Document:

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                                                                    EXHIBIT 10.3

                        SECOND AMENDED AND RESTATED NOTE

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY IS SUBORDINATE IN THE MANNER AND
TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT, DATED AS OF
DECEMBER 30, 2002, BY AND AMONG THE MAKER HEREOF, THE PAYEE NAMED HEREIN, AND
FOOTHILL CAPITAL CORPORATION, AS SUCH AGREEMENT MAY BE AMENDED FROM TIME TO
TIME, AND EACH HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY
THE PROVISIONS OF SUCH SUBORDINATION AGREEMENT.

         THIS SECOND AMENDED AND RESTATED SENIOR SUBORDINATED NOTE (the "Second
Amended and Restated Note") is made as of this__________day of October, 2003 by
and among: (i) Mercury Air Group, Inc., a Delaware corporation (the "Company"),
and (ii) Allied Capital Corporation, a Maryland corporation, and its successors
and assigns (the "Holder").

                                    RECITALS:

                  A.       The Company issued to J.H.Whitney Mezzanine Fund,
L.P., a Delaware limited partnership ("WMF") an Amended and Restated Senior
Subordinated Note dated as of September 10, 1999 in the original principal
amount of Twenty Four Million and 00/100 Dollars ($24,000,000) (the "Original
Note") in connection with an investment made in the Company pursuant to the
terms and conditions of a Securities Purchase Agreement between the Company and
WMF dated as of September 10, 1999, as amended by Amendment No. 1 dated as of
September 30, 2000, Amendment No. 2 dated as of September 30, 2001 and Amendment
No. 3 dated as of December 30, 2002 (collectively, the "Purchase Agreement").

                  B.       WMF has assigned to the Holder all of its right,
title and interest in and to the Original Note and certain other securities of
the Company, and in connection therewith, the Company and Allied desire to amend
the Original Note and enter into Amendment No. 4 to the Purchase Agreement.

                  NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the parties hereto agree that the Original Note
shall be amended, restated, and consolidated in its entirety by this Second
Amended and Restated Note.

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                             MERCURY AIR GROUP, INC.

                     12% SENIOR SUBORDINATED PROMISSORY NOTE
                              DUE December 31, 2005

$24,000,000                                                   New York, New York
                                                              September 10, 1999

         FOR VALUE RECEIVED, the undersigned, MERCURY AIR GROUP, INC., a
corporation organized under the laws of Delaware (the "Borrower"), hereby
promises to pay to the order of ALLIED CAPITAL CORPORATION, a Maryland
corporation ("Allied"), or its registered assigns (the "Holder"), the principal
sum of Twenty Four Million Dollars ($24,000,000) on December 31, 2005 (the
"Maturity Date"), with interest thereon from time to time as provided herein.

         1. Purchase Agreement. This Senior Subordinated Promissory Note (the
"Note") is issued by the Borrower pursuant to the Securities Purchase Agreement
dated as of September 10, 1999 by and between the Borrower and Allied, as
assignee of WMF, as amended (the "Purchase Agreement"), and is subject to the
terms thereof. This Note, together with all other promissory notes issued under
the Purchase Agreement, and all promissory notes issued pursuant to paragraph 13
hereof or any provision of the Purchase Agreement are hereinafter referred to as
the "Notes." The Holder is entitled to the benefits of this Note and the
Purchase Agreement, as it relates to the Note, and may enforce the agreements of
the Borrower contained herein and therein and exercise the remedies provided for
hereby and thereby or otherwise available in respect hereto and thereto.
Capitalized terms used herein without definition are used herein with the
meanings ascribed to such terms in the Purchase Agreement.

         2. Interest.

                  (a)      Basic Interest. The Borrower promises to pay interest
on the principal amount of this Note at the rate of 12% per annum. The Borrower
shall pay accrued interest quarterly on each January 1, April 1, July 1, and
October 1 of each year, or, if any such date shall not be a Business Day, on the
next succeeding Business Day to occur after such date (each date upon which
interest shall be so payable, an "Interest Payment Date"). Interest on this Note
shall be paid by wire transfer of immediately available funds to an account at a
bank designated in writing by the Holder. In the absence of any such written
designation, any such Interest payment shall be deemed made on the date a check
in the applicable amount payable to the order of Holder is received by the
Holder at its last address as reflected in Borrower's note register; if no such
address appears, then to the Holder in care of the last address in such note
register of any predecessor holder of this Note (or its predecessor), In
addition to cash interest, during the period beginning on January 1, 2004 and
ending on June 30, 2004, the interest rate on this Note shall increase by a rate
of 1% per annum for each month. Interest in excess of 12% per annum shall accrue
and be added to principal, and shall not be payable in cash. This increase in
interest rate shall take effect on the last day of each month from January 31,
2004 through June 30, 2004, inclusive. Interest on this Note shall accrue from
and including the date of issuance through and

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until repayment of the principal and payment of all accrued interest in full.
Interest shall accrue and be computed on the basis of a 360-day year of twelve
30-day months.

                  (b)      Default Rate of Interest. Notwithstanding the
foregoing provisions of this Section 2, but subject to applicable law, any
overdue principal of and overdue interest on this Note shall bear interest,
payable on demand in immediately available funds, for each day from the date
payment thereof was due to the date of actual payment, at a rate equal to the
rate of interest otherwise in effect pursuant to the first sentence of this
Section 2 plus 2% per annum, and, upon and during the occurrence of an Event of
Default (as hereinafter defined), this Note shall bear interest, from the date
of the occurrence of such Event of Default until such Event of Default is cured
or waived, payable on demand in immediately available funds, at a rate equal to
the rate of interest otherwise in effect pursuant to the first sentence of this
Section 2 plus 2% per annum. Subject to applicable law, any interest that shall
accrue on overdue interest on this Note as provided in the preceding sentence
and shall not have been paid in full on or before the next Interest Payment Date
to occur after the Interest Payment Date on which the overdue interest became
due and payable shall itself be deemed to be overdue interest on this Note to
which the preceding sentence shall apply.

                  (c)      Maximum Interest. The maximum interest payable on
this Note pursuant to paragraphs (a) and (b) above is 18% per annum.

                  (d)      No Usurious Interest. In the event that any interest
rate provided for herein shall be determined to be unlawful, such interest rate
shall be computed at the highest rate permitted by applicable law. Any payment
by the Borrower of any interest amount in excess of that permitted by law shall
be considered a mistake, with the excess being applied to the principal of this
Note without prepayment premium or penalty; if no such principal amount is
outstanding, such excess shall be returned to Borrower.

