ASSET
      PURCHASE AGREEMENT





THIS
      ASSET PURCHASE AGREEMENT (this "Agreement") is
      dated
      as of the 5th day of September, 2007, by and among ART'S WAY MANUFACTURING
      CO.,
      INC., a Delaware corporation (" Purchaser "),
      MILLER-ST. NAZIANZ, INC., a Wisconsin corporation ("Seller"), and only with
      respect to Section 1.01, Non-Competition Agreement and with respect to Section
      5.01 and Section 703 Bulk Sales compliance and indemnity, JOHN C. MILLER
      ("Miller").





BACKGROUND





A.  Seller
      is
      engaged in the business of manufacturing and distributing agricultural equipment
      (the " Business ").





B.  The
      Business consists of multiple product lines including, but not limited to,
      the
      Miller Pro, Victor, and Badger product lines. For purposes of this Agreement,
      the Miller Pro, Victor, and Badger product lines are hereinafter referred to
      collectively as the "Product
      Lines ".





C.  Seller
      wishes to sell to Purchaser, and Purchaser wishes to purchase from Seller,
      certain assets comprising or related to the Product Lines (the " Purchased
      Product Lines "),
      all
      upon the terms and subject to the conditions set forth herein.





D.  John
      C.
      Miller is the sole voting shareholder of Seller and in order to induce Buyer
      to
      purchase the Purchased Assets (as the term is hereinafter defined) has agreed
      to
      execute and deliver to Purchaser a Non-Competition agreement as provided in
      Section 1.01 and further agreed to certain indemnities as provided in Section
      5.01 and Section 7.03.





TERMS
      AND
      CONDITIONS




In
      consideration of the premises and the mutual agreements and covenants
      hereinafter set forth, and intending to be legally bound, and for other good
      and
      valuable consideration the sufficiency of which is hereby acknowledged, Seller
      and Purchaser hereby agree as follows:





Article
      I





DEFINITIONS





1.01.  Certain
      Defined Terms. For
      purposes of this Agreement:





"Action" means
      any
      claim, action, suit, arbitration, inquiry, proceeding or investigation by or
      before any Governmental Authority.





"Agreement"
      shall have the meaning set forth in the Preamble above.





"Ancillary
      Agreements" means
      the
      Warranty Bill of Sale, the Intellectual Property Assignment, the Badger
      Intellectual Property License Agreement, and the Non-Competition
      Agreements.










"Badger
      Intellectual Property License Agreement "
      means
      the license agreement between Purchaser and Seller attached hereto as Exhibit
      A, under
      which Seller shall grant to Purchaser a limited license to use Seller's "Badger"
      trade name in connection with Purchaser's post-Closing manufacture and sale
      of
      the Badger Product Line.





"Badger
      Product Line" means,
      exclusively, those items listed on Disclosure
      Schedule 1.





" Bill
      of Sale" means
      the
      Warranty Bill of Sale to be executed by Seller at the Closing, substantially
      in
      the form attached hereto as Exhibit
      B.





"Claims" means
      any
      and all administrative, regulatory or judicial actions, suits, petitions,
      appeals, demands, demand letters, claims, liens, notices of noncompliance or
      violation, investigations, proceedings, consent orders or consent agreements,
      including any Product Warranty Claims or Product Liability Claims.





"Closing" means
      the
      Closing of the transaction contemplated by this Agreement pursuant to the terns
      and conditions of this Agreement.





"Closing
      Date" shall
      have the meaning set forth in Section 2.08(a) of this Agreement.





"Customer
      Lists" shall
      have the meaning set forth in Section 2.01(a)(iv) of this
      Agreement.





"Dealer
      Agreements" shall
      have the meaning set forth in Section 2.01(a)(x).





"Distribution
      Agreements" shall
      have the meaning set forth in Section 2.01(a)(ix).





"Finished
      Goods Inventory" shall
      have the meaning set forth in Section 2.01(a)(v).





"Governmental
      Authority" means
      (whether foreign or domestic) any federal, national, state, provincial, local
      or
      similar government, governmental, regulatory or administrative authority, agency
      or commission or any court, tribunal or judicial or arbitral body.





"Governmental
      Order" means
      any
      order, writ, judgment, injunction, decree, stipulation, determination or award
      entered by or with any Governmental Authority.





"Intellectual
      Property" shall
      have the meaning set forth in Section 2.01(a)(iii);





" Intellectual
      Property Assignment" means
      the
      Intellectual Property Assignment to be executed by Purchaser and Seller at
      the
      Closing, substantially in the form attached hereto as Exhibit
      C, pursuant
      to which, Seller will transfer, convey, and assign the Intellectual Property
      to
      Purchaser.




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"Law" means
      any
      federal, national, state, provincial, local or similar statute, law, ordinance,
      regulation, rule, code, order, requirement or rule of law (including common
      law), and any permit, approval, identification number, license or other
      authorization required or issued thereunder.





"Liabilities" means
      any
      and all debts, liabilities and obligations, whether accrued or fixed, absolute
      or contingent, matured or unmatured or determined or determinable, including
      those arising under any Law, Action or Governmental Order and those arising
      under any contract, agreement, arrangement, commitment or
      undertaking.





"Manufacturing
      Fixtures and Equipment" shall
      have the meaning set forth in Section 2.01(a)(ii) of this
      Agreement.





"Non-Competition
      Agreements" means
      the
      Non-Competition Agreements between (i) Seller and Purchaser and (ii) Mr. John
      C.
      Miller and Purchaser, substantially in the forms attached hereto as Exhibits
      D and E, respectively.





"Miller
      Pro Product Line" means,
      exclusively, those items listed on Disclosure
      Schedule 2.





"Product
      Liability Claims" means
      all
      claims (whether asserted or unasserted as of the Closing Date and whether any
      such claim is stated in tort, breach of warranty or otherwise) for bodily
      injury, property damage, or both, resulting from any actual or alleged defect
      in
      the design, assembly or manufacture of a product or performance of a service
      of
      the Business prior to the Closing Date (whether or not such product is sold
      prior to the Closing Date) or resulting from any act or omission relating to
      such a product, including, without limitation, failure to warn of hazards,
      improper instruction in the use of the product or failure to modify, correct
      or
      improve such product.





"Product
      Lines" shall
      have the meaning set forth in the recitals of this Agreement.





"Product
      Warranty Claims" shall
      have the meaning of all claims for repair or replacement or goods or products
      or
      to re-perform services and/or to return or credit all or a portion of the sale
      price of such goods or services, pursuant to Seller's standard express written
      product warranties, but not including any Product Liability Claims.





" Purchase
      Price "
      shall
      have the meaning set forth in Section 2.03(a) of this Agreement.





"Purchased
      Assets" shall
      have the meaning set forth in Section 2.01(a) of this Agreement.





"Purchase
      Price Allocation" shall
      have the meaning set forth in Section 2.03(a).





"Purchased
      Product Lines" shall
      have the meaning set forth in the Recitals of this Agreement.





"Purchaser" shall
      have the meaning set forth in the introduction of this Agreement.




3




"Raw
      Material and Completed Manufactured Parts Inventory" shall
      have the meaning set forth in Section 2.01(a)(vii).





"Seller" shall
      have the meaning set forth in the introduction of this Agreement.





"Seller's
      Knowledge" or "Knowledge
      of Seller" or
      similar terms used in this Agreement means the actual or constructive knowledge
      of John C. Miller, any officer or director of Seller, or any employee of Seller
      with management authority.





"Spare
      Parts Inventory" shall
      have the meaning set forth in Section 2.01(a)(vi).





"Standard
      Cost" shall
      mean the carrying value of each item of inventory on the books of Seller as
      the
      same are kept and maintained in the ordinary course of business, determined
      in a
      manner consistent with Seller's past practices.





"Trade
      Names" shall
      have the meaning set forth in Section 2.01(a)(viii)





"Transaction" means
      the
      purchase and sale of the Purchased Assets pursuant to this Agreement and other
      transactions or related agreements contemplated hereby.





"Victor
      Product Line" means,
      exclusively, those items listed on Disclosure
      Schedule 3.





Article
      II





PURCHASE
      AND SALE





2.01.
      Purchase and Sale of Purchased Assets.





(a)  Upon
      the
      terms and subject to the conditions of this Agreement, at the respective
      Closings, and simultaneously with receipt by Seller of the purchase price
      described in Section 2.03, Seller shall sell, assign, transfer, convey and
      deliver, or cause to be sold, assigned, transferred, conveyed and delivered,
      to
      Purchaser, and Purchaser shall purchase from Seller, all of the assets,
      properties, goodwill and business of every kind and description and wherever
      located, whether tangible or intangible, real, personal or mixed, which are
      owned by Seller and, in any case, belonging to or used or intended to be used
      in
      the manufacture, sale or distribution of the Product Lines (the "Purchased
      Assets "),
      including the following:





(i)  the
      Purchased Product Lines;





(ii)  All
      tooling, dyes, jigs, patterns, specialized equipment necessary or used for
      the
      Product Lines ("Manufacturing Fixtures and Equipment"); for purposes of this
      Agreement specialized equipment includes without limitation that certain 20'
      foot Press Break shown on the information referred to in paragraph 3.05 of
      this
      agreement, side punching machine, roof punching machine, blower band roller,
      corrugated shear, roof edge protector bender, and all assembly line racks and
      bins;




4




(iii)  All
      patents, applications therefor and unpatented inventions applicable to any
      product within the Product Lines; all designs, drawings, blue prints, computer
      data, engineering data or studies, manufacturing data, prototypes, stampings,
      projects in progress, formulas, processes, technical information and knowhow
      related to or used in the production of any product within the Product Lines
      ("Intellectual Property");





(iv)  All
      customer lists, customer backlogs, pending orders, pending purchase contracts,
      customer files, vendor lists, purchase records, sales records or data
      (electronic or otherwise) relating to any of the products in the Product Lines
      ("Customer Lists");





(v)  Inventories
      of finished goods and work in process related to any products in the Product
      Lines as further described below ("Finished Goods Inventory");





(vi)  All
      inventories of spare parts related to any product in the Product Lines as
      further described below ("Spare Parts Inventory");





(vii)  Inventories
      of raw materials and completed manufactured parts related to products in the
      Product Lines as further described below ("Raw Material and Completed
      Manufactured Parts Inventory");





(viii)  All
      logos, trademarks, trade names, service marks, copyrights, applications for
      and
      registrations pertaining to any of the Product Lines and the marketing thereof,
      including without limitation the names Miller Pro, Victor, Hay Buddy and Badger
      ("Trade Names") provided however Purchaser's rights to use the "Badger" trade
      name shall be expressly limited to rights of use in connection with the
      production or sale of the Badger Product Line, as more particularly set forth
      in
      the Badger Intellectual Property License Agreement.;





(ix)  All
      distribution agreements with manufacturers pertaining to the Product Lines
      including without limitation such agreements with John Deere and Tonutti Spa
      ("Distribution Agreements");





(x)  All
      dealership, dealer or distributor agreements or contracts pertaining to any
      of
      the Product lines with dealers handling any of the Product Lines ("Dealer
      Agreements"),provided, Purchaser will have no repurchase obligations under
      such
      agreements with respect to sales prior to closing; and





(xi)  the
      goodwill of Seller relating to the Product Lines.





(b)  Seller
      shall retain and the Purchased Assets shall specifically exclude all assets
      of
      Seller that are not described in the foregoing paragraph 2.01(a).





2.02. Assumption
      and Exclusion of Liabilities. Purchaser
      assumes no liabilities or obligations of Seller as a result of the proposed
      transaction except as provided in Section 2.05. Any security interest, liens
      or
      encumbrances with respect to any of the assets shall be released at or prior
      to
      Closing.




