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                                                                    EXHIBIT 10.1

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                               EXCHANGE AGREEMENT

                          Dated as of December 18, 2003

                                  By and Among

                        Lexington Precision Corporation,

                                 Warren Delano,

                                       and

                                Michael A. Lubin

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                                TABLE OF CONTENTS

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                                                                                                   Page
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Section I. Description of Transaction; Exchange of the Junior Subordinated Notes................     1

   1.1      Description of Transaction..........................................................     1
   1.2      Exchange............................................................................     2

Section II. Closing Date; Delivery..............................................................     2

   2.1      Closing Date........................................................................     2
   2.2      Transactions at Closing; Delivery...................................................     2

Section III. Representations and Warranties of the Company......................................     2

   3.1      Organization and Standing; Restated Certificate of Incorporation and By-Laws........     2
   3.2      Corporate Power.....................................................................     3
   3.3      Authorization; Enforceability.......................................................     3
   3.4      Exchange Shares and Warrant Shares..................................................     3
   3.5      Compliance with Other Instruments...................................................     3
   3.6      Amended Exchange Offer..............................................................     3
   3.7      Litigation, Etc.....................................................................     3
   3.8      Governmental Consent, Etc...........................................................     4
   3.9      Disclosure..........................................................................     4
   3.10     Financial Condition.................................................................     4
   3.11     No Change...........................................................................     4
   3.12     Exemption from Registration.........................................................     5

Section IV. Representations and Warranties of the Holders.......................................     5

   4.1      Investment..........................................................................     5
   4.2      Experience and Information..........................................................     5
   4.3      Additional Representation...........................................................     6
   4.4      Title...............................................................................     6
   4.5      No Litigation.......................................................................     6
   4.6      Governmental Consents and Approvals.................................................     6

Section V. Certain Covenants....................................................................     6

   5.1.     Basic Financial Information.........................................................     7
   5.2      Filing of Reports under the 1934 Act................................................     7
   5.3      Assignability of Contractual Rights.................................................     7
   5.4      Obligations upon Merger or Consolidation............................................     7

Section VI. Restriction on Transferability of Securities; Compliance with 1933 Act..............     8

   6.1      Restriction on Transferability......................................................     8
</TABLE>

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<TABLE>
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   6.2      Restrictive Legend..................................................................     8

Section VII. Release and Waiver.................................................................     9

   7.1      Release.............................................................................     9
   7.2      Waiver..............................................................................     9
   7.3      Definition..........................................................................     9

Section VIII. Miscellaneous.....................................................................    10

   8.1      Registration Rights.................................................................    10
   8.2      Governing Law; Consent to Forum.....................................................    10
   8.3      Successors and Assigns..............................................................    10
   8.4      Titles..............................................................................    10
   8.5      Severability........................................................................    10
   8.6      Counterparts........................................................................    10
   8.7      Information Confidential............................................................    10
   8.8      Limitation of Remedies..............................................................    11
   8.9      Construction........................................................................    11
   8.10     Several Obligations.................................................................    11
</TABLE>

Exhibit A         Form of New Junior Note
Exhibit B         Form of Warrant Agreement

                                     - ii -
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                               EXCHANGE AGREEMENT

                  THIS EXCHANGE AGREEMENT (this "Agreement") is made as of
December 18, 2003 by and among Lexington Precision Corporation, a Delaware
corporation (the "Company"), Warren Delano ("Delano" or "Holder") and Michael A.
Lubin ("Lubin" or "Holder" and, together with Delano, the "Holders").

                  WHEREAS, Lubin is the holder of record and beneficial owner of
100% of the outstanding principal amount of the Company's Junior Subordinated
Non-Convertible Notes due May 1, 2000 (the "Junior Subordinated Notes"); and

                  WHEREAS, the Company has failed to make to the Holders
quarterly interest payments that were due on its Junior Subordinated Notes and
its Junior Subordinated Convertible Increasing Rate Notes due May 1, 2000
("Junior Subordinated Convertible Increasing Rate Notes" and, together with the
Junior Subordinated Notes, the "Junior Notes") in the aggregate amount of
$235,469.63 (the "Defaulted Interest"); and

                  WHEREAS, as a condition to consummation of the Company's
exchange offer (the "Amended Exchange Offer") for its 12 3/4% Senior
Subordinated Notes due February 1, 2000 (the "12 3/4% Senior Subordinated
Notes"), made pursuant to the Amended Offering Circular dated March 10, 2003
(the "Amended Offering Circular") and the Offering Circular Supplement dated
September 18, 2003 (the "Offering Circular Supplement"), the Company intends to
exchange the Junior Subordinated Notes and the Defaulted Interest in accordance
with the terms of this Agreement (the "Restructuring"); and

                  WHEREAS, the Holders and the Company wish to enter into the
Restructuring on the terms and conditions set forth in this Agreement.

