EXHIBIT 10.1
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                            ASSET PURCHASE AGREEMENT
                            ------------------------



BETWEEN:  Western Power & Equipment Corp.,
          an Oregon corporation                   ("Western")

AND:      Mid-Mountain Machinery Inc.
          a Washington corporation                 ("Buyer")

DATE:     February 28, 2006


                                    RECITALS
                                    --------

A. Western is the owner and operator of construction equipment sales, service,
and leasing operations in Spokane and Clarkston, Washington (the "Retail
Operations"); and

B. Buyer desires to purchase from Western certain of the assets relating to the
Retail Operations, and Western is willing to sell such assets to Buyer all under
the terms and conditions below.


                                    AGREEMENT
                                    ---------

ARTICLE 1. DEFINITIONS

     SECTION 1.01 "Affiliate" shall mean any Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with the Person specified.

     SECTION 1.02 "Knowledge" with respect to Western shall mean the best
knowledge of Dean McLain, President and Bob Harbin, Vice President of Sales.

     SECTION 1.03 "Lien" shall mean any mortgage, pledge, security interest,
lease, lien or other encumbrance of any kind, including without limitation any
conditional sale contract, title retention contract or similar arrangement.

<PAGE>

ARTICLE 2. PURCHASE AND SALE

     SECTION 2.01 PURCHASE AND SALE OF ASSETS. Buyer purchases from Western, and
Western sells to Buyer, all of the right, title and interest of Western in the
following assets and rights associated with the Retail Operations (the
"Purchased Assets"), which Purchased Assets are more particularly described
below:

          (a)  Equipment. All items of equipment and attachments set forth on
               EXHIBIT A ("Equipment").

          (b)  Parts. All parts set forth on EXHIBIT B ("Parts").

          (c)  Furniture & Fixtures. All furniture and fixtures currently
               utilized in the Retail Operations, including all parts, shelving,
               ,all file cabinets, all office desks and chairs, office dividers,
               fax machine, copier, and current phone system.

          (d)  Shop Tools. Shop equipment, service tools, parts and service
               manuals and literature set forth on EXHIBIT C ("Shop Tools").

          (e)  Vehicles. The vehicles specified on attached EXHIBIT D
               ("Vehicles").

          (f)  Office and Shop Supplies. All office and shop supplies EXCEPT
               items imprinted with Western's logo (such as letterhead, order
               forms, and similar items) or bulk oils, fluids, fuel, and similar
               items in the shop.

          (g)  Computer Equipment. The computer and related equipment specified
               on attached EXHIBIT E ("Computers").

     SECTION 2.02 EXCLUDED ASSETS. The assets of Western being sold,
transferred, assigned, and delivered to Buyer shall include only those Purchased
Assets described in Section 2.01. Such Purchased Assets shall not, however,
include any of the following assets or properties of Western:

          (a)  Cash and cash equivalents on hand or in banks as of the closing
               date.

          (b)  Prepaid taxes, insurance, and other expenses and credits, refunds
               and receivables of such items.

          (c)  Any other assets not specifically described in Section 2.01.

For purposes of this Agreement, all of the property, assets, and rights retained
by Western under this Section 2.02 are collectively referred to as the "Excluded
Assets."

<PAGE>

     SECTION 2.03 PURCHASE PRICE.

          (a)  The purchase price for the Purchased Assets ("Purchase Price") is
               as follows:

               (1)  Equipment. The purchase price for the Equipment, as set
                    forth on Exhibit A attached hereto, is a total of
                    $2,184,962.00; consisting of $1,251,932.00 for new Case
                    equipment; $227,673.00 for new non-Case equipment;
                    $630,044.00 for rental equipment; and $75,313.00 for used
                    equipment. The new Case equipment shall be dealer
                    transferred from Western to Buyer as of the date above.
                    Buyer shall pay cash for the all other equipment at closing.

               (2)  Parts. The purchase price for the Parts, as set forth on
                    Schedule B attached hereto, is $261,114.00; consisting of
                    $198,609.00 for Case parts and $62,505.00 for non-Case
                    parts. Terms for Case parts are dealer transfer as of the
                    date of closing set forth above. Terms for non-Case parts
                    are cash at closing.

               (3)  Furniture & Fixtures. The purchase price for the Furniture &
                    Fixtures, as set forth above, shall be $35,837.00. Terms are
                    cash at closing.

