IN THE UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: COLLINS & AIKMAN CORPORATION,

et al.1 Debtors. ) ) ) ) ) ) ) ) Chapter 11 Case No. 05-55927 (SWR) (Jointly Administered) (Tax Identification #13-3489233) Honorable Steven W. Rhodes

STIPULATION RESOLVING MOTION FOR ADMINISTRATIVE CLAIM FILED BY THE CITY OF PORT HURON, MICHIGAN This Stipulation is made as of October 11, 2007, by and between the above-captioned debtors (collectively, the Debtors) and the City of Port Huron, Michigan (Port Huron), resolving Port Hurons motion for allowance of administrative claim [Docket No. 8010] (the Motion). WHEREAS, on May 17, 2005, the Debtors filed petitions for relief under the Bankruptcy Code, 11 U.S.C. 101-1330 (the Bankruptcy Code), in the United States Bankruptcy Court for the Eastern District of Michigan (the Bankruptcy Court); and
1 The Debtors in the jointly administered cases include: Collins & Aikman Corporation; Amco Convertible Fabrics, Inc., Case No. 05-55949; Becker Group, LLC (d/b/a/ Collins & Aikman Premier Mold), Case No. 05-55977; Brut Plastics, Inc., Case No. 05-55957; Collins & Aikman (Gibraltar) Limited, Case No. 05-55989; Collins & Aikman Accessory Mats, Inc. (f/k/a the Akro Corporation), Case No. 05-55952; Collins & Aikman Asset Services, Inc., Case No. 05-55959; Collins & Aikman Automotive (Argentina), Inc. (f/k/a Textron Automotive (Argentina), Inc.), Case No. 05-55965; Collins & Aikman Automotive (Asia), Inc. (f/k/a Textron Automotive (Asia), Inc.), Case No. 0555991; Collins & Aikman Automotive Exteriors, Inc. (f/k/a Textron Automotive Exteriors, Inc.), Case No. 05-55958; Collins & Aikman Automotive Interiors, Inc. (f/k/a Textron Automotive Interiors, Inc.), Case No. 05-55956; Collins & Aikman Automotive International, Inc., Case No. 05-55980; Collins & Aikman Automotive International Services, Inc. (f/k/a Textron Automotive International Services, Inc.), Case No. 05-55985; Collins & Aikman Automotive Mats, LLC, Case No. 05-55969; Collins & Aikman Automotive Overseas Investment, Inc. (f/k/a Textron Automotive Overseas Investment, Inc.), Case No. 05-55978; Collins & Aikman Automotive Services, LLC, Case No. 05-55981; Collins & Aikman Canada Domestic Holding Company, Case No. 05-55930; Collins & Aikman Carpet & Acoustics (MI), Inc., Case No. 05-55982; Collins & Aikman Carpet & Acoustics (TN), Inc., Case No. 05-55984; Collins & Aikman Development Company, Case No. 05-55943; Collins & Aikman Europe, Inc., Case No. 05-55971; Collins & Aikman Fabrics, Inc. (d/b/a Joan Automotive Industries, Inc.), Case No. 05-55963; Collins & Aikman Intellimold, Inc. (d/b/a M&C Advanced Processes, Inc.), Case No. 05-55976; Collins & Aikman Interiors, Inc., Case No. 05-55970; Collins & Aikman International Corporation, Case No. 05-55951; Collins & Aikman Plastics, Inc., Case No. 05-55960; Collins & Aikman Products Co., Case No. 05-55932; Collins & Aikman Properties, Inc., Case No. 0555964; Comet Acoustics, Inc., Case No. 05-55972; CW Management Corporation, Case No. 05-55979; Dura Convertible Systems, Inc., Case No. 05-55942; Gamble Development Company, Case No. 05-55974; JPS Automotive, Inc. (d/b/a PACJ, Inc.), Case No. 05-55935; New Baltimore Holdings, LLC, Case No. 05-55992; Owosso Thermal Forming, LLC, Case No. 05-55946; Southwest Laminates, Inc. (d/b/a Southwest Fabric Laminators Inc.), Case No. 05-55948; Wickes Asset Management, Inc., Case No. 05-55962; and Wickes Manufacturing Company, Case No. 05-55968.

