20-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________

FORM 20-F

o REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2011

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

o SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

___________________________

Commission File Number: 1-33659

COSAN LIMITED

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant’s name into English)

Bermuda

(Jurisdiction of incorporation or organization)

Av. Juscelino Kubitschek, 1327 – 4th floor

São Paulo, SP 04543-000, Brazil

(55)(11) 3897-9797

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Marcelo Eduardo Martins

(55)(11) 3897-9797

ri@cosan.com.br

Av. Juscelino Kubitschek, 1327 – 4th floor

São Paulo, SP 04543-000, Brazil

(Name, telephone, e-mail and/or facsimile number and address of Company contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Class A Common Shares	New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

The number of outstanding shares as of March 31, 2011 was:

Title of Class	Number of Shares Outstanding
Class A Common Shares, par value $.01 per share Class B – series 1 – Common Shares, par value $.01 per share	174,355,341 96,332,044

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

x  Yes     o  No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

o  Yes     x  No

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.

x  Yes     o  No

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

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP o   International Financial Reporting Standards as issued by the International Accounting Standards Board x   Other o

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow.

o  Item 17     o  Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o  Yes      xNo

TABLE OF CONTENTS

____________________

	Page
PART I	5
Item 1. Identity of Directors, Senior Management and Advisers	5
Item 2. Offer Statistics and Expected Timetable	5
Item 3. Key Information	5
A. Selected Financial Data	5
B. Capitalization and Indebtedness	8
C. Reasons for the Offer and Use of Proceeds	8
D. Risk Factors	8
Item 4. Information on the Company	25
A. History and Development of the Company	25
B. Business Overview	30
C. Organizational Structure	53
D. Property, Plant and Equipment	53
Item 4A. Unresolved Staff Comments	55
Item 5. Operating and Financial Review and Prospects	55
A. Operating Results	61
B. Liquidity and Capital Resources	67
C. Research and Development, Patents, Licenses, etc.	71
D. Trend Information	71
E. Off-Balance Sheet Arrangements	71
F. Tabular Disclosure of Contractual Obligations	73
G. Safe harbor	75
Item 6. Directors, Senior Management and Employees	75
A. Directors and Senior Management	75
B. Compensation	79
C. Summary of Significant Differences of Corporate Governance Practices	80
D. Employees	81
E. Share Ownership	82
Item 7. Major Shareholders and Related Party Transactions	83
A. Major Shareholders	83
B. Related Party Transactions	85
C. Interests of Experts and Counsel	87
Item 8. Financial Information	87
A. Consolidated Statements and Other Financial Information	87
B. Significant Changes	92
Item 9. The Offer and Listing	93
A. Offer and Listing Details	93
B. Plan of Distribution	97
C. Markets	97
D. Selling Shareholders	97
E. Dilution	97
F. Expenses of the Issue	97
Item 10. Additional Information	98
A. Share Capital	98
B. Memorandum and By-laws	98
C. Material Contracts	106
D. Exchange Controls	109
E. Taxation	109
F. Dividends and Paying Agents	111
G. Statement by Experts	111
H. Documents on Display	111
I. Subsidiary Information	112
Item 11. Quantitative and Qualitative Disclosures About Market Risk	112
Item 12. Description of Securities other than Equity Securities	114

PART II	114
Item 13. Defaults, Dividend Arrearages and Delinquencies	114
Item 14. Material Modifications to the Rights of Security Holders	114
Item 15. Controls And Procedures	114
Item 16A. Audit Committee Financial Expert	115
Item 16B. Code of Business Conduct and Ethics	115
Item 16C. Principal Accountant Fees and Services	115
Item 16D. Exemptions from the Listing Standards for Audit Committees	116
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers	116
Item 16F. Change in Registrant's Certifying Accountant	116
Item 16G. Corporate Governance	116
PART III	116
Item 17. Financial Statements	116
Item 18. Financial Statements	117
Item 19. Exhibits	117

ii

Presentation of Financial and Other Information

Our consolidated financial statements are prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB. These consolidated financial statements are our first financial statements prepared in accordance with the IFRS. IFRS 1 – “First-time Adoption of International Financial Reporting Standards” has been applied in preparing these financial statements and as such, we no longer prepare financial data under generally accepted accounting principle in the United States, or U.S. GAAP.

IFRS 1 First-Time Adoption of International Financial Reporting Standards allows first-time adopters certain exemptions from the retrospective application of certain IFRS. The Company has applied the following exemptions: (i)  Business combinations: the Company used the exemption of IFRS 1 and has applied IFRS 3 - Business combinations - for acquisitions from December 1, 2008, the date of the purchase of Cosan Combustiveis e Lubrificantes S.A. (“CCL”) (formerly known as Esso Brasileira de Petroleo Ltda., now known as Cosan Lubrificantes e Especialidades S.A. (“CLE”)) and elected not to remeasure and restate business combinations that occurred before that date; (ii) Deemed cost: the Company elected to measure its farming land at fair value at the date of transition to IFRS. The effects of the deemed cost increased fixed assets with a corresponding increase in equity, net of income tax effects (see Note 14 of our consolidated financial statements attached hereto). The Company elected not to remeasure the remaining fixed assets. Remaining cost basis differences between inflation indexed asset values under IFRS and Brazilian GAAP attributable to Brazil’s hyper-inflationary designation until 1997 are immaterial as of the IFRS transition date; (iii) Defined benefit pension plan: the Company elected to recognize all actuarial gains and losses against the retained earnings as at the date of transition to IFRS. See Note 27 of our consolidated financial statements attached hereto for further details; (iv) Borrowing costs: The Company has applied the transitional provisions in IAS 23 Borrowing Costs and capitalizes borrowing costs on assets where construction was commenced on or after the date of transition, and (v) Cumulative currency translation differences: cumulative currency translation differences are deemed to be zero as at April 1, 2009.

As permitted by the applicable rules to the first-time adopter of IFRS, (1) we have not included in this annual report our consolidated balance sheets as of March 31, 2009 and 2008, or statements of income, cash flows and changes in shareholders’ equity for the fiscal years ended March 31, 2009 and 2008, including the notes thereto and (2) we have not presented a reconciliation of consolidated financial statements prepared in accordance with IFRS to U.S. GAAP.

We previously presented our consolidated financial statements in U.S. GAAP for SEC filings and in Brazilian GAAP for CVM filings. In adopting, IFRS Brazilian GAAP was considered the primary GAAP in the transition to IFRS, and the notes to the consolidated financial statements included in this annual report refer to the transition from Brazilian GAAP to IFRS. We have also included a reconciliation between U.S. GAAP and IFRS as of and for the year ended March 31, 2010 as supplemental information (see Note 30 of our consolidated financial statements attached hereto).

The consolidated financial statements are presented in Brazilian reais . However, the functional currency of Cosan Limited, or “Company”, is the U.S. dollar. The Brazilian real is the currency of the primary economic environment in which Cosan S.A. Indústria e Comércio, “Cosan” or “Cosan S.A.”, and its subsidiaries, located in Brazil, operate and generate and expend cash and is the functional currency, except for the foreign subsidiaries in which U.S. dollar is the functional currency. The Brazilian Securities Commission (Comissão de Valores Mobiliários), or CVM, mandated that IFRS should be used as the basis for consolidated financial statements of Brazilian public companies from fiscal years ending after December 31, 2010 and onward. Consequently, we have presented our consolidated financial statements for the fiscal years ended March 31, 2011 and 2010, in accordance with IFRS and our transition date was April 1, 2009. Prior to this date, our consolidated financial statements were prepared in accordance with accounting practices adopted in Brazil, or “Brazilian GAAP”, for CVM purposes and U.S. GAAP for SEC purposes. Brazilian GAAP is based on the Brazilian Corporate Law No. 6,404 of December 15, 1976, as amended, and included the provisions of Law No. 11,638/2007 and Law No. 11,941, dated May 27, 2009 the accounting standards issued by the Brazilian Federal Accounting Council (Conselho Federal de Contabilidade); the accounting standards issued by the Accounting Standards Committee (Comitê de Pronunciamentos Contábeis), and the rules and regulations issued by the CVM. After the adoption of CPCs No.15 to 43, Brazilian GAAP does not differ from IFRS, for preparation of consolidated financial statements.

1

In adopting IFRS for the consolidated financial statements as of and for the fiscal year ended March 31, 2011, certain adjustments were made to adjust the amounts previously presented in accordance with U.S. GAAP or Brazilian GAAP, as applicable, as of and for the year ended  March 31, 2010.

The primary differences between our previously presented U.S. GAAP and Brazilian GAAP sets of consolidated financial statements, are: (1) Biological assets: according to International Accounting Standard, or IAS, 41, biological assets of Cosan are measured at fair value at each reporting period, using the discounted cash flow method. In accordance with U.S. GAAP, the biological assets were recorded at their historical cost less amortization and were classified and presented in the statement of financial position as part of inventories and fixed assets; (2) Business combinations: Business combinations are treated in a similar manner under U.S. GAAP, but as the primary GAAP used in the preparation of these IFRS financial statements was Brazilian GAAP: (i) business combinations effects accounted for under U.S. GAAP prior to December 1, 2008 have been reversed and (ii) goodwill amortization effects accounted for under Brazilian GAAP prior to March 31, 2009 have been included; (3) Deemed cost: Cosan elected to measure its farming land at fair value at the date of transition to IFRS; (4) Warrants on the equity method investment: Cosan holds warrants in Radar Propríedades Agricolas S.A., or Radar, exercisable at any time up to maturity (August 2018). Such warrants permit Cosan to purchase additional shares, equivalent to 20% of total shares as of the date of exercise. The exercise of warrants will not change the classification of this investment as an equity investment. Those warrants were not considered to be a financial instrument under U.S. GAAP up to March 31, 2010 as they cannot be net settled. Radar is a privately-owned entity. Under IFRS, the warrants are treated as a separate financial instrument measured at fair value; (5) Investment property in associate: Radar is an equity method investment of the Company that invests in farming land for rent and future appreciation. Under U.S. GAAP, up to March 31, 2010, such land was recorded at cost. With the adoption of IFRS, Radar treated such land as investment property and elected to measure it at fair value. Fair value is measured at each reporting date, impacting the equity income of the Company with regard to Radar; (6) Sale leaseback: On December 30, 2008, Cosan sold land to Radar resulting in a gain of R$188.9 million. Cosan leased back the land. Under U.S. GAAP, this gain was deferred and was being amortized over the 19-year average term of the leases. Under IFRS, since the sale price was based on the fair value of the land, the gain was recorded on the transition date against accumulated earnings; (7) Deferred income taxes: As required by IAS 12, all deferred income taxes have been reclassified to non-current assets or liabilities. Also, the balance of deferred income taxes was impacted by the adjustments previously mentioned; and (8) Borrowing costs: Under U.S. GAAP, up to March 31, 2010, Cosan capitalized borrowing costs, but as the primary GAAP used in the preparation of these IFRS financial statements was Brazilian GAAP, in which borrowing costs were not capitalized, Cosan has applied the transitional provisions in IAS 23 Borrowing Costs and capitalizes borrowing costs on assets where construction was commenced on or after the date of transition.

On February 1, 2010, the Company announced that it, along with Royal Dutch Shell, or “Shell”, had reached a non-binding memorandum of understanding to form a joint venture, or “Joint Venture”, for a combined 50/50 investment. On August 25, 2010, the Company announced the conclusion of the negotiations with Shell and entered into definitive agreements. Cosan will contribute its sugar and ethanol and its distribution assets to the Joint Venture while Shell will contribute its distribution assets in Brazil and its interests on second generation ethanol research and development entities (Iogen Corp. and Codexis, Inc.). Shell will also make a fixed cash contribution in the amount of approximately US$1.6 billion over a two-year period. The sugar logistics and lubricants distribution business along with the investment in Radar will not be contributed to the joint venture. On January 4, 2011, the Company received unconditional merger clearance from the European Union to form the proposed Joint Venture in Brazil. On June 1, 2011, the Company formed the Joint Venture named Raízen. During the year ended March 31, 2011, the Joint Venture did not impact Cosan’s consolidated financial statements except for the incurrence of costs and expenses related to its future formation. See “Item 8. Financial information — B. Significant changes”.

See “Item 4. Information on the Company—A. History and Development of the Company—Acquisitions, Partnerships and Corporate Restructurings.”

Forward -Looking Statements

This annual report contains estimates and forward-looking statements, principally under “Item 3. Key Information—D. Risk Factors”, “Item 4. Information on the Company—B. Business Overview” and “Item 5. Operating and Financial Review and Prospects”. Some of the matters discussed concerning our business and financial performance include estimates and forward-looking statements.

2

Our estimates and forward-looking statements are mainly based on our current expectations and estimates on projections of future events and trends, which affect or may affect our businesses and results of operations. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to several risks and uncertainties and are made in light of information currently available to us. Our estimates and forward-looking statements may be influenced by the following factors, among others:

· general economic, political, demographic and business conditions in Brazil and in the world and the cyclicality affecting our selling prices;

· the effects of the global financial and economic crisis in Brazil;

· our ability to implement our expansion strategy in other regions of Brazil and international markets through organic growth and acquisitions;

· competitive developments in the ethanol and sugar industries;

· our ability to implement our capital expenditure plan, including our ability to arrange financing when required and on reasonable terms;

· our ability to compete and conduct our businesses in the future;

· changes in customer demand;

· changes in our businesses;

· technological advances in the ethanol sector and advances in the development of alternatives to ethanol;

· government interventions and trade barriers, resulting in changes in the economy, taxes, rates or regulatory environment;

· inflation, depreciation, valuation and devaluation of the Brazilian real;

· other factors that may affect our financial condition, liquidity and results of our operations; and

· other risk factors discussed under “Risk Factors”.

The words “believe”, “may”, “will”, “estimate”, “continue”, “anticipate”, “intend”, “expect” and similar words are intended to identify estimates and forward-looking statements. Estimates and forward-looking statements speak only as of the date they were made, and we undertake no obligation to update or to review any estimate and/or forward-looking statement because of new information, future events or other factors. Estimates and forward-looking statements involve risks and uncertainties and are not guarantees of future performance. Our future results may differ materially from those expressed in these estimates and forward-looking statements. In light of the risks and uncertainties described above, the estimates and forward-looking statements discussed in this annual report might not occur and our future results and our performance may differ materially from those expressed in these forward-looking statements due to but not limited to, the factors mentioned above. Because of these uncertainties, you should not make any investment decision based on these estimates and forward-looking statements.

3

Market Data

We obtained market and competitive position data, including market forecasts, used throughout this annual report from market research, publicly available information and industry publications, as well as internal surveys. We include data from reports prepared by LMC International Ltd., the Central Bank of Brazil (Banco Central do Brasil), or the “Central Bank”, Sugarcane Agroindustry Association of the State of São Paulo (União da Agroindústria Canavieira de São Paulo), or “UNICA”, Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística), or “IBGE”, the National Traffic Agency (Departamento Nacional de Trânsito), or DENATRAN, the Brazilian Association of Vehicle Manufactures (Associação Nacional dos Fabricantes de Veículos Automotores), or “ANFAVEA”, Datagro Publicações Ltda., F.O. Licht, Czarnikow, Apoio e Vendas Procana Comunicações Ltda., the São Paulo Stock, Commodities and Futures Exchange (BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros), or “BM&FBOVESPA”, the International Sugar Organization, the Brazilian National Economic and Social Development Bank (Banco Nacional de Desenvolvimento Econômico e Social), or “BNDES”, the New York Board of Trade, or NYBOT, the New York Stock Exchange, the London Stock Exchange, the National Agency of Petroleum, Natural Gas and Biofuels (ANP - Agência Nacional do Petróleo, Gás Natural e Biocombustíveis), or “ANP”, and the National Union of Distributors of Fuels and Lubricants (Sindicato Nacional das Empresas Distribuidoras de Combustíveis e Lubrificantes), or “Sindicom”. We believe that all market data in this annual report is reliable, accurate and complete.

Terms Used in this Annual Report

In this annual report, we present information in gallons and liters. One gallon is equal to approximately 3.78 liters. In addition, we also present information in tons. In this annual report, references to “ton” refer to the metric ton, which is equal to 1,000 kilograms.

All references in this annual report to “TSR” are to total sugar recovered, which represents the total amount of sugar content in the sugarcane.

All references in this annual report to “U.S. dollars,” “dollars” or “US$” are to U.S. dollars. All references to the “real”, “reais” or “R$” are to the Brazilian real, the official currency of Brazil.

Rounding

We have rounding adjustments to reach some of the figures included in this annual report. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.

4

PART I

Item 1. Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2. Offer Statistics and Expected Timetable

Not applicable.

Item 3. Key Information

A. Selected Financial Data

The following table presents selected historical financial and operating data for Cosan Limited derived from our audited consolidated financial statements and for its predecessor for certain periods. You should read the following information in conjunction with our audited consolidated financial statements and related notes, and the information under “Item 5. Operating and Financial Review and Prospects” in this annual report.

IFRS

The financial data at and for the twelve month period ended March 31, 2011, and for the twelve month period ended March 31, 2010, have been derived from our audited consolidated financial statements prepared in accordance with IFRS, unless otherwise stated.

	As of and For Fiscal Year Ended March 31,
	2011			2010
	(in millions of reais, except where otherwise indicated)
Income Statement Data:
Net sales (including adjustments and eliminations)		18,063.5			15,336.1
Cost of goods sold		(15,150.1	)		(13,271.3	)
Gross profit		2,913.4			2,064.8
Selling expenses		(1,026.0	)		(862.7	)
General and administrative expenses		(545.4	)		(501,6	)
Other, net		(33.8	)		37.5
Gain on tax recovery program		—			270.3
Operational income / (expenses)		(1,605.2	)		(1,056.5	)
Income before financial results, equity income of associates and income taxes		1,308.2			1,008.3
Equity income of associates		25.2			4.2
Financial results, net		(151.1	)		493.4
Income before income taxes		1,182.3			1,505.9
Income taxes:
Current		(85.4	)		(78.4	)
Deferred		(329.1	)		(344.9	)
Net income for the year		767.8			1,082.6
Statement of Financial Position Data:
Cash and cash equivalents		1,271.8			1,110.8
Inventories		670.3			612.7
Biological assets		1,561.1			963.2
Property, plant and equipment		7,980.5			6,114.5
Intangible assets		3,889.6			3,825.4
Total assets		19,212.4			16,417.2
Current liabilities		2,380.8			2,086.2

5

	As of and For Fiscal Year Ended March 31,
	2011			2010
	(in millions of reais, except where otherwise indicated)
Non-current
Long-term debt		6,274.9			5,136.5
Legal proceedings		666.3			612.0
Equity attributable to owners of the Company		4,560.9			4,195.5
Equity attributable to non-controlling interests		2,767.8			2,296.4
Total equity		7,328.7			6,491.9
Other Financial and Operating Data:
Depreciation and amortization		742.3			664.6
Net debt (1)		5,285.7			4,261.7
Working capital (2)		1,099.8			1,312.5
Cash flow provided by (used in):
Operating activities		2,327.2			2,209.0
Investing activities		(3,145.7	)		(2,435.3	)
Financing activities		980.7			317.9
Crushed sugarcane (in million tons)		54.2			50.0
Own sugarcane (in million tons)		27.4			23.4
Growers sugarcane (in million tons)		26.8			26.6
Sugar production (in million tons		3.9			3.5
Ethanol production (in billion liters)		2.2			1.8
Earnings per share (basic and diluted)	R$	1.74		R$	2.61
Number of shares outstanding		270,687,385			270,687,385
Dividends paid		220,125			43,981

(1) Net debt consists of current and non-current debt, net of cash and cash equivalents, marketable securities and CTNs (Brazilian Treasury bills) recorded in our consolidated financial statements as other non-current assets. Net debt is not an IFRS measure.

(2) Working capital consists of total current assets less total current liabilities.

U.S. GAAP

The financial data at and for the eleven month period ended March 31, 2009 and at and for the fiscal years ended April 30, 2008, and 2007 have been derived from our audited consolidated financial statements prepared in accordance with U.S. GAAP in U.S. dollars.

	As of and For Eleven Months Ended March 31,			As of and For Fiscal Year Ended April 30,
	2009			2008			2007
	(in millions of US$, except where otherwise indicated)
Statement of Operations Data:
Net sales	US$	2,926.5		US$	1,491.2		US$	1,679.1
Cost of goods sold		(2,621.9	)		(1,345.6	)		(1,191.3	)
Gross profit		304.6			145.6			487.8
Selling expenses		(213.3	)		(168.6	)		(133.8	)
General and administrative expenses		(140.1	)		(115.1	)		(121.1	)
Operating income (loss)		(48.8	)		(138.1	)		232.9
Other income (expenses):
Financial income and (expense), net		(370.8	)		116.8			289.4
Gain on tax recovery program		—			—			—
Other		(2.3	)		(3.7	)		16.3
Income (loss) before income taxes and equity in income (loss) of affiliates		(421.9	)		(25.0	)		538.5

6

	As of and For Eleven Months Ended March 31,			As of and For Fiscal Year Ended April 30,
	2009			2008			2007
	(in millions of US$, except where otherwise indicated)
Income taxes (expense)/benefit		144.7			19.8			(188.8	)
Income (loss) before equity in income (loss) of affiliates		(277.2	)		(5.2	)		349.7
Equity in income (loss) of affiliates		6.1			(0.2	)		(0.0	)
Loss (net income) attributable to noncontrolling interests		83.0			22.0			(173.0	)
Net income (loss)	US$	(188.1	)	US$	16.6		US$	176.7
Balance Sheet Data:
Cash and cash equivalents	US$	508.8		US$	68.4		US$	316.5
Marketable securities		—			1,014.5			281.9
Inventories		477.8			337.7			247.5
Property, plant, and equipment, net		2,259.4			2,108.1			1,194.1
Goodwill		888.8			772.6			491.9
Total assets		5,421.1			5,269.1			3,253.4
Current liabilities		1,164.7			359.1			274.2
Estimated liability for legal proceedings and labor claims		497.6			494.1			379.2
Long-term debt		1,251.1			1,249.3			1,342.5
Equity attributable to noncontrolling interests		544.5			796.8			463.6
Capital stock		2.7			2.7			2.7
Equity attributable to shareholders of Cosan Limited	US$	1,596.2		US$	1,995.7		US$	473.6
Other Financial and Operating Data:
Depreciation and amortization	US$	290.7		US$	236.1		US$	187.4
Net debt(1)		1,420.7			90.8			697.9
Working capital(2)		362.8			1,503.8			865.3
Cash flow provided by (used in):
Operating activities		256.6			57.6			284.0
Investing activities		(787.8	)		(1,441.7	)		(251.6	)
Financing activities	US$	871.9		US$	1,023.3		US$	222.8
Crushed sugarcane (in million tons)		43.1			40.3			36.2
Own sugarcane (in million tons)		22.7			22.3			21.6
Growers sugarcane (in million tons)		20.4			18.0			14.5
Sugar production (in thousand tons)		3,179.2			3,241.0			3,182.3
Ethanol production (in million liters)		1,688.4			1,524.6			1,236.6
Earnings per share (basic and diluted)	US$	(0.76	)	US$	0.09		US$	1.83
Number of shares outstanding		270,687,385			226,242,856			96,332,044
Dividends paid		—			—		US$	37.3

(1) Net debt consists of current and non-current debt, net of cash and cash equivalents, marketable securities and CTNs (Brazilian Treasury bills) recorded in our consolidated financial statements as other non-current assets. Net debt is not a U.S. GAAP measure.

(2) Working capital consists of total current assets less total current liabilities.

Exchange Rates

The Brazilian Central Bank allows the real/U.S. dollar exchange rate to float freely and has intervened occasionally to control the exchange rate volatility. However, the exchange market may continue to be volatile, and the real may depreciate or appreciate substantially in relation to the U.S. dollar. The Brazilian Central Bank or the Brazilian government may intervene in the exchange rate market.

Since March 17, 2008, Brazilian exporters have been allowed to keep 100% of income from exports outside of Brazil. In addition, the foreign exchange mechanism was simplified to provide for the simultaneous purchase and sale of foreign currency through the same financial institution and using the same exchange rate.

On October 5, 2010, the Brazilian government announced measures to respond to the real appreciation by increasing the IOF (Imposto sobre Operações Financeiras) tax rate to 4% on foreign exchange transactions related to foreign investments in the financial and capital markets, except for variable income investments traded on the stock exchange, which remained at 2%.  However, the increase failed to achieve its intended goal of curbing the appreciation of the Brazilian currency in comparison to the U.S. dollar.

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On October 18, 2010, new increases in the IOF tax rate were announced by the Brazilian government which adopted a 6% rate for foreign exchange transactions and for the investments of foreign investors in accordance with the margin requirements for future transactions on the BM&FBOVESPA. The IOF tax rate remains at zero on exchange transactions for outflow for these funds as well as for proceeds received as a result of initial public offerings. The conversion of Brazilian currency into foreign currency for purposes of paying dividends for American Depositary Share programs is not subject to tax.

On January 6, 2011, the Central Bank of Brazil published Circular 3,520, which imposes a 60% minimum reserve deposit for any financial operations exceeding US$3 billion.

The following tables set forth the exchange rate, expressed in reais per U.S. dollar (R$/US$) for the periods indicated, as reported by the Central Bank.

	Period-end		Average for Period		Low		High
			(reais per U.S. dollar)
Fiscal Year Ended:
April 30, 2006	R$	2.0892	R$	2.2841	R$	2.0892	R$	2.5146
April 30, 2007		2.0339		2.1468		2.0231		2.3711
April 30, 2008		1.6872		1.8283		1.6575		2.1124
March 31, 2009		2.3152		2.0047		1.5593		2.5004
March 31, 2010		1.7810		1.7852		1.7637		1.8231
March 31, 2011		1.6287		1.6665		1.6279		1.6904
Month Ended:
April 2011		1.5725		1.5856		1.5646		1.6186
May 2011		1.5791		1.6127		1.5739		1.6331
June 2011		1.5611		1.5870		1.5611		1.6108
July 2011		1.5563		1.5639		1.5345		1.5828
August 2011		1.5864		1.5962		1.5543		1.6326
September 2011 (through September 26, 2011)		1.8437		1.7314		1.6032		1.9008

Source: Central Bank.

Exchange rate fluctuation will affect the U.S. dollar equivalent of the market price of our Brazilian Depositary Receipts, or “BDRs”, on BM&FBOVESPA, as well as the U.S. dollar value of any distributions we receive from our subsidiary Cosan S.A., which will be made in reais. See “Item 3. Key Information—D. Risk Factors—Risks Related to Brazil”.

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

This section is intended to be a summary of more detailed discussion contained elsewhere in this annual report. Our business, financial condition or results of operations could be materially adversely affected by any of the risks and uncertainties described below. Additional risks not presently known to us, or that we currently deem immaterial, may also impair our financial condition and business operations.

Risks Relating to the Joint Venture

We closed our Joint Venture with Shell to further develop our sugar and ethanol and fuel distribution businesses on June 1, 2011. We cannot guarantee that the Joint Venture will be successful.

On June 1, 2011, we closed our Joint Venture with Shell, a joint venture relating to the production, supply, distribution and retailing of ethanol-based fuels. The Joint Venture is subject to post-closing antitrust review by CADE, the governing Brazilian antitrust regulator.  There can be no assurance that the Joint Venture will be successful and we cannot predict its effects on our consolidated business. We may incur unanticipated expenses, fail

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to realize all anticipated benefits or synergies, disrupt relationships with current and new employees, customers and vendors or incur indebtedness. Any delays or difficulties encountered with the Joint Venture could materially adversely impact our business and results of operations.

We have not included financial information regarding Shell or the fuel distribution assets of Shell that it contributed to the Joint Venture.

The Joint Venture is a material transaction. However, we have not included any historical financial information in this annual report regarding Shell or the fuel distribution assets that Shell contributed to the Joint Venture. In addition, we have not included any pro forma financial information regarding this Joint Venture. Investors are therefore cautioned that the nature of the assets contributed by Shell to the Joint Venture and other aspects of the Joint Venture may have a material adverse effect on us.

We cannot provide any assurance that we will obtain the Brazilian antitrust approval to continue to operate the Joint Venture on acceptable terms or predict whether the approval will impose conditions on our businesses in connection with the transaction.

The Joint Venture transaction has been submitted for approval to the Brazilian antitrust regulators, in accordance with Brazilian law, and is subject to post-closing antitrust review of CADE. Closing of the transaction was permitted to occur despite the ongoing review by CADE. Although the Secretariat for Economic Monitoring (Secretaria de Acompanhamento Econômico), or SEAE, and the Secretariat of Economic Law (Secretaria de Direito Econômico), or SDE, have issued non-binding opinions recommending the approval of the Joint Venture with no restrictions, CADE, the governing antitrust authority, continues to review this matter and may disagree with these opinions and impose certain conditions or performance commitments on us. CADE will evaluate whether this transaction negatively impacts competitive conditions in the markets in which we compete or adversely affects consumers in these markets.  If CADE does not approve the Joint Venture transaction, we will not be able to continue to operate the Joint Venture in its current form.

Risks Related to Our Business and Industries

We operate in industries in which the demand and the market price for our products are cyclical and are affected by general economic conditions in Brazil and the world.

The ethanol and sugar industries, both globally and in Brazil, have historically been cyclical and sensitive to domestic and international changes in supply and demand.

Ethanol is marketed as a fuel additive to reduce vehicle emissions from gasoline, as an enhancer to improve the octane rating of gasoline with which it is blended or as a substitute fuel for gasoline. As a result, ethanol prices are influenced by the supply and demand for gasoline, and our business and financial performance may be materially adversely affected if gasoline demand or price decreases. The increase in the production and sale of flex fuel vehicles (hybrid vehicles, that runs with ethanol or gasoline or both combined in any proportion) has resulted, in part, from lower taxation, since 2002, of such vehicles compared to gasoline only cars. This favorable tax treatment may be eliminated and the production of flex fuel vehicles may decrease, which could adversely affect demand for ethanol.

Historically, the international sugar market has experienced periods of limited supply—causing sugar prices and industry profit margins to increase—followed by an expansion in the industry that results in oversupply—causing declines in sugar prices and industry profit margins. In addition, fluctuations in prices for ethanol or sugar may occur, for various other reasons, including factors beyond our control, such as:

· fluctuations in gasoline prices;

· variances in the production capacities of our competitors; and

· the availability of substitute goods for the ethanol and sugar products we produce.

The prices we are able to obtain for sugar depends, in large part, on prevailing market prices. These market conditions, both in Brazil and internationally, are beyond our control. The wholesale price of sugar has a significant impact on our profits. Like other agricultural commodities, sugar is subject to price fluctuations resulting from

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weather, natural disasters, harvest levels, agricultural investments, government policies and programs for the agricultural sector, domestic and foreign trade policies, shifts in supply and demand, increasing purchasing power, global production of similar or competing products, and other factors beyond our control. In addition, a significant portion of the total worldwide sugar production is traded on exchanges and thus is subject to speculation, which could affect the price of sugar and our results of operations. The price of sugar, in particular, is also affected by producers’ compliance with sugar export requirements and the resulting effects on domestic supply. As a consequence, sugar prices have been subject to higher historical volatility when compared to many other commodities. Competition from alternative sweeteners, including saccharine and high fructose corn syrup, known as “HFCS”, changes in Brazilian or international agricultural or trade policies or developments relating to international trade, including those under the World Trade Organization, are factors that can directly or indirectly result in lower domestic or global sugar prices. Any prolonged or significant decrease in sugar prices could have a material adverse effect on our business and financial performance.

If we are unable to maintain sales at generally prevailing market prices for ethanol and sugar in Brazil and internationally, or if we are unable to export sufficient quantities of ethanol and sugar to assure an appropriate domestic market balance, our ethanol and sugar business may be adversely affected.

Sugar prices reached the highest levels in nearly 30 years during fiscal 2010, reflecting the deficit in global sugar production.

Ethanol prices are directly correlated to the price of sugar, so that a decline in the price of sugar will adversely affect both our ethanol and sugar businesses.

The price of ethanol generally is closely associated with the price of sugar and is increasingly becoming correlated to the price of oil. A vast majority of ethanol in Brazil is produced at sugarcane mills that produce both ethanol and sugar. Because sugarcane millers are able to alter their product mix in response to the relative prices of ethanol and sugar, this results in the prices of both products being directly correlated, and the correlation between ethanol and sugar may increase over time. In addition, sugar prices in Brazil are determined by prices in the world market, so that there is a correlation between Brazilian ethanol prices and world sugar prices.

Because flex fuel vehicles allow consumers to choose between gasoline and ethanol at the pump rather than at the showroom, ethanol prices are now becoming increasingly correlated to gasoline prices and, consequently, oil prices. We believe that the correlation among the three products will increase over time. Accordingly, a decline in sugar prices will have an adverse effect on the financial performance of our ethanol and sugar businesses, and a decline in oil prices may have an adverse effect on that of our ethanol business.

We may not successfully acquire or develop additional production capacity through greenfield projects or expansion of existing facilities.

We have begun operations at our greenfield plant in the State of Goiás, the Jataí mill, which will be able to crush approximately 4 million tons when operating at full capacity by 2013. The Jataí mill is part of our project to build three ethanol greenfield mills in the State of Goiás. However, the investments in the other two plants are currently on hold. Our Carapó greenfield project, which we acquired as part of the Nova América acquisition, began operating in the third quarter of fiscal year 2010.

We expect to explore other greenfield projects in the future. Except for the ethanol greenfield project in the State of Goiás, we do not have environmental or other permits, designs or engineering, procurement and construction contracts with respect to any potential projects. As a result, we may not complete these greenfield projects on a timely basis or at all, and may not realize the related benefits we anticipate. In addition, we may be unable to obtain the required financing for these projects on satisfactory terms, or at all. For example, we may not be able to obtain all of the land for which we have obtained options in the State of Goiás or we may not have the appropriate personnel, equipment and know-how to implement projects.

The integration of greenfield projects or expansion of our existing facilities may result in unforeseen operating difficulties and may require significant financial and managerial resources that would otherwise be used for the development and ongoing expansion of our existing operations. Planned or future greenfield projects or expansion of existing facilities may not enhance our financial performance.

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We may not successfully implement our plans to sell energy from our cogeneration projects, and the Brazilian government’s regulation of the energy sector may affect our business and financial performance.

Our current total installed energy cogeneration capacity is approximately 793 MW, which are used to generate energy for our own industrial operations and to export surplus energy. We have one additional energy co-generation project that we expect to become operational in 2012. We estimate that by the end of 2012, we will have a total installed energy cogeneration capacity of 934 MW, from which 845MW will come from certain of our plants that will sell excess energy to the grid and a total installed energy capacity of 1,300 MW by 2016. The Brazilian government regulates the energy sector extensively. We may not be able to satisfy all the requirements necessary to acquire new contracts or to otherwise comply with Brazilian energy regulation. Changes to the current energy regulation or federal authorization programs, and the creation for more stringent criteria for qualification in future public energy auctions, may adversely affect the implementation of this element of our business strategy.

We may engage in hedging transactions, which involve risks that can harm our financial performance.

We are exposed to market risks arising from the conduct of our business activities—in particular, market risks arising from changes in commodity prices, exchange rates or interest rates. In an attempt to minimize the effects of volatility of sugar prices and exchange rates on our cash flows and results of operations, we engage in hedging transactions involving commodities and exchange rate futures, options, forwards and swaps. We also engage in interest rate-related hedging transactions from time to time. Hedging transactions expose us to the risk of financial loss in situations where the other party to the hedging contract defaults on its contract or there is a change in the expected differential between the underlying price in the hedging agreement and the actual price of commodities or exchange rate. We may incur significant hedging-related losses in the future. We hedge against market price fluctuations by fixing the prices of our sugar export volumes and exchange rates. Since we record derivatives at fair value, to the extent that the market prices of our products exceed the fixed price under our hedging policy, our results will be lower than they would have been if we had not engaged in such transactions as a result of the related non-cash derivative expenses. As a result, our financial performance would be adversely affected during periods in which commodities prices increase. Alternatively, we may choose not to engage in hedging transactions in the future, which could adversely affect our financial performance during periods in which commodities prices decrease.

We face significant competition, which may adversely affect our market share and profitability.

The ethanol and sugar industries are highly competitive. Internationally, we compete with global ethanol and sugar producers such as Poet, Inc., Archer-Daniels-Midland Company, Cargill, Inc. and A.E. Staley Manufacturing Company (a subsidiary of Tate & Lyle, PLC). Some of our competitors are divisions of larger enterprises and have greater financial resources than our company. In Brazil, we compete with numerous small to medium-size producers. Despite increased consolidation, the Brazilian ethanol and sugar industries remain highly fragmented. Our major competitors in Brazil are Louis Dreyfus Commodities - Santelisa Vale (the second largest ethanol and sugar producer in Brazil), Tereos - Guarani (the third largest ethanol and sugar producer in Brazil), Bunge, Santa Terezinha, São Martinho, Carlos Lyra, Tercio Wanderley, Zilor, Oscar Figueiredo, Da Pedra, and Irmãos Biagi and other ethanol and sugar producers in Brazil market their ethanol and sugar products through the Cooperative of Sugarcane, Sugar and Ethanol Producers of the State of São Paulo (Cooperativa de Produtores de Cana-de-açúcar, Açúcar e Álcool do Estado de São Paulo), or “Copersucar”. During the 2010/2011 harvest, Copersucar was comprised of producers in the states of São Paulo, Minas Gerais and Paraná. We are not a member of Copersucar.

We face strong competition from international producers – in particular, in highly regulated and protected markets, such as the United States and the European Union. Historically, imports of sugar have not provided substantial competition for us in Brazil due to, among other factors, the production and logistical cost-competitiveness of sugar produced in Brazil. If the Brazilian government creates incentives for sugar imports, we could face increased competition in the Brazilian market by foreign producers. Many factors influence our competitive position, including the availability, quality and cost of fertilizer, energy, water, chemical products and labor. Some of our international competitors have greater financial and marketing resources, larger customer bases and broader product ranges than we do. If we are unable to remain competitive with these producers in the future, our market share may be adversely affected.

The fuel distribution and lubricant market in Brazil is highly competitive. We compete with domestic fuel distributors who purchase substantially all of their fuels from Petrobras. There are very few domestic competitors,

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like us, who import certain products into Brazil. In addition, we compete with producers and marketers in other industries that supply alternative forms of energy and fuels to satisfy the requirements of our industrial, commercial and retail consumers. Certain of our competitors, such as Petrobras, have larger fuel distribution networks and vertically integrated oil refineries, and may be able to realize lower per-barrel costs or higher margins per barrel of throughput. Our principal competitors are larger and have substantially greater resources than we do. Because of their integrated operations and larger capitalization, these companies may be more flexible in responding to volatile industry or market conditions, such as shortages of crude oil and other feedstocks or intense price fluctuations. The actions of our competitors could lead to lower prices or reduced margins for the products we sell, which could have a material and adverse effect on our business or results of operations.

Anticompetitive practices in the fuel and lubricants distribution market may distort market prices.

In the last few years, anticompetitive practices have been one of the main problems affecting fuel distributors in Brazil. Generally these practices have involved a combination of tax evasion and fuel adulteration, such as the dilution of gasoline by mixing solvents or adding anhydrous ethanol in an amount greater than the 25% permitted by applicable law (the overall taxation of anhydrous ethanol is lower than hydrated ethanol and gasoline). Taxes constitute a significant portion of the cost of fuels sold in Brazil. For this reason, tax evasion on the part of some fuel distributors has been prevalent, allowing them to lower the prices they charge. These practices have enabled certain distributors to supply large quantities of fuel products at prices lower than those offered by the major distributors, including us, which has resulted in a considerable increase in the sales volumes of the distributors who have adopted these practices. The final prices for fuels are calculated based on the taxes levied on their purchase and sale, among others factors. As a result, anticompetitive practices as such tax evasion may affect our sales volume, which could have a material and adverse effect on our business. If such practices become more prevalent, it could lead to lower prices or reduced margins for the products we sell, which could have a material and adverse effect on our business or results of operations.

Petrobras is our principal supplier of our base oils and of our fuel distribution business unit.

Significant disruption to our fuels and lubricant sales may occur, in the event of an interruption of supply from Petrobras. Any interruption would immediately affect our ability to provide fuel and lubricant products to our customers. If we are not able to obtain an adequate supply of fuel and base oil products from Petrobras under acceptable terms, we may seek to meet our demands through purchases on the international market. The cost of fuel and base oil products on the international market may be more expensive than the price we obtain through Petrobras.

We may face significant challenges in implementing our expansion strategy in other regions of Brazil and international markets.

Our growth strategy includes the expansion of our activities in other regions of Brazil and international markets, through organic growth and acquisitions. Our expansion to regions of Brazil in which we do not now operate may involve potential challenges, such as inadequate transportation systems and different state and local laws, regulations and policies. For example, we may not be able to secure an adequate supply of sugarcane either from suppliers or through our own cultivation in sufficient proximity to our mills to be economically viable in terms of transportation costs.

We are currently looking at opportunities worldwide, but have not yet identified any particular investment locations outside of Brazil. Our international expansion, to countries in which we do not now operate includes additional challenges, such as the following:

· changes in economic, political or regulatory conditions;

· difficulties in managing geographically diverse operations;

· changes in business regulation, including policies governing ethanol technological standards;

· effects of foreign currency movements;

· difficulties in enforcing contracts; and

· cultural and language barriers.

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If we fail to address one or more of these challenges, our business and financial performance may be materially adversely affected.

Our export sales are subject to a broad range of risks associated with international operations.

In fiscal year ended March 31, 2011, our net sales from exports represented 15.0% of our total net sales, while in fiscal year ended March 31, 2010, our net sales from exports represented 17.8% of our total net sales.

In fiscal year 2010, our net sales from exports were R$ 2,737.3 million, representing 17.8% of our total net sales. In fiscal year 2011, our net sales from exports were R$ 2,711.0 million, representing 15.0% of our total net sales. During this same period, our net sales from sugar exports were R$ 2,466.2 million, representing 13.7% of our total net sales, and our net sales from exports of ethanol were R$ 244.8 million, representing 1.3% of our total net sales.

We expect to expand our ethanol exports in the future. Expansion of ethanol exports depends on factors beyond our control, including liberalization of existing trade barriers and the establishment of distribution systems for hydrous ethanol in countries outside of Brazil. Our future financial performance will depend, to a significant extent, on economic, political and social conditions in our main export markets.

Most ethanol and/or sugar producing countries, including the United States and member countries of the European Union, protect local producers from foreign competition by establishing government policies and regulations that affect ethanol and sugar production, including quotas, import and export restrictions, subsidies, tariffs and duties. As a result of these policies, domestic ethanol and sugar prices vary greatly in individual countries. We have limited or no access to these large markets as a result of trade barriers. If these protectionist policies continue, we may not be able to expand our export activities at the rate we currently expect, or at all, which could adversely affect our business and financial performance. Also, if new trade barriers are established in our key export markets, we may face difficulties in reallocating our products to other markets on favorable terms, and our business and financial performance may be adversely affected.

We may not be able to maintain rights to use blending formulas and brands supplied by ExxonMobil.

We, through our subsidiary CLE (previously CCL) are the exclusive manufacturer and distributor of lubricants products in Brazil based on formulas provided to us under a license from ExxonMobil under the Master Lubricants Agreement, which expires on December 1, 2018. We have also been granted a license to use the ExxonMobil brand to market fuels under the Fuels Trademark License Agreement, which expires on December 1, 2013. The termination of any of these licenses, or the failure by ExxonMobil to adequately maintain and protect its intellectual property rights, could materially and adversely affect our results of operations or could require significant unplanned investments by us if we are forced to develop or acquire alternative technology. In the future, it may be necessary or desirable to obtain other third-party technology licenses relating to one or more of our products or relating to current or future technologies to enhance our product offerings. However, we may not be able to obtain licensing rights to the needed technology or components on commercially reasonable terms or at all.

The expansion of our business through acquisitions and strategic alliances creates risks that may reduce the benefits we anticipate from these transactions.

We have grown substantially through acquisitions. We plan to continue to acquire, from time to time, other ethanol or sugar producers or facilities in Brazil or elsewhere that complement or expand our sugar and ethanol existing operations. Moreover, we plan to acquire and build, from time to time, fuel terminals, lubricant production assets, retail distribution stations and other assets that complement and expand our fuel and lubricants existing operations and also intend to expand our network of service stations through increased branding. We also may enter into strategic alliances to increase our competitiveness. However, our management is unable to predict whether or when any prospective acquisitions or strategic alliances will occur, or the likelihood of any particular transaction being completed on favorable terms and conditions. Our ability to continue to expand our business through acquisitions or alliances depends on many factors, including our ability to identify acquisitions or access capital markets on acceptable terms. Even if we are able to identify acquisition targets and obtain the necessary financing to make these acquisitions, we could financially overextend ourselves, especially if an acquisition is followed by a period of lower than projected ethanol and sugar prices.

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Acquisitions, especially involving sizeable enterprises, may present financial, managerial and operational challenges, including diversion of management attention from existing business and difficulties in integrating operations and personnel. Any failure by us to integrate new businesses or manage any new alliances successfully could adversely affect our business and financial performance. Some of our major competitors may be pursuing growth through acquisitions and alliances, which may reduce the likelihood that we will be successful in completing acquisitions and alliances. In addition, any major acquisition we consider may be subject to antitrust and other regulatory approvals. We may not be successful in obtaining required approvals on a timely basis or at all.

Acquisitions also pose the risk that we may be exposed to successor liability relating to prior actions involving an acquired company, or contingent liabilities incurred before the acquisition. Due diligence conducted in connection with an acquisition, and any contractual guarantees or indemnities that we receive from sellers of acquired companies, may not be sufficient to protect us from, or compensate us for, actual liabilities. A material liability associated with an acquisition, such as labor- or environmental-related liabilities, could adversely affect our reputation and financial performance and reduce the benefits of the acquisition.

We have recently closed our joint venture with Shell.  See “Item 4. Information of the Company—A. History and Development of the Company—Acquisitions, Partnerships and Corporate Restructuring”. However, we cannot assure you that the joint venture will be successful.

A reduction in market demand for ethanol or a change in governmental policies that ethanol be added to gasoline may materially adversely affect our business.

Governmental authorities of several countries, including Brazil and certain states of the United States, currently require the use of ethanol as an additive to gasoline. Since 1997, the Brazilian Sugar and Alcohol Interministerial Council (Conselho Interministerial do Açúcar e Álcool) has set the percentage of anhydrous ethanol that must be used as an additive to gasoline (currently, at 20% by volume). Approximately one-half of all fuel ethanol in Brazil is used to fuel automobiles that run on a blend of anhydrous ethanol and gasoline; the remainder is used in either flex fuel vehicles or vehicles powered by hydrous ethanol alone. Five districts in China require the addition of 10% ethanol to gasoline. Japan is discussing the requirement the addition of 3% of ethanol to gasoline, increasing such requirement to 20% in 2030 and nine states and four union territories in India require the addition of 5% of ethanol to gasoline. Other countries have similar governmental policies requiring various blends of anhydrous ethanol and gasoline. In addition, flex fuel vehicles in Brazil are currently taxed at lower levels than gasoline-only vehicles, which has contributed to the increase in the production and sale of flex fuel vehicles. Any reduction in the percentage of ethanol required to be added to gasoline or increase in the levels at which flex fuel vehicles are taxed in Brazil, as well as growth in the demand for natural gas and other fuels as an alternative to ethanol, lower gasoline prices or an increase in gasoline consumption (versus ethanol), may cause demand for ethanol to decline and affect our business. In addition, ethanol prices are influenced by the supply and demand for gasoline; therefore, a reduction in oil prices resulting in a decrease in gasoline prices and an increase in gasoline consumption (versus ethanol), may have a material and adverse effect in our business.

Government policies and regulations affecting the agricultural and fuel sectors and related industries could adversely affect our operations and profitability.

Agricultural production and trade flows are significantly affected by Brazilian federal, state and local, as well as foreign, government policies and regulations. Governmental policies affecting the agricultural industry, such as taxes, tariffs, duties, subsidies and import and export restrictions on agricultural commodities and commodity products, may influence industry profitability, the planting of certain crops versus others, the uses of agricultural resources, the location and size of crop production, the trading levels for unprocessed versus processed commodities, and the volume and types of imports and exports.

Future government policies in Brazil and elsewhere may adversely affect the supply, and demand for, and prices of, our products or restrict our ability to do business in our existing and target markets, which could adversely affect our financial performance. Sugar prices, like the prices of many other staple goods in Brazil, were historically subject to controls imposed by the Brazilian government. Sugar prices in Brazil have not been subject to price controls since 1997. However, additional measures may be imposed in the future. In addition, our operations are currently concentrated in the State of São Paulo. Any changes affecting governmental policies and regulations regarding ethanol, sugar or sugarcane in the State of São Paulo may adversely affect our company.

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In addition, petroleum and petroleum products have historically been subject of price controls in Brazil. Currently there is no legislation or regulation in force giving the Brazilian government power to set prices for petroleum, petroleum products, ethanol or NGV. However, given that Petrobras, the only supplier of oil-based fuels in Brazil, is a state-controlled company, prices of petroleum and petroleum products are subject to government influence, resulting in potential inconsistencies between international prices and internal oil derivative prices that affect our business and our financials results, which are not linked to international prices.

We may not be successful in reducing operating costs and increasing operating efficiencies.

As part of our strategy, we continue to seek to reduce operating costs and increase operating efficiencies to improve our future financial performance. For example, we are purchasing new harvesters and increasing our mechanical harvesting with the goal of reducing sugarcane burning according to the Agri-Environmental Sugarcane Protocol. In areas that are suitable for the replacement of a manual harvest with a mechanical harvest, the burning of sugarcane must be reduced as follows: (1) 70% of the harvested area by 2010; and (2) 100% of the harvested area by 2014. For areas that do not technically allow the replacement of a manual harvest with a mechanical harvest, the burning of sugarcane must be reduced as follows: (1) 30% of the harvested area by 2010; and (2) 100% of the harvested area by 2017. We may not be able to achieve the cost savings that we expect to realize from this and other initiatives.  Any failure to realize anticipated cost savings may adversely affect our competitiveness and financial performance.

We incur substantial costs to comply with environmental regulations and may be exposed to liabilities in the event we fail to comply with these regulations or as a result of our handling of hazardous materials.

We are subject to various Brazilian federal, state and local environmental protection and health and safety laws and regulations governing, among other matters:

· the generation, storage, handling, use and transportation of hazardous materials;

· the emission and discharge of hazardous materials into the ground, air or water; and

· the health and safety of our employees.

We are also required to obtain permits from governmental authorities for certain aspects of our operations. These laws, regulations and permits often require us to purchase and install expensive pollution control equipment or to make operational changes to limit actual or potential impacts on the environment and/or health of our employees. Currently, we do not anticipate any material claims or liabilities resulting from a failure to comply with these laws and regulations. However, any violations of these laws and regulations or permit conditions can result in substantial fines, criminal sanctions, revocations of operating permits and/or shutdowns of our facilities.

Due to the possibility of changes to environmental regulations and other unanticipated developments, the amount and timing of future environmental expenditures may vary substantially from those currently anticipated. Under Brazilian environmental laws, we could be held strictly liable for all of the costs relating to any contamination at our or our predecessors’ current and former facilities and at third-party waste disposal sites used by us or any of our predecessors. We could also be held responsible for any and all consequences arising out of human exposure to hazardous substances, such as pesticides and herbicides, or other environmental damage.

We are party to a number of administrative and judicial proceedings for alleged failures to comply with environmental laws which may result in fines, shutdowns, or other adverse effects on our operations. We have not recorded any provisions or reserves for these proceedings as we do not currently believe that they will result in liabilities material to our business or financial performance. Our costs of complying with current and future environmental and health and safety laws, and our liabilities arising from past or future releases of, or exposure to, hazardous substances could adversely affect our business or financial performance.

Government laws and regulations governing the burning of sugarcane could have a material adverse impact on our business or financial performance.

Approximately 35% of our sugarcane is currently harvested by burning the crop, which removes leaves and destroys insects and other pests. The State of São Paulo and some local governments have established laws and regulations that limit our ability to burn sugarcane or that reduce and/or entirely prohibit the burning of sugarcane.

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We currently incur significant costs to comply with these laws and regulations, and there is a likelihood that increasingly stringent regulations relating to the burning of sugarcane will be imposed by the State of São Paulo and other governmental agencies in the near future. As a result, the costs to comply with existing or new laws or regulations are likely to increase, and, as a result, our ability to operate our own plants and harvest our sugarcane crops may be adversely affected.

Any failure to comply with these laws and regulations may subject us to legal and administrative actions. These actions can result in civil or criminal penalties, including a requirement to pay penalties or fines, which may range from R$50.00 to R$50,000 million and can be doubled or tripled in case of recidivism, an obligation to make capital and other expenditures or an obligation to materially change or cease some operations.

Adverse weather conditions may reduce the volume and sucrose content of sugarcane that we can cultivate and purchase in a given harvest, and we are affected by seasonality of the sugarcane growing cycle.

Our sugar production depends on the volume and sucrose content of the sugarcane that we cultivate or that is supplied to us by growers located in the vicinity of our mills. Crop yields and sucrose content depend primarily on weather conditions such as rainfall and temperature, which vary and may be influenced by global climate change. Weather conditions have historically caused volatility in the ethanol and sugar industries and, consequently, in our results of operations by causing crop failures or reduced harvests. Flood, drought or frost, which may be influenced by global climate change, can adversely affect the supply and pricing of the agricultural commodities that we sell and use in our business. Future weather patterns may reduce the amount of sugar or sugarcane that we can recover in a given harvest or its sucrose content. In addition, our business is subject to seasonal trends based on the sugarcane growing cycle in the Center-South region of Brazil. The annual sugarcane harvesting period in the Center-South region of Brazil begins in April/May and ends in November/December. This creates fluctuations in our inventory, usually peaking in November to cover sales between crop harvests (i.e., December through April), and a degree of seasonality in our gross profit, with ethanol and sugar sales significantly lower in the last quarter of the fiscal year. Seasonality and any reduction in the volumes of sugar recovered could have a material adverse effect on our business and financial performance.

We may be adversely affected by a shortage of sugarcane or by high sugarcane costs.

Sugarcane is our principal raw material used for the production of ethanol and sugar. In fiscal year 2011, sugarcane purchased from suppliers accounted for 49.5% of our total sugarcane crushed. Historically, approximately 80% of the sugarcane purchased by us has been under medium- and long-term contracts with sugarcane growers, 5% on a spot basis and the remaining 15% from sugarcane growers with whom we have long-term relationships but no contractual arrangements. We generally enter into medium- and long-term supply contracts for periods varying from three and one-half to seven years. As of March 31, 2011, we also leased 437,698 hectares under 2,128 land lease contracts with an average term of five years. Any shortage in sugarcane supply or increase in sugarcane prices in the near future, including as a result of the termination of supply contracts or lease agreements representing a material reduction in the sugarcane available to us for processing or increase in sugarcane prices may adversely affect our business and financial performance.

We are exposed to the credit and other counterparty risk of our customers in the ordinary course of our business.

We have various credit terms with virtually all of our wholesale and retail industrial customers, and our customers have varying degrees of creditworthiness which exposes us to the risk of nonpayment or other default under our contracts and other arrangements with them. In the event that a significant number of material customers default on their payment obligations to us, our financial condition, results of operations or cash flows, could be materially and adversely affected.

Our business would be materially adversely affected if operations at our transportation, terminal and storage and distribution facilities experienced significant interruptions. Our business would also be materially adversely affected if the operations of our customers and suppliers experienced significant interruptions.

