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                                                                    EXHIBIT 10.6

                                  Exhibit "B"

                               SUPPLEMENTAL LEASE
                               ------------------


     THIS SUPPLEMENTAL LEASE AGREEMENT, made and entered into this 18th day of
April, 1997, by and between the GRAND RAPIDS ECONOMIC DEVELOPMENT AUTHORITY, a
public body politic and corporate and a political subdivision under the laws of
the State of Minnesota, hereinafter referred to as "Landlord", and ASV, INC., a
Minnesota corporation, hereinafter referred to as "Tenant".

                                    RECITALS
                                    --------

     A.   Pursuant to a Lease and Option Agreement dated as of July 14, 1994,
Landlord leased to Tenant certain land situated in the City of Grand Rapids,
County of Itasca and State of Minnesota, described therein (the "Land") together
with certain buildings, structures and improvements (the "Improvements") since
constructed on the Land.

     B.   Landlord is in the process of acquiring fee title to certain
additional land (the "Additional Land"), as described in Exhibit "A" attached,
located in the City of Grand Rapids, County of Itasca, State of Minnesota, to be
leased by Landlord to Tenant pursuant to a this Supplemental Lease.

     C.   Landlord and Tenant desire to supplement and modify the Lease and
Option Agreement to incorporate the Additional Land as well as additions and
improvements to the Improvements, to be constructed upon the Land and the
Additional Land, which improvements and additions shall be referred to as the
"Phase II Development".

     D.   Landlord and Tenant wish to provide for certain lease payments in
addition to the lease payments and other obligations of Tenant pursuant to the
Lease and Option Agreement, which additional lease payments shall be referred to
herein as the Supplemental Rent.

          NOW, THEREFORE, in consideration of the foregoing and the mutual
obligations of the parties hereto, each of them does hereby covenant and agree
with the others as follows:
                                   ARTICLE I
                                      TERM
                                      ----
     1.1  The term of the Lease and Option Agreement shall not be changed or
          modified, and shall terminate twenty years from the

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          effective date of commencement of term of the Lease and Option
          Agreement as set forth in that certain Commencement of Lease
          Memorandum referenced in Exhibit "B" to the Lease and Option
          Agreement, and dated July 14, 1994.

                                   ARTICLE II
                                      RENT
                                      ----
     2.1  In addition to the monthly rent payable pursuant to the Lease and
          Option Agreement and the Commencement of Lease Memorandum, Tenant
          shall pay Supplemental Rent, determined as follows:

          A. On or before the due date of any payment which Landlord is
             obligated to pay Norwest Bank Northern Minnesota N.A. (the "Bank")
             pursuant to any Note, Mortgage or other loan document made and
             entered into to enable construction of the Phase II Development
             (the "Loan"), a copy of which Note and Mortgage are attached hereto
             as Exhibits "B-1" and B-2", respectively, Tenant shall pay to
             Landlord an amount equal to that sum so payable to the Bank. Tenant
             may, upon appropriate written notice to Landlord, make arrangements
             to make such payments directly to the Bank.
          B. Any amount payable by Tenant to Landlord pursuant to that certain
             Supplemental Development Agreement of this date, and in particular
             subsections 2.4 and 2.5 thereof, shall be immediately due and
             payable by Tenant to Landlord upon written notification by Landlord
             to Tenant that such costs have been incurred by Landlord.

                                  ARTICLE III
                                     OPTION
                                     ------
     3.1  The Option contained in Article III of the Lease and Option Agreement
          shall continue unaffected by this Supplemental Lease, provided,
          however, that as a condition to exercise of the Option by Tenant,
          Tenant shall, on or before closing of the transfer of the Option
          Property cause any Note, Mortgage or other security document given to
          the Bank by Landlord pursuant to the Loan to be satisfied, and shall
          further pay in full any amount due Landlord pursuant to the
          Supplemental Development Agreement.

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     3.2  The Option Agreement between Landlord and Tenant dated as of July 14,
          1994, with respect to the Additional Land shall continue in full force
          and effect, provided that exercise of that Option Agreement, to be
          effective, must be exercised simultaneously with the Option referenced
          in Section 3.1 above. Likewise, for the Option referenced in Section
          3.1 above to be effectively exercised, it must be so exercised
          contemporaneously with the Option referenced in this Section 3.2.

                                   ARTICLE IV

        CONTINUED OBLIGATIONS PURSUANT TO THE LEASE AND OPTION AGREEMENT
        ----------------------------------------------------------------

     4.1  Except as is specifically deleted, replaced or otherwise modified by
          express terms of this Supplemental Lease, all terms and conditions of
          the Lease and Option Agreement shall continue in full force and
          effect, unaffected by this Supplemental Lease.

