REDI Loan Number 97-04-A
                                  EXHIBIT B
                                 
                             STATE OF SOUTH DAKOTA
                         BOARD OF ECONOMIC DEVELOPMENT

                  MORTGAGE - ONE HUNDRED EIGHTY DAY REDEMPTION

     THIS MORTGAGE is made this  26th day of May, 1998, by GEHL COMPANY, of
143 Water Street, West Bend, WI 53095 for a project at 915 S.W. 7th Street,
Madison, Lake County, South Dakota, hereinafter referred to as MORTGAGOR, to
the SOUTH DAKOTA BOARD OF ECONOMIC DEVELOPMENT, of HUGHES County, State of
SOUTH DAKOTA, whose principal office is at PIERRE, HUGHES County, State of
South Dakota, hereinafter referred to as MORTGAGEE.

     WITNESSETH:  That in consideration of the advance of the principal sum as
stated herein plus all future and additional advances together with interest
thereon, and in consideration of any future and additional advances made to
Mortgagor at Mortgagee's option, Mortgagor does hereby mortgage, grant,
bargain, release, assign, transfer and convey to Mortgagee the real property
and premises (the "Premises") described in Exhibit A attached hereto, and by
this reference incorporated herein, together with all buildings and
improvements now or hereafter erected thereon, all hereditaments and
appurtenances, and all rights and interests thereunto belonging or
appertaining, including rights of homestead, and all contingent rights and
estates of the Mortgagor in and to said Premises, it being the intention of
Mortgagor to mortgage an absolute title in fee in and to said Premises in
favor of the Mortgagee, to include all of the right, title and interest of
Mortgagor in said property now owned or hereafter acquired, all easements and
servient estates appurtenant thereto, rents, issues, uses, profits and right
to possession.

     Mortgagor warrants that Mortgagor is the owner in fee and is lawfully
seized of said Premises; that the Premises are free and clear from all
encumbrances and liens whatsoever, except for any permitted encumbrances as
attached in Exhibit B.  Mortgagor hereby covenants to warrant and defend the
title to said Premises against any and all claims and demands of all persons
whomsoever.  Mortgagor hereby relinquishes and waives all rights of homestead
in the Premises.

     THE PARTIES AGREE THAT THE PROVISIONS OF THE ONE HUNDRED EIGHTY DAY
REDEMPTION MORTGAGE ACT GOVERN THIS MORTGAGE.  In the event Mortgagee elects
to foreclose by action in state court, the holder of the certificate of sale
may apply to the court for a reduction of the 180 day redemption period if the
property has been abandoned by the Mortgagor.  If, after notice to the parties
as the court directs, the court finds the property has been abandoned, the
redemption period may be reduced.  The redemption period may not be reduced to
less than sixty (60) days from the date of recording the certificate of sale. 
There is hereby granted to Mortgagee a power of sale for the purposes of SDCL
Chapter 21-49.  The foregoing shall not be deemed to be a waiver of
Mortgagee's right to foreclose this Mortgage in federal court and seek
extinguishment of all rights of redemption.

     This Mortgage is given by the Mortgagor as security for the following:

          A.   Payment by Mortgagor to the Mortgagee of the principal sum of
          $255,000.00, together with interest thereon, according to the terms
          of a certain Promissory Note dated the date hereof, given by
          Mortgagor to Mortgagee, and any other Loan Documents or other
          instruments executed in refinancing, extending or renewing said
          indebtedness or any part thereof, all payable according to the terms
          of said Promissory Note, Loan Documents and other instruments;

          B.   The repayment in full by Mortgagor of any and all future and
          additional advances which may be made by Mortgagee at its option, at
          the request of and to or for the account of Mortgagor, for any
          purposes, whether or not the obligation created by such future
          advances related to the transaction evidenced by the Promissory Note
          or Loan Documents and whether or not such an advance is presently
          contemplated by the parties; repayment to be made as provided in the
          Promissory Note, Loan Documents or in such other instruments;
          provided, further, that THIS PARAGRAPH SHALL NOT CONSTITUTE A
          COMMITMENT TO MAKE FUTURE OR ADDITIONAL ADVANCES IN ANY AMOUNT;

          C.   The repayment in full by Mortgagor of all amounts advanced by
          Mortgagee, at its option, to or on behalf of Mortgagor as protective
          disbursements, as authorized in this Mortgage or in the Loan
          Agreement, or any other Loan Document, together with interest on all
          such advances, all payable as provided in this Mortgage, the
          Promissory Note, or other Loan Document or other instrument which
          may be taken to evidence such advance(s) or any part thereof;

          D.   The payment in full by Mortgagor of any damages, including
          liquidated damages, awarded or imposed pursuant to the Loan
          Agreement or the Employment Agreement between the parties made in
          connection with the Loan secured hereby.

