Exhibit 10.1

Deferred Prosecution Agreement

1. Exactech, Inc. (the “Company”), by its undersigned attorneys, pursuant to
authority granted by its Board of Directors, and the United States Attorney’s
Office for the District of New Jersey (the “Office”), enter into this Deferred
Prosecution Agreement (the “DPA”). Except as specifically provided below, the
DPA shall be in effect for a period of twelve (12) months from the date on which
it is fully executed (the “Effective Date”).

2. The Office has informed the Company that it will file, on or shortly after
the Effective Date of this DPA, a criminal complaint in the United States
District Court for the District of New Jersey charging the Company with
conspiracy to commit violations of the Federal Anti-Kickback Statute, contrary
to Title 42, United States Code, Section 1320a - 7b(b), in violation of Title
18, United States Code, Section 371, from in or about January 2002 through in or
about late 2008 (the “Criminal Complaint”). This Office acknowledges that
neither this DPA nor the Criminal Complaint alleges the Company’s conduct
adversely affected patient health or patient care.

3. The Company and the Office agree that, upon filing of the Criminal Complaint
in accordance with the preceding paragraph, this DPA shall be publicly filed in
the United States District Court for the District of New Jersey, and the Company
agrees to post the DPA prominently on the Company website for the duration of
the DPA.

4. In light of the Company’s remedial actions to date and its willingness to:
(a) undertake additional remediation as necessary; (b) acknowledge
responsibility for its behavior; (c) continue its cooperation with the Office
and other government agencies; and (d) demonstrate its good faith and commitment
to full compliance with federal health care laws, the Office shall recommend to
the Court that prosecution of the Company on the Criminal Complaint be deferred
for a period of twelve (12) months from the filing date of such Criminal
Complaint. If the Court declines to defer prosecution for any reason, this DPA
shall be null and void, and the parties will revert to their pre-DPA positions.

5. The Company has represented to the Office that between late 2003 and
January 1, 2009, the Company adopted a series of compliance processes. These
processes included: (1) in December 2003, a Code of Conduct that sets forth
expectations for ethical conduct by company employees in their business
activities, (2) in December 2003, the establishment of a Surgeons Relations
committee, and (3) in 2005, the establishment of a Clinical Research committee.
The Company has represented that the Surgeons Relations and Clinical Research
committees were intended to evaluate candidates for consultancies and to oversee
consultancies to ensure that they satisfied bona fide business needs of the
Company. The Company has further represented to the Office that it: (1) adopted,
in 2004, the AdvaMed Code of Ethics on Interactions with Health Care
Professionals (“the “AdvaMed Code”), and on January 1, 2009, adopted the revised
AdvaMed Code six months prior to its proposed effective date; (2) instituted
product development processes intended to strengthen compliance controls;
(3) developed and implemented, in December 2008, a Compliance Plan which created
an independent review process for the approval of consultancies; and
(4) developed additional compliance policies and standard operating procedures
regarding, inter alia, various types of consultants, educational grants,
charitable donations, and training and education programs.

 

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The Company has also represented to the Office that more recently, the Company
has undertaken a Compliance initiative designed to strengthen its compliance
processes, procedures and controls, with a particular focus on those concerning
consulting arrangements with customers or potential customers of the Company’s
hip and knee reconstruction and replacement products. Towards that end, the
Company has separated the roles of Corporate Counsel and Chief Compliance
Officer, appointed a new Chief Compliance Officer, expanded the obligations of
its Nominating, Compliance and Governance Committee, undertaken a review of its
existing consulting agreements with respect to hip and knee reconstruction and
replacement products, and developed a comprehensive needs assessment process for
such consulting services. The Company has also represented that it has developed
additional policies and standard operating procedures regarding employee and
distributor compliance training programs.

General Commitment to Compliance and Remedial Actions

6. The Company commits itself to exemplary corporate citizenship, the best
practices of effective corporate governance, the highest principles of honesty
and professionalism, the integrity of the operation of federal health care
programs including Medicare and Medicaid, the sanctity of the doctor-patient
relationship, and a culture of openness, accountability, and compliance
throughout the Company. The Company also commits not to attempt to influence
medical practitioners and institutions to use the Company’s products through the
use of unlawful inducements. To advance and underscore this commitment, the
Company agrees to take, or has acknowledged that it has taken, the remedial and
compliance measures set forth herein.

7. In matters relating to federal health care laws, the Company will cooperate
fully with all federal law enforcement and regulatory agencies, including but
not limited to: the Criminal and Civil Divisions of the Office; the United
States Department of Justice, Criminal and Civil Divisions; the United States
Department of Health and Human Services, Office of Inspector General
(“HHS-OIG”); the Federal Bureau of Investigation (“FBI”); and the United States
Postal Inspection Service (“USPIS”); provided, however, that such cooperation
shall not require the Company’s waiver of attorney-client and work product
protections or any other applicable legal privileges. Nothing in this DPA shall
be construed as a waiver of any applicable attorney-client or work product
privileges (hereafter “privilege”).

8. The Company shall communicate to its employees and distributors that Company
personnel and agents are required to report to the Company any suspected
violations of any federal laws, regulations, federal health care program
requirements, or internal policies and procedures.

9. The Company shall implement or continue its operation of an effective
corporate compliance program and function to ensure that internal controls are
in place to prevent recurrence of the activities that resulted in this DPA. The
Company shall also develop and implement policies, procedures, and practices
designed to ensure compliance with federal health

 

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care program requirements, including the Anti-Kickback Statute, with respect to
all its dealings with Consultants, as defined herein, and others who cause the
purchase of Company hip and knee reconstruction and replacement products in the
United States.

10. The Company shall adhere to the Revised and Restated AdvaMed Code of Ethics
on Interactions with Health Care Professionals. The Revised and Restated AdvaMed
Code, which became effective on July 1, 2009, can be found at www.advamed.org.
The principles set forth in the AdvaMed Code are expressly incorporated as
compliance requirements under this DPA.

11. The Company agrees that its Chairman of the Board of Directors and Chief
Executive Officer, President, Chief Financial Officer, Executive Vice President
for Research and Development, Corporate Counsel, and Chief Compliance Officer
(“Compliance Officer’), and other appropriate Company executives will meet
quarterly with representatives of the Office and with the Monitor, in
conjunction with the Monitor’s quarterly reports described in paragraph 19(c)
herein.

