Exhibit 4.1
     
                         SECOND SUPPLEMENTAL INDENTURE (this
               "Second Supplemental Indenture") dated as of
               October 10, 1996, among TIME WARNER INC., a
               Delaware corporation (the "Company"), TW INC., 
               a Delaware corporation (the "Guarantor"), and
               THE CHASE MANHATTAN BANK (formerly known
               as Chemical Bank), a New York banking corporation,
               as trustee (the "Trustee").


          WHEREAS the Company has executed and delivered to the
Trustee an Indenture (the "Senior Indenture"), dated as of
January 15, 1993, providing for the issuance and sale by the
Company from time to time of its senior debt securities (the
"Securities"), which term shall include any Securities issued
under the Senior Indenture after the date hereof;

          WHEREAS the Company proposes in and by this Second
Supplemental Indenture to supplement and amend the Senior
Indenture in certain respects as it applies to Securities issued
thereunder;

          WHEREAS pursuant to an Amended and Restated Agreement
and Plan of Merger, dated as of September 22, 1995, as amended,
among the Guarantor, the Company, Turner Broadcasting System,
Inc. ("TBS"), Time Warner Acquisition Corp. and TW Acquisition
Corp., the Company and TBS will each merge with wholly owned
subsidiaries of the Guarantor (the "Mergers");

          WHEREAS Section 901(5) of the Senior Indenture permits
the Company, when authorized by a resolution of the Board of
Directors of the Company, and the Trustee, at any time and from
time to time, to enter into one or more indentures supplemental
to the Senior Indenture, in form satisfactory to the Trustee, for
the purpose of adding to the rights of the Holders of the
Securities;

          WHEREAS the Guarantor desires to unconditionally and
irrevocably guarantee the full and punctual payment of principal
of and interest on the Securities when due, whether at maturity,
by acceleration, by redemption or otherwise, and all other
monetary obligations of the Company under the Senior Indenture
(including obligations to the Trustee) and the Securities, and
the full and punctual performance within applicable grace periods
of all other 

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obligations of the Company under the Senior Indenture and the
Securities;

          WHEREAS the Guarantor desires to execute and deliver
this Second Supplemental Indenture in accordance with Article
Twelve of the First Supplemental Indenture dated as of June 15,
1993 (the "LYONs Supplemental Indenture"), between the Company
and the Trustee, pursuant to which the Company issued Liquid
Yield Option Notes due 2013 ("LYONs"), to provide, among other
things, that common stock of the Guarantor shall be deliverable
upon conversion of the LYONs and may be deliverable upon
redemption of the LYONs; and

          WHEREAS the Company and the Guarantor have requested
that the Trustee execute and deliver this Second Supplemental
Indenture and all requirements necessary to make this Second
Supplemental Indenture a valid instrument in accordance with its
terms and to make the guarantee provided for herein the valid
obligation of the Guarantor, and the execution and delivery of
this Second Supplemental Indenture has been duly authorized in
all respects.

          NOW THEREFORE, the Company, the Guarantor and the
Trustee hereby agree that the following Sections of this Second
Supplemental Indenture supplement the Senior Indenture and the
LYONs Supplemental Indenture, as applicable, with respect to
Securities issued thereunder:

          SECTION 1.  Definitions.  (a)  Capitalized terms used
herein and not defined herein have the meanings ascribed to such
terms in the Senior Indenture and the LYONs Indenture.

          (b)  Article One, Section 101, of the Senior Indenture
and the LYONs Supplemental Indenture is hereby supplemented,
solely with respect to the LYONs, to amend the definition of
"Common Stock" to read in its entirety as follows:

          "Common Stock" means the common stock, par value
     $.01 per share, of the Guarantor.

          SECTION 2.  The Guarantee.  (a) The Guarantor
irrevocably and unconditionally guarantees (the "Guarantee"), to
each Holder of Securities (including each 

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Holder of Securities issued under the Senior Indenture after the
date of this Second Supplemental Indenture) and to the Trustee
and its successors and assigns, (i) the full and punctual payment
of principal of and interest on the Securities when due, whether
at maturity, by acceleration, by redemption or otherwise, and all
other monetary obligations of the Company under the Senior
Indenture (including obligations to the Trustee) and the
Securities and (ii) the full and punctual performance within
applicable grace periods of all other obligations of the Company
under the Senior Indenture and the Securities.

          (b)  The Guarantor further agrees that the Guarantee
constitutes a guarantee of payment, performance and compliance
and not merely of collection.

          (c)  The obligation of the Guarantor to make any
payment hereunder may be satisfied by causing the Company to make
such payment.

          (d)  The Guarantor also agrees to pay any and all costs
and expenses (including reasonable attorneys' fees) incurred by
the Trustee or any Holder of Securities in enforcing any of their
respective rights under the Guarantee.

