EXHIBIT 10.13

                              EMPLOYMENT AGREEMENT

BETWEEN:        Western Power & Equipment Corp.
                an Oregon corporation

AND:            Charles Dean McLain

EFFECTIVE DATE: January 1, 1998

                                    RECITALS

The Company is an Oregon corporation engaged in the construction and
     agricultural equipment industry.

Employee is currently employed as the Company's President and Chief
     Executive Officer.

The Company desires to continue employing Employee and Employee wishes to
     continue employment on the following terms and conditions.

This employment agreement supersedes all previous employment contracts
     between the parties.

                                    AGREEMENT

1.   Employment Term: The term of employment under this agreement shall begin
     January 1, 1998 and continue until December 31, 2007 unless earlier
     terminated as provided below.

2.   Employment Duties: During the term of this agreement Employee will, to the
     best Employee's ability.

     2.1. Capacity: Serve as the Company's full-time President and Chief
          Executive officer and devote Employee's full and entire business time,
          attention, knowledge and skills to faithfully, diligently, and to the
          best of the Employees abilities, perform all duties required of the
          Employee by the Company. For purposes of this paragraph, the Company
          shall include any direct or indirect subsidiaries of the Company.

     2.2. Duties: Employee shall render services customarily performed in the
          capacity of President and Chief Executive Officer of a corporation
          including, but not limited to, management and responsibility of
          general

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          policies and planning for the Company, financial planning,
          acquisitions, new product development, strategic planning, opening of
          additional outlets, and product line expansion. Employee's duties
          shall be directed by, and all times be subject to the discretion of,
          the Company's Board of Directors.

     2.3. Member of the Board of Directors: Throughout the period of his
          employment hereunder, the Employee shall have the right (but not the
          obligation), if elected by the requisite majority of the
          stockholder(s) to serve, without any further or additional
          compensation or remuneration (other than as set forth herein), as
          member of the Board of Directors of the Company or any subsidiary of
          the Company.

3. Base Compensation:

     3.1. Base Compensation: Company shall pay Employee a base salary of
          $280,000 per year until July 31, 1998. Starting August 1, 1998 through
          December 31, 1998 the Base Salary would be increased to $290,000 per
          year. On each January 1 beginning January 1, 1999, Employee's base
          salary shall increase by the average percentage increase for all
          employees over the prior 12 months. The Employee shall be paid in the
          same time and manner as all other employees.

     3.2. Bonus Compensation: Employee shall be entitled to an annual
          performance bonus as follows:

          3.2.1. For each of fiscal years 1998 through and including 2002,
                 Employees' yearly bonus shall be 5% of the amount by which the
                 Company's Pre-Tax Income exceeds $1,750,000 for that fiscal
                 year. The maximum bonus payable in any one fiscal year under
                 this paragraph shall be $150,000.

          3.2.2. For each of fiscal years 2003 through and including 2007,
                 Employee's yearly bonus shall be 5% of the amount by which the
                 company's Pre-Tax Income Exceeds 1,750,000 for that fiscal
                 year. The maximum bonus payable in any one fiscal year under
                 this paragraph shall be $200,000.

     3.3. For the purposes of paragraph 3.2, Pre-Tax Income shall be the total
          fiscal year consolidated net income for the Company and its
          subsidiaries as determined in accordance with generally accepted
          accounting principle by independent accountants then engaged by the
          company to audit its financial statements after deduction of all items
          customary dedicated from income but before deduction of taxed on

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          income of the Company, gains or losses from dispositions or purchases
          of assets or other extraordinary items (including any deferred
          financing expenses incurred by the Company in connection with the
          issuance of shares of stock of the Company, and any Employee's bonus.
          Yearly bonus payments due Employee shall be paid within 120 following
          the end of the fiscal year on which the bonus is based.