Definitions

12. “Consultant” is defined as any United States-based orthopaedic surgeon,
Ph.D., health care professional, non-physician practitioner, medical fellow,
resident or student, hospital, medical institution, or any employee or agent of
any educational or health care organization the Company retains for any personal
or professional services or compensates or remunerates in any way, directly or
indirectly, for or in anticipation of personal or professional services relating
to hip and knee reconstruction and replacement in the United States. The term
“Consultant” shall not include accountants, auditors, attorneys, fair market
value specialists, CME providers, reimbursement specialists, any non-physician
engineering or marketing consultants, or any other types of non-physician
professionals or entities excluded from this definition by the Monitor upon
recommendation by the Company.

13. “Consulting Agreement” includes all contracts with Consultants for services
to be performed on behalf of the Company relating to hip and knee reconstruction
and replacement in the United States. This includes, but is not limited to,
agreements for compensation, payments, remuneration, honoraria, fellowships,
professional meetings, speaking engagements, teaching, publications, clinical
studies, fee-for-service consulting, product development and license agreements,
research, and professional services agreements. The term “Consulting Agreement”
also includes agreements to provide grants, donations, sponsorships and other
forms of payment to medical educational organizations, medical societies and
training institutions.

14. “Consulting Services” or “Services” include any and all professional
services provided by a Consultant to or on behalf of the Company relating to hip
and knee reconstruction and replacement in the United States.

15. “Payment” shall include any and all compensation or remuneration paid to or
for the benefit of Consultants, including but not limited to payments and
reimbursements for personal or professional services, any type of securities,
registered or unregistered, meals,

 

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entertainment, travel, gifts, grants, honoraria, charitable contributions,
donations, sponsorships, research grants, clinical studies, professional
meetings, product training, medical education, research funding, product
development services, in-kind services (e.g., use of aircraft), advertising,
promotion, and marketing expenses or support, and royalties or other payments
for transfer of documented intellectual property. Unless otherwise approved by
the Monitor, the Company shall only compensate or remunerate Consultants through
direct Payments made pursuant to a Consulting Agreement. The Company shall not
knowingly make any Payments to Consultants indirectly, such as through
distributors. Subject to Monitor approval, payments may be made to Consultants
through consulting entities provided that (1) the Consultant is named in the
corresponding Consulting Agreement, and (2) the Consultant is named on any and
all payment documents.

Retention and Obligations of a Monitor

16. The Company agrees that until the expiration of this DPA, it will retain an
outside, independent individual (the “Monitor”) selected by the Office
consistent with United States Department of Justice guidelines and after
consultation with the Company, to evaluate and monitor the Company’s compliance
with this DPA. The Monitor is an independent third party, and not an employee or
agent of the Company, and no attorney-client relationship shall be formed
between the Monitor and the Company. The Company agrees that it will not employ
or be affiliated with any selected Monitor for a period of not less than one
year from the date the monitorship is terminated.

17. The Monitor shall have access to all non-privileged Company documents and
information the Monitor determines are reasonably necessary to assist in the
execution of his or her duties. The Monitor shall have the authority to meet
with any officer, employee, or agent of the Company. The Company shall use its
best efforts to have its independent distributors for hip and knee
reconstruction and replacement products in the United States and their employees
and agents fully cooperate and meet with the Monitor as requested. For all
distributor agreements for hip and knee reconstruction and replacement products
and renewals in the United States executed after the Effective Date, the Company
shall require provisions allowing the Monitor access to non-privileged relevant
documents and information relating to Consulting Agreements and Services, and
compliance with all applicable provisions of the DPA.

18. The Monitor shall conduct a review and evaluation of all Company policies,
practices, and procedures relating to compliance with the DPA and the following
subjects, and shall report and make written recommendations as necessary
(“Recommendations”) to the Company and the Office concerning:

 

  a. The corporate structure and governance of the Company relative to
selecting, engaging, and paying Consultants;

 

  b. The effectiveness of the procedures and practices at the Company to select,
engage, and pay Consultants in exchange for the provision of Services to the
Company, as well as the related legal, compliance, research and development,
marketing, sales, internal controls, and finance functions;

 

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  c. The effectiveness of the training and education programs in the following
areas: federal health care laws concerning relationships between the Company and
Consultants; Medicare, Medicaid and other health care benefit programs; ethics;
and compliance and corporate governance issues relating to federal health care
laws;

 

  d. The structure and content of agreements memorializing arrangements to
engage and pay Consultants in exchange for the provision of Services to the
Company and the Company’s payments to Consultants made thereunder. The Monitor
shall have access to and may review all previously entered agreements to the
extent he or she reasonably deems necessary; and

 

  e. The influence, actual or potential, over Consultants’ selection of Company
products as a result of the financial relationships between the Company and
those Consultants.

19. The Monitor shall, inter alia:

 

  a. Monitor and review the Company’s compliance with this DPA and all
applicable federal health care laws, statutes, regulations, and programs,
including the Anti-Kickback Statute and regulations promulgated thereunder in
connection with the sale and marketing by the Company or the Company’s hip and
knee reconstruction and replacement products in the United States;

 

  b. As requested by the Office, cooperate with the Criminal and Civil Divisions
of the Office, the United States Department of Justice, Criminal and Civil
Divisions, HHS-OIG, the FBI and the USPIS, and, as requested by the Office,
provide information about the company’s compliance with the terms of the DPA;

 

  c. Provide written reports to the Office, on at least a quarterly basis,
concerning the Company’s compliance with this DPA. In these reports or at other
times the Monitor deems appropriate, the Monitor shall make Recommendations to
the Company to take any steps he or she reasonably believes are necessary for
the Company to comply with the terms of this DPA and enhance future compliance
with federal health care laws in connection with the sale and marketing by the
Company of the Company’s hip and knee reconstruction and replacement products in
the United States, and, as agreed by the Company or mandated by the Office
pursuant to paragraph 46, require the Company to take such steps when it is
agreed that such steps are reasonable and necessary for compliance with the DPA.
The first report to the Office shall be due three (3) months after the Effective
Date, and subsequent reports shall be made quarterly thereafter;

 

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  d. After consultation with the Company and the Office, and allowing reasonable
time for the Company or the Office to object, the Monitor may retain, at the
Company’s expense, consultants, accountants or other professionals the Monitor
reasonably deems necessary to assist the Monitor in the execution of the
Monitor’s duties. Before retention, these consultants, accountants or other
professionals shall provide to the Monitor and the Company a proposed budget. If
the Company believes the costs to be unreasonable, the Company may bring the
matter to the Office’s attention for dispute resolution by the Office;

