Prepared
By:  KEVIN J. SMITH, SENIOR VICE PRESIDENT, WEST DES MOINES STATE
BANK, 1601 22ND STREET, WEST DES MOINES, IA 50266, (515) 222-2300

    


    ADDRESS
TAX STATEMENT:  WEST DES MOINES STATE BANK, MAIN BANK,

    1601
22ND
STREET, WEST DES MOINES.  IA 50266

    


    RECORDATION
REQUESTED BY:

    WEST DES MOINES STATE BANK

    MAIN BANK

    1601 22ND STREET

    WEST DES MOINES, IA 50266

    


    WHEN
RECORDED MAIL TO:

    WEST DES MOINES STATE BANK

    MAIN BANK

    1601 22ND STREET

    WEST DES MOINES, IA 50266

    
      FOR
RECORDER’S USE ONLY

      
        
          

        

      

    

    


    MORTGAGE

    


    NOTICE:  This
Mortgage secures credit in the amount of $2,500,000.00.  Loans and
advances up to this amount, together with interest, are senior to indebtedness
to other creditors under subsequently recorded or filed mortgages and
liens.

    


    THIS
MORTGAGE dated April 25, 2003, is made and executed between ART’S-WAY
MANUFACTURING CO., INC., whose address is HWY 9 WEST, PO BOX 288, ARMSTRONG, IA
50514-0288 (referred to below as “Grantor”) and WEST DES MOINES STATE BANK,
whose address is 1601 22ND STREET, WEST DES MOINES, IA 50266 (referred to below
as “Lender”).

    


    GRANT OF
MORTGAGE.  For valuable consideration, Grantor mortgages arid
conveys to Order and grants in Lender a security interest in all of Grantor’s
right, title, and interest in and to the following described real property,
together with all existing or subsequently erected or affixed buildings,
improvements and fixtures; rents and profits; all easements, rights of way, and
appurtenances; all water, water rights, watercourses and ditch rights (including
stock in utilities with ditch or irrigation rights); and all other rights,
royalties, and profits relating to the real property, including without
limitation all minerals, oil, gas, geothermal and similar matters, (the “Real
Property”) located in EMMET County, State of Iowa:

    


    See
EXHIBIT “A”, which is attached to this Mortgage and made a part of this Mortgage
as if fully set forth herein.

    


    The Real
Property or its address is commonly known as HWY 9 WEST, ARMSTRONG, IA
50514-0288.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Grantor
presently assigns to Lender all of Grantor’s right, title, and interest in and
to all present and future leases of the Property and all Rents from the
Property.  In addition, Grantor grants to Lender a Uniform Commercial
Code security interest in the Personal Property and Rents.  The Ben on
the rents granted in this Mortgage shall be effective from the date of the
Mortgage and not just in the event of default.

    


    FUTURE ADVANCES.  In
addition to the Note, this Mortgage secures all future advances made by Lender
to Grantor whether or not the advances are made pursuant to a
commitment.  Specifically, without limitation, this Mortgage secures,
in addition to the amounts specified in the Note, all future amounts Lender in
its discretion may loan to Grantor, together with all interest thereon; however,
in no event shall such future advances (excluding interest) exceed in the
aggregate $1,500,000.00.

    


    THIS
MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE
RENTS AND PERSONAL PROPERTY, LS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS
AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED
DOCUMENTS, AND THIS MORTGAGE.  THIS MORTGAGE IS GIVEN AND ACCEPTED ON
THE FOLLOWING TERMS:

    


    PAYMENT AND
PERFORMANCE.  Except as otherwise provided in this Mortgage,
Grantor shall pay to Lender all amounts secured by this Mortgage as they become
due and shall strictly perform all of Grantor’s obligations under this
Mortgage.

    


    POSSESSION AND MAINTENANCE OF THE
PROPERTY.  Grantor agrees that Grantor’s possession and use of
the Property shall be governed by the following provisions:  None of
the collateral for the Indebtedness constitutes, and none of the funds
represented by the Indebtedness will be used to purchase:  (1)
Agricultural products or property used for an agricultural purpose as defined in
Iowa Code Section 535.13; (2) Agricultural land as defined in Iowa Code Section
9H1 (2) or 175.2 (1); or (3) Property used for an agricultural purpose as
defined in Iowa Code Section 570.A.1 (2).  Grantor represents and
warrants that:  (1) There are not now and will not be any wells
situated on the Property; (2) There are not now and will not be any solid waste
disposal sites on the Property; (3) There are not now and there will not be any
hazardous wastes on the Property; (4) There are not now and there will not be
any underground storage tanks on the Property.

    


    Possession and
Use.  Until the occurrence of an Event of Default, Grantor may
(1) remain in possession and control of the Property; (2) use, operate or manage
the Property; and (3) collect the Rents from the Property.

     

