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LEGAL OPINION OF PEDERSEN & HOUPT, P.C.
(Pedersen & Houpt, P.C. Letterhead)
October 20, 1998
SpinCycle, Inc.
15990 North Greenway/Hayden Loop
Suite 400
Scottsdale, Arizona 85260
Re: SpinCycle, Inc.
Registration Statement (333-57989)
Gentlemen:
We have acted as counsel to SpinCycle, Inc., a Delaware corporation
(the "Company"), in connection with the preparation of a Registration Statement
on Form S-1, Registration No. 333-57989 and all amendements thereto (as may
hereafter be amended, the "Registration Statement"), which has been filed by the
Company with the Securities and Exchange Commission (the "Commission") for the
purpose of registering under the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations thereunder (i) 144,990 Warrants
(the "Warrants") to purchase 26,661 shares of Common Stock, par value $.01 per
share, of the Company (the "Warrant Shares") and (ii) the Warrant Shares. The
Warrants were issued pursuant to a Warrant Agreement (the "Warrant Agreement")
dated as of April 29, 1998 between the Company and Norwest Bank Minnesota, N.A.,
as Warrant Agent for the benefit of the holders of the Warrants (in such
capacity, the "Warrant Agent").
This opinion is being furnished in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended
(the "Act").
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement on Form S-1 as filed with the Commission on June 29, 1998 under the
Act, Amendment No. 1 thereto filed on September 29, 1998 and Amendment No. 2
thereto with which this opinion is being filed; (ii) the Warrant Agreement; and
(iii) the form of the Warrants, included as an
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SpinCycle, Inc.
October 20, 1998
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exhibit to the Warrant Agreement. We have also examined originals or copies,
certified or otherwise identified to our satisfaction, of such other records of
the Company and such agreements, certificates or records of public officials,
certificates of officers or representatives of the Company, respectively, and
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein. The documents
described in clauses (ii) and (iii) are referred to herein as the "Operative
Documents."
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures (including endorsements), the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such copies. In making our
examination of executed documents (including the Operative Documents), we have
assumed that the parties thereto (including the Company) had the power,
corporate or other, to enter into and perform all obligations thereunder and
have also assumed the due authorization by all requisite action, corporate or
other, and execution and delivery by such parties of such documents and (except
to the extent we have opined on such matters below with respect to the Operative
Documents) that such documents constitute valid and binding obligations of such
parties. In providing the opinion set forth below, we have also assumed that the
execution and delivery by the Company of the Operative Documents and the
performance by the Company of its obligations thereunder do not and will not
violate, conflict with, or constitute a default under (i) any agreement or
instrument to which the Company or any of its properties is subject, (ii) any
law, rule, or regulation to which the Company or its properties is subject
(except that we do not make the assumption set forth in this clause (ii) any
law, rule, or regulation to which the Company or its properties is subject
(other than securities or anti-fraud laws of any jurisdiction), but without our
having made any special investigation concerning any other laws, rules or
regulations except that we do not make the assumption set forth in this clause
(ii) with respect to the laws, rules and regulations of the General Corporation
Law of
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SpinCycle, Inc.
October 20, 1998
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the State of Delaware and of the United States of America which, in our
experience, are normally applicable to transactions of the type contemplated by
the Operative Documents, (iii) any judicial or regulatory order or decree of any
governmental authority or (iv) any consent, approval, license, authorization or
validation of, or filing, recording or registration with any governmental
authority. Based solely upon discussions with officers of the Company
responsible for such matters and review of material documents identified to us
by such officers, there are no such violations, conflicts or defaults. Based on
our due diligence investigation, we do not know of any other such violations,
conflicts or defaults. As to any facts material to the opinion expressed herein
which were not independently established or verified, we have relied upon oral
or written statements and representations of officers and other representatives
of the Company and the Trustee and others.
We are members of the Bar of the State of Illinois, and we express no
opinion with respect to laws other than the laws of the State of Illinois, the
General Corporation Law of the State of Delaware and federal laws of the United
States of America.
Based upon and subject to the limitations, qualifications, exceptions
and assumptions set forth herein, we are of the opinion that the Warrants
constitute valid and binding obligations of the Company, entitled to the
benefits of the Warrant Agreement and enforceable against the Company in
accordance with their terms, except that (A) the enforcement thereof may be
subject to, or limited by, (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding at law or in equity) and (B) the rights to indemnification and
contribution contained in the Warrant Agreement may be limited by state or
federal securities laws or the public policy underlying such laws.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement.
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SpinCycle, Inc.
October 20, 1998
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In giving this consent, we do not thereby admit that we are included in the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations of the Commission.
Very truly yours,
/s/ Pedersen & Houpt, P.C.