Our operations are dependent upon the uninterrupted operation of our terminal and storage facilities and various means of transportation. We are also dependent upon the uninterrupted operation of certain facilities owned or operated by our suppliers and customers. Operations at our facilities and at the facilities owned or operated by our

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suppliers and customers could be partially or completely shut down, temporarily or permanently, as the result of any number of circumstances that are not within our control, such as:

· catastrophic events, including hurricanes;

· environmental remediation;

· labor difficulties; and

· disruptions in the supply of our products to our facilities or means of transportation.

Any significant interruption at these facilities or inability to transport products to or from these facilities or to or from our customers for any reason would materially adversely affect our results of operations and cash flow.

Fire and other disasters could affect our agricultural and manufacturing properties, which would adversely affect our production volumes and, consequently, financial performance.

Our operations will be subject to risks affecting our agricultural properties and facilities, including fire potentially destroying some or our entire yield and facilities. In addition, our operations are subject to hazards associated with the manufacture of inflammable products and transportation of feed stocks and inflammable products. Our insurance coverage may not be sufficient to provide full protection against these types of casualties.

Disease and pestilence may strike our crops which may result in destruction of a significant portion of our harvest. Crop disease and pestilence can occur from time to time and have a devastating effect on our crops, potentially rendering useless or unusable all or a substantial portion of affected harvests. Even when only a portion of the crop is damaged, our business and financial performance could be adversely affected because we may have incurred a substantial portion of the production cost for the related harvest. The cost of treatment of crop disease tends to be high. Any serious incidents of crop disease or pestilence, and related costs, may adversely affect our production levels and, as a result, our net sales and overall financial performance.

Disruption of transportation and logistics services or insufficient investment in public infrastructure could adversely affect our operating results.

One of the principal disadvantages of Brazilian agriculture sector is that key growing regions lie far from major ports. As a result, efficient access to transportation infrastructure and ports is critical to the growth of Brazilian agriculture as a whole and of our operations in particular. As part of our business strategy, we are investing in areas where existing transportation infrastructure is under developed. Improvements in transportation infrastructure are likely to be required to make more agricultural production accessible to export terminals at competitive prices. A substantial portion of Brazilian agricultural production is currently transported by truck, a means of transportation significantly more expensive than the rail transportation available to U.S. and other international producers. Our dependence on truck transport may affect our position as low-cost producer, so that our ability to compete in world markets may be impaired.

Even though road and rail improvement projects have been considered for some areas of Brazil, and in some cases implemented, substantial investments are required for road and rail improvement projects, which may not be completed on a timely basis – if at all. Any delay or failure in developing infrastructure systems could hurt the demand for our products, impede our delivery of products or impose additional costs on us. We currently outsource the transportation and logistics services necessary to operate our business. Any disruption in these services could result in supply problems at our processing plants and impair our ability to deliver processed products to our customers in a timely manner. In addition, a natural disaster or other catastrophic event could result in disruption in regional transportation infrastructure systems affecting our third-party transportation providers.

We depend on third parties to provide our customers and us with facilities and services that are integral to our business.

We have entered into agreements with third-party contractors to provide facilities and services required for our operations, such as the transportation and storage of ethanol and sugar. The loss or expiration of our agreements with third-party contractors or our inability to renew these agreements or to negotiate new agreements with other providers at comparable rates could harm our business and financial performance. Our reliance on third parties to

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provide essential services on our behalf also gives us less control over the costs, efficiency, timeliness and quality of those services. Contractors’ negligence could compromise the safety of the transportation of ethanol from our production facilities to our export facilities. We expect to be dependent on such agreements for the foreseeable future, and if we enter any new market, we will need to have similar agreements in place.

Technological advances could affect demand for our products or require substantial capital expenditures for us to remain competitive.

The development and implementation of new technologies may result in a significant reduction in the costs of ethanol production. We cannot predict when new technologies may become available, the rate of acceptance of new technologies by our competitors or the costs associated with such new technologies. Advances in the development of alternatives to ethanol also could significantly reduce demand or eliminate the need for ethanol as a fuel oxygenate. Any advances in technology which require significant capital expenditures to remain competitive or which otherwise reduce demand for ethanol will have a material adverse effect on our business and financial performance.

Alternative sweeteners have negatively affected demand for our sugar products in Brazil and other countries.

We believe that the use of alternative sweeteners, especially artificial alternative sweeteners such as aspartame, saccharine and HFCS, has adversely affected the growth of the overall demand for sugar in Brazil and the rest of the world. Soft drink bottlers in many countries have switched from sugar to, or increased consumption of, alternative sweeteners. In addition, the use of alternative sweeteners by sugar consumers, including soft drink bottlers, may also reduce the demand for sugar in Brazil. A substantial decrease in sugar consumption, or the increased use of alternative or artificial sweeteners, would decrease demand for our sugar products and could result in lower growth in our net sales and overall financial performance.

Our sugar and ethanol products are sold to a small number of customers which may be able to exercise significant bargaining power concerning pricing and other sale terms.

A substantial portion of our sugar and ethanol production is sold to a small number of customers that acquire large portions of our production and thus may be able to exercise significant bargaining power concerning pricing and other sale terms. In addition, intensive competition in the ethanol and sugar industries further increases the bargaining power of our customers.

Our subsidiary’s port concession is subject to termination by the granting authority.

We own and operate a sugar-loading terminal at the Port of Santos in the State of São Paulo through our subsidiary Rumo Logística S.A., or “Rumo Logística”. This port terminal is a result of the association of two previous terminals, Cosan Operadora Portuária S.A., or “Cosan Portuária”, and Teaçu Armazéns Gerais S.A., or “Teaçu” (previously owned by Nova América). The close proximity of our mills to the port enables us to benefit from lower transportation costs. Pursuant to the port concession agreement with the State of São Paulo’s Port Authority (Companhia de Docas do Estado de São Paulo – CODESP), or “CODESP,” Cosan Portuária’s concession to operate this terminal will expire on 2016, and it may be renewed for an additional 20 years if Cosan Portuária meets its obligations under the port concession agreement. We are already discussing with the CODESP the renewal of this concession, but we cannot provide assurances that we will be able to renew the concession at all or on favorable terms. The South Terminal concession (formerly Teaçu) was initially scheduled to expire in 2016, but has been extended until 2036. All port concessions may be unilaterally terminated by the granting authority prior to that time upon:

· expropriation of the port concession in the public interest;

· default by Rumo Logística in the performance of its obligations under the port concession agreement, including the payment of concession fees or failure to comply with other legal and regulatory obligations;

· Rumo Logística’s failure to comply with determinations by the granting authority; or

· bankruptcy or dissolution of Rumo Logística.

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Termination of the port concession agreement may adversely impact our transportation costs and the turn-around time for the export of our products as well as our revenues from service agreements related to our port facilities.

We may be adversely affected by unfavorable outcomes in pending legal proceedings.

We are involved in a significant number of tax, civil and labor proceedings, which we estimate involve claims against us totaling R$ 2,917.3 million, and as to which, at March 31, 2011, we recorded a provision totaling R$666.3 million, net of judicial deposits totaling R$ 218.4 million. We cannot predict whether we will prevail in these or other proceedings, or whether we will have to pay significant amounts, including penalties and interest, as payment for our liabilities, which would materially and adversely impact our business and financial performance.

Funding, especially on terms acceptable to us, may not be available to meet our future capital needs.

Global market and economic conditions have been, and continue to be, disruptive and volatile. The debt capital markets have been impacted by significant write-offs in the financial services sector and the re-pricing of credit risk, among other things. These events have negatively affected general economic conditions. In particular, the cost of raising money in the debt capital markets has increased substantially while the availability of funds from those markets has diminished significantly. Also, as a result of concerns about the stability of financial markets generally and the solvency of counterparties specifically, the cost of obtaining money from the credit markets has increased as many lenders and institutional investors have increased interest rates, enacted tighter lending standards and reduced and, in some cases, ceased to provide funding to borrowers on commercially reasonable terms or at all.

If funding is not available when needed, or is available only on unfavorable terms, meeting our capital needs or otherwise taking advantage of business opportunities or responding to competitive pressures may become challenging, which could have a material and adverse effect on our revenue and results of operations.

Our subsidiary Rumo Logistica may not obtain the expected return of the contracts with ALL.

Our indirect subsidiary Rumo Logística entered into long term contracts with ALL – América Latina Logística S.A., or “ALL”, providing that Rumo Logística will make investments to expand ALL’s rail transport capacity in exchange for ALL transporting raw sugar and other derivatives. The contracts provide that Rumo Logística will invest approximately R$1.3 billion in a rail transport system, to be supported by ALL’s operations, with investments in (1) the duplication, expansion and improvements to the railway line and the yards in the Bauru-Santos/São Paulo railway corridor, sharply increasing its operating capacity; (2) the acquisition of locomotives and hopper railcars; and (3) the construction and expansion of terminals. In return, ALL will provide transport services, guaranteeing (1) a minimum volume curve; (2) competitive tariffs in comparison with road transport; (3) management of locomotive and wagon suppliers; and (4) payment of rent on equipment in proportion to the actual volume of the product transported. In the event Rumo Logística is not able to originate the volume of sugar to the transported, we may not receive the contractual fees, which could impact negatively the return of invested capital.

The production of lubricants and the storage and transportation of fuel products, lubricant products are inherently hazardous.

The complex manufacturing operations we perform at our Lubricants Oil Blending Plant, or LOBP, involve a variety of safety and other operating risks, including the handling, production, storage and transportation of toxic materials. These risks could result in personal injury and death, severe damage to or destruction of property and equipment and environmental damage. A material accident at one of our plants, service stations or storage facilities could force us to suspend our operations and result in significant remediation costs and lost revenue. In addition, insurance proceeds, if available, may not be received on a timely basis and may be insufficient to cover all losses, including lost profit. Equipment breakdowns, natural disasters, and delays in obtaining supplies or required replacement parts or equipment could also materially adversely affect our manufacturing operations and consequently our results of operations.

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We are not insured against business interruption for our Brazilian operations and most of our assets are not insured against war or sabotage. In addition, our insurance coverage may be inadequate to cover all losses and/or liabilities that may be incurred in our operations.

We do not maintain coverage for business interruptions of any nature for our Brazilian operations, including business interruptions caused by labor disruptions. If, for instance, our workers were to strike, the resulting work stoppages could have a material and adverse effect on us. In addition, we do not insure most of our assets against war or sabotage. Therefore, an attack or an operational incident causing an interruption of our business could have a material and adverse effect on our financial condition or results of operations. Our operations are subject to a number of hazards and risks. We maintain insurance at levels that are customary in our industry to protect against these liabilities; however, our insurance may not be adequate to cover all losses or liabilities that might be incurred in our operations. Moreover, we will be subject to the risk that we may not be able to maintain or obtain insurance of the type and amount desired at reasonable rates. If we were to incur a significant liability for which we were not fully insured, it could have a materially adverse effect on our business, financial condition and results of operations.

We are highly dependent on our chairman and other members of our management to develop and implement our strategy and to oversee our operations.

We are dependent upon Mr. Rubens Ometto Silveira Mello, our chairman, other members of senior management and certain members of our board of directors, especially with respect to business planning, strategy and operations. If any of these key members of our management leaves our company, our business and financial performance may be negatively affected. Our business is particularly dependent on Mr. Rubens Ometto Silveira Mello, who is also our controlling shareholder. We currently do not carry any key man insurance.

We are indirectly controlled by a single individual who has the power to control us and all of our subsidiaries.

Mr. Rubens Ometto Silveira Mello, our controlling shareholder and chairman, has the power to indirectly control us, including the power to:

· elect a majority of our directors and appoint our executive officers, set our management policies and exercise overall control over our company and subsidiaries;

· agree to sell or otherwise transfer his controlling stake in our company; and

· determine the outcome of substantially all actions requiring shareholder approval, including transactions with related parties, corporate reorganizations, acquisitions and dispositions of assets, and dividends.

Our class B common shares have ten votes per share and our class A common shares have one vote per share. Currently, because of our share capital structure, our controlling shareholder is able to control substantially all matters submitted to our shareholders for a vote or approval even if the controlling shareholder comes to own less than 50% of the issued and outstanding share capital in the company. The concentrated control will limit your ability to influence corporate matters and, as a result, we may take actions that our shareholders do not view as beneficial. As a result, the market price of our class A common shares could be adversely affected.

We may face conflicts of interest in transactions with related parties.

We engage in business and financial transactions with our controlling shareholder and other shareholders that may create conflicts of interest between our company and these shareholders. For example, we enter into land leasing agreements with our affiliates, including Amaralina Agrícola Ltda., or “Amaralina”, Santa Bárbara Agrícola S.A., or “Santa Bárbara” and São Francisco S.A., or “São Francisco”. The accounts payable balances result mainly from the lease of agriculture land, which are at prices and on terms equivalent to the average terms and prices of transactions that we enter into with third parties. Commercial and financial transactions between our affiliates and us, even on if entered into on an arm’s length basis, create the potential for, or could result in, conflicts of interests.

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Risks Related To Brazil

Brazilian economic, political and other conditions, and Brazilian government policies or actions in response to these conditions, may negatively affect our business and financial performance and the market price of our class A common shares.

The Brazilian economy has been characterized by frequent and occasionally extensive intervention by the Brazilian government and unstable economic cycles. The Brazilian government has often changed monetary, taxation, credit, tariff and other policies to influence the course of Brazil’s economy. For example, the government’s actions to control inflation have at times involved setting wage and price controls, blocking access to bank accounts, imposing exchange controls and limiting imports into Brazil. We have no control over, and cannot predict, what policies or actions the Brazilian government may take in the future.

Our business, financial performance and prospects, as well as the market prices of our class A common shares, may be adversely affected by, among others, the following factors:

· exchange rate movements;

· exchange control policies;

· expansion or contraction of the Brazilian economy, as measured by rates of growth in gross domestic product, or “GDP”;

· inflation;

· tax policies;

· other economic, political, diplomatic and social developments in or affecting Brazil;

· interest rates;

· liquidity of domestic capital and lending markets; and

· social and political instability.

These factors, as well as uncertainty over whether the Brazilian government may implement changes in policy or regulations relating to these factors, may adversely affect us and our business and financial performance and the market price of our class A common shares.

Cosan S.A. generally invoices its sales in Brazilian reais, but a substantial portion of Cosan S.A.’s net sales are from export sales that are billed in U.S. dollars. At the same time, the majority of Cosan S.A’s costs are denominated in reais . As a result, our operating margins are negatively affected when there is an appreciation of the real to the U.S. dollar. Additionally, we have indebtedness with fixed and floating rates, and we are thus exposed to the risk of fluctuations in interest rates. If there is an increase in interest rates, our financial results may be affected.

Inflation and government measures to curb inflation, may adversely affect the Brazilian economy, the Brazilian securities market, our business and operations and the market prices of our class A common shares.

At times in the past, Brazil has experienced high rates of inflation. According to the General Market Price Index (Índice Geral de Preços – Mercado), or “IGP-M”, a general price inflation index, the inflation rates in Brazil were 1.2% in 2005, 3.8% in 2006, 7.7% in 2007, 9.8% in 2008 and deflation of 1.71% in 2009. In addition, according to the National Extended Consumer Price Index (Índice Nacional de Preços ao Consumidor Amplo), published by the IBGE, the Brazilian price inflation rates were 7.5% in 2005, 5.3% in 2006, 2.9% in 2007, 4.7% in 2008, 5.6% in 2009, 5.2% in 2010 and 6.3% in 2011. The Brazilian government’s measures to control inflation have often included maintaining a tight monetary policy with high interest rates, thereby restricting availability of credit and reducing economic growth. Inflation, actions to combat inflation and public speculation about possible additional actions have also contributed materially to economic uncertainty in Brazil and to heightened volatility in the Brazilian securities markets.

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Brazil may experience high levels of inflation in future periods. Periods of higher inflation may slow the rate of growth of the Brazilian economy, which could lead to reduced demand for our products in Brazil and decreased net sales. Inflation is also likely to increase some of our costs and expenses, which we may not be able to pass on to our customers and, as a result, may reduce our profit margins and net income. In addition, high inflation generally leads to higher domestic interest rates, and, as a result, the costs of servicing any floating-rate real-denominated debt may increase, resulting in lower net income. Inflation and its effect on domestic interest rates can, in addition, lead to reduced liquidity in the domestic capital and lending markets, which could affect our ability to refinance our indebtedness in those markets. Any decline in our net sales or net income and any deterioration in our financial performance would also likely lead to a decline in the market price of our class A common shares.

Significant volatility in the value of the real in relation to the U.S. dollar could harm our ability to meet our U.S. dollar-denominated liabilities.

The Brazilian currency has historically suffered frequent devaluations. In the past, the Brazilian government has implemented various economic plans and exchange rate policies, including sudden devaluations and periodic mini-devaluations, during which the frequency of adjustments has ranged from daily to monthly, floating exchange rate systems, exchange controls and dual exchange rate markets. There have been significant fluctuations in the exchange rate between the Brazilian currency and the U.S. dollar and other currencies. On March 31, 2011, the exchange rate was R$1.63 per US$1.00.

Because Cosan S.A. generally invoices its sales in Brazilian reais, devaluation of the real against foreign currencies may generate losses in our foreign currency-denominated liabilities as well as an increase in our funding costs with a negative impact on our ability to finance our operations through access to the international capital markets and on the market value of the class A common shares. A strengthening of the real in relation to the U.S. dollar generally has the opposite effect. Further devaluations of the Brazilian currency may occur and impact our business in the future. These foreign exchange and monetary gains or losses can be substantial, which can significantly impact our earnings from one period to the next. In addition, depreciation of the real relative to the U.S. dollar could (1) result in additional inflationary pressures in Brazil by generally increasing the price of imported products and services and requiring recessionary government policies to curb demand and (2) weaken investor confidence in Brazil and reduce the market price of the class A common shares. On the other hand, further appreciation of the real against the U.S. dollar may lead to a deterioration of the country’s current account and the balance of payments and may dampen export-driven growth.

Because a substantial portion of our indebtedness is, and will continue to be, denominated in or indexed to the U.S. dollar, our foreign currency exposure related to our indebtedness as of March 31, 2011 was R$ 3,750.8 million. We manage a portion of our exchange rate risk through foreign currency derivative instruments, but our foreign currency debt obligations are not completely hedged. In addition, a devaluation of the real would effectively increase the interest expense in respect of our U.S. dollar-denominated debt.

Changes in tax laws may increase our tax burden and, as a result, adversely affect our profitability.

The Brazilian government regularly implements changes to tax regimes that may increase the tax burden on Cosan S.A. and its customers. These changes include modifications in the rate of assessments and, on occasion, enactment of temporary taxes, the proceeds of which are earmarked for designated governmental purposes. In April 2003, the Brazilian government presented a tax reform proposal, which was mainly designed to simplify tax assessments, to avoid internal disputes within and between the Brazilian states and municipalities, and to redistribute tax revenues. The tax reform proposal provided for changes in the rules governing the federal Social Integration Program (Programa de Integração Social), or “PIS”, the federal Contribution for Social Security Financing (Contribuição para Financiamento da Seguridade Social), or “COFINS”, the federal Tax on Bank Account Transactions (Contribuição Provisória sobre Movimentação ou Transmissão de Valores e de Créditos e Direitos de Natureza Financeira), the state Tax on the Circulation of Merchandise and Services (Imposto Sobre a Circulação de Mercadorias e Serviços), or “ICMS”, and some other taxes. The effects of these proposed tax reform measures and any other changes that result from enactment of additional tax reforms have not been, and cannot be, quantified. Moreover, as a measure to avoid unfair competitive practices in the ethanol business, the federal government has enacted Law No. 11,727/08. According to this law, the collection of PIS and COFINS has shifted from the distributors to distilleries, thereby increasing the burden of these taxes collected at the distilleries from 25% to 40%.  The law further requires the installation of flow meters at distilleries to control the output of ethanol. Some of these measures may result in increases in our overall tax burden, which could negatively affect our overall financial performance.

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Risks Related to Our Common Shares

We are a Bermuda company, and it may be difficult for you to enforce judgments against us or our directors and executive officers.

We are a Bermuda exempted company, so that the rights of holders of our shares will be governed by Bermuda law and our by-laws. The rights of shareholders under Bermuda law may differ from the rights of shareholders of companies incorporated in other jurisdictions. All of our directors and some of the experts referred to in this annual report are not citizens or residents of the United States, and all of our assets are located outside the United States. As a result, it may be difficult for investors to effect service of process on those persons in the United States or to enforce judgments obtained in U.S. courts against us or those persons based on the civil liability provisions of the U.S. federal or state securities laws. We have been advised by our Bermuda counsel, Attride-Stirling & Woloniecki, that uncertainty exists as to whether courts in Bermuda will enforce judgments obtained in other jurisdictions, including the United States, against us or our directors or officers under the securities laws of those jurisdictions or entertain actions in Bermuda against us or our directors or officers under the securities laws of other jurisdictions. The United States and Bermuda do not currently have a treaty providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. Therefore, a final judgment for the payment of money rendered by any federal or state court in the United States based on civil liability, whether or not based solely on U.S. federal or state securities laws, may not necessarily be enforceable in Bermuda.

Bermuda law differs from the laws in effect in the United States and Brazil and may afford less protection to shareholders.

Our shareholders may have more difficulty protecting their interests than shareholders of a company incorporated in the United States or Brazil. As a Bermuda company, we are governed by the Companies Act 1981. The Companies Act 1981 differs in material respects from laws generally applicable to U.S. or Brazilian corporations and their shareholders, including the provisions relating to interested directors, amalgamations, takeovers, shareholder lawsuits and indemnification of directors.

Under Bermuda law, directors and officers of a company generally owe fiduciary duties to the company and not to individual shareholders. Class actions and derivative actions are generally not available to shareholders under Bermuda law. The Bermuda courts may, however, in certain circumstances permit a shareholder to commence an action in the name of a company to remedy a wrong to the company where the act complained of is alleged to be beyond the corporate power of the company or illegal, or would result in the violation of the company’s memorandum of association or by-laws. Consideration would be given by a Bermuda court to acts that are alleged to constitute a fraud against the minority shareholders or, for example, where an act requires the approval of a greater percentage of the company’s shareholders than that which actually approved it. The Companies Act 1981 imposes a duty on directors and officers to act honestly and in good faith with a view to the best interests of the company and to exercise the care and skill that a reasonably prudent person would exercise in comparable circumstances. Directors of a Bermuda company have a duty to avoid conflicts of interest. However, if a director discloses a direct or indirect interest in any contract or arrangement with us as required by Bermuda law, our by-laws provide that such director is entitled to be counted for quorum purposes, but may not vote in respect of any such contract or arrangement in which he or she is interested. In addition, the rights of our shareholders and the fiduciary responsibilities of our directors under the Companies Act 1981 are not as clearly established as under statutes or judicial precedent in jurisdictions in the United States, particularly in the State of Delaware.

Provisions in our by-laws may discourage takeovers, which could affect the return on the investment of our shareholders.

Our by-laws contain provisions that could make it more difficult for a third party to acquire us without the consent of our board of directors. These provisions provide, among other things, for:

· a classified board of directors with staggered three-year terms;

· restrictions on the time period in which directors may be nominated;

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· the affirmative vote of a majority of our directors in office and the resolution of the shareholders passed by a majority of votes cast at a general meeting or, if not approved by a majority of the directors in office, the resolution of the shareholders at a general meeting passed by 66- 2/3% of all votes attaching to all shares then in issue for amalgamation and other business combination transactions; and

· the tag-along rights described under “Item 10. Additional Information—B. Memorandum and By-laws—Tag-along Rights”.

These by-laws provisions could deter a third party from seeking to acquire us, even if the third party’s offer may be considered beneficial by many shareholders.

As a holding company, we may face limitations on our ability to receive distributions from our subsidiaries.

We conduct all of our operations through subsidiaries and are dependent upon dividends or other intercompany transfers of funds from our subsidiaries to meet our obligations. For example, Brazilian law permits the Brazilian government to impose temporary restrictions on conversions of Brazilian currency into foreign currencies and on remittances to foreign investors of proceeds from their investments in Brazil, whenever there is a serious imbalance in Brazil’s balance of payments or there are reasons to expect a pending serious imbalance. The Brazilian government last imposed remittance restrictions for approximately six months in 1989 and early 1990. The Brazilian government may take similar measures in the future. Any imposition of restrictions on conversions and remittances could hinder or prevent us from converting into U.S. dollars or other foreign currencies and remitting abroad dividends, distributions or the proceeds from any sale in Brazil of common shares of our Brazilian subsidiaries. We currently conduct all of our operations through our Brazilian subsidiaries. As a result, any imposition of exchange controls restrictions could reduce the market prices of the class A common shares.

Our by-laws restrict shareholders from bringing legal action against our directors and officers and also provide our directors and officers with indemnification from their actions and omissions, although such indemnification for liabilities under the Securities Act is unenforceable in the United States.

Our by-laws contain a broad waiver by our shareholders of any claim or right of action, both individually and on our behalf, against any of our officers or directors. The waiver applies to any action taken by an officer or director, or the failure of an officer or director to take any action, in the performance of his or her duties, except with respect to any matter involving any fraud or dishonesty on the part of the officer or director. This waiver limits the right of shareholders to assert claims against our officers and directors unless the act or failure to act involves fraud or dishonesty. Our by-laws also indemnify our directors and officers in respect of their actions and omissions, except in respect of their fraud or dishonesty. The indemnification provided in our by-laws is not exclusive of other indemnification rights to which a director or officer may be entitled, provided these rights do not extend to his or her fraud or dishonesty. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we understand that, in the opinion of the staff of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable in the United States.

The sale, or issuance, of a significant number of our common shares may adversely affect the market value of our class A common shares.

The sale of a significant number of our common shares, or the perception that such a sale could occur, may adversely affect the market price of our class A common shares. We have an authorized share capital of 1,000,000,000 class A common shares and 188,886,360 class B common shares, of which 174,355,341 class A common shares are issued and outstanding and 96,332,044 class B series 1 common shares are issued and outstanding as of March 31, 2011. In accordance with lock-up agreements, holders of our class B common shares have agreed, subject to limited exceptions, not to offer, sell, transfer, or dispose in any other way, directly or indirectly before August 16, 2010 less than all of the class B common shares that they own. After the end of such lock-up period, such previously restricted class B common shares may be traded freely.

Our by-laws establish that our board of directors is authorized to issue any of our authorized, but unissued share capital. Our shareholders at a shareholders general meeting may authorize the increase of our authorized share capital. As a result, we will be able to issue a substantial number of new shares after the lock-up period, which, if we decided to do so, could dilute the participation of our shareholders in our share capital.

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Actual dividends paid on our shares may not be consistent with the dividend policy adopted by our board of directors.

Our board of directors will adopt a dividend policy that provides, subject to Bermuda law, for the payment of dividends to shareholders equal to approximately 25% of our annual consolidated net income (as calculated in accordance with IFRS). Our board of directors may, in its discretion and for any reason, amend or repeal this dividend policy. Our board of directors may decrease the level of dividends provided for in this dividend policy or entirely discontinue the payment of dividends. Future dividends with respect to our common shares, if any, will depend on, among other things, our results of operations, cash requirements, financial condition, distribution of dividends made by our subsidiaries, contractual restrictions, business opportunities, provisions of applicable law and other factors that our board of directors may deem relevant.

To the extent we pay dividends to our shareholders, we will have less capital available to meet our future liquidity needs.

Our business strategy contemplates substantial growth over the next several years, and we expect that such growth will require considerable liquidity. To the extent that we pay dividends in accordance with our dividend policy, the amounts distributed to our shareholders will not be available to us to fund future growth and meet our other liquidity needs.

We may require additional funds in the future, which may not be available or which may result in dilution of the interests of shareholders in our company.

We may need to issue debt or equity securities in order to obtain additional public or private financing. The securities that we issue may have rights, preferences and privileges senior to those of our shares. If we decide to raise additional capital through an offering of common shares, the participation of our shareholders in our share capital may be diluted. Moreover, additional funding that may be required in the future may not be available under favorable terms.

The price of our class A common shares is subject to volatility.

The market price of our class A common shares could be subject to significant fluctuations due to various factors, including actual or anticipated fluctuations in our financial performance, losses of key personnel, economic downturns, political events in Brazil or other jurisdictions in which we operate, developments affecting the ethanol and sugar industries, changes in financial estimates by securities analysts, the introduction of new products or technologies by us or our competitors, or our failure to meet expectations of analysts or investors.

Item 4. Information on the Company

A. History and Development of the Company

We are a limited liability exempted company incorporated under the laws of Bermuda on April 30, 2007 for an indefinite term. Cosan Limited is registered with the Registrar of Companies in Bermuda under registration number EC 39981. Our registered office is located at Crawford House, 50 Cedar Avenue, Hamilton HM11, Bermuda. Our principal executive office is located at Av. Juscelino Kubitschek, 1327 – 4th floor, São Paulo – SP, 04543-011, Brazil and our general telephone and fax numbers are 55 11 3897-9797 and 55 11 3897-9799, respectively.

The objects of our business are set forth in our memorandum of association and provide that we have unrestricted objects and powers and rights including to:

· import, export, produce and sell ethanol, sugar, sugarcane and other sugar by-products;

· distribute and sell fuel and other fuel by-products;

· produce and market electricity, steam and other co-generation by-products;

· render technical services related to the activities mentioned above; and

· hold equity interests in other companies.

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Our history dates back to 1936 when the Costa Pinto mill was established by the Ometto family in the city of Piracicaba in the State of São Paulo, with annual sugarcane crushing capacity of 4.0 million tons. Beginning in the mid 1980s, we began to expand our operations through the acquisition of various milling facilities in the State of São Paulo.

The following information about segments is based upon information used by Cosan’s senior management to assess the performance of operating segments and to decide on the allocation of resources for fiscal year 2011.  The Company presents three segments: (1) Sugar and Ethanol (“S&E”) or “CAA”; (2) Fuel distribution and lubricants, or (“CCL”); and (3) sugar logistics, (“Rumo Logística”).

The S&E segment is primarily engaged in the production and marketing of a variety of products derived from sugar cane, including raw sugar (VHP), anhydrous and hydrated ethanol, and activities related to energy cogeneration from sugar cane bagasse. We currently operate 24 mills, two of which are leased from third parties (Junqueira and Dois Corregos) under operating leases. One of these mills incurs lease payments that are based on a percentage of its sales.

The CCL segment includes the distribution and marketing of fuels, mainly through franchised network of service stations under the brand “Esso” throughout the national territory, and production, distribution and marketing of lubricants licensed from ExxonMobil International Holdings B.V., or “Exxon”.

The Rumo Logística segment provides logistics services for the transport, storage and port lifting of sugar for both the S&E segment and third parties.

Acquisitions, Partnerships and Corporate Restructurings

Since May 2004, we have expanded our annual sugarcane crushing capacity by 162.0% from approximately 24.8 million tons to approximately 65.0 million tons in fiscal year 2011, primarily through acquisitions, partnerships and corporate restructurings. As a result of these acquisitions, partnerships and corporate restructurings, our net sales and gross profit have increased significantly.

Our principal acquisitions, partnerships and corporate restructurings since 2008 consist of the following:

· On April 23, 2008, Cosan S.A. entered into an agreement with Exxon, for the acquisition of 100% of the capital of Esso Brasileira de Petróleo Ltda. and its subsidiaries, or “Essobrás”, a distributor and seller of fuels and producer and seller of lubricants and specialty petroleum products of ExxonMobil in Brazil. On December 1, 2008, Cosan  S.A. completed the acquisition of all of the outstanding shares of Essobrás for a purchase price of approximately R$ 1,684.3 (US$715 million) million and assumed debts in the amount of R$ 412.2 (US$175 million) million. On January 16, 2009 the corporate name of Essobrás was changed to CCL (after the Joint Venture, in July 2011, the name was changed again to Cosan Lubrificantes e Especialidades S.A., or CLE) At the time of the acquisition, CLE had a distribution network of more than 1,500 stations in Brazil and 40 fuel distribution centers. Additionally, CLE registered annual sales of more than 5 billion liters of ethanol, gasoline and diesel, 160 million cubic meters of VNG and 127,000 cubic meters of lubricants produced at our plant in Rio de Janeiro, which will continue to offer products under the Esso and Mobil brands, developed using Exxon’s global technology. With this acquisition, we expanded our business model to become the first integrated renewable energy company in the world, with operations ranging from sugarcane cultivation to fuel distribution and sales in the retail market.

· On August 28, 2008, Cosan S.A. announced the incorporation of a new subsidiary named Radar Propriedades Agrícolas S.A., or “Radar”, which makes real estate investments in Brazil identifying and acquiring rural properties with high appreciation potential for subsequent leasing and/or sale. As of March 31, 2011, Cosan S.A. holds 18.9% of Radar. Cosan S.A. initially invested R$ 56.9 (US$35 million) million and the other investors R$ 243.8 (US$150 million) million. Furthermore, the parties have committed to invest an amount equal to US dollar equivalent of the Brazilian reais amount initially invested, which should only be disbursed when approximately 50% of the initial capital contribution has been invested.  Cosan S.A. has the right to exercise significant influence on Radar’s operations and, therefore, the investment is accounted using the equity method.

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· In October 2008, a private subscription was announced involving R$ 96 (US$50 million) million by the controlling shareholder, Mr. Rubens Ometto Silveira Mello, and up to R$ 288.1 (US$150 million) million by the funds managed by Gávea Investimentos Ltda., at R$ 8.6 (US$4.50) per class A share or BDR subscribed. The offering was extended to all class A share or BDR holders, as permitted by applicable law. The offering was concluded on October 27, 2008. As a result, Mr. Rubens Ometto Silveira Mello holds 41.5% of our total capital and 86.1% of our voting capital.

· On April 9, 2009, Cosan and Rezende Barbosa, concluded the port terminals combination of Cosan Operadora and Teaçu Armazéns Gerais S.A., or “Teaçú”, a subsidiary of Rezende Barbosa.  As a result, Cosan, through its subsidiary Novo Rumo Logística S.A., or “Novo Rumo”, acquired 100% of the outstanding shares of Teaçu for R$121 million (US$53.0 million) and shares representing 28.82% of Novo Rumo’s capital.  Teaçu used to hold a port concession in the City of Santos (which was transferred to Cosan Operadora on 2011) and operates a terminal dedicated to exporting sugar and other agricultural products.  As a result of the transaction, Cosan’s indirect participation in Novo Rumo’s capital is of 64.06%.

· On June 17, 2009, Cosanpar Participações S.A., or Cosanpar, a wholly-owned subsidiary of Cosan, sold to Shell Brasil Ltda. its equity interest in Jacta Participações S.A., a distributor of aviation fuel that was part of Essobras.  Cosanpar received R$115.6 million (US$59.2 million) from the sale.

· On June 18, 2009, Cosan  S.A.entered into an agreement with Rezende Barbosa to acquire 100% of the outstanding shares of Curupay S.A. Participações, or “Curupay”.  The acquisition was carried out through the merger of Curupay into Cosan S.A. resulting in the issuance by Cosan S.A. of 44,300,389 new common shares, representing 11.89% of its corporate capital on June 18, 2009, fully subscribed and paid-in by Rezende Barbosa. The 11.89% reflects the interest acquired by Rezende Barbosa in Cosan’s capital. The total amount of Cosan S.A.’s capital increase was R$ 334.9 (US$170 million) million, related to this transaction. The principal investment of Curupay was the ownership of 100% of the outstanding shares of Nova América S.A. Agroenergia, or “Nova América”.  Nova América is a producer of sugar, ethanol and energy co-generation which also operates in trading and logistics.  The assets acquired include the non-controlling interest in Novo Rumo representing 28.82% of its outstanding shares which were issued in the Teaçu acquisition, and 100% of the outstanding shares of two operating companies, Nova América S.A. Trading (which was incorporated on November 2009 by Raízen Tarumã S.A., that used to be known as Cosan Alimentos S.A.) and Nova América S.A. Agroenergia (company that had its corporate name altered on November 2009 to Cosan Alimentos and after the Joint Venture, on July 2011, had its corporate name altered to Raízen Tarumã S.A.), and the “União” brand, which is the leading sugar brand in Brazil.  Nova América is a producer of sugar, ethanol and energy co-generation and also operates in trading and logistics.

· On July 2, 2010, Cosan S.A. entered into a subscription agreement with investment vehicles controlled by TPG Capital, or “TPG”, and Gávea Investimentos, or “Gávea”, pursuant to which, the investors made an equity investment in Rumo Logística (company that was merged on June 30, 2011 into Cosan Operadora), by means of a capital increase in the total amount of R$400 million (US$224.9 million), paid by the investors in equal proportions representing 12.5% of issued and outstanding capital stock of Rumo Logística for each investor. At the present date, as per the merger of Rumo Logística by Cosan Operadora, the investors TPG and Gávea became shareholders of Cosan Operadora maintaining its equal proportions in the company, represented by 12.5% of the issued and outstanding capital stock of Cosan Operadora for each investor.

· On August 25, 2010, we successfully concluded negotiations with Shell and entered into definitive agreements for the creation of a proposed joint venture, currently known as Raízen.

· On February 18, 2011, Cosan, through its subsidiary Cosan S.A. Açúcar e Álcool (currently known as Raízen Energia S.A.) acquired 100% of the voting corporate capital of Cosan Araraquara Açúcar e Álcool Ltda., or “Usina Zanin”, for R$90 million. This entity is currently part of Raízen Group.

· On June 1, 2011, we established our Joint Venture with Shell, which combines certain of our assets and liabilities and consolidates our position as the world’s leading integrated bio-energy company. The transaction is still under antitrust review by the Brazilian Competition Authority. Pursuant to the Joint Venture, Cosan and its subsidiaries contributed their sugar and ethanol businesses, their energy

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cogeneration business, their fuel distribution business and their interests in certain ethanol logistics facilities at the Port of Santos and transferred debt minus cash and cash equivalent of approximately R$5,596.2 million to the Joint Venture. Shell and its affiliates contributed their Brazilian fuel distribution business, their Brazilian aviation fuels business, their beneficial interest in two companies (Iogen Corp. and Codexis, Inc.) involved in the research and development of biomass fuel, including ethanol, and a capital contribution resulting in cash proceeds to the Joint Venture of approximately US$1.6 billion. Cosan and its subsidiaries retained, and therefore did not contribute to the Joint Venture, their lubricants manufacturing and marketing business, their sugar logistics business, their land prospecting and development business, the right to conduct their own sugar trading business globally and their sugar retail brands. Additionally, we have elected to retain, and not contribute to the Joint Venture, the operation of our sugar retail business. Shell and its affiliates retained and did not contribute to the Joint Venture their exploration and production, chemicals and gas and power businesses in Brazil, their lubricants manufacturing and marketing business, their trading business and the Shell brand (which has been licensed to the Joint Venture for use in its downstream business, including retail in Brazil). See “Item 10. Additional Information—C. Material Contracts.”

The joint venture consists of three separate legal entities:

· Raízen Energia Participações S.A.: a sugar and ethanol company, which, among other things, conducts the production of sugar and ethanol, as well as all cogeneration activities. Cosan and its subsidiaries and Shell and its affiliates each own 50% common equity interest in this entity. In addition, Cosan and its subsidiaries own 51% of the voting shares (and preferred shares bearing preferential dividend rights in certain circumstances), whereas Shell and its affiliates own 49% of this entity’s voting shares.

· Raízen Combustíveis S.A.: a downstream company, which conducts the supply, distribution and sale of fuels in Brazil.  The resulting company has a network of approximately 4,500 fuel stations throughout Brazil. Cosan and its subsidiaries and Shell and its affiliates likewise each own 50% common equity interest in this entity.  In this entity, however, Cosan and its subsidiaries own 49% of the voting shares, whereas Shell and its affiliates own 51% of the voting shares. Cosan and its subsidiaries and Shell and its affiliates also hold preferred shares bearing preferential dividend rights in certain circumstances if certain contingent targets are met.

· Raízen S.A.: a management company, which is the Joint Venture’s face to the market and facilitates the building of a unified corporate culture. Cosan and its subsidiaries and Shell and its affiliates each own 50% of the equity and voting interests in this company.

The foregoing description of the Framework Agreement does not purport to be complete and is qualified in its entirety by reference to the Framework Agreement, which is filed as Exhibit 4.3 as amended by the First Amendment to the Framework Agreement entered into on April 7, 2011, and the Second Amendment to the Framework Agreement entered into on June 1, 2011 which are filed as Exhibits 4.4 and 4.5 respectively.

In the event that Raízen Energia or Raízen Combustíveis seek external financing, they shall provide financial support to each other, including by way of advancing funds to each other and guaranteeing each other’s debt obligations, in each case to the extent approved by the Supervisory Board and consistent with the business plan.

The Joint Venture is run by a management team drawn from Cosan and Shell with a proven track record in sugar, ethanol and fuels.  The executive board of the Joint Venture is overseen by the supervisory board. The supervisory board is responsible for appointing members of the executive board and monitors the activities and reports of the executive board. The supervisory board consists of three directors nominated by Cosan and three directors nominated by Shell. Our chairman, Rubens Ometto Silveira Mello, is the chairman of the supervisory board. Cosan and Shell have each designated a shareholder representative who is responsible for determining the Joint Venture’s strategic priorities and resolving any deadlock within the supervisory board. Our shareholder representative is Rubens Ometto Silveira Mello.

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Capital Expenditures

We are continuously searching for opportunities to increase our production capacity of sugar, ethanol and bio-electricity, including the development of greenfield projects. Our capital expenditures in property, plant and equipment, including acquisitions (net of cash acquired), expenditures for crop formation and expenditures for purchases of land, were R$3,037.2 million during fiscal year 2011, compared to R$2,545.5 million during fiscal year 2010. The main reason for the increase was the logistics investments made through our subsidiary Rumo Logística.

Our capital expenditure program is focused on four key areas:

Greenfield Project

We have begun operations at two ethanol and sugar plants in the States of Goiás and Mato Grosso do Sul, Brazil. We have acquired the land for the industrial facilities and entered into leases for sugarcane cultivation. Our capital expenditures for the Goiás (Jataí) and for Mato Grosso do Sul (Caarapó) project amounts R$ 1,078.4 million. Production at Jataí began in the third quarter of fiscal year 2010 and is expected to reach full capacity by fiscal year 2013, with an expected crushing capacity of 4 million tons of sugarcane and production of approximately 97 million gallons (370 million liters) of ethanol per year. Production at Caarapó began in the third quarter of fiscal year 2010 and reached full capacity on fiscal year 2011, with a crushing capacity of 2 million tons of sugarcane and production of approximately 75 million liters (19.8 million gallons) of ethanol per year.

Expansion of Our Crushing Capacity

Investments in expansion of capacity of sugar plants totaled R$87.2 million, 34.6% lower than the investments in the same previous fiscal year period. This decrease was due to the conclusion of most of the projects in Gasa, Ipaussu, Bonfim, Junqueira, Tamoio, Costa Pinto and Barra plants.

Cogeneration Projects

The investments in cogeneration amounted to R$287.6 million, primarily focused on Ipaussu, Univalem and Bonfim. The investments in Jataí (Goiás) and Caarapó (Matto Gross do Sul) decreased by 85.5%, as they were in the final stage of investment.

Strategic Acquisitions along the Business Chain

We invested approximately R$ 1.8 billion (US$1.0 billion) in strategic acquisitions along the business chain in the past years. We have added fuel distribution operations through the acquisition of downstream assets of ExxonMobil in Brazil and taken equity stakes in Radar, a newly incorporated land development company, Rumo Logística, a new sugar logistics company, and Uniduto, a newly incorporated company that is exploring an ethanol pipeline project in the central-south region of Brazil. In November 2007, we acquired 50% interest in Vertical UK LLP, a leading ethanol trading company.

On December 1, 2008, Cosan S.A. acquired 100% of the capital of Essobras (as July 2011, CLE) and certain affiliates, marketers and distributors of fuel and lubricants in the Brazilian retail and wholesale markets as well as aviation fuel supply from Exxon. On May 2009, we sold the aviation fuel business to Shell for R$ 126.5 million (US$59.2 million), aligned with our strategy of focusing on our core businesses.

On June 18, 2009, Cosan S.A. acquired 100% of the outstanding shares of Curupay, the parent company of Nova América and controlling shareholder of other assets related to trading, logistics and industrial production of sugar and ethanol and energy co-generation.  Nova América is a producer of sugar, ethanol and energy co-generation which also operates in trading and logistics.  The assets acquired include the non-controlling interest in Novo Rumo representing 28.82% of its outstanding shares which were issued in the Teaçu acquisition, and 100% of the outstanding shares of two operating companies, Nova América S.A. Trading and Nova América S.A. Agroenergia, and the “União” brand, which is the leading sugar brand in Brazil.  Nova América is a producer of sugar, ethanol and energy co-generation and also operates in trading and logistics. We are now focused on the integration of these assets and extraction of synergies, however we will continue to analyze opportunities to grow organically or through strategic acquisitions and partnerships.

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On August 25, 2010, we successfully concluded negotiations with Shell and entered into definitive agreements for the creation of a proposed joint venture. On June 1, 2011, we closed our Joint Venture with Shell, which combines certain of our assets and liabilities and consolidates our position as the world’s leading integrated bio-energy company. See “—Acquisitions, Partnerships and Corporate Restructurings.”

B. Business Overview

We are a leading global ethanol and sugar company in terms of production with low-cost, large-scale and integrated operations in Brazil. Our production is based on sugarcane, a competitive and viable feedstock for ethanol, sugar and energy because of its low production cost and high energy efficiency ratio relative to other ethanol sources, such as corn and sugar beet. We believe that we are:

Sugar and Ethanol

· Sugarcane: the largest grower and processor of sugarcane in the world, having crushed 54.3 million tons in fiscal year 2011 (with approximately 50% of which was sourced from suppliers) and 50.3 million tons in fiscal year 2010 (of which 46.6% came from our own sugarcane and 53.4% came from suppliers);

· Ethanol: the largest ethanol producer in Brazil and one of the largest exporters in the world, having sold 2.2 billion liters in fiscal year 2011 and 2.1 billion liters in fiscal year 2010, and exported 0.2 billion liters and 0.6 billion liters in the same periods, respectively; and

· Sugar: the largest sugar producer in the world, having sold 4.3 million tons of sugar in fiscal year 2011 and 4.1 million tons in fiscal year 2010, as well as the largest exporter of sugar in the world, having exported 3.0 and 3.1 million tons in the same periods, respectively.

Energy Co-generation

The world’s largest producer of energy from sugarcane bagasse. We currently have an installed energy capacity of 800 MW per year from our 24 plants, out of which 10 delivered energy to the Brazilian energy grid in fiscal year 2011. We have one additional energy co-generation project that we expect to become operational in 2012. We estimate that by the end of 2012 we will have a total installed energy capacity of 934 MW, from which 845 MW will come from certain of our plants that will sell excess energy to the grid and a total installed energy capacity of 1,300 MW by 2016. We see our co-generation of energy as strategic in our business as it allows for a more stable cash flow stream across commodity cycles, significantly reducing the volatility of our cash flows and operations; and

Fuel Distribution

Brazil’s third largest fuel distributor, engaged in sourcing, storing, blending and distributing primarily gasoline, ethanol, diesel and fuel oil through our retail network of approximately 4,500 Esso and Shell-branded stations following the close of the Joint Venture on June 1, 2011, and directly to industrial and wholesale clients. In fiscal year 2011, the operations contributed to the Joint Venture by Cosan and Shell had an estimated combined 23.8% market share in Brazil in terms of volume of fuel sold in 2011, according to Sindicom.

Prior to the closing of the Joint Venture, in fiscal year 2011, we recorded sales of R$10.9 billion of fuels and in fiscal year 2010, we recorded sales of R$9.4 billion of fuels.

Our retail station network is strategically concentrated in urban areas with higher population density, thus enabling us to have a high throughput per station, particularly in the South and Southeast regions of Brazil, where, prior to the closing of our Joint Venture, our fuel sales amounted to 1.32 billion liters (9.3% market share of the Sindicom companies) and 3.42 billion liters (8.1% market share of the Sindicom companies) in fiscal year 2011, respectively, as compared to 1.1 billion liters (6.6% market share of the Sindicom companies) and 3.1 billion liters (6.4% market share of the Sindicom companies) in 2008, respectively, according to Sindicom. The South and Southeast regions are the largest markets for fuel distribution in Brazil, accounting for 16.8% and 49.9% in fiscal year 2011, respectively, of the Brazilian fuel market in terms of volume sold according to Sindicom as compared to 17.3% and 49.6% in 2008, respectively, according to Sindicom. In fiscal year 2011, prior to the closing of our Joint Venture, we sold a total of 4.84 billion liters through our retail network, with a product mix of 41.6% gasoline, 40.7% diesel, 16.0% ethanol and 1.7% other fuels.

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We are also an industrial and wholesale fuel distributor, with sales of 1.03 billion liters of fuels sold, consisting of 96.0% diesel and 4.0% gasoline, ethanol and other fuels to our industrial and wholesale clients, in fiscal year 2011, prior to the closing of our Joint Venture. Most of our sales are concentrated in diesel oil and gasoline.

Lubricants

The third largest lubricants player in Brazil by volume of liters sold as of May 31, 2011. In fiscal year 2011, our lubricant operations sold a total of 166.4 million liters of lubricants. For fiscal year 2010, we sold a total of 130.8 million liters of lubricants, corresponding to an estimated market share of 14.3%, according to Sindicom. We sell passenger vehicle lubricants, commercial vehicle lubricants and industrial lubricants under the Mobil brand, among others, which is licensed to us until 2018 by ExxonMobil. We use Esso-branded retail stations to sell our lubricants products, as well as other distributors and direct sales to industrial customers. We capture significant synergies by selling through our distributors’ network to our retail service station network, to industrial and wholesale customer accounts and to car and motorcycle dealerships.

Our lubricant operations consist of a wholly-owned lubricants oil blending plant, located in Rio de Janeiro, with annual production capacity of 1.4 million barrels of lubricants per year, including capacity for 48,000 barrels of grease per year. In addition, we have a pier facility at our lubricants oil blending plant in Rio de Janeiro that allows us to import base stocks.

Sugar Logistics

· Logistics operations: the owner of the largest bulk sugar port terminal in the world with a current annual loading capacity of 10 million tons. We loaded 7.5 million tons in fiscal year 2011, generating net sales (including port lifting, logistics and others) of R$448.1 million and 8.1 million tons loaded in fiscal year 2010, generating net sales of R$158.2 million. We also started to provide transportation services for sugar through road and rail, which generated net revenues of R$305.9 million in fiscal year 2011, compared to R$16.1 million in fiscal year 2010. We expect Rumo Logística to become more significant over the next few years, as the transportation services started only recently in the last quarter of fiscal year 2010.

Sugar Retail Operations

· Sugar Retail: the largest seller of retail sugar in Brazil within several categories. Our sugar retail and distribution operations use União, Da Barra and other brands.

For our operations, other than our fuels marketing & lubricants, we operated 24 mills, four sugar refineries, two port facilities and numerous warehouses, as of March 31, 2011. All of these facilities are located in the Center-South region of Brazil, which is one of the world’s most productive sugarcane regions primarily because of its favorable soil, topography and climate, nearby research and development organizations and infrastructure facilities.

Competitive Strengths

We believe that, as a low-cost, large-scale producer with well-established integrated operations and long-standing relationships with key customers and suppliers, we can capitalize on the favorable trends in the ethanol and sugar industries—particularly, in light of our competitive strengths:

Low-cost producer

Our existing mills and other facilities are strategically located in the Center-South region of Brazil. Our operations also are in close proximity to our customers, sugarcane fields owned by us and growers, port terminals and other transportation infrastructure and warehouses. These factors help us to manage our operating costs. Increasing mechanization in our agricultural processes and improvements in industrial operations, combined with our energy self-sufficiency, should allow us to continue to lower our operating costs.

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Integrated platform extracting synergies across the sugarcane value chain

We have a fully integrated platform from sugarcane plantation to sugar logistics and fuel distribution. We are engaged in both the agricultural and industrial aspects of sugar and ethanol production. We lease rural properties upon which we cultivate and harvest sugarcane, and we also purchase sugarcane from third parties with whom we have long-term supply contracts. Once harvested, we crush and refine the sugarcane in our mills to produce sugar and ethanol, and we generate electricity through cogeneration from sugarcane bagasse. We export and distribute our sugar and ethanol through Rumo Logística and Raízen Combustíveis, respectively, among others. We generate significant synergies from this integration:

· Sugar and Ethanol: as the world’s largest grower of sugarcane and the third largest fuel distributor in Brazil, we benefit from our superior visibility on sugar and ethanol price formation, allowing us to better manage our decisions with respect to our sugar versus ethanol production mix and our inventory levels;

· Fuel distribution: our fuel distribution terminals are strategically located near our mills, allowing us to significantly optimize our logistics network by using our mills as distribution terminals and vice versa. Additionally, as a fuel distributor we are able to (1) benefit from a more stable cash flow stream to help offset fluctuations in sugar and ethanol prices and (2) capture potential margin gains from declines in ethanol prices during harvest periods, as ethanol price changes tend to be passed on to consumers gradually. Finally, our pier facility at the Port of Santos allows us to be opportunistic and take advantage of favorable “market windows” to import diesel and arbitrage raw material prices;

· Sugar Logistics: through Rumo Logística, we service the logistical needs of sugar exporters in the Center-South region of Brazil, which allows us to further enhance our market intelligence, maximize port utilization and optimize our logistical, distribution and storage activities, reducing our storage and transportation costs. Additionally, our sugar logistics business adds a second source of generally more stable cash flows;

· Energy Cogeneration: all of our mills are electric energy self-sufficient, reducing our dependence and exposure to energy prices and providing us an additional stream of generally stable cash flows;

· Land Development: through Radar, we leverage our unique market intelligence to opportunistically earn revenues and benefit from potential capital appreciation from agricultural real estate; and

· Sugar Retail: we benefit from our superior visibility on sugar pricing and our brand recognition to maximize our revenues and build on our position as the largest seller of retail sugar in Brazil within several categories.

Diversified portfolio of assets, combining our sugar and ethanol business with more stable and resilient cash flow streams

We have taken key strategic steps in recent years by vertically integrating our business and diversifying into activities with synergies that generally provide more stable cash flow streams as compared to sales of sugar and ethanol. In fiscal year 2011, our generally less cyclical businesses (CCL (fuel distribution and lubricants), Rumo Logística and energy cogeneration) collectively contributed R$12.4 billion in net sales or 69% of our consolidated net sales for the period, before intercompany eliminations and adjustments. We expect the contribution of these businesses to our consolidated results and cash flow origination to continue to grow as our investments in sugar logistics and energy cogeneration mature further. Additionally, we expect our revenues from our fuel distribution business to increase significantly due to our Joint Venture with Shell. We believe this diversification provides us with a unique competitive advantage in our industry, providing a generally more stable stream of cash flows when sugar prices are depressed.

