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If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

^* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


CUSIP No. 589354109					Page 2 of 7

	1.	Name of Reporting Person: Allied Capital Corporation			I.R.S. Identification Nos. of above persons (entities only): 52-1081052

	2.	Check the Appropriate Box if a Member of a Group (See Instructions):
		(a)	o
		(b)	o

	3.	SEC Use Only:

	4.	Source of Funds (See Instructions): WC

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): o

	6.	Citizenship or Place of Organization: Maryland

Number of Shares Beneficially Owned by Each Reporting Person With
			7.	Sole Voting Power: 226,407

			8.	Shared Voting Power: 0

			9.	Sole Dispositive Power: 226,407

			10.	Shared Dispositive Power: 0

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person: 226,407

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): o

	13.	Percent of Class Represented by Amount in Row (11): 6.4%

	14.	Type of Reporting Person (See Instructions):

This statement relates to the shares of common stock, par value $0.01 per share, of Mercury Air Group, Inc., a Delaware corporation (“Mercury Air”), with its principal executive offices located at 5456 McConnell Avenue, Los Angeles, California 90066.

This statement is hereby being filed by Allied Capital Corporation (“Allied Capital”). Allied Capital is a Maryland corporation with its principal executive offices located at 1919 Pennsylvania Avenue, N.W., Washington, DC 20006.

Allied Capital is an internally managed closed-end management investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940.

Certain information with respect to the directors and executive officers of Allied Capital is set forth in Exhibit 99.1 attached hereto, including each director’s and each executive officer’s business address, present principal occupation or employment, citizenship and other information.

Allied Capital nor, to the best of its knowledge, any director, executive officer or controlling person of Allied Capital has, during the last five years, been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (b) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which proceeding Allied Capital or any director, executive officer or controlling person of Allied Capital was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, or finding any violation with respect to federal or state securities laws.

On October 28, 2003, Allied Capital purchased $24 million in subordinated debt and warrants of Mercury Air from J. H. Whitney Mezzanine Fund, L.P., a private lender. The warrants entitle Allied Capital to purchase 226,407 shares of Mercury Air’s common stock at $6.10 per share (such warrants sometimes being referred to herein as the “Warrants”). Allied Capital used monies from its working capital to purchase such subordinated debt and the Warrants.

Allied Capital acquired the $24 million of subordinated debt of Mercury Air and the Warrants in the ordinary course of its business of seeking to achieve its investment objectives and in accordance with its investment policies and restrictions.

Concurrently with Allied Capital’s investment in Mercury Air, Allied Capital also signed a definitive purchase agreement to acquire Mercury Air Centers, Inc. (such acquisition sometimes being referred to herein as the “Acquisition”), a wholly owned subsidiary

of Mercury Air that provides fixed base operations at 19 airports throughout the United States. The total purchase price of the Acquisition is expected to be approximately $70 million in addition to the assumption of construction commitments, subject to certain adjustments. The closing of the Acquisition is subject to certain conditions, including the satisfactory completion of due diligence by Allied Capital and the approval of the Acquisition by the shareholders of Mercury Air. Upon completion of the Acquisition, Mercury Air will repay its $24 million subordinated debt obligation to Allied Capital.

Other than as described above, Allied Capital has no plans or proposals which would result in any action described in (a) through (j) of this Item 4.

(a)

Allied Capital has the right to acquire up to 226,407 shares of Mercury Air’s common stock upon the exercise of the Warrants.

(b)

Upon the exercise of the Warrants, Allied Capital would have sole power to vote, and sole power to dispose of 226,407 shares of Mercury Air’s common stock.

(d)

No other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Mercury Air’s common stock issuable upon exercise of the Warrants.

The percentage ownership of the shares of Mercury Air’s common stock owned by Allied Capital is based on the number of shares of Mercury Air’s common stock outstanding as of May 9, 2003, as disclosed by Mercury Air in its Form 10-Q for the quarter ended March 31, 2003 and as adjusted to take in to account a 1-for-2 reverse stock split effected by Mercury Air on June 18, 2003.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

In accordance with the terms of the Warrants and other related agreements, Allied Capital is entitled to the rights and subject to the obligations contained in (i) a Securities Purchase Agreement, dated September 10, 1999 (the “Purchase Agreement”), by and between Mercury Air and J. H. Whitney Mezzanine Fund, L.P., as amended, (ii) a Registration Rights Agreement, dated September 10, 1999 (the “Registration Rights Agreement”), by and between Mercury Air and J. H. Whitney Mezzanine Fund, L.P. and (iii) a Preemptive Rights Agreement, dated September 10, 1999 (the “Preemptive Rights Agreement”), by and between Mercury Air and J. H. Whitney Mezzanine Fund, L.P.

Pursuant to the Securities Purchase Agreement, J. H. Whitney Mezzanine Fund, L.P. purchased $24 million in subordinated debt and warrants to purchase shares of Mercury Air’s common stock from Mercury Air. Until the subordinated debt is paid in full by Mercury Air, the Securities Purchase Agreement obligates Mercury Air to take, and to refrain from taking, certain actions.

In connection with its purchase of the $24 million in subordinated debt and warrants to purchase shares of Mercury Air’s common stock, Mercury Air granted J. H. Whitney Mezzanine Fund, L.P. certain demand and piggyback registration rights with respect to the shares of common stock issued upon exercise of such warrants.

In addition, Mercury Air and J. H. Whitney Mezzanine Fund, L.P. entered into the Preemptive Rights Agreement pursuant to which Mercury Air agreed to offer to sell shares of its capital stock to J. H. Whitney Mezzanine Fund, L.P. prior to offering to sell such shares to third-parties.

On October 28, 2003, J. H. Whitney Mezzanine Fund, L.P. sold such subordinated debt and Warrants to Allied Capital. As a result, J. H. Whitney Mezzanine Fund L.P. assigned its rights and obligation under the Securities Purchase Agreement, the Registration Rights Agreement and the Preemptive Rights Agreement to Allied Capital.

Also, in connection with the Acquisition, all of the directors and executive officers of Mercury Air have entered into a voting undertaking with Allied Capital pursuant to which they have agreed to vote all shares of common stock of Mercury Air that they beneficially own for the approval of the Acquisition.


Exhibit No.		Description

Exhibit 2.1		Stock Purchase Agreement, dated October 28, 2003, by and among Allied Capital Corporation, Mercury Air Centers, Inc. and Mercury Air Group, Inc. (Incorporated by reference to Exhibit 2.1 filed with Mercury Air Group, Inc.’s Form 8-K filed on October 30, 2003.)

Exhibit 10.1		Amendment No. 4 to Securities Purchase Agreement by and between Mercury Air Group, Inc. and Allied Capital Corporation, as Assignee of J. H. Whitney Mezzanine Fund, L.P. dated as of October 28, 2003. (Incorporated by reference to Exhibit 10.1 filed with Mercury Air Group, Inc.’s Form 8-K filed on October 30, 2003.)

Exhibit 10.2		Assignment of Note dated as of October 28, 2003 between Allied Capital Corporation and J. H. Whitney Mezzanine Fund, L.P. (Incorporated by reference to Exhibit 10.2 filed with Mercury Air Group, Inc.’s Form 8-K filed on October 30, 2003.)

Exhibit 10.3		Second Amended and Restated Allied Capital Corporation 12% Senior Subordinated Promissory Note dated October 28, 2003. (Incorporated by reference to Exhibit 10.3 filed with Mercury Air Group, Inc.’s Form 8-K filed on October 30, 2003.)


Exhibit No.		Description

Exhibit 10.4		Second Amended and Restated Allied Capital Corporation Warrant dated October 28, 2003. (Incorporated by reference to Exhibit 10.4 filed with Mercury Air Group, Inc.’s Form 8-K filed on October 30, 2003.)

