BUSINESS LOAN AGREEMENT

THIS BUSINESS LOAN AGREEMENT between Borrower and Lender for the purposes set forth herein as Borrowers obligation, is made and executed on the following terms and conditions. Borrower has received prior commercial loans from Lender or has applied to Lender for a commercial loan or loans and other financial accommodations, including those which may be described on any exhibit or schedule attached to this Agreement. All such loans and financial accommodations, together with all future loans and financial accommodations from Lender to Borrower, are referred to in this Agreement individually as the Loan and collectively as the Loans. Borrower understands and agrees that: (a) in granting, renewing, or extending any Loan, Lender is relying upon Borrowers representations, warranties, and agreements, as set forth in this Agreement; (b) the granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lenders sole judgment and discretion; and (c)all such Loans shall be and shall remain subject to the following terms and conditions of this Agreement.

TERM. This Agreement shall be effective as of October 18, 2005, and shall continue thereafter until all indebtedness of Borrower to Lender has been performed in full and the parties terminate this Agreement in writing.

LOAN PURPOSE. The purpose of this Loan is to allow Borrower to recapture cost of improvements to existing real estate facilities and restructure a portion of existing working capital debt.

DEFINITIONS. The following words shall have the following meanings when used in this Agreement. Terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code. All references to dollar amounts shall mean amounts in lawful money of the United States of America.

Agreement. The word Agreement means this Business Loan Agreement, as this Business Loan Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Business Loan Agreement from time to time.

Borrower. The word Borrower means EXACTECH, INC.. The word Borrower also includes, as applicable, all subsidiaries of Borrower as provided below in the paragraph titled Subsidiaries of Borrower.

CERCLA. The word CERCLA means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended.

Collateral. The word Collateral means and includes without limitation all property and assets granted as collateral security for a Loan, whether real or personal property, as described on attached Exhibit A, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel trust, factors lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, leases or consignment intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise.

Commitment Letter. The word Commitment Letter or Mortgage Loan Commitment means that certain revised Mortgage Loan Commitment dated October 18, 2005, and accepted by Borrower on October 18, 2005, the terms of which are incorporated herein by reference and which control to the extent inconsistent with this Loan Agreement, a copy of which is attached hereto as Exhibit B.

ERISA. The word ERISA means the Employee Retirement Income Security Act of 1974, as amended.

Events of Default. The word Events of Default mean and include with limitation any of the Events of Default set forth below in the section titled EVENTS OF DEFAULT.

Grantor. The word Grantor means and includes without limitation each and all of the persons or entitles granting a Security Interest in any Collateral for the indebtedness, including without limitation all Borrowers granting such a Security Interest.

Guarantor. The word Guarantor means and includes without limitation each and all of the guarantors, sureties, and accommodation parties in connection with any indebtedness.

Indebtedness. The word Indebtedness means and includes without limitation all Loans, together with all other

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obligations, debts and liabilities of Borrower to Lender, or any one or more of them, as well as all claims by Lender against Borrower, or any one or more of them; whether now or hereafter existing, voluntary or involuntary, due or not due, absolute or contingent, liquidated or unliquidated, whether Borrower may be liable Individually or jointly with others; whether the Borrower may be obligated as a guarantor, surely, or otherwise; whether recovery upon such indebtedness may be or hereafter may become barred by any statute of limitations; and whether such indebtedness may be or hereafter may become otherwise unenforceable.

Lender. The word Lender means Suntrust Bank, its successors and assigns.

Loan. The word Loan and Loans means and includes without limitation any and all commercial loans and financial accommodations from Lender to Borrower, whether now or hereafter existing, and however evidenced, including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule attached to this Agreement from time to time.

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