                  NOW, THEREFORE, in consideration of the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:

                                   Section I.

     Description of Transaction; Exchange of the Junior Subordinated Notes

                  1.1      Description of Transaction.

                           (a)      Junior Subordinated Notes. Lubin proposes to
exchange with the Company, and the Company proposes to exchange with Lubin and
retire, all of the Junior Subordinated Notes upon delivery by the Company of
units (the "Units"), consisting of (i) new junior subordinated notes with a
maturity date of November 1, 2009 and an interest rate of 13% (the "New Junior
Notes"), substantially in the form of Exhibit A hereto, in the principal amount
of $346,667 and (ii) warrants (the "Warrants") to purchase 3,467 shares (the
"Warrant Shares") of common stock of the Company, par value $.25 per share (the
"Common Stock") pursuant to a Warrant Agent Agreement in substantially the form
of Exhibit B hereto (the "Warrant Agreement").

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                           (b)      Defaulted Interested. Each of the Holders
proposes to exchange with the Company, and the Company proposes to exchange with
the Holders and cancel all outstanding Defaulted Interest upon delivery by the
Company of 103,731 shares of Common Stock (the "Exchange Shares," together with
the Units, the "Exchange Consideration").

                  1.2      Exchange. Subject to the terms and conditions hereof,
upon completion of the Amended Exchange Offer, at the Closing provided for in
Section 2.1, (a) the Company shall issue to Lubin, and the Lubin shall acquire
from the Company, the Units in exchange for the Junior Subordinated Notes, (b)
the Company shall issue to the Holders and the Holders shall acquire from the
Company, the Exchange Shares in exchange for the Defaulted Interest, and (c) the
Releases (as hereinafter defined) shall become effective. The Holders hereby
consent to the Restructuring and all such actions to be taken by the Company in
connection therewith.

                                   Section II.

                             Closing Date; Delivery

                  2.1      Closing Date. Subject to the terms and conditions of
this Agreement, the closing of the Restructuring (the "Closing") shall be held
on the date of the consummation of the Amended Exchange Offer (the "Closing
Date") or such later date as the parties may mutually agree upon in writing.

                  2.2      Transactions at Closing; Delivery. At the Closing,
and upon completion of the Amended Exchange Offer, the Company shall deliver to
the Holders, in accordance with Section 1.2 hereof, in exchange for the Junior
Notes and the Defaulted Interest, the Exchange Consideration, which shall be
delivered to each Holder in such amounts as are set forth opposite the name of
such Holder on the signature page hereto.

                                  Section III.

                  Representations and Warranties of the Company

                  The Company hereby represents and warrants to the Holders as
follows:

                  3.1      Organization and Standing; Restated Certificate of
Incorporation and By-Laws. The Company is a corporation validly existing and in
good standing under the laws of the State of Delaware. The Company has all
requisite corporate power and authority to own and operate its properties and
assets and to carry on its business as presently conducted. The Company is
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the ownership, leasing, or operation of its
properties or the nature of its activities makes such qualification necessary,
except where the failure to so qualify would not have a material adverse effect
on the business, operations, or financial condition of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"). The Company has
made available to the Holders copies of its Restated Certificated of
Incorporation and By-Laws, as amended. Said copies are true, correct and
complete and contain all amendments thereto.

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                  3.2      Corporate Power. The Company has all requisite
corporate power and authority to execute and deliver this Agreement, to issue
the Exchange Consideration in the manner contemplated by this Agreement, and to
carry out and perform its obligations hereunder.

                  3.3      Authorization; Enforceability. All corporate action
on the part of the Company necessary for the authorization, execution, delivery,
and performance of this Agreement and the consummation of the transactions
contemplated hereby, and for the issuance and delivery of the Exchange
Consideration has been taken. This Agreement is a valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms.
Upon completion of the Closing, the New Junior Notes, the Warrants, and the
Warrant Agreement will be valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms.

