EXHIBIT 2.1 AGREEMENT AND PLAN OF MERGER

EXHIBIT 2.1

AGREEMENT AND PLAN OF MERGER

dated as of

September 30, 2005

among

PW Eagle, Inc.

Poly Merger, LLC

and

USPoly Company

AGREEMENT AND PLAN OF MERGER

                This Agreement and Plan of Merger, dated as of September 30, 2005 (this "Agreement"), is among PW Eagle, Inc., a Minnesota corporation ("PWEI"), Poly Merger, LLC, a Minnesota limited liability company ("MergerCo") and wholly-owned subsidiary of PWEI, and USPoly Company, a Minnesota corporation (the "Company") and majority-owned subsidiary of PWEI, and evidences that, for and in consideration of the mutual covenants set forth herein, the parties hereto hereby agree as follows:

Article I: The Merger

                Section 1.01.           The Merger. (a) At the Effective Time (as defined in Section 1.01(b)), the Company shall be merged with and into MergerCo (such merger, the "Merger") in accordance with the Minnesota Business Corporation Act ("Corporation Act") and the Minnesota Limited Liability Company Act ("LLC Act") (the Corporation Act and the LLC Act shall be collectively referred to as "Minnesota Law"), whereupon the separate existence of the Company shall cease and MergerCo shall be the surviving company (the name of which shall be as provided in Section 2.01) (the "Surviving Company"). The Merger is and other transactions contemplated by this Agreement are hereinafter sometimes referred to as the "Transaction".

                                (b)            As soon as practicable after the satisfaction or, to the extent permitted hereunder, waiver of the conditions to the Transaction, and in any event no later than December 31, 2005, the Company and MergerCo shall file articles of merger with the Minnesota Secretary of State and make all other filings or recordings required by Minnesota Law in connection with the Merger. The Merger shall be consummated and become effective at the time as such articles of merger are duly filed with the Minnesota Secretary of State, or (iii) at such later time as is specified in such articles of merger (as the case may be, the "Effective Time"). The closing of the Transaction (the "Closing") shall take place on the date of this Agreement (the "Closing Date") at the offices of Fredrikson & Byron, PA, 200 South Sixth Street, Suite 4000, Minneapolis, Minnesota 55402 or at such other place as the parties shall mutually agree.

                                (c)            From and after the Effective Time, the Surviving Company shall possess all the rights, privileges, powers and franchises of a public as well as a private nature, and be subject to all the restrictions, disabilities and duties of each of the Company and MergerCo (hereinafter sometimes referred to as the "Constituent Companies"); and all and singular, the rights, privileges, powers and franchises of each of the Constituent Companies, and all property, real, personal and mixed, and all debts due to either of the Constituent Companies on whatever account, as well for stock subscriptions as all other things in action or belonging to each of the Constituent Companies, shall be vested in the Surviving Company; and all property, rights, privileges, powers and franchises, and all and every other interest shall be thereafter as effectually the property of the Surviving Company as they were of the Constituent Companies, and the title to any real estate vested by deed or otherwise, in either of the Constituent Companies, shall not revert or be in any way impaired by reason of the Merger; but all rights of creditors and all liens upon any property of either of the Constituent Companies shall be preserved unimpaired, and all debts, liabilities and duties of each of the Constituent Companies shall thenceforth attach to the Surviving Company, and may be enforced against it to the same extent as if said debts, liabilities and duties had been incurred or contracted by it. The foregoing shall not in any way limit the consequences and effects of the Merger provided under Minnesota Law.

                Section 1.02.           Conversion of Shares. At the Effective Time:

                                (a)            each share of capital stock of the Company owned by PWEI immediately prior to the Effective Time shall automatically be cancelled, and no payment shall be made with respect thereto;

                                (b)            all membership interests of MergerCo held by PWEI immediately prior to the Effective Time shall become identical outstanding membership interests in the Surviving Company, and all such membership interests shall constitute the only outstanding membership interests of the Surviving Company; and

                                (c)            except as provided in subsection (a) of this Section 1.02, each outstanding share of the Company's Common Stock, par value $.01 per share ("Company Common Stock") outstanding immediately prior to the Effective Time shall be automatically cancelled and converted into the right to receive:

                                (i)             0.0944 share(s) of Common Stock, par value $.001 per share, of PWEI (such shares, the "Merger Shares"; and such class of Common Stock, the "PWEI Common Stock"); and

                                (ii)            cash in the amount of $0.85, without any interest (the "Cash Consideration").

                The Merger Shares and Cash Consideration are hereinafter sometimes collectively referred to as the "Merger Consideration". The Merger Consideration shall be allocated among the persons or entities holding shares of Company Common Stock to which subparagraph (c) applies pro rata in accordance with their respective ownership of such shares. Notwithstanding the foregoing, no fractional shares of PWEI Common Stock shall be issued in the Merger and, instead, all fractional shares of PWEI Common Stock that a holder of Company Common Stock would otherwise be entitled to receive as a result of the Merger shall be rounded up to the next whole share.

