THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Guilford Mills, Inc. (Retired) (GMIL.OB.X)

During the 2002 fiscal year, the Company paid $62,500 in consulting fees to Japan Tech, Inc., of which Mr. Adachi, a Former Outside Director, is the President and controlling stockholder. In addition, in the ordinary course of its business and through a series of arm's-length transactions, the Company purchased machinery, equipment and supplies from Japan Tech, Inc. during the 2002 fiscal year totaling $394,204.

In the ordinary course of business and through a series of arm's-length transactions, during the 2002 fiscal year, the Company paid $463,361 for forklifts and forklift repairs to Western Carolina Forklift, Inc., which is controlled by David Hayes, the son of the late Charles A. Hayes, the former Chairman of the Company. Charles A. Hayes served on the Board of Directors of Western Carolina Forklift, Inc.

Dr. Zaidenweber (a Former Outside Director) serves as the Chairman of the Board of Grupo Ambar, S.A. de C.V., a subsidiary of the Company ("Grupo Ambar"). Dr. Zaidenweber, who is a 5% stockholder of Grupo Ambar, receives an annual salary of approximately $300,000 for his service as Chairman of the Board of Grupo Ambar. Dr. Zaidenweber is a party to a stockholders' agreement with the Company relating to his stock ownership in Grupo Ambar. Pursuant to such agreement, Dr. Zaidenweber has the right to sell his shares of Grupo Ambar capital stock to the Company at a price equal to the net worth of such shares. The Company has the right, under the stockholders' agreement with Dr. Zaidenweber, to purchase his shares of Grupo Ambar capital stock at a price equal to the net worth of such shares multiplied by two (the "Call Price"). Under certain circumstances, including upon the death or disability of Dr. Zaidenweber, the Company is required to purchase Dr. Zaidenweber's stock at the Call Price. Pursuant to the terms of the stockholders' agreement, the Company is required to pay the purchase price for Dr. Zaidenweber's Grupo Ambar shares in cash. Under the terms of its senior loan agreements however, the Company is prohibited from paying cash or cash equivalents as part of the purchase price for Dr. Zaidenweber's shares of Grupo Ambar, except pursuant to a loan arrangement subordinated to the Company's obligations under its senior loan agreements. The Company and Dr. Zaidenweber have not yet agreed on an appropriate modification to the stockholders' agreement to take into account the foregoing prohibition under the Company's senior loan agreements.

An indirect wholly owned subsidiary of the Company (the "Optionee") is a party to an option agreement with Tucci Associates, Inc. (the "Optionor"), pursuant to which the Optionor granted the Optionee the exclusive right to acquire certain proprietary technology. Nathan M. Dry, who resigned as a Vice President of the Company effective January, 2002, owns 24.5% of the capital stock, and is the President, of the Optionor. If it elects to exercise the option, then the Optionee will be required to make an additional payment to the Optionor of approximately $4,900,000.

In connection with the implementation of the Plan, the Company entered into several transactions with the institutions which are listed in the table in "Security Ownership of Certain Beneficial Owners" above. Pursuant to the Plan, each such institution or its affiliate acquired shares of New Common Stock, Notes (as described in note 12 to the Consolidated Financial Statements included elsewhere in this Report), Altamira Trust Notes and Discontinued Operations Trust Notes (as described in note 1 to the Consolidated Financial Statements), and distributions of cash (as described in note 3 to the Consolidated Financial Statements). In addition, Guilford's Revolving Credit Facility (described in note 12 to the Consolidated Financial Statements) is provided by certain of the institutions listed in "Security Ownership of Certain Beneficial Owners" (or affiliates of such institutions) as follows: Wachovia Bank, National Association; Bank One, NA; General Electric Capital Corporation (an affiliate of GE Capital CFE, Inc.); and The Prudential Insurance Company of America (an affiliate of Prudential Financial, Inc.).