<PAGE>
 
                                                                   EXHIBIT 10.15

                              MARKETING AGREEMENT
                              -------------------

     This Agreement, dated January 29, 1999 is between A.S.V., Inc., a Minnesota
corporation with a principal place of business at 840 Lily Lane, Grand Rapids,
Minnesota  55744 ("ASV") and Caterpillar Inc., a Delaware corporation with a
principal place of business at 100 Northeast Adams, Peoria, Illinois  61620
("Caterpillar").

     WHEREAS, ASV is engaged in the design, manufacture and sale of all-terrain
rubber tracked vehicles and desires to enhance marketing of its products
throughout the world;

     WHEREAS, pursuant to that certain Securities Purchase Agreement dated
October 14, 1998, Caterpillar has agreed to purchase an equity interest in ASV
and ASV has granted Caterpillar a warrant to purchase a controlling interest in
ASV;

     WHEREAS, Caterpillar possesses the skill, experience and resources to
promote the sale of earth moving and construction equipment to users through
Caterpillar's authorized dealers ("Dealers");

     WHEREAS, initially, ASV wishes Caterpillar to promote the sale of its
equipment and replacement parts therefor under the ASV name to the Dealers, and
ASV desires to sell such equipment and parts directly to Dealers for resale to
users;

     WHEREAS, Caterpillar is willing to grant ASV the right to market its
equipment sold through Caterpillar Dealers under the Caterpillar name and in
Caterpillar trade dress in exchange for an appropriate trademark license fee if
Caterpillar is satisfied, in its sole discretion, that ASV's products meet or
exceed Caterpillar's quality and safety standards;

     NOW, THEREFORE, the parties agree as follows:

     1.   Marketing, Distribution and Product Support.

     1.1  Caterpillar's Responsibilities.

          (a)  Caterpillar shall promote the sale of ASV's products listed in
     Exhibit A ("Products") to Dealers.  Caterpillar's obligation to promote
     shall be staged geographically, commencing with North America, and
     gradually extending throughout the world, consistent with the Joint
     Marketing Plan, as defined in Section 1.3.

          (b)  Caterpillar shall consult with ASV on a regular basis concerning
     Dealer and user demand for Products.

          (c)  Caterpillar's promotions and recommendations of Products will be
     in accordance with ASV's sales materials and technical data timely provided
     by ASV at its own cost to Caterpillar.
<PAGE>
 
          (d)  As soon as practicable after the date hereof, ASV and Caterpillar
     shall cooperate to establish software systems that will enable Caterpillar
     to take orders for complete machines (as described in Exhibit A) from
     Dealers using Caterpillar's order processing systems and retransmit such
     orders to ASV, sharing all costs of systems development, excluding hardware
     costs, on a 50/50 basis.  Caterpillar's cost of processing each order shall
     be paid by ASV.

          (e)  As soon as practicable after the date hereof, Caterpillar shall
     be responsible for administering ASV's warranties for Products sold through
     Dealers.  ASV shall reimburse Caterpillar all costs (including, but not
     limited to parts at the then existing Dealer net price, and labor at the
     then existing Caterpillar warranty service rate), incurred by Caterpillar,
     its Affiliates or Dealers in connection with the repair or replacement of
     any defect in workmanship or material of such Product.

     "Affiliate" for purposes of this Agreement shall mean any person
     (individual, corporation, partnership, limited liability company or other
     entity) that directly or indirectly controls, is under common control of or
     is controlled by either party to this Agreement.  "Control" means the
     ownership, direct or indirect, of fifty percent (50%) or more of the voting
     shares or capital of such person.

     Claims Procedures.  As soon as practicable after the date hereof, ASV and
     Caterpillar shall agree on written procedures for the handling of warranty
     claims and reimbursement. Without limiting their scope, such procedures
     shall provide:

               (1)  That ASV's warranties and warranty administration procedure
          shall be adapted to Caterpillar's existing system so that minimal
          changes to Caterpillar's system will be required;

               (2)  For Caterpillar to provide ASV with a periodic statement of
          such costs, including notice of specific Product failures, and summary
          information on the cause(s) of such failures;

               (3)  For review, at the request of Caterpillar or ASV, of the
          amount and manner of reimbursement, including any trend evidenced by
          Product failures, suggesting a change may be appropriate; and

               (4)  That failed Product shall not be returned to ASV unless ASV
          specifically requests such return at ASV's sole expense.

