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Exhibit 10.57

LOAN AGREEMENT

Dated: April 12, 2001

Among

FIRST UNION NATIONAL BANK,

FIRST UNION NATIONAL BANK, LONDON BRANCH,

and

ARROW INTERNATIONAL, INC.

ARROW MEDICAL PRODUCTS, LTD.

ARROW DEUTSCHLAND GMBH

ARROW IBERIA, S.A.

ARROW INTERNACIONAL DE MEXICO S.A. DE C.V.

ARROW HELLAS COMMERCIAL A. E.

ARROW HOLLAND MEDICAL PRODUCTS B.V.

ARROW INTERNATIONAL CR, A.S.

TABLE OF CONTENTS

Section Page

<tr>

<td width="101" height="19" align="right">SECTION 1. </td>

<td width="363" height="19"> DEFINITIONS. <A HREF="#_Toc508084457">*</A></td>

</tr>

<tr>

<td width="363" height="19">General Provisions <A HREF="#_Toc508084458">*</A></td>

</tr>

<tr>

<td width="363" height="19">Defined Terms <A HREF="#_Toc508084459">*</A></td>

</tr>

<tr>

</tr>

<tr>

<td width="101" height="19" align="right">SECTION 2.</td>

<td width="363" height="19">THE CREDIT <A HREF="#_Toc508084460">*</A></td>

</tr>

<tr>

Loans. <A HREF="#_Toc508084461">*</A>

</td>

</tr>

<tr>

<td width="363" height="19">Disbursement of Loans. <A HREF="#_Toc508084462">*</A></td>

</tr>

<tr>

</tr>

<tr>

<td width="363" height="19">Interest. <A HREF="#_Toc508084464">*</A></td>

</tr>

<tr>

<td width="363" height="19">Mandatory Repayment of Loans. <A HREF="#_Toc508084465">*</A></td>

</tr>

<tr>

<td width="363" height="19">Voluntary Prepayments <A HREF="#_Toc508084466">*</A></td>

</tr>

<tr>

<td width="363" height="19">Maturity of Loans <A HREF="#_Toc508084468">*</A></td>

</tr>

<tr>

<td width="363" height="19">General Provisions as to Payments <A HREF="#_Toc508084469">*</A></td>

</tr>

<tr>

<td width="363" height="19">Loan Account <A HREF="#_Toc508084470">*</A></td>

</tr>

<tr>

<td width="363" height="19">Maximum Legal Rate <A HREF="#_Toc508084471">*</A></td>

</tr>

<tr>

<td width="363" height="22">Application of Payments <A HREF="#_Toc508084472">*</A></td>

</tr>

<tr>

<td width="363" height="19">Yield Protection; Capital Adequacy. <A HREF="#_Toc508084473">*</A></td>

</tr>

<tr>

<td width="363" height="19">Security <A HREF="#_Toc508084474">*</A></td>

</tr>

<tr>

<td width="363" height="19">Payments of Certain Alternative Currencies. <A HREF="#_Toc508084475">*</A></td>

</tr>

<tr>

Redenomination of Alternative Currency Loans. <A HREF="#_Toc508084476">*</A>

</td>

</tr>

<tr>

<td width="363" height="19">Regulatory Limitation <A HREF="#_Toc508084477">*</A></td>

</tr>

<tr>

<td width="363" height="19">Changed Circumstances. <A HREF="#_Toc508084478">*</A></td>

</tr>

<tr>

Indemnity <A HREF="#_Toc508084479">*</A>

</td>

</tr>

<tr>

<td width="363" height="19">Rounding and Other Consequential Changes <A HREF="#_Toc508084480">*</A></td>

</tr>

<tr>

</tr>

<tr>

<td width="101" height="19" align="right">SECTION 3. </td>

<td width="363" height="19"> REPRESENTATIONS AND WARRANTIES. <A HREF="#_Toc508084481">*</A></td>

</tr>

<tr>

<td width="363" height="19">Organization and Qualification <A HREF="#_Toc508084482">*</A></td>

</tr>

<tr>

<td width="363" height="19">Power and Authority <A HREF="#_Toc508084483">*</A></td>

</tr>

<tr>

<td width="363" height="19">Enforceability <A HREF="#_Toc508084484">*</A></td>

</tr>

<tr>

<td width="363" height="19">Conflict with Other Instruments <A HREF="#_Toc508084485">*</A></td>

</tr>

<tr>

<td width="363" height="19">Litigation <A HREF="#_Toc508084486">*</A></td>

</tr>

<tr>

<td width="363" height="19">Taxes <A HREF="#_Toc508084488">*</A></td>

</tr>

<tr>

<td width="363" height="19">Financial Condition <A HREF="#_Toc508084489">*</A></td>

</tr>

<tr>

<td width="363" height="19">Regulation U <A HREF="#_Toc508084490">*</A></td>

</tr>

<tr>

<td width="363" height="19">Environmental Matters. <A HREF="#_Toc508084491">*</A></td>

</tr>

<tr>

<td width="363" height="19">ERISA <A HREF="#_Toc508084492">*</A></td>

</tr>

<tr>

</tr>

<tr>

<td width="101" height="19" align="right">SECTION 4.</td>

<td width="363" height="19"> CONDITIONS OF BORROWING. <A HREF="#_Toc508084493">*</A></td>

</tr>

<tr>

<td width="363" height="19">Conditions to Effectiveness <A HREF="#_Toc508084494">*</A></td>

</tr>

<tr>

<td width="363" height="19">Conditions to All Loans <A HREF="#_Toc508084495">*</A></td>

</tr>

<tr>

Satisfaction of Conditions <A HREF="#_Toc508084496">*</A></td>

</tr>

<tr>

</tr>

<tr>

<td width="101" height="19" align="right">SECTION 5.</td>

<td width="363" height="19"> AFFIRMATIVE COVENANTS. <A HREF="#_Toc508084498">*</A></td>

</tr>

<tr>

<td width="363" height="19">Financial Statements; Reports <A HREF="#_Toc508084499">*</A></td>

</tr>

<tr>

<td width="363" height="19">Liabilities <A HREF="#_Toc508084500">*</A></td>

</tr>

<tr>

<td width="363" height="19">Environmental Matters; Compliance with Laws. <A HREF="#_Toc508084501">*</A></td>

</tr>

<tr>

<td width="363" height="19">Corporate Existence; Properties <A HREF="#_Toc508084502">*</A></td>

</tr>

<tr>

<td width="363" height="19">Books and Records <A HREF="#_Toc508084503">*</A></td>

</tr>

<tr>

<td width="363" height="19">Insurance <A HREF="#_Toc508084504">*</A></td>

</tr>

<tr>

<td width="363" height="19">Debt to Tangible Net Worth <A HREF="#_Toc508084505">*</A></td>

</tr>

<tr>

<td width="363" height="19">Cash Flow Coverage Ratio <A HREF="#_Toc508084506">*</A></td>

</tr>

<tr>

<td width="363" height="19">Representations and Warranties <A HREF="#_Toc508084507">*</A></td>

</tr>

<tr>

</tr>

<tr>

<td width="101" height="19" align="right">SECTION 6.</td>

NEGATIVE COVENANTS. <A HREF="#_Toc508084508">*</A></td>

</tr>

<tr>

<td width="363" height="19">Liens <A HREF="#_Toc508084509">*</A></td>

</tr>

<tr>

</tr>

<tr>

<td width="363" height="19">Mergers, Consolidations <A HREF="#_Toc508084511">*</A></td>

</tr>

<tr>

<td width="363" height="19">Disposition of Assets <A HREF="#_Toc508084512">*</A></td>

</tr>

<tr>

<td width="363" height="19">Use of Proceeds <A HREF="#_Toc508084513">*</A></td>

</tr>

<tr>

Lines of Business <A HREF="#_Toc508084514">*</A></td>

</tr>

<tr>

</tr>

<tr>

<td width="101" height="19" align="right">SECTION 7.</td>

<td width="363" height="19"> EVENTS OF DEFAULT, REMEDIES. <A HREF="#_Toc508084515">*</A></td>

</tr>

<tr>

<td width="363" height="19">Events of Default <A HREF="#_Toc508084516">*</A></td>

</tr>

<tr>

<td width="363" height="19">Acceleration. <A HREF="#_Toc508084517">*</A></td>

</tr>

<tr>

<td width="363" height="19">Right of Setoff <A HREF="#_Toc508084518">*</A></td>

</tr>

<tr>

<td width="363" height="19">Remedies Cumulative <A HREF="#_Toc508084519">*</A></td>

</tr>

<tr>

</tr>

<tr>

<td width="101" height="19" align="right">SECTION 8.</td>

<td width="363" height="19"> MISCELLANEOUS. <A HREF="#_Toc508084520">*</A></td>

</tr>

<tr>

<td width="363" height="19">No Waiver; Cumulative Remedies <A HREF="#_Toc508084521">*</A></td>

</tr>

<tr>

<td width="363" height="19">Notices <A HREF="#_Toc508084522">*</A></td>

</tr>

<tr>

<td width="363" height="19">Reimbursement of Lender <A HREF="#_Toc508084523">*</A></td>

</tr>

<tr>

<td width="363" height="19">Payment of Expenses and Taxes <A HREF="#_Toc508084524">*</A></td>

</tr>

<tr>

<td width="363" height="19">Survival of Representations and Warranties <A HREF="#_Toc508084525">*</A></td>

</tr>

<tr>

<td width="363" height="19">Participations <A HREF="#_Toc508084526">*</A></td>

</tr>

<tr>

<td width="363" height="19">Successors <A HREF="#_Toc508084528">*</A></td>

</tr>

<tr>

<td width="363" height="19">Construction <A HREF="#_Toc508084529">*</A></td>

</tr>

<tr>

<td width="363" height="19">Severability <A HREF="#_Toc508084530">*</A></td>

</tr>

<tr>

Indemnity <A HREF="#_Toc508084531">*</A>

</td>

</tr>

<tr>

<td width="363" height="19">Waiver of Trial by Jury <A HREF="#_Toc508084532">*</A></td>

</tr>

<tr>

<td width="363" height="19">Actions Against Lender; Release. <A HREF="#_Toc508084534">*</A></td>

</tr>

<tr>

<td width="363" height="19"> Governing Law; Submission to Jurisdiction <A HREF="#_Toc508084535">*</A></td>

</tr>

<tr>

<td width="363" height="19"> Judgment Currency. <A HREF="#_Toc508084536">*</A></td>

</tr>

<tr>

<td width="363" height="19">Arbitration. <A HREF="#_Toc508084537">*</A></td>

</tr>

<tr>

<td width="363" height="19">Performance by Lender <A HREF="#_Toc508084538">*</A></td>

</tr>

<tr>

<td width="363" height="19">Counterparts <A HREF="#_Toc508084539">*</A></td>

</tr>

<tr>

<td width="363" height="19">Further Actions <A HREF="#_Toc508084540">*</A></td>

</tr>

<tr>

<td width="363" height="19">Entire Agreement <A HREF="#_Toc508084541">*</A></td>

<td width="181" height="19" align="center">42

</td>

</tr>

</table>

LOAN AGREEMENT

THIS LOAN AGREEMENT made and entered into April 12, 2001 by and among FIRST UNION NATIONAL BANK, a national banking association, FIRST UNION NATIONAL BANK, LONDON BRANCH, a national banking association acting through its London Branch, ARROW INTERNATIONAL, INC., a Pennsylvania corporation, ARROW MEDICAL PRODUCTS, LTD, a Pennsylvania corporation authorized to engage in business in Canada, ARROW DEUTSCHLAND GMBH, a corporation organized and existing under the laws of Germany, ARROW IBERIA, S.A., a corporation organized and existing under the laws of Spain, ARROW INTERNACIONAL DE MEXICO S.A. DE C.V., a corporation organized and existing under the laws of Mexico, ARROW HELLAS COMMERCIAL A. E., a corporation organized and existing under the laws of Greece, ARROW HOLLAND MEDICAL PRODUCTS B.V., a corporation organized and existing under the laws of Holland, and ARROW INTERNATIONAL CR, A.S., a corporation organized and existing under the laws of the Czech Republic.

SECTION 1. <A NAME="_Toc508084457">DEFINITIONS.</A>

1.1 <A NAME="_Toc508084458">General Provisions. Unless expressly provided otherwise in this Agreement or in the Loan Documents, or unless the context requires otherwise:</A>

<li>

all accounting terms used in this Agreement and in the Loan

Documents shall have the meanings given to them in accordance with GAAP;</li>

<li>

all terms used herein and in the Loan Documents that are defined in the Pennsylvania Uniform Commercial Code, as amended from time to time, shall have the meanings set forth therein;</li>

<li>

all capitalized terms defined in this Agreement shall have the defined meanings when used in the Loan Documents and in any other documents made or delivered pursuant to this Agreement;</li>

<li>

the singular shall include the plural, the plural shall include the singular, and the use of any gender shall include all genders;</li>

<li>

all references to any particular party defined herein shall be deemed to refer to each and every person defined herein as such party individually, and to all of them, collectively, jointly and severally, as though each were named wherever the applicable defined term is used;</li>

<li>

all references to "Sections," "Subsections," "Paragraphs" and "Subparagraphs" shall refer to provisions of this Agreement;</li>

<li>

all references to time herein shall mean Eastern Standard Time or Eastern Daylight Time, as then in effect; and</li>

<li>

all references to sections, subsections, paragraphs or other provisions of statutes or regulations shall be deemed to include successor, amended, renumbered and replacement provisions.</li>

</ol>

</blockquote>

2.2 <A NAME="_Toc508084459">Defined Terms. As used herein, the following terms shall have the meanings indicated, unless the context otherwise requires:</A>

"Additional Costs" shall have the meaning ascribed to it in Section 2.13.

"Adjusted LIBOR Market Index Rate" shall mean the LIBOR Market Index Rate plus

thirty-five (35) basis points.

"Adjusted LIBOR Rate" shall mean with respect to any LIBOR Loan denominated in Dollars,

LIBOR

plus thirty-five (35) basis points, and with respect to any LIBOR Loan denominated in

an Alternative Currency, LIBOR

plus thirty-five (35) basis points.

"Affiliate" shall mean, as to any Person:

<li>

if such Person is an individual, any (i) relative of such Person or of a general partner of such Person, (ii) partnership in which such Person is a general partner, (iii) general partner of such Person, or (iv) corporation of which such Person is a director, officer, or person in control;</li>

<li>

if such Person is a corporation, any (i) director of such Person, (ii) officer of such Person, (iii) person in control of such Person, (iv) partnership in which such Person is a general partner, (v) general partner of or joint venturer with such Person, or (vi) relative of a general partner, director, officer, or person in control of such Person; or</li>

<li>

if such Person is a partnership, any (i) general partner in such Person, (ii) relative of a general partner in such Person, (iii) partnership in which such Person is a general partner, (iv) general partner of such Person, or (v) person in control of such Person.</li>

</ol>

As used in this definition, "control" shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise), provided that, in any event, any Person which owns or holds directly or indirectly five percent (5%) or more of the voting securities or five percent (5%) or more of the partnership or other equity interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person.

"Agreement" shall mean this Loan Agreement and any future amendments, restatements, modifications or supplements hereof or hereto.

"Alternative Currency" shall mean French Francs, Deutschemarks, Pound Sterlings, Euros, and Guilder, and, with the prior written consent of the Lender, any other currency (other than Dollars) so long as at such time, (i) such currency is dealt with in the London Interbank Deposit Market, (ii) such currency is freely transferable and convertible into Dollars in the United States Foreign Currency Exchange Market, and (iii) no central bank or other governmental authorization in the country of issue of such currency is required to permit use of such currency by the Lender for making any Loan hereunder and/or to permit the relevant Borrower to borrow and repay the principal thereof and to pay interest thereon, unless such authorization has been obtained.

"Alternative Currency Base Rate" shall mean the floating rate of interest established by the Lender from time to time as the quoted base rate for the Alternative Currency in which a particular Loan is denominated. Such rate of interest shall change simultaneously and automatically upon the Lender's designation of any change in such reference rate, and the Lender's determination and designation from time to time of the reference rate shall not in any way preclude the Lender from making loans to other borrowers which are higher or lower than or different from the referenced rate.

"Alternative Currency Base Rate Loan" shall mean any Loan or portion thereof which bears interest at the Alternative Currency Base Rate pursuant to this Agreement.

"Alternative Currency Loan" shall mean any Loan denominated in an Alternative Currency.

"Alternative Currency Borrowing Sub-Limit" shall mean Twenty-Five Million Dollars ($25,000,000) (based on the Dollar Equivalent of the Alternative Currencies)

"Applicable Law" shall mean any applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities, and all orders and decrees of all courts and arbitrators.

