FORM OF LEGAL OPINION
[Letterhead of Borrower's and Guarantor's Counsel]
February ____, 2004
Wells Fargo Bank,
National Association,
Agent Bank
5340 Kietzke Lane, Suite 201
Reno, Nevada 89511
Attn: Rochanne Hackett, V.P.
and each of the Banks
described on Schedule 1
hereto, and their
successors and assigns
Re: Credit Agreement dated as of February 20, 2004 (the "Credit Agreement"),
by and among Golden Road Motor Inn, Inc., a Nevada corporation (the
"Borrower"), Monarch Casino & Resort, Inc., a Nevada corporation (the
"Guarantor"), the Lenders therein named (each, together with their
respective successors and assigns, individually being referred to as a
"Lender" and collectively as the "Lenders"), Wells Fargo Bank, National
Association, as the swingline lender (herein in such capacity, together
with its successors and assigns, the "Swingline Lender"), Wells Fargo
Bank, National Association, as the issuer of letters of credit thereunder
(herein in such capacity, together with their successors and assigns, the
"L/C Issuer") and Wells Fargo Bank, National Association, as
administrative and collateral agent for the Lenders, Swingline Lender and
L/C Issuer (herein, in such capacity, called the "Agent Bank" and,
together with the Lenders, Swingline Lender and L/C Issuer, collectively
referred to as the "Banks"). All capitalized terms which are used herein,
and which are not otherwise defined herein, shall have the meaning which
is set forth by Section 1.01 of the Credit Agreement.
Ladies and Gentlemen:
The undersigned is counsel to Borrower and the Guarantor and has acted in
such capacity in connection with the preparation, execution and delivery of the
Credit Agreement and each of the Loan Documents. This opinion is delivered to
you at the request of Borrower and the Guarantor pursuant to Section 3.06 of
the Credit Agreement for the reliance of each of the Banks and their respective
successors and assigns.
In rendering the opinions set forth herein I have: (i) examined, and are
familiar with, originals of each of the executed Loan Documents; and (ii) made
such inquiries, and reviewed such other documents, corporate documentation and
records, as I deemed appropriate under the circumstances. In making such
examination and review, I have assumed the genuineness of all signatures (other
than the signatures of officers signing on behalf of the Borrower and the
Guarantor), the authenticity of all documents submitted to me as originals, the
conformity to original documents of all documents submitted to me as certified
or photostatic copies and the authenticity of the originals of such copies. I
have also assumed the valid authorization, execution and delivery of each Loan
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Document by each party thereto (other than the Borrower and the Guarantor), and
I have assumed, where applicable, that each such other party has been duly
organized, is validly existing and in good standing under its jurisdiction of
organization and possesses the corporate or other organization power to perform
its obligations thereunder.
I am not expressing any opinion as to the effect of the compliance or
noncompliance of any of the Banks with any state or federal laws or regulations
which are applicable because of the legal or regulatory status, or the nature
of the business of any of the Banks.
I am a member of the bar of the State of Nevada and express no opinion as
to the laws of any other jurisdiction other than the federal laws of the United
States of America.
Based on the foregoing and subject to the qualifications set forth herein,
I am of the opinion that:
1. Each of the Borrower and Guarantor have the full power and requisite
corporate or other authority necessary for the execution, delivery and
performance of their respective obligations under the Loan Documents, the
Guaranty and any other document, agreement, certificate or instrument executed
by them or either of them in connection with the Credit Facility.
2. Borrower and Guarantor have each duly authorized the taking of any and
all action necessary to carry out and give effect to the transactions
contemplated to be performed on their respective parts by the Credit Agreement,
the Revolving Credit Note, the Swingline Note, the Deed of Trust, the Financing
Statements, the other Loan Documents, the Guaranty and each other document,
agreement, certificate or instrument executed by them or any of them in
connection with the Credit Facility.
3. Neither the execution and delivery of the Credit Agreement, the
Revolving Credit Note, the Swingline Note, or any other Loan Document, or any
other agreement, certificate or instrument to which Borrower is a party or by
which it is bound in connection with the Credit Facility, nor the consummation
of the transactions contemplated thereunder, or the compliance with or
performance of the terms and conditions therein, is prevented by, limited by,
conflicts: (i) in any respect with, or will result in a breach or violation of,
or a default (with due notice or lapse of time or both) under, or the creation
or imposition of any lien, charge, or encumbrance of any nature whatsoever upon
any of their respective property or assets by virtue of, the terms, conditions
or provisions of (a) the Articles of Incorporation, Bylaws or other documents
of organization or charter of the Borrower or MCRI, or (b) any provision of any
existing law, rule, regulation, order, writ, injunction or decree of any court
of Governmental Authority to which it is subject, or (ii) in any material
respect with, or will result in a material breach or violation of, or a
material default (with due notice or lapse of time or both) under, or the
creation or imposition of any lien, charge, or encumbrance of any nature
whatsoever upon any of its property or assets by virtue of, the terms,
conditions or provisions of any indenture, evidence of indebtedness, loan or
financing agreement, or other agreement or instrument of whatever nature to
which it is a party or by which it is bound.
