For in-place editing, with GNU sed, you can do:
sed -i -e '1,5{R file2' -e 'd}' file1
Otherwise, you don't need sed:
{ head -n 5 file2; tail -n +6 file1; } > file3
For in-place editing, with GNU sed, you can do:
sed -i -e '1,5{R file2' -e 'd}' file1
Otherwise, you don't need sed:
{ head -n 5 file2; tail -n +6 file1; } > file3