          SECTION 3.  Amendments to the LYONs Supplemental
Indenture.  (a)  Paragraph (d)(vi) of Section 1110 of Article
Eleven of the Senior Indenture is hereby amended, solely with
respect to the LYONs Supplemental Indenture and the LYONs, to
read in its entirety as follows:

               "(iv) the receipt by the Trustee of an
     Officers' Certificate and an Opinion of Counsel each
     stating that the terms of the delivery of the Common
     Stock are in conformity with this Indenture and that
     the shares of Common Stock to be issued by the
     Guarantor in payment of the Purchase Price in respect
     of LYONs have been duly authorized and, when issued and
     delivered pursuant to the terms of this Indenture in
     payment of the Purchase Price in respect of the LYONs,
     will be validly issued, fully paid and nonassessable
     and shall be free of any preemptive rights and any lien
     or adverse claim (provided that such Opinion of Counsel
     may state that, insofar as it relates to the absence of
     such preemptive rights, liens and adverse claims, it is
     given upon the best knowledge of such counsel), and, in
     the case of such Officers' Certificate, that conditions

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     (i), (ii) and (iii) above have been satisfied and, in the
     case of such Opinion of Counsel, that the
     conditions set forth in clauses (ii) and (iii) above 
     have been satisfied."

          (b)  Paragraph (f) of Section 1110 of Article Eleven of
the Senior Indenture is hereby amended, solely with respect to
the LYONs Supplemental Indenture and the LYONs, to read in its
entirety as follows:

               "(f)  Covenants of the Guarantor.  The
     Guarantor hereby warrants that all shares of Common
     Stock delivered in payment, in whole or in part, of the
     Purchase Price upon purchase of a LYON pursuant to this
     Section 1110 shall be newly issued shares or treasury
     shares, shall be duly and validly issued, fully paid
     and nonassessable and shall be free from preemptive
     rights and free of any lien or adverse claim.

               The Guarantor shall use its best efforts to
     list or cause to have quoted any shares of Common Stock
     to be issued pursuant to this Section 1110 on the
     principal national securities exchange or over-the-counter
     or other domestic market on which any other
     shares of the Common Stock are then listed or quoted. 
     The Guarantor will promptly inform the Trustee in
     writing of any such listing."

          (c)  Article Twelve of the Senior Indenture is hereby
amended, solely with respect to the LYONs Supplemental Indenture
and the LYONs, to read in its entirety as follows:


                       "ARTICLE VIII
                             
                        Conversion
                             
               Article Twelve of the Senior Indenture is
     hereby amended, solely with respect to a series of
     Securities that consists of LYONs, to delete Sections
     1201 through 1212 and to add in their place the
     following Sections 1201 through 1219:

               Section 1201.  Conversion Privilege.  A
     Holder of a LYON may convert such LYON into Common
     Stock at any time during the period stated in paragraph
     7 of the LYONs.  The number of shares of Common Stock

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     issuable upon conversion of a LYON per $1,000 of
     Principal Amount at Maturity thereof (the "Conversion
     Rate") shall be that set forth in paragraph 7 of the
     LYONs as the same may have been adjusted (i) for events
     occurring prior to the effective time of the Mergers,
     with respect to the common stock of the Company into
     which the LYONs were convertible prior to such
     effective time and (ii) for events occurring after the
     effective time of the Mergers, with respect to the
     Common Stock as set forth herein.

               A Holder may convert a portion of the
     Principal Amount of a LYON if the portion is $1,000 or
     an integral multiple of $1,000.  Provisions of this
     Indenture that apply to conversion of all of a LYON
     also apply to conversion of a portion of a LYON.

               LYONs in respect of which a Purchase Notice
     or Change in Control Purchase Notice, as the case may
     be, has been given by the Holder thereof may not be
     converted pursuant to this Article Twelve on or after
     the date of the delivery of such Purchase Notice or
     Change in Control Purchase Notice, as the case may be,
     unless such Purchase Notice or Change in Control
     Purchase Notice, as the case may be, has first been
     validly withdrawn and, in any event, the right to
     convert a LYON pursuant to this Article Twelve lapses,
     upon purchase of such LYON by the Company (including
     pursuant to any purchase or redemption pursuant to
     Article Eleven).

               Section 1202.  Conversion Procedure.  (a)  To
     convert a LYON a Holder must satisfy the requirements
     in paragraph 7 of the LYONs.  The date on which the
     Holder satisfies all those requirements is the
     conversion date (the "Conversion Date").  The Company
     shall deliver to the Holder no later than the seventh
     Business Day following the Conversion Date, through the
     Conversion Agent, a certificate for the number of
     shares of Common Stock issuable upon the conversion and
     cash in lieu of any fractional share determined
     pursuant to Section 1203.

               Delivery of such certificate and delivery of
     any check for any cash in lieu of fractional interests
     therein may be delayed for a reasonable time at the
     request of the Company in order to effectuate the
     calculation of adjustments of the Conversion Rate

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     pursuant to this Article Twelve.  If, between any
     Conversion Date and the related date of delivery of
     shares of Common Stock, such shares shall cease to have
     any or certain rights, the Holder entitled to receive
     such shares shall be entitled only to receive such
     shares as so modified and any proceeds received thereon
     on or after such Conversion Date, and the Company, the
     Trustee and the Conversion Agent shall not be otherwise
     liable with respect to the modification, from such
     Conversion Date to the date of such delivery, of such
     shares of Common Stock.