5




2.03. Purchase
      Price. The
      total
      combined purchase price for the Assets to be purchased hereunder shall be the
      sum of Eight Hundred Seventy-Five Thousand Dollars ($875,000.00), plus the
      sum
      of the following amounts:





(a)  The
      amount of the Finished Goods Inventory (valued at Seller's Standard Cost) on
      hand, but the amount of Finished Goods Inventory shall not contain a greater
      number of any item than the number of such item sold in the 12 month period
      ending on July 31, 2007.





(b)  The
      amount of the Raw Materials and Completed Manufactured Parts Inventory (valued
      at Seller's Standard Cost on hand, but the amount of Raw Materials and Completed
      Manufactured Parts Inventory shall not contain a greater number of any item
      than
      the number of such item sold or used in manufacturing by Seller in the 12 month
      period ending on July 31, 2007.





(c)  The
      amount of the Spare Parts Inventory (valued at Seller's Standard Cost) on hand,
      provided however, any such Spare Parts Inventory that is used, damaged,
      otherwise not marketable as a new repair part or is in excess of a two year
      supply (based sales of such part during the 24 month period ending July 31,
      2007) shall be valued at $0.00 (all such Spare Parts Inventory that is valued
      at
      zero shall be conveyed to Purchaser along with all such inventory as shall
      be
      assigned a value greater than zero).





2.04. Allocation
      of Purchase Price. The
      allocation of the Purchase Price among the Purchased Assets shall be reflected
      on the purchase price allocation attached hereto as Exhibit
      F (the "Purchase
      Price Allocation"). Purchaser
      and Seller agree that the transactions contemplated in this Agreement shall
      he
      reported in a manner consistent with the terms of this Agreement, including
      the
      Purchase Price Allocation, and that neither of them will take any position
      inconsistent therewith in any tax return, in any refund claim, in any
      litigation, or otherwise. Seller and Purchaser agree to cooperate with the
      other
      in preparing IRS Form 8594, and to furnish the other with a copy of such
      document prepared in draft form within a reasonable period before its filing
      due
      date.





2.05  Assumption
      of Warranty Obligations. Purchaser
      will assume all of Seller's warranty obligations to customers for warranty
      claims made after the Date of Closing with respect to products included within
      the Purchased Product Lines for the repair or replacement of defective products
      under Seller's standard limited warranty, provided however, Purchaser does
      not
      assume any obligation for Product Liability or other liability for property
      damage, consequential damages or personal injury (or any other liability other
      than for the repair or replacement of defective products) arising out of
      products sold by Seller prior to Closing. The foregoing notwithstanding
      Purchaser does not assume any liability or obligation for any product recall
      with respect to products sold by Seller prior to Closing.





2.06  Payment
      of Purchase Price. The
      Purchase Price shall be paid by Purchaser in certified funds, wire transfer,
      or
      other immediately available funds at the Closing.




6




2.07.  Determination
      of Inventory, Post Closing Adjustment. No
      more
      than five (5) calendar days prior to the Closing Date, Seller shall determine
      the amount and value of the Finished Goods Inventory, the Raw Materials and
      Completed Manufactured Parts Inventory and Spare Parts Inventory and certify
      the
      amounts arid counts thereof to Purchaser prior to Closing. All such inventories
      shall be tagged with tags indicating the respective items of such inventory
      are
      "Conveyed to Art's-Way". Purchaser shall have the right to observe the
      determinations of amount and value of the various inventories called for herein,
      but no such right or exercise thereof shall constitute a defense to any
      discrepancy that may be raised by Purchaser in a Discrepancy Notice as
      hereinafter provided for. The closing shall take place based upon said amounts
      unless Purchaser shall notify Seller of a disagreement with said numbers prior
      to closing. After shipment of the Finished Goods Inventory, the Raw Materials
      and Completed Manufactured Parts Inventory and the Spare Parts Inventory to
      Purchaser, Purchaser shall notify Seller of any discrepancy in count, condition
      or valuation of such inventories actually received with the inventories used
      for
      closing (Discrepancy Notice). Seller shall refund to Purchaser the amount of
      such discrepancy set forth in the Discrepancy Notice within 5 days of receipt
      of
      same by Seller, provided however, in the event of a disagreement by Seller
      with
      the Discrepancy Notice Seller may request binding arbitration under the rules
      of
      the American Arbitration Association. During such time as any such disagreement
      shall exist, Seller shall pay the amount of the discrepancy over to an escrow
      agent mutually agreeable to the parties to be held pending resolution of the
      disagreement in the manner set forth herein.





2.08. Closing. Subject
      to the terms and conditions of this Agreement, the sale and purchase of the
      Purchased Assets shall take place on September 5, 2007, at 2:00 p.m. Central
      Time (the "Closing
      Date"), or
      at
      such alternate time and date as may be mutually agreed upon by the
      parties.





2.09. Closing
      Deliveries by Seller. At
      the
      Closing, Seller shall deliver to Purchaser:





(a)  Executed
      counterparts of each Ancillary Agreement to which Seller is a
      party;





(b)  A
      true
      and complete copy, certified by the Secretary of Seller, of the resolutions
      duly
      and validly adopted by Seller's Board of Directors evidencing its authorization
      of the execution and delivery of this Agreement and the Ancillary Agreements
      to **** which
      it
      is a party and the consummation of the transactions contemplated hereby and
      thereby;





(c)  All
      necessary third-party consents as more particularly described in Section 3.13
      of
      this Agreement; and





(d)  A
      certificate, dated as of the Closing Date and in a form reasonably acceptable
      to
      Purchaser, executed by a duly authorized officer of Seller certifying (i) that
      all conditions to Closing have been satisfied, (ii) as to the incumbency arid
      signature of the officers of Seller executing any agreements or documents in
      connection with the transactions contemplated by this Agreement and (iii) that
      all representations and warranties contained herein on the part of the Seller
      are true as of the Closing;




7




(e)  In
      the
      event any of the inventories to be transferred hereunder shall be consigned
      to a
      third party, Seller shall deliver at closing written acknowledgment of the
      person or entity having possession of the consigned goods, that Seller is the
      owner of same, that Seller has the right to remove same at any time free of
      any
      claim or interest of such person or entity;





(f)  An
      opinion of Seller's counsel in form reasonably satisfactory to attorney for
      Buyer
      giving the opinions that





(i)  Seller
      is
      a corporation duly formed and in existence under the laws of the State of
      Wisconsin.





(ii)  Seller
      has full corporate power and authority to make, execute, deliver and perform
      its
      obligations under this Agreement.





(iii)  Seller
      has authorized the execution, delivery and performance of its obligations under
      this agreement and the documents related thereto by all necessary company action
      on its part and has duly executed and delivered this agreement and the documents
      related thereto.





(e)  All
      such
      other instruments and documents as Purchaser or its counsel may reasonably
      request to transfer effectively to Purchaser all of Seller's right, title and
      interest in and to the Purchased Assets as provided by this
      Agreement.




2.10.  Closing
      Deliveries by Purchaser. At
      the
      Closing, Purchaser shall deliver to Seller:





(a)  The
      Purchase Price in certified funds, wire transfer or other immediately available
      funds;





(b)  Executed
      counterparts of each Ancillary Agreement to which Purchaser is a party;
      and





(c)  A
      true
      and complete copy of the resolutions duly and validly adopted by Purchaser's
      Board of Directors evidencing its authorization of the execution and delivery
      of
      this Agreement and the Ancillary Agreements to which it is a party and the
      consummation of the transactions contemplated hereby and thereby.





2.11  Sales
      and Transfer Taxes .
      Seller
      shall be responsible for and agrees to pay when due all sales, use and transfer
      taxes imposed by the United States or the State of Wisconsin arising out of
      the
      transfer of the Purchased Assets by Seller and the other transactions
      contemplated hereunder.




8




Article
      III





REPRESENTATIONS
      AND WARRANTIES


OF
      SELLER





As
      an
      inducement to Purchaser to enter into this Agreement, Seller hereby represents
      and warrants to Purchaser now and as of Closing, as follows:





3.01.  Organization,
      Authority and Qualification of Seller. Seller
      is
      a corporation duly organized, validly existing and in good standing under the
      laws of the State of Wisconsin and has all necessary power and authority to
      enter into this Agreement and the Ancillary Agreements, to carry out its
      obligations hereunder and thereunder, and to consummate the transactions
      contemplated hereby and thereby.





3.02.  No
      Conflict. Neither
      the execution and delivery of this Agreement, nor the consummation or
      performance of any obligation of Seller hereunder will, directly or indirectly,
      with or without notice or the lapse of time, (i) violate or conflict with.
      Seller's articles of incorporation or bylaws (or other organizational documents)
      or any agreement or any resolution of Seller's shareholders or directors, (ii)
      violate or conflict with any law or regulation or the terms or conditions of
      any
      permit, certificate or other authorization to which Seller is subject or (iii)
      require Seller to obtain or make any waiver, consent, action, approval, or
      authorization of, or registration, declaration, notice of filing with, any
      private non-governmental third party or any governmental authority,





3.03  Binding
      Effect. This
      Agreement constitutes the legal, valid and binding obligation of Seller,
      enforceable against it in accordance with its terms. Upon the execution and
      delivery by Seller of this Agreement and each other instrument to be executed
      and delivered at the Closing by Seller pursuant to this Agreement (collectively,
      the "Seller's
      Closing Documents"), each
      of
      Seller's Closing Documents will constitute the legal, valid and binding
      obligation of Seller, enforceable against it in accordance with its
      terms.





3.04.  Title
      to Purchased Assets; Location;
      Seller shall have and shall transfer to Purchaser at Closing good and marketable
      title to all the Purchased Assets, free and clear of any claim, lien, liability
      or encumbrance whatsoever. All of the Purchased assets are located at the
      Seller's plant facility in St. Nazianz, Wisconsin except as set forth on Schedule
      3.04.





3.04.  Brokers .
      No
      broker, finder or investment banker is entitled to any brokerage, finder's
      or
      other fee or commission in connection with the transactions contemplated by
      this
      Agreement or the Ancillary Agreements based upon arrangements made by or on
      behalf of Seller.





3.05  Financial
      and Product Information .
      Seller
      has delivered to Purchaser an information package a copy of which is attached
      hereto as Schedule
      3.05 concerning
      the Purchased Product Lines including the historical sales and gross margins
      experienced by Seller with respect to the Purchased Product Lines all of which
      information is substantially correct and accurately reflects the matters
      described therein.





3.06  Standard
      Cost. Standard
      Cost as used by Seller in the compiling the financial information set forth
      in
      Schedule 3.05 above, or that may be used in the valuation of any of the
      Purchased Assets under this agreement, is computed in accordance with Generally
      Accepted Accounting Principals, consistently applied.




9




3.07  Absence
      of Certain Events. Since
      January 1, 2007, the business of Seller with respect to the Product Lines has
      been operated only in the ordinary and normal course of business and in
      particular:





(a)  There
      has
      been no material adverse change in the Purchased Assets or in the financial
      condition, results of operations, prospects or condition (financial or
      otherwise), of Seller with respect to the Product Lines or the Purchased
      Assets;





(b)  There
      has
      been no damage, destruction or loss adversely affecting the Purchased Assets
      or
      the Purchased Product Lines; and





(c)  No
      significant customer, supplier, dealer or distributor with respect the Purchased
      Product Lines or a part thereof has ceased or given notice that it was going
      to
      cease or curtail its dealings with the Seller with respect to any of the Product
      Lines.





3.08. Intellectual
          Property.





(a)  Disclosure
      Schedule 4 sets
      forth a complete and accurate list of the Intellectual Property being assigned
      from Seller to Purchaser pursuant to the Intellectual Property
      Assignment.





(b)  Seller
      owns and possesses, free and clear of all security interests, encumbrances
      or
      liens, all right, title and interest in or to, or has the right to use pursuant
      to a License Agreement or otherwise, all the Intellectual Property. No
      Government entity has rendered any holding, decision, or judgment that would
      limit, cancel or question the validity of any of Intellectual
      Property.





