[ARNOLD & PORTER Letterhead]
April 30, 1996
SDNB Financial Corp.
1420 Kettner Boulevard
San Diego, California 92101
Re: SDNB Financial Corp.; Public Offering of up
to 952,677 Shares of Common Stock, No Par
Value
Ladies and Gentlemen:
We have acted as special counsel to SDNB Financial Corp.
("SDNB") in connection with the preparation of a registration statement on
Form S-3 (as amended, the "Registration Statement") and the form of
prospectus constituting a part thereof (the "Prospectus"), filed with the
Securities and Exchange Commission (the "SEC") under the Securities Act of
1933, as amended, relating to the offering for sale by certain securities
holders of SDNB of up to 952,677 shares of the Common Stock, no par value,
of SDNB (the "Shares"). Of the Shares, 765,314 shares are issued and
outstanding and the remaining 187,363 shares are issuable pursuant to
outstanding warrants (individually a "Warrant" and collectively the
"Warrants"), all as described in the Prospectus. Capitalized terms used
herein without definition shall have the meanings attributed to such terms
in the Registration Statement.
In connection with rendering this opinion, we have examined and
relied upon, among other things: (i) the registration Statement; (ii) the
Prospectus; (iii) the opinion of Sherman & Eggers, P.C. delivered to
Arnold & Porter in connection with this opinion (a copy of which is
attached hereto); (iv) the Rights Agent Agreement and the related Warrant
pursuant to which 37,363 of the Shares are issuable; (v) the Warrant
pursuant to which the remaining 150,000 shares are issuable; and (vi)
originals, or copies identified to our satisfaction as being true copies
of originals, of such other documents relating to SDNB, the Common Stock,
and the Warrants as we have deemed appropriate. In such examination, we
have assumed the genuineness of all signatures on original documents, the
authenticity of all documents submitted to us as original documents, the
conformity to original documents of all documents submitted to us as
copies thereof, the legal capacity of all natural persons, and the due
execution and delivery of all documents, where due execution and delivery
are requisite to the effectiveness thereof.
ARNOLD & PORTER
SDNB Financial Corp.
April 30, 1996
Page 2
On the basis of the foregoing examination and assumptions, and
in reliance thereon, and upon consideration of applicable law, we are of
the opinion that:
The 765,314 outstanding Shares are legally issued, fully paid,
and nonassessable; and the 187,363 Shares, when issued and paid for in
accordance with the Warrants, will be legally issued, fully paid, and
nonassessable.
We hereby consent to the inclusion of this opinion as an exhibit
to the Registration Statement and to the use of our name in connection
therewith.
Very truly yours,
/s/Arnold & Porter
Attachment
[SHERMAN & EGGERS Letterhead]
April 26, 1996
Arnold & Porter
777 S. Figueroa St., Ste. 4400
Los Angeles, CA 90017
Ladies & Gentlemen:
You have requested this firm's opinion as special counsel to SDNB
Financial Corp., a California corporation (the "Company"), as to certain
matters in connection with the offering for sale by certain securities
holders of the Company (the "Offering") of up to 952,677 shares of the
Common Stock, no par value (the "Shares") of the Company. Of the Shares,
765,314 shares are issued and outstanding and the remaining 187,363 shares
are issuable pursuant to outstanding warrants (individually a "Warrant" and
collectively the "Warrants"), all as described in the Registration
Statement (hereinafter defined). Capitalized terms used herein without
definition shall have the meanings attributed to such terms in the
Registration Statement on Form S-3 (as amended, the Registration
Statement"), filed with the United States Securities and Exchange
Commission on February 27, 1996 (File No. 33-01231), relating to the
Offering.
In rendering the opinions set forth below, we have examined the
Registration Statement and the Prospectus constituting a part thereof. We
have also examined originals or copies' certified or otherwise identified
to our satisfaction, of the Articles of Incorporation of the Company, as
restated and currency in effect (the "Articles"), the Bylaws of the
Company, as currently in effect (the "Bylaw's"), the Rights Agent Agreement
and the related Warrant pursuant to which 37,363 of the Shares are
issuable, the Warrants pursuant to which the remaining 150,000 shares are
issuable, the minutes of the meetings of each of the Company's Board of
Directors and Shareholders, and such other corporate records and documents
and certificates of government officials as we have deemed appropriate for
the purposes of the opinions set forth below. We have made such
investigations of law as we deem appropriate for purposes of the opinions
set forth below.
Arnold & Porter
April 26, 1996
Page -2-
In addition, in arriving at the opinions expressed below, we have
assumed, but have not verified, that the signatures on all documents that
we have examined are genuine. We have also assumed the authenticity of all
documents submitted to us as originals and the conformity to original
documents of all documents submitted to us as copies.
Based on the foregoing, and subject to the further qualifications set
forth below, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of California. The
Company has full corporate power and authority to perform its obligations
in connection with the Offering, as contemplated by the Prospectus,
including, but not limited to, the execution and filing of the
Registration Statement.
2. The execution and filing of the Registration Statement by the
Company will not violate in any material respect any provision of the
Articles or Bylaws any resolution of the Board of Directors or
Shareholders of the Company, or any law, statute, ordinance, code, rule,
regulation or, to the best of our knowledge, any agreement to which the
Company is a party or any court or administrative order relating to the
Company.
3. The authorized capital stock of the Company consists of
15,000,000 shares of its Common Stock no par value. All the outstanding
shares of Common Stock of the Company have been duly authorized and validly
issued and delivered and are fully paid and nonassessable and are not
subject to any preemptive rights. The Company has reserved a sufficient
number of shares of its Common Stock for issuance pursuant to the Warrants.
4. The Company's Board of Directors consists of the following
individuals, each of whom has been duly elected as a director of the
Company in accordance with the terms of the Company's Articles and Bylaws,
and none of whom has resigned or otherwise been removed from his or her
position as a director of the Company:
Douglas E. Barnhart Karla J. Hertzog
Howard W. Brotman Robert B. Horsman
Charles I. Feurzeig Mark P. Mandell
Murray L. Galinson Patricia L. Roscoe
Margaret Costanza Julius H. Zolezzi
5. The Registration Statement, the Offering, and the issuance of a
total of 187,363 Shares pursuant to the Warrants have been duly and validly
authorized by resolutions adopted by
Arnold & Porter
April 26, 1996
Page -3-
the Company's Board of Directors pursuant to the authority granted to it by
the Articles and Bylaws or the California Corporations Code.
The delivery of this opinion letter to Arnold & Porter is made for the
purpose and with the understanding that Arnold & Porter will rely on the
opinions set forth herein in order to render its opinion to the United
States Securities and Exchange Commission in connection with the Offering.
This opinion letter does not address any matters other than those
expressly addressed hereto. This opinion letter does not express any
opinions as to matters arising under the laws of any jurisdiction other
than California. This opinion letter is given for the sole benefit of
Arnold & Porter; no one else is entitled to rely upon this opinion without
our express written consent. This letter specks only as of the date hereof,
and we undertake no responsibility to update or supplement it after such
date.
Very truly yours,
/s/Sherman & Eggers, PC.