PARTIAL TERMINATION,
CONSENT AND CASH COLLATERAL AGREEMENT  



        THIS
PARTIAL TERMINATION, CONSENT AND CASH COLLATERAL AGREEMENT, dated as of October 21, 2003
(the “Agreement”), is by and among MIDWEST EXPRESS HOLDINGS, INC. (the
“Borrower”), the lenders party hereto and U.S. BANK NATIONAL ASSOCIATION,
as Agent (the “Agent”). 



RECITALS  



        WHEREAS,
the Borrower is party to that certain Senior Secured Revolving Credit Agreement, dated as
of August 31, 2001, by and among the Borrower, the lenders party thereto (each, a “Lender” and
collectively, the “Lenders”) and the Agent, as amended by the First
Amendment to Senior Secured Revolving Credit Agreement dated as of January 9, 2002, the
Second Amendment to Senior Secured Revolving Credit Agreement dated as of June 28, 2002,
the Third Amendment to Senior Secured Revolving Credit Agreement dated as of August 29,
2002, the Fourth Amendment to Senior Secured Revolving Credit Agreement dated as of
September 30, 2002, the Fifth Amendment to Senior Secured Revolving Credit Agreement
dated as of October 7, 2002, the Sixth Amendment to Senior Secured Revolving Credit
Agreement and Limited Waiver dated as of February 18, 2003, and the Seventh Amendment to
Senior Secured Revolving Credit Agreement and Limited Waiver dated as of August 29, 2003
(as so amended, the “Credit Agreement”); and  




        WHEREAS,
the Borrower wishes to terminate the Credit Agreement except for certain provisions
thereof as set forth below and obtain a release of the Agent’s liens on all of the
Collateral except funds delivered by the Borrower to the Agent pursuant to Section 2.2(a)
of the Credit Agreement and Article III of this Agreement (the “Cash Collateral”);
and  




        WHEREAS,
to induce the Lenders and the Agent to enter into this Agreement the Borrower has made
certain material representations and promises to the Lenders and the Agent as set forth
herein; and  




        WHEREAS,
the Lenders and the Agent are willing to enter into this Agreement in reliance upon the
material representations and promises made by the Borrower to the Lenders and the Agent,
but only under the terms and conditions set forth herein.  




        NOW,
THEREFORE, in consideration of the foregoing recitals and the covenants, conditions and
agreements set forth herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:  





ARTICLE I 



DEFINITIONS AND
INCORPORATION OF RECITALS 



        1.1     
     Definitions.  Capitalized  terms used in this  Agreement  but not defined  herein
 shall have the definitions assigned in the Credit Agreement. 












        1.2     
     Recitals.  Each of the Recitals set forth above is  confirmed  and adopted by the
parties  hereto as if set forth herein. 




ARTICLE II 



PARTIAL TERMINATION
OF CREDIT AGREEMENT 



        2.1     
Partial Termination of Credit Agreement. Except as set forth in Section 2.2 of
this Agreement, the Credit Agreement is terminated as of the date of this Agreement and
each provision thereof is hereby cancelled and shall be of no further force or effect.  




        2.2     
Surviving Credit Agreement Provisions. Notwithstanding anything to the contrary in
this Agreement, the Credit Agreement, any other Credit Document or any other agreement or
document, the following provisions of the Credit Agreement are not terminated and shall
continue in full force and effect: Sections 1.1, 1.2, 2.2(c), 2.2(d), 2.2(e), 2.4, 2.6,
3.4(a), 3.4(d), 3.5, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 6.1, 6.2, 9.1 through 9.10,
10.1, 10.2, 10.3, 10.5, 10.6, 10.7, 10.8, and 10.10 through 10.19.  




ARTICLE III 



CASH COLLATERAL 



        3.1     
Cash Collateral. Subject to Section 3.2 of this Agreement, the Borrower shall
deliver to the Agent, prior to or contemporaneously with the execution of this Agreement,
immediately available funds in an amount equal to $15,832,341.95, which funds shall be
held by the Agent as Cash Collateral in the non-interest bearing account number
82380232617 to secure the Borrower’s obligations under the Credit Agreement and the
LOC Documents, after giving effect to this Agreement, including without limitation under
Sections 2.2(d) and 10.5 of the Credit Agreement. From time to time upon request of the
Borrower, the Agent shall return to the Borrower that portion of the Cash Collateral that
exceeds an amount equal to 102% of the LOC Obligations then remaining.  




