##### 



EXHIBIT 10.4
 COMMERCIAL ALLIANCE AGREEMENT
 rd VERMEER MANUFACTURING COMPANY A.S.V., INC.
      
 1.
    
    Consent by Vermeer. Vermeer hereby consents to ASV signing separate dealer
agreements with Vermeers Industrial Dealers for the distribution of ASV products which do
not directly compete with Vermeer products, and will not require that ASV pay a
distribution rights commission to Vermeer. ASV shall be solely responsible for any rights
and obligations arising out of supplying ASV products to Vermeers Industrial Dealers.2.
    
    Withdrawal upon Failure of Vermeer Industrial Dealer to Adequately Represent
Vermeer Products. Vermeer reserves the right to withdraw its consent with respect to a
particular Vermeer Industrial Dealer for ASV products to be distributed in the
Vermeer-branded facilities of such Vermeer Industrial Dealer in the event such Vermeer
Industrial Dealer, as a result of the distribution of ASV products by such Vermeer
Industrial Dealer, is not providing the adequate focus, effort, capital, etc. to meet the
reasonable goals and expectations uniformly applied to all Vermeer Industrial Dealers.
 Page 1 of 17




---



##### 



3.
    
    Exclusive Supply of ASV OEM Components to Vermeer Target Markets. Subject to
the terms and conditions hereof, ASV agrees to exclusively sell, with respect to the
Vermeer Target Markets, the ASV OEM Components to Vermeer. For purposes of this provision
and this Agreement, ASV OEM Components shall mean any and all undercarriages, tracks and
track assemblies designed, manufactured and/or sold by ASV and any related product
offerings developed during the term of this Agreement. For purposes of this provision and
this Agreement, Vermeer Target Markets shall mean those classes of uses, applications
and/or customer types set forth on Exhibit A hereto or such others as may be added by
mutual agreement of the Parties from time to time. During the term of this Agreement, ASV
agrees not to sell ASV OEM Components to other original equipment manufacturers for use in
direct competition to Vermeer Products in the Vermeer Target Markets.4.
    
    Vermeer Conversion/Development of Products Utilizing ASV OEM Components.
Vermeer agrees that it shall be primarily responsible for Vermeer product development or
enhancement to include the use of ASV OEM Components. Vermeer shall support such
development or adaptation of ASV OEM Components to Vermeer Products in response to market
demands and constraints, mechanical fit-up, performance and economic justification.5.
    
    Application Assistance Adapting ASV OEM Components. ASV agrees to provide
reasonable assistance to Vermeer to convert the ASV OEM Components to be the primary ground
drive system of the Vermeer Products that will utilize such ASV OEM Components. Such
assistance will include, but not be limited to, FEA analyses, computer aided modeling of
ASV OEM Components and the equipment structures affixed thereto, load bearing tests, center
of gravity modeling, durability testing, stress testing and hydraulic system component
application approval.6.
    
    Documentation Assistance Regarding ASV OEM Components. ASV agrees to provide,
at no additional cost to Vermeer, written and/or electronic versions or copies (in editable
form) of Operators, Maintenance/Service and Parts Manuals applicable to the ASV OEM
Components and ASV consents to Vermeers commercial use of such materials in the
preparation of any Operators, Maintenance/Service and Parts Manuals for Vermeer Products
containing such ASV OEM Components. ASV agrees to provide updates to Vermeer regarding the
ASV OEM Components previously supplied to Vermeer contemporaneously with the timing of the
release of such updates for ASVs own use with respect to ASVs Posi-Track Rubber Track
Loaders utilizing substantially similar components. Vermeer is not required to use ASV
parts numbering scheme or otherwise indicate that the illustration provided is from ASV.
 Page 2 of 17




---



##### 



7.
    
