Exhibit 10.1

 
ASSET PURCHASE AGREEMENT

THIS AGREEMENT is made this 10th day of May  2012, by and between
ART’S-WAYACQUISITION, INC., an Iowa corporation, ("Buyer"), and UNIVERSAL
HARVESTER CO., INC., an Arkansas corporation duly authorized to do business in
the State of Iowa ("Seller") and ARDIS A. HEIDEBRINK (“Heidebrink”) and F.
MURRAY BUCHHEIT (“Buchheit”) (“Heidebrink” and “Buchheit” being sometimes
hereinafter collectively referred to as “Seller’s Shareholders”).
 
 
RECITALS

WHEREAS, Seller is in the business of manufacturing and selling agricultural
implements and equipment, including without limitation pick-up reels for
combines and swathers (“Seller’s Business”); and,

WHEREAS, Buyer desires to purchase and Seller desires to sell substantially all
of  the assets of Seller, excepting only cash and accounts receivable, under the
conditions and terms hereinafter set forth; and,

WHEREAS, Seller’s Shareholders desire that the sale of the assets between Buyer
and Seller provided for herein take place and have joined in this Agreement and
the warranties and covenants made herein for the purpose of inducing Buyer to
enter into and close the transaction provided for herein.

NOW, THEREFORE, for and in consideration of the premises and other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged,

 
 

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IT IS HEREBY AGREED AS FOLLOWS:

AGREEMENT

ARTICLE I

PURCHASE AND SALE OF ASSETS

1.1           Purchased Assets.  Subject to the terms and conditions herein set
forth, the Buyer shall purchase at the Closing (as hereinafter defined), and the
Seller shall sell and transfer to the Buyer, all assets and properties owned by
Seller excepting only cash, bank accounts, accounts receivable, and pre-paid
items (“Purchased Assets”) .  The Purchased Assets to be conveyed include,
without limitation, the following:

 
(a)
All manufacturing machinery and equipment, furniture, furnishings, office
machinery and equipment, vehicles, leasehold improvements, tooling, fixtures,
accessories, and tools owned by Seller or used in connection with Seller’s
Business, including, without limitation, all assets shown or reflected as autos
and trucks, furniture and fixtures, office equipment, dies-jigs-molds, machinery
and equipment and capital lease equipment referred to on the balance sheet of
Seller as of November, 2011, previously furnished to Buyer (hereinafter referred
to as “Equipment”); and,

 
(b)
Intangible property owned by Seller or used in the operation of Seller’s
Business including, without limitation:

 
 

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(i)
All designs, drawings, blue prints, computer data, computer software,
engineering data or studies, manufacturing data, prototypes, stampings,
projects, in-process formulas, processes, technical information and know-how
related to or useful in the Seller’s Business;

 
(ii)
All patents, patent applications, and unpatented inventions applicable to any
product manufactured or sold by Seller including without limitation all such
patents listed on Schedule 4.15;

 
(iii)
All logos, trade names, trademarks, service marks, copyrights, including
applications for and reservations for any of the foregoing pertaining to any
products manufactured or sold by Seller;

 
(iv)
All customer lists, customer back-logs, pending orders, pending purchase
contracts, customer files, vendors’ lists, purchase records, sales records, or
computer software and data relating to Seller’s Business;

 
(v)
All distribution or other contracts pertaining to the marketing of any product
together with all dealership, dealer, or distributor agreements or contracts
with the Seller including any agreements with AGCO, Honey Bee, and Case/NH for
the manufacture of, furnishing, marketing, or distribution of any product;

 
 

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(vi)
All websites, telephone numbers, fax numbers, computer addresses, or
registrations used or usable in connection with Seller’s Business.

 
(vii)
All licenses or permits applicable to the operation of Seller’s Business
including all such licenses and permits listed on Schedule 4.16.

 
 
(viii)
All goodwill associated with the Seller’s Business.

(The foregoing paragraph (b) including sub-paragraphs (i) through (viii) being
hereinafter referred to as “Intangibles”)

 
(c)
All inventories of finished goods, spare parts, work in process, supplies, raw
materials, and other inventory-type items (hereinafter referred to as
“Inventories”).

 
(d)
All land, improvements to land including buildings, facilities, fixtures, and
installations of any and all kinds owned by Seller including, without
limitation, those reflected on the November, 2011, balance sheet of Seller
(hereinafter referred to as “Real Property”), a description of said real
property being as set forth in the attached Schedule 1.1(d)

 
(e)
All other property of whatever kind and nature owned by Seller and used or
useful in the operation of Seller’s Business, excepting only cash, bank
accounts, accounts receivable, and prepaid items (hereinafter referred to as
“Miscellaneous Assets”).

(The foregoing Equipment, Intangibles, Inventories, Real Property, and
Miscellaneous Assets being hereinafter sometimes referred to as the “Purchased
Assets”).

 
 

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1.2           Excluded Assets.  The Purchased Assets shall not include, and the
Seller shall retain, the following assets:

 
(a)
Cash and cash equivalents;

 
(b)
All trade and other accounts receivable;

 
(c)
The Seller's rights under this Agreement;

 
(d)
The Seller's minute books, stock record books and corporate franchise and tax
returns.

 
(e)
Assets described on Schedule 1.2(e) attached hereto.