"Applicable Lending Office" shall mean the Lender's Domestic Lending Office or such other office, branch or affiliate of the Lender or any Correspondent as the Lender may hereafter designate as its applicable lending office by notice to the Borrowers; provided that the Lender may from time to time by notice to the Borrowers designate separate applicable lending offices for its Loans denominated in different Currencies, in which case all references herein to the Lender's Applicable Lending Office shall be deemed to refer to any or all of such offices, as the context may require.

"Arrow Group" shall mean Arrow International and all of its Affiliates and Subsidiaries (including the Borrowers) that are included with Arrow International on Arrow International's consolidated financial statements.

"Arrow International" shall mean Arrow International, Inc., a Pennsylvania corporation.

"Authorized Officer" shall mean, collectively, the Chairman, President, Chief Financial Officer, or any other officer or designated representative of a Borrower designated as an Authorized Officer in writing to the Lender by the President of such Borrower.

"Availability Period" shall mean the period commencing on the date hereof and ending on the Termination Date.

"Borrower" shall mean each of Arrow International, Inc., a Pennsylvania corporation, Arrow Medical Products, Ltd., a Pennsylvania corporation authorized to engage in business in Canada, Arrow Deutschland GmbH, a corporation organized and existing under the laws of Germany, Arrow Iberia, S.A., a corporation organized and existing under the laws of Spain, Arrow Internacional De Mexico, S.A. de C.V., a corporation organized and existing under the laws of Mexico, Arrow Hellas Commercial A. E., a corporation organized and existing under the laws of Greece, Arrow Holland Medical Products B.V., a corporation organized and existing under the laws of Holland, and Arrow International CR, a.s., a corporation organized and existing under the laws of the Czech Republic, and "Borrowers" shall mean any two or more of them.

"Borrowing Limit" shall mean Sixty-Five Million Dollars ($65,000,000).

"Business Day" shall mean, with respect to the borrowing of, a payment or prepayment of principal of or interest on, or the Maturity Date for, any Loan, any day except a Saturday or Sunday on which commercial banks, and, in the case of a Loan denominated in an Alternative Currency, foreign exchange markets are open for international business and to settle payments in London and/or the location of the Lender's Applicable Lending Office.

"Capital Expenditures" shall mean, with respect to any Person for any applicable period, the sum, without duplication, of the aggregate amount of all expenditures of such Person during such period which, pursuant to and in accordance with GAAP, would be classified as capital expenditures including, without limitation, Capital Lease Obligations.

"Capital Lease Obligations" shall mean, collectively, the obligations of any Person to pay rent or other amounts under any lease of or other arrangement conveying the right to use real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person pursuant to and accordance with GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

"Cash Flow Coverage Ratio" shall mean, for the Arrow Group on a consolidated basis and with respect to any applicable four (4) fiscal quarters of the Arrow Group, the ratio of (i) (A) net profit after taxes of the Arrow Group (excluding, however, extraordinary or similar items of gain to the extent included in the calculation of net profit after taxes), plus (B) the aggregate amount of depreciation and amortization expense taken by the Arrow Group pursuant to and in accordance with GAAP, plus (C) interest expense on all Debt of the Arrow Group (including payments in the nature of interest under Capital Lease Obligations), minus (D) dividends and distributions paid to the shareholders of any member of the Arrow Group, minus (E) Unfunded Capital Expenditures, to (ii) (A) regularly scheduled and paid current maturities of all long-term Debt of the Arrow Group (including payments in the nature of principal under Capital Lease Obligations), plus (B) the amount referred to in clause (i)(C) of this definition.

"Closing Date" shall mean the date hereof.

"Code" shall mean the Internal Revenue Code of 1986, as amended, or any successor law thereto, and any regulations promulgated thereunder.

"Compliance Certificate" shall mean the certificate in the form of Exhibit "A" attached hereto and made a part hereof executed by an Authorized Officer certifying as to the matters therein described.

"Contamination" shall mean the presence of any Hazardous Substance which requires Remedial Actions under applicable law.

"Controlled

Group Member" shall mean:

any corporation included with the Borrower in a controlled group of corporations within the meaning of Code 414(b); </LI>

<LI>

any trade or business (whether or not incorporated) which is under common control with the Borrower within the meaning of Code 414(c); and</LI>

<LI>

any member of an affiliated service group of which the Borrower is a member within the meaning of Code 414(m).< /LI>

<li>

"Correspondent" shall mean with respect to the funding of or prepayment or payment of principal of or interest on any Loan denominated in an Alternative Currency, the financial institution in the corresponding country designated by the Lender to act as its correspondent hereunder.

</li>

"Currency" shall mean Dollars or any Alternative Currency.

"Debt" shall mean, with respect to any Person at any applicable time (without duplication), (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (iii) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person to the extent of the value of such property (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (iv) all obligations, other than intercompany items, of such Person issued or assumed as the deferred purchase price of property or services purchased by such Person which would appear as liabilities on a balance sheet of such Person, (v) all Debt of others secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (vi) all Guaranty Obligations of such Person, (vii) the principal portion of all Capital Lease Obligations, (viii) all obligations of such Person in respect of interest rate protection agreements, foreign currency exchange agreements, or other interest or exchange rate or commodity price hedging agreements, (ix) the maximum amount of all performance and standby letters of credit issued or bankers' acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (x) all preferred stock issued by such Person and required by the terms thereof to be redeemed, or for which mandatory sinking fund payments are due, by a fixed date, and (xi) any other item of indebtedness or liability that would be reflected on the liabilities side of a balance sheet of such Person in accordance with GAAP.

"Default" shall mean any event specified in Section 7.1, whether or not any requirement for notice or lapse of time or any other condition has been satisfied.

"Deutschemarks" shall mean lawful money of the Federal Republic of Germany.

"Dollar Equivalent" shall mean, with respect to any Loan denominated in an Alternative Currency, the amount of Dollars that would be required to purchase the amount of the Alternative Currency of such Loan two (2) Business Days prior to the date of borrowing thereof (or with respect to any determination made under Section 4.2 hereof on the date referred to in such section), based upon the most favorable spot exchange rate determined by the Lender to be available to it in accordance with its standard operating procedures at approximately 11:00 A.M. (local time in Philadelphia, Pennsylvania) for delivery two (2) Business Days later.

"Dollars" and the sign "$" shall mean lawful money of the United States of America.

"Domestic Lending Office" shall mean the Lender's Philadelphia, Pennsylvania office (or such other office as may be designated by the Lender from time to time) located at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx, Pennsylvania.

"EMU" means economic and monetary union as contemplated in the Treaty on European Union.

"EMU Legislation" shall mean legislative measures of the counsel of European Union for the introduction of, changeover to or operation of a single European currency (whether or not known as the Euro).

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended, and any regulations issued thereunder by the United States Department of Labor or the Pension Benefit Guaranty Corporation.

"Euros" shall mean the legal currency of those countries that have adopted the single European Monetary Unit under the Treaty of Maastricht.

"Event of Default" shall mean any event specified in Section 7.1, provided that any requirement for notice or lapse of time or any other condition has been satisfied.

"Fixed Exchange Rate" means the exchange rate for a national currency unit into Euros set in accordance with EMU Legislation in effect from time to time.

"Foreign Currency Equivalent" shall mean, with respect to any amount in Dollars, the amount of any Alternative Currency that could be purchased with such amount of Dollars using the reciprocal of the Foreign Exchange Rate(s) specified in the definition of the term "Dollar Equivalent," as determined by the Lender.

"French Francs" shall mean lawful money of the Republic of France.

"GAAP" shall mean, at any particular time, generally accepted accounting principles as in effect at such time, provided, however, that, if employment of more than one principle shall be permissible at such time in respect of a particular accounting matter, "GAAP" shall refer to the principle which is then employed by Arrow International with the agreement of its independent certified public accountants, and provided further that, as used with respect to a Borrower domiciled and operating in a jurisdiction other than the United States of America, GAAP shall mean generally accepted accounting principles as in effect in such foreign jurisdiction.

"Governmental Authority" shall mean any nation, province, state or political subdivision thereof, and any government or Person exercising executive, legislative, regulatory or administrative functions of, or pertaining to government, and any corporation or other entity owned or controlled through stock or capital ownership or otherwise, by any of the forgoing.

"Guilder" shall mean lawful money of the Netherlands.

"Guaranty Obligations" shall mean, as at any applicable time and for any Person, without duplication, any obligations (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) guaranteeing or intended to guarantee any Debt of any other Person in any manner, whether direct or indirect, and including without limitation any obligation, whether or not contingent, (i) to purchase any such Debt or other obligation or any property constituting security therefor, (ii) to advance or provide funds or other support for the payment or purchase of such Debt or obligation or to maintain working capital, solvency or other balance sheet condition of such other Person (including, without limitation, maintenance agreements, comfort letters, take or pay arrangements, put agreements or similar agreements or arrangements) for the benefit of the holder of Debt of such other Person, (iii) to lease or purchase property, securities or services primarily for the purpose of assuring the owner of such Debt, or (iv) to otherwise assure or hold harmless the owner of such Debt or obligation against loss in respect thereof. The amount of any Guaranty Obligation hereunder shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the Debt in respect of which such Guaranty Obligation is made.

"Hazardous Substances" shall mean any chemical, solid, liquid, gas, or other substance having the characteristics identified in, listed under, or designated pursuant to:

the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. 9601(14), as a "hazardous substance;"</LI>

<LI>

the Clean Water Act, 33 U.S.C. 1321(b)(2)(A), as a "hazardous substance;"</LI>

<LI>

the Clean Water Act, 33 U.S.C. 1317(a) and 1362(13), as a "toxic pollutant;"</LI>

<LI>

Table 1 of Committee Print Numbered 95-30 of the Committee on Public Works and Transportation of the United States House of Representatives, as a "toxic pollutant;"</LI>

<LI>

the Clean Air Act, 42 U.S.C. 7412(a)(1), as a "hazardous air pollutant;"</LI>

<LI>

the Toxic Substances Control Act, 15 U.S.C. 2606(f), as an "imminently hazardous chemical substance or mixture;"</LI>

<LI>

the Resource, Conservation and Recovery Act, 42 U.S.C. 6903(5) and 6921, as a "hazardous waste;" or</LI> ;

<LI>

any other laws, regulations or governmental publications, as presenting an imminent and substantial danger to the public health or welfare or to the environment, or as otherwise requiring special handling, collection, storage, treatment, disposal, or transportation.</LI>

The term "Hazardous Substances" shall also include: (w) petroleum, crude oil, gasoline, natural gas, liquified natural gas, synthetic fuel, and all other petroleum, oil, or gas based products; (x) nuclear, radioactive, or atomic substances, mixtures, wastes, compounds, materials, elements, products or matters; (y) asbestos, asbestos-containing materials, polychlorinated biphenyls, and (z) any other substance, mixture, waste, compound, material, element, product or matter that presents an imminent and substantial danger to the public health or welfare or to the environment upon its Release.

"Indebtedness" shall mean and include (i) all Loans and other extensions of credit by the Lender under this Agreement, and all interests, costs, fees and expenses accrued thereon or in connection therewith, (ii) all other indebtedness and obligations or undertakings now or after owed by the Borrowers to the Lender under this Agreement or the other Loan Documents and (iii) all other liabilities and obligations of the Borrowers to the Lender, and any other past, present or future advances, readvances, substitutions, extensions, renewals, interests, late charges, penalties, and fees of any and all types whether primary or secondary, absolute or contingent, direct or indirect, joint, several or independent, voluntary or involuntary, similar or dissimilar, related or unrelated, now or hereafter existing, due or to become due, or held or to be held by the Lender for its own account or as agent for others, whether created directly or acquired by negotiation, assignment or otherwise.

"Investment" in any Person shall mean, collectively, (i) the acquisition (whether for cash, property, services, assumption of Indebtedness, securities or otherwise) of assets, shares of capital stock, bonds, notes, debentures, partnership, joint ventures or other ownership interests or other securities of such other Person, (ii) any deposit with, or advance, loan or other extension of credit to, such Person (other than deposits made in connection with the purchase of equipment or other assets in the ordinary course of business), or (iii) any other capital contribution to or investment in such Person, including, without limitation, any Guaranty Obligation (including any support for a letter of credit issued on behalf of such Person) incurred for the benefit of such Person.

"Lender" shall mean either of First Union National Bank, a national banking association, for Loans denominated in Dollars, or First Union National Bank, London Branch, a national banking association acting through its London Branch, for Loans denominated in Alternative Currencies, and their respective successors and assigns.

"LIBOR" shall mean, for each LIBOR Loan and LIBOR Period applicable thereto, the rate per annum (rounded upwards, if necessary, to the nearest 1/16th of 1%) determined by the Lender according to the following formula:

where R =

LIBOR

X = London Interbank Offered Rate for such LIBOR Loans for the applicable LIBOR Period and the

applicable Currency

Y = the average of the daily rates (expressed as a decimal fraction) of maximum reserve requirements

      which are, at any time, applicable during such LIBOR Period (including, without limitation, basic,

      special, supplemental, marginal and emergency reserves) under any regulations of the Board of

     Governors of the Federal Reserve System or other banking authority, domestic or foreign, as now

     and from time to time hereafter in effect, prescribed for eurocurrency funding (currently referred to

     as Eurocurrency Liabilities in Regulation D of such Board) to which the Lender (including any

     branch, Affiliate, or other fronting office making or holding a LIBOR Loan) is subject, as now and

from time to time hereafter in effect

"LIBOR Loan" shall mean any Loan or portion thereof which bears interest at the Adjusted LIBOR Rate pursuant hereto.

"LIBOR Market Index Rate" shall mean for any day, the rate (rounded to the nearest one/one hundredth (1/100) of one percent (1%) for one (1) month U.S. dollar deposits as reported on Telerate Page 3750, as of 11:00 A.M.. London time, for such day; provided, however, that if such day is not a Business Day, the immediately preceding Business Day (or, if not so reported, then as determined by the Lender from another recognized source or interbank quotation).

"LIBOR Market Index Rate Loans" shall mean any Loan or portion thereof which bears interest at the Adjusted LIBOR Market Index Rate pursuant hereto.

"LIBOR Period" shall mean, with respect to any Loan bearing interest at the Adjusted LIBOR Rate pursuant hereto, the period commencing on the date on which the Loan begins to bear interest at the Adjusted LIBOR Rate in accordance herewith and ending thirty (30), sixty (60), ninety (90), one hundred twenty (120), or one hundred eighty (180) days thereafter, as appropriate, as selected by the Borrower pursuant to Section 2.4, subject to the following:

<LI>

if the last day of the LIBOR Period selected by the Borrower pursuant to Section 2.4 does not fall on a Business Day:</LI>

<LI>

<LI>

interest shall, to the extent applicable, continue to accrue at the Adjusted LIBOR Rate; and</LI>

<LI>

the next LIBOR Period elected, or deemed to have been elected, by the Borrower with respect to the LIBOR Loan to which the LIBOR Period relates, if any, shall commence on the day following the Business Day described in clause (a)(i) above; and </LI></OL>

<LI>

any LIBOR Period that begins on the last Business Day of the calendar month (or on a date for which there is no numerically corresponding day in the calendar month in which such LIBOR Period ends) shall end on the last Business Day of a calendar month and the next LIBOR Period with respect to the LIBOR Loan to which the LIBOR Period relates, if any, shall commence on the day immediately following such Business Day.</LI></OL>

"Lien" shall mean, collectively, any mortgage, pledge, hypothecation, assignment, deposit arrangement, security interest, encumbrance, lien (statutory or otherwise), preference, priority or charge of any kind, including, without limitation, any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof.

"Loan" shall mean a Loan made by the Lender to the Borrowers pursuant to Section 2.1, and "Loans" means any combination of the foregoing.

"Loan Account" shall mean, collectively, the account or accounts of the Borrowers on the books of Lender in which are recorded the Loans and the payments of principal and interest made by the Borrower to Lender thereon.

"Loan Documents" shall mean this Agreement, the Note and all other documents executed and delivered to the Lender by or on behalf of any Borrower in connection therewith and any modifications, amendments, restatements, substitutions and replacements of or for any of the foregoing.