     3.4. Stock Options: In any year that Employee earns the maximum bonus under
          paragraph 3.3, Employee shall receive an option to purchase 25,000
          shares of common stock to be priced at the closing market price on the
          date of issue, such option to vest one year later. The number of
          options to which Employee shall be entitled shall be adjusted for any
          stock dividends, stock splits or other similar changes in the capital
          structure of the Company. If earned, such yearly options shall be
          issued within 120 days of the end of the fiscal year for which they
          were earned. The options will be granted under the Company's existing
          Employee Stock Option Plan or any supplemental plan adopted by the
          Board of Directors and, to the extent eligible, shall be Incentive
          Stock Options. The options will have a term of 10- years provided,
          however, should Employee terminate his employment pursuant to
          paragraph 9.2.2. Or the Company terminates this employment pursuant to
          paragraph 9.1.3 or 9.1.4, such options will expire 90-days after such
          termination; if the company terminate his employment pursuant to
          paragraph 9.1.5 or Employee terminate his employment pursuant to
          paragraph 9.2.1, such options expire three years after the date of
          such termination (but no later than 10 years after the date of grant)
          and if his employment is terminated for cause pursuant to paragraph
          9.1.1 or 9.1.2, such options will terminate immediately. Upon
          exercise, the shares issued will be registered for resale by the
          Company at its expense.

     3.5. Status of Compensation: All payments to Employee shall be subject to
          customary withholding taxes and other employment taxes and deductions
          as required with respect to compensation paid by Company to an
          employee.

     3.6. Exemption: Employee shall be exempt and/or excluded for purpose of
          Oregon employment statutes and the Fair Labor Practice and is exempt
          from statutory requirements covering overtime.

4.   Fringe Benefits: The Company shall furnish and make available to Employee
     such benefits as are from time to time provided to other executive officers
     including, but not limited to, life insurance, disability insurance, health
     and accident insurance, and pension or retirement plan.

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     The Company shall maintain for the benefit of employee, the life insurance
     policy in the amount of $500,000 which death benefits shall be payable to
     the beneficiary of the Employee upon his death.

5.   Expenses: The Company shall pay all dues to professional societies and
     organizations, premiums for supplemental life and disability insurance,
     accident and health insurance in accordance with Company policy, group term
     life insurance, and all other expenses paid for by the Company in
     accordance with Company policy. The Company shall also pay all reasonable
     business expenses, including air and other travel expenses, incurred by
     Employee in connection with performance of Employee's duties upon proper
     receipts and other documentation.

6.   Automobile Expense: The Company shall provide Employee an automobile of
     Employee's reasonable choice for Employee's use throughout the term of this
     agreement. The Company shall bear all the expenses of such automobile,
     including all purchase, lease, or other acquisition related costs, gas,
     insurance, maintenance, and repairs for such automobile.

7.   Vacation and Holidays: Employee shall be entitled vacation and holiday time
     as follows:

     7.1. A maximum of four weeks of vacation time per fiscal year in each of
          fiscal years 1998 through 2002, inclusive;

     7.2. A maximum of five weeks of vacations time per fiscal year in each of
          fiscal years 2003 through 2007 inclusive;

     7.3. All vacation time shall be paid in accordance with the then current
          policy of the Company.

     7.4. Employee shall be further entitled to take the legal holidays observed
          by Company.

8.   Change in Fiscal year: If the Company's fiscal year changes during the term
     of this agreement, all compensation and benefits to be received by Employee
     shall be appropriately and equitably pro-rated and adjusted to reflect such
     change.

9.   Termination:

     9.1. Termination: At the discretion of the Board of Directors, this
          agreement may be terminated by written notice to Employee upon the
          occurrence of any of the following events:

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          9.1.1. Any material act committed by Employee against the Company, or
                 its subsidiaries constituting fraud, breach of fiduciary duty,
                 or embezzlement of funds, or a felony conviction for conduct
                 involving moral turpitude.

          9.1.2. Breach or default by Employee in the performance of any
                 material provision of this agreement after 10-days prior
                 written notice is given within which time such breach or
                 default may be remedied. If the Company does not believe
                 Employee has remedied such breach or default, the Employee
                 shall be given an opportunity to present his case before the
                 Board of Directors for their reconsideration.

