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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0000950153-04-001148.txt : 20040507
<SEC-HEADER>0000950153-04-001148.hdr.sgml : 20040507
<ACCEPTANCE-DATETIME>20040507172443
ACCESSION NUMBER:		0000950153-04-001148
CONFORMED SUBMISSION TYPE:	S-3
PUBLIC DOCUMENT COUNT:		7
FILED AS OF DATE:		20040507

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MESA AIR GROUP INC
		CENTRAL INDEX KEY:			0000810332
		STANDARD INDUSTRIAL CLASSIFICATION:	AIR TRANSPORTATION, SCHEDULED [4512]
		IRS NUMBER:				850302351
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		S-3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-115312
		FILM NUMBER:		04790259

	BUSINESS ADDRESS:	
		STREET 1:		410 NORTH 44TH STREET
		STREET 2:		SUITE 700
		CITY:			PHOENIX
		STATE:			AZ
		ZIP:			85008
		BUSINESS PHONE:		6026854000

	MAIL ADDRESS:	
		STREET 1:		410 NORTH 44TH STREET
		STREET 2:		SUITE 700
		CITY:			PHOENIX
		STATE:			AZ
		ZIP:			85008

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MESA AIRLINES INC
		DATE OF NAME CHANGE:	19950426
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-3
<SEQUENCE>1
<FILENAME>p69133sv3.htm
<DESCRIPTION>S-3
<TEXT>
<HTML>
<HEAD>
<TITLE>sv3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="center">
<B><FONT size="2">As filed with the Securities and Exchange
Commission on May&nbsp;7, 2004</FONT></B>
</DIV>

<DIV align="right">
<B><FONT size="2">Registration
no.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B>
</DIV>

<DIV align="left">
<HR size="4" noshade color="#000000" style="margin-top: -5px">
</DIV>

<DIV align="left">
<HR size="1" noshade color="#000000" style="margin-top: -10px">
</DIV>

<P align="center">
<B><FONT size="4">UNITED STATES</FONT></B>

<DIV align="center">
<B><FONT size="4">SECURITIES AND EXCHANGE COMMISSION</FONT></B>
</DIV>

<DIV align="center">
<B>Washington,&nbsp;D.C. 20549</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="5">Form&nbsp;S-3</FONT></B>

<DIV align="center">
<B>REGISTRATION STATEMENT</B>
</DIV>

<DIV align="center">
<B>UNDER</B>
</DIV>

<DIV align="center">
<B>THE SECURITIES ACT OF 1933</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="6">Mesa Air Group, Inc.</FONT></B>

<DIV align="center">
<B><FONT size="2">Subsidiary Guarantors Listed on the Following
Page</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Exact name of registrant as specified in its
charter)</FONT></I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="58%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="39%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">Nevada</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">85-0302351</FONT></B></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <I><FONT size="2">(State or other jurisdiction of<BR>
    incorporation or organization)</FONT></I></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <I><FONT size="2">(I.R.S. Employer<BR>
    Identification No.)</FONT></I></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">410 North 44th&nbsp;Street,
Suite&nbsp;700</FONT></B>

<DIV align="center">
<B><FONT size="2">Phoenix, Arizona, 85008</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(602)&nbsp;685-4000</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Address, including zip code, and telephone
number, including area code,</FONT></I>
</DIV>

<DIV align="center">
<I><FONT size="2">of registrant&#146;s principal executive
offices)</FONT></I>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><I><FONT size="2">Copies of Correspondence to:</FONT></I></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="52%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="45%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">Mr. Brian S. Gillman<BR>
    Vice President and General Counsel<BR>
    Mesa Air Group, Inc.<BR>
    410 North 44th&nbsp;Street, Suite&nbsp;700<BR>
    Phoenix, Arizona 85008<BR>
    (602) 685-4000<BR>
    Fax: (602) 685-4352</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">Gregory R. Hall<BR>
    Squire, Sanders&nbsp;&#38; Dempsey L.L.P.<BR>
    Two Renaissance Square<BR>
    40 North Central Avenue, Suite&nbsp;2700<BR>
    Phoenix, Arizona 85004<BR>
    (602) 528-4000<BR>
    Fax: (602) 253-8129</FONT></B></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="center">
<I><FONT size="2">(Name, address, including zip code, and
telephone</FONT></I>
</DIV>

<DIV align="center">
<I><FONT size="2">number, including area code, of agent for
service)</FONT></I>
</DIV>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></I><B><FONT size="2">Approximate
date of commencement of proposed sale to the
public:</FONT></B><FONT size="2"> From time to time after this
registration statement becomes effective.
</FONT>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule&nbsp;415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#254;</FONT>
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
this Form is filed to register additional securities for an
offering pursuant to Rule&nbsp;462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement from the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
this Form is a post-effective amendment filed pursuant to
Rule&nbsp;462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
delivery of the prospectus is expected to be made pursuant to
Rule&nbsp;434, please check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>
</DIV>

<P align="center">
<B><FONT size="2">CALCULATION OF REGISTRATION FEE</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="29%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="17%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Proposed&nbsp;Maximum</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Proposed&nbsp;Maximum</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Amount of</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Title of Each Class of</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Amount to be</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Offering Price Per</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Aggregate</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Registration</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Securities to be Registered</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Registered</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Unit(1)</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Offering Price(1)</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Fee</FONT></B></TD>
</TR>

<TR>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Senior Convertible Notes due 2024
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$171,409,000
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$100%
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$171,409,000
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$21,717.52
    </FONT></TD>
</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Guarantee of Senior Convertible Notes due 2024
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">(2)
    </FONT></TD>
</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common Stock, no par value per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">(3)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">(4)
    </FONT></TD>
</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$21,717.52
    </FONT></TD>
</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Estimated solely for the purpose of calculating
    the registration fee pursuant to Rule&nbsp;457(o) under the
    Securities Act of 1933.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Pursuant to Rule&nbsp;457(n), no registration fee
    is required with respect to the guarantee.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Pursuant to Rule&nbsp;416, the number of shares
    of common stock being registered shall include such
    indeterminate number of shares of common stock as may be
    issuable upon conversion of the notes registered hereunder,
    including such shares as may be issuable pursuant to
    anti-dilution adjustments. Each $1,000 principal amount at
    maturity of a note may initially be converted for
    40.3737&nbsp;shares of common stock, subject to adjustments.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Pursuant to Rule&nbsp;457(i), no separate
    registration fee is required with respect to the shares of
    common stock issuable upon conversion of the notes because no
    additional consideration will be received in connection with the
    exercise of the conversion privilege.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The
Registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section&nbsp;8(a)
of the Securities Act of 1933, as amended, or until the
registration statement shall become effective on such date as
the Commission, acting pursuant to such Section&nbsp;8(a), may
determine</B>
</FONT>

<P align="left">
<HR size="1" noshade color="#000000" style="margin-top: -2px">

<DIV align="left">
<HR size="4" noshade color="#000000" style="margin-top: -10px">
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">TABLE OF ADDITIONAL REGISTRANTS
UNDER</FONT></B>

<DIV align="center">
<B><FONT size="2">REGISTRATION STATEMENT ON FORM S-3</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following direct or indirect subsidiaries of
Mesa Air Group, Inc. are co-registrants under this registration
statement for the purpose of providing guarantees, if any, of
payments on debt securities registered hereunder. The principal
executive office of each registrant below is located at 410
North 44th&nbsp;Street, Suite&nbsp;700, Phoenix, Arizona 85008,
telephone (602)&nbsp;685-4000, except for Air Midwest, Inc.,
which has its principal office at 2203 Air Cargo Road, Wichita,
Kansas 67209, telephone (316)&nbsp;942-8137.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="52%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Subsidiaries</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Jurisdiction of Corporation</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Employer ID No.</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Mesa Airlines, Inc.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Nevada</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">84-0444800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Freedom Airlines, Inc.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Nevada</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">86-1049364</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Air Midwest, Inc.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Kansas</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48-0696610</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">MPD, Inc.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Nevada</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">85-0377849</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Regional Aircraft Services, Inc.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">California</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">77-0211911</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Mesa Air Group&nbsp;&#151; Aircraft Inventory
    Management, LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Arizona</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48-1292015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ritz Hotel Management Corp.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">Nevada</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">N/A</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<TABLE width="100%" border="1" cellpadding="5"><TR><TD>
<FONT size="2" color="#E8112D">The information in this
prospectus is not complete and may be changed. The selling
securityholders may not sell these securities until the
registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell
these securities and is not soliciting an offer to buy the
securities in any jurisdiction where the offer or sale is not
permitted.
</FONT>
</TD></TR></TABLE>

<P align="center">
<B><FONT size="2" color="#E8112D">SUBJECT TO COMPLETION, dated
May&nbsp;7, 2004</FONT></B>

<P align="left">
<B><FONT size="2">Prospectus</FONT></B>

<DIV align="center">
<B><FONT size="5">Mesa Air Group, Inc.</FONT></B>
</DIV>

<P align="center">
<B>$171,409,000</B>

<DIV align="center">
<B><FONT size="2">Senior Convertible Notes&nbsp;due
2024</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">and</FONT></B>

<P align="center">
<B><FONT size="2">6,920,415 Shares of Common Stock</FONT></B>

<P align="center">
<B><FONT size="2">Issuable upon conversion thereof</FONT></B>

<P align="center">
<B><FONT size="2">The Notes</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><FONT size="2">We
issued up to an aggregate of $171,409,000 Senior Convertible
Notes due 2024. This prospectus covers resales by holders of the
notes and shares of common stock into which the notes are
convertible. We will not receive any proceeds from the resale of
the notes or the underlying shares of common stock. Interest on
the notes is payable semiannually in arrears in cash on
February&nbsp;10 and August&nbsp;10 of each year at the rate of
2.115%&nbsp;per year on the principal amount at maturity,
beginning August&nbsp;10, 2004, until February&nbsp;10, 2009.
After that date, we will not pay cash interest on the notes
prior to maturity. Instead, on February&nbsp;10, 2024, the
maturity date of the notes, a holder will receive
$1,000&nbsp;per note. The rate of accrual of original issue
discount represents a yield to maturity of 3.625%&nbsp;per year,
computed on a semiannual bond equivalent basis and calculated
from February&nbsp;10, 2009. The notes are senior unsecured
obligations and will rank equally with our existing and future
senior unsecured and unsubordinated indebtedness. Each of our
wholly-owned domestic subsidiaries, including any person that
becomes a wholly-owned domestic subsidiary, guarantees the notes
on an unsecured senior basis. Any non-domestic subsidiary and
any non-wholly-owned domestic subsidiary will be required to
guarantee the notes only so long as such subsidiary guarantees
other indebtedness of ours, except MAGI Insurance, Ltd., which
has agreed to guarantee the notes.
</FONT>

<P align="center">
<B><FONT size="2">Convertibility of the Notes:</FONT></B>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders
may convert their notes into 40.3737&nbsp;shares of our common
stock, subject to adjustment, only if (1)&nbsp;the sale price of
our common stock reaches, or the trading price of the notes
falls below, specified thresholds, (2)&nbsp;the notes are called
for redemption, or (3)&nbsp;specified corporate transactions
have occurred. Upon conversion, we will have the right to
deliver, in lieu of our common stock, cash or a combination of
cash and common stock in an amount described herein. Our common
stock currently trades on the Nasdaq National Market under the
symbol &#147;MESA.&#148; On May 6, 2004, the last reported
closing sale price of our common stock on the Nasdaq National
Market was $6.85&nbsp;per share. We will apply to list the
shares issuable upon conversion of the notes on the Nasdaq
National Market. For a description of certain federal income tax
consequences to the holders of the notes, see &#147;Certain
Federal Income Tax Consequences.&#148;
</FONT>

<P align="center">
<B><FONT size="2">Purchase of the Notes by the Company at the
Option of the Holder:</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><FONT size="2">Holders
may require us to purchase all or a portion of their notes on
February&nbsp;10, 2009 at a price of $583.40&nbsp;per note plus
accrued cash interest, if any, on February&nbsp;10, 2014 at a
price of $698.20&nbsp;per note plus accrued cash interest, if
any, and on February&nbsp;10, 2019 at a price of
$835.58&nbsp;per note plus accrued cash interest, if any. We may
choose to pay the purchase price of such notes in cash or common
stock or a combination of cash and common stock. In addition, if
a change of control of our company occurs, each holder may
require us to purchase for cash all or a portion of such
holder&#146;s notes at a price equal to the sum of the issue
price plus accrued original issue discount and accrued cash
interest, if any, to the date of purchase.
</FONT>

<P align="center">
<B><FONT size="2">Redemption of the Notes at Our
Option:</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><FONT size="2">We
may redeem for cash all or a portion of the notes at any time on
or after February&nbsp;10, 2009, at a price equal to the sum of
the issue price plus accrued original issue discount and accrued
cash interest, if any, to the redemption date.
</FONT>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
notes were originally issued by us in a private placement on
February&nbsp;10, 2004 to the initial purchasers and were
simultaneously sold by the initial purchasers in transactions
exempt from registration under the Securities Act, in the United
States to persons reasonably believed to be &#147;qualified
institutional buyers&#148; as defined in Rule&nbsp;144A under
the Securities Act.
</FONT>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior
to this offering, the notes have been eligible for trading on
the PORTAL Market of the Nasdaq Stock Market. The notes sold by
means of this prospectus are not expected to remain eligible for
trading on the PORTAL Market. We do not intend to list the notes
for trading on any national securities exchange or on the Nasdaq
National Market.
</FONT>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
selling securityholders may offer the notes or the shares of
common stock issuable upon conversion of the notes from time to
time to purchasers directly or through underwriters, dealers or
agents. Such notes or the underlying common shares may be sold
at market prices prevailing at the time of sale or at negotiated
prices. Each selling securityholder will be responsible for
payment of any and all commissions to brokers, which will be
negotiated on an individual basis.
</FONT>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will pay the expenses of preparing and filing the registration
statement to which this prospectus relates and all
post-effective amendments. See &#147;Plan of Distribution&#148;
for a description of the indemnification arrangements between us
and the selling securityholders.
</FONT>

<P align="center">
<B><FONT size="2">Consider carefully the risk factors beginning
on page&nbsp;16 of this prospectus before investing.</FONT></B>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities or
passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
</FONT>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
the fact that a registration statement or an application for a
license has been filed under Chapter&nbsp;421-B of the New
Hampshire Revised Statutes Annotated, 1955, as amended
(&#147;RSA&#148;) with the state of New Hampshire nor the fact
that a security is effectively registered or a person is
licensed in the state of New Hampshire constitutes a finding by
the secretary of state that any document filed under RSA 421-B
is true, complete and not misleading. Neither any such fact nor
the fact that an exemption or exception is available for a
security or a transaction means that the secretary of state has
passed in any way upon the merits or qualifications of, or
recommended or given approval to, any person, security or
transaction. It is unlawful to make, or cause to be made, to any
prospective purchaser, customer or client any representation
inconsistent with the provisions of this paragraph.
</FONT>

<P align="center">
<FONT size="2">The date of this prospectus is
May&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004.
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<!-- TOC -->
<A name="toc"><DIV align="CENTER"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">WHERE YOU CAN FIND MORE INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">INCORPORATION OF CERTAIN INFORMATION BY REFERENCE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">PROSPECTUS SUMMARY</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">RISK FACTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">RATIO OF EARNINGS TO FIXED CHARGES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">USE OF PROCEEDS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">DESCRIPTION OF THE NOTES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">DESCRIPTION OF CAPITAL STOCK</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">SELLING SECURITYHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">PLAN OF DISTRIBUTION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#012">LEGAL MATTERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#013">EXPERTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="p69133exv4w1.txt">EX-4.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="p69133exv4w2.txt">EX-4.2</A></TD></TR>
<TR><TD colspan="9"><A HREF="p69133exv5.txt">EX-5</A></TD></TR>
<TR><TD colspan="9"><A HREF="p69133exv12.txt">EX-12</A></TD></TR>
<TR><TD colspan="9"><A HREF="p69133exv23w2.txt">EX-23.2</A></TD></TR>
<TR><TD colspan="9"><A HREF="p69133exv25.txt">EX-25</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->

<DIV align="left">

</DIV>

<DIV align="left">
<!-- TOC -->
<!-- /TOC -->

<DIV align="left">
<A name='101'></A>
</DIV>

<!-- link1 "WHERE YOU CAN FIND MORE INFORMATION" -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="center">
<B><FONT size="2">WHERE YOU CAN FIND MORE INFORMATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We file annual, quarterly and special reports,
proxy statements and other information with the SEC under the
Securities Exchange Act of 1934, as amended&#148;. You may read
and copy this information at the following location of the SEC:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">Public Reference Room
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">&nbsp;&nbsp;450&nbsp;Fifth Street, N.W.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">&nbsp;&nbsp;Room&nbsp;1024
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">&nbsp;&nbsp;Washington,&nbsp;D.C. 20549
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">&nbsp;&nbsp;1-800-SEC-0330
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You may also obtain copies of this information by
mail from the Public Reference Section of the SEC,
450&nbsp;Fifth Street, N.W., Room&nbsp;1024, Washington, DC
20549, at prescribed rates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The SEC also maintains an Internet web site that
contains reports, proxy statements and other information about
issuers that file electronically with the SEC. The address of
that site is <I>www.sec.gov.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This prospectus is a part of a registration
statement on Form&nbsp;S-3 that we are filing with the SEC, but
the registration statement includes additional information and
also attaches exhibits that are referenced in this prospectus.
</FONT>

<DIV align="left">
<A name='102'></A>
</DIV>

<!-- link1 "INCORPORATION OF CERTAIN INFORMATION BY REFERENCE" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="center">
<B><FONT size="2">INCORPORATION OF CERTAIN INFORMATION BY
REFERENCE</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are &#147;incorporating by reference&#148;
into this prospectus certain information we file with the SEC,
which means that we are disclosing important information to you
by referring you to those documents. The information
incorporated by reference is deemed to be part of this
prospectus, except for any information superseded by information
contained directly in this prospectus. This prospectus
incorporates by reference our:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our annual report on Form&nbsp;10-K for the
    fiscal year ended September&nbsp;30, 2003, as amended by our
    Form&nbsp;10-K/ A filed with the SEC on January&nbsp;5, 2004 and
    our Form&nbsp;10-K/ A filed with the SEC on May 7, 2004;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our proxy statement relating to our 2004 annual
    meeting of shareholders;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">i
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our quarterly report on Form&nbsp;10-Q for the
    quarter ended December&nbsp;31, 2003, as amended by our
    Form&nbsp;10-Q/ A filed with the SEC on May 7, 2004;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our current reports on Form&nbsp;8-K filed with
    the SEC on November&nbsp;13, 2003, November&nbsp;26, 2003,
    December&nbsp;2, 2003, December&nbsp;12, 2003, December&nbsp;23,
    2003, January&nbsp;30, 2004, February&nbsp;5, 2004 and
    May&nbsp;3, 2004;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the description of our common stock set forth in
    our Registration Statement on Form&nbsp;8-A filed on
    March&nbsp;16, 1987, including any amendments or reports filed
    for the purpose of updating such description.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All documents we file with the SEC pursuant to
Section&nbsp;13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 from the date of this prospectus to the end
of the offering of the notes and common stock under this
document shall also be deemed to be incorporated herein by
reference and will automatically update information in this
prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You may request a copy of these filings, at no
cost, by writing or calling us at the following address or
telephone number:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">Corporate Secretary
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">&nbsp;&nbsp;Mesa Air Group, Inc.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">&nbsp;&nbsp;410 North 44th&nbsp;Street,
    Suite&nbsp;700
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">&nbsp;&nbsp;Phoenix, Arizona 85008
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">&nbsp;&nbsp;(602)&nbsp;685-4000
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Exhibits to the filings will not be sent,
however, unless those exhibits have specifically been
incorporated by reference in this document.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any statements contained in a document
incorporated by reference in this prospectus shall be deemed to
be modified or superseded for purposes of this prospectus to the
extent that a statement contained in this prospectus (or in any
other subsequently filed document which also is incorporated by
reference in this prospectus) modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed to constitute a part of this prospectus except as so
modified or superseded.
</FONT>

<P align="left">
<B><FONT size="2">Important Notice About the Information
Presented In This Prospectus</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You should rely only on the information provided
in this prospectus and the information incorporated by
reference. We have not authorized anyone to provide you with
different information. The selling securityholders are not
offering to sell, or seeking offers to buy, the notes or
underlying shares in any state where offers or sales are not
permitted. We do not claim the accuracy of the information in
this prospectus as of any date other than the date stated on the
cover.
</FONT>

<DIV align="left">
<A name='103'></A>
</DIV>

<!-- link1 "SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS" -->

<P align="center">
<B><FONT size="2">SPECIAL NOTE&nbsp;REGARDING FORWARD-LOOKING
STATEMENTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This prospectus and the documents we incorporate
by reference contain certain forward-looking statements that
involve a number of risks and uncertainties. These statements
include, without limitation, information regarding the
replacement, deployment, acquisition and financing of certain
numbers and types of aircraft, and projected expenses associated
therewith; costs of compliance with Federal Aviation
Administration regulations and other rules and acts of Congress;
the ability to pass taxes, fuel costs, inflation, and various
expenses to our customers; the resolution of litigation in a
favorable manner; and certain projected financial obligations.
These statements, in addition to statements made in conjunction
with the words &#147;expect,&#148; &#147;anticipate,&#148;
&#147;intend,&#148; &#147;plan,&#148; &#147;believe,&#148;
&#147;seek,&#148; &#147;estimate,&#148; and similar expressions,
are forward-looking statements within the meaning of the Safe
Harbor provision of Section&nbsp;27A of the Securities Act and
Section&nbsp;21E of the Exchange Act. These statements relate to
future events or our future financial performance
</FONT>

<P align="center"><FONT size="2">ii
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">and only reflect management&#146;s expectations
and estimates. The following is a list of factors, among others,
that could cause actual results to differ materially from the
forward-looking statements:
</FONT>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changing business conditions in certain market
    segments and industries;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in our code-share relationships;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the inability of our code-share partners to pay
    their respective obligations under the revenue-guarantee
    code-share agreements;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an increase in competition along the routes we
    operate or plan to operate;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">material delays in completion by the manufacturer
    of the ordered and yet-to-be delivered aircraft;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to profitably manage our turboprop
    fleet;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">adverse reaction and publicity that might result
    from any future aircraft accident;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">availability and cost of funds for financing new
    aircraft;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in general and/or regional economic
    conditions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in fuel price or fuel supplies;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our relationship with employees and the terms of
    future collective bargaining agreements;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the impact of current and future laws;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">additional terrorist attacks;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Congressional investigations and governmental
    regulations affecting the airline industry and our operations;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">bureaucratic delays;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">amendments to existing legislation;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">consumer unwillingness to incur greater costs for
    flights;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">unfavorable resolution of negotiations with
    municipalities for the leasing of facilities;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">risks associated with litigation outcomes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of
new information, future events or otherwise, after the date of
this prospectus to conform them to actual results. We do not,
nor does any other person, assume responsibility for the
accuracy and completeness of those statements. All of the
forward-looking statements are qualified in their entirety by
reference to the factors discussed under the caption &#147;Risk
Factors.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We caution the reader that these risk factors may
not be exhaustive. We operate in a continually changing business
environment, and new risk factors emerge from time to time.
Management cannot predict such new risk factors, nor can it
assess the impact, if any, of such new risk factors on our
businesses or the extent to which any factor or combination of
factors, may cause actual results to differ materially from
those projected in any forward-looking statements. In light of
these risks, uncertainties and assumptions, the forward-looking
events discussed in this prospectus and the documents we
incorporate by reference might not occur.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For these statements, we claim the protection of
the safe harbor for forward-looking statements contained in
Section&nbsp;21E of the Securities Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You should carefully read this prospectus and the
documents incorporated by reference in their entirety. They
contain information that you should consider when making your
investment decision.
</FONT>

<P align="center"><FONT size="2">iii
</FONT>

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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="left">
<A name='104'></A>
</DIV>

<!-- link1 "PROSPECTUS SUMMARY" -->

<P align="center">
<B><FONT size="2">PROSPECTUS SUMMARY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">This summary highlights selected information
from this prospectus and does not contain all of the information
that you need to consider in making your investment decision.
You should read the entire prospectus, including the risks of
investing discussed under &#147;Risk Factors&#148; beginning on
page&nbsp;16 and the following summary together with the more
detailed information regarding our company, the notes, our
financial statements and the notes to those statements and the
other documents incorporated by reference in this prospectus,
and the exhibits to the registration statement of which this
prospectus is a part.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">References in this prospectus to &#147;Mesa
Air,&#148; the &#147;Company,&#148; &#147;we,&#148;
&#147;us,&#148; and &#147;our,&#148; refer to Mesa Air Group,
Inc. and its subsidiaries, unless otherwise specified.</FONT></I>

<P align="center">
<B><FONT size="2">Mesa Air Group, Inc.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mesa Air Group, Inc., together with its
subsidiaries, is an independently owned regional airline serving
156&nbsp;cities in 42&nbsp;states, the District of Columbia,
Canada, Mexico and the Bahamas. At December&nbsp;31, 2003, we
operated a fleet of 158 aircraft and had over 1,000 daily
departures.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Approximately 98% and 99% of our consolidated
passenger revenues for the fiscal year ended September&nbsp;30,
2003 and the three months ended December&nbsp;31, 2003,
respectively, were derived from operations associated with
code-share agreements. Our subsidiaries have code-share
agreements with America West Airlines, Inc., Frontier Airlines,
Inc., Midwest Airlines, Inc., United Airlines, Inc. and US
Airways, Inc. These code-share agreements allow use of the
code-share partner&#146;s reservation system and flight
designator code to identify flights and fares in computer
reservation systems, permit use of logos, service marks,
aircraft paint schemes and uniforms similar to the code-share
partners and provide coordinated schedules and joint
advertising. The financial arrangement between us and our
code-share partners involves either a revenue-guarantee or
pro-rate arrangement. Under the terms of our revenue-guarantee
flying agreements, we receive a guaranteed payment based upon a
fixed minimum monthly amount plus additional amounts related to
departures and block hours flown in addition to direct
reimbursement for expenses such as fuel, landing fees and
insurance. Revenue-guarantee arrangements reduce our exposure to
fluctuations in passenger traffic and fare levels, as well as
fuel prices. Under the terms of our pro-rate agreements, we
receive an allocated portion of the passengers&#146; fares and
are at risk for all of the costs of transporting the passengers.
For the 2003 fiscal year and the three months ended
December&nbsp;31, 2003, 86% and 90% of our consolidated
passenger revenues, respectively, were derived from our
revenue-guarantee code-share agreements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our airline operations are conducted by three
wholly-owned regional airline subsidiaries:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mesa Airlines, Inc. operates regional jet and
    turbo prop aircraft as America West Express under a code-share
    agreement with America West, primarily at America West&#146;s
    operations hub located in Phoenix; as US Airways Express under a
    code-share agreement with US Airways, primarily at US
    Airways&#146; hubs on the East Coast; and as United Express
    under a code-share agreement with United Airlines, primarily in
    Denver, Chicago and Los Angeles.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Air Midwest, Inc. operates Beechcraft 1900D
    19-seat turbo prop aircraft as US Airways Express under separate
    code-share agreements with US Airways, at certain US
    Airways&#146; hubs on the East Coast as well as in Kansas City
    and as America West Express in Phoenix. Air Midwest&#146;s
    flights in Kansas City code-share with both Midwest Airlines and
    US Airways. Air Midwest also operates as &#147;Mesa
    Airlines&#148; in Albuquerque, New Mexico and in select
    Essential Air Service markets. The Albuquerque flights and
    certain Essential Air Service markets are &#147;Independent
    Operations&#148; and are not subject to a code-sharing agreement
    with a major carrier.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Freedom Airlines, Inc. operates CRJ-900 aircraft
    as America West Express pursuant to our&#146; code-share
    agreement at America West. Freedom Airlines began revenue flight
    operations on October&nbsp;19, 2002.
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">1
</FONT>

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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to carrying passengers, we carry
freight and express packages on our passenger flights and have
interline small cargo freight agreements with many other
carriers. We also have contracts with the U.S.&nbsp;Postal
Service for carriage of mail to the cities we serve and
occasionally operate charter flights when our aircraft are not
otherwise used for scheduled service.
</FONT>

<P align="center">
<B><FONT size="2">Recent Developments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;10, 2004, we completed the
offering of the notes which are the subject of this prospectus,
our $100&nbsp;million issue price of 3.625%&nbsp;Senior
Convertible Notes due 2024, to qualified institutional buyers
pursuant to Rule&nbsp;144A under the Securities Act of 1933. The
aggregate amount due at maturity, including accrued interest,
will be $171.4&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;30, 2004, we amended our
agreement with US Airways to expand our regional jet agreement
with them by adding eight 50-seat regional jets to our existing
US Airways Express fleet. This amendment increases the number of
regional jets under contract with US Airways to 67. As of
February&nbsp;1, 2004, Mesa has 57 of the 50-seat regional jet
aircraft in service with US Airways.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On January&nbsp;28, 2004, we entered into an
Amended and Restated United Express Agreement United Airlines to
operate regional jets as a United Express carrier, significantly
expanding our code-share agreement with United. The amended
code-share agreement provides for us to increase our fleet to 30
70-seat regional aircraft (15 of which would be replacements for
15 CRJ-200s), 15 CRJ-200s and 10 Dash-8 aircraft. United also
has the option to add an additional 25 regional jets, the timing
and mix to be determined at a later date. As of
December&nbsp;31, 2003, we operated eight CRJ-700, and six
Dash-8 aircraft for United under this code-share agreement. The
code-share agreement for (i)&nbsp;the ten Dash-8 aircraft
terminates in July 2013 unless terminated earlier by United by
giving notice six months prior to the fifth anniversary,
(ii)&nbsp;the 15 50-seat CRJ-200s terminates in July 2008, which
can be accelerated up to two years at our discretion,
(iii)&nbsp;the 15 70-seat regional jets (to be delivered upon
the withdrawal of the 50-seat regional jets) terminates ten
years from delivery date, and (iv)&nbsp;the remaining 15 70-seat
regional jets terminates in three tranches between
December&nbsp;31, 2011 and December&nbsp;31, 2013.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;19, 2003, we acquired the assets
of the bankrupt Midway Airlines Corporation for
$9.2&nbsp;million. Assets acquired included two owned CRJ
aircraft, all of Midway&#146;s CRJ spare parts and support
equipment, all aircraft landing and/or takeoff slots at
New&nbsp;York LaGuardia and Washington National airports, and
all related acquisition materials associated with the operation
of Midway&#146;s CRJ operations. We also assumed the leases on
six CRJ aircraft and Midway&#146;s right to three additional
leased aircraft. We are utilizing the aircraft to meet our
contractual obligations with our airline partners.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;13, 2003, we entered into a letter
of intent with LogisTechs Inc., an affiliate of GE Capital
Aviation Services, for the sale, repair and management of our
aircraft spare parts inventory. Under the terms of the letter of
intent, LogisTechs is expected to purchase between $20 and
$60&nbsp;million in existing spare parts inventory from us and
purchase additional inventory required to meet specified service
levels for our planned regional jet fleet growth. LogisTechs
would also provide overall management, planning and logistics
support for our spare parts requirements and Rockwell Collins
Aviation Services would be responsible for managing the spare
parts repair process. The arrangement will cover all of our
regional jets as well as our Dash 8-200 turboprop aircraft. The
transaction, which remains subject to final documentation, will
have a term of ten years. We expect to finalize the transaction
in the third quarter of 2004.
</FONT>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We were incorporated in Nevada in 1996, and our
principal executive offices are located at 410 North
44th&nbsp;Street, Suite&nbsp;700, Phoenix, Arizona 85008. Our
telephone number is (602)&nbsp;685-4000. Our website address is
<I>www.mesa-air.com.</I> Information on our website does not
constitute part of this prospectus.
</FONT>
</DIV>

<P align="center"><FONT size="2">2
</FONT>

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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<P align="center">
<B><FONT size="2">The Notes</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Notes
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">$171,409,000 aggregate principal amount at
    maturity of Senior Convertible Notes due 2024. Each note was
    issued at a price of $583.40&nbsp;per note and has a principal
    amount at maturity of $1,000.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Maturity
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">February&nbsp;10, 2024.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Cash interest
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">2.115%&nbsp;per year on the principal amount at
    maturity, payable semiannually in arrears in cash on
    February&nbsp;10 and August&nbsp;10 of each year, beginning
    August&nbsp;10, 2004, until February&nbsp;10, 2009. This cash
    interest will be taxable to holders as part of the original
    issue discount for United States federal income tax purposes and
    accordingly, is taxed to a holder as it accrues regardless of
    the holder&#146;s method of tax accounting. However, a holder
    will not recognize any income upon the actual payment of such
    cash interest. See &#147;Certain United States Federal Income
    Tax Considerations.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Yield-to-maturity of notes
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">3.625%&nbsp;per year, computed on a semiannual
    bond equivalent basis and calculated from February&nbsp;10, 2009.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Original issue discount
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">We offered our notes at an issue price
    significantly below the principal amount at maturity of the
    notes. As a result, the notes will be treated as issued with
    original issue discount, which will accrue daily at a rate of
    3.625%&nbsp;per year calculated on a semiannual bond equivalent
    basis using a 360-day year comprised of twelve 30-day months.
    For United States federal income tax purposes, U.S.&nbsp;holders
    will be required to include original issue discount in their
    gross income as it accrues regardless of their method of tax
    accounting. See &#147;Certain United States Federal Income Tax
    Considerations.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Conversion rights
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">For each note surrendered for conversion, if the
    conditions for conversion are satisfied, a holder will receive
    40.3737&nbsp;shares of our common stock at an initial conversion
    rate of 40.3737&nbsp;shares, subject to adjustment. In lieu of
    delivering shares of our common stock upon conversion of all or
    any portion of our notes, we may elect to pay holders
    surrendering notes cash or a combination of cash and shares of
    our common stock for the notes surrendered. If we elect to pay
    holders cash for their notes, the payment will be based on the
    average sale price of our common stock for the five consecutive
    trading days immediately following either:
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;the date of our notice of our
    election to deliver cash, which we must give within two business
    days after receiving a conversion notice, unless we have earlier
    given notice of redemption as described in this
    prospectus;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;the conversion date, if we have given
    notice of redemption specifying that we intend to deliver cash
    upon conversion thereafter.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The conversion rate may be adjusted for certain
    reasons, but will not be adjusted for accrued original issue
    discount, cash interest or interest payable upon the occurrence
    of a tax event. Upon conversion, a holder will not receive any
    cash payment representing
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">3
</FONT>

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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">accrued original issue discount or any accrued
    cash interest. Instead, accrued original issue discount or
    accrued cash interest will be deemed paid by the shares of
    common stock received by the holder on conversion.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Holders may surrender notes for conversion into
    shares of our common stock beginning in any fiscal quarter
    commencing after March&nbsp;31, 2004, if, as of the last day of
    the preceding fiscal quarter, the closing sale price of our
    common stock for at least 20 trading days in a period of 30
    consecutive trading days ending on the last trading day of such
    preceding fiscal quarter is more than 110% of the accreted
    conversion price per share of common stock on the last day of
    such preceding fiscal quarter. If the foregoing condition is
    satisfied, then the notes will be convertible at any time at the
    option of the holder, through maturity. The accreted conversion
    price per share as of any day will equal the issue price of a
    note plus accrued original issue discount to that day, divided
    by the conversion rate, subject to any adjustments to the
    conversion rate through that day. The conversion rate is
    calculated by dividing the original issue price by $14.45.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">On or before February&nbsp;10, 2019, a holder
    also may convert its notes into shares of our common stock at
    any time after a 10 consecutive trading-day period in which the
    average of the trading prices for the notes for that 10
    trading-day period was less than 103% of the average conversion
    value for the notes during that period. Conversion value is
    equal to the product of the closing sale price for our shares of
    common stock on a given day multiplied by the then current
    conversion rate.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Notes or portions of notes in integral multiples
    of $1,000 principal amount at maturity called for redemption may
    be surrendered for conversion until the close of business on the
    second business day prior to the redemption date. In addition,
    if we make a distribution to our stockholders with a per share
    value of more than 15% of the sale price of our common stock on
    the date immediately preceding the declaration of such
    distribution, or if we are a party to certain consolidations,
    mergers or binding share exchanges, in addition to any
    adjustment to the conversion rate as a result of a distribution,
    consolidation, merger or exchange, notes may be surrendered for
    conversion, as provided in &#147;Description of the
    Notes&nbsp;&#151; Conversion Rights.&#148; The ability to
    surrender notes for conversion will expire at the close of
    business on February&nbsp;10, 2024.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Ranking
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The notes are senior unsecured obligations and
    rank equal in right of payment to all of our other unsecured and
    unsubordinated indebtedness. The notes are effectively
    subordinated to our secured indebtedness to the extent of the
    security.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">As of December&nbsp;31, 2003, we had
    $372.7&nbsp;million of senior indebtedness outstanding, which
    consisted of $144.3&nbsp;million of notes payable on interim
    financing of regional jets, $98.7&nbsp;million of notes payable
    related to our fleet of Beechcraft l900D turboprop aircraft,
    $100.1&nbsp;million related to the issuance of our senior
    convertible notes due 2023, $24.1&nbsp;million related to two
    CRJ-200
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">4
</FONT>

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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">aircraft, $3.8&nbsp;million related to the
    settlement of past contractual claims of an aircraft
    manufacturer, $1.0&nbsp;million related to a mortgage note
    payable on one of our real estate properties and other
    miscellaneous debt totaling $0.8&nbsp;million. We also had
    $9.3&nbsp;million in letters of credit outstanding at
    December&nbsp;31, 2003.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Guarantees
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Each of our existing wholly-owned domestic
    subsidiaries will be guarantors of the notes and all future
    wholly-owned domestic subsidiaries will be required to guarantee
    the notes on a senior unsecured basis. Each of our non-domestic
    subsidiaries and non-wholly-owned domestic subsidiaries will be
    required to guarantee the notes only so long as such subsidiary
    guarantees other indebtedness of ours, except MAGI Insurance,
    Ltd., which will guarantee the notes. Each guarantee by a
    guarantor will be equal in right of payment to all existing and
    future unsecured and unsubordinated indebtedness of such
    guarantor. The guarantees are effectively subordinated to the
    secured indebtedness of the guarantors to the extent of the
    security.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">As of December&nbsp;31, 2003, the guarantors had
    an aggregate of $268.1&nbsp;million of senior secured
    indebtedness outstanding, which primarily consisted of
    $144.3&nbsp;million of notes payable on interim financing of
    regional jets, $98.7&nbsp;million of notes payable related to
    our fleet of Beechcraft 1900D turboprop aircraft,
    $24.1&nbsp;million in notes payable related to two CRJ-200
    aircraft and $1.0&nbsp;million related to a mortgage note
    payable on one of our real estate properties. We also had
    $9.3&nbsp;million in letters of credit outstanding at
    December&nbsp;31, 2003.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Sinking fund
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">None
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Redemption of notes at our option
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">We may redeem for cash all or a portion of the
    notes at any time on or after February&nbsp;10, 2009, at
    redemption prices equal to the sum of the issue price plus
    accrued original issue discount and accrued cash interest, if
    any, to the applicable redemption date. See &#147;Description of
    the Notes&nbsp;&#151; Redemption of Notes at Our Option.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Purchase of the notes by Mesa Air
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Holders may require us to purchase all or a
    portion of their notes at the option of the Holder on each of
    the following dates at the following prices, plus accrued cash
    interest, if any, to the purchase date:
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;on February&nbsp;10, 2009 at a price
    of $583.40&nbsp;per note;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;on February&nbsp;10, 2014 at a price
    of $698.20&nbsp;per note;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;on February&nbsp;10, 2019 at a price
    of $835.58&nbsp;per note.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">We may pay the purchase price in cash or shares
    of our common stock or in a combination of cash and shares of
    our common stock. If we elect to pay the purchase price, in
    whole or in part, in shares of our common stock, the number of
    shares we deliver will be equal to the portion of the purchase
    price to be paid in common stock divided by the market price of
    a share of common stock.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Change of control
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Upon a change of control of Mesa Air, the holders
    may require us to purchase for cash all or a portion of their
    notes at a price equal
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">5
</FONT>

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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">to the sum of the issue price plus accrued
    original issue discount and accrued cash interest, if any, to
    the date of purchase.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Optional conversion to semiannual coupon notes
    upon tax event
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">From and after the occurrence of a tax event, as
    described hereinafter, at our option, interest in lieu of future
    accrued original issue discount or cash interest will accrue on
    each note from the option exercise date at 3.625%&nbsp;per year,
    calculated on a semiannual bond equivalent basis, on the
    restated principal amount and will be payable semiannually. Any
    such interest in lieu of original issue discount or cash
    interest will be computed in the same manner and payable at the
    same time as the cash interest and will accrue from the most
    recent date to which cash interest, if payable, has been paid or
    provided for or, if no cash interest is payable or has been paid
    or provided for, the option exercise date. In such event, the
    redemption price, purchase price and change of control purchase
    price will be adjusted, as described herein. However, there will
    be no change in the holder&#146;s conversion rights. See
    &#147;Description of the Notes&nbsp;&#151; Optional Conversion
    to Semiannual Coupon Notes upon Tax Event.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">DTC eligibility
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The notes were issued in fully registered
    book-entry form and are represented by one or more permanent
    global notes without coupons. Global notes have been deposited
    with a custodian for and registered in the name of a nominee of
    The Depository Trust Company in New&nbsp;York, New&nbsp;York.
    Beneficial interests in global notes will be shown on, and
    transfers thereof will be effected only through, records
    maintained by DTC and its direct and indirect participants, and
    your interest in any global note may not be exchanged for
    certificated notes, except in limited circumstances described
    herein. See &#147;Description of the Notes&nbsp;&#151;
    Book-Entry System.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Trading
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">We do not intend to list the notes on any
    national securities exchange. However, the notes have been
    eligible for trading in PORTAL. The notes will be new securities
    for which there is currently no public market.
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">6
</FONT>

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<DIV align="left">
<A name='105'></A>
</DIV>

<!-- link1 "RISK FACTORS" -->

<P align="center">
<B><FONT size="2">RISK FACTORS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">In addition to the other information contained
in this prospectus and in the documents incorporated herein by
reference, including our consolidated financial statements and
the related notes, you should carefully consider the following
factors. If any of the following risks actually occurs, our
business could be harmed.</FONT></I>

<P align="left">
<B><FONT size="2">Risks Related to the Offering of the
Notes</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We have a significant amount of fixed
    obligations that could impair our ability to make principal and
    interest payments on our debt obligations, including the notes,
    and lease payments on our lease obligations.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have, and will continue to have, a significant
amount of fixed obligations. Due to our high fixed costs,
including aircraft lease obligations and debt service, a
decrease in revenues results in a disproportional greater
percentage decrease in earnings. As of December&nbsp;31, 2003,
we had approximately $2.1&nbsp;billion of future lease
obligations payable over the next 16&nbsp;years and we had
approximately $372.7&nbsp;million of indebtedness outstanding
(including current maturities), comprised of $144.3&nbsp;million
of notes payable on interim financing of regional jets,
$98.7&nbsp;million outstanding under notes payable related to
our fleet of Beechcraft 1900D turboprop aircraft,
$100.1&nbsp;million outstanding related to the issuance of the
senior convertible notes due 2023, $24.1&nbsp;million related to
two CRJ-200 aircraft, $3.8&nbsp;million related to the
settlement of past contractual claims of an aircraft
manufacturer, $1.0&nbsp;million related to a mortgage note on
one of our real estate properties and other miscellaneous debt
totaling $0.8&nbsp;million. In addition, we had
$9.3&nbsp;million in letters of credit outstanding at
December&nbsp;31, 2003 under our credit facility with Fleet
Capital Corporation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our outstanding indebtedness and lease
obligations could have important consequences to you. For
example, it could:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make it more difficult for us to satisfy our
    obligations with respect to these notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">limit our ability to obtain additional financing
    for funding the expansion of our aircraft fleet, capital
    expenditures, acquisitions, working capital or other purposes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">require us to dedicate a material portion of our
    operating cash flow to fund interest payments on our
    indebtedness, thereby reducing funds available for the expansion
    of our aircraft fleet, capital expenditures, acquisitions,
    working capital and other purposes;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">reduce our flexibility in responding to changing
    business and economic conditions, including reacting to any
    changes in the relationships we have with our code-share
    partners.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Your right to receive payments on the notes
    is effectively subordinated to the rights of our and the
    guarantors&#146; existing and future secured creditors. The
    notes, in certain other circumstances, may effectively be
    subordinated to any existing and future liabilities of Mesa Air
    and its subsidiaries.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders of our secured indebtedness and the
secured indebtedness of the guarantors will have claims that are
senior to your claims as holders of the notes to the extent of
the value of the assets securing that other indebtedness. The
notes are effectively subordinated to our secured indebtedness.
In the event of any distribution or payment of our assets in any
foreclosure, dissolution, winding-up, liquidation,
reorganization, or other bankruptcy proceeding, holders of
secured indebtedness will have prior claim to those assets that
constitute their collateral. Holders of the notes will
participate ratably with all holders of our unsecured
indebtedness that is deemed to be of the same class as the
notes, and potentially with all of our other general creditors,
based upon the respective amounts owed to each holder or
creditor, in our remaining assets. In any of the foregoing
events, we cannot assure you that there will be sufficient
assets to pay amounts due on the notes. As a result, holders of
notes may receive less, ratably, than holders of secured
indebtedness.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2003, the aggregate
amount of our and our subsidiaries&#146; senior secured
indebtedness was $268.1&nbsp;million, which primarily consisted
of $144.3&nbsp;million of notes payable on interim financing of
regional jets, $98.7&nbsp;million outstanding under notes
payable related to our fleet of Beechcraft 1900D turboprop
aircraft, $24.1&nbsp;million in notes payable related to two
CRJ-200 aircraft and $1.0&nbsp;million related to a mortgage
</FONT>

<P align="center"><FONT size="2">7
</FONT>

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<DIV align="left">
<FONT size="2">note on one of our real estate properties. In
addition, we had $9.3&nbsp;million in letters of credit
outstanding at December&nbsp;31, 2003.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, the notes are effectively
subordinated to all existing and future liabilities, including
claims with respect to trade payables, of any subsidiary which
is not a guarantor of the notes. All of our existing
wholly-owned domestic subsidiaries are guarantors of the notes
and all future wholly-owned domestic subsidiaries will be
required to guarantee the notes. In addition, our wholly-owned
foreign subsidiary, MAGI Insurance, Ltd., is a guarantor of the
notes on an unsecured senior basis and we may, in certain
circumstances, add any newly formed or acquired wholly-owned
foreign subsidiaries as guarantors in the future. Each of our
other non-domestic subsidiaries and non-wholly-owned domestic
subsidiaries will be required to guarantee the notes only so
long as such subsidiary guarantees other indebtedness of ours.
As a result, in the future, we may have subsidiaries that are
not guarantors of the notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Furthermore, if we fail to deliver our common
stock upon conversion of a note and thereafter become the
subject of bankruptcy proceedings, a holder&#146;s claim for
damages arising from such failure could be subordinated to all
of our and our subsidiaries&#146; existing and future
obligations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our financial results may be adversely
    impacted if we are subsequently held liable for the obligations
    of our former subsidiary CCAir, Inc.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the fourth quarter of fiscal 2002 we
established a reserve related to CCAir of $19.8&nbsp;million for
restructuring and impairment charges. Of these restructuring
charges, $12.0&nbsp;million was subsequently reversed in the
second quarter of fiscal 2003, upon the determination, after
consultation with counsel, that we are not liable for the
aircraft lease obligations and aircraft related return costs
incurred solely by CCAir and not guaranteed by us. In the event
this determination is challenged and we are subsequently
determined to be liable for such CCAir obligations, our
financial results and our ability to make payments on the notes
could be adversely impacted.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We are a holding company, and we may not
    have access to the cash flow and other assets of the
    subsidiaries that may be needed to make payment on the
    notes.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although substantially all of our business is
conducted through our subsidiaries, none of our subsidiaries is
obligated to make funds available to us for payment on our
indebtedness, including the notes. Accordingly, our ability to
make payments on the notes is dependent on the earnings and the
distribution of funds from our subsidiaries. Furthermore, the
guarantors are permitted under the terms of our indebtedness to
incur additional indebtedness that may severely restrict or
prohibit the making of distributions, the payment of dividends
or the making of loans by the guarantors to us. We cannot assure
you that the agreements governing the current and future
indebtedness of the guarantors will permit the guarantors to
provide us with sufficient dividends, distributions or loans to
fund payments on these notes when due.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The notes have been issued at a substantial
    discount from their principal amount and, therefore, trigger
    certain U.S.&nbsp;federal income tax consequences for the
    holders of the notes.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes have been issued at a substantial
discount from their principal amount. Consequently, the notes
are treated as issued with original issue discount for
U.S.&nbsp;federal income tax purposes and you will be required
to include such original issue discount in your gross income as
it accrues for U.S.&nbsp;federal income tax purposes in advance
of receipt of any payment on the notes to which the original
issue discount is attributable. To understand how this may
affect you, you should seek advice from your own tax advisor
prior to purchasing these notes. See &#147;Certain United States
Federal Income Tax Considerations&#148; for a more detailed
discussion of the U.S.&nbsp;federal income tax consequences to
the holders of the notes of the purchase, ownership and
disposition of the notes.
</FONT>

<P align="center"><FONT size="2">8
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We may not have the ability to purchase the
    notes at the option of the holders upon certain changes in
    control or to raise the funds necessary to finance such
    purchases.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the occurrence of certain specific kinds of
change of control events, we will be required to offer to
purchase all outstanding notes. We may not have or be able to
raise sufficient funds to make the required purchase of notes.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Federal and state statutes allow courts,
    under specific circumstances, to void guarantees and require
    note holders to return payments received from
    guarantors.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the federal bankruptcy law and comparable
provisions of state fraudulent transfer laws, a guarantee could
be voided, or claims in respect of a guarantee could be
subordinated to all other debts of that guarantor, if, among
other things, at the time it incurred the indebtedness evidenced
by its guarantee, the guarantor received less than reasonably
equivalent value or fair consideration for the incurrence of
such guarantee and the guarantor
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">was insolvent or rendered insolvent by reason of
    such incurrence;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">was engaged in a business or transaction for
    which the guarantor&#146;s remaining assets constituted
    unreasonably small capital;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">intended to incur, or believed that it would
    incur, debts beyond its ability to pay such debts as they mature.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, any payment by that guarantor
pursuant to its guarantee could be voided and required to be
returned to the guarantor, or to a fund for the benefit of the
creditors of the guarantor.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The measures of insolvency for purposes of these
fraudulent transfer laws will vary depending upon the law
applied in any proceeding to determine whether a fraudulent
transfer has occurred. Generally, however, a guarantor would be
considered insolvent if:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the sum of its debts, including contingent
    liabilities, was greater than the fair saleable value of all of
    its assets;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if the present fair saleable value of its assets
    was less than the amount that would be required to pay its
    probable liability on its existing debts, including contingent
    liabilities, as they become absolute and mature;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">it could not pay its debts as they become due.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On the basis of historical financial information,
recent operating history and other factors, we believe that each
guarantor, after giving effect to its guarantee of these notes,
will not be insolvent, will not have unreasonably small capital
for the business in which it is engaged and will not have
incurred debts beyond its ability to pay such debts as they
mature. We cannot assure you, however, as to what standard a
court would apply in making these determinations or that a court
would agree with our conclusions in this regard.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">An active trading market for the notes may
    not develop, and transfers of the notes may be
    restricted.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes comprise a new issue of securities for
which there is currently no public market. The notes will not be
listed on any securities exchange or other stock market or
included in any automated quotation system. We do not know
whether an active trading market will develop for the notes. If
the notes are traded after their initial issuance, they may
trade at a discount from their initial offering price depending
on prevailing interest rates, the market for similar securities,
the price of our common stock, the performance of our common
stock in the marketplace, our performance as a company and other
factors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After we have registered the notes and the shares
of underlying common stock, we will have the right, pursuant to
the registration rights agreement, to suspend the use of the
shelf registration statement in certain circumstances. In the
event of such a suspension, you would not be able to sell any
notes or shares of common stock issuable upon conversion of the
notes.
</FONT>

<P align="center"><FONT size="2">9
</FONT>

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<P align="left">
<B><FONT size="2">Risks Related to Our Business</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The negative impact of the
    September&nbsp;11, 2001 terrorist attacks and the resulting
    government responses could be material to our financial
    condition, results of operations and prospects.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The terrorist attacks of September&nbsp;11, 2001
were highly publicized. The impacts that these events will
continue to have on the airline industry in general, and on us
in particular, are not known at this time, but are expected to
include a substantial impact on our operations due to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a reduction in the demand for travel in the near
    and mid-term until public confidence in the air transportation
    system is restored;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an increase in costs due to enhanced security
    measures and government directives in response to the terrorist
    attacks;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an increase in the cost of aviation insurance in
    general, and the cost and availability of coverage for acts of
    war, terrorism, hijacking, sabotage and similar acts of peril in
    particular;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an increase in airport rents and landing fees.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, we expect that the general increase
in hostilities relating to reprisals against terrorist
organizations and the continued threat of further terrorist
attacks will continue to negatively impact our revenues and
costs in the near and mid-term. The extent of the impact that
the terrorist attacks and their aftermath will have on our
operations, and the sufficiency of our financial resources to
absorb this impact, will depend on a number of factors,
including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the adverse impact that terrorist attacks, and
    the resulting government responses, will have on the travel
    industry and the economy in general;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the potential increase in fuel costs and decrease
    in availability of fuel if oil-producing countries are affected
    by the aftermath of the terrorist attacks, including the
    government&#146;s responses, and our ability to manage this risk
    in connection with that part of our operations where our fuel
    costs are not reimbursed by our code-share partners under the
    terms of our code-share agreements;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to reduce our operating costs and
    conserve financial resources, taking into account the cost
    increases (including significant increases in the cost of
    aviation insurance) expected to result from the aftermath of the
    terrorist attacks and the government&#146;s responses;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any resulting decline in the value of the
    aircraft in our fleet;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to raise additional financing, if
    necessary, taking into account our current leverage and the
    limitations imposed by the terms of our existing indebtedness;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the number of crew members who may be called for
    duty in the reserve forces of the armed services and the
    resulting impact on our ability to operate as planned;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the scope and nature of any future terrorist
    attacks.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We are dependent on our agreements with our
    code-share partners.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We depend on relationships created by our
code-share agreements. We derive a significant portion of our
consolidated passenger revenues from our revenue-guarantee
code-share agreements with America West, United Airlines, and US
Airways. Our code-share partners have certain rights to cancel
the applicable code-share agreement upon the occurrence of
certain events or the giving of appropriate notice, subject to
certain conditions. Although no notice has been given to date
that any party intends to cancel these contracts, there can be
no assurance that they will not serve notice at a later date of
their intention to cancel, forcing us to stop selling those
routes with the applicable partner&#146;s code and potentially
reducing our traffic and revenue. In addition, our code-share
agreement with America West allows America West, subject to
certain restrictions, to reduce the combined CRJ fleets utilized
under the code-share agreement by one aircraft in any six-month
period commencing in January 2007. In addition, beginning in
February 2007, America West may eliminate
</FONT>

<P align="center"><FONT size="2">10
</FONT>

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<DIV align="left">
<FONT size="2">the Dash-8 aircraft upon 180&nbsp;days prior
written notice. America West has used this provision to reduce
the number of aircraft covered by the code-share agreement and
there can be no assurance that, commencing in January 2007, they
will not continue to further reduce the number of covered
aircraft.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, because a majority of our operating
revenues are currently generated under revenue-guarantee
code-share agreements, if any one of them is terminated, our
operating revenues and net income could be materially adversely
affected unless we are able to enter into satisfactory
substitute arrangements or, alternatively, fly under our own
flight designator code, including obtaining the airport
facilities and gates necessary to do so. In 2002 and 2003 and
the three months ended December&nbsp;31, 2002 and 2003, our
America West code-share agreement accounted for 40%, 44%, 46%
and 38%, respectively, of our consolidated passenger revenues
and our US Airways code-share agreement accounted for 55%, 49%,
52% and 47%, respectively, of our consolidated passenger
revenues. Any material modification to, or termination of, our
code-share agreements with any of these partners could have a
material adverse effect on our financial condition, the results
of our operations and the price of our common stock. In
addition, Mesa Airlines began operating as United Express in
July 2003 under a revenue-guarantee code-share agreement with
United Airlines. Should any of our revenue-guarantee code-share
agreements be terminated, we cannot assure you that we would be
able to enter into substitute code-share arrangements, that any
such arrangements would be as favorable to us as the current
code-share agreements or that we could successfully fly under
our own flight designator code.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">If our code-share partners or other
    regional carriers experience events that negatively impact their
    financial strength or operations, our operations also may be
    negatively impacted.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are directly affected by the financial and
operating strength of our code-share partners. Any events that
negatively impact the financial strength of our code-share
partners or have a long-term effect on the use of our code-share
partners by airline travelers would likely have a material
adverse effect on our business, financial condition and results
of operations. In the event of a decrease in the financial or
operational strength of any of our code-share partners, such
partner may seek to reduce, or be unable to make, the payments
due to us under their code-share agreement. In addition, they
may reduce utilization of our aircraft. Although there are
certain monthly guaranteed payment amounts, there are no minimum
levels of utilization specified in the code-share agreements.
UAL Corp., the parent of our code-share partner United Airlines,
has filed petitions for reorganization under Chapter&nbsp;11 of
the U.S.&nbsp;Bankruptcy Code. Additionally, US&nbsp;Airways,
which accounted for 49% of our consolidated passenger revenue in
2003, had its corporate credit rating reduced to
&#145;CCC+&#146; from &#145;B-&#146; by Standard&nbsp;&#38;
Poor&#146;s on May&nbsp;5, 2004. The financial performance of
US&nbsp;Airways could directly affect their ability to perform
under our code-share agreement with them. If any of our
code-share partners, including US&nbsp;Airways, becomes
bankrupt, our code-share agreement with such partner may not be
assumed in bankruptcy and would be terminated. This and other
such events could have an adverse effect on our business,
financial condition and results of operations. In addition, any
negative events that occur to other regional carriers and that
affect public perception of such carriers generally could also
have a material adverse effect on our business, financial
condition and results of operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our code-share partners may expand their
    direct operation of regional jets thus limiting the expansion of
    our relationships with them.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We depend on major airlines like America West,
United Airlines and US Airways electing to contract with us
instead of purchasing and operating their own regional jets.
However, these major airlines possess the resources to acquire
and operate their own regional jets instead of entering into
contracts with us or other regional carriers. We have no
guarantee that in the future our code-share partners will choose
to enter into contracts with us instead of purchasing their own
regional jets or entering into relationships with competing
regional airlines. A decision by America West, United Airlines,
US Airways or any other code-share partners to phase out our
contract-based code-share relationships or to enter into similar
agreements with one or more of our competitors could have a
material adverse effect on our business, financial condition or
results of operations. In addition to Mesa Airlines, US Airways
and United Airlines have similar code-share agreements with
other competing regional airlines. Mesa Airlines is currently
America West&#146;s only code-share partner.
</FONT>

