Document:

<PAGE>   1
                                                                    EXHIBIT 4.18

                             INTERCREDITOR AGREEMENT

                                   Dated as of
                                January 28, 2000

                                      AMONG

                            WILMINGTON TRUST COMPANY,
                         not in its individual capacity
                         but solely as Trustee under the
                      Atlas Air Pass Through Trust 2000-1A,
                      Atlas Air Pass Through Trust 2000-1B
                                       and
                      Atlas Air Pass Through Trust 2000-1C,

                      WESTDEUTSCHE LANDESBANK GIROZENTRALE,
                                New York Branch,
                         as Class A Liquidity Provider,

                     MORGAN STANLEY CAPITAL SERVICES, INC.,
                          as Class B Liquidity Provider
                                       and
                          as Class C Liquidity Provider

                                       AND

                            WILMINGTON TRUST COMPANY
                      not in its individual capacity except
                        as expressly set forth herein but
solely as Subordination Agent and Trustee

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                    <C>
                              ARTICLE I DEFINITIONS
SECTION 1.1.  Definitions                                                                2

                  ARTICLE II TRUST ACCOUNTS; CONTROLLING PARTY
SECTION 2.1.  Agreement to Terms of Subordination; Payments from Monies Received Only   23
SECTION 2.2.  Trust Accounts                                                            23
SECTION 2.3.  Deposits to the Collection Account and Special Payments Account           25
SECTION 2.4.  Distributions of Special Payments                                         25
SECTION 2.5.  Designated Representatives                                                28
SECTION 2.6.  Controlling Party                                                         29

      ARTICLE III RECEIPT, DISTRIBUTION AND APPLICATION OF AMOUNTS RECEIVED
SECTION 3.1.  Written Notice of Distribution                                            30
SECTION 3.2.  Distribution of Amounts on Deposit in the Collection Account              32
SECTION 3.3.  Distribution of Amounts on Deposit Following a Triggering Event           34
SECTION 3.4.  Other Payments                                                            36
SECTION 3.5.  Payments to the Trustees and the Liquidity Providers                      37
SECTION 3.6.  Liquidity Facilities                                                      37

                         ARTICLE IV EXERCISE OF REMEDIES
SECTION 4.1.  Directions from the Controlling Party                                     44
SECTION 4.2.  Remedies Cumulative                                                       46
SECTION 4.3.  Discontinuance of Proceedings                                             46
SECTION 4.4.  Right of Certificateholders to Receive Payments Not to Be Impaired        46
SECTION 4.5.  Undertaking for Costs                                                     46

  ARTICLE V DUTIES OF THE SUBORDINATION AGENT; AGREEMENTS OF TRUSTEES, ETC.             47
SECTION 5.1.  Notice of Indenture Event of Default or Triggering Event                  47
SECTION 5.2.  Indemnification                                                           47
SECTION 5.3.  No Duties Except as Specified in Intercreditor Agreement                  48
SECTION 5.4.  Notice from the Liquidity Providers and Trustees                          48

                       ARTICLE VI THE SUBORDINATION AGENT
SECTION 6.1.  Authorization; Acceptance of Trusts and Duties                            48
SECTION 6.2.  Absence of Duties                                                         49
SECTION 6.3.  No Representations or Warranties as to Documents                          49
SECTION 6.4.  No Segregation of Monies; No Interest                                     49
SECTION 6.5.  Reliance; Agents; Advice of Counsel                                       49
SECTION 6.6.  Capacity in Which Acting                                                  50
SECTION 6.7.  Compensation                                                              50
SECTION 6.8.  May Become Certificateholder                                              50
</TABLE>

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<TABLE>
<S>                                                                                    <C>
SECTION 6.9.    Subordination Agent Required; Eligibility                               50
SECTION 6.10.   Money to Be Held in Trust                                               51

                ARTICLE VII INDEMNIFICATION OF SUBORDINATION AGENT
SECTION 7.1.    Scope of Indemnification                                                51

                   ARTICLE VIII SUCCESSOR SUBORDINATION AGENT
SECTION 8.1.    Replacement of Subordination Agent; Appointment of Successor            51

                      ARTICLE IX SUPPLEMENTS AND AMENDMENTS
SECTION 9.1.    Amendments, Waivers, etc.                                               52
SECTION 9.2.    Subordination Agent Protected                                           54
SECTION 9.3.    Effect of Supplemental Agreements                                       54
SECTION 9.4.    Notice to Rating Agencies                                               55

                             ARTICLE X MISCELLANEOUS
SECTION 10.1.   Termination of Intercreditor Agreement                                  55
SECTION 10.2.   Intercreditor Agreement for Benefit of Trustees, Liquidity Providers
                and Subordination Agent                                                 55
SECTION 10.3.   Notices                                                                 55
SECTION 10.4.   Severability                                                            57
SECTION 10.5.   No Oral Modifications or Continuing Waivers                             57
SECTION 10.6.   Successors and Assigns                                                  57
SECTION 10.7.   Headings                                                                57
SECTION 10.8.   Counterpart Form                                                        57
SECTION 10.9.   Subordination                                                           57
SECTION 10.10.  Governing Law                                                           59
SECTION 10.11.  Submission to Jurisdiction; Waiver of Jury Trial; Waiver of Immunity    59
</TABLE>

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                             INTERCREDITOR AGREEMENT

                  INTERCREDITOR AGREEMENT dated as of January 28, 2000, among
WILMINGTON TRUST COMPANY, a Delaware banking corporation ("WTC"), not in its
individual capacity but solely as Trustee of each Trust (each as defined below);
Westdeutsche Landesbank Girozentrale, a German banking institution organized
under the law of the State of North Rhine-Westphalia, acting through its New
York Branch ("WESTLB"), as Class A Liquidity Provider; MORGAN STANLEY CAPITAL
SERVICES, INC. ("MSCS"), a corporation organized under the laws of Delaware, as
Class B Liquidity Provider and as Class C Liquidity Provider; and WILMINGTON
TRUST COMPANY, not in its individual capacity except as expressly set forth
herein, but solely as Subordination Agent and trustee hereunder (in such
capacity, together with any successor appointed pursuant to Article VIII hereof,
the "Subordination Agent").

                  WHEREAS, all capitalized terms used herein shall have the
respective meanings referred to in Article I hereof;

                  WHEREAS, pursuant to each Indenture (i) in the case of each
Aircraft that is owned by Atlas at the time such Indenture is entered into (the
"Owned Aircraft"), Atlas will issue on a recourse basis, up to four series of
Equipment Notes to finance the purchase of such Aircraft, and (ii) in the case
of each Aircraft that is leased to Atlas pursuant to a related Lease at the time
such Indenture is entered into (the "Leased Aircraft"), the related Owner
Trustee will issue on a nonrecourse basis, three series of Equipment Notes to
finance the purchase of such Aircraft;

                  WHEREAS, pursuant to the Financing Agreements, each Trust will
acquire Equipment Notes having an interest rate equal to the interest rate
applicable to the Certificates to be issued by such Trust;

                  WHEREAS, pursuant to each Trust Agreement, the Trust created
thereby proposes to issue a single class of Certificates (a "Class") bearing the
interest rate and having the final distribution date described in such Trust
Agreement on the terms and subject to the conditions set forth therein;

                  WHEREAS, pursuant to the Placement Agreement, the Placement
Agents propose to purchase the Certificates issued by each Trust in the
aggregate face amount set forth opposite the name of such Trust on Schedule I
thereto on the terms and subject to the conditions set forth therein;

                  WHEREAS, WESTLB (with respect to the Class A Trust) and MSCS
(with respect to the Class B Trust and the Class C Trust) propose to enter into
separate revolving credit agreements (each, a "Liquidity Facility") with the
Subordination Agent, as agent for the Trustee of such Trusts, respectively, for
the benefit of the Certificateholders of such Trusts;

                  WHEREAS, Morgan Stanley Dean Witter & Co. (the "Guarantor")
will guarantee in full, pursuant to separate Guarantee Agreements dated as of
the date hereof (each, a

<PAGE>   5

"Guarantee Agreement"), the obligations of MSCS under the Class B Liquidity
Facility and the Class C Liquidity Facility, respectively; and

                  WHEREAS, it is a condition precedent to the obligations of the
Placement Agents under the Placement Agreement that the Subordination Agent, the
Trustees and the Liquidity Providers agree to the terms of subordination set
forth in this Agreement in respect of each Class of Certificates, and the
Subordination Agent, the Trustees and the Liquidity Providers, by entering into
this Agreement, hereby acknowledge and agree to such terms of subordination and
the other provisions of this Agreement.

                  NOW, THEREFORE, in consideration of the mutual agreements
herein contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.1. Definitions. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:

                  (1) the terms used herein that are defined in this Article
         have the meanings assigned to them in this Article, and include the
         plural as well as the singular;

                  (2) all references in this Agreement to designated "Articles",
         "Sections" and other subdivisions are to the designated Articles,
         Sections and other subdivisions of this Agreement;

                  (3) the words "herein", "hereof" and "hereunder" and other
         words of similar import refer to this Agreement as a whole and not to
         any particular Article, Section or other subdivision; and

                  (4) the term "including" shall mean "including without
         limitation".

                  "Acceleration" means, with respect to the amounts payable in
respect of the Equipment Notes issued under any Indenture, such amounts becoming
immediately due and payable by declaration or otherwise. "Accelerate",
"Accelerated" and "Accelerating" have meanings correlative to the foregoing.

                  "Adjusted Expected Distributions" means, with respect to the
Certificates of any Trust on any Current Distribution Date, the sum of (x)
accrued and unpaid interest on such Certificates (excluding interest, if any,
payable with respect to the Deposits related to such Trust) and (y) the greater
of:

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                  (A) the difference between (x) the Pool Balance of such
         Certificates as of the immediately preceding Distribution Date (or, if
         the Current Distribution Date is the first Distribution Date, the
         original aggregate face amount of the Certificates of such Trust) and
         (y) the Pool Balance of such Certificates as of the Current
         Distribution Date calculated on the basis that (i) the principal of the
         Non-Performing Equipment Notes held in such Trust has been paid in full
         and such payments have been distributed to the holders of such
         Certificates, (ii) the principal of the Performing Equipment Notes held
         in such Trust has been paid when due (but without giving effect to any
         Acceleration of Performing Equipment Notes) and such payments have been
         distributed to the holders of such Certificates and (iii) the principal
         of any Equipment Notes formerly held in such Trust that have been sold
         pursuant to the terms hereof has been paid in full and such payments
         have been distributed to the holders of such Certificates, but without
         giving effect to any reduction in the Pool Balance as a result of any
         distribution attributable to Deposits occurring after the immediately
         preceding Distribution Date (or, if the Current Distribution Date is
         the first Distribution Date, occurring after the initial issuance of
         the Certificates of such Trust), and

                  (B) the amount of the excess, if any, of (i) the Pool Balance
         of such Class of Certificates as of the immediately preceding
         Distribution Date (or, if the Current Distribution Date is the first
         Distribution Date, the original aggregate face amount of the
         Certificates of such Trust), less the amount of the Deposits for such
         Class of Certificates as of such preceding Distribution Date (or, if
         the Current Distribution Date is the first Distribution Date, the
         original aggregate amount of the Deposits for such Class of
         Certificates) other than any portion of such Deposits thereafter used
         to acquire Equipment Notes pursuant to the Note Purchase Agreement,
         over (ii) the Aggregate LTV Collateral Amount for such Class of
         Certificates for the Current Distribution Date;

provided that, until the date of the initial LTV Appraisals, clause (B) shall
not apply.

                  For purposes of calculating Adjusted Expected Distributions
with respect to the Certificates of any Trust, any premium paid on the Equipment
Notes held in such Trust that has not been distributed to the Certificateholders
of such Trust (other than such premium or a portion thereof applied to the
payment of interest on the Certificates of such Trust or the reduction of the
Pool Balance of such Trust) shall be added to the amount of Adjusted Expected
Distributions.

                  "Advance", with respect to any Liquidity Facility, means any
Advances as defined in such Liquidity Facility.

                  "Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or under common control
with such Person. For the purposes of this definition, "control" means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether through the ownership of voting
securities or by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.

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<PAGE>   7

                  "Aggregate LTV Collateral Amount" for any Class of
Certificates for any Distribution Date means the product of (i) the sum of the
applicable LTV Collateral Amounts for each Leased Aircraft and Owned Aircraft,
minus (ii) the Pool Balance for each Class of Certificates, if any, senior to
such Class, after giving effect to any distribution of principal on such
Distribution Date with respect to such senior Class or Classes.

                  "Aircraft" has the meaning set forth in the Note Purchase
Agreement and, with respect to each Indenture, means the "Aircraft" referred to
therein.

                  "Appraisal" means a current fair market value appraisal (which
may be a "desktop" appraisal) performed by any Appraiser or any other nationally
recognized appraiser on the basis of an arm's-length transaction between an
informed and willing purchaser under no compulsion to buy and an informed and
willing seller under no compulsion to sell and both having knowledge of all
relevant facts.

                  "Appraised Current Market Value" of any Leased Aircraft or
Owned Aircraft means the lower of the average and the median of the three most
recent Appraisals of such Aircraft.

                  "Appraisers" means AvS, MBA and Simat, Helliesen & Eichner,
Inc.

                  "Atlas" means Atlas Air, Inc., a Delaware corporation, and its
successors and assigns.

                  "Atlas Bankruptcy Event" means the occurrence and continuation
of any of the following:

                  (a) Atlas shall consent to the appointment of or the taking of
         possession by a receiver, trustee or liquidator of itself or of a
         substantial part of its property, or Atlas shall admit in writing its
         inability to pay its debts generally as they come due, or does not pay
         its debts generally as they become due or shall make a general
         assignment for the benefit of creditors, or Atlas shall file a
         voluntary petition in bankruptcy or a voluntary petition or an answer
         seeking reorganization, liquidation or other relief in a case under any
         bankruptcy laws or other insolvency laws (as in effect at such time) or
         an answer admitting the material allegations of a petition filed
         against Atlas in any such case, or Atlas shall seek relief by voluntary
         petition, answer or consent, under the provisions of any other
         bankruptcy or other similar law providing for the reorganization or
         winding-up of corporations (as in effect at such time) or Atlas shall
         seek an agreement, composition, extension or adjustment with its
         creditors under such laws, or Atlas' board of directors shall adopt a
         resolution authorizing corporate action in furtherance of any of the
         foregoing; or

                  (b) an order, judgment or decree shall be entered by any court
         of competent jurisdiction appointing, without the consent of Atlas, a
         receiver, trustee or liquidator of Atlas or of any substantial part of
         its property, or any substantial part of the property of

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<PAGE>   8

         Atlas shall be sequestered, or granting any other relief in respect of
         Atlas as a debtor under any bankruptcy laws or other insolvency laws
         (as in effect at such time), and any such order, judgment or decree of
         appointment or sequestration shall remain in force undismissed,
         unstayed and unvacated for a period of 60 days after the date of entry
         thereof; or

                  (c) a petition against Atlas in a case under any bankruptcy
         laws or other insolvency laws (as in effect at such time) is filed and
         not withdrawn or dismissed within 60 days thereafter, or if, under the
         provisions of any law providing for reorganization or winding-up of
         corporations which may apply to Atlas, any court of competent
         jurisdiction assumes jurisdiction, custody or control of Atlas or of
         any substantial part of its property and such jurisdiction, custody or
         control remains in force unrelinquished, unstayed and unterminated for
         a period of 60 days.

                  "Atlas Provisions" has the meaning specified in Section
9.1(a).

                  "Available Amount" means, with respect to any Liquidity
Facility on any drawing date, subject to the proviso contained in the first
sentence of Section 3.6(g) hereof, an amount equal to the Maximum Commitment (as
defined in such Liquidity Facility) of such Liquidity Facility at such time.

                  "AvS" means Aviation Solutions Inc.

                  "Basic Agreement" means the Pass Through Trust Agreement dated
as of January 28, 2000 between Atlas and WTC, not in its individual capacity,
except as otherwise expressly provided therein, but solely as trustee.

                  "Business Day" means any day other than a Saturday or Sunday
or a day on which commercial banks are required or authorized to close in
Denver, Colorado, New York, New York, or, so long as any Certificate is
outstanding, the city and state in which any Trustee, the Subordination Agent or
any Loan Trustee maintains its Corporate Trust Office or receives and disburses
funds, and that, solely with respect to draws under any Liquidity Facility, also
is a "Business Day" as defined in such Liquidity Facility.

                  "Cash Collateral Account" means the Class A Cash Collateral
Account, the Class B Cash Collateral Account or the Class C Cash Collateral
Account, as applicable.

                  "Certificate" means a Class A Certificate, a Class B
Certificate or a Class C Certificate, as applicable.

                  "Certificateholder" means any holder of one or more
Certificates.

                  "Class" has the meaning assigned to such term in the
preliminary statements to this Agreement.

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<PAGE>   9

                  "Class A Cash Collateral Account" means an Eligible Deposit
Account in the name of the Subordination Agent maintained at an Eligible
Institution, which shall be the Subordination Agent if it shall so qualify, into
which all amounts drawn under the Class A Liquidity Facility pursuant to Section
3.6(c), 3.6(d) or 3.6(i) shall be deposited.

                  "Class A Certificateholder" means, at any time, any holder of
one or more Class A Certificates.

                  "Class A Certificates" means the certificates issued by the
Class A Trust, substantially in the form of Exhibit A to the Class A Trust
Agreement, and authenticated by the Class A Trustee, representing fractional
undivided interests in the Class A Trust, and any certificates issued in
exchange therefor or replacement thereof pursuant to the terms of the Class A
Trust Agreement.

                  "Class A Liquidity Facility" means, initially, the Revolving
Credit Agreement, dated as of the date hereof, between the Subordination Agent,
as agent and trustee for the Class A Trustee, and WESTLB and, from and after the
replacement of such Agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.

                  "Class A Liquidity Provider" means WESTLB, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity Facility
to replace the Class A Liquidity Facility pursuant to Section 3.6(e).

                  "Class A Trust" means the Atlas Air Pass Through Trust 2000-1A
created and administered pursuant to the Class A Trust Agreement.

                  "Class A Trust Agreement" means the Basic Agreement, as
supplemented by Supplement No. 2000-1A thereto dated as of the date hereof,
governing the creation and administration of the Atlas Air Pass Through Trust
2000-1A and the issuance of the Class A Certificates, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
its terms.

                  "Class A Trustee" means WTC, not in its individual capacity
except as expressly set forth in the Class A Trust Agreement, but solely as
trustee under the Class A Trust Agreement, together with any successor trustee
appointed pursuant thereto.

                  "Class B Cash Collateral Account" means an Eligible Deposit
Account in the name of the Subordination Agent maintained at an Eligible
Institution, which shall be the Subordination Agent if it shall so qualify, into
which all amounts drawn under the Class B Liquidity Facility pursuant to Section
3.6(c), 3.6(d) or 3.6(i) shall be deposited.

                  "Class B Certificateholder" means, at any time, any holder of
one or more Class B Certificates.

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<PAGE>   10

                  "Class B Certificates" means the certificates issued by the
Class B Trust, substantially in the form of Exhibit A to the Class B Trust
Agreement, and authenticated by the Class B Trustee, representing fractional
undivided interests in the Class B Trust, and any certificates issued in
exchange therefor or replacement thereof pursuant to the terms of the Class B
Trust Agreement.

                  "Class B Liquidity Facility" means, initially, the Revolving
Credit Agreement, dated as of the date hereof, between the Subordination Agent,
as agent and trustee for the Class B Trustee, and MSCS and, from and after the
replacement of such Agreement pursuant hereto, the Replacement Liquidity
Facility therefor, if any, in each case as amended, supplemented or otherwise
modified from time to time in accordance with its terms.

                  "Class B Liquidity Provider" means MSCS, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity Facility
to replace the Class B Liquidity Facility pursuant to Section 3.6(e).

                  "Class B Trust" means the Atlas Air Pass Through Trust 2000-1B
created and administered pursuant to the Class B Trust Agreement.

                  "Class B Trust Agreement" means the Basic Agreement, as
supplemented by Supplement No. 2000-1B thereto dated as of the date hereof,
governing the creation and administration of the Atlas Air Pass Through Trust
2000-1B and the issuance of the Class B Certificates, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
its terms.

                  "Class B Trustee" means WTC, not in its individual capacity
except as expressly set forth in the Class B Trust Agreement, but solely as
trustee under the Class B Trust Agreement, together with any successor trustee
appointed pursuant thereto.

                  "Class C Cash Collateral Account" means an Eligible Deposit
Account in the name of the Subordination Agent and maintained at an Eligible
Institution, which shall be the Subordination Agent if it shall so qualify, into
which all amounts drawn under the Class C Liquidity Facility pursuant to Section
3.6(c), 3.6(d) or 3.6(i) shall be deposited.

                  "Class C Certificateholder" means, at any time, any holder of
one or more Class C Certificates.

                  "Class C Certificates" means the certificates issued by the
Class C Trust, substantially in the form of Exhibit A to the Class C Trust
Agreement, and authenticated by the Class C Trustee, representing fractional
undivided interests in the Class C Trust, and any certificates issued in
exchange therefor or replacement thereof pursuant to the terms of the Class C
Trust Agreement.

                  "Class C Liquidity Facility" means, initially, the Revolving
Credit Agreement. dated as of the date hereof, between the Subordination Agent,
as agent and trustee for the Class C

                                       7
<PAGE>   11

Trustee, and MSCS, and, from and after the replacement of such Agreement
pursuant hereto, the Replacement Liquidity Facility therefor, if any, in each
case as amended, supplemented or otherwise modified from time to time in
accordance with its terms.

                  "Class C Liquidity Provider means MSCS, together with any
Replacement Liquidity Provider which has issued a Replacement Liquidity Facility
to replace the Class C Liquidity Facility pursuant to Section 3.6(e).

                  "Class C Trust" means the Atlas Air Pass Through Trust 2000-1C
created and administered pursuant to the Class C Trust Agreement.

                  "Class C Trust Agreement" means the Basic Agreement, as
supplemented by Supplement No. 2000-1C thereto dated as of the date hereof,
governing the creation and administration of the Atlas Air Pass Through Trust
2000-1C and the issuance of the Class C Certificates, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
its terms.

                  "Class C Trustee" means WTC, not in its individual capacity
except as expressly set forth in the Class C Trust Agreement, but solely as
trustee under the Class C Trust Agreement, together with any successor trustee
appointed pursuant thereto.

                  "Class D Certificates" means any pass through certificates
issued by the Class D Trust representing fractional undivided interests in the
Class D Trust.
                  "Class D Trust" means the Atlas Air Pass Through Trust
2000-1D, if and when established.

                  "Closing Date" means January 28, 2000.

                  "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and Treasury Regulations promulgated thereunder.

                  "Collection Account" means the Eligible Deposit Account
established by the Subordination Agent pursuant to Section 2.2 which the
Subordination Agent shall make deposits in and withdrawals from in accordance
with this Agreement.

                  "Controlling Party" means the Person entitled to act as such
pursuant to the terms of Section 2.6.

                  "Corporate Trust Office" means, with respect to any Trustee,
the Subordination Agent or any Loan Trustee, the office of such Person in the
city at which, at any particular time, its corporate trust business shall be
principally administered.

                  "Current Distribution Date" means a Distribution Date
specified as a reference date for calculating the Expected Distributions or the
Adjusted Expected Distributions with respect to the Certificates of any Trust as
of such Distribution Date.

                                       8
<PAGE>   12

                  "DCR" means Duff & Phelps Credit Rating Co.

                  "Deposit Agreement" shall mean, with respect to any Class, the
Deposit Agreement pertaining to such Class dated the date hereof between the
Escrow Agent and the Depositary, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.

                  "Depositary" means Westdeutsche Landesbank Girozentrale,
acting through its New York Branch, as depositary under each Deposit Agreement.

                  "Deposit" with respect to any Class, shall have the meaning
set forth in the Deposit Agreement pertaining to such Class.

                  "Designated Representatives" means the Subordination Agent
Representatives, the Trustee Representatives and the LP Representatives
identified under Section 2.5.

                  "Distribution Date" means a Regular Distribution Date or a
Special Distribution Date.

                  "Dollars" means United States dollars.

                  "Downgrade Drawing" has the meaning assigned to such term in
Section 3.6(c).

                  "Downgraded Facility" has the meaning assigned to such term in
Section 3.6(c).

                  "Drawing" means an Interest Drawing, a Final Drawing, a
Non-Extension Drawing or a Downgrade Drawing, as the case may be.

                  "Eligible Deposit Account" means either (a) a segregated
account with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States of America or any one of the states thereof or the District
of Columbia (or any U.S. branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as any
of the securities of such depository institution has a long-term unsecured debt
rating from each Rating Agency of at least A-3 or its equivalent. An Eligible
Deposit Account may be maintained with a Liquidity Provider so long as such
Liquidity Provider is an Eligible Institution; provided that such Liquidity
Provider shall have waived all rights of set-off and counterclaim with respect
to such account; and provided further that no Cash Collateral Account may be
maintained with a Liquidity Provider at any time Atlas holds any participation
in the related Liquidity Facility unless written confirmation shall have been
received from each Rating Agency prior to such time to the effect that such
maintenance of the Cash Collateral Account with the Liquidity Provider will not
result in a withdrawal or downgrading of the ratings of the Certificates.

                  "Eligible Institution" means (a) the corporate trust
department of the Subordination Agent or any Trustee, as applicable, or (b) a
depository institution organized under

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<PAGE>   13

the laws of the United States of America or any one of the states thereof or the
District of Columbia (or any U.S. branch of a foreign bank), which has a
long-term unsecured debt rating from each Rating Agency of at least A-3 or its
equivalent; provided that a Liquidity Provider shall not qualify as an Eligible
Institution at any time Atlas holds any participation in the related Liquidity
Facility unless written confirmation shall have been received from each Rating
Agency to the effect that such Liquidity Provider's status as an Eligible
Institution will not result in a withdrawal or downgrading of the ratings of the
Certificates.

                  "Eligible Investments" means (a) investments in obligations
of, or guaranteed by, the United States Government having maturities no later
than 90 days following the date of such investment, (b) investments in open
market commercial paper of any corporation incorporated under the laws of the
United States of America or any state thereof with a short-term unsecured debt
rating issued by Moody's and S&P of at least P-1 and A-1, respectively, having
maturities no later than 90 days following the date of such investment or (c)
investments in negotiable certificates of deposit, time deposits, banker's
acceptances, commercial paper or other direct obligations of, or obligations
guaranteed by, commercial banks organized under the laws of the United States or
of any political subdivision thereof (or any U.S. branch of a foreign bank) with
issuer ratings of at least B/C by Thomson Bankwatch, having maturities no later
than 90 days following the date of such investment; provided, however, that (x)
all Eligible Investments that are bank obligations shall be denominated in U.S.
dollars; and (y) the aggregate amount of Eligible Investments at any one time
that are bank obligations issued by any one bank shall not be in excess of 5% of
such bank's capital surplus; provided further that (1) any investment of the
types described in clauses (a), (b) and (c) above may be made through a
repurchase agreement in commercially reasonable form with a bank or other
financial institution qualifying as an Eligible Institution so long as such
investment is held by a third party custodian also qualifying as an Eligible
Institution, and (2) all such investments set forth in clause (a), (b) or (c)
above mature no later than the Business Day immediately preceding the next
Regular Distribution Date; provided further, however, that in the case of any
Eligible Investment issued by a domestic branch of a foreign bank, the income
from such investment shall be from sources within the United States for purposes
of the Code. Notwithstanding the foregoing, no investment of the types described
in clause (b) or (c) above which is issued or guaranteed by a Liquidity Provider
or Atlas or any of their respective Affiliates, and no investment in the
obligations of any one bank in excess of $10,000,000, shall be an Eligible
Investment at any time Atlas holds any participation in the related Liquidity
Facility unless written confirmation shall have been received from each Rating
Agency that the making of such investment will not result in a withdrawal or
downgrading of the ratings of the Certificates.