Undisputed leadership in the markets where we operate

We enjoy leading market positions in all of the markets in which we operate, including:

· Sugar & Ethanol: we are the largest grower and processor of sugarcane in the world, having crushed 54.3 million tons in fiscal year 2011, more than 2.5 times the volume crushed by our closest competitor. We are

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the largest sugar producer in Brazil and the third largest sugar producer in the world, having sold 4.3 million tons of sugar in fiscal year 2011, and the largest exporter of sugar in the world, having exported 3.0 million tons in the same period. With respect to ethanol, we are the largest producer in Brazil and the fifth largest in the world, having sold 2.2 billion liters of ethanol in fiscal year 2011, and the largest exporter in the world, having exported 0.2 billion liters of ethanol in the same period;

· Fuel distribution: through Raízen Combustíveis, we are Brazil’s third largest fuel distributor, with an estimated combined 23.8% market share in terms of combined volume sold in 2011 by the operations contributed to the Joint Venture by Cosan and Shell, according to Sindicom;

· Sugar Logistics: we own two bulk sugar port terminals at the Port of Santos, which, on a combined basis, is the largest bulk sugar port terminal in the world with a current annual combined loading capacity of 10 million tons, and Rumo is currently undertaking one of the largest capital expenditure project in rail network expansion in Brazil to enable Rumo to become the world’s largest sugar logistics company;

· Energy Cogeneration: we are the world’s largest producer of energy from sugarcane bagasse. We estimate that by the end of 2012 we will have a total installed energy capacity of 934 MW, from which 845 MW will be sold as excess energy to the grid;

· Lubricants: we are the third largest lubricants player in Brazil as of May 2010, selling under the Mobil and Esso brands, among others, both of which are licensed to CLE until 2018 by ExxonMobil;

· Land Development: we are one of the largest private landowners in Brazil, with a portfolio of approximately 204,000 acres, as of March 31, 2011; and

· Sugar Retail: we are the largest seller of refined sugar in Brazil, with leading market positions in several categories through our brands, including União and Da Barra.

Disciplined risk management, proven access to capital, and strong overall financial profile

Sugar prices, ethanol prices and exchange rates are the main market risks within our sugar and ethanol business. As such, we operate under strict risk management policies, which include a senior risk committee that meets on a weekly basis to discuss and monitor our sugar price and exchange rate exposures, our hedging mechanisms under use, margin calls (cash at risk), counterparty risk and stress scenarios.

Additionally, we believe that we were one of the first sugar and ethanol producers in Brazil to have accessed the international debt capital markets, which we first did in 2004, and have since issued a total of five cross-border debt offerings in an aggregate principal amount of U.S.$1.7 billion in debt raised. Since 2004, we have also raised additional equity through the initial public offerings of Cosan S.A. and Cosan Limited, a private placement of Cosan Limited shares, a private placement of Radar shares and a private placement of Rumo shares, collectively amounting to U.S.$2.2 billion in equity capital raised. We have also developed a long-term business relationship with Brazil’s national development bank BNDES, from which we had a total of R$1,589.5 million indebtedness outstanding and R$705.2 million outstanding with Finame-BNDES, each as of March 31, 2011.

The result of subtracting the sum of our cash and cash equivalents, marketable securities and Brazilian Treasury bills, or CTNs from our current and non-current debt amounted to R$5,679.8 million as of March 31, 2011 or 2.1 times our EBITDA for fiscal year 2011. As of March 31, 2011, 87.3% of our consolidated indebtedness is long-term. In addition, our financial profile has improved due to our Joint Venture with Shell, following the receipt of a cash contribution of approximately U.S.$1.6 billion by Shell to the Joint Venture.

Strong strategic business relationships

We have developed important strategic relationships over the years, including with the Kuok Group (one of the largest agricultural-focused conglomerates in Asia) and Sucres et Denrées, or Sucden (one of the two largest sugar trading companies in the world), both of which are currently shareholders of Cosan. We have also developed strong business relationships with ExxonMobil, from which CLE licenses the Esso brand for fuels retail use until 2013 and Mobil and Esso brands for lubricants until 2018, and with some of our leading customers, such as Petrobras

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Distribuidora S.A. and Shell in the ethanol business and Sucden, Tate & Lyle International and Coimex Trading Ltd. in the sugar business. More recently, Cosan entered into a definitive agreement with Shell for the proposed creation of the Joint Venture. The transaction closed on June 1, 2011.

Strategically located assets with significant geographic overlap

Our existing mills, port terminals, warehouses, fuel distribution facilities and rail network are strategically located in the Center-South region of Brazil. Our operations also are in close proximity to our customers, sugarcane fields owned by us and growers and other transportation infrastructure:

· Sugar & Ethanol: of our 24 mills, 22 are located in the State of São Paulo operating in clusters due to their proximity. The State of São Paulo is one of the world’s most productive sugarcane regions, primarily because of its favorable soil, topography and climate, nearby research and development organizations and infrastructure facilities. The average distance from the fields where our sugarcane is harvested to our mills is approximately 25 kilometers (or approximately 16 miles). The proximity of our milling facilities to the land on which our sugarcane is cultivated reduces our transportation costs and enables us to process the sugarcane within 48 hours of harvesting, thereby maximizing sucrose recovery;

· Fuel distribution: Raízen Combustíveis’ distribution assets consist of 52 terminals – 12 owned by us, 19 joint ventures operated by us, 9 joint ventures operated by others and 12 terminals in which we have throughput arrangements – strategically concentrated in the Southeast and South regions near Brazil’s major fuel markets;

· Sugar Logistics: Rumo’s services follow the geographic footprint of ALL’s rail network-9, which is concentrated in the Center-South region of Brazil and the State of São Paulo in particular, where 171 mills out of Brazil’s 428 mills were located according to UDOP and UNICA as of 2008/2009. We believe there are a total of 95 mills within a median radius of less than 160 kilometers from one of our transportation hubs and/or trans-shipment centers, and therefore, these mills are potential clients for our sugar transportation services. Additionally, our bulk sugar port terminals are located in the city of Santos, which is located an average distance of 600 kilometers (approximately 370 miles) from our mills; and

· Lubricants: we own a lubricants oil blending plant in Rio de Janeiro with a total blending annual capacity of 1.4 million barrels of lubricants, including capacity for 48,000 barrels of grease, per year and a pier facility at such plant that allows us to import base stocks.

Experienced and professional management team

Our management team has considerable industry experience. In addition, unlike many of our domestic competitors in the sugar and ethanol industries, we have completed the shift from a family-operated business to a company managed by professionals with significant experience in the sugar and ethanol business. Our fuel distribution and, separately our lubricants business, are led by management teams with proven track records in the fuel distribution and lubricant markets, respectively, who previously worked for many years with the ExxonMobil group. Before the Joint Venture, our fuel distribution and lubricants business management team of 30 executives possessed an average of 20 years of experience in the industry. Following the conclusion of the Joint Venture, key executive officers from Shell’s management team responsible for its Brazilian fuel and retail operations have joined, further strengthening our management team.

Our Strategy

Due to our Joint Venture with Shell, we are focusing on achieving sustainable and profitable growth, further reducing our operating costs and building on our competitive strengths in order to expand our industry leadership. The principal components of our strategy are:

Sugar and Ethanol (Raízen Energia)

· Seek further productivity improvements and cost reductions. We are enhancing our productivity through investments in the development of new varieties of sugarcane, more efficient agricultural, industrial and logistics processes, expanded satellite monitoring of sugarcane, increased mechanization of harvests, emphasis on employee training programs and improvements in information flows and internal control systems;

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· Participate in the consolidation of the sugar & ethanol sector. The Brazilian sugar and ethanol sector has been consolidating in recent years; however, it still remains highly fragmented. We closely monitor acquisition opportunities in the sector and we will consider selective acquisitions and partnerships that offer the right strategic fit for our operations;

· Take advantage of future ethanol export opportunities. We expect to benefit from the growth of global ethanol exports emerging from the anticipated liberalization of trade barriers that have traditionally limited our access to some major markets, as well as mandatory blending requirements to use ethanol as an additive to gasoline by establishing new commercial and distribution partnerships with international industry players to expand and diversify our client base;

· Focus on environmental and social awareness. We are committed to acting as an environmentally and socially conscious company. We continue to invest in the mechanization of our harvests, which is not only cost-efficient, but also reduces our emission levels and decreases the burning of sugarcane fields for manual harvesting. We continue to improve and develop new training programs for our employees, as well as programs to reduce workforce accidents. We continuously seek environmental best practices, benchmark technologies and clean operations to sustain our best-in-class results and strengthen our relationships and cooperation with relevant environmental authorities and agencies; and

· Participate in the development of second generation technologies for ethanol. We will implement Shell’s second generation ethanol technology, which we expect will result in enhanced yields from improved yeast in our ethanol operations.

Fuel distribution (Raízen Combustíveis)

· Invest selectively in dealer conversion. We converted 89 retail stations in fiscal year 2011 into the Esso brand. Following our Joint Venture, we plan to continue investing in the conversion of non-branded stations, and begin converting Esso branded stations, to the Shell brand. We expect the majority of our new retail stations to be added in the Southeast region of Brazil, which has higher consumption of gasoline and ethanol and offers the potential for greater synergies with us and our logistics infrastructure;

· Continue to maximize operating efficiencies. We will continue to focus on improving the efficiency of our operations in the fuel distribution business by focusing on two key areas: (1) exploring synergies among our businesses and (2) maximizing the utilization of our retail stations. We continuously monitor the profitability and use of each service station in our retail network and eliminate underperforming sites, particularly in regions we consider less strategic; and

· Integrate with Shell’s operations. With the recent closing of our Joint Venture with Shell, we will pursue all the synergies envisioned, including the rebranding of Esso’s stations into Shell under the ten-year licensing agreement.

Energy Cogeneration (Raízen Energia)

· Explore the cogeneration potential of our mills. We currently have installed energy capacity of approximately 793 MW per year from eleven plants and plan to bring one additional energy cogeneration project online in 2012. We plan to reach a total installed energy of 934 MW in 2012, out of which 845 MW will be sold as excess energy to the grid. We expect to reach 1,300 MW of installed capacity by 2016; and

· Start generating energy from sugarcane leaves. We plan to build on Shell’s technical, operational and commercial support for our energy cogeneration activities and developing processes to generate electricity from sugarcane bagasse.

As for our businesses that were not contributed to the Joint Venture, our strategy will be guided by the following key elements:

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Sugar Logistics (Rumo Logística)

· Invest in our railroad operations. We have begun to invest R$1.3 billion in rolling stock (through ALL), permanent ways and trans-shipment warehouses. We plan to use rail to transport the majority of the sugar we produce from our mills to our facility at the Port of Santos, which we expect will significantly decrease our transportation costs; and

· Integrate our port terminals. We have begun to integrate our two terminals at the Port of Santos, creating the world’s largest bulk sugar port terminal. After this integration and completion of the construction of a wharf covering the terminal, we expect our total annual loading capacity to increase from 10 million tons to 18 million tons.

Lubricants (CLE)

· Focus on higher margin products. Premium products, such as synthetic lubricants (i.e., Mobil 1 RACING 2T and Mobilith SHC 007), represented 39% of our total lubricant volume sold in calendar year 2011, compared to 36% in calendar year 2009. We plan to continue improving our product mix and margins by increasing our focus on premium high margin products. We plan to continue investing in marketing, training our employees and exclusive distributors, developing new innovative products and delivering superior services.

Agricultural Land Development (Radar)

· Expand our land portfolio. We plan to further invest equity in Radar to enable it to expand its land portfolio and maximize earnings from agricultural real estate by acquiring properties with high expected appreciation potential for subsequent leasing and/or resale.

Sugar Retail (Docelar Alimentos)

· Increase sales of value-added sugar products. We are leveraging our sales of value-added products under our União and Da Barra brands, such as chocolate powder, cake mixes and breakfast products, by having dedicated sales and marketing teams to execute our commercial strategy and manage our brand portfolio, targeting both retail as well as industrial and foodservice clients; and

· Expand our sales efforts: We plan to expand our sales efforts and leverage our superior market visibility as the largest seller of retail sugar in Brazil within several categories.

Operations

Sugar and Ethanol segment

Sugarcane is the principal raw material used in the production of ethanol and sugar. Sugarcane is a tropical grass that grows best in locations with stable warm temperatures and high humidity, although cold and dry winters are an important factor for the sucrose concentration of sugarcane. The soil, topography, climate and land availability of the Center-South region of Brazil are ideal for the growth of sugarcane. The Center-South region of Brazil accounted for approximately 86.9% of Brazil’s sugarcane production in the 2010/2011 harvest.

As of March 31, 2011 we leased 437,698 hectares, through 2,128 land lease contracts with an average term of five years. Six of these contracts (covering 30,260 hectares, or 7.6% of the land leased by us) are entities controlled by our chairman and controlling shareholder under arms-length terms. In accordance with these land lease contracts, we pay the lessors a certain fixed number of tons of sugarcane per hectare as consideration for the use of the land, and a certain fixed productivity per ton of sugarcane in terms of TSR. The overall volume of TSR is obtained by multiplying the number of hectares leased by the committed tons of sugarcane per hectare by the TSR per ton of sugarcane. The price that we pay for each kilogram of TSR is set by CONSECANA (Conselho dos Produtores de Cana-de-açúcar, Açúcar e Álcool do Estado de São Paulo). In transition fiscal year 2009, we paid an average of 17.2 tons of sugarcane per hectare, and an average of 121.6 kilograms of TSR per ton of sugarcane, at an average cost of US$0.1461 million per kilogram of TSR under our land lease contracts. In fiscal year 2010, we paid an average of 17.52 tons of sugarcane per hectare, at an average cost of US$0.1751 per kilogram of TSR under our land lease contracts.

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We also purchase sugarcane directly from thousands of third-party sugarcane growers. Of our sugarcane purchases from third-party growers, we historically have purchased approximately 80% through medium- and long-term contracts with sugarcane producers, 5% on a spot basis and the remaining 15% from sugarcane producers with whom we have long-term relationships but no contractual arrangements. We generally enter into medium- and long-term contracts for periods varying from three and a half to seven years. All of our third-party sugarcane suppliers are responsible for the harvest of the sugarcane and its delivery to our mills. The price that we pay to third-party sugarcane growers is based on the total amount of sugar content in the sugarcane, measured by the amount of sugar recovered and on the prices of ethanol and sugar sold by each mill.

We harvested from owned or leased lands 50.6%, or 27.4 million tons, of the sugarcane that we crushed in fiscal year 2011, and purchased from third-party growers the remaining 26.8 million tons of sugarcane, or 49.4% of the total amount of sugarcane that we crushed in fiscal year 2011. The following table compares the amount of sugarcane grown on owned or leased land with the amount purchased from third parties during the last two fiscal years.

	For Fiscal Year Ended March 31,
	2011		%		2010		%
	(millions of tons, except percentages)
Sugarcane harvested from owned/leased land		27.4		50.6		23.4		46.6
Sugarcane purchased from third-parties		26.8		49.4		26.9		53.4
Total		54.2		100.0		50.3		100.0

Sugarcane Harvesting Cycle

The annual sugarcane harvesting period in the Center-South region of Brazil begins annually in May and ends in November. We plant several species of sugarcane, and the species we use in a particular area depends on the soil quality, rain levels and the resistance to certain types of pestilences, among other factors. Once planted, sugarcane is harvested each year for several continuous years. With each subsequent harvest, agricultural yields decrease, and the current optimum economic cycle is five or six consecutive harvests. However, the harvests must be carefully managed in order to continue to attain sugar yields similar to the newly-planted crop.

Ideally, the sugarcane should be harvested when the crop’s sucrose content is at its highest level. Harvesting is either done manually or mechanically. As of March 31, 2010, 35.5% of our sugarcane is harvested manually. Manual harvesting begins by burning the sugarcane field, which removes leaves and destroys insects and other pests. The amount of the crop that we may burn is subject to environmental regulations. The remaining 64.5% of our sugarcane is harvested mechanically.

Sugarcane yield is an important productivity measure for our harvesting operations. Geographical factors, such as land composition, topography and climate, as well as the agricultural techniques that we implement, affect our sugarcane yield. Although our agricultural yields are above the average Brazilian yields, we believe that by reducing the average age of our sugarcane fields and choosing new sugarcane varieties, our agricultural yields may continue to increase.

In fiscal year 2011, our accumulated sugar extraction was 139.0 kilograms of TSR per ton of sugarcane and our agricultural yield was 91.4 tons of sugarcane per hectare, compared to our average sugar extraction yield of 129.8 kilograms of TSR per ton of sugarcane and 91.4 tons of sugarcane per hectare in fiscal year 2010.

The average Brazilian sugar extraction yield for the 2010/2011 harvest was 140.5 kilograms of TSR per ton of sugarcane and the agricultural yield was 79.6 per hectare. The average Center-South sugar extraction yield for the last five years was 140.75 kilograms of TSR per ton of sugarcane and 83.10 tons of sugarcane per hectare. The average Brazilian sugar extraction yield for the 2009/2010 harvest was 130.09 kilograms of TSR per ton of sugarcane and the agricultural yield was 80.89 tons of sugarcane per hectare. The average sugar extraction yield in the State of São Paulo for the last five years was 141.88 kilograms of TSR per ton of sugarcane and 85.38 tons of sugarcane per hectare.

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Milling Facilities

Once the sugarcane is harvested, it is loaded onto trucks and riverboats owned by third parties and transported to one of our 24 mills for inspection and weighing. The average distance from the fields on which our sugarcane is harvested to our mills is approximately 25 kilometers (or approximately 16 miles). The proximity of our milling facilities to the land on which we cultivate sugarcane reduces our transportation costs and enables us to process the sugarcane within 48 hours of harvesting, thereby maximizing sucrose recovery as sucrose concentration in sugarcane starts to decrease upon harvesting.  In fiscal year 2011 our average sugarcane freight cost is US$3.14 per ton of sugarcane.

In fiscal year 2011, we crushed 54.3 million tons of sugarcane, or approximately 9.75% of Brazil’s total sugarcane production. In fiscal year 2010, we crushed 50.3 million tons of sugarcane, or approximately 7.6% of Brazil’s total sugarcane production. Currently, we operate a total of 24 milling facilities, 21 of which we own and two of which we lease, with 65.0 million tons of annual crushing capacity. Our Da Barra mill has the world’s second largest crushing capacity (approximately 7 million tons). Twenty of our mills are prepared to produce both sugar and ethanol and the other two prepare only sugar. Jataí, our greenfield, produces ethanol only. We also own four sugar refineries, two port facilities and numerous warehouses.

Ethanol Production Process

We produce ethanol through a chemical process called yeasting, which is a process of fermenting the sugars contained in both sugarcane juice and molasses. Initially, we process the sugarcane used in ethanol production the same way that we process sugarcane for sugar production. The molasses resulting from this process is mixed with clear juice and then with yeast in tanks, and the by-product resulting from the yeasting process, called “yeasted wine”, has an ethanol content of approximately 7% to 9%. After the yeasting process, which takes approximately 10 hours, the yeasted wine is centrifuged, so that we can separate the yeast from the liquid. We use the separated yeast in the ethanol production process. We then boil the yeasted wine at different temperatures, which causes the ethanol to separate from other liquids. Hydrous ethanol is produced after different distillation stages. In order to produce anhydrous ethanol, hydrous ethanol undergoes a dehydration process. The liquid remaining after these processes is called vinasse, a by-product we use as fertilizer in our sugarcane fields. After the distillation and dehydration processes, we produce hydrous, anhydrous, neutral and industrial ethanol, and store the ethanol in large tanks.

The ethanol production flow can be summarized as follows:

· Preparation of the juice. The fermentation is fed with a juice composed by approximately 20% of sugar, which is prepared with juice (from the treatment), molasses (from sugar production) and water. This juice must be cooled to approximately 30°C.

· Fermentation. The fermentation of the juice is the result of the action of yeast, which firstly inverts the sucrose to glucose and fructose (monosaccharide), and then converts the monosaccharide into ethanol and carbon dioxide. This reaction occurs in a fermenter, which is fed with juice and yeast.

· Centrifuging. After the fermentation, the resulting product is carried to centrifuges that separate the yeast from the beer, a solution of approximately 9%v/v (oGL) of ethanol.

· Treatment of the yeast. The yeast that comes from the centrifuges is treated with sulfuric acid and returned to the fermenter tank to be utilized again.

· Distillation. The beer is distillated in a sequence of distillation columns, which separate the water from the ethanol. This process occurs basically due to the differences of ethanol’s and water’s ebullition temperatures. In order to produce hydrous ethanol, two columns are used to achieve the concentration of 94%v/v (oGL) ethanol. From the first column, a slop called vinasse is obtained, which is used as a fertilizer in the sugarcane fields.

· Dehydration. In order to produce anhydrous ethanol, two more columns are used to achieve the concentration of 99%v/v (oGL) ethanol. In the first column, the excess of water is separated with the aid of cycle-hexane.

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The following diagram presents a schematic summary of the above-described ethanol production flow:

Production Capacity and Output

Our current annual ethanol production capacity is approximately 2.2 billion liters. All of our mills produce ethanol except for the São Francisco and Bonfim mills. We were the largest producer of ethanol in Brazil in fiscal year 2010, producing approximately 1.8 billion liters of ethanol, representing approximately 7% of Brazil’s total ethanol production in fiscal year 2010. We are the largest ethanol producer in Brazil and also one of the largest exporters in the world, having sold 2.2 billion liters in fiscal year 2011 and 2.1 billion liters in fiscal year 2010, and exported 0.2 billion liters and 0.6 billion liters in the same periods, respectively.

Products

We produce and sell three different types of ethanol: hydrous ethanol and anhydrous ethanol for fuel and industrial ethanol. The primary type of ethanol consumed in Brazil is hydrous ethanol, which is used as an alternative to gasoline for ethanol-only fueled vehicles and for flex fuel vehicles (as opposed to anhydrous ethanol which is used as an additive to gasoline). As a result, hydrous ethanol represented approximately 66% of our ethanol production in fiscal year 2010 and 68.8% in fiscal year 2011.

Customers

We sell ethanol primarily through gasoline distributors in Brazil mainly at the mill that sell it to retailers that then sell it at the pump to customers. The distributors are required by law to distribute gasoline with an ethanol content ranging from 20% to 25%. Since July 1, 2007, the required ethanol content for gasoline has been set at 25%. In January 2010, the Brazilian government temporarily reduced the ratio of anhydrous ethanol in the C gasoline blend to 20% during the months of February, March and April 2010, seeking to minimize the impact of the lower ethanol supply in this period of inter-harvest. The main distributors in Brazil include Petrobras Distribuidora S.A., Shell Brasil Ltda., Esso Brasileira de Petróleo Ltda. (whom we have acquired), and Cia. Brasileira de Petróleo Ipiranga which has recently acquired Texaco Brasil Ltda. Produtos de Petróleo, among others smaller distributors. We also sell industrial alcohol, which is used in the chemical and pharmaceutical sectors. In fiscal year 2010 and fiscal year 2011, our largest ethanol customer was Shell Brasil Ltda., accounting for 23.0% of our total ethanol net sales. Pricing is based on the ESALQ index and payment generally occurs within 12 days from delivery.  We sell our surplus in Brazil on a spot basis.

In fiscal year 2011, we exported 11.5%, by volume, of the ethanol we sold, which consisted primarily of refined hydrous ethanol for industrial purposes, compared to 27.4% in fiscal year 2010. Our main customers are trading companies, which distribute our products mainly to the United States, Japan and Europe. The table below sets forth customers that represent more than 5% of our ethanol net sales.

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Market	Customer	% of Net Sales Fiscal Year Ended March 31, 2011
International	Vertical UK LLP.	8%
	Mitsubishi Corporation	2%
Domestic	Petrobras Distribuidora S.A.	17%
	Ipiranga Prod Petróleo S.A.	15%
	Shell Brasil Ltda.	15%
	Cosan Combustíves e Lubrificantes S.A.	5%
	Braskem S.A.	4%
	Euro Petróleo do Brasil Ltda.	7%

Sales and Distribution

In fiscal year 2011 our net sales from ethanol operations were R$2.2 billion or 12.2% of our total net sales, compared to net sales of R$1.7 billion in fiscal year 2010, or 11.4% of our total net sales in that year.

The following table sets forth our domestic net sales and volumes of ethanol for the periods indicated:

	For Fiscal Year Ended March 31,
	2011		2010
Domestic net sales (R$ million) (IFRS)		1,958.9		1,325.9
% of total net sales		10.84		8.65
Domestic sales volume (in millions of liters)		1,989.50		1,559.70
% of total ethanol sales volume		88.53		72.63

The following table sets forth our export net sales and volumes of ethanol for the periods indicated:

	For Fiscal Year Ended March 31,
	2011		2010
Export net sales (R$ million) (IFRS)		244.80		421.80
% of total net sales		1.36		2.75
Export sales volume (in millions of liters)		257.80		587.90
% of total sales volume		11.47		27.37

Although we primarily sell ethanol in Brazil, we believe that the international ethanol market has a strong potential to expand substantially. The global trend toward adoption of cleaner-burning fuel and renewable sources of energy and alternative fuels, the tendency to reduce reliance on oil producing countries and the increasing use of flex fuel vehicles are expected to increase the demand for ethanol. Broader international acceptance of ethanol as a fuel or fuel additive could boost our exports of ethanol significantly.

The majority of our ethanol customers in Brazil receive shipments of ethanol at our mills. In fiscal year 2011, we distributed, through third parties, approximately 34% of our ethanol production in Brazil. We transport the ethanol that we produce for export to the Port of Santos primarily through third-party trucking companies.

Ethanol Prices

The price of ethanol we sell in Brazil is set according to market prices, using the indices for ethanol published by ESALQ and BM&FBOVESPA, indices for ethanol as a reference. The prices of the industrial and neutral ethanol (a type of ethanol which has low impurity levels and is used as a raw material in the food, chemical and pharmaceutical industries) that we sell are also determined in accordance with market prices, which historically has been approximately 10% higher than the price of fuel ethanol. Prices of ethanol for export are set according to international market prices for ethanol. The international ethanol market is highly competitive. In May 2004, the New York Board of Trade began trading a futures contract for ethanol, known as the World Ethanol Contract.

The following table sets forth our average selling prices (in R$ per thousand liters) for ethanol in the Brazilian market and for exports for the periods indicated:

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	For Fiscal Year Ended March 31,
	2011		2010
Brazilian average ethanol selling price	R$	985	R$	850
Export average ethanol selling price	R$	950	R$	717
Average ethanol selling price	R$	981	R$	814

Ethanol Loading Terminal at the Port of Santos

As of March 31, 2011, we owned a 66.67% interest in TEAS, an ethanol loading terminal at the Port of Santos, fully dedicated to ethanol exports that has a storage capacity of approximately 40 million liters of ethanol and loading rate of approximately 960,000 m3 per year.

Sugar

Sugar Production Process

There are essentially three steps in the sugar manufacturing process. First, we crush the sugarcane to extract the sugarcane juice. We then filter the juice to remove any impurities and boil it until the sugar crystallizes, forming a thick syrup. We use these impurities as fertilizer in our sugarcane fields. Lastly, we spin the syrup in a centrifuge which produces raw sugar and molasses. The raw sugar is refined, dried and packaged at our sugar refineries. We use the molasses in our production of ethanol, animal feed and yeast, among other products.

Production Capacity and Output

In fiscal year 2011, we sold 4.3 million tons of sugar, representing 12.8% of Brazil’s total sugar production output. In fiscal year 2010, we sold 4.1 million tons of sugar, representing 12.5% of Brazil’s total sugar production output.

As the production capacity of our mills is used for both ethanol and sugar, if we had produced only sugar (one ton of VHP sugar is equivalent to approximately 592 liters of anhydrous ethanol and 618 liters of hydrous ethanol), our sugar production for fiscal year 2010 and fiscal year 2011 would have been approximately 6.5 million tons, and approximately 7.5 million tons, respectively, which would have made us the largest world sugar producer in fiscal years 2010 and 2011.

Products

We produce a wide variety of standard sugars, including raw sugar (also known as VHP sugar), crystal sugar and organic sugar, and refined sugars, including granulated refined white sugar, amorphous refined sugar, refined sucrose liquid sugar and refined inverted liquid sugar. Currently, almost all of our mills produce standard ethanol and sugar, other than the São Francisco and Tamoio mills that only produce sugar and the Jataí mill, which produces only ethanol. The São Francisco mill and the Da Barra mill are our mills that produce refined sugar. The “Da Barra” brand is the second largest in the Brazilian market in terms of volume and, after Nova América’s acquisition, we also sell sugar under the União brand, which is the largest in the Brazilian market in terms of volume.

Standard sugars. VHP sugar, a raw sugar with approximately 99% sucrose content, is similar to the type of sugar traded in major commodities exchanges, including through the standard NY11 contract. The main difference between VHP sugar and the sugar that is typically traded in the major commodities exchanges is the sugar content of VHP sugar and the price premium that VHP sugar commands in comparison to most sugar traded in the commodities exchanges. We export VHP sugar in bulk, to be refined at its final destination. We also sell a small amount of VHP sugar to the Brazilian market. Crystal sugar is a non-refined sugar produced directly from sugarcane juice and sold to industrial companies in Brazil to be used as an ingredient for food products. We also sell a small amount of crystal sugar to the Brazilian retail market and to export markets. Organic sugar is a kind of raw sugar produced from organic sugarcane and is not submitted to any chemical treatments during its manufacturing process. We sell organic sugar in the international and Brazilian markets.

Refined sugars. We refine VHP sugar and crystal sugar into both granulated and amorphous (non-crystallized) sugar. We sell refined sugar in the Brazilian and export retail and industrial markets. Refined sugar is used as an ingredient in processed food products such as milk and chocolate powders, bakery products, powder refreshments, and pharmaceutical syrups.

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Liquid sugars. We refine crystal sugar to produce sucrose liquid sugar and inverted liquid sugar, which has a higher percentage of glucose and fructose than sucrose liquid sugar. We sell both types of sugar for industrial use, mainly for the production of soft drinks.

Customers

We sell sugar to a wide range of customers in Brazil and in the international markets. We primarily sell raw sugar in the international markets through international commodities trading firms and Brazilian trading companies. Our customers in Brazil include retail supermarkets, foodservice distributors and food manufacturers, for which we primarily sell refined and liquid sugar. The table below sets forth customers that represent more than 4% of our sugar net sales.

Market	Customer	% of Net Sales For Fiscal Year Ended March 31, 2011
International	Sucres et Denrées	33.40
	Coimex Trading Ltd./	12.60
	Tate & Lyle International	5.30
	Cargill International S.A.	4.80

For the Brazilian market, we sell sugar to a broad and consistent client base but we do not commit to set volumes or prices in advance.

Sales and Distribution

The following table sets forth our export sales and volumes of sugar for the periods indicated:

	For Fiscal Year Ended March 31,
	2011		2010
Export net sales (R$ million) (IFRS)		2,466.20		2,315.50
% of total net sales		13.65		15.10
Export sales volumes (in thousands of tons)		3,052.60		3,079.90
% of total sales volume		71.14		74.49

The following table sets forth our domestic net sales and volumes of sugar for the periods indicated:

	For Fiscal Year Ended March 31,
	2011		2010
Domestic net sales (R$ million) (IFRS)		1,387.30		1,062.30
% of total net sales		7.68		6.93
Domestic sales volumes (in thousands of tons)		1,238.20		1,054.70
% of total sales volume		28.86		25.51

We coordinate our Brazilian sugar distribution from our warehouses located in Barra Bonita, São Paulo and Cachoeirinha, all in the State of São Paulo. We also deliver sugar products to our customers in Brazil primarily via third-party trucking companies.

Sugar Prices

Prices for our sugar products for export are set in accordance with international market prices. Prices for raw sugar are established in accordance with the NY11 futures contracts. Prices for refined sugar are established in accordance with the Lon 5 futures contract, traded on the LIFFE. Prices for sugar we sell in Brazil are set in accordance with Brazilian market prices, using an index calculated by the Agriculture School of the University of São Paulo (Escola Superior de Agricultura Luiz de Queiroz), or “ESALQ”. The following table sets forth our average selling prices per ton in U.S. dollars for sugar in the Brazilian market and for export for the periods indicated:

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	For Fiscal Year Ended March 31,
	2011		2010
	(R$/ton)
Domestic average sugar selling price	R$	1,120	R$	1,007
Export average sugar selling price (raw and refined)	R$	808	R$	752
Average sugar selling price	R$	817	R$	898

Sugar Loading Terminal at the Port of Santos

Our exports of VHP sugar are shipped through the sugar loading terminal operated by our subsidiary, Rumo Logística, at the Port of Santos, which is located an average distance of 600 kilometers (approximately 370 miles) from our mills. Our sugar-loading terminal is equipped with modern freight handling and shipment machinery. The close proximity of our mills to the port enables us to benefit from lower transportation costs.

Our sugar-loading terminal has the capacity to load approximately 50,000 tons of sugar per day, and to store approximately 380,000 tons of sugar. The port facility serves clients, including Cosan, EDF&Man, Sucden, Bunge, Coimex, Cargill, LDC Corp and Noble among others, with their transport and export of sugar and soy products. Pursuant to the Port Concession Agreement with the State of São Paulo’s Port Authority, the concession granted to operate the south terminal (Cosan Portuária) will expire in 2036 and the concession granted to the north terminal (Teaçu), acquired in 2009, expires in 2016, and the renewal for an additional 20 years has already been requested.

In March 2009, Cosan S.A., through its subsidiary Rumo Logística, entered into an agreement with América Latina Logística, or ALL, for the rail transportation of bulk sugar and other sugarcane by-products. The agreement envisages investments of approximately R$1.3 billion by Rumo Logística, which we expect to raise through equity and debt at the subsidiary level. In exchange, ALL will guarantee a monthly volume to be transported by railroad, which will amount to approximately 11 million tons per year to the Port of Santos.

To finance these capital expenditures, Rumo Logística has contracted R$986 million of long-term credit facilities from BNDES, which R$435.3 was recorded in March 31, 2011. In addition, on September 2, 2010, Rumo Logística closed a private placement in which it raised R$400.0 million in primary proceeds from Gávea Investimentos and TPG Capital in exchange for an aggregate 25.0% interest of the then issued and outstanding shares of Rumo Logística. We believe this recent equity capitalization, together with the financing contracted with BNDES, are sufficient to meet Rumo Logística’s R$1.3 billion investment plan.

During fiscal year 2010, Rumo Logística began to transport sugar by truck and rail for ourselves and other sugar producers. Rumo Logística is also the owner of two bulk sugar port terminals at the Port of Santos, which, on a combined basis, is the largest bulk sugar port terminal in the world, with a current annual combined loading capacity of 10 million tons, having loaded 7.5 million tons in fiscal year 2011 and 8.1 million tons in fiscal year 2010. We are currently investing in this sugar port terminal to add an additional wharf to increase its capacity from the present capacity of 11 million tons to 18 million tons by 2014. After this expansion, this port terminal will have the capacity to support 70% of the volume exported by the sugar producers of the Center-South region of Brazil.

Finally, our pier facility at the Port of Santos allows us to be opportunistic and take advantage of favorable “market windows” to import diesel and arbitrage raw material prices.

Fuel distribution and lubricants

Fuel Distribution

Through Raízen Combustíveis, we are Brazil’s third largest fuel distributor, engaged in sourcing, storing, blending and distributing primarily gasoline, ethanol, diesel and fuel oil through our retail network of approximately 4,500 Esso and Shell-branded stations following the close of the Joint Venture on June 1, 2011, and directly to industrial and wholesale clients. In fiscal year 2011, the operations contributed to the Joint Venture by Cosan and Shell had an estimated combined 23.8% market share in Brazil in terms of volume of fuel sold in 2011, according to Sindicom.

Prior to the closing of the Joint Venture, in fiscal year 2011, we recorded sales of R$10.9 billion of fuels and in fiscal year 2010, we recorded sales of R$9.4 billion of fuels.

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Fuel Distribution Highlights	For Fiscal Year Ended March 31,
	2011		2010
Service stations (eop)		1,710		1,710
Fuel sold (million liters)		6,076.9		5,490.6
Net sales (R$ million) (IFRS)		10,902.3		9,437.3

Our retail station network is strategically concentrated in urban areas with higher population density, thus enabling us to have a high throughput per station, particularly in the South and Southeast regions of Brazil, where, prior to the closing of our Joint Venture, our fuel sales amounted to 1.32 billion liters (9.3% market share of the Sindicom companies) and 3.42 billion liters (8.1% market share of the Sindicom companies) in fiscal year 2011, respectively, as compared to 1.1 billion liters (6.6% market share of the Sindicom companies), according to Sindicom. The South and Southeast regions are the largest markets for fuel distribution in Brazil, accounting for 16.8% and 49.9% in fiscal year 2011, respectively, of the Brazilian fuel market in terms of volume sold according to Sindicom as compared to 17.3% and 49.6% in 2008, respectively, according to Sindicom. In fiscal year 2011, prior to the closing of our Joint Venture, we sold a total of 4.84 billion liters through our retail network, with a product mix of 41.6% gasoline, 40.7% diesel, 16.0% ethanol and 1.7% other fuels.

Industrial & Wholesale Division

We are also an industrial and wholesale fuel distributor, with sales of 1.03 billion liters of fuels sold, consisting of 96.0% diesel and 4.0% gasoline, ethanol and other fuels to our industrial and wholesale clients, in fiscal year 2011, prior to the closing of our Joint Venture. Most of our sales are concentrated in diesel oil and gasoline.

Lubricants

We are the third largest lubricants player in Brazil by volume of liters sold as of May 31, 2011. In fiscal year 2011, our lubricant operations sold a total of 166.4 million liters of lubricants. For fiscal year 2010, we sold a total of 130.8 million liters of lubricants, corresponding to an estimated market share of 14.3%, according to Sindicom. We sell passenger vehicle lubricants, commercial vehicle lubricants and industrial lubricants under the Mobil brand, among others, which is licensed to us until 2018 by ExxonMobil. We use Esso-branded retail stations to sell our lubricants products, as well as other distributors and direct sales to industrial customers. We capture significant synergies by selling through our distributors’ network to our retail service station network, to industrial and wholesale customer accounts and to car and motorcycle dealerships.

Our lubricant operations consist of a wholly-owned lubricants oil blending plant (LOPB), located in Rio de Janeiro, with annual production capacity of 1.4 million barrels of lubricants per year, including capacity for 48,000 barrels of grease per year. In addition, we have a pier facility at our lubricants oil blending plant in Rio de Janeiro that allows us to import base stocks.

Lubricants Highlights:	For Fiscal Year Ended March 31,
	2011		2010
Volume of lubricants sold (thousand liters)		166.4		130.8
Net sales (R$ million) (IFRS)		822.4		634.0

Our Lubricants Distributor Program is recognized as a competitive advantage in the Brazilian market. Participating distributors can only sell Mobil and Esso lubricants and are currently limited to 15 with exclusive geographical coverage. An important differential is the common ERP system used by the distributors that interfaces with our SAP business software system. We believe that these characteristics make our distributors network unique, allowing us to launch new products and implement new programs with speed and flawless execution.

ExxonMobil is a leading brand in the lubricants industry, operating through global strategic alliances with automotive and industrial equipment manufactures, including Caterpillar, Mercedes-Benz, Peugeot and Toyota, collaborating to develop new formulations. We have a licensing agreement for our use of ExxonMobil’s brands and formulations until 2018, renewable at ExxonMobil’s sole discretion, which gives us access to ExxonMobil’s leading technology and international feedstock supplies.

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Production Capacity and Output

As of August 2011, our LOBP facility had operated for almost fifteen years without a single lost-time incident, which represents approximately 5 worker-hours worked in a safe workplace over those years, and operates at a utilization rate of approximately 70% of its total capacity as of March 31, 2011. This utilization rate offers an opportunity for growth through expansion of our market share or participation in Brazil’s steady market growth with limited additional capital investments required. We also own a base oil terminal in Duque de Caxias and one secondary warehouse in Manaus.

We have a mix of imported (including significant imports from ExxonMobil) and national (from Petrobras) base oils to use as feedstock in our blending plant located in Rio de Janeiro. This flexibility is due to our pier facility which we use to import raw material, which gives us significant competitive advantage. The lubricants produced at our LOBP are sold to exclusive distributors and direct customers.  Distributors have an evergreen contract, and most direct customers have a five year contract at prices set by us. Distributors then resell the products to customers in our retail market. In addition, distributors are contractually obligated to sell Esso and Mobil products and may not sell products directly competing with such brands. Approximately 97% of our sales volume is blended domestically, with the majority of the production delivered to the domestic market. Most of our lubricant sales are concentrated in the Southeast and South regions of Brazil.

Our LOBP provides an efficient and reliable local blending facility with the ability to import base oils. On average, the LOBP receives approximately 3,000 orders per month, 4,800 invoices per month and has 2,200 shipments per month, 42% delivered on CIF (Cost, insurance and freight) basis and 56% delivered FOB (Free On Board) basis during fiscal year 2011.  The LOBP was built as a grassroots facility and commenced operations in 1957. Significant investments were undertaken in 2002. The distribution and logistics system for LOBP relies on six packaged carriers, three bulk carriers and one inbound carrier to distribute the products. Our LOBP is also supported by warehouses in Duque de Caxias and Manaus.  For our direct sales, we have significant strategic alliances with global OEM’s like Mercedes-Benz, Toyota, Honda, John Deere and Caterpillar covering areas such as secured volume, tailormade products and security of supply.

Cogeneration of Electrical Power

Sugarcane is composed of water, fibers, sucrose and other sugar molecules (glucose and fructose) and minerals. When the sugarcane goes through the milling process, we separate the water, sugar and minerals from the fibers, and are left with sugarcane bagasse. Sugarcane bagasse is an important by-product of sugarcane, and it is used as fuel for the boilers in our plants, through the so-called cogeneration process.

Cogeneration is the production of two kinds of energy—usually electricity and heat—from a single source of fuel. In our process, sugarcane bagasse is burned at very high temperatures in boilers, heating the water that is transformed into steam. This steam can be used in the form of: mechanical energy (to move crushers, for example), thermo energy (to heat the juice in the crystallization process, for example) and electricity, when this steam is used to move turbo-generators. Historically, the energy produced by Brazilian mills has not been price competitive, when compared to the low cost Brazilian hydro-electricity. Consequently, the majority of the groups in the sugar and ethanol sector have not invested in expanding their energy generation for sale, and the majority of the mills were constructed with low-pressure boilers, which are considered not to be the most efficient process.

Since 2000, the Brazilian economy has experienced significant growth, which in turn has resulted in increased demand for energy. However, hydro- and thermo-electricity have not been able to keep pace for the following reasons: (1) new hydro-electric plants are located in regions (such as the Amazon) distant from consumption centers; (2) significant lead-time is required to construct new hydro- and thermo-electric plants; (3) significant investments are required for transmission lines, pipelines (for natural gas used in thermo-electric plants) and barges; (4) significant environmental costs associated with both types of electricity generation; and (5) increased price of the fuel (natural gas) for thermo-electricity and dependence on Bolivia (principal natural gas supplier). As a result, energy prices in Brazil have been increasing and other alternative sources, such as the electricity from the cogeneration of the sugarcane bagasse, have become increasingly competitive and viable options to satisfy increasing energy demands.

All of our plants are currently energy self-sufficient and the majority of them use low-pressure boilers. In order to expand the energy cogeneration in our mills, we have to replace our current low-pressure boilers with new high-

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pressure boilers. The steam generated by burning the same amount of bagasse in high-pressure boilers will yield higher pressure and higher temperature and, in turn, turbo-generators will be able to produce significantly more electricity. Excess energy can be sold to the grid. In 2001, we invested in changing one of the boilers at Usina da Serra, which made it possible for us to generate excess electricity that we sold to Companhia Paulista de Força e Luz (CPFL), one of the largest electric power distributors in the State of São Paulo, pursuant to a ten-year power purchase agreement. The installed capacity for third-party sales of this pilot project is only 9 MW. We currently have an installed energy capacity of 793 MW per year from our 24 plants, out of which ten delivered energy to the Brazilian energy grid in fiscal year 2011. We have one additional energy cogeneration project that we expect to become operational in 2012. We estimate that by the end of 2012 we will have a total installed energy capacity of 934 MW, from which 845 MW will come from certain of our plants that will sell excess energy to the grid and a total installed energy capacity of 1,300 MW by 2016. We view our cogeneration business as strategic since it generally allows for a stable cash flow stream across commodity cycles, helping to reduce the volatility of our cash flows and operations.

Energy Cogeneration Highlights:	For Fiscal Year Ended March 31,
	2011		2010
Energy sold (GWh)		1,254.0		605.9
Net sales (R$ million) (IFRS)		194.9		93.6

In 2003, we built a successful pilot cogeneration plant at one of our mills, from which we sell surplus energy to Companhia Paulista de Força e Luz - CPFL, one of the largest electric power distributors in the State of São Paulo. We sell energy through bilateral contracts (we currently have contracts with CPFL and Grupo Rede) and through energy auctions promoted by the government, having participated in three auctions of “new energy” in 2005, 2006 and 2008.

Alternative sources of electricity, such as cogeneration from sugarcane bagasse, have become increasingly important within the Brazilian hydro-dependent energy matrix, particularly because the harvest period for sugarcane coincides with generally drier periods for hydraulic energy, when the overall energy supply is, therefore, more constricted. We are self-sufficient for our energy needs. In fiscal years 2011 and 2010, we sold 1,254 GWh and 605.9 GWh, respectively, of energy to third parties. Our primary customers are utility companies, which together accounted for approximately 35% of our cogeneration sales in fiscal year 2011 and 41.7% in fiscal year 2010. We sold our remaining excess electric energy through energy auctions.

We believe that the principal advantages of energy generated by burning sugarcane bagasse are:

· a cleaner energy derived from renewable sources, considered to be “carbon neutral”;

· highly complementary-relationship to hydro-electric energy, because sugarcane bagasse energy is generated during the crop season, which coincides with the dry period in the Brazilian Center-South region, when water supply levels are lower; and

· short lead-times to initiate operations is required.

In addition, smaller investments in transmission lines to the Brazilian power grid are required because our mills are located close to consumption centers.

Brazil’s electricity system is undergoing widespread reforms. In light of projected growth rates in the Brazilian economy, we believe that increased investments in alternative energy sources, such as cogeneration, will be required as hydro-electric energy prices continue to rise. We believe investments in cogeneration will be encouraged by the Brazilian government, which has offered incentives, such as more attractive financing lines from BNDES, for generation from sugarcane bagasse.

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Sugar Logistics

Our sugar logistics operations are run through Rumo Logística, which we believe offers an integrated and cost competitive logistics solution to sugar producers located in the Center-South of Brazil by transporting sugar from the mill by truck or rail to be loaded at its bulk sugar port terminal in Santos.  We also offer sugar storage services. Rumo Logística started in fiscal year 2010 to transport sugar by truck and rail for ourselves and other sugar producers. Rumo Logística is also the owner of the largest bulk sugar port terminal in the world at the Port of Santos with a current annual loading capacity of 10 million tons, having loaded 7.5 million tons in fiscal year 2011 and 8.1 million tons in fiscal year 2010. We are currently investing in this facility to add an additional wharf to the terminal to increase capacity from the present 10 million tons to 18 million tons by 2014. After the expansion, the port terminal will have the capacity to support 70% of the volume exported by the Center-South region sugar producers of Brazil.

Sugar Logistics Highlights:	For Fiscal Year Ended March 31,
	2011		2010
Port elevation volume (thousand tons)		7,471.0		8,124.0
Net sales (R$ million) (IFRS)		448.0		158.3

In order to expand its operations, on March 9, 2009, Rumo Logística signed a long-term agreement with América Latina Logística S.A., or ALL, providing for the transportation by ALL of raw sugar and other sugar derivatives and the expansion of ALL’s rail transport capacity through investments in ALL’s rail network.  As part of the agreement, Rumo Logística will invest up to R$1.3 billion in a rail transportation system to be operated by ALL, including rolling stock and permanent ways, modern locomotives and hopper railcars and trans-shipment warehouses. In return, ALL will provide transport services, guaranteeing (1) a minimum volume curve reaching 1.09 million tons per month during the sugar season starting in the 4th year, (2) competitive tariffs to sugar producers compared to truck transportation alternatives available to them, (3) project management in connection with the planned investments, and (4) payment of a rent per ton of sugar transported for the investments undertaken by Rumo Logística, limited to an agreed maximum.

To finance these capital expenditures, Rumo Logística has contracted R$986 million of long-term credit facilities from BNDES. In addition, on September 2, 2010, Rumo Logística closed a private placement in which it raised R$400.0 million in primary proceeds from Gávea Investimentos and TPG Capital in exchange for an aggregate 25.0% interest of the then issued and outstanding shares of Rumo Logística. We believe this recent equity capitalization, together with the financing contracted with BNDES, are sufficient to meet Rumo Logística’s R$1.3 billion investment plan.

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Competition

The sugar industry in Brazil has experienced increased consolidation through merger and acquisition activity during the last several years. Most of this activity has involved companies and facilities located in the Center-South region of Brazil, one of the most productive sugar producing regions in the world. Despite this recent wave of consolidation, the industry remains highly fragmented with more than 320 sugar mills and 100 company groups participating. We are the largest ethanol and sugar producer in the world in terms of production volume and sales, with 54.3 million tons of crushed sugarcane in fiscal year 2011.

Many ethanol and sugar producers in Brazil market their ethanol and sugar products through the Copersucar. Copersucar is a private cooperative that was created in 1959 by 10 sugar mills in the State of São Paulo in order to provide a shared commercial distribution for their ethanol and sugar production. Currently, Copersucar is comprised of 38 producers in the states of São Paulo, Minas Gerais and Paraná. During the 2010/2011 harvest, Copersucar’s affiliated mills crushed approximately 91 million tons of sugarcane.

We also face competition from international sugar producers. We are the largest sugar producer in Brazil and the third largest sugar producer in the world with 3.9 million tons of sugar produced in the 2010/2011 harvest, behind British Sugar (4.4 million tons of sugar produced in the 2010/2011 harvest) and Südzucker AG of Germany (with 4.3 million tons of sugar produced in the same period). These producers, however, are the beneficiaries of considerable governmental subsidies in their principal sales markets.

In the fuel the distribution business, we are subject to competition, both from companies in the industries in which we operate and from companies in other industries that produce similar products. Our competitors include service stations of large integrated oil companies, independent gasoline service stations, convenience stores, fast food stores, and other similar retail outlets, some of which are well-recognized national or regional retail systems. The Brazilian fuel distribution industry has consolidated significantly in recent years, with the five major distributors increasing their combined market share from 65.2% in 2000 to 76.1% in 2009. The top-five distributors in Brazil are: Petrobras, operating through the BR Distribuidora brand, Ultrapar S.A., through the Ipiranga and Texaco brands, Shell Brasil Ltda., a subsidiary of Royal Dutch Shell, CLE, through the Esso brand, and AleSat Combustíveis S.A., a domestic Brazilian fuels distribution. The principal competitive factors affecting the retail marketing operations include site location, product price, selection and quality, site appearance and cleanliness, hours of operation, store safety, customer loyalty and brand recognition. We believe that we are in a strong position to compete effectively on ethanol due to the synergies that further integration with Cosan will bring.

We also face competition from international ethanol producers that use other ethanol sources, such as corn and sugar beet for the generation of fuel ethanol.

Trademarks

We have 141 trademarks registered with the National Intellectual Property Institute, or “INPI”, along with 60 pending trademark registration requests. Our principal trademarks, União and Da Barra, are registered with INPI in multiple classes, which allow us to use these trademarks in the sugar, chocolate and various other markets.

CLE is licensed to use ExxonMobil trademarks. CLE has a ten-year agreement for lubricants, with ExxonMobil, expiring in 2018, renewable at ExxonMobil’s sole discretion, for the use of the Esso and Mobil brands, among others.

Research and Development

Crop Monitoring

In 2002, we established a partnership with the University of Campinas (Universidade de Campinas), or UNICAMP, to develop a geographic information system to improve the monitoring of our crops. Through this partnership, we have developed a tool that monitors the sugarcane crops with the use of satellite images. By using the system we are able to have more accurately production estimative. Further, we are able to get extremely detailed information on the state of our crops, which gives us the opportunity to improve the procedures of agricultural crop treatment. Currently, we monitor all land where we produce sugarcane, either in our own land, on leased areas or areas of suppliers.

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Development of Sugarcane Varieties and other Products

We have agreements with the following technological institutes for the development of new varieties of sugarcane: Sugarcane Technology Center (Centro de Tecnologia Canavieira), or “CTC”, in which we are a major shareholder; Federal University of São Carlos (Universidade Federal de São Carlos), and Research Agronomical Institute (Instituto Agronômico de Pesquisa). CTC is a private institution focused on research and development of new technologies for agricultural activities, logistics, and industry, as well as creating new varieties of sugarcane. CTC has already developed biological ways for controlling pests and biodegradable plastic (PHB), and also created a VVHP-type (very, very high polarization) sugar that requires less energy to be processed, and cogeneration technology.

We also analyze and develop different products used to facilitate and enhance the growth of sugarcane, such as herbicides and fertilizers, also taking into consideration the different conditions of our sugarcane fields. We share this technology with our sugarcane suppliers to enable them to enjoy higher yields and better quality sugarcane.

In June 2006, we engaged CanaVialis S.A., or “CanaVialis”, to provide Cosan S.A. access to its sugarcane genetic improvement program specifically tailored to our mills. CanaVialis, which is affiliated with Monsanto, is Brazil’s only privately-owned firm focused on the genetic improvement of sugarcane. We believe we will benefit from their support services and use of their biofactory (the largest in Brazil), which will allow us to decrease the amount of time required for seedling production and grant us access to new, improved sugarcane varieties through their genetic improvement program. CanaVialis set up an experimental station in our Destivale mill, which began testing new species of sugarcane especially selected for Cosan S.A.’s production framework.

We invested approximately R$ 5.6 million (US$ 3.4 million) in research and development in fiscal year 2010. In 2011, we invested R$ 2.7 million.

Sugarcane varieties for greenfields

We have also identified other areas where we can build additional greenfield projects. We believe Brazil has land available to expand sugarcane plantations. The areas where we believe there is potential for sugarcane growth are illustrated below:

We have collected weather and soil data for all these areas. However, in order to obtain the productivity levels that we expect, we will first establish field trials to identify the varieties that can be cultivated in each target region.

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We will select sugarcane varieties adapted to each target region through a customized genetic selection program. For that purpose, we intend to establish up to ten small field stations in the regions specified in the right side map above.

CanaVialis has been working with Cosan to organize this network of stations and to ensure the quality of the field trials and the region-specific genetic selection program. Approximately US$25.0 million of the net proceeds of our initial public offering were used in funding this network of field stations over six years. We plan to use advanced genetic research provided by CanaVialis to select and breed sugarcane varieties for each of these new production environments.

In December 2009, Cosan S.A. and Amyris S.A. entered into a letter of intent agreement for the adoption of technology developed by Amyris for the production of biofuels with high added value in one of our mills. Together, we plan to invest up to R$50 million. This investment will also allow for the production of farnasene, a chemical component that results from fermentation of sugarcane syrup with yeasts. Cosan and Amyris are currently studying how to implement the partnership and obtain the required capital for the project.

Cosan S.A. and Amyris announced on June 13, 2011 that they have executed a Joint Venture Implementation Agreement as the final step toward the commencement of operations in Novvi SA, the Brazilian company established for the worldwide development, production and commercialization of renewable base oils made from Biofene, Amyris’ renewable farnesene. In December 2010, the parties executed an agreement to set the preliminary terms and the general conditions to conduct a set of business, technical and commercial studies and tests with the goal to assess the feasibility of the formation and implementation of a joint venture. The parties have now completed feasibility studies and are establishing the operating joint venture entity.

Environmental Regulations

We are subject to various Brazilian federal, state and local environmental protection and health and safety laws and regulations as well as foreign environmental protection and health and safety laws and regulations governing, among other things:

· the generation, storage, handling, use and transportation of hazardous materials;

· the emission and discharge of hazardous materials into the ground, air or water; and

· the health and safety of our employees.

We may not have been or may not be at all times in complete compliance with such laws and regulations. Violation of these laws and regulations can result in substantial fines, administrative sanctions, criminal penalties, revocations of operating permits and/or shutdowns of our facilities.

