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                                 TRUST AGREEMENT

        TIME WARNER INC., (the "Company"), a Delaware corporation, and U.S.
TRUST COMPANY OF CALIFORNIA, N.A. (the "Trustee"), a national association, have
entered into this grantor trust agreement (the "Trust Agreement"), effective as
of April 1, 1998.

                                   WITNESSETH:

        WHEREAS, the Company from time to time enters into individual employment
agreements containing deferred compensation provisions (collectively, the
"Contracts") with certain senior officers and key personnel (the "Executives");

        WHEREAS, the Company has incurred and expects to incur financial
obligations under the terms of the Contracts with respect to the Executives and
their designated beneficiary(ies) or estates (the "Beneficiary(ies)");

        WHEREAS, the Company wishes to establish a trust (the "Trust") and to
contribute to the Trust assets to provide itself with a source of funds to
assist it in the meeting of its financial obligations under the Contracts, and
such assets shall be held therein, subject to the claims of the Company's
creditors in the event of the Company becoming Insolvent, as herein defined,
until paid to the Executives or Beneficiaries in such manner and at such times
as specified in the Contracts, or as otherwise provided herein;

        WHEREAS, it is the intention of the parties that the Trust shall
constitute an unfunded arrangement and shall not affect the status of the
Contracts as unfunded arrangements maintained for the purpose of providing
deferred compensation for the Executives;

        NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:

        SECTION 1.  ESTABLISHMENT OF TRUST

        (a) The Company hereby establishes this revocable Trust with the
Trustee, to be called the Time Warner Inc. Grantor Trust, which shall
automatically become irrevocable upon a "Change of Control", as defined in
Section 12 hereof, or upon such earlier date as may be determined by the General
Counsel of the Company by providing notice to the Trustee.

        (b) The Trust shall consist of an initial contribution of money and
other property made by the Company and acceptable to the Trustee, which shall
become the principal of the Trust to be held, administered and disposed of by
the Trustee as provided in this Trust Agreement.



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        (c) The Trust is intended to be a grantor trust, of which the Company is
the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended (the "Code'), and
shall be construed accordingly.

        (d) Subject to Sections 2(b) and 2(d), the principal of the Trust, and
any earnings thereon (the "Trust Fund") shall be held separate and apart from
the Company's other funds and shall be used exclusively for the uses and
purposes of the Executives and Beneficiaries and the Company's general creditors
as herein set forth. The Executives and Beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets of the Trust. Any
rights created under the Contracts and this Trust Agreement shall be mere
unsecured contractual rights of the Executives and Beneficiaries against the
Company. Any assets held by the Trust will be subject to the claims of the
Company's general creditors under federal and state law in the event the Company
is "Insolvent", as defined in Section 3(a) hereof. Except as contemplated by
Section 3(b)(3) (relating to the holding of Trust assets for the benefit of the
Company's creditors in the event the Company becomes Insolvent), the assets
allocated to the account maintained in respect of any Executive or Beneficiary
shall not be applied to or used for the benefit of any other Executive or
Beneficiary.

        (e) The Company, in its sole discretion, may at any time, or from time
to time, make additional deposits of cash or other property in trust with the
Trustee to augment the principal to be held, administered and disposed of by the
Trustee as provided in this Trust Agreement. Neither the Trustee nor any
Executive or Beneficiary shall have any right or duty under this Trust Agreement
to compel such additional deposits or determine the sufficiency thereof. The
Contracts require the Company to make contributions in specific amounts.

        (f) The Company shall at all times ensure that the Contracts and the
Trust shall have characteristics supporting a determination that the Contracts
are unfunded arrangements maintained for the purpose of providing deferred
compensation to a select group of management or highly compensated employees for
purposes of Title I of the Employee Retirement Income Security Act of 1974, as
amended.

        SECTION 2.  PAYMENTS TO EXECUTIVES AND BENEFICIARIES

        (a) Prior to a Change of Control, the entitlement of an Executive or
Beneficiary to deferred compensation under the Contracts shall be determined by
the Company or such party as it shall designate under the Contracts, and any
claim for such deferred compensation shall be determined in accordance with the
provisions of the Contracts. The Trustee or its agent shall not be required to
make any such determination prior to a Change of Control. Also prior to a Change
of Control, the Company shall be responsible for maintaining all records
contemplated under the Contracts and this Trust Agreement, and the Trustee shall
not be responsible in any respect for administering the Contracts. After a
Change of Control, all such entitlements shall be determined solely by the
Trustee or its agent based on the Payment Schedules as described in Section
2(e), and the Trustee or its agent shall be responsible for maintaining all
records contemplated under the Contracts and this Trust Agreement and for
administering those provisions of the Contracts relating

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to deferred compensation.