(c)
      No
      claim of infringement has been made or asserted by or against Seller relating
      to
      any patent, trademark, trade name or copyright included in the Purchased Assets
      and no claim of misappropriation or misuse of any invention, trade secret or
      other proprietary rights has been made or asserted by or against Seller with
      respect to the foregoing, and to the knowledge of Seiler, no valid basis for
      any
      such claim or allegation exists.





(d)
      That Disclosure
      Schedule 4 sets
      forth all Intellectual Property applicable or pertaining to any of the Product
      Lines and/or Purchased Assets and is all Intellectual Property needed for the
      production and marketing of any products included in the Product Lines without
      payment of any royalty, license or other fee whatsoever, and free of any claim
      of infringement.





3.09.  Compliance
      with Laws. The
      methods and means employed by it in the operation of its business and its
      ownership of the Purchased Assets are in compliance with all applicable federal,
      state and local laws, regulations or orders of any court, or federal, state,
      municipal or other governmental department, commission, board, agency or other
      instrumentality.




10




3.10.  Litigation
      and Proceedings. There
      is
      no action, suit or proceeding pending or, to the Knowledge of the Seller,
      threatened against the Seller, that would prevent the consummation of the
      transactions contemplated by this Agreement. There is no suit, action or legal,
      administrative, arbitrative or other proceeding pending, nor does Seller have
      written notice or actual notice of any threatened suit, action or legal,
      administrative, arbitrative or other proceeding in connection with the Purchased
      Assets; and to Seller's Knowledge, Seller is not under governmental
      investigation with respect to any violation of any law or administrative
      regulation, federal, local or state, with respect to its design, manufacture
      or
      sale of any of the items sold and Seller has no Knowledge of any existing facts
      or circumstances which would constitute a basis for such action, proceeding,
      investigation, suit or arbitration.





3.11.  Taxes. Seller
      has duly filed or caused to be filed all federal, state and local tax returns,
      reports and declarations required to be filed by it, and has paid or made
      adequate provisions to be filed by it, and has paid or made adequate provisions
      on the books and records of Seller for the payment of all Taxes (as hereinafter
      defined) due in respect thereof. As used herein, "Taxes" shall mean all taxes,
      fees, levies or other assessments, including but not limited to income, excise,
      property, sales, social security and unemployment compensation taxes imposed
      by
      the United States, any state, county or local government, and any interest
      or
      penalty relating to such taxes or other assessments, in each case that relate
      to
      the Purchased Assets or could become a lien thereon..





3.12.  Condition
      of Purchased Assets. All
      of
      the Purchased Assets shall be, as of the Closing Date, in good working
      condition. The foregoing notwithstanding the 20' press brake referred to in
      Section 2.01(a)(ii) of this agreement is sold "as is" "where is".





3.13.  Third-Party
      Agreements.  Disclosure
      Schedule 5 sets
      forth a complete and accurate list and brief description of any arrangements
      or
      agreements with third-parties concerning the Purchased Assets, which (i)
      necessitate any such third-party's consent to the consummation of the
      transactions contemplated by this Agreement, (ii) require payment of any sums
      by
      Purchaser upon sales of Inventory or (iii) are related in **** any
      manner to the design, manufacture, sale or distribution of any product included
      as a part of the Purchased Product Lines.





3.14 Reliance. The
      representations and warranties of Seller made in this Article III are made
      by
      Seller with the knowledge and expectation that Purchaser is placing complete
      reliance thereon in entering into, and performing each of their obligations
      under this Agreement.




Article
      IV





REPRESENTATIONS
      AND WARRANTIES


OF
      PURCHASER





As
      an
      inducement to Seller to enter into this Agreement, Purchaser hereby represents
      and warrants to Seller as follows:


11


4.01 Organization
      and Authority of Purchaser .
      Purchaser is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware and has all necessary corporate power
      and authority to enter into this Agreement and the Ancillary Agreements and
      to
      carry out its obligations hereunder and thereunder and to consummate the
      transactions contemplated hereby and thereby.





4.02.  No
      Conflict. The
      execution, delivery and performance of this Agreement and the Ancillary
      Agreements by Purchaser does not and will not violate, conflict with or result
      in the breach of any provision of its articles of incorporation or bylaws (or
      other organizational documents similar thereto).





4.03.  Brokers .
      No
      broker, finder or investment banker is entitled to any brokerage, finder's
      or
      other fee or commission in connection with the transactions contemplated by
      this
      Agreement based upon arrangements made by or on behalf of
      Purchaser.





Article
      V





ADDITIONAL
      AGREEMENTS AND ACKNOWLEDGMENTS





5.01.  Bulk
      Sales Compliance. Purchaser
      hereby waives Seller's compliance with the requirements of any bulk sales law
      that may apply with respect to the proposed transaction and, correspondingly,
      Seller and Miller, jointly and severally agree to indemnify Purchaser with
      respect to any liability incurred by Purchaser on account of non-compliance
      with
      any applicable bulk sales law including without limitation Wis. Stats, Chapter
      406.





5.02. Survival
      of Representations and Warranties. Each
      of
      the representations and warranties of each of the parties of this Agreement
      shall be deemed to be made by each party again at and as of the Closing (or,
      where the representation or warranty by its terms is expressly made as of the
      date of this Agreement or any other specified date, then as of the date of
      this
      Agreement or other specified date) and shall survive the closing of this
      transaction. Any investigation made at any time by Purchaser or Purchaser's
      representatives shall not constitute a waiver of Purchaser's rights under any
      representation or warranty or any indemnity set forth in this
      Agreement





5.03.  Post-Closing
      Storage and Loading. Seller
      agrees that, following the Closing, Purchaser may store the Inventory at
      Seller's facility in St-Nazianz, WI. Further, Seller agrees that, upon
      Purchaser's request, Seller shall, at Seller's expense, load Finished Goods
      Inventory for shipment to customers or to Purchaser. The Inventory will be
      shipped F.O.B. Seller's facility, St-Nazianz, WI. Storage of Inventory at
      Seller's premises shall be at no cost to Purchaser. All Manufacturing Fixtures
      and Equipment And Spare Parts Inventory shall immediately after closing, be
      loaded for shipment by Seller at no cost to Purchaser, and will be shipped
      to
      Purchaser F.O.B. Seller's facility, St-Nazianz, WI.




12




5.04.  Post-Closing
      Startup Assistance. Following
      the Closing, Seller shall provide Purchaser access to such of Seller's employees
      with the necessary skills as may be reasonably necessary to assist Purchaser
      in
      establishing its operations with respect to the Purchased Product Lines. The
      services shall run over a three week period during which period Seller shall
      furnish one person for the entire first week, two persons for the entire second
      week and one person for the entire third week, said three week period to
      commence when requested by Purchaser upon 7 days notice by Purchaser to Seller.
      Seller shall also provide such assistance as may be reasonably needed to load
      Seller's computer data related to the Product Lines onto Purchaser's computer
      systems. All of such assistance shall be furnished at no cost to Purchaser
      except that Purchaser shall pay the actual travel costs and expenses for
      Seller's employees traveling to Purchaser's facility.





5.05.  Collection
      of Accounts Receivable. Following
      the Closing, Purchaser and Seller shall cooperate in the collection of any
      outstanding balances due from customers that purchased products in the Purchased
      Product Lines. Purchaser shall have full power and authority to collect for
      its
      account all receivables, and to endorse, without recourse to the Seller, in
      the
      name of the Seller, any checks or other instruments of payment received on
      account of payment of any such receivables; provided, further, that any payments
      received by either Purchaser or Seller shall be applied to the particular
      invoice designated by the customer paying such invoice and shall promptly be
      delivered to the party owning such receivable.





5.06.  Further
      Action. Each
      of
      the parties hereto shall use all reasonable efforts to take or cause to be
      taken
      all appropriate action, do or cause to be done all things necessary, proper
      or
      advisable under applicable Law and to execute and deliver such documents and
      other papers as may be required to carry out the provisions of this Agreement
      and the Ancillary Agreements to which it is a party and consummate and make
      effective the transactions contemplated hereby and thereby.





5.07  Regular
      Course of Business; Continuation of Ordering. From
      the
      date hereof until the Closing Date, Seller will operate its business pertaining
      to the Purchased Product Lines in the ordinary course, diligently and in good
      faith, consistent with past management practices; will maintain (except for
      expiration due to lapse of time) all contracts pertaining to the Purchased
      Product Lines in effect without change except as expressly provided herein;
      will
      comply with the provisions of all Laws, applicable to the conduct of its
      business pertaining to the Purchased Product Lines; will not engage in any
      significant or unusual transaction not in the ordinary course of business that
      in any manner pertains to the Purchased Product Lines; From the date hereof
      until the Closing Date, Seller will not create or permit to become effective
      any
      mortgage, pledge, lien, encumbrance or charge of any kind upon its assets
      pertaining to the Purchased Product Lines other than in the ordinary course
      of
      business. The parties acknowledge that certain of the materials used in the
      manufacturing process have a long order lead time Prior to Closing Seller shall
      continue ordering said items as has been its past practice (notifying the
      Purchaser of each such order) and upon closing such orders (and the obligation
      to pay for same) shall be assigned to Purchaser.




13




5.08  Access
      to Information and. Assets. Seller
      shall permit Purchaser and Purchaser's authorized employees, agents,
      accountants, legal counsel and other representatives to have access to the
      books, records, employees, counsel, accountants, engineers and other
      representatives of Seller at all times reasonably requested by Purchaser for
      the
      purpose of conducting an investigation of the Purchased Assets and the accuracy
      of the information furnished by Seller to Purchaser. Seller shall have the
      right
      to have access to inspect the Purchased Assets. In the event the purchase
      transaction subject to this Agreement does not close for any reason Purchaser
      as
      well as its authorized agents, employees, counsel, accountants, legal counsel,
      and other representatives shall immediately return to Seller any and all copies
      of documents as well as data and other information obtained pursuant to this
      provision and they shall not publish, utilize, or cause the same to be utilized
      directly or indirectly in Purchaser's or any other third party's
      business.





5.09  Seller
      Fulfillment of Conditions. Seller
      will take all commercially reasonable steps necessary or desirable and proceed
      diligently and in good faith to satisfy each condition to the obligations of
      Purchaser contained in this Agreement and will not take or fail to take any
      action that could reasonably be expected to result in the nonfulfillment of
      any
      such condition,





5.10  Purchaser
      Fulfillment of Conditions. Purchaser will take all commercially reasonable
      steps necessary or desirable and proceed diligently and in good faith to satisfy
      each condition to the obligations of Seller contained in this Agreement and
      will
      not take or fail to take any action that could reasonably be expected to result
      in the nonfulfillment of any such condition.





Article
      VI





**CONDITIONS
      TO CLOSING**





6.01  Conditions
      Precedent to Obligations of Seller .
      The
      obligation of Seller to effect the transactions contemplated by this Agreement
      shall be subject to the satisfaction at or prior to the Closing of the following
      conditions (compliance with which or the occurrence of which may be waived
      in
      whole or in part in a writing executed by Seller):





(a)  Purchaser
      shall have performed in all material respects its obligations under this
      Agreement required to be performed by it at or prior to the
      Closing;





(b)  All
      of
      the representations and warranties of Purchaser contained in this Agreement
      shall have been true and correct in all material respects on the date hereof
      and
      shall be true and correct in all material respects as of the Closing Date as
      if
      such representations and warranties were made on and as of that
      date;





(c)  As
      of the
      Closing Date, no litigation, proceeding, investigation or inquiry shall be
      pending or threatened seeking to enjoin or prevent the consummation of, or
      to
      obtain damages or other material relief by reason of, the transactions
      contemplated by this Agreement;





(d)  Purchaser
      shall have paid all amounts, delivered all items and satisfied all obligations
      required to be paid, delivered or satisfied by Purchaser pursuant to paragraph
      2.10 of this agreement.