We may be required to repair or remediate environmental damage we cause, as well as damage caused by third-party subcontractors. Additionally, under certain environmental laws, we could be held strictly liable for all of the costs relating to any contamination at our or our predecessors’ current and former facilities and at third-party waste disposal sites. We could also be held liable for any and all consequences arising out of human exposure to hazardous substances such as pesticides and herbicides or other environmental damage.

Permits. Certain environmental laws also require us to obtain from governmental authorities permits, licenses and authorizations to install and operate our mills, to burn sugarcane, and to perform some of our other operations. In addition, under federal and state laws, we are required to obtain authorizations to use water resources for irrigation and industrial purposes. Violations of such laws and regulations can result in the revocation or modification of our licenses, permits and authorizations, as well as administrative sanctions, fines and injunctions for the individuals and entities involved.

In Brazil, prior to the construction, setting up, extension or operation of facilities or the performance of activities that use natural resources or that may have a current or potential polluting effect, environmental licenses must be obtained from the proper federal, state and/or municipal governmental authorities. In issuing such environmental licenses, the competent governmental authority establishes conditions, restrictions and inspection measures applicable to the project, according to environmental laws and administrative regulations, including pollution control and environmental management requirements.

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We are subject to the regulations of the Companhia de Tecnologia de Saneamento Ambiental—CETESB, the pollution control and remediation agency of the State of São Paulo, the AGMA – Agência Goiana de Meio-Ambiente, the pollution control and remediation agency of the State of Goiás and the IMASUL – Instituto de Meio-Ambiente do Mato Grosso do Sul, the pollution control and remediation agency of the State of Mato Grosso do Sul.

Environmental Licensing of Cosan. On March 31, 2011, we operated 24 mills (comprising four sugar refineries), two port facilities and numerous warehouses. All 24 mills obtained environmental operating licenses. Our port facilities have been excused from obtaining an installation license, which is granted to authorize setting up the project based on specifications provided for in the approved plans, programs and designs, including measures of environmental control and further conditions. We have obtained 10 operating licenses for our generation projects and we are in the process of obtaining licenses for two other cogeneration projects that will start operating in the next two years.

Sugarcane Burning. São Paulo state and certain local governments have established laws and regulations that limit our ability to burn sugarcane or that reduce and/or eliminate the burning of sugarcane entirely. São Paulo State regulation establishes that sugarcane burning must end by 2021 in areas where the terrain allows for mechanized harvesting, and by 2031 in all other areas. We have voluntarily committed ourselves to the Agri-Environmental Sugarcane Protocol, which establishes accelerated deadlines for the reduction of sugarcane burning. By signing this protocol, we committed to eliminate the sugarcane burning by 2014 in mechanized areas and by 2017 in non-mechanized areas. For our new plantation areas we have committed not to burn sugarcane.

For areas that are suitable for the replacement of a manual with a mechanical harvest, the burning of sugarcane must be reduced as follows:

· 70% of the harvested area by 2010; and

· 100% of the harvested area by 2014.

For areas that do not technically allow the replacement of a manual harvest for a mechanical harvest, the burning of sugarcane must be reduced as follows:

· 30% of the harvested area by 2010; and

· 100% of the harvested area by 2017.

Sugarcane producers are also required to burn sugarcane at least one kilometer from urban centers, at least 25 meters from telecommunication stations, at least 15 meters from electricity transmission and distribution lines and at least 15 meters from federal and state railways and highways. The law requires sugarcane producers to give prior notice of the burning of sugarcane to the State of São Paulo Department for the Protection of Natural Resources (Departamento Estadual de Proteção de Recursos Naturais), and to the owners of lands surrounding the area where the sugarcane will be burned.

Certain local governments have recently enacted more stringent laws that prohibit sugarcane burning completely. It is unclear at this point which, if any, of our properties might be affected by these local laws. In addition, the laws in this area are uncertain, complex and subject to change at any time.

There is a likelihood that increasingly stringent regulations relating to the burning of sugarcane will be imposed by the State of São Paulo and other governmental agencies in the near future. As a result, the costs to comply with existing or new laws or regulations are likely to increase, our ability to operate our own plants and harvest our sugarcane crops may be adversely impacted, and the price we may have to pay to purchase already processed sugar may increase.

Our actual or alleged failure to comply with these laws and regulations has subjected and will in the future subject us to legal and administrative actions. These actions can impose civil or criminal penalties on the company, including a requirement to pay penalties or fines, an obligation to make capital and other expenditures or an obligation to materially change or cease some operations.

We cannot assure you that the above costs, liabilities and adverse impacts to our operations will not result in a material adverse effect on our business, results of operations or financial condition.

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Brazilian Forestry Code. We are subject to the Brazilian Forestry Code, which prohibits land use in certain permanently protected areas, and obligates us to maintain and register a forestry reserve in each of our rural landholdings covering at least 20% of the total area of such land. In those properties where the legal forestry reserve does not meet the legal minimum, we are permitted to perform gradual reforestation until 100% of the legal forestry reserve is restored. We are currently performing the gradual reforestation of our properties and are in the process of recording this reforestation in the registries of our landholdings, as required by applicable law. If we violate or fail to comply with the Brazilian Forestry Code, we could be fined or otherwise sanctioned by regulators.

Environmental Proceedings. We are party to a number of administrative and judicial proceedings for actual or alleged failure to comply with environmental laws and regulations which may result in fines, shutdowns, or other adverse effects on our operations.

Non-compliance with environmental law is subject to administrative, civil and/or criminal sanctions.

· Civil Liability: Brazilian law provides for strict and joint and several liability for polluters (i.e. persons or legal entities, private or public, which are directly or indirectly responsible for an activity that causes environmental damage). Strict liability means that a party can be held responsible regardless of its knowledge, fault and degree of care or intent. Joint and several liability means that any individual party directly or indirectly involved with the cause of the damage may be sued for the entire amount of such damage, with the right to proportionally recover the losses from the other responsible parties.

In public civil actions against polluters, the plaintiff may seek money damages or specific performance to, among other things, (1) discontinue polluting activities; (2) restore the environment; or (3) fulfill any environmental law requirement. Usually money damages are awarded to plaintiffs as compensation for losses or are imposed on polluters when the environment may not be restored. The plaintiff may also obtain preliminary or temporary injunctions against polluters by proving the existence of irreparable damages to the environment or public health.

· Criminal and administrative liability: Brazilian law provides for significant administrative and criminal sanctions against legal entities and individuals that violate regulations regarding the protection of natural resources, pollution control and fuel leaks. The sanctions for administrative infractions include: (1) warnings, (2) fines, which may range from R$50 to R$50 million (US$27.93 to US$27.9 million) that can be doubled or tripled in case of recidivism, (3) partial or total interruption or suspension of business operations, (4) demolition, (5) cancellation of licenses, (6) loss or restriction of tax incentives and benefits, (7) loss or suspension of eligibility for credit lines with official credit institutions, and (8) prohibition from contracting with the government. The criminal penalties imposed may involve imprisonment or confinement, may limit or restrict certain rights (such as the temporary suspension or cancellation of an authorization, or prohibition to contract with public bodies), and may also include a monetary penalty.

We have made and expect to make substantial capital expenditures on an ongoing basis to continue to ensure our compliance with environmental laws and regulations, including those mentioned above. Our environmental compliance costs are likely to increase as a result of the projected increase in our production capacity. In addition, as a result of future expansion of our activities, as well as future regulatory and other developments, the amount and timing of future expenditures required for us to remain in compliance with environmental regulations could increase substantially from their current levels.

Insurance

Cosan S.A. maintains insurance covering all of our inventory of ethanol and sugar and buildings and equipment in certain of our mills, against fire, lightning and explosions of any nature, in an aggregate amount of approximately R$4.5 billion (R$ 3.7 billion or US$2.4 billion). Our inventories of ethanol and sugar located in different mills and warehouses are covered by insurance policies that are annually renewed.

Cosan Portuária/Teaçu maintains civil liability insurance providing protection against any damage caused to third parties in its warehouses, equipment and third parties goods and boats in an aggregate amount equal to approximately R$232 million (US$124 million). Cosan Portuária/Teaçu also maintains employers’ civil liability insurance.

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CLE maintains real property insurance against fire, lightning and explosions of its buildings and equipments. The inventories of fuels and lubricants are located in warehouses and are insured under a policy that expires in October 2011. CLE also maintains insurance covering buildings and equipment located in certain terminals, warehouses, tanks, other facilities and services stations. CLE maintains an insurance policy covering products that are transported by truck, ship, ferry and trains. CLE maintains a third party liability policy covering damages to third parties.

We do not anticipate having any difficulties in renewing any of our insurance policies and believe that our insurance coverage is reasonable in amount and consistent with industry standards in Brazil.

C. Organizational Structure

The list of subsidiaries included in our audited consolidated financial statements for fiscal year 2011 and fiscal year 2010 is included in Note 2.2 to our consolidated financial statements attached hereto. See also exhibit 8.1 to this Annual Report.

D. Property, Plant and Equipment

The following table sets forth the amounts related to property, plant and equipment at the end of fiscal year 2011 and fiscal year 2010:

	As of March 31,
	2011			2010
	(R$ million)
Land and rural properties		1,263.2			1,041.8
Buildings and improvements		1,122.3			933.3
Machinery and equipment		4,980.4			3,607.2
Aircraft		30.9			18.1
Rail cars and locomotives		341.6			0
Boats and vehicles		323.0			223.3
Furniture, fixtures and computer equipment		137.2			119.1
Construction in progress		1,218.8			1,408.3
Advances for purchase of property, plant and equipment		148.9			200.6
Parts and components to be periodically replaced		1,043.3			557.4
Other		5			1
		10,614.6			8,110.1
Accumulated depreciation and amortization		(2,634.0	)		(1,995.6	)
Total		7,980.6			6,114.5

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The following table sets forth the types of products produced by and the production capacity and production volumes of each of our mills for the periods indicated:

Name	Products	Annual Crushing Capacity		Sugarcane Volume Processed
				For Fiscal Ended March 31,				Crop		Crop
				2011		2010			2010/2011		2009/2010
		(in millions of tons)
Da Barra	sugar, ethanol and cogeneration		8.20		6.37		7.10		6.37		7.10
Bonfim	sugar, ethanol and cogeneration		4.32		4.30		4.22		4.30		4.22
Costa Pinto	sugar, ethanol and cogeneration		4.64		4.05		4.53		4.05		4.53
Junqueira	sugar, ethanol and cogeneration		3.12		2.86		2.95		2.86		2.95
Rafard	sugar, ethanol and cogeneration		2.84		2.21		2.45		2.21		2.45
Univalem	sugar, ethanol and cogeneration		2.79		2.33		2.11		2.33		2.10
Santa Helena	sugar, ethanol and cogeneration		2.47		1.81		2.04		1.81		2.04
Ipaussu	sugar, ethanol and cogeneration		2.33		1.95		2.03		1.95		2.03
Diamante	sugar, ethanol and cogeneration		2.31		2.06		2.05		2.06		2.05
Serra	sugar, ethanol and cogeneration		2.16		1.91		1.91		1.91		1.91
Tamoio	sugar and cogeneration		1.57		1.28		1.30		1.28		1.30
São Francisco	sugar and cogeneration		1.82		1.41		1.54		1.41		1.54
Dois Córregos	sugar, ethanol and cogeneration		1.67		1.44		1.39		1.44		1.39
Destivale	sugar, ethanol and cogeneration		1.62		1.42		1.41		1.42		1.41
Mundial	sugar, ethanol and cogeneration		1.47		1.44		1.27		1.44		1.27
Gasa	sugar, ethanol and cogeneration		2.09		3.34		2.95		3.34		2.95
Bom Retiro	sugar, ethanol and cogeneration		1.49		1.17		1.32		1.17		1.32
Benálcool	sugar, ethanol and cogeneration		1.22		1.08		1.02		1.08		1.02
Jataí	sugar, ethanol and cogeneration		2.1		1.94		0.34		1.94		0.34
Caarapó	sugar, ethanol and cogeneration		2.0		1.86		0.14		1.86		0.03
Tarumá	sugar, ethanol and cogeneration		4.50		3.89		3.07		3.89		4.18
Maracaí	sugar, ethanol and cogeneration		3.50		3.27		2.36		3.27		3.23
Paralcool	sugar, ethanol and cogeneration		1.29		1.09		0.81		1.09		1.05
Araraquara….	sugar, ethanol and cogeneration		(a)

(a) Mill acquired in March 2011

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The following map shows the location of our mills:

During the last several years, our business has grown mainly due to acquisitions and investments in greenfield projects.  Because of the increase in acquisition prices in recent years, we started to invest in the expansion of certain of our mills to improve our overall crushing capacity.

We estimate that we may gain up to an additional  10 million tons of crushing capacity in the next few years upon investing approximately R$ 1,140.0 million, if we decide to continue with these projects on the existing mills (brownfield). We believe that our expansion plans provide us with the following benefits: (1) investments per ton of additional crushing capacity are significantly lower than the current relative acquisition costs in the Brazilian market; and (2) expanding our mills will allow us to gain scale and improve our production processes, thereby reducing operating costs and improving yields.

Item 4A. Unresolved Staff Comments

None.

Item 5. Operating and Financial Review and Prospects

You should read the following discussion along with our audited consolidated financial statements and the related notes to our audited consolidated financial statements as of and for fiscal year 2011, the fiscal year ended 2010. The following discussion contains forward-looking statements that are subject to risks, uncertainties and assumptions, including those discussed under “Item 3. Key Information—D. Risk Factors” and described in this annual report generally. Our actual results, performance and achievements may differ materially from those expressed in, or implied by, these forward-looking statements. See “Forward-Looking Statements.”

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Consolidated Financial Statements

The discussion in this section is based on our audited consolidated financial statements at March 31, 2011 and March 31, 2010 and for the fiscal years ended March 31, 2011 and 2010. We use IFRS for financial reporting purposes. Our audited consolidated financial statements include the financial statements of the Company and its controlled subsidiaries (i.e., companies as to which the Company holds an ownership interest greater than 50%). Investments in entities in which the Company does not control but has significant influence over managing the business, are accounted for using the equity method. All significant intercompany accounts and transactions are eliminated upon consolidation.

Segment Presentation

In connection with some management changes and realignment of the business, we combined the previously separate sugar and ethanol segments into the Sugar and Ethanol segment. As of March 31, 2011, we operated in three segments: sugar and ethanol (“S&E”); fuel and lubricants  (“CCL”) and distribution and sugar logistics (“Rumo Logística”). The sugar and ethanol segment mainly operates and produces a broad variety of sugar products, including raw, organic, crystal and refined sugars and consumer products under the “Da Barra” and “União” brands, which are sold to a wide range of customers in Brazil and abroad, as well as produces and sells hydrous, anhydrous and industrial ethanol, which are sold primarily to the Brazilian market. The sugar and ethanol segment also includes our energy co-generation activities and land development businesses. We have retained the fuel and lubricants distribution segment which principally distributes fuels and also produces and sells lubricants. Finally, the acquisition in fiscal year 2010 of Teaçú and Curupay, and their combination with our Novo Rumo business makes up our new operating segment called Sugar Logistics. The Sugar Logistics segment provides logistics services for the transport, storage and port lifting of sugar for us and third parties. Because we use the same assets to produce products for both our Brazilian and export markets, we do not identify assets by market. See Note 29 of our consolidated financial statements attached hereto.

Factors Affecting Our Results of Operations

Our results of operations have been influenced and will continue to be influenced by the following key factors:

Acquisitions, Partnerships and Corporate Restructurings

Since May 2004, we have expanded our annual sugarcane crushing capacity by approximately 162% from 24.8 million tons to approximately 65 million tons as of March 31, 2011, primarily through acquisitions, partnerships and corporate restructurings (the completion of the Nova América acquisition in June 2009 added 10.6 million tons to our sugarcane crushing capacity). As a result of these acquisitions, partnerships and corporate restructurings, our net sales and gross profit have increased significantly. However, we have not realized all of the expected cost savings from these transactions, as they have also increased our sugarcane planting-related general and administrative expenses and capital expenditures in order to improve the condition of certain sugarcane fields that we acquired under these transactions. See “Item 4. Information on the Company—A. History and Development of the Company—Acquisitions, Partnerships and Corporate Restructurings.”

Sugar

The profitability of our sugar products is principally affected by fluctuations in the international price of raw sugar and in the real/dollar exchange rate. International raw sugar prices are determined based on the New York Board of Trade Futures Contract No. 11, or “NY11”. Refined sugar trades at a premium to raw sugar, known as the “white premium”, and its price is determined based on the London International Financial Futures and Options Exchange Contract No. 5, or “LIFFE No. 5”. Prices are affected by the perceived and actual supply and demand for sugar and its substitute products. The supply of sugar is affected by weather conditions, governmental trade policies and regulations and the amount of sugarcane and sugar beet planted by farmers, including substitution by farmers of other agricultural commodities for sugarcane or sugar beet. Demand is affected by growth in worldwide consumption of sugar and the prices of substitute sugar products. From time to time, imbalances may occur between overall sugarcane and sugar beet processing capacity, sugarcane and sugar beet supply and the demand for sugar products. Prices of sugar products are also affected by these imbalances, which, in turn, impact our decisions regarding whether and when to purchase, store or process sugarcane, to produce sugar or whether to produce more ethanol.

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The table below sets forth the prices for raw sugar NY11 for the periods indicated:

	Sugar NY11 (US$/lb)
	For Fiscal Year Ended March 31,
	2011		2010
Initial quote		0.1670		0.1273
Closing quote		0.2711		0.1659
Daily average quote		0.2376		0.2080
Monthly average quote		0.2391		0.2138
High quote		0.3531		0.2990
Low quote		0.1367		0.1222

Source: NYBOT; prices from the 1st Generic Future

The table below sets forth the prices for refined sugar LIFFE for the periods indicated:

	Sugar LIFE (US$/ton)
	For Fiscal Year Ended March 31,
	2011		2010
Initial quote		481,60		399.20
Closing quote		711.70		504.00
Daily average quote		639.66		557.03
Monthly average quote		643.84		569.97
High quote		844.50		759.00
Low quote		437.80		392.70

Source: LIFFE; prices from the 1st Generic Future

Ethanol

Our ethanol products are affected by domestic Brazilian and international prices of ethanol, competition, governmental policies and regulations and market demand for ethanol as an alternative or additive to gasoline. The price for ethanol we sell in Brazil is set in accordance with market prices, using indices published by the Agriculture School of the University of São Paulo (Escola Superior de Agricultura Luiz de Queiroz—ESALQ) and BM&FBOVESPA as a reference. Prices for ethanol we export are set based on international market prices, including the New York Board of Trade’s recently-launched ethanol futures contract. Prices for the industrial alcohol and bottled alcohol products we sell are also set based on market prices and have been historically higher than market prices for ethanol.

The table below sets forth the prices for hydrous ethanol in the Brazilian market for the periods indicated:

	Hydrous Ethanol Esalq (US$/thousand liters)
	For Fiscal Year Ended March 31,
	2011		2010
Initial quote		431.10		248.62
Closing quote		982.20		420.11
Daily average quote		557.85		453.91
Monthly average quote		576.22		455.01
High quote		982.20		677.14
Low quote		381.10		248.62

Source: ESALQ.

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The table below sets forth the prices for anhydrous ethanol in the Brazilian market for the periods indicated:

	Anhydrous Ethanol Esalq (US$/thousand liters)
	For Fiscal Year Ended March 31,
	2011		2010
Initial quote		495.70		286.43
Closing quote		1.157.20		489.18
Daily average quote		636.49		518.70
Monthly average quote		662.19		518.87
High quote		1.157.20		734.09
Low quote		435.60		286.43

Source: ESALQ.

Demand for Fuels

Demand for gasoline, ethanol and diesel is susceptible to volatility related to the level of economic activity in Brazil and may also fluctuate depending on the performance of specific industries in the Brazilian market. We expect that a decrease in economic activity would adversely affect demand for fuels.

While Brazil’s GDP decreased by 0.2% in 2009 amid the ongoing global economic crisis, Brazil was among the first major economies to recover from the crisis, experiencing strong GDP growth of 7.5% in 2010.  Over the past few years, generally positive economic trends coupled with the availability of credit have resulted in record levels of vehicle sales. Moreover, despite record sales, the current vehicle fleet in Brazil is small compared to other Latin American countries, with 7.2 inhabitants per vehicle, whereas Argentina has 4.9 and the U.S. has 1.2 inhabitants per vehicle, according to ANFAVEA.  Economic slowdowns tend to have a greater impact on the sales of diesel fuel, which is primarily used in Brazil by trucks and industrial businesses most affected by a slowdown in the economy.  We expect demand for our products, particularly diesel fuels, to continue to be closely tied to economic activity.

Currency Fluctuations

In fiscal year 2011, 84.9% of our net sales were invoiced in reais and 15.1% of our net sales were invoiced in U.S. dollars or linked to dollar prices. A devaluation of the real affects our consolidated financial statements by:

· reducing our real-denominated net sales as a result of the translation of those results into U.S. dollars for consolidation purposes;

· reducing our real-denominated costs of goods sold, selling, general and administrative expenses, as well as other real-denominated operating costs as a result of the translation of those amounts for consolidation purposes into U.S. dollars;

· generating foreign exchange transaction gains on U.S. dollar-denominated monetary assets and foreign exchange liabilities on U.S. dollar-denominated liabilities of our Brazilian subsidiaries, which are reflected in our consolidated statement of operations;

· generating financial losses based on changes in market value of our financial derivatives; and

· indirectly affecting the international market price of sugar.

Similarly, an appreciation of the real in relation to the U.S. dollar would have opposite effects.

Seasonality

Our business is subject to seasonal trends based on the sugarcane growing cycle in the Center-South region of Brazil. The annual sugarcane harvesting period in the Center-South region of Brazil begins in April and ends in December. This creates fluctuations in our inventory, usually peaking in December to cover sales between crop harvest (i.e., January through March), and a degree of seasonality in our gross profit.

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Inflation

Inflation rates in Brazil were 12.1% in 2004, 1.2% in 2005, 3.8% in 2006, 7.7% in 2007, and 9.1% in 2008, negative 1.43% in 2009, and 6.3% in 2010 as measured by the General Price Index—Internal Availability. Inflation affects our financial performance by increasing certain of our operating expenses denominated in reais (and not linked to the U.S. dollar). These operating expenses include labor costs, leases, selling and general administrative expenses. However, inflation did not have a material impact on our business for the periods presented.

Cost Structure

Our cost structure may be divided into costs that are linked to the prices of our products and costs that are not linked to the prices of our products. Two of our principal cost components, raw materials and land leases, are linked to the prices of our products. Accordingly, we adjust the prices of our products to follow fluctuations in the cost of our raw materials and leased land, substantially minimizing the impact of this cost volatility on our results of operations. In addition, another relevant portion of our costs is represented by agricultural and industrial inputs, some of which are imported and which are also subject to price fluctuations primarily as a result of exchange rate variations. As the majority of our net sales are derived from exports, a substantial portion of fluctuations in the costs of these inputs is offset by similar fluctuations in our Brazilian and international prices, substantially minimizing the impact of this cost volatility on our results of operations.

Other Factors

Other factors that will impact the results of our ethanol and sugar operations include:

· hedging transactions (as discussed under “Hedging Transactions and Exposures”);

· trade barriers in U.S., European and other markets that currently limit access to their domestic sugar industry through quotas, subsidies and restrictions on imports;

· the evolving use of ethanol derivatives as an alternative to oil derivatives and as a cleaner-burning fuel, derived from renewable sources;

· the use of ethanol as a cleaner-burning fuel, derived from renewable sources;

· changes in international prices of oil (denominated in U.S. dollars) and related changes in the domestic prices of oil (denominated in reais );

· the growth rate of the global economy and its resulting corresponding growth in worldwide sugar consumption;

· the growth rate of Brazil’s gross domestic product, which impacts the demand for our products and, consequently, our sales volume in Brazil; and

· the tax policies adopted by the Brazilian federal government and the governments of the Brazilian states in which we operate, and our resulting tax obligations.

Critical Accounting Policies

The preparation of the Company’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the end of the reporting period. Such estimates and assumptions are reviewed on a continuous basis and changes are recognized in the period in which the estimates are revised and in any future periods affected.

A significant change in the facts and circumstances on which judgments, estimates and assumptions are based, may cause a material impact on the results and financial condition of the Company. The significant judgments, estimates and assumptions under IFRS are as follows:

59

Deferred income taxes and social contribution. Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. For further detail on deferred income taxes see Note 18 of our consolidated financial statements attached hereto.

Biological Assets. Biological assets are measured at fair value at each reporting date and the effects of changes in fair value between the periods are allocated directly to cost of goods sold. For further detail on the assumptions used see Note 13 of our consolidated financial statements attached hereto.

Sugar production depends on the volume and sucrose content of sugarcane grown or supplied by farmers located near the plants. The yield of the crop and the sucrose content in sugarcane mainly depend on weather conditions such as rainfall rate and temperature, which may vary. Historically, weather conditions have caused volatility in the ethanol and sugar, and consequently in our operating results because they undermine or reduce crop yields. Future climate conditions may reduce the amount of sugar and sugarcane that the Company will obtain in a particular season or in the sucrose content of sugarcane. Additionally, our business is subject to seasonality according to the growth cycle of sugarcane in South-Central region of Brazil. The period of annual harvest of sugarcane in South-Central region of Brazil begins in April / May and ends in November / December. This creates variations in stock, usually high in November to cover sales between crop (i.e. from December to April) and a degree of seasonality in gross profit from sales of ethanol and sugar significantly lower in the last quarter of fiscal year. The seasonality and any reduction in the volume of sugar recovered could have a material adverse effect on our operating results and financial condition.

Intangible assets and Property, Plant and Equipment (“P,P&E”). The calculation of depreciation and amortization of intangible assets and P,P&E includes the estimation of the useful lives. Also, the determination of the acquisition date fair value of intangible assets and P,P&E acquired in business combinations is a significant estimate. The Company annually performs a review of impairment indicators for intangible assets and P,P&E. Also, an impairment test is undertaken for goodwill. An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The key assumptions used to determine the recoverable amount for the different cash generating units for which goodwill is allocated are further explained in Note 15 of our consolidated financial statements attached hereto.

Share based payments. Cosan S.A. measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The estimation of fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the assumption of the expected life of the share option, volatility and dividend yield. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 29 of our consolidated financial statements attached hereto.

Pension benefits. The cost of defined benefit pension plans and other post employment medical benefits and the present value of the pension obligation is determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual results in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. A defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about the assumptions used are included in Note 27 of our consolidated financial statements attached hereto.

Fair value measurement of contingent consideration. Contingent consideration, resulting from business combinations, is valued at fair value at the acquisition date. Further details about the assumptions used in accounting for business combinations are included in Note 19 of our consolidated financial statements attached hereto.

Fair value of financial instruments. When the fair value of financial assets and liabilities recorded in the statement of financial position cannot be derived from active markets, their fair value is determined using valuation techniques including the discounted cash flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. For further details on financial instruments refer to Note 26 of our consolidated financial statements attached hereto.

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Hedging Transactions and Exposures

We hedge part of the future price risk of our sugar production estimated to be exported and exchange rate derivative transactions, using future contracts, options and swaps.

Starting April 1, 2010, we adopted hedge accounting in the cash flow hedge category for certain financial derivative instruments designated for covering price risk and foreign exchange variance risk on revenues from sugar exports.  It should be noted that in fiscal year 2010, we did not adopt hedge accounting, and as a consequence the results from derivatives in fiscal years 2011 and 2010 are not comparable since the gains and losses from derivative instruments in the current year financial results refer only to the derivative instruments not designed for hedge accounting and the non-effective portion of the designed hedge.

At March 31, 2011 we had 1,308.7  thousand tons of sugar hedged through Sugar #11 Future contracts at the average price of US$21.9 per pound while the NY11 price was US$27.1 per pound. The market value of the future derivatives portfolio on March 31, 2011 was R$ 86.4 million. We had foreign currency derivatives with a notional amount of R$ 580.4 million hedged through futures and forward contracts (net position) at the average rate of R$1.73 per US$1.00, while the existing exchange rate was R$1.687 per US$1.00, resulting in a market value of R$ 9.8 million.

Our hedging strategy seeks to protect us from cash flow risks caused by commodities price and exchange rates fluctuations. However, because we record derivatives at fair value, fluctuations in such derivative prices may cause significant fluctuations in our net profit in the future resulting from the mark to market accounting. We recorded gains of R$54.7 million relating to our derivative transactions in fiscal year 2011, R$ 354.8 million relating to our derivative transactions in fiscal year 2010.

A. Operating Results

The following discussion of our results of operations is based on the financial information derived from our audited consolidated financial statements prepared in accordance with IFRS, unless otherwise stated. In the following discussion, references to increases or decreases in any year are made by comparison with the corresponding prior year, as applicable, except as the context otherwise indicates.

Fiscal Year Ended March 31, 2011 compared to Fiscal Year Ended March 31, 2010

Consolidated Results

The following table sets forth our condensed consolidated income statement for the fiscal years ended March 31, 2011 and 2010:

	For Fiscal Year Ended March 31,
	2011			2010			% Variation
	(in millions of reais, except percentages)
Consolidated Income Statement
Net sales		18,063.5			15,336.1			17.8
Cost of goods sold		(15,150.1	)		(13,271.3	)		14.2
Gross profit		2,913.4			2,064.7			41.1
Selling expenses		(1,026.0	)		(862.7	)		18.9
General and administrative expenses		(545.4	)		(501,6	)		8.7
Other, net		(33.8	)		37.5			(190.1	)
Gain on tax recovery program		—			270.3			—
Operational income / (expenses)		(1,605.2	)		(1,056.5	)		51.9
Income before financial results, equity income of associates and income taxes		1,308.2			1,008.2			29.7
Equity income of associates		25.2			4.2			500.0
Financial results, net		(151.1	)		493.4			(130.6	)
Income before income taxes		1,182.3			1,505.8			(21.5	)
Income taxes:
Current		(85.4	)		(78.4	)		8.9
Deferred		(329.1	)		(344.9	)		4.6
Net income for the year		767.8			1,082.5			(29.1	)

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Net Sales

We report net sales after deducting Brazilian federal and state taxes assessed on gross sales (ICMS, PIS, COFINS, IPI and INSS). Deductions from gross sales in the Brazilian domestic market, which are subject to these taxes, are significantly greater than our deductions from gross sales in export markets. Total sales deductions can be broken down as follows:

· ICMS taxes. ICMS is a state value-added tax assessed on our gross sales in the Brazilian market at a rate that varies by state and product.

· PIS and COFINS taxes. PIS and the COFINS taxes are federal social contribution taxes assessed on our gross sales in the Brazilian market at rates that vary by product.

· IPI taxes. IPI is a federal value-added tax assessed on our gross sales in the Brazilian market at rates that vary by product.

· INSS taxes. INSS taxes are federal social contribution taxes assessed on our gross sales in the Brazilian market of our agribusiness entities at a rate of 2.85%.

Net sales increased by 17.8% to R$18,063.5 million during the fiscal year ended March 31, 2011, from R$15,336.1 million during the fiscal year ended March 31, 2010, primarily as a result of:

· an increase of 18.8% to R$6.4 billion in net sales in the Sugar and Ethanol segment, or S&E. Despite a difficult harvest due to unfavorable weather conditions that affected the sugarcane, our production increased due to (1) the increase in the use of the installed capacity of two greenfields (Jataí and Caarapó), (2) expansion of our sugar plants and (3) the commencing of operations of other co-generation projects, coupled with better prices of sugar and ethanol;

· an increase in the net sales of CCL (fuels distribution and lubricants segment) by 16.4% to R$11.8 billion, primarily because of the increase of 22.7% in the revenue of diesel, 29.7% in the lubricants and 13.3% of gasoline; and

· in Rumo Logística, an increase in the transportation operations because of our partnership agreement with America Latina Logística S.A., or ALL, primarily responsible for the increase of 183.2% in its net sales to R$448.0 million.

The table below presents a breakdown of our net sales for the fiscal years ended 2011 and 2010:

	For Fiscal Year Ended March 31,
	2011			2010			% Variation
	(in millions of reais, except percentages)
Net sales		18,063.5			15,336.1			17.8
Sugar and ethanol net sales		6,389.2			5,380.1			18.8
Sugar sales		3,853.4			3,377.8			14.1
Ethanol sales		2,203.7			1,747.6			26.1
Energy cogeneration		194.9			93.6			108.3
Other sales		137.1			161.1			(14.9	)
CCL (fuel distribution and lubricants) net sales		11,795.3			10,145.1			16.3
Fuels		10,902.3			9,437.3			15.5
Lubricants		822.4			634.0			29.7
Other		70.6			73.7			(4.2	)
Rumo Logística (sugar logistics) net sales		448.0			158.2			183.2
Port lifting		118.1			142.1			(16.9	)
Logistics		305.8			16.1			1,799.4
Other		24.1			—			—
Adjustments and eliminations:		(569.0	)		(347.3	)		(63.8	)

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Sugar and Ethanol Sugar sales totaled R$3.85 billion in fiscal year 2011, an increase of 14.1% in relation to the prior period. The main factors contributing to the increase of R$475.6 million were:

· an increase of R$128 million arising from higher volumes sold which were 3.8% higher than the previous fiscal year. Sales in the domestic market increased 17.4%, with 1,238.2 thousand tons reflecting the effect of 12 months of sales as compared to approximately 10 months of sales in fiscal year 2010 following the acquisition of Cosan Alimentos in June 2009, and the greater concentration of total sugar recovered, or TSR, in the sugarcane (139.0 kg / ton of sugarcane compared to 129.8 kg / ton of sugarcane in 2009/10 crop). However, the lower than expected harvest affected sugar production and exports of sugar decreased 1% in comparison to the previous fiscal year amounting to 3,052.6 thousand tons;

· an increase of R$335 million due to a 10% increase in the price of sugar; prices in the domestic market increased by 11.2% in fiscal year 2011 and price in the foreign market increased by 7.4% in fiscal year 2011 when compared to the same previous fiscal year period, due to the effect of hedge accounting, which had a negative impact of R$160.3 million; and

· a higher mix of sugar sold in the domestic market at 29.0% for fiscal year 2011 as compared to 25.0% in the prior fiscal year resulted in a R$13 million increase in sales.

Ethanol sales in fiscal year 2011 totaled R$2.2 billion, increasing 26.1% or R$456.1 million when compared to fiscal year 2010 primarily due to:

· sales of R$81.2 million arising from the increase in the volume of ethanol sold primarily due to: (1) the acquisition of Cosan Alimentos plants in June 2009 which provided us with increased crushing capacity for the full fiscal year when compared to fiscal year 2010; (2) the greater concentration of TSR and (3) the ramp-up of the greenfields Jataí and Caarapó;

· sales of R$358.3 million, due to a 20.5% increase in the average price of ethanol in the domestic and international markets; and

· sales of R$16.6 million due to increased sales in the domestic market and lower sales in the foreign market, which presented lower average prices than the domestic market.

Cogeneration sales totaled R$194.9 million through the sale of R$8.9 million in steam and 1,254.0 thousand MWh of energy at an average price of R$148.3/MWh. The growth of 107.0% in the volume sold due to the period from the beginning of operation of new cogeneration units (totaling 10 this year, compared to six in the previous fiscal year) and to the ramp-up of the others.

CCL (fuel distribution and lubricants)

Net sales from CCL for fiscal year 2011 increased by 16.3% to R$11.8 billion, from R$10.1 billion during the fiscal year ended March 31, 2010, primarily due to:

In CCL’s fuel distribution operations:

· an increase of 21.6% in the volume of diesel sold in fiscal year 2011 when compared to fiscal year 2010. This increase occurred due to the following factors:

· an increase of 9.0% in the domestic consumption of diesel according to the ANP, due to the increase in the demand from industrial clients and transportation activities due to the economic recovery in Brazil; and

· gains of market-share in the retail market and in the industrial segment;

· an increase of 11.3% in the volume of gasoline C in fiscal year 2011 as compared to fiscal year 2010, primarily due to increased sales of gasoline C, and the increase in the percentage of flex fuel vehicles users that opted for gasoline C instead of hydrous ethanol; and

· an increase in the average unit prices of ethanol, gasoline and diesel, and of higher sales of diesel and gasoline C in the sales mix, which present higher prices than ethanol.

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In CCL’s lubricants operations:

· an increase of 29.7% in the net sales of lubricants, to R$822.4 million for fiscal year 2011, due to increased sales of premium products, which are higher margin products, and a strong increase in sales volume, which reached 166.4 million liters resulting from the increase of approximately 9.0% in domestic consumption and gains of market share, following increased marketing.

Rumo Logística (sugar logistics). Rumo Logística’s sales in fiscal year 2011 were 183.2% higher than fiscal year 2010, totaling R$448.0 million, primarily due to transportation operations with ALL, contributing R$305.9 million in sales.

Loading sales revenue was broadly in line with the previous fiscal year, at R$142.2 million in fiscal year 2011; despite an 8.0% reduction in volume, revenues benefited from a 10.4% increase in the loading price.

The lower loaded volume was partly due to the lower than expected harvest, which reduced the amount of sugar available to be exported at the end of the harvest. This effect was partially offset by the increase in prices.

As a result of high transportation volume, revenue per loaded ton in fiscal year 2011 was 3.1 times higher than fiscal year 2010.

Adjustments and Eliminations. The components of our net sales are prepared in accordance with IFRS. Accordingly, we have to perform certain eliminations and adjustments in order to consolidate and prepare our IFRS consolidated financial statements. These adjustments corresponded to R$569.0 million in the fiscal year ended March 31, 2011, as compared to R$347.4 million in the fiscal year ended March 31, 2010.

Cost of Goods Sold

We divide our sugar and ethanol cost of goods sold into two major categories: agricultural costs and industrial costs. Agricultural costs include costs related to the production of sugarcane, acquiring sugarcane from suppliers, fertilizers, personnel costs, delivery and logistical services, land and equipment leases, depreciation and third-party services. Industrial costs include the purchase of raw materials (other than sugarcane), personnel costs, depreciation and other chemical and maintenance expenses. CCL’s cost of goods sold includes petroleum derived products and feedstock purchased from Petrobras and ethanol from distilleries, freight costs between our terminals in our fuel distribution business and additives and packaging materials purchased from third parties in our lubricants business. Rumo Logística’s cost of goods sold includes personnel costs, equipment and port lease agreements, electricity and maintenance costs.

Cost of goods sold increased by 14.2% to R$15.1 billion during the fiscal year ended March 31, 2011, from R$13.3 billion during the fiscal year ended March 31, 2010.

Sugar and Ethanol

The cost of S&E goods sold and services rendered amounted to R$4.4 billion, representing an increase of 9.0%, or R$362 million, compared to the previous fiscal year. The main factors that explain this increase, in addition to the adjustments related to the adoption of IFRS, described in “Presentation of Financial And Other Information”, are:

· the higher volume of sugar and ethanol sold, which was responsible for the increase of R$161.1 million;

· R$360.0 million from sugar origination, characterized by the purchase of raw materials for refining and finished products for later resale and distribution in the domestic market;

· R$54.2 million of ethanol origination in order to benefit from market opportunities;

· an increase of R$234.9 in the average value of total sugar recovered, which represents the total amount of sugar content in the sugarcane, or TSR, calculated by the CONSECANA, which increased from R$0.3492/kg in fiscal year 2010 to R$0.4022/kg in fiscal year 2011, giving rise to a higher cost of leasing of land and of sugarcane from suppliers, resulting in an additional cost of approximately R$234.9 million in fiscal year 2011; and

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· these effects were partially offset by the increase in the amount of TSR, from 131.1 kg/ton of sugarcane to 139.9 kg/ton due to more adequate weather conditions reducing the cost to R$187.9 million in the fiscal year 2011.

CCL (fuel and lubricant distribution)

The cost of goods sold of CCL increased by 16.5% in fiscal year 2011 compared to fiscal year 2010. Excluding the volume factor, the unit cost of R$1,764/cbm in the fiscal year 2011 was 4.9% higher than the previous fiscal year, primarily due to:

· an increase in the cost of ethanol, which impacts not only the hydrous ethanol that will be used in the flex fuel vehicles, but also the anhydrous ethanol that is blended into gasoline C (25% mandatory blend);

· a 1.7% increase in the unit cost of diesel in fiscal year 2011; and

· increased sales of gasoline and diesel which present higher per unit costs than ethanol.

Rumo Logística

The cost of Rumo Logística’s goods sold in fiscal year 2011 of R$316.5 million represented an increase of 147.0% in fiscal year 2011 compared to fiscal year 2010, due to the commencement of transportation, transfer, storage operations in the interior and contracting of railway freights. On the other hand, loading costs, which already occurred in the previous fiscal year, presented a slight reduction due to the lower loaded volume of bulk and bagged sugar, the latest presenting higher costs.

Selling Expenses

Selling expenses are primarily related to transportation costs, including freight and shipping costs for ethanol, sugar, fuel and lubricant sold in Brazil and exported, as well as storage and loading expenses of ethanol and sugar for export at our and third parties’ port facilities. The major portion of our sales of ethanol in Brazil is sold at the mill to distribution companies, and therefore there are no shipping costs. CCL’s fuel and lubricant marketing expenses, as well as fuel storage expenses, are also included as selling expenses.

Selling expenses increased by 18.9% to R$1,026.0 million during the fiscal year ended March 31, 2011 from R$862.7 million during the fiscal year ended March 31, 2010. This increase was primarily due to higher volumes sold by S&E and CCL segments, resulting in higher freight expenditures.

Sugar & Ethanol

S&E selling totaled R$568.4 million in fiscal year 2011 compared to the R$469.8 million for fiscal year 2010. The increase of 21.0%, or R$98.5 million, was primarily due to:

· the 30% increase in the volume of sugar bagged for export, which represents a higher cost than sugar in bulk;

· significant increases in the volume of retail sugar sold in the domestic market;

· marketing expenses of the União brand; and

· increases in the volume of ethanol in the domestic market in the modality CIF, which implies an increase in the expenditures with freight which was more than offset by its higher price.

CCL (fuel and lubricant distribution)

CCL’s selling expenses reflected an increase of 14.5%, or R$57.9 million, to R$456.1 million, mainly due to the higher volume sold. In unit terms, selling expenses were in line (R$73.0/cbm) with fiscal year 2010 and benefitted from the higher dilution of fixed expenditures due to the 10.7% increase in volumes sold.

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Rumo Logística

Due to the nature of its business, no selling expenses are recorded for Rumo Logística.

General and Administrative Expenses

General and administrative expenses consist of salaries and benefits paid to employees, taxes, expenses related to third-party services, rentals and other expenses.

General and administrative expenses increased to R$545.4 million in fiscal year of 2011 from R$501.7 million in fiscal year of 2010. This increase occurred in all of our businesses, and reflects the efforts and investments that continue to be made to improve controls, management and operating efficiency when investments are completed, as well as non-recurring expenses of R$46 million in association with the closing of the Joint Venture with Shell, including the transition to the Shared Services Center with Shell.

Gain on tax recovery program

In fiscal year 2010 we reported R$ 270.3 million in gains due to our participation in the Programa de Recuperação Fiscal, or REFIS, tax recovery program.

Financial Results, Net

Financial results, net in fiscal year 2011 totaled a net expense of R$151.1 million compared to financial results, net of R$493.4 million in fiscal year 2010.

	For Fiscal Year Ended March 31,
	2011			2010
	(in millions of R$)
Financial expenses		(677.3	)		(622.4	)
Financial income		188.8			202.0
Foreign exchange variation, net		282.7			559.0
Derivatives, net		54.7			354.8
		(151.1	)		493.4

Financial Expenses. Our financial expenses primarily consist of: (1) accrued interest on our indebtedness; (2) losses on monetary variation related to our financial investments; (3) losses on foreign exchange variations related to our foreign currency-denominated indebtedness; (4) losses on derivatives (swaps, futures, forwards and options); and (5) fees, commissions and other charges paid to financial institutions.

Expenses of debt charges, net of financial investments yields, represented an increase of 5.7%, when compared to the previous fiscal year, mainly due to the greater average indebtedness. This increase was primarily due to debt financed by BNDES for new investment projects in Rumo Logística (the acquisition of locomotives, railcars and investment in permanent ways) as well as in energy cogeneration projects. In addition, as a result of the adoption of IFRS, we capitalized financial charges to fixed assets, which reduced the financial expenses at R$70.5 million in the current year and R$43.3 million in the previous fiscal year.

Financial Income. Our financial income primarily consists of: (1) gains on monetary variation related to our financial investments; (2) gains on foreign exchange variations related to our foreign currency-denominated indebtedness; (3) gains on derivatives (swaps, futures, forwards and options); (4) income from financial investments; and (5) financial income related to compensation awarded in a legal proceeding against the Brazilian federal government.

Financial income during the fiscal year ended March 31, 2011 totaled R$188.8 million compared to financial income of R$202.0 million during the fiscal year ended March 31, 2010.

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Foreign exchange variation, net. Foreign exchange variation, net resulted in R$282.7 million in fiscal year 2011 compared to R$559 million in fiscal year 2010. The positive effects from exchange variation occurred due to the impacts on assets and liabilities denominated in foreign currency. Our gross indebtedness denominated in U.S. dollars was R$3,750.8 million and R$3,618.2 million at March 31, 2010 and March 31, 2011, respectively.

Derivatives, net. Derivatives, net totaled R$54.8 million in fiscal year 2011 compared to R$354.8 million in fiscal year 2010, net of hedge accounting impacts. It should be noted that in fiscal year 2010, we did not adopt hedge accounting and as a consequence the results from derivatives in both years are not comparable since the gains/losses with derivatives in the current year financial results refer only to the derivative instruments not designed for hedge accounting and the non-effective portion of the designed hedge. In addition, as a result of the adoption of IFRS, we measure warrants at fair value. As a result, Cosan’s warrant in Radar was recognized as a derivative gain and totaled R$13.2 million for fiscal year 2011, compared to R$23.9 million in fiscal year 2010.

Starting April 1, 2010, we adopted hedge accounting in the cash flow hedge category for certain financial derivative instruments designated for covering price risk and foreign exchange variance risk on revenues from sugar exports. In fiscal year 2011, there was a deferral (reclassification between results and the “reserve” account in  equity) of R$143.3 composed of R$ 217.1 regarding  derivative fair value and R$ 73.8 related to deferred income tax. The derivatives will impact the net operating revenue in the next quarters, in accordance with the period of coverage of each one of the designated instruments.

Income Taxes

Current income tax expense increased to R$85.4 million in fiscal year 2011, compared to an expense of R$78.4 million in fiscal year 2010, mainly resulting from the earnings in fiscal year 2010 compared to fiscal year 2011. Deferred income tax expense decreased from R$344.9 million in fiscal year 2010 to R$329.1 million in fiscal year 2011, mainly due to gain from a tax recovery program in the previous fiscal year, which tax effect was R$59.0 million.

Net Income for the year

As a result of the foregoing, we incurred net income of R$767.7 million in fiscal year 2011, compared to a net income of R$1,082.5 million in fiscal year 2010.

B. Liquidity and Capital Resources

Our financial condition and liquidity are influenced by several factors, including:

· our ability to generate cash flow from our operations;

· the level of our outstanding indebtedness and related accrued interest, which affects our net financial expenses;

· prevailing Brazilian and international interest rates, which affects our debt service requirements;

· our ability to continue to borrow funds from Brazilian and international financial institutions and to obtain pre-export financing from certain of our customers;

· our capital expenditure requirements, which consist primarily of investments in crop planting and the purchase of equipment;

· credit ratings, including factors that may materially influence credit ratings, implications of potential changes in ratings and management’s expectations; and covenant compliance, including the implications of a breach of financial or other covenants and the company’s capacity for additional borrowing under its covenants.

Our cash needs have traditionally consisted of working capital requirements, servicing of our indebtedness, capital expenditures related to investments in operations, maintenance and expansion of plant facilities, as well as acquisitions. Our sources of liquidity have traditionally consisted of cash flows from our operations and short and

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long-term borrowings. We have financed acquisitions of business and agricultural land through seller financing, third party-financing or capital contributions by our shareholders.

In fiscal year 2011, the cash flow used in investing activities was funded principally by increased borrowing, while in fiscal year 2010, the cash flow used in investing activities was funded principally by operations. In fiscal year 2011, the cash flow generated by operations was used primarily for working capital requirements and to service our outstanding debt obligations. As of March 31, 2011, our consolidated cash and cash equivalents amounted to R$1,271.8 million compared to R$1,110.8 million as of March 31, 2010.

Cash Flow from Operating Activities

We had net cash flows from operating activities of R$2,327.2 million in fiscal year 2011, compared to R$2,209.0 million in fiscal year 2010. This increase was primarily attributable to increased sales, better management of our trade accounts receivable and payable and results from derivative financial instruments and an appreciation of the real against the U.S. dollar.

We had net cash flows from operating activities of R$ 2,209.1 million in fiscal year 2010.This increase was primarily attributable to the 276% increase in gross profit as a consequence of the increase in the sugar and ethanol segment contribution margin (net prices per ton minus unitary costs per ton) and the inclusion of the results of our subsidiary CCL for fiscal year 2010.

Cash Flow Used in Investing Activities

We had net cash flows used in investing activities of R$3,145.7 million in fiscal year 2011, compared to R$2,435.3 million in fiscal year 2010. This variation was mainly attributable to:

· the acquisition of property, plant and equipment of R$3,037.2 million (including R$745.6 million of sugarcane planting and growing costs) in fiscal year 2011, 19.5% higher than in fiscal year 2010, mainly influenced by investments in (1) increased investment by Rumo Logística, (2) higher operating capital expenditures in CAA, increasing from R$1,229.6 million in fiscal year 2010 to R$1,756.8 million in fiscal year 2011, particularly from the increase in investments in biological assets, interharvest maintenance mechanization and health, safety and environmental costs which offset significant reductions in expansion capital expenditures for greenfield and cogeneration due to the completion of such projects; and

· the acquisition of Usina Zanin (R$90.0 million) and a controlling interest in Logispot (R$48.9 million) in fiscal year 2011.

Cash Flow from Financing Activities

We had R$980.7 million of net cash inflows from financing activities in fiscal year 2011, compared to R$317.9 million of net cash inflows used in financing activities in fiscal year 2010. The addition of long-term debt, net of repayments, has increased from R$322.6 million in fiscal year 2010 to R$747.9 million in fiscal year 2011, while the financing resources from related parties were represented by a cash outflow of R$152.4 million in fiscal year 2010 and a cash inflow of R$37.1 million in fiscal year 2011. Our cash inflow from financing activities in fiscal year 2011 was partially offset by our increased payments of long-term debt and dividends paid during the period.

As of March 31, 2011, our outstanding debt totaled R$7,232.0 million of which R$957.1 million was short-term debt, including current-portion of long term debt. Our debt consisted of R$3,481.2 million of local currency-denominated debt and R$3,750.8 million of foreign currency-denominated debt.

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The table below shows the profile of our debt instruments:

		Average annual interest rate			As of March 31,						April 1, 2009			Maturity date
Description	Index				2011			2010
Senior Notes Due 2014	Dollar (USD)		9.5	%		576,814			631,246			—		July 2014
Senior Notes Due 2017	Dollar (USD)		7.0	%		658,954			720,573			936,704		February 2017
Commercial promissory notes	DI – Interbank Deposits		3.0	%		—			—			1,161,971		November 2009
BNDES	URTJLP		2.61	%		1,308,034			1,053,337			230,504		October 2025
	Upon fixed		4.5	%		242,508			—			—		July 2020
	UMBND		7.1	%		38,947			—			—		July 2019
Bank Credit Notes	CDCA	0.6%+CDI				31,378			62,497			—		December 2011
ACC	Dollar (USD)		1.71	%		228,229			296,375			143,250		March 2012
Perpetual Notes	Dollar (USD)		8.3	%		1,236,209			810,896			1,054,119		November 2015
Resolution 2471 (PESA)	IGP-M		3.95	%		674,392			603,504			579,856		April 2023
	Pre fixed		3.0	%		114			121			129		October 2025
Rural Credits	Pre fixed		6.7	%		92,352			—			—		October 2011
Pre-Payments	Dollar (USD) + Libor		6.01	%		736,472			976,277			—		February 2016
Credit Notes	125,0% CDI		—			303,719			380,140			—		February 2014
	Dollar (USD)		4.64	%		314,105			182,831			—		February 2013
	Pre fixed		19.7	%		10,142			—			—		October 2012
Finame	Pre fixed		4.92	%		517,842			104,214			1,014		July 2020
	URTJLP		2.75	%		187,336			94,775			43,653		March 2021
Others	Diverse	Diverse				74,482			59,272			533,833		Diverse
Total Debt						7,232,029			5,976,058			4,685,033
Current						(957,134	)		(839,529	)		(1,452,297	)
Non-Current						6,274,895			5,136,529			3,232,736

Some relevant financing activities for this fiscal year are described below:

On July 5, 2010, Rumo Logística received R$400 million from investment vehicles controlled by TPG and Gávea. As a result of this capital increase, each investor now owns a 12.5% stake at Rumo Logística. Such resources will strengthen Rumo Logística’s capital structure and will be used to fund its R$1.3 billion investment plan.

On October 29, 2010 and on July 13, 2011, Cosan Overseas Limited issued US$300 million and US$200 million respectively, in aggregate principal amount of perpetual notes guaranteed by Cosan S.A. in accordance with Regulation S. These notes bear interest at a rate of 8.25% per year payable quarterly.

Working Capital

As of March 31, 2011, we had working capital of R$1,099.8 million, compared to R$1,312.6 million in fiscal year 2010, primarily attributable to:

· an increase in the current portion of long-term debt, from R$839.5 million at March 31, 2010 to R$957.1 million at March 31, 2011 related to refinancing of our indebtedness;

· an increase in the cash and cash equivalents, from R$1,110.8 million to R$1,271.8 million; and

· an increase in inventories, from R$612.7 million at March 31, 2010 to R$670.3 million at March 31, 2011.

We believe our current liquidity and our cash flow from operations will be sufficient to meet our working capital requirements for at least the next 12 months.

Capital Expenditures

Our capital expenditures in property, plant and equipment, including acquisitions (net of cash acquired), expenditures for crop formation and expenditures for purchases of land, were R$3,037.2 million during fiscal year 2011, compared to R$2,545.5 million during fiscal year 2010. The main reason for the increase was the logistics investments made through our subsidiary Rumo Logística.

The following table sets forth our capital expenditures, net of cash received from sale of long term assets, for the fiscal years 2011 and 2010:

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	For Fiscal Year Ended March 31,
	2011		2010
	(in R$ million)
CAA – Operational
Biological assets		745.0		647.5
Inter-harvest maintenance costs		514.2		332.4
Health, safety and environmental (SSMA) & Sustaining		121.9		45.0
Mechanization		124.1		30.5
Projects CAA		251.6		174.2
Total CAA – Operational		1,756.8		1,229.6
CAA – Expansion
Co-generation projects		287.6		376.4
Greenfield projects		66.9		462.2
Other expansion projects		87.2		133.4
Total CAA – Expansion		441.7		972.0
CAA – Total		2,198.5		2,201.6
CCL		191.6		130.5
Rumo Logística		427.9		143.8
IFRS reclassification		219.1		69.6
Total consolidated capital expenditure		3,037.1		2,545.5

Sugar and ethanol

In fiscal year 2011, we maintained the high level of investments in plantation and crop treatment and invested R$745.0 million compared to R$647.5 million in fiscal year 2010.

In fiscal year 2011, Cosan maintained the high level of investments in plantation and crop treatment. With the adoption of IFRS, these investments are treated as increases in biological assets, which increased 15% compared to the previous fiscal year. Expenses with interharvest maintenance, increased 54.9% when compared to the prior fiscal year to R$514.2 million.