                  "Equipment Notes" means, at any time, the Series A Equipment
Notes, the Series B Equipment Notes and the Series C Equipment Notes,
collectively, and in each case, any Equipment Notes issued in exchange therefor
or replacement thereof pursuant to the terms of the Indentures.

                  "Escrow Agent" means First Security Bank, National
Association, as escrow agent under each Escrow and Paying Agent Agreement,
together with its successors in such capacity.

                                       10
<PAGE>   14

                  "Escrow and Paying Agent Agreement" shall mean, with respect
to any Class, the Escrow and Paying Agent Agreement pertaining to such Class
dated the date hereof among the Escrow Agent, the Placement Agents, the Trustee
for such Class and the Paying Agent, as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof.

                  "Expected Distributions" means, with respect to the
Certificates of any Trust on any Current Distribution Date, the sum of (x)
accrued and unpaid interest on such Certificates (excluding interest, if any,
payable with respect to the Deposits related to such Trust) and (y) the
difference between (A) the Pool Balance of such Certificates as of the
immediately preceding Distribution Date (or, if the Current Distribution Date is
the first Distribution Date, the original aggregate face amount of the
Certificates of such Trust) and (B) the Pool Balance of such Certificates as of
the Current Distribution Date calculated on the basis that (i) the principal of
the Equipment Notes held in such Trust has been paid when due (whether at stated
maturity or upon redemption, prepayment, purchase or Acceleration or otherwise)
and such payments have been distributed to the holders of such Certificates and
(ii) the principal of any Equipment Notes formerly held in such Trust that have
been sold pursuant to the terms hereof has been paid in full and such payments
have been distributed to the holders of such Certificates, but without giving
effect to any reduction in the Pool Balance as a result of any distribution
attributable to Deposits occurring after the immediately preceding Distribution
Date (or, if the Current Distribution Date is the first Distribution Date,
occurring after the initial issuance of the Certificates of such Trust). For
purposes of calculating Expected Distributions with respect to the Certificates
of any Trust, any premium paid on the Equipment Notes held in such Trust which
has not been distributed to the Certificateholders of such Trust (other than
such premium or a portion thereof applied to the payment of interest on the
Certificates of such Trust or the reduction of the Pool Balance of such Trust)
shall be added to the amount of such Expected Distributions.

                  "Expiry Date" with respect to any Liquidity Facility, shall
have the meaning set forth in such Liquidity Facility.

                  "Fee Letter" means, collectively, the WESTLB Fee Letter and
the MSCS Fee Letter and any fee letter entered into between the Subordination
Agent and any Replacement Liquidity Provider.

                  "Final Distributions" means, with respect to the Certificates
of any Trust on any Distribution Date, the sum of (x) the aggregate amount of
all accrued and unpaid interest on such Certificates (excluding interest, if
any, payable with respect to the Deposits relating to such Trust) and (y) the
Pool Balance of such Certificates as of the immediately preceding Distribution
Date (less the amount of the Deposit for such Class of Certificates as of such
preceding Distribution Date other than any portion of such Deposit thereafter
used to acquire Equipment Notes pursuant to the Note Purchase Agreement). For
purposes of calculating Final Distributions with respect to the Certificates of
any Trust, any premium paid on the Equipment Notes held in such Trust which has
not been distributed to the Certificateholders of such Trust (other than such
premium or a portion thereof applied to the payment of interest on the
Certificates of such Trust

                                       11
<PAGE>   15

or the reduction of the Pool Balance of such Trust) shall be added to the amount
of such Final Distributions.

                  "Final Drawing" has the meaning assigned to such term in
Section 3.6(i).

                  "Final Legal Distribution Date" means (i) with respect to the
Class A Certificates, July 2, 2021 (ii) with respect to the Class B
Certificates, July 2, 2017 and (iii) with respect to the Class C Certificates,
July 2, 2011.

                  "Financing Agreement" means each of the Participation
Agreements and the Note Purchase Agreement.

                  "Guarantee Agreement" has the meaning assigned to such term in
the preliminary statements to this Agreement.

                  "Guarantee Event" has the meaning assigned to such term in
Section 3.6(c).

                  "Guarantor" has the meaning assigned to such term in the
preliminary statements to this Agreement.

                  "Indenture" means each of the Trust Indentures entered into by
the Loan Trustee, and the Owner Trustee or Atlas, pursuant to the Note Purchase
Agreement, in each case as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.

                  "Indenture Event of Default" means, with respect to any
Indenture, any Event of Default (as such term is defined in such Indenture)
thereunder.

                  "Interest Drawing" has the meaning assigned to such term in
Section 3.6(a).

                  "Interest Payment Date" means, with respect to any Liquidity
Facility, each date on which interest is due and payable under each Liquidity
Facility on a Downgrade Drawing, Non-Extension Drawing or Final Drawing
thereunder.

                  "Investment Earnings" means investment earnings on funds on
deposit in the Trust Accounts net of losses and investment expenses of the
Subordination Agent in making such investments.

                  "Lease" means, with respect to each Indenture pertaining to a
Leased Aircraft, the "Lease" referred to therein.

                  "Leased Aircraft" has the meaning assigned to such term in the
preliminary statements of this Agreement.

                                       12
<PAGE>   16

                  "Leased Aircraft Participation Agreement" means a
participation agreement substantially in the form of Exhibit A-1 to the Note
Purchase Agreement, as the same may be amended, supplemented or otherwise
modified in accordance with its terms.

                  "Lending Office" means, with respect to any Liquidity
Facility, the lending office of such Liquidity Provider thereunder, presently
located at New York, New York, for WESTLB and MSCS, or such other lending office
as such Liquidity Provider from time to time shall notify the applicable Trustee
as its lending office under any such Liquidity Facility; provided that such
Liquidity Provider shall not change its Lending Office to a Lending Office
outside the United States of America except in accordance with Section 3.01,
3.02 or 3.03 of any such Liquidity Facility.

                  "Lien" means any mortgage, pledge, lien, charge, claim,
disposition of title, encumbrance, lease, sublease, sub-sublease or security
interest of any kind, including, without limitation, any thereof arising under
any conditional sales or other title retention agreement.

                  "Liquidity Event of Default" with respect to any Liquidity
Facility, has the meaning assigned to such term in such Liquidity Facility.

                  "Liquidity Expenses" means all Liquidity Obligations other
than (i) the principal amount of any Drawings under the Liquidity Facilities and
(ii) any interest accrued on any Liquidity Obligations.

                  "Liquidity Facility" means, at any time, the Class A Liquidity
Facility, the Class B Liquidity Facility or the Class C Liquidity Facility.

                  "Liquidity Obligations" means all principal, interest, fees
and other amounts owing to the Liquidity Providers under the Liquidity
Facilities, Section 8.1 of the Owned Aircraft Participation Agreements, Section
9.1 of the Leased Aircraft Participation Agreements or the Fee Letters.

                  "Liquidity Provider" means, at any time, the Class A Liquidity
Provider, the Class B Liquidity Provider or the Class C Liquidity Provider, as
applicable.

                  "Loan Trustee" means, with respect to any Indenture, the loan
trustee thereunder.

                  "LP Incumbency Certificate" has the meaning assigned to such
term in Section 2.5(b).

                  "LP Representatives" has the meaning assigned to such term in
Section 2.5(b).

                  "LTV Appraisals" has the meaning assigned to such term in
Section 4.1(a).

                  "LTV Collateral Amount" of any Leased Aircraft or Owned
Aircraft for any Class of Certificates means, as of any Distribution Date, the
lesser of (i) the LTV Ratio for such Class of Certificates multiplied by the
Appraised Current Market Value of such Aircraft (or with

                                       13
<PAGE>   17

respect to any such Aircraft which has suffered an Event of Loss under and as
defined in the relevant Lease (in the case of a Leased Aircraft) or Indenture
(in the case of an Owned Aircraft), the amount of the insurance proceeds paid to
the related Loan Trustee in respect thereof to the extent then held by such Loan
Trustee (and/or on deposit in the Special Payments Account) or payable to such
Loan Trustee in respect thereof) and (ii) the outstanding principal amount of
the Equipment Notes secured by such Aircraft after giving effect to any
principal payments of such Equipment Notes on or before such Distribution Date.

                  "LTV Ratio" means for the Class A Certificates 39.0%, for the
Class B Certificates 53.0%, and for the Class C Certificates, 68.0%.

                  "MBA" means Morten Beyer & Agnew.

                  "Minimum Sale Price" means, with respect to any Aircraft or
the Equipment Notes issued in respect of such Aircraft, at any time, the lesser
of (a) 75% of the Appraised Current Market Value of such Aircraft and (b) the
aggregate outstanding principal amount of such Equipment Notes, plus accrued and
unpaid interest thereon.

                  "Moody's" means Moody's Investors Service, Inc.

                  "MSCS" has the meaning assigned to such term in the recital of
the parties to this Agreement.

                  "MSCS Fee Letter" means the Fee Letter dated the date hereof,
between MSCS and the Subordination Agent with respect to the Class B Liquidity
Facility and the Class C Liquidity Facility.

                  "MSCS Liquidity Facilities" means the Class B Liquidity
Facility and the Class C Liquidity Facility.

                  "Non-Controlling Party" means, at any time, any Trustee or
Liquidity Provider which is not the Controlling Party at such time.

                  "Non-Extended Facility" has the meaning assigned to such term
in Section 3.6(d).

                  "Non-Extension Drawing" has the meaning assigned to such term
in Section 3.6(d).

                  "Non-Performing Equipment Note" means an Equipment Note that
is not a Performing Equipment Note.

                  "Note Purchase Agreement" means the Note Purchase Agreement
dated as of the date hereof, among Atlas, each Trustee, the Escrow Agent, the
Subordination Agent and the Paying Agent.

                                       14
<PAGE>   18

                  "Officer's Certificate" of any Person means a certification
signed by a Responsible Officer of such Person.

                  "Operative Agreements" means this Agreement, the Liquidity
Facilities, the Indentures, the Trust Agreements, the Placement Agreement, the
Financing Agreements, the Leases, the Fee Letter, the Equipment Notes and the
Certificates, together with all exhibits and schedules included with any of the
foregoing.

                  "Outstanding" means, when used with respect to each Class of
Certificates, as of the date of determination, all Certificates of such Class
theretofore authenticated and delivered under the related Trust Agreement,
except:

                  (i) Certificates of such Class theretofore canceled by the
         Registrar (as defined in such Trust Agreement) or delivered to the
         Trustee thereunder or such Registrar for cancellation;

                  (ii) Certificates of such Class for which money in the full
         amount required to make the final distribution with respect to such
         Certificates pursuant to Section 11.01 of such Trust Agreement has been
         theretofore deposited with the related Trustee in trust for the holders
         of such Certificates as provided in Section 4.01 of such Trust
         Agreement pending distribution of such money to such Certificateholders
         pursuant to such final distribution payment; and

                  (iii) Certificates of such Class in exchange for or in lieu of
         which other Certificates have been authenticated and delivered pursuant
         to such Trust Agreement;

provided, however, that in determining whether the holders of the requisite
Outstanding amount of such Certificates have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, any Certificates
owned by Atlas or any of its Affiliates shall be disregarded and deemed not to
be Outstanding, except that, in determining whether such Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates that such Trustee knows to be so
owned shall be so disregarded. Certificates so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the applicable Trustee the pledgee's right so to act with
respect to such Certificates and that the pledgee is not Atlas or any of its
Affiliates.

                  "Overdue Scheduled Payment" means any Scheduled Payment which
is not in fact received by the Subordination Agent within five days after the
Scheduled Payment Date relating thereto.

                  "Owned Aircraft" has the meaning assigned to such term in the
preliminary statements of this Agreement.

                                       15
<PAGE>   19

                  "Owned Aircraft Participation Agreement" means a participation
agreement substantially in the form of Exhibit C-1 to the Note Purchase
Agreement, as the same may be amended, supplemented or otherwise modified in
accordance with its terms.

                  "Owner Trustee" means, with respect to any Indenture
pertaining to a Leased Aircraft, the Owner Trustee (as defined therein) not in
its individual capacity but solely as trustee under the related owner trust
agreement, together with any successor trustee appointed pursuant to such owner
trust agreement.

                  "Participation Agreement" means, collectively, any Leased
Aircraft Participation Agreement and any Owned Aircraft Participation Agreement.

                  "Payee" has the meaning assigned to such term in Section
2.4(e).

                  "Paying Agent" means WTC, as paying agent under each Escrow
and Paying Agent Agreement, together with its successors in such capacity.

                  "Performing Equipment Note" means an Equipment Note with
respect to which no payment default has occurred and is continuing (without
giving effect to any Acceleration); provided that in the event of a bankruptcy
proceeding involving Atlas under Title 11 of the United States Code (the
"Bankruptcy Code"), (i) any payment default existing during the 60- day period
under Section 1110(a)(1)(A) of the Bankruptcy Code (or such longer period as may
apply under Section 1110(b) of the Bankruptcy Code) (the "Section 1110 Period")
shall not be taken into consideration, unless during the Section 1110 Period the
trustee in such proceeding or Atlas refuses to assume or agree to perform its
obligations under the Lease related to such Equipment Note (in the case of a
Leased Aircraft) or under the Indenture related to such Equipment Note (in the
case of an Owned Aircraft) and (ii) any payment default occurring after the date
of the order of relief in such proceeding shall not be taken into consideration
if such payment default is cured under Section 1110(a)(1)(B) of the Bankruptcy
Code before the later of 30 days after the date of such default or the
expiration of the Section 1110 Period.

                  "Performing Note Deficiency" means any time that less than 65%
of the then aggregate outstanding principal amount of all Equipment Notes are
Performing Equipment Notes.

                  "Person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
trustee, unincorporated organization or government or any agency or political
subdivision thereof.

                  "Placement Agents" means Morgan Stanley & Co. Incorporated,
Deutsche Bank Securities Inc. and Salomon Smith Barney Inc.

                  "Placement Agreement" means the Placement Agreement dated
January 20, 2000 among the Placement Agents and Atlas, relating to the purchase
of the Certificates by the

                                       16
<PAGE>   20

Placement Agents, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with its terms.

                  "Pool Balance" means, with respect to each Trust or the
Certificates issued by any Trust, as of any date, (i) the original aggregate
face amount of the Certificates of such Trust less (ii) the aggregate amount of
all payments made in respect of the Certificates of such Trust or in respect of
Deposits relating to such Trust other than payments made in respect of interest
or premium thereon or reimbursement of any costs and expenses in connection
therewith. The Pool Balance for each Trust or for the Certificates issued by any
Trust as of any Distribution Date shall be computed after giving effect to any
special distribution with respect to unused Deposits, payment of principal of
the Equipment Notes or payment with respect to other Trust Property held in such
Trust and the distribution thereof to be made on that date.

                  "Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.

                  "PTC Event of Default" means, with respect to each Trust
Agreement, the failure to pay within 10 Business Days of the due date thereof:
(i) the outstanding Pool Balance of the applicable Class of Certificates on the
Final Legal Distribution Date for such Class or (ii) interest due on such
Certificates on any Distribution Date (unless the Subordination Agent shall have
made an Interest Drawing, or a withdrawal from the Cash Collateral Account, with
respect thereto in an aggregate amount sufficient to pay such interest and shall
have distributed such amount to the Trustee entitled thereto).

                  "Rating Agencies" means Moody's and Standard & Poor's.

                  "Ratings Confirmation" means, with respect to any action
proposed to be taken, a written confirmation from each of the Rating Agencies
that such action would not result in (i) a reduction of the rating for any Class
of Certificates below the then current rating for such Class of Certificates or
(ii) a withdrawal or suspension of the rating of any Class of Certificates.

                  "Registration Event" has the meaning assigned to such term in
the Registration Rights Agreement.

                  "Registration Rights Agreement" means the Registration Rights
Agreement dated as of January 28, 2000 among the Placement Agents, Atlas and the
Trustees.

                  "Regular Distribution Dates" means each January 2 and July 2,
commencing on July 2, 2000; provided, however, that, if any such day shall not
be a Business Day, the related distribution shall be made on the next succeeding
Business Day without additional interest.

                  "Replacement Liquidity Facility" means, for any Liquidity
Facility, an irrevocable revolving credit agreement in substantially the form of
the replaced Liquidity Facility, including reinstatement provisions, or in such
other form (which may include a letter of credit) as shall permit the Rating
Agencies to confirm in writing their respective ratings then in effect for the

                                       17
<PAGE>   21

Certificates (before downgrading of such ratings, if any, as a result of the
downgrading of the applicable Liquidity Provider), in a face amount (or in an
aggregate face amount) equal to the amount of interest payable on the
Certificates of such Trust (at the Stated Interest Rate for such Trust, and
without regard to expected future principal payments) on the three Regular
Distribution Dates following the date of replacement of such Liquidity Facility
and issued by a Person (or Persons) having unsecured short-term debt ratings
issued by the Rating Agencies which are equal to or higher than the Threshold
Rating. Without limitation of the form that a Replacement Liquidity Facility
otherwise may have pursuant to the preceding sentence, a Replacement Liquidity
Facility for any Class of Certificates may have a stated expiration date earlier
than 15 days after the Final Maturity Date of such Class of Certificates so long
as such Replacement Liquidity Facility provides for a Non-Extension Drawing as
contemplated by Section 3.6(d) hereof.

                  "Replacement Liquidity Provider" means a Person who issues a
Replacement Liquidity Facility.

                  "Required Amount" means, with respect to each Liquidity
Facility, or the Cash Collateral Account, for any Class, for any day, the sum of
the aggregate amount of interest, calculated at the rate per annum equal to the
Stated Interest Rate for the related Class of Certificates, that would be
payable on such Class of Certificates on each of the three successive Regular
Distribution Dates immediately following such day or, if such day is a Regular
Distribution Date, on such day and the succeeding two Regular Distribution
Dates, in each case calculated on the basis of the Pool Balance of such Class of
Certificates on such date and without regard to expected future payments of
principal on such Class of Certificates.

                  "Responsible Officer" means (i) with respect to the
Subordination Agent and each of the Trustees, any officer in the corporate trust
administration department of the Subordination Agent or such Trustee or any
other officer customarily performing 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 his knowledge of and familiarity
with a particular subject, and (ii) with respect to each Liquidity Provider, any
authorized officer of such Liquidity Provider.

                  "Scheduled Payment" means, with respect to any Equipment Note,
(i) any payment of principal or interest on such Equipment Note (other than an
Overdue Scheduled Payment) due from the obligor thereon or (ii) any payment of
interest on the corresponding Class of Certificates with funds drawn under any
Liquidity Facility, which payment represents the installment of principal at the
stated maturity of such installment of principal on such Equipment Note, the
payment of regularly scheduled interest accrued on the unpaid principal amount
of such Equipment Note, or both; provided that any payment of principal of,
premium, if any, or interest resulting from the redemption or purchase of any
Equipment Note shall not constitute a Scheduled Payment.

                  "Scheduled Payment Date" means, with respect to any Scheduled
Payment, the date on which such Scheduled Payment is scheduled to be made.

                                       18
<PAGE>   22

                  "Series A Equipment Notes" means the 8.707% Series A Equipment
Notes issued pursuant to each Indenture by the related Owner Trustee or Atlas,
as the case may be, and authenticated by the Loan Trustee thereunder, and any
such Equipment Notes issued in exchange therefor or replacement thereof pursuant
to the terms of such Indenture.

                  "Series B Equipment Notes" means the 9.057% Series B Equipment
Notes issued pursuant to each Indenture by the related Owner Trustee or Atlas,
as the case may be, and authenticated by the Loan Trustee thereunder, and any
such Equipment Notes issued in exchange therefor or replacement thereof pursuant
to the terms of such Indenture.

                  "Series C Equipment Notes" means the 9.702% Series C Equipment
Notes issued pursuant to each Indenture by the related Owner Trustee or Atlas,
as the case may be, and authenticated by the Loan Trustee thereunder, and any
such Equipment Notes issued in exchange therefor or replacement thereof pursuant
to the terms of such Indenture.

                  "Special Distribution Date" means, with respect to any Special
Payment, the date chosen by the Subordination Agent pursuant to Section 2.4(a)
for the distribution of such Special Payment in accordance with this Agreement.

                  "Special Payment" means any payment (other than a Scheduled
Payment) in respect of, or any proceeds of, any Equipment Note or Trust
Indenture Estate (as defined in each Indenture).

                  "Special Payments Account" means the Eligible Deposit Account
created pursuant to Section 2.2 as a sub-account to the Collection Account.

                  "Standard & Poor's" means Standard & Poor's Ratings Services,
a division of The McGraw-Hill Companies, Inc.

                  "Stated Expiration Date" has the meaning specified in Section
3.6(d).

                  "Stated Interest Rate" means (i) with respect to the Class A
Certificates, 8.707% per annum, (ii) with respect to the Class B Certificates,
9.057% per annum and (iii) with respect to the Class C Certificates, 9.702% per
annum, plus, in each case, an additional margin equal to 0.50% per annum, from
and including the 210th day after the Closing Date, in the event no Registration
Event occurs on or prior to the 210th day after the Closing Date (provided that
any such additional margin shall cease to be in effect from and including the
date on which such Registration Event occurs); provided that if the Shelf
Registration Statement (as defined in the Registration Rights Agreement) ceases
to be effective at any time during the period specified by Section 2(b) of the
Registration Rights Agreement for more than 60 days, whether or not consecutive,
during any 12-month period, the Stated Rate shall be increased by 0.50% per
annum from the 61st day of the applicable 12-month period such Shelf
Registration Statement ceases to be effective until such time as the Shelf
Registration Statement again becomes effective.

                                       19
<PAGE>   23

                  "Subordination Agent" has the meaning assigned to it in the
preliminary statements to this Agreement.

                  "Subordination Agent Incumbency Certificate" has the meaning
assigned to such term in Section 2.5(a).

                  "Subordination Agent Representatives" has the meaning assigned
to such term in Section 2.5(a).

                  "Substitute Aircraft" shall have the meaning set forth in the
Note Purchase Agreement.

                  "Tax" and "Taxes" mean any and all taxes, fees, levies,
duties, tariffs, imposts, and other charges of any kind (together with any and
all interest, penalties, loss, damage, liability, expense, additions to tax and
additional amounts or costs incurred or imposed with respect thereto) imposed or
otherwise assessed by the United States of America or by any state, local or
foreign government (or any subdivision or agency thereof) or other taxing
authority, including, without limitation: taxes or other charges on or with
respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social security,
workers' compensation, unemployment compensation, or net worth and similar
charges; taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value added, taxes on goods and services, gains taxes,
license, registration and documentation fees, customs duties, tariffs, and
similar charges.

                  "Tax Letter" means, collectively, the Tax Letter dated as of
the date hereof, between Atlas and WESTLB with respect to the Class A Liquidity
Facility and all tax letters entered into between Atlas and any Replacement
Liquidity Provider.

                  "Termination Notice" with respect to any Liquidity Facility
has the meaning assigned to such term in such Liquidity Facility.

                  "Threshold Rating" means the short-term unsecured debt rating
of P-1 by Moody's and A-1+ by Standard & Poor's, in the case of the Class A
Liquidity Provider, and the short-term unsecured debt rating of P-1 by Moody's,
and A-1 by Standard & Poor's, in the case of the Class B Liquidity Provider and
the Class C Liquidity Provider (or the Guarantor, so long as MSCS is the Class B
Liquidity Provider or the Class C Liquidity Provider, as the case may be).

                  "Treasury Regulations" means regulations, including proposed
or temporary regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.

                  "Triggering Event" means (x) the occurrence of an Indenture
Event of Default under all of the Indentures resulting in a PTC Event of Default
with respect to the most senior Class of Certificates then Outstanding, (y) the
Acceleration of all of the outstanding Equipment

                                       20
<PAGE>   24

Notes (provided that during the Delivery Period the aggregate principal amount
of such Equipment Notes exceeds $100,000,000) or (z) the occurrence of an Atlas
Bankruptcy Event.

                  "Trust" means any of the Class A Trust, the Class B Trust or
the Class C Trust.

                  "Trust Accounts" has the meaning assigned to such term in
Section 2.2(a).

                  "Trust Agreement" means any of the Class A Trust Agreement,
the Class B Trust Agreement or the Class C Trust Agreement.

                  "Trust Property" with respect to any Trust, has the meaning
set forth in the Trust Agreement for such Trust.

                  "Trustee" means any of the Class A Trustee, the Class B
Trustee or the Class C Trustee.

                  "Trustee Incumbency Certificate" has the meaning assigned to
such term in Section 2.5(a).

                  "Trustee Representatives" has the meaning assigned to such
term in Section 2.5(a).

                  "WESTLB" has the meaning assigned to such term in the recital
of the parties to this Agreement.

                  "WESTLB Fee Letter" means the Fee Letter dated the date hereof
between WESTLB and the Subordination Agent with respect to the Class A Liquidity
Facility.

                  "Written Notice" means, from the Subordination Agent, any
Trustee or Liquidity Provider, a written instrument executed by the Designated
Representative of such Person. An invoice delivered by a Liquidity Provider
pursuant to Section 3.1 in accordance with its normal invoicing procedures shall
constitute Written Notice under such Section.

                  "WTC" has the meaning assigned to such term in the recital of
parties to this Agreement.

                                   ARTICLE II

                        TRUST ACCOUNTS; CONTROLLING PARTY

                  SECTION 2.1. Agreement to Terms of Subordination; Payments
from Monies Received Only. (a) Each Trustee hereby acknowledges and agrees to
the terms of subordination set forth in this Agreement in respect of each Class
of Certificates and agrees to enforce such provisions and cause all payments in
respect of the Equipment Notes and the Liquidity Facilities to be applied in
accordance with the terms of this Agreement. In addition, each Trustee hereby
agrees to cause the Equipment Notes purchased by the related Trust to be
registered in the name

                                       21
<PAGE>   25

of the Subordination Agent or its nominee, as agent and trustee for such
Trustee, to be held in trust by the Subordination Agent solely for the purpose
of facilitating the enforcement of the subordination and other provisions of
this Agreement.

