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)

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)

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)

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 Parents and Merger Subs 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 Parents and Merger Subs 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 Parents 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 date upon which all conditions set forth in Article VI (other than those conditions that by their nature are to be satisfied or waived at the Closing, but subject to the satisfaction or waiver of those conditions) are satisfied or waived, or at such other date as Parent and MUSA may agree (such date, the Closing Date). As promptly as possible on the Closing Date, the parties hereto shall cause the filing with the Secretary of State of the State of Delaware (the Delaware Secretary of State) of a certificate of merger (the Certificate of Merger) in such form as is required by and executed in accordance with Section 251 of the DGCL. The Merger shall become effective when the Certificate of Merger has been filed with the Delaware Secretary of State or at such later time as shall be agreed upon by Parent and MUSA and specified in the Certificate of Merger (the Effective Time).