S-3

As filed with the Securities and Exchange Commission on January 12, 2006

Registration No. 333-      

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-3

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

KITTY HAWK, INC.

(Exact name of registrant as specified in its charter)

Delaware	75-2564006
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

Kitty Hawk, Inc. 1515 West 20th Street P.O. Box 612787 DFW International Airport, Texas 75261 (972) 456-2200	Steven E. Markhoff Vice President Strategic Planning, General Counsel and Corporate Secretary of Kitty Hawk, Inc. 1515 West 20th Street P.O. Box 612787 DFW International Airport, Texas 75261 (972) 456-2200
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)	(Name and address, including zip code, and telephone number, including area code, of agent for service)

Copies of communications to:

Garrett A. DeVries, Esq.

Haynes and Boone, LLP

901 Main Street, Suite 3100

Dallas, Texas 75202

(214) 651-5000

Approximate date of commencement of proposed sale of securities to the public:  From time to time after the Registration Statement becomes effective.

If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.  o

If any of the securities being registered on this form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box.  

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If this Form is a post-effective amendment filed pursuant to Rule 462 (c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.  o

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.  o

CALCULATION OF REGISTRATION FEE

		Proposed Maximum	Proposed Maximum	Amount of
Title of Each Class	Amount to be	Offering Price	Aggregate	Registration
of Securities to be Registered	Registered (2)(3)	Per Unit(4)	Offering Price	Fee
Common Stock offerable by the selling stockholders named in this prospectus(1)	25,402,628	$1.135	$28,831,983	$3,085.02

(1)	Each share of common stock is accompanied by one preferred share purchase right as set forth in the Rights Agreement, dated as of January 21, 2004, as amended to date, by and between Kitty Hawk, Inc. and American Stock Transfer and Trust Company.
(2)	Consists of (i) 6,382,627 outstanding shares of common stock beneficially owned by Lloyd I. Miller, III as of the date of this registration statement, (ii) 15,410,245 shares of common stock issuable upon the conversion of outstanding shares of Series B Convertible Redeemable Preferred Stock held by the selling stockholders as of the date of this registration statement, and (iii) 3,609,756 shares of common stock issuable upon the exercise of outstanding warrants held by the selling stockholders as of the date of this registration statement.
(3)	Pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), this registration statement also covers an indeterminate number of additional shares as may be issued as a result of adjustments by reason of any stock split, stock dividend or similar transaction.
(4)	The proposed maximum offering price per unit for these shares is estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act. The proposed maximum offering price per share is based upon average of the high and low prices of our common stock as quoted on the American Stock Exchange on January 11, 2006 (within 5 business days prior to filing this registration statement).

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. The selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JANUARY 12, 2006

PROSPECTUS

25,402,628 Shares

KITTY HAWK, INC.

Common Stock

This prospectus relates to offers and sales from time to time by the selling stockholders identified in this prospectus of up to 25,402,628 shares of our common stock, par value $0.000001 per share, consisting of: 6,382,627 outstanding shares of our common stock; 15,410,245 shares of our common stock issuable upon conversion of shares of our outstanding Series B Convertible Redeemable Preferred Stock, par value $0.01 per share; and 3,609,756 shares of our common stock issuable upon the exercise of warrants outstanding as of the date of this prospectus. This prospectus does not cover the issuance of any shares of common stock by us to the selling stockholders. Except for underwriting discounts and selling commissions, which may be paid by the selling stockholders, we have agreed to pay the expenses incurred in connection with the registration of the shares of common stock covered by this prospectus.

The selling stockholders may sell the shares of common stock from time to time at market prices prevailing at the time of sale, prices related to prevailing market prices or privately negotiated prices. The selling stockholders may sell the shares of common stock to or through underwriters, brokers or dealers or directly to purchasers. Underwriters, brokers or dealers may receive discounts, commissions or concessions from the selling stockholders, purchasers in connection with sales of the shares of common stock, or both. Additional information relating to the distribution of the shares of common stock by the selling stockholders can be found in this prospectus under the heading “Plan of Distribution.” If underwriters or dealers are involved in the sale of any securities offered by this prospectus, their names, and any applicable purchase price, fee, commission or discount arrangement between or among them, will be set forth, or will be calculable from the information set forth, in a supplement to this prospectus.

We will not receive any proceeds from sales of shares of our common stock by the selling stockholders, other than payment of the exercise price of the warrants upon their exercise.

Investing in our common stock involves risks. Please see “Risk Factors” beginning on page 3.

Our common stock currently trades on the American Stock Exchange under the trading symbol “KHK.” The last reported sales price of our common stock on the American Stock Exchange on January 11, 2006 was $1.12 per share.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is          .

TABLE OF CONTENTS

	Page
About This Prospectus		i
Where You Can Find Additional Information		ii
Incorporation by Reference		ii
Cautionary Language Regarding Forward-Looking Statements		iii
Kitty Hawk, Inc.		1
Use of Proceeds		2
Risk Factors		3
Selling Stockholders		12
Plan of Distribution		15
Experts		17
Legal Matters		17
Certificate of Designation, Preferences and Rights of Series B Preferred Stock
Registration Rights Agreement
Securities Purchase Agreement
Standstill Agreement
Form of Common Stock Purchase Warrant
Opinion and Consent of Haynes and Boone, LLP
Consent of Grant Thornton LLP

You should rely only on the information contained in or incorporated by reference in this prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information contained in or incorporated by reference in this prospectus is accurate as of any date other than the date on the front of this prospectus.

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we have filed with the Securities and Exchange Commission, or the SEC, using a “shelf” registration process. Under this shelf registration process, the selling stockholders referred to in this prospectus may offer and sell from time to time up to 6,382,627 outstanding shares of our common stock, 15,410,245 shares of our common stock issuable on conversion of Series B Convertible Redeemable Preferred Stock (subject to adjustment for antidilution events), and 3,609,756 shares of our common stock issuable on the exercise of warrants outstanding at an exercise price of $0.82 per share (subject to adjustment for antidilution events).

This prospectus does not cover the issuance of any shares of common stock by us to the selling stockholders, and we will not receive any of the proceeds from any sale of shares by the selling stockholders. We will receive the payment of the exercise price of the warrants upon their exercise. Except for underwriting discounts and selling commissions, which may be paid by the selling stockholders, we have agreed to pay the expenses incurred in connection with the registration of the shares of common stock covered by this prospectus.

Information about the selling stockholders may change over time. Any changed information given to us by the selling stockholders will be set forth in a prospectus supplement if and when necessary. Further, in some cases, the selling stockholders will also be required to provide a prospectus supplement containing specific information about the terms on which they are offering and selling our common stock. If a prospectus supplement is provided and the description of the offering in the prospectus supplement varies from the information in this prospectus, you should rely on the information in the prospectus supplement.

In this prospectus, the words “Kitty Hawk,” “Company,” “we,” “our,” “ours” and “us” refer to Kitty Hawk, Inc., and its subsidiaries, unless otherwise stated or the context requires.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and, in accordance with the requirements of the Exchange Act, we file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy any document we file with the SEC at the Public Reference Room of the SEC at 100 F. Street, N.E., Washington, D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the SEC at that address. Please call 1-800-SEC-0330 for further information on the operations of the public reference facilities. Our SEC filings are also available at the offices of the American Stock Exchange, 86 Trinity Place, New York, New York 10006.

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to these reports are available free of charge through a link to the SEC website in the Investor Relations section of our Internet website, www.kittyhawkcompanies.com.

INCORPORATION BY REFERENCE

We may “incorporate by reference” in this prospectus the information we file with the SEC, which means:

•  incorporated documents are considered part of this prospectus;

•  we can disclose important information to you by referring you to those documents; and

•  information that we subsequently file with the SEC will automatically update and supersede the information in this prospectus and any information that was previously incorporated by reference in this prospectus. Any statement so updated or superseded shall not be deemed, except as so updated or superseded, to constitute part of this prospectus.

We incorporate by reference into this prospectus all documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this prospectus and prior to the termination of the effectiveness of the registration statement of which this prospectus is a part. In addition, except to the extent such information has been updated or superseded by the information in this prospectus, we incorporate by reference into this prospectus:

•  our Annual Report on Form 10-K for the year ended December 31, 2004;

•  our Quarterly Report on Form 10-Q for the quarter ended March 31, 2005;

•  our Quarterly Report on Form 10-Q for the quarter ended June 30, 2005;

•  our Quarterly Report on Form 10-Q for the quarter ended September 30, 2005;

•  our Current Report on Form 8-K, dated May 10, 2005, regarding the resignation from the Company of Randy Leiser, our former Vice President and Chief Financial Officer;

•  our Current Report on Form 8-K, dated June 13, 2005, regarding the employment agreement between Kitty Hawk Aircargo, Inc., a wholly owned subsidiary of the Company, and Robert Barron, the Vice President and Chief Operating Officer of Kitty Hawk Aircargo, Inc.;

•  our Current Report on Form 8-K, dated June 30, 2005, regarding election of Raymond B. Greer as a director of the Company;

•  our Current Report on Form 8-K, dated July 7, 2005, regarding amendment of our 2003 Long Term Equity Incentive Plan to increase the number of shares of common stock authorized for issuance thereunder by 500,000 shares to 7,000,000 shares;

•  our Current Report on Form 8-K, dated July 15, 2005, regarding the appointment of James R. Kupferschmid as Vice President and Chief Financial Officer;

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•  our Current Report on Form 8-K, dated July 20, 2005, regarding the employment agreement between the Company and James R. Kupferschmid, Vice President and Chief Financial Officer;

•  our Current Report on Form 8-K, dated October 5, 2005, regarding changes to our outside director compensation arrangements;

•  our Current Report on Form 8-K, dated October 10, 2005, regarding the expansion of our current ground freight transportation network and services beginning October 31, 2005; and

•  our Current Report on Form 8-K, dated November 14, 2005, regarding the sale of Series B Convertible Redeemable Preferred Stock and Warrants and the Second Amendment to Credit and Security Agreement.

In addition, we incorporate by reference the description of our common stock, which is contained in our registration statement on Form 8-A, filed with the SEC on August 23, 2004, as updated or amended in any amendment or report filed for such purpose.

You can obtain any of the filings incorporated by reference in this prospectus through us or from the SEC through the SEC’s website or at the SEC’s address listed above. Documents incorporated by reference are available from us without charge, excluding any exhibits to those documents that are not specifically incorporated by reference in this prospectus. You can request a copy of the documents incorporated by reference in this prospectus, and any documents and agreements referred to in this prospectus by requesting them in writing or by telephone from us at the following address:

Kitty Hawk, Inc.

1515 West 20th Street

P.O. Box 612787

DFW International Airport, Texas 75261

Attention: Shareholder Services

Telephone: (972) 456-2200

CAUTIONARY LANGUAGE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains “forward-looking statements” concerning our business, operations and financial performance and condition. When we use the words “estimates,” “expects,” “forecasts,” “anticipates,” “projects,” “plans,” “intends,” “believes” and variations of such words or similar expressions in this prospectus, we intend to identify forward-looking statements.

We have based our forward-looking statements on our current assumptions, expectations and projections about future events. We have expressed our assumptions, expectations and projections in good faith, and we believe there is a reasonable basis for them. However, we cannot assure you that our assumptions, expectations or projections will prove to be accurate.

A number of risks and uncertainties could cause our actual results to differ materially from the forward-looking statements contained in this prospectus. These risks, uncertainties and other important factors include, without limitation, the following, some of which are described more fully under the heading “Risk Factors”:

•  loss of key suppliers, significant customers or key management personnel;

•  increased competition, including the possible impact of any mergers, alliances or combinations of competitors;

•  changes in the cost and availability of jet fuel and diesel fuel and our ability to recapture increases in the cost of jet fuel and diesel fuel through the use of fuel surcharges and/or price increases;

•  with respect to our scheduled freight network, the continuing high cost of jet and diesel fuel leading to a higher total price for our services which impacts the freight purchasing decision for our customers and/or shippers resulting in a shift to less expensive modes of transportation;

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•  with respect to our recent expansion of our ground freight transportation network to include scheduled less-than-truckload deferred freight transportation services, potential competitive reactions from other less-than-truckload carriers;

•  limitations upon financial and operating flexibility due to the terms of our Credit Facility;

•  changes in our capital resources and liquidity;

•  financial costs and operating limitations imposed by both the current and the potential additional future unionization of our workforce;

•  payment defaults by our customers;

•  write-downs of the value of our aircraft parts, airframes or aircraft engines;

•  changes in the cost of Boeing 727-200 cargo aircraft maintenance and/or changes in the cost of Boeing 737-300SF cargo aircraft maintenance outside the scope of our power-by-the-hour maintenance agreement;

•  changes in general economic conditions;

•  changes in the cost and availability of ground handling and storage services;

•  changes in the cost and availability of aircraft or replacement parts;

•  changes in our business strategy or development plans;

•  changes in government regulation and policies, including regulations affecting maintenance requirements for, and availability of, aircraft and airworthiness directives;

•  foreign political instability and acts of war or terrorism;

•  adverse litigation judgments or awards;

•  the ability to successfully integrate and operate our less-than-truckload ground network;

•  the ability to attract sufficient customers and freight volumes for our less-than-truckload ground network;

•  findings of environmental contamination;

•  limitations in our ability to find, acquire and integrate replacement aircraft for our Boeing 727-200 cargo aircraft under terms and conditions that are satisfactory to us; and

•  limitations in our ability to offset income with our future deductible tax attributes.

Other factors may cause our actual results to differ materially from the forward-looking statements. These forward-looking statements speak only as of the date of this prospectus and, except as required by law, we do not undertake any obligation to publicly update or revise our forward-looking statements. We caution you not to place undue reliance on these forward-looking statements.

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KITTY HAWK, INC.

General

Kitty Hawk is a holding company and currently operates through its two wholly-owned subsidiaries, Kitty Hawk Cargo and Kitty Hawk Aircargo. During the nine months ended September 30, 2005, we generated 97.5% of our revenue from Kitty Hawk Cargo’s scheduled freight network and 2.5% of our revenue from Kitty Hawk Aircargo’s cargo airline.

Scheduled Freight Network

Through Kitty Hawk Cargo, we operate a comprehensive independent city-to-city scheduled freight network serving selected cities in the continental U.S. and Canada and San Juan, Puerto Rico, providing expedited and time-definite freight services. In addition, we have business alliances that allow us to provide expedited freight services to Alaska, Hawaii and Mexico. Beginning October 31, 2005, we expanded our ground freight transportation network to include scheduled coast-to-coast, less-than-truckload, or LTL, deferred freight service to 28 cities. Our LTL ground network is a scheduled, time-definite coast-to-coast deferred trucking network currently operated by Kitty Hawk Cargo through the use of contracted dedicated trucks and trailers from truck load trucking carriers who provide the trucks, trailers, drivers, insurance, fuel and permits. We expect our LTL ground network to grow to approximately 46 cities during the first quarter of 2006.

Expedited and/or time-definite freight includes freight of varying sizes and weights. Expedited freight typically includes freight transit times from a few hours to overnight to second morning. Deferred freight includes freight times of overnight to as long as two, three, four or five days. Time-definite transit times may vary, subject to customer preference and acceptance by the transportation provider. Our air network generally competes in the heavy weight and oversized, next-morning and two-day expedited freight segment of the U.S. freight transportation industry. Beginning October 31, 2005, our LTL ground network generally competes in the heavy weight and oversized deferred freight segment of the U.S. freight transportation industry.

As an independent freight network, we typically do not transport freight from shippers to our cargo facilities or from our cargo facilities to recipients. Our customers are generally not the ultimate shipper but rather freight forwarders, logistics companies and integrators, who either transport freight to and from our cargo facilities in the origin and destination cities we serve or arrange for others to provide these services. On a limited basis, for an additional fee, we offer an airport-to-door delivery option to our freight forwarder and logistics company customers and occasionally, upon request and for an additional fee, arrange for the initial pick up of freight from shippers by contracting with local cartage agents in major metropolitan areas of the continental U.S.

Cargo Airline

Kitty Hawk Aircargo, our cargo airline, primarily provides air freight transportation services for Kitty Hawk Cargo’s scheduled freight network. During the nine months ended September 30, 2005, Kitty Hawk Aircargo provided 96.4% of the revenue block hours flown in Kitty Hawk Cargo’s scheduled freight network.

In addition, when Kitty Hawk Aircargo’s aircraft are not being used in our scheduled freight network, Kitty Hawk Aircargo provides air freight transportation services which include the aircraft, crew, maintenance and insurance, also known as ACMI, and ad-hoc charters for a variety of customers. When providing such operations, Kitty Hawk Aircargo improves the utilization of its aircraft and generates additional revenue when its aircraft would otherwise be idle. During the nine months ended September 30, 2005, ACMI and ad-hoc charters generated approximately 2.5% of our revenues.

As of December 31, 2005, Kitty Hawk Aircargo operated five owned Boeing 727-200 cargo aircraft, six Boeing 727-200 cargo aircraft available under an aircraft and engine use agreement and seven Boeing 737-300SF cargo aircraft under ten year operating leases.

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USE OF PROCEEDS

We will not receive any proceeds from sales of shares of our common stock by the selling stockholders. We will receive approximately $3.0 million from the exercise price of the warrants held by the selling stockholders if the warrants are exercised in full. To the extent we receive any proceeds from the exercise of the warrants, we expect to use the proceeds for general corporate purposes.

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RISK FACTORS

In addition to the other information in this prospectus, you should carefully consider the following factors before making an investment decision. Investing in the common stock of our company involves a high degree of risk. The occurrence of any one or more of the following could materially adversely affect your investment in the common stock or our business and operating results.

Risks Relating to Our Business

We derive a significant portion of our revenues from a limited number of customers, and the loss of their business or payment defaults by one or more of them could have a material adverse effect on our results of operations.

While we have over 550 active freight forwarder and logistics company customers, during the nine months ended September 30, 2005, our top 25 customers accounted for over 64.5% of our scheduled freight revenue and our top three customers accounted for approximately 24.8% of our scheduled freight revenue. During the nine months ended September 30, 2005, our top three customers were Pilot Air Freight, Inc., Eagle Global Logistics, Inc. and AIT Freight Systems, Inc., which accounted for 11.1%, 7.9% and 5.8% of our total scheduled freight revenue, respectively.

We do not have any material minimum shipping contracts with our customers, including our most significant customers. The loss of one or more of these customers, or a significant reduction in any of these customer’s use of our services, could have a material adverse effect on our results of operations.

In addition, as of September 30, 2005, we had a significant concentration of credit risk as approximately 49.3% of our outstanding accounts receivable were from ten customers and 13.7% of our outstanding accounts receivable were attributable to one customer. A payment default by one of these customers could have a material adverse effect on our results of operations.

Our inability to schedule the Boeing 737-300SF cargo aircraft in our operations to achieve sufficient utilization could have a material adverse impact on our results of operations.

During the course of 2005, we took delivery of seven leased Boeing 737-300SF cargo aircraft. We have deployed our Boeing 737-300SF cargo aircraft in situations in which we can take advantage of their lower operating costs and improved performance characteristics and in situations for which their capacity is better suited than our Boeing 727-200 cargo aircraft. In addition, we have developed fleet operating and utilization schedules that largely offset the higher lease and insurance costs of the Boeing 737-300SF cargo aircraft by achieving a higher average utilization per aircraft as compared to the Boeing 727-200 cargo aircraft. During 2005, due to the costs and other factors which were attributable to the induction of the Boeing 737-300SF cargo aircraft, we have not fully offset the higher lease and insurance costs of the Boeing 737-300SF cargo aircraft as compared to our Boeing 727-200 cargo aircraft.

If we are unable to achieve sufficient utilization of our Boeing 737-300SF cargo aircraft, we may not be able to offset its higher lease and insurance costs with its lower operating costs. Further, because the operating leases for the Boeing 737-300SF cargo aircraft contain restrictions on our ability to sublease the aircraft and prohibit us from terminating the leases prior to the expiration of the initial ten-year term, we may not be able to sublease these aircraft or terminate the leases if we are unable to generate sufficient utilization. Our inability to achieve sufficient utilization of the Boeing 737-300SF cargo aircraft in our operations could have a material adverse effect on our results of operations.

Our inability to execute upon our plans to expand our scheduled LTL ground freight transportation network, or to manage that new line of business, could have a material adverse effect on our results of operations.

Beginning October 31, 2005, we expanded our ground freight transportation network to include scheduled coast-to-coast, LTL deferred freight service to 28 cities. Our LTL ground network is a scheduled, time-definite coast-to-coast deferred trucking network currently operated by Kitty Hawk Cargo through the use of contracted

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dedicated trucks and trailers from truck load trucking carriers who provide the trucks, trailers, drivers, insurance, fuel and permits. We expect our LTL ground network to grow to approximately 46 cities during the first quarter of 2006. Our growth plans will place significant demands on our management and operating personnel. If we are unable to manage the implementation and growth of our LTL ground network effectively, our business, results of operations and financial condition may be adversely affected. Accordingly, our business and future operating results will depend on the ability of our management and operating personnel to implement and expand our LTL ground network.

The as-needed nature of our scheduled freight business and the types of industries we serve subjects our business to significant market fluctuations that are beyond our control and a downward market fluctuation could have a material adverse effect on our results of operations.

Our scheduled freight network relies on customers who need expedited or time-definite delivery on an as-needed basis for air freight and deferred delivery on an as-needed basis for ground freight. As the freight is shipped on an as-needed basis, we do not have contracts with our customers. Without customer contracts, the overall demand for our freight services is primarily influenced by the health of the U.S. economy, which is cyclical in nature, the seasonality and economic health of the industries generating the freight we transport in our network and the availability, reliability and cost of alternative freight services including services from competitors who are larger than us, serve more cities than we do and have more financial resources than we do. The amount of freight shipped in our scheduled freight network during any particular time period can fluctuate significantly due to the foregoing factors.

The U.S. freight transportation industry is highly competitive and, if we cannot successfully compete, our results of operations and profitability may be materially adversely affected.

The U.S. freight transportation industry is extremely large and encompasses a broad range of transportation modes and service levels. Much of the freight shipped in the U.S. is transported on an expedited or “time-definite” basis. Expedited freight transit times vary from a few hours or overnight to as long as two, three, four or five days. Expedited freight includes freight of varying sizes and weights, from as small as envelopes to heavy weight or oversized freight requiring dedicated aircraft or trucks.

We generally compete in the inter-city, heavy weight expedited freight segment of the U.S. freight transportation industry. This segment of the industry is highly competitive and very fragmented. The ability to compete effectively in this segment depends on price, frequency of service, cargo capacity, ability to track freight, extent of geographic coverage and reliability. We generally compete with regional delivery firms, commercial passenger airlines that provide freight service on their scheduled flights, trucking companies for deliveries of less than 1,000 mile distances, regional and national LTL trucking companies and integrated freight transportation companies, such as BAX Global, FedEx and United Parcel Service. Many of our competitors have substantially larger freight networks, serve significantly more cities and have considerably more freight system capacity, capital and financial resources than we do.

In addition, our expedited freight services network is experiencing increased competition from integrated carriers and trucking networks that provide lower cost second- and third-day alternatives to our overnight air freight services.

Our ability to attract and retain business also is affected by whether, and to what extent, our customers decide to coordinate their own transportation needs. Certain of our current customers maintain transportation departments that could be expanded to manage freight transportation in-house. If we cannot successfully compete against companies providing services similar to, or that are substitutes for, our own or if our customers begin to provide for themselves the services we currently provide to them, our business, financial condition, operating results and profitability may be materially adversely affected.

A significant portion of the freight transported in our network relates to the automotive, electronics, telecom and related infrastructure equipment, apparel and other durable goods and equipment industries. The demand for the products produced by these industries and, in turn, the demand for our scheduled freight network services for the transportation of freight from these industries has historically trended in relationship

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to the strength of the U.S. economy. Furthermore, these industries tend to be seasonal in nature and, as a result, our business is also seasonal with the third and fourth quarters historically being the highest demand and strongest revenue quarters.

The announcements in November 2005 by General Motors Corp. and Ford Motor Co. that each of them expect to close multiple plants may have an impact on the amount of freight transported generally in the automotive industry. A significant decrease in freight transportation in the automotive industry could significantly reduce the demand for our expedited air network and have a material adverse impact on our results of operations.

Our inability to attract sufficient customers at economical prices for our expanded ground network could impair our ability to compete in the LTL ground freight market, causing us to fail to meet the financial goals of our business expansion plans.

The profitability of our LTL ground freight network depends on our ability to carry sufficient freight to cover our contracted trucking costs, capital costs associated with expanding our ground freight network and certain recurring fixed costs. If we are unable to attract sufficient customers willing to pay high enough rates to cover our sunk costs and fixed costs, we will not be able to meet the financial goals of our LTL ground freight network.

Our failure to comply with the financial ratios and other covenants in our Credit Facility could result in an event of default that could cause acceleration of our indebtedness.

The terms of our credit facility with Wells Fargo Business Credit, Inc., or the Credit Facility, require us to achieve and maintain certain specified financial ratios. Our failure to comply with the financial ratios and other covenants and requirements contained in the Credit Facility could cause an event of default. The occurrence of an event of default could prohibit us from accessing additional borrowings and permit Wells Fargo Business Credit to declare the amount outstanding under the Credit Facility to be immediately due and payable. In addition, pursuant to our lockbox arrangement with Wells Fargo Business Credit, upon an event of default, Wells Fargo Business Credit could apply all of the payments on our accounts receivable to repay the amount outstanding under the Credit Facility. In that event, we would not have access to the cash flow generated by our accounts receivable until the amount outstanding under the Credit Facility is first repaid in full. As of December 31, 2005, we had $1.9 million borrowed under the Credit Facility. In the event of an event of default, our assets or cash flow may not be sufficient to repay fully our borrowings under our Credit Facility, and we may be unable to refinance or restructure the payments on the Credit Facility on favorable terms or at all. An event of default under our Credit Facility, particularly if followed by an acceleration of any outstanding amount, could have a material adverse effect on our business.

The terms of our Credit Facility could restrict our operations.

Our Credit Facility contains covenants that restrict our ability to, among other things, make capital expenditures, enter into aircraft operating leases, modify our corporate governance documents, incur certain additional debt, declare or pay certain dividends, enter into transactions with our affiliates, consolidate, merge with or acquire another business, sell certain of our assets or liquidate, dissolve or wind-up our company. These restrictions may limit our ability to engage in activities which could expand our business, including obtaining future financing, making needed capital expenditures, or taking advantage of business opportunities such as strategic acquisitions and dispositions, all of which could have an adverse effect on our business and results of operations.

Writedowns of the value of our aircraft parts and supplies inventory could have a material adverse impact on our results of operations.

When we emerged from bankruptcy in September 2002, we had a substantial amount of Boeing 727-200 aircraft parts and supplies inventory. The amount of aircraft parts and supplies inventory necessary to operate our Boeing 727-200 fleet is dependent upon the number and usage of Boeing 727-200 cargo aircraft that we

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operate. To the extent we reduce the number of Boeing 727-200 cargo aircraft that we operate in the future either through attrition or replacement with other aircraft types including the Boeing 737-300SF cargo aircraft, we may need fewer Boeing 727-200 aircraft parts and supplies inventory to maintain our Boeing 727-200 fleet. If we conclude we have aircraft parts and supplies inventory in excess of our current or anticipated future needs and if we determine that the fair market value of our Boeing 727-200 aircraft parts and supplies inventory has declined from the values established when we emerged from bankruptcy, we would have to write down the value of our Boeing 727-200 aircraft parts and supplies inventory. We review this inventory and value it at least annually. Any such writedown could have a material adverse impact on our financial results.

If we lose access to, or sustain damage to, our Fort Wayne, Indiana facilities, our business would be interrupted, which could adversely affect our business and results of operations.

Our Fort Wayne, Indiana facilities act as the hub of our expedited scheduled air freight network. As a result, virtually all of the air freight we transport passes through our Fort Wayne facilities on the way to its final destination. If we are unable to access our Fort Wayne facilities because of security concerns, a natural disaster, a condemnation or otherwise or if these facilities are destroyed or materially damaged, our business would be materially adversely affected.

Furthermore, any damage to our Fort Wayne facilities could damage some or all of the freight in the facilities. If freight is damaged, we may be liable to our customers for such damage and we may lose sales and customers as a result. Any material damages we must pay to customers, or material loss of sales or customers, would have a material adverse effect on our business and results of operations.

We have a $10 million business interruption insurance policy to both offset the cost of, and compensate us for, certain events which interrupt our operations. However, the coverage may not be sufficient to compensate us for all potential losses and the conditions to the coverage may preclude us from obtaining reimbursement for some potential losses. While we have attempted to select our level of coverage based upon the most likely potential disasters and events that could interrupt our business, we may not have been able to foresee all the costs and implications of a disaster or other event and, therefore, the coverage may not be sufficient to reimburse us for our losses. Any material losses for which we are unable to obtain reimbursement may have a material adverse effect on our results of operations.

Increases in the cost, or a reduction in the availability, of airframe or aircraft engine maintenance may result in increased costs.

To keep our owned and leased aircraft in airworthy condition, we must hire third parties to perform scheduled heavy airframe and aircraft engine maintenance on them. An increase in the cost of airframe or aircraft engine maintenance would increase our maintenance expenses. In addition, a reduction in the availability of airframe or aircraft engine maintenance services could result in delays in getting airframes or aircraft engines serviced and result in increased maintenance expenses and lost revenue. Any increase in maintenance expenses or loss of revenue due to delays in obtaining maintenance services could have a material adverse effect on our results of operations.

Increases in the cost, or decreases in the supply, of jet and diesel fuel could have a material adverse effect on our results of operations.

One of our most significant and variable costs is jet fuel. During the nine months ended September 30, 2005, our jet fuel averaged $1.77 per gallon, an increase of 38.3%, as compared to $1.28 per gallon for the nine months ended September 30, 2004. Jet fuel costs per gallon include the cost of jet fuel and the cost of all taxes, fees and surcharges necessary to deliver the jet fuel into the aircraft. During the nine months ended September 30, 2005, we used between 2.1 million and 2.8 million gallons of jet fuel per month, depending on the mix of aircraft flown, the weight, origin and destination of freight shipped and the number of days the network operated during each month. During the nine months ended September 30, 2005, each $0.01 change in the price per gallon of jet fuel would have resulted in a change in our fuel cost of approximately $220,000.

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We purchase jet fuel from various suppliers at current market prices. We do not currently have any long-term contracts for jet fuel, nor do we currently have any agreements to hedge against increases in the price of jet fuel. On a regular basis, we review the price and availability of jet fuel. If we have the opportunity and ability to execute individual purchases at favorable prices or terms, enter into long-term supply contracts for jet fuel or make arrangements to hedge against changes in jet fuel prices, we may enter into such agreements or arrangements.

With respect to our LTL ground freight network, the truck load carriers from whom we contract our trucks pass the increased cost of diesel fuel to us through the use of fuel surcharges, which we attempt to pass on to our customers through the use of fuel surcharges.

We periodically increase our prices or implement fuel surcharges to offset all or some of our increased fuel costs, as our expedited scheduled freight network bears the cost of increases in jet and diesel fuel prices. If we are unable due to competitive pressures or other reasons to raise our fuel surcharges or prices, we may be forced to absorb increases in jet and/or diesel fuel costs, which could have a material adverse effect on our results of operations. In addition, as we attempt to recapture the increase in jet and/or diesel fuel costs through increasing our prices to our customers and/or through temporary fuel surcharges, our customers may seek lower cost freight transportation alternatives to our expedited scheduled freight network, which could negatively affect our results of operation. The rising cost of jet fuel affects our working capital because we pay for fuel in advance of providing air freight transportation services and typically do not recover these increases through our fuel surcharge until the billing for the air freight transportation service is collected, which is usually between 30 to 45 days after the service is performed.

Additionally, if we were unable to acquire sufficient quantities of jet fuel at a price we deem appropriate to fly our aircraft, we would be required to curtail our operations which could have a material adverse effect on our operations.

Increases in the cost, or decreases in the supply, of ground handling and storage services could significantly disrupt our business.

We contract with third parties to provide ground handling and storage services at all of the cities we serve, with the exception of Fort Wayne, Indiana, which is operated by our employees. We also contract with third parties to provide ground transportation to approximately 35 other cities at which we receive and deliver freight at scheduled times. The impact of an increase in the cost or the decrease in the availability of ground handling and storage services could have a material adverse affect on our business.

The unavailability of aircraft due to unscheduled maintenance, accidents and other events may result in the loss of revenue and customers.

Our revenues depend on having aircraft available for revenue service. From time to time, we may experience unscheduled maintenance due to equipment failures and accidental damage that makes our aircraft unavailable for revenue service. These problems can be compounded by the fact that spare or replacement parts and components may not be readily available in the marketplace. Failure to obtain necessary parts or components in a timely manner or at favorable prices could ground some of our fleet and result in significantly lower revenues. In the event one or more of our aircraft are out of service for an extended period of time, whether due to unscheduled maintenance, accidents or otherwise, we may be forced to lease replacement aircraft and may be unable to fully operate our business. Further, suitable replacement aircraft may not be available on acceptable terms or at all. Loss of revenue from any business interruption or costs to replace airlift could make it difficult to continue to operate our business.

The unavailability of trucks, or increases in the cost of trucking services, may materially adversely impact our results of operations of our LTL ground network.

Our LTL ground network availability depends on having trucks available for service. We do not own the trucks used in our LTL ground network. We contract for dedicated freight hauling capacity under agreements that are terminable on 30 days notice from either party. Failure to have sufficient dedicated freight hauling

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capacity, at contractually determined prices, could result in significantly lower revenues and could make it difficult to continue to operate our business.

Financial costs and operating limitations imposed by the unionization of our workforce could create material labor problems for our business.

The pilots of our cargo airline are represented by the Airline Pilots Association, or ALPA, a national union representing airline pilots. We have entered into a Collective Bargaining Agreement with the Kitty Hawk Pilots Association, which merged with ALPA effective January 1, 2004. The agreement covers all flight crew members of our cargo airline with respect to compensation, benefits, scheduling, grievances, seniority, and furlough and expires December 1, 2013.

Although our Collective Bargaining Agreement with our flight crew members prohibits strikes, labor disputes with them could still result in a material adverse effect on our operations. Further, if additional segments of our workforce become unionized, we may be subject to work interruptions or stoppages, which could have a material adverse effect on our operations.