K&E 12138930.2

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0555927071011000000000005

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WHEREAS, Port Huron filed a secured claim (the Claim) against the Debtors, on December 12, 2005, in the amount of $380,279.18, which was later designated Claim No. 2554, based on the Debtors alleged failure to timely pay real and personal property taxes that were allegedly incurred in the 2004 and 2005 tax years (collectively, the Taxes); and WHEREAS, on May 15, 2007, the Debtors filed the Complaint to Avoid the Fixing of a Statutory Lien Pursuant to 11 U.S.C. 545(2) and Other Related Relief against Port Huron, thereby commencing Adv. Proc. No. 07-05661 (the Adversary Proceeding); and WHEREAS, on August 14, 2007, Port Huron filed the Motion; and WHEREAS, the Debtors filed a response to the Motion and Port Huron filed a reply and the matter is currently scheduled for hearing on October 18, 2007; and WHEREAS, on July 18, 2007, the Bankruptcy Court entered an order [Docket No. 7827] confirming the First Amended Joint Plan of Collins & Aikman Corporation and Its Debtor Subsidiaries [Docket No. 7731] (the Plan), which, among other things, establishes the treatment of allowed claims in these chapter 11 cases; and WHEREAS, contemporaneously with the filing of this Stipulation, the parties entered into a stipulation resolving the Adversary Proceeding; and WHEREAS, the parties seek to resolve the Motion and avoid the costs and risk of conducting a hearing on the Motion. NOW, THEREFORE, in consideration of the mutual premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged, it is hereby stipulated and agreed to by and between the parties to this Stipulation as follows: 1. The Motion is hereby resolved in its entirety pursuant to the terms of the order

attached hereto as Exhibit A, and the undersigned stipulate to its entry.

}
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2.

The Bankruptcy Court shall retain jurisdiction (and the Debtors and Port Huron

consent to such retention of jurisdiction) to resolve any disputes or controversies arising from this Stipulation. Any request for relief brought before the Bankruptcy Court to resolve a dispute arising from this Stipulation shall be brought on proper notice and in accordance with relevant Federal Rules of Bankruptcy Procedure and the Local Rules for the United States Bankruptcy Court for the Eastern District of Michigan. 3. Each person who executes this Stipulation on behalf of a party hereto represents

that he or she is duly authorized to execute this Stipulation on behalf of such party. 4. This Stipulation may be executed in multiple counterparts, any of which may be

transmitted by facsimile, and each of which shall be deemed an original, but all of which together shall constitute one instrument. 5. This Stipulation shall not be modified, altered, amended or vacated without

written consent of all parties hereto. Any such modification, alteration, amendment or vacation, in whole or in part, shall be subject to the approval of the Bankruptcy Court. 6. The terms and conditions of this Stipulation shall be immediately effective and

enforceable upon the entry of the order approving this Stipulation.

}
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KIRKLAND & ELLIS LLP /s/ Scott R. Zemnick Richard M. Cieri (NY RC 6062) Joseph Serino, Jr. (NY JS 9911) Citigroup Center 153 East 53rd Street New York, New York 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 -andDavid L. Eaton (IL 3122303) Ray C. Schrock (IL 6257005) Scott R. Zemnick (IL 6276224) 200 East Randolph Drive Chicago, Illinois 60601 Telephone: (312) 861-2000 Facsimile: (312) 861-2200 -andCARSON FISCHER, P.L.C. Joseph M. Fischer (P13452) 4111 West Andover Road West - Second Floor Bloomfield Hills, Michigan 48302 Telephone: (248) 644-4840 Facsimile: (248) 644-1832 Co-Counsel for the Debtors

SCHAFER & WEINER, PLLC /s/ Daniel V. Smith Daniel V. Smith (P56047) Ryan D. Heilman (P63952) 40950 Woodward Avenue Suite 100 Bloomfield Hills, Michigan 48304 Telephone: (248) 540-3340

-andFLETCHER, FEALKO, SHOUDY & MOELLER, P.C. Gary A. Fletcher (P26823) T. Allen Francis (P66160) 522 Michigan Street Port Huron, Michigan 48060 Telephone: (810) 987-8444 Co-Counsel for Port Huron

}
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EXHIBIT A

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IN THE UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re: COLLINS & AIKMAN CORPORATION, et al.1 Debtors. ) ) ) ) ) ) ) ) Chapter 11 Case No. 05-55927 (SWR) (Jointly Administered) (Tax Identification #13-3489233) Honorable Steven W. Rhodes

ORDER APPROVING STIPULATION RESOLVING MOTION FOR ADMINISTRATIVE CLAIM FILED BY THE CITY OF PORT HURON, MICHIGAN Upon the stipulation [Docket No. ] (the Stipulation)2 by and between the

above-captioned debtors (collectively, the Debtors) and the City of Port Huron, Michigan (Port Huron) resolving the Motion For Administrative Claim filed by the City of Port Huron, Michigan [Docket No. 8010] (the Motion); it is hereby ORDERED 1. Port Huron is hereby granted an Allowed Priority Tax Claim (as defined in the

Plan) in the amount of $348,000.00(the Priority Claim).