    Purchasing and Selling Procedure for ASV OEM Components.
 a)
    
    Ordering Procedure. All orders by Vermeer for its inventory and/or for
resale to its dealers shall be placed through the issuance by Vermeer of a purchase
order subject to the provisions of this Agreement. ASV will acknowledge each order
stating its acceptance of both quantities and deliveries. In the event of any conflict
between the provisions of any purchase order, order acknowledgement, or other document
and this Agreement, the provisions of this Agreement shall be controlling. Direct
orders from dealers invoiced through Vermeer shall be handled by the dealer purchase
order.b)
    
    Forecast of Orders. Vermeer will provide a rolling twelve (12) month
forecast to ASV to give visibility to its intended usage of ASV OEM Components.
However, the forecast is NOT a firm order. Orders can only be made by issuing a
purchase order as set forth in subsection (a) above.c)
    
    Delivery. The date of delivery shall be set forth on Vermeers purchase
order and accepted by ASV on the order acknowledgment. ASV shall establish a firm
delivery schedule in accordance with the respective purchase order. Vermeer may, from
time to time, direct ASV to ship the ASV OEM Components directly to its authorized
dealers or the ultimate retail customer. Risk of loss and responsibility for all
charges and freight for ASV OEM Components ordered by Vermeer shall pass to Vermeer
upon delivery to the common carrier at ASV facility in Grand Rapids, Minnesota.d)
    
    Invoicing and Payment. All ASV OEM Component orders placed by Vermeer
or its dealers shall be invoiced to Vermeer upon shipment in accordance with the
applicable purchase order, as accepted. Such Invoices shall be paid within thirty (30)
days of the date of invoice.
 8.
    
    Parts Supply for ASV OEM Components.
 a)
    
    Parts Supply. Vermeer agrees to purchase from ASV 100% of its
requirements for ASV OEM Components parts sourced or manufactured by ASV to its design.
ASV agrees to maintain sufficient supply capabilities for the purpose of providing
Vermeer a reasonable stock of service parts manufactured or sourced by ASV for the ASV
OEM Components sold to Vermeer. ASVs obligations under this subsection shall be in
effect for a period of not less than ***** (*****) years after delivery of ASV OEM
Components to Vermeer for which service parts are used. Obligations under this
subsection shall not be affected by the termination of this Agreement and shall extend
to parts manufactured or sourced by ASV to its design but shall not extend to
off-the-shelf parts purchased by ASV from outside sources which can be easily obtained
by Vermeer.
 
 *****
    
    Denotes confidential information that has
been omitted from the exhibit and filed separately, accompanied by a
confidential treatment request, with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Page 3 of 17




---



##### 



b)
    
    Dual Distribution Activities Regarding Parts. ASV will continue to
have the right to sell parts related to the ASV OEM Components provided to other
original equipment manufacturers for ASV OEM Components not in Vermeer Target Markets.
The following shall be applicable to ASV and Vermeer during the term of parts supply:
 i)
    
    No comparative claims to Others product. Vermeer and
ASV agree not to make comparative, compatibility or similarity claims or other
comparison graphics or matrices, between the ASV OEM Components sold to Vermeer
and the comparable, compatible or similar ASV OEM Components sold directly by a
third party or through a third partys distribution channel. Neither Party
may issue advertising materials which include printed statements that
acknowledge that the ASV OEM Components are identical, if that is the case.ii)
    
    Exclusion of Other Sales Materials in Product
Packaging. ASV agrees not to provide advertising or other materials
regarding the ASV or other non-Vermeer branded ASV OEM Components in any ASV
OEM Component shipments to Vermeer, its dealers or its customers.iii)
    
    Use of Information Gained Through Vermeer or ASV.
Vermeer and ASV agree to not use any customer lists provided from the other for
other than their intended purpose in carrying out their actions under this
Agreement. Each must independently source materials used to solicit customers
in such channels.
 9.
    