1.3           Closing.  The closing ("Closing" or “Closing Date”) of the
purchase and sale of the Purchased Assets shall take place at 10:00 a.m., on the
10th day of May, 2012, at the offices of Jordan & Mahoney, Attorneys, at 615
Story Street, Boone, Iowa, or at such other time, date, and place as may be
mutually agreed to by the parties.

 
 

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ARTICLE II

CONSIDERATION FOR TRANSFER

2.1           Purchase Price.  The Purchase Price (“Purchase Price”) for the
Purchased Assets shall consist of five thousand shares (5,000) of the common
stock of Art’s – Way Manufacturing Co., Inc. (“Stock Portion”) and the sum of
Three Million One Hundred Fifty Thousand Dollars ($3,150,000.00) (“Cash
Portion”), provided, however, said Cash Portion of the Purchase Price shall be
adjusted at Closing by reducing the same by the sum of the following amounts:

(a)           The amount of all customer deposits with respect to merchandise
not actually delivered to customers priorto the date of Closing.

(b)           The amount by which the value of inventories transferred at
Closing shall be less than One Million Twenty-One Thousand Five Hundred
Ninety-Six And 43/100 Dollars ($1,021,596.43).  For purposes of this
sub-paragraph, that portion of the inventories that shall be raw materials
inventory and purchased inventory shall be determined by an actual physical
count inventory and each of such items shall be valued at the actual acquisition
cost of same without addition of freight or any allocation under Internal
Revenue Code Section 253A, or other cost or addition whatsoever excepting only a
mark-up of six percent (6%) from the cost determined as herein set forth for
labor and freight.  Any item of such raw materials inventory or purchased
inventory that is not new, that is damaged, that is  used, or is in excess of a
one-year supply (based upon the previous one year’s sales usage) shall be valued
at -0-.  For purposes of this sub-paragraph that portion of such inventories
that are finished goods inventory (other than purchased finished goods) and work
in process inventory shall be valued at the cost of materials used in the
production of such inventory plus a mark-up thereon of six percent (6%) for
labor and freight, provided, however, that any such finished goods inventory
(other than purchased finished goods) or work in process inventory that is not
new, that is damaged, or that is not usable on a product or a particular model
of a product that is currently offered for sale by Seller or is in excess of a
one year’s supply shall be valued at -0-.  When valuing such finished goods
inventory (other than purchased finished goods) and work in process inventory,
no Internal Revenue Service Code Section 253A allocation shall be considered.

 
 

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2.2           Payment of the Purchase Price.  The Stock Portion of the Purchase
Price shall be paid by the delivery at the Closing of Certificates for five
thousand (5,000) shares of the common stock of the Art’s – Way Manufacturing,
Co., Inc. issued in the name of Seller.  Buyer recognizes that said shares are
unregistered shares and are restricted as to transfer for a period of at least
six months after issuance.  The Cash Portion of the Purchase Price shall be paid
at Closing  in the sum of Three Million One Hundred Fifty Thousand Dollars
($3,150,000.00) (less any adjustment provided in the foregoing sub-paragraph 2.1
less any other credits, prorations and adjustments otherwise provided for in
this agreement, by wire transfer or other immediately available funds to such
account as may be designated by Seller.
 
2.3           Purchase Price Allocation.  The parties agree that the Purchase
Price provided for herein shall be allocated among the assets transferred as set
forth in Schedule 2.3.The parties agree to report and allocate, for all federal,
state and local tax purposes (including IRS Form 8594), the Purchase Price as so
allocated and will not take any inconsistent or contrary position therewith for
any other purpose.

 
 

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2.4           Prorations.  If obtainable, final readings shall be obtained for
utility services, such as gas, electricity, water, and sewer.  If a final
reading is not obtained for any utility service, the charges on any bill
therefor, covering a period including the Closing Date, shall be prorated on a
daily basis when such bill is received, and Buyer shall not be responsible for
any such utility services attributable to any period up to and including the
Closing date.  Seller shall take such actions as may be necessary to prevent
such utility providers from disrupting or refusing service to Buyer for periods
after Closing on account of any defaults or failures to pay by Seller for said
services attributable to periods prior to closing.

ARTICLE III

LIABILITIES

3.1           Non-Assumption of Liabilities.  The Buyer shall not assume, pay,
perform, discharge, or accept any liabilities, debts or obligations of the
Seller of any kind whatsoever, whether actual, contingent, accrued, known or
unknown (including any liability for personal injury or property damage with
respect to products sold by the Seller or any predecessor of the Seller), taxes,
employee compensation, pension, profit-sharing, vacation, health insurance,
disability insurance or other employee benefit plans and programs, worker's
compensation, breach or negligent performance of any contract, or breach of
warranty relating thereto, liabilities resulting from breach of contract, torts,
illegal activity, unlawful employment or business practice or any other
liability or obligation whatsoever.  All such non-assumed liabilities, debts,
and obligations shall remain the responsibility of the Seller and shall be paid
and discharged by Seller as the same shall come due or at such earlier time as
may be provided for herein.  Seller shall discharge or pay off all leases,
including the buyout amount to vest title in Buyer free and discharged of such
leases, excepting only the lease to Banker’s Leasing Company covering a Sharp
MX2600 System with accessories, which lease Buyer shall assume.

