Document:

EXHIBIT 4.1
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                           CERTIFICATE OF DESIGNATION
                                       OF
                            SERIES A PREFERRED STOCK
                                       OF
                         WESTERN POWER & EQUIPMENT CORP.

                         Pursuant to Section 151 of the
                        Delaware General Corporation Law

            Western Power & Equipment, Corp., a Delaware corporation (the
"CORPORATION"), hereby certifies that the following resolutions were adopted by
the Board of Directors of the Corporation (the "BOARD OF DIRECTORS" or the
"BOARD") on September 21, 2004 pursuant to authority of the Board as required by
Section 151 of the Delaware General Corporation Law (the "DGCL"):

            RESOLVED, that pursuant to the authority granted to and vested in
the Board of Directors in accordance with the provisions of the Certificate of
Incorporation of the Corporation, the Board of Directors hereby authorizes a
series of the Corporation's previously authorized preferred stock, par value
$0.001 per share (the "PREFERRED STOCK"), and hereby states the designation and
number of shares, and fixes the relative rights, preferences, privileges, powers
and restrictions thereof as follows:

                                    ARTICLE 1
                                   DEFINITIONS

The terms defined in this Article whenever used in this Certificate of
Designation have the following respective meanings:

            1.1 "AFFILIATE" has the meaning ascribed to such term in Rule 12b-2
under the Securities Exchange Act of 1934, as amended.

            1.2 "ASSET SALE" means a sale, lease, exchange or other transfer (in
one transaction or a series of transactions) of all or substantially all of the
property, assets or business of the Corporation to a Person, other than an
Affiliate, in which such property, assets or business of the Corporation are
exchanged for securities or other consideration issued, or caused to be issued
by the acquiring Person or its subsidiary to the Corporation or its
stockholders.

            1.3 "BUSINESS DAY" means a day other than Saturday, Sunday or any
day on which commercial banks located in the State of New York are authorized or
obligated to close.

            1.4 "CAPITAL STOCK" means the Common Stock, the Preferred Stock and
any other shares of any other class or series of capital stock, whether now or
hereafter authorized and however designated, which have the right to participate
in the distribution of earnings and assets (upon dissolution, liquidation,
winding-up or otherwise) of the Corporation.

            1.5 "COMMON STOCK" means the common stock, par value $ 0.001 per
share, of the Corporation.

            1.6 "CONVERSION DATE" means any day on which all or any portion of
the outstanding shares of Series A Preferred Stock is converted in accordance
with the provisions hereof.

            1.7 "CONVERSION NOTICE" means a written notice of conversion
substantially in the form annexed hereto as Annex I.

            1.8 "CONVERSION RATE" has the meaning set forth in Section 6.
<PAGE>

            1.9 "CORPORATION" means WESTERN POWER & EQUIPMENT CORP., a Delaware
corporation, and any successor or resulting corporation by way of merger,
consolidation, sale or exchange of all or substantially all of the Corporation's
assets, or otherwise.

            1.10 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder, all as in effect
at the time.

            1.11 "FUNDAMENTAL CORPORATE EVENT" means an Asset Sale or a Sale of
Control.

            1.12 "HOLDER" means any Person to whom the Series A Preferred Stock
is issued by the Corporation, or any Person to whom the Series A Preferred Stock
is subsequently transferred in accordance with the provisions hereof.

            1.13 "ISSUE DATE" means the date that the Corporation consummates
the purchase of Arizona Pacific Materials, LLC, an Arizona limited liability
company ("APM").

            1.14 "LIQUIDATION PREFERENCE" means, with respect to each full share
of the Series A Preferred Stock, an amount equal to the sum of (i) the Stated
Value thereof, plus (ii) any amount in excess of the Stated Value thereof which
the Holder of such share of Series A Preferred Stock would have received had
such Holder converted such share of Series A Preferred Stock into Common Stock
immediately prior to the date of liquidation, dissolution or winding up of the
Corporation.

            1.15 "PERSON" means an individual, a corporation, a partnership, an
association, a limited liability company, an unincorporated business
organization, a trust or other entity or organization, and any government or
political subdivision or any agency or instrumentality thereof.

            1.16 "PREFERRED STOCK" means the 10,000,000 shares of preferred
stock of the Corporation authorized for issuance pursuant to its certificate of
incorporation, as amended to date, consisting of (a) 1,000,000 shares of Series
A preferred stock, and (b) 9,000,000 shares of undesignated preferred stock.