    Pricing of ASV OEM Components. ASV agrees to provide ASV OEM Components at
prices to be established at a gross margin of ***** percent (*****%). Changes in ASVs
cost structure necessitating an increase or decrease in the price shall be provided in
writing to Vermeer, to be effective with respect to all orders placed more than thirty (30)
days after delivery of such written notice. ASV will, whenever possible, endeavor to
change prices to coincide with Vermeers annual price change to the Vermeer Industrial
Dealers. Every effort will be made to limit changes to such a time frame when possible.
All prices are F.O.B. Grand Rapids, Minnesota.10.
    
    Pricing of ASV OEM Component Parts. ASV shall sell ASV OEM Component parts
directly to Vermeer for distribution through Vermeers parts distribution system. The
parts will be sold to Vermeer at ASVs dealer net price minus ***** percent (*****%).11.
    
    Other Product and Distribution Opportunities. Compact Skid-Steers,
mini-excavators and other products, markets and distribution opportunities may be added to
Exhibit A to this Agreement as mutually agreed upon by the Parties.
 
 *****
    
    Denotes confidential information that has
been omitted from the exhibit and filed separately, accompanied by a
confidential treatment request, with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Page 4 of 17




---



##### 



12.
    
    Term of Agreement. This Agreement shall commence on the date hereof and shall
remain in force for eight (8) years with automatic one-year renewal periods unless either
party gives the other party prior written notice of termination at least 6 months before
the end of the current term. Notwithstanding the foregoing, this Agreement may be
terminated earlier by mutual agreement of the Parties or as set forth in subsections (a),
(b) or (c) below:
 a)
    
    Termination by ASV. If Vermeer fails to perform this Agreement in any
material respect (and does not remedy such failure to the satisfaction of ASV within
sixty (60) days after written notice thereof has been delivered to Vermeer), or becomes
insolvent, bankrupt or consents to the appointment of a trustee or receiver, or if a
trustee or receiver is appointed for Vermeer without the consent of Vermeer and such
trustee or receiver is not discharged within sixty (60) days, or if any bankruptcy,
reorganization, arrangement or liquidation proceedings are instituted by Vermeer or
instituted against it and consented to by Vermeer or permitted to remain undismissed
for sixty (60) days, or if Vermeers shares, management, ownership or substantially all
Vermeers property is confiscated, nationalized, expropriated or otherwise taken by
governmental action, then in such event(s), ASV may terminate this Agreement
immediately upon written notice to Vermeer.b)
    
    Termination by Vermeer. If ASV fails to perform this Agreement in any
material respect (and does not remedy such failure to the satisfaction of Vermeer
within sixty (60) days after written notice thereof has been delivered to ASV), or
becomes insolvent, bankrupt or consents to the appointment of a trustee or receiver, or
if a trustee or receiver is appointed for ASV without the consent of ASV and such
trustee or receiver is not discharged within sixty (60) days, or if any bankruptcy,
reorganization, arrangement or liquidation proceedings are instituted by ASV or
instituted against it and consented to by ASV or permitted to remain undismissed for
sixty (60) days, or if ASVs shares, management, ownership or substantially all ASVs
property is confiscated, nationalized, expropriated or otherwise taken by governmental
action, then in such event(s), Vermeer may terminate this Agreement immediately upon
written notice to ASV.c)
    
    Change in Control of ASV. In the event of a change in control of ASV
(as defined below) Vermeer shall have the right to terminate this Agreement effective
immediately. For purposes of this subsection (c), Change in Control shall mean:
 i)
    
    The acquisition by any third party or group of parties acting
in concert of at least thirty percent (30%) of the outstanding shares of common
stock of ASV; orii)
    
    A change in a majority of the directors of ASV occurring in a
period of less than one year, excluding, to the extent no solicitation in
opposition has theretofore been announced or commenced, changes in directors
resulting from the election of directors at the next regularly scheduled annual
meeting of ASVs shareholders; or
 Page 5 of 17




---



##### 



iii)
    
    The sale, exchange, transfer or other disposition to a third
party of all or substantially all the assets of ASV.
 d)
    
    Change in Control of Vermeer. In the event of a change in control of
Vermeer (as defined below) ASV shall have the right to terminate this Agreement
effective immediately. For purposes of this subsection (d), Change in Control shall
mean:
 i)
    
    The acquisition by any third party or group of parties (other
than current Vermeer shareholders) acting in concert of at least thirty percent
(30%) of the outstanding shares of common stock of Vermeer; orii)
    
    The sale, exchange, transfer or other disposition to a third
party of all or substantially all the assets of Vermeer.
 13.
    
