8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): April 6, 2005

MERCURY AIR GROUP, INC.

(Exact name of Registrant as specified in Charter)

DELAWARE	001-07134	11-800515
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(I.R.S. Employer Identification No.)

5456 McConnell Avenue, Los Angeles, CA 90066
(Address of Principal Executive Offices/Zip Code)

Registrant’s telephone number, including area code: (310) 827-2737

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

 INFORMATION TO BE INCLUDED IN THE REPORT

 Exhibit 10.1

 Exhibit 10.2

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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

     On April 6, 2005, Mercury Air Group, Inc. (the “Company”) and Bank of America, N.A. (the “Lender”) executed the Third Amendment to Loan Agreement (the “Third Amendment”) that amends certain terms and conditions to the Loan Agreement dated as of July 29, 2004 between the Company and the Lender, as previously amended. The Loan Agreement, as amended by the Third Amendment, will expire on July 31, 2007, or earlier under certain conditions, and provides for cash advances and letters of credit up to the lesser of $30,000,000 or the Borrowing Base (the “Credit Facility”). The Borrowing Base, as defined in the Credit Facility, as amended by the Third Amendment, is determined monthly and will be equal to 80% of the balance due on Domestic Acceptable Receivables. The Credit Facility, as amended, continues to bear interest equal to the Bank’s Prime Rate.

     The Credit Facility, as amended, continues to contain certain financial covenants limiting the amount the Company can expend annually for capital expenditures to $2,000 thousand. The Credit Facility, as amended, also continues to prohibit the repurchase of stock and the payment of cash dividends, except for cash dividends in an amount not to exceed $17,500 thousand, which amount was expended in November 2004, and repurchases of stock in an amount not to exceed $1,000 thousand, by June 30, 2005. The Company will also continue to be required to maintain certain financial targets for tangible net worth and fixed charges.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(c)	Exhibits.
10.1	Third Amendment to Loan Agreement dated as of April 6, 2005 among Bank of America, N.A. and Mercury Air Group, Inc. and certain of its subsidiaries.
10.2	Letter from Bank of America, N.A. to Mercury Air Group, Inc. dated March 17, 2005.

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SIGNATURES

     Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 8, 2005	MERCURY AIR GROUP, INC.
	By:	/s/ Kent Rosenthal
		Kent Rosenthal
		Chief Financial Officer

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EXHIBIT INDEX

10.1	Third Amendment to Loan Agreement dated as of April 6, 2005 among Bank of America, N.A. and Mercury Air Group, Inc. and certain of its subsidiaries.
10.2	Letter from Bank of America, N.A. to Mercury Air Group, Inc. dated March 17, 2005.

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EX-10.1

Exhibit 10.1

THIRD AMENDMENT TO LOAN AGREEMENT

      This Third Amendment to Loan Agreement (the “Amendment”) is dated as of April 6, 2005, among Bank of America, N. A. (the “Bank”), Mercury Air Group, Inc., a Delaware corporation (“Borrower 1”); Maytag Aircraft Corporation, a Colorado corporation (“Borrower 2”); Mercury Air Cargo, Inc., a California corporation (“Borrower 3”); MercFuel, Inc., a Delaware corporation (“Borrower 4”); Hermes Aviation, Inc., a California corporation (“Borrower 5”), and Mercury Air Center — Long Beach, Inc., a California corporation (“Borrower 6”); (Borrower 1, Borrower 2, Borrower 3, Borrower 4, Borrower 5, and Borrower 6 are sometimes referred to, collectively as the “Borrowers” and individually as the “Borrower”).

RECITALS

      A.     The Borrowers and the Bank are parties to that certain Loan Agreement dated as of July 29, 2004, as amended by a First Amendment dated as of November 1, 2004, and by a Second Amendment dated as of January 31, 2005, (as amended, the “Agreement”).

      B.     The Borrowers and the Bank desire to further amend certain terms and provisions of the Agreement.

AGREEMENT

      1.     Definitions. Capitalized terms used but not defined in this Amendment shall have the meaning given to them in the Agreement.

      2.     Amendments. The Agreement is hereby amended as follows:

      2.1     The definition of “Borrowing Base” set forth in Section 1 of the Agreement is amended in its entirety to read as follows:

      “Borrowing Base” means 80% of the balance due on Domestic Acceptable Receivables. After calculating the Borrowing Base, the Bank may, upon notice to the Borrower, deduct such reserves as the Bank may establish from time to time in its reasonable credit judgment, including without limitation, reserves for 100% of the outstanding letters of credit, reserves for dilution (any non-cash reduction of accounts receivable), and the amount of estimated maximum exposure, as determined by the Bank from time to time, under any interest rate contracts which the Borrower enters into with the Bank (including interest swaps, caps, floors, options thereon, combinations thereof, or similar contracts).

      2.2     The final paragraph of the definition of “Acceptable Receivable” set forth in Section 1 of the Agreement is amended to add the following two sentences to the end of such paragraph.