                  (b) Except as otherwise expressly provided in the next
succeeding sentence of this Section 2.1, all payments to be made by the
Subordination Agent hereunder shall be made only from amounts received by it
that constitute Scheduled Payments, Special Payments, or payments under Section
9.1 of the Leased Aircraft Participation Agreements, Section 8.1 of the Owned
Aircraft Participation Agreements or payments under Section 6 of the Note
Purchase Agreement, and only to the extent that the Subordination Agent shall
have received sufficient income or proceeds therefrom to enable it to make such
payments in accordance with the terms hereof. Each of the Trustees and the
Subordination Agent hereby agrees and, as provided in each Trust Agreement, each
Certificateholder, by its acceptance of a Certificate, and each Liquidity
Provider, by entering into the Liquidity Facility to which it is a party, has
agreed to look solely to such amounts to the extent available for distribution
to it as provided in this Agreement and to the relevant Deposits and that none
of the Trustees, Owner Trustees, Loan Trustees, Owner Participants nor the
Subordination Agent is personally liable to any of them for any amounts payable
or any liability under this Agreement, any Trust Agreement, any Liquidity
Facility or such Certificate, except (in the case of the Subordination Agent) as
expressly provided herein or (in the case of the Trustees) as expressly provided
in each Trust Agreement or (in the case of the Owner Trustees and the Loan
Trustees) as expressly provided in any Operative Agreement.

                  SECTION 2.2. Trust Accounts. (a) Upon the execution of this
Agreement, the Subordination Agent shall establish and maintain in its name (i)
the Collection Account as an Eligible Deposit Account, bearing a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Trustees, the Certificateholders and the Liquidity Providers, and
(ii) as a sub-account in the Collection Account, the Special Payments Account as
an Eligible Deposit Account, bearing a designation clearly indicating that the
funds deposited therein are held in trust for the benefit of the Trustees, the
Certificateholders and the Liquidity Providers. The Subordination Agent shall
establish and maintain the Cash Collateral Accounts pursuant to and under the
circumstances set forth in Section 3.6(f) hereof. Upon such establishment and
maintenance under Section 3.6(f) hereof, the Cash Collateral Accounts shall,
together with the Collection Account, constitute the "Trust Accounts" hereunder.

                  (b) Funds on deposit in the Trust Accounts shall be invested
and reinvested by the Subordination Agent in Eligible Investments selected by
the Subordination Agent if such investments are reasonably available and have
maturities no later than the earlier of (i) 90 days following the date of such
investment and (ii) the Business Day immediately preceding the Regular
Distribution Date or the date of the related distribution pursuant to Section
2.4 hereof, as the case may be, next following the date of such investment; (or,
in the case of any amount on deposit in the Cash Collateral Account with respect
to any Liquidity Facility, the Business Day immediately preceding the scheduled
Interest Payment Date with respect to such Liquidity Facility next following the
date of such investment); provided, however, that following the making of a
Downgrade Drawing or a Non-Extension Drawing under any Liquidity Facility, the
Subordination Agent shall invest and reinvest amounts on deposit in the related
Cash Collateral

                                       22
<PAGE>   26

Account in Eligible Investments at the direction of the Liquidity Provider for
such Liquidity Facility; provided, however, that upon the occurrence and during
the continuation of a Triggering Event, the Subordination Agent shall invest and
reinvest such amounts in accordance with the written instructions of the
Controlling Party. Unless otherwise expressly provided in this Agreement
(including, without limitation, with respect to Investment Earnings on deposit
in the Cash Collateral Accounts, Section 3.6(f) hereof), any Investment Earnings
shall be deposited in the Collection Account when received by the Subordination
Agent and shall be applied by the Subordination Agent in the same manner as the
other amounts on deposit in the Collection Account are to be applied and any
losses shall be charged against the principal amount invested, in each case net
of the Subordination Agent's reasonable fees and expenses in making such
investments. The Subordination Agent shall not be liable for any loss resulting
from any investment, reinvestment or liquidation required to be made under this
Agreement other than by reason of its willful misconduct or gross negligence.
Eligible Investments and any other investment required to be made hereunder
shall be held to their maturities except that any such investment may be sold
(without regard to its maturity) by the Subordination Agent without instructions
whenever such sale is necessary to make a distribution required under this
Agreement. Uninvested funds held hereunder shall not earn or accrue interest.

                  (c) The Subordination Agent shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts and in
all proceeds thereof (including all income thereon, except as otherwise
expressly provided herein with respect to Investment Earnings). The Trust
Accounts shall be held in trust by the Subordination Agent under the sole
dominion and control of the Subordination Agent for the benefit of the Trustees,
the Certificateholders and the Liquidity Providers, as the case may be. If, at
any time, any of the Trust Accounts ceases to be an Eligible Deposit Account,
the Subordination Agent shall within 10 Business Days (or such longer period,
not to exceed 30 calendar days, to which each Rating Agency may consent)
establish a new Collection Account, Special Payments Account or Cash Collateral
Account, as the case may be, as an Eligible Deposit Account and shall transfer
any cash and/or any investments to such new Collection Account, Special Payments
Account or Cash Collateral Account, as the case may be. So long as WTC is an
Eligible Institution, the Trust Accounts shall be maintained with it as Eligible
Deposit Accounts.

                  SECTION 2.3. Deposits to the Collection Account and Special
Payments Account. (a) The Subordination Agent shall, upon receipt thereof,
deposit in the Collection Account all Scheduled Payments received by it.

                  (b) The Subordination Agent shall, on each date when one or
more Special Payments are made to the Subordination Agent as holder of the
Equipment Notes, deposit in the Special Payments Account the aggregate amount of
such Special Payments.

                  SECTION 2.4. Distributions of Special Payments. (a) Notice of
Special Payment. Except as provided in Section 2.4(e) below, upon receipt by the
Subordination Agent, as registered holder of the Equipment Notes, of any notice
of a Special Payment (or, in the absence of any such notice, upon receipt by the
Subordination Agent of a Special Payment), the Subordination Agent shall
promptly give notice thereof to each Trustee and the Liquidity

                                       23
<PAGE>   27

Providers. The Subordination Agent shall promptly calculate the amount of the
redemption or purchase of Equipment Notes or the amount of any Overdue Scheduled
Payment, as the case may be, comprising such Special Payment under the
applicable Indenture or Indentures and shall promptly send to each Trustee a
Written Notice of such amount and the amount allocable to each Trust. Such
Written Notice shall also set the distribution date for such Special Payment (a
"Special Distribution Date"), which shall be the Business Day which immediately
follows the later to occur of (x) the 15th day after the date of such Written
Notice or (y) the date the Subordination Agent has received or expects to
receive such Special Payment. Amounts on deposit in the Special Payments Account
shall be distributed in accordance with Sections 2.4(b) and 2.4(c) hereof, as
applicable.

                  (b) Redemptions and Purchases of Equipment Notes. (i) So long
as no Triggering Event shall have occurred (whether or not continuing), the
Subordination Agent shall make distributions pursuant to this Section 2.4(b) of
amounts on deposit in the Special Payments Account on account of the redemption,
purchase (including, without limitation, a purchase resulting from a sale of the
Equipment Notes permitted by Article IV hereof) or prepayment of all of the
Equipment Notes issued pursuant to an Indenture on the Special Distribution Date
for such Special Payment in the following order of priority:

         first, such amount as shall be required to pay (A) all accrued and
         unpaid Liquidity Expenses then in arrears plus (B) the product of (x)
         the aggregate amount of all accrued and unpaid Liquidity Expenses not
         in arrears to such Special Payment Date multiplied by (y) a fraction,
         the numerator of which is the aggregate outstanding principal amount of
         Equipment Notes being redeemed, purchased or prepaid on such Special
         Payment Date and the denominator of which is the aggregate outstanding
         principal amount of all Equipment Notes, shall be distributed to the
         Liquidity Providers pari passu on the basis of the amount of Liquidity
         Expenses owed to each Liquidity Provider;

         second, such amount as shall be required to pay (A) all accrued and
         unpaid interest then in arrears on all Liquidity Obligations (including
         interest accrued and unpaid on any Interest Drawing or any Applied
         Provider Advance (as defined in any Liquidity Facility)) plus (B) the
         product of (x) the aggregate amount of all accrued and unpaid interest
         on all Liquidity Obligations not in arrears to such Special Payment
         Date (at the rate provided in the applicable Liquidity Facility
         multiplied by (y) a fraction, the numerator of which is the aggregate
         outstanding principal amount of Equipment Notes being redeemed,
         purchased or prepaid on such Special Payment Date and the denominator
         of which is the aggregate outstanding principal amount of all Equipment
         Notes, shall be distributed to the Liquidity Providers pari passu on
         the basis of the amount of such Liquidity Obligations owed to each
         Liquidity Provider;

         third, such amount as shall be required (A) if any Cash Collateral
         Account had been previously funded as provided in Section 3.6(f), to
         fund such Cash Collateral Account up to its Required Amount shall be
         deposited in such Cash Collateral Account, (B) if any Liquidity
         Facility shall become a Downgraded Facility or a Non-Extended Facility
         at a time when unreimbursed Interest Drawings under such Liquidity
         Facility have reduced

                                       24
<PAGE>   28

         the Available Amount thereunder to zero, to deposit into the related
         Cash Collateral Account an amount equal to such Cash Collateral
         Account's Required Amount shall be deposited in such Cash Collateral
         Account, and (C) if, with respect to any particular Liquidity Facility,
         neither subclause (A) nor subclause (B) of this clause "third" are
         applicable, to pay or reimburse the Liquidity Provider in respect of
         such Liquidity Facility in an amount equal to the amount of any
         unreimbursed Interest Drawings under such Liquidity Facility shall be
         distributed to such Liquidity Provider, pari passu on the basis of the
         amounts of all such deficiencies and/or unreimbursed Interest Drawings;

         fourth, if, with respect to any particular Liquidity Facility, any
         amounts are to be distributed pursuant to either subclause (A) or (B)
         of clause "third" above, then the Liquidity Provider with respect to
         such Liquidity Facility shall be paid the excess of (x) the aggregate
         outstanding amount of unreimbursed Advances (whether or not then due)
         under such Liquidity Facility over (y) the Required Amount for the
         relevant Class, pari passu on the basis of such amounts in respect of
         each Liquidity Provider;

         fifth, such amount as shall be required to pay in full Expected
         Distributions to the holders of Class A Certificates on such Special
         Distribution Date shall be distributed to the Class A Trustee;

         sixth, such amount as shall be required to pay in full Expected
         Distributions to the holders of Class B Certificates on such Special
         Distribution Date shall be distributed to the Class B Trustee;

         seventh, such amount as shall be required to pay in full Expected
         Distributions to the holders of Class C Certificates on such Special
         Distribution Date shall be distributed to the Class C Trustee; and

         eighth, the balance, if any, of such Special Payment shall be
         transferred to the Collection Account for distribution in accordance
         with Section 3.2 hereof.

For the purposes of this Section 2.4(b), clause (x) of the definition of
"Expected Distributions" shall be deemed to read as follows: "(x) accrued, due
and unpaid interest on such Certificates together with (without duplication)
accrued and unpaid interest on a portion of such Certificates equal to the
outstanding principal amount of Equipment Notes being redeemed, purchased or
prepaid (immediately prior to such redemption, purchase or prepayment)
(excluding interest, if any, payable with respect to the Deposits related to
such Trust)".

         Notwithstanding the priority of payments specified above, in the event
any Investment Earnings on amounts on deposit in any Cash Collateral Account
resulting from an Unapplied Provider Advance are deposited in the Collection
Account, such Investment Earnings shall be applied in satisfaction of interest
payable in respect such Unapplied Provider Advance to the extent of such
Investment Earnings.

                                       25
<PAGE>   29

                  (ii) Upon the occurrence of a Triggering Event (whether or not
continuing), the Subordination Agent shall make distributions pursuant to this
Section 2.4(b) of amounts on deposit in the Special Payments Account on account
of the redemption or purchase of all of the Equipment Notes issued pursuant to
an Indenture on the Special Distribution Date for such Special Payment in
accordance with Section 3.3 hereof.

                  (c) Other Special Payments. Except as provided in clause (e)
below, any amounts on deposit in the Special Payments Account other than in
respect of amounts to be distributed pursuant to Section 2.4(b) shall be
distributed on the Special Distribution Date therefor in accordance with Article
III hereof.

                  (d) Investment of Amounts in Special Payments Account. Any
amounts on deposit in the Special Payments Account prior to the distribution
thereof pursuant to Section 2.4(b) or (c) shall be invested in accordance with
Section 2.2(b). Investment Earnings on such investments shall be distributed in
accordance with Section 2.4(b) or (c), as the case may be.

                  (e) Certain Payments. The Subordination Agent will distribute
promptly upon receipt thereof (i) any indemnity payment received by it from the
Owner Participant, the Owner Trustee or Atlas in respect of any Trustee, any
Liquidity Provider, any Paying Agent, any Depositary or any Escrow Agent
(collectively, the "Payees") and (ii) any compensation (including, without
limitation, any fees payable to any Liquidity Provider under Section 2.03 of any
Liquidity Facility) received by it from the Owner Participant, the Owner Trustee
or Atlas under any Operative Agreement in respect of any Payee, directly to the
Payee entitled thereto.

                  SECTION 2.5. Designated Representatives. (a) With the delivery
of this Agreement, the Subordination Agent shall furnish to each Liquidity
Provider and each Trustee, and from time to time thereafter may furnish to each
Liquidity Provider and each Trustee, at the Subordination Agent's discretion, or
upon any Liquidity Provider's or Trustee's request (which request shall not be
made more than one time in any 12-month period), a certificate (a "Subordination
Agent Incumbency Certificate") of a Responsible Officer of the Subordination
Agent certifying as to the incumbency and specimen signatures of the officers of
the Subordination Agent and the attorney-in-fact and agents of the Subordination
Agent (the "Subordination Agent Representatives") authorized to give Written
Notices on behalf of the Subordination Agent hereunder. Until each Liquidity
Provider and Trustee receives a subsequent Subordination Agent Incumbency
Certificate, it shall be entitled to rely on the last Subordination Agent
Incumbency Certificate delivered to it hereunder.

                  (b) With the delivery of this Agreement, each Trustee shall
furnish to the Subordination Agent, and from time to time thereafter may furnish
to the Subordination Agent, at such Trustee's discretion, or upon the
Subordination Agent's request (which request shall not be made more than one
time in any 12-month period), a certificate (a "Trustee Incumbency Certificate")
of a Responsible Officer of such Trustee certifying as to the incumbency and
specimen signatures of the officers of such Trustee and the attorney-in-fact and
agents of such Trustee (the "Trustee Representatives") authorized to give
Written Notices on behalf of such Trustee hereunder. Until the Subordination
Agent receives a subsequent Trustee Incumbency

                                       26
<PAGE>   30

Certificate, it shall be entitled to rely on the last Trustee Incumbency
Certificate delivered to it hereunder.

                  (c) With the delivery of this Agreement, each Liquidity
Provider shall furnish to the Subordination Agent, and from time to time
thereafter may furnish to the Subordination Agent, at such Liquidity Provider's
discretion, or upon the Subordination Agent's request (which request shall not
be made more than one time in any 12-month period), a certificate (an "LP
Incumbency Certificate") of any Responsible Officer of such Liquidity Provider
certifying as to the incumbency and specimen signatures of any officer,
attorney-in-fact, agent or other designated representative of such Liquidity
Provider (the "LP Representatives" and, together with the Subordination Agent
Representatives and the Trustee Representatives, the "Designated
Representatives") authorized to give Written Notices on behalf of such Liquidity
Provider hereunder. Until the Subordination Agent receives a subsequent LP
Incumbency Certificate, it shall be entitled to rely on the last LP Incumbency
Certificate delivered to it hereunder.

                  SECTION 2.6. Controlling Party. (a) The Trustees and the
Liquidity Providers hereby agree that, with respect to any Indenture at any
given time, the Loan Trustee thereunder will be directed (i) in taking, or
refraining from taking, any action under such Indenture or with respect to the
Equipment Notes issued thereunder, so long as no Indenture Event of Default has
occurred and is continuing thereunder, by the holders of at least a majority of
the outstanding principal amount of such Equipment Notes (provided that, for so
long as the Subordination Agent is the registered holder of the Equipment Notes,
the Subordination Agent shall act with respect to this clause (i) in accordance
with the directions of the Trustees (in the case of each such Trustee, with
respect to the Equipment Notes issued under such Indenture and held as Trust
Property of such Trust) constituting, in the aggregate, directions with respect
to such principal amount of Equipment Notes), and (ii) after the occurrence and
during the continuance of an Indenture Event of Default thereunder (which, in
the case of an Indenture pertaining to a Leased Aircraft, has not been cured by
the applicable Owner Trustee or the applicable Owner Participant, if applicable,
pursuant to Section 4.03 of such Indenture), in taking, or refraining from
taking, any action under such Indenture or with respect to such Equipment Notes,
including exercising remedies thereunder (including Accelerating the Equipment
Notes issued thereunder or foreclosing the Lien on the Aircraft securing such
Equipment Notes), by the Controlling Party.

                  (b) The Person who shall be the "Controlling Party" with
respect to any Indenture shall be: (x) the Class A Trustee, (y) upon payment of
Final Distributions to the holders of Class A Certificates, the Class B Trustee
and (z) upon payment of Final Distributions to the holders of Class B
Certificates, the Class C Trustee. For purposes of giving effect to the
foregoing, the Trustees (other than the Controlling Party) irrevocably agree
(and the Certificateholders (other than the Certificateholders represented by
the Controlling Party) shall be deemed to agree by virtue of their purchase of
Certificates) that the Subordination Agent, as record holder of the Equipment
Notes, shall exercise its voting rights in respect of the Equipment Notes as
directed by the Controlling Party and any vote so exercised shall be binding
upon the Trustees and all Certificateholders.

                                       27
<PAGE>   31

                  The Subordination Agent shall give written notice to all of
the other parties to this Agreement promptly upon a change in the identity of
the Controlling Party. Each of the parties hereto agrees that it shall not
exercise any of the rights of the Controlling Party at such time as it is not
the Controlling Party hereunder; provided, however, that nothing herein
contained shall prevent or prohibit any Non-Controlling Party from exercising
such rights as shall be specifically granted to such Non-Controlling Party
hereunder and under the other Operative Agreements.

                  (c) Notwithstanding the foregoing, at any time after 18 months
from the earlier to occur of (i) the date on which the entire Available Amount
under any Liquidity Facility shall have been drawn (for any reason other than a
Downgrade Drawing or a Non-Extension Drawing) and remain unreimbursed, (ii) the
date on which the entire amount of any Downgrade Drawing or Non-Extension
Drawing shall have been withdrawn from the relevant Cash Collateral Account to
pay interest on the relevant Class of Certificates and remains unreimbursed, and
(iii) the date on which all Equipment Notes shall have been Accelerated, the
Liquidity Provider with the greatest amount of unreimbursed Liquidity
Obligations owed to it shall have the right to elect, by Written Notice to the
Subordination Agent and each of the Trustees, to become the Controlling Party
hereunder with respect to any Indenture at any time from and including the last
day of such 18-month period.

                  (d) The exercise of remedies by the Controlling Party under
this Agreement shall be expressly limited by Section 4.1(a)(ii) hereof.

                  (e) The Controlling Party shall not be entitled to require or
obligate any Non-Controlling Party to provide funds necessary to exercise any
right or remedy hereunder.

                                   ARTICLE III

                    RECEIPT, DISTRIBUTION AND APPLICATION OF
                                AMOUNTS RECEIVED

                  SECTION 3.1. Written Notice of Distribution. (a) No later than
3:00 P.M. (New York City time) on the Business Day immediately preceding each
Regular Distribution Date (or Special Distribution Date for purposes of Section
2.4(b) hereof, as the case may be), each of the following Persons shall deliver
to the Subordination Agent a Written Notice setting forth the following
information as at the close of business on such Business Day:

                  (i) With respect to the Class A Certificates, the Class A
         Trustee shall separately set forth the amounts to be paid in accordance
         with clause "fifth" of Section 3.2 or 2.4(b), as the case may be,
         hereof;

                  (ii) With respect to the Class B Certificates, the Class B
         Trustee shall separately set forth the amounts to be paid in accordance
         with clause "sixth" of Section 3.2 or 2.4(b), as the case may be,
         hereof;

                                       28
<PAGE>   32

                  (iii) With respect to the Class C Certificates, the Class C
         Trustee shall separately set forth the amounts to be paid in accordance
         with clause "seventh" of Section 3.2 or 2.4(b), as the case may be,
         hereof;

                  (iv) With respect to each Liquidity Facility, the Liquidity
         Provider thereunder shall separately set forth the amounts to be paid
         in accordance with clauses "first", "second", "third" and "fourth" of
         Section 3.2 or 2.4(b), as the case may be, hereof; and

                  (v) Each Trustee shall set forth the amounts to be paid in
         accordance with clause "eighth" of Section 3.2 hereof.

The notices required under this Section 3.1(a) may be in the form of a schedule
or similar document provided to the Subordination Agent by the parties
referenced therein or by any one of them, which schedule or similar document may
state that, unless there has been a prepayment of the Certificates, such
schedule or similar document is to remain in effect until any substitute notice
or amendment shall be given to the Subordination Agent by the party providing
such notice.

                  (b) Following the occurrence of a Triggering Event, the
Subordination Agent shall request the following information from the following
Persons, and each of the following Persons shall, upon the request of the
Subordination Agent, deliver a Written Notice to the Subordination Agent setting
forth for such Person the following information:

                  (i) With respect to the Class A Certificates, the Class A
         Trustee shall separately set forth the amounts to be paid in accordance
         with clauses "first" (to reimburse payments made by the Class A
         Certificateholders pursuant to subclause (iii) of clause "first" of
         Section 3.3 hereof) and "seventh" of Section 3.3 hereof;

                  (ii) With respect to the Class B Certificates, the Class B
         Trustee shall separately set forth the amounts to be paid in accordance
         with clauses "first" (to reimburse payments made by the Class B
         Certificateholders pursuant to subclause (iii) of clause "first" of
         Section 3.3 hereof) and "eighth" of Section 3.3 hereof;

                  (iii) With respect to the Class C Certificates, the Class C
         Trustee shall separately set forth the amounts to be paid in accordance
         with clauses "first" (to reimburse payments made by the Class C
         Certificateholders pursuant to subclause (iii) of clause "first" of
         Section 3.3 hereof) and "ninth" of Section 3.3 hereof;

                  (iv) With respect to each Liquidity Facility, the Liquidity
         Provider thereunder shall separately set forth the amounts to be paid
         to it in accordance with subclause (iii) of clause "first" of Section
         3.3 hereof and clauses "second", "third", "fourth" and "fifth" of
         Section 3.3 hereof; and

                  (v) Each Trustee shall set forth the amounts to be paid in
         accordance with clause "sixth" of Section 3.3 hereof.

                                       29
<PAGE>   33

                  (c) At such time as a Trustee or a Liquidity Provider shall
have received all amounts owing to it (and, in the case of a Trustee, the
Certificateholders for which it is acting) pursuant to Section 2.4, 3.2 or 3.3
hereof, as applicable, and, in the case of a Liquidity Provider, its commitment
under the related Liquidity Facility shall have terminated or expired, such
Person shall, by a Written Notice, so inform the Subordination Agent and each
other party to this Agreement.

                  (d) As provided in Section 6.5 hereof, the Subordination Agent
shall be fully protected in relying on any of the information set forth in a
Written Notice provided by any Trustee or any Liquidity Provider pursuant to
paragraphs (a) through (c) above and shall have no independent obligation to
verify, calculate or recalculate any amount set forth in any Written Notice
delivered in accordance with such paragraphs.

                  (e) Any Written Notice delivered by a Trustee or a Liquidity
Provider, as applicable, pursuant to Section 3.1(a), 3.1(b) or 3.1(c) hereof, if
made prior to 10:00 A.M. (New York City time) shall be effective on the date
delivered (or if delivered later shall be effective as of the next Business
Day). Subject to the terms of this Agreement, the Subordination Agent shall as
promptly as practicable comply with any such instructions; provided, however,
that any transfer of funds pursuant to any instruction received after 10:00 A.M.
(New York City time) on any Business Day may be made on the next succeeding
Business Day.

                  (f) In the event the Subordination Agent shall not receive
from any Person any information set forth in paragraph (a) or (b) above which is
required to enable the Subordination Agent to make a distribution to such Person
pursuant to Section 3.2 or 3.3 hereof, the Subordination Agent shall request
such information and, failing to receive any such information, the Subordination
Agent shall not make such distribution(s) to such Person. In such event, the
Subordination Agent shall make distributions pursuant to clauses "first" through
"ninth" of Section 3.2 and clauses "first" through "ninth" of Section 3.3 to the
extent it shall have sufficient information to enable it to make such
distributions, and shall continue to hold any funds remaining, after making such
distributions, until the Subordination Agent shall receive all necessary
information to enable it to distribute any funds so withheld.

                  (g) On such dates (but not more frequently than monthly) as
any Liquidity Provider or any Trustee shall request, but in any event
automatically at the end of each calendar quarter, the Subordination Agent shall
send to such party a written statement reflecting all amounts on deposit with
the Subordination Agent pursuant to Section 3.1(f) hereof.

                  SECTION 3.2. Distribution of Amounts on Deposit in the
Collection Account. Except as otherwise provided in Sections 2.4, 3.1(f), 3.3,
3.4 and 3.6(b), amounts on deposit in the Collection Account (or, in the case of
any amount described in Section 2.4(c), on deposit in the Special Payments
Account) shall be promptly distributed on each Regular Distribution Date (or, in
the case of any amount described in Section 2.4(c), on the Special Distribution
Date thereof) in the following order of priority and in accordance with the
information provided to the Subordination Agent pursuant to Section 3.1(a)
hereof:

                                       30
<PAGE>   34

         first, such amount as shall be required to pay all accrued and unpaid
         Liquidity Expenses owed to each Liquidity Provider shall be distributed
         to the Liquidity Providers pari passu on the basis of the amount of
         Liquidity Expenses owed to each Liquidity Provider;

         second, such amount as shall be required to pay in full the aggregate
         amount of interest accrued on all Liquidity Obligations (at the rate,
         or in the amount, provided in the applicable Liquidity Facility) and
         unpaid shall be distributed to the Liquidity Providers pari passu on
         the basis of the amount of such Liquidity Obligations owed to each
         Liquidity Provider;

         third, such amount as shall be required (A) if any Cash Collateral
         Account had been previously funded as provided in Section 3.6(f), to
         fund such Cash Collateral Account up to its Required Amount shall be
         deposited in such Cash Collateral Account, (B) if any Liquidity
         Facility shall become a Downgraded Facility or a Non-Extended Facility
         at a time when unreimbursed Interest Drawings under such Liquidity
         Facility have reduced the Available Amount thereunder to zero, to
         deposit into the related Cash Collateral Account an amount equal to
         such Cash Collateral Account's Required Amount shall be deposited in
         such Cash Collateral Account, and (C) if, with respect to any
         particular Liquidity Facility, neither subclause (A) nor subclause (B)
         of this clause "third" is applicable, to pay or reimburse the Liquidity
         Provider in respect of such Liquidity Facility in an amount equal to
         the amount of all Liquidity Obligations then due under such Liquidity
         Facility (other than amounts payable pursuant to clause "first" or
         "second" of this Section 3.2) shall be distributed to such Liquidity
         Provider, pari passu on the basis of the amounts of all such
         deficiencies and/or unreimbursed Liquidity Obligations;

         fourth, if, with respect to any particular Liquidity Facility, any
         amounts are to be distributed pursuant to either subclause (A) or (B)
         of clause "third" above, then the Liquidity Provider with respect to
         such Liquidity Facility shall be paid the excess of (x) the aggregate
         outstanding amount of unreimbursed Advances (whether or not then due)
         under such Liquidity Facility over (y) the Required Amount for the
         relevant Class, pari passu on the basis of such amounts in respect of
         each Liquidity Provider;

         fifth, such amount as shall be required to pay in full Expected
         Distributions to the holders of the Class A Certificates on such
         Distribution Date shall be distributed to the Class A Trustee;

         sixth, such amount as shall be required to pay in full Expected
         Distributions to the holders of the Class B Certificates on such
         Distribution Date shall be distributed to the Class B Trustee;

         seventh, such amount as shall be required to pay in full Expected
         Distributions to the holders of the Class C Certificates on such
         Distribution Date shall be distributed to the Class C Trustee;

                                       31
<PAGE>   35

         eighth, such amount as shall be required to pay in full the aggregate
         unpaid amount of fees and expenses payable as of such Distribution Date
         to the Subordination Agent and each Trustee pursuant to the terms of
         this Agreement and the Trust Agreements, as the case may be, shall be
         distributed to the Subordination Agent and such Trustee; and

         ninth, the balance, if any, of any such amount remaining thereafter
         shall be held in the Collection Account for later distribution in
         accordance with this Article III.