"London Interbank Offered Rate" shall mean with respect to any Loan denominated in any Currency for the LIBOR Period applicable thereto, the rate for deposits in such Currency for a period comparable to such LIBOR Period which appears on Telerate Page 3750 (if such Currency is Dollars) or on Reuters Screen ("LIBOR-01") (if such currency is an Alternative Currency) (otherwise) as of 11:00 a.m., London time, on the day that is two (2) Business Days prior to the commencement of such LIBOR Period; provided that, if such rate does not appear on the relevant Telerate Page or Reuters Screen, the London Interbank Offered Rate shall be the arithmetic mean (rounded upwards, if necessary, to the nearest 1/16th of one percent) as determined by the Lender, of the rates per annum at which interbank deposits denominated in such Currency approximately equal in principal amount to the amount of such LIBOR Loan and for a maturity comparable to such LIBOR Period are offered to the London office of the Lender at approximately 11:00 a.m., London time, on the day that is two (2) Business Days prior to the commencement of such LIBOR Period. As used herein, the term "Telerate Page" shall mean the display page designated on the Dow Xxxxx Telerate Service (or such other page as may replace the appropriate page on that service for the purpose of displaying interbank offered rates of major banks). As used herein, the term "Reuters Screen" shall mean the display page designated on the Reuters Screen (or such other screen as may replace the appropriate screen on the Reuters Service for the purpose of displaying interbank offered rates of major banks).

"Material Adverse Effect" shall mean, collectively and with respect to any event, occurrence, or condition of any kind or nature, a material adverse effect on (i) the assets, liabilities, operations, profits, financial condition, business or prospects (whether present or prospective) of the Borrowers, (ii) the ability of the Borrowers to perform their respective obligations under this Agreement or any of the Loan Documents, or (iii) the validity or enforceability of this Agreement and of the other Loan Documents, or any of the rights and remedies of the Lender hereunder or thereunder.

"Maturity Date" shall mean, with respect to each Loan that accrues interest at the Adjusted LIBOR Market Index Rate or the Alternative Currency Base Rate, the Termination Date, and, with respect to each Loan that accrues interest at the Adjusted LIBOR Rate, the end of the LIBOR Period applicable to such Loan.

"Minimum LIBOR Loan Amount" shall mean One Million Dollars ($1,000,000).

"Multiemployer Plan" shall mean a multiemployer pension plan as defined in ERISA 3(37) to which the Borrower or any Controlled Group Member is or has been required to contribute subsequent to September 25, 1980.

"Note" shall mean the promissory note of the Borrowers, evidencing the joint and several obligations of the Borrowers to repay the Loans.

"Notice

of Borrowing" shall have the meaning given that term in Section 2.1.

"Notice of Conversion/Continuation" shall have the meaning given that term in Section 2.4.

"Obligations" shall mean, collectively, all liabilities, duties and obligations of the Borrowers to the Lender with respect to any covenants, representations or warranties herein or in the Loan Documents, with respect to the principal of and interest on the Loans, and all other present and future fixed and/or contingent obligations of the Borrowers to the Lender hereunder, under the Loan Documents, and otherwise, including, without limitation, obligations with respect to interest accruing (or which would accrue but for 502 of the Bankruptcy Code) after the date of any filing by Borrowers of any petition in bankruptcy or the commencement of any bankruptcy, insolvency or similar proceedings with respect to Borrowers.

"Participating Member State" shall mean each state so described in any EMU Legislation.

"PBGC" shall mean the Pension Benefit Guaranty Corporation.

"Person" shall mean an individual, a corporation, a partnership, a joint venture, a trust or unincorporated organization, a joint stock company or other similar organization, a government or any political subdivision thereof, or any other legal entity.

"Pounds Sterling" shall mean lawful money of England.

"Premises" shall mean any real property, wherever located, owned, leased, used or occupied by any Borrower.

"Regulatory Change" shall mean (a) any change on or after the date of this Agreement in United States federal, state, or any foreign, laws or regulations (including Regulation D of the Board of Governors of the Federal Reserve System and the Bank of England Act 1988) applying to the class of banks including the Lender (or any Affiliate thereof), or (b) the adoption or making on or after such date of any interpretations, directives or requests applying to a class of banks including the Lender (or any Affiliate thereof) of or under any United States federal or state, or any foreign, laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority (including, without limitation, the United States Federal Reserve System, the Bank of England and the Financial Services Authority) charged with the interpretation or administration thereof.

"Release" shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, or dumping.

"Remedial Actions" shall mean:

clean-up or removal of Hazardous Substances;</LI>

<LI>

such actions as may be necessary to monitor, assess, or evaluate the Release or threatened Release of Hazardous Substances;</LI>

<LI>

proper disposal or removal of Hazardous Substances;</LI>

<LI>

the taking of such other actions as may be necessary to prevent, minimize, or mitigate the damages caused by a Release or threatened Release of Hazardous Substances to the public health or welfare or to the environment; and</LI>

<LI>

the providing of emergency assistance after a Release.</LI>

</OL>

Remedial Actions include, but are not limited to, such actions at the location of a Release as: storage; confinement; perimeter protection using dikes, trenches, or ditches; clay cover; neutralization; clean-up of Hazardous Substances or contaminated materials; recycling or reuse; diversion; destruction; segregation of reactive wastes; dredging or excavations; repair or replacement of leaking containers; collection of leachate and runoff; onsite treatment or incineration; providing alternative water supplies; and any monitoring reasonably required to assure that such actions protect the public health and welfare and the environment.

"Subsidiary" shall mean any corporation more than fifty percent (50%) of the outstanding shares of capital stock of which (except for directors' qualifying shares, if required by law) are at the time owned by a Borrower and/or one or more Subsidiaries.

"Tangible Net Worth" shall mean, at any time, the amount by which (a) the par value (or value stated on the books) of all classes of Arrow International's capital stock, plus (or minus in the case of deficit) the amount of surplus, whether capital or earned, of the Arrow Group exceeds (b) the aggregate amount carried as assets on the books of the Arrow Group, for (i) goodwill, licenses, patents, trademarks, treasury stock, unamortized debt discount and expense and other intangibles, (ii) accounts receivable from, investments in, and any other amount carried as assets arising out of or in connection with any transaction between Arrow International and any Affiliate, (iii) cost of purchased assets and other investments in excess of the net book value thereof as of the time of the acquisition by the Arrow Group and (iv) write-up in the book value of any assets of the Arrow Group resulting from a revaluation thereof subsequent to August 31, 2000, all as determined on a consolidated basis in accordance with GAAP applied on a consistent basis.

"Termination Date" shall mean April 30, 2002 or, if such day is not a Business Day, the next succeeding Business Day, unless such Business Day falls in another calendar month, in which case the Termination Date shall be the next preceding Business Day.

"Third Stage EMU" shall mean the third stage of economic and monetary union as contemplated by the Treaty on European Union (which commenced on January 1, 1999).

"Treaty on European Union" shall mean the Treaty of Rome of March 25, 1957, as amended by the Single European Act of 1986 and the Maastricht Treaty (signed February 7, 1992), as amended from time to time.

"Unfunded Capital Expenditures" shall mean, with respect to the Arrow Group on a consolidated basis, the aggregate amount of Capital Expenditures not specifically financed with the proceeds of Debt permitted under Section 6.2. ;

SECTION 2. <A NAME="_Toc508084460">THE CREDIT</A>

2.1 <A NAME="_Toc508084461">Loans.</A>

<LI>

Subject to, and in accordance with, the terms and conditions of this Agreement, the Lender agrees to extend credit to the Borrowers by making Loans to them, from time to time during the period commencing on the Closing Date and ending on the Business Day preceding the Termination Date, in an aggregate outstanding amount that shall not exceed at any one time the Borrowing Limit. The Borrowing Limit with respect to all Loans, and the maximum principal amount that may be made available to the Borrowers, shall be Sixty-Five Million Dollars ($65,000,000) (inclusive of the Dollar Equivalent of all Loans denominated in an Alternative Currency), and the Alternative Currency Borrowing Sub-Limit, with respect to Loans made in an Alternative Currency, shall be the Dollar Equivalent of Twenty-Five Million Dollars ($25,000,000).</LI>

<LI>

During the period referred to in Section 2.1(a), the Borrowers may use the Lender's commitment under the Loans by borrowing, repaying and reborrowing. The Borrowers shall notify the Lender in writing in the form of Exhibit "B" attached hereto (a "Notice of Borrowing") of each proposed borrowing under the Loans not later than 12:00 noon, Philadelphia, Pennsylvania time on the day of such proposed borrowing for all LIBOR Market Index Rate Loans, not later than 10:00 a.m., Philadelphia, Pennsylvania time two (2) days prior to the day of such proposed borrowing for all LIBOR Loans to be denominated in Dollars, and not later than four (4) days prior to the day of such proposed borrowing for all Loans to be denominated in an Alternative Currency. In all such cases, the Borrowers shall specify: (i) the date of such borrowing, which shall be a Business Day, (ii) whether the Loan shall be denominated in Dollars or an Alternative Currency, (iii) if such Loan is denominated in Dollars, whether such Loan shall be a LIBOR Loan or a LIBOR Market Index Rate Loan, (iv) if such Loan is denominated in an Alternative Currency, whether such Loan shall be a LIBOR Loan or an Alternative Currency Base Rate Loan, (v) in the case of a LIBOR Loan, the duration of the LIBOR Period applicable thereto, and (vi) the amount of any such borrowing, which shall be in an amount not less than $1,000,000 for each Loan. A Notice of Borrowing received after 10:00 A.M., Philadelphia, Pennsylvania, time shall be deemed received on the next Business Day.</LI>

<LI>

The Borrowers authorize and direct the Lender to disburse the proceeds of each such borrowing by direct deposit to the respective Borrower's demand deposit account maintained with the Lender. With respect to Borrowers other than Arrow International, the parties shall institute mutually acceptable arrangements for the disbursement of Loan proceeds.</LI>

<LI>

The Termination Date may be extended or renewed by the Lender, in its sole discretion, on a day-to-day basis or otherwise, based on a letter to such effect from the Lender to the Borrowers or by a written agreement between the parties hereto; provided, however, the Lender shall have no duty or obligation, express or implied, to extend the Termination Date or consider any request for such an extension. The Lender shall provide to Arrow International by February 1, 2002 either (i) an offer to extend the Termination Date and renew the borrowing availability under this Agreement for an additional period of time after April 1, 2002, which offer shall include the terms and conditions applicable to such offer, or (ii) notify Arrow International that the Lender will not extend the Termination Date under this Agreement. The Lender's failure to make an offer by February 1 to extend the Termination Date and renew the borrowing availability under this Agreement shall be deemed a notification that the Termination Date will not be extended.</LI></OL>

2.2 <A NAME="_Toc508084462">Disbursement of Loans.

</A>

<LI>

Not later than 4:00 p.m. (Philadelphia time) on the proposed borrowing date for any Loan denominated in Dollars (and provided that the Borrowers are otherwise in compliance with the terms and conditions of this Agreement, including the advance notice provisions of Section 2.1(b) hereof), the Lender will make available to the Borrower making the borrowing request, in Dollar funds immediately available, the requested Loan to be made on such borrowing date.</LI>

<LI>

Not later than 11:00 a.m. (London time) on the proposed borrowing date for any Loan denominated in an Alternative Currency (and provided that the Borrowers are otherwise in compliance with the terms and conditions of this Agreement, including the advance notice provisions of Section 2.1(b) hereof), the Lender will make available to the Borrower making the borrowing request, at the office of the Lender's Correspondent in the requested Alternative Currency and in funds immediately available, the requested Loan to be made on such borrowing date.<A NAME="_Toc465563770"></a><A NAME="_Toc465569237"></LI></OL>

</a>2.3 <A NAME="_Toc508084463">Note. The Loans shall be evidenced by the Note executed by all of the Borrowers and payable to the order of the Lender for the account of its Applicable Lending Office in an amount equal to the maximum principal amount of the Loans. The Lender shall record the date, amount and Currency of each Loan and the date, amount and Currency of each payment of principal made by each Borrower with respect thereto, and may, if the Lender so elects in connection with any transfer or enforcement of the Note, endorse on a schedule to be attached thereto appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding; provided that the failure of the Lender to make any such recordation</A> <A NAME="_Toc485015703"></a><A NAME="_Toc485015887">or endorsement shall not affect the obligations of any Borrower hereunder or under the Note. The Lender is hereby irrevocably authorized by each Borrower to so endorse the Note and to attach and make a part of the Note a continuation of any such schedule as and when required.</A>

2.4 I<A NAME="_Toc508084464">nterest</A>.

<LI>

Interest Rate Options. Subject to the provisions of this Section 2.4, at the election of the Borrowers, (i)  Loans denominated in Dollars shall bear interest at (A) the Adjusted LIBOR Market Index Rate, or (B) the Adjusted LIBOR Rate, and (ii) Loans denominated in an Alternative Currency shall bear interest at (A) the Alternative Currency Base Rate or (B) the Adjusted LIBOR Rate. The Borrowers shall select the rate of interest and LIBOR Period, if any, applicable to any Loan at the time a Notice of Borrowing is given pursuant to Section 2.1 or at the time a Notice of Conversion/Continuation is given pursuant to Section 2.4(c). Each Loan or portion thereof bearing interest based on the LIBOR Market Index Rate shall be a "LIBOR Market Index Rate Loan," each Loan or portion thereof bearing interest based on the LIBOR Rate shall be a "LIBOR Loan," and each Loan or portion thereof bearing interest based on the Alternative Currency Base Rate shall be an "Alternative Currency Base Rate Loan." Any Loan or any portion thereof as to which the Borrowers have not duly specified an interest rate as provided herein shall be deemed a LIBOR Market Index Rate Loan denominated in Dollars. Arrow International may borrow Loans in Dollars or Alternative Currencies; each other Borrower may only borrow Loans denominated in the Alternative Currency of such Borrower's domicile. </LI>

<LI>

Interest Payment and Computation. Interest on each LIBOR Market Index Rate Loan or Alternative Currency Base Rate Loan shall be payable in arrears on the first Business Day of each month commencing on April 1, 2001, and continuing thereafter until all Indebtedness owing in connection with such Loans has been paid finally and in full; and interest on each LIBOR Loan shall be payable on the last day of each LIBOR Period applicable thereto. All interest rates, fees and commissions provided for pursuant to this Agreement shall be computed on the basis of a 360-day year and assessed for the actual number of days elapsed.< /LI>

<LI>

Conversion/Continuation. Subject to the notice provisions set forth in this Section 2.4 (c), at any time and from time to time, a Borrower may notify (which notice shall be irrevocable) the Lender that it is electing to have interest accrue on a Loan for a LIBOR Period specified in writing by the Borrower at the Adjusted LIBOR Rate on the aggregate unpaid amount of such Loan. Following an interest rate election made by a Borrower with respect to any Loan pursuant to this Section 2.4(c), but subject to all other conditions of this Agreement, the Borrower may, in accordance with the provisions of this Section& nbsp;2.4(c), from time to time, elect to convert or continue the type of interest rate borne by such Loan. Whenever a Borrower desires to convert or continue any Loan hereunder, the Borrowers shall deliver to the Lender prior written notice in the form attached as Exhibit "C" (a "Notice of Conversion/Continuation") not later than 11:00 a.m. (Philadelphia time) four (4) Business Days (with respect to any Loan denominated in an Alternative Currency) and two (2) Business Days (with respect to any Loan denominated in Dollars) before the day on which a proposed conversion or continuation of such Loan is to be effective. The Borrowers shall in all such cases specify: (A) the Loans to be converted or continued, and, in the case of any LIBOR Loan to be converted or continued, the last day of the LIBOR Period therefor, (B) the Alternative Currency in which such Loan is denominated, (C) the effective date of such conversion or continuation (which shall be a Business Day), (D) the principal amount of such Loans to be converted or continued, and (E) the LIBOR Period to be applicable to such converted or continued LIBOR Loan.</LI>

<LI>

Minimum Amounts;

Notices. Notwithstanding anything contained herein to the contrary, (i) any LIBOR Loan shall be in minimum denominations equal to the Minimum LIBOR Loan Amount and in multiples thereof if in excess thereof, and (ii) the Borrowers shall not be permitted to request a LIBOR Loan (including a conversion thereto) that, if made, would result in more than ten (10) LIBOR Loans outstanding at any time (it being understood that LIBOR Loans having different LIBOR Periods, regardless of whether they commence on the same date, shall be considered separate LIBOR Loans). In the event that the Borrower fails to provide the Lender with any Notice of Conversion/Continuation, as described above, such Loan shall at the end of the LIBOR Period applicable to such Loan immediately and automatically cease to be a LIBOR Loan and shall commence bearing interest at the Adjusted LIBOR Market Index Rate (with respect to Loans made in Dollars) or the Alternative Currency Base Rate (with respect to Loans made in Alternative Currencies). Notwithstanding anything contained herein to the contrary, the Borrowers shall not convert, or permit the conversion of, any LIBOR Loan to a LIBOR Market Index Rate Loan or Alternative Currency Base Rate Loan until the expiration of the LIBOR Period then in effect with respect thereto.</LI>