4. The Credit Agreement, the Notes and all other Loan Documents have been
duly executed and delivered by Borrower and constitute legal, valid and binding
obligations of Borrower, enforceable against Borrower in accordance with their
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respective terms. The Credit Agreement and the Guaranty have been duly
executed and delivered by the Guarantor and constitute the legal, valid and
binding obligations of Guarantor, enforceable against Guarantor in accordance
with their respective terms.
5. The Deed of Trust has been fully executed and delivered and will, when
recorded in the office of the County Recorder of Washoe County, Nevada create a
valid and legally binding encumbrance lien on the Collateral therein described.
No other filing or other registration of any document or instrument is
necessary or advisable to protect the priority of the lien so created and it is
not necessary to re-file or re-record the Deed of Trust in order to maintain
such priority.
6. Upon the filing of the Financing Statements listing the FF&E and other
Collateral, in the office of the County Recorder of Washoe County, Nevada, and
in the office of the Secretary of State of Nevada, the security interest
granted by the Deed of Trust will be a valid perfected security interest in the
Collateral therein described in accordance with the Uniform Commercial Code as
in force and effect in the State of Nevada, and no refiling or re-recording of
such Financing Statements is required in order to maintain the security
interest of Lenders in said Collateral, except continuation statements which
are required to be filed within six (6) months prior to the expiration of five
(5) years from the date of the filing of the original Financing Statements.
7. Except in complying with Nevada Gaming Commission Regulations 8 and 8A,
respectively, it is not necessary under the laws of Nevada (a) to enable the
Agent Bank and the Lenders or any of them to enforce their respective rights
under the Loan Documents or (b) by reason of the execution, delivery or
performance of the Loan Documents, that any of the Banks should be licenses,
qualified or authorized to carry on business in any such jurisdiction.
8. The transactions contemplated by the Credit Agreement will not violate
the usury laws of the State of Nevada.
9. Each of Borrower and Guarantor has obtained all authorizations,
consents, approvals, orders, licenses and permits from, and has accomplished
all filings, registrations and qualifications with, or obtained exemptions from
any of the foregoing from, all Governmental Authorities that are necessary for
the transaction of its business as contemplated under the Credit Agreement.
The opinions set forth in Paragraphs (4) through (6) above are subject to
the additional qualifications that: (a) the enforcement of the Loan Documents
and the Guaranty may be subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereinafter in effect relating to creditors'
rights generally; (b) certain of the provisions contained in the Loan Documents
and the Guaranty may be unenforceable in whole or in part, to the extent that
any such provision may contravene the public policy of the State of Nevada; and
(c) certain waivers contained in the Loan Documents and the Guaranty may be
unenforceable in whole or in part under the applicable laws of the State of
Nevada, but the inclusion of such provisions, as described in (b) and (c)
above, does not affect the validity of such Loan Documents and the Guaranty and
such Loan Documents and the Guaranty contain adequate provisions for enforcing
payment of all monetary obligations thereunder and for the practical
realization of the rights and benefits afforded thereby, provided such
enforcement is conducted in accordance with the procedures established by the
laws of the State of Nevada.
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This opinion is rendered to the Banks, and their respective successors and
assigns, in connection with the transactions referred to herein and may not be
relied on in any other context; nor may it be relied on by any other Person.
This opinion may not be quoted nor may copies hereof be furnished to any other
Person without the prior written consent of the undersigned, except that the
Banks, and their respective successors and assigns, and any of them, may
furnish a copy hereof: (i) to their respective independent auditors and
attorneys; (ii) to any Governmental Authority or authority having regulatory
jurisdiction over any of the Banks, or their respective successors and assigns;
(iii) pursuant to order or legal process of any court or Governmental
Authority; (iv) in connection with any legal action to which any of the Banks,
or their respective successors and assigns, are a party arising out of the
transactions referred to above; or (v) to a financial institution in connection
with a proposed assignment of any interest in the Bank Facilities or a proposed
transfer of a participation interest in the Bank Facilities.
Sincerely,