AMENDED EMPLOYMENT AGREEMENT

AMENDED EMPLOYMENT AGREEMENT (this “Agreement”) dated as of September 29, 2005, between FLAG ACQUISITION CORPORATION, a Delaware corporation, (the “ Merger Sub ”) and CELSO LOURENCO GONCALVES (“ Goncalves ”).

      WHEREAS , pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) made and entered into as of the 18th day of May, 2005, by and among Flag Holdings Corporation, a Delaware corporation (“ Parent ”), the Merger Sub, a wholly owned subsidiary of Parent, and Metals USA, Inc. (the “Company”), Parent will acquire all of the capital stock of the Company by merging (the “Merger”) the Merger Sub with and into the Company (the “Transaction”);

      WHEREAS , concurrently with the execution of the Merger Agreement, as a condition and inducement to Parent’s and the Merger Sub’s willingness to enter into the Merger Agreement, the Merger Sub is entering into this Agreement;

      WHEREAS, in connection with the Transaction, the Company, as the Surviving Corporation (as that term is defined in the Merger Agreement) in the Merger, desires to employ Goncalves and Goncalves desires to be employed by the Company;

      WHEREAS , the Company and Goncalves are parties to that certain employment agreement dated February 18, 2003 (the “Prior Agreement”); and

      WHEREAS , Goncalves, as a condition of his employment, will make a substantial investment in Parent concurrently with the closing of the Transaction by purchasing 188,000 shares of common stock of Parent, par value $0.01, at a price of $10 per share;

      NOW THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

     Section 1. Employment Period .

     The initial term of Goncalves’ employment hereunder shall be for a period of five (5) years (the “Initial Term”) commencing on the closing of the Transaction (the “ Effective Date ”) and ending on the fifth anniversary of the Effective Date, unless terminated earlier pursuant to Section 3 of this Agreement (the “ Employment Period ”); provided, however, that the Employment Period shall automatically be renewed for successive one (1) year terms upon the Expiration of the Initial Term unless either party gives at least ninety (90) days written notice of its intention not to renew the Employment Period. Upon Goncalves’ termination of employment with the Company for any reason, he shall immediately resign all positions with the Company or any of its subsidiaries or affiliates, including any position as a member of the Parent’s Board of Directors and a member of the Company’s Board of Directors (the “Board”).

     Section 2. Terms of Employment .

          (a) Position . During the term of Goncalves’ employment, Goncalves shall serve as President and Chief Executive Officer of the Company and shall be responsible for the management and affairs of the Company as directed by the Company’s Board. In addition to serving as President and Chief Executive Officer, prior to an initial public offering of the Parent’s common stock, Goncalves shall be a member of the Parent’s Board of Directors and the Company’s Board. In performing his duties hereunder, Goncalves shall report directly to the Board.

          (b) Duties . During the term of Goncalves’ employment, Goncalves agrees to devote all of his business time to the business and affairs of the Company and to use Goncalves’ reasonable best efforts to perform faithfully, effectively and efficiently his responsibilities and obligations hereunder. Notwithstanding the foregoing, nothing herein shall prohibit Goncalves from (i) serving on civic or charitable boards or committees, (ii) delivering lectures or fulfilling speaking engagements and (iii) managing personal investments, so long as such activities do not materially interfere with the performance of Goncalves’ responsibilities hereunder.

          (c) Compensation .

               (i)  Base Salary . During the term of Goncalves’ employment, Goncalves shall receive an initial annual base salary in an amount equal to $525,000.00 (the “ Annual Base Salary ”), less all applicable withholdings, which shall be paid in accordance with the customary payroll practices of the Company. Notwithstanding anything herein, the Annual Base Salary will not be reduced without Goncalves’ consent, unless the reduction is related to a broader compensation reduction that is not limited to Goncalves and does not exceed 10% of his Annual Base Salary.

               (ii) Bonuses . For fiscal year 2005,Goncalves shall be eligible to receive a bonus pursuant to the plan as in existence prior to the Effective Date in an amount to be determined by the Board in good faith. Thereafter, during the Employment Period, the Company shall establish a bonus plan for each fiscal year (the “ Plan ”) pursuant to which Goncalves will be eligible to receive an annual bonus (the “ Bonus ”). The Board or the Compensation Committee of the Board will administer the Plan and establish performance objectives for each year to be mutually agreed upon with Goncalves. In the event that the Company achieves target based on actual performance, Goncalves shall be entitled to receive a Bonus in an amount equal to no less than Goncalves’ Annual Base Salary. Goncalves will be entitled to receive the Bonus only upon the Company’s achievement of the specified performance objectives and if Goncalves is employed on the last day of the applicable performance period (subject to Section 4). The Bonus shall become payable on or before March 15 following the end of the applicable fiscal year provided that the Board or Compensation Committee finally determines (x) that the Company has achieved the applicable performance objectives and (y) the amount of bonuses that shall be paid to each executive entitled to receive a bonus for the applicable bonus year. Notwithstanding the immediately preceding sentence, in the event Goncalves’ employment is terminated: (A) as a result of Goncalves’ death or Disability; (B) by the Company without Cause; (C) by Goncalves for Good Reason; or (D) because the Company elects not to renew the Employment Period, Goncalves shall be entitled to receive a prorated Bonus for the year in which termination occurs,