<LI>

Termination

Date. Any LIBOR Period shall end prior to the Termination Date and the Borrower's election of LIBOR Periods hereunder shall not violate the provisions of this Section 2.4 (e).</LI>

<LI>

Suspension of LIBOR

Rate. In the event that the Lender shall determine (which determination shall be conclusive and binding upon the Borrowers) that, by reason of circumstances affecting the interbank eurodollar market or otherwise, adequate and reasonable means do not exist for ascertaining LIBOR, the Borrower's right to elect to have interest accrue on any Loan at the Adjusted LIBOR Rate shall be suspended until such time that the Lender determines that adequate and reasonable means exist for ascertaining LIBOR.</LI>

<LI>

Legal

Requirements. Notwithstanding anything contained herein to the contrary, if any Applicable Law, or any change in or in the application or interpretation of such Applicable Law, or any other event shall make it unlawful for the Lender to make or maintain LIBOR Loans:</LI>

<LI>

The obligation of the Lender to make or maintain LIBOR Loans shall be cancelled automatically and immediately; and</LI>

<LI>

Such LIBOR Loans shall convert automatically and immediately to LIBOR Market Index Rate Loans (with respect to Loans made in Dollars) or to Alternative Currency Base Rate Loans (with respect to Loans made in Alternative Currencies).</LI></OL>

<LI>

Prohibited Prepayment;

Indemnity. The Borrowers shall not prepay, in whole or in part, any LIBOR Loans prior to the expiration of the appropriate LIBOR Period applicable thereto. If any Borrower makes any payment of principal with respect to any Loan (pursuant to Section 2 or Section 7 or otherwise), on any day other than the Maturity Date thereof, or if any Borrower fails to borrow or prepay any such Loan after notice has been given to the Lender in accordance with Section 2.1 or 2.4, the Borrowers shall indemnify the Lender from and against and reimburse the Lender within 30 days after demand for any resulting loss or expense incurred by it, including (without limitation) any loss incurred in obtaining, liquidating or employing deposits from third parties;

provided that the Lender shall have delivered to the Borrowers a certificate as to the amount of such loss or expense, which certificate shall be conclusive in the absence of manifest error. The Borrowers shall indemnify the Lender and hold the Lender harmless from and against any loss or expense that the Lender may sustain or incur as a result of (i) any prepayment of a LIBOR Loan, (ii) the conversion of a LIBOR Loan to a LIBOR Market Index Rate Loan or an Alternative Currency Base Rate Loan prior to the expiration of the LIBOR Period applicable thereto, (iii) a Loan being converted from a LIBOR Loan to a LIBOR Market Index Rate Loan or an Alternative Currency Base Rate Loan by reason of the circumstances described in Sections 2.4(f) or (g), or (iv) a LIBOR Loan not being made after notice thereof is provided to the Lender pursuant hereto. Such agreement to indemnify shall include, without limitation, any interest payable by the Lender to lenders of funds obtained by the Lender in order to make or maintain LIBOR Loans pursuant hereto.</LI>

<LI>

Continuation/Conversion;

Default. Following the occurrence of a Default or an Event of Default, the Borrowers may not elect to have any Loan made or maintained as, or converted into, a LIBOR Loan after the expiration of any LIBOR Period then in effect for that Loan.</LI>

<LI>

Late

Charges. Any overdue principal of or interest on any Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of three percent (3%) plus the interest rate otherwise applicable to such

Loan.</LI></OL>

2.5 <A NAME="_Toc508084465">Mandatory Repayment of Loans.</A>

<LI>

Borrowing Limit.

If at any time, as determined by the Lender, based upon the Dollar Equivalent of all outstanding Loans for any reason whatsoever (including any currency fluctuations), the outstanding principal amount of all Loans exceeds the Borrowing Limit then, in each such case, the Borrowers shall repay immediately upon notice from the Lender the amount of any such excess, with each such repayment applied (i) first (and to the extent necessary) to eliminate such excess, to Loans which are LIBOR Market Index Rate Loans or Alternative Currency Base Rate Loans (and/or reduce any pending request for such Loans by the Dollar Equivalent of such excess), and (ii) second, if (and to the extent) necessary to eliminate such excess, to Loans which are LIBOR Loans (and/or reduce any pending requests for a borrowing or continuation or conversion of such Loans submitted in respect of such Loans by the Dollar Equivalent of such excess).</LI>

<LI>

Alternative Currency Borrowing Sub-Limit.

If at any time, as determined by the Lender, based upon the Dollar Equivalent of all outstanding Loans (i) solely because of currency fluctuations, the outstanding principal amount of all Alternative Currency Loans exceeds the lesser of (A) one hundred five percent (105%) of (1) the Borrowing Limit

minus (2) the sum of all outstanding Loans denominated in Dollars, and (B) one hundred five percent (105%) of the Alternative Currency Borrowing Sub-Limit, or (ii) for any other reason the outstanding principal amount of all Alternative Currency Loans exceeds the lesser of (A)(1) the Borrowing Limit

minus (B) the sum of all outstanding Loans denominated in Dollars and (B) the Alternative Currency Borrowing Sub-Limit, then in each case such excess shall be immediately repaid, in the Currency or Currencies in which such Alternative Currency Loan or Alternative Currency Loans were funded, by the Borrowers to the Lender. The Lender shall provide the Borrower with written notice of any amounts payable under this Section 2.5(b) and shall allow the Borrower five (5) days to pay any such amount, which amount may be paid from other funds of a Borrower to avoid the early termination of a LIBOR Period.</LI>

<LI>

Compliance.

The Borrowers' compliance with this Section 2.5 shall be tested from time to time by the Lender at its sole discretion, but in any event on each day an interest payment is due. Each such repayment pursuant to this Section& nbsp;2.5 shall be accompanied by any amount required to be paid pursuant to Section 2.4. </LI></OL>

2.6 <A NAME="_Toc508084466">Voluntary Prepayments. Except as otherwise provided herein, the Borrowers at any time and from time to time may voluntarily prepay Loans accruing interest at the Adjusted LIBOR Market Index Rate or the Alternative Currency Base Rate or any of them,</A> <A NAME="_Toc508084467">in whole or in part, upon notification to the Lender of such prepayment not later than 2:00 p.m. on the date of prepayment, in integral multiples of Five Thousand Dollars ($5,000).</A>

2.7 <A NAME="_Toc508084468">Maturity of Loans. Each Loan shall mature, and the principal amount thereof and all accrued interest thereon shall become due and payable in the Currency borrowed, on the Maturity Date applicable to such Loan.</A>

2.8 <A NAME="_Toc508084469">General Provisions as to Payments. Arrow International and any other Borrower obtaining Loans denominated in Dollars shall make each payment of principal of and interest on the Loans not later than 1:00 p.m. (local time in the appropriate Applicable Lending Office) on the date when due, without set-off, counterclaim or other deduction, in the respective Currencies in which such Loans are denominated and in immediately available funds, to the Lender at its Applicable Lending Office.</A> Arrow International and any other Borrower obtaining Loans denominated in Dollars authorize and direct Lender to debit, against any one or more of Arrow International's <A NAME="_Toc465563775"></a><A NAME="_Toc465569242">or such Borrower's general accounts with the Lender, any payments due and owing with respect to the Loans.</A> For Loans made in an Alternative Currency, the Lender and the Borrower obtaining such Loans shall, at the making of the initial Loan to such Borrower, institute mutually satisfactory arrangements to provide for the payment of regularly scheduled interest payments due from such Borrower.

<A NAME="_Toc485015893">2.9</a> <A NAME="_Toc508084470">Loan Account. The Lender shall record in one or more Loan Accounts, the Loans, all advances to and all payments made by the Borrowers on account of the Loans, and all other appropriate debits and credits. Each month the Lender shall render to Borrowers a statement setting forth the debit balance of the Loan Account as of the close of the preceding month, together with a statement of the amount of interest and other charges due the Lender as of that time. Each statement shall be considered correct and accepted by the Borrowers and conclusively binding upon the Borrowers unless the Borrowers notify the Lender to the contrary in writing within ten (10) days from the receipt of the statement.</A>

2.10<A NAME="_Toc485015894"> </a><A NAME="_Toc508084471">Maximum Legal Rate. The Borrowers shall not be obligated to pay and the Lender shall not collect interest on any Obligation at a rate in excess of the maximum permitted by law or the maximum that will not subject the Lender to any civil or criminal penalties. If, because of the acceleration of maturity, the payment of interest in advance or any other reason, the Borrowers are required, under the provisions of any Loan Document or otherwise, to pay interest at a rate in excess of such maximum rate, the rate of interest under such provisions shall immediately and automatically be reduced to such maximum rate, and any payment made in excess of such maximum rate, together with interest thereon at the rate provided herein from the date of such payment, shall be immediately and automatically applied to the reduction of the unpaid principal balance of the Obligations as of the date on which such excess payment was made. If the amount to be so applied to reduction of the unpaid principal</A> <A NAME="_Toc484988688"></a><A NAME="_Toc484988777">balance exceeds the unpaid principal balance, the amount of such excess shall be refunded by the Lender to the Borrowers.</A>

2.11<A NAME="_Toc485015895"> </a><A NAME="_Toc508084472">Application of Payments. All payments shall be applied first to the payment in full of any costs incurred in the collection of any Obligation, including (without limitation) reasonable attorneys' fees, then to the payment in full of any late charges, then to the</A> <A NAME="_Toc485015712"></a><A NAME="_Toc485015896">payment in full of accrued, unpaid interest and finally to the reduction of the unpaid principal balance.</a><A NAME="_Toc465563778"></a><A NAME="_Toc465569245"></A>

2.12 Y<A NAME="_Toc508084473">ield Protection; Capital Adequacy.</A>

<LI>

The Borrowers shall pay to the Lender from time to time such amounts as the Lender may determine to be necessary to compensate it for any costs incurred by the Lender or any reduction in any amount receivable by the Lender hereunder (such increases in costs and reductions in amounts receivable being herein called "Additional Costs"), resulting from any Regulatory Change which: (i)  changes the basis of taxation of any amounts payable to the Lender under this Agreement or the Note (other than taxes imposed on the overall net income of the Lender by the jurisdiction in which the Lender has its principal office); or (ii)  imposes or modifies any reserve, special deposit or similar requirements relating to any extensions of credit, letters of credit, or other assets of, or any deposits with or other liabilities of, the Lender (but excluding any such requirement to the extent reflected in an applicable reserve requirement); or (iii) imposes any other condition affecting this Agreement (or any of such extensions of credit or liabilities). The Lender will notify the Borrowers of any event occurring after the date of this Agreement that will entitle the Lender to compensation pursuant to this Subsection as promptly as practicable after it obtains knowledge thereof and determines to request such compensation. The Lender will furnish the Borrowers with a statement setting forth the basis and amount of each such request.</LI>

<LI>

If after the date hereof, the Lender shall have determined that the adoption of any applicable law, rule, regulation or treaty regarding capital adequacy, or any Regulatory Change, has or would have the effect of reducing the rate of return on the Lender's capital as a consequence of its obligations hereunder to a level below that which the Lender could have achieved but for such adoption, change or compliance (taking into consideration the Lender's policies with respect to capital adequacy) by an amount the Lender deems material, the Borrowers shall pay to the Lender such additional amount or amounts as will compensate the Lender for such reduction.</LI>

<LI>

In determining the amounts due under this Subsection, the Lender may use any reasonable averaging and attribution methods. Determination by the Lender for purposes of this Subsection of the effect of any Regulatory Change on its costs of making or maintaining Loans hereunder or on amounts receivable by it hereunder and of the additional amounts required to compensate the Lender shall be conclusive, absent manifest error.    </LI></OL>

2.13<A NAME="_Toc485015898"> </a><A NAME="_Toc508084474">Security. The Borrowers grant the Lender, as security for payment of the Obligations, a lien upon and security interest in any and all deposit and other accounts of the Borrowers with the Lender and any other debts or other obligations the Lender may owe to the Borrowers from time to time.</A>

<A NAME="_Toc485015899">2.14 </a><A NAME="_Toc508084475">Payments of Certai</A></A>n Alternative Currencies</A>n Alternative Currencies.

<LI>

Those provisions of this Agreement providing for payment or repayment in a national currency shall be construed such that, in relation to the payment of any amount of Euros or national currency units, such amount shall be made available to the Lender in immediately available, freely transferable, cleared funds to the Lender's account with the Lender's Correspondent or as the Lender otherwise may from time to time nominate for this purpose.</LI>

<LI>

With respect to the payment of any amount denominated in Euros or in a national currency unit, the Lender shall not be liable to the Borrowers in any way whatsoever for any delay, or the consequences of any delay, in the crediting to any account of any amount required by this Agreement to be paid by the Lender if the Lender has made reasonable effort to effect all relevant steps to achieve, on the date required by this Agreement, the payment of such amount in immediately available, freely transferable, cleared funds (in Euros or, as the case may be, in a national currency unit) to the account which such Borrower shall have specified for such purpose. As used in this Section 2.14(b), "all relevant steps," means all such steps as may be prescribed from time to time by the regulations or operating procedures of such clearing or settlement system as the Lender (or, as applicable, the Lender's Correspondent) may from time to time reasonably believe to be in effect for the purpose of clearing or settling payment in Euros or in a national currency unit.</LI></OL>

2.15<A NAME="_Toc485015900"> </a><A NAME="_Toc508084476">Redenomination of Alternative Currency Loans.</A>

<LI>

Redenomination of Loans. Any Loan to be denominated in the currency of the applicable Participating Member State shall be made in Euros; provided that any Loan may, if so requested by a Borrower and approved by the Lender, be made in the national currency unit (based upon the Fixed Exchange Rate) of the applicable Participating Member State so long as such national currency unit continues to be available as legal tender for obligations of the same type or character as the obligations set forth in this Agreement, is freely convertible and is not subject to exchange controls.</LI>

<LI>

Redenomination of Obligations. Any obligation of any party under this Agreement or any other Loan Document which has been denominated in the fixed national currency unit of a Participating Member State shall be redenominated into Euros at the Fixed Exchange Rate; provided that (i) if and to the extent that any EMU Legislation provides that, following the commencement of the Third Stage of EMU, an amount denominated either in Euros or in the national currency unit of a Participating Member State and payable within the Participating Member State by crediting an account of a creditor can be paid by a debtor either in Euros or in that national currency unit, each party to this Agreement shall be entitled to pay or repay any such amount either in Euros or in such national currency unit, and (ii) any amount paid in a national currency unit shall equal, at the Fixed Exchange Rate for that national currency unit, the required amount stated to be due in Euros.</LI>

<LI>

Further Assurances. The terms and provisions of this Agreement will be subject to such reasonable changes of construction as determined by the Lender to reflect the implementation of the EMU in any Participating Member State or any market conventions relating to the fixing and/or calculation of interest being changed or replaced and to reflect market practice at that time, and subject thereto, to put the Lender and the Borrowers in the same position, so far as possible, that they would have been if such implementation had not occurred. In connection therewith, the Borrowers agree, at the request of the Lender, at the time of or at any time following the implementation of the EMU in any Participating Member State or any market conventions relating to the fixing and/or calculation of interest being changed or replaced, to enter into an agreement amending this Agreement in such manner as the Lender shall reasonably request.</LI></OL>

2.16<A NAME="_Toc485015901"> </a><A NAME="_Toc508084477">Regulatory Limitation. In the event, as a result of increases in the value of Alternative Currencies against the Dollar or for any other reason, the obligation of the Lender to make Loans (taking into account the Dollar Equivalent of the Indebtedness and all other indebtedness required to be aggregated under 12 U.S.C.A.  84, as amended, the regulations promulgated thereunder and any other Applicable Law) is determined by the Lender to exceed its then applicable legal lending limit under 12 U.S.C.A.  84, as amended, and the regulations promulgated thereunder, or any other Applicable Law, the amount of additional Loans the Lender shall be obligated to make or issue or participate in hereunder shall immediately be reduced to the maximum amount which the Lender may legally advance (as determined by the Lender), and, to the extent necessary under such laws and regulations (as determined by the Lender), with respect to the applicability of such laws and regulations to itself), and the Borrowers shall reduce, or cause to be reduced, complying to the extent practicable with the remaining provisions hereof, the Indebtedness outstanding hereunder by an amount sufficient to comply with such maximum amounts.</A>

<A NAME="_Toc485015902">2.17 </a><A NAME="_Toc508084478">Changed Circumstances.</A>