                Section 1.03.           Exchange of Shares. (a) It is a condition to PWEI's obligation to deliver the Merger Consideration payable in respect of any Company Common Stock that the holder thereof surrender for cancellation to the Surviving Company (or its agent for such purpose) the certificate or certificates representing such Company Common Stock or an affidavit of lost certificate in a form acceptable to the Surviving Company, which surrender shall occur at the time and place of the Closing or as soon thereafter as possible. Until so surrendered, each certificate representing shares of Company Common Stock to which Section 1.02(c) applies shall, from and after the Effective Time, represent for all purposes only the right to receive the Merger Consideration payable in respect thereof hereunder.

                                (b) As promptly as reasonably practicable after the Effective Time, PWEI shall mail or cause to be mailed to each holder of record of a certificate or certificates (to the extent such certificates have not already been submitted to the Company) which immediately prior to the Effective Time represented outstanding shares (other than cancelled shares and dissenting shares) of Company Common Stock (the "Certificates") (i) a letter of transmittal (which will be in customary form and will specify that delivery will be effected, and risk of loss and title to the Certificates will pass, only upon proper delivery of the Certificates to PWEI or its designee and will be in such form and have such other provisions as MergerCo and PWEI will reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration which the number of shares of Common Stock previously represented by such Certificates shall have been converted into the right to receive pursuant to this Agreement.

                                (c) Upon surrender to PWEI or its designee of a Certificate for cancellation, together with such letter of transmittal, duly executed and completed in accordance with the instructions thereto, and such other documents as may be reasonably required by PWEI pursuant to such instructions, the holder of such Certificate will be entitled to receive in exchange therefor the Merger Consideration for each share of Common Stock formerly represented by such Certificate, to be distributed as soon as practicable after the Effective Time, (after giving effect to any required tax withholding) in each case without interest, and the Certificate so surrendered will immediately be cancelled. If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they will be cancelled and exchanged as provided in this Section 1.02(c). From and after the Effective Time, holders of Certificates will cease to have any rights as stockholders of the Company, except as provided by law.

                                (d)            If any Certificate will have been lost, stolen or destroyed, upon the delivery to PWEI of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and an agreement to indemnify the Surviving Corporation against any claim that may be made against it with respect to such certificate, PWEI will issue in exchange for such Certificate the Merger Consideration.

                                (e)            After the Effective Time, the stock transfer books of the Company shall be closed and there shall be no further registration or transfers of shares of capital stock of the Company which were outstanding immediately prior to the Effective Time.

                Section 1.04.           Treatment of Company Stock Option Plans and Options. At the Effective Time, each option to purchase shares of Company Common Stock that is outstanding at the Effective Time, whether or not exercisable and whether or not vested ("Company Options"), shall, without any action on the part of the Company or the holder thereof, be cancelled and converted into options to purchase PWEI Common Stock, exercisable upon the same terms and conditions as under the Company Options (including provisions regarding vesting), except that (i) such Company Options shall entitle the holder to purchase from PWEI the number of shares of PWEI Common Stock (rounded up to the nearest whole number of such shares) that equals the product of .1889 multiplied by the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time, (ii) the option exercise price per share of PWEI Common Stock shall be an amount (rounded up to the nearest full cent) equal to the option exercise price per share of Company Common Stock in effect immediately prior to the Effective Time multiplied by 5.2909.

Article II: The Surviving Company

                Section 2.01.           Articles of Organization. The articles of organization of MergerCo in effect at the Effective Time shall be the articles of organization of the Surviving Company until amended in accordance with applicable law; provided that at the Effective Time such articles of organization shall automatically be amended by deleting the words "Poly Merger, LLC" each place (including the heading) such words appear therein and inserting, in lieu thereof, the words "USPoly Company, LLC".

                Section 2.02.           Bylaws. The bylaws of MergerCo in effect at the Effective Time shall be the bylaws of the Surviving Company until amended in accordance with applicable law; provided that at the Effective Time such bylaws shall automatically be amended by deleting the words "Poly Merger LLC" each place (including the heading) such words appear therein and inserting, in lieu thereof, the words "USPoly Company, LLC".

                Section 2.03.           Directors and Officers. From and after the Effective Time, until successors are duly elected or appointed in accordance with applicable law: (i) the directors of the Company at the Effective Time shall be the governors of the Surviving Company, and (ii) the officers of Company at the Effective Time shall be the officers of the Surviving Company.