14




6.01 Conditions
      Precedent to Obligation of Purchaser. The
      obligation of Purchaser to effect the transactions contemplated by this
      Agreement shall be subject to the satisfaction at or prior to the Closing of
      the
      following conditions (compliance with which or the occurrence of which may
      be
      waived in whole or in part in a writing executed by Purchaser):





(a)  Seller
      shall have performed in all material respects the obligations under this
      Agreement required to be performed by it at or prior to the
      Closing;





(b)  All
      of
      the representations and warranties of Seller contained in this Agreement shall
      have been true and correct in all material respects on the date hereof and
      shall
      be true and correct in all material respects as of the Closing Date as if such
      representations and warranties were made on and as of that date;





(c)  As
      of the
      Closing Date, no litigation, proceeding, investigation or inquiry shall be
      pending or threatened seeking to enjoin or prevent the consummation of, or
      to
      obtain damages or other material relief by reason of the transactions
      contemplated by this Agreement;





(d)  Seller
      shall have delivered all items and satisfied all obligations required to be
      delivered or satisfied by Seller pursuant to paragraph 2.09 of this agreement;
      and





(e)  The
      execution of this agreement arid the closing of the transaction called for
      herein shall have been duly approved by the board of directors of
      Seller.





Article
      VII





**INDEMNIFICATION**





7.01  Seller's
      Indemnity.  Subject
      to the provisions of this Article VII, Seller from and after the Closing Date
      agrees to, indemnify and hold Purchaser and its directors, officers, agents,
      employees, representatives, successors and assigns, harmless from and against
      any and all damage, loss, cost, obligation, claims, demands, assessments,
      judgments or liability (whether based on contract, tort, product liability,
      strict liability or otherwise), including taxes, and all expenses (including
      interest, penalties and attorneys' and accountants' fees and disbursements)
      (collectively "Damages") incurred in litigation or otherwise, and any
      investigation relating thereto, by any of the above-named persons, directly
      or
      indirectly, resulting from or in connection with:





(a)  Any
      misrepresentation, breach of warranty or failure to perform any covenant or
      agreement made or undertaken by Seller in this Agreement or in any other
      agreement, certificate, schedule, exhibit or writing delivered to Purchaser
      pursuant to this Agreement;





(b)  All
      debts, liabilities and obligations of Seller of whatever kind and nature;





15




(c)  All
      product liability claims arising out of any product manufactured or sold by
      Seller;





(d)  Any
      failure to comply with any and all requirements for notice to creditors or
      similar requirements imposed under any applicable bulk sales laws to the extent
      applicable to the transactions contemplated by this Agreement. and





(e)  Any
      action, suit, proceeding or claim incident to any of the foregoing.





7.02  Purchaser's
      Indemnity .
      Purchaser from and after the Closing Date, shall indemnify and hold Seller
      harmless from and against any Damages incurred by Seller resulting from or
      in
      connection with:





(a)  Any
      misrepresentation, breach of warranty or failure to perform any covenant or
      agreement made or undertaken by Purchaser in this Agreement or in any other
      agreement, certificates, schedule, exhibit or writing delivered by Purchaser
      to
      Seller pursuant to this Agreement;





(b)  Any
      debts, liabilities and obligations of Purchaser of whatever kind and nature;
      and





(c)  Any
      action, suit, proceeding or claim incident to any of the foregoing.





7.03  Miller's
      Indemnity. Miller
      from and after the Closing Date agrees to, indemnify and hold Purchaser harmless
      from and against any and all damage, loss, cost, obligation, claims, demands,
      assessments, judgments or liability, and all expenses (including interest,
      penalties and attorneys' and accountants' fees and disbursements) (collectively
      "Damages") arising from any failure to comply with any and all requirements
      for
      notice to creditors or similar requirements imposed under any applicable bulk
      sales laws including without limitation Wis. Stat. Chapter 406, to the extent
      applicable to the transactions contemplated by this Agreement





7.04  Procedure .
      All
      claims for indemnification by a party under this Article VII (the party claiming
      indemnification and the party against whom such claims are asserted being
      hereinafter called the "Indemnified Party" and the "indemnifying Party,"
      respectively) shall he asserted and resolved as follows:





16




(a)  In
      the
      event that any claim or demand for which an Indemnifying Party would
      be
      liable to an Indemnified Party hereunder is asserted against or sought to be collected
      from such Indemnified Party by a third party, such Indemnified Party shall
      with reasonable
      promptness give notice (the ''Claim Notice") to the Indemnifying Party of such
      claim or demand, specifying the nature of and specific basis for such claim
      or demand
      and the amount or the estimated amount thereof to the extent then feasible (which
      estimate shall not be conclusive of the final amount of such claim and demand).
      The Indemnifying Party shall not be obligated to indemnify the Indemnified
      Party
      under this
      Agreement with respect to any such claim or demand if the Indemnified Party
      fails to notify
      the Indemnifying Party thereof in accordance with the provisions of this Agreement,
      and, as a result of such failure, the Indemnifying Party's ability to defend against
      the claim or demand is materially prejudiced. The Indemnifying Party shall
      have ten
      (10)
      days from the delivery or mailing of the Claim Notice (the "Notice Period")
      to notify
      the Indemnified Party (i) whether or not it disputes the liability of the Indemnifying
      Party to the Indemnified Party hereunder with respect to such claim or demand,
      and (ii) whether or not it desires, at the cost and expense of the Indemnifying Party,
      to
      defend the Indemnified Party against such claim or demand; provided, however, that
      any
      Indemnified Party is hereby authorized, but is not obligated, prior to and
      during the
      Notice Period, to file any motion, answer or other pleading that it shall deem necessary
      or appropriate to protect its interests or those of the Indemnifying Party.
      If
      the indemnifying
      Party notifies the Indemnified Party within the Notice Period that it desires to
      defend
      the Indemnified Party against such claim or demand, the Indemnifying Party shall,
      subject to the last sentence of this paragraph, have the right to control the
      defense against
      the claim by all appropriate proceedings and any settlement negotiations, provided
      that to the satisfaction of the Indemnified Party, the Indemnifying Party shall secure
      the Indemnified. Party against such contested claims by posting a bond or otherwise.
      If the Indemnified Party desires to participate in, but not control, any such defense
      or settlement, it may do so at its sole cost and expense. If the Indemnifying
      Party fails
      to
      respond to the Indemnified Party within the Notice Period, elects not to defend
      the Indemnified
      Party, or after electing to defend fails to commence or reasonably pursue such
      defense, then the Indemnified Party shall have the right, but not the
      obligation, to undertake or continue the defense of, and to compromise or settle
      (exercising reasonable business
      judgment), the claim or other matter all on behalf, for the account and at
      the
      risk of the indemnifying Party. Notwithstanding the foregoing, if the basis
      of
      the proceeding relates
      to a condition of operations which existed or were conducted both prior to
      and after
      the
      Closing Date or if the Indemnified Party would be otherwise adversely affected as
      a
      result of any adverse decision of such proceeding, each party shall have the
      same right
      to
      participate at its own expense and at its own risk in the proceeding without
      either party
      having the right of control.





(b)  If
      requested by the Indemnifying Party, the Indemnified Party agrees, at the
      Indemnifying Party's expense, to cooperate with the Indemnifying Party and
      its
      counsel in contesting any claim or demand which the Indemnifying Party elects
      to contest,
      or, if appropriate and related to the claim in question, in making any counterclaim
      against the person asserting the third party claim or demand, or any
      cross-complaint against any person. No claim as to which indemnification is
      sought under this Agreement
      may be settled without the consent of the Indemnifying Party.





(c)  If
      any
      Indemnified Party should have a claim against the Indemnifying Party hereunder
      which does not involve a claim or demand being asserted against or sought
      to
      be collected from it by a third party, the Indemnified Party shall send a Claim Notice
      with respect to such claim to the Indemnifying Party. If the Indemnifying Party disputes
      such claim, such dispute shall be resolved by litigation in an appropriate
      court
      of competent jurisdiction.





17




7.05  Costs. If
      any
      legal action or other proceeding is brought for the enforcement or
      interpretation of any of the rights or provisions of this Agreement (including
      the indemnification provision), or because of an alleged dispute, breach,
      default or misrepresentation in connection with any of the provisions of this
      Agreement, the successful or prevailing party shall be entitled to recover
      reasonable attorneys' fees and all other costs and expenses incurred in that
      action or proceeding, in addition to any other relief to which it may be
      entitled.





7.06  Limitation
      on Indemnities. Neither
      party to this agreement shall assert a right of indemnity under this Article
      VII
      unless and until the cumulative claims of the party seeking indemnity shall
      exceed $5,000.00. Neither party shall be entitled to indemnity under this
      Article VII with respect to any claim for which the party seeking indemnity
      shall have been fully compensated by applicable insurance.





Article
      VIII





GENERAL
      PROVISIONS





8.01  Expenses. Except
      as
      otherwise specified in this Agreement, all costs and expenses, including fees
      and disbursements of counsel, financial advisors and accountants, incurred
      in
      connection with this Agreement and the transactions contemplated by this
      Agreement shall be paid by the party incurring such costs and expenses, whether
      or not the Closing shall have occurred.





8.02.  Notices. All
      notices, requests, claims, demands and other communications hereunder shall
      be
      in writing and shall be given or made (and shall be deemed to have been duly
      given or made upon receipt) by delivery in person, by a recognized overnight
      courier service, by facsimile or registered or certified mail (postage prepaid,
      return receipt requested) to the respective parties hereto at the following
      addresses (or at such other address for a party as shall be specified in a
      notice given in accordance with this Section 8.02):





If
                to Seller:
            Miller-St.
                Nazianz, Inc.511
                East Main StreetP.O.
                Box 127St.
                Nazianz, Wisconsin 54232Attention:
                John C. MillerWith
                Copy to:
            Whyte
                Hirschboeck Dudek S.C.555
                East Wells StreetSuite
                1900Milwaukee,
                Wisconsin 53202-3819Attention:
                James R. Lowe




18




If
                to Purchaser:
            Art’s
                Way Manufacturing Co., Inc.P.O.
                Box 288 – 5556 Hwy. 9Armstrong,
                Iowa 50504Attention:
                J.Ward McConnell, Jr.With
                a copy to Purchaser’s counsel:Wooten
                & ColeyP.O.
                Box 1555Kinston,
                NC 28503Attention:
                Everette Wooten





8.03.  Severability. If
      any
      term or other provision of this Agreement is invalid, illegal or incapable
      of
      being enforced by any Law or public policy, all other terms and provisions
      of
      this Agreement shall nevertheless remain in full force and effect for so long
      as
      the economic or legal substance of the transactions contemplated hereby is
      not
      affected in any manner materially adverse to either party hereto. Upon such
      determination that any term or other provision is invalid, illegal or incapable
      of being enforced, the parties hereto shall negotiate in good faith to modify
      this Agreement so as to effect the original intent of the parties as closely
      as
      possible in an acceptable manner in order that the transactions contemplated
      hereby are consummated as originally contemplated to the greatest extent
      possible.





8.04.  Entire
      Agreement. This
      Agreement and the Ancillary Agreements constitute the entire agreement of the
      parties hereto with respect to the subject matter hereof and thereof and
      supersede all prior agreements and undertakings, both written and oral, between
      Seller and Purchaser with respect to the subject matter hereof and
      thereof.





8.05.  Assignment. This
      Agreement may not be assigned by operation of law or otherwise without the
      express written consent of Seller and Purchaser (which consent may be granted
      or
      withheld in the sole discretion of Seller or Purchaser).





8.06.  Amendment. This
      Agreement may only be amended by mutual, written consent of both Purchaser
      and
      Seller.





8.07.  No
      Third Party Beneficiaries. This
      Agreement shall be binding upon and inure solely to the benefit of the parties
      hereto and their respective successors and permitted assigns, nothing herein,
      express or implied, is intended to or shall confer upon any other
      person.




19




8.08.  Counterparts. This
      Agreement may be executed and delivered (including by facsimile or PDF
      transmission) in one or more counterparts, and by the different parties hereto
      in separate counterparts, each of which when executed shall be deemed to be
      an
      original, but all of which taken together shall constitute one and the same
      agreement.




