10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the Period Ended September 30, 2007

or

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 0-3252

LEXINGTON PRECISION CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	22-1830121
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
800 Third Avenue, New York, NY	10022
(Address of principal executive office)	(Zip Code)

(212) 319-4657
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address, and former fiscal year, if changed since last report date)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. (Check one):

Large Accelerated Filer o           Accelerated Filer o           Non-Accelerated Filer þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No þ

As of November 7, 2007, there were 5,021,767 shares of common stock of the Registrant outstanding.

(Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date)

LEXINGTON PRECISION CORPORATION

Quarterly Report on Form 10-Q

Table of Contents

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3. Quantitative and Qualitative Disclosures about Market Risk	30
Item 4T. Controls and Procedures	30
PART II. OTHER INFORMATION
Item 1A. Risk Factors	31
Item 3. Defaults upon Senior Securities	31
Item 6. Exhibits	32
EX-10.1
EX-10.2
EX-10.3
EX-10.4
EX-10.5
EX-10.6
EX-31.1
EX-31.2
EX-31.3
EX-32.1
EX-32.2
EX-32.3

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PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

LEXINGTON PRECISION CORPORATION

Consolidated Statements of Operations
(thousands of dollars, except per share data)
(unaudited)

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2007			2006			2007			2006
Net sales	$	23,060		$	20,371		$	69,368		$	69,608
Cost of sales		19,750			18,185			59,429			60,272
Gross profit		3,310			2,186			9,939			9,336
Selling and administrative expenses		1,687			1,511			5,522			5,126
Income from operations		1,623			675			4,417			4,210
Interest expense		(3,444	)		(2,116	)		(8,428	)		(6,984	)
Loss from continuing operations before income taxes		(1,821	)		(1,441	)		(4,011	)		(2,774	)
Income tax provision (benefit)		(15	)		15			15			45
Loss from continuing operations		(1,806	)		(1,456	)		(4,026	)		(2,819	)
Loss from discontinued operations		(53	)		(49	)		(111	)		(188	)
Net loss	$	(1,859	)	$	(1,505	)	$	(4,137	)	$	(3,007	)
Basic and diluted loss per share of common stock:
Continuing operations	$	(0.37	)	$	(0.29	)	$	(0.82	)	$	(0.57	)
Discontinued operations		(0.01	)		(0.01	)		(0.02	)		(0.04	)
Net loss	$	(0.38	)	$	(0.30	)	$	(0.84	)	$	(0.61	)

See notes to consolidated financial statements.

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LEXINGTON PRECISION CORPORATION

Consolidated Balance Sheets
(thousands of dollars, except share and per share data)

	September 30,			December 31,
	2007			2006
	(unaudited)
Assets:
Current assets:
Cash	$	384		$	35
Accounts receivable, net		14,713			9,852
Inventories, net		9,564			8,787
Prepaid expenses and other current assets		1,262			1,073
Deferred income taxes		374			374
Current assets of discontinued operations		96			101
Total current assets		26,393			20,222
Plant and equipment, net		21,770			24,226
Plant and equipment of discontinued operations, net		1,349			1,418
Goodwill, net		7,623			7,623
Other assets, net		839			951
	$	57,974		$	54,440
Liabilities and stockholders’ deficit:
Current liabilities:
Accounts payable	$	6,421		$	6,370
Accrued expenses, excluding interest		4,282			3,789
Accrued interest expense		6,374			2,130
Debt in default		71,908			68,967
Current portion of long-term debt		747			734
Current liabilities of discontinued operations		175			221
Total current liabilities		89,907			82,211
Long-term debt, excluding current portion		360			406
Deferred income taxes		374			374
Other long-term liabilities		455			440
Stockholders’ deficit:
Common stock, $0.25 par value, 10,000,000 shares authorized, 4,981,767 shares issued and outstanding		1,238			1,235
Additional paid-in-capital		13,184			13,181
Accumulated deficit		(47,544	)		(43,407	)
Total stockholders’ deficit		(33,122	)		(28,991	)
	$	57,974		$	54,440

See notes to consolidated financial statements.

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LEXINGTON PRECISION CORPORATION

Consolidated Statements of Cash Flows
(thousands of dollars)
(unaudited)

	Nine Months Ended
	September 30
	2007			2006
Operating activities:
Net loss	$	(4,137	)	$	(3,007	)
Adjustments to reconcile net loss to net cash provided (used) by continuing operations:
Loss from discontinued operations		111			188
Depreciation		4,625			5,237
Amortization included in cost of sales		295			267
Amortization included in interest expense		960			1,136
Changes in operating assets and liabilities that provided (used) cash:
Accounts receivable, net		(4,861	)		(198	)
Inventories, net		(777	)		(446	)
Prepaid expenses and other current assets		(189	)		(616	)
Accounts payable		51			(2,992	)
Accrued expenses, excluding interest		493			(203	)
Accrued interest expense		4,244			155
Other long-term liabilities		15			11
Other		1			(28	)
Net cash provided (used) by continuing operations		831			(496	)
Net cash used by discontinued operations		(56	)		(175	)
Net cash provided (used) by operating activities		775			(671	)
Investing activities:
Purchases of plant and equipment		(2,141	)		(1,843	)
Expenditures for tooling owned by customers		(165	)		40
Other		(11	)		(167	)
Net cash used by continuing operations		(2,317	)		(1,970	)
Net cash used by discontinued operations		(27	)		—
Net cash used by investing activities		(2,344	)		(1,970	)
Financing activities:
Net increase (decrease) in borrowings under revolving line of credit		5,365			(2,503	)
Proceeds from issuance of debt		—			28,500
Repayment of debt in default and long-term debt		(2,487	)		(21,700	)
Capitalized financing expenses		(960	)		(1,637	)
Net cash provided by financing activities		1,918			2,660
Net increase in cash		349			19
Cash at beginning of year		35			13
Cash at end of period	$	384		$	32

See notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1 — Basis of Presentation

     The unaudited interim consolidated financial statements include the accounts of Lexington Precision Corporation and its subsidiary (collectively, the “Company”) and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, the interim consolidated financial statements do not include all the information and footnotes included in the Company’s annual consolidated financial statements. Significant accounting policies followed by the Company are set forth in Note 1 to the consolidated financial statements in the Company’s annual report on Form 10-K for the year ended December 31, 2006. In the opinion of management, the interim consolidated financial statements contain all adjustments, consisting only of adjustments of a normal, recurring nature, necessary to present fairly the Company’s financial position at September 30, 2007, the Company’s results of operations for the three-month and nine-month periods ended September 30, 2007 and 2006, and the Company’s cash flows for the nine-month periods ended September 30, 2007 and 2006. In preparing the interim consolidated financial statements, the Company is required to make estimates and assumptions that affect the reported amounts and disclosures; actual results could differ from those estimates. 

     The results of operations for the three-month and nine-month periods ended September 30, 2007, are not necessarily indicative of the results to be expected for any succeeding quarter or for the full year.

     The Company did not make the scheduled interest payments due on its Senior Subordinated Notes on November 1, 2006, and February 1, May 1, August 1, and November 1, 2007. On May 25, 2007, the Company entered into a six-month forbearance agreement with the holders of $25,428,000 aggregate principal amount of the Senior Subordinated Notes, or 74.4% of the Senior Subordinated Notes outstanding. Effective September 24, 2007, the Termination Date of their Forbearance Agreement was extended to January 24, 2008. As long as the forbearance agreement is in effect, the Company will not be required to make interest payments on the Senior Subordinated Notes, and the forbearing noteholders may not take any action to collect any past due interest payments. An additional $7,772,000 aggregate principal amount, or 22.7% of the Senior Subordinated Notes outstanding, is held by affiliates of the Company or their relatives. The Company agreed to raise the interest rate on the Senior Subordinated Notes from 12% to 16% for the period from March 9, 2007, through the end of the forbearance period.

     The failure to make the scheduled interest payments on the Senior Subordinated Notes caused a cross-default under the agreements governing the Company’s secured debt. Additionally, the Company was not in compliance with a financial covenant related to fixed charge coverage on February 28, March 31, and April 30, 2007, or with a financial covenant related to leverage on March 31, 2007. On May 25, 2007, the Company entered into a 120-day forbearance agreement with the secured lenders. Effective September 24, 2007, the termination date of this forbearance agreement was extended to November 26, 2007. The forbearance agreement provides that the secured lenders will take no action, during the forbearance period, to accelerate or collect their loans as a result of any existing default or cross-default. The forbearance agreement modifies certain of the financial covenants effective March 31, 2007, through the end of the forbearance period. The forbearance period can be extended by an additional 30 days or 60 days in certain circumstances. The Company is in compliance with all financial covenants, as modified. The Company has remained current on all principal and interest payments owed to the secured lenders.

- 4 -

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

     During the forbearance period, the Company is pursuing all available strategic alternatives to satisfy its outstanding indebtedness, including the refinancing of the Company’s indebtedness and the sale of the Company’s Rubber Group. The Company has retained W. Y. Campbell and Company to assist it in these efforts.

     If the Company is unable to restructure, refinance, or repay its secured debt and Senior Subordinated Notes during the forbearance period and its debt holders do not agree to extend the forbearance agreements, it may seek protection under chapter 11 of the federal Bankruptcy Code in order to permit it to continue to operate its business in an orderly fashion until a restructuring of the secured debt and Senior Subordinated Notes can be consummated.

     The Company’s consolidated financial statements have been presented on a “going concern basis,” as such term is used in U.S. generally accepted accounting principles. A going concern basis contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company’s ability to restructure, refinance, or repay its secured debt and Senior Subordinated Notes is subject to risks and uncertainties. As a result, there is substantial doubt about the Company’s ability to continue to report on a going concern basis. The consolidated financial statements do not include any adjustments to the amounts or classification of assets or liabilities to reflect these risks and uncertainties.

     For information regarding discontinued operations, please refer to Note 8.

Note 2 — Inventories

     Inventories at September 30, 2007, and December 31, 2006, are set forth below (dollar amounts in thousands):

	September 30,		December 31,
	2007		2006
Finished goods	$	4,794	$	4,595
Work in process		2,347		2,279
Raw material		2,423		1,913
	$	9,564	$	8,787

Note 3 — Plant and Equipment

     Plant and equipment at September 30, 2007, and December 31, 2006, is set forth below (dollar amounts in thousands):

	September 30,		December 31,
	2007		2006
Land	$	1,814	$	1,776
Buildings		13,367		13,368
Equipment		113,112		110,980
		128,293		126,124
Accumulated depreciation		106,523		101,898
Plant and equipment, net	$	21,770	$	24,226

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 4 — Debt

     Debt at September 30, 2007, and December 31, 2006, is set forth below (dollar amounts in thousands):

	September 30,			December 31,
	2007			2006
Debt in default (1):
Revolving line of credit	$	13,734		$	8,369
Equipment term loan		9,792			11,666
Real estate term loan		14,205			14,755
Senior Subordinated Notes		34,177			34,177
Total debt in default		71,908			68,967
Current portion of long-term debt		747			734
Long-term debt:
Junior Subordinated Note		347			347
Series B Preferred Stock (2)		659			657
Other		101			136
Subtotal		1,107			1,140
Less current portion		(747	)		(734	)
Total long-term debt		360			406
Total debt	$	73,015		$	70,107

(1)	At September 30, 2007, all of the debt listed as debt in default is subject to forbearance agreements, the terms of which are set forth below in this Note 4.
(2)	Liquidation value of $686,000 at September 30, 2007.

     Secured Debt

     The failure to make the scheduled interest payments on the Senior Subordinated Notes on November 1, 2006, and February 1, and May 1, 2007, caused a cross-default under the agreements governing the Company’s secured debt. Additionally, the Company was not in compliance with a financial covenant related to fixed charge coverage on February 28, March 31, and April 30, 2007, or with a financial covenant related to leverage on March 31, 2007. The Company has entered into a forbearance agreement with the secured lenders that currently expires on November 26, 2007. The forbearance agreement provides that the secured lenders will take no action, during the forbearance period, to accelerate or collect their loans as a result of any existing default or cross-default. The forbearance agreement modifies all of the financial covenants effective March 31, 2007, through the end of the forbearance period. The forbearance period can be extended by an additional 30 days or 60 days in certain circumstances. The Company is in compliance with all financial covenants, as modified. The Company has remained current on all principal and interest payments owed to the secured lenders.

- 6 -

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

     At September 30, 2007, the Company had outstanding loans of $13,734,000 and reimbursement obligations with respect to letters of credit of $907,000 under the revolving line of credit. At September 30, 2007, unused availability under the revolving line of credit was $1,355,000. Under the revolving line of credit, loans and reimbursement obligations with respect to letters of credit are limited to the lesser of $17,500,000 or an amount equal to (1) 85% of eligible accounts receivable, plus (2) the lesser of 65% of eligible inventories or 51% of eligible accounts receivable, minus (3) $500,000. Loans under the revolving line of credit bear interest at the London Interbank Offered Rate (“LIBOR”) plus 4.75%. At September 30, 2007, the interest rate on loans outstanding under the revolving line of credit was 10.28%. The Company’s obligations under the revolving line of credit are secured by a first priority lien on substantially all of the Company’s assets other than real estate and a second priority lien on the Company’s real estate.

     At September 30, 2007, the outstanding balance of the equipment term loan was $9,792,000. The equipment term loan is payable in monthly principal installments of $208,000 through May 1, 2009, with the unpaid balance payable on May 15, 2009. Interest on the equipment term loan is payable monthly at LIBOR plus 6.5%. At September 30, 2007, the interest rate on the equipment term loan was 12.03%. The equipment term loan is secured by a first priority lien on substantially all of the Company’s assets other than real estate and a second priority lien on the Company’s real estate.

     At September 30, 2007, the outstanding balance of the real estate term loan was $14,205,000. The real estate term loan is payable in monthly principal installments of $61,000 through May 1, 2009, with the unpaid balance payable on May 15, 2009. Additionally, if the balance outstanding on the real estate term loan is not reduced to $11,022,000 or less by December 31, 2007 (which would require principal prepayments aggregating $3,000,000 in addition to the scheduled monthly principal payments), interest payments on the Company’s subordinated debt may only be made if the unused availability under the Company’s revolving line of credit exceeds an amount equal to $3,000,000 minus any principal prepayments made to date. At September 30, 2007, interest on the real estate term loan was payable monthly at LIBOR plus 6.5% on $10,205,000 of the loan and the prime rate plus 8% on $4,000,000 of the loan. At September 30, 2007, the weighted average interest rate on the real estate term loan was 13.16%. Principal payments made on the real estate term loan are allocable first to the portion of the loan that bears interest at LIBOR plus 6.5% and then to the portion of the loan that bears interest at the prime rate plus 8%. The real estate term loan is secured by a first priority lien on the Company’s real estate and a second priority lien on substantially all of the Company’s other assets.

     The agreements governing the revolving line of credit and the secured term loans contain covenants that (1) require the Company to maintain a maximum ratio of senior debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) and minimum levels of fixed charge coverage, revenue, and EBITDA, (2) limit the Company’s capital expenditures to $5,500,000 and $6,000,000 per annum during the years ending December 31, 2007 and 2008, respectively, (3) limit the amount of new secured financing that the Company can incur for the purchase of plant and equipment to $2,500,000 during the term of the revolving line of credit, and (4) place certain other restrictions on the Company’s business and operations, including limitations on the sale of all or substantially all of its assets, the repurchase of common stock, the redemption of preferred stock, and the payment of cash dividends.

- 7 -

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

     Senior Subordinated Notes

     The Senior Subordinated Notes mature on August 1, 2009, and are unsecured obligations of the Company that are subordinated in right of payment to all of the Company’s existing and future senior debt. The Company did not make the scheduled interest payments due on the Senior Subordinated Notes on November 1, 2006, and February 1, May 1, August 1, and November 1, 2007. On May 25, 2007, the Company entered into a six-month forbearance agreement with the holders of $25,428,000 aggregate principal amount of the Senior Subordinated Notes, or 74.4% of the Senior Subordinated Notes outstanding. Effective September 24, 2007, the termination date of their forbearance agreement was extended to January 24, 2008. As long as the forbearance agreement is in effect, the Company will not be required to make interest payments on the Senior Subordinated Notes and, the forbearing noteholders may not take any action to collect any past due interest payments. An additional $7,772,000 aggregate principal amount, or 22.7% of the Senior Subordinated Notes outstanding, is held by affiliates of the Company or their relatives. The Company agreed to raise the interest rate on the Senior Subordinated Notes from 12% to 16% for the period from March 9, 2007, through the end of the forbearance period. At September 30, 2007, the accrued and unpaid interest on the Senior Subordinated Notes totaled $5,911,000.

     Junior Subordinated Note

     The Junior Subordinated Note matures on November 1, 2009, and is an unsecured obligation of the Company that is subordinated in right of payment to all of the Company’s existing and future senior debt and the Senior Subordinated Notes. The Junior Subordinated Note bears interest at 13% per annum, payable quarterly on February 1, May 1, August 1, and November 1. The holder of the Junior Subordinated Note has deferred the interest payments due on November 1, 2006, and February 1, May 1, August 1, and November 1, 2007, to February 1, 2008, and eliminated the cross-default provision contained in the Junior Subordinated Note. At September 30, 2007, the accrued and unpaid interest on the Junior Subordinated Note totaled $53,000.