Investments in Safety, Health and Environment (SSMA) increased of 171.1% in fiscal year 2011 when compared to the prior period. Most of these investments were focused on vineyard projects, which is a byproduct reused as fertilizer in the sugarcane crops, aiming to create less exposure in its transportation from the plant to the agricultural areas.

Investments in agricultural mechanization totaled R$124.1 million in fiscal year 2011, four times what was invested in fiscal year 2010, resulting in the acquisition of agricultural equipment and machinery and alterations to existing equipment to receive sugarcane in a mechanized fashion.

S&E projects represented R$251.6 million of total investments in fiscal year 2011, which was 44.4% higher than the previous fiscal year, reflecting substantial investments in its production units in the processing and agricultural areas.

The investments in cogeneration amounted to R$287.6 million, primarily focused on Ipaussu, Univalem and Bonfim. The investments in Jataí (Goiás) and Caarapó (Matto Grosso do Sul) decreased by 85.5%, as they were in the final stage of investment.

Investments in expansion of capacity of sugar plants totaled R$87.2 million, 34.6% lower than the investments in the same previous fiscal year period. This decrease was due to the conclusion of most of the projects in Gasa, Ipaussu, Bonfim, Junqueira, Tamoio, Costa Pinto and Barra plants.

Fuel distribution and lubricants

In fiscal year 2011, CCL capital expenditures amounted to R$191.6 million, representing an increase of 46.9% when compared to the prior fiscal year. Of this total, R$68.3 million relates to the purchase of distribution rights related to long term contracts with clients, which were not treated as capital expenditures in IFRS. The remaining R$123.3 million are concentrated in the supply and distribution in the terminals of fuels distribution, implementation of new programs and system, especially in the tax area and the updating if the storage system of lubricants.

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Rumo Logística (sugar logistics)

Of the total of R$427.9 million invested by Rumo Logística, in line with its business plan, approximately 55% was set aside for the acquisition of locomotives and 45% for investments in construction of permanent roads and terminals in the countryside of São Paulo and in the Santos Port. In line with its business plan to become a multimodal logistics alternative, Rumo Logística acquired, in March 2011, control of Logispot Armazéns Gerais for R$48.9 million.

Indebtedness

Our total debt of R$7,232 million at March 31, 2011 increased 21% as compared to our total debt of R$5,976 million at March 31, 2010. Our short-term debt, comprised of our current portion of long-term debt and interest accrued, represented 13.2% of our total indebtedness at March 31, 2011. Our U.S. dollar-denominated debt at March 31, 2011 represented 52% of our total indebtedness.

As of March 31, 2011, we had total assets of R$19,212.4 million compared to R$16,417.2 million at March 31, 2010. Our total assets increased 16.6%, mainly due to R$ 2 billion level capital expenditure additions (as described above) and biological assets investments of R$745.6 million and a fair value variation amounting to R$381.9 million.

Certain of our long-term debt agreements require entities to comply with certain financial and negative covenants, including the Joint Venture’s debt of US$400.0 million 7.0% senior notes due in 2017 and US$350 million 4.50% Senior Notes due in 2014 which limits the Joint Venture’s ability and the ability of their subsidiaries to, among other things, enter into certain transactions with shareholders or affiliates, engage in a merger, sale or consolidation transactions and create liens.

The Company, including its subsidiaries, are subject to certain restrictive financial covenants set forth in existing loans and financing agreements. For the year ended as at March 31, 2011, the Company and its subsidiaries were in compliance of their debt covenants.

C. Research and Development, Patents, Licenses, etc.

See “Item 4. Information on the Company—B. Business Overview—Research and Development.”

D. Trend Information

We are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect upon our net sales or revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information to not necessarily be indicative of future operating results or financial condition.

E. Off-Balance Sheet Arrangements

Leases

The Company and its subsidiaries have operating lease contracts on land used for planting sugarcane and the concession contract to operate the port terminal, which will end within 20 years. The minimum payments related to these obligations are calculated on a straight-line basis over the term of the lease. The costs for these contracts during the years ended March 31, 2011 and 2010 consisted of the following:

	As of March 31,
	2011		2010
	(In thousands of R$)
Minimum installment		155,800		113,953
Variable installment		186,484		112,990
Total		342,284		226,943

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In accordance with these land lease contracts, we pay the lessors a certain fixed number of tons of sugarcane per hectare as consideration for the use of the land, and a certain fixed productivity per ton of sugarcane in terms of TSR. The overall volume of TSR is obtained by multiplying the number of hectares leased by the committed tons of sugarcane per hectare by the TSR per ton of sugarcane. The price that we pay for each kilogram of TSR is set by CONSECANA.

Sales

Because the Company and its subsidiaries are mainly engaged in the commodities market, sales are substantially performed at the price on the date of sale. However, the Company and its subsidiaries have several agreements in the sugar market, which undertake to sell volumes of those products in future harvests.

The commitments for the sale of sugar, in tons, March 31, 2011 and 2010 are as follows:

	As of March 31,
Year	2011		2010
2011		—		2,005,434
2012		2,279,000		1,828,134
Total		2,279,000		3,833,568

Purchases

The Company and its subsidiaries have several commitments for the purchase of sugarcane from third parties in order to secure part of its production in subsequent years. The amount of sugarcane to be acquired has been calculated based on an estimate of the quantity to be ground by area. The amount to be paid by the Company and its subsidiaries is determined at the end of each harvest, according to prices published by CONSECANA.

Purchase commitments by harvest in tons on March 31, 2011 and 2010 are as follows:

	As of March 31,
Year	2011		2010
2011		—		27,029,473
2012		25,129,648		23,600,912
2013		21,998,612		20,112,639
2014		18,060,914		16,345,120
2015		15,448,964		13,667,148
Thereafter		119,467,512		120,129,217
Total		200,105,650		220,884,509

On March 31, 2011, the regular capacity of sugarcane crushing for the next harvest, considering all units, is approximately 63 million tons (60 million tons in 2010 – unaudited information).

The Company and its subsidiaries have contracts to purchase industrial equipment for maintenance with the purpose of expanding plants, such as to supply the cogeneration project of electricity, with the amount of R$ 396.5 million on March 31, 2011.

Additionally, the Company through its indirect subsidiary Rumo Logística has signed a commitment of railcars and locomotives purchasing, and improvements aimed at the expansion of logistics business to be made in future years as follows:

	As of March 31,
Year	2011		2010
2011		341,647		652,678
2012		178,431		126,892
2013		44,000		94,682
Total		564,078		874,252

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Guarantees

As of March 31, 2011, we have entered into guarantees contracts with financial institutions relating to legal proceedings, debt, energy auctions and concession agreements, as follows:

	As of March31,2011
	(In thousands of R$)
Sugar & ethanol		814,145
Fuel distribution		191,970
Sugar logistics		5,443
Total		1,011,558

F. Tabular Disclosure of Contractual Obligations

The following table sets forth the maturity schedule of our material contractual financial obligations at March 31, 2011:

	Total		Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years
	(in millions of R$)
Long-term debt obligations(1)		7,232		957		1,508		1,789		2,978
Operating lease obligations(2)		11,324		―		2,667		1,896		6,761
Purchase obligations		564		342		222		―		―
Total		19,120		1,299		4,397		3,685		9,739

(1) Less than one year amounts include accrued interest over existing long-term debt installments.

(2)  Purchase obligations were valued at the amount of sugarcane committed by a TSR of 140.7 kg per ton, at a price of R$0.4022, per kg as defined by CONSECANA for March 2011.

Since March 31, 2011, there have been no material changes to the contractual obligations described above.

Our long-term debt consists primarily of:

· R$1,040.2 million of export pre-payment notes due from 2012 through 2016;

· R$ 741.6 million perpetual notes with call option for Cosan exercised on May, 2011;

· R$ 658.9 million senior notes due February 2017;

· R$ 576.8 million senior notes due February 2014;

· R$ 674.5 million PESA debt due between 2018 and 2020, payable against CTN credits;

· R$ 842.1 million export credit notes due between 2012 and 2020; and

· R$ 494.6 million perpetual notes with call option for Cosan beginning on November 5, 2015.

We believe we will be able to refinance our existing debt on favorable market conditions.

Recently Issued Accounting Standards

New IASB accounting standards have been published and/or reviewed and may be adopted for the current fiscal year, as described below:

· IAS 24 Related Party Disclosures (Amendment). It clarified the definition of a related party to simplify the identification of such relationships and to eliminate inconsistencies in its application. The revised standard introduces a partial exemption of disclosure requirements for government related entities. The amended standard is effective for annual periods beginning on or after January 1, 2011

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· IFRS 9 Financial Instruments – Classification and Measurement. The IASB has concluded the first part of the project to replace “IAS 39 Financial Instruments: Recognition and measurement”. IFRS 9 uses a simple approach to determine whether a financial asset is measured at amortized cost or fair value, based on the manner in which an entity manages its financial instruments (its business model) and the typical characteristic contractual cash flow of financial assets. The standard also requires the adoption of only one method for determining losses in the recoverable value of assets. This standard will become effective for annual periods beginning on or after January 1, 2013.

· IFRS 10 Consolidated financial statements. IFRS 10 establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more entities. The FRS 10 replaces the requirements for consolidation in SIC 12 Consolidation – Special Purpose Entities and IAS 27 Consolidated and Separate Financial Statements. This standard will become effective for annual periods beginning on or after January 1, 2013.

· IFRS 11 Joint Arrangements. IFRS 11 provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form. The standard addresses inconsistencies in the reporting of joint arrangements by requiring a single method to account for interests in jointly controlled entities. IFRS 13 supersedes IAS 31 Interests in Joint Ventures, and SIC-13 J Jointly Controlled Entities – Non-Monetary Contributions by Venturers, and will be effective for annual periods beginning on or after January 1, 2013. Earlier application is permitted. The main impact of the adoption of IFRS 11 will be the removal of the proportionate consolidation method of accounting for jointly controlled entities, currently available under IAS 31.  Consequently, IFRS 11 will result in the Company changing from proportionate consolidation to the equity method to account for its interests in its joint ventures.

· IFRS 12 Disclosure of Interests in Other Entities. IFRS 12 is a new and comprehensive standard on disclosure requirements of all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities. IFRS 12 is effective for annual periods beginning on or after January 1, 2013.

· IFRS 13 Fair Value Measurement. IFRS 13 establishes new requirements on how to measure fair value and the related disclosures for IFRS and U.S. generally accepted accounting principles. The standard is effective for annual periods beginning on or after January 1, 2013. Earlier application is permitted.

· IFRIC 14 Prepayments of a minimum funding requirement. This standard applies only to those situations where an entity is subject to minimum funding requirements and anticipated contributions to cover these requirements. The standard allows the entity to account for the benefit of such prepayment as an asset. This standard is effective for fiscal years beginning from January 1, 2011.

· IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments. IFRIC 19 is effective for annual periods beginning on or after 1 July 2010. The interpretation clarifies that equity instruments issued to a creditor to extinguish a financial liability qualify as consideration paid. The equity instruments issued are measured at their fair value. In case that this cannot be reliably measured, the instruments are measured at the fair value of the liability extinguished. Any gain or loss is recognized immediately in profit or loss.

Improvements to IFRS – The IASB standards for improvements and amendments to IFRS in May 2010 and the amendments will be effective from January 1, 2011:

· IFRS 3 – Business combination.

· IFRS 7 – Financial instrument: Disclosures.

· IAS 1 – Presentation of Financial Statements

· IAS 27 – Consolidated and Separate Financial Statements

· IFRIC 13 – Customer Loyalty Program

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There are no other standards and interpretations issued but not yet adopted that may, in management’s opinion, have a significant impact on the results or equity disclosed by the Company.

G. Safe harbor

See “Forward-Looking Statements.”

Item 6. Directors, Senior Management and Employees

Our board of directors and our executive officers are responsible for the operation of our business. Nevertheless, Mr. Rubens Ometto Silveira Mello, who controls all of our class B series 1 common shares, has the overall power to control us, including the power to establish our management policies.

A. Directors and Senior Management

Board of Directors

Our by-laws provide that our board of directors shall consist of between five and eleven directors. Our board of directors currently consists of eleven directors.

Our board of directors is the decision-making body responsible for, among other things, determining policies and guidelines for our business. Our board of directors also supervises our executive officers and monitors their implementation of policies and guidelines established from time to time by our board of directors.

Our board of directors is divided into three classes (Class I, Class II and Class III) that are, as nearly as possible, of equal size. Each class of directors is elected for a three-year term of office, and the terms are staggered so that the term of only one class of directors expires at each annual general meeting. Members of our board of directors are subject to removal at any time with or without cause at a general meeting of shareholders. Our by-laws do not include any citizenship or residency requirements for members of our board of directors.

The following table lists the members of our board of directors on March 31, 2011:

Name	Initial Year of Appointment to Cosan Limited’s Board	Initial Year of Appointment to Cosan S.A.’s Board	Class(1)	Position Held – Cosan Limited	Position Held – Cosan S.A.	Year of Birth
Rubens Ometto Silveira Mello	2007	2000	III	Chairman	Chairman	1950
Marcus Vinicius Pratini de Moraes(2)	2007	2005	II	Vice Chairman	—	1939
Marcelo Eduardo Martins	2009	2009	III	Director	Director	1966
Mailson Ferreira da Nóbrega(2)	2007	2008	I	Director	Director	1942
Marcos Marinho Lutz	2007	—	II	Director	—	1969
Pedro Isamu Mizutani	2007	2000	III	Director	Vice Chairman	1959
George E. Pataki(2)	2007	—	I	Director	—	1945
Marcelo de Souza Scarcela Portela	2007	2009	II	Director	Director	1961
José Alexandre Scheinkman(2)	2007	—	I	Director	—	1948
Burkhard Otto Cordes	2008	2005	II	Director	Director	1975
Hélio Franca Filho (2)	2009	—	III	Director	—	1959
Serge Varsano (2)	—	2009	—	—	Director	1955
Roberto de Rezende Barbosa	—	2009	—	—	Director	1950

(1) The terms of the directors expire as follows: Class I at the annual general meeting referred to the fiscal year 2011; Class II at the annual general meeting held in the transition fiscal year 2012; and Class III at the annual general meeting held in the fiscal year 2013.

(2) Independent director.

The following is a summary of the business experience of our current directors. Unless otherwise indicated, the business address of our current directors is Av. Juscelino Kubitschek, 1327, 4th floor, São Paulo, SP, Brazil.

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Rubens Ometto Silveira Mello. Mr. Mello is our chairman and chief executive officer. He is also chairman of Cosan S.A. He holds a degree in mechanical engineering from the Escola Politécnica of the University of São Paulo (1972). Mr. Mello has more than 30 years of experience in the management of large companies. He has also served as general director and chairman of the board of directors of Costa Pinto S.A. since 1980, vice president of Pedro Ometto S.A. Administração e Participações since 1980, director of Cosan Operadora Portuária S.A. since 1998, chairman of the board of directors of FBA from 2001 until its merger into Corona and its currently the chairman of the boards of Cosan and Raízen, He also holds the position of director of UNICA, the Sugarcane Agroindustry Association of the State of São Paulo (UNICA—União da Agroindústria Canavieira do Estado de São Paulo). Prior to joining Cosan, Mr. Mello worked from 1971 to 1973 as an advisor to the board of executive officers of UNIBANCO União de Bancos Brasileiros S.A. and from 1973 to 1980 as chief financial officer of Indústrias Votorantim S.A.

Marcus Vinicius Pratini de Moraes. Mr. Pratini de Moraes is our vice-chairman and has been a member of Cosan S.A.’s board of directors since 2005. He holds a degree in economics from Faculdade de Ciências Econômicas da Universidade do Rio Grande do Sul (1963), a postgraduate degree in public administration from Deutsche Stiftung fur Entwicklungsländer—Berlin (1965) and a business administration degree from University of Pittsburgh and Carnegie Institute of Technology (1966). Mr. Pratini de Moraes held several positions in the Brazilian federal government, including Minister of Planning and General Coordination (1968-1969), Minister of Industry and Commerce (1970-1974), Minister of Mines and Energy (1992) and Minister of Agriculture, Livestock and Food Supply (1999-2002). He also served a term as a congressman from the state of Rio Grande Do Sul (1982-1986). He was a board member of Solvay do Brasil (1998-1999) and chairman (2003); member of the advisory council of the Brazilian Mercantile & Futures Exchange—BM&F (2003); member of the Brazil—China Business Council (2004); president of the Brazil—Russia Business Council (2004); member of the National Council of Industrial Development (2005); and vice-president of the Beef Information Center—SIC (2005). Mr. Pratini de Moraes is currently the chairman of ABIEC (Brazilian Beef Export Industries Association), a board member of FIESP (Federation of Industries of the State of São Paulo), a board member of JBS S.A. and a member of the supervisory board and the audit committee of ABN AMRO Bank N.V.

Marcelo Eduardo Martins. Mr. Martins has been a member of our board of directors and Cosan S.A.’s board of directors since 2009. Mr. Martins currently holds the position of chief financial officer and investor relations officer. His duties include identifying acquisition opportunities and implementing takeovers as well as business development activities for which the company may have strategic interest in the future. In July 2007, Mr. Martins was appointed as an executive officer of Aguassanta Participações S.A. Prior to joining the Cosan Group, Mr. Martins was the Chief Financial and Business Development Officer of Votorantim Cimentos between July 2003 and July 2007 and, prior to that, head of Latin American Fixed Income at Salomon Smith Barney (Citigroup) in New York. He has significant experience in capital markets, having worked at Citibank (where he began his career as a trainee in 1989), Unibanco, UBS and FleetBoston. He has a degree in business administration from the Getúlio Vargas Foundation, majoring in finance.

Mailson Ferreira da Nóbrega. Mr. Nóbrega has been a member of our board of directors since November 2007. He is an economist and was Brazil’s Minister of Finance from 1988 to 1990. He was previously Technical Consultant and Chief of Project Analysis Department at Banco do Brasil; Coordination Chief of Economic Affairs of the Ministry of Industry and Commerce and Secretary General of the Ministry of Finance. He performed as the Chief Executive Officer of the European Brazilian Bank—EUROBRAZ, in London. Mr. Nóbrega is also member of the board of directors of the following companies: Abyara Planejamento Imobiliário, CSU Cardsystem S.A., Grendene S.A., Portobello S.A., Rodobens Negócios Imobiliários S.A., TIM Participações S.A. and Veracel Celulose S.A.

Marcos Marinho Lutz. Mr. Lutz is a member of our board of directors and our chief commercial officer. He has been Cosan S.A.’s chief executive officer since November 2009 and served as chief commercial officer since 2006. Mr. Lutz holds a naval engineering degree from Escola Politécnica of the University of São Paulo and a master’s degree in business administration from Kellogg Graduate School of Management, Northwestern University. From 2002 to 2006, Mr. Lutz was the executive director of infra-structure and energy at CSN (SID) and board member of MRS Logística, CFN Railways, and Itá Energética. Before that, Mr. Lutz was the chief operating officer at Ultracargo S.A., the logistics affiliate of the Ultra Group.

Pedro Isamu Mizutani. Mr. Mizutani has been a member of our board directors since 2007 and is our chief operating officer. He has been a member of Cosan S.A.’s board of directors since 2000. He has served as Cosan S.A.’s managing director since 2001, and served as Cosan S.A.’s chief operating officer until June 2011. Currently Mr. Mizutani holds a position as Raízen’s

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chief operating officer. Mr. Mizutani holds a production-engineering degree from the Escola Politécnica of the University of São Paulo (1982), a postgraduate degree in finance from UNIMEP—Universidade Metodista de Piracicaba (1986) and a master’s degree in business management from FGV—Fundacão Getúlio Vargas, São Paulo, with an extension degree from Ohio University (2001). Mr. Mizutani has more than 20 years of experience in finance and administration with companies in the ethanol and sugar industries. He also served as a planning director of Usina Costa Pinto S.A. from 1983 to 1987, as financial manager from 1987 to 1988, and as administrative and financial director from 1988 to 1990. From 1990 to 2001, he acted as managing administrative and financial director of the group.

George E. Pataki. Mr. Pataki is a member of our board of directors. He has a bachelor’s degree from Yale University (1967), and a law degree from Columbia Law School (1970). Mr. Pataki was a partner in the New York law firm of Plunkett & Jaffe until 1987. He was elected mayor of Peekskill, New York in 1981, and served in the New York State Legislature as an assemblyman and then a senator from 1985 to 1994. In 1994, Mr. Pataki became the fifty-third Governor of the State of New York and was reelected in 1998 and 2002. He served as Governor from January 1, 1995 until January 1, 2007. Mr. Pataki is counsel at Chadbourne & Parke LLP.

Marcelo de Souza Scarcela Portela. Mr. Portela is a member of our board of directors and has been a member of Cosan S.A.’s board of directors since 2005. He is the general counsel. He holds a law degree from Faculdade de Direito da Universidade de São Paulo (1983), and completed graduate studies in commercial law from Faculdade de Direito da Universidade de São Paulo (1988) and McGill University Law School (1990) in Montreal, Canada.

José Alexandre Scheinkman. Mr. Scheinkman is a member of our board of directors. He is the Theodore A. Wells ‘29 Professor of Economics at Princeton University. He has a bachelor’s degree in economics from the Federal University of the State of Rio de Janeiro (1969), a master’s degree (1973) and doctorate degree (1974) in economics from the University of Rochester, and a master’s degree in mathematics from Instituto de Matemática Pura e Aplicada (Brazil) (1976). Mr. Scheinkman is a Fellow of the American Academy of Arts and Sciences, a Fellow of the Econometric Society, and received a “docteur honoris causa” from the Université Paris-Dauphine. In 2002, he was a Blaise Pascal Research Professor (France). Professor Scheinkman is a member of the Conseil Scientifique of the Institute Europlace de Finance (Paris) and a member of the Conselho Acadêmico of IBMEC (São Paulo). Previously, he was the Alvin H. Baum Distinguished Service Professor and Chairman of the Department of Economics at the University of Chicago, Vice President in the Financial Strategies Group of Goldman, Sachs & Co., co-editor of the Journal of Political Economy and a member of the advisory panel in economics to the Sloan Foundation.

Burkhard Otto Cordes. Mr. Cordes has been a member of Cosan Limited’s board of directors since 2008 and of Cosan S.A.’s board of directors since 2005. He graduated with a degree in business administration from Fundação Armando Álvares Penteado (1997) and he holds a master’s degree in finance from IBMEC-SP (2001). Mr. Cordes has worked in financial markets over the last seven years.  He worked at Banco BBM S.A., a company owned by Grupo Mariani, where he worked at its commercial division focusing corporate and middle market segments. Currently, he serves as financial manager. Before holding his current position, he had worked at IBM Brasil in its financial division. Mr. Cordes is Mr. Mello’s son-in-law.

Helio Franca Filho. Mr. Franca Filho has been a member of Cosan Limited’s board of directors since August 2009. He joined Gavea’s Illiquid Strategies Group in April 2007, focusing primarily on the commodities sector. With over 20 years of experience in the commodities sector, Mr. Franca Filho began his career with the Sucres & Denrées group, where he worked from 1984 to 1985 trading coffee, sugar and cocoa. He subsequently joined the Louis Dreyfus group in New York, where he was in charge of the Latin American sugar and ethanol market from 1985 to 1996. From 2000 to 2007, he was director of Brazilian operations for the Noble group, a commodities trading company listed in England and Singapore. Mr. Franca Filho has a degree in economics from the Pontifical Catholic University of Rio de Janeiro (PUC-RJ).

Serge Varsano. Mr. Varsano has been a member of Cosan Limited’s board of directors since 2007 and holds a degree from the Marshall School of Business of the University of Southern California (1975). Mr. Varsano began his career as a trader in the Sucres et Denrées group, one of the world’s leading sugar traders, subsequently becoming its chief executive officer. He has been chief executive officer of the Sucres et Denrées group since 1988.

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Roberto de Rezende Barbosa. Mr. Barbosa has been a member of Cosan S.A.’s board of directors since 2009. He worked as a trainee at Halles Bank and the Dacon dealership, assuming the family business in 1975. He was the chief executive officer of Grupo Nova América and is currently the chief executive officer and a board member at CTC – Centro de Tecnologia Canavieira, and a board member at SCA – Sociedade Corretora de Álcool, IEDI – Institute of Industrial Development Studies and UNICA – the Federation of Sugarcane Industries of São Paulo State.

Executive Officers

Our executive officers serve as our executive management body. They are responsible for our internal organization and day-to-day operations and for the implementation of the general policies and guidelines established from time to time by our board of directors.

Our executive officers are elected by our board of directors for one-year terms and are eligible for reelection. Our board of directors may remove any executive officer from office at any time with or without cause. Our executive officers hold meetings when called by any of our executive officers.

The following table lists our current executive officers:

Name	Initial Year of Appointment to Cosan Limited	Initial Year of Appointment to Cosan S.A.	Position Held – Cosan Limited	Position Held – Cosan S.A.	Year of Birth
Rubens Ometto Silveira Mello	2007	—	Chief Executive Officer	—	1950
Marcos Marinho Lutz	2007	2009	Chief Commercial Officer	Chief Executive Officer	1969
Marcelo Eduardo Martins	2009	2009	Chief Financial Officer and Investor Relations Officer & M&A Officer	Chief Financial Officer and Investor Relations Officer & M&A Officer	1966
Marcelo de Souza Scarcela Portela	—	2009	—	General Counsel	1961
Nelson Roseira Gomes Neto	—	2011	—	Executive Officer	1970
Colin Butterfield	—	2011	—	Executive Officer	1973

The following is a summary of the business experience of our executive officers who are not directors. Unless otherwise indicated, the business address of our current executive officers is Av. Juscelino Kubitschek, 1327, 4th floor, São Paulo, SP, Brazil.

Nelson Roseira Gomes Neto.  Mr. Gomes Neto is an executive officer of Cosan S.A. and the chief executive officer of CLE. He received a bachelor’s degree in engineering from Catholic University (1992), a master’s degree in corporate finance from PUC – IAG Master (1998) and a master’s degree in business administration from COPPEAD (2001). He joined Exxon Mobil Corporation in 1991 as a trainee. Throughout the course of his career, he has served in positions of increasing managerial responsibility in several business lines such as Fuels Marketing, Convenience Retailing, Natural Gas, and since 2001 part of Lubricants business. In February 2008 he was appointed Brazil Lubricants Officer to Esso Brasileira de Petroleo Limitada, and in December 2008, Lubricants Vice President.

Collin Butterfield.  Mr. Butterfield is an executive officer of Cosan S.A. and chief executive officer of Docelar.  He holds a bachelor’s degree in engineering from Boston University and a master’s degree in economics and finance from Dartmouth College. He created the website Viajo.com (currently named Decolar.com.br) and before joining Cosan S.A., he acted as Bracor’s Investments Officer.

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Key managers

Name	Initial Year of Appointment to Cosan S.A.	Position Held
Nelson Roseira Gomes Neto	2008	Chief Executive Officer – CLE
Julio Fontana Neto	2009	Chief Executive Officer – Cosan Operadora Portuária
Collin Butterfield	2010	Chief Executive Officer – Docelar

The following is a summary of the business experience of the key manager who is not an executive officer.

Julio Fontana Neto. Mr. Neto is the chief executive officer of Cosan Operadora Portuária. He was formerly chief executive officer of MRS Logística S.A. with experience in logistics, railroad operations and infrastructure. He holds a bachelor’s degree in mechanical engineering (1978) and in business administration from Mackenzie University (1981) and a master’s degree in administration from EISE Business school – University of Navarra, Spain (2002).

Our Relationship with our Executive Officers and Directors

Mr. Burkhard Otto Cordes is a member of Cosan’s and Cosan Limited’s boards of directors and serves as financial manager in Aguassanta Participações S.A. Mr. Cordes is Mr. Mello’s son-in-law.

There are no arrangements or understandings with any of our shareholders, customers, suppliers or others, pursuant to which any director or member of our senior management has been or will be selected.

Committees of the Board of Directors

Audit Committee

The members of our audit committee are Messrs. Marcus Vinicius Pratini de Moraes (chairman), Mailson Ferreira da Nóbrega and Helio França Filho. Our board of directors has determined that Marcus Vinicius Pratini de Moraes (chairman), Mailson Ferreira da Nóbrega and Hélio Franca Filho meet the independence requirements of the SEC and the NYSE listing standards. For a discussion of the role of our audit committee, see “—Summary of Significant Differences of Corporate Governance Practices—Audit Committee”.

Compensation Committee

We have a compensation committee that reviews and approves the compensation and benefits for our executive officers and other key executives, makes recommendations to the board regarding compensation matters and is responsible for awarding equity-based compensation to our executive officers and other employees under our employee equity incentive plan. The committee also has the discretion to interpret the terms of the plan, to amend the plan and take all other actions necessary to administer the plan in our best interests. The members of our compensation committee are Messrs. Pedro Isamu Mizutani (chairman), Marcus Vinicius Pratini de Moraes and Marcelo de Souza Scarcela Portela.

Risk Management Committee

We have a risk management committee that is responsible for advising the board on risk management, by establishing exposure limits and hedging ratios on a periodic basis so as to achieve better operational and financial controls. The members of our risk management committee are Messrs. José Alexandre Scheinkman (chairman), Marcelo Eduardo Martins and Marcos Marinho Lutz.

B. Compensation

Under our by-laws, our board of directors is responsible for establishing the annual aggregate compensation that we pay to the members of our board of directors and our executive officers.

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The aggregate amount of compensation paid to all members of the board of directors and its executive officers in fiscal year 2011 was R$ 35.7 million.  In fiscal year 2010, it was R$ 21.9 million. The compensation to be paid to directors and executive officers of Cosan S.A. who also act as such for our company will be in addition to compensation paid to them by our company.

Our executive officers receive the same benefits generally provided to our employees. Members of our board of directors are not entitled to these benefits.

We currently have no employment agreements with our directors and executive officers providing for benefits upon the termination of employment. Our directors and executive officers who serve for both us and Cosan will receive compensation from both companies.

C. Summary of Significant Differences of Corporate Governance Practices

The NYSE Corporate Governance Rules provide that we are required to disclose any significant differences on our corporate governance practices from those required to be followed by U.S. companies under NYSE listing standards. We have summarized these significant differences below.

We are permitted to follow practice in Bermuda in lieu of the provisions of the NYSE Corporate Governance Rules, except that we will be required to have a qualifying audit committee under Section 303A.06 of the Rules, or avail ourselves of an appropriate exemption. In addition, Section 303A.12(b) provides that our chief executive officer is obligated to promptly notify the NYSE in writing after any of our executive officers becomes aware of any material non-compliance with any applicable provisions of the NYSE Corporate Governance Rules.

Majority of Independent Directors

NYSE Rule 303A.01 provides that each U.S. company that is listed on the Exchange must have a majority of independent directors. Bermuda corporate law does not require that we have a majority of independent directors. Under our by-laws, at least 40% of our directors are required to be independent directors; which requirement increases to 60% following the death or permanent incapacitation of Mr. Rubens Ometto Silveira Mello.

Separate Meetings of Non-Management Directors

NYSE Rule 303A.03 provides that the non-management directors of each U.S. company that is listed on the Exchange must meet at regularly scheduled executive sessions without management. We are not required to have such executive sessions for the non-management directors under Bermuda law.

Nominating and Corporate Governance Committee

NYSE Rule 303A.04 provides that each U.S. company that is listed on the Exchange must have a nominating/corporate governance committee composed entirely of independent directors. We are not required to have such a committee under Bermuda law. We believe that, pursuant to our by-laws, the role of a nominating committee is generally performed by our board of directors and that the role of the corporate governance committee is generally performed by either our board of directors or our senior management.

Compensation Committee

NYSE Rule 303A.05 provides that each U.S. company that is listed on the Exchange must have a compensation committee composed entirely of independent directors. We are not required to have such a committee under Bermuda law. However, we formed such a committee with one independent director.

Audit Committee

NYSE Rule 303A.06 and the requirements of Rule 10A-3 of the SEC provide that each listed company is required to have an audit committee consisting entirely of independent members that comply with the requirements of Rule 10A-3. In addition, the company must have an internal audit function and otherwise fulfill the other requirements of the NYSE rules and Rule 10A-3 of the SEC.

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While we are not required under Bermuda law to have an audit committee, we have formed a committee that will have the following responsibilities:

· pre-approve services to be provided by our independent auditor;

· review auditor independence issues and rotation policy;

· supervise the appointment of our independent auditors;

· discuss with management and auditors major audit, accounting and internal control issues;

· review quarterly financial statements prior to their publication, including the related notes, management’s report and auditor’s opinion;

· review our annual report and financial statements;

· provide recommendations to the board on the audit committee’s policies and practices;

· review recommendations given by our independent auditor and internal audits and management’s responses;

· provide recommendations on the audit committee’s by-laws; and

· the receipt, retention and treatment of complaints received by the issuer regarding accounting, internal controls or auditing matters.

Equity Compensation Plans

NYSE Rule 303A.08 provides that shareholders must be given the opportunity to vote on all equity compensation plans and material revisions thereto, with certain limited exemptions as described in the rule. Under Bermuda law, shareholder pre-approval is not required for the adoption of equity compensation plans nor any material revision thereto.

Corporate Governance Guidelines

NYSE Rule 303A.09 provides that each U.S. listed company must adopt and disclose its corporate governance guidelines. We do not have a similar requirement under Bermuda law. In addition, we have adopted a written policy of trading of securities and disclosure matters.

Code of Business Conduct and Ethics

NYSE Rule 303A.10 provides that each U.S. listed company must adopt and disclose a code of business conduct and ethics for directors, officers and employees and promptly disclose any waivers of the code for directors or executive officers. Although not required under Bermuda law, the Company has adopted a code of business conduct and ethics for directors, officers and employees as provided for in NYSE Rule 303A.10, which has been filed with the SEC.

D. Employees

As of March 31, 2011, we had 34,281 employees. The following table sets forth the number of our total employees by main category of activity for the periods indicated:

	At March 31,
	2011		2010		2009
Agricultural		21,860		25,816		23,323
Industrial		7,971		8,019		5,550
Commercial(1)		—		876		397
Administrative(1)		3,799		3,128		2,130

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	At March 31,
	2011		2010		2009
Financial and investor relations(1)		—		60		72
Port		651		1,165		188
Total		34,281		31,648		39,339

(1) The number of Commercial, Financial and Investor Relations employees have been consolidated to the Administrative category in the fiscal year 2011.

We pay a mandatory union contribution for all of our employees. We believe that we have good relations with our employees and the unions that represent them, and we have not experienced a strike or other labor slowdown since 1992.  Collective bargaining agreements to which we are party have either one-year or two-year terms, are subject to annual renewal and are subject to changes in Brazilian law. We apply the terms of bargaining agreements entered into with the unions equally to unionized and non-unionized employees.

Our total annual payroll was R$ 350 million as of March 31, 2011, which includes a provision for vacations, and bonuses, taxes and social contributions.

We offer our employees, including our executive officers, various benefits, which are provided in accordance with the employee’s position in our company. Benefits include medical (including dental) assistance, meal and transport vouchers, life insurance, maternity leave, scholarships and funeral assistance and nursery assistance. Members of our board of directors are not entitled to these benefits. All of our employees participate in profit sharing plans developed with the labor unions of which our employees are members, which provide performance-based compensation. In fiscal year 2011, we paid R$ 10 million as profit sharing distributions.

E. Share Ownership

Except for Mr. Rubens Ometto Silveira Mello, our indirect controlling shareholder and chairman, who as of March 31, 2011 indirectly holds 96,332,044 of our class B series 1 common shares and 15,441,111 of our Class A common shares, none of our directors and executive officers currently owns or holds class A common shares or class B common shares of our company.

Equity-Based Compensation Plans

Cosan Limited

We have adopted a Cosan Limited equity incentive plan. We have reserved up to 5% of our issued and outstanding class A common shares as of the granting date for issuance under our equity incentive plan. The plan is intended to attract, retain and motivate our directors, officers and employees, to link compensation to the overall performance of the company in order to promote cooperation among our diverse areas of business and to create an ownership interest in the company with respect to these directors, officers and employees in order align their interests with the interests of our shareholders.

Cosan

On August 30, 2005, Cosan’s shareholders approved a stock option plan that authorized the issuance of a maximum of 5% of Cosan’s total share capital. On September 22, 2005, Cosan’s board of directors approved the distribution of stock options corresponding to 4,302,780 common shares, or 3.25% of Cosan’s total share capital. A remaining 1.75% of Cosan’s share capital may subsequently be issued pursuant to the terms of Cosan’s stock option plan. The stock options that were issued have an option price of US$2.93 per common share, and may be partially exercised (up to a maximum of 25% annually) after November 18, 2006. On November 20, 2006, Cosan’s board of directors approved the issuance of 1,132,707 new common shares to certain of Cosan’s executive officers under Cosan’s stock option plan, which resulted in an increase in the number of Cosan’s issued and outstanding common shares on that date. On September 11, 2007, Cosan’s board of directors granted 450,000 options to one of Cosan’s executive officers. On November 19, 2007 and December 11, 2007, 922,947 and 38,725 options, respectively, were exercised. On March 30, 2010 and September 14, 2010, 17,000 and 48,829 options were exercised. On January 29, 2010, 15,000 options were exercised. On July 20, 2010, 225,000 options were exercised. On November 11, 2010, 224,819 options were exercised. On March 4, 2011, 112,500 options were exercised.

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The stock option plan expired in December 31, 2010. A new stock option plan was approved in Cosan’s General meeting, held in July 29, 2011. If a holder of stock options ceases to be an executive officer, manager or eligible employee for any reason (other than termination of his or her employment contract without just cause on Cosan’s part, death, retirement or permanent incapacitation), after partially exercising his or her option to purchase Cosan’s common shares, the options that have not yet been exercised will be extinguished as of the date that the holder ceases to be an executive officer, manager or eligible employee.

Cosan stock options held by Cosan’s executive officers may, at their option, be canceled and converted into awards of Cosan Limited, and we will comply with the limit of shares we have reserved for our equity incentive plan. The Cosan stock options will be converted based upon a ratio equal to the initial offering price of our common stock, divided by the weighted average stock price of Cosan’s common stock for a specified period immediately preceding the date of the completion of our initial public offering. The converted securities, if unvested, generally will continue to vest over their original vesting periods.

Item 7. Major Shareholders and Related Party Transactions

A. Major Shareholders

Cosan Limited

As of the date of this annual report our authorized share capital is US$11,888,863.60, consisting of 1,000,000,000 class A common shares, par value US$0.01 per share, 96,332,044 class B series 1 common shares, par value US$0.01 per share and 92,554,316 class B series 2 common shares, par value US$0.01 per share. Each of our class A common shares entitles its holder to one vote. Each of our class B common shares entitles its holder to ten votes. The chairman of our board of directors, Mr. Rubens Ometto Silveira Mello controls 41.3% of our issued and outstanding share capital, and 86.0% of our voting power by virtue of his control of 100% of our class B common shares and 8.9% of our class A common shares. Other than the entities and individuals mentioned below, no other single shareholder holds more than 5.0% of our issued and outstanding share capital.

The following table sets forth the principal holders of our issued and outstanding share capital and their respective shareholding as of the date of this annual report:

Shareholders	Class A Common Shares		%		Class B Common Shares		%		Total Number of Shares		%
Queluz Holdings Limited		7.941.111		4.6		66,321,766		68.8		74,262,877		27.4
Usina Costa Pinto S.A. Açúcar e Álcool		—		—		30,010,278		31.2		30,010,278		11.1
CFV19 Participações S.A.		1,811,250		1.0		—		—		1,811,250		0.7
MSAL Participações S.A.		1,811,250		1.0		—		—		1,811,250		0.7
Certo Participações S.A.		1,811,250		1.0		—		—		1,811,250		0.7
MSOR Participações S.A.		1,811,250		1.0		—		—		1,811,250		0.7
Usina Bom Jesus S.A. Açúcar e Álcool		255,000		0.1		—		—		255,000		0.1
Gávea Funds		39,445,393		22.6		—		—		39,445,393		14.6
Janus Capital Management LLC (1)		17,141,850		9.8		—		—		17,141,850		6.3
Skagen Funds (2)		8,275,000		4.7		—		—		8,275,000		3.1
Others		94,051,987		53.9		—		—		94,051,987		34.7
Total		174,355,341		100.0		96,332,044		100.0		270,687,385		100.0

(1) Based on information filed by Janus Capital Management LLC, or Janus Capital, with the SEC on July 31, 2011, as a result of its role as investment adviser or sub adviser to various managed portfolios, Janus Capital may be deemed to be the beneficial owner of 17,141,850 class A common shares held by such managed portfolios.

(2) Based on information filed by Skagen Funds with the SEC on July 31, 2011, Skagen Funds is deemed to be the beneficial owner of 8,900,000 class A common shares. Skagen Funds is a Norwegian investment company and holds the shares for investment purposes.

No class B series 2 common shares are currently issued and outstanding.

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Queluz Holdings Limited, Costa Pinto, CFV19 Participações S.A., MSAL Participações S.A., Certo Participações S.A., MSOR Participações S.A. and Usina Bom Jesus S.A. Açúcar e Álcool

On November 24, 2009, a corporate reorganization was approved within companies from its controlling group (Aguassanta Participações S.A., Queluz Holdings Limited, or “Queluz”, and Usina Bom Jesus S.A. Açúcar e Álcool), aiming at consolidating their control with Mr. Rubens Ometto Silveira Mello.

This reorganization resulted in the transference by an affiliated of Queluz of up to around 5,500,000 class A common shares issued by Cosan Limited, that did not exceed 1% of total Class A shares, pursuant to Securities Act Rule 144 and other applicable provisions. Its class B share position remains unaltered.

Queluz Holdings Limited and Costa Pinto own all of our class B series 1 common shares. Queluz Holdings Limited, CFV19 Participações S.A., MSAL Participações S.A., Certo Participações S.A., MSOR Participações S.A. and Usina Bom Jesus S.A. Açúcar e Álcool also hold in aggregate 10% of our class A common shares. These companies are indirectly controlled by Mr. Rubens Ometto Silveira Mello, the chairman of our board of directors through several companies controlled directly and indirectly by him. Although the control is exercised by Mr. Rubens Ometto Silveira Mello, there are some family members and other individuals who are also beneficial owners of minority interests in these companies.

Cosan S.A

As of March 31, 2011, we owned 62.2% of Cosan’s common shares. Prior to our initial public offering, Usina Costa Pinto S.A. Açúcar e Álcool and Aguassanta Participações S.A., each company indirectly controlled by our chief executive officer, Mr. Rubens Ometto Silveira Mello and his family, were the controlling shareholders of Cosan.

Rezende Barbosa

On June 18, 2009, Cosan entered into an agreement with Rezende Barbosa to acquire 100% of the outstanding shares of Curupay S.A. Participações, or “Curupay”.  The acquisition was carried out through the merger of Curupay into Cosan resulting in the issuance by Cosan of 44,300,389 new common shares, fully subscribed and paid-in by Rezende Barbosa.

Shareholders’ Agreements and Other Arrangements

Cosan Limited

Aguassanta and Costa Pinto, our indirect controlling shareholders, entered into a shareholders’ agreement pursuant to which they undertake to vote jointly with respect to any matter related to us and our subsidiaries. Aguassanta and Costa Pinto have agreed to meet before any shareholders’ or board of directors meeting to reach an agreement as to their votes regarding such matters. The vote of the indirect shareholder that owns a greater equity stake in Cosan Limited shall prevail.

Cosan S.A.

Rezende Barbosa

Pursuant to an agreement dated June 9, 2009, the Rezende Barbosa Family has the right to have one member on both the supervisory board and the board of directors.  Cosan Limited has, subject to limited exceptions, a right of first refusal on shares of Cosan (CSAN3) owned by the Rezende Barbosa family.

Cosan Portuária

On February 8, 1999, São Francisco and Tate & Lyle do Brasil Serviços e Participações S.A., or “Tate & Lyle”, entered into a shareholders’ agreement that governs the rights of the shareholders of Cosan Portuária (formerly São Francisco Operadora Portuária de Granéis Ltda.). In April 2004, Cosan acquired 90.0% of the outstanding capital stock of Cosan Portúaria through a Cosan capital increase in the amount of US$1.5 million, which was fully subscribed by Cosan’s shareholder, São Francisco, using shares that it held at Cosan Portuária.

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Cosan has signed a memorandum of understanding dated April 9, 2008 with Rezende Barbosa with the intention of merging into a new entity the port terminal facilities of Cosan Portuária with those at the neighboring site of Teaçu Armazéns Gerais S/A, owned by Rezende, or the “merged entity”. Cosan asked Tate & Lyle to provide its approval as the minority shareholder in Cosan Portuária to the arrangements. Tate & Lyle’s and Cosan’s equity interests in the merged entity would be held by a holding company owned by Cosan and Tate & Lyle. Because of the creation of the holding company, Cosan and Tate & Lyle entered into a shareholders’ agreement with respect to the holding company named COPSAPAR Participações S/A in order to govern: (1) the election of the board of directors; (2) the exercise of voting rights in general shareholder meetings and meetings of the board of directors; and (3) the preemptive rights of shareholders.

Rumo Logística

On September 2, 2010, Novo Rumo, Cosan, Cosan Limited and investment vehicles controlled by TPG and Gávea entered into a shareholders’ agreement that regulates the rights of the shareholders of Rumo Logística and on the same date the parties have entered into a subscription agreement in which Gávea and TPG agreed to subscribe common shares of Rumo Logística representing a 25% ownership for a price of R$400 million, implying a post-money equity valuation of R$1,600 million. In accordance to the shareholders agreement, Rumo Logística will have a board of directors of five members and Gávea and TPG will have the right to appoint two of the directors. Pursuant to the agreement, (1) Gávea and TPG will have the right to participate, through at least one representative, in all board committees and certain other relevant committees of Rumo Logística; (2) any decision regarding Rumo Logística or any of its subsidiaries will be determined by a simple majority vote; (3) Gávea and TPG will have rights of first refusal; (4) Gávea and TPG will have tag along rights.

TEAS

Cosan and Cargill Agricola S/A entered into a shareholders’ agreement with respect to TEAS Terminal Exportador de Alcool de Santos S/A , or “TEAS”, dated as of February 15, 2005 and amended on November, 26, 2009, that provides for, among other things, the right of first refusal of the shareholder to acquire the shares of TEAS owned by the other shareholder, in the event such party decides to sell its shares to a third party.

B. Related Party Transactions

We engage in related party transactions with certain of our affiliates, some of which are of a recurring nature. Financial information with respect to certain material related party transactions is set forth in Note 10 to our consolidated financial statements attached hereto.

Our board of directors delegates to the audit committee the responsibility for reviewing and approving all related party transactions (within the meaning of Item 404 of Regulation S-K of the SEC). The audit committee is responsible for obtaining information from our directors, executive officers and major shareholders with respect to related party transactions and for then determining, based on the facts and circumstances, whether our company or a related party has a direct or indirect material interest in the transaction. As required under SEC rules, transactions that are determined to be directly or indirectly material to our company or a related party has been disclosed herein.

In October 2008, a private placement of the Company’s class A shares was made in the amount of R$ 96 million (US$50 million) by the controlling shareholder, Mr. Rubens Ometto Silveira Mello, and R$ 288.1 (US$150 million) by the funds managed by Gávea Investimentos Ltda., at R$ 8.6 (US$4.50) per class A share or BDR subscribed. The offering was extended to all class A share or BDR holders, as permitted by applicable law. The offering was concluded on October 27, 2008. As a result and following the date of the acquisition, Mr. Rubens Ometto Silveira Mello holds 41.5% of the Company’s total capital and 86.1% of its voting capital.

In the normal course of business, we have operational and financing transactions with related parties. The significant related party balances and transactions are summarized below:

Aguassanta

We lease land from entities controlled by the Aguassanta Group, a group of companies under the common control of Mr. Rubens Ometto de Silveira de Mello. The lease costs are paid using the ATR price published by CONSECANA and the contracts expire between 2026 and 2027.

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On July 1, 2010, Cosan entered into the build-to-suit and lease agreement with Palermo Agricola Ltda, or “Palermo”, a special purpose company wholly-owned by Aguassanta Participações S/A.  Following the completion of construction of the shared services center, Cosan will lease this building from Palermo for a period of ten years, with monthly rental payments of R$350,000 (US$ 196,500).

Radar

We leased land from companies controlled by Radar. These lease costs are paid using the ATR price published by CONSECANA and most of the lease contracts expire in 2027.

Rezende Barbosa

We hold a receivable originated from the acquisition of Curupay, which are secured by our shares.  We executed a long-term sugar-cane supply agreement with Rezende Barbosa. Prices paid to them are based on ATR price published by CONSECANA.

Vertical UK LLP

We sells and buy ethanol from Vertical UK in the ordinary course of business. Vertical UK is a trading company headquartered in Switzerland where we hold a 50% interest.

Logispot

In the year ended March 31, 2010, we acquired a minority stake in Logispot and the installments outstanding represented the March 31, 2010 balance payable in regard to the share acquisition. In March 2011, we acquired control of the entity.

Recurring Transactions with Shareholders

Cosan leases agricultural land for planting sugarcane from certain of our and its shareholders and other related parties on market terms. As of March 31, 2011 we leased 394.312 hectares, through 2,128 land lease contracts with an average term of five years. Six of these contracts (covering 30,260 hectares, or 7.6% of the land leased by us) are entities controlled by our chairman and controlling shareholder under arms-length terms. These land lease agreements are on arms-length terms equivalent to those we enter into with third parties. Lease payments under these agreements are based on the price of 16.9 tons of sugarcane per hectare, calculated in accordance with certain regulations of CONSECANA.

Through our indirect subsidiary Agrícola Ponte Alta S.A., we also acquired 28 ships for R$12,115,000 pursuant to a Ship Purchase Agreement, entered into on October 1, 2009. We had previously leased and used the ships to transport sugarcane to our plant in Jaú, in the district of Potunduva.

Guarantees with Related Parties

As a result of Cosan’s participation in the PESA federal government financing program between 1998 and 2000, Amaralina mortgaged land to secure the restructuring of Cosan’s debt, and Agrícola Ponte Alta and Pedro Ometto S.A. mortgaged land to secure the restructuring of the debt of Da Barra.

For approximately seven months, Cosan and Palermo Agricola Ltda, a special purpose company wholly-owned by Aguassanta Participações S/A , or “Palermo”, have been in the planning and execution stages of a project involving a build-to-suit and lease arrangement whereby Palermo would construct, pursuant to Cosan specifications, the building that will house Cosan’s shared services center in Piracicaba, São Paulo State, or the “Shared Services Center”, which would thereafter be leased by Palermo to Cosan.  On July 1, 2010, Cosan entered into the build-to-suit and lease agreement with Palermo based on previously agreed business terms that formalized this arrangement.  Following the completion of construction of the Shared Services Center, Cosan leased this building from Palermo and Cosan has licensed this building to Raízen for a period of ten years, with monthly rental payments of R$350,000 (US$196,500).

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C. Interests of Experts and Counsel

Not applicable.

Item 8. Financial Information

A. Consolidated Statements and Other Financial Information

See Item 18 for our audited consolidated financial statements.

Legal Proceedings

Tax Proceedings

We are engaged in a number of legal proceedings with Brazilian tax authorities in the total amount of R$1,989.8 million for which we have recorded provisions in an aggregate amount of R$ 418.7 million at March 31, 2011. In addition, there are currently certain legal proceedings pending in which we are involved for which we have not recorded provisions.  If any of these legal proceedings is decided adversely against us, our results of operations or financial condition could be materially and adversely affected.

IPI Credit Premium. Cosan S.A. has tax credits related to the IPI premium credit introduced by Law No. 491/69. Credit premium is an incentive given to exporters, through the grant of IPI tax credits calculated on export sales, as a form of compensation for taxes paid domestically. We have used a portion of these credits to offset federal taxes and contributions. The Superior Court of Justice of Brazil, a Brazilian appellate court, had previously ruled that IPI premium credits could be used by companies to offset other federal taxes. However, in a ruling dated November 9, 2005, the Superior Court of Justice of Brazil changed its prior position. This decision may be appealed by the losing party to the Superior Court of Justice of Brazil, and, if the party loses this appeal, it may further appeal the decision to the Superior Federal Court of Brazil. We have established a provision in the amount of R$ 196.2 million in our consolidated financial statements at April 30, 2008 for the full amount of the taxes that we have offset pursuant to the initial judicial authorization. Cosan opted to settle tax related claims in installments as provided by Brazilian Law No 11.941/09 and in MP 470/09. Consequently, there was a full reduction of the claims related to IPI tax credit, as well as the installment payment of other federal taxes, that were recorded as taxes payable.

IPI challenge. In 1993, our subsidiary, CCL (now CLE) filed a suit to challenge the balance sheet restatement index (IPC) established by the federal government in 1989, because such index did not reflect the actual inflation at that time. The use of this index resulted in CCL overstating and overpaying income and social contribution taxes. CCL obtained a favorable preliminary court ruling that allowed it to recalculate the financial position, using indexes that accurately measured the inflation over the period. In doing so, the amounts of income and social contribution taxes payable and identified that overpayments for both taxes were offset in subsequent years until 1997. Despite the favorable court rulings, the Brazilian tax authorities issued a notice of infringement challenging all tax offsets performed in 1993 and some offsets in 1994 and 1997, and a provision was recorded. As of March 31, 2011, the provision amount to R$ 80.2 million.

Da Barra instituted administrative proceedings to recover IPI taxes paid with respect to refined amorphous sugar and the right to offset these IPI taxes against other federal taxes. During these proceedings, Da Barra offset these IPI tax credits against other federal taxes. However, despite the ongoing administrative proceeding, the Brazilian federal tax authority issued tax deficiency notices against Da Barra, claiming that Da Barra owed the full amount of the federal taxes that it offset with these IPI tax credits. To suspend the effectiveness of these tax deficiency notices, Da Barra filed suit for and obtained a preliminary injunction through a writ of mandamus. As of March 31, 2010, Da Barra has used a portion of these IPI tax credits to offset IPI and other federal taxes in an aggregate amount of R$ 263.5 million. We have not recorded a provision.

As of March 31, 2011, the total amount related to the remaining IPI tax debts was R$ 181.2 million.

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Finsocial. From June to December of 1994, based on a preliminary injunction under a lawsuit in which the constitutionality of the Finsocial was disputed, CCL offset amounts due under the COFINS tax and several other federal taxes against a Finsocial tax credit (i.e. against the amount of Finsocial paid prior to such period). However, in 1995, CCL was deemed by the Regional Federal Court (TRF) to not be subject to the COFINS tax.

According to our understanding, TRF’s decision refers to the period from 1992 to 2001, when a Constitutional Amendment (EC nº 33/2001) changed the Brazilian Constitution to determine the applicability of the COFINS tax. As such, CCL considered that the Finsocial tax credits were available to be offset against other taxes, and this was confirmed in 2003 by a Brazilian court decision.  Following the court decision, CCL began offsetting the Finsocial tax credits against other federal taxes (IRPJ, CSLL, CIDE, PIS and COFINS). However, the Brazilian tax authorities considers that the TRF applies only to the 1992 tax year.

Due to the contingent characteristic of this offset, the entire offset amount was recorded as a provision for judicial demands, pending approval by the Brazilian tax authorities of such offset. In 2008, the Brazilian tax authorities denied the entire offset, claiming  that the credits had already been offset against COFINS in 1994. As such, a provision related to this matter was recorded and management decided to file an administrative appeal against the decision, which is still pending judgment.