               The Person entitled to receive Common Stock
     issuable upon conversion shall be treated as a
     stockholder of record of the Guarantor on and after the
     Conversion Date; provided, however, that no surrender
     of a LYON on any date when the stock transfer books of
     the Guarantor shall be closed shall be effective to
     constitute the Person or Persons entitled to receive
     the shares of Common Stock upon such conversion as the
     record holder or holders of such shares of Common Stock
     on such date, but such surrender shall be effective to
     constitute the Person or Persons entitled to receive
     such shares of Common Stock as the record holder or
     holders thereof for all purposes at the close of
     business on the next succeeding day on which such stock
     transfer books are open; provided, further, however,
     that such conversion shall be at the Conversion Rate in
     effect on the date that such LYON shall have been
     surrendered for conversion, as if the stock transfer
     books of the Guarantor had not been closed.  Upon
     conversion of a LYON, such Person shall no longer be a
     Holder of such LYON.

               No payment or adjustment will be made for
     dividends on, or other distributions with respect to,
     any Common Stock except as provided in this Article
     Twelve.  On conversion of a LYON, that portion of
     accrued OID attributable to the period from the Issue
     Date of the LYON through the Conversion Date with
     respect to the converted LYON shall not be cancelled,
     extinguished or forfeited, but rather shall be deemed
     to be paid in full to the Holder thereof through
     delivery of the Common Stock (together with the cash
     payment, if any, in lieu of fractional shares) in
     exchange for the LYON being converted pursuant to the
     provisions hereof.

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               If the Holder converts more than one LYON at
     the same time, the number of shares of Common Stock
     issuable upon the conversion shall be computed based on
     the total Principal Amount at Maturity of the LYONs
     converted.

               Upon surrender of a LYON that is converted in
     part, the Company shall execute, and the Trustee shall
     authenticate and deliver to the Holder, a new LYON in
     an authorized denomination equal in Principal Amount at
     Maturity to the unconverted portion of the LYON
     surrendered.

               If the last day on which a LYON may be
     converted is not a Business Day in a place where the
     Conversion Agent is located, the LYON may be
     surrendered to such Conversion Agent on the next
     succeeding day that is a Business Day.

               (b)  Notwithstanding anything to the contrary
     contained herein, in the event the Company shall have
     rescinded a redemption of LYONs pursuant to Section
     1109 hereof, any Holder of LYONs that shall have
     surrendered LYONs for conversion following the day on
     which notice of the subsequently rescinded redemption
     shall have been given but prior to the date of the
     mailing of the notice of rescission required by Section
     1109 hereof (a "Converting Holder") may rescind the
     conversion of such LYONs surrendered for conversion by
     (i) properly completing a form prescribed by the
     Company and mailed to Holders of LYONs (including
     Converting Holders) with the Company's notice of
     rescission, which form shall provide for the
     certification by any Converting Holder rescinding a
     conversion on behalf of any beneficial owner (within
     the meaning of Rule 13d-3 under the Exchange Act) of
     LYONs that the beneficial ownership (within the meaning
     of such Rule) of such LYONs shall not have changed from
     the date on which such LYONs were surrendered for
     conversion to the date of such certification and (ii)
     delivering such form to the Company no later than the
     close of business on that date which is fifteen Trading
     Days following the date of the mailing of the Company's
     notice of rescission.  The delivery of such form by a
     Converting Holder shall be accompanied by (x) any
     certificates representing shares of Common Stock issued
     to such Converting Holder upon a conversion of LYONs
     that shall be rescinded by the proper delivery of such

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     form (the "Surrendered Common Stock"), (y) any
     securities, evidences of indebtedness or assets (other
     than cash) distributed by the Guarantor to such
     Converting Holder by reason of such Converting Holder
     being a record holder of Surrendered Common Stock and
     (z) payment in New York Clearing House funds or other
     funds acceptable to the Company of an amount equal to
     the sum of (I) any cash such Converting Holder may have
     received in lieu of the issuance of fractional
     Surrendered Common Stock and (II) any cash paid or
     payable by the Guarantor to such Converting Holder by
     reason of such Converting Holder being a record holder
     of Surrendered Common Stock.  Upon receipt by the
     Company of any such form properly completed by a
     Converting Holder and any certificates, securities,
     evidences of indebtedness, assets or cash payments
     required to be returned by such Converting Holder to
     the Company as set forth above, the Guarantor shall
     instruct the transfer agent or agents for shares of
     Common Stock or other securities to cancel any
     certificates representing Surrendered Common Stock
     (which Surrendered Common Stock shall be deposited in
     the treasury of the Guarantor) and the Company shall
     instruct the Security Registrar to reissue certificates
     representing LYONs to such Converting Holder (which
     LYONs shall be deemed to have been Outstanding at all
     times during the period following their surrender for
     conversion).  The Company shall, as promptly as
     practicable, and in no event more than five Trading
     Days following the receipt of any such properly
     completed form and any such certificates, securities,
     evidences of indebtedness, assets or cash payments
     required to be so returned, pay to the Holder of LYONs
     surrendered to the Company pursuant to a rescinded
     conversion or as otherwise directed by such Holder any
     interest paid or other payment made to Holders of LYONs
     during the period from the time such LYONs shall have
     been surrendered for conversion to the rescission of
     such conversion.  All questions as to the validity,
     form, eligibility (including time of receipt) and
     acceptance of any form submitted to the Company to
     rescind the conversion of LYONs, including questions as
     to the proper completion or execution of any such form
     or any certification contained therein, shall be
     resolved by the Company, whose determination shall be
     final and binding.

