**Exhibit 10.7****AMENDMENT NO. 2 TO WAIVER TO LOAN AGREEMENT**     THIS AMENDMENT NO. 2 TO WAIVER TO LOAN AGREEMENT, dated as of December 15, 2005 (this“Waiver”), is made and entered into by and among World Airways, Inc., a Delawarecorporation (the “Borrower”), North American Airlines, Inc., a Delaware corporation(“North American”), World Air Holdings, Inc., a Delaware Corporation (the “Parent”)and the Air Transportation Stabilization Board (the “Board”). Capitalized terms usedherein and not otherwise defined herein shall have the meanings assigned to such terms in the LoanAgreement (as such term is defined below).WITNESSET H:     WHEREAS, the Borrower, North American, the Parent, World Airways Parts Company, LLC, GovcoIncorporated, as Primary Tranche A Lender, Citicorp North America, Inc., as Govco AdministrativeAgent, the other lenders party thereto, Citibank, N.A., as Agent, Citibank, N.A., as CollateralAgent, International Lease Finance Corporation, as Supplemental Guarantor, Phoenix AmericanFinancial Services, Inc., as Loan Administrator and the Board are parties to that certain LoanAgreement dated as of December 30, 2003 (the “Original Loan Agreement”), as amended by thatcertain Amendment No. 1 and Waiver to the Loan Agreement dated as of April 27, 2005 (the“Amendment”, and together with the Original Loan Agreement, the “Loan Agreement”);     WHEREAS, the Parent previously advised the Agent, the Loan Administrator and the Board thatthe Obligors were in default of the covenants set forth in (i) Section 3.1(f) of each of WarrantD-1-1 and Warrant D-1-4, each dated January 10, 2005 in favor of the Board (collectively referredto hereinafter as the “Warrants”), (ii) Section 5.1(b)(i)(A) of the Loan Agreement and(iii) Section 5.6 of the Loan Agreement, which each constitute an Event of Default under the LoanAgreement pursuant to Section 7.1(e) thereof, in each case caused by the Obligors’ inability todeliver a complete independent auditor review with respect to North American’s financial statements(such defaults collectively referred to hereinafter as the “Initial Defaults”);     WHEREAS, the Parent requested that the Board waive the Initial Defaults and the Board grantedsuch waiver pursuant to that certain Waiver to Loan Agreement dated October 28, 2005 (the“Initial Waiver”) for the period from the date of the Initial Waiver through November 21,2005 (the “Initial Waiver Period”);     WHEREAS, the Parent requested that the Board extend the expiration date of the Initial WaiverPeriod to December 15, 2005 (the “Subsequent Waiver Period”) and the Board granted suchwaiver pursuant to that certain Amendment No. 1 to Waiver to Loan Agreement dated November 30, 2005(the “First Amendment”);     WHEREAS, the Parent has advised the Agent, the Loan Administrator and the Board that that theObligors are in default of the covenants set forth in (i) Section 3.1(f) of each of the Warrants,(ii) Section 5.1(b)(i)(A) of the Loan Agreement and (iii) Section 5.6 of the Loan Agreement, whicheach constitute an Event of Default under the Loan Agreement pursuant to
 

 
Section 7.1(e) thereof, in each case caused by Holdings’ failure to file Form 10-Q for thethird quarter ended September 30, 2005 with the Securities and Exchange Commission (such defaultscollectively referred to hereinafter as the “Additional Defaults”);     WHEREAS, the Parent has advised the Agent, the Loan Administrator and the Board that theInitial Defaults continue to exist and has requested that the Board amend the First Amendment inorder to extend the expiration date of the Subsequent Waiver Period to and to grant a waiver of theAdditional Defaults through January 4, 2006;     WHEREAS, pursuant to Section 10.1 of the Loan Agreement, so long as the Board Guarantee is infull force and effect and has not been terminated without a payment having been made thereunder,the Board may, in its sole discretion, consent to the amendment, modification or waiver of certainprovisions of (i) the Loan Agreement, including Section 5.1(b)(i)(A) and Section 5.6 thereof and(ii) the Warrants, including Section 3.1(f) thereof; and     WHEREAS, the Board is willing to amend the First Amendment as requested by the Parent pursuantto the terms and subject to the conditions set forth herein.     NOW, THEREFORE, for and in consideration of the premises and the mutual covenants containedherein, and for other good and valuable consideration, the receipt, adequacy and legal sufficiencyof which are hereby acknowledged, the parties do hereby agree as follows:     Section 1. Amendment. Subject to the terms and conditions of this Waiver, Section 1of the First Amendment is hereby amended by substituting “January 4, 2006” for “December 15, 2005”.     