    Duty to
Maintain.  Grantor shall maintain the Property in tenantable
condition and promptly perform all repairs, replacements, and maintenance
necessary to preserve its value.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Compliance With Environmental
Laws.  Grantor represents and warrants to Lender
that:  (1) During the period of Grantor’s ownership of the Property,
there has been no use, generation, manufacture, storage, treatment, disposal,
release or threatened release of any Hazardous Substance by any person on,
under, about or from the Property; (2) Grantor has no knowledge of, or reason to
believe that there has been, except as previously disclosed to and acknowledged
by Lender in writing, (a) any breach or violation of any Environmental Laws, (b)
any use, generation, manufacture, storage, treatment, disposal, release or
threatened release of any Hazardous Substance on, under, about or from the
Property by any prior owners or occupants of the Property, or (c) any actual or
threatened litigation or claims of any kind by any person relating to such
matters; and (3) Except as previously disclosed to and acknowledged by Lender in
writing, (a) neither Grantor nor any tenant, contractor, agent or other
authorized user of the Property shall use, generate, manufacture, store, treat,
dispose of or release any Hazardous Substance on, under, about or from the
Property; and (lo) any such activity shall be conducted in compliance with all
applicable federal, state, and local laws, regulations and ordinances, including
without limitation all Environmental Laws, Grantor authorizes Lender and its
agents to enter upon the Property to make such inspections and tests, at
Grantor’s expense, as Lender may deem appropriate to determine compliance of the
Property with this section of the Mortgage.  Any inspections or tests
made by Lender shall be for Lender’s purposes only and shall not be construed to
create any responsibility or liability on the part of Lender to Grantor or to
any other person.  The representations and warranties contained herein
are based on Grantor’s due diligence in investigating the Property for Hazardous
Substances.  Grantor hereby (1) releases and waives any future claims
against Lender for indemnity or contribution in the event Grantor becomes liable
for cleanup or other costs under any such laws; and (2) agrees to indemnify,
defend, and hold harmless Lender against any and all claims, losses,
liabilities, damages, penalties, and expenses which Lender may directly or
indirectly sustain or suffer resulting from a breach of this section of the
Mortgage or as a consequence of any use, generation, manufacture, storage,
disposal, release or threatened release occurring prior to Grantor’s ownership
or interest in the Property, whether or not the same was or should have been
known to Grantor.  The provisions of this section of the Mortgage,
including the obligation to indemnify and defend, shall survive the payment of
the Indebtedness and the satisfaction and reconveyance of the lien of this
Mortgage and shall not be affected by Lender’s acquisition of any interest in
the Property, whether by foreclosure or otherwise.

     

    Nuisance,
Waste.  Grantor shall not cause, conduct or permit any nuisance
nor commit, permit, or suffer any stripping of or waste on or to the Property or
any portion of the Property.  Without limiting the generality of the
foregoing, Grantor will not remove, or grant to any other party the right to
remove, any timber, minerals (including oil and gas), coal,
clay.  scoria, soil, gravel or rock products without Lender’s prior
written consent.

     

    Removal of
Improvements.  Grantor shall not demolish or remove any
Improvements from the Real Property without Lender’s prior written
consent.  As a condition to the removal of any Improvements, Lender
may require Grantor to make arrangements satisfactory to Lender to replace such
Improvements with Improvements of at least equal value.

     

    Lender’s Right to
Enter.  Lender and Lender’s agents and representatives may
enter upon the Real Property at all reasonable times to attend to Lender’s
interests and to inspect the Real Property for purposes of Grantor’s compliance
with the terms and conditions of this Mortgage.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Compliance with Governmental
Requirements.  Grantor shall promptly comply with all laws,
ordinances, and regulations, now or hereafter in effect, of all governmental
authorities applicable to the use or occupancy of the Property, including
without limitation, the Americans With Disabilities Act.  Grantor may
contest in good faith any such law, ordinance, or regulation and withhold
compliance during any proceeding, including appropriate appeals, so long as
Grantor has notified Lender in writing prior to doing so and so long as, in
Lender’s sole opinion, Lender’s interests in the Property are not
jeopardized.  Lender may require Grantor to post adequate security or
a surety bond.  reasonably satisfactory to Lender, to protect Lender’s
interest.

     

    Duty to
Protect.  Grantor agrees neither to abandon or leave unattended
the Property.  Grantor shall do all other acts, in addition to those
acts set forth above in this section, which from the character and use of the
Property are reasonably necessary to protect and preserve the
Property.

     

    TAXES AND
LIENS.  The following provisions relating to the taxes and
liens on the Property are part of this Mortgage:

    


    Payment.  Grantor
shall pay when due (and in all events prior to delinquency) all taxes, payroll
taxes, special taxes, assessments, water charges and sewer service charges
levied against or on account of the Property, and shall pay when due all claims
for work done on or for services rendered or material furnished to the
Property.  Grantor shall maintain the Property free of any liens
having priority over or equal to the interest of Lender under this Mortgage,
except for those liens specifically agreed to in writing by Lender, and except
for the lien of taxes and assessments not due as further specified in the Right
to Contest paragraph.

     

    Right to
Contest.  Grantor may withhold payment of any tax, assessment,
or claim in connection with a good faith dispute over the obligation to pay, so
long as Lender’s interest in the Property is not jeopardized.  If a
lien arises or is filed as a result of nonpayment, Grantor shall within fifteen
(15) days after the lien arises or, if a lien is filed, within fifteen (15) days
after Grantor has notice of the filing, secure the discharge of the lien, Of if
requested by Lender, deposit with Lender cash or a sufficient corporate surety
bond or other security satisfactory to Lender in an amount sufficient to
discharge the lien plus any costs and attorneys’ fees, or other charges that
could accrue as a result of a foreclosure or sale under the lien.  In
any contest.  Grantor shall defend itself and Lender and shall satisfy
any adverse judgment before enforcement against the Property.  Grantor
shall name Lender as an additional obligee under any surety bond furnished in
the contest proceedings.

     

    Evidence of
Payment.  Grantor shall upon demand furnish to Lender
satisfactory evidence of payment of the taxes or assessments and shall authorize
the appropriate governmental official to deliver to Lender at any time a written
statement of the taxes and assessments against the Property.

     

    Notice of
Construction.  Grantor shall notify Lender at least fifteen
(15) days before any work is commenced, any services are furnished, or any
materials are supplied to the Property, if any mechanic’s lien, materialmen’s
lien, or other lien could be asserted on account of the work, services, or
materials.  Grantor will upon request of Lender furnish to Lender
advance assurances satisfactory to Lender that Grantor can and will pay the cost
of such improvements.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    PROPERTY DAMAGE
INSURANCE.  The following provisions relating to insuring the
Property are a part of this Mortgage:

    


    Maintenance of
Insurance.  Grantor shall procure and maintain policies of fire
insurance with standard extended coverage endorsements on a replacement basis
for the full insurable value covering all Improvements on the Real Property in
an amount sufficient to avoid application of any coinsurance clause, and with a
standard mortgagee clause in favor of Lender.  Grantor shall also
procure and maintain comprehensive general liability insurance in such coverage
amounts as Lender may request with Lender being named as additional insureds in
such liability insurance policies.  Additionally.  Grantor
shall maintain such other insurance, including but not limited to hazard,
business interruption and boiler insurance as Lender may
require.  Policies shall be written by such insurance companies and in
such form as may be reasonably acceptable to Lender.  Grantor shall
deliver to Lender certificates of coverage from each insurer containing a
stipulation that coverage will not be cancelled or diminished without a minimum
of thirty (30) days’ prior written notice to Lender and not containing any
disclaimer of the insurer’s liability for failure to give such notice, Each
insurance policy also shall include an endorsement providing that coverage in
favor of Lender will not be impaired in any way by any act, omission or default
of Grantor or any other person.  Should the Real Property be located
in an area designated by the Director of the Federal Emergency Management Agency
as a special flood ha7ard 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.

