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                                                                    EXHIBIT 99.1

                              AMENDED AND RESTATED

                              PARTNERSHIP AGREEMENT

                            dated as of July 30, 2004

                                       of

                                   CK PARTNERS

                                      among

                             Frederick H. Kopko, Jr.

                                       and

                                  Joseph Czyzyk

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                     JOINT VENTURE AND PARTNERSHIP AGREEMENT

TABLE OF CONTENTS

ARTICLE 1 - DEFINITIONS
1.1        Affiliate
1.2        Bank Loan
1.3        Bank Note
1.4        Business
1.5        Capital Account
1.6        Code
1.7        Company
1.8        Czyzyk Shares
1.9        Event of Default
1.10       Excess Interest Return
1.11       Interest
1.12       Kopko Shares
1.13       Mercury
1.14       Net Income
1.15       Net Loss
1.16       Partner
1.17       Partnership
1.18       Partnership Shares
1.19       Percentage Interest
1.20       Permitted Transferee
1.21       Person
1.22       Shares
1.23       Tax Matters Partner

ARTICLE 2 - CONTINUATION OF PARTNERSHIP
2.1        Formation
2.2        Name
2.3        Purposes
2.4        Term
2.5        Principal Office
2.6        Fiscal Year
2.7        Property Ownership
2.8        Other Activities
2.9        Scope of Partner Authority

ARTICLE 3 - PARTNERSHIP INTERESTS, CAPITAL CONTRIBUTIONS AND
DISTRIBUTIONS
3.1        Partnership Interests

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3.2        Percentage Interests
3.3        Partner and Partnership Holdings
3.4        Additional Capital Contributions to Pay Principal and Interest on the
           Bank Loan
3.5        Loan of Company Stock and Options
3.6        Distributions
3.7        Additional Contributions and Withdrawals
3.8        Payment of Fees and Expenses

ARTICLE 4 - BOOKS AND RECORDS; REPORTS; ALLOCATIONS; TAXES
4.1        Books
4.2        Reports and Audits
4.3        Preparation of Tax Returns
4.4        Capital Accounts and Allocations
4.5        Tax Matters

ARTICLE 5 - TRANSFERS
5.1        Transfers

ARTICLE 6 - TERM; DISSOLUTION
6.1        Term; Events of Dissolution
6.2        How Election Exercised
6.3        Winding-up
6.4        Liquidation; Payments of Debts; Distributions
6.5        Final Accounting
6.6        Costs and Expenses under Certain Circumstances
6.7        Termination of Agreement

ARTICLE 7 - MANAGEMENT
7.1        Control of Business
7.2        Vote of the Shares
7.3        Duties of Partners Regarding Mercury
7.4        Handling Funds
7.5        Partners' Salaries
7.6        Actions Inconsistent with Purpose of Partnership
7.7        Power of Attorney

ARTICLE 8 - MATTERS REQUIRING SPECIAL VOTE OF THE PARTNERSHIP
8.1        Approval Required for Certain Actions
8.2        Non-Approval of Certain Extra-Ordinary Transactions

ARTICLE 9 - GENERAL PROVISIONS
9.1        Notices
9.2        Further Assurances

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9.3        Computation of Time
9.4        Limitation of Authority
9.5        Fees and Expenses
9.6        Amendment
9.7        Waiver
9.8        Specific Performance
9.9        Governing Law
9.10       Remedies
9.11       Severability
9.12       Counterparts
9.13       Further Assurances; Duty of Good Faith
9.14       Binding Effect
9.15       Assignment
9.16       No Third Party Beneficiaries
9.17       Titles and Captions
9.18       Grammatical Conventions
9.19       References
9.20       Incorporation By Reference
9.21       Arbitration
9.22       Waiver of Partition
9.23       Entire Agreement

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                              AMENDED AND RESTATED
                              PARTNERSHIP AGREEMENT

      AMENDED AND RESTATED PARTNERSHIP AGREEMENT dated as of July 30, 2004, by
and among Frederick H. Kopko, Jr., ("Kopko") and Joseph A. Czyzyk ("Czyzyk" and
collectively, the "Partners").

                              W I T N E S S E T H :

      WHEREAS, on July 30, 2000, the Partners and Philip J. Fagan, Jr., M.D.
("Fagan") entered into a partnership agreement (the "Partnership Agreement")
pursuant to which the Partners and Fagan formed a general partnership under the
Uniform Partnership Act of the State of Illinois, known as FK Partners, and now
known as CFK Partners (the "Partnership"); and

      WHEREAS, the Partnership was formed for the purposes of enhancing
shareholder value, of Mercury Air Group, Inc. ("Mercury" or the "Company"); and

      WHEREAS, on June 30, 2004, the Partners and Fagan entered into a Seventh
Amendment to Partnership Agreement, which effected additional changes to the
Partnership Agreement; and

      WHEREAS, Fagan has elected to withdraw from the Partnership; and

      WHEREAS, the remaining Partners have elected to amend and restate the
Partnership Agreement, and to rename the Partnership under the name "CK
Partners"; and

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

                                    ARTICLE 1
                                   DEFINITIONS

      1.1   "Affiliate" of a person means any other person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, such person.

      1.2   "Bank Loan" shall mean any loan by a Third Party to the Partnership
which is secured by the Partnership Shares.

      1.3   "Bank Note" shall mean any note representing a Bank Loan.

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      1.4   "Business" shall have the meaning set forth in Section 2.3 hereof.

      1.5   "Capital Account" shall have the meaning set forth in Section 4.4
            hereof.

      1.6   "Code" shall mean the Internal Revenue Code of 1986, as amended.

      1.7   "Company" shall have the meaning set forth in the Preambles.

      1.8   "Czyzyk Shares" shall have the meaning set forth in Section 2.4
hereof.

      1.9   "Event of Default" shall mean one of the events set forth in Section
6.1(c) hereof.