based on actual performance for such year, the amount of which prorated bonus, if any, shall be determined and paid promptly following the end of the year to which such bonus relates.

               (iii)  Compensation Consultant . Following the Effective Date, the Company shall retain a compensation consulting firm to conduct a compensation review, following which the Board shall consider, in its sole discretion, increasing Goncalves’ Annual Base Salary and bonus target retroactively to the Effective Date.

               (iv)  Benefits . During the term of Goncalves’ employment hereunder, he shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other senior executives of the Company and shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company to the extent applicable generally to other senior executives of the Company. The benefits provided to Goncalves shall be individually the same and in the aggregate equal to or greater than those benefits that Goncalves was receiving at the Company immediately prior to the Effective Date. Notwithstanding anything in this Section 2(c)(iv) to the contrary, all benefit obligations are subject to guidance issued by the U.S. Department of Treasury under Section 409A of the Code. To the extent required, the Company may modify the benefits provided under this Section 2(c)(iv) to comply with such guidance; provided, however, that the aggregate value of benefits provided to Goncalves after such modification shall not be less than the aggregate value of the benefits provided to him prior to the modification.

               (v)  Expenses . During the term of Goncalves’ employment, Goncalves shall be entitled to receive reimbursement for all reasonable expenses incurred by Goncalves in performance of his duties hereunder provided that Goncalves provides all necessary documentation in accordance with Company policy.

               (vi)  Vacation and Holidays . During the term of Goncalves’ employment, Goncalves shall be entitled to five weeks of paid vacation.

               (vii)  Stock Options . Concurrent with the closing of the Transaction, Parent shall grant Goncalves two stock option grants (the “ Executive Options ”) to purchase Parent’s common stock, par value $ .01, at an exercise price of $10 per share. Each grant will be pursuant to the terms and conditions set forth in the Parent’s 2005 Stock Incentive Plan (the “ Stock Incentive Plan ”) and will be subject to the terms of the Stock Incentive Plan and Goncalves’ Non-Qualified Stock Option Agreement.

                    (A) The first grant will be for options to purchase 406,900 shares of the Parent’s common stock and will be exercisable for a maximum of ten years subject to the vesting, termination and other terms set forth in Goncalves’ Stock Option Agreement.

                    (B) The second grant will be for options to purchase an additional 18,800 shares of the Parent’s common stock, which options will be fully vested as of the grant date and exercisable on or before March 30, 2006, on which date the options shall terminate. If Goncalves exercises all or a portion of these options on or before March 30, 2006, Goncalves will receive an additional 2.17 options to purchase shares of the Parent’s common

stock for each option exercised to a maximum additional award of 40,790 options. If the foregoing calculation results in a fractional number of options, the fractional option shall be disregarded. The options contingent upon the exercise of the options terminable on March 30, 2006 will be exercisable for a maximum of ten years subject to the vesting, termination and other terms set forth in Goncalves’ Stock Option Agreement.

               (viii)  Restricted Stock . Concurrent with the closing of the Transaction, the Parent shall grant Goncalves 36,000 shares of its common stock, par value $ .01 (the “ Stock Grant ”). The Stock Grant will be pursuant to the terms and conditions set forth in the Stock Incentive Plan and will be subject to the terms of the Stock Incentive Plan and Goncalves’ Restricted Stock Agreement

               (ix)  Investment . Concurrent with the closing of the Transaction, Goncalves shall purchase 188,000 shares of the Parent’s common stock, par value $0.01, at a price of $10 per share.

     Section 3. Termination of Employment .

          (a) Death or Disability . Goncalves’ employment shall terminate automatically upon Goncalves’ death. If Goncalves becomes subject to a Disability during the Term of Employment (pursuant to the definition of Disability set forth below), the Company may give Goncalves written notice in accordance with Sections 3(e) and 10(h) of its intention to terminate Goncalves’ employment. For purposes of this Agreement, “ Disability ” means (i) Goncalves’ inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical of mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident or health plan covering employees of the Company.

