CREDIT AGREEMENT

by and among

JOHNSTOWN AMERICA CORPORATION,

FREIGHT CAR SERVICES, INC.,

JAC OPERATIONS, INC.

and

JAIX LEASING COMPANY,

as Co-Borrowers

and

LASALLE BANK NATIONAL ASSOCIATION,

as the Bank

Dated September 11, 2003

TABLE OF CONTENTS

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EXHIBITS AND SCHEDULES

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CREDIT AGREEMENT

This Credit Agreement (?Credit Agreement?) is dated as of September 11, 2003, by and among JOHNSTOWN AMERICA CORPORATION, a Delaware corporation, FREIGHT CAR SERVICES, INC., a Delaware corporation, JAC OPERATIONS, INC., a Delaware corporation, and JAIX LEASING COMPANY, a Delaware corporation (each a ?Co-Borrower?, and collectively the ?Co-Borrowers?), and LASALLE BANK NATIONAL ASSOCIATION, a national banking association (the ?Bank?).

BACKGROUND INFORMATION

The Co-Borrowers have requested that the Bank extend a revolving credit facility to the Co-Borrowers.

The Bank is willing to extend the requested credit facility to the Co-Borrowers pursuant to the terms and subject to the conditions set forth in this Agreement.

ACCORDINGLY, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Co-Borrowers and the Bank hereby 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:

(a) the terms defined in the preamble have the meanings therein assigned to them;

(b) the terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular; and

(c) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP.

?Accounts? means the aggregate unpaid obligations of customers and other account debtors of the Co-Borrowers arising out of the sale of goods or the rendition of services by the Co-Borrowers on an open account or deferred payment basis.

?Advance? means a loan of funds by the Bank to the Co-Borrowers under the Revolving Facility.

?Affiliate? or ?Affiliates? means any Person controlled by, controlling or under common control with the subject Person, including (without limitation) any Subsidiary of the subject Person. For purposes of this definition, ?control,? when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; provided, however, that the term ?Affiliate? shall in no event include the Bank.

?Agreement? means this Credit Agreement and all exhibits, amendments and supplements hereto and modifications hereof.

?Bank? has the meaning specified in the preamble.

?Borrowing? means a borrowing by the Co-Borrowers under the Revolving Facility, consisting of the aggregate of all Advances made by the Bank to the Co-Borrowers pursuant to a request under Section 2.2.

?Borrowing Base? means, at any time, the lesser of:

(a) the Revolving Commitment, or

(b) the sum of:

(i) 85% of all Eligible Accounts and Eligible Foreign Accounts;

(ii) 70% of all Eligible Finished Inventory;

(iii) 60% of all Eligible Semi-Finished Inventory; and

(iv) 100% of the Cash Collateral;

in any case, computed in accordance with the most recent Borrowing Base Certificate submitted to, and accepted by, the Bank.

?Borrowing Base Certificate? means a certificate in substantially the form attached hereto as Exhibit A, duly completed and certified by the Co-Borrowers, pursuant to which the Co-Borrowers set forth their Accounts, Eligible Accounts, Eligible Finished Inventory and Eligible Semi-Finished Inventory and the applicable Borrowing Base as of a particular date.

?Business Day? means any day other than a Saturday or Sunday on which national banks are required to be open for business in Chicago, Illinois and, in addition, if such day relates to a Eurodollar Funding or fixing of a Eurodollar Rate, a day on which dealings in U.S. dollar deposits are carried on in the London interbank eurodollar market.

?Capital Adequacy Rule? has the meaning specified in Section 2.17(b)(ii).

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?Capital Adequacy Rule Change? has the meaning specified in Section 2.17(b)(iii).

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