            1.17 "SALE OF CONTROL" means a transaction or series of
transactions, OTHER than in respect of the Merger and the issuance of the shares
of Series A Preferred Stock pursuant to this Certificate of Designation, in
which more than 50% of the voting power of the Corporation is disposed of to
Persons who are not Affiliates, or any other transaction or series of
transactions as a result of which the ability to control the Board of Directors
shall be vested in any Person or "group" (as such term is used in Section
13(d)(3) of the Exchange Act) who is not C. Dean McLain, the Rubin Family
Irrevocable Stock Trust, American United Global, Inc., the AMT Majority
Stockholder, the Corporation or any Affiliate of any of such Persons, whether
such transaction is effected through (a) a tender offer or exchange offer made
by any Person or "group" (as such term is used in Section 13(d)(3) of the
Exchange Act) who is not one of the foregoing Persons, (b) a sale or exchange of
Capital Stock, or (c) a merger, consolidation or like combination.

            1.18 "SEC" means the United States Securities and Exchange
Commission.

            1.19 "SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC thereunder, all as in effect at the
time.

            1.20 "SERIES A PREFERRED STOCK" has the meaning set forth in Article
2.

            1.21 "STATED VALUE" has the meaning set forth in Article 2.

            1.22 "SUBSIDIARY" means any entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
Board of Directors or other persons performing similar functions are owned
directly or indirectly by the Corporation.

All references to "CASH" or "$" herein mean currency of the United States of
America.

                                       2
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                                    ARTICLE 2
                             DESIGNATION AND AMOUNT

            This series of Preferred Stock shall consist of 1,000,000 shares of
Series A Preferred Stock and shall be designated Series A convertible Preferred
Stock (the "SERIES A PREFERRED STOCK"). The stated value of the Series A
Preferred Stock shall be $ 0.001 per share (the "STATED VALUE").

                                    ARTICLE 3
                                      RANK

            In each case, as to dividends, distributions of assets upon
liquidation, dissolution, winding-up or otherwise, whether voluntary or
involuntary, or otherwise, the Series A Preferred Stock shall rank senior and
prior to the Common Stock and any other class or series of Capital Stock of the
Corporation now or hereafter issued, except that the Series A Preferred Stock
shall rank in parity with any other class or series of Capital Stock of the
Corporation hereafter issued, specifically ranking it by its terms in parity
with the Series A Preferred Stock.

                                    ARTICLE 4
                                    DIVIDENDS

            The Series A Preferred Stock shall not pay any fixed or stated
dividend. However, if the Corporation shall at any time or from time to time
after the Issue Date declare, order, pay or make a cash dividend or other
distribution (EXCLUDING, however, any distribution of stock or other securities
or property or rights or warrants or options to subscribe for securities of the
Corporation or any of its Subsidiaries by way of dividend or spin-off) on shares
of its Common Stock, then, and in each such case, the Corporation shall declare,
order, pay and make the same cash dividend or distribution to each Holder of
Series A Preferred Stock as would have been made with respect to the number of
shares of Common Stock the Holder would have received had it converted all of
its shares of Series A Preferred Stock immediately prior to such cash dividend
or distribution.

                                    ARTICLE 5
              LIQUIDATION PREFERENCE; MERGERS, CONSOLIDATIONS, ETC.

            SECTION 5.1 If (i) the Corporation shall commence a voluntary case
under the Federal bankruptcy laws or any other applicable Federal or state
bankruptcy, insolvency or similar law, or consent to the entry of an order for
relief in an involuntary case under any law or to the appointment of a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or other similar
official) of the Corporation or of any substantial part of its property, or make
an assignment for the benefit of its creditors, or admit in writing its
inability to pay its debts generally as they become due, or if a decree or order
for relief in respect of the Corporation shall be entered by a court having
jurisdiction in the premises in an involuntary case under the Federal bankruptcy
laws or any other applicable Federal or state bankruptcy, insolvency or similar
law resulting in the appointment of a receiver, liquidator, assignee, custodian,
trustee or sequestrator (or other similar official) of the Corporation or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and any such decree or order shall be unstayed and in effect for a
period of 30 consecutive days and, on account of any such event ("INSOLVENCY
PROCEEDING") or (ii) if the Corporation shall otherwise liquidate, dissolve or
wind up, no distribution shall be made to the holders of any shares of Common
Stock or other shares of Capital Stock of the Corporation, whether now or
hereafter issued, upon any such Insolvency Proceeding, liquidation, dissolution
or winding-up, unless prior thereto, the Holders of shares of Series A Preferred
Stock, subject to this Article 5, shall have received the Liquidation Preference
with respect to each share, on an equal and pari-passu basis.

            SECTION 5.2 For purposes of this Certificate of Designation,
including, without limitation, Article 5 hereof, the consummation of a
Fundamental Corporate Event shall NOT be deemed, considered or construed as a
liquidation, dissolution or winding-up of the Corporation.

