Common Stock and Warrant Purchase Agreement



 Exhibit 10.1 
  
 PW EAGLE, INC. 
  
 AND 
  
 THE PURCHASERS NAMED HEREIN 
  

  
 COMMON STOCK AND WARRANT PURCHASE AGREEMENT 
  

  
 December 5, 2005 







 PW EAGLE INC. 
 COMMON STOCK AND WARRANT PURCHASE AGREEMENT 
  
 THIS COMMON STOCK AND WARRANT PURCHASE AGREEMENT (this “Agreement”) is made as of
December 5, 2005 by and between PW EAGLE, INC., a Minnesota corporation with its principal office at 1550 Valley River Drive, Eugene, OR 97440 (the “Company”), and those purchasers listed on the
attached Exhibit A, as such exhibit may be amended from time to time (each a “Purchaser”, and collectively, the “Purchasers”). 
  
 RECITALS 
  
 WHEREAS, the Company has authorized the sale and issuance of up to 1,000,000 shares (the “Shares”) of the common stock of
the Company, $.01 par value per share (the “Common Stock”), and warrants to purchase 250,000 shares of Common Stock to certain investors in a private placement (the “Offering”). 
  
 WHEREAS, pursuant to Section 4(2)
of the Securities Act of 1933, as amended and Rule 506 promulgated thereunder, the Company desires to sell to the Purchasers listed on the attached Exhibit A, as such exhibit may be amended from time to time, and such Purchasers desire to purchase
from the Company an aggregate of 1,000,000 shares of common stock of the Company, par value $0.01, (the “Common Shares”) and warrants to purchase 250,000 shares of Common Stock on the terms and subject to the conditions set forth in this
Agreement. 
  
 NOW,
THEREFORE, in consideration of the foregoing recitals and the mutual covenants and agreements contained herein, the parties hereto, intending to be legally bound, do hereby agree as follows: 
  
 1. Purchase of the Securities. 
  
 1.1 Agreement to Sell and Purchase. At the Closing (as hereinafter
defined), the Company will sell to the Purchasers, and the Purchasers will purchase from the Company, the number of Common Shares and warrants to purchase Common Stock of the Company (the “Warrants” and together with the Common Shares, the
“Securities”) set forth opposite each Purchaser’s name on Exhibit A for an aggregate purchase price of $18.75 (the “Purchase Price”). The Warrants shall be in the form set forth hereto as Exhibit B. 
  
 1.2 Placement Agent Fee. The Purchasers acknowledge that the
Company intends to pay to Craig-Hallum Capital Group LLC, in its capacity as the placement agent for the Offering (the “Placement Agent”), a fee in respect of the sale of Securities to any Purchaser. The Company shall indemnify and hold
harmless the Purchasers from and against all fees, commissions, or other payments owing by the Company to the Placement Agent or any other persons from or acting on behalf of the Company hereunder. 







 1.3 Closing; Closing Date. The completion of the sale and purchase of the Securities (the
“Closing”) shall be held at 9:00 a.m. (Central Time) as soon as practicable following the satisfaction of the conditions set forth in Section 4 (the “Closing Date”), at the offices of Fredrikson & Byron, P.A., 200
South 6th Street, Suite 4000, Minneapolis, MN or at such other time and place as the Company and Purchasers may
agree. 
  
 1.4 Delivery of the Shares. At the Closing,
subject to the terms and conditions hereof, the Company will deliver to the Purchasers a stock certificate or certificates and Warrant or Warrants, in such denominations and registered in such names as the Purchasers may designate by notice to the
Company, representing the Securities, dated as of the Closing Date (each a “Certificate”), against payment of the purchase price therefor by cash in the form of wire transfer, unless other means of payment shall have been agreed upon by
the Purchasers and the Company. 
  
 2. Representations and Warranties of the
Company. The Company hereby represents and warrants to the Purchasers: 
  
 2.1 Authorization. All corporate action on the part of the Company, its officers, directors and shareholders necessary for the authorization, execution and delivery of this Agreement has been taken. The Company
has the requisite corporate power to enter into this Agreement and carry out and perform its obligations under the terms of this Agreement. At the Closing, the Company will have the requisite corporate power to issue and sell the Securities and the
Common Stock issuable upon exercise of the Warrants (the “Warrant Shares”). This Agreement has been duly authorized, executed and delivered by the Company and, upon due execution and delivery by the Purchasers, this Agreement will be a
valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights
generally or by equitable principles. 
  
 2.2 No Conflict with
Other Instruments. The execution, delivery and performance of this Agreement, the issuance and sale of the Securities to be sold by the Company under this Agreement, the issuance of the Warrant Shares upon exercise of the Warrants and the
consummation of the actions contemplated by this Agreement (which for all purposes herein shall include exercise of the Warrants) will not (A) result in any violation of, be in conflict with, or constitute a default under, with or without the
passage of time or the giving of notice: (i) any provision of the Company’s or its subsidiaries’ Articles of Incorporation or Bylaws as in effect on the date hereof or at the Closing; (ii) any provision of any judgment,
arbitration ruling, decree or order to which the Company or its subsidiaries are a party or by which they are bound; (iii) any bond, debenture, note or other evidence of indebtedness, or any material lease or contract, mortgage, indenture, deed
of trust, loan agreement, joint venture or other material agreement, instrument or commitment to which the Company or any subsidiary is a party or by which they or their respective properties are bound; or (iv) any statute, rule, law or
governmental regulation applicable to the Company; or (B) result in the creation or imposition of any lien, encumbrance, claim, security interest or restriction whatsoever upon any of the properties or assets of the Company or any subsidiary or
any acceleration of indebtedness pursuant to any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of 







 indebtedness or any indenture, mortgage, deed of trust or any other agreement or instrument to which the Company or any
subsidiary are a party or by which they are bound or to which any of the property or assets of the Company or any subsidiary is subject. No consent, approval, authorization or other order of, or registration, qualification or filing with, any
regulatory body, administrative agency, or other governmental body is required for the execution and delivery of this Agreement by the Company and the valid issuance or sale of the Securities by the Company pursuant to this Agreement, other than
such as have been made or obtained and that remain in full force and effect, and except for the filing of a Form D or any filings required to be made under state securities laws. 
  
 2.3 Articles of Incorporation; Bylaws. The Company has made available to the Purchasers true, correct and complete
copies of the Articles of Incorporation and Bylaws of the Company, as in effect on the date hereof. 
  
 2.4 Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the
laws of the State of Minnesota and has all requisite corporate power and authority to carry on its business as now conducted. The Company and each of its subsidiaries has full power and authority to own, operate and occupy its properties and to
conduct its business as presently conducted and is duly qualified to transact business and is in good standing in each jurisdiction in which the failure so to qualify would have a material adverse effect on its or its subsidiaries’ business,
financial condition, properties operations or assets or its ability to perform its obligations under this Agreement (a “Material Adverse Effect”). 
  
 2.5 SEC Filings. The consolidated financial statements contained in each report, registration statement (on a form other than Form S-3 or S-8) and
definitive proxy statement filed by the Company with the Securities and Exchange Commission (the “SEC”) between January 1, 2001 and the date of this Agreement (the “Company SEC Documents”): (i) complied as to form in
all material respects with the published rules and regulations of the SEC applicable thereto and were timely filed; (ii) the information contained therein as of the respective dates thereof did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances under which they were made not misleading; (iii) were prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods covered, except as may be indicated in the notes to such financial statements and (in the case of unaudited statements) as permitted by Form 10-Q of the SEC, and except that
unaudited financial statements may not contain footnotes and are subject to year-end audit adjustments; and (iv) fairly present the consolidated financial position of the Company and its subsidiaries as of the respective dates thereof and the
consolidated results of operations cash flows and the changes in shareholders’ equity of the Company and its subsidiaries for the periods covered thereby. Except as set forth in the financial statements included in the Company SEC Documents,
neither the Company nor its subsidiaries has any liabilities, contingent or otherwise, other than liabilities incurred in the ordinary course of business subsequent to September 30, 2005, and liabilities of the type not required under generally
accepted accounting principles to be reflected in such financial statements. Such liabilities incurred subsequent to September 30, 2005, are not, in the aggregate, material to the financial condition or operating results of the Company and its
subsidiaries, taken as a whole. 







 2.6 Capitalization. The authorized capital stock of the Company consists of (i) 30,000,000
shares of Common Stock, of which (A) 9,595,243 shares of Common Stock and 595,508 shares of Class B common stock were issued and outstanding as of December 2, 2005, and (B) 2,032,922 shares of Common Stock were reserved for issuance
upon the exercise or conversion, as the case may be, of outstanding options, warrants or other convertible securities as of the date of this Agreement. All issued and outstanding shares of Common Stock have been duly authorized and validly issued,
are fully paid and nonassessable have been issued and sold in compliance with the registration requirements of federal and state securities laws or the applicable statutes of limitation have expired, and were not issued in violation of any
preemptive rights or similar rights to subscribe for or purchase securities. The Company owns all of the outstanding capital stock of each subsidiary, free and clear of all liens, claims and encumbrances. Except as set forth herein or the Company
SEC Documents, there are no (i) outstanding rights (including, without limitation, preemptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any unissued shares of capital stock or other equity
interest in the Company, or any contract, commitment, agreement, understanding or arrangement of any kind to which the Company or any subsidiary is a party and relating to the issuance or sale of any capital stock or convertible or exchangeable
security of the Company or any subsidiary, other than options for the purchase of 183,096 shares of Common Stock granted to directors and employees of the Company pursuant to its 1997 Stock Option Plan and non-qualified stock option plan and to
former holders of options to purchase common stock of a former majority-owned subsidiary of the Company (“USPoly”), which were issued as partial consideration to USPoly minority shareholders in the October 2, 2005 merger in which
USPoly became a wholly-owned subsidiary of the Company; or (ii) obligations of the Company to purchase redeem or otherwise acquire any of its outstanding capital stock or any interest therein or to pay any dividend or make any other
distribution in respect thereof. Except as disclosed in the Company SEC Documents, there are no anti-dilution or price adjustment provisions, co-sale rights, registration rights, rights of first refusal or other similar rights contained in the terms
governing any outstanding security of the Company that will be triggered by the issuance of the Securities or the Warrant Shares. 
  
 2.7 Subsidiaries. Except as set forth in the Company SEC Documents, the Company does not presently own or control, directly or indirectly, and has
no stock or other interest as owner or principal in, any other corporation or partnership, joint venture, association or other business venture or entity (each a “subsidiary”). Each subsidiary is duly incorporated or organized, validly
existing and in good standing under the laws of its jurisdiction of incorporation or organization and has all requisite power and authority to carry on its business as now conducted. Each subsidiary is duly qualified to transact business and is in
good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its business or properties. All of the outstanding capital stock or other voting securities of each subsidiary is owned by the Company,
directly or indirectly, free and clear of any liens, claims, or encumbrances. 







 2.8 Valid Issuance of Securities. The Securities and the Warrant Shares are duly authorized and,
when issued, sold and delivered in accordance with the terms hereof or the Warrants, as the case may be, will be duly and validly authorized and issued, fully paid and nonassessable, free from all taxes, liens, claims, encumbrances and charges with
respect to the issue thereof; provided, however, that the Securities and the Warrant Shares may be subject to restrictions on transfer under state and/or federal securities laws or as otherwise set forth herein. The issuance, sale and delivery of
the Securities and the Warrant Shares in accordance with the terms hereof or the Warrant, as the case may be, will not be subject to preemptive rights of shareholders of the Company. The Warrant Shares have been duly reserved for issuance upon
exercise of the Warrant. 
  
 2.9 Offering. Assuming the
accuracy of the representations of the Purchasers in Section 3.3 of this Agreement on the date hereof, on the Closing Date and solely as this Section 2.9 relates to the issue and sale of the Warrant Shares on the date(s) of exercise of the
Warrant, the offer, issue and sale of the Securities and issuance of the Warrant Shares upon exercise of the Warrant (assuming no change in applicable law prior to the date the Warrant Shares are issued), are and will be exempt from the registration
and prospectus delivery requirements of the Securities Act of 1933 (the “Securities Act”) and have been or will be registered or qualified (or are or will be exempt from registration and qualification) under the registration, permit or
qualification requirements of all applicable state securities laws. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales of any security or solicited any
offers to buy any security under circumstances that would require registration under the Securities Act of the issuance of the Securities to the Purchasers or the issuance of the Warrant Shares upon exercise of the Warrants. Other than the Company
SEC Documents, the Company has not distributed and will not distribute prior to the Closing Date any offering material in connection with the offering and sale of the Securities or Warrant Shares. The Company has not taken any action to sell, offer
for sale or solicit offers to buy any securities of the Company which would bring the offer, issuance or sale of the Securities or the issuance of the Warrant Shares upon exercise of the Warrants, within the provisions of Section 5 of the
Securities Act, unless such offer, issuance or sale was or shall be within the exemptions of Section 4 of the Securities Act. 
  