<LI>

Circumstances Affecting LIBOR Rate and Alternative Currency Availability. If, with respect to any LIBOR Period for any LIBOR Loan, the Lender shall determine that (i) by reason of circumstances affecting the foreign exchange and interbank markets generally, deposits in eurodollars, or an Alternative Currency in the applicable amounts are not being quoted via the Reuters Screen (LIBOR 01) or offered to the Lender for such LIBOR Period, or (ii) a fundamental change has occurred in the foreign exchange or interbank markets with respect to any Alternative Currency (including changes in national or international financial, political or economic conditions or currency), then the Lender shall forthwith give notice thereof to the Borrowers. Thereafter, until the Lender notifies the Borrowers that such circumstances no longer exist, the obligation of the Lender to make LIBOR Loans or Alternative Currency Loans, as applicable, and the right of the Borrowers to convert any Loan to or continue any Loan as a LIBOR Loan or an Alternative Currency Loan, as applicable, shall be suspended, and the Borrowers shall repay in full (or cause to be repaid in full) the then outstanding principal amount of each such LIBOR Loan or Alternative Currency Loan, as applicable, together with accrued interest thereon, on the last day of the then current LIBOR Period applicable to such LIBOR Loan or Alternative Currency Loan, as applicable, or convert the then outstanding principal amount of each such LIBOR Loan or Alternative Currency Loan, as applicable, to a LIBOR Market Index Rate Loan or Alternative Currency Base Rate Loan (if permitted) as of the last day of such LIBOR Period. Thereafter, until the Lender notifies the Borrowers that circumstances set forth in this Section no longer exist, the rate or rates of interest applicable to outstanding Loans shall be based upon such comparable rate or rates as determined by the Lender.</LI>

<LI>

Laws Affecting LIBOR Rate and Alternative Currency Availability. If, after the date hereof, the introduction of, or any change in, any Applicable Law or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Lender (or any of its lending offices) with any request or directive (whether or not having the force of law) or any such Governmental Authority, central bank or comparable agency, shall make it unlawful or impossible for the Lender (or any of its respective lending offices) to honor its obligations hereunder to make or maintain any LIBOR Loan or any Alternative Currency Loan, the Lender shall promptly give notice to the Borrowers. Thereafter, until the Lender notifies the Borrowers that such circumstances no longer exist, (i)  the obligations of the Lender to make LIBOR Loans or Alternative Currency Loans, as applicable, and the right of the Borrowers to convert any Loan or continue any Loan as a LIBOR Loan or an Alternative Currency Loan, as applicable, shall be suspended, and (ii) if the Lender may not lawfully continue to maintain a LIBOR Loan or an Alternative Currency Loan, as applicable, to the end of the then current LIBOR Period applicable thereto as a LIBOR Loan or Alternative Currency Loan, as applicable, the applicable LIBOR Loan or an Alternative Currency Loan shall immediately be converted to a comparable rate or rates as determined by the Lender.</LI>

<LI>

Exchange Indemnification and Increased Costs. The Borrowers shall upon demand from the Lender, pay to the Lender the amount of (i) any loss or cost or increased cost incurred by the Lender, (ii) any reduction in any amount payable to or in the effective return on the capital to the Lender, (iii) any interest or any other return, including principal, foregone by the Lender as a result of the introduction of, change over to or operation of the Euro in any Participating Member State, or (iv) any currency exchange loss, that the Lender sustains as a result of any Borrower's election to borrow in national currency units and repay in Euros or to borrow in Euro units and repay in national currency units. A certificate of the Lender setting forth the basis for determining such additional amount or amounts necessary to compensate the Lender shall be conclusively presumed to be correct save for manifest error.</LI></OL>

2.18<A NAME="_Toc485015903"> </a><A NAME="_Toc508084479">Indemnity. Each Borrower hereby indemnifies the Lender against any loss or expense (including any foreign exchange costs) which may arise or be attributable to the Lender obtaining, liquidating or employing deposits or other funds acquired to effect, fund or maintain any Loan (a) as a consequence of any failure by the Borrowers to make any payment when due of any amount due hereunder in connection with a LIBOR Loan or an Alternative Currency Loan, (b) due to any failure of the Borrowers to borrow on a date specified therefor in a Notice of Borrowing or Notice of Continuation/Conversion or (c) due to any payment, prepayment or conversion of any LIBOR Loan or any Alternative Currency Loan on a date other</A> <A NAME="_Toc484988698"></a><A NAME="_Toc484988787">than the last day of the LIBOR Period therefor. The amount of such loss or expense shall be determined, in the Lender's sole discretion, based upon the assumption that the Lender funded the LIBOR Loans in the London interbank market and using any reasonable attribution or</A> <A NAME="_Toc485015721">averaging methods which the Lender deems appropriate and practical. A certificate of the Lender setting forth the basis for determining such amount or amounts necessary to compensate the Lender shall be forwarded to the Borrowers and shall be conclusively presumed to be correct save for manifest error.</A>

2.19<A NAME="_Toc485015904"> </a><A NAME="_Toc508084480">Rounding and Other Consequential Changes. Without prejudice and in addition to any method of conversion or rounding prescribed by any EMU Legislation and without prejudice to the respective obligations of the Borrowers to the Bank under or pursuant to this Agreement:</A>

<LI>

each reference in this Agreement to a minimum amount (or an integral multiple thereof) in a national currency unit to be paid to or by the Lender shall be replaced by a reference to such reasonably comparable amount (or an integral multiple thereof) in Euros as the Lender may from time to time specify; and</LI>

<LI>

except as expressly provided in this Agreement, each provision of this Agreement, including the right to combine currencies to effect a set-off, shall be subject to such reasonable changes of interpretation as the Bank may from time to time specify to be necessary or appropriate to reflect the introduction of or change over to the Euro in Participating Member States.</LI></OL>

SECTION 3<A NAME="_Toc485015905"> </a><A NAME="_Toc508084481">REPRESENTATIONS AND WARRANTIES.</A>

To induce the Lender to enter into this Agreement and to make the Loans, the Borrowers represent and warrant to the Lender that:

3.1 <A NAME="_Toc508084482">Organization and Qualification. Each Borrower and each Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and is duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction in which the conduct of its business or the ownership of its assets requires such qualification.</A>

3.2 <A NAME="_Toc508084483">Power and Authority. Each Borrower has the corporate power to execute, deliver and perform under, the Loan Documents and to borrow under this Agreement, and has taken all necessary corporate action to authorize the borrowings hereunder on the terms and conditions of this Agreement and the execution and delivery of, and performance under, the Loan Documents. No consent of any other party (including stockholders of any Borrower) and no consent, license, approval or authorization of, or registration or declaration with, any</A> <A NAME="_Toc485015908">governmental authority, bureau or agency is required in connection with the execution, delivery, performance, validity or enforceability of the Loan Documents.</A>

3.3<A NAME="_Toc485015909"> </a><A NAME="_Toc508084484">Enforceability. The Loan Documents, when executed and delivered to the Lender pursuant to the provisions of this Agreement, will constitute valid obligations of the Borrowers legally binding upon it and enforceable in accordance with their respective terms, except as enforceability of the foregoing may be limited by bankruptcy, insolvency or other laws</A> <A NAME="_Toc484988704">< /a><A NAME="_Toc484988793">of general application relating to or affecting the enforcement of creditors' rights and except as enforceability may be limited by the application or jurisdiction of foreign laws and courts.</A>

3.4<A NAME="_Toc485015910"> </a><A NAME="_Toc508084485">Conflict with Other Instruments. The execution and delivery of, and performance under, the Loan Documents will not violate or contravene any provision of any existing law or regulation or decree of any court, governmental authority, bureau or agency having jurisdiction in the premises or of the incorporation, organizational or governing documents of the Borrowers or of any mortgage, indenture, security agreement, contract, undertaking or other agreement to which any Borrower is a party or which purports to be binding upon them or any of their properties or assets, and will not result in the creation or imposition of any lien, charge, encumbrance on, or security interest in, any of their properties or assets pursuant to the provisions of any such mortgage, indenture, security agreement, contract, undertaking or other agreement.</A>

3.5<A NAME="_Toc485015911"> </a><A NAME="_Toc508084486">Litigation. No actions, suits or proceedings before any court or governmental department or agency (whether or not purportedly on behalf of any Borrower or any Subsidiary) are pending or, to the knowledge of the Borrowers, threatened (a) with respect to any of the transactions contemplated by this Agreement or (b) against or affecting the Borrowers or any Subsidiary or any of their properties that, if</A> <A NAME="_Toc508084487">adversely determined, could reasonably be expected to have a Material Adverse Effect upon the financial condition, business or operations of the Borrowers or any Subsidiary or the Borrowers' ability to perform any of their obligations under the Loan Documents.</A>

<A NAME="_Toc485015912">3.6 </a><A NAME="_Toc508084488">Taxes. The Borrowers have filed or caused to be filed all tax returns (including, without limitation, those relating to federal and state income taxes) required to be filed and has paid all taxes shown to be due and payable on said returns or on any assessments made against them (other than those being contested in good faith by appropriate proceedings for which adequate reserves have been provided on its books). No tax liens have been filed against the Premises or any other assets of the Borrower or any Subsidiary, and no claims are being asserted with respect to such taxes which could have a material adverse effect upon the financial condition, business or operations of the Borrower or any Subsidiary.</A>

3.7<A NAME="_Toc485015913"> </a><A NAME="_Toc508084489">Financial Condition. All consolidated and consolidating balance sheets, profit and loss statements, and other financial statements of the Borrowers, dated as of May 31, 1999, all of which have heretofore been delivered to the Lender, and all financial statements and data of the Borrowers which will hereafter be furnished to the Lender, are or will be (when furnished) true and correct and do or will (when furnished) present fairly, accurately and completely the consolidated financial position of the Borrowers and the results of operations as of the dates and for the periods for which the same are furnished. All such financial statements have been prepared in accordance with GAAP applied on a consistent basis. Neither any Borrower nor any Subsidiary possesses any "loss contingency" (as that term is defined in</A> <A NAME="_Toc485015914">Financial Accounting Standards Board, Statement of Financial Accounting Standards No. 5 - "FASB 5") which is not accrued, reflected, or reserved against in the balance sheet or disclosed in the footnotes to such balance sheet. There has been no Material Adverse Effect on the business, properties, operations or condition (financial or otherwise) of the Borrowers or any Subsidiary since the date of the financial statements which were most recently furnished by the Borrowers to the Lender. No event has occurred that could reasonably be expected to interfere substantially with the normal business operations of the Borrowers.</A>

<A NAME="_Toc485015915">3.8 </a><A NAME="_Toc508084490">Regulation U. Neither any Borrower nor any Subsidiary is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the</A> <A NAME="_Toc485015732">meaning of Regulation U of the Board of Governors of the Federal Reserve System), and no part of the proceeds of the Loans will be used to purchase or carry any margin stock or to reduce or retire any indebtedness incurred for such purpose or to extend credit to others for such purpose.</A>

3.9<A NAME="_Toc485015916"> </a><A NAME="_Toc508084491">Environmental Matters.</A>

<LI>

To the Borrowers' knowledge, and without performing any environmental investigation, the Premises have never been used by the Borrowers and are not being used to make, store, handle, treat, dispose of, generate, or transport Hazardous Substances in violation of any applicable law. To the Borrowers' knowledge, and without performing any environmental investigation, there has never been a Release of Hazardous Substances on, from, or near the Premises or any other property owned or used by any Borrower in violation of any applicable law or that caused or might cause Contamination, and no Contamination exists on any such property.</LI>

<LI>

The Borrowers and their Subsidiaries have never received any notification, citation, complaint, violation, or notice of any kind from any Person relating or pertaining to the making, storing, handling, treating, disposing, generating, transporting, or Release of any Hazardous Substances in violation of applicable law, and neither any Borrower nor any Subsidiary nor any property owned or used by any Borrower or any Subsidiary is under any investigation with respect to any such matters.</LI></OL>

3.10<A NAME="_Toc485015917"> </a><A NAME="_Toc508084492">ERISA. Each Borrower that is subject to any of the provisions of ERISA has at all times complied with and remains in compliance with all of its duties, obligations and liabilities under ERISA, there is no accumulated funding deficiency with respect to any employee pension plan maintained by any Borrower, no circumstances or events have occurred that could potentially cause the loss of the tax qualified status of any employee pension plan maintained by any Borrower, no liability has been asserted against any Borrower in connection with any employee pension plan or any multiemployer plan by the PBGC, by the trustee of a trust established pursuant to ERISA Section 4049, by a trustee appointed pursuant to ERISA Section 4042(b) or (c), or by a sponsor or agent of a sponsor of a multiemployer plan, and no lien has been attached and no person has threatened to attach a lien on any of the Borrowers' property as a result of failure to comply with ERISA or as a result of the termination of any employee pension plan. Each employee pension plan maintained by any Borrower is the subject of a favorable determination letter by the Internal Revenue Service with respect to its qualifications under Internal Revenue Code Section 401(a) and such employee pension plan related trusts are exempt from taxation under Internal Revenue Code Section 501(a).</A>

SECTION 4.<A NAME="_Toc485015918"> </a><A NAME="_Toc508084493">CONDITIONS OF BORROWING.</A>

4.1 <A NAME="_Toc508084494">Conditions to Effectiveness. This Agreement shall become effective upon satisfaction of the following conditions:</A>

<LI>

Loan Documents. The Borrowers shall have delivered or caused to be delivered to the Lender duly executed copies of each of the Loan Documents.</LI>

<LI>

Borrowers' Authorizations.</LI>

<LI>

The Borrowers shall have delivered to the Lender:</LI>

<LI>

a copy, certified by the Secretary of the respective Borrower, of the resolutions of the Board of Directors of such Borrower authorizing and approving the execution and delivery of and performance under this Agreement and the other Loan Documents and the borrowings provided for hereunder;</LI>

<LI>

the Borrowers' articles, certificate of incorporation, or other organizational documents, as appropriate, certified by the Secretary or Assistant Secretary of each Borrower;< /LI>

<LI>

a good standing or subsistence certificate with respect to Arrow International certified by the Secretary of State of the state of Arrow International's incorporation as of a date within ten (10) days of the Closing Date; and</LI>

<LI>

a copy of each Borrower's By-Laws or other similar governing documents, as currently in effect, certified by each Borrower's Secretary or Assistant Secretary.</LI></OL>

<LI>

The President and Secretary of each Borrower shall have duly executed and delivered to the Lender certificates of incumbency, in form and substance satisfactory to the Lender.</LI></OL>

<LI>

Legal Opinions. Counsel for the Borrowers shall have delivered to the lender a favorable opinion, dated the Closing Date, addressed to the Lender, and satisfactory in form and substance to the Lender.</LI>

<LI>

Satisfaction of Lender. All corporate and legal proceedings and instruments and agreements relating to the transactions contemplated by this Agreement or in any other document delivered in connection herewith shall be satisfactory in form and substance to the Lender, and the Lender shall have received all information and copies of all documents and papers, including records of corporate proceedings, governmental approvals, good standing certificates and other documentation which the Lender reasonably may have requested in connection therewith, such documents and papers where appropriate to be certified by proper corporate or governmental authorities.</LI></OL>

<A NAME="_Toc485015920">4.2 </a><A NAME="_Toc508084495">Conditions to All Loans. The obligation of the Lender to make any Loan is subject to the satisfaction of the following conditions:</A>

<LI>

Material Adverse

Change. No material adverse change shall have occurred in the financial condition, assets, or results of operations of the Borrowers from the date of the latest quarterly financial statements provided to the Lenders under Section  5.1(b).</LI>

<LI>

Notice of Borrowing. Receipt by the Lender of a Notice of Borrowing as required by Section 2.1.</LI>

<LI>

Borrowing Limits. The fact that, immediately after such Loan, the Dollar Equivalent of the aggregate principal amount of all Loans outstanding shall not exceed the Borrowing Limit and the Dollar Equivalent of all Loans denominated in Alternative Currencies shall not exceed the Alternative Currency Borrowing Sub-Limit.</LI>

<LI>

No Default. The fact that, immediately before and after such Loan, no Default shall have occurred and be continuing.</LI>

<LI>

Representations and Warranties. The fact that the representations and warranties of the Borrowers set forth in this Agreement shall be true on and as of the date of such Loan.</LI></OL>

For purposes of determining whether the amount of any Loan hereunder, together with all Loans then outstanding on any date of borrowing, would exceed the Borrowing Limit or the Alternative Currency Borrowing Sub-Limit, the amount of any Loan outstanding that is denominated in an Alternative Currency shall be deemed to be the Dollar Equivalent (determined as of such date of borrowing) of the amount in the Alternative Currency of such Loan. Each Loan hereunder shall be deemed to be a representation and warranty by the Borrowers on the date of such Loan as to the facts specified in clauses (c), (d) and (e) of this Section 4.2.