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               Section 1203.  Fractional Shares.  The
     Guarantor will not deliver a fractional share of Common
     Stock upon conversion of a LYON.  Instead, the Company
     will deliver cash for the current market value of the
     fractional share.  The current market value of a
     fractional share shall be determined to the nearest
     1/1,000th of a share by multiplying the Sale Price on
     the last Trading Day prior to the Conversion Date of a
     full share by the fractional amount and rounding the
     product to the nearest whole cent.

               Section 1204.  Taxes on Conversion.  If a
     Holder converts a LYON, the Company shall pay any
     documentary, stamp or similar issue or transfer tax due
     on the issue of shares of Common Stock upon such
     conversion.  However, the Holder shall pay any such tax
     which is due because the Holder requests the shares to
     be issued in a name other than the Holder's name.  The
     Conversion Agent may refuse to deliver the certificates
     representing the Common Stock being issued in a name
     other than the Holder's name until the Conversion Agent
     receives a sum sufficient to pay any tax which will be
     due because the shares are to be issued in a name other
     than the Holder's name.  Nothing herein shall preclude
     any tax withholding required by law or regulations.

               Section 1205.  Guarantor to Provide Stock. 
     The Guarantor shall, from time to time as may be
     necessary, reserve out of its authorized but unissued
     Common Stock a sufficient number of shares of Common
     Stock to permit the conversion of the LYONs for shares
     of Common Stock.

               All shares of Common Stock delivered upon
     conversion of the LYONs shall be newly issued shares or
     treasury shares, shall be duly and validly issued and
     fully paid and nonassessable and shall be free from
     preemptive rights and free of any lien or adverse
     claim.

               The Guarantor will endeavor promptly to
     comply with all Federal and state securities laws
     regulating the offer and delivery of shares of Common
     Stock upon conversion of LYONs, if any, and will list
     or cause to have quoted such shares of Common Stock on
     each national securities exchange or in the over-the-counter
     market or such other market on which the Common

<PAGE>

     Stock is then listed or quoted.  The Guarantor will
     promptly inform the Trustee of any such listing.

               Section 1206.  Adjustment for Change in
     Capital Stock.  If, after the Issue Date, the
     Guarantor:

               (1) pays a dividend or makes a distribution
          on its Common Stock in shares of its Common Stock;

               (2) subdivides its outstanding shares of
          Common Stock into a greater number of shares;

               (3) combines its outstanding shares of Common
          Stock into a smaller number of shares;

               (4) pays a dividend or makes a distribution
          on its Common Stock in shares of its Capital Stock
          (other than Common Stock or rights, warrants or
          options for its Capital Stock); or

               (5) issues by reclassification of its Common
          Stock any shares of its Capital Stock (other than
          rights, warrants or options for its Capital
          Stock),

     then the conversion privilege and the Conversion Rate
     in effect immediately prior to such action shall be
     adjusted so that the Holder of a LYON thereafter
     converted may receive the number of shares or other
     units of Capital Stock of the Guarantor which such
     Holder would have owned immediately following such
     action if such Holder had converted the LYON
     immediately prior to such action.

               The adjustment shall become effective
     retroactively immediately after the record date in the
     case of a dividend or distribution and immediately
     after the effective date in the case of a subdivision,
     combination or reclassification.

               If after an adjustment a Holder of a LYON
     upon conversion of such LYON may receive shares or
     other units of two or more classes or series of Capital
     Stock of the Guarantor, the Conversion Rate shall
     thereafter be subject to adjustment upon the occurrence
     of an action taken with respect to any such class or
     series of Capital Stock as is contemplated by this

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     Article Twelve with respect to the Common Stock, on
     terms comparable to those applicable to Common Stock in
     this Article Twelve.  For the purposes of this Section
     1206, each Holder shall be deemed to have failed to
     exercise any right to elect the kind or amount of
     securities receivable upon the payment of any such
     dividend, subdivision, combination, conversion or
     reclassification (provided that if the kind or amount
     of securities receivable upon such dividend,
     subdivision, combination, conversion or
     reclassification is not the same for each nonelecting
     share or other unit, then the kind and amount of
     property receivable upon such dividend, subdivision,
     combination, conversion, reclassification,
     consolidation, merger or share exchange for each
     nonelecting share shall be deemed to be the kind and
     amount so receivable per share or other unit by a
     plurality of the nonelecting shares or other units).

