Document:

AMENDED AND RESTATED
                           NEGOTIABLE PROMISSORY NOTE

$90,000,000.00                                                 ___________, 2002

     For value received, Gehl Company, Hedlund-Martin, Inc., Gehl Power
Products, Inc., Mustang Manufacturing Company, Inc. and Compact Equipment
Attachments, Inc. (individually and collectively, "Maker") jointly and severally
promise to pay to Deutsche Financial Services Corporation f/k/a ITT Commercial
Finance Corp. ("DFS") or order, on or before December 31, 2004 the sum of: (i)
Ninety Million Dollars ($90,000,000); or, (ii) such lesser principal amount as
has been advanced to Maker and not repaid under the terms of the Amended and
Restated Loan and Security Agreement dated as of October 1, 1994 between Maker,
DFS and Deutsche Financial Services Canada Corporation, a successor-in-interest
to Deutsche Financial Services, a division of Deutsche Bank Canada,
successor-in-interest to ITT Commercial Finance, a division of ITT Industries of
Canada, Ltd. ("DFSC"), as amended (the "Agreement"), together with interest
thereon at a rate determined in accordance with Section 2.1.1. of the Agreement,
which section and referenced sections therein is hereby incorporated as if
originally set forth herein.

     The principal portion of this Note not paid when due shall, at the option
of holder, bear late charges thereon calculated at Prime Rate (as defined in the
Agreement) plus Three percent (3.0%) per annum. Maker promises to pay the
reasonable attorney's fees and expenses, if placed in the hands of an attorney
for collection. This Note is made pursuant to the Agreement. Reference is made
to the Agreement for a description of the terms and conditions of the
indebtedness evidence hereby and the circumstances under which the maturity of
such indebtedness may be accelerated. The holder hereof may grant to the Maker,
any endorsers and any other persons obligated hereon, extensions of time for
payment of this Note and/or the maturity of any installment or installments, in
whole or in part, without limit as to the number of extensions or the period or
periods thereof and without waiving any rights to enforce payment of any other
installment or other obligation hereunder.

     Maker hereby waives presentment and demand for payment, protest and notice
of nonpayment and protest and consent that the holder hereof may, without notice
to and without releasing the liability of the undersigned hereunder, compound or
release, any rights against the Maker or any endorser(s) and grant extensions of
time as provided in this Note. This document amends and restates in its entirety
the terms of the Negotiable Promissory Note which Maker signed on February 5,
1998, as amended, and Compact Equipment Attachments, Inc. hereby signs this Note
as an additional party thereto. This document will not be deemed a novation of
such Negotiable Promissory Note, nor will execution of this document be deemed a
satisfaction of any obligation secured by such Negotiable Promissory Note.

     This Note shall be governed by the laws of the state of Missouri. MAKER
WAIVES ANY RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY ACTION ON THIS NOTE.

GEHL COMPANY                             HEDLUND MARTIN, INC.

By: _____________________                By: ________________________
Its:______________________               Its: ________________________
Date:____________________                Date:________________________
                                                                         -

GEHL POWER PRODUCTS, INC.                MUSTANG MANUFACTURING COMPANY, INC.

By: ______________________               By: _______________________
Its: ______________________              Its: ________________________
Date: ____________________               Date: ______________________
<PAGE>

COMPACT EQUIPMENT ATTACHMENTS, INC.

By: ______________________
Its: ______________________
Date: ____________________

Negotiable and payable                   Notices to:
at the office of:

Deutsche Financial Services Corporation  Deutsche Financial Services Corporation
P.O. Box 31626                           625 Maryville Centre Drive
St. Louis, MO  63131                     St. Louis, MO 63141-5832Section 4.01(a) of the Gehl Savings Plan is amended to read as follows:

          Section 4.01. Direction of Investment. (a) Each Participant shall
          direct, in the manner the Administrator prescribes, the percentage of
          Deposits, rollovers and allocable share of Company contributions which
          shall be invested in each fund described in Section 4.03 hereof. In
          the event of the Participant's death, the Beneficiary shall have the
          investment authority of a Participant.EXHIBIT 10.1

                              TWELVETH AMENDMENT TO
                      GENERAL CREDIT AND SECURITY AGREEMENT

         THIS AGREEMENT, dated and effective as of April 11, 2002, between
SPECTRUM Commercial Services Company, a Minnesota Corporation, having its
mailing address and principal place of business at Two Appletree Square, Suite
415, Bloomington, Minnesota 55425 (herein called "Lender" or "SCS"), and
Appliance Recycling Centers of America, Inc., a Minnesota corporation, having
the mailing address and principal place of business at 7400 Excelsior Boulevard,
Minneapolis, MN 55426, (herein called "Borrower"), amends that certain General
Credit and Security Agreement dated August 30, 1996, ("Credit Agreement") as
amended. Where the provisions of this Agreement conflict with the Credit
Agreement, the intent of this Agreement shall control.