Article III: Representations and Warranties of the Company

                The Company hereby represents and warrants to PWEI and MergerCo (the "Acquirors") that:

                Section 3.01.           Organization and Existence. (a) The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Minnesota. The Company has the full corporate power and authority to own and lease its properties and assets and to carry on its business as and where such properties and assets are now owned, leased and/or operated and such business is now conducted. The Company has heretofore made available to PWEI true, correct and complete copies of the articles of incorporation and bylaws, each as amended to the date hereof, of the Company. The Company is duly licensed or qualified to do business as a foreign corporation and is in good standing in all jurisdictions in which the character of the properties and assets now owned and/or operated by it or the nature of the business now conducted by it requires it to be so licensed or qualified and in which the failure to be so licensed or qualified could reasonably be expected to have a material adverse effect on the condition (financial or otherwise), business, properties, assets, liabilities, capitalization, financial position, operations, results of operations or prospects of the Company, or on the ability of the Company to perform its obligations under this Agreement and/or to consummate the Transaction (a "Company Material Adverse Effect").

                                (b)            The Company has no Subsidiaries. For the purposes of this Agreement, the term "Subsidiary" means, of any entity, any other entity the securities or other ownership interests having ordinary voting power to elect a majority of the board of directors (or other persons performing similar functions) of which are directly or indirectly owned by such first entity.

                Section 3.02.           Consents, Authorizations and Conflicts. As of the Closing Date, (a) the Company will have the full corporate power and authority to enter into this Agreement and each of the other agreements, instruments, certificates or other documents executed and delivered (or to be executed and delivered) by the Company in connection with this Agreement and/or the Transaction (collectively with the Agreement, the "Company Documents"). Neither the execution and delivery by the Company of this Agreement or any of the other Company Documents, nor the consummation by the Company of the Transaction, nor the performance by the Company of its other obligations hereunder or thereunder, require or will require any governmental authority or private party consent, waiver, approval, authorization or exemption (collectively, "Consents") or the giving of any notice ("Notice") applicable to the Company (as opposed to PWEI and MergerCo) except for: (i) the filing of articles of Merger in accordance with Minnesota Law , (ii) the Consents contemplated by Article V to be obtained from the Board of Directors and stockholders of the Company, (iii) Consents that have been duly obtained and Notices that have been duly given on or before the date hereof, and (iv) Consents and Notices the failure to obtain (in the case of Consents) or give (in the case of Notices) cannot reasonably be expected to have a Company Material Adverse Effect.

                                (b)            At the Closing Date, this Agreement and each other Company Document will be duly authorized, executed and delivered by the Company and will constitute the legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, reorganization, insolvency, fraudulent conveyance or similar laws of general application relating to or affecting the enforcement of creditors' rights. Upon receiving a majority vote of shareholders of the Company, the execution and delivery by the Company of the Company Documents, the performance by the Company of its obligations thereunder, and the consummation of the Transaction, do not and will not contravene, conflict or be inconsistent with, result in a breach of, constitute a violation of or default under, or require or result in any right of acceleration or to create or impose any Lien (as defined in Section 3.05) under: (i) the Company's articles of incorporation or bylaws, or (ii) except where such contravention, conflict, inconsistency, breach, violation, default, right or imposition can not reasonably be expected to have a Company Material Adverse Effect: (x) any Laws (as defined in Section 3.08) applicable or relating to the Company or any of the businesses or assets of the Company, or (y) any Company Permit (as defined in Section 3.08) or Company Contract (as defined in Section 3.09).

                Section 3.03.           Company Financial Statements. (a) The books of account and other financial and accounting records of the Company are, and during the respective periods covered by the Company Financial Statements (as hereinafter defined) were, correct and complete in all material respects, fairly and accurately reflect or reflected their respective income, expenses, assets and liabilities, including the nature thereof and the transactions giving rise thereto, and provide or provided a fair and accurate basis for the preparation of the Company Financial Statements. The Company has heretofore delivered to PWEI certain audited financial statements of the Company (the "Company Financial Statements"), including an audited balance sheet as of December 31, 2004 (the "Company Base Date"). The Company Financial Statements have been prepared in conformity with generally accepted accounting principles (except for the absence of notes and as otherwise Previously Disclosed (as defined below)), consistently applied, and are correct and complete in all material respects, and fairly present the financial position of the Company as of the respective dates thereof and the results of its operations and cash flows for the periods covered thereby.

                                (b)            The Company has no indebtedness, liabilities or obligations (absolute, contingent or otherwise) other than those (i) that have been set forth or reserved against in the Company Financial Statements, (ii) incurred since the Company Base Date in the ordinary course of its business or otherwise consistent with recent past practice that are, individually and in the aggregate, of an immaterial nature and amount, and (iii) arising under Laws, Company Permits and/or Company Contracts Previously Disclosed.

