-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K5qU/o/XkQJzvBWiVF4wEIMJ9P55Q4V3K31JU/yswQ8t42FWWBsElWRCKgR9ve8T LJbuAo+RIc2jsMowBg5AcQ== 0000903423-06-000199.txt : 20060216 0000903423-06-000199.hdr.sgml : 20060216 20060216162324 ACCESSION NUMBER: 0000903423-06-000199 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20060216 DATE AS OF CHANGE: 20060216 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TIME WARNER INC CENTRAL INDEX KEY: 0001105705 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 134099534 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-60983 FILM NUMBER: 06625581 BUSINESS ADDRESS: STREET 1: ONE TIME WARNER CENTER CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2124848000 MAIL ADDRESS: STREET 1: ONE TIME WARNER CENTER CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: AOL TIME WARNER INC DATE OF NAME CHANGE: 20000208 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Istithmar PJSC CENTRAL INDEX KEY: 0001298473 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: EMIRATES TOWERS, LEVEL 47 STREET 2: SHIEKH ZAYED ROAD, P.O. BOX. 17000 CITY: DUBAI STATE: C0 ZIP: 00000 BUSINESS PHONE: 971 4 390 2100 MAIL ADDRESS: STREET 1: EMIRATES TOWERS, LEVEL 47 STREET 2: SHIEKH ZAYED ROAD, P.O. BOX. 17000 CITY: DUBAI STATE: C0 ZIP: 00000 SC 13D 1 isththmar-13d_0216.htm

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)

TIME WARNER INC.

(Name of Issuer)

Common Stock, 0.01 par value

(Title of Class of Securities)

887317 10 5

(CUSIP Number)

Muneef Tarmoom

Istithmar PJSC

Emirates Towers, Level 4

Sheikh Zayed Road – PO Box 17000

Dubai, United Arab Emirates

+971-4-390-2100

(Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications)

February 15, 2006

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. o

The information required on this cover page shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Act”), or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act.

CUSIP No. 887317 10 5

13D

Page 2 of 11 Pages

1	NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Istithmar PJSC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS WC. See Item 3.
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION Dubai, United Arab Emirates
NUMBER OF SHARES		7	SOLE VOTING POWER 0
BENEFICIALLY OWNED BY		8	SHARED VOTING POWER 109,460,088. See Item 5.
EACH REPORTING PERSON WITH		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 109,460,088. See Item 5.
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES x
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.39%. See Item 5.
14	TYPE OF REPORTING PERSON CO

CUSIP No. 887317 10 5

13D

Page 3 of 11 Pages

1	NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Istithmar Media Investments
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS AF. See Item 3.
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
NUMBER OF SHARES		7	SOLE VOTING POWER 0
BENEFICIALLY OWNED BY		8	SHARED VOTING POWER 109,460,088. See Item 5.
EACH REPORTING PERSON WITH		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 109,460,088. See Item 5.
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES x
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.39%. See Item 5.
14	TYPE OF REPORTING PERSON CO

CUSIP No. 887317 10 5

13D

Page 4 of 11 Pages

Item 1.

Security and Issuer.

This statement relates to the common stock, $0.01 par value (the “Common Stock”), of Time Warner Inc., a Delaware corporation (the “Issuer”). The principal executive offices of the Issuer are located at One Time Warner Center, New York, NY 10019-8016.

Item 2.

Identity and Background.

	(a-c)	This statement is filed by the entities listed below, both of which together are referred to herein as the “Reporting Persons”:
	(i)	Istithmar PJSC, a public joint stock company incorporated under the laws of Dubai, United Arab Emirates (“Istithmar”). The principal business address of Istithmar is Emirates Towers, Level 4, Sheikh Zayed Road, PO Box 17000, Dubai, United Arab Emirates. Istithmar is a private investment firm that implements numerous entrepreneurial ventures and other investments. Istithmar is indirectly wholly owned and ultimately controlled by the government of Dubai.

(ii)

Istithmar Media Investments, a company incorporated under the laws of the Cayman Islands (“IMI”). The principal business address of IMI Emirates Towers, Level 4, Sheikh Zayed Road, PO Box 17000, Dubai, United Arab Emirates. IMI is a direct wholly owned subsidiary of Istithmar and has been formed for the purpose of investing directly or indirectly in the Common Stock.

The name, business address, country of citizenship, and present principal occupation of each director and executive officer of each of Istithmar and IMI is set forth in Schedules A and B hereto, respectively, and is incorporated herein by reference.

(d-e) Neither the Reporting Persons, nor to the best of either Reporting Person’s knowledge, the government of Dubai or any of the persons identified on Schedule A or B hereto has, during the last five years, (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3.

Source and Amount of Funds or Other Consideration.

The aggregate amount of funds required by IMI to acquire the economic exposure to 109,460,088 of Common Stock described below in Item 4 was U.S.$427,017,584. IMI obtained all of such funds from Istithmar as a capital contribution.

Item 4.

Purpose of Transaction.

CUSIP No. 887317 10 5

13D

Page 5 of 11 Pages

On February 15, 2006, IMI acquired from UBS AG, London Branch, as issuer, US$2,000,000,000 Participation Notes due 2007 (the “Participation Notes”), the terms of which provide for cash payments to IMI, as holder of the Participation Notes, upon redemption (whether at maturity or otherwise), that are to be determined with reference to the market value of the Common Stock and are designed to provide IMI with an economic exposure, subject to certain limitations set forth in the Participation Notes, to 109,460,088 of Common Stock. Concurrently with the issuance of the Participation Notes to IMI, UBS AG, Jersey Branch has issued US$2,000,000,000 Mandatory Exchangeable Notes due 2007 that are exchangeable into shares of Common Stock.

In connection with the issuance of the Participation Notes, IMI and UBS AG entered into an Economic Participation Agreement (the “Participation Agreement”) pursuant to which IMI has agreed that UBS at all relevant times shall have absolute discretion to manage its obligations as the issuer of the Participation Notes; that, in particular, UBS has no obligation to own any shares of Common Stock; and that, to the extent UBS holds voting rights with respect to any shares of Common Stock, UBS will have absolute discretion to exercise those voting rights. Nevertheless, UBS has agreed with IMI that, during any period in which the Participation Notes are outstanding and UBS holds voting rights with respect to shares of Common Stock, UBS will consult with Istithmar in relation to the exercise of its voting rights in respect of those shares, up to the number of shares to which IMI has acquired an economic exposure through the Participation Notes. UBS has also agreed with IMI that in connection with certain mergers, tender offers or other transactions affecting the value of the shares of Common Stock and IMI’s economic exposure under the Participation Notes, where practicable, UBS will consult with Istithmar regarding the designations it is entitled to make in respect of such transactions under the terms and conditions of the Participation Notes. The Participation Agreement provides that UBS may take into account the views of Istithmar regarding any such designations and the exercise of any such voting rights but is under no obligation to act in accordance with Istithmar’s views.

The foregoing descriptions of the Participation Notes and the Participation Agreement are qualified in their entirety by reference to the full text of those agreements, copies of which are attached hereto as Exhibits 1 and 2 and which are incorporated herein by reference in their entirety.

In connection with IMI’s acquisition of the Participation Notes and possible future investments in the Common Stock, the Reporting Persons have retained Icahn Institutional Services LLC (“IIS”), an entity wholly owned by Mr. Carl Icahn, to serve as the investment advisor to IMI with respect to IMI’s economic exposure to shares of Common Stock through the Participation Notes and possible other investments in Common Stock (the “Advisory Agreement”). The Advisory Agreement, which became effective upon IMI’s acquisition of the Participation Notes, provides that as IMI’s investment advisor, IIS will, through its principals (including Mr. Icahn), from time to time as reasonably requested by IMI, consult with IMI with respect to the businesses and operations of the Issuer, the strategy which IIS and Mr. Icahn are employing with respect to their proposals for the Issuer, the valuation of the Common Stock and the market for the Common Stock, and advise IMI with respect to its investments in the Common Stock.

CUSIP No. 887317 10 5

13D

Page 6 of 11 Pages

The Advisory Agreement provides that IIS’s services will be advisory only, that all decisions relating to IMI’s investments (including all determinations as to the acquisition, disposition, holding or voting of any securities that IMI may acquire) will be made solely by IMI and that IIS will have no power or authority, and will have no responsibility or obligation, to make any investment, voting or other decision on IMI’s behalf with respect to any securities. The Advisory Agreement will remain in effect, subject to certain early termination provisions, until July 1, 2006. IMI has agreed in the Advisory Agreement to pay IIS a fee based upon the profits earned by IMI in respect of its economic exposure to the Common Stock.

The foregoing description of the Advisory Agreement is qualified in its entirety by reference to the full text of that agreement, a copy of which is attached hereto as Exhibit 3 and which is incorporated herein by reference in its entirety.

IMI has acquired the Participation Notes and the economic exposure to the Common Stock provided through the Participation Notes solely for investment. The Reporting Persons believe that the Common Stock is currently undervalued and that the activities, plans and proposals of Mr. Icahn and his affiliates with respect to the Issuer will likely result in an increase in the value of the Common Stock.

Other than as described above, neither of the Reporting Persons has any present plans or proposals which relate to or that would result in any of the actions or transactions described in paragraphs (a) through (j) of Item 4 of the instructions to Schedule 13D. IMI may in the future increase the number of shares of Common Stock to which it has economic exposure and Istithmar and/or IMI may acquire shares of Common Stock or other securities of the Issuer in the open market, in privately-negotiated purchases or otherwise, and depending on then current circumstances, IMI may also reduce its economic exposure to the Common Stock. Additionally, the Reporting Persons reserve the right from time to time to formulate plans or proposals regarding the Issuer or any of its securities and to carry out any of the actions or transactions described in paragraphs (a) through (j) of Item 4 of the instructions to Schedule 13D, to the extent they deem advisable.

Item 5.

Interest in Securities of the Issuer.

(a,b) Neither of the Reporting Persons possesses sole or shared voting or dispositive power over any shares of Common Stock and each of the Reporting Persons hereby expressly disclaims beneficial ownership of any shares of Common Stock. However, if by virtue of the voting consultation arrangements set forth in the Participation Agreement, the Reporting Persons were deemed, for purposes of Regulation 13D-G under the Securities Exchange Act of 1934 (the “Act”), to share voting power over the number of shares of Common Stock to which IMI has an economic exposure through the Participation Notes, the Reporting Persons would be deemed to beneficially own 109,460,088 shares of Common Stock, representing 2.39% of the outstanding number of shares of Common Stock.

Neither Reporting Person has any contract, agreement, understanding or relationship, written or oral, with IIS, Mr. Icahn or any of their affiliates with respect to voting, acquisition, disposition, holding or investment power over any shares of Common Stock and each of the Reporting Persons hereby expressly disclaims membership in any “group” with any

CUSIP No. 887317 10 5

13D

Page 7 of 11 Pages

of such persons for purposes of Regulation 13D-G under the Act. However, if the Reporting Persons were deemed to be members of a group with Mr. Icahn, his affiliates and other parties who have been disclosed as participants with Mr. Icahn in a proposed proxy solicitation involving the Issuer (the “Icahn Group”), the Reporting Persons would be deemed to beneficially own any shares of Common Stock beneficially owned by the Icahn Group. Based on the Icahn Group’s most recent public filing, the members of the Icahn Group are the beneficial owners of an aggregate of 150,040,567 shares of Common Stock, representing 3.28% of the outstanding shares of Common Stock, which, if combined with the number of shares of Common Stock to which IMI has an economic exposure through the Participation Notes, would constitute 259,525,855 shares of Common Stock, representing 5.67% of the outstanding number of shares of Common Stock.