1 The Debtors in the jointly administered cases include: Collins & Aikman Corporation; Amco Convertible Fabrics, Inc., Case No. 05-55949; Becker Group, LLC (d/b/a/ Collins & Aikman Premier Mold), Case No. 05-55977; Brut Plastics, Inc., Case No. 05-55957; Collins & Aikman (Gibraltar) Limited, Case No. 05-55989; Collins & Aikman Accessory Mats, Inc. (f/k/a the Akro Corporation), Case No. 05-55952; Collins & Aikman Asset Services, Inc., Case No. 05-55959; Collins & Aikman Automotive (Argentina), Inc. (f/k/a Textron Automotive (Argentina), Inc.), Case No. 05-55965; Collins & Aikman Automotive (Asia), Inc. (f/k/a Textron Automotive (Asia), Inc.), Case No. 0555991; Collins & Aikman Automotive Exteriors, Inc. (f/k/a Textron Automotive Exteriors, Inc.), Case No. 05-55958; Collins & Aikman Automotive Interiors, Inc. (f/k/a Textron Automotive Interiors, Inc.), Case No. 05-55956; Collins & Aikman Automotive International, Inc., Case No. 05-55980; Collins & Aikman Automotive International Services, Inc. (f/k/a Textron Automotive International Services, Inc.), Case No. 05-55985; Collins & Aikman Automotive Mats, LLC, Case No. 05-55969; Collins & Aikman Automotive Overseas Investment, Inc. (f/k/a Textron Automotive Overseas Investment, Inc.), Case No. 05-55978; Collins & Aikman Automotive Services, LLC, Case No. 05-55981; Collins & Aikman Canada Domestic Holding Company, Case No. 05-55930; Collins & Aikman Carpet & Acoustics (MI), Inc., Case No. 05-55982; Collins & Aikman Carpet & Acoustics (TN), Inc., Case No. 05-55984; Collins & Aikman Development Company, Case No. 05-55943; Collins & Aikman Europe, Inc., Case No. 05-55971; Collins & Aikman Fabrics, Inc. (d/b/a Joan Automotive Industries, Inc.), Case No. 05-55963; Collins & Aikman Intellimold, Inc. (d/b/a M&C Advanced Processes, Inc.), Case No. 05-55976; Collins & Aikman Interiors, Inc., Case No. 05-55970; Collins & Aikman International Corporation, Case No. 05-55951; Collins & Aikman Plastics, Inc., Case No. 05-55960; Collins & Aikman Products Co., Case No. 05-55932; Collins & Aikman Properties, Inc., Case No. 0555964; Comet Acoustics, Inc., Case No. 05-55972; CW Management Corporation, Case No. 05-55979; Dura Convertible Systems, Inc., Case No. 05-55942; Gamble Development Company, Case No. 05-55974; JPS Automotive, Inc. (d/b/a PACJ, Inc.), Case No. 05-55935; New Baltimore Holdings, LLC, Case No. 05-55992; Owosso Thermal Forming, LLC, Case No. 05-55946; Southwest Laminates, Inc. (d/b/a Southwest Fabric Laminators Inc.), Case No. 05-55948; Wickes Asset Management, Inc., Case No. 05-55962; and Wickes Manufacturing Company, Case No. 05-55968. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Stipulation.

K&E 12138930.2

2.

The Debtors shall pay the Priority Claim in full to Port Huron by the earlier of

(a) thirty (30) days after the Effective Date (as defined in the Plan)or (b) ninety (90) days after the date this Order is entered. Upon payment of the amount set forth in paragraph 1 of this Order, the Motion shall be deemed withdrawn with prejudice. 3. Payment of the Priority Claim in accordance with paragraphs 1 and 2 of this

Order shall fully, finally and completely satisfy the Taxes, including all the real and personal property taxes incurred in the 2004 and 2005 tax years for the following parcels and any penalties related thereto: 74-06-999-0481-850 74-06-999-0902-350 74-06-901-0130-000 74-06-900-0073-000 4. The amount of the Priority Claim includes 100% of all penalties owed to Port

Huron for the real and personal property taxes referenced in Paragraph 3 above. The difference between the amount of the Priority Claim and the actual amount the Port Huron shows as due and owing on the taxes referenced in paragraph 3 above is a result of negotiations and a reduction in the total interest amount owed on the taxes. 5. Each party to the Stipulation shall be responsible for its own fees and costs

incurred in connection with the Motion. 6. The Debtors are authorized and directed to take all actions necessary to effectuate

the relief granted pursuant to this Order and the Stipulation. 7. The terms and conditions of this Order shall be immediately effective and

enforceable upon its entry.

}
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G.

The Court retains jurisdiction with respect to all matters arising from or related to the implementation of this Order.

}
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