 2.10 Litigation. Except as set forth in the Company SEC Documents, there is no action, suit, proceeding nor investigation pending or, to the
Company’s knowledge, currently threatened against the Company or any of its subsidiaries that would be required to be disclosed in the Company’s Annual Report on Form 10-K under the requirements of Item 103 of Regulation S-K. The
foregoing includes, without limitation, any action, suit, proceeding or investigation, pending or threatened, that questions the validity of this Agreement or the right of the Company to enter into such Agreement and perform its obligations
hereunder. Neither the Company nor any subsidiary is subject to any injunction, judgment, decree or order of any court, regulatory body, arbitral panel, administrative agency or other government body. 
  
 2.11 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or filing with, any federal, state, local or provincial governmental authority on the part of the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for notices required or permitted to be filed with certain state and federal securities commissions, which notices will be filed on a timely basis. 







 2.12 No Brokers. Except for any fees payable to the Placement Agent, no broker, finder or
investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based on arrangements made by the Company. 
  
 2.13 Compliance. The Company is not in violation of its Articles of
Incorporation or Bylaws. Neither the Company nor the subsidiaries have been advised or have reason to believe, that it is not conducting its business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is
conducting business, including, without limitation, all applicable local, state and federal environmental laws and regulations; except where failure to be so in compliance would not have a Material Adverse Effect. Each of the Company and the
subsidiaries has all necessary franchises, licenses, certificates and other authorizations from any foreign, federal, state or local government or governmental agency, department or body that are currently necessary for the operation of the business
of the Company and they subsidiaries as currently conducted, except where the failure to currently possess such franchises, licenses, certificates and other authorizations would not reasonably be expected to have a Material Adverse Effect.

  
 2.14 No Material Changes. Except as disclosed in the
Company SEC Documents, since September 30, 2005, there has been no material adverse change in the assets, liabilities, business, properties, operations, financial condition or results of operations of the Company and its subsidiaries, taken as
a whole. Since September 30, 2005, the Company has not declared or paid any dividend or distribution or its capital stock. 
  
 2.15 Contracts. Except for matters which are not reasonably likely to have a Material Adverse Effect and those contracts that are substantially or
fully performed or expired by their terms, the contracts listed as exhibits to or described in the Company SEC Documents that are material to the Company or any of its subsidiaries and all amendments thereto, are in full force and effect on the date
hereof, and neither the Company nor, to the Company’ knowledge, any other party to such contracts is in breach of or default under any of such contracts. 
  

2.16 Intellectual Property. 
  
 (i) The Company has ownership or license or legal right to use all patent, copyright, trade secret, know-how trademark, trade name customer lists,
designs, manufacturing or other processes, computer software, systems, data compilation, research results or other proprietary rights used in the business of the Company (collectively “Intellectual Property”). All of such patents,
registered trademarks and registered copyrights have been duly registered in, filed in or issued by the United States Patent and Trademark Office, the United States Register of Copyrights or the corresponding offices of other jurisdictions and have
been maintained and renewed in accordance with all applicable provisions of law and administrative regulations in the United States and all such jurisdictions. 







 (ii) The Company believes it has taken all reasonable steps required in accordance with sound
business practice and business judgment to establish and preserve its and its subsidiaries ownership of all material Intellectual Property with respect to their products and technology. 
  
 (iii) To the knowledge of the Company, the present business, activities and products of the Company and its
subsidiaries do not infringe any intellectual property of any other person, except where such infringement would not have a Material Adverse Effect. No proceeding charging the Company with infringement of any adversely held Intellectual Property has
been filed. 
  
 (iv) No proceedings have been instituted or
pending or, to the knowledge of the Company, threatened, which challenge the rights of the Company to the use of the Intellectual Property. The Company has the right to use, free and clear of material claims or rights of other persons, all of its
customer lists, designs, computer software, systems, data compilations, and other information that are required for its products or its business as presently conducted. Neither the Company nor any subsidiary is making unauthorized use of any
confidential information or trade secrets of any person. The activities of any of the employees on behalf of the Company or of any subsidiary do not violate any agreements or arrangements between such employees and third parties are related to
confidential information or trade secrets of third parties or that restrict any such employee’s engagement in business activity of any nature. 
  
 (v) All licenses or other agreements under which (i) the Company or any subsidiary employs rights in Intellectual Property, or (ii) the
Company or any subsidiary has granted rights to others in Intellectual Property owned or licensed by the Company or any subsidiary are in full force and effect, and there is no default (and there exists no condition which, with the passage of time
or otherwise, would constitute a default by the Company or such subsidiary) by the Company or any subsidiary with respect thereto. 
  
 2.17 Exchange Compliance. The Company’s common stock is registered pursuant to Section 12(g) of the Securities Exchange Act of 1934 (the
“Exchange Act”) and is listed on the Nasdaq National Market, and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the common stock under the Exchange Act or delisting the common
stock (including the Common Shares and Warrant Shares) from the Nasdaq National Market. The Company is in compliance with all of the presently applicable requirements for continued listing of the Common Stock on the Nasdaq National Market. The
issuance of the Securities and the Warrant Shares does not require shareholder approval including, without limitation, pursuant to the Nasdaq Marketplace Rules or any other rule of the Nasdaq Stock Market. 
  
 2.18 No Manipulation; Disclosure of Information. The Company has not
taken and will not take any action designed to or that might reasonably be expected to cause or result in an unlawful manipulation of the price of the Common Stock to facilitate the sale or resale of the Securities. The Company confirms that, to its
knowledge, with the exception of the proposed sale of Securities as contemplated herein (as to which the Company makes not representation), 







 neither it nor any other person acting on its behalf has provided any of the Purchasers or their agents or counsel with
any information that constitutes or might constitute material, non-public information. The Company understands and confirms that the Purchasers shall be relying on the foregoing representations in effecting transactions in securities of the Company.
All disclosures provided to the Purchasers regarding the Company, its business and the transactions contemplated hereby, including the exhibits to this Agreement, furnished by the Company are true and correct and do not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. 
  
 2.19 Accountants. PricewaterhouseCoopers LLP, who expressed their opinion with respect to the consolidated financial
statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, to be incorporated by reference into the Registration Statement (as hereinafter defined) and the prospectus which forms a part thereof
(the “Prospectus”), have advised the Company that they are, and to the knowledge of the Company they are, independent accountants as required by the Securities Act and the rules and regulations promulgated thereunder. The Company covenants
to file its Form 10-K containing audited consolidated financial statements for the year ended December 31, 2005 within the time period required by applicable securities laws and further represents and warrants that it has no reason to believe
that the auditors will not be able to express an unqualified opinion with respect to such financial statements, assuming the Closing occurs as contemplated herein. 
  
 2.20 Taxes. The Company has filed all necessary federal, state and foreign income and franchise tax returns and has
paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which has been or might be asserted or threatened against it. 
  
 2.21 Insurance. The Company maintains and will continue to maintain insurance of the types and in the amounts that
the Company reasonably believes is adequate for its business, including, but not limited to, insurance covering all real and personal property owned or leased by the Company against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against by similarly situated companies, all of which insurance is in full force and effect. 
  
 2.22 Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other than income taxes) that are required to be paid in connection
with the sale and transfer of the Securities hereunder will be, or will have been, fully paid or provided for by the Company and the Company will have complied with all laws imposing such taxes. 
  
 2.23 Investment Company. The Company (including its subsidiaries) is
not an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for an investment company, within the meaning of the Investment Company Act of 1940 and will not be deemed an
“investment company” as a result of the transactions contemplated by this Agreement. 







 2.24 Related Party Transactions. To the knowledge of the Company, no transaction has occurred
between or among the Company or any of its affiliates (including, without limitation, any of its subsidiaries), officers or directors or any affiliate or affiliates of any such affiliate officer or director that with the passage of time will be
required to be disclosed pursuant to Section 13, 14 or 15(d) of the Exchange Act other than those transactions that have already been so disclosed. 
  
 2.25 Books and Records. The books, records and accounts of the Company and its subsidiaries accurately and fairly reflect, in reasonable detail,
the transactions in, and dispositions of, the assets of, and the operations of, the Company and its subsidiaries. 
  
 2.26 Disclosure Controls. 
  
 (a) The Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15 under the Exchange Act, which
(i) are designed to ensure that material information relating to the Company is made known to their Company’s principal executive officer and its principal financial officer by others within those entities particularly during the periods
in which the periodic reports required under the Exchange Act are being prepared; and (ii) provide for the periodic evaluation of the effectiveness of such disclosure controls and procedures as of the end of the period covered by the
Company’s most recent annual or quarterly report filed with the SEC. 
  
 (b) The Company is not aware of (i) any significant deficiency in the design or operation of internal controls which could adversely affect the Company’s or any of its subsidiary’s ability to record,
process, summarize and report financial data or any material weaknesses in internal controls; or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s or any of
its/subsidiary’s internal controls. 
  
 (c) Since the date of
the most recent evaluation of such disclosure controls and procedures, there have been no changes that have materially affected, or are reasonably likely to materially affect, the Company’s or any of its subsidiary’s internal control over
financial reporting, including any corrective actions with regard to significant deficiencies and material weaknesses. 
  
 (d) Except as described in the SEC Reports, there are no material off-balance sheet arrangements (as defined in Item 303 of Regulation S-K), or any
other relationships with unconsolidated entities (in which the Company or its control persons have an equity interest) that may have a material current or future effect on the Company’s or any of its/subsidiary’s financial condition,
revenues or expenses, changes in financial condition, results of operations, liquidity, capital expenditures or capital resources. 
  
 (e) To the knowledge of the Company, neither the Board of Directors nor the audit committee has been informed, nor is any director of the Company aware,
of (1) any significant deficiencies in the design or operation of the Company’s internal controls which could adversely affect the Company’s or any subsidiary’s ability to) record, process, summarize 







 and report financial data or any material weakness in the Company’s or any subsidiary’s internal controls; or
(2) any fraud, whether or not material, that involves management or other employees of the Company or any of its subsidiaries who have a significant role in the Company’s or any subsidiary’s internal controls. 
  
 3. Representations and Warranties of the Purchasers. 
  
 The Purchasers severally, and not jointly, hereby represent and warrant to
the Company: 
  
 3.1 Legal Power. Each Purchaser has the
requisite authority to enter into this Agreement and to carry out and perform its obligations under the terms of this Agreement. All action on each Purchaser’s part required for the lawful execution and delivery of this Agreement have been or
will be effectively taken prior to the Closing. 
  
 3.2 Due
Execution. This Agreement has been duly authorized, executed and delivered by the Purchaser, and, upon due execution and delivery by the Company, this Agreement will be a valid and binding agreement of the Purchaser, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or by equitable principles. 
  
 3.3 Investment Representations. In connection with the sale and issuance of the Securities and Warrant Shares, each Purchaser makes the following
representations: 
  
 (a) Investment for Own Account. The
Purchaser is acquiring the Securities and the Warrant Shares for its own account, not as nominee or agent, for investment and not with a view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the
Securities Act; provided, however, that by making the representations herein, the Purchaser does not agree to hold any of the Securities for any minimum or specific term and reserves the right to dispose of the securities at any time in accordance
with or pursuant to a registration statement or an exemption from the registration requirements of the Securities Act of 1933, as amended (the Securities Act). 
  

(b) Transfer Restrictions; Legends. Such Purchaser understands that (i) the Securities and Warrant Shares have not been registered under
the Securities Act; (ii) the Securities and Warrant Shares are being offered and sold pursuant to an exemption from registration, based in part upon the Company’s reliance upon the statements and representations made by the Purchasers in
this Agreement, and that the Securities and Warrant Shares must be held by such Purchaser indefinitely, and that Purchaser must, therefore, bear the economic risk of such investment indefinitely, unless a subsequent disposition thereof is registered
under the Securities Act or is exempt from such registration; (iii) each Certificate representing the Securities and Warrant Shares will be endorsed with the following legend: 
  
 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATES. THESE SECURITIES 







 ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. UNLESS SOLD PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 
  
 (iv) the Company will instruct any transfer agent not to register the transfer of the Securities or Warrant Shares (or any portion thereof)
unless the conditions specified in the foregoing legends are satisfied or, if the opinion of counsel referred to above is to the further effect that such legend is not required in order to establish compliance with any provisions of the Securities
Act or this Agreement, or other satisfactory assurances of such nature are given to the Company. 
  
