<PAGE>   1
                                                                  EXHIBIT 10.101

                                                                  EXECUTION COPY


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                       ESCROW AND PAYING AGENT AGREEMENT
                                   (Class B)

                          Dated as of February 9, 1998

                                     among

                   FIRST SECURITY BANK, NATIONAL ASSOCIATION

                                as Escrow Agent

                       MORGAN STANLEY & CO. INCORPORATED
                          BT ALEX. BROWN INCORPORATED
              DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
                              GOLDMAN, SACHS & CO.

                              as Placement Agents

                            WILMINGTON TRUST COMPANY
                        not in its individual capacity,
                       but solely as Pass Through Trustee
                              for and on behalf of
                  Atlas Air, Inc. Pass Through Trust 1998-1B-O

                            as Pass Through Trustee

                                      and

                            WILMINGTON TRUST COMPANY

                                as Paying Agent

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<PAGE>   2
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                       Page
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<S>              <C>                                                                                                    <C>
SECTION 1.       Escrow Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2

Section 1.01.    Appointment of Escrow Agent  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2

Section 1.02.    Instruction; Etc.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3

Section 1.03.    Initial Escrow Amount; Issuance of Escrow Receipts . . . . . . . . . . . . . . . . . . . . . . . . .   3

Section 1.04.    Payments to Receiptholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4

Section 1.05.    Mutilated, Destroyed, Lost or Stolen Escrow Receipt  . . . . . . . . . . . . . . . . . . . . . . . .   4

Section 1.06.    Additional Escrow Amounts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5

Section 1.07.    Resignation or Removal of Escrow Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5

Section 1.08.    Persons Deemed Owners  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5

Section 1.09.    Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6

SECTION 2.       Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6

Section 2.01.    Appointment of Paying Agent  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6

Section 2.02.    Establishment of Paying Agent Account  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6

Section 2.03.    Payments from Paying Agent Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6

Section 2.04.    Withholding Taxes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7

Section 2.05.    Resignation or Removal of Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8

Section 2.06.    Notice of Final Withdrawal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8

SECTION 3.       Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9

SECTION 4.       Other Actions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9

SECTION 5.       Representations and Warranties of the Escrow Agent . . . . . . . . . . . . . . . . . . . . . . . . .   9
</TABLE>





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<TABLE>
<CAPTION>
                                                                                                                       Page
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<S>              <C>                                                                                                   <C>
SECTION 6.       Representations and Warranties of the Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . .  10

SECTION 7.       Indemnification  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11

SECTION 8.       Amendment, Etc.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12

SECTION 9.       Notices  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12

SECTION 10.      Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13

SECTION 11.      Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13

SECTION 12.      Governing Law  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13

SECTION 13.      Waiver of Jury Trial Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13

SECTION 14.      Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13

Exhibit A        Escrow Receipt

Exhibit B        Withdrawal Certificate

Exhibit C        Prepayment Withdrawal Certificate
</TABLE>




                                       ii
<PAGE>   4
                 ESCROW AND PAYING AGENT AGREEMENT (Class B) dated as of
February 9, 1998 (as amended, modified or supplemented from time to time, this
"Agreement") among FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, as Escrow Agent (in such capacity, together with its
successors in such capacity, the "Escrow Agent"); MORGAN STANLEY & CO.
INCORPORATED, BT ALEX. BROWN INCORPORATED, DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION AND GOLDMAN, SACHS & CO., as Placement Agents of the
Certificates referred to below (the "Placement Agents" and together with their
respective transferees and assigns as registered owners of the Certificates,
the "Investors") under the Placement Agreement referred to below; WILMINGTON
TRUST COMPANY, a Delaware  banking corporation, not in its individual capacity
except as otherwise expressly provided herein, but solely as trustee (in such
capacity, together with its successors in such capacity, the "Pass Through
Trustee") under the Pass Through Trust Agreement referred to below; and
WILMINGTON TRUST COMPANY, a Delaware banking corporation, as paying agent
hereunder (in such capacity, together with its successors in such capacity, the
"Paying Agent").

                              W I T N E S S E T H

                 WHEREAS, Atlas Air, Inc. ("Atlas") and the Pass Through
Trustee have entered into the Pass Through Trust Agreement, dated as of
February 9, 1998 (together, as amended, modified or supplemented from time to
time in accordance with the terms thereof, the "Pass Through Trust Agreement")
relating to Atlas Air, Inc. Pass Through Trust 1998-1B-O (the "Pass Through
Trust") pursuant to which the Atlas Air Pass Through Trust, Series 1998-1B-O
Certificates referred to therein (the "Certificates") are being issued;

                 WHEREAS, Atlas and the Placement Agents have entered into a
Placement Agreement dated as of  January 27, 1998 (as amended, modified or
supplemented from time to time in accordance with the terms thereof, the
"Placement Agreement") pursuant to which the Pass Through Trustee will issue
and sell the Certificates to the Placement Agents;

                 WHEREAS, Atlas, the Pass Through Trustee, certain other pass
through trustees and certain other persons concurrently herewith are entering
into the Note Purchase Agreement, dated as of the date hereof (the "Note
Purchase Agreement"), pursuant to which the Pass Through Trustee has agreed to
acquire from time to time on or prior to the Cut- Off Date (as defined in the
Note Purchase Agreement) equipment notes (the "Equipment Notes") issued to
finance the acquisition of aircraft by Atlas, as lessee or as owner, utilizing
a portion of the proceeds from the sale of the Certificates (the "Net
Proceeds");