4.3 <A NAME="_Toc508084496">Satisfaction of Conditions. The Lender's reasonable and good faith determination with respect to whether a Loan is required to be made pursuant to the provisions</A> <A NAME ="_Toc508084497">hereof and whether any condition herein described has been satisfied shall be binding upon the Borrowers.</A>

SECTION 5 . <A NAME="_Toc508084498">AFFIRMATIVE COVENANTS.</A>

The Borrowers covenant and agree that from and after the Closing Date and so long as any of the Obligations remain outstanding and unpaid, in whole or in part, the Borrowers will observe the following covenants, unless the Lender shall otherwise consent in writing:

5.1<A NAME="_Toc485015923"> </a><A NAME="_Toc508084499">Financial Statements; Reports. The Borrowers will furnish to Lender:</A>

<LI>

Annual Reports: as soon as available, but in any event not later than one hundred twenty (120) days after the close of each fiscal year of Arrow International, the annual audit report of Arrow International on a consolidated basis containing consolidated balance sheets of Arrow International and any Subsidiaries, as at the end of such fiscal year, and related consolidated statements of income, shareholders' equity and cash flows of Arrow International and any Subsidiaries, for such fiscal year, setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, all in reasonable detail, prepared in accordance with GAAP applied on a consistent basis and certified without exception or qualification by independent public accountants selected by Arrow International and satisfactory to the Lender, together with a copy of the management letter prepared by such accountants in connection with such audit;</LI>

<LI>

Quarterly Reports: as soon as available, but in any event not later than forty-five (45) days after the close of each quarter of each fiscal year of Arrow International, consolidated balance sheets of Arrow International and any Subsidiaries, as at the end of such quarterly period, and related consolidated statements of income, shareholders' equity and cash flows, together with operating statements and schedules of Arrow International and any Subsidiaries for such quarterly period and for the period from the end of the preceding fiscal year to the end of such quarterly period, setting forth in each case in comparative form the corresponding figures for the corresponding period of the preceding fiscal year, all in reasonable detail and prepared by Arrow International's Chief Financial Officer in accordance with GAAP applied on a consistent basis (subject to normal year-end adjustments);</LI>

<LI>

Accountant's Certificate: concurrently with the delivery of the financial statements referred to in Section 5.1(a) above, a certificate of the independent public accountants who certified such statements, stating that, in making the examinations necessary for the audits of such financial statements, they obtained no knowledge of any Default or Event of Default, or, if they shall have obtained knowledge thereof, specifying the same;</LI>

<LI>

Compliance Certificates: concurrently with the delivery of the financial statements referred to in Sections 5.1(a) and (b), a Compliance Certificate executed by Arrow International's Chief Financial Officer;</LI>

<LI>

Securities Filings: promptly upon sending, making available, or filing the same, such reports and financial statements as the

Borrower or any Subsidiary shall send or make available to the shareholders of the Borrower or file with the Securities and Exchange Commission or any state securities agencies; and</LI>

<LI>

Other Information: from time to time, such additional financial and other information as Lender may reasonably request.</LI></OL>

5.2 <A NAME="_Toc508084500">Liabilities. The Borrowers and any Subsidiaries will pay and discharge, at or before their maturity, all their respective obligations and liabilities (including, without limitation, tax liabilities and all employee wages as provided in the Fair Labor Standards Act, 29 U.S.C. 206-207 and any successor statute), except those which may be contested in good faith, and maintain adequate reserves for any of the same in accordance with GAAP. Upon the Borrowers' failure to pay such wages, or cause such wages to be paid or to contest the same in good faith, the Lender shall have the right, but not the duty, at any time and from time to time, to pay all or part of such wages directly or indirectly on behalf of and for the account of the Borrowers. Any such payment by the Lender shall be deemed an advance under the Loans. The Borrowers' obligations with respect to such advance shall be evidenced by the Notes.</A>

5.3 <A NAME="_Toc508084501">Environmental Matters; Compliance with Laws.</A>

<LI>

The Borrowers, and each of their Subsidiaries, shall comply with the following provisions if any failure to comply could reasonably be expected to result in a Material Adverse Effect:</LI>

<LI>

immediately notify the Lender (and any other person that any Borrower or any Subsidiary is required to notify pursuant to any applicable laws) once they are aware of a Release or threatened Release of Hazardous Substances on, from, or near any of the properties owned or used by any Borrower which might cause Contamination;</LI>

<LI>

immediately notify the Lender once an environmental investigation or clean-up proceeding is instituted by any Person in connection with such properties;</LI>

<LI>

fully comply with and assist any such environmental investigation and clean-up proceeding;</LI>

<LI>

promptly execute and complete any Remedial Actions necessary to ensure that such properties are in compliance with all applicable laws and free from Contamination, and to ensure that no environmental liens or encumbrances are levied against or exist with respect to such properties, and provide the Lender with a certification from each agency having jurisdiction that such Remedial Actions have been completed to all such agencies' satisfaction;</LI>

<LI>

immediately notify the Lender of any citation, notification, complaint, or violation which any Borrower or any Subsidiary receives from any Person which relates to or pertains to the making, storing, handling, treating, disposing, generating, transporting or Release of any Hazardous Substances;</LI>

<LI>

promptly upon the written request of the Lender (such request to be made only upon Lender's good faith belief that a potential for Contamination exists), provide the Lender, from time to time, with an environmental site assessment or report, in form and substance satisfactory to the Lender, or at the Lender's option, permit the Lender, its agents, contractors and other representatives, to enter into any property owned or used by the Borrowers in order to make such report or assessment, and at such other times and as often as the Lender may reasonably request, the Borrowers will make available at their offices to the Lender or its representatives such historical and operational information (including the results of all samples sent for analysis), correspondence with official bodies, and environmental reviews conducted prior to and after the Closing Date regarding their properties as are within the possession, custody or control of the Borrowers or any Subsidiary or which are reasonably available to it, and will make appropriate personnel employed by the Borrowers having knowledge of such matters available for meetings with the Lender or its representatives; and</LI>

<LI>

comply, and cause all properties, assets, and operations owned or used by the Borrowers and their Subsidiaries to comply, with all applicable federal, state, local and other environmental, zoning, occupational safety, health, employment, discrimination, labor and other laws and regulations.</LI></OL>

<LI>

If any Borrower shall fail to fully execute and complete any requisite Remedial Action, the Lender may, but is not obligated to, make advances or payments toward performance or satisfaction of such Remedial Actions.</LI>

<LI>

If the Lender acquires equitable or legal title to any of the Premises, the Lender does not accept and shall not bear (nor shall any assignee or transferee of the Lender accept or bear) any responsibility for any Hazardous Substances in or about the Premises or for the actual or threatened Release thereof from the Premises. No provisions of the Loan Documents shall be interpreted to absolve or release any Borrower or any Subsidiary from any liability or responsibility which they may have to any Person, under any local, state or federal statute or regulation, for Remedial Actions with respect to any such Hazardous Substances or for the actual or threatened Release of any such Hazardous Substances.</LI>

<LI>

If any action or claim is brought by the Environmental Protection Agency or any other regulatory agency (whether federal, state, local or foreign) against any Borrower, any Subsidiary or the Premises arising from the presence in, or about the Premises, of Hazardous Substances or from the actual or threatened Release of such Hazardous Substances, the Borrowers shall immediately provide the Lender, as the Lender deems necessary, with a bond, in form and substance satisfactory to the Lender, against any and all damages or liabilities that may arise from any such action or claim.</LI>

<LI>

The Borrowers shall defend, indemnify the Lender and hold the Lender harmless from and against all loss, liability, damage, cost, and expense, including without limitation, reasonable attorneys' fees, fines, or other civil and criminal penalties or payments, for failure of the Premises or any other operations, assets or property owned or used by any Borrower or any Subsidiary to comply in all respects with all environmental and other laws, caused, in whole or in part, regardless of fault, by any Borrower, by any Subsidiary, or by any past, present or future owner, occupier, tenant, subtenant, licensee, guest or other person. The provisions of this Section 5.3(e) shall survive payoff, release, foreclosure, or other disposition of this Agreement. The Borrowers shall remain liable hereunder regardless of any other provisions hereof.</LI>

<LI>

All sums advanced or paid by the Lender under this Section 5.3, including sums so advanced or paid in connection with any judicial or administrative investigation or proceeding relating thereto, and including, without limitation, reasonable attorneys' fees, fines, or other penalties or payments, and all of the Borrowers' obligations to defend, indemnify and hold harmless the Lender, shall be deemed to be advances under the Loans and shall be at once repayable. The Borrowers' obligations with respect thereto shall be evidenced by, and shall bear interest at the highest rate provided in, the Notes.</LI></OL>

5.4 <A NAME="_Toc508084502">Corporate Existence; Properties. The Borrowers will notify the Lender at least thirty (30) days before any change of name of any Borrower and will maintain:</A>

<LI>

their corporate existence and their qualification to do business and good standing in each jurisdiction in which qualification is necessary for the proper conduct of their businesses;</LI>

<LI>

all licenses, permits and other authorizations reasonably necessary for the ownership and operation of their properties and businesses; and</LI>

<LI>

their assets and properties in good repair, working order and condition and to make all reasonably necessary or appropriate repairs, renewals, replacements and substitutions, so that the value and efficiency of all such assets and properties shall at all times be properly preserved and maintained.</LI></OL>

5.5 <A NAME="_Toc508084503">Books and Records. The Borrowers will maintain, and will cause each Subsidiary to maintain, accurate and complete records and books of account with respect to all their operations in accordance with GAAP, and will permit, and will cause each Subsidiary to permit, officers or representatives of the Lender to examine and make excerpts from such books</A> <A NAME="_Toc484988722"></a><A NAME="_Toc484988811"></a><A NAME="_Toc485015745">and records and to visit and inspect their properties, both real and personal, at all reasonable times.</A> Such inspections shall be at the Lender's cost and expense to the extent such inspections are conducted prior to the occurrence of an Event of Default hereunder.

5.6 <A NAME="_Toc508084504">Insurance. The Borrowers shall carry at all times, in coverage, form and amount satisfactory to the Lender, hazard insurance, commercial general liability insurance, worker's compensation insurance, comprehensive and automobile liability insurance, environmental impairment insurance, product liability insurance and such other insurance as is usual and customary for entities engaged in businesses similar to those engaged in by the Borrowers, and pay all premiums on all policies for such insurance when and as they become due and do all of the things necessary to maintain such policies in full force and effect. The Borrowers shall from time to time upon request by the Lender promptly furnish or cause to be furnished to the Lender evidence, in form and substance satisfactory to the Lender, of the maintenance of all insurance required to be maintained by this Section 5.6 including, but not limited to, such originals or copies, as the Lender may request, of policies, certificates of insurance, riders and endorsements relating to such insurance and proof of premium payments.</A>

5.7 <A NAME="_Toc508084505">Debt to Tangible Net Worth. The Arrow Group, on a consolidated basis, will maintain a ratio of Debt to Tangible Net Worth of not less than 1.5 to 1.0 at the close of each fiscal quarter.</A>

5.8 <A NAME="_Toc508084506">Cash Flow Coverage Ratio. The Arrow Group, on a consolidated basis, will maintain a Cash Flow Coverage Ratio of not less than 1.25 to 1 for and with respect to each fiscal quarter of the Arrow Group.</A>

5.9 <A NAME="_Toc508084507">Representations and Warranties. The Borrowers will take all actions, and will not omit to take or refrain from taking any action, that would cause any representation or warranty set forth in Section 3 of this Agreement to be untrue or inaccurate in any material respect.</A>

SECTION 6.<A NAME="_Toc485015932"> </a><A NAME="_Toc508084508">NEGATIVE COVENANTS.</A>

The Borrowers covenant and agree that from and after the Closing Date and so long as any of the Obligations remain outstanding and unpaid, in whole or in part, the Borrowers will observe the following covenants unless the Lender shall otherwise consent in writing:

6.1 <A NAME="_Toc508084509">Liens. The Borrowers will not, nor will they permit any Subsidiary to, create, assume, or suffer to exist, any Lien of any kind upon the Premises or any of their other assets, whether now owned or hereafter acquired, except:</A>

<LI>

purchase money Liens as listed on Schedule 6.1(a) and as may be granted with respect to equipment hereafter acquired, provided that such liens and security interests attach only to the equipment so acquired and do not encumber any other property of the Borrower or any Subsidiary;</LI>

<LI>

Liens for taxes not yet payable or being contested in good faith by appropriate proceedings and for which adequate reserves have been provided on the books of a Borrower or a Subsidiary;</LI>

<LI>

mechanics',

materialmen's, warehousemen's, carriers' or other like Liens arising in the ordinary course of business of a Borrower or any Subsidiary, if any, arising with respect to obligations which are not overdue for a period longer than thirty (30) days or which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided on the books of a Borrower or a Subsidiary;</LI>

<LI>

deposits or pledges to secure the performance of bids, tenders, contracts, leases, public or statutory obligations, surety or appeal bonds or other deposits or pledges for purposes of a like general nature or given in the ordinary course of business by a Borrower or any Subsidiary;</LI>

<LI>

other encumbrances consisting of zoning restrictions, easements, restrictions on the use of real property or minor irregularities in the title thereto, which do not arise in connection with the borrowing of, or any obligation for the payment of, money and which, in the aggregate, do not materially detract from the value of the Premises or the business, properties or assets of any Borrower or any Subsidiary;</LI>

<LI>

other Liens that, together with all other Liens permitted under this Section 6.1, secure Debt in an aggregate amount not to exceed Twenty-Five Million Dollars ($25,000,000); and</LI>

<LI>

involuntary Liens in an immaterial amount that could not reasonably be expected to have a Material Adverse Effect.</LI></OL>

6.2 <A NAME="_Toc508084510">Debt. The Borrowers will not, nor will they permit any Subsidiary to, create, incur, assume or suffer or permit to exist any Debt, including indebtedness for borrowed money or any indebtedness constituting the deferred portion of the purchase price of any property, except:</A>

<LI>

any Obligations, whether evidenced by the Note or any other instruments;</LI>

<LI>

Debt to suppliers and other trade creditors incurred in the ordinary course of business by the Borrowers and their Subsidiaries; </LI>

<LI>

other Debt not to exceed Fifty Million Dollars ($50,000,000) in the aggregate; and</LI>

<LI>

any other Debt expressly consented to by the Lender in writing.</LI></OL>

6.3 <A NAME="_Toc508084511">Mergers, Consolidations. The Borrowers will not enter into any transaction of merger or consolidation, except that </A>any Borrower may enter into a merger or consolidation (a) with any other Borrower or (b) with any other member of the Arrow Group as long as such Borrower is the surviving entity in such transaction; provided that after giving effect thereto, the Borrowers and their Subsidiaries shall be in compliance with all the terms of this Agreement and no Default or Event of Default hereunder shall have occurred and be continuing.