A failure of our computer systems could significantly disrupt our business.

We utilize a number of computer systems to schedule flights and personnel, track aircraft and freight, bill customers, pay expenses and monitor a variety of our activities, ranging from maintenance and safety compliance to financial performance. The failure of the hardware or software that support these computer systems, or the loss of data contained in any of them, could significantly disrupt our operations.

Aircraft accidents and the resulting repercussions could have a material adverse effect on our business and results of operations.

We are vulnerable to potential losses that may be incurred in the event of an aircraft accident. Any such accident could involve not only repair or replacement of a damaged aircraft and its consequent temporary or permanent loss from revenue service, but also potential claims involving injury to persons or property. We are required by the Department of Transportation, or DOT, to carry liability insurance on each of our aircraft. Although we believe our current insurance coverage is adequate and consistent with current industry practice, including our substantial deductibles, we cannot be assured that our coverage or premiums will not be changed or that we will not suffer substantial losses and lost revenues from accidents. Moreover, any aircraft accident, even if fully insured, could result in FAA directives or investigations or could cause a perception that some of our aircraft are less safe or reliable than other aircraft, which could result in costly compliance requirements, the grounding of some of our fleet and the loss of customers. Any aircraft accident and the repercussion thereof could have a material adverse effect on our results of operations.

Risks Relating to Government Regulation

If we lose our authority to conduct flight operations, we will be unable to run our air freight business.

We are subject to Title 49 of the United States Code, formerly the Federal Aviation Act of 1958, under which the DOT and the FAA, exercise regulatory authority over air carriers. The DOT and the FAA have the authority to modify, amend, suspend or revoke the authority and licenses issued to us for failure to comply with the provisions of law or applicable regulations. In addition, the DOT and the FAA may impose civil or criminal penalties for violations of applicable rules and regulations. In addition, we are subject to regulation by various other federal, state, local and foreign authorities, including the Department of Homeland Security, through the Transportation Security Administration, the Department of Defense and the Environmental Protection Agency. In order to maintain authority to conduct flight operations, we must comply with statutes, rules and regulations pertaining to the airline industry, including any new rules and regulations that may be adopted in the future. Without the necessary authority to conduct flight operations, we will be unable to run our air freight business.

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Safety, training and maintenance regulations may hinder our ability to conduct operations or may result in fines or increased costs.

Virtually every aspect of our cargo airline is subject to extensive regulation by the FAA, including the areas of safety, training and maintenance. To ensure compliance with FAA rules and regulations, the FAA routinely inspects air carrier operations and aircraft and can impose civil monetary penalties in the event of non-compliance. Periodically, the FAA focuses on particular aspects of air carrier operations occasioned as a result of a major incident. These types of inspections and regulations often impose additional burdens on air carriers and increase their operating costs. We cannot predict when we will be subject to such inspections or regulations, nor the impact of such inspections or regulations. Other regulations promulgated by state and federal Occupational Safety and Health Administrations, dealing with the health and safety of our employees, impact our operations.

In addition, all of our aircraft are subject to FAA directives issued at any time, including directives issued under the FAA’s “Aging Aircraft” program, or directives issued on an ad hoc basis. These directives can cause us to conduct extensive examinations and structural inspections of our aircraft, engines and components and to make modifications to them to address or prevent problems of corrosion, structural fatigue or additional maintenance requirements. In addition, the FAA may mandate installation of additional equipment on our aircraft, the cost of which may be substantial. Apart from these aircraft related regulations, the FAA may adopt regulations involving other aspects of our air carrier operations, such as training, cargo loading, ground facilities and communications. This extensive regulatory framework, coupled with federal, state and local environmental laws, imposes significant compliance burdens and risks that substantially affect our costs.

If we improperly ship hazardous materials or contraband, we could incur substantial fines or damages.

The FAA exercises regulatory jurisdiction over transporting hazardous materials and contraband. We frequently transport articles that are subject to these regulations. Shippers of hazardous materials share responsibility with the air carrier for compliance with these regulations and are primarily responsible for proper packaging and labeling. Although required to do so, customers may fail to inform us about hazardous or illegal cargo. If we fail to discover any undisclosed weapons, explosives, illegal drugs or other hazardous or illegal cargo or mislabel or otherwise ship hazardous materials, we may suffer possible aircraft damage or liability, as well as fines, penalties or flight bans, which could have a material adverse effect on our results of operations

Department of Homeland Security and Transportation Security regulations may result in unanticipated costs.

As a result of the passage of the Aviation and Transportation Security Act, the U.S. Congress created the Transportation Security Administration, or TSA. By law, the TSA is directed to adopt regulations for the screening of cargo transported on cargo aircraft. The TSA has implemented various new regulations involving the security screening of cargo. At this time, the implementation of these new regulations has not materially adversely affected our ability to process cargo or materially increased our operating costs. However, the TSA could adopt additional security and screening requirements that could have an impact on our ability to efficiently process cargo or otherwise materially increase our operating costs.

The Department of Homeland Security has also taken over many departments and functions that regulate various aspects of our business, such as the U.S. Customs Service, and has formed a Border and Transportation Directorate. The ability of the Department of Homeland Security to efficiently structure these combined operations and functions may affect us in ways that cannot be predicted at this time.

If the ownership of our common stock continues to be highly concentrated, it may prevent other stockholders from influencing significant corporate decisions and may result in conflicts of interest that could cause our stock price to decline.

As of November 14, 2005, the selling stockholders and their affiliates beneficially owned 45.8% of our common stock. The selling stockholders and their affiliates, acting as a group, will have substantial influence

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and may control the outcome of corporate actions requiring shareholder approval, including the election of directors, any merger, consolidation or sale of all or substantially all of our assets or any other significant corporate transactions. The selling stockholders and their affiliates may also delay or prevent a change of control of our company, even if such a change of control would benefit our other stockholders. The significant concentration of stock ownership may adversely affect the trading price of our common stock due to investors’ perception that conflicts of interest may exist or arise.

Stock ownership by non-U.S. citizens could prevent us from operating our business.

We believe that some of our stockholders are non-U.S. citizens. Under current federal law, our cargo airline could cease to be eligible to operate as a cargo airline if more than 25% of our voting stock were owned or controlled by non-U.S. citizens. Moreover, in order to hold an air carrier certificate, our president and two-thirds of our directors and officers must be U.S. citizens. All of our directors and officers are U.S. citizens. Our Second Amended and Restated Certificate of Incorporation limits the aggregate voting power of non-U.S. persons to 22.5% of the votes voting on or consenting to any matter, and our Amended and Restated Bylaws do not permit non-U.S. citizens to serve as directors or officers.

Risks Related to Our Common Stock

The market price for our common stock may be volatile.

The market price of our common stock could fluctuate substantially in the future in response to a number of factors, including, among others:

•  our performance and prospects;

•  the performance and prospects of our major customers;

•  the limited depth and liquidity of the market for our common stock;

•  investor perception of us and the industry in which we operate;

•  general financial and other market conditions;

•  the cost and supply of fuel; and

•  domestic and international economic conditions.

In recent years, the public stock markets have experienced price and trading volume volatility. This volatility has had a significant effect on the market prices of securities issued by many companies for reasons that may or may not be related to their operating performance. If the public stock markets continue to experience price and trading volume volatility in the future, the market price of our common stock could be adversely affected.

In addition, although our common stock is quoted on the American Stock Exchange, our common stock has traded, and may continue to trade, in low volumes. As a result, sales of small amounts of our common stock in the public market could cause the price of our common stock to fluctuate greatly, including in a materially adverse manner.

Other companies may have difficulty acquiring us, even if doing so would benefit our stockholders.

Provisions in our second amended and restated certificate of incorporation, second amended and restated bylaws, the Delaware General Corporation Law and the terms of our shareholder rights plan and Credit Facility could make it more difficult for other companies to acquire us, even if doing so would benefit our stockholders. Our second restated certificate of incorporation and second amended and restated bylaws contain the following provisions, among others, which may discourage or prevent another company from acquiring us:

•  a limitation on who may call stockholder meetings;

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•  a prohibition on stockholder action by written consent; and

•  advance notification procedures for matters to be brought before stockholder meetings.

In addition, we are subject to provisions of the Delaware General Corporation Law that prohibit us from engaging in a business combination with any “interested stockholder.” These provisions generally mean that a stockholder who owns more than 15% of our voting stock cannot acquire us for a period of three years from the date that the stockholder became an “interested stockholder,” unless various conditions are met, such as approval of the transaction by our board of directors. In addition, the terms of our Credit Facility contain provisions that restrict our ability to merge or consolidate with a potential acquiror. Finally, we have a shareholder rights plan that limits the ability of a person to acquire 15% or more of our outstanding common stock without the prior approval of our board of directors, except that the beneficial ownership threshold applicable under the shareholder rights plan to Lloyd I. Miller, III and his affiliates is 23.5%. Any of the foregoing could impede a merger, takeover or other business combination involving us or discourage a potential acquiror from making a tender offer to acquire our common stock, which, under certain circumstances, could adversely affect the market price of our common stock.

We do not anticipate paying cash dividends to our stockholders in the foreseeable future.

We intend to retain all of our earnings for use in our business and do not anticipate paying cash dividends to our stockholders in the foreseeable future, other than in connection with our obligation to pay quarterly dividends on our shares of Series B Convertible Redeemable Preferred Stock. Further, covenants contained in our Credit Facility restrict our ability to pay cash dividends on our shares of common stock and in some cases on our shares of Series B Convertible Redeemable Preferred Stock.

We may be subject to limitations in our ability to offset income with our future deductible tax attributes

We believe the issuance of the Series B Convertible Redeemable Preferred Stock will be deemed a change in control of our greater than 5% stockholders as defined in Section 382 of the Internal Revenue Code. As such, the ability to utilize our current net operating losses generated through the date of the issuance of the Series B Convertible Redeemable Preferred Stock to offset any future taxable income which may be generated, will be subject to an annual limitation. Other than this annual limitation, our ability to fully utilize our net operating losses prior to their expiration has not been impaired by the sale of the Series B Convertible Redeemable Preferred Stock. However, our current net operating losses have a full valuation allowance against them because it is currently more likely than not that we will not be able to utilize the losses prior to their expiration. Future losses may be similarly affected by future change of control events as defined in Section 382 of the Internal Revenue Code.

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SELLING STOCKHOLDERS

Pursuant to a registration rights agreement, dated as of November 14, 2005, we agreed to register certain securities owned by the selling stockholders and to indemnify the selling stockholders against certain liabilities related to the selling of the common stock, including liabilities arising under the Securities Act of 1933, as amended, or the Securities Act. Under the registration rights agreement, we also agreed to pay the costs and fees of registering the shares of common stock (including the reimbursement of fees paid by the selling stockholders to counsel); however, the selling stockholders will pay any brokerage commissions, discounts or other expenses relating to the sale of the shares of common stock.

The following table identifies the selling stockholders, the number and percentage of shares of common stock beneficially owned by the selling stockholders as of November 14, 2005, the number of shares of common stock that the selling stockholders may offer or sell in this offering, and the number and percentage of shares of common stock beneficially owned by the selling stockholders after this offering, assuming they sell all of the shares that may be sold by them in this offering. We have prepared this table based upon information furnished to us by or on behalf of the selling stockholders. As used in this prospectus, “selling stockholders” includes the successors-in-interest, donees, transferees or others who may later hold the selling stockholders’ interests.

	Shares of Common Stock							Shares of Common Stock
	Beneficially Owned							Beneficially Owned
	Prior to the Offering							After the Offering
	Number of Shares							Number of Shares
	Beneficially		Percent of			Number of Shares		Beneficially		Percent of
Selling Stockholder	Owned		Class(1)			Being Offered		Owned(2)		Class(1)
Lloyd I. Miller, III and affiliates(3)(4)(5)		12,808,302		22.5	%		10,680,275		2,128,027		4.2	%
Bryant R. Riley and affiliates(6)(7)(8)		6,630,548		12.5	%		2,570,270		4,060,278		8.1	%
Bonanza Master Fund, Ltd. and affiliates(9)		6,205,405		11.5	%		3,855,405		2,350,000		4.7	%
Paul J. Solit and affiliates(10)(11)		5,140,539		9.3	%		5,140,539		—		—
Richard Steiner and affiliates(12)		449,795		*			449,795		—		—
Philip H. Steiner and affiliates(13)		449,795		*			449,795		—		—
Bluegrass Growth Fund L.P.(14)		321,284		*			321,284		—		—

*	Less than one percent
(1)	Based on 50,310,061 shares of our common stock that were issued and outstanding as of November 14, 2005. Percentage ownership has been calculated in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended.
(2)	Assumes that the selling stockholders sell all of their shares of common stock covered by this prospectus.
(3)	Lloyd I. Miller, III, or Miller, is: (i) the investment advisor to the trustee of Trust A-4 and Trust C; (ii) the manager of Milfam LLC, an Ohio limited liability company, which is the managing general partner of Milfam I L.P., a Georgia limited partnership, and Milfam II L.P., a Georgia limited Partnership; and (iii) the custodian to certain accounts created pursuant to the Florida Uniform Gift to Minors Act for Alexandra Miller (“Alexandra UGMA”) and Lloyd I. Miller, IV (“Lloyd IV UGMA”).
(4)	As of November 14, 2005, Miller beneficially owned 12,808,302 shares of common stock, consisting of: (i) 2,739,842 shares owned of record by Trust A-4 (which includes warrants to purchase 97,683 shares of common stock); (ii) 250,000 shares owned of record by Trust C; (iii) 709,343 shares owned of record by

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	Milfam I L.P.; (iv) 5,191,712 shares owned of record by Milfam II L.P. (which includes warrants to purchase 585,488 shares of common stock and 2,000 shares of Series B Convertible Redeemable Preferred Stock convertible into 2,082,465 shares of common stock); (v) 30,000 shares owned by Alexandra UGMA; (vi) 32,000 shares owned by Lloyd IV UGMA; and (vii) 3,855,405 shares owned by Miller directly (which includes warrants to purchase 731,707 shares of common stock and 3,000 shares of Series B Convertible Redeemable Preferred Stock which is convertible into 3,123,698 shares of common stock). Except with respect to the 3,855,405 shares directly owned by Miller, Miller disclaims such beneficial ownership. PNC Bank, N.A. is the trustee of both Trust A-4 and Trust C and as such, PNC Bank, N.A. may be deemed to beneficially own the shares of common stock currently owned by Trust A-4 and Trust C and any shares that may be purchased by Trust A-4 and Trust C upon the exercise of warrants held by them. PNC Bank, N.A. disclaims such beneficial ownership.
(5)	The number of shares being offered with respect to Miller and his affiliates is based on our commitment, under the Registration Rights Agreement, dated November 14, 2005, by and among us and the selling stockholders, to pursue registration of all of the unregistered shares of common stock beneficially owned by Miller. Of the shares of common stock beneficially owned by Miller, (i) 709,342 shares of common stock owned by Trust A-4, (ii) 709,343 shares of common stock owned by Milfam I, L.P., and (iii) 709,342 shares of common stock owned by Milfam II, L.P. were registered for resale pursuant to a Registration Statement on Form S-3 (Reg. No. 333-119302). None of these shares of common stock are being offered for resale pursuant to this prospectus.
(6)	Bryant R. Riley, or Riley, is (i) the Chairman and CEO of B. Riley & Co., Inc., a member broker-dealer of the NASD, Inc.; (ii) manager of Riley Investment Management, LLC, which is the general partner of SACC Partners LP; and (iii) a trustee for B. Riley & Co. Retirement Trust.
(7)	As of November 14, 2005, Riley beneficially owned 6,630,548 shares of common stock, consisting of: (i) 6,091,212 shares held by SACC Partners LP (which includes warrants to purchase 426,829 shares of common stock and 1,750 shares of Series B Convertible Redeemable Preferred Stock convertible into 1,822,157 shares of common stock); (ii) 321,284 shares held by B. Riley & Co. Retirement Trust (which includes warrants to purchase 60,976 shares of common stock and 250 shares of Series B Convertible Redeemable Preferred Stock convertible into 260,308 shares of common stock); and (iii) 218,052 shares held by B. Riley & Co., Inc. Tom Kelleher as (i) the President of B. Riley & Co., Inc.; (ii) manager of Riley Investment Management, LLC, which is the general partner of SACC Partners LP; and (iii) a trustee for B. Riley & Co. Retirement Trust may be deemed to share beneficial ownership of the shares of common stock beneficially owned or acquired by B. Riley & Co., Inc., SACC Partners LP and B. Riley & Co. Retirement Trust, respectively. Mr. Kelleher disclaims any such beneficial ownership.
(8)	The number of shares beneficially owned by Riley after the offering consist of 3,842,226 shares of common stock owned by SACC Partners LP and 218,052 shares of common stock owned by B. Riley & Co., Inc. Of the shares of common stock beneficially owned by Riley, (i) 1,875,191 shares of common stock owned by SACC Partners LP and (ii) 355,728 shares of common stock owned by B. Riley & Co., Inc. were registered for resale pursuant to a Registration Statement on Form S-3 (Reg. No. 333-119302). None of these shares of common stock are being offered for resale pursuant to this prospectus.
(9)	As of November 14, 2005, Bonanza Master Fund, Ltd. (“BMF”) beneficially owned 6,205,405 shares of common stock (which includes warrants to purchase 731,707 shares of common stock and 3,000 shares of Series B Convertible Redeemable Preferred Stock convertible into 3,123,698 shares of common stock). Bernay Box, as the President of Bonanza Fund Management, Inc., a Texas corporation, which is the general partner of Bonanza Capital, Ltd., a Texas limited partnership, which is the general partner of BMF, may be deemed to share beneficial ownership of shares of common stock beneficially owned by BMF or acquired by BMF. Mr. Box disclaims any such beneficial ownership.
(10)	Paul J. Solit, or Solit, is: (i) the Managing Member of Potomac Capital Management LLC, which is the general partner of Potomac Capital Partners LP (“PCPLP”); (ii) the President and sole owner of Potomac Capital Management Inc. (“PCMI”); and (iii) a Director of Potomac Capital International Ltd. (“PCIL”), an international business company formed under the laws of the British Virgin Islands. PCMI is the

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	Investment Manager of (i) PCIL and (ii) Pleiades Investment Partners-R, LP (“Pleiades”), a private investment partnership formed under the laws of the State of Delaware.
(11)	As of November 14, 2005, Solit beneficially owned 5,140,539 shares, consisting of: (i) 2,238,705 shares held by PCPLP (which includes warrants to purchase 424,878 shares of common stock and 1,742 shares of Series B Convertible Redeemable Preferred Stock convertible into 1,813,827 shares of common stock); (ii) 1,516,459 shares held by Pleiades (which includes warrants to purchase 287,805 shares of common stock and 1,180 shares of Series B Convertible Redeemable Preferred Stock convertible into 1,228,654 shares of common stock); and (iii) 1,385,375 shares held by PCIL (which includes warrants to purchase 262,927 shares of common stock and 1,078 shares of Series B Convertible Redeemable Preferred Stock convertible into 1,122,448 shares of common stock).
(12)	Richard Steiner is a general partner of Corky and Rick Steiner Family L.P. (the “CRSFLP”). As of November 14, 2005, Richard Steiner beneficially owned 449,795 shares of common stock, consisting of: (i) 192,769 shares held by CRSFLP (which includes warrants to purchase 36,585 shares of common stock and 150 shares of Series B Convertible Redeemable Preferred Stock convertible into 156,184 shares of common stock); and (ii) 257,026 shares held directly by Richard Steiner (which includes warrants to purchase 48,780 shares of common stock and 200 shares of Series B Convertible Redeemable Preferred Stock convertible into 208,246 shares of common stock).
(13)	Philip H. Steiner, also known as “Corky” Steiner, is a general partner of CRSFLP. As of November 14, 2005, Philip H. Steiner beneficially owned 449,795 shares of common stock, consisting of: (i) 192,769 shares held by CRSFLP (which includes warrants to purchase 36,585 shares of common stock and 150 shares of Series B Convertible Redeemable Preferred Stock convertible into 156,184 shares of common stock); and (ii) 257,026 shares held directly by Philip H. Steiner (which includes warrants to purchase 48,780 shares of common stock and 200 shares of Series B Convertible Redeemable Preferred Stock convertible into 208,246 shares of common stock).
(14)	Bluegrass Growth Fund Partners, LLC is the general partner of Bluegrass Growth Fund LP. By virtue of such relationship, Bluegrass Growth Fund Partners, LLC may be deemed to have voting and dispositive power over the shares owned by Bluegrass Growth Fund LP. Bluegrass Growth Fund Partners, LLC disclaims beneficial ownership of such shares. Mr. Brian Shatz has delegated authority from the partners of Bluegrass Growth Fund Partners, LLC with respect to the shares of common stock owned by Bluegrass Growth Fund LP. Mr. Shatz may be deemed to have voting and dispositive power over the shares of common stock owned by Bluegrass Growth Fund LP. Mr. Shatz disclaims beneficial ownership of such shares of common stock and has no legal right to maintain such delegated authority.

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PLAN OF DISTRIBUTION

Distribution by the Selling Stockholders

As used in this prospectus, “selling stockholders” include the successors-in-interest, donees, transferees or others who may later hold the selling stockholders’ interests. In all cases, the selling stockholders will act independently of us in making decisions with respect to the timing, manner, size and price of each sale. The selling stockholders may sell any of the securities being offered under this prospectus in any one or more of the following ways from time to time:

•  on the American Stock Exchange, on any other national securities exchange or market or in the over-the-counter market on which our common stock may be listed or quoted at the time of any such sale;

•  through underwriters or dealers;

•  through agents;

•  through a block trade in which the broker or dealer engaged to handle the block trade will attempt to sell the securities as agent, but may position and resell a portion of the block as principal to facilitate the transaction;

•  as exchange distributions in accordance with the rules of the applicable exchange;

•  directly to purchasers, including institutional investors;

•  through ordinary brokerage transactions where the broker solicits purchasers;

•  to a broker-dealer, as principal, for resale by the broker-dealer for its account;

•  through privately negotiated transactions;

•  through remarketing firms;

•  through short sales;

•  through a combination of any of these methods of sale; or

•  any other method permitted pursuant to applicable law.

In addition, the selling stockholders may sell their common stock under Rule 144 of the Securities Act rather than under this prospectus, if the transaction meets the requirements of Rule 144, or by any other legally available means. The distribution of the securities described in this prospectus may be effected from time to time in one or more transactions either:

•  at a fixed price or prices, which may be changed;

•  at market prices prevailing at the time of the sale;

•  at prices relating to the prevailing market prices; or

•  at negotiated prices.

Two of the selling stockholders, SACC Partners, LP and B. Riley & Co. Retirement Trust dated 1/1/99, are affiliates of B. Riley & Co., Inc., a broker-dealer. Based on representations made by such stockholders to us, we believe that such stockholders purchased the securities to be registered hereunder in the ordinary course of business, and that at the time of such purchase, such stockholders had no agreement or understanding, directly or indirectly, with any person to distribute the securities.

Underwriters or Dealers

Unless otherwise indicated in the applicable prospectus supplement, if underwriters or dealers are utilized in the sale, the securities will be acquired by the underwriters or dealers for their own account. The underwriters or dealers may sell the securities in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The obligations of the underwriters to purchase the securities will be subject to several conditions set forth in an agreement between the selling stockholders and the underwriters. Unless otherwise indicated in the applicable prospectus

15

supplement, the underwriters will be obligated to purchase all of the securities offered if any of the securities are purchased. Any public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time.

During and after an offering through underwriters, the underwriters may purchase and sell the securities in the open market. These transactions may include over-allotment and stabilizing transactions and purchases to cover syndicate short positions created in connection with the offering. The underwriters may also impose a penalty bid, in which selling concessions allowed to syndicate members or other broker-dealers for the offered securities sold for their account may be reclaimed by the syndicate if such offered securities are repurchased by the syndicate in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of the offered securities, which may be higher than the price that might otherwise prevail in the open market. If commenced, these activities may be discontinued.

If the selling stockholders use dealers in the sale of securities, they will sell the securities to them as principals. The dealers may then resell those securities to the public at varying prices determined by the dealers at the time of resale. We will include in the prospectus supplement the names of the dealers and the terms of the transaction.

Agents

The selling stockholders may designate agents who agree to use their reasonable efforts to solicit purchasers for the period of their appointment or to sell securities on a continuing basis.

Direct Sales

The selling stockholders may also sell securities directly to one or more purchasers without using underwriters or agents.

Remarketing Firms

The securities may be re-sold to the public following their redemption or repayment by one or more remarketing firms. Remarketing firms may act as principals for their own accounts or as agents for us.

Rights Offerings; Conversions

If we were to issue rights on a pro rata basis to our stockholders, we may be able to use this prospectus to offer and sell the securities underlying the rights. We may also be able to use the prospectus to offer and sell securities to be received upon conversion of any convertible securities we may issue or upon exercise of transferable warrants that may be issued by us or an affiliate.

General Information

Underwriters, dealers, agents and remarketing firms that participate in the distribution of the securities may be underwriters as defined in the Securities Act, and any discounts or commissions received by them from us and any profit on the resale of the securities by them may be treated as underwriting discounts and commissions under the Securities Act. Any underwriter, dealer, agent or remarketing firm will be identified and the terms of the transaction, including their compensation, will be described in a prospectus supplement. We or the selling stockholders may have agreements with underwriters, dealers, agents or remarketing firms to indemnify them against certain liabilities, including liabilities under the Securities Act, or to contribute with respect to payments which the underwriters, dealers or agents may be required to make. Underwriters, dealers, agents or remarketing firms, or their affiliates may be customers of, engage in transactions with or perform services for, us or our subsidiaries in the ordinary course of their business.

The selling stockholders may use agents and underwriters to solicit offers by certain institutions to purchase securities from us at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on the date stated in the prospectus supplement. Delayed delivery contracts will be subject to only those conditions set forth in the prospectus supplement. A

16

commission indicated in the prospectus supplement will be paid to underwriters and agents soliciting purchases of securities pursuant to delayed delivery contracts accepted by us.

Hedging and Other Transactions

In addition to the manners of distribution described above, the selling stockholders may enter into hedging transactions. For example, the selling stockholders may:

•  enter into transactions with a broker-dealer or affiliate thereof in connection with which such broker-dealer or affiliate will engage in short sales of the common stock pursuant to this prospectus, in which case such broker-dealer or affiliate may use shares of common stock received from the selling stockholders to close out its short positions;

•  sell common stock short itself and redeliver such shares to close out its short positions;

•  enter into option or other types of transactions that require the selling stockholders to deliver common stock to a broker-dealer or an affiliate thereof, who will then resell or transfer the common stock under this prospectus; or

•  loan or pledge the common stock to a broker-dealer or an affiliate thereof, who may sell the loaned shares or, in an event of default in the case of a pledge, sell the pledged shares pursuant to this prospectus.

A distribution of the common stock by the selling stockholders may also be effected through the issuance by the selling stockholders or others of derivative securities, including without limitation, warrants, exchangeable securities, forward delivery contracts, swaps and the writing of options.

Pledges; Certain Transfers and Donations

From time to time, the selling stockholders may pledge or grant a security interest in some or all of our common stock owned by them. If the selling stockholders default in the performance of their secured obligations, the pledgees or secured parties may offer and sell such common stock from time to time by this prospectus. The selling stockholders also may transfer and donate our common stock owned by it in other circumstances. The number of shares of our common stock beneficially owned by the selling stockholders will decrease as and when the selling stockholders transfer or donate their shares of our common stock or default in performing obligations secured by its shares of our common stock. The plan of distribution for the securities offered and sold under this prospectus will otherwise remain unchanged, except that each of the transferees, donees, pledgees, other secured parties or other successors in interest will be selling stockholders for purposes of this prospectus.

EXPERTS

The consolidated financial statements incorporated in the registration statement of which this prospectus is a part by reference to our Annual Report on Form 10-K for the year ended December 31, 2004 have been audited by Grant Thornton LLP, independent registered public accounting firm, as indicated in their report with respect thereto, and are included herein in reliance upon the authority of said firm as experts in accounting and auditing.

LEGAL MATTERS

The validity of the issuance of any securities offered under this prospectus will be passed upon for us by our lawyers, Haynes and Boone, LLP. Counsel named in the prospectus supplement will issue opinions about the validity of the securities for any agents, dealers or underwriters.

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14.   Other expenses of Issuance and Distribution

The following table sets forth the expenses, other than commissions, expected to be incurred in connection with the offering described in the Registration Statement:

Expense	Amount
Securities and Exchange Commission registration fee	$	3,100	*
Legal fees		50,000	*
Printing and engraving expenses		1,000	*
Auditors’ fees		10,000	*
Blue sky and legal investment fees and expenses		1,000	*
Trustee and Authenticating Agent fees		—
Miscellaneous expenses		5,000	*
Total	$	70,100	*

* Estimated

Item 15.   Indemnification of Directors and Officers

Section 145 of the Delaware General Corporation Law (the “Delaware Law”) permits indemnification of the directors and officers of Kitty Hawk, Inc., a Delaware corporation (the “Company”), involved in a civil or criminal action, suit or proceeding, including, under certain circumstances, suits by or in the right of the Company, for any expenses, including attorney’s fees, and (except in the case of suits by or in the right of the Company), any liabilities which they may have incurred in consequences of such action, suit or proceeding under conditions stated in said Section.

Article Eighth of the Company’s Second Amended and Restated Certificate of Incorporation, as amended (the “Certificate”), limits the personal liability of the Company’s directors to the Company or its stockholders for monetary damages for certain breaches of fiduciary duty. In addition, Article Ninth of the Certificate defines and clarifies the rights of certain individuals, including the Company’s directors and officers, to indemnification by the Company against personal liability or expenses incurred by them as a result of certain litigation against them.

Set forth below is a description of Article Eighth and Ninth of the Certificate. Such descriptions are intended only as summaries and are qualified in their entirety by reference to the Company’s Certificate and Second Amended and Restated Bylaws (the “Bylaws”).

Article Eighth of the Certificate protects the directors of the Company against personal liability for breaches of their duty of care. Article Eighth of the Certificate absolves directors of liability for negligence in the performance of their duties, including gross negligence. Directors remain liable for breaches of the duty of loyalty to the Company and its stockholders as well as for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law and transactions from which a director derived improper personal benefit. In addition, Article Eighth of the Certificate does not absolve directors of liability for unlawful dividends or stock repurchases or redemptions to which a negligence standard presently applies under the Delaware Law. Also, there may be certain liabilities, such as those under the federal securities laws or other state or federal laws, which a court may hold are unaffected by Article Eighth of the Certificate.

Although Article Eighth of the Certificate provides the directors of the Company with protections against personal liability for monetary damages for breaches of their duty of care, it does not eliminate the directors’ duty of care. Accordingly, Article Eighth of the Certificate would have no effect on the availability of equitable remedies such as an injunction to prevent a proposed action or rescission of a contract based upon a

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director’s breach of his or her duty of care. Although both directors and officers of the Company are covered by indemnification provisions under Article Ninth of the Certificate (as discussed below), Article Eighth of the Certificate limits liability only with respect to a person acting in the capacity of a director.

Article Ninth of the Certificate provides that each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding by reason of the fact that he or she is or was a director or officer of the Company (or was serving at the request of the Company as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another entity, including service with respect to employee benefit plans maintained or sponsored by the Company) will be indemnified and held harmless by the Company, to the fullest extent authorized by the Delaware Law, as currently in effect (or, to the extent indemnification is broadened, as it may be amended) against all expense, liability or loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts to be paid in settlement) reasonably incurred by such person in connection therewith.

Article Ninth of the Certificate provides that persons indemnified thereunder may bring suit against the Company to recover unpaid amounts claimed thereunder, and that if such suit is successful, the expense of bringing such a suit will be reimbursed by the Company. Article Ninth of the Certificate further provides that while it is a defense to such a suit that the person claiming indemnification has not met the applicable standards of conduct making indemnification permissible under the Delaware Law, the burden of proving the defense will be on the Company. Neither the failure of the Company’s Board of Directors to have made a determination that indemnification is proper, nor an actual determination by the Company’s Board of Directors that the claimant has not met the applicable standard of conduct, will be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

Article Ninth of the Certificate also provides that the rights to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred therein will not be exclusive of any other right which any person may have or acquire under any statute, provision of the Company’s Certificate or Bylaws, or otherwise. Article Ninth of the Certificate also provides that the Company may maintain insurance, at its expense, to protect itself and any of its directors, officers, employees or agents against any expense, liability or loss, whether or not the Company would have the power to indemnify such person against such expense, liability or loss under the Delaware Law.

Article Ninth of the Certificate further provides that the rights conferred therein are contract rights and include the right to be paid by the Company for the expenses incurred in defending the proceedings specified above, in advance of their final disposition, except that, if the Delaware Law so requires, such payment will only be made upon delivery to the Company by the indemnified party of an undertaking to repay all amounts so advanced if it is ultimately determined that the person receiving such payments is not entitled to be indemnified under the Bylaws or otherwise. Article Ninth of the Certificate also provides that the Company may, by action of its Board of Directors, provide indemnification to its agents or employees with the same scope and effect as the foregoing indemnification of directors and officers.

Pursuant to a registration rights agreement entered into by the Company and the selling stockholders, under certain circumstances, each of the Company and the selling stockholders have agreed to indemnify each other and their respective directors and officers for certain liabilities arising from untrue statements or misleading omissions contained in a registration statement related to the securities registrable pursuant to the registration rights agreement. The common stock being registered on behalf of the selling stockholders pursuant to this registration statement is being registered pursuant to the registration rights agreement.