     Series B Preferred Stock

     At September 30, 2007, there were outstanding 3,300 shares of the Company’s $8 Cumulative Convertible Preferred Stock, Series B (the “Series B Preferred Stock”), par value $100 per share, with a carrying value of $659,000. Each share of Series B Preferred Stock is (1) entitled to one vote, (2) redeemable for $200 plus accumulated and unpaid dividends, (3) convertible into 14.8148 shares of common stock (subject to adjustment), and (4) entitled, upon voluntary or involuntary liquidation and after payment of all liabilities of the Company, to a liquidation preference of $200 plus accumulated and unpaid dividends. Redemptions of $90,000 are scheduled on November 30 of each year in order to retire 450 shares of Series B Preferred Stock annually. The Company did not make scheduled redemptions in the aggregate amount of $630,000 during the years 2000 through 2006, and the Company did not make the scheduled dividend payments on the Series B Preferred Stock on December 15, 2006, and March 15, June 15, and September 15, 2007, in the aggregate amount of $26,400.

     The Series B Preferred Stock is classified as debt in the consolidated financial statements in accordance with the provisions of Statement of Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity.”

- 8 -

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

     Fair Value of Financial Instruments

     The Company believes that, at September 30, 2007, the fair values of the loans outstanding under the revolving line of credit, the equipment term loan, and the real estate term loan approximated the principal amounts of such loans.

     Because there is limited trading in the Company’s various unsecured debt securities, the Company is unable to estimate the fair value of the Senior Subordinated Notes, the Junior Subordinated Note, or the Series B Preferred Stock.

     Cash Interest Paid

     Cash interest paid during the nine-month periods ended September 30, 2007 and 2006, including amounts allocated to discontinued operations, totaled $3,348,000 and $5,829,000, respectively.

Note 5 — Income Taxes

     At September 30, 2007, and December 31, 2006, the Company’s net deferred income tax assets were fully reserved by a valuation allowance. The income tax provisions recorded during the three-month and nine-month periods ended September 30, 2007 and 2006, consisted of estimated state income taxes payable.

Note 6 — Net Loss per Common Share

     The calculations of basic and diluted net loss per common share for the three-month and nine-month periods ended September 30, 2007 and 2006, are set forth below (in thousands, except per share amounts). The assumed conversion of the Series B Preferred Stock and the assumed exercise of outstanding warrants to purchase the Company’s common stock were not dilutive. As a result, the weighted average number of outstanding common shares used in the calculation of net loss per common share set forth below does not reflect the assumed conversion of the Series B Preferred Stock or the assumed exercise of the warrants. In addition, awards of restricted common stock issued under the

- 9 -

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Company’s 2005 Stock Award Plan are not considered outstanding common shares for purposes of the calculation of basic or diluted net income or loss per share of common stock until such shares vest.

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2007			2006			2007			2006
Numerator – Net loss:
Continuing operations	$	(1,806	)	$	(1,456	)	$	(4,026	)	$	(2,819	)
Discontinued operations		(53	)		(49	)		(111	)		(188	)
Net loss	$	(1,859	)	$	(1,505	)	$	(4,137	)	$	(3,007	)
Denominator – Weighted average shares outstanding		4,952			4,942			4,949			4,939
Basic and diluted net loss per share of common stock:
Continuing operations	$	(0.37	)	$	(0.29	)	$	(0.82	)	$	(0.57	)
Discontinued operations		(0.01	)		(0.01	)		(0.02	)		(0.04	)
Net loss	$	(0.38	)	$	(0.30	)	$	(0.84	)	$	(0.61	)

Note 7 — Segments

     Description of Segments and Products

     The Company has two operating segments, the Rubber Group and the Metals Group. The Rubber Group manufactures tight-tolerance rubber components, primarily connector seals used in automotive wiring systems, insulators used in both original equipment and aftermarket automotive ignition-wire sets, and molded rubber components used in a variety of medical devices, such as intravenous feeding systems, syringes, and surgical equipment. The Metals Group manufactures machined metal components from aluminum, brass, steel, and stainless steel bars, forgings, and cold-headed blanks. The Rubber Group and the Metals Group conduct substantially all of their business within the continental United States.

     The Corporate Office consists primarily of general administrative functions that are not a result of any activity carried on by either the Rubber Group or the Metals Group. Corporate Office expenses include the compensation and benefits of the Company’s executive officers and corporate staff, rent on the office space occupied by these individuals, general corporate legal fees, including fees related to financings, and certain insurance expenses. Assets of the Corporate Office are primarily cash, certain prepaid expenses and other miscellaneous current assets, deferred tax assets, and deferred financing expenses.

- 10 -

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

     Segment Financial Data

     Information relating to the Company’s operating segments and the Corporate Office for the three-month and nine-month periods ended September 30, 2007 and 2006, is summarized below (dollar amounts in thousands):

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2007			2006			2007			2006
Net sales by segment:
Rubber Group	$	19,375		$	17,540		$	58,764		$	60,319
Metals Group		3,685			2,831			10,604			9,289
Total net sales	$	23,060		$	20,371		$	69,368		$	69,608
Net sales by product line:
Automotive	$	18,030		$	16,902		$	54,670		$	58,678
Medical		4,496			2,749			12,341			8,418
Industrial		169			285			621			728
Other		365			435			1,736			1,784
Total net sales	$	23,060		$	20,371		$	69,368		$	69,608
Income (loss) from operations:
Rubber Group	$	2,311		$	1,485		$	6,830		$	6,806
Metals Group		(30	)		(289	)		(43	)		(798	)
Subtotal		2,281			1,196			6,787			6,008
Corporate Office		(658	)		(521	)		(2,370	)		(1,798	)
Total income from operations	$	1,623		$	675		$	4,417		$	4,210
Depreciation and amortization (1):
Rubber Group	$	1,410		$	1,599		$	4,388		$	4,870
Metals Group		166			190			516			617
Subtotal		1,576			1,789			4,904			5,487
Corporate Office		8			4			16			17
Total depreciation and amortization	$	1,584		$	1,793		$	4,920		$	5,504
Capital expenditures (2):
Rubber Group	$	431		$	531		$	1,664		$	1,537
Metals Group		176			107			442			458
Subtotal		607			638			2,106			1,995
Corporate Office		7			5			63			5
Total capital expenditures	$	614		$	643		$	2,169		$	2,000

(continued on next page)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

     (continued from previous page)

	September 30,		December 31,
	2007		2006
Assets:
Rubber Group	$	47,013	$	45,056
Metals Group		8,868		7,381
Subtotal		55,881		52,437
Corporate Office		648		484
Discontinued operations		1,445		1,519
Total assets	$	57,974	$	54,440

(1)

Excludes amortization and write-off of deferred financing expenses, which totaled $778,000 and $167,000 during the three-month periods ended September 30, 2007 and 2006, respectively, and $960,000 and $1,136,000 during the nine-month periods ended September 30, 2007 and 2006, respectively. Amortization and write-off of deferred financing expenses is included in interest expense in the consolidated financial statements.

(2)

Capital expenditures during the nine-month period ended September 30, 2007, include $28,000 of equipment purchased under capitalized lease obligations. Capital expenditures during the nine-month period ended September 30, 2006, include $157,000 of equipment acquired with seller financing.

Note 8 — Discontinued Operations

     The results of operations, assets, liabilities, and cash flows of the Company’s former die casting division have been classified as discontinued operations in the consolidated financial statements. In accordance with Financial Accounting Standards Board Emerging Issue Task Force Abstract No. 87-24, “Allocation of Interest to Discontinued Operations” (“EITF 87-24”), the Company has allocated interest to discontinued operations based on the amount and the terms of the debt that will be required to be repaid using management’s estimate of the proceeds to be realized from the possible sale of assets of discontinued operations. No allocation was made to discontinued operations for any other interest or for any Corporate Office expenses. The following table summarizes financial data of discontinued operations for the three-month and nine-month periods ended September 30, 2007 and 2006 (dollar amounts in thousands):

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2007			2006			2007			2006
Net sales	$	—		$	—		$	—		$	—
Income (loss) from operations	$	(11	)	$	(7	)	$	15		$	(52	)
Allocated interest expense		(42	)		(42	)		(126	)		(136	)
Loss before income taxes		(53	)		(49	)		(111	)		(188	)
Income tax provision		—			—			—			—
Loss from discontinued operations	$	(53	)	$	(49	)	$	(111	)	$	(188	)

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

     Some of our statements in this Form 10-Q are “forward-looking statements.” Forward-looking statements usually can be identified by our use of words like “believes,” “expects,” “may,” “will,” “should,” “anticipates,” “estimates,” “projects,” or the negative thereof. They may be used when we discuss strategy, which typically involves risk and uncertainty, and they generally are based upon projections and estimates rather than historical facts and events.

     Forward-looking statements are subject to a number of risks and uncertainties that could cause our actual results or performance to be materially different from the future results or performance expressed in or implied by those statements. Some of those risks and uncertainties are:

• our ability to restructure, refinance, or repay our debt,

• increases and decreases in business awarded to us by our customers,

• unanticipated price reductions for our products as a result of competition,

• changes in the cost of raw materials,

• strength or weakness in the North American automotive market,

• financial difficulties encountered by our customers or suppliers,

• the filing by one or more of our customers or suppliers for protection under the federal Bankruptcy Code,

• changes in the competitive environment,

• labor interruptions at our facilities or at our customers’ or suppliers’ facilities,

• unanticipated operating results,

• changes in economic conditions, and

• changes in interest rates.

     Our results of operations for any particular period are not necessarily indicative of the results to be expected for any succeeding period. The use of forward-looking statements should not be regarded as a representation that any of the projections or estimates expressed in or implied by those forward-looking statements will be realized, and actual results may vary materially. We cannot assure you that any of the forward-looking statements contained herein will prove to be accurate. All forward-looking statements are expressly qualified by the discussion above.

     Because we have substantial borrowings for a company our size and because those borrowings require us to make substantial interest and principal payments, any negative event may have a greater adverse effect upon us than it would have upon a company of the same size that has less debt.

     For additional discussion about risks and uncertainties that may affect our business, please refer to “Risk Factors” in Part I, Item 1A, of our annual report on Form 10-K for the year ended December 31, 2006, and Part II, Item 1A of this Form 10-Q.

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     Unless otherwise indicated, the data set forth below in this Item 2 relates solely to our continuing operations.

Results of Operations — Third Quarter of 2007 Versus Third Quarter of 2006

     The following table sets forth our consolidated operating results for the three-month periods ended September 30, 2007 and 2006, the reconciliation of the loss from continuing operations to earnings before interest, taxes, depreciation, and amortization (“EBITDA”) for those periods, and the reconciliation of EBITDA to net cash used by our operating activities for those periods. EBITDA is not a measure of performance under U.S. generally accepted accounting principles (“GAAP”) and should not be considered in isolation or used as a substitute for income from operations, net income, net cash provided by operating activities, or other operating or cash flow statement data prepared in accordance with GAAP. We have presented EBITDA here and elsewhere in this Form 10-Q because (a) we believe that this measure enhances the ability of our investors to evaluate our ability to satisfy our interest and principal obligations with respect to our outstanding indebtedness, (b) management uses EBITDA as a supplemental measure to evaluate the operating performance of our business and believes that it provides a useful measure for comparing period to period performance among our business units because it does not include period to period fluctuations in taxes, interest costs, costs associated with capital investments, and other non-operating items, and (c) because certain financial covenants in our secured credit agreements are calculated using variations of EBITDA. Nevertheless, EBITDA has material limitations when used as a measurement of performance, including the following:

• EBITDA excludes interest and tax payments; an investor may not see that both represent a reduction in cash available to us; in addition, we may, for legal and economic reasons, be forced to divert funds for other purposes, which may prevent us from satisfying our principal and interest obligations;

• EBITDA excludes depreciation and amortization; although these are both non-cash charges, they represent the devaluation of assets that produce revenue for us, and EBITDA does not reflect the capital expenditures required for the replacement of these assets; and

• EBITDA does not reflect cash provided or used as a result of changes in our working capital.

     To compensate for the shortcomings of EBITDA as a financial measure we rely on our GAAP results and measures. For example, we review gross profit and operating profit in dollars and as a percentage of net sales. In addition, we typically use operating profit expressed as a percentage of net sales to set pricing on the components we sell.

     Our definition of EBITDA may not be the same as the definition of EBITDA used by other companies, including companies in our industry; as the number of differences in the definition of EBITDA increases, the usefulness of EBITDA as a comparative measure decreases. The definition of EBITDA used here is different from the definition of EBITDA used to calculate compliance with the financial covenants in our secured loan agreements.

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Also included in the table are the net cash flows provided or used by our investing activities and financing activities. (Dollar amounts are in thousands.)

	Three Months Ended September 30
	2007					2006
Net sales	$	23,060		100.0	%	$	20,371		100.0	%
Cost of sales		19,750		85.7			18,185		89.3
Gross profit		3,310		14.3			2,186		10.7
Selling and administrative expenses		1,687		7.3			1,511		7.4
Income from operations		1,623		7.0			675		3.3
Interest expense		(3,444	)	(14.9	)		(2,116	)	(10.4	)
Loss before income taxes		(1,821	)	(7.9	)		(1,441	)	(7.1	)
Income tax provision (benefit)		(15	)	(0.1	)		15		0.1
Loss from continuing operations		(1,806	)	(7.8	)		(1,456	)	(7.2	)
Add back:
Depreciation and amortization (1)		1,584		6.9			1,793		8.8
Interest expense		3,444		14.9			2,116		10.4
Income tax provision (benefit)		(15	)	(0.1	)		15		0.1
EBITDA		3,207		13.9			2,468		12.1
Adjustments to reconcile EBITDA to net cash used by operating activities:
Income tax (provision) benefit		15		0.1			(15	)	(0.1	)
Interest expense		(3,444	)	(14.9	)		(2,116	)	(10.4	)
Amortization and write-off of deferred financing expenses included in interest		778		3.3			167		0.8
Net change in operating assets and liabilities		1,728		7.5			(1,024	)	(5.0	)
Net cash provided (used) by operating activities	$	2,284		9.9	%	$	(520	)	(2.6	)%
Net cash used by investing activities	$	(720	)	(3.1	)%	$	(774	)	(3.8	)%
Net cash provided (used) by financing activities	$	(2,013	)	(8.7	)%	$	777		3.8	%

(1) Does not include the amortization and write-off of deferred financing expenses, which totaled $778,000 and $167,000 during the three-month periods ended September 30, 2007 and 2006, respectively, and which is included in interest expense in the consolidated financial statements.

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     Our net sales for the third quarter of 2007 were $23,060,000, compared to net sales of $20,371,000 for the third quarter of 2006, an increase of $2,689,000 or 13.2%. During the third quarter of 2007, net sales of automotive components increased by $1,128,000, or 6.7%, compared to the third quarter of 2006, while net sales of medical components increased by $1,747,000 or 63.6%. Net sales by product line for the three-month periods ended on September 30, 2007 and 2006, are set forth below (dollar amounts in thousands):

	Three Months Ended September 30
	2007				2006
Automotive	$	18,030	78.2	%	$	16,902	83.0	%
Medical		4,496	19.5			2,749	13.5
Industrial		169	0.7			285	1.4
Other		365	1.6			435	2.1
Total net sales	$	23,060	100.00	%	$	20,371	100.0	%

     EBITDA for the third quarter of 2007 was $3,207,000, or 13.9% of net sales, compared to EBITDA of $2,468,000, or 12.1% of net sales, for the third quarter of 2006.

     The discussion that follows sets forth our analysis of the operating results of the Rubber Group, the Metals Group, and the Corporate Office for the three-month periods ended September 30, 2007 and 2006.

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     Rubber Group

     The Rubber Group manufactures tight-tolerance rubber components. The Rubber Group’s primary products are connector seals used in automotive wiring systems, insulators used in both original equipment and aftermarket automotive ignition-wire sets, and molded rubber components used in a variety of medical devices, such as intravenous feeding systems, syringes, and surgical equipment.

     The following table sets forth the operating results of the Rubber Group for the three-month periods ended September 30, 2007 and 2006, and the reconciliation of the Rubber Group’s income from operations to its EBITDA (dollar amounts in thousands):

	Three Months Ended September 30
	2007				2006
Net sales	$	19,375	100.0	%	$	17,540	100.0	%
Cost of sales		16,180	83.5			15,203	86.7
Gross profit		3,195	16.5			2,337	13.3
Selling and administrative expenses		884	4.6			852	4.9
Income from operations		2,311	11.9			1,485	8.5
Add back: depreciation and amortization		1,410	7.3			1,599	9.1
EBITDA	$	3,721	19.2	%	$	3,084	17.6	%

     During the third quarter of 2007, total net sales of the Rubber Group increased by $1,835,000, or 10.5%, compared to the third quarter of 2006. Net sales to medical device manufacturers increased by $1,747,000, or 63.6%, to $4,496,000, net sales to automotive customers increased by $156,000, or 1.1%, to $14,815,000, and all other net sales decreased by $68,000, or 51.5%, to $64,000. The increase in net sales of medical components was primarily due to the sale of components to a medical device manufacturer that began purchasing production parts from us in January of 2007.

     Cost of sales as a percentage of net sales decreased to 83.5% of net sales during the third quarter of 2007, compared to 86.7% of net sales during the third quarter of 2006, primarily due to improved product mix, improved absorption of fixed and partially fixed manufacturing expenses, and lower depreciation and amortization expense.

