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Exhibit 5.1
LEGAL OPINION OF PEDERSEN & HOUPT, P.C.
(PEDERSEN & HOUPT, P.C. LETTERHEAD)
October 29, 1998
SpinCycle, Inc.
15990 North Greenway/Hayden Loop
Suite 400
Scottsdale, Arizona 85260
Re: SpinCycle, Inc.
Registration Statement (333-57883)
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-4, Registration No. 333-57883 (as amended to date, 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 the Company's Series B 12-3/4% Senior Discount Notes due
2005 in the aggregate principal amount at maturity of $144,990,000 (the "New
Notes"). The New Notes are being issued pursuant to an Indenture dated as of
April 29, 1998 (the "Indenture") between the Company and Norwest Bank Minnesota,
N.A., as trustee (the "Trustee"), in exchange for the Company's Series A 12-3/4%
Senior Discount Notes due 2005 in the aggregate principal amount at maturity of
$144,990,000 (the "Old Notes").
This opinion is being furnished in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement; (ii) the Indenture; (iii) the form of the New Notes, included as an
exhibit to the Indenture; (iv) the Registration Rights Agreement dated as of
April 29, 1998 between the Company and Credit Suisse First Boston Corporation
(the "Registration Rights Agreement"); and (v) the Form T-1 Statement of
Eligibility of the Trustee filed as an exhibit to the Registration Statement. We
have also examined originals or copies,
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October 29, 1998
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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 copies and the
authenticity of the originals of such copies. We have assumed that the parties
to such documents (including the Company) had the power and authority to enter
into and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, and execution and delivery by such
parties of such documents and (except 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, without any
special investigation, 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 other than (x) securities or anti-fraud laws of any
jurisdiction, (y) the laws, rules and regulations of the General Corporation Law
of the State of Delaware and (z) the federal laws 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. As to any facts material to the opinion expressed herein which were
not
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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.
In this regard, we note that the Operative Documents provide that the laws
of the State of New York are intended to be governing. For the purposes of the
opinions herein, we assumed, without any independent investigation, that the
laws of all jurisdictions that may govern the Operative Documents, other than
those specifically recited in the immediately preceding paragraph, are
identical to the laws of the State of Illinois.
Based upon and subject to the limitations, qualifications, exceptions and
assumptions set forth herein, we are of the opinion that when (i) the
Registration Statement becomes effective under the Securities Act and the
Indenture has been qualified under the Trust Indenture Act of 1939, as amended;
and (ii) the New Notes are executed, authenticated and delivered in accordance
with the terms of the Indenture and issued upon consummation of the exchange
offer as contemplated by the Registration Statement, the New Notes will
constitute valid and binding obligations of the Company, entitled to the
benefits of the Indenture and enforceable against the Company in accordance
with their terms.
The foregoing opinion is limited by the following qualifications:
(A) The opinion is limited by the effect of (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).
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(B) The waiver contained in Section 5.15 of the Indenture may be deemed
unenforceable.
(C) The rights to indemnification and contribution contained in the
Registration Rights Agreement may be limited by state or federal
securities laws or the public policy underlying such laws.
(D) The enforceability of provisions imposing a payment obligation pending
the ability of the Company to comply timely with its registration
obligations under the Registration Rights Agreement and the Indenture
may be limited by applicable laws.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. We also consent to the reference to our
firm in the Registration Statement and in the related Prospectus as the same
appears under the caption "Legal Matters." 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 Securities Act or the rules and regulations of
the Commission.
Very truly yours,
/s/ Pedersen & Houpt, P.C.