                                       2
<PAGE>
 
     1.2  ASV's Responsibilities.

          (a) After consultation with Caterpillar, ASV shall forecast demand for
     Product and schedule production accordingly.

          (b) ASV shall be responsible for maintaining appropriate inventories
     of Product awaiting sale or shipment to Dealers.

          (c)  ASV shall notify Caterpillar of any design or engineering changes
     that affect the functionality or performance of any Product promptly after
     ASV's decision to implement such design or engineering changes.

          (d)  ASV shall be responsible for warranting to Dealers and users of
     Products that Products are free from defects in design, material and
     workmanship in accordance with ASV's standard warranty.

          (e)  ASV shall adequately inform itself of, and comply with,
     governmental and quasi-governmental safety, environmental protection,
     certification, approval and other requirements that relate to the sale or
     use of Products  in effect where Products are sold or used.

          (f)  ASV shall, in cooperation with Caterpillar, conduct field follow-
     up and test programs.

          (g)  ASV shall maintain a level of quality for Products that is at
     least as good as the level of quality customers generally associate with
     ASV equipment currently.

          (h)  ASV shall provide required technical and service engineering
     support for Products to Caterpillar and Dealers, at a level acceptable to
     Caterpillar and comparable with the level of technical and product support
     customers generally expect with respect to Caterpillar equipment.  To this
     end, ASV shall employ a suitable number of qualified engineers and
     technicians, and shall provide technical training instruction to
     Caterpillar and Dealers at locations and times reasonably requested by
     Caterpillar and mutually agreed upon.

          (i)  ASV shall develop and provide for the implementation of
     marketing, sales promotion, advertising and merchandising programs to
     enable Caterpillar and Dealers to successfully promote the sale of Product
     to customers.  The costs of marketing, sales promotion, advertising and
     merchandising programs shall be the responsibility of ASV.

          (j)  For a commercially reasonable period of time, ASV may use its
     existing sales and service literature.  After its existing literature is
     exhausted, ASV shall prepare, print and provide to Caterpillar and Dealers,
     sales and service literature for Products, including 

                                       3
<PAGE>
 
     parts books, service manuals, operator manuals, specification sheets and
     such other sales and service literature as Caterpillar may reasonably
     require. Such literature shall be prepared in a format specified by
     Caterpillar and shall be ready for printing and distribution. ASV will also
     provide Caterpillar the right to use any ASV-developed artwork in any
     Caterpillar-developed promotional material and literature relating to
     Product.

          (k)  With the cooperation of Caterpillar, ASV shall train Dealers for
     marketing and servicing Product.  Such sales training shall concern the
     features, capabilities and appropriate applications for Product and shall
     be designed to enable Dealer sales personnel to successfully promote the
     sale of Product.

          (l)  Any costs incurred for ASV's obligations provided for in this
     Section 1.2 shall be borne by ASV.

     1.3  Joint Marketing Plan.  As soon as practical following Closing of the
SPA, Caterpillar and ASV shall form a team to prepare a strategic marketing plan
for the Products. The team shall study the worldwide market opportunity and
develop a phased product introduction plan by geographic area.  The parties
shall each use their best reasonable efforts to implement the strategic
marketing plan.  Caterpillar shall make a good faith effort to encourage its
Dealers to follow the recommendations of this strategic marketing plan.

     2.   Commission.

     2.1  In consideration for Caterpillar's services, ASV shall pay Caterpillar
a commission equal to five percent (5%) of the Dealer net price for complete
machines as described in Exhibit A and three percent (3%) for replacement parts
and ASV-branded attachments as described in Exhibit A, for all Products sold and
delivered to Dealers by ASV, excluding shipping, taxes, returns and warranty
parts.

     2.2  ASV shall send to Caterpillar Attn:  Treasurer, Peoria, IL 61629, a
written report (to be received by Caterpillar not later than the last working
day of January, April, July and October of each year) showing, with respect to
Products sold pursuant to this Agreement, the model and serial number of each
unit of complete machines, if any, the Dealer name, quantity purchased, and
price paid for Product sold by ASV to Dealers during the three (3) immediately
preceding calendar months.  Each report shall also include the number of units
of Product sold during the period covered by the report and the last serial
number assigned.