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Item 16.   Exhibits

Exhibit
Number			Description of Exhibit
	**1	.1	Form of Underwriting Agreement for Common Stock.
	3	.1	Second Amended and Restated Certificate of Incorporation of Kitty Hawk, Inc. (Exhibit 99.1 to Kitty Hawk, Inc.’s Form 8-K dated October 1, 2002, and incorporated herein by reference).
	3	.2	Certificate of Amendment of the Second Amended and Restated Certificate of Incorporation of Kitty Hawk, Inc., dated February 6, 2003 (Exhibit 3.2 to Kitty Hawk, Inc.’s amended Registration Statement on Form 8-A/A dated March 12, 2003, and incorporated herein by reference).
	3	.3	Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of Kitty Hawk, Inc., dated July 13, 2004 (Exhibit 3.3 to Kitty Hawk’s Registration Statement on Form 8-A dated August 23, 2004, and incorporated herein by reference).
	3	.4	Second Amended and Restated Bylaws of Kitty Hawk, Inc., dated October 31, 2003 (Exhibit 3.3 to Kitty Hawk, Inc.’s amended Registration Statement on Form 8-A/A dated November 12, 2003, and incorporated herein by reference).
	*4	.1	Certificate of Designation, Preferences and Rights of Series B Preferred Stock, par value $0.01 per share, of Kitty Hawk, Inc., filed as of November 14, 2005.
	*4	.2	Registration Rights Agreement, dated November 14, 2005, by and among Kitty Hawk, Inc. and the selling stockholders.
	*4	.3	Securities Purchase Agreement, dated November 9, 2005, by and among Kitty Hawk, Inc. and the selling stockholders.
	*4	.4	Standstill Agreement, dated November 14, 2005, by and among Kitty Hawk, Inc. and the selling stockholders.
	*4	.5	Form of Common Stock Purchase Warrant.
	*5	.1	Legal Opinion of Haynes and Boone, LLP.
	*23	.1	Consent of Haynes and Boone, LLP (included in its opinion filed as Exhibit 5.1).
	*23	.2	Consent of Grant Thornton LLP.
	*24	.1	Power of Attorney (incorporated in the signature page of the Registration Statement).

*	Filed herewith
**	To be filed by amendment or on Form 8-K

Item 17.   Undertakings.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to the Registration Statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;

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(iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;

provided, however, that the undertakings set forth in clauses (i), (ii) and (iii) above do not apply if the information required to be included in a post-effective amendment by those clauses is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the Registration Statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

(A) Each prospectus filed by a registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the Registration Statement as of the date the filed prospectus was deemed part of and included in the Registration Statement; and

(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a Registration Statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the Registration Statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the Registration Statement relating to the securities in the Registration Statement to which the prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a Registration Statement or prospectus that is part of the Registration Statement or made in a document incorporated or deemed incorporated by reference into the Registration Statement or prospectus that is part of the Registration Statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the Registration Statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.

(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

The registrant undertakes that in a primary offering of securities of the registrant pursuant to the Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the registrant or used or referred to by the registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about an undersigned registrant or its securities provided by or on behalf of an undersigned registrant; and

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(iv) Any other communication that is an offer in the offering made by an undersigned registrant to the purchaser.

The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933, as amended, and will be governed by the final adjudication of such issue.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Dallas, State of Texas, on the 12th day of January, 2006.

KITTY HAWK, INC.

By:  /s/  Steven E. Markhoff

Steven E. Markhoff

Vice President Strategic Planning,
Corporate Secretary and General Counsel

KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and directors of Kitty Hawk, Inc., a Delaware Corporation, do hereby constitute and appoint Robert W. Zoller, Jr., Steve E. Markhoff, and James Kupferschmid, and each of them, their true and lawful attorneys-in-fact and agents or attorney-in-fact and agent, with power and authority to do any and all acts and things and to execute any and all instruments which said attorneys and agents, and any one of them, determine may be necessary or advisable or required to enable said corporation to comply with the Securities Act of 1933, as amended, and any rules or regulations or requirements of the Securities and Exchange Commission in connection with this registration statement. Without limiting the generality of the foregoing power and authority, the powers granted include the full power of substitution and resubstitution, for them and in their name, place and stead, in any and all capacities, the power and authority to sign the names of the undersigned officers and directors in the capacities indicated below to this registration statement, to any and all amendments (including any post-effective amendments) and supplements thereto, and to any and all instruments or documents filed as part of or in connection with such registration statement, and each of the undersigned hereby ratifies and confirms all that said attorneys and agents, or any of them, shall do or cause to be done by virtue hereof. The Power of Attorney may be signed in several counterparts.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities indicated on the 12th day of January, 2006.

Signature	Title
/s/  Robert W. Zoller, Jr. Robert W. Zoller, Jr.	Chief Executive Officer, President and Director (Principal Executive Officer)
/s/  James R. Kupferschmid James R. Kupferschmid	Vice President & Chief Financial Officer (Principal Financial Officer)
/s/  Jessica L. Wilson Jessica L. Wilson	Chief Accounting Officer (Principal Accounting Officer)
/s/  Gerald L. Gitner Gerald L. Gitner	Director
/s/  Myron M. Kaplan Myron M. Kaplan	Director

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Signature	Title
/s/  Raymond Greer Raymond Greer	Director
/s/  Joseph D. Ruffolo Joseph D. Ruffolo	Director
/s/  Laurie M. Shahon Laurie M. Shahon	Director

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EXHIBIT INDEX

Exhibit
Number			Description of Exhibit
	**1	.1	Form of Underwriting Agreement for Common Stock.
	3	.1	Second Amended and Restated Certificate of Incorporation of Kitty Hawk, Inc. (Exhibit 99.1 to Kitty Hawk, Inc.’s Form 8-K dated October 1, 2002, and incorporated herein by reference).
	3	.2	Certificate of Amendment of the Second Amended and Restated Certificate of Incorporation of Kitty Hawk, Inc., dated February 6, 2003 (Exhibit 3.2 to Kitty Hawk, Inc.’s amended Registration Statement on Form 8-A/A dated March 12, 2003, and incorporated herein by reference).
	3	.3	Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of Kitty Hawk, Inc., dated July 13, 2004 (Exhibit 3.3 to Kitty Hawk’s Registration Statement on Form 8-A dated August 23, 2004, and incorporated herein by reference).
	3	.4	Second Amended and Restated Bylaws of Kitty Hawk, Inc., dated October 31, 2003 (Exhibit 3.3 to Kitty Hawk, Inc.’s amended Registration Statement on Form 8-A/A dated November 12, 2003, and incorporated herein by reference).
	*4	.1	Certificate of Designation, Preferences and Rights of Series B Preferred Stock, par value $0.01 per share, of Kitty Hawk, Inc., filed as of November 14, 2005.
	*4	.2	Registration Rights Agreement, dated November 14, 2005, by and among Kitty Hawk, Inc. and the selling stockholders.
	*4	.3	Securities Purchase Agreement, dated November 9, 2005, by and among Kitty Hawk, Inc. and the selling stockholders.
	*4	.4	Standstill Agreement, dated November 14, 2005, by and among Kitty Hawk, Inc. and the selling stockholders.
	*4	.5	Form of Common Stock Purchase Warrant.
	*5	.1	Legal Opinion of Haynes and Boone, LLP.
	*23	.1	Consent of Haynes and Boone, LLP (included in its opinion filed as Exhibit 5.1).
	*23	.2	Consent of Grant Thornton LLP.
	*24	.1	Power of Attorney (incorporated in the signature page of the Registration Statement).

*	Filed herewith
**	To be filed by amendment or on Form 8-K

EX-4.1

Exhibit 4.1

CERTIFICATE OF DESIGNATIONS
OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
KITTY HAWK, INC.

     Kitty Hawk, Inc., a Delaware corporation, DOES HEREBY CERTIFY:

     That, pursuant to the authority conferred upon the Board of Directors of said corporation by virtue of its certificate of incorporation as amended and in accordance with Section 151 of the General Company Law of the State of Delaware (the “DGCL”), said Board of Directors has duly adopted a resolution by unanimous consent providing for the issuance of a series of preferred stock, par value $0.01 per share, designated as Series B Convertible Preferred Stock, which resolution reads as follows:

     BE IT RESOLVED, that the Board of Directors (the “Board”) of Kitty Hawk, Inc. (the “Company”) hereby authorizes the issuance of a series of preferred stock and fixes its designation, powers, preferences and relative, participating, optional or other special rights, and qualifications, limitations and restrictions thereof, as follows:

     Section 1. Designation. The distinctive serial designation of said series shall be “Series B Convertible Preferred Stock” (hereinafter called “Series B Preferred Stock”). Each share of Series B Preferred Stock shall be identical in all respects with all other shares of Series B Preferred Stock.

     Section 2. Number of Shares. The number of authorized shares of Series B Preferred Stock shall be, in aggregate, 15,000 shares, which each share of Series B Preferred Stock having a stated value of $1,000.00 per share (“Stated Value”). The number of authorized shares of Series B Preferred Stock may be increased or reduced by the Board by the filing of a certificate pursuant to the provisions of the DGCL stating that the change has been so authorized. When shares of Series B Preferred Stock are purchased or otherwise acquired by the Company or converted into Common Stock, par value $0.000001 per share, of the Company (the “Common Stock”), the Company shall take all necessary action to cause the shares of Series B Preferred Stock so purchased or acquired to be canceled and reverted to authorized but unissued shares of preferred stock undesignated as to series.

     Section 3. Rank. The Series B Preferred Stock shall, with respect to rights on liquidation, winding-up or dissolution, rank (a) junior to all claims of creditors, including the holders of the Company’s outstanding debt securities, (b) senior to all classes of Common Stock and to any class of preferred stock established hereafter by the Board, the terms of which expressly provide that it ranks junior to the Series B Preferred Stock as to rights on liquidation, winding-up or dissolution of the Company (collectively referred to, together with all classes of Common Stock of the Company, as “Junior Stock”), (c) on parity with any class of preferred stock established hereafter by the Board, the terms of which expressly provide that it ranks on a

parity with the Series B Preferred Stock as to rights on liquidation, winding-up or dissolution (collectively referred to as “Parity Stock”), and (d) junior to the Series A Preferred Stock of the Company, $0.01 par value, any other class of preferred stock established hereafter by the Board, the terms of which expressly provide that it ranks senior to the Series B Preferred Stock as to rights on liquidation, winding-up or dissolution (collectively referred to as “Senior Stock”), provided, however, that the Company may not create any class of Senior Stock without the consent of a majority of the Holders of Series B Preferred Stock.

     Section 4. Preference on Liquidation.

     (a) Subject to the liquidation rights of the holders of any Senior Stock and any Parity Stock, upon any voluntary or involuntary liquidation, winding-up or dissolution of the Company, holders of Series B Preferred Stock (each, a “Holder” and collectively, the “Holders”) shall be entitled to be paid, out of the assets of the Company available for distribution to stockholders, the liquidation preference equal to the Stated Value per share of Series B Preferred Stock and all accrued and unpaid dividends thereon, before any distribution is made on any Junior Stock, including, without limitation, any class of Common Stock of the Company.

     (b) If, upon any voluntary or involuntary liquidation, winding-up or dissolution of the Company, the assets of the Company available for distribution are not sufficient to pay in full the liquidation preference payments payable to the holders of Series B Preferred Stock and all Parity Stock, then the assets of the Company available for distribution among the Holders of the Series B Preferred Stock and any Parity Stock shall bear to each other the ratio that the aggregate Stated Value of the Series B Preferred Stock and the aggregate liquidation preference of any Parity Stock bear to each other.

     (c) For the purposes of this Certificate of Designations, neither the sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property or assets of the Company nor the consolidation, merger, share exchange or similar transaction with one or more entities shall be deemed to constitute a liquidation, winding-up or dissolution of the Company.

     (d) Written notice of any payment to the Holders of Series B Preferred Stock as a result of a liquidation, winding-up or dissolution of the Company, stating the payment date or dates when and the place or places where the amounts distributable in such circumstances shall be payable, shall be given by first-class mail, postage prepaid, not less than 30 days prior to any payment date stated therein, to the Holders of record of shares of Series B Preferred Stock at their respective addresses as the same shall appear on the books of the transfer agent for the Series B Preferred Stock.

     (e) After payment of the full amount of the liquidation preference, the Holders of shares of Series B Preferred Stock shall not be entitled to any further participation in any distribution of assets of the Company.

     Section 5. Voting Rights. On all matters presented to the holders of Common Stock, except as expressly provided herein or as otherwise required by law, the holders of Series B Preferred Stock shall vote as a single class with the holders of Common Stock and shall be

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entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Company. Each holder of Series B Preferred Stock shall have one vote for each share of Common Stock issuable upon conversion of its shares of Series B Preferred Stock on the record date for the vote.

     Section 6. Dividends.

     (a) The Holders shall be entitled to receive out of the assets of the Company legally available for that purpose, cumulative preferential dividends at a rate per annum of 8.00% of the Stated Value for each share of Series B Preferred Stock, and, except as provided in Section 6(b), no more, to be paid in accordance with the terms of this Section 6. Such dividends shall be cumulative from the original date of issuance of such shares of Series B Preferred Stock (the "Issue Date”) and shall be payable in arrears, when and as declared by the Board, on March 31, June 30, September 30 and December 31 of each year (each such date being herein referred to as a "Dividend Payment Date”), commencing on the first such Dividend Payment Date following the Issue Date; provided that if any Dividend Payment Date shall not be a business day, then the Dividend Payment Date shall be on the next succeeding day that is a business day; further provided that any amounts that would be payable hereunder on the first or second Dividend Payment Date after the Issue Date shall be not be paid on such date, and shall be accrued and paid in four equal quarterly installments without interest on the third, fourth, fifth and sixth Dividend Payment Dates after the Issue Date, respectively, in addition to any other amounts payable on such dates in accordance with this Section 6(a). The period from the Issue Date to the next Dividend Payment Date and each quarterly period between consecutive Dividend Payment Dates shall hereinafter be referred to as "Dividend Periods.” Dividends for the initial Dividend Period shall be pro rated on a daily basis commencing on and including the Issue Date on the basis of a 360-day year, consisting of twelve 30-day months. Each such dividend shall be paid to the holders of record of the Series B Preferred Stock as their names appear on the share register of the Company on the corresponding Record Date. As used above, the term “Record Date” means, with respect to the dividend payable on any Dividend Payment Date, the 15^th day of the calendar month in which such Dividend Payment Date occurs, or such other record date designated by the Board with respect to the dividend payable on such respective Dividend Payment Date not exceeding 30 days preceding such Dividend Payment Date. Dividends on account of arrears for any past Dividend Periods may be declared and paid, at any time, without reference to any Dividend Payment Date, to holders of record on a date designated by the Board, not exceeding 30 days preceding the payment date thereof, as may be fixed by the Board.

     (b) If, on any Dividend Payment Date after March 31, 2006, the Company fails to pay dividends, then until the dividends that were scheduled to be paid on such date are paid, such dividends shall cumulate with interest at 8.00% per annum. Dividends for any period less than a full quarterly Dividend Period or for a period commencing on a Dividend Payment Date and ending on a date the Series B Preferred Stock is converted to Common Stock shall cumulate on a day-to-day basis and shall be computed on the basis of a 360-day year, consisting of twelve 30-day months.

     Section 7. Conversion Rights. Each Holder of shares of Series B Preferred Stock shall have the right, subject as provided herein and to any applicable laws and regulations, at any time, at the Holder’s option, to convert each share of Series B Preferred Stock into such number

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of fully paid and nonassessable shares of Common Stock as is determined by dividing the Stated Value by $0.9604 (as adjusted pursuant to Section 8, the “Conversion Price”).

     (a) In order to exercise the conversion right, the Holder of each share of Series B Preferred Stock to be converted shall surrender that certificate representing such share, duly endorsed or assigned to the Company or in blank, at the office of the transfer agent for the Series B Preferred Stock and shall give written notice to the Company in the form of Exhibit A attached hereto. Such notice shall also state the name or names (with address) in which the certificate or certificates for the shares of Common Stock which shall be issuable upon such conversion shall be issued, and shall be accompanied by funds in an amount sufficient to pay any transfer or similar tax required by the provisions of Section 7(c) below. Each share surrendered for conversion shall, unless the shares issuable on conversion are to be issued in the same name as the name in which such share of the Series B Preferred Stock is registered, be duly endorsed by, or be accompanied by, instruments of transfer (in each case, in form reasonably satisfactory to the Company), duly executed by the Holder or such Holder’s duly authorized attorney-in-fact.

     (b) Within five business days following the surrender of certificates for shares of the Series B Preferred Stock for conversion and the receipt of such notice and funds, if any, as aforesaid, the Company shall issue and deliver to such Holder, or on such Holder’s written order, a certificate or certificates for the number of shares of Common Stock issuable upon the conversion of such shares of the Series B Preferred Stock in accordance with the provisions of this Section 7. Each conversion with respect to such shares of the Series B Preferred Stock shall be deemed to have been effected immediately prior to the close of business on the date on which the certificates for shares of the Series B Preferred Stock shall have been surrendered and such notice shall have been received by the Company as aforesaid, and the individual or entity entitled to receive the Common Stock issuable upon such conversion shall be deemed for all purposes to be the record Holder or Holders of such Common Stock upon that date.

     (c) If a Holder converts shares of the Series B Preferred Stock, the Company shall pay any and all documentary, stamp or similar issue or transfer tax payable in respect of the issue or delivery of the shares of the Series B Preferred Stock (or any other securities issued on account thereof pursuant hereto) or Common Stock upon the conversion; provided, however, the Company shall not be required to pay any such tax that may be payable because any such shares are issued in a name other than the name of the Holder. In the event that the shares are to be issued in a name other than that of the Holder, the Holder shall provide the funds necessary to pay any and all of the foregoing taxes.

     (d) The Company shall reserve out of its authorized but unissued Common Stock or its Common Stock held in treasury enough shares of Common Stock to permit the conversion of all of the outstanding shares of the Series B Preferred Stock. The Company shall from time to time, in accordance with the DGCL, increase the authorized amount of its Common Stock if at any time the authorized amount of its Common Stock remaining unissued shall not be sufficient to permit the conversion of the shares of the Series B Preferred Stock at the time outstanding, subject to the foregoing restriction on conversion. All shares of Common Stock delivered upon conversion of the shares of the Series B Preferred Stock will, upon delivery, be duly authorized and validly issued, fully paid and nonassessable, free from all taxes, liens and charges with respect to the issue thereof.

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     (e) If any conversion of Series B Preferred Stock would create a fractional share of Common Stock, such fractional share of Common Stock shall be disregarded and the Company shall pay cash to the Holder in an amount calculated by multiplying the amount of the fractional share by the Conversion Price.

     Section 8. Conversion Price Adjustments. The Conversion Price shall be subject to adjustment from time to time upon the happening of certain events as follows:

     (a) If at any time or from time to time after the date hereof, the Company shall subdivide (by way of stock dividend, stock split or otherwise) its outstanding shares of Common Stock, the Conversion Price in effect immediately prior to such subdivision shall be reduced proportionately, and conversely, in the event the outstanding shares of Common Stock shall be combined (whether by stock combination, reverse stock split or otherwise) into a smaller number of shares, the Conversion Price in effect immediately prior to such combination shall be increased proportionately. The Conversion Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 8(a).

     (b) If at any time after the date hereof, the Company shall declare a dividend or make any other distribution upon any class or series of stock of the Company payable in shares of Common Stock or securities convertible into shares of Common Stock, the Conversion Price shall be adjusted proportionately to reflect the issuance of any shares of Common Stock or convertible securities, as the case may be, issuable in payment of such dividend or distribution. The Conversion Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 8(b).

     (c) If the Common Stock shall be changed into the same or a different number of shares of any class(es) or series of stock, whether by reclassification or otherwise (other than an adjustment under Section 8(a) and Section 8(b) or a merger, consolidation, or sale of assets provided for under Section 8(d)), then and in each such event, the Holder hereof shall have the right thereafter to convert each share of Series B Preferred Stock into the kind and amount of shares of stock and other securities and property receivable upon such reclassification, or other change by holders of the number of shares of Common Stock into which such share of Series B Preferred Stock would have been convertible immediately prior to such reclassification or change, all subject to successive adjustments thereafter from time to time pursuant to and in accordance with, the provisions of this Section 8(c).

     (d) In the event that, at any time or from time to time after the date hereof, the Company shall (i) effect a reorganization, (ii) consolidate with or merge into any other entity, or (iii) sell or transfer all or substantially all of its properties or assets, or more than 50% of the voting capital stock of the Company (whether issued and outstanding, newly issued, from treasury, or any combination thereof), to any other individual or entity under any plan or arrangement contemplating the consolidation or merger, sale or transfer, or dissolution of the Company, then, in each such case, the Holder, upon the conversion of its Series B Preferred Stock as provided in herein at any time or from time to time after the consummation of such reorganization, consolidation, merger or sale or the effective date of such dissolution, as the case may be, shall receive, in lieu of the Common Stock issuable on such conversion immediately prior to such consummation or such effective date, as the case may be, the stock and property

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(including cash) to which the Holder would have been entitled upon the consummation of such consolidation or merger, or sale or transfer, or in connection with such dissolution, as the case may be, if the Holder had so converted its Series B Preferred Stock immediately prior thereto (assuming the payment by the Holder of the Conversion Price therefor as required hereby in a form permitted hereby, which payment shall be included in the assets of the Company for the purposes of determining the amount available for distribution), all subject to successive adjustments thereafter from time to time pursuant to, and in accordance with, the provisions of this Section 8. The Company shall not effect any such consolidation, merger or sale unless prior to the consummation thereof the successor entity (if other than the Company) resulting from such consolidation or merger or the entity purchasing such assets assumes by written instrument (in form and substance reasonably satisfactory to the Holder) the obligation to deliver the stock or property (including cash) as, in accordance with the foregoing provisions, the Holder may be entitled to acquire.

     Section 9. Holder Redemption Rights.

     (a) Any time on or after November 14, 2010, any Holder of any Series B Preferred Stock shall have the right to cause the Company to redeem, in whole or in part (but only in whole-number amounts), such Holder’s Series B Preferred Stock (a “Holder Redemption”) by payment to the Holder of an amount equal to the Stated Value of such shares of Series B Preferred Stock and all accrued and unpaid dividends thereon (the “Redemption Price”), to the extent permitted by applicable law and so long as the Holder shall have delivered to the Company at least 10 business days prior written notice specifying the date on which such Holder Redemption is to be effected.

     (b) Upon a Holder Redemption, payment of the Redemption Price with respect to each share of Series B Preferred Stock redeemed, which shall be in the form of a Company check representing immediately available funds, to such Holder will be effected simultaneously with the return of such share by such Holder to the Company. In addition, to the extent a Holder wants to redeem less than all of such Holder’s Series B Preferred Stock, the Company shall also deliver a certificate evidencing the Holder’s unredeemed Series B Preferred Stock. To the extent that the Company fails to pay the full amount of the Redemption Price upon a Holder Redemption, the unpaid amount shall accrue interest at a rate of 8.00% per annum.

     Section 10. Company Redemption Rights.

     (a) Upon at least 30 days’ written notice (the “Company Redemption Notice”), any time on or after November 14, 2006, if the VWAP (defined below) is equal to at least 200% of the Conversion Price, the Company shall have the right to redeem, in whole or in part, the Series B Preferred Stock outstanding at the Redemption Price (a “Company Redemption”), to the extent permitted by applicable law and so long as the Company shall have identified in the Company Redemption Notice the date on which such Company Redemption is to be effected (the “Company Redemption Date”). If the Company should elect to redeem less than all of the Series B Preferred Stock outstanding, the Company shall select those shares of Series B Preferred Stock to be redeemed by lot. Nothing contained herein shall limit a Holder’s right to convert such Holder’s Series B Preferred Stock at any time prior to the Company Redemption Date. As used herein, “VWAP” means the volume weighted average closing price of the

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Common Stock on any national securities exchange or quotation service upon which the Common Stock is listed or quoted, measured over a period of 30 consecutive trading days ending one such day prior to the date of the Company Redemption Notice.

     (b) Upon the Company Redemption Date, dividends on the shares of Series B Preferred Stock subject to such Company Redemption Notice (the “Redeemed Shares”) shall cease to accrue, the Redeemed Shares shall no longer be deemed to be outstanding and shall not have the status of shares of Series B Preferred Stock, and all rights of the Holders as shareholders of the Company with respect to such Redeemed Shares (except the right to receive the Redemption Price for the Redeemed Shares) shall cease. Upon surrender of the certificates for the Redeemed Shares in accordance with Company Redemption Notice (properly endorsed or assigned for transfer if the Company shall so require and the Company Redemption Notice shall so state), the Redeemed Shares shall be redeemed by the Company at the Redemption Price. To the extent that the Company fails to pay the full amount of the Redemption Price on the Company Redemption Date, the unpaid amount shall accrue interest at a rate of 8.00% per annum.

     (c) To the extent the Company shall redeem less than all of the Series B Preferred Stock outstanding, the Company shall also deliver certificates evidencing the unredeemed Series B Preferred Stock.

     Section 11. Preemptive Rights. For so long as a Holder continues to beneficially own (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended and then in effect) at least 20% of the Series B Preferred Stock purchased by such Holder on or before November 14, 2005, such Holder shall have the right to participate pro rata in future issuances of shares of capital stock of the Company for the purpose of raising additional funds for use by the Company, in an amount not to exceed the proportion that the number of shares of capital stock of the Company beneficially owned by such Holder bears to the fully-diluted number of shares of capital stock outstanding immediately prior to such issuance. Notwithstanding the foregoing, the preemptive rights of the Holders shall not apply to or include the issuance of Common Stock (i) pursuant to a subdivision of the outstanding shares of Common Stock into a larger number of shares of Common Stock, including stock dividends and stock splits, (ii) pursuant to the conversion, exchange or exercise of any instrument convertible, exchangeable or exercisable into shares of Common Stock, provided that the issuance of such instrument was authorized by the Board of Directors of the Company on or prior to November 14, 2005, (iii) pursuant to the exercise or conversion of warrants, options or restricted stock units granted by the Company, including warrants issued by the Company in connection with the issuance of debt instruments by the Company, (iv) pursuant to any compensation or incentive plan, arrangement or award adopted, issued or granted by the Company for its employees, members of its Board of Directors or its consultants, (v) in consideration of the acquisition of another entity that is approved by the Board of Directors of the Company, or (vi) in connection with any corporate partnering transaction, strategic alliance, or other similar agreement approved by the Board of Directors. The Holders shall have 10 days following delivery of written notice from the Company of its intention to issue additional capital stock to exercise these preemptive rights by written notice to the Company exercising such rights and specifying the number of shares of such capital stock that it intends to purchase. These preemptive rights shall terminate (i) with respect to all Holders upon a merger, consolidation, or

7

sale of assets provided for under Section 8(d), and (ii) with respect to any Holder and the future issuance of capital stock with respect to which such Holder delivered its notice of exercise of its preemptive rights, upon the failure of such Holder to deliver to the Company, on or before the date of such future issuance of capital stock, the consideration for the number of shares of capital stock specified by such Holder in its notice of exercise of its preemptive rights. Company shall not be obligated to deliver to any Holder any additional shares of capital stock pursuant to such Holder’s exercise of preemptive rights unless it has timely received notice of exercise and the required consideration therefor from such Holder.

* * * * *

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     IN WITNESS WHEREOF, the Company has caused this Certificate to be duly executed on its behalf by its undersigned Chief Executive Officer and attested to by its Chief Financial Officer this 14^th day of November, 2005.

KITTY HAWK, INC., a Delaware corporation
By:	/s/ Robert W. Zoller, Jr.
	Name:	Robert W. Zoller, Jr.
	Title:	President and Chief Executive Officer

ATTEST:
By:	/s/ Steven E. Markhoff
Name:	Steven E. Markhoff
Title:	Vice President of Strategic Planning,
	General Counsel and Secretary

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EXHIBIT A

HOLDER’S CONVERSION NOTICE

To:	Kitty Hawk, Inc.
	1515 West 20th Street
	P. O. Box 612787
	DFW International Airport, Texas 75261

     The undersigned Holder of the Series B Convertible Preferred Stock, par value $0.01 (the "Series B Preferred Stock”), of Kitty Hawk, Inc. (the “Company”), in the aggregate number of 15,000 shares of Series B Preferred Stock irrevocably exercises the option to convert such number of shares of Series B Preferred Stock into shares of Common Stock of the Company, par value U.S. $0.000001 (the “Common Stock”), in accordance with the terms of the Certificate of Designations relating to the issuance by the Company of the Preferred Stock, and directs that the Common Stock issuable and deliverable upon such conversion be issued and delivered to the undersigned in the name and at the address set forth below.

     If the Common Stock is to be issued in the name of an individual or entity other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith funds in an amount sufficient to pay any such taxes.

     All terms used and not otherwise defined herein shall have the respective meanings set forth in the Certificate of Designations.

DATE:
	Name of Holder
	Signature(s) of Holder
Address for Delivery of Shares:
Name for Registration of Shares (if different than Holder):

A-1

EX-4.2

Exhibit 4.2

REGISTRATION RIGHTS AGREEMENT

by and among

KITTY HAWK, INC.,

and

CERTAIN PURCHASERS
IDENTIFIED HEREIN

Dated as of November 14, 2005

TABLE OF CONTENTS

		Page
ARTICLE I. Definitions			1
ARTICLE II. Registration Rights			3
2.1	Required Registration		3
2.2	Current Public Information		4
2.3	Demand Registration		4
2.4	Piggyback Registration		6
2.5	Holdback Agreements		8
2.6	Registration Procedures		9
2.7	Conditions Precedent to Company’s Obligations Pursuant to this Agreement		11
2.8	Fees and Expenses		11
2.9	Indemnification		12
2.10	Participation in Registrations		15
ARTICLE III. Transfers of Certain Rights			16
3.1	Transfer		16
3.2	Transferees		16
3.3	Subsequent Transferees		16
ARTICLE IV. Miscellaneous			16
4.1	Recapitalizations, Exchanges, etc.		16
4.2	Injunctive Relief		17
4.3	Successors and Assigns, Third Party Beneficiaries		17
4.4	Notices		17
4.5	Choice of Law		18
4.6	Entire Agreement; Amendments and Waivers		18
4.7	Counterparts		18
4.8	Invalidity		18
4.9	Headings		19
4.10	Forum; Service of Process		19
4.11	No Prejudice		19
4.12	Termination of Rights		19

REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT, dated as of November 14, 2005, is entered into by and among KITTY HAWK, INC., a Delaware corporation (the “Company”), and those individuals and entities identified on the signature page(s) to this Agreement (each a “Purchaser,” and together, the “Purchasers”).

RECITALS

     A. The Company desires to issue and sell 15,000 shares of its Series B Convertible Preferred Stock, par value $0.01 (the “Preferred Stock”), and warrants to acquire 3,536,585 shares of its Common Stock, par value $0.000001 (the “Common Stock”), to the Purchasers as set forth in the Securities Purchase Agreement dated as of November 9, 2005 entered into by and between the Company and the Purchasers (the “Securities Purchase Agreement”); and

     B. It is a condition precedent to the consummation of the transactions contemplated by the Securities Purchase Agreement that the Company provide for the rights set forth in this Agreement;

AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements hereinafter contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound, the parties hereto hereby agree as follows:

ARTICLE I.
DEFINITIONS

     “Affiliate” means any entity controlling, controlled by or under common control with the Company. For the purposes of this definition, “control” shall have the meaning presently specified for that word in Rule 405 promulgated by the Commission under the Securities Act.

     “Business Day” means a day other than a Saturday or Sunday or any federal or New York holiday.

     “Certificate of Designations” means the Certificate of Designations of the Preferred Stock.

     “Closing Date” has the meaning ascribed to such term in the Securities Purchase Agreement.

     “Commission” means the United States Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

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     “Common Stock” has the meaning set forth in the Recitals.

     “Company” has the meaning set forth in the preamble.

     “Designated Holder” means a holder of Registrable Securities.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.

     “Indemnified Party” has the meaning set forth in Section 2.9.

     “Losses” has the meaning set forth in Section 2.9.

     “Majority Holders” means holders of a majority of the Registrable Securities.

     “Person” means any individual, company, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, governmental body or other entity.

     “Piggyback Registration” has the meaning set forth in Section 2.4.

     “Preferred Stock” has the meaning set forth in the Recitals.

     “Purchaser(s)” has the meaning set forth in the preamble.

     “Registrable Securities” means, subject to the immediately following sentences, (i) shares of Common Stock issued or issuable upon conversion of the shares of Preferred Stock acquired by the applicable Purchaser from the Company pursuant to the Securities Purchase Agreement, (ii) shares of Common Stock issued or issuable upon exercise of the Warrants acquired by the applicable Purchaser from the Company pursuant to the Securities Purchase Agreement, and (iii) any shares of Common Stock beneficially owned (as defined in Rule 13d-3 adopted by the Commission under the Exchange Act) by Lloyd I. Miller III as of November 9, 2005, and (iv) any shares of Common Stock issued or issuable, directly or indirectly, with respect to the securities referred to in clauses (i), (ii) or (iii) by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular shares of Common Stock constituting Registrable Securities, if the Company has complied with the requirements of the second paragraph of Section 2.1, such shares of Common Stock will cease to be Registrable Securities for purposes of Section 2.1 and Section 2.3 following the expiration of the Registration Period. In addition, any particular shares of Common Stock constituting Registrable Securities will cease to be Registrable Securities when they (x) have been effectively registered under the Securities Act and disposed of in accordance with a Registration Statement covering them, (y) have been sold to the public pursuant to Rule 144 (or by similar provision under the Securities Act), or (z) are eligible for resale under Rule 144(k) (or by similar provision under the Securities Act) without any limitation on the amount of securities that may be sold under paragraph (e) thereof.

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     “Registration Statement” means a registration statement on Form S-3 (or, if the Company is not eligible to use Form S-3, such other appropriate registration form of the Commission pursuant to which the Company is eligible to register the resale of Registrable Securities) filed by the Company under the Securities Act which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all material incorporated by reference in such registration statement, which shall permit the Designated Holders to offer and sell, on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, the Registrable Securities.

     “Registration Period” means the two years, plus any additional periods required by the second paragraph of Section 2.1, during which the Registration Statement contemplated by Section 2.1 is required to remain effective.

     “Representatives” has the meaning set forth in Section 2.9.

     “Required Registration Statement” has the meaning set forth in Section 2.1.

     “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

     “Securities Purchase Agreement” has the meaning set forth in the recitals.

     “Warrants” has the meaning ascribed to such term in the Securities Purchase Agreement.

ARTICLE II.
REGISTRATION RIGHTS

     2.1 Required Registration.

     The Company shall use its commercially reasonable efforts to prepare and file, not later than 60 days from the Closing Date (or, if such 60^th day is not a Business Day, by the first Business Day thereafter), a Registration Statement with the Commission (the “Required Registration Statement”). The Company agrees to include in the Required Registration Statement all information that the Designated Holders shall reasonably request.