      1.10  "Excess Interest Return" shall have the meaning set forth in Section
3.6.

      1.11  "Interest" shall have the meaning set forth in Section 3.1 hereof.

      1.12  "Kopko Shares" shall have the meaning set forth in Section 2.3
hereof.

      1.13  "Mercury" shall have the meaning set forth in the Preambles.

      1.14  "Net Income" shall have the meaning set forth in Section 4.4(b)
hereof.

      1.15  "Net Loss" shall have the meaning set forth in Section 4.4(b)
hereof.

      1.16  "Partner" shall have the meaning set forth in Section 2.1 hereof.

      1.17  "Partnership" shall have the meaning set forth in the Recitals.

      1.18  "Partnership Shares" shall have the meaning set forth in Section 2.3
hereof.

      1.19  "Percentage Interest" shall have the meaning set forth in Section
3.1 hereof.

      1.20  "Permitted Transferee" shall mean (i) the Partnership or any other
Partner; (ii) a transferee by intestate succession or testamentary disposition;
(iii) the spouse or children, or a trustee for the spouse or children or both,
of the transferee; (iv) a revocable trust in which the transferee is trustee or
(v) a corporation, 51% or more of the capital and voting stock of which is
owned, directly or indirectly, by the transferee.

      1.21  "Person" means any natural person, corporation, joint stock company,
partnership, joint venture, association, estate, trust, government of
governmental body, agency or instrumentality, or other entity.

      1.22  "Shares" shall have the meaning set forth in Section 2.3 hereof.

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      1.23  "Tax Matters Partner" shall mean the "Tax Matters Partner" as
defined in Section 6231(a)(7) of the Code.

                                    ARTICLE 2
                           CONTINUATION OF PARTNERSHIP

      2.1   Formation. Kopko and Czyzyk (each, a "Partner" and collectively, the
"Partners") hereby agree to continue the Partnership under the Uniform
Partnership Act of the State of California pursuant to the terms of this
Agreement.

      2.2   Name. The name of the Partnership shall be CK Partners.

      2.3   Purposes. Except as otherwise provided herein, the Partnership shall
engage in the business (the "Business") of (i) of enhancing shareholder value of
Mercury; (ii) continuing to own 476,942 shares of common stock currently owned
by CFK Partners ("Partnership Shares"); (iii) holding the Partnership Shares;
(iv) holding the following shares and options of Mercury: 15,125 shares and
98,688 options owned by Kopko ("Kopko Shares"); and 269,712 shares and 125,000
options owned by Czyzyk ("Czyzyk Shares", and collectively, with the Kopko
Shares, and the Partnership Shares, the "Shares"); (v) exercising voting power
with respect to the Shares, and (vi) disposing of the Shares, all upon the terms
and conditions set forth in this Agreement, provided, however, that the Kopko
Shares and Czyzyk Shares shall not be considered as owned by the Partnership and
no Partner shall be entitled to an addition to his capital account as a result
of his ownership or pledge to the Partnership of such Shares.

      2.4   Term. The Partnership shall continue in existence until January 1,
2040, unless it is terminated earlier as provided in this Agreement.

      2.5   Principal Office. The principal office of the Partnership initially
shall be located at 5456 McConnell Avenue, Los Angeles, California 90066, or at
such other place as may be selected from time to time by the Partners. The
Partnership may maintain such other offices at such other places as the Partners
deem advisable.

      2.6   Fiscal Year. The fiscal year and the taxable year of the Partnership
for federal income tax purposes shall be the calendar year.

      2.7   Property Ownership. The Shares and all other properties and assets,
real or personal, tangible or intangible, owned by the Partnership or acquired
by the Partnership through purchase, contribution by a Partner or otherwise
shall be held and recorded in the name of the Partnership. The Shares and all
such properties and assets shall be deemed to be owned by the Partnership as an
entity, and no Partner individually shall have any ownership of the Shares of
such other property or assets.

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      2.8   Other Activities. Each Partner may engage or participate, or possess
any interest, in any other business enterprise, venture or activity of any
nature or description, independently or with others, and may receive and enjoy
income therefrom; provided, however, that none of the Partners nor their
Affiliates shall engage in any competing company, or act as majority shareholder
in any competing company, except through the Partnership or through Mercury.
None of the Partners shall be required to account to the Partnership or the
other Partners with respect to any such income, nor shall the Partnership or the
other Partners have, by virtue of this Agreement, any rights or interest in or
to such independent enterprise, venture or activity or the income derived
therefrom.

      2.9   Scope of Partner Authority. Except as otherwise expressly and
specifically provided in this Agreement, none of the Partners shall have any
authority to act for, or to assume any obligations or responsibilities on behalf
of, the Partnership or of the other Partners.

                                    ARTICLE 3
         PARTNERSHIP INTERESTS, CAPITAL CONTRIBUTIONS AND DISTRIBUTIONS

      3.1   Partnership Interests. The interest (an "Interest" or "Interests")
of each Partner in the profits, losses, capital, distributions and any other
items of the Partnership shall be allocated in accordance with their relative
Percentage Interests in the Partnership. "Percentage Interest" means, with
respect to any Partner, the Percentage Interest set forth in Section 3.2 hereof.
If an Interest in the Partnership is transferred in accordance with the
provisions of this Agreement, the transferee of such Interest shall succeed to
the Percentage Interest of the transferor to the extent it relates to the
transferred Interest.

      3.2   Percentage Interests. The Percentage Interests of the Partners shall
be 50.00% for Kopko and 50.00% for Czyzyk. Each Interest shall be personal
property for all purposes. Percentage Interests shall not be adjusted in the
event of any capital contributions pursuant to Section 3.4 or for any other
reason.