     2.3  All payments provided for herein shall be made in U.S. dollars by wire
transfer to an account designated from time to time by Caterpillar.  All
payments due and payable by ASV to Caterpillar shall be free and clear of any
deduction of tax assessment, other than taxes on Caterpillar's income, or other
charges.

                                       4
<PAGE>
 
          (a)  Commissions are payable in U.S. dollars calculated using the
     foreign exchange rate, as published by the Wall Street Journal, in effect
     for such foreign currency on the last business day of each calendar quarter
     for which a report is required.

          (b)  All foreign taxes on commission payments imposed upon or required
     to be withheld by ASV shall be deducted from such payments, and evidence of
     such foreign taxes shall be delivered to Caterpillar as part of its
     periodic royalty reports.

     2.4  ASV shall keep and maintain for three (3) years accurate and complete
records in accordance with good accounting practices, showing, in reasonable
detail, all pertinent information with respect to costs, credits, rebates and
sale of Products by ASV to Dealers. Caterpillar, through its duly authorized
representatives (including certified public accountants), shall, upon reasonable
request, to have the right, at its own cost and expense, to examine such records
at reasonable times for the purpose of determining the correctness of the
reports and payments submitted by ASV to Caterpillar as required under this
Agreement.

     2.5  Upon any termination of this Agreement, ASV shall pay commissions as
provided in this Agreement on all sales prior to the date of such termination.

     3.  Transition to Caterpillar Branding.  As soon as practicable after the
date of this Agreement, Caterpillar, in cooperation with ASV, shall begin
evaluating Products against Caterpillar's quality and safety standards following
Caterpillar's established product testing and validation procedures.  All such
evaluations shall be at ASV's expense.  Once this evaluation is complete,
Caterpillar shall communicate the results to ASV together with the changes
Caterpillar in its sole discretion will require before Caterpillar will allow
Products to be sold under the Caterpillar name, including without limitation,
the required use of Caterpillar componentry and changes in appearance and trade
dress.  If ASV makes the changes Caterpillar requires and Caterpillar is
satisfied in its sole discretion that ASV's products meet or exceed
Caterpillar's quality and safety standards, Caterpillar shall grant ASV the
right to sell Products under the Caterpillar name exclusively to Caterpillar
Dealers pursuant to a trademark license agreement substantially in the form of
Exhibit B attached to this Agreement.

     4.   Termination.

     4.1  Unless earlier terminated by mutual agreement of the parties or
pursuant to Sections 4.2 or 4.3 below, this Agreement shall remain in effect for
ten (10) years from the date hereof ("Initial Term").   Following expiration of
the Initial Term, this Agreement shall remain in effect indefinitely; provided
that either party may terminate without cause by giving notice of termination at
least twelve (12) months prior to the intended effective date of termination.

     4.2  If either party fails to perform this Agreement in any material
respect (and does not remedy such failure to the complete satisfaction of the
non-defaulting party, within sixty (60) days after written notice thereof has
been sent to the other party) or becomes insolvent, bankrupt 

                                       5
<PAGE>
 
or consents to the appointment of a trustee or receiver, or if any trustee or
receiver is appointed for the greater part of either party's properties without
the consent of that party and such trustee or receiver is not discharged within
sixty (60) days, or if any bankruptcy, reorganization, arrangement or
liquidation proceedings are instituted by either party or if instituted against
either party are consented to by it or permitted to remain undismissed for sixty
(60) days, or if either party's shares, management, ownership or substantially
all of any party's property is confiscated, nationalized, expropriated or
otherwise taken by any government action, then, in such event, the other party
may terminate this Agreement immediately upon written notice.

     4.3  In the event of any Change in Control of ASV (as defined below),
Caterpillar shall have the right to terminate this Agreement effective
immediately.

     For purposes of this Section 4.3, "Change in Control" shall mean, except
pursuant to the terms of the SPA and the Warrant or with the prior written
consent of Caterpillar:

          (a)  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; or

          (b)  A change of the 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

          (c)  The sale, exchange, transfer or other disposition to a third
     party of all or substantially all of the assets of ASV.