         3. Mandatory Prepayment.

                  (a) Public Offerings. Subject to the Subordination Agreement
         dated December 30, 2002 among the Company, Allied, as assignee of WMF,
         and Foothill Capital Corporation (the "Subordination Agreement"), upon
         the consummation of a Public Offering (as hereinafter defined), the
         Borrower shall, at the election of the Holder, prepay the outstanding
         principal amount of this Note (together with interest accrued thereon)
         immediately following receipt by the Borrower, or any of its
         Subsidiaries of the Net Cash Proceeds of such Public Offering. For the
         purposes hereof, "Public Offering" means the sale by the Borrower, or
         any of its Subsidiaries of its equity securities (other than (i) stock
         options or warrants to acquire Common Stock awarded to employees and
         directors pursuant to incentive compensation plans or agreements with
         such Persons in an aggregate amount for all such options and warrants
         not to exceed $250,000 per annum, and (ii) stock issued to a seller
         party to, and as consideration for a Permitted Acquisition) pursuant to
         a registration statement (other than on Form S-4 or S-8) or otherwise
         under the Securities Act, including without limitation any offering
         which contemplates resale of the securities issued under Rule 144A
         under the Securities Act, in which the issuer receives any Net Cash
         Proceeds. For the purposes hereof, "Net Cash Proceeds" means (x)

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         the cash proceeds in respect of a Public Offering minus (y) all costs
         of sale, underwriting or brokerage costs and taxes paid or payable as a
         result thereof by the Borrower or any of its Subsidiaries. The
         foregoing notwithstanding, until all Senior Indebtedness to which this
         Note is subordinated shall be paid in full, the amount of Net Cash
         Proceeds which the Borrower shall be obligated to pay under this
         Section 3(a) to the Holder as a prepayment of this Note at the election
         of the Holder, shall be limited as set forth in the Subordination
         Agreement.

                  (b) Change of Control. Subject to the Subordination Agreement
         upon the occurrence of a Change of Control (as hereinafter defined),
         the Borrower shall, at the election of the Holder, prepay the
         outstanding principal amount of this Note (together with interest
         accrued thereon), within five Business Days after the occurrence of
         such Change of Control. For the purposes hereof, "Change of Control"
         means (i) any transaction or series of transactions in which any Person
         or group, other than WMF, CFK Partners or any of their respective
         affiliates becomes the beneficial owner of 35% or more of the then
         outstanding capital stock of the Borrower or of any of its
         Subsidiaries, the operations of which would constitute a material part
         of the business or operations of the Borrower and all of its
         Subsidiaries, taken as a whole, (ii) the sale of all or substantially
         all of the assets of the Borrower or of any of its Subsidiaries, the
         operations of which would constitute a material part of the business or
         operations of the Borrower and all of its Subsidiaries, taken as a
         whole, (iii) the liquidation of the Borrower or any of its
         Subsidiaries, the operations of which would constitute a material part
         of the business or operations of the Borrower and all of its
         Subsidiaries, taken as a whole, other than transactions defined as
         Permitted Financing Transactions in, and entered into in compliance
         with, the Purchase Agreement, and/or (iv) the combination of the
         Borrower or of any of its Subsidiaries, the operations of which would
         constitute a material part of the business or operations of the
         Borrower and all of its Subsidiaries, taken as a whole, with another
         entity, as a result of which (A) any Person or group, other than WMF,
         CFK Partners or any of their respective affiliates becomes the
         beneficial owner of 35% or more of the then outstanding capital stock
         of the combined entity or (B) the directors of the Borrower or such
         Subsidiary, as the case may be, constitute less than a majority of the
         Board of Directors of the combined entity.

                  (c) Notice. The Borrower shall give written notice to the
         Holder of any mandatory prepayment pursuant to this Section 3 at least
         five Business Days prior to the date of such prepayment. Such notice
         shall be given in the manner specified in Section 7.2 of Amendment No.
         4 to the Purchase Agreement.

         4. Optional Prepayment.

                  (a) Upon notice given to the Holder as provided in Section
         4(b), the Borrower, at its option, may, at any time prepay all or any
         portion of the principal amount of this Note at any time, by paying to
         the Holder an amount equal to the principal amount to be repaid
         together with interest accrued and unpaid thereon to the date fixed for
         such prepayment, and reasonable out-of-pocket costs and expenses
         (including, without limitation, reasonable fees, charges and
         disbursements of counsel), if any, associated with such

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         prepayment; provided, however, each prepayment of less than the full
         outstanding balance of the principal amount of this Note shall be in an
         aggregate principal amount of this Note of $1,000,000 or integral
         multiples of $100,000 in excess thereof, and provided, further, that
         unless this Note and all Notes shall be paid in full, the aggregate
         principal balance of the Notes outstanding at any time shall be at
         least $500,000. No prepayment penalty or premium shall apply in respect
         of any optional prepayment made in accordance with this paragraph.

                  (b) The Borrower may give written notice of prepayment of this
         Note or any portion thereof not less than 10 nor more than 60 days
         prior to the date fixed for such prepayment. Such notice of prepayment
         shall be given in the manner specified in Section 7.2 of Amendment No.
         4 of the Purchase Agreement (except that no notice shall be required in
         connection with the consummation of the transactions contemplated by
         the Stock Purchase Agreement). Upon notice of prepayment being given by
         the Borrower, the Borrower covenants and agrees that it will prepay, on
         the date therein fixed for prepayment, this Note or the portion hereof
         so called for prepayment, at the outstanding principal amount thereof
         or the portion thereof so called for prepayment, together with interest
         accrued and unpaid thereon to the date fixed for such prepayment,
         together with the costs and expenses referred to in Section 4(a).

                  (c) All optional prepayments under this Section 4 shall
         include payment of accrued interest on the principal amount so prepaid
         and shall be applied first to all costs, expenses and indemnities
         payable under the Purchase Agreement, then to payment of default
         interest, if any, then to payment of accrued interest, and thereafter
         to principal.

         5. Amendment. Amendments and modifications of this Note may be made
only in the manner provided in Section 11.4 of the Purchase Agreement.

         6. Defaults and Remedies.

                  (a) Events of Default. An "Event of Default" shall occur if:

                           (i)      the Borrower shall default in the payment of
                  the principal of this Note, when and as the same shall become
                  due and payable, whether at maturity or at a date fixed for
                  prepayment or by acceleration or otherwise; or

                           (ii)     the Borrower shall default in the payment of
                  any installment of interest on this Note according to its
                  terms, when and as the same shall become due and payable and
                  such default shall continue for a period of 5 days; or

                           (iii)    the Borrower shall default in the due
                  observance or performance of any covenant to be observed or
                  performed pursuant to Sections 8-1, 8.2(a), 8.3, 8.8, 8.10,
                  8.11 or Article 9 of the Purchase Agreement, and provided,
                  however, that a default under Article 9 which does not or is
                  not likely to have a material adverse effect on the Condition
                  of the Company shall become an Event of Default only if such
                  default shall continue for a period of 10 days; or

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                           (iv)     the Borrower or any of its Subsidiaries
                  shall default in the due observance or performance of any
                  other covenant, condition or agreement on the part of the
                  Borrower or any of its Subsidiaries to be observed or
                  performed pursuant to the terms hereof or pursuant to the
                  terms of the Purchase Agreement or any of the Transaction
                  Documents (other than those referred to in clauses (i), (ii)
                  or (iii) of this Section 6(a)), and such default shall
                  continue for 30 days after the earliest of (A) the date the
                  Borrower is required pursuant to the Transaction Documents or
                  otherwise to give notice thereof to the Holder (whether or not
                  such notice is actually given) or (B) the date of written
                  notice thereof, specifying such default and, if such default
                  is capable of being remedied, requesting that the same be
                  remedied, shall have been given to the Borrower by the Holder;
                  or

