Corporation Law.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Dorsey & Whitney LLP