As of March 31, 2011, the provision of R$ 56.8 million for ICMS credits is comprised of: (a) a tax assessment received, in which, despite the defense filed at the administrative and judicial levels, our Brazilian legal advisors considers it is more likely than not that a loss will occur and (b) a recovery of credits and financial charges on issues in which management has a different view on the outcome from the Brazilian tax authorities.

Furthermore, the main tax claims for which an unfavorable outcome is deemed possible and, therefore, no provision for legal claims was recorded pertaining to ICMS tax are (1) a tax assessment filed in view of the alleged lack of payment of ICMS and non-compliance with ancillary obligation, in connection with the partnership and manufacturing upon demand, Central Paulista Açúcar e Álcool Ltda., between May to December 2006 and May to December 2007; (2) ICMS levied on the remittances of crystallized sugar for export purposes. In accordance with the Brazilian tax authorities, such product is classified as semi-finished product and that, in accordance with the ICMS regulation, would be subject to taxation; (3) ICMS levied on possible differences in terms of sugar and alcohol inventories, arising from magnetic tax files and Inventory Registry Books; (4) ICMS concerning rate difference due to ethanol sales to companies located in other states, which, subsequently, had their registrations revoked; and (5) disallowance of credit resulting from the acquisition of diesel used in the production process. As of March 31, 2011, the total amount related to these matters equals to R$ 490.8 million.

The Brazilian tax authorities have assessed amounts payable due to PIS/COFINS from their differing interpretation of the tax treatment of raw materials. Such discussions are at the administrative level and following discussions with our Brazilian legal advisors, the amount of such contignecies that are more likely than not to be incurred is R$ 8.2 million and this has been recorded as a provision. Additionally, we have disclosed a potential liability of R$ 163.1 million in Note 19 of our audited consolidated financial statements attached hereto.

Brazilian tax authorities Normative Instruction (“SRF IN”) No. 67/98 approved the procedure adopted by the industrial establishments which performed remittances without registries and payment of the IPI rate,with regard to transfers of sugarcane carried out between July 6, 1995 and November 16, 1997 and refined sugar between January 14, 1992 and November 16, 1997. Since theis Normative Instruction determined that there were would be no tax on operations for the periods indicated above, the Company applied to offset and request reimbursement of amounts paid during the relevant periods against other tax liabilities. Notwithstanding the Normative Instruction, the Brazilian tax authorities denied Cosan S.A.’s requests.  Cosan S.A. has challenged this ruling in an administrative proceeding, which is still pending judgment. In addition, Cosan S.A. applied and received from the Brazilian courts a preliminary injunction suspending the ability of the Brazilian tax authorities to demand the relevant tax debts in court.

Our Brazilian legal advisors have advised us that R$ 20.7 million represents the amount of such contingencies that are more likely than not to be incurred by the Company. Additionally, there are other related matters where there is a potential liability of R$ 270.8 million, as described in note 19 of our audited consolidated financial statements attached hereto.

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Withholding income taxes.  In September 2006, the Brazilian federal tax authorities issued a tax notice against Cosan in an aggregate amount equal to R$ 145.6 million, including penalties and interest, related to withholding income tax. Despite what we believe is a remote chance of our success on the administrative level, we believe, based on the advice of our external Brazilian legal advisors, that it is possible that we will prevail once this matter is brought before a court. As of March 31, 2011, the total amount related to this discussion was R$ 194.4 million.

Social security contribution. Refers mainly to a tax assessment received and defended by our Brazilian legal advisors, concerning social security contribution on: (1) stock option plans; (2) export sales; and (3) resale of materials for companies under common control. As of March 31, 2011, the total amount related to this discussion was R$ 72.6 million.

Social Security Proceedings

The National Social Security Institute (Instituto Nacional da Seguridade Social), or “INSS”, a Brazilian federal agency, has filed several claims against us. The social security claims that have been filed against us amount to R$ 463.5 million with respect to differences in payroll contributions to agricultural employees, differences in joint responsibility contributions with hired service providers and differences in the Workmen’s Compensation Insurance contribution, over a period of several years, as well as reimbursement of alleged payments paid improperly to INSS regarding benefits to self-employed workers. We believe that it is probable that we will be required to pay certain of these claims depending on the periods covered thereby. We have recorded a provision in an aggregate amount of R$ 29.7 million as of March 31, 2011.

Environmental Proceedings

We are party to a number of administrative and judicial proceedings regarding environmental matters. We are subject to several public civil actions related to matters including our burning of sugarcane (which is part of the manual sugarcane harvesting process), historical patrimony preservation, and protected areas. We are also subject to administrative proceedings concerning matters including the burning of sugarcane, liquid effluent discharge, air pollution, damage to environmentally protected areas, death of fish and joint liability in case of environmental damages regarding service stations. Moreover, we are also subject to judicial proceedings concerning suits filed by service stations and third parties asserting damages for fuel leaks in Esso service stations. As of March 31, 2011, the total amount related to environmental discussions equals to R$ 32.3 million and we had established a provision for these contingencies in the amount of R$ 2.2 million.

Labor Claims

As of March 31, 2011, there were 3.513 individual labor lawsuits filed against us and the total amount of our potential liability under these lawsuits amounted to a total of R$ 467.1 million. As of March 31, 2011, we had established a provision for these contingencies in the amount of R$ 164.9 million. The labor claims principally relate to claims to overtime, risk premiums and wage premiums related to workplace hazards.

Other Proceedings

We are party to numerous civil lawsuits involving claims that amounted to R$ 460.1 million in the aggregate as of March 3l, 2011. Based on the opinions of our Brazilian legal advisors handling these lawsuits, we have recorded a provision for civil contingencies in our consolidated financial statements of R$ 82.5 million as of March 31, 2011.

In accordance with court orders concerning certain tax, civil and labor lawsuits, we had bank accounts frozen in an aggregate amount of R$ 1.3 million as of March 31, 2011.

We are involved in numerous other lawsuits from time to time, including commercial litigation.

On February 28, 2007, the subsidiary Usina da Barra S.A. Açúcar e Álcool recognized financial income in the amount of R$ 318.3 million. The company had sought damages from the Brazilian federal government for setting prices for its products below the established price control guidelines. In the third quarter of fiscal year 2007, Brazilian courts reached a final and unappealable decision favorable to us. As of March 31, 2011, this account receivable from the government amounted to R$ 345.1 million.

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Costa Pinto, one of the entities through which Mr. Rubens Ometto Silveira Mello previously held Cosan S.A.’s shares, its officers, directors, members of the fiscal council and controlling shareholders were party to an administrative proceeding initiated by the CVM for non-payment of minimum dividends to preferred shareholders during fiscal years 2000, 2002 and 2003. In this proceeding, it was asserted, among other things, that the equity method of accounting to determine net income available for dividends should not have been used. On July 14, 2004, a special preferred shareholders meeting approved the distribution of the dividends and ratified an agreement between the preferred shareholders and Costa Pinto. The parties entered into a consent decree with the CVM, agreeing to pay a total amount of R$ 0,3 million, and as of the date of this annual report, all issues relating to such administrative proceeding have been resolved and Costa Pinto has paid all dividends due to its preferred shareholders.

On August 10, 2007, the CVM requested information from Mr. Rubens Ometto Silveira Mello, in his capacity as chairman of the board of directors and chief executive officer of Cosan  S.A., as to whether he breached any duty of loyalty to Cosan S.A.’s minority shareholders under Brazilian law by taking actions to effect the corporate reorganization or by potentially usurping corporate opportunities otherwise available to Cosan S.A., especially with regard to business activities outside of Brazil by our company that could be conducted by Cosan S.A. Mr. Rubens Ometto Silveira Mello informed the CVM on August 14, 2007 that his roles in the corporate reorganization and with respect to the corporate reorganization have been, and will continue to be, conducted in compliance with Brazilian law.

In addition, during a meeting held on August 15, 2007, we were informed by CVM commissioners that, in their opinion, future conduct of business activities outside of Brazil by our company, when these activities could be carried out by Cosan S.A., may breach provisions of Brazilian law relating to the duty of loyalty and corporate opportunities. The CVM stated that, if our company pursues in the future corporate opportunities outside Brazil to the detriment of Cosan S.A., the CVM may bring an administrative proceeding against Mr. Rubens Ometto Silveira Mello or us, which we anticipate may result in the imposition of monetary penalties. Mr. Rubens Ometto Silveira Mello has informed us that he believes he has not, and we also believe that we have not, breached any applicable Brazilian law; and, as and if necessary, he and we will seek to take measures to ensure compliance with such law.

On December 5, 2007, following receipt of the approval of the Extraordinary Shareholders Meeting of Cosan S.A., Cosan Limited, Cosan S.A. and Mr. Rubens Ometto Silveira Mello executed a “Commitment to Offer Commercial Opportunities,” which regulates the terms and conditions in which the international commercial opportunities developed by Cosan Limited are to be offered to Cosan S.A., allowing Cosan S.A. to participate, in accordance with the conditions established under the agreement, in those commercial opportunities.

Our company has undertaken to the CVM not to change the steps of the corporate reorganization as described in our registration statement on Form F-4 (Registration No. 333-147235) filed by the Company with the SEC as well as in this annual report, particularly with respect to the exchange offer to be made to Cosan S.A. shareholders.

Dividends and Dividend Policy

Dividend Rights

Cosan Limited is a holding company and can only pay dividends to the extent, if any, that funds are received from our subsidiaries. Our dividend policy is similar to the current dividend policy of our main subsidiary, Cosan. Cosan is required by the Brazilian corporate law to distribute (and has historically done so) on an annual basis dividends representing 25% of its net income (as calculated under Brazilian GAAP, subject to certain adjustments mandated by Brazilian corporate law). We intend to pay cash dividends representing on an annual basis 25% of our annual consolidated net income (as calculated under IFRS), to holders of class A common shares and class B common shares in proportion to the number of shares held by them unless our board of directors has determined, in its discretion, that such distribution would not be advisable or appropriate in light of our financial condition or we are unable to meet applicable statutory solvency requirements under Bermuda law.

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Our board of directors may, in its discretion, amend or repeal our dividend policy. You may not receive the level of dividends provided for in the dividend policy or any dividends at all due to a number of factors, such as:

· we are a holding company, and therefore, our ability to pay dividend will depend on our ability to receive distributions from our subsidiaries, particularly our subsidiary Cosan;

· our subsidiaries may become subject to covenants restricting their ability to distribute dividends under credit facilities, term loans or other indebtedness;

· any imposition of restrictions on conversions and remittances by the Brazilian government could hinder or prevent us from converting into U.S. dollars or other foreign currencies and remitting abroad dividends of our Brazilian subsidiaries;

· our shareholders have no contractual or other legal rights to dividends pursuant to Bermuda law; and

· we may not have sufficient cash to pay dividends due to changes in our operating earnings, working capital requirements and anticipated cash needs.

Under Bermuda law, a company’s board of directors may declare and pay dividends from time to time unless there are reasonable grounds for believing that the company is or would, after the payment, be unable to pay its liabilities as they become due or that the realizable value of its assets would thereby be less than the aggregate of its liabilities and issued share capital and share premium accounts. Under our by-laws, each class A common share and class B common share is entitled to dividends if, as and when dividends are declared by our board of directors, subject to any preferred dividend right of holders of any preference shares. There are no restrictions on our ability to transfer funds (other than funds denominated in Bermuda dollars) in or out of Bermuda or to pay dividends to U.S. residents who are holders of our common shares.

We expect to have sufficient available cash to pay dividends in accordance with our dividend policy. We do not, however, plan to pay dividends in the event that we do not generate sufficient cash from operations. In addition, we will not pay dividends if we believe that such payment will limit or preclude our or our subsidiaries’ ability to pursue growth opportunities. Although our by-laws and Cosan’s by-laws do not restrict us from borrowing funds to pay dividends, we do not intend to borrow funds to pay dividends.

The dividend rights attaching to our class A common shares and class B common shares are not cumulative in the event that we do not, for any reason, pay dividends on those shares.

Any cash dividends payable to holders of our common shares quoted on the NYSE will be paid to Mellon Investors Services LLC, our transfer agent in the United States, for disbursement to those holders.

Cosan’s Dividend Policy

Brazilian corporate law and Cosan’s by-laws require that Cosan distributes annually to its shareholders a mandatory minimum dividend, unless Cosan’s board of directors notifies the shareholders that such distribution is not advisable in light of Cosan’s financial condition as reflected in Cosan’s consolidated financial statements in accordance with Brazilian GAAP. The mandatory dividend is equal to 25% of Cosan’s net income for the prior year (as calculated under Brazilian GAAP, subject to certain adjustments mandated by Brazilian corporate law). The mandatory dividend may be made in the form of dividends or interest on shareholders equity, which may be deducted by Cosan in calculating its income and social contribution tax obligations. The declaration of annual dividends, including dividends in excess of the mandatory distribution, requires approval by the vote of a majority of the holders of Cosan’s common shares and depends on numerous factors. These factors include Cosan’s results of operations, financial condition, cash requirements, future prospects, financial covenant limitations, and other factors deemed relevant by Cosan’s board of directors and shareholders. Cosan’s board of directors has adopted a dividend policy pursuant to which Cosan has distributed as dividends and/or interest on shareholders equity in the amount of approximately 25% of Cosan’s net income for each fiscal year. Under Brazilian corporate law, Cosan may establish income reserve accounts composed of a legal reserve, an investments reserve and/or a retained profit reserve. The balance of such income reserve accounts must not exceed the amount of Cosan’s capital stock and any excess amounts must either be incorporated to its capital stock or distributed as dividends. Cosan has historically paid cash distributions.

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The following table sets forth Cosan’s dividend distributions calculated, under Brazilian GAAP, for each of the last five fiscal years:

Fiscal Year	Total Dividend Distribution
	(in millions of R$)
2006		—
2007		75.8
2008		—
2009		—
2010		43.9
2011		220.1

Brazilian Taxation

Dividends paid by Cosan to us are currently not subject to withholding income tax in Brazil, to the extent that such amounts are related to profits generated as of January 1, 1996. In addition, Brazilian tax laws permit Cosan to make distributions to shareholders of interest on shareholders’ equity and treat those payments as a deductible expense for purposes of calculating Brazilian income tax and social contributions. For tax purposes, this interest is limited to the daily pro rata portion of the TJLP, as determined by the Central Bank from time to time, and the amount of the deduction is limited to (1) 50% of net income (after social contributions but before income tax and the amount to be distributed as interest on shareholders’ equity) related to the period in respect of which the payment is made; or (2) 50% of the sum of retained profits and profit reserves as of the date of the beginning of the period in respect of which the payment is made. A payment to us of interest on shareholders’ equity is subject to withholding income tax at the rate of 25%.

B. Significant Changes

A discussion of the significant changes in our business can be found under “Item 4. Information on the Company—A. History and Development of the Company.” Please also see our earnings reports filed with the SEC on Form 6-K on June 23, 2011.

Formation of Joint Ventures

On June 2, 2011, the Company, together with Shell, formed two jointly-controlled companies: (i) Raízen Combustíveis S.A. in the fuel distribution segment, and (ii) Raízen Energia Participações S.A. in the segment of sugar and ethanol. Cosan and Shell share control of the two entities, with each company holding 50% of the economic control. Cosan recorded its investments in the joint ventures using the equity method of accounting for the purposes of its individual financial information, and through proportionate consolidation in the consolidated financial information.

On the establishment of the joint ventures, Cosan’s investment was made through the contribution of their sugar and ethanol business as well as their fuel distribution business. Shell’s contribution to the joint venture was made through its fuel distribution business in Brazil, its interests in Iogen and Codexis, the license to use the Shell brand and a fixed cash contribution of approximately R$1.8 billion over a two year period.

The establishment of Raízen Energia and Raízen Combustíveis was aimed at creating one of the world’s largest producers of sugar, ethanol and sugarcane based bio-energy as well as one of the largest fuel distributors in the Brazilian market.

On formation of the joint ventures, the Company contributed its sugar and ethanol and distribution businesses, and therefore was required to deconsolidate the relevant assets and liabilities and recognize the remaining stake at fair value.

The deconsolidation process of the contributed businesses on June 1, 2011, and the recognition of the new stake at fair value produced a gain of R$2.9 million which was recognized in the first quarter (June 30, 2011).

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Given that Cosan opted to proportionally consolidate the joint ventures, the fair value of the remaining stake was allocated to these entities’ assets and liabilities at fair value for the purpose of determining the goodwill resulting from this transaction, as shown below:

	Raízen Energia		Raízen Combustíveis		Total
Net assets at fair value (a):		7,656.7		4,627.7		12,284.4
Cosan’s stake – 50%		3,828.4		2,313.9		6,142.3
Goodwill allocated (a)		1,195.2		722.4		1,917.6
Fair value of the remaining stake in the joint ventures		5,023.6		3,036.3		8,059.9

The total goodwill verified in the transaction (R$1,917.6 million) was allocated to the Raízen Energia and Raízen Combustíveis segments in the proportion to the net assets at fair value of the respective investments.

Docelar

On July 1, 2011, we transferred capital in the amount of R$85.9 million into our subsidiary Handson Participações S.A., with the objective of acquiring, through this subsidiary and its jointly-controlled subsidiary Raízen Energia, control of Docelar Alimentos e Bebidas S.A., or “Docelar”, a company that focuses on the industrialization and refining of sugar and the sale of these and other products within the foodstuff segment, in the retail market.

CADE Decision – Aviation Assets

In compliance with the CADE decision, which was announced on July 27, 2011, Raízen Combustíveis will sell the aviation assets that were acquired from Cosan by Shell Brasil Ltda in 2009, which include aircraft refueling installations at seven airports. The transaction should be carried out within 60 days in accordance with the decision.

Stock Option Plan

On July 29, 2011, the shareholders of Cosan S.A. approved a stock option plan for its executives and employees in an amount of up to 5% of the total shares of Cosan S.A.

Dividends

On August 12, 2011, the board of directors approved the distribution of the entire dividend to be received by Cosan S.A. on August 31, 2011.  The dividends will be paid to shareholders for the fiscal year 2011 ended March 31, 2011 totaling US$ 76.9 million corresponding to US$ 0.281126238 per common share or the equivalent in reais to holders of Brazilian depositary receipts, without withholding income tax.

Perpetual Notes

On July 13, 2011, the subsidiary Cosan Overseas Limited issued perpetual notes guaranteed by Cosan S.A. in accordance with Regulations S in the aggregate principal amount of US$200.0 million in addition to the notes that were issued on November 5, 2010, which are also subject to interest at a rate of 8.25% a year payable quarterly.

Item 9. The Offer and Listing

A. Offer and Listing Details

Prior to August 16, 2007, no public market existed for our class A common shares. Since August 16, 2007, our class A common shares have been listed on the NYSE and trade under the symbol “CZZ”. The BDRs representing our class A common shares are listed on the BM&FBOVESPA and trade under the symbol “CZLT11”.

The following information concerning the trading history of our class A common shares and BDRs representing our class A common shares is presented solely for informational purposes. This information should not be viewed as indicative of future sales prices for either our class A common shares on the NYSE or BDRs representing our class A common shares on the BM&FBOVESPA. Actual future sales prices for our class A common shares and the BDRs are likely to be significantly different from their trading history.

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The following table sets forth the high and low closing sales prices for our class A common shares on the NYSE and the BDRs representing our class A common shares on the BM&FBOVESPA for the periods indicated.

	NYSE (US$ per common share)
	High		Low
Fiscal Year Ended March 31, 2011		14.57		7.95
Fiscal Year Ended March 31, 2010		9.75		2.40
Eleven Months Ended March 31, 2009		14.02		2.03
Fiscal Year Ended March 31, 2008		15.75		10.00
Fiscal Quarter
First Fiscal Quarter 2010		6.67		2.40
Second Fiscal Quarter 2010		8.47		4.86
Third Fiscal Quarter 2010		8.69		6.65
Fourth Fiscal Quarter 2010		9.75		7.80
First Fiscal Quarter 2011		10.9		7.95
Second Fiscal Quarter 2011		12.01		9.82
Third Fiscal Quarter 2011		14.08		11.57
Fourth Fiscal Quarter 2011		14.57		12.17
First Fiscal Quarter 2012		13.35		10.83
Month
April 2011		13.35		11.65
May 2011		12.38		10.83
June 2011		12.58		11.69
July 2011		12.82		11.98
August 2011		11.68		11.48
September 2011 (through September 26, 2011)		11.70		9.75

Sources: Factset; Reuters.

	BM&FBOVESPA (reais per BDR)
	High		Low
Fiscal Year Ended March 31, 2011		24.15		14.89
Fiscal Year Ended March 31, 2010		17.65		5.78
Eleven Months Ended March 31, 2009		23.20		5.40
Fiscal Year Ended April 30, 2008		26.99		17.80
Fiscal Quarter
First Fiscal Quarter 2010		12.71		5.78
Second Fiscal Quarter 2010		15.80		9.81
Third Fiscal Quarter 2010		15.60		12.40
Fourth Fiscal Quarter 2010		17.65		15.10
First Fiscal Quarter 2011		19.00		14.89
Second Fiscal Quarter 2011		20.38		17.68
Third Fiscal Quarter 2011		23.65		19.68
Fourth Fiscal Quarter 2011		24.15		19.96
First Fiscal Quarter 2012		21.29		17.40
Month
April 2011		21.29		18.40
May 2011		19.43		17.40
June 2011		20.00		18.52
Julys 2011		19.80		18.86
August 2011		18.80		18.10
September 2011 (through September 26, 2010)		19.65		18.50

Sources: Bloomberg

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On September 26, 2011, the last reported closing sale price of our class A common shares on the New York Exchange and the BDRs representing our class A common shares on the BM&FBOVESPA were R$ 10.26 and R$ 18.68 per class A common share and BDR representing our class A common shares, respectively.

Trading History of Cosan’s Common Shares

Prior to our initial public offering and the formation of our company, Cosan’s common shares have been listed on the Novo Mercado segment of the BM&FBOVESPA under the symbol “CSAN3”. Because the exchange offer has been completed and not all shareholders accepted our exchange offer, we do not expect to seek delisting from trading on the Novo Mercado. For more information regarding the exchange offer see our registration statement on Form F-4 (Registration No. 333-147235) filed by the Company with the U.S. Securities and Exchange Commission.

The following information concerning the trading history of Cosan’s common shares is presented solely for informational purposes. This information should not be viewed as indicative of future sales prices for either our class A common shares on the NYSE or BDRs representing our class A common shares on the BM&FBOVESPA. Actual future sales prices for our class A common shares and the BDRs are likely to be significantly different from the trading history of Cosan’s common shares.

The market information in the following tables has been restated to reflect the three-for-one share split of Cosan’s common shares on August 31, 2006.

The following table sets forth the high and low closing sales prices for Cosan’s common shares on the BM&FBOVESPA for the periods indicated.

	BM&FBOVESPA
	(reais per common share)
	High		Low
Fiscal Year Ended March 31, 2011		60.08		27.76
Fiscal Year Ended March 31, 2010		42.30		18.90
Eleven Months Ended March 31, 2009		34.15		8.00
Fiscal Year Ended March 31, 2008		25.60		10.08
Fiscal Year Ended March 31, 2011		28.85		18.00
Fiscal Quarter
First Fiscal Quarter 2010		16.80		10.08
Second Fiscal Quarter 2010		21.40		14.00
Third Fiscal Quarter 2010		25.60		17.99
Fourth Fiscal Quarter 2010		25.60		21.30
First Fiscal Quarter 2011		23.75		18.00
Second Fiscal Quarter 2011		25.30		22.24
Third Fiscal Quarter 2011		28.85		24.88
Fourth Fiscal Quarter 2011		28.59		23.91
First Fiscal Quarter 2012		26.78		21.23
Month
April 2011		26.78		23.28
May 2011		24.15		21.23
June 2011		24.80		23.13
July 2011		24.50		22.90
August 2011		23.90		23.24
September 2011 (through September 26, 2011)		25.50		23.80

Source: Bloomberg.

On September 26, 2011, the last reported closing sale price of Cosan’s common shares on the BM&FBOVESPA was R$ 24.14 per share.

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Trading on the BM&FBOVESPA

The BDRs are traded only in the secondary market of the BM&FBOVESPA, and private trading is not permitted. The CVM and the BM&FBOVESPA have discretionary authority to suspend trading in shares of a particular issuer under certain circumstances. Trading in securities listed on the BM&FBOVESPA may be effected off the exchanges in the over-the-counter market in certain limited circumstances. The shares of all companies listed on the BM&FBOVESPA, including the Novo Mercado and Level 1 and Level 2 companies are traded together. Settlement of transactions occurs three business days after the trade date. Delivery of and payment for shares are made through the facilities of separate clearing houses for each exchange, which maintain accounts for member brokerage firms. The seller is ordinarily required to deliver the shares to the clearing house on the second business day following the trade date. The clearing house for the BM&FBOVESPA is the Companhia Brasileira de Liquidação e Custódia, or “CBLC”. In order to reduce volatility, the BM&FBOVESPA has adopted a circuit breaker system pursuant to which trading sessions may be suspended for a period of 30 minutes or one hour whenever specified indices of the BM&FBOVESPA fall below the limits of 10% and 15%, respectively, in relation to the index levels for the previous trading session.

Trading on the BM&FBOVESPA by a holder not deemed to be domiciled in Brazil for Brazilian tax and regulatory purposes, or by a non-Brazilian holder, is subject to certain limitations under Brazilian foreign investment regulation. With limited exceptions, non-Brazilian holders that invest in Brazil under the terms of Conselho Monetário Nacional (National Monetary Council), or “CMN” Resolution No. 2,689 of January 26, 2000, as amended, or Resolution 2,689, may trade on Brazilian stock exchanges or Brazilian organized and authorized over-the-counter markets, and must restrict their securities trading to transactions on such markets. With limited exceptions, non-Brazilian holders may not transfer the ownership of investments made under Resolution 2,689 to other non-Brazilian holders through a private transaction. Resolution 2,689 requires that securities held by non-Brazilian holders be maintained in the custody of, or in deposit accounts with, financial institutions and be registered with a clearing house. Such financial institutions and clearing houses must be duly authorized to act as such by the Central Bank and the CVM.

Regulation of Brazilian Securities Markets

The Brazilian securities markets are principally governed by Law No. 6,385, of December 7, 1976, and by Law No. 6,404 of December 15, 1976, or “Brazilian corporate law”, each as amended and supplemented, and by regulations issued by the CVM, which has authority over stock exchanges and the securities markets generally; the CMN; and the Central Bank of Brazil, or “Central Bank”, which has, among other powers, licensing authority over brokerage firms and regulates foreign investment and foreign exchange transactions. These laws and regulations, among others, provide for licensing and oversight of brokerage firms, governance of the Brazilian stock exchanges, disclosure requirements applicable to issuers of traded securities, restrictions on price manipulation and protection of minority shareholders. They also provide for restrictions on insider trading. However, the Brazilian securities markets are not as highly regulated and supervised as the U.S. securities markets or securities markets in some other jurisdictions.

Any trades or transfers of the BDRs representing our class A common shares by our officers and directors, our controlling shareholders or any of the officers and directors of our controlling shareholders must comply with the regulations issued by the CVM. Under Brazilian corporate law, a Brazilian corporation is either publicly held (companhia aberta), as Cosan is, or closely held (companhia fechada). All publicly held companies are registered with the CVM and are subject to reporting requirements. Additionally, non-Brazilian companies sponsors of BDR programs are also registered with the CVM and, to the extent permitted by the respective applicable laws and regulations, are also subject to reporting requirements.

A company registered with the CVM may trade its securities either in stock exchanges or in the Brazilian over-the-counter market. The common shares issued by Cosan are listed on the Novo Mercado segment of the BM&FBOVESPA. We have applied to list the BDRs representing our class A common shares on the BM&FBOVESPA. The trading of securities of a listed company on the BM&FBOVESPA may be suspended at the request of such company in anticipation of a material announcement. Trading may also be suspended on the initiative of the BM&FBOVESPA or the CVM, based on or due to, among other reasons, a belief that a company has provided inadequate information regarding a material event or has provided inadequate responses to inquiries by the CVM or the BM&FBOVESPA.

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The Brazilian over-the-counter market consists of direct trades between individuals in which a financial institution registered with the CVM serves as intermediary. No special application, other than registration with the CVM, is necessary for securities of a publicly held company to be traded in this market. The CVM requires that it be given notice of all trades carried out in the Brazilian over-the-counter market by the respective intermediaries.

Investment in BDRs by Non-Residents of Brazil

Investors residing outside Brazil, including institutional investors, are authorized to purchase equity instruments, including BDRs, on a Brazilian stock exchange, provided that they comply with the registration requirements set forth in Resolution 2,689 and CVM Instruction No. 325. With certain limited exceptions, Resolution 2,689 investors are permitted to carry out any type of transaction in the Brazilian financial and capital markets involving a security traded on a stock, futures or organized and authorized over-the-counter market. Investments and remittances outside Brazil of gains, dividends, profits or other payments under our BDRs are made through the exchange markets and are subject to restrictions under foreign investment regulations which generally require, among other things, registration with the Central Bank and the CVM. In order to subscribe BDRs through the foreign exchange market, under the Resolution 2,689, an investor residing outside Brazil must:

· appoint at least one representative in Brazil with powers to take actions relating to the investment;

· appoint an authorized custodian in Brazil for the investments, which must be a financial institution duly authorized by the Central Bank and the CVM; and

· through its representative, register itself as a foreign investor with the CVM and register the investment with the Central Bank.

Securities and other financial assets held by foreign investors pursuant to Resolution 2,689 must be registered or maintained in deposit accounts or under the custody of an entity duly licensed by the Central Bank or the CVM. In addition, securities trading by foreign investors are generally restricted to transactions on the Brazilian stock exchanges and organized over-the-counter markets involving securities listed for trading in such markets.

Additionally, an investor operating under the provisions of Resolution 2,689 must be registered with the Brazilian Taxpayers’ Registry, managed by the Brazilian Federal Revenue Office (Receita Federal do Brasil), pursuant to its Instruction No. 568. For information on certain possible Brazilian tax effects on the sale of our BDRs, see “Item 3. Key Information—D. Risk Factors”.

B. Plan of Distribution

Not applicable.

C. Markets

Our class A common shares are listed on the NYSE and trade under the symbol “CZZ”. The BDRs representing our class A common shares are listed on the BM&FBOVESPA and trade under the symbol “CZLT11”.

D. Selling Shareholders

Not applicable.

E. Dilution

Not applicable.

F. Expenses of the Issue

Not applicable.

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Item 10. Additional Information

A. Share Capital

Our authorized share capital consists of 1,000,000,000 class A common shares, par value US$0.01 per share, and 188,886,360 class B common shares, par value US$0.01 per share. The authorized class B common shares are, in turn, divided into two series: 96,332,044 class B series 1 common shares, par value US$0.01 per share; and 92,554,316 class B series 2 common shares, par value US$0.01 per share. We have 174,355,341 class A common shares and 96,332,044 class B series 1 common shares issued and outstanding.

As of the date of this annual report, no preference shares are issued and outstanding. All of our common shares issued and outstanding prior to completion of the exchange offer are and will be fully paid, and all of our shares to be issued in the exchange offer will be issued as fully paid. In accordance with Bermuda law, and subject to any contrary provision in any agreement between us and our shareholders, in relation to fully-paid shares of our company, no shareholder shall be obliged to contribute further amounts to the capital of our company, either in order to complete payment for their shares, to satisfy claims of creditors of our company, or otherwise; and no shareholder will be bound by an alteration of the memorandum of association or by-laws of our company after the date on which he or she became a shareholder, if and so far as the alteration requires him or her to take, or subscribe for additional shares, or in any way increases his or her liability to contribute to the share capital of, or otherwise to pay money to, our company.

Pursuant to our by-laws, and subject to the requirements of any stock exchange on which our shares are listed, our board of directors is authorized to issue any of our authorized but unissued share capital.

B. Memorandum and By-laws

General

We are a limited liability exempted company incorporated under the laws of Bermuda on April 30, 2007. We are registered with the Registrar of Companies in Bermuda under registration number EC 39981. Our registered office is located at Canon’s Court, 22 Victoria Street, Hamilton HM12, Bermuda.

The objects of our business are set forth in our memorandum of association and provide that we have unrestricted objects and powers and rights including to:

· import, export, produce and sell ethanol, sugar, sugarcane and other sugar by-products;

· distribute and sell fuel and other fuel by-products;

· produce and market electricity, steam and other co-generation by-products;

· render technical services related to the activities mentioned above; and

· hold equity interests in other companies.

There have been no bankruptcy, receivership or similar proceedings with respect to us or our subsidiaries.

Issued Share Capital

Under our by-laws, the holders of our class A common shares and class B common shares will be offered the preemptive right to purchase, in the first instance, on a pro rata basis according to their ownership interests, additional shares in the event of any increase in share capital. However, this preemptive right may be waived by (1) a majority of our board of directors in the case of an offering (whether or not registered under the Securities Act) or (2) a majority of the independent directors on our board of directors in any circumstance.

Pursuant to and in accordance with the Notice to the Public dated June 1, 2005 issued by the Bermuda Monetary Authority, there is no limitation on the right of non-residents of Bermuda to hold our shares as long as we remain listed on the NYSE.

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Common Shares

Holders of class A common shares are entitled to one vote per share on all matters submitted to a vote of shareholders in general meeting. Holders of class B series 1 common shares or class B series 2 common shares are entitled to ten votes per share on all matters submitted to a vote of shareholders in general meeting, except as otherwise provided by our by-laws.

Except for the conversion provisions relating to our class B common shares, holders of our class A common shares and class B common shares have no redemption, conversion or sinking fund rights. Unless a different majority is required by law or by our by-laws, resolutions to be approved by holders of common shares require approval by a simple majority of votes cast at a meeting at which a quorum is present.

In the event of our liquidation, dissolution or winding-up, the holders of class A common shares and class B common shares are entitled to share equally and ratably in our assets, if any, remaining after the payment of all of our debts and liabilities, subject to any liquidation preference on any outstanding preference shares.

Preference Shares

Under our by-laws, we may, subject to the affirmative vote of a majority of our board of directors and, in certain circumstances as provided for in our by-laws, a majority of our class A common shares and class B common shares, each voting as a separate class, establish one or more series of preference shares having such number of shares, designations, dividend rates, relative voting rights, conversion or exchange rights, redemption rights, liquidation rights and other relative participation, optional or other special rights, qualifications, limitations or restrictions as may be fixed. Such rights, preferences, powers and limitations as may be established could also have the effect of discouraging an attempt to obtain control of us. There are no outstanding preference shares, and we have no present plans to issue any preference shares.

Dividend Rights

For information concerning dividend rights of our class A common shares, class B series 1 common shares and class B series 2 common shares, see “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Dividends and Dividend Policy”.

Tag-along Rights

Following the consummation of our initial public offering, no person or group of persons (other than a holder of class B series 1 common shares) may, in a transaction or series of transactions, acquire, directly or indirectly, the beneficial ownership of class A common shares representing more than 15% of our issued and outstanding common shares from any person or otherwise acquire control over our company, unless the terms and conditions of such transaction or transactions include an offer by the acquiring person or group of persons to the holders of all other class A common shares or class B common shares to acquire at the option of each applicable shareholder, all or any part of the respective shares owned by such shareholder. The price per share paid by the acquiring person or group of persons will be equivalent to the greater of (1) the highest price per share paid by the acquiring person or group of persons to acquire any such class A shares representing 15% of our issued and outstanding common shares or control, as applicable and (2) a price determined based on an appraisal report. The tag-along tender offer must be launched promptly after closing of the sale that triggers application of the tag-along provision and be completed within 60 days after the consummation of the transaction or series of transactions. In the event that the tag-along tender offer is not completed within the 60-day period, the holder or holders of the shares acquired in the sale that triggered the preemption rights will not be entitled to vote such shares, and we will be entitled to compel such holder or holders to sell these shares to unaffiliated persons deemed acceptable by a majority of our board of directors at the lower of (A) the lowest acquisition price for the class A common shares and (B) the then prevailing market price on the NYSE or such other stock exchange which constitutes the principal market for the class A common shares on a date selected by our board of directors that is not more than ten trading days on the applicable exchange following the expiration of the 60-day period.

Conversion

Our class A common shares are not convertible into any other shares of our authorized share capital.

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Each class B common share is convertible at any time after three years following our initial public offering (August 16, 2007), at the option of the holder, into one class A common share. In addition, each class B common share will, subject to limited exceptions applicable to class B series 1 common shares referred to below, automatically convert into one class A common share upon any transfer of its current beneficial ownership, whether or not for value.

Following the death of Mr. Rubens Ometto Silveira Mello or a determination by 66-2/3% of our board of directors based on the medical determination of two internationally-recognized certified physicians that he is permanently mentally incapacitated, the beneficial ownership of class B series 1 common shares may be transferred from him to his immediate family members without resulting in the automatic conversion of those shares into class A common shares. So long as class B common shares are issued and outstanding, in the case of death or permanent incapacitation of Mr. Rubens Ometto Silveira Mello, the following actions or events will be subject to approval by a majority of the then independent members of our board of directors, in addition to any other approval of shareholders or members of our board required by Bermuda law or our by-laws:

· appointment of the chief executive officer of our company or any of its subsidiaries (including successors thereof);

· changes to the core business strategy of our company or any of its subsidiaries;

· change name or corporate purpose of our company or any of its subsidiaries;

· amendments to any rights of the class B series 1 common shares;

· any recapitalization, stock split, combination, reclassification or similar action affecting equity interests in our company or any of its subsidiaries;

· redemption, capital reduction or other acquisition for value of any shares of equity interests in our company or any of its subsidiaries;

· any transaction or series of transactions resulting in a spin-off, delisting, merger, amalgamation, reorganization or combination of or by our company or any of its subsidiaries with, or any acquisition of, another person involving an amount in excess of US$250 million;

· any sale, lease, assignment, transfer or other disposition of assets valued in the aggregate, in excess of US$250 million;

· any voluntary liquidation, reorganization, dissolution or winding-up of, or a voluntary filing for bankruptcy protection by our company or any of its subsidiaries;

· the approval of the limit of the compensation of members of the board of directors or executive officers of our company or any of its subsidiaries;

· the making of any investment in excess of US$250 million other than investments in the ordinary course of business;

· entering into any joint venture, partnership or any similar arrangement other than in the ordinary course of business;

· any related-party transactions;

· the incurrence of any liens on properties valued, in the aggregate, in excess of US$250 million;

· amendment of the provisions of any of the foregoing actions or events; and

· agreeing to, or otherwise committing to take, any of the foregoing actions.

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Mr. Rubens Ometto Silveira Mello may also transfer his class B series 1 common shares to a trust, corporation, partnership or limited liability company in which he and, following his death or permanent incapacitation, a member or members of his immediate family, directly or indirectly, retain sole dispositive power and exclusive voting control with respect to such entity and the class B series 1 common shares held by such entity. In addition, any such trust, corporation, partnership, or limited liability company that directly holds class B series 1 common shares may distribute those shares to its respective partners, members or owners (which may further distribute the class B series 1 common shares to their respective partners, members or owners) without triggering a conversion to class A common shares, provided that Mr. Rubens Ometto Silveira Mello and, following his death or permanent incapacitation, his immediate family members continue to hold sole dispositive power and exclusive voting control over the class B series 1 common shares.

Class B common shares also will automatically convert into class A common shares when the aggregate outstanding class B series 1 common shares represent less than 45% of our total voting power in respect of the issued and outstanding share capital in the company. In addition, class B series 2 common shares will automatically convert into class A common shares if all the class B series 1 common shares convert into class A common shares.

Once transferred and converted into class A common shares, class B common shares will not be reissued. No class of common shares may be subdivided or combined unless the other class of common shares concurrently is subdivided or combined in the same proportion and in the same manner.

Transfer of Shares

Our board of directors may, in its discretion and without assigning any reason, refuse to register the transfer of a share that it is not fully paid. Our board of directors may also refuse to register the transfer of a share unless the instrument of transfer for such share is duly stamped (if required by law), is in respect of one class of shares, is in favor of less than 5 persons jointly and is accompanied by the relevant share certificate (if one has been issued) and such other evidence of the transferor’s right to make the transfer as our board of directors shall reasonably require. Any transfer of beneficial ownership of class B series 1 common shares or class B series 2 common shares not registered with the company will be null and void. For a period of three years following our initial public offering (August 16, 2007), holders of our class B series 2 common shares may not transfer less than all of the class B series 2 common shares that they own. Subject to these restrictions as are more fully set out in our by-laws a holder of shares in the company may transfer the title to all or any of such holder’s shares in the company by completing a form of transfer in such form as our board of directors may reasonably approve. The instrument of transfer must be signed by the transferor and transferee, although in the case of a fully paid share, our board of directors may accept the instrument signed only by the transferor. The board may also accept mechanically executed transfers.

Meetings of Shareholders

Under Bermuda law, a company is required to convene at least one general meeting of shareholders in each calendar year. Bermuda law provides that a special general meeting of shareholders may be called by the board of directors of a company and must be called upon the requisition of shareholders holding not less than 10% of the paid-up capital of the company as of the date of deposit carries the right to vote. Bermuda law also requires that shareholders be given at least five days’ advance notice of a general meeting, but the accidental omission to give notice to, or the non-receipt of a notice by, any person entitled to receive notice does not invalidate the proceedings at the meeting. Our by-laws provide that the chairman of the Board may call an annual general meeting or a special general meeting. Special general meetings of the shareholders may also be convened by our board of directors.

Under our by-laws, at least 10 clear days notice of an annual general meeting or a special general meeting must be given to each shareholder entitled to receive notice of such meeting. This notice requirement is subject to the ability to hold such meetings on shorter notice if notice is served pursuant to Bermuda law in the manner provided by the Companies Act 1981. The quorum required for a general meeting of shareholders is two or more persons present in person or by proxy and entitled to vote representing the holders of more than 45% of the aggregate voting power of the shares in the Company which by their terms carry the right to vote.

Any action required to be taken at a meeting of shareholders except in the case of the removal of auditors or directors may be taken without a meeting and without vote if a consent or consents in writing, setting forth the action so taken, is signed by the holders of issued and outstanding shares of the company, their proxy or corporate representative representing the percentage of votes required if the resolution had been voted on at a meeting of the shareholders. Notice of any resolution in writing shall be given to all shareholders entitled to attend a vote at a shareholder meeting.

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Access to Books and Records and Dissemination of Information

Members of the general public have the right to inspect the public documents of a company available at the office of the Registrar of Companies in Bermuda. These documents include the company’s memorandum of association and any alteration to its memorandum of association. The shareholders have the additional right to inspect the by-laws of the company, minutes of general meetings and the company’s audited consolidated financial statements, which audited financial statements must be presented at the annual general meeting unless waived in accordance with the provisions of the Companies Act 1981. The register of shareholders of a company is also open to inspection by shareholders and by members of the general public without charge. The register of shareholders is required to be open for inspection for not less than two hours in any business day (subject to the ability of a company to close the register of shareholders for not more than thirty days in a year). A company is required to maintain its share register in Bermuda but may, subject to the provisions of the Companies Act 1981, establish a branch register outside Bermuda. A company is required to keep at its registered office a register of directors and officers that is open for inspection for not less than two hours in any business day by members of the general public without charge. Bermuda law does not, however, provide a general right for shareholders to inspect or obtain copies of any other corporate records.

Election and Removal of Directors

Our by-laws provide that our board of directors must consist of between five and eleven directors or such greater number as the board may determine. Our board of directors currently consists of eleven directors. Our by-laws provide that at least 40% (and, following the death or permanent incapacitation of Mr. Rubens Ometto Silveira Mello, at least 60%) of the members of our board of directors must be independent (as defined by the rules promulgated by (1) the U.S. Securities and Exchange Commission under the Exchange Act and (2) by the NYSE or any other principal securities exchange on which the class A common shares are so listed).

Our board of directors is divided into three classes that are, as nearly as possible, of equal size. Each class of directors is elected for a three-year term of office, and the terms are staggered so that the term of only one class of directors expires at each annual general meeting. There is also no requirement under Bermuda law or in our by-laws that our directors must retire at a certain age.

Any shareholder wishing to propose for election as a director a person who is not an existing director must give notice to the company of the intention to propose that person for election. The notice must be given not later than 90 days before the first anniversary of the last annual general meeting, or ten days after the notice of the general meeting at which the directors will be elected, whichever is earlier.

Our by-laws provide that a director may be removed with or without cause by a majority of the other directors then in office. Our by-laws also provide that a director may be removed for cause by the affirmative vote of the holders of a majority of the shareholder votes cast at a general meeting at which a quorum is present, provided notice is given to the director of the shareholders general meeting convened to remove the director. A director may be removed without cause upon the affirmative vote of the holders of a majority of the aggregate voting power of the shares of the Company which carry the right to vote on all matters submitted to shareholders, provided notice is given to the director of the general meeting convened to remove the director, which notice must contain a summary of the facts justifying the removal and must be served on the director not less than fourteen days before the meeting. As long as a director has made a written request deposited at the registered office of the Company pursuant to the Companies Act 1981, a director is entitled to attend the general meeting and be heard at any general meeting called for his removal.

So long as a quorum remains in office, our board of directors may fill any casual vacancy occurring.

Proceedings of Board of Directors

Our by-laws provide that our business is to be managed and conducted by our board of directors. Bermuda law requires that our directors be individuals, but there is no requirement in our by-laws or Bermuda law that directors hold any of our shares.

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The remuneration of our directors is determined by our board of directors, and there is no requirement that a specified number or percentage of “independent” directors must approve any such determination. Our directors may also be paid all travel, hotel and other expenses properly incurred by them in connection with our business or their duties as directors.

Provided that he or she discloses a direct or indirect interest in any contract or arrangement with us as required by Bermuda law, our by-laws provide that a director is entitled to be counted in the quorum, but may not vote in respect of any such contract or arrangement in which he or she is interested. Under Bermuda law, a director (including the spouse or children of the director or any company (other than a company which is a holding company or a subsidiary of the company making the loan) of which such director, spouse or children own or control, directly or indirectly, more than 20% of the total capital or loan debt) cannot borrow from us without the consent of any shareholders holding in the aggregate not less than 90% of the total voting rights of all shareholders having the right to vote at any general meeting of the shareholders.

Waiver of Claims by Shareholders; Indemnification of Directors and Officers

Our by-laws contain a provision by virtue of which our shareholders waive any claim or right of action that they may have, both individually and on our behalf, against any director or officer in relation to any action or failure to take action by such director or officer, except in respect of any fraud or dishonesty of such director or officer. We understand that, in the opinion of the staff of the SEC, the operation of this provision as a waiver of the right to sue for violations of U.S. federal securities laws would likely be unenforceable in U.S. courts.

Our by-laws also indemnify our directors and officers in respect of their actions and omissions, except in respect of their fraud or dishonesty.

Amalgamations and Other Business Combinations

Under Bermuda law, the amalgamation or other business combination of a Bermuda company with another company (other than certain affiliated companies), unless the by-laws otherwise provide requires the amalgamation or other business combination to be approved by a majority of the Bermuda company’s board of directors and by a majority of 75% of those voting at the general meeting of the Bermuda company. The quorum for the shareholder approval is two persons holding or representing at least one-third of the issued shares of the Company.

Our by-laws provide that an amalgamation or other business combination (as defined in our by-laws) (other than with a wholly-owned subsidiary) that has been approved by our board of directors must only be approved by a majority of the votes cast at a general meeting of our shareholders at which the quorum must be two persons representing the holders of more than 45% of the aggregate voting power of the paid-up and outstanding shares carrying the right to vote. Any amalgamation or other business combination (as defined in our by-laws) not approved by our board of directors must be approved by resolution passed by 66 2/3% of all votes attaching to all shares then in issue entitling the holder to attend and vote on the resolution.

Specified Transactions Involving Interested Shareholders

Specified transactions include the following:

· any merger, consolidation or amalgamation of the Company with an interested shareholder;

· any disposition or security arrangement with or for the benefit of any interested shareholder involving any of our assets, securities or commitments or those of any subsidiary or any interested shareholder that has an aggregate fair market value and/or involves aggregate commitments of US$250 million or more or constitutes more than 10% of the book value of the total assets or 10% of the shareholders equity of the entity in question;

· the adoption of any plan for our liquidation or dissolution or for the discontinuation into another jurisdiction, unless proposed or adopted independently of any interested shareholder; or

· any reclassification of our shares or other securities, or recapitalization, or any merger, consolidation or amalgamation with any of our subsidiaries or any other transaction that has the effect of increasing the proportionate share of any class of shares beneficially owned by an interested shareholder.

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In addition to any affirmative vote required by law or our by-laws, a specified transaction with any interested shareholder will require the affirmative vote of not less than 66 2/3% of the aggregate voting power of the voting shares, voting together as a single class, excluding voting shares beneficially owned by any interested shareholder. Alternatively, a specified transaction may proceed with any affirmative vote required by law or our by-laws if the following principal conditions are satisfied in relation to common shares: (1) the approval of a majority of directors who are not affiliates of the interested shareholder; and (2) the aggregate amount of the cash and the fair market value as of the date of the consummation of the specified transaction of consideration other than cash to be received by the holder of common shares in such specified transaction shall be at least equal to the highest per share amount paid by the interested shareholder within a two-year period immediately prior to the first public announcement of the proposed specified transaction; or in the transaction in which he or she became such an interested shareholder (whichever is higher) or, if higher, the closing sales prices of such shares on the NYSE on the announcement date for the specified transaction or on the date of the transaction in which he or she became such an interested shareholder.

For purposes of our by-laws, an “interested shareholder” includes, among others, any person who is or has publicly disclosed an intention to become the beneficial owner of shares representing 10% or more of our aggregate voting power of the voting shares.

Non-Competition Provision Applicable to Brazil

Our by-laws provide that we will operate and conduct business in Brazil exclusively through Cosan and its subsidiaries, and we will not compete, directly or indirectly, with Cosan in Brazil, unless otherwise approved by a majority of our independent directors.

Amendment of Memorandum of Association and By-laws

Bermuda law provides that the memorandum of association of a company may be amended by a resolution passed at a general meeting of shareholders of which due notice has been given.

Our by-laws provide that no by-law will be rescinded, altered or amended, unless it has been approved by a resolution of our board of directors and by a resolution of the shareholders. In the case of rescission, alteration or amendment to the by-laws relating to interpretation, rights of shares, modification of rights, indemnity of directors and officers, amalgamations and other business combinations, specified transactions involving interested shareholders, our discontinuation into another jurisdiction, tag-along rights and amendment or alterations of by-laws, the required resolutions must include the affirmative vote of at least 66 2/3% of our directors then in office and holders of at least 66 2/3% of class A common shares and at least a majority of class B common shares then in issue entitling the holder to attend and vote on the resolution, with each class voting separately as a class. In the case of rescission, alteration or amendment to the by-laws relating to the transmission of shares upon the death of a holder of class B series 1 shares, election of directors, the removal of directors, the increase of share capital and the alteration of share capital, the requisite affirmative votes are a majority of the directors then in office and holders of a majority of each of class A common shares and class B common shares then in issue entitling the holder to attend and vote on the resolution, with each class voting separately as a class.

Under Bermuda law, the holders of an aggregate of not less than 20% in par value of the company’s issued and outstanding share capital or any class thereof and or the holders of not less in the aggregate than 20% of the company’s debentures entitled to object to amendments to the memorandum of association have the right to apply to the Bermuda court for an annulment of any amendment of the memorandum of association adopted by shareholders at any general meeting, other than an amendment which alters or reduces a company’s share capital as provided in the Companies Act 1981.

Where such an application is made, the amendment becomes effective only to the extent that it is confirmed by the Bermuda court. An application for an annulment of an amendment of the memorandum of association must be made within twenty-one days after the date on which the resolution altering the company’s memorandum of association is passed and may be made on behalf of persons entitled to make the application by one or more of their number as they may appoint in writing for the purpose. No application may be made by shareholders voting in favor of the amendment.

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Modification of Rights

While we have more than one class of shares and more than one series of class B common shares, the rights attaching to any class or series, unless otherwise provided for by the terms of issue of the relevant class or series, may be modified with the consent in writing of the holders or the approval of the votes cast at a general meeting representing not less than 66- 2/3 % of the aggregate voting power of the shares in issue and not less than 75% of the aggregate voting power of the issued shares of that class or series, as the case may be. The quorum for any such general meeting will be two or more persons holding or representing by proxy one-third of the voting power of the issued shares of the class or series, as the case may be. Our by-laws specify that the creation or issue of shares ranking equally with existing shares will not, unless expressly provided by the terms of issue of those new shares, vary the rights attached to existing shares.

Appraisal Rights and Shareholder Suits

Under Bermuda law, in the event of an amalgamation of a Bermuda company with another company, a shareholder of the Bermuda company who is not satisfied that fair value has been offered for such shareholder’s shares may apply to the Bermuda court to appraise the fair value of those shares within one month of the giving of the notice of the shareholders’ meeting called to approve the amalgamation.

Class actions and derivative actions are generally not available to shareholders under Bermuda law. Bermuda courts, however, may permit in certain circumstances a shareholder to commence an action in the name of a company to remedy a wrong to the company where the challenged act would allegedly be beyond the power of the company or illegal. In addition, consideration would be given by a Bermuda court to acts that would allegedly constitute a fraud against the minority shareholders or, for instance, where an act requires the approval of a greater percentage of the company’s shareholders’ voting power than that which actually approved it.

When the affairs of a company are being conducted in a manner which is oppressive or prejudicial to the interests of some or all of the shareholders, one or more shareholders may apply to a Bermuda court, which may make such order as it sees fit, including an order regulating the conduct of the company’s affairs in the future or ordering the purchase of the shares of any shareholders by other shareholders or by the company.

Capitalization of Profits and Reserves

Pursuant to our by-laws, our board of directors may capitalize any part of the amount of our share premium account or any reserve or fund which is available for distribution by either: (1) paying up unissued shares to be allotted on a pro rata basis to shareholders as fully paid bonus shares; or (2) paying up in full partly paid shares of those shareholders who would be entitled to such sums if they were distributed by way of dividend or other distribution (or partly in one way and partly the other) provided that a share premium account may be applied only in paying up of unissued shares to be issued to such shareholders as fully paid.

Untraced Shareholders

Our by-laws provide that our board of directors may forfeit any dividend or other monies payable in respect of any shares which remain unclaimed for six years. In addition, we are entitled to cease sending dividend warrants and checks by post or otherwise to a shareholder if such instruments have been returned undelivered to, or left uncashed by, such shareholder on at least two consecutive occasions or, following one such occasion, reasonable inquires have failed to establish the shareholder’s new address. This entitlement ceases if the shareholder claims a dividend or cashes a dividend check or a warrant.

Certain Provisions of Bermuda Law

We have been designated by the Bermuda Monetary Authority as a non-resident for Bermuda exchange control purposes. This designation allows us to engage in transactions only in currencies other than the Bermuda dollar, and there are no restrictions on our ability to transfer funds (other than funds denominated in Bermuda dollars) in and out of Bermuda or to pay dividends to U.S. residents who are holders of our common shares.

Pursuant to a Notice to the Public dated June 1, 2005, issued by the Bermuda Monetary Authority, the Bermuda Monetary Authority granted general permission for the issue and subsequent transfer of any shares of a Bermuda company to and between non-residents of Bermuda where any shares of the company are listed and remain so listed

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on an appointed stock exchange, which includes the NYSE. Approvals or permissions given by the Bermuda Monetary Authority do not constitute a guarantee by the Bermuda Monetary Authority as to our performance or our creditworthiness. Accordingly, in giving such permissions, the Bermuda Monetary Authority will not be liable for the financial soundness, performance or default of our business or for the correctness of any opinions or statements expressed in this annual report.