               (4)  Shop Tools. The purchase price for the Shop Tools shall be
                    $52,923.00. Terms are cash at closing.

               (5)  Vehicles. The purchase price for the Vehicles shall be
                    $221,696.00. Terms are cash at closing.

               (6)  Office and Shop Supplies. The purchase price for the Office
                    and Shop Supplies, as set forth above, shall be $3,000.00
                    payable in cash at closing.

               (7)  Computers. The purchase price for the Computers, as set
                    forth above, shall be $9,474.00 payable in cash at closing.

          (b)  The Purchase Price is payable in full in cash at closing and/or
               dealer transfer at closing as set forth above. In the event that
               Case Corp. does not authorize any dealer transfer set forth
               above, in whole or in part, Buyer shall remit such amount to
               Western in cash within 5 days of Western's request to Buyer.

     SECTION 2.04 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated in the manner set forth in Sections 2.03 and 2.05.

<PAGE>

     SECTION 2.05 GOODWILL. In addition to the above Purchase Price, Buyer shall
pay for all of Western's goodwill and going concern value for the
assets/operations which Buyer is purchasing. The Goodwill value for Spokane and
Clarkston is agreed to be $75,000 payable in cash at closing. However, Buyer is
not purchasing and will not obtain any right to use Western's tradenames or
trademarks.

ARTICLE 3. DELIVERIES

     SECTION 3.01 DELIVERIES BY WESTERN.  Western has delivered to Buyer the
following:

          (a) An executed and acknowledged bill of sale form and substance as
          necessary to transfer to Buyer all of Western's right, title, and
          interest in and to the Purchased Assets.

          (b) Duly executed and effective assignments of lease for both the
          Spokane, WA facility and the Clarkston, WA facility;

          (c) The other documents, instruments, and writings required to be
          delivered by Western pursuant to this Agreement or otherwise required
          in connection herewith.

     SECTION 3.02 DELIVERIES BY BUYER. Buyer has delivered to Western the
following:

          (a) The amount of the Purchase Price and any other amounts due under
          this Agreement.

          (b) The other documents, instruments and writings required to be
          delivered by Buyer pursuant to this Agreement or otherwise required in
          connection herewith.

ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF WESTERN.  Western represents and
warrants to Buyer as set forth below:

     SECTION 4.01 ORGANIZATION AND QUALIFICATION. Western is a corporation
validly existing and in good standing under the laws of the State of Oregon and
is duly qualified to conduct business in the State of Washington.

     SECTION 4.02 AUTHORITY RELATIVE TO THIS AGREEMENT. Western has the
requisite corporate power to execute and deliver this Agreement and the related
agreements contemplated hereby to which it is a party and to consummate the
transactions contemplated thereby. This Agreement and the related agreements
contemplated hereby to which Western is a party have been duly executed and
delivered by Western and constitute legal, valid, and binding obligations of

<PAGE>

Western and are enforceable against Western in accordance with their terms
subject to the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws affecting creditors' rights
and remedies generally and to the effect of general principles of equity
(regardless of whether enforcement is considered in a proceeding at law or in
equity).

     SECTION 4.03 OWNERSHIP OF PURCHASED ASSETS AND REAL PROPERTY. Western has
title to the tangible personal property included in the Purchased Assets
sufficient for the conduct of the Retail Operations as currently conducted by
Western.

     SECTION 4.04 ACCURACY OF INFORMATION. To the Knowledge of Western, all
information contained in this Agreement and all exhibit to this Agreement,
including descriptions of the Purchased Assets, price information, and
information on the schedules to such exhibits and to the Agreement, is true and
correct.

ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF BUYER.  Buyer represents and
warrants to Western as set forth below.

     SECTION 5.01 ORGANIZATION AND QUALIFICATION. Buyer is a corporation validly
existing and in good standing under the laws of the State of Washington.

     SECTION 5.02 AUTHORITY RELATIVE TO THIS AGREEMENT. Buyer has the requisite
corporate power to execute and deliver this Agreement and the related agreements
contemplated hereby to which it is a party and to consummate the transactions
contemplated thereby. This Agreement and the related agreements contemplated
hereby to which Buyer is a party have been duly executed and delivered by Buyer
and constitute legal, valid, and binding obligations of Buyer and are
enforceable against Buyer in accordance with their terms subject to the effect
of any applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium, or similar laws affecting creditors' rights and remedies generally
and to the effect of general principles of equity (regardless of whether
enforcement is considered in a proceeding at law or in equity).