          E.   The payment by Mortgagor of all other present or future, debts
          and liabilities of Mortgagor to Mortgagee of any nature whatsoever.

     This Mortgage is made pursuant to and secured by a certain Revolving
Economic Development and Initiative (REDI) Fund Loan Agreement dated the date
hereof (the "Loan Agreement"), by and between the Mortgagor and MORTGAGEE,
pursuant to SDCL Chapters 1-16G and 1-33, as amended, and Rules and
Regulations Article 68:02, Administrative Rules South Dakota (ARSD), the terms
and provisions of which are hereby incorporated by reference.  BED has entered
into a Loan Servicing Agreement with BankWest, Inc., a, state chartered
financial institution of Pierre, South Dakota (BankWest), whereby BankWest
will act as BED's agent for purposes of closing, funding, receiving payment
and servicing the BED Loan with the Borrower, and under which BankWest may
take any and all such action on behalf of BED consistent with the terms of the
Loan Servicing Agreement and the Borrower's BED Loan Documents including this
Mortgage.

     Mortgagor covenants and agrees with the Mortgagee as follows:

          A.   To pay all taxes, assessments, rents, or governmental or 
          municipal charges, fines, rates, fees or charges levied, imposed, or
          charged against the Premises or the project, before the same shall
          become delinquent, and to pay when due all liens, judgments, or
          other assessments which may lawfully be assessed against the
          property herein mortgaged, and the rental charges upon any leases
          assigned as additional security.

          B.   To insure and keep insured building and other improvements now
          or which may hereafter be placed on said Premises, if any, for the
          benefit of the Mortgagee, against loss by fire, wind, and other
          hazards, casualties and contingencies, with such insurers licensed
          to do business in the State, in such amounts, and against such risks
          as are customary in the State for entities of the same or similar
          size and type as the Mortgagor, and similarly situated with Premises
          and facilities of the Project's type, and provide proof of such
          coverage to BED.  Each policy shall provide that such insurance will
          be payable to Mortgagee as its interest may appear.  Each policy
          must provide that it cannot be canceled without 30 days prior
          written notice of cancellation.  In the event of cancellation the
          Mortgagor will promptly obtain replacement insurance with the same
          or substantially similar coverage and provide proof of such coverage
          to BED.  In the event of renewal, replacement or changes in
          coverage, the Mortgagor will promptly provide written notice of such
          changes to BED.  In the event of loss, the proceeds received by
          Mortgagee may, at Mortgagee's option be used for the reconstruction
          of the destroyed or damaged improvements or, if not so applied, may,
          at the option of the Mortgagee, be applied to the payment of any
          indebtedness matured or unmatured, secured by this Mortgage.

          C.   To keep the Premises in good condition and repair, as the same
          may now, or may hereafter, be placed, ordinary wear and tear
          excepted; to permit no mechanic's or other lien or encumbrance
          thereon; or to commit or permit no impairment of the value of this
          security.  Mortgagor shall not commit or suffer waste on the
          Premises, and in event of such waste the Mortgagee, in addition to
          any other available remedy, shall be entitled immediately to
          restrain the same by injunction or other appropriate proceeding. 
          Mortgagor warrants that the Premises will not be used for any
          unlawful purpose or permitted to become a nuisance; not to cut or
          remove, or permit to be cut or removed, any wood or timber from said
          real property; to continuously practice approved methods of farming
          on said Premises, to prevent erosion, and to prevent the spread of
          noxious or damaging weeds, and to preserve the fertility of the
          soil.