                           (v)      any representation, warranty or
                  certification made by or on behalf of the Borrower or any of
                  its Subsidiaries in the Purchase Agreement, this Note, the
                  Transaction Documents or in any certificate or other document
                  delivered pursuant hereto or thereto shall have been incorrect
                  when made; or

                           (vi)     any event or condition shall occur that
                  results in the acceleration of the maturity of any
                  Indebtedness of the Borrower or any of its Subsidiaries, in a
                  principal amount aggregating $100,000 or more; or

                           (vii)    an involuntary proceeding shall be commenced
                  or an involuntary petition shall be filed in a court of
                  competent jurisdiction seeking (a) relief in respect of the
                  Borrower or any of its Subsidiaries, or of a substantial part
                  of its property or assets, under Title 11 of the United States
                  Code, as now constituted or hereafter amended, or any other
                  Federal or state bankruptcy, insolvency, receivership or
                  similar law, (b) the appointment of a receiver, trustee,
                  custodian, sequestrator, conservator or similar official for
                  the Borrower or any of its Subsidiaries, or for a substantial
                  part of its property or assets, or (c) the winding up or
                  liquidation of the Borrower or any Subsidiary; and such
                  proceeding or petition shall continue undismissed for 60 days,
                  or an order or decree approving or ordering any of the
                  foregoing shall be entered; or

                           (viii)   the Borrower or any of its Subsidiaries
                  shall (a) voluntarily commence any proceeding or file any
                  petition seeking relief under Title 11 of the United States
                  Code, as now constituted or hereafter amended, or any other
                  Federal or state bankruptcy, insolvency, receivership or
                  similar law, (b) consent to the institution of, or fail to
                  contest in a timely and appropriate manner, any proceeding or
                  the filing of any petition described in paragraph (vii) of
                  this Section 6(a), (c) apply for or consent to the appointment
                  of a receiver, trustee, custodian, sequestrator, conservator
                  or similar official for the Borrower or any of its
                  Subsidiaries, or for a substantial part of their property or
                  assets, (d) file an answer admitting the material allegations
                  of a petition filed against it in any such proceeding, (e)
                  make a general assignment for the benefit of creditors, (f)
                  become unable, admit in writing its inability or fail
                  generally to pay its debts as they

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                  become due or (g) take any action for the purpose of effecting
                  any of the foregoing; or

                           (ix)     one or more judgments for the payment of
                  money in an aggregate amount in excess of $500,000 (to the
                  extent not covered by insurance) shall be rendered against the
                  Borrower or any of its Subsidiaries and the same shall remain
                  undischarged for a period of 30 days during which execution
                  shall not be effectively stayed, or any action shall be
                  legally taken by a judgment creditor to levy upon assets or
                  properties of the Borrower or any of its Subsidiaries to
                  enforce any such judgment.

                  (b) Acceleration. If an Event of Default occurs under Section
         6(a)(vii) or (viii), then the outstanding principal of and all accrued
         interest on this Note shall automatically become immediately due and
         payable, without presentment, demand, protest or notice of any kind,
         all of which are hereby expressly waived. If any other Event of Default
         occurs and is continuing, the Holder, by written notice to the
         Borrower, may declare the principal of and accrued interest on this
         Note to be immediately due and payable. Upon such declaration, such
         principal and interest shall become immediately due and payable. The
         Holder may rescind an acceleration and its consequences if all existing
         Events of Default have been cured or waived, except nonpayment of
         principal or interest that has become due solely because of the
         acceleration, and if the rescission would not conflict with any
         judgment or decree. Any notice or rescission shall be given in the
         manner specified in Section 7.2 of Amendment No. 4 to the Purchase
         Agreement.

         7. Suits for Enforcement.

                  (a) Subject to the Subordination Agreement upon the occurrence
         of any one or more Events of Default, the Holder of this Note may
         proceed to protect and enforce its rights hereunder by suit in equity,
         action at law or by other appropriate proceeding, whether for the
         specific performance of any covenant or agreement contained in the
         Purchase Agreement or this Note or in aid of the exercise of any power
         granted in the Purchase Agreement or this Note, or may proceed to
         enforce the payment of this Note, or to enforce any other legal or
         equitable right of the Holders of this Note.

                  (b) In case of any default under this Note, the Borrower will
         pay to the Holder such amounts as shall be sufficient to cover the
         costs and expenses of such Holder due to such default, as provided in
         Article 7 of the Purchase Agreement.

         8. Remedies Cumulative. No remedy herein conferred upon the Holder is
intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.

         9. Remedies Not Waived. No course of dealing between the Borrower and
the Holder or any delay on the part of the Holder in exercising any rights
hereunder shall operate as a waiver of any right.

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         10. Transfer.

                  (a) The term "Holder" as used herein shall also include any
         transferee of this Note whose name has been recorded by the Borrower in
         the Note Register (as defined). Each transferee of this Note
         acknowledges that this Note has not been registered under the
         Securities Act, and may be transferred only pursuant to an effective
         registration under the Securities Act or pursuant to an applicable
         exemption from the registration requirements of the Securities Act.

                  (b) The Borrower shall maintain a register (the "Note
         Register") in its principal offices for the purpose of registering the
         Note and any transfer or partial transfer thereof, which register shall
         reflect and identify, at all times, the ownership of record of any
         interest in the Note. Upon the issuance of this Note, the Borrower
         shall record the name and address of the initial purchaser of this Note
         in the Note Register as the first Holder. Upon surrender for
         registration of transfer or exchange of this Note at the principal
         offices of the Borrower, the Borrower shall, at its expense, execute
         and deliver one or more new Notes of like tenor and of denominations of
         at least $500,000 (except as may be necessary to reflect any principal
         amount not evenly divisible by $500,000 of a like aggregate principal
         amount, registered in the name of the Holder or a transferee or
         transferees. Every Note surrendered for registration of transfer or
         exchange shall be duly endorsed, or be accompanied by written
         instrument of transfer duly executed by the Holder of such Note or such
         holder's attorney duly authorized in writing.

                  (c) This Note may be transferred or assigned, in whole or in
         part, by the Holder at any time, except that Holder agrees not to
         transfer this Note or any interest therein so long as the Stock
         Purchase Agreement is in effect.

         11. Replacement of Note. On receipt by the Borrower of an affidavit of
an authorized representative of the Holder stating the circumstances of the
loss, theft, destruction or mutilation of this Note (and in the case of any such
mutilation, on surrender and cancellation of such Note), the Borrower, at its
expense, will promptly execute and deliver, in lieu thereof, a new Note of like
tenor. If required by the Borrower, such Holder must provide indemnity
sufficient in the reasonable judgment of the Borrower to protect the Borrower
from any loss which they may suffer if a lost, stolen or destroyed Note is
replaced.