     SECTION 5.03 FINANCING. Buyer has sufficient funds or committed lines of
credit to consummate the transactions contemplated by this Agreement.

     SECTION 5.04 INSPECTION OF PURCHASED ASSETS. Buyer has inspected to its
complete satisfaction the physical condition of the Purchased Assets.

     SECTION 5.05 BANKRUPTCY. Buyer is not, and has not within the past six
years been, the subject of a bankruptcy or insolvency proceeding, nor is Buyer
subject to any Lien that might adversely affect Buyer's ability to perform its
obligations as contemplated by this Agreement.

     SECTION 5.06 TAXES AND FEES. Buyer shall be responsible for and pay all
taxes and fees applicable to this transaction including, but not limited to,
sales taxes, use taxes, transfer taxes/fees, and registration fees.

<PAGE>

     SECTION 5.07 EMPLOYER IDENTIFICATION NUMBER. Buyer's federal employer
identification number is _________________.

ARTICLE 6. ADDITIONAL COVENANTS OF THE PARTIES

     SECTION 6.01 FURTHER ASSURANCES. Each party will use reasonable efforts to
take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper, or advisable to carry out all of its respective
obligations under this Agreement and to consummate and make effective the
purchase and sale of the Purchased Assets and the Real Property pursuant to this
Agreement. Each party shall, and shall cause its Affiliates to, execute,
acknowledge, and deliver all such further conveyances, notices, assumptions,
releases, and acquittances and such other instruments, and shall take such
further actions, as may be necessary or appropriate more fully to assure to
Buyer and their successors or permitted assigns, all of the properties, rights,
titles, interests, estates, remedies, powers, and privileges intended to be
conveyed to Buyer pursuant to this Agreement and more fully to assure to Western
and its Affiliates and their successors and assigns the assumption of the
liabilities and obligations intended to be assumed by Buyer pursuant to this
Agreement, respectively.

     SECTION 6.02 NONASSIGNABLE CONTRACTS. To the extent any lease, contract,
right, or commitment included in the Purchased Assets is not capable of being
assigned, transferred, subleased, or sublicensed without the consent or waiver
of the issuer thereof, the other party thereto, or any third party (including a
government or governmental unit), or if such assignment, transfer, sublease, or
sublicense or attempted assignment, transfer, sublease or sublicense would
constitute a breach thereof or a violation of any law, decree, order,
regulation, or other governmental edict, this Agreement shall not constitute an
assignment, transfer, sublease, or sublicense thereof, or an attempted
assignment, transfer, sublease or sublicense of any such lease, contract, right,
or commitment. Anything in this Agreement to the contrary notwithstanding,
Western is not obligated to transfer to Buyer any of its rights and obligations
in and to any such contract, lease, right, or commitment without first having
obtained all necessary consents and waivers.

     SECTION 6.03 PRESERVATION OF RECORDS. Except for tax records, Buyer shall
preserve and keep (or cause to be preserved and kept) the books and records
conveyed pursuant to this Agreement, and Western shall preserve and keep (or
cause to be preserved and kept) such books and records as it or any of its
Affiliates shall retain with respect to the Purchased Assets, for a period of
three years after the date of this Agreement, and Buyer and Western shall each
grant to the other reasonable access to such books and records retained by them
during such period. In the event either Buyer or Western wishes to destroy such
records after such period, it shall first give written notice to the other party
and the other party shall have the right at its option, upon prior written
notice given to the party providing the initial notice, to take possession of
said records as promptly as practicable, but in any event within 180 days after
the date of its notice requesting the same.

<PAGE>

     SECTION 6.04 RISK OF LOSS. Buyer assumes all risk of loss from all causes
with respect to the Purchased Assets from and after the date of this Agreement.

     SECTION 6.05 CERTAIN PERSONNEL MATTERS.

          (a) Compensation of and any bonuses for all employees hired by Buyer
          for all periods of employment subsequent to the date of this Agreement
          shall be borne and paid for by Buyer. All vacation, sick day, and
          holiday pay of all employees of the Retail Operations that have
          accrued or were earned prior to the date of this Agreement shall be
          the sole responsibility of Western and shall be paid in full prior to
          the date of this Agreement or accrued on the books of Western and
          remitted to the employee at the time of his or her vacation or
          holiday.

