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Exhibit 5.1
October 16, 2000
Digital Generation Systems, Inc.
5221 North O'Connor Boulevard
Suite 950
Irving, Texas 75039
Ladies and Gentlemen:
We have acted as counsel to Digital Generation Systems, Inc., a California
corporation (the "Company"), in connection with the preparation and filing of
a Registration Statement on Form S-4 (the "Registration Statement") with the
Securities and Exchange Commission for the purpose of registering certain
shares of the Company's common stock, no par value (the "Shares"), under the
Securities Act of 1933, as amended. The Shares are to be issued to
shareholders of StarGuide Digital Networks, Inc., a Nevada corporation
("StarGuide"), in connection with the proposed merger of the Company and
StarGuide as specified in an Agreement and Plan of Merger, dated July 7, 2000
(the "Agreement"), by and among the Company, SG Nevada Merger Sub Inc., a
Nevada corporation and wholly owned subsidiary of the Company ("Acquisition
Sub"), and StarGuide, according to which Acquisition Sub will merge with and
into StarGuide and StarGuide will become a wholly owned subsidiary of the
Company (the "Merger").
In connection with this opinion, we have reviewed and are familiar with the
Company's articles of incorporation and bylaws and such other records and
agreements of the Company, certificates of public officials, certificates of
officers or other representatives of the Company, and other documents,
certificates and records as we have deemed necessary or appropriate as a basis
for the opinion set forth herein.
In our examination, we have assumed the genuineness of all signatures, the
legal capacity of natural persons, 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. As to various facts material to this opinion letter, we have relied
upon statements and representations of the Company and its officers and other
representatives and of public officials, set forth in certificates delivered
to us, without independently verifying the accuracy of the information
contained therein.
Based upon the foregoing and subject to the assumptions stated herein, it is
our opinion that the issuance of the Shares has been duly authorized and, if
and when the Merger is consummated, the Shares will be validly issued, fully
paid and non-assessable when issued to shareholders of StarGuide in accordance
with all of the terms and conditions of the Agreement.
The opinion herein is also subject to the following exceptions, limitations
and qualifications:
A. The opinion expressed herein is limited to the corporate laws of the
State of California, and we assume no responsibility as to the applicability
or the effect of any other laws or regulations. The lawyers in this Firm
involved in the representation of the Company in connection with the issuance
of the Shares are members only of the State Bar of Texas. The opinion
expressed above is based solely on our review, as Texas lawyers, of the
General Corporation Law of California. We have not reviewed any other laws or
regulations of the State of California (including, without limitation, any
interpretations of the General Corporation Law of California) or retained or
relied on any opinion or advice of California counsel, and our opinions are
limited to the application of the General Corporation Law of California.
B. This opinion letter is as of the date hereof, and we undertake no
obligation, and expressly disclaim any obligation, to advise the Company or
any other person or entity of any change in any matter set forth herein.
C. This opinion letter is limited to the matters expressly stated, and no
opinion other than upon the matters so expressly stated is implied or may be
inferred.
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October 16, 2000
Page 2
This opinion is delivered to the Company solely for use in connection with
the Registration Statement and may not be used or relied upon for any other
purpose. Accordingly, we assume no professional responsibility to any other
person whatsoever, and the opinion expressed herein may not be relied upon,
circulated, quoted in whole or in part, or otherwise referred to in any report
or document, or furnished to any other person or entity, without our prior
written consent.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference made to us in the Registration
Statement and the proxy statement/prospectus forming a part thereof under the
caption "Legal Matters." In giving this consent, we do not thereby admit that
we come within the category of persons whose consent is required under Section
7 of the Securities Act of 1933, as amended, or the Rules and Regulations of
the Securities and Exchange Commission promulgated thereunder.
Respectfully submitted,
GARDERE & WYNNE, L.L.P.
By: /s/ David R. Earhart
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David R. Earhart, Partner