     The Company shall use its commercially reasonable efforts to keep the Required Registration Statement continuously effective for a period of two years after the Registration Statement first becomes effective, plus the number of days during which such Registration Statement was not effective or usable pursuant to Sections 2.5(b), 2.6(e) or 2.6(i), or such shorter period as will terminate when all of the Registrable Securities covered by the Required Registration Statement have been disposed of in accordance with the Required Registration Statement or have otherwise ceased to be Registrable Securities. In the event the Company shall give any notice pursuant to Sections 2.6(e) or (i), the additional time period mentioned in this Section 2.1 during which the Required Registration Statement is to remain effective shall be

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extended by the number of days during the period from and including the date of the giving of such notice pursuant to Sections 2.6(e) or 2.6(i) to and including the date when each seller of a Registrable Security covered by the Registration Statement shall have received the copies of the supplemented or amended prospectus contemplated by Sections 2.6(e).

     2.2 Current Public Information.

     The Company covenants that it will use its commercially reasonable efforts to file all reports required to be filed by it under the Exchange Act and the rules and regulations adopted by the Commission thereunder, and will use its commercially reasonable efforts to take such further action as the Designated Holders may reasonably request, all to the extent required to enable the holders of Registrable Securities to sell Registrable Securities pursuant to Rule 144 adopted by the Commission under the Securities Act or any similar rule or regulation hereafter adopted by the Commission. The Company shall, upon the request of a Designated Holder, deliver to such Designated Holder a written statement as to whether it has complied with such requirements during the 12-month period immediately preceding the date of such request.

     2.3 Demand Registration

     (a) Subject to Section 2.3(g), upon the written request of the Majority Holders, requesting that the Company effect the registration under the Securities Act of all or part of such Designated Holders’ Registrable Securities and specifying the intended method of disposition thereof, the Company will promptly give written notice of such requested registration to all Designated Holders, and thereupon the Company will use its commercially reasonable efforts to effect as expeditiously as possible the registration under the Securities Act of the following:

     (i) the Registrable Securities that the Company has been so requested to be registered by such Designated Holders for disposition in accordance with the intended method of disposition stated in such request;

     (ii) all other Registrable Securities the holders of which shall have made a written request to the Company for registration thereof within 30 days after the giving of such written notice by the Company (which request shall specify the intended method of disposition of such Registrable Securities); and

     (iii) all shares of Common Stock which the Company or Persons entitled to exercise “piggy-back” registration rights pursuant to contractual commitments of the Company may elect to register in connection with the offering of Registrable Securities pursuant to this Section 2.3;

all to the extent requisite to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities and the additional shares of Common Stock, if any, so to be registered; provided, that, the provisions of this Section 2.3 shall not require the Company to effect more than one registration of Registrable Securities in addition to the Required Registration Statement contemplated by Section 2.1.

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     (b) The registrations under this Section 2.3 shall be on an appropriate Registration Statement that permits the disposition of such Registrable Securities in accordance with the intended methods of distribution specified by the Majority Holders in their request for registration. The Company agrees to include in any such Registration Statement all information that Designated Holders of Registrable Securities being registered shall reasonably request.

     (c) A registration requested pursuant to this Section 2.3 shall not be deemed to have been effected (i) unless a Registration Statement with respect thereto has become effective; provided, that a Registration Statement which does not become effective after the Company has filed a Registration Statement with respect thereto solely by reason of the refusal to proceed of the Majority Holders shall be deemed to have been effected by the Company at the request of the Majority Holders unless the Designated Holders electing to have Registrable Securities registered pursuant to such Registration Statement shall have elected to pay all fees and expenses otherwise payable by the Company in connection with such registration pursuant to Section 2.8, (ii) if, after it has become effective, such registration is withdrawn by the Company (other than at the request of the Majority Holders) or interfered with by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason prior to the expiration of a 180 day period following such Registration Statement’s effectiveness, or (iii) if the conditions to closing specified in any purchase agreement or underwriting agreement entered into in connection with such registration are not satisfied, other than due to an act or omission by the Designated Holders electing to have Registrable Securities registered pursuant to such Registration Statement.

     (d) If a requested registration pursuant to this Section 2.3 involves an underwritten offering, the underwriter or underwriters thereof shall be selected by the holders of a majority (by number of shares) of the Registrable Securities requested to be included in such Registration Statement and shall be reasonably acceptable to the Company.

     (e) If a requested registration pursuant to this Section 2.3 involves an underwritten offering, and the managing underwriter shall advise the Company in writing (with a copy to each Designated Holder of Registrable Securities requesting registration) that, in its opinion, the number of securities requested to be included in such registration (including securities of the Company which are not Registrable Securities) exceeds the number which can be sold in such offering within a price range reasonably acceptable to the Company and to the holders of a majority (by number of shares) of the Registrable Securities requested to be included in such Registration Statement, the Company will include in such registration, to the extent of the number which the Company is so advised can be sold in such offering, (i) first, the Registrable Securities which have been requested to be included in such registration by the Designated Holders pursuant to this Agreement (pro rata based on the amount of Registrable Securities sought to be registered by such persons), (ii) second, provided that no securities sought to be included by the Designated Holders have been excluded from such registration, the securities of other persons entitled to exercise “piggy-back” registration rights pursuant to contractual commitments of the Company (pro rata based on the amount of securities sought to be registered by such persons) and (iii) third, securities the Company proposes to register.

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     (f) The Company shall use its commercially reasonable efforts to keep any Registration Statement filed pursuant to this Section 2.3 continuously effective (i) for a period of two years after the Registration Statement first becomes effective, plus the number of days during which such Registration Statement was not effective or usable pursuant to Sections 2.5(b), 2.6(e) or 2.6(i); (ii) if such Registration Statement related to an underwritten offering, for such period as in the opinion of counsel for the underwriters a prospectus is required by law to be delivered in connection with sales of Registrable Securities by an underwriter or dealer, or (iii) for such shorter period as will terminate when all of the Registrable Securities covered by the Required Registration Statement have been disposed of in accordance with the Required Registration Statement or have otherwise ceased to be Registrable Securities. In the event the Company shall give any notice pursuant to Sections 2.6(e) or (i), the additional time period mentioned in Section 2.3(f)(i) during which the Required Registration Statement is to remain effective shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Sections 2.6(e) or (i) to and including the date when each seller of a Registrable Security covered by the Registration Statement shall have received the copies of the supplemented or amended prospectus contemplated by Sections 2.6(e).

     (g) The right of Designated Holders to register Registrable Securities pursuant to this Section 2.3 is only exercisable if (i) prior to the expiration of the Registration Period, the Company becomes ineligible to register the Registrable Securities on the Registration Statement contemplated by Section 2.1 or such Registration Statement otherwise becomes unusable or ineffective and the Company is not able to correct the misstatements, have the applicable stop order rescinded or otherwise restore the effectiveness of the Registration Statement as contemplated by this Agreement, and (ii) the Designated Holders desiring to dispose of Registrable Securities pursuant to the Registration Statement to be filed in accordance with this Section 2.3 furnish to the Company such information regarding such Designated Holders, the Registrable Securities held by such Designated Holders, and the method of disposition of such Registrable Securities as shall be required by the Securities Act to effect the registration demanded under this Section 2.3.

     2.4 Piggyback Registration

     (a) Whenever the Company proposes to register any of its securities under the Securities Act (other than pursuant to a registration pursuant to Section 2.3 or a registration on Form S-4 or S-8 or any successor or similar forms) and the registration form to be used may be used for the registration of Registrable Securities, whether or not for sale for its own account, the Company will give prompt written notice (but in no event less than 20 days before the anticipated filing date) to all Designated Holders, and such notice shall describe the proposed registration and distribution and offer to all Designated Holders the opportunity to register the number of Registrable Securities as each such Designated Holder may request. Subject to Section 2.4(f), the Company will include in such registration statement all Registrable Securities with respect to which the Company has received written requests for inclusion therein within 15 days after the Designated Holders’ receipt of the Company’s notice (a “Piggyback Registration”).

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     (b) The Company shall use its commercially reasonable efforts to cause the managing underwriter or underwriters of a proposed underwritten offering to permit the Registrable Securities requested to be included in a Piggyback Registration to be included on the same terms and conditions as any similar securities of the Company or any other security holder included therein and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method of distribution thereof.

     (c) Any Designated Holder shall have the right to withdraw its request for inclusion of its Registrable Securities in any Registration Statement pursuant to this Section 2.4 by giving written notice to the Company of its request to withdraw; provided, that in the event of such withdrawal (other than pursuant to Section 2.4(e) hereof), the Company shall not be required to reimburse such holder for the fees and expenses referred to in Section 2.8 hereof incurred by such Designated Holder prior to such withdrawal. The Company may withdraw a Piggyback Registration at any time prior to the time it becomes effective.

     (d) If (i) a Piggyback Registration involves an underwritten offering of the securities being registered, whether or not for sale for the account of the Company, to be distributed (on a firm commitment basis) by or through one or more underwriters of recognized standing under underwriting terms appropriate for such a transaction, and (ii) the managing underwriter of such underwritten offering shall inform the Company and Designated Holders requesting such registration by letter of its belief that the distribution of all or a specified number of such Registrable Securities concurrently with the securities being distributed by such underwriters would interfere with the successful marketing of the securities being distributed by such underwriters (such writing to state the basis of such belief and the approximate number of such Registrable Securities which may be distributed without such effect), then the Company will be required to include in such registration only the amount of securities which it is so advised should be included in such registration. In such event: (x) in cases initially involving the registration for sale of securities for the Company’s own account, securities shall be registered in such offering in the following order of priority: (i) first, the securities which the Company proposes to register, (ii) second, Registrable Securities and securities which have been requested to be included in such registration by Persons entitled to exercise “piggy-back” registration rights pursuant to contractual commitments of the Company (pro rata based on the amount of securities sought to be registered by Designated Holders and such other Persons); and (y) in cases not initially involving the registration for sale of securities for the Company’s own account, securities shall be registered in such offering in the following order of priority: (i) first, the securities of any Person whose exercise of a “demand” registration right pursuant to a contractual commitment of the Company is the basis for the registration, (ii) second, Registrable Securities and securities which have been requested to be included in such registration by Persons entitled to exercise “piggy-back” registration rights pursuant to contractual commitments of the Company (pro rata based on the amount of securities sought to be registered by Designated Holders and such other Persons), (iii) third, the securities which the Company proposes to register.

     (e) If, as a result of the proration provisions of this Section 2.4, any Designated Holders shall not be entitled to include all Registrable Securities in a Piggyback

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Registration that such Designated Holders has requested to be included, such holder may elect to withdraw his request to include Registrable Securities in such registration.

     (f) The right of Designated Holders to register Registrable Securities pursuant to this Section 2.4 is only exercisable if (i) prior to the expiration of the Registration Period, the Company becomes ineligible to register the Registrable Securities on the Registration Statement contemplated by Section 2.1 or such Registration Statement otherwise becomes unusable or ineffective and the Company is not able to correct the misstatements, have the applicable stop order rescinded or otherwise restore the effectiveness of the Registration Statement as contemplated by this Agreement, and (ii) the Designated Holders desiring to dispose of Registrable Securities pursuant to the Registration Statement to be filed in accordance with this Section 2.4 furnish to the Company such information regarding such Designated Holders, the Registrable Securities held by such Designated Holders, and the method of disposition of such Registrable Securities as shall be required by the Securities Act to effect the registration demanded under this Section 2.4.

     2.5 Holdback Agreements.

     (a) To the extent not inconsistent with applicable law, in connection with a public offering of securities of the Company, upon the request of the Company or the underwriter (such request to be made only upon terms equally applicable in length of duration and all other respects to the Designated Holders, the Company, its affiliates and any officers (at the vice president or more senior level) or directors of the Company or any of their affiliates), in the case of an underwritten public offering of the Company’s securities, each Designated Holder who beneficially owns (as defined in Rule 13d-3 adopted by the Commission under the Exchange Act) at least 5% of the outstanding capital stock of the Company will not effect any public sale or distribution (other than those included in the registration statement being filed with respect to such public offering) of any securities of the Company, or any securities, options or rights convertible into or exchangeable or exercisable for such securities during the 14 days prior to and the 90-day period beginning on such effective date, unless (in the case of an underwritten public offering) the managing underwriters otherwise agree to a shorter period of time. Neither the Company nor the underwriter shall amend, terminate or waive a “lock up” agreement unless each “lock up” agreement with a Designated Holder is also amended or waived in a similar manner or terminated, as the case may be.

     (b) The Company shall have the right at any time, to suspend the filing of a Registration Statement under Section 2.3 or require that the Designated Holders of Registrable Securities suspend further open market offers and sales of Registrable Securities pursuant to a Registration Statement filed hereunder (i) for a period not to exceed an aggregate of 30 days in any six month period or an aggregate of 60 days in any twelve-month period for valid business reasons (not including avoidance of their obligations hereunder) to avoid premature public disclosure of a pending corporate transaction, including pending acquisitions or divestitures of assets, mergers and combinations and similar events; and (ii) upon the occurrence of any of the events specified in Sections 2.6(e) or (i).

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     2.6 Registration Procedures.

     The Company will use its commercially reasonable efforts to effect the registration of Registrable Securities pursuant to this Agreement in accordance with the intended methods of disposition thereof, and pursuant thereto the Company will:

     (a) before filing the Registration Statement, furnish to the counsel selected by the holders of a majority of the Registrable Securities a copy of such Registration Statement, and will provided such counsel with all correspondence with the Commission regarding the Registration Statement;

     (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 provided for in Section 2.1 or Section 2.3, or the periods contemplated by the Company or the Persons requesting any Registration Statement filed pursuant to Section 2.4;

     (c) furnish to each seller of Registrable Securities such number of copies of such Registration Statement, each amendment and supplement thereto, the prospectus included in the Registration Statement (including each preliminary prospectus) and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller;

     (d) use its commercially reasonable efforts to register or qualify such Registrable Securities under such other state securities or blue sky laws as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller and to keep each such registration or qualification (or exemption therefrom) effective during the period which the Registration Statement is required to be kept effective (provided, that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph, (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction);

     (e) notify each seller of such Registrable Securities, 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 included in the Registration Statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading in the light of the circumstances under which they were made, and, at the request of any such seller, the Company will as soon as possible prepare and furnish to such seller a reasonable number of copies of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading in the light of the circumstances under which they were made;

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     (f) cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed and, if not so listed, to be approved for trading on any automated quotation system of a national securities association on which similar securities of the Company are quoted;

     (g) provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such Registration Statement;

     (h) enter into such customary agreements (including underwriting agreements) and take all other customary and appropriate actions as the holders of a majority of the Registrable Securities being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities;

     (i) notify each Designated Holder of any stop order issued by the Commission;

     (j) otherwise comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;

     (k) in the event of the issuance of any stop order suspending the effectiveness of a Registration Statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any securities included in such Registration Statement for sale in any jurisdiction, the Company will use its commercially reasonable efforts to promptly obtain the withdrawal of such order;

     (l) if requested by a Designated Holder, obtain one or more comfort letters, dated the effective date of the Registration Statement (and, if such registration includes an underwritten offering, dated the date of the closing under the underwriting agreement), signed by the Company’s independent public accountants in customary form and covering such matter of the type customarily covered by comfort letters as the holders of a majority of the Registrable Securities being sold reasonably request;

     (m) subject to execution and delivery of mutually satisfactory confidentiality agreements, make available at reasonable times for inspection by any seller of Registrable Securities, any managing underwriter participating in any disposition of such Registrable Securities pursuant to the Registration Statement, and any attorney, accountant or other agent retained by such seller or any managing underwriter, during normal business hours of the Company at the Company’s corporate office in DFW Airport, Texas and without unreasonable disruption of the Company’s business or unreasonable expense to Company and solely for the purpose of due diligence with respect to the Registration Statement, non-confidential, legally disclosable, financial and other records and pertinent corporate documents of the Company and its subsidiaries reasonable requested by such persons, and cause the Company’s employees and

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independent accountants to supply all similar information reasonably requested by any such seller, managing underwriter, attorney, accountant or agent in connection with the Registration Statement, as shall be reasonably necessary to enable them to exercise their due diligence responsibility;

     (n) cooperate with each seller of Registrable Securities and each underwriter participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the National Association of Securities Dealers; and

     (o) take all other steps reasonably necessary to effect the registration of the. Registrable Securities contemplated hereby.

     2.7 Conditions Precedent to Company’s Obligations Pursuant to this Agreement.

     It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement that each of the Designated Holders whose Registrable Securities are to be registered pursuant to this Agreement shall furnish such Designated Holder’s written agreement to be bound by the terms and conditions of this Agreement prior to performance by the Company of its obligations under this Agreement. By executing and delivering this Agreement, each Designated Holder represents and warrants that the information concerning, and representations and warranties by, such Designated Holder, including information concerning the securities of the Company held, beneficially or of record, by such Designated Holder, furnished to the Company pursuant to the Securities Purchase Agreement or otherwise, are true and correct as if the same were represented and warranted on the date any Registration Statement required pursuant to this Agreement is filed with the Commission or the date of filing with the Commission of any amendment thereto, and each Designated Holder covenants to immediately notify the Company in writing of any change in any such information, representation or warranty and to refrain from offering or disposing of any securities pursuant to any Registration Statement until the Company has reflected such change in such Registration Statement. By executing and delivering this Agreement, each Designated Holder further agrees to furnish any additional information as the Company may reasonably request in connection with any action to be taken by the Company pursuant to this Agreement, and to pay such Designated Holder’s expenses which are not required to be paid by the Company pursuant to this Agreement.

     2.8 Fees and Expenses.

     All expenses incident to the Company’s performance of or compliance with this Agreement including, without limitation, all registration and filing fees payable by the Company, fees and expenses of compliance by the Company with securities or blue sky laws, printing expenses of the Company, messenger and delivery expenses of the Company, and fees and disbursements of counsel for the Company and all independent certified public accountants of the Company, and other Persons retained by the Company will be borne by the Company, and the Company will pay its internal expenses (including, without limitation, all salaries and expenses of the Company’s employees performing legal or accounting duties), the expense of

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any annual audit or quarterly review, the expense of any liability insurance of the Company and the expenses and fees for listing or approval for trading of the securities to be registered on each securities exchange on which similar securities issued by the Company are then listed or on any automated quotation system of a national securities association on which similar securities of the Company are quoted. The Company shall have no obligation to pay any underwriting discounts or commissions attributable to the sale of Registrable Securities and any of the expenses incurred by any Designated Holder which are not payable by the Company, such costs to be borne by such Designated Holder or Holders, including, without limitation, underwriting fees, discounts and expenses, if any, applicable to any Designated Holder’s Registrable Securities; fees and disbursements of counsel or other professionals that any Designated Holder may choose to retain in connection with the Registration Statement filed pursuant to this Agreement; selling commissions or stock transfer taxes applicable to the Registrable Securities registered on behalf of any Designated Holder; any other expenses incurred by or on behalf of such Designated Holder in connection with the offer and sale of such Designated Holder’s Registrable Securities other than expenses which the Company is expressly obligated to pay pursuant to this Agreement.

     2.9 Indemnification.

     (a) The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, each Designated Holder and its general or limited partners, officers, directors, members, managers, employees, advisors, representatives, agents and Affiliates (collectively, the “Representatives”) from and against any loss, claim, damage, liability, attorney’s fees, cost or expense and costs and expenses of investigating and defending any such claim (collectively, the “Losses”), joint or several, and any action in respect thereof to which such Designated Holder or its Representatives may become subject under the Securities Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereto) arise out of or are based upon (i) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, prospectus or preliminary or summary prospectus or any amendment or supplement thereto or (ii) any 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 the Company shall reimburse each such Designated Holder and its Representatives for any legal or any other expenses incurred by them in connection with investigating or defending or preparing to defend against any such Loss, action or proceeding; provided, however, that the Company shall not be liable to any such Designated Holder or other indemnitee in any such case to the extent that any such Loss (or action or proceeding, whether commenced or threatened, in respect thereof) arises out of or is based upon (x) an untrue statement or alleged untrue statement or omission or alleged omission, made in such Registration Statement, any such prospectus or preliminary or summary prospectus or any amendment or supplement thereto, in reliance upon, and in conformity with, information prepared and furnished to the Company by any Designated Holder or its Representatives for use therein and, with respect to any untrue statement or omission or alleged untrue statement or omission made in any preliminary prospectus relating to the Registration Statement, to the extent that a prospectus relating to the Registrable Securities was required to be delivered by such Designated Holder under the Securities Act in connection with such purchase, there was not sent or given to such person, at or prior to the written confirmation of the sale of such

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Registrable Securities to such person, a copy of the final prospectus that corrects such untrue statement or alleged untrue statement or omission or alleged omission if the Company had previously furnished copies thereof to such Designated Holder or (y) use of a Registration Statement or the related prospectus during a period when a stop order has been issued in respect of such Registration Statement or any proceedings for that purpose have been initiated or use of a prospectus when use of such prospectus has been suspended pursuant to Sections 2.5(b), 2.6(e) or (i); provided that in each case, that such Designated Holder received notice of such stop order, initiation of proceedings or suspension from the Company. In connection with an underwritten offering, the Company will indemnify such underwriters, their officers and directors and each Person who controls such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the Designated Holders.

     (b) In connection with the filing of the Registration Statement by the Company pursuant to this Agreement, the Designated Holders will furnish to the Company in writing such information as the Company reasonably requests for use in connection with such Registration Statement and the related prospectus and, to the fullest extent permitted by law, each such Designated Holder will indemnify and hold harmless the Company and its Representatives from and against any Losses, severally but not jointly, and any action in respect thereof to which the Company and its Representatives may become subject under the Securities Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon (i) the purchase or sale of Registrable Securities during a suspension as set forth in Sections 2.5(b), 2.6(e) or (i) in each case after receipt of written notice of such suspension, (ii) any untrue or alleged untrue statement of a material fact contained in the Registration Statement, prospectus or preliminary or summary prospectus or any amendment or supplement thereto, or (iii) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but, with respect to clauses (ii) and (iii) above, only to the extent that such untrue statement or omission is made in such Registration Statement, any such prospectus or preliminary or summary prospectus or any amendment or supplement thereto, in reliance upon and in conformity with information prepared and furnished to the Company by such Designated Holder for use therein or by failure of such Designated Holder to deliver a copy of the Registration Statement or prospectus or any amendments or supplements thereto, and such Designated Holder will reimburse the Company and each Representative for any legal or any other expenses incurred by them in connection with investigating or defending or preparing to defend against any such Loss, action or proceeding; provided, however, that such Designated Holder shall not be liable in any such case to the extent that prior to the filing of any such Registration Statement or prospectus or amendment or supplement thereto, such Designated Holder has furnished in writing to the Company information expressly for use in such Registration Statement or prospectus or any amendment or supplement thereto which corrected or made not misleading information previously furnished to the Company.

     (c) Promptly after receipt by any Person in respect of which indemnity may be sought pursuant to Section 2.9(a) or 2.9(b) (an “Indemnified Party”) of notice of any claim or the commencement of any action, the Indemnified Party shall, if a claim in respect

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thereof is to be made against the Person against whom such indemnity may be sought (an “Indemnifying Party”), promptly notify the Indemnifying Party in writing of the claim or the commencement of such action; provided, that the failure to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability which it may have to an Indemnified Party under Section 2.9(a) or 2.9 (b) except to the extent of any actual prejudice resulting therefrom. If any such claim or action shall be brought against an Indemnified Party, and it shall notify the Indemnifying Party thereof, the Indemnifying Party shall be entitled to participate therein, and, to the extent that it wishes, jointly with any other similarly notified Indemnifying Party, to assume the defense thereof with counsel reasonably satisfactory to the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of its election to assume the defense of such claim or action, the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided, that the Indemnified Party shall have the right to employ separate counsel to represent the Indemnified Party and its Representatives who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Indemnified Party against the Indemnifying Party, but the fees and expenses of such counsel shall be for the account of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) in the written opinion of counsel to such Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential conflicts of interest between them, it being understood, however, that the Indemnifying Party shall not, in connection with any one such claim or action or separate but substantially similar or related claims or actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (together with appropriate local counsel) at any time for all Indemnified Parties. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any claim or pending or threatened proceeding in respect of which the Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such claim or proceeding other than the payment of monetary damages by the Indemnifying Party on behalf of the Indemnified Party. Whether or not the defense of any claim or action is assumed by the Indemnifying Party, such Indemnifying Party will not be subject to any liability for any settlement made without its consent, which consent will not be unreasonably withheld.

     (d) If the indemnification provided for in this Section 2.9 is unavailable to the Indemnified Parties in respect of any Losses referred to herein, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Designated Holders on the other from the offering of the Registrable Securities, or if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits but also the relative fault of the Company on the one hand and the Designated Holders on the other in connection with the statements or

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omissions which resulted in such Losses, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of each Designated Holder on the other shall be determined by reference to, among other things, whether any action taken, including any 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 such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

     The Company and the Designated Holders agree that it would not be just and equitable if contribution pursuant to this Section 2.9(d) were determined by pro rata allocation 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 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 Section 2.9, no Designated Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities of such Designated Holder were offered to the public exceeds the amount of any Losses which such Designated Holder has otherwise paid by reason of such untrue or alleged untrue statement or omission or alleged 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 was not guilty of such fraudulent misrepresentation. Each Designated Holder’s obligations to contribute pursuant to this Section 2.9 is several in the proportion that the proceeds of the offering received by such Designated Holder bears to the total proceeds of the offering received by all the Designated Holders.

     2.10 Participation in Registrations.

     (a) No Person may participate in any registration hereunder which is underwritten unless such Person (i) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements and this Agreement.

     (b) Each Person that is participating in any registration under this Agreement agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2.6(e) or (i) above, such Person will forthwith discontinue the disposition of its Registrable Securities pursuant to the Registration Statement and all use of the Registration Statement or any prospectus or related document until such Person’s receipt of the copies of a supplemented or amended prospectus as contemplated by such Section 2.6(e) and, if so directed by the Company, will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, then in such Designated Holder’s possession of such documents at the time of

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receipt of such notice.Furthermore, each Designated Holder agrees that if such Designated Holder uses a prospectus in connection with the offering and sale of any of the Registrable Securities, the Designated Holder will use only the latest version of such prospectus provided by Company.

ARTICLE III.
TRANSFERS OF CERTAIN RIGHTS

     3.1 Transfer.

     The rights granted to the Purchasers under this Agreement are transferable only in connection with the transfer by any such Purchaser, to a single Person, of the greater of (a) 50% of the Registrable Securities acquired by such Purchaser or (b) 10% of the outstanding Registrable Securities. Any such transfer shall be subject to the provisions of Sections 3.2 and 3.3; provided that nothing contained herein shall be deemed to permit an assignment, transfer or disposition of the Registrable Securities in violation of the terms and conditions of the Securities Purchase Agreement, or applicable law.

     3.2 Transferees.

     Any permitted transferee to whom rights under this Agreement are transferred shall, as a condition to such transfer, deliver to the Company a written instrument by which such transferee agrees to be bound by the obligations imposed upon the Purchasers under this Agreement to the same extent as if such transferee were a Purchaser hereunder.

     3.3 Subsequent Transferees.

     A transferee to whom rights are transferred pursuant to this ARTICLE III may not again transfer such rights to any other person or entity, other than as provided in Sections 3.1 or 3.2 above.

ARTICLE IV.
MISCELLANEOUS

     4.1 Recapitalizations, Exchanges, etc.

     The provisions of this Agreement shall apply to the full extent set forth herein with respect to (i) the Registrable Securities, (ii) any and all shares of Common Stock into which the Registrable Securities are converted, exchanged or substituted in any recapitalization or other capital reorganization by the Company and (iii) any and all equity securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in conversion of, in exchange for or in substitution of, the Registrable Securities and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof. The Company shall cause any successor or assign (whether by merger, consolidation, sale of assets or otherwise) to enter into a new registration rights agreement with the Designated Holders on terms substantially the same as this Agreement as a condition of any such transaction.

16

     4.2 Injunctive Relief.

     The parties hereto acknowledge and agree that irreparable damage would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of the provisions of this Agreement to enforce specifically the provisions of this Agreement, in any court of the United States or any state thereof having jurisdiction, without the need to pass a bond or other security, in addition to any other remedy to which the parties may be entitled under this Agreement or at law or in equity.

     4.3 Successors and Assigns, Third Party Beneficiaries.

     This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto, each assignee of the Designated Holders permitted pursuant to ARTICLE III and their respective permitted successors and assigns and executors, administrators and heirs. Designated Holders are intended third party beneficiaries of this Agreement and this Agreement may be enforced by such Designated Holders.

     4.4 Notices.

     Unless otherwise provided herein, any notice, request, instruction or other document to be given hereunder by any party to the other shall be in writing and delivered by hand-delivery, registered first-class mail, telex, telecopier, or air courier guaranteeing overnight delivery, as follows:

     If to the Company, to:

Kitty Hawk, Inc.
1515 West 20th Street
P. O. Box 612787
DFW International Airport, Texas 75261
Telephone: (972) 456-2200
Facsimile: (972) 456-2249
Attn: Steven E. Markhoff, Esq.

     With copy to:

Haynes and Boone, LLP
901 Main Street
Dallas, Texas 75214
Telephone: (214) 651-5000
Facsimile: (214) 200-0428
Attn: Garrett A. DeVries

17

     If to a Purchaser, to:

The address or facsimile number of each Purchaser set forth on the signature page of this Agreement.

or to such other place and with such other copies as either party may designate as to itself by written notice to the other.

     All such notices, requests, instructions or other documents shall be deemed to have been duly given; at the time delivered by hand, if personally delivered; four Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged by addressee, if by telecopier transmission; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery.

     4.5 Choice of Law.

     This Agreement shall be construed, interpreted and the rights of the parties determined in accordance with the internal laws of the State of Texas, without regard to the conflict of law principles thereof, except with respect to matters of law concerning the internal corporate affairs of any corporate entity which is a party to or the subject of this Agreement, and as to those matters the law of the jurisdiction under which the respective entity derives its powers shall govern.

     4.6 Entire Agreement; Amendments and Waivers.

     This Agreement, including all schedules attached hereto, the exhibits attached hereto, the Confidentiality Agreement between each Purchaser and the Company, the Securities Purchase Agreement, the Standstill Agreement (as defined in the Securities Purchase Agreement), the Certificate of Designations, and the Warrants, constitute the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties, including the written summary of proposed terms between the Company and the Purchasers.

     4.7 Counterparts.

     This Agreement may be executed in one or more counterparts each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

     4.8 Invalidity.

     In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument.

18

     4.9 Headings.

     The headings of the Articles and Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

     4.10 Forum; Service of Process.

     Any legal suit, action or proceeding brought by any party or any of its Affiliates arising out of or based upon this Agreement shall be instituted in any federal or state court in Dallas County, Texas, and each party waives any objection which it may now or hereafter have to the laying of venue or any such proceeding, and irrevocably submits to the jurisdiction of such courts in any such suit, action or proceeding.

     4.11 No Prejudice.

     The terms of this Agreement shall not be construed in favor of or against any party on account of its participation in the preparation hereof.

     4.12 Termination of Rights.

     Upon the expiration of the Registration Period all rights of Designated Holders under this Agreement will terminate.

[Signature Page Follows]

19

     IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed as of the date and year first written above.

KITTY HAWK, INC.
By:	/s/	Robert W. Zoller, Jr.
Name:	Robert W. Zoller, Jr.
Title:	President and Chief Executive Officer

{Signature Page to the Registration Rights Agreement}

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Registration Rights Agreement to be duly executed as of the date and year first above written and to be bound hereby.

	PURCHASERS:
	LLOYD I. MILLER, III
	/s/ Lloyd I. Miller, III
	Lloyd I. Miller, III
	JURISDICTION:
	ADDRESS:	4550 Gordon Drive
		Naples, Florida 34102
		Telephone: (239) 263-8860
AGGREGATE SUBSCRIPTION AMOUNT:		Facsimile: (239) 262-8025
Aggregate Number of Shares of Preferred Stock: 3000

	MILFAM II L.P.,
	a Georgia limited partnership
		By: Milfam LLC, an Ohio limited liability company, as general partner
			By:	/s/ Lloyd I. Miller, III
				Lloyd I. Miller, III, Managing Member
	JURISDICTION:
	ADDRESS: 4550 Gordon Drive
			Naples, Florida 34102
			Telephone: (239) 263-8860
			Facsimile: (239) 262-8025
AGGREGATE SUBSCRIPTION AMOUNT:
Aggregate Number of Shares of Preferred Stock: 2000

{Signature Page to the Registration Rights Agreement}

     IN WITNESS WHEREOF, the undersigned Purchaser has caused this Registration Rights Agreement to be duly executed as of the date and year first above written and to be bound hereby.

	BONANZA MASTER FUND, LTD.,
		By: Bonanza Capital, Ltd., a Texas limited partnership, as its general partner
			By: Bonanza Fund Management, Inc., a Texas corporation, as its general partner
				By:	/s/ Bernay Box
					Bernay Box, President
		JURISDICTION:
		ADDRESS:			300 Crescent Court
					Suite 1740
					Dallas, Texas 75201
					Telephone: (214) 987-4962
					Facsimile: (214) 987-4342
AGGREGATE SUBSCRIPTION AMOUNT:
Aggregate Number of Shares of Preferred Stock: 3000

{Signature Page to the Registration Rights Agreement}

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Registration Rights Agreement to be duly executed as of the date and year first above written and to be bound hereby.

POTOMAC CAPITAL PARTNERS, L.P.,
a Delaware limited partnership
	By:	Potomac Capital Management,
		General Partner
		By:		/s/ Paul J. Solit
			Paul J. Solit, Managing Member
JURISDICTION:
ADDRESS:				c/o Potomac Capital Management
				825 Third Avenue
				33rd Floor
				New York, New York 10022
				Telephone: (212) 521-5115
				Facsimile: (212) 521-5116

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 1742

PLEIADES INVESTMENT PARTNERS-R, LP,
a Delaware limited partnership
	By:	Potomac Capital Management,
		General Partner
		By:		/s/ Paul J. Solit
			Paul J. Solit, Managing Member
JURISDICTION:
ADDRESS:				c/o Potomac Capital Management
				825 Third Avenue
				33rd Floor
				New York, New York 10022
				Telephone: (212) 521-5115
				Facsimile: (212) 521-5116

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 1180

{Signature Page to the Registration Rights Agreement}

POTOMAC CAPITAL INTERNATIONAL
LTD., a British Virgin Islands corporation
By:		/s/ Paul J. Solit
	Paul J. Solit, Managing Member
JURISDICTION:
ADDRESS:			c/o Potomac Capital Management
			825 Third Avenue
			33rd Floor
			New York, New York 10022
			Telephone: (212) 521-5115
			Facsimile: (212) 521-5116

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 1078

{Signature Page to the Registration Rights Agreement}

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Registration Rights Agreement to be duly executed as of the date and year first above written and to be bound hereby.