 
 

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3.2           Labor Relations:  Pension Plan.  The Buyer shall not assume,
honor, or accept any collective bargaining agreement relating to the Seller's
employees, or any employee pension benefit plan of the Seller.  The Seller shall
be solely responsible for satisfying all obligations (whether arising under
federal, state or local law, or pursuant to contract) which may arise or which
may have arisen, prior to the Closing, in connection with the employment of the
Seller's employees, the creation, funding or operation of any employee benefit
plan, or which may arise in connection with the transactions described in this
Agreement.

3.3           Seller’s Accounts Receivable.  Not withstanding any other
provision of this Agreement, Buyer agrees that following Closing, Buyer shall
cooperate with Seller in the collection of outstanding accounts receivable owed
to Seller.  In the event any of Seller’s account receivables are paid to Buyer,
Buyer shall immediately remit Buyer’s account receivables to Seller.

3.4           Product Warranty.  Seller’s shall remain liable with regard
warranty obligations on all products sold or shipped by Seller prior to the
closing of this transaction said liability to be in accordance with the
respective warranties made on such products including those obligations set
forth in that certain warranty agreement made with Agco Incorporated dated
February 16, 2006.  All such claims shall be reviewed by Seller.  Buyer agrees
to process all warranty claims, including recall claims, that may be made with
respect to products sold by Seller prior to closing and take such action with
respect to such claims as is appropriate to satisfy same.  Seller shall on
demand make payment to Buyer of all costs incurred by Buyer with respect to the
satisfaction of such claims.  The foregoing not withstanding Seller’s
obligations hereunder shall extend only to claims or obligations made to Buyer
or with respect to which Buyer receive notice within two years of the date of
this agreement.

 
 

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLER AND
SELLER SHAREHOLDERS

In order to induce the Buyer to enter into this Agreement, the Seller and
Seller’s Shareholders jointly and severally make the representations and
warranties set forth in this Article IV, to the Buyer, each of which shall be
deemed to be independently material and relied upon by the Buyer, regardless of
any investigation made by, or information known to, the Buyer.

4.1           Organization of Seller.  Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Arkansas
and has been duly authorized to do business in the state of Iowa and in each
state in which it is presently doing business.

4.2           Authority.  Seller has taken all necessary corporate action to
approve this Agreement and the transactions contemplated by this agreement.
Seller has full corporate authority to enter into this Agreement.  This
Agreement and all agreements and documents contemplated by this agreement have
been duly executed and delivered by Seller and constitute a legal, valid, and
binding obligations of Seller enforceable in accordance with their terms.

 
 

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4.3           No Defaults or Consents.  Neither the execution and delivery of
this Agreement or of any document executed and delivered at the Closing of the
transaction called for by this Agreement will:

(a)           Conflict with, result in a breach of the terms of, or constitute a
default under the Certificate of Incorporation or By-laws of Seller or any
judicial, administrative, or arbitration order, judgment, award or decree (Court
Order) to which Seller is a party or with respect to which any of the Purchased
Assets are subject, or by which the Seller is bound; or,

(b)           Require the approval, consent, authorization, or act of, or the
making by the Seller of any declaration, filing, or registration with, any
individual corporation, partnership, joint venture, limited liability company,
governmental body, or any other legal entity; or,

(c)           Violate any legal requirements applicable to Seller; or,

(d)           Violate, conflict with, or result in the breach of or constitute
default under (whether with or without notice or the lapse of time or both) or
accelerate or prevent the acceleration of performance required by, or giving any
other party the right to terminate any contract or permit applicable to Seller;
or,

(e)           Result in the creation of any lien, charge, or encumbrance on any
of the Purchased Assets

4.4           Title to Purchased Assets.  Seller owns, and shall at Closing
assign, transfer, and convey to Buyer, free and clear of all liens, liabilities,
mortgages, pledges, adverse claims, encumbrances, or other restrictions or
limitation whatsoever (i) legal and beneficial ownership of all of the Purchased
Assets (other than the Real Property) and (ii) good and marketable title to the
Real Property in accordance with this Agreement, Iowa law and the Standards of
the Iowa State Bar Association.  Buyer acknowledges that the proceeds of the
sale of the Purchased Assets may be used for the purpose of clearing all liens,
liability, mortgages, pledges, adverse claims, encumbrances or other
restrictions or limitation set forth in this Section 4.4.

 
 

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4.5           Status of Contracts.  Seller is a party to no contracts respecting
Seller’s Business  excepting only those contracts listed on the attached
Schedule 4.5, which  is by reference incorporated herein, and as to such
contracts, Seller at Closing shall assign all of Seller's rights under said
contracts to Buyer; that no default presently exists or will upon the date of
Closing exist with respect to Seller's obligations under said contracts; and
upon assignment of such contracts by Seller to Buyer (or Buyer's designee), the
same shall be fully enforceable by Buyer or Buyer's designee, as the case may
be, in accordance with their terms.

4.6           Litigation. Except as set forth in Schedule 4.6, there are no
lawsuits, claims, proceedings or investigations pending or, to the knowledge of
Seller, threatened against or affecting Seller regarding the Purchased Assets,
or the legality or propriety of the transactions contemplated by this Agreement
and Seller has not asserted any claim against any insurer in connection with the
Seller’s Business.