     

    Application of
Proceeds.  Grantor shall promptly notify Lender of any loss or
damage to the Property.  Lender may make proof of loss if Grantor
fails to do so within fifteen (15) days of the casualty.  Whether or
not Lender’s security is impaired, Lender may, at Lender’s election, receive and
retain the proceeds of any insurance and apply the proceeds to the reduction of
the Indebtedness, payment of any lien affecting the Property, or the restoration
and repair of the Property.  If Lender elects to apply the proceeds to
restoration and repair.  Grantor shall repair or replace the damaged
or destroyed Improvements in a manner satisfactory to Lender.  Lender
shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor
from the proceeds for the reasonable cost of repair or restoration if Grantor is
not in default under this Mortgage.  Any proceeds which have not been
disbursed within 180 days after their receipt and which Lender has not committed
to the repair or restoration of the Property shall be used first to pay any
amount owing to Lender under this Mortgage, then to pay accrued interest, and
the remainder, if any, shall be applied to the principal balance of the
Indebtedness.  If Lender holds any proceeds after payment in full of
the Indebtedness, such proceeds shall be paid to Grantor as Grantor’s interests
may appear.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Grantor’s Report on
Insurance.  Upon request of Lender, however not more than once
a year.  Grantor shall furnish to Lender a report on each existing
policy of insurance showing:  (1) the name of the insurer; (2) the
risks insured; (3) the amount of the policy; (4) the property insured, the then
current replacement value of such property, and the manner of determining that
value; and (5) the expiration date of the policy.  Grantor shall, upon
request of Lender, have an independent appraiser satisfactory to Lender
determine the cash value replacement cost of the Property.

     

    LENDER’S
EXPENDITURES.  If any action or proceeding is commenced that
would materially affect Lender’s interest In the Property or if Grantor fails to
comply with any provision of this Mortgage or any Related Documents, including
but not limited to Grantor’s failure to discharge or pay when due any amounts
Grantor is required to discharge or pay under this Mortgage or any Related
Documents.  Lender on Grantor’s behalf may (but shall not be obligated
to) take any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on the Property and paying all costs
for insuring, maintaining and preserving the Property.  All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Grantor.  All such expenses will
become a part of the Indebtedness and, at Lendees option, will (A) be payable on
demand; 03) be added to the balance of the Note and be apportioned among and be
payable with any installment payments to become due during either (1) the term
of any applicable insurance policy; or (2) the remaining term of the Note; or
(C) be treated as a balloon payment which will be due and payable at the Note’s
maturity, The Mortgage also will secure payment of these
amounts.  Such right shall be in addition to all other rights and
remedies to which Lender may be entitled upon Default.

    


    WARRANTY; DEFENSE OF
TITLE.  The following provisions relating to ownership of the
Property are a part of this Mortgage:

    


    Title.  Grantor
warrants that:  (a) Grantor holds good and marketable title of record
to the Property in fee simple, free and clear of all liens and encumbrances
other than those set forth in the Real Property description or in any title
insurance policy, title report, or final title opinion issued in favor of, and
accepted by, Lender in connection with this Mortgage, (b) Grantor has the full
right, power, and authority to execute and deliver this Mortgage to Lender, and
(c) the liens granted hereby are not the type of lien referred to in Chapter 575
of the Iowa Code Supplement, as now enacted or hereafter modified, amended or
replaced.  Grantor, for itself and all persons claiming by, through or
under Grantor, agrees that it claims no lien or right to a lien of the type
contemplated by Chapter 575 or any other chapter of the Code of Iowa and further
waives all notices and rights pursuant to said law with respect to the liens
hereby granted, and represents and warrants that it is the sole party entitled
to do so and agrees to indemnity, defend, and hold harmless Lender from any
loss, damage, and costs, including reasonable attorneys’ fees, threatened or
suffered by Lender arising either directly or indirectly as a result of any
claim of the applicability of said law to the liens hereby granted.

     

    Defense of
Title.  Subject to the exception in the paragraph above,
Grantor warrants and will forever defend the title to the Property against the
lawful claims of all persons.  In the event any action or proceeding
is commenced that questions Grantor’s title or the interest of Lender under this
Mortgage, Grantor shall defend the action at Grantor’s
expense.  Grantor may be the nominal party in such proceeding, but
Lender shall be entitled to participate in the proceeding and to be represented
in the proceeding by counsel of Lender’s own choice, and Grantor will deliver,
or cause to be delivered, to Lender such instruments as Lender may request from
time to time to permit such participation.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Compliance With
Laws.  Grantor warrants that the Property and Grantor’s use of
the Property complies with ail existing applicable laws, ordinances, and
regulations of governmental authorities.

     

    Survival of Representations and
Warranties.  All representations, warranties, and agreements
made by Grantor in this Mortgage shall survive the execution and delivery of
this Mortgage, shall be continuing in nature, and shall remain in full force and
effect until such time as Grantor’s Indebtedness shall be paid in
full.

     

    CONDEMNATION.  The
following provisions relating to condemnation proceedings are a part of this
Mortgage:

    


    Proceedings.  If any
proceeding in condemnation is filed, Grantor shall promptly notify Lender in
writing, and Grantor shall promptly take such steps as may be necessary to
defend the action and obtain the award.  Grantor may be the nominal
party in such proceeding, but Lender shall be entitled to participate in the
proceeding and to be represented in the proceeding by counsel of its own choice,
and Grantor will deliver or cause to be delivered to Lender such instruments and
documentation as may be requested by Lender from time to time to permit such
participation.