6.4<A NAME="_Toc485015936"> </a><A NAME="_Toc508084512">Disposition of Assets. The Borrowers will not liquidate or dissolve (or suffer any liquidation or dissolution), or convey, sell, lease, pledge, or otherwise transfer or dispose of all or any substantial part of their properties, assets or business except that (a) the Borrowers may sell used equipment no longer used or useful in connection with their respective businesses, (b) the Borrowers may sell any asset in the ordinary course of business, and (c) the Borrowers may transfer or dispose of up to ten percent (10%) of their assets in the aggregate.</A>

6.5<A NAME="_Toc485015937"> </a><A NAME="_Toc508084513">Use of Proceeds. The Borrowers will not, nor will they permit any Subsidiary to, directly or indirectly, apply any part of the proceeds of the Loans to the purchasing or carrying of any "margin stock" within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, or any regulations, interpretations or rulings thereunder.</A>

6.6<A NAME="_Toc485015938"> </a><A NAME="_Toc508084514">Lines of Business. The Borrowers will not, nor will they permit any Subsidiary to, change the principal lines of business in which they are currently engaged.</A>

SECTION 7<A NAME="_Toc485015939"> </a><A NAME="_Toc508084515">EVENTS OF DEFAULT, REMEDIES.</A>

7.1<A NAME="_Toc485015940"> </a><A NAME="_Toc508084516">Events of Default. The following shall constitute Events of Default:</A>

<LI>

Non-Payment. (i) Failure by the Borrowers to pay the principal of or accrued interest on the Notes or any other instrument evidencing any Obligation within ten (10) days of when due, or (ii) the failure of the Borrowers or any Subsidiary to pay any other amount payable to the Lender, whether under this Agreement or otherwise, within ten (10) days after such amount becomes due.</LI>

<LI>

Falsity of Representations and Warranties. Any representation or warranty made by any Borrower in this Agreement or in any other Loan Document or in any certificate, financial or other statement furnished at any time under or in connection with this Agreement or any other Loan Document shall be false or misleading in any material respect as of the date when made.</LI>

<LI>

Failure to Perform Certain Covenants. Failure by the Borrowers to observe or perform any other covenants, conditions or provisions contained in this Agreement or in any other Loan Document, provided that, except with respect to a violation of the covenants contained in Sections 5.7, 5.8 and Section 6 (for which there shall be no grace or cure period available to the Borrowers), such failure shall continue for a period of thirty (30) days after the earlier of (i) written notice thereof from the Lender to the Borrowers, or (ii) the date on which an officer of any Borrower knew of such failure.</LI>

<LI>

Default Under Other Obligations. The Borrowers or any Subsidiary:</LI>

<LI>

default in any payment of principal of or interest on any obligations for borrowed money (other than under the Notes) or for the deferred purchase price of property beyond any period of grace provided with respect thereto if the outstanding balance of such obligations exceeds One Hundred Thousand Dollars ($100,000); or</LI>

<LI>

default in the performance of any other agreement, term or condition contained in any such obligation or in any agreement relating thereto, if the effect of such default is to cause, or to permit the holder or holders of such obligation (or a trustee on behalf of such holder or holders) to then cause, such obligation to become due prior to its stated maturity and the outstanding balance of such obligation exceeds One Hundred Thousand Dollars ($100,000).</LI></OL>

<LI>

Voluntary Bankruptcy, Etc. The commencement by any Borrower or any Subsidiary of a voluntary case under the Bankruptcy Code, as now constituted or hereafter amended, or any other applicable federal, state or foreign bankruptcy, insolvency, reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of any Borrower or any Subsidiary or for any substantial part of its property, or the making by it of any assignment for the benefit of creditors, or the failure of any Borrower or any Subsidiary generally to pay its debts as such debts become due, or the taking of corporate action by any Borrower or any Subsidiary in furtherance of any of the foregoing.</LI>

<LI>

Involuntary Bankruptcy, Etc. The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of any Borrower or any Subsidiary in an involuntary case under the Bankruptcy Code, as now or hereafter constituted, or any other applicable federal, state or foreign bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of any Borrower or any Subsidiary or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs and the continuance of any such decree or order unstayed and in effect for a period of sixty (60) days.</LI>

<LI>

Unenforceability. (i) Any material provision of any of the Loan Documents shall at any time for any reason cease to be a valid and binding obligation of any Borrower, or shall be declared to be null and void or (ii) the validity or enforceability thereof shall be contested by any Borrower or any Governmental Authority in the United States of America, or any Borrower shall deny that it has any further liability or obligation under any Loan Document to which it is a party.</LI>

<LI>

Judgments. One or more judgments are entered against any Borrower in the aggregate amount of One Million Dollars ($1,000,000) or more, and the Borrower shall not obtain the satisfaction, release, stay or dismissal thereof within thirty (30) days thereof (unless such judgment is wholly covered by insurance and does not subject any of the Borrowers' assets or properties to attachment or levy).</LI></OL>

7.2<A NAME="_Toc485015941"> </a><A NAME="_Toc508084517">Acceleration.</A>

<LI>

Upon the occurrence of an Event of Default specified in Sections 7.1(a) through 7.1(d), and 7.1(g) through 7.1(i), the Lender

may, by written notice to the Borrowers, terminate immediately and irrevocably this Agreement and any other obligation of the Lender to make any advances to or for the account of the Borrowers, and declare the Notes and all other instruments evidencing the Obligations to be due and payable, whereupon the principal amount of the Notes and all outstanding Obligations, together with accrued interest thereon and all other amounts payable thereunder, shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding.</LI>

<LI>

Upon the occurrence of an Event of Default specified in Sections 7.1(e) or 7.1(f), this Agreement and any other obligation of the Lender to make any advances to or for the account of the Borrowers, shall automatically and immediately terminate and the unpaid principal balances of, all accrued, unpaid interest on, and all other sums payable with regard to, the Notes and all instruments evidencing the Obligations shall automatically and immediately become due and payable, in all cases without any action on the part of the Lender.</LI></OL>

7.3 <A NAME="_Toc508084518">Right of Setoff. Upon the occurrence of a Default or an Event of Default, the Lender shall have the right, in addition to all other rights and remedies available to it, to set off against the unpaid balance of the Obligations, any debt owing to any Borrower by the Lender and any funds in any deposit account maintained by any Borrower with the Lender.</A> The Lender shall provide notice to Arrow International of any such set-off promptly upon exercising such right.

7.4 <A NAME="_Toc508084519">Remedies Cumulative. The Lender may exercise any of its rights and remedies set forth in this Loan Agreement and the other Loan Documents. The remedies of the Lender shall be cumulative and concurrent, and may be pursued singly, successively, or together, at its sole discretion, and may be exercised as often as the occasion therefore shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof.</A>

SECTION 8.<A NAME="_Toc485015944"> </a><A NAME="_Toc508084520">MISCELLANEOUS.</A>

8.1 <A NAME="_Toc508084521">No Waiver; Cumulative Remedies. No failure or delay on the part of the Lender in exercising any right, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder or thereunder preclude or require any other or further exercise thereof or the exercise of any other right, power or privilege. The Lender shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Lender, and then only to the extent specifically set forth in writing. A waiver with respect to one event shall not be construed as continuing or as a bar to or a waiver of any right or remedy with respect to a subsequent event. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law.</A>

8.2<A NAME="_Toc485015946"> </a><A NAME="_Toc508084522">Notices. All notices and other communications shall have been duly given and shall be effective (i) when delivered, (ii) when transmitted via telecopy (or other facsimile</A> <A NAME="_Toc485015947">device) to the numbers set forth below, (iii) the Business Day following the day on which the same has been delivered prepaid to a reputable national overnight air courier service, or (iv) the third Business Day following the day on which the same is sent by certified or registered mail, post prepaid, in each case to the respective parties at the address or telecopy number set forth below, or at such other address or telecopy number as such party may hereafter specify by written notice to the other party hereof:</A>

[Name of Borrower, c/o Arrow International, Inc.]

or</TD>

</TR>

Arrow International, Inc.

X.X. Xxx 00000xXXx

0000 Xxxxxxxxx XxxxxXXx

Xxxxxxx, XX 19605</TD>

</TR>

</TR>

</TR>

with a copy to:</TD>

Xxxxxxx Xxxxxx

0000 Xxxxxxxx XxxxxxXXx

P.O. Box 6286

Wyomissing, PA 19610

Attention:	Xxxxxxx X. Xxxxxxxx</TD>

</TR>

</TR>

Lender:</TD>

First Union National Bank

CoreStates Commons

000 Xxxx XxxxxxxXXx

Xxxxxxx, XX 19601

Attention:	Xxxx X. Xxxxxxx,

Vice President</TD>

</TR>

</TR>

First Union National Bank, London Branch

0 XxxxxxxxxxxxXXx

Xxxxxx, XX0XXXXxXXx

Attention:	Ian X. Xxxxxxxx,

Vice President</TD>

</TR>

</TR>

with a copy to:</TD>

Xxxxxxx & Xxx

One Glenhardie Corporate Center

0000 Xxxxxxxx Xxxx, P.O. Box 236

Wayne, PA 19087-0236

Attention:	Xxxxxx X. Xxxx</TD>

</TR>

</TR>

</TABLE>

8.3<A NAME="_Toc485015948"> </a><A NAME="_Toc508084523">Reimbursement of Lender. The Borrowers hereby agree to reimburse the Lender for its out-of-pocket expenses, including reasonable counsel fees, incurred by the Lender in connection with the development, preparation, execution and enforcement of this Agreement and all the Loan Documents, including all counsel fees in connection with any bankruptcy or insolvency proceeding involving the Borrower, this Agreement or any of the other Loan Documents. Such expenses and counsel fees shall be paid simultaneously with the execution of this Agreement and all such expenses hereafter incurred shall be paid within ten (10) days after notice by the Lender.< /A>

8.4<A NAME="_Toc485015949"> </a><A NAME="_Toc508084524">Payment of Expenses and Taxes. In addition to payment of the expenses and counsel fees provided for in Section 8.3, the Borrowers agree to pay, and to save the Lender harmless from any delay in paying, stamp and other similar taxes, if any, including, without limitation, all levies, impositions, duties, charges or withholdings, together with any penalties, fines or interest thereon or other additions thereto, which may be payable or determined to be payable in connection with the execution and delivery of this Agreement and the Loan</A> <A NAME="_Toc484988744"></a><A NAME="_Toc484988833"></a><A NAME="_Toc485015767"> Documents or any modification of any thereof or any waiver or consent under or in respect of any thereof.</A>

<A NAME="_Toc485015950">8.5</a> <A NAME="_Toc508084525">Survival of Representations and Warranties. All representations, warranties, covenants and agreements made in this Agreement and all other Loan Documents shall survive the execution and delivery of the Loan Documents and the making of the Loans hereunder. All such representations and warranties shall be deemed to be made again at the date of each request for a borrowing under the Line of Credit and at the date of each request for a Loan. The provisions of Sections 5.3, 8.3, 8.4, 8.7, 8.11, 8.12, 8.13, 8.14 and 8.15 hereof shall survive payment of the Obligations.</A>

8.6<A NAME="_Toc485015951"> </a><A NAME="_Toc508084526">Participations. The Lender reserves the absolute right to assign all or any of its interest in any or all of the Loans and the Loan Documents or to participate with other lenders in the Loans and Loan Documents on such terms and at such times as the Lender may determine from time to time, all without any consent thereto or notice thereof by or to the Borrowers. The Borrowers hereby grant to each such assignee and participant the right, consistent with the rights of the Lender hereunder, to set off deposit accounts maintained by the Borrowers or any of their Subsidiaries with such assignee or participant or any other obligations</A> <A NAME="_Toc508084527">such assignee or participant may owe to Borrowers or any of their Subsidiaries, to the extent of all Obligations. The Lender may disclose all financial, business and other information about the Borrowers or any of their Subsidiaries which the Lender may possess at any time to all prospective and actual assignees and participants.</A>

8.7<A NAME="_Toc485015952"> </a><A NAME="_Toc508084528">Successors. This Agreement shall be binding upon and inure to the benefit of the Borrowers and the Lender and their respective successors and assigns, except that the Borrowers may not assign or transfer their rights hereunder without the prior written consent of the Lender.</A>

8.8<A NAME="_Toc485015953"> </a><A NAME="_Toc508084529">Construction. This Agreement, all Loan Documents, and the rights and obligations of the parties hereunder and thereunder, shall be governed by and construed and interpreted in accordance with, the domestic internal laws of the Commonwealth of Pennsylvania without regard to its rules pertaining to conflict of laws. The Section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.</A>

8.9<A NAME="_Toc485015954"> </a><A NAME="_Toc508084530">Severability. Any provision contained in this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.</A>

8.10<A NAME="_Toc485015955"> </a><A NAME="_Toc508084531">Indemnity. The Borrowers hereby agree, whether or not any of the transactions contemplated in the Loan Documents shall be consummated, to pay, assume liability</A> <A NAME="_Toc485015956">for, and indemnify, protect, defend, save and keep harmless the Lender from and against, any and all liabilities, obligations, losses, damages, settlements, claims, actions, suits, penalties, costs and expenses (including, but not limited to, legal and investigative fees and expenses) of whatsoever kind and nature, including, but not limited to, claims based upon negligence, strict or absolute liability, liability in tort, latent and other defects (whether or not discoverable), and any claim for patent, trademark or copyright infringement which may from time to time be imposed</A> <A NAME="_Toc484988751"></a><A NAME="_Toc484988840"></a><A NAME="_Toc485015774">on, incurred by or asserted against the Lender (whether or not any such claim is also indemnified or insured against by any other person) in any way relating to or resulting from this Agreement, any Loan Document, or any of the transactions contemplated herein or therein. The provisions of this subsection shall survive the payoff, release, foreclosure or other disposition, as applicable, of this Agreement and the Obligations.</A>

8.11<A NAME="_Toc485015957"> </a><A NAME="_Toc508084532">Waiver of Trial by Jury. Each party to this Agreement agrees that any suit, action, or proceeding, whether claim or counterclaim, brought or instituted by either party hereto or any successor or assign of any party on or with respect to this Agreement or any other Loan Document or which in any way relates, directly or indirectly, to the Loans or any event, transaction, or occurrence arising out of or in any way connection with the Loans, or the dealings of the parties with respect thereto, shall be tried only by a court and not by a jury. To the extent permitted by Applicable Law in the jurisdiction in which a suit, action or proceeding is instituted, EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION, OR PROCEEDING. THE BORROWERS ACKNOWLEDGE AND AGREE THAT THIS SECTION 8.11 IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT BETWEEN THE PARTIES AND THAT THE</A> <A NAME="_Toc508084533">LENDER WOULD NOT EXTEND THE LOANS TO THE BORROWERS IF THIS WAIVER OF JURY TRIAL SECTION WERE NOT A PART OF THIS AGREEMENT.</A>

8.12<A NAME="_Toc485015958"> </a><A NAME="_Toc508084534">Actions Against Lender; Release.</A>

<DIR>

<LI>

Any action brought by any Borrower or any Subsidiary against the Lender which is based, directly or indirectly, or on this Agreement or any other Loan Document or any matter in or related to this Agreement or any other Loan Document, including but not limited to the making of the Loans or the administration or collection thereof, shall be brought only in the courts of the Commonwealth of Pennsylvania. The Borrowers may not file a counterclaim against the Lender in a suit brought by the Lender against the Borrowers in a state or jurisdiction other than the Commonwealth of Pennsylvania unless under the rules of procedure of the court in which the Lender brought the action the counterclaim is mandatory and will be considered waived unless filed as a counterclaim in the action instituted by the Lender.</LI>

<LI>

Upon full payment and satisfaction of the Loans and the interest thereon, as provided in Section 2 hereof, the parties shall thereupon automatically each be fully, finally, and forever released and discharged from any further claim, liability or obligation in connection with the Loans except as expressly set forth herein, except to the extent any payment received by the Lender is determined to be a preference or similar voidable transfer.</LI></OL>

</DIR>

</OL>

<A NAME="_Toc465563831">8.13</a><A NAME="_Toc485015959"> </a><A NAME="_Toc508084535">Governing Law; Submission to Jurisdiction. This Agreement and each Note shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. Each of the parties hereto hereby submits to the nonexclusive jurisdiction of the United States District Court for the Eastern District of Pennsylvania and of any Pennsylvania</A> <A NAME="_Toc485015960">State court sitting in Berks County or Philadelphia County, Pennsylvania for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. Each of the parties hereto irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. Each of the Borrowers (other than Arrow International, Inc.)</A> <A NAME="_Toc484988755"></a><A NAME="_Toc484988844"></a><A NAME="_Toc485015778">hereby irrevocably appoints Arrow International, Inc. its authorized agent to accept and acknowledge service of any and all processes which may be served in any suit, action or proceeding of the nature referred to in this Section 8.13 and consents to process being served in any such suit, action or proceeding upon Arrow International, Inc. in any manner provided by the rules of court in which such suit, action or proceeding is instituted or by the mailing of a copy thereof by registered or certified mail, postage prepaid, return receipt requested, to such Borrower's address referred to in Section 8.2. Each Borrower agrees that such service (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding, and (ii) shall, to the fullest extent permitted by law, be taken and held to be valid personal service upon and personal delivery to it. Nothing in this Section 8.13 shall affect the right of the Lender to serve process in any manner permitted by law or limit the right of the Lender to bring proceedings against any Borrower in the courts of any jurisdiction or jurisdictions.</A>

8.14<A NAME="_Toc485015961"> </a><A NAME="_Toc508084536">Judgment Currency.</A>

<DIR>

<LI>

The Borrowers' obligations hereunder to make payments in a specified Currency (the "Obligation Currency") shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than the Obligation Currency, except to the extent that such tender or recovery results in the effective receipt by the Bank of the full amount of the Obligation Currency expressed to be payable to it under this Agreement. If for the purpose of obtaining or enforcing judgment against any Borrower in any court or in any jurisdiction, it becomes necessary to convert into or from any currency other than the Obligation Currency (such other currency being hereinafter referred to as the "Judgment Currency") an amount due in the Obligation Currency, the conversion shall be made using the rate of exchange at which, in accordance with customary banking procedures, the Lender could purchase the Obligation Currency with the Judgment Currency at 9:00 A.M. (local time in Philadelphia, Pennsylvania) as of the day immediately preceding the Business Day on which the judgment is given (such Business Day being hereinafter referred to as the "Judgment Currency Conversion Date").</LI>

<LI>

If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of actual payment of the amount due, the applicable Borrower covenants and agrees to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser amount), as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of Dollars which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at the rate or exchange prevailing on the Judgment Currency Conversion Date.</LI>

<LI>

For purposes of determining the rate of exchange under this Section 8.14, such amounts shall include any premium and costs payable in connection with the purchase of Dollars.</LI></OL>

</DIR>

</OL>

8.15<A NAME="_Toc485015962"> </a><A NAME="_Toc508084537">Arbitration.