          9.1.3. Physical or mental disability or impairment of employee that
                 prevents Employee from continuing the normal and proper
                 performance of Employee's duties and responsibilities under
                 this agreement for a period of 12 consecutive months. The
                 initial determination as to whether the Employee is disabled or
                 impaired shall be made by the physician regularly treating
                 Employee. The Company shall have the right to determine whether
                 the Employee is disabled or impaired. If such physician's
                 opinion differs from that of the physician treading Employee,
                 the two physicians shall select a third physician who shall
                 examine employee and, after such examination and a review of
                 all available information from the other two physician,
                 determined whether Employee is disabled or impaired and this
                 decision shall be final and binding upon all the parties. The
                 starting date for the 12 month period shall be after the third
                 physician has made his determination or;

          9.1.4. Employee's death.

          9.1.5. At the discretion of the Board of Directors.

     9.2. Payment Upon Termination: Employee may terminate his employment;

          9.2.1. For good reason if the Company shall be in material breach of
                 this agreement and has failed to remedy such breach within 10-
                 days following written notice of such breach, or

          9.2.2. Upon sixty (60) days prior written notice without cause.

     9.3. Payment Upon Termination:

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          9.3.1. Upon termination for any of the causes in paragraph 9.1.1,
                 9.1.2, 9.1.3, 9.1.4 or 9.2.2, Employee or Employee's spouse or
                 estate in the event of Employee's death) shall be entitled to
                 receive all compensation and benefits through the date of
                 termination. Upon termination due to Employee's death or
                 disability, all options then granted to Employee which are
                 unvested at the date of termination shall become immediately
                 vested as of the date of termination and registered for public
                 sale.

          9.3.2. If Employee's employment is terminated pursuant to paragraph
                 9.1.5, 9.2.1, the Company shall pay Employee all compensation,
                 bonuses, and benefits which Employee is entitled through the
                 date of termination, plus the base compensation provided in
                 paragraph 3.1 over the remainder of the term of this Agreement.
                 Further, all stock options granted shall immediately vest and
                 be registered for public sale. All options then held by
                 Employee would be extended to a date three years from the date
                 of termination.

10.  Confidentiality: During the term of this agreement and after termination of
     employment, Employee shall keep secret and retain in strictest confidence
     all confidential matters of the Company along with the Company's know-how,
     trade secrets, confidential client lists, details of client, subcontractor,
     and consultant contracts, pricing policies, operational methods, marketing
     plans and strategies, product development plans, acquisition or bidding
     techniques and plans, technical processes, inventions and research project,
     business acquisition plans, personnel acquisition plans, and other similar
     information unless (I) such information is generally available to the
     public without restriction; (ii) Employee is requested by the Company's
     Board of Directors or a committee thereof to disclose such confidential
     information; (iii) such information is being provided to a customer,
     vendor, or consultant of the Company in the ordinary course of business; or
     (iv) Employee is compelled to disclose such confidential information by
     order, inquiry, or request by a court of law, governmental agency, or other
     source of authority and prompt notice of such order is given to the Company
     which may challenge such order.

11.  Property of the Company: All lists, records, and other non-personal
     documents or papers (including all copies thereof), including such items
     stored in computer memories, on microfiche, or any other media made or
     compiled by or on behalf of the Employee or made available to Employee
     relating to the Company are and shall be the property of the Company and
     shall be delivered to the Company upon termination of this agreement. All
     inventions, including any procedures, formulas, methods, processes, uses,

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     apparatuses, patterns, designs, drawings, devises, or configurations of any
     kind, and all improvements to them which are developed, discovered, made,
     or produced, trade secrets or information used by any or all of the Company
     shall be the exclusive property of the Company and shall be delivered to
     the Company upon termination of this Agreement.