<P align="center"><FONT size="2">11
</FONT>

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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">If we experience a lack of labor
    availability or strikes, it could result in a decrease of
    revenues due to the cancellation of flights.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The operation of our business is significantly
dependent on the availability of qualified employees, including,
specifically, flight crews, mechanics and avionics specialists.
Historically, regional airlines have experienced high pilot
turnover from time to time as a result of major air carriers
hiring experienced commercial pilots away from regional
carriers. Further, the addition of aircraft, especially new
aircraft types, can result in pilots upgrading between aircraft
types and becoming unavailable for duty during the required
extensive training periods. There can be no assurance that we
will be able to maintain an adequate supply of qualified
personnel or that labor expenses will not increase as a result
of a shortage in supply of such workers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At December&nbsp;31, 2003 we had approximately
4,300 employees, a significant number of whom are members of
various labor unions, including the Air Line Pilots Association
and the Association of Flight Attendants. Our collective
bargaining agreement with the Air Line Pilots Association
expires in August 2007 and our collective bargaining agreement
with the Association of Flight Attendants expires in June 2006.
The inability to negotiate acceptable contracts with existing
unions as agreements expire or with new unions could result in
work stoppages by the affected workers, lost revenues resulting
from the cancellation of flights and increased operating costs
as a result of higher wages or benefits paid to union members.
We cannot predict which, if any, other employee groups may seek
union representation or the outcome or the terms of any future
collective bargaining agreement and therefore the effect, if
any, on our financial condition and results of operations. If
negotiations with unions over collective bargaining agreements
prove to be unsuccessful, following specified &#147;cooling
off&#148; periods, the unions may initiate a work action,
including a strike, which could have a material adverse effect
on our business, financial condition and results of operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Increases in our labor costs, which
    constitute a substantial portion of our total operating costs,
    will cause our earnings to decrease.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Labor costs constitute a significant percentage
of our total operating costs, and we have experienced pressure
to increase wages and benefits for our employees. Under our
code-share agreements, our reimbursement rates contemplate labor
costs that increase on a set schedule generally tied to an
increase in the consumer price index or the actual increase in
the contract. We are responsible for our labor costs, and we may
not be entitled to receive increased payments under our
code-share agreements if our labor costs increase above the
assumed costs included in the reimbursement rates. As a result,
a significant increase in our labor costs above the levels
assumed in our reimbursement rates could result in a material
reduction in our earnings.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">If new airline regulations are passed or
    are imposed upon our operations, we may incur increased
    operating costs and experience a decrease in
    earnings.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Laws and regulations, such as those described
below, have been proposed from time to time that could
significantly increase the cost of our operations by imposing
additional requirements or restrictions on our operations. We
cannot predict what laws and regulations will be adopted or what
changes to air transportation agreements will be effected, if
any, or how they will affect us, and there can be no assurance
that laws or regulations currently proposed or enacted in the
future will not increase our operating expenses and therefore
adversely affect our financial condition and results of
operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As an interstate air carrier, we are subject to
the economic jurisdiction, regulation and continuing air carrier
fitness requirements of the Department of Transportation, which
include required levels of financial, managerial and regulatory
fitness. The Department of Transportation is authorized to
establish consumer protection regulations to prevent unfair
methods of competition and deceptive practices, to prohibit
certain pricing practices, to inspect a carrier&#146;s books,
properties and records, to mandate conditions of carriage and to
suspend an air carrier&#146;s fitness to operate. The DOT also
has the power to bring proceedings for the enforcement of air
carrier economic regulations, including the assessment of civil
penalties, and to seek criminal sanctions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are also subject to the jurisdiction of the
FAA with respect to our aircraft maintenance and operations,
including equipment, ground facilities, dispatch, communication,
training, weather observation,
</FONT>

<P align="center"><FONT size="2">12
</FONT>

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<DIV align="left">
<FONT size="2">flight personnel and other matters affecting air
safety. To ensure compliance with its regulations, the FAA
requires airlines to obtain an operating certificate, which is
subject to suspension or revocation for cause, and provides for
regular inspections.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We incur substantial costs in maintaining our
current certifications and otherwise complying with the laws,
rules and regulations to which we are subject. We cannot predict
whether we will be able to comply with all present and future
laws, rules, regulations and certification requirements or that
the cost of continued compliance will not significantly increase
our costs of doing business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The FAA has the authority to issue mandatory
orders relating to, among other things, the grounding of
aircraft, inspection of aircraft, installation of new
safety-related items and removal and replacement of aircraft
parts that have failed or may fail in the future. A decision by
the FAA to ground, or require time-consuming inspections of, or
maintenance on, all or any of our turboprops or regional jets,
for any reason, could negatively impact our results of
operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to state and federal regulation,
airports and municipalities enact rules and regulations that
affect our operations. From time to time, various airports
throughout the country have considered limiting the use of
smaller aircraft, such as Embraer or Canadair regional jets, at
such airports. The imposition of any limits on the use of our
regional jets at any airport at which we operate could interfere
with our obligations under our code-share agreements and
severely interrupt our business operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Fluctuations in fuel costs could adversely
    affect our operating expenses and results.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The price and supply of jet fuel is unpredictable
and fluctuates based on events outside our control, including
geopolitical developments, regional production patterns and
environmental concerns. Although approximately 84% and 90% of
our fuel costs for the fiscal year ended September&nbsp;30, 2003
and three months ended December&nbsp;31, 2003, respectively,
were reimbursed by our code-share partners, price escalations or
reductions in the supply of jet fuel will increase our operating
expenses and, to the extent such fuel costs are not reimbursed
by our code-share partners, could cause our operating results
and net income to decline.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">If additional security and safety measures
    regulations are adopted, we may incur increased operating costs
    and experience a decrease in earnings.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Congress recently adopted increased safety and
security measures designed to increase airline passenger
security and protect against terrorist acts. Such measures have
resulted in additional operating costs to the airline industry.
The Aviation Safety Commission&#146;s report recommends the
adoption of further measures aimed at improving the safety and
security of air travel. We cannot forecast what additional
security and safety requirements may be imposed on our
operations in the future or the costs or revenue impact that
would be associated with complying with such requirements,
although such costs and revenue impact could be significant. To
the extent that the costs of complying with any additional
safety and security measures are not reimbursed by our
code-share partners, our operating results and net income could
be adversely affected.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">If our operating costs increase as our
    aircraft fleet ages and we are unable to pass along such costs,
    our earnings will decrease.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As our fleet of aircraft age, the cost of
maintaining such aircraft, if not replaced, will likely
increase. There can be no assurance that costs of maintenance,
including costs to comply with aging aircraft requirements, will
not materially increase in the future. Any material increase in
such costs could have a material adverse effect on our business,
financial condition and results of operations. Because many
aircraft components are required to be replaced after specified
numbers of flight hours or take-off and landing cycles, and
because new aviation technology may be required to be
retrofitted, the cost to maintain aging aircraft will generally
exceed the cost to maintain newer aircraft. We believe that the
cost to maintain our aircraft in the long-term will be
consistent with industry experience for these aircraft types and
ages used by comparable airlines.
</FONT>

<P align="center"><FONT size="2">13
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that our aircraft are mechanically
reliable based on the percentage of scheduled flights completed
and as of March&nbsp;31, 2004 the average age of our regional
jet fleet is 2.85&nbsp;years. However, there can be no assurance
that such aircraft will continue to be sufficiently reliable
over longer periods of time. Furthermore, any public perception
that our aircraft are less than completely reliable could have a
material adverse effect on our business, financial condition and
results of operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our fleet expansion program will require a
    significant increase in our leverage and the financing we
    require may not be available on favorable terms or at
    all.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The airline business is very capital intensive
and, as a result, many airline companies are highly leveraged.
During the fiscal years ended September&nbsp;30, 2003 and 2002
and the three months ended December&nbsp;31, 2003 and 2002, our
debt service payments totaled $27.4&nbsp;million,
$19.1&nbsp;million, $10.5&nbsp;million and $6.4&nbsp;million,
respectively, and our lease payments totaled
$130.4&nbsp;million, $107.6&nbsp;million, $24.0&nbsp;million and
$20.4&nbsp;million, respectively. We have significant lease
obligations with respect to our aircraft and ground facilities,
which aggregated approximately $2.1&nbsp;billion at
December&nbsp;31, 2003. As of December&nbsp;31, 2003, our growth
strategy involves the acquisition of 22 more Bombardier regional
jets during fiscal 2004. As of December&nbsp;31, 2003, the
Company had permanently financed 19 of the CRJ-700 and CRJ-900
aircraft delivered under the 2001 BRAD agreement; the remaining
six aircraft were subject to interim financing. Subsequent to
quarter end, the Company took delivery of three additional
Bombardier CRJ-900 aircraft. In December 2003, the Company
completed permanent financing of one CRJ-700 and seven CRJ-900
aircraft. In January 2004, the Company obtained a financing
commitment for 11CRJ-700 and CRJ-900 aircraft which permanently
financed the six aircraft subject to interim financing and the
three January deliveries. Two deliveries scheduled for March
2004 will also be permanently financed by the new commitment.
The Company has the ability to fund up to 15 aircraft at one
time on interim financing provided by the manufacturer. Its
ability to obtain additional interim financing is contingent
upon obtaining permanent financing for the aircraft already
delivered. There are no assurances the Company will be able to
obtain permanent financing for future aircraft deliveries. If we
are able to obtain financing for these aircraft, it will
significantly increase our mandatory lease and debt service
payments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There can be no assurance that our operations
will generate sufficient cash flow to make such payments or that
we will be able to obtain financing to acquire the additional
aircraft necessary for our expansion. If we default under our
loan or lease agreements, the lender/lessor has available
extensive remedies, including, without limitation, repossession
of the respective aircraft and, in the case of large creditors,
the effective ability to exert control over how we allocate a
significant portion of our revenues. Even if we are able to
timely service our debt, the size of our long-term debt and
lease obligations could negatively affect our financial
condition, results of operations and the price of our common
stock in many ways, including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">increasing the cost, or limiting the availability
    of, additional financing for working capital, acquisitions or
    other purposes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">limiting the ways in which we can use our cash
    flow, much of which may have to be used to satisfy debt and
    lease obligations;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">adversely affecting our ability to respond to
    changing business or economic conditions or continue our growth
    strategy.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we need funds and cannot raise them on
acceptable terms, we may be unable to realize our current plans
or take advantage of unanticipated opportunities and could be
required to slow our growth.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We depend on Bombardier to supply us with
    the aircraft we require to expand.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2003, we are obligated
under our code-share agreements to place an additional 37
regional jets in service over the next 12&nbsp;months. We
currently have firm orders with Bombardier for an additional 19
regional jets. We also have options to acquire an additional 70
regional jets that are exercisable through 2008.
</FONT>

<P align="center"><FONT size="2">14
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are dependent on Bombardier as manufacturer of
these jets and certain factors may limit or preclude our ability
to obtain these regional jets, including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Bombardier could refuse, or may not be
    financially able, to perform its obligations under the
    applicable purchase agreement for the delivery of the regional
    jets;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a fire, strike or other event could occur that
    affects Bombardier&#146;s ability to completely or timely
    fulfill its contractual obligations.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any disruption or change in the delivery schedule
of these regional jets would affect our overall operations and
our ability to fulfill our obligations under our code-share
agreements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our operations could be materially adversely
affected by the failure or inability of Bombardier or any key
component manufacturers to provide sufficient parts or related
support services on a timely basis or by an interruption of
fleet service as a result of unscheduled or unanticipated
maintenance requirements for our aircraft.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Reduced utilization levels of our aircraft
    under the revenue-guarantee agreements would adversely impact
    our revenues and earnings.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Even though our revenue-guarantee agreements
require a fixed amount per month to compensate us for our fixed
costs, if our aircraft are underutilized (including taking into
account the stage length and frequency of our scheduled flights)
we will lose the opportunity to receive a margin on the variable
costs of flights that would have been flown if our aircraft were
more fully utilized.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">If we incur problems with any of our third
    party service providers, our operations could be adversely
    affected by a resulting decline in revenue or negative public
    perception about our services.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our reliance upon others to provide essential
services on behalf of our operations may result in the relative
inability to control the efficiency and timeliness of contract
services. We have entered into agreements with contractors to
provide various facilities and services required for our
operations, including aircraft maintenance, ground facilities,
baggage handling and personnel training. It is likely that
similar agreements will be entered into in any new markets we
decide to serve. All of these agreements are subject to
termination after notice. Any material problems with the
efficiency and timeliness of contract services could have a
material adverse effect on our business, financial condition and
results of operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">If any of our existing litigation with
    Atlantic Coast Airlines or related regulatory inquiries are
    concluded in a manner adverse to us, our business could be
    adversely affected.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In October 2003, we announced that we had made an
unsolicited proposal to the board of directors of Atlantic Coast
Airlines Holdings, Inc. (&#147;Atlantic Coast&#148;) to acquire
all the outstanding stock of Atlantic Coast.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Following this unsolicited proposal, several
lawsuits were filed by Atlantic Coast and anti-trust
investigations were initiated by the Department of Justice and
the Corporation Counsel for the District of Columbia. On
December&nbsp;23, 2003, we announced that we would not be moving
forward with our proposed offer for Atlantic Coast. As a result
of this announcement, the United States Department of Justice
and Corporation Counsel dropped their antitrust investigations.
Despite this decision, our litigation with Atlantic Coast
remains pending. Until a final determination or dismissal is
issued by the United States District Court for the District of
Columbia, the Company faces the possibility of an adverse result
which could have a negative impact on our business.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We are at risk of losses and adverse
    publicity stemming from any accident involving any of our
    aircraft.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If one of our aircraft were to crash or be
involved in an accident, we could be exposed to significant tort
liability. In this regard, in January 2003 US Airways Flight
5481, operated by our subsidiary Air Midwest,
</FONT>

<P align="center"><FONT size="2">15
</FONT>

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<DIV align="left">
<FONT size="2">crashed shortly after takeoff from Charlotte
Douglas International Airport en route to Greenville/
Spartanburg, South Carolina
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The estates of the passengers from Flight 5481,
or the passengers, or their estates, of any other future
aircraft accident may seek to recover damages for death or
injury. Although we believe our present insurance coverage is
sufficient to cover any claims arising from the crash of Flight
5481, there can be no assurance that the insurance we carry to
cover damages arising from these or any future accidents will be
adequate. Accidents could also result in unforeseen mechanical
and maintenance costs. In addition, any accident involving an
aircraft that we operate could create a public perception that
our aircraft are not safe, which could result in air travelers
being reluctant to fly on our aircraft. To the extent a decrease
is associated with our operations not covered by our code- share
agreements, such a decrease could have a material adverse affect
on our business, financial condition or results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are also subject to ongoing investigations by
the FAA and the National Transportation Safety Board with
respect to the events surrounding the crash of Flight 5481. The
imposition of substantial civil penalties, with respect to
Flight 5481 or any other aircraft accident, would have a
material adverse impact on our earnings.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">If we become involved in any material
    litigation or any existing litigation is concluded in a manner
    adverse to us, our earnings may decline.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are, from time to time, subject to various
legal proceedings and claims, either asserted or unasserted. Any
such claims, whether with or without merit, could be
time-consuming and expensive to defend and could divert
management&#146;s attention and resources. There can be no
assurance regarding the outcome of current or future litigation.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our business would be harmed if we lose the
    services of our key personnel.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our success depends to a large extent on the
continued service of our executive management team. We have
employment agreements with certain executive officers, but it is
possible that members of executive management may leave us.
Departures by our executive officers could have a negative
impact on our business, as we may not be able to find suitable
management personnel to replace departing executives on a timely
basis. We do not maintain key-man life insurance on any of our
executive officers.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We may experience difficulty finding,
    training and retaining employees.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our business is labor-intensive, we require large
numbers of pilots, flight attendants, maintenance technicians
and other personnel and we anticipate that our expansion plans
will require us to recruit, train and retain a significant
number of new employees over the next several years.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The airline industry has from time to time
experienced a shortage of qualified personnel, specifically
pilots and maintenance technicians. In addition, as is common
with most of our competitors, we have faced considerable
turnover of our employees. Although our employee turnover has
decreased significantly since September&nbsp;11, 2001, our
pilots, flight attendants and maintenance technicians often
leave to work for larger airlines, which generally offer higher
salaries and better benefit programs than regional airlines are
financially able to offer. Should the turnover of employees,
particularly pilots and maintenance technicians, sharply
increase, the result will be significantly higher training costs
than otherwise would be necessary. We cannot assure you that we
will be able to recruit, train and retain the qualified
employees that we need to carry out our expansion plans or
replace departing employees. If we are unable to hire and retain
qualified employees at a reasonable cost, we may be unable to
complete our expansion plans, which could have a material
adverse affect our financial condition, results of operations
and the price of our common stock.
</FONT>

<P align="center"><FONT size="2">16
</FONT>

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<P align="left">
<B><FONT size="2">Risks Related To Our Industry</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">If competition in the airline industry
    increases, we may experience a decline in revenue.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Increased competition in the airline industry as
well as competitive pressure on our code-share partners or in
our markets could have a material adverse effect on our
business, financial condition and results of operation. The
airline industry is highly competitive. The earnings of many of
the airlines have historically been volatile. The airline
industry is susceptible to price discounting, which involves the
offering of discount or promotional fares to passengers. Any
such fares offered by one airline are normally matched by
competing airlines, which may result in lower revenue per
passenger, i.e., lower yields, without a corresponding increase
in traffic levels. Also, in recent years several new carriers
have entered the industry, typically with low cost structures.
In some cases, new entrants have initiated or triggered price
discounting. The entry of additional new major or regional
carriers in any of our markets, as well as increased competition
from or the introduction of new services by established
carriers, could negatively impact our financial condition and
results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our reliance on our code-share agreements with
our major airline partners for the majority of our revenue means
that we must rely on the ability of our code-share partners to
adequately promote their respective services and to maintain
their respective market share. Competitive pressures by low-fare
carriers and price discounting among major airlines could have a
material adverse effect on our code-share partners and therefore
adversely affect our business, financial condition and results
of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The results of operations in the air travel
business historically fluctuate in response to general economic
conditions. The airline industry is sensitive to changes in
economic conditions that affect business and leisure travel and
is highly susceptible to unforeseen events, such as political
instability, regional hostilities, economic recession, fuel
price increases, inflation, adverse weather conditions or other
adverse occurrences that result in a decline in air travel. Any
event that results in decreased travel or increased competition
among airlines could have a material adverse effect on our
business, financial condition and results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to traditional competition among
airlines, the industry faces competition from ground and sea
transportation alternatives. Video teleconferencing and other
methods of electronic communication may add a new dimension of
competition to the industry as business travelers seek
lower-cost substitutes for air travel.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The airline industry is heavily
    regulated.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Airlines are subject to extensive regulatory and
legal compliance requirements, both domestically and
internationally, that involve significant costs. In the last
several years, the FAA has issued a number of directives and
other regulations relating to the maintenance and operation of
aircraft that have required us to make significant expenditures.
FAA requirements cover, among other things, retirement of older
aircraft, security measures, collision avoidance systems,
airborne windshear avoidance systems, noise abatement, commuter
aircraft safety and increased inspection and maintenance
procedures to be conducted on older aircraft.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We incur substantial costs in maintaining our
current certifications and otherwise complying with the laws,
rules and regulations to which we are subject. We cannot predict
whether we will be able to comply with all present and future
laws, rules, regulations and certification requirements or that
the cost of continued compliance will not significantly increase
our costs of doing business, to the extent such costs are not
reimbursed by our code-share partners.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The FAA has the authority to issue mandatory
orders relating to, among other things, the grounding of
aircraft, inspection of aircraft, installation of new
safety-related items and removal and replacement of aircraft
parts that have failed or may fall in the future. A decision by
the FAA to ground, or require time consuming inspections of or
maintenance on, all or any of our aircraft, for any reason,
could negatively impact our results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to state and federal regulation,
airports and municipalities enact rules and regulations that
affect our operations. From time to time, various airports
throughout the country have considered limiting the
</FONT>

<P align="center"><FONT size="2">17
</FONT>

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<DIV align="left">
<FONT size="2">use of smaller aircraft, at such airports. The
imposition of any limits on the use of our aircraft at any
airport at which we operate could interfere with our obligations
under our code-share agreements and severely interrupt our
business operations.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additional laws, regulations, taxes and airport
rates and charges have been proposed from time to time that
could significantly increase the cost of airline operations or
reduce revenues. For instance, &#147;passenger bill of
rights&#148; legislation was introduced in Congress in 2001
which would have, among other things, required the payment of
compensation to passengers as a result of certain delays and
limited the ability of carriers to prohibit or restrict usage of
certain tickets. If adopted, these measures could have had the
effect of raising ticket prices, reducing revenue and increasing
costs. Restrictions on the ownership and transfer of airline
routes and takeoff and landing slots have also been proposed. In
addition, as a result of the terrorist attacks in New&nbsp;York
and Washington,&nbsp;D.C. in September 2001, the FAA has imposed
more stringent security procedures on airlines. We cannot
predict what other new regulations may be imposed on airlines
and we cannot assure you that laws or regulations enacted in the
future will not materially adversely affect our financial
condition, results of operations and the price of our common
stock.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The airline industry has been subject to a
    number of strikes which could affect our business.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The airline industry has been negatively impacted
by a number of labor strikes. Any new collective bargaining
agreement entered into by other regional carriers may result in
higher industry wages and add increased pressure on us to
increase the wages and benefits of our employees. Furthermore,
since each of our code-share partners is a significant source of
revenue, any labor disruption or labor strike by the employees
of any one of our code-share partners could have a material
adverse effect on our financial condition, results of operations
and the price of our common stock.
</FONT>

<P align="left">
<B><FONT size="2">Risks Related to Our Common Stock</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Provisions in our charter documents might
    deter acquisition bids for us.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our articles of incorporation and bylaws contain
provisions that, among other things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">authorize our board of directors to issue
    preferred stock ranking senior to our common stock without any
    action on the part of the shareholders;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">establish advance notice procedures for
    shareholder proposals, including nominations of directors, to be
    considered at shareholders&#146; meetings;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">authorize a majority of our board of directors,
    in certain circumstances, to fill vacancies on the board
    resulting from an increase in the authorized number of directors
    or from vacancies;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">restrict the ability of shareholders to modify
    the number of authorized directors;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">restrict the ability of stockholders to call
    special meetings of shareholders.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, Section&nbsp;78.438 of the Nevada
general corporation law prohibits us from entering into some
business combinations with interested stockholders without the
approval of our board of directors. These provisions could make
it more difficult for a third party to acquire us, even if doing
so would benefit our stockholders.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our stock price may continue to be volatile
    and could decline substantially.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The stock market has, from time to time,
experienced extreme price and volume fluctuations. Many factors
may cause the market price for our common stock to decline
following this offering, including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our operating results failing to meet the
    expectations of securities analysts or investors in any quarter;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">downward revisions in securities analysts&#146;
    estimates;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">material announcements by us or our competitors;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">18
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">public sales of a substantial number of shares of
    our common stock following this offering;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">governmental regulatory action;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">adverse changes in general market conditions or
    economic trends.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<A name='106'></A>
</DIV>

<!-- link1 "RATIO OF EARNINGS TO FIXED CHARGES" -->

<P align="center">
<B><FONT size="2">RATIO OF EARNINGS TO FIXED CHARGES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The ratio of earnings to fixed charges for each
of the periods indicated is as follows:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="27%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Year Ended September&nbsp;30</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Three Months ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Three Months ended</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December&nbsp;31, 2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December&nbsp;31, 2003</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ratio of earnings to fixed charges (deficiency)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(*</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(*</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(*</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(*</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(*)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Earnings were insufficient to cover fixed charges
    by $12.8&nbsp;million, $72.5&nbsp;million, and
    $17.4&nbsp;million for the fiscal years ended September&nbsp;30,
    1999, 2001 and 2002, respectively, and $1.7&nbsp;million for the
    three months ended December&nbsp;31, 2002.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For purposes of calculating this ratio, earnings
consist of earnings before taxes, minority interest and
extraordinary items plus interest expense (net of capitalized
interest) and the portion of rental expense deemed
representative of the interest expense. Fixed charges consist of
interest expense, the portion of rental expense representative
of interest expense and capitalized interest.
</FONT>

<DIV align="left">
<A name='107'></A>
</DIV>

<!-- link1 "USE OF PROCEEDS" -->

<P align="center">
<B><FONT size="2">USE OF PROCEEDS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will not receive any proceeds from the sale of
the notes or shares underlying the notes by the selling
securityholders. We received estimated net proceeds from the
sale of the notes of approximately $96.7&nbsp;million, after
deducting estimated discounts and commissions for initial
purchasers and estimated fees and expenses associated with the
offering. We used, or plan to use, the net proceeds of the
offering for general corporate purposes and to fund obligations
with respect to future regional jet deliveries.
</FONT>

<P align="center"><FONT size="2">19
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<A name='108'></A>
</DIV>

<!-- link1 "DESCRIPTION OF THE NOTES" -->

<P align="center">
<B><FONT size="2">DESCRIPTION OF THE NOTES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We issued the notes under an indenture dated as
of February&nbsp;10, 2004, between us, as issuer, the guarantors
and U.S.&nbsp;Bank National Association, as trustee. The notes
constitute senior debt securities under the indenture. The
following summarizes the material provisions of the notes. The
following description does not purport to be complete and is
subject to, and qualified by reference to, all of the provisions
of the indenture and the notes, which we urge you to read
because they define your rights as a notes holder. A copy of the
indenture is available upon request to us. As used in this
description of the notes, the words &#147;we,&#148;
&#147;us,&#148; &#147;our,&#148; &#147;Mesa&#148; or &#147;Mesa
Air&#148; refer only to Mesa Air Group, Inc. and do not include
any current or future subsidiary of Mesa Air Group, Inc.
</FONT>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes are limited to $171,409,000 aggregate
principal amount at maturity. The notes will mature on
February&nbsp;10, 2024. The principal amount at maturity of each
note will be $1,000. The notes are payable at the principal
corporate trust office of the paying agent, which initially will
be an office or agency of the trustee, or an office or agency
maintained by us for such purpose, in the Borough of Manhattan,
The City of New&nbsp;York.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes bear cash interest at the rate of
2.115%&nbsp;per year on the principal amount at maturity from
the issue date, or from the most recent date to which interest
has been paid or provided for, until February&nbsp;10, 2009.
During such period, cash interest is payable semiannually in
arrears on February&nbsp;10 and August&nbsp;10 of each year,
commencing on August&nbsp;10, 2004, to holders of record at the
close of business on February 1 or August&nbsp;1 immediately
preceding such interest payment date. Each payment of cash
interest on the notes includes interest accrued through the day
before the applicable interest payment date (or purchase,
redemption or, in certain circumstances, conversion date, as the
case may be). Any payment required to be made on any day that is
not a business day will be made on the next succeeding business
day.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes were offered at a substantial discount
from their $1,000 principal amount at maturity. The notes were
issued at an issue price of $583.40&nbsp;per note. Beginning
February&nbsp;10, 2009, the notes will accrue original issue
discount while they remain outstanding at a rate of
3.625%&nbsp;per year. Original issue discount is the difference
between the issue price and the principal amount (or stated
redemption price for federal income tax purposes) at maturity of
a note. The calculation of the accrual of original issue
discount will be on a semiannual bond equivalent basis, using a
360-day year composed of twelve 30-day months. For United States
federal income tax purposes, the stated redemption price at
maturity of the notes will include the semiannual cash interest
payments payable through February&nbsp;10, 2009 and original
issue discount will accrue at a constant rate of 3.625%&nbsp;per
year, calculated on a semiannual bond equivalent basis
throughout the term of the notes from February&nbsp;10, 2009.
Thus, holders will be required to accrue the cash interest as
original issue discount regardless of their method of tax
accounting but will not recognize any income when such interest
is actually paid. See &#147;Certain United States Federal Income
Tax Considerations&nbsp;&#151; U.S.&nbsp;Holders&nbsp;&#151;
Original Issue Discount.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Original issue discount or cash interest, as the
case may be, will cease to accrue on a note upon its maturity,
conversion, purchase by us at the option of a holder or
redemption. We may not reissue a note that has matured or been
converted, purchased by us at your option, redeemed or otherwise
cancelled, except for registration of transfer, exchange or
replacement of such note.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notes may be presented for conversion at the
office of the conversion agent and for exchange or registration
of transfer at the office of the registrar. The conversion agent
and the registrar shall initially be the trustee. No service
charge will be made for any registration of transfer or exchange
of notes. However, we may require the holder to pay any tax,
assessment or other governmental charge payable as a result of
such transfer or exchange.
</FONT>

<P align="left">
<B><FONT size="2">Ranking of the Notes</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes are senior unsecured obligations and
rank equal in right of payment to all of our other senior
unsecured and unsubordinated indebtedness. The notes are
effectively subordinated to our secured indebted-
</FONT>

<P align="center"><FONT size="2">20
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">ness to the extent of the security. At
December&nbsp;31, 2003, Mesa Air Group, Inc. had
$372.7&nbsp;million of senior indebtedness outstanding.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Guarantees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have caused each of our wholly-owned domestic
subsidiaries, including any person that becomes a wholly-owned
domestic subsidiary after the date of the indenture, to be a
guarantor under the indenture, for so long as such subsidiary
guarantees other indebtedness of ours. As of the date hereof,
all of our wholly-owned domestic subsidiaries are guarantors of
our notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The guarantors jointly and severally guarantee
our obligations under the notes on an unsecured senior basis.
Each guarantee of a guarantor will be equal in right of payment
to all existing and future unsecured and unsubordinated
indebtedness of such guarantor. The guarantees are effectively
subordinated to the guarantors&#146; secured indebtedness to the
extent of the security. As of December&nbsp;31, 2003, the
guarantors had an aggregate of $268.1&nbsp;million of senior
secured indebtedness outstanding (other than the notes), which
primarily consisted of $144.3&nbsp;million of notes payable on
interim financing of regional jets, $98.7&nbsp;million of notes
payable related to our fleet of Beechcraft 1900D turboprop
aircraft, $24.1&nbsp;million in notes payable related to two
CRJ-200 aircraft and $1.0&nbsp;million related to a mortgage
note payable on one of our real estate properties. We also had
$9.3&nbsp;million in letters of credit outstanding at
December&nbsp;31, 2003. The obligation of each guarantor under
its guarantee will be limited to the greatest amount that would
not render its obligations under the guarantee subject to
avoidance as fraudulent conveyance or fraudulent transfer under
applicable law.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each guarantor that makes payment or distribution
of more than its proportionate share under a guarantee shall be
entitled to contribution from each other such guarantor that has
not paid its proportionate share of such payment or distribution.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture provides that so long as no default
exists or would exist, the guarantee issued by any guarantor
shall be automatically and unconditionally released and
discharged upon any sale to any person that is not affiliated
with us of all of the capital stock of such guarantor owned,
directly or indirectly, by us which transaction is otherwise in
compliance with the indenture. The indenture also provides that
any non-domestic subsidiaries and non-wholly-owned domestic
subsidiaries will only be required to guarantee the notes until
such time as such subsidiary no longer guarantees any of our
indebtedness (other than the notes), at which time such
guarantee by such subsidiary will be released and discharged.
If, however, such subsidiary subsequently guarantees any of our
indebtedness (other than the notes), the guarantee by such
subsidiary will be reinstated.
</FONT>

<P align="left">
<B><FONT size="2">Conversion Rights</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A holder may convert a note, in multiples of
$1,000 principal amount at maturity, into common stock only if
at least one of the conditions described below is satisfied. In
addition, a holder may convert a note only until the close of
business on the second business day prior to the redemption date
if we call a note for redemption. A note for which a holder has
delivered a purchase notice or a change of control purchase
notice requiring us to purchase the note may be surrendered for
conversion only if such notice is withdrawn in accordance with
the indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The initial conversion rate is
40.3737&nbsp;shares of common stock per note, subject to
adjustment upon the occurrence of certain events described
below. A holder of a note otherwise entitled to a fractional
share will receive cash equal to the applicable portion of the
then current sale price of our common stock on the trading day
immediately preceding the conversion date. Upon a conversion, we
will have the option to deliver cash or a combination of cash
and shares of our common stock as described below. The ability
to surrender notes for conversion will expire at the close of
business on February&nbsp;10, 2024.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To convert a note into shares of common stock, a
holder must:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">complete and manually sign a conversion notice, a
    form of which is on the back of the note, and deliver the
    conversion notice to the conversion agent;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">21
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">surrender the note to the conversion agent;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if required by the conversion agent, furnish
    appropriate endorsements and transfer documents;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if required, pay all transfer or similar taxes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On conversion of a note, a holder will not
receive any cash payment of interest representing accrued
original issue discount or, except as described below, accrued
cash interest. Delivery to the holder of the full number of
shares of common stock into which the note is convertible,
together with any cash payment of such holder&#146;s fractional
shares, will be deemed:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to satisfy our obligation to pay the principal
    amount at maturity of the note;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to satisfy our obligation to pay accrued original
    issue discount or accrued cash interest attributable to the
    period from the issue date through the conversion date.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result, accrued original issue discount or
accrued cash interest is deemed paid in full rather than
cancelled, extinguished or forfeited. Notwithstanding the
foregoing, accrued cash interest, if any, will be payable upon
any conversion of notes at the option of the holder made
concurrently with or after acceleration of the notes following
an event of default described under &#147;&#151;&nbsp;Events of
Default and Acceleration&#148; below. Holders of notes
surrendered for conversion during the period from the close of
business on any regular record date next preceding any interest
payment date to the opening of business of such interest payment
date will receive the semiannual interest payable on such notes
on the corresponding interest payment date notwithstanding the
conversion and such notes (except notes called for redemption)
upon surrender must be accompanied by funds equal to the amount
of semiannual interest payable on the principal amount at
maturity of notes so converted.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The conversion rate will not be adjusted for
accrued original issue discount or accrued cash interest. A
certificate for the number of full shares of common stock into
which any note is converted, together with any cash payment for
fractional shares, will be delivered through the conversion
agent as soon as practicable following the conversion date. For
a discussion of the tax treatment of a holder receiving shares
of our common stock upon surrendering notes for conversion, see
&#147;Certain United States Federal Income Tax
Considerations&nbsp;&#151; U.S.&nbsp;Holders&nbsp;&#151;
Conversion of Notes into Common Stock.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In lieu of delivery of shares of our common stock
upon notice of conversion of any notes (for all or any portion
of the notes), we may elect to pay holders surrendering notes an
amount in cash per note (or a portion of a note) equal to the
average sale price of our common stock for the five consecutive
trading days immediately following either (a)&nbsp;the date of
our notice of our election to deliver cash as described below if
we have not given notice of redemption, or (b)&nbsp;the
conversion date, in the case of conversion following our notice
of redemption specifying that we intend to deliver cash upon
conversion, in either case multiplied by the conversion rate in
effect on that date. We will inform the holders through the
trustee no later than two business days following the conversion
date of our election to deliver shares of our common stock or to
pay cash in lieu of delivery of the shares, unless we have
already informed holders of our election in connection with our
optional redemption of the notes as described under
&#147;&#151;&nbsp;Redemption of Notes at Our Option.&#148; If we
elect to deliver all of such payment in shares of our common
stock, the shares will be delivered through the conversion agent
no later than the fifth business day following the conversion
date. If we elect to pay all or a portion of such payment in
cash, the payment, including any delivery of our common stock,
will be made to holders surrendering notes no later than the
tenth business day following the applicable conversion date. If
an event of default, as described under &#147;&#151;&nbsp;Events
of Default and Acceleration&#148; below (other than a default in
a cash payment upon conversion of the notes), has occurred and
is continuing, we may not pay cash upon conversion of any notes
or portion of a note (other than cash for fractional shares).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will adjust the conversion rate for:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;dividends or distributions on our common
    stock payable in our common stock or other capital stock of Mesa
    Air;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;subdivisions, combinations or certain
    reclassifications of our common stock;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">22
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;distributions to all holders of our
    common stock of certain rights to purchase our common stock for
    a period expiring within 60&nbsp;days of the record date for
    such issuance at less than the then-current sale price;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;distributions to the holders of our
    common stock of a portion of our assets (including shares of
    capital stock of a subsidiary) or debt securities issued by us
    or certain rights to purchase our securities (excluding cash
    dividends or other cash distributions from current or retained
    earnings unless the annualized amount thereof per share exceeds
    15% of the sale price of our common stock on the day preceding
    the date of declaration of such dividend or other distribution).
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">However, no adjustment to the conversion rate
need be made if holders of the notes may participate in the
transaction without conversion or in certain other cases.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that we elect to make a distribution
to all holders of shares of our common stock pursuant to
clause&nbsp;(3) or clause&nbsp;(4) of the preceding paragraph,
which, in the case of clause&nbsp;(4), has a per share value
equal to more than 15% of the sale price of our shares of common
stock on the day preceding the declaration date for such
distribution, we will be required to give notice to the holders
of notes at least 20&nbsp;days prior to the date for such
distribution and, upon the giving of such notice, the notes may
be surrendered for conversion at any time until the close of
business on the business day prior to the date of distribution
or until we announce that such distribution will not take place.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, the indenture provides that upon
conversion of the notes, the holders of such notes will receive,
in addition to the shares of common stock issuable upon such
conversion, the rights related to such common stock pursuant to
any future shareholder rights plan, whether or not such rights
have separated from the common stock at the time of such
conversion. However, there shall not be any adjustment to the
conversion privilege or conversion rate as a result of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the issuance of the rights;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the distribution of separate certificates
    representing the rights;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the exercise or redemption of such rights in
    accordance with any rights agreement;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the termination or invalidation of the rights.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The indenture permits us to increase the
    conversion rate from time to time.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders of the notes may, in certain
circumstances, be deemed to have received a distribution subject
to United States federal income tax as a dividend upon:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a taxable distribution to holders of common stock
    which results in an adjustment of the conversion rate;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an increase in the conversion rate at our
    discretion;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">failure to adjust the conversion rate in some
    instances.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">See &#147;Certain United States Federal Income
Tax Considerations&nbsp;&#151; U.S.&nbsp;Holders&nbsp;&#151;
Constructive Dividend.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we are a party to a consolidation, merger or
binding share exchange or a transfer of all or substantially all
of our assets, the right to convert a note into common stock may
be changed into a right to convert it into the kind and amount
of securities, cash or other assets of Mesa Air or another
person which the holder would have received if the holder had
converted the holder&#146;s note immediately prior to the
transaction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The conversion agent will, on our behalf,
determine if the notes are convertible and notify the trustee
and us accordingly. If one or more of the conditions to the
conversion of the notes has been satisfied, we will promptly
notify the holders of the notes thereof and use our reasonable
best efforts to post this information on our website or
otherwise publicly disclose this information.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Conversion Based on Common Stock
Price.</FONT></I><FONT size="2"> Holders may surrender notes for
conversion into our shares of common stock in any fiscal quarter
commencing after March&nbsp;31, 2004 if, as of the last day of
the preceding
</FONT>

<P align="center"><FONT size="2">23
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">fiscal quarter, the sale price of our common
stock for at least 20 trading days in a period of 30 consecutive
trading days ending on the last trading day of such preceding
fiscal quarter is more than 110% of the accreted conversion
price per share of common stock on the last day of such
preceding fiscal quarter. If the foregoing condition is
satisfied, then the notes will be convertible at any time at the
option of the holder, through maturity. Upon a conversion, we
will have the right to deliver cash or a combination of cash and
common stock, as described below.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The accreted conversion price per share as of any
day will equal the issue price of a note plus the accrued
original issue discount to that day, divided by the number of
shares of common stock issuable upon conversion of a note on
that day. The sale price of our common stock on any trading day
means the closing per share sale price (or if no closing sale
price is reported, the average of the bid and ask prices or, if
more than one in either case, the average of the average bid and
the average ask prices) on such date on the principal national
securities exchange on which the common stock is listed or, if
our common stock is not listed on a national securities
exchange, as reported by the Nasdaq National Market or otherwise
as provided in the indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The conversion trigger price per share of our
common stock in respect of each of the first 20 fiscal quarters
following issuance of the notes is $15.89. This conversion
trigger price reflects the accreted conversion price per share
of common stock multiplied by 110%. Thereafter, the accreted
conversion price per share of common stock increases each fiscal
quarter by the accreted original issue discount for the quarter.
The conversion trigger price per share for the fiscal quarter
beginning January&nbsp;1, 2024 is $27.14. The foregoing
conversion trigger prices assume that no events have occurred
that would require an adjustment to the conversion rate.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Conversion Based on Trading Price of the
Notes.</FONT></I><FONT size="2"> On or before February&nbsp;10,
2019, a holder also may convert its notes into shares of our
common stock at any time after a 10 consecutive trading-day
period in which the average of the trading prices for the notes
for that 10 trading-day period was less than 103% of the average
conversion value for the notes during that period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The conversion value of a note is equal to the
product of the closing sale price for shares of our common stock
on a given day multiplied by the then current conversion rate,
which is the number of shares of common stock into which each
note is then convertible. The trading price of the notes on any
date of determination is the average of the secondary market bid
quotations per note obtained by us or the calculation agent for
$2,500,000 principal amount of notes at approximately
3:30&nbsp;p.m., New&nbsp;York City time, on such determination
date from two independent nationally recognized securities
dealers we select, provided that if at least two such bids
cannot reasonably be obtained by us or the calculation agent,
but one such bid is obtained, then this one bid shall be used.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Conversion Based on
Redemption.</FONT></I><FONT size="2"> A holder may surrender for
conversion a note called for redemption at any time prior to the
close of business on the second business day immediately
preceding the redemption date, even if it is not otherwise
convertible at such time. A note for which a holder has
delivered a purchase notice or a change of control purchase
notice, as described below, requiring us to purchase such note
may be surrendered for conversion only if such notice is
withdrawn in accordance with the indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A &#147;business day&#148; is any weekday that is
not a day on which banking institutions in The City of
New&nbsp;York or the city in which the trustee&#146;s corporate
trust office is located are authorized or obligated to close. A
&#147;trading day&#148; is any day on which the Nasdaq National
Market is open for trading or, if the applicable security is not
quoted on the Nasdaq National Market, a day on which trades may
be made on the principal market the applicable security is then
traded.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Conversion upon Occurrence of Certain
Corporate Transactions.</FONT></I><FONT size="2"> If we are
party to a consolidation, merger or binding share exchange or a
transfer of all or substantially all of our assets, a note may
be surrendered for conversion at any time from and after the
date which is 15&nbsp;days prior to the anticipated effective
date of the transaction until 15&nbsp;days after the actual
effective date of such transaction, and at the effective date,
the right to convert a note into common stock will be changed
into a right to convert it into the kind and amount of
securities, cash or other assets of Mesa Air or another person
which the holder would have received if the holder had converted
the holder&#146;s notes immediately prior to the transaction. If
such transaction
</FONT>

<P align="center"><FONT size="2">24
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">also constitutes a change of control of Mesa Air,
the holder will be able to require us to purchase all or a
portion of such holder&#146;s notes as described under
&#147;&#151;&nbsp;Change of Control Permits Purchase of Notes by
Mesa Air at the Option of the Holder.&#148;
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes are also be convertible upon the
occurrence of certain distributions resulting in an adjustment
to the conversion price as described above.
</FONT>

<P align="left">
<B><FONT size="2">Redemption of Notes at Our Option</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No sinking fund is provided for the notes. Prior
to February&nbsp;10, 2009, we cannot redeem the notes at our
option. Beginning on February&nbsp;10, 2009, we may redeem the
notes for cash, as a whole at any time or from time to time in
part. We will give not less than 30&nbsp;days&#146; or more than
60&nbsp;days&#146; notice of redemption by mail to holders of
notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If redeemed at our option, the notes will be
redeemed at a price equal to the sum of the issue price plus
accrued original issue discount and accrued cash interest, if
any, on such notes to the applicable redemption date. The table
below shows the redemption prices of a note on February&nbsp;10,
2009, on each February&nbsp;10 thereafter prior to maturity and
at maturity on February&nbsp;10, 2024. In addition, the
redemption price of a note that is redeemed between the dates
listed below would include an additional amount reflecting the
additional accrued original issue discount that has accrued on
such note since the immediately preceding date in the table
below.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="54%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(2)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(3)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Note Issue</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accrued Original</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Redemption</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Redemption Date</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issue Discount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price (1) + (2)</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2009
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2010
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">604.74</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2011
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43.46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">626.86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2012
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66.39</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">649.79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2013
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">90.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">673.56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2014
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">114.80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">698.20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2015
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">140.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">723.74</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2016
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">166.81</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">750.21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2017
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">194.25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">777.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2018
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">222.70</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">806.10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2019
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">252.18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">835.58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2020
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">282.75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">866.15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2021
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">314.43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">897.83</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2022
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">347.27</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">930.67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2023
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">381.31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">964.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">At stated maturity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">583.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">416.60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,000.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we convert the notes to semiannual coupon
notes following the occurrence of a tax event, the notes will be
redeemable at the restated principal amount plus accrued and
unpaid interest from the date of the conversion through the
redemption date. However, in no event may the notes be redeemed
prior to February&nbsp;10, 2009. For more information on this
optional conversion, see &#147;Optional Conversion to Semiannual
Coupon Notes upon Tax Event.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If less than all of the outstanding notes are to
be redeemed, the trustee will select the notes to be redeemed in
principal amounts at maturity of $1,000 or integral multiples of
$1,000. In this case, the trustee may select the notes by lot,
<I>pro rata </I>or by any other method the trustee considers
fair and appropriate. If a portion of a holder&#146;s notes is
selected for partial redemption and the holder converts a
portion of the notes, the converted portion will be deemed to be
the portion selected for redemption.
</FONT>

<P align="center"><FONT size="2">25
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">
<B><FONT size="2">Purchase of Notes at the Option of the
Holder</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On the purchase dates of February&nbsp;10, 2009,
February&nbsp;10, 2014 and February&nbsp;10, 2019, we may, at
the option of the holder, be required to purchase, at the
purchase price set forth below plus accrued cash interest, if
any, to the purchase date, any outstanding note for which a
written purchase notice has been properly delivered by the
holder and not withdrawn, subject to certain additional
conditions. Holders may submit their written purchase notice to
the paying agent at any time from the opening of business on the
date that is 20 business days prior to such purchase date until
the close of business on the business day immediately preceding
such purchase date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The purchase price of a note will be:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">$583.40&nbsp;per note on February&nbsp;10, 2009;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">$698.20&nbsp;per note on February&nbsp;10,
    2014;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">$835.58&nbsp;per note on February&nbsp;10, 2019.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The above purchase prices reflect a price equal
to the sum of the issue price and accrued original issue
discount, if any, on such notes as of the applicable purchase
date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may, at our option, elect to pay the purchase
price in cash or shares of common stock, or any combination
thereof. For a discussion of the tax treatment of a holder
receiving cash, common stock or any combination thereof, see
&#147;Certain United States Federal Income Tax
Considerations&nbsp;&#151; U.S.&nbsp;Holders&nbsp;&#151; Sale,
Exchange, Redemption and Other Disposition of Notes&#148; and
&#147;&#151;&nbsp;Conversion of Notes into Common Stock.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If prior to a purchase date the notes have been
converted to semiannual coupon notes following the occurrence of
a tax event, the purchase price will be equal to the restated
principal amount plus accrued and unpaid cash interest from the
date of the conversion to the purchase date. For more
information on this optional conversion, see
&#147;&#151;&nbsp;Optional Conversion to Semiannual Coupon Notes
upon Tax Event.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will be required to give notice on a date not
less than 20 business days prior to each purchase date to all
holders at their addresses shown in the register of the
registrar, and to beneficial owners as required by applicable
law, stating among other things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the amount of the purchase price;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">whether we will pay the purchase price of the
    notes in cash or common stock or any combination thereof,
    specifying the percentages of each;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">if we elect to pay in common stock, the
    calculation of the market price of the common stock;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the procedures that holders must follow to
    require us to purchase their notes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The purchase notice given by each holder electing
to require us to purchase notes shall state:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the certificate numbers of the holder&#146;s
    notes to be delivered for purchase;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the portion of the principal amount at maturity
    of notes to be purchased, which must be $1,000 or an integral
    multiple of $1,000;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">that the notes are to be purchased by us pursuant
    to the applicable provisions of the notes;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">in the event we elect, pursuant to the notice
    that we are required to give, to pay the purchase price in
    common stock, in whole or in part, but the purchase price is
    ultimately to be paid to the holder entirely in cash because any
    of the conditions to payment of the purchase price or portion of
    the purchase price in common stock is not satisfied prior to the
    close of business on the purchase date, as described below,
    whether the holder elects:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to withdraw the purchase notice as to some or all
    of the notes to which it relates;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to receive cash in respect of the entire purchase
    price for all notes or portions of notes subject to such
    purchase notice.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">26
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the purchase price for the notes subject to
the purchase notice is ultimately to be paid to a holder
entirely in cash because we have not satisfied one or more of
the conditions to payment of the purchase price in common stock
prior to the close of business on the purchase date, a holder
shall be deemed to have elected to receive cash in respect of
the entire purchase price for all such notes unless such holder
has properly notified us of its election to withdraw the
purchase notice. For a discussion of the tax treatment of a
holder receiving cash instead of common stock, see &#147;Certain
United States Federal Income Tax Considerations&nbsp;&#151;
U.S.&nbsp;Holders&nbsp;&#151; Sale, Exchange, Redemption and
Other Disposition of Notes.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any purchase notice may be withdrawn by the
holder by a written notice of withdrawal delivered to the paying
agent prior to the close of business on the business day prior
to the purchase date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notice of withdrawal shall state:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the principal amount at maturity being withdrawn;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the certificate numbers of the notes being
    withdrawn;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the principal amount at maturity, if any, of the
    notes that remain subject to the purchase notice.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we elect to pay the purchase price, in whole
or in part, in shares of our common stock, the number of such
shares we deliver shall be equal to the portion of the purchase
price to be paid in common stock divided by the market price of
a share of common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will pay cash based on the market price for
all fractional shares of common stock in the event we elect to
deliver common stock in payment, in whole or in part, of the
purchase price. See &#147;Certain United States Federal Income
Tax Considerations&nbsp;&#151; U.S.&nbsp;Holders&nbsp;&#151;
Sale, Exchange, Redemption and Other Disposition of Notes.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The market price of our common stock shall be an
amount equal to the average of the sale prices of our common
stock for the five-trading-day period ending on the third
business day prior to the applicable purchase date, or, if such
business day is not a trading day, then on the last trading day
prior to such business day, appropriately adjusted to take into
account any occurrence that would result in an adjustment of the
conversion rate with respect to the common stock. See
&#147;&#151;&nbsp;Conversion Rights&#148; above for a
description of the manner in which the sale price of our common
stock is determined.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Because the market price of our common stock is
determined prior to the applicable purchase date, holders of
notes bear the market risk with respect to the value of the
common stock to be received from the date such market price is
determined to such purchase date. We may pay the purchase price
or any portion of the purchase price in common stock only if the
information necessary to calculate the market price is published
in a daily newspaper of national circulation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon determination of the actual number of shares
of common stock in accordance with the foregoing provisions, we
will promptly issue a press release and publish such information
on our website.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our right to purchase notes, in whole or in part,
with common stock is subject to our satisfying various
conditions, including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">giving timely notice of our election to purchase
    notes with common stock;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the receipt by the trustee of an officers&#146;
    certificate and an opinion of counsel with respect to the
    issuance of common stock;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">listing the common stock on the Nasdaq National
    Market or listing on a national securities exchange;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the registration of the common stock under the
    Securities Act and the Exchange Act, if required;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any necessary qualification or registration under
    applicable state securities law or the availability of an
    exemption from such qualification and registration.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If such conditions are not satisfied with respect
to a holder prior to the close of business on the purchase date,
we will pay the purchase price of the notes of the holder
entirely in cash. See &#147;Certain United States
</FONT>

<P align="center"><FONT size="2">27
</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">Federal Income Tax Considerations&nbsp;&#151;
U.S.&nbsp;Holders&nbsp;&#151; Sale, Exchange, Redemption and
Other Disposition of Notes.&#148; We may not change the form or
components or percentages of components of consideration to be
paid for the notes once we have given the notice that we are
required to give to holders of notes, except as described in the
first sentence of this paragraph.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with any purchase offer, we will:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">comply with the provisions of Rule&nbsp;13e-4,
    Rule&nbsp;14e-1 and any other tender offer rules under the
    Exchange Act which may then be applicable; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">file Schedule&nbsp;TO or any other required
    schedule under the Exchange Act.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Payment of the purchase price for a note for
which a purchase notice has been delivered and not validly
withdrawn is conditioned upon delivery of the note, together
with necessary endorsements, to the paying agent at any time
after delivery of the purchase notice. Payment of the purchase
price for the note will be made as soon as practicable following
the later of the purchase date or the time of delivery of the
note.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the paying agent holds money or securities
sufficient to pay the purchase price of the note on the business
day following the purchase date in accordance with the terms of
the indenture, then, immediately after the purchase date, the
note will cease to be outstanding and cash interest or original
issue discount on such note will cease to accrue, whether or not
the note is delivered to the paying agent. Thereafter, all other
rights of the holder shall terminate, other than the right to
receive the purchase price upon delivery of the note.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No notes may be purchased for cash at the option
of holders if there has occurred and is continuing an event of
default with respect to the notes, other than a default in the
payment of the purchase price with respect to such notes.
</FONT>