*[Signature
      page* *,* *follows]*




20




IN
      WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be executed
      by their respective officers thereunto duly authorized and Miller has hereunto
      set his hand
      adopted as his seal the typed word "Seal" appearing next to his name, all,
      done
      this the day and
      year
      first above written.





MILLER-ST.
                NAZIANZ, INC.By:
            /s/
                John C. MillerName:
                John C. MillerTitle:
                PresidentART’S
                WAY MANUFACTURING CO., INC.By:
            /s/
                J. Ward McConnell, Jr.Name:
                J. Ward McConnell, Jr.Title:
                Chairman/s/
                John C.
                Miller                                               
                           
                  (SEAL)John
                C. Miller, Individually




21




**EXHIBIT
      A — BADGER INTELLECTUAL PROPERTY LICENSE AGREEMENT**





Document
      is attached.




22


**BADGER
      INTELLECTUAL PROPERTY LICENSE AGREEMENT**





This
      Trademark License Agreement (the **"Agreement"),** dated
      and
      effective as of the 5 th day
      of
      September, 2007 (the " **Effective**  **Date"),** by
      and
      between MILLER-ST. NAZIANZ, INC., a Wisconsin corporation ( **"Licensor")** and
      ART'S
      WAY MANUFACTURING CO., INC., a Delaware corporation (" **Licensee** ").





WHEREAS,
      Licensor and Licensee have entered into an Asset Purchase Agreement, dated
      as of
      September 5, 2007 (the **"Purchase
      Agreement** ")
      pursuant to which Licensor agreed to sell to Licensee, and Licensee agreed
      to
      purchase from. Licensor the Purchased Assets (as defined in the Purchase
      Agreement), as more particularly set forth in the Purchase
      Agreement;





WHEREAS,
      Licensor owns certain rights to the BADGER trade name and mark **("Mark")** in **** connection
      with the production or sale of the Badger Product Line (as that term is defined
      in the Purchase Agreement) as well as other goods and services, registrations
      with respect to the Mark are described in the attached **"Exhibit
      A";**





WHEREAS,
      the Badger Product Line consists of the products described on the attached **"Exhibit
      B";** and





WHEREAS,
      Licenser and Licensee wish to enter into an agreement to reflect the terms
      of
      the Purchase Agreement whereby Licensee will be a licensee of the Mark in
      connection with the production or sale of the Badger Product Line.





NOW,
      THEREFORE, in consideration of the mutual promises and covenants made herein,
      and for other good and valuable consideration, the receipt and sufficiency
      of
      which are hereby acknowledged, the parties agree as follows:


1.
            *Definitions.*Capitalized
                  terms used herein but not otherwise defined herein have the meaning
                  set
                  forth in the Purchase Agreement.  2.
              *Grant
                  of License.*Licensor
                  grants to Licensee a royalty-free, fully paid-up and worldwide
                  license,
                  without the right to sublicense, to use the Mark only in connection
                  with
                  the sale or production of the Badger Product Line as set forth
                  herein. The
                  License granted herein shall be exclusive with respect to the products
                  comprising the Badger Product Line or products of the same type
                  or use as
                  the products comprising the Badger Product Line and Licensor shall
                  not use
                  or license the use of the Mark in connection with products comprising
                  the
                  Badger Product Line or products of the same type or use as the
                  products
                  comprising the Badger Product Line. The foregoing notwithstanding,
                  Licensor retains the right to use or license the use of the Mark
                  in
                  connection with products not of the same type and use as those
                  contained
                  in the Badger Product Line, and, in particular, Licensor retains
                  the
                  exclusive right to use or license the Mark in connection with Farmstead
                  Products Line. "Farmstead Products Line" consists of farming equipment
                  attached to, installed in or installed under farm buildings and
                  are
                  further described on the attached**“Exhibit
                  C”.**


23




3.
            *Use
                Restriction.*Licensee
                shall use the Mark only on goods included in the Badger Product Line
                and
                upgrades and improvements to and variations of goods included therein.
                Licensee shall not use the Mark on any other goods or in relation
                to any
                services relating to goods not included in the Badger Product Line.
                Licensee shall not use the Mark on any goods comprising or services
                relating to the Farmstead Product Line. Licensee shall not modify
                or amend
                the Mark in any way, nor shall Licensee use any confusingly similar
                mark
                or any derivative of the Mark on or in connection with the Badger
                Product
                Line or any other goods.





4.
            *Ownership
                of the Mark.*Licensee
                acknowledges that, as between Licensor and Licensee, Licensor owns
                all
                right, title and interest in and to the Mark. All use of the Mark
                by
                Licensee shall inure to the benefit of Licensor. Nothing in this
                Agreement
                shall give Licensee any right, title or interest in or to the Mark
                other
                than the right to use the Mark in accordance with this Agreement.
                Licensee
                shall neither attack the validity of the license granted herein nor
                will
                it at any time do or cause to be done any act or thing contesting
                or in
                any way impairing or intending to impair any part of Licensor's right,
                title and interest in the Mark. Licensor warrants to Licensee that
                it is
                the owner of the Mark, has the right to license the rights herein
                described, and that use of the Mark by the Licensee in connection
                with
                products included in the Badger Product Line will not infringe upon
                the
                rights of others, provided however, such warranty shall not extend
                to
                claims of infringement arising out of any modification or improvement
                made
                by Licensee to any product in the Badger Product Line or to any use
                of the
                Mark by Licensee not licensed
                hereunder.





5.
            *Quality
                Assurances.*Licensee
                and Licensor hereby each covenants with the other that the nature
                and
                quality of all products produced or sold by Licensee or Licensor
                under the
                Mark as well as any advertising and promotional materials relating
                to the
                same, shall he of at least the same quality as that offered or provided
                by
                Licensor under the Mark immediately prior to the Effective
                Date.





6.
            *Quality
                Standards.*Licensee
                acknowledges that, based upon its own investigation and analysis,
                it is
                familiar with the goods comprising the Badger Product Line and the
                quality
                standards of such goods employed by Licensor immediately prior to
                the
                Effective Date, Neither Licensee nor Licensor shall depart from the
                standard of quality established by this paragraph in any material
                respect
                without the other party's prior written consent. On an annual basis
                and
                after providing written notice, Licensor and Licensee shall each
                have the
                right to inspect all uses of the Mark by the other and the products
                bearing the Mark produced by Licensee to confirm that use of the
                Mark by
                the other conforms to the quality standards called for herein. Each
                party
                shall cooperate with the other in exercising the rights set forth
                in this
                paragraph.




24




7.
            *Term
                and Termination.*This
                Agreement shall continue in full force and effect until Licensee
                ceases to
                manufacture or sell any goods comprising the Badger Product Line
                for a
                period of two (2) years, at which time this Agreement and the license
                hereunder shall terminate. If Licensee defaults in the performance
                or
                obligations of any of the terms of this Agreement, Licensor shall
                notify
                the Licensee in writing. If the default is not cured within sixty
                (60)
                days after the delivery of such written notice, Licensor shall have
                the
                right to terminate this Agreement and the license hereunder upon
                written
                notice. Upon termination of this Agreement, all rights and privileges
                of
                Licensee hereunder shall terminate, and Licensee shall not use the
                Mark in
                any way or for any reason and shall destroy all materials and signage
                bearing or using the Mark. During the term of this agreement Licensor
                shall make all filings and take such other actions as are necessary
                to
                keep Licensor's rights with respect to the Mark current and in
                effect.





8.
            *Infringement
                Proceedings.*Licensee
                shall promptly notify Licensor in writing of any unauthorized use
                of the
                Licensed Marks by third parties as it comes to Licensee's attention.
                Licensor shall have the right and discretion to bring infringement,
                unfair
                competition or other proceedings or actions involving the Mark against
                such third parties. Licensor shall bear the legal costs and fees
                in such
                infringement, unfair competition or other proceeding or action. In
                the
                event such unauthorized use shall involve products like or similar
                to the
                products contained in the Badger Product Line, and if Licensor does
                not
                take action to enforce the Licensor's rights to the Mark (and/or
                Licensee's right hereunder) Licensee may at its expense bring such
                infringement, unfair competition or other proceeding or action as
                may be
                appropriate to enforce its rights with respect to the Mark and the
                rights
                licensed under this agreement.





9.
            *Indemnification.*Licensee
                shall indemnify, defend and hold harmless Licensor from and against
                any
                and all Claims asserted against, resulting to, imposed upon or incurred
                by
                Licensor by any reason of, arising out of or resulting from the breach
                by
                Licensee of any of its obligations under this Agreement, the use
                by
                Licensee of the Mark under this Agreement (except for claims for
                infringement not arising out of any modification or improvement made
                by
                Licensee to any product in the Badger Product Line or to any use
                of the
                Mary by licensee not licensed hereunder), or any alleged wrong or
                defect
                in the goods or services Licensee provides, manufactures, sells,
                offers or
                distributes. Licensor shall indemnify, defend and hold harmless Licensee
                from and against any and all Claims asserted against, resulting to,
                imposed upon or incurred by Licensee by any reason of, arising out
                of or
                resulting from the breach by Licensor of any of its obligations under
                this
                Agreement, the use by Licensor of the Mark either prior to the date
                of
                this agreement, or with respect to any use made by the Licensor of
                the
                Mark after the date of this agreement, or any alleged wrong or defect
                in
                the goods or services Licensor provides, manufactures, sells, offers
                or
                distributes. As used in this Agreement, the term "Claim" or "Claims"
                shall
                include; (i) all liabilities, obligations or responsibilities, fixed
                or
                unfixed, known or unknown, asserted or unasserted, liquidated or
                unliquidated, secured or unsecured; (ii) all losses, damages, judgments,
                awards, settlements, costs and expenses (including, without Limitation,
                interest, penalties, court costs and attorneys' fees and expenses);
                and
                (iii) all demands, claims, suits, actions, costs of investigation,
                causes
                of action, proceedings, arbitrations and assessments, whether or
                not
                ultimately determined to be valid.




25




10.
            *Relationship
                of the Parties.*The
                parties shall be deemed independent contractors and shall have no
                authority to bind the other to any contract, agreement or
                matter.





11.
            *Notice.*Ali
                notices and communications provided for in this Agreement shall be
                in
                writing and shall be given or made (and shall be deemed to have been
                duly
                given or made upon receipt) by delivery in person, by an internationally
                recognized overnight courier service, by facsimile or registered
                or
                certified mail (postage prepaid, return receipt requested) to the
                appropriate address as set forth in the Purchase Agreement, unless
                another
                address is substituted in writing by a party to this
                Agreement.





12.
            *Assignment
                and Sublicense.*This
                Agreement is entered into in reliance upon and in consideration of
                the
                character, qualifications and representations of the parties. Neither
                this
                Agreement nor any of the rights, privileges or obligations herein
                shall be
                assigned, transferred or divided in any manner by either party without
                the
                prior written approval of the other party; provided, however, that
                (i) the
                Licensor may assign this Agreement or any of their respective rights
                and
                obligations hereunder to one or more of its affiliates or related
                companies and (ii) either party may assign this Agreement to a person
                or
                entity which acquires and succeeds to the business of such party
                (as it
                relates to this Agreement) without the consent of the other
                party.





13.
            *Severability.*If
                any section, paragraph, sentence, clause or other provision of this
                Agreement is held by a court of competent jurisdiction to be illegal,
                null
                and void or unenforceable, such determination shall not affect the
                remainder of this Agreement, and such remainder shall remain in full
                force
                and effect, to extent permitted by
                law.





14.
            *Waiver.*The
                waiver of either party of any right hereunder or failure to perform
                or
                breach by the other party shall not be deemed as a waiver of any
                other
                right hereunder or of any other breach or failure by said other party
                whether of a similar nature or
                otherwise.