All percentages of shares of Common Stock owned described in this statement are based upon an outstanding amount of 4,575,364,733 shares of Common Stock outstanding at October 28, 2005, as set forth in the Issuer’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005.

(c) Except as described above, neither of the Reporting Persons, nor to the knowledge of either of the Reporting Persons, the government of Dubai or any of the persons identified in Schedules A and B hereto (i) beneficially owns any shares of Common Stock or (ii) has effected any transactions in the Common Stock during the 60-day period preceding the date this statement was filed.

(d) Except as may exist under the terms of the Participation Notes, the Participation Agreement, the Advisory Agreement and the Island Agreement, no person other than the Reporting Persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any shares of Common Stock to which IMI has an economic exposure through the Participation Notes.

(e) Not applicable.

Item 6.

Contracts, Arrangements, Understandings or Relationships With Respect to
Securities of the Issuer.

In consideration for its assistance in introducing Istithmar to IIS and its advice in connection with the Advisory Agreement, Istithmar has agreed (the “Island Agreement”) to pay Island IMI LLC, an affiliate of Island Capital LLC, a fee equal to a portion of the fees IMI pays to IIS pursuant to the Advisory Agreement. The foregoing description of the Island Agreement is qualified in its entirety by reference to the full text of that agreement, a copy of which is attached hereto as Exhibit 4 and which is incorporated herein by reference in its entirety.

Other than for the Participation Notes, the Participation Agreement, the Advisory Agreement and the Island Agreement and as otherwise described in this statement, there are no contracts, arrangements understandings or relationships (legal or otherwise) between the Reporting Persons, or between such persons or any other person with respect to any securities of the Issuer, including but not limited to transfer or voting of any of such securities, finder’s fees,

CUSIP No. 887317 10 5

13D

Page 8 of 11 Pages

joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. See Items 4 and 5.

Item 7.

Material to be Filed as Exhibits.

US$2,000,000,000 Participation Notes due 2007, of UBS AG, London Branch.

Economic Participation Agreement between UBS AG, London Branch and Istithmar, dated February 15, 2006.

Financial Advisory Agreement between Istithmar, IMI and IIS, dated February 3, 2006

Letter Agreement between Istithmar and Island IMI LLC, dated February 3, 2006.

Joint Acquisition Statement Pursuant to Rule 13d-1(k).

CUSIP No. 887317 10 5

13D

Page 9 of 11 Pages

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: February 16, 2006	ISTITHMAR PJSC
	/s/ Muneef Tarmoom
	By: Muneef Tarmoom
	Title: Chief Executive Officer


	ISTITHMAR MEDIA INVESTMENTS
	/s/ David Jackson
	By: David Jackson
	Title: Director

CUSIP No. 887317 10 5

13D

Page 10 of 11 Pages

SCHEDULE A

EXECUTIVE OFFICERS AND DIRECTORS OF ISTITHMAR

Unless otherwise indicated, each of the individuals listed below is a citizen of Dubai, United Arab Emirates, the business address of each of such individuals is Emirates Towers, Level 4, Sheikh Zayed Road, PO Box 17000, Dubai, United Arab Emirates and the principal occupation of each of such individuals is with Istithmar.

Name, Address and Citizenship	Position with Istithmar	Principal Occupation and Business Address
Sultan Ahmed Bin Sulayem	Chairman	Executive Chairman, The Dubai Ports, Customs and Free Zone Corporation Emirates Towers, Level 47, Sheikh Zayed Road, PO Box 17000, Dubai, United Arab Emirates

Ahmed Buti Ahmed	Director	Director General, Dubai Customs [Port Rashid, PO Box 63], Dubai, United Arab Emirates

Hamed Ahmed Kazim	Director	Financial Advisor Emirates Towers, Level 47, Sheikh Zayed Road, PO Box 17000, Dubai, United Arab Emirates

Muneef Tarmoom	Chief Executive Officer

Peter Jodlowski (United Kingdom)	Chief Financial Officer

David Jackson (United States)	Chief Investment Officer

CUSIP No. 887317 10 5

13D

Page 11 of 11 Pages

SCHEDULE B

EXECUTIVE OFFICERS AND DIRECTORS OF IMI

Unless otherwise indicated, each of the individuals listed below is a citizen of Dubai, United Arab Emirates and the business address of each of such individuals is Emirates Towers, Level 4, Sheikh Zayed Road, PO Box 17000, Dubai, United Arab Emirates.

Name, Address and Citizenship	Position with IMI	Principal Occupation and Business Address
Sultan Ahmed Bin Sulayem	Director	Executive Chairman, The Dubai Ports, Customs and Free Zone Corporation Emirates Towers, Level 47, Sheikh Zayed Road, PO Box 17000, Dubai, United Arab Emirates
Peter Jodlowski (United Kingdom)	Director	Chief Financial Officer, Istithmar
David Jackson (United States)	Director	Chief Investment Officer, Istithmar

EX-1 2 isththmar-13dex1_0216.htm

EXHIBIT 1

UBS AG, LONDON BRANCH

US$2,000,000,000 PARTICIPATION NOTES DUE 2007

This certifies that ISTITHMAR MEDIA INVESTMENTS

IS THE REGISTERED HOLDER OF

US$2,000,000,000 in aggregate principal amount of Participation Notes due 2007 (the “Notes”) issued by UBS AG, London Branch (the “Issuer”). The Notes are subject to the terms and conditions set out in the Schedule hereto (the “Conditions”). Terms defined in the Conditions have the same meanings when used herein.

This Global Note is evidence of entitlement only. Title to the Notes passes only on due registration on the Register of Noteholders and only the duly registered holder is entitled to payments in respect of this Note.

This Global Note may not be transferred in whole or in part other than with the prior consent of the Issuer.

This Global Note is governed by, and shall be construed in accordance with, the laws of the State of New York.

Issued as of 15 February 2006

UBS AG, LONDON BRANCH

By: /s/ Derek Lowe

(Authorised Signatory)

By: /s/ Mark Dalton

(Authorised Signatory)

Schedule

Terms and Conditions of the Participation Notes

1	GENERAL

(a)

Description

The US$2,000,000,000 Participation Notes due 2007 (the “Notes”) of UBS AG, London Branch (the “Issuer”) are constituted hereby and are issued on February 15, 2006.

References to “Conditions” are, unless the context requires otherwise, to this Condition 1 and the numbered paragraphs below.

(b)

Redemption

The Notes shall be redeemable, subject to and in accordance with these Conditions, at a redemption price equal to the Reference Property Value plus the Holder’s Cash Amount (each as defined in Condition 5(b)). The Reference Property initially comprises 109,460,088 shares of common stock with a par value of US$0.01 of Time Warner Inc. (“Time Warner”), a company incorporated under the laws of the State of Delaware, ISIN US8873171057 (the “Shares”). The Holder’s Cash Amount shall initially be US$ zero.

(c)

Form, Denomination and Title

The Notes are in registered form, in the denomination of US$100,000 (each, an “Authorized Denomination”).

(d)

Title

Title to the Notes is registered in the name of Istithmar Media Investments. In these Conditions, in relation to a Note, “Noteholder” and “holder” means Istithmar Media Investments. The holder of any Note will (except as otherwise required by law) be treated as its absolute owner for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any interest in it or any writing on, or theft or loss of it) and no person will be liable for so treating the holder.

2	STATUS

The Notes constitute unconditional, unsecured and unsubordinated obligations of the Issuer and rank and will rank equally among themselves and, save for such exceptions as may be provided by law, pari passu with all other unsecured and unsubordinated obligations of the Issuer.

3	REGISTRATION AND TRANSFER OF THE NOTES

(a)

Registration

The Issuer will cause a register (the “Register”) to be maintained by or on behalf of UBS AG outside the United Kingdom on which will be entered the name and address of Istithmar Media Investments as the holder of the Notes and the particulars of all redemptions of Notes.

(b)

Transfer

Notes may not be transferred in whole or in part other than with the prior written consent of the Issuer.

4	INTEREST

The Notes do not bear interest. If any amount due under the Notes is improperly withheld or refused interest will accrue on such amount (both before and after judgment) at a rate determined by the Issuer by reference to US dollar interbank offer rates.

5	REDEMPTION

The Notes may not be redeemed otherwise than in accordance with this Condition 5 or Condition 6.

(a)

Mandatory Redemption at Maturity

Unless otherwise previously redeemed or purchased and cancelled in accordance with these Conditions, each outstanding Note will be mandatorily redeemed on August 15, 2007 (the “Maturity Date”) by payment by or on behalf of the Issuer on the relevant Settlement Date to, or to the account of, the Noteholder of (i) the Holder’s Reference Property Value (as defined in Condition 5(b)) and (ii) to the extent not already so delivered in accordance with Condition 5(f) 100 per cent. of the Holder’s Cash Amount per Note, such Holder’s Cash Amount per Note being calculated as at the Maturity Date, in each case, as at the last day of the relevant Calculation Period (as defined in Condition 5(b)).

(b)

Definitions

For the purposes of these Conditions:

“Business Day” means a day, other than a Saturday or Sunday on which commercial banks and foreign exchange markets are open for general business in London and New York.

“Calculation Period” means:

(i)

with respect to a Mandatory Redemption pursuant to Condition 5(a), a period of 15 consecutive Valuation Days ending on, and including, the sixth Valuation Day immediately preceding the Maturity Date;

(ii)

with respect to any early redemption of the Notes pursuant to Condition 5(c) or 5(d), (x) if the nominal value of each Note to be redeemed (the “Redemption Amount”) is less than or equal to US$30,000, the period of 5 consecutive Valuation Days ending on, and including, the sixth Valuation Day preceding the relevant Redemption Date; (y) if the Redemption Amount is more than US$30,000 but less than US$60,000, the period of 10 consecutive Valuation Days ending on, and including, the sixth Valuation Day preceding the relevant Redemption Date; and (z) if the Redemption Amount is greater than or equal to US$60,000, the period of 15 consecutive Valuation Days ending on, and including, the sixth Valuation Day preceding the relevant Redemption Date; and

(iii)

with respect to an Optional Redemption pursuant to Condition 6(a), a period of 10 consecutive Valuation Days beginning on the third Valuation Day following the relevant Notification Date (as defined in Condition 6(b)).

For the purpose of this definition of Calculation Period, “Valuation Day” shall, if applicable, be the Valuation Day corresponding to the Predominant Reference Security.

“Capital Repayment” means any repayment or redemption in whole or in part, whether or not in cash, of any Reference Securities or of any other property or assets comprising the Reference Property.

“Cash Instrument” has the meaning given to it in Condition 5(e).