     

    Application of Net
Proceeds.  If all or any part of the Property is condemned by
eminent domain proceedings or by any proceeding or purchase in lieu of
condemnation, Lender may at its election require that all or any portion of the
net proceeds of the award be applied to the Indebtedness or the repair or
restoration of the Property.  The net proceeds of the award shall mean
the award after payment of all reasonable costs, expenses, and attorneys’ fees
incurred by Lender in connection with the condemnation.

     

    IMPOSITION OF TAXES, FEES AND CHARGES
BY GOVERNMENTAL AUTHORITIES.  The following provisions relating
to governmental taxes, fees and charges are a part of this
Mortgage:

    


    Current Taxes, Fees and
Charges.  Upon request by Lender, Grantor shall execute such
documents in addition to this Mortgage and take whatever other action is
requested by Lender to perfect and continue Lender’s lien on the Real
Property.  Grantor shall reimburse Lender for all taxes, as described
below, together with all expenses incurred in recording, perfecting or
continuing this Mortgage, including without limitation all taxes, fees,
documentary stamps, and other charges for recording or registering this
Mortgage,

     

    Taxes.  The
following shall constitute taxes to which this section applies:  (1) a
specific tax upon this type of Mortgage or upon all or any part of the
Indebtedness secured by this Mortgage; (2) a specific tax on Grantor which
Grantor is authorized or required to deduct from payments on the Indebtedness
secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable
against the Lender or the holder of the Note; and (4) a specific tax on all or
any portion of the Indebtedness or on payments of principal and interest made by
Grantor.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Subsequent
Taxes.  If any tax to which this section applies is enacted
subsequent to the date of this Mortgage, this event shall have the same effect
as an Event of Default, and Lender may exercise any or all of its available
remedies for an Event of Default as provided below unless Grantor either (t)
pays the tax before it becomes delinquent, or (2) contests the tax as provided
above in the Taxes and Liens section and deposits with Lender cash or a
sufficient corporate surety bond or other security satisfactory to
Lender.

     

    SECURITY AGREEMENT; FINANCING
STATEMENTS.  The following provisions relating to this Mortgage
as a security agreement are a part of this Mortgage:

    


    Security
Agreement.  This instrument shall constitute a Security
Agreement to the extent any of the Property constitutes fixtures, and Lender
shall have all of the rights of a secured party under the Uniform Commercial
Code as amended from time to time.

     

    Security
Interest.  Upon request by Lender, Grantor shall take whatever
action is requested by Lender to perfect and continue Lender’s security interest
in the Rents and Personal Property.  In addition to recording this
Mortgage in the real property records, Lender may, at any time and without
further authorization from Grantor, file executed counterparts, copies or
reproductions of this Mortgage as a financing statement.  Grantor
shall reimburse Lender for all expenses incurred in perfecting or continuing
this security interest.  Upon default, Grantor shall not remove, sever
or detach the Personal Property from the Property.  Upon default,
Grantor shall assemble any Personal Property not affixed to the Property in a
manner and at a place reasonably convenient to Grantor and Lender and make it
available to Lender within three (3) days alter receipt of written demand from
Lender to the extent permitted by applicable law.

     

    Fixture
Filing.  From the date of its recording, this Mortgage shall be
effective as a financing statement filed as a fixture filing with respect to the
Personal Property and for this purpose, the name and address of the debtor is
the name and address of Grantor as set forth on the first page of this Mortgage
and the name and address of the secured party is the name and address of Lender
as set forth on the first page of this Mortgage.

     

    Addresses.  The
mailing addresses of Grantor (debtor) and Lender (secured party) from which
information concerning the security interest granted by this Mortgage may be
obtained (each as required by the Uniform Commercial Code) are as stated on the
first page of this Mortgage.

     

    FURTHER ASSURANCES;
ATTORNEY-IN-FACT.  The following provisions relating to further
assurances and attorney-in-fact are a part of this Mortgage:

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Further
Assurances.  At any time, and from time to time, upon request
of Lender, Grantor will make, execute and deliver, or will cause to be made,
executed or delivered, to Lender or to Lender’s designee, and when requested by
Lender, cause to be filed, recorded, reffied, or rerecorded, as the case may be,
at such times and in such offices and places as Lender may deem appropriate, any
and ail such mortgages, deeds of trust, security deeds, security agreements,
financing statements, continuation statements, instruments of further assurance,
certificates, and other documents as may, in the sole opinion of Lender, be
necessary or desirable In order to effectuate, complete,
perfect.  continue, or preserve (1) Grantor’s obligations under the
Note, this Mortgage, and the Related Documents, and (2) the liens and security
interests created by this Mortgage as first and prior liens on the Property,
whether now owned or hereafter acquired by Grantor.  Unless prohibited
by law or Lender agrees to the contrary in writing, Grantor shall reimburse
Lender for all costs and expenses incurred in connection with the matters
referred to in this paragraph.

     

    Attorney-In-Fact.  If
Grantor fails to do any of the things referred to In the preceding paragraph,
Lender may do so for and in the name of Grantor and at Grantor’s
expense.  For such purposes, Grantor hereby irrevocably appoints
Lender as Grantor’s attorney-in--fact for the purpose of making, executing,
delivering, filing, recording, and doing all other things as may be necessary or
desirable, in Lender’s sole opinion, to accomplish the matters referred to in
the preceding paragraph.

     

    FULL
PERFORMANCE.  If Grantor pays all the Indebtedness, including
without limitation all future advances, when due, and otherwise performs ail the
obligations imposed upon Grantor under this Mortgage, Lender shall execute and
deliver to Grantor a suitable satisfaction of this Mortgage and suitable
statements of termination of any financing statement on file evidencing Lender’s
security interest in the Rents and the Personal Property.  Grantor
will pay, if permitted by applicable law, any reasonable termination fee as
determined by Lender from time to time.