15.
            *Scope
                of Agreement.*This
                Agreement supersedes and terminates any and all prior agreements
                or
                contracts concerning the subject matter hereof, whether oral or in
                writing, which have been entered into between Licensor and Licensee
                prior
                to the Effective Date. This Agreement constitutes the entire agreement
                between the parties pertaining to the subject matter hereof. No change,
                termination, waiver, amendment or modification of any of the provisions
                hereof shall be binding upon the parties, unless in a writing signed
                by
                duly authorized representatives of the parties. This Agreement may
                he
                executed in counterparts, each of which shall he deemed an original,
                but
                all of which together shall constitute one and the same
                instrument.





*[Signature
      page follows]*





26




IN
      WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
      the
      Effective Date.


**LICENSOR:**
              
              **LICENSEE:**MILLER-ST.
                  NAZIANZ, INC.
              
              ART'S
                  WAY MANUFACTURING CO., INC.By:
              
              
              
              By:John
                  C. Miller
              
              
              
              J.
                  Ward McConnell, Jr.President
              
              
              
              Chairman




27




**EXHIBIT
      A**   **Mark**
              
              Country
              
              Registration
                  No.
              
              Registration
                  DateBADGER
              
              U.S.
              
              2,460,006
              
              12-Jun-2001BADGER
              
              Canada
              
              TMA549,726
              
              10-Aug-2001BADGER
                  & Design
                (as
                  depicted below)
                
                [BADGER]
              
              U.S.
              
              871,241
              
              17-Jun-1969




28




**EXHIBIT
      B**





Badger
      Product Line





The
      following products manufactured and/or marketed using the Badger tradename or
      trademark:





Forage
      Boxes (including front, rear, combo or other)





Forage
      Blowers





Running
      Gears





Dump
      Boxes





Options
      for any of the foregoing




29




**EXHIBIT
      C**


Farmstead
      Product Line





Silo
      unloaders





Silage
      chutes





Silage
      spreaders





Barn
      cleaners





Alley
      scrapers





Manure
      pumps





Manure
      agitators





Manure
      Augers





Manure
      tanker





Chain
      conveyors for barn use





Belt
      conveyors for barn use





Chain
      feeders





Belt
      feeders





Stationary
      feed mixers





Roller
      mills





Accessories
      and parts for any of the foregoing




30




**EXHIBIT
      B — WARRANTY BILL OF SALE**





Document
      is attached.




31


**WARRANTY
      BILL OF SALE**





KNOW
      ALL
      MEN BY THESE PRESENTS, that for good and valuable consideration, receipt and
      sufficiency of which is hereby acknowledged, Miller-St. Nazianz, Inc., a
      Wisconsin corporation ("Seller"), does hereby sell, assign, transfer, convey
      and
      deliver to Art's Way Manufacturing Co., Inc., a Delaware corporation (the "Purchaser"), pursuant
      to that certain Asset Purchase Agreement, dated as of September 5, 2007, by
      and
      among the Seller, John C. Miller, and Purchaser (the "Asset
      Purchase Agreement"), all
      of
      the following assets, properties, goodwill and business (the "Purchased
      Assets"):





(i)  The
      Miller Pro product lines described on the attached Schedule 2, the Victor
      product lines described on the attached Schedule 3, and the Badger product
      lines
      described on the attached Schedule l (hereinafter referred to collectively
      as
      the "Product
      Lines").





(ii)  All
      tooling, dyes, jigs, patterns, specialized equipment necessary or used for
      the
      Product Lines ("Manufacturing Fixtures and Equipment"); for purposes of this
      Agreement specialized equipment includes without limitation that certain 20'
      foot Press Break shown on the information referred to in paragraph 3.05 of
      the
      Asset Purchase Agreement, side punching machine, roof punching machine, blower
      band roller, corrugated shear, roof edge protector bender, and all assembly
      line
      racks and bins;





(iii)  All
      patents, applications therefor and unpatented inventions applicable to any
      product within the Product Lines; all designs, drawings, blue prints, computer
      data, engineering data or studies, manufacturing data, prototypes, stampings,
      projects in progress, formulas, processes, technical information and knowhow
      related to or used in the production of any product within the Product Lines
      ("Intellectual Property");





(iv)  All
      customer lists, customer backlogs, pending orders, pending purchase contracts,
      customer files, vendor lists, purchase records, sales records or data
      (electronic or otherwise) relating to any of the products in the Product Lines
      ("Customer Lists");





(v)  Inventories
      of finished goods and work in process related to any products in the Product
      Lines as described in the Asset Purchase Agreement ("Finished Goods
      Inventory");





(vi)  All
      inventories of spare parts related to any product in the Product Lines as
      further described in the Asset Purchase Agreement ("Spare Parts
      Inventory");





(vii)  Inventories
      of raw materials and completed manufactured parts related to products in the
      Product Lines as further described in the Asset Purchase Agreement ("Raw
      Material and Completed Manufactured Parts Inventory");





(viii)  All
      logos, trademarks, trade names, service marks, copyrights, applications for
      and
      registrations pertaining to any of the Product Lines and the marketing thereof,
      including without limitation the names Miller Pro, Victor, Hay Buddy and Badger
      ("Trade Names") provided however Purchaser's rights to use the "Badger" trade
      name shall be expressly limited to rights of use in connection with the
      production or sale of the Badger Product Line, as more particularly set forth
      in
      the Badger Intellectual Property License Agreement.;





32


(ix)  All
      distribution agreements with manufacturers pertaining to the Product Lines
      including without limitation such agreements with John Deere and Tonutti S.p.A
      ("Distribution Agreements");





(x)  All
      dealership, dealer or distributor agreements or contracts pertaining to any
      of
      the Product lines with dealers handling any of the Product Lines ("Dealer
      Agreements"),provided, Purchaser will have no repurchase obligations under
      such
      agreements with respect to sales prior to closing; and





(xi)  the
      goodwill of Seller relating to the Product Lines.





and
      that
      all of the foregoing assets be free of all liens, and it being understood that
      the Seller shall retain and the Purchased Assets shall specifically exclude
      all
      other assets of the Seller.





TO
      HAVE
      AND TO HOLD the Purchased Assets unto and for the use of Purchaser, its
      successors and assigns forever.





Seller
      does hereby warrant and defend the title to the Purchased Assets against the
      lawful. claims and demands of all persons.





From
      and
      after the date hereof, upon request of Purchaser, Seller shall duly perform
      such
      further acts and duly execute, acknowledge and deliver all such further acts,
      deeds, assignments, certificates, receipts, transfers, conveyances, powers
      of
      attorney and assurances as may be reasonably required to convey and to vest
      in
      Purchaser and to protect its right, title and interest in and enjoyment of
      all
      assets intended to be assigned, transferred and conveyed pursuant to this
      Warranty Bill of Sale and as may be appropriate otherwise to carry out the
      transactions as contemplated by this Warranty Bill of Sale.





Capitalized
      terms used herein without definition shall have the meanings ascribed to them
      in
      the Asset Purchase Agreement. In the event of any conflict or inconsistency
      between the terms of the Asset Purchase Agreement and the terms hereof, the
      terms of the Asset Purchase Agreement shall govern.





[ *Signature
      Page follows]*




33


SIGNATURE
      PAGE TO


WARRANTY
      BILL OF SALE




IN
      WITNESS WHEREOF, Seller has signed and sealed this Warranty Bill of Sale as
      of September
      5, 2007.


Miller-St.
                  Nazianz, Inc.By:Name:
                  John C. MillerTitle:
                  PresidentArt’s
                  Way Manufacutring Co., Inc.By:Name:Title:




34




**SCHEDULE
      1 — BADGER PRODUCT LINE**





The
      following products manufactured and/or marketed using the Badger tradename
      or
      trademark:





Forage
      Boxes (including front, rear, combo or other)





Forage
      Blowers





Running
      Gears





Dump
      Boxes





Options
      for any of the foregoing





Other
      products manufactured and/or marketed using the Badger tradename or trademark
      are not included.




35


**SCHEDULE
      2 — MILLER PRO PRODUCT LINE**





All
      products manufactured and/or marketed using the Miller Pro tradename, including
      without limitation:





Forage
      Boxes (including front, rear, combo or other)





Receiver
      Boxes





Running
      Gears and Tires





Forage
      Blowers





Dump
      Boxes





Rotary
      Rakes





Finger
      Wheel Rakes





Miller
      produced Hay Mergers





All
      "Hay
      Buddy" equipment





Options
      for any of the foregoing





Excepted
      from the foregoing are pull type sprayers marketed under the Miller Pro brand and
      products manufactured by Ziegler,




36


**SCHEDULE
      3 — VICTOR PRODUCT LINE**





All
      products manufactured and/or marketed using the Victor trademark, including
      without limitation:





Forage
      Boxes (including front, rear, combo or other)





Running
      Gears





Rotary
      Rakes





Forage
      Blowers





Dump
      Boxes





Options
      for any of the foregoing.




37


**EXHIBIT
      C — INTELLECTUAL PROPERTY ASSIGNMENT**




Document
      is attached.




38


**ASSIGNMENT
      OF INTELLECTUAL PROPERTY**





WHEREAS,
      Miller-St. Nazianz, Inc., a Wisconsin corporation (the "Seller") is
      the
      owner of certain Intellectual Property, as defined in Section 2.01(a)(iii)
      of
      that certain Asset Purchase Agreement by and among Seller, John C. Miller,
      and
      Art's Way Manufacturing Co., Inc., a Delaware corporation (the "Purchaser"),
      dated as of September 5, 2007 (the "Asset
      Purchase Agreement"), and
      including, but not limited to: (a) rights in the Victor and Miller Pro trade
      names and all goodwill relating thereto; and (b) the following patents and
      registrations and the other Intellectual Property described as
      follows:





**Trademarks**


**Mark**
              
              **Country**
              
              **Registration
                  #**
              
              **Registration
                  Date**
              
              **Next
                  Action Due**"Hay
                  Buddy"
              
              U.S.
              
              548,356
              
              7/19/2001
              
              7/19/2016"Victor"
              
              Canada
              
              2,373,268
              
              8/1/2000
              
              8/1/2010"Victor"
              
              U.S.
              
              2,866,031
              
              7/27/2004
              
              7/27/2010"Miller
                  Pro"
              
              
              
              no
                  registration
              
              no
                  registration




**Patents**


1)
      United
      States Patent No. 5,175,987 — Issued June 5, 1993





Other
      (to
      the extent title thereto is not effectively conveyed in a Warranty Bill of
      Sale
      of even date herewith between the parties hereto)





All
      other
      patents, applications therefor and unpatented inventions applicable to any
      product within the Product Lines (as the term is defined in the Asset Purchase
      Agreement); all designs, drawings, blue prints, computer data, engineering
      data
      or studies, manufacturing data, prototypes, stampings, projects in progress,
      formulas, processes, technical information and know-how related to or used
      in
      the production of any product within the Product Lines.





All
      logos, trademarks, trade names, service marks, copyrights, applications for
      and
      registrations pertaining to any of the Product Lines and the marketing thereof,
      including without limitation the names Miller Pro, Victor, Hay Buddy and Badger
      ("Trade Names") provided however Purchaser's rights to use the "Badger" trade
      name shall be expressly limited to rights of use in connection with the
      production or sale of the Badger Product Line, as more particularly set forth
      in
      the Badger Intellectual Property License





Agreement
      delivered by Seller to Purchaser this date.





All
      of
      the foregoing being collectively referred to as the "Intellectual Property".





39


WHEREAS,
      Seller was and remains the sole owner of said Intellectual Property.





WHEREAS,
      Purchaser desires to acquire the Intellectual Property.