 

  e. Monitor the preparation of and approve the Needs Assessment and any
Modifications thereto described in paragraphs 27-30 herein;

 

  f. Review and approve all new or renewed Consulting Agreements executed
between the Effective Date and the date the Needs Assessment is approved;

 

  g. Review in his or her discretion any requests for Consulting Services made
between the Effective Date and the date the Needs Assessment is approved;

 

  h. Review in his or her discretion any Payments made to Consultants between
the Effective Date and the date the Needs Assessment is approved;

 

  i. Review and approve in his or her discretion all Consulting Agreements with
new Consultants executed after the Needs Assessment is approved;

 

  j. Review in his or her discretion any Consulting Agreement renewals executed
after the Needs Assessment is approved;

 

  k. Review in his or her discretion any requests for Consulting Services made
after the Needs Assessment is approved;

 

  1. Review in his or her discretion any Payments made to Consultants after the
Needs Assessment is approved;

 

  m. Review in his or her discretion any payments made to CME providers,
reimbursement specialists, any non-physician engineering or marketing
consultants, or other excluded consultants as described in paragraph 12;

 

  n. Review in his or her discretion any payments made to Consultants as
honoraria, fellowships, gifts, donations, charitable contributions and other
non-Service payments as described in paragraph 27;

 

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  o. Review and approve any new or substitute Consultants as described in
paragraphs 33 and 34 herein;

 

  p. Approve any changes to the Hourly Rate or any Payments made at a rate other
than the Hourly Rate, as described in paragraphs 36-37 herein;

 

  q. Monitor the Company’s compliance with its Consultant disclosure obligations
as described in paragraphs 40-41 herein; and

 

  r. Monitor the information received by the confidential hotline and e-mail
address as described in paragraph 43 herein.

In the event the Monitor opposes any Consulting Agreement, request for
Consulting Services, or request for Payment, the Monitor will promptly meet with
the Company to discuss his or her concerns. The Consulting Agreement shall not
be executed, the Consulting Services shall not be rendered, or the Payment shall
not be made unless and until the Monitor’s objections are remedied. All actions
of the Monitor in this regard shall be subject to review by the Office and shall
not require the Company to breach any existing contractual requirements so long
as those requirements comply with all applicable laws. The Office will act
promptly to resolve any issues on a good faith and reasonable basis.

20. The Company shall promptly notify the Monitor and the Office in writing of
any credible evidence of criminal corporate conduct as well as of any known
criminal investigations of any type of the corporation or any of its officers or
directors that becomes known to the Company after the Effective Date. In
addition, the Company shall promptly notify the Monitor and the Office in
writing of any credible evidence of criminal conduct or serious wrongdoing
relating to federal health care laws by the Company, its officers, employees and
agents. The Company shall provide the Monitor and the Office with all relevant
non-privileged documents and information concerning such allegations, including
but not limited to internal audit reports, letters threatening litigation,
“whistleblower” complaints, civil complaints, and documents produced in civil
litigation. In addition, the Company shall report to the Monitor and the Office
concerning its planned investigative measures and any resulting remedial
measures, internal and external. The Monitor in his or her discretion may
conduct an investigation into any such matters, and nothing in this paragraph
shall be construed as limiting the ability of the Monitor to investigate and
report to the Company and the Office concerning such matters.

Remedial Measures

Responsibilities of Compliance Officer

21. The Compliance Officer shall be responsible for monitoring the day-to-day
compliance activities of the Company. The Compliance Officer shall be a member
of senior management of the Company who reports directly to the Nominating,
Compliance and Governance Committee of the Board of Directors and directly to
the President and Chief Executive Officer, and shall not be a subordinate to the
Corporate Counsel, the Chief Financial Officer, or any sales or marketing
officers. The Compliance Officer shall make periodic (at least quarterly)
reports regarding compliance matters to the Company Board of Directors and is
authorized to report on such matters directly to the Company Board of Directors
at any time.

 

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22. The Compliance Officer shall have the authority to meet with, and require
reports and certifications on any subject from, any officer or employee of the
Company and any distributor and its employees.

23. The Compliance Officer shall be responsible for oversight, evaluation, and
approval of the Company’s Needs Assessments (described more fully at paragraphs
27-30), and shall evaluate and approve requests for Consulting Agreements,
Services, and Payments, subject to review and approval by the Monitor as set
forth in paragraph 19.

24. The Compliance Officer shall be responsible for approving the Consulting
Services budget. All requests for Consulting Services and Payments must be made
to and approved by the Compliance Officer. Any Payments to or for the benefit of
a Consultant must be approved by the Compliance Officer, subject to review of
the Monitor as set forth in paragraph 19.

25. Consulting Agreements shall be managed by Company employees who have no
sales responsibilities and who report to the Compliance Officer on issues
relating to Consulting Services. These employees shall interface directly with
the Consultants on the terms of their Consulting Agreements and on issues
relating to Payments.

26. From the Effective Date until the Needs Assessment is approved, all requests
for Consulting Services and Payments shall be pre-approved by the Compliance
Officer. In considering these requests, the Compliance Officer and any other
Company personnel with knowledge of the request shall evaluate the bona fides of
the activity for which the Services or Payments are requested, subject to review
of the Monitor. No Consulting Services may be approved unless the Compliance
Officer verifies that the Company has a bona fide commercial need for such
services. No Payments may be made without appropriate documentation and
verification of services rendered on a standard form to be developed by the
Compliance Officer and approved by the Monitor.

Needs Assessment

27. The Company shall complete a Needs Assessment no later than December 31,
2010, and annually thereafter. The Needs Assessment may be modified if bona
fide, commercially reasonable, unexpected business needs arise (“Modification”).
The Needs Assessment must reflect the Company’s expected, commercially
reasonable needs for all Consulting Services to fulfill its medical, clinical,
training, educational, and research and development needs for its hip and knee
reconstruction and replacement products in the United States. The Needs
Assessment shall also contain a budget for the total amount of honoraria,
fellowships, gifts, donations, charitable contributions, and any other payments
contemplated to be made to Consultants for which no Consulting Services are
provided. The Needs Assessment and any Modifications shall be prepared in
consultation with those areas of the Company that have bona fide needs for the
services to be performed. The Needs Assessment and any

 

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Modifications must be approved by the Compliance Officer and the Monitor before
they are finalized. As of January 1, 2011, the Needs Assessment and any
Modifications shall be used as a basis for Consultant selection and all
Consulting Agreements, Services and Payments. The Compliance Officer shall
attest to the best of his or her knowledge, after conducting reasonable due
diligence, that the Needs Assessment and any Modifications reflect the bona
fide, commercially reasonable consulting needs of the Company.