         Notwithstanding the priority of payments specified above, in the event
any Investment Earnings on amounts on deposit in any Cash Collateral Account
resulting from an Unapplied Provider Advance are deposited in the Collection
Account, such Investment Earnings shall be applied in satisfaction of interest
payable in respect such Unapplied Provider Advance to the extent of such
Investment Earnings.

                  SECTION 3.3. Distribution of Amounts on Deposit Following a
Triggering Event. (a) Except as otherwise provided in Sections 3.1(f) and 3.6(b)
hereof, upon the occurrence of a Triggering Event and at all times thereafter,
all funds in the Collection Account or the Special Payments Account shall be
promptly distributed by the Subordination Agent in the following order of
priority:

         first, such amount as shall be required to reimburse (i) the
         Subordination Agent for any out-of-pocket costs and expenses actually
         incurred by it (to the extent not previously reimbursed) in the
         protection of, or the realization of the value of, the Equipment Notes
         or any Trust Indenture Estate, shall be applied by the Subordination
         Agent in reimbursement of such costs and expenses, (ii) each Trustee
         for any amounts of the nature described in clause (i) above actually
         incurred by it under the applicable Trust Agreement (to the extent not
         previously reimbursed), shall be distributed to such Trustee, and (iii)
         any Liquidity Provider or Certificateholder for payments, if any, made
         by it to the Subordination Agent or any Trustee in respect of amounts
         described in clause (i) above, shall be distributed to such Liquidity
         Provider or to the applicable Trustee for the account of such
         Certificateholder, in each such case, pari passu on the basis of all
         amounts described in clauses (i) through (iii) above;

         second, such amount remaining as shall be required to pay all accrued
         and unpaid Liquidity Expenses shall be distributed to each Liquidity
         Provider pari passu on the basis of the amount of Liquidity Expenses
         owed to each Liquidity Provider;

         third, such amount remaining as shall be required to pay accrued and
         unpaid interest on the Liquidity Obligations as provided in the
         Liquidity Facilities shall be distributed to each Liquidity Provider
         pari passu on the basis of the amount of such accrued and unpaid
         interest owed to each Liquidity Provider;

                                       32
<PAGE>   36

         fourth, such amount remaining as shall be required (A) if any Cash
         Collateral Account had been previously funded as provided in Section
         3.6(f), unless (i) a Performing Note Deficiency exists and a Liquidity
         Event of Default shall have occurred and be continuing with respect to
         the relevant Liquidity Facility or (ii) a Final Drawing shall have
         occurred with respect to such Liquidity Facility, to fund such Cash
         Collateral Account up to its Required Amount (less the amount of any
         repayments of Interest Drawings under such Liquidity Facility while
         subclause (A)(i) above is applicable) shall be deposited in such Cash
         Collateral Account, (B) if any Liquidity Facility shall become a
         Downgraded Facility or a Non-Extended Facility at a time when
         unreimbursed Interest Drawings under such Liquidity Facility have
         reduced the Available Amount thereunder to zero, unless (i) a
         Performing Note Deficiency exists and a Liquidity Event of Default
         shall have occurred and be continuing with respect to the relevant
         Liquidity Facility or (ii) a Final Drawing shall have occurred with
         respect to such Liquidity Facility, to deposit into the related Cash
         Collateral Account an amount equal to such Cash Collateral Account's
         Required Amount (less the amount of any repayments of Interest Drawings
         under such Liquidity Facility while subclause (B)(i) above is
         applicable) shall be deposited in such Cash Collateral Account, and (C)
         if, with respect to any particular Liquidity Facility, neither
         subclause (A) nor subclause (B) of this clause "fourth" are applicable,
         to pay in full the outstanding amount of all Liquidity Obligations then
         due under such Liquidity Facility (other than amounts payable pursuant
         to clause "second" or "third" of this Section 3.3) shall be distributed
         to such Liquidity Provider, pari passu on the basis of the amounts of
         all such deficiencies and/or unreimbursed Liquidity Obligations;

         fifth, if, with respect to any particular Liquidity Facility, any
         amounts are to be distributed pursuant to either subclause (A) or (B)
         of clause "fourth" above, then the Liquidity Provider with respect to
         such Liquidity Facility shall be paid the excess of (x) the aggregate
         outstanding amount of unreimbursed Advances (whether or not then due)
         under such Liquidity Facility over (y) the Required Amount for the
         relevant Class (less the amount of any repayments of Interest Drawings
         under such Liquidity Facility while subclause (A)(i) or (B)(i), as the
         case may be, of clause "fourth" above is applicable), pari passu on the
         basis of such amounts in respect of each Liquidity Provider;

         sixth, such amount as shall be required to reimburse or pay (i) the
         Subordination Agent for any Tax (other than Taxes imposed on
         compensation paid hereunder), expense, fee, charge or other loss
         incurred by or any other amount payable to the Subordination Agent in
         connection with the transactions contemplated hereby (to the extent not
         previously reimbursed), shall be applied by the Subordination Agent in
         reimbursement of such amount, (ii) each Trustee for any Tax (other than
         Taxes imposed on compensation paid under the applicable Trust
         Agreement), expense, fee, charge, loss or any other amount payable to
         such Trustee under the applicable Trust Agreements (to the extent not
         previously reimbursed), shall be distributed to such Trustee, and (iii)
         each Certificateholder for payments, if any, made by it pursuant to
         Section 5.2 hereof in respect of amounts described in clause (i) above,
         shall be distributed to the applicable

                                       33
<PAGE>   37

         Trustee for the account of such Certificateholder, in each such case,
         pari passu on the basis of all amounts described in clauses (i) through
         (iii) above;

         seventh, such amount remaining as shall be required to pay in full
         Adjusted Expected Distributions on the Class A Certificates shall be
         distributed to the Class A Trustee;

         eighth, such amount remaining as shall be required to pay in full
         Adjusted Expected Distributions on the Class B Certificates shall be
         distributed to the Class B Trustee; and

         ninth, such amount remaining as shall be required to pay in full
         Adjusted Expected Distributions on the Class C Certificates shall be
         distributed to the Class C Trustee.

         Notwithstanding the priority of payments specified above, in the event
any Investment Earnings on amounts on deposit in any Cash Collateral Account
resulting from an Unapplied Provider Advance are deposited in the Collection
Account, such Investment Earnings shall be applied in satisfaction of interest
payable in respect such Unapplied Provider Advance to the extent of such
Investment Earnings.

                  SECTION 3.4. Other Payments. (a) Any payments received by the
Subordination Agent for which no provision as to the application thereof is made
in this Agreement shall be distributed by the Subordination Agent (i) in the
order of priority specified in Section 3.3 hereof and (ii) to the extent
received or realized at any time after the Final Distributions for each Class of
Certificates have been made, in the manner provided in clause "first" of Section
3.3 hereof.

                  (b) On any Interest Payment Date under each Liquidity Facility
which is not a Distribution Date, the Subordination Agent shall pay to the
Liquidity Provider under such Liquidity Facility from, and to the extent of,
amounts on deposit in the Collection Account, an amount equal to the amount of
interest then due and payable to such Liquidity Provider under such Liquidity
Facility.

                  (c) Except as otherwise provided in Section 3.3 hereof, if the
Subordination Agent receives any Scheduled Payment after the Scheduled Payment
Date relating thereto, but prior to such payment becoming an Overdue Scheduled
Payment, then the Subordination Agent shall deposit such Scheduled Payment in
the Collection Account and promptly distribute such Scheduled Payment in
accordance with the priority of distributions set forth in Section 3.2 hereof;
provided that, for the purposes of this Section 3.4(c) only, each reference in
clause "eighth" of Section 3.2 to "Distribution Date" shall be deemed to mean
the actual date of payment of such Scheduled Payment and each reference in
clause "fifth", "sixth" or "seventh" of Section 3.2 to "Distribution Date" shall
be deemed to refer to such Scheduled Payment Date.

                                       34
<PAGE>   38

                  SECTION 3.5. Payments to the Trustees and the Liquidity
Providers. Any amounts distributed hereunder to any Liquidity Provider shall be
paid to such Liquidity Provider by wire transfer of funds to the address such
Liquidity Provider shall provide to the Subordination Agent. The Subordination
Agent shall provide a Written Notice of any such transfer to the applicable
Liquidity Provider, as the case may be, at the time of such transfer. Any
amounts distributed hereunder by the Subordination Agent to any Trustee which
shall not be the same institution as the Subordination Agent shall be paid to
such Trustee by wire transfer funds at the address such Trustee shall provide to
the Subordination Agent.

                  SECTION 3.6. Liquidity Facilities. (a) Interest Drawings. If
on any Distribution Date, after giving effect to the subordination provisions of
this Agreement, the Subordination Agent shall not have sufficient funds for the
payment of any amounts due and owing in respect of accrued interest on the Class
A Certificates, the Class B Certificates or the Class C Certificates (at the
Stated Interest Rate for such Class of Certificates), then, prior to 1:00 PM
(New York City time) on such Distribution Date, the Subordination Agent shall
request a drawing (each such drawing, an "Interest Drawing") under each
Liquidity Facility with respect to such Class of Certificates in an amount equal
to the lesser of (i) of an amount sufficient to pay the amount of such accrued
interest (at the Stated Interest Rate for such Class of Certificates) and (ii)
the Available Amount under such Liquidity Facility, and shall pay such amount to
the Trustee with respect to such Class of Certificates in payment of such
accrued interest.

                  (b) Application of Interest Drawings. Notwithstanding anything
to the contrary contained in this Agreement, (i) all payments received by the
Subordination Agent in respect of an Interest Drawing under the Class A
Liquidity Facility and all amounts withdrawn by the Subordination Agent from the
Class A Cash Collateral Account, and payable in each case to the Class A
Certificateholders or the Class A Trustee, shall be promptly distributed to the
Class A Trustee, (ii) all payments received by the Subordination Agent in
respect of an Interest Drawing under the Class B Liquidity Facility and all
amounts withdrawn by the Subordination Agent from the Class B Cash Collateral
Account, and payable in each case to the Class B Certificateholders, shall be
promptly distributed to the Class B Trustee and (iii) all payments received by
the Subordination Agent in respect of an Interest Drawing under the Class C
Liquidity Facility and all amounts withdrawn by the Subordination Agent from the
Class C Cash Collateral Account, and payable in each case to the Class C
Certificateholders, shall be promptly distributed to the Class C Trustee.

                  (c) Downgrade Drawings. If at any time (i) in the case of any
Liquidity Facility (other than as provided in clause (ii) below) the short-term
unsecured debt rating of the Liquidity Provider thereof issued by any Rating
Agency is lower than the applicable Threshold Rating or (ii) (with respect to
any MSCS Liquidity Facility, so long as MSCS is the Liquidity Provider
thereunder) the short-term unsecured debt rating of the Guarantor issued by any
Rating Agency is lower than the applicable Threshold Rating or the related
Guarantee Agreement ceases to be in full force and effect, becomes invalid or
unenforceable or the Guarantor denies its liability thereunder (any such
occurrence, a "Guarantee Event"), within 10 days after receiving notice of such
downgrading or Guarantee Event, as the case may be (but not later than the
expiration date of the Liquidity Facility issued by the relevant Liquidity
Provider (the "Downgraded Facility")), such Liquidity Provider or Atlas may
arrange for a Replacement

                                       35
<PAGE>   39

Liquidity Provider to issue and deliver a Replacement Liquidity Facility to the
Subordination Agent. If a Downgraded Facility has not been replaced in
accordance with the terms of this paragraph, the Subordination Agent shall, on
such 10th (or if such day is not a Business Day, on the next succeeding Business
Day) (or, if earlier, the expiration date of such Downgraded Facility), request
a drawing in accordance with and to the extent permitted by such Downgraded
Facility (such drawing, a "Downgrade Drawing") of all available and undrawn
amounts thereunder. Amounts drawn pursuant to a Downgrade Drawing shall be
maintained and invested as provided in Section 3.6(f) hereof. The Liquidity
Provider may also arrange for a Replacement Liquidity Provider to issue and
deliver a Replacement Liquidity Facility at any time after such Downgrade
Drawing so long as such Downgrade Drawing has not been reimbursed in full to the
Liquidity Provider.

                  (d) Non-Extension Drawings. If the any Liquidity Facility with
respect to any Class of Certificates is scheduled to expire on a date (the
"Stated Expiration Date") prior to the date that is 15 days after the Final
Legal Distribution Date for such Class of Certificates, then, no earlier than
the 60th day and no later than the 40th day prior to the then Stated Expiration
Date, the Subordination Agent shall request that such Liquidity Provider extend
the Stated Expiration Date for a period of 364 days after the Stated Expiration
Date (unless the obligations of such Liquidity Provider thereunder are earlier
terminated in accordance therewith). The applicable Liquidity Provider shall
advise the Borrower, no earlier than 40 days and no later than 25 days prior to
such Stated Expiration Date, whether, in its sole discretion, it agrees to so
extend the Stated Expiration Date for such Liquidity Facility. If, on or before
such 25th day, such Liquidity Facility shall not have been so extended or
replaced in accordance with Section 3.6(e), or if such Liquidity Provider fails
irrevocably and unconditionally to advise the Borrower on or before the 25th day
prior to the Stated Expiration Date then in effect that such Stated Expiration
Date shall be so extended, the Subordination Agent shall, on such 25th day (or
as soon as possible thereafter), in accordance with and to the extent permitted
by the terms of the expiring Liquidity Facility (a "Non-Extended Facility"),
request a drawing under such expiring Liquidity Facility (such drawing, a
"Non-Extension Drawing") of all available and undrawn amounts thereunder.
Amounts drawn pursuant to a Non-Extension Drawing shall be maintained and
invested in accordance with Section 3.6(f) hereof. Notwithstanding the
immediately preceding three sentences, so long as MSCS is the Liquidity Provider
for any MSCS Liquidity Facility, the Stated Expiration Date therefor shall be
automatically extended, effective on the 25th day prior to such Stated
Expiration Date (unless such Stated Expiration Date is on or after the date that
is 15 days after the Final Legal Distribution Date for the relevant Class of
Certificates), for a period of 364 days after such Stated Expiration Date
(unless the obligations of such Liquidity Provider are earlier terminated in
accordance with such Liquidity Facility) without the necessity of any act by the
Subordination Agent or such Liquidity Provider, unless such Liquidity Provider
shall advise the Subordination Agent, prior to such 25th day, that it does not
agree to such extension of the Stated Expiration Date, in which event, the
Subordination Agent shall, on such 25th day (or as soon as possible thereafter),
in accordance with and to the extent permitted by the terms of the Non-Extended
Facility, request a Non-Extension Drawing under the Non-Extended Facility of all
available and undrawn amounts thereunder.

                                       36
<PAGE>   40

                  (e) Issuance of Replacement Liquidity Facility. (i) At any
time, Atlas may, at its option, with cause or without cause, arrange for a
Replacement Liquidity Facility to replace any Liquidity Facility for any Class
of Certificates (including any Replacement Liquidity Facility provided pursuant
to Section 3.6(e)(ii) hereof); provided, however, that neither WESTLB nor MSCS
shall be replaced by Atlas as a Liquidity Provider with respect to any Class of
Certificates prior to the fourth anniversary of the Closing Date unless (A)
there shall have become due to such Liquidity Provider, or such Liquidity
Provider shall have demanded, amounts pursuant to Section 3.01, 3.02 or 3.03 of
any Liquidity Facility or pursuant to the Tax Letter and the replacement of such
Liquidity Provider would reduce or eliminate the obligation to pay such amounts
or Atlas determines in good faith that there is a substantial likelihood that
such Liquidity Provider will have the right to claim any such amounts (unless
such Liquidity Provider waives, in writing, any right it may have to claim such
amounts), which determination shall be set forth in a certificate delivered by
Atlas to such Liquidity Provider setting forth the basis for such determination
and accompanied by an opinion of outside counsel selected by Atlas and
reasonably acceptable to such Liquidity Provider verifying the legal
conclusions, if any, of such certificate relating to such basis, provided that,
in the case of any likely claim for such amounts based upon any proposed, or
proposed change in, law, rule, regulation, interpretation, directive,
requirement, request or administrative practice, such opinion may assume the
adoption or promulgation of such proposed matter, (B) it shall become unlawful
or impossible for such Liquidity Provider (or its Lending Office) to maintain or
fund its LIBOR Advances as described in Section 3.10 of any Liquidity Facility,
(C) with respect to any Liquidity Facility for which MSCS is not the Liquidity
Provider, the short-term unsecured debt rating of such Liquidity Provider or,
with respect to the MSCS Liquidity Facilities (so long as MCSC is the Liquidity
Provider thereunder), the short-term unsecured debt rating of the Guarantor, is
downgraded by any Rating Agency and there is a resulting downgrade in the rating
by any Rating Agency of any related Class of Certificates, (D) a Downgrade
Drawing or a Non-Extension Drawing shall have occurred under any Liquidity
Facility, or (E) such Liquidity Provider shall have breached any of its payment
(including, without limitation, funding) obligations under any Liquidity
Facility. If such Replacement Liquidity Facility is provided at any time after a
Downgrade Drawing or Non-Extension Drawing has been made, all funds on deposit
in the relevant Cash Collateral Account will be returned to the Liquidity
Provider being replaced.

                  (ii) If any Liquidity Provider shall determine not to extend
         any of its Liquidity Facility in accordance with Section 3.6(d), then
         such Liquidity Provider may, at its option, arrange for a Replacement
         Liquidity Facility to replace such Liquidity Facility during the period
         no earlier than 40 days and no later than 25 days prior to the then
         effective Stated Expiration Date of such Liquidity Facility.

                  (iii) No Replacement Liquidity Facility arranged by Atlas or a
         Liquidity Provider in accordance with clause (i) or (ii) above,
         respectively, shall become effective and no such Replacement Liquidity
         Facility shall be deemed a Liquidity Facility" under the Operative
         Agreements (in each case other than insofar as necessary to permit the
         repayment of amounts owed to the replaced Liquidity Provider), unless
         and until (A) each of the conditions referred to in clause (iv) below
         shall have been satisfied, (B) if such Replacement Liquidity Facility
         shall materially adversely affect the rights, remedies,

                                       37
<PAGE>   41

         interests or obligations of the Class A Certificateholders, the Class B
         Certificateholders or the Class C Certificateholders under any of the
         Operative Agreements, the applicable Trustee shall have consented, in
         writing, to the execution and issuance of such Replacement Liquidity
         Facility and (C) in the case of a Replacement Liquidity Facility
         arranged by a Liquidity Provider under Section 3.6(e)(ii), such
         Replacement Liquidity Facility is acceptable to Atlas.

                  (iv) In connection with the issuance of each Replacement
         Liquidity Facility, the Subordination Agent shall (x) prior to the
         issuance of such Replacement Liquidity Facility, obtain written
         confirmation from each Rating Agency that such Replacement Liquidity
         Facility will not cause a reduction of any rating then in effect for
         any Class of Certificates by such Rating Agency (without regard to any
         downgrading of any rating of any Liquidity Provider being replaced
         pursuant to Section 3.6(c) hereof), (y) pay all Liquidity Obligations
         then owing to the replaced Liquidity Provider (which payment shall be
         made first from available funds in the Cash Collateral Account as
         described in clause (vii) of Section 3.6(f) hereof, and thereafter from
         any other available source, including, without limitation, a drawing
         under the Replacement Liquidity Facility) and (z) cause the issuer of
         the Replacement Liquidity Facility to deliver the Replacement Liquidity
         Facility to the Subordination Agent, together with a legal opinion
         opining that such Replacement Liquidity Facility is an enforceable
         obligation of such Replacement Liquidity Provider.

                  (v) Upon satisfaction of the conditions set forth in clauses
         (iii) and (iv) of this Section 3.6(e), (w) the replaced Liquidity
         Facility shall terminate, (x) the Subordination Agent shall, if and to
         the extent so requested by Atlas or the Liquidity Provider being
         replaced, execute and deliver any certificate or other instrument
         required in order to terminate the replaced Liquidity Facility, shall
         surrender the replaced Liquidity Facility to the Liquidity Provider
         being replaced and shall execute and deliver the Replacement Liquidity
         Facility and any associated Fee Letter, (y) each of the parties hereto
         shall enter into any amendments to this Agreement necessary to give
         effect to (1) the replacement of the applicable Liquidity Provider with
         the applicable Replacement Liquidity Provider and (2) the replacement
         of the applicable Liquidity Facility with the applicable Replacement
         Liquidity Facility and (z) the applicable Replacement Liquidity
         Provider shall be deemed to be a Liquidity Provider with the rights and
         obligations of a Liquidity Provider hereunder and under the other
         Operative Agreements and such Replacement Liquidity Facility shall be
         deemed to be a Liquidity Facility hereunder and under the other
         Operative Agreements.

                  (f) Cash Collateral Accounts; Withdrawals; Investments. In the
event the Subordination Agent shall draw all available amounts under the Class A
Liquidity Facility, the Class B Liquidity Facility or the Class C Liquidity
Facility pursuant to Section 3.6(c), 3.6(d) or 3.6(i) hereof, or in the event
amounts are to be deposited in the Cash Collateral Account pursuant to subclause
(B) of clause "third" of Section 2.4(b), subclause (B) of clause "third" of
Section 3.2 or subclause (B) of clause "fourth" of Section 3.3, amounts so drawn
or to be deposited, as the case may be, shall be deposited by the Subordination
Agent in the Class A Cash Collateral Account, the Class B Cash Collateral
Account or the Class C Cash Collateral Account,

                                       38
<PAGE>   42

respectively. All amounts on deposit in each Cash Collateral Account shall be
invested and reinvested in Eligible Investments in accordance with Section
2.2(b) hereof. Investment Earnings on amounts on deposit in each Cash Collateral
Account shall be deposited in the Collection Account on each Interest Payment
Date under the related Liquidity Facility and applied on such Interest Payment
Date in accordance with Section 2.4, 3.2, 3.3 or 3.4 (as applicable). The
Subordination Agent shall deliver a written statement to Atlas and each
Liquidity Provider one day prior to each Interest Payment Date setting forth the
aggregate amount of Investment Earnings held in the applicable Cash Collateral
Accounts as of such date. In addition, from and after the date funds are so
deposited, the Subordination Agent shall make withdrawals from such account as
follows:

                  (i) on each Distribution Date, the Subordination Agent shall,
         to the extent it shall not have received funds to pay accrued and
         unpaid interest due and owing on the Class A Certificates (at the
         Stated Interest Rate for the Class A Certificates) from any other
         source, withdraw from the Class A Cash Collateral Account, and pay to
         the Class A Trustee, an amount equal to the lesser of (x) an amount
         necessary to pay accrued and unpaid interest (at the Stated Interest
         Rate for the Class A Certificates) on such Class A Certificates and (y)
         the amount on deposit in the Class A Cash Collateral Account;

                  (ii) on each Distribution Date, the Subordination Agent shall,
         to the extent it shall not have received funds to pay accrued and
         unpaid interest due and owing on the Class B Certificates (at the
         Stated Interest Rate for the Class B Certificates) from any other
         source, withdraw from the Class B Cash Collateral Account, and pay to
         the Class B Trustee, an amount equal to the lesser of (x) an amount
         necessary to pay accrued and unpaid interest (at the Stated Interest
         Rate for the Class B Certificates) on such Class B Certificates and (y)
         the amount on deposit in the Class B Cash Collateral Account;

                  (iii) on each Distribution Date, the Subordination Agent
         shall, to the extent it shall not have received funds to pay accrued
         and unpaid interest due and owing on the Class C Certificates (at the
         Stated Interest Rate for the Class C Certificates) from any other
         source, withdraw from the Class C Cash Collateral Account, and pay to
         the Class C Trustee, an amount equal to the lesser of (x) an amount
         necessary to pay accrued and unpaid interest (at the Stated Interest
         Rate for the Class C Certificates) on such Class C Certificates and (y)
         the amount on deposit in the Class C Cash Collateral Account;

                  (iv) on each date on which the Pool Balance of the Class A
         Trust shall have been reduced by payments made to the Class A
         Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or
         pursuant to Section 2.03 of the Escrow and Paying Agent Agreement for
         such Class, the Subordination Agent shall withdraw from the Class A
         Cash Collateral Account such amount as is necessary so that, after
         giving effect to the reduction of the Pool Balance on such date
         (including any such reduction resulting from a prior withdrawal of
         amounts on deposit in the Class A Cash Collateral Account on such
         date), an amount equal to the sum of the Required Amount (with respect
         to the Class A Liquidity Facility) plus Investment Earnings on deposit
         in such Cash Collateral Account will be on deposit in the Class A Cash
         Collateral Account and shall first, pay such

                                       39
<PAGE>   43

         amount to the relevant Class A Liquidity Provider until the Liquidity
         Obligations (with respect to the Class A Certificates) owing to such
         Liquidity Provider shall have been paid in full, and second, deposit
         any remaining amount in the Collection Account;

                  (v) on each date on which the Pool Balance of the Class B
         Trust shall have been reduced by payments made to the Class B
         Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or
         pursuant to Section 2.03 of the Escrow and Paying Agent Agreement of
         such Class, the Subordination Agent shall withdraw from the Class B
         Cash Collateral Account such amount as is necessary so that, after
         giving effect to the reduction of the Pool Balance on such date
         (including any such reduction resulting from a prior withdrawal of
         amounts on deposit in the Class B Cash Collateral Account on such
         date), an amount equal to the sum of the Required Amount (with respect
         to the Class B Liquidity Facility) plus Investment Earnings on deposit
         in such Cash Collateral Account will be on deposit in the Class B Cash
         Collateral Account and shall first, pay such amount to the Class B
         Liquidity Provider until the Liquidity Obligations (with respect to the
         Class B Certificates) owing to such Liquidity Provider shall have been
         paid in full, and second, deposit any remaining amount in the
         Collection Account;

                  (vi) on each date on which the Pool Balance of the Class C
         Trust shall have been reduced by payments made to the Class C
         Certificateholders pursuant to Section 2.4, 3.2 or 3.3 hereof or
         pursuant to Section 2.03 of the Escrow and Paying Agent Agreement for
         such Class, the Subordination Agent shall withdraw from the Class C
         Cash Collateral Account such amount as is necessary so that, after
         giving effect to the reduction of the Pool Balance on such date
         (including any such reduction resulting from a prior withdrawal of
         amounts on deposit in the Class C Cash Collateral Account on such
         date), an amount equal to the sum of the Required Amount (with respect
         to the Class C Liquidity Facility) plus Investment Earnings on deposit
         in such Cash Collateral Account will be on deposit in the Class C Cash
         Collateral Account and shall first, pay such amount to the Class C
         Liquidity Provider until the Liquidity Obligations (with respect to the
         Class C Certificates) owing to such Liquidity Provider shall have been
         paid in full, and second, deposit any remaining amount in the
         Collection Account;

                  (vii) if a Replacement Liquidity Facility for any Class of
         Certificates shall be delivered to the Subordination Agent following
         the date on which funds have been deposited into the Cash Collateral
         Account for such Class of Certificates, the Subordination Agent shall
         withdraw all amounts on deposit in such Cash Collateral Account and
         shall pay such amounts to the replaced Liquidity Provider until all
         Liquidity Obligations owed to such Person shall have been paid in full,
         and shall deposit any remaining amount in the Collection Account; and

                  (viii) following the payment of Final Distributions with
         respect to any Class of Certificates, on the date on which the
         Subordination Agent shall have been notified by the Liquidity Provider
         for such Class of Certificates that the Liquidity Obligations owed to
         such Liquidity Provider have been paid in full, the Subordination Agent
         shall withdraw

                                       40
<PAGE>   44

         all amounts on deposit in the Cash Collateral Account in respect of
         such Class of Certificates and shall deposit such amount in the
         Collection Account.