     Selling and administrative expenses of the Rubber Group expressed as a percentage of net sales decreased to 4.6% of net sales during the third quarter of 2007, compared to 4.9% during the third quarter of 2006, primarily because of improved absorption of fixed and partially fixed selling and administrative expenses.

     During the third quarter of 2007, income from operations totaled $2,311,000, an increase of $826,000, or 55.6%, compared to the third quarter of 2006. EBITDA for the third quarter of 2007 was $3,721,000, or 19.2% of net sales, compared to $3,084,000, or 17.6% of net sales, for the third quarter of 2006.

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     Metals Group

     The Metals Group manufactures machined metal components from aluminum, brass, steel, and stainless steel bars, forgings, and cold-headed blanks. The Metals Group’s sales are primarily to automotive industry customers.

     The following table sets forth the operating results of the Metals Group for the three-month periods ended September 30, 2007 and 2006, and the reconciliation of the Metals Group’s loss from operations to its EBITDA (dollar amounts in thousands):

	Three Months Ended September 30
	2007					2006
Net sales	$	3,685		100.0	%	$	2,831		100.0	%
Cost of sales		3,570		96.9			2,982		105.3
Gross profit (loss)		115		3.1			(151	)	(5.3	)
Selling and administrative expenses		145		3.9			138		4.9
Loss from operations		(30	)	(0.8	)		(289	)	(10.2	)
Add back: depreciation and amortization		166		4.5			190		6.7
EBITDA	$	136		3.7	%	$	(99	)	(3.5	)%

     During the third quarter of 2007, net sales of the Metals Group increased by $854,000, or 30.2%, compared to the third quarter of 2006, primarily as a result of sales to three new automotive customers and increased net sales to existing customers.

     Cost of sales as a percentage of net sales decreased to 96.9% during the third quarter of 2007 from 105.3% during the third quarter of 2006, primarily because of (1) improved production efficiencies, (2) lower depreciation expense, and (3) reduced material costs as a percentage of net sales.

     Selling and administrative expenses of the Metals Group increased from $138,000 during the third quarter of 2006 to $145,000 during the third quarter of 2007.

     During the third quarter of 2007, the loss from operations was $30,000, compared to a loss from operations of $289,000 during the third quarter of 2006. EBITDA for the third quarter of 2007 was positive $136,000, compared to negative $99,000 for the third quarter of 2006.

     Corporate Office

     Corporate Office expenses, which are not included in the operating results of the Rubber Group or the Metals Group, represent administrative expenses incurred primarily at our New York City and Cleveland offices. Corporate Office expenses are consolidated with the selling and administrative expenses of the Rubber Group and the Metals Group in our consolidated financial statements.

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     The following table sets forth the operating results of the Corporate Office for the three-month periods ended September 30, 2007 and 2006, and the reconciliation of the Corporate Office’s loss from operations to its EBITDA (dollar amounts in thousands):

	Three Months Ended
	September 30
	2007			2006
Loss from operations	$	(658	)	$	(521	)
Add back: depreciation and amortization (1)		8			4
EBITDA	$	(650	)	$	(517	)

(1) Excludes the amortization and write-off of deferred financing expenses, which totaled $778,000 and $167,000 during the third quarters of 2007 and 2006, respectively, which is included in interest expense in the consolidated financial statements.

     During the third quarter of 2007, corporate administrative expenses increased by $137,000, compared to the third quarter of 2006, primarily because of a reduction in an estimated accrual in the amount of $93,000 during the third quarter of 2006.

     Interest Expense

     During the third quarters of 2007 and 2006, interest expense (excluding interest expense of $42,000 and $42,000, respectively, allocated to discontinued operations) totaled $3,444,000 and $2,116,000, respectively, which included the amortization and write-off of deferred financing expenses of $778,000 and $167,000, respectively. Excluding deferred financing expenses, interest expense during the third quarter of 2007 increased compared to the third quarter of 2006 because:

1.	We incurred $195,000 of default interest expense on our secured debt;
2.	We incurred $509,000 of additional interest expense on our Senior Subordinated Notes because the interest rate on the notes increased from 12% to 16% effective March 9, 2007, and because we paid interest on the interest payments that we failed to make in 2006 and 2007; and
3.	The average amount of debt outstanding increased to $73,404,000 in the third quarter of 2007, compared to $71,521,000 in the third quarter of 2006.

     Income Tax Provision (Benefit)

     At September 30, 2007, and December 31, 2006, our net deferred tax assets were fully reserved by a valuation allowance. The income tax benefit recorded during the three-month period ended September 30, 2007, consisted of estimated state income taxes. The income tax provision during the three-month period ended September 30, 2006, consisted of estimated state income taxes.

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Results of Operations — First Nine Months of 2007 Versus First Nine Months of 2006

     The following table sets forth our consolidated operating results for the nine-month periods ended September 30, 2007 and 2006, the reconciliation of the loss from continuing operations to earnings before interest, taxes, depreciation, and amortization (“EBITDA”) for those periods, and the reconciliation of EBITDA to net cash provided or used by our operating activities for those periods. EBITDA is not a measure of performance under U.S. generally accepted accounting principles (“GAAP”) and should not be considered in isolation or used as a substitute for income from operations, net income, net cash provided by operating activities, or other operating or cash flow statement data prepared in accordance with GAAP. We have presented EBITDA here and elsewhere in this Form 10-Q because (a) we believe that this measure enhances the ability of our investors to evaluate our ability to satisfy our interest and principal obligations with respect to our outstanding indebtedness, (b) management uses EBITDA as a supplemental measure to evaluate the operating performance of our business and believes that it provides a useful measure for comparing period to period performance among our business units because it does not include period to period fluctuations in taxes, interest costs, costs associated with capital investments, and other non-operating items, and (c) because certain financial covenants in our secured credit agreements are calculated using variations of EBITDA. Nevertheless, EBITDA has material limitations when used as a measurement of performance including the following:

• EBITDA excludes interest and tax payments; an investor may not see that both represent a reduction in cash available to us; in addition, we may, for legal and economic reasons, be forced to divert funds for other purposes, which may prevent us from satisfying our principal and interest obligations;

• EBITDA excludes depreciation and amortization; although these are both non-cash charges, they represent the devaluation of assets that produce revenue for us, and EBITDA does not reflect the capital expenditures required for the replacement of these assets; and

• EBITDA does not reflect cash provided or used as a result of changes in our working capital.

     To compensate for the shortcomings of EBITDA as a financial measure we rely on our GAAP results and measures. For example, we review gross profit and operating profit in dollars and as a percentage of net sales. In addition, we typically use operating profit expressed as a percentage of net sales to set pricing on the components we sell.

     Our definition of EBITDA may not be the same definition of EBITDA as the definition of EBITDA used by other companies, including companies in our industry; as the number of differences in the definition of EBITDA increases, the usefulness of EBITDA as a comparative measure decreases. The definition of EBITDA used here is different from the definition of EBITDA used to calculate compliance with the financial covenants in our secured loan agreements.

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Also included in the table are the net cash flows provided or used by our investing activities and financing activities. (Dollar amounts are in thousands.)

	Nine Months Ended September 30
	2007					2006
Net sales	$	69,368		100.0	%	$	69,608		100.0	%
Cost of sales		59,429		85.7			60,272		86.6
Gross profit		9,939		14.3			9,336		13.4
Selling and administrative expenses		5,522		7.9			5,126		7.4
Income from operations		4,417		6.4			4,210		6.1
Interest expense		(8,428	)	(12.2	)		(6,984	)	(10.0	)
Loss before income taxes		(4,011	)	(5.8	)		(2,774	)	(3.9	)
Income tax provision		15		—			45		0.1
Loss from continuing operations		(4,026	)	(5.8	)		(2,819	)	(4.0	)
Add back:
Depreciation and amortization (1)		4,920		7.1			5,504		7.9
Interest expense		8,428		12.2			6,984		10.0
Income tax provision		15		—			45		0.1
EBITDA		9,337		13.5			9,714		14.0
Adjustments to reconcile EBITDA to net cash provided (used) by operating activities:
Income tax provision		(15	)	—			(45	)	(0.1	)
Interest expense		(8,428	)	(12.2	)		(6,984	)	(10.0	)
Amortization and write-off of deferred financing expenses included in interest		960		1.4			1,136		1.6
Net change in operating assets and liabilities		(1,023	)	(1.5	)		(4,317	)	(6.2	)
Net cash provided (used) by operating activities	$	831		1.2	%	$	(496	)	(0.7)	%
Net cash used by investing activities	$	(2,317	)	(3.3)	%	$	(1,970	)	(2.8)	%
Net cash provided by financing activities	$	1,918		2.8	%	$	2,660		3.8	%

(1) Does not include the amortization and write-off of deferred financing expenses, which totaled $960,000 and $1,136,000 during the nine-month periods ended September 30, 2007 and 2006, respectively, and which is included in interest expense in the consolidated financial statements.

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     Our net sales for the first nine months of 2007 were $69,368,000, compared to net sales of $69,608,000 for the first nine months of 2006, a decrease of $240,000 or 0.3%. During the first nine months of 2007, net sales of automotive components decreased by $4,008,000, or 6.8%, compared to the first nine months of 2006, while net sales of medical components increased by $3,923,000, or 46.6%. Net sales by product line for the nine-month periods ended on September 30, 2007 and 2006, are set forth below (dollar amounts in thousands):

	Nine Months Ended September 30
	2007				2006
Automotive	$	54,670	78.8	%	$	58,678	84.3	%
Medical		12,341	17.8			8,418	12.1
Industrial		621	0.9			728	1.0
Other		1,736	2.5			1,784	2.6
Total net sales	$	69,368	100.0	%	$	69,608	100.0	%

     EBITDA for the first nine months of 2007 was $9,337,000, or 13.5% of net sales, compared to EBITDA of $9,714,000, or 14.0% of net sales, for the first nine months of 2006. Administrative expenses for the first nine months of 2007, included $558,000 of expenses incurred in connection with our efforts to restructure, refinance, or repay our secured debt and Senior Subordinated Notes as more fully discussed in the section titled “Liquidity” in this Part I, Item 2.

     The discussion that follows sets forth our analysis of the operating results of the Rubber Group, the Metals Group, and the Corporate Office for the nine-month periods ended September 30, 2007 and 2006.

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     Rubber Group

     The Rubber Group manufactures tight-tolerance rubber components. The Rubber Group’s primary products are connector seals used in automotive wiring systems, insulators used in both original equipment and aftermarket automotive ignition-wire sets, and molded rubber components used in a variety of medical devices, such as intravenous feeding systems, syringes, and surgical equipment.

     The following table sets forth the operating results of the Rubber Group for the nine-month periods ended September 30, 2007 and 2006, and the reconciliation of the Rubber Group’s income from operations to its EBITDA (dollar amounts in thousands):

	Nine Months Ended September 30
	2007				2006
Net sales	$	58,764	100.0	%	$	60,319	100.0	%
Cost of sales		49,189	83.7			50,709	84.1
Gross profit		9,575	16.3			9,610	15.9
Selling and administrative expenses		2,745	4.7			2,804	4.6
Income from operations		6,830	11.6			6,806	11.3
Add back: depreciation and amortization		4,388	7.5			4,870	8.1
EBITDA	$	11,218	19.1	%	$	11,676	19.4	%

     During the first nine months of 2007, total net sales of the Rubber Group decreased by $1,555,000, or 2.6%, compared to the first nine months of 2006. Net sales to automotive customers decreased by $5,484,000 or 10.7%, to $45,639,000, net sales to medical device manufacturers increased by $3,923,000, or 46.6%, to $12,341,000, and all other net sales increased by $6,000, or 0.8%, to $784,000.

     The decrease in net sales to automotive customers was primarily due to (1) decreased unit sales of connector seals for automotive wire harnesses and components for automotive computer control modules, which we believe resulted primarily from production cutbacks by Detroit-based automakers and the insourcing of certain components, offset, in part, by the sale of new sealing components, (2) reduced unit sales to original equipment manufacturers of insulators for automotive ignition-wire sets due to production cutbacks by Detroit-based automakers and the obsolescence of certain parts, offset, in part, by the roll out of new automotive ignition-wire insulators, (3) reduced unit sales to manufacturers of aftermarket insulators for automotive ignition-wire sets due to a slowdown in demand at retail automotive aftermarket outlets, and (4) price reductions on certain components. The increase in net sales of medical components was primarily due to the sale of components to a medical device manufacturer that began purchasing production parts from us in January of 2007.

     Cost of sales as a percentage of net sales decreased to 83.7% of net sales during the first nine months of 2007, compared to 84.1% of net sales during the first nine months of 2006, primarily due to improved product mix and lower depreciation and amortization expense, offset, in part, by the

- 23 -

underabsorption of fixed or partially fixed manufacturing overhead during a period of reduced sales volume.

     Selling and administrative expenses of the Rubber Group expressed as a percentage of net sales increased to 4.7% during the first nine months of 2007, compared to 4.6% during the first nine months of 2006.

     During the first nine months of 2007, income from operations totaled $6,830,000, an increase of $24,000, or 0.4%, compared to the first nine months of 2006. EBITDA for the first nine months of 2007 was $11,218,000, or 19.1% of net sales, compared to $11,676,000, or 19.4% of net sales, for the first nine months of 2006.

     Metals Group

     The Metals Group manufactures machined metal components from aluminum, brass, steel, and stainless steel bars, forgings, and cold-headed blanks. The Metals Group’s sales are primarily to automotive industry customers.

     The following table sets forth the operating results of the Metals Group for the nine-month periods ended September 30, 2007 and 2006, and the reconciliation of the Metals Group’s loss from operations to its EBITDA (dollar amounts in thousands):

	Nine Months Ended September 30
	2007					2006
Net sales	$	10,604		100.0	%	$	9,289		100.0	%
Cost of sales		10,240		96.6			9,563		102.9
Gross profit (loss)		364		3.4			(274	)	(2.9	)
Selling and administrative expenses		407		3.8			524		5.6
Loss from operations		(43	)	(0.4	)		(798	)	(8.6	)
Add back: depreciation and amortization		516		4.9			617		6.6
EBITDA	$	473		4.5	%	$	(181	)	(2.0)	%

     During the first nine months of 2007, net sales of the Metals Group increased by $1,315,000, or 14.2%, compared to the first nine months of 2006, primarily as a result of sales to three new automotive customers, offset, in part, by reduced sales of components to existing customers.

     Cost of sales as a percentage of net sales decreased to 96.6% during the first nine months of 2007 from 102.9% during the first nine months of 2006, primarily because of (1) improved production efficiencies, (2) lower depreciation expense, and (3) reduced material costs as a percentage of net sales.

     During the first nine months of 2007, selling and administrative expenses decreased to $407,000 from $524,000 during the first nine of 2006, primarily because of a reduction in salaried headcount.

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     During the first nine months of 2007, the loss from operations was $43,000, compared to a loss from operations of $798,000 during the first nine months of 2006. EBITDA for the first nine months of 2007 was $473,000, compared to negative $181,000 for the first nine months of 2006.

     Corporate Office

     Corporate Office expenses, which are not included in the operating results of the Rubber Group or the Metals Group, represent administrative expenses incurred primarily at our New York City and Cleveland offices. Corporate Office expenses are consolidated with the selling and administrative expenses of the Rubber Group and the Metals Group in our consolidated financial statements.

     The following table sets forth the operating results of the Corporate Office for the nine-month periods ended September 30, 2007 and 2006, and the reconciliation of the Corporate Office’s loss from operations to its EBITDA (dollar amounts in thousands):

	Nine Months Ended
	September 30
	2007			2006
Loss from operations	$	(2,370	)	$	(1,798	)
Add back: depreciation and amortization (1)		16			17
EBITDA	$	(2,354	)	$	(1,781	)

(1) Excludes the amortization and write-off of deferred financing expenses, which totaled $960,000 and $1,136,000 during the nine-month periods ended September 30, 2007 and 2006, respectively, which is included in interest expense in the consolidated financial statements.

     During the first nine months of 2007, corporate administrative expenses increased by $572,000, compared to the first nine months of 2006, primarily because we incurred expenses of $558,000 in connection with our efforts to refinance, restructure, or repay our secured debt and Senior Subordinated Notes as more fully discussed in the section titled “Liquidity” in this Part I, Item 2.

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     Interest Expense

     During the first nine months of 2007 and 2006, interest expense (excluding interest expense of $126,000 and $136,000, respectively, allocated to discontinued operations) totaled $8,428,000 and $6,984,000, respectively, which included the amortization and write-off of deferred financing expenses of $960,000 and $1,136,000, respectively. Excluding deferred financing expenses, interest expense during the first nine months of 2007 increased compared to the first nine months of 2006 because:

1.	We incurred $514,000 of default interest expense on our secured debt;
2.	We incurred $1,105,000 of additional interest expense on our Senior Subordinated Notes because the interest rate on the notes increased from 12% to 16% effective March 9, 2007, and because we paid interest on the interest payments that we failed to make in 2006 and 2007; and
3.	The average amount of debt outstanding increased to $72,912,000 in the first nine months of 2007, compared to $69,411,000 in the first nine months of 2006.

     Income Tax Provision (Benefit)

     At September 30, 2007, and December 31, 2006, our net deferred tax assets were fully reserved by a valuation allowance. The income tax provisions recorded during the nine-month periods ended September 30, 2007 and 2006, consisted of estimated state income taxes.