 (c) Financial Sophistication; Due Diligence. The Purchaser has such knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in connection with the transactions contemplated in this Agreement. Such Purchaser has, in connection with its decision to purchase the Securities, relied only upon the representations and warranties
contained herein and the information contained in the Company SEC Documents. Further, the Purchaser has had such opportunity to obtain additional information and to ask questions of, and receive answers from, the Company, concerning the terms and
conditions of the investment and the business and affairs of the Company, as the Purchaser considers necessary in order to form an investment decision. 
  
 (e) Accredited Investor Status. The Purchaser is an “accredited investor” as such term is defined in Rule 501(a) of the rules and
regulations promulgated under the Securities Act. 
  
 (f)
Residency. The Purchaser is organized under the laws of the State set forth opposite such Purchaser’s name on the attached Exhibit A, and its principal place of operations is in the State set forth opposite such Purchaser’s name on the
attached Exhibit A. 
  
 (g) General Solicitation. The
Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over the television or radio or presented
at any seminar or any other general solicitation or general advertisement. Prior to the time that the Purchaser was first contacted by the Company or the Placement Agent such Purchaser had a pre-existing and substantial relationship with the Company
or the Placement Agent. 
  
 3.4 No Investment, Tax or Legal
Advice. Each Purchaser understands that nothing in the Company SEC Documents, this Agreement, or any other materials presented to the Purchaser in connection with the purchase and sale of the Securities constitutes legal, tax or 







 investment advice. Each Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of Securities. 
  
 3.5 Additional Acknowledgement. Each Purchaser acknowledges that it has independently evaluated the merits of the transactions contemplated by this Agreement, that it has independently determined to enter into
the transactions contemplated hereby, that it is not relying on any advice from or evaluation by any other person. Each Purchaser acknowledges that the Placement Agent has acted solely as placement agent for the Company in connection with the
Offering of the Securities by the Company, that the information and data provided to the Purchaser in connection with the transaction contemplated hereby has not been subjected to independent verification by the Placement Agent, and that the
Placement Agent has made no representation or warrant whatsoever with respect to the accuracy or completeness of such information, data or other related disclosure material. Each Purchaser acknowledges that it has not taken any actions that would
deem the Investors to be members of a “group” for purposes of Section 13(d) of the Exchange Act. 
  
 3.6 Limited Ownership. The purchase of the Securities issuable to each Purchaser at the Closing will not result in such Purchaser (individually or
together with any other person or entity with whom such Purchaser has identified, or will have identified, itself as part of a “group” in a public filing made with the SEC involving the Company’s securities) acquiring, or obtaining
the right to acquire, in excess of 19.999% of the outstanding shares of Common Stock or voting power of the Company on a post-transaction basis that assumes that the Closing shall have occurred. Such Purchaser does not presently intend to, along or
together with others, make a public filing with the SEC to disclose that it has (or that it together with such other persons or entities have) acquired, or obtained the right to acquire, as a result of the Closing (when added to any other securities
of the Company that it or they then own or have the right to acquire), in excess of 19.999% of the outstanding shares of Common Stock or the voting power of the Company on a post-transaction basis that assumes that the Closing shall have occurred.

  
 4. Conditions to Closing. 
  
 4.1 Conditions to Obligations of Purchasers at Closing. The
Purchasers’ obligation to purchase the Securities at the Closing is subject to the fulfillment to the Purchasers’ reasonable satisfaction, on or prior to the Closing, of all of the following conditions, any of which may be waived by such
Purchaser: 
  
 (a) Representations and Warranties True;
Performance of Obligations. The representations and warranties made by the Company in Section 2 hereof shall be true and correct in all respects on the Closing Date with the same force and effect as if they had been made on and as of said
date and the Company shall have performed and complied with all obligations and conditions herein required to be performed or complied with by it on or prior to the Closing and a certificate duly executed by an officer of the Company, to the effect
of the foregoing, shall be delivered to the Purchasers. 







 (b) Proceedings and Documents. All corporate and other proceedings in connection with the
transactions contemplated at the Closing and all documents and instruments incident to such transactions shall be reasonably satisfactory in substance and form to counsel to the Purchasers, and counsel to the Purchasers shall have received all such
counterpart originals or certified or other copies of such documents as they may reasonably request. The Company shall have delivered (or caused to have been delivered) to each Purchasers, the certificates required by this Agreement. The Warrant
Shares shall have been duly authorized and reserved for issuance upon exercise of the Warrant. 
  
 (c) Qualifications, Legal Investment. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection
with the lawful sale and issuance of the Securities and Warrant Shares shall have been duly obtained and shall be effective on and as of the Closing. No stop order or other order enjoining the sale of the Securities or Warrant Shares shall have been
issued and no proceedings for such purpose shall be pending or, to the knowledge of the Company, threatened by the SEC, or any commissioner of corporations or similar officer of any state having jurisdiction over this transaction. At the time of the
Closing, the sale and issuance of the Securities and Warrant Shares shall be legally permitted by all laws and regulations to which Purchasers and the Company are subject. No litigation, statute, rule, regulation, executive order, decree, ruling or
injunction will have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the
consummation of any of the transactions contemplated by this Agreement. 
  
 (d) Execution of Agreements. The Company shall have executed this Agreement and have delivered this Agreement to the Purchasers. 
  
 (e) Secretary’s Certificate. The Company shall have delivered to the Purchasers a certificate of the Secretary of the Company certifying as to
the truth and accuracy of the resolutions of the Board of Directors relating to the transaction contemplated hereby (a copy of which shall be included with such certificate). 
  
 (f) Trading and Listing. Trading and listing of the Company’s common stock on the Nasdaq National Market shall
not have been suspended by the SEC or the Nasdaq Stock Market. 
  
 (g) Nasdaq Listing. The Company will comply with all of the requirements of the National Association of Securities Dealers with respect to the issuance of the Securities and the Warrant Shares and will list the Common Shares and the
Warrant Shares on the Nasdaq National Market no later than the earlier of (a) the effective date of the Registration Statement (as hereinafter defined) or (b) 120 days following the Closing Date. 
  
 (h) Blue Sky. The Company shall have obtained all necessary “blue
sky” law permits and qualifications, or have the availability of exemptions therefrom, required by any state for the offer and sale of the Securities and issuance of the Warrant Shares upon exercise of the Warrant. 







 (i) Material Adverse Change. Since the date of this Agreement, there shall not have occurred any
event which results in a Material Adverse Effect. 
  
 (j)
Opinion. The Company shall have delivered to Purchasers the opinion of Fredrikson & Byron, P.A., counsel to the Company, dated as of the Closing Date in substantially the form attached hereto as Exhibit C. 
  
 4.2 Conditions to Obligations of the Company. The Company’s
obligation to issue and sell the Securities at the Closing is subject to the fulfillment to the Company’s reasonable satisfaction, on or prior to the Closing of the following conditions, any of which may be waived by the Company: 
  
 (a) Representations and Warranties True. The representations and
warranties made by the Purchasers in Section 3 hereof shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made on and as of said date. 
  
 (b) Performance of Obligations. The Purchasers shall have performed
and complied with all agreements and conditions herein required to be performed or complied with by them on or before the Closing. The Purchasers shall have delivered the Purchase Price, by wire transfer, to the account designated by the Company for
such purpose. 
  
 (c) Qualifications, Legal Investment. All
authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful sale and issuance of the Securities and Warrant Shares shall have
been duly obtained and shall be effective on and as of the Closing. No stop order or other order enjoining the sale of the Securities or Warrant Shares shall have been issued and no proceedings for such purpose shall be pending or, to the knowledge
of the Company, threatened by the SEC, or any commissioner of corporations or similar officer of any state having jurisdiction over this transaction. At the time of the Closing, the sale and issuance of the Securities and the Warrant Shares shall be
legally permitted by all laws and regulations to which the Purchasers and the Company are subject. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction will have been enacted, entered, promulgated or endorsed by or
in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

  
 (d) Execution of Agreements. The Purchasers shall have
executed this Agreement and delivered this Agreement to the Company. 
  
 5.
Additional Covenants. 
  
 5.1 Reporting Status. With a
view to making available to the Purchasers the benefits of certain rules and regulations of the SEC which may permit the sale of the Common Shares and Warrant Shares to the public without registration, the Company agrees to use its 







 reasonable efforts to file with the SEC, in a timely manner all reports and other documents required of the Company under
the Exchange Act. The Company will otherwise take such further action as a Purchaser may reasonably request, all to the extent required from time to time to enable such Purchaser to sell the Common Shares and Warrant Shares without registration
under the Securities Act or any successor rule or regulation adopted by the SEC. 
  
 5.2 Listing. So long as a Purchaser owns any of the Securities or Warrant Shares, the Company will use its reasonable efforts to maintain the automated quotation of its Common Stock, including the Common Shares
and Warrant Shares, on the Nasdaq National Market or an alternative listing on the American Stock Exchange or the New York Stock Exchange and will comply in all material respects with the Company’s reporting, filing and other obligations under
the bylaws or rules of the National Association of Securities Dealers and such exchanges, if applicable. 
  
 5.3 Adjustments in Share Numbers and Prices. 
  
 (a) In the event of any stock split, subdivision, dividend or distribution payable in shares of Common Stock (or other securities or rights
convertible into, or entitling the holder thereof to receive directly or indirectly shares of Common Stock), combination or other similar recapitalization or event occurring after the date hereof, each reference in this Agreement or the Warrants to
a number of shares or price per share shall be amended appropriately to account for such event. 
  
 (b) As to each Purchaser, from the Closing Date until the 12 month anniversary of the Closing Date, if the Company or any subsidiary thereof shall
issue or agree to issue any (i) Common Stock or (ii) any securities of the Company or the subsidiary that would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt, preferred stock,
rights, options, warrants or other instrument that is at any time directly or indirectly convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock (“Common Stock Equivalents” and collectively
“Additional Shares”), entitling any person or entity to acquire shares of Common Stock at an effective price per share less than $18.75, within three trading days of the date thereof the Company shall issue to such Purchaser that number of
additional shares of Common Stock (the “Anti-Dilution Shares”) equal to (a) the aggregate Purchase Price paid by such Purchaser at the Closing divided by the New Adjusted Purchase Price, less (b) the Common Shares previously
issued to such Purchaser pursuant to this Agreement. For purposes of this Agreement, New Adjusted Purchase Price = Adjusted Purchase Price x (A + B) ÷ (A + C). For purposes of the foregoing formula, the following definitions shall apply:
(I) Adjusted Purchase Price shall mean the Adjusted Purchase Price in effect immediately prior to such issue of Additional Shares; (II) New Adjusted Purchase Price means the Adjusted Purchase Price in effect immediately after such issue of
Additional Shares; (III) “A” means the number of shares of Common Stock outstanding and deemed outstanding immediately prior to such issue of Additional Shares (treating for this purpose as outstanding all shares of Common Stock issuable
upon exercise of options and convertible securities as outstanding immediately prior to such issue; (IV) “B” means the number of shares of Common Stock that would have been issued if such Additional Shares had been issued at a price per
share equal to the Discounted Purchase Price (as defined below) (determined by dividing the aggregate consideration received by the Company in respect of such issue by the Discounted Purchase Price); and (V) “C” means the number of
such Additional Shares issued in such transaction. 