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                                    ARTICLE 6
                     CONVERSION OF SERIES A PREFERRED STOCK

            SECTION 6.1 CONVERSION RATE

                        (a) On that date (the "CONVERSION DATE") that shall be
ninety (90) days after the expiration of thirty-six (36) consecutive month
period commencing on the first day of the calendar month immediately following
December 31, 2004 (the "MEASURING PERIOD"), the shares of Series A Preferred
Stock shall, automatically, and without any further action on the part of the
Company or the Holder, be converted into shares of Common Stock (the "CONVERSION
SHARES"), as follows:

                            (i)   Twelve Million (12,000,000) Conversion Shares
                                  in the event that APM's aggregate cumulative
                                  pre-tax income during the Measuring Period
                                  shall have been $18,000,000 or greater; and

                            (ii)  In the event that APM's aggregate cumulative
                                  pre-tax income during the Measuring Period
                                  shall be less than $18,000,000 the number of
                                  Conversion Shares shall be appropriately
                                  pro-rated on the basis of 0.66666 Conversion
                                  Shares for each $1.00 of aggregate cumulative
                                  pre-tax income achieved by APM during the
                                  Measuring Period (the "CONVERSION RATE");
                                  PROVIDED, HOWEVER, that no conversion shall
                                  occur, and the shares of Series A Preferred
                                  Shares shall be automatically surrendered for
                                  cancellation, in the event that APM's pre-tax
                                  income shall by the end of the Measuring
                                  Period not have reached a minimum of
                                  $3,000,000.

                            (iii) In the event that APM's aggregate cumulative
                                  pre-tax income during the first 24 months of
                                  the Measuring Period shall be $18,000,000 or
                                  more, the Holders of the Series A Preferred
                                  Stock shall be permitted to convert up to a
                                  maximum of 500,000 shares of the Series A
                                  Preferred Stock (out of their total of
                                  1,000,000 Series A Preferred Stock) into the
                                  number of Conversion Shares equal to 12
                                  Conversion Shares for each Series A Preferred
                                  converted (for a maximum of 6,000,000
                                  Conversion Shares).

                        (b) Upon the occurrence of such conversion of the Series
A Preferred Stock, the Holders of Series A Preferred Stock shall surrender the
certificates representing such shares at the office of the Corporation.
Thereupon, there shall be issued and delivered to such Holder promptly at such
office and in its name as shown on such surrendered certificate or certificates,
a certificate or certificates for the number of shares of Common Stock into
which the shares of Series A Preferred Stock surrendered were convertible on the
date on which such conversion occurred.

            SECTION 6.2 EXERCISE OF CONVERSION PRIVILEGE

                        (a) Unless otherwise mutually agreed by the Holders of
the Series A Preferred Stock and the members of the Board of Directors of the
Corporation who are not Affiliates of such Holder(s), no shares of Series A
Preferred Stock may be converted into Conversion Shares in accordance with
Section 6.1 above until the expiration of the thirty-six (36) month Measuring
Period. The Holder shall deliver the shares of Series A Preferred Stock to the
Corporation by express courier within five Business Days following the
Conversion Date. Upon surrender for conversion, the Series A Preferred Stock
shall be accompanied by a proper assignment thereof to the Corporation or be
endorsed in blank. As promptly as practicable after the Conversion Date, but in
any event not more than five Business Days after the Conversion Date, the
Corporation shall (i) issue the Common Stock issuable at conversion in
accordance with the provisions of this Article 6, and (ii) cause to be mailed
for delivery to the Holder (x) a certificate or certificate(s) representing the
number of shares of Common Stock to which the Holder is entitled by virtue of
such conversion, and (y) cash, as provided in Section 6.3, in respect of any
fraction of a share of Common Stock issuable at conversion. Such conversion
shall be deemed to have been effected at the Conversion Date, and at such time
the rights of the Holder of the Series A Preferred Stock, as such, shall cease
and the Person or Persons in whose name or names the Common Stock shall be
issuable shall be deemed to have become the holder or holders of record of the
shares of Common Stock represented thereby and all voting and other rights
associated with the beneficial ownership of such shares of Common Stock shall at
such time vest with such Person or Persons.

                                       4
<PAGE>

                        (b) All shares of Series A Preferred Stock shall be
converted into shares of Common Stock as provided in this Article 6, with an
effective date of such conversion being either (i) immediately prior to
consummation of any Fundamental Corporate Event, or (ii) on the Conversion Date,
as the case may be, and the record date for the issuance of such Common Stock
shall be such effective date.