Exhibit 10.5		Securities Purchase Agreement dated as of October 28, 2003 by and among J.H. Whitney Mezzanine Fund, L.P., J.H. Whitney Mezzanine Debt Fund, L.P., Allied Capital Corporation and Mercury Air Group, Inc. (Incorporated by reference to Exhibit 10.5 filed with Mercury Air Group, Inc.’s Form 8-K filed on October 30, 2003.)

Exhibit 10.6*		Registration Rights Agreement, dated September 10, 1999, by and between Mercury Air Group, Inc. and J. H. Whitney Mezzanine Fund, L.P.

Exhibit 10.7*		Preemptive Rights Agreement, dated September 10, 1999, by and between Mercury Air Group, Inc. and J. H. Whitney Mezzanine Fund, L.P.

Exhibit 10.8		Securities Purchase Agreement, dated September 10, 1999, by and among Mercury Air Group, Inc. and J.H. Whitney Mezzanine Fund, L.P. (Incorporated by reference to Exhibit 10.33 filed with Mercury Air Group, Inc.’s Annual Report on Form 10-K for the year ended June 30, 1999.)

Exhibit 10.9		Amendment No. 1 to the Securities Purchase Agreement, dated as of September 30, 2000, by and between J.H. Whitney Mezzanine, L.P. and Mercury Air Group, Inc. (Incorporated by reference to Exhibit 4.6 filed with Mercury Air Group, Inc.’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2000.)

Exhibit 10.10		Amendment No. 2 to Securities Purchase Agreement, dated as of September 30, 2001, by and between Mercury Air Group, Inc. and J.H. Whitney Mezzanine, L.P. (Incorporated by reference to Exhibit 4.7 filed with Mercury Air Group, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.)

Exhibit 10.11		Amendment No. 3 to Securities Purchase Agreement, dated as of December 30, 2002, by and between Mercury Air Group, Inc. and J.H. Whitney Mezzanine, L.P. (Incorporated by reference to Exhibit 10.2 filed with Mercury Air Group, Inc.’s Form 8-K filed on January 28, 2003.)

Exhibit 10.12*		Form of Voting Undertaking

Exhibit 10.13*		Assignment and Assumption Agreement, dated October 28, 2003, by and among Allied Capital Corporation, J.H.Whitney Mezzanine Fund, L.P. and J.H. Whitney Mezzanine Debt Fund.

Exhibit 99.1*		Directors and Executive Officers of Allied Capital Corporation.

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

AGREEMENT (this “Agreement”), dated as of September 10, 1999, by and between MERCURY AIR GROUP, INC. (the “Company”), a New York corporation, and J. H. WHITNEY MEZZANINE FUND, L.P. (“WMF”), a Delaware limited partnership.

WHEREAS, pursuant to the terms of the Securities Purchase Agreement (the “Purchase Agreement”), dated as of the date hereof, by and between the Company and WMF, WMF will purchase from the Company (a) a Senior Subordinated Promissory Note (the “WMF Note”) of the Company in the principal amount of $24,000,000 and (b) a warrant (the “WMF Warrant”) to purchase an aggregate of 503,126 shares of common stock, par value $ .01 per share of the Company (the “Common Stock”); and

WHEREAS, the Company and the other parties hereto desire to provide for the circumstances under which the Company will register securities of the Company on behalf of such other parties.

NOW, THEREFORE, as an inducement to WMF to consummate the transactions contemplated by the Purchase Agreement and in consideration of the premises and of the mutual covenants and obligations hereinafter set forth, the Company hereby covenants and agrees with the other parties hereto, and with each subsequent holder of Restricted Securities (as such term is defined herein), as follows:

SECTION 1. Definitions. As used herein, the following terms shall have the following respective meanings:

“Certificate of Incorporation” shall mean the Certificate of Incorporation of the Company, as amended, in effect on the date hereof.

“Commission” shall mean the Securities and Exchange Commission, or any other Federal agency at the time administering the Securities Act.

“Public Offering” shall mean the sale by the Company or any other person or entity of equity securities of the Company pursuant to a registration statement on Form S-1, S-2 or S-3 or otherwise under the Securities Act.

“Institutional Investors” shall mean WMF and its successors and assigns.

“Registration Expenses” shall mean the expenses so described in Section 7 hereof.

“Restricted Securities” shall mean the Note, the Warrant and the Restricted Stock, for so long as the instruments or certificates evidencing such securities shall be required to bear the legend set forth in Section 2 hereof.

“Restricted Stock” shall mean the shares of Common Stock underlying the Warrant, the certificates for which are required to bear the legend set forth in Section 2 hereof.

“Securities Act” shall mean the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

“Selling Expenses” shall mean the expenses so described in Section 7 hereof.

“Threshold Amount” shall mean that number of Institutional Investors holding at least 75% of the Restricted Stock then held by all Institutional Investors.

“WMF Note” shall have the meaning ascribed to such term in the first Whereas clause.

SECTION 2. Restrictive Legend. The WMF Note and each certificate representing the Restricted Securities and, except as otherwise provided in Section 3 hereof, each certificate issued upon exchange or transfer of any such securities shall be stamped or otherwise imprinted with a legend substantially in the following form:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR UNDER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.”

SECTION 3. Notice of Proposed Transfer. Prior to any proposed transfer of any Restricted Securities (other than under the circumstances described in Section 4 or 5 hereof), the holder thereof shall give written notice to the Company of its intention to effect such transfer. Each such notice shall describe the manner of the proposed transfer and, if requested by the Company, shall be accompanied by an opinion of counsel reasonably satisfactory to the Company to the effect

that the proposed transfer may be effected without registration under the Securities Act, whereupon such holder shall be entitled to transfer such securities in accordance with the terms of its notice; provided, however, that no such opinion of counsel shall be required for a transfer by a holder of Restricted Securities which is a partnership to a partner or employee of such holder or a retired partner or retired employee of such holder who retires after the date hereof, or to the estate of any such partner, retired partner, employee or retired employee, or a transfer by gift, will or intestate succession from any holder of Restricted Securities to his or her spouse or members of his or her or his or her spouse’s family or a trust for the benefit of any of the foregoing persons, if the transferee agrees in writing to be subject to the terms hereof to the same extent as if such transferee were an original holder of Restricted Securities hereunder. All Restricted Securities transferred as above provided shall bear the legend set forth in Section 2, except that such securities shall not bear such legend if (i) such transfer is in accordance with the provisions of Rule 144 of the Securities Act (or any other rule permitting public sale without registration under the Securities Act) or (ii) the opinion of counsel referred to above is to the further effect that the transferee and any subsequent transferee (other than an affiliate of the Company) would be entitled to transfer such securities in a public sale without registration under the Securities Act.

(a) At any time beginning six (6) months following the date hereof, a Threshold Amount of Institutional Investors may, by written notice, request that the Company register under the Securities Act all or any portion of the shares of Restricted Stock held by such requesting holders for sale in the manner specified in such notice; provided, however, that the Company shall not be obligated to register Restricted Stock pursuant to such request: (i) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration when it was not then so qualified and had not filed such a consent; (ii) subject to Section 5(a) below, during the period beginning 30 days prior to the filing, and ending on a date 90 days following the effective date, of a registration statement filed by the Company relating to an underwritten offering only of the Company’s capital stock; or (iii) if counsel to the Company opines to the requesting Institutional Investors that the filing of such a registration statement would require the disclosure of material non-public information about the Company, the disclosure of which could have a material adverse effect on the business or financial condition of the Company, in which event no such registration statement shall be filed until the earlier of the lapse of 90 days from the issuance of the opinion of Company counsel or the issuance of a subsequent opinion that such information is no longer required to be disclosed, is not material or non-public, or its disclosure would not have a material adverse effect on the business or financial condition of the Company; provided, however, that the Company may not exercise its right under this clause (iii) more than once in any 12-month period. Notwithstanding anything to the contrary contained herein, no request may be made under this Section 4 within 360 days after the effective date of a registration statement filed by the Company covering a firm commitment underwritten public offering in which the holders of Restricted Stock shall have been

entitled to join pursuant to this Section 4 or Section 5 hereof and in which there shall have been effectively registered all shares of Restricted Stock as to which registration shall have been so requested (and which requests shall total at least twenty-five percent of the shares of Restricted Stock originally purchased by the Institutional Investors).