    


    EVENTS OF
DEFAULT.  Each of the following, at Lender’s option, shall
constitute an Event of Default under this Mortgage:

    


    Payment
Default.  Grantor fails to make any payment when due under the
Indebtedness.

     

    Default on Other
Payments.  Failure of Grantor within the time required by this
Mortgage to make any payment for taxes or insurance, or any other payment
necessary to prevent filing of or to effect discharge of any lien.

     

    Other
Defaults.  Grantor tails to comply with or to perform any other
term, obligation, covenant or condition contained in this Mortgage or in any of
the Related Documents or to comply with or to perform any term, obligation,
covenant or condition contained in any other agreement between Lender and
Grantor.

     

    Default in Favor of Third
Parties.  Should Grantor default under any loan, extension of
credit, security agreement, purchase or sales agreement, or any other agreement,
in favor of any other creditor or person that may materially affect any of
Grantor’s property or Grantor’s ability to repay the Indebtedness or Grantor’s
ability to perform Grantor’s obligations under this Mortgage or any related
document.

     

    False
Statements.  Any warranty, representation or statement made or
furnished to Lender by Grantor or on Grantor’s behalf under this Mortgage or the
Related Documents is false or misleading in any material respect, either now or
at the time made or furnished or becomes false or misleading at any time
thereafter,

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Defective
Collateralization.  This Mortgage or any of the Related
Documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or lien)
at any time and for any reason.

     

    Insolvency.  The
dissolution or termination of Grantor’s existence as a going business, the
insolvency of Grantor, the appointment of a receiver for any part of Grantor’s
property, any assignment for the benefit of creditors, any type of creditor
workout or the commencement of any proceeding under any bankruptcy or insolvency
laws by or against Grantor.

     

    Creditor or Forfeiture
Proceedings.  Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Grantor or by any governmental agency against
any property securing the Indebtedness.  This includes a garnishment
of any of Grantor’s accounts, including deposit accounts, with
Lender.  However, this Event of Default shall not apply if there is a
good faith dispute by Grantor as to the validity or reasonableness of the claim
which is the basis of the creditor or forfeiture proceeding and if Grantor gives
Lender written notice of the creditor or forfeiture proceeding and deposits with
Lender monies or a surety bond for the creditor or forfeiture proceeding, in an
amount determined by Lender, in its sole discretion, as being an adequate
reserve or bond for the dispute.

     

    Breach of Other
Agreement.  Any breach by Grantor under the terms of any other
agreement between Grantor and Lender that is not remedied within any grace
period provided therein, including without limitation any agreement concerning
any indebtedness or other obligation of Grantor to Lender, whether existing now
or later.

     

    Events Affecting
Guarantor.  Any of the preceding events occurs with respect to
any guarantor, endorser, surety, or accommodation party of any of the
Indebtedness or any guarantor, endorser, surety, or accommodation party dies or
becomes incompetent, or revokes or disputes the validity of, or liability under,
any Guaranty of the Indebtedness.  In the event of a death, Lender, at
its option, may, but shall not be required to, permit the guarantor’s estate to
assume unconditionally the obligations arising under the guaranty in a manner
satisfactory to Lender, and, in doing so, cure any Event of
Default.

     

    Adverse Change.  A
material adverse change occurs in Grantor’s financial condition, or Lender
believes the prospect of payment or performance of the Indebtedness Is
impaired.

     

    Insecurity.  Lender
in good faith believes itself insecure.

     

    Right to Cure.  If
any default, other than a default in payment is curable and if Grantor has not
been given a notice of a breach of the same provision of this Mortgage within
the preceding twelve (12) months, it may be cured if Grantor, after receiving
written notice from Lender demanding cure of such default (1) cures the default
within twenty (20) days; or (2) if the cure requires more than twenty (20) days,
immediately initiates steps which Lender deems in Lender’s sole discretion to be
sufficient to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    RIGHTS AND REMEDIES ON
DEFAULT.  Upon the occurrence of an Event of Default and at any
time thereafter, Lender, at Lender’s option, may exercise any one or more of the
following rights and remedies, in addition to any other rights or remedies
provided by law:

    


    Accelerate
Indebtedness.  Lender shall have the right at its option to
declare the entire Indebtedness immediately due and payable, including any
prepayment penalty which Grantor would be required to pay without notice, except
as may be expressly required by applicable law.

     

    UCC Remedies.  With
respect to all or any part of the Personal Property, Lender shall have all the
rights and remedies of a secured party under the Uniform Commercial
Code.

     

    Collect
Rents.  Lender shall have the right, without notice to Grantor,
to take possession of the Property and collect the Rents, including amounts past
due and unpaid, and apply the net proceeds, over and above Lender s costs,
against the Indebtedness.  In furtherance of this right, Lender may
require any tenant or other user of the Property to make payments of rent or use
fees directly to Lender.  If the Rents are collected by Lender, then
Grantor irrevocably designates Lender as Grantor’s attorney—in—fact to endorse
instruments received in payment thereof in the name of Grantor and to negotiate
the same and collect the proceeds.  Payments by tenants or other users
to Lender in response to Lender’s demand shall satisfy the obligations for which
the payments are made, whether or not any proper grounds for the demand
existed.  Lender may exercise its rights under this subparagraph
either in person, by agent, or through a receiver.

     

    Appoint
Receiver.  Lender shall have the right to have a receiver
appointed to take possession of all or any part of the Property, with the power
to protect and preserve the Property, to operate the Property preceding
foreclosure or sale, and to collect the Rents from the Property and apply the
proceeds, over and above the cost of the receivership, against the
Indebtedness.  The receiver may serve without bond if permitted by
law.  Lender’s right to the appointment of a receiver shall exist
whether or not the apparent value of the Property exceeds the Indebtedness by a
substantial amount.  Employment by Lender shall not disqualify a
person from serving as a receiver.

     

    Judicial
Foreclosure.  Lender may obtain a judicial decree foreclosing
Grantor’s interest in all or any part of the Property.

