AMENDED EMPLOYMENT AGREEMENT

AMENDED EMPLOYMENT AGREEMENT (this “Agreement”)
dated as of September 29, 2005, between FLAG
ACQUSITION CORPORATION, a Delaware corporation (the
“ Merger Sub ”), and JOHN A. HAGEMAN (“ Hageman ”).

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

      WHEREAS , Hageman, as a condition of his employment, will make a substantial investment in Parent concurrently with the closing of the Transaction by purchasing 37,500 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 Hageman’s employment hereunder shall be for a period of two (2) years (the “Initial Term”) commencing on the closing of the Transaction (the “ Effective Date ”) and ending on the second 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 Hageman’s 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.

     Section 2. Terms of Employment .

          (a) Position . During the term of Hageman’s employment, Hageman shall serve as Senior Vice President and Chief Legal Officer and Administrative Officer of the Company and perform such duties and responsibilities customary to such position.

          (b) Duties . During the term of Hageman’s employment, Hageman agrees to devote all of his business time to the business and affairs of the Company and to use Hageman’s reasonable best efforts to perform faithfully, effectively and efficiently his responsibilities and obligations hereunder. Notwithstanding the foregoing, nothing herein shall prohibit Hageman 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 Hageman’s responsibilities hereunder.

          (c) Compensation .

               (i)  Base Salary . During the term of Hageman’s employment, Hageman shall receive an initial annual base salary in an amount equal to $270,000 (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 Hageman’s consent, unless the reduction is related to a broader compensation reduction that is not limited to Hageman’s and does not exceed 10% of his Annual Base Salary.

               (ii)  Bonuses . For fiscal year 2005, Hageman 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 Company’s Board of Directors (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 Hageman 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 Hageman. In the event that the Company achieves target based on actual performance, Hageman shall be entitled to receive a Bonus in an amount equal to 70 percent of the Annual Base Salary. Hageman will be entitled to receive the Bonus only upon the Company’s achievement of the specified performance objectives and if Hageman 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 Hageman’s employment is terminated: (A) by the Company without Cause; or (B) by Hageman for Good Reason, Hageman 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 Hageman’s Annual Base Salary and bonus target retroactively to the Effective Date.

               (iv) Benefits . During the term of Hageman’s 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 Hageman shall be in the aggregate equal to those benefits that Hageman 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 Hageman after such modification shall not be less than the aggregate value of the benefits provided to him prior to the modification. B

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

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

               (vii)  Stock Options . Concurrent with the closing of the Transaction, Parent shall grant Hageman stock options (the “ Executive Options ”) to purchase 73,000 shares of common stock of the Parent at an exercise price of $10 per share pursuant to the terms and conditions set forth in the Parent’s 2005 Stock Incentive Plan (the “ Stock Incentive Plan ”). The Executive Options shall be subject to the terms of the Stock Incentive Plan and Hageman’s Non-Qualified Stock Option Agreement.

               (viii)  Restricted Stock. Concurrent with the closing of the Transaction, the Parent shall grant Hageman 8,000 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 Hageman’s Restricted Stock Agreement.

               (ix)  Investment . Concurrent with the closing of the Transaction, Hageman shall purchase 37,500 shares of common stock of the Parent, par value $0.01, at a price of $10 per share.

     Section 3. Termination of Employment .

          (a) Death or Disability . Hageman’s employment shall terminate automatically upon Hageman’s death. If Hageman becomes subject to a Disability during the Term of Employment (pursuant to the definition of Disability set forth below), the Company may give Hageman written notice in accordance with Sections 3(e) and 10(h) of its intention to terminate Hageman’s employment. For purposes of this Agreement, “ Disability ” means (i) Hageman’s 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

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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 . Hageman’s 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) a willful commission of a material act of dishonesty involving the Company; (iii) a material non-curable breach of Hageman’s obligations hereunder or any other agreement entered into between Hageman and the Company or any of its subsidiaries or affiliates; (iv) any material breach of the Company’s policies or procedures that is not reasonably curable in the Company’s sole discretion; (v) any other willful misconduct which causes material harm to the Company or its business reputation, including due to any adverse publicity; (vi) a failure by Hageman to cure a material breach of his obligations under this Agreement, the Investor Rights Agreement among the shareholders of Parent, the Subscription Agreement between Hageman and Parent or the Non-Qualified Stock Option Agreement between Hageman and Parent within 30 days after written notice of such breach; or (vii) a material breach of any of Hageman’s representations contained in this Agreement.

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

          (d) Good Reason . Hageman’s employment may be terminated at any time by Hageman 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 Hageman’s consent: (i) a reduction in Hageman’s 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 Hageman’s responsibilities as Senior Vice President and Chief Legal and Administrative Officer; (iii) relocation of Hageman’s primary work place, as assigned to him by the Company, beyond a fifty (50) mile radius from 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 Hageman 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 Hageman 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 Hageman’s 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 Hageman or the Company to set forth in the Notice

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of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of Hageman or the Company hereunder or preclude Hageman or the Company from asserting such fact or circumstance in enforcing Hageman’s or the Company’s rights hereunder.

          (f) Date of Termination . “Date of Termination” means (i) if Hageman’s employment is terminated by the Company for Cause, without Cause or by reason of Disability, or by Hageman 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 Hageman’s 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, Disability or Upon the Company’s Election Not to Renew the Employment Period . If during the Employment Period, the Company shall terminate Hageman’s employment other than for Cause, Hageman shall terminate his employment for Good Reason, the termination of Hageman’s employment in any case is not due to his death or Disability or upon the Company’s election not to renew the Employment Period, then the Company will provide Hageman with the following severance payments and/or benefits:

               (i) The Company shall pay to Hageman 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 Hageman 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, in its sole discretion, either (a) continue to pay Hageman his Annual Base Salary until the earlier of (i) the end of the eighteenth month following the Date of Termination (the “ Severance Period ”), and (ii) the date, if any, Hageman violates the terms of this Agreement ; or (b) a lump sum equal to eighteen months of Hageman’s Annual Base Salary; provided, however, that in the event that such payment is made in a lump sum and Hageman subsequently violates the terms of this Agreement, in addition to any other remedy that the Company may have at law or in equity, Hageman shall immediately return such payment.

               (iii) The Company will pay Hageman 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 on or before March 15 of the year immediately following the end of the year to which such bonus relates.

               (iv) After the Date of Termination, provided Hageman elects to continue his and his beneficiaries’ participation in the Company’s medical benefit plan in which they participated prior to the Date of Termination pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”), the Company will reimburse Hageman for the monthly cost of continuing such coverage within 10 business days of each payment by Hageman for the

lesser of: (x) eighteen months following the Date of Termination; and (y) the period preceding the date that Hageman becomes eligible to receive medical coverage under another employee benefit p