                 WHEREAS, the Placement Agents and the Pass Through Trustee
intend that the Net Proceeds be held in escrow by the Escrow Agent on behalf of
the Investors, subject to withdrawal upon request by the Pass Through Trustee
and satisfaction of the conditions set forth in the Note Purchase Agreement for
the purpose of purchasing Equipment Notes, and that pending such withdrawal the
Net Proceeds be deposited on behalf of the Escrow Agent
<PAGE>   5
with ABN AMRO Bank N.V., a banking institution organized under the laws of the
Netherlands, acting through its Chicago Branch, as Depositary (the
"Depositary") under the Deposit Agreement, dated as of the date hereof between
the Depositary and the Escrow Agent relating to the Pass Through Trust (as
amended, modified or supplemented from time to time in accordance with the
terms thereof, the "Deposit Agreement") pursuant to which, among other things,
the Depositary will pay interest for distribution to the Investors and
establish accounts from which the Escrow Agent shall make withdrawals upon
request of and proper certification by the Pass Through Trustee;

                 WHEREAS, the Escrow Agent wishes to appoint the Paying Agent
to pay amounts required to be distributed to the Investors in accordance with
this Agreement; and

                 WHEREAS, capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in the Pass Through Trust Agreement.

                 NOW, THEREFORE, in consideration of the obligations contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:

                 SECTION 1.       Escrow Agent.

                 Section 1.01.    Appointment of Escrow Agent.  Each of the
Placement Agents, for and on behalf of each of the Investors, hereby
irrevocably appoints, authorizes and directs the Escrow Agent to act as escrow
agent and fiduciary hereunder and under the Deposit Agreement for such specific
purposes and with such powers as are specifically delegated to the Escrow Agent
by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto.  Any and all money received and held by the
Escrow Agent under this Agreement or the Deposit Agreement shall be held in
escrow by the Escrow Agent in accordance with the terms of this Agreement.
This Agreement is irrevocable and the Investors' rights with respect to any
monies received and held in escrow by the Escrow Agent under this Agreement or
the Deposit Agreement shall only be as provided under the terms and conditions
of this Agreement and the Deposit Agreement.  The Escrow Agent (which term as
used in this sentence shall include reference to its affiliates and its own and
its affiliates' officers, directors, employees and agents): (a) shall have no
duties or responsibilities except those expressly set forth in this Agreement;
(b) shall not be responsible to the Pass Through Trustee or the Investors for
any recitals, statements, representations or warranties of any person other
then itself contained in this Agreement or the Deposit Agreement or for the
failure by the Pass Through Trustee, the Investors or any other person or
entity (other than the Escrow Agent) to perform any of its obligations
hereunder (whether or not the Escrow Agent shall have any knowledge thereof);
and (c) shall not be responsible for any action taken or omitted to be taken by
it hereunder or provided for herein or in connection herewith, except for its
own willful misconduct or gross negligence (or simple negligence in connection
with the handling of funds).





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<PAGE>   6
                 Section 1.02.    Instruction; Etc.  The Placement Agents, for
and on behalf of each of the Investors, hereby irrevocably instruct the Escrow
Agent, and the Escrow Agent agrees, (a) to enter into the Deposit Agreement,
(b) to appoint the Paying Agent as provided in this Agreement, (c) upon receipt
at any time and from time to time prior to the Delivery Period Termination Date
(as defined in the Note Purchase Agreement) of a certificate substantially in
the form of Exhibit B hereto (a "Withdrawal Certificate") executed by the Pass
Through Trustee, together with an attached Notice of Purchase Withdrawal in
substantially the form of Exhibit A to the Deposit Agreement duly completed by
the Pass Through Trustee (the "Applicable Notice of Purchase Withdrawal" and
the withdrawal to which it relates, a "Purchase Withdrawal"), immediately to
execute the Applicable Notice of Purchase Withdrawal as Escrow Agent and
transmit it to the Depositary by facsimile transmission in accordance with the
Deposit Agreement; provided that, upon the request of the Pass Through Trustee
after such transmission, the Escrow Agent shall cancel such Applicable Notice
of Purchase Withdrawal, (d) upon receipt at any time and from time to time
prior to the Delivery Period Termination Date (as defined in the Note Purchase
Agreement) of a certificate substantially in the form of Exhibit C hereto (a
"Prepayment Withdrawal Certificate") executed by the Pass Through Trustee,
together with an attached Notice of Prepayment Withdrawal in substantially the
form of Exhibit B to the Deposit Agreement duly completed by the Pass Through
Trustee (the "Applicable Notice of Prepayment Withdrawal" and the withdrawal to
which it relates, a "Prepayment Withdrawal"), immediately to execute the
Applicable Notice of Prepayment Withdrawal as Escrow Agent and transmit it to
the Depositary by facsimile transmission in accordance with the Deposit
Agreement; provided that, upon the request of the Pass Through Trustee after
such transmission, the Escrow Agent shall cancel such Applicable Notice of
Prepayment Withdrawal, and (e) if there are any undrawn Deposits (as defined in
the Deposit Agreement) on the earlier of (i) the Delivery Period Termination
Date and (ii) the day on which the Escrow Agent receives notice from the Pass
Through Trustee that the Pass Through Trustee's obligation to purchase
Equipment Notes under the Note Purchase Agreement has terminated, to give
notice to the Depositary (with a copy to the Paying Agent) substantially in the
form of Exhibit C to the Deposit Agreement requesting a withdrawal of all of
the remaining Deposits, together with accrued and unpaid interest on such
Deposits to the date of withdrawal, on the 35th day after the date that such
notice of withdrawal is given to the Depositary (or, if not a Business Day, on
the next succeeding Business Day) (a "Final Withdrawal"), provided that if the
day scheduled for the Final Withdrawal in accordance with the foregoing is
within 10 days before or after a Regular Distribution Date, then the Escrow
Agent shall request that such requested Final Withdrawal be made on such
Regular Distribution Date (the date of such requested withdrawal, the "Final
Withdrawal Date").  If for any reason the Escrow Agent shall have failed to
give the Final Withdrawal Notice to the Depositary on or before June 29, 1999
(provided, that if a labor strike or work stoppage occurs at The Boeing Company
prior to such date, such date shall be extended by adding thereto the number of
days that each such labor strike or work stoppage continues in effect), and
there are unwithdrawn Deposits on such date, the Final Withdrawal Date shall be
deemed to be the Delivery Period Termination Date.