     

    Nonjudicial
Foreclosure.  Lender may exercise the right to non-judicial
foreclosure pursuant to Iowa Code Section 654.18 and Chapter 655A as now enacted
or hereafter modified, amended or replaced.

     

    Deficiency
Judgment.  If permitted by applicable law, Lender may obtain a
judgment for any deficiency remaining in the Indebtedness due to Lender after
application of all amounts received from the exercise of the rights provided in
this section.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Tenancy at
Sufferance.  If Grantor remains in possession of the Property
after the Property is sold as provided above or Lender otherwise becomes
entitled to possession of the Property upon default of Grantor, Grantor shall
become a tenant at sufferance of Lender or the purchaser of the Property and
shall, at Lender’s option, either (1) pay a reasonable rental for the use of the
Property, or (2) vacate the Property immediately upon the demand of
Lender.  This paragraph is subject to any rights of Grantor, under
Iowa law, to remain in possession of the Property during a redemption
period.

     

    Other
Remedies.  Lender shall have all other rights and remedies
provided in this Mortgage or the Note or available at law or in
equity.

     

    Sale of the
Property.  To the extent permitted by applicable law, Grantor
hereby waives any and all right to have the Property marshalled.  In
exercising its rights and remedies, Lender shall be free to sell all or any part
of the Property together or separately, in one sale or by separate
sales.  Lender shall be entitled to bid at any public sale on all or
any portion of the Property.

     

    Notice of
Sale.  Lender shall give Grantor reasonable notice of the time
and place of any public sale of the Personal Property or of the time after which
any private sale or other intended disposition of the Personal Property is to be
made.  Reasonable notice shall mean notice given at least ten (10)
days before the time of the sale or disposition.  Any sale of the
Personal Property may be made in conjunction with any sale of the Real
Property.

     

    Shortened
Redemption.  Grantor hereby agrees that, in the event of
foreclosure of this Mortgage, Lender may, at Lender’s sole option, elect to
reduce the period of redemption pursuant to Iowa Code Sections 628.26,
628.27.  or 628.29, or any other Iowa Code Section, to such time as
may be then applicable and provided by law.

     

    Election of
Remedies.  Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make expenditures or to
take action to perform an obligation of Grantor under this Mortgage, after
Grantor’s failure to perform, shall not affect Lender’s right to declare a
default and exercise its remedies.  Nothing under this Mortgage or
otherwise shall be construed so as to limit or restrict the rights and remedies
available to Lender following an Event of Default, or in any way to limit or
restrict the rights and ability of Lender to proceed directly against Grantor
and/or against any other co—maker, guarantor, surety or endorser and/or to
proceed against any other collateral directly or indirectly securing the
Indebtedness.

     

    Attorneys’ Fees;
Expenses.  If Lender institutes any suit or action to enforce
any of the terms of this Mortgage, Lender shall be entitled to recover such sum
as the court may adjudge reasonable as attorneys’ fees at trial arid upon any
appeal.  Whether or not any court action is involved, and to the
extent not prohibited by law, all reasonable expenses Lender incurs that in
Lender’s opinion are necessary at any time for the protection of its interest or
the enforcement of its rights shall become a part of the Indebtedness payable on
demand and shall bear interest at the Note rate from the date of the expenditure
until repaid.  Expenses covered by this paragraph include, without
limitation, however subject to any limits under applicable law, Lender’s
attorneys’ fees and Lender’s legal expenses, whether or not there is a lawsuit,
including attorneys’ fees and expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction), appeals, and any
anticipated post—judgment collection services, the cost of searching records,
obtaining title reports (including foreclosure reports), surveyors’ reports, and
appraisal fees and title insurance, to the extent permitted by applicable
law.  Grantor also will pay any court costs, in addition to all other
sums provided by law.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    NOTICES.  Any notice
required to be given under this Mortgage, including without limitation any
notice of default and any notice of sale shall be given in writing, and shall be
effective when actually delivered, when actually received by telefacsimile
(unless otherwise required by law), when deposited with a nationally recognized
overnight courier, or, if mailed, when deposited in the United States mail, as
first class, certified or registered mail postage prepaid, directed to the
addresses shown near the beginning of :his Mortgage.  All copies of
notices of foreclosure from the holder of any lien which has priority over this
Mortgage shall be sent to Lender’s address, as shown near the beginning of this
Mortgage.  Any party may change its address for notices under this
Mortgage by giving formal written notice to the other parties, specifying that
the purpose of the notice is to change the party’s address.  For
notice purposes.  Grantor agrees to keep Lender informed at all times
of Grantor’s current address, Unless otherwise provided or required by law, if
there is more than one Grantor, any notice given by Lender to any Grantor is
deemed to be notice given to all Grantors.

    


    NOTICE
OF WAIVER OF HOMESTEAD EXEMPTION.

    UNDERSTAND
THAT HOMESTEAD PROPERTY IS IN MANY CASES PROTECTED FROM THE CLAIMS OF CREDITORS
AND EXEMPT FROM JUDICIAL SALE, AND THAT BY SIGNING THIS CONTRACT, I VOLUNTARILY
GIVE UP MY RIGHT TO THIS PROTECTION FOR THIS PROPERTY WITH RESPECT TO CLAIMS
BASED UPON THIS CONTRACT.

    


    
      
        
          
            
              
                	
                        Sign
      name:

                      
	
                        Print
      name:

                      	
                        Date

                      
	 
      	 
      
	
                        Sign
      name:

                      
	
                        Print
      name:

                      	
                        Date.

                      


              

            

          

        

      

    

    


    MISCELLANEOUS
PROVISIONS.  The following miscellaneous provisions are a part
of this Mortgage:

    


    Amendments.  This
Mortgage, together with any Related Documents, constitutes the entire
understanding and agreement of the parties as to the matters set forth in this
Mortgage.  No alteration of or amendment to this Mortgage shall be
effective unless given in writing and signed by the party or parties sought to
be charged or bound by the alteration or amendment.

