UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934	
For the quarterly period ended September 30, 2008

or

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934	
For the transition period from __________ to __________

Commission File Number 1-985

INGERSOLL-RAND COMPANY LIMITED
(Exact name of registrant as specified in its charter)

Bermuda	 	75-2993910	
(State or other jurisdiction of	 	(I.R.S. Employer	
incorporation or organization)	 	Identification No. )	

Clarendon House
2 Church Street
Hamilton HM 11, Bermuda
(Address of principal executive offices)

(441) 295-2838
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES  x  NO  o  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x  Accelerated filer  o   Non-accelerated filer  o   Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES  o  NO  x

The number of Class A common shares outstanding as of October 31, 2008 was 318,786,336.

INGERSOLL-RAND COMPANY LIMITED

FORM 10-Q

INDEX

PART I	FINANCIAL INFORMATION	 	
 	 	 	 	 	
 	Item 1	-	Financial Statements	 	
 	 	 	 	 	
 	 	 	Condensed Consolidated Income Statement for the three and nine months ended September 30, 2008 and 2007	1	
 	 	 	 	 	
 	 	 	Condensed Consolidated Balance Sheet at September 30, 2008 and December 31, 2007	2	
 	 	 	 	 	
 	 	 	Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2008 and 2007	3	
 	 	 	 	 	
 	 	 	Notes to Condensed Consolidated Financial Statements	4	
 	 	 	 	 	
 	Item 2	-	Management's Discussion and Analysis of Financial Condition and Results of Operations	39	
 	 	 	 	 	
 	Item 3	-	Quantitative and Qualitative Disclosures about Market Risk	62	
 	 	 	 	 	
 	Item 4	-	Controls and Procedures	62	

PART II	OTHER INFORMATION	 	
 	 	 	 	 	
 	Item 1	-	Legal Proceedings	62	
 	 	 	 	 	
 	Item 1A	-	Risk Factors	64	
 	 	 	 	 	
 	Item 6	-	Exhibits	68	
 	 	 	 	 	
SIGNATURES	71	
 	 	 	 	 	
CERTIFICATIONS	 	

i

 
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements

INGERSOLL-RAND COMPANY LIMITED
CONDENSED CONSOLIDATED INCOME STATEMENT
(Unaudited)

 	 	Three months ended	 	Nine months ended	 	
 	 	September 30,	 	September 30,	 	
In millions, except per share amounts	 	2008	 	2007	 	2008	 	2007	 	
Net revenues	 	$	4,313.2	 	$	2,239.0	 	$	9,557.3	 	$	6,439.8	 	
Cost of goods sold	 	 	(3,209.4	)	 	(1,608.2	)	 	(6,946.4	)	 	(4,613.8	)	
Selling and administrative expenses	 	 	(756.4	)	 	(354.5	)	 	(1,654.9	)	 	(1,067.0	)	
Operating income	 	 	347.4	 	 	276.3	 	 	956.0	 	 	759.0	 	
Interest expense	 	 	(83.7	)	 	(33.3	)	 	(156.4	)	 	(99.8	)	
Other, net	 	 	(3.7	)	 	(7.6	)	 	61.4	 	 	0.9	 	
Earnings before income taxes	 	 	260.0	 	 	235.4	 	 	861.0	 	 	660.1	 	
Provision for income taxes	 	 	(26.3	)	 	(37.8	)	 	(153.2	)	 	(97.9	)	
Earnings from continuing operations	 	 	233.7	 	 	197.6	 	 	707.8	 	 	562.2	 	
Discontinued operations, net of tax	 	 	(6.0	)	 	69.0	 	 	(42.4	)	 	886.0	 	
Net earnings	 	$	227.7	 	$	266.6	 	$	665.4	 	$	1,448.2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings per common share:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	$	0.73	 	$	0.70	 	$	2.40	 	$	1.90	 	
Discontinued operations	 	 	(0.02	)	 	0.24	 	 	(0.14	)	 	2.99	 	
Net earnings	 	$	0.71	 	$	0.94	 	$	2.26	 	$	4.89	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted earnings per common share:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	$	0.72	 	$	0.68	 	$	2.38	 	$	1.87	 	
Discontinued operations	 	 	(0.02	)	 	0.24	 	 	(0.14	)	 	2.95	 	
Net earnings	 	$	0.70	 	$	0.92	 	$	2.24	 	$	4.82	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Dividends per common share	 	$	0.18	 	$	0.18	 	$	0.54	 	$	0.54	 	
See accompanying notes to condensed consolidated financial statements.

1

INGERSOLL-RAND COMPANY LIMITED 
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)

 	 	September 30,	 	December 31,	 	
In millions	 	2008	 	2007	 	
ASSETS	 	 	 	 	 	
Current assets:	 	 	 	 	 	
Cash and cash equivalents	 	$	741.5	 	$	4,735.3	 	
Accounts and notes receivable, net	 	 	2,791.8	 	 	1,660.7	 	
Inventories	 	 	1,795.1	 	 	827.2	 	
Other current assets	 	 	795.1	 	 	477.5	 	
Total current assets	 	 	6,123.5	 	 	7,700.7	 	
 	 	 	 	 	 	 	 	
Property, plant and equipment, net	 	 	2,085.3	 	 	904.9	 	
Goodwill	 	 	9,386.3	 	 	3,993.3	 	
Intangible assets, net	 	 	6,101.3	 	 	724.6	 	
Other noncurrent assets	 	 	2,078.7	 	 	1,052.7	 	
Total assets	 	$	25,775.1	 	$	14,376.2	 	
 	 	 	 	 	 	 	 	
LIABILITIES AND EQUITY	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	
Accounts payable	 	$	1,265.2	 	$	721.2	 	
Accrued compensation and benefits	 	 	511.1	 	 	338.9	 	
Accrued expenses and other current liabilities	 	 	1,727.9	 	 	1,434.6	 	
Short-term borrowings and current maturities of long-term debt	 	 	2,730.6	 	 	741.0	 	
Total current liabilities	 	 	6,234.8	 	 	3,235.7	 	
 	 	 	 	 	 	 	 	
Long-term debt	 	 	2,785.1	 	 	712.7	 	
Postemployment and other benefit liabilities	 	 	1,296.5	 	 	941.9	 	
Deferred income taxes	 	 	2,804.9	 	 	539.9	 	
Other noncurrent liabilities	 	 	1,847.6	 	 	940.6	 	
Minority interests	 	 	103.4	 	 	97.5	 	
 	 	 	 	 	 	 	 	
Shareholders' equity:	 	 	 	 	 	 	 	
Class A common shares	 	 	318.8	 	 	272.6	 	
Capital in excess of par value	 	 	2,243.5	 	 	-	 	
Retained earnings	 	 	7,898.7	 	 	7,388.8	 	
Accumulated other comprehensive income (loss)	 	 	241.8	 	 	246.5	 	
Total shareholders' equity	 	 	10,702.8	 	 	7,907.9	 	
Total liabilities and shareholders' equity	 	$	25,775.1	 	$	14,376.2	 	
See accompanying notes to condensed consolidated financial statements.

2

 
INGERSOLL-RAND COMPANY LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

 	 	Nine months ended September 30,	 	
In millions	 	2008 	 	2007	 	
Cash flows from operating activities:	 	 	 	 	 	
Net earnings	 	$	665.4	 	$	1,448.2	 	
(Income) loss from discontinued operations, net of tax	 	 	42.4	 	 	(886.0	)	
Adjustments to arrive at net cash provided by (used in) operating activities:	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	329.8	 	 	99.0	 	
Stock settled share-based compensation	 	 	35.1	 	 	25.4	 	
Changes in other assets and liabilities, net	 	 	(1,127.4	)	 	(263.8	)	
Other, net	 	 	56.0	 	 	42.6	 	
Net cash provided by (used in) continuing operating activities	 	 	1.3	 	 	465.4	 	
Net cash provided by (used in) discontinued operating activities	 	 	(26.1	)	 	(8.6	)	
 	 	 	 	 	 	 	 	
Cash flows from investing activities:	 	 	 	 	 	 	 	
Capital expenditures	 	 	(196.2	)	 	(88.5	)	
Proceeds from sale of property, plant and equipment	 	 	59.7	 	 	10.2	 	
Acquisitions, net of cash acquired	 	 	(7,105.4	)	 	(26.7	)	
Proceeds from business dispositions, net of cash	 	 	73.3	 	 	1,291.7	 	
Other, net	 	 	(42.5	)	 	31.4	 	
Net cash provided by (used in) continuing investing activities	 	 	(7,211.1	)	 	1,218.1	 	
Net cash provided by (used in) discontinued investing activities	 	 	-	 	 	(50.7	)	
 	 	 	 	 	 	 	 	
Cash flows from financing activities:	 	 	 	 	 	 	 	
Increase (decrease) in short-term borrowings	 	 	1,913.7	 	 	407.7	 	
Proceeds from long-term debt	 	 	1,603.1	 	 	-	 	
Payments of long-term debt	 	 	(170.0	)	 	(12.4	)	
Net change in debt	 	 	3,346.8	 	 	395.3	 	
Debt issuance costs	 	 	(23.2	)	 	-	 	
Dividends paid	 	 	(155.5	)	 	(160.9	)	
Proceeds from exercise of stock options	 	 	18.2	 	 	147.5	 	
Repurchase of common shares by subsidiary	 	 	(2.0	)	 	(1,940.6	)	
Other, net	 	 	18.5	 	 	-	 	
Net cash provided by (used in) continuing financing activities	 	 	3,202.8	 	 	(1,558.7	)	
Net cash provided by (used in) discontinued financing activities	 	 	-	 	 	-	 	
 	 	 	 	 	 	 	 	
Effect of exchange rate changes on cash and cash equivalents	 	 	39.3	 	 	16.7	 	
 	 	 	 	 	 	 	 	
Net increase (decrease) in cash and cash equivalents	 	 	(3,993.8	)	 	82.2	 	
Cash and cash equivalents - beginning of period	 	 	4,735.3	 	 	355.8	 	
Cash and cash equivalents - end of period	 	$	741.5	 	$	438.0	 	
See accompanying notes to condensed consolidated financial statements.

3

INGERSOLL-RAND COMPANY LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1 – Description of Company
Ingersoll-Rand Company Limited (IR Limited), a Bermuda company, and its consolidated subsidiaries (we, our or the Company) is a leading innovation and solutions provider with strong brands and leading positions within its markets. The Company operates in four business segments: Air Conditioning Systems and Services, Climate Control Technologies, Industrial Technologies and Security Technologies. The Company generates revenue and cash primarily through the design, manufacture, sale and service of a diverse portfolio of industrial and commercial products that include well-recognized, premium brand names such as Club Car®, Hussmann®, Ingersoll Rand®, Schlage®, Thermo King® and Trane®.

Note 2– Basis of Presentation
In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments, which include normal recurring adjustments, necessary to present fairly the consolidated unaudited results for the interim periods presented. Certain reclassifications of amounts reported in prior years have been made to conform to the 2008 classification.

The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Ingersoll-Rand Company Limited Annual Report on Form 10-K for the year ended December 31, 2007.

As discussed in Note 3, the Company acquired Trane Inc. (Trane) at the close of business on June 5, 2008 (the Acquisition Date). As a result of the acquisition, the results of the operations of Trane have been included in the statement of financial position at September 30, 2008 and the consolidated statements of operations and cash flows since the Acquisition Date.

Note 3 – Acquisition of Trane Inc.
At the close of business on June 5, 2008, the Company completed its previously announced acquisition of 100% of the outstanding common shares of Trane. Trane, formerly American Standard Companies Inc., provides systems and services that enhance the quality and comfort of the air in homes and buildings around the world. Trane’s systems and services have leading positions in premium commercial, residential, institutional and industrial markets, a reputation for reliability, high quality and product innovation and a powerful distribution network. Trane’s 2007 annual revenues were $7.5 billion.

The Company paid a combination of (i) 0.23 of an IR Limited Class A common share and (ii) $36.50 in cash, without interest, for each outstanding share of Trane common stock. The total cost of the acquisition was approximately $9.6 billion, including change in control payments and direct costs of the transaction. The Company financed the cash portion of the acquisition with a combination of cash on hand, commercial paper and a 364-day senior unsecured bridge loan facility.

The components of the purchase price were as follows:

4

 
In billions	 	 	 	
Cash consideration	 	$	7.3	 	
Stock consideration (Issuance of 45.4 million IR Limited Class A common shares)	 	 	2.0	 	
Estimated fair value of Trane stock options converted to 7.4 million IR Limited stock options	 	 	0.2	 	
Transaction costs	 	 	0.1	 	
Total	 	$	9.6	 	

The following table summarizes the preliminary fair values of the Trane assets acquired and liabilities assumed at the Acquisition Date. The Company is in the process of finalizing the fair values of certain assets and liabilities, thus, the allocation of the purchase price is subject to refinement. The Company anticipates finalizing purchase accounting in the fourth quarter of 2008.

 	 	June 5,	 	
In millions	 	2008	 	
Current assets:	 	 	 	
Cash and cash equivalents	 	$	317.5	 	
Accounts and notes receivable	 	 	1,185.6	 	
Inventories	 	 	970.5	 	
Other current assets	 	 	376.4	 	
Total current assets	 	 	2,850.0	 	
 	 	 	 	 	
Property, plant and equipment	 	 	1,180.7	 	
Goodwill	 	 	5,393.1	 	
Intangible assets	 	 	5,547.7	 	
Other noncurrent assets	 	 	721.9	 	
Total assets	 	$	15,693.4	 	
 	 	 	 	 	
Current liabilities:	 	 	 	 	
Accounts payable	 	$	562.9	 	
Accrued compensation and benefits	 	 	218.5	 	
Accrued expenses and other current liabilities	 	 	1,006.9	 	
Short-term borrowings and current maturities of long-term debt	 	 	254.3	 	
Total current liabilities	 	 	2,042.6	 	
 	 	 	 	 	
Long-term debt	 	 	476.3	 	
Postemployment and other benefit liabilities	 	 	314.6	 	
Deferred income taxes	 	 	2,237.5	 	
Other noncurrent liabilities	 	 	1,006.2	 	
Minority interests	 	 	7.7	 	
Total liabilities and minority interests	 	$	6,084.9	 	
 	 	 	 	 	
Net assets acquired	 	$	9,608.5	 	

5

Cash and cash equivalents, accounts and notes receivable, accounts payable and accrued compensation and benefits were stated at their historical carrying values, which approximate their fair value, given the short-term nature of these assets and liabilities.

Inventories were recorded at fair value, based on computations which considered many factors, including the future estimated selling price of the inventory, the cost to dispose of the inventory, as well as the replacement cost of the inventory, where applicable.

The Company recorded property, plant and equipment at its preliminary estimated fair value, based on adjustments recorded in recent acquisitions of other companies with assets similar to Trane.

The Company recorded intangible assets based on their estimated fair value, and consisted of the following:

In millions	 	Useful life 	 	Amount	 	
Tradenames	 	 	Indefinite	 	$	3,198.0	 	
Customer relationships	 	 	18 Years	 	 	2,014.0	 	
Completed technology/patents	 	 	10 Years	 	 	158.0	 	
In-process research and development	 	 	Expensed	 	 	26.0	 	
License agreement	 	 	7 Years	 	 	40.7	 	
Backlog	 	 	6 Months	 	 	111.0	 	
Total	 	 		 	$	5,547.7	 	

The Company has allocated $3,198.0 million to tradenames, primarily related to the Trane brand. Management considered many factors in the determination that it will account for the asset as an indefinite lived intangible asset, including the current market leadership position of the brand as well as recognition worldwide in the industry. Therefore, in accordance with Statement of Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets”, tradenames will not be amortized, but instead will be tested for impairment at least annually (more frequently if certain indicators are present).

In addition, the Company assigned $26.0 million to in-process research and development assets that were expensed at the date of acquisition in accordance with Financial Accounting Standards Board (FASB) Interpretation No. 4, “Applicability of FASB Statement No. 2 to Business Combinations Accounted for by the Purchase Method.” The expenses are included in general and administrative expenses.

The Company will have a valuation performed on property, plant and equipment and identified intangible assets in addition to pension, post employment and other liabilities. As such, the fair value recorded for the assets and liabilities could change upon the conclusion of the valuation.

The excess of the purchase price over the amounts allocated to specific assets and liabilities is included in goodwill, and amounted to $5,393.1 million. The premium in the purchase price paid by the Company for the acquisition of Trane reflects the establishment of $11 billion of businesses offering high value equipment, systems and services necessary for delivering solutions across the temperature spectrum for indoor, stationary and transport applications worldwide. The Company anticipates realizing significant operational and cost synergies. Anticipated synergies include purchase material savings through supplier rationalization and procurement leverage, improvement in manufacturing costs and lower general and administrative costs. Longer term, the Company expects to benefit from synergies related to service revenue expansion, leverage of distribution channels and cross selling through certain vertical markets. 

6

 
In addition, Trane will be able to leverage the Company’s global footprint to enhance their historically U.S.-based revenue generation. Lastly, the combined business will improve the Company’s highly regarded Hussmann and Thermo King brands with Trane’s position as a leader in the commercial and residential climate control industry. These combined factors primarily contributed to a purchase price in excess of the fair value of the net tangible assets acquired.

The following unaudited pro forma information assumes the acquisition of Trane occurred as of the beginning of the respective periods presented:

 	 	Nine months ended	 	
 	 	September 30,	 	
In millions      	 	2008	 	2007	 	
 	 	 	 	 	 	
Net revenues	 	$	12,691.0	 	$	12,060.8	 	
Pre-tax profit	 	 	863.5	 	 	694.7	 	
Net earnings      	 	$	703.0	 	$	562.0	 	
 	 	 	 	 	 	 	 	
Basic earnings per common share	 	$	2.20	 	$	1.65	 	
Diluted earnings per common share	 	$	2.17	 	$	1.61	 	

The unaudited pro forma financial information for the nine months ended September 30, 2008 include $19.5 million of non-recurring purchase accounting charges associated with the fair value allocation of purchase price to backlog, inventory and in-process research and development costs. The comparative amount for the nine months ended September 30, 2007 was $113.1 million.

In addition, for the nine months ended September 30, 2008, the Company has included $81.3 million as an increase to interest expense associated with the borrowings to fund (a) the cash portion of the purchase price and (b) the out-of-pocket transaction costs associated with the acquisition. The comparative amount for the nine months ended September 30, 2007 was $146.9 million.

The unaudited pro forma information does not purport to be indicative of the results that actually would have been achieved had the operations been combined during the periods presented, nor is it intended to be a projection of future results or trends.

Note 4 – Divestitures and Discontinued Operations
The components of discontinued operations for the three and nine months ended September 30 are as follows:

7

 
 	 	Three months ended	 	Nine months ended 	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Revenues	 	$	0.1	 	$	714.0	 	$	15.3	 	$	2,410.8	 	
 	 	 		 	 		 	 		 	 		 	
Pre-tax earnings (loss) from operations	 	 	(11.0	)	 	93.6	 	 	(34.0	)	 	295.2	 	
Pre-tax gain (loss) on sale	 	 	0.1	 	 	1.1	 	 	(5.5	)	 	805.8	 	
Tax expense	 	 	4.9	 	 	(25.7	)	 	(2.9	)	 	(215.0	)	
Discontinued operations, net of tax	 	$	(6.0	)	$	69.0	 	$	(42.4	)	$	886.0	 	

Discontinued operations by business for the three and nine months ended September 30 is as follows:

 	 	Three months ended	 	Nine months ended	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Compact Equipment, net of tax	 	$	-	 	$	84.5	 	$	(22.9	)	$	226.7	 	
Road Development, net of tax	 	 	-	 	 	1.1	 	 	(1.8	)	 	695.2	 	
Other discontinued operations, net of tax	 	 	(6.0	)	 	(16.6	)	 	(17.7	)	 	(35.9	)	
Total discontinued operations, net of tax	 	$	(6.0	)	$	69.0	 	$	(42.4	)	$	886.0	 	

Compact Equipment Divestiture
On July 29, 2007, the Company agreed to sell its Bobcat, Utility Equipment and Attachments business units (collectively, Compact Equipment) to Doosan Infracore for gross proceeds of approximately $4.9 billion. The sale was completed on November 30, 2007. The purchase price is subject to post-closing adjustments which could result in a favorable or unfavorable adjustment to the gain on sale when ultimately resolved.

Compact Equipment manufactures and sells compact equipment, including skid-steer loaders, compact track loaders, mini-excavators and telescopic tool handlers; portable air compressors, generators and light towers; general-purpose light construction equipment; and attachments. The Company has accounted for Compact Equipment as discontinued operations for all periods presented in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (SFAS 144).

Net revenues and after-tax earnings of Compact Equipment for the three and nine months ended September 30 are as follows:

 	 	Three months ended	 	Nine months ended 	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Net revenues	 	$	0.1	 	$	709.7	 	$	15.3	 	$	2,162.1	 	
 	 	 		 	 		 	 		 	 		 	
Earnings from operations, net of tax	 	 	-	 	 	84.5	 	 	0.1	 	 	226.7	 	
Gain on sale, net of tax	 	 	-	 	 	-	 	 	(23.0	)	 	-	 	
Total discontinued operations, net of tax	 	$	-	 	$	84.5	 	$	(22.9	)	$	226.7	 	

8

 
Road Development Divestiture
On February 27, 2007, the Company agreed to sell its Road Development business unit to AB Volvo (publ) for cash proceeds of approximately $1.3 billion. The sale was completed on April 30, 2007 in all countries except for India, which closed on May 4, 2007. The purchase price has been finalized with the buyer and the Company will record final adjustments in the fourth quarter of 2008.

The Road Development business unit manufactures and sells asphalt paving equipment, compaction equipment, milling machines and construction-related material handling equipment. The Company has accounted for the Road Development business unit as discontinued operations for all periods presented in accordance with SFAS 144.

Net revenues and after-tax earnings of the Road Development business unit for the three and nine months ended September 30 are as follows:

 	 	Three months ended	 	Nine months ended	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Net revenues	 	$	-	 	$	4.3	 	$	-	 	$	248.7	 	
 	 	 		 	 		 	 		 	 		 	
Earnings from operations, net of tax	 	 	(0.1	)	 	0.2	 	 	(0.2	)	 	18.6	 	
Gain on sale, net of tax	 	 	0.1	 	 	0.9	 	 	(1.6	)	 	676.6	 	
Total discontinued operations, net of tax	 	$	-	 	$	1.1	 	$	(1.8	)	$	695.2	 	

Other Discontinued Operations
The Company also has retained costs from previously sold businesses that mainly include costs related to postretirement benefits, product liability and legal costs (mostly asbestos-related). The components of other discontinued operations for the three and nine months ended September 30 are as follows:

 	 	Three months ended	 	Nine months ended 	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Retained costs, net of tax	 	$	(6.0	)	$	(16.7	)	$	(17.7	)	$	(36.3	)	
Net gain on disposals, net of tax	 	 	-	 	 	0.1	 	 	-	 	 	0.4	 	
Total discontinued operations, net of tax	 	$	(6.0	)	$	(16.6	)	$	(17.7	)	$	(35.9	)	

Retained costs, net of tax for the nine months ended September 30, 2008 includes $6.5 million of after-tax costs related to an adverse verdict in a product liability lawsuit associated with a previously divested business.

Note 5 – Inventories
Depending on the business, U.S. inventories are stated at the lower of cost or market using the last-in, first-out (LIFO) method or the lower of cost or market using the first-in, first-out (FIFO) method. Non-U.S. inventories are primarily stated at the lower of cost or market using the FIFO method.

The major classes of inventory are as follows: 

9

 
 	 	September 30,	 	December 31,	 	
In millions	 	2008	 	2007	 	
Raw materials	 	$	480.0	 	$	323.2	 	
Work-in-process	 	 	351.0	 	 	163.4	 	
Finished goods	 	 	1,106.2	 	 	424.9	 	
Sub-total	 	 	1,937.2	 	 	911.5	 	
LIFO reserve	 	 	(142.1	)	 	(84.3	)	
Total	 	$	1,795.1	 	$	827.2	 	

At September 30, 2008, approximately 50% of all inventory utilized the LIFO method compared to approximately 20% at December 31, 2007. The increase is primarily attributable to the Company’s acquisition of Trane. See Note 3 for a further discussion on the Trane acquisition.
 
Note 6 – Goodwill
The changes in the carrying amount of goodwill are as follows:

 	 	Air	 	 	 	 	 	 	 	 	 	
 	 	Conditioning	 	Climate	 	 	 	 	 	 	 	
 	 	Systems	 	Control	 	Industrial	 	Security	 	 	 	
In millions	 	and Services	 	Technologies	 	Technologies	 	Technologies	 	Total	 	
December 31, 2007	 	$	-	 	$	2,613.8	 	$	371.9	 	$	1,007.6	 	$	3,993.3	 	
Acquisitions and adjustments*	 	 	5,393.1	 	 	-	 	 	5.6	 	 	23.3	 	 	5,422.0	 	
Translation	 	 	-	 	 	(11.9	)	 	(1.3	)	 	(15.8	)	 	(29.0	)	
September 30, 3008	 	$	5,393.1	 	$	2,601.9	 	$	376.2	 	$	1,015.1	 	$	9,386.3	 	
* Includes current year adjustments related to final purchase price allocation adjustments.

The Company initially records as goodwill the excess of the purchase price over the preliminary fair value of the net assets acquired. Once the final valuation has been performed for each acquisition, adjustments may be recorded.

See Note 3 for a further discussion regarding goodwill associated with the acquisition of Trane, which the Company records in the Air Conditioning Systems and Services segment.

Note 7 – Intangible Assets
The following table sets forth the gross amount and accumulated amortization of the Company’s intangible assets:

10

 
 	 	September 30,	 	December 31,	 	
In millions	 	2008	 	2007	 	
Customer relationships	 	$	2,514.2	 	$	502.4	 	
Trademarks	 	 	3,478.9	 	 	283.8	 	
Patents	 	 	202.4	 	 	38.2	 	
Other	 	 	236.5	 	 	53.4	 	
Total gross intangible assets	 	 	6,432.0	 	 	877.8	 	
Accumulated amortization	 	 	(330.7	)	 	(153.2	)	
Total	 	$	6,101.3	 	$	724.6	 	

As of September 30, 2008 and December 31, 2007, the Company had $3,366.5 million and $169.3 million, respectively, of indefinite lived intangible assets. The increase is attributable to the Company’s acquisition of Trane on June 5, 2008. These assets are not subject to amortization in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” but instead, will be tested for impairment at least annually (more frequently if certain indicators are present).

Intangible asset amortization expense was $128.9 million and $6.2 million for the three months ended September 30, 2008 and 2007, respectively. The increase is attributable to the Company’s acquisition of Trane on June 5, 2008, which includes $86.3 million of non-recurring amortization expense related to the fair value allocation of purchase price to backlog and in-process research and development costs. See Note 3 for a further discussion on the acquisition of Trane.

For the nine months ended September 30, 2008 and 2007, intangible asset amortization was $178.0 million and $18.4 million, respectively. The increase is attributable to the Company’s acquisition of Trane on June 5, 2008, which includes $112.8 million of non-recurring amortization expense related to the fair value allocation of purchase price to backlog and in-process research and development costs. See Note 3 for a further discussion on the acquisition of Trane.

Estimated amortization expense on existing intangible assets is approximately $170 million for each of the next five fiscal years.

Note 8 – Accounts Receivable Securitization Agreements
In association with the acquisition of Trane, the consolidated financial statements include Trane’s accounts receivable securitization agreement (the Facility) in the U.S. As part of this Facility, Trane formed a special-purpose entity (SPE) that is included in the condensed consolidated financial statements for the sole purpose of buying and selling receivables generated by Trane. Trane irrevocably and without recourse, transfers all eligible accounts receivable to the SPE, which in turn, sells them, or undivided ownership interests in them, to conduits administered by participating banks. The assets of the SPE are not available to pay the claims of Trane or any of its subsidiaries.

The receivables sold are removed from the balance sheet since they meet the applicable criteria of SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities.” Trane’s retained interest is recorded at fair value in the balance sheet. To the extent that the cash received and value of the retained interest is less than the net book value of the receivable sold, losses are recognized at the time of sale. For the three months ended September 30, 2008 and since the Acquisition Date, the losses amounted to $1.2 million and $1.5 million, respectively. The receivables represented by the retained interest are exposed to the risk of loss for any uncollectible amounts in the pool of receivables sold under this arrangement. 

11

 
The following is a summary of receivables sold to the financing facilities:

 	 	September 30,	 	
In millions    	 	2008	 	
Outstanding balance of receivables sold to SPE	 	$	243.1	 	
Net retained interest	 	 	152.5	 	
Advances from conduits    	 	 	99.6	 	
 
The advances from conduits include amounts due to the conduits for the collections of receivables under the servicing agreement.

Note 9 – Debt and Credit Facilities
At September 30, 2008 and December 31, 2007, short-term borrowings and current maturities of long-term debt consisted of the following:

 	 	September 30,	 	December 31,	 	
In millions	 	2008	 	2007	 	
Commerical paper program	 	$	958.2	 	$	-	 	
Bridge loan facility	 	 	950.0	 	 	-	 	
Current maturities of long-term debt	 	 	756.1	 	 	681.1	 	
Other short-term borrowings	 	 	66.3	 	 	59.9	 	
Total	 	$	2,730.6	 	$	741.0	 	

At September 30, 2008 and December 31, 2007, long-term debt excluding current maturities consisted of:

 	 	September 30,	 	December 31,	 	
In millions	 	2008	 	2007	 	
Senior floating rate notes due 2010	 	$	250.0	 	$	-	 	
7.625% Senior notes due 2010	 	 	279.5	 	 	-	 	
6.000% Senior notes due 2013	 	 	599.7	 	 	-	 	
5.50% Senior notes due 2015	 	 	188.7	 	 	-	 	
4.75% Senior notes due 2015	 	 	299.2	 	 	299.1	 	
6.875% Senior notes due 2018	 	 	748.9	 	 	-	 	
9.00% Debentures due 2021	 	 	125.0	 	 	125.0	 	
7.20% Debentures due 2007 - 2025	 	 	120.0	 	 	127.5	 	
6.48% Debentures due 2025	 	 	149.7	 	 	149.7	 	
Other loans and notes	 	 	24.4	 	 	11.4	 	
Total	 	$	2,785.1	 	$	712.7	 	

12

In connection with the acquisition of Trane, the Company entered into a $3.9 billion senior unsecured bridge loan facility, with a 364-day term, which was subsequently reduced to $3.4 billion. The Company drew down $2.95 billion against the bridge loan facility in June 2008. The proceeds, along with cash on hand as well as the issuance of $1.5 billion of commercial paper, were used to fund the cash component of the consideration paid for the acquisition as well as to pay related fees and expenses incurred in connection with the acquisition.

In August 2008, the Company filed a universal shelf registration statement with the Securities and Exchange Commission (SEC) for an indeterminate amount of securities for future issuance and issued $1.6 billion of long-term debt pursuant to the shelf registration statement. This issuance consisted of $250 million Senior Floating Rate Notes due in 2010, $600 million 6.000% Senior Notes due in 2013 and $750 million 6.875% Senior Notes due in 2018. These notes are fully and unconditionally guaranteed by IR Limited, which directly owns 100% of the subsidiary issuer.

During the third quarter, the Company repaid $2.0 billion of the outstanding balance of the bridge loan facility. The Company used a combination of cash flows from operations and cash on hand, in addition to the $1.6 billion in proceeds received from the issuance of long-term debt. In October 2008, the Company reduced the bridge loan facility size to $950 million.

During the second quarter, the Company entered into a $1.0 billion senior unsecured revolving credit agreement with a three year term. This three-year credit facility will be used to support working capital, the commercial paper program and for other general corporate purposes.

In addition to the three-year credit facility, the Company has committed revolving credit facilities consisting of two lines totaling $2.0 billion, of which $750 million expires in June 2009 and $1.25 billion expires in August 2010. These lines were unused and provide support for other financing instruments, such as letter of credit as required in the normal course of business as well as support for the commercial paper program.

At September 30, 2008, the Company had outstanding $547.9 million of 30-year fixed rate debentures which requires early repayment only at the option of the holder. These debentures contain a put feature that the holders may exercise on each anniversary of the issuance date. If exercised, the Company is obligated to repay in whole or in part, at the holder’s option, the outstanding principal amount (plus accrued and unpaid interest) of the debentures held by the holder. If these options are not exercised, the final maturity dates would range between 2027 and 2028. In October 2008, holders of these debentures chose to exercise the put feature on approximately $248 million of the debentures, which will be repaid in November 2008. In the first quarter of 2009, holders of these debentures will have the option to exercise the put feature on approximately $40 million of the remaining debentures. In the fourth quarter of 2009, holders of these debentures will have the option to exercise the put feature on approximately $260 million of the remaining debentures.

Note 10 – Pension Plans
The Company has noncontributory pension plans covering the majority of U.S. employees. In addition, certain non-U.S. employees in other countries are covered by pension plans. The Company’s pension plans for U.S. non-collectively bargained employees largely provide benefits on a final average pay formula and for U.S. collectively bargained employees on a flat benefit formula. Non-U.S. plans provide benefits based on earnings and years of service. The Company maintains additional other supplemental benefit plans for officers and other key employees. 

13

 
The components of the Company’s pension related costs for the three and nine months ended September 30 are as follows:

 	 	Three months ended	 	Nine months ended	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Service cost	 	$	18.1	 	$	10.4	 	$	42.8	 	$	39.6	 	
Interest cost	 	 	52.4	 	 	41.7	 	 	133.7	 	 	124.3	 	
Expected return on plan assets	 	 	(64.9	)	 	(57.5	)	 	(167.8	)	 	(173.4	)	
Net amortization of:	 	 		 	 	 	 	 	 	 	 	 	 	
Prior service costs	 	 	2.4	 	 	2.3	 	 	6.6	 	 	7.0	 	
Transition amount	 	 	0.2	 	 	0.2	 	 	0.6	 	 	0.6	 	
Plan net actuarial losses	 	 	3.5	 	 	2.9	 	 	8.3	 	 	10.8	 	
Net periodic pension benefit cost	 	 	11.7	 	 	-	 	 	24.2	 	 	8.9	 	
Net curtailment and settlement (gains) losses	 	 	1.2	 	 	(3.6	)	 	2.5	 	 	20.7	 	
Net periodic pension benefit cost after net curtailment and settlement (gains) losses	 	$	12.9	 	$	(3.6	)	$	26.7	 	$	29.6	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Amounts recorded in continuing operations	 	$	16.5	 	$	1.8	 	$	37.6	 	$	16.8	 	
Amounts recorded in discontinued operations	 	 	(3.6	)	 	(5.4	)	 	(10.9	)	 	12.8	 	
Total	 	$	12.9	 	$	(3.6	)	$	26.7	 	$	29.6	 	

The Company made employer contributions of $18.6 million and $18.1 million to its pension plans during the nine months ended September 30, 2008 and 2007, respectively.

The curtailment and settlement losses in 2008 are associated with lump sum distributions under supplemental benefit plans for officers and other key employees. The curtailment and settlement losses in 2007 are associated with the sale of the Road Development business unit on April 30, 2007. In addition, certain of the Company’s pension plans, primarily in the U.S., were remeasured as of the April 30, 2007 sale date and the discount rate used was increased from 5.5% to 5.75%.

As discussed in Note 3, the Company assumed obligations for pension benefits associated with the acquisition of Trane. The Company is in the process of measuring the pension plans as of the Acquisition Date. The preliminary estimates of plan assets and projected benefit obligations are $719.0 million and $773.8 million, respectively.

Note 11 – Postretirement Benefits Other Than Pensions
The Company sponsors several postretirement plans that cover certain eligible employees. These plans provide for health-care benefits, and in some instances, life insurance benefits. Postretirement health plans generally are contributory and contributions are adjusted annually. Life insurance plans for retirees are primarily noncontributory. The Company funds the postretirement benefit costs principally on a pay-as-you-go basis.

14

The components of net periodic postretirement benefit cost for the three and nine months ended September 30 are as follows:

 	 	Three months ended	 	Nine months ended	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Service cost	 	$	4.2	 	$	3.0	 	$	7.2	 	$	9.2	 	
Interest cost	 	 	14.3	 	 	13.9	 	 	34.9	 	 	42.0	 	
Net amortization of prior service gains	 	 	(0.8	)	 	(1.0	)	 	(2.6	)	 	(3.1	)	
Net amortization of net actuarial losses	 	 	3.7	 	 	4.4	 	 	11.1	 	 	13.9	 	
Net periodic postretirement benefit cost	 	 	21.4	 	 	20.3	 	 	50.6	 	 	62.0	 	
Net curtailment and settlement (gains) losses	 	 	-	 	 	(2.9	)	 	-	 	 	(26.3	)	
Net periodic postretirement benefit (gains) costs after curtailment and settlement gains	 	$	21.4	 	$	17.4	 	$	50.6	 	$	35.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Amounts recorded in continuing operations	 	$	14.0	 	$	6.7	 	$	28.4	 	$	20.3	 	
Amounts recorded in discontinued operations	 	 	7.4	 	 	10.7	 	 	22.2	 	 	15.4	 	
Total	 	$	21.4	 	$	17.4	 	$	50.6	 	$	35.7	 	

The curtailment and settlement gains in 2007 are associated with the sale of the Road Development business unit on April 30, 2007. In addition, the Company’s postretirement plan was remeasured as of the April 30, 2007 sale date and the discount rate used was increased from 5.5% to 5.75%.

As discussed in Note 3, the Company assumed unfunded obligations for postretirement benefits other than pensions associated with the acquisition of Trane. The Company is in the process of measuring the postretirement plans as of the Acquisition Date. The preliminary estimate of the projected benefit obligation is $267.1 million.

Note 12 – Shareholders’ Equity
At September 30, 2008, the reconciliation of Class A common shares is as follows:

In millions	 	Total	 	
December 31, 2007	 	 	272.6	 	
Shares issued under incentive plans	 	 	0.8	 	
Merger consideration (See Note 3)	 	 	45.4	 	
September 30, 2008	 	 	318.8	 	

The components of comprehensive income for the three and nine months ended September 30 are as follows:

15

 
 	 	Three months ended	 	Nine months ended	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Net earnings	 	$	227.7	 	$	266.6	 	$	665.4	 	$	1,448.2	 	
Other comprehensive income (loss):	 	 	 	 	 	 	 	 	 	 	 	 	 	
Foreign currency translation adjustment	 	 	(258.7	)	 	153.8	 	 	(18.2	)	 	221.6	 	
Change in fair value of derivatives qualifying as cash flow hedges, net of tax	 	 	(13.7	)	 	0.7	 	 	(10.0	)	 	(5.1	)	
Unrealized gain (loss) on marketable securities, net of tax	 	 	(1.3	)	 	(1.1	)	 	(3.6	)	 	(0.8	)	
Pension and other postretirement benefits liability adjustment, net of tax	 	 	18.1	 	 	1.9	 	 	27.1	 	 	144.1	 	
Comprehensive income	 	$	(27.9	)	$	421.9	 	$	660.7	 	$	1,808.0	 	

Included in accumulated other comprehensive income is the estimated value of the Company’s currency hedges. At September 30, 2008 and 2007, the currency hedges had a projected gain of $2.1 million and a projected loss of $7.0 million, net of tax, respectively. Also included in accumulated other comprehensive income are projected losses of $22.7 million related to interest rate locks, all of which qualified as cash flow hedges. The amounts expected to be reclassified to earnings over the next twelve months for the currency hedges and interest rate locks is $2.1 million and $2.8 million, respectively. The actual amounts that will be reclassified to earnings may vary from this amount as a result of changes in market conditions. The projected fair value of all currency and commodity derivatives at September 30, 2008 and 2007 was a loss of $18.1 million and a gain of $20.5 million, respectively.

During the first quarter of 2008, the Company determined that four of its forecasted cash flow hedges were ineffective, as the underlying forecasted transactions were no longer considered probable of occurring. The Company dedesignated these hedges and recorded a gain of $0.3 million within “Other, net.”

As a result of the acquisition of Trane, the Company assumed a cross currency swap to lock the foreign currency cash flows on its £60.0 million 8.25% senior notes due June 1, 2009, into the U.S. dollar. At the inception of the swap, it qualified as a cash flow hedging instrument under the guidelines of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133). As such, the fair value has been deferred in Other Comprehensive Income (OCI) until the time the cash flows affect earnings. At September 30, 2008, the cross currency swap had a loss of $17.3 million.

Note 13 – Restructuring Activities
Restructuring charges recorded during the three months ended September 30, 2008 were as follows:

16

 
 	 	Air 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Conditioning	 	Climate	 	 	 	 	 	 	 	 	 	
 	 	Systems 	 	Control	 	Industrial	 	Security	 	Corporate	 	 	 	
In millions	 	and Services	 	Technologies	 	Technologies	 	Technologies	 	and Other	 	Total	 	
Cost of goods sold	 	$	-	 	$	1.2	 	$	(0.1	)	$	0.4	 	$	-	 	$	1.5	 	
Selling and administrative	 	 	-	 	 	(0.2	)	 	-	 	 	0.1	 	 	8.5	 	 	8.4	 	
Total	 	$	-	 	$	1.0	 	$	(0.1	)	$	0.5	 	$	8.5	 	$	9.9	 	

Restructuring charges recorded during the nine months ended September 30, 2008 were as follows:

 	 	Air 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Conditioning	 	Climate	 	 	 	 	 	 	 	 	 	
 	 	Systems 	 	Control	 	Industrial	 	Security	 	Corporate	 	 	 	
In millions	 	and Services	 	Technologies	 	Technologies	 	Technologies	 	and Other	 	Total	 	
Cost of goods sold	 	$	-	 	$	0.8	 	$	2.5	 	$	2.4	 	$	-	 	$	5.7	 	
Selling and administrative	 	 	2.0	 	 	0.3	 	 	1.8	 	 	(0.1	)	 	10.5	 	 	14.5	 	
Total	 	$	2.0	 	$	1.1	 	$	4.3	 	$	2.3	 	$	10.5	 	$	20.2	 	

The changes in the restructuring reserve were as follows:

 	 	Air 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Conditioning	 	Climate	 	 	 	 	 	 	 	 	 	
 	 	Systems 	 	Control	 	Industrial	 	Security	 	Corporate	 	 	 	
In millions	 	and Services	 	Technologies	 	Technologies	 	Technologies	 	and Other	 	Total	 	
December 31, 2007	 	$	-	 	$	20.8	 	$	0.7	 	$	4.0	 	$	-	 	$	25.5	 	
Additions	 	 	2.0	 	 	1.1	 	 	4.3	 	 	2.3	 	 	10.5	 	 	20.2	 	
Purchase accounting	 	 	13.8	 	 	-	 	 	-	 	 	-	 	 	-	 	 	13.8	 	
Cash and non-cash uses	 	 	(10.4	)	 	(20.7	)	 	(4.6	)	 	(2.9	)	 	(0.8	)	 	(39.4	)	
Currency translation	 	 	-	 	 	0.7	 	 	(0.2	)	 	(0.1	)	 	-	 	 	0.4	 	
September 30, 2008	 	$	5.4	 	$	1.9	 	$	0.2	 	$	3.3	 	$	9.7	 	$	20.5	 	

During 2007, the Company initiated restructuring actions relating to ongoing cost reduction efforts across each of its sectors. These actions included both workforce reductions as well as the consolidation of manufacturing facilities.