            SECTION 6.3 FRACTIONAL SHARES

                        No fractional shares of Common Stock or scrip
representing fractional shares of Common Stock shall be issued upon conversion
of the Series A Preferred Stock. Instead of any fractional shares of Common
Stock which otherwise would be issuable upon conversion of the Series A
Preferred Stock, the Corporation shall pay a cash adjustment in respect of such
fraction in an amount equal to the same fraction multiplied by the closing bid
price of the Common Shares on the last trading day before the Conversion Date.

            SECTION 6.4 ADJUSTMENTS TO CONVERSION RATE

                        If, prior to the date on which all shares of Series A
Preferred Stock are converted, the Corporation shall (i) pay a dividend in
shares of Common Stock or Options of Convertible Securities or make a
distribution in shares of Common Stock or Options of Convertible Securities,
(ii) subdivide its outstanding Common Stock, (iii) combine its outstanding
Common Stock into a smaller number of shares of Common Stock or (iv) issue by
reclassification of its Common Stock other securities of the Corporation, the
Conversion Rate in effect on the opening of business on the record date for
determining stockholders entitled to participate in such transaction shall
thereupon be adjusted, or, if necessary, the right to convert shall be amended,
such that the number of shares of Common Stock receivable upon conversion of the
shares of Series A Preferred Stock immediately prior thereto shall be adjusted
so that the Holder shall be entitled to receive, upon the conversion of such
shares of Series A Preferred Stock, the kind and number of shares of Common
Stock or other securities of the Corporation which it would have owned or would
have been entitled to receive after the happening of any of the events described
above had the Series A Preferred Stock been converted immediately prior to the
happening of such event or any record date with respect thereto. Any adjustment
made pursuant to this Section 6.4 shall become effective immediately after the
effective date of such event and such adjustment shall be retroactive to the
record date, if any, for such event. No adjustment with respect to any ordinary
cash dividends (made out of current earnings) on shares of Common Stock shall be
made.

                        In each case of an adjustment of the Conversion Rate for
the number of shares of Common Stock issuable upon conversion of the Series A
Preferred Stock, the Corporation, at its expense, shall compute such adjustment
or readjustment in accordance with the provisions hereof and prepare a
certificate showing such adjustment, and shall mail such certificate, by first
class mail, postage prepaid, to each registered Holder of Series A Preferred
Stock at the Holder's address as shown in the Corporation's books. The
certificate shall set forth such adjustment or readjustment, showing in detail
the facts upon which such adjustment or readjustment is based.

                                    ARTICLE 7
                                  VOTING RIGHTS

            SECTION 7.1 GENERAL VOTING RIGHTS

                        Except as otherwise provided herein or as required by
law, the Series A Preferred Stock shall be voted equally with the shares of
Common Stock and not as a separate class, at any annual or special meeting of
the stockholders of the Corporation, and may act by written consent in the same
manner as the Common Stock, in either case upon the following basis: each Holder
of shares of Series A Preferred Stock shall be entitled to such number of votes
as shall be equal to the whole number of shares of Common Stock into which such
Holder's aggregate number of shares of Series A Preferred Stock are convertible
(pursuant to Article 6 hereof) immediately after the close of business on the
record date fixed for such meeting or the effective date of such written
consent.

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<PAGE>

            SECTION 7.2 NOTICE

                        The Corporation shall provide each Holder of Series A
Preferred Stock with prior notification of any meeting of the stockholders (and
copies of all proxy materials and other information sent to shareholders). In
the event of any taking by the Corporation of a record of its stockholders for
the purpose of determining stockholders who are entitled to receive payment of
any dividend or other distribution, any right to subscribe for, purchase or
otherwise acquire (including by way of merger, consolidation or
recapitalization) any share of any class or any other securities or property, or
to receive any other right, or for the purpose of determining stockholders who
are entitled to vote in connection with any proposed liquidation, dissolution,
winding up or otherwise of the Corporation, the Corporation shall mail a notice
thereof to each Holder at least 30 days prior to the date on which any such
record is to be taken for the purpose of such dividend, distribution, right or
other event, together with a brief statement regarding the amount and character
of such dividend, distribution, right or other event to the extent known at such
time.

            SECTION 7.3 SEPARATE CLASS VOTING RIGHTS

                        To the extent that under the DGCL the vote of the
Holders of the Series A Preferred Stock, voting separately as a class, is
applicable, is required to authorize a given action of the Corporation, the
affirmative vote or consent of the Holders of at least a majority of the
outstanding shares of Series A Preferred Stock represented at a duly held
meeting at which a quorum is present or by written consent of a majority of the
outstanding shares of Series A Preferred Stock (except as otherwise may be
required under the DGCL) shall constitute the approval of such action by the
class.