               Section 1207.  Adjustment for Rights Issue. 
     If the Guarantor distributes any rights, warrants or
     options to all holders of its Common Stock (excluding
     dividends for which adjustment is made pursuant to
     Section 1206) entitling them, for a period expiring
     within 60 days after the record date for such
     distribution, to purchase shares of Common Stock at a
     price per share less than the Sale Price as of the Time
     of Determination, the Conversion Rate shall be adjusted
     in accordance with the formula:

                               (O + N)     
                R' = R x    O + (N x P)
                                   M

     where:

          R' = the adjusted Conversion Rate.

          R  = the current Conversion Rate.

          O  = the number of shares of Common Stock
               outstanding on the record date for the
               distribution to which this Section 1207 is
               being applied.

          N  = the number of additional shares of Common
               Stock offered pursuant to such distribution.

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          P  = the offering price per share of such
               additional shares.

          M  = the Average Sale Price, minus, in the case of
               (i) a distribution to which Section 1206(4)
               applies or (ii) a distribution to which
               Section 1208 applies, for which, in each
               case, (x) the record date shall occur on or
               before the record date for the distribution
               to which this Section 1207 applies and (y)
               the Ex-Dividend Time shall occur on or after
               the date of the Time of Determination for the
               distribution to which this Section 1207
               applies, the fair market value (on the record
               date for the distribution to which this
               Section 1207 applies) of:

                         (1) the Capital Stock of the
                    Guarantor distributed in respect of each
                    share of Common Stock in such
                    Section 1206(4) distribution, and

                         (2) the assets of the Guarantor or
                    debt securities or any rights, warrants
                    or options to purchase securities of the
                    Guarantor distributed in respect of each
                    share of Common Stock in such
                    Section 1208 distribution.

     The Board of Directors of the Guarantor shall determine
     fair market values for the purposes of this Section 1207.

               The adjustment shall become effective
     immediately after the record date for the determination
     of shareholders entitled to receive the rights,
     warrants or options to which this Section 1207 applies. 
     If all the shares of Common Stock subject to such
     rights, warrants or options have not been issued when
     such rights, warrants or options expire, then the
     Conversion Rate shall promptly be readjusted to the
     Conversion Rate which would then be in effect had the
     adjustment upon the issuance of such rights, warrants
     or options been made on the basis of the actual number
     of shares of Common Stock issued upon the exercise of
     such rights, warrants or options.

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               No adjustment shall be made under this
     Section 1207 if the application of the formula stated
     above in this Section 1207 would result in a value of
     R' that is equal to or less than the value of R.

               Section 1208.  Adjustment for Other
     Distributions.  If the Guarantor distributes to all
     holders of its Common Stock any of its assets or debt
     securities or any rights, warrants or options to
     purchase securities of the Guarantor (including
     securities or cash, but excluding (i) distributions of
     Capital Stock referred to in Section 1206 and
     distributions of rights, warrants or options referred
     to in Section 1207 and (ii) cash dividends and
     distributions, if any, paid from time to time by the
     Guarantor that do not constitute Extraordinary Cash
     Dividends), the Conversion Rate shall be adjusted,
     subject to the provisions of the last paragraph of this
     Section 1208, in accordance with the formula:

                              M 
                    R' = R x M-F
     where:

          R' = the adjusted Conversion Rate.

          R  = the current Conversion Rate.

          M  = the Average Sale Price, minus, in the case of
               a distribution to which Section 1206(4)
               applies for which (i) the record date shall
               occur on or before the record date for the
               distribution to which this Section 1208
               applies and (ii) the Ex-Dividend Time shall
               occur on or after the date of the Time of
               Determination for the distribution to which
               this Section 1208 applies, the fair market
               value (on the record date for the
               distribution to which this Section 1208
               applies) of any Capital Stock of the
               Guarantor distributed in respect of each
               share of Common Stock in such Section 1206(4)
               distribution.

          F  = the fair market value (on the record date for
               the distribution to which this Section 1208
               applies) of the assets, securities, rights,

<PAGE>

               warrants or options to be distributed in
               respect of each share of Common Stock in the
               distribution to which this Section 1208 is
               being applied (including, in the case of cash
               dividends or other cash distributions giving
               rise to an adjustment, all such cash
               distributed concurrently).

     The Board of Directors of the Guarantor shall determine
     fair market values for the purpose of this Section
     1208.

               The adjustment shall become effective
     immediately after the record date for the determination
     of shareholders entitled to receive the distribution to
     which this Section 1208 applies.