Liquidity and Capital Resources

     Operating Activities

     During the first nine months of 2007, operating activities of our continuing operations provided net cash of $831,000. Accounts receivable increased by $4,861,000 during the first nine months of 2007, primarily because our net sales during August and September of 2007 were substantially higher than our net sales during November and December of 2006. Inventories increased by $777,000, or 8.8%, primarily due to increased production levels. Accrued expenses increased by $493,000, primarily as a result of the timing of certain payments and increased accruals for workers’ compensation. Accrued interest expense increased by $4,244,000 because of additional accruals of interest on our Senior Subordinated Notes and Junior Subordinated Notes.

     Investing Activities

     During the first nine months of 2007, our investing activities used net cash of $2,317,000. Capital expenditures attributable to the Rubber Group, the Metals Group, and the Corporate Office totaled $1,664,000, $442,000, and $63,000, respectively, primarily for the purchase of equipment. Capital expenditures for the Rubber Group included $28,000 of equipment purchased under capitalized lease obligations. Capital expenditures for the Rubber Group, the Metals Group, and the Corporate Office are currently projected to total $2,189,000, $557,000, and $70,000, respectively, for the year ending December 31, 2007.

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     Financing Activities

     During the first nine months of 2007, our financing activities provided net cash of $1,918,000 due to additional borrowings. We used $2,424,000 of cash to make scheduled principal payments on our equipment and real estate term loans, $63,000 of cash to repay other debt, and $960,000 of cash to fund capitalized financing expenses that were incurred in connection with our efforts to restructure, refinance, or repay our secured debt and our Senior Subordinated Notes. Capitalized financing expenses incurred during 2007 are being amortized over the remaining terms of the respective forbearance agreements. The forbearance agreements are discussed in more detail below.

     Liquidity

     During the second half of 2006, we experienced a significant decrease in sales of automotive components. We believe that this reduction was primarily a result of production cutbacks by the Detroit-based automakers and resultant production cutbacks and inventory adjustments by our customers, who are primarily tier-one suppliers to automobile manufacturers. Although we reduced expenses in an effort to offset the impact of the lower sales, our operating profit and cash flow during the second half of 2006 were adversely affected, as was the availability under our revolving line of credit.

     We did not make the scheduled interest payments due on our Senior Subordinated Notes on November 1, 2006, and February 1, May 1, August 1, and November 1, 2007. On May 25, 2007, we entered into a six-month forbearance agreement with certain holders of the Senior Subordinated Notes, holding $25,428,000 aggregate principal amount, or 74.4% of the Senior Subordinated Notes outstanding. Effective September 24, 2007, the termination date of this forbearance agreement was extended to January 24, 2008. As long as the forbearance agreement is in effect, we will not be required to make interest payments on the Senior Subordinated Notes, and the forbearing noteholders may not take any action to collect any past due interest payments. An additional $7,772,000 aggregate principal amount, or 22.7% of the Senior Subordinated Notes outstanding, is held by affiliates of ours or their relatives. We agreed to raise the interest rate on the Senior Subordinated Notes from 12% to 16% for the period from March 9, 2007, through the end of the forbearance period. As of September 30, 2007, the accrued and unpaid interest on our Senior Subordinated Notes totaled $5,911,000.

     The failure to make the scheduled interest payments on the Senior Subordinated Notes caused a cross-default under the agreements governing our secured debt. Additionally, we were not in compliance with a financial covenant related to fixed charge coverage on February 28, March 31, and April 30, 2007, or with a financial covenant related to leverage on March 31, 2007. Effective May 25, 2007, we entered into a 120-day forbearance agreement with the secured lenders. Effective September 24, 2007, the termination date of this forbearance agreement was extended to November 26, 2007. The forbearance agreement provides that the secured lenders will take no action, during the forbearance period, to accelerate or collect their loans as a result of any existing default or cross-default. The forbearance agreement modifies certain of the financial covenants effective March 31, 2007, through the end of the forbearance period. The forbearance period can be extended by 30 days or 60 days in certain circumstances. We are in compliance with all financial covenants, as modified. We have remained current on all principal and interest payments owed to the secured lenders.

     During the forbearance period, we are pursuing all available strategic alternatives to satisfy our outstanding indebtedness, including the refinancing of our indebtedness and the sale of our Rubber Group. We have retained W. Y. Campbell and Company to assist us in these efforts.

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     The financial covenants contained in our revolving line of credit and our secured term loans as revised by the terms of the forbearance agreement with our secured lenders are as set forth below. At the end of the forbearance period the financial covenants will revert back to those in effect before the forbearance agreement became effective. For the purpose of determining compliance with the covenants set forth below certain expenses are excluded from the determination of EBITDA. Please refer to the financing documents for definitions of capitalized terms.

1.	Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio is calculated by dividing consolidated EBITDA, less Unfinanced Capital Expenditures, by consolidated Fixed Charges, and is required to be not less than 0.75 to 1.0 for the five-, six-, and seven-month periods ending July 31, August 31 and September 30, 2007, respectively, and not less than 0.85 to 1.0 for each period commencing March 1, 2007, and ending on the last day of each month following September 30, 2007, until the forbearance period terminates. At September 30, 2007, our Fixed Charge Coverage Ratio was 1.36 to 1.00.
2.	Leverage Ratio. The Leverage Ratio is calculated by dividing Senior Debt by consolidated EBITDA and is required to be not more than 3.75 to 1.0 for the five-, six-, and seven-month periods ending July 31, August 31 and September 30, 2007, respectively, and not more than 3.5 to 1.0 for each period commencing March 1, 2007, and ending on the last day of each month following September 30, 2007, until the forbearance period terminates. At September 30, 2007, our Leverage Ratio was 2.50 to 1.00.
3.	Minimum Revenue. Revenue is required to be not less than specified amounts on a cumulative basis starting on March 1, 2007, through the last day of each month from May 2007 through the end of the forbearance period. At September 30, 2007, our cumulative revenue exceeded the minimum revenue requirement of $46,171,000 by $8,668,000.
4.	Minimum EBITDA. EBITDA is required to be not less than specified amounts on a cumulative basis starting on March 1, 2007, through the last day of each month from May 2007 through the end of the forbearance period. At September 30, 2007, our cumulative EBITDA exceeded the minimum cumulative EBITDA requirement of $6,199,000 by $1,892,000.

     Although there can be no assurance, we currently believe that, during the forbearance period, we will be able to restructure, refinance, or repay our secured debt and Senior Subordinated Notes and thereby remedy the defaults currently existing on the secured debt and Senior Subordinated Notes. If we are unable to restructure, refinance, or repay our secured debt and Senior Subordinated Notes during the forbearance periods and we are unable to extend the forbearance periods, we likely would seek protection under chapter 11 of the federal Bankruptcy Code in order to permit us to continue to operate our business in an orderly fashion until a restructuring and/or refinancing of our indebtedness could be consummated.

     Our consolidated financial statements have been presented on a “going concern basis,” as such term is used in U.S. generally accepted accounting principles. A going concern basis contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our ability to restructure, refinance, or repay our secured debt and Senior Subordinated Notes is subject to risks and uncertainties. The consolidated financial statements do not include any adjustments to the amounts or classification of assets or liabilities to reflect this uncertainty.

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     During the third quarter of 2007, consolidated EBITDA totaled $3,207,000. The Rubber Group reported EBITDA of $3,721,000, or 19.2% of net sales, the Metals Group reported EBITDA of $136,000, or 3.7% of net sales, and the Corporate Office recorded negative EBITDA of $650,000.

     During the first nine months of 2007, consolidated EBITDA totaled $9,337,000. The Rubber Group reported EBITDA of $11,218,000, or 19.1% of net sales, the Metals Group reported EBITDA of $473,000, or 4.5% of net sales, and the Corporate Office recorded negative EBITDA of $2,354,000, which included $558,000 of expenses incurred in connection with our efforts to restructure, refinance, or repay our secured debt and Senior Subordinated Notes.

     At September 30, 2007, our aggregate indebtedness was $77,655,000 (which included $4,640,000 of past due interest payments), compared to $71,132,000 at December 31, 2006 (which included $1,025,000 of past due interest payments).

     At September 30, 2007, we had outstanding loans of $13,734,000 and reimbursement obligations with respect to letters of credit of $907,000 under our revolving line of credit. At September 30, 2007, unused availability under our revolving line of credit and cash on hand totaled $1,739,000. Under the revolving line of credit, loans and reimbursement obligations with respect to letters of credit are limited to the lesser of $17,500,000 or an amount equal to (1) 85% of eligible accounts receivable, plus (2) the lesser of 65% of eligible inventories or 51% of eligible accounts receivable, minus (3) $500,000. Loans under the revolving line of credit bear interest at the London Interbank Offered Rate (“LIBOR”) plus 4.75%. At September 30, 2007, the interest rate on loans outstanding under the revolving line of credit was 10.28%. Our obligations under the revolving line of credit are secured by a first priority lien on substantially all of our assets other than real estate and a second priority lien on our real estate.

     At September 30, 2007, the outstanding balance of the equipment term loan was $9,792,000. The equipment term loan is payable in monthly principal installments of $208,000 through May 1, 2009, with the unpaid balance payable on May 15, 2009. Interest on the equipment term loan is payable monthly at LIBOR, plus 6.5%. At September 30, 2007, the interest rate on the equipment term loan was 12.03%. The equipment term loan is secured by a first priority lien on substantially all of our assets other than real estate and a second priority lien on our real estate.

     At September 30, 2007, the outstanding balance of the real estate term loan was $14,205,000. The real estate term loan is payable in monthly principal installments of $61,000 through May 1, 2009, with the unpaid balance payable on May 15, 2009. If the balance outstanding on the real estate term loan is not reduced to $11,022,000 or less by December 31, 2007 (which would require principal prepayments aggregating $3,000,000 in addition to the scheduled monthly principal payments), interest payments on our subordinated debt may only be made if the unused availability under our revolving line of credit exceeds an amount equal to $3,000,000 minus any principal prepayments made to date. At September 30, 2007, interest on the real estate term loan was payable monthly at LIBOR plus 6.5% on $10,205,000 of the loan and the prime rate plus 8% on $4,000,000 of the loan. At September 30, 2007, the weighted average interest rate on the real estate term loan was 13.16%. Principal payments made on the real estate term loan are allocable first to the portion of the loan that bears interest at LIBOR plus 6.5% and then to the portion of the loan that bears interest at the prime rate plus 8%. The real estate term loan is secured by a first priority lien on our real estate and a second priority lien on substantially all of our other assets.

     In addition to the financial covenants discussed above, the agreements that govern our revolving line of credit and secured term loans contain covenants that (1) limit our capital expenditures to $5,500,000 and $6,000,000 per annum during the years ending December 31, 2007 and 2008, respectively, (2) limit the amount of new secured financing we can incur for the purchase of plant and

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equipment to $2,500,000 during the term of the secured financing, and (3) place certain other restrictions on our business and operations, including limitations on the sale of all or substantially all of our assets, the repurchase of common stock, the redemption of preferred stock, and the payment of cash dividends.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We do not invest in or trade market risk sensitive instruments. We also do not have any foreign operations or any significant amount of foreign sales and, therefore, we believe that our exposure to foreign currency exchange rate risk is insignificant.

     At September 30, 2007, we had outstanding $37,731,000 of floating-rate debt at interest rates equal to either LIBOR plus 4.75%, LIBOR plus 6.5%, or the prime rate plus 8%.

     At September 30, 2007, we had outstanding $35,284,000 of fixed-rate debt with a weighted-average interest rate of 15.7%.

     In the absence of a restructuring, refinancing, or repayment of our secured debt and Senior Subordinated Notes, and excluding the amortization of capitalized financing expenses, we currently estimate that our monthly interest expense during the fourth quarter of 2007 will be approximately $891,000 and that a one percentage point increase or decrease in short-term interest rates would increase or decrease our monthly interest expense by approximately $30,000.

     For further information about our indebtedness, please refer to Note 4, “Debt,” to our consolidated financial statements in Part I, Item 1.

Item 4T. CONTROLS AND PROCEDURES

     Our Chairman of the Board, President, and Chief Financial Officer, with the participation of the management of its operating divisions, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2007. Based on that evaluation, our principal executive officers and our principal financial officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports the Company files or submits under the Securities Exchange Act of 1934, as amended, was accumulated and communicated to the Company’s management, including its Chairman of the Board, President, and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

     They also reviewed our internal controls and determined that there have been no changes in our internal controls or in other factors identified in connection with this evaluation that have materially affected, or are reasonably likely to materially affect, our internal controls.

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PART II. OTHER INFORMATION

Item 1A. RISK FACTORS

     The first risk factor in our Annual Report on Form 10-K for the period ended December 31, 2006, is replaced in its entirety by the following:

The Company Must Refinance its Secured Debt and its Senior Subordinated Notes or Undertake a Sale of the Rubber Group or of the Company.

     We are currently in default of our secured debt and our Senior Subordinated Notes and have entered into forbearance agreements with the secured lenders and holders of 74.4% of the Senior Subordinated Notes outstanding. The forbearance agreements are intended to allow us to attempt to remedy, in an orderly fashion, the defaults and cross-defaults that now exist on our secured debt and Senior Subordinated Notes. During the concurrent forbearance periods, we are pursuing all available strategic alternatives to satisfy our outstanding debt, including the refinancing of our indebtedness and the sale of our Rubber Group. We have retained W.Y. Campbell and Company to assist us in these efforts. If we are unable to consummate any of these measures in the forbearance periods and the forbearance periods are not extended, we may seek protection under chapter 11 of the federal Bankruptcy Code in order to permit us to continue to operate our business in an orderly fashion until a restructuring of our secured debt and Senior Subordinated Notes can be consummated. Our consolidated financial statements have been presented on a “going concern basis,” as such term is used in U.S. generally accepted accounting principles. A going concern basis contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our ability to restructure, refinance, or repay our secured debt and Senior Subordinated Notes is subject to risks and uncertainties. The consolidated financial statements do not include any adjustments to the amounts or classification of assets or liabilities to reflect theses risks and uncertainties.

Item 3. DEFAULTS UPON SENIOR SECURITIES

     We did not make the scheduled interest payments due on our Senior Subordinated Notes on November 1, 2006, and February 1, May 1, August 1, and November 1, 2007. On May 25, 2007, we entered into a six-month forbearance agreement with certain holders of the Senior Subordinated Notes, holding $25,428,000 aggregate principal amount, or 74.4% of the Senior Subordinated Notes outstanding. Effective September 24, 2007, the Termination Date of their Forbearance Agreement was extended to January 24, 2008. As long as the forbearance agreement is in effect, we will not be required to make interest payments on the Senior Subordinated Notes, and the forbearing noteholders may not take any action to collect any past due interest payments. An additional $7,772,000 aggregate principal amount, or 22.7% of the Senior Subordinated Notes outstanding, is held by affiliates of ours or their relatives. We agreed to raise the interest rate on the Senior Subordinated Notes from 12% to 16% for the period from March 9, 2007, through the end of the forbearance period. As of September 30, 2007, the accrued and unpaid interest on our Senior Subordinated Notes totaled $5,911,000.

     The failure to make the scheduled interest payments on the Senior Subordinated Notes caused a cross-default under the agreements governing our secured debt. Additionally, we were not in compliance with a financial covenant related to fixed charge coverage on February 28, March 31, and April 30, 2007, or with a financial covenant related to leverage on March 31, 2007. Effective May 25, 2007, we entered into a 120-day forbearance agreement with the secured lenders. Effective September 24, 2007, the termination date of this forbearance agreement was extended to November 26, 2007. The forbearance agreement provides that the secured lenders will take no action, during the forbearance period, to

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accelerate or collect their loans as a result of any existing default or cross-default. The forbearance agreement modifies certain of the financial covenants effective March 31, 2007, through the end of the forbearance period. The 183-day forbearance period can be extended by 30 days or 60 days in certain circumstances. We are in compliance with all financial covenants, as modified. We have remained current on all principal and interest payments owed to the secured lenders.

     We did not make scheduled redemptions in the aggregate amount of $630,000 during the years 2000 through 2006 on our Series B Preferred Stock, and we did not make the scheduled dividend payments on the Series B Preferred Stock on December 15, 2006, and March 15, June 15, and September 15, 2007, in the aggregate amount of $26,400.

Item 6. EXHIBITS

     The following exhibits are filed herewith:

10-1	Second Amendment dated September 24, 2007, to the Forbearance Agreement dated as of May 18, 2007, by and among Lexington Precision Corporation, Lexington Rubber Group, Inc., CapitalSource Finance LLC, Webster Business Credit Corporation, CSE Mortgage LLC and DMD Special Situation Funding, LLC.
10-2	First Amendment dated September 24, 2007, to the Forbearance Agreement dated as of May 25, 2007, by and among Lexington Precision Corporation and the holders of the 12% Senior Subordinated Notes due August 1, 2009, signatory thereto.
10-3	Restricted Stock Award Agreement, dated as of October 9, 2007, between Lexington Precision Corporation (the “Company”) and William B. Conner, a current member of the Company’s Board of Directors.
10-4	Restricted Stock Award Agreement, dated as of October 9, 2007, between Lexington Precision Corporation (the “Company”) and Kenneth I. Greenstein, a current member of the Company’s Board of Directors.
10-5	Restricted Stock Award Agreement, dated as of October 9, 2007, between Lexington Precision Corporation (the “Company”) and Joseph A. Pardo, a current member of the Company’s Board of Directors.
10-6	Restricted Stock Award Agreement, dated as of October 9, 2007, between Lexington Precision Corporation (the “Company”) and Elizabeth H. Ruml, a current member of the Company’s Board of Directors.
31-1	Rule 13(a) – 14(a) / 15(d) – 14(a) Certification of Michael A. Lubin, Chairman of the Board and Co-Principal Executive Officer of the registrant.
31-2	Rule 13(a) – 14(a) / 15(d) – 14(a) Certification of Warren Delano, President and Co-Principal Executive Officer of the registrant.
31-3	Rule 13(a) – 14(a) / 15(d) – 14(a) Certification of Dennis J. Welhouse, Chief Financial Officer and Principal Financial Officer of the registrant.