      3.3   Partner and Partnership Holdings. Notwithstanding any provision in
the Partnership Agreement, the parties agree as follows: (i) as of the date of
this Agreement, each Partner has contributed the following capital: Czyzyk
$1,177,023 and Kopko $577,000, which includes a capital contribution by Kopko of
$50,000 on June 25, 2004; (ii) as of the date of this Agreement, and prior to
taking account of shares acquired from Fagan, the Partnership owns 476,942
shares of Mercury, and is holding 269,712 shares and options to acquire 125,000
shares owned by Czyzyk and 15,125 shares and options to acquire 98,688 shares
owned by Kopko; and (iii) each Partner shall has also guaranteed the Bank Loan.

      3.4   Additional Capital Contributions to Pay Principal and Interest on
the Bank Loan. In order to pay principal and interest on the Bank Note, the
Partners shall contribute to the Partnership the following amounts: First, in
each fiscal year Czyzyk shall contribute (i) all discretionary bonuses from
Mercury and its subsidiaries and (ii) all salary from Mercury and its
Subsidiaries, minus salary

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from Mercury and its Subsidiaries from the fiscal year ended June 30, 2000;
Second, the Partners shall contribute all additional amounts in an inverse
proportion to the ratio of existing capital contributions, until capital
contributions are equal and; Third, the Partners shall contribute all additional
amounts on an equal basis. If any Partner fails to make a capital contribution
pursuant to this Section 3.4 (such Partner hereinafter referred to as the
"Defaulting Partner"), the other Partner may, at his option, make such
contribution, which contribution shall be considered a loan by the Partner who
made such loan to the Partnership on terms acceptable to the Partner. The amount
by which the Defaulting Partner failed to make a capital contribution shall be
considered a loan by the Partnership to the Defaulting Partner, and shall bear
interest at the rate of seven percent (7%) per annum.

      3.5   Loan of Company Stock and Options.

      (a)   In order to secure the Bank Note, the Partners hereby agree to
continue to lend to the Partnership their respective Kopko Shares and Czyzyk
Shares.

      (b)   the partners hereby agree that their respective Kopko Shares, and
Czyzyk Shares (the "Personal Shares") may continue to be pledged to the Bank as
security for the Bank Note.

      (c)   In the event that the Bank sells or otherwise disposes of any
Shares, then regardless of the specific identification of the Shares that have
been sold or disposed of, the Partners shall consider the Shares to have been
sold in the following order of priority for purposes of liquidation of the
Partnership pursuant to Section 6.4 hereof: First, the Partnership Shares, and
Second, the Kopko and Czyzyk Shares, pro-rata, in proportion to the amount of
such Shares.

      3.6   Distributions. Unless the Partners otherwise agree in writing,
distributions, other than upon dissolution, from the profits and surplus of the
Partnership shall be made to each Partner at the discretion of the Partners,
provided, however, that if one Partner requests a distribution, and if such
Partner reasonably believes that a dividend by Mercury is fair to the
shareholders of Mercury, the other Partner shall take all action required to
effect a dividend by Mercury to its shareholders, followed by a distribution by
the Partnership to the Partners. All distributions shall be made as follows: (A)
First, to Czyzyk, a return of $1,000,000 of his capital contribution; (B)
Second, to Kopko and Czyzyk, pro-rata, in proportion to all capital
contributions that have not been repaid pursuant to the terms hereof, until
capital contributions and interest thereon have been repaid in full; (C) Third,
to Kopko and Czyzyk$500,000 each per year; and (D) Fourth, to Kopko and Czyzyk,
pro-rata in proportion to all Kopko Shares and Czyzyk Shares held by the
Partnership, until the value of the Kopko Shares and the Czyzyk Shares have been
returned to Kopko and Czyzyk, respectively, valuing such shares at $6.75 per
share. All remaining distributions shall be made in proportion to each Partner's
Percentage Interest at the time of the declaration of such distribution. No
Partner shall be entitled to any distribution from the profits and surplus of
the Partnership, except as may be authorized by the Partnership. Notwithstanding
anything herein to the contrary, in the event any Partner breaches any provision
of Article VII hereof, then, during the pendancy of such breach, the other
Partner shall be entitled to a distribution, prior to any distribution set forth
above, in an amount

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equal to $45,000 per month. All capital contributions made to the Partnership
but not disbursed pursuant to this provision shall continue to bear interest at
the rate of seven percent (7%) per annum until paid, and shall represent a
secured loan from the Partnership to the Partner who was entitled to such
distribution.

      3.7   Additional Contributions and Withdrawals. No Partner shall be
required to make any contribution to the capital of the Partnership other than
as provided in this Article 3. All capital contributions shall be applied in
furtherance of the Business of the Partnership. No Partner shall have the right
to withdraw from the Partnership or to demand a return of all or any part of its
capital contribution during the term of the Partnership. Interest shall accrue
at the rate of seven percent (7%) on all loans and capital contributions.

      3.8   Payment of Fees and Expenses. Except as approved by the Partnership
or pursuant to any specific written agreement between a Partner (or its
Affiliate) and the Partnership, no Partner shall be reimbursed for his overhead
or general or administrative expenses attributable to the Partnership, nor shall
salaries, fees, commissions or other compensations be paid by the Partnership to
any Partner or to any Affiliate of a Partner for services rendered to the
Partnership.

      3.9   Indemnification. Notwithstanding any other provision herein or in
any other document, Kopko shall not be required to indemnify, repay or reimburse
Czyzyk with respect to a promissory note from Czyzyk to the Montecito Bank or
any renewal or extension thereof.