Actions taken in the Climate Control Technologies sector included a rationalization of manufacturing facilities in the U.S., Europe and Asia that resulted in the closure of a U.S. plant, two European plants and a Japanese plant. Industrial Technologies consolidated a manufacturing process at a U.S. plant in addition to other administrative functions within the sector. Security Technologies conducted a consolidation of administrative functions throughout the European sales area. Corporate costs related to workforce reductions.

In connection with the acquisition of Trane, at the Acquisition Date, the Company began formulating a plan to exit or restructure certain activities. The Company recorded purchase accounting liabilities of $13.8 million primarily related to employee severance and related costs in connection with the preliminary plan as well as approving the continuation of all existing restructuring and exit plans. 

17

 
As of September 30, 2008, the Company had $20.5 million accrued for the workforce reductions and consolidation of manufacturing facilities, of which a majority will be paid throughout the remainder of 2008.

In October 2008, the Company announced plans to initiate enterprise-wide restructuring actions. These actions include streamlining the footprint of manufacturing facilities and reducing the general and administrative cost base. Projected costs will approximate $110 million with a majority of the costs expected to be incurred in 2008.

Note 14  – Share-Based Compensation
The Company records share-based compensation under the provisions of SFAS No. 123 (revised 2004), “Share Based Payment,” which requires companies to measure all employee share-based compensation awards using a fair value method and recognize compensation expense for an amount equal to the fair value of the share-based payment issued in its consolidated financial statements.

On June 6, 2007, the shareholders of the Company approved the Incentive Stock Plan of 2007, which authorizes the Company to issue stock options and other share-based incentives. The total number of shares authorized by the shareholders is 14.0 million, of which 8.7 million remains available for future incentive awards. The plan replaces the Incentive Stock Plan of 1998, which expired in May 2007.

Stock Options
The average fair value of the options granted for the nine months ended September 30, 2008 and September 30, 2007 were $11.59 and $11.06, respectively, using the Black-Scholes option-pricing model. The following weighted-average assumptions were used:

 	 	2008	 	2007	 	
Dividend yield	 	 	1.58	%	 	1.75	%	
Volatility	 	 	31.49	%	 	26.10	%	
Risk-free rate of return	 	 	2.95	%	 	4.71	%	
Expected life	 	 	5.4 years	 	 	4.7 years	 	
 
The fair value of each of the Company’s stock option awards is expensed on a straight-line basis over the required service period, which is generally the three-year vesting period of the options. However, for options granted to retirement eligible employees, the Company recognizes expense for the fair value of the options at the grant date. Expected volatility is based on the historical volatility from traded options on the Company’s stock. The risk-free rate of return is based on the yield curve of a zero-coupon U.S. Treasury bond on the date the award is granted with a maturity equal to the expected term of the award. Historical data is used to estimate forfeitures within the Company’s valuation model. The Company’s expected life of the stock option awards is derived from historical experience and represents the period of time that awards are expected to be outstanding.

Changes in the options outstanding under the plans for the nine months ended September 30, 2008 were as follows:

18

 
 	 	Shares	 	Weighted-	 	Aggregate	 	Weighted-	 	
 	 	subject	 	average	 	intrinsic	 	average 	 	
 	 	to option	 	exercise price	 	value (millions)	 	remaining life	 	
December 31, 2007	 	 	16,424,891	 	$	34.25	 	 		 	 		 	
Granted	 	 	5,074,599	 	 	40.54	 	 		 	 		 	
Trane options exchanged for	 	 		 	 		 	 		 	 		 	
Ingersoll Rand options	 	 	7,408,134	 	 	18.50	 	 		 	 		 	
Exercised	 	 	(678,767	)	 	26.74	 	 		 	 		 	
Cancelled	 	 	(695,214	)	 	41.58	 	 	 	 	 	 	 	
Outstanding September 30, 2008	 	 	27,533,643	 	$	31.17	 	$	129.1	 	 	5.7	 	
Exercisable September 30, 2008	 	 	20,163,360	 	$	27.48	 	$	129.1	 	 	4.6	 	
 
As part of the acquisition of Trane, 7.4 million Trane options were converted at the option of the holders into options to acquire shares of IR Limited Class A common shares based on the option exchange ratio set forth in the merger agreement.

SARs
SARs generally vest ratably over a three-year period from the date of grant and expire at the end of ten years. All exercised SARs are settled with the Company’s Class A common shares.

The following table summarizes the information for currently outstanding SARs for the nine months ended September 30, 2008:

 	 	Shares	 	Weighted-	 	Aggregate	 	Weighted-	 	
 	 	subject	 	average	 	intrinsic	 	average 	 	
 	 	to option	 	exercise price	 	value (millions)	 	remaining life	 	
December 31, 2007	 	 	1,169,977	 	$	33.99	 	 		 	 		 	
Granted	 	 	-	 	 	-	 	 		 	 		 	
Exercised	 	 	(40,636	)	 	27.98	 	 		 	 		 	
Cancelled	 	 	(51,386	)	 	37.74	 	 	 	 	 	 	 	
Outstanding September 30, 2008	 	 	1,077,955	 	$	34.04	 	$	2.1	 	 	4.6	 	
Exercisable September 30, 2008	 	 	993,575	 	$	33.58	 	$	2.1	 	 	4.5	 	
The Company did not grant SARS during the nine months ended September 30, 2008 and does not anticipate further granting in the future.

Performance Shares
The Company has a Performance Share Program (PSP) for key employees. The program provides annual awards for the achievement of pre-established long-term strategic initiatives and annual financial performance of the Company. The annual target award level is expressed as a number of the Company’s Class A common shares.

On April 17, 2007, and effective for the performance year 2007, the Compensation Committee of the Company’s board of directors approved a revision to the PSP program such that all PSP awards will be paid in Class A common shares rather than in cash. In addition, all shares will vest one year after the date of grant except for retirement-eligible employees, which vest immediately. As a result of these changes, a larger portion of the Company’s executive compensation program is directly linked to the performance of the Company’s Class A common shares, thus further aligning the interests of executives with those of the Company’s shareholders. 

19

 
Deferred Compensation
The Company allows key employees and non-employee directors to defer a portion of their eligible compensation into a number of investment choices, including Class A common share equivalents. Effective August 1, 2007, the deferred compensation plans were amended to provide that any amounts invested in the Class A common share equivalents will be settled in Class A common shares at the time of distribution. Previously, these amounts were settled in cash.

Compensation Expense
Share-based compensation expense is included in Selling and administrative expenses. The following table summarizes the expenses recognized for the three and nine months ended September 30:

 	 	Three months ended	 	Nine months ended	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Stock options	 	$	7.4	 	$	5.0	 	$	31.1	 	$	20.7	 	
SARs	 	 	0.1	 	 	-	 	 	(0.1	)	 	0.5	 	
Performance shares	 	 	1.2	 	 	2.4	 	 	3.6	 	 	8.2	 	
Deferred compensation	 	 	0.5	 	 	(0.3	)	 	1.1	 	 	2.2	 	
Other	 	 	0.5	 	 	0.2	 	 	1.1	 	 	0.5	 	
Pre-tax expense	 	 	9.7	 	 	7.3	 	 	36.8	 	 	32.1	 	
Tax benefit	 	 	(3.7	)	 	(2.8	)	 	(14.1	)	 	(12.3	)	
After tax expense	 	$	6.0	 	$	4.5	 	$	22.7	 	$	19.8	 	
 	 	 		 	 		 	 		 	 		 	
Amounts recorded in continuing operations	 	$	6.0	 	$	3.7	 	$	22.7	 	$	16.8	 	
Amounts recorded in discontinued operations	 	 	-	 	 	0.8	 	 	-	 	 	3.0	 	
Total	 	$	6.0	 	$	4.5	 	$	22.7	 	$	19.8	 	

In August 2006, the Company entered into two total return swaps (the Swaps) which were derivative instruments used to hedge the Company's exposure to changes in its share-based compensation expense. The aggregate notional amount of the Swaps was approximately $52.6 million. On June 11, 2007, the Company terminated a portion of the Swaps for net cash proceeds of $3.8 million. The Company settled the remaining portion of the Swaps on August 6, 2007, for net cash proceeds of $13.8 million.

For the three and nine months ended September 30, 2007, the Company recorded a loss of $5.1 million and a gain of $15.5 million, respectively, associated with the Swaps. The gains and losses associated with the Swaps are recorded within selling and administrative expenses.

Note 15 – Other, Net
The components of “Other, net” for the three and nine months ended September 30 are as follows:

20

 
 	 	Three months ended	 	Nine months ended	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Interest income	 	$	9.9	 	$	5.0	 	$	86.9	 	$	14.9	 	
Exchange gain (loss)	 	 	(11.0	)	 	(8.1	)	 	(15.5	)	 	0.6	 	
Minority interests	 	 	(5.5	)	 	(4.5	)	 	(15.9	)	 	(11.6	)	
Earnings from equity investments	 	 	1.4	 	 	-	 	 	2.6	 	 	0.1	 	
Other	 	 	1.5	 	 	-	 	 	3.3	 	 	(3.1	)	
Other, net	 	$	(3.7	)	$	(7.6	)	$	61.4	 	$	0.9	 	

Note 16 – Income Taxes
Effective January 1, 2007, the Company adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement 109” (FIN 48), which prescribes a recognition threshold and measurement process for recording in the financial statements uncertain tax positions taken or expected to be taken in a tax return. Additionally, FIN 48 provides guidance on the recognition, classification, accounting in interim periods and disclosure requirements for uncertain tax positions. As a result of adopting FIN 48, the Company recorded additional liabilities to its previously established reserves, and a corresponding decrease in retained earnings of $145.6 million. Total unrecognized tax benefits as of September 30, 2008 and December 31, 2007 were $571.6 million and $379.8 million, respectively. The increase is primarily related to the inclusion of unrecognized tax positions attributable to the Trane business.

The provision for income taxes involves a significant amount of management judgment regarding interpretation of relevant facts and laws in the jurisdictions in which the Company operates. Future changes in applicable laws, projected levels of taxable income and tax planning could change the effective tax rate and tax balances recorded by the Company. In addition, U.S. and non-U.S. tax authorities periodically review income tax returns filed by the Company and can raise issues regarding its filing positions, timing and amount of income or deductions and the allocation of income among the jurisdictions in which the Company operates. A significant period of time may elapse between the filing of an income tax return and the ultimate resolution of an issue raised by a revenue authority with respect to that return. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as Germany, Italy, the Netherlands, Switzerland and the United States. In general, the examination of the Company’s material tax returns is completed for the years prior to 2000.

The Internal Revenue Service (IRS) has completed the examination of the Company’s federal income tax returns through the 2000 tax year and has issued a notice proposing adjustments. The principle proposed adjustment relates to the disallowance of certain capital losses. The Company disputed the IRS position and protests have been filed with the IRS Appeals Division. In order to reduce the potential interest expense associated with this matter, the Company made a payment of $217 million in the third quarter of 2007, which reduced the Company’s total liability for uncertain tax positions by $141 million. Similarly, during the third quarter of 2008, the Company made an additional payment of $55.1 million related to a potential penalty assessment plus accrued interest on this matter. The Company continues negotiating with the IRS on the ultimate settlement of this matter. The issues raised by the IRS associated with the capital loss transaction are not related to the Company's reorganization in Bermuda, or the Company's intercompany debt structure.

21

On July 20, 2007, the Company and its consolidated subsidiaries received a notice from the IRS containing proposed adjustments to the Company’s tax filings in connection with an audit of the 2001 and 2002 tax years. The IRS did not contest the validity of the Company’s reincorporation in Bermuda. The most significant adjustments proposed by the IRS involve treating the entire intercompany debt incurred in connection with the Company’s reincorporation in Bermuda as equity. As a result of this recharacterization, the IRS has disallowed the deduction of interest paid on the debt and imposed dividend withholding taxes on the payments denominated as interest. These adjustments proposed by the IRS, if upheld in their entirety, would result in additional taxes with respect to 2002 of approximately $190 million plus interest, and would require the Company to record additional charges associated with this matter. At this time, the IRS has not yet begun their examination of the Company’s tax filings for years subsequent to 2002. However, if these adjustments or a portion of these adjustments proposed by the IRS are ultimately sustained, it is likely to also affect subsequent tax years.

The Company strongly disagrees with the view of the IRS and filed a protest with the IRS in the third quarter of 2007. Going forward, the Company intends to vigorously contest these proposed adjustments. The Company, in consultation with its outside advisors, carefully considered many factors in determining the terms of the intercompany debt, including the obligor’s ability to service the debt and the availability of equivalent financing from unrelated parties, two factors prominently cited by the IRS in denying debt treatment. The Company believes that its characterization of that obligation as debt for tax purposes was supported by the relevant facts and legal authorities at the time of its creation. The subsequent financial results of the relevant companies, including the actual cash flow generated by operations and the production of significant additional cash flow from dispositions have confirmed the ability to service this debt. Although the outcome of this matter cannot be predicted with certainty, based upon an analysis of the strength of its position, the Company believes that it is adequately reserved for this matter. As the Company moves forward to resolve this matter with the IRS, it is reasonably possible that the reserves established may be adjusted within the next 12 months. However, the Company does not expect that the ultimate resolution will have a material adverse impact on its future results of operations or financial position.

The Company believes that it has adequately provided for any reasonably foreseeable resolution of any tax disputes, but will adjust its reserves if events so dictate in accordance with FIN 48. To the extent that the ultimate results differ from the original or adjusted estimates of the Company, the effect will be recorded in the provision for income taxes.
 
Note 17 – Earnings Per Share (EPS)
Basic EPS is calculated by dividing net earnings (income available to common shareholders) by the weighted-average number of Class A common shares outstanding for the applicable period. Diluted EPS is calculated after adjusting the denominator of the basic EPS calculation for the effect of all potentially dilutive common shares, which in the Company’s case, includes shares issuable under share-based compensation plans. The following table summarizes the weighted-average number of Class A common shares outstanding for basic and diluted earnings per share calculations:

22

 
 	 	Three months ended	 	Nine months ended	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Weighted-average number of basic shares	 	 	320.2	 	 	283.4	 	 	293.9	 	 	296.2	 	
Shares issuable under incentive stock plans	 	 	3.9	 	 	5.4	 	 	3.6	 	 	4.3	 	
Weighted-average number of diluted shares	 	 	324.1	 	 	288.8	 	 	297.5	 	 	300.5	 	
Anti-dilutive shares	 	 	13.6	 	 	0.1	 	 	5.4 	 	 	0.3	 	

Note 18 – Business Segment Information
The Company classifies its business into four reportable segments based on industry and market focus: Air Conditioning Systems and Services, Climate Control Technologies, Industrial Technologies and Security Technologies.

In connection with the acquisition of Trane, the Company expanded its reportable segments to include the Air Conditioning Systems and Services segment. The results of Trane’s operations are presented within this segment. The reported results for the nine months ended September 30, 2008 reflect activity since the Acquisition Date (June 6, 2008 through September 30, 2008).

As a result of the divestitures of Compact Equipment and the Road Development business unit during 2007, the Company realigned its operating and reporting segments to better reflect its market focus. Segment information for all periods has been revised to exclude the results of the Bobcat, Utility Equipment, Attachments and Road Development business units.

A summary of operations by reportable segment as of September 30 is as follows:

 	 	Three months ended	 	Nine months ended	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Net revenues	 	 	 	 	 	 	 	 	 	
Air Conditioning Systems and Services	 	$	2,051.1	 	$	-	 	$	2,749.0	 	$	-	 	
Climate Control Technologies	 	 	895.0	 	 	882.1	 	 	2,605.3	 	 	2,457.0	 	
Industrial Technologies	 	 	718.3	 	 	701.5	 	 	2,267.8	 	 	2,119.1	 	
Security Technologies	 	 	648.8	 	 	655.4	 	 	1,935.2	 	 	1,863.7	 	
Total	 	$	4,313.2	 	$	2,239.0	 	$	9,557.3	 	$	6,439.8	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	 	 	 	 	 	 	 	 	 	 	 	 	 	
Air Conditioning Systems and Services	 	$	89.5	 	$	-	 	$	155.6	 	$	-	 	
Climate Control Technologies	 	 	103.0	 	 	100.1	 	 	297.9	 	 	269.2	 	
Industrial Technologies	 	 	81.4	 	 	93.4	 	 	283.4	 	 	294.4	 	
Security Technologies	 	 	126.0	 	 	112.8	 	 	353.3	 	 	311.8	 	
Unallocated corporate expense	 	 	(52.5	)	 	(30.0	)	 	(134.2	)	 	(116.4	)	
Total	 	$	347.4	 	$	276.3	 	$	956.0	 	$	759.0	 	

Long-lived assets by geographic area at September 30, 2008 and December 31, 2007 are as follows:

23

In millions	 	2008	 	2007	 	
United States	 	$	4,049.2	 	$	820.5	 	
Non-U.S.	 	 	770.9	 	 	639.6	 	
Total	 	$	4,820.1	 	$	1,460.1	 	
 
Note 19   –   Commitments and Contingencies
The Company is involved in various litigations, claims and administrative proceedings, including environmental and product liability matters. Amounts recorded for identified contingent liabilities are estimates, which are reviewed periodically and adjusted to reflect additional information when it becomes available. Subject to the uncertainties inherent in estimating future costs for contingent liabilities, management believes that the liability which may result from these legal matters would not have a material adverse effect on the financial condition, results of operations, liquidity or cash flows.

Environmental Matters
The Company continues to be dedicated to an environmental program to reduce the utilization and generation of hazardous materials during the manufacturing process and to remediate identified environmental concerns. As to the latter, the Company is currently engaged in site investigations and remediation activities to address environmental cleanup from past operations at current and former manufacturing facilities.

The Company is sometimes a party to environmental lawsuits and claims and has received notices of potential violations of environmental laws and regulations from the Environmental Protection Agency and similar state authorities. It has also been identified as a potentially responsible party (PRP) for cleanup costs associated with off-site waste disposal at federal Superfund and state remediation sites. For all such sites, there are other PRPs and, in most instances, the Company’s involvement is minimal.

In estimating its liability, the Company has assumed it will not bear the entire cost of remediation of any site to the exclusion of other PRPs who may be jointly and severally liable. The ability of other PRPs to participate has been taken into account, based generally on the parties’ financial condition and probable contributions on a per site basis. Additional lawsuits and claims involving environmental matters are likely to arise from time to time in the future.

During the three and nine month periods ended September 30, 2008, the Company spent $4.0 million and $10.3 million, respectively, for environmental remediation expenditures at sites presently or formerly owned or leased by us. As of September 30, 2008 and December 31, 2007, the Company has recorded reserves of $103.4 million and $101.8 million, respectively, for environmental matters. The Company believes that these expenditures will continue and may increase over time. Given the evolving nature of environmental laws, regulations and technology, the ultimate cost of future compliance is uncertain.

Asbestos Matters
Certain wholly owned subsidiaries of the Company are named as defendants in asbestos-related lawsuits in state and federal courts. In virtually all of the suits, a large number of other companies have also been named as defendants. The vast majority of those claims has been filed against either Ingersoll Rand Company (IR-New Jersey) and Trane and generally allege injury caused by exposure to asbestos contained in certain current and historical products sold by IR-New Jersey and Trane, primarily pumps, boilers and railroad brake shoes. Neither IR-New Jersey nor Trane was a producer or manufacturer of asbestos, however, some formerly manufactured products utilized asbestos-containing components such as gaskets and packings purchased from third-party suppliers.

24

 
Prior to the fourth quarter of 2007, the Company recorded a liability (which it periodically updated) for its actual and anticipated future asbestos settlement costs projected seven years into the future. The Company did not record a liability for future asbestos settlement costs beyond the seven-year period covered by its reserve because such costs previously were not reasonably estimable for the reasons detailed below.
 
In the fourth quarter of 2007, the Company again reviewed its history and experience with asbestos-related litigation and determined that it had now become possible to make a reasonable estimate of its total liability for pending and unasserted potential future asbestos-related claims. This determination was based upon the Company’s analysis of developments in asbestos litigation, including the substantial and continuing decline in the filing of non-malignancy claims against the Company, the establishment in many jurisdictions of inactive or deferral dockets for such claims, the decreased value of non-malignancy claims because of changes in the legal and judicial treatment of such claims, increasing focus of the asbestos litigation upon malignancy claims, primarily those involving mesothelioma, a cancer with a known historical and predictable future annual incidence rate, and the Company’s substantial accumulated experience with respect to the resolution of malignancy claims, particularly mesothelioma claims, filed against it.

Accordingly, in the fourth quarter of 2007, the Company retained Dr. Thomas Vasquez of Analysis, Research & Planning Corporation (collectively, “ARPC”) to assist it in calculating an estimate of the Company’s total liability for pending and unasserted future asbestos-related claims. ARPC is a respected expert in performing complex calculations such as this. ARPC has been involved in many asbestos-related valuations of current and future liabilities, and its valuation methodologies have been accepted by numerous courts.
 
The methodology used by ARPC to project the Company’s total liability for pending and unasserted potential future asbestos-related claims relied upon and included the following factors, among others:

 	·	ARPC’s interpretation of a widely accepted forecast of the population likely to have been occupationally exposed to asbestos;	

 	·	epidemiological studies estimating the number of people likely to develop asbestos-related diseases such as mesothelioma and lung cancer;	

 	·	the Company’s historical experience with the filing of non-malignancy claims against it and the historical ratio between the numbers of non-malignancy and lung cancer claims filed against the Company;	

 	·	ARPC’s analysis of the number of people likely to file an asbestos-related personal injury claim against the Company based on such epidemiological and historical data and the Company’s most recent three-year claims history;	

 	·	an analysis of the Company’s pending cases, by type of disease claimed;	

25

 	·	an analysis of the Company’s most recent three-year history to determine the average settlement and resolution value of claims, by type of disease claimed;	

 	·	an adjustment for inflation in the future average settlement value of claims, at a 2.5% annual inflation rate, adjusted downward to 1.5% to take account of the declining value of claims resulting from the aging of the claimant population;	

 	·	an analysis of the period over which the Company has and is likely to resolve asbestos-related claims against it in the future.	

Based on these factors, ARPC calculated a total estimated liability of $755 million for the Company to resolve all pending and unasserted potential future claims through 2053, which is ARPC’s reasonable best estimate of the time it will take to resolve asbestos-related claims. This amount is on a pre-tax basis, not discounted for the time-value of money, and excludes the Company’s defense fees (which will continue to be expensed by the Company as they are incurred). After considering ARPC’s analysis and the factors listed above, in the fourth quarter of 2007, the Company increased its recorded liability for asbestos claims by $538 million, from $217 million to $755 million.

In addition, during the fourth quarter of 2007, the Company recorded an $89 million increase in its assets for probable asbestos-related insurance recoveries to $250 million. This represents amounts due to the Company for previously paid and settled claims and the probable reimbursements relating to its estimated liability for pending and future claims. In calculating this amount, the Company used the estimated asbestos liability for pending and projected future claims calculated by ARPC. It also considered the amount of insurance available, gaps in coverage, allocation methodologies, solvency ratings and creditworthiness of the insurers, the amounts already recovered from and the potential for settlements with insurers, and the terms of existing settlement agreements with insurers.
 
During the fourth quarter of 2007, the Company recorded a non-cash charge to earnings of discontinued operations of $449 million ($277 million after tax), which is the difference between the amount by which the Company increased its total estimated liability for pending and projected future asbestos-related claims and the amount that the Company expects to recover from insurers with respect to that increased liability.
 
In connection with our acquisition of Trane, the Company requested ARPC to assist in calculating Trane’s asbestos-related valuations of current and future liabilities. As required by SFAS No. 141, “Business Combinations,” the Company is required to record the assumed asbestos obligations and associated insurance-related assets at their fair value at the Acquisition Date. The Company preliminarily estimates that the assumed asbestos obligation and associated insurance-related assets at the Acquisition Date to be $494 million and $249 million, respectively. These amounts were estimated based on certain assumptions and factors consistent with those described above.

Trane continues to be in litigation against certain carriers whose policies it believes provide coverage for asbestos claims. The insurance carriers named in this suit have challenged Trane’s right to recovery. Trane filed the action in April 1999 in the Superior Court of New Jersey, Middlesex County, against various primary and lower layer excess insurance carriers, seeking coverage for environmental claims (the “NJ Litigation”). The NJ Litigation was later expanded to also seek coverage for asbestos-related liabilities from twenty-one primary and lower layer excess carriers and underwriting syndicates. The environmental claims against most of the insurers in the NJ Litigation have been settled.  On September 19, 2005, the court granted Trane’s motion to add claims for insurance coverage for asbestos-related liabilities against 16 additional insurers and 117 new insurance policies to the NJ Litigation. The court also required the parties to submit all contested matters to mediation. Trane engaged in its first mediation session with the NJ Litigation defendants on January 18, 2006 and has engaged in active discussions since that time. 

26

Trane has now settled with a substantial number of its insurers, collectively accounting for approximately 75% of its recorded asbestos-related liability insurance receivable as at September 30, 2008.  More specifically, effective August 26, 2008, Trane entered into a coverage-in-place agreement (“August 26 Agreement”) with the following five insurance companies or groups: 1) Hartford; 2) Travelers; 3) Allstate (solely in its capacity as successor-in-interest to Northbrook Excess & Surplus Insurance Company); 4) Dairyland Insurance Company; and 5) AIG.  The August 26 Agreement provides for the reimbursement by the insurer signatories of a portion of Trane’s costs for asbestos bodily injury claims under specified terms and conditions and in exchange for certain releases and indemnifications from Trane.  In addition, on September 12, 2008, Trane entered into a settlement agreement with Mt. McKinley Insurance Company and Everest Reinsurance Company, both members of the Everest Re group, resolving all claims in the NJ Litigation involving policies issued by those companies (“Everest Re Agreement”).  The Everest Re Agreement contains a number of elements, including policy buy-outs and partial buy-outs in exchange for a cash payment along with coverage-in-place features similar to those contained in the August 26 Agreement, in exchange for certain releases and indemnifications by Trane.  Trane remains in settlement negotiations with the insurer defendants in the NJ Litigation not encompassed within the August 26 Agreement or Everest Re Agreement.  Once concluded, we believe NJ Litigation will resolve coverage issues with respect to approximately 96% of Trane’s recorded insurance receivable in connection with asbestos-related liabilities.

The amounts recorded by the Company for asbestos-related liabilities and insurance-related assets are based on currently available information. The Company’s actual liabilities or insurance recoveries could be significantly higher or lower than those recorded if assumptions used in the Company’s or ARPC’s calculations vary significantly from actual results. Key variables in these assumptions are identified above and include the number and type of new claims to be filed each year, the average cost of resolution of each such new claim, the resolution of coverage issues with insurance carriers, and the solvency risk with respect to the Company’s insurance carriers. Furthermore, predictions with respect to these variables are subject to greater uncertainty as the projection period lengthens. Other factors that may affect the Company’s liability include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, reforms that may be made by state and federal courts, and the passage of state or federal tort reform legislation.
 
The aggregate amount of the stated limits in insurance policies available to the Company for asbestos-related claims acquired over many years and from many different carriers, is substantial. However, limitations in that coverage, primarily due to the considerations described above, are expected to result in the projected total liability to claimants substantially exceeding the probable insurance recovery.

From receipt of its first asbestos claims more than twenty five years ago to December 31, 2007, the Company has resolved (by settlement or dismissal) approximately 208,000 claims. The total amount of all settlements paid by the Company (excluding insurance recoveries) and by its insurance carriers is approximately $308 million, for an average payment per resolved claim of $1,480. The average payment per claim resolved during the year ended December 31, 2007 was $7,491. This amount reflects the Company’s emphasis on resolution of higher value malignancy claims, particularly mesothelioma claims, rather than lower value non-malignancy claims, which are more heavily represented in the Company’s historical settlements. The table below provides additional information regarding asbestos-related claims filed against the Company:

27

 	 	2005	 	2006	 	2007	 	
Open claims - January 1	 	 	105,811	 	 	102,968	 	 	101,709	 	
New claims filed	 	 	11,132	 	 	6,457	 	 	5,398	 	
Claims settled	 	 	(12,505	)	 	(6,558	)	 	(5,005	)	
Claims dismissed	 	 	(1,470	)	 	(1,158	)	 	(1,479	)	
Open claims - December 31	 	 	102,968	 	 	101,709	 	 	100,623	 	
 
From receipt of the first asbestos claim more than twenty years ago through December 31, 2007, Trane has resolved 61,002 (by settlement or dismissal) claims. Trane and its insurance carriers have paid settlements of approximately $109.0 million, which represents an average payment per resolved claim of $1,786. During 2007, 3,019 new claims were filed against Trane, 1,826 claims were dismissed and 740 claims were settled. At December 31, 2007, there were 105,023 open claims pending against Trane. Because claims are frequently filed and settled in large groups, the amount and timing of settlements, as well as the number of open claims, can fluctuate significantly from period to period.
 
The table below provides additional information regarding asbestos-related claims filed against Trane, reflecting updated information for the last three years.

 	 	2005	 	2006	 	2007	 	
Open claims - January 1	 	 	118,381	 	 	113,730	 	 	104,570	 	
New claims filed	 	 	10,972	 	 	4,440	 	 	3,019	 	
Claims settled	 	 	(954	)	 	(848	)	 	(740	)	
Claims dismissed	 	 	(14,544	)	 	(12,751	)	 	(1,826	)	
Other	 	 	(125	)	 	(1	)	 	-	 	
Open claims - December 31	 	 	113,730	 	 	104,570	 	 	105,023	 	

At September 30, 2008, over 90 percent of the open claims against the Company are non-malignancy claims, many of which have been placed on inactive or deferral dockets and the vast majority of which have little or no settlement value against the Company, particularly in light of recent changes in the legal and judicial treatment of such claims.

At September 30, 2008, the Company's liability for asbestos related matters and the asset for probable asbestos-related insurance recoveries totaled $1,210.7 million and $439.3 million, respectively, compared to $754.9 million and $249.8 million at December 31, 2007.

The (costs) income associated with the settlement and defense of asbestos related claims after insurance recoveries were as follows:

28

 	 	Three months ended	 	Nine months ended 	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Continuing operations	 	$	1.7	 	$	-	 	$	0.9	 	$	-	 	
Discontinued operations	 	 	(2.5	)	 	(7.1	)	 	(2.4	)	 	(27.1	)	
Total	 	$	(0.8	)	$	(7.1	)	$	(1.5	)	$	(27.1	)	

The Company records certain income and expenses associated with its asbestos liabilities and corresponding insurance recoveries within discontinued operations, as they relate to previously divested businesses, primarily Ingersoll-Dresser Pump, which was sold in 2000. Income and expenses associated with Trane’s asbestos liabilities and corresponding insurance recoveries are recorded within continuing operations.

Other
The following table represents the changes in the product warranty liability for the nine months ended September 30:

In millions	 	2008	 	2007	 	
Balance at beginning of period	 	$	146.9	 	$	137.1	 	
Reductions for payments	 	 	(130.2	)	 	(53.9	)	
Accruals for warranties issued during the current period	 	 	137.3	 	 	61.0	 	
Changes to accruals related to preexisting warranties	 	 	(0.7	)	 	(2.0	)	
Acquisitions	 	 	476.0	 	 	-	 	
Translation	 	 	(2.6	)	 	4.1	 	
Balance at end of period	 	$	626.7	 	$	146.3	 	
 
The Company has other contingent liabilities for $15.5 million. These liabilities primarily result from performance bonds, guarantees and stand-by letters of credit associated with the prior sale of products by divested businesses.

Note 20 – Fair Value Measurement
Effective January 1, 2008, the Company adopted SFAS No. 157, “Fair Value Measurements,” (SFAS 157). SFAS 157 establishes a framework for measuring fair value that is based on the inputs market participants use to determine the fair value of an asset or liability and establishes a fair value hierarchy to prioritize those inputs. The fair value hierarchy outlined in SFAS 157 is comprised of three levels that are described below:

 	·	Level 1 – Inputs based on quoted prices in active markets for identical assets or liabilities.	

 	·	Level 2 – Inputs other than Level 1 quoted prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.	

	·	Level 3 – Unobservable inputs based on little or no market activity and that are significant to the fair value of the assets and liabilities.    	

29

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are obtained from independent sources and can be validated by a third party, whereas unobservable inputs reflect assumptions regarding what a third party would use in pricing an asset or liability based on the best information available under the circumstances. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Effective February 12, 2008, the Company adopted FASB Staff Position SFAS 157-2, “Effective Date of FASB Statement No. 157,” which defers the application date of the provisions of SFAS 157 for all nonfinancial assets and liabilities except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Due to the deferral, the Company has delayed its implementation of the SFAS 157 provisions on the fair value of goodwill, indefinite-lived intangible assets and nonfinancial long-lived assets.

Assets and liabilities measured at fair value on a recurring basis at September 30, 2008 are as follows:

 	 	Fair value measurements	 	Total	 	
In millions	 	Level 1	 	Level 2	 	Level 3	 	fair value	 	
Assets:	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	741.5	 	$	-	 	$	-	 	$	741.5	 	
Marketable securities	 	 	7.2	 	 	-	 	 	-	 	 	7.2	 	
Derivative instruments	 	 	-	 	 	11.8	 	 	-	 	 	11.8	 	
Securitization	 	 	-	 	 	-	 	 	152.5	 	 	152.5	 	
Benefit trust assets	 	 	-	 	 	142.1	 	 	-	 	 	142.1	 	
Total	 	$	748.7	 	$	153.9	 	$	152.5	 	$	1,055.1	 	
 	 	 		 	 		 	 		 	 		 	
Liabilities:	 	 		 	 		 	 		 	 		 	
Derivative instruments	 	$	-	 	$	47.2	 	$	-	 	$	47.2	 	
Benefit liabilities	 	 	-	 	 	144.2	 	 	-	 	 	144.2	 	
Total	 	$	-	 	$	191.4	 	$	-	 	$	191.4	 	
 
SFAS 157 defines fair value as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company determines the fair value of its financial assets and liabilities using the following methodologies:

 	·	Cash and cash equivalents – These amounts include cash on hand, demand deposits and all highly liquid investments with original maturities at the time of purchase of three months or less and are held in U.S and non-U.S. currencies.	

 	·	Marketable securities – These securities include investments in publically traded stock of non-U.S. companies held by non-U.S. subsidiaries of the Company. The fair value is obtained for the securities based on observable market prices quoted on public stock exchanges.	

 	·	Derivatives instruments – These instruments include forward contracts related to non-U.S. currencies, commodities and a cross-currency swap of foreign denominated debt. The fair value of the derivative instruments are determined based on a pricing model that uses inputs from actively quoted currency and commodity markets that are readily accessible and observable.	

30

 	·	Benefit trust assets – These assets include money market funds and insurance contracts that are the underlying for the benefit assets. The fair value of the assets is based on observable market prices quoted in a readily accessible and observable market.	

 	·	Securitization – This asset is the interest the Company retains in receivables sold into a special purpose entity. The fair value of the asset is based on a model that requires unobservable inputs.	

 	·	Benefit liabilities – These liabilities include deferred compensation and executive death benefits. The fair value is based on the underlying investment portfolio of the deferred compensation and the specific benefits guaranteed in a death benefit contract with each executive.	

Effective January 1, 2008, the Company also adopted SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115,” (SFAS 159). SFAS 159 allows the Company the irrevocable option, at specified election dates, to measure financial assets and liabilities at their current fair value, with the corresponding changes in fair value from period to period recognized in the income statement. As of September 30, 2008, the Company has not elected to utilize the fair value option on any of its financial assets or liabilities.

Note 21 – Guarantor Financial Information
Ingersoll-Rand Company Limited, a Bermuda company (IR-Limited) is the successor to Ingersoll-Rand Company, a New Jersey corporation (IR-New Jersey), following a corporate reorganization (the reorganization) that became effective on December 31, 2001. The reorganization was accomplished through a merger of a newly formed subsidiary of IR-Limited. IR-Limited and its subsidiaries continue to conduct the businesses previously conducted by IR-New Jersey and its subsidiaries. The reorganization has been accounted for as a reorganization of entities under common control and accordingly, did not result in any changes to the consolidated amounts of assets, liabilities and shareholders’ equity.

As part of the reorganization, IR-Limited guaranteed all of the issued public debt securities of IR-New Jersey. The subsidiary issuer, IR-New Jersey, is 100% owned by the parent, IR-Limited, the guarantees are full and unconditional, and no other subsidiary of the Company guarantees the securities.

IR-Limited issued Class B common shares to IR-New Jersey in exchange for a $3.6 billion note and shares of certain IR-New Jersey subsidiaries. The note, which is due in 2011, has a fixed rate of interest of 11% per annum payable semi-annually and imposes certain restrictive covenants upon IR-New Jersey. At September 30, 2008, $2.1 billion of the original $3.6 billion note remains outstanding. The Class B common shares are non-voting and pay dividends comparable to the Class A common shares. In 2002, IR-Limited contributed the note to a wholly owned subsidiary, which subsequently transferred portions of the note to several other subsidiaries, all of which are included in the “Other Subsidiaries” below. Accordingly, the subsidiaries of IR-Limited remain creditors of IR-New Jersey.

IR-New Jersey has unconditionally guaranteed payment of the principal, premium, if any, and interest on the Company’s 4.75% Senior Notes due in 2015 in the aggregate principal amount of $300 million. The guarantee is unsecured and provided on an unsubordinated basis. The guarantee ranks equally in right of payment with all of the existing and future unsecured and unsubordinated debt of IR-New Jersey.

31

The Company has revised the guarantor financial statements for all periods presented in order to reflect Ingersoll-Rand Global Holding Company Limited (IR Global Holding) as a stand-alone subsidiary. IR Global Holding, a 100% owned subsidiary of IR-Limited, issued public debt that is guaranteed by IR-Limited (see Note 9, Debt and Credit Facilities, for further details on the public debt issuance). As part of the process to revise the condensed financial statements, the Company noted errors within the consolidation process of the subsidiaries. Total consolidated results were not impacted by these revisions; however, certain amounts reported within the IR-New Jersey and Other Subsidiary columns have been corrected. The Company determined that these errors were immaterial to the Company’s financial statements. All periods have been revised in the current presentation.

The condensed consolidating financial statements present IR-Limited, IR Global Holding and IR-New Jersey investments in their subsidiaries using the equity method of accounting. Intercompany investments in the non-voting Class B common shares are accounted for on the cost method and are reduced by intercompany dividends. In accordance with generally accepted accounting principles, the amounts related to the issuance of the Class B shares have been presented as contra accounts and included within Other Shareholders’ Equity since the Class B issuance on December 31, 2001. The notes payable continue to be reflected as a liability on the balance sheet of IR-New Jersey and are enforceable in accordance with their terms.

The following condensed consolidated financial information for IR-Limited, IR Global Holding, IR-New Jersey, and all their other subsidiaries is included so that separate financial statements of IR Global Holding and IR-New Jersey are not required to be filed with the U.S. Securities and Exchange Commission.