          D.   That no structure or improvement of any kind whatsoever, now or
          hereafter in or on the mortgaged Premises, shall be removed,
          replaced, or substantially altered without the Mortgagee's written
          consent, except for that property which in the good faith opinion of
          the Mortgagor is obsolete, outmoded, worn out, is being replaced, or
          otherwise is not needed for the operation of the Project.  If at any
          time all or any portion of the above described Premises shall be
          taken or damaged by condemnation proceedings under the power of
          eminent domain, all compensation awarded shall be paid directly to
          Mortgagee and, at Mortgagee's option, applied to the indebtedness
          hereby secured.

          E.   That in the event Mortgagor fails to pay when due any taxes,
          rental charges upon any leases assigned as additional security for
          this Mortgage, liens, judgments, or assessments lawfully assessed
          against the Premises hereby mortgaged, or governmental or municipal
          charges, fines, rates, fees or charges levied, imposed, or charged
          against the Premises before the same become delinquent, or fails to
          maintain insurance as hereinabove provided, Mortgagee may do so, at
          its sole option, and without the obligation to do so, as a
          protective disbursement and the amount so paid, together with
          interest at the current rate of the Mortgagee at the time the
          Mortgagee makes such payment, shall, from the date of payment be
          added to and deemed a part of the indebtedness secured hereby, and
          shall be due and payable on demand by the Mortgagee; provided,
          however, that the advancement by Mortgagee of any sum pursuant to
          this paragraph shall in no manner relieve Mortgagor of any
          obligations incurred under this Mortgage nor limit the right of
          Mortgagee to declare a default by Mortgagor and to exercise all
          rights and remedies as set forth herein in the event of default.

          F.   In the case of default by the Mortgagor in the payment of the
          principal sum, or any part thereof, or interest thereon at the time
          or times as specified for the payments hereof, or in the case of
          default in the payment of any of said advances, or in the case of
          any breach of any covenant or agreement contained in this Mortgage,
          the Loan Documents, or the Promissory Note, or related mortgages,
          documents and notes, or in the event of the failure of the Mortgagor
          to promptly pay, when due, any taxes, charges, liens, assessments,
          or encumbrances, or in the event of the insolvency of the Mortgagor,
          the Mortgagee may at its option declare this Mortgage to be in
          default and shall provide Mortgagor with written notice of such
          default.  If such default has not been cured within fifteen (15)days
          of Mortgagor's receipt of written notice thereof, Mortgagee at its
          sole option, may accelerate the payment of the outstanding debt and
          may declare the entire unpaid principal sum including interest due
          thereon immediately due and payable, and if not paid within 10 days
          thereof this Mortgage may be foreclosed by action, or by
          advertisement as provided by statute or the rules or powers relating
          thereto, including any amendments thereof, and this paragraph shall
          be deemed as authorizing and constituting a power of sale as
          mentioned in said statutes or rules or any amendments thereof.  In
          addition, Mortgagee may exercise any remedy set forth in any of the
          Loan Documents or other agreements between the parties made in
          connection with this Mortgage.  If any sum payable hereunder is not
          paid when due, then the entire outstanding principal balance shall
          thereafter bear interest at a specified fixed rate three (3)
          percentage points higher than the prime rate of interest published
          weekly in the Wall Street Journal per annum until paid.  Mortgagee
          may waive any default without waiving any other subsequent or prior
          default by Mortgagor.

          G.   To the extent permitted by law, Mortgagor agrees that in case 
          of any action, or in any proceedings in any court, to collect any
          sums payable under or secured by this Mortgage, or to protect the
          lien or title herein of the Mortgagee, or in any other case
          permitted by law, including foreclosure by action or by
          advertisement, in which attorney fees may be collected from
          Mortgagor or charged upon the above described property, to pay
          Mortgagee's reasonable attorney fees and actual disbursements
          necessarily incurred in the course of said action.

     H.   In the event the mortgaged Premises or any portion thereof are sold,
          divested, transferred, relinquished, or in the event the Mortgagor
          should lose their right, title or interest in the security herein
          described, or any portion thereof during the term of this Mortgage,
          whether voluntarily or by operation of law, without the prior
          written consent of the Mortgagee, the entire indebtedness remaining
          unpaid and owing together with interest thereon, including advances
          for any purpose may at the option of the Mortgagee, be declared
          immediately due and payable and this Mortgage may then be foreclosed
          by action or by advertisement, as provided by statute or the rules
          or powers relating thereto.

