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COMMERCIAL GUARANTY



Borrower:ART'S-WAY MANUFACTURING CO.,INC. Lender:WEST DES MOINES STATE BANK

	  (TIN:42-0920725)		             MAIN BANK

	  HWY 9 WEST, PO BOX 288		       1601 22ND STREET

	  ARMSTRONG,IA 50514-0288		       WEST DES MOINES, IA 50266

				                         (515)222-2300



Guarantor: J WARD MCCONNELL JR (SSN:091-24-7803)

           PO BOX 6246

           KINSTON, NC 28501-0246



AMOUNT OF GUARANTY. This is a guaranty of payment of the Note, including

without limitation the principal Note amount of Two Million Five Hundred

Thousand & 00/100 Dollars ($2,500,000.00).



GUARANTY. For good and valuable consideration, J WARD MCCONNELL JR

("Guarantor") absolutely and unconditionally guarantees and promises to

pay to WEST DES MOINES STATE BANK ("Lender") or its order, in legal tender

of the United States of America, the Indebtedness (as that term is defined

below) of ART'S-WAY MANUFACTURING CO., INC. ("Borrower") to Lender on the

terms and conditions set forth in this Guaranty.



MAXIMUM LIABILITY. The maximum liability of Guarantor under this Guaranty

shall not exceed at any one time the amount of the Indebtedness described

herein, plus all costs and expenses of (A) enforcement of this Guaranty

and (B) collection and sale of any collateral securing this Guaranty.



The above limitation on liability is not a restriction on the amount of

the Indebtedness of Borrower to Lender either in the aggregate or at any

one time.  If Lender presently holds one or more guaranties, or hereafter

receives additional guaranties from Guarantor, Lender's rights under all

guaranties shall be cumulative. This Guaranty shall not (unless

specifically provided below to the contrary) affect or invalidate any

such other guaranties. Guarantor's liability will be Guarantor's aggregate

liability under the terms of this Guaranty and any such other unterminated

guaranties.



INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty

includes the Note, including (a) all principal, (b) all interest,

(c) all late charges, (d) all loan fees and loan charges, and

(e) all collection costs and expenses relating to the Note or to

any collateral for the Note.  Collection costs and expenses include

without limitation all of Lender's attorneys' fees.



DURATION OF GUARANTY. This Guaranty will take effect when received

by Lender without the necessity of any acceptance by Lender, or any

notice to Guarantor or to Borrower, and will continue in full force

until all Indebtedness shall have been fully and finally paid and

satisfied and all of Guarantor's other obligations under this Guaranty

shall have been performed in full.  Release of any other guarantor or

termination of any other guaranty of the Indebtedness shall not affect

the liability of Guarantor under this Guaranty. A revocation Lender

receives from any one or more Guarantors shall not affect the liability

of any remaining Guarantors under this Guaranty. This Guaranty covers

a revolving line of credit and it is specifically anticipated that

fluctuations will occur in the aggregate amount of Indebtedness owing

from Borrower to Lender.  Guarantor specifically acknowledges and

agrees that fluctuations in the amount of Indebtedness, even to

zero dollars ($0.00), shall not constitute a termination of this

Guaranty. Guarantor's liability under this Guaranty shall terminate

only upon (A) termination in writing by Borrower and Lender of the

line of credit, (B) payment of the Indebtedness in full in legal

tender, and (C) payment in full in legal tender of all of Guarantor's

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