Preview | Agreement and Plan of Merger |

TABLE OF CONTENTS


			Page
ARTICLE I THE MERGER				2
	1.1	The Merger		2
	1.2	Closing; Effective Time		2
	1.3	Effects of the Merger		2
	1.4	Certificate of Incorporation and Bylaws		2
	1.5	Directors and Officers of the Surviving Corporation		2
	1.6	MUSA Stockholders Meeting		2
	1.7	Additional Actions		4

ARTICLE II CONVERSION OF SECURITIES				4
	2.1	Effect on Capital Stock		4
	2.2	Surrender and Payment		5
	2.3	Treatment of Stock Options; Deferred Stock; Warrants		7
	2.4	Adjustments to Prevent Dilution		9

ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB				9
	3.1	Organization and Standing		9
	3.2	Corporate Power and Authority		9
	3.3	Conflicts; Consents and Approvals		10
	3.4	Brokerage and Finders’ Fees		11
	3.5	Information Supplied		11
	3.6	Financing		11
	3.7	Capitalization of Merger Sub		12
	3.8	Section 203 of the DGCL		12
	3.9	Solvency		12

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF MUSA				12
	4.1	Organization and Standing		13
	4.2	Subsidiaries		13
	4.3	Corporate Power and Authority		13
	4.4	Capitalization of MUSA		14
	4.5	Conflicts; Consents and Approvals		15
	4.6	Brokerage and Finders’ Fees; Expenses		15
	4.7	MUSA SEC Documents		16
	4.8	Undisclosed Liabilities		17
	4.9	Disclosure Documents		17
	4.10	Compliance with Law		18
	4.11	Litigation		18
	4.12	Absence of Certain Changes or Events		18
	4.13	Taxes		19
	4.14	Intellectual Property		20
	4.15	Employee Benefit Plans		21


			Page
	4.16	Contracts; Indebtedness		24
	4.17	Labor Matters		26
	4.18	Customer/Supplier Relationships		26
	4.19	Environmental Matters		27
	4.20	Insurance		28
	4.21	Properties and Assets		28
	4.22	Real Property		29
	4.23	Inventory		29
	4.24	Accounts Receivable		30
	4.25	Books and Records		30
	4.26	Related Party Transactions		30
	4.27	Opinion of Jefferies & Co. Inc		30
	4.28	Board Recommendation; Required Vote		30
	4.29	Section 203 of the DGCL		31

ARTICLE V COVENANTS OF THE PARTIES				31
	5.1	Mutual Covenants		31
	5.2	Covenants of Parent		33
	5.3	Covenants of MUSA		36

ARTICLE VI CONDITIONS TO THE MERGER				45
	6.1	Conditions to the Obligations of Each Party		45
	6.2	Conditions to Obligations of Parent and Merger Sub		46
	6.3	Conditions to Obligation of MUSA		48

ARTICLE VII TERMINATION; FEES AND EXPENSES				48
	7.1	Termination by Mutual Consent		48
	7.2	Termination by Either Parent or MUSA		48
	7.3	Termination by MUSA		49
	7.4	Termination by Parent		49
	7.5	Effect of Termination and Abandonment		49
	7.6	Fees and Expenses		49

ARTICLE VIII MISCELLANEOUS				51
	8.1	Non-Survival of Representations and Warranties		51
	8.2	Notices		52
	8.3	Interpretation		53
	8.4	Counterparts		53
	8.5	Entire Agreement		53
	8.6	Third-Party Beneficiaries		53
	8.7	Governing Law		53
	8.8	Consent to Jurisdiction; Venue; Jury Trial		54
	8.9	Assignment		54
	8.10	Amendment		55
	8.11	Extension; Waiver		55
	8.12	No Presumption Against Drafter		55
	8.13	Severability		55

INDEX OF DEFINED TERMS


Defined Term		Section
2002 Plan		2.3(a)
Acquisition Proposal		5.3(b)(ix)(A)
Action		4.11
Agreement		Preamble
Applicable Laws		1.6(a)
Appraisal Shares		2.1(d)
Board		Recitals
Certificate		2.1(b)
Certificate of Merger		1.2
Change in the MUSA Board Recommendation		5.3(b)(iv)
Closing		1.2
Closing Date		1.2
Code		2.2(g)
Commission		1.6(b)
Committee		2.3(a)
Confidentiality Agreement		5.3(b)(iii)
Controlled Group Liability		4.15(a)(i)
Costs		4.15(a)(i)
Covered Proposal		7.6(a)(i)
Debt Financing		3.6
Debt Financing Agreement		3.6
Delaware Secretary of State		1.2
DGCL		1.1
Effective Time		1.2
Employment Agreement		Recitals
Encumbrance		3.3(b)
Environmental Law		4.19
Environmental Permit		4.19
Equity Financing		3.6
Equity Financing Letter		3.6
ERISA		4.15(a)(ii)
ERISA Affiliate		4.15(a)(iii)
Exchange Act		1.6(b)
Exchange Fund		2.2(a)
Expenses		7.6(b)(iv)
Financing		3.6
Financing Agreements		3.6
Foreign Antitrust Laws		3.3(d)
Foreign Antitrust Laws		3.3(d)(i)
GAAP		4.7(a)
Governmental Authority		3.3(d)
Hazardous Material		4.19
HSR Act		3.3(d)(i)