                                    ARTICLE 8
                                  Miscellaneous

            SECTION 8.1 LOSS, THEFT, DESTRUCTION OF PREFERRED STOCK

                        Upon receipt of evidence satisfactory to the Corporation
of the loss, theft, destruction or mutilation of shares of Series A
Preferred Stock and, in the case of any such loss, theft or destruction, upon
receipt of indemnity reasonably satisfactory to the Corporation, or, in the case
of any such mutilation, upon surrender and cancellation of the Series A
Preferred Stock, the Corporation shall make, issue and deliver, in lieu of such
lost, stolen, destroyed or mutilated shares of Series A Preferred Stock, new
shares of Series A Preferred Stock of like tenor. The Series A Preferred Stock
shall be held and owned upon the express condition that the provisions of this
Section 8.1 are exclusive with respect to the replacement of mutilated,
destroyed, lost or stolen shares of Series A Preferred Stock and shall preclude
any and all other rights and remedies notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the replacement of
negotiable instruments or other securities without the surrender thereof.

            SECTION 8.2 WHOM DEEMED ABSOLUTE OWNER

                        The Corporation may deem the Person in whose name the
Series A Preferred Stock shall be registered upon the registry books of the
Corporation to be, and may treat it as, the absolute owner of the Series A
Preferred Stock for the purpose of receiving payment of dividends on the Series
A Preferred Stock, for the conversion of the Series A Preferred Stock and for
all other purposes, and the Corporation shall not be affected by any notice to
the contrary. All such payments and such conversion shall be valid and effectual
to satisfy and discharge the liability upon the Series A Preferred Stock to the
extent of the sum or sums so paid or the conversion so made.

            SECTION 8.3 REGISTER

                        The Corporation shall keep at its principal office a
register in which the Corporation shall provide for the registration of the
Series A Preferred Stock. Upon any transfer of the Series A Preferred Stock in
accordance with the provisions hereof, the Corporation shall register such
transfer on the register of Series A Preferred Stock.

                                       6
<PAGE>

            SECTION 8.4 WITHHOLDING

                        To the extent required by applicable law, the
Corporation may withhold amounts for or on account of any taxes imposed or
levied by or on behalf of any taxing authority in the United States having
jurisdiction over the Corporation from any payments made pursuant to the Series
A Preferred Stock.

            SECTION 8.5 HEADINGS

                        The headings of the Articles and Sections of this
Certificate of Designation are inserted for convenience only and do not
constitute a part of this Certificate of Designation.

            SECTION 8.6 SEVERABILITY

                        If any provision of this Certificate of Designation, or
the application thereof to any person or entity or any circumstance, is invalid
or unenforceable, (i) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision, and (ii) the
remainder of this Certificate of Designation and the application of such
provision to other persons, entities or circumstances shall not be affected by
such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designation
to be signed by its duly authorized officer on September 21, 2004.

                                  WESTERN POWER & EQUIPMENT CORP.

                                  By:         /s/ C. Dean McLain
                                        ---------------------------------
                                  Name:       C. Dean McLain, CEO

                                       7
<PAGE>

                                     ANNEX I

                            FORM OF CONVERSION NOTICE

TO:         WESTERN POWER & EQUIPMENT CORP.
            6407-B N.E. 117th Avenue
            Vancouver, WA  98662

                        The undersigned owner of this Series A Convertible
Preferred Stock (the "SERIES A PREFERRED STOCK") issued by Western Power &
Equipment, Corp. (the "CORPORATION") hereby irrevocably exercises its option to
convert __________ shares of the Series A Preferred Stock into shares of the
common stock, par value $0.001 per share ("COMMON STOCK"), of the Corporation in
accordance with the terms of the Certificate of Designation. The undersigned
hereby instructs the Corporation to convert the number of shares of the Series A
Preferred Stock specified above into Shares of Common Stock issued at Conversion
in accordance with the provisions of Article 6 of the Certificate of
Designation. The undersigned directs that the Common Stock issuable and
certificates therefor deliverable upon conversion and the recertificated Series
A Preferred Stock, if any, not being surrendered for conversion hereby, together
with any check in payment for fractional Common Stock, be issued in the name of
and delivered to the undersigned unless a different name has been indicated
below. All capitalized terms used and not defined herein have the respective
meanings assigned to them in the Certificate of Designation. So long as the
Series A Preferred Stock shall have been surrendered for conversion hereby, the
conversion pursuant hereto shall be deemed to have been effected at the date and
time specified below, and at such time the rights of the undersigned as a Holder
of the Series A Preferred Stock shall cease and the Person or Persons in whose
name or names the Common Stock issued at Conversion shall be issuable shall be
deemed to have become the holder or holders of record of the Common Shares
represented thereby and all voting and other rights associated with the
beneficial ownership of such Common Shares shall at such time vest with such
Person or Persons.

