Letter of Waiver, dated as of December 29, 2004, by General Electric Capital



  
 Exhibit 10.26 
  
 December 29, 2004 
  
 Johnstown America Corporation 
 17 Johns Street 
 Johnstown, PA 15907 
 Attention: Glen T. Karan 
  

	 	Re:	Credit Agreement (the “Credit Agreement”; capitalized terms not otherwise defined herein shall have the meaning set forth under the Credit Agreement) dated as of
October 17, 2003 between JOHNSTOWN AMERICA CORPORATION, a Delaware corporation (“JAC”), FREIGHT CAR SERVICES, INC., a Delaware corporation (“FCS”), JAC OPERATIONS, INC., a Delaware corporation (“JAC
Operations”), and JAIX LEASING COMPANY, a Delaware corporation (“JAIX”) (JAC, FCS, JAC Operations and JAIX are sometimes collectively referred to herein as the “Borrowers” and each individually as a
“Borrower”), the Credit Parties signatory thereto and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual capacity, “GE Capital”), for itself, as Lender, and as Agent.


  
 Ladies and Gentlemen, 
  
 Based upon a restatement of Borrowers’ financial statements as required
by Borrowers’ accountants, Borrowers have informed GE Capital they have failed to (i) achieve minimum EBITDA for the Covenant Computation Date ending March 31, 2004 of at least $8,500,000 or less; and (ii) maintain the Leverage Ratio for the
Covenant Computation Dates ending June 30, 2004 of not more than 2.75 to 1.00; and these failures constitute Events of Default under the Credit Agreement (the “Designated Defaults”). 
  
 Borrowers have requested Agent and the Lenders waive the Designated Defaults.
Agent and the Lenders, by their signatures below hereby waive the Designated Defaults. 
  
 Agent shall not, by execution of this letter, be deemed to have waived its rights under any circumstances in connection with any Default or Event of Default now or hereafter existing to the extent the same arises out
of the cross default provisions set forth in Sections 8.1(e) or (o) of the Credit Agreement. 
  
 Borrowers agree, by their signatures below that all terms and provisions set forth in that certain letter dated December 21, 2004 (the “First
Waiver Letter”) shall remain in full force and effect and this letter is deemed to be a part of and incorporated in the First Waiver Letter. For purposes of interpretation this letter shall constitute a Loan Document as such term is defined
in the Credit Agreement. 
  










 Johnstown America Corporation 
 December 29, 2004 
 Page 2 
  

 The waivers set forth in this letter shall be effective only with respect to the specific
circumstances referenced above in connection with the Designated Defaults. In no event shall these waivers be construed to be a waiver of (a) enforcement of the Agent’s rights with respect to any Event(s) of Default now existing or hereafter
arising (except as specifically set forth herein) or (b) Borrower’s compliance (except as specifically set forth herein) with the (i) covenants or other provisions of the Credit Agreement referenced above or (ii) any other covenants or
provisions thereof or of any other Loan Document. 
  
 Nothing
contained in this letter nor any communications between Agent and Borrowers shall be a waiver of any rights or remedies the Agent or any of the Lenders have or may have against the Borrowers or the Guarantors, except as specifically provided herein.
The Agent and the Lenders hereby preserve and reserve all of their rights and remedies against Borrowers and Guarantors under the Credit Agreement, the Loan Documents and applicable law except as specifically set forth herein. 
  

			
	 Very truly yours,

	
	GENERAL ELECTRIC CAPITAL CORPORATION, as Agent and Lender
		
	By:	 	/s/ T.J. Williams
	 	 	 T.J. Williams

	 	 	        Authorized Signatory


  

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 Johnstown America Corporation 
 December 29, 2004 
 Page 3 
  


			
	ACKNOWLEDGED AND AGREED:
	
	BORROWERS:
	
	JOHNSTOWN AMERICA CORPORATION
		
	By:	 	 /s/ Kevin P. Bagby

	 Name:
	 	 Kevin P. Bagby

	 Title:
	 	 
	
	FREIGHT CAR SERVICES, INC.
		
	By:	 	 /s/ Kevin P. Bagby

	 Name:
	 	 Kevin P. Bagby

	 Title:
	 	 
	
	JAIX LEASING COMPANY
		
	By:	 	 /s/ Kevin P. Bagby

	 Name:
	 	 Kevin P. Bagby

	 Title:
	 	 
	
	JAC OPERATIONS, INC.
		
	By:	 	 /s/ Kevin P. Bagby

	 Name:
	 	 Kevin P. Bagby

	 Title:
	 	 
	
	CREDIT PARTIES AND GUARANTORS:
	
	 FREIGHTCAR AMERICA, INC., formerly known as
  
 JAC HOLDINGS INTERNATIONAL, INC.

		
	By:	 	 /s/ Kevin P. Bagby

	 Name:
	 	 Kevin P. Bagby

	 Title:
	 	 

  










 Johnstown America Corporation 
 December 29, 2004 
 Page 4 
  


			
	JAC INTERMEDCO, INC.
		
	By:	 	 /s/ Kevin P. Bagby

	 Name:
	 	 Kevin P. Bagby

	 Title:
	 	 
	
	JAC PATENT COMPANY
		
	By:	 	 /s/ Kevin P. Bagby

	 Name:
	 	 Kevin P. Bagby

	 Title:
	 	 

  

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