32

Condensed Consolidating Income Statement        
For the three months ended September 30, 2008
 
 	 	IR	 	IR Global	 	IR	 	Other	 	Consolidating	 	IR Limited	 	
In millions	 	Limited	 	Holding	 	New Jersey	 	Subsidiaries	 	Adjustments	 	Consolidated	 	
Net revenues	 	$	-	 	$	-	 	$	230.3	 	$	4,082.9	 	$	-	 	$	4,313.2	 	
Cost of goods sold	 	 	-	 	 	-	 	 	(176.8	)	 	(3,032.6	)	 	-	 	 	(3,209.4	)	
Selling and administrative expenses	 	 	(8.3	)	 	(0.4	)	 	(69.8	)	 	(677.9	)	 	-	 	 	(756.4	)	
Operating (loss) income	 	 	(8.3	)	 	(0.4	)	 	(16.3	)	 	372.4	 	 	-	 	 	347.4	 	
Equity earnings in affiliates (net of tax)	 	 	263.5	 	 	328.9	 	 	52.6	 	 	(19.0	)	 	(626.0	)	 	-	 	
Interest expense	 	 	(3.8	)	 	(44.0	)	 	(16.5	)	 	(19.4	)	 	-	 	 	(83.7	)	
Intercompany interest and fees	 	 	(24.3	)	 	(31.9	)	 	(67.5	)	 	123.7	 	 	-	 	 	-	 	
Other, net	 	 	0.6	 	 	(0.4	)	 	(0.7	)	 	(3.2	)	 	-	 	 	(3.7	)	
Earnings (loss) before income taxes	 	 	227.7	 	 	252.2	 	 	(48.4	)	 	454.5	 	 	(626.0	)	 	260.0	 	
Benefit (provision) for income taxes	 	 	-	 	 	-	 	 	31.4	 	 	(57.7	)	 	-	 	 	(26.3	)	
Earnings (loss) from continuing operations	 	 	227.7	 	 	252.2	 	 	(17.0	)	 	396.8	 	 	(626.0	)	 	233.7	 	
Discontinued operations, net of tax	 	 	-	 	 	-	 	 	(2.0	)	 	(4.0	)	 	-	 	 	(6.0	)	
Net earnings (loss)	 	$	227.7	 	$	252.2	 	$	(19.0	)	$	392.8	 	$	(626.0	)	$	227.7	 	
 
Condensed Consolidating Income Statement        
For the nine months ended September 30, 2008          
 
 	 	IR	 	IR Global	 	IR	 	Other	 	Consolidating	 	IR Limited	 	
In millions	 	Limited	 	Holding	 	New Jersey	 	Subsidiaries	 	Adjustments	 	Consolidated	 	
Net revenues	 	$	-	 	$	-	 	$	679.8	 	$	8,877.5	 	$	-	 	$	9,557.3	 	
Cost of goods sold	 	 	-	 	 	-	 	 	(500.9	)	 	(6,445.5	)	 	-	 	 	(6,946.4	)	
Selling and administrative expenses	 	 	(34.7	)	 	(0.6	)	 	(226.4	)	 	(1,393.2	)	 	-	 	 	(1,654.9	)	
Operating (loss) income	 	 	(34.7	)	 	(0.6	)	 	(47.5	)	 	1,038.8	 	 	-	 	 	956.0	 	
Equity earnings in affiliates (net of tax)	 	 	748.7	 	 	856.0	 	 	155.8	 	 	(60.2	)	 	(1,700.3	)	 	-	 	
Interest expense	 	 	(11.6	)	 	(54.7	)	 	(50.2	)	 	(39.9	)	 	-	 	 	(156.4	)	
Intercompany interest and fees	 	 	(68.9	)	 	(137.5	)	 	(196.2	)	 	402.6	 	 	-	 	 	-	 	
Other, net	 	 	31.9	 	 	26.3	 	 	6.8	 	 	(3.6	)	 	-	 	 	61.4	 	
Earnings (loss) before income taxes	 	 	665.4	 	 	689.5	 	 	(131.3	)	 	1,337.7	 	 	(1,700.3	)	 	861.0	 	
Benefit (provision) for income taxes	 	 	-	 	 	-	 	 	95.2	 	 	(248.4	)	 	-	 	 	(153.2	)	
Earnings (loss) from continuing operations	 	 	665.4	 	 	689.5	 	 	(36.1	)	 	1,089.3	 	 	(1,700.3	)	 	707.8	 	
Discontinued operations, net of tax	 	 	-	 	 	-	 	 	(24.1	)	 	(18.3	)	 	-	 	 	(42.4	)	
Net earnings (loss)	 	$	665.4	 	$	689.5	 	$	(60.2	)	$	1,071.0	 	$	(1,700.3	)	$	665.4	 	

33

Condensed Consolidating Income Statement        
For the three months ended September 30, 2007          
 
 	 	IR	 	IR Global	 	IR	 	Other	 	Consolidating	 	IR Limited	 	
In millions	 	Limited	 	Holding	 	New Jersey	 	Subsidiaries	 	Adjustments	 	Consolidated	 	
Net revenues	 	$	-	 	$	-	 	$	229.9	 	$	2,009.1	 	$	-	 	$	2,239.0	 	
Cost of goods sold	 	 	-	 	 	-	 	 	(157.5	)	 	(1,450.7	)	 	-	 	 	(1,608.2	)	
Selling and administrative expenses	 	 	(7.5	)	 	0.2	 	 	(70.0	)	 	(277.2	)	 	-	 	 	(354.5	)	
Operating (loss) income	 	 	(7.5	)	 	0.2	 	 	2.4	 	 	281.2	 	 	-	 	 	276.3	 	
Equity earnings in affiliates (net of tax)	 	 	300.6	 	 	296.5	 	 	122.5	 	 	21.1	 	 	(740.7	)	 	-	 	
Interest expense	 	 	(9.2	)	 	-	 	 	(17.6	)	 	(6.5	)	 	-	 	 	(33.3	)	
Intercompany interest and fees	 	 	(14.5	)	 	(47.3	)	 	(119.4	)	 	181.2	 	 	-	 	 	-	 	
Other, net	 	 	(2.8	)	 	(1.2	)	 	23.6	 	 	(27.2	)	 	-	 	 	(7.6	)	
Earnings (loss) before income taxes	 	 	266.6	 	 	248.2	 	 	11.5	 	 	449.8	 	 	(740.7	)	 	235.4	 	
Benefit (provision) for income taxes	 	 	-	 	 	-	 	 	10.8	 	 	(48.6	)	 	-	 	 	(37.8	)	
Earnings (loss) from continuing operations	 	 	266.6	 	 	248.2	 	 	22.3	 	 	401.2	 	 	(740.7	)	 	197.6	 	
Discontinued operations, net of tax	 	 	-	 	 	-	 	 	(1.2	)	 	70.2	 	 	-	 	 	69.0	 	
Net earnings (loss)	 	$	266.6	 	$	248.2	 	$	21.1	 	$	471.4	 	$	(740.7	)	$	266.6	 	
 
Condensed Consolidating Income Statement        
For the nine months ended September 30, 2007          

 	 	IR	 	IR Global	 	IR	 	Other	 	Consolidating	 	IR Limited	 	
In millions	 	Limited	 	Holding	 	New Jersey	 	Subsidiaries	 	Adjustments	 	Consolidated	 	
Net revenues	 	$	-	 	$	-	 	$	680.5	 	$	5,759.3	 	$	-	 	$	6,439.8	 	
Cost of goods sold	 	 	-	 	 	-	 	 	(470.7	)	 	(4,143.1	)	 	-	 	 	(4,613.8	)	
Selling and administrative expenses	 	 	(23.5	)	 	(0.6	)	 	(230.7	)	 	(812.2	)	 	-	 	 	(1,067.0	)	
Operating (loss) income	 	 	(23.5	)	 	(0.6	)	 	(20.9	)	 	804.0	 	 	-	 	 	759.0	 	
Equity earnings in affiliates (net of tax)	 	 	1,513.1	 	 	1,105.6	 	 	366.9	 	 	304.5	 	 	(3,290.1	)	 	-	 	
Interest expense	 	 	(26.8	)	 	-	 	 	(52.6	)	 	(20.4	)	 	-	 	 	(99.8	)	
Intercompany interest and fees	 	 	(39.9	)	 	(103.3	)	 	(355.5	)	 	498.7	 	 	-	 	 	-	 	
Other, net	 	 	25.3	 	 	(2.4	)	 	46.7	 	 	(68.7	)	 	-	 	 	0.9	 	
Earnings (loss) before income taxes	 	 	1,448.2	 	 	999.3	 	 	(15.4	)	 	1,518.1	 	 	(3,290.1	)	 	660.1	 	
Benefit (provision) for income taxes	 	 	-	 	 	-	 	 	101.0	 	 	(198.9	)	 	-	 	 	(97.9	)	
Earnings (loss) from continuing operations	 	 	1,448.2	 	 	999.3	 	 	85.6	 	 	1,319.2	 	 	(3,290.1	)	 	562.2	 	
Discontinued operations, net of tax	 	 	-	 	 	-	 	 	218.9	 	 	667.1	 	 	-	 	 	886.0	 	
Net earnings (loss)	 	$	1,448.2	 	$	999.3	 	$	304.5	 	$	1,986.3	 	$	(3,290.1	)	$	1,448.2	 	

34

Condensed Consolidating Balance Sheet          
September 30, 2008            

 	 	IR	 	IR Global	 	IR	 	Other	 	Consolidating	 	IR Limited	 	
In millions	 	Limited	 	Holding	 	New Jersey	 	Subsidiaries	 	Adjustments	 	Consolidated	 	
Current assets:	 	 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	-	 	$	49.3	 	$	50.0	 	$	642.2	 	$	-	 	$	741.5	 	
Accounts and notes receivable, net	 	 	0.1	 	 	-	 	 	241.3	 	 	2,550.4	 	 	-	 	 	2,791.8	 	
Inventories, net	 	 	-	 	 	-	 	 	73.3	 	 	1,721.8	 	 	-	 	 	1,795.1	 	
Other current assets	 	 	-	 	 	2.3	 	 	348.6	 	 	444.2	 	 	-	 	 	795.1	 	
Accounts and notes receivable affiliates	 	 	470.5	 	 	552.0	 	 	4,061.8	 	 	37,299.4	 	 	(42,383.7	)	 	-	 	
Total current assets	 	 	470.6	 	 	603.6	 	 	4,775.0	 	 	42,658.0	 	 	(42,383.7	)	 	6,123.5	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investment in affiliates	 	 	12,778.0	 	 	14,718.1	 	 	9,843.4	 	 	67,550.6	 	 	(104,890.1	)	 	-	 	
Property, plant and equipment, net	 	 	-	 	 	-	 	 	162.3	 	 	1,923.0	 	 	-	 	 	2,085.3	 	
Intangible assets, net	 	 	-	 	 	-	 	 	75.9	 	 	15,411.7	 	 	-	 	 	15,487.6	 	
Other noncurrent assets	 	 	1.3	 	 	14.4	 	 	688.4	 	 	1,374.6	 	 	-	 	 	2,078.7	 	
Total assets	 	$	13,249.9	 	$	15,336.1	 	$	15,545.0	 	$	128,917.9	 	$	(147,273.8	)	$	25,775.1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accounts payable and accruals	 	$	11.1	 	$	43.1	 	$	405.6	 	$	3,044.4	 	$	-	 	$	3,504.2	 	
Short term borrowings and current maturities of long-term debt	 	 	-	 	 	1,908.1	 	 	554.9	 	 	267.6	 	 	-	 	 	2,730.6	 	
Accounts and note payable affiliates	 	 	522.8	 	 	3,863.9	 	 	6,383.9	 	 	31,613.1	 	 	(42,383.7	)	 	-	 	
Total current liabilities	 	 	533.9	 	 	5,815.1	 	 	7,344.4	 	 	34,925.1	 	 	(42,383.7	)	 	6,234.8	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Long-term debt	 	 	299.2	 	 	1,598.7	 	 	395.7	 	 	491.5	 	 	-	 	 	2,785.1	 	
Note payable affiliate	 	 	1,550.0	 	 	-	 	 	2,097.4	 	 	-	 	 	(3,647.4	)	 	-	 	
Other noncurrent liabilities	 	 	164.0	 	 	0.3	 	 	1,885.5	 	 	4,002.6	 	 	-	 	 	6,052.4	 	
Total liabilities	 	 	2,547.1	 	 	7,414.1	 	 	11,723.0	 	 	39,419.2	 	 	(46,031.1	)	 	15,072.3	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Shareholders' equity:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Class A common shares	 	 	370.8	 	 	(52.0	)	 	-	 	 	-	 	 	-	 	 	318.8	 	
Class B common shares	 	 	270.6	 	 	-	 	 	-	 	 	-	 	 	(270.6	)	 	-	 	
Common shares	 	 	-	 	 	-	 	 	-	 	 	2,362.8	 	 	(2,362.8	)	 	-	 	
Other shareholders' equity	 	 	13,655.1	 	 	7,788.3	 	 	4,534.8	 	 	90,719.5	 	 	(106,555.5	)	 	10,142.2	 	
Accumulated other comprehensive income (loss)	 	 	563.3	 	 	51.2	 	 	(309.9	)	 	304.8	 	 	(367.6	)	 	241.8	 	
 	 	 	14,859.8	 	 	7,787.5	 	 	4,224.9	 	 	93,387.1	 	 	(109,556.5	)	 	10,702.8	 	
Less: Contra account	 	 	(4,157.0	)	 	134.5	 	 	(402.9	)	 	(3,888.4	)	 	8,313.8	 	 	-	 	
Total shareholders' equity	 	 	10,702.8	 	 	7,922.0	 	 	3,822.0	 	 	89,498.7	 	 	(101,242.7	)	 	10,702.8	 	
Total liabilities and equity	 	$	13,249.9	 	$	15,336.1	 	$	15,545.0	 	$	128,917.9	 	$	(147,273.8	)	$	25,775.1	 	

35

Condensed Consolidating Balance Sheet          
December 31, 2007            
 
 	 	IR	 	IR Global	 	IR	 	Other	 	Consolidating	 	IR Limited	 	
In millions	 	Limited	 	Holding	 	New Jersey	 	Subsidiaries	 	Adjustments	 	Consolidated	 	
Current assets:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	0.6	 	$	1,979.1	 	$	545.4	 	$	2,210.2	 	$	-	 	$	4,735.3	 	
Accounts and notes receivable, net	 	 	0.4	 	 	-	 	 	263.8	 	 	1,396.5	 	 	-	 	 	1,660.7	 	
Inventories	 	 	-	 	 	-	 	 	76.4	 	 	750.8	 	 	-	 	 	827.2	 	
Other current assets	 	 	-	 	 	0.2	 	 	136.7	 	 	340.6	 	 	-	 	 	477.5	 	
Accounts and notes receivable affiliates	 	 	252.6	 	 	916.2	 	 	5,150.6	 	 	27,478.5	 	 	(33,797.9	)	 	-	 	
Total current assets	 	 	253.6	 	 	2,895.5	 	 	6,172.9	 	 	32,176.6	 	 	(33,797.9	)	 	7,700.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Investment in affiliates	 	 	9,794.6	 	 	8,050.3	 	 	9,487.9	 	 	35,264.8	 	 	(62,597.6	)	 	-	 	
Property, plant and equipment, net	 	 	-	 	 	-	 	 	151.1	 	 	753.8	 	 	-	 	 	904.9	 	
Intangible assets, net	 	 	-	 	 	-	 	 	72.5	 	 	4,645.4	 	 	-	 	 	4,717.9	 	
Other noncurrent assets	 	 	1.5	 	 	-	 	 	704.5	 	 	346.7	 	 	-	 	 	1,052.7	 	
Total assets	 	$	10,049.7	 	$	10,945.8	 	$	16,588.9	 	$	73,187.3	 	$	(96,395.5	)	$	14,376.2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accounts payable and accruals	 	$	6.9	 	$	4.6	 	$	527.1	 	$	1,956.1	 	$	-	 	$	2,494.7	 	
Short term borrowings and current maturities of long-term debt	 	 	-	 	 	-	 	 	555.4	 	 	185.6	 	 	-	 	 	741.0	 	
Accounts and note payable affiliates	 	 	89.1	 	 	5,779.7	 	 	7,001.7	 	 	20,927.4	 	 	(33,797.9	)	 	-	 	
Total current liabilities	 	 	96.0	 	 	5,784.3	 	 	8,084.2	 	 	23,069.1	 	 	(33,797.9	)	 	3,235.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Long-term debt	 	 	299.1	 	 	-	 	 	403.2	 	 	10.4	 	 	-	 	 	712.7	 	
Note payable affiliate	 	 	1,550.0	 	 	-	 	 	2,097.4	 	 	-	 	 	(3,647.4	)	 	-	 	
Other noncurrent liabilities	 	 	196.7	 	 	0.4	 	 	1,917.0	 	 	405.8	 	 	-	 	 	2,519.9	 	
Total liabilities	 	 	2,141.8	 	 	5,784.7	 	 	12,501.8	 	 	23,485.3	 	 	(37,445.3	)	 	6,468.3	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Shareholders' equity:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Class A common shares	 	 	370.0	 	 	(97.4	)	 	-	 	 	-	 	 	-	 	 	272.6	 	
Class B common shares	 	 	270.6	 	 	-	 	 	-	 	 	-	 	 	(270.6	)	 	-	 	
Common shares	 	 	-	 	 	-	 	 	-	 	 	2,362.8	 	 	(2,362.8	)	 	-	 	
Other shareholders' equity	 	 	11,046.3	 	 	5,115.6	 	 	4,900.3	 	 	50,833.6	 	 	(64,507.0	)	 	7,388.8	 	
Accumulated other comprehensive income (loss)	 	 	568.5	 	 	52.8	 	 	(398.0	)	 	527.8	 	 	(504.6	)	 	246.5	 	
 	 	 	12,255.4	 	 	5,071.0	 	 	4,502.3	 	 	53,724.2	 	 	(67,645.0	)	 	7,907.9	 	
Less: Contra account	 	 	(4,347.5	)	 	90.1	 	 	(415.2	)	 	(4,022.2	)	 	8,694.8	 	 	-	 	
Total shareholders' equity	 	 	7,907.9	 	 	5,161.1	 	 	4,087.1	 	 	49,702.0	 	 	(58,950.2	)	 	7,907.9	 	
Total liabilities and equity	 	$	10,049.7	 	$	10,945.8	 	$	16,588.9	 	$	73,187.3	 	$	(96,395.5	)	$	14,376.2	 	

36

Condensed Consolidating Statement of Cash Flows        
For the nine months ended September 30, 2008          
 
 	 	IR	 	IR Global	 	IR	 	Other	 	IR Limited	 	
In millions	 	Limited	 	Holding	 	New Jersey	 	Subsidiaries	 	Consolidated	 	
Net cash provided by (used in) continuing operating activities	 	$	(14.3	)	$	(28.9	)	$	(1,045.9	)	$	1,090.4	 	$	1.3	 	
Net cash provided by (used in) discontinued operating activities	 	 	-	 	 	-	 	 	(2.6	)	 	(23.5	)	 	(26.1	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Capital expenditures	 	 	-	 	 	-	 	 	(25.7	)	 	(170.5	)	 	(196.2	)	
Proceeds from sale of property, plant and equipment	 	 	-	 	 	-	 	 	(7.6	)	 	67.3	 	 	59.7	 	
Acquisitions, net of cash	 	 	-	 	 	-	 	 	-	 	 	(7,105.4	)	 	(7,105.4	)	
Proceeds from business disposition, net of cash	 	 	-	 	 	-	 	 	54.7	 	 	18.6	 	 	73.3	 	
Other, net	 	 	-	 	 	-	 	 	5.4	 	 	(47.9	)	 	(42.5	)	
Net cash provided by (used in) continuing investing activities	 	 	-	 	 	-	 	 	26.8	 	 	(7,237.9	)	 	(7,211.1	)	
Net cash provided by (used in) discontinued investing activities	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from financing activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net change in debt	 	 	-	 	 	3,506.8	 	 	(8.0	)	 	(152.0	)	 	3,346.8	 	
Debt issue costs	 	 	-	 	 	(23.2	)	 	-	 	 	-	 	 	(23.2	)	
Net inter-company proceeds (payments)	 	 	341.5	 	 	(5,426.9	)	 	503.5	 	 	4,581.9	 	 	-	 	
Dividends (paid) received	 	 	(346.0	)	 	44.4	 	 	12.3	 	 	133.8	 	 	(155.5	)	
Proceeds from the exercise of stock options	 	 	18.2	 	 	-	 	 	-	 	 	-	 	 	18.2	 	
Repurchase of common shares by subsidiary	 	 	-	 	 	(2.0	)	 	-	 	 	-	 	 	(2.0	)	
Other, net	 	 	-	 	 	-	 	 	18.5	 	 	-	 	 	18.5	 	
Net cash provided by (used in) continuing financing activities	 	 	13.7	 	 	(1,900.9	)	 	526.3	 	 	4,563.7	 	 	3,202.8	 	
Net cash provided by (used in) discontinued financing activities	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effect of exchange rate changes on cash and cash equivalents	 	 	-	 	 	-	 	 	-	 	 	39.3	 	 	39.3	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net increase (decrease) in cash and cash equivalents	 	 	(0.6	)	 	(1,929.8	)	 	(495.4	)	 	(1,568.0	)	 	(3,993.8	)	
Cash and cash equivalents - beginning of period	 	 	0.6	 	 	1,979.1	 	 	545.4	 	 	2,210.2	 	 	4,735.3	 	
Cash and cash equivalents - end of period	 	$	(0.0	)	$	49.3	 	$	50.0	 	$	642.2	 	$	741.5	 	

37

Condensed Consolidating Statement of Cash Flows        
For the nine months ended September 30, 2007          
 
 	 	IR	 	IR Global	 	IR	 	Other	 	IR Limited	 	
In millions	 	Limited	 	Holding	 	New Jersey	 	Subsidiaries	 	Consolidated	 	
Net cash provided by (used in) continuing operating activities	 	$	(25.0	)	$	(3.0	)	$	(432.7	)	$	926.1	 	$	465.4	 	
Net cash provided by (used in) discontinued operating activities	 	 	-	 	 	-	 	 	(7.8	)	 	(0.8	)	 	(8.6	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Capital expenditures	 	 	-	 	 	-	 	 	(17.0	)	 	(71.5	)	 	(88.5	)	
Proceeds from sale of property, plant and equipment	 	 	-	 	 	-	 	 	7.0	 	 	3.2	 	 	10.2	 	
Acquisitions, net of cash	 	 	-	 	 	-	 	 	(0.6	)	 	(26.1	)	 	(26.7	)	
Proceeds from business disposition, net of cash	 	 	-	 	 	-	 	 	630.1	 	 	661.6	 	 	1,291.7	 	
Other, net	 	 	-	 	 	-	 	 	3.5	 	 	27.9	 	 	31.4	 	
Net cash provided by (used in) continuing investing activities	 	 	-	 	 	-	 	 	623.0	 	 	595.1	 	 	1,218.1	 	
Net cash provided by (used in) discontinued investing activities	 	 	-	 	 	-	 	 	(4.9	)	 	(45.8	)	 	(50.7	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from financing activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net change in debt	 	 	405.2	 	 	-	 	 	(8.3	)	 	(1.6	)	 	395.3	 	
Net inter-company proceeds (payments)	 	 	(185.0	)	 	1,906.4	 	 	(195.8	)	 	(1,525.6	)	 	-	 	
Dividends (paid) received	 	 	(344.3	)	 	37.3	 	 	12.3	 	 	133.8	 	 	(160.9	)	
Proceeds from the exercise of stock options	 	 	147.5	 	 	-	 	 	-	 	 	-	 	 	147.5	 	
Repurchase of common shares by subsidiary	 	 	-	 	 	(1,940.6	)	 	-	 	 	-	 	 	(1,940.6	)	
Net cash provided by (used in) continuing financing activities	 	 	23.4	 	 	3.1	 	 	(191.8	)	 	(1,393.4	)	 	(1,558.7	)	
Net cash provided by (used in) discontinued financing activities	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effect of exchange rate changes on cash and cash equivalents	 	 	-	 	 	-	 	 	-	 	 	16.7	 	 	16.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net increase (decrease) in cash and cash equivalents	 	 	(1.6	)	 	0.1	 	 	(14.2	)	 	97.9	 	 	82.2	 	
Cash and cash equivalents - beginning of period	 	 	1.7	 	 	-	 	 	81.6	 	 	272.5	 	 	355.8	 	
Cash and cash equivalents - end of period	 	$	0.1	 	$	0.1	 	$	67.4	 	$	370.4	 	$	438.0	 	

38

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

INGERSOLL-RAND COMPANY LIMITED
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause a difference include, but are not limited to, those discussed under Part II, Item 1A - Risk Factors in this Quarterly Report on Form 10-Q and under Part I, Item 1A - Risk Factors in the Annual Report on Form 10-K for the fiscal year ended December 31, 2007. The following section is qualified in its entirety by the more detailed information, including our financial statements and the notes thereto, which appears elsewhere in this Quarterly Report.

Overview

Organizational
Ingersoll-Rand Company Limited (IR Limited), a Bermuda company, and its consolidated subsidiaries (we, our or the Company) is a leading innovation and solutions provider with strong brands and leading positions within our markets. We operate in four business segments: Air Conditioning Systems and Services, Climate Control Technologies, Industrial Technologies and Security Technologies. We generate revenue and cash primarily through the design, manufacture, sale and service of a diverse portfolio of industrial and commercial products that include well-recognized, premium brand names such as Club Car®, Hussmann®, Ingersoll Rand®, Schlage®, Thermo King® and Trane®.

We are dedicated to inspiring progress for our Customers, Shareholders, Employees and Communities by achieving:

 	·	Dramatic Growth, by focusing on innovative solutions for our customers	

 	·	Operational Excellence, by pursuing continuous improvement in all of our operations	

 	·	Dual Citizenship, by bringing together the talents of all Ingersoll Rand people to leverage the capabilities of our global enterprise	

To achieve these goals and to become a more diversified company with strong growth prospects, we have transformed our enterprise portfolio by divesting cyclical, low-growth and asset-intensive businesses, in addition to strategic acquisitions that enhance and broaden our value proposition to our customers. We continue to focus on increasing our recurring revenue stream, which includes revenues from parts, service, used equipment and rentals. We also intend to continuously improve the efficiencies, capabilities, products and services of our high-potential businesses.

Trends and Economic Events
We are a global corporation with worldwide operations. As a global business, our operations are affected by worldwide, regional and industry-specific economic factors, as well as political factors, wherever we operate or do business. Although our geographic and industry diversity, as well as the diversity of our product sales and services, has helped limit the impact of any one industry or the economy of any single country on our consolidated operating results, we have seen a general decrease in economic activity worldwide and weaker demand for many of our products and services, as discussed further below.

39

Given the broad range of products manufactured and geographic markets served, management uses a variety of factors to predict the outlook for the Company. We monitor key competitors and customers in order to gauge relative performance and the outlook for the future. In addition, our order rates are indicative of future revenue and thus a key measure of anticipated performance. In those industry segments where we are a capital equipment provider, revenues depend on the capital expenditure budgets and spending patterns of our customers, who may delay or accelerate purchases in reaction to changes in their businesses and in the economy.

Our revenues from continuing operations for the first nine months of 2008 increased 48.4% compared with the same period in 2007, primarily associated with the Trane acquisition. Excluding the results of Trane, our revenues from continuing operations for the first nine months of 2008 increased approximately 5.7% compared with the same period of 2007, despite an increasingly challenging economic environment.

The recent extreme volatility and disruption of financial markets in the United States, Europe and Asia have contributed to weakening worldwide economic conditions. In addition, the uncertainty related to the cost and availability of credit has further depressed the overall business climate. As a result, many of our end markets have experienced overall softening in demand. Consequently, we expect to see declining markets in North America and Western Europe, partially offset by moderate growth in the developing economies of Eastern Europe, Asia and Latin America. Despite the current economic turmoil, we have a solid foundation of global brands and leading market shares in all of our major product lines. In addition, our growing geographic and industry diversity coupled with our large installed product base provides growth opportunities within our service, parts and replacement revenue streams.

Recent Developments
Restructuring Actions
In order to deal with the current and expected future slowing end market demand as well as build a strong business foundation for the future, we have implemented productivity actions in 2008. In addition, in the fourth quarter of 2008, we expect to initiate enterprise-wide restructuring actions in order to streamline both our manufacturing footprint and our general and administrative cost base. Projected costs will approximate $110 million with a majority of these costs expected to be expensed in 2008. Together, these combined actions are expected to generate approximately $100 million of annual pretax savings in both 2009 and 2010.

Acquisitions
At the close of business on June 5, 2008 (the Acquisition Date), we completed our previously announced acquisition of 100% of the outstanding common shares of Trane Inc. (Trane). Trane, previously named American Standard Companies Inc., provides systems and services that enhance the quality and comfort of the air in homes and buildings around the world. Trane’s systems and services have leading positions in premium commercial, residential, institutional and industrial markets, a reputation for reliability, high quality and product innovation and a powerful distribution network. Trane’s 2007 annual revenues were $7.5 billion.

40

We paid a combination of (i) 0.23 of an IR Limited Class A common share and (ii) $36.50 in cash, without interest, for each outstanding share of Trane common stock. The total cost of the acquisition was approximately $9.6 billion, including change in control payments and direct costs of the transaction. We financed the cash portion of the acquisition with a combination of cash on hand, commercial paper and a 364-day senior unsecured bridge loan facility.

The components of the purchase price were as follows:
 
In billions  	 	  	 	
Cash consideration	 	$	7.3	 	
Stock consideration (Issuance of 45.4 million IR Limited Class A common shares)	 	 	2.0	 	
Estimated fair value of Trane stock options converted to 7.4 million IR Limited stock options	 	 	0.2	 	
Transaction costs	 	 	0.1	 	
Total  	 	$	9.6	 	
 
As a result of the acquisition, the results of the operations of Trane have been included in the statement of financial position at September 30, 2008 and the consolidated statements of operations and cash flows since the Acquisition Date. For further details on the acquisition of Trane, see Footnote 3, Acquisition of Trane, Inc, in the Notes to Condensed Consolidated Financial Statements.

Divestitures
On November 30, 2007, we completed the sale of our Bobcat, Utility Equipment and Attachments business units (collectively, Compact Equipment) to Doosan Infracore for cash proceeds of approximately $4.9 billion, subject to post-closing purchase price adjustments. We recorded a gain on sale of $2,629.0 million (net of tax of $959.2 million). Compact Equipment manufactures and sells compact equipment including skid-steer loaders, compact track loaders, mini-excavators and telescopic tool handlers; portable air compressors, generators, light towers; general-purpose light construction equipment; and attachments.

On April 30, 2007, we completed the sale of our Road Development business unit to AB Volvo (publ) in all countries except for India, which closed on May 4, 2007, for cash proceeds of approximately $1.3 billion, subject to post-closing purchase price adjustments. We recorded a gain on sale of $633.1 million (net of tax of $163.3 million). The Road Development business unit manufactures and sells asphalt paving equipment, compaction equipment, milling machines and construction-related material handling equipment.

41

Results of Operations – Three Months Ended September 30, 2008 and 2007

 	 	For the three months ended September 30, 	 	
In millions, except per share amounts	 	2008 	 	% of
revenues 	 	2007 	 	% of
revenues 	 	
Net revenues	 	$	4,313.2	 	 	 	 	$	2,239.0	 	 	 	 	
Cost of goods sold	 	 	(3,209.4	)	 	74.4	%	 	(1,608.2	)	 	71.8	%	
Selling and administrative expenses	 	 	(756.4	)	 	17.5	%	 	(354.5	)	 	15.9	%	
Operating income	 	 	347.4	 	 	8.1	%	 	276.3	 	 	12.3	%	
Interest expense	 	 	(83.7	)	 	 	 	 	(33.3	)	 	 	 	
Other, net	 	 	(3.7	)	 	  	 	 	(7.6	)	 	  	 	
Earnings before income taxes	 	 	260.0	 	 	 	 	 	235.4	 	 	 	 	
Provision for income taxes	 	 	(26.3	)	 	 	 	 	(37.8	)	 	 	 	
Earnings from continuing operations	 	 	233.7	 	 	 	 	 	197.6	 	 	 	 	
Discontinued operations, net of tax	 	 	(6.0	)	 	 	 	 	69.0	 	 	 	 	
Net earnings	 	$	227.7	 	 	   	 	$	266.6	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted earnings per common share:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	$	0.72	 	 	 	 	$	0.68	 	 	 	 	
Discontinued operations	 	 	(0.02	)	 	 	 	 	0.24	 	 	 	 	
Net earnings	 	$	0.70	 	 	 	 	$	0.92	 	 	 	 	

Net Revenues
Net revenues for the third quarter of 2008 increased by 92.6%, or $2,074.2 million, compared with 2007, which primarily resulted from the following:
 
Volume/product mix	 	 	-4.9	%	
Pricing	 	 	2.7	%	
Currency exchange rates	 	 	2.5	%	
Acquisitions	 	 	92.4	%	
Other	 	 	-0.1	%	
Total	 	 	92.6	%	

The acquisition of Trane increased revenues $2,051.1 million. Excluding the results of Trane, revenues increased by 1.0%, or $23.1 million. Softening overall demand in many major end markets was the primary driver of the quarter’s results. Excluding currency exchange rates, organic revenues declined. However, we continue to make progress in increasing recurring revenues, which improved by 9% over the third quarter of 2007 and accounted for 20% of net revenues.

Cost of Goods Sold
Cost of goods sold as a percentage of revenue increased in the third quarter of 2008 to 74.4% compared with 71.8% for the same period of 2007. Excluding the results of Trane, cost of goods sold as a percentage of revenue would have been 72.3%. Higher material costs and unfavorable business and product mix more than offset price increases. In addition, decreased leverage due to lower volumes contributed to the year-over-year increase.

42

 
Selling and Administrative Expenses
Selling and administrative expenses as a percentage of revenue increased to 17.5% in the third quarter of 2008 compared with 15.9% for the same period of 2007. Excluding the results of Trane, selling and administrative expenses as a percentage of revenue would have been 16.3%. Decreased leverage due to lower volumes more than offset expense reduction and price increases. In addition, Trane integration costs added to the year-over-year increase.
 
Operating Income
Operating income for the third quarter of 2008 increased by 25.7% or $71.1 million, compared with the same period of 2007, primarily related to the acquisition of Trane. Excluding the results of Trane, operating income decreased by $18.4 million (6.7%), and operating margins decreased to 11.4% from 12.3%. This decrease was mainly due to lower volumes, increased material costs and unfavorable business and product mix. These decreases were partially offset by productivity actions and improved pricing.

Interest Expense
Interest expense for the third quarter of 2008 increased $50.4 million compared with the same period of 2007, primarily related to higher average debt balances used to fund the acquisition of Trane.

Other, Net
The components of “Other, net” for the three months ended September 30 are as follows:

 	 	Three months ended	 	
 	 	September 30,	 	
In millions	 	2008 	 	2007 	 	
Interest income	 	$	9.9	 	$	5.0	 	
Exchange gain (loss)	 	 	(11.0	)	 	(8.1	)	
Minority interests	 	 	(5.5	)	 	(4.5	)	
Earnings from equity investments	 	 	1.4	 	 	-	 	
Other	 	 	1.5	 	 	-	 	
Other, net	 	$	(3.7	)	$	(7.6	)	

Provision for Income Taxes
Our third quarter 2008 effective tax rate was 10.1%, compared with 16.1% in the third quarter of 2007.  The rate for the third quarter of 2008 reflects an expected annual rate of 20.6% before discrete benefits of $12.7 million.  The increase in 2008 expected annual tax rate versus last year’s expected annual rate as of September 30, 2007 is primarily attributable to an increase in income earned in higher tax rate jurisdictions as a result of changes in our inter-company debt structure.

43

Results of Operations – Nine Months Ended September 30, 2008 and 2007

 	 	For the nine months ended September 30, 	 	
In millions, except per share amounts	 	2008 	 	% of
revenues 	 	2007 	 	% of
revenues	 	
Net revenues	 	$	9,557.3	 	 	 	 	$	6,439.8	 	 	 	 	
Cost of goods sold	 	 	(6,946.4	)	 	72.7	%	 	(4,613.8	)	 	71.6	%	
Selling and administrative expenses	 	 	(1,654.9	)	 	17.3	%	 	(1,067.0	)	 	16.6	%	
Operating income	 	 	956.0	 	 	10.0	%	 	759.0	 	 	11.8	%	
Interest expense	 	 	(156.4	)	 	 	 	 	(99.8	)	 	 	 	
Other, net	 	 	61.4	 	 	  	 	 	0.9	 	 	     	 	
Earnings before income taxes	 	 	861.0	 	 	 	 	 	660.1	 	 	 	 	
Provision for income taxes	 	 	(153.2	)	 	  	 	 	(97.9	)	 	  	 	
Earnings from continuing operations	 	 	707.8	 	 	 	 	 	562.2	 	 	 	 	
Discontinued operations, net of tax	 	 	(42.4	)	 	  	 	 	886.0	 	 	  	 	
Net earnings	 	$	665.4	 	 	  	 	$	1,448.2	 	 	  	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted earnings per common share:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	$	2.38	 	 	 	 	$	1.87	 	 	 	 	
Discontinued operations	 	 	(0.14	)	 	  	 	 	2.95	 	 	  	 	
Net earnings	 	$	2.24	 	 	  	 	$	4.82	 	 	  	 	

Net Revenues
Net revenues for the first nine months of 2008 increased by 48.4%, or $3,117.5 million, compared with 2007, which primarily resulted from the following:
 
Volume/product mix	 	 	-1.3	%	
Pricing	 	 	2.6	%	
Currency exchange rates	 	 	3.6	%	
Acquisitions	 	 	43.5	%	
Other	 	 	0.0	%	
Total	 	 	48.4	%	

The acquisition of Trane increased revenues by $2,749.0 million. Excluding the results of Trane, revenues increased by 5.7%, or $368.5 million. Softening overall demand in many major end markets was the primary driver of the modest year-over-year growth. Excluding currency exchange rates, organic revenues increased modestly. However, we continue to make progress in increasing recurring revenues, which improved by 10% over the first nine months of 2007 and accounted for 19% of net revenues.

Cost of Goods Sold
Cost of goods sold as a percentage of revenue increased to 72.7% in the first nine months of 2008 compared with 71.6% the same period of 2007. Excluding the results of Trane, cost of goods sold as a percentage of revenue would have been 71.6%. Higher material costs and unfavorable business and product mix more than offset price increases. In addition, decreased leverage due to lower volumes contributed to the year-over-year increase.

44

Selling and Administrative Expenses
Selling and administrative expenses as a percentage of revenue increased to 17.3% in the first nine months of 2008 compared with 16.6% for the same period of 2007. Excluding the results of Trane, selling and administrative expense as a percentage of revenue would have been 16.6%. Decreased leverage due to lower volumes more than offset expense reduction and price increases. In addition, Trane integration costs added to the year-over-year increase.

Operating Income
Operating income for the first nine months of 2008 increased by 26.0% or $197.0 million, compared with the same period of 2007, primarily related to the acquisition of Trane. Excluding the results of Trane, operating income increased by $41.4 million (5.5%) and operating margins remained flat at 11.8%. Lower volumes, higher commodity costs and an unfavorable business and product mix were offset by expense reduction, productivity actions and improved pricing. Trane integration costs also contributed to flat year-over-year growth.

Interest Expense
Interest expense for the first nine months of 2008 increased $56.6 million compared with the same period of 2007, primarily related to higher average debt balances used to fund the acquisition of Trane.

Other, Net
The components of “Other, net” for the nine months ended September 30 are as follows:

 	 	Nine months ended 	 	
 	 	September 30,	 	
In millions	 	2008 	 	2007 	 	
Interest income	 	$	86.9	 	$	14.9	 	
Exchange gain (loss)	 	 	(15.5	)	 	0.6	 	
Minority interests	 	 	(15.9	)	 	(11.6	)	
Earnings from equity investments	 	 	2.6	 	 	0.1	 	
Other	 	 	3.3	 	 	(3.1	)	
Other, net	 	$	61.4	 	$	0.9	 	

Provision for Income Taxes
Our effective tax rate for the first nine months of 2008 was 17.8%, compared with 14.8% in the first nine months of 2007.  The rate for the nine months ended September 30, 2008 reflects an expected annual rate of 20.6% before discrete benefits of $24.9 million.  The increase in 2008 expected annual tax rate versus last year’s expected annual rate as of September 30, 2007 is primarily attributable to an increase in income earned in higher tax rate jurisdictions as a result of changes in our inter-company debt structure.

45

Review of Business Segments
We classify our businesses into four reportable segments based on industry and market focus: Air Conditioning Systems and Services, Climate Control Technologies, Industrial Technologies and Security Technologies. The segment discussions that follow describe the significant factors contributing to the changes in results for each segment included in continuing operations.

Air Conditioning Systems and Services
Air Conditioning Systems and Services provide systems and services that enhance the quality and comfort of the air in homes and buildings around the world. They offer customers a broad range of energy-efficient heating, ventilation and air conditioning systems; dehumidifying and air cleaning products; service and parts support; advanced building controls; and financing solutions. Their systems and services have leading positions in commercial, residential, institutional and industrial markets; a reputation for reliability, high quality and product innovation; and a powerful distribution network. This segment includes the American Standard and Trane brands.

 	 	Three 	 	Nine 	 	
 	 	months ended 	 	months ended 	 	
In millions       	 	September 30 	 	September 30 	 	
Net revenues	 	$	2,051.1	 	$	2,749.0	 	
Operating income	 	 	89.5	 	 	155.6	 	
Operating margin	 	 	4.4	%	 	5.7	%	
The nine months ended September 30, 2008 include results since the Acquisition Date (June 5, 2008).  

Operating income for the three months ended September 30, 2008 includes $149.9 million of costs related to purchase accounting. We expect $41.5 million of these costs to be an incremental expense in future periods as they primarily relate to the amortization of certain intangible assets that were fair valued at the Acquisition Date. In addition, we recorded $13.3 million of severance and other business integration costs associated with the acquisition. Operating income was $89.5 million for the three months ended September 30, 2008. Excluding non-recurring items, operating income would have been $197.9 million, increasing the operating margin to 9.6%.

Reported results for revenues and operating income for the three months and 25 days ended September 30, 2008 reflect year-to-date activity since the Acquisition Date (June 6, 2008 through September 30, 2008). Included in operating income is $194.9 million of costs related to purchase accounting. The Company expects $51.1 million of these costs to be an incremental expense in future periods as they primarily relate to the amortization of certain intangible assets that were fair valued as of the Acquisition Date. In addition, the Company recorded $23.6 million of severance and other business integration costs associated with the acquisition. Operating income was $155.6 million for the three months and 25 days ended September 30, 2008. Excluding non-recurring items, operating income would have been $299.4 million, increasing the operating margin to 10.9%.

Commercial results were balanced due to growth in both domestic and international markets. Parts, services and solutions improvements were primary drivers, in addition to Commercial Equipment. Residential results were impacted by continued weakness in the U.S. housing market.

46

Climate Control Technologies
Climate Control Technologies provides solutions for customers to transport, preserve, store and display temperature-sensitive products by engaging in the design, manufacture, sale and service of transport temperature control units, refrigerated display merchandisers, beverage coolers, auxiliary power units and walk-in storage coolers and freezers. This segment includes the Thermo King, Hussmann and Koxka brands.