     I.   In the event of default in the payment of any of the obligations
          described in this Mortgage, Mortgagor hereby assigns to Mortgagee
          all of Mortgagor's interest in and to all rents, issues, uses,
          growing crops, profits, royalties, or lease payments due to
          Mortgagor from use or occupancy of any part of the Premises secured
          by this Mortgage; this assignment shall also pertain to all
          royalties, rents, or profits, due to Mortgagor for any oil, gas,
          mineral, or other subsurface interest in and to the above described
          Premises; all rents profits, lease payments, or royalties received
          by Mortgagee hereunder shall be applied to the indebtedness secured
          by this Mortgage.

     J.   In the case of foreclosure of this Mortgage, at any time after the
          commencement of an action of foreclosure or at any time after the
          commencement of foreclosure by advertisement, or during any period
          of redemption, Mortgagee is authorized to appoint a receiver to take
          possession of the Premises if the Premises have been abandoned, or
          to have a receiver appointed by the court upon other sufficient
          proof being established therefor, said receiver to take immediate
          possession of the above described property, and of all the rents or
          profits accruing therefrom, and to rent or cultivate the same as the
          receiver may deem best for the interest of all parties concerned,
          and be liable to account to Mortgagor only for the net profits,
          after application of rents, issues and profits upon the expenses and
          costs of the receivership and foreclosure and upon the indebtedness,
          costs and expenses hereby secured or herein mentioned.

     K.   Further, in the event of any action by Mortgagee to enforce the
          collection of the mortgage debt, Mortgagor agrees that any expense
          incurred to procure or extend an abstract of title, policy of title
          insurance or other lien search, shall, when paid by Mortgagee,
          become a part of the debt secured hereby, and shall be paid by
          Mortgagor together with all taxable costs of such action 

     L.   In the case of any default the Mortgagee shall have the privilege,
          without declaring the whole indebtedness due and payable, to
          foreclosure on account of such specific default for such sums as are
          in default and such foreclosure proceedings may be had and the
          Premises described herein may be sold, subject to the unpaid
          indebtedness hereby secured, and this Mortgage shall continue as a
          lien for any unpaid balance.  If the Mortgagee waives the right to
          accelerate, or any other right hereunder, such a waiver shall not
          constitute a waiver of the right to rescind, or any other remedy
          available to the Mortgagee, nor shall it be construed as a waiver of
          such rights in the event of subsequent defaults.  No remedy herein
          conferred upon or reserved to the Mortgagee is intended to be
          exclusive of any other available remedy, but each and every remedy
          shall be cumulative and in addition to every other remedy given
          under this Mortgage and the Loan Agreement, or now or hereafter
          existing at law or in equity or by statute.  No delay or omission to
          exercise any right or power accruing upon any default shall impair
          any such right or power or shall be construed as a waiver thereof,
          but any such right and power may be exercised from time to time and
          as often as may be deemed expedient.  In the event that any breach
          by the Mortgagor is specifically waived in writing by the Mortgagee,
          such waiver shall be limited to the particular breach so waived and
          shall not be deemed to waive any other or subsequent breach.

     M.   Any moneys collected by the Mortgagee pursuant to foreclosure under
          this Mortgage shall be applied first to pay Mortgagee's attorney's
          fees and other expenses of collection; second to any interest,
          liquidated damages, and penalties due on the BED Loan; third to pay
          principal due on the BED Loan; fourth to pay any other amounts due
          under this Mortgage, the Loan Agreement, the Promissory Notes or the
          Loan Documents; and fifth to pay principal and interest on the BED
          Loan, and other amounts not yet due hereunder, as they become due,
          such payments to be made in the same order as set forth in this
          section.

     Mortgagor will comply with all statutes, ordinances, and governmental
regulation affecting the Premises, and if Mortgagor neglects or refuses to so
comply, and such failure or refusal has not been corrected within 15 days of
receipt of written notice, the entire balance of the principal sum secured
hereby, together with all accrued interest thereon, will, at Mortgagee's sole
option, immediately become due and payable.

