[LETTERHEAD OF MULDOON, MURPHY & FAUCETTE LLP]
September 8, 2000
Board of Directors
Lawrence Financial Holdings, Inc.
311 South Fifth Street
Ironton, Ohio 45638
Re: The issuance of up to 859,625 shares of
Lawrence Financial Holdings, Inc. common stock
Ladies and Gentlemen:
You have requested our opinion concerning certain matters of Maryland
law in connection with the conversion of the Lawrence Federal Savings Bank (the
"Bank"), a federal savings bank, from the mutual to the stock form of ownership,
and the related subscription offering, community offering and syndicated
community offering (the "Offerings") by Lawrence Financial Holdings, Inc. (the
"Company"), a Maryland corporation and the proposed holding company for the
Bank, of up to 747,500 shares of its common stock, par value $.01 per share
("Common Stock") (859,625, shares if the estimated valuation range is increased
up to 15% to reflect changes in market and financial conditions following
commencement of the Offerings).
We understand that the Company will lend to the trust for the Bank's
Employee Stock Ownership Plan (the "ESOP") the funds the ESOP trust will use to
purchase shares of Common Stock for which the ESOP trust subscribes pursuant to
the Offerings and, for purposes of rendering the opinion set forth in paragraph
2 below, we assume that: (a) the Board of Directors of the Company (the "Board")
has duly authorized the loan to the ESOP trust (the "Loan"); (b) the ESOP serves
a valid corporate purpose for the Company; (c) the Loan will be made at an
interest rate and on other terms that are fair to the Company; (d) the terms of
the Loan will be set forth in customary and appropriate documents including,
without limitation, a promissory note representing the indebtedness of the ESOP
trust to the Company as a result of the Loan; and (e) the closing for the Loan
and for the sale of Common Stock to the ESOP trust will be held after the
closing for the sale of the other shares of Common Stock sold in the Offerings
and the receipt by the Company of the proceeds thereof.
In connection with your request for our opinion, you have provided to
us and we have reviewed the Company's articles of incorporation filed with the
Maryland Secretary of State on August 2, 2000 (the "Articles of Incorporation");
the Company's Bylaws; the Company's
Board of Directors
Lawrence Financial Holdings, Inc.
September 8, 2000
Page 2
Registration Statement on Form SB-2, in the form to be filed with the Securities
and Exchange Commission on September 8, 2000 (the "Registration Statement"); the
plan of conversion, as amended; the form of ESOP trust agreement and the form of
ESOP Loan agreement; resolutions of the Board concerning the organization of the
Company and the Offerings; and the form of stock certificate approved by the
Board to represent shares of Common Stock. We have also been furnished a
certificate of the Maryland Secretary of State certifying the Company's good
standing as a Maryland corporation. Capitalized terms used but not defined
herein shall have the meaning given them in the Articles of Incorporation.
Based upon and subject to the foregoing, and limited in all respects to
matters of Maryland law, it is our opinion that:
1. The Company has been duly organized and is validly existing in good
standing as a corporation under the laws of the State of Maryland.
2. Upon the due adoption by the Board of Directors of a resolution
fixing the number of shares of Common Stock to be sold in the Offerings, the
Common Stock to be issued in the Offerings (including the shares to be issued to
the ESOP trust) will be duly authorized by the Board of Directors and, when such
shares are sold and paid for in accordance with the terms set forth in the
prospectus which is included in the Registration Statement and such resolution
of the Board of Directors and certificates representing such shares in the form
provided to us are duly and properly issued, will be validly issued, fully paid
and nonassessable.
The following provisions of the Articles of Incorporation may not be
given effect by a court applying Maryland law, but in our opinion, the failure
to give effect to such provisions will not affect the duly authorized, validly
issued, fully paid and nonassessable status of the Common Stock:
Subsections C.3 and C.6 of Article FIFTH and Section D of
Article NINTH, which grant the Board the authority to construe
and apply the provisions of those Articles, subsection C.4 of
Article FIFTH, to the extent that subsection obligates any
person to provide to the Board the information such subsection
authorizes the Board to demand, and the provision of
Subsection C.7 of Article NINTH empowering the Board to
determine the Fair Market Value of property offered or paid
for the Company's stock by an Interested Stockholder, in each
case to the extent, if any, that a court applying Maryland law
were to impose equitable limitations upon such authority.
Board of Directors
Lawrence Financial Holdings, Inc.
September 8, 2000
Page 3
We assume no obligation to advise you of any events that occur
subsequent to the date of this opinion.
Very truly yours,
/s/ MULDOON, MURPHY & FAUCETTE LLP
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MULDOON, MURPHY & FAUCETTE LLP