               For purposes of this Section 1208, the term
     "Extraordinary Cash Dividend" shall mean any cash
     dividend with respect to the Common Stock the amount of
     which, together with the aggregate amount of such cash
     dividends on the Common Stock to be aggregated with
     such cash dividend in accordance with the provisions of
     this paragraph, equals or exceeds the threshold
     percentages set forth in item (a) or (b) below:

               (a)  If, upon the date prior to the Ex-
          Dividend Time with respect to a cash dividend on
          the Common Stock, the aggregate amount of such
          cash dividend together with the amounts of all
          cash dividends on Common Stock with Ex-Dividend
          Times occurring in the 85 consecutive day period
          ending on the date prior to the Ex-Dividend Time
          with respect to the cash dividend to which this
          provision is being applied equals or exceeds on a
          per share basis 12.5% of the average of the Sale
          Prices during the period beginning on the date
          after the first such Ex-Dividend Time in such
          period and ending on the date prior to the Ex-
          Dividend Time with respect to the cash dividend to
          which this provision is being applied (except that
          if no other cash dividend has had an Ex-Dividend
          Time occurring in such period, the period for
          calculating the average of the Sale Prices shall
          be the period commencing 85 days prior to the date
          prior to the Ex-Dividend Time with respect to the
          cash dividend to which this provision is being
          applied), such cash dividend together with each

<PAGE>

          other cash dividend with an Ex-Dividend Time
          occurring in such 85 day period shall be deemed to
          be an Extraordinary Cash Dividend and for purposes
          of applying the formula set forth above in this
          Section 1208, the value of "F" shall be equal to
          (w) the aggregate amount of such cash dividend
          together with the amounts of the other cash
          dividends with Ex-Dividend Times occurring in such
          period minus (x) the aggregate amount of such
          other cash dividends with Ex-Dividend Times
          occurring in such period for which a prior
          adjustment in the Conversion Rate was previously
          made under this Section 1208.

               (b)  If, upon the date prior to the Ex-
          Dividend Time with respect to a cash dividend on
          the Common Stock, the aggregate amount of such
          cash dividend together with the amounts of all
          cash dividends on Common Stock with Ex-Dividend
          Times occurring in the 365 consecutive day period
          ending on the date prior to the Ex-Dividend Time
          with respect to the cash dividend to which this
          provision is being applied equals or exceeds on a
          per share basis 25% of the average of the Sale
          Prices during the period beginning on the date
          after the first such Ex-Dividend Time in such
          period and ending on the date prior to the Ex-
          Dividend Time with respect to the cash dividend to
          which this provision is being applied (except that
          if no other cash dividend has had an Ex-Dividend
          Time occurring in such period, the period for
          calculating the average of the Quoted Prices shall
          be the period commencing 365 days prior to the
          date prior to the Ex-Dividend Time with respect to
          the cash dividend to which this provision is being
          applied), such cash dividend together with each
          other cash dividend with an Ex-Dividend Time
          occurring in such 365-day period shall be deemed
          to be an Extraordinary Cash Dividend and for
          purposes of applying the formula set forth above
          in this Section 1208, the value of "F" shall be
          equal to (y) the aggregate amount of such cash
          dividend together with the amounts of the other
          cash dividends with Ex-Dividend Times occurring in
          such period minus (z) the aggregate amount of such
          other cash dividends with Ex-Dividend Times
          occurring in such period for which a prior

<PAGE>

          adjustment in the Conversion Rate was previously
          made under this Section 1208.

               In making the determinations required by
          items (a) and (b) above, the amount of cash
          dividends paid on a per share basis and the
          average of the Sale Prices, in each case during
          the period specified in item (a) or (b) above, as
          applicable, shall be appropriately adjusted to
          reflect the occurrence during such period of any
          event described in Section 1206.

               In the event that, with respect to any
     distribution to which this Section 1208 would otherwise
     apply, "M" minus "F" as defined in the above formula is
     less than $1.00 or "F" is equal to or greater than "M",
     then the adjustment provided by this Section 1208 shall
     not be made and in lieu thereof the provisions of
     Section 1214 shall apply to such distribution.

               Section 1209.  When Adjustment May Be
     Deferred.  No adjustment in the Conversion Rate need be
     made unless the adjustment would require an increase or
     decrease of at least 1% (e.g., if the Conversion Rate
     is 4, an increase or decrease of .04 (1% of 4)) in the
     Conversion Rate.  Any adjustments that are not made
     shall be carried forward and taken into account in any
     subsequent adjustment.

               All calculations under this Article Twelve
     shall be made to the nearest cent or to the nearest
     1/1,000th of a share, as the case may be, with one-half
     of a cent and 5/10,000ths of a share being rounded
     upwards.

               Section 1210.  When No Adjustment Required. 
     No adjustment need be made for a transaction referred
     to in Section 1206, 1207, 1208 or 1214 if Holders are
     to participate in the transaction on a basis and with
     notice that the Board of Directors of the Guarantor
     determines to be fair and appropriate in light of the
     basis and notice on which holders of Common Stock
     participate in the transaction.  Such participation by
     Holders may include participation upon conversion
     provided that an adjustment shall be made at such time
     as the Holders are no longer entitled to participate.