Date and time: ___________________________

__________________________________________
Signature

Please print name and address (including zip code number):

__________________________________________

__________________________________________

__________________________________________

                                       8EXHIBIT 10.1
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                              CONSULTING AGREEMENT

This CONSULTING AGREEMENT (this "Agreement") is made as of September 16, 2004,
by and between WESTERN POWER & EQUIPMENT CORP., an Oregon corporation (the
"Company"), and H. Phillip Cash, an individual residing at Route 1 Box 1092,
Fairfield, ID 8332 (the "Consultant").

                                    RECITALS

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

B.       Effective September 15, 2004, the Company has acquired the business and
         assets of Arizona Pacific Materials, LLC (the "Business").

C.       The Company desires to retain Consultant as a consultant, and
         Consultant wishes to serve as a consultant to the Company, upon the
         terms and subject to the conditions set forth in this Agreement.

                                    AGREEMENT

The parties, intending to be legally bound, agree as follows:

1.       DEFINITIONS.

         For purposes of this Agreement, the following terms have the meanings
         specified or referred to in this Section 1.

         "AGREEMENT" shall have the meaning set forth in the preamble.

         "BOARD OF DIRECTORS" shall mean the board of directors, or similar
         governing body, of the Company.

         "STOCK COMPENSATION" shall have the meaning set forth in Section 3.2.

         "COMPANY" shall have the meaning set forth in the first paragraph of
         this Agreement.

         "CONSULTANT" shall have the meaning set forth in the first paragraph of
         this Agreement.

         "CONSULTING PAYMENT" shall have the meaning set forth in Section
         3.1(a).

         "DISABILITY" shall have the meaning set forth in Section 4.2.

         "EFFECTIVE DATE" shall mean the date first above written.

         "FOR CAUSE" shall have the meaning set forth in Section 4.3.

         "GOOD REASON" shall have the meaning set forth in Section 4.3.

         "PERSON" shall mean any individual, corporation (including any
         non-profit corporation), general or limited partnership, limited
         liability company, joint venture, estate, trust, association,
         organization or governmental body.

         "TERM" shall have the meaning set forth in Section 2.2.
<PAGE>

2.       CONSULTING TERMS AND DUTIES.

         2.1 Consulting Services. The Company hereby retains Consultant, and
         Consultant hereby agrees to provide consulting services to the Company,
         upon the terms and subject to the conditions set forth in this
         Agreement.

         2.2 Term. The term of this Agreement shall begin on the Effective Date
         and shall, unless earlier terminated in accordance with the provisions
         of Section 4, end on the third anniversary of the Effective Date (the
         "Term").

         2.3 Duties. Consultant shall assist the Company in acquiring and
         managing other aggregate/minerals/raw materials companies, raising
         capital and securing financing for same, and shall report to, and
         perform such duties as are requested by, the Chief Executive Officer of
         the Company.

3.       COMPENSATION.

         3.1 Basic Compensation.

                        (a) Consulting Payment. Consultant shall be paid an
             annual consulting payment of $150,000 (the "Consulting Payment").
             The Consulting Payment shall be payable in equal periodic
             installments, but no less frequently than monthly.

                        (b) Expenses. The Company shall pay on behalf of
             Consultant (or reimburse Consultant for) reasonable expenses
             incurred by Consultant at the request of, or on behalf of, the
             Company in the performance of Consultant's duties pursuant to this
             Agreement, and in accordance with the Company's policies.
             Consultant shall file expense reports with respect to such expenses
             in accordance with the Company's policies. Consultant shall submit
             written requests for such reimbursement together with supporting
             documents in reasonable detail.

         3.2 Convertible Preferred Stock Compensation. Within 30 days of the
         date of this Agreement, WPEC shall deliver to the Consultant an
         aggregate of 1,000,000 shares of Series A Convertible Preferred Stock
         of WPEC (the "Preferred Stock"). WPEC shall issue the Preferred Stock
         in Consultant's name or any designee(s) of Consultant, as Consultant
         may request. Such Preferred Stock shall have the rights, privileges,
         conversion terms and conditions, and designations set forth in that
         Certificate of Designation attached hereto as Exhibit A.