4.7           Broker. Seller warrants that no broker has been engaged by Seller
with respect to this transaction except for The Business Brokers, Inc., and
Seller shall be solely responsible for all costs or fees charged by such Broker
with respect to the transaction called for in this Agreement.

4.8           Absence of Certain Changes. Since January 1, 2011, the Seller’s
Business has been conducted in the ordinary course of business consistent with
past practice and there has not been:

 
 

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(a)           any event, occurrence or development of a state of circumstances
or facts which has had or reasonably could be expected to have, individually or
in the aggregate, a material adverse effect on the condition (financial or
otherwise), business, assets, results of operations or prospects of the Seller’s
Business; has not been any change in purchases of Seller’s products nor does
Seller have any knowledge of any intent by any customer to materially reduce or
decrease orders from Seller;

(b)           any amendment of any material agreement with any supplier, vendor,
or customer in connection with the Seller’s Business;

(c)           to the knowledge of Seller, any creation or assumption by Seller
of any lien or other encumbrance on any Purchased Asset;

(d)           any making of any loan, advance or capital contributions to any
person in connection with the Seller’s Business other than loans or advances
made in the ordinary course of business consistent with past practices;

(e)           any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the Purchased Assets which, individually or in
the aggregate, has had or would reasonably be expected to have a material
adverse effect on the Seller’s Business; or

(f)           any transaction or commitment made, or any contract or agreement
entered into, by Seller relating to the Purchased Assets (including the
acquisition or disposition of assets) or any relinquishment by Seller of any
contract or other right, other than transactions and commitments in the ordinary
course of business consistent with past practice and as contemplated by this
Agreement.

 
 

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4.9           Compliance with Laws.  Seller  is and has been in compliance in
all respects with any and all legal requirements applicable to the Seller’s
Business, other than failures to so comply that will have no adverse effect on
the Seller’s Business or the Purchased Assets.  Seller has not received nor
entered into any citations, complaints, consent orders, compliance schedules, or
similar enforcement orders or received any written notice from any governmental
authority or any other written notice that would indicate that there is not
currently compliance with all such legal requirements, except where failure to
so comply  would not have an adverse affect on the Seller’s Business or the
Purchased Assets.

4.10           Condition of Purchased Assets.  All machinery, equipment,
fixtures, tooling, inventory, and motor vehicles included as  part of the
Purchased Assets are in all material respects in good operating condition and
repair, adequate for purpose for which said Purchased Assets are presently used
or contemplated to be used, and to the best of Seller's knowledge the Purchased
Assets conform to all applicable ordinances, regulations, codes or laws,
federal, state or local, affecting same.

4.11           Environmental Matters.

(a)           With respect to the Seller’s Business and the Purchased Assets,
Seller  has complied in all material respects with the provisions of all
federal, state and local environmental, health and safety laws, codes and
ordinances and all rules and regulations promulgated thereunder.

 
 

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(b)           Seller has received no notice of and neither knows or suspects any
facts which might constitute violation of any federal, state or local
environmental, health or safety laws, codes or ordinances and any rules and
regulations promulgated thereunder which relate to Seller’s Business or the use,
ownership and occupancy of any real property used by Seller in the operation of
Seller’s Business.

(c)           Except in accordance with a valid governmental permit, license,
certificate, or approval, there has been no emission, spill, release, or
discharge of any toxic or hazardous substance or waste in the operation of the
Seller’s Business into or upon (i) the air, (ii) soils or any improvements
located thereon, (iii) surface or ground water, or (iv) the sewer septic system
or waste treatment, storage or disposal system servicing any real property used
in the Seller’s Business or that are a part of the Purchased Assets.

(d)           There are no underground storage tanks of any  kind located upon
any of the property used by Seller in the operation of its Seller’s Business nor
does Seller have any knowledge that any such underground storage tanks have ever
been located upon such property..

4.12           Financial Information.   All financial or other information
heretofore furnished by  Seller to Buyer, including without limitation, the
copies of 2008, 2009, 2010 Federal Income Tax Returns for Seller, and Excel
Spreadsheet entitled “UHC Income Statement Analysis V-2” is true, accurate, and
correct in all materials respects and accurately represents the properties and
operation of Seller’s Business for the periods indicated.

4.13           Employment Benefit Matters:

(a)           Seller is a party to no collective bargaining agreements with any
of its employees.

 
 

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(b)           Irrespective of whether the Buyer employs or continues to employ
any present employee or group of employees of Seller, Buyer shall have no
obligation or liability of any kind or nature arising out of any pension plan,
profit sharing plan, stock option plan, bonus plan or arrangement, incentive
award plan or arrangement, vacation policy, severance pay policy or agreement,
deferred compensation agreement or arrangement, executive compensation or
supplemental income arrangement, or other employee benefit plans or arrangements
of any kind or nature maintained or sponsored by Seller.

4.14           Location of Assets.  All assets and properties that constitute a
part of the Purchased Assets are located at Sellers facility at 101 Dayton
Avenue, Ames, Iowa 50010.

4.15           Patents and Copyrights.  No Patents or patent applications are
applicable  to any product manufactured or sold by Seller except as shown on
Schedule 4.15.

4.16           Licenses and Permits.  No licenses or permits are required for
the operation of Seller’s Business or use or ownership of any of the Purchased
Assets except as shown on Schedule 4.16.