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32-1	Certification of Michael A. Lubin, Chairman of the Board and Co-Principal Executive Officer of the registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32-2	Certification of Warren Delano, President and Co-Principal Executive Officer of the registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32-3	Certification of Dennis J. Welhouse, Chief Financial Officer and Principal Financial Officer of the registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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LEXINGTON PRECISION CORPORATION
FORM 10-Q
September 30, 2007

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LEXINGTON PRECISION CORPORATION (Registrant)
November 13, 2007		By:	/s/ Michael A. Lubin
Date			Michael A. Lubin       Chairman of the Board
November 13, 2007		By:	/s/ Warren Delano
Date			Warren Delano       President
November 13, 2007		By:	/s/ Dennis J. Welhouse
Date			Dennis J. Welhouse       Senior Vice President and         Chief Financial Officer

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EX-10.1

Exhibit 10-1

SECOND AMENDMENT TO FORBEARANCE AGREEMENT

     This SECOND AMENDMENT to that certain Agreement made as of May 18, 2007 (the “Agreement”) is executed October 17, 2007, but upon the Effective Date is deemed effective as of September 24, 2007 (the “Second Amendment”) by and between Lexington Precision Corporation (“LPC”) and Lexington Rubber Group, Inc. (“LRG”) (collectively, the “Borrowers”), as borrowers under that certain Credit and Security Agreement with Borrower dated May 31, 2006 (as amended to date and as may be amended, restated or otherwise modified from time to time, the “Credit Agreement”), and CapitalSource Finance LLC (“CapitalSource”), as a lender, as collateral agent and administrative agent for itself and other lenders under the Credit Agreement (CapitalSource, when acting in such capacity, is herein called the “Revolver Agent”), and as Co-Documentation Agent, and Webster Business Credit Corporation (“Webster”) as a lender (CapitalSource and Webster, as lenders, collectively the “Revolver Lenders”) and as Co-Documentation Agent (CapitalSource and Webster in such capacity, collectively the “Co-Documentation Agents”), and by and among Borrowers as borrowers under that certain Loan and Security Agreement dated May 31, 2006 (as amended to date and as may be amended, restated or otherwise modified from time to time, the “Loan Agreement”) and CSE Mortgage LLC (“CSE”), as a lender and as collateral agent for itself and each other lender under the Loan Agreement (CSE, when acting in such capacity, is herein called the “Loan Agent”) (Revolver Agent and Loan Agent, collectively, the “Agents”), and DMD Special Situations Funding LLC, (“DMD”), as a lender under the Loan Agreement (CSE and DMD collectively, the “Mortgage Loan Lenders”) (Revolver Lenders and Mortgage Loan Lenders collectively, the “Lenders”; those Lenders agreeing to this Second Amendment the “Forbearing Lenders”).

RECITALS:

     A. Revolver Lenders have loaned money and made credit available to Borrowers in accordance with the terms of the Credit Agreement. Mortgage Loan Lenders have loaned money and made credit available to Borrowers in accordance with the terms of the Loan Agreement.

     B. Borrowers and CapitalSource, Webster, CSE and DMD in their various capacities have entered into that certain First Amendment and Default Waiver Agreement dated as of November 20, 2006 (the “Former Forbearance Agreement”).

     C. Borrowers and CapitalSource, Webster, CSE and DMD in their various capacities are parties to the Agreement, as amended by that certain First Amendment to Forbearance Agreement as of July 20, 2007 (the “First Amendment”). Collectively the Credit Agreement, Loan Agreement, Former Forbearance Agreement and Agreement, along with the First Amendment and this Second Amendment, may be referred to herein as the “Documents.”

     D. The Lenders have asserted that certain Defaults and Events of Default (each as defined in the Documents) have occurred under the Documents, as set forth in: (a) the Former Forbearance Agreement, (b) the Agreement, the First Amendment, (c) that Notice of Default and Notice of Termination letter issued to Borrowers by the Agents, dated February 2, 2007; (d) that certain Notice of Events of Default dated March 5, 2007; (e) that certain Notice of Events of Default dated April 4, 2007; (f) those certain Notices of Events of Termination dated June 22, 2007 and September 25, 2007, respectively; and (g) those certain letters, the most recent of which is dated October 16, 2007, between Agent and the Borrowers related to amounts being borrowed by Borrowers under the Revolver (the “Discretionary Funding Letters” and, collectively with the correspondence identified in (c)-(g), the

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“Default Letters”). The Defaults and Events of Default set forth in the Former Forbearance Agreement, the Default Letters, the Agreement and the First Amendment are hereby incorporated herein verbatim. The parties hereto agree that “Designated Defaults” as used herein include:

i.	the Borrowers’ failure to meet the covenant set forth in Section 8.2 of the Credit Agreement and Loan Agreement as a result of their failure to meet their Fixed Charge Coverage requirement for the period ending January 31, 2007;
ii.	the Borrowers’ failure to furnish, as required under Section 11.3 of the Credit Agreement, December 2006 covenant calculations pursuant to the request of Revolver Agent on or before February 15, 2007;
iii.	the Borrowers’ failure to obtain a landlord waiver for the Borrowers’ New York City location;
iv.	the Borrowers’ failure to make those certain interest payments arising under that certain Indenture dated as of November 18, 2003 (as supplemented or amended) in respect of LPC’s 12% Senior Subordinated Notes due August 1, 2009 (the “Subordinate Debt Issue”) due (1) November 1, 2006; (2) February 1, 2007; and (3) May 1, 2007 (or to cure such payment defaults within the applicable cure period);
v.	the Borrowers’ failure to meet the covenant set forth in Section 8.2 of the Credit Agreement and Loan Agreement as a result of their failure to meet their Fixed Charge Coverage requirements for the periods ending February 28, 2007, and March 31, 2007;
vi.	the Borrowers’ failure to make that certain interest payment on account of the Subordinate Debt Issue due August 1, 2007 or otherwise cure such payment default within the applicable cure period;
vii.	the Borrowers will fail, prior to the Termination Date of this Second Amendment, to make that certain interest payment on account of the Subordinate Debt Issue due November 1, 2007 (and will not cure such payment defaults within the applicable cure period);
viii.	the Borrowers’ failure to comply with the covenants in Section 13c of the Agreement, including the Borrowers’ failure to timely provide to the Agents proof of execution of an engagement agreement with W.Y. Campbell and initial marketing materials.

Borrowers contest that Designated Defaults i, ii, and iii are Defaults or Events of Default but acknowledge that Designated Defaults iv, v, vi, and viii have occurred and, except for viii, are continuing to occur through the date of this agreement and that Designated Default vii will occur in the future. Borrowers acknowledge that the failure to list an alleged Default or Event of Default herein or in the Agreement, Former Forbearance Agreement, Default Letters or other Documents shall not impair Agents’ or Lenders’ abilities to pursue any rights or exercise any remedies related to such alleged Defaults or Events of Default upon an Event of Termination (as defined below).

     E. Borrowers have requested to amend the Agreement to amend certain terms related to the Forbearance Period, and the Forbearing Lenders have agreed to do so under the terms and conditions set forth in this Second Amendment.

     F. To the extent not specifically modified by the terms of the First Amendment or this Second Amendment, the Recitals set forth in the Agreement are incorporated in their entirety herein by reference and shall survive this Second Amendment.

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     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, Agents, Lenders and Borrowers agree as follows:

     1. Incorporation of Recitals; Definitions. Each of the foregoing recitals is hereby acknowledged and affirmed as being accurate and complete and is hereby incorporated as part of this Second Amendment. Capitalized terms defined in the Recitals section of this Second Amendment are incorporated herein by this reference and are used herein as so defined. Capitalized terms used herein to the extent not otherwise defined herein, shall have the same meaning as provided in the Agreement. Capitalized terms used herein but not otherwise defined in this Second Amendment or in the Agreement shall have the same meaning as given to them in the Documents.

     2. Forbearance. Section 2 of the Agreement is deleted in its entirety and replaced with the following:

Subject to the satisfaction of the terms and conditions set forth herein, until that date (the “Forbearance Termination Date”), which is the earliest to occur of (a) 4:00 p.m. (Eastern) on November 26, 2007, plus an additional thirty (30) days (or sixty (60) days in the event of the execution of an LOI with a Deposit or an APA, as set forth in paragraph 3) should an Extending Event (as defined in the following paragraph) occur, or (b) the consummation of a refinancing or a sale of the stock or assets of Borrowers (other than in the ordinary course), or (c) the date of the occurrence of any one or more Events of Termination (defined herein) (the “Forbearance Period”), Lenders will not exercise or enforce their rights or remedies against Borrowers which Agents or Lenders would be entitled to exercise or enforce under the terms of the Documents by reason of the occurrence or continuance of the Designated Defaults. This Agreement shall not act as a waiver of Agents or Lenders’ right to enforce any claims, rights or remedies, nor shall this Agreement act as a forbearance in the event Defaults or Events of Default (other than the Designated Defaults) occur at any time prior to the Forbearance Termination Date. Further, this forbearance shall not act as a waiver of Agents or Lenders’ right to enforce any claims, rights or remedies upon the occurrence of an Event of Termination. Nothing contained herein shall be construed as requiring the Forbearing Lenders to extend the Forbearance Termination Date. On the Forbearance Termination Date, without notice, the Obligations shall be deemed automatically accelerated and immediately due and payable in full by Borrowers (unless Agents notify Borrowers otherwise in writing) to Lenders and the Borrowers’ ability to borrow additional amounts under any of the Documents shall be deemed terminated.

     3. Extending Events. An “Extending Event” shall be the delivery to Agents and Lenders of one of the following: (i) a letter conveying a financing proposal executed by Borrowers and an entity or person that has the financial capability to provide the proposed financing and which is not an affiliate or subsidiary in, or officer or director of, any Borrower (the “Refinancing Lender”), pursuant to which such Refinancing Lender commits to provide credit to the Borrowers, prior to the expiration of the Forbearance Period, in an amount equal to or in excess of the amount necessary to pay in full and in cash all Obligations owing on the date such amounts are remitted to the Lenders, provided that, as of such initial Forbearance Termination Date, such proposal or commitment letter does not have a contingency that makes the obligations of the Refinancing Lender subject to completing any due diligence (other than, with respect to any real estate, the completion of satisfactory surveys, title reports, environmental reports or other reports prepared by a governmental agency, engineer or attorney which such governmental agency or attorney advises the Borrowers will take more than

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thirty (30) days to complete) (the “Commitment Letter”); or (ii) one or more letters of intent (“LOI”) executed by Borrowers and entities or persons (the “Buyers”) pursuant to which the Borrowers, prior to the expiration of the Forbearance Period will sell such stock and/or assets and receive and tender the funds from such sale to Lenders at a price sufficient to repay in full and in cash all Obligations on the date the funds are remitted to the Lenders or (iii) an LOI executed by Borrowers and Buyers pursuant to which the Borrowers, prior to the expiration of the Forbearance Period will sell all or substantially all of the assets of its Lexington Medical business for not less than $30 million in cash, United States currency. In the event an LOI conforming to (ii) or (iii) of this paragraph is executed during the initial Forbearance Period, the Forbearance Period shall be extended automatically to December 26, 2007. In the event an earnest money deposit in connection with an LOI equal to at least three percent (3%) of the purchase price (the “Deposit”) is made, or if an Asset Purchase Agreement or Stock Purchase Agreement (collectively the “APA”) is executed, or if the Deposit requirement of this Agreement is specifically waived by Agents, in writing, then the Forbearance Period (whether prior to the expiration of the initial Forbearance Period or during any extended Forbearance Period) will be extended, automatically, to January 24, 2008. The Deposit shall be remitted to an institutional Escrow Agent mutually satisfactory to the Borrowers, Buyers, Agents and Lenders.

     4. Forbearance Fee. The non-refundable forbearance fee referenced in Section 8 of the Agreement in the amount equal to one percent of the Obligations outstanding on the Effective Date (the “Forbearance Fee”) has been charged in accordance with the terms of the Agreement. Borrowers have received a credit of $130,140.64 against the Forbearance Fee for Default Interest charged during December 2006 and January 2007; the balance was properly charged as an Advance under the Revolving Credit Facility on September 25, 2007.

     5. Amendment Fee. A non-refundable amendment fee in the amount equal to one-quarter percent (1/4%) of the Obligations outstanding on the Effective Date (the “Amendment Fee”) shall be charged and is deemed fully earned upon execution of this Second Amendment by the Borrowers. The Amendment Fee shall be paid as follows: In the event an Extending Event occurs and the Agents and Lenders receive payment in full of all Obligations on or before January 24, 2008, then the Amendment Fee shall be waived, effective with the receipt by Lenders of payment in full of all Obligations. In the event an Extending Event does not occur, the Agent is directed by the Borrowers to charge the Amendment Fee as an Advance under the Revolving Credit Facility on the Forbearance Termination Date. If for any reason the Amendment Fee (if not waived) is not paid on or before the Forbearance Termination Date, then the balance owing for such Amendment Fee shall be added to the Obligations outstanding under the Credit Agreement and Loan Agreements, all of which shall accrue interest at the rate or rates then being applied under the Credit Agreement and Loan Agreement from the Forbearance Termination Date until all Obligations are paid in full.

     6. Amendment’s Effective Date and Conditions Precedent. This Second Amendment and the obligations of the parties hereunder shall become effective on the date when each of the following conditions are met (the “Effective Date”): (a) Borrowers shall have delivered to Agents this Second Amendment duly executed by an authorized officer of Borrowers; (b) the Forbearing Lenders shall have countersigned this Second Amendment; (c) the secretary of Borrowers’ boards of directors (the “Boards”) shall have delivered to Agents the authorizing resolutions related to the Boards’ approval of the Borrowers’ execution of this Agreement and a duly executed secretary’s and incumbency certificate identifying the current officers of Borrowers who are duly authorized by the Boards to execute and deliver Documents, including without limitation this Second Amendment, and identifying the current members of the Boards; and (d) the Agents shall receive a copy of a fully executed and effective agreement with respect to the Subordinate Debt Issue, whereby the holders of the Subordinate Debt Issue have extended their forbearance through a date not less than any

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Forbearance Termination Date. Each Borrower hereby (a) acknowledges that the Effective Date of this Agreement was agreed to by the parties hereto as an accommodation to each Borrower and (b) agrees that the Effective Date of this Agreement shall not cause any retroactive violation of the Forbearance Agreement or any Loan Document by any Agent or Lender to and including the execution date of this Agreement.

     7. Financial Measurements. The terms of Section 13 of the Agreement (as amended by the First Amendment) remain in full force and effect. In addition, Borrowers shall continue to provide to Agents the Revenue and EBITDA projections as set forth in Section 13b of the Agreement. Borrowers will provide Agents and Lenders financial projections for the period January through December 2008 by December 31, 2007.

     8. Survival of Terms of the Agreement. All terms, releases, waivers, representations, warranties and covenants contained in the Agreement and the First Amendment not expressly modified herein shall remain in full force and effect in accordance with the terms set forth in the Agreement and the First Amendment and are hereby reaffirmed and deemed effective as of the Effective Date of this Second Amendment.

     9. Ratification of Existing Agreements and Amounts Owing. Borrowers hereby reaffirm all of the terms, conditions, representations and warranties of each of the Documents (except as expressly set forth herein with respect to the Designated Defaults which have occurred and are continuing) and acknowledge that all of the Obligations are, by Borrowers’ execution of this Second Amendment, ratified and confirmed in all respects by Borrowers. Borrowers acknowledge that, as of October 17, 2007 (prior to any borrowing October 17), Borrowers are obligated to repay the outstanding Obligations to Agents and Lenders, including without limitation $36,938,229.53 of outstanding principal, $907,000.00 of L/C Obligations, all accrued and unpaid interest, late charges, pre-payment premiums, and all reasonable fees, costs and expenses, including without limitation legal fees and expenses due pursuant to the Documents, including the Agreement and this Second Amendment (whether incurred by outside or in-house legal counsel) (the “Balance”). The Balance, plus all additional advances and new Obligations incurred between October 17, 2007 and the Effective Date are subject to no offset, recoupment, claim, counterclaim or defense of any kind to their enforcement. Borrowers acknowledge and agree, as of the Effective Date, that they are unconditionally liable to Lenders on a joint and several basis under the Documents for the payment of all Obligations, plus all accrued and unpaid interest, late charges, pre-payment premiums, and all fees, costs and expenses incurred by Agents and Lenders, including without limitation reasonable legal fees and expenses, including in-house and outside attorneys’ fees and expenses, due pursuant to the Documents, including the Agreement, the First Amendment and this Second Amendment, the Agents’ Financial Advisor’s reasonable fees and expenses described below, and all other Obligations, each as set forth in the Agreement, this Second Amendment or the other Documents. Borrowers reaffirm, effective as of the Effective Date, that all Obligations are secured by the security interests previously granted under the Documents to Agents for the benefit of the Lenders, that the Agents have, and will continue to have after execution of this Second Amendment, a continuing first (and second, as applicable) priority, perfected Lien on the Collateral, whether now owned or hereafter acquired, created or arising, as set forth in the Documents, subject to no Liens other than Liens expressly permitted under the Documents. Borrowers acknowledge and agree, as of the Effective Date, that nothing herein contained in any way impairs Agents and Lenders’ existing rights under the Documents or Agents’ first and second (as applicable) priority lien status in the Collateral.

