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INCREMENTAL TRANCHE A ASSUMPTION AGREEMENT

Security Agreement

INCREMENTAL TRANCHE A ASSUMPTION  
   AGREEMENT | Document Parties: FLAG INTERMEDIATE HOLDINGS CORP | METALS USA, INC You are currently viewing:
This Security Agreement involves

FLAG INTERMEDIATE HOLDINGS CORP | METALS USA, INC

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Title: INCREMENTAL TRANCHE A ASSUMPTION AGREEMENT
Governing Law: New York     Date: 7/9/2008

INCREMENTAL TRANCHE A ASSUMPTION  
   AGREEMENT, Parties: flag intermediate holdings corp , metals usa  inc
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Execution Copy

                                                                                                                                                                     INCREMENTAL TRANCHE A ASSUMPTION
  AGREEMENT dated as of July 1, 2008 (this “ Agreement ”) among
FLAG INTERMEDIATE HOLDINGS CORPORATION, a
Delaware corporation (“ Holdings ”), METALS USA, INC., a
Delaware corporation (“ Parent ”), certain subsidiaries of Parent
listed on Annex I hereto (together with Parent, the “ Borrowers ”),
the lenders executing this Agreement as Incremental Tranche A
Lenders (the “ Incremental Tranche A Lenders ”), CREDIT
SUISSE as administrative agent (in such capacity, the
Administrative Agent ”) for the Lenders (as defined in the Credit
Agreement referred to below), and BANK OF AMERICA, N.A. as
collateral agent (in such capacity, the “ Collateral Agent ”) for the
Lenders.      

      A. Reference is made to the Loan and Security Agreement dated as of November 30, 2005, as amended by Amendment No. 1 dated as of July 18, 2006 and Amendment No. 2 dated as of June 8, 2007 (as so amended, the “ Credit Agreement ”), among Holdings, the Borrowers, the Lenders party thereto, the Administrative Agent and the Collateral Agent.

      B. Pursuant to Section 2.5 of the Credit Agreement, Parent has requested that the Incremental Tranche A Lenders provide the Borrowers with Incremental Tranche A Commitments in an aggregate amount of $100,000,000.

      C. The Incremental Tranche A Lenders are willing to provide the Borrowers with such Incremental Tranche A Commitments on the Effective Date (as defined below), on the terms and subject to the conditions set forth herein and in the Credit Agreement, and each Incremental Tranche A Lender that is not already a Lender under the Credit Agreement on the date hereof (each such Lender, a “ New Incremental Tranche A Lender ”) has agreed to become a party to the Credit Agreement and to assume the rights and obligations of a Lender thereunder.

      D. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Credit Agreement.

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

      SECTION 1. Incremental Tranche A Commitments . (a) Each Incremental Tranche A Lender that is a Tranche A Lender immediately prior to the Effective Date hereby agrees, effective as of the Effective Date, that such Incremental Tranche A Lender’s Tranche A Commitment immediately prior to the Effective Date shall be increased by the amount set forth next to such Incremental Tranche A Lender’s name on Schedule I hereto.


 

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      (b) Each New Incremental Tranche A Lender hereby agrees, effective as of the Effective Date, (i) to become a party to the Credit Agreement with the result that such New Incremental Tranche A Lender shall have the rights and obligations of a Lender thereunder and (ii) that such New Incremental Tranche A Lender’s Tranche A Commitment shall be the amount set forth next to such New Incremental Tranche A Lender’s name on Schedule I hereto.

      (c) All such Incremental Tranche A Commitments shall constitute “Tranche A Commitments” and all Incremental Tranche A Lenders shall constitute “Lenders” and “Tranche A Lenders”, in each case for all purposes of the Credit Agreement and the other Loan Documents.

      (d) Each of the parties hereto hereby agrees that the Administrative Agent may, in consultation with Parent, take any and all actions as may be reasonably necessary to ensure that the outstanding Tranche A Revolving Loans (if any) are held by the Tranche A Lenders in accordance with their respective Tranche A Pro Rata Shares after giving effect to the effectiveness of this Agreement. This may be accomplished by requiring each outstanding LIBOR Rate Tranche A Revolving Loan to be converted into or prepaid with the proceeds of Base Rate Tranche A Revolving Loans, subject to Section 5.4 of the Credit Agreement, but otherwise without premium or penalty.

SECTION 2. Conditions Precedent to Incremental Tranche A Commitments.

The obligations of the Incremental Tranche A Lenders to provide Incremental Tranche A Commitments on the Effective Date shall be subject to the satisfaction or waiver of the following conditions precedent:

      (a) On the Effective Date, each of the conditions set forth in Section 10.2 of the Credit Agreement shall be satisfied and the Administrative Agent shall have received a certificate to that effect dated as of the Effective Date and signed by a Responsible Officer of each Borrower.

      (b) The Administrative Agent shall have received such legal opinions, board resolutions and other closing certificates and documentation as shall be reasonably requested by the Administrative Agent, in each case consistent with those delivered on the Closing Date under Section 10.1 of the Credit Agreement.

      (c) All fees and expenses due and payable to the Administrative Agent or any Incremental Tranche A Lender on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrowers hereunder or under any other Loan Document shall have been paid.

      SECTION 3. Representations and Warranties; Agreements of Incremental Tranche A Lenders . (a) To induce the other parties hereto to enter into this Agreement, Holdings and each Borrower represents and warrants to each of the Incremental Tranche A Lenders, the Administrative Agent and the Collateral Agent that, after giving effect to this Agreement, (i) the representations and warranties set forth in Article 8 of the Credit


 

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Agreement are true and correct in all material respects on and as of the date hereof, except to the extent such representations and warranties expressly relate to an earlier date; and (ii) no Default or Event of Default has occurred and is continuing.

      (b) Each Incremental Tranche A Lender that is a Tranche A Lender under the Credit Agreement immediately prior to the Effective Date represents and warrants that it has the full power and authority, and has taken all actions necessary, to execute and deliver this Agreement. Each New Incremental Tranche A Lender (i) represents and warrants that it has full power and authority, and has taken all action necessary, to execute and deliver this Agreement and to become a Lender under th


 
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