        3.2     
Adjusted Cash Collateral Requirement. Upon the effectiveness of all of the
following agreements: (a) that certain Standby Reimbursement Agreement between Milwaukee
County, Wisconsin and U.S. Bank National Association, dated as of October 1, 2003, (b)
that certain Amended and Restated Reimbursement Agreement between Midwest Airlines, Inc.
and U.S. Bank National Association, dated as of October 1, 2003, and (c) that certain
Amended and Restated Reimbursement Agreement between Skyway Airlines, Inc. and U.S. Bank
National Association, dated as of October 1, 2003; then (i) the amount of the
funds required initially to be delivered to the Agent as Cash Collateral pursuant to
Section 3.1. of this Agreement shall be reduced to $1,118,531.87 or, if the Borrower’s
initial delivery of funds to the Agent shall have occurred prior to the effectiveness of
all of the agreements described in clauses (a), (b) and (c) of this paragraph, the Agent
shall, without request by the Borrower or consent of the Required Lenders, return to the
Borrower that portion of the Cash Collateral that exceeds an amount equal to 102% of the
LOC Obligations then remaining, after giving effect to the provision in clause (ii) of
this paragraph, and (ii) notwithstanding anything to the contrary in the Credit
Agreement, any other Credit Document or any other agreement or document, including
without limitation Sections 2.2(c), (d) and (e) of the Credit Agreement, none of the
Lenders other than U.S. Bank National Association shall be deemed thereafter to have
purchased a risk participation in the Letters of Credit set forth on Schedule 3.2(i)
attached hereto (the “IRB LOCs”) or to have any reimbursement or
mandatory loan funding obligations with respect to the IRB LOCs, and the term “LOC
Obligations” as used in clause (i) of this paragraph shall mean LOC Obligations
arising only with respect to the Letters of Credit set forth on Schedule 3.2(ii) attached
hereto.  












ARTICLE IV 



MISCELLANEOUS 



        4.1     
     Representations  and  Warranties.  The Borrower  hereby  represents and warrants to
the Agent and the Lenders that: 




	 	        (a)       Authorization;
Enforceability. The making, execution and delivery of this           Agreement, and
performance of and compliance with the terms of the Credit           Agreement, as
amended, have been duly authorized by all necessary corporate           action by the
Borrower. This Agreement is the valid and binding obligation of           the Borrower,
enforceable against the Borrower in accordance with its terms.  







	 	        (b)       Absence
of Conflicting Obligations. The making, execution and delivery of           this
Agreement, and performance of and compliance with the terms of the Credit
          Agreement, as amended, do not violate any presently existing provision of law
or           the articles of incorporation or bylaws of the Borrower or any agreement to
          which the Borrower is a party or by which it is bound.  







        4.2     
Release of Collateral. Upon delivery of the Cash Collateral to the Agent pursuant
to Section 3.1 of this Agreement, (a) the Lenders consent to the release of their Liens
on the Collateral other than the Cash Collateral, (b) the Subsidiary Security Agreement,
the Aircraft Security Agreement, the Parent Pledge Agreement, and the Subsidiary Pledge
Agreement shall be automatically terminated and of no further force and effect, and (c)
the Lenders authorize and direct the Agent to execute and deliver promptly all such
documents and take promptly all such actions as the Borrower may reasonably request to
accomplish or facilitate the release of their Liens in the Collateral other than the Cash
Collateral, including without limitation the execution and delivery, pursuant to the
Borrower’s reasonable instructions, of such satisfactions, terminations and releases
of liens, or such authorizations regarding the same, as the Borrower may reasonably
request.  




        4.3     
Survival. All agreements, representations and warranties made in this Agreement or
in any documents delivered pursuant to this Agreement shall survive the execution of this
Agreement and the delivery of any such document.  