 The term “Discounted Purchase Price” shall mean the amount actually paid by third parties for a
share of Common Stock. The sale of Common Stock Equivalents shall be deemed to have occurred at the time of the issuance of the Common Stock Equivalents and the Discounted Purchase Price covered thereby shall also include the actual exercise or
conversion price thereof at the time of the issuance, with further adjustments for changes at conversion or exercise (in addition to the consideration per share of Common Stock underlying the Common Stock Equivalents received by the Company upon
such sale or issuance of the Common Stock Equivalents). If shares are issued for a consideration other than cash, the per share selling price shall be the fair value of such consideration as determined in good faith by the board of directors of the
Company. The Company may not refuse to issue a Purchaser additional shares of Common Stock hereunder based on any claim that such Purchaser or any one associated or affiliated with such Purchaser has been engaged in any violation of law, agreement
or for any other reason, unless, an injunction from a court, on notice, restraining and or enjoining an issuance hereunder shall have been sought and obtained and the Company posts a surety bond for the benefit of such Purchaser in the amount of
150% of the market value of such Shares (based on the closing price of the Common Stock on the Nasdaq Stock Market, or such other exchange on which the Common Stock is listed or traded if it is not listed for trading on the Nasdaq Stock Market, on
the date of the event giving rise to the Company’s obligation hereunder), which is subject to the injunction, which bond shall remain in effect until the completion of litigation of the dispute and the proceeds of which shall be payable to the
Purchaser to the extent it obtains judgment. Nothing herein shall limit a Purchaser’s right to pursue actual damages for the Company’s failure to deliver shares hereunder and such Purchaser shall have the right to pursue all remedies
available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. On the date of closing of any transaction pursuant to which securities are issued for a Discounted Purchase Price, the
Company shall give the Purchasers written notice thereof. Notwithstanding anything to the contrary herein, this section shall not apply to an Exempt Issuance. “Exempt Issuance” means the issuance of (a) shares of Common Stock or
options to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of
non-employee directors established for such purpose, (b) securities upon the exercise of or conversion of any convertible securities, options or warrants issued and outstanding on the date of this Agreement, provided that such securities have
not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise or conversion price of any such securities, (c) securities issued pursuant to acquisitions or strategic transactions,
provided any such issuance shall only be to a person which is, itself or through its subsidiaries, an operating company in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the
Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, and (d) securities upon the exercise or conversion of convertible securities, options or warrants
issued to a licensed institution or bank lender in connection with debt financing. “Trading day” means a day on which the Common Stock is traded on a securities market, automated quotation system or stock exchange. 







 In the event of any adjustment under this Section 5.3, the Company shall promptly amend the
Registration Statement or file a new Registration Statement pursuant to the provisions of Section 6 to register the Anti-Dilution Shares. In no event shall the Company issue Anti-Dilution Shares to a Purchaser under Section 5.3 if such
issuance shall result in the Purchaser acquiring, or obtaining the right to acquire, in excess of 19.999% of the outstanding shares of Common Stock or voting power of the Company on a post-transaction basis that assumes that the closing of the
Additional Shares shall have occurred. 
  
 5.4 Confidential
Information. Each Purchaser covenants that it will maintain in confidence the receipt and content of any Suspension Notice (as defined herein) under Section 6.2 until such information (a) becomes generally publicly available other than
through a violation of this provision by the Purchaser or its agents or (b) is required to be disclosed in legal proceedings (such as by deposition, interrogatory, request for documents, subpoena, civil investigation demand, filing with any
governmental authority or similar process); provided, however, that before making any disclosure in reliance on this Section 5.4(b), the Purchaser will give the Company at least 15 days prior written notice (or such shorter period as required
by law) specifying the circumstances giving rise thereto and the Purchaser will furnish only that portion of the non-public information which is legally required and will exercise its best efforts to ensure that confidential treatment will be
accorded any non-public information so furnished. 
  
 6. Registration Rights.

  
 6.1 Registration Procedures and Expenses.

  
 (a) The Company shall prepare and file with the
SEC, as promptly as reasonably practicable following Closing, but in no event later than 30 days following Closing, a registration statement on Form S-3 (or any successor to Form S-3), covering the resale of the Registrable Securities (as defined
below) (the “S-3 Registration Statement”) and as soon as reasonably practicable thereafter but in no event later than 90 days following the filing of the S-3 Registration Statement (120 days in the event of a full review of the S-3
Registration Statement by the SEC), to effect such registration and any related qualification or compliance with respect to all Registrable Securities held by the Purchasers. For purposes of this Agreement, the term “Registrable
Securities” shall mean (i) the Warrant; (ii) the Common Shares and Warrant Shares; and (iii) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, any Common Shares or Warrant Shares. In the event that Form S-3 (or any successor form) is or becomes unavailable to register the resale of the
Registrable Securities at any time prior to the expiration of the Purchaser’s Registration Rights pursuant to Section 6.6, the Company shall to prepare and file with the SEC, as promptly as reasonably practicable following the Closing but
in no event later than 30 days following Closing, a registration statement on Form S-1 (or any successor to Form S-1), covering the resale of the Registrable Securities (the “S-1 Registration Statement” and collectively the S-3
Registration Statement, the “Registration Statement”) and as soon as reasonably practicable thereafter but in no event later than 90 days following the filing of the S-1 Registration Statement (120 days in the event of a full review of the
S-1 Registration Statement by the SEC), to effect such registration and any related qualification or compliance with respect 







 to all Registrable Securities held by such Purchaser. If the Registration Statement has not been declared effective by
the SEC on or before the date that is 90 days after the filing date of the Registration Statement, or 120 days after the filing of the Registration Statement in the event of a full review of the Registration Statement by the SEC (the “Required
Effective Date”), the Company shall, on the business day immediately following the Required Effective Date and each 30th day thereafter, make a payment to the Purchaser as compensation for such delay (together, the “Late Registration Payments”) equal to 1% of the Purchase Price paid for the Securities then owned by the Purchaser until the
Registration Statement is declared effective by the SEC. Late Registration Payments will be prorated on a daily basis during each 30 day period and will be paid to the Purchaser by wire transfer or check within five business days after the earlier
of (i) the end of each 30 day period following the Required Effective Date or (ii) the effective date of the Registration Statement. If the Company fails to pay any liquidated damages pursuant to this section in full within seven days
after the date payable, the Company will pay interest thereon at a rate of 12% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Purchasers, accruing daily from the date such liquidated damages are
due until such amounts, plus all such interest thereon, are paid in full. “Business day” means any day except Saturday, Sunday and any day that is a federal legal holiday in the United States. 
  
 (b) The Company shall use its best efforts to prepare and file with
the SEC such amendments and supplements to the Registration Statement and the Prospectus used in connection therewith as may be necessary or advisable to keep the Registration Statement current and effective for the Common Shares and Warrant Shares
(collectively, “Shares”) held by a Purchaser for a period ending on the earlier of (i) the second anniversary of the Closing Date, (ii) the date on which all of that Purchaser’s Shares may be sold pursuant to Rule 144 under
the Securities Act or any successor rule (“Rule 144”) without regard to the volume limitations of Rule 144 or (iii) such time as all Shares held by that Purchaser have been sold pursuant to a registration statement or Rule 144. At
such time the Company is no longer required to keep the Registration Statement current and effective for the Shares held by a Purchaser (the “Registration Statement Termination Date”), that Purchaser will no longer accrue any additional
liquidated damages payments pursuant to Sections 6.1(a) or 6.2(c); however, the Company shall still be obligated to make all payments under Sections 6.1(a) or 6.2(c) that were not made prior to the Registration Statement Termination Date for that
Purchaser. The Company shall notify each Purchaser promptly upon the Registration Statement and each post-effective amendment thereto, being declared effective by the SEC; 
  
 (c) furnish to the Purchaser with respect to the Shares registered under the Registration Statement such number of
copies of the Registration Statement and the Prospectus (including supplemental prospectuses) filed with the SEC in conformance with the requirements of the Securities Act and other such documents as the Purchaser may reasonably request, in order to
facilitate the public sale or other disposition of all or any of the Shares by the Purchaser; 
  
 (d) make any necessary blue sky filings; 
  
 (e) pay the expenses incurred by the Company and the Purchasers in complying with Section 6 hereof, including, all registration and filing fees, NASD fees, 







 exchange listing fees, printing expenses, fees and disbursements of counsel for the Company, blue sky fees and expenses
and the expense of any special audits incident to or required by any such registration (but excluding attorneys’ fees of any Purchaser and any and all underwriting discounts and selling commissions applicable to the sale of Registrable
Securities by the Purchasers); 
  
 (f) advise the
Purchasers, promptly after it shall receive notice or obtain knowledge of the issuance of any stop order by the SEC delaying or suspending the effectiveness of the Registration Statement or of the initiation of any proceeding for that purpose; and
it will promptly use its commercially reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest possible moment if such stop order should be issued; and 
  
 (g) with a view to making available to the Purchaser the benefits of
Rule 144 and any other rule or regulation of the SEC that may at any time permit the Purchaser to sell Shares to the public without registration, the Company covenants and agrees to use its commercially reasonable best efforts to: (i) make and
keep public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) such date as all of the Shares qualify to be resold pursuant to Rule 144(k) or any other rule of similar effect or (B) such
date as all of the Shares shall have been resold; (ii) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and under the Exchange Act; and (iii) furnish to the Purchaser
upon request, as long as the Purchaser owns any Shares, (A) a written statement by the Company as to whether it has complied with the reporting requirements of the Securities Act and the Exchange Act, (B) a copy of the Company’s most
recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information as may be reasonably requested in order to avail the Purchaser of any rule or regulation of the SEC that permits the selling of any such Shares
without registration. 
  
 The Company understands that the
Purchasers disclaim being an underwriter, but acknowledges that a determination by the SEC that a Purchaser is deemed an underwriter shall not relieve the Company of any obligations it has hereunder. 
  
 6.2 Transfer of Shares After Registration; Suspension. 
  
 (a) Except in the event that paragraph (b) below applies, the
Company shall: (i) if deemed necessary or advisable by the Company, prepare and file from time to time with the SEC a post-effective amendment to the Registration Statement or a supplement to the related Prospectus or a supplement or amendment
to any document incorporated therein by reference or file any other required document so that such Registration Statement will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and so that, as thereafter delivered to purchasers of the Shares being sold thereunder, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) provide the Purchasers copies of any documents filed pursuant to Section 6.2(a)(i);
and (iii) upon request, inform each Purchaser who so requests that the 







 Company has complied with its obligations in Section 6.2(b)(i) (or that, if the Company has filed a post-effective
amendment to the Registration Statement which has not yet been declared effective, the Company will notify the Purchaser to that effect, will use its commercially reasonable best efforts to secure the effectiveness of such post-effective amendment
as promptly as possible and will promptly notify the Purchaser pursuant to Section 6.2(b)(i) hereof when the amendment has become effective). 
  
 (b) Subject to paragraph (c) below, in the event: (i) of any request by the SEC or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement for amendments or supplements to the Registration Statement or related Prospectus or for additional information; (ii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) of the receipt by the Company of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the Shares for sale in any jurisdiction or the initiation of any proceeding for such purpose; or (iv) of any event or circumstance which necessitates the making of any changes in the
Registration Statement or Prospectus, or any document incorporated or deemed to be incorporated therein by reference, so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; then the Company shall promptly deliver a certificate in writing to the Purchasers (the “Suspension
Notice”) to the effect of the foregoing and, upon receipt of such Suspension Notice, the Purchasers will refrain from selling any Shares pursuant to the Registration Statement (a “Suspension”) until the Purchasers are advised in
writing by the Company that the current Prospectus may be used, and have received copies from the Company of any additional or supplemental filings that are incorporated or deemed incorporated by reference in any such Prospectus. In the event of any
Suspension, the Company will use its reasonable best efforts to cause the use of the Prospectus so suspended to be resumed as soon as reasonably practicable after delivery of a Suspension Notice to the Purchasers. In addition to and without limiting
any other remedies (including, without limitation, at law or at equity) available to the Company and the Purchaser, the Company and the Purchasers shall be entitled to specific performance in the event that the other party fails to comply with the
provisions of this Section 6.2(b). 
  
 (c)
Notwithstanding the foregoing paragraphs of this Section 6.2, the Company shall use its commercially reasonable best efforts to ensure that (i) a Suspension shall not exceed 45 days individually, (ii) Suspensions covering no more
than 90 days, in the aggregate, shall occur during any twelve month period and (iii) each Suspension shall be separated by a period of at least 30 days from a prior Suspension (each Suspension that satisfies the foregoing criteria being
referred to herein as a “Qualifying Suspension”). In the event that there occurs a Suspension (or part thereof) that does not constitute a Qualifying Suspension, the Company shall pay to the Purchaser, on the 30th day following the first day of such Suspension (or the first day of such part), and on each 30th day thereafter, an amount equal to 1% of the Purchase Price paid for the Securities purchased by the Purchaser and not
previously sold by the 







 Purchaser such payments to be prorated on a daily basis during each 30 day period and will be paid to the Purchaser by
wire transfer or check within five business days after the end of each 30 day period following. 
  
 (d) If a Suspension is not then in effect, the Purchasers may sell Shares under the Registration Statement, provided that they comply with any
applicable prospectus delivery requirements. Upon receipt of a request therefore, the Company will provide an adequate number of current Prospectuses to a Purchaser and to any other parties reasonably requiring such Prospectuses. 
  