        (b) Prior to a Change of Control, the Company shall make payments of
deferred compensation directly to the Executives or Beneficiaries as they become
due under the terms of the Contracts. The Company shall notify the Trustee of
each amount of deferred compensation due at the time it becomes payable to an
Executive or Beneficiary and the Company shall be entitled to withdraw such
amount from the Trust Fund. After a Change of Control, all payments of deferred
compensation will be made directly to the Executives or Beneficiaries solely by
the Trustee or its agents out of Trust Fund assets.

        (c) Prior to a Change of Control, the Company shall make provision for
the reporting and withholding of any federal, state or local taxes that may be
required to be withheld with respect to the payment of the deferred compensation
due under the terms of the Contracts and shall pay amounts withheld to the
appropriate taxing authorities. After a Change of Control, the Trustee shall
make provision for the reporting and withholding of any such taxes that may be
required to be withheld with respect to the payment of such deferred
compensation and shall pay amounts withheld to the appropriate taxing
authorities or determine that such amounts have been reported, withheld and paid
by the Company. The Company shall cooperate with the Trustee in making such
determination.

        (d) The Company and the Trustee recognize that all economic activity of
the Trust, including but not limited to security transactions, the receipt of
dividends and other income as well as the payment of expenses, is economic
activity of the Company for tax purposes. Prior to a Change of Control, the
Company shall be entitled to withdraw from the Trust Fund an amount equal to
such tax liability incurred in accordance with the terms of the Contracts. After
a Change of Control, the Company shall be entitled to reimbursement from the
Trust for such tax liability to the extent not previously withdrawn pursuant to
the preceding sentence. Additionally, the Company shall be entitled to
reimbursement from the Trust for any out of pocket expenditures by the Company
which, pursuant to the terms of the Contracts, are obligations of the Trust.

        (e) Prior to a Change of Control, the Company shall deliver to the
Trustee a schedule (a "Payment Schedule") for each Executive whose deferred
compensation under a Contract may be paid from the Trust Fund after a Change of
Control. To the extent such information has not already been made available to
the Trustee in the Contracts or relevant excerpts thereof, or such other
documents as may be supplied to the Trustee from time to time, any of which may
constitute such Payment Schedule, the Payment Schedule shall:

               (1) specify the value of the Executive's deferred compensation
               under the Contract as of the most recent valuation date;

               (2) describe the events that must occur in order for the
               Executive's deferred compensation to become payable under the
               terms of the Contract;

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               (3) provide such instructions as will enable the Trustee to
               determine the amount of the Executive's deferred compensation as
               of the time it becomes payable under the terms of the Contract;

               (4) specify the form in which the Executive's deferred
               compensation is to be paid, as provided for or available under
               the Contract (including, if such form is not a lump sum, the
               frequency of such payments);

               (5) specify the Term Date (as defined in the Contract) or other
               time for commencement of payment of the Executive's deferred
               compensation under the Contract; and

               (6) specify the name, address and social security number of the
               Executive as well as the name, address, social security number
               and relation to the Executive of each Beneficiary.

        (f) Prior to a Change of Control, the Company may from time to time
substitute a new Payment Schedule by delivering a new or amended Payment
Schedule to the Trustee. Upon receipt of such a new or amended Payment Schedule,
the previous Payment Schedule shall be deemed revoked. Prior to a Change of
Control, any Payment Schedule previously filed with the Trustee may be revoked
by the Company by filing notice of such revocation with the Trustee without
delivering a new or amended Payment Schedule to the Trustee. No Payment Schedule
may be amended or revoked after a Change of Control. Notwithstanding any other
provision herein to the contrary, after a Change of Control, no payment shall be
made from the Trust with respect to an Executive's deferred compensation under
such Executive's Contract unless a Payment Schedule (which has not been revoked)
for such Executive's deferred compensation under such Contract is on file with
the Trustee at the time a Change of Control occurs. Except as otherwise provided
herein, the Trustee shall make payments to Executives and Beneficiaries in
accordance with such Payment Schedule.

        (g) Any Executive or Beneficiary seeking to obtain payment from the
Trust Fund after a Change of Control shall deliver to the Trustee a written
request for payment. As soon as practicable after a request for payment has been
received by the Trustee, the Trustee, solely out of the Trust Fund and with no
obligation otherwise to make any payments, shall make payment to such Executive
or Beneficiary in such manner, and at such times, and in such amounts, as the
Trustee shall determine to be payable to such Executive or Beneficiary under the
Contract based on the most recent Payment Schedule applicable to the Executive
or Beneficiary that was furnished to the Trustee by the Company prior to a
Change of Control.