ARTICLE V

REPRESENTATIONS OF THE BUYER

In order to induce the Seller to enter into this Agreement, the Buyer makes the
following representations and warranties to the Seller, each of which shall be
deemed to be independently material and relied upon by the Seller, regardless of
any investigation made by, or information known to, the Seller.

 
 

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5.1           Organization.  The Buyer is a corporation duly organized and
validly existing under the laws of the State of Iowa.

5.2           Authorization.  The Buyer has all necessary power and authority to
enter into and perform the transactions contemplated herein in accordance with
the terms and conditions hereof.  The execution and delivery of this Agreement,
and the performance by the Buyer of its obligations contained herein, have been
duly approved by the Buyer's members.

5.3           Brokerage.  The Buyer has not incurred, nor made commitment for,
any brokerage, finders, or similar fee in connection with the transactions
contemplated by this Agreement.

5.4           Litigation.  There is no litigation, proceeding, or governmental
investigation pending, or to the Buyer's knowledge, threatened against Buyer or
relating to the transactions contemplated herein.

ARTICLE VI

COVENANTS OF THE SELLER

The Seller and Seller’s Shareholders covenants and agrees with the Buyer as
follows:

6.1           Access.  From the date hereof and until the Closing Date, the
Buyer and its authorized officers, agents and representatives shall have
reasonable access during normal business hours to all properties, books,
records, contracts, tax returns and documents of the Seller; provided, however,
the access requested shall not be unreasonable.  If the transactions provided
for in this Agreement are not consummated, the Buyer and its respective
officers, agents and representatives will hold in confidence all information
obtained from the Seller, any of its officers, agents or representatives,
excepting however, any such information which (i) was or is in the public
domain, (ii) was in fact known to the Buyer prior to disclosure to the Buyer by
the Seller, or (iii) is disclosed to the Buyer by a third party other than any
employee or former employee of the Seller subsequent to disclosure by the
Seller.

 
 

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6.2           Conduct Pending Closing.  From the date hereof and until the
Closing Date, without the express prior written consent of the Buyer, the Seller
shall not sell or dispose of any asset which is or would otherwise become a
Purchased Asset, except sales of inventory in the ordinary and usual course of
business.

6.3           Insurance and Maintenance of Property.  From the date hereof and
until the Closing Date, the Seller shall cause all property owned or leased by
it to be insured against all ordinary insurable risks, and shall preserve its
property to the best of its ability.

6.4           Compliance with Laws.  From the date hereof and until the Closing
Date, the Seller shall comply with all applicable laws, statutes, ordinances,
rules, regulations, guidelines, orders, arbitration awards, judgments and
decrees applicable to, or binding upon, the Seller or its business or
properties.

6.5           Fulfill Conditions.  The Seller shall use its best efforts to
cause to be fulfilled on or prior to the Closing each of the conditions set
forth in Article VIII hereof.

6.6           Employees.  The Seller shall terminate the employment of all of
its employees as of the Closing Date.  The Seller authorizes the Buyer to hire,
on or after the Closing Date, such employees of the Seller employed on the date
of execution of this Agreement as the Buyer may determine.  In the event Buyer
should hire any employee of Seller, for purposes of Buyer’s vacation policy or
other benefits, if any, offered to Buyer’s employees based on seniority, such
employee’s length of service with Buyer shall include such employee’s length of
service with Seller.

 
 

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6.7           Documents of Transfer.  On the Closing Date, the Seller shall
execute and deliver to the Buyer such Bills of Sale, General Warranty Deeds,
assignments, certificates, titles, or other documents as my be reasonably
required to vest in Buyer full and complete title to the Purchased Assets in
form reasonably acceptable to Buyer.

6.8           Taxes.  Seller shall pay at or prior to Closing all ad valorem
taxes and assessments levied by any taxing authority with respect to any of the
purchased assets that are attributable to any period prior to Closing regardless
of whether such taxes are required to be paid at, or prior to or subsequent to
Closing.  Ad valorem taxes levied upon any of the Purchased Assets for the year
2012 shall be pro-rated based upon the date of Closing.  At closing Seller shall
be responsible for and pay any transfer taxes imposed by the State of Iowa or
any governmental authority upon the transfer of real property called for herein.

6.9           Covenant Not To Compete.  For a period of five (5) years after the
Closing date, neither Seller or Seller’s Shareholders shall (except as an
employee of Buyer) engage in the business of manufacturing and/or selling
harvester reels or other equipment of a kind and type heretofore sold in
Seller’s Business.  During the non-compete term, Seller will not utilize
confidential processes acquired by Buyer as a part of the Purchased Assets in
competition with Buyer.  This non-competition agreement shall apply to any
manufacturing, sales, or marketing activity of Seller during the non-compete
term anywhere within the United States of America.

6.10           Confidentiality.  From and after the Closing, Seller shall, and
shall cause its directors, officers, employees, agents, and representatives, to
hold in strict confidence and, except as is required by applicable law, not
disclose to others or use for any reason whatsoever without the prior written
consent of Buyer (i) any information or data with respect to the operation of
Seller’s Business prior to Closing.