 	 	Three months ended 	 	Nine months ended 	 	
 	 	September 30, 	 	September 30, 	 	
In millions	 	2008 	 	2007 	 	% change 	 	2008 	 	2007 	 	% change 	 	
Net revenues	 	$	895.0	 	$	882.1	 	 	1.5	%	$	2,605.3	 	$	2,457.0	 	 	6.0	%	
Operating income	 	 	103.0	 	 	100.1	 	 	2.9	%	 	297.9	 	 	269.2	 	 	10.7	%	
Operating margin	 	 	11.5	%	 	11.3	%	 	  	 	 	11.4	%	 	11.0	%	 	  	 	

Net revenues for the third quarter of 2008 increased by 1.5% or $12.9 million, compared with the same period of 2007, primarily resulting from a favorable currency impact (4%) and improved pricing (1%). These gains were partially offset by lower volumes (3%). Operating income increased slightly during the third quarter of 2008, primarily due to improved pricing ($11 million), increased productivity ($9 million) and a favorable currency impact. These improvements were offset by higher material costs ($17 million) and lower volumes.

Net revenues for the first nine months of 2008 increased by 6.0% or $148.3 million, compared with the same period of 2007, primarily resulting from a favorable currency impact (5%) and improved pricing (1%). Operating income increased during the first nine months of 2008, primarily due to increased productivity ($42 million), improved pricing ($32 million) and a favorable currency impact ($11 million). These improvements were partially offset by higher material costs ($33 million), lower volumes ($14 million) and investments in new product development and productivity improvements ($9 million).

Net revenues for the segment increased slightly during the third quarter of 2008. Display cases and contracting revenue increased worldwide as a result of an improved market for display cases and growing parts and service revenues. In addition, sales of the TriPac® auxiliary unit increased sharply during the quarter due to the continued high cost of diesel fuel. The decline in the heavy truck market decreased refrigerated trailer and truck revenues in North America and Asia Pacific. Sea-going container revenues also decreased while bus and aftermarket revenues remained comparable to the prior year.

Industrial Technologies
Industrial Technologies is focused on providing solutions to enhance customers’ industrial and energy efficiency, mainly by engaging in the design, manufacture, sale and service of compressed air systems, tools, fluid and material handling, golf and utility vehicles and energy generation systems. This segment includes the Ingersoll Rand and Club Car brands.

47

 	 	Three months ended 	 	Nine months ended 	 	
 	 	September 30, 	 	September 30, 	 	
In millions	 	2008 	 	2007 	 	% change 	 	2008 	 	2007 	 	% change 	 	
Net revenues	 	$	718.3	 	$	701.5	 	 	2.4	%	$	2,267.8	 	$	2,119.1	 	 	7.0	%	
Operating income	 	 	81.4	 	 	93.4	 	 	-12.8	%	 	283.4	 	 	294.4	 	 	-3.7	%	
Operating margin	 	 	11.3	%	 	13.3	%	 	  	 	 	12.5	%	 	13.9	%	 	   	 	

Net revenues for the third quarter of 2008 increased by 2.4%, or $16.8 million, compared with the same period of 2007, mainly resulting from a favorable currency impact (2%), improved pricing (2%) and acquisitions (2%) partially offset by lower volumes (4%). Operating income decreased during the third quarter of 2008 primarily due to higher material costs ($19 million) and lower volumes ($16 million). These costs were partially offset by improved pricing ($16 million) and increased productivity ($15 million).
 
Net revenues for the first nine months of 2008 increased by 7.0%, or $148.7 million, compared with the same period of 2007, mainly resulting from a favorable currency impact (3%), improved pricing (2%) and acquisitions (2%). Operating income decreased during the first nine months of 2008 primarily due to higher material costs ($50 million) and lower volumes ($15 million). These improvements were partially offset by improved pricing ($47 million) and increased productivity.

The increase in segment revenue was driven by the worldwide increase in the Air and Productivity Solutions business. Stable industrial and process markets in Europe, Asia and India in addition to aftermarket growth helped to mitigate a weakening North American market where higher recurring revenues were offset by lower equipment volumes. Club Car revenues declined compared with the third quarter of 2007 mainly due to the ongoing decline in the North American golf market and a softening utility vehicle market. The decline was partially offset by overall market share gains.

Security Technologies
Security Technologies is engaged in the design, manufacture, sale and service of mechanical and electronic security products, biometric access control systems and security and scheduling software. This segment includes the Schlage, LCN, Von Duprin and CISA brands.

 	 	Three months ended 	 	Nine months ended 	 	
 	 	September 30, 	 	September 30, 	 	
In millions	 	2008 	 	2007 	 	% change 	 	2008 	 	2007 	 	% change 	 	
Net revenues	 	$	648.8	 	$	655.4	 	 	-1.0	%	$	1,935.2	 	$	1,863.7	 	 	3.8	%	
Operating income	 	 	126.0	 	 	112.8	 	 	11.7	%	 	353.3	 	 	311.8	 	 	13.3	%	
Operating margin	 	 	19.4	%	 	17.2	%	 	 	 	 	18.3	%	 	16.7	%	 	  	 	
 
Net revenues for the third quarter of 2008 decreased by 1%, or $6.6 million, compared with the same period of 2007, mainly resulting from lower volumes (7%) partially offset by improved pricing (5%) and a favorable currency impact (1%). Operating income increased during the third quarter of 2008 primarily due to improved pricing ($34 million) and productivity gains ($9 million), partially offset by unfavorable product mix ($16 million).

48

 

Net revenues for the first nine months of 2008 increased by 3.8%, or $71.5 million, compared with the same period of 2007, mainly resulting from improved pricing (5%) and a favorable currency impact (3%) partially offset by lower volumes. Operating income increased during the first nine months of 2008, primarily due to improved pricing ($87 million) and productivity gains ($36 million), partially offset by unfavorable product mix ($47 million) and increased material costs ($12 million).

Net revenues decreased during the quarter driven by lower residential volume in North America. Lower same store sales at large customers as well as ongoing weakness in the new homebuilder channel were partially offset by revenue growth in Latin America. Slight growth in the North American commercial construction market in addition to moderate growth in Europe helped revenues remain consistent with prior year amounts despite a slight decline in Asia Pacific.

Discontinued Operations
The components of discontinued operations for the three and nine months ended September 30 are as follows:

 	 	Three months ended	 	Nine months ended	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Revenues	 	$	0.1	 	$	714.0	 	$	15.3	 	$	2,410.8	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Pre-tax earnings (loss) from operations	 	 	(11.0	)	 	93.6	 	 	(34.0	)	 	295.2	 	
Pre-tax gain (loss) on sale	 	 	0.1	 	 	1.1	 	 	(5.5	)	 	805.8	 	
Tax expense	 	 	4.9	 	 	(25.7	)	 	(2.9	)	 	(215.0	)	
Discontinued operations, net of tax	 	$	(6.0	)	$	69.0	 	$	(42.4	)	$	886.0	 	

Discontinued operations by business for the three and nine months ended September 30 is as follows:

 	 	Three months ended	 	Nine months ended	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Compact Equipment, net of tax	 	$	-	 	$	84.5	 	$	(22.9	)	$	226.7	 	
Road Development, net of tax	 	 	-	 	 	1.1	 	 	(1.8	)	 	695.2	 	
Other discontinued operations, net of tax	 	 	(6.0	)	 	(16.6	)	 	(17.7	)	 	(35.9	)	
Total discontinued operations, net of tax	 	$	(6.0	)	$	69.0	 	$	(42.4	)	$	886.0	 	

Compact Equipment Divestiture
On July 29, 2007, we agreed to sell our Bobcat, Utility Equipment and Attachments business units (collectively, Compact Equipment) to Doosan Infracore for gross proceeds of approximately $4.9 billion. The sale was completed on November 30, 2007. The purchase price is subject to post-closing adjustments which could result in a favorable or unfavorable adjustment to the gain on sale when ultimately resolved.

Compact Equipment manufactures and sells compact equipment, including skid-steer loaders, compact track loaders, mini-excavators and telescopic tool handlers; portable air compressors, generators and light towers; general-purpose light construction equipment; and attachments. We have accounted for Compact Equipment as discontinued operations for all periods presented in accordance with Statement of Financial Accounting Standard No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (SFAS 144).

49

Net revenues and after-tax earnings of Compact Equipment for the three and nine months ended September 30 are as follows:

 	 	Three months ended	 	Nine months ended	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Net revenues	 	$	0.1	 	$	709.7	 	$	15.3	 	$	2,162.1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings from operations, net of tax	 	 	-	 	 	84.5	 	 	0.1	 	 	226.7	 	
Gain on sale, net of tax	 	 	-	 	 	-	 	 	(23.0	)	 	-	 	
Total discontinued operations, net of tax	 	$	-	 	$	84.5	 	$	(22.9	)	$	226.7	 	

Road Development Divestiture
On February 27, 2007, we agreed to sell our Road Development business unit to AB Volvo (publ) for cash proceeds of approximately $1.3 billion. The sale was completed on April 30, 2007 in all countries except for India, which closed on May 4, 2007. The purchase price has been finalized with the buyer and we will record final adjustments in the fourth quarter of 2008.

The Road Development business unit manufactures and sells asphalt paving equipment, compaction equipment, milling machines and construction-related material handling equipment. We have accounted for the Road Development business unit as discontinued operations for all periods presented in accordance with SFAS 144.

Net revenues and after-tax earnings of the Road Development business unit for the three and nine months ended September 30, are as follows:

 	 	Three months ended	 	Nine months ended	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Net revenues	 	$	-	 	$	4.3	 	$	-	 	$	248.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings from operations, net of tax	 	 	(0.1	)	 	0.2	 	 	(0.2	)	 	18.6	 	
Gain on sale, net of tax	 	 	0.1	 	 	0.9	 	 	(1.6	)	 	676.6	 	
Total discontinued operations, net of tax	 	$	-	 	$	1.1	 	$	(1.8	)	$	695.2	 	

Other Discontinued Operations
We also have retained costs from previously sold businesses that mainly include costs related to postretirement benefits, product liability and legal costs (mostly asbestos-related). The components of other discontinued operations for the three and nine months ended September 30 are as follows:

50

 	 	Three months ended	 	Nine months ended	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Retained costs, net of tax	 	$	(6.0	)	$	(16.7	)	$	(17.7	)	$	(36.3	)	
Net gain on disposals, net of tax	 	 	-	 	 	0.1	 	 	-	 	 	0.4	 	
Total discontinued operations, net of tax	 	$	(6.0	)	$	(16.6	)	$	(17.7	)	$	(35.9	)	

Retained costs, net of tax for the nine months ended September 30, 2008 includes $6.5 million of after-tax costs related to an adverse verdict in a product liability lawsuit associated with a previously divested business.

Liquidity and Capital Resources
We generate significant cash flow from operating activities. We believe that we will be able to meet our current and long-term liquidity and capital requirements through our cash flow from operating activities, existing cash and cash equivalents, available borrowings under existing credit facilities and our ability to obtain future external financing.

Cash Flows
The following table reflects the major categories of cash flows for the nine months ended September 30, respectively. For additional details, see the Condensed Consolidated Statement of Cash Flows in the condensed consolidated financial statements.

In millions	 	2008	 	2007	 	
Operating cash flow provided by (used in) continuing operations	 	$	1.3	 	$	465.4	 	
Investing cash flow provided by (used in) continuing operations	 	 	(7,211.1	)	 	1,218.1	 	
Financing cash flow provided by (used in) continuing operations	 	 	3,202.8	 	 	(1,558.7	)	

Operating Activities
Net cash provided by continuing operating activities during the nine months ended September 30, 2008 was $1.3 million, compared with net cash provided by operating activities of $465.4 million during the comparable period in 2007. The change in operating cash flows is predominantly related to a tax payment of approximately $700 million in the first quarter of 2008 paid to various taxing authorities primarily associated with the Compact Equipment divestiture. In addition, cash flows from operating activities includes Trane cash flows from operations since June 5, 2008.

Investing Activities
Net cash used by investing activities during the nine months ended September 30, 2008 was $7,211.1 million, compared with $1,218.1 million of net cash provided by investing activities during the comparable period of 2007. The change in investing activities is primarily attributable to cash used for the acquisition of Trane in 2008. In addition, during the nine months ended September 30, 2007, net cash proceeds of $1,291.7 million was received related to the sale of the Road Development business unit.

Financing Activities
Net cash provided by financing activities during the nine months ended September 30, 2008 was $3,202.8 million, compared with $1,558.7 million of net cash used in financing activities during the comparable period in 2007. The change in financing activities primarily relates to the outstanding balance of both the bridge loan facility and commercial paper used to finance the acquisition of Trane in addition to the net proceeds from our long-term debt issuance.

51

Other Liquidity Measures
The following table contains several key measures to gauge the Company’s financial condition and liquidity at the period ended:

  	 	September 30	 	December 31,	 	
In millions	 	2008	 	2007	 	
Cash and cash equivalents	 	$	741.5	 	$	4,735.3	 	
Total debt	 	 	5,515.7	 	 	1,453.7	 	
Total shareholders' equity	 	 	10,702.8	 	 	7,907.9	 	
Debt-to-total capital ratio	 	 	33.8	%	 	15.4	%	

The large cash and cash equivalents balance at December 31, 2007 is attributable to the sale of both Compact Equipment and the Road Development business unit during 2007, which generated proceeds of $6,154.3 million. The reduction at September 30, 2008 is a result of the acquisition of Trane.

In connection with the Trane acquisition, we entered into a $3.9 billion senior unsecured bridge loan facility, with a 364-day term, which was subsequently reduced to $3.4 billion. We drew down $2.95 billion against the bridge loan facility in June 2008. The proceeds, along with cash on hand as well as the issuance of $1.5 billion in commercial paper, were used to fund the cash component of the consideration paid for the acquisition as well as to pay related fees and expenses incurred in connection with the acquisition.

In August 2008, we filed a universal shelf registration statement with the Securities and Exchange Commission (SEC) for an indeterminate amount of securities for future issuance and issued $1.6 billion of long-term debt pursuant to the shelf registration statement. This issuance consisted of $250 million Senior Floating Rate Notes due in 2010, $600 million 6.000% Senior Notes due in 2013 and $750 million 6.875% Senior Notes due in 2018. These notes are fully and unconditionally guaranteed by IR Limited, which directly owns 100% of the subsidiary issuer. The net proceeds from the offering were used to partially reduce the amount outstanding under the senior unsecured bridge loan facility.

Interest on the fixed rate notes will be paid twice a year. We have the option to redeem them in whole or in part at any time, and from time to time, prior to their stated maturity date at redemption prices set forth in the debt offering documents. Interest on the floating rate notes will be paid four times a year. The notes are subject to certain customary covenants, however, none of these covenants are considered restrictive to our operations. As of September 30, 2008, we are in compliance with all of our debt covenants.

During the third quarter, we repaid $2.0 billion of the outstanding balance of the bridge loan facility. We used a combination of cash flows from operations and cash on hand, in addition to the $1.6 billion in proceeds received from the issuance of long-term debt. In October 2008, we reduced the facility size to $950 million.

52

During the second quarter, we entered into a $1.0 billion senior unsecured revolving credit facility with a three-year term. This three-year credit facility will be used to support working capital, the commercial paper program and for other general corporate purposes.

In addition to the three-year credit facility, we have committed revolving credit facilities consisting of two lines totaling $2.0 billion, of which $750 million expires in June 2009 and $1.25 billion expires in August 2010. These lines are unused and provide support for other financing instruments, such as letter of credit as required in the normal course of business as well as support for the commercial paper program.

At September 30, 2008, we had outstanding $547.9 million of 30-year fixed rate debentures which requires early repayment only at the option of the holder. These debentures contain a put feature that the holders may exercise on each anniversary of the issuance date. If exercised, we are obligated to repay in whole or in part, at the holder’s option, the outstanding principal amount (plus accrued and unpaid interest) of the debentures held by the holder. If these options are not exercised, the final maturity dates would range between 2027 and 2028. In October 2008, holders of these debentures chose to exercise the put feature on approximately $248 million of the debentures, which will be repaid in November 2008. In the first quarter of 2009, holders of these debentures will have the option to exercise the put feature on approximately $40 million of the remaining debentures. In the fourth quarter of 2009, holders of these debentures will have the option to exercise the put feature on approximately $260 million of the remaining debentures.

The global financial markets have been adversely affected by the current economic environment. The credit markets, including the commercial paper markets, have recently experienced adverse conditions including unprecedented volatility, reduced liquidity, increases in interest rates and inflation. These factors increase costs associated with issuing commercial paper or other debt instruments and may affect our ability to access these markets. We currently believe that our cash and cash equivalents balance, cash generated by our operations, in addition to our access to external sources of funds as described above will be sufficient to meet our operating and capital needs for the foreseeable future.

Pensions
Our investment objectives in managing defined benefit plan assets are to ensure that present and future benefit obligations to all participants and beneficiaries are met as they become due; to provide a total return that, over the long term, minimizes the present value of our required contributions, at the appropriate levels of risk; and to meet any statutory requirements, laws and local regulatory agencies’ requirements. 

As a result of current market environment, we expect negative returns in our pension plans during 2008. Consequently, this will increase pension expense in 2009 and potentially require future cash contributions to our pension plan.  However, none of our pension plans have experienced any significant impact on liquidity due to the volatility in the markets. We are monitoring the impact of the market conditions on our pension expense and funding requirements in 2009. We will disclose the impacts on 2009 in our Annual Report on Form 10-K, which we expect to file with the SEC in February 2009.

For a further discussion of Liquidity and Capital Resources, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contained in the Company’s Annual Report on Form 10-K for the period ended December 31, 2007.

53

Commitments and Contingencies
We are involved in various litigations, claims and administrative proceedings, including environmental and product liability matters. Amounts recorded for identified contingent liabilities are estimates, which are reviewed periodically and adjusted to reflect additional information when it becomes available. Subject to the uncertainties inherent in estimating future costs for contingent liabilities, management believes that the liability which may result from these legal matters would not have a material adverse effect on the financial condition, results of operations, liquidity or cash flows.

Environmental Matters
We continue to be dedicated to an environmental program to reduce the utilization and generation of hazardous materials during the manufacturing process and to remediate identified environmental concerns. As to the latter, we are currently engaged in site investigations and remediation activities to address environmental cleanup from past operations at current and former manufacturing facilities.

We are sometimes a party to environmental lawsuits and claims and have received notices of potential violations of environmental laws and regulations from the Environmental Protection Agency and similar state authorities. We have also been identified as a potentially responsible party (PRP) for cleanup costs associated with off-site waste disposal at federal Superfund and state remediation sites. For all such sites, there are other PRPs and, in most instances, our involvement is minimal.

In estimating our liability, we have assumed we will not bear the entire cost of remediation of any site to the exclusion of other PRPs who may be jointly and severally liable. The ability of other PRPs to participate has been taken into account, based generally on the parties’ financial condition and probable contributions on a per site basis. Additional lawsuits and claims involving environmental matters are likely to arise from time to time in the future.

During the three and nine month periods ended September 30, 2008, we spent $4.0 million and $10.3 million, respectively, for environmental remediation expenditures at sites presently or formerly owned or leased by us. As of September 30, 2008 and December 31, 2007, we have recorded reserves of $103.4 million and $101.8 million, respectively, for environmental matters. We believe that these expenditures will continue and may increase over time. Given the evolving nature of environmental laws, regulations and technology, the ultimate cost of future compliance is uncertain.

Asbestos Matters
Certain wholly owned subsidiaries of the Company are named as defendants in asbestos-related lawsuits in state and federal courts. In virtually all of the suits, a large number of other companies have also been named as defendants. The vast majority of those claims has been filed against either Ingersoll Rand Company (IR-New Jersey) and Trane and generally allege injury caused by exposure to asbestos contained in certain current and historical products sold by IR-New Jersey and Trane, primarily pumps, boilers and railroad brake shoes. Neither IR-New Jersey nor Trane was a producer or manufacturer of asbestos, however, some formerly manufactured products utilized asbestos-containing components such as gaskets and packings purchased from third-party suppliers.
 
Prior to the fourth quarter of 2007, the Company recorded a liability (which it periodically updated) for its actual and anticipated future asbestos settlement costs projected seven years into the future. The Company did not record a liability for future asbestos settlement costs beyond the seven-year period covered by its reserve because such costs previously were not reasonably estimable for the reasons detailed below.

54

In the fourth quarter of 2007, the Company again reviewed its history and experience with asbestos-related litigation and determined that it had now become possible to make a reasonable estimate of its total liability for pending and unasserted potential future asbestos-related claims. This determination was based upon the Company’s analysis of developments in asbestos litigation, including the substantial and continuing decline in the filing of non-malignancy claims against the Company, the establishment in many jurisdictions of inactive or deferral dockets for such claims, the decreased value of non-malignancy claims because of changes in the legal and judicial treatment of such claims, increasing focus of the asbestos litigation upon malignancy claims, primarily those involving mesothelioma, a cancer with a known historical and predictable future annual incidence rate, and the Company’s substantial accumulated experience with respect to the resolution of malignancy claims, particularly mesothelioma claims, filed against it.

Accordingly, in the fourth quarter of 2007, the Company retained Dr. Thomas Vasquez of Analysis, Research & Planning Corporation (collectively, “ARPC”) to assist it in calculating an estimate of the Company’s total liability for pending and unasserted future asbestos-related claims. ARPC is a respected expert in performing complex calculations such as this. ARPC has been involved in many asbestos-related valuations of current and future liabilities, and its valuation methodologies have been accepted by numerous courts.
 
The methodology used by ARPC to project the Company’s total liability for pending and unasserted potential future asbestos-related claims relied upon and included the following factors, among others:

 	·	ARPC’s interpretation of a widely accepted forecast of the population likely to have been occupationally exposed to asbestos;	

 	·	epidemiological studies estimating the number of people likely to develop asbestos-related diseases such as mesothelioma and lung cancer;	

 	·	the Company’s historical experience with the filing of non-malignancy claims against it and the historical ratio between the numbers of non-malignancy and lung cancer claims filed against the Company;	

 	·	ARPC’s analysis of the number of people likely to file an asbestos-related personal injury claim against the Company based on such epidemiological and historical data and the Company’s most recent three-year claims history;	

 	·	an analysis of the Company’s pending cases, by type of disease claimed;	

 	·	an analysis of the Company’s most recent three-year history to determine the average settlement and resolution value of claims, by type of disease claimed;	

 	·	an adjustment for inflation in the future average settlement value of claims, at a 2.5% annual inflation rate, adjusted downward to 1.5% to take account of the declining value of claims resulting from the aging of the claimant population;	

 	·	an analysis of the period over which the Company has and is likely to resolve asbestos-related claims against it in the future.	

55

Based on these factors, ARPC calculated a total estimated liability of $755 million for the Company to resolve all pending and unasserted potential future claims through 2053, which is ARPC’s reasonable best estimate of the time it will take to resolve asbestos-related claims. This amount is on a pre-tax basis, not discounted for the time-value of money, and excludes the Company’s defense fees (which will continue to be expensed by the Company as they are incurred). After considering ARPC’s analysis and the factors listed above, in the fourth quarter of 2007, the Company increased its recorded liability for asbestos claims by $538 million, from $217 million to $755 million.

In addition, during the fourth quarter of 2007, the Company recorded an $89 million increase in its assets for probable asbestos-related insurance recoveries to $250 million. This represents amounts due to the Company for previously paid and settled claims and the probable reimbursements relating to its estimated liability for pending and future claims. In calculating this amount, the Company used the estimated asbestos liability for pending and projected future claims calculated by ARPC. It also considered the amount of insurance available, gaps in coverage, allocation methodologies, solvency ratings and creditworthiness of the insurers, the amounts already recovered from and the potential for settlements with insurers, and the terms of existing settlement agreements with insurers.
 
During the fourth quarter of 2007, the Company recorded a non-cash charge to earnings of discontinued operations of $449 million ($277 million after tax), which is the difference between the amount by which the Company increased its total estimated liability for pending and projected future asbestos-related claims and the amount that the Company expects to recover from insurers with respect to that increased liability.
 
In connection with our acquisition of Trane, the Company requested ARPC to assist in calculating Trane’s asbestos-related valuations of current and future liabilities. As required by SFAS No. 141, “Business Combinations,” the Company is required to record the assumed asbestos obligations and associated insurance-related assets at their fair value at the Acquisition Date. The Company preliminarily estimates that the assumed asbestos obligation and associated insurance-related assets at the Acquisition Date to be $494 million and $249 million, respectively. These amounts were estimated based on certain assumptions and factors consistent with those described above.

Trane continues to be in litigation against certain carriers whose policies it believes provide coverage for asbestos claims. The insurance carriers named in this suit have challenged Trane’s right to recovery. Trane filed the action in April 1999 in the Superior Court of New Jersey, Middlesex County, against various primary and lower layer excess insurance carriers, seeking coverage for environmental claims (the “NJ Litigation”). The NJ Litigation was later expanded to also seek coverage for asbestos-related liabilities from twenty-one primary and lower layer excess carriers and underwriting syndicates. The environmental claims against most of the insurers in the NJ Litigation have been settled.  On September 19, 2005, the court granted Trane’s motion to add claims for insurance coverage for asbestos-related liabilities against 16 additional insurers and 117 new insurance policies to the NJ Litigation. The court also required the parties to submit all contested matters to mediation. Trane engaged in its first mediation session with the NJ Litigation defendants on January 18, 2006 and has engaged in active discussions since that time. 

56

Trane has now settled with a substantial number of its insurers, collectively accounting for approximately 75% of its recorded asbestos-related liability insurance receivable as at September 30, 2008.  More specifically, effective August 26, 2008, Trane entered into a coverage-in-place agreement (“August 26 Agreement”) with the following five insurance companies or groups: 1) Hartford; 2) Travelers; 3) Allstate (solely in its capacity as successor-in-interest to Northbrook Excess & Surplus Insurance Company); 4) Dairyland Insurance Company; and 5) AIG.  The August 26 Agreement provides for the reimbursement by the insurer signatories of a portion of Trane’s costs for asbestos bodily injury claims under specified terms and conditions and in exchange for certain releases and indemnifications from Trane.  In addition, on September 12, 2008, Trane entered into a settlement agreement with Mt. McKinley Insurance Company and Everest Reinsurance Company, both members of the Everest Re group, resolving all claims in the NJ Litigation involving policies issued by those companies (“Everest Re Agreement”).  The Everest Re Agreement contains a number of elements, including policy buy-outs and partial buy-outs in exchange for a cash payment along with coverage-in-place features similar to those contained in the August 26 Agreement, in exchange for certain releases and indemnifications by Trane.  Trane remains in settlement negotiations with the insurer defendants in the NJ Litigation not encompassed within the August 26 Agreement or Everest Re Agreement.  Once concluded, we believe NJ Litigation will resolve coverage issues with respect to approximately 96% of Trane’s recorded insurance receivable in connection with asbestos-related liabilities.

The amounts recorded by the Company for asbestos-related liabilities and insurance-related assets are based on currently available information. The Company’s actual liabilities or insurance recoveries could be significantly higher or lower than those recorded if assumptions used in the Company’s or ARPC’s calculations vary significantly from actual results. Key variables in these assumptions are identified above and include the number and type of new claims to be filed each year, the average cost of resolution of each such new claim, the resolution of coverage issues with insurance carriers, and the solvency risk with respect to the Company’s insurance carriers. Furthermore, predictions with respect to these variables are subject to greater uncertainty as the projection period lengthens. Other factors that may affect the Company’s liability include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, reforms that may be made by state and federal courts, and the passage of state or federal tort reform legislation.
 
The aggregate amount of the stated limits in insurance policies available to the Company for asbestos-related claims acquired over many years and from many different carriers, is substantial. However, limitations in that coverage, primarily due to the considerations described above, are expected to result in the projected total liability to claimants substantially exceeding the probable insurance recovery.

From receipt of its first asbestos claims more than twenty five years ago to December 31, 2007, the Company has resolved (by settlement or dismissal) approximately 208,000 claims. The total amount of all settlements paid by the Company (excluding insurance recoveries) and by its insurance carriers is approximately $308 million, for an average payment per resolved claim of $1,480. The average payment per claim resolved during the year ended December 31, 2007 was $7,491. This amount reflects the Company’s emphasis on resolution of higher value malignancy claims, particularly mesothelioma claims, rather than lower value non-malignancy claims, which are more heavily represented in the Company’s historical settlements. The table below provides additional information regarding asbestos-related claims filed against the Company:

57

 	 	2005	 	2006	 	2007	 	
Open claims - January 1	 	 	105,811	 	 	102,968	 	 	101,709	 	
New claims filed	 	 	11,132	 	 	6,457	 	 	5,398	 	
Claims settled	 	 	(12,505	)	 	(6,558	)	 	(5,005	)	
Claims dismissed	 	 	(1,470	)	 	(1,158	)	 	(1,479	)	
Open claims - December 31	 	 	102,968	 	 	101,709	 	 	100,623	 	

From receipt of the first asbestos claim more than twenty years ago through December 31, 2007, Trane has resolved 61,002 (by settlement or dismissal) claims. Trane and its insurance carriers have paid settlements of approximately $109.0 million, which represents an average payment per resolved claim of $1,786. During 2007, 3,019 new claims were filed against Trane, 1,826 claims were dismissed and 740 claims were settled. At December 31, 2007, there were 105,023 open claims pending against Trane. Because claims are frequently filed and settled in large groups, the amount and timing of settlements, as well as the number of open claims, can fluctuate significantly from period to period.

The table below provides additional information regarding asbestos-related claims filed against Trane, reflecting updated information for the last three years.

 	 	2005	 	2006	 	2007	 	
Open claims - January 1	 	 	118,381	 	 	113,730	 	 	104,570	 	
New claims filed	 	 	10,972	 	 	4,440	 	 	3,019	 	
Claims settled	 	 	(954	)	 	(848	)	 	(740	)	
Claims dismissed	 	 	(14,544	)	 	(12,751	)	 	(1,826	)	
Other	 	 	(125	)	 	(1	)	 	-	 	
Open claims - December 31	 	 	113,730	 	 	104,570	 	 	105,023	 	

At September 30, 2008, over 90 percent of the open claims against the Company are non-malignancy claims, many of which have been placed on inactive or deferral dockets and the vast majority of which have little or no settlement value against the Company, particularly in light of recent changes in the legal and judicial treatment of such claims.
 
At September 30, 2008, our liability for asbestos related matters and the asset for probable asbestos-related insurance recoveries totaled $1,210.7 million and $439.3 million, respectively, compared to $754.9 million and $249.8 million at December 31, 2007.

The (costs) income associated with the settlement and defense of asbestos related claims after insurance recoveries were as follows:

 	 	Three months ended	 	Nine months ended	 	
 	 	September 30,	 	September 30,	 	
In millions	 	2008	 	2007	 	2008	 	2007	 	
Continuing operations	 	$	1.7	 	$	-	 	$	0.9	 	$	-	 	
Discontinued operations	 	 	(2.5	)	 	(7.1	)	 	(2.4	)	 	(27.1	)	
Total	 	$	(0.8	)	$	(7.1	)	$	(1.5	)	$	(27.1	)	

58

 
We record certain income and expenses associated with our asbestos liabilities and corresponding insurance recoveries within discontinued operations, as they relate to previously divested businesses, primarily Ingersoll-Dresser Pump, which was sold in 2000. Income and expenses associated with Trane’s asbestos liabilities and corresponding insurance recoveries are recorded within continuing operations.
 
Other
The following table represents the changes in the product warranty liability for the nine months ended September 30:

In millions	 	2008	 	2007	 	
Balance at beginning of period	 	$	146.9	 	$	137.1	 	
Reductions for payments	 	 	(130.2	)	 	(53.9	)	
Accruals for warranties issued during the current period	 	 	137.3	 	 	61.0	 	
Changes to accruals related to preexisting warranties	 	 	(0.7	)	 	(2.0	)	
Acquisitions	 	 	476.0	 	 	-	 	
Translation	 	 	(2.6	)	 	4.1	 	
Balance at end of period	 	$	626.7	 	$	146.3	 	

We have other contingent liabilities for $15.5 million. These liabilities primarily result from performance bonds, guarantees and stand-by letters of credit associated with the prior sale of products by divested businesses.

Critical Accounting Policies
Management’s discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The Company bases these estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Management believes there have been no significant changes during the nine months ended September 30, 2008, to the items that the Company disclosed as its critical accounting policies and estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

Recently Adopted Accounting Pronouncements
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106 and 132(R)” (SFAS 158)”. SFAS 158 requires an entity to recognize in its balance sheet the funded status of its defined benefit pension and postretirement plans. The standard also requires an entity to recognize changes in the funded status within Accumulated other comprehensive income, net of tax, to the extent such changes are not recognized in earnings as components of net periodic benefit cost. At December 31, 2006, the Company adopted the provisions of SFAS 158 for its postretirement and pension plans. The adoption of SFAS 158 resulted in a decrease of Total assets of $476.0 million and Shareholders’ equity of $472.8 million (net of tax of $268.2 million) and an increase of Total liabilities of $265.0 million.

59

SFAS 158 also requires an entity to measure its defined benefit plan assets and benefit obligations as of the date of the employer’s fiscal year-end statement of financial position. The measurement date provisions of SFAS 158 are effective for the Company for the fiscal year ending December 31, 2008. The Company has adopted the measurement provisions of SFAS 158, which did not have a material impact on the condensed consolidated financial statements.
 
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (SFAS 157). SFAS 157 establishes a framework for measuring fair value that is based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information to develop those assumptions. Additionally, the standard expands the disclosures about fair value measurements to include disclosing the fair value measurements of assets or liabilities within each level of the fair value hierarchy. SFAS 157 is effective for the Company starting on January 1, 2008. Refer to Note 17, Fair Value Measurements to the condensed consolidated financial statements for a full discussion on SFAS 157.
 
Effective February 12, 2008, the Company adopted FASB Staff Position (FSP) No. 157-2, “Effective Date of FASB Statement No. 157” (FSP SFAS 157-2). This FSP delays the effective date of SFAS 157 for nonfinancial assets and liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Due to the deferral, the Company has delayed its implementation of SFAS 157 provisions on the fair value of goodwill, indefinite-lived intangible assets and nonfinancial long-lived assets and liabilities.
 
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (SFAS 159). SFAS 159 permits companies the option, at specified election dates, to measure financial assets and liabilities at their current fair value, with the corresponding changes in fair value from period to period recognized in the income statement. Additionally, SFAS 159 establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar assets and liabilities. SFAS 159 is effective for the Company starting on January 1, 2008 and did not have a material impact to the condensed consolidated financial statements.
 
Recently Issued Accounting Pronouncements
 
In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations,” (SFAS 141 (R)). This statement addresses financial accounting and reporting for business combinations and supersedes SFAS 141, “Business Combinations.” SFAS 141(R) retains the fundamental requirements set forth in SFAS 141 regarding the purchase method of accounting, but expands the guidance in order to properly recognize and measure, at fair value, the identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquired business. In addition, the statement introduces new accounting guidance on how to recognize and measure contingent consideration, contingencies, acquisition and restructuring costs. SFAS 141(R) is effective for acquisitions occurring after January 1, 2009.

60

 
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No 51.” It clarifies that a noncontrolling interest in a subsidiary represents an ownership interest that should be reported as equity in the consolidated financial statements. In addition, the statement requires expanded income statement presentation and disclosures that clearly identify and distinguish between the interests of the Company and the interests of the non-controlling owners of the subsidiary. SFAS 160 is effective for the Company starting on January 1, 2009. The Company is currently evaluating the impact of adopting SFAS 160 on its financial statements.
 
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment of SFAS No. 133. This statement amends and expands the disclosure requirements of SFAS 133, “Accounting for Derivative Instruments and Hedging Activities.” It requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. SFAS 161 is effective for the Company starting on January 1, 2009. The Company is currently evaluating the impact of adopting SFAS 161 on its financial statements.
 
In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (SFAS 162) and SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-an interpretation of FASB No. 60” (SFAS 163). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). SFAS 163 clarifies practice in accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No. 60, “Accounting and Reporting by Insurance Enterprises”. The Company does not believe these pronouncements will have a material impact on its financial statements.

Safe Harbor Statement
Information provided by the Company in reports such as this quarterly report on Form 10-Q, in press releases and in statements made by employees in oral discussions, to the extent the information is not historical fact, may be deemed to be “forward-looking statements” within the meaning of the federal securities laws. These statements are based on currently available information and are based on our current expectations and projections about future events. These statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements.

These risks and uncertainties include, but are not limited to: fluctuations in commodity prices and shortages of raw materials; changes in interest rates and non-U.S. exchange rates; changes in the condition of, and the overall political landscape of, the economies in which we operate; our realization of expected financial benefits from the acquisition of Trane Inc. and our restructuring actions; changes in our credit ratings, the credit markets and macroeconomic conditions; amounts recorded for goodwill and indefinite-lived intangible assets; our ongoing compliance with the Foreign Corrupt Practices Act and other applicable anti-corruption laws; effect of legislation regarding U.S. companies which reincorporate outside of the U.S.; potential liabilities arising from an European Commission Investigation of European Union competition law; changes in the Internal Revenue Service interpretation of tax-free distributions under Section 355 of the Internal Revenue Code; unanticipated climatic changes and seasonal fluctuations; the costs and effects of legal and administrative proceedings; changes in tax laws, tax treaties or tax regulations or the interpretation or enforcement thereof; currency fluctuations; our ability to complete acquisitions on financially attractive terms and successfully integrate them with our other businesses; and the impact of new accounting standards.

61

Undue reliance should not be placed on such forward-looking statements as they speak only as of the date made. Additional information regarding these and other risks and uncertainties is contained in our periodic filings with the SEC, including, but not limited to, our Annual Report on Form 10-K for the fiscal year ended December 31, 2007.

Item 3 - Quantitative and Qualitative Disclosures about Market Risk

There has been no significant change in our exposure to market risk during the third quarter of 2008. For a discussion of the Company’s exposure to market risk, refer to Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007.

Item 4 - Controls and Procedures

The Company’s management, including its Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded as of September 30, 2008, that the disclosure controls and procedures are effective in ensuring that all material information required to be filed in this Quarterly Report on Form 10-Q has been recorded, processed, summarized and reported when required and the information is accumulated and communicated, as appropriate, to allow timely decisions regarding required disclosure.  

There has been no change in the Company’s internal control over financial reporting that occurred during the third quarter of 2008 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1 – Legal Proceedings

In the normal course of business, the Company is involved in a variety of lawsuits, claims and legal proceedings, including commercial and contract disputes, employment matters, product liability claims, environmental liabilities and intellectual property disputes.  In the opinion of the Company, pending legal matters are not expected to have a material adverse effect on the results of operations, financial condition, liquidity or cash flows.

Oil for Food Program and FCPA matters
As previously reported, on November 10, 2004, the Securities and Exchange Commission (SEC) issued an Order directing that a number of public companies, including the Company, provide information relating to their participation in transactions under the United Nations’ Oil for Food Program. Upon receipt of the Order, the Company undertook a thorough review of its participation in the Oil for Food Program, provided the SEC with information responsive to the Order and provided additional information requested by the SEC. During a March 27, 2007 meeting with the SEC, at which a representative of the Department of Justice (DOJ) was also present, the Company began discussions concerning the resolution of this matter with both the SEC and DOJ. On October 31, 2007, the Company announced it had reached settlements with the SEC and DOJ relating to this matter. Under the terms of the settlements, the Company paid a total of $6.7 million in penalties, interest and disgorgement of profits. The Company has consented to the entry of a civil injunction in the SEC action and has entered into a three-year deferred prosecution agreement with the DOJ. Under both settlements, the Company will implement improvements to its compliance program that are consistent with its longstanding policy against improper payments. In the settlement documents, the Government noted that the Company thoroughly cooperated with the investigation, that the Company had conducted its own complete investigation of the conduct at issue, promptly and thoroughly reported its findings to them, and took prompt remedial measures.

62

In a related matter, on July 10, 2007, representatives of the Italian Guardia di Finanza (Financial Police) requested documents from Ingersoll-Rand Italiana S.p.A pertaining to certain Oil for Food transactions undertaken by that subsidiary of the Company. Such transactions have previously been reported to the SEC and DOJ, and the Company will continue to cooperate fully with the Italian authorities in this matter.

Additionally, we have reported to the DOJ and SEC that we are currently investigating certain matters involving Trane, including one relating to the Oil For Food Program, and which raise potential issues under the FCPA and other applicable anti-corruption laws. We have indicated to the SEC and DOJ that we are conducting a thorough investigation of these matters and that we would report back to them with our findings. The investigation of these matters began in earnest promptly after our acquisition of Trane in June 2008 and is currently in progress. Previously, we had reported to the SEC and DOJ potential FCPA issues relating to one of our businesses in China, and we have reported back to them and shared our audit report, which indicated no FCPA violations. These matters (and other matters which may arise or of which we become aware in the future) may be deemed to violate the FCPA and other applicable anti-corruption laws. Such determinations could subject us to, among other things, further enforcement actions by the SEC or the DOJ (if, for example, the DOJ deems us to have violated the DPA), securities litigation and a general loss of investor confidence, any one of which could adversely affect our business prospects and the market value of our stock.

The European Commission Investigation
In November 2004, Trane was contacted by the European Commission as part of a multi-company investigation into possible infringement of European Union competition law relating to the distribution of bathroom fixtures and fittings in certain European countries. On March 28, 2007, Trane, along with a number of other companies, received a Statement of Objections from the European Commission. The Statement of Objections, an administrative complaint, alleges infringements of European Union competition rules by numerous bathroom fixture and fittings companies, including Trane and certain of its European subsidiaries engaged in the Bath and Kitchen business. Certain of these legal entities were transferred to WABCO as part of a legal reorganization in connection with the spinoff of Trane’s Vehicle Control Systems business that occurred on July 31, 2007. Trane and certain of its subsidiaries and, in light of that legal reorganization, certain of WABCO’s subsidiaries will be jointly and severally liable for any fines that result from the investigation. However, pursuant to an Indemnification and Cooperation Agreement among Trane and certain other parties (the “Indemnification Agreement”), American Standard Europe BVBA (renamed WABCO Europe BVBA) (“ASE”), which is a subsidiary of WABCO following the reorganization, will be responsible for, and will indemnify Trane and its subsidiaries (including certain subsidiaries formerly engaged in the Bath and Kitchen business) and their respective affiliates against, any fines related to this investigation. Trane and the charged subsidiaries responded to the European Commission on August 1, 2007 and July 31, 2007, respectively. A hearing with the European Commission regarding the response to the Statement of Objections was conducted from November 12-14, 2007, in Brussels. ASE and other former Trane subsidiaries participated in the hearing. Trane, however, did not participate in the hearing.