        (h) After a Change of Control, any Executive or Beneficiary for whom a
Payment Schedule is on file with the Trustee at the time of such Change of
Control shall be presumed conclusively, for all purposes of this Trust
Agreement, to be entitled to any deferred compensation that the Trustee
determines to be payable to such Executive or Beneficiary on the basis of
information contained in such Payment Schedule and in any written request for
payment signed by

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the Executive or Beneficiary, and the Trustee's determination as to the amount
and the form of payment of the deferred compensation so payable shall be
conclusive and binding on all parties, including Executives and Beneficiaries.

        (i) Notwithstanding any other provision in this Trust Agreement to the
contrary, if at any time the Trust is finally determined by the Internal Revenue
Service (the "IRS") not to be a "grantor trust" with the result that the income
of the Trust Fund is not treated as income of the Company pursuant to Sections
671 through 679 of the Code, then the Trust shall immediately terminate. The
Trustee shall immediately distribute the interest of each Executive or
Beneficiary entitled thereto in a lump sum regardless of whether such
Executive's employment has terminated and regardless of the form and time of
payments specified in or pursuant to the Contracts as directed by the Company.

Any remaining assets (less any expenses or costs due under Section 9 hereof)
shall then be paid by the Trustee to the Company in such amounts, and in the
manner instructed by the Company.

        (j) The Company's establishment of the Trust and the making of
contributions thereto shall not release the Company from its obligation to pay
the deferred compensation contemplated by the Contracts to the Executives or the
Beneficiaries except to the extent that the Trust has actually paid such
deferred compensation. If for any reason there are inadequate assets held in the
Trust under the terms of the Contract to pay the Executive or the Beneficiary
his or her deferred compensation (for example, if the Trust assets are applied
to the benefit of the Company's general creditors if the Company becomes
Insolvent as provided herein), the inadequacy of the Trust assets shall not
deprive the Executive or the Beneficiary of the right to be paid by the Company
his or her deferred compensation amount.

        SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO EXECUTIVES AND
BENEFICIARIES WHEN THE COMPANY IS INSOLVENT

        (a) The Trustee shall cease payment of deferred compensation to the
Executives and Beneficiaries if the Company is "Insolvent". The Company shall be
considered "Insolvent" for purposes of this Trust Agreement if (i) the Company
is unable to pay its debts as they become due, or (ii) the Company is subject to
a pending proceeding as a debtor under the United States Bankruptcy Code.

        (b) At all times during the continuance of the Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of the Company under federal and state law as set
forth below.

               (1) The board of directors and the Chief Executive Officer of the
               Company shall have the duty to inform the Trustee in writing if
               the Company becomes Insolvent. If a person claiming to be a
               creditor of the Company notifies the Trustee that the Company has
               become Insolvent, the Trustee shall provide the board of
               directors and the Chief Executive Officer with a copy of such
               writing and absent the Company's

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               provision of an independent expert's opinion reasonably
               satisfactory to the Trustee that the Company is not Insolvent,
               the Trustee shall discontinue payment of deferred compensation to
               the Executives or Beneficiaries.

               (2) Unless the Trustee has actual knowledge of the Company
               becoming Insolvent, or has received notice from the Company or a
               person claiming to be a creditor alleging that the Company is
               Insolvent, the Trustee shall have no duty to inquire whether the
               Company is Insolvent.

               (3) If at any time the Trustee has received a notice containing
               information or allegations described in Section 3(b)(1) hereof
               that the Company is Insolvent, the Trustee shall discontinue
               payments of deferred compensation to the Executives or
               Beneficiaries and shall hold the assets of the Trust for the
               benefit of the Company's general creditors. Nothing in this Trust
               Agreement shall in any way diminish any rights of the Executives
               or Beneficiaries to pursue their rights as general creditors of
               the Company with respect to deferred compensation due under the
               Contracts or otherwise.

               (4) The Trustee shall resume the payment of deferred compensation
               to the Executives or Beneficiaries in accordance with Section 2
               hereof only after it has been demonstrated to the Trustee's
               reasonable satisfaction that the Company is not Insolvent (or is
               no longer Insolvent).