(b) Promptly following receipt of any notice under this Section 4, the Company shall immediately notify all other Institutional Investors from whom notice has not been received and shall file and use its best efforts to have declared effective a registration statement under the Securities Act for the public sale, in accordance with the method of disposition specified in such notice from requesting holders, of the number of shares of Restricted Stock specified in such notice (and in any notices received from other holders of Restricted Stock within 20 days after the date of such notice from the Company). If such method of disposition shall be an underwritten public offering, the Company may designate the managing underwriter of such offering, subject to the approval of the Institutional Investors participating in such registration who own a majority in interest of the Restricted Stock requested to be included in such registration by such Institutional Investors, which approval shall not be unreasonably withheld. The number of shares of Restricted Stock to be included in such an underwriting may be reduced (pro rata among all holders requesting, under this Section 4, to participate in such registration) if and to the extent that the managing underwriter shall be of the opinion that such inclusion would adversely affect the marketing of the securities to be sold therein. With respect to the preceding sentence, if the Company elects to reduce pro rata the amount of Restricted Stock proposed to be offered in the underwriting, for purposes of making any such reduction, each holder of Restricted Stock which is a partnership, together with the affiliates, partners, employees, retired partners and retired employees of such holder, the estates and family members of any such partners, employees, retired partners and retired employees and of their spouses, and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “person”, and any pro rata reduction with respect to such “person” shall be based upon the aggregate number of shares of Restricted Stock owned by all entities and individuals included as such “person,” as defined in this sentence (and the aggregate number so allocated to such “person” shall be allocated among the entities and individuals included in such “person” in such manner as such holder of Restricted Stock may reasonably determine). The Company shall be obligated to register Restricted Stock pursuant to requests made by a Threshold Amount of the Institutional Investors under this Section 4 on two occasions only; provided, however, that as to such occasion such obligation shall be deemed satisfied only when a registration statement covering all shares of Restricted Stock specified in notices received as aforesaid, for sale in accordance with the method of disposition specified by the requesting holders, shall have become effective and, if such method of disposition is a firm commitment underwritten public offering, all such shares shall have been sold pursuant thereto.

(c) The Company shall be entitled to include in any registration statement referred to in this Section 4 for which the method of distribution is an underwritten public offering, for sale in accordance with the method of disposition specified by the requesting holders, shares of Common Stock to be sold by the Company for its own account, except as and to the extent that, in the opinion of the managing underwriter (if such method of disposition shall be an

underwritten public offering), such inclusion would adversely affect the marketing of the Restricted Stock to be sold. Except as set forth in this Section 4, no securities shall be included in any registration statement referred to in this Section 4 without the prior written consent of the holders of a majority in interest of the Institutional Investors’ Restricted Stock requested to be included in such registration. Except with respect to registration statements on Form S-8 (or other forms not available for registering restricted stock for sale to the public), the Company will not file with the Commission any other registration statement with respect to its Common Stock, whether for its own account or that of other stockholders, from the date of receipt of a notice from requesting holders pursuant to this Section 4 until the completion of the period of distribution of the registration contemplated thereby.

(a) If the Company at any time (other than pursuant to Section 4 hereof) proposes to register any of its securities under the Securities Act for sale to the public, whether for its own account or for the account of other security holders or both (except with respect to registration statements on Form S-8 or another form not available for registering Restricted Stock for sale to the public), each such time it will give written notice to all holders of Restricted Stock of its intention to do so. Upon the written request of any such holder, given within 20 days after the date of any such notice, to register any of its Restricted Stock (which request shall state the intended method of disposition thereof), the Company will use its best efforts to cause the Restricted Stock as to which registration shall have been so requested to be included in the securities to be covered by the registration statement proposed to be filed by the Company, all to the extent requisite to permit the sale or other disposition by the holder (in accordance with its written request) of such Restricted Stock so registered. The Company may withdraw any such registration statement before it becomes effective or postpone the offering of securities contemplated by such registration statement without any obligation to the holders of any Restricted Stock. In the event that any registration pursuant to this Section 5 shall be, in whole or in part, an underwritten public offering of Common Stock, any request by a holder pursuant to this Section 5 to register Restricted Stock shall specify that either (i) such Restricted Stock is to be included in the underwriting on the same terms and conditions as the shares of Common Stock otherwise being sold through underwriters under such registration or (ii) such Restricted Stock is to be sold in the open market without any underwriting, on terms and conditions comparable to those normally applicable to offerings of common stock in reasonably similar circumstances. The number of shares of Restricted Stock to be included in such an underwriting may be reduced (pro rata among the requesting holders) if and to the extent that the managing underwriter shall be of the opinion that such inclusion would adversely affect the marketing of the securities to be sold by the Company therein; provided, however, that if any shares are to be included in such underwriting for the account of any person other than the Company, the number of shares to be included by any such person shall be reduced first; and provided further, however, that the number of any such shares held by any person other than the holders of Restricted Stock hereunder shall be reduced before the number of any such shares held

by the holders of Restricted Stock hereunder is reduced. With respect to the first proviso of the preceding sentence, if the Company elects to reduce pro rata the amount of Restricted Stock proposed to be offered in the underwriting for the accounts of all persons other than the Company, for purposes of making any such reduction, each holder of Restricted Stock which is a partnership, together with the affiliates, partners, employees, retired partners and retired employees of such holder, the estates and family members of any such partners, employees, retired partners and retired employees and of their spouses, and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “person,” and any pro rata reduction with respect to such “person” shall be based upon the aggregate number of shares of Restricted Stock owned by all entities and individuals included as such “person”, as defined in this sentence (and the aggregate number so allocated to such “person” shall be allocated among the entities and individuals included in such “person” in such manner as such holder of Restricted Stock may reasonably determine). Notwithstanding anything to the contrary contained in this Section 5, in the event that there is an underwritten offering of securities of the Company pursuant to a registration covering Restricted Stock and a selling holder of Restricted Stock does not elect to sell his, her or its Restricted Stock to the underwriters of the Company’s securities in connection with such offering, such holder shall refrain from selling such Restricted Stock not registered pursuant to this Section 5 during the period of distribution of the Company’s securities by such underwriters and the period in which the underwriting syndicate participates in the after market; provided, however, that such holder shall, in any event, be entitled to sell its Restricted Stock in connection with such registration commencing on the 60th day after the effective date of such registration statement.

(b) If, at a time when Form S-3 is available for such registration, the Company shall receive from any Institutional Investor a written request or requests that the Company effect a registration on Form S-3 of any of such holder’s Restricted Stock, the Company will promptly give written notice of the proposed registration to all other holders of Restricted Stock and, as soon as practicable, effect such registration and all such related qualifications and compliances as may be requested and as would permit or facilitate the sale and distribution of all Restricted Stock as are specified in such request and any written requests of other holders given within 20 days after receipt of such notice. The Company shall not be required to file a registration statement under Form S-3 if it would not be required to file a registration statement under Section 4 hereof pursuant to Section 4(a)(iii). The Company shall have no obligation to effect a registration under this Section 5(b) unless either (i) all the outstanding shares of Restricted Stock are requested to be sold pursuant to such registration or (ii) the aggregate offering price of the securities requested to be sold pursuant to such registration is, in the good faith judgment of the Company, expected to be equal to or greater than $1,000,000. Any registration under this Section 5(b) will not be counted as a registration under Section 4 above.