         12. No Novation. All of the terms, covenants and conditions of the
Original Note shall continue, except as specifically amended and restated
hereby. This Note does not extinguish the outstanding indebtedness and is not
intended to be a substitution or novation of the original indebtedness or
instruments evidencing the same, all of which shall continue in full force and
effect except as specifically amended and restated hereby or by instruments
executed concurrently herewith.

         13. Covenants Bind Successors and Assigns. All the covenants,
stipulations, promises and agreements in this Note contained by or on behalf of
the Borrower shall bind its successors and assigns, whether so expressed or not.

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         14. Notices. All notices, demands and other communications provided for
or permitted hereunder shall be made in writing and shall be by registered or
certified first-class mail, return receipt requested, facsimile (with receipt
confirmed), courier service or personal delivery at the addresses specified in
Section 7.2 of Amendment No. 4 to the Purchase Agreement. All such notices and
communications shall be deemed to have been duly given when: delivered by hand,
if personally delivered; when delivered by courier, if delivered by commercial
overnight courier service; if mailed, five Business Days after being deposited
in the mail, postage prepaid; or if sent by facsimile, when receipt is
acknowledged.

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

         16. Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.

         17. Headings. The headings in this Note are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

                                    MERCURY AIR GROUP, INC.

                                    By: -s- [ILLEGIBLE]
                                    ---------------------------------------
                                    Name: [ILLEGIBLE]
                                    Title: VP

                                      - 9 -<PAGE>

                                                                    EXHIBIT 10.4

                       SECOND AMENDED AND RESTATED WARRANT

                                 October _, 2003

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH
ACT AND SUCH LAWS.

                                                     Warrant to Purchase 226,407
                                                     Shares of Common Stock

                             MERCURY AIR GROUP, INC.

                          COMMON STOCK PURCHASE WARRANT

                          Void after September 9, 2006

         Mercury Air Group, Inc. (the "Company"), a Delaware corporation, hereby
certifies that for value received, Allied Capital Corporation, a Maryland
corporation ("Allied"), or its successors or assigns (the "Holder"), is entitled
to purchase, subject to the terms and conditions hereinafter set forth, an
aggregate of 226,407 fully paid and nonassessable shares of Common Stock (as
hereinafter defined) of the Company, at an exercise price of $6.08 per share
(the "Purchase Price"), subject to adjustment as provided herein, at any time or
from time to time beginning on the date hereof and prior to 5:00 P.M., New York
City time, on September 9, 2006 (the "Expiration Date").

         This Second Amended and Restated Warrant amends and restates the
Warrant issued pursuant to the Securities Purchase Agreement (the "Purchase
Agreement"), dated as of September 10, 1999, between Mercury Air Group, Inc. and
WMF, as amended, and is subject to the terms thereof. Capitalized terms used
herein and not otherwise defined shall have the respective meanings assigned to
such terms in the Purchase Agreement. The Holder is entitled to the rights and
subject to the obligations contained in the Purchase Agreement, the
Stockholders' Agreement and the Registration Rights Agreement relating to this
Warrant and the shares of Common Stock issuable upon exercise of this Warrant.

         1.       DEFINITIONS. For the purposes of this Warrant, the following
terms shall have the meanings indicated:

         "Applicable Price" shall mean the higher of (a) the Current Market
Price per share of Common Stock on the applicable record or other relevant date
and (b) the Dilution Price.

         "Business Day" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in the City of New York are authorized or
required by law or executive order to close.

<PAGE>

         "Closing Price" shall mean, with respect to each share of Common Stock
for any day, (a) the last reported sale price regular way or, in case no such
sale takes place on such day, the average of the closing bid and asked prices
regular way, in either case as reported on the principal national securities
exchange on which the Common Stock is listed or admitted for trading or (b) if
the Common Stock is not listed or admitted for trading on any national
securities exchange, the last reported sale price or, in case no such sale takes
place on such day, the average of the highest reported bid and the lowest
reported asked quotation for the Common Stock, in either case as reported on the
NASDAQ or a similar service if NASDAQ is no longer reporting such information.

         "Common Stock" means the common stock, par value $.01 per share, of the
Company, and any class of stock resulting from successive changes or
reclassification of such Common Stock.

         "Company" has the meaning ascribed to such term in the first paragraph
of this Warrant.

         "Current Market Price" shall be determined in accordance with
Subsection 3(e).

         "Dilution Price" shall mean, with respect to each share of Common
Stock, $7.484, subject to appropriate adjustment for events described in
Subsection 3(a).

         "Exercise Date" has the meaning ascribed to such term in Subsection
2(d).

         "Expiration Date" has the meaning ascribed to such term in the first
paragraph of this Warrant.

         "Holder" has the meaning ascribed to such term in the first paragraph
and Section 9 of this Warrant.

         "Issued Warrant Shares" means any shares of Common Stock issued upon
exercise of the Warrant.

         "NASDAQ" shall mean the Automatic Quotation System of the National
Association of Securities Dealers, Inc.

         "Person" shall mean any individual, firm, corporation, limited
liability company, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind, and shall include
any successor (by merger or otherwise) of such entity.

         "Purchase Agreement" has the meaning ascribed to such term in the
second paragraph of this Warrant.

         "Purchase Price" has the meaning ascribed to such term in the first
paragraph of this Warrant.

         "Stockholders' Agreement" means the Stockholders' Agreement
substantially in the form attached to the Purchase Agreement as Exhibit E.

~Allied Warrant

                                       2

<PAGE>

         "Warrant" shall mean this Warrant and any subsequent Warrant issued
pursuant to the terms of this Warrant.

         "Warrant Register" has the meaning ascribed to such term in Subsection
9(c).

         2.       EXERCISE OF WARRANT.

                  (a)      Exercise. This Warrant may be exercised, in whole or
in part, at any time or from time to time during the period beginning on the
date hereof and ending on the Expiration Date, by surrendering to the Company at
its principal office this Warrant, with the form of Election to Purchase Shares
(the "Election to Purchase Shares") attached hereto as Exhibit A duly executed
by the Holder and accompanied by payment of the Purchase Price for the number of
shares of Common Stock specified in such form.

                  (b)      Delivery of Shares; Payment of Purchase Price. As
soon as practicable after surrender of this Warrant and receipt of payment, the
Company shall promptly issue and deliver to the Holder a certificate or
certificates for the number of shares of Common Stock set forth in the Election
to Purchase Shares, in such name or names as may be designated by such Holder,
along with a check for the amount of cash to be paid in lieu of issuance of
fractional shares, if any. Payment of the Purchase Price may be made as follows
(or by any combination of the following): (i) in United States currency by cash
or delivery of a certified check, bank draft or postal or express money order
payable to the order of the Company, (ii) by assigning to the Company all or any
part of the unpaid principal amount of the WMF Note held by the Holder in a
principal amount equal to the Purchase Price, (iii) by surrender of a number of
shares of Common Stock held by the Holder equal to the quotient obtained by
dividing (A) the Purchase Price payable with respect to the portion of this
Warrant then being exercised by (B) the Current Market Price per share of Common
Stock on the Exercise Date, or (iv) by cancellation of any portion of this
Warrant with respect to the number of shares of Common Stock equal to the
quotient obtained by dividing (A) the aggregate Purchase Price payable with
respect to the portion of this Warrant then being exercised by (B) the
difference between (1) Current Market Price per share of Common Stock on the
Exercise Date, and (2) the Purchase Price per share of Common Stock.

