IN THE UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION In re:

COLLINS & AIKMAN CORPORATION, et al. 1 Debtors.

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

ORDER AUTHORIZING EMPLOYMENT AND RETENTION OF ALVAREZ & MARSAL, LLC AS OPERATIONAL AND STRATEGIC ADVISOR TO THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS NUNC PRO TUNC TO JUNE 1, 2005

This matter having come before the Court on the application (the "Application") of the Official Committee of Unsecured Creditors (the "Committee") of Collins and Aikman Corporation and its affiliated debtors and debtors in possession in the above captioned cases (collectively, C&A or the Debtors) for an order, under sections 328(a) and 1103 of title 11 of the United States Code, 11 U.S.C. 101-1330 (as amended, the "Bankruptcy Code") and Rule 2014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules), authorizing the employment and retention of Alvarez & Marsal, LLC (A&M) as its operational and strategic advisor nunc pro tunc to June 1, 2005, on the terms set forth in the Application (as modified herein) and the Indemnification Agreement attached thereto as Exhibit C (the Indemnification Agreement); and upon the Affidavit of Thomas E. Hill, a Managing Director of A&M, in support of the Application (the "Hill Affidavit"); and due and proper notice of the Application and of this Order having

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been provided; and the Court being satisfied that A&M does not represent any entity, other than the Committee, having an adverse interest in connection with these cases; and the Court being satisfied that the terms of compensation being sought by A&M, as described in the Application (as modified herein), are reasonable, subject to review as set forth below; and the Court having jurisdiction to consider the Application and the relief requested therein pursuant to 28 U.S.C. 157 and 1334; and consideration of the Application and the relief requested therein being a core proceeding pursuant to 28 U.S.C. 157(b); and venue being proper before this Court pursuant to 28 U.S.C. 1408 and 1409; and the Court having considered the objections of JPMorgan Chase Bank, N.A., as Administrative Agent (the Pre-Petition Agent) to the Pre-Petition Secured Lenders, and General Motors Corporation to the relief requested by the Application; and the employment of A&M being in the best interests of the Committee; and the Court having determined that the legal and factual bases set forth in the Application establish just cause for the approval of the relief granted herein; and upon all of the proceedings had before the Court; and after due deliberation and sufficient cause appearing therefor, it is ORDERED that the Application is granted; and it is further ORDERED that the Committee is authorized to retain A&M, as of June 1, 2005, nunc pro tunc, pursuant to Sections 1103 and 328(a) of the Bankruptcy Code, as its operational and strategic advisor, on the terms set forth in the Application, the Hill Affidavit, and the Indemnification Agreement; and it is further ORDERED that if any supplemental affidavits or declarations are filed and served after the entry of this Order, absent any objections filed within twenty (20) days after the filing and service of such supplemental affidavits, A&M's employment shall continue as authorized pursuant to this Order; and it is further ORDERED that the terms of compensation as set forth in the Application are reasonable as such

term is used in section 328(a) of the Bankruptcy Code, and A&M shall be compensated in accordance with those terms, and A&Ms compensation in accordance with those terms shall not hereafter be subject to challenge except under the standards of review under section 328(a) of the Bankruptcy Code, applicable Bankruptcy Rules, Local Bankruptcy Rules and the Administrative Order Establishing Procedures for Interim Compensation and Reimbursement of Expenses of Professionals, except to the extent the Court determines that there was unnecessary duplication of function or work product between A&M and Chanin Capital Partners, LLC, in which circumstances A&Ms compensation for such function or work product shall be subject to the standards of review under section 330 of the Bankruptcy Code, applicable Bankruptcy Rules, Local Bankruptcy Rules and the Administrative Order Establishing Procedures for Interim Compensation and Reimbursement of Expenses of Professionals; and it is further ORDERED that the Committees retention of A&M shall continue unless and until the Committee or A&M gives 30 days prior written notice of termination to the other party or the Court orders otherwise; and it is further ORDERED that to the extent A&M and the Committee agree on a Success Fee (as defined in the Application), A&M shall file an application for Court approval of such proposed fee. Prior to the filing of an application for approval of such fee, the Committee will consult with the Debtors to determine the amount, if any, of the Success Fee; provided, however, the Debtors consent to such fee shall not be required. To the extent the Debtors are not in agreement with the amount of such proposed Success Fee, the Debtors rights to object to the allowance of any Success Fee shall be deemed preserved. The rights of all other parties in interest to object to the allowance of any Success Fee shall be deemed preserved; and it is further ORDERED that all compensation and reimbursement of expenses to be paid to A&M shall be subject to prior approval of this Court upon submission of appropriate applications therefor containing, among other things, a reasonably detailed statement of services performed based on contemporaneous time

records: and it is further ORDERED that notwithstanding anything to the contrary in the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, any orders of this Court or any guidelines regarding submission and approval of fee applications, A&M and its professionals shall only be required to maintain contemporaneous time records for services rendered in half-hour increments; and it is further ORDERED that the Indemnification Agreement is approved and the Debtors (including in their capacities as debtors-in-possession) and their estates shall indemnify and hold harmless A&M and the Indemnified Parties (as defined in the Indemnification Agreement) on the terms set forth in the Indemnification Agreement as fully as if the Debtors were signatories thereto except that the Indemnification Agreement shall be modified to provide as follows:

!Any request by A&M for indemnification pursuant to the Indemnification Agreement shall be subject to
prior approval of the Court in accordance with the requirements under 330 and 331 of the Bankruptcy Code.

!All requests by A&M for payment of indemnity pursuant to the Indemnification Agreement shall be made
by means of an application (interim or final as the case may be) and shall be subject to review by the Court to ensure that payment of such indemnity conforms with this Order and/or the Indemnification Agreement and is reasonable based upon the circumstances of the litigation or settlement in respect of which indemnity is sought, provided, however, that in no event shall A&M be indemnified in the case of its own bad-faith, self-dealing, breach of fiduciary duty (if any) (which, for the avoidance of doubt, will not include any breaches based on ordinary negligence), gross negligence or willful misconduct. !In no event shall A&M be indemnified if the Debtors or Committee asserts a claim for, and a court determines by final order that such claim arose out of A&M's own bad-faith, self-dealing, breach of fiduciary duty (if any) (which, for the avoidance of doubt, will not include any breaches based on ordinary negligence), gross negligence or willful misconduct. !In the event that A&M seeks reimbursement for attorneys' fees from the Debtors pursuant to the Indemnification Agreement, the invoices and supporting time records from such attorneys shall be included in A&M's own applications (both interim and final) and such invoices and time records shall be subject to the United States Trustee's guidelines for compensation and reimbursement of expenses and the approval of the Bankruptcy Court under the standards of 330 and 331 of the Bankruptcy Code without regard to whether such attorney has been retained under 327 of the Bankruptcy Code; and it is further ORDERED that the Court shall retain jurisdiction to hear and determine all matters arising from the implementation of this Order; and it is further

ORDERED that any requirement that the Committee file a memorandum of law in support of the Application is hereby waived.

Approved for Entry By:

/s/ Stephen E. Spence United States Trustee