In accordance with Bermuda law, share certificates are only issued in the names of companies, partnerships or individuals. In the case of a shareholder acting in a special capacity (for example, as a trustee), certificates may, at the request of the shareholder, record the capacity in which the shareholder is acting. Notwithstanding such recording of any special capacity, we are not bound to investigate or see to the execution of any such trust. We will take no notice of any trust applicable to any of our shares, whether or not we have been notified of such trust.

Registrar or Transfer Agent

A register of holders of the class A common shares and class B common shares and any other issued share capital is maintained by Compass Administration Services Ltd. in Bermuda, and a branch register is maintained in the United States by Mellon Investor Services LLC, who serves as branch registrar and transfer agent.

Anti-takeover Effects Of Our By-laws

Our by-laws contain provisions that could make it more difficult for a third party to acquire us without the consent of our board of directors. These provisions provide, among other things, for:

· a classified board of directors with staggered three-year terms;

· restrictions on the time period in which directors may be nominated;

· the affirmative vote of a majority of our directors then in office and a majority of all votes cast at a general meeting or, if not approved by a majority of the directors in office, at least 66 2/3% of all votes attaching to all shares then in issue for amalgamation and other business combination transactions; and

· the tag-along rights described under “—Tag-Along Rights”.

C. Material Contracts

On August 25, 2010, we entered into a definitive agreement, or the Framework Agreement, for the creation of the Joint Venture with Shell. The transaction closed on June 1, 2011. Pursuant to the Joint Venture, Cosan and its subsidiaries contributed their sugar and ethanol businesses, their energy cogeneration business, their fuel distribution business and their interests in certain ethanol logistics facilities at the Port of Santos and transferred debt minus cash and cash equivalent of approximately R$5,596.2 million to the Joint Venture. Shell and its affiliates contributed their Brazilian fuel distribution business, their Brazilian aviation fuels business, their beneficial interest in two companies (Iogen Corp. and Codexis, Inc.) involved in the research and development of biomass fuel, including ethanol, and a capital contribution resulting in cash proceeds to the Joint Venture of approximately US$1.6 billion.

Cosan and its subsidiaries retained, and therefore did not contribute to the Joint Venture, their lubricants manufacturing and marketing business, their sugar logistics business, their land prospecting and development business, the right to conduct their own sugar trading business globally and their sugar retail brands. Additionally, we have elected to retain, and not contribute to the Joint Venture, the operation of our sugar retail business. Shell and its affiliates retained and did not contribute to the Joint Venture their exploration and production, chemicals and gas and power businesses in Brazil, their lubricants manufacturing and marketing business, their trading business and the Shell brand (which has been licensed to the Joint Venture for use in its downstream business, including retail in Brazil).

The Joint Venture consists of three separate legal entities.

Raízen Energia Participações S.A.: a sugar and ethanol company, which, among other things, conducts the production of sugar and ethanol, as well as all cogeneration activities. Cosan and its subsidiaries and Shell and its affiliates each own 50% common equity interest in this entity. In addition, Cosan and its subsidiaries own 51% of

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the voting shares (and preferred shares bearing preferential dividend rights in certain circumstances), whereas Shell and its affiliates own 49% of this entity’s voting shares.

Raízen Combustíveis S.A.: a downstream company, which conducts the supply, distribution and sale of fuels in Brazil. The resulting company has a network of approximately 4,500 fuel stations throughout Brazil. Cosan and its subsidiaries and Shell and its affiliates likewise each own 50% common equity interest in this entity. In this entity, however, Cosan and its subsidiaries own 49% of the voting shares, whereas Shell and its affiliates own 51% of the voting shares. Cosan and its subsidiaries and Shell and its affiliates also hold preferred shares bearing preferential dividend rights in certain circumstances if certain contingent targets are met.

Raízen S.A.: a management company, which is the Joint Venture’s face to the market and facilitates the building of a unified corporate culture. Cosan and its subsidiaries and Shell and its affiliates each own 50% of the equity and voting interests in this company.

The closing of the Joint Venture occurred on June 1, 2011, however, the transaction is still subject to regulatory review and imposes certain post-closing obligations on the parties, including but not limited to the receipt of CADE antitrust approval. See “Item 3. Key Information—D. Risk Factors—Risks Relating to the Joint Venture—We cannot provide any assurance that we will obtain the Brazilian antitrust approval to continue to operate the Joint Venture on acceptable terms or predict whether the approval will impose conditions on our businesses in connection with the transaction.”

The foregoing description of the Framework Agreement does not purport to be complete and is qualified in its entirety by reference to the Framework Agreement, which is filed as Exhibit 4.3 as amended by the First Amendment to the Framework Agreement entered into on April 7, 2011, and the Second Amendment to the Framework Agreement entered into on June 1, 2011 which are filed as Exhibits 4.4 and 4.4, respectively.

In the event that Raízen Energia or Raízen Combustíveis seek external financing, they shall provide financial support to each other, including by way of advancing funds to each other and guaranteeing each other’s debt obligations, in each case to the extent approved by the Supervisory Board and consistent with the business plan.

The Joint Venture is run by a management team drawn from Cosan and Shell with a proven track record in sugar, ethanol and fuels. The executive board of the Joint Venture is overseen by the supervisory board. The supervisory board is responsible for appointing members of the executive board and monitors the activities and reports of the executive board. The supervisory board consists of three directors nominated by Cosan and three directors nominated by Shell. Our chairman, Rubens Ometto Silveira Mello, is the chairman of the supervisory board. Cosan and Shell have each designated a shareholder representative who is responsible for determining the Joint Venture’s strategic priorities and resolving any deadlock within the supervisory board. Our shareholder representative is Rubens Ometto Silveira Mello.

Other Agreements

Shell and Cosan have entered into other definitive agreements, among others, concerning the scope of the Joint Venture, the governance and management of the Joint Venture and the granting of reciprocal put and call options concerning their interests in the Joint Venture. Each of these agreements was entered into on June 1, 2011.

The shareholders’ agreements for Raízen Energia and Raízen Combustíveis establish the scope and governance of the Joint Venture, as well as its dividend policy. The agreements provide that the scope of the Joint Venture is the global production of sugar cane-based ethanol and sugar and the distribution, commercialization and sale of fuel products within Brazil. Cosan, Shell and their respective affiliates are prohibited from competing with the Joint Venture as long as they remain shareholders of the Joint Venture (subject to customary exceptions).

The shareholders’ agreements provide that the Joint Venture will be governed by supervisory boards that are composed of six members: three nominated by Cosan, with Mr. Rubens Ometto Silveira Mello acting as chairman, and three nominated by Shell. Most decisions by the supervisory boards require a quorum of two members and are generally made by a majority present and voting. Certain significant matters, however, will require the consent of five of the six or four of the six members, as the case may be.

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The matters which require the consent of five of the six or four of the six members include but are not limited to the following:

· setting the general strategic guidelines and direction for the Joint Venture and amending and updating the Joint Venture’s business plan;

· appointing, removing or terminating members of the executive board;

· determining the compensation and benefits of certain employees;

· amending key policies and procedures of the Joint Venture;

· adopting or amending the annual and capital budgets;

· instituting or settling any litigation or dispute in excess of a specified sum or which could damage the reputation of the Joint Venture, Cosan or Shell;

· selling, assigning, transferring or encumbering assets of the Joint Venture outside of the ordinary course of business in excess of a specified amount;

· entering into transactions (including mergers, stock purchases or asset purchases) of which the value or purchase price exceeds a specified amount;

· making capital expenditures in excess of a specified amount, subject to certain exceptions;

· submitting any matters, including financial statements and reports, to the meeting of the Joint Venture’s shareholders;

· entering into any contract, agreement or instrument outside of the ordinary course of business and that provides for payments in excess of a specified amount;

· entering into material amendments, modifications or waivers or terminating any contract where payment obligations exceed a specified amount;

· making any decision to borrow money or guarantee the payment or performance of any obligation in excess of a specified amount or to prepay indebtedness of a specified amount;

· creating any encumbrance over or the issuance of any Joint Venture securities or any option relating to any Joint Venture securities, subject to certain exceptions;

· approving the credit limits or the extension of credit to any customer of the Joint Venture in excess of a specified amount; and

· entering into, amending, terminating or renewing any insurance policy.

If the supervisory boards cannot reach a decision with respect to a matter that is their responsibility, one representative of Cosan and one representative of Shell will meet to attempt to resolve the matter. Any decision by these shareholder representatives must be unanimous. If the shareholder representatives cannot reach a joint decision, no decision would be taken or effected and the status quo would prevail.

Additionally, certain matters require the consent of the shareholders of the Joint Venture. These matters include, but are not limited to, removal of any member of a supervisory board; approval of supervisory board resolutions relating to dividend payments; approval of management accounts and financial statements; amendments to the by-laws of Raízen Energia or Raízen Combustíveis; and issuance of securities by the Joint Venture.

The shareholders’ agreements provide that a shareholder may lose certain governance rights if it fails to make capital contributions that may be required pursuant to the shareholders’ agreements or to make certain payments required pursuant to the Framework Agreement. If the delinquent party pays or contributes such amounts in full

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within a specified cure period, the respective governance rights of the shareholders are returned to their original state prior to any such delinquency.

The day-to-day management of the Joint Venture is conducted by the executive boards, composed of a chief executive officer and other senior executive officers. The shareholders’ agreements set forth the various functions and responsibilities of the chief executive officer and senior management, as well as the actions that may be taken by the executives without the approval of the relevant supervisory board.

D. Exchange Controls

See “Item 9. The Offer and Listing—A. Offer and Listing Details”.

E. Taxation

U.S. Federal Income Tax Considerations

The following are the material U.S. federal income tax consequences of owning and disposing of our common shares. This discussion applies to you only if you are a U.S. Holder (as defined below) that holds our common shares as capital assets for tax purposes.

This discussion does not describe all of the tax consequences that may be relevant to you in light of your particular circumstances, including alternative minimum tax consequences and differing tax consequences applicable to you if you are, for instance:

· a financial institution;

· a regulated investment company;

· a dealer or trader in securities;

· holding common shares as part of a “straddle,” integrated transaction or similar transactions;

· a person whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;

· a partnership for U.S. federal income tax purposes;

· a tax-exempt entity;

· a person that owns or is deemed to own ten percent or more of our voting stock; or

· a person who acquires our common shares pursuant to the exercise of any employee stock option or otherwise as compensation.

If you are a partnership for U.S. federal income tax purposes holding common shares, the U.S. federal income tax treatment of your partners will generally depend on the status of the partners and upon the activities of your partnership.

This discussion is based on the U.S. Internal Revenue Code of 1986, as amended, or the “Code,” administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations, all as of the date hereof, any of which is subject to change, possibly with retroactive effect.  Please consult your tax advisers concerning the U.S. federal, state, local and foreign tax consequences of owning and disposing of common shares in your particular circumstances.

As used herein, the term “U.S. Holder” means a beneficial owner of common shares that is, for U.S. federal tax purposes:

· a citizen or individual resident of the United States;

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· a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or any state therein or the District of Columbia or

· an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.

This discussion assumes that we are not, and will not become a passive foreign investment company, as described below.

Taxation of Distributions

Distributions paid on common shares, other than certain pro rata distributions of common shares, will be treated as dividends to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). To the extent that the amount of any distribution exceeds our current and accumulated earnings and profits for a taxable year (as determined under U.S. federal income tax principles), the distribution will first be treated as a tax-free return of capital, causing a reduction in the adjusted basis of your common shares, and the balance in excess of adjusted basis will be treated as capital gain recognized on a sale or exchange. Because we do not expect to determine our earnings and profits in accordance with U.S. federal income tax principles, you should expect that a distribution will generally be reported as a dividend. Subject to applicable limitations, dividends paid to certain non-corporate U.S. Holders in taxable years beginning before January 1, 2013, will be taxable at favorable rates, up to a maximum rate of 15%, provided that certain holding period and other requirements are satisfied. The amount of the dividend will be treated as foreign-source dividend income to you and will not be eligible for the dividends-received deduction generally allowed to U.S. corporations under the Code.

Dividends will be included in your income on the date you receive them.

Sale or Other Disposition of Common Shares

For U.S. federal income tax purposes, gain or loss you realize on the sale or other disposition of common shares will be capital gain or loss, and will be long-term capital gain or loss if you held those shares for more than one year at the time of disposition.  The amount of gain or loss will be equal to the difference between your tax basis in the shares disposed of and the amount realized on the disposition.  The gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes.

Passive Foreign Investment Company Rules

In general, a non-U.S. corporation will be classified as a “passive foreign investment company,” or “PFIC,” for U.S. federal income tax purposes in any taxable year in which, after applying certain look-through rules, either (1) at least 75% of its gross income is “passive income” or (2) at least 50% of the average value of its gross assets is attributable to assets that produce “passive income” or are held for the production of “passive income.”  Passive income for this purpose generally includes dividends, interest, royalties, rents and gains from commodities, foreign currency and securities transactions.  Based on the current composition of our income and the market value and composition of our assets, we do not believe that we were a PFIC for our taxable year ended March 31, 2011.  However, because PFIC status depends upon the composition of our income and assets and the market value of our assets (including, among others, goodwill and less than 25% owned equity investments) from time to time, we cannot assure you that we will not be considered a PFIC for any taxable year.

If we were treated as a PFIC for any taxable year during which you held our common shares, gain recognized by you on a sale or other disposition (including certain pledges) of the common shares would be allocated ratably over your holding period for the common shares. The amounts allocated to the taxable year of the sale or other exchange and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, and an interest charge would be imposed on the resulting tax liability. Further, to the extent any distribution in respect of common shares exceeded 125% of the average of the annual distributions on common shares received by you during the preceding three years or your holding period, whichever was shorter, that distribution would be subject to taxation in the same manner as gain, described immediately above. Certain elections might be available that would result in alternative treatments (such as mark-to-market treatment) of the common shares. You should consult your tax adviser to determine whether these elections would be available and, if so, what the consequences of the alternative treatments would be in your particular circumstances.

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In addition, if we were to be treated as a PFIC in a taxable year in which we paid a dividend or the prior taxable year, the 15% tax rate discussed above with respect to dividends paid to non-corporate holders would not apply.

Information Reporting and Backup Withholding

Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting and backup withholding unless (1) you are an exempt recipient or (2) in the case of backup withholding, you provide a correct taxpayer identification number and certify that you are not subject to backup withholding.

The amount of any backup withholding from a payment to you will be allowed as a credit against your U.S. federal income tax liability and may entitle you to a refund, provided that the required information is timely furnished to the Internal Revenue Service.

For taxable years beginning after March 18, 2010, new legislation requires certain U.S. Holders who are individuals to report information relating to stock of a non-U.S. person, subject to certain exceptions (including an exception for stock held in custodial accounts maintained by a U.S. financial institution).  You should consult your tax adviser regarding the effect, if any, of this legislation on your ownership and disposition of our common shares.

Bermuda Tax Considerations

The Company has received an assurance from the Ministry of Finance granting an exemption, until March 28, 2016, from the imposition of tax under any applicable Bermuda law computed on profits or income or computed on any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance tax, provided that such exemption shall not prevent the application of any such tax or duty to such persons as are ordinarily resident in Bermuda and shall not prevent the application of any tax payable in accordance with the Land Tax Act 1967 or otherwise payable in relation to land in Bermuda leased to the Company.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.

H. Documents on Display

Statements contained in this annual report as to the contents of any contract or other document referred to are not necessarily complete, and each of these statements is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit hereto. A copy of the complete annual report including the exhibits and schedules filed herewith may be inspected without charge at the public reference facilities maintained by the SEC at 100 F Street NE., Washington, D.C., and at the SEC’s regional offices located at 233 Broadway, New York, N.Y., 10279 and North Western Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 - 2511. Copies of such materials may be obtained by mail from the Public Reference Section of the SEC, 100 F Street NE., Washington, D.C., at prescribed rates. Such reports and other information may also be inspected at the offices of the New York Stock Exchange, 11 Wall Street, New York, New York 10005, on which our class A common shares are listed. In addition the SEC maintains a website that contains information filed electronically with the SEC, which can be accessed over the Internet at http://www.sec.gov.

We are subject to the information and periodic reporting requirements of the Securities Exchange Act of 1934 as amended, and, in accordance therewith, file periodic reports and other information with the SEC. However, as a foreign private issuer, we are exempt from the rules under the Exchange Act relating to the furnishing and content of proxy statements and relating to short-swing profits reporting and liability.

We also file consolidated financial statements and other periodic reports with the CVM located as Rua Sete de Setembro, 111, Rio de Janeiro, Brazil 20159-900.

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I. Subsidiary Information

Not applicable.

Item 11. Quantitative and Qualitative Disclosures About Market Risk

Risk Management

We consider market risk to be the potential loss arising from adverse changes in market rates and prices. We are exposed to a number of market risks arising from our normal business activities. Such market risks principally involve the possibility that changes in commodity prices, interest rates or exchange rates will adversely affect the value of our financial assets and liabilities or future cash flows and earnings. We periodically review our exposure to market risks and determine at the senior management level how to manage and reduce the impact of these risks. We use derivative financial instruments for the purpose of managing market risks, primarily fluctuations in commodity prices and foreign exchange. While these hedging instruments fluctuate in value, these variations are generally offset by the value of the underlying hedged exposures. The counterparties to these contractual arrangements are primarily commodities exchanges, in the case of commodity futures and options, and major financial institutions, in the case of foreign exchange derivative instruments and interest rate swaps. As a result, we do not believe that we are subject to any material credit risk arising from these contracts, and accordingly, we do not anticipate any material credit-related losses. We have formed a risk management committee that is responsible for advising the board on risk management, by establishing exposure limits and hedging ratios so as to achieve better operational and financial controls.

Commodities Risk

The availability and prices of agricultural commodities fluctuate widely due to unpredictable factors, such as weather, level of crop plantings, worldwide government agricultural programs and policies, changes in global demand resulting from population growth and migration, changes in standards of living and global production of similar competitive products. We enter into various types of derivative contracts, primarily commodity exchange-traded futures and options, in order to manage our exposure to adverse price changes in sugar. We use sensitivity analysis to regularly estimate our exposure to market risk on our agricultural commodity position.

Based on the sugar sales volumes in fiscal year 2011, a hypothetical 10% decrease in unhedged prices would reduce our sugar net sales by approximately R$245.9 million in fiscal year 2011 (R$ 241.1 in fiscal year 2010) as set forth below.

	Fair Value - Net Sales		Sales Volume		Market Risk - 10% Price Decrease
	(in millions of R$ )		(thousand tons of sugar or thousand liters of ethanol)		(in millions of R$)
Sugar sales volumes in the twelve months ended March 31, 2011		3,853.4		4,290.8		245.9
Hedged sugar position at March 31, 2011 (*)		1,679.2		1,831.6		—
VHP sugar		1,662.4		1,813.2		—
White sugar		16.8		18.3		—
Unhedged sugar position at March 31, 2010		2,174.1		2,459.2		245.9
Total unhedged position at March 31, 2011		2,174.1		2,459,2		245.9

(*)  includes derivative futures and firm commitments with customers where there are already fixed prices for the sugar to be sold.

For risk management purposes and to evaluate our overall level of commodity price exposure, we further reduce our exposure to commodity market risk related to the sugar and ethanol produced from sugarcane that we purchase from growers and sugarcane harvested from leased land, as we pay for the lease costs in TSR. Unlike sugarcane harvested from our own land, the price of sugarcane supplied by growers or the lease payments we incur to produce sugarcane harvested by us from leased land is indexed to the market price of sugar and ethanol, which provides a partial natural hedge to our sugar price exposure. When we acquire sugarcane from growers, we take samples from

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the delivered sugarcane to measure its sugar content and pay only for the TSR that we acquire according to a formula established by CONSECANA. In addition, the lease payments are also calculated based on an established TSR volume and a price calculated using the CONSECANA formula. Based on the foregoing, we believe that as of March 31, 2011 a hypothetical 10% decrease in prices would increase our net commodities risk by R$ 39.3 million (R$294.4 as of March 31, 2010) as set forth below.

	Fair Value - Net Sales		Commodities Risk - 10% Price Decrease
	(in millions of R$)		(in millions of R$)
Total unhedged position at March 31, 2011		2,459.2		245.9
Sugarcane supplied by growers in fiscal year 2011		1,075.8		(107.6	)
Sugarcane from leased land in fiscal year 2011		989.6		(99	)
Net unhedged position at March 31, 2011		393.8		39.3

As of March 31, 2011, we had entered into hedging agreements with respect to 1,506.8 thousand tons of VHP sugar (Futures sold less Futures bought) at an average fixed price of US$18.96 per pound and 65 thousand tons of refined sugar at an average fixed price of US$595.78 per ton.

The table below provides information about the Company’s sugar derivative contracts that are sensitive to changes in commodity prices, specifically sugar prices as of March 31, 2011. For the derivative contracts the table presents the notional amounts in tons, the weighted average contract prices, and the total US dollar contract amount by expected maturity dates.

On Balance Sheet Commodity Position and Related Derivatives:

Derivatives	Future Exchange	Contract	Screen	Expiration Date	Strike	Number of contracts	Avg. Price	Settlement Price	Notional	Carrying Amount		Fair Value
					(¢US$/lb)	lots	US$/ton	US$/ton	(tons)	(R$’000)		(R$000)
Future contracts – sell commitments	LIFFE	Sugar #5	Jun 2011	May 1, 2011	—	463	701.30	711.70	—	26,442		(302	)
Future contracts - sell commitments	NYBOT	#11	Jun 2011	May 1, 2011	—	4,099	26.82	27.11	—	200,552		(2,154	)
Future contracts – sell commitments	NYBOT	#11	Aug 2011	Jul 1, 2011	—	10,253	22.70	25.04	—	424,617		(43.705	)
Future contracts – sell commitments	NYBOT	#11	Nov 2011	Oct 1, 2011	—	10,107	21.08	24.16	—	388,694		(56,734	)
Future contracts - sell commitments	NYBOT	#11	Apr 2012	Mar 1, 2012	—	2,749	24.32	23.76	—	121,973		2.827
Total future contracts - sell commitments										1,162,278		(100,159	)
Future contracts - buy commitments	NYBOT	#11	Jun 2011	May 1, 2011	—	1,100	24.71	27.11	—	(49,591	)	4,807
Future contracts - buy commitments	NYBOT	#11	Aug 2011	Jul 1, 2011	—	150	24.80	25.04	—	(6,786	)	66
Future contracts - buy commitments	NYBOT	#11	Nov 2011	Oct 1, 2011	—	1,000	22.10	24.16	—	(40,314	)	3,758
Future contracts - buy commitments	NYBOT	#11	Apr 2012	Mar 1, 2012	—	1,654	16.26	23.76	—	(49,064	)	22.623
Total Future contracts - buy commitments										(145,755	)	31.253
Subtotal futures										1,016,524		(68,906	)
Call options – written	NYBOT/OTC	#11	Nov 2011	Oct 1, 2011	21.00	850	0.64	4.23	—	985		(6,559	)
Call options – written	NYBOT	#11	Nov 2011	Oct 1, 2011	21.50	1,100	1.82	3.90	—	3,651		(7,826	)
Call options – written	NYBOT	#11	Aug 2012	Jul 1, 2012	31.00	2,000	0.32	1.26	—	1,177		(4,597	)
Put options – purchase	NYBOT/OTC	#11	Nov 2011	Oct 1, 2011	18.00	850	0.64	0.37	—	985		574
Put options – purchase	NYBOT/OTC	#11	Nov 2011	Oct 1, 2011	18.50	1,100	1.78	0.46	—	3,566		923
Subtotal options										10,364		(17,484	)
Total commodities derivatives										1,026.888		(86,390	)

Interest Rate Risk

We have fixed and floating rate indebtedness, and, therefore, we are exposed to market risk as a result of changes in interest rates. We engage in interest rate-related hedging transactions from time to time to hedge certain interest rate risk exposures. As of March 31, 2011, 43%, or R$ 3.1 billion (54% or R$ 3.2billion as of March 31, 2010) of our consolidated total debt outstanding was fixed rate debt. Interest rate risk is the effect on our financial results resulting from an increase in interest rates on our variable rate debt indexed to the London Interbank Offered Rate, or “LIBOR”, the Long-Term Interest Rate (Taxa de Juros ao Longo Prazo), or “TJLP”, IGP-M and Interbank Deposit Certificate (Certificado de Depósito Interbancário), or “CDI”. Based on the amount of our floating-interest rate indebtedness at March 31, 2011, net of the swap derivative exchanging Libor to a fixed interest rate, a hypothetical 10% increase in market interest rates would increase our interest expense by approximately R$11.3 million in 2011 (R$14.2 million or US$8 million in fiscal year 2010).

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Foreign Currency Exchange Rate Risk

A significant part of our revenues in the Sugar and Ethanol segment are denominated in US dollars. To manage exchange rate risk, we have debt denominated in US dollars and we also enter into derivative contracts with various counterparties to protect ourselves against a possible appreciation of the real in relation to the US dollar. At March 31, 2011, we had outstanding currency derivatives fair valued at R$ 9.8 million (R$ 52.8 or US$29.6 million in fiscal year 2010) which were represented by forward, future, swap and put option contracts as disclosed in Note 26 of our consolidated financial statements attached hereto. As a measure of our market risk with respect to our foreign currency exposure, a hypothetical 10% appreciation of the real against the US dollar would increase our export sales by approximately R$ 454.5 million per year, based on the level of our total export sales for the year ended March 31, 2011, before considering the effects on US dollar derivative contracts and other assets/ liabilities dollar denominated, as set forth below:

	Notional amount/ Quantity			Estimated Fair value Asset (Liability)			Foreign Exchange Gain/ Loss – 10% FX rate Increase
US dollar financial instruments outstanding as at March 31, 2011:	(in millions of R$)
Denominated debt	R$	3,750,783		R$	3,750,783		R$	375,078
Denominated derivative financial instruments (net)	R$	580,395		R$	9,783		R$	79.451
- Future sale commitments	R$	(114,204	)	R$	(117	)	R$	(117	)
- Future purchase commitments	R$	(246,970	)	R$	(13,033	)	R$	(31,484	)
- Forward sale commitments	R$	941,570		R$	22,932		R$	111,052
Net potential impact							R$	454,529

Item 12. Description of Securities other than Equity Securities

Not applicable.

PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies

None.

Item 14. Material Modifications to the Rights of Security Holders

None.

Item 15. Controls And Procedures

(a) Disclosure Controls and Procedures

As of March 31, 2011, under management’s supervision and with its participation, including our Chief Executive Officer and Chief Financial Officer, we performed an evaluation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2011 to ensure that information required to be disclosed under the Exchange Act is recorded, authorized, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and the information required to be disclosed is accumulated and communicated, in order to allow timely decisions regarding required disclosure.

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(b) Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Securities Act of 1934. Management conducted an assessment of the effectiveness of internal control over financial reporting based on recommendations and correlated layers established on Internal Controls Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment and those criteria, management concluded that internal control over financial reporting was effective as of March 31, 2011.

Management’s report on internal control over financial reporting appears on page F-1. The consolidated financial statements and internal control over financial reporting have been audited by Ernst & Young Terco Auditores Independentes S.S., or “Ernst & Young”, an independent registered public accounting firm.

(c) Attestation Report of the Registered Public Accounting Firm

See Report Of Independent Registered Public Accounting Firm on page F-2.

(d) Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the period covered by this annual report that has materially affected, or is reasonably likely to materially or significantly affect, our internal control over financial reporting.

Item 16A. Audit Committee Financial Expert

Audit Committee

We have an audit committee responsible for advising the board about the selection of independent auditors, reviewing the scope of the audit, validating other allowed services provided by our independent auditors, approving related party transactions, and evaluating our internal controls on a steady basis. The members of our audit committee are Messrs. Marcus Vinicius Pratini de Moraes (chairman), Mailson Ferreira da Nóbrega, and Hélio França Filho.

These members are independent, and our board of directors has determined that both Marcus Vinicius Pratini de Moraes and Mailson Ferreira da Nóbrega are “Audit Committee Financial Experts” in accordance with SEC rules and regulations.

Item 16B. Code of Business Conduct and Ethics

NYSE Rule 303A.10 provides that each U.S. listed company must adopt and disclose a code of business conduct and ethics for directors, officers and employees and promptly disclose any waivers of the code for directors or executive officers. Although not required under Bermuda law, the Company has adopted a code of business conduct and ethics for directors, officers and employees as provided for in NYSE Rule 303A.10, which has been filed with the SEC.

Item 16C. Principal Accountant Fees and Services

The following table describes the total amount billed to us by Ernst & Young for services performed in fiscal year 2011 and fiscal year ended March 31, 2010.

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	At March 31,
	2011		2010
	(in thousands of reais)
Audit fees	R$	4,753	R$	4,869
Audit related fees		1,352		904
All other fees		120		100
Total consolidated audit fees	R$	6,225	R$	5,873

Audit Fees

Audit fees are fees billed for the audit of our annual consolidated financial statements and for the reviews of our quarterly consolidated financial statements submitted on Form 6-K.

Audit-Related Fees

Audit-related fees are fees charged by Ernst & Young for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements for fiscal year 2011and fiscal year 2010 Additionally, audit related fees include comfort letters, statutory audits, consents and other services related to SEC matters.

All Other Fees

Ernst & Young other fees refer to other assurance services regarding the review of the sustainability report.

Pre-Approval Policies and Procedures

Our audit committee approves all audit, audit-related services, tax services and other services provided by Ernst & Young. Any services provided by Ernst & Young that are not specifically included within the scope of the audit must be pre-approved by the board of directors in advance of any engagement. The board of directors is permitted to approve certain fees for audit-related services, tax services and other services pursuant to a de minimis exception prior to the completion of the audit engagement.

Item 16D. Exemptions from the Listing Standards for Audit Committees

Not applicable.

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

Item 16F. Change in Registrant’s Certifying Accountant

None.

Item 16G. Corporate Governance

For a comparison of the significant differences between our corporate governance practices and the NYSE Corporate Governance Standards, please see “Item 6. Directors, Senior Management and Employees—C. Summary of Significant Differences of Corporate Governance Practices”.

PART III

Item 17. Financial Statements

We have responded to Item 18 in lieu of responding to this Item.

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Item 18. Financial Statements

See our audited consolidated financial statements beginning on page F-1.

Item 19. Exhibits

We are filing the following documents as part of this annual report on Form 20-F:

1.1 Memorandum of Association (incorporated by reference to our amended registration statement filed on Form F-1/A with the Securities and Exchange Commission on August 9, 2007)

1.2 By-Laws (incorporated by reference to our amended registration statement filed on Form F-1/A with the Securities and Exchange Commission on August 9, 2007)

2.1 Indenture dated as of October 25, 2004 among Cosan S.A. Indústria e Comércio, as issuer, FBA—Franco Brasileira S.A. Açúcar e Álcool and Usina Da Barra S.A.—Açúcar e Álcool, as guarantors, JPMorgan Chase Bank, as trustee, JPMorgan Trust Bank Ltd., as principal paying agent and J.P. Morgan Bank Luxembourg S.A., as Luxembourg paying agent (incorporated by reference to our registration statement filed on Form F-1 with the Securities and Exchange Commission on June 25, 2007)

2.2 Indenture dated as of February 6, 2006 among Cosan S.A. Indústria e Comércio, as issuer, FBA—Franco Brasileira S.A. Açúcar e Álcool and Usina Da Barra S.A.—Açúcar e Álcool, as guarantors, JPMorgan Chase Bank, N.A., as trustee, JPMorgan Trust Bank Ltd., as principal paying agent and J.P. Morgan Bank Luxembourg S.A., as Luxembourg paying agent (incorporated by reference to our registration statement filed on Form F-1 with the Securities and Exchange Commission on June 25, 2007)

2.3 Indenture dated as of January 26, 2007 among Cosan Finance Limited, as issuer, Cosan S.A. Indústria e Comércio and Usina Da Barra S.A.—Açúcar e Álcool, as guarantors, The Bank of New York, as trustee, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as principal paying agent and The Bank of New York Luxembourg S.A., as Luxembourg paying agent (incorporated by reference to our registration statement filed on Form F-1 with the Securities and Exchange Commission on June 25, 2007)

2.4 Indenture dated August 11, 2009 among CCL Finance Limited, Cosan Combustíveis e Lubrificantes S.A., The Bank Of New York Mellon, as Trustee, The Bank of New York Mellon Trust (Japan), Ltd., as Principal Paying Agent, and the Bank of New York Mellon (Luxembourg) S.A., as Luxembourg Listing, Paying and Transfer Agent (incorporated by reference to Exhibit 2.4 of our Annual Report on Form 20-F for the year ended March 31, 2009)

2.5 Indenture dated November 5, 2010 among Cosan Overseas Limited, Cosan S.A. Indústria e Comércio, The Bank of New York Mellon, as Trustee, New York Paying Agent, Transfer Agent and Registrar, The Bank of New York Mellon (London Branch), as London Paying Agent and The Bank of New York Mellon (Luxembourg) S.A., as Paying Agent and Transfer Agent.

4.1 Loan Agreement dated as of June 28, 2005 among Cosan S.A. Indústria e Comércio, as borrower, and International Finance Corporation (incorporated by reference to our registration statement filed on Form F-1 with the Securities and Exchange Commission on June 25, 2007)

4.2 Agreement for the Sale and Purchase of all of the Member Interests in Parent Co-Operative 1 and Parent Co-Operative 2 dated April 23, 2008, between ExxonMobil International Holdings B.V., as vendor, and the registrant’s subsidiaries Cosan S.A. Indústria e Comércio and Usina da Barra S.A. Açúcar e Álcool, as purchasers* (incorporated by reference to our Amendment to our Current Report filed on Form 6-K/A on June 10, 2009)

4.3 Framework Agreement dated August 25, 2010 among Cosan S.A. Indústria e Comércio, Cosan Distribuidora de Cumbustíveis S.A., Cosan Limited, Houches Holdings S.A., Shell Brasil Limitada, Shell Brazil Holding B.V., Shell Overseas Holdings Limited and Milimétrica Participações S.A. (“Framework Agreement”) (incorporated by reference to Exhibit 4.3 of our Annual Report on Form 20-F for the year ended March 31, 2010)

4.4 First Amendment to the Framework Agreement, dated as of April 7, 2011.

117

4.5 Second Amendment to the Framework Agreement, dated as of June 1, 2011.

4.6 Joint Venture Agreement among Cosan S.A. Indústria e Comércio, Cosan Limited, Raízen Combustíveis S.A., Raízen S.A., Shell Brazil Holding B.V., Shell Overseas Holdings Limited and Raízen Energia Participações S.A. dated June 1, 2011.

4.7 Operating and Coordination Agreement dated June 1, 2011 relating to Raízen Energia Participações S.A., Raízen Combustíveis S.A and Raízen S.A.

4.8 Shareholders Agreement of Raizen Combustiveis S.A., dated as of June 1, 2011.

4.9 Shareholders Agreement of Raizen Energia Participacoes S.A., dated as of June 1, 2011.

8.1 Subsidiaries of the Registrant.

11.1 Code of Ethics (incorporated by reference from our exhibit to our annual report filed on Form 20-F for the Fiscal Year ended April 30, 2008).

12.1 Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer

12.2 Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002 of the Chief Financial Officer

13.1 Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, of the Chief Executive Officer

13.2 Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, of the Chief Financial Officer

* Portions of this item have been omitted pursuant to a request for confidential treatment.

118

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

COSAN LIMITED
By:	/s/ Marcelo Eduardo Martins
	Name:	Marcelo Eduardo Martins
	Title:	Chief Financial and Investor Relations Officer

Date:         September 30, 2011

Consolidated Financial Statements

Cosan Limited

March 31, 2011 and 2010

COSAN LIMITED

Consolidated Financial Statements

March 31, 2011 and 2010

Table of Contents

Management’s Annual Report on Internal Control over Financial Reporting	F-1
Report of independent auditors	F-2
Consolidated statements of financial position	F-4
Consolidated income statements	F-6
Consolidated statements of changes in equity	F-7
Consolidated statements of comprehensive income	F-8
Consolidated statements of cash flows	F-9
Notes to the consolidated financial statements	F-11

Management’s Annual Report on Internal Control over Financial Reporting

The management of Cosan Limited is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.

The Company’s internal control over financial reporting is a process designed 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. The company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with .authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

As disclosed in note 11 of its consolidated financial statements, the Company acquired Cosan Araraquara Açúcar e Álcool Ltda and Logispot Armazéns Gerais S.A. As provided under the Sarbanes-Oxley Act of 2002 and the applicable rules and regulations of the Securities and Exchange Commission, management has elected to exclude Cosan Araraquara Açúcar e Álcool Ltda and Logispot Armazéns Gerais S.A. from this evaluation, which are included in the 2011 consolidated financial statements of Cosan Limited and constituted combined amounts of R$637,853 and R$85,973 of total and net assets, respectively, as of March 31, 2011 and R$7,239 of revenues and R$4,576 of net loss for the year then ended.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions.

Management assessed the effectiveness of the company's internal control over financial reporting as of March 31, 2011 , based on the criteria set forth by the COSO - Committee of Sponsoring Organization of the Treadway Commission in Internal Control - Integrated Framework. Based on that assessment management has concluded that as of March 31, 2011, the Company's internal control over financial reporting is effective.

Management's assessment of the effectiveness of the company's internal control over financial reporting as of March 31, 2011 has been audited by Ernst & Young Terco Auditores Independentes S.S., the company's independent registered public accounting firm, as stated in their report which appears herein.

/s/ Rubens Ometto Silveira Mello

Rubens Ometto Silveira Mello

Chief Executive Officer

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

Cosan Limited

We have audited Cosan Limited’s internal control over financial reporting as of March 31, 2011, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Cosan Limited’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Cosan Araraquara Açúcar e Álcool Ltda and Logispot Armazéns Gerais S.A., which are included in the 2011 consolidated financial statements of Cosan Limited and constituted combined amounts of R$637,853 and R$85,973 of total and net assets, respectively, as of March 31, 2011 and R$7,239 of revenues and R$4,576 of net loss for the year then ended. Our audit of internal control over financial reporting of Cosan Limited also did not include an evaluation of the internal control over financial reporting of Cosan Araraquara Açúcar e Álcool Ltda and Logispot Armazéns Gerais S.A..

In our opinion, Cosan Limited maintained, in all material respects, effective internal control over financial reporting as of March 31, 2011, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statements of financial position of Cosan Limited as of March 31, 2011 and 2010 and April 1, 2009, and the related consolidated statements of income, equity, and cash flows for each of the two years in the period ended March 31, 2011 and our report dated June 6, 2011 expressed an unqualified opinion thereon.

/s/ Luiz Carlos Nannini

Partner

ERNST & YOUNG TERCO

Auditores Independentes S.S.

São Paulo – SP, Brazil

June 6, 2011

F-2

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

Cosan Limited

We have audited the accompanying consolidated statements of financial position of Cosan Limited and subsidiaries as of March 31, 2011 and 2010 and April 1, 2009, and the related consolidated statements of income, comprehensive income, equity and cash flows for each of the two years in the period ended March 31, 2011. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Cosan Limited and subsidiaries as of March 31, 2011 and 2010 and April 1, 2009 and the consolidated results of their operations and their cash flows for each of the two years in the period ended March 31, 2011, in conformity with International Financial Reporting Standards – IFRS, as issued by International Accounting Standards Board – IASB.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Cosan Limited's internal control over financial reporting as of March 31, 2011, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated June 6, 2011, expressed an unqualified opinion thereon.

/s/ Luiz Carlos Nannini

Partner

ERNST & YOUNG TERCO

Auditores Independentes S.S.

São Paulo – SP, Brazil

June 6, 2011

F-3

COSAN LIMITED

Consolidated statements of financial position

March 31, 2011, 2010 and April 1, 2009

(In Thousands of Reais)

	Note		March 31, 2011		March 31, 2010		April 1,  2009
Assets
Current
Cash and cash equivalents		4		1,271,780		1,110,766		1,177,936
Restricted cash		5		187,944		44,972		11,757
Accounts receivable		7		594,857		766,415		599,163
Derivatives		26		55,682		230,561		17,022
Inventories		8		670,331		612,683		719,656
Advances to suppliers				229,325		201,573		206,032
Related parties		10		14,669		27,246		57,232
Recoverable taxes		9		374,991		327,864		265,417
Other current assets				81,023		76,672		69,508
				3,480,602		3,398,752		3,123,723
Non-current
Deferred income taxes		18		715,333		686,139		809,218
Advances to suppliers				46,037		63,741		48,035
Related parties		10		91,954		81,411		-
Recoverable taxes		9		55,066		45,018		21,374
Judicial deposits				218,371		167,562		171,266
Other financial assets		6		420,417		355,370		303,467
Other non-current assets				449,282		455,293		402,987
Equity method investments		12		304,142		260,814		323,077
Biological assets		13		1,561,132		963,244		754,231
Property, plant and equipment		14		7,980,524		6,114,531		3,923,623
Intangible assets		15		3,889,575		3,825,367		2,909,856
				15,731,835		13,018,490		9,667,134
Total assets				19,212,437		16,417,242		12,790,857

F-4

	Note		March 31,  2011		March 31, 2010		April 1,  2009
Liabilities
Current
Current portion of long-term debt		16		957,134		839,529		1,452,297
Derivatives		26		132,289		76,703		66,895
Trade accounts payable				558,766		569,399		456,116
Salaries payable				183,560		141,584		93,156
Taxes payable		17		245,284		215,862		168,596
Dividends payable				72,229		43,982		-
Related parties		10		41,163		16,105		4,458
Other current liabilities				190,381		183,034		85,570
				2,380,806		2,086,198		2,327,088
Non-current
Long-term debt		16		6,274,895		5,136,529		3,232,736
Taxes payable		17		639,071		592,854		328,760
Legal proceedings		19		666,282		611,983		1,277,165
Related parties		10		4,444		-		711
Pension		27		24,380		-		65,108
Deferred income taxes		18		1,510,965		1,122,408		528,969
Other non-current liabilities				382,897		375,344		362,393
				9,502,934		7,839,118		5,795,842
Equity
Common stock		21		5,328		5,328		5,328
Capital reserve				3,668,218		3,654,446		3,661,040
Accumulated earnings (losses)				887,336		535,724		(170,370	)
Equity attributable to owners of the Company				4,560,882		4,195,498		3,495,998
Equity attributable to non-controlling interests				2,767,815		2,296,428		1,171,929
Total equity				7,328,697		6,491,926		4,667,927
Total liabilities and equity				19,212,437		16,417,242		12,790,857

See accompanying notes to consolidated financial statements.

F-5

COSAN LIMITED

Consolidated income statements

Years ended March 31, 2011 and 2010

(In thousands of Reais, except otherwise stated)

	Note		2011			2010
Net sales		22		18,063,480			15,336,055
Cost of goods sold		23		(15,150,079	)		(13,271,331	)
Gross profit				2,913,401			2,064,724
Operational income /(expenses)
Selling		23		(1,026,000	)		(862,726	)
General and administrative		23		(545,450	)		(501,676	)
Other, net		25		(33,828	)		37,523
Gain on tax recovery program		17		-			270,333
				(1,605,278	)		(1,056,546	)
Income before financial results, equity income of associates  and income taxes				1,308,123			1,008,178
Equity income of associates		12		25,187			4,178
Financial results, net		24		(151,146	)		493,441
				(125,960	)		497,619
Income before income taxes				1,182,164			1,505,797
Income Taxes
Current		18		(85,437	)		(78,381	)
Deferred		18		(329,071	)		(344,923	)
Net income for the year				767,656			1,082,493
Net income attributable to non-controlling interests				(296,750	)		(376,399	)
Net income attributable to Cosan				470,906			706,094
Earnings per share (in Reais)		21
Basic and diluted			$	R1.74		$	R2.61

See accompanying notes to consolidated financial statements.

F-6

COSAN LIMITED

Consolidated statements of changes in equity

Years ended March 31, 2011 and 2010

(In Thousands of Reais)

			Capital reserve
	Common stock		Additional paid-in capital			Other components of equity			Accumulated earnings (losses)			Total			Non-controlling interests			Total ´ equity
April 1, 2009		5,328		3,723,728			(62,688	)		(170,370	)		3,495,998			1,171,929			4,667,927
Acquisition of Teaçu		-		100,143			-			-			100,143			207,368			307,511
Issuance of subsidiary shares to non-controlling interest		-		78,407			-			-			78,407			423,859			502,266
Acquisition of non-controlling interest subsidiary		-		(34,957	)		-			-			(34,957	)		(22,633	)		(57,590	)
Exercise of stock option		-		(4,450	)		(20	)		-			(4,470	)		10,472			6,002
Exercise of common stock warrants		-		(43,641	)		309			-			(43,332	)		138,416			95,084
Acquisition of TEAS		-		-			-			-			-			15,873			15,873
Cumulative translation adjustment  - CTA		-		-			(133,575	)		-			(133,575	)		(1,111	)		(134,686	)
Pension		-		-			25,739			-			25,739			16,317			42,056
Share based compensation		-		5,451			-			-			5,451			3,520			8,971
Net income		-		-			-			706,094			706,094			376,399			1,082,493
Dividends		-		-			-			-			-			(43,981	)		(43,981	)
March 31, 2010		5,328		3,824,681			(170,235	)		535,724			4,195,498			2,296,428			6,491,926
Exercise of stock option		-		(1,018	)		(44	)		-			(1,062	)		6,409			5,347
Treasury shares		-		(9,465	)		-			-			(9,465	)		(5,754	)		(15,219	)
Issuance of common stock by  Rumo to non-controlling shareholders´		-		128,363			-			-			128,363			271,637			400,000
Acquisition of Logispot		-		-						-			-			64,277			64,277
Hedge accounting		-		-			(89,117	)		-			(89,117	)		(54,181	)		(143,298	)
Cumulative Translation Adjustment - CTA		-		-			(4,180	)		-			(4,180	)		131			(4,049	)
Pension		-		-			(12,087	)		-			(12,087	)		(7,349	)		(19,436	)
Adjustment from impact recorded directly in equity of subsidiary		-		(522	)		-			-			(522	)		(821	)		(1,343	)
Share based compensation		-		1,842			-			-			1,842			1,119			2,961
Net income		-		-			-			470,906			470,906			296,750			767,656
Dividends		-		-			-			(119,294	)		(119,294	)		(100,831	)		(220,125	)
Balance at  March 31, 2011		5,328		3,943,881			(275,663	)		887,336			4,560,882			2,767,815			7,328,697

See accompanying notes to consolidated financial statements.

F-7

COSAN LIMITED

Consolidated statements of comprehensive income

Years ended March 31, 2011 and 2010

(In Thousands of Reais)

	2011			2010
Net income of the period		767,656			1,082,493
Other Comprehensive Income (loss):
Exchange differences on translation of foreign operations - CTA		(4,049	)		(134,685	)
Net movement on cash flow hedges		(217,117	)		-
Actuarial gains and losses on defined benefit plans		(29,447	)		63,721
Income tax effects		83,830			(21,665	)
Other comprehensive Income for the year, net of tax		(166,783	)		(92,629	)
Total comprehensive Income for the year, net of tax		600,873			989,864
Attributable to:
Owners of the Company		365,521			598,258
Non-controlling interests		235,351			391,606

See accompanying notes to consolidated financial statements.

F-8

COSAN LIMITED

Consolidated statements of cash flows

Years ended March 31, 2011 and 2010

(In Thousands of Reais)

	2011			2010
Operating activities
Net Income		470,906			706,094
Non-cash adjustments to reconcile profit before tax to net cash flows from operating activities:
Depreciation and amortization		742,307			644,635
Biological assets		234,799			438,454
Equity income		(25,187	)		(4,178	)
Gain on disposal of property, plant and equipment		(35,295	)		(80,466	)
Goodwill write off aviation business		-			41,066
Deferred income taxes		329,071			344,923
Provision for legal proceedings		26,859			25,829
Non-controlling interests		296,750			376,399
Share based compensation expenses		2,961			8,971
Gain on tax recovery program		-			(270,333	)
Interest, monetary variations and foreign exchange variation, net		238,482			(185,280	)
Other		4,584			(26,858	)
		2,286,237			2,019,256
Change in assets/ liabilities
Accounts receivable		164,693			2,415
Restricted cash		(142,972	)		(33,215	)
Inventories		84,581			413,437
Taxes recoverable		(50,068	)		(36,572	)
Advances to suppliers		16,779			66,542
Suppliers		(32,361	)		(46,515	)
Salaries payable		36,224			30,565
Derivatives		13,347			(231,043	)
Other assets/ liabilities, net		(49,219	)		(9,043	)
Net cash flows from operating activities		2,327,241			2,209,009
Investing activities
Acquisitions, net of cash acquired		(157,345	)		(16,041	)
Purchase of property, plant and equipment		(2,291,647	)		(1,897,965	)
Sugarcane planting and growing costs		(745,572	)		(647,467	)
Proceeds from sale of the aviation business		-			115,601
Proceeds from sale of other investments and property, plant and equipment		48,832			10,613
Net cash flows used in investing activities		(3,145,732	)		(2,435,259	)

F-9

COSAN LIMITED

Consolidated statements of cash flows (Continued)

Years ended March 31, 2011 and 2010

(In Thousands of Reais)

	2011			2010
Financing activities
Proceeds from long-term debt		2,719,522			3,471,462
Repayment of long-term debt		(1,971,579	)		(3,148,837	)
Capital increase		3,996			147,697
Cash proceeds from non-controlling interests		400,000			-
Share buy-back program (treasury shares)		(15,219	)		-
Dividends paid		(193,095	)		-
Cash from/ to related parties		37,072			(152,442	)
Net cash flows from financing activities		980,697			317,880
Translation adjustments		(1,192	)		(125,618	)
Net increase in cash and cash equivalents		161,014			(67,170	)
Cash and cash equivalents at the beginning of the year		1,110,766			1,177,936
Cash and cash equivalents at the end of the year		1,271,780			1,110,766
Supplemental disclosure of cash flow information:
Income taxes paid		(38,844	)		(62,337	)
Financial interest expenses paid		(450,051	)		(388,854	)
Issuance of shares for acquisition of Curupay		-			624,192
Issuance of subsidiary shares (Rumo) for acquisition of Teaçu		-			261,777

See accompanying notes to the consolidated financial statements.

F-10

COSAN LIMITED

Notes to the consolidated financial statements

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

1. Operations

Cosan Limited (“Cosan” and “the Company”) was incorporated in Bermuda on April 30, 2007. Its shares are traded on the New York Stock Exchange (NYSE – CZZ) and in the São Paulo Stock Exchange (Bovespa – CZLT11).  Mr. Rubens Ometto Silveira Mello is the ultimate controlling shareholder of the Company. Cosan Limited controls Cosan S.A. Indústria e Comércio and its subsidiaries (“Cosan S.A.”) with a 62.2% interest.

Cosan S.A.’s primary activities are in the following business segments (i) Sugar & Ethanol: the production of sugar and ethanol, as well as the energy cogeneration produced from sugar cane bagasse, (ii) Fuel Distribution and Lubricants: the marketing and distribution of fuel and lubricants, and the production of lubricants in Brazil, and (iii) Rumo: logistics services including transportation, port lifting and storage of sugar.

On February 1, 2010, the Company announced that it, along with Royal Dutch Shell (“Shell”), had reached a non-binding memorandum of understanding (“MOU”) to form a joint venture for a combined 50/50 investment. On August 25, 2010 the Company announced the conclusion of the negotiations with Shell and signed a binding MOU along with other arrangements. Cosan will contribute its sugar and ethanol and its distribution assets to the joint venture while Shell will contribute its distribution assets in Brazil and its interests on second generation ethanol research and development entities (Iogen and Codexis). Shell will also make a fixed cash contribution in the amount of approximately $1.6 billion over a two year period. The sugar logistics and lubricants distribution business along with the investment in Radar Propriedades Agrícolas S.A. will not be contributed to the joint venture. On January 4, 2011, the Company received unconditional merger clearance from the European Union to form the proposed Joint Venture in Brazil. On June 1, 2011, the Company signed the closing agreement to form the joint venture, named Raízen. During the year ended March 31, 2011, the joint venture did not impact Cosan´s financial statements except for the incurrance of costs and expenses related to its future formation.

2. Summary of significant accounting policies

2.1 Basis of preparation

a) Statement of compliance

The consolidated financial statements of Company have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

F-11

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

These financial statements for the year ended March 31, 2011 are the first Company has prepared in accordance with IFRS. Refer to Note 3 for information on how the Company adopted IFRS.

These consolidated financial statements were authorized for issue by the Audit Committee on June 6, 2011.

b) Basis of preparation

The consolidated financial statements have been prepared on a historical cost basis, except for derivative financial instruments and biological assets that have been measured at fair value.

c) Functional and presentation currency

The consolidated financial statements are presented in Brazilian reais. However, the functional currency of Cosan is the U.S. dollar. The Brazilian real is the currency of the primary economic environment in which Cosan S.A. and its subsidiaries, located in Brazil, operate and generate and expend cash and is the functional currency, except for the foreign subsidiaries in which U.S. dollar is the functional currency.

The financial statements of each subsidiary included in the consolidation and equity method investments are prepared based on the functional currency of each company. Cosan, certain subsidiaries and equity method investments with a functional currency other than Brazilian reais, had their assets and liabilities converted into Brazilian reais at the exchange rate as of year end and their revenues and expenses were converted by applying the average monthly rates.

The exchange rate of the Brazilian real (R$) to the U.S. dollar (US$) was R$1.6287=US$1.00 at March 31, 2011, R$1.7810=US$1.00 at March 31, 2010, and R$2.3152=US$1.00 at March 31, 2009.

d) Significant accounting judgments, estimates and assumptions

The preparation of the Company’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the end of the reporting period. Such estimates and assumptions are reviewed on a continuous basis and changes are recognized in the period in which the estimates are revised and in any future periods affected.

F-12

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

A significant change in the facts and circumstances on which judgments, estimates and assumptions are based, may cause a material impact on the results and financial condition of the Company. The significant judgments, estimates and assumptions are as follows:

Deferred income taxes and social contribution

Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. For further detail on deferred income taxes see Note 18.

Biological assets

Biological assets are measured at fair value at each reporting date and the effects of changes in fair value between the periods are allocated directly to cost of goods sold. For further detail on the assumptions used see Note 13.

Intangible assets and property, plant and equipment (“P, P&E”)

The calculation of depreciation and amortization of intangible assets and P, P&E includes the estimation of the useful lives. Also, the determination of the acquisition date fair value of intangible assets and P,P&E acquired in business combinations is a significant estimate.

The Company annually performs a review of impairment indicators for intangible assets and P,P&E. Also, an impairment test is undertaken for goodwill. An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The key assumptions used to determine the recoverable amount for the different cash generating units for which goodwill is allocated are further explained in Note 15.

F-13

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Share based payments

Cosan S.A. measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The estimation of fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the assumption of the expected life of the share option, volatility and dividend yield. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 29.

Pension benefits

The cost of defined benefit pension plans and other post employment medical benefits and the present value of the pension obligation is determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual results in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. A defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about the assumptions used are included in Note 27.

Fair value measurement of contingent consideration

Contingent consideration, resulting from business combinations, is valued at fair value at the acquisition date. Further details about the assumptions used in accounting for business combinations are included in Note 19.

Fair value of financial instruments

When the fair value of financial assets and liabilities recorded in the statement of financial position cannot be derived from active markets, their fair value is determined using valuation techniques including the discounted cash flow model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. The judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. For further details on financial instruments refer to Note 26.