                                       3
<PAGE>   7
                 Section 1.03.    Initial Escrow Amount; Issuance of Escrow
Receipts.  The Escrow Agent hereby directs the Placement Agents to, and the
Placement Agents hereby acknowledge that on the date hereof they shall,
irrevocably deliver to the Depositary on behalf of the Escrow Agent, an amount
in U.S. dollars ("Dollars") and immediately available funds equal to
$115,481,000 for deposit on behalf of the Escrow Agent with the Depositary in
accordance with Section 2.1 of the Deposit Agreement.  The Placement Agents
hereby instruct the Escrow Agent, upon receipt of such sum from the Placement
Agents, to confirm such receipt by executing and delivering to the Pass Through
Trustee an Escrow Receipt in the form of Exhibit A hereto (an "Escrow
Receipt"), (a) to be affixed by the Pass Through Trustee to each Certificate
and (b) to evidence the same percentage interest (the "Escrow Interest") in the
Account Amounts (as defined below) as the Fractional Undivided Interest in the
Pass Through Trust evidenced by the Certificate to which it is to be affixed.
The Escrow Agent shall provide to the Pass Through Trustee for attachment to
each Certificate newly issued under and in accordance with the Pass Through
Trust Agreement an executed Escrow Receipt as the Pass Through Trustee may from
time to time request of the Escrow Agent.  Each Escrow Receipt shall be
registered by the Escrow Agent in a register (the "Register") maintained by the
Escrow Agent in the same name and same manner as the Certificate to which it is
attached and may not thereafter be detached from such Certificate to which it
is to be affixed prior to the distribution of the Final Withdrawal (the "Final
Distribution").  After the Final Distribution, no additional Escrow Receipts
shall be issued and the Pass Through Trustee shall request the return to the
Escrow Agent for cancellation of all outstanding Escrow Receipts.

                 Section 1.04.    Payments to Receiptholders.  All payments and
distributions made to holders of an Escrow Receipt (collectively
"Receiptholders") in respect of the Escrow Receipt shall be made only from
amounts deposited in the Paying Agent Account (as defined below) ("Account
Amounts").  Each Receiptholder, by its acceptance of an Escrow Receipt, agrees
that (a) it will look solely to the Account Amounts for any payment or
distribution due to such Receiptholder pursuant to the terms of the Escrow
Receipt and this Agreement and (b) it will have no recourse to Atlas, the Pass
Through Trustee, the Paying Agent or the Escrow Agent, except as expressly
provided herein or in the Pass Through Trust Agreement.  No Receiptholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Paying Agent Account or the obligations of the parties
hereto, nor shall anything set forth herein, or contained in the terms of the
Escrow Receipt, be construed so as to constitute the Receiptholders from time
to time as partners or members of an association.

                 Section 1.05.    Mutilated, Destroyed, Lost or Stolen Escrow
Receipt.  If (a) any mutilated Escrow Receipt is surrendered to the Escrow
Agent or the Escrow Agent receives evidence to its satisfaction of the
destruction, loss or theft of any Escrow Receipt and (b) there is delivered to
the Escrow Agent and the Pass Through Trustee such security, indemnity or bond,
as may be required by them to hold each of them harmless, then, absent notice
to the Escrow Agent or the Pass Through Trustee that such destroyed, lost or
stolen Escrow Receipt has been acquired by a bona fide purchaser, and provided
that the





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<PAGE>   8
requirements of Section 8-405 of the Uniform Commercial Code in effect in any
applicable jurisdiction are met, the Escrow Agent shall execute, authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Escrow Receipt, a new Escrow Receipt or Escrow Receipts and of like
Escrow Interest in the Account Amounts and bearing a number not
contemporaneously outstanding.

                 In connection with the issuance of any new Escrow Receipt
under this Section 1.05, the Escrow Agent 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
Pass Through Trustee and the Escrow Agent) connected therewith.

                 Any duplicate Escrow Receipt issued pursuant to this Section
1.05 shall constitute conclusive evidence of the appropriate Escrow Interest in
the Account Amounts, as if originally issued, whether or not the lost, stolen
or destroyed Escrow Receipt shall be found at any time.

                 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 Escrow
Receipts.

                 Section 1.06.    Additional Escrow Amounts.  On the date of
any Purchase Withdrawal, the Pass Through Trustee may re-deposit with the
Depositary some or all of the amounts so withdrawn in accordance with Section
2.4 of the Deposit Agreement.

                 Section 1.07.    Resignation or Removal of Escrow Agent.
Subject to the appointment and acceptance of a successor Escrow Agent as
provided below, the Escrow Agent may resign at any time by giving 30 days'
prior written notice thereof to the Investors, but may not otherwise be removed
except for cause by the written consent of the Investors with respect to
Investors representing Escrow Interests aggregating not less than a majority in
interest in the Account Amounts (an "Action of Investors").  Upon any such
resignation or removal, the Investors, by an Action of Investors, shall have
the right to appoint a successor Escrow Agent.  If no successor Escrow Agent
shall have been so appointed and shall have accepted such appointment within 30
days after the retiring Escrow Agent's giving of notice of resignation or the
removal of the retiring Escrow Agent, then the retiring Escrow Agent may
appoint a successor Escrow Agent.  Any successor Escrow Agent shall be a bank
which has an office in the United States with a combined capital and surplus of
at least $100,000,000.  Upon the acceptance of any appointment as Escrow Agent
hereunder by a successor Escrow Agent, such successor Escrow Agent shall enter
into such documents as the Pass Through Trustee shall require and shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Escrow Agent, and the retiring Escrow Agent shall be
discharged from its duties and obligations hereunder.  No resignation or
removal of the Escrow Agent shall be effective unless a written confirmation
shall have been obtained from each of Moody's Investors Service, Inc.,





                                       5
<PAGE>   9
Standard & Poor's Rating Group, a division of McGraw-Hill Inc., and Fitch IBCA,
Inc. that the replacement of the Escrow Agent with the successor Escrow Agent
will not result in (a) a reduction of the rating for the Certificates below the
then current rating for the Certificates or (b) a withdrawal or suspension of
the rating of the Certificates.

