Item 8.01 Other Events.

On May 13, 2008, Replidyne, Inc. (the “Company”) was served with a Demand for Arbitration (the “Demand”) from MEDA Manufacturing GmbH (f/k/a Tropon GmbH) (“MEDA”) alleging that the Company breached certain of its obligations under the Supply Agreement, dated April 4, 2005, between the Company and MEDA (the “Supply Agreement”). The Demand was further amended on July 3, 2008 (the “Amended Demand”).

On August 29, 2008, the Company and MEDA reached a settlement and mutual release agreement (the “Settlement Agreement”) under which the Company has agreed to pay MEDA €1, 400,000 (approximately $2.1 million at August 29, 2008) in full satisfaction of the claims set forth in the Amended Demand. Concurrent with the execution of the Settlement Agreement and in accordance with the terms of the Supply Agreement, the Company also paid MEDA €1,700,000 (approximately $2.5 million at August 29, 2008) with respect to the decontamination of its facility that had been used for the production of faropenem medoxomil-based drugs under the Supply Agreement.

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.