     5.  Confidentiality.   The parties shall maintain the secrecy of
Confidential Information as follows

     "Confidential Information" means all trade secrets, confidential knowledge,
and proprietary data of any kind or nature whatsoever relating to this
Agreement, or the businesses of either party and its Affiliates.  Confidential
Information also shall include any information prepared or developed by a party
in connection with this Agreement, which reflects, interprets, evaluates,
includes or is derived from the Confidential Information of another party.
Confidential Information shall include, but not be limited to, technical
specifications, diagrams, discoveries, economic models, pro forma and other
financial information, designs, business opportunities, cost and pricing data,
records, customer lists, and engineering, manufacturing, and marketing know-how.
Confidential Information does not include information which (i) was generally
known or available to the public at the time of its disclosure hereunder, or
which after such disclosure became generally known or available to the public,
provided that such disclosure was made or occurred through no fault of the
Receiving Party (defined below) or its Affiliates, or its or their officers,
directors, or employees;  (ii) was in the possession of the Receiving Party
prior to its disclosure hereunder;  (iii) was known by the Receiving Party  at
the time of its 

                                       6
<PAGE>
 
disclosure hereunder or was independently developed at any time by the Receiving
Party without reference to the Disclosing Party's (defined below) Confidential
Information; (iv) is required to be furnished pursuant to law or legal process;
or (v) is rightfully obtained, subsequent to its disclosure hereunder, by the
Receiving Party or its Affiliates from a third party who is lawfully in
possession of such information and who is not under an obligation of
confidentiality to the Disclosing Party.

     "Disclosing Party" means the party that discloses Confidential Information.

     "Receiving Party" means the party that receives Confidential Information.

     5.1  In connection with performance of this Agreement, the parties may
disclose to one another certain Confidential Information.

     5.2  The Receiving Party shall hold the Disclosing Party's Confidential
Information in strictest confidence and trust and shall use the Confidential
Information only in connection with the purposes of this Agreement.  The
Receiving Party shall not disclose Confidential Information provided by the
Disclosing Party and/or its Affiliates, or the fact that it has been made
available to the Receiving Party, except that the Receiving Party may disclose
Confidential Information and the fact that it has been provided to those
employees, officers, directors, agents, consultants and representatives of the
Receiving Party and its Affiliates who have a reasonable need to know such
information in connection with the purposes of this Agreement.  The Receiving
Party shall be liable for any breach of the confidentiality obligation hereunder
by any of its Affiliates, or by any of the respective employees, officers,
directors, agents, consultants and contractors of the Receiving Party and/or its
Affiliates.

     5.3  If the Receiving Party is required by law or legal process to disclose
any of the Confidential Information of the Disclosing Party, the Receiving Party
shall promptly notify the Disclosing Party in writing so that the Disclosing
Party may seek an appropriate protective order or other remedy at the sole cost
of the Disclosing Party.  If no such protective order or other remedy is
obtained, the Receiving Party shall furnish only that portion of such
Confidential Information that is legally required and will exercise its
reasonable efforts to obtain reliable assurances from all parties receiving the
designated portions of such Confidential Information that confidential treatment
will be accorded to such Confidential Information.  Notwithstanding any such
disclosure, any such Confidential Information so disclosed shall, for all other
purposes, continue to be treated as Confidential Information under this
Agreement.

     5.4  Nothing contained herein shall be construed to obligate either party
to disclose to the other any Confidential Information.  The disclosure of
Confidential Information pursuant to this Agreement, and any prior or future
discussions, evaluations or other communications between the parties, shall not
confer any right nor impose or create any obligation on the parties other than
those expressly agreed to in this Agreement.

                                       7
<PAGE>
 
     5.5  All reports, notes, data, memoranda, records, or other tangible
expressions of Confidential Information of the other party, including any
electronically stored data, will be returned to the Disclosing Party promptly
upon request of such Disclosing Party.

     5.6  The confidentiality obligation shall survive expiration or termination
of this Agreement for any reason for a period of five (5) years.

     5.7  It is understood and agreed by the parties that each may be
irreparably injured by a breach of this Section 5 and that monetary damages may
not be a sufficient remedy for any actual or threatened breach of this Section
5.  In addition to any remedies available at law, the non-breaching party may
also be entitled to equitable relief, including injunction and specific
performance.