 
 

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6.11           Specific Performance Injunctive Relief.  Each of the parties
hereto acknowledge and understand that any breach or threatened breach of the
foregoing sections 6.9 and 6.10, will cause irreparable damage to the
non-breaching party and its respective affiliates and that money damages would
not provide an adequate remedy for such breach or threatened
breach.  Accordingly, in the event of any breach or threatened breach, the
non-breaching party or its affiliates shall have the right to seek specific
enforcement of the foregoing sections 6.9 and 6.10, to seek injunctive relief
and to seek any other equitable or legal remedies available to it in a court of
competent jurisdiction.

6.12           Abstract of Title.  Seller, at Seller's expense, shall promptly
obtain an abstract of title to the Real Property continued through a date not
earlier than thirty (30) days prior to the date of this Agreement, and deliver
it to Buyer's attorney for examination.  The abstract of title shall show
merchantable title in Seller in conformity with this Agreement, Iowa law, and
Title Standards of the Iowa State Bar Association.  The abstract of title shall
become the property of Buyer at the time of the Closing.  Seller shall pay the
costs of any additional abstracting and title work due to any act or omission of
Seller.

6.13           Change of Name.  At the Closing, Seller shall deliver to Buyer
for filing by Buyer in the office of the Iowa Secretary of State articles of
amendment pursuant to which Seller amends its articles of incorporation to
change its name to a name that does not include the words “Universal” or
“Harvester”.

6.14           Representations as to Investor Status.  At closing Seller shall
deliver to Buyer, executed by Buyer a Representation of Investor Status in the
form contained in Schedule 6.14.

 
 

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ARTICLE VII

COVENANTS OF THE BUYER

The Buyer covenants and agrees with the Seller as follows:

7.1           Certified Resolutions.  On the Closing Date, the Buyer shall
deliver to the Seller a copy of the resolutions of the Buyer's Board of
Directors authorizing and approving the execution of this Agreement and the
performance by the Buyer of the transactions contemplated hereby, certified by
the secretary or the president of the Buyer.

ARTICLE VIII

CONDITIONS TO BUYER'S OBLIGATION TO CLOSE

The obligation of the Buyer to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction and fulfillment, prior to and on
the Closing Date, of the following express conditions precedent:

8.1           Employment.  Seller’s Shareholders shall each execute and deliver
at Closing Employment Agreements identical to those attached as Schedule 8.1.

8.2           Representations and Warranties.  The representations and
warranties in this Agreement made by the Seller shall be true and correct in all
respects as of and at the Closing Date with the same force and effect as though
said representations and warranties had been again made on the Closing Date, and
the Buyer shall have been furnished a certificate signed by the Seller to that
effect.

 
 

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8.3           Performance of Covenants and Obligations.  The Seller shall have
performed and complied with all of its covenants and obligations under this
Agreement which are to be performed or complied with by it prior to or on the
Closing Date, and the Buyer shall have been furnished a certificate signed by
the Seller to that effect.

8.4           Proceedings and Instruments Satisfactory.  All proceedings,
corporate or otherwise to be taken in connection with the transactions
contemplated by this Agreement, and all documents incident thereto, shall be
satisfactory in form and substance to the Buyer; and, the Seller shall have made
available to the Buyer for examination the originals or true and correct copies
of all documents which the Buyer reasonably may request in connection with the
transaction contemplated by this Agreement.

8.5           Adverse Change.  From and after the date of this Agreement and
until the Closing Date, the Buyer (in its sole and absolute discretion) shall
have determined that there has been no material adverse change in the Purchased
Assets nor shall there have been any material casualty to the Purchased Assets,
in an amount exceeding $10,000, as a result of any loss, taking, destruction or
physical damage, whether or not covered by insurance, occasioned by fire, flood,
explosion, earthquake, act of God or the public enemy, or otherwise.

8.6           Consents, Approvals, Certifications, Licenses, and Permits.  All
necessary consents, approvals, certifications, licenses, and permits with
respect to the transaction contemplated hereby, the absence of which would have
a material and adverse effect on the Buyer's rights under this Agreement, or
which would constitute a breach pursuant to the provision of, or which would
result in the termination or loss of any right under, any contract, agreement,
instrument, documents, lease, license, certification, permit, indenture or other
obligation, or without which the Buyer would be precluded or materially impeded
from conducting its business or obtaining the benefit of the Purchased Assets,
shall have been received by the Buyer on or before the Closing Date.

 
 

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8.7           Due Diligence. The Buyer shall have conducted a due diligence
investigation and review of the Purchased Assets and all matters pertaining
thereto that the Buyer deems relevant and the results of such investigation and
review shall be satisfactory to the Buyer in its sole discretion.  At any time
within the due diligence period from the date of this Agreement up to the day
and time of Closing, Buyer shall have the right to terminate this Agreement for
any reason or no reason and upon notice to Seller of such termination, Buyer
shall have no further obligation under this Agreement.
 
 
8.8           Purchase Price
Allocation:                                                                That
the parties have agreed to an allocation of Purchase Price as provided in
Paragraph 2.3.

8.9           Financing
Contingency:                                           The Buyer must be able to
obtain a loan commitment on or before Closing, for a loan in the principal
amount of $3,145,000.00 for a term of 5 years, at an interest rate not to exceed
the prevailing prime rate. Buyer agrees to use its best efforts to secure such
commitment. Buyer shall be responsible for all costs with respect to any loan
obtained by Buyer. In the event Buyer fails to provide Seller with written
evidence of the loan commitment within five days after receipt of a written
request from Seller (but such request may not be made before the loan commitment
date listed above), then Seller may terminate this contract unless Buyer waives
the loan commitment condition.