     10. Representations and Warranties. Borrowers hereby reaffirm, represent and warrant that the following are true and accurate through the Effective Date of this Second Amendment: (a)

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Borrowers are duly formed, validly existing and in legal good standing in the State of Delaware, that each of Borrowers has the power and authority to enter into this Second Amendment; (b) Borrowers have duly executed and delivered this Second Amendment and this Second Amendment constitutes the valid, binding and legal obligation of Borrowers; (c) this Second Amendment is not being entered into with the intent to hinder or defraud any person; and (d) the recitals set forth in the Recitals of this Second Amendment and all information and documents provided to Agents and Lenders in connection herewith are true, accurate and complete in all material respects. Further, Borrowers confirm, reaffirm and restate in all material respects to the Lenders, on and as of the Effective Date, the representations and warranties set forth in the Loan Agreement, the Credit Agreement, the Former Forbearance Agreement, the Agreement, and the other Documents, except as may be set forth herein or to the extent that such representations and warranties solely relate to a specific earlier date in which case Borrowers confirm, reaffirm and restate in all material respects such representations and warranties as of such earlier date. Each request for an Advance under the Revolving Facility shall constitute Borrowers’ confirmation, reaffirmation and restatement in all material respects of the representations and warranties set forth in the this Second Amendment, the Agreement, the Loan Agreement, the Credit Agreement, the Former Forbearance Agreement and the other Documents as of the date of each such request, except as set forth herein or except to the extent that such representations and warranties relate to a specific earlier date in which case each such request shall constitute Borrowers’ confirmation, reaffirmation and restatement in all material respects of such representations and warranties as of such earlier date.

     11. Events of Termination. The occurrence of any one or more of the following events shall constitute an event of termination (each an “Event of Termination”) under the Agreement, as modified by the First Amendment and this Second Amendment, it being expressly acknowledged and agreed that TIME IS OF THE ESSENCE: (a) the occurrence of the Forbearance Termination Date; (b) a Default or Event of Default under the Documents (other than the Designated Defaults); (c) the failure of Borrowers to comply with the terms of the Agreement, as modified by the First Amendment and this Second Amendment, including without limitation the failure of any covenant set forth in Paragraphs 11-13 of the Agreement, provided however, that the failure of Borrowers to comply with Section 13c of the Agreement prior to the date of the First Amendment shall not constitute an Event of Termination, or, the failure to timely or fully provide the financial information required under Section 7 of this Second Amendment; (d) the termination of the Subordinate Debt Forbearance Agreement; (e) the payment of any amount on account of the Subordinate Debt Issue or other Subordinated Debt; (f) the initiation of any federal or state bankruptcy, insolvency or similar proceeding by or against one or both Borrowers; and (g) the claim, initiation or commencement of any claim or proceeding in favor of, through or by Borrowers against any Agent or Lender including any that alleges that the release of Agents and Lenders set forth herein or in any of the other Documents is invalid or unenforceable. Upon the occurrence and continuance of any Event of Termination, Agents may, at their option and with written notice to Borrowers, exercise any and all rights and remedies pursuant to the Documents.

     12. Release of Lenders. By execution of this Second Amendment, Borrowers acknowledge and confirm that they do not have any offsets, defenses or claims whatsoever against Agents, Lenders, or any of Agents or Lenders’ subsidiaries, affiliates, officers, directors, employees, agents, consultants, attorneys, predecessors, successors or assigns whether asserted or unasserted as of the Effective Date. To the extent that such offsets, defenses or claims may exist, Borrowers for each of themselves and their successors, assigns, parents, subsidiaries, affiliates, predecessors, employees, agents, heirs and executors, as applicable (collectively, “Releasors”), jointly and severally, knowingly, voluntarily and intentionally release and forever discharge Agents, Lenders, their subsidiaries, affiliates, officers, directors, employees, agents, consultants, attorneys, predecessors,

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successors and assigns, both present and former (individually, a “Releasee” and collectively, the “Releasees”) of and from any and all manner of actions, causes of action, suits, debts, controversies, torts, damages, judgments, executions, claims and demands whatsoever, including, without limitation, any so-called “lender liability” claims or defenses which it has, asserted or unasserted, in law or in equity, which Releasors ever had or now have against the Releasees, including, without limitation, any presently existing claim or defense whether or not presently suspected, contemplated or anticipated based upon, or in any manner connected with (i) any transaction, event circumstance, action, omission, failure to act or occurrence of any sort or type, whether known or unknown, which occurred, existed, or was taken or permitted prior to the execution of this Second Amendment with respect to the Obligations, the Documents, including the Agreement or Former Forbearance Agreement, or the administration thereof (ii) any discussions, commitments, negotiations, conversations or communications, whether oral or evidenced by a writing of any sort prior to the execution of this Second Amendment with respect to the Obligations, or (iii) any thing or matter related to any of the foregoing prior to the execution of this Second Amendment. Borrowers acknowledge and agree that the inclusion of this paragraph in this Second Amendment and the execution of this Second Amendment by the Agents and Lenders does not constitute an acknowledgment or admission by the Agents or Lenders of liability for any matter, or a precedent upon which any liability may be asserted. If Borrowers assert or commence any claim, counter-claim, demand, obligation, liability or cause of action in derogation of the foregoing release or challenges the enforceability of the foregoing release (in each case, a “Violation”), then the Borrowers jointly and severally agree to pay in addition to such other damages as any Releasee may sustain as a result of such Violation, all attorneys’ fees and expenses (including in-house and outside counsels’) incurred by such Releasee as a result of such Violation. Specifically covered by this Release are the claims or defenses arising on account of the allegations Borrowers made prior to their execution of this Second Amendment that Agents or Lenders improperly charged the Default Rate for any period, incorrectly asserted any covenant violation by Borrowers (including those identified in Paragraph D of the Recitals in this Second Amendment), or that Borrowers executed any of the Default Letters while under duress or without the advice of legal counsel.

     13. No Waiver by Agents or Lenders. Except as specifically set forth in this Second Amendment, nothing in this Second Amendment shall extend to or affect in any way any of the Obligations or any of the rights of Agents or Lenders and remedies of Agents or Lenders arising under the Documents. Agents and Lenders shall not be deemed to have waived any or all of such rights or remedies with respect to any default or event or condition which, with notice or the lapse of time, or both, would become a Default or Event of Default under the Documents and which upon Borrowers’ execution and delivery of this Second Amendment might otherwise exist or which might hereafter occur. The failure of Agents or Lenders at any time or times hereafter to require strict performance by Borrowers of any of the provisions, warranties, terms and conditions contained in this Second Amendment or in the Documents shall not waive, affect or diminish any right of Agents or Lenders at any time or times thereafter to demand strict performance thereof; and, no rights of Agents or Lenders hereunder shall be deemed to have been waived by any act or knowledge of Agents, Lenders, or either of their agents, officers or employees, unless such waiver is contained in an instrument in writing signed by an authorized officer of each of the Agents and Lenders and directed to such Person specifying such waiver. No waiver by Agents or Lenders of any of their rights shall operate as a waiver of any other of their rights or any of their rights on a future occasion at any time and from time to time. All terms and conditions of the Documents remain in full force and effect except to the extent specifically modified by this Second Amendment.

     14. Acknowledgment/Waiver of Legal Counsel; Drafting of Agreement. Borrowers represent and warrant that: (a) they are represented by legal counsel of their choice, are fully aware of

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the terms contained in this Second Amendment and have voluntarily and without coercion or duress of any kind, entered into this Second Amendment; or (b) they have knowingly and intentionally waived their right to have legal counsel of their choice review and represent them with respect to the negotiation and preparation of this Second Amendment. Borrowers further represent and warrant and acknowledge and agree that they have participated in the drafting of this Second Amendment.

     15. Entire Agreement; No Third-Party Beneficiaries; Binding Affect. The Agreement, along with the First Amendment and this Second Amendment, constitutes the entire and final agreement among the parties with respect to the subject matter hereof and there are no agreements, understandings, warranties or representations among the parties with respect to the subject matter hereof except as set forth herein. The Agreement, along with the First Amendment and this Second Amendment, will inure to the benefit and bind the respective heirs, administrators, executors, representatives, successors and permitted assigns of the parties hereto. Nothing in this Second Amendment, the Agreement or in the other Documents, expressed or implied, is intended to confer upon any party other than the parties hereto and thereto any rights, remedies, obligations or liabilities under or by reason of this Second Amendment, the Agreement or the other Documents.

     16. Governing Law. This Second Amendment is executed and delivered in the State of New York (the “State”) and it is the desire and intention of the parties that it be in all respects interpreted according to the laws of the State, without reference to its conflicts of law principles. Borrowers specifically and irrevocably consent to the jurisdiction and venue of the federal and state courts of the State with respect to all matters concerning this Second Amendment, the Agreement or the other Documents or the enforcement of any of the foregoing. The parties hereto agree that the execution and performance of the Agreement, along with the First Amendment and this Second Amendment, shall have a State situs and accordingly, consent to personal jurisdiction in the State.

     17. Counterparts. This Second Amendment may be executed in counterparts, each of which will be deemed an original document, but all of which will constitute a single document. This document will not be binding on or constitute evidence of a contract between the parties until such time as a counterpart of this document has been executed by each of the parties and a copy thereof delivered to each party under this Second Amendment.

     18. WAIVER OF JURY TRIAL. THE PARTIES HERETO KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THAT THEY MAY HAVE TO A TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING OUT OF OR IN ANY WAY RELATED TO THIS SECOND AMENDMENT, THE AGREEMENT OR THE OTHER DOCUMENTS OR (B) IN ANY WAY CONNECTED WITH OR PERTAINING OR RELATED TO OR INCIDENTAL TO ANY DEALINGS OF AGENTS OR LENDERS AND/OR BORROWERS WITH RESPECT TO THE DOCUMENTS, INCLUDING THIS SECOND AMENDMENT AND THE AGREEMENT, OR IN CONNECTION WITH ANY DOCUMENT EXECUTED IN CONNECTION WITH THE DOCUMENTS OR THIS SECOND AMENDMENT OR THE AGREEMENT OR THE EXERCISE OF ANY PARTIES’ RIGHTS AND REMEDIES UNDER THE DOCUMENTS OR THIS SECOND AMENDMENT OR THE AGREEMENT (WHETHER SUCH EXERCISE WAS CORRECT OR IN ERROR) OR OTHERWISE, OR THE CONDUCT OF THE RELATIONSHIP OF THE PARTIES HERETO, IN ALL OF THE FOREGOING CASES WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. BORROWERS AGREE THAT AGENTS AND LENDERS MAY FILE A COPY OF THIS DOCUMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED FOR AGREEMENT OF BORROWERS IRREVOCABLY TO

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WAIVE THEIR RIGHTS TO TRIAL BY JURY AS AN INDUCEMENT OF AGENTS OR LENDERS TO ENTER INTO THIS SECOND AMENDMENT AND THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY DISPUTE OR CONTROVERSY WHERESOVER BETWEEN BORROWERS AND AGENTS OR ANY LENDER SHALL INSTEAD BY TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY. BORROWERS CERTIFY THAT NEITHER THE AGENTS NOR LENDERS NOR ANY OF THEIR REPRESENTATIVES, AGENTS OR COUNSEL HAVE REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENTS AND LENDERS WOULD NOT IN THE EVENT OF ANY SUCH SUIT, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO TRIAL BY JURY.

     19. Second Amendment Controls. In the event of any inconsistency between this Second Amendment and the Agreement or First Amendment, the terms of this Second Amendment shall control.

SIGNATURES FOLLOW ON NEXT PAGE

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     IN WITNESS WHEREOF, the parties have executed this Second Amendment under seal as of the day and year first written above.

BORROWER:
	Lexington Precision Corporation
	By:	/s/ Warren Delano
	Name:	Warren Delano
	Its:	President
	Lexington Rubber Group, Inc.
	By:	/s/ Warren Delano
	Name:	Warren Delano
	Its:	President
AGENTS AND FORBEARING LENDER:
	CapitalSource Finance LLC
	By:	/s/ Joanne Fungaroli
	Name:	Joanne Fungaroli
	Its:	Authorized Signatory
	Webster Business Credit Corporation
	By:	/s/ Alan F. McKay
	Name:	Alan F. McKay
	Its:	VP
	CSE Mortgage LLC
	By:	/s/ Joanne Fungaroli
	Name:	Joanne Fungaroli
	Its:	Authorized Signatory
	DMD Special Situations Funding LLC
	By:	CapitalSource Servicing LLC, its servicer
	Name:	Keith D. Reuben
	Its:	President – Healthcare & Specialty Finance

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EX-10.2

Exhibit 10-2

FIRST AMENDMENT TO FORBEARANCE AGREEMENT

          This FIRST AMENDMENT to the Forbearance Agreement (as defined below), dated September 24, 2007 (the “First Amendment”) is entered into by and among LEXINGTON PRECISION CORPORATION, a Delaware corporation (“Lexington”), and each of the undersigned holders (collectively, “Holders” and each, a “Holder”) of 12% Senior Subordinated Notes due August 1, 2009 (the “Notes”) issued by Lexington pursuant to the Indenture dated as of December 18, 2003, as supplemented by the First Supplemental Indenture dated as of May 25, 2007, between Lexington and Wilmington Trust Company, as Trustee (the “Indenture”).

WITNESSETH:

          WHEREAS, Lexington and the Holders are engaged in good faith negotiations with the objective of reaching an agreement with regard to a corporate and financial restructuring of Lexington and its subsidiaries, including indebtedness held by the Holders;

          WHEREAS, Lexington has failed to make the November 1, 2006, the February 1, 2007, the May 1, 2007, and the August 1, 2007, and will fail to make the November 1, 2007 interest payments (the “Interest Payments”) due under the Indenture;

          WHEREAS, the Holders and Lexington are party to that certain Forbearance Agreement dated as of May 25, 2007 (the “Forbearance Agreement”); and

          WHEREAS, Lexington has requested, and the Holders have agreed, to extend the forbearance period under the Forbearance Agreement.

          NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements as set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lexington and each Holder hereby agree as follows:

          1. Section 2(b) of the Forbearance Agreement is deleted in its entirely and replaced with the following:

The period of forbearance (the “Forbearance Period”) shall commence on May 25, 2007 and end on January 24, 2008, subject to earlier termination pursuant to the terms of Section 2(c) hereof.

          2. Except as herein amended, all terms and conditions of the Forbearance Agreement are hereby reaffirmed and shall remain in full force and effect as originally written and shall be construed as one document with this First Amendment.

          3. This First Amendment may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same First Amendment. This First Amendment may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

     IN WITNESS WHEREOF, each of the parties hereto has caused this First Amendment to be executed and delivered by its duly authorized officer as of the date first above written.

LEXINGTON PRECISION CORPORATION
By:	/s/ Warren Delano
	Name:	Warren Delano
	Title:	President

Name of Holder:	Jefferies High Yield Trading, LLC
Address:	The Metro Center One Station Place, Three North
	Stamford, CT 06902

Amount of 12% Senior Subordinated Notes
due August 1, 2009 Beneficially Owned: $12,690,000

JEFFERIES HIGH YIELD TRADING, LLC

By: /s/ Robert J. Welch   Name: Robert J. Welch
Title: Chief Financial Officer

Name of Holder:	Wilfrid Aubrey Growth Fund, L.P.
Address:	100 William Street, Suite 1850 New York, NY 10038

Amount of 12% Senior Subordinated Notes
due August 1, 2009 Beneficially Owned: $1,621,000

WILFRID AUBREY GROWTH FUND, L.P.