<P align="left">
<B><FONT size="2">Change of Control Permits Purchase of Notes by
Mesa Air at the Option of the Holder</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of a change of control, each holder
will have the right, at the holder&#146;s option, subject to the
terms and conditions of the indenture, to require us to purchase
for cash all or any portion of the holder&#146;s notes. However,
the principal amount at maturity submitted for purchase by a
holder must be $1,000 or an integral multiple of $1,000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will be required to purchase the notes as of a
date no later than 30 business days after the occurrence of such
change of control at a cash price equal to the sum of the issue
price plus accrued original issue discount or accrued cash
interest, if any, on such note to such date of purchase.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If prior to such date of purchase upon a change
of control the notes have been converted to semiannual coupon
notes following the occurrence of a tax event, we will be
required to purchase the notes at a cash price equal to the
restated principal amount plus accrued and unpaid interest from
the date of the conversion to such date of purchase.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Within 15&nbsp;days after the occurrence of a
change of control, we are obligated to mail to the trustee and
to all holders of notes at their addresses shown in the register
of the registrar and to beneficial owners as required by
applicable law a notice regarding the change of control, which
notice shall state, among other things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the events causing a change of control;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the date of such change of control;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the last date on which the purchase right may be
    exercised;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the change of control purchase price;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the change of control purchase date;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the name and address of the paying agent and the
    conversion agent;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the conversion rate and any adjustments to the
    conversion rate resulting from such change of control;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">28
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">that notes with respect to which a change of
    control purchase notice is given by the holder may be converted
    only if the change of control purchase notice has been withdrawn
    in accordance with the terms of the indenture;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the procedures that holders must follow to
    exercise these rights.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To exercise this right, the holder must deliver a
written notice to the paying agent prior to the close of
business on the business day prior to the change of control
purchase date. The required purchase notice upon a change of
control shall state:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the certificate numbers of the notes to be
    delivered by the holder;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the portion of the principal amount at maturity
    of notes to be purchased, which portion must be $1,000 or an
    integral multiple of $1,000;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">that we are to purchase such notes pursuant to
    the applicable provisions of the notes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any such change of control purchase notice may be
withdrawn by the holder by a written notice of withdrawal
delivered to the paying agent prior to the close of business on
the business day prior to the change of control purchase date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notice of withdrawal shall state:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the principal amount at maturity being withdrawn;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the certificate numbers of the notes being
    withdrawn;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the principal amount at maturity, if any, of the
    notes that remain subject to a change of control purchase notice.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Payment of the change of control purchase price
for a note for which a change of control purchase notice has
been delivered and not validly withdrawn is conditioned upon
delivery of the note, together with necessary endorsements, to
the paying agent at any time after the delivery of such change
of control purchase notice. Payment of this change of control
purchase price for such note will be made promptly following the
later of the change of control purchase date or the time of
delivery of such note.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the paying agent holds money sufficient to pay
the change of control purchase price of the note on the business
day following the change of control purchase date in accordance
with the terms of the indenture, then immediately after the
change of control purchase date, cash interest or original issue
discount on the note will cease to accrue, whether or not the
note is delivered to the paying agent. Thereafter, all other
rights of the holder shall terminate, other than the right to
receive the change of control purchase price upon delivery of
the note.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the indenture, a &#147;change of
control&#148; of Mesa Air is deemed to have occurred upon the
occurrence of any of the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the sale, lease, transfer, conveyance or other
    disposition (other than by way of merger or consolidation), in
    one or a series of related transactions, of all or substantially
    all of our and our subsidiaries&#146; assets, taken as a whole,
    to any person or group;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the adoption of a plan relating to our
    liquidation or dissolution;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the consummation of any transaction (including,
    without limitation, any merger or consolidation) the result of
    which is that any person or group becomes the beneficial owner,
    directly or indirectly, of more than 35% of the voting power of
    our outstanding voting stock;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the first day on which more than a majority of
    the members of our board of directors are not continuing
    directors.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">29
</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Continuing directors&#148; means any member
of our board of directors who:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">was a member of our board of directors on the
    date of original issuance of the notes;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">was nominated for election to our board of
    directors with the approval of, or whose election to our board
    of directors was ratified by, at least a majority of the
    continuing directors who were members of our board of directors
    at the time of such nomination or election.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with any purchase offer in the
event of a change of control, we will:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">comply with the provisions of Rule&nbsp;13e-4,
    Rule&nbsp;14e-1 and any other tender offer rules under the
    Exchange Act which may then be applicable; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">file Schedule&nbsp;TO or any other required
    schedule under the Exchange Act.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The change of control purchase feature of the
notes may, in certain circumstances, make more difficult or
discourage a takeover of Mesa Air. The change of control
purchase feature, however, is not the result of our knowledge of
any specific effort:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to accumulate shares of common stock;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to obtain control of us by means of a merger,
    tender offer, solicitation or otherwise;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">part of a plan by management to adopt a series of
    anti-takeover provisions.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Instead, the change of control purchase feature
is a standard term contained in other offerings of securities
similar to the notes that have been marketed by the initial
purchaser. The terms of the change of control purchase feature
resulted from negotiations between the initial purchaser and us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We could, in the future, enter into certain
transactions, including certain recapitalizations, that would
not constitute a change of control with respect to the change of
control purchase feature of the notes but that would increase
the amount of our or our subsidiaries&#146; outstanding
indebtedness.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No notes may be purchased at the option of
holders upon a change of control if there has occurred and is
continuing an event of default with respect to the notes, other
than a default in the payment of the change of control purchase
price with respect to the notes.
</FONT>

<P align="left">
<B><FONT size="2">Events of Default and Acceleration</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following are events of default under the
indenture:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">default in the payment of any principal amount
    (including accrued original issue discount and, if the notes
    have been converted to semiannual coupon notes following a tax
    event, the restated principal amount) at maturity, redemption
    price, purchase price, or change of control purchase price due
    with respect to the notes, when the same become due and payable;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">default in payment of any interest under the
    notes, which default continues for 30&nbsp;days;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our failure to comply with any of our other
    agreements in the notes or the indenture upon our receipt of
    notice of such default from the trustee or from holders of not
    less than 25% in aggregate principal amount at maturity of the
    notes, and our failure or such guarantor&#146;s failure to cure
    (or obtain a waiver of) such default within 60&nbsp;days after
    we receive such notice;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">default in the payment of principal when due or
    resulting in acceleration of other indebtedness of ours for
    borrowed money where the aggregate principal amount with respect
    to which the default or acceleration has occurred exceeds
    $10,000,000, and such acceleration has not been rescinded or
    annulled within a period of 10&nbsp;days after written notice to
    us by the trustee or to us and the trustee by the holders of at
    least 25% in principal amount at maturity of the notes;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any guarantee ceases to be in full force and
    effect or is declared null and void or any guarantor denies that
    it has any further liability under any guarantee, or gives
    notice to such effect (other than by reason of the termination
    of the indenture or the release of any such guarantee in
    accordance with the
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">30
</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">indenture), and such condition shall have
    continued for a period of 30&nbsp;days after written notice of
    such failure requiring the guarantor or us to remedy the same
    shall have been given to us by the trustee or to us and the
    trustee by the holders of 25% in aggregate principal amount at
    maturity of the notes outstanding; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">certain events of bankruptcy, insolvency or
    reorganization affecting us.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If an event of default shall have happened and be
continuing, either the trustee or the holders of not less than
25% in aggregate principal amount at maturity of the notes then
outstanding may declare the issue price of the notes plus the
original issue discount on the notes accrued through the date of
such declaration, and any accrued and unpaid cash interest (or,
if the notes have been converted to semiannual coupon notes
following a tax event, the restated principal amount, plus
accrued interest) through the date of such declaration, to be
immediately due and payable. In the case of certain events of
bankruptcy or insolvency, the issue price of the notes plus the
original issue discount accrued thereon, together with any
accrued cash interest (or, if the notes have been converted to
semiannual coupon notes following a tax event, the restated
principal amount, plus accrued interest) through the occurrence
of such event shall automatically become and be immediately due
and payable.
</FONT>

<P align="left">
<B><FONT size="2">Mergers and Sales of Assets</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture provides that we may not
consolidate with or merge into any person or convey, transfer or
lease our properties and assets substantially as an entity to
another person unless:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the resulting, surviving or transferee person is
    organized and existing under the laws of the United States, any
    state thereof or the District of Columbia, and (if other than
    us) assumes all our obligations under the notes and the
    indenture;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">immediately after giving effect to the
    transaction no event of default has occurred and is
    continuing;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">other conditions described in the indenture are
    met.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the assumption of our obligations by such
corporation in such circumstances, subject to certain
exceptions, we shall be discharged from all obligations under
the notes and the indenture. Although such transactions are
permitted under the indenture, certain of the foregoing
transactions occurring could constitute a change of control of
Mesa Air, permitting each holder to require us to purchase the
notes of such holder as described above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture also provides that a guarantor may
not consolidate with or merge into any person or convey,
transfer or lease its properties and assets substantially as an
entity to another person unless the surviving person assumes the
obligations of such guarantor and the surviving person is a
corporation organized and existing under the laws of the United
States, any state thereof or the District of Columbia, except if
all of the assets or all of the common stock of such guarantor
is sold to a non-affiliate of Mesa Air, in which case the
guarantee is released.
</FONT>

<P align="left">
<B><FONT size="2">Optional Conversion to Semiannual Coupon Notes
upon Tax Event</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">From and after the date of the occurrence of a
tax event, we shall have the option to elect to have interest in
lieu of future accrued original issue discount or cash interest
accrue at 3.625%&nbsp;per year on a principal amount per note
equal to the sum of the issue price and accrued original issue
discount on such note on the date of the tax event or the date
on which we exercise such option, whichever is later.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Such interest shall accrue from the option
exercise date, and shall be payable semiannually on the interest
payment dates of February&nbsp;10 and August&nbsp;10 of each
year to holders of record at the close of business on February 1
or August&nbsp;1 immediately preceding the interest payment
date. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months. Interest will accrue from the
most recent date to which interest, if applicable, has been paid
or provided for or, if no interest is payable or has been paid
or provided for, from the option exercise date. In the event
that we exercise our option to pay interest in lieu of
</FONT>

<P align="center"><FONT size="2">31
</FONT>

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<DIV align="left">
<FONT size="2">accrued original issue discount or cash interest,
the redemption price, purchase price and change of control
purchase price on the notes will be adjusted. However, there
will be no change in the holder&#146;s conversion rights.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A &#147;tax event&#148; means that we shall have
received an opinion from independent tax counsel experienced in
such matters to the effect that, on or after the date of this
prospectus, as a result of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any amendment to, or change (including any
    announced prospective change) in, the laws (or any regulations
    thereunder) of the United States or any political subdivision or
    taxing authority thereof or therein;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any amendment to, or change in, an interpretation
    or application of such laws or regulations by any legislative
    body, court, governmental agency or regulatory authority,
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">in each case which amendment or change is
enacted, promulgated, issued or announced or which
interpretation is issued or announced or which action is taken,
on or after the date of this prospectus, there is more than an
insubstantial risk that accrued original issue discount payable
on the notes either:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">would not be deductible on a current accrual
    basis;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">would not be deductible under any other method,
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">in either case in whole or in part, by us (by
reason of deferral, disallowance, or otherwise) for United
States federal income tax purposes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Clinton administration previously proposed to
change the tax law to defer the deduction of original issue
discount on convertible debt instruments until the issuer pays
the interest. Congress did not enact those proposed changes. It
is not certain what the views of the Bush administration are on
this issue and we cannot assure you that the same or a similar
proposal will not be proposed and enacted.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a similar proposal were ever enacted and made
applicable to the notes in a manner that would limit our ability
to either
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">deduct the interest, including the accrued
    original issue discount, payable on the notes on a current
    accrual basis;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">deduct the interest, including accrued original
    issue discount, payable on the notes under any other method for
    United States federal income tax purposes,
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">such enactment would result in a tax event and
the terms of the notes would be subject to modification at our
option as described above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The modification of the terms of notes by us upon
a tax event as described above could possibly alter the timing
of income recognition by holders of the notes with respect to
the semiannual payments of interest due on the notes after the
date on which we exercise our option to pay interest in lieu of
accrued original issue discount or accrued interest, if any, on
the notes.
</FONT>

<P align="left">
<B><FONT size="2">Modification</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The trustee and we may modify or amend the
indenture or the notes with the consent of the holders of not
less than a majority in aggregate principal amount at maturity
of the notes then outstanding. However, the consent of the
holders of each outstanding note would be required to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">alter the manner of calculation or rate of
    accrual of original issue discount or interest on any note or
    change the time of payment;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make any note payable in money or securities
    other than that stated in the note;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">change the stated maturity of any note;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">reduce the principal amount at maturity, restated
    principal amount, issue price, accrued original issue discount,
    redemption price, purchase price or change of control purchase
    price with respect to any note;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">32
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make any change that adversely affects the rights
    of a holder to convert any note;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make any change that adversely affects the right
    to require us to purchase a note;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">impair the right to institute suit for the
    enforcement of any payment with respect to, or conversion of,
    the notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">change the provisions in the indenture that
    relate to modifying or amending the indenture;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">release any guarantor from any of its obligations
    under its guarantee other than in accordance with the terms of
    the indenture.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Without the consent of any holder of notes, the
trustee and we may enter into supplemental indentures for any of
the following purposes:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to evidence a successor to us and the assumption
    by that successor of our obligations under the indenture and the
    notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to add to our covenants for the benefit of the
    holders of the notes or to surrender any right or power
    conferred upon us;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to secure our obligations in respect of the notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to cure any ambiguity or inconsistency in the
    indenture;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to make any change that does not adversely affect
    the rights of any holder of the notes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holders of a majority in principal amount at
maturity of the outstanding notes may, on behalf of all the
holders of all notes:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">waive compliance by us with restrictive
    provisions of the indenture, as detailed in the
    indenture;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">waive any past default under the indenture and
    its consequences, except a default in the payment of the
    principal amount at maturity, issue price, accrued and unpaid
    interest, accrued original issue discount, redemption price,
    purchase price or change of control purchase price or obligation
    to deliver common stock upon conversion with respect to any note
    or in respect of any provision which under the indenture cannot
    be modified or amended without the consent of the holder of each
    outstanding note affected.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Discharge of the Indenture</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may satisfy and discharge our obligations
under the indenture by delivering to the trustee for
cancellation all outstanding notes or by depositing with the
trustee, the paying agent or the conversion agent, if
applicable, after the notes have become due and payable, whether
at stated maturity or any redemption date, or any purchase date,
or a change of control purchase date, or upon conversion or
otherwise, cash or shares of common stock (as applicable under
the terms of the indenture) sufficient to pay all of the
outstanding notes and paying all other sums payable under the
indenture.
</FONT>

<P align="left">
<B><FONT size="2">Calculations in Respect of Notes</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are responsible for making all calculations
called for under the notes. These calculations include, but are
not limited to, determination of the market prices of our common
stock. We are required to make all these calculations in good
faith and, absent manifest error, our calculations are final and
binding on holders of notes. We are required to provide a
schedule of our calculations to the trustee, and the trustee is
entitled to rely upon the accuracy of our calculations without
independent verification.
</FONT>

<P align="left">
<B><FONT size="2">Limitations of Claims in Bankruptcy</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a bankruptcy proceeding is commenced in
respect of Mesa Air or any guarantor, the claim of a holder of a
note is, under Title&nbsp;11 of the United States Code, limited
to the issue price of the note plus that portion of the original
issue discount, together with any cash interest, that has
accrued from the date of issue to the commencement of the
proceeding.
</FONT>

<P align="center"><FONT size="2">33
</FONT>

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<P align="left">
<B><FONT size="2">Governing Law</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture and the notes and guarantees are
governed by, and construed in accordance with, the law of the
State of New&nbsp;York.
</FONT>

<P align="left">
<B><FONT size="2">Information Concerning the Trustee</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">U.S.&nbsp;Bank National Association is the
trustee, registrar, paying agent and conversion agent under the
indenture for the notes.
</FONT>

<P align="left">
<B><FONT size="2">Book-Entry System</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes are issued in the form of global
securities held in book-entry form. DTC or its nominee is the
sole registered holder of the notes for all purposes under the
indenture. Owners of beneficial interests in the notes
represented by the global securities will hold their interests
pursuant to the procedures and practices of DTC. As a result,
beneficial interests in any such securities are shown on, and
may only be transferred through, records maintained by DTC and
its direct and indirect participants and any such interest may
not be exchanged for certificated securities, except in limited
circumstances. Owners of beneficial interests must exercise any
rights in respect of their interests, including any right to
convert or require purchase of their interests in the notes, in
accordance with the procedures and practices of DTC. Beneficial
owners are not holders and will not be entitled to any rights
under the global securities or the indenture. Mesa Air and the
trustee, and any of their respective agents, may treat DTC as
the sole holder and registered owner of the global securities.
</FONT>

<P align="left">
<B><FONT size="2">Exchange of Global Securities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notes represented by a global security are
exchangeable for certificated securities with the same terms
only if:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">DTC is unwilling or unable to continue as
    depositary or if DTC ceases to be a clearing agency registered
    under the Exchange Act and a successor depositary is not
    appointed by us within 90&nbsp;days;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">we decide to discontinue use of the system of
    book-entry transfer through DTC (or any successor
    depositary);&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a default under the indenture occurs and is
    continuing.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DTC has advised us as follows: DTC is a
limited-purpose trust company organized under the New&nbsp;York
Banking Law, a &#147;banking organization&#148; within the
meaning of the New&nbsp;York Uniform Commercial Code, and a
&#147;clearing agency&#148; registered pursuant to the
provisions of Section&nbsp;17A of the Exchange Act. DTC
facilitates the settlement of transactions among its
participants through electronic computerized book-entry changes
in participants&#146; accounts, eliminating the need for
physical movement of securities certificates. DTC&#146;s
participants include securities brokers and dealers, including
the underwriters, banks, trust companies, clearing corporations
and other organizations, some of whom and/or their
representatives, own DTC. Access to DTC&#146;s book-entry system
is also available to others, such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly.
</FONT>

<P align="left">
<B><FONT size="2">Registration Rights</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We and the guarantors entered into a registration
rights agreement with the initial purchaser of the notes
pursuant to which we, at our expense, for the benefit of the
holders, agreed to file with the SEC a shelf registration
statement covering resale of the notes and the shares of common
stock issued upon conversion of the notes within 90&nbsp;days
after the first date of original issuance of the notes. We
agreed to use our reasonable efforts to cause the shelf
registration statement to become effective within 180&nbsp;days
of such first date of original issuance, and to keep a shelf
registration statement effective until the earlier of
(i)&nbsp;the sale pursuant to a shelf registration statement of
all the securities registered thereunder and (ii)&nbsp;the
expiration of the holding
</FONT>

<P align="center"><FONT size="2">34
</FONT>

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<DIV align="left">
<FONT size="2">period applicable to such securities held by
persons that are not affiliates of Mesa Air under
Rule&nbsp;144(k) under the Securities Act or any successor
provision, subject to certain permitted exceptions.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will be permitted to suspend the use of a
prospectus that is part of a shelf registration statement under
certain circumstances relating to corporate developments, public
filings with the SEC and similar events for a period not to
exceed 45&nbsp;days in any three-month period and not to exceed
an aggregate of 120&nbsp;days in any 12-month period. We will
agree to pay predetermined liquidated damages as described
herein (&#147;liquidated damages&#148;) to holders of the notes
and holders of shares of common stock issuable upon conversion
of the notes if a shelf registration statement is not timely
filed or made effective or if the prospectus is unavailable for
the periods in excess of those permitted above. Such liquidated
damages shall accrue until such failure to file or become
effective or unavailability is cured, (i)&nbsp;in respect of any
notes, at a rate per year equal to 0.25% for the first
90&nbsp;day period after the occurrence of such event and 0.50%
thereafter of the applicable principal amount (as defined below)
thereof and, (ii)&nbsp;in respect of any shares of common stock
issued upon conversion at a rate per year equal to 0.25% for the
first 90&nbsp;day period and 0.50% thereafter of the then
applicable conversion price (as defined below). So long as the
failure to file or become effective or unavailability continues,
we will pay liquidated damages in cash on February&nbsp;10 and
August&nbsp;10 of each year to the holders of record of the
notes or shares of common stock on the immediately preceding
February 1 or August 1. When such registration default is cured,
accrued and unpaid liquidated damages will be paid in cash to
the record holder as of the date of such cure.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A holder who sells notes and shares of common
stock issued upon conversion of the notes pursuant to the shelf
registration statement generally will be required to be named as
a selling securityholder in the related prospectus, deliver a
prospectus to purchasers and be bound by certain provisions of
the registration rights agreement that are applicable to such
holder, including certain indemnification provisions. We will
pay all expenses of a shelf registration statement, provide to
each registered holder copies of such prospectus, notify each
registered holder when the shelf registration statement has
become effective and take certain other actions as are required
to permit, subject to the foregoing, unrestricted resales of the
notes and the shares of common stock issued upon conversion of
the notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The term &#147;applicable principal amount&#148;
means, as of any date of determination, with respect to each
$1,000 principal amount at maturity of notes, the sum of the
initial issue price of such notes plus accrued original issue
discount with respect to such notes through such date of
determination or, if no notes are then outstanding, such sum
calculated as if such notes were then outstanding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The term &#147;applicable conversion price&#148;
means, as of any date of determination, the applicable principal
amount per $1,000 principal amount at maturity of notes as of
such date of determination divided by the conversion rate in
effect as of such date of determination or, if no notes are then
outstanding, the conversion rate that would be in effect were
notes then outstanding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We agreed in the registration rights agreement to
give notice to all holders of the filing and effectiveness of a
shelf registration statement by release made to Reuters Economic
Services and Bloomberg Business News or other reasonable means
of distribution.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The summary herein of certain provisions of
the registration rights agreement is subject to, and is
qualified in its entirety by reference to, all the provisions of
the registration rights agreement, a copy of which is available
upon request to Mesa Air.</FONT></B>

<P align="center"><FONT size="2">35
</FONT>

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</DIV>

<!-- link1 "DESCRIPTION OF CAPITAL STOCK" -->

<P align="center">
<B><FONT size="2">DESCRIPTION OF CAPITAL STOCK</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our authorized capital stock consists of
75,000,000&nbsp;shares of common stock, no par value per share,
and 2,000,000&nbsp;shares of preferred stock, no par value per
share.
</FONT>

<P align="left">
<B><FONT size="2">Common Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This prospectus covers, and the registration
statement of which it is a part, registers the
6,920,415&nbsp;shares of common stock issuable upon conversion
of the notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The shares issued upon the conversion of the
notes are subject to specified anti-dilution provisions set
forth in the indenture relating to the notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of December&nbsp;31, 2003, there were
31,742,507&nbsp;shares of common stock outstanding and held of
record by 1,208&nbsp;stockholders. The holders of common stock
are entitled to one vote for each share held of record on all
matters submitted to a vote of the stockholders. Cumulative
voting for the election of directors is not permitted subject to
preferences that may be applicable to any outstanding shares of
preferred stock, the holders of common stock are entitled to
receive ratably those dividends as may be declared by the board
of directors out of funds legally available therefor. In the
event of a liquidation, our dissolution or winding up, holders
of the common stock are entitled to share ratably in all assets
remaining after payment of liabilities and the liquidation
preferences of any outstanding shares of preferred stock.
Holders of common stock have no preemptive rights and no right
to convert their common stock into any other securities. There
are no redemption or sinking fund provisions applicable to the
common stock. All outstanding shares of common stock are, and
all shares of common stock to be outstanding upon completion of
the offering will be, fully-paid and nonassessable. Our common
stock is listed on the Nasdaq National Market under the symbol
&#147;MESA.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Preferred Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There are, and upon completion of the offering,
there will be, no shares of preferred stock outstanding. The
board of directors has the authority, without further action by
the stockholders, to issue up to 2,000,000&nbsp;shares of
preferred stock, no par value per share, in one or more series
and to fix the powers, preferences, privileges, rights and
qualifications, limitations or restrictions thereof, including
dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences, sinking fund terms and the
number of shares constituting any series or the designation of
the series, without any further vote or action by stockholders.
We believe that the board of directors&#146; authority to set
the terms of, and our ability to issue, preferred stock will
provide flexibility in connection with possible financing
transactions in the future. The issuance of preferred stock,
however, could adversely affect the voting power of holders of
common stock, and the likelihood that the holders will receive
dividend payments and payments upon liquidation and could have
the effect of delaying, deferring or preventing a change of
control in us. We have no present plan to issue any shares of
preferred stock.
</FONT>

<P align="left">
<B><FONT size="2">Anti-Takeover Provisions of Nevada
Law</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are subject to the provisions of the Nevada
private corporation law, which are anti-takeover provisions. In
general, the provisions of Sections&nbsp;78.411-444 prohibit a
publicly held Nevada corporation from engaging in a
&#147;business combination&#148; with an &#147;interested
stockholder&#148; for a period of three years following the date
the person became an interested stockholder, unless (with
certain exceptions) the &#147;business combination&#148; or the
transaction in which the person became an interested stockholder
is approved in a prescribed manner. Generally, a &#147;business
combination&#148; includes a merger, asset or stock sale, or
other transaction resulting in a financial benefit to the
interested stockholder. Generally, an &#147;interested
stockholder&#148; is a person who, together with affiliates and
associates, owns or within three years prior to the
determination of interested stockholder status, did own, 10% or
more of a corporation&#146;s voting stock. The existence of this
provision may have an anti-takeover effect with respect to
transactions not approved in advance by the board of directors,
including discouraging attempts that might result in a premium
over the market price for the shares of common stock held by
stockholders.
</FONT>

<P align="center"><FONT size="2">36
</FONT>

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<P align="left">
<B><FONT size="2">Registration Rights</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In February 2002, we reached an agreement with
Raytheon Aircraft Credit Company to reduce the operating costs
of its Beechcraft 1900D fleet. In consideration for
Raytheon&#146;s financial accommodations under that agreement,
we granted Raytheon an option to purchase up to 233,068 warrants
over a three-year period pursuant to a warrant purchase
agreement. Each warrant entitles the holder to purchase one
share of common stock. Pursuant to the warrant purchase
agreement, Raytheon has the right to cause us to register shares
of common stock under the Securities Act. Under the terms of the
warrant purchase agreement, Raytheon has the right so long as it
holds any warrants or warrant shares, to require us to file a
registration statement under the Securities Act covering all of
the warrant shares held by them and to request that such
registration remain effective until October&nbsp;15, 2006. In
addition, the warrant purchase agreement provides for
&#147;piggyback&#148; registration rights with respect to the
warrant shares whenever we file a registration statement on a
registration form that can be used to register the warrant
shares held by Raytheon. Raytheon must pay its <I>pro rata
</I>share of the registration expenses and reasonable
maintenance cost incurred in connection with these
registrations. We filed a registration statement with the SEC in
2003 to register the resale of the Company&#146;s senior
convertible notes due 2023 and the shares of common stock
issuable upon conversion of such notes. Raytheon exercised its
piggyback registration rights in connection with this SEC filing.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We also granted registration rights to the
holders of our senior convertible notes due 2023. The terms of
such registration rights are substantially the same as the
registration rights described under &#147;Description of
Notes&nbsp;&#151; Registration Rights&#148; with respect to the
senior convertible notes due 2024.
</FONT>

<P align="left">
<B><FONT size="2">Limitations on Liability and Indemnification
of Officers and Directors</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our articles of incorporation provide that, to
the fullest extent permitted by Nevada law, none of our
directors will be personally liable to us or to our stockholders
for monetary damages for breach of fiduciary duties. The
provision effectively eliminates our rights and the rights of
our stockholders to recover monetary damages against a director
for breach of fiduciary duty as a director, including breaches
from grossly negligent conduct. This provision does not,
however, exonerate directors from liability under federal
securities laws or for (1)&nbsp;breach of a director&#146;s duty
of loyalty to us or to our stockholders, (2)&nbsp;acts or
omissions not in good faith or that involve intentional
misconduct or knowing violation of law, (3)&nbsp;specified
willful or negligent acts relating to the payment of dividends
or the repurchase or redemption of securities or (4)&nbsp;any
transaction from which a director has derived an improper
personal benefit. Our bylaws provide for indemnification of our
officers and directors to the fullest extent permitted by
applicable law. We also have entered into separate
indemnification agreements with each of our directors and
executive officers that impose contractual indemnification
obligations on the Company with respect to specified claims made
against such officers and directors.
</FONT>

<P align="left">
<B><FONT size="2">Transfer Agent and Registrar</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Computershare Trust Company is the transfer agent
and registrar for our common stock.
</FONT>

<P align="center"><FONT size="2">37
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<P align="center">
<B><FONT size="2">MATERIAL UNITED STATES FEDERAL INCOME TAX
CONSIDERATIONS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following summary discusses certain material
U.S.&nbsp;federal income tax (and in the case of
non-U.S.&nbsp;holders, as defined below, certain
U.S.&nbsp;federal estate tax) consequences relating to the
purchase, ownership and disposition of the notes and the shares
of common stock into which the notes may be converted. Except
where noted, this summary deals only with notes and shares of
common stock held as capital assets and is applicable only to
initial individual purchasers of notes who purchased the notes
for an amount of cash equal to the initial offering price of
such notes. Additionally, this summary does not deal with
special situations, such as:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">tax consequences to holders who may be subject to
    special tax treatment, such as dealers in securities or
    currencies, banks, financial institutions, insurance companies,
    partnerships, tax- exempt entities and traders in securities
    that elect to use a mark-to-market method of accounting for
    their securities holdings;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">tax consequences to persons holding notes or
    common stock as part of a hedging, integrated, constructive sale
    or conversion transaction or a straddle;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">tax consequences to U.S.&nbsp;holders (as defined
    below) whose &#147;functional currency&#148; is not the
    U.S.&nbsp;dollar;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">alternative minimum tax consequences, if
    any;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">any state, local or foreign tax consequences.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The discussion below is based upon the provisions
of the Internal Revenue Code of 1986, as amended (the
&#147;Code&#148;), and Treasury regulations, rulings and
judicial decisions as of the date hereof. Those authorities may
be changed, perhaps retroactively, so as to result in
U.S.&nbsp;federal income tax consequences different from those
discussed below. There can be no assurance that the Internal
Revenue Service (the &#147;IRS&#148;) will not challenge one or
more of the tax consequences discussed herein. If a partnership
holds our notes or common stock, the tax treatment of a partner
in the partnership will generally depend upon the status of the
partner and the activities of the partnership. If you are a
partner of a partnership holding our notes or common stock, you
should consult your tax adviser. Whether a note is treated as
debt (and not equity) for U.S.&nbsp;federal income tax purposes
is an inherently factual question and no single factor is
determinative. We are treating the notes as indebtedness for
U.S.&nbsp;federal income tax purposes and the following
discussion assumes that such treatment will be respected.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">IF YOU ARE CONSIDERING THE PURCHASE OF NOTES,
YOU SHOULD CONSULT YOUR OWN TAX ADVISERS CONCERNING THE
U.S.&nbsp;FEDERAL INCOME TAX CONSEQUENCES TO YOU AND ANY
CONSEQUENCES ARISING UNDER THE LAWS OF ANY OTHER TAXING
JURISDICTION.</FONT></B>

<P align="left">
<B><FONT size="2">U.S.&nbsp;Holders</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a summary of certain material
U.S.&nbsp;federal income tax consequences that will apply to you
if you are a U.S.&nbsp;holder. A &#147;U.S.&nbsp;holder&#148;
means a beneficial owner of a note or common stock that is:
</FONT>
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    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a citizen or resident alien individual of the
    United States;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a corporation (or any entity treated as a
    corporation for U.S.&nbsp;federal income tax purposes) created
    or organized in or under the laws of the United States or any
    political subdivision of the United States;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an estate the income of which is subject to
    U.S.&nbsp;federal income taxation regardless of its
    source;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a trust if it (1)&nbsp;is subject to the primary
    supervision of a court within the United States and one or more
    U.S.&nbsp;persons have the authority to control all substantial
    decisions of the trust or (2)&nbsp;has a valid election in
    effect under applicable U.S.&nbsp;Treasury regulations to be
    treated as a U.S.&nbsp;person.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">38
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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Original Issue Discount</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes have original issue discount
(&#147;OID&#148;) for U.S.&nbsp;federal income tax purposes, and
accordingly, U.S.&nbsp;holders are subject to special rules
relating to the accrual of income for such purposes.
U.S.&nbsp;holders generally must include OID in gross income for
U.S.&nbsp;federal income tax purposes on an annual basis under a
constant yield accrual method regardless of their regular method
of tax accounting. As a result, U.S.&nbsp;holders will be
required to include OID in income in advance of the receipt of
cash attributable to such income.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes are treated as issued with OID equal to
the excess of a note&#146;s &#147;stated redemption price at
maturity&#148; over its &#147;issue price.&#148; The stated
redemption price at maturity of a note will include all payments
of principal and stated interest on the note. The notes provide
for payment of interest in cash through February&nbsp;10, 2009.
Such interest will be included in the stated redemption price at
maturity and taxed as part of OID and will not be again included
separately in gross income of U.S.&nbsp;holders when accrued or
paid. The issue price is the first price at which a substantial
amount of notes is sold for money (excluding sales to bond
houses, brokers or similar persons or organizations acting as
underwriters, placement agents or wholesalers). The amount of
OID includible in income by an initial U.S.&nbsp;holder is the
sum of the &#147;daily portions&#148; of OID with respect to the
note for each day during the taxable year or portion thereof in
which such U.S.&nbsp;holder holds such note (&#147;accrued
OID&#148;). A daily portion is determined by allocating to each
day in any &#147;accrual period&#148; a pro rata portion of the
OID that accrued in such period. The &#147;accrual period&#148;
of a note may be of any length and may vary in length over the
term of the note, provided that each accrual period is no longer
than one year and each scheduled payment of principal or
interest occurs either on the first or last day of an accrual
period. The amount of OID that accrues with respect to any
accrual period is the product of the note&#146;s adjusted issue
price at the beginning of such accrual period and its yield to
maturity, determined on the basis of compounding at the close of
each accrual period and properly adjusted for the length of such
period. The &#147;adjusted issue price&#148; of a note at the
start of any accrual period is equal to its issue price,
increased by the accrued OID for each prior accrual period and
reduced by any payments of interest and principal made on such
note.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may be required to make payments of liquidated
damages if we do not file or cause to be declared effective a
registration statement, as described under
&#147;&#151;&nbsp;Description of the Notes&nbsp;&#151;
Registration Rights.&#148; We intend to take the position for
U.S.&nbsp;federal income tax purposes that any payments of
liquidated damages should be taxable to you as additional
ordinary income when received or accrued, in accordance with
your method of tax accounting. This position is based in part on
the assumption that as of the date of issuance of the notes, the
possibility that liquidated damages will have to be paid is a
&#147;remote&#148; or &#147;incidental&#148; contingency within
the meaning of applicable U.S.&nbsp;Treasury regulations. Our
determination that such possibility is a remote or incidental
contingency is binding on you, unless you explicitly disclose
that you are taking a different position to the IRS on your tax
return for the year during which you acquire the note. However,
the IRS may take a contrary position from that described above,
which could affect the timing and character of both your income
from the notes and our deduction with respect to the payments of
liquidated damages.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">If we do fail to file or cause to be declared
effective a registration statement, you should consult your tax
advisers concerning the appropriate tax treatment of the payment
of liquidated damages with respect to the notes.</FONT></B>

<DIV>&nbsp;</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Constructive Dividend</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The conversion price of the notes will be
adjusted in certain circumstances. Under section&nbsp;305(c) of
the Code, adjustments (or failures to make adjustments) that
have the effect of increasing your proportionate interest in our
assets or earnings may in some circumstances result in a deemed
distribution to you. Any deemed distributions will be taxable as
a dividend, return of capital, or capital gain in accordance
with the earnings and profits rules under the Code.
</FONT>

<P align="center"><FONT size="2">39
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<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Sale, Exchange, Redemption and other
    Disposition of Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except as provided below under
&#147;&#151;&nbsp;Conversion of Notes into Common Stock,&#148;
you will generally recognize gain or loss upon the sale,
exchange, redemption or other disposition of a note equal to the
difference between the amount realized upon the sale, exchange,
redemption or other disposition and your adjusted tax basis in
the note, which will be equal to the amount paid for the note,
increased by the amount of OID previously included in income
(including in the tax year of disposition) and decreased by the
amount of payments of interest and principal. Any gain or loss
recognized on a disposition of the note will be capital gain or
loss. If you are an individual and have held the note for more
than one year, such capital gain will be subject to tax at a
maximum rate of 15% (through December&nbsp;31, 2008, after which
time it reverts to a maximum rate of 20%). Your ability to
deduct capital losses may be limited.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Conversion of Notes into Common
    Stock</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You will not recognize any income, gain or loss
on the conversion of your notes into common stock except to the
extent of cash received in lieu of a fractional share of common
stock. You will be required to include in gross income daily
portions of the OID not previously included in gross income with
respect to the notes, up to the date of conversion. Cash
received in lieu of a fractional share of common stock generally
should be treated as a payment in exchange for such fractional
share. The amount of gain or loss on the deemed sale of such
fractional share will be equal to the difference between the
amount of cash you receive in respect of such fractional share,
and the portion of your adjusted tax basis in the note that is
allocable to the fractional share. The tax basis of the common
stock received upon a conversion will equal the allocable
portion of the adjusted tax basis of the note that was converted
into common stock. Your holding period for common stock will
include the period during which you held the notes. To the
extent any common stock issued upon a conversion is allocable to
accrued OID, the holding period for such common stock may
commence on the day following the date of delivery of common
stock, although there is no authority precisely on point.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Dividends on Common Stock</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If, after you convert a note into common stock,
we make a distribution of cash or other property (other than
certain pro rata distributions of our common stock) in respect
of that stock, the distribution will be treated as a dividend,
taxable to you at a maximum rate of 15% (through
December&nbsp;31, 2008 after which time it reverts to being
taxable at ordinary income rates), to the extent it is paid from
our current and accumulated earnings and profits. If the
distribution exceeds our current or accumulated earnings and
profits, the excess will be treated first as a tax-free return
of your investment, up to your basis in such common stock. Any
remaining excess will be treated as capital gain. If you are a
corporation, you may be able to claim a deduction for a portion
of any distribution received that is considered a dividend.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Sale or Other Disposition of Common
    Stock</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You will generally recognize capital gain or loss
on a sale or other disposition of common stock. Your gain or
loss will equal the difference between the proceeds you received
and your adjusted tax basis in the stock. The proceeds received
will include the amount of any cash and the fair market value of
any other property received for the stock. If you are an
individual and have held the stock for more than one year, such
capital gain will be subject to tax at a maximum rate of 15%
(through December&nbsp;31, 2008, after which time it reverts to
a maximum rate of 20%). Your ability to deduct capital losses
may be limited.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Exercise of the Optional Redemption or
    Repurchase Right</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a U.S.&nbsp;holder requires us to repurchase a
note on a repurchase date and we issue shares of our common
stock in full satisfaction of the repurchase price, the exchange
of a note for shares of our common stock should be treated in
the same manner as a conversion.
</FONT>

<P align="center"><FONT size="2">40
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a U.S.&nbsp;holder requires us to repurchase a
note on a repurchase date and if we deliver a combination of
cash and shares of our common stock in payment of the repurchase
price, then, in general:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a U.S.&nbsp;holder should recognize gain (but not
    loss) to the extent that the cash and the value of the shares
    exceed its adjusted tax basis in the note, but in no event
    should the amount of recognized gain exceed the amount of cash
    received;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a U.S.&nbsp;holder will be required to include in
    gross income daily portions of the OID up to the date of
    conversion;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a U.S.&nbsp;holder&#146;s basis in the shares
    received should be the same as its basis in the note repurchased
    by us (exclusive of any basis allocable to a fractional share),
    decreased by the amount of cash received (other than cash
    received in lieu of a fractional share), and increased by the
    amount of gain, if any, recognized by such holder (other than
    gain with respect to a fractional share);&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the holding period of the shares received in the
    exchange should include the holding period for the note that was
    repurchased, except that the holding period of shares
    attributable to accrued OID may commence on the day following
    the date of delivery of common stock, although there is no
    authority precisely on point.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we elect to exercise our option to purchase a
note or if a U.S.&nbsp;holder requires us to repurchase a note
on a repurchase date and if, in either event, we deliver to a
holder cash in full satisfaction of the repurchase price, the
repurchase will be treated the same as a sale of the note, as
described above under &#147;&#151;&nbsp;Sale, Exchange,
Redemption and other Disposition of the Notes.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Non-U.S.&nbsp;Holders</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a summary of certain material
U.S.&nbsp;federal tax consequences that will apply to you if you
are a non-U.S.&nbsp;holder. The term
&#147;non-U.S.&nbsp;holder&#148; means a beneficial owner of a
note or common stock that is an individual, corporation, trust
or estate that is not a U.S.&nbsp;holder. Special rules may
apply to certain non-U.S.&nbsp;holders such as &#147;controlled
foreign corporations&#148;, &#147;passive foreign investment
companies&#148;, &#147;foreign personal holding companies&#148;,
persons eligible for benefits under income tax conventions to
which the United States is a party and certain
U.S.&nbsp;expatriates. Non-U.S.&nbsp;holders should consult
their own tax advisers to determine the U.S.&nbsp;federal,
state, local and other tax consequences that may be relevant to
them.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Payment of Interest</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 30% U.S.&nbsp;federal withholding tax will
not apply to any payment to you of interest on a note provided
that:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">you do not actually or constructively own 10% or
    more of the total combined voting power of all classes of our
    stock that are entitled to vote within the meaning of session
    871(h)(3) of the Code;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">you are not a &#147;controlled foreign
    corporation&#148; that is related to us within the meaning of
    section&nbsp;864(d)(4) of the Code;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">you are not a bank whose receipt of interest on a
    note is described in section&nbsp;881(c)(3)(A) of the
    Code;&nbsp;and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">you provide your name and address, and certify,
    under penalties of perjury, that you are not a U.S.&nbsp;person
    (which certification may be made on an IRS Form&nbsp;W-8BEN (or
    successor form)) or (b)&nbsp;you hold your notes through certain
    foreign intermediaries, and you and the foreign intermediary
    satisfy the certification requirements of applicable
    U.S.&nbsp;Treasury regulations.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Special certification rules apply to
non-U.S.&nbsp;holders that are pass-through entities rather than
corporations or individuals.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If you cannot satisfy the requirements described
above, payments of interest will be subject to the 30%
U.S.&nbsp;federal withholding tax, unless you provide us with a
properly executed (1)&nbsp;IRS Form&nbsp;W-8BEN (or
</FONT>

<P align="center"><FONT size="2">41
</FONT>

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<DIV align="left">
<FONT size="2">successor form) claiming an exemption from or
reduction in withholding under the benefit of an applicable tax
treaty or (2)&nbsp;IRS Form&nbsp;W-8ECI (or successor form)
stating that interest paid on the note is not subject to
withholding tax because it is effectively connected with your
conduct of a trade or business in the United States. If you are
engaged in a trade or business in the United States and interest
on a note is effectively connected with the conduct of that
trade or business, you generally will be subject to
U.S.&nbsp;federal income tax on that interest on a net income
basis (although you will be exempt from the 30% withholding tax,
provided you satisfy the certification requirements described
above) in the same manner as if you were a U.S.&nbsp;person as
defined under the Code. In addition, if you are a foreign
corporation, you may be subject to a branch profits tax equal to
30% (or lower applicable treaty rate) of your earnings and
profits for the taxable year, subject to adjustments, that are
effectively connected with your conduct of a trade or business
in the United States.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Absent further relevant guidance from the IRS, we
intend to treat payments of liquidated damages made to
non-U.S.&nbsp;holders as subject to U.S.&nbsp;withholding tax.
Therefore, we intend to withhold on such payments at a rate of
30% unless we receive an IRS Form&nbsp;W-8BEN or an IRS
Form&nbsp;W-8ECI from the non-U.S.&nbsp;holder claiming,
respectively, that such payments are subject to reduction or
elimination of withholding under an applicable treaty or that
such payments are effectively connected with the conduct of a
U.S.&nbsp;trade or business. A non-U.S.&nbsp;holder that is
subject to the withholding tax should consult its own tax
advisers as to whether it can obtain a refund for all or a
portion of the withholding tax on the grounds that the
liquidated damages qualify for the exemption applicable to
interest (described above) within the meaning of the Code or
some other grounds.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Conversion of the Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A non-U.S.&nbsp;holder generally will not
recognize any income, gain or loss on converting a note into
common stock. Any gain recognized as a result of the
holder&#146;s receipt of cash in lieu of a fractional share of
stock would also generally not be subject to U.S.&nbsp;federal
income tax. See &#147;&#151;&nbsp;Sale, Exchange or Redemption
of Notes or Common Stock,&#148; below.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Dividends</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any dividends paid to you with respect to our
common stock (and any deemed dividends resulting from certain
adjustments, or failure to make adjustments, to the number of
shares of common stock to be issued on conversion, see
&#147;&#151;&nbsp;U.S.&nbsp;Holders&nbsp;&#151; Constructive
Dividend&#148; above) will be subject to withholding tax at a
30% rate or such lower rate as may be specified by an applicable
income tax treaty. However, dividends that are effectively
connected with the conduct of a trade or business within the
United States are not subject to the withholding tax, but
instead generally are subject to U.S.&nbsp;federal income tax on
a net income basis at applicable graduated individual or
corporate rates. Certain certification and disclosure
requirements must be complied with in order for effectively
connected income to be exempt from withholding. Any such
effectively connected dividends received by a foreign
corporation may, under certain circumstances, be subject to an
additional branch profits tax at a 30% rate or such lower rate
as may be specified by an applicable income tax treaty. A
non-U.S.&nbsp;holder of common stock who wishes to claim the
benefit of an applicable treaty rate is required to satisfy
applicable certification and other requirements. If you are
eligible for a reduced rate of U.S.&nbsp;withholding tax
pursuant to an income tax treaty, you may obtain a refund of any
excess amounts withheld by filing an appropriate claim for
refund with the IRS.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Sale, Exchange or Redemption of Notes or
    Common Stock</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any gain realized upon the sale, exchange,
redemption or other disposition of a note or share of common
stock generally will not be subject to U.S.&nbsp;federal income
tax unless:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">that gain is effectively connected with the
    conduct of a trade or business in the United States by you,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">you are an individual who is present in the
    United States for 183&nbsp;days or more in the taxable year of
    that disposition, and certain other conditions are met,&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">we are or have been a &#147;U.S.&nbsp;real
    property holding corporation&#148; for U.S.&nbsp;federal income
    tax purposes.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">42
</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A non-U.S.&nbsp;holder whose gain is described in
the first bullet point above generally will be subject to
U.S.&nbsp;federal income tax on the net gain derived from the
sale at the applicable graduated rate(s). A corporate
non-U.S.&nbsp;holder whose gain is described in the first bullet
point above may also be subject to a branch profits tax at a 30%
rate or a lower rate if an income tax treaty applies. An
individual non-U.S.&nbsp;holder described in the second bullet
point above will be subject to a flat 30% U.S.&nbsp;federal
income tax on the gain derived from the sale, which may be
offset by U.S.&nbsp;source capital losses, even though the
holder is not considered a resident of the United States.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe we are not and do not anticipate
becoming a U.S.&nbsp;real property holding corporation for
U.S.&nbsp;federal income tax purposes. However, there can be no
assurances that we will not become a U.S.&nbsp;real property
holding corporation in the future.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">U.S.&nbsp;Federal Estate Tax</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The U.S.&nbsp;federal estate tax will not apply
to notes owned by you at the time of your death, provided that
(1)&nbsp;you do not own 10% or more of the total combined voting
power of all classes of our voting stock (within the meaning of
the Code and the Treasury regulations) and (2)&nbsp;interest on
the note would not have been, if received at the time of your
death, effectively connected with your conduct of a trade or
business in the United States. However, common stock held by you
at the time of your death will be included in your gross estate
for U.S.&nbsp;federal estate tax purposes unless an applicable
estate tax treaty provides otherwise. Noteholders that are
individuals should be aware that there have been recent
amendments to the U.S.&nbsp;federal estate tax rules, and such
persons should consult with their tax advisers before
considering an investment in the notes.
</FONT>

<P align="left">
<B><FONT size="2">Information Reporting and Backup
Withholding</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If you are a U.S.&nbsp;holder, in general,
information reporting requirements will apply to certain
payments of principal and interest on the notes, dividends paid
on the common stock, and the proceeds of sale of a note or share
of common stock unless you are an exempt recipient (such as a
corporation). Backup withholding tax will apply to such payments
if you fail to provide your taxpayer identification number or
certification of exempt status or fail to report in full
dividend and interest income. The backup withholding rate
currently is 28%.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If you are a non-U.S.&nbsp;holder, in general,
you will not be subject to backup withholding and information
reporting with respect to payments that we make to you provided
that we do not have actual knowledge or reason to know that you
are a U.S.&nbsp;person and you have given us the statement
described above under
&#147;&#151;&nbsp;Non-U.S.&nbsp;Holders&nbsp;&#151; Payment of
Interest.&#148; In addition, you will not be subject to backup
withholding or information reporting with respect to the
proceeds of the sale of a note or share of common stock within
the United States or conducted through certain U.S.-related
financial intermediaries, if the payor receives the statement
described above and does not have actual knowledge or reason to
know that you are a U.S.&nbsp;person, as defined under the Code,
or you otherwise establish an exemption. However, we may be
required to report annually to the IRS and to you the amount of,
and the tax withheld, if any, with respect to, any interest or
dividends paid to you, regardless of whether any tax was
actually withheld. Copies of these information returns may also
be made available under the provisions of a specific treaty or
agreement to the tax authorities of the country in which the
non-U.S.&nbsp;holder resides.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any amounts withheld under the backup withholding
rules will be allowed as a refund or a credit against your
U.S.&nbsp;federal income tax liability provided the required
information is furnished timely to the IRS.
</FONT>

<P align="center"><FONT size="2">43
</FONT>

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<DIV align="left">
<A name='111'></A>
</DIV>

<!-- link1 "SELLING SECURITYHOLDERS" -->

<P align="center">
<B><FONT size="2">SELLING SECURITYHOLDERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes were originally issued by us in a
private placement to initial purchaser Merrill Lynch Pierce,
Fenner&nbsp;&#38; Smith Incorporated and were simultaneously
resold by the initial purchaser, in transactions exempt from the
registration requirements of the Securities Act, to persons
reasonably believed by the initial purchaser to be
&#147;qualified institutional buyers&#148; (as defined in
Rule&nbsp;144A under the Securities Act). Each institution that
purchased the notes from the initial purchaser and who has
provided us with a questionnaire setting forth the information
specified below. The selling securityholders, including their
transferees, pledgees, donees and successors (collectively, a
&#147;selling securityholder&#148;), may from time to time offer
and sell pursuant to this prospectus or a supplement hereto any
or all of the notes held by that selling securityholder and
common stock underlying the notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth information as of
May&nbsp;5, 2004, with respect to the selling securityholders
and the principal amounts of notes beneficially owned by each
selling securityholder that may be offered under this
prospectus. This information is based on information provided by
or on behalf of the selling securityholder pursuant to the
questionnaires referred to above. No holder of the notes may
sell the notes or shares without furnishing to us a
questionnaire setting forth the information specified below.
However, as of the date of this prospectus, not every holder has
provided to us a questionnaire. Therefore, the heading
&#147;Other&#148; in the &#147;Name&#148; column below
represents the notes and shares held by holders who have not yet
returned to us their questionnaire.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The selling securityholder may offer all, some or
none of the notes or common stock underlying the notes. In
addition, the selling securityholder may have sold, transferred
or otherwise disposed of all or a portion of their notes since
the date on which they provided the information regarding their
notes in transactions exempt form the registration requirements
of the Securities Act. Based upon information provided by the
selling securityholders, no selling securityholder beneficially
owns one percent or more of our common stock assuming conversion
of the selling securityholder&#146;s notes, except as otherwise
indicated in the table below. Based upon information provided by
the selling securityholder, none of the selling security holders
nor any of their affiliates, officers, directors or principal
equity holders, has held any position or office or has had any
material relationship with us within the past three years.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Information concerning the selling securityholder
may change from time to time and any changed information will be
set forth in post-effective amendments to the registration
statement of which this prospectus is apart. In addition, the
conversion rate and, therefore, the number of shares of common
stock issuable upon conversion of the notes, is subject to
adjustment under certain circumstances. The information is based
on information provided by or on behalf of the selling
securityholders.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="35%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Common Stock Owned</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Principal</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">After Completion of</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Beneficially</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Offering(3)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Notes</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Owned</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Beneficially</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of Notes</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Before the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Offered</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Outstanding</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Offering(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Offered(2)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Offered</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Advent Convertible Master<BR>
    (Cayman) L.P.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">9,595,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5.60</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">387,386</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Advent Convertible Master<BR>
    (Cayman) L.P.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">10,215,600</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5.96</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">412,442</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Akela Capital Master Fund, Ltd.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">16,500,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">9.63</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">666,166</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Alpha U.S.&nbsp;Sub Fund&nbsp;4 LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">370,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">14,938</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Alpha U.S.&nbsp;Sub Fund&nbsp;4 LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">395,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">15,948</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Argent Classic Convertible Arbitrage (Bermuda)
    Fund Ltd.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,800,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1.05</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">72,673</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Argent Classic Convertible Arbitrage Fund LP
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,000,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">40,374</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Argent Classic Convertible Arbitrage
    Fund&nbsp;II, LP
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">420,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">16,957</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">BNP Paribas Equity Strategies, SNC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,121,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1.24</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">85,633</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">BNP Paribas Equity Strategies, SNC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">6,081,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3.55</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">245,512</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">CNH CA Master Account, L.P.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,000,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">40,374</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">44
</FONT>
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="35%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Common Stock Owned</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Principal</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">After Completion of</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Beneficially</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Offering(3)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Notes</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Owned</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Beneficially</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of Notes</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Before the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Offered</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Outstanding</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Offering(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Offered(2)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Offered</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">CooperNeff Convertible Strategies (Cayman) Master
    Fund, LP
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,171,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1.27</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">87,651</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">CooperNeff Convertible Strategies (Cayman) Master
    Fund, LP
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">6,412,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3.74</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">258,876</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Governing Board Employees Benefit Plan of the
    City of Detroit
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">40,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,615</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">HFR Arbitrage Fund
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">554,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">22,367</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">HFR Arbitrage Fund
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">579,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">23,376</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">HighBridge International LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,000,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2.92</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">201,869</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Independence Blue Cross
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">762,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">30,765</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">JMG Capital Partners, LP
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">14,750,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">8.61</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">595,512</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">JMG Triton Offshore Fund, LTD.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">14,750,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">8.61</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">595,512</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">LDG Limited
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">158,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">6,379</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">LDG Limited
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">64,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,584</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Lexington Vantage Fund c/o&nbsp;TQA Investors, LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">37,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,494</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Lexington Vantage Fund c/o&nbsp;TQA Investors, LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">16,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">646</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Lexington Vantage Fund c/o&nbsp;TQA Investors, LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">54,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,180</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Lighthouse Multi-Strategy Master Fund LP
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">300,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">12,112</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Lyxor
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">978,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">39,485</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Lyxor/ Convertible Arbitrage Fund Limited
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">343,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">13,848</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Lyxor/ Convertible Arbitrage Fund Limited
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,074,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">43,361</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Lyxor/ Quest Fund Ltd.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">700,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">28,262</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Meijer Companies, LTD Special Trust
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">100,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,037</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">National Bank of Canada c/o&nbsp;Putnam Lowell
    NBF Securities Inc.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,700,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">68,635</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Ohio Bureau of Workers Compensation
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">147,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,935</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Policeman and Fireman Retirement System of the
    City of Detroit
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">549,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">22,165</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Quest Global Convertible Fund Ltd.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,500,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1.46</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">100,934</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Raytheon Phoenix
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,960,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1.14</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">79,132</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Singlehedge US Convertible Arbitrage Fund
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">602,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">24,305</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Singlehedge US Convertible Arbitrage Fund
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,719,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1.00</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">69,402</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Sphinx Fund c/o&nbsp;TQA Investors, LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">107,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,320</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Sphinx Fund c/o&nbsp;TQA Investors, LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">43,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,736</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Sphinx Fund c/o&nbsp;TQA Investors, LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">160,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">6,460</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Sturgeon Limited
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">339,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">14,897</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">TAG Associates
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">103,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,158</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">TAG Associates
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">81,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,270</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Tribeca Investments LTD.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,000,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1.75</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">121,121</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">TQA Master Fund LTD.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,536,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">62,014</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">TQA Master Fund LTD.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">616,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">24,870</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">TQA Master Fund LTD.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,304,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1.34</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">93,021</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">TQA Master Plus Fund, LTD.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,385,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1.39</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">96,291</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">TQA Master Plus Fund, LTD.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">948,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">38,274</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">TQA Master Plus Fund, LTD.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,582,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2.09</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">144,619</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Trustmark Insurance Company
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">367,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">14,817</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">45
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="35%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Common Stock Owned</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Principal</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">After Completion of</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Beneficially</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Offering(3)</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Notes</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Owned</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Beneficially</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of Notes</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Before the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Offered</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Outstanding</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Offering(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Offered(2)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Offered</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Wachovia Bank National Association
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">21,700,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">12.66</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">876,109</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Wachovia Capital Markets LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,500,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1.46</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">100,934</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Wachovia Securities International LTD
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,000,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2.92</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">%</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">201,869</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Xavex-Convertible Arbitrage&nbsp;7 Fund
    c/o&nbsp;TQA Investors, LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">450,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">18,168</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Xavex-Convertible Arbitrage&nbsp;7 Fund
    c/o&nbsp;TQA Investors, LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">180,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">7,267</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Xavex-Convertible Arbitrage&nbsp;7 Fund
    c/o&nbsp;TQA Investors, LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">675,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">27,252</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Xavex-Convertible Arbitrage&nbsp;10 Fund
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">400,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">16,149</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Zurich Instructional Benchmarks Master Fund Ltd.
    c/o&nbsp;TQA Investors, LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">133,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,370</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Zurich Instructional Benchmarks Master Fund Ltd.
    c/o&nbsp;TQA Investors, LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">327,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">13,202</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Zurich Instructional Benchmarks Master Fund Ltd.
    c/o&nbsp;TQA Investors, LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">489,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">*</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">19,743</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">*</FONT></TD>
    <TD align="left">
    <FONT size="2">Less than 1%
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Figures in this column do not include the shares
    of common stock issuable upon conversion of the notes listed in
    the column to the right.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents shares of common stock issuable upon
    conversion of the notes that are beneficially owned and offered
    by the selling securityholder. The number of shares issuable
    upon conversion is subject to adjustment under certain
    circumstances.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Assumes that all of the notes and/or all of the
    common stock into which the notes are convertible are sold.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">46
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<A name='112'></A>
</DIV>