63

In 2006, the European Commission adopted new fining guidelines (the “2006 Guidelines”) and stated its intention to apply these guidelines in all cases in which a Statement of Objections is issued after September 2006. In applying the 2006 Guidelines, the Commission retains considerable discretion in calculating the fine although the European Union regulations provide for a cap on the maximum fine equal to ten percent of Trane’s worldwide revenue attributable to all of its products for the fiscal year prior to the year in which the fine is imposed. If the maximum fine is levied in 2008, the total liability could be approximately $1.1 billion based on Trane’s worldwide revenue in 2007, subject to a probable reduction for leniency of at least 20 percent provided ASE, as the leniency applicant, fulfilled all conditions set forth in the European Commission’s leniency notice. The Company is confident in ASE’s ability to satisfy its obligations under the Indemnification Agreement because WABCO’s capital structure includes sufficient funds available under its existing credit facilities and only a minimal amount of debt at December 31, 2007.

Item 1A – Risk Factors

There have been no material changes to our risk factors contained in our Annual Report on Form 10-K for the period ended December 31, 2007, except as discussed below. For a further discussion of our Risk Factors, refer to Part I, Item 1A - Risk Factors contained in our Annual Report on Form 10-K for the period ended December 31, 2007.

Macroeconomic conditions, negative conditions in the financial, insurance and credit markets and changes in our credit ratings subject us to a number of risks.

The world financial markets have been experiencing extreme disruption in recent months, including, among other things, extreme volatility in security prices, severely diminished liquidity and credit availability, rating downgrades of certain investments and declining valuations of others. Governments have taken unprecedented actions intended to address extreme market conditions that include severely restricted credit and declines in asset values. While these conditions have not currently impaired our ability to access credit markets, insurance and finance our operations, there can be no assurance that there will not be further deterioration in the world financial markets, continued negative conditions in the global credit markets or a loss of confidence in the major economies, any of which may make it more difficult for us to obtain financing for our operations or increase the cost of obtaining financing as well as access insurance to manage risk.

In addition, our investment-grade credit ratings currently afford us lower borrowing rates on commercial paper, revolving credit agreements and debt offerings. Increased debt levels and/or decreased earnings could result in downgrades in our credit ratings, which, in turn, could impede access to the debt markets, reduce the total amount of commercial paper we could issue, raise our commercial paper borrowing costs and/or raise our long-term debt borrowing rates, including under our revolving credit agreements.

Finally, many of our customers rely on credit financing in order to purchase our products. If the tightening of credit in financial markets adversely affects the ability of our customers to obtain financing for significant purchases, this could result in a decrease in or cancellation of orders for our products and services. Our global business is also adversely affected by decreases in the general level of economic activity and in business and consumer spending.

64

Amounts recorded for goodwill and indefinite-lived intangible assets could be adversely impacted by current market conditions.

As disclosed in the Company’s Annual Report on Form 10-K, the Company performs its annual impairment test of goodwill and indefinite-lived intangible assets in the fourth quarter of each year in accordance with FASB Statement No. 142, “Goodwill and Other Intangible Assets” (SFAS 142). Under SFAS 142, the impairment test is based on the current fair market value of the reporting units for goodwill and the current fair market value of the individual indefinite-lived intangible asset. Fair market valuation requires assumptions and estimates of many critical factors, including revenue and market growth, operating cash flows, market multiples and discount rates. As general market conditions have deteriorated, the Company could experience a decline in the fair market value of reporting units and intangible assets. This decline could adversely affect the results of the impairment testing that will be performed in the fourth quarter and could potentially lead to a future impairment charge.

We may not realize the expected financial benefits from the acquisition of Trane Inc. and from recently announced restructuring actions.

On June 5, 2008, we completed our acquisition of Trane Inc. (“Trane”). Achieving the expected benefits of this acquisition will require us to increase the revenue growth rate of Trane, retain key employees of Trane and realize certain anticipated cost savings. Additionally, we announced further restructuring actions to deal with slowing end market demand. If we are unable to integrate our businesses successfully or implement these restructuring actions effectively, then we may fail to realize the anticipated synergies and growth opportunities or achieve the cost savings and revenue growth we anticipated from these actions.

We face continuing risks relating to compliance with the Foreign Corrupt Practices Act (“FCPA”).

On November 10, 2004, the SEC issued an Order directing that a number of public companies, including us, provide information relating to their participation in certain transactions under the United Nations’ Oil for Food Program. Upon receipt of the Order, we undertook a thorough review of our participation in the Oil for Food Program and provided the SEC with information responsive to its investigation of our participation in the program. On October 31, 2007, we announced that we had reached settlements with the SEC and the DOJ relating to certain payments made by our foreign subsidiaries in 2000-2003 in connection with the Oil For Food Program. Pursuant to the settlements with the SEC and DOJ, we have, among other things, (i) consented to the entry of a civil injunction in the SEC action, (ii) entered into a three-year deferred prosecution agreement (“DPA”) with the DOJ, and (iii) agreed to implement improvements to our compliance program designed to enhance detection and prevention of violations of the FCPA and other applicable anti-corruption laws. If the DOJ determines, in its sole discretion, that we have committed a federal crime or have otherwise breached the DPA during its three-year term, we may be subject to prosecution for any federal criminal violation of which the DOJ has knowledge, including, without limitation, violations of the FCPA in connection with the Oil For Food Program. Breaches of the settlements with SEC and DOJ may also subject us to, among other things, further enforcement actions by the SEC or the DOJ, securities litigation and a general loss of investor confidence, any one of which could adversely affect our business prospects and the market value of our stock. For a further discussion of the settlements with the SEC and DOJ, see “Legal Proceedings.”

65

Furthermore, we have reported to the DOJ and SEC that we are currently investigating certain matters involving Trane, including one relating to the Oil For Food Program, and which raise potential issues under the FCPA and other applicable anti-corruption laws. We have indicated to the SEC and DOJ that we are conducting a thorough investigation of these matters and that we would report back to them with our findings. The investigation of these matters began in earnest promptly after our acquisition of Trane in June 2008 and is currently in progress. Previously, we had reported to the SEC and DOJ potential FCPA issues relating to one of our businesses in China, and we have reported back to them and shared with them our audit report, which indicated no FCPA violations. These matters (and other matters which may arise or of which we become aware in the future) may be deemed to violate the FCPA and other applicable anti-corruption laws. Such determinations could subject us to, among other things, further enforcement actions by the SEC or the DOJ (if, for example, the DOJ deems us to have violated the DPA), securities litigation and a general loss of investor confidence, any one of which could adversely affect our business prospects and the market value of our stock.

Legislation regarding U.S. companies which reincorporate outside the U.S. could adversely affect us and our subsidiaries.

The U.S. federal government and various states and municipalities have enacted or may enact legislation intended to deny government contracts to U.S. companies that reincorporate outside of the U.S.

For instance, the Homeland Security Act of 2002 and later amended, included a provision that prohibits “inverted domestic corporations” and their subsidiaries from entering into contracts with the Department of Homeland Security under the Homeland Security Act. More recently, the 2008 Consolidated Appropriations Act (“the 2008 Act”), which became effective in December 2007, prohibits any federal government agency from using funds appropriated by Congress for fiscal year 2008 to pay an inverted domestic corporation or any of its subsidiaries for work performed or products provided under certain federal contracts (“Affected Contracts”). We may be deemed to be an inverted domestic corporation. Therefore, the federal government may be prohibited from making payments to us for work done under Affected Contracts. Consequently, we and our subsidiaries, including our recently acquired Trane subsidiaries, may not be paid for work performed pursuant to Affected Contracts while remaining contractually obligated to perform under those contracts. Although the amount of monies already paid to us or to be paid to us under the Affected Contracts is not material to the Company, legislation similar to the 2008 Act may be enacted for fiscal years beyond 2008.

In addition, the State of California adopted legislation intended to limit the eligibility of certain Bermuda and other non-U.S. chartered companies to participate in certain state contracts and the State of North Carolina enacted a bill that provides a preference for North Carolina or U.S. products and services.

Generally, these types of legislation relate to direct sales to federal and state government agencies, while some of our businesses typically sell products to third-party suppliers. However, we are unable to predict with any level of certainty either the likelihood of additional legislation or the nature of regulations that may be promulgated thereunder, or the impact such enactments and increased regulatory scrutiny may have on our business. If applicable to us, legislation of the type described in this risk factor may impact our future ability to obtain and perform under certain government contracts. Violations may give rise to civil or criminal penalties.

66

We cannot provide any assurance that the impact on us of any adopted or proposed legislation in this area will not be materially adverse to our operations.

We are relying on an indemnification agreement with respect to any potential liability arising from an European Commission Investigation into possible infringement of European Union competition law by Trane and its subsidiaries. If we were unable to rely on the indemnification agreement for any reason, any potential liability arising from the European Commission Investigation could have a material adverse effect on the Company’s financial condition and results of operations.

In connection with Trane’s spinoff of the Vehicle Control Systems business into a new publicly traded company called WABCO Holdings Inc. (“WABCO”) in July 31, 2007, Trane entered into an Indemnification and Cooperation Agreement (the “Indemnification Agreement”) with, among others, American Standard Europe BVBA (renamed WABCO Europe BVBA) (“WABCO Europe”), which became a subsidiary of WABCO following the spinoff. Pursuant to the Indemnification Agreement, WABCO Europe has agreed to indemnify Trane and its subsidiaries and their respective affiliates against any fines related to the European Commission Investigation. For a further discussion of European Commission Investigation, see “Legal Proceedings.” If the European Commission were to impose in 2008 the maximum fine allowable pursuant to applicable guidelines, the total liability to the Company could be approximately $1.1 billion based on Trane’s worldwide revenue in 2007, subject to a probable reduction for leniency of at least 20 percent (provided WABCO Europe, as the leniency applicant, fulfilled all conditions set forth in the European Commission’s leniency notice). We are confident in WABCO Europe’s ability to satisfy its obligations under the Indemnification Agreement because WABCO’s capital structure includes sufficient funds available under its existing credit facilities and only a minimal amount of debt as of December 31, 2007. However, if WABCO Europe were unable to satisfy its obligations under the Indemnification Agreement or if we were unable to rely on the Indemnification Agreement for any reason, any potential liability arising from the European Commission Investigation could have a material adverse effect on our financial condition and results of operations.

If the distribution of WABCO’s shares by Trane on July 31, 2007 were to fail to qualify as tax-free for U.S. federal income tax purposes under Section 355 of the Internal Revenue Code (the “Code”), then Trane may be required to pay U.S. federal income taxes as well as Trane’s shareholders who received WABCO common stock in the transaction.
 
On July 31, 2007, Trane (then known as American Standard Companies Inc.) completed the spinoff of its vehicle control systems business into a new publicly traded company named WABCO Holdings Inc (“WABCO”). At the time, Trane received a private letter ruling from the Internal Revenue Service (“IRS”) substantially to the effect that the distribution qualified as tax-free for U.S. federal income tax purposes under Section 355 of the Code. In addition, Trane received an opinion of Skadden, Arps, Slate, Meagher & Flom LLP, tax counsel to Trane, substantially to the effect that the distribution will qualify as tax-free to Trane, WABCO and Trane shareholders under Section 355 and related provisions of the Code. The ruling and opinion were based on, among other things, certain assumptions as well as on the accuracy of certain factual representations and statements made by WABCO and Trane. In rendering its ruling, the IRS also relied on certain covenants that Trane and WABCO entered into, including the adherence to certain restrictions on WABCO’s and Trane’s future actions.

67

In connection with our acquisition of Trane in June 2008, we received an opinion of Simpson Thacher & Bartlett LLP, tax counsel to us, substantially to the effect that the distribution should continue to qualify as tax-free to Trane, WABCO and Trane shareholders under Section 355 and related provisions of the Code. Notwithstanding receipt by Trane and us of the private letter ruling as well as the opinions of counsel, there can be no assurance that the IRS will not later assert that the distribution should be treated as a taxable transaction.

If the distribution fails to qualify for tax-free treatment, then Trane would recognize a gain in an amount equal to the excess of (i) the fair market value of WABCO’s common stock distributed to the Trane shareholders over (ii) Trane’s tax basis in such common stock. Under the terms of the Tax Sharing Agreement, in the event the distribution were to fail to qualify as a tax-free reorganization and such failure was not the result of actions taken after the distribution by Trane or any of its subsidiaries or shareholders, WABCO would be responsible for all taxes imposed on Trane as a result thereof. In addition, each Trane shareholder who received WABCO common stock in the distribution generally would be treated as having received a taxable distribution in an amount equal to the fair market value of WABCO’s common stock received (including any fractional share sold on behalf of the shareholder), which would be taxable as a dividend to the extent of the shareholder’s ratable share of Trane’s current and accumulated earnings and profits at the time (as increased to reflect any current income including any gain recognized by Trane on the taxable distribution). The balance, if any, of the distribution would be treated as a nontaxable return of capital to the extent of the Trane shareholder’s tax basis in its Trane stock, with any remaining amount being taxed as capital gain.

Changes in weather patterns and seasonal fluctuations may adversely affect certain segments of the Company’s business and impact overall results of operations.

Demand for certain segments of the Company’s products and services is influenced by weather conditions. For instance, Trane’s sales have historically tended to be seasonally higher in the second and third quarters of the year because, in the U.S. and other northern hemisphere markets, summer is the peak season for sales of air conditioning systems and services. Additionally, while there is demand for Trane’s products and services throughout the year, a significant percentage of total sales are related to U.S. residential and commercial construction activity, which is generally higher in the second and third quarters of the year. Therefore, results of any quarterly period may not be indicative of expected results for a full year and unexpected cool trends or unseasonably warm trends during the summer season could negatively or positively affect certain segments of the Company’s business and impact overall results of operations.

Item 6 – Exhibits

Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), Ingersoll-Rand Company Limited (the “Company”) has filed certain agreements as exhibits to this Quarterly Report on Form 10-Q. These agreements may contain representations and warranties by the parties. These representations and warranties have been made solely for the benefit of the other party or parties to such agreements and (i) may have been qualified by disclosures made to such other party or parties, (ii) were made only as of the date of such agreements or such other date(s) as may be specified in such agreements and are subject to more recent developments, which may not be fully reflected in our public disclosure, (iii) may reflect the allocation of risk among the parties to such agreements and (iv) may apply materiality standards different from what may be viewed as material to investors. Accordingly, these representations and warranties may not describe our actual state of affairs at the date hereof and should not be relied upon.

68

(a)   Exhibits

Exhibit No.  	 	Description	 	Method of Filing	
 	 	 	 	 	
1.1	 	Underwriting Agreement, dated as of August 12, 2008, among Ingersoll-Rand Global Holding Company Limited, as Issuer, the Company, as Guarantor, and Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. and J.P. Morgan Securities, Inc., as Representatives of the several Underwriters named therein.	 	Incorporated by reference to Exhibit 1.1 to the Company’s Form 8-K (File No. 001-16831) filed with the SEC on 08/18/2008	
4.1	 	Indenture, dated as of August 12, 2008, among Ingersoll-Rand Global Holding Company Limited, the Company and Wells Fargo Bank, N.A., as Trustee (the “Indenture”).	 	Filed herewith	
4.2	 	First Supplemental Indenture, dated as of August 15, 2008, among Ingersoll-Rand Global Holding Company Limited, Ingersoll-Rand Company Limited and Wells Fargo Bank, N.A., as Trustee, to the Indenture.	 	Incorporated by reference to Exhibit 1.1 to the Company’s Form 8-K (File No. 001-16831) filed with the SEC on 08/18/2008	
4.3	 	Form of 6.0% Senior Notes due 2013	 	Included as part of Exhibit 4.2	
4.4	 	Form of Guarantee to 6.0% Senior Notes due 2013	 	Included as part of Exhibit 4.2	
4.5	 	Form of 6.875% Senior Notes due 2018	 	Included as part of Exhibit 4.2	
4.6	 	Form of Guarantee to 6.875% Senior Notes due 2018	 	Included as part of Exhibit 4.2	
4.7	 	Form of Senior Floating Rate Notes due 2010	 	Included as part of Exhibit 4.2	
4.8	 	Form of Guarantee to Senior Floating Rate Notes due 2010	 	Included as part of Exhibit 4.2	
10.1	 	Richard J. Weller Offer Letter dated September 8, 2008	 	Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K (File No. 001-16831) filed with the SEC on 09/10/2008	
10.2	 	Addendum to Steven R. Shawley Offer Letter, dated August 7, 2008	 	Incorporated by reference to Exhibit 10.9 to the Company’s Form 10-Q for the period ended June 30, 2008 (File No. 001-16831) filed with the SEC on 08/08/2008	
10.3	 	Addendum to Didier Teirlinck Offer Letter, dated July 17, 2008	 	Incorporated by reference to Exhibit 10.13 to the Company’s Form 10-Q for the period ended June 30, 2008 (File No. 001-16831) filed with the SEC on 08/08/2008	

69

23.1	 	Consent of Analysis, Research & Planning Corporation	 	Filed herewith	
31.1	 	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	 	Filed herewith	
31.2	 	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	 	Filed herewith	
32  	 	Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	 	Filed herewith	

70

INGERSOLL-RAND COMPANY LIMITED
SIGNATURES

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

 	INGERSOLL-RAND COMPANY LIMITED	
 	(Registrant)	
Date: November 7, 2008	/s/ Steven R. Shawley	
 	Steven R. Shawley, Senior Vice President	
 	and Chief Financial Officer	
 	 	
 	Principal Financial Officer	
 	 	
Date: November 7, 2008	/s/ Richard J. Weller	
 	Richard J. Weller, Vice President and	
 	Controller	
 	 	
 	Principal Accounting Officer	

71

 

 
INGERSOLL-RAND GLOBAL HOLDING COMPANY LIMITED, as ISSUER,
 
INGERSOLL-RAND COMPANY LIMITED, as GUARANTOR
 
and
 
WELLS FARGO BANK, N.A., as TRUSTEE

 
INDENTURE
 
Dated as of August 12, 2008

 
Senior Debt Securities

Table of Contents
 
 	Page	
 	 	
RECITALS OF THE COMPANY	1	
 	 	
ARTICLE ONE - DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION	1	
 	 	 	
SECTION 101.	Definitions	1	
 	 	
Act	2	
 	 	
Affiliate	2	
 	 	
Attributable Debt	2	
 	 	
Authenticating Agent	2	
 	 	
Below Investment Grade Rating Event	2	
 	 	
Board of Directors	2	
 	 	
Board Resolution	2	
 	 	
Business Day	2	
 	 	
Calculation Agent	3	
 	 	
Change of Control	3	
 	 	
Change of Control Offer	4	
 	 	
Change of Control Payment Date	4	
 	 	
Change of Control Triggering Event	4	
 	 	
Commission	4	
 	 	
Common Shares	4	
 	 	
Company	4	
 	 	
Company Request	4	
 	 	
Company Order	4	
 	 	
Continuing Director	4	
 	 	
Corporate Trust Office	4	
 	 	
Defaulted Interest	5	
 	 	
Dollar	5	
 	 	
Event of Default	5	
 	 	
Exchange Act	5	
 	 	
Fitch	5	
 	 	
Funded Indebtedness	5	

i

 	Page	
 	 	
Global Security	5	
 	 	
Guarantee	5	
 	 	
Guarantor	5	
 	 	
Holder	5	
 	 	
Indenture	5	
 	 	
Interest	5	
 	 	
Interest Payment Date	5	
 	 	
Investment Grade	5	
 	 	
Judgment Currency	6	
 	 	
Maturity	6	
 	 	
Moody’s	6	
 	 	
Mortgage	6	
 	 	
Officer’s Certificate	6	
 	 	
Opinion of Counsel	6	
 	 	
Original Issue Discount Security	6	
 	 	
Outstanding	6	
 	 	
Paying Agent	7	
 	 	
Person	7	
 	 	
Place of Payment	7	
 	 	
Predecessor Security	7	
 	 	
Principal Property	8	
 	 	
Process Agent	8	
 	 	
Rating Agency	8	
 	 	
Redemption Date	8	
 	 	
Redemption Price	8	
 	 	
Regular Record Date	8	
 	 	
Required Currency	8	
 	 	
Responsible Officer	8	
 	 	
Restricted Subsidiary	8	
 	 	
S&P	8	
 	 	
Sale and Leaseback Transaction	8	
 	 	
Securities	9	
 	 	
Security Register	9	

ii

 	Page	
 	 	
Security Registrar	9	
 	 	
shareholders equity in the Company and its consolidated Subsidiaries	9	
 	 	
Special Record Date	9	
 	 	
Stated Maturity	9	
 	 	
Subsidiary	9	
 	 	
Trigger Period	9	
 	 	
Trustee	9	
 	 	
Trust Indenture Act	9	
 	 	
U.S. Depositary	10	
 	 	
U.S. Government Obligations	10	
 	 	
Vice President	10	
 	 	
Voting Stock	10	
 	 	 	
SECTION 102.	Compliance Certificates and Opinions	10	
 	 	 	
SECTION 103.	Form of Documents Delivered to Trustee	11	
 	 	 	
SECTION 104.	Acts of Holders	11	
 	 	 	
SECTION 105.	Notices, Etc., to Trustee, Company and Guarantor	12	
 	 	 	
SECTION 106.	Notice to Holders; Waiver	12	
 	 	 	
SECTION 107.	Conflict with Trust Indenture Act	13	
 	 	 	
SECTION 108.	Effect of Headings and Table of Contents	13	
 	 	 	
SECTION 109.	Successors and Assigns	13	
 	 	 	
SECTION 110.	Separability Clause	13	
 	 	 	
SECTION 111.	Benefits of Indenture	13	
 	 	 	
SECTION 112.	Governing law	13	
 	 	 	
SECTION 113.	Legal Holidays	14	
 	 	 	
SECTION 114.	Incorporators, Shareholders, Officers and Directors of the Company and the Guarantor Exempt from Individual Liability	14	
 	 	 	
SECTION 115.	Counterparts	14	
 	 	 	
SECTION 116.	Currency Exchange	14	
 	 	 	
SECTION 117.	Judgment Currency; Consent to Jurisdiction and Service	15	
 	 	 	
SECTION 118.	Force Majeure	16	
 	 	
ARTICLE TWO - SECURITY FORMS	16	
 	 	 	
SECTION 201.	Forms Generally	16	
 	 	 	
SECTION 202.	Form of Face of Security	17	

iii

 	 	Page	
 	 	 	
SECTION 203.	Form of Reverse of Security	19	
 	 	 	
SECTION 204.	Form of Trustee’s Certificate of Authentication	29	
 	 	 	
SECTION 205.	Securities in Global Form	29	
 	 	 	
SECTION 206.	Guarantee; Form of Guarantee	29	
 	 	
ARTICLE THREE - THE SECURITIES	31	
 	 	 	
SECTION 301.	Amount Unlimited; Issuable in Series	31	
 	 	 	
SECTION 302.	Denominations	33	
 	 	 	
SECTION 303.	Execution, Authentication, Delivery and Dating	34	
 	 	 	
SECTION 304.	Temporary Securities	35	
 	 	 	
SECTION 305.	Registration, Registration of Transfer and Exchange	36	
 	 	 	
SECTION 306.	Mutilated, Destroyed, Lost and Stolen Securities	38	
 	 	 	
SECTION 307.	Payment of Interest; Interest Rights Preserved	39	
 	 	 	
SECTION 308.	Persons Deemed Owners	40	
 	 	 	
SECTION 309.	Cancellation	41	
 	 	 	
SECTION 310.	Computation of Interest	41	
 	 	 	
SECTION 311.	CUSIP Numbers	41	
 	 	
ARTICLE FOUR - SATISFACTION AND DISCHARGE	41	
 	 	 	
SECTION 401.	Satisfaction and Discharge of Indenture	41	
 	 	 	
SECTION 402.	Application of Trust Money	43	
 	 	 	
SECTION 403.	Satisfaction, Discharge and Defeasance of Securities of any Series	44	
 	 	 	
SECTION 404.	Reinstatement	45	
 	 	
ARTICLE FIVE - REMEDIES	46	
 	 	 	
SECTION 501.	Events of Default	46	
 	 	 	
SECTION 502.	Acceleration of Maturity; Rescission and Annulment	47	
 	 	 	
SECTION 503.	Collection of Indebtedness and Suits for Enforcement by Trustee	49	
 	 	 	
SECTION 504.	Trustee May File Proofs of Claim	49	
 	 	 	
SECTION 505.	Trustee May Enforce Claims Without Possession of Securities	50	
 	 	 	
SECTION 506.	Application of Money Collected	50	
 	 	 	
SECTION 507.	Limitation on Suits	51	
 	 	 	
SECTION 508.	Unconditional Right of Holders to Receive Principal, Premium and Interest	52	
 	 	 	
SECTION 509.	Restoration of Rights and Remedies	52	
 	 	 	
SECTION 510.	Rights and Remedies Cumulative	52	

iv

 	 	Page	
 	 	 	
SECTION 511.	Delay or Omission Not Waiver	52	
 	 	 	
SECTION 512.	Control by Holders	52	
 	 	 	
SECTION 513.	Waiver of Past Defaults	53	
 	 	 	
SECTION 514.	Undertaking for Costs	53	
 	 	 	
SECTION 515.	Waiver of Stay or Extension Laws	53	
 	 	
ARTICLE SIX - THE TRUSTEE	54	
 	 	 	
SECTION 601.	Certain Duties and Responsibilities	54	
 	 	 	
SECTION 602.	Notice of Defaults	55	
 	 	 	
SECTION 603.	Certain Rights of Trustee	55	
 	 	 	
SECTION 604.	Not Responsible for Recitals or Issuance of Securities	56	
 	 	 	
SECTION 605.	May Hold Securities	57	
 	 	 	
SECTION 606.	Money Held in Trust	57	
 	 	 	
SECTION 607.	Compensation and Reimbursement	57	
 	 	 	
SECTION 608.	Disqualification; Conflicting Interests	58	
 	 	 	
SECTION 609.	Corporate Trustee Required; Different Trustees for Different Series; Eligibility	58	
 	 	 	
SECTION 610.	Resignation and Removal; Appointment of Successor	59	
 	 	 	
SECTION 611.	Acceptance of Appointment by Successor	60	
 	 	 	
SECTION 612.	Merger, Conversion, Consolidation or Succession to Business	61	
 	 	 	
SECTION 613.	Preferential Collection of Claims Against the Company or the Guarantor	62	
 	 	 	
SECTION 614.	Authenticating Agents	62	
 	 	
ARTICLE SEVEN - HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY	63	
 	 	 	
SECTION 701.	Company to Furnish Trustee Names and Addresses of Holders	63	
 	 	 	
SECTION 702.	Preservation of Information; Communications to Holders	64	
 	 	 	
SECTION 703.	Reports by Trustee	65	
 	 	 	
SECTION 704.	Reports by Company	66	
 	 	
ARTICLE EIGHT - CONSOLIDATION, MERGER, CONVEYANCE, SALE OR LEASE	67	
 	 	 	
SECTION 801.	Company and Guarantor May Consolidate, Etc., on Certain Terms	67	
 	 	 	
SECTION 802.	Securities to be Secured in Certain Events	68	
 	 	 	
SECTION 803.	Successor Corporation to be Substituted	69	
 	 	 	
SECTION 804.	Opinion of Counsel to be Given to Trustee	69	

v

 	Page	
 	 	
ARTICLE NINE - SUPPLEMENTAL INDENTURES	69	
 	 	 	
SECTION 901.	Supplemental Indentures without Consent of Holders	69	
 	 	 	
SECTION 902.	Supplemental Indentures with Consent of Holders	71	
 	 	 	
SECTION 903.	Execution of Supplemental Indentures	72	
 	 	 	
SECTION 904.	Effect of Supplemental Indentures	72	
 	 	 	
SECTION 905.	Conformity with Trust Indenture Act	72	
 	 	 	
SECTION 906.	Reference in Securities to Supplemental Indentures	72	
 	 	
ARTICLE TEN - COVENANTS	73	
 	 	 	
SECTION 1001.	Payment of Principal, Premium and Interest	73	
 	 	 	
SECTION 1002.	Maintenance of Office or Agency	73	
 	 	 	
SECTION 1003.	Money for Securities Payments to Be Held in Trust	73	
 	 	 	
SECTION 1004.	Limitation on Liens	75	
 	 	 	
SECTION 1005.	Limitation on Sale and Leaseback Transactions	77	
 	 	 	
SECTION 1006.	Defeasance of Certain Obligations	78	
 	 	 	
SECTION 1007.	Statement by Officer as to Default	79	
 	 	 	
SECTION 1008.	Waiver of Certain Covenants	80	
 	 	 	
SECTION 1009.	Calculation of Original Issue Discount	80	
 	 	
ARTICLE ELEVEN - REDEMPTION OF SECURITIES	80	
 	 	 	
SECTION 1101.	Applicability of Article	80	
 	 	 	
SECTION 1102.	Election to Redeem; Notice to Trustee	80	
 	 	 	
SECTION 1103.	Selection by Trustee of Securities to Be Redeemed	80	
 	 	 	
SECTION 1104.	Notice of Redemption	81	
 	 	 	
SECTION 1105.	Deposit of Redemption Price	82	
 	 	 	
SECTION 1106.	Securities Payable on Redemption Date	82	
 	 	 	
SECTION 1107.	Securities Redeemed in Part	82	
 	 	 	
SECTION 1108.	Offer to Redeem Upon Change of Control Triggering Event	82	
 	 	
ARTICLE TWELVE - SINKING FUNDS	84	
 	 	 	
SECTION 1201.	Applicability of Article	84	
 	 	 	
SECTION 1202.	Satisfaction of Sinking Fund Payments with Securities	85	
 	 	 	
SECTION 1203.	Redemption of Securities for Sinking Fund	85	
 	 	
ARTICLE THIRTEEN - GUARANTEE	86	
 	 	 	
SECTION 1301.	Guarantee	86	
 	 	 	
SECTION 1302.	Execution and Delivery of Guarantee	87	

vi

 
 	 	Page	
 	 	 	
SECTION 1303.	Notice to Trustee	87	
 	 	 	
SECTION 1304.	This Article Not to Prevent Events of Default	88	
 	 	 	
SECTION 1305.	Amendment, Etc	88	
 	 	 	
SECTION 1306.	Limitation on Liability	88	

vii

Reconciliation and tie between Trust Indenture Act of 1939 and Indenture, dated as of _________________.
 
Trust Indenture Act Section	 	Indenture Section	
§ 310(a)(1)  
(a)(2)
(a)(3)
(a)(4)
(b)	 	 
609
609
Not Applicable
Not Applicable
608, 610	
§ 311(a)  
(b)
(b)(2)	 	 
613
613
703(a)	
§ 312(a)  
(b)
(c)	 	 
701, 702(a)
702(b)
702(c)	
§ 313(a)  
(b)(1)
(b)(2)
(c)
(d)	 	 
703(a)
Not Applicable
703(a)
703(a)
703(b)	
§ 314(a)  
(b)
(c)(1)
(c)(2)
(c)(3)
(d)
(e)	 	 
704
Not Applicable
102
102
Not Applicable
Not Applicable
102	
§ 315(a)  
(b)
(c)
(d)
(d)(1)
(d)(2)
(d)(3)
(e)	 	 
601(a)
602
601(b)
601(c)
601(c)(1)
601(c)(2)
601(c)(3)
514	
§ 316(a)(1)(A)  
(a)(1)(B)
(a)(2)
(b)	 	 
502, 512
513
Not Applicable
508	
§ 317(a)(1)  
(a)(2)
(b)	 	 
503
504
1003	
§ 318(a)  	 	107	

Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of this Indenture.

INDENTURE, dated as of August 12, 2008 among INGERSOLL-RAND GLOBAL HOLDING COMPANY LIMITED, a company duly organized and existing under the laws of Bermuda (herein called the “Company”), having a registered office at Clarendon House, 2 Church Street, Hamilton, HM11 Bermuda, INGERSOLL-RAND COMPANY LIMITED, a company duly organized and existing under the laws of Bermuda (herein called “IR Limited” or the “Guarantor”), having a registered office at Clarendon House, 2 Church Street, Hamilton, HM11 Bermuda, and WELLS FARGO BANK, N.A., a national banking association, as Trustee (herein called the “Trustee”).
 
RECITALS OF THE COMPANY
 
The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness (herein called the “Securities”), to be issued in one or more series as in this Indenture provided.
 
The Guarantor directly owns beneficially 100% of the issued share capital of the Company.
 
The Guarantor has duly authorized the execution and delivery of this Indenture to provide for the Guarantee of the Securities provided for herein.
 
All things necessary to make this Indenture a valid agreement of the Company and the Guarantor, in accordance with its terms, have been done.
 
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
 
For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows:
 
ARTICLE ONE
- DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
 
SECTION 101.	Definitions .	
 
For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:
 
(1)   the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;
 
(2)   all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

(3)   all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States of America, and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation; and
 
(4)   the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, Clause or other subdivision.
 
Certain terms, used principally in Article Six, are defined in that Article.
 
“Act” when used with respect to any Holder, has the meaning specified in Section 104.
 
“Affiliate ” of any specified person means any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person. For the purposes of this definition, “control” when used with respect to any specified person means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
 
“Attributable Debt” has the meaning specified in Section 1004(c)(1).
 
“Authenticating Agent” means any person authorized to authenticate and deliver Securities on behalf of the Trustee for the Securities of any series pursuant to Section 614.
 
“Below Investment Grade Rating Event” means the Securities of the relevant series cease to be rated Investment Grade by at least two of the three Rating Agencies on any date during the Trigger Period .
 
“Board of Directors” means either the board of directors of the Company or the Guarantor, as applicable, or an executive committee of such board of directors or any other duly authorized committee of that board of directors to which the powers of that board of directors have been lawfully delegated.
 
“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company or the Guarantor, as applicable, to have been duly adopted by the Board of Directors of the Company or the Guarantor, as the case may be, and to be in full force and effect on the date of such certification, and delivered to the Trustee for the Securities of any series.
 
“Business Day” , when used with respect to any Place of Payment, means each day which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law to close.

2

“Calculation Agent” means any person authorized by the Company to determine the floating rate interest rate of the Securities. Initially, Wells Fargo Bank, N.A. shall act as calculation agent in connection with the Securities. The Calculation Agent shall serve as the calculation agent hereunder unless and until a successor calculation agent is appointed by the Company.

“Change of Control” means the occurrence of any one of the following:
 
(i)   the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Guarantor and its subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d) and Section 14(d) of the Exchange Act) other than to the Guarantor or one of its subsidiaries;
 
(ii)   the consummation of any transaction (including without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d) and Section 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the outstanding Voting Stock of the Guarantor, or other Voting Stock into which the Voting Stock of the Guarantor is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares;
 
(iii)   the first day on which the majority of the members of the Board of Directors of the Guarantor cease to be Continuing Directors;
 
(iv)   IR Limited consolidates with, or merges with or into, any person, or any person consolidates with, or merges with or into, IR Limited, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of IR Limited or such other person is converted into or exchanged for cash, securities or other property, other than any such transaction where the shares of the Voting Stock of IR Limited outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving person immediately after giving effect to such transaction;  
 
(v)   the adoption of a plan relating to the liquidation or dissolution of IR Limited ; or
 
(vi)   the failure of IR Limited to own, directly or indirectly, at least 51% of the Voting Stock of the Company.
 
Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control under Clause (2) above if (i) the Guarantor becomes a direct or indirect wholly-owned subsidiary of a holding company and (ii) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Voting Stock of the Guarantor immediately prior to that transaction.

3

“Change of Control Offer” has the meaning specified in Section 1108(a).
 
“Change of Control Payment Date” has the meaning specified in Section 1108(b).
 
“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event. Notwithstanding the foregoing, no Change of Control Triggering Event will be deemed to have occurred in connection with any particular Change of Control unless and until such Change of Control has actually been consummated.
 
“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.
 
“Common Shares” means the common shares, par value $1 per share, of the Guarantor.
 
“Company” means the person named as the “Company” in the first paragraph of this Indenture until a successor company shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor company.
 
“Company Request” or “Company Order” means, in the case of the Company, a written request or order signed in the name of the Company, by its Chairman of the Board of Directors, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee for the Securities of any series and, in the case of the Guarantor, a written request or order signed in the name of the Guarantor by the Guarantor’s Chairman of the Board of Directors, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary and delivered to the Trustee for the Securities of any series.
 
“Continuing Director” means, as of any date of determination, any member of the Board of Directors of the Guarantor who: (1) was a member of such Board of Directors on the date of the issuance of the Securities of the applicable series; or (2) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election.
 
“Corporate Trust Office” means the principal office of the Trustee for the Securities of any series at which at any particular time its corporate trust business shall be administered, which at the date of this Indenture is Wells Fargo Bank, N.A., Corporate Trust Services, 45 Broadway, 14 th Floor, New York, New York 10006, Attention: Corporate Trust Services.

4

“Defaulted Interest” has the meaning specified in Section 307.
 
“Dollar” or “$” means a dollar or other equivalent unit in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts.
 
“Event of Default” unless otherwise specified in the supplemental indenture, Board Resolution or Officer’s Certificate establishing a series of Securities, has the meaning specified in Section 501.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Fitch” means Fitch Inc., a subsidiary of Fimalac, S.A., and its successors.
 
“Funded Indebtedness” means indebtedness created, assumed or guaranteed by a Person for money borrowed which matures by its terms, or is renewable by the borrower to a date, more than one year after the date of its original creation, assumption or guarantee.
 
“Global Security” means a Security evidencing all or part of a series of Securities, including, without limitation, any temporary or permanent Global Securities.
 
“Guarantee” means the guarantee by the Guarantor as endorsed on each Security and authenticated and delivered pursuant to this Indenture, which guarantee shall include the provisions set forth in Article Thirteen of this Indenture. “Guaranteed” shall have a meaning correlative to the foregoing.
 
“Guarantor” means the person named as the “Guarantor” in the first paragraph of this Indenture until a successor company shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Guarantor” shall mean such successor company.
 
“Holder” means a person in whose name a Security is registered in the Security Register.
 
“Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Securities established as contemplated by Section 301.
 
“Interest” , when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.
 
“Interest Payment Date” , when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security.
 
“Investment Grade” means (1) a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating category of Moody’s); (2) a rating of BBB- or better by S&P (or its equivalent under any successor rating category of S&P) ; and (3) a rating of BBB- or better by Fitch (or its equivalent under any successor rating category of Fitch ).

5

“Judgment Currency” has the meaning specified in Section 117.
 
“Maturity” , when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.
 
“Moody’s” means Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, and its successors.
 
“Mortgage” has the meaning specified in Section 1004(c)(3).
 
“Officer’s Certificate ” means, in the case of the Company, a certificate signed by the Chairman of the Board of Directors, the President or a Vice President of the Company, and in the case of the Guarantor, a certificate signed by the Chairman of the Board of Directors, the President or a Vice President of the Guarantor, and, in each case, delivered to the Trustee for the Securities of any series. Each such certificate shall include the statements provided for in Section 102 if and to the extent required by this Indenture.
 
“Opinion of Counsel ” means a written opinion of counsel, who may be an employee of or regular counsel for the Company or the Guarantor, as the case may be, or may be other counsel reasonably satisfactory to the Trustee for the Securities of any series. Each such opinion shall include the statements provided for in Section 102 if and to the extent required by this Indenture.
 
“Original Issue Discount Security” means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502.
 
“Outstanding” when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:
 
(i)   Securities theretofore cancelled by the Trustee for such Securities or delivered to such Trustee for cancellation;
 
(ii)   Securities or portions thereof, for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee for such Securities or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities, provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor reasonably satisfactory to such Trustee has been made; and

6

(iii)   Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee for such Securities proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;
 
provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (a) the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 502, and (b) Securities owned by the Company, the Guarantor or any other obligor upon the Securities or any Affiliate of the Company, of the Guarantor or of such other obligor shall be disregarded and deemed not to be Outstanding, except that in determining whether the Trustee for such Securities shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Responsible Officer of such Trustee actually knows to be so owned shall be so disregarded. Securities so owned as described in (b) above which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of such Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company, the Guarantor or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.
 
“Paying Agent” means any person authorized by the Company to pay the principal of (and premium, if any, on) or interest, if any, on any Securities on behalf of the Company.
 
“Person” means any individual, corporation, partnership, joint venture, joint-stock company, trust unincorporated organization or government or any agency or political subdivision thereof.
 
“Place of Payment” when used with respect to the Securities of any series, means the place or places where the principal of (and premium, if any, on) and interest, if any, on the Securities of that series are payable as specified in or as contemplated by Section 301.
 
“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

7

“Principal Property” means any manufacturing plant or other manufacturing facility of the Guarantor or any Restricted Subsidiary, which plant or facility is located within the United States of America, except any such plant or facility which the Board of Directors of the Guarantor by resolution declares is not of material importance to the total business conducted by the Guarantor and its Restricted Subsidiaries.
 
“Process Agent” has the meaning specified in Section 117.
 
“Rating Agency” means each of Moody’s, S&P and Fitch; provided , that if any of Moody’s, S&P and Fitch ceases to rate the Securities of a series or fails to make a rating of the Securities of a series publicly available for reasons outside of the Company’s and the Guarantor’s control, a “nationally recognized statistical rating organization,” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Company as a replacement agency for Moody’s, S&P or Fitch, or any of them, as the case may be, with respect to making a rating of the Securities of such series.
 
“Redemption Date” when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture.
 
“Redemption Price” when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture, exclusive of accrued and unpaid interest.
 
“Regular Record Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301.
 
“Required Currency” has the meaning specified in Section 117.
 
“Responsible Officer” when used with respect to the Trustee for the Securities of any series, means any officer within the corporate trust department of such Trustee or any other officer of such Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.
 
“Restricted Subsidiary” means any Subsidiary which owns a Principal Property excluding however, any corporation the greater part of the operating assets of which are located, or the principal business of which is carried on, outside the United States of America. For the avoidance of doubt, the Company is a Restricted Subsidiary.
 