                  3.4      Exchange Shares and Warrant Shares. The Exchange
Shares and the Warrant Shares are duly authorized, and upon issuance thereof,
will be validly issued, fully paid and nonassessable. The Company has reserved
such number of shares of the authorized and unissued Common Stock of the Company
as may be necessary to provide for the issuance of all Warrant Shares issuable
from time to time upon the exercise of the Warrants in accordance with their
terms.

                  3.5      Compliance with Other Instruments. The execution,
delivery and performance of this Agreement by the Company, the issuance and
delivery of the Exchange Consideration, and the consummation of the transactions
contemplated hereby, will not (a) as of the Closing Date, result in any
violation of or constitute any default under the Company's Restated Certificate
of Incorporation or By-Laws, any material agreement, instrument or indenture to
which the Company is a party or by which it is bound, or any law, rule or
regulation applicable to the Company or (b) except as expressly provided by this
Agreement or as contemplated in connection with the Restructuring, result in the
creation as of the Closing Date of any mortgage, pledge, lien, encumbrance or
charge upon any of the properties or assets of the Company pursuant thereto.

                  3.6      Amended Exchange Offer. The Company has made
available to the Holders copies of the Amended Offering Circular and the
Offering Circular Supplement (collectively, the "Amended Exchange Offer
Materials") in respect of the Amended Exchange Offer and the New Indenture (as
defined in the Amended Exchange Offer Materials). The Company has all requisite
corporate power and authority to execute and deliver the New Indenture and to
carry out and perform the Amended Exchange Offer and its obligations under the
New Indenture.

                  3.7      Litigation, Etc. There are no actions or proceedings
pending or, to the knowledge of the Company, threatened against the Company or
its subsidiaries or any of their respective properties which relate to or call
into question the validity or legality of this Agreement, the issuance and
delivery of the Exchange Consideration, or the other transactions contemplated
hereby, which either individually or in the aggregate can reasonably be expected
to have a Material Adverse Effect.

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                  3.8      Governmental Consent, Etc.

                           (a)      Except for the filing of a current report on
Form 8-K, as set forth in paragraph 3.8(b) hereof and as contemplated by Section
VI hereof, no consent, approval, license, or authorization of, or designation,
declaration, notification, registration, qualification, or filing with (each, an
"Approval") any governmental authority on the part of the Company is required in
connection with the valid execution, delivery and performance of this Agreement,
the issuance and delivery of the Exchange Consideration, or the consummation of
any other transaction contemplated hereby.

                           (b)      Any required Approval under applicable
federal securities laws and state Blue Sky laws of the issuance and delivery of
the Exchange Consideration and the 12% Senior Subordinated Notes due November 1,
2009, and Warrants being issued pursuant to the Amended Exchange Offer has been
obtained or made on or before the date hereof or will have been obtained or made
prior to the Closing or within the applicable period for obtaining such
Approval.

                  3.9      Disclosure. Neither this Agreement, nor any of the
Company's periodic reports or forms, as amended, filed with the Securities and
Exchange Commission (the "Commission"), as of the respective dates thereof after
giving effect to any subsequent amendments thereof, contained any untrue
statement of a material fact or omitted to state any material fact necessary in
order to make the statements contained herein or therein not misleading in light
of the circumstances under which such statements were made.

                  3.10     Financial Condition. Assuming the ability of the
Company to continue as a going concern, the consolidated balance sheets of the
Company and its subsidiaries as at December 31, 2001 and 2002, and the related
consolidated statements of operations, of common stockholders' equity, and of
cash flows (together with the notes thereto) for the fiscal years ended on such
dates, reported on by Ernst & Young LLP, and the unaudited consolidated balance
sheet of the Company as of September 30, 2003, and the related unaudited
consolidated statements of operations and cash flows (together with the notes
thereto) for the period then ended, copies of which have heretofore been
furnished to the Holders, present fairly (in each case, after giving effect to
any subsequent amendments thereto and subject, in the case of the interim
statements described above, to normal year-end adjustments) the consolidated
financial condition of the Company as at such dates, and the consolidated
results of operations and consolidated cash flows of the Company and its
subsidiaries for the fiscal periods then ended. Assuming the ability of the
Company to continue as a going concern, all such consolidated financial
statements, as amended, including the related schedules and notes thereto, have
been prepared in accordance with generally accepted accounting principles
("GAAP") applied consistently throughout the periods involved.