     This Mortgage shall be governed by and construed in accordance with the
laws of the State of South Dakota.  Terms used herein and defined in the Loan
Agreement shall have the same meaning as set forth in the Loan Agreement
unless the context clearly requires otherwise.

     This Mortgage may not be modified or amended except by mutual consent
expressed in writing, which writing shall be expressly identified as a part
hereof, and which writing shall be signed by an authorized representative of
each of the parties hereto.

     Any notice provided for herein shall be deemed given when transmitted as
provided in Section 14 of the Loan Agreement.

     The covenants in this Mortgage shall be deemed to be severable; in the
event that any portion of this Mortgage is determined to be void or
unenforceable, that determination shall not affect the validity of the
remaining portions of the Mortgage.

     IN WITNESS WHEREOF, this instrument has been executed the day and year
first above written.

                              GEHL COMPANY

                              __________________________________
                                        (MORTGAGOR)


                              BY:/s/ Kenneth P.Hahn 
                              Its Vice President
                                        Title


ATTEST

BY:/s/ M.J. Mulcahy
Its Secretary
          Title

     NOTE: Corporate Borrowers must execute Mortgage, in corporate name, by
     duly authorized officer, and seal must be affixed and duly attested;
     Limited Liability Company Borrowers must execute Mortgage by duly
     authorized Manager or by all members; Partnership Borrowers must execute
     Mortgage in firm name, together with signature of an authorized general
     partner.

CORPORATE ACKNOWLEDGMENT
OPTION


STATE OF WISCONSIN)
                      )  SS
COUNTY OF Washington  )


On this the 26th day of May, 1998, before me, the undersigned, personally
appeared Kenneth P. Hahn and Michael J. Mulcahy known to me to be the Vice
President and Secretary respectively, of the corporation that is described in
and that executed the within instrument, having authority to execute such
instrument and acknowledged to me that such corporation executed the same.
In witness whereof I hereunto set my hand and official seal.

                         /s/ Laurence Schwartz
                         Notary Public
(SEAL)
Notary Print Name: Laurence Schwartz 

My Commission Expires: permanent



This document has been prepared by:
The Office of the Attorney General
500 East Capitol Avenue
Pierre, SD  57501-5070
(605) 773-3215


                                EXHIBIT A

                       LEGAL DESCRIPTION OF PROPERTY

Lots 1,. 2, 3, and 4, in Madison Industrial Park, Madison, lake County, 
South Dakota;
AND
The North 334.4 Feet except the East 177.4 Feet Thereof of Lot 9, and the
North 334.4 Feet of the W 1/2 of Lot 10, and the North 334.4 Feet of the E 
1/2 of Lot 10, all in County Auditor's Fourth Addition to Madison, Lake 
County, South Dakota.


                               EXHIBIT B

Permitted Encumbrances:

1.  Real estate tax for the year 1997 in the amount of $70,141.96 is payable
    but not delinquent, and real estate taxes and special assessments for
    subsequent years not yet due or payable.

2.  Easement to Northwestern Public Service Company, dated December 20, 1972
    filed January 2, 1973 at 8:35 A.M. in Book 203 Page 274, over Lot 1 of
    County Auditor's Fourth Addition to Madison, South Dakota, (which was 
    replated as Madison Industrial Park) for a gas line.

3.  Easement dated December 17, 1979, given to City of Madison, filed
    December 21, 1979 at 10:00 A.M. in book 227 Page 198, over the East 20
    Feet of Lot 3, Madison Industrial Park and the East 20 Feet of the West
    760 Feet of the North 334.4 Feet of Lot 10 of County Auditor's Fourth
    Addition to Madison, Lake Co., SD, for utilities.


                             EXHIBIT E


Description of Project:

Construction of 22,400 square foot expansion onto Gehl Company's skid steer
loader manufacturing facility in Madison, SD.

SOURCES                                USES
REDI                  $255,000         Land/Building       $809,176
City of Madison       $255,000         Equipment           $1,428,180
Deutsche Financial
Services              $1,744,348       Other Costs         $267,475
Equity                $250,483

TOTAL                 $2,504,831       TOTAL               $2,504,831