SECTION 6. Registration Procedures. If and whenever the Company is required by the provisions of Section 4 or 5 hereof to use its best efforts to effect the registration of any shares of Restricted Stock under the Securities Act, the Company will, as expeditiously as possible:

(a) prepare and file with the Commission a registration statement (which, in the case of an underwritten public offering pursuant to Section 4 hereof, shall be on Form S-1 or other form of general applicability satisfactory to the managing underwriter selected as therein provided) with respect to such securities and use its best efforts to cause such registration statement to become and remain effective for the period of the distribution contemplated thereby (determined as hereinafter provided);

(b) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for the period specified in Section 6 (a) above and as to comply with the provisions of the Securities Act with respect to the disposition of all Restricted Stock covered by such registration statement in accordance with the sellers’ intended method of disposition set forth in such registration statement for such period;

(c) furnish to each seller and to each underwriter such number of copies of the registration statement and the prospectus included therein (including each preliminary prospectus) as such persons may reasonably request in order to facilitate the public sale or other disposition of the Restricted Stock covered by such registration statement;

(d) use its best efforts to register or qualify the Restricted Stock covered by such registration statement under the securities or blue sky laws of such jurisdictions as the sellers of Restricted Stock or, in the case of an underwritten public offering, the managing underwriter shall reasonably request;

(e) immediately notify each seller under such registration statement and each underwriter, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus contained in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;

(f) use its best efforts to furnish, at the request of any seller, on the date that Restricted Stock is delivered to the underwriters for sale pursuant to such registration: (i) an opinion dated such date of counsel representing the Company for the purposes of such registration, addressed to the underwriters and to such seller, stating (A) that such registration statement has become effective under the Securities Act, (B) that, to the best knowledge of such counsel, no stop order suspending the effectiveness thereof has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Securities Act and (C) that the registration statement and the related prospectus, and each amendment or supplement thereof, comply as to form in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder (except that such counsel need not express any opinion as to financial statements contained therein), and to such other effects as may reasonably be requested by counsel for the underwriters or by such seller or its counsel, and (ii) a letter dated such

date from the independent public accountants retained by the Company, addressed to the underwriters and to such seller, stating that they are independent public accountants within the meaning of the Securities Act and that, in the opinion of such accountants, the financial statements of the Company included in the registration statement or the prospectus, or any amendment or supplement thereof, comply as to form in all material respects with the applicable accounting requirements of the Securities Act, and such letter shall additionally cover such other financial matters (including information as to the period ending no more than five business days prior to the date of such letter) with respect to the registration in respect of which such letter is being given as such underwriters or such seller may reasonably request; and

(g) make available for inspection by each seller, any underwriter participating in any distribution pursuant to such registration statement, and any attorney, accountant or other agent retained by such seller or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement.

For purposes of Sections 6(a) and (b) above and of Section 4(c) hereof, the period of distribution of Restricted Stock in a firm commitment underwritten public offering shall be deemed to extend until each underwriter has completed the distribution of all securities purchased by it, and the period of distribution of Restricted Stock in any other registration shall be deemed to extend until the earlier of the sale of all Restricted Stock covered thereby or nine months after the effective date thereof.

In connection with each registration hereunder, the selling holders of Restricted Stock will furnish to the Company in writing such information with respect to themselves and the proposed distribution by them as shall be necessary in order to assure compliance with Federal and applicable state securities laws.

In connection with each registration pursuant to Sections 4 and 5 hereof covering an underwritten public offering, the Company agrees to enter into a written agreement with the managing underwriter selected in the manner herein provided in such form and containing such provisions as are customary in the securities business for such an arrangement between major underwriters and companies of the Company’s size and investment stature, provided that such agreement shall not contain any such provision applicable to the Company which is inconsistent with the provisions hereof and provided, further, that the time and place of the closing under said agreement shall be as mutually agreed upon between the Company and such managing underwriter.

SECTION 7. Expenses. All expenses incurred by the Company in complying with Sections 4 and 5 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, fees of the National Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents and registrars and costs of insurance and fees and expenses of one counsel for the sellers of Restricted

Stock, but excluding any Selling Expenses, are herein called “Registration Expenses”. All underwriting discounts and selling commissions applicable to the sale of Restricted Stock are herein called “Selling Expenses.” The Company will pay all Registration Expenses in connection with each registration statement filed pursuant to Section 4 or 5 hereof. All Selling Expenses incurred in connection with any sale of Restricted Stock by any participating seller shall be borne by such participating seller, or by such persons other than the Company (except to the extent the Company shall be a seller) as they may agree.

SECTION 8. Indemnification. In the event of a registration of any of the Restricted Stock under the Securities Act pursuant to Section 4 or 5 hereof, the Company will indemnify and hold harmless each seller of such Restricted Stock thereunder and each underwriter of such Restricted Stock thereunder and each other person, if any, who controls such seller or underwriter within the meaning of the Securities Act, against any and all losses, claims, damages, expenses or liabilities, joint or several, to which such seller or underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such Restricted Stock was registered under the Securities Act pursuant to Section 4 or 5, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each such seller, each such underwriter and each such controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, expense or action; provided, however, that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such seller, such underwriter or such controlling person in writing specifically for use in such registration statement or prospectus.

In the event of a registration of any of the Restricted Stock under the Securities Act pursuant to Section 4 or 5 hereof, each seller of such Restricted Stock thereunder, severally and not jointly, will indemnify and hold harmless the Company and each person, if any, who controls the Company within the meaning of the Securities Act, each officer of the Company who signs the registration statement, each director of the Company, each underwriter and each person who controls any underwriter within the meaning of the Securities Act, against all losses, claims, damages, expenses or liabilities, joint or several, to which the Company or such officer or director or underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages, expenses or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement under which such Restricted Stock was registered under the Securities Act pursuant to Section 4 or 5, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the

statements therein not misleading, and will reimburse the Company and each such officer, director, underwriter and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that such seller will be liable hereunder in any such case if and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information pertaining to such seller, as such, furnished in writing to the Company by such seller specifically for use in such registration statement or prospectus; provided, further, however, that the liability of each seller hereunder shall be limited to the proportion of any such loss, claim, damage, liability or expense which is equal to the proportion that the public offering price of the shares sold by such seller under such registration statement bears to the total public offering price of all securities sold thereunder, but not to exceed the proceeds received by such seller from the sale of Restricted Stock covered by such registration statement. Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party under this Section 8. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 8 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided, however, that, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, the indemnified party shall have the right to select a separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred.