 (e) The Company agrees that it shall, immediately prior to the
Registration Statement being declared effective, deliver to its transfer agent an opinion letter of counsel, opining that at any time the Registration Statement is effective, the transfer agent may issue, in connection with the sale of the Shares,
certificates representing such Shares without restrictive legend, provided the Shares are to be sold pursuant to the prospectus contained in the Registration Statement. Upon receipt of such opinion, the Company shall cause the transfer agent to
confirm, for the benefit of the Purchasers, that no further opinion of counsel is required at the time of transfer in order to issue such Shares without restrictive legend. 
  
 The Company shall cause its transfer agent to issue a certificate without any restrictive legend to a purchaser of any
Shares from the Purchasers, if no Suspension is in effect at the time of sale, and (a) the sale of such Shares is registered under the Registration Statement (including registration pursuant to Rule 415 under the Securities Act); (b) the
holder has provided the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Shares may be made without registration under
the Securities Act; or (c) such Shares are sold in compliance with Rule 144 under the Securities Act. In addition, the Company shall remove the restrictive legend from any Shares held by the Purchasers following the expiration of the holding
period required by Rule 144(k) under the Securities Act (or any successor rule). 
  
 6.3 Indemnification. For the purpose of this Section 6.3: 
  
 (a) the term “Selling Shareholder” shall mean a Purchaser, its executive officers and directors and each person, if any, who controls
that Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act; 
  
 (b) the term “Registration Statement” shall include any final Prospectus, exhibit, supplement or amendment included in or relating to,
and any document incorporated by reference in, the Registration Statement (or deemed to be a part thereof) referred to in Section 6.1; and 
  
 (c) the term “untrue statement” shall mean any untrue statement or alleged untrue statement of a material fact, or any omission or
alleged omission to state in the Registration Statement a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 







 (d) The Company agrees to indemnify and hold harmless each Selling Shareholder from and against
any losses, claims, damages or liabilities to which such Selling Shareholder may become subject (under the Securities Act or otherwise) insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon (i) any untrue statement of a material fact contained in the Registration Statement, (ii) any inaccuracy in the representations and warranties of the Company contained in this Agreement or the failure of the Company
to perform its obligations hereunder or (iii) any failure by the Company to fulfill any undertaking included in the Registration Statement, and the Company will reimburse such Selling Shareholder for any reasonable legal expense or other actual
accountable out of pocket expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim; provided, however, that the Company shall not be liable in any such case to the extent that such loss,
claim, damage or liability arises out of, or is based upon, an untrue statement made in such Registration Statement in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Selling Shareholder
specifically for use in preparation of the Registration Statement or the failure of such Selling Shareholder to comply with its covenants and agreements contained herein or any statement or omission in any Prospectus that is corrected in any
subsequent Prospectus that was delivered to the Selling Shareholder prior to the pertinent sale or sales by the Selling Shareholder. 
  
 (e) Each Purchaser severally (as to itself), and not jointly, agrees to indemnify and hold harmless the Company (and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act, each officer of the Company who signs the Registration Statement and each director of the Company) from and against any losses, claims, damages or liabilities to which
the Company (or any such officer, director or controlling person) may become subject (under the Securities Act or otherwise), insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, (i) any failure by that Purchaser to comply with the covenants and agreements contained herein or (ii) any untrue statement of a material fact contained in the Registration Statement if, and only if, such untrue statement was
made in reliance upon and in conformity with written information furnished by or on behalf of that Purchaser specifically for use in preparation of the Registration Statement, and that Purchaser will reimburse the Company (or such officer, director
or controlling person, as the case may be), for any reasonable legal expense or other reasonable actual accountable out-of-pocket expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim.
The obligation to indemnify shall be limited to the net amount of the proceeds received by the Purchaser from the sale of the Shares pursuant to the Registration Statement. 
  
 (f) Promptly after receipt by any indemnified person of a notice of a claim or the beginning of any action in respect
of which indemnity is to be sought against an indemnifying person pursuant to this Section 6.3, such indemnified person shall notify the indemnifying person in writing of such claim or of the commencement of such action, but the omission to so
notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party under this Section 6.3 (except to the extent that such omission materially and adversely affects the indemnifying party’s
ability to defend such action) or from any liability otherwise than under this Section 6.3. Subject to the provisions hereinafter 







 stated, in case any such action shall be brought against an indemnified person, the indemnifying person shall be entitled
to participate therein, and, to the extent that it shall elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, shall be entitled to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified person. After notice from the indemnifying person to such indemnified person of its election to assume the defense thereof (unless it has failed to assume the defense thereof and appoint counsel
reasonably satisfactory to the indemnified party), such indemnifying person shall not be liable to such indemnified person for any legal expenses subsequently incurred by such indemnified person in connection with the defense thereof; provided,
however, that if there exists or shall exist a conflict of interest that would make it inappropriate, in the reasonable opinion of counsel to the indemnified person, for the same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be entitled to retain its own counsel (who shall not be the same as the opining counsel) at the expense of such indemnifying person; provided, however, that no indemnifying
person shall be responsible for the fees and expenses of more than one separate counsel (together with appropriate local counsel) for all indemnified parties. In no event shall any indemnifying person be liable in respect of any amounts paid in
settlement of any action unless the indemnifying person shall have approved the terms of such settlement; provided that such consent shall not be unreasonably withheld. No indemnifying person shall, without the prior written consent of the
indemnified person, effect any settlement of any pending or threatened proceeding in respect of which any indemnified person is or could reasonably have been a party and indemnification could have been sought hereunder by such indemnified person,
unless such settlement includes an unconditional release of such indemnified person from all liability on claims that are the subject matter of such proceeding. 
  

(g) If the indemnification provided for in this Section 6.3 is unavailable to or insufficient to hold harmless an indemnified party under
subsection (d) or (e) above in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and the liable Purchaser on the other in
connection with the statements or omissions or other matters which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, in the case of an untrue statement, whether the untrue statement relates to information supplied by the Company on the one hand or the liable Purchaser on the other and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such untrue statement. The Company and the Purchasers agree that it would not be just and equitable if contribution pursuant to this subsection (g) were determined
by pro rata allocation (even if the Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take into account the equitable considerations referred to above in this subsection (g). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (g) shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the 







 provisions of this subsection (g), no Purchasers shall be required to contribute any amount in excess of the amount by
which the net amount received by that Purchaser from the sale of the Shares to which such loss relates exceeds the amount of any damages which that Purchaser has otherwise been required to pay to the Company by reason of such untrue statement. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Purchasers’
obligations in this subsection to contribute are several in proportion to their sales of Shares to which such loss relates and not joint. 
  
 (h) The parties to this Agreement hereby acknowledge that they are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the provisions of this Section 6.3, and are fully informed regarding said provisions. They further acknowledge that the provisions of this Section 6.3 fairly
allocate the risks in light of the ability of the parties to investigate the Company and its business in order to assure that adequate disclosure is made in the Registration Statement as required by the Securities Act and the Exchange Act.

  
 (i) The obligations of the Company and of the
Purchasers under this Section 6.3 shall survive completion of any offering of Registrable Securities in such Registration Statement for a period of two years from the effective date of the Registration Statement. No indemnifying party, in the
defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. 
  
 6.4 Termination of Conditions and Obligations. The conditions precedent imposed by Section 3 or this Section 6 upon the transferability
of the Shares shall cease and terminate as to any particular number of the Shares when such Shares shall have been effectively registered under the Securities Act and sold or otherwise disposed of in accordance with the intended method of
disposition set forth in the Registration Statement covering such Shares or at such time as an opinion of counsel satisfactory to the Company shall have been rendered to the effect that such conditions are not necessary in order to comply with the
Securities Act. The Company shall request an opinion of counsel promptly upon receipt of a request therefor from Purchaser. 
  
 6.5 Information Available. So long as the Registration Statement is effective covering the resale of Shares owned by a Purchaser, the Company will
furnish (or, to the extent such information is available electronically through the Company’s filings with the SEC, the Company will make available via the SEC’s EDGAR system) to each Purchaser: 
  
 (a) as soon as practicable after it is available, one copy of
(i) its Annual Report to Shareholders (which Annual Report shall contain financial statements audited in accordance with generally accepted accounting principles by a national firm of certified public accountants) and (ii) if not included
in substance in the Annual Report to Shareholders, its Annual Report on Form 10-K (the foregoing, in each case, excluding exhibits); 







 (b) upon the request of the Purchaser, all exhibits excluded by the parenthetical to subparagraph
(a)(ii) of this Section 6.5 as filed with the SEC and all other information that is made available to shareholders; and 
  
 (c) upon the reasonable request of the Purchaser, an adequate number of copies of the Prospectuses to supply to any other party requiring such
Prospectuses; and the Company, upon the reasonable request of a Purchaser, will meet with each Purchaser or a representative thereof at the Company’s headquarters during the Company’s normal business hours to discuss all information
relevant for disclosure in the Registration Statement covering the Shares and will otherwise reasonably cooperate with the Purchasers conducting an investigation for the purpose of reducing or eliminating the Purchasers’ exposure to liability
under the Securities Act, including the reasonable production of information at the Company’s headquarters; provided, that the Company shall not be required to disclose any confidential information to or meet at its headquarters with a
Purchaser until and unless that Purchaser shall have entered into a confidentiality agreement in form and substance reasonably satisfactory to the Company with the Company with respect thereto. 
  
 6.6 Public Statements. The Company agrees to disclose on a Current
Report on Form 8-K the existence of the Offering and the material terms, thereof, including pricing, within one business day after it specifies the Closing Date in accordance with Section 1.3. Such Current Report on Form 8-K shall include a
form of this Agreement (and all exhibits and schedules thereto) as an exhibit thereto. The Company will not issue any public statement, press release or any other public disclosure listing a Purchaser as one of the purchasers of the Shares without
that Purchaser’s prior written consent, except as may be required by applicable law or rules of any exchange on which the Company’s securities are listed. 
  
 6.7 Limits on Additional Issuances. The Company will not, for a period of six months following the Closing Date offer
for sale or sell any securities unless, in the opinion of the Company’s counsel, such offer or sale does not jeopardize the availability of exemptions from the registration and qualification requirements under applicable securities laws with
respect to the Offering. Except for the issuance of stock options under the Company’s stock option plans, the issuance of common stock or upon exercise of outstanding options and warrants, the issuance of common stock purchase warrants, and the
offering contemplated hereby, the Company has not engaged in any offering of equity securities during the six months prior to the date of this Agreement. The foregoing provisions shall not prevent the Company from filing a “shelf”
registration statement pursuant to Rule 415 under the Securities Act, but the foregoing provisions shall apply to any sale of securities thereunder. 
  
 6.8 Form D and State Securities Filings. The Company will file with the SEC a Notice of Sale of Securities on Form D with respect to the
Securities, as required under Regulation D under the Securities Act, no later than 15 days after the Closing Date. The Company will promptly and timely file all documents and pay all filing fees required by any states’ securities laws in
connection with the sale of Securities. 
  
 6.9 Assignment of
Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to this Section 6 may be assigned by a Purchaser to a 







 party that acquires, other than pursuant to the Registration Statement or Rule 144, any of the Common Shares and Warrant
Shares originally issued or issuable to such Purchaser pursuant to this Agreement and the Warrants (or any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or
other distribution with respect to, or in exchange for or in replacement of, any such Common Shares or Warrant Shares), or (ii) to any affiliate of a Purchaser that acquires any Registrable Securities. Any such permitted assignee shall have all
the rights of such Purchaser under this Section 6 with respect to the Registrable Securities transferred. 
  
 6.10 Selling Shareholder Questionnaire. Each Purchaser agrees to furnish to the Company a completed questionnaire in the form attached to this
Agreement as Exhibit D (a “Selling Holder Questionnaire”). The Company shall not be required to include the Registrable Securities of a Purchaser in a Registration Statement and shall not be required to pay any liquidated or other damages
hereunder to any such Purchaser who fails to furnish to the Company a fully completed Selling Holder Questionnaire at least three business days prior to the filing of the Registration Statement. 
  
 7. Miscellaneous. 
  
 7.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of
Minnesota, without regard to the choice of law provisions thereof, and the federal laws of the United States. 
  
 7.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the parties hereto. 
  
 7.3 Entire Agreement. This Agreement and the exhibits hereto, and the other documents delivered pursuant hereto, constitute the full and entire understanding and agreement among the parties with regard to the
subjects hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants, or agreements except as specifically set forth herein or therein. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto and their respective successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided herein. 
  
 7.4 Severability. In the event any provision of this Agreement shall
be invalid, illegal, or unenforceable, it shall to the extent practicable, be modified so as to make it valid, legal and enforceable and to retain as nearly as practicable the intent of the parties, and the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby. 
  