                  (c)      Partial Exercise. If this Warrant is exercised for
less than all of the shares of Common Stock purchasable under this Warrant, the
Company shall cancel this Warrant upon surrender hereof and shall execute and
deliver to the Holder a new Warrant of like tenor for the balance of the shares
of Common Stock purchasable hereunder.

                  (d)      When Exercise Effective. The exercise of this Warrant
shall be deemed to have been effective immediately prior to the close of
business on the Business Day on which this Warrant is surrendered to and the
Purchase Price is received by the Company as provided in this Section 2 (the
"Exercise Date") and the Person in whose name any certificate for shares of
Common Stock shall be issuable upon such exercise, as provided in Subsection
2(b), shall be deemed to be the record holder of such shares of Common Stock for
all purposes on the Exercise Date.

                  (e)      Issued Warrant Shares Fully Paid, Nonassessable. The
Company shall take

~Allied Warrant

                                       3

<PAGE>

all actions necessary to ensure that following exercise of this Warrant in
accordance with the provisions of this Section 2, the Issued Warrant Shares
issued hereunder shall, without further action by the Holder, be fully paid and
nonassessable.

                  (f)      Continued Validity. A Holder of shares of Common
Stock issued upon the exercise of this Warrant, in whole or in part, shall
continue to be entitled to all of the rights and subject to all of the
obligations set forth in Section 9.

         3.       ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The
Purchase Price and the number of shares of Common Stock issuable upon exercise
of this Warrant shall be adjusted from time to time upon the occurrence of the
following events:

                  (a)      Dividend, Subdivision, Combination or
Reclassification of Common Stock. If the Company shall, at any time or from time
to time, (i) declare a dividend on the Common Stock payable in shares of its
capital stock (including Common Stock), (ii) subdivide the outstanding Common
Stock into a larger number of shares of Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares of its Common Stock, or
(iv) issue any shares of its capital stock in a reclassification of the Common
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation), then in each such
case, the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock issuable on
such date shall be proportionately adjusted so that the Holder of any Warrant
exercised after such date shall be entitled to receive, upon payment of the same
aggregate amount as would have been payable before such date, the aggregate
number and kind of shares of capital stock which, if such Warrant had been
exercised immediately prior to such date, such Holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. Any such adjustment shall become effective
immediately after the record date of such dividend or the effective date of such
subdivision, combination or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur. If a dividend is
declared and such dividend is not paid, the Purchase Price shall again be
adjusted to be the Purchase Price in effect immediately prior to such record
date (giving effect to all adjustments that otherwise would be required to be
made pursuant to this Section 3 from and after such record date).

                  (b)      Issuance of Rights to Purchase Common Stock Below
Current Market Price or Dilution Price. If the Company shall, at any time or
from time to time, fix a record date for the issuance of rights, options or
warrants to all holders of Common Stock entitling them to subscribe for or
purchase Common Stock, or securities convertible into Common Stock at a price
per share of Common Stock or having a conversion price per share of Common Stock
if a security is convertible into Common Stock (determined in either such case
by dividing (x) the total consideration payable to the Company upon exercise,
conversion or exchange of such rights, options, warrants or other securities
convertible into Common Stock by (y) the total number of shares of Common Stock
covered by such rights, options, warrants or other securities convertible into
Common Stock) which is lower than either the Current Market Price per share of
Common Stock on such record date (or, if an ex-dividend date has been
established for such record date, on the day next preceding such ex-dividend
date) or the Dilution Price, then, the

~Allied Warrant

                                        4

<PAGE>

Purchase Price shall be reduced to the price determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the sum of the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of Common
Stock which the aggregate offering price of the total number of shares of Common
Stock so to be offered (or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at the Applicable Price
and the denominator of which shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of Common
Stock to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such price for
subscription or purchase may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be
determined in good faith by the Board of Directors of the Company. Any such
adjustment shall become effective immediately after the record date for such
rights or warrants. Such adjustment shall be made successively whenever such a
record date is fixed. If such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to the Purchase Price that otherwise would be
in effect but for the fact such record date was fixed (giving effect to all
adjustments that otherwise would be required to be made pursuant to this Section
3 from and after such record date).

                  (c)      Certain Distributions. If the Company shall, at any
time or from time to time, fix a record date for the distribution to all holders
of Common Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing corporation) of
evidences of indebtedness, assets or other property (other than regularly
scheduled cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or dividends payable in capital stock for which
adjustment is made under Subsection 3(a)) or subscription rights, options or
warrants (excluding those referred to in Subsection 3(b)), then the Purchase
Price shall be reduced to the price determined by multiplying the Purchase Price
in effect immediately prior to such record date by a fraction (which shall in no
event be less than zero), the numerator of which shall be the Current Market
Price per share of Common Stock on such record date (or, if an ex-dividend date
has been established for such record date, on the next day preceding such
ex-dividend date), less the fair market value (as determined in good faith by
the Board of Directors of the Company) of the portion of the assets, evidences
of indebtedness, other property, subscription rights or warrants so to be
distributed applicable to one share of Common Stock and the denominator of which
shall be such Current Market Price per share of Common Stock. Any such
adjustment shall become effective immediately after the record date for such
distribution. Such adjustments shall be made successively whenever such a record
date is fixed. In the event that such distribution is not so made, the Purchase
Price shall be adjusted to the Purchase Price in effect immediately prior to
such record date (giving effect to all adjustments that otherwise would be
required to be made pursuant to this Section 3 from and after such record date).

                  (d)      Issuance of Common Stock Below Current Market Price
or Dilution Price.

                           (i)      If the Company shall, at any time and from
time to time, after the date hereof, directly or indirectly, sell or issue
shares of Common Stock (regardless of whether originally issued or from the
Company's treasury), or rights, options, warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase shares of Common
Stock) at a price per share of Common Stock (determined, in the case of rights,
options, warrants

