CHARTER OF THE
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
OF ARROW INTERNATIONAL, INC.

Purpose
The primary purpose of the Audit Committee (the “Committee”) of Arrow International, Inc. (the “Company”) is to assist the Company’s Board of Directors (the “Board”) in fulfilling its responsibility to oversee (a) the integrity of the Company’s financial statements and internal controls, (b) the Company’s compliance with legal and regulatory requirements, (c) the qualifications and independence of the Company’s independent auditors, and (d) the performance of the Company’s internal audit function and its independent auditors.

In discharging its oversight role, the Committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities and personnel of the Company. The Committee also has the authority to retain independent outside counsel or other experts as it determines necessary to carry out its duties. The Committee shall determine the compensation for such outside counsel or other experts and the Company shall make appropriate funds available to the Committee for such purpose.

Membership
The Committee shall be comprised of not less than three directors appointed by the Board. Each member of the Committee must satisfy the independence and qualification requirements contained in the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) and The Nasdaq Stock Market, and must be free of any relationship that, in the opinion of the Board, would interfere with their exercise of independent judgment as a Committee member. In addition, at least one member of the Committee must be a “financial expert” as that term is defined in the rules promulgated by the SEC and as determined by the Board. The Board shall appoint one person to act as Chair of the Committee. The members of the Committee shall serve for a term of one year.

Meetings
The Committee shall meet as often as it deems necessary to fulfill its responsibilities set forth in this Charter. A majority of the members of the Committee shall constitute a quorum for the transaction of business. The vote of a majority of the members present at any meeting at which a quorum is present shall be the act of the Committee.

Authority
The Committee shall have the sole authority to select, evaluate, appoint and replace the Company’s independent auditors (subject to shareholder ratification) and shall approve in advance all audit engagement fees and terms and all non-audit engagements with the independent auditors. The Committee shall have the authority, to the extent it deems necessary or appropriate, to retain special legal, accounting or other consultants or advisors to advise the Committee. The Company shall provide funding, as determined by the Committee, for payment of compensation to the independent auditors and to any consultants or advisors retained by the Committee. The Committee may form and delegate authority to subcommittees, comprised of one or more members of the Committee, as it deems necessary or appropriate. Each subcommittee, when so designated, shall have the full power and authority of the Committee.

Responsibilities
The Company’s management is responsible for preparing the Company’s financial statements and the Company’s independent auditors are responsible for auditing those financial statements. The Committee is responsible for overseeing these activities. The Committee recognizes that the Company’s financial management, as well as the Company’s independent auditors, have more time, knowledge and more detailed information on the Company than do Committee members. Consequently, in carrying out its oversight responsibilities, the Committee is not providing any expert or special assurance as to the Company’s financial statements or any professional certification as to the independent auditors’ work.

The following shall be the principal recurring processes of the Committee in carrying out its oversight function.

Oversight of Independent Auditors

In the course of its oversight of the independent auditors as provided under this Charter, the Committee will be guided by the premise that the independent auditors are ultimately accountable to the Board and the Committee.

1.       The Committee, subject to any action that may be taken by the full Board, shall have the ultimate authority and responsibility to select, evaluate and, where appropriate, replace the independent auditors. The Committee shall assist the Board in its oversight of the qualifications, independence and performance of the independent auditors.

2.       The Committee shall:

(i) receive from the independent auditors annually, a formal written statement delineating the relationships between the auditors and the Company consistent with Independence Standards Board Standard Number 1;

(ii) discuss with the independent auditors the scope of any such disclosed relationships and their impact or potential impact on the independent auditors’ independence and objectivity; and

(iii) recommend that the Board take appropriate action in response to the independent auditors’ report to satisfy itself of the auditors’ independence.