        4.4     
     Governing  Law. This Agreement  shall be governed by the laws of the State of
Wisconsin  (without regard to choice of law principles). 











        4.5     
Counterparts; Headings. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but such counterparts shall together
constitute but one and the same agreement. Article and Section headings in this Agreement
are inserted for convenience of reference only and shall not constitute a part hereof.  





        4.6     
Severability. Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of this
Agreement or affecting the validity or enforceability of such provision in any other
jurisdiction.  




        4.7     
Conditions to Effectiveness. This Agreement shall become effective as of the date
hereof upon the satisfaction of each the following conditions precedent:  




	 	        (a)                 The
Agent shall have received a fully-executed copy of this Agreement, executed           by
each of the Borrower, the Lenders and the Agent; and  







	 	        (b)                 The
Agent shall have received a fully-executed copy of a Reaffirmation of           Guaranty
in the form attached hereto, executed by each of the Guarantors.  







        4.8     
Costs and Expenses. Without limiting any provisions of the Credit Agreement or any
of the prior Amendments thereto relating to the payment of fees and expenses by Borrower,
Borrower shall pay promptly all costs and expenses of the Agent incurred in connection
with this Agreement, including fees and expenses of the Agent’s legal counsel.  




        4.9     
Ratification. The Credit Agreement (as partially terminated by this Agreement),
the other Credit Documents (except as terminated by Section 4.2 of this Agreement) and
all other documents, instruments and agreements related thereto, are hereby ratified and
confirmed in all respects and shall continue in full force and effect. The remaining
provisions of the Credit Agreement shall, together with this Agreement, be read and
construed as a single agreement. All references in the Credit Agreement, the other Credit
Documents and any related agreement or instrument shall hereafter refer to the Credit
Agreement as partially terminated hereby.  




        4.10     
No Other Agreements. Nothing contained in this Agreement shall be construed to
imply a willingness on the part of the Lenders or the Agent to grant any similar or other
future waivers or amendments of any of the remaining terms and conditions of the Credit
Agreement or the other Credit Documents.  












        4.11     
Release. In order to induce the Agent and the Lenders to enter into this
Agreement, the Borrower and the Guarantors acknowledge and agree that: (a) they do not
have any claim or cause of action against the Agent or any of the Lenders (or any of
their respective directors, officers, employees or agents); (b) they do not have any
offset right, counterclaim or defense of any kind against any of their obligations,
indebtedness or liabilities to the Agent and the Lenders; and (c) each of the Agent and
the Lenders have heretofore properly performed and satisfied in a timely manner all of
their obligations to the Borrower and the Guarantors. The Borrower and the Guarantors
wish to eliminate any possibility that any past conditions, acts, omissions, events,
circumstances or matters would impair or otherwise adversely affect any of the Agent’s
or the Lenders’rights, interests, contracts, collateral security or remedies.
Therefore, the Borrower and the Guarantors unconditionally release, waive and forever
discharge (i) any and all liabilities, obligations, duties, promises or indebtedness of
any kind of the Agent or any of the Lenders to the Borrower or any Guarantor, except the
obligations to be performed by the Agent and the Lenders as expressly stated in the
Credit Agreement, as amended hereby, and the other Credit Documents, and (ii) all claims,
offsets, causes of action, suits or defenses of any kind whatsoever (if any), whether
arising at law or in equity, whether known or unknown, which the Borrower or any
Guarantor might otherwise have against the Agent or any of the Lenders or any of their
directors, officers, employees or agents, in either case (i) or (ii) on account of any
condition, act, omission, event, contract, liability, obligation, indebtedness, claim,
cause of action, defense, circumstance or matter of any kind whatsoever arising or
occurring on or prior to the date of this Agreement. Except as prohibited by law, the
Borrower and the Guarantors hereby waive any right they may have to claim or recover in
any litigation involving the Agent or any of the Lenders, any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to, actual
damages. The Borrower and the Guarantors (A) certify that no representative, agent or
attorney of any Lender or the Agent has represented, expressly or otherwise, that such
Lender or the Agent would not, in the event of litigation, seek to enforce the foregoing
waivers, releases and discharges, and (B) acknowledge that the Agent and the Lenders have
been induced to enter into this Agreement by, among other things, the waivers, releases,
discharges and certifications contained herein. The waivers, releases and discharges in
this paragraph shall be effective regardless of any other event that may occur or not
occur on or after the date hereof.  