 7.5 Amendment and Waiver. Except as otherwise provided herein, any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular
instance, either retroactively or prospectively, and either for a specified period of time or indefinitely), with the written consent of the Company and each 







 Purchaser. Any amendment or waiver effected in accordance with this Section 7.5 shall be binding upon any holder of
any Securities purchased under this Agreement (including securities into which such Securities have been converted), each future holder of all such securities, and the Company. 
  
 7.6 Fees and Expenses. Except as otherwise set forth herein, the Company and the Purchasers shall bear their own
expenses and legal fees incurred on their behalf with respect to this Agreement and the transactions contemplated hereby. Each party hereby agrees to indemnify and to hold harmless of and from any liability the other party for any commission or
compensation in the nature of a finder’s fee to any broker or other person or firm (and the costs and expenses of defending against such liability or asserted liability) for which such indemnifying party or any of its employees or
representatives are responsible. 
  
 7.7 Notices. All
notices, requests, consents and other communications hereunder shall be in writing, shall be delivered (A) if within the United States, by first-class registered or certified airmail, or nationally recognized overnight express courier, postage
prepaid, or by facsimile, or (B) if from outside the United States, by International Federal Express (or comparable service) or facsimile, and shall be deemed given (i) if delivered by first-class registered or certified mail domestic,
upon the business day received, (ii) if delivered by nationally recognized overnight carrier, one business day after timely delivery to such carrier, (iii) if delivered by International Federal Express (or comparable service), two business
days after so mailed, (iv) if delivered by facsimile, upon electric confirmation of receipt and shall be addressed as follows, or to such other address or addresses as may have been furnished in writing by a party to another party pursuant to
this paragraph: 
  
 if to the Company, to: 
  
 PW Eagle, Inc. 
 1550 Valley River Drive 
 Eugene, OR 97440 
 Attention: Scott Long, 
 Chief Financial Officer 
 Telephone: (541) 349-8369 
 Facsimile: (541) 686-9248 
  
 with a copy to: 
  
 Fredrikson & Byron, P.A. 
 200 South Sixth Street, Suite 4000 
 Minneapolis, MN 55401 
 Attn: Melodie Rose, Esq. 
 Telephone: (612) 492-7162 
 Facsimile: (612) 492-7077 
  
 if to the Purchaser, at its address on the signature page to this Agreement. 







 7.8 Survival of Representations, Warranties and Agreements. Notwithstanding any investigation made
by any party to this Agreement or by the Placement Agent, all covenants, agreements, representations and warranties made by the Company and the Purchaser herein shall survive the execution of this Agreement, the delivery to the Purchaser of the
Securities being purchased and the payment therefor, and a party’s reliance on such representations and warranties shall not be affected by any investigation made by such party or any information developed thereby. 
  
 7.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. 
  
 [The Remainder of this Page is Blank] 







 IN WITNESS WHEREOF, the foregoing
Common Stock and Warrant Purchase Agreement is hereby executed as of the date first above written. 
  

			
	PW EAGLE, INC.
		
	 By:
	 	  


	 Name:
	 	  


	 Title:
	 	  


	
	 PURCHASER

	
	  

 By:

	 Its:










 EXHIBIT A 
  

SCHEDULE OF PURCHASERS 
  

											
	 Purchaser

	  	 Common
 Shares

	  	 Aggregate
 Purchase
 Price

	  	 Warrant
 Shares

	  	 State of
 Organization

	  	 State of
 Principal
 Place of
 Operations










 EXHIBIT B 
  

FORM OF WARRANT 







 NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. 
  
 PW EAGLE, INC. 
  
 WARRANT 
  

					
	 Warrant No.         
	  	 	  	Original Issue Date:
	 	  	 	  	December 5, 2005

  
 PW Eagle, Inc.,
a Minnesota corporation (the “Company”), hereby certifies that, for value received,                      or its
registered assigns (the “Holder”), is entitled to purchase from the Company up to a total of
                     shares of Common Stock (each such share, a “Warrant Share” and all such shares, the
“Warrant Shares”), at any time and from time to time from and after the Original Issue Date and through and including [    ], 2010 (the “Expiration Date”), and subject to the
following terms and conditions: 
  
 1. Definitions. As
used in this Warrant, the following terms shall have the respective definitions set forth in this Section 1. Capitalized terms that are used and not defined in this Warrant that are defined in the Purchase Agreement (as defined below) shall
have the respective definitions set forth in the Purchase Agreement. 
  
 “Closing Price” means, for any date of determination, the price determined by the first of the following clauses that applies: (i) if the Common Stock is then listed or quoted on a Trading Market, the closing bid price per
share of the Common Stock for such date (or the nearest preceding date) on such market; (ii) if prices for the Common Stock are then quoted on the OTC Bulletin Board, the closing bid price per share of the Common Stock for such date (or the
nearest preceding date) so quoted; (iii) if prices for the Common Stock are then reported in the “Pink Sheets” published by the National Quotation Bureau Incorporated (or a similar organization or agency succeeding to its functions of
reporting prices), the most recent bid price per share of the Common Stock so reported; or (iv) in all other cases, the fair market value of a share of Common Stock as determined by an independent qualified appraiser selected in good faith and
paid for by the Company. 
  
 “Common Stock” means the
common stock of the Company, par value $.01 per share, and any securities into which such common stock may hereafter be reclassified. 







 “Exercise Price” means $27.00, subject to adjustment in accordance with Section 9.

  
 “Fundamental Transaction” means any of the
following: (i) the Company effects any merger or consolidation of the Company with or into another person, (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions,
(iii) any tender offer or exchange offer (whether by the Company or another person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the
Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property. 
  
 “Original Issue Date” means the Original Issue Date first set forth
on the first page of this Warrant. 
  
 “Purchase
Agreement” means the Common Stock and Warrant Purchase Agreement, dated December 5, 2005, to which the Company and the original Holder are parties. 
  
 “Trading Day” means (i) a day on which the Common Stock is traded on a Trading Market (other than the OTC Bulletin Board), or (ii) if
the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted
on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding to its functions of reporting prices);
provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day. 
  
 “Trading Market” means whichever of the New York Stock Exchange, the American Stock Exchange, the NASDAQ National
Market, the NASDAQ SmallCap Market on which the Common Stock is listed or quoted for trading on the date in question. 
  
 “Warrant Equity Conditions Are Satisfied” means, as of any date of determination, that each of the following conditions is (or would be)
satisfied on such date, if the Company were to issue on such date all of the Warrant Shares then issuable upon exercise in full of all the Warrants: (i) the number of authorized but unissued and otherwise unreserved shares of Common Stock is
sufficient for such issuance, (ii) the Warrant Shares are listed or quoted (and is not suspended from trading) on a Trading Market and such shares of Common Stock are approved for listing on such market upon issuance, (iii) the Warrant
Shares is registered for resale under the Registration Statement and the prospectus under such Registration Statement is available for the sale of all Registrable Securities held by the Holder, and (iv) such issuance would be permitted in full
without violating the Securities Act, Section 11 or the rules or regulations of the Trading Market on which the Common Stock is then listed or quoted for trading. 
  
 2. Registration of Warrant. The Company shall register this Warrant upon records to be maintained by the Company for
that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or
any distribution to the Holder, and for all other purposes, absent actual notice to the contrary. 







 3. Registration of Transfers. The Company shall register the transfer of any portion of this
Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at its address specified herein. Upon any such registration or transfer, a new Warrant to purchase
Common Stock, in substantially the form of this Warrant (any such new Warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of
this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a
Warrant. 
  
 4. Exercise and Duration of Warrants.

  
 (a) This Warrant shall be exercisable by the registered
Holder at any time and from time to time from through and including the Expiration Date. At 5:30 p.m., Central time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value. Except as
set forth in subsection (b) hereof, the Company may not call or redeem any portion of this Warrant without the prior written consent of the affected Holder. 
  
 (b) Subject to the provisions of this Section 4(b), commencing on the two year anniversary of the Original Issue Date,
the Company may deliver a written notice (such notice, a “Company Exercise Notice”) to the Holder, stating its irrevocable election to cause the exercise at the Exercise Price of all (but not less than all) of this Warrant (the
“Company Exercise”) if each of the following conditions are satisfied from the date of the Company Exercise Notice through the Company Exercise Date (as defined below): (i) the Closing Price of the Common Stock for each of the 20
consecutive Trading Days prior to such Company Exercise Notice exceeds 150% of the Exercise Price then in effect and (ii) the Warrant Equity Conditions Are Satisfied. Subject to the terms and conditions of this Section 4(b), the Company
shall effect the exercise of this Warrant pursuant to a Company Exercise Notice on the 5th Trading Day immediately
succeeding the date of the Company Exercise Notice (such fifth day, the “Company Exercise Date”). Notwithstanding anything to the contrary set forth in this Warrant, the Holder shall have the right to nullify a Company Exercise Notice if
any of the conditions set forth in this Section 4(b) shall not have been met on each date from the date of the Company Exercise Notice through the Company Exercise Date. The parties agree that all exercises of this Warrant that occur on the
Company Exercise Date will occur on a cashless exercise basis. The Company covenants to honor all Exercise Notices delivered prior to the Company Exercise Date. Notwithstanding the foregoing, the Company and the Holder agree that, if and to the
extent Section 11 of this Warrant would restrict the right of the Company to issue or the right of the Holder to receive any of the Warrant Shares otherwise issuable upon the conversion in respect of a Company Exercise Notice, then
notwithstanding anything to the contrary set forth in the Company Exercise Notice, the Company Exercise Notice shall be deemed automatically amended to apply only to such portion of this Warrant as would permit exercise in full in compliance with
Section 11. 







 (c) Notwithstanding anything to the contrary contained herein, the number of Warrant Shares that may be
acquired by the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such exercise (or other issuance), the total number of shares of Common Stock then
beneficially owned by such Holder and its affiliates (as defined under Rule 144, “Affiliates”) and any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d)
of the Exchange Act, does not exceed 4.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall
be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. This provision shall not restrict the number of shares of Common Stock which a Holder may receive or beneficially own
in order to determine the amount of securities or other consideration that such Holder may receive in the event of a Fundamental Transaction as contemplated in Section 9 of this Warrant. By written notice to the Company, the Holder may
waive the provisions of this Section 11(a), but any such waiver will not be effective until the 61st day after delivery of such notice, nor will any such waiver effect any other Holder. 
  
 A. Notwithstanding anything to the contrary contained herein, the number
of Warrant Shares that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such exercise (or other issuance), the total number of shares
of Common Stock then beneficially owned by such Holder and its Affiliates and any other persons whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act, does not
exceed 9.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall be determined in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. This provision shall not restrict the number of shares of Common Stock which a Holder may receive or beneficially own in order to determine the
amount of securities or other consideration that such Holder may receive in the event of a Fundamental Transaction as contemplated in Section 9 of this Warrant. This restriction may not be waived. 
  
 5. Delivery of Warrant Shares. 
  
 (a) To effect exercises hereunder, the Holder shall not be required to
physically surrender this Warrant unless the aggregate Warrant Shares represented by this Warrant are being exercised. Upon (x) delivery of the Exercise Notice (in the form attached hereto) to the Company (with the attached Warrant Shares
Exercise Log) at its address for notice set forth herein and upon payment of the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder and (y) the Company Exercise Date, the Company shall
promptly (but in no event later than three Trading Days after the Date of Exercise (as defined herein)) issue and deliver to the Holder, a certificate for the Warrant Shares issuable upon such exercise, which, unless otherwise required by the
Purchase Agreement, shall be free of restrictive legends. The Company shall, upon request of the Holder and subsequent to the date on which a registration statement covering the resale of the Warrant Shares has been declared effective by 








 the Securities and Exchange Commission, use its reasonable best efforts to deliver Warrant Shares hereunder
electronically through the Depository Trust Corporation or another established clearing corporation performing similar functions, if available, provided, that, the Company may, but will not be required to change its transfer agent if its
current transfer agent cannot deliver Warrant Shares electronically through the Depository Trust Corporation. A “Date of Exercise” means each of the (A) Company Exercise Date and (B) the date on which the Holder shall have
delivered to the Company: (i) the Exercise Notice (with the Warrant Exercise Log attached to it), appropriately completed and duly signed and (ii) if such Holder is not utilizing the cashless exercise provisions set forth in this Warrant,
payment of the Exercise Price for the number of Warrant Shares so indicated by the Holder to be purchased. 
  
 (b) If by the third Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner required
pursuant to Section 5(a), then the Holder will have the right to rescind such exercise. 
  