     

    Annual Reports.  If
the Property is used for purposes other than Grantor’s residence, Grantor shall
furnish to Lender, upon request, a certified statement of net operating income
received from the Property during Grantor’s previous fiscal year in such form
arid detail as Lender shall require, “Net operating income” shall mean all cash
receipts from the Property less all cash expenditures made in connection with
the operation of the Property.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    Caption
Headings.  Caption headings in this Mortgage are for
convenience purposes only and are not to be used to interpret or define the
provisions of this Mortgage.

     

    Governing Law.  This
Mortgage will be governed by federal law applicable to Lender and, to the extent
not preempted by federal law, the laws of the State of Iowa without regard to
Its conflicts of law provisions.  This Mortgage has been accepted by
Lender in the State of Iowa.

     

    Choice of Venue.  If
there is a lawsuit, Grantor agrees upon Lender’s request to submit to the
jurisdiction of the courts of POLK County, State of Iowa.

     

    No Waiver by
Lender.  Lender shall not be deemed to have waived any rights
under this Mortgage unless such waiver ;s given in writing and signed by
Lender.  No delay or omission on the part of Lender in exercising any
right shall operate as a waiver of such right or any other right.  A
waiver by Lender of a provision of this Mortgage shall not prejudice or
constitute a waiver of Lender’s right otherwise to demand strict compliance with
that provision or any other provision of this Mortgage.  No prior
waiver by Lender, nor any course of dealing between Lender and Grantor, shall
constitute a waiver of any of Lender’s rights or of any of Grantor’s obligations
as to any future transactions, Whenever the consent of Lender is required under
this Mortgage, the granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such consent is
required and in all cases such consent may be granted or withheld in the sole
discretion of Lender.

     

    Severability.  If a
court of competent jurisdiction finds any provision of this Mortgage to be
illegal, invalid, or unenforceable as to any circumstance, that finding shall
not make the offending provision illegal, invalid, or unenforceable as to any
other circumstance.  If feasible the offending provision shall be
considered modified so that it becomes legal, valid and
enforceable.  If the offending provision cannot be so modified, it
shall be considered deleted from this Mortgage.  Unless otherwise
required by law, the illegality, invalidity, or unenforceabil4 of any provision
of this Mortgage shall not affect the legality, validity or enforceability of
any other provision of this Mortgage.

     

    Merger.  There shall
be no merger of the interest or estate created by this Mortgage with any other
interest or estate in the Property at any time held by or for the benefit of
Lender in any capacity, without the written consent of Lender.

     

    Successors and
Assigns.  Subject to any limitations stated in this Mortgage on
transfer of Grantor’s interest, this Mortgage shall be binding upon and inure to
the benefit of the parties, their successors and assigns.  If
ownership of the Property becomes vested in a person other than Grantor, Lender,
without notice to Grantor, may deal with Grantor’s successors with reference to
this Mortgage and the Indebtedness by way of forbearance or extension without
releasing Grantor from the obligations of this Mortgage or liability under the
indebtedness.

     

    Time is of the
Essence.  Time is of the essence in the performance of this
Mortgage.

     

    Release of Rights of Dower, Homestead
and Distributive Share.  Each of the undersigned hereby
relinquishes ail rights of dower, homestead and distributive share in and to the
Property and waives all rights of exemption as to any of the
Property.  If a Grantor is not an owner of the Property, that Grantor
executes this Mortgage for the sole purpose of relinquishing and waiving such
rights.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    DEFINITIONS.  The
following capitalized words and terms shall have the following meanings when
used in this Mortgage.  Unless specifically stated to the contrary,
all references to dollar amounts shall mean amounts in lawful money of the
United States of America.  Words and terms used in the singular shall
include the plural, and the plural shall include the singular, as the context
may require.  Words and terms not otherwise defined in this Mortgage
shall have the meanings attributed to such terms in the Uniform Commercial
Code:

    


    Borrower.  The word
“Borrower” means ART’S-WAY MANUFACTURING COMPANY, INC.  and includes
all co-signers and co-makers signing the Note and all their successors and
assigns.

     

    Default.  The word
“Default” means the Default set forth in this Mortgage in the section titled
“Default”.

     

    Environmental
Laws.  The words “Environmental Laws” mean any and all state,
federal and local statutes, regulations and ordinances relating to the
protection of human health or the environment, including without limitation the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”), the Superfund Amendments
and Reauthorization Act of 1986, Pub. L. No. 99-499 (“SARA”), the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other
applicable state or federal laws, rules, or regulations adopted pursuant
thereto.

     

    Event of
Default.  The words “Event of Default” mean any of the events
of default set forth in this Mortgage in the events of default section of this
Mortgage.

     

    Grantor.  The word
“Grantor’ means ARTS-WAY MANUFACTURING COMPANY, INC.

     

    Guaranty.  The word
“Guaranty” means the guaranty from guarantor, endorser, surety, or accommodation
party to Lender, including without limitation a guaranty of all or part of the
Note.

     

    Hazardous
Substances.  The words “Hazardous Substances” mean materials
that, because of their quantity, concentration or physical, chemical or
infectious characteristics, may cause or pose a present or potential hazard to
human health or the environment when improperly used,
treated.  stored, disposed of, generated, manufactured, transported or
otherwise handled.  The words “Hazardous Substances” are used in their
very broadest sense and include without limitation any and all hazardous or
toxic substances, materials or waste as defined by or listed under the
Environmental Laws.  The term “Hazardous Substances” also includes,
without limitation, petroleum and petroleum by-products or any fraction thereof
and asbestos.

     

    Improvements.  The
word “Improvements” means all existing and future improvements, buildings,
structures, mobile homes affixed on the Real Property, facilities, additions,
replacements and other construction on the Real Property.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Indebtedness.  The
word “Indebtedness’ means all principal, interest and late fees, and other
amounts, costs and expenses payable under the Note or Related Documents,
together with all renewals of, extensions of, modifications of, consolidations
of and substitutions for the Note or Related Documents and any amounts expended
or advanced by Lender to discharge Grantor’s obligations or expenses incurred by
Lender to enforce Grantor’s obligations under this Mortgage, together with
interest on such amounts as provided in this Mortgage.  Specifically,
without limitation, Indebtedness includes the future advances set forth in the
Future Advances provision of this Mortgage, together with all interest
thereon.