1. The definition of "Borrowing Base" appearing in Paragraph 2 is amended in its
entirety to read as follows:

                  "Borrowing Base" shall mean the sum of (i) Eighty percent
                  (80%) of the net amount of Eligible Receivables or such
                  greater or lesser percentage as Lender, in its sole
                  discretion, shall deem appropriate, plus (ii) the lesser of
                  (x) Two Hundred Fifty Thousand and No/100ths Dollars
                  ($250,000) or (y) Twenty Five percent (25%) of the net amount
                  of Eligible Inventory (excluding Eligible Whirlpool Inventory
                  and Eligible Scratch and Dent Inventory), or such greater or
                  lesser dollars and/or percentage as Lender, in its sole
                  discretion, shall deem appropriate, plus (iii) the lesser of
                  (x) Two Million and No/100ths Dollars ($2,000,000) or (y)
                  Fifty percent (50%) of the net amount of Eligible Scratch and
                  Dent Inventory, or such greater or lesser dollars and/or
                  percentage as Lender, in its sole discretion, shall deem
                  appropriate, plus (iv) the lesser of (x) Five Million and
                  No/100ths Dollars ($5,000,000) or (y) Eighty percent (80%) of
                  the net amount of Eligible Whirlpool Inventory, or such
                  greater or lesser dollars and/or percentage as Lender, in its
                  sole discretion, shall deem appropriate, provided however,
                  that notwithstanding the dollar limits contained in
                  subsections (ii) - (iv) above, that the total aggregate amount
                  available under subsections (ii) - (iv) shall in no event
                  exceed Six Million and No/100ths Dollars ($6,000,000), or such
                  greater or lesser dollars as Lender, in its sole discretion,
                  shall deem appropriate.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

SPECTRUM COMMERCIAL SERVICES               APPLIANCE RECYCLING CENTERS
COMPANY                                    OF AMERICA, INC.

By  /s/ Steven I. Lowenthal                By  /s/ Edward R. Cameron
    ---------------------------------          ---------------------------------
Steven I. Lowenthal, Principal             Edward R. Cameron, President

<PAGE>

                            GUARANTOR ACKNOWLEDGMENT
                               (TWELFTH AMENDMENT)

         The undersigned (collectively the "Guarantor") has entered into certain
Guaranties of various dates (collectively the "Guaranty;" capitalized terms not
otherwise defined herein being used herein as therein defined), pursuant to
which each Guarantor has guarantied the payment and performance of certain
Indebtedness of Appliance Recycling Centers of America, Inc., a Minnesota
corporation ("Borrower") to SPECTRUM Commercial Services Company, a Minnesota
corporation, ("SCS"), which Indebtedness includes, without limitation, all
obligations of Borrower under that certain Revolving Note dated as of August 30,
1996 between the Borrower and SCS as subsequently amended and/or restated (as so
amended the "Original Loan Agreement").

         Each Guarantor hereby acknowledges that it has received a copy of: (a)
the Twelfth Amendment to General Credit and Security Agreement dated as of the
date hereof (the "Loan Agreement") between the Borrower and SCS amending and
restating the Original Loan Agreement;

         Each Guarantor hereby:

                  (a) agrees and acknowledges that the Guaranty applicable to
         each Guarantor shall be of an UNLIMITED AMOUNT, including without
         limitation all of Lender's fees, costs, expenses and attorneys' fees
         incurred in enforcing the Guarantee; and

                  (b) confirms that:

                                    (i) by the Guaranty, the Guarantor continues
                           to guarantee the full payment and performance of all
                           of the Indebtedness owed to SCS, including, without
                           limitation, all obligations of Borrower under the
                           Original Loan Agreement as amended and restated by
                           the Loan Agreement; and

                                    (ii) with respect to each corporate
                           Guarantor, by such Guarantor's Subsidiary Security
                           Agreement, such Guarantor continues to grant a
                           security interest in the "Collateral" described in
                           such Guarantor's Subsidiary Security Agreement to
                           secure the payment and performance of the
                           "obligations" described therein; and

                                    (iii) the Guaranty remains in full force and
                           effect, enforceable against the Guarantor in
                           accordance with its terms.

Dated: April 11, 2002

ARCA-MARYLAND, INC.

By  /s/ Edward R. Cameron
    --------------------------------
 Its  President
      ------------------------------

APPLIANCE RECYCLING CENTERS                 ARCA OF ST. LOUIS, INC.
  OF AMERICA-CALIFORNIA, INC.

By  /s/ Edward R. Cameron                   By  /s/ Edward R. Cameron
    --------------------------------            --------------------------------
 Its  President                              Its  President
      ------------------------------              ------------------------------

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