4.       TERMINATION.

         4.1 Events of Termination. The Term, Consultant's Consulting Payment,
         and Convertible Preferred Stock Compensation and any and all other
         rights of Consultant under this Agreement or otherwise as a consultant
         to the Company shall terminate (except as otherwise provided in this
         Section 4):

                        (a) upon the death of Consultant;

                        (b) upon the Disability of Consultant (as defined in
             Section 4.2), immediately upon notice from either party to the
             other;

                        (c) immediately upon notice from the Company to
             Consultant that the Company is terminating Consultant's consulting
             services For Cause (as defined in Section 4.3), or at such later
             time as such notice may specify; or

                                       2
<PAGE>

                        (d) immediately upon notice from Consultant to Company
             that Consultant is terminating Consultant's contract with company
             due to a Change in Control or Ownership of Company (as defined in
             Section 4.3), or at such later time as such notice may specify.

         4.2 Definition of "Disability". For purposes of Sections 4.1 and 4.4,
         Consultant shall be deemed to have a "Disability" if, for physical or
         mental reasons, Consultant is unable to perform Consultant's duties
         under this Agreement for 90 consecutive days, or 120 days during any
         twelve month period, as determined in accordance with this Section 4.2.
         The Disability of Consultant shall be determined by the Board of
         Directors in consultation with a medical doctor selected by it.
         Consultant shall submit to a reasonable number of examinations by the
         medical doctor making the determination of Disability under this
         Section 4.2, and Consultant hereby authorizes the disclosure and
         release to the Company of such determination and all supporting medical
         records. If Consultant is not legally competent, Consultant's legal
         guardian or duly authorized attorney-in-fact shall act in Consultant's
         stead under this Section 4.2 for the purposes of submitting Consultant
         to the examinations, and providing the authorization of disclosure,
         required under this Section 4.2.

         4.3 Definitions of "For Cause"; "Good Reason"; "Change of Control of
         Ownership".

                        (a) For purposes of this Agreement, the phrase "For
             Cause" means: (i) Consultant's willful and repeated failure to
             substantially perform his duties hereunder or to adhere to any
             written Company policy if Consultant has been given 20 days' prior
             written notice of such failure and does not cure such failure by
             the end of such 20-day period; (ii) the appropriation (or attempted
             appropriation) of a material business opportunity of the Company,
             including attempting to secure or securing any personal profit in
             connection with any transaction entered into on behalf of the
             Company; (iii) Consultant's breach of any of the covenants
             contained in Section 5 or 6; (iv) the misappropriation (or
             attempted misappropriation) of any of the Company's funds or
             property; (v) Consultant's willful engagement in gross misconduct
             injurious to the Company, or (vi) the conviction of, or the
             entering of a guilty plea or plea of no contest with respect to, a
             felony.

                        (b) For purposes of this Agreement, the phrase "Good
             Reason" shall mean (i) the failure of the Company to perform or
             observe any of the material terms or provisions of this Agreement,
             and the continued failure of the Company to cure such default
             within twenty (20) days after written notice of such default given
             to the Company by Consultant, (ii) the assignment of duties
             inconsistent with Consultant's position, duties, responsibilities
             and status with the Company without Consultant's consent, and the
             failure of the Company to rescind such assignment within twenty
             (20) days after written notice of Consultant's objection to such,
             which notice shall with respect to the assignment of duties
             describe specifically the nature of such inconsistency or (iii) the
             decrease by the Board of Directors of Consultant's Consulting
             Payment by more than ten percent (10%).

                        (c) For purposes of this Agreement, the phrase "Change
             of Control or Ownership" shall mean a change in control or
             ownership of more than 25% of the outstanding stock of Company or
             Company's parent corporation.

         4.4 Termination Pay. Effective upon the termination of Consultant under
         this Agreement, the Company shall be obligated to pay Consultant (or,
         in the event of his death, his designated beneficiary) only such
         compensation as is provided in this Section 4.4, and in lieu of all
         other amounts and in settlement and complete release of all claims
         Consultant may have against the Company relating to his provision of
         consulting services to the Company.

                        (a) Termination by the Company other than For Cause or
             by Consultant with Good Reason. If the Company terminates this
             Agreement (other than For Cause or by reason of Consultant's

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<PAGE>

             Disability or death) or Consultant terminates this Agreement with
             Good Reason, the Company shall pay Consultant the Consulting
             Payment through the end of the Term, at the times such payments
             would otherwise have been made.

                        (b) Termination by the Company For Cause or Due to
             Disability or death of Consultant or by Consultant without Good
             Reason. If the Company terminates this Agreement For Cause, or Due
             to Disability or death of Consultant, or if Consultant terminates
             his consulting services without Good Reason, Consultant shall be
             entitled to receive his Consulting Payment only through the date
             such termination is effective, and shall not be entitled to any
             Bonus Compensation for the fiscal year during which such
             termination occurs or any subsequent fiscal year.