        (c) Provided that there are sufficient assets, if the Trustee
discontinues the payment of deferred compensation from the Trust pursuant to
Section 3(b) hereof and subsequently resumes such payments, the first payment
following such discontinuance shall include the aggregate amount of all payments
due to the Executives or Beneficiaries under the terms of the Contracts for the
period of such discontinuance, less the aggregate amount of any payments made to
the Executives or Beneficiaries by the Company in lieu of the payments provided
for hereunder during any such period of discontinuance.

        SECTION 4.  PAYMENTS TO THE COMPANY

        Except as provided in Sections 2 and 3 hereof, after the Trust has
become irrevocable, as provided in Section 1(a) hereof, the Company shall have
no right or power to withdraw any of the assets of the Trust Fund or to direct
the Trustee to return to the Company or to divert to others such assets before
all payments of deferred compensation due to the Executives and Beneficiaries
have been made pursuant to the terms of the Contracts.

        SECTION 5.  INVESTMENT AUTHORITY

        (a) The Trustee shall have, without exclusion, all powers conferred on
the Trustee by applicable law, unless expressly provided otherwise herein, and
all rights associated with assets of

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the Trust shall be exercised by the Trustee, and shall in no event be
exercisable by or rest with the Executives or Beneficiaries. Subject to the
provisions of the Contracts, and except as expressly provided otherwise herein,
the Trustee shall have full power and authority to invest and reinvest the Trust
Fund in any investment permitted by law, exercising the judgment and care that
persons of prudence, discretion and intelligence would exercise under the
circumstances then prevailing considering the probable income and safety of
their capital, including, without limiting the generality of the foregoing, the
power:

               (1) To invest and reinvest the Trust Fund, together with the
               income therefrom, in common stock, preferred stock, mutual funds,
               bonds, mortgages, notes, time certificates of deposit, commercial
               paper and other evidences of indebtedness (including those issued
               by the Trustee or any of its affiliates), other securities,
               options to buy or sell securities or other assets, and other
               property of any kind (personal, real or mixed, and tangible or
               intangible);

               (2) To deposit or invest all or any part of the assets of the
               Trust Fund in savings accounts or certificates of deposit or
               other deposits which bear a reasonable interest rate in a bank,
               including the commercial department of the Trustee, if such bank
               is supervised by the United States or any state;

               (3) To hold, manage, improve and control all property, real or
               personal, forming part of the Trust Fund and to sell, convey,
               transfer, exchange, partition, lease for any term, even extending
               beyond the duration of the Trust, and otherwise dispose of the
               same from time to time in such manner, for such consideration and
               upon such terms and conditions as the Trustee shall determine;

               (4) To have, respecting securities, all the rights, powers and
               privileges of an owner, including the power to give proxies, pay
               assessments and other sums deemed by the Trustee to be necessary
               for the protection of the Trust Fund; to participate in voting
               trusts, pooling agreements, foreclosures, reorganizations,
               consolidations, mergers and liquidations and, in connection
               therewith, to deposit securities with and transfer title to any
               protective or other committee under such terms as the Trustee may
               deem advisable; to exercise or sell stock subscriptions or
               conversion rights; and regardless of any limitation elsewhere in
               this document relative to investment by the Trustee, to accept
               and retain as an investment any securities or other property
               received through the exercise of any of the foregoing powers;

               (5) To hold in cash, without liability for interest, such portion
               of the Trust Fund which, in its discretion, shall be reasonable
               under the circumstances, pending investments or payments of
               expenses, or the distribution of deferred compensation;

               (6) To take such actions as may be necessary or desirable to
               protect the Trust Fund from loss due to the default on mortgages
               held in the Trust including the

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               appointment of agents or trustees in such other jurisdictions as
               may seem desirable, to transfer property to such agents or
               trustees, to grant such powers as are necessary or desirable to
               protect the Trust or its assets, to direct such agents or
               trustees, or to delegate such power to direct and to remove such
               agents or trustees;

               (7) To employ such agents, including investment advisors,
               custodians, sub-custodians and counsel as may be reasonably
               necessary and to pay them reasonable compensation; to settle,
               compromise or abandon all claims and demands in favor of or
               against the Trust Fund assets;

               (8) To cause title to property of the Trust to be issued, held or
               registered in the individual name of the Trustee or in the name
               of its nominee(s) or agents, or in such form that title will pass
               by delivery;

               (9) To exercise all of the further rights, powers, options and
               privileges granted, provided for or vested in trustees generally
               under the laws of the State of New York, so that powers conferred
               upon the Trustee herein shall not be in limitation of any
               authority conferred by law, but shall be in addition thereto;

               (10) To borrow money from any source (including the Trustee) and
               to execute promissory notes, mortgages, or other obligations and
               to pledge or mortgage any Trust assets as security;