    Product Responsibility.
 a)
    
    Design Responsibility for ASV OEM Components. ASV shall be completely
and solely responsible for final decisions on the design, safety labeling or
instruction, development, engineering and research concerning ASV OEM Components.
Vermeer may from time to time suggest new features or changes in the design of ASV OEM
Components and ASV shall incorporate such new features and/or design changes wherever
it believes that such will not adversely affect the performance, durability or safety
of ASV OEM Components or cause such ASV OEM Components to infringe on any intellectual
property rights of third parties.b)
    
    Disclosure of Failures. ASV shall also provide Vermeer with a report
of product liability insurance claims made during the preceding five (5) years which
includes, to the best of ASVs knowledge, the names of any persons alleged to have been
injured for reasons alleged to be caused by the ASV OEM Components, the circumstances
surrounding such claim(s) and the resolution of such claim(s). ASV shall have a
continuing duty during the term of this Agreement and for five (5) years after its
termination to generate such report upon the specific request of Vermeer. As of the
date of this Agreement, ASV represents and warrants that, to the best of ASVs
knowledge there are no present or threatened claims asserted by any persons with regard
to the ASV OEM Components.
 14.
    
    Intellectual Property Rights.
 a)
    
    Intellectual Property Relating to Vermeer Machines. Any patents,
copyrights, trade secrets, designs, drawings, know-how or any other intellectual
property developed by either Party or jointly developed by the Parties specifically for
the Vermeer machine shall be owned by Vermeer. ASV agrees to acknowledge and deliver
promptly to Vermeer without charge such written instruments as may be necessary to vest
the entire right, title and interest in the same in Vermeer.
 Page 6 of 17




---



##### 



Vermeer agrees to negotiate in good faith with ASV for licensing such intellectual
property to ASV on a non-exclusive, reasonable royalty basis, if so requested by
ASV.
 b)
    
    Intellectual Property Relating to ASV OEM Components. Any patents,
copyrights, trade secrets, designs, drawings, know-how or any other intellectual
property developed by either Party or jointly developed by the Parties specifically for
the ASV OEM Components shall be owned by ASV. Vermeer agrees to acknowledge and
deliver promptly to ASV without charge such written instruments as may be necessary to
vest the entire right, title and interest in the same in ASV. ASV agrees to negotiate
in good faith with Vermeer for licensing such intellectual property to Vermeer on a
non-exclusive, reasonable royalty basis, if so requested by Vermeer.c)
    
    Intellectual Property Jointly Developed. Any patents, copyrights,
trade secrets, designs, drawings, know-how or any other intellectual property jointly
developed by the Parties which is not covered by Sections 14(a) or 14(b) shall be
jointly owned by the Parties; provided, however, that a party shall seek the express,
written approval of the other before the jointly developed intellectual property is
licensed by such party to another, with appropriate provisions made for accounting of
royalties received on such joint intellectual property.
 15.
    
    ASV Quality Agreement.
 a)
    
    Workmanship shall be such that the ASV OEM Components will be free of any
defects, improper manufacturing or assembly practices that are detrimental to the
performance of the ASV OEM Components.b)
    
    A quality system shall be maintained and documented. Detailed test and
inspection methods used to assure the quality of the ASV OEM Components must be
submitted for Vermeers review. ASV OEM Components shall be numbered with ASV serial
numbers. ASV and Vermeer shall cooperate in recording and tracking units.c)
    
    Inspection records of all inspections, tests, audits, and critical/major
characteristic inspection shall be maintained and available for Vermeers review during
regular business hours. At least a quarterly on-site review by a Vermeer
representative is anticipated.d)
    
    Service parts manufactured by ASV will be governed by all of the above items.
 16.
    