<!-- link1 "PLAN OF DISTRIBUTION" -->

<P align="center">
<B><FONT size="2">PLAN OF DISTRIBUTION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes and the common stock are being
registered to permit resale of theses securities by the selling
securityholders from time to time after the date of this
prospectus. We have agreed, among other things, to bear the
expenses (other than underwriting discounts and selling
commissions) incurred in connection with the registration and
sale of the notes and the common stock covered by this
prospectus. We will not receive any of the proceeds from the
offering of the notes or the common stock by the selling
securityholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The selling securityholders and their successors,
including their transferees, pledgees or donees or their
successors, may sell the notes and the common stock into which
the notes are convertible directly to purchasers or through
underwriters, broker-dealers or agents, who may receive
compensation in the form of discounts, concessions or
commissions from the selling securityholders or the purchasers.
These discounts, concessions or commissions as to any particular
underwriter, broker-dealer or agent may be in excess of those
customary in the types of transactions involved.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes and the common stock into which the
notes are convertible may be sold in one or more transactions at
fixed prices, at prevailing market prices, at varying prices
determined at the time of sale, or at negotiated prices. These
sales may be effected in cross, block or other types of
transactions:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">on any national securities exchange or
    U.S.&nbsp;inter-dealer system of a registered national
    securities association on which the notes or the common stock
    may be listed or quoted at the time of sale;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">in the over-the-counter market;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">in transactions otherwise than on these exchanges
    or in the over-the-counter market;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">through the writing of options, whether the
    options are listed on an options exchange or otherwise;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">through the settlement of short sales;&nbsp;or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">through any other legally available means.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our common stock is listed for trading on the
Nasdaq National Market under the symbol &#147;Mesa.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the sale of the notes and the
common stock underlying the notes, the selling securityholders
may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales
of the notes or the underlying common stock in the course of
hedging the positions they assume. The selling securityholders
may also sell the notes or the underlying common stock short and
deliver these securities to close out their short positions, or
loan or pledge the notes or the underlying common stock to
broker-dealers that in turn may sell those securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The aggregate proceeds to the selling
securityholders from the sale of the notes or underlying common
stock offered by them will be the purchase price of the notes or
common stock less discounts and commissions, if any. Each of the
selling securityholders reserves the right to accept and,
together with their agents from time to time, to reject, in
whole or in part, any proposed purchase of notes or underlying
common stock to be made directly or through agents.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to comply with the securities laws of
some states, if applicable, the notes and underlying common
stock may be sold in these jurisdictions only through registered
or licensed brokers or dealers. In addition, in some states the
notes and underlying common stock may not be sold unless they
have been registered or qualified for sale or an exemption from
registration or qualification requirements is available and is
complied with.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The selling securityholders and any underwriters,
broker-dealers or agents that participate in the sale of the
notes and underlying common stock may be
&#147;underwriters&#148; within the meaning of
Section&nbsp;2(11) of the Securities Act. Any discounts,
commissions, concessions or profit they earn on any resale of
the shares may be underwriting discounts and commissions under
the Securities Act. Selling securityholders who are
&#147;underwriters&#148; within the meaning of
Section&nbsp;2(11) of the Securities Act will be subject to the
prospectus delivery requirements of the Securities Act. The
selling securityholders have acknowledged that they understand
their
</FONT>

<P align="center"><FONT size="2">47
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">obligations to comply with the provisions of the
Exchange Act and the rules thereunder relating to stock
manipulation, particularly Regulation&nbsp;M.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, any securities covered by this
prospectus that qualify for sale pursuant to Rule&nbsp;144 or
Rule&nbsp;144A of the Securities Act may be sold under
Rule&nbsp;144 or Rule&nbsp;144A rather than pursuant to this
prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To the extent required, the specific notes or
common stock to be sold, the names of the selling
securityholders, the respective purchase prices and public
offering prices, the names of any agent, dealer or underwriter,
and any applicable commissions or discounts with respect to a
particular offer will be set forth in an accompanying prospectus
supplement or, if appropriate, a post-effective amendment to the
registration statement of which this prospectus is a part.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We entered into a registration rights agreement
for the benefit of holders of the notes to register their notes
and common stock under applicable federal and state securities
laws under specific circumstances and at specific times. The
registration rights agreement provides for cross-indemnification
of the selling securityholders and us and their and our
respective directors, officers and controlling persons against
specified liabilities in connection with the offer and sale of
the notes and the common stock, including liabilities under the
Securities Act.
</FONT>

<DIV align="left">
<A name='113'></A>
</DIV>

<!-- link1 "LEGAL MATTERS" -->

<P align="center">
<B><FONT size="2">LEGAL MATTERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The validity of the notes and shares of common
stock issuable upon conversion of the notes will be passed upon
for us by Squire, Sanders&nbsp;&#38; Dempsey L.L.P., 40 North
Central Avenue, Suite&nbsp;2700, Phoenix, Arizona 85004.
</FONT>

<DIV align="left">
<A name='114'></A>
</DIV>

<!-- link1 "EXPERTS" -->

<P align="center">
<B><FONT size="2">EXPERTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The financial statements incorporated in this
prospectus by reference from our Annual Report on Amendment
No.&nbsp;2 of Form&nbsp;10-K/A for the year ended
September&nbsp;30, 2003, have been audited by
Deloitte&nbsp;&#38; Touche LLP, independent auditors, as stated
in their report, which is incorporated herein by reference
(which report expresses an unqualified opinion and includes an
explanatory paragraph relating to our significant code-share
agreements and an explanatory paragraph relating to the
restatement discussed in Note&nbsp;23), and have been so
incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
</FONT>

<P align="center"><FONT size="2">48
</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<HR size="4" noshade color="#000000" style="margin-top: -5px">
</DIV>

<DIV align="left">
<HR size="1" noshade color="#000000" style="margin-top: -10px">
</DIV>

<P align="center">
<B><FONT size="4">[Mesa Airlines LOGO]</FONT></B>

<P align="center">
<B><FONT size="4">$171,409,000</FONT></B>

<P align="center">
<B><FONT size="6">Mesa Air Group, Inc.</FONT></B>

<P align="center">
<B><FONT size="4">Senior Convertible Notes due 2024</FONT></B>

<P align="center">
<B><FONT size="4">And</FONT></B>

<P align="center">
<B><FONT size="4">Shares of Common Stock</FONT></B>

<DIV align="center">
<B><FONT size="4">Issuable upon Conversion Thereof</FONT></B>
</DIV>

<P align="center">
<HR size="1" width="31%" align="center" noshade>

<P align="center">
<B>PROSPECTUS</B>

<P align="center">
<HR size="1" width="31%" align="center" noshade>

<P align="center">
<FONT size="2">May&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004
</FONT>

<P align="left">
<HR size="1" noshade color="#000000" style="margin-top: -2px">

<DIV align="left">
<HR size="4" noshade color="#000000" style="margin-top: -10px">
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">PART&nbsp;II</FONT></B>

<P align="center">
<B><FONT size="2">INFORMATION NOT REQUIRED IN
PROSPECTUS</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;14.</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Other Expenses of Issuance and
    Distribution</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth all expenses
payable by us in connection with the offering of the notes being
registered, other than discounts and commissions. The selling
securityholders will not share any portion of these expenses.
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="77%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Registration Fee
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,717.52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Printing Expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,000.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Legal Fees and Expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100,000.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounting Fees and Expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,000.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Miscellaneous
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,000.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">206,717.52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;15.</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Indemnification of Officers and
    Directors</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Nevada General Corporation Law provides for
indemnification of directors, officers, employees and agents,
subject to certain limitations (Section&nbsp;78.7502 Nevada
General Corporation Law (&#147;NGCL&#148;)). Article&nbsp;Eighth
of our Certificate of Incorporation provides that we may
indemnify all persons whom it has the power to indemnify under
Section&nbsp;78.7502 of the NGCL, whether civil, criminal,
administrative or investigative (including an action by or in
the right of Mesa, by reason of the fact that he is or was
serving as our director or officer (or is or was serving at our
request in a similar capacity with another entity), shall be
indemnified and held harmless by us to the fullest extent
authorized by the NGCL. The right of indemnification includes
the right to be paid by the Company the expenses incurred in
defending any such action, suit or proceeding in advance of its
final disposition. If required by us, however, such advancement
of expenses shall be made only upon delivery of an undertaking
by such director or officer to repay all amounts so advanced if
it is ultimately determined that such director or officer is not
entitled to be indemnified.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As permitted by Section&nbsp;78.747 of the NGCL,
the Company&#146;s Certificate of Incorporation contains
provisions eliminating a director&#146;s personal liability for
monetary damages to us and our stockholders arising from a
breach of a director&#146;s fiduciary duty except for liability
under Section&nbsp;78.747 of the NGCL or liability for acts or
omissions which involve intentional misconduct, fraud or a
knowing violation of law or for the authorization of the
unlawful payment of a dividend or other distribution on the
Company&#146;s capital stock, or the unlawful purchase of its
capital stock.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;16.</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Exhibits</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following exhibits are filed herewith or
incorporated by reference:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">No.</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description of Exhibit</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture, dated as of February&nbsp;10, 2004
    between Mesa Air Group, Inc., the guarantors named therein and
    U.S.&nbsp;Bank National Association, as Trustee, relating to
    Senior Convertible Notes due 2024.(*)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Registration Rights Agreement dated as of
    February&nbsp;10, 2004 between Mesa Air Group, Inc., the
    subsidiaries of Mesa Air Group, Inc. listed on the signature
    pages thereto, and Merrill Lynch, Pierce, Fenner&nbsp;&#38;
    Smith Incorporated, as Initial Purchaser of the Senior
    Convertible Notes due 2024.(*)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Guarantee (included in
    Exhibit&nbsp;4.1).(*)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Senior Convertible Notes due 2024
    (included in Exhibit&nbsp;4.1).(*)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Specimen Common Stock Certificate.(1)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Opinion of Squire, Sanders&nbsp;&#38; Dempsey
    L.L.P.(*)
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-1
</FONT>

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<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">No.</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description of Exhibit</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Statement of computation of ratio of earnings to
    fixed charges.(*)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Squire, Sanders&nbsp;&#38; Dempsey
    L.L.P. (included in Exhibit&nbsp;5.1).(*)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Deloitte&nbsp;&#38; Touche, LLP.*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Power of Attorney (see signature page in
    Part&nbsp;II of Registration Statement)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Statement of Eligibility of Trustee under the
    Trust Indenture Act of 1939 on Form&nbsp;T-1.*
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="4%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">*</FONT></TD>
    <TD align="left">
    <FONT size="2">Filed herewith.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Incorporated by reference to Mesa Air&#146;s
    Amendment No.&nbsp;1 to Form&nbsp;S-18, Registration
    No.&nbsp;33-11765 filed on March&nbsp;6, 1987.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;17.</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Undertakings</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;The undersigned registrant hereby
undertakes:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;To file, during any period in which
    offers or sales are being made, a post-effective amendment to
    this registration statement:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;To include any prospectus required by
    Section&nbsp;10(a)(3) of the Securities Act of 1933, as amended
    (the &#147;Securities Act&#148;);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;To reflect in the prospectus any facts
    or events arising after the effective date of the registration
    statement (or the most recent post-effective amendment thereof)
    which, individually or in the aggregate, represent a fundamental
    change in the information set forth in the registration
    statement. Notwithstanding the forgoing, any increase or
    decrease in volume of securities offered (if the total dollar
    value of securities offered would not exceed that which was
    registered) and any deviation from the low or high and of the
    estimated maximum offering range may be reflected in the form of
    prospectus filed with the Commission pursuant to
    Rule&nbsp;424(b) if, in the aggregate, the changes in volume and
    price represent no more than a 20&nbsp;percent change in the
    maximum aggregate offering price set forth in the
    &#147;Calculation of Registration Fee&#148; table in the
    effective registration statement;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(iii)&nbsp;To include any material information
    with respect to the plan of distribution not previously
    disclosed in the registration statement or any material change
    to such information in the registration statement;
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">provided, however, that
    paragraphs&nbsp;(i)&nbsp;and (ii)&nbsp;above do not apply if the
    information required to be included in a post-effective
    amendment by those paragraphs is contained in periodic reports
    filed by Mesa Air Group, Inc. pursuant to Section&nbsp;13 or
    Section&nbsp;15(d) of the Securities Exchange Act of 1934, that
    are incorporated by reference in the registration statement.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;That, for the purpose of determining any
    liability under the Securities Act, each such post-effective
    amendment shall be deemed to be a new registration statement
    relating to the securities offered therein, and the offering of
    such securities at that time shall be deemed to be the initial
    bona fide offering thereof.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;To remove from registration by means of
    a post-effective amendment any of the securities being
    registered which remain unsold at the termination of the
    offering.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;The undersigned registrant hereby
undertakes, that, for purposes of determining any liability
under the Securities Act of 1933, each filing of the
registrant&#146;s annual report pursuant to Section&nbsp;13(a)
or 15(e) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan&#146;s
annual report pursuant to Section&nbsp;15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered
</FONT>

<P align="center"><FONT size="2">II-2
</FONT>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV align="left">
<FONT size="2">therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final
adjudication of such issue.
</FONT>

<P align="center"><FONT size="2">II-3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">SIGNATURES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form&nbsp;S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Phoenix, State of
Arizona, on May&nbsp;7, 2004.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">MESA AIR GROUP, INC.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">By:&nbsp;</FONT></TD>
    <TD align="center">
    <FONT size="2">/s/ JONATHAN G. ORNSTEIN
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Name: Jonathan G. Ornstein
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="8%"></TD>
    <TD width="52%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Title:</FONT></TD>
    <TD align="left">
    <FONT size="2">President and Chief Executive Officer
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears below constitutes and appoints each of
Jonathan G. Ornstein, Brian S. Gillman and George
Murnane&nbsp;III, or any of them, each acting alone, his true
and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for such person and in his
name, place and stead, in any and all capacities, in connection
with the registrant&#146;s registration statement on
Form&nbsp;S-3 under the Securities Act of 1933, including to
sign the registration statement in the name and on behalf of the
registrant or on behalf of the undersigned as a director or
officer of the registrant, and any and all amendments or
supplements to the registration statement, including any and all
stickers and post-effective amendments to the registration
statement and to sign any and all additional registration
statements relating to the same offering of securities as those
that are covered by the registration statement that are filed
pursuant to Rule&nbsp;462(b) under the Securities Act of 1933,
and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission and any applicable securities exchange or
securities self-regulatory body, granting unto said
attorneys-in-fact and agents, each acting alone, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitutes or
substitute, may lawfully do or cause to be done by virtue hereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="30%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="41%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ JONATHAN G. ORNSTEIN<BR>
    <HR size="1" noshade>Jonathan G. Ornstein
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Chairman of the Board and Chief Executive Officer
    (Principal Executive Officer)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">May&nbsp;7, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ GEORGE MURNANE III<BR>
    <HR size="1" noshade>George Murnane&nbsp;III
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Executive Vice President and Chief Financial
    Officer (Principal Financial Officer)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">May&nbsp;7, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ DANIEL J. ALTOBELLO<BR>
    <HR size="1" noshade>Daniel J. Altobello
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">May&nbsp;7, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ RONALD R. FOGLEMAN<BR>
    <HR size="1" noshade>Ronald R. Fogleman
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">May&nbsp;7, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ JOSEPH L. MANSON<BR>
    <HR size="1" noshade>Joseph L. Manson
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">May&nbsp;7, 2004
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="30%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="41%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ MAURICE A. PARKER<BR>
    <HR size="1" noshade>Maurice A. Parker
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">May&nbsp;7, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ JULIE SILCOCK<BR>
    <HR size="1" noshade>Julie Silcock
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">May&nbsp;7, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ ROBERT BELESON<BR>
    <HR size="1" noshade>Robert Beleson
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">May&nbsp;7, 2004
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-5
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<P align="center">
<B><FONT size="2">EXHIBIT INDEX</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">No.</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description of Exhibit</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture, dated as of February&nbsp;10, 2004
    between Mesa Air Group, Inc., the guarantors named therein and
    U.S.&nbsp;Bank National Association, as Trustee, relating to
    Senior Convertible Notes due 2024.(*)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Registration Rights Agreement dated as of
    February&nbsp;10, 2004 between Mesa Air Group, Inc., the
    subsidiaries of Mesa Air Group, Inc. listed on the signature
    pages thereto, and Merrill Lynch, Pierce, Fenner&nbsp;&#38;
    Smith Incorporated, as Initial Purchaser of the Senior
    Convertible Notes due 2024.(*)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Guarantee (included in
    Exhibit&nbsp;4.1).(*)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Senior Convertible Notes due 2024
    (included in Exhibit&nbsp;4.1).(*)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Specimen Common Stock Certificate.(1)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Opinion of Squire, Sanders&nbsp;&#38; Dempsey
    L.L.P.(*)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">12</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Statement of computation of ratio of earnings to
    fixed charges.(*)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Squire, Sanders&nbsp;&#38; Dempsey
    L.L.P. (included in Exhibit&nbsp;5.1).(*)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Deloitte&nbsp;&#38; Touche, LLP.*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Power of Attorney (see signature page in
    Part&nbsp;II of Registration Statement)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Statement of Eligibility of Trustee under the
    Trust Indenture Act of 1939 on Form&nbsp;T-1.*
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="1%"></TD>
    <TD width="4%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">*</FONT></TD>
    <TD align="left">
    <FONT size="2">Filed herewith.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Incorporated by reference to Mesa Air&#146;s
    Amendment No.&nbsp;1 to Form&nbsp;S-18, Registration
    No.&nbsp;33-11765 filed on March&nbsp;6, 1987.
    </FONT></TD>
</TR>

</TABLE>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>2
<FILENAME>p69133exv4w1.txt
<DESCRIPTION>EX-4.1
<TEXT>
<PAGE>

                                                                      EXIBIT 4.1

- --------------------------------------------------------------------------------

                              MESA AIR GROUP, INC.

                                       AND

               THE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO

                                       AND

                         U.S. BANK NATIONAL ASSOCIATION

                                     TRUSTEE

                            Senior Convertible Notes
                                    due 2024

- --------------------------------------------------------------------------------

                                    INDENTURE

                          Dated as of February 10, 2004

- --------------------------------------------------------------------------------

<PAGE>

                             CROSS-REFERENCE TABLE*

<TABLE>
<CAPTION>
TIA SECTION                                                          INDENTURE SECTION
<S>                                                                  <C>
310(a)(1).....................................................       7.10
   (a)(2).....................................................       7.10
   (a)(3).....................................................       N.A.
   (a)(4).....................................................       N.A.
   (b)........................................................       7.08; 7.10
   (c)........................................................       N.A.
311(a)                                                               7.11
   (b)........................................................       7.11
   (c)........................................................       N.A.
312(a)                                                               2.05
   (b)........................................................       14.03
   (c)........................................................       14.03
313(a)                                                               7.06
   (b)(1).....................................................       N.A.
   (b)(2).....................................................       7.06
   (c)........................................................       14.02
   (d)........................................................       7.06
314(a)                                                               4.02; 4.03; 14.02
   (b)........................................................       N.A.
   (c)(1).....................................................       14.04
   (c)(2).....................................................       14.04
   (c)(3).....................................................       N.A.
   (d)........................................................       N.A.
   (e)........................................................       14.05
   (f)........................................................       N.A.
315(a)                                                               7.01
   (b)........................................................       7.05; 14.02
   (c)........................................................       7.01
   (d)........................................................       7.01
   (e)........................................................       6.11
316(a) (last sentence)........................................       2.08
   (a)(1)(A)..................................................       6.05
   (a)(1)(B)..................................................       6.04
   (a)(2).....................................................       N.A.
   (b)........................................................       6.07
317(a)(1).....................................................       6.08
   (a)(2).....................................................       6.09
   (b)........................................................       2.04
318(a)                                                               14.01
</TABLE>

- ---------------------

N.A. means Not Applicable.

Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
      a part of the Indenture.

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                             PAGE
<S>                                                                                                          <C>
                                                ARTICLE 1

                               DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01     Definitions.............................................................................      1
SECTION 1.02     Other Definitions.......................................................................      7
SECTION 1.03     Incorporation by Reference of Trust Indenture Act.......................................      8
SECTION 1.04     Rules of Construction...................................................................      8
SECTION 1.05     Acts of Holders.........................................................................      9

                                                ARTICLE 2

                                             THE SECURITIES

SECTION 2.01     Form and Dating.........................................................................     10
SECTION 2.02     Execution and Authentication............................................................     12
SECTION 2.03     Registrar, Paying Agent and Conversion Agent............................................     13
SECTION 2.04     Paying Agent to Hold Money and Securities in Trust......................................     13
SECTION 2.05     Securityholder Lists....................................................................     14
SECTION 2.06     Transfer and Exchange...................................................................     14
SECTION 2.07     Replacement Securities..................................................................     16
SECTION 2.08     Outstanding Securities; Determinations of Holders' Action...............................     16
SECTION 2.09     Temporary Securities....................................................................     17
SECTION 2.10     Cancellation............................................................................     17
SECTION 2.11     Persons Deemed Owners...................................................................     18
SECTION 2.12     Global Securities.......................................................................     18
SECTION 2.13     CUSIP Numbers...........................................................................     23

                                                ARTICLE 3

                                        REDEMPTION AND PURCHASES

SECTION 3.01     Right to Redeem; Notices to Trustee.....................................................     23
SECTION 3.02     Selection of Securities to Be Redeemed..................................................     23
SECTION 3.03     Notice of Redemption....................................................................     24
SECTION 3.04     Effect of Notice of Redemption..........................................................     25
SECTION 3.05     Deposit of Redemption Price.............................................................     25
SECTION 3.06     Securities Redeemed in Part.............................................................     25
SECTION 3.07     Conversion Arrangement on Call for Redemption...........................................     25
SECTION 3.08     Purchase of Securities at Option of the Holder..........................................     26
SECTION 3.09     Purchase of Securities at Option of the Holder upon Change in Control...................     33
</TABLE>

                                      -i-

<PAGE>

<TABLE>
<CAPTION>
                                                                                                             PAGE
<S>                                                                                                          <C>
SECTION 3.10     Effect of Purchase Notice or Change in Control Purchase Notice..........................     36
SECTION 3.11     Deposit of Purchase Price or Change in Control Purchase Price...........................     37
SECTION 3.12     Securities Purchased in Part............................................................     37
SECTION 3.13     Repayment to the Company................................................................     38

                                                ARTICLE 4

                                                COVENANTS

SECTION 4.01     Payment of Securities...................................................................     38
SECTION 4.02     SEC and Other Reports...................................................................     38
SECTION 4.03     Compliance Certificate..................................................................     39
SECTION 4.04     Further Instruments and Acts............................................................     39
SECTION 4.05     Maintenance of Office or Agency.........................................................     39
SECTION 4.06     Delivery of Certain Information.........................................................     40
SECTION 4.07     Limitation on Guarantees of Indebtedness by Subsidiaries................................     40
SECTION 4.08     Covenant to Comply with Securities Laws upon Purchase of Securities.....................     40

                                                ARTICLE 5

                                          SUCCESSOR CORPORATION

SECTION 5.01     When Company May Merge or Transfer Assets...............................................     40

                                                ARTICLE 6

                                          DEFAULTS AND REMEDIES

SECTION 6.01     Events of Default.......................................................................     42
SECTION 6.02     Acceleration............................................................................     44
SECTION 6.03     Other Remedies..........................................................................     44
SECTION 6.04     Waiver of Past Defaults.................................................................     44
SECTION 6.05     Control by Majority.....................................................................     45
SECTION 6.06     Limitation on Suits.....................................................................     45
SECTION 6.07     Rights of Holders to Receive Payment....................................................     45
SECTION 6.08     Collection Suit by Trustee..............................................................     46
SECTION 6.09     Trustee May File Proofs of Claim........................................................     46
SECTION 6.10     Priorities..............................................................................     47
SECTION 6.11     Undertaking for Costs...................................................................     47
SECTION 6.12     Waiver of Stay, Extension or Usury Laws.................................................     47
</TABLE>

                                      -ii-

<PAGE>

<TABLE>
<CAPTION>
                                                                                                            PAGE
<S>                                                                                                         <C>
                                               ARTICLE 7

                                                TRUSTEE

SECTION 7.01    Duties of Trustee.......................................................................     48
SECTION 7.02    Rights of Trustee.......................................................................     49
SECTION 7.03    Individual Rights of Trustee............................................................     51
SECTION 7.04    Trustee's Disclaimer....................................................................     51
SECTION 7.05    Notice of Defaults......................................................................     51
SECTION 7.06    Reports by Trustee to Holders...........................................................     51
SECTION 7.07    Compensation and Indemnity..............................................................     51
SECTION 7.08    Replacement of Trustee..................................................................     52
SECTION 7.09    Successor Trustee by Merger.............................................................     53
SECTION 7.10    Eligibility; Disqualification...........................................................     53
SECTION 7.11    Preferential Collection of Claims Against Company.......................................     53
SECTION 7.12    Compliance with Patriot Act.............................................................     53

                                               ARTICLE 8

                                         DISCHARGE OF INDENTURE

SECTION 8.01    Discharge of Liability on Securities....................................................     54
SECTION 8.02    Repayment to the Company................................................................     54

                                               ARTICLE 9

                                               AMENDMENTS

SECTION 9.01    Without Consent of Holders..............................................................     54
SECTION 9.02    With Consent of Holders.................................................................     55
SECTION 9.03    Compliance with Trust Indenture Act.....................................................     56
SECTION 9.04    Revocation and Effect of Consents, Waivers and Actions..................................     56
SECTION 9.05    Notation on or Exchange of Securities...................................................     56
SECTION 9.06    Trustee to Sign Supplemental Indentures.................................................     56
SECTION 9.07    Effect of Supplemental Indentures.......................................................     57

                                               ARTICLE 10

                                      SPECIAL TAX EVENT CONVERSION

SECTION 10.01   Optional Conversion to Semiannual Coupon Note upon Tax Event............................     57
</TABLE>

                                     -iii-

<PAGE>

<TABLE>
<CAPTION>
                                                                                                             PAGE
<S>                                                                                                          <C>
                                               ARTICLE 11

                                               CONVERSION

SECTION 11.01    Conversion Privilege....................................................................     58
SECTION 11.02    Conversion Procedure....................................................................     58
SECTION 11.03    Fractional Shares.......................................................................     59
SECTION 11.04    Taxes on Conversion.....................................................................     59
SECTION 11.05    Company to Provide Stock................................................................     60
SECTION 11.06    Adjustment for Change in Capital Stock..................................................     60
SECTION 11.07    Adjustment for Rights Issue.............................................................     61
SECTION 11.08    Adjustment for Other Distributions......................................................     62
SECTION 11.09    When Adjustment May Be Deferred.........................................................     64
SECTION 11.10    When No Adjustment Required.............................................................     64
SECTION 11.11    Notice of Adjustment....................................................................     64
SECTION 11.12    Voluntary Increase......................................................................     64
SECTION 11.13    Notice of Certain Transactions..........................................................     65
SECTION 11.14    Reorganization of Company; Special Distributions........................................     65
SECTION 11.15    Company Determination Final.............................................................     66
SECTION 11.16    Trustee's Adjustment Disclaimer.........................................................     66
SECTION 11.17    Simultaneous Adjustments................................................................     66
SECTION 11.18    Successive Adjustments..................................................................     66
SECTION 11.19    Rights Issued in Respect of Common Stock Issued upon Conversion.........................     66
SECTION 11.20    Company's Right to Elect to Pay Cash or Common Stock....................................     67

                                               ARTICLE 12

                                           PAYMENT OF INTEREST

SECTION 12.01    Interest Payments.......................................................................     67
SECTION 12.02    Defaulted Interest......................................................................     68
SECTION 12.03    Interest Rights Preserved...............................................................     69

                                               ARTICLE 13

                                               GUARANTEES

SECTION 13.01    Guarantees..............................................................................     69
SECTION 13.02    Severability............................................................................     71
SECTION 13.03    Future Subsidiaries.....................................................................     71
SECTION 13.04    Priority of Guarantees..................................................................     71
SECTION 13.05    Limitation of Guarantors' Liability.....................................................     71
SECTION 13.06    Subrogation.............................................................................     71
SECTION 13.07    Reinstatement...........................................................................     72
</TABLE>

                                      -iv-

<PAGE>

<TABLE>
<CAPTION>
                                                                                                             PAGE
<S>                                                                                                          <C>
SECTION 13.08    Release of the Guarantor................................................................     72
SECTION 13.09    Benefits Acknowledged...................................................................     72

                                               ARTICLE 14

                                              MISCELLANEOUS

SECTION 14.01    Trust Indenture Act Controls............................................................     72
SECTION 14.02    Notices.................................................................................     72
SECTION 14.03    Communication by Holders with Other Holders.............................................     74
SECTION 14.04    Certificate and Opinion as to Conditions Precedent......................................     74
SECTION 14.05    Statements Required in Certificate or Opinion...........................................     74
SECTION 14.06    Separability Clause.....................................................................     74
SECTION 14.07    Rules by Trustee, Paying Agent, Conversion Agent and Registrar..........................     74
SECTION 14.08    Calculations............................................................................     75
SECTION 14.09    Legal Holidays..........................................................................     75
SECTION 14.10    Governing Law...........................................................................     75
SECTION 14.11    No Recourse Against Others..............................................................     75
SECTION 14.12    Successors..............................................................................     75
SECTION 14.13    Multiple Originals......................................................................     75
</TABLE>

                                      -v-

<PAGE>

                  INDENTURE dated as of February 10, 2004 among MESA AIR GROUP,
INC., a Nevada corporation ("Company"), the guarantors executing a signature
page hereto (each a "Guarantor" and collectively, the "Guarantors") and U.S.
BANK NATIONAL ASSOCIATION, a national banking association (the "Trustee").

                             RECITALS OF THE COMPANY

                  The Company has duly authorized the creation of an issue of
Senior Convertible Notes due 2024 (the "Securities") having the terms, tenor,
amount and other provisions hereinafter set forth, and, to provide therefor, the
Company has duly authorized the execution and delivery of this Indenture.

                  All things necessary to make the Securities, when the
Securities are duly executed by the Company and the Guarantors and authenticated
and delivered hereunder and duly issued by the Company and the Guarantors, the
valid obligations of the Company and the Guarantors, and to make this Indenture
a valid and binding agreement of the Company and the Guarantors, in accordance
with their and its terms, have been done.

                   NOW, THEREFORE, THIS INDENTURE WITNESSETH:

                  For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:

                                   ARTICLE 1

                   DEFINITIONS AND INCORPORATION BY REFERENCE

                  SECTION 1.01 Definitions.

                  "144A Global Security" means a permanent Global Security in
the form of the Security attached hereto as Exhibit A-1, and that is deposited
with and registered in the name of the Depositary, representing Securities sold
in reliance on Rule 144A under the Securities Act.

                  "Affiliate" of any specified person means any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this definition,
"control" when used with respect to any specified person means the power to
direct or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.

                  "Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Deposi-

<PAGE>

                                      -2-

tary for such Security, in each case to the extent applicable to such
transaction and as in effect from time to time.

                  "Average Sale Price" means the average of the Sale Prices of
the Common Stock for the shortest

of

                  (i)      30 consecutive trading days ending on the last full
         trading day prior to the Time of Determination with respect to the
         rights, warrants or options or distribution in respect of which the
         Average Sale Price is being calculated, or

                  (ii)     the period (x) commencing on the date next succeeding
         the first public announcement of (a) the issuance of rights, warrants
         or options or (b) the distribution, in each case, in respect of which
         the Average Sale Price is being calculated and (y) proceeding through
         the last full trading day prior to the Time of Determination with
         respect to the rights, warrants or options or distribution in respect
         of which the Average Sale Price is being calculated (excluding days
         within such period, if any, which are not trading days), or

                  (iii)    the period, if any, (x) commencing on the date next
         succeeding the Ex-Dividend Time with respect to the next preceding (a)
         issuance of rights, warrants or options or (b) distribution, in each
         case, for which an adjustment is required by the provisions of Sections
         11.06(c), 11.07 or 11.08 and (y) proceeding through the last full
         trading day prior to the Time of Determination with respect to the
         rights, warrants or options or distribution in respect of which the
         Average Sale Price is being calculated (excluding days within such
         period, if any, which are not trading days).

                  "Board of Directors" means either the board of directors of
the Company or any duly authorized committee of such board.

                  "Business Day" means each day of the year other than a
Saturday or a Sunday or other day on which banking institutions in The City of
New York or the city in which the Corporate Trust Office is located are required
or authorized to close.

                  "Capital Stock" for any corporation means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) stock or other equity issued
by that corporation.

                  "Certificated Securities" means any of the Securities that are
in the form of the Security attached hereto as Exhibit A-3.

                  "Common Stock" shall mean the shares of Common Stock, no par
value, of the Company as it exists on the date of this Indenture or any other
shares of Capital Stock of the Company into which the Common Stock shall be
reclassified or changed.

<PAGE>

                                      -3-

                  "Company" means the party named as the "Company" in the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.

                  "Company Request" or "Company Order" means a written request
or order signed in the name of the Company by (i) the Chairman of the Board, the
Vice Chairman, the Chief Executive Officer, the President or any Executive Vice
President or (ii) any two Officers.

                  "Corporate Trust Office" means an office of the Trustee at
which at any time its corporate trust business shall be administered, which
office at the date hereof is located at One Federal Street, Boston,
Massachusetts 02110, or such other address as the Trustee may designate from
time to time by notice to the Company, or the principal corporate trust office
of any successor Trustee (or such other address as a successor Trustee may
designate from time to time by notice to the Company).

                  "Debt" means with respect to the Company at any date, without
duplication, obligations (other than nonrecourse obligations) for borrowed money
or evidenced by bonds, debentures, notes or similar instruments.

                  "Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.

                  "domestic Subsidiary" means any Subsidiary that was formed
under the laws of the United States or any state or political subdivision
thereof or the District of Columbia.

                  "Global Securities" means any of the Securities that are in
the form of the Security attached hereto as Exhibit A-1, and to the extent that
such Securities are required to bear the Legend required by Section 2.06, such
Securities will be in the form of a 144A Global Security.

                  "guarantee" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation and (ii) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.

                  "Guarantee" means any guarantee of the Securities by any
Subsidiary in accordance with the provisions of Article 13.

                  "Guarantors" means (i) each Subsidiary listed as a signatory
to this Indenture and (ii) each Person who becomes a Guarantor pursuant to
Article 13 and/or Section 4.07 of this Indenture.

<PAGE>

                                      -4-

                  "Holder" or "Securityholder" means a person in whose name a
Security is registered on the Registrar's books.

                  "Indenture" means this Indenture, as amended or supplemented
from time to time in accordance with the terms hereof, including the provisions
of the TIA that are deemed to be a part hereof.

                  "Institutional Accredited Investor Security" means a Security
in the form of the Security attached hereto as Exhibit A-3, representing
Securities sold to Institutional Accredited Investors.

                  "Issue Date" of any Security means the date on which the
Security was originally issued or deemed issued as set forth on the face of the
Security.

                  "Issue Price" of any Security means, in connection with the
original issuance of such Security, the initial issue price at which the
Security is sold as set forth on the face of the Security.

                  "Officer" means the Chairman of the Board, the Vice Chairman,
the Chief Executive Officer, the President, any Executive Vice President, any
Senior Vice President, any Vice President, the Treasurer or the Secretary or any
Assistant Treasurer or Assistant Secretary of the Company.

                  "Officers' Certificate" means a written certificate containing
the information specified in Sections 14.04 and 14.05, signed in the name of the
Company by any two Officers, and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 4.03 shall be signed by the principal
executive financial or accounting Officer of the Company but need not contain
the information specified in Sections 14.04 and 14.05.

                  "Opinion of Counsel" means a written opinion containing the
information specified in Sections 14.04 and 14.05, from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of, or counsel to, the
Company or the Trustee.

                  "Original Issue Discount" of any Security means the difference
between the Issue Price and the Principal Amount at Maturity of the Security as
set forth on the face of the Security, which shall accrue as set forth in the
form of Security.

                  "person" or "Person" means any individual, corporation,
limited liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, or government or any agency or
political subdivision thereof.

                  "Principal Amount at Maturity" of a Security means the
principal amount at maturity as set forth on the face of the Security.

<PAGE>

                                      -5-

                  "Redemption Date" or "redemption date" means the date
specified for redemption of the Securities in accordance with the terms of the
Securities and this Indenture.

                  "Redemption Price" or "redemption price" shall have the
meaning set forth in paragraph 5 of the Securities.

                  "Responsible Officer" means, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who, in each case, shall have direct responsibility for the
administration of this Indenture.

                  "Restricted Security" means a Security required to bear the
restrictive legend set forth in the form of Security set forth in Exhibits A-1
and A-3 of this Indenture.

                  "Rule 144" means Rule 144 under the Securities Act (or any
successor rule having substantially similar provisions), as it may be amended
from time to time.

                  "Rule 144A" means Rule 144A under the Securities Act (or any
successor rule having substantially similar provisions), as it may be amended
from time to time.

                  "Sale Price" of Capital Stock on any date means (a) the
closing per share sale price (or, if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and the average ask prices) on such date as reported
on the Nasdaq National Market or such other United States securities exchange on
which the Capital Stock is traded or, if the Capital Stock is not listed on a
United States national or regional securities exchange, as reported by the
National Association of Securities Dealers Automated Quotation System or by the
National Quotation Bureau Incorporated or (b) in the absence of such quotation,
such price as the Company shall determine on the basis of such quotations as the
Company considers appropriate.

                  "SEC" means the United States Securities and Exchange
Commission.

                  "Securities" means any of the Company's Senior Convertible
Notes due 2024, as amended or supplemented from time to time, issued under this
Indenture.

                  "Securityholder" or "Holder" means a person in whose name a
Security is registered on the Registrar's books.

                  "Significant Subsidiary", as such term is defined in Rule 1-02
of Regulation S-X under the Securities Act of 1933, as amended.

<PAGE>

                                      -6-

                  "Special Record Date" means, with respect to the payment of
any Defaulted Interest, the date fixed by the Trustee pursuant to Section 12.02.

                  "Stated Maturity", when used with respect to any Security,
means the date specified in such Security as the fixed date on which an amount
equal to the Principal Amount at Maturity of such Security is due and payable.

                  "Subsidiary" means (i) a corporation, a majority of whose
Capital Stock with voting power, under ordinary circumstances, to elect
directors is, at the date of determination, directly or indirectly owned by the
Company, by one or more Subsidiaries of the Company or by the Company and one or
more Subsidiaries of the Company, (ii) a partnership in which the Company or a
Subsidiary of the Company holds a majority interest in the equity capital or
profits of such partnership, or (iii) any other person (other than a corporation
or a partnership) in which the Company, a Subsidiary of the Company or the
Company and one or more Subsidiaries of the Company, directly or indirectly, at
the date of determination, have (x) at least a majority ownership interest or
(y) the power to elect or direct the election of a majority of the directors or
other governing body of such person.

                  "Tax Event" means that the Company shall have received an
opinion from independent tax counsel experienced in such matters to the effect
that, on or after February 5, 2004, as a result of (a) any amendment to, or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein or (b) any amendment to, or change in, an
interpretation or application (including through litigation or a settlement
involving the Company) of such laws or regulations by any legislative body,
court, governmental agency or regulatory authority, in each case which amendment
or change is enacted, promulgated, issued or announced or which interpretation
is issued or announced or which action is taken, on or after February 5, 2004,
there is more than an insubstantial risk that interest (including accrued
Original Issue Discount) payable on the Securities either (i) would not be
deductible on a current accrual basis or (ii) would not be deductible under any
other method, in either case in whole or in part, by the Company (by reason of
deferral, disallowance, or otherwise) for United States federal income tax
purposes.

                  "TIA" means the Trust Indenture Act of 1939 as in effect on
the date of this Indenture, provided, however, that in the event the TIA is
amended after such date, TIA means, to the extent required by any such
amendment, the TIA as so amended.

                  "Time of Determination" means the time and date of the earlier
of (i) the determination of stockholders entitled to receive rights, warrants or
options or a distribution, in each case, to which Section 11.07 or 11.08 applies
and (ii) the time ("Ex-Dividend Time") immediately prior to the commencement of
"ex-dividend" trading for such rights, warrants or options or distribution on
the Nasdaq National Market or such other national or regional exchange or market
on which the Common Stock is then listed or quoted.

<PAGE>

                                      -7-

                  "trading day" means a day during which trading in securities
generally occurs on the Nasdaq National Market or, if the Common Stock is not
listed on the Nasdaq National Market, on the principal other national or
regional securities exchange on which the Common Stock is then listed or, if the
Common Stock is not listed on a national or regional securities exchange, on the
National Association of Securities Dealers Automated Quotation System or, if the
Common Stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on the principal other market on which the Common
Stock is then traded.

                  "Trustee" means the party named as the "Trustee" in the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.

                  SECTION 1.02 Other Definitions.

<TABLE>
<CAPTION>
                                                                           Defined in
                                 Term                                       Section
                                 ----                                       -------
<S>                                                                        <C>
"Act"..................................................................     1.05(a)
"Agent Members"........................................................     2.12(f)
"Bankruptcy Law".......................................................     6.01
"beneficial owner".....................................................     3.09(a)
"cash".................................................................     3.08(b)
"Change in Control"....................................................     3.09(a)
"Change in Control Purchase Date"......................................     3.09(a)
"Change in Control Purchase Notice"....................................     3.09(c)
"Change in Control Purchase Price".....................................     3.09(a)
"Company Notice".......................................................     3.08(e)
"Company Notice Date"..................................................     3.08(c)
"Continuing Directors".................................................     3.09(a)
"Conversion Agent".....................................................     2.03
"Conversion Date"......................................................     11.02
"Conversion Rate"......................................................     11.01
"Custodian"............................................................     6.01
"Defaulted Interest"...................................................     12.02
"Depositary"...........................................................     2.01(a)
"DTC"..................................................................     2.01(a)
"Event of Default".....................................................     6.01
"Exchange Act".........................................................     3.08(d)
"Ex-Dividend Measurement Period".......................................     11.08
"Extraordinary Cash Dividend"..........................................     11.08
"Institutional Accredited Investors"...................................     2.01(b)
"Interest Payment Date"................................................     10.01
</TABLE>

<PAGE>
                                      -8-

<TABLE>
<S>                                                                         <C>
"Legal Holiday"........................................................     14.09
"Legend"...............................................................     2.06(f)
"Market Price".........................................................     3.08(d)
"Notice of Default"....................................................     6.01
"Option Exercise Date".................................................     10.01
"Paying Agent".........................................................     2.03
"Protected Purchaser"..................................................     2.07
"Purchase Date"........................................................     3.08(a)
"Purchase Notice"......................................................     3.08(a)
"Purchase Price".......................................................     3.08(a)
"QIBs".................................................................     2.01(a)
"Registrar"............................................................     2.03
"Regular Record Date"..................................................     10.01
"Relevant Cash Dividends"..............................................     11.08
"Restated Principal Amount"............................................     10.01
"Rights"...............................................................     11.19
"Rights Agreement".....................................................     11.19
"Rule 144A Information"................................................     4.06
"Securities Act".......................................................     3.08(d)
"Special Record Date"..................................................     12.02
"Tax Event Date".......................................................     10.01
</TABLE>

                  SECTION 1.03 Incorporation by Reference of Trust Indenture
Act. Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:

                  "Commission" means the SEC.

                  "indenture securities" means the Securities.

                  "indenture security holder" means a Securityholder.

                  "indenture to be qualified" means this Indenture.

                  "indenture trustee" or "institutional trustee" means the
Trustee.

                  "obligor" on the indenture securities means the Company.

                  All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.

                  SECTION 1.04 Rules of Construction. Unless the context
otherwise requires:

<PAGE>
                                      -9-

                  (1)      a defined term has the meaning assigned to it;

                  (2)      an accounting term not otherwise defined has the
         meaning assigned to it in accordance with United States generally
         accepted accounting principles as in effect from time to time;

                  (3)      "or" is not exclusive;

                  (4)      "including" means including, without limitation; and

                  (5)      words in the singular include the plural, and words
         in the plural include the singular.

                  SECTION 1.05 Acts of Holders.

                  (a)      Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be given
or taken by Holders may be embodied in and evidenced by one or more instruments
(which may take the form of an electronic writing or messaging or otherwise be
in accordance with customary procedures of the Depositary or the Trustee) of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing (which may be in electronic form); and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, when it is hereby
expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
(either of which may be in electronic form) shall be sufficient for any purpose
of this Indenture and conclusive in favor of the Trustee and the Company, if
made in the manner provided in this Section.

                  (b)      The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit of a witness of
such execution (or electronic delivery) or by a certificate of a notary public
or other officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing or delivering such instrument or writing
acknowledged to such officer the execution (or electronic delivery) thereof.
When such execution is by a signer acting in a capacity other than such signer's
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of such signer's authority. The fact and date of the execution
of any such instrument or writing (electronic or otherwise), or the authority of
the Person executing the same, may also be proved in any other manner which the
Trustee deems sufficient.

                  (c)      The ownership of Securities shall be proved by the
register maintained by the Registrar.

                  (d)      Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any Security shall bind
every future Holder of the same Security and

<PAGE>
                                      -10-

the holder of every Security issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon, whether
or not notation of such action is made upon such Security.

                  (e)      If the Company shall solicit from the Holders any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to a resolution of the Board of
Directors, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
If such a record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or after such record
date, but only the Holders of record at the close of business on such record
date shall be deemed to be Holders for the purposes of determining whether
Holders of the requisite proportion of outstanding Securities have authorized or
agreed or consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for that purpose the outstanding Securities
shall be computed as of such record date; provided that no such authorization,
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture within six months after the record date.

                                   ARTICLE 2

                                 THE SECURITIES

                  SECTION 2.01 Form and Dating. The Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibits A-1
and A-3, which are a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage (provided
that any such notation, legend or endorsement required by usage is in a form
acceptable to the Company). The Company shall provide any such notations,
legends or endorsements to the Trustee in writing. Each Security shall be dated
the date of its authentication.

                  (a)      144A Global Securities. Securities offered and sold
within the United States to "qualified institutional buyers" as defined in Rule
144A ("QIBs") in reliance on Rule 144A shall be issued initially in the form of
a 144A Global Security, which shall be deposited with the Trustee at its
Corporate Trust Office, as custodian for the Depositary, and registered in the
name of The Depository Trust Company ("DTC") or the nominee thereof (such
depositary, or any successor thereto, and any such nominee being hereinafter
referred to as the "Depositary"), duly executed by the Company and authenticated
by the Trustee as hereinafter provided. The aggregate Principal Amount at
Maturity of the 144A Global Securities may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depositary
as hereinafter provided.

<PAGE>
                                      -11-

                  (b)      Institutional Accredited Investor Securities. Except
as provided in this Section 2.01 or Section 2.06 or 2.12, owners of beneficial
interests in Global Securities will not be entitled to receive physical delivery
of Certificated Securities. Securities offered and sold within the United States
to institutional "accredited investors" as defined in Rule 501(a)(1), (2) (3)
and (7) under the Securities Act ("Institutional Accredited Investors") shall be
issued initially in the form of an Institutional Accredited Investor Security,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided.

                  (c)      Global Securities in General. Each Global Security
shall represent such of the outstanding Securities as shall be specified therein
and each shall provide that it shall represent the aggregate Principal Amount at
Maturity of outstanding Securities from time to time endorsed thereon and that
the aggregate Principal Amount at Maturity of outstanding Securities represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges, redemptions and conversions.

                  Any adjustment of the aggregate Principal Amount at Maturity
of a Global Security to reflect the amount of any increase or decrease in the
Principal Amount at Maturity of outstanding Securities represented thereby shall
be made by the Trustee in accordance with instructions given by the Holder
thereof as required by Section 2.12 hereof and shall be made on the records of
the Trustee and the Depositary.

                  (d)      Book-Entry Provisions. This Section 2.01(d) shall
apply only to Global Securities deposited with or on behalf of the Depositary.

                  The Company shall execute and the Trustee shall, in accordance
with this Section 2.01(d), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary, (b) shall
be delivered by the Trustee to the Depositary or pursuant to the Depositary's
instructions or held by the Trustee as custodian for such Depositary and (c)
shall bear legends substantially to the following effect:

         "UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
         OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR
         REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
         ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
         IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
         COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
         ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
         DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
         VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
         OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

<PAGE>
                                      -12-

         TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS, IN
         WHOLE BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR
         TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
         PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
         ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE 2 OF THE
         INDENTURE REFERRED TO ON THE REVERSE HEREOF."

                  (e)      Certificated Securities. Securities not issued as
interests in the Global Securities will be issued in certificated form
substantially in the form of Exhibit A-3 attached hereto.

                  (f)      U.S. Tax Legend. All Securities shall bear the
following legend:

         "THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT, FOR PURPOSES OF
         SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE
         OF 1986, AS AMENDED. THE ISSUE PRICE OF THIS NOTE WAS $583.40 PER
         $1,000 OF PRINCIPAL AMOUNT AT MATURITY; THE AMOUNT OF ORIGINAL ISSUE
         DISCOUNT, INCLUDING CASH INTEREST PAYABLE THROUGH FEBRUARY 10, 2009
         TAXABLE AS ORIGINAL ISSUE DISCOUNT UNDER TREASURY REGULATION SECTION
         1.1273-1, IS $522.34 PER $1,000 OF PRINCIPAL AMOUNT AT MATURITY; THE
         ISSUE DATE IS FEBRUARY 10, 2004; AND THE YIELD TO MATURITY FOR THE
         PURPOSES OF ACCRUING TAX ORIGINAL ISSUE DISCOUNT IS 3.625% PER ANNUM,
         CALCULATED ON A SEMIANNUAL BOND EQUIVALENT BASIS."

                  SECTION 2.02 Execution and Authentication. The Securities
shall be executed on behalf of the Company by any Officer. The signature of the
Officer on the Securities may be manual or facsimile.

                  Securities bearing the manual or facsimile signatures of an
individual who was at the time of the execution of the Securities the proper
Officer of the Company shall bind the Company, notwithstanding that such
individual has ceased to hold such office prior to the authentication and
delivery of such Securities or did not hold such office at the date of
authentication of such Securities.

                  No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein duly executed by the Trustee by manual signature of an authorized
signatory of the Trustee and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder.

<PAGE>
                                      -13-

                  The Trustee shall authenticate and deliver Securities for
original issue in an aggregate Principal Amount at Maturity of up to
$214,261,000 upon a Company Order without any further action by the Company. The
aggregate Principal Amount at Maturity of Securities outstanding at any time may
not exceed the amount set forth in the foregoing sentence, except as provided in
Section 2.07.

                  The Securities shall be issued only in registered form without
coupons and only in denominations of $1,000 of Principal Amount at Maturity and
any integral multiple thereof.

                  SECTION 2.03 Registrar, Paying Agent and Conversion Agent. The
Company shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange ("Registrar"), an office or agency
where Securities may be presented for purchase or payment ("Paying Agent") and
an office or agency where Securities may be presented for conversion
("Conversion Agent"). The Registrar shall keep a register of the Securities and
of their transfer and exchange. The Company may have one or more co-registrars,
one or more additional paying agents and one or more additional conversion
agents. The term "Paying Agent" includes any additional paying agent, including
any named pursuant to Section 4.05. The term "Conversion Agent" includes any
additional conversion agent, including any named pursuant to Section 4.05.

                  The Company shall enter into an appropriate agency agreement
with any Registrar or co-registrar, Paying Agent or Conversion Agent (other than
the Trustee). The agreement shall implement the provisions of this Indenture
that relate to such agent. The Company shall notify the Trustee of the name and
address of any such agent. If the Company fails to maintain a Registrar, Paying
Agent or Conversion Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to Section 7.07. The Company or
any Subsidiary or an Affiliate of either of them may act as Paying Agent,
Registrar, Conversion Agent or co-registrar.

                  The Company initially appoints the Trustee as Registrar,
Conversion Agent and Paying Agent in connection with the Securities.

                  SECTION 2.04 Paying Agent to Hold Money and Securities in
Trust. Except as otherwise provided herein, not later than 11:30 a.m., New York
City time, on each due date of payments in respect of any Security, the Company
shall deposit with the Paying Agent a sum of money (in immediately available
funds if deposited on the due date) or Common Stock sufficient to make such
payments when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money and Common
Stock held by the Paying Agent for the making of payments in respect of the
Securities and shall notify the Trustee of any default by the Company in making
any such payment. At any time during the continuance of any such default, the
Paying Agent shall, upon the written request of the Trustee, forthwith pay to
the Trustee all money and Common Stock so held in trust. If the Company, a
Subsidiary or an Affiliate of either of them acts as Paying Agent, it shall
segregate the money and Common Stock held by

<PAGE>
                                      -14-

it as Paying Agent and hold it as a separate trust fund. The Company at any time
may require a Paying Agent to pay all money and Common Stock held by it to the
Trustee and to account for any funds and Common Stock disbursed by it. Upon
doing so, the Paying Agent shall have no further liability for the money or
Common Stock.

                  SECTION 2.05 Securityholder Lists. The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall cause to be furnished to the Trustee at least
semiannually on June 1 and December 1 a listing of Securityholders dated within
15 days of the date on which the list is furnished and at such other times as
the Trustee may request in writing a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of
Securityholders.

                  SECTION 2.06 Transfer and Exchange. Subject to Section 2.12
hereof,

                  (a)      Upon surrender for registration of transfer of any
Security, together with a written instrument of transfer satisfactory to the
Registrar duly executed by the Securityholder or such Securityholder's attorney
duly authorized in writing, at the office or agency of the Company designated as
Registrar or co-registrar pursuant to Section 2.03, the Company shall execute,
and the Trustee upon receipt of a Company Order shall authenticate and deliver,
in the name of the designated transferee or transferees, one or more new
Securities of any authorized denomination or denominations, of a like aggregate
Principal Amount at Maturity. The Company shall not charge a service charge for
any registration of transfer or exchange, but the Company may require payment of
a sum sufficient to pay all taxes, assessments or other governmental charges
that may be imposed in connection with the registration of transfer or exchange
of the Securities from the Securityholder requesting such registration of
transfer or exchange.

                  At the option of the Holder, Certificated Securities may be
exchanged for other Securities of any authorized denomination or denominations,
of a like aggregate Principal Amount at Maturity, upon surrender of the
Securities to be exchanged, together with a written instrument of transfer
satisfactory to the Registrar duly executed by the Securityholder or such
Securityholder's attorney duly authorized in writing, at such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee upon receipt of a Company Order shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.

                  The Company shall not be required to make, and the Registrar
need not register, transfers or exchanges of Securities selected for redemption
(except, in the case of Securities to be redeemed in part, the portion thereof
not to be redeemed) or any Securities in respect of which a Purchase Notice or
Change in Control Purchase Notice has been given and not withdrawn by the Holder
thereof in accordance with the terms of this Indenture (except, in the case of
Securities to be purchased in part, the portion thereof not to be purchased) or
any Securities for a period of 15 days before the mailing of a notice of
redemption of Securities to be redeemed.

<PAGE>
                                      -15-

                  (b)      Notwithstanding any provision to the contrary herein,
so long as a Global Security remains outstanding and is held by or on behalf of
the Depositary, transfers of a Global Security, in whole or in part, shall be
made only in accordance with Section 2.12 and this Section 2.06(b). Transfers of
a Global Security shall be limited to transfers of such Global Security in
whole, or in part, to nominees of the Depositary or to a successor of the
Depositary or such successor's nominee.

                  (c)      Successive registrations and registrations of
transfers and exchanges as aforesaid may be made from time to time as desired,
and each such registration shall be noted on the register for the Securities.

                  (d)      Any Registrar appointed pursuant to Section 2.03
hereof shall provide to the Trustee such information as the Trustee may
reasonably require in connection with the delivery by such Registrar of
Securities upon registration of transfer or exchange of Securities.

                  (e)      No Registrar shall be required to make registrations
of transfer or exchange of Securities during any periods designated in the text
of the Securities or in this Indenture as periods during which such registration
of transfers and exchanges need not be made.

                  (f)      If Securities are issued upon the registration of
transfer, exchange or replacement of Securities subject to restrictions on
transfer and bearing the legends set forth on the form of Security attached
hereto as Exhibits A-1 and A-3 setting forth such restrictions (collectively,
the "Legend"), or if a request is made to remove the Legend on a Security, the
Securities so issued shall bear the Legend, or the Legend shall not be removed,
as the case may be, unless there is delivered to the Company and the Registrar
such satisfactory evidence, which shall include an Opinion of Counsel, as may be
reasonably required by the Company and the Registrar, that neither the Legend
nor the restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of Rule 144A or Rule 144 or that
such Securities are not "restricted" within the meaning of Rule 144. Upon (i)
provision of such satisfactory evidence, or (ii) notification by the Company to
the Trustee and Registrar of the sale of such Security pursuant to a
registration statement that is effective at the time of such sale, the Trustee,
upon receipt of a Company Order, shall authenticate and deliver a Security that
does not bear the Legend. If the Legend is removed from the face of a Security
and the Security is subsequently held by an Affiliate of the Company, the
Company shall use its reasonable best efforts to reinstate the Legend.

                  The Trustee and the Registrar shall have no obligation or duty
to monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers between or
among Depositary participants or beneficial owners of interests in any Global
Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when
expressly required by the terms of, this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.

<PAGE>
                                      -16-

                  SECTION 2.07 Replacement Securities. If (a) any mutilated
Security is surrendered to the Trustee, or (b) the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Security, and there is delivered to the Company and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a protected purchaser within the meaning of Article 8 of the Uniform
Commercial Code (a "Protected Purchaser"), the Company shall execute and upon
receipt of a Company Order, the Trustee shall authenticate and deliver, in
exchange for any such mutilated Security or in lieu of any such destroyed, lost
or stolen Security, a new Security of like tenor and Principal Amount at
Maturity, bearing a number not contemporaneously outstanding.

                  In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, or is about to be purchased by
the Company pursuant to Article 3 hereof, the Company in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.

                  Upon the issuance of any new Securities under this Section,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

                  Every new Security issued pursuant to this Section in lieu of
any mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.

                  The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.

                  SECTION 2.08 Outstanding Securities; Determinations of
Holders' Action. Securities outstanding at any time are all the Securities
authenticated by the Trustee, except for those cancelled by it, those paid
pursuant to Section 2.10 and delivered to it for cancellation and those
described in this Section 2.08 as not outstanding. A Security does not cease to
be outstanding because the Company or an Affiliate thereof holds the Security;
provided, however, that in determining whether the Holders of the requisite
Principal Amount at Maturity of Securities have given or concurred in any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor shall be disregarded and deemed
not to be outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which a Responsible Officer of the
Trustee actually knows to be so owned shall be so disregarded. Subject to the
foregoing, only Securities outstanding at the time of such determination

<PAGE>
                                      -17-

shall be considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9).