          (b) Western shall be solely liable and responsible for obligations
          under any and all deferred compensation, pension, profit sharing,
          retirement, group insurance, or other employee benefit or welfare
          plans, written or oral, relating to employees of the Retail
          Operations, whether or not constituting an "employee benefit plan"
          under the Employee Retirement Income Security Act of 1974, as amended,
          that have accrued through and including the date of this Agreement.
          Buyer shall be solely liable and responsible for such obligations from
          the date of this Agreement.

     SECTION 6.06 BUSINESS CUTOFF. Commencing as of the day following the date
of this Agreement (i) all sales of new, used, and allied machinery and
attachments, parts and service shall be deemed to have been conducted for the
account of Buyer and (ii) all obligations for the following shall be deemed to
have been for the account of Buyer: sales commissions, travel, and entertainment
expenses, purchases of parts, machinery, and attachments and shop and office
supplies, shipping costs and costs of outside labor and materials incurred in
connection with the Retail Operations.

     SECTION 6.07. CONSENT OF CASE CREDIT CORPORATION AND CASE CORPORATION.
Buyer acknowledges that Western's agreements with Case Credit Corporation and
Case Corporation ("Case") require that Western obtain the consent of Case to the
sale transaction described in this agreement, and that such consent is the
responsibility of Buyer.

ARTICLE 7. INDEMNIFICATION AND LIMITATIONS ON LIABILITY

     SECTION 7.01 DEFINITIONS. As used in this Article, the following terms
shall have the meanings set forth below:

          (a) Losses. The term "Loss" or "Losses" shall mean any and all direct
          or

<PAGE>

          indirect payments, assessments, liabilities, costs and expenses paid
          or incurred (whether or not known or asserted prior to the date
          hereof, fixed or unfixed, conditional or unconditional, choate or
          inchoate, liquidated or unliquidated, secured or unsecured, accrued,
          absolute, contingent or otherwise), including without limitation
          penalties, interest on any amount payable to an unaffiliated party as
          a result of the foregoing and, subject to Section 7.05 hereof, any
          legal or other expenses reasonably incurred in connection with
          investigating or defending any Third-Party Claims, whether or not
          resulting in any liability, and all amounts paid in respect of claims
          or actions in accordance with Section 7.05 hereof; provided, however,
          that Losses shall not include any loss of profit or anticipated profit
          and shall be net of any insurance proceeds received by an Indemnitee
          from a nonaffiliated insurance company on account of such Losses
          (after deducting any direct costs incurred in obtaining such
          proceeds); provided, further, however, that nothing in this Article
          shall require an Indemnitee to proceed against its insurance carrier.

          (b) Third-Party Claims. The term "Third-Party Claims" shall mean any
          claims, actions or rights asserted against an Indemnitee by a party
          that is not the Indemnitor and is not an Affiliate of the Indemnitee,
          including without limitation, claims by governmental authorities.

          (c) Indemnitee. The term "Indemnitee" shall mean any Person that may
          be entitled to seek indemnification pursuant to the provisions of
          Section 7.02 or Section 7.03 hereof.

          (d) Indemnitor. The term "Indemnitor" shall mean any Person that may
          be obligated to provide indemnification pursuant to Section 7.02 or
          Section 7.03 hereof.

          (e) Specified Officer. With respect to any particular matter, the term
          "Specified Officer," as applied to any corporation, shall mean the
          chairman, president, general counsel, any vice president, or secretary
          of such corporation, or the manager of any plant or other facility of
          such corporation, or any other employee or agent of such corporation
          (who may report, directly or indirectly, to such person) having
          responsibility for an operational or staff function who in the normal
          course of such officer's, manager's or other person's responsibility
          would reasonably be expected to have knowledge of such matter.

          (f) Notice Period--Third-Party Claims. The term "Notice Period," as
          applied to any Third-Party Claim for which an Indemnitee seeks to be
          indemnified pursuant to this Article, shall mean the period ending the
          earlier of the following:

               (1) Three months after the time at which any Specified Officer of
               the Indemnitee (or the Indemnitee, if the Indemnitee is an
               individual) has received actual notice of such Third-Party Claim.