 (c) If by the third Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner required pursuant to Section 5(a), and if after such third Trading Day and
prior to the receipt of such Warrant Shares, the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving
upon such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue by (B) the closing bid price of the Common Stock
at the time of the obligation giving rise to such purchase obligation and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored or deliver to
the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. The Holder shall provide the Company written notice indicating the amounts payable to
the Holder in respect of the Buy-In. 
  
 (d) The Company’s
obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof,
the recovery of any judgment against any person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other person of any obligation to the Company
or any violation or alleged violation of law by the Holder or any other person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares.
Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing Warrant Shares upon exercise of the Warrant as required pursuant to the terms hereof. 







 6. Charges, Taxes and Expenses. Issuance and delivery of Warrant Shares upon exercise of this
Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid
by the Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the
Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof. 
  
 7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause
to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction
and customary and reasonable indemnity (which shall not include a surety bond), if requested. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable
third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation
to issue the New Warrant. 
  
 8. Reservation of Warrant
Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of Persons other than the
Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the
terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. 
  
 9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9. 
  
 (a) Stock Dividends and Splits. If the Company, at any time while
this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a
larger number of shares, or (iii) combines outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall
become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective
immediately after the effective date of such subdivision or combination. 







 (b) Fundamental Transactions. If, at any time while this Warrant is outstanding there is a
Fundamental Transaction, then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such
Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant (the “Alternate Consideration”). For
purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such
Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock
are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. At the Holder’s option and request, any successor to the Company or surviving entity in such Fundamental Transaction shall, either (1) issue to the Holder a new warrant substantially in the form of this Warrant and
consistent with the foregoing provisions and evidencing the Holder’s right to purchase the Alternate Consideration for the aggregate Exercise Price upon exercise thereof, or (2) purchase the Warrant from the Holder for a purchase price,
payable in cash within five Trading Days after such request (or, if later, on the effective date of the Fundamental Transaction), equal to the Black Scholes value of the remaining unexercised portion of this Warrant on the date of such request. The
terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph (b) and insuring that the Warrant (or any such
replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. 
  
 (c) Price Antidilution. If within twelve months from the Original Issue Date the Company shall issue any (i) Common Stock or (ii) any
securities of the Company or the subsidiary that would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time
convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock (“Common Stock Equivalents” and collectively “Additional Shares”), entitling any person or entity to acquire shares of Common
Stock at an effective price per share less than the Exercise Price then in effect, the Exercise Price shall be amended to equal the then current Exercise Price x (A + B) ÷ (A + C). For purposes of the foregoing formula, the following
definitions shall apply: (I) “A” means the number of shares of Common Stock outstanding and deemed outstanding immediately prior to such issue of Additional Shares (treating for this purpose as outstanding all shares of Common Stock
issuable upon exercise of options and convertible securities as outstanding immediately prior to such issue; (II) “B” means the number of shares of Common Stock that would have been issued if such Additional Shares had been issued at a
price per share equal to the Discounted Purchase Price (as defined below) (determined by dividing the aggregate consideration received by the Company in respect of such issue by the Discounted Purchase Price); and (III) “C” means the
number of such Additional Shares issued in such transaction. 







 The term “Discounted Purchase Price” shall mean the amount actually paid by third parties for a
share of Common Stock. The sale of Common Stock Equivalents shall be deemed to have occurred at the time of the issuance of the Common Stock Equivalents and the Discounted Purchase Price covered thereby shall also include the actual exercise or
conversion price thereof at the time of the issuance, with further adjustments for changes at conversion or exercise (in addition to the consideration per share of Common Stock underlying the Common Stock Equivalents received by the Company upon
such sale or issuance of the Common Stock Equivalents). If shares are issued for a consideration other than cash, the per share selling price shall be the fair value of such consideration as determined in good faith by the board of directors of the
Company. Notwithstanding anything to the contrary herein, this section shall not apply to an Exempt Issuance (as defined in the Purchase Agreement). 
  
 (d) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 9, the number of Warrant
Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as
the aggregate Exercise Price in effect immediately prior to such adjustment. 
  
 (e) Calculations. All calculations under this Section 9 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any
such shares shall be considered an issue or sale of Common Stock. 
  
 (f) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions
giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s Transfer Agent.

  
 10. Payment of Exercise Price. The Holder may pay the
Exercise Price in one of the following manners: 
  
 (a) Cash
Exercise. The Holder may deliver immediately available funds; or 
  
 (b) Cashless Exercise. Pursuant to a Company Exercise, or if an Exercise Notice is delivered at a time when a registration statement permitting the Holder to resell the Warrant Shares is not then effective or the prospectus forming a
part thereof is not then available to the Holder for the resale of the Warrant Shares, then the Holder may notify the Company in an Exercise Notice of its election to utilize cashless exercise, in which event the Company shall issue to the Holder
the number of Warrant Shares determined as follows: 
  
 X = Y [(A-B)/A] 







 where: 
  
 X = the number of Warrant Shares to be issued to the Holder. 
  
 Y = the number of Warrant Shares with respect to which this Warrant is being exercised. 
  
 A = the average of the Closing Prices for the five Trading
Days immediately prior to (but not including) the Exercise Date. 
  
 B = the Exercise Price. 
  
 For purposes of Rule
144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant
Shares shall be deemed to have commenced, on the date this Warrant was originally issued. 
  
 11. No Fractional Shares. No fractional shares of Warrant Shares will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares which would, otherwise be issuable, the Company
shall pay cash equal to the product of such fraction multiplied by the Closing Price of one Warrant Share on the date of exercise. 
  
 12. Notices. Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in
writing and shall be deemed given and effective if provided pursuant to the Purchase Agreement. In case any time: (1) the Company shall declare any cash dividend on its capital stock; (2) the Company shall pay any dividend payable in stock
upon its capital stock or make any distribution to the holders of its capital stock; (3) the Company shall offer for subscription pro rata to the holders of its capital stock any additional shares of stock of any class or other rights;
(4) there shall be any capital reorganization, or reclassification of the capital stock of the Company, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to, another corporation; or (5) there
shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then, in any one or more of said cases, the Company shall give prompt written notice to the Holder. Such notice shall also specify the date as of which the
holders of capital stock of record shall participate in such dividend, distribution or subscription rights, or shall be entitled to exchange their capital stock for securities or other property deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, or conversion or redemption, as the case may be. Such written notice shall be given at least 20 days prior to the action in question and not less than 20 days prior to the record
date or the date on which the Company’s transfer books are closed in respect thereto. 
  
 13. Registration Rights. The Holder shall be entitled to the registration rights set forth in Section 6 of the Purchase Agreement. 







 14. Miscellaneous. 
  
 (a) This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and
assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be
amended only in writing signed by the Company and the Holder and their successors and assigns. 
  
 (b) All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of Minnesota
(except for matters governed by corporate law in the State of Delaware), without regard to the principles of conflicts of law thereof. 
  
 (c) The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof. 
  
 (d) In case any one or more of the
provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in
good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant. 
  
 (e) Prior to exercise of this Warrant, the Holder hereof shall not, by reason
of by being a Holder, be entitled to any rights of a stockholder with respect to the Warrant Shares 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK, 
 SIGNATURE PAGE FOLLOWS] 







 IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as
of the date first indicated above. 
  

			
	PW EAGLE, INC.
		
	 By:
	 	  


	 Its:
	 	  











 EXERCISE NOTICE 
 PW EAGLE, INC. 
 WARRANT DATED December 6, 2005 
  
 The undersigned Holder hereby irrevocably elects to purchase
                     shares of Common Stock pursuant to the above referenced Warrant. Capitalized terms used herein and not otherwise defined
have the respective meanings set forth in the Warrant. 
  
 (1) The undersigned
Holder hereby exercises its right to purchase                      Warrant Shares pursuant to the Warrant. 
  
 (2) The Holder intends that payment of the Exercise Price shall be made as (check one):

  
                           “Cash Exercise” under Section 10 
  
                           “Cashless Exercise” under Section 10 
  
 (3) If the holder has elected a Cash Exercise, the holder shall pay the sum of
$                     to the Company in accordance with the terms of the Warrant. 
  
 (4) Pursuant to this Exercise Notice, the Company shall deliver to the holder
                     Warrant Shares in accordance with the terms of the Warrant. 
  

					
	 Dated                     
    ,         
	 	Name of Holder:
		
	 	 	 (Print)
  
  


			
	 	 	By:	 	  


	 	 	Its:	 	  


	 	 	(Signature must conform in all respects to name of holder as specified on the face of the Warrant)








 Warrant Shares Exercise Log 
  

							
	 Date

	  	 Number of Warrant
 Shares Available
 to be Exercised

	  	 Number of Warrant
 Shares Exercised

	  	 Number of Warrant
 Shares Remaining
 to be Exercised










 PW EAGLE, INC. 
 WARRANT ORIGINALLY ISSUED December 6, 2005 
 WARRANT
NO.         
  
 FORM
OF ASSIGNMENT 
  
 [To be completed and signed only upon transfer of
Warrant] 
  
 FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto                              the right represented by the above-captioned
Warrant to purchase                      shares of Common Stock to which such Warrant relates and appoints
                         attorney to transfer said right on the books of the Company with full power of substitution in
the premises. 
  
 Dated:
                         ,             

  

	
	  

 (Signature must conform in all respects to name of

	 holder as specified on the face of the Warrant)

	
	 Address of Transferee

	
	  


	  


	  




  
 Attest: 
  
  








 EXHIBIT C 
  

OPINION OF FREDRIKSON & BYRON, P.A. 
  
 FORM OF OPINIONS 
  
 [Capitalized terms shall have the meanings ascribed thereto in the Common Stock and Warrant Purchase Agreement] 
  

	 	1.	The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Minnesota. Each subsidiary of the Company is duly organized,
validly existing and in good standing under the laws of its jurisdiction of incorporation or formation. 

  

	 	2.	The Company and each subsidiary has all necessary corporate power and authority to (i) execute and deliver, and to perform its obligations under the Agreement and
(ii) conduct its business as it is, to our knowledge, currently conducted and described in the Company SEC Documents, and own, lease and license it properties and assets. 

  

	 	3.	The Company is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary except where the failure to be so qualified and in good standing would not result in a Material Adverse Effect. 

  

	 	4.	The execution, delivery and performance by the Company of the Agreement and the consummation of the transactions contemplated thereby including the issuance of the Securities and
the Warrant Shares, have been duly authorized by all necessary corporate action of the Company. 

  

	 	5.	The Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in
accordance with its terms. 

  

	 	6.	Except for filings, authorizations or approvals contemplated by the Agreement, no authorizations or approvals of, and no filings with, any governmental or administrative agency,
regulatory authority, stock market or trading facility are necessary or required by the Company for the execution and delivery of the Agreement or the consummation of the transactions contemplated thereby. 

  

	 	7.	Neither the execution and delivery of the Agreement by the Company, nor the consummation or performance by the Company of any of the transactions contemplated by the Agreement
(including the issuance of the Securities and the Warrant Shares) (i) contravene, conflict with or result in a violation of any provisions of the Company’s articles of incorporation or bylaws; (ii) constitute a violation of any U.S.
federal or Minnesota state law, rule or regulation applicable to the Company; (iii) violate any judgment, decree, order or award of any court, governmental body or arbitrator specifically naming the Company of which we are aware; or
(iv) with or without notice and/or the passage of time, conflict with or result in the breach or termination of any term or provision of, or constitute a default under, or cause any acceleration under, or cause the creation of any lien, charge
or encumbrance upon the properties or assets of the Company pursuant to, any agreement to which the Company is a party of which we are aware (including those described or included in the Company SEC Documents), which, in the case of clauses
(iii) and (iv), would result in a Material Adverse Effect. 









	 	8.	The authorized capital stock of the Company on the date hereof consists of 30,000,000 shares of Common Stock. As of December 2, 2005, without giving effect to the transactions
contemplated by the Agreement to occur at the Closing, there are issued and outstanding of record: 9,595,243 shares of Common Stock and 595,508 outstanding shares of Class B common stock. There are also 2,032,922 shares of Common Stock reserved for
issuance upon the exercise or conversion, as the case may be, of outstanding options, warrants or other convertible securities as of the date of this Agreement. The currently outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable. The form of certificates for the Common Shares and the Warrant Shares conforms to the requirements of the Minnesota Business Corporation Act. 

  

	 	9.	To our knowledge, except as provided or disclosed in the Agreement on in the Company SEC Documents, no person or entity is entitled to any preemptive, right of first refusal,
contractual or similar rights with respect to the issuance of the Securities or the Warrant Shares. 