                  If a Security is replaced pursuant to Section 2.07, the
replaced Security ceases to be outstanding unless the Trustee and the Company
receive proof satisfactory to each of them that the replaced Security is held by
a Protected Purchaser unaware that such Security has been replaced, in which
case the replacement security shall be deemed not to be outstanding.

                  If the Paying Agent holds, in accordance with this Indenture,
on a Redemption Date, or on the Business Day following the Purchase Date or a
Change in Control Purchase Date, or on Stated Maturity, money or securities, if
permitted hereunder, sufficient to pay Securities payable on that date, then
immediately after such Redemption Date, Purchase Date, Change in Control
Purchase Date or Stated Maturity, as the case may be, such Securities shall
cease to be outstanding and Original Issue Discount or cash interest on such
Securities shall cease to accrue; provided, that if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture.

                  If a Security is converted in accordance with Article 11, then
from and after the time of conversion on the Conversion Date, such Security
shall cease to be outstanding and Original Issue Discount or cash interest shall
cease to accrue on such Security.

                  SECTION 2.09 Temporary Securities. Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order, the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as conclusively evidenced by their execution of such Securities.

                  If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for such purpose
pursuant to Section 2.03, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities the Company shall execute
and upon Company Order the Trustee shall authenticate and deliver in exchange
therefor a like Principal Amount at Maturity of definitive Securities of
authorized denominations. Until so exchanged the temporary Securities shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities.

                  SECTION 2.10 Cancellation. All Securities surrendered for
payment, purchase by the Company pursuant to Article 3, conversion, redemption
or registration of transfer or exchange shall, if surrendered to any person
other than the Trustee, be delivered to the Trustee and shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company

<PAGE>
                                      -18-

may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly cancelled by the Trustee. The Company may not issue new
Securities to replace Securities it has paid or delivered to the Trustee for
cancellation or that any Holder has converted pursuant to Article 11. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be disposed of by
the Trustee.

                  SECTION 2.11 Persons Deemed Owners. Prior to due presentment
of a Security for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name such
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of the Security or the payment of any Redemption
Price, Purchase Price or Change in Control Purchase Price in respect thereof or
cash interest thereon, for the purpose of conversion and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.

                  SECTION 2.12 Global Securities.

                  (a)      Notwithstanding any other provisions of this
Indenture or the Securities, (A) transfers of a Global Security, in whole or in
part, shall be made only in accordance with Section 2.06 and Section 2.12(b)(i),
(B) transfer of a beneficial interest in a Global Security for a Certificated
Security shall comply with Section 2.06 and Section 2.12(b)(i) below, and (C)
transfers of a Certificated Security shall comply with Section 2.06 and Section
2.12(b)(ii) and transfer of a Certificated Security for a Beneficial Interest in
a Global Security shall comply with Section 2.06 and Section 2.12(b)(iii) below.

                  (b)      Transfer of Global Security. A Global Security may
not be transferred, in whole or in part, to any Person other than the Depositary
or a nominee or any successor thereof, and no such transfer to any such other
Person may be registered; provided that this Section 2.12(b) (i) shall not
prohibit any transfer of a Security that is issued in exchange for a Global
Security but is not itself a Global Security. No transfer of a Security to any
Person shall be effective under this Indenture or the Securities unless and
until such Security has been registered in the name of such Person. Nothing in
this Section 2.12(b)(i) shall prohibit or render ineffective any transfer of a
beneficial interest in a Global Security effected in accordance with the other
provisions of this Section 2.12(b).

                  (i)      Restrictions on Transfer of a Beneficial Interest in
         a Global Security for a Certificated Security. A beneficial interest in
         a Global Security may not be exchanged for a Certificated Security
         except upon satisfaction of the requirements set forth below. Upon
         receipt by the Trustee of a request for transfer of a beneficial
         interest in a Global Security in accordance with Applicable Procedures
         for a Certificated Security in the form satisfactory to the Trustee,
         together with:

<PAGE>
                                      -19-

                           (A)      so long as the Securities are Restricted
                  Securities, certification, in the form set forth in Exhibit
                  B-1, and, if requested by the Company or the Registrar,
                  certification in the form set forth in Exhibit B-2, that such
                  beneficial interest in the Global Security is being
                  transferred to an Institutional Accredited Investor that
                  satisfies the definitions set forth in subparagraph (a)(1),
                  (2), (3) or (7) of Rule 501 under the Securities Act;

                           (B)      written instructions to the Trustee to make,
                  or direct the Registrar to make, an adjustment on its books
                  and records with respect to such Global Security to reflect a
                  decrease in the aggregate Principal Amount at Maturity of the
                  Securities represented by the Global Security, such
                  instructions to contain information regarding the Depositary
                  account to be credited with such decrease; and

                           (C)      if the Company or Registrar so requests, an
                  Opinion of Counsel or other evidence reasonably satisfactory
                  to them as to the compliance with the restrictions set forth
                  in the Legend,

         then the Trustee shall cause, or direct the Registrar to cause, in
         accordance with the standing instructions and procedures existing
         between the Depositary and the Registrar, the aggregate Principal
         Amount at Maturity of Securities represented by the Global Security to
         be decreased by the aggregate Principal Amount at Maturity of the
         Certificated Security to be issued, shall authenticate and deliver such
         Certificated Security and shall instruct the Depositary to debit or
         cause to be debited to the account of the Person specified in such
         instructions a beneficial interest in the Global Security equal to the
         Principal Amount at Maturity of the Certificated Security so issued.

                  (ii)     Transfer and Exchange of Certificated Securities.
         When Certificated Securities are presented to the Registrar with a
         request:

                           (x)      to register the transfer of such
                  Certificated Securities; or

                           (y)      to exchange such Certificated Securities for
                  an equal Principal Amount at Maturity of Certificated
                  Securities of other authorized denominations,

         the Registrar shall register the transfer or make the exchange as
         requested if its reasonable requirements for such transaction are met;
         provided, however, that the Certificated Securities surrendered for
         registration of transfer or exchange:

                           (A)      shall be duly endorsed or accompanied by a
                  written instrument of transfer in form reasonably satisfactory
                  to the Company and the Registrar, duly executed by the Holder
                  thereof or his attorney duly authorized in writing; and

                           (B)      so long as such Securities are Restricted
                  Securities, such Securities are being transferred or exchanged
                  pursuant to an effective registration statement

<PAGE>
                                      -20-

                  under the Securities Act or, if being transferred pursuant to
                  clause (1), (2) or (3) below, are accompanied by the
                  additional information and documents specified in each clause,
                  as applicable:

                                    (1) if such Certificated Securities are
                           being delivered to the Registrar by a Holder for
                           registration in the name of such Holder, without
                           transfer, a certification from such Holder to that
                           effect; or

                                    (2) if such Certificated Securities are
                           being transferred to the Company, a certification to
                           that effect; or

                                    (3) if such Certificated Securities are
                           being transferred pursuant to an exemption from
                           registration (i) a certification to that effect (in
                           the form set forth in Exhibit B-1 and B-2, if
                           applicable) and (ii) if the Company or Registrar so
                           requests, an Opinion of Counsel or other evidence
                           reasonably satisfactory to them as to the compliance
                           with the restrictions set forth in the Legend.

                  (iii)    Restrictions on Transfer of a Certificated Security
         for a Beneficial Interest in a Global Security. A Certificated Security
         may not be exchanged for a beneficial interest in a Global Security
         except upon satisfaction of the requirements set forth below. Upon
         receipt by the Trustee of a Certificated Security, duly endorsed or
         accompanied by appropriate instruments of transfer, in form
         satisfactory to the Trustee, together with:

                           (A)      so long as the Securities are Restricted
                  Securities, certification, in the form set forth in Exhibit
                  B-1, that such Certificated Security is being transferred to a
                  QIB in accordance with Rule 144A; and

                           (B)      written instructions directing the Trustee
                  to make, or to direct the Registrar to make, an adjustment on
                  its books and records with respect to such Global Security to
                  reflect an increase in the aggregate Principal Amount at
                  Maturity of the Securities represented by the Global Security,
                  such instructions to contain information regarding the
                  Depositary account to be credited with such increase,

         then the Trustee shall cancel such Certificated Security and cause, or
         direct the Registrar to cause, in accordance with the standing
         instructions and procedures existing between the Depositary and the
         Registrar, the aggregate Principal Amount at Maturity of Securities
         represented by the Global Security to be increased by the aggregate
         Principal Amount at Maturity of the Certificated Security to be
         exchanged, and shall instruct the Depositary to credit or cause to be
         credited to the account of the Person specified in such instructions a
         beneficial interest in the Global Security equal to the Principal
         Amount at Maturity of the Certificated Security so cancelled. If no
         Global Securities are then out-

<PAGE>
                                      -21-

         standing, the Company shall issue and the Trustee, upon receipt of a
         Company Order, shall authenticate a new Global Security in the
         appropriate Principal Amount at Maturity.

                  (c)      Subject to the succeeding paragraph, every Security
shall be subject to the restrictions on transfer provided in the Legend
including the requirement of the delivery of an Opinion of Counsel, if so
provided. Whenever any Restricted Security is presented or surrendered for
registration of transfer or for exchange for a Security registered in a name
other than that of the Holder, such Security must be accompanied by a
certificate in substantially the form set forth in Exhibit B-1, dated the date
of such surrender and signed by the Holder of such Security, as to compliance
with such restrictions on transfer. The Registrar shall not be required to
accept for such registration of transfer or exchange any Security not so
accompanied by a properly completed certificate.

                  (d)      The restrictions imposed by the Legend upon the
transferability of any Security shall cease and terminate when such Security has
been sold pursuant to an effective registration statement under the Securities
Act or transferred in compliance with Rule 144 or, if earlier, upon the
expiration of the holding period applicable to sales thereof under paragraph (k)
of Rule 144. Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144, by an opinion of counsel having substantial experience in
practice under the Securities Act and otherwise reasonably acceptable to the
Company, addressed to the Company, the Trustee and the Registrar and in form
acceptable to the Company, to the effect that the transfer of such Security has
been made in compliance with Rule 144), be exchanged for a new Security, of like
tenor and aggregate Principal Amount at Maturity, which shall not bear the
restrictive Legend. The Company shall inform the Trustee of the effective date
of any registration statement registering the Securities under the Securities
Act. The Trustee and the Registrar shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the aforementioned
opinion of counsel or registration statement.

                  (e)      As used in the preceding two paragraphs of this
Section 2.12, the term "transfer" encompasses any sale, pledge, transfer,
hypothecation or other disposition of any Security.

                  (f)      The provisions of clauses (1), (2), (3), (4) and (5)
below shall apply only to Global Securities:

                  (1)      Notwithstanding any other provisions of this
         Indenture or the Securities, except as provided in Section 2.12(b)(i),
         a Global Security shall not be exchanged in whole or in part for a
         Security registered in the name of any Person other than the Depositary
         or one or more nominees thereof, provided that a Global Security may be
         exchanged for Securities registered in the names of any person
         designated by the Depositary in the event that (i) the Depositary has
         notified the Company that it is unwilling or

<PAGE>
                                      -22-

         unable to continue as Depositary for such Global Security or such
         Depositary has ceased to be a "clearing agency" registered under the
         Exchange Act, and a successor Depositary is not appointed by the
         Company within 90 days; (ii) the Company elects to discontinue use of
         the system of book-entry transfer through DTC (or any successor
         depositary); or (iii) an Event of Default has occurred and is
         continuing with respect to the Securities. Any Global Security
         exchanged pursuant to subclause (i) of this clause (1) shall be so
         exchanged in whole and not in part, and any Global Security exchanged
         pursuant to subclause (ii) of this clause (1) may be exchanged in whole
         or from time to time in part as directed by the Depositary. Any
         Security issued in exchange for a Global Security or any portion
         thereof shall be a Global Security; provided that any such Security so
         issued that is registered in the name of a person other than the
         Depositary or a nominee thereof shall not be a Global Security.

                  (2)      Securities issued in exchange for a Global Security
         or any portion thereof shall be issued in definitive, fully registered
         form, without interest coupons, shall have an aggregate Principal
         Amount at Maturity equal to that of such Global Security or portion
         thereof to be so exchanged, shall be registered in such names and be in
         such authorized denominations as the Depositary shall designate and
         shall bear the applicable legends provided for herein. Any Global
         Security to be exchanged in whole shall be surrendered by the
         Depositary to the Trustee, as Registrar. With regard to any Global
         Security to be exchanged in part, either such Global Security shall be
         so surrendered for exchange or, if the Trustee is acting as custodian
         for the Depositary or its nominee with respect to such Global Security,
         the Principal Amount at Maturity thereof shall be reduced, by an amount
         equal to the portion thereof to be so exchanged, by means of an
         appropriate adjustment made on the records of the Trustee. Upon any
         such surrender or adjustment, the Trustee shall authenticate and
         deliver the Security issuable on such exchange to or upon the order of
         the Depositary or an authorized representative thereof.

                  (3)      Subject to the provisions of clause (5) below, the
         registered Holder may grant proxies and otherwise authorize any Person,
         including Agent Members (as defined below) and persons that may hold
         interests through Agent Members, to take any action which a holder is
         entitled to take under this Indenture or the Securities.

                  (4)      In the event of the occurrence of any of the events
         specified in clause (1) above, the Company will promptly make available
         to the Trustee a reasonable supply of Certificated Securities in
         definitive, fully registered form, without interest coupons.

                  (5)      Neither any members of, or participants in, the
         Depositary (collectively, the "Agent Members") nor any other Persons on
         whose behalf Agent Members may act shall have any rights under this
         Indenture with respect to any Global Security registered in the name of
         the Depositary or any nominee thereof, or under any such Global
         Security, and the Depositary or such nominee, as the case may be, may
         be treated by the Company, the Trustee, the Registrar, the Paying Agent
         and any agent of the Company, the Trustee,

<PAGE>

                                      -23-

         the Registrar or the Paying Agent as the absolute owner and holder of
         such Global Security for all purposes whatsoever. Notwithstanding the
         foregoing, nothing herein shall prevent the Company, the Trustee or any
         agent of the Company or the Trustee from giving effect to any written
         certification, proxy or other authorization furnished by the Depositary
         or such nominee, as the case may be, or impair, as between the
         Depositary, its Agent Members and any other person on whose behalf an
         Agent Member may act, the operation of customary practices of such
         Persons governing the exercise of the rights of a holder of any
         Security.

                  SECTION 2.13 CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use), and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee of any change in the CUSIP numbers.

                                   ARTICLE 3

                            REDEMPTION AND PURCHASES

                  SECTION 3.01 Right to Redeem; Notices to Trustee. The Company,
at its option, may redeem the Securities in accordance with the provisions of
paragraphs 5 and 7 of the Securities. Prior to February 10, 2009, the Company
cannot redeem the Securities. Beginning on February 10, 2009, the Company may
redeem the Securities for cash in whole at any time, or in part from time to
time. If the Company elects to redeem Securities pursuant to paragraph 5 of the
Securities, it shall notify the Trustee in writing of the Redemption Date, the
Principal Amount at Maturity of Securities to be redeemed, the Redemption Price
and the amount of accrued and unpaid cash interest, if any, payable on the
Redemption Date.

                  The Company shall give the notice to the Trustee provided for
in this Section 3.01 by a Company Order, at least 45 days but not more than 60
days before the Redemption Date (unless a shorter notice shall be satisfactory
to the Trustee). If fewer than all the Securities are to be redeemed, the record
date relating to such redemption shall be selected by the Company and given to
the Trustee, which record date shall not be less than ten days after the date of
notice to the Trustee.

                  SECTION 3.02 Selection of Securities to Be Redeemed. If less
than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed pro rata or by lot or by any other method the Trustee
considers fair and appropriate (so long as such method is not prohibited by the
rules of any stock exchange on which the Securities are then listed). The
Trustee shall make the selection at least 30 days but not more than 60 days
before the Redemption Date from outstanding Securities not previously called for
redemption. The Trustee may

<PAGE>
                                      -24-

select for redemption portions of the Principal Amount at Maturity of Securities
that have denominations larger than $1,000.

                  Securities and portions of them the Trustee selects shall be
in Principal Amounts at Maturity of $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption. The Trustee shall notify
the Company promptly of the Securities or portions of Securities to be redeemed.

                  If any Security selected for partial redemption is converted
in part before termination of the conversion right with respect to the portion
of the Security so selected, the converted portion of such Security shall be
deemed (so far as may be) to be the portion selected for redemption. Securities
which have been converted during a selection of Securities to be redeemed may be
treated by the Trustee as outstanding for the purpose of such selection.

                  SECTION 3.03 Notice of Redemption. At least 30 days but not
more than 60 days before a Redemption Date, the Company shall mail a notice of
redemption by first-class mail, postage prepaid, to each Holder of Securities to
be redeemed.

                  The notice shall identify the Securities to be redeemed and
shall state:

                  (1)      the Redemption Date;

                  (2)      the Redemption Price and accrued and unpaid cash
         interest, if any, payable on the Redemption Date;

                  (3)      the Conversion Rate;

                  (4)      the name and address of the Paying Agent and
         Conversion Agent;

                  (5)      that Securities called for redemption may be
         converted at any time before the close of business on the second
         Business Day immediately preceding the Redemption Date, even if not
         otherwise convertible at such time;

                  (6)      that Holders who want to convert Securities must
         satisfy the requirements set forth in paragraph 8 of the Securities;

                  (7)      that Securities called for redemption must be
         surrendered to the Paying Agent to collect the Redemption Price and
         accrued and unpaid cash interest, if any;

                  (8)      if fewer than all the outstanding Securities are to
         be redeemed, the certificate number and Principal Amounts at Maturity
         of the particular Securities to be redeemed;

<PAGE>
                                      -25-

                  (9)      that, unless the Company defaults in making payment
         of such Redemption Price and any cash interest which is due and
         payable, Original Issue Discount and interest or cash interest will
         cease to accrue on and after the Redemption Date;

                  (10)     the CUSIP number of the Securities; and

                  (11)     any other information the Company wants to present.

                  At the Company's request, the Trustee shall give the notice of
redemption to Holders in the Company's name and at the Company's expense,
provided that the Company makes such request at least five Business Days (unless
a shorter period shall be satisfactory to the Trustee) prior to the date such
notice of redemption must be mailed.

                  SECTION 3.04 Effect of Notice of Redemption. Once notice of
redemption is given, Securities called for redemption become due and payable on
the Redemption Date and at the Redemption Price (together with accrued and
unpaid cash interest, if any, to but not including the date of redemption)
stated in the notice except for Securities which are converted in accordance
with the terms of this Indenture. Upon surrender to the Paying Agent, such
Securities shall be paid at the Redemption Price (together with accrued and
unpaid cash interest, if any, to but not including the date of redemption)
stated in the notice.

                  SECTION 3.05 Deposit of Redemption Price. Prior to 11:30 a.m.
(New York City time), on any Redemption Date, the Company shall deposit with the
Paying Agent (or if the Company or a Subsidiary or an Affiliate of either of
them is the Paying Agent, shall segregate and hold in trust) money sufficient to
pay the Redemption Price of, and any accrued and unpaid interest to but not
including the date of redemption with respect to, all Securities to be redeemed
on that date other than Securities or portions of Securities called for
redemption which on or prior thereto have been delivered by the Company to the
Trustee for cancellation or have been converted. The Paying Agent shall as
promptly as practicable return to the Company any money not required for that
purpose because of conversion of Securities pursuant to Article 11. If such
money is then held by the Company in trust and is not required for such purpose
it shall be discharged from such trust.

                  SECTION 3.06 Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder a new Security in an authorized
denomination equal in Principal Amount at Maturity to the unredeemed portion of
the Security surrendered.

                  SECTION 3.07 Conversion Arrangement on Call for Redemption. In
connection with any redemption of Securities, the Company may arrange for the
purchase and conversion of any Securities called for redemption by an agreement
with one or more investment banks or other purchasers to purchase such
Securities by paying to the Trustee in trust for the Securityholders, on or
prior to 11:30 a.m. New York City time on the Redemption Date, an amount that,
together with any amounts deposited with the Trustee by the Company for the
redemption of

<PAGE>
                                      -26-

such Securities, is not less than the Redemption Price of, and any accrued and
unpaid interest with respect to, such Securities. Notwithstanding anything to
the contrary contained in this Article 3, the obligation of the Company to pay
the Redemption Prices of such Securities shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers. If such an
agreement is entered into, any Securities not duly surrendered for conversion by
the Holders thereof may, at the option of the Company, be deemed, to the fullest
extent permitted by law, acquired by such purchasers from such Holders and
(notwithstanding anything to the contrary contained in Article 11) surrendered
by such purchasers for conversion, all as of immediately prior to the close of
business on the Business Day prior to the Redemption Date, subject to payment of
the above amount as aforesaid. The Trustee shall hold and pay to the Holders
whose Securities are selected for redemption any such amount paid to it for
purchase and conversion in the same manner as it would moneys deposited with it
by the Company for the redemption of Securities. Without the Trustee's prior
written consent, no arrangement between the Company and such purchasers for the
purchase and conversion of any Securities shall increase or otherwise affect any
of the powers, duties, responsibilities or obligations of the Trustee as set
forth in this Indenture, and the Company agrees to indemnify the Trustee from,
and hold it harmless against, any loss, liability or expense arising out of or
in connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such purchasers, including the costs and
expenses incurred by the Trustee in the defense of any claim or liability
arising out of or in connection with the exercise or performance of any of its
powers, duties, responsibilities or obligations under this Indenture.

                  SECTION 3.08 Purchase of Securities at Option of the Holder.

                  (a)      General. Securities shall be purchased by the Company
pursuant to paragraph 6 of the Securities as of February 10, 2009, 2014 and 2019
(each, a "Purchase Date"), at the purchase price of $583.40 per $1,000 of
Principal Amount at Maturity as of February 10, 2009, of $698.20 per $1,000 of
Principal Amount at Maturity as of February 10, 2014, and of $835.58 per $1,000
of Principal Amount at Maturity as of February 10, 2019, in each case, plus
accrued and unpaid cash interest, if any, to the Purchase Date (each, a
"Purchase Price", as applicable), at the option of the Holder thereof, upon:

                  (1)      delivery to the Paying Agent by the Holder of a
         written notice of purchase (a "Purchase Notice") at any time from the
         opening of business on the date that is 20 Business Days prior to a
         Purchase Date until the close of business on the Business Day prior to
         such Purchase Date stating:

                           (A)      the certificate number of the Security which
                  the Holder will deliver to be purchased,

                           (B)      the portion of the Principal Amount at
                  Maturity of the Security which the Holder will deliver to be
                  purchased, which portion must be a Principal Amount at
                  Maturity of $1,000 or an integral multiple thereof,

<PAGE>

                                      -27-

                           (C)      that such Security shall be purchased as of
                  the Purchase Date pursuant to the terms and conditions
                  specified in paragraph 6 of the Securities and in this
                  Indenture, and

                           (D)      in the event the Company elects, pursuant to
                  Section 3.08(b), to pay the Purchase Price to be paid as of
                  such Purchase Date, in whole or in part, in shares of Common
                  Stock but such portion of the Purchase Price shall ultimately
                  be payable to such Holder entirely in cash because any of the
                  conditions to payment of the Purchase Price in Common Stock is
                  not satisfied prior to the close of business on such Purchase
                  Date, as set forth in Section 3.08(d), whether such Holder
                  elects (i) to withdraw such Purchase Notice as to some or all
                  of the Securities to which such Purchase Notice relates
                  (stating the Principal Amount at Maturity and certificate
                  numbers of the Securities as to which such withdrawal shall
                  relate), or (ii) to receive cash in respect of the entire
                  Purchase Price for all Securities (or portions thereof) to
                  which such Purchase Notice relates; and

                  (2)      delivery of such Security to the Paying Agent prior
         to, on or after the Purchase Date (together with all necessary
         endorsements) at the offices of the Paying Agent, such delivery being a
         condition to receipt by the Holder of the Purchase Price therefor;
         provided, however, that such Purchase Price shall be so paid pursuant
         to this Section 3.08 only if the Security so delivered to the Paying
         Agent shall conform in all respects to the description thereof in the
         related Purchase Notice, as determined by the Company.

                  If a Holder, in such Holder's Purchase Notice and in any
written notice of withdrawal delivered by such Holder pursuant to the terms of
Section 3.10, fails to indicate such Holder's choice with respect to the
election set forth in clause (D) of Section 3.08(a)(1), such Holder shall be
deemed to have elected to receive cash in respect of the Purchase Price for all
Securities subject to such Purchase Notice in the circumstances set forth in
such clause (D).

                  The Company shall purchase from the Holder thereof, pursuant
to this Section 3.08, a portion of a Security if the Principal Amount at
Maturity of such portion is $1,000 or an integral multiple of $1,000. Provisions
of this Indenture that apply to the purchase of all of a Security also apply to
the purchase of such portion of such Security.

                  Any purchase by the Company contemplated pursuant to the
provisions of this Section 3.08 shall be consummated by the delivery of the
consideration to be received by the Holder (together with accrued and unpaid
contingent interest, if any) promptly following the later of the Purchase Date
and the time of delivery of the Security.

                  Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Purchase Notice contemplated by this Section
3.08(a) shall have the right to withdraw such Purchase Notice at any time prior
to the close of business on the Business Day prior to the Purchase Date by
delivery of a written notice of withdrawal to the Paying Agent in accordance
with Section 3.10.

<PAGE>

                                      -28-

                  The Paying Agent shall promptly notify the Company of the
receipt by it of any Purchase Notice or written notice of withdrawal thereof.

                  (b)      Company's Right to Elect Manner of Payment of
Purchase Price. The Securities to be purchased pursuant to Section 3.08(a) may
be paid for, at the election of the Company, in U.S. legal tender ("cash") or
Common Stock, or in any combination of cash and Common Stock, subject to the
conditions set forth in Sections 3.08(c) and (d). The Company shall designate,
in the Company Notice delivered pursuant to Section 3.08(e), whether the Company
will purchase the Securities for cash or Common Stock, or, if a combination
thereof, the percentages or amounts of the Purchase Price of Securities in
respect of which it will pay in cash or Common Stock; provided that the Company
will pay cash for fractional interests in Common Stock. For purposes of
determining the existence of potential fractional interests, all Securities
subject to purchase by the Company held by a Holder shall be considered together
(no matter how many separate certificates are to be presented). Each Holder
whose Securities are purchased pursuant to this Section 3.08 shall receive the
same percentage of cash or Common Stock in payment of the Purchase Price for
such Securities, except (i) as provided in Section 3.08(d) with regard to the
payment of cash in lieu of fractional shares of Common Stock and (ii) in the
event that the Company is unable to purchase the Securities of a Holder or
Holders of Common Stock because any necessary qualifications or registrations of
the Common Stock under applicable state securities laws cannot be obtained, the
Company may purchase the Securities of such Holder or Holders for cash. The
Company may not change its election with respect to the consideration (or
components or percentages of components thereof) to be paid once the Company has
given its Company Notice to Securityholders except pursuant to this Section
3.08(b) or pursuant to Section 3.08(d) in the event of a failure to satisfy,
prior to the close of business on the Purchase Date, any condition to the
payment of the Purchase Price, in whole or in part, in Common Stock.

                  At least three Business Days before the Company Notice Date,
the Company shall deliver an Officers' Certificate to the Trustee specifying:

                  (i)      the manner of payment selected by the Company,

                  (ii)     the information required by Section 3.08(e),

                  (iii)    if the Company elects to pay the Purchase Price, or a
         specified percentage thereof, in Common Stock, that the conditions to
         such manner of payment set forth in Section 3.08(d) have been or will
         be complied with, and

                  (iv)     whether the Company desires the Trustee to give the
         Company Notice required by Section 3.08(e).

                  (c)      Purchase with Cash. On each Purchase Date, at the
option of the Company, the Purchase Price of Securities in respect of which a
Purchase Notice pursuant to Section 3.08(a) has been given and not withdrawn, or
a specified percentage thereof, may be paid by the

<PAGE>

                                      -29-

Company with cash equal to the aggregate Purchase Price of such Securities. If
the Company elects to purchase Securities with cash, the Company Notice, as
provided in Section 3.08(e), shall be sent to Holders not less than 20 Business
Days prior to such Purchase Date (the "Company Notice Date").

                  (d)      Payment by Issuance of Common Stock. On each Purchase
Date, at the option of the Company, the Purchase Price of Securities in respect
of which a Purchase Notice pursuant to Section 3.08(a) has been given, or a
specified percentage thereof, may be paid by the Company by the issuance of a
number of shares of Common Stock equal to the quotient obtained by dividing (i)
the amount of cash to which the Securityholders would have been entitled had the
Company elected to pay all or such specified percentage, as the case may be, of
the Purchase Price of such Securities in cash by (ii) the Market Price of a
share of Common Stock, subject to the next succeeding paragraph.

                  The Company will not issue a fractional share of Common Stock
in payment of the Purchase Price. Instead the Company will pay cash for the
current market value of the fractional share. The current market value of a
fraction of a share shall be determined by multiplying the Market Price by such
fraction and rounding the product to the nearest whole cent. It is understood
that if a Holder elects to have more than one Security purchased, the number of
shares of Common Stock shall be based on the aggregate amount of Securities to
be purchased.

                  Upon a payment by Common Stock pursuant to the terms hereof,
that portion of accrued Original Issue Discount or cash interest attributable to
the period from the Issue Date to the Purchase Date with respect to the
purchased Security shall not be cancelled, extinguished or forfeited but rather
shall be deemed paid in full to the Holder through the delivery of the Common
Stock in exchange for the Security being purchased pursuant to the terms hereof,
and the fair market value of such Common Stock (together with any cash payments
in lieu of fractional shares of Common Stock) shall be treated as issued, to the
extent thereof, first in exchange for the accrued Original Issue Discount or
cash interest through the Purchase Date, and the balance, if any, of the fair
market value of such shares of Common Stock shall be treated as issued in
exchange for the Issue Price of the Security being purchased pursuant to the
provisions hereof.

                  If the Company elects to purchase the Securities by the
issuance of shares of Common Stock, the Company Notice, as provided in Section
3.08(e), shall be sent to the Holders not later than the Company Notice Date.

                  The Company's right to exercise its election to purchase the
Securities pursuant to this Section 3.08 through the issuance of shares of
Common Stock shall be conditioned upon:

                  (i)      the Company's not having given its Company Notice of
         an election to pay entirely in cash and its giving of timely Company
         Notice of election to purchase all or a specified percentage of the
         Securities with Common Stock as provided herein;

<PAGE>
                                      -30-

                  (ii)     the shares of Common Stock having been admitted for
         listing or admitted for listing subject to notice of issuance on the
         Nasdaq National Market or a national securities exchange on which the
         Common Stock is then listed or, if the Common Stock is not then listed
         on a national or regional securities exchange, as quoted on the
         National Association of Securities Dealers Automated Quotation System;

                  (iii)    the registration of the shares of Common Stock to be
         issued in respect of the payment of the Purchase Price under the
         Securities Act of 1933, as amended (the "Securities Act"), or the
         Securities Exchange Act of 1934, as amended (the "Exchange Act"), in
         each case, if required;

                  (iv)     any necessary qualification or registration under
         applicable state securities laws or the availability of an exemption
         from such qualification and registration; and

                  (v)      the receipt by the Trustee of an Officers'
         Certificate and an Opinion of Counsel each stating that (A) the terms
         of the issuance of the Common Stock are in conformity with this
         Indenture and (B) the shares of Common Stock to be issued by the
         Company in payment of the Purchase Price in respect of Securities have
         been duly authorized and, when issued and delivered pursuant to the
         terms of this Indenture in payment of the Purchase Price in respect of
         the Securities, will be validly issued, fully paid and non-assessable
         and, to the best of such counsel's knowledge, free from preemptive
         rights under law or material contracts, and, in the case of such
         Officers' Certificate, stating that conditions (i), (ii), (iii) and
         (iv) above and the condition set forth in the second succeeding
         sentence have been satisfied and, in the case of such Opinion of
         Counsel, stating that conditions (ii) and (iii) above have been
         satisfied.

                  Such Officers' Certificate shall also set forth the number of
shares of Common Stock to be issued for each $1,000 Principal Amount at Maturity
of Securities and the Sale Price of a share of Common Stock on each trading day
during the period for which the Market Price is calculated. The Company may pay
the Purchase Price (or any portion thereof) in Common Stock only if the
information necessary to calculate the Market Price is published in a daily
newspaper of national circulation. If the foregoing conditions are not satisfied
with respect to a Holder or Holders prior to the close of business on the
Purchase Date and the Company has elected to purchase the Securities pursuant to
this Section 3.08 through the issuance of shares of Common Stock, the Company
shall pay the entire Purchase Price of the Securities of such Holder or Holders
in cash.

                  The "Market Price" of the Common Stock means the average of
the Sale Prices of the Common Stock for the five trading day period ending on
the third Business Day (if the third Business Day prior to the applicable
Purchase Date is a trading day or, if not, then on the last trading day) prior
to the applicable Purchase Date, appropriately adjusted to take into account the
occurrence, during the period commencing on the first of such trading days
during such five trading day period and ending on such Purchase Date, of any
event described in Section 11.06, 11.07 or 11.08; subject, however, to the
conditions set forth in Sections 11.09 and 11.10.

<PAGE>

                                      -31-

                  (e)      Notice of Election. The Company's notice of election
to purchase with cash or Common Stock or any combination thereof shall be sent
to the Holders (and to beneficial owners as required by applicable law) in the
manner provided in Section 14.02 at the time specified in Section 3.08(c) or
(d), as applicable (the "Company Notice"). Such Company Notice shall state the
manner of payment elected and shall contain the following information:

                  In the event the Company has elected to pay the Purchase Price
(or a specified percentage thereof) with Common Stock, the Company Notice shall:

                  (1)      state that each Holder will receive Common Stock with
         a Market Price determined as of a specified date prior to the Purchase
         Date equal to such specified percentage of the Purchase Price of the
         Securities held by such Holder (except any cash amount to be paid in
         lieu of fractional shares);

                  (2)      set forth the method of calculating the Market Price
         of the Common Stock; and

                  (3)      state that because the Market Price of Common Stock
         will be determined prior to the Purchase Date, Holders will bear the
         market risk with respect to the value of the Common Stock to be
         received from the date such Market Price is determined to the Purchase
         Date.

                  In any case, each Company Notice shall include a form of
Purchase Notice to be completed by a Securityholder and shall state:

                  (i)      the Purchase Price, the Conversion Rate and accrued
         and unpaid cash interest, if any, that will be accrued and payable with
         respect to the Securities as of the Purchase Date;

                  (ii)     whether the Company will pay the Purchase Price in
         cash or in Common Stock or any combination thereof, specifying the
         percentage of each;

                  (iii)    the name and address of the Paying Agent and the
         Conversion Agent;

                  (iv)     that Securities as to which a Purchase Notice has
         been given may be converted pursuant to Article 11 hereof only if the
         applicable Purchase Notice has been withdrawn in accordance with the
         terms of this Indenture;

                  (v)      that Securities must be surrendered to the Paying
         Agent to collect payment of the Purchase Price and interest, if any;

                  (vi)     that the Purchase Price for any Security as to which
         a Purchase Notice has been given and not withdrawn, together with any
         cash interest payable with respect

<PAGE>

                                      -32-

         thereto, will be paid promptly following the later of the Purchase Date
         and the time of surrender of such Security as described in (v);

                  (vii)    the procedures the Holder must follow to exercise
         rights under Section 3.08 and a brief description of those rights;

                  (viii)   briefly, the conversion rights of the Securities and
         that Holders who want to convert Securities must satisfy the
         requirements set forth in paragraph 8 of the Securities;

                  (ix)     the procedures for withdrawing a Purchase Notice
         (including, without limitation, for a conditional withdrawal pursuant
         to the terms of Section 3.08(a)(1)(D) or Section 3.10);

                  (x)      that, unless the Company defaults in making payment
         of such Purchase Price and cash interest, if any, Original Issue
         Discount and cash interest, if any, on Securities surrendered for
         purchase will cease to accrue on and after the Purchase Date; and

                  (xi)     the CUSIP number of the Securities.

                  At the Company's request, the Trustee shall give such Company
Notice in the Company's name and at the Company's expense; provided, however,
that, in all cases, the text of such Company Notice shall be prepared by the
Company.

                  Upon determination of the actual number of shares of Common
Stock to be issued for each $1,000 Principal Amount at Maturity of Securities,
the Company will issue a press release and publish such determination on the
Company's web site on the World Wide Web.

                  (f)      Covenants of the Company. All shares of Common Stock
delivered upon purchase of the Securities shall be newly issued shares or
treasury shares, shall be duly authorized, validly issued, fully paid and
nonassessable and shall be free from preemptive rights and free of any lien or
adverse claim created by the Company.

                  The Company shall use its reasonable efforts to list or cause
to have quoted any shares of Common Stock to be issued on the Nasdaq National
Market or the principal United States securities exchange or over-the-counter or
other domestic market on which any other shares of the Common Stock are then
listed or quoted. The Company will promptly inform the Trustee in writing of any
such listing.

                  (g)      Procedure upon Purchase. The Company shall deposit
cash (in respect of a cash purchase under Section 3.08(c) or for fractional
interests as applicable) or shares of Common Stock, or a combination thereof, as
applicable, at the time and in the manner as provided in Section 3.11,
sufficient to pay the aggregate Purchase Price of, and any accrued and unpaid
contingent interest with respect to all Securities to be purchased pursuant to
this Section 3.08. As

<PAGE>

                                      -33-

soon as practicable after the Purchase Date, the Company shall deliver to each
Holder entitled to receive Common Stock through the Paying Agent, a certificate
for the number of full shares of Common Stock issuable in payment of the
Purchase Price and cash in lieu of any fractional interests. The person in whose
name the certificate for Common Stock is registered shall be treated as a holder
of record of shares of Common Stock on the Business Day following the Purchase
Date. Subject to Section 3.08(d), no payment or adjustment will be made for
dividends on the Common Stock the record date for which occurred on or prior to
the Purchase Date.

                  (h)      Taxes. If a Holder of a Security is paid in Common
Stock, the Company shall pay any documentary, stamp or similar issue or transfer
tax due on such issue of shares of Common Stock. However, the Holder shall pay
any such tax which is due because the Holder requests the shares of Common Stock
to be issued in a name other than the Holder's name. The Paying Agent may refuse
to deliver the certificates representing the Common Stock being issued in a name
other than the Holder's name until the Paying Agent receives a sum sufficient to
pay any tax which will be due because the shares of Common Stock are to be
issued in a name other than the Holder's name. Nothing herein shall preclude any
income tax withholding required by law or regulations.

                  SECTION 3.09 Purchase of Securities at Option of the Holder
upon Change in Control.

                  (a)      If there shall have occurred a Change in Control,
Securities shall be purchased by the Company, at the option of the Holder
thereof, at a purchase price specified in paragraph 6 of the Securities (the
"Change in Control Purchase Price"), as of the date that is no later than 30
Business Days after the occurrence of the Change in Control but in no event
prior to the date on which such Change in Control occurs (the "Change in Control
Purchase Date"), subject to satisfaction by or on behalf of the Holder of the
requirements set forth in Section 3.09(c).

                  A "Change in Control" means the occurrence of any of the
following: (a) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
subsidiaries, taken as a whole, to any "person" or "group" (as such terms are
used in Section 13(d) of the Exchange Act), (b) the adoption of a plan relating
to the liquidation or dissolution of the Company, (c) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" or "group" (as such terms are used in
Section 13(d) of the Exchange Act) becomes the "beneficial owner" (as such term
is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly through one or more intermediaries, of more than 35% of the voting
power of the outstanding voting stock of the Company, or (d) the first day on
which more than a majority of the members of the Board of Directors of the
Company are not Continuing Directors.

                  "Continuing Directors" means, as of any date of determination,
any member of the Board of Directors of the Company who (a) was a member of the
Board of Directors of the Company on February 10, 2004 or (b) was nominated for
election to the Board of Directors of
<PAGE>

                                      -34-

the Company with the approval of, or whose election to the Board of Directors of
the Company was ratified by, at least a majority of the Continuing Directors who
were members of the Board of Directors of the Company at the time of such
nomination or election.

                  (b)      Within 15 Business Days after the occurrence of a
Change in Control, the Company shall mail a written notice of Change in Control
by first-class mail to the Trustee and to each Holder (and to beneficial owners
as required by applicable law). The notice shall include a form of Change in
Control Purchase Notice to be completed by the Securityholder and shall state:

                  (1)      briefly, the events causing a Change in Control and
         the date of such Change in Control;

                  (2)      the date by which the Change in Control Purchase
         Notice pursuant to this Section 3.09 must be given;

                  (3)      the Change in Control Purchase Date;

                  (4)      the Change in Control Purchase Price and, to the
         extent known at the time of such notice, the amount of interest, if
         any, that will be accrued and payable with respect to the Securities as
         of the Change in Control Purchase Date;

                  (5)      the name and address of the Paying Agent and the
         Conversion Agent;

                  (6)      the Conversion Rate and any adjustments thereto
         resulting from the Change in Control;

                  (7)      that Securities as to which a Change in Control
         Purchase Notice has been given may be converted pursuant to Article 11
         hereof only if the Change in Control Purchase Notice has been withdrawn
         in accordance with the terms of this Indenture;

                  (8)      that Securities must be surrendered to the Paying
         Agent to collect payment of the Change in Control Purchase Price and
         accrued and unpaid cash interest, if any;

                  (9)      that the Change in Control Purchase Price for any
         Security as to which a Change in Control Purchase Notice has been duly
         given and not withdrawn, together with any accrued interest payable
         with respect thereto, will be paid promptly following the later of the
         Change in Control Purchase Date and the time of surrender of such
         Security as described in (8);

                  (10)     briefly, the procedures the Holder must follow to
         exercise rights under this Section 3.09;

                  (11)     briefly, the conversion rights of the Securities;

<PAGE>
                                      -35-

                  (12)     the procedures for withdrawing a Change in Control
         Purchase Notice;

                  (13)     that, unless the Company defaults in making payment
         of such Change in Control Purchase Price and contingent interest, if
         any on Securities surrendered for purchase, Original Issue Discount or
         cash interest on Securities surrendered for purchase will cease to
         accrue on and after the Change in Control Purchase Date; and

                  (14)     the CUSIP number of the Securities.

                  (c)      A Holder may exercise its rights specified in Section
3.09(a) upon delivery of a written notice of purchase (a "Change in Control
Purchase Notice") to the Paying Agent at any time prior to the close of business
on the Change in Control Purchase Date, stating:

                  (1)      the certificate number of the Security which the
         Holder will deliver to be purchased;

                  (2)      the portion of the Principal Amount at Maturity of
         the Security which the Holder will deliver to be purchased, which
         portion must be $1,000 or an integral multiple thereof; and

                  (3)      that such Security shall be purchased pursuant to the
         terms and conditions specified in paragraph 6 of the Securities.

                  The delivery of such Security to the Paying Agent prior to, on
or after the Change in Control Purchase Date (together with all necessary
endorsements) at the offices of the Paying Agent shall be a condition to the
receipt by the Holder of the Change in Control Purchase Price therefor;
provided, however, that such Change in Control Purchase Price shall be so paid
pursuant to this Section 3.09 only if the Security so delivered to the Paying
Agent shall conform in all respects to the description thereof set forth in the
related Change in Control Purchase Notice.

                  The Company shall purchase from the Holder thereof, pursuant
to this Section 3.09, a portion of a Security if the Principal Amount at
Maturity of such portion is $1,000 or an integral multiple of $1,000. Provisions
of this Indenture that apply to the purchase of all of a Security also apply to
the purchase of such portion of such Security.

                  Any purchase by the Company contemplated pursuant to the
provisions of this Section 3.09 shall be consummated by the delivery of the
consideration to be received by the Holder (together with accrued and unpaid
interest, if any) promptly following the later of the Change in Control Purchase
Date and the time of delivery of the Security to the Paying Agent in accordance
with this Section 3.09.

                  Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Change in Control Purchase Notice
contemplated by this Section 3.09(c) shall have the right to withdraw such
Change in Control Purchase Notice at any time prior to the close

<PAGE>

                                      -36-

of business on the Business Day prior to the Change in Control Purchase Date by
delivery of a written notice of withdrawal to the Paying Agent in accordance
with Section 3.10.

                  The Paying Agent shall promptly notify the Company of the
receipt by it of any Change in Control Purchase Notice or written withdrawal
thereof.

                  The Company shall not be required to comply with this Section
3.09 if a third party mails a written notice of Change in Control in the manner,
at the times and otherwise in compliance with this Section 3.09 and repurchases
all Securities for which a Change in Control Purchase Notice shall be delivered
and not withdrawn.

                  SECTION 3.10 Effect of Purchase Notice or Change in Control
Purchase Notice. Upon receipt by the Paying Agent of the Purchase Notice or
Change in Control Purchase Notice specified in Section 3.08(a) or Section
3.09(c), as applicable, the Holder of the Security in respect of which such
Purchase Notice or Change in Control Purchase Notice, as the case may be, was
given shall (unless such Purchase Notice or Change in Control Purchase Notice is
withdrawn as specified in the following two paragraphs) thereafter be entitled
to receive solely the Purchase Price or Change in Control Purchase Price, as the
case may be, and any accrued and unpaid interest, with respect to such Security.
Such Purchase Price or Change in Control Purchase Price and any accrued and
unpaid cash interest, if any, shall be paid to such Holder, subject to receipt
of funds and/or securities by the Paying Agent, promptly following the later of
(x) the Purchase Date or the Change in Control Purchase Date, as the case may
be, with respect to such Security (provided the conditions in Section 3.08(a) or
Section 3.09(c), as applicable, have been satisfied) and (y) the time of
delivery of such Security to the Paying Agent by the Holder thereof in the
manner required by Section 3.08(a) or Section 3.09(c), as applicable. Securities
in respect of which a Purchase Notice or Change in Control Purchase Notice, as
the case may be, has been given by the Holder thereof may not be converted
pursuant to Article 11 hereof on or after the date of the delivery of such
Purchase Notice or Change in Control Purchase Notice, as the case may be, unless
such Purchase Notice or Change in Control Purchase Notice, as the case may be,
has first been validly withdrawn as specified in the following two paragraphs.

                  A Purchase Notice or Change in Control Purchase Notice, as the
case may be, may be withdrawn by means of a written notice of withdrawal
delivered to the office of the Paying Agent in accordance with the Purchase
Notice or Change in Control Purchase Notice, as the case may be, at any time
prior to the close of business on the Business Day prior to the Purchase Date or
the Change in Control Purchase Date, as the case may be, specifying:

                  (1)      the certificate number of the Security in respect of
         which such notice of withdrawal is being submitted,

                  (2)      the Principal Amount at Maturity of the Security with
         respect to which such notice of withdrawal is being submitted, and

<PAGE>
                                      -37-

                  (3)      the Principal Amount at Maturity, if any, of such
         Security which remains subject to the original Purchase Notice or
         Change in Control Purchase Notice, as the case may be, and which has
         been or will be delivered for purchase by the Company.

                  A written notice of withdrawal of a Purchase Notice may be in
the form set forth in the preceding paragraph or may be in the form of (i) a
conditional withdrawal contained in a Purchase Notice pursuant to the terms of
Section 3.08(a)(1)(D) or (ii) a conditional withdrawal containing the
information set forth in Section 3.08(a)(1)(D) and the preceding paragraph and
contained in a written notice of withdrawal delivered to the Paying Agent as set
forth in the preceding paragraph.

                  There shall be no purchase of any Securities pursuant to
Section 3.08 (other than through the issuance of Common Stock in payment of the
Purchase Price, including cash in lieu of fractional shares) or 3.09 if there
has occurred (prior to, on or after, as the case may be, the giving, by the
Holders of such Securities, of the required Purchase Notice or Change in Control
Purchase Notice, as the case may be) and is continuing an Event of Default
(other than a default in the payment of the Purchase Price or Change in Control
Purchase Price, as the case may be, and any accrued and unpaid cash interest
with respect to such Securities). The Paying Agent will promptly return to the
respective Holders thereof any Securities (x) with respect to which a Purchase
Notice or Change in Control Purchase Notice, as the case may be, has been
withdrawn in compliance with this Indenture, or (y) held by it during the
continuance of an Event of Default (other than a default in the payment of the
Purchase Price or Change in Control Purchase Price, as the case may be, and any
accrued and unpaid cash interest with respect to such Securities) in which case,
upon such return, the Purchase Notice or Change in Control Purchase Notice with
respect thereto shall be deemed to have been withdrawn.

                  SECTION 3.11 Deposit of Purchase Price or Change in Control
Purchase Price. Prior to 10:00 a.m., New York City time, on the Business Day
following the Purchase Date or the Change in Control Purchase Date, as the case
may be, the Company shall deposit with the Trustee or with the Paying Agent (or,
if the Company or a Subsidiary or an Affiliate of either of them is acting as
the Paying Agent, shall segregate and hold in trust as provided in Section 2.04)
an amount of money (in immediately available funds if deposited on such Business
Day) or Common Stock, if permitted hereunder, sufficient to pay the aggregate
Purchase Price or Change in Control Purchase Price, as the case may be, of, and
any accrued and unpaid cash interest with respect to, all the Securities or
portions thereof which are to be purchased as of the Purchase Date or Change in
Control Purchase Date, as the case may be.

                  SECTION 3.12 Securities Purchased in Part. Any Security which
is to be purchased only in part shall be surrendered at the office of the Paying
Agent (with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service charge,
a new Security or Secu-

<PAGE>
                                      -38-

rities, of any authorized denomination as requested by such Holder in aggregate
Principal Amount at Maturity equal to, and in exchange for, the portion of the
Principal Amount at Maturity of the Security so surrendered which is not
purchased.

                  SECTION 3.13 Repayment to the Company. The Trustee and the
Paying Agent shall promptly return to the Company any cash or shares of Common
Stock that remain unclaimed as provided in paragraph 14 of the Securities,
together with interest or dividends, if any, thereon (subject to the provisions
of Section 7.01(f)), held by them for the payment of the Purchase Price or
Change in Control Purchase Price, as the case may be, or contingent interest, if
any; provided, however, that to the extent that the aggregate amount of cash or
shares of Common Stock deposited by the Company pursuant to Section 3.11 exceeds
the aggregate Purchase Price or Change in Control Purchase Price, as the case
may be, of, and the accrued and unpaid contingent interest with respect to, the
Securities or portions thereof which the Company is obligated to purchase as of
the Purchase Date or Change in Control Purchase Date, as the case may be,
whether as a result of withdrawal or otherwise, then promptly after the Business
Day following the Purchase Date or Change in Control Purchase Date, as the case
may be, the Trustee shall return any such excess to the Company together with
interest or dividends, if any, thereon (subject to the provisions of Section
7.01(f)).

                                    ARTICLE 4

                                    COVENANTS

                  SECTION 4.01 Payment of Securities. The Company shall promptly
make all payments in respect of the Securities on the dates and in the manner
provided in the Securities or pursuant to this Indenture. Any amounts to be
given to the Trustee or Paying Agent, shall be deposited with the Trustee or
Paying Agent by 11:30 a.m., New York City time on the payment date, by the
Company. Principal Amount at Maturity, Restated Principal Amount, Issue Price
plus accrued Original Issue Discount, Redemption Price, Purchase Price, Change
in Control Purchase Price, and cash interest shall be considered paid on the
applicable date due if on such date (or, in the case of a Purchase Price or
Change in Control Purchase Price, on the Business Day following the applicable
Purchase Date or Change in Control Purchase Date, as the case may be) the
Trustee or the Paying Agent holds, in accordance with this Indenture, money or
securities, if permitted hereunder, sufficient to pay all such amounts then due.

                  The Company shall, to the extent permitted by law, pay cash
interest on overdue amounts at the rate per annum set forth in paragraph 1 of
the Securities, compounded semiannually, which interest shall accrue from the
date such overdue amount was originally due to the date payment of such amount,
including interest thereon, has been made or duly provided for. All such
interest shall be payable on demand. The accrual of such interest on overdue
amounts shall be in lieu of, and not in addition to, the continued accrual of
Original Issue Discount.

                  SECTION 4.02 SEC and Other Reports. The Company shall deliver
to the Trustee, within 15 days after it files such annual and quarterly reports,
information, documents

<PAGE>

                                      -39-

and other reports with the SEC, copies of its annual report and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. The Company also shall comply with the provisions of TIA Section
314(a). Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of the same shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).

                  SECTION 4.03 Compliance Certificate. The Company shall deliver
to the Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending on September 30, 2004) an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.

                  SECTION 4.04 Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.

                  SECTION 4.05 Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
of the Trustee, Registrar, Paying Agent and Conversion Agent where Securities
may be presented or surrendered for payment, where Securities may be surrendered
for registration of transfer, exchange, purchase, redemption or conversion and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served. The office of the Trustee, located at 100 Wall
Street, Suite 1600, New York, NY 10005 (Attention: Corporate Trust Services),
shall initially be such office or agency for all of the aforesaid purposes. The
Company shall give prompt written notice to the Trustee of the location, and of
any change in the location, of any such office or agency (other than a change in
the location of the office of the Trustee). If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the address of the Trustee set forth in Section
14.02.

                  The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, The City of New York, for such purposes.

<PAGE>

                                      -40-

                  SECTION 4.06 Delivery of Certain Information. At any time when
the Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the
request of a Holder or any beneficial holder of Securities or shares of Common
Stock which are restricted securities issued upon conversion thereof, the
Company will promptly furnish or cause to be furnished Rule 144A Information (as
defined below) to such Holder or any beneficial holder of Securities or holder
of shares of Common Stock issued upon conversion of Securities, or to a
prospective purchaser of any such security designated by any such holder, as the
case may be, to the extent required to permit compliance by such Holder or
holder with Rule 144A under the Securities Act in connection with the resale of
any such security. "Rule 144A Information" shall be such information as is
specified pursuant to Rule 144A(d)(4) under the Securities Act.

                  SECTION 4.07 Limitation on Guarantees of Indebtedness by
Subsidiaries. The Company will not permit any Subsidiary to guarantee the
payment of any Debt of the Company unless such Subsidiary simultaneously
executes and delivers a supplemental indenture to the indenture providing for a
Guarantee of the Securities by such Subsidiary to the extent required in Article
13 hereof.

                  SECTION 4.08 Covenant to Comply with Securities Laws upon
Purchase of Securities. In connection with any offer to purchase or purchase of
Securities under Section 3.08 or 3.09 hereof (provided that such offer or
purchase constitutes an "Issuer Tender Offer" for purposes of Rule 13e-4 (which
term, as used herein, includes any successor provision thereto) under the
Exchange Act at the time of such offer or purchase), the Company shall to the
extent applicable (i) comply with Rule 13e-4 and Rule 14e-1 under the Exchange
Act, (ii) file the related Schedule TO (or any successor schedule, form or
report) under the Exchange Act, and (iii) otherwise comply with all Federal and
state securities laws so as to permit the rights and obligations under Sections
3.08 and 3.09 to be exercised in the time and in the manner specified in
Sections 3.08 and 3.09.

                                   ARTICLE 5

                              SUCCESSOR CORPORATION

                  SECTION 5.01 When Company May Merge or Transfer Assets. The
Company shall not consolidate with or merge with or into any other person or
convey, transfer or lease all or substantially all of its properties and assets
to any person, nor will the Company permit any Subsidiary to enter into any such
transaction or series of transactions if such transaction or series of
transactions, in the aggregate, would result in a sale, assignment, transfer,
lease or other disposition of all or substantially all of the properties and
assets of the Company and its Subsidiaries on a consolidated basis to any other
person or persons, unless:

                  (a)      either (1) the Company or such subsidiary shall be
         the surviving corporation or (2) the person (if other than the Company)
         formed by such consolidation or into which the Company or such
         Subsidiary is merged or the person which acquires by conveyance,
         transfer or lease the properties and assets of the Company or such
         Subsidiary

<PAGE>

                                      -41-

         substantially as an entirety (i) shall be organized and validly
         existing under the laws of the United States or any state thereof or
         the District of Columbia and (ii) shall expressly assume, by an
         indenture supplemental hereto, executed and delivered to the Trustee,
         in form reasonably satisfactory to the Trustee, all of the obligations
         of the Company or such Subsidiary under the Securities and this
         Indenture;

                  (b)      immediately after giving effect to such transaction,
         no Default shall have occurred and be continuing; and

                  (c)      the Company shall have delivered to the Trustee an
         Officers' Certificate and an Opinion of Counsel, each stating that such
         consolidation, merger, conveyance, transfer or lease and, if a
         supplemental indenture is required in connection with such transaction,
         such supplemental indenture, comply with this Article 5 and that all
         conditions precedent herein provided for relating to such transaction
         have been satisfied.

                  For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise) of the properties and assets of one or more
Subsidiaries (other than to the Company or another Subsidiary), which, if such
assets were owned by the Company, would constitute all or substantially all of
the properties and assets of the Company, shall be deemed to be the transfer of
all or substantially all of the properties and assets of the Company.

                  The successor person formed by such consolidation or into
which the Company or the applicable Subsidiary is merged or the successor person
to which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company or the
applicable Subsidiary under this Indenture with the same effect as if such
successor had been named as the Company or the applicable Subsidiary herein; and
thereafter, except in the case of a lease and any obligations the Company or the
applicable Subsidiary may have under a supplemental indenture pursuant to
Section 11.14, the Company or the applicable Subsidiary shall be discharged from
all obligations and covenants under this Indenture and the Securities. Subject
to Section 9.06, the Company, the applicable Subsidiary, the Trustee and the
successor person shall enter into a supplemental indenture to evidence the
succession and substitution of such successor person and such discharge and
release of the Company and the applicable Subsidiary.

