EXAC Exactech, Inc. (delisted)

On October 22, 2017, Exactech, Inc., a Florida corporation (the “ Company ”), entered into an Agreement and Plan of Merger (the “ Merger Agreement ”) with Osteon Holdings, L.P., a Delaware limited partnership (“ Parent ”), and Osteon Merger Sub, Inc., a Florida corporation and wholly owned subsidiary of Parent (“ Merger Sub ”). Parent and Merger Sub are affiliates of global private equity firm TPG Capital. Capitalized terms used and not defined herein have the respective meanings assigned to them in the Merger Agreement filed herewith as Exhibit 2.1 to this Current Report on Form 8-K.

The Merger

Pursuant to the Merger Agreement, upon the terms and subject to the conditions thereof, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and as a wholly owned subsidiary of Parent (the “ Merger ”). The time the Merger occurs is referred to as the “ Effective Time ”.

Merger Consideration

In the Merger, each outstanding share of common stock, par value $0.01 per share, of the Company (“ Company Common Stock ”) will be cancelled and converted into the right to receive $42.00 in cash, without interest thereon (the “ Merger Consideration ”), other than certain shares of Company Common Stock held by the Company’s founders and certain management stockholders who have agreed to exchange, at a valuation of $42.00 per share, a portion of their shares for new equity securities in Parent.

Company Stock Options and Restricted Stock

Each Company Stock Option, to the extent outstanding and unexercised as of immediately prior to the Effective Time, whether vested or unvested, will be cancelled as of immediately prior to the Effective Time, and in consideration for such cancellation, the holder thereof will be entitled to receive an amount in cash, without interest, equal to the product of (A) the excess, if any, of (y) the Merger Consideration over (z) the per share exercise price of such Company Stock Option multiplied by (B) the number of shares of Company Common Stock subject to such Company Stock Option, less any applicable withholding taxes. Each Company Stock Option with a per share exercise price that is equal to or greater than the Merger Consideration will be cancelled immediately prior to the Effective Time with no consideration payable to the holder thereof.

Each Company Restricted Share that is outstanding immediately prior to the Effective Time will become fully vested immediately prior to the Effective Time and will be treated as an outstanding share of Company Common Stock, and the holder thereof shall be entitled to receive the Merger Consideration with respect thereto, less any applicable withholding.

Conditions to Effect the Merger; Financing Commitment

The obligation of the parties to consummate the Merger is subject to customary closing conditions, including, among other things, the approval of the Merger Agreement and the Merger by the Company’s shareholders at a special meeting of shareholders convened for such purpose (“ Shareholder Approval ”) and the absence of legal restraints and prohibitions against the Merger and the other transactions contemplated by the Merger Agreement. The obligation of each party to consummate the Merger is also conditioned upon certain of the other party’s representations and warranties being true and correct, the other party having performed in all material respects its material obligations under the Merger Agreement and the other party having not suffered a material adverse effect.

There is no financing condition to the Merger. On October 22, 2017, the Company entered into an equity commitment letter (the “ Financing Letter ”), together with TPG Partners VII, L.P., a Delaware limited partnership (the “ Fund ”), and Parent, pursuant to which, subject to certain conditions, the Fund has committed to make an equity contribution to Parent in an aggregate amount of up to approximately $624.7 million for purposes of consummating the Merger.

Company Non-solicitation Covenant and Permitted Response to Alternative Proposals

The Company is not permitted to solicit, initiate or knowingly encourage the submission or announcement of any inquiries or offers that constitute or would reasonably be expected to lead to any “Alternative Proposal” (as defined in the Merger Agreement). However, until Shareholder Approval, the Company can respond to any unsolicited, bona fide written Alternative Proposal if, and only if (A) the Company’s board of directors (the “ Board ”) determines that the failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under Florida Law and (B) the Board determines in good faith, after consultation with the Company’s outside legal advisor and financial advisor, that such Alternative Proposal constitutes or would reasonably be expected to result in a “Superior Proposal” (as defined in the Merger Agreement). If the foregoing conditions are satisfied, subject to certain restrictions (regarding confidentiality and providing certain notifications and materials to Parent), the Company may furnish such third party with information (including non-public information) with respect to the Company and otherwise can engage in discussions and negotiations with such third party regarding its Alternative Proposal.