<PAGE>

               No adjustment need be made for rights to
     purchase Common Stock pursuant to a Guarantor plan for
     reinvestment of dividends or interest.

               No adjustment need be made for a change in
     the par value or no par value of the Common Stock.

               To the extent the LYONs become convertible
     into cash pursuant to the terms of Section 1208 or
     1214, no adjustment need be made thereafter as to the
     cash.  Interest will not accrue on the cash.

               Notwithstanding any provision to the contrary
     in this Indenture, no adjustment shall be made in the
     Conversion Rate to the extent, but only to the extent,
     such adjustment results in the following quotient being
     less than the par value of the Common Stock:  (i) the
     Issue Price plus accrued Original Issue Discount as of
     the date such adjustment would otherwise be effective
     divided by (ii) the Conversion Rate as so adjusted.

               Section 1211.  Notice of Adjustment. 
     Whenever the Conversion Rate is adjusted, the Guarantor
     shall file with the Trustee and the Conversion Agent a
     notice of such adjustment and a certificate from the
     Guarantor's independent public  accountants briefly
     stating the facts requiring the adjustment and the
     manner of computing it.  The Conversion Agent will
     promptly mail such notice to Holders of LYONs at the
     Company's expense.  The certificate shall be conclusive
     evidence that the adjustment is correct.  Neither the
     Trustee nor any Conversion Agent shall be under any
     duty or responsibility with respect to any such
     certificate except to exhibit the same to any Holder
     desiring inspection thereof.

               Section 1212.  Voluntary Increase.  The
     Company from time to time may increase the Conversion
     Rate by any amount and for any period of time (provided
     that such period is not less than 20 Business Days). 
     Whenever the Conversion Rate is increased, the Company
     shall mail to Holders and file with the Trustee and the
     Conversion Agent a notice of the increase.  The Company
     shall mail the notice at least 15 days before the date
     the increased Conversion Rate takes effect.  The notice
     shall state the increased Conversion Rate and the
     period it will be in effect.

<PAGE>

               A voluntary increase of the Conversion Rate
     does not change or adjust the Conversion Rate otherwise
     in effect for purposes of Section 1206, 1207 or 1208.

               Section 1213.  Notice of Certain
     Transactions.  If:

               (1) the Company or the Guarantor takes any
          action that would require an adjustment in the
          Conversion Rate pursuant to Section 1206, 1207 or
          1208 (unless no adjustment is to occur pursuant to
          Section 1210); or

               (2) the Company or the Guarantor takes any
          action that would require a supplemental indenture
          pursuant to Section 1214; or

               (3) there is a liquidation or dissolution of
          the Company or the Guarantor;

     then the Company shall mail to Holders and file with
     the Trustee and the Conversion Agent a notice stating
     the proposed record date for a dividend or distribution
     or the proposed effective date of a subdivision,
     combination, reclassification, consolidation, merger,
     binding share exchange, transfer, liquidation or
     dissolution.  The Company shall file and mail the
     notice at least 15 days before such date.  Failure to
     file or mail the notice or any defect in it shall not
     affect the validity of the transaction.

               Section 1214.  Reorganization of Guarantor;
     Special Distributions.  If the Guarantor is a party to
     a transaction subject to Section 801 (other than a sale
     of all or substantially all of the assets of the
     Guarantor in a transaction in which the holders of
     Common Stock immediately prior to such transaction do
     not receive securities, cash or other assets of the
     Guarantor or of any other person) or a merger or
     binding share exchange which reclassifies or changes
     its outstanding Common Stock, the Person obligated to
     deliver securities, cash or other assets upon
     conversion of LYONs shall enter into a supplemental
     indenture.  If the issuer of securities deliverable
     upon conversion of LYONs is an Affiliate of the
     successor Guarantor, that issuer shall join in the
     supplemental indenture.

<PAGE>

               The supplemental indenture referred to above
     shall provide that the Holder of a LYON may convert it
     into the kind and amount of securities, cash or other
     assets which such Holder would have received
     immediately after the consolidation, merger, binding
     share exchange or transfer if such Holder had converted
     the LYON immediately before the effective date of the
     transaction, assuming (to the extent applicable) that
     such Holder (i) was not a constituent person or an
     Affiliate of a constituent person to such transaction;
     (ii) made no election with respect thereto; and (iii)
     was treated alike with the plurality of non-electing
     Holders.  The supplemental indenture referred to above
     shall provide for adjustments which shall be as nearly
     equivalent as may be practical to the adjustments
     provided for in this Article Twelve.  The successor to
     the Guarantor shall mail to Holders a notice briefly
     describing the supplemental indenture.

               If this Section applies, neither Section 1206
     nor 1207 applies.