    Warranty. ASV expressly warrants that all ASV OEM Components sold to Vermeer
pursuant to this Agreement will conform to the specifications, drawings, samples, or other
descriptions furnished and specified by ASV and will be free of defects in design,
material, workmanship, manufacturing, warning or instruction material at the time of
delivery to Vermeer and as set forth below.
 Page 7 of 17




---



##### 



a)
    
    Replacement or Credit Prior to Retail Sale. ASV will, without expense
to Vermeer, replace or credit to the account of Vermeer as ASV may elect, any of such
ASV OEM Components which, prior to resale by Vermeer, may be found not to meet this
warranty and which are returned to ASV with prior notification.b)
    
    Warranty. ASV agrees to a one (1) year warranty from date of final
customer purchase on product defects due to design, material, workmanship or
manufacturing, warning or instruction material. ASV liability for repair will be
limited to repair or replacement of defective parts and a provision for reasonable
labor to make such repair in accordance with the rates established under Vermeers
dealer warranty reimbursement program and shall be a credit to Vermeers account with
ASV in the event Vermeer provides the required part or labor reimbursement on to its
dealer performing the warranty service. Warranty work must be performed by the selling
Vermeer authorized dealer. The machine owner is responsible for causing the delivery
of the machine to that selling authorized Vermeer dealer. ASV will not reimburse
transportation, rental or inconvenience costs. ASV reserves the right to inspect the
part prior to any decision involving a warranty claim. In no case shall ASV grant a
remedy that exceeds the purchase price of the component or part. ASV warrants its
rubber tracks pursuant to its standard warranty attached hereto as Exhibit B.c)
    
    Widespread Failure. In addition to the obligations hereunder imposed
upon ASV, should any widespread failure due to design, material, workmanship or
manufacturing on ASV OEM Components occur, then and in such instance, ASV shall be
responsible for parts and labor (or at ASVs option pay for Vermeer labor) as shall be
required to remedy such failure, both with respect to ASV OEM Components in use and in
inventory of Vermeer or affiliated companies and that of their dealer organizations.
Vermeer, pending correction of the failure, may defer further purchases of the ASV OEM
Components affected. If within sixty (60) days of advise from Vermeer of a widespread
failure ASV shall not have instituted reasonable procedures for the rectification of
such failure, Vermeer may return to ASV for full purchase price credit (including
freight) all ASV OEM Components affected by the failure then in the inventory of
Vermeer or its affiliated companies and of their dealer organizations, together with
such ASV OEM Components as have been returned by users thereof, and Vermeer shall be
relieved of any and all obligation to purchase any additional ASV OEM Components
hereunder and at Vermeers election either terminate the contract or defer an
obligation until such time that the failure has been rectified. For purposes of this
Paragraph 16.c., widespread failure shall mean the occurrence of defects and failures
in the warranty period in excess of *****% on units purchased, after a minimum
population of twelve (12) months of sales is established.d)
    
    Widespread Failure Exemption. *****.
 
 *****
    
    Denotes confidential information that has
been omitted from the exhibit and filed separately, accompanied by a
confidential treatment request, with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Page 8 of 17




---



##### 



e)
    
    Disclaimer of Other Warranties. THIS WARRANTY IS IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
 17.
    
    Product Liability.
 a)
    
    Duty to Indemnify, etc. ASV agrees, now and hereafter, to defend,
protect, hold harmless and indemnify Vermeer and its affiliates from and against any
and all claims for injury, loss or damage of any kind, whether direct or consequential,
compensatory or punitive, which results or allegedly results from a defect in design,
material, workmanship, manufacturing, safety labeling, warning or instructional
material of the ASV OEM Components. Said indemnity shall include all expenses and
reasonable attorneys fees attributable thereto. Vermeer agrees to promptly notify ASV
of any such claim or suit and ASV shall be obligated to defend, settle or otherwise
dispose of such claim or suit through counsel of its own choosing. This undertaking to
indemnify and hold harmless by ASV is understood by the Parties to deal with
negligence, as well as other grounds of liability, and shall not be avoided on the
ground that contractual indemnification of a party against its own actual or alleged
negligence is unenforceable or contrary to public policy due to the absence of a clear
undertaking.b)
    