                  (g) Reinstatement. With respect to any Interest Drawing under
the Liquidity Facility for any Trust, upon the reimbursement of the applicable
Liquidity Provider for all or any part of the amount of such Interest Drawing,
together with any accrued interest thereon, the Available Amount of such
Liquidity Facility shall be reinstated by an amount equal to the amount of such
Interest Drawing so reimbursed to the applicable Liquidity Provider but not to
exceed the Maximum Commitment with respect to such Liquidity Facility; provided,
however, that such Liquidity Facility shall not be so reinstated in part or in
full at any time if (x) both a Performing Note Deficiency exists and a Liquidity
Event of Default shall have occurred and be continuing with respect to the
relevant Liquidity Facility or (y) a Final Drawing shall have occurred with
respect to such Liquidity Facility. In the event that, with respect to any
particular Liquidity Facility (i) funds are withdrawn from any Cash Collateral
Account pursuant to clause (i), (ii) or (iii) of Section 3.6(f) hereof or (ii)
such Liquidity Facility shall become a Downgraded Facility or a Non-Extended
Facility at a time when unreimbursed Interest Drawings under such Liquidity
Facility have reduced the Available Amount thereunder to zero, then funds
received by the Subordination Agent at any time other than (x) any time when a
Liquidity Event of Default shall have occurred and be continuing with respect to
such Liquidity Facility and a Performing Note Deficiency exists or (y) any time
after a Final Drawing shall have occurred with respect to such Liquidity
Facility shall be deposited in such Cash Collateral Account as and to the extent
provided in clause "third" of Section 2.4(b), clause "third" of Section 3.2 or
clause "fourth" of Section 3.3, as applicable, and applied in accordance with
Section 3.6(f) hereof.

                  (h) Reimbursement. The amount of each drawing under the
Liquidity Facilities shall be due and payable, together with interest thereon,
on the dates and at the rates, respectively, provided in the Liquidity
Facilities.

                  (i) Final Drawing. Upon receipt from a Liquidity Provider of a
Termination Notice with respect to any Liquidity Facility, the Subordination
Agent shall, not later than the date specified in such Termination Notice, in
accordance with and to the extent permitted by the terms of such Liquidity
Facility, request a drawing under such Liquidity Facility of all available and
undrawn amounts thereunder (a "Final Drawing"). Amounts drawn pursuant to a
Final Drawing shall be maintained and invested in accordance with Section 3.6(f)
hereof.

                  (j) Reduction of Stated Amount. Promptly following each date
on which the Required Amount of the Liquidity Facility for a Class of
Certificates is reduced as a result of a reduction in the Pool Balance with
respect to such Certificates, the Subordination Agent shall, if any such
Liquidity Facility provides for reductions of the Stated Amount of such
Liquidity Facility and regardless of whether such reductions are automatic,
request such Liquidity Provider for such Class of Certificates to reduce such
Stated Amount to an amount equal to the Required Amount with respect to such
Liquidity Facility (as calculated by the Subordination Agent after giving effect
to such payment). Each such request shall be made in accordance with the
provisions of the applicable Liquidity Facility.

                                       41
<PAGE>   45

                  (k) Relation to Subordination Provisions. Interest Drawings
under the Liquidity Facilities and withdrawals from the Cash Collateral
Accounts, in each case, in respect of interest on the Certificates of any Class,
will be distributed to the Trustee for such Class of Certificates,
notwithstanding Sections 3.2, 3.3 and 3.6(h) hereof.

                                   ARTICLE IV

                              EXERCISE OF REMEDIES

                  SECTION 4.1. Directions from the Controlling Party. (a) (i)
Following the occurrence and during the continuation of an Indenture Event of
Default under any Indenture, the Controlling Party shall direct the
Subordination Agent, which in turn shall direct the Loan Trustee under such
Indenture, in the exercise of remedies available to the holders of the Equipment
Notes issued pursuant to such Indenture, including, without limitation, the
ability to vote all such Equipment Notes in favor of Accelerating such Equipment
Notes in accordance with the provisions of such Indenture. Subject to the Owner
Trustees' and the Owner Participants' rights, if any, set forth in the
Indentures with respect to Leased Aircraft to purchase the Equipment Notes and
the provisions of the next paragraph, if the Equipment Notes issued pursuant to
any Indenture have been Accelerated following an Indenture Event of Default with
respect thereto, the Controlling Party direct the Subordination Agent to,
assign, contract to sell or otherwise dispose of and deliver all (but not less
than all) of such Equipment Notes to any Person at public or private sale, at
any location at the option of the Controlling Party, all upon such terms and
conditions as it may reasonably deem advisable in accordance with applicable
law.

                  (ii) Subject to the Owner Trustees' and the Owner
         Participants' rights, if any, set forth in the Indentures with respect
         to Leased Aircraft to purchase the Equipment Notes, and notwithstanding
         the foregoing, so long as any Certificates remain Outstanding, during
         the period ending on the date which is nine months after the earlier of
         (x) the Acceleration of the Equipment Notes issued pursuant to any
         Indenture or (y) the occurrence of a Atlas Bankruptcy Event, without
         the consent of each Trustee, (A) no Aircraft subject to the Lien of
         such Indenture or such Equipment Notes may be sold if the net proceeds
         from such sale would be less than the Minimum Sale Price for such
         Aircraft or such Equipment Notes, and (B) with respect to any Leased
         Aircraft, the amount and payment dates of rentals payable by Atlas
         under the Lease for such Aircraft may not be adjusted, if, as a result
         of such adjustment, the discounted present value of all such rentals
         would be less than 75% of the discounted present value of the rentals
         payable by Atlas under such Lease before giving effect to such
         adjustment, in each case, using the weighted average interest rate of
         the Equipment Notes issued pursuant to such Indenture as the discount
         rate.

                  (iii) At the request of the Controlling Party, the
         Subordination Agent may from time to time during the continuance of an
         Indenture Event of Default (and before the occurrence of a Triggering
         Event) commission LTV Appraisals with respect to the Aircraft subject
         to such Indenture.

                                       42
<PAGE>   46

                  (iv) After a Triggering Event occurs and any Equipment Note
         becomes a Non-Performing Equipment Note, the Subordination Agent shall
         obtain Appraisals with respect to all of the Aircraft (the "LTV
         Appraisals") as soon as practicable and additional LTV Appraisals on or
         prior to each anniversary of the date of such initial LTV Appraisals;
         provided that if the Controlling Party reasonably objects to the
         appraised value of the Aircraft shown in such LTV Appraisals, the
         Controlling Party shall have the right to obtain or cause to be
         obtained substitute any LTV Appraisals (including any LTV Appraisals
         based upon physical inspection of the Aircraft).

                  (b) The Controlling Party shall take such actions as it may
reasonably deem most effectual to complete the sale or other disposition of such
Aircraft or Equipment Notes. In addition, in lieu of any sale, assignment,
contract to sell or other disposition, the Controlling Party may maintain
possession of such Equipment Notes and continue to apply monies received in
respect of such Equipment Notes in accordance with Article III hereof. In
addition, in lieu of such sale, assignment, contract to sell or other
disposition, or in lieu of such maintenance of possession, the Controlling Party
may, subject to the terms and conditions of the related Indenture, instruct the
Loan Trustee under such Indenture to foreclose on the Lien on the related
Aircraft.

                  SECTION 4.2. Remedies Cumulative. Each and every right, power
and remedy given to the Trustees, the Liquidity Providers, the Controlling Party
or the Subordination Agent specifically or otherwise in this Agreement shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically herein
given or otherwise existing may, subject always to the terms and conditions
hereof, be exercised from time to time and as often and in such order as may be
deemed expedient by any Trustee, any Liquidity Provider, the Controlling Party
or the Subordination Agent, as appropriate, and the exercise or the beginning of
the exercise of any power or remedy shall not be construed to be a waiver of the
right to exercise at the same time or thereafter any other right, power or
remedy. No delay or omission by any Trustee, any Liquidity Provider, the
Controlling Party or the Subordination Agent in the exercise of any right,
remedy or power or in the pursuit of any remedy shall impair any such right,
power or remedy or be construed to be a waiver of any default or to be an
acquiescence therein.

                  SECTION 4.3. Discontinuance of Proceedings. In case any party
to this Agreement (including the Controlling Party in such capacity) shall have
instituted any Proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, entry or otherwise, and such Proceeding shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Person instituting such Proceeding, then and in every such case
each such party shall, subject to any determination in such Proceeding, be
restored to its former position and rights hereunder, and all rights, remedies
and powers of such party shall continue as if no such Proceeding had been
instituted.

                                       43
<PAGE>   47

                  SECTION 4.4. Right of Certificateholders to Receive Payments
Not to Be Impaired. Anything in this Agreement to the contrary notwithstanding
but subject to each Trust Agreement, the right of any Certificateholder or any
Liquidity Provider, respectively, to receive payments hereunder (including
without limitation pursuant to Section 2.4, 3.2 or 3.3 hereof) when due, or to
institute suit for the enforcement of any such payment on or after the
applicable Distribution Date, shall not be impaired or affected without the
consent of such Certificateholder or such Liquidity Provider, respectively.

                  SECTION 4.5. Undertaking for Costs. In any Proceeding for the
enforcement of any right or remedy under this Agreement or in any Proceeding
against any Controlling Party or the Subordination Agent for any action taken or
omitted by it as Controlling Party or Subordination Agent, as the case may be, a
court in its discretion may require the filing by any party litigant 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. The provisions of
this Section do not apply to a suit instituted by the Subordination Agent, a
Liquidity Provider or a Trustee or a suit by Certificateholders holding more
than 10% of the original principal amount of any Class of Certificates.

                                    ARTICLE V

                       DUTIES OF THE SUBORDINATION AGENT;
                          AGREEMENTS OF TRUSTEES, ETC.

                  SECTION 5.1. Notice of Indenture Event of Default or
Triggering Event. (a) In the event the Subordination Agent shall have actual
knowledge of the occurrence of an Indenture Event of Default or a Triggering
Event, as promptly as practicable, and in any event within 10 days after
obtaining knowledge thereof, the Subordination Agent shall transmit by mail or
courier to the Rating Agencies, DCR, the Liquidity Providers and the Trustees
notice of such Indenture Event of Default or Triggering Event, unless such
Indenture Event of Default or Triggering Event shall have been cured or waived.
For all purposes of this Agreement, in the absence of actual knowledge on the
part of a Responsible Officer, the Subordination Agent shall not be deemed to
have knowledge of any Indenture Event of Default or Triggering Event unless
notified in writing by one or more Trustees, one or more Liquidity Providers or
one or more Certificateholders.

                  (b) Other Notices. The Subordination Agent will furnish to
each Liquidity Provider and Trustee, promptly upon receipt thereof, duplicates
or copies of all reports, notices, requests, demands, certificates, financial
statements and other instruments furnished to the Subordination Agent as
registered holder of the Equipment Notes or otherwise in its capacity as
Subordination Agent to the extent the same shall not have been otherwise
directly distributed to such Liquidity Provider or Trustee, as applicable,
pursuant to the express provision of any other Operative Agreement.

                                       44
<PAGE>   48

                  SECTION 5.2. Indemnification. The Subordination Agent shall
not be required to take any action or refrain from taking any action under
Section 5.1 (other than the first sentence thereof) or Article IV hereof unless
the Subordination Agent shall have been indemnified (to the extent and in the
manner reasonably satisfactory to the Subordination Agent) against any
liability, cost or expense (including counsel fees and expenses) which may be
incurred in connection therewith. The Subordination Agent shall not be under any
obligation to take any action under this Agreement and nothing contained in this
Agreement shall require the Subordination Agent to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers if it shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it. The
Subordination Agent shall not be required to take any action under Section 5.1
(other than the first sentence thereof) or Article IV hereof, nor shall any
other provision of this Agreement be deemed to impose a duty on the
Subordination Agent to take any action, if the Subordination Agent shall have
been advised by counsel that such action is contrary to the terms hereof or is
otherwise contrary to law.

                  SECTION 5.3. No Duties Except as Specified in Intercreditor
Agreement. The Subordination Agent shall not have any duty or obligation to take
or refrain from taking any action under, or in connection with, this Agreement,
except as expressly provided by the terms of this Agreement; and no implied
duties or obligations shall be read into this Agreement against the
Subordination Agent. The Subordination Agent agrees that it will, in its
individual capacity and at its own cost and expense (but without any right of
indemnity in respect of any such cost or expense under Section 7.1 hereof)
promptly take such action as may be necessary to duly discharge all Liens on any
of the Trust Accounts or any monies deposited therein which result from claims
against it in its individual capacity not related to its activities hereunder or
any other Operative Agreement.

                  SECTION 5.4. Notice from the Liquidity Providers and Trustees.
If any Liquidity Provider or Trustee has notice of an Indenture Event of Default
or a Triggering Event, such Person shall promptly give notice thereof to all
other Liquidity Providers and Trustees and to the Subordination Agent, provided,
however, that no such Person shall have any liability hereunder as a result of
its failure to deliver any such notice.

                                   ARTICLE VI

                             THE SUBORDINATION AGENT

                  SECTION 6.1. Authorization; Acceptance of Trusts and Duties.
Each of the Class A Trustee, the Class B Trustee and the Class C Trustee hereby
designates and appoints the Subordination Agent as the agent and trustee of such
Trustee under the applicable Liquidity Facility and authorizes the Subordination
Agent to enter into the applicable Liquidity Facility as agent and trustee for
such Trustee. Each of the Liquidity Providers and the Trustees hereby designates
and appoints the Subordination Agent as the Subordination Agent under this
Agreement. WTC hereby accepts the duties hereby created and applicable to it as
the

                                       45
<PAGE>   49

Subordination Agent and agrees to perform the same but only upon the terms of
this Agreement and agrees to receive and disburse all monies received by it in
accordance with the terms hereof. The Subordination Agent shall not be
answerable or accountable under any circumstances, except (a) for its own
willful misconduct or gross negligence (or ordinary negligence in the handling
of funds), (b) as provided in Section 2.2 hereof and (c) for liabilities that
may result from the material inaccuracy of any representation or warranty of the
Subordination Agent made in its individual capacity in any Operative Agreement.
The Subordination Agent shall not be liable for any error of judgment made in
good faith by a Responsible Officer of the Subordination Agent, unless it is
proved that the Subordination Agent was negligent in ascertaining the pertinent
facts.

                  SECTION 6.2. Absence of Duties. The Subordination Agent shall
have no duty to see to any recording or filing of this Agreement or any other
document, or to see to the maintenance of any such recording or filing.

                  SECTION 6.3. No Representations or Warranties as to Documents.
The Subordination Agent in its individual capacity does not make nor shall be
deemed to have made any representation or warranty as to the validity, legality
or enforceability of this Agreement or any other Operative Agreement or as to
the correctness of any statement contained in any thereof, except for the
representations and warranties of the Subordination Agent, made in its
individual capacity, under any Operative Agreement to which it is a party. The
Certificateholders, the Trustees and the Liquidity Providers make no
representation or warranty hereunder whatsoever.

                  SECTION 6.4. No Segregation of Monies; No Interest. Any monies
paid to or retained by the Subordination Agent pursuant to any provision hereof
and not then required to be distributed to any Trustee or any Liquidity Provider
as provided in Articles II and III hereof or deposited into one or more Trust
Accounts need not be segregated in any manner except to the extent required by
such Articles II and III and by law, and the Subordination Agent shall not
(except as otherwise provided in Section 2.2 hereof) be liable for any interest
thereon; provided, however, that any payments received or applied hereunder by
the Subordination Agent shall be accounted for by the Subordination Agent so
that any portion thereof paid or applied pursuant hereto shall be identifiable
as to the source thereof.

                  SECTION 6.5. Reliance; Agents; Advice of Counsel. The
Subordination Agent shall not incur liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond or other document or paper believed by it to be genuine
and believed by it to be signed by the proper party or parties. As to the Pool
Balance of any Trust as of any date, the Subordination Agent may for all
purposes hereof rely on a certificate signed by any Responsible Officer of the
applicable Trustee, and such certificate shall constitute full protection to the
Subordination Agent for any action taken or omitted to be taken by it in good
faith in reliance thereon. As to any fact or matter relating to the Liquidity
Providers or the Trustees the manner of ascertainment of which is not
specifically described herein, the Subordination Agent may for all purposes
hereof rely on a certificate, signed by any Responsible Officer of the
applicable Liquidity Provider or Trustee, as the case may be, as to such fact or
matter, and such certificate shall constitute full protection to the
Subordination

                                       46
<PAGE>   50

Agent for any action taken or omitted to be taken by it in good faith in
reliance thereon. The Subordination Agent shall assume, and shall be fully
protected in assuming, that each of the Liquidity Providers and each of the
Trustees are authorized to enter into this Agreement and to take all action to
be taken by them pursuant to the provisions hereof, and shall not inquire into
the authorization of each of the Liquidity Providers and each of the Trustees
with respect thereto. In the administration of the trusts hereunder, the
Subordination Agent may execute any of the trusts or powers hereof and perform
its powers and duties hereunder directly or through agents or attorneys and may
consult with counsel, accountants and other skilled persons to be selected and
retained by it, and the Subordination Agent shall not be liable for the acts or
omissions of any agent appointed with due care or for anything done, suffered or
omitted in good faith by it in accordance with the advice or written opinion of
any such counsel, accountants or other skilled persons.

                  SECTION 6.6. Capacity in Which Acting. The Subordination Agent
acts hereunder solely as agent and trustee herein and not in its individual
capacity, except as otherwise expressly provided in the Operative Agreements.

                  SECTION 6.7. Compensation. The Subordination Agent shall be
entitled to reasonable compensation, including expenses and disbursements, for
all services rendered hereunder and shall have a priority claim to the extent
set forth in Article III hereof on all monies collected hereunder for the
payment of such compensation, to the extent that such compensation shall not be
paid by others. The Subordination Agent agrees that it shall have no right
against any Trustee or Liquidity Provider for any fee as compensation for its
services as agent under this Agreement. The provisions of this Section 6.7 shall
survive the termination of this Agreement.

                  SECTION 6.8. May Become Certificateholder. The institution
acting as Subordination Agent hereunder may become a Certificateholder and have
all rights and benefits of a Certificateholder to the same extent as if it were
not the institution acting as the Subordination Agent.

                  SECTION 6.9. Subordination Agent Required; Eligibility. There
shall at all times be a Subordination Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any State or the District of Columbia having a combined capital
and surplus of at least $100,000,000 (or the obligations of which, whether now
in existence or hereafter incurred, are fully and unconditionally guaranteed by
a corporation organized and doing business under the laws of the United States
of America, any State thereof or of the District of Columbia and having a
combined capital and surplus of at least $100,000,000), if there is such an
institution willing and able to perform the duties of the Subordination Agent
hereunder upon reasonable or customary terms. Such corporation shall be a
citizen of the United States and shall be authorized under the laws of the
United States or any State thereof or of the District of Columbia to exercise
corporate trust powers and shall be subject to supervision or examination by
federal, state or District of Columbia authorities. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of any of the aforesaid supervising or examining authorities, then,
for the purposes

                                       47
<PAGE>   51

of this Section 6.9, the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published.

                  In case at any time the Subordination Agent shall cease to be
eligible in accordance with the provisions of this Section, the Subordination
Agent shall resign immediately in the manner and with the effect specified in
Section 8.1.

                  SECTION 6.10. Money to Be Held in Trust. All Equipment Notes,
monies and other property deposited with or held by the Subordination Agent
pursuant to this Agreement shall be held in trust for the benefit of the parties
entitled to such Equipment Notes, monies and other property. All such Equipment
Notes, monies or other property shall be held in the Trust Department of the
institution acting as Subordination Agent hereunder.

                                   ARTICLE VII

                     INDEMNIFICATION OF SUBORDINATION AGENT

                  SECTION 7.1. Scope of Indemnification. The Subordination Agent
shall be indemnified hereunder to the extent and in the manner described in
Section 9.1 of the Leased Aircraft Participation Agreements, Section 8.1 of the
Owned Aircraft Participation Agreements and Section 6 of the Note Purchase
Agreement. The indemnities contained in such Sections of such agreements shall
survive the termination of this Agreement.

                                  ARTICLE VIII

                          SUCCESSOR SUBORDINATION AGENT

                  SECTION 8.1. Replacement of Subordination Agent; Appointment
of Successor. The Subordination Agent may resign at any time by so notifying the
Trustees and the Liquidity Providers. The Controlling Party may remove the
Subordination Agent for cause by so notifying the Subordination Agent and may
appoint a successor Subordination Agent. The Controlling Party shall remove the
Subordination Agent if:

                  (1) the Subordination Agent fails to comply with Section 6.9
         hereof;

                  (2) the Subordination Agent is adjudged bankrupt or insolvent;

                  (3) a receiver or other public officer takes charge of the
         Subordination Agent or its property; or

                  (4) the Subordination Agent otherwise becomes incapable of
         acting.

                  If the Subordination Agent resigns or is removed or if a
vacancy exists in the office of Subordination Agent for any reason (the
Subordination Agent in such event being

                                       48
<PAGE>   52
referred to herein as the retiring Subordination Agent), the Controlling Party
shall promptly appoint a successor Subordination Agent.

                  A successor Subordination Agent shall deliver (x) a written
acceptance of its appointment as Subordination Agent hereunder to the retiring
Subordination Agent and (y) a written assumption of its obligations hereunder
and under each Liquidity Facility to each party hereto, upon which the
resignation or removal of the retiring Subordination Agent shall become
effective, and the successor Subordination Agent shall have all the rights,
powers and duties of the Subordination Agent under this Agreement. The successor
Subordination Agent shall mail a notice of its succession to the Liquidity
Providers and the Trustees. The retiring Subordination Agent shall promptly
transfer its rights under each of the Liquidity Facilities and all of the
property held by it as Subordination Agent to the successor Subordination Agent.

                  If a successor Subordination Agent does not take office within
60 days after the retiring Subordination Agent resigns or is removed, the
retiring Subordination Agent or one or more of the Trustees may petition any
court of competent jurisdiction for the appointment of a successor Subordination
Agent.

                  If the Subordination Agent fails to comply with Section 6.9
hereof (to the extent applicable), one or more of the Trustees or one or more of
the Liquidity Providers may petition any court of competent jurisdiction for the
removal of the Subordination Agent and the appointment of a successor
Subordination Agent.

                  Notwithstanding the foregoing, no resignation or removal of
the Subordination Agent shall be effective unless and until a successor has been
appointed. No appointment of a successor Subordination Agent shall be effective
unless and until the Rating Agencies shall have delivered a Ratings
Confirmation.

                                   ARTICLE IX

                           SUPPLEMENTS AND AMENDMENTS

                  SECTION 9.1. Amendments, Waivers, etc. (a) This Agreement may
not be supplemented, amended or modified without the consent of each Trustee
(acting, except in the case of any amendment pursuant to Section 3.6(e)(v)(y)
hereof, with the consent of holders of Certificates of the related Class
evidencing interests in the related Trust aggregating not less than a majority
in interest in such Trust or as otherwise authorized pursuant to the relevant
Trust Agreement), the Subordination Agent and each Liquidity Provider; provided,
however, that this Agreement may be supplemented, amended or modified without
the consent of (x) any Trustee if such supplement, amendment or modification (i)
is in accordance with Section 9.1(c) hereof or (ii) cures an ambiguity or
inconsistency or does not materially adversely affect such Trustee or the
holders of the related Class of Certificates and (y) any Liquidity Provider if
such supplement, amendment or modification is in accordance with Section 9.1(c)
hereof; provided further, however, that, if such supplement, amendment or
modification (A) would (x) directly or

                                       49
<PAGE>   53

indirectly modify or supersede, or otherwise conflict with, Section 2.2(b),
Section 3.6(e), Section 3.6(f)(other than the last sentence thereof), or the
second sentence of Section 10.6 (collectively, together with this proviso and
Section 9.1(c), the "Atlas Provisions") or (y) otherwise adversely affect the
interests of a potential Replacement Liquidity Provider or of Atlas with respect
to its ability to replace any Liquidity Facility or with respect to its payment
obligations under any Financing Agreement, Leased or Owned Aircraft Indenture or
(B) is made pursuant to Section 9.1(c), then such supplement, amendment or
modification shall not be effective without the additional written consent of
Atlas. Notwithstanding the foregoing, without the consent of each
Certificateholder and the Liquidity Provider with respect to the applicable
Class of Certificates, no supplement, amendment or modification of this
Agreement may (i) reduce the percentage of the interest in the related Trust
evidenced by the Certificates issued by such Trust necessary to consent to
modify or amend any provision of this Agreement or to waive compliance therewith
or (ii), except as provided in Section 9.1(c), modify Section 2.4, 3.2 or 3.3
hereof, relating to the distribution of monies received by the Subordination
Agent hereunder from the Equipment Notes or pursuant to the Liquidity
Facilities. Nothing contained in this Section shall require the consent of a
Trustee at any time following the payment of Final Distributions with respect to
the related Class of Certificates.