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.
 
“Sale and Leaseback Transaction” has the meaning specified in Section 1005.

8

“Securities” has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.
 
“Security Register” and “Security Registrar” have the respective meanings specified in Section 305.
 
“shareholders’ equity in the Guarantor and its consolidated Subsidiaries” has the meaning specified in Section 1004(c)(2).
 
“Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee for such series pursuant to Section 307.
 
“Stated Maturity” when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.
 
“Subsidiary” means any corporation of which at least a majority of the outstanding stock having voting power under ordinary circumstances to elect a majority of the board of directors of said corporation shall at the time be owned by the Guarantor or by the Guarantor and one or more Subsidiaries or by one or more Subsidiaries of the Guarantor.
 
“Trigger Period” means the period commencing 60 days prior to the first public announcement by the Guarantor of any Change of Control (or pending Change of Control) and ending 60 days following the consummation of such Change of Control (which Trigger Period will be extended if the rating of the Securities of that series is under publicly announced consideration for possible downgrade by any Rating Agency on such 60th day, such extension to last with respect to each Rating Agency until the date on which such Rating Agency considering such possible downgrade either (x) rates the Securities of that series below Investment Grade or (y) publicly announces that it is no longer considering the Securities of that series for possible downgrade; provided , that no such extension will occur if on such 60th day the Securities of that series are rated Investment Grade not subject to review for possible downgrade by any Rating Agency).
 
“Trustee” means the person named as the “Trustee” in the first paragraph of this Indenture until a successor trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each person who is then a Trustee hereunder, and if at any time there is more than one such person, “Trustee” as used with respect to the Securities of any series shall mean each such Trustee with respect to those series of Securities with respect to which it is serving as Trustee.
 
“Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of which this Indenture was executed, except as provided in Section 905.

9

“U.S. Depositary” means a clearing agency registered under the Exchange Act, or any successor thereto, which shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “U.S. Depositary” shall mean or include each Person who is then a U.S. Depositary hereunder, and if at any time there is more than one such Person, “U.S. Depositary” as used with respect to the Securities of any series shall mean the U.S. Depositary with respect to the Securities of that series.
 
“U.S. Government Obligations” means direct obligations of the United States for the payment of which its full faith and credit is pledged, or obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United States and the payment of which is unconditionally guaranteed by the United States.
 
“Vice President” , when used with respect to the Company, the Guarantor or the Trustee for any series of Securities, means any vice president, whether or not designated   by a number or a word or words added before or after the title “vice president”.
 
“Voting Stock” of any specified person as of any date means the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person.
 
SECTION 102.	Compliance Certificates and Opinions .	
 
Upon any application or request by the Company or the Guarantor to the Trustee for any series of Securities to take any action under any provision of this Indenture, the Company or the Guarantor, as the case may be, shall furnish to such Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.
 
Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:
 
(1)   a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;
 
(2)   a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
 
(3)   a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and
 
(4)   a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

10

SECTION 103.	Form of Documents Delivered to Trustee .	
 
In any case where several matters are required to be certified by, or covered by an opinion of, any specified person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such person, or that they may be so certified or covered by only one document, but one such person may certify or give an opinion with respect to some matters and one or more other such persons as to other matters, and any such person may certify or give an opinion as to such matters in one or several documents.
 
Any certificate or opinion of an officer of the Company or the Guarantor may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his or her certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company or the Guarantor, as the case may be, stating that the information with respect to such factual matters is in the possession of the Company or the Guarantor, as the case may be, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.
 
Where any person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instructions under this Indenture, they may, but need not, be consolidated and form one instrument.
 
SECTION 104.	Acts of Holders .	
 
(a)   Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing, and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee for the appropriate series of Securities and, where it is hereby expressly required, to the Company or the Guarantor. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of such Trustee, the Guarantor and the Company, if made in the manner provided in this Section.
 
(b)   The fact and date of the execution by any person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him or her the execution thereof. Where such execution is by a signer acting in a capacity other than his or her individual capacity, such certificate or affidavit shall also constitute sufficient proof of his or her authority. The fact and date of the execution of any such instrument or writing, or the authority of the person executing the same, may also be proved in any other manner which the Trustee for such Securities deems sufficient.

11

(c)   The ownership of Securities shall be proved by the Security Register.
 
(d)   Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee for such Securities, the Guarantor or the Company in reliance thereon, whether or not notation of such action is made upon such Security.
 
SECTION 105.	Notices, Etc., to Trustee, Company and Guarantor .	
 
Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with:
 
(1)   the Trustee for a series of Securities by any Holder or by the Company or the Guarantor shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (including telecopy) to or with such Trustee at its Corporate Trust Office,
 
(2)   the Company by such Trustee, or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing (including telecopy) and sent by registered or certified mail, prepaid, to the Company addressed to it care of the Guarantor at the address of the Guarantor specified in the first paragraph of this Indenture or at any other address previously furnished in writing to such Trustee by the Company, or
 
(3)   the Guarantor by such Trustee, or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing (including telecopy) and sent by registered or certified mail, prepaid, to the Guarantor addressed to it at the address of its office specified in the first paragraph of this Indenture or at any other address previously furnished in writing to such Trustee by the Guarantor.
 
SECTION 106.	Notice to Holders; Waiver .	
 
Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his or her address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waiver of notice by Holders shall be filed with the Trustee for such Securities, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

12

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee for such Securities shall constitute a sufficient notification for every purpose hereunder.
 
SECTION 107.	Conflict with Trust Indenture Act .	
 
If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.
 
SECTION 108.	Effect of Headings and Table of Contents .	
 
The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.
 
SECTION 109.	Successors and Assigns .	
 
All covenants and agreements in this Indenture by each of the Company and the Guarantor shall bind its successors and assigns, whether so expressed or not.
 
SECTION 110.	Separability Clause .	
 
In case any provision in this Indenture or in the Securities or the Guarantee shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
 
SECTION 111.	Benefits of Indenture .	
 
Nothing in this Indenture or in the Securities or the Guarantee, express or implied, shall give to any person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.
 
SECTION 112.	Governing Law .	
 
THIS INDENTURE, THE SECURITIES AND THE GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

13

SECTION 113.	Legal Holidays .	
 
In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities or the Guarantee) payment of principal (and premium, if any) or interest, if any, need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, provided that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be.
 
SECTION 114.	Incorporators, Shareholders, Officers and Directors of the Company and the Guarantor Exempt from Individual Liability .	
 
No recourse for the payment of the principal of (and premium, if any, on) or interest, if any, on any Security or any Guarantee, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company or the Guarantor in this Indenture or in any supplemental indenture, or in any Security or in any Guarantee, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, shareholder, officer or director, as such, past, present or future, of the Company or the Guarantor or of any successor corporation, either directly or through the Company or the Guarantor or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby waived and released as a condition of and as a consideration for, the execution of this Indenture and the issue of the Securities and any Guarantee.
 
SECTION 115.	Counterparts .	
 
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
 
SECTION 116.	Currency Exchange .	
 
If, in determining whether the Holders of the requisite principal amount of Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, it becomes necessary to determine the principal amount of Securities of any series denominated in any coin or currency other than that of the United States of America, such principal amount shall be computed by converting such coin or currency into coin or currency of the United States of America based upon the rate of exchange in effect at the office of the Trustee for such Securities in New York, New York at 10:00 A.M., New York City time, or as close to such time as is reasonably practicable, on the date of initial issuance of such series of Securities.

14

SECTION 117.	Judgment Currency; Consent to Jurisdiction and Service .	
 
(a)   Each of the Company and the Guarantor agrees, to the fullest extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum due in respect of the principal of or interest on the Securities of any series (the “Required Currency”) into a currency in which a judgment will be rendered (the “Judgment Currency”), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee for such Securities could purchase in The City of New York the Required Currency with the Judgment Currency at 10:00 A.M. New York City time, or as close to such time as is reasonably practicable, on the day on which final unappealable judgment is entered, unless such day is not a New York Banking Day, then, to the extent permitted by applicable law, the rate of exchange used shall be the rate at which in accordance with normal banking procedures such Trustee could purchase in The City of New York the Required Currency with the Judgment Currency at 10:00 A.M. New York City time, or as close to such time as is reasonably practicable, on the New York Banking Day preceding the day on which final unappealable judgment is entered and (b) its obligations under this Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment (whether or not entered in accordance with this Subsection (a)), in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable and (iii) shall not be affected by judgment being obtained for any other sum due under this Indenture. For purposes of the foregoing, “New York Banking Day” means any day except a Saturday, Sunday or a legal holiday in The City of New York or a day on which banking institutions in The City of New York are authorized or required by law or executive order to close.
 
(b)   To the fullest extent permitted by applicable law, each of the Company and the Guarantor hereby irrevocably submits to the jurisdiction of any federal or state court located in the Borough of Manhattan in The City of New York, New York in any suit, action or proceeding based on or arising out of or relating to this Indenture or any Securities or any Guarantee and irrevocably agrees that all claims in respect of such suit or proceeding may be determined in any such court. Each of the Company and the Guarantor irrevocably waives, to the fullest extent permitted by law, any objection which it may have to the laying of the venue of any such suit, action or proceeding brought in an inconvenient forum. Each of the Company and the Guarantor agrees that final judgment in any such suit, action or proceeding brought in such a court shall be conclusive and binding upon the Company and/or the Guarantor, as applicable, and may be enforced in the courts of Bermuda (or any other courts to the jurisdiction of which the Company or the Guarantor, as applicable, is subject) by a suit upon such judgment, provided , that service of process is effected upon the Company and/or the Guarantor, as applicable, in the manner specified herein or as otherwise permitted by law. Each of the Company and the Guarantor hereby irrevocably designates and appoints Ingersoll-Rand Company, 155 Chestnut Ridge Road, Montvale, New Jersey 07645 (the “Process Agent”) as their authorized agent for purposes of this Section 117(b), it being understood that the designation and appointment of the Process Agent as such authorized agent shall become effective immediately without any further action on the part of the Company or the Guarantor. Each of the Company and the Guarantor further agrees that service of process upon the Process Agent and written notice of said service to the Company and/or the Guarantor, as applicable, mailed by prepaid registered first class mail or delivered to the Process Agent at its principal office, shall be deemed in every respect effective service of process upon the Company and/or the Guarantor, as applicable, in any such suit or proceeding. Each of the Company and the Guarantor further agrees to take any and all action, including the execution and filing of any and all such documents and instruments as may be necessary, to continue such designation and appointment of the Process Agent in full force and effect so long as the Company and/or the Guarantor, as applicable, has any outstanding obligations under this Indenture. To the extent the Company and/or the Guarantor, as applicable, has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service of notice, attachment prior to judgment, attachment in aid of execution, executor or otherwise) with respect to itself or its property, each of the Company and the Guarantor hereby irrevocably waives such immunity in respect of its obligations under this Indenture to the extent permitted by law.

15

SECTION 118.	Force Majeure .	
 
In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
 
ARTICLE TWO
- SECURITY FORMS
 
SECTION 201.	Forms Generally .	
 
The Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution of the Company or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officer executing such Securities, as evidenced by his or her execution of such Securities.
 
The certificate of authentication of the Trustee for any series of Securities shall be in substantially the form set forth in this Article.
 
The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officer executing such Securities, as evidenced by their execution of such Securities.
 
The definitive Guarantee shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Guarantee, as evidenced by their execution of such Guarantee.

16

SECTION 202.	Form of Face of Security .	
 
INGERSOLL-RAND GLOBAL HOLDING COMPANY LIMITED
 
[Title of the Security]
 
No.	CUSIP No. _____________	$____________	
 
INGERSOLL-RAND GLOBAL HOLDING COMPANY LIMITED, a company duly organized and existing under the laws of Bermuda (herein called the “Company”, which term includes any successor company under the Indenture hereinafter referred to), for value received, hereby promises to pay to _________________________, or registered assigns, the principal sum of _____________ Dollars on _______________ [If the Security is to bear interest prior to Maturity, insert — , and to pay interest thereon from __________________ __, ______ (the “Original Issue Date”) ,] or from the most recent Interest Payment Date to which interest has been paid or duly provided for, [ semiannually on ______________ and ______________ ] [quarterly on _________, __________, ___________ and ____________] in each year, commencing __ _____ __, _____, at [If the Security is to bear interest at a fixed rate insert—the rate per annum provided in the title hereof] [If the Security is to bear interest at a floating rate, insert— [a rate of [Insert Floating Rate] per annum], until the principal hereof is paid or made available for payment .   [If applicable insert — , and, subject to the terms of the Indenture, at [ the rate per annum provided in the title hereof ] [such rate] on any overdue principal and premium and (to the extent that the payment of such interest shall be legally enforceable) on any overdue installment of interest].
 
The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the [ _________ or _________ ] [________, _________, ________ or ___________] (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture].
 
[ If the Security is to bear interest at a fixed rate prior to Maturity, insert — Interest shall be computed on the basis of a year of twelve 30-day months.] [If the Security is to bear interest at a floating rate prior to Maturity, insert — Interest shall be computed on the basis of the actual number of days in the relevant interest period and a 360-day year.]

17

[If the Security is to bear interest at a floating rate prior to Maturity, insert — The [insert Floating Rate] will be reset [insert period time as set forth in a Board Resolution of the Company] on each Interest Payment Date (each an “Interest Reset Date”), beginning on ________ __, _____. The interest rate for the period from and including the Original Issue Date to and excluding the first Interest Payment Date shall be ______ per annum (the “Initial Interest Rate”). The _________ Business Day preceding an Interest Reset Date will be the “Interest Determination Date” for that Interest Reset Date. The interest rate in effect on each day that is not an Interest Reset Date will be the interest rate determined as of the Interest Determination Date pertaining to the immediately preceding Interest Reset Date or the Initial Interest Rate, as the case may be. The interest rate in effect on any day that is an Interest Reset Date will be the interest rate determined as of the Interest Determination Date pertaining to that Interest Reset Date.
 
Wells Fargo Bank, N.A. shall act as calculation agent (together with its successors in that capacity, the “Calculation Agent”) in connection with the Securities. The Calculation Agent shall serve as the calculation agent hereunder unless and until a successor calculation agent is appointed by the Company. The following definitions shall be used by the Calculation Agent in its determination of the interest rate: [insert definitions for floating rate determination]. ]
 
[If the Security is not to bear interest prior to Maturity, insert — The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal of this Security shall bear interest at the rate of [yield to maturity]% per annum (to the extent that the payment of such interest shall be legally enforceable), which shall accrue from the date of such default in payment to the date payment of such principal has been made or duly provided for. Interest on any overdue principal shall be payable on demand. Any such interest on any overdue principal that is not so paid on demand shall bear interest at the rate of [yield to maturity]% per annum (to the extent that the payment of such interest shall be legally enforceable), which shall accrue from the date of such demand for payment to the date payment of such interest has been made or duly provided for, and such interest shall also be payable on demand.]
 
Payment of the principal of (and premium, if any, on) and interest, if any, on this Security will be made at the office or agency of the Company maintained for that purpose in [the Borough of Manhattan, The City of New York], in [coin or currency], provided, however , that at the option of the Company payment of interest may be made by check mailed to the address of the person entitled thereto as such address shall appear in the Security Register.
 
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
 
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

18

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.
 
[Seal]

INGERSOLL-RAND GLOBAL HOLDING COMPANY LIMITED	
 	 	
By	 	
 
SECTION 203.	Form of Reverse of Security .	
 
INGERSOLL-RAND GLOBAL HOLDING COMPANY LIMITED
 
[Title of the Security]
 
This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of _______________ (herein called the “Indenture”), among the Company, Ingersoll-Rand Company Limited ( herein called the “Guarantor”, which term includes any successor guarantor under the Indenture) and Wells Fargo Bank, N.A., as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantor, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof, limited in aggregate principal amount to ___________.
 
[If applicable, insert – The Securities of this series are subject to redemption upon not less than 30 or more than 60 days’ notice by mail to the Holders of such Securities at their addresses in the Security Register for such series, [if applicable, insert - (1) on __________ in any year commencing with the year ____ and ending with the year ____ through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2)] at any time [on or after _________________, 20__], as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount):
 
If redeemed [on or before _____________, ____% and if redeemed] during the 12-month period beginning ____________________:
 
Year	 	Redemption
Price	 	Year	 	Redemption
Price	

and thereafter at a Redemption Price equal to _____% of the principal amount, together in the case of any such redemption [if applicable, insert - (whether through operation of the sinking fund or otherwise)] with accrued and unpaid interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]

19

[If applicable, insert - The Securities of this series are subject to redemption upon not less than 30 or more than 60 days’ notice by mail to the Holders of such Securities at their addresses in the Security Register for such series, (1) on ________________ in any year commencing with the year ____ and ending with the year _____ through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [on or after ________________], as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below:
 
If redeemed during the 12-month period beginning ______________________:
 
Year	 	Redemption Price
For Redemption
Through Operation
of the
Sinking Fund	 	Redemption Price For
Redemption Otherwise
Than Through Operation
of the Sinking Fund	

 	 	 	 	 	

 	 	 	 	 	

and thereafter at a Redemption Price equal to _______% of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued and unpaid interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities or one or more Predecessor Securities of record at the close of business on the relevant Record Dates referred to on the face hereof all as provided in the Indenture.]
 
[If applicable, insert - The Securities of this series are subject to redemption upon not less than 30 or more than 60 days’ notice by mail to the Holders of such Securities at their addresses in the Security Register for such series, at any time, as a whole or in part, at the election of the Company, at a Redemption Price equal to the greater of:
 
(i) 100% of the principal amount of the Securities to be redeemed, or
 
(ii) as determined by the Quotation Agent (as defined below), the sum of the present values of the remaining scheduled payments of principal and interest on the Securities to be redeemed (not including any portion of payments of interest accrued as of the Redemption Date) from the Redemption Date to the date of Maturity, discounted to the Redemption Date on a semi-annual basis assuming a 360-day year consisting of twelve 30-day months at a discount rate equal to the Adjusted Treasury Rate (as defined below) plus ___ basis points.

20

Interest will cease to accrue on the Securities or portions of the Securities called for redemption on and after the Redemption Date.
 
“Adjusted Treasury Rate” means, with respect to any Redemption Date, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that Redemption Date.
 
“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Securities to be redeemed that would be used, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such Securities.
 
“Comparable Treasury Price” means, with respect to any Redemption Date, (i) the average of the Reference Treasury Dealer Quotations for that Redemption Date, after excluding the highest and lowest of the Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than four Reference Treasury Dealer Quotations, the average of the Reference Treasury Dealer Quotations so received.
 
“Quotation Agent” means J.P. Morgan Securities Inc.
 
“Reference Treasury Dealer” means (i) each of Credit Suisse Securities (USA) LLC, Goldman, Sachs & Co. and J.P. Morgan Securities Inc., and their respective successors, unless any of them ceases to be a primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”), in which case the Company shall substitute another Primary Treasury Dealer, and (ii) any other Primary Treasury Dealers selected by the Quotation Agent.
 
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by that Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding that Redemption Date.]
 
[Notwithstanding the foregoing, the Company may not prior to _____________ redeem any Securities of this series as contemplated by [Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than ______% per annum.]

21

[The sinking fund for this series provides for the redemption on ________________ in each year beginning with the year ________ and ending with the year _______ of [not less than] _________ [(“mandatory sinking fund”) and, at the option of the Company, not more than _______] aggregate principal amount of Securities of this series. [Securities of this series acquired or redeemed by the Company otherwise than through [mandatory] sinking fund payments may be credited against subsequent [mandatory] sinking fund payments otherwise required to be made in the order in which they become due.]
 
[In the event of redemption of this Security in part only, a new Security or Securities of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.]
 
The Securities of this series are subject to redemption upon the occurrence of a Change of Control Triggering Event. Unless the Company has exercised its right to redeem this Security in full as described above, the Indenture provides that each Holder of the Securities of this series will have the right to require the Company to purchase all or a portion of such Holder’s Securities of this series pursuant to the offer described below (the “Change of Control Offer”) at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase, subject to the rights of Holders of Securities of this series on the relevant record date to receive interest due on the relevant Interest Payment Date.
 
Within 30 days following the date upon which the Change of Control Triggering Event occurred, or at the Company’s option, prior to any Change of Control but after the public announcement of the pending Change of Control, the Company will be required to send, by first class mail, a notice to each Holder of the Securities of this series, with a copy to the Trustee, which notice will govern the terms of the Change of Control Offer. Such notice will state, among other things, the purchase date, which must be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by law (the “Change of Control Payment Date”). The notice, if mailed prior to the date of consummation of the Change of Control, will state that the Change of Control Offer is conditioned on the Change of Control being consummated on or prior to the Change of Control Payment Date.
 
Holders electing to have Securities purchased pursuant to a Change of Control Offer will be required to surrender their Securities, with the form below entitled “Option of Holder to Elect Purchase” completed, to the Paying Agent at the address specified in the notice, or transfer their Securities to the Paying Agent by book-entry transfer pursuant to the applicable procedures of the Paying Agent, prior to the close of business on the third business day prior to the Change of Control Payment Date.
 
On the Change of Control Payment Date, the Company will, to the extent lawful:
 
 	1.	accept for payment all Securities of this series (or portions of Securities of this series) properly tendered pursuant to the Change of Control Offer;	
 
 	2.	deposit with the Paying Agent an amount equal to the aggregate payment in respect of all Securities of this series (or portions of Securities of this series) properly tendered pursuant to the Change of Control Offer; and	
 
 	3.	deliver or cause to be delivered to the Trustee the Securities of this series properly accepted for purchase, together with an officer’s certificate stating the aggregate principal amount of Securities of this series (or portions of Securities of this series) being purchased.	

22

The Paying Agent will promptly mail to each Holder of properly tendered Securities the purchase price for the Securities, and the Trustee will promptly authenticate and mail (or cause to be transferred by book-entry) to each such Holder new Securities equal in principal amount to any unpurchased portion of any Securities surrendered; provided , that each new Security will be in a principal amount of $2,000 or an integral multiple of $1,000 thereof.
 
The Company will not be required to make a Change of Control Offer if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for such an offer made by the Company and such third party purchases all properly tendered Securities of this series not withdrawn under its offer.
 
The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the purchase of the Securities of this series as a result of a Change of Control Triggering Event. To the extent that the provisions of any such securities laws or regulations conflict with the Change of Control Offer provisions of the Securities of this series, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control Offer provisions of the Securities of this series by virtue of such conflict.
 
For purposes of the Change of Control Offer provisions of the Securities, the following terms will be applicable:
 
“Below Investment Grade Rating Event” means the Securities of this series cease to be rated Investment Grade by at least two of the three Rating Agencies on any date during the Trigger Period.

“Change of Control” means the occurrence of any one of the following:
 
 	1.	the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Guarantor and its subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d) and Section 14(d) of the Exchange Act) other than to the Guarantor or one of its subsidiaries;	
 
 	2.	the consummation of any transaction (including without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d) and Section 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the outstanding Voting Stock of the Guarantor, or other Voting Stock into which the Voting Stock of the Guarantor is reclassified, consolidated, exchanged or changed, measured by voting power rather than number of shares;	

23

 	3.	the first day on which the majority of the members of the board of directors of the Guarantor cease to be Continuing Directors;	
 
 	4.	IR Limited consolidates with, or merges with or into, any person, or any person consolidates with, or merges with or into, IR Limited, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of IR Limited or such other person is converted into or exchanged for cash, securities or other property, other than any such transaction where the shares of the Voting Stock of IR Limited outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving person immediately after giving effect to such transaction;	
 
 	5.	the adoption of a plan relating to the liquidation or dissolution of IR Limited; or	
 
 	6.	the failure of IR Limited to own, directly or indirectly, at least 51% of the Voting Stock of the Company.	
 
Notwithstanding the foregoing, a transaction will not be deemed to involve a Change of Control under clause (2) above if (i) the Guarantor becomes a direct or indirect wholly-owned subsidiary of a holding company and (ii) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Voting Stock of the Guarantor immediately prior to that transaction.
 
“Change of Control Triggering Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event. Notwithstanding the foregoing, no Change of Control Triggering Event will be deemed to have occurred in connection with any particular Change of Control unless and until such Change of Control has actually been consummated.
 
“Continuing Director” means, as of any date of determination, any member of the board of directors of the Guarantor who: (1) was a member of such board of directors on the date of the issuance of the Securities of this series; or (2) was nominated for election or elected to such board of directors with the approval of a majority of the Continuing Directors who were members of such board of directors at the time of such nomination or election.
 
“Fitch” means Fitch Inc., a subsidiary of Fimalac, S.A., and its successors.
 
“Investment Grade” means (1) a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating category of Moody’s); (2) a rating of BBB- or better by S&P (or its equivalent under any successor rating category of S&P); and (3) a rating of BBB- or better by Fitch (or its equivalent under any successor rating category of Fitch).

“Moody’s” means Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, and its successors.
 
“Rating Agency” means each of Moody’s, S&P and Fitch; provided , that if any of Moody’s, S&P and Fitch ceases to rate the Securities of a series or fails to make a rating of the Securities of a series publicly available for reasons outside of the Company’s and the Guarantor’s control, a “nationally recognized statistical rating organization,” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Company as a replacement agency for Moody’s, S&P or Fitch, or any of them, as the case may be, with respect to making a rating of the Securities of such series.

24

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.
 
“Trigger Period” means the period commencing 60 days prior to the first public announcement by the Guarantor of any Change of Control (or pending Change of Control) and ending 60 days following the consummation of such Change of Control (which Trigger Period will be extended if the rating of the Securities of this series is under publicly announced consideration for possible downgrade by any Rating Agency on such 60th day, such extension to last with respect to each Rating Agency until the date on which such Rating Agency considering such possible downgrade either (x) rates the Securities of this series below Investment Grade or (y) publicly announces that it is no longer considering the Securities of this series for possible downgrade; provided , that no such extension will occur if on such 60th day the Securities of this series are rated Investment Grade not subject to review for possible downgrade by any Rating Agency).
 
“Voting Stock” of any specified person as of any date means the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person.
 
The Indenture contains provisions for defeasance of (a) the entire indebtedness of this Security and (b) certain restrictive covenants upon compliance by the Company with certain conditions set forth therein.
 
[If the Security is not an Original Issue Discount Security, insert - If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.]
 
[If the Security is an Original Issue Discount Security, insert - If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series (the “Acceleration Amount”) may be declared due and payable in the manner and with the effect provided in the Indenture. In case of a declaration of acceleration on or before _______, ________ or on _______in any year, the Acceleration Amount per         principal amount at Stated Maturity of the Securities shall be equal to the amount set forth in respect of such date below:

25

 
 	Date of declaration	 	Acceleration
Amount per
principal amount
at Stated Maturity	 	

and in case of a declaration of acceleration on any other date, the Acceleration Amount shall be equal to the Acceleration Amount as of the next preceding date set forth in the table above, plus accrued original issue discount (computed in accordance with generally accepted accounting principles in effect on __________) from such next preceding date to the date of declaration at the yield to maturity. For the purpose of this computation the yield to maturity is ______%. Upon payment (i) of the Acceleration Amount so declared due and payable and (ii) of interest on any overdue principal and overdue interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company’s obligations in respect of the payment of the principal of and interest, if any, on the Securities of this series shall terminate.]
 
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company, the Guarantor and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of all series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities at the time Outstanding of all series to be affected, on behalf of the Holders of all Securities of such series, to waive compliance by the Company and the Guarantor with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
 
No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any, on) and interest, if any, on this Security at the times, place and rate, and in the coin or currency, herein prescribed.
 
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of (and premium, if any, on) and interest, if any, on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Securities of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
 
The Securities of this series are issuable only in registered form without coupons in denominations of _____________ and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series of a different authorized denomination, as requested by the Holder surrendering the same.

26

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
 
Prior to due presentment of this Security for registration of transfer, the Company [,the Guarantor,] the Trustee and any agent of the Company [, the Guarantor] or the Trustee may treat the person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and none of the Company [, the Guarantor,] the Trustee or any such agent shall be affected by notice to the contrary.
 
No recourse for the payment of the principal of (and premium, if any, on) or interest, if any, on this Security [or the Guarantee endorsed hereon], or for any claim based hereon or thereon or otherwise in respect hereof or thereof, and no recourse under or upon any obligation, covenant or agreement of the Company or the Guarantor in the Indenture or in any indenture supplemental thereto, or in any Security [or in the Guarantee], or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, shareholder, officer or director, as such, past, present or future, of the Company [or the Guarantor] or of any successor corporation, either directly or through the Company [or the Guarantor] or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.
 
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
 
All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
 
In the event that a provision of this Security conflicts with the Indenture, the terms of the Indenture will govern.

27

Option of Holder to Elect Purchase
 
If you want to elect to have this Security purchased by the Company pursuant to Section 1108 of the Indenture, check the box below:
 
o
 
If you want to elect to have only part of the Security purchased by the Company pursuant to Section 1108 of the Indenture, state the amount you elect to have purchased:
 
$___________
 
Date:_______________

Your Signature:	 	
 	(Sign exactly as your name	
 	appears on the face of this	
 	Security)	
 	 	
Tax Identification No.:	  	
 
Signature Guarantee:** ________________________

**	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee)	

28

 
SECTION 204.	Form of Trustee’s Certificate of Authentication .	
 
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
 
Dated:
 
WELLS FARGO BANK, N.A., as Trustee	
 	 	
By	 	
 	Authorized Signatory	
 
SECTION 205.	Securities in Global Form .	
 
If any Security of a series is issuable in global form, such Global Security may provide that it shall represent the aggregate amount of Outstanding Securities from time to time endorsed thereon and may also provide that the aggregate amount of Outstanding Securities represented thereby may from time to time be reduced to reflect exchanges. Any endorsement of a Global Security to reflect the amount, or any increase or decrease in the amount, of Outstanding Securities represented thereby shall be made by the Trustee of such series of Securities and in such manner as shall be specified in such Global Security. Any instructions by the Company with respect to a Global Security, after its initial issuance, shall be in writing but need not comply with Section 102.
 
None of the Company, the Guarantor, the Trustee of such series of Securities, any Paying Agent or the Security Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
 
SECTION 206.	Guarantee; Form of Guarantee .	
 
The Guarantor by its execution of this Indenture hereby agrees with each Holder of a Security of each series authenticated and delivered by the Trustee of such series of Securities and with such Trustee on behalf of each such Holder, to be unconditionally bound by the terms and provisions of the Guarantee set forth below and authorizes such Trustee to confirm such Guarantee to the Holder of each such Security by its execution and delivery of each such Security, with such Guarantee endorsed thereon, authenticated and delivered by such Trustee.
 
The Guarantee to be endorsed on the Security shall, subject to Section 201, be in substantially the form set forth below:

29

 
GUARANTEE
OF
INGERSOLL-RAND COMPANY LIMITED
 
For value received, Ingersoll-Rand Company Limited, a company duly organized and existing under the laws of Bermuda (herein called the “Guarantor”, which term includes any successor Person under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby irrevocably and unconditionally guarantees to the Holder of the Security upon which this Guarantee is endorsed and to the Trustee for itself and on behalf of each such Holder the due and punctual payment of the principal of (and premium, if any, on) and interest on such Security and the due and punctual payment of the sinking fund or analogous payments referred to therein, if any, when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, according to the terms thereof and of the Indenture referred to therein, and all other amounts owed under the Indenture, all in accordance with and subject to the terms and limitations of the Security on which this Guarantee is endorsed and Article Thirteen of the Indenture. In case of the failure of Ingersoll-Rand Global Holding Company Limited, a company duly organized under the laws of Bermuda (herein called the “Company”, which term includes any successor Person under such Indenture), promptly to make any such payment of principal (and premium, if any) or interest or any such sinking fund or analogous payment, the Guarantor hereby agrees to cause any such payment to be made promptly when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Company, subject to the terms and limitations of Article Thirteen of the Indenture.
 
This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of such Security shall have been manually executed by or on behalf of the Trustee under such Indenture.
 
All terms used in this Guarantee which are defined in such Indenture shall have the meanings assigned to them in such Indenture.
 
THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
 
Executed and dated the date on this ___________ day of ________, 20___.

[Seal]	INGERSOLL-RAND COMPANY LIMITED	

30

 
By	 	
 	Name:	
 	Title:	
 	 	
By:	 	
 	Name:	
 	Title:	

Reference is made to Article Thirteen for further provisions with respect to the Guarantee.
 
ARTICLE THREE
- THE SECURITIES
 
SECTION 301.	Amount Unlimited; Issuable in Series .	
 
The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.
 
The Securities may be issued in one or more series. The terms of each series of Securities shall be established either by an Officer’s Certificate or by a supplemental indenture. If the terms of a series of Securities are to be established pursuant to an Officer’s Certificate, one or more duly appointed officers of the Company and one or more duly appointed officers of the Guarantor shall execute and deliver to the Trustee such Officer’s Certificate, acting pursuant to authority granted to such officers by the Board of Directors of the Company and by the Board of Directors of the Guarantor. If the terms of a series of Securities are to be established pursuant to a supplemental indenture, such supplemental indenture shall be entered into in accordance with the provisions of Section 901 hereof. Such Officer’s Certificate or supplemental indenture (including any exhibits thereto) shall establish:
 
(1)   the title of the Securities of that series (which shall distinguish the Securities of that series from all other series of Securities);
 
(2)   any limit upon the aggregate principal amount of the Securities of that series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of that series pursuant to Sections 304, 305, 306, 906, or 1107);
 
(3)   the date or dates on which the principal of the Securities of that series is payable;
 
(4)   the rate or rates (or the manner of calculation thereof) at which the Securities of that series shall bear interest, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable and the Regular Record Date for the interest payable on any Interest Payment Date;

31

(5)   the place or places where the principal of (and premium, if any, on) and interest, if any, on Securities of that series shall be payable and where such Securities may be registered or transferred;
 
(6)   the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of that series may be redeemed, in whole or in part, at the option of the Company;
 
(7)   the obligation, if any, of the Company to redeem or purchase Securities of that series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof, and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of that series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;
 
(8)   the right, if any, of the Company to redeem or purchase Securities of that series and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of that series shall be redeemed or purchased, in whole or in part, pursuant to such right;
 
(9)   if other than denominations of $2,000 and integral multiples of $1,000 in excess thereof, the denominations in which Securities of that series shall be issuable;
 
(10)   if other than the principal amount thereof, the portion of the principal amount of Securities of that series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502;
 
(11)   if other than such coin or currency of the United States of America, the currency or currency unit in which payment of the principal of (or premium, if any, on) or interest, if any, on the Securities of that series shall be payable or in which the Securities of that series shall be denominated and the particular provisions applicable thereto;
 
(12)   if the principal of (and premium, if any, on) or interest, if any, on the Securities of that series are to be payable, at the election of the Company, the Guarantor or a Holder thereof, in a coin or currency other than that in which the Securities are stated to be payable, the period or periods within which, and the terms and conditions upon which, such election may be made;
 
(13)   if the amount of payments of principal of (and premium, if any, on) or interest, if any, on the Securities of that series may be determined with reference to an index based on a coin or currency other than that in which the Securities are stated to be payable, the manner in which such amounts shall be determined;

32

(14)   any provisions permitted by this Indenture relating to Events of Default or covenants of the Company with respect to such series of Securities (including deletions therefrom, modifications thereof or additions thereto, whether or not consistent with the Events of Default or covenants set forth herein);
 
(15)   if the Securities of that series shall be issued in whole or in part in the form of one or more Global Securities and, in such case, the U.S. Depositary for such Global Security or Securities; the manner in which and the circumstances under which Global Securities representing Securities of that series may be exchanged for Securities in definitive form, if other than, or in addition to, the manner and circumstances specified in Section 305;
 
(16)   whether the Securities of that series will be convertible into Common Shares of the Company and/or exchangeable for other Securities, and if so, the terms and conditions upon which such Securities will be so convertible or exchangeable, and any deletions from or modifications or additions to this Indenture to permit or to facilitate the issuance of such convertible or exchangeable Securities or the administration thereof;  
 
(17)   the applicability of any guarantees other than the Guarantee;
 
(18)   if a Person other than Wells Fargo Bank, N.A. is to act as Trustee for the Securities of that series, the name and location of the Corporate Trust Office of such Trustee; and
 
(19)   any other terms of that series (which terms shall not be inconsistent with the provisions of this Indenture).
 
All Securities of any particular series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such Board Resolution of the Company and the Guarantor and set forth in such Officer’s Certificate or in any such indenture supplemental hereto.
 
If any of the terms of the series, including the form of Security of such series, are established by action taken pursuant to a Board Resolution of the Company and a Board Resolution of the Guarantor, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and the Secretary or Assistant Secretary of the Guarantor and delivered to the Trustee for the Securities of such series at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such series of Securities.

SECTION 302.	Denominations .	
 
The Securities of each series shall be issuable in registered form without coupons in such denominations as shall be specified as contemplated by Section 301. In the absence of any such provisions with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

33

 
SECTION 303.	Execution, Authentication, Delivery and Dating .	
 
The Securities shall be executed, manually or by facsimile, on behalf of the Company by its Chairman of the Board of Directors, its President, one of its Vice Presidents or its Treasurer under its corporate seal reproduced thereon, by facsimile or otherwise, and which need not be attested.
 
The Guarantee endorsed on any Securities shall be executed, manually or by facsimile, on behalf of the Guarantor by its Chairman of the Board of Directors, its President or one of its Vice Presidents and by its Treasurer or one of its Assistant Treasurers or its Secretary or one of its Assistant Secretaries, under its corporate seal reproduced thereon, by facsimile or otherwise, and which need not be attested.
 
Securities or the Guarantee bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company or the Guarantor, as the case may be, shall bind the Company or the Guarantor, as the case may be, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or the Guarantee or did not hold such offices at the date of such Securities or the Guarantee.
 
At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for the Securities of such series for authentication, together with a Company Order for the authentication and delivery of such Securities, and such Trustee in accordance with the Company Order shall authenticate and deliver such Securities. If the form or terms of the Securities of the series have been established in or pursuant to one or more Board Resolutions of the Company and of the Guarantor, as the case may be, as permitted by Sections 201 and 301, in authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities, such Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel of the Company and the Guarantor, as the case may be, stating:
 
(a)   if the form of such Securities has been established by or pursuant to Board Resolution of the Company as permitted by Section 201, that such form has been established in conformity with the provisions of this Indenture;
 
(b)   if the terms of such Securities have been established by or pursuant to Board Resolution of the Company and of the Guarantor, as the case may be, as permitted by Section 301, that such terms have been established in conformity with the provisions of this Indenture;
 
(c)   that such Securities and the Guarantee endorsed thereon, when authenticated and delivered by such Trustee and issued by the Company and the Guarantor, as the case may be, in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company and the Guarantor, as the case may be, respectively, enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting the enforcement of creditors’ rights and to general equity principles ; and

34

(d)   that all laws and requirements in respect of the execution and delivery by the Company of such Securities and by the Guarantor of each Guarantee have been complied with.
 
If such form or terms have been so established, the Trustee for the Securities of such series shall not be required to authenticate such Securities if such Trustee, being advised by counsel, determines that the issue of such Securities pursuant to this Indenture will affect such Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to such Trustee.
 
Notwithstanding the foregoing, if not all the Securities of any series are to be issued at one time, it shall not be necessary to deliver the Officer’s Certificate otherwise required pursuant to the foregoing or the Company Order and Opinion of Counsel otherwise required pursuant to the foregoing prior to or at the time of issuance of each Security, but such documents shall be delivered prior to or at the time of issuance of the first Security of such series.
 
Each Security shall be dated the date of its authentication.
 
No Security or Guarantee endorsed thereon shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee for the Securities of such series by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder and, together with the Guarantee, if any, endorsed thereon, is entitled to the benefits of this Indenture.
 
SECTION 304.	Temporary Securities .	
 
Pending the preparation of definitive Securities of any particular series, the Company may execute, and upon Company Order the Trustee for the Securities of such series shall authenticate and deliver temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and having endorsed thereon a Guarantee executed by the Guarantor of the tenor of the definitive Guarantee, and with such appropriate insertions, omissions, substitutions and other variations as the officer executing such Securities may determine, as evidenced by his or her execution of such Securities.
 
If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series the Company shall execute and the Trustee for the Securities of such series shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of the same series of authorized denominations and having endorsed thereon the Guarantee by the Guarantor. Until so exchanged the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series.

35

SECTION 305.	Registration, Registration of Transfer and Exchange .	
 
The Company shall cause to be kept at the Corporate Trust Office of the Trustee for the Securities of each series a register (the register maintained at such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee for the Securities of each series is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers of Securities as herein provided.
 
Upon surrender for registration of transfer of any Security of any series at the office or agency in a Place of Payment for that series, the Company shall execute, and the Trustee for the Securities of each series shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of a like aggregate principal amount, and having endorsed thereon a Guarantee executed by the Guarantor.
 
At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, of any authorized denominations and of a like aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee for the Securities of such series shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive, and having endorsed thereon a Guarantee executed by the Guarantor.
 
All Securities and the Guarantee endorsed thereon issued upon any registration of transfer or exchange of Securities and the Guarantee endorsed thereon, shall be the valid obligations of the Company and the Guarantor, respectively evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities and the Guarantee endorsed thereon surrendered upon such registration of transfer or exchange.
 
Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee for the Securities of such series) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his or her attorney duly authorized in writing.
 
No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Sections 304, 906 or 1107 not involving any transfer.

36

The Company shall not be required (i) to issue, register the transfer of or exchange Securities of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of that series selected for redemption under Section 1103 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.
 
If the Company shall establish pursuant to Section 301 that the Securities of a series are to be issued in whole or in part in the form of one or more Global Securities, then the Company shall execute (along with a Guarantee executed by the Guarantor endorsed thereon) and the Trustee for the Securities of such series shall, in accordance with Section 303 and the Company Order with respect to such series, authenticate and deliver one or more Global Securities in temporary or permanent form that (i) shall represent and shall be denominated in an amount equal to the aggregate principal amount of the Outstanding Securities of such series to be represented by one or more Global Securities, (ii) shall be registered in the name of the U.S. Depositary for such Global Security or Securities or the nominee of such depositary, and (iii) shall bear a legend substantially to the following effect: “This Security (and the related Guarantee) may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary, unless and until this Security is exchanged in whole or in part for Securities in definitive form” and such other legend as may be required by the U.S. Depositary.
 