iii


Defined Term		Section
Indemnified Directors and Officers		5.2(a)(i)
Insurance Amount		5.2(a)(ii)
Intellectual Property Right		4.14(a) (i)
Key MUSA Individuals		5.3(a)(viii)
Lease Agreement		4.22
Leased Real Property		4.22
Loan Agreement		5.1(f)(i)
Material Adverse Effect		8.3
Material Contracts		4.16(a)
Merger		Recitals
Merger Consideration		2.1(b)
Merger Sub		Preamble
Multiemployer Plan		4.15(f)
Multiple Employer Plan		4.15(f)
MUSA		Preamble
MUSA Board Recommendation		4.28
MUSA Bylaws		1.6(a)
MUSA Certificate		1.6(a)
MUSA Common Stock		Recitals
MUSA Deferred Stock Right		2.3(b)
MUSA Disclosure Documents		1.6(b)
MUSA Disclosure Schedule		4.2
MUSA Intellectual Property Right		4.14(a) (ii)
MUSA Option		2.3(a)
MUSA Permits		4.10
MUSA SEC Documents		4.7(a)
MUSA Stockholders		1.6(a)
MUSA Stockholders Meeting		1.6(a)
MUSA Warrants		2.3(d)
Note		5.1(f)(ii)
Owned Real Property		4.22
Parent		Preamble
Parent Disclosure Documents		5.2(c)
Paying Agent		2.2(a)
Paying Party		7.6(d)
Permitted Encumbrances		4.22
Person		5.3(b)(i)
Plans		4.15(a)(iv)
Proxy Statement		1.6(b)
Qualified Plan		4.15(c)
RCRA		4.19
Real Property		4.22
Required Amounts		3.6
Receiving Party		7.6(d)
Release		4.19
Representatives		5.3(b)(i)

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger (this “Agreement”) is made and entered into as of the 18th day of May, 2005, by and among Flag Holdings Corporation, a Delaware corporation (“Parent”), Flag Acquisition Corporation, a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), and Metals USA, Inc., a Delaware corporation (“MUSA”).

RECITALS

WHEREAS, Parent, Merger Sub and MUSA desire that Parent acquire all of the capital stock of MUSA through the merger of Merger Sub with and into MUSA, with MUSA as the surviving corporation (the “Merger”), pursuant to which each share of Common Stock of MUSA, par value $.01 per share (“MUSA Common Stock”), issued and outstanding at the Effective Time, excluding shares of MUSA Common Stock owned by Parent, Merger Sub or MUSA (or any of their respective direct or indirect wholly owned subsidiaries) and other than the Appraisal Shares, will be converted into the right to receive the Merger Consideration, all as more fully provided in this Agreement; and

WHEREAS, concurrently with the execution of this Agreement, as a condition and inducement to Parent’s and Merger Sub’s willingness to enter into this Agreement, Parent and certain MUSA Stockholders are entering into a Support Agreement, of even date herewith, in respect of shares of MUSA Common Stock beneficially owned by such stockholders (the “Support Agreement”); and

WHEREAS, concurrently with the execution of this Agreement, as a condition and inducement to Parent’s and Merger Sub’s willingness to enter into this Agreement, Merger Sub and Lourenco Goncalves are entering into an employment agreement, of even date herewith (the “Employment Agreement”); and

WHEREAS, it is Parent’s current expectation that one or more members of the management of MUSA will have equity interests in Parent or the Surviving Corporation from and after the consummation of the Merger; and

WHEREAS, the board of directors (the “Board”) of each of Merger Sub and MUSA has determined that the Merger, upon the terms and subject to the conditions set forth in this Agreement, is advisable, fair to and in the best interests of their respective stockholders; and

WHEREAS, Parent, Merger Sub and MUSA desire to make those representations, warranties, covenants and agreements specified herein in connection with this Agreement.

NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein, Parent, Merger Sub and MUSA agree as follows:

ARTICLE I

THE MERGER

1.1 The Merger. Upon the terms and subject to the conditions of this Agreement, and in accordance with the provisions of the Delaware General Corporation Law (the “DGCL”), Merger Sub shall be merged with and into MUSA at the Effective Time. As a result of the Merger, the separate corporate existence of Merger Sub shall cease and MUSA shall continue its existence as a wholly owned subsidiary of Parent under the laws of the State of Delaware. MUSA, in its capacity as the corporation surviving the Merger, is hereinafter sometimes referred to as the “Surviving Corporation.”

1.2 Closing; Effective Time. A closing (the “Closing”) shall be held at the offices of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, NY 10019, or such other place as the parties hereto may agree, as soon as practicable but no later than the second business day following the

End of Preview

Home Intelligence Services Subscriptions News About Us


Defined Term		Section
Section 262		2.1(b)
Securities Act		4.4(c)
subsidiary		8.3
Superior Proposal		5.3(b)(ix)(B)
Superior Proposal Notice		5.3(b)(iii)
Support Agreement		Recitals
Surviving Corporation		1.1
Tax Returns		4.13(b)
Taxes		4.13(c)
Termination Date		7.2(a)
Termination Fee		7.6(a)
Transaction Fees		4.6
Transaction Statement		5.2(c)
Transfers		5.3(a)(ii)
Waiting Period		5.3(b)(iii)
Warrant Agreement		2.3(d)