                  (b) In the event that the Subordination Agent, as the
registered holder of any Equipment Notes, receives a request for its consent to
any amendment, modification, consent or waiver under such Equipment Notes, the
Indenture pursuant to which such Equipment Notes were issued, or the related
Lease, Participation Agreement or other related document, (i) if no Indenture
Event of Default shall have occurred and be continuing with respect to such
Indenture, the Subordination Agent shall request directions with respect to each
Series of such Equipment Notes from the Trustee of the Trust which holds such
Equipment Notes and shall vote or consent in accordance with the directions of
such Trustee and (ii) if any Indenture Event of Default (which, in the case of
any Indenture pertaining to a Leased Aircraft, has not been cured by the
applicable Owner Trustee or the applicable Owner Participant, if applicable,
pursuant to Section 4.03 of such Indenture) shall have occurred and be
continuing with respect to such Indenture, the Subordination Agent will exercise
its voting rights as directed by the Controlling Party, subject to Sections 4.1
and 4.4 hereof; provided that no such amendment, modification or waiver shall,
without the consent of each Liquidity Provider, reduce the amount of rent,
supplemental rent or stipulated loss values payable by Atlas under any Lease or
reduce the amount of principal or interest payable by Atlas under any Equipment
Note issued under any Indenture in respect of an Owned Aircraft.

                  (c) If with respect to any Owned Aircraft Atlas issues Class D
Certificates, this Agreement shall be amended by written agreement of Atlas and
the Subordination Agent to provide for the subordination of such Class D
Certificates to the Class A Certificates, the Class B Certificates and the Class
C Certificates substantially in the same manner as the Class C Certificates are
subordinated hereunder to the Class B Certificates and the Class A Certificates.
No such amendment shall materially adversely affect any Trustee. The amendment
to this Agreement to give effect to the issuance of any Class D Certificates
shall include, without limitation:

                                       50
<PAGE>   54

                  (i) the trustee of the Class D Trust shall be added as a party
         to this Agreement;

                  (ii) the definitions of "Cash Collateral Account,"
         "Certificate," "Class," "Equipment Notes," "Final Legal Distribution
         Date," "Liquidity Facilities," "Liquidity Provider," "LTV Ratio,"
         "Stated Interest Rate," "Trust," "Trust Agreement" and "Controlling
         Party" shall be revised, as appropriate, to reflect the issuance of the
         Class D Certificates (and the subordination thereof); and

                  (iii) provisions of this Agreement governing payments with
         respect to Certificates and related notices, including, without
         limitation, Sections 2.4, 3.1, 3.2, 3.3 and 3.6(e), shall be revised to
         provide for distributions on the Class D Certificates after payment of
         all relevant distributions on Class C Certificates.

                  If with respect to any Aircraft, Series D Equipment Notes are
issued to any Person other than the Class D Trust, this Agreement shall be
amended by written agreement of Atlas and the Subordination Agent to (i) provide
for each holder of a Series D Equipment Note to be bound by the provision of
Section 2.6(a) hereof so that the Controlling Party shall be entitled to direct
the Loan Trustee as provided therein (and such Series D Equipment Notes shall
make effective provision therefor so as to bind each holder thereof to such
provisions of Section 2.6(a) hereof) and (ii) to revise the definitions of
"Controlling Party" and "Equipment Notes", as appropriate, to reflect the
issuance of the Series D Equipment Notes (and the prior rights, as against the
holders of such Series D Equipment Notes, of the Class A Trustee, the Class B
Trustee and the Class C Trustee to be such "Controlling Party"). No such
amendment shall materially adversely affect any Trustee.

                  SECTION 9.2. Subordination Agent Protected. If, in the
reasonable opinion of the institution acting as the Subordination Agent
hereunder, any document required to be executed pursuant to the terms of Section
9.1 affects any right, duty, immunity or indemnity with respect to it under this
Agreement or any Liquidity Facility, the Subordination Agent may in its
discretion decline to execute such document.

                  SECTION 9.3. Effect of Supplemental Agreements. Upon the
execution of any amendment, consent or supplement hereto pursuant to the
provisions hereof, this Agreement shall be and be deemed to be and shall be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this Agreement
of the parties hereto and beneficiaries hereof shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
agreement shall be and be deemed to be and shall be part of the terms and
conditions of this Agreement for any and all purposes. In executing or accepting
any supplemental agreement permitted by this Article IX, the Subordination Agent
shall be entitled to receive, and shall be fully protected in relying upon, an
opinion of counsel stating that the execution of such supplemental agreement is
authorized or permitted by this Agreement.

                                       51
<PAGE>   55

                  SECTION 9.4. Notice to Rating Agencies. Promptly following its
receipt of each amendment, consent, modification, supplement or waiver
contemplated by this Article IX, the Subordination Agent shall send a copy
thereof to each Rating Agency and to DCR.

                                    ARTICLE X

                                  MISCELLANEOUS

                  SECTION 10.1. Termination of Intercreditor Agreement.
Following payment of Final Distributions with respect to each Class of
Certificates and the payment in full of all Liquidity Obligations to the
Liquidity Providers and provided that there shall then be no other amounts due
to the Certificateholders, the Trustees, the Liquidity Providers and the
Subordination Agent hereunder or under the Trust Agreements, and that the
commitment of the Liquidity Providers under the Liquidity Facilities shall have
expired or been terminated, this Agreement and the trusts created hereby shall
terminate and this Agreement shall be of no further force or effect. Except as
aforesaid or otherwise provided, this Agreement and the trusts created hereby
shall continue in full force and effect in accordance with the terms hereof.

                  SECTION 10.2. Intercreditor Agreement for Benefit of Trustees,
Liquidity Providers and Subordination Agent. Subject to the second sentence of
Section 10.6 and the provisions of Section 4.4, nothing in this Agreement,
whether express or implied, shall be construed to give to any Person other than
the Trustees, the Liquidity Providers and the Subordination Agent any legal or
equitable right, remedy or claim under or in respect of this Agreement.

                  SECTION 10.3. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices, requests, demands, authorizations,
directions, consents, waivers or documents provided or permitted by this
Agreement to be made, given, furnished or filed shall be in writing, mailed by
certified mail, postage prepaid, or by confirmed telecopy and

         (i)      if to the Subordination Agent, addressed to at its office at:

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

                  Attention: Corporate Trust Administration
                  Telecopy:  (302) 651-8882

         (ii)     if to any 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
                  Telecopy:  (302) 651-8882

                                       52
<PAGE>   56

         (iii)    if to WESTLB as Liquidity Provider, addressed to it at its
                  offices at:

                  Westdeutsche Landesbank Girozentrale,
                            New York Branch
                  1211 Avenue of the Americas
                  New York, NY 10036

                  Attention: Martine Nowicki
                  Telecopier: (212) 852-6300

         (iv)     if to MSCS as Liquidity Provider, addressed to it at its
                  office at:

                  MORGAN STANLEY CAPITAL SERVICES, INC.
                  1585 Broadway
                  New York, NY 10036

                  Attention: Keith Amburgey
                  Telecopier: 212-761-0580

Whenever any notice in writing is required to be given by any Trustee or
Liquidity Provider or the Subordination Agent to any of the other of them, such
notice shall be deemed given and such requirement satisfied when such notice is
received. Any party hereto may change the address to which notices to such party
will be sent by giving notice of such change to the other parties to this
Agreement.

                  SECTION 10.4. 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 hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

                  SECTION 10.5. No Oral Modifications or Continuing Waivers. No
terms or provisions of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party or
other Person against whom enforcement of the change, waiver, discharge or
termination is sought and any other party or other Person whose consent is
required pursuant to this Agreement and any waiver of the terms hereof shall be
effective only in the specific instance and for the specific purpose given.

                                       53
<PAGE>   57

                  SECTION 10.6. Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
each of the parties hereto and the successors and assigns of each, all as herein
provided. In addition, the Atlas Provisions shall inure to the benefit of Atlas
and its successors and assigns, and (without limitation of the foregoing) Atlas
is hereby constituted, and agreed to be, an express third party beneficiary of
the Atlas Provisions.

                  SECTION 10.7. Headings. The headings of the various Articles
and Sections herein and in the table of contents hereto are for convenience of
reference only and shall not define or limit any of the terms or provisions
hereof.

                  SECTION 10.8. Counterpart Form. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.

                  SECTION 10.9. Subordination. (a) As (i) between the Liquidity
Providers, on the one hand, and the Trustees and the Certificateholders, on the
other hand, and (ii) among the Trustee and Certificateholders of each Class this
Agreement shall be a subordination agreement for purposes of Section 510 of the
United States Bankruptcy Code, as amended from time to time.

                  (b) Notwithstanding the provisions of this Agreement, if prior
to the payment in full to the Liquidity Providers of all Liquidity Obligations
then due and payable, any party hereto shall have received any payment or
distribution in respect of Equipment Notes or any other amount under the
Indentures or other Operative Agreements which, had the subordination provisions
of this Agreement been properly applied to such payment, distribution or other
amount, would not have been distributed to such Person, then such payment,
distribution or other amount shall be received and held in trust by such Person
and paid over or delivered to the Subordination Agent for application as
provided herein.

                  (c) If any Trustee, any Liquidity Provider or the
Subordination Agent receives any payment in respect of any obligations owing
hereunder (or, in the case of the Liquidity Providers, in respect of the
Liquidity Obligations), which is subsequently invalidated, declared
preferential, set aside and/or required to be repaid to a trustee, receiver or
other party, then, to the extent of such payment, such obligations (or, in the
case of the Liquidity Providers, such Liquidity Obligations) intended to be
satisfied shall be revived and continue in full force and effect as if such
payment had not been received.

                  (d) The Trustees (on behalf of themselves and the holders of
Certificates), the Liquidity Providers and the Subordination Agent confirm that
the payment priorities specified in Sections 2.4, 3.2 and 3.3 shall apply in all
circumstances, notwithstanding the fact that the obligations owed to the
Trustees and the holders of Certificates are secured by certain assets and the
Liquidity Obligations may not be so secured. The Trustees expressly agree (on
behalf of themselves and the holders of Certificates) not to assert priority
over the holders of Liquidity

                                       54
<PAGE>   58

Obligations due to their status as secured creditors in any bankruptcy,
insolvency or other legal proceeding.

                  (e) Each of the Trustees (on behalf of themselves and the
holders of Certificates), the Liquidity Providers and the Subordination Agent
may take any of the following actions without impairing its rights under this
Agreement:

                  (i) obtain a Lien on any property to secure any amounts owing
         to it hereunder, including, in the case of the Liquidity Providers, the
         Liquidity Obligations,

                  (ii) obtain the primary or secondary obligation of any other
         obligor with respect to any amounts owing to it hereunder, including,
         in the case of the Liquidity Providers, any of the Liquidity
         Obligations,

                  (iii) renew, extend, increase, alter or exchange any amounts
         owing to it hereunder, including, in the case of the Liquidity
         Providers, any of the Liquidity Obligations, or release or compromise
         any obligation of any obligor with respect thereto,

                  (iv) refrain from exercising any right or remedy, or delay in
         exercising such right or remedy, which it may have, or

                  (v) take any other action which might discharge a subordinated
         party or a surety under applicable law;

provided, however, that the taking of any such actions by any of the Trustees,
the Liquidity Providers or the Subordination Agent shall not prejudice the
rights or adversely affect the obligations of any other party under this
Agreement.

                  SECTION 10.10. Governing Law. THIS AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE
OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.

                  SECTION 10.11. Submission to Jurisdiction; Waiver of Jury
Trial; Waiver of Immunity. (a) Each of the parties hereto hereby irrevocably and
unconditionally:

                  (i) submits for itself and its property in any legal action or
         proceeding relating to this Agreement or any other Operative Agreement,
         or for recognition and enforcement of any judgment in respect hereof or
         thereof, to the nonexclusive general jurisdiction of the courts of the
         State of New York, the courts of the United States of America for the
         Southern District of New York, and the appellate courts from any
         thereof;

                  (ii) consents that any such action or proceeding may be
         brought in such courts, and waives any objection that it may now or
         hereafter have to the venue of any such

                                       55
<PAGE>   59

         action or proceeding in any such court or that such action or
         proceeding was brought in an inconvenient court and agrees not to plead
         or claim the same;

                  (iii) agrees that service of process in any such action or
         proceeding may be effected by mailing a copy thereof by registered or
         certified mail (or any substantially similar form and mail), postage
         prepaid, to each party hereto at its address set forth in Section 10.3
         hereof, or at such other address of which the other parties shall have
         been notified pursuant thereto; and

                  (iv) agrees that nothing herein shall affect the right to
         effect service of process in any other manner permitted by law or shall
         limit the right to sue in any other jurisdiction.

                  (b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING ESTABLISHED,
including, without limitation, contract claims, tort claims, breach of duty
claims and all other common law and statutory claims. Each of the parties
warrants and represents that it has reviewed this waiver with its legal counsel,
and that it knowingly and voluntarily waives its jury trial rights following
consultation with such legal counsel. THIS WAIVER IS IRREVOCABLE, AND CANNOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

                  (c) Each Liquidity Provider hereby waives any immunity it may
have from the jurisdiction of the courts of the United States of America or of
any State and waives any immunity any of its properties located in the United
States of America may have from attachment or execution upon a judgment entered
by any such court under the United States Foreign Sovereign Immunities Act of
1976 or any similar successor legislation.

                                       56
<PAGE>   60

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers thereunto duly
authorized, as of the day and year first above written, and acknowledge that
this Agreement has been made and delivered in the City of New York, and this
Agreement has become effective only upon such execution and delivery.

                              WILMINGTON TRUST COMPANY,
                                   not in its individual capacity but solely as
                                   Trustee for each of the Trusts

                              By

                                   Name:
                                   Title:

                              WESTDEUTSCHE LANDESBANK GIROZENTRALE,
                                   New York Branch,
                                   as Class A Liquidity Provider

                              By

                                   Name:
                                   Title:

                              By

                                   Name:
                                   Title:

                              MORGAN STANLEY CAPITAL SERVICES, INC.
                                   as Class B Liquidity Provider
                                   and Class C Liquidity Provider

                              By

                                   Name:
                                   Title:

                              WILMINGTON TRUST COMPANY,
                                   not in its individual
                                   capacity except as
                                   expressly set forth
                                   herein, but solely as
                                   Subordination Agent
                                   and Trustee

                              By

                                   Name:
                                   Title:

                                       57<PAGE>   1
                                                                    EXHIBIT 4.19

                             NOTE PURCHASE AGREEMENT

                          Dated as of January 28, 2000

                                      Among

                                ATLAS AIR, INC.,

                            WILMINGTON TRUST COMPANY,
                    as Pass Through Trustee under each of the
                          Pass Through Trust Agreement

                            WILMINGTON TRUST COMPANY,
                             as Subordination Agent

                   FIRST SECURITY BANK, NATIONAL ASSOCIATION,
                                 as Escrow Agent

                                       and

                            WILMINGTON TRUST COMPANY,
                                 as Paying Agent

<PAGE>   2

                        INDEX TO NOTE PURCHASE AGREEMENT

<TABLE>
<CAPTION>
                                                                             Page
                                                                             ----
<S>         <C>                                                              <C>
SECTION 1.  Financing of Aircraft                                               3
SECTION 2.  Conditions Precedent                                                6
SECTION 3.  Representations and Warranties                                      7
SECTION 4.  Covenants                                                          10
SECTION 5.  Notices                                                            11
SECTION 6.  Expenses                                                           11
SECTION 7.  Further Assurances                                                 12
SECTION 8.  Miscellaneous                                                      12
SECTION 9.  Governing Law                                                      13

                                    Schedules

Schedule I   Aircraft and Scheduled Delivery Months
Schedule II  Pass Through Trust Agreements
Schedule III Deposit Agreements
Schedule IV  Escrow and Paying Agent Agreements
Schedule V   Mandatory Document Terms
Schedule VI  Mandatory Economic Terms
Schedule VII Aggregate Amortization Schedule

                                      Annex

Annex A  Definitions

                                    Exhibits

Exhibit A-1 Form of Leased Aircraft Participation Agreement
Exhibit A-2 Form of Lease
Exhibit A-3 Form of Leased Aircraft Indenture
Exhibit A-4 Form of Aircraft Purchase Agreement Assignment
Exhibit A-5 Form of Leased Aircraft Trust Agreement
Exhibit B   Form of Delivery Notice
Exhibit C-1 Form of Owned Aircraft Participation Agreement
Exhibit C-2 Form of Owned Aircraft Indenture
</TABLE>

<PAGE>   3

                             NOTE PURCHASE AGREEMENT

                  This NOTE PURCHASE AGREEMENT, dated as of January 28, 2000,
among (i) ATLAS AIR, INC., a Delaware corporation (the "Company"), (ii)
WILMINGTON TRUST COMPANY ("WTC"), 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 each of the four separate Pass Through Trust
Agreements, (iii) WILMINGTON TRUST COMPANY, a Delaware banking corporation, as
subordination agent and trustee (in such capacity together with its successors
in such capacity, the "Subordination Agent") under the Intercreditor Agreement
(as defined below), (iv) 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") under each of the Escrow
Agreements (as defined below), and (v) WILMINGTON TRUST COMPANY, a Delaware
banking corporation, as Paying Agent (in such capacity together with its
successors in such capacity, the "Paying Agent") under each of the Escrow
Agreements.

                              W I T N E S S E T H:

                  WHEREAS, capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in Annex A hereto;

                  WHEREAS, the Company has obtained commitments from the
Manufacturer pursuant to the Purchase Agreement for the delivery of the two
aircraft listed in Schedule I hereto (together with any aircraft substituted
therefor in accordance with the Purchase Agreement and this Agreement prior to
the delivery thereof, the "Aircraft");

                  WHEREAS, pursuant to the Pass Through Trust Agreements set
forth in Schedule II hereto, and concurrently with the execution and delivery of
this Agreement, separate grantor trusts (collectively, the "Pass Through Trusts"
and, individually, a "Pass Through Trust") have been created to facilitate
certain of the transactions contemplated hereby, including, without limitation,
the issuance and sale of pass through certificates pursuant thereto
(collectively, the "Certificates") to provide for all or a portion of the
financing of the Aircraft;

                  WHEREAS, the Company has entered into the Placement Agreement
dated January 20, 2000 (the "Placement Agreement") with the several placement
agents (the "Placement Agents") named therein, which provides that the Company
will cause each Pass Through Trustee to issue and sell the Certificates to the
Placement Agents;

                  WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) the Escrow Agents and the Depositary entered into the Deposit
Agreements set forth in Schedule III hereto (the "Deposit Agreements") whereby
the applicable Escrow Agent agreed to direct the Placement Agents to make the
deposit referred to therein on the Issuance Date (each a "Deposit") and to
permit the applicable Pass Through Trustee to re-deposit amounts from time to
time thereafter, (ii) the Company and the Depositary entered into the Indemnity
Agreement, dated as

<PAGE>   4

of the date hereof (the "Indemnity Agreement") and (iii) the Pass Through
Trustees, the Placement Agents, the Paying Agents and the Escrow Agents entered
into the Escrow and Paying Agent Agreements set forth in Schedule IV hereto (the
"Escrow Agreements") whereby, among other things, (a) the Placement Agents
agreed to deliver an amount equal to the amount of the Deposits to the
Depositary on behalf of each applicable Escrow Agent and (b) each Escrow Agent,
upon the Depositary receiving such amount, has agreed to deliver escrow receipts
to be affixed to each Certificate;

                  WHEREAS, prior to the delivery of each Aircraft, the Company
will determine whether to enter into a leveraged lease transaction as lessee
with respect to such Aircraft (a "Leased Aircraft") or to purchase as owner such
Aircraft (an "Owned Aircraft"), and will give to the Pass Through Trustee a
Delivery Notice (as defined below) specifying its election;

                  WHEREAS, upon receipt of a Delivery Notice with respect to an
Aircraft, subject to the terms and conditions of this Agreement, the applicable
Pass Through Trustees will enter into the applicable Financing Agreements
relating to such Aircraft;

                  WHEREAS, upon the delivery of each Aircraft, each Pass Through
Trustee will fund its purchase of Equipment Notes with the proceeds of all or a
portion of the Deposit withdrawn by the applicable Escrow Agent under the
related Deposit Agreement bearing the same interest rate as the Certificates
issued by such Pass Through Trust; and

                  WHEREAS, concurrently with the execution and delivery of this
Agreement, (i) Westdeutsche Landesbank Girozentrale, a German banking
institution organized under the law of the State of North Rhine-Westphalia,
acting through its New York Branch, entered into a revolving credit agreement
for the benefit of the Certificateholders of the Class A Pass Through Trust and
Morgan Stanley Capital Services, Inc. entered into two revolving credit
agreements for the benefit of the Certificateholders of the Class B Pass Through
Trust and the Class C Pass Through Trust, in each case with the Subordination
Agent, as agent for the Pass Through Trustee on behalf of each such Pass Through
Trust (Westdeutsche Landesbank Girozentrale, New York Branch, and Morgan Stanley
Capital Services, Inc. are collectively referred to herein as the "Liquidity
Providers", and the revolving credit agreements as the "Liquidity Facilities")
and (ii) the Pass Through Trustee, the Liquidity Providers and the Subordination
Agent entered into the Intercreditor Agreement, dated as of the date hereof (the
"Intercreditor Agreement");

                  NOW, THEREFORE, in consideration of the foregoing premises and
the mutual agreements herein contained and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:

                  SECTION 1. Financing of Aircraft. (a) The Company confirms
that it has entered into the Purchase Agreement with the Manufacturer pursuant
to which the Company has agreed to purchase, and the Manufacturer has agreed to
deliver, the Aircraft, all on and subject to terms and conditions specified in
the Purchase Agreement. The currently scheduled delivery dates for the Aircraft
are set forth in Schedule 1. The Company agrees to finance the Aircraft in

                                       2
<PAGE>   5

the manner provided herein, all on and subject to the terms and conditions
hereof and of the relevant Financing Agreements.

                  (b) In furtherance of the foregoing, the Company agrees to
give the parties hereto, the Depositary and each of the Rating Agencies and DCR
not less than two Business Days' prior notice (a "Delivery Notice") of the
scheduled delivery date (the "Scheduled Delivery Date") (or, in the case of a
substitute Delivery Notice under Section 1(d) or (e) hereof, one Business Day's
prior notice) in respect of each Aircraft under the Purchase Agreement, which
notice shall:

                  (i) specify whether the Company has elected to treat such
         Aircraft as a Leased Aircraft or an Owned Aircraft;

                  (ii) specify the Scheduled Delivery Date of such Aircraft
         (which shall be a Business Day before the Cut-off Date and, except as
         provided in Section 1(e) hereof, the date (the "Funding Date") on which
         the financing therefor in the manner provided herein shall be
         consummated);

                  (iii) instruct the Pass Through Trustee to instruct the
         relevant Escrow Agent to provide a Notice of Purchase Withdrawal to the
         Depositary with respect to the Equipment Notes to be issued in
         connection with the financing of such Aircraft;

                  (iv) instruct the Pass Through Trustee to enter into the
         Participation Agreement included in the Financing Agreements with
         respect to such Aircraft in such form and at such a time on or before
         the Funding Date specified in such Delivery Notice and to perform its
         obligations thereunder;

                  (v) specify the aggregate principal amount of each series of
         Equipment Notes to be issued, and purchased by the Pass Through
         Trustee, in connection with the financing of such Aircraft scheduled to
         be delivered on such Funding Date (which shall in all respects comply
         with the Mandatory Economic Terms); and

                  (vi) if such Aircraft is to be a Leased Aircraft, certify that
         the related Owner Participant (A) is not an Affiliate of the Company
         (unless prior Rating Agency Confirmation permitting the use of an
         Affiliate has been obtained) and (B) based on the representations of
         such Owner Participant, is either (1) a Qualified Owner Participant or
         (2) any other person the obligations of which under the Owner
         Participant Agreements (as defined in the applicable Participation
         Agreement) are guaranteed by a Qualified Owner Participant.

                  (c) Upon receipt of a Delivery Notice, the Pass Through
Trustees shall, and shall cause the Subordination Agent to, enter into and
perform their obligations under the Participation Agreement specified in such
Delivery Notice, provided that, (i) the relevant Financing Agreements as
executed and delivered shall not vary the Mandatory Economic Terms and shall
contain the Mandatory Document Terms and (ii) subject to the next two succeeding
sentences, such Participation Agreement and the other Lease Financing Agreements
or Owner

                                       3
<PAGE>   6

Financing Agreements to be entered into pursuant to such Participation Agreement
shall be in the forms thereof annexed hereto in all material respects. The
Leased Aircraft Participation Agreements and other Lease Financing Agreements
may contain modifications, provided, however, that with respect to any material
modifications (other than modifications affecting only the Owner Participant), a
Rating Agency Confirmation shall have been obtained from each Rating Agency by
the Company and delivered by the Company to the applicable Pass Through Trustee
on or before the relevant Delivery Date. If Rating Agency Confirmation shall
have been received with respect to any Financing Agreements and such Financing
Agreements are utilized for subsequent Aircraft (or Substitute Aircraft) without
material modifications, no additional Rating Agency Confirmation shall be
required. Notwithstanding the foregoing, if any Financing Agreement annexed
hereto shall not have been reviewed by either Rating Agency prior to the
Issuance Date, then, prior to the use thereof in connection with the financing
of any Aircraft hereunder, the Company shall obtain from each Rating Agency a
confirmation that the use of such Financing Documents would not result in (x) a
reduction of the rating for any Class of Certificates below the then current
rating for such Class of Certificates or (y) a withdrawal or suspension of the
rating of any Class of Certificates. With respect to each Aircraft, the Company
shall cause Wilmington Trust Company (or such other person that meets the
eligibility requirements to act as loan trustee under the Leased Aircraft
Indenture or Owned Aircraft Indenture) to execute as Loan Trustee the Financing
Agreements relating to such Aircraft to which such Loan Trustee is intended to
be a party, and shall concurrently therewith execute such Financing Agreements
to which the Company is intended to be a party and perform its respective
obligations thereunder. Upon the request of either Rating Agency or of DCR, the
Company shall deliver or cause to be delivered to such requesting entity a true
and complete copy of each Financing Agreement relating to the financing of each
Aircraft together with a true and complete set of the closing documentation
(including legal opinions) delivered to the related Loan Trustee, Subordination
Agent and Pass Through Trustee under the related Participation Agreement.