Section 2. Limited Waiver. Subject to the terms and conditions of this Waiver, theBoard hereby waives the Additional Defaults during the period from the date hereof through January4, 2006 (the “Additional Waiver Period”). The foregoing limited waiver shall not beconstrued to impair the ability of the Board to enforce any of its rights, powers or remedies inany manner except as set forth in the preceding sentence, including, without limitation: (i) afterthe Additional Waiver Period, regardless of whether or not such enforcement relates to an eventtaking place during the Additional Waiver Period, or (ii) during the Additional Waiver Period forDefaults or Events of Default other than the Initial Defaults or the Additional Defaults.     Section 3. Representations and Warranties. The Obligors each represent and warrant tothe Board as follows:          (a) this Waiver has been duly authorized, executed and delivered by it and constitutes itslegal, valid and binding obligation, enforceable in accordance with its terms;          (b) all of the representations and warranties in the Loan Agreement, after giving effect tothis Waiver, are true and correct in all material respects (except that any representation andwarranty that is qualified as to “materiality” shall be true and correct in all respects) on and asof the date hereof as if made on the date hereof (or, if any such representation or warranty isexpressly stated to have been made as of a specific date, as of such specific date); and
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          (c) after giving effect to this Waiver, no Default or Event of Default has occurred and iscontinuing.     Section 4. No Waiver; Remedies. Except as expressly set forth herein, this Waivershall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affectthe rights and remedies of the Board or the Obligors under the Loan Agreement or any other LoanDocument, and shall not alter, modify, amend or in any way affect any of the terms, conditions,obligations, covenants or agreements contained in the Loan Agreement, any other Loan Document orthe Board Guarantee, all of which are ratified and affirmed in all respects and shall continue infull force and effect. Nothing contained herein shall be deemed to entitle the Obligors to aconsent to, or a waiver, amendment, modification or other change of, any of the terms, conditions,obligations, covenants or agreements contained in the Loan Agreement or any other Loan Document insimilar or different circumstances. This Waiver shall constitute a “Loan Document” for allpurposes of the Loan Agreement and the other Loan Documents.     Section 5. Headings. The headings set forth in this Waiver are and shall be withoutsubstantive meaning or content of any kind whatsoever and are not a part of the agreement betweenthe parties hereto.     Section 6. Severability. In case any provision in or obligation under this Waivershall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality andenforceability of the remaining provisions or obligations, or of such provision or obligation inany other jurisdiction, shall not in any way be affected or impaired thereby.     Section 7. Counterparts. This Waiver may be executed in any number of counterpartsand by the parties hereto in separate counterparts, each of which when so executed shall be deemedto be an original and all of which taken together shall constitute one and the same agreement.Signature pages may be detached from multiple separate counterparts and attached to a singlecounterpart so that all signature pages are attached to the same document. Delivery of an executedsignature page of this Waiver by facsimile transmission shall be as effective as delivery of amanually executed counterpart hereof.     Section 8. Governing Law. This Waiver and the rights and obligations of the partieshereto shall be governed by, and construed in accordance with, the law of the State of New York;provided, that the rights and obligations of the Board hereunder (whether as guarantor orlender) shall be governed by, and construed in accordance with, the Federal law of the UnitedStates of America, if and to the extent such Federal law is applicable, and otherwise in accordancewith the law of the State of New York.     Section 9. Fees and Expenses. The Obligors agree to promptly pay, upon request, allcosts and expenses (including the reasonable fees and expenses of counsel) reasonably incurred bythe Board in connection with this Waiver.[*REMAINDER OF INTENTIONALLY LEFT BLANK*]
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     **IN WITNESS WHEREOF**, the parties have caused this Waiver to be duly executed as of the datefirst written above.         **WORLD AIRWAYS, INC.**           By: /s/ Renee Skinner Name: Renee Skinner      Title: Vice President/Controller           **WORLD AIR HOLDINGS, INC.**           By: /s/ Virginia Clark Name: Virginia Clark      Title: Acting Chief Financial Officer           **NORTH AMERICAN AIRLINES, INC.**          By: /s/ Salvatore A. Sacco Name: Salvatore A. Sacco      Title: Vice President/Controller           **AIR TRANSPORTATION STABILIZATION BOARD**           By: /s/ Mark R. Dayton Name: Mark R. Dayton      Title: Executive Director