28. The Needs Assessment shall establish or incorporate by reference detailed
protocols or procedures that must be followed before a Consulting Agreement will
be authorized. The Needs Assessment must identify and quantify the services
needed within each discrete service category (e.g., operating room training,
speaking engagements, clinical studies, product development groups), and provide
written support for the needs. The Needs Assessment must set forth the nature of
the services needed, the range of hours or other quantitative measure needed to
complete the services, the number of Consultants needed, and the maximum fair
market value compensation to be paid for each consulting service. The Needs
Assessment shall also identify the qualifications and expertise required to
perform the services. The Needs Assessment shall ensure that Services are
distributed appropriately to all regions of the country.

29. The Needs Assessment and any approved Modifications shall be used to define
and limit all Consulting Services performed for the Company for the ensuing
year. All Consulting Agreements entered into by the Company shall be for
services specified and enumerated by the Needs Assessment and any approved
Modifications. No Consulting Agreement shall be entered into with any Consultant
for services outside those specified in the Needs Assessment and any approved
Modifications, or for services exceeding the number of services specified in the
Needs Assessment and any approved Modifications. For example, if the Needs
Assessment specifies that the Company will require Consultants to conduct 50
speaking engagements on a particular topic, once the total number of
contracted-for speaking engagements reaches 50, the Company may not engage any
additional Consultants for such speaking engagements unless it obtains an
approved Modification.

30. The Company shall maintain a record of all Consulting Services provided
under the Needs Assessment and any Modifications. Monthly reports will be issued
by the Compliance Officer to the Monitor and to senior executives in the areas
in which services are provided summarizing the Consulting Services provided or
submitted for Payment, by Consultant, by region, and by total, with a list of
services left to be provided during the calendar year in fulfillment of the
Needs Assessment.

Consulting Agreements

31. All Consulting Agreements shall be in writing and executed by the Chairman
of the Board of Directors, the President, Corporate Counsel, and Compliance
Officer. For product development and research agreements, the Executive Vice
President for Research and Development shall also sign. For research and
clinical services agreements (such as clinical trials, clinical studies, and
follow-up visits), the Vice President for Clinical and Regulatory Affairs shall
also sign. On an annual basis, the Executive Vice President for Research and
Development (for product development and research agreements) and the Vice
President for

 

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Clinical and Regulatory Affairs (for clinical services agreements), and the
Compliance Officer shall attest and certify in writing that based on their
reasonable and diligent inquiry and knowledge, all Consulting Agreements and all
Consulting Services performed thereunder were bona fide, commercially
reasonable, and compliant with all federal health care programs. The Company
shall not enter into Consulting Agreements with Consultants through or by any
third parties, including distributors. Subject to Monitor approval, payments may
be made to Consultants through consulting entities provided that (1) the
Consultant is named in the corresponding Consulting Agreement, and (2) the
Consultant is named on any and all payment documents.

32. All Consulting Agreements for Consulting Services to be rendered from
January 1, 2011 and thereafter shall be for a term of the calendar year, with
the exception of product development agreements that could result in the payment
of royalties, clinical agreements, external research agreements, or other
agreements which may be for a length appropriate to the type of Service being
rendered, upon approval of the Monitor. All Consulting Agreements shall identify
the specific Services to be provided as defined by the Needs Assessment and any
Modification thereto, and specify the rate to be paid for each Service. The
Company may not enter into Consulting Agreements for Services exceeding the
total number of Services set forth in the Needs Assessment and any Modification
thereto. Consultants shall be paid only for the actual time expended in
providing Consulting Services, in hourly billing increments or other reasonable
quantitative measure as identified in the Needs Assessment, without regard to
the total amount of consulting services permissible under their Consulting
Agreements.

New and Substitute Consultants

33. The Compliance Officer, in consultation with the Monitor and appropriate
Company employees, shall conduct an evaluation of each new Consultant to be
considered for a Consulting Agreement. This evaluation shall ensure that the
proposed Consultant’s qualifications and experience are commensurate with those
required by the Needs Assessment and any Modification thereto, and that any new
relationship meets an unfilled bona fide commercial need of the Company.

34. In the event a Consultant is unable to provide services to the Company under
a Consulting Agreement in any given year, the Company may substitute another
Consultant or retain a new Consultant to perform the specified yet unfulfilled
Consulting Services of the Consulting Agreement. The substitute Consultant must
be authorized by the Compliance Officer and approved by the Monitor after
conducting a substantive review of the Consultant’s qualifications and
expertise.

Payments to Consultants

35. A Company employee or representative must be present for every Consulting
Service, except that the Monitor, upon application by the Compliance Officer,
may exempt certain Services from this requirement (such as collection of
clinical study data, travel or preparation time). Upon completion of the
Consulting Service, both the Company employee (or representative) in attendance
and the Consultant must independently verify in writing that the

 

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Service took place, identify the participants present and length of service, and
summarize the Service provided. These verifications must be certified, made
under penalty of perjury, and submitted to the Compliance Officer within ninety
(90) calendar days of the date of the Service and as a condition precedent to
any Payments being issued under a Consulting Agreement.

36. For all Consulting Agreements entered into after the Effective Date of this
DPA, the Company agrees to make Payments to Consultants at a fair market value
hourly rate (“Hourly Rate”) of no more than $500 per hour for time actually
expended by a Consultant performing Consulting Services. In the event the
Company wishes to make Payments to a Consultant at a higher Hourly Rate or at a
different rate because of the Consultant’s special expertise or the nature of
the service (such as a per patient rate for clinical studies), the Company must
obtain or have obtained a fair market value analysis conducted by an independent
organization with expertise in valuation as approved or accepted by the Monitor.
Any changes to the Hourly Rate or Payments at other than the Hourly Rate must be
approved by the Monitor.