~Allied Warrant

                                        5

<PAGE>

or convertible or exchangeable securities, by dividing (x) the total
consideration received or receivable by the Company in consideration of the sale
or issuance of such rights, options, warrants or convertible or exchangeable
securities, plus the total consideration payable to the Company upon exercise or
conversion or exchange thereof, by (y) the total number of shares of Common
Stock covered by such rights, options, warrants or convertible or exchangeable
securities) which is lower than either the Current Market Price per share of
Common Stock or the Dilution Price immediately prior to such sale or issuance,
then, subject to clause 3(d)(ii), the Purchase Price shall be reduced to a price
determined by multiplying the Purchase Price in effect immediately prior thereto
by a fraction, the numerator of which shall be the sum of the number of shares
of Common Stock outstanding immediately prior to such sale or issuance plus the
number of shares of Common Stock which the aggregate consideration received
(determined as provided below) for such sale or issuance would purchase at the
Applicable Price and the denominator of which shall be the total number of
shares of Common Stock outstanding immediately after such sale or issuance. Such
adjustment shall be made successively whenever such sale or issuance is made.
For the purposes of such adjustments, the shares of Common Stock which the
holder of any such rights, options, warrants, or convertible or exchangeable
securities shall be entitled to subscribe for or purchase shall be deemed to be
issued and outstanding as of the date of such sale or issuance and the
consideration "received" by the Company therefor shall be deemed to be the
consideration actually received or receivable by the Company (plus any
underwriting discounts or commissions in connection therewith) for such rights,
options, warrants or convertible or exchangeable securities, plus the
consideration stated in such rights, options, warrants or convertible or
exchangeable securities to be payable to the Company for the shares of Common
Stock covered thereby. If the Company shall sell or issue shares of Common Stock
for a consideration consisting, in whole or in part, of property other than cash
or its equivalent, then in determining the "price per share of Common Stock" and
the "consideration" received or receivable by or payable to the Company for
purposes of the first sentence and the immediately preceding sentence of this
Subsection 3(d), the fair value of such property shall be determined in good
faith by the Board of Directors of the Company. The determination of whether any
adjustment is required under this Subsection 3(d) by reason of the sale and
issuance of rights, options, warrants or convertible or exchangeable securities
and the amount of such adjustment, if any, shall be made only at the time of
such issuance or sale and not at the subsequent time of issuance of shares of
Common Stock upon the exercise of such rights to subscribe or purchase.

                           (ii)     No adjustment shall be made to the Purchase
Price pursuant to clause 3(d)(i) in connection with the issuance of (A) shares
issued upon exercise of this Warrant; or (B) options to purchase an aggregate of
70,847 shares of Common Stock granted on or after December 30, 2002, if such
shares would otherwise be included in clause 3(d)(i).

                           (iii)    Notwithstanding any provision in Section 3
to the contrary and without limitation to any other provision contained in
Section 3, in the event any securities of the Company (other than this Warrant),
including, without limitation, those securities set forth as exceptions in
Subsection 3(d)(ii) (for purposes of this Subsection, collectively, the "Subject
Securities"), are amended or otherwise modified by operation of its terms or
otherwise (including, without limitation, by operation of such Subject
Securities' anti-dilution provisions, other than anti-dilution provisions
substantially similar to those set forth in Subsection 3(d)(i)) in any manner
whatsoever that results in (i) the reduction of the exercise, conversion or
exchange

~Allied Warrant

                                        6

<PAGE>

price of such Subject Securities payable upon the exercise for, or conversion or
exchange into, Common Stock or other securities exercisable for, or convertible
or exchangeable into, Common Stock and/or (ii) such Subject Securities becoming
exercisable for, or convertible or exchangeable into (A) more shares or dollar
amount of such Subject Securities which are, in turn exercisable for, or
convertible or exchangeable into, Common Stock, or (B) more shares of Common
Stock, then such amendment or modification shall be treated for purposes of
Section 3 as if the Subject Securities which have been amended or modified have
been terminated and new securities have been issued with the amended or modified
terms. The Company shall make all necessary adjustments (including successive
adjustments if required) to the Purchase Price in accordance with Section 3, but
in no event shall the Purchase Price be greater than it was immediately prior to
the application of this Subsection to the transaction in question. On the
expiration or termination of any such amended or modified Subject Securities for
which adjustment has been made pursuant to the operation of the provisions of
this Subsection under Section 3(b) or 3(d), as the case may be, without such
Subject Securities having been exercised, converted or exchanged in full
pursuant to their terms, the adjusted Purchase Price shall be appropriately
readjusted in the manner specified in such Section.

                           (e)      Determination of Current Market Price. For
the purpose of any computation under Subsections (b), (c) or (d) of this Section
3 or any other provision of this Warrant, the Current Market Price per share of
Common Stock on any date shall be deemed to be the average of the daily Closing
Prices per share of Common Stock for the 10 consecutive trading days commencing
15 trading days before such date. If on any such date the shares of Common Stock
are not listed or admitted for trading on any national securities exchange or
quoted by NASDAQ or a similar service, then the Company, on the one hand, and
Allied on the other hand, shall each promptly appoint as an appraiser an
individual who shall be a member of a nationally recognized investment banking
firm. Each appraiser shall be instructed to, within 30 days of appointment,
determine the Current Market Price per share of Common Stock which shall be
deemed to be equal to the fair market value per share of Common Stock as of such
date. If the two appraisers are unable to agree on the Current Market Price per
share of Common Stock within such 30 day period, then the two appraisers, within
10 days after the end of such 30 day period shall jointly select a third
appraiser. The third appraiser shall, within 30 days of its appointment,
determine, in good faith, the Current Market Price per share of Common Stock and
such determination shall be controlling. If any party fails to appoint an
appraiser or if one of the two initial appraisers fails after appointment to
submit its appraisal within the required period, the appraisal submitted by the
remaining appraiser shall be controlling. The cost of the foregoing appraisals
shall be shared one-half by the Company and one-half by Allied, provided,
however, in the event a third appraiser is utilized and one of the two initial
appraisals (but not the other initial appraisal) is greater than or less than
the appraisal by such third appraiser by 10% or more, then the cost of all of
the foregoing appraisals shall be borne by the party who appointed the appraiser
who made such initial appraisal.

                           (f)      De Minimis Adjustments. No adjustment in the
Purchase Price shall be made if the amount of such adjustment would result in a
change in the Purchase Price per share of less than $0.05, but in such case any
adjustment that would otherwise be required to be made shall be carried forward
and shall be made at the time of and together with the next subsequent
adjustment, which together with any adjustment so carried forward, would result
in a change in the Purchase Price of $0.05 per share or more. If the Company
shall, at any time or from time to

~Allied Warrant

                                        7

<PAGE>

time, issue Common Stock by way of dividends on any stock of the Company or
subdivide or combine the outstanding shares of the Common Stock, such amount of
$0.05 (as theretofore increased or decreased, if such amounts shall have been
adjusted in accordance with the provisions of this clause) shall forthwith be
proportionately increased in the case of a combination or decreased in the case
of a subdivision or stock dividend so as appropriately to reflect the same.
Notwithstanding the provisions of the first sentence of this Subsection 3(f),
any adjustment postponed pursuant to this Subsection 3(f) shall be made no later
than the earlier of (i) three years from the date of the transaction that would,
but for the provisions of the first sentence of this Section 3(f), have required
such adjustment, (ii) an Exercise Date or (iii) the Expiration Date.

                           (g)      Adjustments to Other Shares. In the event
that at any time, as a result of an adjustment made pursuant to Subsection 3(a),
the Holder shall become entitled to receive, upon exercise of this Warrant, any
shares of capital stock of the Company other than shares of Common Stock, the
number of such other shares so receivable upon exercise of this Warrant shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares of Common
Stock contained in Subsections 3(a), (b), (c) and (d), inclusive, and the
provisions of Sections 2, 5, 6 and 7 with respect to the shares of Common Stock
shall apply on like terms to any such other shares.