3.       The Committee shall review and pre-approve the proposed scope of the annual independent audit of the Company’s financial statements and the associated engagement fees, as well as any significant variations in the actual scope of the audit and the associated engagement fees, and shall also review and pre-approve all audit-related and permissible non-audit services to be provided by the independent auditors and the associated engagement fees, as well as any significant variations in such services and engagement fees. The Committee may establish pre-approval policies and procedures, as permitted by Section 10A of the Securities Exchange Act of 1934, as amended, and the related rules and regulations issued by the SEC, for the engagement of the independent auditors to render services to the Company, including but not limited to policies that would allow the delegation of pre-approval authority to one or more members of the Committee, provided that any pre-approvals delegated to one or more members of the Committee are reported to the Committee at its next scheduled meeting.

4.       The Committee shall set hiring policies for any employment by the Company of employees or former employees of the independent auditors.

5.       The Committee shall review the independent auditors’ report relating to reportable conditions in the internal control structure and financial reporting practices.

6.       The Committee shall review with the independent auditors any difficulties the auditors encountered in the course of the audit work, including restrictions on the scope of work or access to requested information, and any significant disagreements with management.

Oversight of Internal Auditors

The Committee shall review and discuss with the Company’s management and the independent auditors:

1.       The quality and adequacy of the Company’s internal accounting controls.

2.       The organization of the internal audit function, the adequacy of its resources and the competence and performance of the Company’s internal audit staff and/or outsource staff.

3.       The audit risk assessment process and the proposed scope of the internal audit for the upcoming year and the coordination of that scope with the independent auditors.

4.       Results of the internal auditors’ examination of internal controls including summaries of inadequate reports issued and/or management improprieties together with management’s response thereto.

Oversight of Management’s Conduct of the Company’s Financial Reporting Process

1.       Audited Financial Statements. The Committee shall discuss with the Company’s management and the independent auditors the audited financial statements to be included in the Company’s Annual Report on Form 10-K and review and consider with the independent auditors the matters required to be discussed by the applicable Statement of Auditing Standards (“SAS”). Based on these discussions, the Committee will advise the Board whether it recommends that the audited financial statements be included in the Annual Report on Form 10-K.

2.       Interim Financial Statements. The Committee, through its Chairman or the Committee as a whole, will review with management and the independent auditors, prior to the filing thereof, the Company’s interim financial results to be included in the Company’s quarterly reports on Form 10-Q and the matters required to be discussed by the applicable SAS.

3.       Review of Earnings Releases and Information Provided to Analysts. The Committee or the Chairman of the Committee shall review earnings releases with management prior to their release, as well as the Company’s policies with respect to earnings releases and earnings guidance provided to analysts and rating agencies.

4.       Financial Reporting Practices. The Committee shall review:

(i) changes in the Company’s accounting policies and practices and significant judgments that may affect the Company’s financial results;

(ii) the nature of any unusual or significant commitments or contingent liabilities together with the underlying assumptions and estimates of management;

(iii) the effect of changes on accounting standards that may materially affect the Company’s financial reporting practices; and

(iv) the Company’s process for the completion of the SEC certifications by the Company’s Chief Executive Officer and Chief Financial Officer.

Other Items

1.       The Committee shall review and monitor, as appropriate:

(i) results of compliance programs, including the Company’s Code of Conduct; and

(ii) litigation or other legal matters that could have a significant impact on the Company’s financial results.

2.       The Committee shall establish and review procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting control or auditing matters and the confidential, anonymous submission by the Company’s employees of concerns regarding questionable accounting or auditing matters.

3.       The Committee shall report regularly to the Board on its meetings and discussions and review with the Board significant issues or concerns that arise at Committee meetings.

4.       The Committee shall conduct an annual evaluation of its performance in fulfilling its duties and responsibilities under this Charter.

5.       The adequacy of this Charter shall be reviewed by the Committee on an annual basis. The Committee will recommend to the Board any modifications to this Charter, which the Committee deems appropriate, for approval by the Board.

Minutes
The Committee shall keep minutes of its proceedings that shall be signed by the person whom the Chairperson designates to act as secretary of the meeting. The minutes of the meeting shall be approved by the Committee at its next meeting, shall be available for review by the entire Board, and shall be filed as permanent records with the Secretary of the Company.

Amendments
This Charter may be amended from time to time with the approval of a majority of the Board.

Last Revised: November 21, 2003