<PAGE>

               (2) With respect to any Third-Party Claim that has become the
               subject of proceedings before any court or tribunal, such time as
               would allow the Indemnitor sufficient time to contest, on the
               assumption that there is an arguable defense to such Third-Party
               Claim, such proceeding prior to any judgment or decision thereon.

               (3) With respect to any Third-Party Claim that the Indemnitee
               proposes to pay or settle, such time as would provide the
               Indemnitor sufficient time prior to such payment or settlement to
               determine whether to contest such claim and assume the defense
               pursuant to Section 7.05.

               (4) The time period under which a Claim Notice must be given as
               set forth in Section 7.06.

          (g) Claim Notice. The term "Claim Notice" shall have the meaning set
          forth in Section 7.04.

     SECTION 7.02 INDEMNITY BY WESTERN. Subject to Section 7.09, Western shall,
to the fullest extent permitted by law, defend and hold harmless Buyer and their
Affiliates, including the directors, officers, employees, agents and
representatives of each of them (each of whom may be an Indemnitee pursuant to
this section), from and against the following:

          (a) Breach. All Losses arising from the breach by Western in any
          material respect of any of its covenants or representations set forth
          in this Agreement.

          (b) Liabilities. Other than Losses pertaining to Environmental Loss
          (specifically sections 4.08, 6.04 and 7.09[a]) all Losses relating to
          the ownership or operation of the Retail Operations prior to the date
          of this Agreement.

     SECTION 7.03 INDEMNITY BY BUYER. Buyer shall, to the fullest extent
permitted by law, defend and hold harmless Western and its Affiliates, including
the current and former directors, officers, employees, agents, and
representatives of each of them (each of whom may be an Indemnitee pursuant to
this section), from and against the following:

          (a) Liabilities. All Losses (other than Losses for which Western is
          obligated to indemnify Buyer pursuant to Section 7.02) relating to or
          arising from the ownership, operation, occupancy, construction,
          condition (including without limitation environmental conditions) or
          use of the Purchased Assets or the Real Property or operation of a
          dealership, to the extent such Losses relate to, arise from or are
          associated with any period after the date of this Agreement and
          whether arising from the negligence or gross negligence of Western or
          any of its Affiliates or otherwise.

<PAGE>

          (b) Breach. All Losses arising from the breach by Buyer in any
          material respect of any of their covenants or representations set
          forth in this Agreement.

     SECTION 7.04 NOTIFICATION OF THIRD-PARTY CLAIMS. In no case shall any
Indemnitor under this Agreement be liable with respect to any Third-Party Claim
against any Indemnitee unless the Indemnitee shall have delivered to the
Indemnitor within the Notice Period a notice ("Claim Notice") describing in
reasonable detail the facts giving rise to such Third-Party Claim and stating
that the Indemnitee intends to seek indemnification for such Third-Party Claim
from the Indemnitor pursuant to this Article.

     SECTION 7.05 DEFENSE OF CLAIMS. Upon receipt of a Claim Notice from an
Indemnitee with respect to any Third-Party Claim, the Indemnitor may assume the
defense thereof with counsel reasonably satisfactory to such Indemnitee and the
Indemnitee shall cooperate in all reasonable respects in such defense. The
Indemnitee shall have the right to employ separate counsel in any action or
claim and to participate in the defense thereof, provided that the fees and
expenses of counsel employed by the Indemnitee shall be at the expense of the
Indemnitor only if such counsel is retained pursuant to the second succeeding
sentence or if the employment of such counsel has been specifically authorized
by the Indemnitor. The Indemnitor may conduct such defense in the name of or on
behalf of the Indemnitee or Indemnitor and shall have full authority and control
with respect thereto, including the settlement thereof. If the Indemnitor does
not notify the Indemnitee within 60 days after receipt of the Claim Notice that
it elects to undertake the defense thereof, the Indemnitee shall have the right
to defend at the expense of the Indemnitor the claim with counsel of its
choosing, subject to the right of the Indemnitor to assume the defense of any
claim at any time prior to settlement or final determination thereof. In such
event, the Indemnitee shall send a written notice to the Indemnitor of any
proposed settlement of any claim, which settlement the Indemnitor may reject, in
its reasonable judgment, within 30 days after receipt of such notice. Failure to
reject such settlement within such 30-day period shall be deemed an acceptance
of such settlement. In the event the Indemnitor rejects such settlement, the
Indemnitee shall have the right to settle the claim over the objection of the
Indemnitor, unless the Indemnitor assumes the defense from the Indemnitee upon
rejecting the settlement.