                  A Guarantor shall not consolidate with or merge into any
Person or convey, transfer or lease its properties and assets substantially as
an entity to another Person unless the surviving Person assumes the obligations
of such Guarantor and the surviving Person is a corporation organized and
existing under the laws of the United States, any state thereof or the District
of Columbia, except if all of the assets or all of the common stock of such
Guarantor is sold to a non-affiliate of the Company, in which case the Guarantee
is released.

<PAGE>

                                      -42-

                                    ARTICLE 6

                              DEFAULTS AND REMEDIES

                  SECTION 6.01 Events of Default. An "Event of Default" occurs
if:

                  (1)      the Company defaults in payment of any interest when
         due under the Securities and such default continues for 30 days;

                  (2)      the Company defaults in the payment of the Principal
         Amount at Maturity (or, if the Securities have been converted to
         semiannual coupon notes following a Tax Event pursuant to Section 10.01
         of this Indenture, the Restated Principal Amount), Issue Price plus
         accrued Original Issue Discount or cash interest, Redemption Price,
         Purchase Price or Change in Control Purchase Price on any Security when
         the same becomes due and payable at its Stated Maturity, upon
         redemption, upon declaration, when due for purchase by the Company or
         otherwise;

                  (3)      the Company fails to comply with any of its
         agreements in the Security or this Indenture (other than those referred
         to in clauses (1) and (2) above) and such failure continues for 60 days
         after receipt by the Company of a Notice of Default;

                  (4)      default under any Debt, whether such Debt now exists
         or is created later, which default results in such Debt becoming or
         being declared due and payable prior to the date on which it would
         otherwise have become due and payable, and the principal amount of all
         Debt so accelerated, together with all Debt due and payable but not
         paid prior to the end of any grace period, is $10,000,000 or more, and
         such acceleration has not been rescinded or annulled within a period of
         10 days after receipt by the Company of a Notice of Default from the
         Trustee; provided, however, that if any such default shall be cured,
         waived, rescinded or annulled, then the Event of Default by reason
         thereof shall be deemed not to have occurred;

                  (5)      any Guarantee ceases to be in full force and effect
         or is declared null and void or any Guarantor denies that it has any
         further liability under any Guarantee, or gives notice to such effect
         (other than by reason of the termination of this Indenture or the
         release of any such Guarantee in accordance with this Indenture) and
         such condition shall have continued for a period of 30 days after
         written notice of such failure requiring the Guarantor and the Company
         to remedy the same shall have been given (x) to the Company by the
         Trustee or (y) to the Company and the Trustee by the holders of 25% in
         aggregate principal amount of the Securities then outstanding;

                  (6)      the Company pursuant to or under or within the
         meaning of any Bankruptcy Law:

                           (A)      commences a voluntary case or proceeding;

<PAGE>

                                      -43-

                           (B)      consents to the entry of an order for relief
                  against it in an involuntary case or proceeding or the
                  commencement of any case against it;

                           (C)      consents to the appointment of a Custodian
                  of it or for any substantial part of its property;

                           (D)      makes a general assignment for the benefit
                  of its creditors;

                           (E)      files a petition in bankruptcy or answer or
                  consent seeking reorganization or relief; or

                           (F)      consents to the filing of such petition or
                  the appointment of or taking possession by a Custodian; or

                  (7)      a court of competent jurisdiction enters an order or
         decree under any Bankruptcy Law that:

                           (A)      is for relief against the Company in an
                  involuntary case or proceeding, or adjudicates the Company
                  insolvent or bankrupt;

                           (B)      appoints a Custodian of the Company or for
                  any substantial part of its property; or

                           (C)      orders the winding up or liquidation of the
                  Company;

                  and the order or decree remains unstayed and in effect for 60
         days.

                  "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors.

                  "Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.

                  A Default under clause (3) or clause (4) above is not an Event
of Default until the Trustee notifies the Company, or the Holders of at least
25% in aggregate Principal Amount at Maturity of the Securities at the time
outstanding notify the Company and the Trustee, of the Default and the Company
or a Guarantor does not cure such Default (and such Default is not waived)
within the time specified in clause (3) or clause (4) above after actual receipt
of such notice. Any such notice must specify the Default, demand that it be
remedied and state that such notice is a "Notice of Default".

                  The Company shall deliver to the Trustee, within 30 days after
it becomes aware of the occurrence thereof, written notice of any event which
with the giving of notice or the lapse of time, or both, would become an Event
of Default under clause (3) or clause (4) above, its status and what action the
Company is taking or proposes to take with respect thereto.

<PAGE>

                                      -44-

                  SECTION 6.02 Acceleration. If an Event of Default (other than
an Event of Default specified in Section 6.01(6) or (7) in respect of the
Company) occurs and is continuing, the Trustee by written notice to the Company,
or the Holders of at least 25% in aggregate Principal Amount at Maturity of the
Securities at the time outstanding by notice to the Company and the Trustee, may
declare the Issue Price plus accrued Original Issue Discount or cash interest
(or if the Securities have been converted to semiannual coupon notes following a
Tax Event, the Restated Principal Amount, plus accrued interest) through the
date of declaration on all the Securities to be immediately due and payable.
Upon such a declaration, such Issue Price plus accrued Original Issue Discount,
and such accrued and unpaid interest, if any, shall be due and payable
immediately. If an Event of Default specified in Section 6.01(6) or (7) occurs
in respect of the Company and is continuing, the Issue Price plus accrued
Original Issue Discount or accrued cash interest (or if the Securities have been
converted to semiannual coupon notes following a Tax Event, the Restated
Principal Amount, plus accrued interest) (including contingent interest) on all
the Securities shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Securityholders. The
Holders of a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding, by notice to the Trustee (and without notice
to any other Securityholder), may rescind an acceleration and its consequences
if the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived except nonpayment of the
Issue Price plus accrued Original Issue Discount or accrued cash interest (or,
if the Securities have been converted to semiannual coupon notes following a Tax
Event, the Restated Principal Amount, plus accrued interest) that have become
due solely as a result of acceleration and if all amounts due to the Trustee
under Section 7.07 have been paid. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.

                  SECTION 6.03 Other Remedies. If an Event of Default occurs and
is continuing, the Trustee may pursue any available remedy to collect the
payment of the Issue Price plus accrued Original Issue Discount on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.

                  The Trustee may maintain a proceeding even if the Trustee does
not possess any of the Securities or does not produce any of the Securities in
the proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. Except as set forth in Section 2.07 hereof, no remedy is
exclusive of any other remedy. All available remedies are cumulative.

                  SECTION 6.04 Waiver of Past Defaults. Subject to Section 6.02,
the Holders of a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding, by notice to the Trustee (and without notice
to any other Securityholder), may waive an existing Default and its consequences
except (1) an Event of Default described in Section 6.01(1) or (2), (2) a
Default in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Securityholder affected or (3) a Default which
constitutes a failure to convert

<PAGE>

                                      -45-

any Security in accordance with the terms of Article 11. When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right. This Section 6.04 shall be in lieu
of Section 316(a)1(B) of the TIA and such Section 316(a)1(B) is hereby expressly
excluded from this Indenture, as permitted by the TIA.

                  SECTION 6.05 Control by Majority. The Holders of a majority in
aggregate Principal Amount at Maturity of the Securities at the time outstanding
may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or of exercising any trust or power conferred on
the Trustee. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or that the Trustee determines in good
faith is unduly prejudicial to the rights of other Securityholders or would
involve the Trustee in personal liability unless the Trustee is offered
indemnity satisfactory to it. This Section 6.05 shall be in lieu of Section
316(a)1(A) of the TIA and such Section 316(a)1(A) is hereby expressly excluded
from this Indenture, as permitted by the TIA.

                  SECTION 6.06 Limitation on Suits. A Securityholder may not
pursue any remedy with respect to this Indenture or the Securities unless:

                  (1)      the Holder gives to the Trustee written notice
         stating that an Event of Default is continuing;

                  (2)      the Holders of at least 25% in aggregate Principal
         Amount at Maturity of the Securities at the time outstanding make a
         written request to the Trustee to pursue the remedy;

                  (3)      such Holder or Holders offer to the Trustee security
         or indemnity satisfactory to the Trustee against any loss, liability or
         expense;

                  (4)      the Trustee does not comply with the request within
         60 days after receipt of such notice, request and offer of security or
         indemnity; and

                  (5)      the Holders of a majority in aggregate Principal
         Amount at Maturity of the Securities at the time outstanding do not
         give the Trustee a direction inconsistent with the request during such
         60-day period.

                  A Securityholder may not use this Indenture to prejudice the
rights of any other Securityholder or to obtain a preference or priority over
any other Securityholder.

                  SECTION 6.07 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of the Principal Amount at Maturity (or if the Securities
have been converted to semiannual coupon notes following a Tax Event pursuant to
Article 10, the Restated Principal Amount, plus accrued cash interest), Issue
Price plus accrued Original Issue Discount, Redemption Price, Purchase Price,
Change in Control Purchase Price, or cash interest in respect of the Securities
held by such Holder, on or

<PAGE>
                                      -46-

after the respective due dates expressed in the Securities or any Redemption
Date, and to convert the Securities in accordance with Article 11, or to bring
suit for the enforcement of any such payment on or after such respective dates
or the right to convert, shall not be impaired or affected adversely without the
consent of such Holder.

                  SECTION 6.08 Collection Suit by Trustee. If an Event of
Default described in Section 6.01(1) or (2) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount owing with respect to the Securities
and the amounts provided for in Section 7.07.

                  SECTION 6.09 Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the Principal Amount at Maturity, Restated
Principal Amount, Issue Price plus accrued Original Issue Discount or cash
interest, Redemption Price, Purchase Price or Change in Control Purchase Price
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of any such amount) shall be entitled and empowered,
by intervention in such proceeding or otherwise,

                  (a)      to file and prove a claim for the whole amount of the
         Principal Amount at Maturity, Restated Principal Amount, Issue Price
         plus accrued Original Issue Discount or cash interest, Redemption
         Price, Purchase Price, Change in Control Purchase Price (or, if the
         Securities have been converted to semiannual coupon notes following a
         Tax Event, the Restated Principal Amount, plus accrued interest), as
         the case may be, and to file such other papers or documents as may be
         necessary or advisable in order to have the claims of the Trustee
         (including any claim for the reasonable compensation, expenses,
         disbursements and advances of the Trustee, its agents and counsel or
         any other amounts due the Trustee under Section 7.07) and of the
         Holders allowed in such judicial proceeding, and

                  (b)      to collect and receive any moneys or other property
         payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07.

                  Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement,

<PAGE>
                                      -47-

adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.

                  SECTION 6.10 Priorities. If the Trustee collects any money
pursuant to this Article 6, it shall pay out the money in the following order:

                  FIRST: to the Trustee for amounts due under Section 7.07;

                  SECOND: to Securityholders for amounts due and unpaid on the
         Securities for the Principal Amount at Maturity, Restated Principal
         Amount, Issue Price plus accrued Original Issue Discount or cash
         interest, Redemption Price, Purchase Price or Change in Control
         Purchase Price (or, if the Securities have been converted to semiannual
         coupon notes following a Tax Event, the Restated Principal Amount, plus
         accrued interest), as the case may be, ratably, without preference or
         priority of any kind, according to such amounts due and payable on the
         Securities; and

                  THIRD: the balance, if any, to the Company.

                  The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section 6.10. At least 15 days
before such record date, the Trustee shall mail to each Securityholder and the
Company a notice that states the record date, the payment date and the amount to
be paid.

                  SECTION 6.11 Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant (other than the Trustee)
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant. This
Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 or a suit by Holders of more than 10% in aggregate
Principal Amount at Maturity of the Securities at the time outstanding. This
Section 6.11 shall be in lieu of Section 315(e) of the TIA and such Section
315(e) is hereby expressly excluded from this Indenture, as permitted by the
TIA.

                  SECTION 6.12 Waiver of Stay, Extension or Usury Laws. The
Company covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury or other law
wherever enacted, now or at any time hereafter in force, which would prohibit or
forgive the Company from paying all or any portion of the Principal Amount at
Maturity, Restated Principal Amount, Issue Price plus accrued Original Issue
Discount or cash interest, Redemption Price, Purchase Price or Change in Control
Purchase Price (or, if the Securities have been converted to semiannual coupon
notes following a Tax Event, the Restated Principal Amount, plus accrued
interest), as contemplated herein, or which may affect

<PAGE>

                                      -48-

the covenants or the performance of this Indenture; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.

                                    ARTICLE 7

                                     TRUSTEE

                  SECTION 7.01 Duties of Trustee.

                  (a)      If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it by
this Indenture and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.

                  (b)      Except during the continuance of an Event of Default:

                  (1)      the Trustee need perform only those duties that are
         specifically set forth in this Indenture and no others; and

                  (2)      in the absence of bad faith on its part, the Trustee
         may conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon certificates or
         opinions furnished to the Trustee and conforming to the requirements of
         this Indenture, but in case of any such certificates or opinions which
         by any provision hereof are specifically required to be furnished to
         the Trustee, the Trustee shall examine the certificates and opinions to
         determine whether or not they conform to the requirements of this
         Indenture, but need not confirm or investigate the accuracy of
         mathematical calculations or other facts stated therein.

This Section 7.01(b) shall be in lieu of Section 315(a) of the TIA and such
Section 315(a) is hereby expressly excluded from this Indenture, as permitted by
the TIA.

                  (c)      The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its own willful
misconduct, except that:

                  (1)      this paragraph (c) does not limit the effect of
         paragraph (b) of this Section 7.01;

                  (2)      the Trustee shall not be liable for any error of
         judgment made in good faith by a Responsible Officer unless it is
         proved that the Trustee was negligent in ascertaining the pertinent
         facts; and

<PAGE>

                                      -49-

                  (3)      the Trustee shall not be liable with respect to any
         action it takes or omits to take in good faith in accordance with a
         direction received by it pursuant to Section 6.05.

Subparagraphs (c)(1), (2) and (3) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2) and
315(d)(3) are hereby expressly excluded from this Indenture, as permitted by the
TIA.

                  (d)      Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c) and (e) of this
Section 7.01.

                  (e)      The Trustee may refuse to perform any duty or
exercise any right or power or extend or risk its own funds or otherwise incur
any financial liability unless it receives indemnity satisfactory to it against
any loss, liability or expense.

                  (f)      Money held by the Trustee in trust hereunder need not
be segregated from other funds except to the extent required by law. The Trustee
(acting in any capacity hereunder) shall be under no liability for interest on
any money received by it hereunder unless otherwise agreed in writing with the
Company.

                  SECTION 7.02 Rights of Trustee. Subject to its duties and
responsibilities under the provisions of Section 7.01, and, except as expressly
excluded from this Indenture pursuant to said Section 7.01, subject also to its
duties and responsibilities under the TIA:

                  (a)      the Trustee may conclusively rely and shall be
         protected in acting or refraining from acting upon any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         direction, consent, order, bond, debenture, note, other evidence of
         indebtedness or other paper or document believed by it to be genuine
         and to have been signed or presented by the proper party or parties;

                  (b)      whenever in the administration of this Indenture the
         Trustee shall deem it desirable that a matter be proved or established
         prior to taking, suffering or omitting any action hereunder, the
         Trustee (unless other evidence be herein specifically prescribed) may,
         in the absence of bad faith on its part, conclusively rely upon an
         Officers' Certificate;

                  (c)      the Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents or attorneys and the Trustee shall not be responsible
         for any misconduct or negligence on the part of any agent or attorney
         appointed with due care by it hereunder;

                  (d)      the Trustee shall not be liable for any action taken,
         suffered, or omitted to be taken by it in good faith which it believes
         to be authorized or within its rights or powers conferred under this
         Indenture;

<PAGE>

                                      -50-

                  (e)      the Trustee may consult with counsel selected by it
         and any advice or Opinion of Counsel shall be full and complete
         authorization and protection in respect of any action taken or suffered
         or omitted by it hereunder in good faith and in accordance with such
         advice or Opinion of Counsel;

                  (f)      the Trustee shall be under no obligation to exercise
         any of the rights or powers vested in it by this Indenture at the
         request, order or direction of any of the Holders, pursuant to the
         provisions of this Indenture, unless such Holders shall have offered to
         the Trustee security or indemnity satisfactory to it against the costs,
         expenses and liabilities which may be incurred therein or thereby;

                  (g)      any request or direction of the Company mentioned
         herein shall be sufficiently evidenced by a Company Request or Company
         Order and any resolution of the Board of Directors may be sufficiently
         evidenced by a resolution of the Board of Directors;

                  (h)      the Trustee shall not be bound to make any
         investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         direction, consent, order, bond, debenture, note, other evidence of
         indebtedness or other paper or document, but the Trustee, in its
         discretion, may make such further inquiry or investigation into such
         facts or matters as it may see fit, and, if the Trustee shall determine
         to make such further inquiry or investigation, it shall be entitled to
         examine the books, records and premises of the Company, personally or
         by agent or attorney at the sole cost of the Company and shall incur no
         liability or additional liability of any kind by reason of such inquiry
         or investigation;

                  (i)      the Trustee shall not be deemed to have notice of any
         Default or Event of Default unless a Responsible Officer of the Trustee
         has actual knowledge thereof or unless written notice of any event
         which is in fact such a default is received by a Responsible Officer of
         the Trustee at the Corporate Trust Office of the Trustee, and such
         notice references the Securities and this Indenture;

                  (j)      the rights, privileges, protections, immunities and
         benefits given to the Trustee, including, without limitation, its right
         to be indemnified, are extended to, and shall be enforceable by, the
         Trustee in each of its capacities hereunder, and to each agent,
         custodian and other Person employed to act hereunder; and

                  (k)      the Trustee may request that the Company deliver an
         Officers' Certificate setting forth the names of individuals and/or
         titles of officers authorized at such time to take specified actions
         pursuant to this Indenture, which Officers' Certificate may be signed
         by any person authorized to sign an Officers' Certificate, including
         any person specified as so authorized in any such certificate
         previously delivered and not superseded.

<PAGE>
                                      -51-

                  SECTION 7.03 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, Conversion
Agent or co-registrar may do the same with like rights. However, the Trustee
must comply with Sections 7.10 and 7.11.

                  SECTION 7.04 Trustee's Disclaimer. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use or application of
the proceeds from the Securities, it shall not be responsible for any statement
in the registration statement for the Securities under the Securities Act or in
the Indenture or the Securities (other than its certificate of authentication),
or the determination as to which beneficial owners are entitled to receive any
notices hereunder.

                  SECTION 7.05 Notice of Defaults. If a Default occurs and if it
is known to a Responsible Officer of the Trustee, the Trustee shall give to each
Securityholder notice of the Default within 90 days after such Responsible
Officer obtains knowledge of such Default unless such Default shall have been
cured or waived before the giving of such notice. Except in the case of a
Default described in Section 6.01(1) or (2), the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Securityholders.
The second sentence of this Section 7.05 shall be in lieu of the proviso to
Section 315(b) of the TIA and such proviso is hereby expressly excluded from
this Indenture, as permitted by the TIA. The Trustee shall not be deemed to have
knowledge of a Default unless a Responsible Officer of the Trustee has received
written notice of such Default.

                  SECTION 7.06 Reports by Trustee to Holders. Within 60 days
after each May 15 beginning with the May 15 following the date of this
Indenture, the Trustee shall mail to each Securityholder a brief report dated as
of such May 15 that complies with TIA Section 313(a), if required to do so by
such Section 313(a). The Trustee also shall comply with TIA Section 313(b).

                  A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each securities exchange, if
any, on which the Securities are listed. The Company agrees to promptly notify
the Trustee whenever the Securities become listed on any securities exchange and
of any delisting thereof.

                  SECTION 7.07 Compensation and Indemnity. The Company agrees:

                  (a)      to pay to the Trustee from time to time such
         reasonable compensation as the Company and the Trustee shall from time
         to time agree in writing for all services rendered by it hereunder
         (which compensation shall not be limited (to the extent permitted by
         law) by any provision of law in regard to the compensation of a trustee
         of an express trust);

<PAGE>
                                      -52-

                  (b)      to reimburse the Trustee upon its request for all
         reasonable expenses, disbursements and advances incurred or made by the
         Trustee in accordance with any provision of this Indenture (including
         the reasonable compensation and the expenses, advances and
         disbursements of its agents and counsel), except any such expense,
         disbursement or advance as may be attributable to its negligence or bad
         faith; and

                  (c)      to indemnify the Trustee or any predecessor, Trustee
         and their agents for, and to hold them harmless against, any loss,
         damage, claim, liability, cost or expense (including reasonable
         attorney's fees and expenses and taxes (other than taxes based upon,
         measured by or determined by the income of the Trustee)) incurred
         without negligence or bad faith on its part, arising out of or in
         connection with the acceptance or administration of this trust,
         including the reasonable costs and expenses of defending itself against
         any claim (whether asserted by the Company or any Holder or any other
         Person) or liability in connection with the exercise or performance of
         any of its powers or duties hereunder.

                  To secure the Company's payment obligations in this Section
7.07, the Holders shall have been deemed to have granted to the Trustee a lien
prior to the Securities on all money or property held or collected by the
Trustee, except that held in trust to pay the Principal Amount at Maturity,
Issue Price plus accrued Original Issue Discount, Redemption Price, Purchase
Price, Change in Control Purchase Price, or cash interest, if any, as the case
may be, on particular Securities.

                  The Company's payment obligations pursuant to this Section
7.07 shall survive the discharge of this Indenture and the resignation or
removal of the Trustee. When the Trustee incurs expenses after the occurrence of
a Default specified in Section 6.01(6) or (7), the expenses including the
reasonable charges and expenses of its counsel, are intended to constitute
expenses of administration under any Bankruptcy Law.

                  SECTION 7.08 Replacement of Trustee. The Trustee may resign by
so notifying the Company; provided, however, no such resignation shall be
effective until a successor Trustee has accepted its appointment pursuant to
this Section 7.08. The Holders of a majority in aggregate Principal Amount at
Maturity of the Securities at the time outstanding may remove the Trustee by so
notifying the Trustee and the Company. The Company shall remove the Trustee if:

                  (1)      the Trustee fails to comply with Section 7.10;

                  (2)      the Trustee is adjudged bankrupt or insolvent;

                  (3)      a receiver or public officer takes charge of the
         Trustee or its property; or

                  (4)      the Trustee otherwise becomes incapable of acting.

<PAGE>

                                      -53-

                  If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint, by
resolution of its Board of Directors, a successor Trustee.

                  A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company satisfactory in form and
substance to the retiring Trustee and the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Securityholders. The retiring Trustee shall promptly transfer all property held
by it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.07.

                  If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of a majority in aggregate Principal Amount at Maturity
of the Securities at the time outstanding may petition any court of competent
jurisdiction at the expense of the Company for the appointment of a successor
Trustee.

                  If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.

                  SECTION 7.09 Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation, the
resulting, surviving or transferee corporation without any further act shall be
the successor Trustee.

                  SECTION 7.10 Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The
Trustee (or its parent holding company) shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition. Nothing herein contained shall prevent the Trustee from
filing with the Commission the application referred to in the penultimate
paragraph of TIA Section 310(b).

                  SECTION 7.11 Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.

                  SECTION 7.12 Compliance with Patriot Act. Federal law requires
all financial institutions to obtain, verify and record information that
identifies each person who opens an account. For a non-individual person such as
a business entity, a charity, a trust or other legal entity the Trustee will ask
for documentation to verify its formation and existence as a legal entity. The
Trustee may also ask to see financial statements, licenses, identification and
authoriza-

<PAGE>
                                      -54-

tion documents from individuals claiming authority to represent the entity or
other relevant documentation.

                                   ARTICLE 8

                             DISCHARGE OF INDENTURE

                  SECTION 8.01 Discharge of Liability on Securities. When (i)
the Company delivers to the Trustee all outstanding Securities (other than
Securities replaced pursuant to Section 2.07) for cancellation or (ii) all
outstanding Securities have become due and payable and the Company or any
Guarantor irrevocably deposits with the Trustee, the Paying Agent (if the Paying
Agent is not the Company or any of its Affiliates) or the Conversion Agent cash
or, if expressly permitted by the terms of the Securities or the Indenture,
Common Stock sufficient to pay all amounts due and owing on all outstanding
Securities (other than Securities replaced pursuant to Section 2.07), and if in
either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Section 7.07, cease to be of further
effect. The Trustee shall join in the execution of a document prepared by the
Company acknowledging satisfaction and discharge of this Indenture on demand of
the Company accompanied by an Officers' Certificate and Opinion of Counsel and
at the cost and expense of the Company.

                  SECTION 8.02 Repayment to the Company. The Trustee and the
Paying Agent shall return to the Company upon written request any money or
securities held by them for the payment of any amount with respect to the
Securities that remains unclaimed for two years, subject to applicable unclaimed
property law. After return to the Company, Holders entitled to the money or
securities must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person and the Trustee and
the Paying Agent shall have no further liability to the Securityholders with
respect to such money or securities for that period commencing after the return
thereof.

                                   ARTICLE 9

                                   AMENDMENTS

                  SECTION 9.01 Without Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without the consent of any
Securityholder:

                  (1)      to cure any ambiguity, omission, defect or
         inconsistency;

                  (2)      to comply with Article 5 or Section 11.14;

                  (3)      to secure the Company's obligations under the
         Securities and this Indenture;

<PAGE>

                                      -55-

                  (4)      to add to the Company's covenants for the benefit of
         the Securityholders or to surrender any right or power conferred upon
         the Company;

                  (5)      to make any change to comply with the TIA, or any
         amendment thereto, or to comply with any requirement of the SEC in
         connection with the qualification of the Indenture under the TIA, or as
         necessary in connection with the registration of the Securities under
         the Securities Act; or

                  (6)      to make any change that does not adversely affect the
         rights of any Holders (it being understood that any amendment described
         in clause (1) above made solely to conform this Indenture to the final
         offering memorandum provided to investors in connection with the
         initial offering of the Securities will be deemed not to adversely
         affect the rights or interests of Holders).

                  SECTION 9.02 With Consent of Holders. With the written consent
of the Holders of at least a majority in aggregate Principal Amount at Maturity
of the Securities at the time outstanding, the Company and the Trustee may amend
this Indenture or the Securities. However, without the consent of each
Securityholder affected, an amendment to this Indenture or the Securities may
not:

                  (1)      reduce the percentage in Principal Amount at maturity
         of Securities whose Holders must consent to an amendment;

                  (2)      make any change in the manner or rate of accrual of
         Original Issue Discount or cash interest, reduce the rate of cash
         interest referred to in paragraph 1 of the Securities, or extend the
         time for payment of Original Issue Discount or cash interest on any
         Security;

                  (3)      reduce the Principal Amount at Maturity, Restated
         Principal Amount or accrued Original Issue Discount or cash interest,
         with respect to any Security, or extend the Stated Maturity of any
         Security;

                  (4)      reduce the Redemption Price, Purchase Price or Change
         in Control Purchase Price of any Security;

                  (5)      make any Security payable in money or securities
         other than that stated in the Security;

                  (6)      make any change in Article 10 of this Indenture, or
         this Section 9.02, except to increase any percentage set forth therein;

                  (7)      make any change that adversely affects the right to
         convert any Security;

<PAGE>
                                      -56-

                  (8)      make any change that adversely affects the right to
         require the Company to purchase the Securities in accordance with the
         terms thereof and this Indenture;

                  (9)      impair the right to institute suit for the
         enforcement of any payment with respect to, or conversion of, the
         Securities; or

                  (10)     release any Guarantor from any of its obligations
         under its Guarantee other than in accordance with the terms of this
         Indenture.

                  It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof.

                  After an amendment under this Section 9.02 becomes effective,
the Company shall mail to each Holder a notice briefly describing the amendment.

                  SECTION 9.03 Compliance with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall comply with the
TIA.

                  SECTION 9.04 Revocation and Effect of Consents, Waivers and
Actions. Until an amendment, consent, waiver or other action by Holders becomes
effective, a consent thereto by a Holder of a Security hereunder is a continuing
consent by the Holder and every subsequent Holder of that Security or portion of
the Security that evidences the same obligation as the consenting Holder's
Security, even if notation of the amendment, consent, waiver or other action is
not made on the Security. However, any such Holder or subsequent Holder may
revoke the consent as to such Holder's Security or portion of the Security if
the Trustee receives the notice of revocation before the date as of which the
amendment, consent, waiver or action is made effective. After an amendment,
consent, waiver or action becomes effective, it shall bind every Securityholder.

                  SECTION 9.05 Notation on or Exchange of Securities. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Board of Directors, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for outstanding
Securities.

                  SECTION 9.06 Trustee to Sign Supplemental Indentures. The
Trustee shall sign any supplemental indenture authorized pursuant to this
Article 9 if the amendment contained therein does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign such supplemental indenture. In signing such
supplemental indenture the Trustee shall receive, and (subject to the provisions
of Section 7.01) shall be fully protected in relying upon, in addition to the
documents required by Section 14.04,

<PAGE>

                                      -57-

an Officers' Certificate and an Opinion of Counsel stating that such amendment
is authorized or permitted by this Indenture.

                  SECTION 9.07 Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.

                                   ARTICLE 10

                          SPECIAL TAX EVENT CONVERSION

                  SECTION 10.01 Optional Conversion to Semiannual Coupon Note
upon Tax Event. From and after (i) the date (the "Tax Event Date") of the
occurrence of a Tax Event and (ii) the date the Company exercises the option
provided for in this Section 10.01, whichever is later (the "Option Exercise
Date"), at the option of the Company, interest in lieu of future Original Issue
Discount or cash interest shall accrue at the rate of 3.625% per annum,
calculated on a semiannual bond equivalent basis, on a Restated Principal Amount
per $1,000 original Principal Amount at Maturity (the "Restated Principal
Amount") equal to the Issue Price plus Original Issue Discount accrued through
the Option Exercise Date and shall be payable semiannually on February 10 and
August 10 of each year (each an "Interest Payment Date") to Holders of record at
the close of business on February 1 or August 1 (each a "Regular Record Date")
immediately preceding such Interest Payment Date. Interest will be computed on
the basis of a 360-day year comprised of twelve 30-day months and will accrue
from the most recent date on which interest has been paid or, if no interest has
been paid, from the Option Exercise Date. Within 15 days of the occurrence of a
Tax Event, the Company shall deliver a written notice of such Tax Event by
facsimile and first-class mail to the Trustee and within 15 days of its exercise
of such option the Company shall deliver a written notice of the Option Exercise
Date by facsimile and first-class mail to the Trustee and by first class mail to
the Holders of the Securities. From and after the Option Exercise Date, (i) the
Company shall be obligated to pay at Stated Maturity, in lieu of the Principal
Amount at Maturity of a Security, the Restated Principal Amount thereof plus
accrued and unpaid interest with respect to any Security and (ii) "Issue Price
and accrued Original Issue Discount," "Issue Price plus Original Issue Discount"
or similar words, as used herein, shall mean Restated Principal Amount plus
accrued and unpaid interest with respect to any Security. Securities
authenticated and delivered after the Option Exercise Date may, and shall if
required by the Trustee, bear a notation in a form approved by the Trustee as to
the conversion of the Securities to semiannual coupon notes. No other changes to
the Indenture shall result as a result of the events described in this Section
10.01.

<PAGE>

                                      -58-

                                   ARTICLE 11

                                   CONVERSION

                  SECTION 11.01 Conversion Privilege. A Holder of a Security may
convert such Security into Common Stock at any time during the periods and
subject to the conditions stated in paragraph 8 of the Securities, subject to
the provisions of this Article 11. The number of shares of Common Stock issuable
upon conversion of a Security per $1,000 of Principal Amount at Maturity thereof
(the "Conversion Rate") shall be determined in accordance with the provisions of
paragraph 8 of the Securities.

                  A Holder may convert a portion of the Principal Amount at
Maturity of a Security if the portion is $1,000 or an integral multiple of
$1,000. Provisions of this Indenture that apply to conversion of all of a
Security also apply to conversion of a portion of a Security.

                  SECTION 11.02 Conversion Procedure. To convert a Security, a
Holder must satisfy the requirements in paragraph 8 of the Securities. The date
on which the Holder satisfies all those requirements is the conversion date (the
"Conversion Date"). As soon as practicable after the Conversion Date but in any
event no later than the seventh Business Day following the Conversion Date, the
Company shall deliver to the Holder, through the Conversion Agent, a certificate
for the number of full shares of Common Stock issuable upon the conversion and
cash in lieu of any fractional share determined pursuant to Section 11.03. The
Company shall determine such full number of shares and the amounts of the
required cash with respect to any fractional share, and shall set forth such
information in an Officers' Certificate delivered to the Conversion Agent. The
Conversion Agent shall have no duties under this paragraph unless and until it
has received such certificate.

                  The person in whose name the certificate is registered shall
be treated as a stockholder of record on and after the Conversion Date;
provided, however, that no surrender of a Security on any date when the stock
transfer books of the Company shall be closed shall be effective to constitute
the Person or Persons entitled to receive the shares of Common Stock upon such
conversion as the record holder or holders of such shares of Common Stock on
such date, but such surrender shall be effective to constitute the Person or
Persons entitled to receive such shares of Common Stock as the record holder or
holders thereof for all purposes at the close of business on the next succeeding
day on which such stock transfer books are open; such conversion shall be at the
Conversion Rate in effect on the date that such Security shall have been
surrendered for conversion, as if the stock transfer books of the Company had
not been closed. Upon conversion of a Security, such Person shall no longer be a
Holder of such Security.

                  Holders may surrender a Security for conversion by means of a
book-entry delivery in accordance with paragraph 8 of the Security and the
regulations of the applicable book-entry facility.

<PAGE>
                                      -59-

                  No payment or adjustment will be made for dividends on, or
other distributions with respect to, any Common Stock except as provided in this
Article 11. On conversion of a Security, that portion of accrued Original Issue
Discount or cash interest attributable to the period from the Issue Date of the
Security through the Conversion Date with respect to the converted Security
shall not be cancelled, extinguished or forfeited, but rather shall be deemed to
be paid in full to the Holder thereof through delivery of the Common Stock
(together with the cash payment, if any, in lieu of fractional shares) in
exchange for the Security being converted pursuant to the provisions hereof; and
the fair market value of such shares of Common Stock (together with any such
cash payment in lieu of fractional shares) shall be treated as issued, to the
extent thereof, first in exchange for the greater of Original Issue Discount or
cash interest through the Conversion Date, and the balance, if any, of such fair
market value of such Common Stock (and any such cash payment) shall be treated
as issued in exchange for the Issue Price of the Security being converted
pursuant to the provisions hereof. Notwithstanding the foregoing, accrued cash
interest will be payable upon conversion of Securities made concurrently with or
after acceleration of Securities following an Event of Default.

                  If the Holder converts more than one Security at the same
time, the number of shares of Common Stock issuable upon the conversion shall be
based on the total Principal Amount at Maturity of the Securities converted.

                  A Security surrendered for conversion based on (a) the Common
Stock price may be surrendered for conversion until the close of business on
February 10, 2024, (b) the Security being called for redemption may be
surrendered for conversion at any time prior to the close of business on the
second Business Day immediately preceding the Redemption Date, even if it is not
otherwise convertible at such time, and (c) upon the occurrence of certain
corporate transactions more fully described in paragraph 8 of the Security may
be surrendered for conversion at any time from and after the date which is 15
days prior to the anticipated effective date of such transaction until 15 days
after the actual date of such transaction, and if such day is not a Business
Day, the next occurring Business Day following such day.

                  Upon surrender of a Security that is converted in part, the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder, a new Security in an authorized denomination equal in Principal Amount
at Maturity to the unconverted portion of the Security surrendered.

                  SECTION 11.03 Fractional Shares. The Company will not issue a
fractional share of Common Stock upon conversion of a Security. Instead, the
Company will deliver cash for the current market value of the fractional share.
The current market value of a fractional share shall be determined, to the
nearest 1/1,000th of a share, by multiplying the per share Sale Price of the
Common Stock, on the last Trading Day prior to the Conversion Date, by the
fractional amount and rounding the product to the nearest whole cent.

                  SECTION 11.04 Taxes on Conversion. If a Holder converts a
Security, the Company shall pay any documentary, stamp or similar issue or

<PAGE>

                                      -60-

transfer tax due on the issue of shares of Common Stock upon the conversion.
However, the Holder shall pay any such tax which is due because the Holder
requests the shares to be issued in a name other than the Holder's name and any
income tax which is imposed on the Holder as a result of the conversion. The
Conversion Agent may refuse to deliver the certificates representing the Common
Stock being issued in a name other than the Holder's name until the Conversion
Agent receives a sum sufficient to pay any tax which will be due because the
shares are to be issued in a name other than the Holder's name. Nothing herein
shall preclude the Company from any tax withholding or directing the withholding
of any tax required by law or regulations.

                  SECTION 11.05 Company to Provide Stock. The Company shall,
prior to issuance of any Securities under this Article 11, and from time to time
as may be necessary, reserve out of its authorized but unissued Common Stock a
sufficient number of shares of Common Stock to permit the conversion of the
Securities.

                  All shares of Common Stock delivered upon conversion of the
Securities shall be newly issued shares or treasury shares, shall be duly and
validly issued and fully paid and nonassessable and shall be free from
preemptive rights and free of any lien or adverse claim created by the Company.

                  The Company will endeavor promptly to comply with all federal
and state securities laws regulating the offer and delivery of shares of Common
Stock upon conversion of Securities, if any, and will list or cause to have
quoted such shares of Common Stock on each national securities exchange or in
the over-the-counter market or such other market on which the Common Stock is
then principally listed or quoted.

                  SECTION 11.06 Adjustment for Change in Capital Stock. Except
as set forth in Section 11.14, if, after the Issue Date of the Securities, the
Company:

                  (a)      pays a dividend or makes a distribution on its Common
         Stock in shares of its Common Stock;

                  (b)      subdivides its outstanding shares of Common Stock
         into a greater number of shares;

                  (c)      pays a dividend or makes a distribution on its Common
         Stock in shares of its Capital Stock (other than Common Stock or
         rights, warrants or options for its Capital Stock);

                  (d)      combines its outstanding shares of Common Stock into
         a smaller number of shares; or

                  (e)      issues by reclassification of its Common Stock any
         shares of its Capital Stock (other than rights, warrants or options for
         its Capital Stock),

<PAGE>

                                      -61-

then the conversion privilege and the Conversion Rate in effect immediately
prior to such action shall be adjusted so that the Holder of a Security
thereafter converted may receive the number of shares or other units of Capital
Stock of the Company which such Holder would have owned immediately following
such action if such Holder had converted the Security immediately prior to such
action.

                  The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.

                  SECTION 11.07 Adjustment for Rights Issue. Except as set forth
in Sections 11.14 and 11.19, if after the Issue Date, the Company distributes
any rights, warrants or options to all holders of its Common Stock entitling
them, for a period expiring within 60 days after the record date for such
distribution, to purchase shares of Common Stock at a price per share less than
the Sale Price of the Common Stock as of the Time of Determination, the
Conversion Rate shall be adjusted in accordance with the formula:

                               R' =       R (O + N)
                                    ----------------------
                                    O + [(N x P)/M]

                  where:

                  R' = the adjusted Conversion Rate.

                  R = the current Conversion Rate.

                  O = the number of shares of Common Stock outstanding on the
record date for the distribution to which this Section 11.07 is being applied.

                  N = the number of additional shares of Common Stock offered
pursuant to the distribution.

                  P = the offering price per share of the additional shares.

                  M = the Average Sale Price, minus, in the case of (i) a
distribution to which Section 11.06(b) applies or (ii) a distribution to which
Section 11.08 applies, for which, in each case, (x) the record date shall occur
on or before the record date for the distribution to which this Section 11.07
applies and (y) the Ex-Dividend Time shall occur on or after the date of the
Time of Determination for the distribution to which this Section 11.07 applies,
the fair market value (on the record date for the distribution to which this
Section 11.07 applies) of:

                  (i)      the Capital Stock of the Company distributed in
         respect of each share of Common Stock in such Section 11.06(b)
         distribution and

<PAGE>

                                      -62-

                  (ii)     assets of the Company or debt securities or any
         rights, warrants or options to purchase securities of the Company
         distributed in respect of each share of Common Stock in such Section
         11.08 distribution.

                  The Board of Directors shall determine fair market values for
the purposes of this Section 11.07.

                  The adjustment shall become effective immediately after the
record date for the determination of shareholders entitled to receive the
rights, warrants or options to which this Section 11.07 applies. If all of the
shares of Common Stock subject to such rights, warrants or options have not been
issued when such rights, warrants or options expire, then the Conversion Rate
shall promptly be readjusted to the Conversion Rate which would then be in
effect had the adjustment upon the issuance of such rights, warrants or options
been made on the basis of the actual number of shares of Common Stock issued
upon the exercise of such rights, warrants or options.

                  No adjustment shall be made under this Section 11.07 if the
application of the formula stated above in this Section 11.07 would result in a
value of R' that is equal to or less than the value of R.

                  SECTION 11.08 Adjustment for Other Distributions. If, after
the Issue Date of the Securities, the Company distributes to all holders of its
Common Stock any of its assets or evidence of indebtedness or any rights,
warrants or options to purchase securities of the Company (including securities
or cash, but excluding (x) distributions of Capital Stock referred to in Section
11.06 and distributions of rights, warrants or options referred to in Section
11.07 and (y) cash dividends or other cash distributions that are paid out of
consolidated current net earnings or earnings retained in the business as shown
on the books of the Company unless such cash dividends or other cash
distributions are Extraordinary Cash Dividends) the Conversion Rate shall be
adjusted in accordance with the formula:

                           R'  =  R x M
                                  -----
                                  M - F

                  where:

                  R' = the adjusted Conversion Rate.

                  R = the current Conversion Rate.

                  M = the Average Sale Price, minus, in the case of a
distribution to which Section 11.06(c) applies, for which (i) the record date
shall occur on or before the record date for the distribution to which this
Section 11.08 applies and (ii) the Ex-Dividend Time shall occur on or after the
date of the Time of Determination for the distribution to which this Section
11.08 applies, the fair market value (on the record date for the distribution to
which this Section 11.08 applies)

<PAGE>
                                      -63-

of any Capital Stock of the Company distributed in respect of each share of
Common Stock in such Section 11.06(c) distribution.

                  F = the fair market value (on the record date for the
distribution to which this Section 11.08 applies) of the assets, securities,
rights, warrants or options to be distributed in respect of each share of Common
Stock in the distribution to which this Section 11.08 is being applied
(including, in the case of cash dividends or other cash distributions giving
rise to an adjustment, all such cash distributed concurrently).

                  The Board of Directors shall determine fair market values for
the purposes of this Section 11.08.

                  The adjustment shall become effective immediately after the
record date for the determination of shareholders entitled to receive the
distribution to which this Section 11.08 applies.

                  For purposes of this Section 11.08, the term "Extraordinary
Cash Dividend" shall mean any cash dividend with respect to the Common Stock the
amount of which, together with the aggregate amount of cash dividends on the
Common Stock to be aggregated with such cash dividend in accordance with the
provisions of this paragraph, equals or exceeds the threshold percentage set
forth in item (i) below. For purposes of item (i) below, the "Ex-Dividend
Measurement Period" with respect to a cash dividend on the Common Stock shall
mean the 365 consecutive day period ending on the date prior to the Ex-Dividend
Time with respect to such cash dividend, and the "Relevant Cash Dividends" with
respect to a cash dividend on the Common Stock shall mean the cash dividends on
the Common Stock with Ex-Dividend Times occurring in the Ex-Dividend Measurement
Period.

                  (i)      If, upon the date prior to the Ex-Dividend Time with
         respect to a cash dividend on the Common Stock, the aggregate amount of
         such cash dividend together with the amounts of all Relevant Cash
         Dividends equals or exceeds on a per share basis 5% of the Sale Price
         of the Common Stock on the last Trading Day preceding the date of
         declaration by the Board of Directors of the cash dividend or
         distribution with respect to which this provision is being applied,
         then such cash dividend together with all Relevant Cash Dividends,
         shall be deemed to be an Extraordinary Cash Dividend and for purposes
         of applying the formula set forth above in this Section 11.08, the
         value of "F" shall be equal to (y) the aggregate - amount of such cash
         dividend together with the amount of all Relevant Cash Dividends, minus
         (z) the aggregate amount of all Relevant Cash Dividends for which a
         prior adjustment in the Conversion Rate was previously made under this
         Section 11.08.

                  In making the determinations required by item (i) above, the
         amount of cash dividends paid on a per share basis and the amount of
         any Relevant Cash Dividends specified in item (i) above, shall be
         appropriately adjusted to reflect the occurrence during such period of
         any event described in Section 11.06.

<PAGE>

                                      -64-

                  SECTION 11.09 When Adjustment May Be Deferred. No adjustment
in the Conversion Rate need be made unless the adjustment would require an
increase or decrease of at least 1% in the Conversion Rate. Any adjustments that
are not made shall be carried forward and taken into account in any subsequent
adjustment and all adjustments that are made and carried forward shall be taken
in the aggregate in order to determine if the 1% threshold is met.

                  All calculations under this Article 11 shall be made to the
nearest cent or to the nearest 1/1,000th of a share, as the case may be.

                  SECTION 11.10 When No Adjustment Required. No adjustment need
be made for a transaction referred to in Section 11.06, 11.07, 11.08 or 11.14 if
Securityholders are to participate in the transaction on a basis and with notice
that the Board of Directors determines to be fair and appropriate in light of
the basis and notice on which holders of Common Stock participate in the
transaction. Such participation by Securityholders may include participation
upon conversion provided that an adjustment shall be made at such time as the
Securityholders are no longer entitled to participate.

                  No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.

                  No adjustment need be made for a change in the par value or no
par value of the Common Stock.

                  To the extent the Securities become convertible pursuant to
this Article 11 into cash, no adjustment need be made thereafter as to the cash.
Interest will not accrue on the cash.

                  No adjustment will be made pursuant to this Article 11 that
would result, through the application of two or more provisions hereof, in the
duplication of any adjustment.

                  SECTION 11.11 Notice of Adjustment. Whenever the Conversion
Rate is adjusted, the Company shall promptly mail to Securityholders a notice of
the adjustment. The Company shall file with the Trustee and the Conversion Agent
such notice and a certificate from the Company's independent public accountants
briefly stating the facts requiring the adjustment and the manner of computing
it. Upon receipt by it of such notice, and at the written request of the
Company, the Conversion Agent will promptly mail such notice to Securityholders
at the Company's expense. The certificate shall be conclusive evidence that the
adjustment is correct. Neither the Trustee nor any Conversion Agent shall be
under any duty or responsibility with respect to any such certificate except to
exhibit the same to any Holder desiring inspection thereof.

                  SECTION 11.12 Voluntary Increase. The Company from time to
time may increase the Conversion Rate by any amount for any period of time.
Whenever the Conversion Rate is increased, the Company shall mail to
Securityholders and file with the Trustee and the Conversion Agent a notice of
the increase. The Company shall mail the notice at least 15 days

<PAGE>

                                      -65-

before the date the increased Conversion Rate takes effect. The notice shall
state the increased Conversion Rate and the period it will be in effect.

                  A voluntary increase of the Conversion Rate does not change or
adjust the Conversion Rate otherwise in effect for purposes of Section 11.06,
11.07 or 11.08.

                  SECTION 11.13 Notice of Certain Transactions. If:

                  (a)      the Company takes any action that would require an
         adjustment in the Conversion Rate pursuant to Section 11.06, 11.07 or
         11.08 (unless no adjustment is to occur pursuant to Section 11.10); or

                  (b)      the Company takes any action that would require a
         supplemental indenture pursuant to Section 11.14; or

                  (c)      there is a liquidation or dissolution of the Company;

then the Company shall mail to Securityholders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend or
distribution or the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, binding share exchange, transfer,
liquidation or dissolution. The Company shall file and mail the notice at least
15 days before such date. Failure to file or mail the notice or any defect in it
shall not affect the validity of the transaction.

                  SECTION 11.14 Reorganization of Company; Special
Distributions. If the Company is a party to a transaction subject to Article 5
(other than a sale of all or substantially all of the assets of the Company in a
transaction in which the holders of Common Stock immediately prior to such
transaction do not receive securities, cash, property or other assets of the
Company or any other Person) or a merger or binding share exchange which
reclassifies or changes its outstanding Common Stock, the Person obligated to
deliver securities, cash or other assets upon conversion of Securities shall
enter into a supplemental indenture. If the issuer of securities deliverable
upon conversion of Securities is an Affiliate of the successor Company, that
issuer shall join in the supplemental indenture.

                  The supplemental indenture shall provide that the Holder of a
Security may convert it into the kind and amount of securities, cash or other
assets which such Holder would have received immediately after the
consolidation, merger, binding share exchange or transfer if such Holder had
converted the Security immediately before the effective date of the transaction,
assuming (to the extent applicable) that such Holder (i) was not a constituent
Person or an Affiliate of a constituent Person to such transaction; (ii) made no
election with respect thereto; and (iii) was treated alike with the plurality of
non-electing Holders. The supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practical to the adjustments
provided for in this Article 11. The successor Company shall mail to
Securityholders a notice briefly describing the supplemental indenture.

<PAGE>

                                      -66-

                  If this Section applies, neither Section 11.06 nor 11.07
applies.

                  If the Company makes a distribution to all holders of its
Common Stock of any of its assets, or debt securities or any rights, warrants or
options to purchase securities of the Company that would otherwise result in an
adjustment in the Conversion Rate pursuant to the provisions of Section 11.08,
then, from and after the record date for determining the holders of Common Stock
entitled to receive the distribution, a Holder of a Security that converts such
Security in accordance with the provisions of this Indenture shall upon such
conversion be entitled to receive, in addition to the shares of Common Stock
into which the Security is convertible, the kind and amount of securities, cash
or other assets comprising the distribution that such Holder would have received
if such Holder had converted the Security immediately prior to the record date
for determining the holders of Common Stock entitled to receive the
distribution.

                  SECTION 11.15 Company Determination Final. Any determination
that the Company or the Board of Directors must make pursuant to Section 11.03,
11.06, 11.07, 11.08, 11.09, 11.10, 11.14 or 11.17 is conclusive.

                  SECTION 11.16 Trustee's Adjustment Disclaimer. The Trustee has
no duty to determine when an adjustment under this Article 11 should be made,
how it should be made or what it should be. The Trustee has no duty to determine
whether a supplemental indenture under Section 11.14 need be entered into or
whether any provisions of any supplemental indenture are correct. The Trustee
shall not be accountable for and makes no representation as to the validity or
value of any securities or assets issued upon conversion of Securities. The
Trustee shall not be responsible for the Company's failure to comply with this
Article 11. Each Conversion Agent (other than the Company or an Affiliate of the
Company) shall have the same protection under this Section 11.16 as the Trustee.

                  SECTION 11.17 Simultaneous Adjustments. In the event that this
Article 11 requires adjustments to the Conversion Rate under more than one of
Sections 11.06, 11.07 or 11.08, and the record dates for the distributions
giving rise to such adjustments shall occur on the same date, then such
adjustments shall be made by applying, first, the provisions of Section 11.06,
second, the provisions of Section 11.08 and, third, the provisions of Section
11.07.

                  SECTION 11.18 Successive Adjustments. After an adjustment to
the Conversion Rate under this Article 11, any subsequent event requiring an
adjustment under this Article 11 shall cause an adjustment to the Conversion
Rate as so adjusted.

                  SECTION 11.19 Rights Issued in Respect of Common Stock Issued
upon Conversion. Each share of Common Stock issued upon conversion of Securities
pursuant to this Article 11 shall be entitled to receive the appropriate number
of common stock or preferred stock purchase rights, as the case may be (the
"Rights"), if any, that all shares of Common Stock are entitled to receive and
the certificates representing the Common Stock issued upon such conversion shall
bear such legends, if any, in each case as may be provided by the terms of any
shareholder rights agreement adopted by the Company, as the same may be amended
from time to

<PAGE>

                                      -67-

time (in each case, a "Rights Agreement"). Provided that such Rights Agreement
requires that each share of Common Stock issued by the Company (including those
that might be issued upon conversion of Securities) at any time prior to the
distribution of separate certificates representing the Rights be entitled to
receive such Rights, then, notwithstanding anything else to the contrary in this
Article 11, there shall not be any adjustment to the conversion privilege or
Conversion Rate or any other term or provision of the Securities as a result of
the issuance of Rights, the distribution of separate certificates representing
the Rights, the exercise or redemption of such Rights in accordance with any
such Rights Agreement, or the termination or invalidation of such Rights.

                  SECTION 11.20 Company's Right to Elect to Pay Cash or Common
Stock. In lieu of delivery of Common Stock upon notice of conversion of any
Securities (for all or any portion of the Securities), the Company may elect to
pay Holders surrendering Securities an amount in cash per Security (or a portion
of a Security) equal to the Average Sale Price of Common Stock for the five
consecutive trading days immediately following either (a) the date of notice of
election to deliver cash as described below if the Company has not given notice
of redemption, or (b) the conversion date, in the case of conversion following
the notice of redemption specifying that the Company intends to deliver cash
upon conversion, in either case multiplied by the Conversion Rate in effect on
that date. The Company will inform the Holders through the Trustee no later than
two business days following the conversion date of its election to deliver
shares of Common Stock or to pay cash in lieu of delivery of Common Stock,
unless the Company has already informed Holders of its election in connection
with its optional redemption of the Securities pursuant to Section 3.01 herein.
If the Company elects to deliver all of such payment in Common Stock, the Common
Stock will be delivered by the Company through the Conversion Agent no later
than the fifth business day following the Conversion Date. If the Company elects
to pay all or a portion of such payment in cash, the payment, including any
delivery of Common Stock, will be made to Holders surrendering Securities no
later than the tenth business day following the applicable conversion date. If
an Event of Default (other than a default in a cash payment upon conversion of
the Securities) has occurred and is continuing, the Company may not pay cash
upon conversion of any Security or portion of a Security (other than cash for
fractional shares).

                                   ARTICLE 12

                               PAYMENT OF INTEREST

                  SECTION 12.01 Interest Payments. Interest on any Security that
is payable in cash, and is punctually paid or duly provided for, on any
applicable payment date shall be paid to the person in whose name that Security
is registered at the close of business on the Regular Record Date or accrual
date, as the case may be, for such interest at the office or agency of the
Company maintained for such purpose. Each installment of interest on any
Security shall be paid in same-day funds by transfer to an account maintained by
the payee located inside the United States, if the payee is the Holder of not
less than $1,000,000 aggregate principal amount

<PAGE>

                                      -68-

at maturity of the Securities and the Trustee shall have received proper wire
transfer instructions from such payee not later than the related Regular Record
Date or accrual date, as the case may be, or, if no such instructions have been
received, by check mailed to the payee at its address set forth on the
Registrar's books. In the case of a permanent Global Security, interest payable
on any applicable payment date will be paid to the Depositary, with respect to
that portion of such permanent Global Security held for its account by Cede &
Co. for the purpose of permitting such party to credit the interest received by
it in respect of such permanent Global Security to the accounts of the
beneficial owners thereof.

                  SECTION 12.02 Defaulted Interest. Except as otherwise
specified with respect to the Securities, any interest on any Security that is
payable, but is not punctually paid or duly provided for, within 30 days
following any applicable payment date (herein called "Defaulted Interest", which
term shall include any accrued and unpaid interest that has accrued on such
defaulted amount in accordance with paragraph 1 of the Securities), shall
forthwith cease to be payable to the registered Holder thereof on the relevant
Regular Record Date or accrual date, as the case may be, by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:

                  (1)      The Company may elect to make payment of any
         Defaulted Interest to the persons in whose names the Securities are
         registered at the close of business on a special record date for the
         payment of such Defaulted Interest, which shall be fixed in the
         following manner. The Company shall notify the Trustee in writing of
         the amount of Defaulted Interest proposed to be paid on each Security
         and the date of the proposed payment (which shall not be less than 25
         days after such notice is received by the Trustee), and at the same
         time the Company shall deposit with the Trustee an amount of money
         equal to the aggregate amount proposed to be paid in respect of such
         Defaulted Interest or shall make arrangements satisfactory to the
         Trustee for such deposit on or prior to the date of the proposed
         payment, such money when deposited to be held in trust for the benefit
         of the persons entitled to such Defaulted Interest as in this clause
         provided. Thereupon the Trustee shall fix a special record date (the
         "Special Record Date") for the payment of such Defaulted Interest which
         shall be not more than 15 days and not less than 10 days prior to the
         date of the proposed payment and not less than 10 days after the
         receipt by the Trustee of the notice of the proposed payment. The
         Trustee shall promptly notify the Company of such Special Record Date
         and, in the name and at the expense of the Company, shall cause notice
         of the proposed payment of such Defaulted Interest and the Special
         Record Date therefor to be mailed, first-class postage prepaid, to each
         Holder of Securities at his address as it appears on the list of
         Securityholders maintained pursuant to Section 2.05 not less than 10
         days prior to such Special Record Date. Notice of the proposed payment
         of such Defaulted Interest and the Special Record Date therefor having
         been mailed as aforesaid, such Defaulted Interest shall be paid to the
         persons in whose names the Securities are registered at the close of
         business on such Special Record Date and shall no longer be payable
         pursuant to the following clause (2).

<PAGE>

                                      -69-

                  (2)      The Company may make payment of any Defaulted
         Interest on the Securities in any other lawful manner not inconsistent
         with the requirements of any securities exchange on which such
         Securities may be listed, and upon such notice as may be required by
         such exchange, if, after notice given by the Company to the Trustee of
         the proposed payment pursuant to this clause, such manner of payment
         shall be deemed practicable by the Trustee.

                  SECTION 12.03 Interest Rights Preserved. Subject to the
foregoing provisions of this Article 12 and Section 2.06, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to semiannual and
contingent interest accrued and unpaid, and to accrue, which were carried by
such other Security.