     6.  Licenses.  ASV hereby grants Caterpillar an irrevocable (during the
Term of this Agreement), non-exclusive, paid-up, worldwide license for the
purposes of this Agreement under each ASV copyright applicable to any works of
authorship fixed in any tangible medium of expression (including but not limited
to drawings, manuals and specifications) furnished to Caterpillar in the course
of this Agreement, to reproduce and distribute the copyrighted work (subject to
the provisions of Section 5 hereof), and to prepare derivative works therefrom,
all of which may be used by Caterpillar solely for the purposes of this
Agreement.

     7.  Trademarks.  The Products shall be sold by Dealers with the
trademark(s) applied by ASV and Caterpillar shall not re-package, remark, or
otherwise modify the Products, including any packaging, in any manner.  Nothing
in this Agreement shall be construed to allow ASV to use, or claim any rights to
Caterpillar trademarks.

     8.  Indemnity.  ASV shall defend, indemnify and hold Caterpillar, its
Affiliates, Dealers and its and their directors, officers, employees, agents and
representatives harmless from and against any and all claims, demands,
liabilities, loss, damage, cost and expense, of whatsoever nature, including
attorneys' fees and costs, arising from or in any way connected with any
litigation, administrative hearing or other proceeding relating to the Products,
or injury or death of any person or loss of or damage to property resulting from
or relating to the Products, except to the extent that such claims, etc. result
from the negligence or willful misconduct of Caterpillar or its Affiliates.
This paragraph shall not apply to any Products bearing the Licensed Trademark
and Trade Dress (both defined in Exhibit B), and the parties' respective
indemnification obligations with respect to such Products shall be as set forth
in Exhibit B.

     ASV shall defend, indemnify and hold Caterpillar, its Affiliates, Dealers,
and its and their directors, officers, and employees, agents and representatives
harmless against any and from all claims, demands, liabilities, loss, damage,
cost and expense of whatsoever nature, including costs, attorneys' fees and
expenses, which arise from or are in any way connected with any injury or death
of any person or loss of or damage to property of any kind or nature, resulting
from or allegedly resulting from or attributable to ASV's performance under this
Agreement, except to 

                                       8
<PAGE>
 
the extent that such claims, etc. result from the negligence or willful
misconduct of Caterpillar or its Affiliates.

     Caterpillar shall defend, indemnify and hold ASV, its Affiliates, and its
and their directors, officers, and employees, agents and representatives
harmless against any and from all claims, demands, liabilities, loss, damage,
cost and expense of whatsoever nature, including costs, attorneys' fees and
expenses, which arise from or are in any way connected with any injury or death
of any person or loss of or damage to property of any kind or nature, resulting
from or allegedly resulting from or attributable to Caterpillar's performance
under this Agreement, except to the extent that such claims, etc. result from
the negligence or willful misconduct of ASV or its Affiliates.

     ASV also shall defend, indemnify, and hold Caterpillar, its Affiliates and
Dealers and its and their directors, officers, and employees, agents and
representatives harmless against any and from all claims, demands, liabilities,
loss, damage, cost and expense of whatsoever nature, including costs, attorneys'
fees and expenses, which are a consequence of or attributable to any
representation, misrepresentation or omission made by ASV or its Affiliates, or
made by Caterpillar or its Affiliates and Dealers in reasonable reliance upon
written information furnished by ASV or its Affiliates, including, but not
limited to, representations, misrepresentations or omissions relating to the
capability, use, application, function, durability, reliability, quality,
serviceability, safety or any other characteristic or feature of Products.

     Caterpillar shall defend, indemnify, and hold Apple, its Affiliates and
their directors, officers, and employees, agents and representatives harmless
against and from all claims, demands, liabilities, loss, damage, cost and
expense of whatsoever nature, including costs, attorneys' fees and expenses,
which are a consequence of or attributable to any representation,
misrepresentation or omission made by Caterpillar or its Affiliates, not in
reasonable reliance upon written information furnished by ASV or its Affiliates,
including, but not limited to, representations, misrepresentations or omissions
relating to the capability, use, application, function, durability, reliability,
quality, serviceability, safety or any other characteristic or feature of
Products.