               (11) To institute, compromise and defend actions and proceedings;
               to pay or contest any claim; to settle a claim by or against the
               Trustee by compromise, arbitration, or otherwise to release, in
               whole or in part, any claim belonging to the Trust to the extent
               that the claim is uncollectible;

               (12) To use securities, depositories or custodians and to allow
               such securities as may be held by a depository or custodian to be
               registered in the name of such depository or its nominee or in
               the name of such custodian or its nominee;

               (13) To invest the Trust Fund from time to time in one or more
               investment funds, which funds shall be registered under the
               Investment Company Act of 1940; and

               (14) To do all other acts necessary or desirable for the proper
               administration of the Trust Fund, as if the Trustee were the
               absolute owner thereof. However, nothing in this section shall be
               construed to mean the Trustee assumes any responsibility for the
               performance of any investment made by the Trustee in its capacity
               as trustee under this Trust Agreement. Notwithstanding any powers
               granted to the Trustee pursuant to this Trust Agreement or to
               applicable law, the Trustee shall not have any power that could
               give the Trust the objective of carrying on a business and
               dividing the

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               gains therefrom within the meaning of Section 301.7701-2 of the
               Procedure and Administrative Regulations promulgated pursuant to
               the Code.

        (b) Notwithstanding any other provision in this Trust Agreement to the
contrary:

               (1) Prior to a Change of Control, the Company may in its sole
               discretion appoint one or more investment advisors to manage the
               investment of any part or all of the Trust Fund. The Company
               shall notify the Trustee of any such appointment by delivering to
               the Trustee an executed copy of the instrument making such
               appointment. Any such instrument shall require that the
               investment advisor provide its directions to the Trustee or
               directly to the Trustee's agent or custodian, provided the
               Trustee receives copies of any instructions, confirmations, and
               notifications given to the custodian or agent; and permit the
               Trustee, after a Change of Control, to terminate the investment
               advisor pursuant to, and in accordance with, the terms of this
               Trust Agreement. During the term of the investment advisor's
               appointment, the investment advisor shall have the sole
               responsibility for the investment and reinvestment of that
               portion of the Trust Fund subject to its investment management.
               The Trustee shall have no responsibility for, or liability with
               respect to, the selection of the investment advisor by the
               Company, the investment of such portion of the Trust Fund, or the
               acts or omissions of such investment advisor.

               (2) In exercising the powers granted to it hereunder, the
               Trustee, or its agent or custodian, shall follow the direction of
               any investment advisor with respect to the portion of the Trust
               Fund subject to the management by such investment advisor. The
               investment advisor may provide its directions in writing, signed
               by an officer of the investment advisor, or transmit its
               directions to the Trustee or directly to the Trustee's agent or
               custodian by such other means of communication as the investment
               advisor, with the consent of the Trustee, may deem appropriate or
               necessary. The Trustee shall be under no duty to question, or
               make inquiries as to, any action or direction of any investment
               advisor taken as provided herein, or any failure to give
               directions, or to review the securities held pursuant to any
               investment advisor's direction, or to make suggestions to the
               investment advisor or the Company with respect to the investment,
               reinvestment, or disposition of any assets subject to management
               by the investment advisor.

               (3) After a Change of Control, the Trustee shall have the
               exclusive authority to retain or to terminate any and all
               investment advisors, and appoint successor investment advisors
               (including any affiliate of the Trustee), to manage the Trust
               Fund assets in accordance with the terms of the Contracts,
               provided that any such appointments shall be subject to the
               approval of the Executives as provided in the Contracts.

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               (4) All rights associated with Trust Fund assets shall be
               exercised by the Trustee, a person designated by the Trustee, or
               the investment advisor, and shall in no event be exercisable by
               or rest with the Executives or Beneficiaries, except that prior
               to a Change of Control voting rights with respect to the Trust
               Fund assets shall be exercised by the Company or its agent.

        (c) Notwithstanding any powers granted to the Trustee pursuant to this
Trust Agreement or applicable law, to the extent that the Trustee directly
exercises investment authority, the Trustee shall not invest Trust Fund assets
in securities (including stock or rights to acquire stock) or obligations issued
by the Company or any of its subsidiaries or affiliates, other than a de minimis
amount held in common investment vehicles in which the Trustee invests.

        SECTION 6.  DISPOSITION OF INCOME

        During the term of the Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.