“Closing Price” means, with respect to a Trading Day on which an Reference Security is listed or quoted on the Stock Exchange, the closing sale price of such Reference Security on the Stock Exchange (or, if such price is not available, the average of the bid and ask prices) on such Trading Day (as published by the Stock Exchange). If the Reference Securities are quoted in a currency other than US dollars, conversions to US dollars of the Closing Price of the Reference Securities will be made at the Relevant Rate in effect on the relevant Trading Day.

“CMV” means, with respect to the Reference Property per Note on any Valuation Day, the current market value thereof, being the aggregate amount calculated by the Issuer of:

(i)

the VWAP of publicly-traded Reference Securities included in the Reference Property per Note on the Valuation Day as determined by the Issuer, multiplied by the number of such publicly-traded Reference Securities;

(ii)

in the case of any publicly-traded Reference Securities in respect of which the VWAP is not available, the Closing Price of such Reference Securities on the Valuation Day, all as determined by the Issuer, multiplied by the number of such publicly-traded Reference Securities;

(iii)

in the case of any assets (including Cash Instruments (as defined in Condition 5(e))) included in the Reference Property per Note on such Valuation Day for which a value cannot be determined pursuant to paragraph (i) or (ii) above, their fair market value as determined by the Issuer (acting in good faith); and

(iv)

in respect of any cash (other than a Cash Instrument (as defined in Condition 5(e))) included in the Reference Property per Note on such Valuation Day, the amount of such cash on such Valuation Day,

in each case converted (if necessary) into US dollars at the Relevant Rate in effect on the relevant Valuation Day, and provided that:

(a)

for the purposes of paragraphs (i) and (ii) above, if such VWAP or Closing Prices are not available on any Valuation Day (whether by reason of a suspension of trading in the relevant securities or otherwise) or there is a Market Disruption Event on any such Valuation Day, then the CMV of the relevant Reference Securities shall be determined in accordance with paragraph (iii) above; and

(b)

for the purposes of paragraphs (i), (ii) and (iii) above, if, where applicable, the Valuation Day of any Non-Predominant Reference Security does not fall on the same Valuation Day as the Predominant Reference Security, then the VWAP or, as the case may be, the Closing Price of any such Non-Predominant Reference Security shall be calculated using the relevant VWAP or, as the case may be, the Closing Price applicable on the first Valuation Day for such Non-Predominant Reference Security immediately preceding the Valuation Day for the Predominant Reference Security.

“Daily Relevant Proportion” means, for each Valuation Day in the relevant Calculation Period, a ratio determined by the Issuer as follows:

(i)

if the CMV on such Valuation Day is less than or equal to 90 per cent. of the Outstanding Amount (as defined below) (the “Minimum Threshold Amount”), 100 per cent.

(ii)

if the CMV on such Valuation Day is less than the Maximum Threshold Amount (as defined below) but greater than the Minimum Threshold Amount, the following:

LT	; and
CMV

(iii)

if the CMV on such Valuation Day is greater than or equal to 140 per cent. of the Outstanding Amount (the “Maximum Threshold Amount”), the following:

1 — (	UT-LT	)
	CMV

where:

“LT” means an amount in US dollars (rounded to the nearest cent with half a cent being rounded down) equal to the Minimum Threshold Amount; and

“UT” means an amount in US dollars (rounded to the nearest cent with half a cent being rounded down) equal to the Maximum Threshold Amount.

“Distribution” means, in respect of any Reference Property, any cash, property or other assets paid, made or transferred by or on behalf of, or charged and provided for in the accounts of, the relevant issuer of or obligor under any such Reference Property to holders or owners of such Reference Property, including, but not limited to, evidence of indebtedness, interest, dividends, income, benefits or other rights derived from, and the granting for free of additional Reference Securities or other property, assets or rights, subscription rights or put-options against the issuer of, or obligor under, any such Reference Property.

“Early Closure” means the closure on any Trading Day of the Stock Exchange prior to its scheduled weekday closing time unless such earlier closing time is announced by such Stock Exchange at least one hour prior to the actual closing time for the regular trading session on such Stock Exchange on such Trading Day.

“Exchange Disruption” means, in respect of any publicly-traded Reference Security, any event (other than a Trading Disruption or an Early Closure) that disrupts or impairs (in the reasonable opinion of the Issuer) the ability of market participants in general to effect transactions in, or obtain market values for, such Reference Security on the relevant Stock Exchange.

“Holder’s Cash Amount” means all cash which has ceased to be Reference Property pursuant to Condition 5(e), other than cash that constitutes any part of the Non-Deliverable Cash Amount.

“Holder’s Cash Amount per Note” means, with respect to each Note to be redeemed, a fraction of the Holder’s Cash Amount as at the relevant Notification Date, Redemption Date or, as the case may be, the Maturity Date, the numerator of which fraction shall be one and the denominator of which shall correspond to the total number of Notes (including the Note which is being redeemed) which are outstanding at such time (excluding for this purpose the number of Notes in respect of which the Optional Redemption Right has been exercised where the relevant Holder’s Cash Amount has not yet been delivered, as well as such undelivered part of the Holder’s Cash Amount).

“Holder’s Reference Property Value” means, in relation to each Note being redeemed, the sum of the CMV as determined on each Valuation Day of the Reference Property multiplied by a ratio equal to one minus the Daily Relevant Proportion or, as the case may be, one minus the Minimum Proportion in the relevant Calculation Period, divided by the number of Valuation Days in the relevant Calculation Period.

“Mandatory Redemption” means a redemption of the Notes pursuant to the provisions of Conditions 5(a), (c) or (d).

“Market Disruption Event” means, in respect of any publicly-traded Reference Security, the occurrence or existence of (i)(a) a Trading Disruption or (b) an Exchange Disruption, in each case on any relevant Trading Day and which the Calculation Agent reasonably determines is material, or (ii) an Early Closure.

“Minimum Proportion” means the Relevant Proportion of any Reference Property per Note which would be retained assuming CMV is equal to the Maximum Threshold Amount on each Trading Day in the relevant Calculation Period (i.e., 64.2857 per cent. of the Reference Property per Note).

“Non-Deliverable Cash Amount” means the aggregate of all Cash Amounts calculated in accordance with Condition 5(e) from time to time and held by the Issuer and not subject to distribution in accordance with Condition 5(f).

“Non-Predominant Reference Security” means, where relevant, any Reference Security other than the Predominant Reference Security.

“NYSE” means the New York Stock Exchange.

“Optional Redemption Right” has the meaning provided in Condition 6(a).

“Outstanding Amount” has the meaning provided in Condition 5(c).

“Predominant Reference Security” means, if at any time there is more than one type or series of Reference Security in the Reference Property, such type or series of Reference Security which the Calculation Agent reasonably considers to represent the largest proportion or weighting in the Reference Property.

“Redemption Date” means the relevant date fixed for redemption of any Notes.

“Redemption Period” means, subject to Condition 9(b), the period commencing on and including February 15, 2006 to and including the date which is 35 Trading Days prior to the Maturity Date.

“Reference Property” means, initially, the 109,460,088 Shares constituting the initial Reference Property, and subsequently such Reference Securities and/or other property constituting for the time being the Reference Property in accordance with these Conditions.

“Reference Property per Note” means, with respect to each Note to be redeemed, a fraction of the Reference Property, the numerator of which fraction shall be one and the denominator of which shall correspond to the total number of Notes (including the Note which is being redeemed) which are outstanding at such time (excluding for this purpose the number of Notes in respect of which the Optional Redemption Right has been exercised where the Holder’s Reference Property Value has not yet been paid, as well as the amount of Reference Property reflected in any such Holder’s Reference Property Value), such fraction of the Reference Property initially comprising 5,473.0044 Shares.

“Reference Security” and “Reference Securities” means any share, option, warrant, bond, debenture, or other negotiable or transferable security or instrument forming part of the Reference Property, subject to adjustment in accordance with these Conditions.

“Relevant Proportion” means the sum, calculated by the Issuer, of the Daily Relevant Proportions for each Valuation Day in the relevant Calculation Period divided by the number of Valuation Days in such Calculation Period.

“Relevant Rate” means on any day, and, in respect of the conversion of one currency into another currency, the rate of exchange between such currencies appearing on or derived from screen page FXC on the Bloomberg screen (or any successor screen page) at 10.00 a.m. (New York time) on that day, or, if that page is not available or that rate of exchange does not appear on that page on that day, the rate of exchange between such currencies appearing on such other screen or information service, or determined in such other manner, as the Issuer shall determine.

“Revocation Date” means the date specified as such in a Notice of Revocation and which shall be not earlier than 10 days prior to the first day of the relevant Calculation Date.

“Settlement Date” means the date for the payment of the redemption price of the Notes pursuant to these Conditions, which shall be the sixth Trading Day following the end of the relevant Calculation Period.

“Stock Exchange” means the NYSE, provided that for the purposes of these Conditions, except where the context otherwise requires, references to the Stock Exchange shall, if the Reference Securities or the relevant Reference Securities are not listed on the NYSE at the relevant time, be construed as references to such other regulated stock exchange or automated quotation system located in a major financial centre within the United States of America or to any other similarly regulated markets on which Reference Securities or the relevant Reference Securities are primarily so listed or quoted at such time, as selected by the Issuer, provided that if there is more than one, preference will be given to the regulated stock exchange or automated quotation system with the highest average trading volume of Reference Securities or the relevant Reference Securities.

“Trading Day” means, in respect of any publicly-traded Reference Security forming part of the Reference Property at the relevant time, any Business Day on which the relevant Stock Exchange is open for trading other than a day on which an Early Closure occurs.

“Trading Disruption” means, in respect of any publicly-traded Reference Security, any suspension of, or limitation imposed on, trading by the relevant Stock Exchange or otherwise, and whether by reason of movements in price exceeding limits permitted by such Stock Exchange or otherwise relating to such Reference Security.

“US dollars” means the currency of the United States of America.

“Valuation Day” means (i) in respect of any publicly-traded Reference Security, the relevant Trading Day and (ii) in respect of any non-publicly-traded Reference Security or other property or asset forming part of the Reference Property at the relevant time, the Business Day falling on such Trading Day.

“Optional Redemption” means a redemption of the Notes pursuant to these Conditions, other than a Mandatory Redemption.

“VWAP” means, in respect of any publicly-traded Reference Securities forming part of the Reference Property on any Valuation Day, the volume-weighted average price for such Reference Securities on the NYSE on the relevant Valuation Day appearing on or derived from screen page VAP on the Bloomberg screen (or any successor or

alternative screen page) (or, if no volume-weighted average price is reported, the price calculated by the Calculation Agent in its sole discretion having regard to available market data); provided that, if at any time after the commencement of the relevant Calculation Period and prior to the relevant Settlement Date, the publicly-traded Reference Securities shall have been quoted ex-dividend, ex-Distribution or ex-any other entitlement to another security or asset and during some other part of such period shall have been quoted cum-dividend, cum-Distribution or cum-any other entitlement to another security or asset, then the trading prices on the Valuation Days during such period on which the publicly traded Reference Securities shall have been quoted cum-dividend, cum-Distribution or cum-any other entitlement to another security or asset shall, for the purpose of this definition, be deemed to be the amount thereof reduced by an amount equal to the value of such dividend, Distribution or other entitlement per publicly-traded Reference Security. If the Reference Securities are not listed on the NYSE, or no bid and ask prices are available, the respective quotations or prices on the principal national or regional securities exchange on which such Reference Securities are listed are decisive, rounded to four decimal places (with 0.00005 being rounded up). In the absence of one or more such listings, the Issuer will determine the VWAP on the basis of such quotations or other information as it considers appropriate, and any such determination will be conclusive.