NOW,
      THEREFORE, in consideration of the sum of one dollar ($1.00), and for other
      good
      and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, Seller by these presents does sell, assign and transfer unto
      said
      Purchaser sole, entire and complete ownership of the Intellectual Property,
      including the right to sue for past infringement and all goodwill relating
      thereto, the same to be held and enjoyed by the Purchaser for its own use and
      behoof, and for its legal representatives and assigns, as fully and entirely
      as
      the same would have been held by the Seller had this assignment and sale not
      been made. Seller does hereby warrant and shall defend the title to the
      Intellectual Property against the lawful claims and demands of all persons
      and
      agrees to indemnify Purchaser for any breach of such warranty in accordance
      with
      Article VII of the Asset Purchase Agreement. Seller shall execute such documents
      and use commercially reasonable efforts to take or cause to be taken all actions
      and to do or cause to be done all things necessary, proper or advisable to
      consummate the transactions contemplated by this Assignment (including, without
      limitation, to put Purchaser in actual possession and operating control of
      the
      Intellectual Property, to effectuate, record or perfect the transfer of the
      Intellectual Property to Purchaser, to confirm the title of the Intellectual
      Property in Purchaser and to assist Purchaser in exercising rights relating
      thereto), and to make all filings and give all notices which may be necessary
      or
      required in order to effectuate the transactions contemplated
      hereby.





*[Signature
      Page follows]*


40




**SIGNATURE
      PAGE TO**


**ASSIGNMENT
      OF INTELLECTUAL PROPERTY**


Executed
                  on September 5, 2007.Miller-St,
                  Nazianz, Inc.By:Name:
                  John C. MillerTitle:
                  President
  Witness:Name:Title:




41




**EXHIBIT
      D – SELLER
      NON-COMPETITION AGREEMENT**


Document
      is attached .





42


**NON-COMPETITION
      AGREEMENT**





NON-COMPETITION
      AGREEMENT (this "Agreement") dated
      as
      of September 5, 2007, between Miller-St. Nazianz, Inc., a Wisconsin corporation
      (the "Seller"), and
      Art's
      Way Manufacturing Co., Inc., a Delaware corporation (the "Purchaser").





**RECITALS**





WHEREAS,
      pursuant to that certain Asset Purchase Agreement by and among Seller, John
      C.
      Miller, President of Seller, and Purchaser, dated as of September 5, 2007 (the "Asset Purchase. Agreement"), Seller
      agreed to sell, and Purchaser agreed to purchase, the Purchased Assets, as
      defined in the Asset Purchase Agreement; and





WHEREAS,
      assets the purchased under the Asset Purchase Agreement includes assets
      constituting certain product lines, said product lines being the Victor Product
      Line described on the attached Schedule 3, the Badger Product Line described
      on
      the attached Schedule 1 and the Miller Pro Product Line described on the
      attached Schedule 2; and





WHEREAS,
      an agreement prohibiting Seller from competing with Purchaser is necessary
      for
      Purchaser to receive the full benefit of the Purchased Assets and the good
      will
      included therein; and





WHEREAS,
      Section 2.09(a) of the Asset Purchase Agreement requires that a non-competition
      agreement be executed and delivered by Seller at the Closing; and





WHEREAS,
      Seller and Purchaser wish to set forth certain agreements with respect to
      non-competition as provided in this Agreement.





NOW,
      THEREFORE, in consideration of the foregoing and the mutual covenants contained
      herein, the parties agree as follows:





**AGREEMENT**





The
      parties, intending to be legally bound, agree as follows:





**1.**  **DEFINITIONS**





Capitalized
      terms not expressly defined in this Agreement shall have the meanings ascribed
      to them in the Asset Purchase Agreement.





**2.**  **NON-COMPETITION**





As
      an
      inducement for Purchaser to enter into the Asset Purchase Agreement and close
      the Purchase transaction provided for therein (without which inducement Seller
      acknowledges that Purchaser would not enter into the Asset Purchase Agreement
      or
      close the Purchase transaction called for therein), Seller agrees
      that:





43


**(a)** For a
      period of five (5) years after the Closing, Seller will not, directly or
      indirectly, engage or invest in, own, manage, operate, finance, control, or
      participate in the ownership, management, operation or control of, be employed
      by, associated with or in any manner connected with, lend Seller's name or
      any
      similar name to, lend Seller's credit to or render services or advice to, any
      business whose products or activities compete in whole or in part with the
      products or activities of the Purchased Assets (including the products
      comprising the Victor, Badger and Miller Pro Product Lines), anywhere in the
      World; provided, however, that Seller may purchase or otherwise acquire up
      to
      (but not more than) one percent of any class of securities of any enterprise
      (but without otherwise participating in the activities of such enterprise)
      if
      such securities are listed on any national or regional securities exchange
      or
      have been registered under Section 12(g) of the Securities Exchange Act of
      1934.
      Seller agrees that this covenant is reasonable with respect to its duration,
      geographical area and scope. Seller will not be considered in violation of
      this
      Agreement solely because Seller is acquired by an entity that is already engaged
      in the distribution of any products or equipment of the type contained within
      the Purchased Assets. Further, Seller shall not be considered in violation
      of
      this agreement if he or Corporation manufactures or sells self propelled hay
      mowers.





**3.**  **REMEDIES**





If
      Seller
      breaches the covenants set forth in Section 2 of this Agreement, Purchaser
      will
      be entitled to the following remedies:





**(a)** damages
      from Seller; and





**(b)** in
      addition to its right to damages and any other rights it may have, to obtain
      injunctive or other equitable relief to restrain any breach or threatened breach
      or otherwise to specifically enforce the provisions of Section 2 of this
      Agreement, it being agreed that money damages alone would be inadequate to
      compensate Purchaser and would be an inadequate remedy for such
      breach.





**(c)** The
      rights and remedies of the parties to this Agreement are cumulative and not
      alternative.





**4.
      WAIVER**





Neither
      the failure nor any delay by any party in exercising any right, power or
      privilege under this Agreement will operate as a waiver of such right, power
      or
      privilege, and no single or partial exercise of any such right, power or
      privilege will preclude any other or further exercise of such right, power
      or
      privilege or the exercise of any other right, power or privilege. To the maximum
      extent permitted by applicable law, (a) no claim or right arising out of this
      Agreement can be discharged by one party, in whole or in part, by a waiver
      or
      renunciation of the claim or right unless in writing signed by the other party;
      (b) no waiver that may be given by a party will be applicable except in the
      specific instance for which it is given; and (c) no notice to or demand on
      one
      party will be deemed to be a waiver of any obligation of such party or of the
      right of the party giving such notice or demand to take further action without
      notice or demand as provided in this Agreement.





44




**5.** **GOVERNING
      LAW**





This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      internal Laws of the State of Wisconsin regardless of conflicts of laws
      principles.





**6.**  **SEVERARILITY**





Whenever
      possible each provision and term of this Agreement wilt be interpreted in a
      manner to be effective and valid but if any provision or term of this Agreement
      is held to be prohibited or invalid, then such provision **or** term
      will
      be ineffective only to the extent of such prohibition or invalidity, without
      invalidating or affecting in any manner whatsoever the remainder of such
      provision or term or the remaining provisions or terms of this Agreement. If
      any
      of the covenants set forth in Section 2 of this Agreement are held to be
      unreasonable, arbitrary or against public policy, such covenants will be
      considered divisible with respect to scope, time and geographic area, and in
      such lesser scope, time and geographic area, will be effective, binding and
      enforceable against Seller.





**7.**  **COUNTERPARTS**





This
      Agreement may he executed in one or more counterparts, each of which will be
      deemed to be an original copy of this Agreement and all of which, when taken
      together, will be deemed to constitute one and the same agreement.





**8** .  **SECTION
      HEADINGS; CONSTRUCTION**





The
      headings of Sections in this Agreement are provided for convenience only and
      will not affect its construction or interpretation. All references to "Section"
      or "Sections" refer to the corresponding Section or Sections of this Agreement
      unless otherwise specified. All words used in this Agreement will be construed
      to be of such gender or number as the circumstances require.





**10.
      NOTICES**





All
      notices, consents, waivers and other communications under this Agreement must
      be
      in writing and will be deemed to have been duly given when (a) delivered by
      hand
      (with written confirmation of receipt) or (b) when received by the addressee,
      if
      sent by a nationally recognized overnight delivery service (receipt requested),
      in each case to the appropriate addresses set forth in the Asset Purchase
      Agreement (or to such other addresses numbers as a party may designate by notice
      to the other parties).





45




**11.**  **ENTIRE
      AGREEMENT**





This
      Agreement and the Asset Purchase Agreement constitute the entire agreement
      between the parties
      with respect to the subject matter of this Agreement and supersede all prior
      written and oral.
      agreements and understandings between Purchaser and Seller with respect to
      the
      subject matter
      of
      this Agreement. This Agreement may not be amended except by a written agreement executed
      by the party to be charged with the amendment.




*[Signature
      Page follows]*


46


**SIGNATURE
      PAGE TO**


**NON-COMPETITION
      AGREEMENT**





IN
      WITNESS WHEREOF, the parties have executed this Agreement as of September 5, 2007.


Miller-St.
                  Nazianz, Inc.By:Name:
                  John C. MillerTitle:
                  PresidentArt's
                  Way Manufacturing Co., Inc.By:Name:Title:




47




**SCHEDULE
      1— BADGER PRODUCT LINE**





The
      following products manufactured and/or marketed using the Badger tradename,
      or
      trademark:





Forage
      Boxes (including front, rear, combo or other)





Forage
      Blowers





Running
      Gears





Dump
      Boxes





Options
      for any of the foregoing





Other
      products manufactured and/or marketed using the Badger tradename or trademark
      are not included.




48


**SCHEDULE
      2 — MILLER PRO PRODUCT LINE**





All
      products manufactured and/or marketed using the Miller Pro tradename, including
      without limitation:





Forage
      Boxes (including front, rear, combo or other)





Receiver
      Boxes





Running
      Gears and Tires





Forage
      Blowers





Dump
      Boxes





Rotary
      Rakes





Finger
      Wheel Rakes





Miller
      produced Hay Mergers





All
      "Hay
      Buddy" equipment





Options
      for any of the foregoing





Excepted
      from the foregoing are pull type sprayers marketed under the Miller Pro brand
      and products manufactured by Ziegler.




49


**SCHEDULE
      3 - VICTOR PRODUCT LINE**





All
      products manufactured and/or marketed using the Victor trademark, including
      without limitation:





Forage
      Boxes (including front, rear, combo or other)





Running
      Gears





Rotary
      Rakes





Forage
      Blowers





Dump
      Boxes





Options
      for any of the foregoing




50


**EXHIBIT
      E — JOHN C. MILLER NON-COMPETITION AGREEMENT**





Document
      is attached.





51


NON-COMPETITION
      AGREEMENT





NON-COMPETITION
      AGREEMENT (this "Agreement") dated
      as
      of September 5, 2007, between John C. Miller, an individual ("Miller"), and
      Art's Way Manufacturing Co., Inc., a Delaware corporation (the "Purchaser").





**RECITALS**





WHEREAS,
      pursuant to that certain Asset Purchase Agreement by arid among Miller-St.
      Nazianz, Inc., a Wisconsin corporation (the "Corporation."), Miller,
      and. Purchaser, dated as of September 5, 2007 (the "Asset
      Purchase Agreement"), the
      Corporation agreed to sell, and Purchaser agreed to purchase, the Purchased
      Assets, as defined in the Asset Purchase Agreement; and





WHEREAS,
      Miller if president and sole voting shareholder of Corporation and is and has
      been involved in its day to day operations included the operations involving
      the
      Purchased Product Lines and the Purchased Assets; and





WHEREAS,
      the assets purchased under the Asset Purchase Agreement includes assets
      constituting certain product lines, said product lines being the Victor Product
      Line described on the attached Schedule 3, the Badger Product Line described
      on
      the attached Schedule I and the Miller Pro Product Line described on the
      attached Schedule 2; and





WHEREAS,
      an agreement prohibiting Miller from competing with Purchaser is necessary
      for
      Purchaser to receive the full benefit of the Purchased Assets and the good
      will
      included therein; and





WHEREAS,
      Section 2.09(a) of the Asset Purchase Agreement requires that a non-competition
      agreement be executed and delivered by Miller at the Closing; and





WHEREAS,
      Miller and Purchaser wish to set forth certain agreements with respect to
      non-competition as provided in this Agreement; and





WHEREAS
      this agreement is not entered into between an employer and employee, John C.
      Miller is not an. employee of Purchaser and John C. Miller's employment is
      not
      conditioned or based upon in any way this Agreement, the parties expressly
      acknowledge that Wis. Stats. §5103.465, Restrictive Covenants in Employment
      Contracts is inapplicable to this Agreement.