               If the Guarantor makes a distribution to all
     holders of its Common Stock of any of its assets, or
     debt securities or any rights, warrants or options to
     purchase securities of the Guarantor that, but for the
     provisions of the last paragraph of Section 1208, would
     otherwise result in an adjustment in the Conversion
     Rate pursuant to the provisions of Section 1208, then,
     from and after the record date for determining the
     holders of Common Stock entitled to receive the
     distribution, a Holder that converts a LYON in
     accordance with the provisions of this Indenture shall
     upon such conversion be entitled to receive in addition
     to the shares of Common Stock into which the LYON is
     convertible, the kind and amount of securities, cash or
     other assets comprising the distribution that such
     Holder would have received if such Holder had converted
     the LYON immediately prior to the record date for
     determining the holders of Common Stock entitled to
     receive the distribution.

               Section 1215.  Guarantor Determination Final. 
     Any determination that the Guarantor or the Board of
     Directors of the Guarantor makes pursuant to this
     Article Twelve is conclusive.

<PAGE>

               Section 1216.  Trustee's Adjustment
     Disclaimer.  The Trustee has no duty to determine when
     an adjustment under this Article Twelve should be made,
     how it should be made or what it should be.  The
     Trustee has no duty to determine whether a supplemental
     indenture under Section 1214 need be entered into or
     whether any provisions of any supplemental indenture
     are correct.  The Trustee shall not be accountable for
     and makes no representation as to the validity or value
     of any securities or assets issued upon conversion of
     LYONs.  The Trustee shall not be responsible for either
     the Company's or the Guarantor's failure to comply with
     this Article Twelve.  Each Conversion Agent (other than
     the Company or the Guarantor or an Affiliate of the
     Company or the Guarantor) shall have the same
     protection under this Section 1216 as the Trustee.

               Section 1217.  Simultaneous Adjustments.  If
     this Article Twelve requires adjustments to the
     Conversion Rate under more than one of Section 1206(4),
     1207 or 1208, and the record dates for the
     distributions giving rise to such adjustments shall
     occur on the same date, then such adjustments shall be
     made by applying, first, the provisions of Section
     1206, second, the provisions of Section 1208 and,
     third, the provisions of Section 1207.

               Section 1218.  Successive Adjustments.  After
     an adjustment to the Conversion Rate under this Article
     Twelve, any subsequent event requiring an adjustment
     under this Article Twelve shall cause an adjustment to
     the Conversion Rate as so adjusted.

               Section 1219.  Cancellation of Security. 
     Upon receipt by the Trustee of LYONs delivered to the
     Conversion Agent for conversion under this Article
     Twelve, the Trustee shall cancel and dispose of the
     same as provided in Section 309."

          SECTION 4.  Conversion Rate.  The Guarantor and the
Company hereby represent that no adjustment to the Conversion
Rate is required under Article Twelve as a result of the Merger.

          SECTION 5.  Reports.  The Guarantor shall file with the
Trustee, and transmit to Holders, such information, documents and
other reports, and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the 

<PAGE>

times and in the manner provided pursuant to such Act; provided
that any such information, documents or reports required to be
filed with the Commission pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 shall be filed with the Trustee
within 15 days after the same is so required to be filed with the
Commission.

          SECTION 6.  This Second Supplemental Indenture.  This
Second Supplemental Indenture shall be construed as supplemental
to the Senior Indenture and shall form a part of it, and the
Senior Indenture is hereby incorporated by reference herein and
each is hereby ratified, approved and confirmed.

          SECTION 7.  GOVERNING LAW.  THIS SECOND SUPPLEMENTAL
INDENTURE SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

          SECTION 8.  Counterparts.  This Second Supplemental
Indenture may be executed in two or more counterparts, each of
which shall constitute an original, but all of which when taken
together shall constitute but one instrument.

          SECTION 9.  Headings.  The headings of this Second
Supplemental Indenture are for reference only and shall not limit
or otherwise affect the meaning hereof.

          SECTION 10.  Trustee Not Responsible for Recitals.  The
recitals herein contained are made by the Company and the
Guarantor, and not by the Trustee, and the Trustee assumes no
responsibility for the correctness thereof.  The Trustee shall
have no responsibility whatsoever for or in respect of the
validity or sufficiency of this Second Supplemental Indenture.

          SECTION 11.  Separability.  In case any one or more of
the provisions contained in this Second Supplemental Indenture or
in the Securities shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other
provisions of this Second Supplemental Indenture or of the
Securities, but this Second Supplemental Indenture and the
Securities shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or
therein.

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this
Second Supplemental Indenture to be duly executed by their
respective authorized officers as of the date first written above.


                         TIME WARNER INC.,

                         by                          
                         Name:  Thomas W. McEnerney
                         Title: Vice President


                         TW INC.,

                         by                          
                         Name:  Thomas W. McEnerney
                         Title: Vice President


                         THE CHASE MANHATTAN BANK,
                              as Trustee,

                         by                            
                         Name:     Richard Lorenzen
                         Title:    Senior Trust Officer


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