(c)

Early Mandatory Redemption at the option of the Noteholder

On giving not less than 5 nor more than 30 Trading Days’ notice to the Issuer prior to the commencement of the relevant Calculation Period in respect of such redemption in accordance with Condition 13 (which notice shall be irrevocable) (a “Redemption Notice”), the Noteholder may require the Issuer to redeem all, or (in the case of (i) below) all or part only, of the Outstanding Amount of each Note outstanding on the Redemption Date set out in such notice:

(i)

at any time on or after February 15, 2006; or

(ii)

at any time if the aggregate principal amount of Notes outstanding at such time is less than 10 per cent. of the aggregate principal amount of Notes originally issued,

provided that (x) in the case of a redemption of part only of the Outstanding Amount of each Note, the minimum principal amount of a Note that may be redeemed shall be US$5,000 and (y) no redemption of Notes (other than a redemption in whole) shall be effected if, as a result thereof, the Outstanding Amount of each Note would be less than US$30,000.

In the case of a partial redemption the Redemption Notice shall notify the Issuer of the principal amount of each Note to be redeemed and, following the relevant Settlement Date, the principal amount of each Note that shall remain outstanding thereafter (the “Outstanding Amount”) shall be reduced accordingly.

In the case of (i) above, the Notes will be redeemed (in whole or in part, as the case may be) by payment to the Noteholder in respect of each such Note held by the Noteholder of (i) the proportion of the Holder’s Reference Property Value plus (ii) the proportion of any Holder’s Cash Amount per Note not previously distributed in accordance with Condition 5(f), such Holder’s Cash Amount per Note being calculated as at the relevant Redemption Date, less (iii) the proportion of the Holder’s Call Premium Amount, in each case calculated as at the last day of the relevant Calculation Period, that is pro rata to the proportion of the Outstanding Amount being redeemed.

In the case of (ii) above, the Notes will be redeemed (in whole but not in part) by payment to the Noteholder in respect of each Note held by it of (i) the Holder’s Reference Property Value and (ii) any Holder’s Cash Amount per Note not previously distributed in accordance with Condition 5(f), such Holder’s Cash Amount per Note being calculated as at the relevant Redemption Date, in each case calculated as at the last day of the relevant Calculation Period.

(d)

Early Mandatory Redemption following an Event of Default

The Issuer shall, on a date determined by the Issuer and notified to the Noteholder falling within 15 Trading Days of any notice delivered by the Noteholder of the occurrence of any Event of Default arising pursuant to Condition 12(c), redeem the Notes (in whole but not in part) by delivering to the Noteholder in respect of each Note held by it, (i) the Holder’s Reference Property Value, and (ii) any Holder’s Cash Amount per Note not previously distributed in accordance with Condition 5(f), such Holder’s Cash Amount per Note being calculated as at the relevant Redemption Date, less (iii) the Holder’s Call Premium Amount.

(e)

Cash Amount Calculation

On the occurrence of a Cash Amount Calculation Event:

(i)	the Issuer shall calculate the CMV, the Daily Cash Proportion per Note on each Valuation Day in the Averaging Period and the Cash Amount per Note,

(ii)	the Outstanding Amount per Note shall be reduced with immediate effect by the average of the Daily Cash Proportions over the Averaging Period,

(iii)

the Cash Amount shall no longer form part of the Reference Property and shall be added to the Non-Deliverable Cash Amount,

(iv)	any cash not forming part of the Cash Amount shall no longer form part of the Reference Property and shall be added to the Holder’s Cash Amount, and

(v)	the Issuer shall give notice in accordance with Condition 13 to the Noteholder as soon as practicable following the end of the Averaging Period of the Cash Amount, the Holder’s Cash Amount, the Non-Deliverable Cash Amount, the Reference Property and the Outstanding Amount.

For the purposes of these Conditions,

“Averaging Period” shall mean the period of five consecutive Trading Days commencing immediately following the day on which the Cash Amount Calculation Event shall have occurred.

“Cash Amount” means, with respect to each Note, an amount in US dollars calculated in accordance with the following formula:

CA = (ADP x C) + (PA x A)

Where:

“A” means the average of the Daily Cash Proportions per Note over the Averaging Period;

“ADP” means the average of the Daily Relevant Proportions per Note over the Averaging Period;

“C” means the average amount of cash comprised in Reference Property per Note over the Averaging Period;

“CA” means the Cash Amount per Note; and

“PA” means the Holder Call Premium Amount per Note calculated by reference to the table set out below.

A “Cash Amount Calculation Event” shall be deemed to have occurred if over any period of 5 consecutive Trading Days the Reference Property comprises cash having a value in excess of 5 per cent. of the CMV of the Reference Property. The Issuer shall deliver a notice within 5 Trading Days of the circumstances triggering a Cash Amount Calculation Event having occurred.

“Daily Cash Proportion” means, with respect to each Note, the proportion of the cash comprised in the Reference Property attributable to each Note calculated as a fraction, the numerator of which shall be the amount of such cash per Note on the relevant Valuation Day in the Averaging Period expressed in US dollars and the denominator of which shall be the CMV on such Valuation Day also expressed in US dollars.

“Holder’s Call Premium Amount” means an amount in US dollars equal to the percentage set out in the table below of the Outstanding Amount per Note immediately prior to the relevant Settlement Date calculated by reference to the average CMV (expressed as a percentage of such Outstanding Amount) during the relevant Calculation Period, and provided that if the relevant average CMV falls between two figures and/or two dates in the table below, the relevant amount shall be determined by linear interpolation.

	For the three-month period beginning:
	2006						2007
Average CMV (as a % of the Outstanding Amount)	15 February		15 May		15 August		15 November		15 February		15 May		15 August
<110%	zero		zero		zero		zero		zero		zero		zero
110%	zero		zero		zero		zero		zero		zero		zero
115%	0.83	%	0.60	%	0.35	%	0.09	%	zero		zero		zero
120%	3.51	%	3.08	%	2.56	%	1.94	%	1.22	%	0.33	%	zero
125%	6.32	%	5.71	%	4.95	%	4.01	%	2.86	%	1.32	%	zero
130%	9.28	%	8.51	%	7.55	%	6.33	%	4.83	%	2.75	%	zero
135%	12.40	%	11.49	%	10.36	%	8.94	%	7.17	%	4.71	%	zero
140%	15.68	%	14.67	%	13.41	%	11.83	%	9.88	%	7.21	%	zero
145%	14.12	%	13.03	%	11.68	%	10.00	%	7.96	%	5.24	%	zero
150%	12.72	%	11.56	%	10.16	%	8.43	%	6.38	%	3.75	%	zero
155%	11.46	%	10.27	%	8.84	%	7.11	%	5.11	%	2.67	%	zero
160%	10.34	%	9.14	%	7.70	%	6.00	%	4.10	%	1.90	%	zero
165%	9.35	%	8.14	%	6.73	%	5.09	%	3.31	%	1.39	%	zero
170%	8.47	%	7.28	%	5.90	%	4.34	%	2.70	%	1.05	%	zero
175%	7.70	%	6.54	%	5.20	%	3.73	%	2.23	%	0.83	%	zero
180%	7.03	%	5.89	%	4.62	%	3.24	%	1.88	%	0.69	%	zero
185%	6.44	%	5.34	%	4.13	%	2.84	%	1.62	%	0.61	%	zero
190%	5.92	%	4.87	%	3.72	%	2.53	%	1.43	%	0.56	%	zero
195%	5.47	%	4.46	%	3.38	%	2.28	%	1.29	%	0.53	%	zero
200%	5.08	%	4.12	%	3.09	%	2.08	%	1.19	%	0.51	%	zero
205%	4.74	%	3.82	%	2.86	%	1.93	%	1.12	%	0.50	%	zero
210%	4.45	%	3.57	%	2.67	%	1.80	%	1.06	%	0.49	%	zero
215%	4.20	%	3.36	%	2.51	%	1.71	%	1.02	%	0.49	%	zero
220%	3.97	%	3.18	%	2.38	%	1.63	%	0.99	%	0.49	%	zero
225%	3.78	%	3.03	%	2.27	%	1.57	%	0.97	%	0.48	%	zero
230%	3.61	%	2.90	%	2.18	%	1.52	%	0.96	%	0.48	%	zero
235%	3.47	%	2.78	%	2.10	%	1.48	%	0.94	%	0.48	%	zero
240%	3.34	%	2.69	%	2.04	%	1.45	%	0.93	%	0.47	%	zero
245%	3.23	%	2.61	%	1.99	%	1.43	%	0.93	%	0.47	%	zero
250%+	3.14	%	2.54	%	1.95	%	1.41	%	0.92	%	0.47	%	zero

For the purposes of these Conditions, “cash” shall include notes, bonds, debentures, loan stock or other evidences of indebtedness that are not linked to, or convertible, exchangeable or exercisable into, or give any right of subscription for or acquisition of, any equity or instrument with equity-like features (each, a “Cash Instrument”).

(f)

Optional Distribution of Holder’s Cash Amount

The Noteholder may, at any time and at its option, on giving not less than 10 and not more than 60 Trading Days’ notice in accordance with Condition 13 require the Issuer to distribute the Holder’s Cash Amount per Note in whole or in part to the Noteholder.

6	OPTIONAL REDEMPTION AND PROCEDURE

(a)

Optional Redemption by Issuer

At any time during the Redemption Period, and except as otherwise provided herein, the Issuer will have the right (the “Optional Redemption Right”) to redeem each of the Notes by payment of (i) a Holder’s Reference Property Value, calculated on the basis of a Relevant Proportion equal to the Minimum Proportion of the Reference Property per Note,

such Reference Property per Note being determined as at the Notification Date (as defined in Condition 6(b)) and (ii) any Holder’s Cash Amount per Note not previously distributed in accordance with Condition 5(f).

Exercise of the Optional Redemption Right may not be made in respect of part only of a Note.

(b)

Procedure for Redemption

As a precondition to any payment of the redemption price pursuant to a Mandatory Redemption or an Optional Redemption, the Noteholder shall be required to deliver the relevant Note or Notes together with a duly executed redemption notice in, or substantially in, the form scheduled hereto (each an “Redemption Notice”) to the Issuer.

The Redemption Notice will be considered given on the Trading Day immediately following the date on which the relevant Note or Notes and the Redemption Notice are deposited with the Issuer, before 14.00 hours on a Business Day. The date on which such Redemption Notice is considered to have been so given shall be the “Notification Date”. The Redemption Notice shall include the number and account name of a US dollar account to which the Holder’s Reference Property Value and Holder’s Cash Amount (if any) is to be paid by or on behalf of the Issuer.

The Issuer shall deliver notice of any redemption pursuant to Conditions 5(a), 5(d) or 6(a) not less than 2 Business Days prior to the date of commencement of the relevant Calculation Period. If, in the case of any such redemption, the Redemption Notice and the relevant Note or Notes are not delivered to the Issuer by not later than 3 calendar months following the relevant Settlement Date, then the Holder’s Reference Property Value and the Holder’s Cash Amount per Note in respect of the relevant Note or Notes shall be retained by the Issuer.