Change in Recommendation by the Board; Company Fiduciary Termination Right and Other Events of Termination of the Merger Agreement; Termination Fee Payable in Certain Circumstances

The Board may change, qualify, withhold, withdraw or modify, or publicly propose to change, qualify, withhold, withdraw or modify, in a manner adverse to Parent (a “ Recommendation Change ”) the Board’s recommendation that the Company’s shareholders vote in favor of the Merger (the “ Company Recommendation ”), if the Board has determined in good faith, after consultation with its outside legal advisor and financial advisor, that failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties under Florida Law and that such Alternative Proposal constitutes a Superior Proposal. If the Board makes a Recommendation Change with respect to a Superior Proposal, the Company can terminate the Merger Agreement and enter into a definitive agreement for such Superior Proposal. Before the Board can make any Recommendation Change and, solely in the case of a Superior Proposal, terminate the Merger Agreement and enter into a definitive agreement for such Superior Proposal, the Company must give Parent four business days advance written notice of its intention to make such Recommendation Change. During the ensuing four-business-day-period, the Company must negotiate with Parent in good faith and consider in good faith all amendments to the Merger Agreement that Parent offers to the Company in writing to enable the Board in good faith, after consultation with the Company’s outside legal advisor and financial advisor, to determine that, were the amendments offered by Parent to be given effect, the Superior Proposal would no longer constitute such and, therefore, that it no longer is necessary for the Board to make a Recommendation Change and, in the case of a Superior Proposal, terminate the Merger Agreement and enter into a definitive agreement for such Superior Proposal. If the Board proposes to make a Recommendation Change in the case of a Superior Proposal, and such Superior Proposal is materially amended following the Company’s initial notice to Parent of such Superior Proposal,

then the Company must provide two business days advance written notice of such amendment and must again negotiate in good faith with Parent to amend the terms of the Merger Agreement to enable the Board to determine that it is no longer necessary to make a Recommendation Change, terminate the Merger Agreement and enter into a definitive agreement for a Superior Proposal. The Board may similarly effect a Recommendation Change if there has occurred an Intervening Event (as defined in the Merger Agreement), subject to providing Parent with the same matching rights as described above.

The Merger Agreement contains certain termination rights for Parent and the Company including, with respect to the Company, in the event that the Company makes a Recommendation Change with respect to a Superior Proposal and enters into a definitive agreement for such Superior Proposal to the extent permitted by the Merger Agreement and as described above. Parent can also terminate the Merger Agreement in the case of any Recommendation Change made by the Company, including in the case of an Intervening Event.

In connection with the Company’s termination of the Merger Agreement pursuant to any Recommendation Change with respect to a Superior Proposal and the Company’s execution of a definitive agreement for such Superior Proposal, the Company must pay or cause to be paid to Parent, concurrently with and as a condition to such termination, a termination fee equal to $21,865,000.

Representations, Warranties and Covenants

The Company, Parent and Merger Sub each made customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants by the Company to, subject to certain exceptions, conduct its business in the ordinary course during the interim period between the execution of the Merger Agreement and the consummation of the Merger.

A copy of the Merger Agreement has been included as an exhibit to this Current Report on Form 8-K to provide investors with information regarding its terms. It is not intended to provide any other factual information about the Company, Parent Merger Sub or any of their respective subsidiaries or affiliates. The representations, warranties and covenants contained in the Merger Agreement were made only for purposes of that agreement and as of specific dates; were made solely for the benefit of the parties to the Merger Agreement; may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures; may not have been intended to be statements of fact, but rather, as a method of allocating contractual risk and governing the contractual rights and relationships between the parties to the Merger Agreement; and may be subject to standards of materiality applicable to contracting parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company, Parent, Merger Sub or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s or Parent’s public disclosures. The holders of Company Common Stock and other investors are not third-party beneficiaries under the Merger Agreement.

The foregoing description of the Merger Agreement and the Financing Letter is only a summary and is qualified in its entirety by reference to the complete text of the Merger Agreement and the Financing Letter, which are filed as Exhibit 2.1 and Exhibit 10.1, respectively, to this Current Report on Form 8-K and incorporated herein by reference.