    Duty to Indemnify, etc. Vermeer agrees, now and hereafter, to defend,
protect, hold harmless and indemnify ASV and its affiliates from and against any and
all claims for injury, loss or damage of any kind, whether direct or consequential,
compensatory or punitive, which results or allegedly results from a defect in design,
material, workmanship, manufacturing, safety labeling, warning or instructional
material of the Vermeer machines, excluding the ASV OEM Components. Said indemnity
shall include all expenses and reasonable attorneys fees attributable thereto. ASV
agrees to promptly notify Vermeer of any such claim or suit and Vermeer shall be
obligated to defend, settle or otherwise dispose of such claim or suit through counsel
of its own choosing. This undertaking to indemnify and hold harmless by Vermeer is
understood by the Parties to deal with negligence, as well as other grounds of
liability, and shall not be avoided on the ground that contractual indemnification of a
party against its own actual or alleged negligence is unenforceable or contrary to
public policy due to the absence of a clear undertaking.c)
    
    Insurance. ASV agrees to purchase and maintain, from an insurance
company acceptable to Vermeer, product and completed operation liability and blanket
contractual liability insurances (providing coverage at least equivalent to that under
the rating bureaus standard comprehensive general liability policy) with limits of
$***** per occurrence and in the aggregate annually for bodily injury
 
 *****
    
    Denotes confidential information that has
been omitted from the exhibit and filed separately, accompanied by a
confidential treatment request, with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Page 9 of 17




---



##### 



and property damage. ASV agrees to submit to Vermeer upon execution hereof and
thereafter to keep on file with Vermeer a current Certificate of Insurance
evidencing compliance with the aforementioned insurance requirements and obligating
the insurer to give Vermeer at least thirty (30) days prior written notice of
cancellation, material change or intent not to renew. In the event ASV fails to
purchase the aforementioned insurance or to pay any premium thereon when due,
Vermeer, at its option, may, after giving written notice to ASV, purchase such
insurance or pay any premium due and subsequently charge ASV for the amount thereof
or offset said amount from any balances due ASV.
 18.
    
    Safety Standards. ASV OEM Components shall comply with all North American
industry and governmental standards in effect at the time of shipment, including labeling
requirements of such standards. Additional safety features developed by ASV or common to
other similar ASV OEM Components, will be incorporated into ASV OEM Components sold to
Vermeer as soon as practical and at least as soon as similar features are incorporated into
ASVs other similar ASV OEM Components.19.
    
    Modification of ASV OEM Component Design and New Designs. The Parties agree to
cooperate to ensure that ASV OEM Components are modified and improved to remain fully
competitive in the market. ASV agrees to provide Vermeer a 30-day option (from the date
the working prototype is submitted for evaluation) to purchase, exclusively for the Vermeer
Target Markets, any new ASV OEM Components ASV develops, under the terms of this Agreement.20.
    
    Parts Return Option. Vermeer may, at its election, annually return to ASV
***** percent (*****%) of the previous years dollar volume of new, saleable and undamaged
repair parts. Annual periods under this Paragraph shall be the Vermeer fiscal year,
November 1 to October 31. Vermeer shall be credited upon such return an amount equal to
***** percent (*****%) of the Vermeer invoice prices not later than October 31 of each
year. All costs of redelivering such parts to the place of business of ASV shall be borne
by Vermeer.21.
    