5.       NON-DISCLOSURE COVENANT.

         5.1 During the Term and thereafter, Consultant shall keep secret and
         retain in strictest confidence all confidential matters of the Company
         including the Company's know-how, trade secrets, client and supplier
         lists, details of client, supplier, 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) Consultant is
         requested by the 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) Consultant 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.

         5.2 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 Consultant or made available to Consultant 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, apparatuses, patters, 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.

6.       NON-COMPETITION AND NON-INTERFERENCE.

         6.1 Until the latest to occur of (i) termination of Consultant; (ii)
         three years following the date of termination of this Agreement and;
         (iii) such period as Consultant shall continue to receive the
         Consulting Payment under this agreement - Consultant 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 its 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 or industrial 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. In addition, the term "business
         which is competitive with the businesses of the Company" shall mean any
         person or business entity doing business in the territories serviced by
         the Company if 10%

                                       4
<PAGE>

         or more of the net revenues of such business are derived from the sale
         of aggregate/minerals/raw materials of the nature then being sold by
         the Company. 6.2 If Consultant is terminated for any reason other than
         with Good Reason, Consultant shall not, directly or indirectly, solicit
         any employee or consultant of the Company, or encourage any such
         employee or consultant to leave employment with the Company.

7.       GENERAL PROVISIONS.

         7.1 Binding Effect; Delegation of Duties Prohibited. This Agreement
         shall inure to the benefit of, and shall be binding upon, the parties
         hereto and their respective successors, assigns, heirs and legal
         representatives. The duties and covenants of Consultant under this
         Agreement, being personal, may not be delegated. This Agreement shall
         become effective on the Effective Date provided it has been executed by
         both parties.

         7.2 Notices. All notices, consents, waivers and other communications
         under this Agreement shall be made in writing and shall be deemed to
         have been duly given when (a) delivered by hand (with written
         confirmation of receipt), (b) sent by facsimile (with written
         confirmation of receipt) or (c) when received by the addressee, if sent
         by a nationally recognized overnight delivery service (receipt
         requested), in each case to the appropriate addresses and facsimile
         numbers set forth below (or to such other addresses and facsimile
         numbers as a party may designate by notice to the other parties):

         If to the Company:

                     Western Power & Equipment Corp.
                     6407-B N.E. 117th Avenue
                     Vancouver, WA 98662
                     Attention: Board of Directors
                     Telecopy: (360) 892-7927

         If to Consultant:

                     To the address set forth in the Preamble.

         7.3 Entire Agreement; Amendments. This Agreement contains the entire
         agreement between the parties with respect to the subject matter hereof
         and supersedes all prior agreements and understandings, oral or
         written, between the parties hereto with respect to the subject matter
         hereof. This Agreement may not be amended orally, but only by an
         agreement in writing signed by the parties hereto.

         7.4 Governing Law. This Agreement shall be governed by and construed in
         accordance with the laws of the State of Washington without regard to
         conflicts of laws principles.

         7.5 Jurisdiction. Any action or proceeding seeking to enforce any
         provision of, or based on any right arising out of, this Agreement may
         be brought against either of the parties in the courts of the State of
         Washington, County of Clark or, if it has or can acquire jurisdiction,
         in the United States District Court for the Western district of
         Washington, and each of the parties hereto hereby consents to the
         jurisdiction of such courts (and of the appropriate appellate courts)
         in any such action or proceeding, and waives any objection to venue
         laid therein.

         7.6 Section Headings, Construction. The headings of Sections in this
         Agreement are provided for convenience only and shall not affect its
         construction or interpretation. All references to "Section" or
         "Sections" refer to the corresponding Section or Sections of this
         Agreement unless otherwise specified. All words used in this Agreement
         shall be construed to be of such gender or number as the circumstances

                                       5
<PAGE>

         require. Unless otherwise expressly provided, the word "including" does
         not limit the preceding words or terms.

         7.7 Severability. If any provision of this Agreement is held invalid or
         unenforceable by any court of competent jurisdiction, the other
         provisions of this Agreement shall remain in full force and effect. Any
         provision of this Agreement held invalid or unenforceable only in part
         or degree shall remain in full force and effect to the extent not held
         invalid or unenforceable.

         7.8 Counterparts. This Agreement may be executed in one or more
         counterparts, each of which shall be deemed to be an original copy of
         this Agreement and all of which, when taken together, shall be deemed
         to constitute one and the same agreement.

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first above written.

WESTERN POWER & EQUIPMENT CORP.

By:_______________________________             _____________________________
Name:                                          H. Phillip Cash
Title:

                                       6

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