ASSET PURCHASE AGREEMENT

EXHIBIT 10.1

------------

ASSET PURCHASE AGREEMENT

------------------------

BETWEEN: Western Power & Equipment Corp.,

an Oregon corporation ("Western")

AND: Yukon Equipment, Inc.

an Alaska corporation ("Buyer")

DATE: May 17, 2007

RECITALS

--------

A. Western is the owner and operator of construction equipment sales, service,

and leasing operations in Anchorage and Fairbanks, Alaska (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.

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:

<PAGE>

(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 set forth on

EXHIBIT C ("F&F").

(d) Shop Tools. Shop equipment, service tools, parts and service

manuals and literature set forth on EXHIBIT D ("Shop Tools").

(e) Vehicles. All vehicles set forth on EXHIBIT E ("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).

(g) Signage. All existing signage at the Retail Operations

("Signage").

(h) Computer Equipment. All computer equipment set forth on EXHIBIT F

("Computers").

(i) Service and Parts Manuals. All service and parts manuals and

literature currently at the Retail Operations.

(j) Leasehold Improvements. All leasehold improvements currently at

the Retail Operations.

(k) Service Work-in-Process. All service work-in-process as of the

date of closing.

(l) Assumed Business Name. All rights to the dba/tradename of Yukon

Equipment.

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) All accounts receivable as of the closing date;

(c) All certificates of deposit and other forms of security or bid

deposits held by third-parties;

<PAGE>

(d) Prepaid taxes, insurance, and other expenses and credits, refunds

and receivables of such items.

(e) 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."

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 $10,759,274.31;

consisting of $7,387,320.38 for new equipment, $249,953.31

for used equipment, and $3,122,000.62 for rental equipment.

Terms are cash, debt assumption as set forth on EXHIBIT A-1,

and/or dealer transfer as of the date of closing set forth

above.

(2) Parts. The purchase price for the Parts, as set forth on

EXHIBIT B attached hereto, is $647,295.10. Terms are cash

and/or dealer transfer as of the date of closing set forth

above.

(3) Furniture & Fixtures. The purchase price for the Furniture &

Fixtures, as set forth on EXHIBIT C attached hereto, shall be

$52,409.25. Terms are cash at closing.

(4) Shop Tools. The purchase price for the Shop Tools, as set

forth on EXHIBIT D attached hereto, shall be $81,881.08.

Terms are cash at closing.

(5) Vehicles. The purchase price for the Vehicles, as set forth

on EXHIBIT E attached hereto, shall be $80,000.00. 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) Signage. The purchase price for the Signage, as set forth

above, shall be $5,000.00 payable in cash at closing.

(8) Computers. The purchase price for the Computers, as set forth

on EXHIBIT F attached hereto, shall be $11,315,25 payable in

cash at closing.

<PAGE>

(9) Service and Parts Manuals. The purchase price for the Service

and Parts Manuals, as set forth above, shall be $5,000.00

payable in cash at closing.

(10) Leasehold Improvements. The purchase price for the Leasehold

Improvements, as set forth above, shall be $-0- payable in

cash at closing.

(11) Service Work-In-Process. The purchase price for the Service

Work-In-Process, as set forth above, shall be $32,764.70

payable in cash at closing. Except as otherwise provided in

section 7.02, Buyer will assume all of Western's future

liabilities and obligations to perform machine warranty work

for a prepaid fee of $30,000 which fee to be credited against

the purchase price at closing.

(12) Prepaid Items. All prepaids expenses, taxes, purchases, and

deposits shall be prorated between Buyer and Western as of

the date of close. At closing, Buyer shall reimburse Western

for that portion of such prepaid items that are properly

allocated to the Retail Operations after the date of closing.

(b) The Purchase Price for all assets specified above 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.

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 Retail

Operations. The Goodwill value for the Retail Operations is agreed to be

$500,000 payable in accordance with the terms of a Promissory Note in the form

attached as EXHIBIT G. 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:

<PAGE>

(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; and

(b) 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) Fully executed Promissory Note for Goodwill;

(c) Duly executed and effective assumptions of lease for both the

Anchorage, AK facility and the Fairbanks, AK facility; and

(d) Any 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 Alaska.

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

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. Western has title to the

tangible and intangible 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

<PAGE>

Purchased Assets, price information, and information on the schedules to such

exhibits and to the Agreement, is true and correct.

SECTION 4.05 USE OF COMPUTER SYSTEM AND SOFTWARE. In connection with

Buyer's purchase of the Retail Operations, Buyer has requested that after the

close of such purchase the Buyer be allowed to continue to use Western's

computer system and software until such time as Buyer has its own system and

software operational. Western agrees to allow such access and provide ongoing

support of Buyer's use of Western's system under the following terms and

conditions:

(a) Buyer shall pay Western $2,500 per month (or such other sum as may

be agreed between Buyer and Western in writing) for access to and

use of Western's computer system and software. Such amount shall

be paid by the first of each month for each month that Buyer uses

Western's system. The first and last months' fees shall be

prorated for the actual portion of the month Buyer had access to

Western's system.

(b) All third-party charges for use of the system and software

including, without limitation, database creation and maintenance

fees, programming and software changes, set-up, data input, file

conversion, and similar fees and expenses incurred by Western

shall be reimbursed by Buyer to Western upon Western's request.

(c) Western shall not be held responsible or liable for system or

software problems or errors.

(d) Buyer will be solely responsible for acquiring and setting up a

new system for Buyer's use and to pay all fees and expenses

related thereto including, but not limited to, set-up, date input,

file conversion, database creation and transfer, user access, and

maintenance.

(e) Western shall provide routine ongoing support of Western's system

and Buyer's use of such system. Western will not provide training

or other non-routine support.

(f) Buyer acknowledges receipt of the outline of issues to be

considered in using Western's systems and in establishing Buyer's

own system attached as EXHIBIT 4.05.

(g) Buyer agrees to reimburse Western for all regular dataline access

fees for the Retail Operations while Buyer is using Western's

system. These fees vary somewhat but are approximately $780 per

month for Anchorage and $830 per month for Fairbanks.

ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and

warrants to Western as set forth below.

<PAGE>

SECTION 5.01 ORGANIZATION AND QUALIFICATION. Buyer is a corporation

validly existing and in good standing under the laws of the State of Alaska.

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.

SECTION 5.07 EMPLOYER IDENTIFICATION NUMBER. Buyer's federal employer

identification number is 20-8865620.

SECTION 5.08 ASSUMPTION OF LEASES. Buyer will take all actions required

to assume all real property and personal property leases for the Retail

Operations.

SECTION 5.09 REPLACEMENT OF SECURITY DEPOSITS. Buyer will take all

actions required to replace all existing prepayments, security deposits, and bid

deposits held by customers and vendors ("Deposits") and refund all Deposits to

Western at closing. Deposits are listed on attached as EXHIBIT H.

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 assumption of the real

property leases pursuant to this Agreement. Each party shall, and shall cause

its Affiliates to,

<PAGE>

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, respect