                                    ARTICLE 4
                 BOOKS AND RECORDS; REPORTS; ALLOCATIONS; TAXES

      4.1   Books. The Partnership shall maintain complete and accurate books of
account of the Partnership's affairs at the Partnership's principal office,
including a list of the names and addresses of the Partners and the Percentage
Interest of each Partner. The books of account for the Partnership shall be
maintained in a manner that provides sufficient assurance that:

      (a)   transactions of the Partnership are executed in accordance with the
general or specific authorization of the officers of the Partnership consistent
with the provisions of this Agreement;

      (b)   transactions of the Partnership are recorded in such form and manner
as will (i) permit preparation of federal, state, local and foreign income tax
returns and information returns of the Partnership in accordance with this
Agreement and as required by law, (ii) permit preparation of the Partnership's
financial statements in accordance with generally accepted accounting principles
in the United States, and (iii) maintain accountability for Partnership's
assets; and

      (c)   the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to
any difference.

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Each Partner, by or through its duly authorized employees, agents, accountants
or attorneys, may, at its own expense, audit, examine and make copies of or
extracts from the Partnership's books and records at reasonable times for any
purpose reasonably related to the Partner's interest in the Partnership, so long
as the same does not interfere in any material respect with the operation of the
Partnership.

      4.2   Reports and Audits. The books of account shall be closed promptly
after the end of each fiscal year. Within ninety (90) days thereafter, a written
report shall be delivered to each Partner, which written report shall contain
such statements with respect to the status of the Partnership's operations and
transactions by the Partnership as are material to the Partnership and as are
considered necessary by the President to advise each Partner properly about his
investment in the Partnership.

      4.3   Preparation of Tax Returns. The appropriate officers of the
Partnership shall cause federal, state, local and foreign income tax returns of
the Partnership to be prepared. As promptly as practicable after the end of each
fiscal year, the appropriate officers of the Partnership shall cause to be
prepared and delivered to each Partner a statement of such Partner's share of
the Partnership's taxable income or loss for the preceding fiscal year and all
other information necessary in preparing such Partner's federal, state, local
and foreign income tax returns with respect to the Partnership.

      4.4   Capital Accounts and Allocations. (a) A separate capital account (a
"Capital Account") shall be maintained on the Partnership's books for each
Partner. In the event any Interest is transferred in accordance with the terms
of this Agreement, the transferee shall succeed to the Capital Account of the
transferor to the extent it relates to the transferred Interest.

      (b)   Definitions. Unless the context requires otherwise, the following
terms have the meanings specified in this Section 4.4(b):

            (1) Book Value: The Book Value with respect to any asset shall be
            the asset's adjusted basis for federal income tax purposes, except
            as follows:

                  (i) The initial Book Value of any asset contributed by a
            Partner to the Partnership shall be the Fair Market Value of such
            asset at the time of contribution, as determined by the contributing
            Partner and the Partnership.

                  (ii) The Book Value of all Partnership assets shall be
            revalued to equal their respective Fair Market Values and the
            resulting unrecognized gain or loss allocated to the Capital
            Accounts of the Partners in accordance with their relative
            Percentage Interests (as determined immediately before such
            revaluation) as of the following times:

                  (A) the acquisition of an additional Interest by any new or
            existing Partner in exchange for a capital contribution; (B) the
            distribution by the

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            Partnership to a Partner of a non-cash asset, unless all Partners
            receive simultaneous distributions of either undivided interests in
            the distributed property or identical Partnership assets in
            proportion to their Percentage Interests; (C) the date the
            Partnership is liquidated within the meaning of Treasury Regulation
            Section 1.704-1(b)(2)(ii)(g); and (D) the termination of the
            Partnership pursuant to the provisions of this Agreement.

                  (iii) The Book Value of Partnership assets shall be increased
            or decreased to the extent required under Treasury Regulation
            Section 1.704-1(b)(2)(iv)(m) in the event that the adjusted tax
            basis of Partnership assets are adjusted pursuant to Sections 732,
            734 or 743 of the Code.

                  (iv) The Book Value of Partnership assets shall be adjusted by
            the depreciation, amortization or other cost recovery deductions, if
            any, taken into account by the Partnership with respect to such
            asset in computing Net Income or Net Loss.

            (2) Capital Account: Unless otherwise agreed by the Partners, the
Capital Account of a Partner shall be increased by:

                  (i) the Fair Market Value of assets contributed to the
            Partnership (determined as of the date of contribution) by such
            Partner;

                  (ii) the amount of money contributed to the Partnership by
            such Partner;

                  (iii) such Partner's share of Net Income (or items thereof)
            allocated to its Capital Account pursuant to this Agreement;

                  (iv) Partnership liabilities assumed by such Partner or which
            are secured by any Partnership property distributed to such Partner;
            and

                  (v) any other amounts required by Treasury Regulation Section
            1.704-1(b).

and, unless otherwise agreed by the Partners, shall be decreased by:

                  (i) the amount of money and the Fair Market Value of any
            Partnership property distributed by the Partnership (determined as
            of the date of distribution) to such Partner pursuant to the
            provisions of this Agreement;

                  (ii) such Partner's share of Net Loss (or items thereof)
            allocated to its Capital Account pursuant to this Agreement; and

                  (iii) any other amounts required by Treasury Regulation
            Section 1.704-1(b).

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            (3) Net Income and Net Loss: "Net Income" and "Net Loss" shall mean
      the taxable income or loss of the Partnership for any relevant period
      computed in accordance with federal income tax principles, as adjusted
      pursuant to the following provisions:

                  (i) including as income any income that is exempt from federal
            income tax and not otherwise taken into account in computing Net
            Income or Net Loss pursuant to this Section 4.4;

                  (ii) including as a deduction any non-capital expenditures
            described in Section 705(a)(2)(B) of the Code and not otherwise
            taken into account in computing Net Income or Net Loss pursuant to
            this Section 4.4;

                  (iii) including as a deduction when paid or incurred any
            amounts utilized to organize the Partnership, except that amount for
            which an election is properly made by the Partnership under Section
            709(b) of the Code shall be accounted for as provided therein;

                  (iv) including as a deduction any losses incurred by the
            Partnership in connection with the sale or exchange of property,
            notwithstanding that such losses may be disallowed to the
            Partnership for federal income tax purposes under the related party
            rules of Code Sections 267(a)(1) or 707(b); and

                  (v) calculating the gain or loss on disposition of Partnership
            assets and the depreciation, amortization or other cost recovery
            deductions, if any, with respect to Partnership assets by reference
            in their Book Value rather than their adjusted tax basis.