NOW,
      THEREFORE, in **** consideration
      of the foregoing and the mutual covenants contained herein, the parties agree
      as
      follows:




52




**AGREEMENT**





The
      parties, intending to be legally bound, agree as follows:




**1.**  **DEFINITIONS**





Capitalized
      terms not expressly defined in this Agreement shall have the meanings ascribed
      to them in the Asset Purchase Agreement.





**2.**  **NON-COMPETITION**





As
      an
      inducement for Purchaser to enter into the Asset Purchase Agreement and close
      the Purchase transaction provided for therein (without which inducement Miler
      acknowledges that Purchaser would not enter into the Asset Purchase Agreement
      or
      close the Purchase transaction called for therein), Miller agrees
      that:





(a)
      For a
      period of five (5) years after the Closing, Miller will not, directly or
      indirectly, engage or invest in, own, manage, operate, finance, control, or
      participate **in** the
      ownership, management, operation or control of he employed by, associated with
      or in any manner connected with, lend Miller's name or any similar name to,
      lend
      Miller's credit to or render services or advice to, any business whose products
      or activities compete in whole or in part with the products or activities of
      the
      Purchased Assets (including the products comprising the Victor, Badger and
      Miller Pro Product Lines), anywhere in the World; provided, however, that Miller
      may purchase or otherwise acquire up to (but not more than) one percent of
      any
      class of securities of any enterprise (but without otherwise participating
      in
      the activities of such enterprise) if such securities are listed on any national
      or regional securities exchange or have been registered under Section 12(g)
      of
      the Securities Exchange Act of 1934. Miller agrees that this covenant is
      reasonable with respect to its duration, geographical area and scope. Miller
      will not be considered in violation of this Agreement solely because Corporation
      is acquired by an **** entity
      that is already engaged in the distribution of any products or equipment of
      the
      type contained within the Purchased Assets. Further, Miller shall not be
      considered in violation of this agreement if he or Corporation manufactures
      or
      sells self propelled hay mowers.





**3.**  **REMEDIES**





If
      Miller
      breaches the covenants set forth in Section 2 of this Agreement, Purchaser
      will
      be entitled to the following remedies:





**(a)**  damages
      from Miller; and





**(b)**  in
      addition to its right to damages and any other rights it may have, to obtain
      injunctive or other equitable relief to restrain any breach or threatened breach
      or otherwise to specifically enforce the provisions of Section 2 of this
      Agreement, it being agreed that money damages alone would be inadequate to
      compensate Purchaser and would be an inadequate remedy for such
      breach.





**(c)**  The
      rights and remedies of the parties to this Agreement are cumulative and not
      alternative.





53




**4.**  **WAIVER**




Neither
      the failure nor any delay by any party in exercising any right, power or
      privilege under this Agreement will operate as a waiver of such right, power
      or
      privilege, and no single or partial exercise of any such right, power or
      privilege will preclude any other or further exercise of such right, power
      or
      privilege or the exercise of any other right, power or privilege. To the
      maximum. extent permitted by applicable law, (a) no claim or right arising
      out
      of this Agreement can be discharged by one party, in whole or in part, by a
      waiver or renunciation of the claim or right unless in writing signed by the
      other party; (b) no waiver that may be given by a party will be applicable
      except in the specific instance for which it is given; and (c) no notice to
      or
      demand on one party wilt be deemed to be a waiver of any obligation of such
      party or of the right of the party giving such notice or demand to take further
      action without notice or demand as provided in this Agreement.





**5.**  **GOVERNING
      LAW**





This
      Agreement shall be governed by and construed and enforced in accordance with
      the
      internal laws of the State of Wisconsin regardless of conflicts of laws
      principles.





**6.**  **SEVERABILITY**





Whenever
      possible each provision and term of this Agreement will be interpreted in a
      manner to be effective and valid but if any provision or term of this Agreement
      is held to be prohibited or invalid, then such provision or term will be
      ineffective only to the extent of such prohibition or invalidity, Without
      invalidating or affecting in any manner whatsoever the remainder of such
      provision or term or the remaining provisions or terms of this Agreement. If
      any
      of the covenants set forth in Section 2 of this Agreement are held to be
      unreasonable, arbitrary or against public policy, such covenants will be
      considered divisible with respect to scope, time and geographic area, and in
      such lesser scope, time and geographic area, will be effective, binding and
      enforceable against Miller.





**7.**  **COUNTERPARTS**





This
      Agreement may be executed in one or more counterparts, each of which will be
      deemed to be an original copy of this Agreement and all of which, when taken
      together, will be deemed to constitute one and the same agreement.





**8.**  **SECTION
      HEADINGS; CONSTRUCTION**





The
      headings of Sections in this Agreement are provided for convenience only and
      will not affect its construction or interpretation. All references to "Section"
      or "Sections" refer to the corresponding Section or Sections of this Agreement
      unless otherwise specified. All words used in this Agreement will be construed
      to be of such gender or number as the circumstances require.





**9.
      NOTICES**





All
      notices, consents, waivers and other communications under this Agreement must
      be
      in writing and will be deemed to have been duly given when (a) delivered by
      hand
      (with written confirmation of receipt) or (h) when received by the addressee,
      if
      sent by a nationally recognized overnight delivery service (receipt requested),
      in each case to the appropriate addresses set forth in the Asset Purchase
      Agreement (or to such other addresses numbers as a party may designate by notice
      to the other parties).





54




**11.
      ENTIRE AGREEMENT**





This
      Agreement and the Asset Purchase Agreement constitute the entire agreement
      between the parties with respect to the subject matter of this Agreement and
      supersede all prior written and oral agreements and understandings between
      Purchaser and Miller with respect to the subject matter of this Agreement.
      This
      Agreement may not be amended except by a written agreement executed by the
      party
      to be charged with the amendment.





*[Signature
      Page follows]*





55


**SIGNATURE
      PAGE TO**


**NON-COMPETITION
      AGREEMENT**





IN
      WITNESS WHEREOF, the parties have executed this Agreement as of September 5, 2007.


By:Name:
                  John C. MillerArt’s
                  Way Manufacturing Co., Inc.By:Name:Title:
 56




**SCHEDULE
      1— BADGER PRODUCT LINE**





The
      following products manufactured and/or marketed using the Badger tradename
      or
      trademark:





Forage
      Boxes (including front, rear, combo or other)





Forage
      Blowers





Running
      Gears





Dump
      Boxes





Options
      for any of the foregoing





Other
      products manufactured and/or marketed using the Badger tradename or trademark
      are not included.




57


**SCHEDULE
      2 — MILLER PRO PRODUCT LINE**





All
      products manufactured and/or marketed using the Miller Pro tradename, including
      without limitation:





Forage
      Boxes (including front, rear, combo or other)





Receiver
      Boxes





Running
      Gears and Tires





Forage
      Blowers





Dump
      Boxes





Rotary
      Rakes





Finger
      Wheel Rakes





Miller
      produced Hay Mergers





AR
      "Hay
      Buddy" equipment





Options
      for any of the foregoing





Excepted
      from the foregoing are pull type sprayers marketed under the Miller Pro brand
      and products manufactured by Ziegler.




58




**SCHEDULE
      3 — VICTOR PRODUCT LINE**





All
      products manufactured and/or marketed using the Victor trademark, including
      without limitation:





Forage
      Boxes (including front, rear, combo or other)





Running
      Gears





Rotary
      Rakes





Forage
      Blowers





Dump
      Boxes





Options
      for any of the foregoing.


59


**EXHIBIT
      F — PURCHASE PRICE ALLOCATION**


Purchase
                  Price before Deduction on account of warranty Assumption
              
              $
              975,000.00Less:
                    Negotiated Adjustment for Buyer's Assumption of warranty under
                    Section
                    2.05
              
              
              (100,000.00
              )Total
                  Purchase Price Per Section 2.03 (before Inventories)
              
              
              875,000.00Allocation
                  of Price:Fixtures,
                  tooling and Equipment
              
              $
              200,000.00Good
                      Will, trade names, trademarks, non competition and other assets not
                      included within Fixtures, tooling and Equipment
                      nor Inventory
              
              
              675,000.00Total
              
              $
              875,000.00




Inventories
      shall be allocated a value equal to the value thereof as used in the final
      computation of purchase price.




60


**DISCLOSURE
      SCHEDULE 1— BADGER PRODUCT LINE**





The
      following products manufactured and/or marketed using the Badger tradename
      or
      trademark:





Forage
      Boxes (including front, rear, combo or other)





Forage
      Blowers





Running
      Gears





Dump
      Boxes





Options
      for any of the foregoing





Other
      products manufactured and/or marketed using the Badger tradename or trademark
      are not included.




61


**DISCLOSURE
      SCHEDULE 2 — MILLER PRO PRODUCT LINE**





All
      products manufactured and/or marketed using the Miller Pro tradename, including
      without limitation:





Forage
      Boxes (including front, rear, combo or other)





Receiver
      Boxes





Running
      Gears and Tires





Forage
      Blowers





Dump
      Boxes





Rotary
      Rakes





Finger
      Wheel Rakes





Miller
      produced Hay Mergers





All
      "Hay
      Buddy" equipment





Options
      for any of the foregoing





Excepted
      from the foregoing are pull type sprayers marketed under the Miller Pro brand
      and products manufactured by Ziegler.




62


**DISCLOSURE
      SCHEDULE 3 — VICTOR PRODUCT LINE**





All
      products manufactured and/or marketed using the Victor trademark, including
      without limitation:





Forage
      Boxes (including front, rear, combo or other)





Running
      Gears





Rotary
      Rakes





Forage
      Blowers





Dump
      Boxes





Options
      for any of the foregoing




63


**DISCLOSURE
      SCHEDULE 4 — INTELLECTUAL PROPERTY**





**Trademarks**


**Mark**
              
              **Country**
              
              **Registration
                  #**
              
              **Registration
                  Date**
              
              **Next
                  Action Due**"Hay
                  Buddy"
              
              
              U.S.
              
              
              548,356
              
              
              7/19/2001
              
              
              7/19/2016"Victor"
              
              
              Canada
              
              
              2,373,268
              
              
              8/1/2000
              
              
              8/1/2010"Victor"
              
              
              U.S.
              
              
              2,866,031
              
              
              7/27/2004
              
              
              7/27/2010"Miller
                  Pro"





**Patents**





1)
      United
      States Patent 5,175,987
      — Issued June 5, 1993





**Other**





All
      patents, applications therefor and unpatented inventions applicable to any
      product within the


Product
      Lines; all designs, drawings, blue prints, computer data, engineering data
      or
      studies,


manufacturing
      data, prototypes, stampings, projects in progress, formulas, processes,
      technical


information
      and knowhow related to or used in the production of any product within the
      Product


Lines.




64


**DISCLOSURE
      SCHEDULE 5 — THIRD-PARTY AGREEMENTS**





A.
            All
                sales of "Hay Buddy" equipment are subject to a license arrangement,
                which
                requires a two percent (2%) royalty payment on aggregate annual
                sales.





B.
            Affiliated
                Marketing Agreement with Deere & Company dated July 15,
                1997





C. Supply
      Agreement with Tonutti S.p.A. dated September 26, 2006




65


**SCHEDULE
      3.04 - PROPERTY NOT AT MAIN PLANT**





Inventory
      on consignment with dealers in Ontario and Quebec with a value of less than
      $21,000.




66


SCHEDULE
      3.05 - OFFERING BOOKLET





Document
      is attached.




67