                 Section 1.08.    Persons Deemed Owners.  Prior to due
presentment of a Certificate for registration of transfer, the Escrow Agent and
the Paying Agent may treat the Person in whose name any Escrow Receipt is
registered (as of the day of determination) as the owner of such Escrow Receipt
for the purpose of receiving distributions pursuant to this Agreement and for
all other purposes whatsoever, and neither the Escrow Agent nor the Paying
Agent shall be affected by any notice to the contrary.

                 Section 1.09.    Further Assurances.  The Escrow Agent agrees
to take such actions, and execute such other documents, as may be reasonably
requested by the Pass Through Trustee in order to effectuate the purposes of
this Agreement and the performance by the Escrow Agent of its obligations
hereunder.

                 SECTION 2.       Paying Agent.

                 Section 2.01.    Appointment of Paying Agent.  The Escrow
Agent hereby irrevocably appoints and authorizes the Paying Agent to act as its
paying agent hereunder, for the benefit of the Investors, for such specific
purposes and with such powers as are specifically delegated to the Paying Agent
by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto.  Any and all money received and held by the
Paying Agent under this Agreement or the Deposit Agreement shall be held in the
Paying Agent Account for the benefit of the Investors.   The Paying Agent
(which term as used in this sentence shall include reference to its affiliates
and its own and its affiliates' officers, directors, employees and agents):
(a) shall have no duties or responsibilities except those expressly set forth
in this Agreement, and shall not by reason of this Agreement be a trustee for
the Escrow Agent; (b) shall not be responsible to the Escrow Agent for any
recitals, statements, representations or warranties of any person other then
itself contained in this Agreement or for the failure by the Escrow Agent or
any other person or entity (other than the Paying Agent) to perform any of its
obligations hereunder (whether or not the Paying Agent shall have any knowledge
thereof); and (c) shall not be responsible for any action taken or omitted to
be taken by it hereunder or provided for herein or in connection herewith,
except for its own willful misconduct or gross negligence (or simple negligence
in connection with the handling of funds).

                 Section 2.02.    Establishment of Paying Agent Account.  The
Paying Agent shall establish a deposit account (the "Paying Agent Account") at
Wilmington Trust Company in the name of the Escrow Agent.  It is expressly
understood by the parties hereto that the Paying Agent is acting as the paying
agent of the Escrow Agent hereunder and that no amounts on deposit in the
Paying Agent Account constitute part of the Trust Property.





                                       6
<PAGE>   10
                 Section 2.03.    Payments from Paying Agent Account.  The
Escrow Agent hereby irrevocably instructs the Paying Agent, and the Paying
Agent agrees to act, as follows:

                 (a)      On each Interest Payment Date (as defined in the
         Deposit Agreement) or as soon thereafter as the Paying Agent has
         confirmed receipt in the Paying Agent Account from the Depositary of
         any amount in respect of accrued interest on the Deposits, the Paying
         Agent shall distribute out of the Paying Agent Account the entire
         amount deposited therein by the Depositary.  There shall be so
         distributed to each Receiptholder of record on the 15th day (whether
         or not a Business Day) preceding such Interest Payment Date by check
         mailed to such Receiptholder, at the address appearing in the
         Register, such Receiptholder's pro rata share (based on the Escrow
         Interest in the Account Amounts held by such Receiptholder) of the
         total amount of interest deposited by the Depositary in the Paying
         Agent Account on such date, except that, with respect to Escrow
         Receipts registered on the Record Date in the name of a nominee of the
         Depository Trust Company ("DTC"), such distribution shall be made by
         wire transfer in immediately available funds to the account designated
         by DTC.

                 (b)      Upon the confirmation by the Paying Agent of receipt
         in the Paying Agent Account from the Depositary of any amount in
         respect of the Final Withdrawal, the Paying Agent shall forthwith
         distribute the entire amount of the Final Withdrawal deposited therein
         by the Depositary.  There shall be so distributed to each
         Receiptholder of record on the 15th day (whether or not a Business
         Day) preceding the Final Withdrawal Date by check mailed to such
         Receiptholder, at the address appearing in the Register, such
         Receiptholder's pro rata share (based on the Escrow Interest in the
         Account Amounts held by such Receiptholder) of the total amount in the
         Paying Agent Account on account of such Final Withdrawal, except that,
         with respect to Escrow Receipts registered on the Record Date in the
         name of a nominee of DTC, such distribution shall be made by wire
         transfer in immediately available funds to the account designated by
         DTC.

                 (c)      If any payment of interest or principal in respect of
         the Final Withdrawal is not received by the Paying Agent within five
         days of the applicable date when due, then it shall be distributed to
         Receiptholders after actual receipt by the Paying Agent on the same
         basis as a Special Payment is distributed under the Pass Through Trust
         Agreement.

                 (d)      The Paying Agent shall include with any check mailed
         pursuant to this Section any notice required to be distributed under
         the Pass Through Trust Agreement that is furnished to the Paying Agent
         by the Pass Through Trustee.