     

    Lender.  The word
“Lender” means WEST BANK, its successors and assigns.

     

    Mortgage.  The word
“Mortgage” means this Mortgage between Grantor and Lender.

     

    Note.  The word
“Note” means the promissory note dated November 30, 2007, in the original
principal amount of $1,500,000.00 from Grantor to Lender, together with ail
renewals of, extensions of, modifications of, refinancings of, consolidations
of, and substitutions for the promissory note or agreement.  The
maturity date of this Mortgage is May 1, 2017.

     

    Personal
Property.  The words “Personal Property’ mean all equipment,
fixtures, and other articles of personal property now or hereafter owned by
Grantor, and now or hereafter attached or affixed to the Real Property; together
with all accessions, parts, and additions to, all replacements of, and all
substitutions for, any of such property; and together with ail proceeds
(including without limitation all insurance proceeds and refunds of premiums)
from any sale or other disposition of the Property.

     

    Property.  The word
“Property” means collectively the Real Property and the Personal
Property.

     

    Real Property.  The
words “Real Property” mean the real property, interests and rights, as further
described in this Mortgage.

     

    Related
Documents.  The words “Related Documents” mean all promissory
notes.  credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security deeds,
collateral mortgages, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the
indebtedness.

     

    Rents.  The word
“Rents” means all present and future rents, revenues, income, issues, royalties,
profits, and other benefits derived from the Property.

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    GRANTOR
ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES
TO ITS TERMS.

    


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

    


    GRANTOR:

    


    ART’S-WAY
VESSELS INC.

    


    
      
        
          	
                  By:

                	
                  /s/
      Carrie L. Majeski

                
	 
      	
                  CARRIE
      L. MAJESKI, PRESIDENT/SECRETARY of

                
	 
      	
                  ART’S-WAY
      VESSELS INC.

                


        

      

    

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
“A”

    


    Those portions of the East Half of the
Northwest Quarter, and the West Half of the Northeast Quarter, in Section 15,
Township 99 North , Range 31 West of the 5th P.M., Emmet County, Iowa described
as follows:

    Commencing at the Northeast corner of
said Section 15;

    thence South 89 48.9’ West 3957.97 feet
along the Northerly line of said Section 15 to Northwest corner of the East half
of the Northwest Quarter of said Section 15 at a point North 89 48.9’ East
1319.29 feet from the northwest corner of said Section 15;

    thence South 0 47.0 West 388.10 feet
along the Westerly line of said East Half of the Northwest Quarter to the point
of beginning at the Southerly line of the railway right-of-way across said
Section 15;

    thence South 67 40.1’ East 2836.30 feet
along said railway right-of-way line to the easterly line of the West Half of
the Northeast Quarter of said Section 15;

    thence South 045.9 West 1120.92 feet to
the southeast corner of said West Half of the Northeast Quarter at a point south
89 45.9’ West 1322.14 feet from the Southeast corner of the Northeast Quarter of
said Section 15;

    thence South 89 45.9’ West 1322.14 feet
to the Southwest corner of said Northeast Quarter.

    thence North 89 45.9’ West 1316.49 feet
to the Southwest comer of the East Half of the Northwest Quarter of said Section
15 at a point south 89 45.9’ Wast 1316.49 feet from the Southwest corner of the
Northwest Quarter of said Section 15;

    thence North 0 47.0’ East 56.02 feet
along the westerly line of said East Half o I the Northwest Quarter to the
Northerly line of Iowa Primary Road #9 right-of-way across said Section
15;

    thence North 59 57.0’ East 461.70 feet
along said road right-of-way line; thence North 0 47.0’ East 771.70
feet;

    thence South 89 47.0’ West 461.70 feet
to the westerly line of said Fast Half of the Northwest Quarter;

    thence North 0 47.0’ East 1371.01 feet
to the point beginning, containing 92.51 acres subject to Iowa Primary Road
right-of-way across said Section 15 by easement of record,

    


    AND

    


    PARCEL
B

    Those portions of the East Half of the
Northwest Quarter, and of the West Half of the Northeast Quarter, in Section 15
Township 99 North, Range 31 West of the 5th P.M.  Emmet County, Iowa
described as follows:

    Commencing at the northeast corner of
said Section 15;

    thence
South 89 48.9’ West 1849.06 feet along the northerly 1Me of said Section 15 to
the point of beginning;

    thence
South 0 08.8’ West 746.91 feet (previously recorded as South 0 1450” West 747.45
feet with the northerly line of said Section 15 bearing North 90 0000” West) to
a former survey iron pipe found;


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    thence
North 89 53.9’ East 339.99 feet parallel with the northerly line of said Section
15 to a point 181.00 feet westerly fro .n.  the easterly line of West
half of the Northeast Quarter of said Section 15;

    thence
South 0 45.9’ West 213.51 feet parallel with said easterly line of the West Half
of the Northeast Quarter to a point Sough 89 48.9’ West 181.00 feet from the
southwest corner of Outlot 25 in East Half of the Northeast Quarter of said
Section 15;

    thence
North 89 48.9’ East 14.00 feet to a point South 89 48.9’ West 167.00 feet from
the northwest corner of Outlot 28 in said East Half of the Northeast
Quarter;

    thence
South 0 45.9’ West 337.08 feet to the northerly line of the railway right-of-way
across said Section 15;

    thence
North 67 40.1 West 2656.72 feet along said railway right-of-way line to the
westerly line of the East Half of the Northwest Quarter of said Section
15;

    thence
North 0 47.0’ East 280.58 feet to the northwest corner of said East Half of the
northwest Quarter at a point North 89 48.9’ East 1319 29 feet from the northwest
corner of said Section 15;

    thence
North 89 48.9 East 2108.91 feet along the northerly line of said Section 15 to
the point of beginning, containing 38.56 acres subject to public road
right-of-way along the northerly line of said Section 15 by easement of
record.