     4.2  All representations, warranties, covenants and obligations contained
          in the Lease and Option Agreement not so deleted, replaced or
          modified, are hereby ratified and reaffirmed by Landlord and Tenant,
          to extend to the Additional Land and the Phase II Development.

     4.3  Tenant shall modify and update the insurance policies required under
          Article IV of the Lease and Option Agreement to include the Additional
          Land and the Phase II Development, under the same terms, conditions
          and obligations of that Article.

     4.4  The obligations of Tenant relating to taxes and special assessments
          pursuant to Article V of the Lease and Option Agreement shall be
          extended to include and provide for the Additional Land and Phase II
          Development.

     4.5  All other provisions of the Lease and Option Agreement relating to the
          Land and the Lease to Property shall extend and be applicable to the
          Additional Land and the Phase II Development.

     4.6  Any default under the Lease and Option Agreement shall be deemed a
          default hereunder, and any default of the terms of this Supplemental
          Lease shall, likewise, be deemed a default of the Lease and Option
          Agreement.

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     4.7  The provisions of Article XXV of the Lease and Option Agreement
          regarding environmental matters shall extend to the Additional Land
          and the Phase II Development.

                                   ARTICLE V

                             ONE PARCEL OF PROPERTY
                             ----------------------

     5.1  Tenant for all purposes other than as specifically set forth herein
          Landlord and Tenant shall deem the Land, the Additional Land, the
          Improvements and Phase II Development to constitute one parcel of
          property, as improved, which may not be separately operated by Tenant,
          its successors or assigns for any purpose.

                                   ARTICLE VI

                                ENTIRE AGREEMENT
                                ----------------

     6.1  Tenant and Landlord hereby agree that this Supplemental Lease as
          written represents the entire agreement between the parties hereto and
          that there are no other agreements, written or verbal, between the
          parties hereto pertaining to the Leased property or the subject matter
          hereof except the Development Agreement entered into as of July 14,
          1994, the Supplemental Developmental Agreement entered as of this date
          and the Lease and Option Agreement entered into as of July 14, 1994.
          The Supplemental Lease may not be amended or supplemented orally but
          only by an agreement in writing which has been signed by the party
          against whom enforcement of any such amendment or supplement is
          sought.

                                  ARTICLE VII

                            SHORT FORM OR MEMO LEASE
                            ------------------------

     7.1  Both parties agree not to record this Supplemental Lease: but each
          party hereto agrees, at the request of the other, to execute a so-
          called "short form" of lease in form recordable and reasonably
          satisfactory to Landlord's attorneys. In no event shall such "short
          form" lease set forth the rental and other charges payable by Tenant
          under this Lease, and any such "short form" lease shall expressly
          state that it is executed pursuant to the provisions contained in this
          Supplemental Lease and is not intend to vary the terms and conditions
          of this Supplemental Lease.

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     IN WITNESS WHEREOF, Landlord and Tenant  have each caused this Agreement to
be duly executed in its name and behalf on or as of the date first above
written.


LANDLORD:                                TENANT:


GRAND RAPIDS ECONOMIC                    ASV, INC.
DEVELOPMENT AUTHORITY


BY: /s/ Skip Drake                           BY: /s/Gary Lemke
   ---------------                               -------------
     SKIP DRAKE                                   GARY LEMKE
        Its President                               Its President


AND:/s/ Thomas Saxhaug
    ------------------
    THOMAS SAXHAUG
        Its Vice President



STATE OF MINNESOTA  )
                    ) ss.
COUNTY OF ITASCA    )

     The foregoing instrument was acknowledged before me this 18th day of April,
1997, by Skip Drake and Thomas Saxhaug, the President and Vice President,
respectively, of the Grand Rapids Economic Development Authority, a public body
politic and corporate and a political subdivision under the laws of the State of
Minnesota, on behalf of the body.


                                                      /s/ Sara L. Holum
                                                      --------------------------
                                                          Notary Public



STATE OF MINNESOTA  )
                    ) ss.
COUNTY OF ITASCA    )

     The foregoing instrument was acknowledged before me this 17th day of April,
1997, by Gary Lemke, the President, of ASV, Inc. a corporation under the laws of
the State of Minnesota, on behalf of the corporation.


                                                      /s/ Jacquelyn M. Berard
                                                      --------------------------
                                                          Notary Public

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                               LISTS OF EXHIBITS



Exhibit "A" - Land Description

Exhibit "B" - Commencement of Lease Memorandum

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