By: WILFRID AUBREY ASSOCIATES LLC, a Delaware limited liability company, its General Partner

By: /s/ Nicholas W. Walsh CFA   Name: Nicholas W. Walsh CFA
Title: Principal

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Name of Holder:	Wilfrid Aubrey International Limited
Address:	100 William Street, Suite 1850 New York, NY 10038

Amount of 12% Senior Subordinated Notes
due August 1, 2009 Beneficially Owned: $2,856,000

WILFRID AUBREY INTERNATIONAL LIMITED

By:	WILFRID AUBREY LLC, a Delaware limited liability company, its Investment Manager
By:	/s/ Nicholas W. Walsh CFA Name:   Nicholas W. Walsh CFA Title:     Principal

Name of Holder:	First Trust Strategic High Income Fund
Address:	2527 Nelson Miller Parkway, Suite 207 Louisville, KY 40223

Amount of 12% Senior Subordinated Notes
due August 1, 2009 Beneficially Owned: $1,500,000

FIRST TRUST STRATEGIC HIGH INCOME FUND

By:	VALHALLA CAPITAL PARTNERS LLC, its Sub-Advisor
By:	/s/ Rip Mecherle Name:   Rip Mecherle Title:     Managing Partner

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Name of Holder:	First Trust Strategic High Income Fund II
Address:	2527 Nelson Miller Parkway, Suite 207 Louisville, KY 40223

Amount of 12% Senior Subordinated Notes
due August 1, 2009 Beneficially Owned: $1,500,000

FIRST TRUST STRATEGIC HIGH INCOME FUND II

By:	VALHALLA CAPITAL PARTNERS LLC, its Sub-Advisor
By:	/s/ Rip Mecherle Name:   Rip Mecherle Title:     Managing Partner

Name of Holder:	Cape Fund, LP
Address:	One Georgia Center, Suite 1560
	600 West Peachtree Street Atlanta, GA 30308

Amount of 12% Senior Subordinated Notes
due August 1, 2009 Beneficially Owned: $1,325,000

CAPE FUND, LP

By:	CAPE INVESTMENTS, LLC, its General Partner
By:	/s/ J. T. King Name:    J. T. King Title:     Managing Director

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Name of Holder:	Cape Fund II, LP
Address:	One Georgia Center, Suite 1560 600 West Peachtree Street Atlanta, GA 30308

Amount of 12% Senior Subordinated Notes
due August 1, 2009 Beneficially Owned: $675,000

CAPE FUND II, LP

By:	CAPE INVESTMENTS, LLC, its General Partner
By:	/s/ J. T. King Name:  J.T. King Title:    Managing Director

Name of Holder:	Hedgehog Capital LLC
Address:	1117 E. Putnam Ave., #320 Riverside, CT 06878

Amount of 12% Senior Subordinated Notes
due August 1, 2009 Beneficially Owned: $1,761,000

HEDGEHOG CAPITAL LLC

By: /s/ Robert Chung   Name: Robert Chung
Title:

5

Name of Holder:	Sandler Capital Structure Opportunities Master Fund, Ltd
Address:	711 Fifth Avenue, 15th Floor New York, NY 10022

Amount of 12% Senior Subordinated Notes
due August 1, 2009 Beneficially Owned: $1,271,000

SANDLER CAPITAL STRUCTURE OPPORTUNITIES MASTER FUND, LTD

By:	SANDLER CAPITAL MANAGEMENT, its Investment Manager
	By: SERF CORP, a general partner
By:	/s/ Moira Mitchell Name:   Moira Mitchell Title:     President

Name of Holder:	Permal Capital Structure Opportunities, Ltd.
Address:	711 Fifth Avenue, 15th Floor New York, NY 10022

Amount of 12% Senior Subordinated Notes
due August 1, 2009 Beneficially Owned: $229,000

PERMAL CAPITAL STRUCTURE OPPORTUNITIES, LTD.

By:	SANDLER CAPITAL MANAGEMENT, its Investment Manager
	By: SERF CORP, a general partner
By:	/s/ Moira Mitchell Name: Moira Mitchell Title: President

6

EX-10.3

Exhibit 10-3

RESTRICTED STOCK AWARD AGREEMENT

Pursuant to the

LEXINGTON PRECISION CORPORATION

2005 STOCK AWARD PLAN

Name of Participant: William B. Conner

Date of Grant: October 9, 2007

Number of Shares: 10,000

Value of each Share on Date of Grant: $.70

          This RESTRICTED STOCK AGREEMENT (the “Agreement”), dated as of October 9, 2007, is made between Lexington Precision Corporation, a Delaware corporation (the “Company”) and the above-named individual (the “Participant”) to record the granting of Restricted Stock on October 9, 2007 (the “Date of Grant”) to the Participant pursuant to the Lexington Precision Corporation 2005 Stock Award Plan (the “Plan”).

          The Company and the Participant hereby agree as follows:

          1. Grant of Shares. The Company hereby grants to the Participant, as of the Date of Grant, subject to and in accordance with the terms and conditions of the Plan and this Agreement, 10,000 shares of the Company’s Common Stock, par value $0.25 per share (the “Common Stock”). The grant of shares of Common Stock to the Participant, evidenced by this Agreement, is an award of Restricted Stock (as defined in the Plan) and such shares of Restricted Stock are referred to herein as the “Shares”.

          2. Vesting of Shares. Ownership of the Shares shall vest pursuant to the following vesting schedule, provided, in each case, any additional conditions and performance goals set forth in Schedule I have been satisfied and the Participant is still serving as a director of the Company:

Anniversary of Date of Grant	Shares Vested
October  9, 2008	2,000
October  9, 2009	2,000
October  9, 2010	2,000
October  9, 2011	2,000
October  9, 2012	2,000

- 2 -

     The foregoing vesting schedule notwithstanding, if (i) the service of the Participant as a director of the Company terminates by reason of the Participant’s Disability or death or (ii) there shall occur (x) a Change in Control, (y) a merger or consolidation of the Company with or into another corporation or other entity as a result of which persons and entities who, immediately prior to the consummation thereof, beneficially owned a majority of the voting stock of the corporation no longer beneficially own such a majority immediately following the consummation thereof, or (z) a sale of all or substantially all of the assets of the Company in a single transaction or series of related transactions or (iii) persons who were directors of the Company on the date hereof cease to constitute at least a majority of the members of the Company’s Board of Directors (provided that, for purposes of this clause (iii) any person who becomes a member of the Company’s Board of Directors after the date hereof whose election, appointment or nomination for election or appointment thereto was approved by the vote of at least a majority of the then incumbent Board of Directors shall be considered a member of the Board of Directors on the date hereof), all Shares or portions thereof not yet vested shall become immediately vested.

          3. Forfeiture. If the Shares have not vested in accordance with the vesting criteria set forth in Section 2 and the Participant’s service as a director of the Company terminates for any reason, the Shares (and any dividends or other distributions related to such Shares) shall be forfeited to the Company.

          4. Legend. Each share certificate representing the Shares shall bear a legend indicating that such Shares are “Restricted Stock” and are subject to the provisions of this Agreement and the Plan.

          5. General Restrictions on Issuance of Stock Certificates. The Company shall not be required to deliver any certificate representing the Shares until it has been furnished with such opinions, representations or other documents as it may deem necessary or desirable, in its discretion, to ensure compliance with any law or any rules of the Securities and Exchange Commission or any other governmental authority having jurisdiction under the Plan or over the Company, the Participant, or the Shares or any interests granted thereunder.

          6. Rights as Shareholder. Except for the dividend and distribution restrictions described below, and the transfer and other restrictions set forth elsewhere in this Agreement and in the Plan, the Participant, as record holder of the Shares, shall possess all the rights of a holder of the Company’s Common Stock, including voting, dividend and other distribution rights, provided, however, that prior to vesting the certificates representing the Shares, as well as any dividends or other distributions with respect to such Shares, shall be held by the Company for the benefit of the Participant. Any distributions with respect to the Shares in the form of capital stock shall be treated as Restricted Stock in the same manner as the Shares. If any Shares do not vest and are forfeited to the Company, then any capital stock distributed with respect to such Shares, as well as any other dividends or other distributions with respect to such Shares, shall also be forfeited to the Company. Upon forfeiture of any Shares, the Participant agrees to deliver promptly to the Company certificates representing such Shares together with a stock power executed in blank covering such Shares (and covering any capital stock distributed with respect to such Shares). The stock power with respect to any forfeited Shares shall be completed in the name of the Company by an officer of the Company and the forfeited Shares shall be returned to treasury.

- 3 -

          7. Transferability — Restricted Share Certificates. The Shares may not be sold, transferred, pledged, assigned, encumbered, or otherwise alienated or hypothecated until they become vested in accordance with Section 2 of this Agreement and then only to the extent permitted under this Agreement and applicable securities laws. Prior to vesting, all rights with respect to the Restricted Stock granted to a Participant under the Plan shall be available, during such Participant’s lifetime, only to such Participant.

          8. No Service Rights. Neither the Plan nor this award shall confer upon the Participant any right with respect to continuance of service as a director of the Company nor shall they interfere in any way with the right of the Company to terminate the Participant’s service as a director in accordance with the Company’s certificate of incorporation or by-laws.

          9. Section 83(b) Election. The Participant may elect, within 30 days of the Date of Grant pursuant to Section 83(b) of the Internal Revenue Code, to include in his or her gross income the fair market value of the Shares covered by this Agreement in the taxable year of grant. The election must be made by filing the appropriate notice with the Internal Revenue Service within 30 days of the Date of Grant. If the Participant makes this election, the Participant shall promptly notify the Company by submitting to the Company a copy of the election notice filed with the Internal Revenue Service.

          10. Adjustment of Shares. As provided by the Plan, in the event of any change in the Common Stock of the Company by reason of any stock dividend, stock split, recapitalization, reorganization, merger, consolidation, split-up, combination, or exchange of Shares, or any similar change affecting the Common Stock, the Shares shall be adjusted automatically consistent with such change to prevent substantial dilution or enlargement of the rights granted to, or available for, the Participant.

          11. Coordination with Plan. Terms used herein that are defined in the Plan shall have the meanings ascribed to them in the Plan. If there is any inconsistency between the terms of this Award Agreement and the terms of the Plan, the Plan’s terms shall supersede and replace the conflicting terms herein.

          12. Notices. All notices to the Company shall be in writing and sent to the Company’s Secretary at the Company’s offices, Lexington Precision Corporation, 800 Third Avenue, New York, NY 10022 or to such other person and/or address as the Company may provide by notice to Participant. Notices to the Participant shall be addressed to the Participant at the Participant’s address as it appears on the Company’s records.

- 4 -

     IN WITNESS WHEREOF, the Company and the Participant have caused this Restricted Stock Agreement to be executed on the date set forth opposite their respective signatures, it being further understood that the Date of Grant may differ from the date of signature.

Dated: October 9, 2007	LEXINGTON PRECISION CORPORATION
	By: /s/ Michael A. Lubin Name: Michael A. Lubin Title: Chairman of the Board
Dated: October 22, 2007	PARTICIPANT
	By: /s/ William B. Conner Name: William B. Conner

- 5 -

     SCHEDULE I VESTING CONDITIONS AND PERFORMANCE GOALS

-None-

EX-10.4

Exhibit 10-4

RESTRICTED STOCK AWARD AGREEMENT

Pursuant to the

LEXINGTON PRECISION CORPORATION

2005 STOCK AWARD PLAN

Name of Participant: Kenneth I. Greenstein

Date of Grant: October 9, 2007

Number of Shares: 10,000

Value of each Share on Date of Grant: $.70

          This RESTRICTED STOCK AGREEMENT (the “Agreement”), dated as of October 9, 2007, is made between Lexington Precision Corporation, a Delaware corporation (the “Company”) and the above-named individual (the “Participant”) to record the granting of Restricted Stock on October 9, 2007 (the “Date of Grant”) to the Participant pursuant to the Lexington Precision Corporation 2005 Stock Award Plan (the “Plan”).

          The Company and the Participant hereby agree as follows:

          1. Grant of Shares. The Company hereby grants to the Participant, as of the Date of Grant, subject to and in accordance with the terms and conditions of the Plan and this Agreement, 10,000 shares of the Company’s Common Stock, par value $0.25 per share (the “Common Stock”). The grant of shares of Common Stock to the Participant, evidenced by this Agreement, is an award of Restricted Stock (as defined in the Plan) and such shares of Restricted Stock are referred to herein as the “Shares”.

          2. Vesting of Shares. Ownership of the Shares shall vest pursuant to the following vesting schedule, provided, in each case, any additional conditions and performance goals set forth in Schedule I have been satisfied and the Participant is still serving as a director of the Company:

Anniversary of Date of Grant	Shares Vested
October  9, 2008	2,000
October  9, 2009	2,000
October  9, 2010	2,000
October  9, 2011	2,000
October  9, 2012	2,000

- 2 -

     The foregoing vesting schedule notwithstanding, if (i) the service of the Participant as a director of the Company terminates by reason of the Participant’s Disability or death or (ii) there shall occur (x) a Change in Control, (y) a merger or consolidation of the Company with or into another corporation or other entity as a result of which persons and entities who, immediately prior to the consummation thereof, beneficially owned a majority of the voting stock of the corporation no longer beneficially own such a majority immediately following the consummation thereof, or (z) a sale of all or substantially all of the assets of the Company in a single transaction or series of related transactions or (iii) persons who were directors of the Company on the date hereof cease to constitute at least a majority of the members of the Company’s Board of Directors (provided that, for purposes of this clause (iii) any person who becomes a member of the Company’s Board of Directors after the date hereof whose election, appointment or nomination for election or appointment thereto was approved by the vote of at least a majority of the then incumbent Board of Directors shall be considered a member of the Board of Directors on the date hereof), all Shares or portions thereof not yet vested shall become immediately vested.

          3. Forfeiture. If the Shares have not vested in accordance with the vesting criteria set forth in Section 2 and the Participant’s service as a director of the Company terminates for any reason, the Shares (and any dividends or other distributions related to such Shares) shall be forfeited to the Company.

          4. Legend. Each share certificate representing the Shares shall bear a legend indicating that such Shares are “Restricted Stock” and are subject to the provisions of this Agreement and the Plan.

          5. General Restrictions on Issuance of Stock Certificates. The Company shall not be required to deliver any certificate representing the Shares until it has been furnished with such opinions, representations or other documents as it may deem necessary or desirable, in its discretion, to ensure compliance with any law or any rules of the Securities and Exchange Commission or any other governmental authority having jurisdiction under the Plan or over the Company, the Participant, or the Shares or any interests granted thereunder.

          6. Rights as Shareholder. Except for the dividend and distribution restrictions described below, and the transfer and other restrictions set forth elsewhere in this Agreement and in the Plan, the Participant, as record holder of the Shares, shall possess all the rights of a holder of the Company’s Common Stock, including voting, dividend and other distribution rights, provided, however, that prior to vesting the certificates representing the Shares, as well as any dividends or other distributions with respect to such Shares, shall be held by the Company for the benefit of the Participant. Any distributions with respect to the Shares in the form of capital stock shall be treated as Restricted Stock in the same manner as the Shares. If any Shares do not vest and are forfeited to the Company, then any capital stock distributed with respect to such Shares, as well as any other dividends or other distributions with respect to such Shares, shall also be forfeited to the Company. Upon forfeiture of any Shares, the Participant agrees to deliver promptly to the Company certificates representing such Shares together with a stock power executed in blank covering such Shares (and covering any capital stock distributed with respect to such Shares). The stock power with respect to any forfeited Shares shall be

- 3 -

completed in the name of the Company by an officer of the Company and the forfeited Shares shall be returned to treasury.

          7. Transferability — Restricted Share Certificates. The Shares may not be sold, transferred, pledged, assigned, encumbered, or otherwise alienated or hypothecated until they become vested in accordance with Section 2 of this Agreement and then only to the extent permitted under this Agreement and applicable securities laws. Prior to vesting, all rights with respect to the Restricted Stock granted to a Participant under the Plan shall be available, during such Participant’s lifetime, only to such Participant.

          8. No Service Rights. Neither the Plan nor this award shall confer upon the Participant any right with respect to continuance of service as a director of the Company nor shall they interfere in any way with the right of the Company to terminate the Participant’s service as a director in accordance with the Company’s certificate of incorporation or by-laws.

          9. Section 83(b) Election. The Participant may elect, within 30 days of the Date of Grant pursuant to Section 83(b) of the Internal Revenue Code, to include in his or her gross income the fair market value of the Shares covered by this Agreement in the taxable year of grant. The election must be made by filing the appropriate notice with the Internal Revenue Service within 30 days of the Date of Grant. If the Participant makes this election, the Participant shall promptly notify the Company by submitting to the Company a copy of the election notice filed with the Internal Revenue Service.

          10. Adjustment of Shares. As provided by the Plan, in the event of any change in the Common Stock of the Company by reason of any stock dividend, stock split, recapitalization, reorganization, merger, consolidation, split-up, combination, or exchange of Shares, or any similar change affecting the Common Stock, the Shares shall be adjusted automatically consistent with such change to prevent substantial dilution or enlargement of the rights granted to, or available for, the Participant.

          11. Coordination with Plan. Terms used herein that are defined in the Plan shall have the meanings ascribed to them in the Plan. If there is any inconsistency between the terms of this Award Agreement and the terms of the Plan, the Plan’s terms shall supersede and replace the conflicting terms herein.

          12. Notices. All notices to the Company shall be in writing and sent to the Company’s Secretary at the Company’s offices, Lexington Precision Corporation, 800 Third Avenue, New York, NY 10022 or to such other person and/or address as the Company may provide by notice to Participant. Notices to the Participant shall be addressed to the Participant at the Participant’s address as it appears on the Company’s records.

- 4 -

     IN WITNESS WHEREOF, the Company and the Participant have caused this Restricted Stock Agreement to be executed on the date set forth opposite their respective signatures, it being further understood that the Date of Grant may differ from the date of signature.