     9.  Patent Infringement.  ASV undertakes and agrees to defend at its own
expense any and all suits, actions, or proceedings brought against Caterpillar
or its Affiliates or Dealers for actual or alleged infringement of any patents
arising because or on account of the design, manufacture, use or sale of
Products, or any combination thereof, and further agrees to pay any and all
settlements, or pay and discharge any and all judgments or decrees which may be
rendered against Caterpillar or its Affiliates or Dealers; provided ASV is given
prompt notice of such suit, action, or proceeding and is given complete charge
and control of the defense of any such suit, action, or proceeding.  Caterpillar
shall cooperate in such defense at ASV's request and expense.  It is expressly
understood that this section does not apply to any suit, action, or proceeding
based upon actual or alleged infringement of patents by Caterpillar-supplied
components or Caterpillar-supplied component parts.  With respect to any such
suit, action, or 

                                       9
<PAGE>
 
proceeding referred to in the prior sentence, Caterpillar shall, at its own cost
and expense, provide complete defense for ASV and its Affiliates and shall
indemnify and hold ASV and its Affiliates harmless from any loss, damage, cost,
or expense relating thereto provided that prompt notice of such suit, action, or
proceeding is given to Caterpillar, and provided further that Caterpillar is
given complete charge and control of the defense of such suit, action, or
proceeding.

     10.  Insurance.

     10.1  ASV shall maintain at its sole cost throughout the entire term of
this Agreement insurance coverage as described below with insurance companies
acceptable to Caterpillar.  The limits set forth are minimum limits and shall
not be construed to limit ASV's liability.  All cost and deductible amounts
shall be for the sole account of ASV.  All policies  pursuant to this Agreement
shall name Caterpillar as an additional insured (per ISO Endorsement #CG 2026 or
its equivalent) [and waive subrogation rights in favor of Caterpillar], (subject
to agreement by the parties prior to execution of this Agreement) except
policies providing statutory Workers' Compensation and Professional Liability
coverage.  All policies required shall also be designed as primary coverage to
any similar coverage carried by Caterpillar.

     ASV shall have in force an annual renewable contract for Commercial General
Liability Insurance (occurrence coverage, including Products and Completed
Operations) during the period of this Agreement.  The policy limit shall be
$1,000,000 for any one occurrence or series of occurrences attributable to one
source or original cause, and in relation to Commercial General Liability
indemnity shall be limited to $10,000,000 per occurrence or in the aggregate for
any one policy year. ASV agrees to notify its insurer and take such other action
as may be necessary to ensure that such policies shall provide coverage to
Caterpillar and its Affiliates as additional insureds.  ASV shall, on request,
produce to Caterpillar for inspection any policy effected under this Section;
and shall, upon request, supply certified copies thereof and evidence that the
premiums payable in respect of such policy are paid.

     On termination of this Agreement, ASV, while trading in its own name, shall
continue to have in force such policies on the basis outlined above for a length
of time to be decided by agreement of the parties.  However, if ASV shall come
under new ownership and cease to trade in its own name, then ASV shall, if the
Agreement is terminated, arrange Commercial General Liability run off cover for
a period of five years from date of said termination; provided, of course, it is
available at said date of termination.

     Each insurance policy required by this Agreement shall be endorsed to state
that coverage shall not be suspended, voided, canceled by either party, reduced
in coverage or in limits except after thirty (30) days prior written notice by
certified mail, return receipt requested, has been given to Caterpillar.

                                       10
<PAGE>
 
     Caterpillar shall not insure nor be responsible for any loss or damage to
property of any kind owned or leased by ASV (including any subcontractor), its
employees, servants, or agents.

     Irrespective of these insurance requirements, the insolvency, bankruptcy,
or failure of any insurance company, or its failure to pay a claim, does not
waive any of these provisions.  [All the above-described policies, together with
all other insurance policies now owned or purchased in the future shall contain
provisions wherein the insurance companies will have no right of recovery or
subrogation against Caterpillar or any of its Affiliates, or against any of its
or their officers, directors, employees, agents, consultants, or business
invitees] (subject to agreement by the parties prior to execution of this
Agreement).