     SECTION 7.06 NOTICE OF OTHER CLAIMS. In the event any Indemnitee should
have a claim against any Indemnitor under or in connection with this Agreement
that does not involve a Third-Party Claim, the Indemnitee shall notify the
Indemnitor of such claim, specifying the nature of and specific basis for such
claim and the amount of such claim, with reasonable promptness, but in no event
later than when notice thereof is required to be made pursuant to this Article.
The Indemnitor shall remit payment for the amount of such claim upon receipt of
an invoice therefor, or in the event of a dispute, the Indemnitee and the
Indemnitor shall proceed in good faith to negotiate a resolution of such
dispute, and if not resolved through negotiations, such dispute will be resolved
by litigation in an appropriate court of competent jurisdiction.

<PAGE>

     SECTION 7.07 ACCESS AND COOPERATION. Western and Buyer shall each cooperate
fully with the other as to all claims made under this Agreement, shall make
available to the other as reasonably requested all information, records and
documents relating to all such claims and shall preserve all such information,
records and documents until the termination of any such claim. Western and Buyer
also shall each make available to the other, as reasonably requested and subject
to availability, its personnel (including technical and scientific), agents and
other representatives who are responsible for preparing or maintaining
information, records or other documents, or who may have particular knowledge
with respect to any such claim.

     SECTION 7.08 NO INSURANCE. The indemnifications provided for in this
Article shall not be construed as a form of insurance and shall be binding upon
and inure to the benefit of Western and Buyer and their respective Affiliates,
successors and permitted assigns. Western and Buyer hereby waive for themselves,
their Affiliates, successors and permitted assigns, including without limitation
any insurers, any rights to subrogation for Losses arising from claims for which
each of them is respectively liable or against which each respectively
indemnifies the other, and, if necessary, Western and Buyer shall obtain waiver
of such subrogation from their respective insurers.

     SECTION 7.09 LIMITATIONS ON LIABILITIES.

          (a) Limitation on Liability.

               (1) Western's obligations for any claim relating to any
               Environmental Law, Hazardous Materials or other environmental
               matter shall arise only under Section 7.02(b) for breaches of the
               representations and warranties contained in Section 4.08.

               (2) Western shall have no liability for any Indemnifiable Loss,
               and Buyer shall have no liability for any claim for
               indemnification under Section 7.03, unless a Claim Notice or
               other notice has been delivered to the other as required by
               Section 7.04 or Section 7.06. In addition, and anything herein to
               the contrary notwithstanding, Western shall have no liability for
               any Indemnifiable Loss, and Buyer shall have no liability for any
               claim for indemnification under Section 7.03, for any breaches of
               covenants hereunder, unless a Claim Notice or other notice has
               been delivered to the other within one year after performance of
               the covenant giving rise to such Indemnifiable Loss or claim for
               indemnification, as the case may be, is required under this
               Agreement. In addition, and anything herein to the contrary
               notwithstanding, Western shall have no liability for any
               Indemnifiable Loss for any breaches of representations hereunder
               unless a Claim Notice or other notice has been delivered to it
               within the period that the representation giving rise to such
               Indemnifiable Loss survives as set forth in Article 8.

<PAGE>

               (b) No Incidental or Consequential Damages. Neither Buyer nor
               Western shall be entitled to recover from the other for any
               Losses any amount in excess of the actual damages suffered by
               such party. Buyer and Western each waive any right to recover
               punitive, special, exemplary, incidental and consequential
               damages.

               (c) Maximum Liability. Neither Western nor any of its Affiliates
               shall be liable for aggregate Losses (i) in excess of the
               Purchase Price, or (ii) for any Losses pertaining to the Real
               Property in excess of the purchase price thereof.

               (d) Exclusive Remedy. Western and Buyer each hereby acknowledges
               and agrees that its sole and exclusive remedy with respect to any
               and all claims relating to the representations, warranties,
               covenants and agreements contained in this Agreement or other
               claims pursuant to or in connection with this Agreement shall be
               pursuant to the indemnification provisions set forth in this
               Article.