                  3.11     No Change. Since September 30, 2003, there has been
no material adverse change in the business, operations, or financial condition
(other than those changes affecting generally the economy or any industry in
which the Company operates) of the Company or its subsidiaries except as set
forth on Schedule 3.11 hereto.

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                  3.12     Exemption from Registration. Based upon the
representations and warranties of the Holders contained in Section IV of this
Agreement, and assuming compliance by the Holders and any transferee thereof
with the terms of this Agreement and with the transfer restrictions set forth on
the Warrants and in the Warrant Agent Agreement, the issuance of the Exchange
Consideration is exempt from the registration requirement of Section 5 of the
Securities Act of 1933, as amended (the "1933 Act").

                                   Section IV.

                  Representations and Warranties of the Holders

                  Each of the Holders hereby severally (and not jointly and
severally) represents and warrants to the Company that:

                  4.1      Investment. The Exchange Consideration and the
Warrant Shares underlying the Warrants (together with any securities issued in
respect thereof upon any stock split, stock dividend, recapitalization, or
similar event, the "Restricted Securities"), will be acquired for his own
account, and he has no present intention of selling, granting participations in,
or otherwise distributing any of the Restricted Securities to be issued to him
in any transaction that would be in violation of the securities laws of the
United States of America or any state or other jurisdiction thereof. Such Holder
acknowledges that the Restricted Securities will not be registered under the
1933 Act, on the basis that the issuance of securities hereunder is exempt from
registration under the 1933 Act, and that the Company's reliance on such
exemption is predicated on the representations set forth in this Section IV. In
the absence of an effective registration statement under the 1933 Act covering
any of the Restricted Securities, he will sell, transfer or otherwise dispose of
such securities only in compliance with applicable law and then only in
accordance with the provisions of Section VI of this Agreement, the terms of the
Warrants, and the Warrant Agent Agreement. Such Holder understands that the
Restricted Securities may not be sold, transferred, or otherwise disposed of
without registration under the 1933 Act or the availability of an exemption
therefrom and that in the absence of such registration or exemption, the
Restricted Securities must be held indefinitely. Such Holder is aware that the
Company is making no representation that the applicable conditions of Rule 144
promulgated under the 1933 Act or any other exemption from registration under
the 1933 Act will be met in the future.

                  4.2      Experience and Information. Such Holder (a) is an
"accredited investor" within the meaning of Rule 501(a) promulgated under the
1933 Act and an executive officer and director of the Company; (b) has reviewed
this Agreement, including all Exhibits hereto, and has reviewed all of the
Company's periodic reports and amendments thereto and forms and amendments
thereto prepared for filing with the Commission that have been made available to
such Holder and the financial statements included in such periodic reports and
forms and the Amended Exchange Offer Materials; and (c) has had, during the
course of the transactions contemplated hereby and prior to his receipt of the
Exchange Consideration, the opportunity to ask questions of, and has received
answers from, the Company concerning the transactions contemplated hereby and to
obtain any additional information that the Company possesses or could acquire
without unreasonable effort or expense; provided, however, that, except as set
forth in Section 8.8, no such investigation by any Holder shall limit, diminish,
or constitute a

                                     - 5 -
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waiver of any representation or warranty made under this Agreement by the
Company or impair any rights that such Holder may have with respect thereto.

                  4.3      Additional Representation. Such Holder has all
requisite power and authority to execute and deliver this Agreement and to carry
out and perform his obligations hereunder. The execution, delivery, and
performance by such Holder of this Agreement and the consummation of the
transactions contemplated hereby will not result in any violation of, or
conflict with, any term or condition of any material agreement, instrument, or
indenture to which such Holder is a party or by which he is bound or any law,
rule, or regulation applicable to him. This Agreement has been duly executed and
delivered by such Holder and constitutes a valid and binding obligation of such
Holder enforceable against such Holder in accordance with its terms. Such Holder
has not assigned or otherwise conveyed, and no person or entity is the successor
to, any of such Holder's rights in, to, or under the Junior Subordinated Notes
or the Junior Subordinated Convertible Notes beneficially owned by him and such
Holder is the only person presently entitled to exercise any of his rights in,
to or under such Junior Subordinated Notes or Junior Subordinated Convertible
Notes.

                  4.4      Title. Such Holder is the lawful owner of record of
the principal amount of Junior Subordinated Notes and Defaulted Interest set
forth opposite his name on the signature page hereof and has full right, power
and authority to enter into and perform this Agreement and forever relinquish,
forego, release and discharge his right to receive the Defaulted Interest in
accordance with the terms of this Agreement, which right is owned by such Holder
free and clear of any security interests, pledges, mortgages, liens, claims,
charges and encumbrances of any nature whatsoever.