                  (d) If after giving any Delivery Notice, there shall be a
delay in the delivery of an Aircraft, or if on the Scheduled Delivery Date of an
Aircraft the financing thereof in the manner contemplated hereby shall not be
consummated for whatever reason, the Company shall give the parties hereto
prompt notice thereof. Concurrently with the giving of such notice of
postponement or subsequently, the Company shall give the parties hereto a
substitute Delivery Notice specifying the date to which such delivery and
related financing shall have been re-scheduled (which shall be a Business Day
before the Cut-off Date on which the Escrow Agents shall be entitled to withdraw
all or a portion of the Deposit under each of the applicable Deposit Agreements
to enable each applicable Pass Through Trustee to fund its purchase of the
related Equipment Notes). Upon receipt of any such notice of postponement, each
applicable Pass Through Trustee shall comply with its obligations under Section
5.01 of each of the Trust Supplements and thereafter the financing of the
relevant Aircraft shall take place on the re-scheduled Delivery Date therefor
(all on and subject to the terms and conditions of the relevant Financing
Agreements) unless further postponed as provided herein.

                  (e) Anything in this Section 1 to the contrary
notwithstanding, the Company shall have the right at any time on or before the
Scheduled Delivery Date of any Aircraft, and subsequent to its giving a Delivery
Notice therefor, to postpone the Scheduled Delivery Date of

                                       4
<PAGE>   7

such Aircraft so as to enable the Company to change its election to treat such
Aircraft as a Leased Aircraft or an Owned Aircraft by written notice of such
postponement to the other parties hereto. The Company shall subsequently give
the parties hereto a substitute Delivery Notice complying with the provisions of
Section 1(b) hereof and specifying the new Funding Date for such postponed
Aircraft (which shall be a Business Day occurring before the Cut-off Date and on
which the Escrow Agents shall be entitled to withdraw the Deposit under each of
the applicable Deposit Agreements sufficient to enable each applicable Pass
Through Trustee to fund its purchase of the related Equipment Notes). In
addition, the Company shall have the further right, anything in this Section 1
to the contrary notwithstanding, to accept delivery of an Aircraft under the
Purchase Agreement on the Delivery Date thereof by utilization of bridge
financing of such Aircraft and promptly thereafter give the parties hereto a
Delivery Notice specifying a Funding Date not later than 60 days after the
Delivery Date of such Aircraft and no later than the Cut-off Date and otherwise
complying with the provisions of Section 1(b) hereof. All other terms and
conditions of this Note Purchase Agreement shall apply to the financing of any
such Aircraft on the re-scheduled Funding Date therefor except (i) the
re-scheduled Funding Date shall be deemed the Delivery Date of such Aircraft for
all purposes of this Section 1 and (ii) the related Financing Agreements shall
be amended to reflect the original delivery of such Aircraft to the Company.

                  (f) If the Scheduled Delivery Date for any Aircraft is delayed
(a) more than 30 days beyond the last day of the month set forth opposite such
Aircraft under the heading "Scheduled Delivery Months" in Schedule I hereto or
(b) beyond the Delivery Period Termination Date, the Company may identify for
delivery a substitute aircraft therefor meeting the following conditions (a
"Substitute Aircraft"): (i) a Substitute Aircraft must be a Boeing 747-400F
aircraft manufactured after 1993, so long as after giving effect thereto such
substitution does not vary the Mandatory Economic Terms, and (ii) the Company
shall be obligated to obtain Rating Agency Confirmation in respect of the
replacement of any Aircraft by Substitute Aircraft. Upon the satisfaction of the
conditions set forth above with respect to a Substitute Aircraft, the Aircraft
to be replaced shall cease to be subject to this Agreement and all rights and
obligations of the parties hereto concerning such Aircraft shall cease, and such
Substitute Aircraft shall become and thereafter be subject to the terms and
conditions of this Agreement to the same extent as such Aircraft.

                  (g) The Company shall have no liability for the failure of any
Pass Through Trustee to purchase Equipment Notes with respect to any Aircraft or
Substitute Aircraft, other than the Company's obligation, if any, to pay the
Deposit Make-Whole Premium pursuant to Section 4(a)(i) of this Agreement.

                  (h) The parties agree that if, in connection with the delivery
of an Aircraft or Substitute Aircraft, any Owner Participant who is to be a
party to any Lease Financing Agreement shall not be a "Citizen of the United
States" within the meaning of Section 40102(a)(15) of the Act, then the
applicable Lease Financing Agreements shall be modified, consistent with the
Mandatory Document Terms, to require such Owner Participant to enter into a
voting trust, voting powers, control rights or similar arrangement satisfactory
to the Company that (A) enables such Aircraft or Substitute Aircraft to be
registered in the United States and (B) complies with the FAA regulations issued
under the Act applicable thereto.

                                       5
<PAGE>   8

                  (i) Anything herein to the contrary notwithstanding, the
Company shall not have the right, and shall not be entitled, at any time to
request the issuance of Equipment Notes of any series to any Pass Through
Trustee in an aggregate principal amount in excess of the amount of the Deposit
then available for withdrawal in respect of such Equipment Notes by the Escrow
Agent under and in accordance with the provisions of the related Deposit
Agreement.

                  SECTION 2. Conditions Precedent. The obligation of the Pass
Through Trustees to enter into, and to cause the Subordination Agent to enter
into, any Participation Agreement as directed pursuant to a Delivery Notice and
to perform its obligations under such Participation Agreement is subject to
satisfaction of the following conditions:

                  (a) no Triggering Event shall have occurred; and

                  (b) the Company shall have delivered to each such Pass Through
         Trustee and each Liquidity Provider a certificate stating that (i) such
         Participation Agreement and the other Financing Agreements to be
         entered into pursuant to such Participation Agreement do not vary the
         Mandatory Economic Terms and contain the Mandatory Document Terms and
         (ii) any substantive modification of such Financing Agreements from the
         forms thereof attached to this Agreement do not materially and
         adversely affect the Certificateholders, and such certification shall
         be true and correct.

                  Anything herein to the contrary notwithstanding, the
         obligation of each Pass Through Trustee to purchase Equipment Notes
         shall terminate on the Cut-off Date.

                  SECTION 3. Representations and Warranties. (a) The Company
represents and warrants that:

                  (i) the Company is duly incorporated, validly existing and in
         good standing under the laws of the State of Delaware and is a "citizen
         of the United States" as defined in 49 U.S.C. Section 40102 and a U.S.
         Air Carrier, and has the full corporate power, authority and legal
         right under the laws of the State of Delaware to execute and deliver
         this Agreement and each Financing Agreement to which it will be a party
         and to carry out the obligations of the Company under this Agreement
         and each Financing Agreement to which it will be a party;

                  (ii) the execution and delivery by the Company of this
         Agreement and the performance by the Company of its obligations under
         this Agreement have been duly authorized by the Company and will not
         violate its Certificate of Incorporation or by-laws or the provisions
         of any indenture, mortgage, contract or other agreement to which it is
         a party or by which it is bound; and

                  (iii) this Agreement constitutes the legal, valid and binding
         obligation of the Company, enforceable against it in accordance with
         its terms, except as the same may be limited by applicable bankruptcy,
         insolvency, reorganization, moratorium or similar laws

                                       6
<PAGE>   9

         affecting the rights of creditors generally and by general principles
         of equity, whether considered in a proceeding at law or in equity.

                  (b) WTC represents and warrants that:

                  (i) WTC is duly incorporated, validly existing and in good
         standing under the laws of the State of Delaware and is a "citizen of
         the United States" as defined in 49 U.S.C. Section 40102, and has the
         full corporate power, authority and legal right under the laws of the
         State of Delaware and the United States pertaining to its banking,
         trust and fiduciary powers to execute and deliver this Agreement and
         each Financing Agreement to which it will be a party and to carry out
         the obligations of WTC, in its capacity as Subordination Agent, Pass
         Through Trustee or Paying Agent, as the case may be, under this
         Agreement and each Financing Agreement to which it will be a party;

                  (ii) the execution and delivery by WTC, in its capacity as
         Subordination Agent, Pass Through Trustee or Paying Agent, as the case
         may be, of this Agreement and the performance by WTC, in its capacity
         as Subordination Agent, Pass Through Trustee or Paying Agent, as the
         case may be, of its obligations under this Agreement have been duly
         authorized by WTC, in its capacity as Subordination Agent, Pass Through
         Trustee or Paying Agent, as the case may be, and will not violate its
         articles of association or by-laws or the provisions of any indenture,
         mortgage, contract or other agreement to which it is a party or by
         which it is bound; and

                  (iii) this Agreement constitutes the legal, valid and binding
         obligations of WTC, in its capacity as Subordination Agent, Pass
         Through Trustee or Paying Agent, as the case may be, enforceable
         against it in accordance with its terms, except as the same may be
         limited by applicable bankruptcy, insolvency, reorganization,
         moratorium or similar laws affecting the rights of creditors generally
         and by general principles of equity, whether considered in a proceeding
         at law or in equity.

                  (c) The Pass Through Trustee hereby confirms to each of the
other parties hereto that its representations and warranties set forth in
Section 7.15 of the Basic Pass Through Trust Agreement and Section 5.04 of each
Trust Supplement are true and correct as of the date hereof.

                  (d) The Subordination Agent represents and warrants that:

                  (i) the Subordination Agent is duly incorporated, validly
         existing and in good standing under the laws of the State of Delaware,
         and has the full corporate power, authority and legal right under the
         laws of the State of Delaware and the United States pertaining to its
         banking, trust and fiduciary powers to execute and deliver this
         Agreement and each Financing Agreement to which it is or will be a
         party and to perform its obligations under this Agreement and each
         Financing Agreement to which it is or will be a party;

                                       7
<PAGE>   10

                  (ii) this Agreement has been duly authorized, executed and
         delivered by the Subordination Agent; this Agreement constitutes the
         legal, valid and binding obligations of the Subordination Agent
         enforceable against it in accordance with its terms, except as the same
         may be limited by applicable bankruptcy, insolvency, reorganization,
         moratorium or similar laws affecting the rights of creditors generally
         and by general principles of equity, whether considered in a proceeding
         at law or in equity;

                  (iii) none of the execution, delivery and performance by the
         Subordination Agent of this Agreement contravenes any law, rule or
         regulation of the State of Delaware or any United States governmental
         authority or agency regulating the Subordination Agent's banking, trust
         or fiduciary powers or any judgment or order applicable to or binding
         on the Subordination Agent and do not contravene the Subordination
         Agent's articles of association or by-laws or result in any breach of,
         or constitute a default under, any agreement or instrument to which the
         Subordination Agent is a party or by which it or any of its properties
         may be bound;

                  (iv) neither the execution and delivery by the Subordination
         Agent of this Agreement nor the consummation by the Subordination Agent
         of any of the transactions contemplated hereby requires the consent or
         approval of, the giving of notice to, the registration with, or the
         taking of any other action with respect to, any Delaware governmental
         authority or agency or any federal governmental authority or agency
         regulating the Subordination Agent's banking, trust or fiduciary
         powers;

                  (v) there are no Taxes payable by the Subordination Agent
         imposed by the State of Delaware or any political subdivision or taxing
         authority thereof in connection with the execution, delivery and
         performance by the Subordination Agent of this Agreement (other than
         franchise or other taxes based on or measured by any fees or
         compensation received by the Subordination Agent for services rendered
         in connection with the transactions contemplated by the Intercreditor
         Agreement or any of the Liquidity Facilities), and there are no Taxes
         payable by the Subordination Agent imposed by the State of Delaware or
         any political subdivision thereof in connection with the acquisition,
         possession or ownership by the Subordination Agent of any of the
         Equipment Notes (other than franchise or other taxes based on or
         measured by any fees or compensation received by the Subordination
         Agent for services rendered in connection with the transactions
         contemplated by the Intercreditor Agreement or any of the Liquidity
         Facilities); and

                  (vi) there are no pending or threatened actions or proceedings
         against the Subordination Agent before any court or administrative
         agency which individually or in the aggregate, if determined adversely
         to it, would materially adversely affect the ability of the
         Subordination Agent to perform its obligations under this Agreement.

                                       8
<PAGE>   11

                  (e) The Escrow Agent represents and warrants that:

                  (i) the Escrow Agent is a national banking association duly
         organized, validly existing and in good standing under the laws of the
         United States and has the full corporate power, authority and legal
         right under the laws of the United States pertaining to its banking,
         trust and fiduciary powers to execute and deliver this Agreement, each
         Deposit Agreement and each Escrow Agreement and to carry out the
         obligations of the Paying Agent under each of the Escrow Agreements;

                  (ii) the execution and delivery by the Escrow Agent of each of
         the Escrow Agreements and the performance by the Escrow Agent of its
         obligations hereunder and thereunder have been duly authorized by the
         Escrow Agent and will not violate its articles of association or
         by-laws or the provisions of any indenture, mortgage, contract or other
         agreement to which it is a party or by which it is bound; and

                  (iii) each of the Escrow Agreements constitutes the legal,
         valid and binding obligations of the Escrow Agent enforceable against
         it in accordance with its terms, except as the same may be limited by
         applicable bankruptcy, insolvency, reorganization, moratorium or
         similar laws affecting the rights of creditors generally and by general
         principles of equity, whether considered in a proceeding at law or in
         equity.

                  (f) The Paying Agent represents and warrants that:

                  (i) the Paying Agent is duly incorporated, validly existing
         and in good standing under the laws of the State of Delaware and has
         the full corporate power, authority and legal right under the laws of
         the United States pertaining to its banking, trust and fiduciary powers
         to execute and deliver this Agreement and each Escrow Agreement and to
         carry out the obligations of the Paying Agent under each of the Escrow
         Agreements;

                  (ii) the execution and delivery by the Paying Agent of each of
         the Escrow Agreements and the performance by the Paying Agent of its
         obligations hereunder and thereunder have been duly authorized by the
         Paying Agent and will not violate its articles of association or
         by-laws or the provisions of any indenture, mortgage, contract or other
         agreement to which it is a party or by which it is bound; and

                  (iii) each of the Escrow Agreements constitutes the legal,
         valid and binding obligations of the Paying Agent enforceable against
         it in accordance with its terms, except as the same may be limited by
         applicable bankruptcy, insolvency, reorganization, moratorium or
         similar laws affecting the rights of creditors generally and by general
         principles of equity, whether considered in a proceeding at law or in
         equity.

                  SECTION 4. Covenants. (a) The Company covenants with each of
the other parties hereto that:

                  (i) on the date that the Depositary is obligated to pay the
         amount of the Final Withdrawal to the Paying Agent pursuant to a
         Deposit Agreement relating to any Trust,

                                       9
<PAGE>   12

         the Company shall pay to the Pass Through Trustee of such Trust no
         later than 12:30 p.m. (New York time) an amount equal to the Deposit
         Make-Whole Premium, if any, required to be paid in respect of such
         Final Withdrawal amount;

                  (ii) subject to Section 4(a)(iv) of this Agreement, the
         Company shall at all times maintain its corporate existence and shall
         not wind up, liquidate or dissolve or take any action, or fail to take
         any action, that would have the effect of any of the foregoing;

                  (iii) the Company shall at all times remain a U.S. Air Carrier
         (as defined in the Financing Agreements) and shall at all times be
         otherwise certificated and registered to the extent necessary to
         entitle (i) in the case of Leased Aircraft, the Owner Trustee (and the
         Loan Trustee as assignee of the Owner Trustee's rights under each
         Lease) to the rights afforded to lessors of aircraft equipment under
         Section 1110 and (ii) in the case of Owned Aircraft, the Loan Trustee
         to the rights afforded to secured parties of aircraft equipment under
         Section 1110;

                  (iv) Section 13.2.1 of the form of each Lease is hereby
         incorporated by reference herein;

                  (v) the Company agrees to provide written notice to each of
         the parties hereto of the occurrence of the Cut-off Date no later than
         one Business Day after the date thereof; and

                  (vi) the Company shall not issue Series D Equipment Notes
         pursuant to any Owned Aircraft Indenture unless it shall have obtained
         written confirmation from each Rating Agency that the issuance of such
         Series D Equipment Notes will not result in (i) a reduction of the
         rating for any Class of Certificates below the then current rating for
         such Class of Certificates or (ii) a withdrawal or suspension of the
         rating of any Class of Certificates.

                  (b) WTC, in its individual capacity, covenants with each of
the other parties to this Agreement that it will, immediately upon obtaining
knowledge of any facts that would cast doubt upon its continuing status as a
"citizen of the United States" as defined in 49 U.S.C. Section 40102 and
promptly upon public disclosure of negotiations in respect of any transaction
which would or might adversely affect such status, notify in writing all parties
hereto of all relevant matters in connection therewith. Upon WTC giving any such
notice, WTC shall, subject to Section 8.02 of any Indenture then entered into,
resign as Loan Trustee in respect of such Indenture.

                  SECTION 5. Notices. Unless otherwise specifically provided
herein, all notices required or permitted by the terms of this Agreement shall
be in English and in writing, and any such notice shall become effective upon
being delivered personally or, if promptly confirmed by mail, when dispatched by
facsimile or other written telecommunication, addressed to such party hereto at
its address or facsimile number set forth below the signature of such party at
the foot of this Agreement.

                                       10
<PAGE>   13

                  SECTION 6. Expenses. (a) The Company agrees to pay to the
Subordination Agent when due an amount or amounts equal to the fees payable to
the relevant Liquidity Provider under Section 2.03 of each Liquidity Facility
and the related Fee Letter (as defined in the Intercreditor Agreement)
multiplied by a fraction the numerator of which shall be the then outstanding
aggregate amount of the Deposits under the Deposit Agreements and the
denominator of which shall be the sum of (x) the then outstanding aggregate
principal amount of the Series A Equipment Notes, Series B Equipment Notes and
Series C Equipment Notes issued under all of the Indentures and (y) the then
outstanding aggregate amount of the Deposits under the Deposit Agreements.

                  (b) So long as no Equipment Notes have been issued in respect
of any Aircraft, the Company agrees to pay (i) to the Subordination Agent when
due (A) the amount equal to interest on any Downgrade Advance payable under
Section 3.07 of each Liquidity Facility minus Investment Earnings while such
Downgrade Advance shall be outstanding, (B) the amount equal to interest on any
Non-Extension Advance payable under Section 3.07 of each Liquidity Facility
minus Investment Earnings while such Non-Extension Advance shall be outstanding
and (C) any other amounts owed to the Liquidity Provider by the Subordination
Agent as borrower under each Liquidity Facility (other than amounts due as
repayment of advances thereunder or as interest on such advances, except to the
extent payable pursuant to clause (A) or (B)), (ii) all compensation and
reimbursement of expenses, disbursements and advances payable by the Company
under the Pass Through Trust Agreements, (iii) all compensation and
reimbursement of expenses and disbursements payable to the Subordination Agent
under the Intercreditor Agreement except with respect to any income or franchise
taxes incurred by the Subordination Agent in connection with the transactions
contemplated by the Intercreditor Agreement and (iv) in the event the Company
requests any amendment to any Operative Agreement, all reasonable fees and
expenses (including, without limitation, fees and disbursements of counsel) of
the Escrow Agent and/or the Paying Agent in connection therewith. For purposes
of this Section 6(b), the terms "Applied Downgrade Advance", "Downgrade
Advance", "Investment Earnings", "Non-Extension Advance" and "Applied
Non-Extension Advance" shall have the meanings specified in each Liquidity
Facility.

                  SECTION 7. Further Assurances. Each party hereto shall duly
execute, acknowledge and deliver, or shall cause to be executed, acknowledged
and delivered, all such further agreements, instruments, certificates or
documents, and shall do and cause to be done such further acts and things, in
any case, as any other party hereto shall reasonably request in connection with
its administration of, or to carry out more effectually the purposes of, or to
better assure and confirm unto it the rights and benefits to be provided under,
this Agreement.

                  SECTION 8. Miscellaneous. (a) Provided that the transactions
contemplated hereby have been consummated, and except as otherwise provided for
herein, the representations, warranties and agreements herein of the Company,
the Subordination Agent, the Escrow Agent, the Paying Agent and the Pass Through
Trustee, and the Company's, the Subordination Agent's, the Escrow Agent's, the
Paying Agent's and the Pass Through Trustee's obligations under any and all
thereof, shall survive the expiration or other termination of this Agreement and
the other agreements referred to herein.

                                       11
<PAGE>   14

                  (b) This Agreement may be executed in any number of
counterparts (and each of the parties hereto shall not be required to execute
the same counterpart). Each counterpart of this Agreement, including a signature
page executed by each of the parties hereto, shall be an original counterpart of
this Agreement, but all of such counterparts together shall constitute one
instrument. Neither this Agreement nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified orally, but only by an
instrument in writing signed by the party against which the enforcement of the
termination, amendment, supplement, waiver or modification is sought. The index
preceding this Agreement and the headings of the various Sections of this
Agreement are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions hereof. The terms of this
Agreement shall be binding upon, and shall inure to the benefit of, the Company
and its successors and permitted assigns, the Pass Through Trustee and its
successors as Pass Through Trustee (and any additional trustee appointed) under
any of the Pass Through Trust Agreements, the Escrow Agent and its successors as
Escrow Agent under the Escrow Agreements, the Paying Agent and its successors as
Paying Agent under the Escrow Agreements and the Subordination Agent and its
successors as Subordination Agent under the Intercreditor Agreement.

                  (c) This Agreement is not intended to, and shall not, provide
any person not a party hereto (other than the Placement Agents and each of the
beneficiaries of Section 6 hereof) with any rights of any nature whatsoever
against any of the parties hereto, and no person not a party hereto (other than
the Placement Agents and each of the beneficiaries of Section 6 hereof) shall
have any right, power or privilege in respect of, or have any benefit or
interest arising out of, this Agreement.

                  SECTION 9. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. THIS
AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK.

                            [SIGNATURE PAGES FOLLOW]

                                       12
<PAGE>   15

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.

                                  ATLAS AIR, INC.

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

                                  Address: 538 Commons Drive
                                           Golden, Colorado  80401
                                           Attention: Chief Financial Officer
                                           Facsimile: (303) 526-5051

                                  WILMINGTON TRUST COMPANY,
                                    not in its individual capacity, except as
                                    otherwise expressly provided herein, but
                                    solely as Pass Through Trustee, Loan
                                    Trustee, Subordination Agent and Paying
                                    Agent, as applicable

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

                                  Address: One Rodney Square
                                           1100 North Market Street
                                           Wilmington, Delaware
                                           19890-0001
                                           Attention: Corporate Trust Admin.

                                  FIRST SECURITY BANK, NATIONAL ASSOCIATION,
                                     as Escrow Agent

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

                                  Address: 79 South Main Street
                                           Salt Lake City, Utah 84111
                                           Attention: Corporate Trust Department

                                       13
<PAGE>   16

                                  SCHEDULE I to
                             Note Purchase Agreement

                     AIRCRAFT AND SCHEDULED DELIVERY MONTHS

<TABLE>
<CAPTION>
                                    Scheduled                  Expected
                                     Delivery                Registration               Manufacturer's
Aircraft Type                          Month                    Number                  Serial Number
-------------                          -----                    ------                  -------------
<S>                                 <C>                      <C>                        <C>
Boeing 747-400F                     July 2000                   N409MC                      30558
Boeing 747-400F                     August 2000                 N412MC                      30559
</TABLE>

<PAGE>   17

                                 SCHEDULE II to
                             Note Purchase Agreement

                                TRUST SUPPLEMENTS

Trust Supplement dated as of the Issuance Date between the Company and the Pass
Through Trustee in respect of Atlas Air Pass Through Trust, Series 2000-1A.

Trust Supplement dated as of the Issuance Date between the Company and the Pass
Through Trustee in respect of Atlas Air Pass Through Trust, Series 2000-1B.

Trust Supplement dated as of the Issuance Date between the Company and the Pass
Through Trustee in respect of Atlas Air Pass Through Trust, Series 2000-1C.

<PAGE>   18

                                 SCHEDULE III to
                             Note Purchase Agreement

                               DEPOSIT AGREEMENTS

Deposit Agreement (Class A) dated as of the Issuance Date between the Depositary
and the Escrow Agent.

Deposit Agreement (Class B) dated as of the Issuance Date between the Depositary
and the Escrow Agent.

Deposit Agreement (Class C) dated as of the Issuance Date between the Depositary
and the Escrow Agent.

<PAGE>   19

                                 SCHEDULE IV to
                             Note Purchase Agreement

                       ESCROW AND PAYING AGENT AGREEMENTS

Escrow and Paying Agent Agreement (Class A) dated as of the Issuance Date among
the Escrow Agent, the Placement Agents, the Pass Through Trustee and the Paying
Agent.

Escrow and Paying Agent Agreement (Class B) dated as of the Issuance Date among
the Escrow Agent, the Placement Agents, the Pass Through Trustee and the Paying
Agent.

Escrow and Paying Agent Agreement (Class C) dated as of the Issuance Date among
the Escrow Agent, the Placement Agents, the Pass Through Trustee and the Paying
Agent.

<PAGE>   20

                                  SCHEDULE V to
                             Note Purchase Agreement

             MANDATORY DOCUMENT TERMS FOR LEASE FINANCING AGREEMENTS

o    May not modify in any material adverse respect the Granting Clause of the
     Trust Indenture Form so as to deprive the Note Holders, the Loan
     Participants or the Indenture Indemnitees of a first priority security
     interest in and mortgage lien on the Aircraft and the Lease or to eliminate
     any of the obligations secured thereby or otherwise modify in any material
     adverse respect as regards the interests of the Note Holders, the
     Subordination Agent, the Liquidity Providers or the Mortgagee the
     provisions of Article II or III or Section 4.02, 4.03, 4.04, 5.02, 5.06,
     9.01(b), 10.04, 10.11 or 10.12 of the Trust Indenture Form.

o    May not modify in any material adverse respect as regards the interests of
     the Note Holders, the Subordination Agent, the Liquidity Providers or the
     Mortgagee the provisions of Section 3.2.1(e), 3.3(c), 4.7, the final
     sentence of 7.1.1, 10.3.1(d)(ii), 13.3, 16, 18.3 or 18.7(a) or Clause D of
     Annex D of the Lease Form or otherwise modify the terms of the Lease Form
     so as to deprive the Mortgagee of rights expressly granted to the
     "Mortgagee" therein.

o    May not modify in any material adverse respect as regards the interests of
     the Note Holders, the Subordination Agent, the Liquidity Providers or the
     Mortgagee the provisions of Section 5.1.9, 5.1.10, 5.1.11, 5.1.12, 7.5, 12,
     15.8(a) or 15.9 of the Participation Agreement Form or of the provisions of
     Section 5.1.2(xxiii) or 10.1.1(a)(iv) of the Participation Agreement Form
     so as to eliminate the requirement to deliver to the Loan Participant or
     the Mortgagee, as the case may be, the legal opinions to be provided to
     such Persons thereunder (recognizing that the lawyers rendering such
     opinions may be changed) or of the provisions of Section 7.6.11(a)(ii) of
     the Participation Agreement Form as regards the rights of the Mortgagee
     thereunder or otherwise modify the terms of the Participation Agreement
     Form to deprive the Trustees, the Subordination Agent, the Liquidity
     Providers or the Mortgagee of any indemnity or right of reimbursement in
     its favor for Expenses or Taxes.

o    May not modify, in any material adverse respect as regards the interests of
     the Note Holders, the Subordination Agent, the Liquidity Providers or the
     Mortgagee, the definition of "Make Whole Amount" in Annex A to the
     Participation Agreement Form.