Notwithstanding the foregoing, any indemnified party shall have the right to retain its own counsel in any such action, but the fees and disbursements of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party shall have failed to retain counsel for the indemnified party as aforesaid, (ii) the indemnified party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the indemnifying party or that the interests of the indemnified party conflict with the interests of the indemnifying party, or (iii) the indemnifying party and such indemnified party shall have mutually agreed to the retention of such counsel. It is understood that the indemnifying party shall not, in connection with any action or related actions in the same

jurisdiction, be liable for the fees and disbursements of more than one separate firm qualified in such jurisdiction to act as counsel for the indemnified party. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. If the indemnification provided for in the first two paragraphs of this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under such paragraphs in respect of any losses, claims, damages or liabilities or actions referred to therein, then each indemnifying party shall in lieu of indemnifying such indemnified party contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or actions in such proportion as appropriate to reflect the relative fault of the Company, on the one hand, and the sellers of such Restricted Stock, on the other, in connection with the statement or omissions which resulted in such losses, claims, damages, liabilities or actions, as well as any other relevant equitable considerations including, without limitation, the failure to give any notice under the second paragraph of this Section 8. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, on the one hand, or by the sellers of such Restricted Stock, on the other hand, and to the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The Company and the sellers of Restricted Stock agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined by pro rata allocation (even if all of the sellers of Restricted Stock were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or action referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this and the immediately preceding paragraph, the sellers of such Restricted Stock shall not be required to contribute any amount in excess of the amount, if any, by which the total price at which the Common Stock sold by each of them was offered to the public exceeds the amount of any damages which they would have otherwise been required to pay by reason of such untrue or alleged untrue statement of omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who is not guilty of such fraudulent misrepresentation. The indemnification of underwriters provided for in this Section 8 shall be on such other terms and conditions as are at the time customary and reasonably required by such underwriters and the indemnification of the sellers of Restricted Stock in such underwriting shall, at the sellers’ request, be modified to conform to such terms and conditions. Upon the reasonable request of any stockholder selling Restricted Stock pursuant to a registration statement or any underwriter of such stock, the Company shall obtain, if reasonably available, an insurance policy covering the risks described above in this Section 8 in an amount and with a deductible reasonably requested by such seller or underwriter and naming such seller, any underwriter of such stock and any person

controlling such seller or underwriter as beneficiaries. The costs of obtaining and maintaining any such insurance shall be borne by the Company.

SECTION 9. Changes in Common Stock. If, and as often as, there are any changes in the Common Stock by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions hereof, as may be required, so that the rights and privileges granted by this Agreement shall continue with respect to the Common Stock as so changed.

SECTION 10. Representations and Warranties of the Company. The Company represents and warrants to each of the other parties hereto as follows (which representations and warranties shall survive the execution and delivery of this Agreement):

(a) The execution, delivery and performance of this Agreement by the Company have been duly authorized by all requisite corporate action and will not violate any provision of law, any order of any court or other agency of government, the Certificate of Incorporation or By-laws of the Company, or any provision of any indenture, agreement or other instrument to which it or any of its properties or assets is bound, or conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Company or any of its subsidiaries.

(b) This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable in accordance with its terms.

SECTION 11. Rule 144 Reporting. The Company agrees with each of the other parties hereto as follows:

(a) The Company shall at all times make and keep public information available as those terms are understood and defined in Rule 144 under the Securities Act.

(b) The Company shall at all times file with the Commission in a timely manner all reports and other documents as the Commission may prescribe under Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”).

(c) The Company shall furnish to each holder of Restricted Securities forthwith upon request (i) a written statement by the Company as to its compliance with the reporting requirements of Rule 144, and of the Securities Act and the Exchange Act, (ii) a copy of the most recent annual or quarterly report of the Company, and (iii) such other reports and documents so filed as such holder may reasonably request to avail itself of any rule or regulation of

the Commission allowing a holder of Restricted Securities to sell any such securities without registration.

(a) The obligations under Section 3 and the rights arising under Sections 4 and 5 shall terminate as to an Institutional Investor when (i) such Institutional Investor is no longer an “affiliate” as used in Rule 144 and (ii) such Institutional Investor is permitted to sell all Restricted Stock then held by it pursuant to Rule 144(k).

(b) All covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not. Without limiting the generality of the foregoing, the registration rights conferred herein on the holders of Restricted Securities shall inure to the benefit of any and all subsequent holders from time to time of the Restricted Securities for so long as the certificates representing the Restricted Securities shall be required to bear the legend specified in Section 2 hereof.

(c) All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, telecopier (with receipt confirmed), courier service or personal delivery:

or to such other address or addresses as shall have been furnished in writing to the other parties hereto. Each holder agrees, at all times, to provide the Company with an address for notices hereunder.

All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial overnight courier service; if mailed, five Business Days (as defined in the Purchase Agreement) after being deposited in the mail, postage prepaid; or if telecopied, when receipt is acknowledged.

(d) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF (INCLUDING GIVING EFFECT TO GOL SECTION 5-1401).

(e) (I) EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT SUCH COURTS ARE AN INCONVENIENT FORUM. EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR

CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN SECTION 12(C), SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING.

(II) THE COMPANY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, THE COMPANY HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE COMPANY (X) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF WMF HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT WMF WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (Y) ACKNOWLEDGES THAT WMF HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.

(f) This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and may not be modified or amended except in writing.

(g) Telefacsimile transmissions of any executed original document and/or retransmission of any executed telefacsimile transmission shall be deemed to be the same as the delivery of an executed original. At the request of any party hereto, the other parties hereto shall confirm telefacsimile transmissions by executing duplicate original documents and delivering the same to the requesting party or parties. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

(h) The Company (on the one hand) and the Institutional Investors (on the other hand) agree that any amendment to the Federal securities laws (and regulations promulgated thereunder (and related registration forms), and related state securities laws shall not affect the substantive registration requirements (and other obligations of the Company) set forth in this Agreement; and, following any such amendment, the Company shall continue to be required to cause the registration of Restricted Stock (and pay all Registration Expenses and provide indemnification) under the Federal securities laws, as amended, in a manner consistent to carry out the intent and purposes of (and on terms as similar as practicable as the terms set forth in) this Agreement.

(i) If any one or more of the provisions contained in this Agreement, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held

invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions of this Agreement. The parties hereto further agree to replace such invalid, illegal or unenforceable provision of this Agreement with a valid, legal and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid, illegal or unenforceable provision.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT] EX-10.7 4 w92016bexv10w7.htm EXHIBIT 10.7 exv10w7

AGREEMENT (this “Agreement”), dated as of September 10, 1999, by and between Mercury Air Group, Inc. (the “Company”), a New York corporation, and J. H. WHITNEY MEZZANINE FUND, L.P. (“WMF”), a Delaware limited partnership.

WHEREAS, pursuant to the terms of the Securities Purchase Agreement (the “Purchase Agreement”), dated as of the date hereof, by and between the Company and WMF has purchased from the Company a warrant (the “WMF Warrant”) to purchase an aggregate of 503,126 shares of common stock, par value $ .01 per share.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and obligations hereinafter set forth, the parties hereto hereby agree as follows:

SECTION 1. Definitions. As used herein, the following terms shall have the following respective meanings, and all capitalized terms used herein which are not otherwise defined shall have the meaning assigned thereto in the Purchase Agreement:

(a) “Common Stock” shall mean, collectively, the shares of common stock, $.01 par value per share, of the Company and any class or series of common stock of the Company authorized after the date hereof, or any other class or series of stock resulting from successive changes or reclassifications of any class or series of common stock of the Company.

(b) “Equity Equivalents” shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of the Company and any rights to acquire the foregoing, including, without limitation, any rights to acquire securities exercisable for, convertible into or exchangeable for the foregoing.

(d) “Person” shall mean any individual, partnership, corporation, limited liability company, joint venture, trust, firm, association, unincorporated organization or other entity.