                  4.5      No Litigation. There are no actions, suits,
proceedings, or investigations pending or, to the knowledge of such Holder,
threatened against such Holder that, either individually or in the aggregate,
question the validity of this Agreement, or any action taken or to be taken in
connection herewith or in connection with the execution, delivery, and
performance by such Holder of this Agreement and the consummation of the
transactions contemplated hereby.

                  4.6      Governmental Consents and Approvals. No consent,
approval, order, or authorization of, or registration, qualification, or filing
with, any court or governmental authority is required to be obtained by such
Holder in connection with the execution, delivery, and performance of this
Agreement and/or the consummation of the transactions contemplated hereby.

                                   Section V.

                                Certain Covenants

                  The Company hereby covenants and agrees that from and after
the Closing Date so long as any of the New Junior Notes shall remain
outstanding:

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                  5.1.     Basic Financial Information. So long as Lubin is a
holder, beneficially or of record, of any of the New Junior Notes, the Company
will furnish or make available the following reports to Lubin:

                           (a)      As soon as practicable after the end of each
fiscal year, and in any event within 90 days thereafter, consolidated balance
sheets of the Company and its subsidiaries as of the end of such fiscal year,
and consolidated statements of operations, stockholders' equity, and cash flows
of the Company and its subsidiaries for such year, prepared in accordance with
GAAP consistently applied and setting forth in comparative form the
corresponding figures for the previous fiscal year, all in reasonable detail,
accompanied by a report of an independent public accounting firm of nationally
recognized standing selected by the Company;

                           (b)      As soon as practicable after the end of the
first, second and third quarterly accounting periods in each fiscal year of the
Company and its subsidiaries and in any event within 45 days thereafter,
consolidated balance sheets of the Company and its subsidiaries as of the end of
each such quarterly period, and consolidated statements of operations,
stockholders' equity, and cash flows of the Company and its subsidiaries for
such period and for the current fiscal year to date, prepared in accordance with
GAAP consistently applied and setting forth in comparative form the
corresponding figures for the corresponding periods of the previous fiscal year,
all in reasonable detail; and

                           (c)      As soon as practicable, copies of all
financial statements, proxy materials, or reports sent to the stockholders of
the Company and all reports or financial registration statements, including
accompanying prospectuses, filed with the Commission pursuant to the 1933 Act.

                  5.2      Filing of Reports under the 1934 Act. To the extent
applicable, the Company shall comply with all reporting requirements of the
Securities Exchange Act of 1934 Act, as amended (the "1934 Act"), and shall
comply with all other public information reporting requirements of the
Commission and take such further action, all to the extent required from time to
time as a condition to the availability of an exemption from the 1933 Act (under
Rule 144 thereof (as amended from time to time) or any similar or successor rule
thereto or otherwise) for the sale by the Holders of any of the Restricted
Securities. Upon request of the Holders, the Company will promptly furnish a
written statement as to its compliance with such requirements. The Company shall
cooperate with the Holders in supplying such information as may be necessary for
the Holders to complete and file any information reporting forms presently or
hereafter required by the Commission as a condition to the availability of an
exemption from the 1933 Act (under Rule 144 thereof or otherwise) for the sale
by the Holders of any Restricted Securities.

                  5.3      Assignability of Contractual Rights. Except with
respect to Section 5.4 hereof, the Holders' rights under this Section V are not
assignable or otherwise transferable.

                  5.4      Obligations upon Merger or Consolidation. In the
event of a merger or consolidation of the Company with or into another
corporation in which the Company is not the surviving corporation (the surviving
corporation to such merger or consolidation hereinafter being referred to as the
"Surviving Corporation") and in which securities of the Surviving

                                     - 7 -
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Corporation are issued to Holders in respect of the then outstanding shares of
Common Stock issued pursuant to this Agreement that are Restricted Securities,
the Company shall ensure that the Surviving Corporation shall assume all
obligations of the Company under this Agreement.

                                   Section VI.

     Restriction on Transferability of Securities; Compliance with 1933 Act

                  6.1      Restriction on Transferability. The Restricted
Securities shall not be transferable except upon compliance with the conditions
specified in this Section VI.