8.10           Approval by Board of
Directors:                                                      The execution of
this agreement and and the Closing of the transaction provided for herein shall
have been duly approved and authorized by the Board of Directors of Buyer.

 
 

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ARTICLE IX

CONDITIONS TO SELLER'S OBLIGATION TO CLOSE

The obligation of the Seller to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction and fulfillment, prior to and on
the Closing Date, of the following express conditions precedent:

9.1           Representations and Warranties.  The representations and
warranties in this Agreement made by the Buyer shall be true and correct in all
respects as of and at the Closing Date with the same force and effect as though
said representations and warranties had been again made on the Closing Date, and
the Seller shall have been furnished a certificate signed by the Buyer to that
effect.

9.2           Performance of Covenants and Obligations.  The Buyer shall have
performed and complied with all of its covenants and obligations under this
Agreement which are to be performed or complied with by it prior to or on the
Closing Date, and the Seller shall have been furnished a certificate signed by
the Buyer to that effect.

9.3           Authorization By Seller.  The execution of this Agreement and of
all actions taken or documents executed by Seller in the Closing of the
transaction provided for herein shall have been duly approved by the
Shareholders and Directors of Selle

ARTICLE X

INDEMNIFICATION

10.1          Buyer Indemnification. Buyer will defend,  indemnify and hold
harmless, Seller, its parents, subsidiaries and affiliates and their officers,
directors, employees, agents and representatives against all liabilities, costs,
damages or other charges (including court costs, expenses and reasonable
attorneys’ fees) resulting from, arising from or related to:

 
 

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(i)          any breach by Buyer of this Agreement;

(ii)          any failure by Buyer to perform any of its obligations in this
Agreement or any Agreement or undertaking delivered by Buyer pursuant to this
agreement or the Closing of the transactions provided for herein;

(iii)    any breach of any warranty or the inaccuracy of any representation of
Buyer in this Agreement or in any certificate delivered by Buyer; or

(iv)    any claims arising out of Buyer=s ownership, operation, possession, use
and/or control of the Purchased Assets and the Seller’s Business for all periods
of time after Closing or with respect to any sale made in the course of said
business after Closing.

10.2          Seller and Seller’s Shareholders Indemnification. Seller and
Seller’s Shareholders, jointly and severally, will defend and indemnify Buyer,
its parents, subsidiaries and affiliates and their officers, directors,
employees, agents and representatives against all losses, liabilities, costs,
damages or other charges (including court costs and reasonable attorneys’ fees)
resulting from, arising from or related to:

(i)           any breach by Seller of this Agreement; or

(ii)           any failure by Seller to perform any of its obligations in this
Agreement or any agreement or undertaking delivered by Seller pursuant to this
Agreement or the Closing of the transactions provided for herein; or

(iii)           any breach of any warranty or the inaccuracy of any
representation of Seller in this Agreement or in any certificate delivered by
Seller; or

 
 

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(iv)          any claims arising out of Seller’s ownership, operation,
possession, use and/or control of the Purchased Assets and the Seller’s Business
for all periods of time prior to Closing or with respect to any sale made in the
course of said business prior to Closing.

(v)           Any claim, loss, liability, damage, fine, expense, penalty,
assessment (including but not limited to, withdrawal of liability assessments,
funding deficiency assessments and PBGC liability assessments), judgment and
employee benefit claims (including any and all claims and fees relating to
proceedings established in such loss, liability, damage, fine, expense, penalty,
assessment, judgment, or employee benefit claim, and including attorney fees,
costs and expenses in enforcing this indemnity against Seller) with respect to
any employee benefit plan as such a term is described in Section (3) of ERISA
that was sponsored, maintained or contributed to at any time prior to the
Closing date by Seller, or by any corporation, trade, or business or entity
under common control with Seller within the meaning with Section 414(b),(c) or
(m) of the Code or Section 4001(b) of ERISA.

(vi)           Any claim, liability or obligation related to any obligations of
Seller not assumed by Buyer pursuant to the terms of this Agreement.
 
10.3           Notice of Claims. Any indemnified party seeking indemnification
must give prompt written notice (a AClaim Notice@) to the indemnifying party
describing in reasonable detail the facts giving rise to the claim for
indemnification and must include in the Claim Notice (if then known) the amount
or the method of computation of the amount of the claim, and a reference to the
provision of this Agreement, or any other agreement, upon which the claim is
based; provided, that a Claim Notice for any action as to which indemnification
will be sought must be given promptly after the action or suit is commenced.
Failure to give the notice will not relieve the indemnifying party of its
obligations except to the extent it has been prejudiced by the failure.

 
 

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10.4           Survival of Indemnities. These indemnities will survive the
Closing and any investigation made by the party seeking indemnity at any time.

ARTICLE XI

MISCELLANEOUS

11.1           Further Assurances.  Each party hereto from time to time
hereafter, and upon request, shall execute, acknowledge and deliver such other
instruments as reasonably may be required to more effectively transfer and vest
in the Buyer the Purchased Assets or to otherwise carry out the terms and
conditions of this Agreement.