37. With respect to product development agreements and renewals entered into
after the Effective Date and for all Services to be rendered after January 1,
2011, the Company shall pay a Consultant on a product development team for the
actual time spent providing Services to the Company, at no more than the Hourly
Rate. In addition to the Hourly Rate payments, the Company may pay each member
of a product development team royalties on any product the team may develop. The
number of Consultants serving on a product development team must not exceed the
number reasonably necessary to achieve the identified design and development
needs of the project. The aggregate royalties paid per project to all
Consultants shall not exceed fair market value expressed as a certain percentage
of all domestic and international product sales of the product or products that
are the subject of the product development agreement as proposed by the Company
and approved by the Monitor. These royalty payments and Hourly Rate payments
shall be the only compensation a Consultant may receive for participation on a
product design team; that is, the Company shall not make any flat rate payments
or minimum guaranteed payments in lieu of or in addition to Hourly Rate payments
and royalty payments. The Company may offset royalty payments to a Consultant
with Hourly Rate payments for Services the Consultant appropriately performed.
The Company may pay royalties to a Consultant only for Intellectual Property
received by the Company for products that have actually been sold. (Products may
be considered to have been sold when the products are transferred to an
unrelated third-party or to a Company affiliate located outside the United
States.) If the Intellectual Property has been patented in the United States,
royalty payments may not extend beyond the life of the U.S. patent. If the
Intellectual Property has not been patented, royalties may not extend beyond a
reasonable period (in light of factors such as the life cycle and commercial
advantages of the products and Intellectual Property and the burden of
administering the royalty arrangement). As used herein, “Intellectual Property”
includes patents, trade secrets and know-how received by the Company from the
Consultant or product development team under a product development agreement.
The Company shall establish processes for reviewing individual Consultant
contributions to determine whether Intellectual Property has been provided to
the Company, and such processes shall be approved by the Monitor. The persons
responsible for deciding whether Intellectual Property has been provided shall
not be involved in sales functions, and their decision is subject to Monitor
approval. The identity of royalty-bearing products must be reasonable (in light
of factors such as the scope of Intellectual Property transferred, the

 

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relationship of the Intellectual Property to the products and the burden of
administering the royalty arrangement) and is subject to Monitor approval.
Royalties must not be paid in advance or in anticipation of product development
that might result in a royalty. No royalty may be paid to a Consultant that is
earned by virtue of the use of the product in question by the Consultant or by
any hospital or medical institution with which the Consultant is affiliated. In
lieu of royalties, a fixed amount may be paid for Intellectual Property provided
to the Company, provided the amount is commercially reasonable; such fixed
amounts are subject to Monitor approval. For patents and patent applications
that are not assigned or licensed to the Company under a product development
agreement, royalties, patent fees, patent costs, and/or a fixed amount may be
paid for the acquisition or licensing of such patents and patent applications,
subject to Monitor approval.

38. All Consultants on product design teams shall submit invoices, at least
quarterly, and supporting documentation for services rendered to the Company’s
design team project manager for approval, prior to any Payments being made. A
Company employee shall be present at all meetings of product development teams.
That employee shall report the date, the participants, and a summary of the
meeting to the project manager. The project manager must certify in writing that
the invoices reflect bona fide services provided by the Consultant. These
invoices, supporting documentation, and certification must be submitted to the
Compliance Officer for Payment.

39. In addition, the following practices have been or shall be implemented no
later than sixty (60) calendar days after the Effective Date:

 

  a. The Company may not make Payments to Consultants for collection of clinical
data unless there is a written agreement defining the required procedures and
protocol and the amount of clinical data to be collected by the Consultant,
pre-approved by the Vice President, Clinical and Regulatory Affairs.

 

  b. The Company may not make Payments to Consultants for research unless there
is a written agreement defining the required procedures and protocol,
pre-approved by the Senior Vice President, Research and Development. The Company
may not provide unrestricted grants to Consultants.

 

  c. The Company may not fund any fellowships for fellows who work with any
Consultant, with the exception of fellowship funding to legitimate medical
education foundations or institutions so long as that funding is approved in
advance by the Compliance Officer and the Monitor.

 

  d. The Company may not make charitable contributions to 501(c)(3)
organizations that are, to the best of the Company’s knowledge after reasonable
due diligence is conducted, controlled by a Consultant or an immediate family
member of a Consultant, or at which an immediate family member of a Consultant
is employed. All charitable contributions must be approved in advance by the
Compliance Officer in consultation with the Monitor, and the Monitor has the
discretion to make exceptions to the above standard.

 

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  e. Other than Consulting Agreements, the sale of products and associated
equipment and instruments and the purchase of Intellectual Property, the Company
may have no commercial dealings with any Consultant or any entity or
organization that the Company has reason to believe, after reasonable due
diligence is conducted, is controlled by the Consultant or an immediate family
member of the Consultant. The Monitor has the discretion to make exceptions to
the above standard.

 

  f. The Company shall not hire or engage as an agent or distributor anyone in
order to induce a specific Consultant to use or purchase Company products.

 

  g. The Compliance Officer shall notify the Monitor of any employees or
independent distributors who are known to bear an immediate family relationship
to any Consultant. In such cases, the Monitor may recommend changes in
assignment or case coverage to avoid actual or perceived conflicts of interest.

Disclosure

40. All new Consulting Agreements and renewals shall require Consultants to
disclose their financial engagement with the Company to their patients, as well
as to their affiliated hospitals.

41. Within thirty (30) calendar days of the Effective Date of this DPA, the
Company shall prominently feature on its web site the name, city, and state of
residence for each of the Company’s Consultants who: (1) were retained at any
time from June 1, 2010 through December 31, 2011; (2) who provided Consulting
Services to the Company at any time from June 1, 2010 through December 31, 2011;
or (3) who received any Payments from the Company at any time from June 1, 2010
through December 31, 2011. The Company shall also there disclose any Payments
made to each Consultant from June 1, 2010 through December 31, 2011 within
$25,000 increments, and all other Payments made in other than dollar form.
Within ten (10) calendar days after a new Consulting Agreement or renewal is
executed, the Company shall post the name of the Consultant on its web site. If
the Company has or does enter into a Consulting Agreement with an entity rather
than an individual, the Company shall post both the name of the entity and the
individual providing Services to the Company under the Consulting Agreement.
Payment information shall be updated quarterly during the term of this DPA to
reflect the total Payments made to each Consultant within $25,000 increments,
and all other Payments made in other than dollar form The Company must also
disclose this information to the Consultant’s affiliated hospitals.

