LEXINGTON PRECISION CORP
EXHIBIT 10.7
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>9
<FILENAME>l89594aex10-7.txt
<DESCRIPTION>EXHIBIT 10.7
<TEXT>
<PAGE>   1
                                                                    Exhibit 10-7




                                    AGREEMENT


        This Agreement dated as of July 31, 2001 (the "Agreement"), between
Lexington Precision Corporation, a Delaware corporation (the "LPC"), and The CIT
Group/Equipment Financing, Inc. ("Lender").

        WHEREAS, Lender and LPC have entered into a certain Loan and Security
Agreement dated as of March 19, 1997, including Rider A thereto, as amended, and
certain supplements, documents, instruments, and agreements in connection
therewith and LPC has executed certain promissory notes in connection therewith
(all of the foregoing, as amended, modified, and supplemented, being referred to
collectively as the "Loan Documents").

        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:

         1.       Waiver. Subject to paragraph 2, hereof, the Lender hereby
waives, until November 1, 2001, any Default or Event of Default under any of the
Loan Documents, resulting solely from the failure of LPC to pay any principal or
interest due on February 1, 2000, May 1, 2000, August 1, 2000, November 1, 2000,
February 1, 2001, May 1, 2001, or August 1, 2001, in respect of (a) LPC's 14%
Junior Subordinated Notes due May 1, 2001, (b) LPC's Junior Subordinated
Convertible Increasing Rate Notes due May 1, 2000, and/or (c) LPC's 12-3/4%
Senior Subordinated Notes due February 1, 2000 (the indebtedness referred to in
clauses (a), (b) and (c) is referred to herein as the "Other Indebtedness").

         2.       Rescission of Waivers. The foregoing waivers shall be
automatically rescinded, without notice to LPC, in the event that the holder of
any Other Indebtedness or trustee in respect thereof seeks to accelerate the
maturity of any such Other Indebtedness or to enforce or exercise any remedies
in respect thereto.

         3.       Effective Date.

         This Agreement shall be deemed effective as of July 31, 2001.

         4.       Representations and Warranties. Each of the parties represents
and warrants that: (a) the execution, delivery, and performance of this
Agreement have been duly authorized by all requisite action on its part; and (b)
this Agreement has been duly executed and delivered by it and constitutes its
legal, valid, and binding agreement, enforceable against it in accordance with
its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
the enforceability of creditors' rights generally or by general equitable
principles.

         5.       No Other Amendments.


                  Except as set forth herein, all terms and provisions of the
Loan Documents among Lender and LPC shall remain in full force and effect.
Except as expressly set forth herein, no other or further amendment, waiver or
consent is implied by, and LPC shall not be entitled to, any other or further
amendment, waiver or consent by virtue of the provisions of this Agreement. In
addition, without limiting the foregoing, the waivers of Lender set forth herein
do not constitute an agreement to, and LPC acknowledges that Lender may decline
to, grant any other or further waivers with respect to the subject

<PAGE>   2

matter hereof or any other matters regardless of whether or not there occurs any
change in facts or circumstances relating to LPC.

         6.       General Provisions.


                  (a) Defined Terms. Capitalized terms used herein, unless
otherwise defined herein, shall have the meaning ascribed thereto in the Loan
Documents.


                  (b) Counterparts. This Agreement may be executed by the
parties in any number of counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. This
Agreement may be signed by facsimile transmission of the relevant signature
pages hereof.

                  (c) Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the internal laws of the State of
New York.


                  (d) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the parties
hereto.


                  (e) Headings. The paragraph headings of this Agreement are for
convenience of reference only and are not to be considered in construing this
Agreement.



        IN WITNESS WHEREOF, LPC and Lender have caused this Agreement to be duly
executed and delivered as of the date first written above.

                                        LEXINGTON PRECISION CORPORATION



                                        By:     Warren Delano
                                                --------------------------------
                                        Name:   Warren Delano
                                                --------------------------------
                                        Title:  President
                                                --------------------------------





                                        THE CIT GROUP/EQUIPMENT FINANCING, INC.



                                        By:     J. K. Beatty
                                                --------------------------------
                                        Name:   J. K. Beatty
                                                --------------------------------
                                        Title:  PVP
                                                --------------------------------






                                      -2-

</TEXT>
</DOCUMENT>