    Patents. In the event a suit or proceeding is brought against either Party, so
far as it is based on a claim that any ASV OEM Component, or any part thereof furnished
under this Agreement, constitutes an infringement of any patent of the U.S. or other
sovereign nation, ASV shall defend such suit or proceeding at its sole expense. ASV shall
pay all damages and costs awarded therein. In case said ASV OEM Component or part thereof
is in such suit held to constitute infringement and the use of said ASV OEM Components or
part is enjoined, then ASV shall at its expense, either procure for Vermeer the right to
continue using the ASV OEM Components or part, replace the infringing element with a
noninfringing substitute, or modify the ASV OEM Components so it becomes noninfringing, or
remove the ASV OEM Components and refund the purchase price and the transportation cost
thereof.
 Page 10 of 17




---



##### 



22.
    
    Force Majeure. Notwithstanding these provisions or other Paragraphs to the
contrary, neither ASV nor Vermeer shall be liable for failure to perform hereunder arising
from causes or events beyond the control and without fault or negligence of ASV or
including without limitation causes or events such as strikes, insurrection, war, riot,
natural disaster, shortage of material or Acts of God.23.
    
    Confidential Information. The Parties hereto agree to use reasonable efforts
to prevent the disclosure to third parties, during the term of this Agreement, of all
confidential information which may be or has been disclosed by either Party to the other
(including business information of the Parties which is exchanged in developing and
operating under this Agreement), and agree to maintain such information in confidence for a
period of not less than five (5) years after termination of this Agreement; provided,
however, that each of the Parties hereto shall be free to use and disclose such information
if it: (a) was in its possession prior to the effective date of this Agreement without
obligation of confidentiality to the other party hereto (any prior confidentiality
agreements entered into between the parties hereto shall remain in effect); or (b) is
acquired from a third party who had the right to convey the information; or (c) is
otherwise publicly available; provided further, that either Party may make any public
disclosure it believes in good faith is required by applicable law or any listing or
trading agreement concerning its publicly traded securities (in which case the disclosing
Party will use its reasonable best efforts to advise the other Party prior to making the
disclosure.)-24.
    
    Notice. Notice to be given by either party under this Agreement shall be in
writing and shall be given by Certified or Registered Mail.
 Notices to ASV shall be sent to
 
 Page 11 of 17




---



##### 



Notices to Vermeer shall be sent to
 
 
 25.
    
    Entire Agreement. This Agreement contains the entire and only agreement
between the parties hereto relating to the ASV products and ASV OEM Components and wholly
cancels, terminates and supersedes any agreement written or verbally made or purported to
have been made heretofore between the parties with respect to the manufacture and sale of
ASV OEM Components and ASV products unless referred to herein.26.
    
    Amendment. No amendment or addition to or deletion from this Agreement or any
of the provisions thereof shall be binding upon the parties unless made in writing and
signed by duly authorized employees of both.27.
    
    Waiver. No departure from or waiver of or omissions to require compliance with
any of the terms hereof by either party shall be deemed to authorize any prior or
subsequent departure or waiver or permit or agree to any subsequent departure or waiver.28.
    
    Assignment. This Agreement shall not be assignable by either party without the
express written consent of the other party. This Agreement shall, however, be binding upon
any successor to the business of either party.29.
    
    Choice of Law. This Agreement shall be governed and construed in accordance
with the laws of the State of Delaware.30.
    
    Exclusive Remedy. The parties agree that all claims, controversies and
disputes which arise out of or relate to this Agreement, or which relate to the
interpretation or breach of this Agreement (hereinafter collectively referred to as
claims) shall be resolved in accordance with mediation and arbitration provisions
specified herein.31.
    
