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 BY AND BETWEEN THE DEBTORS AND SHIRLEY GRADY MODIFYING THE AUTOMATIC STAY This Stipulation regarding a civil action filed by Shirley Grady (the Claimant) against, among others, the above-captioned debtors (collectively, the Debtors) captioned Shirley Grady vs. Collins & Aikman Automotive Interiors Inc. and American Home Insurance Co., Case No. 04-2426-II (the Action), which is currently pending in the Davidson County Chancery Court, Nashville, Tennessee (the State Court), is made as of January 20, 2006, by and between the Debtors and the Claimant.

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.

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WHEREAS, on May 17, 2005 (the Petition Date), the Debtors filed petitions for relief under chapter 11 of title 11 of the United States 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 WHEREAS, the Claimant has filed the Action against, among others, the Debtors seeking to recover damages for workers compensation; and WHEREAS, the damages claimed by the Claimant against the Debtors may be within the scope of the coverage of one of the Debtors policies issued by the Debtors insurance carrier, American Home Insurance Company (each, a Policy); and WHEREAS, the Debtors do not admit any liability or the validity of any damages with respect to the Action; and WHEREAS, the Claimant is willing to waive her right to collect on any claims (the Claims) against the Debtors and agrees to seek recovery to satisfy such Claims solely from any insurance coverage that may be available under a Policy; and WHEREAS, the Debtors have consented, pursuant to and in accordance with the conditions and agreements set forth herein, to the Claimant being granted limited relief from the automatic stay imposed by 11 U.S.C. 362 (the Automatic Stay) so as to permit the Claimant to prosecute the Action in the State Court; and NOW, THEREFORE, in consideration of the mutual promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is hereby stipulated and agreed to by and between the parties, as follows: 1. Upon the entry of an order approving this Stipulation, the Automatic Stay shall be

modified to permit the Claimant to prosecute the Action to and including the entry of judgment;

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provided, however, that no judgment or settlement based on the Action may be enforced against the Debtors, their assets or their estates. 2. The Claimant agrees to collect all money or other forms of remuneration or relief

to which the Claimant may be entitled to in connection with the Action solely from the Debtors applicable insurance carriers under a Policy. 3. A Policy and any limitations to such Policy, including but not limited to

deductibles, retention limitations, exclusions, conditions, and non-insured claims shall be unaffected by this Stipulation. 4. The Claimant hereby waives any right to a claim for punitive or other exemplary

damages against the Debtors. 5. Nothing herein is intended or shall be construed to waive any defenses, setoffs,

objections, counterclaims, or coverage defenses that the Debtors or the Debtors applicable insurance carriers or their representatives may have with respect to the Action. 6. The Claimant hereby fully, finally and forever releases and discharges her right to

collect from the Debtors and/or their bankruptcy estates, or their respective officers, directors, employees, agents and attorneys from any and all actions, claims (whether prepetition unsecured claims, priority, administrative or other postpetition/administrative claims), causes of action, setoffs and liabilities for any obligations relating in any way to the Action. 7. Any and all proofs of claim filed by the Claimant in these chapter 11 cases are

disallowed and expunged for all purposes, and the Claimant shall not be entitled to receive any distributions from the Debtors in these chapter 11 cases under a plan of reorganization or otherwise on behalf of such claim.

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8.

The modification of the Automatic Stay as set forth herein, shall have no effect as

to parties that are not a party to this Stipulation, and the Automatic Stay shall remain in full force and effect with respect to such parties and their claim or cause of action, if any, against the Debtors or their estates. 9. Neither this Stipulation, nor any terms contained herein shall be offered or

received in evidence or in any way referred to in any legal action or administrative proceeding among or between the parties hereto, other than as may be necessary: (a) to obtain approval and to enforce this Stipulation; (b) to seek damages or injunctive relief in connection therewith; or (c) to prove that the Automatic Stay has been modified to allow prosecution of the Action to proceed in the State Court. 10. The Bankruptcy Court shall retain jurisdiction (and the Debtors and the Claimant

consent to such retention of jurisdiction) to resolve any disputes or controversies arising from or related to this Stipulation. Any request for relief brought before the Bankruptcy Court to resolve a dispute arising from or related to this Stipulation shall be brought on proper notice and in accordance with the relevant Federal Rules of Bankruptcy Procedure and the Local Rules for the Bankruptcy Court for the Eastern District of Michigan. 11. This Stipulation shall 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 and the same instrument. 12. 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.

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KIRKLAND & ELLIS LLP

MAYO, NORRIS & MAYO-GINDER

/s/ Ray C. Schrock Richard M. Cieri (NY RC 6062) 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) Marc J. Carmel (IL 6272032) 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

/s/ Jerry Mayo Jerry Mayo 45 Rutledge Street Nashville, Tennessee 37210 Telephone: (615) 256-1533 Facsimile: (615) 256-2802 Counsel for Claimant

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