Once delivered to the Issuer, a Redemption Notice will be irrevocable. Any determination as to whether any purported Redemption Notice has been duly completed and properly delivered shall be made by the Issuer and shall, save in the case of a manifest error, be conclusive and binding on the Issuer and the Noteholder.

7	SETTLEMENT AND OTHER MISCELLANEOUS PROVISIONS

(a)

Settlement

The Issuer shall notify the Noteholder, no later than 17.00 hours (London time) on the fifth Trading Day immediately preceding the relevant Settlement Date, of the Holder’s Reference Property Value to be paid by or on behalf of the Issuer to the Noteholder pursuant to Conditions 5 or 6, as well as, where applicable, any cash amount (including any Holder’s Cash Amount) due to each Noteholder.

The Issuer shall cause, on or before the relevant Settlement Date, the Holder’s Reference Property Value, the Holder’s Cash Amount per Note and any cash amount in respect of all Notes being redeemed to be paid to the Noteholder to such accounts as specified in the relevant Redemption Notices.

(b)

Miscellaneous provisions applicable to both Mandatory Redemption and Optional Redemption

(i)

Release of Reference Property

If any Reference Property is taken into account in determining a payment pursuant to these Conditions, the Holder’s Reference Property Value and the Relevant Proportion shall cease to be part of the Reference Property and the Reference Property shall be reduced accordingly.

(ii)

Effect of Suspension Periods

In the event of the Optional Redemption Rights being suspended in accordance with the provisions of Condition 9(b) during any period referred to in Condition 6(b), then any such period shall be extended by the number of days during which such Optional Redemption Rights were so suspended provided that, for the avoidance of doubt, no such period shall be extended beyond the last day of the Redemption Period.

8	REFERENCE PROPERTY ADJUSTMENTS

The following provisions shall govern the composition of the Reference Property as of any date of determination.

(a)

Initial Reference Property

The Reference Property will initially comprise 109,460,088 Shares and will be subject to adjustment only in accordance with Condition 8(b).

(b)

Adjustment Events

The composition of the Reference Property will be adjusted as follows under the following circumstances (an “Adjustment Event”).

(i)

Subdivision, Consolidation or Reclassification

If there shall have occurred a subdivision, consolidation or reclassification of any Reference Securities or any other Reference Property, then the securities resulting from such subdivision, consolidation or reclassification, so far as attributable to the Reference Securities or to such other Reference Property, shall be included in the Reference Property.

(ii)

Rights Issues

If further Reference Securities or any other Reference Property, or options, warrants or rights to subscribe, purchase or acquire, or convert into, Reference Securities or any other Reference Property shall be offered by way of rights to holders of Reference Securities or the owners of such other Reference Property (each a “Rights Issue”), then (provided that it is possible to sell such rights under applicable law and/or the terms of the Rights Issue) there shall be added to the Reference Property such number of Reference Securities or options, warrants or rights or such amount of such other Reference Property as the Issuer determines in its absolute discretion could be subscribed or purchased if sufficient rights were to be sold on an arm’s length basis in good faith to enable the whole of the balance of such rights to be taken up (after the deduction of costs and expenses in connection therewith), but only to the extent that the Issuer determines that, if it holds or were to hold the Reference Property, it is or would be able to sell these Reference Securities or options, warrants or rights or other Reference Property

For the avoidance of doubt, and without prejudice to the terms of this Condition 8(b)(ii), there shall be no obligation on the Issuer to hold the Reference Property or any other securities entitling it to subscribe rights offered to it in any Rights Issue.

Any Reference Securities or other Reference Property or options, warrants or rights that would be taken up pursuant to this paragraph shall be added to and form part of the Reference Property.

(iii)

Bonus Issues, Distributions and Reorganisations

If any one of the following occurs:

(a)

Reference Securities or other securities are issued credited as fully paid to holders of Reference Securities or the owners of such other Reference Property by way of capitalisation of profits or reserves or in lieu of the whole or any part of any cash dividend or interest under such Reference Securities or such other Reference Property;

(b)

any Distributions (in the case of a Cash Distribution, any excess over the Threshold Dividend Level (as defined below)) or Capital Repayments are distributed or made to holders of Reference Securities or the owners of such other Reference Property;

(c)

pursuant to any scheme of arrangement, reorganisation, amalgamation, merger, demerger or reconstruction of any company or companies (whether or not involving liquidation or dissolution), any further shares or other securities, any evidence of indebtedness or assets (including cash) are issued, transferred or distributed to holders of Reference Securities (other than in circumstances where Condition 8(b)(iv) shall apply),

then such shares, other securities, Distributions, Capital Repayments, evidences of indebtedness, cash or other assets received in relation to the relevant event, so far as attributable to the Reference Property, shall be included as part of the Reference Property.

A Cash Distribution(s) shall be in excess of the Threshold Dividend Level if in any 3-Month Period the aggregate of any Cash Dividends received by holders of the Reference Property, if divided pro rata among the number of

Notes then outstanding, would represent an amount in US dollars per Note which is more than 0.27365 per cent. of the Outstanding Amount of each Note.

“3-Month Period” means any period of 3 calendar months commencing on January 1 and ending on March 31, commencing on April 1 and ending on June 30, commencing on July 1 and ending on September 30 or commencing on October 1 and ending on December 31, as the case may be.

“Cash Distribution” means any Distribution and/or Capital Repayment (each as defined in Condition 5(b)) paid in cash (converted, if any such Cash Distribution is not made in US dollars, mutatis mutandis in accordance with the provisions of the definition of Closing Price contained in Condition 5(b) with references to the relevant Trading Day (as defined in Condition 5(b)) therein being deemed to be to the first Trading Day on or after the date on which any such Cash Distribution has been paid by the relevant issuer of, or the obligor under, the relevant Exchange Property).

(iv)

Other Adjustment Events

If the Issuer determines that an adjustment should be made to the Reference Property as a result of one or more events or circumstances not referred to in paragraphs (b)(i), (ii) or (iii) (even if the relevant event is, or circumstances are, specifically excluded from the operation of paragraphs (b)(i), (ii) or (iii)), the Issuer shall determine as soon as practicable what adjustment (if any) to the Reference Property is fair and reasonable to take account of such event(s) or circumstance(s) and the date on which such adjustment should take effect in accordance with such determination.

(c)

Notice

The Issuer shall give notice to the Noteholder in accordance with Condition 13 of any change (or, at the Issuer’s discretion, any prospective change) in the composition of the Reference Property as soon as reasonably practicable following such change (or, if the notice is given in respect of a prospective change, at such time as the Issuer shall determine), including details of the Reference Property per Note following such change and the Holder’s Cash Amount per Note.

(d)

Determination

If any doubt shall arise as to whether an Adjustment Event has occurred, or as to the adjustment to be made to the composition of the Reference Property or as to the Reference Property per Note, a determination by the Issuer in respect thereof shall (save in the case of manifest error) be final and binding on the Issuer and the Noteholder.

9	GENERAL OFFERS

(a)

Acceptance of Offers

In the event of an Offer (as defined below) for any Reference Security, adjustments to the Reference Property shall be determined on the basis of the Issuer’s designation of the Offer as accepted (and as to any alternative consideration) or rejected. The Issuer shall have absolute discretion (subject as set out below) to designate an Offer as accepted (and as to any alternative consideration) or rejected, provided that (1) the Issuer will only designate an Offer as rejected if the Issuer determines in its sole discretion that such a rejection would provide holders of the relevant Reference Securities with the highest value in the relevant circumstances, having consulted with the Calculation Agent as to the value of such Offer, (2) the Issuer will not designate an Offer as accepted (a) prior to the Specified Date (as defined below) in respect thereof and (b) unless the value of the consideration offered for the Reference Security pursuant to the Offer (the “Offer Consideration”) is equal to or greater than the value of the Reference Security, and (3) subject as provided in (1) above, (x) where the terms of the Offer are such that a holder of the Reference Security may decide whether to accept the Offer Consideration in the form of cash or securities, if the Issuer designates the Offer as accepted, the Issuer shall designate the type of Offer Consideration which has the highest value and (y) where the terms of the Offer are such that a holder of the Reference Security may decide whether to accept the Offer Consideration in the form of unlisted securities or an alternative form of Offer Consideration, if the Issuer designates the Offer as accepted, the Issuer shall designate the alternative form of Offer Consideration. For the avoidance of doubt, (i) the Issuer may announce its intention to designate

any Offer as accepted prior to the Specified Date, and (ii) if there are two simultaneous Offers, the Issuer may designate either Offer as accepted (including the Offer which includes the lower Offer Consideration) or neither Offer. The value of the Reference Security and the value of any Offer Consideration will be determined by the Issuer.

The Issuer will give notice of any Offer to the Noteholder in accordance with Condition 13 as soon as reasonably practicable following the date on which it becomes aware of such Offer.

If the Issuer designates an Offer as accepted (or, if the Reference Securities are subject to compulsory acquisition), then, with effect from the Final Date (as defined below), the Reference Property will consist, in whole or in part, of the consideration received by a shareholder accepting such Offer and making any election made or deemed to have been made by the Issuer or the consideration received pursuant to such compulsory acquisition, as the case may be.

Any cash amount or Cash Instruments included in the Offer Consideration in respect of any Reference Property may, at the Issuer’s sole discretion, be designated as reinvested in other Reference Securities or any other publicly traded equity securities otherwise receivable in the context of the relevant Offer by the holder of the relevant Reference Securities subject to the Offer. Otherwise, the cash amount or Cash Instruments shall be added to and form part of the Reference Property and shall be applied as provided in Condition 5(e).

The Issuer shall at all times be entitled at its discretion, in relation to any shares or other securities owned or controlled by it or in respect of which it is entitled to exercise voting rights (whether or not such shares or securities comprise Reference Property), to vote on, exercise its rights in respect of, or otherwise participate in (or in any such case refrain from doing so), any scheme of arrangement, reorganisation, amalgamation, merger, demerger or reconstruction of any company or companies (whether or not involving liquidation or dissolution), as it thinks fit.

For the purposes of this Condition 9(a):

“Final Date” means, in relation to any Offer, the date upon which the Offer Consideration is made available to the holders of the Reference Securities.

“Offer” means (i) a take-over bid or any other offer made to holders or substantially all holders (other than holders to whom such offer may not be made under applicable laws) of shares from a party other than the issuer of the relevant Reference Securities to acquire such shares and (ii) a self-tender or exchange offer or any consolidation, merger or statutory share exchange of any kind from the issuer of the relevant Reference Securities in respect of 10 per cent. or more of the outstanding amount of any class of Reference Securities pursuant to which the holders of such class of Reference Securities have the right to elect the consideration payable in connection therewith.

“Specified Date” means, in relation to any Offer, the final date for acceptance of such Offer which, if such Offer is, prior to such final date, extended, shall be the final date for acceptance of the extended Offer.

