Exhibit 10.5

AGREEMENT TO PROVIDE INSURANCE

Borrower:
 
ART’S-WAY MANUFACTURING COMPANY, INC.
Lender:
 
WEST BANK
   
(TIN:  _________________)
 
 
MAIN BANK 
   
5556 HIGHWAY 9 WEST, BOX 288
 
 
1601 22ND STREET 
   
ARMSTRONG, IA 50514
 
 
WEST DES MOINES, IA 50266 
   
 
    
(515) 222-2300 

 

--------------------------------------------------------------------------------

 
INSURANCE REQUIREMENTS.  Grantor, ART’S-WAY MANUFACTURING COMPANY, INC.
(“Grantor”), understands that insurance coverage is required in connection with
the extending of a loan or the providing of other financial accommodations to
Grantor by Lender.  These requirements are set forth in the security documents
for the loan.  The following minimum insurance coverages must be provided on the
following described collateral (the “Collateral”):

Collateral:
 
All Inventory and Equipment.
   
Type:  All risks, including fire, theft and liability.
   
Amount:  Loan Amount.
   
Basis:  Replacement value.
   
Endorsements:  Lender loss payable clause with stipulation that coverage will
not be cancelled or diminished without a minimum of 30 days prior written notice
to Lender.
   
Latest Delivery Date:  By the loan closing date.
     
Collateral:
 
5555 HIGHWAY 9 WEST, ARMSTRONG, IA 50514.
   
Type:  Fire and extended coverage,
   
Amount:  Loan Amount.
   
Basis:  Replacement value.
   
Endorsements:  Standard mortgagee’s clause with stipulation that coverage will
not be cancelled or diminished without a minimum of 30 days prior written notice
to Lender, and without disclaimer of the insurer’s liability for failure to give
such notice.
   
Latest Delivery Date:  By the loan closing date.

INSURANCE COMPANY.  Grantor may obtain insurance from any insurance company
Grantor may choose that is reasonably acceptable to Lender.  Grantor understands
that credit may not be denied solely because insurance was not purchased through
Lender.

FLOOD INSURANCE.  Flood Insurance for the Collateral securing this loan is
described as follows:

 
 

--------------------------------------------------------------------------------

 

Real Estate at 5556 HIGHWAY 9 WEST, ARMSTRONG, IA 50514.
Should the Collateral at any time be deemed to be located in an area designated
by the Director of the Federal Emergency Management Agency as a special flood
hazard area.  Grantor agrees to obtain and maintain Federal Flood Insurance, if
available, for the full unpaid principal balance of the loan and any prior liens
on the property securing the loan, up to the maximum policy limits set under the
National Flood Insurance Program, or as otherwise required by Lender, and to
maintain such insurance for the term of the loan.  Flood insurance may be
purchased under the National Flood Insurance Program or from private insurers.

INSURANCE MAILING ADDRESS.  All documents and other materials relating to
insurance for this loan should be mailed, delivered or directed to the following
address:

WEST BANK
P.O. BOX 65020
WEST DES MOINES, IA 50265

FAILURE TO PROVIDE INSURANCE.  Grantor agrees to deliver to Lender, on the
latest delivery date stated above, proof of the required insurance as provided
above, with an effective date of June 8, 2009, or earlier.  Grantor acknowledges
and agrees that if Grantor fails to provide any required insurance or fails to
continue such insurance in force, Lender may do so at Grantor’s expense as
provided in the applicable security document.  The cost of any such insurance,
at the option of Lender, shall be added to the indebtedness as provided in the
security document.  GRANTOR ACKNOWLEDGES THAT IF LENDER SO PURCHASES ANY SUCH
INSURANCE, THE INSURANCE WILL PROVIDE LIMITED PROTECTION AGAINST PHYSICAL DAMAGE
TO THE COLLATERAL, UP TO AN AMOUNT EQUAL TO THE LESSER OF (1) THE UNPAID BALANCE
OF THE DEBT, EXCLUDING ANY UNEARNED FINANCE CHARGES, OR (2) THE VALUE OF THE
COLLATERAL; HOWEVER, GRANTOR’S EQUITY IN THE COLLATERAL MAY NOT BE INSURED.  IN
ADDITION, THE INSURANCE MAY NOT PROVIDE ANY PUBLIC LIABILITY OR PROPERTY DAMAGE
INDEMNIFICATION AND MAY NOT MEET THE REQUIREMENTS OF ANY FINANCIAL
RESPONSIBILITY LAWS.

AUTHORIZATION.  For purposes of insurance coverage on the Collateral, Grantor
authorizes Lender to provide to any person (including any insurance agent or
company) at information Lender deems appropriate, whether regarding the
Collateral, the loan or other financial accommodations, or both.

GRANTOR ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS AGREEMENT TO PROVIDE
INSURANCE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT.

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO PROVIDE
INSURANCE AND AGREES TO ITS TERMS.  THIS AGREEMENT IS DATED JUNE 8, 2009.
 
 
- 2 -

--------------------------------------------------------------------------------

 
 
GRANTOR:
 
ART’S-WAY MANUFACTURING COMPANY, INC.
   
By:
/s/ Carrie L. Majeski
 
CARRIE L. MAJESKI, PRESIDENT of ART’S-WAY
 
MANUFACTURING COMPANY, INC.

 

--------------------------------------------------------------------------------

FOR LENDER USE ONLY
 
DATE: __________
INSURANCE VERIFICATION
PHONE__________

AGENT’S NAME:   
 

AGENCY:   
 

ADDRESS:   
 

INSURANCE COMPANY:   
 

POLICY NUMBER:   
 

EFFECTIVE DATES:   
     

COMMENTS:   
 

--------------------------------------------------------------------------------

 
 
- 3 -

--------------------------------------------------------------------------------

 

AGREEMENT TO PROVIDE INSURANCE
(Continued)
 

--------------------------------------------------------------------------------

FOR LENDER USE ONLY
 
DATE: __________
INSURANCE VERIFICATION
PHONE__________

AGENT’S NAME:   
 

AGENCY:   
 

ADDRESS:   
 

INSURANCE COMPANY:   
 

POLICY NUMBER:   
 

EFFECTIVE DATES:   
     

COMMENTS:   
 

--------------------------------------------------------------------------------

 
- 4 -

--------------------------------------------------------------------------------