        SECTION 7.  ACCOUNTING BY TRUSTEE

        The Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between the
Company and the Trustee. After a Change of Control, the Trustee shall cause the
Company to continue to receive copies of all trade confirmations, purchase and
subscription agreements, statements, reports, analyses, summaries and related
documents pertaining to the holding, investing and reinvesting of the securities
and other property held in the Trust Fund at substantially the same time as
copies of the same are first received by the Trustee or an investment advisor
(but in no event later than five business days thereafter). Within 120 days
following the close of each calendar year and within 120 days after the removal
or resignation of the Trustee, the Trustee shall deliver to the Company a
written account of its administration of the Trust during such year or during
the period from the close of the last preceding year to the date of such removal
or resignation, setting forth all investments, receipts, disbursements and other
transactions effected by it, including a description of all securities and
investments purchased and sold with the cost or net proceeds of such purchases
or sales (accrued interest paid or receivable being shown separately), and
showing all cash, securities and other property held in the Trust at the end of
such year or as of the date of such removal or resignation, as the case may be.

        SECTION 8.  RESPONSIBILITY OF TRUSTEE

        (a) The Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that the
Trustee shall incur no liability to any person for any action taken pursuant to
a

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direction, request or approval given by any officer of the Company which is
contemplated by, and in conformity with, the terms of the Contracts or the Trust
(as these are in effect immediately prior to a Change of Control) and is given
in writing by any officer of the Company. In the event of a dispute between the
Company and a party, the Trustee may apply to a court of competent jurisdiction
to resolve the dispute.

        (b) If the Trustee undertakes or defends any administrative, adversarial
or other litigation or proceeding arising in connection with the Trust, the
Company shall indemnify the Trustee against the Trustee's costs, expenses and
liabilities (including without limitation, attorney's fees and expenses)
relating thereto and to be primarily liable for such payments. If the Company
does not pay such costs, expenses and liabilities in a reasonably timely manner,
the Trustee may obtain payment from the Trust without notice to any party.

        (c) The Trustee may consult with legal counsel (who may also, but need
not, be counsel for the Company) generally with respect to any of its duties or
obligations hereunder at the Company's expense which, should it remain unpaid,
may be paid from the Trust without notice to any party. The Trustee shall incur
no liability to any person for acting or refraining from acting in accordance
with the advice of such counsel.

        (d) The Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder at the Company's expense
which, should it remain unpaid, may be paid from the Trust without notice to any
party. The Trustee shall incur no liability to any person for acting or
refraining from acting in accordance with the advice of such agents,
accountants, actuaries, investment advisors, financial consultants or other
professionals.

        (e) The Trustee shall have, without exclusion, all powers conferred on
trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as an asset of the Trust,
the Trustee shall have no power to name a beneficiary of the policy other than
the Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor trustee, or to loan to any person the
proceeds of any borrowing against such policy.

        (f) The Company shall indemnify and hold the Trustee harmless from and
against all loss or liability (including expenses and reasonable attorneys'
fees), to which it may be subject by reason of its execution of its duties under
the Trust, or by reason of any acts taken in good faith in accordance with any
directions, or acts omitted in good faith due to absence of directions, from the
Company, an Executive or Beneficiary or an investment advisor (other than an
investment advisor appointed by, or an affiliate of, the Trustee) unless, and
only to the extent, such loss or liability is due to the Trustee's negligence or
misconduct.

        (g) In the event that the Trustee is named as a defendant in a lawsuit
or proceeding involving the Contracts or the Trust Fund, the Trustee shall be
entitled to receive payments on a

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current basis pursuant to the indemnity provisions provided for in this section,
provided however, that if the final judgment entered in the lawsuit or
proceeding holds that Trustee is guilty of negligence or misconduct with respect
to the Trust Fund, the Trustee shall be required to refund the indemnity
payments that it has received.

        (h) All releases and indemnities provided in this Trust Agreement shall
survive the termination of this Trust Agreement.

        SECTION 9.  COMPENSATION AND EXPENSES OF TRUSTEE

        (a) The Trustee is authorized to incur reasonable obligations in
connection with the administration of the Trust including attorney's fees,
administrative fees and appraisal fees. Such obligations shall be paid by the
Company. The Trustee is authorized to pay such amounts from the Trust Fund if
the Company fails to pay them within 60 days of presentation of a statement of
the amounts due.