SACC PARTNERS, L.P.,
a Delaware limited partnership
	By:		/s/ Bryant Riley
		Bryant Riley, Managing Partner
		By: Riley Investment Management, Inc.,
				Investment Advisor
			By:		/s/ Bryant Riley
				Bryant Riley, President
JURISDICTION:
ADDRESS:				11100 Santa Monica
				Suite 800
				Los Angeles, California 90025
				Telephone: (310) 966-1444
				Facsimile: (310) 966-1448

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 1750

B. RILEY & CO. RETIREMENT TRUST
DATED 1/1/99
By:		/s/ Bryant Riley
	Bryant Riley, Trustee
JURISDICTION:
ADDRESS:			11100 Santa Monica
			Suite 800
			Los Angeles, California 90025
			Telephone: (310) 966-1444
			Facsimile: (310) 966-1448

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 250

{Signature Page to the Registration Rights Agreement}

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Registration Rights Agreement to be duly executed as of the date and year first above written and to be bound hereby.

CORKY AND RICK STEINER FAMILY L.P.,
a Delaware limited partnership
	By: Richard Steiner, as general partner
		By:	/s/ Richard Steiner
			Richard Steiner
JURISDICTION:
ADDRESS:			4044 Rose Hill Avenue
			Cincinnati, Ohio 45229
			Telephone: (513) 281-9989
			Facsimile:

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 150

RICHARD STEINER
/s/ Richard Steiner
Richard Steiner
JURISDICTION:
ADDRESS:	4044 Rose Hill Avenue
	Cincinnati, Ohio 45229
	Telephone: (513) 281-9989
	Facsimile:

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 200

{Signature Page to the Registration Rights Agreement}

PHILIP H. STEINER
/s/ Philip H. Steiner
Philip H. Steiner
JURISDICTION:
ADDRESS:	4044 Rose Hill Avenue
	Cincinnati, Ohio 45229
	Telephone: (513) 281-9989
	Facsimile:

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 200

{Signature Page to the Registration Rights Agreement}

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Registration Rights Agreement to be duly executed as of the date and year first above written and to be bound hereby.

BLUEGRASS GROWTH FUND, L.P.
a Delaware limited partnership
	By:	Bluegrass Growth Fund Partners, LLC
		General Partner
		By:		/s/ Brian Shatz
			Brian Shatz, Managing Member
JURISDICTION:
ADDRESS:				122 East 42nd Street
				Suite 2606
				New York, NY 10168
				Telephone: (212)-682-2392
				Facsimile:

AGGREGATE SUBSCRIPTION AMOUNT:

Aggregate Number of Shares of Preferred Stock: 250

{Signature Page to the Registration Rights Agreement}

EX-4.3

Exhibit 4.3

SECURITIES PURCHASE AGREEMENT

by and among

KITTY HAWK, INC.

and

CERTAIN PURCHASERS
IDENTIFIED HEREIN

Dated as of November 9, 2005

TABLE OF CONTENTS

		Page
ARTICLE I. DEFINITIONS			1
1.1	Defined Terms		1
ARTICLE II. PURCHASE AND SALE OF SECURITIES			7
2.1	Purchase and Sale of Securities		7
2.2	Consideration for Securities		7
ARTICLE III. CLOSING			7
3.1	Closing		7
3.2	Deliveries by the Company at Closing		7
3.3	Deliveries by the Purchasers at Closing		8
3.4	Certificates; Opinions		8
3.5	Form of Documents and Instruments		8
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY			8
4.1	Organization of the Company		8
4.2	Capitalization of the Company		8
4.3	Authorization of Issuance		9
4.4	Due Authorization		10
4.5	No Conflict		10
4.6	Consents and Approvals		10
4.7	Subsidiaries		11
4.8	SEC Filings; Interim Financial Statements		11
4.9	Absence of Undisclosed Liabilities		12
4.10	Absence of Certain Changes		12
4.11	Compliance With Laws		12
4.12	Litigation		13
4.13	Employee Benefit Plans and Other Agreements		13
4.14	Taxes		16
4.15	Environmental Matters		17
4.16	Insurance		18
4.17	Title to Assets		18
4.18	Condition of Tangible Assets		19
4.19	Labor Matters		19
4.20	Intellectual Property		19
4.21	No Brokers		20
4.22	Contracts; No Defaults		20
4.23	Customers		21
4.24	Affiliated Transactions		22
i

		Page
4.25	Real Property		22
4.26	Reporting Status; Eligibility to Use Form S-3		22
4.27	Representations Complete		22
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF PURCHASERS			22
5.1	Standing of Purchaser		23
5.2	Due Authorization		23
5.3	No Conflict		23
5.4	Consents and Approvals		23
5.5	Purchase for Investment		24
5.6	Short Sales and Hedging Transactions; Regulation M		25
5.7	No Legal, Tax or Investment Advice		25
5.8	No Brokers		25
ARTICLE VI. COVENANTS			25
6.1	Continuing Operations		25
6.2	Press Releases		26
6.3	Notification of Certain Matters		26
6.4	Financial Statements, Reports, Etc		27
6.5	Use of Proceeds		27
6.6	Continued Eligibility to Use Form S-3		27
6.7	Listing		28
6.8	Transfer Restrictions		28
6.9	Short Sales and Hedging Transactions; Regulation M		28
6.10	Legend		29
6.11	Confidentiality		29
6.12	Issuance of Warrants		30
ARTICLE VII. CONDITIONS TO CLOSING			30
7.1	Condition to Each Party’s Obligations		30
7.2	Conditions to the Company’s Obligations		31
7.3	Conditions to the Purchasers’ Obligations		31
ARTICLE VIII. INDEMNIFICATION			33
8.1	Survival of Representations, Etc.		33
8.2	Indemnification by the Company		33
8.3	Indemnification by the Purchasers		34
8.4	Limitation on Indemnities		34
8.5	Defense of Claims		34
8.6	Sole and Exclusive Remedy		35
ARTICLE IX. MISCELLANEOUS			35
ii

		Page
9.1	Termination		35
9.2	In the Event of Termination		36
9.3	Expenses		36
9.4	Injunctive Relief		36
9.5	Assignment		36
9.6	Notices		36
9.7	Choice of Law		37
9.8	Entire Agreement; Amendments and Waivers		38
9.9	Acknowledgment		38
9.10	Counterparts		38
9.11	Invalidity		38
9.12	Headings		38
iii

Exhibit 4.3

SECURITIES PURCHASE AGREEMENT

     This Securities Purchase Agreement (this “Agreement”), dated as of November 9, 2005, is by and among Kitty Hawk, Inc., a Delaware corporation (the “Company”), and those individuals and entities identified on the signature page(s) to this Agreement (collectively, the “Purchasers”).

RECITAL

     WHEREAS, the Company desires to sell to the Purchasers, and the Purchasers desire to purchase from the Company, an aggregate of 15,000 shares (the “Preferred Shares”) of the Series B Convertible Preferred Stock, par value $0.01 per share, of the Company (the “Preferred Stock”), having the rights, designations and preferences set forth in the Preferred Stock Certificate of Designations (as defined herein), for the consideration as set forth in Section 2.2.

     WHEREAS, under certain circumstances and terms set forth in the Preferred Stock Certificate of Designations, the Preferred Stock shall be convertible, at the option of the holders, into shares of Common Stock (as defined herein).

AGREEMENT

     NOW, THEREFORE, in consideration of the mutual covenants and premises contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I.
DEFINITIONS

     1.1 Defined Terms.

     As used herein, the terms below shall have the following meanings:

     “Affiliate” shall mean any entity controlling, controlled by or under common control with the Company. For the purposes of this definition, “control” shall have the meaning presently specified for that word in Rule 405 promulgated by the Commission under the Securities Act.

     “Agreement” shall mean this Securities Purchase Agreement, together with all schedules and exhibits referenced herein.

     “Amendment No. 1 to Rights Agreement” means the Amendment No. 1 to Rights Agreement by and among the Company and American Stock Transfer & Trust Company in the form attached hereto as Exhibit A.

     “Applicable Law” means any statute, law, rule or regulation or any judgment, order, writ, injunction or decree of any Governmental Entity to which a specified Person or property is subject.

     “Awards” means outstanding options to purchase, or restricted stock units convertible into, Common Stock or common stock of any of its Subsidiaries.

     “Benefit Arrangement” shall mean with respect to the Company and any of its Subsidiaries, any employment, consulting, severance, change in control or other similar contract, arrangement or policy and each plan, arrangement (written or oral), program, agreement or commitment providing for insurance coverage (including, without limitation, any self-insured arrangements), workers’ compensation, disability benefits, supplemental unemployment benefits, vacation benefits, retirement benefits, life, health, disability or accident benefits (including, without limitation, any “voluntary employees’ beneficiary association” as defined in Section 501(c)(9) of the Code providing for the same or other benefits), fringe benefits or for deferred compensation, profit-sharing bonuses, stock options, stock appreciation rights, stock purchases, annual or long-term cash incentive, base pay or other forms of incentive compensation or post-retirement insurance, compensation or benefits which (A) is not a Welfare Plan, Pension Plan or Multiemployer Plan, (B) is entered into, maintained, contributed to or required to be contributed to, as the case may be, by the Company and any of its Subsidiaries or any ERISA Affiliate of the Company and any of its Subsidiaries, and (C) covers any employee or former employee, director or consultant of the Company and any of its Subsidiaries (with respect to their relationship with any such entity).

     “Board of Directors” means the Board of Directors of the Company.

     “Business” means the business of the Company as described more fully in the “Business” section of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004.

     “Business Day” means a day other than a Saturday or Sunday or any federal or New York holiday.

     “Bylaws” means the Second Amended and Restated Bylaws of the Company as in effect on the date hereof.

     “Certificate of Incorporation” means the Second Amended and Restated Certificate of Incorporation of the Company as amended or restated and as in effect on the date hereof.

     “Claim” has the meaning set forth in Section 8.5 of this Agreement.

     “Claim Notice” has the meaning set forth in Section 8.5 of this Agreement.

     “Closing” has the meaning set forth in Section 3.1 of this Agreement.

     “Closing Date” means November 14, 2005 or such other date agreed to by the parties.

2

     “Code” means the Internal Revenue Code of 1986, as it may be amended from time to time.

     “Commission” means the United States Securities and Exchange Commission.

     “Common Stock” means the common stock, $0.000001 par value per share, of the Company.

     “Company Indemnified Parties” has the meaning set forth in Section 8.3 of this Agreement.

     “Contract” has the meaning set forth in Section 4.22(a) of this Agreement.

     “Conversion Shares” means the shares of Common Stock issuable upon the conversion of the Preferred Shares.

     “Effectiveness Date” means the date that a registration statement on Form S-3 filed with the Commission becomes effective for registration of the Conversion Shares and the Warrant Shares.

     “Employee Plans” means all Benefit Arrangements, Multiemployer Plans, Pension Plans and Welfare Plans.

     “Encumbrance” means any claim, lien, pledge, easement, security interest or encumbrance of third parties, and, with respect to any securities, any agreements, understandings or restrictions affecting the voting rights or other incidents of record or beneficial ownership pertaining to such securities.

     “Environmental Conditions” means the Release or threatened Release of any Hazardous Material (whether or not upon a Facility or any former facility or other property and whether or not such Release constituted at the time thereof a violation of any Environmental Law) as a result of which the Company is reasonably expected to be, or to become, liable to any Person, or by reason of which any Facility, any former facility or any of the assets of the Company is reasonably expected to be subjected to any Encumbrances.

     “Environmental Laws” means any and all foreign, federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, legally binding decrees, or other requirement of any Governmental Entity regulating, relating to or imposing liability or standards of conduct concerning protection of the environment or of human health relating to exposure of any kind of Hazardous Materials, as has been or is now in effect.

     “Environmental Permits” means any and all permits, licenses, registrations, notifications, exemptions and any other authorization required under any Environmental Law.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     “ERISA Affiliate” means any entity which is (or at any relevant time was) a member of a “controlled group of corporations” with, under “common control” with, a member of an

3

“affiliated service group” with, or otherwise required to be aggregated with the Company, as set forth in Section 414(b), (c), (m) or (o) of the Code.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

     “Facilities” means the offices and buildings and all other real property which are owned, leased or operated by the Company or any Subsidiary.

     “Fixtures and Equipment” shall mean all of the furniture, fixtures, furnishings, machinery and equipment owned by the Company or any Subsidiary.

     “GAAP” has the meaning set forth in Section 4.8 of this Agreement.

     “Governmental Entity” means any court or tribunal in any jurisdiction (domestic or foreign) or any governmental or regulatory body, agency, department, commission or board (domestic or foreign).

     “Hazardous Materials” means any hazardous substance, gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products, polychlorinated biphenyls, ureaformaldehyde insulation, asbestos or asbestos-containing materials, pollutants, contaminants, radioactivity, and any other materials or substances of any kind, whether solid, liquid or gas, and whether or not any such substance is defined as hazardous under any Environmental Law, that is regulated pursuant to any Environmental Law or that could give rise to liability under any Environmental Law.

     “Indemnified Parties” has the meaning set forth in Section 8.3 of this Agreement.

     “Interim Period” has the meaning set forth in Section 6.1 of this Agreement.

     “IRS” has the meaning set forth in Section 4.13(b)(i)(C) of this Agreement.

     “Knowledge of the Company” (or similar language to that effect) means to the actual knowledge, after due inquiry, of each of Robert W. Zoller, Jr., James R. Kupferschmid and Steven E. Markhoff.

     “LTEIP” means the Kitty Hawk, Inc. 2003 Long Term Equity Incentive Plan, as amended to date.

     “Losses” has the meaning set forth in Section 8.2 of this Agreement.

     “Material Adverse Effect” or “Material Adverse Change” shall mean an event, occurrence or condition that has had, or would have, a material adverse change or effect on the business, condition (financial or otherwise), prospects, assets, liabilities, or results of operations of the Company or its Subsidiaries, taken as a whole, other than as a result of (i) changes generally adversely affecting the United States economy or freight transportations industry, or (ii) the announcement or pendency of the transactions contemplated by this Agreement.

4

     “Multiemployer Plan” means with respect to the Company and any of its Subsidiaries any “multiemployer plan,” as defined in Section 4001(a)(3) of ERISA, (A) to which the Company and any of its Subsidiaries or any ERISA Affiliate of the Company and any of its Subsidiaries maintains, administers, contributes or is required to contribute and (B) which covers any employee or former employee of the Company and any of its Subsidiaries or any ERISA Affiliate of the Company and any of its Subsidiaries (with respect to their relationship with such entities).

     “Owned Real Property” means all real property owned by the Company or any of its Subsidiaries.

     “PBGC” means the Pension Benefit Guaranty Corporation.

     “Pension Plan” means with respect to the Company and any of its Subsidiaries any “employee pension benefit plan” as defined in Section 3(2) of ERISA (other than a Multiemployer Plan) (A) which the Company and any of its Subsidiaries or any ERISA Affiliate of the Company and any of its Subsidiaries maintains, administers, contributes to or is required to contribute to and (B) which covers any current employee or former employee, director or consultant of the Company and any of its Subsidiaries or any ERISA Affiliate of the Company and any of its Subsidiaries (with respect to their relationship with such entities).

     “Permits” shall mean all material licenses, permits, orders, consents, approvals, registrations, authorizations, qualifications and filings required by any federal, state, local or foreign laws or governmental or regulatory bodies.

     “Permitted Encumbrances” means (i) any mechanic’s or materialmen’s lien or similar Encumbrances with respect to amounts not yet due and payable or which are being contested in good faith, and (ii) Encumbrances for Taxes not yet due and payable or which are being contested in good faith.

     “Person” means any individual, corporation, association, partnership, joint venture, limited liability company, trust, estate or other entity or organization.

     “Preferred Shares” has the meaning specified in the Recitals hereto.

     “Preferred Stock” has the meaning specified in the Recitals hereto.

     “Preferred Stock Certificate of Designations” means the Certificate of Designations of the Series B Convertible Preferred Stock, par value $0.01 per share, of the Company, in the form attached hereto as Exhibit B.

     “Private Placement Legend” has the meaning set forth in Section 6.10(a) of this Agreement.

     “Proceeding” means any action, suit or proceeding by or before any Governmental Entity, whether civil, criminal, administrative, arbitrative or investigative or any appeal in such an action, suit or proceeding.

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     “Proprietary Rights” has the meaning set forth in Section 4.20(a) of this Agreement.

     “Purchaser Indemnified Parties” has the meaning set forth in Section 8.2 of this Agreement.

     “Registration Rights Agreement” means the Registration Rights Agreement by and among the Company and the Purchasers in the form attached hereto as Exhibit C.

     “Release” means and includes any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing into the environment or the workplace of any Hazardous Materials.

     “SEC Filings” means all forms, reports, schedules, statements and other documents required to be filed by the Company under the Securities Act, Exchange Act and the rules and regulations promulgated thereunder, including the Form 10-Q for the quarter ended September 30, 2005.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Standstill Agreement” means the Standstill Agreement by and among the Company and the Purchasers in the form attached hereto as Exhibit D.

     “Subsidiary” means, with respect to any Person, (a) any corporation of which at least a majority in interest of the outstanding voting stock is at the time, directly or indirectly, owned or controlled by such Person, by one or more Subsidiaries of such Person, or by such Person and one or more of its Subsidiaries, or (b) any corporate or non-corporate entity in which such Person, one or more Subsidiaries of such Person, or such Person and one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof, has an ownership interest and 100% of the revenue of which is included in the consolidated financial reports of such Person consistent with generally accepted accounting principles.

     “Tax” or “Taxes” means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax, including any interest, penalty or addition thereto, whether disputed or not, imposed by any Governmental Authority or arising under any Tax law or agreement.

     “Taxpayer” has the meaning set forth in Section 4.14 of this Agreement.

     “Tax Return” means any return, report, information return or other document (including any related or supporting information) relating to Taxes, including without limitation all information returns, any claims for refunds of Taxes and any amendments or supplements to any of the foregoing.

     “Third Party Notice” has the meaning set forth in Section 8.5 of this Agreement.

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     “Transaction” means, taken together, the transactions contemplated under this Agreement.

     “Warrants” has the meaning set forth in Section 6.12 of this Agreement.

     “Warrant Shares” means the shares of Common Stock issuable upon the exercise of the Warrants.

     “Welfare Plan” means with respect to the Company and any of its Subsidiaries any “employee welfare benefit plan” as defined in Section 3(1) of ERISA, (A) which the Company and any of its Subsidiaries or any ERISA Affiliate maintains, administers, contributes to or is required to contribute to, and (B) which covers any employee or former employee of the Company and any of its Subsidiaries (with respect to their relationship with such entities).

ARTICLE II.
PURCHASE AND SALE OF SECURITIES

     2.1 Purchase and Sale of Securities.

     Upon the terms and subject to the conditions contained herein, on the Closing Date, the Company will sell to each Purchaser, and each Purchaser will purchase from the Company, that number of the Preferred Shares set forth opposite such Purchaser’s name on Schedule 2 hereto.

     2.2 Consideration for Securities.

     Upon the terms and subject to the conditions contained herein, as consideration for the purchase of the Preferred Shares, on the Closing Date, each Purchaser shall pay to the Company by wire transfer of same day funds, the cash purchase price set forth opposite such Purchaser’s name on Schedule 2 hereto.

ARTICLE III.
CLOSING

     3.1 Closing.

     The closing of the transactions contemplated herein (the “Closing”) shall be held at 10:00 a.m. Central Time on the Closing Date at the offices of Haynes and Boone, LLP, 901 Main Street, Suite 3100, Dallas, Texas 75202-3789, unless the parties hereto otherwise agree.

     3.2 Deliveries by the Company at Closing.

     At Closing, the Company shall issue and deliver to the Purchasers:

          (a) certificates evidencing the Preferred Shares in the name of the Purchasers (or their permitted assignees) in the respective amounts set forth on Schedule 2 hereto; and

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          (b) all such other documents and instruments as the Purchasers or their counsel shall reasonably request to consummate or evidence the Transaction.

     3.3 Deliveries by the Purchasers at Closing.

     At Closing, the Purchasers shall deliver to the Company:

          (a) same day funds as provided in Section 2.2;

          (b) all such other documents and instruments as the Company or its counsel shall reasonably request to consummate or evidence the Transaction.

     3.4 Certificates; Opinions.

     At Closing, the Purchasers and the Company shall deliver the certificates, opinion of counsel, and other documents described in ARTICLE VII.

     3.5 Form of Documents and Instruments.

     All of the documents and instruments delivered at Closing shall be in form and substance, and shall be executed and delivered in a manner, reasonably satisfactory to the parties’ respective counsel.

ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company represents and warrants to the Purchasers as follows:

     4.1 Organization of the Company.

     The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, lease, and operate its properties and to carry on its business as presently being conducted. No actions or proceedings to dissolve the Company are pending or, to the Knowledge of the Company, threatened. The copies of the Certificate of Incorporation and Bylaws heretofore delivered by the Company to the Purchasers are accurate and complete as of the date of this Agreement. The Company is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction in which the property owned, leased, or operated by it or the conduct of its business requires such qualification or licensing, except where the failure to do so taken in the aggregate would not have a Material Adverse Effect.

     4.2 Capitalization of the Company.

          (a) The authorized capital stock of the Company as of the date hereof, consists solely of 100,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, of which 120,000 shares of preferred stock have been designated Series A Preferred Stock. As of November 9, 2005, (i) 50,310,061 shares of Common Stock were issued and outstanding,

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(ii) 4,627,493 shares of Common Stock were reserved for issuance upon exercise of Awards (whether vested or unvested as of the date hereof), (iii) 1,271,971 shares of Common Stock were reserved for issuance upon exercise of outstanding warrants, and (iv) no shares of Series A Preferred Stock are issued and outstanding. Since November 9, 2005, the Company has not issued any capital stock, except pursuant to the exercise of Awards, other than pursuant to this Agreement. All outstanding shares of Common Stock have been validly issued and are fully paid and nonassessable and issued in compliance with the Securities Act, and no shares of capital stock of the Company are subject to, nor have any been issued in violation of, any preemptive or similar rights.

          (b) Except as set forth in Section 4.2(a), as contemplated by this Agreement or as set forth on Schedule 4.2 hereof, there are outstanding (i) no shares of capital stock or other voting securities of the Company; (ii) no securities of the Company convertible into or exchangeable for shares of capital stock or other voting securities of the Company; or (iii) no subscriptions, options, warrants, calls, commitments, preemptive rights or other rights of any kind to acquire from the Company, and no obligation of the Company to issue or sell any shares of capital stock or other voting securities of the Company or any securities of the Company convertible into or exchangeable for such capital stock or voting securities, except pursuant to Awards or the LTEIP. Except as set forth on Schedule 4.2, as set forth in this Agreement or pursuant to Awards, there are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares of Common Stock or any other securities of the type described in clauses (i)-(iii) of the preceding sentence, except pursuant to Awards or the LTEIP. Except as provided in this Agreement, there are no restrictions upon the voting or transfer of any share of the capital stock or other voting securities of the Company pursuant to the Certificate of Incorporation, the Bylaws or other governing documents or any agreement or other instrument to which the Company is a party, other than restricted stock held by certain employees.

     4.3 Authorization of Issuance.

     At the Closing, Preferred Shares to be acquired by the Purchasers from the Company will be duly authorized and validly issued, fully paid and nonassessable and not subject to, or issued in violation of, any preemptive or similar rights, and the Conversion Shares and Warrant Shares will be duly authorized and reserved for issuance, and, upon issuance thereof upon conversion of the Preferred Shares in accordance with the terms of the Preferred Stock Certificate of Designations and the exercise of the Warrants in accordance with their terms, as applicable, will be validly issued, fully paid and nonassessable and not subject to, or issued in violation of, any preemptive or similar rights. Assuming the accuracy of the representations and warranties of the Purchasers, the issuance of the Preferred Shares to the Purchasers at the Closing, the issuance of the Conversion Shares upon conversion of the Preferred Shares and the issuance of the Warrant Shares upon the exercise of the Warrants will be exempt from the registration requirements of the Securities Act and applicable state securities laws.

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     4.4 Due Authorization.

     The Company has all required corporate power and authority to execute and deliver this Agreement, the Warrants, the Registration Rights Agreement, the Standstill Agreement and the Amendment No. 1 to Rights Agreement, perform its obligations thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by the Company of this Agreement, the Warrants, the Registration Rights Agreement, the Standstill Agreement and the Amendment No. 1 to Rights Agreement, and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action of the Company. This Agreement, the Warrants, the Registration Rights Agreement, the Standstill Agreement and the Amendment No. 1 to Rights Agreement have been duly executed and delivered by the Company and constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, except that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws relating to or affecting creditors’ rights generally, (ii) general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law), and (iii) laws and judicial decisions regarding indemnification for violations of federal securities laws.

     4.5 No Conflict.

     The execution and delivery by the Company of this Agreement, the Warrants, the Registration Rights Agreement, the Standstill Agreement and the Amendment No. 1 to Rights Agreement, and the performance by it of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Preferred Shares, the Conversion Shares and the Warrant Shares) do not and will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or the Bylaws, or the charter, bylaws, or other governing instruments of any Subsidiary, (ii) except as set forth on Schedule 4.5, conflict with or result in a material violation of any provision of, or constitute (with or without the giving of notice or the passage of time or both) a default or event of default under, give rise (with or without the giving of notice or the passage of time or both) to any loss of benefit, or of any right of termination, cancellation, or acceleration under, or require any consent under any Contract that would have a Material Adverse Effect, (iii) result in the creation or imposition of any material Encumbrance upon the properties of the Company or any Subsidiary, or (iv) violate in any material respect any Applicable Law binding upon the Company or any Subsidiary or any rules, regulations or published policies of the securities exchange on which the Company is listed.

     4.6 Consents and Approvals.

     No consent, approval, order, authorization of, or declaration, filing, or registration with, any Governmental Entity, or any consent of any other Person is required to be obtained or made by the Company or any Subsidiary in connection with the execution and delivery by the Company of this Agreement, the Warrants, the Registration Rights Agreement, the Standstill Agreement and the Amendment No. 1 to Rights Agreement, or the consummation of the Transaction, other than (i) as otherwise disclosed on Schedule 4.6, (ii) as would not have a

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Material Adverse Effect or (iii) as is necessary for the Company to comply with the terms of the Registration Rights Agreement.

     4.7 Subsidiaries.

          (a) Set forth on Schedule 4.7 is a complete and accurate list of all Subsidiaries of the Company. Each Subsidiary of the Company has been duly formed and is validly existing under the laws of the jurisdiction of its formation and has the requisite power and authority to own or lease and operate its properties and assets and to conduct its business as it is now being conducted. The Company has previously made available to the Purchasers, or shall make available to the Purchasers prior to the Closing Date, in a form reasonably acceptable to the Purchasers, copies of the organizational documents, each as amended to date, of each Subsidiary of the Company. Such copies are true, correct and complete and in full force and effect. Each such Subsidiary is duly licensed or qualified and in good standing in each jurisdiction in which its ownership or leasing and operation of its properties and assets and the conduct of its business as it is now being conducted requires such Subsidiary to be so licensed or qualified, except where the failure to be so licensed or qualified would not have a Material Adverse Effect. Set forth on Schedule 4.7 is a list of the jurisdiction of incorporation, organization or formation of each such Subsidiary. Except as set forth on Schedule 4.7 and as listed above, none of the Company and the Subsidiaries of the Company own, or have the right to acquire, any shares of stock or any equity interest in any other corporation, partnership, joint venture or any other Person.

          (b) The outstanding shares of capital stock of each Subsidiary of the Company have been duly authorized and validly issued and are fully paid and nonassessable and were not issued in violation of any preemptive rights or rights of first refusal or first offer. Except as set forth on Schedule 4.7, (i) each Subsidiary of the Company is wholly-owned of record and beneficially by the Company or another wholly-owned Subsidiary and (ii) the ownership interests of the Company in each such Subsidiary are owned of record and beneficially by the Company (or another wholly-owned Subsidiary of the Company), free and clear of any Encumbrances other than Permitted Encumbrances.

     4.8 SEC Filings; Interim Financial Statements.

     Since September 30, 2002, the Company and its Subsidiaries have filed with the Commission all forms, reports, schedules, statements, and other documents required to be filed by it under the Securities Act, the Exchange Act and the rules and regulations promulgated thereunder. Each SEC Filing was prepared in accordance with, and at the time of filing complied in all material respects with, the requirements of the Securities Act, the Exchange Act or other applicable federal securities law and the rules and regulations promulgated thereunder, as applicable to such SEC Filing. None of the SEC Filings, including, without limitation, any financial statements or schedules included therein, at the time filed, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements contained therein, in light of the circumstances under which they were made, and at the time they were made, not misleading. The consolidated financial statements (including, in each case, any related notes thereto) contained in the SEC

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Filings (i) have been prepared in conformity with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis (except as described therein), (ii) comply in all material respects as to form with applicable requirements and rules and regulations of the SEC with respect thereto and (iii) and present fairly the consolidated financial position of the Company and its consolidated Subsidiaries at the respective dates thereof and the consolidated results of its operations and changes in cash flows for the period indicated (subject to normal year-end audit adjustments in the case of any unaudited interim financial statements).

     4.9 Absence of Undisclosed Liabilities.

     Except as set forth on Schedule 4.9, any liabilities incurred pursuant to this Agreement, or to the extent disclosed in the SEC Filings filed with the Commission prior to the date hereof, neither the Company nor any of its Subsidiaries has any material liabilities or obligations (whether absolute, contingent, liquidated or unliquidated, or due or to become due), except for obligations and liabilities that have arisen in the ordinary course of business consistent with past practice.

     4.10 Absence of Certain Changes.

     Except as set forth on Schedule 4.10 or to the extent disclosed in the SEC Filings, since December 31, 2004, there has not occurred (i) any Material Adverse Change, (ii) any declaration, setting aside or payment of any dividend or other distribution (whether in cash, stock or property) with respect to any of the Company’s currently outstanding capital stock, (iii) any split, combination or reclassification of any of its outstanding capital stock or any issuance or the authorization of any issuance of any other securities in respect of, in lieu of or in substitution for shares of the Company’s outstanding capital stock, (iv) (x) any granting by the Company or any of its Subsidiaries to any director or executive officer of the Company or any of its Subsidiaries of any material increase in compensation or material acceleration of benefits, except in the ordinary course of business consistent with prior practice or as was required or permitted under the LTEIP, (y) granting by the Company or any of its Subsidiaries to any director, executive officer of the Company or any of its Subsidiaries of any material increase in, or material acceleration of benefits in respect of, severance or termination pay, or pay in connection with a change of control of the Company, except in the ordinary course of business consistent with prior past practice or as was required under any employment, severance or termination agreements in effect as of September 30, 2005 or (z) any entry by the Company or any of its Subsidiaries into any employment, change of control, or termination or similar agreement with any director, executive officer or other employee or independent contractor other than in the ordinary course of business, or (v) any change in accounting methods, principles or practices by the Company or any of its Subsidiaries materially affecting its assets, liability or business, except insofar as may have been required by GAAP.

     4.11 Compliance With Laws.

     Except as disclosed pursuant to Sections 4.13, 4.14 or 4.15 or as set forth on Schedule 4.11, and matters that, in the aggregate, would not have a Material Adverse Effect, (i) the Company and its Subsidiaries are, and at all times during the past three (3) years have been, in

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material compliance with all Applicable Laws; (ii) each of the Company and its Subsidiaries has obtained and holds all Permits necessary for the lawful conduct of its business or the lawful ownership, use and operation of its assets; (iii) neither the Company nor any of its Subsidiaries has received any written notice of any material violation of any Applicable Law, which has not been dismissed or otherwise disposed of, that the Company or any Subsidiary has not so materially complied other than with respect to violations of Applicable Law; and (iv) neither the Company nor any of its Subsidiaries is charged or, to the Knowledge of the Company, threatened with, or, to the Knowledge of the Company, under investigation with respect to, any material violation of any Applicable Law relating to any material aspect of the business of the Company or any Subsidiary.

     4.12 Litigation.

     Except as set forth on Schedule 4.12 or to the extent expressly disclosed in the SEC Filings there are no Proceedings pending or, to the Knowledge of the Company, threatened against or involving the Company or any Subsidiary (or any of their respective directors or officers in connection with the business or affairs of the Company or any Subsidiary) that are reasonably likely to have a Material Adverse Effect. As of the date hereof, there are no Proceedings pending or, to the Knowledge of the Company, threatened seeking to restrain, prohibit, or obtain damages in connection with this Agreement or the transactions contemplated hereby.

     4.13 Employee Benefit Plans and Other Agreements.

          (a) Disclosure; Delivery of Copies of Relevant Documents and Other Information. Schedule 4.13 contains a complete list of (i) Employee Plans which cover present or former employees, directors or consultants of the Company or any of its Subsidiaries (with respect to their relationship with such entities); (ii) Employee Plans which cover or have covered present or former employees, directors or consultants of the Company or any of its Subsidiaries (with respect to their relationship with such entities) with respect to which any unsatisfied liability exists; and (iii) Pension Plans covered by Title IV of ERISA or Multiemployer Plans which cover or have covered within the past five (5) years present or former employees, directors or consultants of the Company or any of its Subsidiaries (with respect to their relationship with such entities).

          (b) Employee Plans. Except as set forth in Schedule 4.13, the Company represents and warrants with respect to the Employee Plans listed on Schedule 4.13 as follows:

     (i) Pension Plans.