     11.  Notices.  When written notice is required by this Agreement, it shall
be sent by registered mail, by courier or by such other method as will permit
the sender to verify delivery, to the addresses set forth below:

     For Caterpillar:         Caterpillar Inc.
                              Attn: Richard A. Benson, Vice President,
                                      Diversified Products Division
                              100 Northeast Adams Street
                              Peoria, Illinois  61629
                              Telephone: (309) 675-1000
                              Facsimile: (309) 675-4777

     With a copy to:          Caterpillar, Inc.
                              Attn: Henry T. Ames, Associate General Counsel
                              100 Northeast Adams Street
                              Peoria, Illinois  61629-7310
                              Telephone: (309) 675-5628
                              Facsimile: (309) 675-6620

     For ASV:                 A.S.V., Inc.
                              Attn: Mr. Gary D. Lemke
                              840 Lily Lane
                              Grand Rapids, Minnesota  55744
                              Telephone: (218) 327-3434
                              Facsimile: (218) 326-5579

Written notice may also be sent by facsimile to the numbers listed above, but
such notice shall not be effective unless the sender receives a return facsimile
acknowledging receipt of the notice. Notice shall be deemed received when
actually delivered to the recipient as demonstrated by postal records.
Facsimile notice shall be deemed received upon receipt by the sender of an
acknowledgement as described above.  The addresses and transmittal numbers set
forth above can be changed only by written notice, which complies with the
requirements of this Section 11.

                                       11
<PAGE>
 
     12.  No Waiver.  Any failure of any party to enforce at any time any of the
provisions of this Agreement, or any rights or remedies with respect thereto, or
to exercise any election herein provided, shall not constitute a waiver of any
such provision, right, remedy or election or in any way affect the validity
thereof or of this Agreement.  The exercise by any party of any of its rights,
remedies or elections under the terms of this Agreement shall not preclude or
prejudice such party's right to exercise at any other time the same or any other
right, remedy or election it may have under this Agreement.  The rights of
termination provided herein are in addition to any other right, remedy or
election a party may have hereunder or at law or in equity, including the right
to sue for breach without terminating this Agreement.

     13.  Force Majeure.  No failure or omission by either party in the
performance of any of its obligations under this Agreement shall be deemed a
breach of this Agreement, nor create any liability or give rise to any right to
terminate this Agreement, if the same shall arise from or as a consequence of a
fire, flood, severe weather or other act of God, war, insurrection, civil
disturbance, or any other cause beyond the reasonable control of such party,
whether similar to or different from the causes above enumerated, and any such
cause shall absolve the affected party from responsibility for such failure to
perform said obligation.

     14.  Entire Amendment; Agreement.  This Agreement, including the Exhibits
attached hereto or referred to herein, constitutes the entire Agreement between
the parties and there are no prior understandings, agreements, representations
or warranties between the parties relating hereto.  No modification or amendment
to this Agreement or any of its provisions shall be binding unless contained in
a writing signed by both parties.

     15.  Survival.  The provisions of this Agreement shall survive expiration
or termination of this Agreement to the extent required for their full
observation and performance.

     16.  Severability.  The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of the remainder
thereof.

     17.  Applicable Law.  This Agreement shall be governed by and subject to
the laws of the State of Illinois, without regard to the conflict of laws
provisions thereof.

     18.  Assignment.  This Agreement may not be assigned by either party
without the prior written consent of the other party, except that Caterpillar
may assign this Agreement to a wholly-owned subsidiary with the consent of ASV,
which consent shall not be unreasonably withheld.

     19.  Relationship.  The relationship between Caterpillar and ASV shall be
that of independent contractors, and nothing in this Agreement shall be
construed to establish a fiduciary, partnership, agency, or joint venture
relationship between the parties, or constitute Caterpillar, its agents and
employees as the agents or employees of ASV or to grant them any 

                                       12
<PAGE>
 
power or authority to act for, bind or otherwise create or assume any obligation
on behalf of ASV for any purpose whatsoever.

     20.  Announcement.  Neither party shall make any announcement concerning
the nature and details of this Agreement without the express written consent of
the other party.

     21.  Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.

     22.  Headings.  The headings to the sections of this Agreement are solely
for convenience of reference, and they shall not govern, limit or aid in the
interpretation of any terms or provisions of this Agreement.

     IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized representatives as of the date first above written.

A.S.V., Inc.                               Caterpillar Inc.


By:    /s/ Gary Lemke               By:          /s/ Richard Benson
   ---------------------------         ------------------------------------
Gary D. Lemke, President            Richard A. Benson, Vice President

                                       13