Notwithstanding any other provision of this Section, unless and until it is exchanged in whole or in part for Securities in definitive form, a Global Security (and the related Guarantee) representing all or a portion of the Securities of a series may not be transferred except as a whole by the U.S. Depositary for such series to a nominee of such depositary or by a nominee of such depositary to such depositary or another nominee of such depositary or by such depositary or any such nominee to a successor U.S. Depositary for such series or a nominee of such successor depositary.
 
If at any time the U.S. Depositary for the Securities of a series notifies the Company that it is unwilling or unable to continue as U.S. Depositary for the Securities of such series or if any time the U.S. Depositary for Securities of a series shall no longer be a clearing agency registered and in good standing under the Exchange Act, or other applicable statute or regulation, the Company shall appoint a successor U.S. Depositary with respect to the Securities of such series. If a successor U.S. Depositary for the Securities of such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such condition, the Company will execute, and the Trustee for the Securities of such series, upon receipt of a Company Order for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities of such series in definitive form in an aggregate principal amount equal to the principal amount of the Global Security or Securities representing such series in exchange for such Global Security or Securities and having endorsed thereon a Guarantee executed by the Guarantor.

37

The Company may at any time and in its sole discretion determine that the Securities of any series issued in the form of one or more Global Securities shall no longer be represented by such Global Security or Securities. In such event, the Company will execute, and the Trustee for the Securities of such series, upon receipt of a Company Order for the authentication and delivery of definitive Securities of such series, will authenticate and deliver, Securities of such Series in definitive form and in an aggregate principal amount equal to the principal amount of the Global Security or Securities representing such series in exchange for such Global Security or Securities and having endorsed thereon a Guarantee executed by the Guarantor.
 
If the Securities of any series shall have been issued in the form of one or more Global Securities and if an Event of Default with respect to the Securities of such series shall have occurred and be continuing, the Company will promptly execute, and the Trustee for the Securities of such series, upon receipt of a Company Order for the authentication and delivery of definitive Securities of such series, will authenticate and deliver Securities of such series in definitive form and in an aggregate principal amount equal to the principal amount of the Global Security or Securities representing such series in exchange for such Global Security or Securities and having endorsed thereon a Guarantee executed by the Guarantor.
 
If specified by the Company pursuant to Section 301 with respect to Securities of a series, the U.S. Depositary for such series of Securities may surrender a Global Security for such series of Securities in exchange in whole or in part for Securities of such series in definitive form on such terms as are acceptable to the Company and such depositary. Thereupon, the Company shall execute and the Trustee for the Securities of such series shall authenticate and deliver, without charge:
 
(i)   to each Person specified by the U.S. Depositary a new registered Security or Securities of the same series, of an authorized denomination as requested by such Person in an aggregate principal amount equal to and in exchange for such Person’s beneficial interest in the Global Security and having endorsed thereon a Guarantee executed by the Guarantor; and
 
(ii)   to the U.S. Depositary a new Global Security in a denomination equal to the difference, if any, between the principal amount of the surrendered Global Security and the aggregate principal amount of Securities delivered to Holders thereof and having endorsed thereon a Guarantee executed by the Guarantor.
 
Upon the exchange of a Global Security in whole for Securities in definitive form, such Global Security shall be canceled by the Trustee for the Securities of such series. Securities issued in exchange for a Global Security shall be registered in such names and in such authorized denominations as the U.S. Depositary for such Global Security, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee for the Securities of such series. Such Trustee shall deliver such Securities to the Persons in whose names such Securities are so registered.
 
SECTION 306.	Mutilated, Destroyed, Lost and Stolen Securities .	
 
If any mutilated Security is surrendered to the Trustee for the series of such Securities, the Company shall execute and such Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding, and having endorsed thereon a Guarantee executed by the Guarantor.

38

If there shall be delivered to the Company and the Trustee for the series of such Securities (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or such Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon its request such Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding, and having endorsed thereon a Guarantee executed by the Guarantor.
 
In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.
 
Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee for the series of such Securities) connected therewith.
 
Every new Security of any series and the Guarantee endorsed thereon, issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company and the Guarantor, respectively, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder.
 
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.
 
SECTION 307.	Payment of Interest; Interest Rights Preserved .	
 
Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.
 
Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below:

39

(1)   The Company may elect to make payment of any Defaulted Interest to the persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee for the Securities of such series in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with such Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements reasonably satisfactory to such Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the persons entitled to such Defaulted Interest as in this Clause provided. Thereupon such Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by such Trustee of the notice of the proposed payment. Such Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities of such series at his or her address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2).
 
(2)   The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee for the Securities of such series of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by such Trustee.
 
Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.
 
SECTION 308.	Persons Deemed Owners .	
 
Prior to due presentment of a Security for registration of transfer, the Company, the Guarantor, the Trustee for such Security and any agent of the Company, the Guarantor or such Trustee may treat the person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any, on) and (subject to Section 307) interest, if any, on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and none of the Company, the Guarantor, such Trustee or any agent of the Company, the Guarantor or such Trustee shall be affected by notice to the contrary.

40

Notwithstanding the foregoing, with respect to any Global Security, nothing herein shall prevent the Company, the Guarantor, the Trustee for such Security, or any agent of any of the foregoing, from giving effect to any written certification, proxy or other authorization furnished by any depositary, as a Holder, with respect to such Global Security or impair, as between such depositary and owners of beneficial interests in such Global Security, the operation of customary practices governing the exercise of the rights of such depositary (or its nominee) as Holder of such Global Security.
 
SECTION 309.	Cancellation .	
 
All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any person other than the Trustee for such Securities, be delivered to such Trustee and shall be promptly cancelled by it. The Company or the Guarantor may at any time deliver to such Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company or the Guarantor may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly cancelled by such Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by such Trustee shall be disposed of in accordance with such Trustee’s customary practices.
 
SECTION 310.	Computation of Interest .	
 
Except as otherwise specified as contemplated by Section 301 for Securities of any particular series, interest, if any, on the Securities of each series shall be computed on the basis of a year of twelve 30-day months.
 
SECTION 311.	CUSIP Numbers .	
 
The Company in issuing the Securities may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee for such Securities shall use “CUSIP” numbers in notices of redemption as a convenience to Holders of such Securities; provided , that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee in writing of any change in the “CUSIP” numbers.
 
ARTICLE FOUR
- SATISFACTION AND DISCHARGE
 
SECTION 401.	Satisfaction and Discharge of Indenture .	
 
This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee for the Securities of each series, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when:

41

(1)   either:
 
(A)   all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company or the Guarantor and thereafter repaid to the Company or the Guarantor, or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for the Securities of such series for cancellation; or
 
(B)   all such Securities not theretofore delivered to the Trustee for the Securities of such series for cancellation:
 
(i)   have become due and payable; or
 
(ii)   will become due and payable at their Stated Maturity within one year; or
 
(iii)   are to be called for redemption within one year under arrangements reasonably satisfactory to such Trustee for the giving of notice of redemption by such Trustee in the name, and at the expense, of the Company or the Guarantor; or
 
(iv)   are deemed paid and discharged pursuant to Section 403, as applicable,
 
and the Company or the Guarantor, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee for the Securities of such series as trust funds in trust for the purpose an amount of (a) money, or (b) in the case of (ii) or (iii) above and (except as provided in an indenture supplemental hereto) if no Securities of any series Outstanding are subject to repurchase at the option of Holders, (I) U.S. Government Obligations which through the payment of interest and principal in respect thereof in accordance with their terms will provide not later than one day before the Stated Maturity or Redemption Date, as the case may be, money in an amount, or (II) a combination of money or U.S. Government Obligations as provided in (I) above, in each case sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to such Trustee for cancellation, for principal (and premium, if any) and interest, if any, to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be;

42

(2)   the Company or the Guarantor has paid or caused to be paid all other sums payable hereunder by the Company; and
 
(3)   the Company or the Guarantor has delivered to the Trustee for the Securities of such series an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.
 
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee of the Securities of each series under Section 607, the obligations of the Trustee to any Authenticating Agent under Section 614 and, if money or U.S. Government Obligations shall have been deposited with the Trustee of the Securities of any series pursuant to Subclause (B) of Clause (1) of this Section or if money or U.S. Government Obligations shall have been deposited with or received by the Trustee of the Securities of any series pursuant to Section 403, the obligations of such Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
 
SECTION 402.	Application of Trust Money .	
 
(a)   Subject to the provisions of the last paragraph of Section 1003, all money or U.S. Government Obligations deposited with the Trustee of a particular series of Securities pursuant to Section 401, 403 or 1006 and all money received by the Trustee of a particular series of Securities in respect of U.S. Government Obligations deposited with the Trustee of that series of Securities pursuant to Section 401, 403 or 1006, shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company or the Guarantor acting as its own Paying Agent) as such Trustee may determine, to the persons entitled thereto, of the principal (and premium, if any) and interest, if any, for whose payment such money has been deposited with or received by such Trustee or to make mandatory sinking fund payments or analogous payments as contemplated by Section 401, 403 or 1006.
 
(b)   The Company and the Guarantor shall pay and shall indemnify the Trustee of each series of Securities against any tax, fee, or other charge imposed on or assessed against U.S. Government Obligations deposited pursuant to Section 401, 403 or 1006 or the interest and principal received in respect of such obligations other than any payable by or on behalf of Holders.
 
(c)   The Trustee of each series of Securities shall deliver or pay to the Company or the Guarantor from time to time upon Company Request any U.S. Government Obligations or money held by it as provided in Section 401, 403 or 1006 which, in the opinion of a nationally recognized firm of independent certified public accountants expressed in a written certification thereof delivered to such Trustee, are then in excess of the amount thereof which then would have been required to be deposited for the purpose for which such U.S. Government Obligations or money was deposited or received. This provision shall not authorize the sale by such Trustee of any U.S. Government Obligations held under this Indenture.

43

SECTION 403.	Satisfaction, Discharge and Defeasance of Securities of any Series .	
 
The Company and the Guarantor shall be deemed to have paid and discharged the entire indebtedness on all the Outstanding Securities of any series and the Guarantee, respectively, on the 91 st day after the date of the deposit referred to in subparagraph (a) hereof, and the provisions of this Indenture, as it relates to such Outstanding Securities of such series and the Guarantee, respectively, shall no longer be in effect (and the Trustee for the Securities of such series, at the expense of the Company or the Guarantor, shall at Company Request execute proper instruments acknowledging the same), except as to:
 
(1)   the rights of Holders of Securities of such series to receive, from the trust funds described in subparagraph (a) hereof, (i) payment of the principal of (and premium, if any, on) and each installment of principal of (and premium, if any, on) or interest, if any, on the Outstanding Securities of such series on the Stated Maturity of such principal or installment of principal or interest or to and including the Redemption Date irrevocably designated by the Company pursuant to subparagraph (e) hereof and (ii) the benefit of any mandatory sinking fund payments applicable to the Securities of such series on the day on which such payments are due and payable in accordance with the terms of this Indenture and the Securities of such series;
 
(2)   the Company’s obligations with respect to such Securities of such series under Sections 305, 306, and 1002 and, if the Company shall have irrevocably designated a Redemption Date pursuant to subparagraph (e) hereof, Sections 1101, 1104 and 1106 as they apply to such Redemption Date;
 
(3)   the Company’s obligations with respect to the Trustee for Securities of such series under Section 607; and
 
(4)   the rights, powers, trust and immunities of such Trustee hereunder and the duties of such Trustee under Section 402 and, if the Company shall have irrevocably designated a Redemption Date pursuant to subparagraph (e) hereof, Article Eleven and the duty of such Trustee to authenticate Securities of such series on registration of transfer or exchange;
 
provided , that the following conditions shall have been satisfied:
 
(a)   the Company or the Guarantor has deposited or caused to be irrevocably deposited (except as provided in Section 402(c) and the last paragraph of Section 1003) with such Trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Securities of such series, (i) money in an amount, or (ii) (except as provided in a supplemental indenture with respect to such series) if Securities of such series are not subject to repurchase at the option of Holders, (A) U.S. Government Obligations which through the payment of interest and principal in respect thereof in accordance with their terms will provide not later than one day before the due date of any payment referred to in Clause (x) or (y) of this subparagraph (a) money in an amount or (B) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent certified public accountants expressed in a written certification thereof delivered to such Trustee, to pay and discharge (x) the principal of (and premium, if any, on) and each installment of principal of (and premium, if any, on) and interest, if any, on the Outstanding Securities of such series on the Stated Maturity of such principal or installment of principal or interest or to and including the Redemption Date irrevocably designated by the Company pursuant to subparagraph (e) hereof and (y) any mandatory sinking fund payments applicable to the Securities of such series on the day on which such payments are due and payable in accordance with the terms of the Indenture and of the Securities of such series;

44

(b)   the Company or the Guarantor has delivered to such Trustee an Opinion of Counsel to the effect that such provision would not cause any Outstanding Securities of such series then listed on any national securities exchange to be delisted as a result thereof;
 
(c)   no Event of Default or event which with notice or lapse of time would become an Event of Default (including by reason of such deposit) with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit or during the period ending on the 91 st day after such date;
 
(d)   the Company or the Guarantor has delivered to such Trustee an Opinion of Counsel in the U.S. to the effect that the Company or the Guarantor has received from, or there has been published by the Internal Revenue Service a ruling to the effect that Holders of the Securities of such series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit, defeasance and discharge; and
 
(e)   if the Company or the Guarantor has deposited or caused to be deposited money or U.S. Government Obligations to pay or discharge the principal of (and premium, if any, on) and interest, if any, on the Outstanding Securities of a series to and including a Redemption Date on which all of the Outstanding Securities of such series are to be redeemed, such Redemption Date shall be irrevocably designated by a Board Resolution of the Company delivered to such Trustee on or prior to the date of deposit of such money or U.S. Government Obligations, and such Board Resolution shall be accompanied by an irrevocable Company Request that such Trustee give notice of such redemption in the name and at the expense of the Company or the Guarantor and less than 30 nor more than 60 days prior to such Redemption Date in accordance with Section 1104 .
 
SECTION 404.	Reinstatement .	
 
If the Trustee of the Securities of any series or any Paying Agent is unable to apply any money in accordance with Section 402 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations of the Company and the Guarantor under this Indenture and such Securities and any related coupons and the Guarantee shall be revived and reinstated as though no deposit had occurred pursuant to Section 403 or Section 1006, as the case may be, until such time as such Trustee or Paying Agent is permitted to apply all such money in accordance with Section 402; provided , however , that if the Company makes any payment of principal of (or premium, if any, on) or interest, if any, on any such Security or any related coupon following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities and any related coupons to receive such payment from the money held by such Trustee or Paying Agent.

45

ARTICLE FIVE
- REMEDIES
 
SECTION 501.	Events of Default .	
 
“Event of Default”, wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):
 
(1)   default in the payment of any interest on any Security of that series when it becomes due and payable and continuance of such default for a period of 30 days (subject to the deferral of any interest payment in the case of an extension period); or
 
(2)   default in the payment of the principal of (or premium, if any, on) any Security of that series at its Maturity; or
 
(3)   default in the payment of any sinking fund installment, when and as due by the terms of a Security of that series, and continuance of such default for a period of 30 days; or
 
(4)   default in the performance, or breach, of any covenant or warranty of the Company or the Guarantor in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of a series of Securities other than that series), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company and the Guarantor by the Trustee for the Securities of such series or to the Company, the Guarantor and such Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or
 
(5)   the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company or the Guarantor in an involuntary case or proceeding under any applicable federal or state or Bermuda bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company or the Guarantor a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company or the Guarantor under any applicable federal or state or Bermuda law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or the Guarantor or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; or

46

(6)   the commencement by the Company or the Guarantor of a voluntary case or proceeding under any applicable federal or state or Bermuda bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by the Company or the Guarantor to the entry of a decree or order for relief in respect of the Company or the Guarantor, respectively, in an involuntary case or proceeding under any applicable federal or state or Bermuda bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against the Company or the Guarantor, or the filing by the Company or the Guarantor of a petition or answer or consent seeking reorganization or relief under any applicable federal or state or Bermuda law, or the consent by the Company or the Guarantor to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or the Guarantor or of any substantial part of its property, or the making by the Company or the Guarantor of an assignment for the benefit of creditors, or the admission by the Company or the Guarantor in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company or the Guarantor in furtherance of any such action; or
 
(7)   any other Event of Default provided in the supplemental indenture or provided in or pursuant to a Board Resolution or Officer’s Certificate of the Company and the Guarantor, under which such series of Securities is issued or in the form of Security for such series.
 
SECTION 502.	Acceleration of Maturity; Rescission and Annulment .	
 
If an Event of Default (other than an Event of Default specified in Section 501(5) or 501(6)) with respect to Securities of any series at the time Outstanding occurs and is continuing, then in every such case the Trustee for the Securities of such series or the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities of that series may declare the principal amount (or, if the Securities of that series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of that series) of all of the Securities of that series to be due and payable immediately, by a notice in writing to the Company (and to such Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable. If an Event of Default specified in Section 501(5) or 501(6) with respect to Securities of any series at the time Outstanding occurs, the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof) shall automatically, and without any declaration or other action on the part of such Trustee or any Holder, become immediately due and payable.

47

At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee for the Securities of such series as hereinafter in this Article provided, the Holders of a majority in aggregate principal amount of the Outstanding Securities of that series, by written notice to the Company, the Guarantor and such Trustee, may rescind and annul such declaration and its consequences if:
 
(1)   the Company or the Guarantor has paid or deposited with such Trustee a sum sufficient to pay,
 
(A)   all overdue interest, if any, on all Securities of that series,
 
(B)   the principal of (and premium, if any, on) any Securities, of that series which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Securities,
 
(C)   to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and
 
(D)   all sums paid or advanced by such Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of such Trustee, its agents and counsel; and
 
(2)   all Events of Default with respect to Securities of that series, other than the non-payment of the principal of and accrued interest on Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.
 
No such rescission shall affect any subsequent default or impair any right consequent thereon.
 
For all purposes under this Indenture, if a portion of the principal of any Original Issue Discount Securities shall have been accelerated and declared due and payable pursuant to the provisions hereof, then, from and after such declaration, unless such declaration has been rescinded and annulled, the principal amount of such Original Issue Discount Securities shall be deemed, for all purposes hereunder, to be such portion of the principal thereof as shall be due and payable as a result of such acceleration, and payment of such portion of the principal thereof as shall be due and payable as a result of such acceleration, together with interest, if any, thereon and all other amounts owing thereunder, shall constitute payment in full of such Original Issue Discount Securities.

48

SECTION 503.	Collection of Indebtedness and Suits for Enforcement by Trustee .	
 
The Company covenants that if:
 
(1)   default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or
 
(2)   default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof,
 
the Company will, upon demand of the Trustee for the Securities of such series, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal (and premium, if any) and interest, if any, and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal (and premium, if any) and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of such Trustee, its agents and counsel.
 
If the Company fails to pay such amounts forthwith upon such demand, such Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company, the Guarantor or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company, the Guarantor or any other obligor upon such Securities, wherever situated.
 
If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee for the Securities of such series may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as such Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.
 
SECTION 504.	Trustee May File Proofs of Claim .	
 
In any case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company, the Guarantor or any other obligor upon the Securities or the property of the Company, the Guarantor or of such other obligor or their creditors, the Trustee for the Securities of such series (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether such Trustee shall have made any demand on the Company or the Guarantor for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise:

49

(i)   to file and prove a claim for the whole amount of principal (and premium, if any) and interest owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of such Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of such Trustee, its agents and counsel) and of the Holders of such Securities allowed in such judicial proceeding; and
 
(ii)   to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same;
 
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of such Securities to make such payments to such Trustee and, in the event that such Trustee shall consent to the making of such payments directly to such Holders, to pay to such Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of such Trustee, its agents and counsel, and any other amounts due such Trustee under Section 607.
 
Nothing herein contained shall be deemed to authorize the Trustee for the Securities of any series to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities, the Guarantee or the rights of any Holder thereof or to authorize such Trustee to vote in respect of the claim of any Holder in any such proceeding.
 
SECTION 505.	Trustee May Enforce Claims Without Possession of Securities .	
 
All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee for any series of Securities without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by such Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of such Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.
 
SECTION 506.	Application of Money Collected .	
 
Any money collected by the Trustee for any series of Securities pursuant to this Article shall be applied in the following order, at the date or dates fixed by such Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:
 
FIRST: to the payment of all amounts due such Trustee under Section 607;
 
SECOND: In case the principal of the Securities of such series in respect of which moneys have been collected shall not have become and be then due and payable, to the payment of interest, if any, on the Securities of such series in default in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by such Trustee and to the extent permitted by law) upon the overdue installments of interest at the rate prescribed therefor in such Securities, such payments to be made ratably to the persons entitled thereto, without discrimination or preference;

50

THIRD: In case the principal of the Securities of such series in respect of which moneys have been collected shall have become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Securities of such series for principal and interest, if any, with interest upon the overdue principal, and (to the extent that such interest has been collected by such Trustee and to the extent permitted by law) upon overdue installments of interest at the rate prescribed therefor in the Securities of such series; and in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Securities of such series, then to the payment of such principal and interest, without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other installment of interest, or of any Security of such series over any other Security of such series, ratably to the aggregate of such principal and accrued and unpaid interest; and
 
FOURTH: To the payment of the remainder, if any, to the Company or any other person lawfully entitled thereto.
 
SECTION 507.	Limitation on Suits .	
 
No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:
 
(1)   such Holder has previously given written notice to the Trustee for the Securities of such series of a continuing Event of Default with respect to the Securities of that series;
 
(2)   the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to such Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;
 
(3)   such Holder or Holders have offered to such Trustee indemnity reasonably satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;
 
(4)   such Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and
 
(5)   no direction inconsistent with such written request has been given to such Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series,
 
it being understood and intended that no one or more of such Holders shall have any right in any manner whatsoever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all such Holders.

51

SECTION 508.	Unconditional Right of Holders to Receive Principal, Premium and Interest .	
 
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any, on) and (subject to Section 307) interest, if any, on such Security on the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.
 
SECTION 509.	Restoration of Rights and Remedies .	
 
If the Trustee for the Securities of any series or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to such Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Guarantor, such Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of such Trustee and the Holders shall continue as though no such proceeding had been instituted.
 
SECTION 510.	Rights and Remedies Cumulative .	
 
Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee for the Securities of any series or to any Holder is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
 
SECTION 511.	Delay or Omission Not Waiver .	
 
No delay or omission of the Trustee for the Securities of any series or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to such Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by such Trustee or by the Holders, as the case may be.
 
SECTION 512.	Control by Holders .	
 
The Holders of a majority in aggregate principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee for the Securities of such series, or exercising any trust or power conferred on such Trustee, with respect to the Securities of such series; provided that:

52

(1)   such direction shall not be in conflict with any rule of law or with this Indenture; and
 
(2)   such Trustee may take any other action deemed proper by such Trustee which is not inconsistent with such direction.
 
SECTION 513.	Waiver of Past Defaults .	
 
The Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of any series may on behalf of the Holders of all of the Securities of such series waive any past default hereunder with respect to such series and its consequences, except a default:
 
(1)   in the payment of the principal of (or premium, if any, on) or interest, if any, on any Security of such series; or
 
(2)   in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected.
 
Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.
 
SECTION 514.	Undertaking for Costs .	
 
All parties to this Indenture agree, and each Holder of any Security by his or her acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for the Securities of any series for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee for the Securities of any series, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any, on) or interest, if any, on any Security on or after the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on or after the Redemption Date).
 
SECTION 515.	Waiver of Stay or Extension Laws .  	
 
Each of the Company and the Guarantor covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and each of the Company and the Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee for the Securities of any series, but will suffer and permit the execution of every such power as though no such law had been enacted.

53

ARTICLE SIX
- THE TRUSTEE
 
SECTION 601.	Certain Duties and Responsibilities .	
 
(a)   Except during the continuance of an Event of Default with respect to the Securities of any series for which the Trustee is serving as such:
 
(1)   such Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against such Trustee; and
 
(2)   in the absence of bad faith on its part, such Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to such Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to such Trustee, such Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).
 
(b)   In case an Event of Default with respect to a series of Securities has occurred and is continuing, the Trustee for the Securities of such series shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.
 
(c)   No provision of this Indenture shall be construed to relieve the Trustee for the Securities of any series from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
 
(1)   this Subsection shall not be construed to limit the effect of Subsection (a) of this Section;
 
(2)   such Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that such Trustee was negligent in ascertaining the pertinent facts;
 
(3)   such Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Securities of any particular series, determined as provided in Section 512, relating to the time, method and place of conducting any proceeding for any remedy available to such Trustee, or exercising any trust or power conferred upon such Trustee, under this Indenture with respect to the Securities of that series; and

54

(4)   no provision of this Indenture shall require the Trustee for any series of Securities to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.
 
(d)   Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee for any series of Securities shall be subject to the provisions of this Section.
 
SECTION 602.	Notice of Defaults .	
 
Within 90 days after the occurrence of any default hereunder with respect to the Securities of any particular series, the Trustee for the Securities of such series shall transmit by mail to all Holders of Securities of that series, as their names and addresses appear in the Security Register for that series, notice of such default hereunder known to such Trustee, unless such default shall have been cured or waived; provided , however , that, except in the case of a default in the payment of the principal of (or premium, if any, on) or interest, if any, on any Security of that series or in the payment of any sinking fund installment with respect to Securities of that series, such Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of such Trustee in good faith determines that the withholding of such notice is in the interest of the Holders of Securities of that series; and provided , further , that in the case of any default of the character specified in Section 501(4) with respect to Securities of that series, no such notice to Holders shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of that series.
 
Promptly (and in any event within 5 Business Days) upon the Company or the Guarantor becoming aware of any default hereunder with respect to the Securities of any particular series, such party is required to deliver to the Trustee a statement specifying such default hereunder and the actions which the Company or the Guarantor proposes to take with respect to such default hereunder.
 
SECTION 603.	Certain Rights of Trustee .	
 
Subject to the provisions of Section 601:
 
(a)   the Trustee for any series of Securities may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

55

(b)   any request or direction of the Company or the Guarantor mentioned herein shall be sufficiently evidenced by a Company Request or Company Order of the Company or the Guarantor and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution of the Company or the Guarantor;
 
(c)   whenever in the administration of this Indenture such Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, such Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officer’s Certificate;
 
(d)   such Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
 
(e)   such Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders of Securities of any series pursuant to this Indenture for which it is acting as Trustee, unless such Holders shall have offered to such Trustee security or indemnity, reasonably satisfactory to it, against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;
 
(f)   such Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but such Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if such Trustee shall determine to make such further inquiry or investigation, it shall be entitled upon reasonable request to examine the books, records and premises of the Company, personally or by agent or attorney; and
 
(g)   such Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and such Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder .
 
SECTION 604.	Not Responsible for Recitals or Issuance of Securities .	
 
The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company and the Guarantor, and neither the Trustee for any series of Securities nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee for any series of Securities makes no representations as to the validity or sufficiency of this Indenture or of the Securities. Neither the Trustee for any series of Securities nor any Authenticating Agent shall be accountable for the use or application by the Company of Securities or the proceeds thereof.

56

SECTION 605.	May Hold Securities .	
 
The Trustee for any series of Securities, any Authenticating Agent, any Paying Agent, any Calculation Agent, any Security Registrar or any other agent of the Company, the Guarantor or such Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company or the Guarantor with the same rights it would have if it were not such Trustee, Authenticating Agent, Paying Agent, Calculation Agent, Security Registrar or such other agent.
 
SECTION 606.	Money Held in Trust .	
 
Money held by the Trustee for any series of Securities in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee for any series of Securities shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company or the Guarantor.
 
SECTION 607.	Compensation and Reimbursement .	
 
The Company agrees:
 
(1)   to pay to the Trustee for any series of Securities from time to time such compensation for all services rendered by it hereunder as shall be agreed upon in writing from time to time by the Company and such Trustee (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);
 
(2)   except as otherwise expressly provided herein, to reimburse the Trustee for any series of Securities upon its request for all reasonable expenses, disbursements and advances incurred or made by such Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the reasonable expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and
 
(3)   to indemnify such Trustee for, and to hold it harmless against, any and all loss, liability, damage, claim or expense (including taxes other than taxes based on the income of the Trustee) incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust or trusts hereunder, including the costs and expenses of defending itself against any claim (whether asserted by the Company, the Guarantor, a Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder.
 
The Trustee for any series of Securities shall have a lien prior to the Securities as to all property and funds held by such Trustee hereunder for any amount owing it or any predecessor Trustee pursuant to this Section 607, except with respect to funds held in trust for the benefit of the Holders of such particular Securities.

57

When the Trustee for any series of Securities incurs expenses or renders services in connection with an Event of Default specified in Section 501(5) or Section 501(6), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable federal or state bankruptcy, insolvency or other similar law.
 
The provisions of this Section shall survive the termination of this Indenture.
 
SECTION 608.	Disqualification; Conflicting Interests .	
 
If the Trustee for any series of Securities has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, such Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. In determining whether such Trustee has a conflicting interest as defined in Section 310(b) of the Trust Indenture Act with respect to the Securities of any series, there shall be excluded Securities of any particular series of Securities other than that series.
 
SECTION 609.	Corporate Trustee Required; Different Trustees for Different Series; Eligibility .	
 
There shall at all times be a Trustee hereunder for each series of Securities which shall be a corporation or bank organized and doing business under the laws of the United States of America, any State thereof, or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 subject to supervision or examination by federal or state authority. If such corporation or bank publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time such Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.
 
A different Trustee may be appointed by the Company for each series of Securities prior to the issuance of such Securities. If the initial Trustee for any series of Securities is to be other than Wells Fargo Bank, N.A., the Company and such Trustee shall, prior to the issuance of such Securities, execute and deliver an indenture supplemental hereto, which shall provide for the appointment of such Trustee as Trustee for the Securities of such series and shall add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees to be co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee.

58

No trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder.
 
SECTION 610.	Resignation and Removal; Appointment of Successor .	
 
(a)   No resignation or removal of the Trustee for the Securities of any series and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611.
 
(b)   The Trustee for the Securities of any series may resign at any time with respect to the Securities of such series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee for the Securities of such series within 30 days after the giving of such notice of resignation, the resigning Trustee may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
 
(c)   The Trustee for the Securities of any series may be removed at any time with respect to the Securities of such series by Act of the Holders of a majority in aggregate principal amount of the Outstanding Securities of such series, delivered to such Trustee and to the Company.
 
(d)   If at any time:
 
(1)   the Trustee for the Securities of any series shall fail to comply with Section 608 after written request thereof by the Company or by any Holder who has been a bona fide Holder of a Security of such series for at least six months; or
 
(2)   such Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder; or
 
(3)   such Trustee shall become incapable of acting or shall be adjudged bankrupt or insolvent or a receiver of such Trustee or of its property shall be appointed or any public officer shall take charge or control of such Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation;
 
then, in any such case, (i) the Company by a Board Resolution may remove such Trustee and appoint a successor Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of such Trustee and the appointment of a successor Trustee or Trustees. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee for the Securities of such series within 30 days after the giving of such notice of removal, the Trustee being removed may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series

59

(e)   If the Trustee for the Securities of any series shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for the Securities of any series for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Trustee with respect to the Securities of such series and shall comply with the applicable requirements of Section 611. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of such series shall not have been appointed by the Company pursuant to this Section 610, then a successor Trustee may be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee. If no successor Trustee for the Securities of such series shall have been so appointed by the Company or the Holders and shall have accepted appointment in the manner required by Section 611, and if such Trustee to be replaced is still incapable of acting, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
 
(f)   The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series by mailing written notice of such event by first-class mail, postage prepaid, to all Holders of Securities of such series as their names and addresses appear in the Security Register. Each notice shall include the name of the successor Trustee with respect to the Securities of that series and the address of its Corporate Trust Office.
 
SECTION 611.	Acceptance of Appointment by Successor .	
 
(a)   Every such successor Trustee appointed hereunder with respect to the Securities of any series shall execute, acknowledge and deliver to the Company, the Guarantor and the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company, the Guarantor or the successor Trustee, such retiring Trustee shall, upon receipt of payment of its charges, execute, and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

60

(b)   In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the Guarantor, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company, the Guarantor or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.
 
(c)   Upon request of any such successor Trustee, the Company and the Guarantor shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers, and trusts referred to in paragraph (a) or (b) of this Section, as the case may be.
 
(d)   No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee for the Securities of any series shall be qualified and eligible under this Article.
 
SECTION 612.	Merger, Conversion, Consolidation or Succession to Business .	
 
Any corporation into which the Trustee for the Securities of any series may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of such Trustee, shall be the successor of such Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee or the Authenticating Agent for such series then in office, any successor by merger, conversion or consolidation to such authenticating Trustee or Authenticating Agent, as the case may be, may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee or successor Authenticating Agent had itself authenticated such Securities.

61

SECTION 613.	Preferential Collection of Claims Against the Company or the Guarantor .	
 
If and when the Trustee of any series of Securities shall be or become a creditor of the Company or the Guarantor (or any other obligor upon the Securities), such Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).
 
SECTION 614.	Authenticating Agents .	
 
From time to time the Trustee of any series of Securities, in its sole discretion, may appoint one or more Authenticating Agents with respect to the Securities of such series, which may include the Company, the Guarantor or any Affiliate of the Company or the Guarantor, with power to act on the Trustee’s behalf and subject to its discretion in the authentication and delivery of Securities of such series or in connection with transfers and exchanges under Sections 304, 305, 306 and 1107 as fully to all intents and purposes as though such Authenticating Agent had been expressly authorized by those Sections of this Indenture to authenticate and deliver Securities of such series. For all purposes of this Indenture, the authentication and delivery of Securities of such series by an Authenticating Agent for such Securities pursuant to this Section shall be deemed to be authentication and delivery of such Securities “by the Trustee” for the Securities of such series. Any such Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $25,000,000 and, if other than the Company, the Guarantor or any Affiliate of the Company or the Guarantor, subject to supervision or examination by federal, state or District of Columbia authority. If such corporation publishes reports of condition at least annually pursuant to law or the requirements of such authority, then for the purposes of this Section the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent for any series of Securities shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.
 
Any corporation into which any Authenticating Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation or to which any Authenticating Agent shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of any Authenticating Agent, shall be the successor of such Authenticating Agent hereunder, if such successor corporation is otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the parties hereto or the Authenticating Agent or such successor corporation.
 
Any Authenticating Agent for any series of Securities may resign at any time by giving written notice of resignation to the Trustee for such series and to the Company. The Trustee for any series of Securities may at any time terminate the agency of any Authenticating Agent for such series by giving written notice of termination to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time any Authenticating Agent for any series of Securities shall cease to be eligible under this Section, the Trustee for such series may appoint a successor Authenticating Agent, which shall be acceptable to the Company, shall give written notice of such appointment to the Company and shall give written notice of such appointment to all Holders of Securities of such series with respect to which such Authenticating Agent will serve, as the names and addresses of such Holders appear on the Security Register. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

62

The Trustee for any series of Securities agrees to pay to the Authenticating Agent for such series from time to time reasonable compensation for its services, and such Trustee shall be entitled to be reimbursed for such payments, subject to Section 607.
 
If an appointment with respect to one or more series of Securities is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternate certificate of authentication in the following form:
 
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
 
WELLS FARGO BANK, N.A., as Trustee	
 	 	
By	 	
 	
As Authenticating Agent	
 	 	
By	 	
 	Authorized Signatory	

The provisions of Sections 309, 604 and 605 shall be applicable to any Authenticating Agent.
 
ARTICLE SEVEN
- HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY
 
SECTION 701.	Company to Furnish Trustee Names and Addresses of Holders .	
 
With respect to each particular series of Securities, the Company will furnish or cause to be furnished to the Trustee for the Securities of such series:
 
(a)   semi-annually, not later than 15 days after each Regular Record Date, or, in the case of any series of Securities on which semi-annual interest is not payable, not more than 15 days after such semi-annual dates as may be specified by such Trustee, a list, in such form as such Trustee may reasonably require, of the names and addresses of the Holders as of such Regular Record Date or semi-annual date, as the case may be; and

63

(b)   at such other times as such Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as specified in Clause (a) above as of a date not more than 15 days prior to the time such list is furnished;
 
provided, however, that so long as such Trustee is Security Registrar for any series of Securities, no such list shall be required to be furnished with respect to any such series.
 
SECTION 702.	Preservation of Information; Communications to Holders .	
 
(a)   The Trustee for each series of Securities shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to such Trustee as provided in Section 701 and the names and addresses of Holders received by such Trustee in its capacity as Security Registrar. Such Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished.
 
(b)   If three or more Holders of any particular series (herein referred to as “applicants”) apply in writing to the Trustee for the Securities of such series, and furnish to such Trustee reasonable proof that each such applicant has owned a Security for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders of Securities of such series with respect to their rights under this Indenture or under the Securities and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then such Trustee shall, within five business days after the receipt of such application, at its election, either :
 
(i) afford such applicants access to the information preserved at the time by such Trustee in accordance with Section 702(a); or
 
(ii) inform such applicants as to the approximate number of Holders of Securities of such series whose names and addresses appear in the information preserved at the time by such Trustee in accordance with Section 702(a), and as to the approximate cost of mailing to such Holders the form of proxy or other communication, if any, specified in such application.

64

If any such Trustee shall elect not to afford such applicants access to such information, such Trustee shall, upon the written request of such applicants, mail to each Holder of Securities of such series whose name and address appear in the information preserved at the time by such Trustee in accordance with Section 702(a) a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to such Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender such Trustee shall mail to such applicants and file with the Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of such Trustee, such mailing would be contrary to the best interest of the Holders or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If the Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, the Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, such Trustee shall mail copies of such material to all such Holders with reasonable promptness after the entry of such order and the renewal of such tender, otherwise such Trustee shall be relieved of any obligation or duty to such applicants respecting their application.
 
(c)   Every Holder of Securities of each series, by receiving and holding the same, agrees with the Company, the Guarantor and the Trustee for the Securities of such series that none of the Company, the Guarantor and such Trustee nor any agent of any of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 702(b), regardless of the source from which such information was derived, and that such Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 702(b).
 
(d)   The U.S. Depositary may grant proxies and otherwise authorize its participants which own the Global Securities to give or take any Act which a Holder is entitled to take under the Indenture; provided , however , that the U.S. Depositary has delivered a list of such participants to the Trustee for the Securities of such series.
 
SECTION 703.	Reports by Trustee .	
 
(a)   The Trustee for the Securities of each series shall transmit to Holders of Securities of each series for which such Trustee serves such reports concerning such Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. If required by Section 313(a) of the Trust Indenture Act, the Trustee for the Securities of each series shall, within sixty days after each May 15 following the date of this Indenture deliver to Holders of Securities of each series for which such Trustee serves a brief report, dated as of such May 15, which complies with the provisions of such Section 313(a).
 
(b)   A copy of each such report shall, at the time of such transmission to Holders of Securities of each particular series be filed by each particular Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company. The Company will promptly notify the Trustee in writing when any Securities are listed on any stock exchange or of any delisting thereof.

65

SECTION 704.	Reports by Company .	
 
(a)   The Company shall:
 
(1)   file with the Trustee for the Securities of each series, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or if the Company is not required to file information, documents or reports pursuant to either of said Sections, then it shall file with such Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act, in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations;
 
(2)   file with the Trustee for the Securities of such series and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and
 
(3)   transmit by mail to all Holders, as their names and addresses appear in the Security Register, within 30 days after the filing thereof with the Trustee for the Securities of such series, such summaries of any information, documents and reports required to be filed by the Company pursuant to paragraphs (1) and (2) of this Clause (a) as may be required by rules and regulations prescribed from time to time by the Commission.
 
(b)   the Guarantor shall:
 
(1)   file with the Trustee for the Securities of each series, within 15 days after the Guarantor is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Guarantor may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or if the Guarantor is not required to file information, documents or reports pursuant to either of said Sections, then it shall file with such Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act, in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations;

66

(2)   file with the Trustee for the Securities of such series and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Guarantor with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and
 
(3)   transmit by mail to all Holders, as their names and addresses appear in the Security Register, within 30 days after the filing thereof with the Trustee for the Securities of such series, such summaries of any information, documents and reports required to be filed by the Guarantor pursuant to paragraphs (1) and (2) of this Clause (b) as may be required by rules and regulations prescribed from time to time by the Commission.
 
Delivery of such reports, information and documents to the Trustee for the Securities of each series is for informational purposes only and such Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which such Trustee is entitled to rely exclusively on Officer’s Certificates).
 
ARTICLE EIGHT
- CONSOLIDATION, MERGER, CONVEYANCE, SALE OR LEASE
 
SECTION 801.	Company and Guarantor May Consolidate, Etc., on Certain Terms .	
 
(a)   The Company shall not consolidate, amalgamate or merge with or into any other corporation or corporations (whether or not affiliated with the Company) and the Company or its successor or successors shall not be a party or parties to successive consolidations, amalgamations or mergers and the Company shall not sell, convey or lease all or substantially all of its property to any other corporation (whether or not affiliated with the Company) authorized to acquire and operate the same, unless (i) upon any such consolidation, amalgamation, merger, sale, conveyance or lease, the due and punctual payment of the principal of (and premium, if any, on) and interest, if any, on all of the Securities, according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed by the Company shall be expressly assumed, by supplemental indenture reasonably satisfactory in form to the Trustee for each series of Securities, executed and delivered to each such Trustee by the corporation (if other than the Company) formed by such consolidation or amalgamation, or into which the Company shall have been merged, or by the corporation which shall have acquired or leased such property, and (ii) such corporation or company shall be a solvent corporation or company organized under the laws of the United States of America or a State thereof or the District of Columbia or Bermuda. The Company will not so consolidate, amalgamate or merge, or make any such sale, lease or other disposition, and the Company will not permit any other corporation to merge into the Company, unless immediately after the proposed consolidation, amalgamation, merger, sale, lease or other disposition, and after giving effect thereto, no default in the performance or observance by the Company or such successor corporation, as the case may be, of any of the terms, covenants, agreements or conditions contained in this Indenture shall have occurred and be continuing.