 

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Compliance, Training. Hotline

42. The Company agrees to enhance, support, and maintain its existing training
and education programs, including any programs recommended by the Monitor
pursuant to paragraph 18, above. The programs, which shall be reviewed and
approved by the Board of Directors, the Chief Executive Officer, the President,
the Executive Vice President for Research and Development, the Corporate
Counsel, the Compliance Officer, and the Monitor, shall be designed to advance
and underscore the Company’s commitment to exemplary corporate citizenship, to
best practices of effective corporate governance and the highest principles of
integrity and professionalism, and to fostering a culture of openness,
accountability and compliance with federal health care laws throughout the
Company. Completion of such training shall be mandatory for all Company
officers, executives, and employees who are involved in Sales, Marketing, Legal,
Compliance, and other senior executives at the Company as proposed by the
Compliance Officer and approved by the Monitor (collectively the “Mandatory
Participants”). Such training and education shall cover, at a minimum, all
relevant federal health care laws and regulations, internal controls in place
concerning Consultants and their Consulting Agreements with the Company, and the
obligations assumed by, and responses expected of, the Mandatory Participants
upon learning of improper, illegal, or potentially illegal acts relating to the
Company’s sales and marketing practices. The Company Chief Executive Officer and
Board of Directors shall communicate to the Mandatory Participants, in writing
or by video, their review and endorsement of the training and education
programs. The Company shall commence providing this training within ninety
(90) calendar days after the Effective Date of this DPA.

43. The Company agrees to maintain its confidential hotline and e-mail address,
of which Company employees, agents, and customers are informed and which they
can use to notify the Company of any concerns about unlawful conduct, other
wrongdoing, or evidence that Company practices do not conform to the
requirements of this Agreement. Subject to Monitor approval, the Company may
retain a vendor to assist in the maintenance of the Company’s confidential
hotline and e-mail address. This hotline and e-mail address shall be reviewed by
the Monitor. The Company shall post information about this hotline on its
website and shall inform all those who avail themselves of the hotline of the
Company’s commitment to non-retaliation and to maintain confidentiality and
anonymity with respect to such reports.

Disclosure of Monitor Reports

44. The Company agrees that the Monitor may disclose his or her written reports,
as directed by the Office, to any other federal law enforcement or regulatory
agency in furtherance of an investigation of any other matters discovered by, or
brought to the attention of, the Office in connection with the Office’s
investigation of the Company or the implementation of this DPA. The Company may
identify any trade secret or proprietary information contained in any report,
and request that the Monitor redact such information prior to disclosure.

Replacement of Monitor

45. The Company agrees that if the Monitor resigns or is unable to serve the
balance of his or her term, a successor shall be selected by the Office
consistent with United States Department of Justice guidelines and after
consultation with the Company, within forty-five (45) calendar days. The Company
agrees that all provisions in this DPA that apply to the Monitor shall apply to
any successor Monitor.

 

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Adopting Recommendations of Monitor

46. The Company shall adopt all Recommendations contained in each report
submitted by the Monitor to the Office, unless the Company objects to the
Recommendation and the Office agrees that adoption of the Recommendation shall
not be required. The Monitor’s reports to the Office shall not be received or
reviewed by the Company prior to submission to the Office; such reports will be
preliminary until the Company is given the opportunity, within fifteen
(15) calendar days after the submission of the report to the Company, to comment
to the Monitor and the Office in writing upon such reports, and the Monitor has
reviewed and provided to the Office responses to such comments, upon which such
reports shall be considered final. In the event the Company disagrees with any
Recommendation of the Monitor, the Company and the Monitor may present the issue
to the United States Attorney for his consideration and final decision, which is
non-appealable.

Meeting with the U.S. Attorney

47. Within thirty (30) calendar days of the Effective Date of this DPA, the
Company agrees to call a meeting, on a date mutually agreed upon by the Company
and the Office, of Company senior compliance, sales, and marketing executives,
and any other Company employees whom the Company desires to attend, such meeting
to be attended by the United States Attorney, his designee, and/or other
representatives of the Office for the purpose of communicating the goals and
expected effect of this DPA.

Cooperation

48. The Company agrees that its continuing cooperation during the term of this
DPA shall include, but shall not be limited to, the following:

 

  a. Not engaging in or attempting to engage in any criminal conduct;

 

  b. Completely, truthfully and promptly disclosing all non-privileged
information concerning all matters about which the Office and other government
agencies designated by the Office may inquire with respect to the Company’s
compliance with health care laws, and continuing to provide the Office, upon
request, all non-privileged documents and other materials relating to such
inquiries;

 

  c. Consenting to any order sought by the Office permitting disclosure to the
Civil Division of the United States Department of Justice of any materials
relating to compliance with federal health care laws that constitute “matters
occurring before the grand jury” within the meaning of Rule 6(e) of the Federal
Rules of Criminal Procedure. If the Company asserts that any such any material
contains trade secrets or other proprietary information, the Company shall
propose redactions to the Office prior to disclosure to any other governmental
entity, or the material shall be accompanied by a prominent warning notifying
the agency of the protected status of the material;

 

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  d. Making available current Company officers and employees and using its best
efforts to make available former Company officers and employees to provide
information and/or testimony at all reasonable times as requested by the Office,
including sworn testimony before a federal grand jury or in federal trials, as
well as interviews with federal law enforcement authorities as may relate to
matters involving compliance with health care laws. The Company is not required
to request of its current or former officers and employees that they forego
seeking the advice of an attorney nor that they act contrary to that advice.
Cooperation under this paragraph shall include, upon request, identification of
witnesses who, to the Company’s knowledge, may have material non-privileged
information regarding the matters under investigation;

 

  e. Providing testimony, certifications, and other non-privileged information
deemed necessary by the Office or a court to identify or establish the original
location, authenticity, or other evidentiary foundation necessary to admit into
evidence documents in any criminal or other proceeding relating to compliance
with health care laws as requested by the Office;

 

  f. The Company acknowledges and understands that its future cooperation is an
important factor in the decision of the Office to enter into this DPA, and the
Company agrees to continue to cooperate fully with the Office, and with any
other government agency designated by the Office, regarding any issue about
which the Company has knowledge or information with respect to compliance with
health care laws;

 

  g. This agreement to cooperate does not apply to any information provided by
the Company to legal counsel in connection with the provision of legal advice
and the legal advice itself, or to information or documents prepared in
anticipation of litigation, and nothing in this DPA shall be construed to
require the Company to provide any such information or advice to the Office or
any other government agency; and

 

  h. The cooperation provisions in this paragraph shall not apply in the event
that the Office pursues a criminal prosecution against the Company.

Breach of Agreement

49. Should the Office determine, in good faith and in its sole discretion,
during the term of this DPA that the Company has committed any criminal conduct
relating to compliance with health care laws subsequent to the Effective Date of
this DPA, the Company shall, in the discretion of the Office, thereafter be
subject to prosecution for any federal crimes of which the Office has knowledge.