                                   ARTICLE 13

                                   GUARANTEES

                  SECTION 13.01 Guarantees. The Guarantors jointly and
severally, hereby absolutely, unconditionally and irrevocably guarantee the
Securities and obligations of the Company hereunder and thereunder, and
guarantee to each Holder of a Security authenticated and delivered by the
Trustee in accordance with the terms hereof, and to the Trustee on behalf of
such Holder, that: (a) the principal of and cash interest on the Securities will
be paid in full when due, whether at Stated Maturity, by acceleration,
redemption or otherwise (including, without limitation, the amount that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Law), together with cash interest and interest on any overdue
interest, to the extent lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Securities or of any such
other obligations, the same shall be paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration redemption or otherwise.

                  The Guarantors hereby agree that their obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder with respect to any
provisions hereof or thereof, the recovery of any judgment against the Company,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a Guarantor.

                  The Guarantors hereby waive (to the extent permitted by law)
the benefits of diligence, presentment, demand for payment, filing of claims
with a court in the event of insolvency or bankruptcy of the Company, any right
to require a proceeding first against the Company or any other Person, protest,
notice and all demands whatsoever and covenants that the Guarantee of such
Guarantor shall not be discharged as to any Security except by complete
performance of

<PAGE>

                                      -70-

the obligations contained in such Security, this Indenture and such Guarantee.
The Guarantors acknowledge that the Guarantees are a guarantee of payment and
not of collection.

                  The Guarantors hereby agree that, in the event of a default in
payment of principal or cash interest on such Security, whether at its Stated
Maturity, by acceleration, redemption, purchase or otherwise, legal proceedings
may be instituted by the Trustee on behalf of, or by, the Holder of such
Security, subject to the terms and conditions set forth in this Indenture,
directly against each of the Guarantors to enforce such Guarantor's Guarantee
without first proceeding against the Company or any other Guarantor. The
Guarantor agrees that if, after the occurrence and during the continuance of an
Event of Default, the Trustee or any of the Holders are prevented by applicable
law from exercising their respective rights to accelerate the maturity of the
Securities, to collect interest on the Securities, or to enforce or exercise any
other right or remedy with respect to the Securities, such Guarantor shall pay
to the Trustee for the account of the Holder, upon demand therefor, the amount
that would otherwise have been due and payable had such rights and remedies been
permitted to be exercised by the Trustee or any of the Holders.

                  If any Holder or the Trustee is required by any court or
otherwise to return to the Company or any Guarantor, or any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or
any Guarantor, any amount paid by any of them to the Trustee or such Holder, the
Guarantee of each of the Guarantors, to the extent theretofore discharged, shall
be reinstated in full force and effect. The Guarantor further agrees that as
between each Guarantor, on the one hand, and the Holders and the Trustee, on the
other hand, (x) subject to this Article Thirteen, the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Six
hereof for the purposes of the Guarantee of such Guarantor notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (y) in the event of any acceleration of
such obligation as provided in Article Six hereof, such obligations (whether or
not due and payable) shall forthwith become due and payable by each Guarantor
for the purpose of the Guarantee of such Guarantor.

                  Each Guarantee shall remain in full force and effect and
continue to be effective should any petition be filed by or against the Company
for liquidation, reorganization, should the Company become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Securities
are, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee on the Securities, whether as a
"voidable preference," "fraudulent transfer" or otherwise, all as though such
payment or performance had not been made. In the event that any payment or any
part thereof, is rescinded, reduced, restored or returned, for the purposes of
the amounts due under the Guarantees, the Securities shall, to the fullest
extent permitted by law, be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned. The form of Guarantee
is attached hereto as Exhibit A-2.

<PAGE>
                                      -71-

                  SECTION 13.02 Severability. In case any provision of any
Guarantee shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

                  SECTION 13.03 Future Subsidiaries. If (a) the Company or any
of its Subsidiaries acquires or forms a wholly-owned Subsidiary organized under
the laws of the United States or any state or political subdivision thereof or
the District of Columbia or (b) the Company or any of its Subsidiaries acquires
or forms any Subsidiary (domestic or foreign) and such Subsidiary guarantees any
indebtedness or other obligations of the Company other than the Guarantees of
the Securities, the Company will cause any such Subsidiary to (i) execute and
deliver to the Trustee any amendment or supplement to this Indenture in
accordance with the provisions of Article Nine of this Indenture pursuant to
which such Subsidiary shall guarantee all of the obligations on the Securities
(whether for principal, cash interest, and interest accruing after the filing
of, or which would have accrued but for the filing of, a petition by or against
the Company under Bankruptcy Law, whether or not such interest is allowed as a
claim after such filing in any proceeding under such law), if any, and other
amounts due in connection therewith (including any fees, expenses and
indemnities), on a senior unsecured basis and (ii) deliver to such Trustee an
Opinion of Counsel reasonably satisfactory to such Trustee to the effect that
such amendment or supplement has been duly executed and delivered by such
Subsidiary and is in compliance with the terms of this Indenture. Upon the
execution of any such amendment or supplement, the obligations of the Guarantors
and any such Subsidiary under their respective Guarantees shall become joint and
several and each reference to the "Guarantor" in this Indenture shall, be deemed
to refer to all Guarantors, including such Subsidiary.

                  SECTION 13.04 Priority of Guarantees. The Guarantee issued by
any Guarantor shall be unsecured senior obligations of such Guarantor, ranking
pari passu with all other existing and future senior unsecured indebtedness of
such Guarantor, if any.

                  SECTION 13.05 Limitation of Guarantors' Liability. Each
Guarantor and by its acceptance hereof each Holder confirms that it is the
intention of all such parties that the guarantee by the Guarantor pursuant to
its Guarantee not constitute a fraudulent transfer or conveyance for purposes of
the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal or state law or the provisions of
its local law relating to fraudulent transfer or conveyance. To effectuate the
foregoing intention, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor under its Guarantee shall be limited to
the maximum amount that will not, after giving effect to all other contingent
and fixed liabilities of such Guarantor result in the obligations of such
Guarantor under its Guarantee constituting such fraudulent transfer or
conveyance.

                  SECTION 13.06 Subrogation. Each Guarantor shall be subrogated
to all rights of Holders against the Company in respect of any amounts paid by
any Guarantor pursuant to the provisions of Section 13.01; provided, however,
that, if an Event of Default has occurred and is continuing, no Guarantor shall
be entitled to enforce or receive any payments arising out of, or

<PAGE>

                                      -72-

based upon, such right of subrogation until all amounts then due and payable by
the Company under this Indenture or the Securities shall have been paid in full.

                  SECTION 13.07 Reinstatement. The Guarantor hereby agrees (and
each Person who becomes a Guarantor shall agree) that the Guarantee provided for
in Section 13.01 shall continue to be effective or be reinstated, as the case
may be, (a) if at any time, payment, or any part thereof, of any obligations or
interest thereon is rescinded or must otherwise be restored by a Holder to the
Company upon the bankruptcy or insolvency of the Company or any Guarantor and
(b) at any time any Guarantor (and each Person who becomes a Guarantor)
guarantees any indebtedness or obligations of the Company.

                  SECTION 13.08 Release of the Guarantor. Concurrently with the
discharge of the Securities under Section 8.01, each Guarantor shall be released
from all its obligations under its Guarantee under this Article Thirteen.

                  So long as no Default exists or with notice or lapse of time
or both, would exist, the Guarantee issued by any Guarantor shall be
automatically and unconditionally released and discharged upon (a) any sale,
exchange or transfer to any Person that is not an Affiliate of the Company of
all of the Capital Stock of such Guarantor owned by the Company, which
transaction is otherwise in compliance with the Indenture or (b) any release or
discharge of all guarantees by such Guarantor of any indebtedness or obligations
of the Company other than the Guarantees of the Securities.

                  SECTION 13.09 Benefits Acknowledged. Each Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by this Indenture and that its guarantee and
waivers pursuant to its Guarantee are knowingly made in contemplation of such
benefits.

                                   ARTICLE 14

                                  MISCELLANEOUS

                  SECTION 14.01 Trust Indenture Act Controls. If any provision
of this Indenture limits, qualifies, or conflicts with another provision which
is required to be included in this Indenture by the TIA, the required provision
shall control.

                  SECTION 14.02 Notices. Any request, demand, authorization,
notice, waiver, consent or communication shall be in writing and delivered in
person or delivery by courier guaranteeing overnight delivery or mailed by
first-class mail, postage prepaid, addressed as follows or transmitted by
facsimile transmission (confirmed by guaranteed overnight courier) to the
following facsimile numbers:

<PAGE>

                                      -73-

                  if to the Company:

                           Mesa Air Group, Inc.
                           410 North 44th Street
                           Suite 700
                           Phoenix, AZ   85008
                           Attention: General Counsel
                           Facsimile: (602) 685-4352

                  with a copy of any notice given pursuant to Article 6 to:

                           Squire, Sanders & Dempsey L.L.P.
                           Two Renaissance Square
                           Suite 2700
                           40 North Central Avenue
                           Phoenix, AZ 85004
                           Attention: Gregory R. Hall, Esq.
                           Telephone: (602) 528-4000
                           Facsimile: (602) 253-8129

                  if to the Trustee:

                           U.S. Bank National Association
                           One Federal Street
                           Boston, MA 02110
                           Attention: Corporate Trust Services
                           Telephone: (617) 603-6561
                           Facsimile: (617) 603-6665

                  The Company or the Trustee by notice given to the other in the
manner provided above may designate additional or different addresses for
subsequent notices or communications.

                  Any notice or communication given to a Securityholder shall be
mailed to the Securityholder, by first-class mail, postage prepaid, at the
Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.

                  Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not received by the addressee.

<PAGE>

                                      -74-

                  If the Company mails a notice or communication to the
Securityholders, it shall mail a copy to the Trustee and each Registrar, Paying
Agent, Conversion Agent or co-registrar.

                  SECTION 14.03 Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and anyone else shall have the protection of TIA Section
312(c).

                  SECTION 14.04 Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee if
reasonably requested:

                  (1)      an Officers' Certificate stating that, in the opinion
         of the signers, all conditions precedent, if any, provided for in this
         Indenture relating to the proposed action have been complied with; and

                  (2)      an Opinion of Counsel stating that, in the opinion of
         such counsel, all such conditions precedent have been complied with.

                  SECTION 14.05 Statements Required in Certificate or Opinion.
Each Officers' Certificate or Opinion of Counsel with respect to compliance with
a covenant or condition provided for in this Indenture shall include to the
extent required by the Trustee:

                  (1)      a statement that each person making such Officers'
         Certificate or Opinion of Counsel has read such covenant or condition;

                  (2)      a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such Officers' Certificate or Opinion of Counsel are
         based;

                  (3)      a statement that, in the opinion of each such person,
         he has made such examination or investigation as is necessary to enable
         such person to express an informed opinion as to whether or not such
         covenant or condition has been complied with; and

                  (4)      a statement that, in the opinion of such person, such
         covenant or condition has been complied with.

                  SECTION 14.06 Separability Clause. In case any provision in
this Indenture or in the Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

                  SECTION 14.07 Rules by Trustee, Paying Agent, Conversion Agent
and Registrar. The Trustee may make reasonable rules for action by or a meeting
of Securityholders. The

<PAGE>
                                      -75-

Registrar, Conversion Agent and the Paying Agent may make reasonable rules for
their functions.

                  SECTION 14.08 Calculations. The calculation of the Purchase
Price, Change in Control Purchase Price, Conversion Rate, Market Price, Sale
Price of the Common Stock and each other calculation to be made hereunder shall
be the obligation of the Company. All calculations made by the Company as
contemplated pursuant to this Section 14.08 shall be final and binding on the
Company and the Holders absent manifest error. The Trustee, Paying Agent and
Conversion Agent shall not be obligated to recalculate, recompute or confirm any
such calculations.

                  SECTION 14.09 Legal Holidays. A "Legal Holiday" is any day
other than a Business Day. If any specified date (including a date for giving
notice) is a Legal Holiday, the action shall be taken on the next succeeding day
that is not a Legal Holiday, and, if the action to be taken on such date is a
payment in respect of the Securities, no Original Issue Discount or interest, if
any, shall accrue for the intervening period.

                  SECTION 14.10 Governing Law. THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW, SHALL
GOVERN THIS INDENTURE AND THE SECURITIES.

                  SECTION 14.11 No Recourse Against Others. A director, officer,
employee, agent, representative, stockholder or equity holder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.

                  SECTION 14.12 Successors. All agreements of the Company in
this Indenture and the Securities shall bind its successor. All agreements of
the Trustee in this Indenture shall bind its successor.

                  SECTION 14.13 Multiple Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One originally signed copy is
enough to prove this Indenture.

<PAGE>

                  IN WITNESS WHEREOF, the undersigned, being duly authorized,
have executed this Indenture on behalf of the respective parties hereto as of
the date first above written.

                                       MESA AIR GROUP, INC.

                                       By: _____________________________________
                                           Name:
                                           Title:

                                       MESA AIRLINES, INC.
                                       FREEDOM AIRLINES, INC.
                                       AIR MIDWEST, INC.
                                       MPD, INC.

                                       By: _____________________________________
                                           Name:
                                           Title:

                                       REGIONAL AIRCRAFT SERVICES, INC.
                                       MESA AIR GROUP-AIRCRAFT INVENTORY
                                        MANAGEMENT, LLC
                                       RITZ HOTEL MANAGEMENT CORP.

                                       By: _____________________________________
                                           Name:
                                           Title:

<PAGE>
                                       U.S. BANK NATIONAL ASSOCIATION

                                       By: _____________________________________
                                           Name:
                                          Title:

<PAGE>

                                   EXHIBIT A-1

                        [FORM OF FACE OF GLOBAL SECURITY]

                  THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT, FOR
PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE
CODE OF 1986, AS AMENDED. THE ISSUE PRICE OF THIS NOTE WAS $583.40 PER $1,000 OF
PRINCIPAL AMOUNT AT MATURITY; THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, INCLUDING
CASH INTEREST PAYABLE THROUGH February 10, 2009 TAXABLE AS ORIGINAL ISSUE
DISCOUNT UNDER TREASURY REGULATION SECTION 1.1273-1, IS $522.34 PER $1,000 OF
PRINCIPAL AMOUNT AT MATURITY; THE ISSUE DATE IS FEBRUARY 10, 2004; AND THE YIELD
TO MATURITY FOR THE PURPOSES OF ACCRUING TAX ORIGINAL ISSUE DISCOUNT IS 3.625%
PER ANNUM, CALCULATED ON A SEMIANNUAL BOND EQUIVALENT BASIS.

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                  TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST
COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF.

                  THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.

                                     A-1-1

<PAGE>

                  THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES
TO OFFER, SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE"), WHICH IS TWO YEARS AFTER THE LATER OF
THE LAST DAY SECURITIES OF THIS ISSUE WERE ISSUED AND THE LAST DATE ON WHICH
MESA AIR GROUP, INC. (THE "COMPANY" OR THE "ISSUER") OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY)
ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2),(3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (D) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (E)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF ANY HOLDER THAT IS NOT AN AFFILIATE OF THE COMPANY
AFTER THE RESALE RESTRICTION TERMINATION DATE.

                  THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON
SATISFACTION OF THE CONDITIONS SPECIFIED IN THE INDENTURE.

                                     A-1-2

<PAGE>

                              MESA AIR GROUP, INC.
                        Senior Convertible Note due 2024

No. A-1                                       CUSIP:  590479 AC 5
Issue Date:  February 10, 2004                Original Issue Discount:  $522.34
Issue Price:  $583.40                         (for each $1,000 Principal
(for each $1,000 Principal                    Amount at Maturity)
Amount at Maturity)

                  MESA AIR GROUP, INC., a Nevada corporation, promises to pay to
Cede & Co. or registered assigns the Principal Amount at Maturity of ONE HUNDRED
SEVENTY ONE MILLION FOUR HUNDRED NINE THOUSAND DOLLARS ($171,409,000) on
February 10, 2024.

                  This Security shall not bear interest except as specified on
the other side of this Security. Original Issue Discount will accrue as
specified on the other side of this Security. This Security is convertible as
specified on the other side of this Security.

                  Additional provisions of this Security are set forth on the
other side of this Security.

Dated: February 10, 2004              MESA AIR GROUP, INC.

                                      By: ______________________________________
                                          Title:

TRUSTEE'S CERTIFICATE OF
AUTHENTICATION

U.S. BANK NATIONAL ASSOCIATION,
as Trustee, certifies that this is one of the
Securities referred to in the within-mentioned Indenture.

By:________________________
       Authorized Officer

Dated: ________________________

                                     A-1-3

<PAGE>

                         [FORM OF REVERSE SIDE OF NOTE]
                        Senior Convertible Note due 2024

1.       Interest.

                  The Company promises to pay interest in cash on the Principal
Amount at Maturity of this Note at the rate per annum of 2.115% from the Issue
Date, or from the most recent date to which interest has been paid or provided
for, until February 10, 2009. During such period, the Company will pay cash
interest semiannually in arrears on February 10 and August 10 of each year (each
an "Interest Payment Date") to Holders of record at the close of business on
each February 1 and August 1 (whether or not a business day) (each a "Regular
Record Date") immediately preceding such Interest Payment Date. Cash interest on
the Notes will accrue from the most recent date to which interest has been paid
or duly provided or, if no interest has been paid, from the Issue Date. Cash
interest will be computed on the basis of a 360-day year of twelve 30-day
months.

                  After February 10, 2009, this Security shall not bear
interest, except as specified in this paragraph or in paragraphs 5 and 11
hereof. If the Principal Amount at Maturity hereof or any portion of such
Principal Amount at Maturity is not paid when due (whether upon acceleration
pursuant to Section 6.02 of the Indenture, upon the date set for payment of the
Redemption Price pursuant to paragraph 5 hereof, upon the date set for payment
of the Purchase Price or Change in Control Purchase Price pursuant to paragraph
6 hereof or upon the Stated Maturity of this Security) or if interest (including
contingent interest, if any) due hereon or any portion of such interest is not
paid when due in accordance with paragraph 5 or 11 hereof, then in each such
case the overdue amount shall, to the extent permitted by law, bear interest at
the rate of 3.625% per annum, compounded semiannually, which interest shall
accrue from the date such overdue amount was originally due to the date payment
of such amount, including interest thereon, has been made or duly provided for.
All such interest shall be payable on demand. The accrual of such interest on
overdue amounts shall be in lieu of, and not in addition to, the continued
accrual of Original Issue Discount.

                  Original Issue Discount (the difference between the Issue
Price and the Principal Amount at Maturity of the Security), in the period
during which a Security remains outstanding, shall accrue at 3.625% per annum,
on a semiannual bond equivalent basis using a 360-day year composed of twelve
30-day months, from the Issue Date of this Security.

2.       Method of Payment.

                  Subject to the terms and conditions of the Indenture, the
Company will make payments in respect of Redemption Prices, Purchase Prices,
Change in Control Purchase Prices and at Stated Maturity to Holders who
surrender Securities to a Paying Agent to collect such payments in respect of
the Securities. The Company will pay any cash amounts in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may make such cash payments by check payable
in such money.

                                     A-1-4

<PAGE>

3.       Paying Agent, Conversion Agent, Registrar and Bid Solicitation Agent.

                  Initially, U.S. Bank National Association, a national banking
association (the "Trustee"), will act as Paying Agent, Conversion Agent,
Registrar and Bid Solicitation Agent. The Company may appoint and change any
Paying Agent, Conversion Agent, Registrar or co-registrar or Bid Solicitation
Agent without notice, other than notice to the Trustee except that the Company
will maintain at least one Paying Agent in the State of New York, City of New
York, Borough of Manhattan, which shall initially be an office or agency of the
Trustee. The Company or any of its Subsidiaries or any of their Affiliates may
act as Paying Agent, Conversion Agent, Registrar or co-registrar. None of the
Company, any of its Subsidiaries or any of their Affiliates shall act as Bid
Solicitation Agent.

4.       Indenture.

                  The Company issued and the Guarantors have guaranteed the
Securities pursuant to an Indenture dated as of February 10, 2004 (the
"Indenture"), among the Company, the Guarantors and the Trustee. The terms of
the Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as in effect from
time to time (the "TIA"). Capitalized terms used herein and not defined herein
have the meanings ascribed thereto in the Indenture. The Securities are subject
to all such terms, and Securityholders are referred to the Indenture and the TIA
for a statement of those terms.

                  The Securities and the Guarantees are general unsecured and
unsubordinated obligations, of the Company and the Guarantors, respectively,
limited to $214,261,000 aggregate Principal Amount at Maturity (subject to
Section 2.07 of the Indenture). The Indenture does not limit other indebtedness
of the Company, secured or unsecured.

5.       Redemption at the Option of the Company.

                  No sinking fund is provided for the Securities. The Securities
are redeemable as a whole, or from time to time in part, at any time at the
option of the Company in accordance with the Indenture at the Redemption Prices
set forth below, provided that the Securities are not redeemable prior to
February 10, 2009.

                  The table below shows Redemption Prices of a Security per
$1,000 Principal Amount at Maturity on the dates shown below and at Stated
Maturity, which prices reflect accrued Original Issue Discount calculated to
each such date. The Redemption Price of a Security redeemed between such dates
shall include an additional amount reflecting the additional Original Issue
Discount accrued since the preceding date in the table but not including the
Redemption Date.

                                     A-1-5

<PAGE>

<TABLE>
<CAPTION>
                                                                                   (2)
                                                            (1)              ACCRUED ORIGINAL            (3)
                                                           NOTE                   ISSUE            REDEMPTION PRICE
                                                        ISSUE PRICE              DISCOUNT             (1) + (2)
                                                        -----------              --------             ---------
              REDEMPTION DATE                                $                      $                     $
              ---------------
<S>                                                     <C>                  <C>                   <C>
February 10,
2009........................................             $583.40                  $  0.00            $   583.40
2010........................................              583.40                    21.34                604.74
2011........................................              583.40                    43.46                626.86
2012........................................              583.40                    66.39                649.79
2013........................................              583.40                    90.16                673.56
2014........................................              583.40                   114.80                698.20
2015........................................              583.40                   140.34                723.74
2016........................................              583.40                   166.81                750.21
2017........................................              583.40                   194.25                777.65
2018........................................              583.40                   222.70                806.10
2019........................................              583.40                   252.18                835.58
2020........................................              583.40                   282.75                866.15
2021........................................              583.40                   314.43                897.83
2022........................................              583.40                   347.27                930.67
2023........................................              583.40                   381.31                964.71
At stated maturity..........................              583.40                   416.60              1,000.00
</TABLE>

                  If this Security has been converted to a semiannual coupon
note following the occurrence of a Tax Event, the Redemption Price will be equal
to the Restated Principal Amount plus accrued and unpaid interest from the date
of such conversion to but not including the Redemption Date; but in no event
will this Security be redeemable before February 10, 2009.

6.       Purchase by the Company at the Option of the Holder.

                  Subject to the terms and conditions of the Indenture, the
Company shall become obligated to purchase, at the option of the Holder, the
Securities held by such Holder on the following Purchase Dates and at the
following Purchase Prices per $1,000 Principal Amount at Maturity, upon delivery
of a Purchase Notice containing the information set forth in the Indenture, at
any time from the opening of business on the date that is 20 Business Days prior
to such Purchase Date until the close of business on the Business Day
immediately preceding such Purchase Date and upon delivery of the Securities to
the Paying Agent by the Holder as set forth in the Indenture.

                                     A-1-6

<PAGE>

<TABLE>
<CAPTION>
  Purchase Date                          Purchase Price
  -------------                          --------------
<S>                                      <C>
February 10, 2009                           $583.40

February 10, 2014                           $698.20

February 10, 2019                           $835.58
</TABLE>

                  The Purchase Price (equal to the Issue Price plus accrued
Original Issue Discount to the Purchase Date) may be paid, at the option of the
Company, in cash or by the issuance and delivery of shares of Common Stock of
the Company, or in any combination thereof in accordance with the Indenture.

                  If prior to a Purchase Date this Security has been converted
to a semiannual coupon note following the occurrence of a Tax Event, the
Purchase Price will be equal to the Restated Principal Amount plus accrued and
unpaid interest from the date of conversion to the Purchase Date as provided in
the Indenture.

                  At the option of the Holder and subject to the terms and
conditions of the Indenture, the Company shall become obligated to purchase the
Securities held by such Holder no later than 30 Business Days after the
occurrence of a Change in Control of the Company for a Change in Control
Purchase Price equal to the Issue Price plus accrued Original Issue Discount to
but not including the Change in Control Purchase Date, which Change in Control
Purchase Price shall be paid in cash. If prior to a Change in Control Purchase
Date this Security has been converted to a semiannual coupon note following the
occurrence of a Tax Event, the Change in Control Purchase Price shall be equal
to the Restated Principal Amount plus accrued and unpaid interest from the date
of conversion to the Change in Control Purchase Date.

                  A third party may make the offer and purchase of the
Securities in lieu of the Company in accordance with the Indenture.

                  Holders have the right to withdraw any Purchase Notice or
Change in Control Purchase Notice, as the case may be, by delivering to the
Paying Agent a written notice of withdrawal in accordance with the provisions of
the Indenture.

                  If cash (and/or securities if permitted under the Indenture)
sufficient to pay the Purchase Price or Change in Control Purchase Price, as the
case may be, of all Securities or portions thereof to be purchased as of the
Purchase Date or the Change in Control Purchase Date, as the case may be, is
deposited with the Paying Agent on the Business Day following the Purchase Date
or the Change in Control Purchase Date, as the case may be, Original Issue
Discount and contingent interest, if any, shall cease to accrue on such
Securities (or portions thereof) on such Purchase Date or Change in Control
Purchase Date, as the case may be, and the Holder thereof shall have no other
rights as such (other than the right to receive the Purchase Price or Change in
Control Purchase Price, as the case may be, if any, upon surrender of such
Security).

                                     A-1-7

<PAGE>

7.       Notice of Redemption.

                  Notice of redemption will be mailed at least 30 days but not
more than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at the Holder's registered address. If money sufficient to pay the
Redemption Price of, and accrued and unpaid contingent interest, if any, with
respect to, all Securities (or portions thereof) to be redeemed on the
Redemption Date is deposited with the Paying Agent prior to or on the Redemption
Date, on such Redemption Date, Original Issue Discount and interest (including
contingent interest), if any, shall cease to accrue on such Securities or
portions thereof. Securities in denominations larger than $1,000 of Principal
Amount at Maturity may be redeemed in part but only in integral multiples of
$1,000 of Principal Amount at Maturity.

8.       Conversion.

                  Subject to the provisions of this paragraph 8 and
notwithstanding the fact that any other condition to conversion has not been
satisfied, Holders may convert the Securities into Common Stock on a Conversion
Date in any fiscal quarter commencing after March 31, 2004, if, as of the last
day of the preceding fiscal quarter, the Sale Price of the Common Stock for at
least 20 trading days in a period of 30 consecutive trading days ending on the
last trading day of such preceding fiscal quarter is greater than the conversion
trigger price per share. The "conversion trigger price" for any fiscal quarter
shall be 110% of the accreted conversion price per share of Common Stock on the
last trading day of such preceding calendar quarter.

                  The "accreted conversion price per share" of Common Stock as
of any day equals the quotient of:

         -        the Issue Price and accrued Original Issue Discount to that
                  day, divided by

         -        the number of shares of Common Stock issuable upon conversion
                  of $1,000 Principal Amount at Maturity of Securities on that
                  day.

                  Conversion Based on Trading Price of the Notes. Subject to the
provisions of this paragraph and the Indenture and notwithstanding the fact that
any other condition to conversion has not been satisfied, on or before February
10, 2019, the Securities may be surrendered for conversion at any time after a
10 consecutive trading-day period in which the average of the trading prices for
the notes for that 10 trading-day period was less than 103% of the average
conversion value for the notes during that period.

                  The conversion value of a note is equal to the product of the
closing sale price for shares of our common stock on a given day multiplied by
the then current conversion rate, which is the number of shares of common stock
into which each note is then convertible. The trading price of the notes on any
date of determination is the average of the secondary market bid quotations per
note obtained by us or the calculation agent for $2,500,000 principal amount of
notes at approximately 3:30 p.m., New York City time, on such determination date
from two independent nationally recognized securities dealers the Company
selects, provided that if at least two such

                                     A-1-8

<PAGE>

bids cannot reasonably be obtained by the Company or the calculation agent, but
one such bid is obtained, then this one bid shall be used.

                  Conversion upon Redemption. Subject to the provisions of this
paragraph 8 and notwithstanding the fact that any other condition to conversion
has not been satisfied, a Holder may convert into Common Stock a Security or
portion of a Security which has been called for redemption pursuant to paragraph
5 hereof, but such Securities may be surrendered for conversion until the close
of business on the second Business Day immediately preceding the Redemption
Date.

                  Conversion upon Certain Distributions. Subject to the
provisions of this paragraph 8 and notwithstanding the fact that any other
condition to conversion has not been satisfied, in the event that the Company
declares a dividend or distribution described in Section 11.07 of the Indenture,
or a dividend or a distribution described in Section 11.08 of the Indenture
where, the fair market value, per share, of such dividend or distribution per
share of Common Stock, as determined in the Indenture, exceeds 15% of the Sale
Price of the Common Stock on the Business Day immediately preceding the date of
declaration for such dividend or distribution, the Securities may be surrendered
for conversion beginning on the date the Company gives notice to the Holders of
such right, which shall not be less than 20 days prior to the Ex-Dividend Time
for such dividend or distribution, and Securities may be surrendered for
conversion at any time thereafter until the close of business on the Business
Day prior to the Ex-Dividend Time or until the Company announces that such
dividend or distribution will not take place.

                  Conversion upon the Occurrence of Certain Corporate
Transactions. Subject to the provisions of this paragraph 8 and notwithstanding
the fact that any other condition to conversion has not been satisfied, in the
event the Company is a party to a consolidation, merger or binding share
exchange pursuant to which the Common Stock would be converted into cash,
securities or other property as set forth in Section 11.14 of the Indenture, the
Securities may be surrendered for conversion at any time from and after the date
which is 15 days prior to the date the Company announces the anticipated
effective time until 15 days after the actual effective date of such
transaction, and at the effective time of such transaction the right to convert
a Security into Common Stock will be deemed to have changed into a right to
convert it into the kind and amount of cash, securities or other property which
the holder would have received if the holder had converted its Security
immediately prior to the transaction.

                  A Security in respect of which a Holder has delivered a
Purchase Notice or Change in Control Purchase Notice exercising the option of
such Holder to require the Company to purchase such Security may be converted
only if such notice of exercise is withdrawn in accordance with the terms of the
Indenture.

                  The initial Conversion Rate is 40.3737 shares of Common Stock
per $1,000 Principal Amount at Maturity, subject to adjustment in certain events
described in the Indenture. The Company will deliver cash or a check in lieu of
any fractional share of Common Stock.

                                     A-1-9

<PAGE>

                  In the event the Company exercises its option pursuant to
Section 10.01 of the Indenture to have interest in lieu of Original Issue
Discount accrue on the Security following a Tax Event, the Holder will be
entitled on conversion to receive the same number of shares of Common Stock such
Holder would have received if the Company had not exercised such option.

                  Accrued and unpaid interest in lieu of Original Issue Discount
and contingent interest will not be paid on Securities that are converted;
provided, however that Securities surrendered for conversion during the period,
in the case of interest in lieu of Original Issue Discount, from the close of
business on any Regular Record Date next preceding any Interest Payment Date to
the opening of business on such Interest Payment Date, shall be entitled to
receive such interest, in lieu of Original Issue Discount, payable on such
Securities on the corresponding Interest Payment Date and (except Securities
with respect to which the Company has mailed a notice of redemption) Securities
surrendered for conversion during such periods must be accompanied by payment of
an amount equal to the interest in lieu of Original Issue Discount with respect
thereto that the registered Holder is to receive.

                  To convert a Security, a Holder must (1) complete and manually
sign the conversion notice below (or complete and manually sign a facsimile of
such notice) and deliver such notice to the Conversion Agent, (2) surrender the
Security to the Conversion Agent, (3) furnish appropriate endorsements and
transfer documents if required by the Conversion Agent, the Company or the
Trustee and (4) pay any transfer or similar tax, if required.

                  A Holder may convert a portion of a Security if the Principal
Amount at Maturity of such portion is $1,000 or an integral multiple of $1,000.
No payment or adjustment will be made for dividends on the Common Stock except
as provided in the Indenture. On conversion of a Security, the greater of that
portion of accrued Original Issue Discount (or interest if the Company has
exercised its option provided for in paragraph 10 hereof) or Tax Original Issue
Discount attributable to the period from the Issue Date (or, if the Company has
exercised the option referred to in paragraph 10 hereof, the later of (x) the
date of such exercise and (y) the date on which interest was last paid) through
the Conversion Date and (except as provided above) accrued contingent interest,
if any, with respect to the converted Security shall not be cancelled,
extinguished or forfeited, but rather shall be deemed to be paid in full to the
Holder thereof through the delivery of the Common Stock (together with the cash
payment, if any, in lieu of fractional shares) in exchange for the Security
being converted pursuant to the terms hereof; and the fair market value of such
shares of Common Stock (together with any such cash payment in lieu of
fractional shares) shall be treated as issued, to the extent thereof, first in
exchange for the greater of Original Issue Discount (or interest, if the Company
has exercised its option provided for in paragraph 10 hereof) or Tax Original
Issue Discount accrued through the Conversion Date and any accrued contingent
interest, and the balance, if any, of such fair market value of such Common
Stock (and any such cash payment) shall be treated as issued in exchange for the
Issue Price of the Security being converted pursuant to the provisions hereof.

                  The Conversion Rate will be adjusted for dividends or
distributions on Common Stock payable in Common Stock or other Capital Stock;
subdivisions, combinations or certain

                                     A-1-10

<PAGE>

reclassifications of Common Stock; distributions to all holders of Common Stock
of certain rights to purchase Common Stock for a period expiring within 60 days
of the record date for such distribution at less than the Sale Price of the
Common Stock at the Time of Determination; and distributions to such holders of
assets or debt securities of the Company or certain rights to purchase
securities of the Company (excluding certain cash dividends or distributions)
and certain rights pursuant to shareholder rights plans. However, no adjustment
need be made if Securityholders may participate in the transaction or in certain
other cases. The Company from time to time may voluntarily increase the
Conversion Rate.

                  If the Company is a party to a consolidation, merger or
binding share exchange or a transfer of all or substantially all of its assets,
or upon certain distributions described in the Indenture, the right to convert a
Security into Common Stock may be changed into a right to convert it into
securities, cash or other assets of the Company or another person.

9.       Conversion Arrangement on Call for Redemption.

                  Any Securities called for redemption, unless surrendered for
conversion before the close of business on the Redemption Date, may be deemed to
be purchased from the Holders of such Securities at an amount not less than the
Redemption Price, by one or more investment bankers or other purchasers who may
agree with the Company to purchase such Securities from the Holders, to convert
them into Common Stock of the Company and to make payment for such Securities to
the Trustee in trust for such Holders.

10.      Tax Event.

                  (a)      From and after (i) the date of the occurrence of a
Tax Event (the "Tax Event Date") and (ii) the date the Company exercises the
option provided for in this paragraph 10, whichever is later (the "Option
Exercise Date"), at the option of the Company, interest in lieu of future
Original Issue Discount shall accrue at the rate of 3.625% per annum on a
principal amount per Security (the "Restated Principal Amount") equal to the
Issue Price plus Original Issue Discount accrued through the Option Exercise
Date and shall be payable semiannually on February 10 and August 10 of each year
(each an "Interest Payment Date") to holders of record at the close of business
on February 1 or August 1 (each a "Regular Record Date") immediately preceding
such Interest Payment Date. Interest will be computed on the basis of a 360-day
year comprised of twelve 30-day months and will accrue from the most recent date
to which interest has been paid or, if no interest has been paid, from the
Option Exercise Date.

                  (b)      Interest on any Security that is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the person in whose name that Security is registered at the close of business
on the Regular Record Date for such interest at the office or agency of the
Company maintained for such purpose. Each installment of interest on any
Security shall be paid in same-day funds by transfer to an account maintained by
the payee located inside the United States.

                                     A-1-11

<PAGE>

11.      Defaulted Interest.

                  Except as otherwise specified with respect to the Securities,
any Defaulted Interest on any Security shall forthwith cease to be payable to
the registered Holder thereof on the relevant Regular Record Date or accrual
date, as the case may be, by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company as provided for in Section 12.02
of the Indenture.

12.      Denominations; Transfer; Exchange.

                  The Securities are in fully registered form, without coupons,
in denominations of $1,000 of Principal Amount at Maturity and integral
multiples of $1,000. A Holder may transfer or exchange Securities in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
transfer or exchange any Securities selected for redemption (except, in the case
of a Security to be redeemed in part, the portion of the Security not to be
redeemed) or any Securities in respect of which a Purchase Notice or Change in
Control Purchase Notice has been given and not withdrawn (except, in the case of
a Security to be purchased in part, the portion of the Security not to be
purchased) or any Securities for a period of 15 days before the mailing of a
notice of redemption of Securities to be redeemed.

13.      Persons Deemed Owners.

                  The registered Holder of this Security may be treated as the
owner of this Security for all purposes.

14.      Unclaimed Money or Securities.

                  The Trustee and the Paying Agent shall return to the Company
upon written request any money or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years,
subject to applicable unclaimed property laws. After return to the Company,
Holders entitled to the money or securities must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another person.

15.      Amendment; Waiver.

                  Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount at Maturity of the
Securities at the time outstanding and (ii) certain Defaults may be waived with
the written consent of the Holders of a majority in aggregate Principal Amount
at Maturity of the Securities at the time outstanding. Subject to certain
exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsis-

                                     A-1-12

<PAGE>

tency, or to comply with Article 5 or Section 11.14 of the Indenture, to secure
the Company's obligations under this Security or to add to the Company's
covenants for the benefit of the Securityholders or to surrender any right or
power conferred, to comply with any requirement of the SEC in connection with
the qualification of the Indenture under the TIA, or as necessary in connection
with the registration of the Securities under the Securities Act or to make any
change that does not adversely affect the rights of any Holders.

16.      Defaults and Remedies.

                  Under the Indenture, Events of Default include (i) default in
the payment of contingent interest when the same becomes due and payable or of
interest which becomes due and payable upon exercise by the Company of its
option provided for in paragraph 10 hereof which default in either case
continues for 30 days; (ii) default in payment of the Principal Amount at
Maturity (including Original Issue Discount and, if the Securities have been
converted to semiannual coupon notes following a Tax Event, the Restated
Principal Amount), Issue Price plus accrued Original Issue Discount, Redemption
Price, Purchase Price or Change in Control Purchase Price, as the case may be,
in respect of the Securities when the same becomes due and payable; (iii)
failure by the Company or any Guarantor to comply with other agreements in the
Indenture or the Securities, subject to notice and lapse of time; (iv) default
under any Debt, whether such Debt now exists or is created later, which default
results in such Debt becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable, and the principal
amount of all Debt so accelerated, together with all Debt due and payable but
not paid prior to the end of any grace period, is $10,000,000 or more, and such
acceleration has not been rescinded or annulled within a period of 10 days after
receipt by the Company of a Notice of Default from the Trustee; provided,
however, that if any such default shall be cured, waived, rescinded or annulled,
then the Event of Default by reason thereof shall be deemed not to have
occurred; (v) if any Guarantee ceases to be in full force and effect or is
declared null and void or any Guarantor denies that it has any further liability
under any Guarantee, or gives notice to such effect (other than by reason of the
termination of this Indenture or the release of any such Guarantee in accordance
with this Indenture) and such condition shall have continued for a period of 30
days after written notice of such failure requiring the Guarantor and the
Company to remedy the same shall have been given (x) to the Company by the
Trustee or (y) to the Company and the Trustee by the holders of 25% in aggregate
principal amount of the Securities then outstanding; and (vi) certain events of
bankruptcy or insolvency. If an Event of Default occurs and is continuing, the
Trustee, or the Holders of at least 25% in aggregate Principal Amount at
Maturity of the Securities at the time outstanding, may declare all the
Securities to be due and payable immediately. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Securities becoming
due and payable immediately upon the occurrence of such Events of Default.

                  Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives indemnity or security
reasonably satisfactory to it. Subject to certain limitations, Holders of a
majority in aggregate Principal Amount at Maturity of the Securities at the time
out-

                                     A-1-13

<PAGE>

standing may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of amounts specified in clause (i) or (ii) above)
if it determines that withholding notice is in their interests.

17.      Trustee Dealings with the Company.

                  Subject to certain limitations imposed by the TIA, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.

18.      No Recourse Against Others.

                  A director, officer, employee, agent, representative,
stockholder or equity holder, as such, of the Company shall not have any
liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.

19.      Authentication.

                  This Security shall not be valid until an authorized signatory
of the Trustee manually signs the Trustee's Certificate of Authentication on the
other side of this Security.

20.      Abbreviations.

                  Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).

21.      GOVERNING LAW.

                  THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW, SHALL GOVERN THE INDENTURE, THE
GUARANTEES AND THIS SECURITY.

                             ----------------------

                                     A-1-14

<PAGE>

                  The Company will furnish to any Securityholder upon written
request and without charge a copy of the Indenture which has in it the text of
this Security in larger type. Requests may be made to:

                  Mesa Air Group, Inc.
                  Attention: General Counsel

                                     A-1-15

<PAGE>

<TABLE>
<CAPTION>
              ASSIGNMENT FORM                                                 CONVERSION NOTICE
<S>                                                            <C>
To assign this Security, fill in the form below:               To convert this Security into Common Stock of the
                                                               Company, check the box:
I or we assign and transfer this Security to

______________________________________________
                                                               To convert only part of this Security, state the
(Insert assignee's soc. sec. or tax ID no.)                    Principal Amount at Maturity to be converted (which
                                                               must be $1,000 or an integral multiple of $1,000):
______________________________________________
                                                               $ ________________________________________________
______________________________________________
                                                               If you want the stock certificate made out in
______________________________________________                 another person's name, fill in the form below:
(Print or type assignee's name, address and zip code)
and irrevocably appoint                                        __________________________________________________
                                                                (Insert other person's soc. sec. or tax ID no.)
_____________________ agent to transfer this Security on
the books of the Company.  The agent may substitute            __________________________________________________
another to act for him.
                                                               __________________________________________________

                                                               __________________________________________________

                                                               __________________________________________________
                                                               (Print or type other person's name, address and zip
                                                               code)
</TABLE>

                                     A-1-16

<PAGE>

________________________________________________________________________________
Date:  _____________________  Your Signature:___________________________________
________________________________________________________________________________
     (Sign exactly as your name appears on the other side of this Security)

                                     A-1-17

<PAGE>

                                                                     Exhibit A-2

                               [FORM OF GUARANTEE]

                  The Guarantors (as defined in the Indenture and which term
includes any successor person under the Indenture), upon the terms and subject
to the conditions set forth in the Indenture, hereby unconditionally guarantee,
jointly and severally, on a senior unsecured basis (such guarantee by each
Guarantor being referred to herein as the "Guarantee") (i) the due and punctual
payment of the principal of and interest (including contingent interest) on the
Securities, whether at maturity, by acceleration or otherwise, the due and
punctual payment of interest on the overdue principal and interest, if any, on
the Securities, to the extent lawful, and the due and punctual performance of
all other obligations of the Company to the Holders or the Trustee all in
accordance with the terms set forth in Article 13 of the Indenture and (ii) in
case of any extension of time of payment or renewal of any Securities or any of
such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
Stated Maturity, by acceleration or otherwise.

                  The obligations of the undersigned to the Holders of the
Securities and to the Trustee pursuant to this Guarantee and in the Indenture
are expressly set forth in the Indenture and reference is hereby made to the
Indenture for the precise terms of the Guarantees and all of the other
provisions of the Indenture to which this Guarantee relates.

                  No stockholder, officer, director, employee or incorporator,
as such, past, present or future, of any Guarantor shall have any liability
under the Guarantee by reason of his or its status as such stockholder, officer,
director, employee or incorporator.

                  The Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Securities upon which the
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized signatories.

                  The Guarantee shall be governed by and construed in accordance
with the law of the State of New York applicable to agreements made or
instruments entered into and, in each case, performed in said state.

                                     A-2-1

<PAGE>

                  IN WITNESS WHEREOF, the Guarantors have caused this instrument
to be duly executed.

                                    MESA AIRLINES, INC.
                                    FREEDOM AIRLINES, INC.
                                    AIR MIDWEST, INC.
                                    MPD, INC.

                                    By: ________________________________________
                                         Name:
                                         Title:

                                    REGIONAL AIRCRAFT SERVICES, INC.
                                    MESA AIR GROUP-AIRCRAFT INVENTORY
                                     MANAGEMENT, LLC
                                    RITZ HOTEL MANAGEMENT CORP.

                                    By: ________________________________________
                                        Name:
                                        Title:

                                     A-2-2

<PAGE>

                                   EXHIBIT A-3

                         [Form of Certificated Security]

                  THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT, FOR
PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE
CODE OF 1986, AS AMENDED. THE ISSUE PRICE OF THIS NOTE WAS $583.40 PER $1,000 OF
PRINCIPAL AMOUNT AT MATURITY; THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, INCLUDING
CASH INTEREST PAYABLE THROUGH FEBRUARY 10, 2009 TAXABLE AS ORIGINAL ISSUE
DISCOUNT UNDER TREASURY REGULATION SECTION 1.1273-1, IS $522.34 PER $1,000 OF
PRINCIPAL AMOUNT AT MATURITY; THE ISSUE DATE IS FEBRUARY 10, 2004; AND THE YIELD
TO MATURITY FOR THE PURPOSES OF ACCRUING TAX ORIGINAL ISSUE DISCOUNT IS 3.625%
PER ANNUM, CALCULATED ON A SEMIANNUAL BOND EQUIVALENT BASIS.

                  [INCLUDE IF SECURITY IS A CERTIFICATED SECURITY TO BE HELD BY
AN INSTITUTIONAL ACCREDITED INVESTOR--IN CONNECTION WITH ANY TRANSFER, THE
HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND
OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT
THE TRANSFER COMPLIES WITH THE FOLLOWING RESTRICTIONS.]

                  THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.

                  THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES
TO OFFER, SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE"), WHICH IS TWO YEARS AFTER THE LATER OF
THE LAST DAY SECURITIES OF THIS ISSUE WERE ISSUED AND THE LAST DATE ON WHICH
MESA AIR GROUP, INC. (THE "COMPANY" OR THE "ISSUER") OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY)
ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO

                                     A-3-1

<PAGE>

WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(a)(1), (2),(3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (C) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH
OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE
OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF ANY HOLDER THAT IS NOT
AN AFFILIATE OF THE COMPANY AFTER THE RESALE RESTRICTION TERMINATION DATE.

                  THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON
SATISFACTION OF THE CONDITIONS SPECIFIED IN THE INDENTURE.

                                     A-3-2

<PAGE>

                              MESA AIR GROUP, INC.
                        Senior Convertible Note due 2024

No. A-2                                        CUSIP:  590479 AC 5
Issue Date:  February 10, 2004                 Original Issue Discount:  $522.34
Issue Price:  $583.40                          (for each $1,000 Principal
(for each $1,000 Principal                     Amount at Maturity)
Amount at Maturity)

Amount at Maturity)

                  MESA AIR GROUP, INC., a Nevada corporation, promises to pay to
Cede & Co. or registered assigns the Principal Amount at Maturity of ONE HUNDRED
SEVENTY ONE MILLION FOUR HUNDRED NINE THOUSAND DOLLARS ($171,409,000) on
February 10, 2024.

                  This Security shall not bear interest except as specified on
the other side of this Security. Original Issue Discount will accrue as
specified on the other side of this Security. This Security is convertible as
specified on the other side of this Security.

                  Additional provisions of this Security are set forth on the
other side of this Security.

Dated: February 10, 2004            MESA AIR GROUP, INC.

                                    By: ________________________________________
                                        Title:

TRUSTEE'S CERTIFICATE OF
AUTHENTICATION

U.S. BANK NATIONAL ASSOCIATION,
as Trustee, certifies that this is one of the
Securities referred to in the within-mentioned Indenture.

By: ___________________________
        Authorized Officer

Dated: ________________________

                                     A-3-3

<PAGE>

                                   EXHIBIT B-1

                              TRANSFER CERTIFICATE

                  In connection with any transfer of any of the Securities
within the period prior to the expiration of the holding period applicable to
the sales thereof under Rule 144(k) (or any successor provision) under the
Securities Act of 1933, as amended (the "Securities Act"), the undersigned
registered owner of this Security hereby certifies with respect to $____________
Principal Amount at Maturity of the above-captioned securities presented or
surrendered on the date hereof (the "Surrendered Securities") for registration
of transfer, or for exchange or conversion where the securities issuable upon
such exchange or conversion are to be registered in a name other than that of
the undersigned registered owner (each such transaction being a "transfer"),
that such transfer complies with the restrictive legend set forth on the face of
the Surrendered Securities for the reason checked below:

         [ ]      The transfer of the Surrendered Securities is made to the
                  Company or any subsidiaries; or

         [ ]      The transfer of the Surrendered Securities complies with Rule
                  144A under the Securities Act; or

         [ ]      The transfer of the Surrendered Securities is to an
                  institutional accredited investor, as described in Rule
                  501(a)(1), (2), (3) or (7) under the Securities Act; or

         [ ]      The transfer of the Surrendered Securities is pursuant to an
                  effective registration statement under the Securities Act, or

         [ ]      The transfer of the Surrendered Securities is pursuant to an
                  offshore transaction in accordance with Rule 904 under the
                  Securities Act; or

         [ ]      The transfer of the Surrendered Securities is pursuant to
                  another available exemption from the registration requirement
                  of the Securities Act.

and unless the box below is checked, the undersigned confirms that, to the
undersigned's knowledge, such Securities are not being transferred to an
"affiliate" of the Company as defined in Rule 144 under the Securities Act (an
"Affiliate").

         [ ]      The transferee is an Affiliate of the Company.

DATE: _______________________                ___________________________________
                                                        Signature(s)

            (If the registered owner is a corporation, partnership or
             fiduciary, the title of the Person signing on behalf of
                     such registered owner must be stated.)

                                     B-1-1

<PAGE>

                                   EXHIBIT B-2

             FORM OF LETTER TO BE DELIVERED BY ACCREDITED INVESTORS

Mesa Air Group, Inc.
410 North 44th Street
Suite 700
Phoenix, AZ  85008

Attention: General Counsel

U.S. Bank National Association
One Federal Street
Boston, MA  02110

Attention: Corporate Trust Department

Dear Sirs:

                  We are delivering this letter in connection with the proposed
transfer of $_____________ Principal Amount at Maturity of the Senior
Convertible Notes due 2024 (the "Securities") issued by Mesa Air Group, Inc.
(the "Company"), which are convertible into shares of the Company's Common
Stock, no par value per share (the "Common Stock").

                  We hereby confirm that:

                   (i) we are an "accredited investor" within the meaning of
         Rule 501(a)(1), (2) or (3) under the Securities Act of 1933, as amended
         (the "Securities Act"), or an entity in which all of the equity owners
         are accredited investors within the meaning of Rule 501(a)(1), (2) or
         (3) under the Securities Act (an "Institutional Accredited Investor");

                  (ii) the purchase of Securities by us is for our own account
         or for the account of one or more other Institutional Accredited
         Investors or as fiduciary for the account of one or more trusts, each
         of which is an "accredited investor" within the meaning of Rule
         501(a)(7) under the Securities Act and for each of which we exercise
         sole investment discretion, or (B) we are a "bank," within the meaning
         of Section 3(a)(2) of the Securities Act, or a "savings and loan
         association" or other institution described in Section 3(a)(5)(A) of
         the Securities Act that is acquiring Securities as fiduciary for the
         account of one or more institutions for which we exercise sole
         investment discretion;

                 (iii) we will acquire Securities having a minimum principal
         amount at maturity of not less than $250,000 for our own account or for
         any separate account for which we are acting;

                                     B-2-1

<PAGE>

                  (iv) we have such knowledge and experience in financial and
         business matters that we are capable of evaluating the merits and risks
         of purchasing Securities; and

                   (v) we are not acquiring Securities with a view to
         distribution thereof or with any present intention of offering or
         selling Securities or the Common Stock issuable upon conversion
         thereof, except as permitted below; provided that the disposition of
         our property and property of any accounts for which we are acting as
         fiduciary shall remain at all times within our control.

                  We understand that the Securities were originally offered and
sold in a transaction not involving any public offering within the United States
within the meaning of the Securities Act and that the Securities and the Common
Stock issuable upon conversion thereof (the Securities and such Common Stock
hereinafter referred to as the "Securities") have not been registered under the
Securities Act, and we agree, on our own behalf and on behalf of each account
for which we acquire any Securities, that if in the future we decide to resell
or otherwise transfer such Securities prior to the date (the "Resale Restriction
Termination Date") which is two years after the later of the last day the
Securities of this issue were issued and the last date on which the Company or
an affiliate of the Company was the owner of the Security, such Securities may
be resold or otherwise transferred only (i) to the Company or any subsidiary
thereof, or (ii) for as long as the Securities are eligible for resale pursuant
to Rule 144A, to a person it reasonably believes is a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) that purchases for its
own account or for the account of a qualified institutional buyer to which
notice is given that the transfer is being made in reliance on Rule 144A, or
(iii) to an Institutional Accredited Investor that is acquiring the Security for
its own account, or for the account of such Institutional Accredited Investor
for investment purposes and not with a view to, or for offer or sale in
connection with, any distribution in violation of the Securities Act, or (iv)
pursuant to another available exemption from registration under the Securities
Act (if applicable), or (v) pursuant to a registration statement which has been
declared effective under the Securities Act and, in each case, in accordance
with any applicable securities laws of any state of the United States or any
other applicable jurisdiction and in accordance with the legends set forth on
the Securities. We further agree to provide any person purchasing any of the
Securities from us other than pursuant to clause (v) above a notice advising
such purchaser that resales of such securities are restricted as stated herein.
We understand that the trustee or the transfer agent, as the case may be, for
the Securities will not be required to accept for registration of transfer any
Securities pursuant to (iii) or (iv) above except upon presentation of evidence
satisfactory to the Company that the foregoing restrictions on transfer have
been complied with. We further understand that any Securities will be in the
form of definitive physical certificates and that such certificates will bear a
legend reflecting the substance of this paragraph other than certificates
representing Securities transferred pursuant to clause (v) above.

                  We acknowledge that the Company, others and you will rely upon
our confirmations, acknowledgments and agreements set forth herein, and we agree
to notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.

                                     B-2-2

<PAGE>

                  THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW.

                                              __________________________________
                                              (Name of Purchaser)

                                              By: ______________________________
                                                  Name:
                                                  Title:
                                                  Address:

                                     B-2-3

<PAGE>

                                     ANNEX C

                          PROJECTED PAYMENT SCHEDULE*

Semiannual Period Ending                       Projected Payment per Security
- ------------------------                       ------------------------------

- ------------------------
*        The comparable yield and the schedule of projected payments are
         determined on the basis of an assumption of linear growth of the stock
         price and a constant dividend yield and are not determined for any
         purpose other than for the determination of interest accruals and
         adjustments thereof in respect of the Securities for United States
         federal income tax purposes. The comparable yield and the schedule of
         projected payments do not constitute a projection or representation
         regarding the amounts payable on the Securities.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>3
<FILENAME>p69133exv4w2.txt
<DESCRIPTION>EX-4.2
<TEXT>
<PAGE>

                                                                     EXHIBIT 4.2

                          REGISTRATION RIGHTS AGREEMENT

                  THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
and entered into as of February 10, 2004 between Mesa Air Group, Inc., a Nevada
corporation (the "Company"), the subsidiaries of the Company that are listed on
the signature pages hereto (collectively, and together with any entity that in
the future executes a supplemental indenture pursuant to which such entity
agrees to guarantee the Notes (as hereinafter defined), the "Guarantors" and,
together with the Company, the "Issuers") and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, the Initial Purchaser under the Purchase Agreement (the
"Initial Purchaser"), dated February 5, 2004 (the "Purchase Agreement"), between
the Issuers and the Initial Purchaser. In order to induce the Initial Purchaser
to enter into the Purchase Agreement, the Issuers have agreed to provide the
registration rights set forth in this Agreement. The execution of this Agreement
is a condition to the closing under the Purchase Agreement.

                  The Issuers agree with the Initial Purchaser, (i) for its
benefit as Initial Purchaser and (ii) for the benefit of the beneficial owners
(including the Initial Purchaser) from time to time of the Notes (as defined
herein), guaranteed by the Guarantors (the "Guarantees"), the Notes and the
Guarantees are collectively referenced to herein as the "Securities," and the
beneficial owners from time to time of the Underlying Common Stock (as defined
herein) issued upon conversion of the Notes (each of the foregoing a "Holder"
and together the "Holders"), as follows:

SECTION 1. Definitions. Capitalized terms used herein without definition shall
have their respective meanings set forth in the Purchase Agreement. In addition
to the terms that are defined elsewhere in this Agreement, the following terms
shall have the following meanings:

                  "Affiliate," with respect to any specified person, has the
meaning specified in Rule 144.

                  "Applicable Conversion Price" means, as of any date of
determination, the Applicable Principal Amount per $1,000 principal amount at
maturity of Notes as of such date of determination divided by the Conversion
Rate in effect as of such date of determination or, if no Notes are then
outstanding, the Conversion Rate that would be in effect were Notes then
outstanding.