 Notwithstanding the foregoing, any such Mandatory Document Term may be modified
  to correct or supplement any such provision which may be defective or to cure
  any ambiguity or correct any mistake, provided that any such action shall not
       materially adversely affect the interests of the Note Holders, the
       Subordination Agent, the Liquidity Providers, the Mortgagee or the
                              Certificateholders.

<PAGE>   21

                                 SCHEDULE VI to
                             Note Purchase Agreement

                            MANDATORY ECONOMIC TERMS

Equipment Notes

Obligor: Atlas Air, Inc. or an Owner Trust

Maximum Principal Amount:

     The aggregate principal amount of all Equipment Notes issued with respect
     to an Aircraft shall not exceed the maximum principal amount of Equipment
     Notes indicated for such Aircraft as set forth in the Offering Memorandum
     in "Summary--Equipment Notes and the Aircraft" under the column "Maximum
     Principal Amount of Equipment Notes".

Aggregate Maximum Principal Amount:

For all Boeing 747-400F Aircraft    $217,317,000

The aggregate original principal amount of all Equipment Notes for all Aircraft
shall not exceed the aggregate face amount of all Certificates issued on the
Issuance Date.

The aggregate original principal amount of all Equipment Notes of any series
shall not exceed the aggregate face amount of all Certificates of the related
Class issued on the Issuance Date.

Initial Loan to Aircraft Value with respect to an Aircraft (with the value of
any Aircraft equal to the value (the "Assumed Appraised Value") for such
Aircraft set forth in the Offering Memorandum in "Summary--Equipment Notes and
the Aircraft" under the column "Appraised Base Value"):

<PAGE>   22

Series A: not in excess of 39.0%
Series B: not in excess of 53.0%
Series C: not in excess of 68.0%

Loan to Aircraft Value for each series of Equipment Notes issued in respect of
each Aircraft (computed as of the date of issuance thereof on the basis of the
Assumed Appraised Value of such Aircraft and the Depreciation Assumption, as
defined in the Offering Memorandum) as of any Regular Distribution Date
(assuming no default in the payment of the Equipment Notes):

Series A: not in excess of 39.0%
Series B: not in excess of 53.0%
Series C: not in excess of 68.0%

Initial Average Life (in years) of each series of Equipment Notes for each
Boeing 747-400F Aircraft from the Issuance Date:

Series A: not less than 11.0 years or more than 13.5 years
Series B: not less than 6.5 years or more than 9.5 years
Series C: not less than 2.5 years or more than 4.25 years

Average Life (in years):

     As of the Delivery Period Termination Date, the average life of each Class
     of Certificates from the Issuance Date (computed without regard to the
     acceleration of any Equipment Notes and after giving effect to any special
     distribution on the Certificates thereafter required in respect of unused
     Deposits):

Class A: not less than 11.0 years or more than 13.5 years
Class B: not less than 7.5 years or more than 9.0 years
Class C: not less than 3.0 years or more than 4.0 years

Final Expected Regular Distribution Date:

Series A: January 2, 2020
Series B: January 2, 2016
Series C: January 2, 2010

Debt Rate (computed on the basis of a 360-day year consisting of twelve 30-day
months, payable semi-annually in arrears):

Series A: 8.707%
Series B: 9.057%
Series C: 9.702%

The interest rate applicable to each Series of Equipment Notes must be equal to
the rate applicable to the Certificates issued by the corresponding Pass Through
Trust.

<PAGE>   23

Past Due Rates: Debt Rate plus 2% per annum

Payment Dates:  January 2 and July 2

Make-Whole Amounts: As provided in Article II of the form of Trust Indenture
     marked as Exhibit A-3 of the Note Purchase Agreement (the "Trust Indenture
     Form") or the Owned Aircraft Indenture marked as Exhibit C-2 of the Note
     Purchase Agreement

Redemption and
Purchase: As provided in Article II of the Trust Indenture Form

Lease

Term: The Base Lease Term shall expire by its terms on or after final maturity
     date of the related Series A Equipment Notes

LeasePayment Dates: January 2 and July 2, provided that rent under a Lease may
     also be paid at the election of Atlas Air upon the commencement of such
     Lease and on any other date agreed between Atlas Air and the Owner
     Participant that occurs after the latest maturity date of the Equipment
     Notes issued in connection with the acquisition of the Aircraft to which
     such Lease relates

Minimum Rent: Basic Rent due and payable on each Lease Payment Date shall be at
     least sufficient to pay in full, as of such Lease Payment Date (assuming
     timely payment of the related Equipment Notes prior to such Date), the
     aggregate principal amount of scheduled installments due on the related
     Equipment Notes outstanding on such Lease Payment Date, together with
     accrued and unpaid interest thereon

Supplemental Rent: Sufficient to cover the sums described in clauses (a) through
     (d) of such term as defined in Annex A to the form of Lease (the "Lease
     Form") marked as Exhibit A-2 of the Note Purchase Agreement

Stipulated Loss
Value: At all times equal to or greater than the then outstanding principal
     amount of the related Equipment Notes together with accrued interest
     thereon

Termination Value: At all times equal to or greater than the then outstanding
     principal amount of the related Equipment Notes together with accrued
     interest thereon

All-risk Hull
Insurance: Not less than the Stipulated Loss Value or, in the case of an Owned
     Aircraft, not less than the unpaid principal amount of the related
     Equipment Notes, subject to Lessees right to self-insure on terms no more
     favorable to Lessee in any material respect than those set forth in
     Section G of Annex D to the Lease Form

<PAGE>   24

Minimum Liability
Insurance Amount: As set forth in Schedule 1 to the Lease Form

Past Due Rate: As set forth in Schedule 1 to the Lease Form

SLV Rate: As set forth in Schedule 1 to the Lease Form

Participation Agreement

     Mortgagee, Subordination Agent, Liquidity Providers, Guarantor, Pass
         Through Trustees, Escrow Agents and Note Holders shall be indemnified
         against Expenses and Taxes to the extent set forth in Section 9 of the
         form of the Participation Agreement marked as Exhibit A-1 to the Note
         Purchase Agreement (the "Participation Form"), Lease Form and Trust
         Indenture Form.

<PAGE>   25

                                 SCHEDULE VII to
                             Note Purchase Agreement

                         AGGREGATE AMORTIZATION SCHEDULE

<TABLE>
<CAPTION>
                     2000-1A Trust         2000-1B Trust         2000-1C Trust
                  Scheduled Principal   Scheduled Principal   Scheduled Principal
      Date              Payment               Payment               Payment
      ----              -------               -------               -------
<S>               <C>                   <C>                   <C>
January 2, 2001   $        10,384,326   $         8,948,200   $         9,587,400
January 2, 2002                     0                     0             5,787,514
January 2, 2003               832,183                     0             7,698,129
January 2, 2004             3,739,203                     0             5,637,012
January 2, 2005             3,739,203                     0             6,553,968
January 2, 2006             3,739,203               379,549             7,183,589
January 2, 2007             3,739,203             7,032,058                     0
January 2, 2008             3,739,203             4,993,949                     0
January 2, 2009             3,739,203               636,279             2,360,008
January 2, 2010             3,739,203                     0             3,129,380
January 2, 2011             3,739,203             3,550,493                     0
January 2, 2012             3,739,203             4,311,527                     0
January 2, 2013             3,739,203             4,480,179                     0
January 2, 2014             3,739,203             5,495,282                     0
January 2, 2015             3,739,203             4,813,484                     0
January 2, 2016             3,739,203               100,000                     0
January 2, 2017             3,739,203                     0                     0
January 2, 2018            21,177,982                     0                     0
July 2, 2018               20,473,746                     0                     0
January 2, 2019            19,321,921                     0                     0
January 2, 2020               100,000                     0                     0
</TABLE>

<PAGE>   26

                                   ANNEX A to
                            Note Purchase Agreement

                                   DEFINITIONS

         "Act" means 49 U.S.C. Section 40101-46507.

         "Adjusted Treasury Yield" means the Treasury Yield plus, in the case of
a distribution to holders of (i) Class A Certificates, 195 basis points, (ii)
Class B Certificates, 230 basis points and, (iii) Class C Certificates, 310
basis points.

         "Affiliate" means, with respect to any person, any other person
directly or indirectly controlling, controlled by or under common control with
such person. For purposes of this definition, "control" means the power,
directly or indirectly, to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting securities or
by contract or otherwise and "controlling," "controlled by" and "under common
control with" have correlative meanings.

         "Aircraft" has the meaning set forth in the second recital to the Note
Purchase Agreement.

         "Aircraft Purchase Agreement Assignment" means a Purchase Agreement and
Engine Warranties Assignment substantially in the form of Exhibit A-4 to the
Note Purchase Agreement.

         "Assumed Amortization Schedule" means Schedule VII to the Note Purchase
Agreement.

         "Average Life Date" means, for any Equipment Note, the date which
follows the time of determination by a period equal to the Remaining Weighted
Average Life of such Equipment Note.

         "Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
Section 102 et seq.

         "Basic Pass Through Trust Agreement" means the Pass Through Trust
Agreement dated as of January 28, 2000 between the Company and the Pass Through
Trustee, as such agreement may be supplemented, amended or modified, but does
not include any Trust Supplement.

         "Business Day" means any day, other than a Saturday, Sunday or other
day on which commercial banks are authorized or required by law to close in New
York, New York, Denver, Colorado, Wilmington, Delaware or Salt Lake City, Utah.

         "Certificateholder" means the Person in whose name a Certificate is
registered in the Register.

         "Certificates" has the meaning set forth in the third recital to the
Note Purchase Agreement.

<PAGE>   27

         "Class" means the class of Certificates issued by each Pass Through
Trust.

         "Class A Pass Through Trust" means the Atlas Air Pass Through Trust,
2000-1A.

         "Class B Pass Through Trust" means the Atlas Air Pass Through Trust,
2000-1B.

         "Class C Pass Through Trust" means the Atlas Air Pass Through Trust,
2000-1C.

         "Company" means Atlas Air, Inc., a Delaware corporation.

         "Corporate Trust Office" with respect to any Pass Through Trustee or
any Loan Trustee, means the office of such trustee in the city at which at any
particular time its corporate trust business shall be principally administered.

         "Cut-Off Date" means the earlier of (a) the day after the Delivery
Period Termination Date and (b) the date on which a Triggering Event occurs.

         "DCR" means Duff & Phelps Credit Rating Co.

         "Delivery Date" means the Business Day on which an Aircraft is
delivered to and accepted by the Company.

         "Delivery Period Termination Date" means December 31, 2000, provided
that, if a labor strike occurs at the Manufacturer on or prior to such date,
such date shall be extended by adding thereto the number of days that such
strike continued in effect.

         "Deposit Agreements" has the meaning set forth in the fifth recital to
the Note Purchase Agreement.

         "Deposit Make-Whole Premium" means, with respect to the distribution of
unused Deposits to holders of any Class of Certificates, as of any date of
determination, an amount equal to the excess, if any, of (a) the present value
of the excess of (i) the scheduled payment of principal and interest to maturity
of the related series of Equipment Notes, assuming the maximum principal amount
thereof (the "Maximum Amount") minus the sum of (x) such Class of Certificates'
proportionate share (in the same proportion that the amount of unused Deposit
with respect to such Class of Certificates bears to the unused Deposits with
respect to all Classes of Certificates, disregarding for this purpose unused
Deposits attributable to any Non- Delivery Redemption Amount) of the Par
Redemption Amount and (y) the portion of the Non-Delivery Redemption Amount
attributable to such Class, were issued, on each remaining Regular Distribution
Date for such Class under the Assumed Amortization Schedule over (ii) the
scheduled payment of principal and interest to maturity of the Equipment Notes
actually acquired by the Pass Through Trustee for such Class on each such
Regular Distribution Date, such present value computed by discounting such
excess on a semiannual basis on each Regular Distribution Date (assuming a
360-day year of twelve 30-day months) using a discount rate equal to the

<PAGE>   28

Adjusted Treasury Yield over (b) the amount of such unused Deposits to be (and
that have been) distributed to the holders of such Certificates minus the sum of
(x) such Class of Certificates' proportionate share of the Par Redemption Amount
and (y) the portion of the Non-Delivery Redemption Amount attributable to such
Class, plus accrued and unpaid interest on such net amount to but excluding such
date of determination from and including the preceding Regular Distribution Date
(or if such date of determination precedes the first Regular Distribution Date,
the Issuance Date).

         "Depositary" means Westdeutsche Landesbank Girozentrale, a German
banking institution organized under the law of the State of North
Rhine-Westphalia, acting through its New York Branch.

         "Deposits" has the meaning set forth in the fifth recital to the Note
Purchase Agreement.

         "Equipment Notes" means and includes any equipment notes issued under
any Indenture in the form specified in Section 2.01 thereof (as such form may be
varied pursuant to the terms of such Indenture) and any Equipment Note issued
under any Indenture in exchange for or replacement of any other Equipment Note.

         "Escrow Agent" has the meaning set forth in the first paragraph of the
Note Purchase Agreement.

         "Escrow Agreements" has the meaning set forth in the fifth recital to
the Note Purchase Agreement.

         "FAA" means the Federal Aviation Administration of the United States.

         "Final Withdrawal" with respect to each Escrow Agreement, has the
meaning set forth in Section 1.02 thereof.

         "Financing Agreements" means, collectively, the Lease Financing
Agreements and the Owner Financing Agreements.

         "Funding Date" has the meaning set forth in the Section 1(b) of the
Note Purchase Agreement.

         "Government Entity" means (a) any federal, state, provincial or similar
government, and any body, board, department, commission, court, tribunal,
authority, agency or other instrumentality of any such government or otherwise
exercising any executive, legislative, judicial, administrative or regulatory
functions of such government or (b) any other government entity having
jurisdiction over any matter contemplated by the Operative Agreements or
relating to the observance or performance of the obligations of any of the
parties to the Operative Agreements.

         "Guarantee Agreement" has the meaning set forth in the Intercreditor
Agreement.

<PAGE>   29

         "Guarantor" has the meaning set forth in the Intercreditor Agreement.

         "H.15(519)" means the weekly statistical release designated as such, or
any successor publication, published by the Board of Governors of the Federal
Reserve System.

         "Indentures" means, collectively, the Leased Aircraft Indentures and
the Owned Aircraft Indentures.

         "Intercreditor Agreement" has the meaning set forth in the ninth
recital to the Note Purchase Agreement.

         "Issuance Date" means the date of the original issuance of the
Certificates.

         "Law" means (a) any constitution, treaty, statute, law, decree,
regulation, order, rule or directive of any Government Entity, and (b) any
judicial or administrative interpretation or application of, or decision under,
any of the foregoing.

         "Lease" means a Lease Agreement substantially in the form of Exhibit
A-2 to the Note Purchase Agreement.

         "Lease Financing Agreements" means, collectively, the Aircraft Purchase
Agreement Assignment, the Leased Aircraft Participation Agreement, the Lease,
the Leased Aircraft Indenture, the Equipment Notes issued thereunder and the
Trust Agreement relating to the financing of a Leased Aircraft.

         "Leased Aircraft" means an Aircraft subject to a Lease.

         "Leased Aircraft Indenture" means a Trust Indenture and Mortgage
substantially in the form of Exhibit A-3 to the Note Purchase Agreement.

         "Leased Aircraft Participation Agreement" means a Participation
Agreement substantially in the form of Exhibit A-1 to the Note Purchase
Agreement.

         "Liquidity Facilities" has the meaning set forth in the ninth recital
to the Note Purchase Agreement.

         "Liquidity Providers" has the meaning set forth in the ninth recital to
the Note Purchase Agreement.

         "Loan Trustee" means the "Mortgagee" as defined in the Financing
Agreements.

         "Mandatory Document Terms" means the terms set forth on Schedule V to
the Note Purchase Agreement.

<PAGE>   30

         "Mandatory Economic Terms" means the terms set forth on Schedule VI to
the Note Purchase Agreement.

         "Manufacturer" means The Boeing Company, a Delaware corporation, solely
in its capacity as manufacturer of seller of the Aircraft.

         "Non-Delivery Redemption Amount" means the aggregate amount of Deposits
relating to Aircraft that are or will not be delivered by the Manufacturer prior
to the Delivery Period Termination Date due to any reason not occasioned by the
Company's fault or negligence.

         "Note Purchase Agreement" means the Note Purchase Agreement to which
this Annex A is attached.

         "Notice of Purchase Withdrawal" with respect to each Deposit Agreement,
has the meaning set forth in Section 2.3 thereof.

         "Offering Memorandum" means the Offering Memorandum dated January 20,
2000 relating to the Certificates.

         "Operative Agreements" means, collectively, the Pass Through Trust
Agreements, the Escrow Agreements, the Deposit Agreements, the Liquidity
Facilities, the Guarantee Agreements, the Intercreditor Agreement, the Trust
Agreements, the Equipment Notes, the Certificates and the Financing Agreements.

         "Owned Aircraft" means an Aircraft subject to an Owned Aircraft
Indenture.

         "Owned Aircraft Indenture" means a Trust Indenture and Mortgage
substantially in the form of Exhibit C-2 to the Note Purchase Agreement.

         "Owned Aircraft Participation Agreement" means a Participation
Agreement substantially in the form of Exhibit C-1 to the Note Purchase
Agreement.

         "Owner Financing Agreements" means, collectively, the Owned Aircraft
Participation Agreement, the Owned Aircraft Indenture and the Equipment Notes
issued thereunder.

         "Owner Participant" means, with respect to any Leased Aircraft, the
Person named as the Owner Participant in the Participation Agreement with
respect to such Leased Aircraft.

         "Owner Trust" means with respect to any Leased Aircraft, the trust
created by the "Trust Agreement" referred to in the Leased Aircraft Indenture
related thereto.

         "Owner Trustee" means with respect to any Leased Aircraft, the "Owner
Trustee" party to the "Trust Agreement" referred to in the Leased Aircraft
Indenture related thereto.

         "Par Redemption Amount" means $5 million.

<PAGE>   31

         "Participation Agreements" means, collectively, the Leased Aircraft
Participation Agreements and the Owned Aircraft Participation Agreements.

         "Pass Through Trust" has the meaning set forth in the third recital to
the Note Purchase Agreement.

         "Pass Through Trust Agreement" means each of the four separate Trust
Supplements, together in each case with the Basic Pass Through Trust Agreement,
each dated as of the Issuance Date, by and between the Company and the Pass
Through Trustee.

         "Pass Through Trustee" has the meaning set forth in the first paragraph
of the Note Purchase Agreement.

         "Paying Agent" has the meaning set forth in the first paragraph of the
Note Purchase Agreement.

         "Person" means any individual, firm, partnership, joint venture, trust,
trustee, Government Entity, organization, association, corporation, government
agency, committee, department, authority and other body, corporate or
incorporate, whether having distinct legal status or not, or any member of any
of the same.

         "Purchase Agreement" means the Purchase Agreement dated June 9, 1997
between the Company and the Manufacturer (including all exhibits thereto,
together with all letter agreements entered into that by their terms constitute
part of any such Purchase Agreement).

         "Qualified Owner Participant" means any bank, trust company, insurance
company, financial institution or corporation (other than, without the Company's
consent, a commercial air carrier, a commercial aircraft operator, a freight
forwarder or Affiliate of any of the foregoing), in each case with a combined
capital and surplus or net worth of at least $50,000,000.

         "Rating Agencies" means Moody's Investors Service, Inc. and Standard &
Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc.

         "Rating Agency Confirmation" means, with respect to any Financing
Agreement that has been modified in any material respect from the forms thereof
attached to the Note Purchase Agreement (other than modifications affecting only
the Owner Participant) or with respect to Substitute Aircraft, a written
confirmation from each Rating Agency that the use of such Financing Agreement
with such modifications or the substituting of such Substitute Aircraft for an
Aircraft, whichever of the foregoing shall in a particular case require
confirmation from such rating agencies, would not result in (i) a reduction of
the rating for any Class of Certificates below the then current rating for such
Class of Certificates or (ii) a withdrawal or suspension of the rating of any
Class of Certificates.

<PAGE>   32

         "Register" means the register maintained pursuant to Sections 3.04 and
7.12 of the Basic Pass Through Trust Agreement with respect to each Pass Through
Trust.

         "Regular Distribution Dates" shall mean January 2 and July 2 of each
year, commencing July 2, 2000.

         "Remaining Weighted Average Life" means, on a given date with respect
to any Equipment Note, the number of days equal to the quotient obtained by
dividing (a) the sum of each of the products obtained by multiplying (i) the
amount of each then remaining scheduled payment of principal of such Equipment
Note by (ii) the number of days from and including such determination date to
but excluding the date on which such payment of principal is scheduled to be
made, by (b) the then outstanding principal amount of such Equipment Note.

         "Section 1110" means 11 U.S.C. Section 1110 of the Bankruptcy Code or
any successor or analogous Section of the federal bankruptcy Law in effect from
time to time.

         "Series A Equipment Notes" means Equipment Notes issued under an
Indenture and designated as "Series A" thereunder.

         "Series B Equipment Notes" means Equipment Notes issued under an
Indenture and designated as "Series B" thereunder.

         "Series C Equipment Notes" means Equipment Notes issued under an
Indenture and designated as "Series C" thereunder.

         "Series D Equipment Notes" means Equipment Notes issued under an Owned
Aircraft Indenture and designated as "Series D" thereunder.

         "Subordination Agent" has the meaning set forth in the first paragraph
of the Note Purchase Agreement.

         "Substitute Aircraft" has the meaning set forth in Section 1(f) of the
Note Purchase Agreement.

         "Taxes" means all license, recording, documentary, registration and
other similar fees and all taxes, levies, imposts, duties, charges, assessments
or withholdings of any nature whatsoever imposed by any Taxing Authority,
together with any penalties, additions to tax, fines or interest thereon or
additions thereto.

         "Taxing Authority" means any federal, state or local government or
other taxing authority in the United States, any foreign government or any
political subdivision or taxing authority thereof, any international taxing
authority or any territory or possession of the United States or any taxing
authority thereof.

<PAGE>   33

         "Treasury Yield" means, at the date of determination, with respect to
any Equipment Note, the interest rate (expressed as a decimal and, in the case
of United States Treasury bills, converted to a bond equivalent yield)
determined to be the per annum rate equal to the semi-annual yield to maturity
for United States Treasury securities maturing on the Average Life Date of such
Equipment Note and trading in the public securities markets either as determined
by interpolation between the most recent weekly average yield to maturity for
two series of United States Treasury securities trading in the public securities
markets, (A) one maturing as close as possible to, but earlier than, the Average
Life Date of such Equipment Note and (B) the other maturing as close as possible
to, but later than, the Average Life Date of such Equipment Note, in each case
as published in the most recent H.15(519) or, if a weekly average yield to
maturity for United States Treasury securities maturing on the Average Life Date
of such Equipment Note is reported on the most recent H.15(519), such weekly
average yield to maturity as published in such H.15(519).

         "Triggering Event" has the meaning assigned to such term in the
Intercreditor Agreement.

         "Trust Agreement" means a Trust Agreement substantially in the form of
Exhibit A-5 to the Note Purchase Agreement.

         "Trust Supplement" means an agreement supplemental to the Basic Pass
Through Trust Agreement pursuant to which (i) a separate trust is created for
the benefit of the holders of the Pass Through Certificates of a class, (ii) the
issuance of the Pass Through Certificates of such class representing fractional
undivided interests in such trust is authorized and (iii) the terms of the Pass
Through Certificates of such class are established.

         "WTC" has the meaning set forth in the first paragraph of the Note
Purchase Agreement.

<PAGE>   34

                                 EXHIBIT A-1 to
                             Note Purchase Agreement

                 FORM OF LEASED AIRCRAFT PARTICIPATION AGREEMENT

<PAGE>   35

                                 EXHIBIT A-2 to
                             Note Purchase Agreement

                                  FORM OF LEASE

<PAGE>   36

                                 EXHIBIT A-3 to
                             Note Purchase Agreement

                        FORM OF LEASED AIRCRAFT INDENTURE

<PAGE>   37

                                 EXHIBIT A-4 to
                             Note Purchase Agreement

                 FORM OF AIRCRAFT PURCHASE AGREEMENT ASSIGNMENT

<PAGE>   38

                                 EXHIBIT A-5 to
                             Note Purchase Agreement

                     FORM OF LEASED AIRCRAFT TRUST AGREEMENT

<PAGE>   39

                                  EXHIBIT B to
                             Note Purchase Agreement

                             FORM OF DELIVERY NOTICE

[DATE]
Wilmington Trust Company
One Rodney Square
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration

First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department

Moody's Investors Service, Inc.
99 Church Street
New York, N.Y. 10007
Attention:

Standard & Poor's Ratings Services
55 Water Street
New York, N.Y. 10041
Attention:

Duff & Phelps Credit Rating Co.
17 State Street, 12th Floor
New York, NY 10004
Attention:

Re: Atlas Air, Inc.

Gentlemen:

         Reference is made to the Note Purchase Agreement dated as of January
28, 2000 (the "Note Purchase Agreement") among Atlas Air, Inc. ("Atlas"),
Wilmington Trust Company, as Pass Through Trustee under each of the Pass Through
Trust Agreements, as Subordination Agent and as Paying Agent, and First Security
Bank, National Association, as Escrow Agent.

         In accordance with Section 1(b) of the Note Purchase Agreement, the
undersigned hereby notifies you as follows:

         (i) Delivery of an Aircraft, and the consummation of the financing
         therefor, will take place on _________, which is a Business Day before
         the Cut-off Date.

<PAGE>   40

         (ii) Atlas will treat the Aircraft as a [Leased] [Owned] Aircraft.

         (iii) [The Owner Participant (a) is not an Affiliate of the Company and
         (b) based on the representations of the Owner Participant, is a
         Qualified Owner Participant or is a person the obligations of which
         under the Owner Participant Agreements are guaranteed by a Qualified
         Owner Participant].(1)

         (iv) The aggregate principal amount of Series A Equipment Notes to be
         issued and purchased by the Pass Through Trustee is $[_______].

         (v) The aggregate principal amount of Series B Equipment Notes to be
         issued and purchased by the Pass Through Trustee is $[_______].

         (vi) The aggregate amount of Series C Equipment Notes to be issued and
         purchased by the Pass Though Trustee is $[_______].

         The undersigned hereby directs the Pass Through Trustee to (a) instruct
the Escrow Agent to provide Notices of Purchase Withdrawal to the Depositary in
respect of the Equipment Notes to be issued as specified above and (b) enter
into the Participation Agreement included in the Financing Agreements with
respect to the Aircraft on the date specified in clause (i) above and to perform
its obligations thereunder.

                                       ATLAS AIR, INC.

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

--------
(1) Include for Leased Aircraft only

<PAGE>   41

                                 EXHIBIT C-1 to
                             Note Purchase Agreement

                 FORM OF OWNED AIRCRAFT PARTICIPATION AGREEMENT

<PAGE>   42

                                 EXHIBIT C-2 to
                             Note Purchase Agreement

                        FORM OF OWNED AIRCRAFT INDENTURE

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