          (A) To the Knowledge of the Company in reliance on its enrolled actuary, the funding method used in connection with each Pension Plan which is subject to the minimum funding requirements of ERISA is acceptable and the actuarial assumptions used in connection with funding each such plan are reasonable. No “accumulated funding deficiency” (for which an excise tax is due or would be due in the absence of a waiver) as defined in Section 412 of the Code or as defined in Section 302(a)(2) of ERISA, whichever may apply, has been

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incurred with respect to any Pension Plan with respect to any plan year, whether or not waived. Neither the Company nor any ERISA Affiliate has failed to pay when due any “required installment”, within the meaning of Section 412(m) of the Code and Section 302(e) of ERISA, whichever may apply, with respect to any Pension Plan. Neither the Company nor any ERISA Affiliate is subject to any lien imposed under Section 412(n) of the Code or Section 302(f) of ERISA, whichever may apply, with respect to any Pension Plan. Neither the Company nor any ERISA Affiliate has any liability for unpaid contributions with respect to any Pension Plan.

          (B) Neither the Company nor any ERISA Affiliate is required to provide security to any Company Pension Plan under Section 401(a)(29) of the Code.

          (C) The form of each Pension Plan and each related trust agreement, annuity contract, or other funding instrument that is intended to be qualified is qualified in form and tax-exempt under the provisions of Code Sections 401(a) (or 403(a), as appropriate) and 501(a) and has been determined by the Internal Revenue Service (the “IRS”) to be so qualified in form from its adoption date if such a determination is required.

          (D) Each Company Pension Plan and each related trust agreement, annuity contract or other funding instrument presently complies and has been maintained in compliance, in all material respects, with its terms and, both as to form and in operation, with the requirements prescribed by any and all statutes, orders, rules and regulations which are applicable to such plans, including without limitation ERISA and the Code, except where such noncompliance has been corrected pursuant to the terms of or in a manner consistent with the principles under the IRS Employee Plans Compliance Resolution System, or is not reasonably likely to have a Material Adverse Effect.

          (E) The Company has paid all premiums (and interest charges and penalties for late payment, if applicable) due the PBGC with respect to each Pension Plan for each plan year thereof for which such premiums are required. Neither the Company nor any ERISA Affiliate has engaged in, or is a successor or parent corporation to an entity that has engaged in, a transaction described in Section 4069 of ERISA. There has been no “reportable event” (as defined in Section 4043(b) of ERISA and the PBGC regulations under such Section) with respect to any Pension Plan for which the Company or any ERISA Affiliate has any unsatisfied liability. No filing has been made by the Company or any ERISA Affiliate with the PBGC, and no proceeding has been commenced by the PBGC, to terminate any Pension Plan. To the Knowledge of the Company, no condition exists and no event has occurred that could constitute grounds for the termination of any Pension Plan by the PBGC. Neither the Company nor any ERISA Affiliate has any unsatisfied liability because the Company or any ERISA Affiliate, at any time, (1) ceased operations at a facility so as to become subject to the provisions

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of Section 4062(e) of ERISA, (2) withdrawn as a substantial employer so as to become subject to the provisions of Section 4063 of ERISA, or (3) ceased making contributions on or before the Closing Date to any Pension Plan subject to Section 4064(a) of ERISA to which the Company or any ERISA Affiliate made contributions during the six years prior to the Closing Date.

     (ii) Multiemployer Plans. Neither the Company nor any ERISA Affiliate has, at any time within the last 72 months, maintained, contributed to or been obligated to maintain or contribute to, or withdrawn from, a Multiemployer Plan.

     (iii) Welfare Plans.

          (A) Each Welfare Plan presently complies and has been maintained in compliance, in all material respects, with its terms and, both as to form and operation, with the requirements prescribed by any and all statutes, orders, rules and regulations which are applicable to such Welfare Plan, including without limitation ERISA and the Code.

          (B) Except as disclosed on Schedule 4.13, none of the Company, any ERISA Affiliate or any Welfare Plan has any present or future obligation to make any payment to, or with respect to any present or former employee of the Company or any ERISA Affiliate pursuant to, any retiree medical benefit plan, or other retiree Welfare Plan, and no condition exists which would prevent the Company from amending or terminating any such benefit plan or Welfare Plan.

     (iv) Unrelated Business Taxable Income. No Employee Plan (or trust or other funding vehicle pursuant thereto) is subject to any tax under Code Section 511.

     (v) Fiduciary Duties and Prohibited Transactions. Neither the Company, or to the Knowledge of the Company, any plan fiduciary of any Welfare Plan or Pension Plan, has engaged in any transaction in violation of Sections 404 or 406 of ERISA or any “prohibited transaction,” as defined in Section 4975(c)(1) of the Code, for which no exemption exists under Section 408 of ERISA or Section 4975(c)(2) or (d) of the Code, or has otherwise violated the provisions of Part 4 of Title I, Subtitle B of ERISA. The Company has not, to the Knowledge of the Company, knowingly participated in a violation of Part 4 of Title I, Subtitle B of ERISA by any plan fiduciary of any Welfare Plan or Pension Plan and has not been assessed any civil penalty under Section 502(l) of ERISA.

     (vi) Validity and Enforceability. Each employee welfare benefit plan, related trust agreement, annuity contract or other funding instrument is legally valid and binding and in full force and effect.

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     (vii) No Amendments. Except as disclosed in Schedule 4.13, neither the Company nor any ERISA Affiliate has any announced plan or legally binding commitment to create any additional Employee Plans which are intended to cover present or former employees, directors or consultants of the Company or any of its Subsidiaries (with respect to their relationship with such entities) or to amend or modify any existing Employee Plan.

     (viii) No Other Material Liability. To the Knowledge of the Company, no event has occurred in connection with which the Company or any ERISA Affiliate or any Employee Plan, directly or indirectly, could be subject to any material liability (A) under any statute, regulation or governmental order relating to any Employee Plan or (B) pursuant to any obligation of the Company to indemnify any Person against liability incurred under any such statute, regulation or order as they relate to the Employee Plans.

     (ix) Unpaid Contributions. Neither the Company nor any ERISA Affiliate has any liability for unpaid contributions under Section 515 of ERISA with respect to any Multiemployer Plan.

     (x) No Acceleration or Creation of Rights. Except as disclosed on Schedule 4.13, neither the execution and delivery of this Agreement by the Company nor the consummation of the transactions contemplated hereby will result in the acceleration or creation of any rights of any person to benefits under any Employee Plan.

     4.14 Taxes.

     Since September 30, 2002, except as expressly disclosed in the SEC Filings, or as set forth in Schedule 4.14:

          (a) The Company and each of its Subsidiaries (hereinafter sometimes referred to collectively as the “Taxpayers” or individually as a “Taxpayer”) have timely filed with the appropriate Tax authorities all Tax Returns required to be filed by each of them, and such Tax Returns are true, complete, and correct in all material respects.

          (b) The Taxpayers have duly paid in full all material Taxes that are payable by each such Taxpayer on or prior to the Closing Date, and have accrued Taxes for any period that begins prior to the Closing Date and ends after the Closing Date in the Taxpayers’ financial records and in the financial statements contained in the SEC Filings to the extent that such Taxes are not required to be paid on or prior to the Closing Date.

          (c) There is no audit or other matter in controversy with respect to any Taxes due and owing by any Taxpayer, and there is no Tax deficiency or claim assessed or, to the Knowledge of the Company, proposed or threatened in writing against any Taxpayer, other than in respect of any such audits, controversies, deficiencies, assessments, or proposed assessments that are being contested in good faith and, if the amount in controversy exceeds $100,000, are disclosed in Schedule 4.14.

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          (d) The Taxpayers each have withheld all material Taxes required to have been withheld and paid by them on their behalf in connection with amounts paid or owing to any employee, independent contractor, creditor, shareholder, or other third party, and such withheld Taxes have either been duly paid to the proper Governmental Authority or set aside in accounts for such purpose.

          (e) None of the Taxpayers (i) has waived any statutory period of limitations for the assessment of any Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency other than in the case of any such waivers or extensions in respect of an assessment or deficiency of Tax the liability of which has been satisfied or settled or has expired, (ii) has filed a consent under Internal Revenue Code Section 341(f) concerning collapsible corporations, or (iii) except as set forth in Schedule 4.14, has any liability for the Taxes of any other person as defined in Section 7701(a)(1) of the Internal Revenue Code under Treasury Regulation § 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee, successor or by contract other than with respect to the other Taxpayers.

          (f) No claim has been made in any taxable year which remains open by an authority in a jurisdiction where a Taxpayer does not file Tax Returns that such Taxpayer is or may be subject to taxation by that jurisdiction.

          (g) None of the Taxpayers has agreed to or is required to make any adjustment pursuant to Internal Revenue Code Section 481(a) by reason of a change in accounting method initiated by such Taxpayer, and to the Knowledge of the Company, the IRS has not proposed any such adjustment or change in accounting method.

          (h) Except as set forth in Schedule 4.14, none of the Taxpayers has any obligation under any Tax allocation or sharing agreement, and after the Closing Date, no Taxpayer shall be a party to, bound by or have any obligation under any Tax allocation or sharing agreement or have any liability thereunder for amounts due in respect of periods prior to and including the Closing Date.

          (i) Except as set forth on Schedule 4.14, none of the Taxpayers (i) has made any payments, (ii) is obligated to make any payments (whether as a result of the transactions contemplated hereby or otherwise), and (iii) is a party to any agreement as of the Closing Date that could obligate it to make any payments, in each case, that will not be deductible under Internal Revenue Code Section 280G.

     4.15 Environmental Matters.

          (a) Except as disclosed in Schedule 4.15 or the SEC Filings, the Company and its Subsidiaries: (i) are in material compliance with all applicable Environmental Laws; and (ii) hold all material Environmental Permits (each of which is in full force and effect) required for any of their current operations or for any property owned, leased or otherwise operated by any of them.

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          (b) Except as set forth on Schedule 4.15 or the SEC Filings, the Company and its Subsidiaries have not received any written notice of alleged, actual or potential responsibility for, or any inquiry or investigation regarding, any material Environmental Condition.

          (c) Except as disclosed in Schedule 4.15 or the SEC Filings, to the Knowledge of the Company, Hazardous Materials have not been transported, disposed of or otherwise Released, to or at any real property presently owned or leased by the Company or any of its Subsidiaries, or any other location, which Hazardous Materials are reasonably expected to (i) give rise to any material liability of the Company or any Subsidiary under any applicable Environmental Law, or (ii) interfere in any material respect with the Company’s or any Subsidiary’s continued operations.

          (d) Except as disclosed in Schedule 4.15 or the SEC Filings, neither the Company nor any of its Subsidiaries is charged or, to the Knowledge of the Company, threatened with, or, to the Knowledge of the Company, under investigation with respect to, any material violation of any applicable Environmental Law relating to any material aspect of the business of the Company or any Subsidiary.

     4.16 Insurance.

     Schedule 4.16 sets forth a list all insurance policies held by, or for the benefit of, the Company and its Subsidiaries as of the date hereof, and further sets forth the name of the insurer, type of coverage, policy limits and deductibles and additional insureds, if any, and the annual premium for each such policy. Each of the Company and its Subsidiaries carry insurance with reputable insurers (except as to self-insurance) with respect to each of their respective properties and business, in such amounts and against such risks as is customarily maintained by other entities of similar size engaged in similar businesses (which may include self-insurance in amounts customarily maintained by companies similarly situated or has been maintained in the past by the Company and its Subsidiaries). Neither the Company nor any of its Subsidiaries has received any notice of cancellation or non-renewal of any insurance policies or binders set forth on Schedule 4.16.

     4.17 Title to Assets.

     Except for Permitted Encumbrances and except as set forth on Schedule 4.17, the Company and its Subsidiaries have good and marketable title to, or valid and subsisting leasehold interests in, all tangible assets material to their business as currently conducted, and valid ownership or licensing rights to all intangible assets material to their businesses as currently conducted. Except for Permitted Encumbrances and as set forth on Schedule 4.17, none of the material assets is subject to any Encumbrance, except for Encumbrances which, individually or in the aggregate, are not substantial in amount and do not materially detract from the value of the property or assets of the Company and its Subsidiaries, taken as a whole, or materially interfere with the present use of such property or assets (taken as a whole). All such material leases are valid, binding and enforceable with respect to the Company and its Subsidiaries, to the extent each is a party thereto, in accordance with their terms (except that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization,

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moratorium, and similar laws relating to or affecting creditors’ rights generally, and (ii) general equitable principles) and are in full force and effect; no event of default has occurred which constitutes a material default thereunder on the part of the Company or any Subsidiary and to the Knowledge of the Company, no event has occurred which constitutes a material default thereunder by any other party.

     4.18 Condition of Tangible Assets.

     The Facilities of the Company and its Subsidiaries and the Fixtures and Equipment taken as a whole are in a condition reasonably sufficient for the operation of the business of the Company and its Subsidiaries as presently conducted.

     4.19 Labor Matters.

     Except for the Collective Bargaining Agreement with the Kitty Hawk Pilots Association International dated October 17, 2003, and as otherwise described in the SEC Filings, neither the Company nor any of its Subsidiaries is a party to any collective bargaining or similar agreement with any labor union, collective bargaining unit or similar organization. There is no material unfair labor practice charge or complaint against the Company or any Subsidiary pending before the National Labor Relations Board or any other governmental agency arising out of the activities of the Company or any of its Subsidiaries. There is no labor strike or labor disturbance pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries. To the Knowledge of the Company, there is no material grievance currently being asserted against the Company or its Subsidiaries and neither the Company nor any Subsidiary has experienced since December 31, 2004, the assertion of a material grievance, a work stoppage or other labor difficulty.

     4.20 Intellectual Property.

          (a) The Company and its Subsidiaries either own or have valid licenses or other rights to use all patents, copyrights, trademarks, tradenames, software, other intellectual property used in their businesses as presently conducted (“Proprietary Rights”), subject to the limitations contained in the agreements governing the use of the same and, except with respect to software other than “shrink-wrap” or “off-the-shelf” software, as set forth on Schedule 4.20. There are no limitations contained in the agreements of the type described in the immediately preceding sentence which, upon consummation of the transactions contemplated hereunder, will alter or impair any such rights, breach any such agreement with any third party vendor, or require payments of additional sums thereunder. The Company and its Subsidiaries are in compliance in all material respects with the material licenses and agreements with respect to their Proprietary Rights.

          (b) The Proprietary Rights constitute all material intellectual property rights necessary to conduct the business as presently conducted. To the Knowledge of the Company, the use by the Company and its Subsidiaries of the Proprietary Rights does not infringe in any material respect on the intellectual property or other Proprietary Rights of any other Person, and, to the Knowledge of the Company, no other Person is infringing, in any material respects, on the Proprietary Rights.

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     4.21 No Brokers.

     Except as described on Schedule 4.21 hereof, the Company has not employed, and is not subject to the valid claim of, any broker, finder, consultant or other intermediary in connection with the transactions contemplated hereby who might be entitled to a fee or commission from the Company in connection with such transactions.

     4.22 Contracts; No Defaults.

          (a) Schedule 4.22(a) contains a complete and accurate list of all contracts and arrangements described below in clauses (i) through (ix) below to which the Company or any Subsidiary of the Company is a party (“Contracts”), excluding those Contracts expressly described in the SEC Filings:

     (i) each contract or arrangement currently in effect involving performance of services or delivery of goods or materials by the Company or any of its Subsidiaries of an amount or value in any fiscal year in excess of $5,000,000;

     (ii) each note, debenture, other evidence of indebtedness, loan, or financing agreement or instrument or other contract for money borrowed, including any agreement or commitment for future loans, credit or financing entered into by the Company or any of its Subsidiaries evidencing indebtedness in excess of $5,000,000, individually or in the aggregate;

     (iii) each lease, rental agreement, installment and conditional sale agreement, and other contract or arrangement affecting the ownership of, leasing of, or any leasehold or other interest in, any real or personal property and involving payments in any fiscal year in excess of $5,000,000;

     (iv) each licensing agreement or other agreement with respect to any material Proprietary Rights;

     (v) each collective bargaining agreement or other agreement to or with any labor union or other employee representative of a group of employees relating to wages, hours and other conditions of employment;

     (vi) each joint venture agreement, partnership agreement, or limited liability company agreement or other agreement (however named) involving a sharing of profits, losses, costs or liabilities by the Company or any of its Subsidiaries with any other Person;

     (vii) each agreement that commits capital expenditures after the date hereof in an amount in excess of $5,000,000;

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     (viii) each written warranty, guaranty or other similar undertaking with respect to contractual performance of a third person extended by the Company or any of its Subsidiaries other than in the ordinary course of business; and

     (ix) each contract containing covenants which in any way purport to limit the freedom of the Company or any of its Subsidiaries to compete with any Person.

          (b) Except as set forth on Schedule 4.22(b), each of the Contracts listed on Schedule 4.22(a): (i) is in full force and effect, (ii) represents legal, valid and binding obligations of the Company or the Subsidiary of the Company party thereto and is enforceable against the Company or such Subsidiary in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights generally and general equitable principles), and (iii) to the Knowledge of the Company, represent legal, valid and binding obligations of the other parties thereto and are enforceable against such parties in accordance with their terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights generally and general equitable principles). Except as set forth on Schedule 4.22(b), and to the Knowledge of the Company, no condition exists or event has occurred which, with notice or lapse of time or both, would constitute a material default under such Contracts.

          (c) Except as set forth on Schedule 4.22(c), there are no renegotiations of, or, to the Knowledge of the Company, threats to renegotiate any material amounts paid or payable to the Company or any of its Subsidiaries under the Contracts, with any Person having the contractual right to demand or require such renegotiation.

          (d) Except as specifically noted on Schedule 4.6, no notice, consent or approval of any party to any Contract is required in connection with the transactions contemplated hereby.

          (e) Except as set forth on Schedule 4.22(e), to the Knowledge of the Company, neither the Company nor any of its Subsidiaries has committed any act or omission which would result in, and there has been no occurrence which would give rise to, any material product liability or liability for breach of warranty on the part of the Company or any of its Subsidiaries not fully covered by the Company’s insurance, other than liabilities the claims relating to which have been barred by the applicable statute of limitations.

     4.23 Customers.

     Except as disclosed in Schedule 4.23, neither the Company nor any Subsidiary has received any actual notice that any of its top ten (10) customers has ceased, or intends to cease, to use its services, or has substantially reduced, or intends to substantially reduce, the use of such services at any time.

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     4.24 Affiliated Transactions.

     Other than this Agreement, except as set forth in Schedule 4.24, or to the extent disclosed in the SEC Filings filed, and except for payments under an individual’s compensation or other benefit arrangements with the Company or any of its Subsidiaries and reimbursement of expenses in the ordinary course of employment, none of the officers, directors or other Affiliates of the Company or any of its Subsidiaries or members of their families is, or at any time in the last three (3) years has been, a party to any agreement, indebtedness or transaction with the Company or any of its Subsidiaries or is directly or indirectly interested in any Contract with, or received payments from, the Company or any of its Subsidiaries other than (i) ordinary course employment arrangements between the Company and its Subsidiaries and their respective employees, (ii) payment of customary directors fees to directors of the Company (and reimbursement of related expenses) and (iii) transactions between or among the Company and its Subsidiaries. Except as set forth on Schedule 4.24 or as set forth in the SEC Filings, neither the Company nor any of its Subsidiaries has guaranteed or assumed any obligations of their respective officers, directors or other Affiliates or members of any of their families.

     4.25 Real Property.

     Except as listed on Schedule 4.25, the Company and its subsidiaries have no Owned Real Property, the Company and its Subsidiaries have no Owned Real Property. Schedule 4.25 lists the address of all real property occupied by the Company or any of its Subsidiaries.

     4.26 Reporting Status; Eligibility to Use Form S-3.

     The Common Stock is registered under Section 12g of the Exchange Act. The Company currently meets the “registrant eligibility” requirements set forth in the general instructions to Form S-3 to enable the registration of the Registrable Securities (as defined in the Registration Rights Agreement), and has no Knowledge of any facts or circumstances which are reasonably likely to change its compliance with such requirements or eligibility to use Form S-3.

     4.27 Representations Complete.

     The representations and warranties made by the Company in this Agreement, and the statements made in any certificates furnished by the Company pursuant to this Agreement, taken as a whole, do not contain and will not contain, as of their respective dates and as of the Closing Date, any untrue statement of a material fact or omit to state any material fact necessary in order to make such statements, taken as a whole, in light of the circumstances under which they were made, not misleading.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES OF PURCHASERS

     Each Purchaser hereby represents and warrants, severally and not jointly, to the Company as follows:

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     5.1 Standing of Purchaser.

     If such Purchaser is an entity, such Purchaser is duly formed or incorporated, validly existing and in good standing under the laws of its jurisdiction of formation or incorporation, and all other jurisdictions in which it is required to so qualify.

     5.2 Due Authorization.

     Such Purchaser has full corporate, partnership, trust, or other applicable power and authority to enter into this Agreement, the Registration Rights Agreement, and the Standstill Agreement, and to perform its obligations hereunder and thereunder. This Agreement has been duly executed and delivered by such Purchaser and constitutes, the Registration Rights Agreement has been duly executed and delivered by such Purchaser and constitutes, and the Standstill Agreement has been duly executed and delivered by such Purchaser and constitutes, a valid and legally binding obligation of such Purchaser, enforceable against Purchaser in accordance with its terms, except that such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors’ rights generally and (ii) general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law and (iii) laws and judicial decisions regarding indemnification for violations of federal securities laws).

     5.3 No Conflict.

     The execution and delivery by such Purchaser of this Agreement and the Registration Rights Agreement and the performance by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or result in a violation of any provision of the agreement of any governing agreement of such Purchaser, (ii) conflict with or result in a violation of any provision of, or constitute (with or without the giving of notice or the passage of time or both) a default under, or give rise (with or without the giving of notice or the passage of time or both) to any right of termination, cancellation, or acceleration under, any material bond, debenture, note, mortgage, indenture, lease, agreement, or other instrument or obligation to which such Purchaser is a party or by which such Purchaser or any of its properties may be bound, (iii) result in the creation or imposition of any Encumbrance upon the properties of such Purchaser, or (iv) violate in any material respect any Applicable Law binding upon such Purchaser, except, in the case of clauses (ii), (iii), and (iv) above, for any such conflicts, violations, defaults, terminations, cancellations, accelerations, or Encumbrances which would not, individually or in the aggregate, materially and adversely affect the ability of such Purchaser to consummate the transactions contemplated hereby. Without limiting the generality of the foregoing, the Purchaser represents and warrants to the Company that the execution and delivery by such Purchaser of this Agreement and the Registration Rights Agreement and the performance by it of the transactions contemplated hereby and thereby do not and will not violate any rule or regulation of the National Association of Securities Dealers applicable to such Purchaser.

     5.4 Consents and Approvals.

     No consent, approval, order or authorization of, or declaration, filing or registration with, any Government Entity or third party is required to be obtained or made by Purchaser in

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connection with the execution and delivery by Purchaser of this Agreement and the Registration Rights Agreement or the consummation of the transaction contemplated hereby and thereby other than (i) any filings required under Section 13 of the Exchange Act and Rule 13d-1 under the Exchange Act and (ii) such consents, approvals, orders or authorization which, if not made, would not, individually or in the aggregate, materially and adversely affect the ability of the Purchaser to consummate the transactions contemplated hereby.

     5.5 Purchase for Investment.

          (a) Such Purchaser has been furnished with all information that it has requested for the purpose of evaluating the proposed acquisition of the Preferred Shares and the Warrants pursuant hereto, and such Purchaser has had an opportunity to ask questions of and receive answers from the Company regarding the Company and its business, assets, results of operations, financial condition and prospects and the terms and conditions of the issuance of the Preferred Shares and the Warrants.

          (b) Such Purchaser is acquiring the Preferred Shares and Warrants solely by and for its own account, for investment purposes only and not for the purpose of resale or distribution; and such Purchaser has no contract, undertaking, agreement or arrangement with any Person to sell, transfer of pledge to such Person or anyone else any Preferred Shares or Warrants; and such Purchaser has no present plans or intentions to enter into any such contract, undertaking or arrangement.

          (c) Such Purchaser acknowledges and understands that (i) no registration statement relating to the Preferred Shares, the Warrants, the Conversion Shares or the Warrant Shares has been filed with the Commission under the Securities Act or pursuant to the securities laws of any state; (ii) the Preferred Shares, the Warrants, the Conversion Shares and the Warrant Shares cannot be sold or transferred without compliance with the registration provisions of the Securities Act or compliance with exemptions, if any, available thereunder; (iii) the certificates representing the respective Preferred Shares will include a legend thereon that refers to the foregoing; and (iv) the Company has no obligation or intention to register the Preferred Shares, the Warrants, the Conversion Shares or the Warrant Shares under any federal or state securities act or law, except as provided in the Registration Rights Agreement.

          (d) Such Purchaser (i) is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act; (ii) has such knowledge and experience in financial and business matters in general that it has the capacity to evaluate the merits and risks of an investment in the Preferred Shares and the Warrants and to protect its own interest in connection with an investment in the Preferred Shares and the Warrants; (iii) has such a financial condition that it has no need for liquidity with respect to its investment in the Preferred Shares and the Warrants to satisfy any existing or contemplated undertaking, obligation or indebtedness; and (iv) is able to bear the economic risk of its investment in the Preferred Shares and the Warrants for an indefinite period of time.

          (e) Such Purchaser is not a registered broker-dealer under Section 15 of the Exchange Act. Such Purchaser is not an affiliate of a broker-dealer, or if such Purchaser is an

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affiliate of a broker-dealer, such Purchaser has no agreement or understanding, directly or indirectly, with any Person to distribute any of the Preferred Shares, Warrants, Conversion Shares or Warrant Shares.

     5.6 Short Sales and Hedging Transactions; Regulation M.

     Such Purchaser represents that, within the six month period prior to the Closing Date, it has not directly or indirectly, executed or effected or caused to be executed or effected any short sale, option or equity swap transactions in or with respect to the Preferred Shares, the Warrants, the Conversion Shares, the Warrant Shares or any other derivative security transaction the purpose or effect of which is to hedge or transfer to a third party all or any part of the risk of loss associated with the ownership of the Preferred Shares, the Warrants, the Conversion Shares or the Warrant Shares by such Purchaser. Such Purchaser has complied at all times with the provisions of Regulation M promulgated under the Securities Act as applicable to the Preferred Shares, the Warrants, the Conversion Shares and the Warrant Shares.

     5.7 No Legal, Tax or Investment Advice.

     Such Purchaser understands that nothing in this Agreement or any other materials presented to such Purchaser in connection with the purchase and sale of the Preferred Shares or the Warrants constitutes legal, tax or investment advice. Such Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Preferred Shares or the Warrants.

     5.8 No Brokers.

     Purchaser has not employed, and is not subject to the valid claim of, any broker, finder, consultant or other intermediary in connection with the transactions contemplated by this Agreement who might be entitled to a fee or commission in connection with such transactions.

ARTICLE VI.

COVENANTS

     6.1 Continuing Operations.

     From the date of this Agreement to the earlier of (i) the Closing Date and (ii) the termination of this Agreement in accordance with Section 9.1 (the “Interim Period”), the Company and its Subsidiaries shall conduct their businesses in the ordinary and usual course consistent with past practices, and, except as set forth on Schedule 6.2 or as contemplated by this Agreement, neither the Company nor any Subsidiary shall, without the prior consent of Purchasers:

          (a) make any loans or advances to any Person, other than (i) advances to employees in the ordinary and usual course of business and (ii) transactions among or between the Company and its Subsidiaries conducted in the ordinary and usual course of business;

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          (b) sell, lease, transfer or otherwise dispose of, all or substantially all of the assets of the Company or its Subsidiaries, taken as a whole (other than the sale of inventory in the ordinary course), or any equity securities of the Company or its Subsidiaries (other than the issuance of shares of Common Stock upon exercise of Awards currently outstanding);

          (c) enter into, adopt, or (except as may be required by law) amend or terminate any collective bargaining agreement or any material Benefit Arrangement; approve or implement any employment severance arrangements (other than payments made under the Company’s existing severance policy in accordance with past practice) or hire or discharge any executive officers; authorize or enter into any employment, severance, consulting services or other agreement with any directors, officers and executive management personnel or any of their Affiliates; or change the compensation or benefits provided to any director, officer, or employee as of October 1, 2005, other than arrangements previously disclosed to Purchaser (other than ordinary course changes in base compensation which in the aggregate is not material);

          (d) enter into any speculative or commodity swaps, hedges or other derivatives transactions or purchase any securities for investment purposes, other than in connection with cash management of the Company or in the ordinary course of business;

          (e) issue any shares of capital stock (other than shares of Common Stock issuable upon exercise of currently outstanding Awards);

          (f) declare or pay dividends on, or make any other distribution in respect of, any outstanding shares of the Company’s capital stock or repurchase, redeem or otherwise retire for value any shares of its capital stock, other than shares of Common Stock acquired in connection with the cashless exercise of Awards; or

          (g) enter into a binding agreement to do any of the foregoing.

     6.2 Press Releases.

     Except as may be required by Applicable Law or by the rules, regulations or published policies of the securities exchange on which the Company is listed, neither Purchasers nor the Company shall issue any press release with respect to this Agreement or the transactions contemplated hereby without the prior consent of the other (which consent shall not be unreasonably withheld under the circumstances).

     6.3 Notification of Certain Matters.

     During the Interim Period, subject to compliance with Applicable Laws and exchange rules, the Company shall give prompt notice to the Purchasers, and the Purchasers shall give prompt notice to the Company, of (i) the occurrence, or failure to occur, of any event which occurrence or failure would be likely to cause any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect any time from the date hereof to the Closing Date and (ii) any material failure of the Company or the Purchasers, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied

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by it hereunder, and each party shall use all commercially reasonable efforts to remedy such failure.

     6.4 Financial Statements, Reports, Etc.

     The Company shall furnish to each Purchaser:

     (a) within ninety (90) days after the end of each fiscal year of the Company, a consolidated balance sheet of the Company and its Subsidiaries, as of the end of such fiscal year and the related consolidated statements of income for the fiscal year then ended, prepared in accordance with GAAP and certified by a firm of independent public accountants of recognized national standing selected by the Board of Directors of the Company;

     (b) within forty five (45) days after the end of each fiscal quarter in each fiscal year, a consolidated balance sheet of the Company and its Subsidiaries, and the related consolidated statements of income unaudited but prepared in accordance with GAAP and certified by the Chief Financial Officer of the Company, such consolidated balance sheet to be as of the end of such fiscal quarter and such consolidated statements of income to be for such fiscal quarter and for the period from the beginning of the fiscal year to the end of such fiscal quarter;

     (c) promptly after the commencement thereof, notice of all actions, suits, claims, proceedings, investigations and inquiries of the type described in Section 4.12 of this Agreement that could materially adversely affect the Company or any of its subsidiaries, if any;

     (d) promptly upon sending, making available or filing the same, all press releases, reports and financial statements that the Company sends or makes available to its stockholders or directors or files with the Commission; and

     (e) promptly, from time to time, such other information regarding the business, prospects, financial condition, operations, property or affairs of the Company and its Subsidiaries as such Purchaser reasonably may request.

     Notwithstanding this Section 6.4, so long as the Company is required to make filings pursuant to the Exchange Act and makes such filings in a timely manner, the Company shall be deemed to have furnished to the Purchasers the financial statements and other reports required by this Section 6.4.

     6.5 Use of Proceeds.

     The Company shall use the proceeds from the sale of the Preferred Shares and Warrant Shares solely for working capital and general corporate purposes.

     6.6 Continued Eligibility to Use Form S-3.

     Throughout the Registration Period (as defined in the Registration Rights Agreement), the Company will timely file all reports, schedules, forms, statements and other documents required to be filed by it with the Commission under the reporting requirements of the Exchange

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Act, and the Company will not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would permit such termination. The Company will take all reasonably necessary action to continue to meet the “registrant eligibility” requirements set forth in the general instructions to Form S-3 to enable the registration of the Registrable Securities (as defined in the Registration Rights Agreement), provided that the Company shall not obligated to continue to meet the Form S-3 eligibility requirements if the Purchasers, or the relationship among the Purchasers and their affiliates, causes the Company to fail meet such eligibility requirements.

     6.7 Listing.

     So long as any Preferred Shares or Warrants remain outstanding, the Company shall use its best efforts to ensure that the Common Stock continues to be listed for trading on a national securities exchange.

     6.8 Transfer Restrictions.

          (a) Each Purchaser agrees that it shall not sell, assign, pledge, transfer or otherwise dispose of or encumber any of the Preferred Shares, the Warrants, the Conversion Shares or the Warrant Shares, except (i) pursuant to an effective registration statement under the Securities Act, or (ii) pursuant to an available exemption from registration under the Securities Act and applicable state securities laws and, if requested by the Company, upon delivery by such Purchaser of an opinion of counsel of such Purchaser reasonably satisfactory to the Company to the effect that the proposed transfer is exempt from or does not require registration under the Securities Act and applicable state securities laws. Any transfer or purported transfer of the Preferred Shares, the Warrants, the Conversion Shares or the Warrant Shares in violation of this Section 6.8 shall be void. The Company shall not register any transfer of the Preferred Shares, the Warrants, the Conversion Shares, or the Warrant Shares in violation of this Section 6.8.

          (b) Unless the Company sells all or substantially all of its assets, mergers, consolidates with or into another Person, enters into, effects or announces any similar transaction, enters into any agreement to effect such transaction, effects any liquidation, dissolution or winding-up of the Company, reclassifies any shares of Common Stock, or enters into any agreement or consummates any transaction that would constitute a change of control, the Purchasers shall not sell, assign, convey or otherwise transfer the Preferred Stock, the Warrants, the Conversion Shares or the Warrant Shares prior to the earlier of (i) the Effectiveness Date and (ii) the date 120 days following the Closing Date.

     6.9 Short Sales and Hedging Transactions; Regulation M.

          (a) Each Purchaser agrees that, until the Effectiveness Date, it will not, directly or indirectly, execute or effect or cause to be executed or effected any short sale, option or equity swap transactions in or with respect to the Preferred Shares, the Warrants, the Conversion Shares, the Warrant Shares or any other derivative security transaction the purpose or effect of which is to hedge or transfer to a third party all or any part of the risk of loss associated with the ownership of the Preferred Shares, the Warrants, the Conversion Shares or the Warrant Shares by such Purchaser.

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          (b) Each Purchaser agrees that, for so long as such Purchaser holds Preferred Shares, the Warrants, the Conversion Shares or the Warrant Shares, it will comply with the provisions of Regulation M promulgated under the Securities Act as applicable to the Preferred Shares, the Warrants, the Conversion Shares and the Warrant Shares.