50. Should the Office determine in good faith and in its sole discretion that
the Company has knowingly and willfully breached any material provision of this
DPA, the Office shall provide written notice to the Company of the alleged
breach and provide the Company with

 

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a three-week period from receipt of such notice in which to make a presentation
to the Office to demonstrate that no breach occurred, or, to the extent
applicable, that the breach was not material or knowingly and willfully
committed or has been cured. The parties understand and agree that should the
Company fail to make a presentation to the Office within the three-week period
after receiving written notice of an alleged breach, it shall be conclusively
presumed that the Company is in breach of this DPA. In the event the Office
determines, in good faith and in its sole discretion, that a second material
breach has occurred, or that the first material breach has not been adequately
cured, the Office shall provide written notice to the Company of the breach, and
the breach may result, in the sole discretion of the Office, in the prosecution
of the Company relating to the allegations set forth in the criminal complaint
described in paragraph 2 above. In the event of any breach of this DPA that
results in a prosecution of the Company, such prosecution may be premised upon
any information provided by or on behalf of the Company to the Office at any
time, unless otherwise agreed at the time the information was provided. The
parties further understand and agree that the determination whether the Company
has breached this DPA rests solely in the discretion of the Office, and the
exercise of discretion by the Office under this paragraph is not subject to
review in any court or tribunal outside the United States Department of Justice.

51. In the event of breach of this DPA as defined in paragraph 49 or 50 above,
the Company may be subject to exclusion by OIG-HHS from participation in all
federal health care programs. Such exclusion shall have national effect and
shall also apply to all other federal procurement and non-procurement programs.
Federal health care programs shall not pay anyone for services or items
manufactured, furnished, or distributed by the Company in any capacity while the
Company is excluded. This payment prohibition applies to the Company and all
other individuals and entities (including, for example, anyone who employs or
contracts with the Company, and any hospital or other provider where the Company
provides services). The exclusion applies regardless of who submits the claim or
other request for payment. The Company shall not submit or cause to be submitted
to any federal health care program any claim or request for payment for services
or items manufactured, furnished, or distributed by the Company during the
exclusion. Violation of the conditions of the exclusion may result in criminal
prosecution, the imposition of civil monetary penalties and assessments, and an
additional period of exclusion. The Company further agrees to hold the federal
health care programs, and all federal beneficiaries and/or sponsors, harmless
from any financial responsibility for services or items manufactured, furnished
or distributed to such providers, beneficiaries or sponsors after the effective
date of the exclusion. The Company waives any further notice of the exclusion
under 42 U.S.C. § 1320a-7(b)(7), and agrees not to contest such exclusion either
administratively or in any state or federal court. Reinstatement to program
participation is not automatic. If at the end of the period of exclusion the
Company wishes to apply for reinstatement, the Company must submit a written
request for reinstatement to the OIG in accordance with the provisions of 42
C.F.R. §§ 1001.3001-.3005. The Company will not be reinstated unless and until
the OIG approves such request for reinstatement.

52. In the event of breach of this DPA as defined in paragraph 49 and 50 above,
the Office shall have discretion to extend the term of the Monitor by a period
of up to 6 months, with a total term not to exceed 18 months, in lieu of
prosecuting or subjecting the Company to exclusion.

 

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53. In the event that the Company can demonstrate to the Office that there
exists a change in circumstances sufficient to eliminate the need for a Monitor,
the Office may exercise its discretion, consistent with United States Department
of Justice policy, to terminate the monitorship.

Waivers and Limitations

54. The Company shall expressly waive all rights to a speedy trial pursuant to
the Sixth Amendment of the United States Constitution, Title 18, United States
Code, Section 3161, Federal Rule of Criminal Procedure 48(b), and any applicable
Local Rules of the United States District Court for the District of New Jersey,
for the period that this DPA is in effect for any prosecution of the Company
relating to the allegations set forth in the criminal complaint described in
paragraph 2 above.

55. In case of a knowing and willful material breach of this DPA, any
prosecution of the Company relating to the allegations set forth in the criminal
complaint described in paragraph 2 above that is not time-barred by the
applicable statute of limitations as of the Effective Date of this DPA may be
commenced against the Company notwithstanding the expiration of any applicable
statute of limitations during the term of the DPA. The Company agrees to waive
any claims of improper venue with respect to any prosecution of the Company
relating to the allegations set forth in the criminal complaint described in
paragraph 2 above. This waiver is knowing and voluntary and in express reliance
on the advice of counsel. Any such waiver shall terminate upon final expiration
of this DPA.

56. Absent the express written consent of the Office to conduct itself
otherwise, and consistent with United States Department of Justice policy, the
Company agrees that if, after the Effective Date of this Agreement, the Company
sells all or substantially all of its business operations as they exist as of
the Effective Date of this Agreement to a single purchaser or group of
affiliated purchasers during the term of this Agreement, or merges with a third
party in a transaction in which the Company is not the surviving entity, the
Company shall include in any contract for such sale or merger a provision
binding the purchaser, successor, or surviving entity to continue to comply with
the Company’s obligations as contained in this DPA.

57. The Company is simultaneously entering into an agreement with the Office’s
Civil Division (the “Civil Settlement Agreement’) regarding the payment of money
to settle certain civil claims. The Company is also simultaneously entering into
a Corporate Integrity Agreement (“CIA”) with HHS-OIG to implement certain
specified compliance measures. Failure by the Company to comply fully with those
material terms of the Civil Settlement Agreement scheduled to occur during the
Effective Period of this DPA may constitute a breach of this DPA; provided,
however, that a breach of the CIA referenced in the Civil Settlement Agreement
does not constitute a breach of this DPA. Any disputes arising under the CIA
shall be resolved exclusively through the dispute resolution provisions of the
CIA.

58. Nothing in this DPA restricts in any way the ability of the Office to
investigate and prosecute any current or former Company officer, employee, agent
or attorney.

 

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59. It is understood that this DPA is limited to the Company and the Office, and
it cannot bind other federal, state or local authorities. However, the Office
will bring this DPA, the United States Department of Justice Petite Policy and
the cooperation of the Company and its compliance with its other obligations
under this DPA to the attention of other prosecuting offices, if requested to do
so.

Dismissal of Complaint

60. The Office agrees that if the Company is in full compliance with all of its
obligations under this DPA, the Office, within ten (10) calendar days of the
expiration of the term of this DPA, will seek dismissal with prejudice of the
criminal complaint described in paragraph 2 above. Except as otherwise provided
herein, during and upon the conclusion of the term of this DPA, the Office
agrees that it will not prosecute the Company further for the matters that have
been the subject of the Office’s investigation relating to this DPA, including
but not limited to Payments that the Company made to Consultants between 2002
and 2008.