67

(b)   The Guarantor shall not consolidate, amalgamate or merge with or into any other corporation or corporations (whether or not affiliated with the Guarantor) and the Guarantor or its successor or successors shall not be a party or parties to successive consolidations, amalgamations or mergers and the Guarantor shall not sell, convey or lease all or substantially all of the property of the Guarantor to any other corporation (whether or not affiliated with the Guarantor) authorized to acquire and operate the same, unless (i) upon any such consolidation, amalgamation, merger, sale, conveyance or lease, the performance of the obligations under the Guarantee, and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed by the Guarantor shall be expressly assumed, by supplemental indenture reasonably satisfactory in form to the Trustee for each series of Securities, executed and delivered to each such Trustee by the corporation (if other than the Guarantor) formed by such consolidation or amalgamation, or into which the Guarantor shall have been merged, or by the corporation which shall have acquired or leased such property, and (ii) such corporation shall be a solvent corporation or company organized under the laws of the United States of America or a State thereof or the District of Columbia or Bermuda. Furthermore, the Guarantor will not so consolidate, amalgamate or merge, or make any such sale, lease or other disposition, and the Guarantor will not permit any other corporation to merge into it, unless immediately after the proposed consolidation, amalgamation, merger, sale, lease or other disposition, and after giving effect thereto, no default in the performance or observance by the Guarantor or such successor corporation, as the case may be, of any of the terms, covenants, agreements or conditions contained in this Indenture or the Guarantee shall have occurred and be continuing.
 
SECTION 802.	Securities to be Secured in Certain Events .	
 
Notwithstanding anything to the contrary contained in Section 801, if upon any such consolidation, amalgamation or merger, or upon any such sale, conveyance or lease, or upon any consolidation, amalgamation or merger of any Restricted Subsidiary, or upon the sale, conveyance or lease of all or substantially all the property of any Restricted Subsidiary to any other corporation, any Principal Property or any shares of stock or Funded Indebtedness of any Restricted Subsidiary owned immediately prior thereto would thereupon become subject to any Mortgage, the Company, together with the Guarantor, prior to such consolidation, amalgamation, merger, sale, conveyance or lease, will by indenture supplemental hereto secure the due and punctual payment of the principal of (and premium, if any, on) and interest, if any, on the Securities (together with, if the Guarantor shall so determine, any other indebtedness of or guarantee by the Guarantor, the Company or such other Restricted Subsidiary ranking equally with the Securities and then existing or thereafter created) by a Mortgage, the lien of which, upon completion of said merger, consolidation, amalgamation, sale, conveyance or lease, will rank prior to the lien of such Mortgage of such other corporation on all assets owned by the Guarantor, the Company or (if other than the Company) such other Restricted Subsidiary, as the case may be, immediately prior to such merger, consolidation, amalgamation, sale, conveyance or lease.

68

SECTION 803.	Successor Corporation to be Substituted .	
 
(a)   Upon any consolidation, amalgamation or merger of the Company with or into any other corporation or corporations or any sale, conveyance or lease of all or substantially all of the property of the Company to any other corporation or corporations in accordance with this Article Eight, the successor shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture and the Securities with the same effect as if such successor had been named as the Company herein and therein, and thereafter, except in the case of a lease, the Company as the predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Securities and the Company as the predecessor corporation may thereupon or at any time thereafter be dissolved, wound up or liquidated.
 
(b)   Subject to Section 801(b), upon any consolidation, amalgamation or merger of the Guarantor with or into any other corporation or corporations or any sale, conveyance or lease of all or substantially all of the property of the Guarantor to any other corporation or corporations in accordance with this Article Eight, the successor shall succeed to, and be substituted for, and may exercise every right and power of, the Guarantor under this Indenture, the Securities and the Guarantee with the same effect as if such successor had been named as the Guarantor herein and therein, and thereafter, except in the case of a lease, the Guarantor as predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Guarantee, and the Guarantor as the predecessor corporation may thereupon or at any time thereafter be dissolved, wound up or liquidated.
 
SECTION 804.	Opinion of Counsel to be Given to Trustee .	
 
The Trustee for each series of Securities, subject to Section 601, shall receive an Opinion of Counsel as conclusive evidence that any such consolidation, amalgamation, merger, sale, conveyance or lease and any such assumption complies with the provisions of this Article.
 
ARTICLE NINE
- SUPPLEMENTAL INDENTURES
 
SECTION 901.	Supplemental Indentures without Consent of Holders .	
 
Without the consent of any Holders, the Company, the Guarantor and the Trustee for the Securities of any or all series, at any time and from time to time, may enter into one or more indentures supplemental hereto, for any of the purposes set forth below in this Section 901. The terms of such supplemental indenture may be established by one or more duly appointed officers of the Company and one or more duly appointed officers of the Guarantor acting pursuant to authority granted to such officers by the Board of Directors of the Company and by the Board of Directors of the Guarantor. A supplemental indenture, in form reasonably satisfactory to the Trustee, may be entered into pursuant to this Section 901 for any of the following purposes:
 
(1)   to evidence the succession of another corporation to the Company or the Guarantor and the assumption by any such successor of the covenants of the Company herein and in the Securities or the assumption by any such successor of the covenants of the Guarantor herein and in the Guarantee; or

69

(2)   to add to the covenants of the Company or the Guarantor for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company or the Guarantor, as applicable; or
 
(3)   to add any additional Events of Default; or
 
(4)   to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons; or
 
(5)   to change or eliminate any of the provisions of this Indenture; provided ,   that any such change or elimination shall become effective only when there is no Security Outstanding of any series created prior to the execution of such supplemental indenture which is entitled to the benefit of such provisions; or
 
(6)   to secure the Securities; or
 
(7)   to establish the form or terms of Securities of any series as permitted by Sections 201 and 301; or
 
(8)   to establish the form or terms of a related Guarantee as permitted by Sections 201 and 206; or
 
(9)   to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611(b); or
 
(10)   to evidence and provide for the acceptance of appointment hereunder of a Trustee other than Wells Fargo Bank, N.A. as Trustee for a series of Securities and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 609; or
 
(11)   to provide for any rights of the Holders of Securities of any series to require the repurchase of Securities of such series from the Company; or
 
(12)   to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture; provided such action shall not adversely affect the interests of the Holders of Securities of any series in any material respect; or

70

(13)   to continue its qualification under the Trust Indenture Act or as may be necessary or desirable in accordance with amendments to the Trust Indenture Act; or
 
(14)   for any other reason specified pursuant to Section 301 with respect to the Securities of such series.
 
SECTION 902.	Supplemental Indentures with Consent of Holders .	
 
With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of any or all series affected by such supplemental indenture (voting as one class), by Act of said Holders delivered to the Company, the Guarantor and the Trustee of each such series of Securities, the Company, when authorized by or pursuant to a Board Resolution of its Board of Directors, the Guarantor, when authorized by or pursuant to a Board Resolution by the Guarantor’s Board of Directors, and each such Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby:
 
(1)   change the Stated Maturity of the principal of, or any installment of principal of or interest, if any, on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or release the Guarantor from any of its obligations under the Guarantee or modify such obligations otherwise than in accordance with the terms of this Indenture;
 
(2)   reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture or the consent of whose Holders is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture; or
 
(3)   modify any of the provisions of this Section, Section 513 or Section 1008, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided , however, that this Clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section and Section 1008, or the deletion of this proviso, in accordance with the requirements of Sections 609, 611(b), 901(9) and 901(10).

71

A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.
 
It shall not be necessary for any Act of Holders of any series of Securities under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.
 
SECTION 903.	Execution of Supplemental Indentures .	
 
In executing, or accepting the additional trusts created by, and supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee for any series of Securities shall receive, and (subject to Section 601) shall be fully protected in conclusively relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee for any series of Securities may, but shall not be obligated to, enter into any such supplemental indenture which affects such Trustee’s own rights, duties or immunities under this Indenture or otherwise.
 
SECTION 904.	Effect of Supplemental Indentures .	
 
Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes, and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.
 
SECTION 905.	Conformity with Trust Indenture Act .	
 
Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect.
 
SECTION 906.	Reference in Securities to Supplemental Indentures .	
 
Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee for the Securities of such series, bear a notation in form approved by such Trustee as to any matter provided for in such supplemental indenture. If the Company or the Guarantor shall so determine, new forms of the Securities of any series and the Guarantee endorsed thereon modified as to conform, in the opinion of the Trustee for the Securities of such series, the Company and the Guarantor, to any supplemental indenture may be prepared and executed by the Company and authenticated and delivered by such Trustee in exchange for Outstanding Securities of such series.

72

ARTICLE TEN
- COVENANTS
 
SECTION 1001.	Payment of Principal, Premium and Interest .	
 
The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of (and premium, if any, on) and interest, if any, on the Securities of that series in accordance with the terms of the Securities and this Indenture.
 
SECTION 1002.	Maintenance of Office or Agency .	
 
The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Guarantor will maintain an office or agency in each Place of Payment for any series of Securities where notices and demands to or upon the Guarantor in respect of the Securities of that series and this Indenture may be served. The Company and the Guarantor will give prompt written notice to the Trustee for Securities of that series of the location, and any change in the location, of such office or agency. If at any time the Company or the Guarantor shall fail to maintain any such required office or agency or shall fail to furnish the Trustee for the Securities of that series with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of such Trustee, and the Company and the Guarantor hereby appoint such Trustee as its agent to receive all such presentations, surrenders, notices and demands.
 
The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee for the Securities of each series of any such designation or rescission and of any change in the location of any such other office or agency.
 
SECTION 1003.	Money for Securities Payments to Be Held in Trust .	
 
If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of (and premium, if any, on) or interest, if any, on any of the Securities of that series, segregate and hold in trust for the benefit of the persons entitled thereto a sum sufficient to pay the principal (and premium, if any, on) or interest, if any, so becoming due until such sums shall be paid to such persons or otherwise disposed of as herein provided and will promptly notify the Trustee for the Securities of such series of its action or failure so to act.
 
Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of (and premium, if any, on) or interest, if any, on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any, on) or interest so becoming due, such sum to be held in trust for the benefit of the persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee for the Securities of such series) the Company will promptly notify such Trustee of its action or failure so to act.

73

The Company will cause each Paying Agent for any series of Securities other than the Trustee for the Securities of such series to execute and deliver to such Trustee an instrument in which such Paying Agent shall agree with such Trustee, subject to the provisions of this Section, that such Paying Agent will:
 
(1)   hold all sums held by it for the payment of the principal of (and premium, if any, on) or interest, if any, on Securities of that series in trust for the benefit of the persons entitled thereto until such sums shall be paid to such persons or otherwise disposed of as herein provided;
 
(2)   give such Trustee notice of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment of principal of (and premium, if any, on) or interest, if any, on the Securities of that series; and
 
(3)   at any time during the continuance of any such default, upon the written request of such Trustee, forthwith pay to such Trustee all sums so held in trust by such Paying Agent.
 
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee for the Securities of any series all sums held in trust by the Company or such Paying Agent, such sums to be held by such Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to such Trustee, such Paying Agent shall be released from all further liability with respect to such money.
 
Any money deposited with the Trustee or any Paying Agent for the Securities of any series, or then held by the Company or the Guarantor, in trust for the payment of the principal of (and premium, if any, on) or interest, if any, on any Security of any series and remaining unclaimed for two years after such principal (and premium, if any) or interest has become due and payable shall be paid to the Company or the Guarantor on Company Request, or, if then held by the Company or the Guarantor, shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company or the Guarantor, as the case may be, for payment thereof, and all liability of such Trustee or such Paying Agent with respect to such trust money, and all liability of the Company or the Guarantor, as the case may be, as trustee thereof, shall thereupon cease; provided, however, that such Trustee or such Paying Agent, before being required to make any such repayment, shall at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the City, County and State of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company or the Guarantor, as the case may be.

74

SECTION 1004.	Limitation on Liens .  	
 
(a)   The Guarantor covenants and agrees for the benefit of each series of Securities, other than any series established by or pursuant to a Board Resolution of the Guarantor or in one or more supplemental indentures hereto which specifically provides otherwise, that it will not, and will not permit any Restricted Subsidiary to, create, assume or guarantee any indebtedness for money borrowed secured by a Mortgage (i) on any Principal Property of the Guarantor or of a Restricted Subsidiary or (ii) on any shares or Funded Indebtedness of a Restricted Subsidiary (whether such Principal Property, shares or Funded Indebtedness are now owned or hereafter acquired) without, in any such case, effectively providing concurrently with the creation, assumption or guaranteeing of such indebtedness that the Securities (together, if the Guarantor shall so determine, with any other indebtedness then or thereafter existing, created, assumed or guaranteed by the Guarantor or such Restricted Subsidiary ranking equally with the Securities) shall be secured equally and ratably with (or prior to) such indebtedness; excluding, however, from the foregoing any indebtedness secured by a Mortgage (including any extension, renewal or replacement, or successive extensions, renewals or replacements, of any Mortgage hereinafter specified or any indebtedness secured thereby, without increase of the principal of such indebtedness or expansion of the collateral securing such indebtedness):
 
(1)   on property, shares or Funded Indebtedness of any corporation existing at the time such corporation becomes a Restricted Subsidiary; or
 
(2)   on property existing at the time of acquisition thereof by the Guarantor or a Restricted Subsidiary, or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price thereof or construction or improvements thereon, which indebtedness is incurred by the Guarantor or a Restricted Subsidiary prior to, at the time of or within 180 days after the later of the acquisition, the completion of construction (including any improvements on an existing property) and the commencement of commercial operation of such property; provided, however, that in the case of any such acquisition, construction or improvement the Mortgage shall not apply to any property theretofore owned by the Guarantor or a Restricted Subsidiary, other than, in the case of any such construction or improvement, any theretofore unimproved real property on which the property so constructed, or the improvement, is located; or
 
(3)   on property, shares or Funded Indebtedness of a corporation existing at the time such corporation is merged into or consolidated with the Guarantor or a Restricted Subsidiary, or at the time of a sale, lease or other disposition of the properties of a corporation as an entirety or substantially as an entirety to the Guarantor or a Restricted Subsidiary; or

75

(4)   on property of a Restricted Subsidiary to secure indebtedness of such Restricted Subsidiary to the Guarantor or another Restricted Subsidiary; or
 
(5)   on property of the Guarantor or a Restricted Subsidiary in favor of the United States of America or any State thereof or Bermuda, or any department, agency or instrumentality or political subdivision of the United States of America or any State thereof or Bermuda, to secure partial, progress, advance or other payments pursuant to any contract or statute or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or the cost of constructing or improving the property subject to such Mortgage; or
 
(6)   existing at the date of this Indenture;
 
provided, however, that any Mortgage permitted by any of the foregoing Clauses (1), (2), (3) and (5) of this Section 1004(a) shall not extend to or cover any property of the Guarantor or such Restricted Subsidiary, as the case may be, other than the property specified in such Clauses and improvements thereto.
 
(b)   Notwithstanding the provisions of Subsection (a) of this Section 1004, the Guarantor or any Restricted Subsidiary may create, assume or guarantee secured indebtedness for money borrowed which would otherwise be prohibited in said Subsection (a) in an aggregate amount which, together with all other such indebtedness for money borrowed of the Guarantor and its Restricted Subsidiaries and the Attributable Debt of the Guarantor and its Restricted Subsidiaries in respect of Sale and Leaseback Transactions (as defined in Section 1005) existing at such time (other than Sale and Leaseback Transactions entered into prior to the date of this Indenture and Sale and Leaseback Transactions the proceeds of which have been applied in accordance with Clause (b) of Section 1005), does not at the time exceed 10% of the shareholders’ equity in the Guarantor and its consolidated Subsidiaries, as shown on the audited consolidated balance sheet contained in the latest annual report to shareholders of the Guarantor.
 
(c)   For the purposes of this Article Ten,
 
(1)   the term “Attributable Debt” shall mean, as of any particular time, the then present value of the total net amount of rent required to be paid under such lease during the remaining term thereof (excluding any renewal term unless the renewal is at the option of the lessor) computed by discounting from the respective due dates to such date such total net amount of rent at the actual interest factor included in such rent, or, if such interest factor cannot readily be determined, at the rate per annum borne by the initial series of Securities, except that if no interest is payable in respect of the initial series of Securities or if such rate is not fixed then at the rate of 8⅜% per annum. The net amount of rent required to be paid for any such period shall be the aggregate amount of the rent payable by the lessee with respect to such period after excluding amounts required to be paid on account of, or measured or determined by, any variable factor, including, without limitation, the cost-of-living index and costs of maintenance and repairs, insurance, taxes, assessments, water rates and similar charges and after excluding any portion of rentals based on a percentage of sales made by the lessee. In the case of any lease which is terminable by the lessee upon the payment of a penalty, such net amount shall also include the amount of such penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated;

76

(2)   the term “shareholders’ equity in the Guarantor and its consolidated Subsidiaries” shall mean the share capital, share premium, contributed surplus and retained earnings of the Guarantor and its consolidated Subsidiaries, excluding the cost of shares of the Guarantor held by its Affiliates, all as determined in accordance with U.S. generally accepted accounting principles; and
 
(3)   the term “Mortgage” on any specified property shall mean any mortgage, lien, pledge, charge or other security interest or encumbrance of any kind in respect of such property.
 
SECTION 1005.	Limitation on Sale and Leaseback Transactions .  	
 
The Guarantor covenants and agrees for the benefit of each series of Securities, other than any series established by or pursuant to a Board Resolution of the Guarantor or in one or more supplemental indentures hereto which specifically provides otherwise, that it will not, and will not permit any Restricted Subsidiary to, enter into any arrangement with any person for the leasing by the Guarantor or a Restricted Subsidiary (except for leases for a term of not more than three years and for leases of a part of a Principal Property which has been sold, for use in connection with the winding up or termination of the business conducted on such Principal Property, and except, in the case of a Restricted Subsidiary, a lease to the Guarantor or another Restricted Subsidiary) of any Principal Property (whether now owned or hereafter acquired), which Principal Property has been or is intended to be sold or transferred by the Guarantor or such Restricted Subsidiary to such person (herein referred to as a “Sale and Leaseback Transaction”), unless (a) the Guarantor or such Restricted Subsidiary would be entitled, pursuant to the provisions of Section 1004, to incur indebtedness secured by a Mortgage on such Principal Property without equally and ratably securing the Securities, or (b) the Guarantor shall (and in any such case the Guarantor covenants that it will) apply within 180 days of the effective date of any such Sale and Leaseback Transaction an amount equal to the fair value (as determined by its Board of Directors) of such Principal Property so leased (i) to the retirement (other than by payment at maturity or to satisfy the mandatory requirements of any sinking, purchase or analogous fund or prepayment provision) of the Securities or other Funded Indebtedness of the Guarantor or any Restricted Subsidiary ranking on a parity with the Securities, provided , however , that the amount to be applied to the retirement of any Funded Indebtedness as provided under this Clause (i) shall be reduced by (x) the principal amount of any Securities delivered within 180 days after such sale or transfer to the Trustee for the Securities of such series for retirement and cancellation and (y) the principal amount of other Funded Indebtedness ranking on a parity with the Securities voluntarily retired by the Guarantor within 180 days after such sale or transfer; or (ii) to the purchase, improvement or construction of properties which are Principal Properties, provided , that if only a portion of such proceeds is designated as a credit against such purchase, improvement or construction, the Guarantor shall apply an amount equal to the remainder as provided in Clause (i); and promptly after the expiration of such 180-day period the Guarantor shall have delivered to the Trustee for the Securities of such series an Officer’s Certificate setting forth in reasonable detail all material facts necessary to show compliance with this Subsection.

77

SECTION 1006.	Defeasance of Certain Obligations .  	
 
Each of the Company and the Guarantor may omit to comply with, and shall have no liability in respect of, any term, provision or condition set forth in Sections 802, 1004 and 1005 (and each of the Company and the Guarantor may omit to comply with, and shall have no liability in respect of any other provision or condition specified pursuant to Section 301(14) for such Securities) with respect to the Securities of any series whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant, to any other provision herein or in any other document and such omission to comply shall not constitute a Default or Event of Default under Section 501(4) or otherwise, as the case may be; provided that the following conditions shall have been satisfied:
 
(1)   Either the Company or the Guarantor has deposited or caused to be irrevocably deposited (except as provided in Section 402(c) and the last paragraph of Section 1003) with the Trustee for the Securities of such series (specifying that each deposit is pursuant to this Section 1006) as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Securities of such series, (i) money in an amount, or (ii) (except as provided in a supplemental indenture with respect to such series) if Securities of such series are not subject to repurchase at the option of such Holders, (A) U.S. Government Obligations which through the payment of interest and principal in respect thereof in accordance with their terms will provide not later than one day before the due date of any payment referred to in Clause (x) or (y) of this subparagraph (1) money in an amount, or (B) a combination of the foregoing, sufficient, in the opinion of a nationally recognized firm of independent certified public accountants expressed in a written certification thereof delivered to such Trustee, to pay and discharge (x) the principal of (and premium, if any, on) and each installment of principal of (and premium, if any, on) and interest, if any, on the Outstanding Securities of such series on the Stated Maturity of such principal or installment of principal or interest or to and including the Redemption Date irrevocably designated by the Company or the Guarantor, as the case may be, pursuant to subparagraph (4) of this Section and (y) any mandatory sinking fund payments applicable to the Securities of such series on the day on which such payments are due and payable in accordance with the terms of the Indenture and of the Securities of such series;
 
(2)   No Event of Default or event which, with notice or lapse of time or both, would become an Event of Default (including by reason of such deposit) with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit;

78

(3)   The Company or the Guarantor, as the case may be, shall have delivered to such Trustee an Opinion of Counsel to the effect that Holders of the Securities of such series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance of certain obligations and that no Event of Default or default shall have occurred and be continuing; and
 
(4)   If the Company or the Guarantor has deposited or caused to be deposited money or U.S. Government Obligations or a combination thereof to pay or discharge the principal of (and premium, if any, on) and interest, if any, on the Outstanding Securities of a series to and including a Redemption Date on which all of the Outstanding Securities of such series are to be redeemed, such Redemption Date shall be irrevocably designated by a Board Resolution of the Company or the Guarantor, as the case may be, or delivered to such Trustee on or prior to the date of deposit of such money or U.S. Government Obligations, and such Board Resolution shall be accompanied by an irrevocable Company Request that such Trustee give notice of such redemption in the name and at the expense of the Company or the Guarantor, as the case may be, and not less than 30 nor more than 60 days prior to such Redemption Date in accordance with Section 1104.
 
SECTION 1007.	Statement by Officer as to Default .	
 
Each of the Company and the Guarantor will deliver to the Trustee for each series of Securities, on or before May 15 in each year ending after the date hereof, an Officer’s Certificate (one of the signatories of which shall be the principal executive officer, principal accounting officer or principal financial officer of the Company) stating that in the course of the performance by such signer of his or her duties as an officer of the Company or the Guarantor, as the case may be, he would normally have knowledge of any default (without regard to periods of grace or notice requirements) by the Company or the Guarantor in the performance and observance of any of the covenants contained in this Indenture, and stating whether or not he has knowledge of any such default and, if so, specifying each such default of which such signer has knowledge and the nature thereof.
 
The Company and the Guarantor each covenant to deliver to the Trustee, for each series of Securities, as soon as possible and in any event within five Business Days after the Company or the Guarantor, as the case may be, becomes aware of the occurrence of any Event of Default or an event which, with notice or the lapse of time or both, would constitute an Event of Default, an Officer’s Certificate setting forth the details of such Event of Default or default and the action which the Company or the Guarantor, as the case may be, proposes to take with respect thereto.

79

SECTION 1008.	Waiver of Certain Covenants .	
 
Each of the Company and the Guarantor may omit in any particular instance to comply with any term, provision or condition set forth in Sections 802, 1004 and 1005 (and each of the Company and the Guarantor may omit in any particular instance to comply with any term, provision or condition specified pursuant to Section 301(14) for such Securities) if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of all series affected by such omission (voting as one class) shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the Guarantor, as the case may be, and the duties of the Trustee for the Securities of each series in respect of any such term, provision or condition shall remain in full force and effect.
 
SECTION 1009.	Calculation of Original Issue Discount .	
 
The Company shall file with the Trustee for the Securities of each series promptly at the end of each calendar year (i) a written notice specifying the amount of original issue discount (including daily rates and accrual periods) accrued on the Outstanding Securities as of the end of such year and (ii) such other specific information relating to such original issue discount as may then be relevant under the Internal Revenue Code of 1986, as amended from time to time.
 
ARTICLE ELEVEN
- REDEMPTION OF SECURITIES
 
SECTION 1101.	Applicability of Article .	
 
Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for Securities of any series) in accordance with this Article.
 
SECTION 1102.	Election to Redeem; Notice to Trustee .	
 
The election of the Company to redeem any Securities of any series shall be evidenced by an Officer’s Certificate. In case of any redemption at the election of the Company of the Securities of any series, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be reasonably satisfactory to the Trustee for the Securities of such series), notify such Trustee of such Redemption Date and of the principal amount of Securities of such series to be redeemed, such notice to be accompanied by a written statement signed by an authorized officer of the Company stating that no defaults in the payment of interest or Events of Default with respect to the Securities of that series have occurred (which have not been waived or cured). In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee for the Securities of such series with an Officer’s Certificate evidencing compliance with such restriction.
 
SECTION 1103.	Selection by Trustee of Securities to Be Redeemed .	
 
If less than all the Securities of any series are to be redeemed, the particular Securities of that series to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee for the Securities of such series, from the Outstanding Securities of such series not previously called for redemption, by such method as such Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of that series.

80

Securities shall be excluded from eligibility for selection for redemption if they are identified by registration and certificate number in a written statement signed by an authorized officer of the Company and delivered to the Trustee for the Securities of such series at least 60 days prior to the Redemption Date as being owned of record and beneficially by, and not pledged or hypothecated by either (a) the Company or the Guarantor or (b) an entity specifically identified in such written statement which is an Affiliate of the Company or the Guarantor.
 
The Trustee for the Securities of such series shall promptly notify the Company and the Guarantor in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.
 
For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.
 
SECTION 1104.	Notice of Redemption .	
 
Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his or her address appearing in the Security Register.
 
All notices of redemption shall identify the Securities (including CUSIP numbers) to be redeemed and shall state:
 
(1)   the Redemption Date;
 
(2)   the Redemption Price;
 
(3)   if less than all the Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption, the principal amounts) of the particular Securities to be redeemed;
 
(4)   that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date;
 
(5)   the place or places where such Securities are to be surrendered for payment of the Redemption Price; and
 
(6)   that the redemption is for a sinking fund, if such is the case.

81

Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company’s written request and expense, by the Trustee for such Securities in the name and at the expense of the Company.
 
SECTION 1105.	Deposit of Redemption Price .	
 
At least one Business Day prior to any Redemption Date, the Company or the Guarantor shall deposit with the Trustee for the Securities to be redeemed or with a Paying Agent (or, if the Company or the Guarantor is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date (to the extent that such amounts are not already on deposit at such time in accordance with the provisions of Section 401, 403 or 1006).
 
SECTION 1106.	Securities Payable on Redemption Date .	
 
Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued and unpaid interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued and unpaid interest to the Redemption Date; provided, however, that installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307.
 
If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.
 
SECTION 1107.	Securities Redeemed in Part .	
 
Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee for such Security so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and such Trustee duly executed by, the Holder thereof or his or her attorney duly authorized in writing), and the Company shall execute, and such Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series, and having endorsed thereon the Guarantee executed by the Guarantor of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.
 
SECTION 1108.	Offer to Redeem Upon Change of Control Triggering Event .	
 
Upon the occurrence of a Change of Control Triggering Event, unless the Company has previously exercised its right to redeem the Securities in full, each Holder of Securities shall have the right to require the Company to purchase all or a portion of such Holder’s Securities pursuant to the offer described below (the “Change of Control Offer”) at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase, subject to the rights of Holders of Securities on the relevant record date to receive interest due on the relevant interest payment date.

82

Within 30 days following the date upon which the Change of Control Triggering Event occurred, or at the Company’s option, prior to any Change of Control but after the public announcement of the pending Change of Control, the Company shall be required to send, by first class mail, a notice to each Holder of Securities, with a copy to the Trustee, which notice shall govern the terms of the Change of Control Offer. Such notice shall state:
 
(i)(a) if mailed following the date upon which a Change of Control Triggering Event has occurred, that a Change of Control Triggering Event has occurred and that such Holder of Securities has the right to require the Company to purchase all or a portion of such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of Securities of record on the relevant record date to receive interest on the relevant interest payment date), or (b) if mailed prior to any Change of Control but after the public announcement of a pending Change of Control, that a Change of Control is pending and, upon the occurrence of a Change of Control Triggering Event, such Holder of Securities has the right to require the Company to purchase all or a portion of such Holder’s Securities at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of Securities of record on the relevant record date to receive interest on the relevant interest payment date) and that the Change of Control Offer is conditioned on the Change of Control being consummated on or prior to the Change of Control Payment Date (as defined below);

(ii) the circumstances and relevant facts regarding such Change of Control Triggering Event;

(iii) the purchase date, which must be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by law (the “Change of Control Payment Date”); and

(iv) the instructions determined by the Company, consistent with this Section, that a Holder of Securities must follow in order to have its Securities purchased.
 
Holders electing to have Securities purchased pursuant to a Change of Control Offer shall be required to surrender their Securities, with the form provided in Section 203 entitled “Option of Holder to Elect Purchase” on the reverse of the Securities completed, to the Paying Agent at the address specified in the notice, or transfer their Securities to the Paying Agent by book-entry transfer pursuant to the applicable procedures of the Paying Agent, prior to the close of business on the third Business Day prior to the Change of Control Payment Date. Holders of Securities shall be entitled to withdraw their election if the Paying Agent receives not later than one Business Day prior to the purchase date a telegram, telex facsimile transmission or letter setting forth the name of the Holder of Securities and a statement that such Holder is withdrawing its election to have such Security purchased.

83

On the Change of Control Payment Date, the Company will, to the extent lawful:
 
 	1.	accept for payment all Securities (or portions of Securities) properly tendered pursuant to the Change of Control Offer;	
 
 	2.	deposit with the Paying Agent an amount equal to the aggregate payment in respect of all Securities (or portions of Securities) properly tendered pursuant to the Change of Control Offer; and	
 
 	3.	deliver or cause to be delivered to the Trustee the Securities properly accepted for purchase, together with an Officer’s Certificate stating the aggregate principal amount of Securities (or portions of Securities) being purchased.	
 
The Paying Agent will promptly mail to each Holder of properly tendered Securities the purchase price for the Securities, and the Trustee will promptly authenticate and mail (or cause to be transferred by book-entry) to each such Holder new Securities equal in principal amount to any unpurchased portion of any Securities surrendered; provided , that each new Security will be in a principal amount of $2,000 or an integral multiple of $1,000 thereof. A Security shall be deemed to have been accepted for purchase at the time the Paying Agent mails or delivers payment therefor to the Surrendering Holder.
 
The Company shall not be required to make a Change of Control Offer if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements in this Section 1108 for such an offer made by the Company and such third party purchases all properly tendered Securities not withdrawn under its offer.
 
The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the purchase of the Securities as a result of a Change of Control Triggering Event. To the extent that the provisions of any such securities laws or regulations conflict with the Change of Control Offer provisions of the Securities, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the Change of Control Offer provisions of the Securities by virtue of such conflict.
 
ARTICLE TWELVE
- SINKING FUNDS
 
SECTION 1201.	Applicability of Article .	
 
The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 301 for Securities of such series.
 
The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment.” If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series.

84

SECTION 1202.	Satisfaction of Sinking Fund Payments with Securities .	
 
In lieu of making all or any part of any mandatory sinking fund payment with respect to any series of Securities in cash, the Company may at its option (a) deliver to the Trustee for such Securities, Securities of such series theretofore purchased or otherwise acquired (except upon redemption pursuant to the mandatory sinking fund) by the Company or receive credit for Securities of such series (not previously so credited) theretofore purchased or otherwise acquired (except as aforesaid) by the Company and delivered to such Trustee for cancellation pursuant to Section 309, (b) receive credit for optional sinking fund payments (not previously so credited) made pursuant to this Section, or (c) receive credit for Securities of such series (not previously so credited) redeemed by the Company through any optional redemption provision contained in the terms of such series. Securities so delivered or credited shall be received or credited by such Trustee at the sinking fund redemption price specified in such Securities.
 
SECTION 1203.	Redemption of Securities for Sinking Fund .	
 
Not less than 60 days prior to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee for the Securities of such series an Officer’s Certificate (which need not contain the statements required by Section 102) stating that no defaults in the payment of interest, if any, with respect to Securities of that series and no Events of Default with respect to Securities of that series have occurred (which in either case have not been waived or cured) and (a) specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, (b) whether or not the Company intends to exercise its right, if any, to make an optional sinking fund payment with respect to such series on the next ensuing sinking fund payment date and, if so, the amount of such optional sinking fund payment, and (c) the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of that series pursuant to Section 1202, and will also deliver to such Trustee any Securities to be so delivered. Such written statement shall be irrevocable and upon its receipt by such Trustee the Company shall become unconditionally obligated to make all the cash payments or payments therein referred to, if any, on or before the next succeeding sinking fund payment date. Failure of the Company, on or before any such 60 th day, to deliver such written statement and Securities specified in this paragraph, if any, shall not constitute a default but shall constitute, on and as of such date, the irrevocable election of the Company (i) that the mandatory sinking fund payment for such series due on the next succeeding sinking fund payment date shall be paid entirely in cash without the option to deliver or credit Securities of such series in respect therefor and (ii) that the Company will make no optional sinking fund payment with respect to such series as provided in this Section.
 
Not less than 30 days before each such sinking fund payment date the Trustee for any series of Securities shall select the Securities of such series to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 1104. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 1105, 1106 and 1107.

85

The Trustee for any series of Securities shall not redeem or cause to be redeemed any Security of such series with sinking fund moneys or mail any notice of redemption of Securities of such series by operation of the sinking fund during the continuance of a default in payment of interest with respect to Securities of that series or an Event of Default with respect to the Securities of that series except that, where the mailing of notice of redemption of any Securities shall theretofore have been made, such Trustee shall redeem or cause to be redeemed such Securities; provided , that it shall have received from the Company a sum sufficient for such redemption. Except as aforesaid, any moneys in the sinking fund for such series at the time when any such default or Event of Default, shall occur, and any moneys thereafter paid into the sinking fund, shall, during the continuance of such default or Event of Default, be deemed to have been collected under Article Five and held for the payment of all such Securities. In case such Event of Default shall have been waived as provided in Section 513 or the default or Event of Default cured on or before the 60 th day preceding the sinking fund payment date, such moneys shall thereafter be applied on the next succeeding sinking fund payment date in accordance with this Section to the redemption of such Securities.
 
ARTICLE THIRTEEN
- GUARANTEE
 
SECTION 1301.	Guarantee .	
 
(a)   Subject to the provisions of this Article Thirteen and for good and valuable consideration, the receipt of which is hereby acknowledged, the Guarantor hereby fully and unconditionally guarantees to each Holder of a Security of each series authenticated and delivered by the Trustee for such Securities hereunder and to such Trustee for itself and on behalf of each such Holder, the due and punctual payment of principal of (and premium, if any, on) and interest on the Securities when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, and all other amounts owed under this Indenture, according to the terms thereof and of this Indenture. In case of the failure of the Company promptly to make any such payment of principal (and premium, if any, on) or interest, the Guarantor hereby agrees to make any such payment to be made promptly when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Company.

86

(b)   The Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute and unconditional, joint and several, irrespective of, and shall be unaffected by any failure to enforce the provisions of such Security or this Indenture, or any waiver, modification or indulgence granted to the Company with respect thereto, by the Holder of such Security or the Trustee for the Securities of such series or any other circumstance which may otherwise constitute a legal or equitable discharge of a surety or guarantor; provided , however , that, notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of the Guarantor increase the principal amount of such Security, or increase the interest rate thereon, or increase any premium payable upon redemption thereof, or alter the Stated Maturity thereof, or increase the principal amount of any Original Issue Discount Security that would be due and payable upon a declaration of acceleration or the maturity thereof pursuant to Article Five of this Indenture. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to such Security or the indebtedness evidenced thereby or with respect to any sinking fund or analogous payment required under such Security and all demands whatsoever, and covenants that this Guarantee will not be discharged except by payment in full of the principal of (and premium, if any, on) and interest on such Security or as otherwise set forth in this Indenture; provided , that if any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantor or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or the Guarantor any amount paid either to the Trustee or such Holder, the Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.
 
(c)   The Guarantor shall be subrogated to all rights of the Holder of such Security and the Trustee for the Securities of such series against the Company in respect of any amounts paid to such Holder by the Guarantor pursuant to the provisions of this Guarantee; provided , however , that the Guarantor shall not be entitled to enforce or to receive any payments arising out of or based upon such right of subrogation until the principal of (and premium, if any, on) and interest on all Securities of the same series issued under the Indenture shall have been paid in full.
 
SECTION 1302.	Execution and Delivery of Guarantee .	
 
The Guarantee to be endorsed on the Securities of each series shall include the terms of the Guarantee set forth in Section 1301 and any other terms that may be set forth in the form established pursuant to Section 206 with respect to such series. The Guarantor hereby agrees to execute the Guarantee, in a form established pursuant to Section 206, to be endorsed on each Security authenticated and delivered by the Trustee for the Securities of such series.
 
The Guarantee shall be executed in accordance with Section 303. The delivery of any Security by the Trustee for the Securities of such series, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee endorsed thereon on behalf of the Guarantor. The Guarantor hereby agrees that its Guarantee set forth in Section 1301 shall remain in full force and effect notwithstanding any failure to endorse a Guarantee on any Security.
 
SECTION 1303.	Notice to Trustee .	
 
The Guarantor shall give prompt written notice to the Trustee for the Securities of such series of any fact known to the Guarantor which prohibits the making of any payment to or by such Trustee in respect of the Guarantee pursuant to the provisions of this Article Thirteen other than any agreement in effect on the date hereof.

87

SECTION 1304.	This Article Not to Prevent Events of Default .	
 
The failure to make a payment on account of principal of (and premium, if any, on) or interest on the Securities by reason of any provision of this Article will not be construed as preventing the occurrence of an Event of Default.
 
SECTION 1305.	Amendment, Etc .	
 
No amendment, modification or waiver of any provision of this Indenture relating to the Guarantor or consent to any departure by the Guarantor or any other Person from any such provision will in any event be effective unless it is signed by the Guarantor and the Trustee for the Securities of such series.
 
SECTION 1306.	Limitation on Liability .	
 
With respect to the Guarantor, the obligations of the Guarantor hereunder will be limited to the maximum amount, as will not result in the obligations of the Guarantor under the Guarantee constituting a fraudulent conveyance or fraudulent transfer, after giving effect to all other relevant liabilities of the Guarantor.
 
[ Remainder of page left intentionally blank. ]

88

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

INGERSOLL-RAND GLOBAL HOLDING
COMPANY LIMITED, as the Company	
 	 	
By:	/s/ David S. Kuhl	
 	Name: David S. Kuhl	
 	Title: Vice President and Treasurer	
 	 	
INGERSOLL-RAND COMPANY LIMITED,
as Guarantor	
 	 	
By:	/s/ David S. Kuhl	
 	Name: David S. Kuhl	
 	Title: Vice President and Treasurer	
 	 	
By:	/s/ Barbara A. Santoro	
 	Name: Barbara A. Santoro	
 	Title: Vice President and Secretary	
 	 	
WELLS FARGO BANK, N.A., as Trustee	
 	 	
By:	/s/ Raymond Dellicolli	
 	Title: Vice President	

 

Exhibit 23.1

Consent of Analysis, Research & Planning Corporation

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-88580 and No. 333-152954) and S-8 (No. 333-67257, No. 333-35229, No. 333-00829, No. 333-19445, No. 333-42133, No. 333-128260, No. 333-130047, No. 333-143716, No. 333-149396, No. 333-151607 and No. 333-149537) of Ingersoll-Rand Company Limited (the “Company”) of (i) the references to us in the form and context in which they appear in such registration statements, and (ii) the use of or reliance on the information contained in our report to the Company to assist the Company in setting forth an estimate of the Company’s total liability for pending and unasserted future asbestos-related claims in such registration statements.

November 7, 2008

Analysis, Research & Planning Corporation	
 	 	
By:        	       /s/ Thomas Vasquez, Ph.D	
 	Name:   Thomas Vasquez, Ph.D	
 	Title:     Vice President	

 

 

Exhibit 31.1

CERTIFICATION

I, Herbert L. Henkel, certify that:

1.	I have reviewed the quarterly report on Form 10-Q of Ingersoll-Rand Company Limited for the three and nine months ended September 30, 2008;	

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	

4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

 	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

 	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

 	c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

 	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):	

 	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and	

 	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.	

Date: November 7, 2008	/s/ Herbert L. Henkel	
 	Herbert L. Henkel	
 	Principal Executive Officer	

 

 

Exhibit 31.2

CERTIFICATION

I, Steven R. Shawley, certify that:

1.	I have reviewed the quarterly report on Form 10-Q of Ingersoll-Rand Company Limited for the three and nine months ended September 30, 2008;	

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	

4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

 	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

 	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

 	c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

 	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):	

 	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and	

 	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.	

Date: November 7, 2008	/s/ Steven R. Shawley	
 	Steven R. Shawley	
 	Principal Financial Officer	

 

 

Exhibit 32

Section 1350 Certifications
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of Ingersoll-Rand Company Limited (the Company), does hereby certify that:

The Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2008 (the Form 10-Q) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Herbert L. Henkel	
Herbert L. Henkel	
Principal Executive Officer	
November 7, 2008	
 	
/s/ Steven R. Shawley	
Steven R. Shawley	
Principal Financial Officer	
November 7, 2008