     6.10 Legend.

          (a) The Purchaser agrees to the placement on certificates representing Preferred Shares, the Conversion Shares and the Warrant Shares a legend (the “Private Placement Legend”) substantially as set forth below:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN THAT CERTAIN SECURITIES PURCHASE AGREEMENT, DATED AS OF NOVEMBER 9, 2005, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE COMPANY.

          (b) The Private Placement Legend shall be removed from any such certificate if (i) the securities represented thereby are sold pursuant to an effective registration statement under the Securities Act, (ii) there is delivered to the Company such satisfactory evidence, which may include an opinion of counsel, as reasonably may be requested by the Company, to confirm that neither such legend nor the restrictions on transfer set forth therein are required to ensure that transfers of such securities will not violate the registration and prospectus delivery requirements of the Securities Act, or (iii) the securities represented thereby may be resold pursuant to Rule 144(k) promulgated under the Securities Act. Other than as required by Section 151(f) of the Delaware General Corporation Law, no other legends shall be placed on such certificates, without the consent of the Purchasers. Notwithstanding the foregoing, after the Effectiveness Date, the second paragraph of the Private Placement Legend shall be removed or deleted from any certificate at the request of the rightful holder of such certificate.

     6.11 Confidentiality.

          (a) Without limiting the Purchasers’ obligations under any Confidentiality Agreement with Company, each of the Purchasers agrees, on behalf of itself and each of its Affiliates, directors, officers, employees and representatives, to keep confidential any confidential non-public information supplied to it by the Company or any of its Subsidiaries pursuant to this Agreement; provided that nothing herein shall limit the disclosure of such

29

information (i) after such information shall have become public other than through a violation of this Section 6.11, (ii) to the extent required pursuant to a subpoena, civil investigative demand (or similar process), order, statute, rule or other legal requirement promulgated or imposed by a court or by a judicial, regulatory, self-regulatory or legislative body, organization, agency or otherwise in connection with any judicial or administrative proceeding (including, without limitation, in response to oral questions, interrogatories or requests for information or documents), (iii) to counsel, auditors, accountants or other representative for any of the Purchasers, (iv) to a Subsidiary, Affiliate, partner, director, officer or employee of such Purchaser provided that such parties have a need to know such information and are bound by provisions to maintain the confidentiality of such information as least as restrictive as this Section 6.11, or (v) to the extent such information has been independently developed by such Purchasers or its representative. Purchasers shall bear the burden of demonstrating the applicability of any of the exceptions set forth in clauses (i) — (v) of the previous sentence.

          (b) Unless specifically prohibited by applicable law or court order, each of the Purchasers shall, to the extent practical, prior to disclosure thereof, notify the Company of any request for disclosure of any such non-public information by any governmental agency or representative thereof or pursuant to legal process, and shall consult with the Company on the advisability of the Company (at the Company’s request) taking legally available steps to resist or narrow any such request. Such Purchaser shall be entitled to reimbursement from the Company for expenses incurred by it, including the fees and expense of counsel, in connection with any action taken pursuant to this Section 6.11.

     6.12 Issuance of Warrants.

     At the Closing, the Company shall issue to each Purchaser a warrant, substantially in the form attached as Exhibit E (the “Warrants”), to purchase that number of shares of Common Stock equal to twenty percent (20%) of the number of shares of Common Stock that the amount invested by such Purchaser would buy at $0.82 per share. Such Warrants shall expire on the fifth anniversary of the Closing Date.

ARTICLE VII.

CONDITIONS TO CLOSING

     7.1 Condition to Each Party’s Obligations.

     Neither party shall be obligated to consummate the transactions contemplated hereby, if on or prior to the Closing Date, there shall (i) be any injunction or court order restraining consummation of the transactions contemplated hereunder; (ii) be any pending or threatened action or proceeding by or before a court or governmental body brought by or on behalf of any Governmental Entity seeking to restrain or invalidate all or any portion of the transactions contemplated hereunder, or (iii) have been adopted any law or regulation making all or any portion of the transactions contemplated hereunder illegal.

30

     7.2 Conditions to the Company’s Obligations.

     The obligations of the Company to consummate the transactions contemplated hereby on the Closing Date is subject to the satisfaction or waiver on the Closing Date, of each of the following conditions:

          (a) Representations, Warranties and Covenants. Each representation and warranty of the Purchasers contained in this Agreement shall be true and correct in all material respects (unless such representation or warranty is qualified as to materiality, in which case it shall be true and correct in all respects) (i) on the date hereof and (ii) at and as of the Closing Date, as if such representations and warranties were made at and as of the Closing Date. The Purchasers shall have performed in all material respects all agreements and covenants required hereby to be performed by it prior to or at the Closing Date. There shall be delivered to the Company a certificate (signed by each Purchaser or, if an entity, an officer, managing member or general partner of such Purchaser, as appropriate) to the foregoing effect.

          (b) Consents. All consents, approvals, Permits and waivers from Governmental Entities and other parties required to be obtained in connection with the consummation of the transactions contemplated hereby shall have been obtained, unless the failure to obtain any such consent, approval, Permit or waiver would not have a Material Adverse Effect.

          (c) Certificates. Each Purchaser will furnish the Company with such certificates (signed by each Purchaser or, if an entity, an officer, managing member or general partner of such Purchaser, as appropriate) to evidence compliance with the conditions set forth in this ARTICLE VII as may be reasonably requested by the Company.

          (d) Standstill Agreement. The Purchasers shall have executed and delivered to the Company the Standstill Agreement.

     7.3 Conditions to the Purchasers’ Obligations.

     The obligation of the Purchasers to consummate the transactions contemplated hereby on the Closing Date is subject to the satisfaction or waiver on the Closing Date of each of the following conditions:

          (a) Representations, Warranties and Covenants. Each representation and warranty of the Company contained in this Agreement shall be true and correct in all material respects (unless such representation or warranty is qualified as to materiality, in which case it shall be true and correct in all respects) (i) on the date hereof and (ii) at and as of the Closing Date, as if such representations and warranties were made at and as of the Closing Date. The Company shall have performed in all material respects all agreements and covenants required hereby to be performed prior to or at the Closing Date. There shall be delivered to the Purchasers a certificate (signed by the President and Chief Executive Officer of the Company) to the foregoing effect.

31

          (b) Consents. All consents, approvals, Permits and waivers from Governmental Entities and other parties required to be obtained in connection with the consummation of the transactions contemplated hereby shall have been obtained, unless the failure to obtain any such consent, approval, Permit or waiver would not have a Material Adverse Effect.

          (c) Opinions of Counsel. The Company shall have delivered to the Purchasers the opinions of Haynes and Boone, LLP, counsel for the Company, with respect to the matters set forth in Exhibit F.

          (d) Certificates. The Company shall furnish the Purchasers with such certificates of the Chief Executive Officer and the Secretary of the Company and others to evidence compliance with the conditions set forth in this ARTICLE VII as may be reasonably requested by the Purchasers.

          (e) No Adverse Changes. Since the date of this Agreement, there shall not have occurred any Material Adverse Change.

          (f) All Proceedings to be Satisfactory. All corporate and other proceedings to be taken by the Company in connection with the transactions contemplated hereby and all documents incident thereto shall be satisfactory in form and substance to the Purchasers and their counsel, and the Purchasers and their counsel shall have received all such counterpart originals or certified or other copies of such documents as they reasonably may request.

          (g) Supporting Documents. The Purchasers and their counsel shall have received copies of the following documents:

               (i) (A) the Certificate of Good Standing of the Company, certified as of a recent date by the Secretary of State of the State of Delaware, and (B) a certificate of said Secretary dated as of a recent date as to the payment of all excise taxes by the Company and listing all documents of the Company on file with said Secretary;

               (ii) a certificate of the Secretary of the Company dated the Closing Date and certifying: (A) that attached thereto is a true and complete copy of the Bylaws of the Company as in effect on the date of such certification; (B) that attached thereto is a true and complete copy of all resolutions adopted by the Board of Directors or the stockholders of the Company authorizing the execution, delivery and performance of this Agreement, the Registration Rights Agreement, the Standstill Agreement, the Amendment No. 1 to Rights Agreement, the issuance, sale and delivery of the Preferred Shares and the Warrants and the reservation, issuance and delivery of the Conversion Shares and the Warrant Shares, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated by this Agreement; and (C) the incumbency and specimen signature of each officer of the Company executing any of this Agreement, the Registration Rights Agreement, the Standstill Agreement, the Amendment No. 1 to Rights Agreement and the Warrants, and any certificate or instrument furnished pursuant hereto, and a certification by another officer of the Company as to the incumbency and signature of the officer signing the certificate referred to in this clause (ii); and

32

               (iii) such additional supporting documents and other information with respect to the operations and affairs of the Company as the Purchasers or their counsel reasonably may request.

          (h) Certificate of Designations. The Company shall have filed with the Secretary of State of Delaware, and delivered to the Purchasers, the Preferred Stock Certificate of Designations and it shall have become effective.

          (i) Registration Rights Agreement. The Company shall have executed and delivered to the Purchasers the Registration Rights Agreement.

          (j) Amendment No. 1 to Rights Agreement. The Company and American Stock Transfer & Trust Company shall have executed and delivered to the Purchasers the Amendment No. 1 to Rights Agreement.

          (k) Warrants. The Company shall have executed and delivered to the Purchasers the Warrants.

ARTICLE VIII.

INDEMNIFICATION

     8.1 Survival of Representations, Etc.

     The representations, warranties, covenants and agreements of the parties hereto contained herein shall survive the Closing for a period of 30 days after the Company’s delivery to the Purchasers of the audited financial statement for the Company and its Subsidiaries for fiscal year ended December 31, 2006; provided, however, that termination of the survival period of any representation or warranty shall not relieve any party of liability for any breach of any representation or warranty as to which a claim has been asserted prior to such date of termination. Notwithstanding the foregoing, the covenants of the Purchasers set forth in Sections 6.8 and 6.9(b) shall survive with respect to each Purchaser for so long as such Purchaser holds Preferred Shares, the Warrants, Conversion Shares or Warrant Shares.

     8.2 Indemnification by the Company.

     The Company shall indemnify and hold harmless each of the Purchasers and their respective Affiliates, directors, officers, advisors, agents and employees (the “Purchaser Indemnified Parties”) from and against any and all demands, losses, damages, penalties, claims, liabilities, obligations, actions, causes of action, and expenses (including without limitation, costs of investigating, preparing or defending any such claim or action and reasonable legal fees and expenses) (collectively, “Losses”), arising by reason of or resulting from (a) any breach of any warranty, representation, covenant or agreement of the Company contained in this Agreement, or in any certificate, instrument or document contemplated hereby or thereby, or (b) any cause of action, suit or claim brought against or made against such Indemnified Party and arising out of or resulting from the execution, delivery, performance, breach or enforcement of this Agreement,

33

the Warrants, the Registration Rights Agreement, the Standstill Agreement or the Amendment No. 1 to Rights Agreement by the Company.

     8.3 Indemnification by the Purchasers.

     Each Purchaser, severally and not jointly, shall indemnify and hold harmless the Company and its Affiliates, directors, officers, advisors, agents and employees (the “Company Indemnified Parties” and, together with the Purchasers Indemnified Parties, the “Indemnified Parties”) from and against any and all Losses arising by reason of or resulting from any material breach of any warranty, representation, covenant or agreement of such Purchaser contained in this Agreement or in any certificate delivered pursuant thereto.

     8.4 Limitation on Indemnities.

     No claim may be made against an indemnifying party for indemnification pursuant to either Section 8.2 or Section 8.3 until the aggregate dollar amount of all Losses indemnifiable pursuant to such section exceeds $250,000; provided, however, that thereupon the Company shall become obligated to indemnify the Purchaser Indemnified Parties for the full amount of all Losses. The aggregate amount of all Losses for which any indemnifying party and its Affiliates, collectively, shall be required to indemnify the indemnified parties hereunder, in aggregate, pursuant to this ARTICLE VIII shall not exceed $6,000,000.

     8.5 Defense of Claims.

     If a claim for Losses (a “Claim”) is to be made by an Indemnified Party, such Indemnified Party shall give written notice (a “Claim Notice”) to the indemnifying party as soon as practicable after such Indemnified Party becomes aware of any fact, condition or event which may give rise to Losses for which indemnification may be sought under this ARTICLE VIII. If any lawsuit or enforcement action is filed against any Indemnified Party hereunder, notice thereof (a “Third Party Notice”) shall be given to the indemnifying party as promptly as practicable (and in any event within fifteen (15) calendar days after the service of the citation or summons). The failure of any indemnified party to give timely notice hereunder shall not affect rights to indemnification hereunder, except to the extent that the indemnifying party demonstrates actual damage caused by such failure. After receipt of a Third Party Notice, if the indemnifying party shall acknowledge in writing to the indemnified party that the indemnifying party shall be obligated under the terms of its indemnity hereunder in connection with such lawsuit or action, then the indemnifying party shall be entitled, if it so elects, (i) to take control of the defense and investigation of such lawsuit or action, (ii) to employ and engage attorneys of its own choice to handle and defend the same, at the indemnifying party’s cost, risk and expense unless the named parties to such action or proceeding include both the indemnifying party and the indemnified party and the indemnified party has been advised in writing by counsel that there may be one or more legal defenses available to such indemnified party that are different from or additional to those available to the indemnifying party, and (iii) to compromise or settle such claim, which compromise or settlement shall be made only with the written consent of the Indemnified Party. The Indemnified Party shall cooperate in all reasonable respects with the indemnifying party and such attorneys in the investigation, trial and defense of such lawsuit or

34

action and any appeal arising therefrom; and the Indemnified Party may, at its own cost, participate in the investigation, trial and defense of such lawsuit or action and any appeal arising therefrom and appoint its own counsel therefor, at its own cost. The parties shall also cooperate with each other in any notifications to insurers. If the indemnifying party fails to assume the defense of such claim within fifteen (15) calendar days after receipt of the Third Party Notice, the Indemnified Party against which such claim has been asserted will (upon delivering notice to such effect to the indemnifying party) have the right to undertake the defense, compromise or settlement of such claim and the indemnifying party shall have the right to participate therein at its own cost. In the event the Indemnified Party assumes the defense of the claim, the Indemnified Party will keep the indemnifying party reasonably informed of the progress of any such defense, compromise or settlement.

     8.6 Sole and Exclusive Remedy.

     Subject to Section 9.4 and except in the case of fraud, the sole and exclusive remedy for breach of the representations, warranties, covenants and agreements in this Agreement shall be restricted to the indemnification rights set forth in this ARTICLE VIII.

ARTICLE IX.

MISCELLANEOUS

     9.1 Termination.

     Prior to the Closing, this Agreement may be terminated:

          (a) by mutual written consent of the Company and the Purchasers;

          (b) by the Purchasers or the Company if the Closing shall not have occurred on or before December 31, 2005; provided however, that this provision shall not be available to the Purchaser if the Company has the right to terminate this Agreement under Section 9.1(d), and this provision shall not be available to the Company if Purchaser has the right to terminate this Agreement under Section 9.1(c);

          (c) by the Purchasers, if there is a material breach of any representation or warranty set forth in ARTICLE IV hereof or any covenant or agreement to be complied with or performed by the Company pursuant to the terms of this Agreement, and the Company has not cured such breach in all material respects within 10 days following receipt of notice from the Purchasers thereof (or if such breach is not capable of being cured in all material respects within such period, then initiated in good faith a reasonable cure therefor); or

          (d) by the Company, if there is a material breach of any representation or warranty set forth in ARTICLE V hereof or of any covenant or agreement to be complied with or performed by the Purchasers pursuant to the terms of this Agreement, and the breaching Purchasers have not cured such breach in all material respects within 10 days following receipt of notice from the Company thereof (or if such breach is not capable of being cured in all material respects within such period, then initiated in good faith a reasonable cure therefor).

35

     9.2 In the Event of Termination.

     In the event of termination of this Agreement, no party hereto shall have any liability or further obligation to any other party under this Agreement (other than the obligations of the parties pursuant to Section 9.3), provided that no such termination shall relieve any party from liability relating to breach of this Agreement occurring prior to such termination.

     9.3 Expenses.

     Each party shall be responsible for the payment of all expenses incurred by it in connection with the transactions contemplated hereby, regardless of whether such transactions close except that in the case of a termination pursuant to Section 9.1(c) or Section 9.1(d), the breaching party shall reimburse all non-breaching parties for all expenses incurred in connection with this Agreement by such non-breaching party or parties. Notwithstanding the foregoing, the Company shall reimburse the fees of counsel incurred by Lloyd I. Miller, III in connection with the transactions contemplated hereby up to a maximum aggregate amount of $18,000.

     9.4 Injunctive Relief.

     The parties hereto acknowledge and agree that irreparable damage would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of the provisions of this Agreement to enforce specifically the provisions of this Agreement, in any court of the United States or any state thereof having jurisdiction, without the need to post a bond or other security, in addition to any other remedy to which the parties may be entitled under this Agreement or at law or in equity.

     9.5 Assignment.

     Neither this Agreement nor any of the rights or obligations hereunder may be assigned by the Company without the prior written consent of the Purchasers or by any Purchaser, without the consent of the Company. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, and no other Person shall have any right, benefit or obligation hereunder.

     9.6 Notices.

     Unless otherwise provided herein, any notice, request, instruction or other document to be given hereunder by any party to the other shall be in writing and delivered by hand-delivery, registered first-class mail, telex, telecopier, or air courier guaranteeing overnight delivery, as follows:

     If to the Company:

Kitty Hawk, Inc.
1515 West 20^th Street

36

P. O. Box 612787
DFW International Airport, Texas 75261
Telephone: (972) 456-2200
Facsimile: (972) 456-2249
Attn: Steven E. Markhoff, Esq.

     With a copy to:

Haynes and Boone, LLP
901 Main Street
Dallas, Texas 75214
Telephone: (214) 651-5000
Facsimile: (214) 200-0428
Attn: Garrett A. DeVries, Esq.

     If to any Purchaser, to the address set forth opposite such Purchaser’s name on the signature page hereto.

     With a copy to:

Paul, Hastings, Janofsky & Walker LLP
695 Town Center Drive, 17th Floor
Costa Mesa, California 92626
Telephone: (714) 668-6200
Facsimile: (714) 979-1921
Attn: Peter J. Tennyson

or to such other place and with such other copies as either party may designate as to itself by written notice to the other.

     All such notices, requests, instructions or other documents shall be deemed to have been duly given; at the time delivered by hand, if personally delivered; four Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged by addressee, if by telecopier transmission; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery.

     9.7 Choice of Law.

     This Agreement shall be construed, interpreted and the rights of the parties determined in accordance with the internal laws of the State of Texas, without regard to the conflict of law principles thereof, except with respect to matters of law concerning the internal corporate affairs of any corporate entity which is a party to or the subject of this Agreement, and as to those matters the law of the jurisdiction under which the respective entity derives its powers shall govern.

37

     9.8 Entire Agreement; Amendments and Waivers.

     This Agreement, including all schedules attached hereto, the exhibits attached hereto, the Confidentiality Agreement between each Purchaser and the Company, the Registration Rights Agreement, the Standstill Agreement, the Preferred Stock Certificate of Designations and the Warrants, constitute the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties, including the written summary of proposed terms between the Company and the Purchasers. Capitalized terms used in the Schedules but not defined therein shall have the respective meanings ascribed to such terms in this Agreement. Any item disclosed in one Schedule shall be deemed to have been disclosed in all other Schedules.

     9.9 Acknowledgment.

     Each Purchaser hereby acknowledges that B. Riley & Co., Inc. (a) is going to receive a fee in the amount of five percent (5%) of the aggregate purchase price paid by the Purchasers for the Preferred Shares hereunder, such fee to be paid by the Company in cash at the Closing, and (b) is affiliated with SACC Partners LP, one of the Purchasers, and has client relationships with, and has acted as financial advisor to, SAAC Partners LP and certain of the other Purchasers in transactions other than transaction contemplated by this Agreement. Each Purchaser hereby agrees to (a) and (b) above and waives any and all conflict of interest claims such Purchaser may have with respect thereto. The Company acknowledges the affiliate and client relationships of B. Riley & Co., Inc., and hereby waives any claim that B. Riley & Co., Inc. has a conflict of interest or has failed to protect or consider the Company’s interest in connection with the transactions contemplated herein.

     9.10 Counterparts.

     This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

     9.11 Invalidity.

     In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument.

     9.12 Headings.

     The headings of the Articles and Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

* * * * *

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

KITTY HAWK, INC.
By:	/s/ Robert W. Zoller, Jr.
Name: Robert W. Zoller, Jr.
Title:   President and Chief Executive Officer

{Signature Page to the Securites Purchase Agreement}

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Securities Purchase Agreement to be duly executed as of the date and year first above written and to be bound hereby.

LLOYD I. MILLER, III
/s/ Lloyd I. Miller, III
Lloyd I. Miller, III
Address:	4550 Gordon Drive
	Naples, Florida 34102
Telephone:	239-263-8860
Facsimile:	239-262-8025
Attention:	Lloyd I. Miller, III

MILFAM II L.P.,
a Georgia limited partnership
	By:	Milfam LLC, an Ohio limited
		liability company, as general partner
		By:	/s/ Lloyd I. Miller, III
			Lloyd I. Miller, III, Managing Member
Address:		4550 Gordon Drive
		Naples, Florida 34102
Telephone:		239-263-8860
Facsimile:		239-262-8025
Attention:	Lloyd I. Miller, III

{Signature Page to the Securites Purchase Agreement}

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Securities Purchase Agreement to be duly executed as of the date and year first above written and to be bound hereby.

BONANZA MASTER FUND, LTD.
By:	Bonanza Capital, Ltd., a Texas limited
partnership, as its general partner
		By:	Bonanza Fund Management, Inc., a Texas
		corporation, as its general partner
		By:	/s/ Bernay Box
			Bernay Box, President
Address:			300 Crescent Court
			Suite 1740
			Dallas, Texas 75201
Telephone:			214-987-4962
Facsimile:			214-987-4342
Attention:			Bernay Box

{Signature Page to the Securites Purchase Agreement}

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Securities Purchase Agreement to be duly executed as of the date and year first above written and to be bound hereby.

POTOMAC CAPITAL PARTNERS, L.P.,
a Delaware limited partnership
	By:	Potomac Capital Management,
		General Partner
		By:	/s/ Paul J. Solit
			Paul J. Solit, Managing Member
Address:		c/o Potomac Capital Management
		825 Third Avenue
		33rd Floor
		New York, New York 10022
Telephone: 212-521-5115
Facsimile: 212-521-5116
Attention: Paul J. Solit
PLEIADES INVESTMENT PARTNERS-R, LP,
a Delaware limited partnership
	By:	Potomac Capital Management,
		General Partner
		By:	/s/ Paul J. Solit
			Paul J. Solit, Managing Member

{Signature Page to the Securites Purchase Agreement}

Address:	c/o Potomac Capital Management
	825 Third Avenue 33rd Floor New York, New York 10022
Telephone:	212-521-5115
Facsimile:	212-521-5116
Attention:	Paul J. Solit

POTOMAC CAPITAL INTERNATIONAL
LTD., a British Virgin Islands corporation
By:	/s/ Paul J. Solit
	Paul J. Solit, Managing Member
Address:     c/o Potomac Capital Management
		825 Third Avenue
		33rd Floor
		New York, New York 10022
Telephone: 212-521-5115
Facsimile: 212-521-5116
Attention: Paul J. Solit

{Signature Page to the Securites Purchase Agreement}

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Securities Purchase Agreement to be duly executed as of the date and year first above written and to be bound hereby.

SACC PARTNERS, L.P.,
a Delaware limited partnership
	By:	/s/ Bryant Riley
		Bryant Riley, Managing Partner
		By:	Riley Investment Management, Inc.,
			Investment Advisor
			By:	/s/ Bryant Riley
				Bryant Riley, President
Address:		11100 Santa Monica
		Suite 800
		Los Angeles, California 90025
Telephone: 310-966-1444
Facsimile: 310-966-1448
Attention: Bryant Riley

B. RILEY & CO. RETIREMENT TRUST
DATED 1/1/99
By:	/s/ Bryant Riley
	Bryant Riley, Trustee
Address:     11100 Santa Monica
	Suite 800
	Los Angeles, California 90025
Telephone: 310-966-1444
Facsimile: 310-966-1448
Attention: Bryant Riley

{Signature Page to the Securites Purchase Agreement}

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Securities Purchase Agreement to be duly executed as of the date and year first above written and to be bound hereby.

CORKY AND RICK STEINER FAMILY L.P.,
a Delaware limited partnership
	By: Richard Steiner, as general partner
		By:	/s/ Richard Steiner
			Richard Steiner
Address:	4044 Rose Hill Avenue
	Cincinnati, Ohio 45229
Telephone:	513-281-9989
Facsimile:
Attention:	Richard Steiner
RICHARD STEINER
/s/ Richard Steiner
Richard Steiner
Address:	4044 Rose Hill Avenue
	Cincinnati, Ohio 45229
Telephone:	513-281-9989
Facsimile:
Attention:	Richard Steiner

{Signature Page to the Securites Purchase Agreement}

PHILIP H. STEINER
/s/ Philip H. Steiner
Philip H. Steiner
Address:	4044 Rose Hill Avenue
	Cincinnati, Ohio 45229
Telephone:	513-281-9989
Facsimile:
Attention:	Richard Steiner

{Signature Page to the Securites Purchase Agreement}

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Securities Purchase Agreement to be duly executed as of the date and year first above written and to be bound hereby.

BLUEGRASS GROWTH FUND, L.P.
a Delaware limited partnership
	By:	Bluegrass Growth Fund Partners, LLC
		General Partner
		By:	/s/ Brian Shatz
			Brian Shatz, Managing Member
Address:		122 East 42nd Street
		Suite 2606
		New York, NY 10168
Telephone:		212-682-2392
Facsimile:
Attention:		Brian Shatz

{Signature Page to the Securites Purchase Agreement}

Exhibit A

FORM OF
AMENDMENT NO. 1 TO RIGHTS AGREEMENT

Exhibit B

FORM OF

CERTIFICATE OF DESIGNATIONS,
OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
KITTY HAWK, INC.

Exhibit C

FORM OF
REGISTRATION RIGHTS AGREEMENT

Exhibit D

FORM OF
STANDSTILL AGREEMENT

Exhibit E

FORM OF
WARRANT

Exhibit F

FORM OF
LEGAL OPINION

EX-4.4

Exhibit 4.4

STANDSTILL AGREEMENT

     This STANDSTILL AGREEMENT, dated as of November 14, 2005 (this “Agreement”), by and among Kitty Hawk, Inc., a Delaware corporation (the “Company”) and the individuals and entities listed as Purchasers on the signature page of this Agreement (each an “Purchaser” and collectively, the “Purchasers”).

RECITALS

     WHEREAS, the Purchasers and the Company have entered into a Securities Purchase Agreement, dated as of the date hereof (the “Purchase Agreement”);

     WHEREAS, as a condition to the consummation of the Purchase Agreement, the Company desires that each Purchaser make certain representations, warranties, covenants and agreements as set forth in this Agreement;

AGREEMENT

     NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein and in the Purchase Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I.
REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER

     To induce the Company to enter into this Agreement, the Purchase Agreement and the other documents contemplated hereby and thereby, and to consummate the transactions contemplated hereby and thereby, each Purchaser represents and warrants to the Company, separately and not jointly, as follows:

     1.1 Binding Agreement.

     The execution, delivery and performance of this Agreement by such Purchaser and the consummation by such Purchaser of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate or partnership action on the part of such Purchaser. This Agreement has been duly executed and delivered by such Purchaser, and, assuming the valid authorization, execution and delivery hereof by the Company, is a valid and binding obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting or relating to the enforcement of creditors’ rights generally and by general principles of equity (whether applied in a proceeding at law or in equity).

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     1.2 Execution; No Violations.

     The execution and delivery of this Agreement by such Purchaser does not, and the consummation by such Purchaser of the transactions contemplated hereby will not: (a) violate or conflict with the organizational documents of such Purchaser or any agreement, order, injunction, decree, or judgment to which such Purchaser is a party or by which such Purchaser or any of its respective properties is bound; or (b) violate any law, rule or regulation applicable to such Purchaser.

     1.3 Governmental and Other Consents.

     No consent, approval or authorization of, or designation, registration, declaration or filing with, any governmental entity or third Person is required on the part of such Purchaser in connection with the execution or delivery of this Agreement or the consummation by it of the transactions contemplated hereby, except such filings as may be necessary to disclose the acquisition of additional securities of the Company by Purchasers that are required to report their ownership and changes in such ownership under applicable securities laws, or to disclose the existence of this Agreement.

     1.4 Share Ownership.

     Each Purchaser acknowledges that such Purchaser understands the terms and conditions of that certain Rights Agreement, by and between the Company and American Stock Transfer & Trust, dated January 21, 2004, and that certain Amendment No. 1 to Rights Agreement to be effective contemporaneously with the transactions contemplated by the Purchase Agreement (the Rights Agreement, as amended by such Amendment No. 1 to Rights Agreement, the “Rights Agreement”). Schedule 1.4 lists, in each case without giving effect to the transactions contemplated by the Purchase Agreement, (i) the name of each Purchaser, (ii) the number shares of Common Stock (as defined in the Rights Agreement) which such Purchaser, directly or indirectly, owns or has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise, (iii) the name of each Affiliate (as defined in the Rights Agreement) and each Associate (as defined in the Rights Agreement) of such Purchaser, and (iv) the number of shares of Common Stock each such Affiliate and Associate, directly or indirectly, owns or has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise. Except as set forth on Schedule 1.4, such Purchaser and its Affiliates and Associates does not own any voting securities of Company, or any securities convertible into or exchangeable or exercisable for any voting securities of the Company, or which, upon redemption thereof, could result in such Purchaser or any of its Affiliates receiving any voting securities, or options, warrants, contractual rights or other rights of any kind to acquire or vote any voting securities of the Company (collectively, the “Voting Securities”), except those voting securities acquired pursuant to the Purchase Agreement, or issuable upon exchange, conversion or exercise (as

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applicable) of the securities of the Company acquired pursuant to the Purchase Agreement (the “Company Securities”).

ARTICLE II.
STANDSTILL ARRANGEMENTS

     2.1 Prohibited Actions.

     Each Purchaser hereby agrees that prior to the Termination Date, neither such Purchaser nor any of its Affiliates will, directly or indirectly, solicit, request, advise, assist or encourage others to, take any of the following actions:

          (a) form, join in or in any other way participate in a “partnership, limited partnership, syndicate or other group” within the meaning of Section 13(d)(3) of the Exchange Act with respect to Voting Securities or deposit any Voting Securities in a voting trust or similar arrangement or subject any Voting Securities to any voting agreement or pooling arrangement with respect to the Company Securities, other than (i) with one or more Affiliates of such Purchaser, or (ii) with respect to matters presented to the Board of Directors in accordance with Section 2.1(b);

          (b) seek to call, or request the call of, a special meeting of the stockholders of the Company or seek to make, or make, a stockholder proposal at any meeting of the stockholders of the Company that has not first been presented to the Board of Directors at least 60 days, but not more than 120 days, prior to such meeting;

          (c) commence, or announce any intention to commence, any tender offer for any Voting Securities, except following an announcement by any unaffiliated third party of an intention to make, or the commencement of, such a tender offer;

          (d) except as approved in advance by the Board of Directors, make, announce any intention or desire to make, or facilitate the making public or public disclosure of, any proposal or bid with respect to (i) the acquisition of any substantial portion of the assets of the Company or of the assets or stock of any of its subsidiaries or of all or any portion of the outstanding Voting Securities, or (ii) any merger, consolidation, other business combination, restructuring, recapitalization, liquidation or other extraordinary transaction involving the Company or any of its subsidiaries, provided, however, that if a Purchaser supports, agrees to vote in favor of or to tender securities into, or announces support for a bona fide third party proposal not solicited or arranged by such Purchaser after the proposal has been publicly announced, such actions shall not constitute “facilitating” such proposal for purposes of this Section 2.1(d);

          (e) amend or repeal, or seek to amend or repeal, any anti-takeover provisions adopted by the Company, including the Rights Agreement, dated January 21, 2004, between the Company and American Stock Transfer & Trust Company (as amended in accordance with its terms), provided that voting in favor of such a repeal, if proposed by persons not affiliated with

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any of the Purchasers, shall not violate this Section 2.1(e), and all Purchasers shall be free to vote any Voting Securities held by them as they see fit with respect to any such proposal;

          (f) arrange, or in any way participate in, any financing for any transaction referred to in Section 2.1(a) through 2.1(e); or

          (g) make any request to the Board of Directors for, or otherwise seek (in any fashion that would require public disclosure by the Company, such Purchaser or their respective Affiliates) to obtain from the Company, any waiver or amendment of any provision of this Agreement prior to November 14, 2006.

     2.2 Prohibitions on Voting Incremental Shares.

     Except as approved in advance by the Board of Directors, each Purchaser hereby agrees that prior to the Termination Date, neither such Purchaser nor any of its Affiliates will, directly or indirectly, vote any Incremental Shares in connection with, or otherwise permit any Incremental Shares to participate in, any “solicitation” of any “proxy” to vote any Voting Shares (other than conducted by the Company), or in any election contest with respect to the Company (as such terms are defined or used in Rules 14a-1 and 14a-11 under the Exchange Act). As used herein, “Incremental Shares” means the Voting Securities beneficially owned (as such term is defined in Rule 13d-3 under the Exchange Act) by such Purchaser or any of its Affiliates, in aggregate, in excess of 14.99% of the outstanding Voting Securities.

ARTICLE III.
TERMINATION

     3.1 Notification of the Company.

     Each Purchaser hereby covenants and agrees that such Purchaser will promptly notify the Company when and if such Purchaser receives or learns of (i) any oral or written request to such Purchaser or any of its Affiliates to participate in any of the transactions or actions referred to in Sections 2.1(a) through 2.1(g), or (ii) any oral or written communication from or by any Person (other than the Company) with respect to any of the transactions or actions referred to in Sections 2.1(a) through 2.1(g) if such Person could reasonably be deemed to be capable of effecting, participating in or materially assisting in such an action or transaction (through one or more Affiliates or otherwise) and such oral or written communication was of a nature that could reasonably be deemed to indicate a serious interest in effecting, participating in or materially assisting in such an action or transaction.