      (c)   Allocations.

            (1) As of the end of each fiscal year of the Partnership, the Net
      Income of the Partnership (and each item thereof) shall be allocated in
      proportion to distributions of cash. The Net Loss of the Partnership (and
      each item thereof) shall be allocated to the Partners in accordance with
      their relative Percentage Interests.

            (2) The allocation of each item of income, gain, loss, deduction or
      credit earned, realized or available by or to the Partnership, shall be
      allocated to the Partners for federal income tax purposes as provided in
      Section 4.4(c)(1) hereof, except as otherwise required by Section 704 of
      the Code in the reasonable determination of the Tax Matters Partner;
      provided, however, that (i) income, gain, loss and deduction with respect
      to property contributed by a Partner to the Partnership shall be shared
      among the Partners so as to take account of the variation between the tax
      basis of the property to the Partnership and the Fair Market Value of the
      property at the time of contribution to the extent and in the manner

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      required by Section 704(c) of the Code and (ii) if the assets of the
      Partnership shall be revalued to their respective fair market valued in
      accordance with Section 4.4(b) hereof, allocations of income, gain, loss
      and deduction for federal income tax purposes shall be made in accordance
      with the principles of Section 704(c) of the Code between the Partners to
      take into account the variation between the assets' adjusted tax basis and
      their Fair Market Value as of the date of the revaluation in accordance
      with Treasury Regulations Sections 1.704-1(b)(1)(i) and 1.704-1(b)(4)(iv).

            (3) If there is a change in the Percentage Interest of a Partner
      during a taxable period of the Partnership, the allocations set forth in
      this Section 4.4(c) shall be made on the basis of an interim closing of
      the books of the Partnership as of the close of business on the day
      immediately preceding the effective date of such change. Allocations shall
      be made for the portion of any period prior to the change in Percentage
      Interest in accordance with the Percentage Interest in effect prior to
      such change and, for the portion of the period beginning on the date such
      change is effective, in accordance with the Percentage Interest in effect
      after such change.

            (4) Allocations pursuant to this Section 4.4 are not in any way to
      be taken into account in computing distributions pursuant to any
      provisions of this Agreement.

      4.5   Tax Matters. (a) Czyzyk shall be the "Tax Matters Partner" of the
Partnership as such term is defined in Section 6231(a)(7) of the Code. The Tax
Matters Partner shall cause all federal, state and local tax returns of the
Partnership to be prepared for each taxable period for which such returns are
required to be filed and shall cause such returns to be timely filed. The Tax
Matters Partner shall provide copies of all such returns to all Partners at a
reasonable time prior to the time of filing of such returns. The Tax Matters
Partner, at the direction of the Partnership, shall determine the accounting
methods and conventions under the tax laws of the United States, the several
states and other relevant jurisdictions as to the treatment of income, gain,
loss, deduction and credit of the Partnership or any other method or procedure
related to the preparation of such tax returns. The Tax Matters Partner, at the
direction of the Partnership, may cause the Partnership to make or refrain from
making any and all elections permitted by such tax laws (including, without
limitation, an election under Section 754 of the Code).

      (b)   Each Partner agrees that it shall not:

                  (i) treat, on its individual income tax returns, any item of
            income, gain, loss, deduction, or credit relating to its interest in
            the Partnership in a manner inconsistent with the treatment of such
            item by the Partnership as reflected on the Form K-1 or other
            information statement furnished by the Partnership to such Partner
            for use in preparing its income tax returns; or

                  (ii) file any claim for refund relating to any such item based
            on, or which would result in, such inconsistent treatment.

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      (c)   In the event of an income tax audit of any tax return of the
Partnership, the filing of any amended return or claim for refund in connection
with any item of income, gain, loss, deduction or credit reflected on any tax
return of the Partnership, or any administrative or judicial proceedings arising
out of or in connection with any such audit, amended return, claim for refund or
denial of such claim:

                  (i) the Tax Matters Partner shall be authorized to act for,
            and its decision shall be final and binding upon, the Partnership
            and all Partners and

                  (ii) no other Partner shall have the right to

                        (A) participate in the audit of any Partnership tax
                  return,

                        (B) file any amended return or claim for refund in
                  connection with any item of income, gain, loss, deduction,
                  cost recovery deduction, depreciation or credit reflected on
                  any tax return of the Partnership,

                        (C) participate in any administrative or judicial
                  proceedings arising out or in connection with any such audit,
                  amended return, claim for refund or denial of such claim,

                        (D) appeal, challenge or otherwise protest any adverse
                  findings in any such audit or with respect to any such amended
                  return or claim for refund in any such administrative or
                  judicial proceedings;

provided, however, that the Tax Matters Partner shall (i) provide reasonable
notice to all Partners concerning its intended actions and decisions in its
capacity as Tax Matters Partner (ii) provide the Partners with any information
reasonably requested by them relating to such actions or decisions and (iii) the
Partners shall have the right to consult with the Tax Matters Partner as to such
matters and approve such matters, provided that such approval shall not be
unreasonably withheld by any Partner.

      (d)   Prompt notice shall be given to the Partners upon receipt of advice
that the Internal Revenue Service or similar state or local authority intends to
examine Partnership income or other tax returns for any year.

      (e)   The Partners intend that the Partnership shall be treated as a
"partnership" for federal, state, local and foreign income tax purposes and
agree to take all reasonable actions, including the amendment of this Agreement
and the execution of other documents, as may be reasonably required to qualify
for and receive such treatment as a "partnership" for such income tax purposes.