</A>

<DIR>

<LI>

Upon demand of the Borrowers or the Lender, whether made before or after institution of any judicial proceeding, any dispute, claim or controversy arising out of, connected with or relating to this Agreement ("Disputes") shall be resolved by binding arbitration as provided herein. Institution of a judicial proceeding does not waive the right of the party instituting the proceeding to demand arbitration hereunder. Disputes may include, without limitation, tort claims, counterclaims, disputes as to whether a matter is subject to arbitration, claims brought as class actions, claims arising from documents executed in the future, or claims arising out of or in connection with this Agreement.</LI>

<LI>

Arbitration shall be conducted under and governed by the Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration Association (the "AAA") and Title 9 of the U.S. Code. All arbitration hearings shall be conducted in the City of Philadelphia. The expedited procedures set forth in Rule 51

et seq. of the Arbitration Rules shall be applicable to claims of less than $1,000,000. All applicable statutes of limitation shall apply to any Dispute. A judgment upon the award may be entered in any court having jurisdiction. The panel from which all arbitrators are selected shall be comprised of licensed attorneys. The single arbitrator selected for expedited procedure shall be a retired judge from the highest court of general jurisdiction, state or federal, of the state where the hearing will be conducted or if such person is not available to serve, the single arbitrator may be a licensed attorney. Notwithstanding the foregoing, this arbitration provision does not apply to disputes under or related to swap agreements.</LI> ;

<LI>

Notwithstanding the preceding binding arbitration provisions, the Borrowers and the Lender agree to preserve, without diminution, certain remedies that the Borrowers and the Lender shall employ or exercise freely, independently or in connection with an arbitration proceeding or after an arbitration action is brought. The Lender and the Borrowers shall have the right to proceed in any court of proper jurisdiction or by self-help to exercise or prosecute the following remedies, as applicable: (i) all rights to foreclose against any real or personal property or other security by exercising a power of sale granted under the Notes or any other documents or under applicable law or by judicial foreclosure and sale, including a proceeding to confirm the sale; (ii) all rights of self-help including peaceful occupation of real property and collection of rents, set-off, and peaceful possession of personal property; (iii) obtaining provisional or ancillary remedies including injunctive relief, sequestration, garnishment, attachment, appointment of receiver and filing an involuntary bankruptcy proceeding; and (iv)  when applicable, a judgment by confession of judgment. Preservation of these remedies does not limit the power of an arbitrator to grant similar remedies that may be requested by a party in a Dispute.</LI>

<LI>

Each party agrees that it shall not have a remedy of punitive or exemplary damages against any other party in any Dispute and hereby waives any right or claim to punitive or exemplary damages it has now or which may arise in the future in connection with any Dispute whether the Dispute is resolved by arbitration or judicially.</LI>

<LI>

The Borrowers acknowledge that by agreeing to binding arbitration they have irrevocably waived any right they may have to jury trial with regard to a Dispute.</LI></OL>

</DIR>

</OL>

8.16 <A NAME="_Toc508084538">Performance by Lender. If the Borrowers shall fail to observe or perform any of the terms, agreements or covenants contained in this Agreement, or in any other Loan Document, the Lender may, in its discretion, but without any obligation or duty to do so, and without waiving any Default, or Event of Default, perform any of such terms, agreements or covenants, in part or in whole, and any money advanced or expended by the Lender in or toward< /A> <A NAME="_Toc484988759"></a><A NAME="_Toc484988848"></a><A NAME="_Toc485015782">the fulfillment of such terms, agreements or covenants, shall be due on demand and become a part of and be added to the indebtedness due under the Notes and secured as herein provided with interest thereon at the rate specified in such Notes from the date of the respective advance or expenditure. Lender's rights contained in this Section 8.16 shall be in addition to all of the Lender's rights under Section 5.3(d) and otherwise, and the Lender may, at its sole election, exercise any one or more, or all, of such rights alternatively or concurrently.</A>

8.17 <A NAME="_Toc508084539">Counterparts. This Agreement may be executed in any number of counterparts with then same effect as if the signatures thereto and hereto were upon the same instrument, but all of such counterparts taken together shall be deemed to constitute one and the same instrument.</A>

8.18 <A NAME="_Toc508084540">Further Actions. The Borrowers shall execute and deliver such documents and instruments, and take such other actions, as the Lender deems necessary to consummate the transactions described in this Agreement.</A>

8.19 <A NAME="_Toc508084541">Entire Agreement. This Agreement and the Loan Documents represent the entire agreement between the Lender and the Borrowers with respect to the financing transactions to which they relate, and cannot be changed or amended except by an agreement in writing signed by the party against whom enforcement of the change or amendment is sought.</A>

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

ARROW INTERNATIONAL, INC.</TD>

</TR>

By  /s/ Xxxxxxxxx X. Hirt                                </TD>

</TR>

<DIR>

Name:  Xxxxxxxxx X. Xxxx</DIR>

</DIR>

</TD>

</TR>

<DIR>

Title:V.P. Finance, CFO and Treasurer</DIR>

</DIR>

</TD>

</TR>

Attest: /s/ Xxxxxx X.

Fleck                        & nbsp;     </TD>

</TR>

<DIR>

Name:  Xxxxxx X. Xxxxx</DIR>

</DIR>

</TD>

</TR>

<DIR>

Title:  President and Chief Operating

Officer</DIR>

</DIR>

</TD>

</TR>

ARROW MEDICAL PRODUCTS, LTD.</TD>

</TR>

By  /s/ Xxxxxxxxx X. Hirt                                     </TD>

</TR>

<DIR>

Name:  Xxxxxxxxx X. Xxxx</DIR>

</DIR>

</TD>

</TR>

<DIR>

Title:  Treasurer</DIR>

</DIR>

</TD>

</TR>

Attest: /s/ Xxxxxx X.

Fleck                        & nbsp;        </TD>

</TR>

<DIR>

Name: Xxxxxx X. Xxxxx</DIR>

</DIR>

</TD>

</TR>

<DIR>

Title:  Vice President</DIR>

</DIR>

</TD>

</TR>

ARROW DEUTSCHLAND GMBH</TD>

</TR>

By  /s/ Xxxxxxxxx X. Hirt                                     </TD>

</TR>

<DIR>

Name:  Xxxxxxxxx X. Xxxx</DIR>

</DIR>

</TD>

</TR>

<DIR>

Title:  Treasurer</DIR>

</DIR>

</TD>

</TR>

Attest:  /s/ Xxxxxx X.

Fleck                        & nbsp;        </TD>

</TR>

<DIR>

Name:  Xxxxxx X. Xxxxx</DIR>

</DIR>

</TD>

</TR>

<DIR>

Title:  Vice President</DIR>

</DIR>

</TD>

</TR>

ARROW IBERIA, S.A.</TD>

</TR>

By  /s/ Xxxxxxxxx X. Hirt                                      </TD>

</TR>

<DIR>

Name:  Xxxxxxxxx X. Xxxx</DIR>

</DIR>

</TD>

</TR>

<DIR>

Title:  Treasurer</DIR>

</DIR>

</TD>

</TR>

Attest:  /s/ Xxxxxx X.

Fleck                        & nbsp;        </TD>

</TR>

</TD>

<DIR>

Name:  Xxxxxx X. Xxxxx</DIR>

</DIR>

</TD>

</TR>

<DIR>

Title:  Vice President </DIR>

</DIR>

</TD>

</TR>

</TABLE>

ARROW INTERNACIONAL DE MEXICO, S.A. DE C.V.</TD>

</TR>

By  /s/ Xxxxxxxxx X. Hirt                                      </TD>

</TR>

<DIR>

Name:  Xxxxxxxxx X. Xxxx

Title:  Treasurer

</DIR>

</TD>

</TR>

Attest:  /s/ Xxxxxx X.

Fleck                        & nbsp;        </TD>

</TR>

</TD>

<DIR>

Name:  Xxxxxx X. Xxxxx</DIR>

</DIR>

</TD>

</TR>

</TD>

<DIR>

Title:  Vice President </DIR>

</DIR>

</TD>

</TR>

ARROW HELLAS COMMERCIAL A. E.

</TD>

</TR>

By  /s/ Xxxxxxxxx X. Hirt                                      </TD>

</TR>

<DIR>

Name:  Xxxxxxxxx X. Xxxx</DIR>

</DIR>

</TD>

</TR>

<DIR>

Title: Treasurer</DIR>

</DIR>

</TD>

</TR>

Attest:  /s/ Xxxxxx X.

Fleck                        & nbsp;        </TD>

</TR>

<DIR>

Name:  Xxxxxx X. Xxxxx

Title:  Vice President

</DIR>

</TD>

</TR>

ARROW HOLLAND MEDICAL PRODUCTS B.V.</TD>

</TR>

By  /s/ Xxxxxxxxx X. Hirt                                      </TD>

</TR>

<DIR>

Name:   Xxxxxxxxx X. Xxxx</DIR>

</DIR>

</TD>

</TR>

<DIR>

Title: Treasurer</DIR>

</DIR>

</TD>

</TR>

Attest:  /s/ Xxxxxx X.

Fleck                        & nbsp;        </TD>

</TR>

<DIR>

Name:  Xxxxxx X. Xxxxx</DIR>

</DIR>

</TD>

</TR>

<DIR>

Title:  Vice President

</DIR>

</TD>

</TR>

ARROW INTERNATIONAL CR, A.S.</TD>

</TR>

By  /s/ Xxxxxxxxx X. Hirt                                      </TD>

</TR>

<DIR>

Name:  Xxxxxxxxx X. Xxxx</DIR>

</DIR>

</TD>

</TR>

<DIR>

Title:  Treasurer</DIR>

</DIR>

</TD>

</TR>

Attest:  /s/ Xxxxxx X.

Fleck                        & nbsp;        </TD>

</TR>

<DIR>

Name:  Xxxxxx X. Xxxxx</DIR>

</DIR>

</TD>

</TR>

<DIR>

Title:  Vice President </DIR>

</DIR>

</TD>

</TR>

("Borrowers")</TD>

</TR>

</TABLE>

</TR>

FIRST UNION NATIONAL BANK</TD>

</TR>

By  /s/ Xxxx X. Massaro

</TD>

</TR>

</TD>

<DIR>

Name: Xxxx X. Xxxxxxx</DIR>

</DIR>

</TD>

</TR>

</TD>

<DIR>

Title: Vice President</DIR>

</DIR>

</TD>

</TR>

FIRST UNION NATIONAL BANK, LONDON BRANCH</TD>

</TR>

By  /s/ Xxx X. Morrison                          </TD>

</TR>

</TD>

<DIR>

Name: Xxx X. Xxxxxxxx</DIR>

</DIR>

</TD>

</TR>

</TD>

<DIR>

Title: Vice President</DIR>

</DIR>

</TD>

</TR>

("Lender")</TD>

</TR>

</TABLE>

EXHIBIT "A"

FORM OF COMPLIANCE CERTIFICATE

In accordance with the provisions of Section 5.1(d) of the Loan Agreement (the "Loan Agreement") dated

April 12, 2001, by and among Arrow International, Inc., Affiliates of Arrow International, Inc. (collectively, the "Borrowers") and First Union National Bank (the "Lender"), the undersigned, being the Chief Financial Officer of Arrow International, Inc. does hereby certify to the Lender as follows:

(i) The representations and warranties made by the Borrowers in Section 3 of the Loan Agreement are true and complete in all material respects on and as of the date hereof as if made on and as of this date;

(ii) The Borrowers have, as of the date hereof, performed all covenants and agreements required to be performed by them under the Loan Agreement and related Loan Documents;

(iii) No Default or Event of Default has occurred, [except and to the extent specifically set forth on Exhibit "A" attached hereto and made a part hereof]; and

(iv) The Borrowers are in compliance with the financial covenants set forth in Sections 5.7 and 5.8 of the Loan Agreement, as provided below:

[Calculation of Financial Covenants to be provided].

Any capitalized terms which are used in this Certificate and which are not defined herein, but which are defined in the Loan Agreement, shall have the meanings given to those terms in the Loan Agreement.

IN WITNESS WHEREOF, I have executed this Certificate the _____ day of ________________.

___________________________________(SEAL)

Name:

Title: Chief Financial Officer

EXHIBIT "B"

FORM OF BORROWING NOTICE

First Union National Bank

CoreStates Commons

000 Xxxx XxxxxxxXXx

Xxxxxxx, XX 19601

Attention: Xx. Xxxx X. Xxxxxxx, Vice President

Ladies and Gentlemen:

The undersigned, Arrow International, Inc. ("Arrow International") and ____________, refer to the Loan Agreement dated

April 12, 2001 (as it may be amended, modified, extended or restated from time to time, the "Loan Agreement"), among Arrow International, Affiliates of Arrow International and Lender. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Loan Agreement. Arrow International and ___________________, on behalf of themselves and each other Borrower, hereby give notice that the Borrowers request a Loan in accordance with the provisions of Section& nbsp;2.1 of the Loan Agreement, and that the following are the proposed terms of the requested Loan:

REQUEST FOR LOAN

(A)  Date of

Borrowing (which is a

Business

Day):                        & nbsp;                                                  & nbsp;                                 (B)

Currency of

Loan:                        & nbsp;                                                  & nbsp;                                       (C)

Proceeds to be Disbursed

to:                        & nbsp;                                                  & nbsp;                      (D)

Principal Amount of

Loan:                        & nbsp;                                                  & nbsp;

(E)

Interest rate

basis:                        & nbsp;                                                  & nbsp;                                         (F)

Interest Period and the last

day thereof if a LIBOR

Loan:                        & nbsp;                                                  & nbsp;                             Upon

acceptance of any Loan made by the Lender in response to this request, the

Borrowers shall be deemed to have represented and warranted that the conditions

to lending specified in Section 4 of the Loan Agreement have all been

satisfied.<OL TYPE="a">

Very truly yours,

ARROW INTERNATIONAL, INC.

By

Name:

Title:

[NAME OF BORROWER TO WHICH LOAN IS TO BE DISBURSED]

By

Name:

Title:

</OL>

EXHIBIT "C"

FORM OF NOTICE OF CONVERSION/CONTINUATION

First Union National Bank

CoreStates Commons

000 Xxxx XxxxxxxXXx

Xxxxxxx, XX 19601

Attention: Xx. Xxxx X. Xxxxxxx, Vice President

Ladies and Gentlemen:

The undersigned, Arrow International, Inc. ("Arrow International")

and _______________, refer to the Loan Agreement dated April 12, 2001 (as

it may be amended, modified, extended or restated from time to time, the

"Loan Agreement"), among Arrow International, Affiliates of Arrow

International and Lender. Capitalized terms used herein and not otherwise

defined shall have the meanings assigned to such terms in the Loan Agreement.

Arrow International and _______________________, on behalf of themselves and

each other Borrower, hereby gives notice that the Borrowers request that the

following Loan be converted/continued in accordance with Section 2.4(c) of

the Loan Agreement, and that the following are the proposed terms of the

conversion/continuation:

(A)  Loan to be Converted/

Continued:                                                  & nbsp;                                                  & nbsp;                               (B)

Last day of LIBOR Period   (if LIBOR

Loan):                        & nbsp;                                                   & nbsp;                                                  & nbsp;           (C)

Currency of

Loan:                        & nbsp;                                                  & nbsp;                                        (D)

Effective date of Conversion/

Continuation:                       & nbsp;                                                   & nbsp;

(E)

LIBOR Period to be

applicable                                                  & nbsp;                                                   & nbsp;        

to Converted/ Continued LIBOR                                                & nbsp;                                                  & nbsp;

Loan:                        & nbsp;                                                   & nbsp;                                                   & nbsp;                                                   & nbsp;                                Upon acceptance of any Conversion/Continuation by the Lender in response to this request, the Borrowers shall be deemed to have represented and warranted that the conditions specified in Section 4 of the Loan Agreement have all been satisfied.<DIR>

<DIR>

Very truly yours,

ARROW INTERNATIONAL, INC.

By

Name:

Title:

[NAME OF BORROWER TO WHICH LOAN WAS ORIGINALLY DISBURSED]

By

Name:

Title:

</DIR>

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