                  6.2      Restrictive Legend.

                           (a)      Each certificate representing any of the New
Junior Notes and the Exchange Shares shall be stamped or otherwise imprinted
with a legend in substantially the following form (in addition to any legend
required under applicable state securities laws):

                  THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
                  ACT OF 1933, AS AMENDED. NO SALE OR DISPOSITION MAY BE
                  EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED
                  THERETO, AN OPINION OF COUNSEL FOR THE HOLDER, SATISFACTORY TO
                  THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
                  SECURITIES ACT OF 1933, AS AMENDED, OR RECEIPT OF A NO-ACTION
                  LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION. THESE
                  SECURITIES SHALL NOT BE TRANSFERRED OR PLEDGED EXCEPT IN
                  ACCORDANCE WITH SECTION VI OF A CERTAIN EXCHANGE AGREEMENT
                  DATED AS OF DECEMBER 18, 2003 WITH THE COMPANY.

                           (b)      Each certificate representing any of the
Warrants or the Warrant Shares shall be stamped or otherwise imprinted with a
legend in substantially the form as provided in the Warrants or the Warrant
Agreement (in addition to any legend required under applicable state securities
laws).

                           (c)      An appropriate "stop transfer" order may be
placed with the Company's transfer agent to each such certificate referenced in
Sections 6.2(a) or 6.2(b).

                           (d)      Any legend endorsed on an instrument
pursuant to Sections 6.2(a) or 6.2(b) hereof and the stop transfer instructions
with respect to such Restricted Securities shall be removed, and the Company
shall issue an instrument without such legend to the holder of such Restricted
Securities, if (i) such Restricted Securities are registered under the 1933 Act
and a prospectus meeting the requirements of the 1933 Act is available (provided
that, if all of the shares represented by the certificate(s) have not been sold
by the conclusion of the offering period, the holder of the Restricted
Securities shall submit to the Company all certificates representing securities
from which the legends were removed but that were not sold in the offering, and
the Company shall, with respect to those remaining securities, reissue
certificates

                                     - 8 -
<PAGE>

representing them but with an appropriate restrictive legend and stop transfer
order, all in accordance with Sections 6.2(a), 6.2(b) or 6.2(c) hereof), or (ii)
such holder provides the Company with an opinion of counsel who shall be
reasonably satisfactory to the Company, in form and substance reasonably
satisfactory to the Company, that a public sale, transfer, or assignment of such
Restricted Securities may be sold to the public without registration, or (iii)
such Restricted Securities may be sold to the public without restriction
pursuant to Rule 144 promulgated under the 1933 Act or any similar provision.

                                  Section VII.

                               Release and Waiver

                  7.1      Release. (a) Effective upon the Closing and without
any further action or writing on the part of either Holder, each of the Holders,
for himself and on behalf of his respective heirs, personal representatives, and
assigns (all, collectively referred to in this Section VII as "Releasors"), does
hereby irrevocably and unconditionally release and forever discharge the
Company, and its present or former affiliates, and each of their respective
stockholders, directors, officers, employees, advisors, attorneys, and
controlling persons, and all persons acting by, through, under, in concert,
and/or in combination with any of them, as well as their respective successors,
heirs, and assigns (all, collectively referred to in this Section VII as
"Releasees"), from any and all manner of claims, actions, causes of action,
suits at law, in equity or otherwise, known or unknown, suspected or
unsuspected, fixed or contingent, and equitable or ownership interests
(hereinafter called "Claims"), that each of the Releasors now has or hereafter
can, shall, or may have against any one or all of the Releasees by reason of any
action, omission, conduct, transaction, matter, cause, or thing whatsoever from
the beginning of the world to the Closing Date, arising out of or in any way
related to the Defaulted Interest. Each of the Holders, for himself and on
behalf of his related Releasors, acknowledges that he understands that a general
release may not extend to Claims that the Holder or the other related Releasors
do not know or suspect to exist in their favor at the time of executing this
Agreement, which if known by them might have materially affected the Holder's
decision to consummate the Restructuring and to execute and deliver this
Agreement and agree to the release contained herein. Each of the Holders, for
himself and on behalf of his related Releasors, being so advised, hereby
expressly waives any rights such Releasors may have with respect to such unknown
Claims.

                  7.2      Waiver. Effective upon the Closing and without any
further action or writing on the part of either Holder, each of the Holders
hereby waives any and all defaults and events of default on the part of the
Company and/or its directors or officers existing at the Closing (and any and
all rights of the Holders in respect thereof) in respect of the Junior Notes,
including, without limitation, the Defaulted Interest.