      (f)   Each Partner agrees to indemnify and hold harmless the Partnership
and all other Partners from and against any and all liabilities, obligations,
damages, deficiencies and expenses resulting from any

                                     - 11 -
<PAGE>

breach or violation by such Partner of the provisions of this Section 435 and
from all actions, suits, proceedings, demands, assessments, judgments, costs and
expenses, including reasonable attorneys' fees and disbursements, incident to
any such breach or violation.

                                    ARTICLE 5
                                    TRANSFERS

      5.1   Transfers. None of the Partners may sell, assign, or otherwise
transfer or mortgage, hypothecate, or otherwise dispose of or encumber or permit
or suffer any encumbrance of all or any part of its Interest unless approved by
the other Partners in writing; provided, however, that notwithstanding the
foregoing, each Partner may transfer or sell all, but not less than all, of its
Interest to a Permitted Transferee. No such transfer shall constitute the
transferee a partner or entitle the transferee to any of the rights of a
partner, other than the right to receive as much of the transferor's share of
partnership distribution as is transferred to the transferee. Such a transfer
shall not terminate any of the transferor's obligations.

                                    ARTICLE 6
                                TERM; DISSOLUTION

      6.1   Term; Events of Dissolution. Unless otherwise agreed by all Partners
in writing, the Partnership will be dissolved, and, except as otherwise provided
herein, its business and affairs thereafter will be wound up and terminated,
upon the occurrence of any of the following events:

      (a)   Upon the written agreement of both Partners;

      (b)   On January 1, 2040;

      (c)   At the death of either Partner;

      6.2   How Election Exercised. A Partner electing to dissolve the
Partnership pursuant to Section 6.1(d) shall give notice of such election to the
other Partner in writing and a copy thereof shall be sent to the Partnership.

      6.3   Winding-up. From the date of dissolution, the Partners shall
promptly proceed to wind-up and liquidate the affairs and assets of the
Partnership.

      6.4   Liquidation; Payments of Debts; Distributions. (a) In winding-up the
affairs of the Partnership, the assets of the Partnership shall be liquidated
and the proceeds applied in the following order:

            (i) to payment of the expenses of the liquidation;

                                     - 12 -
<PAGE>

            (ii) to payment (or other adequate provision for the satisfaction)
      of the debts and liabilities of the Partnership, including those owed to
      any of the Partners for goods, services, advances, loans or otherwise (but
      not for return of any contribution by the Partners or any interest
      thereof);

            (iii) to the payment of any loans and capital contributions made by
      any Partner to the Partnership;

            (iv) to divide the surplus, if any, between the Partners in
      accordance with each Partner's Percentage Interest, provided that any
      distribution in-kind shall be considered for the purposes of such
      distribution to have been a disposition of such assets by the Partnership
      at the Fair Market Value thereof and a distribution of such proceeds to
      the Partner receiving such assets.

      (b)   The liquidation of the assets and discharge of liabilities shall
occur in an orderly manner so as to enable the Partners to reasonably maximize
the proceeds therefrom. In the event of such liquidation, each Partner shall
promptly pay to the Partnership any amounts owned to the Partnership, whether or
not then due and payable, together with its proportionate share of all
contributions required by law to be paid by the Partners for the payment, or
other provision for the satisfaction, of the debts and liabilities of the
Partnership.

      (c)   Upon liquidation of the assets of the Partnership, the Czyzyk Shares
shall be returned to Czyzyk and the Kopko Shares shall be returned to Kopko
(after, in each instance, taking account of the provisions set forth in
paragraph 3.5(c) hereof and to the extent distributions have not been made with
respect to such shares pursuant to Section 3.6 hereof), to the extent not
liquidated to pay debts of the Partnership.

      (d)   The Partners who are liquidating the assets of the Partnership shall
act in the best interests of the Partnership, as determined by such Partners.

      6.5   Final Accounting. If the Partnership is liquidated, each Partner
shall be furnished with a statement certified by the independent public
accountants of the Partnership, which shall set forth the assets and liabilities
of the Partnership and the Interest of each of the Partners as of the date of
the complete liquidation, taking into account distributions and payments as
provided in Section 6.4 hereof, the allocation of all gain or loss realized by
the Partnership on the liquidation of property and assets of the Partnership,
the allocation of any tax attributes, and any other matter not inconsistent with
this Agreement deemed appropriate by such accountants.

      6.6   Costs and Expenses Under Certain Circumstances. In the event of a
dissolution or termination of the Partnership resulting from a breach by any
Partner of the provisions of this Agreement, the breaching Partner shall
indemnify and hold harmless the other Partners from and

                                     - 13 -
<PAGE>

against any and all costs and out-of-pocket expenses (including reasonable
attorneys' fees) reasonably incurred by the other Partner as a result of such
dissolution.

      6.7   Termination of Agreement. All of the provisions of this Agreement
shall remain in full force and effect until the dissolution, winding-up,
liquidation and termination of the Partnership.

                                    ARTICLE 7
                                   MANAGEMENT

      7.1   Control of Business. Each Partner shall participate in the control,
management, and direction of the Partnership's business. In exercising this
control, management and direction, each Partner shall have one vote.

      7.2   Vote of the Shares.

      At all times while this Agreement is in effect:

      (a)   In the election of members of the Board of Directors of the Company,
each Partner agrees that the Shares shall be voted: (i) for Czyzyk and Kopko,
(ii) for re-election of the existing members of the Board, or, (iii) if an
existing member dies, resigns, is not re-elected, or is not re-nominated, as
designated by Czyzyk and Kopko, collectively. Neither Partner shall take any
action, directly or indirectly, to change the size of the Board, without the
consent of the other Partner.

      (b)   In all other matters with respect to the Company, each Partner
agrees that the Shares shall be voted as directed by both Partners.