                                (c)            For purposes of this Article III, the term "Previously Disclosed" means previously disclosed in writing or made available (including in this Agreement and the Company Financial Statements) to PWEI or its representatives by the Company or any of its representatives.

                Section 3.04.           Company Capitalization. The authorized capital stock of the Company consists of 30,000,000 shares of Company Common Stock, of which 13,557,858 shares are issued and outstanding, options to purchase 599,432 shares of Company Common Stock and the Company Warrants (as defined in Section 5.01(b) below). All such outstanding shares are duly authorized, validly issued, fully paid and nonassessable shares of capital stock of the Company. There are no other issued, outstanding or existing (A) securities convertible into or exchangeable for any shares of capital stock of the Company; (B) except as Previously Disclosed, Company Options, warrants or other rights to purchase or subscribe for any shares of capital stock of the Company or for securities convertible into or exchangeable for any shares of capital stock of the Company ; or (C) agreements or commitments of any kind or description relating to the issuance or purchase of any shares of capital stock of the Company, any such convertible or exchangeable securities or any such options, warrants or other rights.

                Section 3.05.           Company Properties; Liens. The Company has good and marketable title to its real and personal property and assets, free and clear of all liens, security interests, mortgages, pledges, covenants, easements, encumbrances, defects in title, agreements and claims and rights of third parties ("Liens") other than the following ("Company Permitted Liens"): (i) Liens for taxes not yet due and payable; (ii) Liens imposed by Laws, such as banker's, warehousemen's, mechanic's and materialmen's liens, and other similar statutory or common law liens arising in the ordinary course of business; (iii) Liens arising out of pledges, bonds or deposits under worker's compensation laws, unemployment insurance, old age pension or other social security or retirement benefits or similar legislation and deposits securing obligations for self-insurance arrangements in connection with any of the foregoing; (iv) easements, rights of way, building restrictions, minor defects or irregularities in title and such other encumbrances or charges against property (real, personal or mixed) as are of a nature that do not in a materially adverse way affect the marketability of the same or interfere with the use thereof in the ordinary course of business as presently conducted; (v) Liens arising under Company Contracts Previously Disclosed; (vi) Liens arising under indebtedness, liabilities or obligations set forth or reserved against the Company Financial Statements; and (vii) Liens otherwise Previously Disclosed.

                Section 3.06.           Company Intellectual Property Rights. (a) The Company has Previously Disclosed all (i) Intellectual Property Rights (as hereinafter defined) owned, licensed or used by the Company ("Company IP"), and (ii) all license and other agreements with respect to any of the foregoing. There are no pending or threatened claims (x) against the Company or any stockholder or other affiliate thereof by any person or entity claiming any adverse right of ownership or use of any of the Company IP, or (y) that the Company is infringing upon any rights in or to the Intellectual Property Rights of any other person or entity; and, no valid basis for any such claim exists.

                                (b)            For purposes of this Agreement, the term "Intellectual Property Rights" means all registered and unregistered trademarks, trademark applications, service marks, trade names, corporate and fictitious names, trade dress rights, patents, patent applications, copyrights, copyright applications, inventions, computer software, programs and source codes, technical information, administrative systems, trade secrets, telephone and telecopier numbers, email addresses, logos, slogans, proprietary processes and formula and all other confidential, proprietary and other information, know-how and intellectual property rights, whether patentable or unpatentable, registered or unregistered, and all goodwill and all the rights and claims associated with any of the foregoing.

                Section 3.07.           Company Insurance. The Company has Previously Disclosed all information requested by PWEI with respect to any insurance policies and fidelity bonds covering the assets, business, equipment, properties, operations, employees, officers and directors of the Company. There are no material claims pending under any such policies or material disputes with underwriters, and all premiums due and payable thereunder have been paid. There are no pending or threatened terminations with respect to any such policies, and the Company is in compliance in all material respects with all conditions contained therein. All such policies are in full force and effect.

                Section 3.08.           Company Litigation and Compliance. Except as Previously Disclosed or (in the case of the following clauses (i)(y), (iii) and (iv) only) where such events or circumstances can not reasonably be expected to have a Company Material Adverse Effect to the knowledge of the Company: (i) there are no governmental authority or private party actions, suits, claims, proceedings or investigations pending or threatened against the Company or any stockholder thereof (y) relating to the Company or any properties or assets owned, leased, licensed or operated by the Company, or (z) which questions or challenges the validity of this Agreement or any other Company Document or any action taken or to be taken by the Company or any stockholder thereof pursuant thereto; (ii) the Company is not the subject of any judgment, order or decree of any governmental authority, court or arbitrator; (iii) the Company is in compliance with all federal, state, local and foreign laws, statutes, ordinances, codes, judgments, orders, decrees, directives, rules and regulations of any governmental authority, court or arbitrator ("Laws") applicable or relating to its businesses, properties or asset