(a) If at any time the Company wishes to issue any Equity Equivalents to any Person or Persons, the Company shall promptly deliver a notice of its intention to sell (the “Company’s Notice of Intention to Sell”) to each Institutional Investor (collectively, the “Eligible Stockholders”) setting forth a description of the Equity Equivalents to be sold, the proposed purchase price thereof and terms of sale. Upon receipt of the Company’s Notice of Intention to Sell, each Eligible Stockholder shall have the right to elect to purchase, at the price and on the terms stated in the Company’s Notice of Intention to Sell, a number of the Equity Equivalents equal to the product of (i) a fraction, the numerator of which is such Eligible Stockholder’s aggregate ownership of Equity Equivalents (calculated on a fully-diluted basis) and the denominator of which is the number of such Equity Equivalents outstanding (calculated on a fully diluted basis), multiplied by (ii) the number of Equity Equivalents to be issued (as so calculated, the “Eligible Equity Equivalents”). Such election is to be made by the Eligible Stockholders by written notice to the Company within 30 days after receipt by the Eligible Stockholders of the Company’s Notice of Intention to Sell (the “Acceptance Period for Equity Equivalents”). Each Eligible Stockholder shall also have the option, exercisable by so specifying in such written notice, to purchase on a pro rata basis similar to that described above, any remaining Eligible Equity Equivalents not purchased by other Eligible Stockholders, in which case the Eligible Stockholders exercising such further option shall be deemed to have elected to purchase such remaining Eligible Equity Equivalents on such pro rata basis, up to the aggregate number of Eligible Equity Equivalents which such Eligible Stockholder shall have specified until either (A) no Eligible Stockholder shall have elected to purchase any further amount of the Eligible Equity Equivalents which are the subject of the Company’s Notice of Intention to Sell or (B) all the Eligible Equity Equivalents which are the subject of the Company’s Notice of Intention to Sell shall have been subscribed for by the Eligible Stockholder(s). The Company shall promptly notify each electing Eligible Stockholder in writing of each notice of election received from other Eligible Stockholders pursuant to this paragraph 2(a).

(b) The Company may, at its election, during a period of 120 days following the expiration of the Acceptance Period for Equity Equivalents, sell and issue the remaining Equity Equivalents to another Person at a price and upon terms not more favorable to such Person than those stated in the Company’s Notice of Intention to Sell; provided, however, that failure by an Eligible Stockholder to exercise his, her or its option to purchase with respect to one offering, sale and issuance of Equity Equivalents shall not affect his, her or its option to purchase Equity Equivalents in any subsequent offering, sale and purchase. In the event the Company has not sold the Equity Equivalents, or entered into an agreement to sell the Equity Equivalents, within such 120 day period, the Company shall not thereafter issue or sell any Equity Equivalents without first offering such securities to each Eligible Stockholder in the manner provided in Section 2(a) hereof.

(c) If an Eligible Stockholder gives the Company notice, pursuant to the provisions of this Section 2, that such Eligible Stockholder desires to purchase any of the Equity Equivalents, payment therefor shall be by check or wire transfer, against delivery of the securities at the executive offices of the Company within 15 Business Days after giving the Company such notice, or, if later, the closing date for the sale of such Equity Equivalents. In the event that any such proposed issuance is for a consideration other than cash, such Eligible Stockholder will be entitled to pay cash for each share or other unit, in lieu of such other consideration, in the amount determined in good faith by the Board of Directors of the Company to constitute the fair value of such consideration other than cash to be paid per share or other unit.

(d) The preemptive rights contained in this Section 2 shall not apply to (i) Common Stock issued (A) as a stock dividend to holders of Common Stock or upon any subdivision or combination of shares of Common Stock, (B) pursuant to a Public Offering, (C) upon the conversion of any equity security or debt security of the Company issued on or prior to the date hereof, or (D) the exercise of any option, warrant or other right to subscribe for, purchase or otherwise acquire either Common Stock or any equity security or debt security convertible into Common Stock, issued prior to the date hereof, and (ii) (A) the issuance by the Company of up to 839,551 shares of Common Stock reserved or to be reserved for issuance upon the exercise of stock options, granted or to be granted exclusively to employees, officers, directors or consultants of the Company or its Subsidiaries and/or Affiliates pursuant to the Company’s employee stock option plan(s) now in existence or, to be established in the future.

SECTION 3. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE (INCLUDING GIVING EFFECT TO GOL SECTION 5-1401).

(a) EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AGREES THAT THE ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT THE SHARES, OR ANY AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT THE SUCH COURTS ARE AN INCONVENIENT FORUM. EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR

CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN SECTION 11 HEREOF, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING.

(b) THE COMPANY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT OR THE SHARES, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. THE COMPANY (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF WMF HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT WMF WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (II) ACKNOWLEDGES THAT WMF HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.

SECTION 5. Benefits of Agreement. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, legal representatives and heirs. Any purported issuance of Equity Equivalents by the Company, in violation of the provisions of this Agreement shall be null and void ab initio.

SECTION 6. Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, telecopier (with receipt confirmed), courier service or personal delivery:

or to such other address or addresses as shall have been furnished in writing to the other party hereto.

SECTION 7. Modification. Except as otherwise provided herein, neither this Agreement nor any provision hereof shall be modified, changed, discharged or terminated except by an instrument in writing signed by the party against whom the enforcement of any modification, change, discharge or termination is sought.

SECTION 8. Entire Agreement. This Agreement constitutes the entire agreement among the undersigned with respect to the subject matter hereof and supersedes any and all prior agreements or understandings, oral or written, among any or all of the undersigned relating thereto.

SECTION 9. Signatures; Counterparts. Telefacsimile transmissions of any executed original document and/or retransmission of any executed telefacsimile transmission shall be deemed to be the same as the delivery of an executed original. At the request of any party hereto, the other parties hereto shall confirm telefacsimile transmissions by executing duplicate original documents and delivering the same to the requesting party or parties. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

SECTION 10. Severability. If any one or more of the provisions contained in this Agreement, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions of this Agreement. The parties hereto further agree to

replace such invalid, illegal or unenforceable provision of this Agreement with a valid, legal and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid, illegal or unenforceable provision.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.

THIS VOTING UNDERTAKING (this “Agreement”) is made and entered into as of October 28, 2003, between Allied Capital Corporation, a Delaware corporation (the “Acquiror”) and the undersigned stockholder (the “Stockholder”) of Mercury Air Group, Inc., a Delaware corporation (the “Seller”).

A. The Seller, Mercury Air Centers, Inc. (the “Company”) and the Acquiror have entered into a Stock Purchase Agreement of even date herewith (the “Purchase Agreement”), which provides for the sale of all of the Company’s issued and outstanding capital stock by the Seller to the Acquiror;

B. Stockholder is the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of such number of shares of common stock of the Seller, par value of $.01 per share (“Common Stock”); Common Stock issuable upon exercise of outstanding options (“Option Stock”) and Series A 8% Cumulative Convertible Preferred Stock (“Preferred Stock”) as is indicated on the signature page of this Agreement;

C. Stockholder believes that the terms of the Purchase Agreement are fair and that it is in his, her or its best interest, as a shareholder of the Seller that the transactions contemplated by the Purchase Agreement be consummated;

D. The Acquiror has advised the Seller that the Acquiror is not prepared to execute the Purchase Agreement unless the Acquiror believes that it is reasonably likely that the transactions contemplated by the Purchase Agreement will be consummated, and therefore the Acquiror has required that certain stockholders of the Seller undertake in advance to vote their Stock (as defined below) in favor of the transactions contemplated by the Purchase Agreement; and

E. For these reasons, and in consideration of the execution of the Purchase Agreement by the Acquiror and to enhance the likelihood that the transactions contemplated by the Purchase Agreement will be consummated, the Stockholder, solely in his, her or its capacity as a stockholder of the Seller, agrees to vote the Stock and other such shares of capital stock of the Seller over which the Stockholder has voting power so as to facilitate consummation of the transactions contemplated by the Purchase Agreement.