12.  Employees of the Company: If Employee's employment is terminated for any
     reason other than 9.1.5 or 9.2.1, Employee shall not, directly or
     indirectly, solicit any employee of the Company, other than Employee's
     personal secretary, or encourage any such employee to leave employment with
     the Company.

13.  Non-Competition: For a period equal to the latest to occur of (i) such
     period as the Employee is employed by the Company; (ii) one year following
     the date of termination of this Agreement and; (iii) such period as the
     Employee shall continue to receive the base salary under this agreement -

     Employee shall not, directly or indirectly, whether individually or as an
     employee, stockholder, partner, joint venturer, agent or other
     representative of any other person, firm, corporation, or other business
     entity engage in any business which is competitive with the business of the
     Company. As used herein, the term "business which is competitive with the
     businesses of the Company" shall only mean any person, firm, corporation,
     or other business entity doing business in the territories serviced by the
     Company under it dealership agreements with its suppliers if 10% or more of
     the net revenues of such business are derived from the sale, rental, parts,
     servicing, or other distribution of small, medium, or heavy construction
     equipment of the nature then being sold by the Company including, without
     limitation, any such equipment manufactured by Case Corporation or any
     other corporation manufacturing equipment in competition with the equipment
     then manufactured by Case Corporation.

14.  Arbitration: Any controversy or claim arising out of, or relating to, this
     agreement or breach thereof, shall be settled by arbitration in accordance
     with the rules then applying of the American Arbitration Association, and
     any judgment upon the award rendered may be entered in any court having
     jurisdiction thereof. Arbitration shall be held in Vancouver, Washington.
     The cost of arbitration shall be paid equally by the parties.

15.  Notice: Any notices permitted or required under this agreement shall be
     given in writing and may be delivered and served personally upon employee
     or upon an officer of the Company, or alternatively, may be

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     deposited in the United States mail, postage prepaid by certified or
     registered mail, addressed to the company at its head office or the
     Employee at his current address as shown in his personnel file with the
     Company. Such notice, if mailed with the State of Washington, shall be
     deemed delivered upon the second day following the date post marked, If
     mailed out side the State of Washington but within the United States, the
     notice shall be deemed delivered upon the third day following the date post
     marked.

16.  Waiver of Breach: The waiver by either Company or Employee of a breach of
     any provision of this Agreement shall not operate or be construed as a
     waive of any other provision of any subsequent breach of the same provision
     by either Company or Employee.

17.  Binding Effect and Assignment: This agreement shall be binding upon and
     shall ensure to the benefit of both Company and Employee and their
     respective successors, heirs and legal representatives, but neither this
     Agreement nor any right hereunder may be assigned by either Company or
     Employee without the prior written consent of the other party.

18.  Amendment: No amendment or variation of the terms and conditions of these
     Agreement shall be valid unless the same is in writing and signed by both
     Company and Employee.

19.  Partial Invalidity: Invalidation of any term or provision herein by
     judgment or court order, or otherwise, shall not affect any other
     provisions, which shall remain in full force and effect.

20.  Integration: This Agreement embodies the entire agreement of the parties.
     There are no promises; terms, conditions or obligations other than those
     contained herein. This Agreement shall supersede all prior communications,
     representations or Agreements, either verbal or written, between the
     parties with regard to Employee's terms of employment. Neither party to
     this Agreement has made any representation or warranty relating to this
     Agreement or the subject matter of this Agreement except those specifically
     contained in writing in this Agreement.

21.  Governing Law: This Agreement and all matters of dispute or interpretation
     thereof shall be governed a construed in accordance with the laws of the
     State of Washington without reference to the provisions of conflict of
     laws.

22.  Paragraph Headings: The paragraph headings appearing in these Agreement are
     not to be construed as interpretations of the text, but are

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     inserted for convenience of and reference by the reader only.

Western Power & Equipment Corp.,
An Oregon corporation


By: __________________________
------------------------------
     Harold Chapman, Director                              C. Dean McLain


By: _____________________________
     James Penland, Director


By: _____________________________
     Robert Rubin, Chairman