                           (h)      Adjustment of Number of Shares Issuable Upon
Exercise. Upon each adjustment of the Purchase Price as a result of the
calculations made in Subsections 3(a), (b), (c) or (d), this Warrant shall
thereafter evidence the right to receive, at the adjusted Purchase Price, that
number of shares of Common Stock (calculated to the nearest one-hundredth)
obtained by dividing (x) the product of the aggregate number of shares of Common
Stock covered by this Warrant immediately prior to such adjustment and the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price by (y) the Purchase Price in effect immediately after such adjustment of
the Purchase Price.

                           (i)      Reorganization, Reclassification, Merger and
Sale of Assets. If there occurs any capital reorganization or any
reclassification of the Common Stock of the Company, the consolidation or merger
of the Company with or into another Person (other than a merger or consolidation
of the Company in which the Company is the continuing corporation and which does
not result in any reclassification or change of outstanding shares of its Common
Stock) or the sale or conveyance of all or substantially all of the assets of
the Company to another Person, then the Holder will thereafter be entitled to
receive, upon the exercise of this Warrant in accordance with the terms hereof,
the same kind and amounts of securities (including shares of stock) or other
assets, or both, which were issuable or distributable to the holders of
outstanding Common Stock of the Company upon such reorganization,
reclassification, consolidation, merger, sale or conveyance, in respect of that
number of shares of Common Stock then deliverable upon the exercise of this
Warrant if this Warrant had been exercised immediately prior to such
reorganization, reclassification, consolidation, merger, sale or conveyance;
and, in any such case, appropriate adjustments (as determined in good faith by
the Board of Directors of the Company) shall be made to assure that the
provisions hereof (including provisions with respect to changes in, and other
adjustments of, the Purchase Price) shall thereafter be applicable, as nearly as
reasonably may be practicable, in relation to any securities or other assets
thereafter deliverable upon exercise of this Warrant.

~Allied Warrant

                                        8

<PAGE>

         4.       CERTIFICATE AS TO ADJUSTMENTS. Whenever the Purchase Price and
the number of shares of Common Stock issuable, or the securities or other
property deliverable, upon the exercise of this Warrant shall be adjusted
pursuant to the provisions hereof, the Company shall promptly give written
notice thereof to the Holder, in accordance with Section 13, in the form of a
certificate signed by the Chairman of the Board, President or one of the Vice
Presidents of the Company, and by the Chief Financial Officer, Treasurer or one
of the Assistant Treasurers of the Company, stating the adjusted Purchase Price,
the number of shares of Common Stock issuable, or the securities or other
property deliverable, upon exercise of the Warrant and setting forth in
reasonable detail the method of calculation and the facts requiring such
adjustment and upon which such calculation is based. Each adjustment shall
remain in effect until a subsequent adjustment is required.

         5.       FRACTIONAL SHARES. Notwithstanding an adjustment pursuant to
Section 3(h) in the number of shares of Common Stock covered by this Warrant or
any other provision of this Warrant, the Company shall not be required to issue
fractions of shares upon exercise of this Warrant or to distribute certificates
which evidence fractional shares. In lieu of fractional shares, the Company may
make payment to the Holder, at the time of exercise of this Warrant as herein
provided, of an amount in cash equal to such fraction multiplied by the greater
of the Current Market Price of a share of Common Stock on the Exercise Date and
the Dilution Price.

         6.       NOTICE OF PROPOSED ACTIONS. In case the Company shall propose
at any time or from time to time (a) to declare or pay any dividend payable in
stock of any class to the holders of Common Stock or to make any other
distribution to the holders of Common Stock (other than a regularly scheduled
cash dividend), (b) to offer to the holders of Common Stock rights or warrants
to subscribe for or to purchase any additional shares of Common Stock or shares
of stock of any class or any other securities, rights or options, (c) to effect
any reclassification of its Common Stock, (d) to effect any consolidation,
merger or sale, transfer or other disposition of all or substantially all of the
property, assets or business of the Company which would, if consummated, adjust
the Purchase Price or the securities issuable upon exercise of the Warrants, (e)
to effect the liquidation, dissolution or winding up of the Company, or (f) to
take any other action that would require a vote of the Company's stockholders,
then, in each such case, the Company shall give to the Holder, in accordance
with Section 13, a written notice of such proposed action, which shall specify
(i) the record date for the purposes of such stock dividend, distribution of
rights or warrants or vote of the stockholders of the Company, or if a record is
not to be taken, the date as of which the holders of shares of Common Stock of
record to be entitled to such dividend, distribution of rights or warrants, or
vote is to be determined, or (ii) the date on which such reclassification,
consolidation, merger, sale, transfer, disposition, liquidation, dissolution or
winding up is expected to become effective, and such notice shall be so given as
promptly as possible but in any event at least ten (10) Business Days prior to
the applicable record, determination or effective date specified in such notice.

         7.       NO DILUTION OR IMPAIRMENT. The Company will not, by amendment
of its Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other 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 of this
Warrant against

~Allied Warrant

                                        9

<PAGE>

dilution or other impairment. Without limiting the generality of the foregoing,
the Company (a) will not increase the par value of any shares of stock
receivable on the exercise of this Warrant above the amount payable therefor on
such exercise, (b) will at all times reserve and keep available the maximum
number of its authorized shares of Common Stock, free from all preemptive rights
therein, which will be sufficient to permit the full exercise of this Warrant,
and (c) will take all such action as maybe necessary or appropriate in order
that all shares of Common Stock as may be issued pursuant to the exercise of
this Warrant will, upon issuance, be duly and validly issued, fully paid and
nonassessable, and free from all taxes, liens and charges with respect to the
issue thereof.

         8.       REPLACEMENT OF WARRANTS. On receipt by the Company of an
affidavit of an authorized representative of the Holder stating the
circumstances of the loss, theft, destruction or mutilation of this Warrant (and
in the case of any such mutilation, on surrender and cancellation of such
Warrant), the Company at its expense will promptly execute and deliver, in lieu
thereof, a new Warrant of like tenor which shall be exercisable for a like
number of shares of Common Stock. If required by the Company, such Holder must
provide an indemnity bond or other indemnity sufficient in the judgment of the
Company to protect the Company from any loss which it may suffer if a lost,
stolen or destroyed Warrant is replaced.

         9.       RESTRICTIONS ON TRANSFER.

                  (a)      Subject to the provisions of this Section 9, this
Warrant may be transferred or assigned, in whole or in part, by the Holder at
any time, and from time to time. The term "Holder" as used herein shall also
include any transferee of this Warrant whose name has been recorded by the
Company in the Warrant Register (as hereinafter defined). Each transferee of the
Warrant or the Common Stock issuable upon the exercise of the Warrant
acknowledges that the Warrant or the Common Stock issuable upon the exercise of
the Warrant has not been registered under the Securities Act and may be
transferred only pursuant to an effective registration under the Securities Act
or pursuant to an applicable exemption from the registration requirements of the
Securities Act.