(b)

Suspension of Optional Redemption Rights

The Optional Redemption Rights shall be suspended from and including (i) the sixth Trading Day prior to the Specified Date (assuming the date then scheduled to be the Specified Date will in fact be the Specified Date) until the acceptance of the relevant Offer is withdrawn or the relevant Offer lapses or becomes or is declared unconditional in all respects and (ii) the date any vote is cast in relation to any applicable scheme referred to in paragraph (a) above, which is approved by the required majority, until the same is approved or rejected by any relevant judicial or other authority or otherwise is or becomes or is declared to be effective or the like. Notice of any such period of suspension (including the commencement and termination thereof) will be given by the Issuer to the Noteholder in accordance with Condition 13.

10	WITHHOLDING TAXES

All payments of amounts in respect of the Notes by or on behalf of the Issuer shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed on payments to be made by or on behalf of the Issuer by or within Switzerland or the United Kingdom or any political subdivision thereof or any authority therein or thereof having power to tax or of any other jurisdiction, unless such withholding or deduction is required by law. If any such withholding or deduction is so

required, the relevant payment shall be made subject to and after any such withholding or deduction and no additional amounts shall be payable by the Issuer in respect of such withholding or deduction.

If US federal income tax is required to be withheld from any payment to be made by or on behalf of the Issuer (other than as a result of (i) any action taken by or at the direction or request of the Noteholder, other than its holding of the Notes, or (ii) any connection between the Noteholder and the United States), the Issuer shall pay an amount necessary to ensure that the net amount actually received by the Noteholder after the withholding is equal to the amount that the Noteholder would have received had no such withholding been required.

11	CONSOLIDATION

The Issuer will not consolidate with or merge into any other corporation or corporations, unless the corporation formed by such consolidation, or into which the Issuer shall have been merged, shall have expressly assumed in writing the due and punctual payment of all amounts on all the Notes and the due and punctual performance and observance of all of the covenants and conditions of the Notes to be performed or observed by the Issuer. In case of any such consolidation or merger, and following such an assumption by the successor corporation, such successor corporation will succeed to and be substituted for the Issuer with the same effect as if it had been named herein. In the event of any such consolidation or merger, the Issuer or any successor corporation which will theretofore have become such in the manner described in this Condition 11 will be discharged from all obligations and covenants under the Notes and may be liquidated and dissolved.

12	EVENTS OF DEFAULT

The following will be Events of Default (each an “Event of Default”) with respect to the Notes:

(a)

Payment/Delivery Default

there is a default for more than 30 days in the payment of any amount in respect of, and/or in the delivery when due of any Reference Property in exchange for, the Notes; or

(b)

Breach of Agreement

there is a default in the performance by the Issuer of any other obligation under the Notes which is, in the opinion of the Issuer, incapable of remedy or which, being a default which is, in the opinion of the Issuer, capable of remedy, continues for 60 days after written notice of such default has been given by the Issuer to the Issuer; or

(c)

Bankruptcy

any order shall be made by any competent court or other authority or resolution passed by the Issuer for the dissolution or winding-up of the Issuer or for the appointment of a liquidator, receiver, administrator or manager of the Issuer or of all or a substantial part of their respective assets, or anything analogous occurs, in any jurisdiction, to the Issuer, other than in connection with a solvent reorganisation, reconstruction, amalgamation or merger; or

(d)

Insolvency

the Issuer shall stop payment or shall be unable to, or shall admit to creditors generally its inability to, pay its debts as they fall due, or shall be adjudicated or found bankrupt or insolvent, or shall enter into any composition or other arrangements with its creditors generally.

If any Event of Default shall have occurred, the Notes will become immediately due and redeemable in accordance with the provisions of Condition 5(d).

13	NOTICES

(a)

Addresses

Any communication shall be given by letter or fax, in the case of notices to the Issuer, to it at:

1 Finsbury Avenue

London EC2M 2PP

Fax: +44 20 7568 4127

Attention: Equity-Linked Team

With a copy to:

Fax: +44 20 7567 2364

Attention: Transactions Legal

And in the case of notices to the Noteholder, to it at:

Istithmar Media Investments

c/o Istithmar PJSC

Level 4, Emirates Office Tower

P.O. Box 17000

Dubai, UAE

Fax: +971 4390 3818

Attention: David Jackson

(b)

Effectiveness

Any such communication shall take effect, in the case of a letter, at the time of delivery, and in the case of a fax, at the time of despatch.

14	GOVERNING LAW

(a)	The Notes are governed by, and shall be construed in accordance with, the laws of the State of New York.

(b)

The Issuer agrees for the benefit of the Noteholder to submit to the jurisdiction of any New York State or United States federal court sitting in the Borough of Manhattan, The City of New York and of any court of its own corporate domicile, with respect to any dispute arising out of or relating to the Notes (“Proceedings”).

(c)

The Issuer irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such Proceedings brought in such a court and any claim that any such Proceedings brought in such a court have been brought in an inconvenient forum. The Issuer waives any rights to which it may be entitled on account of place of residence or domicile. To the extent that the Issuer has or hereafter may acquire any immunity from the jurisdiction of any court or from any legal process with respect to itself or its property, the Issuer waives such immunity in respect of its obligations under the Notes. The Issuer agrees that final judgement in any such Proceedings brought in such a court shall be conclusive and binding on it and may be enforced in any court to the jurisdiction of which the Issuer is subject by a suit upon such judgement or in any manner provided by law, provided that service of process is effected upon the Issuer in the manner specified in the following paragraph or as otherwise permitted by law. The Issuer irrevocably waives, to the fullest extent permitted by applicable law, any requirement or other provision of law, rule, regulation or practice which requires or otherwise establishes as a condition to the institution, prosecution or completion of any Proceedings (including appeals) arising out of or relating to any Notes, the posting of any bond or the furnishing, directly or indirectly, of any other bond.

(d)

The Issuer has appointed UBS Securities LLC which, as of the date hereof, maintains an office at 299 Park Avenue, New York, NY 10171, to receive, for it and on its behalf, service of process in any Proceedings. Such service shall be deemed completed on delivery to such process agent (whether or not it is forwarded to and received by the Issuer). If for any reason such process agent ceases to be able to act as such or no longer has an address in The City of New York, the Issuer irrevocably agrees to appoint a substitute process agent and shall immediately notify the Noteholder of such appointment. The Issuer agrees that for so long as any of the Notes remains outstanding, it will at all times have an authorized process agent in The City of New York upon whom process may be served in any Proceedings arising out of or relating to any Note. Nothing shall affect the right to serve process in any other manner permitted by law.

(e)

Nothing contained in this Condition 14 shall limit any right of the Noteholder to take Proceedings against the Issuer in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction, whether concurrently or not.

Schedule

Form of Redemption Notice

UBS AG, London Branch

US$2,000,000,000 Participation Notes due 2007 (the “Notes”)

Istithmar Media Investments as holder of the Notes hereby elects to redeem the principal amount of the Notes as set out below in accordance with the terms and conditions of the Notes.

Principal Amount of Notes: .....................................................

Condition pursuant to which the Notes are being redeemed: .............................................

We hereby request that the Holder’s Reference Property Value and Holder’s Cash Amount (if any) be paid to the following account:

Account number: .....................................................

Account name: .....................................................

Signed by: .....................................................

Title: .....................................................

Date: .....................................................

* If applicable delete square brackets.

EX-2 3 isththmar-13dex2_0216.htm

[LETTERHEAD OF UBS AG, LONDON BRANCH]

EXHIBIT 2

Istithmar PJSC and Istithmar Media Investments

Level 4, Emirates Office Tower

P.O. Box 17000

Dubai, UAE

15 February 2006

Dear Sirs,

We are writing to set out our agreement in relation to certain rights under the arrangement (the “Arrangement”) pursuant to which we are providing Istithmar PJSC and Istithmar Media Investments (together “Istithmar”) with economic exposure to US$2,000,000,000 of shares (the “Shares”) of Time Warner Inc. (“Time Warner”).

UBS shall at all times have absolute discretion to manage the Arrangement as it considers appropriate and, in particular, UBS shall have no obligation to own any Shares. In addition, to the extent that UBS holds voting rights with respect to Shares, UBS shall have absolute discretion to exercise those voting rights. During any period in which the Arrangement is in effect and UBS holds voting rights with respect to Shares, UBS shall give notice to Istithmar of any resolution of which it becomes aware to be proposed at a General Meeting of Time Warner and shall consult with Istithmar in relation to the exercise of its voting rights in respect of those Shares, up to the number of notional shares covered by the Arrangement. UBS shall also, where practicable, consult with Istithmar regarding any designations made under Section 9 of the Terms and Conditions of the Participation Notes. UBS may take into account the views of Istithmar regarding any such designations and the exercise of any such voting rights but is under no obligation to act in accordance with Istithmar’s views and shall have no liability to Istithmar or to any other person for any losses, damages or expenses whatsoever arising from the management of the Arrangement or its exercise of such voting rights, provided that UBS shall take no action which is contrary to the terms of the Arrangement. Istithmar acknowledges that an affiliate of UBS is acting as a financial advisor to Adelphia Communications Corporation and certain of its affiliates in their bankruptcy case in the United States Bankruptcy Court for the Southern District of New York. For the avoidance of doubt, it is understood that UBS may, in its discretion, abstain from voting the Shares or handle the voting of the Shares in any other manner that UBS deems appropriate to satisfy the Bankruptcy Court, US Trustee or interested parties in the Adelphia bankruptcy that such vote does not create any conflict of interest or perception of conflict of interest in connection with UBS' role in such bankruptcy.

The parties intend UBS to be the beneficial owner for US Federal Income Tax purposes of any Time Warner Shares that it may acquire in the course of its participation in the Arrangement. UBS and Istithmar each hereby agrees that it will not make any statement or representation to the effect that Istithmar or any of its affiliates is the owner of any Time Warner Shares by reason of Istithmar’s investment in the Arrangement, it being specified that this shall not prevent Istithmar from disclosing the fact that it has entered into the Arrangement, including without limitation in a report filed with the United States Securities and Exchange Commission pursuant to Section 13(d) of the United States Securities Exchange Act of 1934. UBS agrees that the issuance by Istithmar of a press release substantially in the form of Appendix E to the Commitment Letter dated January 31, 2006 between UBS Limited and Istithmar shall not be deemed the making of a statement or representation to the effect that Istithmar or any of its affiliates is the owner of any Time Warner Shares by reason of Istithmar’s investment in the Arrangement within the meaning of the preceding sentence. However, such characterisation is not binding on the Internal Revenue Service. The Internal Revenue Service may seek to recharacterise Istithmar or one of its affiliates as the beneficial owner of any such Shares. If this recharacterisation results in a US Indemnified Tax (as defined below), then UBS shall indemnify Istithmar or such affiliate for that US Indemnified

Tax so that Istithmar or such affiliate will be in the same position as if such US Indemnified Tax had never been imposed. If Istithmar or one of its affiliates receives any written claim from the US Internal Revenue Service that, if successful, would result in a US Indemnified Tax, Istithmar or such affiliate shall promptly notify UBS in writing of the claim. UBS shall have full control over the conduct of any contest concerning any such US Indemnified Tax.

“US Indemnified Tax” means any US federal withholding tax imposed on Istithmar or one of its affiliates in respect of any distribution or other payment characterised as a dividend for US tax purposes paid in respect of Time Warner Shares solely by reason of Istithmar’s investment in the Arrangement.