        (b) The Trustee shall be entitled to reasonable compensation for its
services, including extraordinary services, as agreed upon between the Trustee
and the Company and as set forth in Schedule A attached hereto and made a part
hereof, and such other fees as may be negotiated between the parties. If the
Trustee and the Company fail to agree upon a compensation agreement, the Trustee
shall be entitled to compensation at a rate equal to the rate charged by the
Trustee for similar services rendered by it during the current fiscal year for
other trusts similar to this Trust. The Trustee shall be entitled to
reimbursement for expenses incurred by it in the performance of its duties as
the Trustee including reasonable fees for legal counsel. The Trustee's
compensation and expenses shall be paid by the Company. The Trustee is
authorized to withdraw such amounts from the Trust Fund if the Company fails to
pay them within 60 days of presentation of a statement of the amounts due.

        SECTION 10.  RESIGNATION AND REMOVAL OF TRUSTEE

        (a) The Trustee may resign at any time by notice to the Company, which
shall be effective 90 days after receipt of such notice unless the Company and
the Trustee agree otherwise.

        (b) Prior to a Change of Control, the Trustee may be removed by the
Company on 30 days notice or upon shorter notice accepted by the Trustee.

        (c) Upon resignation or removal of the Trustee and appointment of a
successor trustee, all assets shall subsequently be transferred to the successor
trustee. The transfer shall be completed within 30 days after receipt of notice
of resignation, removal or transfer, unless the Company extends the time limit.

        (d) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the effective date of
resignation or removal under paragraph (a) or (b) of

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this section. In the event of a Change of Control, or if no such appointment has
been made, the Trustee may apply to a court of competent jurisdiction for
appointment of a successor or for instructions. All expenses of the Trustee in
connection with the proceeding shall be paid by the Company, and if not, from
the Trust as administrative expenses of the Trust.

        SECTION 11.  APPOINTMENT OF SUCCESSOR

        (a) If the Trustee resigns (or is removed) in accordance with Section
10(a) or (b) hereof prior to a Change of Control, the Company shall appoint any
third party, such as a bank trust department or other party that may be granted
corporate trustee powers under federal or state law, as a successor to replace
the Trustee. The appointment shall be effective when accepted in writing by the
new trustee, who shall have all of the rights and powers of the Trustee,
including ownership rights in the Trust Fund assets upon transfer of same to the
new trustee. The Trustee shall execute any instrument necessary or reasonably
requested by the Company or the successor trustee to evidence the transfer.

        (b) If the Trustee resigns in accordance with Section 10(a) hereof after
a Change of Control, the Trustee shall appoint any third party such as a bank
trust department or other party that may be granted corporate trustee powers
under federal or state law as a successor to replace the Trustee. The
appointment of a successor trustee shall be effective when accepted in writing
by the new trustee. The new trustee shall have all the rights and powers of the
Trustee, including ownership rights in Trust Fund assets upon transfer of same
to the new trustee. The Trustee shall execute any instrument necessary or
reasonably requested by the successor trustee to evidence the transfer.

        (c) The successor trustee need not examine the records and acts of the
Trustee and may retain or dispose of existing Trust Fund assets, subject to the
provisions of this Trust Agreement. The successor trustee shall not be
responsible for, and the Company shall indemnify and defend the successor
trustee from, any claim or liability resulting from any action or inaction of
the Trustee or from any other past event, or any condition existing at the time
it becomes successor trustee.

        SECTION 12.  CHANGE OF CONTROL

        For purposes of this Trust Agreement, "Change of Control" shall mean:
The date upon which (i) the board of directors of the Company (or, if approval
of the board of directors of the Company is not required as a matter of law, the
stockholders of the Company) shall approve (a) any consolidation or merger of
the Company in which the Company is not the continuing or surviving corporation
or pursuant to which shares of the Company's common stock would be converted
into cash, securities or other property, other than a merger of the Company in
which the holders of the Company's common stock immediately prior to the merger
have the same proportionate ownership of common stock of the surviving
corporation immediately after the merger, (b) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company or (c) the adoption of any plan
or proposal for the

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liquidation or dissolution of the Company, (ii) (a) any person (as such term is
defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), corporation, or other entity shall purchase
any common stock of the Company (or securities convertible into the Company's
common stock) for cash, securities or any other consideration pursuant to a
tender offer or exchange offer, without the prior consent of the board of
directors of the Company, or (b) any such person, corporation or other entity
(other than the Company or any benefit plan sponsored by the Company or other
subsidiary) shall become the "beneficial owner" (as such term is defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing twenty percent (20%) or more of the combined voting power
of the then outstanding securities of the Company ordinarily (and apart from
rights accruing under special circumstances) having the right to vote in the
election of directors (calculated as provided in paragraph (d) of such Rule
13d-3 in the case of rights to acquire the Company's securities), or (iii)
during any period of two (2) consecutive years, individuals who at the beginning
of such period constitute the entire board of directors of the Company shall
cease for any reason to constitute a majority thereof unless the election, or
the nomination for election by the Company's stockholders, of each new director
was approved by a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of the period.