  

	 	10.	The Common Shares and the Warrant Shares have been duly authorized or reserved for issuance by all necessary corporate action on the part of the Company; and the Common Shares, when
issued, sold and delivered against payment therefor in accordance with the provisions of the Agreement and the Warrant Shares issuable upon exercise of the Warrants, when issued upon exercise of the Warrants in accordance with the terms of the
Warrants, will be duly and validly issued, fully paid and non-assessable. 

  

	 	11.	Assuming the accuracy of the representations and warranties of each of the Purchasers set forth in Section 3 of the Agreement, the offer, issuance and sale of the Common Shares
at the Closing pursuant to the Agreement are, and the issuance of the Warrant Shares issuable upon exercise of the Warrants will be, exempt from the registration requirements of the Securities Act and the securities or “blue sky” laws of
any state. 

  

	 	12.	We are not aware of any actions, suits, arbitrations, claims, proceedings or investigations pending or threatened against the Company or any of its subsidiaries or any of their
respective operations, businesses, properties or assets by or before any court, arbitrator or government or regulatory commission, board, body, authority or agency that challenges the validity of any actions take or to be taken by the Company
pursuant to the Purchase Agreement or the transaction contemplated thereby. 

  

	 	13.	To our knowledge, except as set forth in the Purchase Agreement, no holders of the Company’s securities have rights to the registration of shares of Common Stock or other
securities of the Company because of the filing of the Registration Statement or the Offering, except as set forth in the Company SEC Documents. 








 EXHIBIT D 
  

SELLING SHAREHOLDER QUESTIONNAIRE 







 PW EAGLE, INC. 
  
 Questionnaire for Selling Shareholder 
  
 This questionnaire is necessary to obtain information to be used by PW Eagle, Inc. (the “Company”) to complete a
Registration Statement (the “Registration Statement”) covering the resale of certain shares of Company Common Stock currently outstanding and/or of certain shares of Company Common Stock to be issued upon exercise of currently outstanding
warrants to purchase Company Common Stock. Please complete and return this questionnaire to Fredrikson & Byron, P.A., the Company’s legal counsel, to the attention of Amy Hancock either by mail to Fredrikson & Byron,
P.A., 200 South Sixth Street, Suite 4000, Minneapolis, MN 55402 or by fax to 612-492-7077. Please return the questionnaire by             , December
    , 2005 or sooner, if possible. Call Amy Hancock at 612-492-7756 with questions. 
  
 FAILURE TO RETURN THE QUESTIONNAIRE MAY RESULT IN THE EXCLUSION OF YOUR NAME AND SHARES FROM THE REGISTRATION STATEMENT. 
  
 Please answer all questions. If the answer to any question is
“None” or “Not Applicable,” please so state. 
  
 If there is any question about which you have any doubt, please set forth the relevant facts in your answer. 
  

	1.	Please correct your name and/or address if not correct below 

  

			
	 Name:
	 	  


		
	 Address:
	 	  


	 	 	  





	*	See Appendix A for definitions 









	2.	Please state the total number of currently outstanding shares of Company Common Stock that you beneficially own* and the form of ownership and the date that you acquired such
stock. Include shares registered in your name individually or jointly with others and shares held in the name of a bank, broker, nominee, depository or in “street name” for your account. (DO NOT list options and warrants. See Question #3).


  
  

	3.	Please list any outstanding options and warrants to purchase Company Common Stock that you beneficially own*, including (i) the number of shares of Company Common Stock to be
issued upon the exercise of such option or warrant, (ii) the date such option or warrant is exercisable, (iii) the expiration date and (iv) the exercise price per share of EACH such option and warrant. 

  
  

							
	 Number of Shares
 Covered by Option
 or Warrant

	  	Date Exercisable

	  	Exercise Price

	  	Expiration Date



  

	4.	Please list the number of shares of Common Stock listed under Question #2 above that you intend to resell pursuant to the Registration Statement. 

  
  


	*	See Appendix A for definitions 









	5.	Please list the number of shares of Common Stock underlying warrants listed under Question #3 above that, upon exercise of such warrants, you intend to resell pursuant to the
Registration Statement. 

  
  

	6.	If you are a limited liability company or limited partnership, please name the managing member or general partner and each person controlling such managing member or general
partner. 

  
  

	7.	If you are an entity, please identify the natural person(s) who exercise sole or shared voting power* and/or sole or shared investment power* with regard to the shares listed under
Question #2 and Question #3. 

  
  

	8.	Please advise whether you are a registered broker-dealer or an affiliate* thereof. If you are an affiliate of a registered broker-dealer, please explain the nature of the
affiliation and disclose whether you acquired the shares in the ordinary course of business and whether at the time of the acquisition you had any plans or proposals, directly or with any other person, to distribute the shares listed under Question
#2 and Question #3. 

  
  


	*	See Appendix A for definitions 









	9.	List below the nature of any position, office or other material relationship that you have, or have had within the past three years, with the Company or any of its predecessors or
affiliates*. 

  
  

	10.	If you expressly wish to disclaim any beneficial ownership* of any shares listed under Question #2 for any reason in the Registration Statement, indicate below the shares and
circumstances for disclaiming such beneficial ownership*. 

  
  

	11.	With respect to the shares that you wish to include in the Registration Statement, please list any party that has or may have secured a lien, security interest or any other claim
relating to such shares, and please give a full description of such claims. 

  
  


	*	See Appendix A for definitions 









	12.	If you presently contemplate a sale (other than pursuant to the Registration Statement) or purchase, or if you are presently committed to sell or purchase, any of the Company’s
Common Stock, please state the number shares and provide a description of the contemplated transaction. 

  
  

	13.	Please specify any currently open short positions* that you currently have and specify the amount of such positions. 

  
  

	14.	Please review Appendix B “Plan of Distribution.” Please identify and describe any method of distribution, other than described in Appendix B, that you plan on using to
sell your shares of the Company’s Common Stock. By signing below you agree to distribute your shares of the Company’s Common Stock as described in Appendix B and this Item 13 and to notify the Company of any plan to distribute the
Company’s Common Stock that is not described in Appendix B or herein under Item 13. 

  
 The undersigned, a Selling Shareholder of the Company, hereby furnishes the foregoing information for use by the Company in connection with the
preparation of the Registration Statement. The undersigned will notify Amy Hancock, at the address specified above, in writing immediately of any changes in the foregoing answers that should be made as a result of any developments occurring prior to
the time that all the shares of Common Stock of the Company are sold pursuant to the Registration Statement referred to above. Otherwise, the Company is to understand that the above information continues to be, to the best of the undersigned’s
knowledge, information and belief, complete and correct. 
  
 Dated: December
    , 2005 
  
  

	
	





	*	See Appendix A for definitions 








 APPENDIX A 
  

Certain Terms Used in Questionnaire 
  
 AFFILIATE 
  
 An “affiliate” of a company is a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is
under common control with, such company. 
  
 BENEFICIAL OWNERSHIP 
  
 A person
“beneficially owns” a security if such person, directly or indirectly, has or shares voting power or investment power of such security, whether through a contract, arrangement, understanding, relationship or otherwise. A person is also the
beneficial owner of a security if he has the right to acquire beneficial ownership at any time within 60 days through the exercise of any option, warrant or right, or the power to revoke a trust, discretionary account or similar arrangement.

  
 INVESTMENT POWER 
  
 “Investment power” includes the power to dispose, or to direct the
disposition of, a security. 
  
 SHORT POSITION

  
 A person has a “short position” in a stock if
such person sells the stock that the person has borrowed, but does not (yet) own at the time of the sale. 
  
 VOTING POWER 
  
 “Voting power” includes the power to vote, or to direct the voting of, a security. 







 APPENDIX B 
  

PLAN OF DISTRIBUTION 
  
 We are registering for resale by the selling shareholders and certain transferees a total of
                     shares of Common Stock, of which
                     shares are issued and outstanding [and up to
                     shares are issuable upon exercise of warrants. We will not receive any of the proceeds from the sale by the selling
shareholders of the shares of common stock, although we may receive up to $             upon the exercise of all of the warrants by the selling shareholders. We will bear all fees
and expenses incident to our obligation to register the shares of Common Stock. If the shares of Common Stock are sold through broker-dealers or agents, the selling shareholder will be responsible for any compensation to such broker-dealers or
agents. 
  
 The selling shareholders may pledge or grant a
security interest in some or all of the shares of Common Stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of Common Stock from time to tie
pursuant to this prospectus. 
  
 The selling shareholders also may
transfer and donate the shares of Common Stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus. 
  
 The selling shareholders will sell their shares of Common Stock subject to
the following: 
  

	 	•	all of a portion of the shares of Common Stock beneficially owned by the selling shareholders or their perspective pledgees, donees, transferees or successors in interest, may be
sold on the OTC Bulletin Board Market, any national securities exchange or quotation service on which the shares of our Common Stock may be listed or quoted at the time of sale, in the over-the counter market, in privately negotiated transactions,
through the writing of options, whether such options are listed on an options exchange or otherwise, short sales or in a combination of such transactions; 

  

	 	•	each sale may be made at market price prevailing at the time of such sale, at negotiated prices, at fixed prices or at carrying prices determined at the time of sale;


  

	 	•	some or all of the shares of Common Stock may be sold through one or more broker-dealers or agents and may involve crosses, block transactions or hedging transactions. The selling
shareholders may enter into hedging transactions with broker-dealers or agents, which may in turn engage in short sales of the Common Stock in the course of hedging in positions they assume. The selling shareholders may also sell shares of Common
Stock short and deliver shares of Common Stock to close out short positions or loan or pledge shares of Common Stock to broker-dealers or agents that in turn may sell such shares; and 

  

	 	•	in connection with such sales through one or more broker-dealers or agents, such broker-dealers or agents may receive compensation in the form of discounts, concessions or
commissions from the selling shareholders and may receive commissions from the purchasers of the shares of Common Stock for whom they act as broker-dealer or agent or to whom they sell as principal (which discounts, concessions or commissions as to
particular broker-dealers or agents may be in excess of those customary in the types of transaction involved). Any broker-dealer or agent participating in any such sale may be deemed to be an “underwriter” within the meaning of the
Securities Act and will be required to deliver a copy of this prospectus to any person who purchases any share of Common Stock from or through such broker-dealer or agent. We have been advised that, as of the date hereof, none of the selling
shareholders have made any arrangements with any broker-dealer or agent for the sale of their shares of common stock. 

  
 The selling shareholder and any broker-dealer participating in the distribution of the shares of Common Stock may be deemed to be “underwriters”
within the meaning of the Securities Act, and any profits realized by the selling shareholders and any commissions paid, or any discounts or concessions allowed to any such broker-dealer may be deemed to be underwriting commissions or discounts
under the Securities Act. In addition, any shares of Common Stock covered by this prospectus which qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this prospectus. 







 If required at the time a particular offering of the shares of Common Stock is made, a prospectus
supplement or, if appropriate, a post-effective amendment to the shelf registration statements of which this prospectus is a part, will be distributed which will set forth the aggregate amount of shares of Common Stock being offered and the terms of
the offering, including the name or names of any broker-deals or agents, any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers. 
  
 Under the securities laws of some states, the shares of Common Stock may be sold in such states only through registered or
licensed brokers or dealers. In addition, in some states the shares or Common Stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is
complied with. There can be no assurance that any selling shareholder will sell any or all of the shares of Common Stock registered pursuant to the shelf registration statement, of which this prospectus forms a part. 
  
 The selling shareholders and any other person participating in such
distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the
shares of Common Stock by the selling shareholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of Common Stock to engage in market-making activities with
respect to the shares of Common Stock. All of the foregoing may affect the marketability of the shares of Common Stock and the ability of any person or entity to engage in market-making activities with respect to the shares of Common Stock.

  
 We will bear all expenses of the registration of the shares of
Common Stock including, without limitation, Securities and Exchange Commission filing fess and expenses of compliance with the state securities of “blue sky” laws. The selling shareholders will pay all underwriting discounts and selling
commissions and expenses, brokerage fees and transfer taxes, as well as the fees and disbursements of counsel to and experts for the selling shareholders, if any. We will indemnify the selling shareholders against liabilities, including some
liabilities under the Securities Act, in accordance with the registration rights agreement or the selling shareholder will be entitled to contribution. We will be indemnified by the selling shareholders against civil liabilities, including
liabilities under the Securities Act that may arise from any written information furnished to us by the selling shareholders for use in this prospectus, in accordance with the related registration rights agreement or will be entitled to
contribution. Once sold under this shelf registration statement, of which this prospectus forms a part, the shares of Common Stock will be freely tradable in the hands of persons other than our affiliates.