Upon termination of the Arrangement this letter shall terminate and have no further effect, except for the indemnification obligations of UBS in regard to US Indemnified Tax as described above, which shall continue indefinitely.

This letter is governed by and shall be construed in accordance with English law.

If the foregoing is in accordance with your understanding kindly sign and return to us a counterpart of this letter.

Yours faithfully,

UBS AG, LONDON BRANCH

	By: /s/ Derek Lowe	By: /s/ Mark Dalton
	Derek Lowe Managing Director	Mark Dalton Director

CONFIRMED AND ACCEPTED:

ISTITHMAR PJSC

By: /s/ David Jackson

David Jackson, Chief Investment Officer

ISTITHMAR MEDIA INVESTMENTS

By: /s/ David Jackson

David Jackson, Director

EX-3 4 isththmar-13dex3_0216.htm

EXHIBIT 3

Istithmar Media Investments Ltd.

February 3, 2006

Icahn Institutional Services LLC

767 Fifth Avenue, Suite 4700

New York, NY 10153

Gentlemen:

Istithmar Media Investments Ltd. (“IMI”) is a Cayman company, formed for the purpose of acquiring the Economic Exposure (as defined below) to, and possibly investing directly or indirectly in, common stock of Time Warner Inc. (“TWX” and such common stock, the “Shares”), provided, that IMI shall be under no obligation to acquire any such exposure or Shares. IMI is currently a direct wholly owned subsidiary of Istithmar PJSC, a Dubai private joint stock company (“Istithmar”). The purpose of this letter agreement (this “Agreement”) is to confirm the agreement of IMI to retain Icahn Institutional Services LLC (“IIS”), and IIS to serve, as the investment advisor to IMI with respect to the Economic Exposure to and possible investment in Shares. During the term of this Agreement, as IMI’s investment advisor, IIS will, through its principals (including Mr. Carl Icahn), from time to time as reasonably requested by IMI, consult with IMI with respect to the businesses and operations of TWX, the strategy which IIS and Icahn are employing with respect to their proposals for TWX, the valuation of the Shares and the market for the Shares, advise IMI with respect to its investments in the Shares and provide IMI with copies of any reports prepared by IIS or its advisors with respect to TWX or the Shares, but in each case only the extent permitted by applicable law and contractual obligations of IIS and its affiliates.

1. IIS’s services are intended to be advisory only. All decisions relating to IMI’s investments (including all determinations as to the acquisition, disposition or voting of any Shares or other securities) shall be made by IMI from time to time in its sole discretion. IIS will have no power or authority, and will have no responsibility or obligation, to make any investment, voting or other decision on IMI’s behalf with respect to any securities, nor will IIS have any liability to IMI or any of its affiliates arising from IMI’s investments, except as expressly set forth herein. IIS shall not be deemed to have any fiduciary or other duties to IMI or any of its affiliates by virtue of this Agreement except as expressly provided herein. IMI acknowledges that affiliates of IIS, as well as certain other persons with relationships with IIS that are contractual or that otherwise arise under applicable law, are investors in TWX and agrees that nothing contained in this Agreement shall restrict in any manner the right of IIS or any of its affiliates or such persons to make decisions relating to their respective investments (including all determinations as to the acquisition, disposition or voting of any Shares or other securities) in their sole discretion and without having to disclose such decisions to IMI. IMI further acknowledges that, as a result of the activities of IIS and certain of its affiliates and certain other persons with respect to TWX and the Shares, IIS and its principals may, from time to time, be

prohibited, by applicable law (including United States securities laws and proxy rules), contract or fiduciary duty to others, from disclosing to IMI, information concerning TWX and the intentions of IIS, its affiliates or such persons with respect thereto.

2. This Agreement shall come into effect on the date that IMI acquires the Economic Exposure to the Shares and will terminate upon the earliest to occur of (a) delivery on or prior to June 30, 2006 to IMI by IIS of a notice from IIS terminating its engagement hereunder (a “Termination Notice”) and (b) July 1, 2006; provided, however, that the provisions set forth in Sections 3(a), 3(b) and 4 below and the agreement of IMI to maintain the confidentiality of any advice or information received from IIS under this Agreement set forth in Section 5 below shall survive any termination of this Agreement.

3. In consideration of IIS’s investment advisory services under this Agreement, IMI agrees to pay IIS the following fees:

(a) in the event IMI sells any Shares (or reduces the number of Shares to which it has Economic Exposure) prior to the last day of the Measuring Period (as defined below), an amount (in the case of any sale or reduction prior to the termination of this Agreement, payable in U.S. dollars promptly following the consummation of each such sale or reduction, or in the case of any sale or reduction during the Measuring Period, payable in U.S. dollars on the second business day following the last day in the Measuring Period) equal to the product of: (x) 0.125; multiplied by (y) the excess, if any, of (i) the aggregate amount received (after payment of related brokerage fees, commissions, redemption premium and out-of-pocket costs and expenses related to such sale or reduction) by IMI in such sale or reduction, together with the amount of any extraordinary dividends or distributions received by IMI but only with respect to the number of such sold Shares actually owned by IMI prior to the date of sale (it being understood that with respect to extraordinary dividends or distributions paid with respect to Shares to which IMI has Economic Exposure, such extraordinary dividends or distributions will already be taken into account in the determination of the aggregate amount received by IMI in connection with any such reduction in the number of Shares to which IMI has Economic Exposure), over (ii) the IMI Notional Per Share Acquisition Cost (as defined below) multiplied by the number of the Shares sold.

(b) in the event IIS delivers a Termination Notice to IMI, an amount (payable in U.S. dollars on the second business day following the last day in the applicable Measuring Period) equal to the product of: (x) 0.125; multiplied by (y) the excess, if any, of (i) the sum of (1) the aggregate number of all Shares beneficially owned by IMI (or as to which IMI has Economic Exposure) on the last day of the Measuring Period (the “Retained Shares”), multiplied by the arithmetic average of the daily volume weighted average prices for the Shares traded on the New York Stock Exchange during normal trading hours, as published by Bloomberg (VAP screen) on each of the trading days in the applicable Measuring Period following the date of such termination, plus (2) with respect to the Retained Shares, the aggregate amount of any extraordinary dividends or distributions received by IMI (either directly or through a derivative instrument) prior to the date this Agreement is terminated over (ii) the IMI Notional Per Share Acquisition Cost multiplied by the number of the Retained Shares.

The “Measuring Period” shall be a number of consecutive trading days commencing on the first trading day following the termination date of this Agreement derived by dividing (i) the number of Shares beneficially owned by IMI (or as to which IMI has Economic Exposure) on the date of termination of this Agreement by (ii) the average daily volume for the Shares on the New York Stock Exchange for the ten trading days prior to the date of termination of this Agreement, and multiplying the result obtained by five.

IMI may, directly or indirectly, pledge, hypothecate, loan, assign, transfer, encumber, grant a security interest in, or otherwise convey any legal or beneficial interest in, Shares in connection with the financing of its investment activities. No such bona fide transaction shall be deemed to be a sale of Shares for purposes of determining a fee payable to IIS pursuant to this Section 3; provided, however, that any foreclosure or similar transfer of Shares to a pledgee or a holder of any security interest in any Shares upon enforcement of such security interest shall be deemed a sale pursuant to this Section 3. IMI shall provide IIS with such information regarding IMI’s acquisitions and sales of Shares (and the prices paid or received by IMI) promptly, and in any event within two business days, following any such acquisition or sale as necessary for IIS to determine the amount of any fees payable to it under this Agreement. IMI acknowledges that IIS has agreed to pay a portion of the fees it receives under this Agreement to Island IMI LLC.

4. Except in the case of bad faith, fraud, willful misconduct, gross negligence, violation of law or breach of this Agreement on the part of IIS or any of its affiliates (in which case IIS shall protect, indemnify, immunize and hold harmless IMI and its affiliates), IMI hereby agrees to and shall, protect, indemnify, immunize and hold harmless IIS from and against any and all losses, liabilities, costs, claims, damages, taxes, judgments and expenses incurred by IIS by reason of, based upon, arising out of, resulting from, associated with, in connection with, relating to, or otherwise involving, the breach by IMI of any representation, warranty or covenant of IMI contained herein. Except in the case of bad faith, fraud, willful misconduct, gross negligence, violation of law or breach of this Agreement on the part of IMI or any of its affiliates (in which case IMI shall protect, indemnify, immunize and hold harmless IIS), IIS hereby agrees to and shall, protect, indemnify, immunize and hold harmless IMI and its affiliates from and against any and all losses, liabilities, costs, claims, damages, taxes, judgments and expenses incurred by them by reason of, based upon, arising out of, resulting from, associated with, in connection with, relating to, or otherwise involving, the breach by IIS of any representation, warranty or covenant of IIS contained herein.

5. IMI intends to acquire an economic exposure to a number of Shares pursuant to certain financial arrangements into which IMI intends to enter (the “Economic Exposure”). Upon entering into such financial arrangements, IMI will notify IIS in writing of the number of Shares to which IMI has acquired the Economic Exposure and the notional per Share cost (including legal fees, advisory fees and other costs and expenses relating to the establishment of IMI and such financial arrangements) of acquiring the Economic Exposure (the “IMI Notional Per Share Acquisition Cost”). IMI and Istithmar represent that other than the foregoing arrangement, as of the effective date hereof, neither IMI nor Istithmar (nor any subsidiary, investment fund or other investment vehicle owned, managed or advised by Istithmar) shall be the beneficial owner of, or shall have any economic exposure to, any Shares and agree that Istithmar will not (nor will it permit any such subsidiary, investment fund or other investment vehicle to) acquire any Shares other than through IMI during the term of this Agreement. IIS

acknowledges that it is IMI’s position that IMI will not be the beneficial owner of any Shares to which IMI will have Economic Exposure. Neither IMI nor Istithmar nor any beneficial owner or affiliate of the foregoing shall disclose any of the advice or information received from IIS under this Agreement to any other person other than to (a) any person who becomes a beneficial owner of IMI provided that such person agrees as a condition to becoming a beneficial owner of IMI to maintain the confidentiality of such advice and information and not to acquire (or permit any subsidiary, investment fund or other investment vehicle owned, managed or advised by it to acquire) any Shares other through IMI during the term of this Agreement, and (b) the respective officers, directors, employees, attorneys and advisors of IMI, Istithmar or another beneficial owner of IMI who have a duty to maintain the confidentiality of such advice and information. IMI will not, during the term of this Agreement, have more than five beneficial owners. No current beneficial owner of IMI was, and no entity that becomes a beneficial owner of IMI during the term of this Agreement will be, formed for the purpose of investing in IMI. Each current beneficial owner of IMI is, and each person or entity that becomes a beneficial owner of IMI during the term of this Agreement will be, a "qualified purchaser" (as such term is defined in section 2(a)(51) of the Investment Company Act of 1940, as amended). Any amounts paid to IIS pursuant to this Agreement shall be paid by wire transfer from an account with a financial institution of which Istithmar is a customer, which financial institution is located in a country that is a member of the Financial Action Task Force on Money Laundering. IMI is not currently, and will not during the term of this Agreement be, acting as trustee, agent, representative or nominee for any other person with respect to transactions regarding the Shares contemplated hereby or the Economic Exposure. Each party acknowledges and agrees that each other party has represented that it does not possess any material nonpublic information concerning TWX as of the date hereof, nor will any party provide any other party with any material nonpublic information it may obtain from time to time during the term of this Agreement.