               (i) The Company's board of directors (as constituted immediately
prior to a Change of Control) acting in such capacity shall have the duty to
inform the Trustee in writing that a Change of Control has occurred. Any one
member of the Company's board of directors may provide such a writing. If an
Executive alleges in writing to the Trustee that a Change of Control has
occurred, the Trustee shall deliver a copy of the Executive's allegation to the
Company within three days of delivery to the Trustee, and the Trustee may engage
one or more independent attorneys, accountants, consultants, or other experts
(the "Experts") to determine whether a Change of Control has occurred. The
Experts shall be engaged at the expense of the Company. The determination of the
Experts or the Trustee as to whether a Change of Control has occurred shall be
binding on the Company and the Executives.

               (ii) Unless the Trustee has received notice from a member of the
Company's board of directors or an Executive alleging that a Change of Control
has occurred, the Trustee shall have no duty to inquire whether a Change of
Control has occurred.

        SECTION 13.  AMENDMENT OR TERMINATION

        (a) This Trust Agreement may be amended by a written instrument executed
by the Trustee and the Company. Notwithstanding the foregoing, no such amendment
shall conflict with the terms of the Contracts or shall make the Trust revocable
after it has become irrevocable in accordance with Section 1(a) hereof, and
provided further, that this Trust Agreement may not be amended or modified in
whole or in part following a Change of Control, except (i) to reflect changes in
applicable law or (ii) amendments made in furtherance of the Contracts, subject
to the consent of the Executives.

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        (b) The Trust shall not terminate until the date on which all payments
of deferred compensation pursuant to the terms of the Contracts have been made
to the Executives and Beneficiaries, unless sooner revoked in accordance with
Section 1(a) hereof. Upon termination of the Trust, any assets remaining in the
Trust shall be returned to the Company. Such remaining assets shall be paid by
the Trustee to the Company in such amounts and in the manner instructed by the
Company, whereupon the Trustee shall be released and discharged from all
obligations hereunder. From and after the date of termination, and until final
distribution of the Trust Fund, the Trustee shall continue to have all of the
powers provided herein as are necessary or expedient for the orderly liquidation
and distribution of the Trust Fund.

        SECTION 14.  MISCELLANEOUS

        (a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.

        (b) Deferred compensation payable to the Executives and Beneficiaries
under this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment, garnishment,
levy, execution or other legal or equitable process.

        (c) This Trust Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

        (d) This Trust Agreement shall be binding on, and the powers granted to
the Company and the Trustee, respectively, shall be exercisable by the
respective successors and assigns of the Company and the Trustee. Any
corporation that succeeds to substantially all of the business of the Trustee by
merger, consolidation, purchase or otherwise shall upon succession and without
appointment or other action by the Company be and become successor trustee
hereunder.

        (e) Any communication to the Trustee, including any notice, direction,
designation, certification, order, instruction or objection shall be in writing
and signed by an officer of the Company or by the person authorized under the
Contracts or this Trust Agreement to govern same. The Trustee shall be fully
protected and indemnified by the Company in acting in accordance with such
written communications. Any such communication required or permitted to be given
hereunder shall be deemed given if written and hand delivered, mailed, postage
prepaid, certified mail, return receipt requested or transmitted by facsimile to
the Company or the Trustee at the following address or such other address as a
party may specify:

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               (i)    if to the Company:

               General Counsel
               Time Warner Inc.
               75 Rockefeller Plaza
               New York, NY 10019

               Facsimile No. (212) 956-7281

               (ii)   If to the Trustee:

               U.S. Trust Company
               114 W. 47th Street, 8th Floor
               New York, NY 10036

               Facsimile No. (212) 852-3036

               Attention: Otis A. Sinnott, Jr.

        (f) Any obligation of the Company and/or the Trust to repay the Trustee
amounts pursuant to any provision of this Trust Agreement shall survive any
amendment or termination hereof or the Trustee's resignation or removal.

        IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be executed by their duly authorized officers as of the day and year first
above written.

TIME WARNER INC.                          U.S. TRUST COMPANY OF CALIFORNIA, N.A.



By: /s/ Carolyn K. McCandless             By: /s/ Otis A. Sinnott, Jr.
    ______________________________            __________________________________
    Carolyn K. McCandless                     Otis A. Sinnott, Jr.


Title: Vice President                     Title: Vice President
       ___________________________               _______________________________



                                                         TWI/UST Trust Agreement

                                       16





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