                 Section 2.04.    Withholding Taxes.  The Paying Agent shall
exclude and withhold from each distribution of accrued interest on the Deposits
(as defined in the Deposit Agreement) and any amount in respect of the Final
Withdrawal any and all withholding taxes





                                       7
<PAGE>   11
applicable thereto as required by law.  The Paying Agent agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
taxes or similar charges are required to be withheld with respect to any
amounts payable in respect of the Deposits (as defined in the Deposit
Agreement) or the escrow amounts, to withhold such amounts and timely pay the
same to the appropriate authority in the name of and on behalf of the
Receiptholders, that it will file any necessary withholding tax returns or
statements when due, and that, as promptly as possible after the payment
thereof, it will deliver to each such Receiptholder appropriate documentation
showing the payment thereof, together with such additional documentary evidence
as such Receiptholder may reasonably request from time to time.  The Paying
Agent agrees to file any other information reports as it may be required to
file under United States law.

                 Section 2.05.    Resignation or Removal of Paying Agent.
Subject to the appointment and acceptance of a successor Paying Agent as
provided below, the Paying Agent may resign at any time by giving 30 days'
prior written notice thereof to the Escrow Agent, but may not otherwise be
removed except for cause by the Escrow Agent.  Upon any such resignation or
removal, the Escrow Agent shall have the right to appoint a successor Paying
Agent.  If no successor Paying Agent shall have been so appointed and shall
have accepted such appointment within 30 days after the retiring Paying Agent's
giving of notice of resignation or the removal of the retiring Paying Agent,
then the retiring Paying Agent may appoint a successor Paying Agent.  Any
Successor Paying Agent shall be a bank which has an office in the United States
with a combined capital and surplus of at least $100,000,000.  Upon the
acceptance of any appointment as Paying Agent hereunder by a successor Paying
Agent, such successor Paying Agent shall enter into such documents as the
Escrow Agent shall require and shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Paying
Agent, and the retiring Paying Agent shall be discharged from its duties and
obligations hereunder.

                 Section 2.06.    Notice of Final Withdrawal.  Promptly after
receipt by the Paying Agent of notice that the Escrow Agent has requested a
Final Withdrawal or that a Final Withdrawal will be made, the Paying Agent
shall cause notice of the distribution of the Final Withdrawal to be mailed to
each of the Receiptholders at its address as it appears in the Register.  Such
notice shall be mailed not less than 15 days prior to the Final Withdrawal
Date.  Such notice shall set forth:

                 (i)      the Final Withdrawal Date and the date for
         determining Receiptholders of record who shall be entitled to receive
         distributions in respect of the Final Withdrawal,

                 (ii)     the amount of the payment in respect of the Final
         Withdrawal for each $1,000 face amount Certificate (based on
         information provided by the Pass Through Trustee) and the amount
         thereof constituting unused Deposits (as defined in the Deposit
         Agreement) and interest thereon, and





                                       8
<PAGE>   12
                 (iii)    if the Final Withdrawal Date is the same date as a
         Regular Distribution Date, the total amount to be received on such
         date for each $1,000 face amount Certificate (based on information
         provided by the Pass Through Trustee).

                 Such mailing may include any notice required to be given to
Certificateholders in connection with such distribution pursuant to the Pass
Through Trust Agreement.

                 SECTION 3.       Payments.  If, notwithstanding the
instructions in Section 4 of the Deposit Agreement that all amounts payable to
the Escrow Agent under the Deposit Agreement be paid by the Depositary directly
to the Paying Agent or the Pass Through Trustee (depending on the
circumstances), the Escrow Agent receives any payment thereunder, then the
Escrow Agent shall forthwith pay such amount in Dollars and in immediately
available funds by wire transfer to (a) in the case of a payment of accrued
interest on the Deposits (as defined in the Deposit Agreement) or any Final
Withdrawal, directly to the Paying Agent Account and (b) in the case of any
Purchase Withdrawal, directly to the Pass Through Trustee or its designee as
specified and in the manner provided in the Applicable Notice of Purchase
Withdrawal.  The Escrow Agent hereby waives any and all rights of set-off,
combination of accounts, right of retention or similar right (whether arising
under applicable law, contract or otherwise) it may have against amounts
payable to the Paying Agent howsoever arising.

                 SECTION 4.       Other Actions.  The Escrow Agent shall take
such other actions under or in respect of the Deposit Agreement (including,
without limitation, the enforcement of the obligations of the Depositary
thereunder) as the Investors, by an Action of Investors, may from time to time
request.

                 SECTION 5.       Representations and Warranties of the Escrow
Agent.  The Escrow Agent represents and warrants to Atlas, the Investors, the
Paying Agent and the Pass Through Trustee as follows:

                 (i)      it is a national banking association duly organized
         and validly existing in good standing under the laws of the United
         States of America;

                 (ii)     it has full power, authority and legal right to
         conduct its business and operations as currently conducted and to
         enter into and perform its obligations under this Agreement and the
         Deposit Agreement;

                 (iii)    the execution, delivery and performance of each of
         this Agreement and the Deposit Agreement have been duly authorized by
         all necessary corporate action on the part of it and do not require
         any stockholder approval, or approval or consent of any trustee or
         holder of any indebtedness or obligations of it, and each such
         document has been duly executed and delivered by it and constitutes
         its legal, valid and binding obligations





                                       9
<PAGE>   13
         enforceable against it in accordance with the terms hereof or thereof
         except as such enforceability may be limited by bankruptcy,
         insolvency, moratorium, reorganization or other similar laws or
         equitable principles of general application to or affecting the
         enforcement of creditors' rights generally (regardless of whether such
         enforceability is considered in a proceeding in equity or at law);

                 (iv)     no authorization, consent or approval of or other
         action by, and no notice to or filing with, any United States federal
         or state governmental authority or regulatory body is required for the
         execution, delivery or performance by it of this Agreement or the
         Deposit Agreement;