                  (b)      With respect to a transfer that should occur prior to
the time that the Warrant or the Common Stock issuable upon the exercise thereof
is registered under the Securities Act, such Holder shall request an opinion of
counsel (which shall be rendered by counsel reasonably acceptable to the
Company) that the proposed transfer may be effected without registration or
qualification under any Federal or state securities or blue sky law. Counsel
shall, as promptly as practicable, notify the Company and the Holder of such
opinion and of the terms and conditions, if any, to be observed in such
transfer, whereupon the Holder shall be entitled to transfer this Warrant or
such shares of Common Stock (or portion thereof), subject to any other
provisions and limitations of this Warrant. In the event this Warrant shall be
exercised as an incident to such transfer, such exercise shall relate back and
for all purposes of this Warrant be deemed to have occurred as of the date of
such notice regardless of delays incurred by reason of the provisions of this
Section 9 which may result in the actual exercise on any later date.

                  (c)      The Company shall maintain a register (the "Warrant
Register") in its principal office for the purpose of registering the Warrant
and any transfer thereof, which

~Allied Warrant

                                       10

<PAGE>

register shall reflect and identify, at all times, the ownership of any interest
in the Warrant. Upon the issuance of this Warrant, the Company shall record the
name of the initial purchaser of this Warrant in the Warrant Register as the
first Holder. Upon surrender for registration of transfer or exchange of this
Warrant together with a properly executed Form of Assignment attached hereto as
Exhibit B at the principal office of the Company, the Company shall, at its
expense, execute and deliver one or more new Warrants of like tenor which shall
be exercisable for a like aggregate number of shares of Common Stock, registered
in the name of the Holder or a transferee or transferees.

                  (d)      Notwithstanding any provision in this Warrant to the
contrary, the Holder shall not sell, assign, or otherwise transfer to any Person
(a "Transferee") any Issued Warrant Shares prior to the Expiration Date unless
such Transferee agrees in writing to be bound in the same manner as the Holder
by the provisions of this Section 9.

         10.      NO RIGHTS OR LIABILITY AS A STOCKHOLDER. This Warrant does not
entitle the Holder hereof to any voting rights or other rights as a stockholder
of the Company. No provisions hereof, in the absence of affirmative action by
the Holder hereof to purchase Common Stock, and no enumeration herein of the
rights or privileges of the Holder shall give rise to any liability of such
Holder as a stockholder of the Company.

         11.      CHARGES, TAXES AND EXPENSES. Issuance of certificates for
shares of Common Stock upon the exercise of this Warrant shall be made without
charge to the Holder hereof for any issue or transfer tax, or other incidental
expense, in respect of the issuance or delivery of such certificates or the
securities represented thereby, all of which taxes and expenses shall be paid by
the Company.

         12.      AMENDMENT OR WAIVER. This Warrant and any term hereof may be
amended, waived, discharged or terminated only by and with the written consent
of the Company and the Holder.

         13.      NOTICES. Any notice or other communication (or delivery)
required or permitted hereunder shall be made in writing and shall be by
registered mail, return receipt requested, telecopier, courier service or
personal delivery to the Company at its principal office as specified in Section
11.2 of the Purchase Agreement and to the Holder at its address as it appears in
the Warrant Register. All such notices and communications (and deliveries) shall
be deemed to have been duly given: when delivered by hand, if personally
delivered; when delivered by courier, if delivered by commercial overnight
courier service; five Business Days after being deposited in the mail, postage
prepaid, if mailed; and when receipt is acknowledged, if telecopied.

         14.      CERTAIN REMEDIES. The Holder shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this Warrant
and to enforce specifically the terms and provisions of this Warrant in any
court of the United States or any state thereof having jurisdiction, this being
in addition to any other remedy to which such Holder may be entitled at law or
in equity.

         15.      GOVERNING LAW. This Warrant shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
principles of conflicts of law of

~Allied Warrant

                                       11

<PAGE>

such State (including giving effect to GOL Section 5-1401).

         16.      HEADINGS. The headings in this Warrant are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

                                                        MERCURY AIR GROUP, INC.

                                                        By: -s-[ILLEGIBLE]
                                                           ---------------------
                                                           Name: [ILLEGIBLE]
                                                           Title:[ILLEGIBLE]

~Allied Warrant

                                       12

<PAGE>

                                                       EXHIBIT A TO COMMON STOCK
                                                                PURCHASE WARRANT

                           ELECTION TO PURCHASE SHARES

         The undersigned hereby irrevocably elects to exercise the Warrant to
purchase __________ shares of Common Stock, par value $.01 per share ("Common
Stock"), of Mercury Air Group, Inc. (the "Company") and hereby [makes payment of
$___________________________ therefor] [or] [makes payment therefor by
assignment to the Company pursuant to Section 2(b)(ii) of the Warrant of
$____________________ aggregate principal amount of WMF Note (as defined in the
Warrant)] [or] [makes payment therefore by surrendering pursuant to Section
2(b)(iii) _________________________ shares of Common Stock of the Company] [or]
[makes payment therefor by cancellation pursuant to Section 2(b)(iv) of a
portion of the Warrant with respect t o_______________________ shares of Common
Stock]. The undersigned hereby requests that certificates for such shares be
issued and delivered as follows:

ISSUE TO:_______________________________________________________________________
                                    (NAME)

________________________________________________________________________________
                        (ADDRESS, INCLUDING ZIP CODE)

________________________________________________________________________________
                 (SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)

DELIVER TO:_____________________________________________________________________
                                   (NAME)

________________________________________________________________________________
                        (ADDRESS, INCLUDING ZIP CODE)

         If the number of shares of Common Stock purchased hereby is less than
the number of shares of Common Stock covered by the Warrant, the undersigned
requests that a new Warrant representing the number of shares of Common Stock
not purchased be issued and delivered as follows:

ISSUE TO:_______________________________________________________________________
                                    (NAME)

________________________________________________________________________________
                        (ADDRESS, INCLUDING ZIP CODE)

________________________________________________________________________________
                   (SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)

DELIVER TO:_____________________________________________________________________
                                   (NAME)

                                       A-l

<PAGE>

________________________________________________________________________________
                        (ADDRESS, INCLUDING ZIP CODE)

Dated:                                                [NAME OF HOLDER(1)]

                                                      By:_______________________
                                                          Name:
                                                          Title:

---------

1.   Name of Holder must conform in all respects to name of Holder as specified
     on the face of the Warrant

                                       A-2

<PAGE>

                                                       EXHIBIT B TO COMMON STOCK
                                                                PURCHASE WARRANT

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto the Assignee named below all of the rights of the undersigned to
purchase Common Stock, par value $0.01 per share ("Common Stock"), of Mercury
Air Group, Inc. represented by the Warrant, with respect to the number of shares
of Common Stock set forth below:

Name of Assignee    Address    No. of Shares

and does hereby irrevocably constitute and appoint
_______________________________________________________ Attorney to make such
transfer on the books of Mercury Air Group, Inc. maintained for that purpose,
with full power of substitution in the premises.

Dated:                                                [NAME OF HOLDER (1)]

                                                      By:_______________________
                                                          Name:
                                                          Title:

---------

1.   Name of Holder must conform in all respects to name of Holder as specified
     on the face of the Warrant.

                                       B-1

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