     3.2 Termination.

     This Agreement shall terminate with respect to a particular Purchaser on the date that such Purchaser and its Affiliates no longer beneficially own (as such term is defined in Rule 13d-3 under the Exchange Act) Voting Securities representing at least 5% of the outstanding Voting Securities of the Company (the “Termination Date”).

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     3.3 Injunctive Relief.

     The parties hereto acknowledge and agree that irreparable damage would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of the provisions of this Agreement to enforce specifically the provisions of this Agreement, in any court of the United States or any state thereof having jurisdiction, without the need to post a bond or other security, in addition to any other remedy to which the parties may be entitled under this Agreement or at law or in equity.

ARTICLE IV.
MISCELLANEOUS

     4.1 Definitions.

     Capitalized terms used herein but not otherwise defined herein shall have the meaning ascribed thereto in the Purchase Agreement.

     4.2 Assignment.

     Neither this Agreement nor any of the rights or obligations hereunder may be assigned by the Company without the prior written consent of the Purchasers or by any Purchaser, without the consent of the Company, except in the case of transfers by a Purchaser to its affiliates. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, and no other Person shall have any right, benefit or obligation hereunder.

     4.3 Notices.

     Unless otherwise provided herein, any notice, request, instruction or other document to be given hereunder by any party to the other shall be in writing and delivered by hand-delivery, registered first-class mail, telex, telecopier, or air courier guaranteeing overnight delivery, as follows:

     If to the Company:

Kitty Hawk, Inc.
1515 West 20th Street
P. O. Box 612787
DFW International Airport, Texas 75261
Telephone: (972) 456-2200
Facsimile: (972) 456-2249
Attn: Steven E. Markhoff, Esq.

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     With a copy to:

Haynes and Boone, LLP
901 Main Street
Dallas, Texas 75214
Telephone: (214) 651-5000
Facsimile: (214) 200-0428
Attn: Garrett A. DeVries

     If to any Purchaser, to the address for such Purchaser on the signature page of the Purchase Agreement.

     With a copy to:

Paul, Hastings, Janofsky & Walker LLP
695 Town Center Drive, 17th Floor
Costa Mesa, California 92626
Telephone: (714) 668-6200
Facsimile: (714) 979-1921
Attn: Peter J. Tennyson

or to such other place and with such other copies as either party may designate as to itself by written notice to the other.

     All such notices, requests, instructions or other documents shall be deemed to have been duly given; at the time delivered by hand, if personally delivered; four Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged by addressee, if by telecopier transmission; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery.

     4.4 Choice of Law.

     This Agreement shall be construed, interpreted and the rights of the parties determined in accordance with the internal laws of the State of Texas, without regard to the conflict of law principles thereof, except with respect to matters of law concerning the internal corporate affairs of any corporate entity which is a party to or the subject of this Agreement, and as to those matters the law of the jurisdiction under which the respective entity derives its powers shall govern.

     4.5 Entire Agreement; Amendments and Waivers.

     This Agreement, the Confidentiality Agreement between each Purchaser and the Company, the Purchase Agreement, the Registration Rights Agreement, the Preferred Stock Certificate of Designations and the Warrants, constitute the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties, including the written

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summary of proposed terms between the Company and the Purchasers.

     4.6 Counterparts.

     This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

     4.7 Invalidity.

     In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument.

     4.8 Headings.

     The headings of the Articles and Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

* * * * *

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written hereinabove.

KITTY HAWK, INC.
By:	/s/ Robert W. Zoller, Jr.
Name: Robert W. Zoller, Jr.
Title:   President and Chief Executive Officer

[Signature Page to the Standstill Agreement]

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Standstill Agreement to be duly executed as of the date and year first above written and to be bound hereby.

LLOYD I. MILLER, III
/s/ Lloyd I. Miller, III
Lloyd I. Miller, III
MILFAM II L.P.,
a Georgia limited partnership
	By:	Milfam LLC, an Ohio limited
		liability company, as general partner
		By:	/s/ Lloyd I. Miller, III
			Lloyd I. Miller, III, Managing Member

[Signature Page to the Standstill Agreement]

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Standstill Agreement to be duly executed as of the date and year first above written and to be bound hereby.

BONANZA MASTER FUND, LTD.
	By:	Bonanza Capital, Ltd., a Texas limited
	partnership, as its general partner
		By:	Bonanza Fund Management, Inc., a Texas
		corporation, as its general partner
			By:	/s/ Bernay Box
				Bernay Box, President

[Signature Page to the Standstill Agreement]

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Standstill Agreement to be duly executed as of the date and year first above written and to be bound hereby.

POTOMAC CAPITAL PARTNERS, L.P.,
a Delaware limited partnership
	By:	Potomac Capital Management,
		General Partner
		By:	/s/ Paul J. Solit
			Paul J. Solit, Managing Member
PLEIADES INVESTMENT PARTNERS-R, LP,
a Delaware limited partnership
	By:	Potomac Capital Management,
		General Partner
		By:	/s/ Paul J. Solit
			Paul J. Solit, Managing Member
POTOMAC CAPITAL INTERNATIONAL
LTD., a British Virgin Islands corporation
By:	/s/ Paul J. Solit
	Paul J. Solit, Managing Member

[Signature Page to the Standstill Agreement]

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Standstill Agreement to be duly executed as of the date and year first above written and to be bound hereby.

SACC PARTNERS, L.P.,
a Delaware limited partnership
	By:	/s/ Bryant Riley
		Bryant Riley, Managing Partner
		By:	Riley Investment Management, Inc.,
			Investment Advisor
			By:	/s/ Bryant Riley
				Bryant Riley, President
B. RILEY & CO. RETIREMENT TRUST
DATED 1/1/99
By:	/s/ Bryant Riley
	Bryant Riley, Trustee

[Signature Page to the Standstill Agreement]

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Standstill Agreement to be duly executed as of the date and year first above written and to be bound hereby.

CORKY AND RICK STEINER FAMILY L.P.,
a Delaware limited partnership
	By:	Richard Steiner, as general partner
		By:	/s/ Richard Steiner
			Richard Steiner
RICHARD STEINER
/s/ Richard Steiner
Richard Steiner
PHILIP H. STEINER
/s/ Philip H. Steiner
Philip H. Steiner

[Signature Page to the Standstill Agreement]

     IN WITNESS WHEREOF, the undersigned Purchasers have caused this Standstill Agreement to be duly executed as of the date and year first above written and to be bound hereby.

BLUEGRASS GROWTH FUND, L.P.
a Delaware limited partnership
	By:	Bluegrass Growth Fund Partners, LLC
		General Partner
		By:	/s/ Brian Shatz
			Brian Shatz, Managing Member

[Signature Page to the Standstill Agreement]

EX-4.5

Exhibit 4.5

NO TRANSFER OF THE WARRANT REPRESENTED BY THIS CERTIFICATE SHALL BE VALID OR EFFECTIVE UNLESS SUCH TRANSFER IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL (AS DEFINED HEREIN) OR OTHER MEANS SATISFACTORY TO THE COMPANY, THAT SUCH PROPOSED TRANSFER IS IN COMPLIANCE WITH THE ACT AND STATE SECURITIES LAWS.

Warrant Number: WB-_______

Issue Date: November 14, 2005

KITTY HAWK, INC.

COMMON STOCK PURCHASE WARRANT

Void after November 14, 2010

     This Warrant (the “Warrant”) entitles [                                          ] (including any successors or assigns, the “Holder”), for value received, to purchase from KITTY HAWK, INC., a Delaware corporation, at any time and from time to time, subject to the terms and conditions set forth herein, during the period starting from 8:00 a.m. on the date first indicated above (as defined in Section 1) to 5:00 p.m., Central Time, on the Expiration Date (as defined in Section 1), at which time this Warrant shall expire and become void, all or any portion of the Warrant Shares at the Exercise Price (as defined in Section 1). This Warrant also is subject to the following terms and conditions:

     1. Definitions.

     As used in this Warrant, the following terms shall have the respective meanings set forth below or elsewhere in this Warrant as referred to below:

     “Affiliate” shall mean any entity controlling, controlled by or under common control with the Company. For the purposes of this definition, “control” shall have the meaning presently specified for that word in Rule 405 promulgated by the Securities and Exchange Commission under the Securities Act.

     “Business Day” means a day other than a Saturday or Sunday or any federal or New York holiday.

     “Common Stock” means the common stock, $0.000001 par value per share, of the Company.

     “Company” means Kitty Hawk, Inc., a Delaware corporation.

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     “Exercise Price” means, $0.82 per share of Common Stock, as applicable and as adjusted from time to time pursuant to the terms of this Warrant.

     “Expiration Date” means November 14, 2010.

     “Fair Market Value” shall mean, with respect to any exercise of all or any portion of the Warrant, (i) if the Common Stock is traded on a national securities exchange, then the last reported sale price per share of Common Stock on such exchange on the date immediately preceding the date of such exercise or, if no such sale price is reported on such date, such price on the next preceding Business Day in which a price was reported, (ii) if the Common Stock is actively traded over-the-counter, then the average of the closing bid and asked prices over the five (5) trading days ended on the trading day immediately preceding the date of such exercise or (iii) if such Common Stock is not traded, quoted or listed on any national securities exchange or the over-the-counter market, then the fair market value of a share of Common Stock, as determined in good faith by the Board of Directors of the Company.

     “Holder” has the meaning set forth in the preamble of this Warrant.

     “Opinion of Counsel” shall mean a written opinion of counsel experienced in Securities Act matters chosen by the Holder (and which may be in-house counsel to such Holder) of this Warrant or Warrant Shares issued upon the exercise hereof; provided, however, that such opinion and opinion giver are reasonably acceptable to the Company.

     “Person” (whether or not capitalized) means an individual, entity, partnership, limited liability company, corporation, association, trust, joint venture, unincorporated organization, and any government, governmental department or agency or political subdivision thereof.

     “Registration Rights Agreement” means that certain Registration Rights Agreement dated as of the date hereof, by and between the Company and the other parties thereto.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Securities Purchase Agreement” means that certain Securities Purchase Agreement dated as of the date hereof, by and between the Company and the other parties thereto.

     “Standstill Agreement” means that certain Standstill Agreement dated as of the date hereof, by and between the Company and the other parties thereto.

     “Warrant Shares” means an aggregate of [                      ] shares of Common Stock, after giving effect to all adjustments thereto provided for herein, including, without limitation, those set forth in Section 4 hereof.

     2. Exercise of Warrant.

          2.1 Method of Exercise. Subject to all of the terms and conditions hereof, this Warrant may be exercised in whole or in part (but in increments of no less than 1,000

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Warrant Shares, subject to adjustment proportionate to adjustments to Warrant Shares in accordance with this Warrant), with respect to then Warrant Shares, at any time and from time to time during the period commencing on the first indicated above and ending on the Expiration Date. Exercise shall be by presentation and surrender to the Company at its principal office, or to the transfer agent of the Company, of this Warrant and the notice and subscription form annexed hereto, executed by the Holder, which shall indicate the number of shares for which the Holder intends to exercise this Warrant, together with payment to the Company in accordance with Section 3 hereof in an amount equal to the product of the Exercise Price multiplied by the number of Warrant Shares being purchased upon such exercise. Upon and as of receipt by the Company (or the transfer agent) of such properly completed and duly executed purchase form accompanied by payment as herein provided, the Holder shall be deemed to be the Holder of record of the Warrant Shares issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Warrant Shares shall not then actually be, or have been, delivered to the Holder.

          2.2 Delivery of Stock Certificates on Exercise. Within five (5) Business Days after the exercise of this Warrant (or such longer period required to comply with applicable securities laws and exchange rules), the Company, at its expense and in accordance with applicable securities laws, will cause to be issued in the name of and delivered to the Holder, or as the Holder may direct (subject in all cases, to the provisions of Section 6 hereof), a certificate or certificates for the number of Warrant Shares purchased by the Holder on such exercise, plus, in lieu of any fractional share to which the Holder would otherwise be entitled, cash equal to such fraction multiplied by the Fair Market Value.

          2.3 Shares To Be Fully Paid and Nonassessable. All Warrant Shares issued upon the exercise of this Warrant shall be validly issued, fully paid and nonassessable, free of all liens, taxes, charges and other encumbrances or restrictions on sale (other than those set forth herein).

          2.4 Fractional Shares. No fractional shares of Common Stock or scrip representing fractional shares of Common Stock shall be issued upon the exercise of this Warrant. With respect to any fraction of a share of Common Stock called for upon any exercise hereof, the Company shall make a cash payment to the Holder as set forth in Section 2.2 hereof.

          2.5 Issuance of New Warrants; Company Acknowledgment. Upon any partial exercise of this Warrant, the Company, at its expense, will forthwith and, in any event within five (5) Business Days (or such longer period required to comply with applicable securities laws and exchange rules), issue and deliver to the Holder a new warrant or warrants of like tenor, registered in the name of the Holder, exercisable, in the aggregate, for the balance of the Warrant Shares.

          2.6 Payment of Fees and Taxes. The Company shall pay any recording, filing, stamp or similar tax which may be payable in respect of any transfer involved in the issuance of, and the preparation and delivery of certificates (if applicable) representing, (i) any Warrant Shares purchased upon exercise of this Warrant or (ii) new or replacement warrants in the Holder’s name or the name of any transferee of all or any portion of this Warrant.

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     3. Payment of Exercise Price.

     The Exercise Price for the Warrant Shares being purchased shall be paid in cash, by certified check or by wire transfer to an account designated in writing by the Company.

     4. Adjustment of Exercise Price.

     The Exercise Price shall be subject to adjustment from time to time upon the happening of certain events as follows:

          4.1 Subdivision or Combination of Stock. If at any time or from time to time after the date hereof, the Company shall subdivide (by way of stock dividend, stock split or otherwise) its outstanding shares of Common Stock, the Exercise Price in effect immediately prior to such subdivision shall be reduced proportionately and the number of Warrant Shares (calculated to the nearest whole share) shall be increased proportionately, and conversely, in the event the outstanding shares of Common Stock shall be combined (whether by stock combination, reverse stock split or otherwise) into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be increased proportionately and the number of Warrant Shares (calculated to the nearest whole share) shall be decreased proportionately. The Exercise Price and the number of Warrant Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 4.1.

          4.2 Adjustment for Stock Dividends. If at any time after the date hereof, the Company shall declare a dividend or make any other distribution upon any class or series of stock of the Company payable in shares of Common Stock or securities convertible into shares of Common Stock, the Exercise Price and the number of Warrant Shares to be obtained upon exercise of this Warrant shall be adjusted proportionately to reflect the issuance of any shares of Common Stock or convertible securities, as the case may be, issuable in payment of such dividend or distribution. The Exercise Price and the number of Warrant Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 4.2.

          4.3 Adjustments for Reclassifications. If the Common Stock issuable upon the conversion of this Warrant shall be changed into the same or a different number of shares of any class(es) or series of stock, whether by reclassification or otherwise (other than an adjustment under Section 4.1 and Section 4.2 or a merger, consolidation, or sale of assets provided for under Section 4.4), then and in each such event, the Holder hereof shall have the right thereafter to convert each Warrant Share into the kind and amount of shares of stock and other securities and property receivable upon such reclassification, or other change by holders of the number of shares of Common Stock into which such Warrant Shares would have been convertible immediately prior to such reclassification or change, all subject to successive adjustments thereafter from time to time pursuant to and in accordance with, the provisions of this Section 4.

          4.4 Adjustments for Merger or Consolidation. In the event that, at any time or from time to time after the date hereof, the Company shall (i) effect a reorganization,

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(ii) consolidate with or merge into any other Person, or (iii) sell or transfer all or substantially all of its properties or assets or more than 50% of the voting capital stock of the Company (whether issued and outstanding, newly issued, from treasury, or any combination thereof) to any other person under any plan or arrangement contemplating the consolidation or merger, sale or transfer, or dissolution of the Company, then, in each such case, the Holder, upon the exercise of this Warrant as provided in Section 2.1 hereof at any time or from time to time after the consummation of such reorganization, consolidation, merger or sale or the effective date of such dissolution, as the case may be, shall receive, in lieu of the Warrant Shares issuable on such exercise immediately prior to such consummation or such effective date, as the case may be, the stock and property (including cash) to which the Holder would have been entitled upon the consummation of such consolidation or merger, or sale or transfer, or in connection with such dissolution, as the case may be, as if the Holder had so exercised this Warrant immediately prior thereto (assuming the payment by the Holder of the Exercise Price therefor as required hereby in a form permitted hereby, which payment shall be included in the assets of the Company for the purposes of determining the amount available for distribution), all subject to successive adjustments thereafter from time to time pursuant to, and in accordance with, the provisions of this Section 4. The Company shall not effect any such consolidation, merger or sale unless prior to the consummation thereof the successor entity (if other than the Company) resulting from such consolidation or merger or the entity purchasing such assets assumes by written instrument (in form and substance reasonably satisfactory to the Holder) the obligation to deliver the stock or property (including cash) as, in accordance with the foregoing provisions, the Holder may be entitled to acquire.

          4.5 Continuation of Terms. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any such transfer) referred to in this Section 4, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of Common Stock and other securities and property receivable upon the exercise of this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any such Common Stock or other securities, including, in the case of any such transfer, the Person acquiring all or substantially all of the properties or assets or more than 50% of the voting capital stock of the Company (whether issued and outstanding, newly issued or from treasury or any combination thereof), whether or not such Person shall have expressly assumed the terms of this Warrant.

          4.6 Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Exercise Price and number of Warrant Shares pursuant to this Section 4, this Warrant shall, without any action on the part of the Holder, be adjusted in accordance with this Section 4, and the Company, at its expense, promptly shall compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to the Holder a certificate setting forth such adjustment or readjustment, showing in detail the facts upon which such adjustment or readjustment is based. The Company will forthwith send a copy of each such certificate to the Holder in accordance with Section 8.4.

          4.7 When Adjustments To Be Made. The adjustments required by this Section 4 shall be made whenever and as often as any specified event requiring such an adjustment shall occur. For the purpose of any such adjustment, except as otherwise provided

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herein, any specified event shall be deemed to have occurred at the close of business on the date of its occurrence. In computing the adjustments under this Section 4, fractional interests in Common Stock shall be taken into account to the nearest 1/100th of a share.

          4.8 When Adjustment Not Required. If the Company takes a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or distribution to which the provisions of Section 4 would apply, but thereafter and before the distribution to stockholders thereof, legally abandons its plan to pay or deliver such dividend or distribution, then thereafter no adjustment shall be required by reason of the taking of such record and any such adjustment previously made in respect thereof shall be rescinded and annulled.

     5. Notices of Record Date.

     Upon (i) any establishment by the Company of a record date of the holders of Common Stock for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or right or option to acquire securities of the Company, or any other right, or (ii) any capital reorganization, reclassification, recapitalization, merger or consolidation of the Company with or into any other corporation, any transfer of all or substantially all the assets of the Company, or any voluntary or involuntary dissolution, liquidation or winding up of the Company, or the sale, in a single transaction, of a majority of the Company’s voting stock (whether newly issued, or from treasury, or previously issued and then outstanding, or any combination thereof), the Company shall mail to the Holder at least ten (10) Business Days, or such longer period as may be required by law, prior to the record date specified therein, a notice specifying (x) the date established as the record date for the purpose of such dividend, distribution, option or right and a description of such dividend, distribution, option or right, (y) the date on which any such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding up, or sale is expected to become effective and (z) the date, if any, fixed as to when the holders of record of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding up.

     6. Transfer Provisions, etc.

          6.1 Restrictions on Transfer. Holder shall not transfer this Warrant or any Warrant Shares other than pursuant to (i) an effective registration statement under the Securities Act or (ii) an exemption from the registration provisions thereof. If requested by the Company, the Holder will deliver an Opinion of Counsel, acceptable to the Company in its reasonable discretion, to the effect that a proposed transfer pursuant to clause (ii) of the preceding sentence (other than a transfer described in Section 6.4) is exempt from the registration requirements of the Securities Act.

          6.2 Restrictive Legends.

          (a) Except as otherwise provided in this Section 6, each certificate for Warrant Shares issued upon the exercise of this Warrant shall be stamped or otherwise imprinted with a legend in substantially the following form:

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“NO TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE SHALL BE VALID OR EFFECTIVE UNLESS SUCH TRANSFER IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL (AS DEFINED IN THAT CERTAIN COMMON STOCK PURCHASE WARRANT OF KITTY HAWK, INC., DATED NOVEMBER 14, 2005) OR OTHER MEANS SATISFACTORY TO THE COMPANY, THAT SUCH PROPOSED TRANSFER IS IN COMPLIANCE WITH THE ACT AND STATE SECURITIES LAWS.”

          (b) Except as otherwise provided in this Section 6, each Warrant issued shall be stamped or otherwise imprinted with a legend in substantially the following form:

“NO TRANSFER OF THE WARRANT REPRESENTED BY THIS CERTIFICATE SHALL BE VALID OR EFFECTIVE UNLESS SUCH TRANSFER IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL (AS DEFINED HEREIN) OR OTHER MEANS SATISFACTORY TO THE COMPANY, THAT SUCH PROPOSED TRANSFER IS IN COMPLIANCE WITH THE ACT AND STATE SECURITIES LAWS.”

          6.3 Termination of Securities Law Restrictions. Notwithstanding the foregoing provisions of this Section 6, the restrictions imposed by Section 6.1 upon the transferability of the Warrants and the Warrant Shares and the legend requirements of Section 6.2 shall terminate as to any particular Warrant or Warrant Shares if (i) the Company shall have received from the Holder thereof an Opinion of Counsel to the effect that such legend is not required in order to ensure compliance with the Securities Act or (ii) such Warrant or Warrant Shares shall be registered by the Company. Whenever the restrictions imposed by Section 6.2 shall terminate as to this Warrant, as hereinabove provided, the Holder hereof shall be entitled to receive from the Company, at the expense of the Company, a new Warrant bearing the following legend in place of the restrictive legend set forth hereon:

“THE RESTRICTIONS ON TRANSFERABILITY OF THE WITHIN WARRANT CONTAINED IN SECTION 6 HEREOF TERMINATED ON                                         ,                      AND ARE OF NO FURTHER FORCE AND EFFECT.”

All Warrants issued upon registration of transfer, division or combination of, or in substitution for, any Warrant or Warrants entitled to bear such legend shall have a similar legend endorsed thereon. Wherever the restrictions imposed by this Section 6 shall terminate as to any Warrant Shares, as hereinabove provided, the Holder thereof shall be entitled to receive from the Company, at the Company’s expense, a new certificate representing such Common Stock not bearing the restrictive legends.

          6.4 Transfers to Affiliates. Notwithstanding anything contained herein to the contrary, a Holder shall have the right at any time, without restriction of any kind, to transfer all

7

or any portion of the Warrants and the Warrant Shares to any Affiliate of the Holder; provided, however, that any such Affiliate agrees to be bound by the provisions of this Section 6.

          6.5 Mechanics of Transfer.

               (a) Any transfer of all or any portion of this Warrant (and the Warrant Shares), or of any interest herein or therein, that is otherwise in compliance with this Warrant and with applicable law shall be effected by surrendering this Warrant to the Company at its principal office, together with a duly executed form of assignment, in the form attached hereto. In the event of any such transfer of this Warrant, the Company shall issue a new warrant or warrants of like tenor to the transferee(s), representing, in the aggregate, the right to purchase the same number of Warrant Shares and cash, securities or other property, if any, which may be purchased by the Holder upon exercise of this Warrant at the time of its surrender.

               (b) In the event of any transfer of all or any portion of this Warrant in accordance with this Section 6, the Company shall issue (i) a new warrant of like tenor to the transferee, representing the right to purchase the number of Warrant Shares, and cash, securities or other property, if any, which were purchasable by the Holder of the transferred portion of this Warrant, and (ii) a new warrant of like tenor to the Holder, representing the right to purchase the number of Warrant Shares, and cash, securities or other property, if any, purchasable by the Holder of the un-transferred portion of this Warrant. Until this Warrant or any portion thereof is transferred on the books of the Company, the Company may treat the Holder as the absolute holder of this Warrant and all right, title and interest therein for all purposes, notwithstanding any notice to the contrary.

          6.6 Warrant Register. The Company shall keep at its principal office a register for the registration, and registration of transfers, of the Warrants. The name and address of each Holder of one or more of the Warrants, each transfer thereof and the name and address of each transferee of one or more of the Warrants shall be registered in such register. The Company shall give to any Holder of a Warrant promptly upon request therefor, a complete and correct copy of the names and addresses of all registered Holders of the Warrants.

     7. Lost, Stolen or Destroyed Warrant.

     Upon receipt by the Company of evidence satisfactory to it of loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of a customary affidavit of the Holder and indemnity agreement, or, in the case of mutilation, upon surrender of this Warrant, the Company at its expense will execute and deliver, or will instruct its transfer agent to execute and deliver, a new Warrant of like tenor and date, and any such lost, stolen or destroyed Warrant thereupon shall become void. Upon issuance of any new Warrant under this Section 7, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses in connection therewith.

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     8. General.

          8.1 Authorized Shares, Reservation of Shares for Issuance. At all times while this Warrant is outstanding, the Company shall maintain its corporate authority to issue, and shall have authorized and reserved for issuance upon exercise of this Warrant, such number of shares of Common Stock, any other capital stock or other securities as shall be sufficient to perform its obligations under this Warrant (after giving effect to any and all adjustments to the number and kind of Warrant Shares purchasable upon exercise of this Warrant).

          8.2 No Impairment. The Company will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities, sale or other transfer of any of its assets or properties, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder hereunder against impairment.

          8.3 No Rights as Stockholder. The Holder shall not be entitled to vote or to receive dividends or to be deemed the holder of Common Stock that may at any time be issuable upon exercise of this Warrant for any purpose whatsoever. Nothing in this Warrant shall be construed to confer upon the Holder any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance or reclassification of stock, change of par value or change of stock to no par value, consolidation, merger or conveyance or otherwise), or to receive notice of meetings (except to the extent otherwise provided in this Warrant), or to receive dividends or subscription rights.

          8.4 Notices. Unless otherwise provided herein, any notice, request, instruction or other document to be given hereunder by any party to the other shall be in writing and delivered by hand-delivery, registered first-class mail, telex, telecopier, or air courier guaranteeing overnight delivery, as follows:

          If to the Company:

Kitty Hawk, Inc.
1515 West 20th Street
P. O. Box 612787
DFW International Airport, Texas 75261
Telephone: (972) 456-2200
Facsimile: (972) 456-2249
Attn: Steven E. Markhoff, Esq.

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          With a copy to:

Haynes and Boone, LLP
901 Main Street
Dallas, Texas 75214
Telephone: (214) 651-5000
Facsimile: (214) 200-0428
Attn: Garrett A. DeVries

          If to Holder:

Telephone:

Facsimile:

Attn:

          With a copy to:

Paul, Hastings, Janofsky & Walker LLP
695 Town Center Drive, 17th Floor
Costa Mesa, California 92626
Telephone: (714) 668-6200
Facsimile: (714) 979-1921
Attn: Peter J. Tennyson

or to such other place and with such other copies as either party may designate as to itself by written notice to the other.

     All such notices, requests, instructions or other documents shall be deemed to have been duly given; at the time delivered by hand, if personally delivered; four Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged by addressee, if by telecopier transmission; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery.

     9. Choice of Law.

     This Warrant shall be construed, interpreted and the rights of the parties determined in accordance with the internal laws of the State of Texas, without regard to the conflict of law principles thereof, except with respect to matters of law concerning the internal corporate affairs of any corporate entity which is a party to or the subject of this Warrant, and as to those matters the law of the jurisdiction under which the respective entity derives its powers shall govern.

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     10. Entire Agreement; Amendments and Waivers.

     This Warrant, the Confidentiality Agreement between the Holder and the Company, the Registration Rights Agreement, the Standstill Agreement and the Securities Purchase Agreement, constitute the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties, including the written summary of proposed terms between the Company and the Holder.

     11. Counterparts.

     This Warrant may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

     12. Invalidity.

     In the event that any one or more of the provisions contained in this Warrant or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Warrant or any other such instrument.

     13. Headings.

     The headings of the Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Warrant.

     14. Remedies.

     The parties hereto acknowledge and agree that irreparable damage would occur in the event any of the provisions of this Warrant were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of the provisions of this Warrant to enforce specifically the provisions of this Warrant, in any court of the United States or any state thereof having jurisdiction, without the need to pass a bond or other security, in addition to any other remedy to which the parties may be entitled under this Warrant or at law or in equity.

[signature page to follow]

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     In Witness Whereof, the Company has executed this Common Stock Purchase Warrant as of the date set forth above.

COMPANY:
KITTY HAWK, INC.
By:
Name:	Robert W. Zoller, Jr.
Title:	President and Chief Executive Officer

[SIGNATURE PAGE TO COMMON STOCK PURCHASE WARRANT]

NOTICE AND
SUBSCRIPTION

To:	KITTY HAWK, INC.	Date:
	1515 West 20th Street
	P. O. Box 612787
	DFW International Airport, Texas 75261

     The undersigned hereby irrevocably elects to exercise the right of purchase represented by the attached Warrant for, and to exercise thereunder,                                         shares of Common Stock, of KITTY HAWK, INC. a Delaware corporation, and tenders herewith payment of $                                        , in immediately available funds, representing the aggregate purchase price for such shares based on the price per share provided for in such Warrant.

Please issue a certificate or certificates for such shares of Common Stock in the following name or names and denominations and deliver such certificate or certificates to the person or persons listed below at their respective addresses set forth below:

If said number of shares of Common Stock shall not be all the shares of Common Stock issuable upon exercise of the attached Warrant, a new Warrant is to be issued in the name of the undersigned for the balance remaining of such shares of Common Stock less any fraction of a share of Common Stock paid in cash.

Dated:                    ,
	Signature

FORM OF ASSIGNMENT

(To be executed upon assignment of Warrant)

     For value received,                      hereby sells, assigns and transfers unto                      the attached Warrant [___% of the attached Warrant], together with all right, title and interest therein, and does hereby irrevocably constitute and appoint                      attorney to transfer said Warrant [said percentage of said Warrant] on the books of KITTY HAWK, INC., a Delaware corporation, with full power of substitution in the premises.

     If not all of the attached Warrant is to be so transferred, a new Warrant is to be issued in the name of the undersigned for the balance of said Warrant.

     The undersigned hereby agrees that it will not sell, assign, or transfer the right, title and interest in and to the Warrant unless applicable federal and state securities laws have been complied with.

Dated:                    ,
	Signature

EX-5.1

Exhibit 5.1

January 12, 2006

Kitty Hawk, Inc.
1515 West 20^th Street
P.O. Box 612787
DFW International Airport, Texas 75261

Re: Kitty Hawk, Inc. Registration Statement on Form S-3

Ladies and Gentlemen:

     We have acted as counsel to Kitty Hawk, Inc., a Delaware corporation (the “Company”), in connection with the preparation and filing by the Company with the Securities and Exchange Commission of a Registration Statement on Form S-3 (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the offer and sale from time to time, pursuant to Rule 415 under the Securities Act, of up to 25,402,628 shares of common stock, par value $0.000001 per share, of the Company (“Common Stock”), of which (i) 15,410,245 shares of Common Stock are issuable upon conversion of shares of outstanding Series B Convertible Preferred Stock (the “Preferred Stock”), par value $0.01 per share; (ii) 3,609,756 shares of Common Stock are issuable upon the exercise of issued, outstanding and exercisable warrants to purchase Common Stock (the “Warrants”); and (iii) 6,382,627 shares are held by stockholders of the Company (the “Selling Stockholders” as identified in the Registration Statement), and are issued and outstanding as of the date hereof and may be sold by the Selling Stockholders (the “Selling Stockholders Shares”).

     We have examined and relied upon originals or copies, certified or otherwise identified to our satisfaction, of (i) the Second Amended and Restated Certificate of Incorporation of the Company, as amended, (ii) and the Second Amended Restated Bylaws of the Company, (iii) the Registration Statement and all exhibits thereto, (iv) the form of the Warrants, (v) the minutes and records of the corporate proceedings of the Company with respect to the filing of the Registration Statement and the issuance of the Selling Stockholders Shares; (vi) that certain Registration Rights Agreement, dated as of November 14, 2005, by and between the Company and the holders named therein; and (vii) such other certificates, instruments and documents as we considered appropriate for purposes of the opinions hereafter expressed.

     In making the foregoing examinations, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies thereof and the authenticity of the originals of such latter documents.

Kitty Hawk, Inc.
January 12, 2006
Page 2

     As to various questions of fact material to the opinions expressed below, we have, without independent third party verification of their accuracy, relied in part, and to the extent we deem reasonably necessary or appropriate, upon the representations and certificates of the officers of the Company or government officials.

     Finally, we have assumed that all formalities required by the Company’s Second Amended and Restated Certificate of Incorporation, the Company’s Second Amended and Restated Bylaws and the Delaware General Corporate Law will be complied with by the Company when the shares of Common Stock are issued by the Company upon conversion of the Preferred Stock or exercise of the Warrants.

     The opinions expressed herein are limited to the federal laws of the United States of America, and, only to the extent relevant to the particular opinions expressed herein, (i) the DGCL and applicable provisions of the Delaware Constitution, in each case as in effect on the date hereof, and judicial decisions reported as of the date hereof to the extent interpreting the DGCL and such provisions of the Delaware Constitution and (ii) the laws of the State of Texas.

     Based on the foregoing, and subject to the assumptions, qualifications, limitations, and exceptions set forth herein, we are of the opinion that:

1.	The Selling Stockholders Shares that are being registered pursuant to the Registration Statement are validly issued, fully paid and non-assessable.
2.	The shares of Common Stock to be issued by the Company upon conversion of the Preferred Stock and exercise of the Warrants will be, upon issuance thereof in accordance with the terms and conditions of the Preferred Stock and Warrants, validly issued, fully paid and non-assessable.

     We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name under the caption “Legal Matters” in the prospectus forming a part of the Registration Statement.

Very truly yours,
 

/s/ Haynes and Boone, LLP  

HAYNES AND BOONE, LLP 

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We have issued our report dated February 18, 2005, accompanying the consolidated financial statements of Kitty Hawk, Inc. and Subsidiaries appearing in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2004, which is incorporated by reference in this Registration Statement and Prospectus. We consent to the incorporation by reference in the Registration Statement and Prospectus of the aforementioned report and to the use of our name as it appears under the caption, “Experts.”

Dallas, Texas
January 12, 2006
	/s/ Grant Thornton LLP