The Full Agreement

61. This DPA constitutes the full and complete agreement between the Company and
the Office and supersedes any previous agreement between them. No additional
promises, agreements, or conditions have been entered into other than those set
forth in this DPA, and none will be entered into unless in writing and signed by
the Office, Company counsel, and a duly authorized representative of the
Company. It is understood that the Office may permit exceptions to or excuse
particular requirements set forth in this DPA at the written request of the
Company or the Monitor, but any such permission shall be in writing.

62. This DPA may be executed in counterparts, each of which shall be deemed an
original but all of which taken together shall constitute one and the same
agreement. The exchange of copies of this DPA and of signature pages by
facsimile or electronic transmission shall constitute effective execution and
delivery of this DPA as to the parties and may be used in lieu of the original
DPA for all purposes. Signatures of the parties transmitted by facsimile or
electronic transmission shall be deemed to be their original signatures for all
purposes.

AGREED TO:

 

/s/ William Petty

   

/s/ J. Gilmore Childers

William Petty, M.D.

Chairman of the Board of Directors and Chief Executive Officer

Exactech, Inc.

   

J. Gilmore Childers

Attorney for the United States,

Acting Under Authority Conferred

by 28 U.S.C. § 515

December 2, 2010

   

December 7, 2010

Date     Date

 

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DIRECTOR’S CERTIFICATE

I have read this agreement and carefully reviewed every part of it with counsel
for Exactech, Inc. (the “Company”). I understand the terms of this Deferred
Prosecution Agreement and voluntarily agree, on behalf of the Company, to each
of the terms. Before signing this Deferred Prosecution Agreement, I consulted
with the attorney for the Company. The attorney fully advised me of the
Company’s rights, of possible defenses, of the Sentencing Guidelines’
provisions, and of the consequences of entering into this Deferred Prosecution
Agreement. No promises or inducements have been made other than those contained
in this Deferred Prosecution Agreement. Furthermore, no one has threatened or
forced me, or to my knowledge any person authorizing this Deferred Prosecution
Agreement on behalf of the Company, in any way to enter into this Deferred
Prosecution Agreement. I am also satisfied with the attorney’s representation in
this matter. I certify that I am a director of the Company, and that I have been
duly authorized by the Board of Directors of the Company to execute this
certificate on behalf of the Company.

 

/s/ William Petty

   

December 2, 2010

Exactech, Inc.     Date

 

By:   William Petty, M.D., Chairman of the Board of Directors and Chief
Executive Officer

 

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CERTIFICATE OF COUNSEL

I am counsel for Exactech, Inc. (the “Company”). In connection with such
representation, I have examined relevant Company documents, and have discussed
this Deferred Prosecution Agreement with the authorized representative of the
Company. Based on my review of the foregoing materials and discussions, I am of
the opinion that:

1. The undersigned counsel is duly authorized to enter into this Deferred
Prosecution Agreement on behalf of the Company; and

2. This Deferred Prosecution Agreement has been duly and validly authorized,
executed and delivered on behalf of the Company, and is a valid and binding
obligation of the Company.

Further, I have carefully reviewed every part of this Deferred Prosecution
Agreement with directors of the Company. I have fully advised these directors of
the Company’s rights, of possible defenses, of the Sentencing Guidelines’
provisions, and of the consequences of entering into this Agreement. To my
knowledge, the Company’s decision to enter into this Agreement is an informed
and voluntary one.

 

/s/ Mark P. Schnapp

   

December 7, 2010

Mark P. Schnapp, Esquire    

Date

Greenberg Traurig P.A.    

 

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CERTIFIED COPY OF RESOLUTION

Upon motion duly made, seconded, and unanimously earned by the affirmative vote
of all the Directors present, the following resolutions were adopted:

WHEREAS, Exactech Inc. (the “Company”) has been engaged in discussions with the
United States Attorney’s Office for the District of New Jersey (the “Office”) in
connection with an investigation being conducted by that Office;

WHEREAS, the Board of the Company consents to resolution of these discussions by
entering into a deferred prosecution agreement that the Company Board of
Directors has reviewed with outside counsel representing the Company, relating
to a criminal complaint to be filed in the U.S. District Court for the District
of New Jersey charging the Company with conspiracy to commit violations of the
federal anti-kickback statute;

NOW THEREFORE, BE IT RESOLVED that outside counsel representing the Company from
Greenberg Traurig P.A. be, and hereby are, authorized to execute the Deferred
Prosecution Agreement on behalf of the Company substantially in the same form as
reviewed by the Company Board of Directors at this meeting and as attached
hereto as Exhibit A, and that a Director of the Company is authorized to execute
the Director’s Certificate attached thereto.

 

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SECRETARY’S CERTIFICATION

I, Betty Petty, the duly elected Secretary of Exactech, Inc. (the “Company”) a
corporation duly organized under the laws of the State of Florida, hereby
certify that the following is a true and exact copy of a resolution approved by
the Board of Directors of the Company at a meeting held at 5:00 PM EST on the
29TH of NOVEMBER, 2010;

WHEREAS, the Company has been engaged in discussions with the United States
Attorney’s Office for the District of New Jersey (the “Office”) in connection
with an investigation being conducted by the Office into activities of the
Company relating to certain payments to Consultants who have selected
orthopaedic hip and knee replacement products manufactured by the Company in
surgeries performed by them;

WHEREAS, the Board of Directors of the Company consents to resolution of these
discussions on behalf of the Company by entering into a deferred prosecution
agreement that the Board of Directors has reviewed with outside counsel
representing the Company, relating to a criminal complaint to be filed in the
U.S. District Court for the District of New Jersey charging the Company with
conspiracy to commit violations of the federal anti-kickback statute;

NOW THEREFORE, BE IT RESOLVED that outside counsel representing the Company from
Greenberg Traurig P. A. be, and they hereby are authorized to execute the
Deferred Prosecution Agreement on behalf of the Company substantially in the
same form as reviewed by the Board of Directors at this meeting and as attached
hereto as Exhibit A, and that a Director of the Company is authorized to execute
the Director’s Certificate attached thereto.

IN WITNESS WHEREOF, I have hereunto signed my name as Secretary and affixed the
Seal of said Corporation this 2nd day DECEMBER, 2010.

 

/s/ Betty Petty

Betty Petty, Secretary

 

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