      “It is provided, however, that if the debtor obligated upon an account is Flight Options, the concentration limitation applicable to such debtor will be increased to 25%; provided, however, in the event that the debt rating of

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      “. . . It is provided, however, that if the debtor obligated upon an account is Flight Options, the concentration limitation applicable to such debtor will be increased to 25%; provided, however, in the event that the debt rating of Raytheon, Inc., the parent company of such account debtor, is at any time rated lower than BBB- by Standard & Poor’s or rated lower than Baa3 by Moody’s Investors Service, Inc., such concentration limit shall be decreased to 10%. It is further provided, that if the debtor obligated upon an account is Net Jets, the concentration limitation applicable to such debtor will be increased to 25%; provided, however, in the event that the debt rating of Berkshire-Hathaway, Inc., the parent company of such account debtor, is at any time rated lower than AAA by Standard & Poor’s or rated lower than Aaa3 by Moody’s Investors Service, Inc., such concentration limitation shall be decreased to 10%.

      3. Representations and Warranties. Except as previously disclosed in writing, each Borrower hereby represents and warrants to Bank that: (i) no default specified in the Agreement and no event which with notice or lapse of time or both would become such a default has occurred and is continuing and has not been previously waived, (ii) the representations and warranties of each Borrower pursuant to the Agreement and all schedules thereto are true on and as of the date hereof as if made on and as of said date, (iii) the making and performance by each Borrower of this Amendment have been duly authorized by all necessary action, and (iv) no consent, approval, authorization, permit or license is required in connection with the making or performance of the Agreement as amended hereby.

      4. Conditions. This Amendment will be effective when the Bank receives the following items, in form and content acceptable to the Bank.

      4.1 This Amendment duly executed by all parties hereto.

      4.2 Payment of an amendment fee of Twenty Thousand Dollars ($20,000),

      4.3 Payment of all out-of-pocket expenses, including attorneys’ fees, incurred by the Bank in connection with the preparation of this Amendment.

      5. Effect of Amendment. Except as provided in this Amendment, the Agreement shall remain in full force and effect and shall be performed by the parties hereto according to its terms and provisions.

[Signatures on Following Page]

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     This Amendment is executed as of the date stated at the top of the first page.

Bank of America, N.A.		Mercury Air Group, Inc.
By:	/s/ FRANCES R. MARTINEZ	By:	/s/ JOSEPH A. CZYZYK
	Typed Name: Frances R. Martinez		Typed Name: Joseph A. Czyzyk
	Title: Vice President		Title: Chief Executive Officer

Mercury Air Cargo, Inc.
By:	/s/ JOSEPH A. CZYZYK
	Typed Name: Joseph A. Czyzyk
	Title:	Chief Executive Officer

MercFuel, Inc.
By:	/s/ JOSEPH A. CZYZYK
	Typed Name: Joseph A. Czyzyk
	Title:	Chief Executive Officer

Maytag Aircraft Corporation
By:	/s/ JOSEPH A. CZYZYK
	Typed Name: Joseph A. Czyzyk
	Title:	Chief Executive Officer

Hermes Aviation, Inc.
By:	/s/ JOSEPH A. CZYZYK
	Typed Name: Joseph A. Czyzyk
	Title:	Chief Executive Officer

Mercury Air Center-Long Beach, Inc.
By:	/s/ JOSEPH A. CZYZYK
	Typed Name: Joseph A. Czyzyk
	Title:	Chief Executive Officer

EX-10.2

Exhibit 10.2

Bank of America
Commercial Banking
Los Angeles—West
CA9-159-02-04
2049 Century Park East
Suite 200
Los Angeles, CA  90067-3101

March 17, 2005

MERCURY AIR GROUP, INC.

5456 McConnell Avenue

Los Angeles, CA 90066

Attention: Joe A Czyzyk, Chief Executive Officer

Re: Loan Agreement dated as of July 29, 2004, as amended

Dear Joe:

We refer to that certain Loan Agreement dated as of July 29, 2004, as amended (the “Loan Agreement”), executed between Bank of America, N.A. (the “Bank”) and Mercury Air Group, Inc., Maytag Aircraft Corporation, Mercury Air Cargo, Inc., MercFuel, Inc., Hermes Aviation, Inc. and Mercury Air Center — Long Beach, Inc. (the “Borrowers”).

Pursuant to Paragraph No. 9.10 (Cash dividends and Stock Repurchases) of the Loan Agreement, the Bank hereby consents to allow the Borrower to repurchase Borrower stock during fiscal year 2005, in an aggregate amount not to exceed $1,000,000.00. This consent is expressly limited to the repurchase described herein and shall not constitute a consent to future repurchases.

Except as herein provided, all of the terms and conditions of the Loan Agreement remain in full force and effect.

If you have any questions regarding this letter, please do not hesitate to contact the undersigned.

Very truly yours,

BANK OF AMERICA, N.A.

/s/ P. Holloway-Dobson

Pamela Holloway-Dobson

Senior Vice President

(310) 785-6081