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 AUTHORIZING AND APPROVING THE DEBTORS ENTRY INTO AN INSURANCE PROGRAM Upon the motion (the Motion) 2 of the above-captioned debtors (collectively, the Debtors) for an order authorizing and approving the Debtors entry into an Insurance Program with AIG; it appearing that the relief requested is in the best interest of the Debtors estates, their creditors and other parties in interest; it appearing that the Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334; it appearing that this

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., C No. 05-55959; Collins & Aikman Automotive (Argentina), Inc. (f/k/a Textron Automotive ase (Argentina), Inc.), Case No. 05-55965; Collins & Aikman Automotive (Asia), Inc. (f/k/a Textron Automotive (Asia), Inc.), Case No. 0555991; Collins & Aikman Automotiv e 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 otherwise defined herein shall have the meanings set forth in the Motion.

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proceeding is a core proceeding pursuant to 28 U.S.C. 157(b)(2); it appearing that venue of this proceeding and this Motion in this District is proper pursuant to 28 U.S.C. 1408 and 1409; notice of this Motion and the opportunity for a hearing on this Motion was appropriate under the particular circumstances and that no other or further notice need by given; and after due deliberation and sufficient cause appearing therefor, it is hereby ORDERED 1. 2. 3. The Motio n is granted in its entirety. The Debtors are authorized to enter into the Insurance Program. The Debtors are authorized to take all actions necessary to effectuate the relief

granted pursuant to this Order in accordance with the Motion, and the Debtors are authorized and agree to execute all documentation reasonably necessary to enter into the Insurance Program. 4. The Debtors are authorized to enter into further renewals of the

Insurance Program without further order of the Court and this Order shall govern such renewals. 5. The Debtors are authorized and directed to pay their obligations under the

Insurance Program, including, without limitation, premium and losses, in the ordinary course of business, in accordance with the relevant terms of the Insurance Program, without further order of the Court. 6. In the event of default by the Debtors under the Insurance Program, AIG may

exercise all contractual rights in accordance with the terms of the Insurance Program as modified by the Order solely with respect to obligations of the Debtors estates which arise from and after May 17, 2005, without further order of the Court, including without limitation, its right to (a) cancel the Insurance Program, (b) foreclose on the Collateral provided under the Insurance Program, in part or in full, in which it has a security interest and which may otherwise be subject to the automatic stay under the Insurance Program, and (c) receive and apply the

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unearned or returned payments under the Insurance Program to the Debtors outstanding obligations to AIG. 7. The reimbursement obligations and any other obligations under the

Insurance Program arising on or after the Petition Date shall be administrative expenses under section 503(b) of the Bankruptcy Code. Inasmuch as the Debtors are to meet their obligations under the Insurance Program without further order of the Court, no additional proof of claim or request for payment of administrative expenses due under the Insurance Program need be filed by AIG. AIG shall be exempt from any bar date that may be issued for the filing of any proof of claim relating to administrative expenses due under the Insurance Program. 8. The Collateral held at this time by AIG on account of the Insurance Program

and all prior payments to AIG under the Insurance Program are approved, and AIG is authorized to retain and use such Collateral, or any additional or replacement collateral or security that may be provided to AIG pursuant to the terms of the Insurance Program, in accordance with the terms of the Insurance Program solely with respect to obligations of the Debtors estates which arise from and after May 17, 2005 until the expiration of the Insurance Program. 9. The escrow that was funded with $325,000 and the issuance of the letter of

credit in the amount of $10,300,000 by Collins & Aikman Products Co. to secure all obligations under the Insurance Program entered into with Collins & Aikman Corporation, which arise from and after May 17, 2005, is approved. 10. AIG may adjust, settle and pay insured claims, utilize funds provided for that

purpose, and otherwise carry out the terms and conditions of the Insurance Program, without further order of the Court.

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11.

The Insurance Program may not be altered by any plan of reorganization filed

in these chapter 11 cases, without the written consent of AIG, and shall survive any plan of reorganization filed by the Debtors. Nothing in any plan of reorganization confirmed in these cases shall impair the interests of AIG in the Collateral that it holds or receives on account of the Insurance Program or in any collateral that it may receive in accordance with this Order. 12. The Debtors rights against all Collateral held by AIG on account of the

Insurance Program, in whatever form, shall be governed by the terms of the Insurance Program and the related security documentation, and the Debtors shall not take any action against AIG on account of the Insurance Program in the Bankruptcy Court that is inconsistent with the terms of such documentation, including, without limitation, actions for turnover or estimation. During the pendency of the Debtors chapter 11 cases, AIG shall not be required, except as otherwise provided in the underlying contracts of the Insurance Program to return any part of the Collateral it now holds for the Insurance Program without adequate protection for its interest in such Collateral to be returned pursuant to section 361(1) of the Bankruptcy Code. 13. This Order shall bind the Debtors, their successors in interest and assigns,

including, without limitation, any trustee in bankruptcy. 14. Notwithstanding any provision in the contracts for the Insurance Program to

the contrary, this Order shall control with respect to any conflicts between such contracts and the provisions of this Order. 15. The terms and conditions of this Order shall be immediately effective and

enforceable upon its entry. 16. The Court retains jurisdiction with respect to all matters arising from or

related to the implementation of this Order; provided, however, that nothing herein shall

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supersede the arbitration provision in the Insurance Program in connection with disputes arising therein.
.

Entered: January 06, 2006 _ __ _/s/ Steven Rhodes _ _ Steven Rhodes 1. Chief Bankruptcy Judge 17.

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