                  7.3      Definition. For purposes of this Agreement, the
releases set forth in Section 7.1 hereof and the waiver set forth in Section 7.2
hereof shall be collectively referred to as the "Releases."

                                     - 9 -
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                                  Section VIII.

                                  Miscellaneous

                  8.1      Registration Rights. The Restricted Securities shall
be entitled to the registration rights existing under that that certain
Recapitalization Agreement, dated as of April 27, 1990, between the Company and
L&D Woolens Limited Partnership (the "Recapitalization Agreement"), which rights
were assigned to the Holders pursuant to that certain Restructuring Agreement,
dated as of December 10, 1993, among the Company and each of the Holders, and
such Restricted Securities shall constitute "Registrable Securities" as defined
therein.

                  8.2      Governing Law; Consent to Forum. Except to the extent
that the General Corporation Law of the State of Delaware may govern this
Agreement by virtue of the fact that the Company is incorporated under the laws
of the State of Delaware, this Agreement shall be governed in all respects by
the internal laws of the State of New York without reference to its principles
of conflict of laws. Any action or suit in connection with this Agreement may be
brought in a court of record of the State of New York or a United States
District Court situated in the State of New York, the parties to this Agreement
hereby consenting to the nonexclusive jurisdiction of each thereof.

                  8.3      Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors and assigns of the parties hereto. In the event of
the distribution of any of the New Junior Notes then held by Lubin to any
person(s), upon delivery to the Company of a written instrument (reasonably
satisfactory in form and in substance to the Company pursuant to which such
person(s) agree to remain subject to the obligations of Lubin hereunder), the
provisions hereof (except as otherwise expressly provided herein) shall inure to
the benefit of, and be binding upon, such person(s) as if such person(s)
constituted Lubin.

                  8.4      Titles. The titles of the sections of this Agreement
are for convenience of reference only and are not to be considered in construing
this Agreement.

                  8.5      Severability. Any provision or provisions hereof
found to be unenforceable or prohibited by law will be ineffective only to the
extent of such unenforceability or prohibition and no other provision of this
Agreement will be invalidated thereby.

                  8.6      Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.

                  8.7      Information Confidential. Each Holder acknowledges
that certain of the information received or to be received by him pursuant
hereto may be confidential and proprietary and for his use only, and such Holder
will not use such confidential or proprietary information in violation of the
1934 Act or any other law, rule or regulation and will use its reasonable
efforts to maintain the confidentiality of any confidential information so
received by it which is otherwise not available from other sources.

                                     - 10 -
<PAGE>

                  8.8      Limitation of Remedies. No Holder shall have any
right or remedy in respect of any breach of representation or warranty of which
he had actual knowledge as of the date of this Agreement.

                  8.9      Construction. The language used in this Agreement
shall be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction shall be applied against any party.
This Agreement is the joint drafting project of the parties hereto and each
provision has been subject to negotiation and agreement and shall not be
construed for or against any party as drafter thereof.

                  8.10     Several Obligations. The obligations of Holders
hereunder shall be several (and not joint and several).

                           [SIGNATURE PAGE TO FOLLOW]

                                     - 11 -
<PAGE>

                  IN WITNESS WHEREOF, the Company and each of the Holders have
caused this Agreement to be duly executed and delivered in its name and on its
behalf, all as of the date first written above.

                                     LEXINGTON PRECISION CORPORATION

                                     By:   /s/ Dennis J. Welhouse
                                        ------------------------------------
                                        Dennis J. Welhouse
                                        Senior Vice President
                                        and Chief Financial Officer

<TABLE>
<CAPTION>
 Principal Amount                                Number
     of Junior                Number          of Shares of
Subordinated Notes         of Warrants        Common Stock
------------------         -----------        ------------
<S>                        <C>                <C>                <C>
       -0-                     -0-                 7,632           /s/ Warren Delano
                                                                 ------------------------
                                                                 Warren Delano

    $346,667                  3,467               96,099           /s/ Michael A. Lubin
                                                                 ------------------------
                                                                 Michael A. Lubin
</TABLE>

                                     - 12 -
<PAGE>

                                    Exhibit A

                             Form of New Junior Note

<PAGE>

                                    Exhibit B

                            Form of Warrant Agreement

<PAGE>

                                  Schedule 3.11

                                    No Change