                 (v)      neither the execution, delivery or performance by it
         of this Agreement or the Deposit Agreement, nor compliance with the
         terms and provisions hereof or thereof, conflicts or will conflict
         with or results or will result in a breach or violation of any of the
         terms, conditions or provisions of, or will require any consent or
         approval under, any law, governmental rule or regulation or the
         charter documents, as amended, or bylaws, as amended, of it or any
         similar instrument binding on it or any order, writ, injunction or
         decree of any court or governmental authority against it or by which
         it or any of its properties is bound or any indenture, mortgage or
         contract or other agreement or instrument to which it is a party or by
         which it or any of its properties is bound, or constitutes or will
         constitute a default thereunder or results or will result in the
         imposition of any lien upon any of its properties; and

                 (vi)     there are no pending or, to its knowledge, threatened
         actions, suits, investigations or proceedings (whether or not
         purportedly on behalf of it) against or affecting it or any of its
         property before or by any court or administrative agency which, if
         adversely determined, (A) would adversely affect the ability of it to
         perform its obligations under this Agreement or the Deposit Agreement
         or (B) would call into question or challenge the validity of this
         Agreement or the Deposit Agreement or the enforceability hereof or
         thereof in accordance with the terms hereof or thereof, nor is the
         Escrow Agent in default with respect to any order of any court,
         governmental authority, arbitration board or administrative agency so
         as to adversely affect its ability to perform its obligations under
         this Agreement or the Deposit Agreement.

                 SECTION 6.       Representations and Warranties of the Paying
Agent.  The Paying Agent represents and warrants to Atlas, the Investors, the
Escrow Agent and the Pass Through Trustee as follows:

                 (i)      it is a Delaware banking company duly organized and
         validly existing in good standing under the laws of its jurisdiction
         of incorporation;





                                       10
<PAGE>   14
                 (ii)     it has full power, authority and legal right to
         conduct its business and operations as currently conducted and to
         enter into and perform its obligations under this Agreement;

                 (iii)    the execution, delivery and performance of this
         Agreement has been duly authorized by all necessary corporate action
         on the part of it and does not require any stockholder approval, or
         approval or consent of any trustee or holder of any indebtedness or
         obligations of it, and such document has been duly executed and
         delivered by it and constitutes its legal, valid and binding
         obligations enforceable against it in accordance with the terms hereof
         except as such enforceability may be limited by bankruptcy,
         insolvency, moratorium, reorganization or other similar laws or
         equitable principles of general application to or affecting the
         enforcement of creditors' rights generally (regardless of whether such
         enforceability is considered in a proceeding in equity or at law);

                 (iv)     no authorization, consent or approval of or other
         action by, and no notice to or filing with, any United States federal
         or state governmental authority or regulatory body is required for the
         execution, delivery or performance by it of this Agreement;

                 (v)      neither the execution, delivery or performance by it
         of this Agreement, nor compliance with the terms and provisions
         hereof, conflicts or will conflict with or results or will result in a
         breach or violation of any of the terms, conditions or provisions of,
         or will require any consent or approval under, any law, governmental
         rule or regulation or the charter documents, as amended, or bylaws, as
         amended, of it or any similar instrument binding on it or any order,
         writ, injunction or decree of any court or governmental authority
         against it or by which it or any of its properties is bound or any
         indenture, mortgage or contract or other agreement or instrument to
         which it is a party or by which it or any of its properties is bound,
         or constitutes or will constitute a default thereunder or results or
         will result in the imposition of any lien upon any of its properties;
         and

                 (vi)     there are no pending or, to its knowledge, threatened
         actions, suits, investigations or proceedings (whether or not
         purportedly on behalf of it) against or affecting it or any of its
         property before or by any court or administrative agency which, if
         adversely determined, (A) would adversely affect the ability of it to
         perform its obligations under this Agreement or (B) would call into
         question or challenge the validity of this Agreement or the
         enforceability hereof in accordance with the terms hereof, nor is the
         Paying Agent in default with respect to any order of any court,
         governmental authority, arbitration board or administrative agency so
         as to adversely affect its ability to perform its obligations under
         this Agreement.





                                       11
<PAGE>   15
                 SECTION 7.       Indemnification.  Except for actions
expressly required of the Escrow Agent or the Paying Agent hereunder, each of
the Escrow Agent and the Paying Agent shall in all cases be fully justified in
failing or refusing to act hereunder unless it shall have been indemnified by
the party requesting such action in a manner reasonably satisfactory to it
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.  In the event Atlas requests
any amendment to any Operative Agreement (as defined in the Note Purchase
Agreement), the Pass Through Trustee agrees to pay all reasonable fees and
expenses (including, without limitation, fees and disbursements of counsel) of
the Escrow Agent and the Paying Agent in connection therewith.

                 SECTION 8.       Amendment, Etc.  Upon request of the Pass
Through Trustee and approval by an Action of Investors, the Escrow Agent shall
enter into an amendment to this Agreement, so long as such amendment does not
adversely affect the rights or obligations of the Escrow Agent or the Paying
Agent, provided that upon request of the Pass Through Trustee and without any
consent of the Investors, the Escrow Agent shall enter into an amendment to
this Agreement for any of the following purposes:

                 (1)      to correct or supplement any provision in this
         Agreement which may be defective or inconsistent with any other
         provision herein or to cure any ambiguity or correct any mistake or to
         modify any other provision with respect to matters or questions
         arising under this Agreement, provided that any such action shall not
         materially adversely affect the interests of the Investors; or

                 (2)      to comply with any requirement of the SEC, applicable
         law, rules or regulations of any exchange or quotation system on which
         the Certificates are listed or any regulatory body; or

                 (3)      to evidence and provide for the acceptance of
         appointment under this Agreement of a successor Escrow Agent,
         successor Paying Agent or successor Pass Through Trustee.