NOW, THEREFORE, intending to be legally bound, the parties hereto agree as follows:

1. Certain Definitions. Capitalized terms not defined herein shall have the meanings ascribed to them in the Purchase Agreement. For purposes of this Agreement:

(a) “Expiration Date” shall mean the earlier to occur of: (i) such date and time as the Purchase Agreement shall have been terminated pursuant to Article X thereof; or (ii) such date and time as the transactions contemplated by the Purchase Agreement shall be consummated in accordance with the terms and provisions of the Purchase Agreement.

(b) “Person” shall mean any (i) individual, (ii) corporation, limited liability company, partnership or other entity, or (iii) governmental authority.

(c) “Stock” shall mean: (i) all securities of the Seller (including Common Stock, Option Stock and Preferred Stock) owned by the Stockholder as of the date of this Agreement; and (ii) all additional securities of the Seller (including all additional Common Stock, Option Stock and Preferred Stock) of which the Stockholder acquires ownership during the period from the date of this Agreement through the Expiration Date.

(d) Transfer. A Person shall be deemed to have effected a “Transfer” of a security if such person directly or indirectly: (i) sells, pledges, encumbers, grants an option with respect to, transfers or disposes of such security or any interest in such security; or (ii) enters into an agreement or commitment providing for the sale of, pledge of, encumbrance of, grant of an option with respect to, transfer of or disposition of such security or any interest therein.

(a) Transferee of Stock to be Bound by this Agreement. The Stockholder agrees that, during the period from the date of this Agreement through the Expiration Date, the Stockholder shall not cause or permit any Transfer of Stock to be effected unless each Person to which any of such Stock, or any interest in any of such Stock, is or may be transferred shall have: (i) executed a counterpart of this Agreement and a proxy in the form attached hereto (the “Proxy”); and (ii) agreed in writing to hold such Stock (or interest in such Stock) subject to all of the terms and provisions of this Agreement.

(b) Transfer of Voting Rights. The Stockholder agrees that, during the period from the date of this Agreement through the Expiration Date, the Stockholder shall not deposit (or permit the deposit of) any Stock in a voting trust or grant any proxy or enter into any voting agreement or similar agreement in contravention of the obligations of the Stockholder under this Agreement with respect to any Stock.

3. Agreement to Vote Stock. At every meeting of the stockholders of the Seller called, and at every adjournment thereof, and on every action or approval by written consent of the stockholders of the Seller, the Stockholder (solely in its, his or her capacity as such) shall cause the Stock to be voted: (a) in favor of the approval of the Purchase Agreement and the transactions contemplated by the Purchase Agreement; (b) against any Acquisition Proposal (as defined in the Purchase Agreement), other than the Purchase Agreement or the transactions contemplated thereby; and (c) against approval or adoption of resolutions or actions which could reasonably be expected to result in any of the conditions to the Seller’s obligations under the Purchase Agreement not being satisfied.

4. No Solicitation. Except as permitted by the Purchase Agreement, the Stockholder agrees that between the date of this Agreement and the Expiration Date, the Stockholder will not directly or indirectly and solely in its, his or her capacity as a stockholder of the Seller: (a) solicit, initiate, encourage or take an action intended to encourage, enter into, conduct, engage in or continue any discussions, or enter into any agreement or understanding, with any other person or entity (other than any officer, director, controlled affiliate or employee of the Seller or any of its affiliates or any

investment banker, attorney or other advisor or representative of the Seller or any of its affiliates) regarding the transfer, directly or indirectly, of any capital stock of or any other interest in the Company or its Subsidiaries or any of their assets (including one or more FBO locations or by way of a license); or (b) disclose any nonpublic information relating to the Company, its Subsidiaries or any assets comprising the FBO Business or afford access to the properties, books or records of the Company or its Subsidiaries to any other person or entity that may be considering acquiring, or has acquired, an interest in the Company or its Subsidiaries. The Stockholder will immediately cease and cause to be terminated any discussions or negotiations between the Stockholder and any other parties that may be ongoing with respect to the transfer, directly or indirectly, of any capital stock of or any other interest in the Company or its Subsidiaries or any of their assets (including one or more FBO locations or by way of a license). The Stockholder will promptly advise the Acquiror orally and in writing of any Acquisition Proposal received by the Stockholder or any request for information with respect to any Acquisition Proposal received by the Stockholder, the material terms and conditions of such Acquisition Proposal or request and the identity of the person making such Acquisition Proposal or request. This Agreement does not affect or restrict the Stockholder’s actions taken or not taken in his or her capacity as a director or officer of the Company. The Acquiror agrees that in the event of any breach or alleged breach of this Section 4 by the Stockholder, the Acquirer’s sole and exclusive remedy with respect to the Stockholder shall be to seek specific performance or injunctive relief pursuant to Section 10(d) hereof, and the Acquiror shall not be entitled to seek monetary damages from the Stockholder in connection with any such breach or alleged breach of this Section 4 by the Stockholder; provided, however, that nothing in this Agreement shall in any way limit the Acquirer’s remedies against the Seller for any breach of the Purchase Agreement resulting from any such action by the Stockholder.

5. Irrevocable Proxy. Concurrently with the execution of this Agreement, the Stockholder agrees to deliver to the Acquiror the Proxy, which shall be irrevocable to the fullest extent permissible by law, with respect to the Stock.

6. Representations and Warranties of the Stockholder. The Stockholder: (a) is the beneficial owner of the Stock and the options to purchase the Stock indicated on the signature page of this Agreement, which are free and clear of any liens, adverse claims, charges or other encumbrances (except such encumbrances arising under securities laws); (b) does not beneficially own any securities of the Seller other than the Stock and options to purchase the Stock indicated on the signature page of this Agreement; and (c) has full power and authority to make, enter into and carry out the terms of this Agreement and the Proxy.

7. Additional Documents. The Stockholder (in his, her or its capacity as such) and the Acquiror hereby covenant and agree to execute and deliver any additional documents necessary or desirable, in the reasonable opinion of the Acquiror, to carry out the intent of this Agreement.

8. Legending of Stock. If so requested by the Acquiror, the Stockholder agrees that the Stock shall bear a legend stating that they are subject to this Agreement and to an irrevocable proxy.

9. Termination. This Agreement shall terminate and shall have no further force or effect as of the Expiration Date.

(a) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, then the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

(b) Binding Effect and Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, but, except as otherwise specifically provided herein, neither this Agreement nor any of the rights, interests or obligations of the parties hereto may be assigned by either of the parties without prior written consent of the other.

(c) Amendments and Modification. This Agreement may not be modified, amended, altered or supplemented except upon the execution and delivery of a written agreement executed by the parties hereto.

(d) Specific Performance; Injunctive Relief. The parties hereto acknowledge that the Seller shall be irreparably harmed and that there shall be no adequate remedy at law for a violation of any of the covenants or agreements of the Stockholder set forth herein. Therefore, it is agreed that the Seller shall have the right to enforce such covenants and agreements by specific performance, injunctive relief or by any other means available to the Seller at law or in equity.

(e) Notices. All notices and other communications pursuant to this Agreement shall be in writing and deemed to be sufficient if contained in a written instrument and shall be deemed given if delivered personally, telecopied, sent by nationally-recognized overnight courier or mailed by registered or certified mail (return receipt requested), postage prepaid, to the parties at the following address (or at such other address for a party as shall be specified by like notice):

(f) Governing Law. This Agreement shall be governed by the laws of the State of Delaware, without reference to rules of conflicts of law.

(g) Entire Agreement. This Agreement and the Proxy contain the entire understanding of the parties in respect of the subject matter hereof, and supersede all prior negotiations and understandings between the parties with respect to such subject matter.

(h) Effect of Headings. The section headings are for convenience only and shall not affect the construction or interpretation of this Agreement.

(i) Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original, but all of which together shall constitute one and the same agreement.