6. In the event that, prior to the termination of this Agreement, IMI acquires any options to acquire Shares or any other derivative instrument (other than the Economic Exposure), the value of which is derived by reference to the Shares or other equity securities of TWX, IMI and IIS shall in good faith agree on the fee to be paid in respect of any gain on such option or derivative instrument, it being agreed that the calculation of such fee will be based on the principles set forth in Section 3 of this Agreement.

7. This Agreement becomes effective on the date that IMI acquires the Economic Exposure to the Shares and gives IIS written notice thereof.

8. This Agreement may not be assigned by any party without the prior written consent of the other parties. This Agreement may be executed through the use of separate signature pages or in any number of counterparts and all such counterparts shall be deemed one and the same instrument. This Agreement may be modified or amended only by an agreement in writing executed by each of the parties hereto. Any party may waive in whole or in part any benefit or right provided to it under this Agreement, such waiver being effective only if contained in a writing executed by the waiving party. This Agreement and any dispute arising out of, relating to, or in connection with this Agreement shall be governed in all respects by the laws of the State of New York, without regard to conflicts of law principles. This Agreement embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof. This Agreement shall be binding upon and

inure solely to the benefit of the parties hereto and their respective successors and permitted assigns. Nothing herein shall be construed as conferring any benefit or obligation on any party other than the parties hereto.

9. Each of the parties hereto acknowledge that this agreement is the only agreement between the parties with respect to the Shares (other than each of IMI’s and IIS’s separate agreements with Island IMI LLC) and there is no contract, agreement, understanding or relationship between them with respect to voting, acquisition, disposition, holding or investment power over the Shares. However, it is the intention of the parties that IIS and IMI will each file Schedules 13D either separately or together with their affiliates in a timely manner following such time that the parties, collectively and with their affiliates and associates, would be deemed under Section 13(d) of the Securities Exchange Act of 1934 and the related rules and regulations thereunder, as amended, to be the beneficial owners of an aggregate number of the Shares of TWX common stock in excess of 5% of the outstanding Shares computed as required by Section 13(d), if they were deemed to be a group under Section 13(d).

[SIGNATURE PAGE FOLLOWS]

If the foregoing correctly sets forth the understanding between us, please so indicate on the enclosed signed copy of this agreement in the space provided therefor and return it to us, whereupon this Agreement shall constitute a binding agreement between us.

Very truly yours,

ISTITHMAR MEDIA INVESTMENTS LTD.

By /s/ David Jackson

David Jackson, Director

ISTITHMAR PJSC

By /s/ David Jackson

David Jackson, Chief Investment Officer

Accepted and agreed to as of

the date set forth above:

ICAHN INSTITUTIONAL SERVICES LLC

By /s/ Keith Cozza

Keith Cozza, Authorized Signatory

EX-4 5 isththmar-13dex4_0216.htm

EXHIBIT 4

[Letterhead of Istithmar PJSC]

February 3, 2006

Island IMI LLC

717 Fifth Avenue

18th Floor

New York, NY 10022

Gentlemen:

As you know we and one of our affiliates, Istithmar Media Investments Ltd. (“IMI”), have today entered into a financial advisory agreement (the “Financial Advisory Agreement”) with Icahn Institutional Services LLC (“Icahn”).

In consideration of your assistance in introducing us to Icahn and your advice in arriving at the Financial Advisory Agreement, we hereby agree that when, as and if IMI pays a fee to Icahn pursuant to the terms of Section 3 of the Financial Advisory Agreement, we will pay (or cause IMI to pay) to you concurrently a fee equal to 16% of the amount of such fee paid to Icahn less the amount provided for in the next sentence. We understand and acknowledge that you also have an agreement to receive from Icahn additional fees equal to 10% of the fees that IMI pays to Icahn pursuant to the terms of Section 3 of the Financial Advisory Agreement and we shall be entitled to deduct from the fees payable to you hereunder the amount of such fees actually received by you from Icahn. Thus, assuming that you receive the fees payable by Icahn, this will result in a net fee payable to you by IMI hereunder of 6% of the fees IMI pays to Icahn.

You are not, and will not hold yourself out to be, acting as an agent of IMI. IMI has not bestowed on you hereunder (or otherwise) any authority to bind IMI with respect to any matter whatsoever, including any matter relating to the investments contemplated by the Financial Advisory Agreement. IMI agrees and acknowledges that (i) you and your affiliates may perform services for Carl Icahn and his affiliates and may receive compensation from time to time from Carl Icahn and his affiliates, (ii) you shall have no responsibility for any of the matters set forth in the Financial Advisory Agreement (including, without limitation, for the performance of any investment that is the subject of the Financial Advisory Agreement), (iii) no such guarantee of investment performance, express or implied, is made or shall be inferred or construed as a result of this letter agreement and (iv) you are not providing legal or financial advice to IMI or any of its affiliates and shall have no obligation or liability with respect to the compliance by IMI and its affiliates with United States securities laws or other applicable laws. Furthermore, IMI and its affiliates have not relied upon any statements, claims or representations made by you or your affiliates with respect to Icahn or any of its affiliates.

IMI will (i) indemnify and hold harmless you and your members, officers, directors, employees, agents and affiliates (collectively, “Indemnitees”) from and against any and all actions and causes of action, claims and demands, suits, damages, costs, attorneys’ fees, expenses and claims (collectively, “Liabilities”) by, to or in favor of third parties arising out of, or in any way relating to,

this letter agreement or the Financial Advisory Agreement (including, without limitation, the investments contemplated thereby) and (ii) reimburse the Indemnitees for expenses (including reasonable attorneys’ fees) reasonably and properly incurred by an Indemnitee in defending any such Liability, provided that IMI will not be responsible for Liabilities to the extent that such Liabilities are found to have resulted from actions taken or omitted to be taken by the Indemnitee constituting Indemnitee’s gross negligence or willful misconduct.

IMI (for itself and on behalf of its successors and assigns) hereby releases and forever discharges you and each other Indemnitee from any and all actions and causes of action, claims and demands, suits, damages, costs, attorneys' fees, expenses and claims for any compensation, indemnification or benefits whatsoever, in law or in equity, which IMI or anyone claiming by, through or under IMI in any way might have or could have against you and/or the Indemnitees which arise out of, or are related to, the transactions contemplated hereby and/or by the Financial Advisory Agreement (including, without limitation, the investments contemplated thereby and the use of proceeds thereof) from the beginning of the world (a “Claim”), provided that the foregoing release and discharge shall not be applicable with respect to any Claim to the extent it arises out of, or is related to, any breach of this letter agreement by you or actions taken or omitted to be taken by you or any Indemnitee constituting you or such Indemnitee’s gross negligence or willful misconduct.

You understand that IMI may desire in the future to modify the structure of the fees that it pays to Icahn and IMI shall be entitled to do so to the extent that the amount which would have been payable to you hereunder in the absence of such modification is not materially reduced.

Any notices, requests, demands or other communications with respect to matters under this letter agreement shall be in writing and shall be delivered personally or by electronic mail to the party being served.

The contractual relations between the parties pursuant to this letter agreement, and all matters or disputes relating to the validity, construction, performance or enforcement hereof, shall be governed by and construed in accordance with the laws of the State of New York, United States of America (without application of the conflicts of law principles thereof). The parties further agree that any dispute, controversy or claim arising out of or relating to this letter agreement, or the breach, rescission or validity hereof (a “Dispute”) shall be finally settled by arbitration in accordance with the Arbitration Rules of the International Chamber of Commerce (the “ICC”) then in effect (the “Rules”), except as modified herein. The arbitration shall be held and the award issued in France. The arbitration proceedings shall be conducted, and the award shall be rendered, in the English language. There shall be three arbitrators. The parties shall each appoint one arbitrator in accordance with the Rules. The two arbitrators so appointed shall appoint a third arbitrator to serve as Chair of the tribunal, such appointment to be made within 20 days of the appointment of the second arbitrator. If any arbitrator has not been appointed within the time limits specified herein and in the Rules, such appointment shall be made by the ICC Court of Arbitration upon the written request of any party within 20 days of such request.

In the event of any dispute under or arising out of this letter agreement, the prevailing party in such dispute shall be entitled to recover from the non-prevailing party or parties, in addition to any damages and/or other relief that may be awarded, its reasonable costs and expenses (including reasonable attorneys’ fees) incurred in connection with prosecuting or defending the subject dispute.

The provisions of this letter agreement shall be enforceable independently of each of the others and its validity shall not be affected if any of the others is invalid. If any of those provisions is invalid but would be valid if some part of the provisions were deleted, the provision in question shall apply with such modification as may be necessary to make it valid.

This letter agreement will come into effect and terminate concurrently with the effectiveness or any termination, as the case may be, of the Financial Advisory Agreement except with respect to the following matters which shall survive the termination of this letter agreement: (a) your right to receive fees in respect of any fees payable by IMI to Icahn following termination of the Financial Advisory Agreement, (b) the indemnities and release set forth herein, (c) the governing law and dispute resolution provisions hereof and (d) the provisions of this paragraph. This letter agreement may not be assigned by any party without the prior written consent of the other party. This letter agreement may be executed through the use of separate signature pages or in counterparts and all such counterparts shall be deemed one and the same instrument. This letter agreement may be modified or amended only by an agreement in writing executed by each of the parties hereto. Any party may waive in whole or in part any benefit or right provided to it under this letter agreement, such waiver being effective only if contained in a writing executed by the waiving party. This letter agreement embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof.

[SIGNATURE PAGE FOLLOWS]

If the foregoing correctly sets forth the understanding between us, please so indicate on the enclosed signed copy of this letter agreement in the space provided therefor and return it to us, whereupon this letter agreement shall constitute a binding agreement between us.

Very truly yours,

ISTITHMAR PJSC

By /s/ David Jackson

David Jackson

Chief Investment Officer

Accepted and agreed to as of

the date set forth above:

ISLAND IMI LLC

By /s/ Andrew Farkas

Andrew Farkas

President

EX-5 6 isththmar-13dex5_0216.htm

CUSIP No. 887317 10 5

13D

EXHIBIT 5

JOINT ACQUISITION STATEMENT

PURSUANT TO RULE 13d-1(k)

The undersigned acknowledge and agree that the foregoing statement on Schedule 13D, is filed on behalf of the undersigned and that all subsequent amendments to this statement on Schedule 13D, shall be filed on behalf of each of the undersigned without the necessity of filing additional joint acquisition statements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning him or it contained therein, but shall not be responsible for the completeness or accuracy of the information concerning the others, except to the extent that he or it know or has reason to believe that such information is inaccurate.

Dated: February 16, 2006	ISTITHMAR PJSC
	/s/ Muneef Tarmoom
	By: Muneef Tarmoom
	Title: Chief Executive Officer


	ISTITHMAR MEDIA INVESTMENTS
	/s/ David Jackson
	By: David Jackson
	Title: Director

-----END PRIVACY-ENHANCED MESSAGE-----