                 SECTION 9.       Notices.  Unless otherwise expressly provided
herein, any notice or other communication under this Agreement shall be in
writing (including by facsimile) and shall be deemed to be given and effective
upon receipt thereof.  All notices shall be sent to

         (i)     if to the Investors, as their respective names shall appear in
                 the Register;

         (ii)    if to the Escrow Agent, addressed to at its office at:

                 FIRST SECURITY BANK, NATIONAL ASSOCIATION
                 79 South Main Street
                 Salt Lake City, UT  84111





                                       12
<PAGE>   16
                 Attention:  Corporate Trust Department
                 Telecopier:  801-246-5053

         (iii)   if to the Pass Through Trustee, addressed to it at its office
                 at:

                 WILMINGTON TRUST COMPANY
                 One Rodney Square
                 1100 N. Market Street
                 Wilmington, DE  19890-0001

                 Attention:  Corporate Trust Administration
                 Telecopier:  302-651-8882

         (iv)    if to the Paying Agent, addressed to it at its office at:

                 WILMINGTON TRUST COMPANY
                 One Rodney Square
                 1100 N. Market Street
                 Wilmington, DE  19890-0001

                 Attention:  Corporate Trust Administration
                 Telecopier:  302-651-8882

         (v)     in each case with a copy to Atlas, addressed to it at its
                 office at:

                 ATLAS AIR, INC.
                 538 Commons Drive
                 Golden, CO  80401

                 Attention:  Chief Financial Officer
                 Telecopier:  303-526-5051

(or at such other address as any such party may specify from time to time in a
written notice to the other parties).  On or prior to the execution of this
Agreement, the Pass Through Trustee has delivered to the Escrow Agent a
certificate containing specimen signatures of the representatives of the Pass
Through Trustee who are authorized to give notices and instructions with
respect to this Agreement.  The Escrow Agent may conclusively rely on such
certificate until the Escrow Agent receives written notice from the Pass
Through Trustee to the contrary.

                 SECTION 10.  Transfer.  No party hereto shall be entitled to
assign or otherwise transfer this Agreement (or any interest herein) other than
(in the case of the Escrow Agent) to a successor escrow agent under Section
1.06 hereof or (in the case of the Paying Agent) to a successor paying agent
under Section 2.04 hereof, and any purported





                                       13
<PAGE>   17
assignment in violation thereof shall be void.  This Agreement shall be binding
upon the parties hereto and their respective successors and (in the case of the
Escrow Agent and the Paying Agent) their respective permitted assigns.  Upon
the occurrence of the Transfer (as defined below) contemplated by the
Assignment and Assumption Agreement (as defined below), the Pass Through
Trustee shall (without further act) be deemed to have transferred all of its
right, title and interest in and to this Agreement to the trustee of the
Successor Trust (as defined below) and, thereafter, the trustee of the
Successor Trust shall be deemed to be the "Pass Through Trustee" hereunder with
the rights and obligations of the "Pass Through Trustee" hereunder and each
reference herein to "Atlas Air, Inc. Pass Through Trust "1998-1B-O" shall be
deemed to be a reference to "Atlas Air, Inc. Pass Through Trust 1998-1B-S".
The parties hereto hereby acknowledge and consent to the Transfer contemplated
by the Assignment and Assumption Agreement.  As used herein, "Transfer" means
the transfers of the assets to the Successor Trust contemplated by the
Assignment and Assumption Agreement; "Assignment and Assumption Agreement"
means the Assignment and Assumption Agreement to be entered into between the
Pass Through Trustee and the trustee of the Successor Trust, substantially in
the form of Exhibit E to the Pass Through Trust Agreement; "Successor Trust"
means the Atlas Air, Inc. Pass Through Trust 1998-1B-S.

                 SECTION 11.  Entire Agreement.  This Agreement sets forth all
of the promises, covenants, agreements, conditions and understandings among the
Escrow Agent, the Paying Agent, the Placement Agents and the Pass Through
Trustee with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and undertakings, inducements or conditions, express
or implied, oral or written.

                 SECTION 12.  Governing Law.  This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.

                 SECTION 13.  Waiver of Jury Trial Right.  EACH OF THE ESCROW
AGENT, THE PAYING AGENT, THE INVESTORS AND THE PASS THROUGH TRUSTEE
ACKNOWLEDGES AND ACCEPTS THAT IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT SUCH PARTY IRREVOCABLY WAIVES ITS RIGHT TO A
TRIAL BY JURY.

                 SECTION 14.  Counterparts.  This Agreement may be executed in
one or more counterparts, all of which taken together shall constitute one
instrument.





                                       14
<PAGE>   18
                 IN WITNESS WHEREOF, the Escrow Agent, the Paying Agent, the
Placement Agents and the Pass Through Trustee have caused this Escrow and
Paying Agent Agreement (Class B) to be duly executed as of the day and year
first above written.


                                      FIRST SECURITY BANK, NATIONAL ASSOCIATION
                                      as Escrow Agent


                                      By /s/ C. SCOTT NIELSEN
                                        -------------------------------
                                        Name:  C. Scott Nielsen
                                        Title: Vice President
<PAGE>   19
                                      MORGAN STANLEY & CO. INCORPORATED;
                                      BT ALEX. BROWN INCORPORATED;
                                      DONALDSON, LUFKIN & JENRETTE
                                           SECURITIES CORPORATION;
                                      GOLDMAN, SACHS & CO.,
                                      as Placement Agents


                                      By:  MORGAN STANLEY & CO.
                                            INCORPORATED


                                      By /s/ TOM CAHILL
                                        -------------------------------
                                        Name:
                                        Title:

                                      WILMINGTON TRUST COMPANY, not in its
                                      individual capacity, but solely as Pass
                                      Through Trustee for and on behalf of
                                      Atlas Air, Inc. Pass Through
                                      Trust 1998-1B-O


                                      By /s/ JAMES P. LAWLER
                                        -------------------------------
                                        Name:  JAMES P. LAWLER
                                        Title: Vice President