[signature page follows] 














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




			
		MIDWEST EXPRESS HOLDINGS, INC.



		By:	
			

		Title:	
			

		

U.S. BANK NATIONAL ASSOCIATION, in its capacity as Agent and
                                                     as a Lender



		By:	
			

		Title:	
			

		

M&I MARSHALL & ILSLEY BANK




		By:	
			

		Title:	
			

		

BANK ONE, NA (Main Office Chicago)



		By:	
			

		Title:	
			














REAFFIRMATION OF
GUARANTY  



        Each
of the undersigned (each a “Guarantor”) executed a Subsidiary Guaranty
(each a “Guaranty”) dated as of August 31, 2001 in favor of the Lenders
(as defined in each Guaranty) pursuant to which each Guarantor guaranteed certain
obligations owed by Midwest Express Holdings, Inc. (the “Borrower”) to
the Lenders, including, without limitation, all debts, liabilities, obligations, covenants
and agreements of the Borrower in that certain Senior Secured Revolving Credit Agreement,
dated as of August 31, 2001 (as amended from time to time, the “Credit
Agreement”), by and between the Borrower, the Lenders and U.S. Bank National
Association, as Agent for the Lenders, and related agreements, as amended. Each Guarantor
acknowledges and consents to the Partial Termination, Consent and Cash Collateral
Agreement of even date herewith (the “Agreement”) and hereby agrees that
it shall remain liable under its Guaranty for all amounts owed pursuant to the remaining
provisions of the Credit Agreement and the related agreements. Further, each Guarantor
expressly agrees that it shall be irrevocably bound by the provisions of the Release set
forth in Section 4.11 of the Agreement. 



      Dated
as of October ___, 2003.


			
		MIDWEST AIRLINES, INC.



		By:	
			

		Title:	
			

		

SKYWAY AIRLINES, INC.



		By:	
			

		Title:	
			

		

MIDWEST EXPRESS SERVICES - OMAHA, INC.




		By:	
			

		Title:	
			

		

MIDWEST EXPRESS SERVICES - KANSAS CITY, INC.



		By:	
			

		Title:	
			

		

YX PROPERTIES, LLC



		By:	
			

		Title:	
			

















SCHEDULE 3.2(i)  



IRB LETTERS OF
CREDIT  






	Applicant
	Beneficiary
	LOC Number
	LOC Balance US$
	Expiry

	 	 	 	 	 
	Astral Aviation, Inc.

(nka Skyway Airlines, Inc.)


	U.S. Bank NA
	SLCW 124375
	$6,403,353.00
	4/15/2004

	Midwest Express Airlines, Inc. 
(nka Midwest Airlines, Inc.)


	U.S. Bank NA
	SLCW 121576
	$8,021,951.00
	8/15/2004















SCHEDULE 3.2(ii)  



NON-IRB LETTERS OF
CREDIT  







	Applicant
	Beneficiary
	LOC Number
	LOC Balance US$
	Expiry

	 	 	 	 	 
	Astral  Aviation, Inc.

(nka Skyway 
Airlines, Inc.)


	Greater  Toronto

Airports
	SLCW 121498
	$15,977.87*
	1/3/2004

		Kenton  County

Airport BOA


	SLCW 121569
	$3,500.00
	7/15/2004

		Metropolitan
Nashville




	SLCW 121556
	$8,200.00
	6/4/2004

	Midwest Express


	AIG Aviation
	SLCNMIL 00427
	$935,000.00
	1/30/2004

		City of Los Angeles


	SLCW 121511
	$93,000.00
	2/28/2004

		San Francisco Intl

Airport


	SLCW 121524
	$30,922.00
	3/15/2004

		Swissport Fueling,
Inc.
	SLCW 121584
	$10,000.00
	12/12/2003








* Can $21,000.000 reset
monthly