    Mediation, Arbitration. If a dispute, controversy, or claim arises out of or
relates to this Agreement, its termination or non-renewal, or the alleged breach thereof,
and if said dispute cannot be settled through direct discussions between the Parties, the
Parties agree to first endeavor to settle the dispute in an amicable manner by mediation
with an independent mediator selected by mutual agreement of the Parties.
 Page 12 of 17




---



##### 



If the Parties are unable to agree on a mediator, mediation shall be administered by the
American Arbitration Association under its Commercial Mediation Rules. If the matter
has not been resolved through mediation within thirty (30) days of the commencement of
such mediation (which period may be extended by mutual agreement in writing), then any
unresolved dispute, controversy, or claim arising out of or relating to this Agreement,
its termination or non-renewal, or the alleged breach thereof, shall be settled by
arbitration administered by the American Arbitration Association in accordance with its
Commercial Arbitration rules, and judgment upon the award rendered by the arbitrator,
may be entered in the Iowa District Court for Polk County or any state or federal court
having jurisdiction. The arbitration shall be conducted by a single arbitrator. The
arbitration proceedings shall be governed by and conducted in accordance with Iowa Code
Chapter 679A (1998), as amended from time to time, as supplemented by the Commercial
Arbitration Rules of the American Arbitration Association, to the extent not
inconsistent with Chapter 679A. The arbitrator shall allow each Party to conduct
limited relevant discovery. The arbitrator shall have no authority to award punitive
damages or any damages not measured by the prevailing Partys actual damages, and may
not, in any event, make any ruling, finding or award that does not conform to the terms
and conditions of this Agreement. All fees and expenses of the arbitration shall be
borne equally by the Parties; provided, however, each Party shall bear the expenses of
their respective counsel, experts, witnesses, and preparation and presentation of the
arbitration matters. Any such arbitration shall be conducted in Polk County, Iowa,
unless mutually agreed in writing by the Parties. The provisions of this Article of
this Agreement shall survive the termination of this Agreement and shall be a complete
bar and defense to any suit, action or proceeding instituted in any court or tribunal
with respect to any controversy or dispute which is arbitrable as set forth in this
Agreement.
  Vermeer Manufacturing CompanyBy   /s/ Kevin
L. AlftTitle  Kevin
L. Alft, VP  UndergroundA.S.V., Inc.By   /s/ Mark
S. GlasnappTitle  Mark
S. Glasnapp, President
 Page 13 of 17




---



##### 



*****
    
    Denotes confidential information that has been omitted from the exhibit and filed
separately, accompanied by a confidential treatment request, with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Page 14 of 17




---



##### 



Page 15 of 17




---



##### 



ASV WARRANTY
R-Series All Surface Loader Rubber Track
   Warranty Period
  ASV Responsibilities
  
    
    At ASVs choice, repair or provide an allowance toward the purchase of a new rubber
track. Such allowance will be based on accrued hours. Allowance will be calculated as
follows:
 User Allowance
 Track hours
    
    X 100 = User Cost (%)1000 hours
 
    
    Figures can be obtained from your ASV dealer.
 User Responsibilities
  
    
    Providing proof of the delivery date to the first user.
    
    The cost associated with transporting the product to and from the place of business of an
ASV dealer or other source approved by ASV.
    
    Costs associated with labor.
    
    Local taxes, if applicable.
    
    Parts shipping charges in excess of those, which are usual and customary.
    
    Costs to investigate complaints, unless the problem is caused by a defect in ASV material or workmanship.
    
    Giving timely notice of a warrantable failure and promptly making the product available for repair.
 Limitations
  
    
    Any use or installation, which ASV judges improper.
    
    Abuse, neglect and/or improper repair.
    
    Users delay in making the product available after being notified of a potential product problem.
  Page 16 of 17




---



##### 



For products operating outside of Australia, Fiji, Nauru, New Caledonia, New Zealand, Papua
New Guinea, The Solomon Islands and Tahiti, the following is applicable:
     For products operating in Australia, Fiji, Nauru, New Caledonia, New Zealand, Papua New Guinea, the
Solomon Islands and Tahiti, the following is applicable:
     
 This warranty covers every major component of the products. Claims under this warranty should be
submitted to a place of business of an ASV dealer or other source approved by ASV. For further
information concerning either the location to submit claims or ASV as the issuer of this warranty,
write: All Season Vehicles, Inc. (ASV), 840 Lily Lane, Grand Rapids, Minnesota 55744 USA.
 Page 17 of 17