          (b) Cause . Goncalves’ employment may be terminated at any time by the Company for Cause. For purposes of this Agreement, “Cause” shall mean (i) the commission of a felony or a crime of moral turpitude; (ii) the commission of a willful and material act of dishonesty involving the Company; (iii) a material non-curable breach of Goncalves’ obligations under this Agreement; (iv) any breach of the Company’s policies or procedures which causes material harm to the Company; (v) any other willful misconduct which causes material harm to the Company or its business reputation; (vi) a failure by Goncalves to cure a material breach of his obligations under this Agreement, the Investor Rights Agreement among the shareholders of Parent, the Subscription Agreement between Goncalves and Parent or the Non-Qualified Stock Option Agreement between Goncalves and Parent within 30 days after written notice of such breach; (vii) breach of any of Goncalves’ representations contained in this Agreement; or (viii) prior to the closing of the Transaction, the emergence of any facts or developments that, in the aggregate, are reasonably likely to adversely impact (for the Company or Goncalves) the pending litigation involving Goncalves, or, whether before or after the closing of the Transaction, the occurrence of a materially adverse outcome in such litigation.

          (c) Termination Without Cause . The Company may terminate Goncalves’ employment hereunder without cause at any time.

          (d) Good Reason . Goncalves’ employment may be terminated at any time by Goncalves for Good Reason or without Good Reason upon ninety (90) days prior written notice. For purposes of this Agreement, “Good Reason” means voluntary resignation after any of the following actions are taken by the Company or any of its subsidiaries without Goncalves’ consent: (i) a reduction in Goncalves’ Annual Base Salary or Bonus potential described in Section 2(c)(ii) of this Agreement (but not including any diminution related to a broader compensation reduction that is not limited to any particular employee or executive); (ii) a material diminution of Goncalves’ responsibilities as President and Chief Executive Officer or, prior to an initial public offering, the failure to re-elect Goncalves to the Board of Directors of the Company or the Parent; (iii) relocation of Goncalves’ primary work place, as assigned to him by the Company, beyond a fifty (50) mile radius from the Company’s current corporate office in Houston, Texas; or (iv) a material breach by the Company of this Agreement; provided, however, that none of the events described in the foregoing clauses (i), (ii), (iii) or (iv) shall constitute Good Reason unless Goncalves shall have notified the Company in writing describing the events which constitute Good Reason and then only if the Company shall have failed to cure such events within thirty (30) days after the Company’s receipt of such written notice.

          (e) Notice of Termination . Any termination by the Company for Cause or without Cause, or by Goncalves for Good Reason or without Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 10(h). For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Goncalves’ employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date. The failure by Goncalves or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of Goncalves or the Company hereunder or preclude Goncalves or the Company from asserting such fact or circumstance in enforcing Goncalves’ or the Company’s rights hereunder.

          (f) Date of Termination . “Date of Termination” means (i) if Goncalves’ employment is terminated by the Company for Cause, without Cause or by reason of Disability, or by Goncalves for Good Reason or without Good Reason, the date of receipt of the Notice of Termination or any later date specified therein pursuant to Section 3(e), as the case may be and (ii) if Goncalves’ employment is terminated by reason of death, the date of death.

     Section 4. Obligations of the Company upon Termination .

          (a) With Good Reason; Other Than for Cause, Death or Disability; or Upon the Company’s Election Not to Renew the Employment Period . If during the Employment Period, the Company shall terminate Goncalves’ employment other than for Cause, Goncalves shall terminate his employment for Good Reason, the termination of Goncalves’ employment in any case is not due to his death or Disability or upon the Company’s election not to renew the

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Employment Period, then the Company will provide Goncalves with the following severance payments and/or benefits:

          (i) The Company shall pay to Goncalves in a lump sum (i) the Annual Base Salary through the Date of Termination to the extent not paid, and (ii) to the extent not previously paid, the Bonus earned for any year prior to the year in which the Date of Termination occurs to the extent that Goncalves is employed on the last day of the applicable performance period such Bonus to be paid in accordance with the terms of the Plan. (“ Accrued Obligations ”);

          (ii) After the Date of Termination, the Company will pay Goncalves (x) within ten (10) days of the Date of Termination, a lump sum equal to twelve (12) months of his Annual Base Salary; and (y) commencing on the first day of the thirteenth month following the Date of Termination an amount equal to one-twelfth of his Annual Base Salary and continuing payment of such amount on the first day of each successive mont