      7.3   Duties of Partners Regarding Mercury. Each Partner agrees to take
all action necessary in order that (a) Czyzyk shall become and remain Chairman
of the Board and remain Chief Executive Officer of Mercury; and (b) McBreen &
Kopko shall continue to serve as general counsel of Mercury, consistent with
past practices. Neither Partner shall, directly or indirectly, take any action
inconsistent with the above.

      7.4   Handling Funds. All partnership funds shall be deposited in the
Partnership's name and shall be subject to withdrawal only on the signatures of
either Partner.

      7.5   Partners' Salaries. No Partner shall be entitled to any salary from
the Partnership.

      7.6   Actions Inconsistent with Purpose of Partnership. Neither Partner
shall, either individually or on behalf of the Partnership, take any action
inconsistent with the purpose of the Partnership.

      7.7   Power of Attorney. Kopko shall execute a power of attorney in the
form attached

                                     - 14 -
<PAGE>

appointing Czyzyk with full power and authority to execute documents on behalf
of the Partnership to carry out the purposes of this Agreement, and Czyzyk shall
execute a power of attorney appointing Kopko with full power and authority to
execute documents on behalf of the Partnership to carry out the purposes of this
Agreement.

                                    ARTICLE 8
                MATTERS REQUIRING SPECIAL VOTE OF THE PARTNERSHIP

      8.1   Approval Required for Certain Actions. Notwithstanding any other
provision of this Agreement, without the approval of all partners, neither the
Partnership nor any Partner, officer, employee or agent thereof, acting for or
on behalf of the Partnership, may, directly or indirectly, take any of the
following actions:

      (a)   Except as set forth in Section 3.4, require any Partner to make any
capital contribution or investment in the Partnership.

      (b)   Enter into any agreement or have any discussions with any third
party concerning (i) any Partnership matter or (ii) any transaction involving
capital stock of Mercury, whether owned by the Partnership, the Partners, or
otherwise.

      (c)   Sell, lease or otherwise dispose of any of the Shares, or all or a
substantial portion of the other assets of the Partnership; or enter into any
merger, business combination, partnership or joint venture agreement; or, except
for the Company, acquire a substantial equity interest in any other person; or
acquire or lease all or a substantial part of any other person's assets or
business.

      (d)   Except as security for the Bank Loan, pledge, mortgage, hypothecate
or otherwise encumber all or a substantial portion of the Shares, or any of the
other Partnership's assets, tangible or intangible, and whether as security for
loans or otherwise.

      (e)   File on behalf of the Partnership a voluntary petition or an
application under the laws of the United States of America or any state thereof
seeking relief of debtors, reorganization, liquidation or dissolution.

      (g)   Amend this Agreement.

      (g)   Admit additional partners to the Partnership.

      (h)   Change the purpose for which the Partnership was formed or change
the Business of the Partnership in any material respect.

      (i)   Enter into any agreement, arrangement or understanding or engage in
any transaction with any Partner or any Affiliate of any Partner.

                                     - 15 -
<PAGE>

      (j)   Except to the extent permitted by Article 6 hereof, dissolve,
terminate, liquidate or wind-up the affairs of the Partnership.

      8.2   Non-Approval of Certain Extra-Ordinary Transactions. Unless both
Partners unanimously agree otherwise, each Partner shall vote against any
transaction dealing with the merger, consolidation or transfer, directly or
indirectly, of any capital stock of or any other interest in Mercury or its
subsidiaries or any of their assets.

                                    ARTICLE 9
                               GENERAL PROVISIONS

      9.1   Notices. Any notice or demand required or permitted to be given to
made to or upon any party hereto pursuant to any of the provisions of this
Agreement shall be deemed to have been duly given or made for all purposes if
(i) in writing and delivered by hand against receipt, or sent by certified or
registered mail, postage prepaid or return receipt requested or (ii) sent by
telegram, telecopy, telex or other electronic means and followed by a copy
delivered or sent in the manner provided in clause (i) above or by overnight
courier service, to such party and their respective counsel in connection with
amending and restating this agreement at the following addresses:

      (a)   If to Kopko:            Frederick H. Kopko, Jr.
                                    20 North Wacker Drive, Suite 2520
                                    Chicago, Illinois 60606

            With a copy to:         James R. Stern
                                    20 North Wacker Drive, Suite 2520
                                    Chicago, Illinois 60606

      (b)   If to Czyzyk:           Joseph A. Czyzyk
                                    5456 McConnell Avenue
                                    Los Angeles, California 90066

            With a copy to:         Wayne Lovett
                                    5456 McConnell Avenue
                                    Los Angeles, California 90066

or such other address as any party hereto may at any time, or from time to time,
direct by notice given to the other parties in accordance with this Section 9.1.
The date of giving or making of any such notice or demand shall be the earlier
of the date of acknowledged receipt, or, if receipt is not acknowledged, five
(5) business days after such notice or demand is sent, of, if sent in accordance
with clause (ii), the business day next following the day such notice or demand
is actually

                                     - 16 -
<PAGE>

transmitted.

      9.2   Further Assurances. All Partners agree to take all steps necessary
to implement the provisions of this Agreement.

      9.3   Computation of Time. Any interval or period of time defined in terms
of a specified number of days preceding or succeeding a particular even shall be
determined without including in such interval or period the date on which such
event occurs; and the number of days in any interval or period defined as that
between two fixed or determinable dates shall not include the date on which such
interval or period commences, but shall include the date on which such interval
or period terminates.

      9.4   Limitation of Authority. Except to the extent and in the manner
provided herein, this Agreement is not intended, and shall not be deemed, to
create any partnership, joint venture or joint enterprise or association among
the parties hereto, or to authorize or to empower any party hereto to act on
behalf of, obligate or bind any other party hereto.

      9.5   Fees and Expenses. Each of the parties hereto shall bear such fees
and expenses as may be incurred by it in connection with the negotiation and
preparation of this Agreement.