Dated: October 9, 2007	LEXINGTON PRECISION CORPORATION
	By:	/s/ Michael A. Lubin
	Name:	Michael A. Lubin
	Title:	Chairman of the Board
Dated: October 25, 2007	PARTICIPANT
	By:	/s/ Kenneth I. Greenstein
	Name:	Kenneth I. Greenstein

- 5 -

SCHEDULE I VESTING CONDITIONS AND PERFORMANCE GOALS

-None-

EX-10.5

Exhibit 10-5

RESTRICTED STOCK AWARD AGREEMENT

Pursuant to the

LEXINGTON PRECISION CORPORATION

2005 STOCK AWARD PLAN

Name of Participant: Joseph A. Pardo

Date of Grant: October 9, 2007

Number of Shares: 10,000

Value of each Share on Date of Grant: $.70

          This RESTRICTED STOCK AGREEMENT (the “Agreement”), dated as of October 9, 2007, is made between Lexington Precision Corporation, a Delaware corporation (the “Company”) and the above-named individual (the “Participant”) to record the granting of Restricted Stock on October 9, 2007 (the “Date of Grant”) to the Participant pursuant to the Lexington Precision Corporation 2005 Stock Award Plan (the “Plan”).

          The Company and the Participant hereby agree as follows:

          1. Grant of Shares. The Company hereby grants to the Participant, as of the Date of Grant, subject to and in accordance with the terms and conditions of the Plan and this Agreement, 10,000 shares of the Company’s Common Stock, par value $0.25 per share (the “Common Stock”). The grant of shares of Common Stock to the Participant, evidenced by this Agreement, is an award of Restricted Stock (as defined in the Plan) and such shares of Restricted Stock are referred to herein as the “Shares”.

          2. Vesting of Shares. Ownership of the Shares shall vest pursuant to the following vesting schedule, provided, in each case, any additional conditions and performance goals set forth in Schedule I have been satisfied and the Participant is still serving as a director of the Company:

Anniversary of Date of Grant	Shares Vested
October  9, 2008	2,000
October  9, 2009	2,000
October  9, 2010	2,000
October  9, 2011	2,000
October  9, 2012	2,000

- 2 -

     The foregoing vesting schedule notwithstanding, if (i) the service of the Participant as a director of the Company terminates by reason of the Participant’s Disability or death or (ii) there shall occur (x) a Change in Control, (y) a merger or consolidation of the Company with or into another corporation or other entity as a result of which persons and entities who, immediately prior to the consummation thereof, beneficially owned a majority of the voting stock of the corporation no longer beneficially own such a majority immediately following the consummation thereof, or (z) a sale of all or substantially all of the assets of the Company in a single transaction or series of related transactions or (iii) persons who were directors of the Company on the date hereof cease to constitute at least a majority of the members of the Company’s Board of Directors (provided that, for purposes of this clause (iii) any person who becomes a member of the Company’s Board of Directors after the date hereof whose election, appointment or nomination for election or appointment thereto was approved by the vote of at least a majority of the then incumbent Board of Directors shall be considered a member of the Board of Directors on the date hereof), all Shares or portions thereof not yet vested shall become immediately vested.

          3. Forfeiture. If the Shares have not vested in accordance with the vesting criteria set forth in Section 2 and the Participant’s service as a director of the Company terminates for any reason, the Shares (and any dividends or other distributions related to such Shares) shall be forfeited to the Company.

          4. Legend. Each share certificate representing the Shares shall bear a legend indicating that such Shares are “Restricted Stock” and are subject to the provisions of this Agreement and the Plan.

          5. General Restrictions on Issuance of Stock Certificates. The Company shall not be required to deliver any certificate representing the Shares until it has been furnished with such opinions, representations or other documents as it may deem necessary or desirable, in its discretion, to ensure compliance with any law or any rules of the Securities and Exchange Commission or any other governmental authority having jurisdiction under the Plan or over the Company, the Participant, or the Shares or any interests granted thereunder.

          6. Rights as Shareholder. Except for the dividend and distribution restrictions described below, and the transfer and other restrictions set forth elsewhere in this Agreement and in the Plan, the Participant, as record holder of the Shares, shall possess all the rights of a holder of the Company’s Common Stock, including voting, dividend and other distribution rights, provided, however, that prior to vesting the certificates representing the Shares, as well as any dividends or other distributions with respect to such Shares, shall be held by the Company for the benefit of the Participant. Any distributions with respect to the Shares in the form of capital stock shall be treated as Restricted Stock in the same manner as the Shares. If any Shares do not vest and are forfeited to the Company, then any capital stock distributed with respect to such Shares, as well as any other dividends or other distributions with respect to such Shares, shall also be forfeited to the Company. Upon forfeiture of any Shares, the Participant agrees to deliver promptly to the Company certificates representing such Shares together with a stock power executed in blank covering such Shares (and covering any capital stock distributed with respect to such Shares). The stock power with respect to any forfeited Shares shall be

- 3 -

completed in the name of the Company by an officer of the Company and the forfeited Shares shall be returned to treasury.

          7. Transferability — Restricted Share Certificates. The Shares may not be sold, transferred, pledged, assigned, encumbered, or otherwise alienated or hypothecated until they become vested in accordance with Section 2 of this Agreement and then only to the extent permitted under this Agreement and applicable securities laws. Prior to vesting, all rights with respect to the Restricted Stock granted to a Participant under the Plan shall be available, during such Participant’s lifetime, only to such Participant.

          8. No Service Rights. Neither the Plan nor this award shall confer upon the Participant any right with respect to continuance of service as a director of the Company nor shall they interfere in any way with the right of the Company to terminate the Participant’s service as a director in accordance with the Company’s certificate of incorporation or by-laws.

          9. Section 83(b) Election. The Participant may elect, within 30 days of the Date of Grant pursuant to Section 83(b) of the Internal Revenue Code, to include in his or her gross income the fair market value of the Shares covered by this Agreement in the taxable year of grant. The election must be made by filing the appropriate notice with the Internal Revenue Service within 30 days of the Date of Grant. If the Participant makes this election, the Participant shall promptly notify the Company by submitting to the Company a copy of the election notice filed with the Internal Revenue Service.

          10. Adjustment of Shares. As provided by the Plan, in the event of any change in the Common Stock of the Company by reason of any stock dividend, stock split, recapitalization, reorganization, merger, consolidation, split-up, combination, or exchange of Shares, or any similar change affecting the Common Stock, the Shares shall be adjusted automatically consistent with such change to prevent substantial dilution or enlargement of the rights granted to, or available for, the Participant.

          11. Coordination with Plan. Terms used herein that are defined in the Plan shall have the meanings ascribed to them in the Plan. If there is any inconsistency between the terms of this Award Agreement and the terms of the Plan, the Plan’s terms shall supersede and replace the conflicting terms herein.

          12. Notices. All notices to the Company shall be in writing and sent to the Company’s Secretary at the Company’s offices, Lexington Precision Corporation, 800 Third Avenue, New York, NY 10022 or to such other person and/or address as the Company may provide by notice to Participant. Notices to the Participant shall be addressed to the Participant at the Participant’s address as it appears on the Company’s records.

- 4 -

     IN WITNESS WHEREOF, the Company and the Participant have caused this Restricted Stock Agreement to be executed on the date set forth opposite their respective signatures, it being further understood that the Date of Grant may differ from the date of signature.

Dated: October 9, 2007	LEXINGTON PRECISION CORPORATION
	By:	/s/ Michael A. Lubin
		Name:	Michael A. Lubin
		Title:	Chairman of the Board
Dated: October 23, 2007	PARTICIPANT
	By:	/s/ Joseph A. Pardo
		Name:	Joseph A. Pardo

- 5 -

SCHEDULE I VESTING CONDITIONS AND PERFORMANCE GOALS

-None-

EX-10.6

Exhibit 10-6

RESTRICTED STOCK AWARD AGREEMENT

Pursuant to the

LEXINGTON PRECISION CORPORATION

2005 STOCK AWARD PLAN

Name of Participant: Elizabeth H. Ruml

Date of Grant: October 9, 2007

Number of Shares: 10,000

Value of each Share on Date of Grant: $.70

          This RESTRICTED STOCK AGREEMENT (the “Agreement”), dated as of October 9, 2007, is made between Lexington Precision Corporation, a Delaware corporation (the “Company”) and the above-named individual (the “Participant”) to record the granting of Restricted Stock on October 9, 2007 (the “Date of Grant”) to the Participant pursuant to the Lexington Precision Corporation 2005 Stock Award Plan (the “Plan”).

          The Company and the Participant hereby agree as follows:

          1. Grant of Shares. The Company hereby grants to the Participant, as of the Date of Grant, subject to and in accordance with the terms and conditions of the Plan and this Agreement, 10,000 shares of the Company’s Common Stock, par value $0.25 per share (the “Common Stock”). The grant of shares of Common Stock to the Participant, evidenced by this Agreement, is an award of Restricted Stock (as defined in the Plan) and such shares of Restricted Stock are referred to herein as the “Shares”.

          2. Vesting of Shares. Ownership of the Shares shall vest pursuant to the following vesting schedule, provided, in each case, any additional conditions and performance goals set forth in Schedule I have been satisfied and the Participant is still serving as a director of the Company:

Anniversary of Date of Grant	Shares Vested
October  9, 2008	2,000
October  9, 2009	2,000
October  9, 2010	2,000
October  9, 2011	2,000
October  9, 2012	2,000

- 2 -

     The foregoing vesting schedule notwithstanding, if (i) the service of the Participant as a director of the Company terminates by reason of the Participant’s Disability or death or (ii) there shall occur (x) a Change in Control, (y) a merger or consolidation of the Company with or into another corporation or other entity as a result of which persons and entities who, immediately prior to the consummation thereof, beneficially owned a majority of the voting stock of the corporation no longer beneficially own such a majority immediately following the consummation thereof, or (z) a sale of all or substantially all of the assets of the Company in a single transaction or series of related transactions or (iii) persons who were directors of the Company on the date hereof cease to constitute at least a majority of the members of the Company’s Board of Directors (provided that, for purposes of this clause (iii) any person who becomes a member of the Company’s Board of Directors after the date hereof whose election, appointment or nomination for election or appointment thereto was approved by the vote of at least a majority of the then incumbent Board of Directors shall be considered a member of the Board of Directors on the date hereof), all Shares or portions thereof not yet vested shall become immediately vested.

          3. Forfeiture. If the Shares have not vested in accordance with the vesting criteria set forth in Section 2 and the Participant’s service as a director of the Company terminates for any reason, the Shares (and any dividends or other distributions related to such Shares) shall be forfeited to the Company.

          4. Legend. Each share certificate representing the Shares shall bear a legend indicating that such Shares are “Restricted Stock” and are subject to the provisions of this Agreement and the Plan.

          5. General Restrictions on Issuance of Stock Certificates. The Company shall not be required to deliver any certificate representing the Shares until it has been furnished with such opinions, representations or other documents as it may deem necessary or desirable, in its discretion, to ensure compliance with any law or any rules of the Securities and Exchange Commission or any other governmental authority having jurisdiction under the Plan or over the Company, the Participant, or the Shares or any interests granted thereunder.

          6. Rights as Shareholder. Except for the dividend and distribution restrictions described below, and the transfer and other restrictions set forth elsewhere in this Agreement and in the Plan, the Participant, as record holder of the Shares, shall possess all the rights of a holder of the Company’s Common Stock, including voting, dividend and other distribution rights, provided, however, that prior to vesting the certificates representing the Shares, as well as any dividends or other distributions with respect to such Shares, shall be held by the Company for the benefit of the Participant. Any distributions with respect to the Shares in the form of capital stock shall be treated as Restricted Stock in the same manner as the Shares. If any Shares do not vest and are forfeited to the Company, then any capital stock distributed with respect to such Shares, as well as any other dividends or other distributions with respect to such Shares, shall also be forfeited to the Company. Upon forfeiture of any Shares, the Participant agrees to deliver promptly to the Company certificates representing such Shares together with a stock power executed in blank covering such Shares (and covering any capital stock distributed with respect to such Shares). The stock power with respect to any forfeited Shares shall be

- 3 -

completed in the name of the Company by an officer of the Company and the forfeited Shares shall be returned to treasury.

          7. Transferability — Restricted Share Certificates. The Shares may not be sold, transferred, pledged, assigned, encumbered, or otherwise alienated or hypothecated until they become vested in accordance with Section 2 of this Agreement and then only to the extent permitted under this Agreement and applicable securities laws. Prior to vesting, all rights with respect to the Restricted Stock granted to a Participant under the Plan shall be available, during such Participant’s lifetime, only to such Participant.

          8. No Service Rights. Neither the Plan nor this award shall confer upon the Participant any right with respect to continuance of service as a director of the Company nor shall they interfere in any way with the right of the Company to terminate the Participant’s service as a director in accordance with the Company’s certificate of incorporation or by-laws.

          9. Section 83(b) Election. The Participant may elect, within 30 days of the Date of Grant pursuant to Section 83(b) of the Internal Revenue Code, to include in his or her gross income the fair market value of the Shares covered by this Agreement in the taxable year of grant. The election must be made by filing the appropriate notice with the Internal Revenue Service within 30 days of the Date of Grant. If the Participant makes this election, the Participant shall promptly notify the Company by submitting to the Company a copy of the election notice filed with the Internal Revenue Service.

          10. Adjustment of Shares. As provided by the Plan, in the event of any change in the Common Stock of the Company by reason of any stock dividend, stock split, recapitalization, reorganization, merger, consolidation, split-up, combination, or exchange of Shares, or any similar change affecting the Common Stock, the Shares shall be adjusted automatically consistent with such change to prevent substantial dilution or enlargement of the rights granted to, or available for, the Participant.

          11. Coordination with Plan. Terms used herein that are defined in the Plan shall have the meanings ascribed to them in the Plan. If there is any inconsistency between the terms of this Award Agreement and the terms of the Plan, the Plan’s terms shall supersede and replace the conflicting terms herein.

          12. Notices. All notices to the Company shall be in writing and sent to the Company’s Secretary at the Company’s offices, Lexington Precision Corporation, 800 Third Avenue, New York, NY 10022 or to such other person and/or address as the Company may provide by notice to Participant. Notices to the Participant shall be addressed to the Participant at the Participant’s address as it appears on the Company’s records.

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     IN WITNESS WHEREOF, the Company and the Participant have caused this Restricted Stock Agreement to be executed on the date set forth opposite their respective signatures, it being further understood that the Date of Grant may differ from the date of signature.

Dated: October 9, 2007	LEXINGTON PRECISION CORPORATION
	By:	/s/ Michael A. Lubin
		Name:	Michael A. Lubin
		Title:	Chairman of the Board

Dated: October 22, 2007	PARTICIPANT
	By:	/s/ Elizabeth H. Ruml
	Name: Elizabeth H. Ruml

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SCHEDULE I VESTING CONDITIONS AND PERFORMANCE GOALS

-None-

EX-31.1

Exhibit 31-1

CERTIFICATION

I, Michael A. Lubin, certify that:

1.	I have reviewed this Form 10-Q of Lexington Precision Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 13, 2007

/s/ Michael A. Lubin

Michael A. Lubin

Chairman of the Board

(Co-Principal Executive Officer)

EX-31.2

Exhibit 31-2

CERTIFICATION

I, Warren Delano, certify that:

1.	I have reviewed this Form 10-Q of Lexington Precision Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 13, 2007

/s/ Warren Delano

Warren Delano

President and Director

(Co-Principal Executive Officer)

EX-31.3

Exhibit 31-3

CERTIFICATION

I, Dennis J. Welhouse, certify that:

1.	I have reviewed this Form 10-Q of Lexington Precision Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 13, 2007

/s/ Dennis J. Welhouse

Dennis J. Welhouse

Senior Vice President,

Chief Financial Officer, and Secretary

(Principal Financial Officer)

EX-32.1

Exhibit 32-1

Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

     In connection with the Quarterly Report of Lexington Precision Corporation, a Delaware corporation (the “Company”), on Form 10-Q for the period ended September 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the Chairman of the Board, hereby certifies pursuant to 18 U.S.C. §1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that, to the undersigned’s knowledge other than, with respect to clause (1) below, the timing of the Report:

     (1) the Report of the Company filed today pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), fully complies with the requirements of Section 13(a) of the Exchange Act; and

     (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael A. Lubin

Michael A. Lubin

Chairman of the Board

(Co-Principal Executive Officer)

November 13, 2007

A signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Company’s Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Exchange Act. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

EX-32.2

Exhibit 32-2

Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

     In connection with the Quarterly Report of Lexington Precision Corporation, a Delaware corporation (the “Company”), on Form 10-Q for the period ended September 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the President, hereby certifies pursuant to 18 U.S.C. §1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that, to the undersigned’s knowledge other than, with respect to clause (1) below, the timing of the Report:

     (1) the Report of the Company filed today pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), fully complies with the requirements of Section 13(a) of the Exchange Act; and

     (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Warren Delano

Warren Delano

President

(Co-Principal Executive Officer)

November 13, 2007

A signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Company’s Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Exchange Act. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

EX-32.3

Exhibit 32-3

Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

     In connection with the Quarterly Report of Lexington Precision Corporation, a Delaware corporation (the “Company”), on Form 10-Q for the period ended September 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the Chief Financial Officer, hereby certifies pursuant to 18 U.S.C. §1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that, to the undersigned’s knowledge other than, with respect to clause (1) below, the timing of the Report:

     (1) the Report of the Company filed today pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), fully complies with the requirements of Section 13(a) of the Exchange Act; and

     (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Dennis J. Welhouse

Dennis J. Welhouse

Senior Vice President,
Chief Financial Officer, and

Secretary

(Principal Financial Officer)

November 13, 2007

A signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Company’s Quarterly Report on Form 10-Q pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Exchange Act. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.