                  "Applicable Principal Amount" means, as of any date of
determination, with respect to each $1,000 principal amount at maturity of Notes
means the sum of the initial issue price of such Notes ($583.40) plus accrued
original issue discount with respect to such Notes through such date of
determination or, if no Notes are then outstanding, such sum calculated as if
such Notes were then outstanding.

<PAGE>

                  "Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions in The City of New
York are authorized or obligated by law or executive order to close.

                  "Common Stock" means any shares of the common stock, no par
value, of the Company and any other shares of common stock as may constitute
"Common Stock" for purposes of the Indenture, including the Underlying Common
Stock.

                  "Conversion Rate" has the meaning assigned to such term in the
Indenture.

                  "Damages Accrual Period" has the meaning specified in Section
2(e) hereof.

                  "Damages Payment Date" means each February 10 and August 10.

                  "Deferral Notice" has the meaning specified in Section 3(i)
hereof.

                  "Deferral Period" has the meaning specified in Section 3(i)
hereof.

                  "Effectiveness Deadline Date" has the meaning specified in
Section 2(a) hereof.

                  "Effectiveness Period" means the period of two years (the
holding period applicable to the Registrable Securities held by persons that are
not Affiliates of the Company under Rule 144(k) under the Securities Act) from
the Issue Date or such shorter period ending on the date that all Registrable
Securities have ceased to be Registrable Securities.

                  "Event" has the meaning specified in Section 2(e) hereof.

                  "Event Date" has the meaning specified in Section 2(e) hereof.

                  "Event Termination Date" has the meaning specified in Section
2(e) hereof.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.

                  "Filing Deadline Date" has the meaning specified in Section
2(a) hereof.

                  "guarantee" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation and (ii) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.

                  "Guarantors" has the meaning specified in the introductory
paragraph hereto.

                                       2

<PAGE>

                  "Holder" has the meaning specified in the second paragraph of
this Agreement.

                  "Indenture" means the Indenture dated as of the date hereof
among the Issuers and U.S. Bank National Association, as trustee, pursuant to
which the Notes are being issued.

                  "Initial Purchaser" mean Merrill Lynch, Pierce, Fenner & Smith
Incorporated.

                  "Initial Shelf Registration Statement" has the meaning
specified in Section 2(a) hereof.

                  "Issue Date" means February 10, 2004.

                  "Liquidated Damages Amount" has the meaning specified in
Section 2(e) hereof.

                  "Material Event" has the meaning specified in Section 3(i)
hereof.

                  "Notes" means the Senior Convertible Notes due 2024 of the
Company to be purchased pursuant to the Purchase Agreement.

                  "Notice and Questionnaire" means a written notice delivered to
the Issuers containing substantially the information called for by the Selling
Security Holder Notice and Questionnaire attached as Annex A to the Offering
Memorandum of the Company dated February 5, 2004 relating to the Notes.

                  "Notice Holder" means on any date, any Holder that has
delivered a Notice and Questionnaire to the Issuers on or prior to such date.

                  "Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 415 promulgated under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all materials incorporated
by reference or explicitly deemed to be incorporated by reference in such
Prospectus.

                  "Purchase Agreement" has the meaning specified in the first
paragraph of this Agreement.

                  "Record Holder" means, with respect to any Damages Payment
Date relating to any Note or shares of Underlying Common Stock as to which any
Liquidated Damages Amount has accrued, the registered holder of such Note or
such shares of Underlying Common Stock, as the case may be, on the 9th day
immediately prior to the next succeeding Damages Payment Date.

                  "Registrable Securities" means the Notes and the Underlying
Common Stock until such securities have been converted or exchanged and, at all
times subsequent to any

                                       3

<PAGE>

such conversion or exchange, any securities into or for which such securities
have been converted or exchanged, and any security issued with respect thereto
upon any stock dividend, split, merger or similar event until, in the case of
any such security, the earliest of (i) its effective registration under the
Securities Act and resale in accordance with the Registration Statement covering
it, (ii) expiration of the holding period that would be applicable thereto under
Rule 144(k) were it not held by an Affiliate of the Issuers, or (iii) its sale
to the public pursuant to Rule 144.

                  "Registration Expenses" has the meaning specified in Section 5
hereof.

                  "Registration Statement" means any registration statement of
the Company that covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective amendments,
all exhibits, and all materials incorporated by reference or explicitly deemed
to be incorporated by reference in such registration statement.

                  "Restated Principal Amount" has the meaning assigned to such
term in the Indenture.

                  "Restricted Securities" has the meaning assigned to such term
in Rule 144.

                  "Rule 144" means Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or any similar or successor rule or
regulation hereafter adopted by the SEC having substantially the same effect as
such Rule.

                  "Rule 144A" means Rule 144A under the Securities Act, as such
Rule may be amended from time to time, or any similar or successor rule or
regulation hereafter adopted by the SEC having substantially the same effect as
such Rule.

                  "SEC" means the United States Securities and Exchange
Commission.

                  "Securities" has the meaning specified in the introductory
paragraphs hereto.

                  "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated by the SEC thereunder.

                  "Semiannual Coupon Notes" has the meaning as used in the
Indenture.

                  "Shelf Registration Statement" has the meaning specified in
Section 2(a) hereof.

                  "Subsequent Shelf Registration Statement" has the meaning
specified in Section 2(b) hereof.

                  "Tax Event" has the meaning assigned to such term in the
Indenture.

                  "TIA" means the Trust Indenture Act of 1939, as amended.

                                       4

<PAGE>

                  "Trustee" means U.S. Bank National Association (or any
successor entity), the Trustee under the Indenture.

                  "Underlying Common Stock" means the Common Stock into which
the Notes are convertible or issued upon any such conversion.

                  SECTION 2. Shelf Registration.

                  (a)      The Issuers shall prepare and file or cause to be
prepared and filed with the SEC no later than a date which is 90 days after the
Issue Date (the "Filing Deadline Date") a Registration Statement for an offering
to be made on a delayed or continuous basis pursuant to Rule 415 of the
Securities Act (a "Shelf Registration Statement") registering the resale from
time to time by Holders of all of the Registrable Securities (the "Initial Shelf
Registration Statement"). The Initial Shelf Registration Statement shall be on
Form S-3 or another appropriate form permitting registration of such Registrable
Securities for resale by such Holders in accordance with the methods of
distribution reasonably elected by the Holders and set forth in the Initial
Shelf Registration Statement; provided that in no event will such method(s) of
distribution take the form of an underwritten offering of the Registrable
Securities without the prior agreement of the Issuers. The Issuers shall use
reasonable efforts to cause the Initial Shelf Registration Statement to be
declared effective under the Securities Act no later than the date (the
"Effectiveness Deadline Date") that is 180 days after the Issue Date, and to
keep the Initial Shelf Registration Statement (or any Subsequent Shelf
Registration Statement) continuously effective under the Securities Act until
the expiration of the Effectiveness Period. Each Holder that became a Notice
Holder on or prior to the date 10 Business Days prior to the time that the
Initial Shelf Registration Statement became effective shall be named as a
selling security holder in the Initial Shelf Registration Statement and the
related Prospectus in such a manner as to permit such Holder to deliver such
Prospectus to purchasers of Registrable Securities in accordance with applicable
law (other than laws not generally applicable to all such Holders).
Notwithstanding the foregoing, no Holder shall be entitled to have the
Registrable Securities held by it covered by such Shelf Registration Statement
unless such Holder has provided a Notice and Questionnaire in accordance with
Section 2(d) and is in compliance with Section 4. Except as described in the
Offering Memorandum, none of the Issuers' security holders (other than the
Holders of Registrable Securities) shall have the right to include any of the
Issuers' securities in the Shelf Registration Statement.

                  (b)      If the Initial Shelf Registration Statement or any
Subsequent Shelf Registration Statement ceases to be effective for any reason at
any time during the Effectiveness Period, the Issuers shall use reasonable
efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within 30 days of such cessation
of effectiveness amend the Shelf Registration Statement in a manner reasonably
expected by the Issuers to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a "Subsequent Shelf Registration Statement"). If a
Subsequent Shelf Registration Statement is filed, the Issuers shall use
reasonable efforts to cause the Subsequent Shelf Registration Statement to
become effective as promptly as is reasonably practicable after such filing or,
if filed during a

                                       5

<PAGE>

Deferral Period, after the expiration of such Deferral Period, and to keep such
Registration Statement (or subsequent Shelf Registration Statement) continuously
effective until the end of the Effectiveness Period.

                  (c)      The Issuers shall supplement and amend the Shelf
Registration Statement if required by the rules, regulations or instructions
applicable to the registration form used by the Issuers for such Shelf
Registration Statement, if required by the Securities Act or, to the extent to
which the Issuers do not reasonably object, as reasonably requested by the
Initial Purchaser or by the Trustee on behalf of the registered Holders.

                  (d)      Each Holder of Registrable Securities agrees that if
such Holder wishes to sell Registrable Securities pursuant to a Shelf
Registration Statement and related Prospectus, it will do so only in accordance
with this Section 2(d) and Section 3(i) and Section 4. Each Holder of
Registrable Securities wishing to sell Registrable Securities pursuant to a
Shelf Registration Statement and related Prospectus agrees to deliver a Notice
and Questionnaire to the Issuers at least five (5) Business Days prior to any
intended distribution of Registrable Securities under the Shelf Registration
Statement. From and after the date the Initial Shelf Registration Statement is
declared effective, the Issuers shall, as promptly as is reasonably practicable
after the date a Notice and Questionnaire is delivered, (i) if required by
applicable law, file with the SEC a post-effective amendment to the Shelf
Registration Statement or prepare and, if required by applicable law, file a
supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other document required
by the SEC so that the Holder delivering such Notice and Questionnaire is named
as a selling security holder in the Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus
to purchasers of the Registrable Securities in accordance with applicable law
(other than laws not generally applicable to all Holders of Registrable
Securities wishing to sell Registrable Securities pursuant to the Shelf
Registration Statement and related Prospectus) and, if the Issuers shall file a
post-effective amendment to the Shelf Registration Statement, use reasonable
efforts to cause such post-effective amendment to be declared effective under
the Securities Act as promptly as is reasonably practicable; (ii) provide such
Holder copies of any documents filed pursuant to Section 2(d)(i); and (iii)
notify such Holder as promptly as is reasonably practicable after the
effectiveness under the Securities Act of any post-effective amendment filed
pursuant to Section 2(d)(i); provided that if such Notice and Questionnaire is
delivered during a Deferral Period, the Issuers shall so inform the Holder
delivering such Notice and Questionnaire and shall take the actions set forth in
clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in
accordance with Section 3(i), provided further that if under applicable law the
Issuers have more than one option as to the type or manner of making any such
filing, it will make the required filing or filings in the manner or of a type
that the Company reasonably expects will result in the earliest availability of
the Prospectus for effecting resales of Registrable Securities. Notwithstanding
anything contained herein to the contrary, the Issuers shall be under no
obligation to name any Holder that is not a Notice Holder as a selling security
holder in any Registration Statement or related Prospectus; provided, however,
that any Holder that becomes a Notice Holder pursuant to the provisions of
Section 2(d) of this Agreement (whether or not such Holder was a Notice Holder
at the time the Registration Statement was initially declared effective) shall
be named as a selling security holder in the Registration

                                       6

<PAGE>

Statement or related Prospectus subject to and in accordance with the
requirements of this Section 2(d).

                  (e)      The parties hereto agree that the Holders of
Registrable Securities will suffer damages, and that it would not be feasible to
ascertain the extent of such damages with precision, if (i) the Initial Shelf
Registration Statement has not been filed on or prior to the Filing Deadline
Date, (ii) the Initial Shelf Registration Statement has not been declared
effective under the Securities Act on or prior to the Effectiveness Deadline
Date, or (iii) the aggregate duration of Deferral Periods in any period exceeds
the number of days permitted in respect of such period pursuant to Section 3(i)
hereof (each of the events of a type described in any of the foregoing clauses
(i) through (iii) is individually referred to herein as an "Event," and the
Filing Deadline Date in the case of clause (i), the Effectiveness Deadline Date
in the case of clause (ii), and the date on which the aggregate duration of
Deferral Periods in any period exceeds the number of days permitted by Section
3(i) hereof in the case of clause (iii), being referred to herein as an "Event
Date"). Events shall be deemed to continue until the "Event Termination Date,"
which shall be the following dates with respect to the respective types of
Events: the date the Initial Shelf Registration Statement is filed in the case
of an Event of the type described in clause (i), the date the Initial Shelf
Registration Statement is declared effective under the Securities Act in the
case of an Event of the type described in clause (ii), and termination of the
Deferral Period that caused the limit on the aggregate duration of Deferral
Periods in a period set forth in Section 3(i) to be exceeded in the case of the
commencement of an Event of the type described in clause (iii).

                  Accordingly, commencing on (and including) any Event Date and
ending on (but excluding) the next date after an Event Termination Date (a
"Damages Accrual Period"), the Issuers agree to pay, as liquidated damages and
not as a penalty, an amount (the "Liquidated Damages Amount"), payable on the
Damages Payment Dates to Record Holders of then outstanding Notes that are
Registrable Securities or of then outstanding shares of Underlying Common Stock
issued upon conversion of Notes that are Registrable Securities, as the case may
be, accruing, for each portion of such Damages Accrual Period beginning on and
including a Damages Payment Date (or, in respect of the first time that the
Liquidation Damages Amount is to be paid to Holders on a Damages Payment Date as
a result of the occurrence of any particular Event, from the Event Date) and
ending on but excluding the first to occur of (A) the date of the end of the
Damages Accrual Period or (B) the next Damages Payment Date, at a rate per annum
equal to 0.25% for the first 90-day period from the Event Date, and thereafter
at a rate per annum equal to 0.50% of the aggregate Applicable Principal Amount
of such Notes, the aggregate Applicable Conversion Price of the shares of
Underlying Common Stock and the Restated Principal Amount of the Semiannual
Coupon Notes, as the case may be, in each case determined as of the Business Day
immediately preceding the next Damages Payment Date; provided that any
Liquidated Damages Amount accrued with respect to any Note or portion thereof
called for redemption on a redemption date or converted into Underlying Common
Stock on a conversion date or to Semiannual Coupon Notes prior to the Damages
Payment Date shall, in any such event, be paid instead to the Holder who
submitted such Note or portion thereof for redemption or conversion on the
applicable redemption date or conversion date, as the case may be, on such date
(or promptly following the conversion date, in the case of conversion).
Notwithstanding the foregoing, no Liquidated Damages Amounts shall accrue as to
any Registrable Security from and after the

                                       7

<PAGE>

earlier of (x) the date such security is no longer a Registrable Security and
(y) expiration of the Effectiveness Period. The rate of accrual of the
Liquidated Damages Amount with respect to any period shall not exceed the rate
provided for in this paragraph notwithstanding the occurrence of multiple
concurrent Events. Following the cure of all Events requiring the payment by the
Issuers of Liquidated Damages Amounts to the Holders of Registrable Securities
pursuant to this Section, the accrual of Liquidated Damages Amounts will cease
(without in any way limiting the effect of any subsequent Event requiring the
payment of the Liquidated Damages Amount by the Issuers).

                  The Trustee, subject to the applicable provisions of the
Indenture, shall be entitled, on behalf of Holders of Notes or Underlying Common
Stock, to seek any available remedy for the enforcement of this Agreement,
including for the payment of any Liquidated Damages Amount. Notwithstanding the
foregoing, the parties agree that the sole monetary damages payable for a
violation of the terms of this Agreement with respect to which liquidated
damages are expressly provided shall be such liquidated damages. Nothing shall
preclude a Notice Holder or Holder of Registrable Securities from pursuing or
obtaining specific performance or other equitable relief with respect to this
Agreement.

                  All of the Issuers' obligations set forth in this Section 2(e)
that are outstanding with respect to any Registrable Security at the time such
security ceases to be a Registrable Security shall survive until such time as
all such obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 8(k)).

                  The parties hereto agree that the liquidated damages provided
for in this Section 2(e) constitute a reasonable estimate of the damages that
may be incurred by Holders of Registrable Securities by reason of the failure of
the Shelf Registration Statement to be filed or declared effective or available
for effecting resales of Registrable Securities in accordance with the
provisions hereof.

                  SECTION 3. Registration Procedures. In connection with the
registration obligations of the Issuers under Section 2 hereof, during the
Effectiveness Period the Issuers shall:

                  (a)      Before filing any Registration Statement or
Prospectus or any amendments or supplements (other than supplements that do
nothing more substantive than name one or more Notice Holders as selling
security holders) thereto with the SEC, furnish to the Initial Purchaser copies
of all such documents proposed to be filed and use reasonable efforts to reflect
in each such document when so filed with the SEC such comments as the Initial
Purchaser reasonably shall propose within three (3) Business Days of the
delivery of such copies to the Initial Purchaser.

                  (b)      Subject to Section 3(i), prepare and file with the
SEC such amendments and post-effective amendments to each Registration Statement
as may be necessary to keep such Registration Statement continuously effective
for the applicable period specified in Section 2(a); cause the related
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 (or

                                       8

<PAGE>

any similar provisions then in force) under the Securities Act; and use
reasonable efforts to comply with the provisions of the Securities Act
applicable to it with respect to the disposition of all securities covered by
such Registration Statement during the Effectiveness Period in accordance with
the intended methods of disposition by the sellers thereof set forth in such
Registration Statement as so amended or such Prospectus as so supplemented.

                  (c)      As promptly as reasonably practicable give notice to
the Notice Holders and the Initial Purchaser (i) when any Prospectus, Prospectus
supplement, Registration Statement or post-effective amendment to a Registration
Statement has been filed with the SEC and, with respect to a Registration
Statement or any post-effective amendment, when the same has been declared
effective (provided, however, that the Issuers shall not be required by this
clause (i) to notify (A) the Initial Purchaser of the filing of a Prospectus
supplement that does nothing more substantive than name one or more Notice
Holders as selling security holders or (B) any Notice Holder of the filing of a
Prospectus supplement that does nothing more substantive than name one or more
other Notice Holders as selling security holders), (ii) of any request,
following the effectiveness of the Initial Shelf Registration Statement under
the Securities Act, by the SEC or any other federal or state governmental
authority for amendments or supplements to any Registration Statement or related
Prospectus or for additional information, (iii) of the issuance by the SEC or
any other federal or state governmental authority of any stop order or
injunction suspending or enjoining the use of any Prospectus or the
effectiveness of any Registration Statement or the initiation or threatening of
any proceedings for that purpose, (iv) of the receipt by the Issuers of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (v) of the occurrence of (but not the nature of or details concerning)
a Material Event (provided, however, that no notice by the Issuers shall be
required pursuant to this clause (v) in the event that the Issuers either
promptly file a Prospectus supplement to update the Prospectus or a Current
Report on Form 8-K or other appropriate Exchange Act report that is incorporated
by reference into the Registration Statement, which, in either case, contains
the requisite information with respect to such Material Event that results in
such Registration Statement no longer containing any untrue statement of
material fact or omitting to state a material fact necessary to make the
statements contained therein not misleading) and (vi) of the determination by
the Issuers that a post-effective amendment to a Registration Statement will be
filed with the SEC, which notice may, at the discretion of the Issuers (or as
required pursuant to Section 3(i)), state that it constitutes a Deferral Notice,
in which event the provisions of Section 3(i) shall apply.

                  (d)      Use reasonable efforts to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement or the
lifting of any suspension of the qualification (or exemption from qualification)
of any of the Registrable Securities for sale in any jurisdiction in which they
have been qualified for sale, in either case at the earliest possible moment or,
if any such order or suspension is made effective during any Deferral Period, at
the earliest possible moment after the expiration of such Deferral Period.

                  (e)      If reasonably requested by the Initial Purchaser or
any Notice Holder, as promptly as reasonably practicable incorporate in a
Prospectus supplement or post-effective amendment to a Registration Statement
such information as the Initial

                                       9

<PAGE>

Purchaser or such Notice Holder shall, on the basis of a written opinion of
nationally recognized counsel experienced in such matters, determine to be
required to be included therein by applicable law and make any required filings
of such Prospectus supplement or such post-effective amendment; provided that
the Issuers shall not be required to take any actions under this Section 3(e)
that are not, in the reasonable opinion of counsel for the Issuers, in
compliance with applicable law.

                  (f)      As promptly as reasonably practicable after the
filing of such documents with the SEC, furnish to each Notice Holder and the
Initial Purchaser, upon their request and without charge, at least one conformed
copy of the Registration Statement and any amendment thereto, including
financial statements, but excluding schedules, all documents incorporated or
deemed to be incorporated therein by reference and all exhibits (unless
requested in writing to the Issuers by such Notice Holder or the Initial
Purchaser, as the case may be).

                  (g)      During the Effectiveness Period, deliver to each
Notice Holder in connection with any sale of Registrable Securities pursuant to
a Registration Statement, without charge, as many copies of the Prospectus or
Prospectuses relating to such Registrable Securities (including each preliminary
prospectus) and any amendment or supplement thereto as such Notice Holder may
reasonably request; and the Issuers hereby consent (except during such periods
that a Deferral Notice is outstanding and has not been revoked) to the use of
such Prospectus or each amendment or supplement thereto by each Notice Holder in
connection with any offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto in the manner set forth
therein.

                  (h)      Subject to Section 3(i), prior to any public offering
of the Registrable Securities pursuant to the Shelf Registration Statement, use
reasonable efforts to register or qualify or cooperate with the Notice Holders
in connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any Notice Holder reasonably requests in writing (which request may be
included in the Notice and Questionnaire), it being agreed that no such
registration or qualification will be made unless so requested; prior to any
public offering of the Registrable Securities pursuant to the Shelf Registration
Statement, use reasonable efforts to keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
in connection with such Notice Holder's offer and sale of Registrable Securities
pursuant to such registration or qualification (or exemption therefrom) and do
any and all other acts or things reasonably necessary to enable the disposition
in such jurisdictions of such Registrable Securities in the manner set forth in
the relevant Registration Statement and the related Prospectus; provided that
the Issuers will not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it is not otherwise qualified or
(ii) take any action that would subject it to general service of process in
suits or to taxation in any such jurisdiction where it is not then so subject.

                  (i)      Upon (A) the issuance by the SEC of a stop order
suspending the effectiveness of the Shelf Registration Statement or the
initiation of proceedings with respect to the Shelf Registration Statement under
Section 8(d) or 8(e) of the Securities Act, (B) the

                                       10

<PAGE>

occurrence of any event or the existence of any fact (a "Material Event") as a
result of which any Registration Statement shall contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, or any Prospectus
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (including, in any such case, as a result of the non-availability of
financial statements), or (C) the occurrence or existence of any pending
corporate development that, in the discretion of the Issuers, makes it
appropriate to suspend the availability of the Shelf Registration Statement and
the related Prospectus, (i) in the case of clause (B) above, subject to the next
sentence, as promptly as practicable prepare and file a post-effective amendment
to such Registration Statement or a supplement to the related Prospectus or any
document incorporated therein by reference or file any other required document
that would be incorporated by reference into such Registration Statement and
Prospectus so that such Registration Statement does not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
such Prospectus does not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a
post-effective amendment to a Registration Statement, subject to the next
sentence, use reasonable efforts to cause it to be declared effective as
promptly as is reasonably practicable, and (ii) give notice to the Notice
Holders that the availability of the Shelf Registration Statement is suspended
(a "Deferral Notice") and, upon receipt of any Deferral Notice, each Notice
Holder agrees not to sell any Registrable Securities pursuant to the
Registration Statement until such Notice Holder's receipt of copies of the
supplemented or amended Prospectus provided for in clause (i) above, or until it
is advised in writing by the Issuers that the Prospectus may be used, and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus. The Issuers will use
reasonable efforts to ensure that the use of the Prospectus may be resumed (x)
in the case of clause (A) above, as promptly as is practicable, (y) in the case
of clause (B) above, as soon as, in the sole judgment of the Issuers, public
disclosure of such Material Event would not be prejudicial to or contrary to the
interests of the Issuers or, if necessary to avoid unreasonable burden or
expense, as soon as reasonably practicable thereafter and (z) in the case of
clause (C) above, as soon as, in the discretion of the Issuers, such suspension
is no longer appropriate. So long as the period during which the availability of
the Registration Statement and any Prospectus is suspended (the "Deferral
Period") does not exceed forty-five (45) days during any three (3) month period
or an aggregate of one hundred and twenty (120) days during any twelve (12)
month period, the Issuers shall not incur any obligation to pay liquidated
damages pursuant to Section 2(e).

                  (j)      If reasonably requested in writing in connection with
a disposition of Registrable Securities pursuant to a Registration Statement,
make reasonably available for inspection during normal business hours by a
representative for the Notice Holders of such Registrable Securities and any
broker-dealers, attorneys and accountants retained by such Notice Holders, all
relevant financial and other records, pertinent corporate documents and

                                       11

<PAGE>

properties of the Issuers and its subsidiaries, and cause the appropriate
executive officers, directors and designated employees of the Issuers and its
subsidiaries to make reasonably available for inspection during normal business
hours all relevant information reasonably requested by such representative for
the Notice Holders or any such broker-dealers, attorneys or accountants in
connection with such disposition, in each case as is customary for similar "due
diligence" examinations; provided, however, that such persons shall first agree
in writing with the Issuers that any information that is reasonably designated
by the Issuers in writing as confidential at the time of delivery of such
information shall be kept confidential by such persons and shall be used solely
for the purposes of exercising rights under this Agreement, unless (i)
disclosure of such information is required by court or administrative order or
is necessary to respond to inquiries of regulatory authorities, (ii) disclosure
of such information is required by law (including any disclosure requirements
pursuant to federal securities laws in connection with the filing of any
Registration Statement or the use of any Prospectus referred to in this
Agreement), (iii) such information becomes generally available to the public
other than as a result of a disclosure or failure to safeguard by any such
person or (iv) such information becomes available to any such person from a
source other than the Issuers and such source is not bound by a confidentiality
agreement or other obligation of confidentiality; and provided further that the
foregoing inspection and information gathering shall, to the greatest extent
possible, be coordinated on behalf of all the Notice Holders and the other
parties entitled thereto by the counsel referred to in Section 5.

                  (k)      Comply with all applicable rules and regulations of
the SEC and make generally available to its security holders earning statements
(which need not be audited) satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule promulgated under
the Securities Act) no later than the time period prescribed by the SEC for
filing a Form 10-Q after the end of any 12-month period (or the time period
prescribed by the SEC for filing a Form 10-K after the end of any 12-month
period if such period is a fiscal year) commencing on the first day of the first
fiscal quarter of the Issuers commencing after the effective date of a
Registration Statement, which statements shall cover said 12-month periods.

                  (l)      Cooperate with each Notice Holder to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities sold pursuant to a Registration Statement, and cause such Registrable
Securities to be in such denominations as are permitted by the Indenture and
registered in such names as such Notice Holder may request in writing at least
two Business Days prior to any sale of such Registrable Securities.

                  (m)      Provide a CUSIP number for all Registrable Securities
covered by each Registration Statement not later than the effective date of such
Registration Statement and provide the Trustee for the Notes and the transfer
agent for the Common Stock with certificates for the Registrable Securities that
are in a form eligible for deposit with The Depository Trust Company.

                  (n)      Make reasonable effort to provide such information as
is required for any filings required to be made with the National Association of
Securities Dealers, Inc.

                                       12

<PAGE>

                  (o)      Upon (i) the filing of the Initial Shelf Registration
Statement and (ii) the effectiveness of the Initial Shelf Registration
Statement, announce the same, in each case by release to Businesswire, Reuters
Economic Services, Bloomberg Business News or any other means of dissemination
reasonably expected to make such information known publicly.

                  (p)      Take all actions necessary, or reasonably requested
by the holders of a majority of the Registrable Securities being sold, in order
to expedite or facilitate disposition of such Registrable Securities; provided
that the Issuers shall not be required to take any action in connection with an
underwritten offering without their consent.

                  (q)      Cause the Indenture to be qualified under the TIA not
later than the effective date of any Registration Statement; and in connection
therewith, cooperate with the Trustee to effect such changes to the Indenture as
may be required for the Indenture to be so qualified in accordance with the
terms of the TIA and execute, and use reasonable efforts to cause the Trustee to
execute, all documents as may be required to effect such changes, and all other
forms and documents required to be filed with the SEC to enable the Indenture to
be so qualified in a timely manner.

                  SECTION 4. Holder's Obligations. Each Holder agrees, by
acquisition of the Registrable Securities, that no Holder of Registrable
Securities shall be entitled to sell any of such Registrable Securities pursuant
to a Registration Statement or to receive a Prospectus relating thereto, unless
such Holder has furnished the Issuers with a Notice and Questionnaire as
required pursuant to Section 2(d) hereof (including the information required to
be included in such Notice and Questionnaire) and the information set forth in
the next sentence. Each Notice Holder agrees promptly to furnish to the Issuers
all information required to be disclosed in order to make the information
previously furnished to the Issuers by such Notice Holder not misleading, any
other information regarding such Notice Holder and the distribution of such
Registrable Securities as may be required to be disclosed in the Registration
Statement under applicable law or pursuant to SEC comments and any information
otherwise required by the Issuers to comply with applicable law or regulations.
Each Holder further agrees, following termination of the Effectiveness Period,
to notify the Issuers, within 10 Business Days of a request, of the amount of
Registrable Securities sold pursuant to the Registration Statement and, in the
absence of a response, the Issuers may assume that all of the Holder's
Registrable Securities were so sold.

                  SECTION 5. Registration Expenses. The Issuers shall bear all
fees and expenses incurred in connection with the performance by the Company of
its obligations under Sections 2 and 3 of this Agreement whether or not any of
the Registration Statements are declared effective. Such fees and expenses shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (x) with respect to filings required to be
made with the National Association of Securities Dealers, Inc. and (y) of
compliance with federal and state securities or Blue Sky laws to the extent such
filings or compliance are required pursuant to this Agreement (including,
without limitation, reasonable fees and disbursements of the counsel specified
in the next sentence in connection with Blue Sky qualifications of the
Registrable Securities under the laws of such jurisdictions as the Notice
Holders of a majority of the Registrable Securities being sold pursuant to a

                                       13

<PAGE>

Registration Statement may designate)), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities
in a form eligible for deposit with The Depository Trust Company), (iii)
duplication expenses relating to copies of any Registration Statement or
Prospectus delivered to any Holders hereunder, (iv) fees and disbursements of
counsel for the Issuers in connection with the Shelf Registration Statement, and
(v) reasonable fees and disbursements of the Trustee and its counsel and of the
registrar and transfer agent for the Common Stock. In addition, the Issuers
shall bear or reimburse the Notice Holders for the fees and disbursements of one
firm of legal counsel for the Holders, which shall, upon the written consent of
the Initial Purchaser (which shall not be unreasonably withheld), be another
nationally recognized law firm experienced in securities law matters designated
by the Issuers. In addition, the Issuers shall pay the internal expenses of the
Issuers (including, without limitation, all salaries and expenses of officers
and employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange on which the same securities
of the Issuers are then listed and the fees and expenses of any person,
including special experts, retained by the Issuers.

                  SECTION 6. Indemnification; Contribution.

                  (a)      The Issuers agree to indemnify and hold harmless the
Initial Purchaser and each holder of Registrable Securities and each person, if
any, who controls the Initial Purchaser or any holder of Registrable Securities
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, as follows:

                  (i)      against any and all loss, liability, claim, damage
         and expense whatsoever, as incurred, arising out of any untrue
         statement or alleged untrue statement of a material fact contained in
         the Registration Statement (or any amendment thereto), or the omission
         or alleged omission therefrom of a material fact required to be stated
         therein or necessary in order to make the statements therein, in light
         of the circumstances under which they were made, not misleading or
         arising out of any untrue statement or alleged untrue statement of a
         material fact included in any preliminary prospectus or the Prospectus
         (or any amendment or supplement thereto), or the omission or alleged
         omission therefrom of a material fact required to be stated therein or
         necessary in order to make the statements therein, in the light of the
         circumstances under which they were made, not misleading;

                  (ii)     against any and all loss, liability, claim, damage
         and expense whatsoever, as incurred, to the extent of the aggregate
         amount paid in settlement of any litigation, or any investigation or
         proceeding by any governmental agency or body, commenced or threatened,
         or of any claim whatsoever based upon any such untrue statement or
         omission, or any such alleged untrue statement or omission, provided
         that (subject to Section 6(d) below) any such settlement is effected
         with the prior written consent of the Company; and

                  (iii)    subject to Section 6(c) below, against any and all
         expense whatsoever, as incurred (including the fees and disbursements
         of counsel), reasonably incurred in investigating, preparing or
         defending against any litigation, or any investigation or

                                       14

<PAGE>

         proceeding by any governmental agency or body, commenced or threatened,
         or any claim whatsoever based upon any such untrue statement or
         omission, or any such alleged untrue statement or omission, to the
         extent that any such expense is not paid under (i) or (ii) above;

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Issuers by or
on behalf of the Initial Purchaser, such holder of Registrable Securities (which
also acknowledges the indemnity provisions herein) or any person, if any, who
controls the Initial Purchaser or any such holder of Registrable Securities
expressly for use in the Registration Statement (or any amendment thereto), or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); provided further that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense (1) arising from an offer or sale of
Registrable Securities occurring during a Deferral Period, if a Deferral Notice
was given to such Notice Holder in accordance with Section 8(c), or (2) if the
Holder fails to deliver at or prior to the written confirmation of sale, the
most recent Prospectus, as amended or supplemented, and such Prospectus, as
amended or supplemented, would have corrected such untrue statement or omission
or alleged untrue statement or omission of a material fact and the delivery
thereof was required by law.

                  (b)      In connection with any Shelf Registration in which a
holder, including, without limitation, the Initial Purchaser, of Registrable
Securities is participating, in furnishing information relating to such holder
of Registrable Securities to the Issuers in writing expressly for use in such
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto, the holders of such Registrable Securities
agree, severally and not jointly, to indemnify and hold harmless the Initial
Purchaser and each person, if any, who controls the Initial Purchaser within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act and the Issuers, and each person, if any, who controls the Issuers within
the meaning of either such Section, against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Issuers by or on behalf of
such holder of Registrable Securities (which also acknowledges the indemnity
provisions herein) or any person, if any, who controls any such holder of
Registrable Securities expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).

                  The Initial Purchaser agrees to indemnify and hold harmless
the Issuers, the holders of Registrable Securities, and each person, if any, who
controls the Issuers or any holder of Registrable Securities within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred,

                                       15

<PAGE>

but only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Issuers by or on behalf of the Initial Purchaser expressly for
use in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).

                  (c)      Each indemnified party shall give notice as promptly
as reasonably practicable to each indemnifying party of any action or proceeding
commenced against it in respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially prejudiced
as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of these indemnity provisions. The
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain a
separate firm as its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for (A) the reasonable fees and expenses of
more than one firm (in addition to any local counsel) for the Initial Purchaser,
Holders of Registrable Securities, and all persons, if any, who control the
Initial Purchaser or Holders of Registrable Securities within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act or (B)
the reasonable fees and expenses of more than one firm (in addition to any local
counsel) for the Issuers, their directors, and each person, if any, who controls
the Issuers within the meaning of either such Section, and that all such
reasonable fees and expenses shall be reimbursed as they are incurred. In the
event a separate firm is retained for the Initial Purchaser, Holders of
Registrable Securities, and control persons of the Initial Purchaser and Holders
of Registrable Securities, such firm shall be designated in writing by the
Initial Purchaser. In the event a separate firm is retained for the Issuers, and
such directors, officers and control persons of the Issuers, such firm shall be
designated in writing by the Issuers. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not

                                       16

<PAGE>

include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.

                  (d)      If at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by Section 6(a)(ii) effected without
its written consent if (i) such settlement is entered into more than 60 days
after receipt by such indemnifying party of aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 45 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement; provided that
an indemnifying party shall not be liable for any such settlement effected
without its consent if such indemnifying party (1) reimburses such indemnified
party in accordance with such request to the extent it considers such request to
be reasonable and (2) provides written notice to the indemnified party
describing any unpaid balance it believes is unreasonable and the reasons
therefor, in each case prior to the date of such settlement.

                  (e)      If the indemnification to which an indemnified party
is entitled under this Section 6 is for any reason unavailable to or
insufficient although applicable in accordance with its terms to hold harmless
an indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party or parties
on the one hand and of the indemnified party on the other hand in connection
with the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.

                  The relative fault of the Issuers on the one hand and the
holders of the Registrable Securities or the Initial Purchaser on the other hand
shall be determined by reference to, among other things, whether any such untrue
or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information supplied by the Issuers or by
the holder of the Registrable Securities or the Initial Purchaser and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.

                  The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(e) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 6(e). The
aggregate amount of losses, liabilities, claims, damages, and expenses incurred
by an indemnified party and referred to above in this Section 6(e) shall be
deemed to include any out-of-pocket legal or other expenses reasonably incurred
by such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.

                                       17

<PAGE>

                  Notwithstanding the provisions of this Section 6, neither the
holder of any Registrable Securities nor the Initial Purchaser shall be required
to indemnify or contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such holder of Registrable
Securities or by the Initial Purchaser, as the case may be, exceeds the amount
of any damages that such holder of Registrable Securities or the Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.

                  No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

                  For purposes of this Section 6(e), each person, if any, who
controls the Initial Purchaser or any holder of Registrable Securities within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as the Initial Purchaser or such
holder, and each person, if any, who controls the Issuers within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Issuers.

                  SECTION 7. Information Requirements. The Issuers covenant
that, if at any time before the end of the Effectiveness Period the Issuers are
not subject to the reporting requirements of the Exchange Act, they will
cooperate with any Holder of Registrable Securities and take such further
reasonable action as any Holder of Registrable Securities may reasonably request
in writing (including, without limitation, making such reasonable
representations as any such Holder may reasonably request), all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitations of Rule 144
and Rule 144A under the Securities Act and customarily taken in connection with
sales pursuant to such exemptions. Upon the written request of any Holder of
Registrable Securities, the Issuers shall deliver to such Holder a written
statement as to whether it has complied with such filing requirements, unless
such a statement has been included in the Issuers' most recent report required
to be filed and filed pursuant to Section 13 or Section 15(d) of the Exchange
Act. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Issuers to register any of its securities under any section of the
Exchange Act.

                  SECTION 8. Miscellaneous

                  (a)      No Conflicting Agreements. The Issuers are not, as of
the date hereof, a party to, nor shall it, on or after the date of this
Agreement, enter into, any agreement with respect to the Issuers' securities
that conflicts with the rights granted to the Holders of Registrable Securities
in this Agreement. The Issuers represent and warrant that the rights granted to
the Holders of Registrable Securities hereunder do not in any way conflict with
the rights granted to the holders of the Issuers' securities under any other
agreements.

                  (b)      Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless

                                       18

<PAGE>

the Issuers have obtained the written consent of Holders of a majority of the
then outstanding Underlying Common Stock constituting Registrable Securities
(with Holders of Notes or Semiannual Coupon Notes deemed to be the Holders, for
purposes of this Section, of the number of outstanding shares of Underlying
Common Stock into which such Notes or Semiannual Coupon Notes are or would be
convertible or exchangeable as of the date on which such consent is requested).
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders of Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other Holders of Registrable Securities may be given by Holders of at
least a majority of the Registrable Securities being sold by such Holders
pursuant to such Registration Statement; provided that the provisions of this
sentence may not be amended, modified, or supplemented except in accordance with
the provisions of the immediately preceding sentence. Each Holder of Registrable
Securities outstanding at the time of any such amendment, modification,
supplement, waiver or consent or thereafter shall be bound by any such
amendment, modification, supplement, waiver or consent effected pursuant to this
Section 8(b), whether or not any notice, writing or marking indicating such
amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.

                  (c)      Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand delivery,
by telecopier, by courier guaranteeing overnight delivery or by first-class
mail, return receipt requested, and shall be deemed given (i) when made, if made
by hand delivery, (ii) upon confirmation, if made by telecopier, (iii) one (1)
Business Day after being deposited with such courier, if made by overnight
courier, or (iv) on the date indicated on the notice of receipt, if made by
first-class mail, to the parties as follows:

                  i.       if to a Holder of Registrable Securities that is not
         a Notice Holder, at the address for such Holder then appearing in the
         Registrar (as defined in the Indenture);

                  ii.      if to a Notice Holder, at the most current address
         given by such Holder to the Company in a Notice and Questionnaire or
         any amendment thereto;

                  iii.     if to the Issuers, to:

                           Mesa Air Group, Inc.
                           410 North 44th Street, Suite 700
                           Phoenix, Arizona 85008
                           Telephone No. (602) 685-4000
                           Facsimile No. (602) 685-4352
                           Attention: General Counsel

                  with a copy to:

                           Squire, Sanders & Dempsey L.L.P.

                                       19

<PAGE>

                           Two Renaissance Square
                           Suite 2700
                           40 North Central Avenue
                           Phoeniz, Arizona  85004
                           Telephone No. (602) 528-4000
                           Facsimile No. (602) 253-8129
                           Attention: Gregory R. Hall, Esq.

                  and

                  iv.      if to the Initial Purchaser, to:

                           Merrill Lynch & Co.,
                           4 World Financial Center, North Tower
                           New York, New York  10080
                           Attention: Syndicate Department
                           Telecopier: (212) 738-1069

                  with a copy to:

                           Cahill Gordon & Reindel LLP
                           80 Pine Street
                           New York, New York  10005
                           Attention: Stephen A. Greene, Esq.
                           Telecopier: (212) 269-5420

or to such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance herewith.

                  (d)      Approval of Holders. Whenever the consent or approval
of Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Issuers or their Affiliates (other
than the Initial Purchaser or subsequent Holders of Registrable Securities if
such subsequent Holders are deemed to be such affiliates solely by reason of
their holdings of such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.

                  (e)      Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each of the
parties hereto and, without requiring any express assignment, shall inure to the
benefit of and be binding upon each Holder of any Registrable Securities.

                  (f)      Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be original and all of which taken
together shall constitute one and the same agreement.

                                       20

<PAGE>

                  (g)      Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

                  (h)      Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

                  (i)      Severability. If any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated thereby, and the parties hereto
shall use their best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction, it being intended that all of the rights and
privileges of the parties hereto shall be enforceable to the fullest extent
permitted by law.

                  (j)      Entire Agreement. This Agreement is intended by the
parties hereto as a final expression of their agreement and is intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and the
registration rights granted by the Issuers with respect to the Registrable
Securities. Except as provided in the Purchase Agreement, there are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein, with respect to the registration rights granted by the
Issuers with respect to the Registrable Securities. This Agreement supersedes
all prior agreements and undertakings among the parties hereto with respect to
such registration rights.

                  (k)      Termination. This Agreement and the obligations of
the parties hereunder shall terminate upon the end of the Effectiveness Period,
except for any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for liquidated damages under Section
2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.

                                       21

<PAGE>

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

                                          Very truly yours,

                                          MESA AIR GROUP, INC.

                                          By: __________________________________
                                              Name:
                                              Title:

                                          MESA AIRLINES, INC.
                                          FREEDOM AIRLINES, INC.
                                          AIR MIDWEST, INC.
                                          MPD, INC.

                                          By: __________________________________
                                              Name:
                                              Title:

                                          REGIONAL AIRCRAFT SERVICES, INC.
                                          MESA AIR GROUP--AIRCRAFT INVENTORY
                                           MANAGEMENT, LLC
                                          RITZ HOTEL MANAGEMENT CORP.

                                          By: __________________________________
                                              Name:
                                              Title:

<PAGE>

Accepted as of the date first above written:

MERRILL LYNCH, PIERCE, FENNER & SMITH
     INCORPORATED

By: _____________________________
    Name:
    Title:

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5
<SEQUENCE>4
<FILENAME>p69133exv5.txt
<DESCRIPTION>EX-5
<TEXT>
<PAGE>

                                                                     Exhibit 5.1

                  [Squire, Sanders & Dempsey L.L.P. Letterhead]

May 7, 2004

Mesa Air Group, Inc.
410 North 44th Street, Suite 700
Phoenix, Arizona 85008

      RE:   $171,409,000 AGGREGATE PRINCIPAL AMOUNT AT MATURITY OF SENIOR
            CONVERTIBLE NOTES DUE 2024

Ladies and Gentlemen:

         In connection with the registration of $171,409,000 aggregate principal
amount at maturity of Senior Convertible Notes due 2024 (the "Notes") and the
shares of common stock initially issuable upon conversion of the Notes (the
"Common Stock" and, together with the Notes, the "Securities") by Mesa Air
Group, Inc., a Nevada corporation (the "Company"), and the guarantees of the
Notes (the "Guarantees") by Mesa Airlines, Inc., Freedom Airlines, Inc., Air
Midwest, Inc., MPD, Inc., Regional Aircraft Services, Inc., Mesa Air Group -
Aircraft Management Inventory, LLC and Ritz Hotel Management Corp. (the
"Guarantors"), under the Securities Act of 1933, as amended (the "Act"), on Form
S-3 filed with the Securities and Exchange Commission on May 7, 2004, as
amended, (the "Registration Statement"), you have requested our opinion with
respect to the matters set forth below.

         In our capacity as your special counsel in connection with such
registration, we are familiar with the proceedings taken and proposed to be
taken by the Company and the Guarantors in connection with the authorization and
issuance of the Securities and the Guarantees, respectively, and for the
purposes of this opinion, have assumed such proceedings will be timely completed
in the manner presently proposed. In addition, we have made such legal and
factual examinations and inquiries, including an examination of originals or
copies certified or otherwise identified to our satisfaction of such documents,
corporate records and instruments, as we have deemed necessary or appropriate
for purposes of this opinion.

         In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity to authentic original documents of all documents submitted to us as
copies.

         We are opining herein as to the effect on the subject transaction only
of the internal laws of the State of New York and the General Corporation Law of
the State of Nevada, California, Kansas and Arizona and we express no opinion
with respect to the applicability thereto, or the effect thereon, of the laws of
any other jurisdiction or, in the case of Nevada, California, Kansas and Arizona
any other laws, or as to any matters of municipal law or the laws of any local
agencies within any state.

<PAGE>

Mesa Air Group, Inc.
May 7, 2004
Page 2

         Capitalized terms used herein without definition have the meanings
ascribed to them in the Registration Statement.

         Subject to the foregoing and the other matters set forth herein, it is
our opinion that as of the date hereof:

         1.       The Notes have been duly authorized by all necessary corporate
action of the Company, and constitute legally valid and binding obligations of
the Company, enforceable against the Company in accordance with their terms.

         2.       Each of the Guarantees has been duly authorized by all
necessary corporate or partnership action, as applicable, of the respective
Guarantor, and constitutes the legally valid and binding obligation of the
respective Guarantor, enforceable against such Guarantor in accordance with its
terms.

         3.       The shares of Common Stock issuable upon conversion of the
Notes have been duly authorized, and when issued and delivered upon conversion
of the Notes in accordance with the terms of the Notes and the Indenture, will
be validly issued, fully paid and nonassessable.

         The opinions rendered in paragraphs 1 and 2 relating to the
enforceability of the Notes are subject to the following exceptions, limitations
and qualifications: (i) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to or
affecting the rights and remedies of creditors and (ii) the effect of general
principles of equity, whether enforcement is considered in a proceeding in
equity or law, and the discretion of the court before which any proceeding
therefor may be brought.

         In addition, we express no opinion with respect to whether acceleration
of the Notes may affect the collectibility of that portion of the stated
principal amount thereof that might be determined to constitute unearned
interest thereon.

         We have not been requested to express, and with your knowledge and
consent, do not render any opinion as to the applicability to the obligations of
the Company under the Indenture, the Notes and the Guarantees under the
Indenture or the Guarantees of Section 548 of the United States Bankruptcy Code
or applicable state law (including, without limitation, Article 10 of the New
York Debtor and Creditor Law) relating to fraudulent transfer and obligations.

         To the extent that the obligations of the Company and the Guarantors
under the Indenture may be dependent upon such matters, we assume for purposes
of this opinion that the Trustee is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization; that the Trustee is
duly qualified to engage in the activities contemplated by the Indenture; that
the Indenture has been duly authorized, executed and delivered by the Trustee
and constitutes the legally valid, binding and enforceable obligation of the
Trustee enforceable against the Trustee in accordance with its terms; that the
Trustee is in compliance, generally and with respect to acting as a trustee
under the Indenture, with all applicable laws and regulations;

<PAGE>

Mesa Air Group, Inc.
May 7, 2004
Page 2

and that the Trustee has the requisite organizational and legal power and
authority to perform its obligations under the Indenture.

         We consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to our firm contained under the
heading "Legal Matters."

                                           Sincerely,

                                           SQUIRE, SANDERS & DEMPSEY L.L.P.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>5
<FILENAME>p69133exv12.txt
<DESCRIPTION>EX-12
<TEXT>
<PAGE>
                                                                               .
                                                                               .
                                                                               .

                                                                      Exhibit 12

                COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
            (IN THOUSANDS EXCEPT RATIO OF EARNINGS TO FIXED CHARGES)

<TABLE>
<CAPTION>

                                                                                                     THREE MONTHS     THREE MONTHS
                                                                  YEAR ENDED SEPTEMBER 30,           ENDED DECEMBER   ENDED DECEMBER
             Fixed Charge Ratio                    1999      2000      2001       2002      2003     31, 2002         31, 2003
- ---------------------------------------------     --------------------------------------------------------------------------------
<S>                                               <C>       <C>       <C>        <C>       <C>       <C>              <C>
COMPUTATION OF EARNINGS
Pretax income before Minority interest            (12,815)   27,683   (71,596)   (16,405)   41,020       (1,553)          7,033
Plus Fixed charges                                 34,714    37,514    44,410     44,102    55,990       12,624          19,814
Plus Amortization of capitalized interest                                 153        221       265           66              68
Less capitalized interest                                      (900)   (1,100)    (1,208)     (836)        (171)           (278)
                                                  -------   -------   -------    -------   -------      -------          -------
TOTAL                                              21,899    64,297   (28,133)    26,710    96,439       10,966          26,637

COMPUTATION OF FIXED CHARGES
Interest Expense                                   19,096    15,721    14,419      6,941    11,541        2,228           5,762
Capitalized interest                                   --       900     1,100      1,208       836          171             278
Amortization of fleet origination fees                 --        --       103        123       123           21              --
Amortization of debt issuance costs                    --        --        --         --        47           --              41
Estimate of interest on rent expense               15,618    20,893    28,788     35,830    43,443       10,204          13,733
                                                  -------   -------   -------    -------   -------      -------          -------
Total fixed charges                                34,714    37,514    44,410     44,102    55,990       12,624          19,814

Ratio (fixed charges/earnings an fixed charges)
 / Deficiency                                     (12,815)     1.71   (72,543)   (17,392)     1.72       (1,658)           1.34
</TABLE>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>6
<FILENAME>p69133exv23w2.txt
<DESCRIPTION>EX-23.2
<TEXT>
<PAGE>

                                                                    Exhibit 23.1

                          INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Registration Statement of
Mesa Air Group, Inc. on Form S-3 of our report dated December 24, 2003, May 7,
2004 as to Note 23 (which expresses an unqualified opinion and includes an
explanatory paragraph relating to the Company's significant code-share
agreements and an explanatory paragraph relating to the restatement discussed
in Note 23), appearing in the Annual Report on Amendment No. 2 of Form 10-K/A of
Mesa Air Group, Inc. for the year ended September 30, 2003 and to reference to
us under the heading "Experts" in the Prospectus, which is a part of this
Registration Statement.

DELOITTE & TOUCHE LLP

Phoenix, Arizona
May 7, 2004

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25
<SEQUENCE>7
<FILENAME>p69133exv25.txt
<DESCRIPTION>EX-25
<TEXT>
<PAGE>

                                                                      EXHIBIT 25

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                           --------------------------

                                    FORM T-1

                         STATEMENT OF ELIGIBILITY UNDER
                      THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

               Check if an Application to Determine Eligibility of
                     a Trustee Pursuant to Section 305(b)(2)

             -------------------------------------------------------

                      U.S. BANK NATIONAL ASSOCIATION
              (Exact name of Trustee as specified in its charter)

                                   31-0841368
                       I.R.S. Employer Identification No.

           180 East Fifth Street
             St. Paul, Minnesota                                55101
    --------------------------------------                    --------
   (Address of principal executive offices)                  (Zip Code)

                                 DONALD E. SMITH
                         U.S. Bank National Association
                               One Federal Street
                                Boston, MA 02110
                                 (617) 603-6561

            (Name, address and telephone number of agent for service)

                              MESA AIR GROUP, INC.
                     (Issuer with respect to the Securities)

                   NEVADA                                 85-0302351
  -----------------------------------------------      ------------------
 (State or other jurisdiction of incorporation or     (I.R.S. Employer
                organization)                          Identification No.)

         410 NORTH 44TH ST.-SUITE 400, PHOENIX, AZ           85008
         -----------------------------------------          --------
         (Address of Principal Executive Offices)          (Zip Code)

                        SENIOR CONVERTIBLE NOTES DUE 2024
                       (TITLE OF THE INDENTURE SECURITIES)

================================================================================

<PAGE>

                                    FORM T-1

ITEM 1. GENERAL INFORMATION. Furnish the following information as to the
        Trustee.

         a)       Name and address of each examining or supervising authority to
                  which it is subject.
                           Comptroller of the Currency
                           Washington, D.C.

         b)       Whether it is authorized to exercise corporate trust powers.
                  Yes

ITEM 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the
        Trustee, describe each such affiliation.
                 None

ITEMS 3-15  Items 3-15 are not applicable because to the best of the Trustee's
            knowledge, the obligor is not in default under any Indenture for
            which the Trustee acts as Trustee.

ITEM 16.    LIST OF EXHIBITS: List below all exhibits filed as a part of
            this statement of eligibility and qualification.

            1.    A copy of the Articles of Association of the Trustee.*

            2.    A copy of the certificate of authority of the Trustee to
                  commence business.*

            3.    A copy of the certificate of authority of the Trustee to
                  exercise corporate trust powers.*

            4.    A copy of the existing bylaws of the Trustee.*

            5.    A copy of each Indenture referred to in Item 4. Not
                  applicable.

            6.    The consent of the Trustee required by Section 321(b) of the
                  Trust Indenture Act of 1939, attached as Exhibit 6.

            7.    Report of Condition of the Trustee as of DECEMBER 31, 2003,
                  published pursuant to law or the requirements of its
                  supervising or examining authority, Attached as Exhibit 7.

            8.    A copy of any order pursuant to which the foreign trustee is
                  authorized to act as sole trustee under indentures qualified
                  or to be qualified under the Act: Not applicable.

       * Incorporated by reference to Registration Number 333-67188 dated
November 16, 2001.

                                       2

<PAGE>

                                      NOTE

         The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligors, or affiliates, are based
upon information furnished to the Trustee by the obligors. While the Trustee has
no reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.

                                    SIGNATURE

         Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the Trustee, U.S. BANK NATIONAL ASSOCIATION, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Boston,
Commonwealth of Massachusetts on the 31ST DAY OF MARCH 2004.

                                            U.S. BANK NATIONAL ASSOCIATION

                                            By: /s/DONALD E. SMITH
                                                ----------------------------
                                                DONALD E. SMITH
                                                VICE PRESIDENT

By: /s/ SUSAN FREEDMAN
    -----------------------------
    SUSAN FREEDMAN
    VICE PRESIDENT

                                       3

<PAGE>

                                    EXHIBIT 6

                                     CONSENT

         In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned, U.S. BANK NATIONAL ASSOCIATION hereby consents that reports of
examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.

DATED: MARCH 31, 2004

                                       U.S. BANK NATIONAL ASSOCIATION

                                       By: /s/ DONALD E. SMITH
                                           -------------------------------------
                                           DONALD E. SMITH
                                           VICE PRESIDENT

By: /s/ SUSAN FREEDMAN
    -------------------------------
    SUSAN FREEDMAN
    VICE PRESIDENT

                                       4

<PAGE>

                                    EXHIBIT 7

                         U.S. BANK NATIONAL ASSOCIATION
                        STATEMENT OF FINANCIAL CONDITION
                                AS OF 12/31/2003

                                    ($000'S)

<TABLE>
<CAPTION>
                                                                      12/31/2003
                                                                      ----------
<S>                                                                 <C>
ASSETS
     Cash and Due From Depository Institutions                      $  8,631,361
     Federal Reserve Stock                                                     0
     Securities                                                       42,963,396
     Federal Funds                                                     2,585,353
     Loans & Lease Financing Receivables                             114,727,656
     Fixed Assets                                                      1,840,487
     Intangible Assets                                                 9,545,158
     Other Assets                                                      8,865,639
                                                                    ------------
         TOTAL ASSETS                                               $189,159,050

LIABILITIES
     Deposits                                                       $128,249,183
     Fed Funds                                                         8,683,536
     Treasury Demand Notes                                                     0
     Trading Liabilities                                                 213,447
     Other Borrowed Money                                             21,664,023
     Acceptances                                                         123,996
     Subordinated Notes and Debentures                                 5,953,524
     Other Liabilities                                                 5,173,011
                                                                    ------------
     TOTAL LIABILITIES                                              $170,060,720

EQUITY
     Minority Interest in Subsidiaries                              $  1,002,595
     Common and Preferred Stock                                           18,200
     Surplus                                                          11,677,397
     Undivided Profits                                                 6,400,138
                                                                    ------------
         TOTAL EQUITY CAPITAL                                       $ 19,098,330

TOTAL LIABILITIES AND EQUITY CAPITAL                                $189,159,050
</TABLE>

- ---------------------
To the best of the undersigned's determination, as of the date hereof, the above
financial information is true and correct.

U.S. BANK NATIONAL ASSOCIATION

                                       5

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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