      9.6   Amendment. Except as otherwise provided herein, no amendment of this
Agreement shall be valid or effective, unless in writing and signed by or on
behalf of the parties hereto. In the event of a breach by one party to this
Agreement, the other party shall be entitled to reimbursement of his legal fees
incurred in connection with the breach.

      9.7   Waiver. No course of dealing or omission or delay on the part of any
party hereto in asserting or exercising any right hereunder shall constitute or
operate as a waiver of any such right. No waiver of any provision hereof shall
be effective, unless in writing and signed by or on behalf of the party to be
charged therewith. No waiver shall be deemed a continuing waiver or waiver in
respect of any other or subsequent breach or default, unless expressly so stated
in writing.

      9.8   Specific Performance. Each of the Partners acknowledges and agrees
that the other Partner would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Partners agrees that,
without posting bond or other undertaking, the other Partner shall be entitled
to an injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any claim, action, cause of action or suit (whether in
contract or tort or otherwise), litigation (whether at law or in equity, whether
civil or criminal), controversy, assessment, arbitration, investigation,
hearing, charge, complaint, demand, notice to proceeding to, from, by or before
any governmental authority (an "Action") instituted in any court of the United
States or any state thereof having jurisdiction over the parties and the matter
in addition to any other remedy to which it may be entitled, at law or in
equity. Each Partner further agrees that, in the event of any action for
specific performance in respect of such breach, it shall not

                                     - 17 -
<PAGE>

assert the defense that a remedy at law would be adequate.

      9.9   Governing Law. This Agreement shall be governed by, and interpreted
and enforced in accordance with, the laws of the State of Illinois, without
giving effect to the principles, policies or provisions relating to choice or
conflict of laws. To the extent the provisions of this Agreement are
inconsistent with the Uniform Partnership Act of the State of Illinois, the
provisions of this Agreement shall apply.

      9.10  Remedies. The parties hereto acknowledge and agree that, in the
event of an actual or prospective breach or default by any party hereto, the
other parties may not have an adequate remedy at law. Accordingly, in the event
of any such actual or prospective breach or default by any party, the other
parties shall be entitled to such equitable relief, including remedies in the
nature of injunction and specific performance, as may be available to restrain
any person from causing or participating in any such actual or prospective
breach or default. All remedies hereunder are cumulative and not exclusive, and
nothing herein shall be deemed to prohibit or limit any party from pursuing any
other remedy or relief available at law or in equity for such actual or
prospective breach or default, including the recovery of damages.

      9.11  Severability. The parties hereto intend that each provision hereof
constitute a separate agreement between them. Accordingly, the provisions hereof
are severable and in the event that any provision of this Agreement shall be
deemed invalid or unenforceable in any respect by a court of competent
jurisdiction, the remaining provisions hereof shall not be affected, but shall,
subject to the discretion of such court, remain in full force and effect, and
any invalid or unenforceable provision shall be deemed, without further action
on the part of the parties hereto, amended and limited to the extent necessary
to render the same valid and enforceable.

      9.12  Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original and which together shall constitute one and
the same instrument.

      9.13  Further Assurances; Duty of Good Faith. Each party hereto covenants
and agrees promptly to execute, deliver, file or record such agreements,
instruments, certificates and other documents and to do and perform such other
and further acts and things as any other party hereto, the Board or an
authorized officer of the Partnership may reasonably request or as may otherwise
be required by law or be necessary or proper to consummate and perfect the
transactions contemplated hereby. Each Partner further covenants and agrees to
act in good faith and in a manner it reasonably believes to be in the best
interests of the Partnership.

      9.14  Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.

      9.15  Assignment. Without the prior written consent of each other party
hereto, and except as otherwise provided herein, no party hereto may sell,
assign, transfer, mortgage, hypothecate or otherwise dispose of or encumber or
permit or suffer any encumbrance of any right, interest or

                                     - 18 -
<PAGE>

obligation hereunder, and any purported sale, assignment, transfer, mortgage,
hypothecation or other disposal of or encumbrance of any right, interest or
obligation hereunder without such consent shall be void and without effect.

      9.16  No Third Party Beneficiaries. Except as set forth in Section 7.2(a),
nothing in this Agreement, express or implied, is intended to confer upon any
other person any rights or remedies under or by reason of this Agreement except
as expressly set forth herein.

      9.17  Titles and Captions. The titles and captions of the Articles and
Sections of this Agreement are for convenience of reference only and do not in
any way define or interpret the intent of the parties or modify or otherwise
affect any of the provisions hereof.

      9.18  Grammatical Conventions. Whenever the context so requires, each
pronoun or verb used herein shall be construed in the singular or the plural
sense, and each pronoun used herein shall be construed in the masculine,
feminine or neuter sense.

      9.19  References. The terms "herein", "hereto", "hereof", "hereby", and
"hereunder" and other terms of similar import, refer to this Agreement as a
whole, and not to any Article, Section or other part hereof.

      9.20  Incorporation by Reference. The annexes and schedules hereto
constitute an integral part of this Agreement, an the information disclosed, or
terms and conditions provided therein are fully incorporated by reference
herein.

      9.21  Arbitration. Any dispute between the Partners, including the
interpretation or application of any provision of this Agreement shall be
submitted to binding arbitration in San Francisco, California in accordance with
the rules of the American Arbitration Association.

      9.22  Waiver of Partition. Each Partner hereby irrevocably waives, during
the term of the Partnership, any right that it may have to maintain any action
for partition with respect to any Partnership property.

      9.23  Entire Agreement. This Agreement embodies the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes any
prior agreement, commitment or arrangement relating thereto.

                                     - 19 -
<PAGE>

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

                                                ________________________________
                                                Frederick H. Kopko, Jr.

                                                ________________________________
                                                Joseph A. Czyzyk

                                     - 20 -