Related Party Transactions and Outside Related Director Information


12/16/2005 Proxy Information

Mr. Holleran was Secretary of Arrow International, Inc. from 1975 until April 2004 and a Vice President of Arrow International, Inc. from 1975 until September 1997.

Mr. Broadbent was Chief Financial Officer, Vice President - Finance and Treasurer of Arrow International, Inc. from 1975 until his retirement in August 1998.

Arrow Precision Products, Inc. ("Precision") was a former subsidiary of the Company which was formally dissolved in May 2002 (all of its assets had previously been liquidated and distributed to shareholders). Prior to the sale of its remaining operating subsidiary, Precision Medical Products, Inc. ("PMP"), in August 1997 to a company owned by certain management employees of Precision, including Mr. Holleran, the former Vice President and Chief Operating Officer of Precision and a director of the Company, Precision was engaged in the business of manufacturing and marketing certain gastroenterological and other non-catheter medical products, including ground needles and injection sites primarily for use by the Company. Prior to Precision's dissolution in fiscal 2002, certain officers, directors and principal shareholders of the Company owned substantially all of Precision's outstanding common stock. Mr. Holleran has served as Chairman of the Board of PMP since October 1999 and served as Chief Executive Officer and President of PMP from July 1996 to October 2000.

In fiscal 2005, the Company made purchases amounting to $123,220 of products from PMP that it had formerly purchased from Precision. The Company solicits competitive quotations from unrelated suppliers for products it purchases from PMP. In the future, the Company may continue to purchase products from PMP, provided that the quotations the Company receives from PMP for such products are competitive with those received from unrelated suppliers in terms of product availability, price, quality and delivery considerations.

The Company reviews all related party transactions involving amounts in excess of $60,000 for potential conflicts of interest on an ongoing basis and all such transactions in which the Company is a party are approved by a majority of the independent directors of the Company or the Audit Committee in accordance with applicable Nasdaq rules.