11.2           Benefit and Assignment.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto, their heirs, successors, assignees,
and beneficiaries in interest; provided, however, that this Agreement may not be
assigned by the Seller.

11.3           Governing Law.  This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Iowa (regardless of such
State's conflict of laws principles), and without reference to any rules of
construction regarding the party responsible for the drafting hereof.

11.4           Expenses.  Except as otherwise herein provided, all expenses
incurred in connection with this Agreement or the transactions herein provided
for shall be paid by the party incurring such expenses and costs.

 
 

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11.5           Notices.  Any and all notices, demands, and communications
provided for herein or made hereunder shall be given in writing and shall be
deemed given to a party at the earlier of (i) when actually delivered to such
party, (ii) when facsimile transmitted to such party to the facsimile number
indicated for such party below (or to such other facsimile number for a party as
such party may have substituted by notice pursuant to this Section) or (iii)
when mailed to such party by registered or certified U.S. Mail (return receipt
requested) or sent by overnight courier, confirmed receipt, and addressed to
such party at the address designated below for such party (or to such other
address for such party as such party may have substituted by notice pursuant to
this Section):

(a)           If to the Buyer:                      Art’s-Way Manufacturing Co.,
Inc.
Attention: Carrie Majeski
 PO Box 288
 Armstrong, Iowa 50514
 Phone: (712) 864-3131
 Facsimile: (712) 864-3393

With a copy to:                    Everette L. Wooten, Jr.
Wooten & Coley
P. O. Box 1555
Kinston, NC  28503-1555
Phone:  (252) 523-8000
Facsimile: (252) 523-2060

(b)           If to the Seller:                      Universal Harvester Co.,
Inc.
Attention: Ardis A. Heidebrink
 
 
 

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With a copy to:                    Michael F. Mahoney
Jordan & Mahoney Law Firm, P.C.
615 Story Street
Boone, Iowa  50036
Phone: (515) 432-4510
Facsimile:  (515) 432-2426
 
11.6           Counterparts.  This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument, provided that all
such counterparts, in the aggregate, shall contain the signatures of all parties
hereto.

11.7           Headings.  All Section headings herein are inserted for
convenience only and shall not modify or affect the construction or
interpretation of any provision of this Agreement.

11.8           Amendment, Modification, and Waiver.  This Agreement may not be
modified, amended, or supplemented except by mutual written agreement of all the
parties hereto.  Any party may waive in writing any term or condition contained
in this Agreement and intended to be for its benefit; provided, however, that no
waiver by any party, whether by conduct or otherwise, in any one or more
instances, shall be deemed or construed as a further or continuing waiver of any
such term or condition.  Each amendment, modification, supplement, or waiver
shall be in writing signed by the party or the parties to be charged.

 
 

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11.9           Entire Agreement.  This Agreement, the Exhibits and Schedules
attached hereto represent the full and complete agreement of the parties with
respect to the subject matter hereof and supersede and replace any prior
understandings and agreements among the parties with respect to the subject
matter hereof and no provision or document of any kind shall be included in or
form a part of such agreement unless signed and delivered to the other party by
the parties to be charged.

11.10           Third-Party Beneficiaries.  No third parties are intended to
benefit from this Agreement, and no third-party beneficiary rights shall be
implied from anything contained in this Agreement.

11.11           Survival:  Any provisions of this Agreement which contemplates
performance or the existence of obligations after the Closing date, and any and
all representations and warranties set forth in this Agreement, shall not be
deemed to be merged into or waived by the execution and delivery of the
instruments executed at the Closing, but shall expressly survive Closing and
shall be binding upon the party or parties obligated thereby in accordance with
the terms of this Agreement.

(Signatures Appear on the Following Pages)

 
 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date and year first above written.
 
BUYER:

ART’S-WAY MANUFACTURING CO., INC.

By:           ___/s/ J Ward McConnell_Jr.
J. Ward McConnell, Jr.
Chairman of the Board

SELLER:

UNIVERSAL HARVESTER CO., INC.
 
By:___/s/ Ardis A. Heidibrink__
ARDIS A. HEIDEBRINK,  President

SELLERS SHAREHOLDERS:

____/s/ Ardis A. Heidibrink (SEAL)
ARDIS A. HEIDEBRINK

___/s/ F. Murray Buchheit_(SEAL)
F. MURRAY BUCHHEIT

 
 

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COMPUTATION OF PURCHASE PRICE
CLOSING OF PURCHASE FROM
UNIVERSAL HARVESTER CO., INC.,
BY
ART’S-WAY ACQUISITION, INC.,
CLOSING – MAY 10, 2012

The parties agree that this cash portion of the purchase price provided for in
Section 2.1 of the Asset Purchase Agreement is as follows:
 
Cash Purchase Price per 2.1
        $ 3,150,000.00  
Reduction for customer deposits
          (0 )
Reduction for inventory value
  $ 1,021,596.43          
Actual
  $ 902,588.00     $ (119,008.40 )                  
Other adjustments:
               
Real estate tax
          $ (27,427.50 )               (0 )               (0 )
Total
          $ 3,003,356.46  

 
 
Art’s-Way Acquisition, Inc.
 
By:           /s/ J Ward McConnell Jr.
J. Ward McConnell, Jr., President

Universal Harvester Co., Inc.
 
By:           /s/ Ardis A.  Heidebrink
Ardis A.  Heidebrink, President