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Icahn Claims Forest Labs Has Poison Pill Built Into License Pact

Forest Labs (NYSE: FRX) publicly filed a major licensing agreement that it entered into with Cypress Bioscience in 2004. That agreement contains a change of control provision that allows the license to be voided by Cypress if there is a change of control at Forest that is not approved in advance by the Forest board, irrespective of whether or not that change of control impairs Cypress. It seems to us that the only purpose for a provision like this is entrenchment at Forest. The provision affords no protections to Cypress, as the decision to trigger this provision that can have significant adverse consequences for Forest is solely based on a unilateral decision by the Forest Labs board itself. Accordingly, we believe that this provision was added at the insistence of Forest Labs, not Cypress, in an attempt to surreptitiously implement an anti-takeover measure.

Nearly two months ago, we requested documents from Forest Labs to determine whether Forest Labs has inserted these provisions in other licensing agreements in an effort to make itself "take-over proof". Forest refused this request and we filed a complaint in Delaware court. After weeks of fighting, including a trial, we finally were given 7 more agreements earlier this week. But under Delaware law in order to share this information with shareholders we need to either get court approval or the consent of Forest. Forest flatly refuses to let us tell other shareholders what those agreements say about a change of control.

As a result, we have gone back to the court to ask the court to allow us to inform shareholders about the terms of any change of control provisions in those agreements. Forest has been stalling and because of that stalling we might not have a court decision until just before the annual meeting on August 15, 2012. One thing is clear to us: Forest does not want the stockholders to know this information.

In addition, Forest is insisting that we may not tell you about another issue relating to these license agreements. We think this issue is a smoking gun, and have also asked the court to rule that we should be allowed to disclose this information to stockholders before the annual meeting. Of course, we will share this information with you im

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