                                      WILMINGTON TRUST COMPANY
                                      as Paying Agent


                                      By /s/ JAMES P. LAWLER
                                        -------------------------------
                                        Name:  JAMES P. LAWLER
                                        Title: Vice President
<PAGE>   20
                                                                       EXHIBIT A

                     ATLAS AIR, INC. 1998-1B ESCROW RECEIPT

                                     No. __

                 This Escrow Receipt evidences a fractional undivided interest
in amounts ("Account Amounts") from time to time deposited into a certain
paying agent account (the "Paying Agent Account") described in the Escrow and
Paying Agent Agreement (Class B) dated as of February 9, 1998 (as amended,
modified or supplemented from time to time, the "Escrow and Paying Agent
Agreement") among First Security Bank, National Association, as Escrow Agent
(in such capacity, together with its successors in such capacity, the "Escrow
Agent"), Morgan Stanley & Co. Incorporated, BT Alex. Brown Incorporated,
Donaldson, Lufkin Jenrette Securities Corporation and Goldman, Sachs & Co., as
Placement Agents, Wilmington Trust Company as Pass Through Trustee (in such
capacity, together with its successors in such capacity, the "Pass Through
Trustee") and Wilmington Trust Company, as paying agent (in such capacity,
together with its successors in such capacity, the "Paying Agent").
Capitalized terms not defined herein shall have the meanings assigned to them
in the Escrow and Paying Agent Agreement.

                 This Escrow Receipt is issued under and is subject to the
terms, provisions and conditions of the Escrow and Paying Agent Agreement.  By
virtue of its acceptance hereof the holder of this Escrow Receipt assents and
agrees to be bound by the provisions of the Escrow and Paying Agent Agreement
and this Escrow Receipt.

                 This Escrow Receipt represents a fractional undivided interest
in amounts deposited from time to time in the Paying Agent Account, and grants
or represents no rights, benefits or interests of any kind in respect of any
assets or property other than such amounts.  This Escrow Receipt evidences the
same percentage interest in the Account Amounts as the Fractional Undivided
Interest in the Pass Through Trust evidenced by the Certificate to which this
Escrow Receipt is affixed.

                 All payments and distributions made to Receiptholders in
respect of the Escrow Receipt shall be made only from Account Amounts deposited
in the Paying Agent Account.  The holder of this Escrow Receipt, by its
acceptance of this Escrow Receipt, agrees that it will look solely to the
Account Amounts for any payment or distribution due to it pursuant to this
Escrow Receipt and that it will not have any recourse to Atlas, the Pass
Through Trustee, the Paying Agent or the Escrow Agent, except as expressly
provided herein or in the Pass Through Trust Agreement.  No Receiptholder of
this Escrow Receipt shall have any right to vote or in any manner otherwise
control the operation and management of the Paying Agent Account, nor shall
anything set forth herein, or contained in the terms of this Escrow Receipt, be
construed so as to constitute the Receiptholders from time to time as partners
or members of an association.
<PAGE>   21
                 This Escrow Receipt may not be assigned or transferred except
in connection with the assignment or transfer of the Certificate to which this
Escrow Receipt is affixed.  After payment to the holder hereof of its Escrow
Interest in the Final Distribution, upon the request of the Pass Through
Trustee, the holder hereof will return this Escrow Receipt to the Pass Through
Trustee.

                 The Paying Agent may treat the person in whose name the
Certificate to which this Escrow Receipt is attached as the owner hereof for
all purposes, and the Paying Agent shall not be affected by any notice to the
contrary.

                 THIS ESCROW RECEIPT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                 IN WITNESS WHEREOF, the Escrow Agent has caused this Escrow
Receipt to be duly executed.

Dated: ______________, 199_

                                        FIRST SECURITY BANK, NATIONAL
                                        ASSOCIATION
                                        as Escrow Agent

                                        By
                                          -------------------------------
                                          Name:
                                          Title:





                                       2
<PAGE>   22
                                                                       EXHIBIT B

                             WITHDRAWAL CERTIFICATE
                                   (Class B)

                   FIRST SECURITY BANK, NATIONAL ASSOCIATION
                                as Escrow Agent

Dear Sirs:

                 Reference is made to the Escrow and Paying Agent Agreement,
dated as of February 9, 1998 (the "Agreement").  We hereby certify to you that
the conditions to the obligations of the undersigned to execute a Participation
Agreement pursuant to the Note Purchase Agreement have been satisfied.
Pursuant to Section 1.02(c) of the Agreement, please execute the attached
Notice of Withdrawal and immediately transmit by facsimile to the Depositary,
at (312) 606-8428, Attention:  Claudia Heldring and (312) 904-9106, Attention:
Money Market Desk.

                                        Very truly yours,

                                        WILMINGTON TRUST COMPANY,
                                        not in its individual capacity but
                                        solely as Pass Through Trustee


                                        By
                                          ----------------------------------
                                          Name

Dated:  ____________, 199_
<PAGE>   23
                                                                       EXHIBIT C

                       PREPAYMENT WITHDRAWAL CERTIFICATE
                                   (Class B)

                   FIRST SECURITY BANK, NATIONAL ASSOCIATION
                                as Escrow Agent

Dear Sirs:

                 Reference is made to the Escrow and Paying Agent Agreement,
dated as of February 9, 1998 (the "Agreement").  Pursuant to Section 1.02(d) of
the Agreement, please execute the attached Notice of Withdrawal and immediately
transmit by facsimile to the Depositary, at (312) 606-8428, Attention:  Claudia
Heldring and (312) 904-9106, Attention:  Money Market Desk.

                                       Very truly yours,

                                       WILMINGTON TRUST COMPANY,
                                       not in its individual capacity but
                                       solely as Pass Through Trustee


                                       By
                                         -----------------------------------
                                         Name

Dated:  ____________, 199_