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5.10[3] Opinion MemorandumLEGAL OPINION MEMORANDUM TO: Legal Opinions CommitteeFROM: Diligence Attorney RE: Target Co./Initial Public Offering of Common Stock DATE: December 15, 1993 We have been asked to deliver the following legal opinion (the "Opinion") to certain underwriters in connection with the initial public offering by Target Co. (the "Company") of 1 million shares of common stock, par value $.01 per share of the Company, (the "Shares"). The Opinion is required by Section 13(a)(ii)(x) of the Stock Purchase Agreement. This memorandum sets forth the basis for each statement made and each opinion of law expressed in the Opinion. OPINION: The Company is duly incorporated and is validly existing and is in good standing under the laws of the State of Idaho with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement. Due Diligence/Support: ¥ Personal review of the applicable provisions of the Idaho Business Corporation Act (the "Act") in effect in May 1993 and September 1987. The Act provides that corporations may be organized under the Act for any lawful purpose or purposes, except for the purpose of banking or insurance or the operation of railroads, and that each corporation so organized shall have all powers necessary or convenient to effect any or all of the purposes for which the corporation is formed. The Act further provides that the purpose or purposes for which the corporation is organized which may be stated in the charter to be, or to include, the transaction of any or all lawful businesses. ¥ Personal review of the Articles of Incorporation of the Company, certified on May 10, 1993 by the Secretary of State of the State of Idaho. The Company's Articles contain no applicable restrictions on the corporate power and authority of the Company, and provide specifically that the Company "is organized for the transaction of any or all lawful business for which businesses may be incorporated." ¥ Personal review of a copy of the Bylaws of the Company as certified by a Secretary's Certificate dated May 10, 1993. The Company's Bylaws contain no applicable restrictions on the corporate power and authority of the Company. ¥ Personal review of the Purchase Agreement. In Section 8(a)(ii) thereof, the Company represents and warrants that it "has been duly incorporated and is validly existing as a corporation in good standing under the laws of Idaho with corporate power and authority to own, lease and operate its properties and conduct its business as described in the Registration Statement." ¥ Personal review of the Registration Statement, which provides, among other things, that the Company was incorporated in Idaho in September 1987. ¥ Personal review of the minute books since September 1987. ¥ Personal review of the certificate, dated May 10, 1993, of the Secretary of the Company certifying, among other things, as to the absence of any amendment to the Articles of Incorporation, the truth, completeness and accuracy of the Bylaws attached thereto, the authorization of the form of the Purchase Agreement and Registration Statement, and the due adoption of certain resolutions of the Board of Directors and stockholders of the Company and the accuracy of the representations and warranties in the Purchase Agreement.OPINION: The Shares to be purchased from the Company pursuant to the provisions of the Agreement have been duly authorized and, when issued and paid for in accordance with the provisions of the Agreement, will have been validly issued and will be fully paid and non-assessable, and such Shares are not subject to the preemptive rights of any stockholder of the Company. Due Diligence/Support: ¥ Personal review of the applicable provisions of the Act in effect as of the date of approval of the form of the Purchase Agreement and the date on which the Purchase Agreement is to be signed. ¥ Personal review of the Company's Articles of Incorporation which contain no applicable restrictions on the corporate power and authority of the Company. ¥ Personal review of the Bylaws, which contain no applicable restrictions on the corporate power and authority of the Company. Section 2.2 of the Bylaws provides that the President shall be the chief executive officer of the Company and that he may execute any and all contracts on behalf thereof. The Bylaws further provide that the President or any Vice President may execute certificates for the Company's shares of capital stock. Section 2.3 of the Bylaws provides that the Secretary may sign with any duly authorized officer certificates for the Company's shares of capital stock. ¥ Personal review of resolutions adopted by the Board of Directors on May 1, 1993 approving and authorizing the issuance and sale of up to 2,000,000 shares of the common stock of the Company. ¥ Personal review of the Purchase Agreement wherein the Company represents and warrants, among other things, that the Shares to be sold by the Company have been duly paid for in accordance with this Agreement, will be validly issued, fully paid and non-assessable; and such Shares are not subject to the preemptive rights of any stockholder. ¥ Personal review of the certificate, dated May 23, 1993, delivered pursuant to Section 4.3(a) of the Purchase Agreement, of the President of the Company, as to the accuracy of the representations and warranties made in the Purchase Agreement, and as to the performance by the Company of all its obligations thereunder. ¥ Personal review of the certificate, dated May 23, 1993, of the President of the Company, with respect to the reservation of Shares. ¥ Personal review of the certificate of the Transfer Agent as to the issuance of the Shares. OPINION: The Common Stock of the Company conforms to the description thereof contained in the Registration Statement under the caption "Description of Capital Stock." Due Diligence/Support: ¥ Personal comparison of the specimen Share certificate with the description thereof contained in the Registration Statement. ¥ Personal review of the Purchase Agreement wherein the Company represents and warrants that the Shares conform to the description thereof contained in the Registration Statement and such description conforms to the rights set forth in the instruments defining the same. ¥ Personal review of the certificate, dated May 23, 1993, of the President of the Company as to the accuracy of the representations and warranties made in the Purchase Agreement. ¥ Personal review of the Secretary's Certificate, certifying to, among other things, the specimen Share certificate attached thereto. OPINION: The Agreement has been duly authorized, executed and delivered by the Company. Due Diligence/Support: ¥ Personal review of the applicable provisions of the Act in effect as of the date of approval of the form of the Purchase Agreement and as of the date on which the Purchase Agreement is to be signed. ¥ Personal review of the Company's Articles of Incorporation which contain no applicable restriction on corporate power and authority. ¥ Personal review of the Bylaws which contain no applicable restriction on the corporate power and authority of the Company, and which provide further that the President and the Vice President may execute contracts on behalf of the Company which have been authorized by the Board of Directors. ¥ Personal review of the resolutions adopted by the Board of Directors of the Company on May 10, 1993 which approved and authorized the issuance and sale of up to 1,000,000 Common Shares of the Company and authorized the entry into the Underwriting Agreement, with such changes, additions, deletions and modifications therein as the President shall deem necessary or appropriate, and that the execution by the President of such underwriting agreement shall be conclusive evidence of the authorization and approval thereof by the Company. ¥ Personal review of the Purchase Agreement wherein the Company represents and warrants that the consummation of the transactions contemplated therein and in the Registration Statement and compliance with the terms of this Agreement have been duly authorized by all necessary corporate action and do not and will not result in any violation of the articles of incorporation or bylaws of the Company, and do not and will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or incumbrance upon any property or assets of the Company. ¥ Personal review of the Secretary's Certificate certifying as to the minutes of the meeting of the Board of Directors on the date the form of the underwriting agreement was approved, the absence of amendment, modification or rescission of resolutions pertaining to the offering adopted at such meeting, the accuracy of the representations and warranties made in the Purchase Agreement and as to the incumbency and signatures of officers and directors of the Company.