(j) No Obligation to Exercise Options. Notwithstanding any provision of this Agreement to the contrary, nothing in this Agreement shall obligate the Stockholder to exercise any option, warrant or other right to acquire Stock.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed on the day and year first above written.

Assignment and Assumption Agreement dated as of this 28th day of October, 2003, by and among ALLIED CAPITAL CORPORATION, a Maryland corporation (“Buyer”), J.H. WHITNEY MEZZANINE FUND, L.P., (“JWF”) and J.H. WHITNEY MEZZANINE DEBT FUND, and together with JWF, the “Sellers”). Buyer and Sellers are referred to collectively herein as the “Parties”.

WHEREAS, Buyer and Sellers have entered into an Securities Purchase Agreement dated as of October 28, 2003 (the “Securities Purchase Agreement”):

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the Parties, the Parties hereby agree as follows:

All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Securities Purchase Agreement.

Subject to the terms and conditions of the Securities Purchase Agreement, Sellers hereby assign to Buyer as of the date hereof, the Investment Documents. Subject to the terms and conditions of the Securities Purchase Agreement, Buyer hereby assumes and becomes responsible for the liabilities, obligations and responsibilities of the Sellers under the Securities and the Investment Documents.

This Assignment and Assumption Agreement is being delivered in connection with the Securities Purchase Agreement and is subject to the terms of the Securities Purchase Agreement.

This Assignment and Assumption Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute one agreement.

IN WITNESS WHEREOF, the Parties have caused their duly authorized representatives to execute this Assignment and Assumption Agreement as of the date first written above.

Unless otherwise indicated, the business address for each of the directors and executive officers of Allied Capital Corporation is 1919 Pennsylvania Ave., N.W., Washington DC 20006. All directors and executive officers of Allied Capital Corporation are United States citizens.


Directors		Principal Occupation

William L. Walton		Chairman and Chief Executive Officer Allied Capital Corporation

Brooks H. Browne		Private Investor

John D. Firestone		Partner Secor Group

Anthony T. Garcia		Vice President of Finance Formity Systems, Inc.

Ann Torre Grant		Strategic and Financial Consultant

Lawrence I. Hebert		President and Chief Executive Officer Riggs Bank N.A.

John I. Leahy		President Management and Marketing Associates

Robert E. Long		Managing Director Goodwyn Long & Black Investment Management, Inc.

Alex J. Pollock		President and Chief Executive Officer Federal Home Loan Bank of Chicago


Guy T. Steuart II		President and Director Steuart Investment Company

Laura W. van Roijen		Private Real Estate Investor

Executive Officers

William L. Walton		Chairman and Chief Executive Officer Allied Capital Corporation

Joan M. Sweeney		Chief Operating Officer Allied Capital Corporation

Penni F. Roll		Chief Financial Officer Allied Capital Corporation

Scott S. Binder		Managing Director and Chief Valuation Officer Allied Capital Corporation

Michael J. Grisius		Managing Director Allied Capital Corporation

Robert D. Long		Managing Director Allied Capital Corporation

Edward H. Ross		Managing Director Allied Capital Corporation

John M. Scheurer		Managing Director Allied Capital Corporation

John D. Shulman		Managing Director Allied Capital Corporation

Paul R. Tanen		Managing Director Allied Capital Corporation

Thomas H. Westbrook		Managing Director Allied Capital Corporation

G. Cabell Williams III		Managing Director Allied Capital Corporation


Kelly Andersen		Executive Vice President and Treasurer Allied Capital Corporation

Suzanne V. Sparrow		Executive Vice President and Corporate Secretary Allied Capital Corporation

Chuck Dieveney		Principal Allied Capital Corporation

Janet McCabe		Senior Vice President and Director of Investor Relations Allied Capital Corporation

Timothy Pease		Senior Vice President and Director of Financial Operations Allied Capital Corporation

Scott A. Somer		Senior Vice President and Director of Portfolio Management Allied Capital Corporation


ALLIED CAPITAL CORPORATION

By:		/s/ Penni F. Roll

		Name: Penni F. Roll
		Title: Chief Financial Officer


(i)	if to the Company:

	Mercury Air Group, Inc. 5456 McConnell Avenue Los Angeles, California 90066
	Telecopier: Attention:	(310) 827-0650 Mr. Joseph A. Czyzyk Wayne J. Lovett, Esq.

	with a copy to:

	McBreen, McBreen & Kopko 20 North Wacker Drive, Suite 252 Chicago, Illinois 60606
	Telecopier: Attention:	(312) 332-2657 Frederick Kopko, Esq.


(ii)	if to WMF:

	J.H. Whitney Mezzanine Fund, L.P. 177 Broad Street Stamford, Connecticut 06901
	Telecopier No.: Attention:	(203) 975-1422 Mr. James H. Fordyce Mr. Daniel J. O’Brien

	with a copy to:

	Morrison Cohen Singer & Weinstein, LLP 750 Lexington Avenue New York, New York 10022
	Telecopier No.: Attention:	(212) 735-8708 David A. Scherl, Esq.


		MERCURY AIR GROUP, INC,

		By:		/s/ Joseph A. Czyzyk
				Name: Joseph A. Czyzyk Title: President

		J.H. WHITNEY MEZZANINE FUND, LP.

		By: Whitney GP, L.L.C., Its General Partner

		By:		/s/ James H. Fordyce
				Name: James H. Fordyce A Managing Member


(a)	if to the Company:

	Mercury Air Group, Inc. 5456 McConnell Avenue Los Angeles, CA 90066 Telecopier: (310) 827-0650
	Attention:	Mr. Joseph A. Czyzyk Wayne J. Lovett, Esq.

	with a copy to:

	McBreen, McBreen & Kopko 80 North Wacker Drive, Suite 252 Chicago, Illinois 60606 Telecopier: (312) 332-2657
	Attention:	Frederick Kopko, Esq.

(b)	if to WMF


				J. H. Whitney Mezzanine Fund, L.P. 177 Broad Street Stamford, Connecticut 06901 Telecopier No.: (203) 975-1422
				Attention:		Mr. James H. Fordyce Mr. Daniel J. O’Brien


		MERCURY AIR GROUP, INC.

		By:		/s/ Joseph A. Czyzyk

				Name: Joseph A. Czyzyk Title: President

		J. H. WHITEY MEZZANINE FUND, L.P.

		By:		Whitney GP, L.L.C., Its General Partner

		By:		/s/ James H. Fordyce

				Name: James H. Fordyce A Managing Member


		If to the Acquiror:

		Allied Capital Corporation
		1919 Pennsylvania Avenue, N.W.
		Washington, DC 20006-3434
		Fax: (202)659-2053
		Attn: G. Cabell Williams

		with a copy to:

		Piper Rudnick LLP
		1200 Nineteenth Street, N.W.
		Washington, DC 20036-2412
		Fax: (202)223-2085
		Attn: Anthony H. Rickert, Esq.


		If to the Stockholder:

		To the address for notice set forth on the signature page hereof, with a copy to:

		Mercury Air Group, Inc.
		5456 McConnell Avenue
		Los Angeles, CA 90066
		Fax: (310)827-0650
		Attn: Wayne J. Lovett

		and to:

		McBreen & Kopko
		20 N. Wacker Drive, Suite 2520
		Chicago, IL 60606
		Fax: (312)332-2657
		Attn: Frederick H. Kopko, Jr.


ALLIED CAPITAL CORPORATION

		Name of Stockholder

By:		By:

Signature of Authorized Signatory		Signature

Name:		Name:


Title:		Title:





		Print Address


		Telephone


		Facsimile No.

		Stock beneficially owned:

		________ Common Stock

		________ Option Stock

		________ Preferred Stock