When It Rains It Pours - Replidyne Served

Replidyne (NASDAQ: RDYN) has been served with a Demand for Arbitration from MEDA Manufacturing alleging that the Company breached its obligations under a 2005 supply agreement. In April 2007, Replidyne provided notice to MEDA of its termination of the Supply Agreement in accordance with certain termination provisions, and believes that it did not have any obligations to MEDA under the Supply Agreement beyond May 2007.

The Demand seeks damages for breach of contract in the amount of approximately $2.3M plus interest and reimbursement of attorney fees and other costs incurred in proceedings. In addition, the Demand requests a judgment that Replidyne's termination of the Agreement was ineffective and that there is an obligation to continue to make annual minimum payment amounts of approximately $3.6M to MEDA remain in effect. If termination of the Agreement is determined to be ineffective Replidyne may also remain obligated additional future fees of up to approximately $2.6M (total approximating $$9.5M). Replidyne plans to vigorously defend itself against the allegations made in the Demand

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