               (e) No Rescission. Except as provided in Section 6.08, no breach
               of any representation, warranty, covenant or agreement contained
               herein shall give rise to any right on the part of Buyer or
               Western, as the case may be, after the consummation of the
               purchase and sale contemplated hereby, to rescind this Agreement
               or any of the transactions contemplated hereby.

               (f) Mitigation. Buyer and Western shall take all reasonable steps
               to mitigate all Losses upon and after becoming aware of any event
               that could reasonably be expected to give rise to any Losses that
               are indemnifiable hereunder.

ARTICLE 8. SURVIVAL. The representations and warranties of Western set forth in
this Agreement and in any certificate or instrument delivered in connection
herewith shall survive for a period of one year following the date of this
Agreement.

ARTICLE 9. BROKERS. Each of the Buyer and Western represent to the other that,
neither of the Buyer nor Western has, directly or indirectly, employed any
broker, finder or intermediary in connection with this Agreement or the
transactions contemplated hereby who might be entitled to a fee or commission
upon the execution of this Agreement or consummation of the transactions
contemplated hereby.

ARTICLE 10. EXPENSES. Except as otherwise specifically provided herein, each
party will bear all legal and other costs and expenses incurred by it.

<PAGE>

ARTICLE 11. NOTICES; MISCELLANEOUS

     SECTION 11.01 NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by facsimile
transmission or mailed by registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice; provided,
that notices of a change of address shall be effective only upon receipt
thereof):

     To Western, as follows:                     To Buyer, as follows:

     Western Power & Equipment Corp.             Mid-Mountain Machinery Inc.
     6407-B N.E. 117th Avenue                    ___________________________
     Vancouver, WA  98662                        ___________________________
     Attn: President                             Attn:  President
     Facsimile: (360) 253-4830                   Facsimile: ___________________

     SECTION 11.02 MISCELLANEOUS.

          (a) Entire Agreement. This Agreement supersedes all prior agreements
          between the parties (written or oral) and, except as aforesaid, is
          intended as a complete and exclusive statement of the terms of the
          Agreement between the parties. This Agreement may be amended only by a
          written instrument duly executed by the parties.

          (b) Governing Law. This Agreement shall be governed by and construed
          in accordance with the laws of the State of Washington, without regard
          to the principles of conflicts of laws of such state.

          (c) Headings. The headings contained in this Agreement are for
          reference purposes only and shall not affect in any way the meaning or
          interpretation of this Agreement.

          (d) Assignability. Neither Buyer nor Western may transfer, assign, or
          encumber any of its rights, duties, or obligations under this
          Agreement or any part hereof without the prior written consent of the
          other party. Except as otherwise provided herein, this Agreement shall
          be binding upon and inure to the benefit of the parties hereto and
          their respective successors and permitted assigns.

          (e) No Third-Party Beneficiaries. Except as otherwise expressly
          provided herein, nothing in this Agreement shall entitle Western,
          Buyer, or their respective successors and assigns permitted hereby to
          any claim, cause of action, remedy, or right of any kind.

<PAGE>

          (f) Severability. Any term or provision of this Agreement that is
          invalid or unenforceable in any jurisdiction shall, as to such
          jurisdiction, be ineffective to the extent of such invalidity or
          unenforceability, but this shall not affect the validity or
          enforceability of any of the terms and provisions of this Agreement in
          any other jurisdiction. If any provision of this Agreement is so broad
          as to be unenforceable, such provision shall be interpreted to be only
          so broad as is enforceable.

          (g) Equitable Relief. The parties hereto agree that irreparable damage
          would occur in the event that any of the provisions of this Agreement
          were not performed in accordance with their specific terms or were
          otherwise breached. Accordingly, it is agreed that the parties shall
          be entitled to an injunction or injunctions to prevent breaches of
          this Agreement and to enforce specifically the terms and provisions
          hereof in any court of the United States or any state having
          jurisdiction, this being in addition to any other remedy at law or in
          equity.

          (h) Counterparts. This Agreement may be executed in any number of
          counterparts, no one of which needs to be executed by all the parties,
          and this Agreement shall be binding upon all the parties with the same
          force and effect as if all the parties had signed the same document,
          and each such signed counterpart shall constitute an original of this
          Agreement.


          Western Power & Equipment Corp.,        Mid-Mountain Machinery Inc.,
          an Oregon corporation                   a Washington corporation


          By: ____________________________        By: _________________________
              Dean McLain  President & CEO

                                                  Title: ______________________