F-14

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

2.2 Basis of consolidation

The following subsidiaries were included in the consolidated financial statements for the years ended March 31, 2011 and 2010:

	Ownership % direct and indirect
	2011	2010
Cosan S.A. Indústria e Comércio	62.2%	62.3%
Administração de Participações Aguassanta Ltda.	56.9%	57.0%
Cosan S.A Açúcar e Álcool	61.9%	62.0%
Águas da Ponte Alta S.A.	56.9%	62.0%
Vale da Ponte Alta S.A.	56.9%	62.0%
Agrícola Ponte Alta S.A.	61.9%	62.0%
Cosan Centroeste S.A. Açúcar e Álcool	61.9%	62.0%
Barra Bioenergia S.A.	61.9%	62.0%
Benálcool Açúcar e Álcool  S.A.	61.9%	62.0%
DaBarra Alimentos S.A.	-	62.0%
Docelar Alimentos Bebidas S.A. (former Bonfim Nova Tamoio – BNT Agrícola Ltda.)	62.1%	62.0%
Barrapar Participações Ltda.	61.9%	62.0%
Aliança Indústria e Comercio de açúcar e Álcool S.A.	61.9%	62.0%
Agrobio Investimentos e Participações S.A.	61.9%	62.0%
Bioinvestments Negócios e Participações S.A.	56.9%	62.0%
Executive Participações S.A.	61.9%	-
Proud Participações S.A.	62.1%	62.2%
Cosan Distribuidora de Combustíveis Ltda.	62.1%	62.2%
Cosan S.A. Bioenergia	62.2%	62.3%
Cosan Energia S.A.	62.2%	62.3%
Cosan Biotecnologia S.A.	62.1%	62.2%
Cosan International Universal Corporation	62.2%	62.3%
Cosan Finance Limited	62.2%	62.3%
CCL Finance Limited	62.2%	62.3%
Cosan Overseas Limited	62.2%	-
Cosan Cayman Limited	62.2%	-
Cosan Cayman Finance Limited	62.2%	-
CCL Cayman Finance Limited	62.2%	-
Grançucar S.A. Refinadora de Açúcar	-	62.3%
Cosan Combustíveis e Lubrificantes S.A.	62.2%	62.3%
Copsapar Participações S.A.	56.0%	56.0%
Novo Rumo Logística S.A.	57.8%	57.8%
Rumo Logística S.A.	43.3%	57.8%
Cosan Operadora Portuária S.A.	43.3%	57.8%
Teaçú Armazéns Gerais S.A.	43.3%	57.8%
Pasadena Empreendimentos e Participações S.A.	62.2%	62.2%
Teas Terminal Exportador de Álcool de Santos S.A.	41.5%	41.5%
Cosan Alimentos S.A. e empresas controladas	62.2%	62.2%
Cosan Araraquara Açúcar e Álcool Ltda. (former Usina Zanin Açúcar e Álcool Ltda.)	62.2%	-
Logispot Armazéns Gerais S.A.	31.7%	8.9%

F-15

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Subsidiaries are fully consolidated from the date of acquisition, the date on which the Company obtains control, and continue to be consolidated until the Company ceases to have control of the subsidiary. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group balances, transactions, unrealized gains and losses resulting from intra-group transactions and dividends are eliminated.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

2.3 Summary of significant accounting policies

The accounting policies set out below have been applied consistently to all years presented in these consolidated financial statements and have been applied consistently by the subsidiaries and preparing the opening balance sheet as at April 1, 2009, except where indicated otherwise.  The April 1, 2009 balance sheet was prepared to reflect the transition to IFRS.

a)     Revenue recognition

Revenues from the sale of products or goods are recognized when the entity transfers to the buyer the significant risks and rewards incidental to ownership of the goods and merchandise, and when it is probable that the economic benefits associated with the transaction will flow to the Company. The sales prices are fixed based on purchase orders or contracts.

b)     Foreign currency transactions

Transactions in foreign currencies are initially recorded at the functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

F-16

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

c)     Financial instruments – Recognition initial and subsequent measurement

(i) Financial assets

Initial recognition and measurement

Financial assets are classified into the following categories: at fair value through profit or loss, held-to-maturity, available for sale and loans and receivables. The Company determines the classification of its financial assets upon initial recognition.

F-17

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Financial assets are initially recognized at fair value, plus, in the case of investments not designated at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of financial assets.

Financial assets include cash and cash equivalents, restricted cash, accounts receivable, other receivables, marketable securities and derivative financial instruments.

Subsequent measurement

The subsequent measurement of financial assets depends on their classification, which can be as follows:

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and assets designated upon initial recognition at fair value through profit and loss. They are classified as held for trading if they were acquired with the purpose of selling or repurchasing in the short term. Derivatives are also measured at fair value through profit or loss, except those designated as hedging instruments. Interest, monetary and exchange variations and changes arising from the valuation at fair value are recognized in the income statement when incurred in the line of revenue or expense.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate method (EIR), less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs.  Amortization is included in finance income in the income statement. The losses arising from impairment are recognized in the income statement in finance costs.

Held-to-maturity

Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held-to maturity when the Company has the positive intention and ability to hold them to maturity. Interest, monetary, exchange rate, less impairment losses, if any, are recognized in income when incurred in the line of financial income/expense.

F-18

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Available-for-sale financial assets

Financial assets available for sale are those non-derivative financial assets that are not classified as (a) loans and receivables, (b) investments held to maturity or (c) financial assets at fair value through profit and loss.

Derecognition

A financial asset is derecognized when:

· The rights to receive cash flows from the asset have expired; and

· The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the cash flows received without material delay to a third party under a pass-through arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Impairment of financial assets

The Company assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.

(ii) Financial liabilities

Initial recognition and measurement

Financial liabilities are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge. The Company determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognized initially at fair value and in the case of loans and borrowings, carried at amortized cost.

The Company’s financial liabilities include payables to suppliers and other payables, loans and borrowings and derivative financial instruments.

F-19

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Subsequent measurement

The measurement of financial liabilities depends on their classification as follows:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition at fair value through profit or loss and derivatives, except those designated as hedging instruments. Interest, monetary and exchange variations and changes arising from the valuation at fair value, where applicable, are recognized in the income statement when incurred.

Loans and borrowings

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using the effective interest rate method. Gains and losses are recognized in the income statement when the liabilities are amortized or derecognized.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires.

F-20

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

(iii) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

(iv) Fair value of financial instruments

The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices or dealer price quotations, without any deduction for transaction costs.

The fair value of financial instruments for which there is no active market is determined using valuation techniques. These techniques can include using recent market transactions (interest free) reference to the current fair value of other similar instruments, analysis of discounted cash flows or other valuation models.

An analysis of fair values of financial instruments and further details as to how they are measured are provided in Note 26.

F-21

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

(v) Derivative financial instruments and hedge accounting

Initial recognition and subsequent measurement

The Company uses derivative financial instruments such as forward currency contracts, interest rate swaps and forward commodity contracts to hedge its foreign currency risks, interest rate risks and commodity price risks, respectively. Derivativesdesignatedinhedge transactionsare initiallyrecognized atfairvalueon thedate on whichthederivativeisacquired, andsubsequently alsorevaluedto fair value. Derivativesarepresentedasfinancial assetswhentheinstrument's fair valueispositiveandasliabilitieswhenfair valueis negative.

Any gains or losses arising from changes in the fair value of derivatives are taken directly to the income statement, except for the effective portion of cash flow hedges, which is recognized in other comprehensive income.

For the purpose of hedge accounting, hedges are classified as:

· Fair value hedges when hedging the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment;

· Cash flow hedges when hedging exposure to variability in cash flows that is either attributable to a particular risk associated with a recognized asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognized firm commitment; and

· Hedges of a net investment in a foreign operation.

At the inception of a hedge relationship, Cosan S.A. formally designates and documents the hedge relationship to which Cosan S.A. wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the entity will assess the effectiveness of changes in the hedging instrument’s fair value in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated.

Hedges are expected to be highly effective in offsetting changes in fair value or cash flows, being continually assessed to determine whether they were actually highly effective over all the base periods for which they were intended.

F-22

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Hedges which meet the strict criteria for hedge accounting are accounted for as follows:

Cash flow hedges

The effective portion of the gain or loss on the hedging instrument is recognized directly as other comprehensive income in the cash flow hedge reserve, while any ineffective portion is recognized immediately in the income statement in other operating expenses.

Amounts recognized as other comprehensive income are transferred to the income statement when the hedged transaction affects profit or loss, such as when the hedged financial income or financial expense is recognized or when a forecast sale occurs. Where the hedged item is the cost of a non-financial asset or non-financial liability, the amounts recognized as other comprehensive income are transferred to the initial carrying amount of the nonfinancial asset or liability.

If the forecast transaction or firm commitment is no longer expected to occur, the cumulative gain or loss previously recognized in equity is transferred to the income statement. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, any cumulative gain or loss previously recognized in other comprehensive income remains in other comprehensive income until the forecast transaction or firm commitment affects profit or loss.

Cosan S.A. uses forward currency contracts as hedges of its exposure to foreign currency risk in forecasted transactions and firm commitments, as well as forward commodity contracts for its exposure to volatility in the commodity prices. Refer to Note 26 for more details.

F-23

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Fair value hedge and hedges of a net investment

The Company does not hold derivative financial instruments designated in these types of operations.

d) Cash and cash equivalents and restricted cash

Cash and cash equivalents include cash, bank deposits and other short-term investments of immediate liquidity, redeemable within 90 days from date of issue, readily convertible into a known amount as cash and cash with insignificant risk of change in their market value.

The restricted cash relates mainly to deposits of margin requirements made with brokers who trade commodity derivative instruments linked to Cosan's derivatives instruments and financial transactions.

F-24

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

e) Accounts receivable

Accounts receivable are receivables from customers and are reduced to their probable realizable value by a provision.

f) Inventories

Inventories are recorded at average cost of acquisition or production, not to exceed the net realizable value. Provisions for slow-moving or obsolete inventories are recorded when deemed necessary by management.

g) Equity method investments

Entities over which the Company exercises significant influence are accounted for by the equity method. Based on the equity method, investments are recorded on the balance sheet at cost, plus the changes following the acquisition of shares and the Company’s share of equity income or loss of the associate.

The income statement reflects the share of operating results of associates associate based on the equity method. When a change is recognized directly in equity of the associate, the Company recognizes its share of the variations, where applicable, statement of changes in equity.

The financial statements of associates are prepared for the same period of presentation of the Company even if the fiscal year is not coincidental. Where necessary, adjustments are made to conform to the accounting practices of the Company.

After applying the equity method, the Company determines whether it is necessary to recognize additional loss of recoverable value on the Company's investment in its associate. The Company determines, at each year end, if there is objective evidence that investment in associate loss suffered by the impairment. If so, the Company calculates the amount of loss on the impairment as the difference between the recoverable value of the associate and the book value and the amount recognized in the income statement.

When there is loss of significant influence over the associate, the Company evaluates and recognizes the investment at fair value at that moment.

The unrealized gains and losses resulting from transactions between the Company and associates are eliminated in accordance with the participation held in the associate.

F-25

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

h) Biological assets

IAS 41 - Agriculture encompasses the accounting treatment of activities involving biological assets, which in the case of Cosan S.A., refers to the sugarcane plantations. Biological assets are recognized at fair value at each balance sheet date and the effects of changes in fair values between the periods are allocated to cost of goods sold. The sugarcane plantation is measured at fair value in accordance with the discounted cash flow method. The harvest of Cosan S.A. begins generally in April each year and ends in the months of November and December.

Cosan S.A.’s own land on which the biological asset is produced is accounted for in accordance with IAS 16 - Property, Plant and Equipment.

i) Property, plant and equipment (“P, P&E”)

Items of P, P&E are measured at historical cost of acquisition or construction, less accumulated depreciation and impairment when applicable.

Cost includes expenditures that are directly attributable to the acquisition of an asset. The cost of assets constructed by the entity includes the cost of materials and direct labor, other costs to put the asset in location and condition necessary for them to be able to operate in the manner intended by management, and borrowing costs on qualifying assets. Borrowing costs relating to funds raised for work in progress are capitalized until these projects are completed.

The Company carries out the planned major maintenance activities at its plants on an annual basis in order to inspect and replace components. This occurs between January and March. The principal costs include maintenance costs for labor, materials, third party services and overhead allocated during the inter harvest period.

The estimated cost of a component of a piece of equipment that must be replaced each year is recorded as a component of cost of the equipment and depreciated over the following season. Costs of normal periodic maintenance are recorded as expenses when incurred since the components will not improve the production capacity or introduce improvements to equipment.

F-26

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Depreciation is calculated on a straight line method based on useful life of each asset, following the annual depreciation rates shown below:

Buildings and improvements	4%
Containers	25%
Machinery and equipment	3% to 10%
Agricultural machinery	10%
Industrial equipment and facilities	10%
Furniture and fixtures	10%
Computer equipment	20%
Vehicles	10% to 20%
Locomotives	3.3%
Rail cars	2.9%
Boats and aircrafts	10%

j) Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date.

Finance leases which transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in the income statement. A leased asset is depreciated over the useful life of the asset.

Operating lease payments are recognized as an operating expense in the income statement on a straight-line basis over the lease term.

k) Intangibles

(i) Goodwill

Under Brazilian GAAP, goodwill arising from business combinations that occurred before March 31, 2009 was amortized on a straight line basis over a period of 5 to 10 years. After March 31, 2009 any remaining balances or new goodwill were no longer amortized and subject to impairment testing.

The goodwill considered for IFRS purposes was the ending balance as of March 31, 2009 (under Brazilian GAAP), except for the goodwill arising from the acquisition of Cosan CL, for which IFRS 3 was applied.

F-27

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Goodwill is maintained at its cost, less any impairment losses. Goodwill is tested annually for impairment. In order to perform impairment tests goodwill is compared to the recoverable amount of the related cash generating unit to which it was originally allocated.

(ii) Intangible assets with finite lives

Intangible assets with finite lives are amortized over their useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired.

l) Impairment

In accordance with IAS 36, the Company assesses annually whether there are indications of impairment in its long lived assets. If these indicators are identified, the Company estimates the recoverable amount of the assets. The recoverable amount of an asset or a group of assets is the greater of: (a) the fair value less estimated costs to sell it, and (b) its value in use. Value in use is the discounted cash flow (before taxes) from the continued use of the assets until the end of its useful life.

Regardless of the existence of indicators of loss of value, goodwill and intangible assets with indefinite useful lives are tested for impairment at least once a year.

When the book value of an asset exceeds its recoverable amount, the impairment loss is recognized as an operating expense in the income statement.

m) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur.

The Company capitalizes borrowing costs for all eligible assets where construction was commenced on or after April 1, 2009.

n) Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic

F-28

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

o) Pension and other employment benefits

i)     Defined benefit pension plan

The Company, through its indirect subsidiary Cosan Combustíveis e Lubrificantes S.A. ("Cosan CL") is the sponsor of a defined benefit pension plan for part of its employees. The cost of providing benefits under the defined benefit plan is determined annually by independent actuaries using the projected unit credit method.

Actuarial gains and losses for the defined benefit plan are recognized in full in the period in which they occur in other comprehensive income. Such actuarial gains and losses are also immediately recognized in equity and are not reclassified to profit or loss in subsequent periods.

ii)     Defined contribution pension plan

The Company, through its indirect subsidiary Cosan Alimentos S.A. ("Cosan Alimentos") sponsors a defined contribution plan, for all employees of that subsidiary. The Company does not have a legal or constructive obligation to pay further contributions if the fund does not have sufficient assets to pay all benefits owed.

iii)     Share-based payments

Employees (including senior executives) of Cosan S.A. receive regular compensation in the form of equity investments for services rendered (equity-settled transactions).

The cost of equity-settled transactions is recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled. Cosan S.A. uses the binomial model to estimate the fair value of the options at the date of the grant.

p)     Treasury shares

The Company´s equity instruments which are reacquired (treasury shares) are recognized at cost and deducted from equity. No gain or loss is recognized in the income statement on the purchase, sale, issue or cancellation of the Company’s own equity instruments.

F-29

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

q)     Taxes

i)     Income taxes

Income taxes are comprised of income tax and social contribution at a combined rate of 34%.

Deferred income tax assets are recognized for all deductible temporary differences and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and unused tax losses can be utilized.

Deferred income tax assets and liabilities are presented as non-current assets or liabilities and measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates that have been enacted at the reporting date.

ii)     Indirect taxes

Net revenues is recognized net of discounts and sales taxes (IPI, ICMS, PIS e COFINS).

r)     Business combinations

Business combinations are accounted for using the acquisition method, from December 1, 2008 (transition date of business combinations for IFRS purposes), and the assets and liabilities assumed are measured at fair value for purposes of goodwill calculation. Goodwill represents the excess of the acquisition cost in comparison the fair value of the acquired assets and liabilities. If there is an excess of the acquirer's interest in the fair value of assets and liabilities acquired over the cost, the difference is recognized immediately in the income statement.

s)     Asset retirement obligations

The retirement obligations of the subsidiary Cosan CL relate to the legally required obligation to remove underground fuel tanks upon retirement, the initial measurement of which is recognized as a liability discounted to present values and subsequently accreted through earnings. An asset retirement cost equal to the initial estimated liability is capitalized as part of the related asset’s carrying value and depreciated over the asset’s useful life.

F-30

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

t)     Environmental matters

Cosan’s production facilities and its plantation activities are both subject to environmental regulations. Cosan diminishes the risks associated with environmental matters, through operating procedures and controls and investments in pollution control equipment and systems. Cosan believes that no provision for losses related to environmental matters is currently required, based on existing Brazilian laws and regulations.

2.4 New IFRS and IFRIC Interpretations Committee (Financial Reporting Interpretations of IASB) applicable to the consolidated financial statements

New accounting pronouncements from the IASB and IFRIC interpretations have been published and / or reviewed and have the optional adoption in March 31, 2011. The Management assessed the impact of these new pronouncements and interpretations and does not anticipate that its adoption will lead to a significant impact on the annual information of the Company and its subsidiaries in the year of initial application, as follows:

• IAS 24 Related Party Disclosures (Amendment) It clarified the definition of a related party to simplify the identification of such relationships and to eliminate inconsistencies in its application. The revised standard introduces a partial exemption of disclosure requirements for government related entities. The amended standard is effective for annual periods beginning on or after 1 January 2011. Management is still evaluating the impact on its financial position or performance. Early adoption is permitted for either the partial exemption for government-related entities or for the entire standard.

• IFRS 9 Financial Instruments – Classification and measurement - It reflects the first phase of the IASBs work on the replacement of IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 uses a simplified approach to determine whether a financial asset is measured at amortized cost or fair value, based on the manner in which an entity manages its financial instruments (business model) and the typical contractual cash flow of financial assets. The standard also requires the adoption of only one method for determining losses in recoverable value of assets. The standard is effective for annual periods beginning on or after 1 January 2013. Management is still evaluating the impact on its financial position or performance in relation to IFRS 9.

F-31

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

• IFRS 10 Consolidated Financial Statements - IFRS 10 as issued establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. IFRS 10 replaces the consolidation requirements in SIC-12 Consolidation—Special Purpose Entities and IAS 27 Consolidated and Separate Financial Statements and is effective for annual periods beginning on or after January 1, 2013. Early application is permitted. Management is still evaluating the impact on its financial position or performance from the adoption of IFRS 10.

• IFRS 11 Joint Arrangements - IFRS 11 provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form. The standard addresses inconsistencies in the reporting of joint arrangements by requiring a single method to account for interests in jointly controlled entities. IFRS 13 supersedes IAS 31 Interests in Joint Ventures and SIC-13 Jointly Controlled Entities - Non-Monetary Contributionsby Ventures, and is effective for annual periods beginning on or after 1 January 2013.  Earlier application is permitted. Management is still evaluating the impact on its financial position or performance from the adoption of IFRS 11.

• IFRS 12 Disclosures of Interests in Other Entities - IFRS 12 is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities.  IFRS 12 is effective for annual periods beginning on or after 1 January 2013.  Earlier application is permitted. Management is still evaluating the impact on its financial position or performance from the adoption of IFRS 11.

• IFRS 13 Fair Value Measurement - IFRS 13 establishes new requirements on how to measure fair value and the related disclosures for IFRS and US generally accepted accounting principles. The standard is effective for annual periods beginning on or after 1 January 2013. Earlier application is permitted. Management is still evaluating the impact on its financial position or performance from the adoption of IFRS 13.

• IFRIC 14 Prepayments of a minimum funding requirement.  This standard applies only to those situations where an entity is subject to minimum funding requirements and anticipated contributions to cover these requirements. The standard allows the entity to account for the benefit of such prepayment as an asset. This standard is effective for fiscal years beginning from January 1, 2011. Management is still evaluating the impact on its financial position or performance from the adoption of IFRIC 14.

F-32

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

• IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments - IFRIC 19 is effective for annual periods beginning on or after 1 July 2010. The interpretation clarifies that equity instruments issued to a creditor to extinguish a financial liability qualify as consideration paid. The equity instruments issued are measured at their fair value. In case that this cannot be reliably measured, the instruments are measured at the fair value of the liability extinguished. Any gain or loss is recognized immediately in profit or loss. Management is still evaluating the impact on its financial position or performance from the adoption of IFRIC 19.

Improvements to IFRS– TheIASBstandardsforimprovementsandamendmentstoIFRSinMay2010andthe amendmentswill beeffectivefromJanuary 1, 2011:

·     IFRS 3 – Business combination.

·     IFRS 7 – Financial instrument: Disclosures.

·     IAS 1 – Presentation of Financial Statements

·     IAS 27 – Consolidated and Separate Financial Statements

·     IFRIC 13 – Customer Loyalty Programme

Management still evaluating the impact on its financial position or performance in relation to the 2010 improvements and amendments.

3. First-time adoption of IFRS

As mentioned in Note 2.1(a), these financial statements for the year ended March 31, 2011 are the first Company has prepared in accordance with IFRS.

Accordingly, the Company has prepared financial statements which comply with IFRS applicable for periods ending on March 31, 2011, together with the comparative period data as at and for the year ended March 31, 2010, as described in the accounting policies. In preparing these financial statements, the Company’s opening statement of financial position was prepared as of April 1, 2009, the Company’s date of transition to IFRS. This note explains the principal adjustments made by Company in restating its Brazilian GAAP statement of financial position as at April 1, 2009 and its previously published Brazilian GAAP financial statements as of and for the year ended March 31, 2010.

F-33

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

IFRS 1 First-Time Adoption of International Financial Reporting Standards allows first-time adopters certain exemptions from the retrospective application of certain IFRS. The Company has applied the following exemptions:

· Business combinations: the Company used the exemption of IFRS 1 and has applied IFRS 3 - Business combinations - for acquisitions from December 1, 2008, date of purchase of Cosan CL (formerly known as Esso Brasileira de Petroleo Ltda.) and elected not to remeasure and restate business combinations that occurred before that date.

· Deemed cost: the Company elected to measure its farming land at fair value at the date of transition to IFRS. The effects of the deemed cost increased fixed assets with a corresponding increase in equity, net of income tax effects (see Note 14). The Company elected not to remeasure the remaining fixed assets. Remaining cost basis differences between inflation indexed asset values under IFRS and Brazilian GAAP attributable to Brazil’s hyper-inflationary designation until 1997 are immaterial as of the IFRS transition date.

· Defined benefit pension plan: the Company elected to recognize all actuarial gains and losses against the retained earnings as at the date of transition to IFRS. See Note 27 for further details.

· Borrowing costs: The Company has applied the transitional provisions in IAS 23 Borrowing Costs and capitalizes borrowing costs on assets where construction was commenced on or after the date of transition.

· Cumulative currency translation differences: cumulative currency translation differences are deemed to be zero as at April 1, 2009.

Estimates

The estimates at April 1, 2009 and at March 31, 2010 are consistent with those made for the same dates in accordance with Brazilian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Brazilian GAAP did not require estimation:

·     Biological assets

·     Contingent consideration

·     Certain financial instruments

The estimates used by the Company to present these amounts in accordance with IFRS reflect conditions at April 1, 2009, the date of transition to IFRS and as of March 31, 2010.

F-34

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

In preparing its opening balance sheet under IFRS, the Company has reclassified and adjusted amounts previously presented under Brazilian GAAP. An explanation of the effects of the transition from Brazilian GAAP to IFRS is presented as follows:

3.1 Reconciliation of the statement of financial position

		April 1, 2009										March 31, 2010
	Note	BRGAAP		Reclassification			Adjustments to IFRS			IFRS		BRGAAP		Reclassification			Adjustments to IFRS			IFRS
Assets
Current
Cash and cash equivalents			1,177,936		-			-			1,177,936		1,110,766		-			-			1,110,766
Restricted cash			11,757		-			-			11,757		44,972		-			-			44,972
Accounts receivable			599,163		-			-			599,163		766,415		-			-			766,415
Derivatives			17,022		-			-			17,022		230,561		-			-			230,561
Inventories	a		1,106,185		(386,529	)		-			719,656		1,046,730		(434,047	)		-			612,683
Advances to suppliers			206,032		-			-			206,032		235,552		(33,979	)					201,573
Related parties			57,232		-			-			57,232		24,859		1,689			698			27,246
Deferred income taxes	i.ii		42,471		(42,471	)		-			-		76,310		(76,310	)		-			-
Recoverable taxes			265,417		-			-			265,417		327,864		-			-			327,864
Other current assets	a		50,279		19,229			-			69,508		62,681		13,991			-			76,672
			3,533,494		(409,771	)		-			3,123,723		3,926,710		(528,656	)		698			3,398,752
Non-current
Deferred income taxes	i.ii		700,044		42,471			66,703			809,218		560,114		76,310			49,715			686,139
Advances to suppliers			48,035		-			-			48,035		63,741		-			-			63,741
Related parties			-		-			-			-		81,411		-			-			81,411
Recoverable taxes			21,374		-			-			21,374		45,018		-			-			45,018
Judicial deposits	i.i		-		171,266			-			171,266		-		167,562			-			167,562
Other financial assets	g		177,626		-			125,841			303,467		205,657		3			149,710			355,370
Other non-current assets			443,317		(42,468	)		2,138			402,987		512,613		(49,737	)		(7,583	)		455,293
Equity method investments	f		278,209		-			44,868			323,077		193,123		-			67,691			260,814
Biological assets	a		-		942,533			(188,302	)		754,231		-		1,106,675			(143,431	)		963,244
Property, plant and equipment	a, b, d, e		3,493,947		(592,171	)		1,021,847			3,923,623		5,561,065		(678,342	)		1,231,808			6,114,531
Intangible assets	b		2,862,654		59,404			(12,202	)		2,909,856		3,289,804		75,436			460,127			3,825,367
			8,025,206		581,035			1,060,893			9,667,134		10,512,546		697,907			1,808,037			13,018,490
Total assets			11,558,700		171,264			1,060,893			12,790,857		14,439,256		169,251			1,808,735			16,417,242

F-35

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

			April 1, 2009												March 31, 2010
	Note		BRGAAP			Reclassification			Adjustments to IFRS			IFRS			BRGAAP		Reclassification			Adjustments to IFRS			IFRS
Liability
Current
Current portion of long-term debt		b		1,452,297			-			-			1,452,297			845,430		-			(5,901	)		839,529
Derivatives				66,895			-			-			66,895			76,703		-			-			76,703
Trades accounts payable				456,116			-			-			456,116			569,399		-			-			569,399
Salaries payable				93,156			-			-			93,156			141,584		-			-			141,584
Taxes payable				168,596			-			-			168,596			215,862		-			-			215,862
Dividends payable				-			-			-			-			43,982		-			-			43,982
Related parties				-			4,458			-			4,458			14,416		1,689			-			16,105
Other current liabilities				90,738			(5,168	)		-			85,570			183,034		-			-			183,034
				2,327,798			(710	)		-			2,327,088			2,090,410		1,689			(5,901	)		2,086,198
Non-current
Long-term debt				3,232,736			-			-			3,232,736			5,136,529		-			-			5,136,529
Taxes payable		b		328,760			-			-			328,760			593,505		-			(651	)		592,854
Legal proceedings		i		1,105,899			171,266			-			1,277,165			444,421		167,562			-			611,983
Related parties				-			708			3			711			-		-			-			-
Pension		h		60,378			-			4,730			65,108			61,788		-			(61,788	)		-
Deferred income taxes				-			-			528,969			528,969			346,599		-			775,809			1,122,408
Other non-current liabilities		b		234,050			-			128,343			362,393			218,935		-			156,409			375,344
				4,961,823			171,974			662,045			5,795,842			6,801,777		167,562			869,779			7,839,118
Equity
Common stock				5,328			-			-			5,328			5,328		-			-			5,328
Capital reserve				3,749,564			59,496			(148,020	)		3,661,040			3,547,410		231,986			(124,950	)		3,654,446
Accumulated earnings (losses)				(563,672	)		(59,496	)		452,798			(170,370	)		18,554		(231,986	)		749,156			535,724
Equity attributable to owners of the Company				3,191,220			-			304,778			3,495,998			3,571,292		-			624,206			4,195,498
Equity attributable to non-controlling interests		c		1,077,859			-			94,070			1,171,929			1,975,777		-			320,651			2,296,428
Total equity				4,269,079			-			398,848			4,667,927			5,547,069		-			944,857			6,491,926
Total liabilities and equity				11,558,700			171,264			1,060,893			12,790,857			14,439,256		169,251			1,808,735			16,417,242

F-36

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

3.2 Reconciliation of the income statement – year ended March 31, 2010

	Note		BR GAAP			Adjustments to IFRS			IFRS
Net sales				15,336,055			-			15,336,055
Cost of goods sold		a/b		(13,210,692	)		(60,639	)		(13,271,331	)
Gross profit				2,125,363			(60,639	)		2,064,724
Operational income /(expenses)
Selling				(864,601	)		1,875			(862,726	)
General and administrative				(502,483	)		807			(501,676	)
Other, net		b		(111,289	)		148,812			37,523
Gain on tax recovery program				270,333			-			270,333
				(1,208,040	)		151,494			(1,056,546	)
Income before financial results, equity income of associates and income taxes				917,323			90,855			1,008,178
Equity income of associates		g/e		(18,645	)		22,823			4,178
Financial results, net		b		458,626			34,815			493,441
				439,981			57,638			497,619
Income before income taxes				1,357,304			148,493			1,505,797
Income Taxes
Current				(78,381	)		-			(78,381	)
Deferred	ii			(355,454	)		10,531			(344,923	)
Net income for the year				923,469			159,024			1,082,493
Net income attributable to non-controlling interests		c		(344,777	)		(31,622	)		(376,399	)
Net income attributable to Cosan				578,692			127,402			706,094

3.3. Reconciliation of equity

	Note		April 1, 2009			March 31, 2010
BR GAAP equity				3,191,220			3,571,292
IFRS adjustments:
Biological assets		a		(129,727	)		(89,313	)
Business combinations		b		134,049			259,868
Pension plan – defined benefit		h		(3,259	)		38,474
Deemed cost of Property, plant and equipment		d		252,252			227,999
Borrowing costs		e		-			26,249
Other adjustments				(1,880	)		(1,477	)
Warrants on equity method investment		g		86,696			93,225
Investment property in associate		f		30,911			42,151
Deferred income tax on IFRS adjustments	ii			(64,304	)		27,853
Non-controlling interest		c		40			(823	)
IFRS equity excluding non-controlling interest				3,495,998			4,195,498
Presentation of non-controlling interest inside equity				1,171,929			2,296,428
IFRS equity				4,667,927			6,491,926

F-37

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

 

3.4 Reconciliation of net income – Year ended March 31, 2010

	Note		Year ended March 31, 2010
BR GAAP net income				578,692
IFRS adjustments:
Biological assets		a		17,999
Business combinations		b		(21,525	)
Borrowing costs		e		9,087
Warrants on equity method investment		g		45,234
Investment property in associate		f		43,245
Deferred income tax on IFRS adjustments	ii			(24,589	)
Non-controlling interest		c		57,950
IFRS net income				706,094

The transition from Brazilian GAAP to IFRS did not result in a material impact on the statement of cash flows.

The significant adjustments as a consequence of the adoption of IFRS are described as follows:

a)     Biological assets

According to the IAS 41, biological assets of Cosan S.A. are measured at fair value at each reporting period, using the discounted cash flow method.

In accordance with accounting practices prior to the adoption of IFRS, the biological assets were recorded at their historical cost less amortization and were classified and presented in the statement of financial position as inventories or fixed assets  The costs classified in inventories related to maintenance costs of the crop to be harvested within 12 months, and the costs recognized in fixed assets related to the costs of the initial crop of sugarcane plants, which are amortized over five years, the estimated useful life.

The negative adjustment of biological assets to fair value as of the IFRS transition date was not considered an indicator of impairment of the previous carrying value of the previously classified inventory or fixed assets under Brazilian GAAP.   Rather, such previous asset values were deemed recoverable as of April 1, 2009 based on the estimated future cash flows of all crops to be grown on the land as they are used to produce sugar and ethanol, as compared to the current fair value of biological assets which is based on the current status on crops in process.

F-38

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

b)     Business combinations

Under IFRS 3, all assets and liabilities of businesses acquired after the transition date, including any intangible assets are valued at their fair value at the date of transaction. In addition, purchases of businesses with payment in shares or other securities issued by the purchaser must also be measured at fair value for purposes of determining the purchase price, which consequently affects the value of goodwill calculated. Cosan considered the transition date for application of IFRS 3 to be December 1, 2008, the date of acquisition of Cosan CL.

The buyer must recognize contingent consideration at fair value at the acquisition date as part of the consideration for obtaining control of the acquiree.

If the Company's interest in the fair value of identifiable assets and liabilities acquired exceeds the acquisition cost, such excess is recorded as an immediate gain in income.

According to Brazilian GAAP, goodwill in a business combination was calculated based on the amount paid in cash.  Amounts paid with shares considered the equity value of the shares given and not their market value and determination of the amounts did not consider the existence of any intangible assets to be recorded.  Total consideration was then compared with the book value of the acquired company. If a discount was identified, it would be recorded in noncurrent liabilities.

Under Brazilian GAAP, up to March 31, 2010, goodwill on a business combination was calculated as the difference between the purchase price and the historical net assets of the business acquired. The purchase price, if not cash, and the net assets did not reflect any fair value considerations. Any negative goodwill would be presented as a liability.

c)     Non-controlling interests

Under IAS 27 - Consolidated and Separate Financial Statements, the participation of non-controlling interest is presented as a component of equity.

According to Brazilian GAAP, up to March 31, 2010, non-controlling interests were presented between non-current liabilities and equity on the statement of financial position.

Also, some first time adoption adjustments impacted non-controlling interests.

F-39

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

d)     Deemed cost

Cosan S.A. elected to measure its farming land at fair value at the date of transition to IFRS. The adjustment was recorded against equity net of deferred taxes.

e)     Borrowing costs

Under Brazilian GAAP, up to March 31, 2010, Cosan S.A. did not capitalize borrowing costs. Cosan S.A. has applied the transitional provisions in IAS 23 Borrowing Costs and capitalizes borrowing costs on assets where construction was commenced on or after the date of transition.

f)     Investment property in associate

Radar Propriedades Agricolas S.A. (“Radar”) is an equity method investment of the Company that invests in farming land for rent and future appreciation. Under Brazilian GAAP, up to March 31, 2010, such land was recorded at cost. With the adoption of IFRS, Radar treated such land as investment property and elected to measure it at fair value. Fair value is measured at each reporting date, impacting the equity income of Cosan S.A. in regard to Radar.

g)     Warrants on equity method investment

Cosan S.A. holds warrants on Radar, exercisable at any time up to maturity (August 2018). Such warrants permit Cosan S.A. to purchase additional shares, equivalent to 20% of total shares as of the date of exercise. The exercise of warrants will not change the classification of this investment as an equity investment. Those warrants were not considered to be a financial instrument under Brazilian GAAP up to March 31, 2010 as they cannot be net settled. Radar is a privately owned entity. Under IFRS the warrants are treated as a separate financial instrument measured at fair value.

h)     Pension plan – defined benefit

Under Brazilian GAAP, up to March 31, 2010, the Company recorded its defined benefit plan under the corridor approach with respect to actuarial gains and losses. With the adoption of IAS 19, the Company elected to recognize actuarial gain and losses in the period the occur as a component of other comprehensive income.

F-40

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

i)     Reclassifications

The major reclassifications made in connection with the adoption of IFRS were as follows:

i) Judicial deposits

Under IFRS, judicial deposits related to provisions for legal proceedings are presented on a gross basis in non-current assets as they do not satisfy the requirements for compensation with the related liability under IAS 1. Previously, under Brazilian GAAP up to March 31, 2010, provisions for legal proceedings were presented net of related judicial deposits.

ii) Deferred income taxes

As required by IAS 12, all deferred income taxes have been reclassified to non-current assets or liabilities. Also, the balance of deferred income taxes was impacted by the adjustments previously mentioned.

4. Cash and cash equivalents

	2011		2010		April 1, 2009
Brazilian reais
Cash		289		384		125
Bank accounts		64,437		22,740		74,586
Highly liquid investments		1,076,599		877,017		528,539
US dollars
Bank accounts		78,353		127,755		48,969
Highly liquid investments		52,102		82,870		525,717
		1,271,780		1,110,766		1,177,936

On March 31, 2011, Cosan S.A. had unused lines of credit with BNDES, at the amount of R$1,064,930 (2010: R$765,075). The use of these lines of credit depends upon fulfillment of certain contractual conditions.

F-41

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

5. Restricted cash

	2011		2010		April 1, 2009
Restricted financial investments		61,072		-		-
Deposits in connection with derivative Transactions		126,872		44,972		11,757
		187,944		44,972		11,757

Deposits in connection with derivative transactions relate to margin calls by counterparties in derivative transactions.

6. Other financial assets

	2011		2010		April 1, 2009
Fair value of Radar option (1)		162,961		149,713		125,841
Treasury certificates – CTN (2)		257,456		205,657		177,626
		420,417		355,370		303,467

(1) Cosan S.A. holds warrants on Radar, exercisable at any time up to maturity (August 2018). Such warrants will allow Cosan S.A. to purchase additional shares at R$41.67 per share adjusted for inflation (IPCA), equivalent to 20% of the total shares issued by Radar as of the date of exercise. The exercise of warrants will not change the classification of this investment as an equity investment. The fair value of these warrants was calculated based on observable market data.

(2) Represented by bonds issued by the Brazilian National Treasury under the Special Program for Agricultural Securitization - "PESA" with original maturity of 20 years in connection with the long-term debt denominated PESA (note 16). These bonds yield inflation (IGPM) plus 12% p.a.. The value of these securities at maturity is expected to be equal to the amount due to the PESA at that date. If the PESA debt is paid in advance, Cosan S.A. may still keep this investment until maturity.

F-42

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

7. Accounts receivable

The balances of accounts receivables as of March 31, 2011, 2010 and April 1, 2009 are composed as follows:

	2011			2010			April 1, 2009
Domestic		678,498			715,481			539,326
Foreign		7,556			148,655			162,822
Allowance for doubtful accounts		(91,197	)		(97,721	)		(102,985	)
		594,857			766,415			599,163

The analysis of the maturity of the accounts receivable is as follows:

	2011		2010		April 1, 2009
Current		555,826		483,279		359,644
Overdue
Up to 30 days		21,097		273,435		228,943
From 31 to 60 days		4,317		4,760		1,882
From 61 to 90 days		553		4,146		4,227
From 91 to 180 days		4,096		717		327
More than 180 days		8,968		78		4,140
		39,031		283,136		239,519
		594,857		766,415		599,163

Changes in the allowance for doubtful accounts are as follows:

On April 1, 2009	(102,985	)
Provision	(14,011	)
Reversal	15,389
Write-offs	11,748
Addition from business combination	(7,862	)
On March 31, 2010	(97,721	)
Provision	(16,573	)
Reversal	18,238
Write-offs	6,130
Addition from business combination	(1,271	)
On March 31, 2011	(91,197	)

F-43

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

8. Inventories

	2011			2010			April 1, 2009
Finished goods:
Sugar		77,673			93,610			109,265
Ethanol		42,840			97,791			200,980
Fuels and lubricants		326,634			226,248			274,430
Raw material		51,598			42,022			45,721
Spare parts and other		191,153			178,272			112,362
Provision for inventory realization and obsolescence		(19,567	)		(25,260	)		(23,102	)
		670,331			612,683			719,656

Change in the provision for inventory realization and obsolescence is as follows:

On April 1, 2009	(23,102	)
Addition	(14,528	)
Reversal	12,370
On March 31, 2010	(25,260	)
Addition	(13,483	)
Reversal	19,176
On March 31, 2011	(19,567	)

9. Recoverable taxes

	2011			2010			April 1, 2009
Income Tax		66,274			107,675			66,083
COFINS		121,474			74,571			81,024
PIS		27,338			24,263			21,667
ICMS – State VAT		151,161			119,404			76,474
IPI		47,741			21,911			35,204
Others		16,069			25,058			6,339
		430,057			372,882			286,791
Current		(374,991	)		(327,864	)		(265,417	)
Non Current		55,066			45,018			21,374

F-44

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

10. Related parties

In the normal course of business the Company has operational and financing transactions with several related parties. The significant related party balances and transactions are summarized below:

·     Aguassanta:

The Company has land leased from entities controlled by Group Aguassanta (“Aguassanta”) a group of entities under common control, being Mr. Rubens Ometto de Silveira de Mello ultimate controlling shareholder. The lease costs are paid considering the ATR price published by CONSECANA and contracts having terms expiring between 2026 and 2027.

·     Radar

The Company has land leased from entities controlled by Radar Propriedades Agrícolas S.A. (“Radar”) our associate. These lease costs are paid also considering the ATR price published by CONSECANA and most of the lease contracts have terms expiring in 2027.

·     Rezende Barbosa

The Company holds a receivable originated from the acquisition of Curupay which are ultimately guaranteed by shares issued by the Company.

The Company executed a long-term sugar-cane supply agreement with Rezende Barbosa. Prices paid to them are based on ATR price published by CONSECANA.

·     Vertical UK LLP

The Company sells and buys ethanol from Vertical UK (“Vertical”) in the normal course of business. Vertical is a Trading Company headquartered in Switzerland for which we have a 50% stake.

·     Logispot

In the year ended March 31, 2010 the Company acquired a minority stake in this entity and the installments outstanding represented the March 31, 2010 balance payable in regard to the share acquisition. In March 2011 the Company acquired the control of such entity as disclosed in Note 11.

F-45

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

a. Summarized balances with related parties

	2011		2010		2009
Current assets
Vertical UK LLP		6,430		5,015		26,850
Aguassanta		-		14,003		-
Rezende Barbosa		7,298		7,349		-
Other		941		879		30,382
Total current assets		14,669		27,246		57,232
Non-current assets
Rezende Barbosa		91,954		81,411		-
Total assets		106,623		108,657		57,232

	2011		2010		2009
Current Liabilities
Rezende Barbosa		37,664		1,689		-
Logispot		-		11,244		-
Other		3,499		3,172		4,458
Total current liabilities		41,163		16,105		4,458
Non-current liabilities
Other		4,444		-		711
Total non-current liabilities		4,444		-		711
Total Liabilities		45,607		16,105		5,169

b. Summarized transactions with related parties

	2011			2010
Sales of products/ services
Vertical UK LLP		160,202			154,042
Aguassanta		39,131			101,902
Other		832			-
		200,165			255,944
Purchase of goods/ services
Rezende Barbosa		(352,195	)		(155,615	)
Leased land
Aguassanta		(26,459	)		(18,817	)
Radar Propr. Agricolas		(28,446	)		(18,158	)
		(54,905	)		(36,975	)
Financial income/ (expense)
Rezende Barbosa		233			18,045
Other		524			(84	)
		757			17,961

F-46

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

c. Officers and directors compensation

Fixed and variable compensation for key management, including officers and directors were recorded as general, administrative and other expenses and amounted to as follows:

	2011			2010
Regular compensation		9,005			6,589
Stock option expense		2,961			8,971
Bonuses and other variable regular compensation		23,791			6,325
Total compensation recorded as expense		35,757	x		21,885

11. Business combination and acquisitions of non-controlling interest

a. Logispot Armazéns Gerais S.A. (“Logispot”)

On March 14, 2011, Cosan S.A., through its indirect subsidiary Rumo, purchased 874,226 common shares of Logispot, totaling R$ 48,888 cash which increased its participation in the common shares of Logispot from 14.28% to 51.00%.

Logispot is located in the city of Sumaré and is an important link between plants in the state of São Paulo and Santos Port. The terminal is accessed by all railroads that cross the state of São Paulo and is beside the Anhanguera, Bandeirantes and Dom Pedro highways. The site has a static capacity of 400,000 tons, a structure to receive and send both through roads, as well as by rail, but the potential to carry a composition of 120 railcars of 90 tones per day (unaudited information).

The fair value at the acquisition date of the consideration transferred totaled R$ 68,880, which consisted of the following:

Cash	48,888
Fair value of 14.28% of Cosan S.A. in Logispot immediately before the business combination	19,992
Total	68,880

F-47

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

The estimated fair value of assets acquired and liabilities assumed at the date of acquisition of Logispot were as follows:

Description
Accounts receivable	1,297
Others assets	677
Property, plant and equipment	218,638
Deferred income and social contribution taxes	(64,394	)
Others liabilities	(26,942	)
Non-controlling interest	(63,901	)
Net assets acquired	65,375
Consideration transferred, net of cash acquired	67,745
Provisional goodwill	2,370

The purchase price for the acquisition of Logispot was allocated on a preliminary basis based on the estimated fair value of assets acquired and liabilities assumed. The provisional goodwill has been allocated in the segment Rumo.

b.     Cosan Araraquara Açúcar e Álcool Ltda. (“Usina Zanin”)

On February 18, 2011, Cosan S.A. acquired 100% of the share capital of Usina Zanin, for R$90,000 cash. Usina Zanin is located in the city of Araraquara and has a production capacity of 300m ³ / day of anhydrous ethanol, 220m ³ / day of hydrous ethanol, 925 tons / day of sugar and storage capacity of 35,000 m³ of ethanol and 25,000 tons of sugar (unaudited information).

The estimated fair value of assets acquired and liabilities assumed at date of acquisition of Usina Zanin, was as follows:

Description
Inventories	8,511
Biological assets	87,115
Others assets	57,527
Property, plant and equipment	257,473
Intangible assets	4,407
Loans and Long-term debt	(280,941	)
Provision for judicial demands	(21,471	)
Deferred income and social contribution taxes	(45,277	)
Others liabilities	(47,819	)
Net assets acquired	19,525
Consideration transferred, net of cash acquired	88,927
Goodwill	69,402

The purchase price of the acquisition of Usina Zanin was preliminarily allocated based on the estimated fair value of assets acquired and liabilities assumed. The preliminary goodwill has been allocated in the S&E segment.

F-48

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

c.     TEAS Terminal Exportador de Álcool de Santos S.A. (“TEAS”)

On November 24, 2009, Cosan S.A. acquired, for R$ 20,260 cash, an additional 26.7% interest, represented by 10,527,295 common shares, of TEAS from Crystalsev Comércio e Representação Ltda and Plínio Nastari Consultoria e Participações Ltda.. As a result of this transaction, Cosan S.A. increased its direct share ownership in TEAS from 40.0% to 66.7% and obtained control of TEAS. TEAS has a port concession and operates a dedicated terminal for export of ethanol.

The acquisition date fair value of the consideration transferred totaled R$ 39,911, which consisted of the following:

Cash	20,260
Fair value of share of 40% of Cosan S.A. in TEAS immediately before the combination	19,651
Total	39,911

The following table summarizes the fair values of assets acquired and liabilities assumed at the acquisition date:

Description
Property, plant and equipment	21,162
Others assets and liabilities, net	405
Non-controlling interest	(6,258	)
Net assets acquired	15,309
Consideration transferred, net of cash acquired	22,610
Goodwill	7,301

The goodwill has been allocated in the S&E segment.

d.     Curupay S.A. Participações (“Curupay”)

On June 18, 2009, Cosan S.A. acquired 100% of the outstanding shares of Curupay S.A. Participações from Rezende Barbosa S.A. Administração e Participações (“Rezende Barbosa”), through the issuance of 44,300,389 common shares valued at R$14.09 per share (fair value at the acquisition date) with a value of R$ 624,192.  The assets acquired include the non-controlling interest in Novo Rumo representing 28.82% of its outstanding shares which were issued in the Teaçu Armazéns Gerais S.A. (Teaçu”) acquisition, and 100% of the outstanding shares of two operating companies, Nova América S.A. Trading and Cosan Alimentos (collectively referred to as “Nova América”).

With the acquisition of the noncontrolling interest of Novo Rumo, Cosan S.A. increased its share ownership in Novo Rumo to 92.88%. This transaction was a change in ownership interest without a loss of control and accounted for as a transaction in equity.

F-49

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

The following table summarizes the assets acquired and liabilities assumed in relation to Nova America:

Description
Inventories	119,212
Related parties	67,741
Property, plant and equipment	885,786
Intangible assets	243,955
Noncontrolling interest in Novo Rumo	132,539
Others assets	340,776
Loans and Long-term debt	(1,174,631	)
Taxes payables	(56,028	)
Deferred income and social contribution taxes	(47,354	)
Others liabilities	(303,651	)
Net assets acquired	208,345
Consideration transferred, net of cash acquired	572,710
Goodwill	364,365

The goodwill of R$ 364,365 arising from the acquisition was assigned to the Sugar and Ethanol operating segment (“S&E”).

The purchase price to acquire Curupay was allocated based on the fair value of assets acquired and liabilities assumed. Cosan S.A. obtained an independent valuation of property, plant and equipment, intangible assets, loans and long-term debt and internally determined the fair value of other assets and liabilities of the acquired business.

e. Teaçu Armazéns Gerais S.A. (“Teaçú”)

On April 9, 2009, Cosan S.A., through its 90% owned subsidiary, Copsapar Participacoes SA, which owns 100% of the Novo Rumo, acquired 100% of the shares of Teaçu of Rezende Barbosa for R$ 121,131 and issue of 90,736,131 shares of Novo Rumo, equivalent to 28.82% of their capital. Teaçu holds a port concession and operates a dedicated terminal for export of sugar and other agricultural products.

As a result of this transaction, Cosan S.A. reduced its indirect participation in Novo Rumo to 64.06%.

The acquisition date fair value of the consideration transferred totaled R$ 382,908, which is formed by:

Cash	121,131
Common stock at fair value	261,777
Total consideration transferred	382,908

In the absence of a market price, the fair value of shares included in the consideration transferred was calculated using an income approach, using the present value of estimated future cash flows.

F-50

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

The table below shows the fair values of assets acquired and liabilities assumed at the date of acquisition.

Description
Property, plant and equipment	101,711
Intangible assets	316,977
Inventories	2,768
Others assets	61,740
Loans and Long-term debt	(43,355	)
Suppliers	(1,111	)
Provision for judicial demands	(7,532	)
Deferred income and social contribution taxes	(104,551	)
Others liabilities	(7,136	)
Net assets acquired	319,511
Consideration transferred, net of cash acquired	382,432
Goodwill	62,921

The goodwill was assigned to Rumo operating segment.

The purchase price for the acquisition of Teaçu was allocated based on the fair value of assets acquired and liabilities assumed. Cosan S.A. obtained an independent valuation of property, plant and equipment, intangible assets, loans and Long-term debt and internally determined the fair value of other assets and liabilities of the acquiree.

e.     Additional information (unaudited)

If entities acquired during 2011 had been included in the income statement since the beginning of the year the additional revenue would be R$ 254,368 and net income would be decreased in R$ 6,461.

12. Equity method investments

	Investments						Equity income (loss) of subsidiaries and associates
	2011		2010		April 1, 2009		2011			2010
Radar (interest of 18.92%)		260,756		222,525		184,211		28,658			24,639
Uniduto Logística Ltda. (interest of 36.45%)		9,561		17,783		7,506		(12,391	)		-
Other investments		33,825		20,506		131,360		8,920			(20,461	)
		304,142		260,814		323,077		25,187			4,178

F-51

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Changes in investments

Balances at April 1, 2009	323,077
Equity income (loss)	4,178
Additions to investments	48,805
Change from associate to subsidiary	(119,051	)
Others	3,805
Balances at March 31, 2010	260,814
Equity income (loss)	25,187
Additions to investments	37,979
Change from associate to subsidiary	(20,015	)
Others	177
Balances at March 31, 2011	304,142

Information on associates

On March 31, 2011
	Assets		Liabilities		Equity		Net profit
Radar Propriedades Agrícolas S.A.		1,804,609		426,355		1,378,254		151,421
Uniduto Logística Ltda.		27,836		1,608		26,228		(18,786	)

13. Biological assets

Changes in biological assets (sugarcane plants) is described below:

	Consolidated
Balances at April 1, 2009		754,231
Change in fair value		44,871
Increase due to planting and growing costs		647,467
Haversted cane transferred to inventory		(483,325	)
Balances at March 31, 2010		963,244
Change in fair value		381,894
Increase due to planting and growing costs		745,572
Haversted cane transferred to inventory		(616,693	)
Increase resulting from business combination		87,115
Balances at March 31, 2011		1,561,132

Sugarcane plants

Areas cultivated represent only the sugarcane, without considering the land where these crops are found. The following assumptions were used to determine fair value using the discounted cash flow:

	2011	2010
Crop area (hectares)	340,386	297,864
Expect productivity (tons of cane per hectare)	84.74	90.36
Total amount of recoverable sugar – ATR (kg)	138.54	134.08
Price kg ATR projected average (R$/kg)	0.4228	0.3781

F-52

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Sugar production depends on the volume and sucrose content of sugarcane grown or supplied by farmers located near the plants. The yield of the crop and the sucrose content in sugarcane mainly depend on weather conditions such as rainfall rate and temperature, which may vary. Historically, weather conditions have caused volatility in the ethanol and sugar, and consequently in our operating results because they undermine or reduce crop yields. Future climate conditions may reduce the amount of sugar and sugarcane that the Company will obtain in a particular season or in the sucrose content of sugarcane. Additionally, our business is subject to seasonality according to the growth cycle of sugarcane in South-Central region of Brazil. The period of annual harvest of sugarcane in South-Central region of Brazil begins in April / May and ends in November / December. This creates variations in stock, usually high in November to cover sales between crop (i.e. from December to April) and a degree of seasonality in gross profit from sales of ethanol and sugar significantly lower in the last quarter of fiscal year. The seasonality and any reduction in the volume of sugar recovered could have a material adverse effect on our operating results and financial condition.

F-53

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

14. Property, plant and equipment

		Land and rural properties			Buildings and improvements			Machinery and equipment			Aircraft			Rail cars and locomotives			Boats and vehicles			Furniture, fixtures and computer equipment			Construction in progress			Advances for purchase of property, plant and equipment			Parts and components to be periodically replaced			Other			Total
Cost or valuation:
Balances at April 1, 2009			1,025,824			806,335			1,994,666			14,131			-			212,983			103,590			881,561			203,493			214,095			5,248			5,461,926
Addition			4,297			5,313			49,580			-			-			313			494			1,326,213			-			333,859			-			1,720,069
Write-offs			(5,657	)		(11,537	)		(44,046	)		(736	)		-			(19,986	)		(6,063	)		-			(23,225	)		(6,212	)		(4,064	)		(121,526	)
Transfers			635			133,202			1,025,250			4,691			-			28,985			15,182			(1,208,111	)		-			(467	)		-			(633	)
Addition by acquisition			16,751			-			581,788			-			-			1,050			5,891			408,589			20,366			16,042			(179	)		1,050,298
Balances at March 31, 2010			1,041,850			933,313			3,607,238			18,086			-			223,345			119,094			1,408,252			200,634			557,317			1,005			8,110,134
Addition			12,500			6,684			81,133			-			-			312			1,806			1,577,620			-			479,446			-			2,159,501
Write-offs			(4,445	)		(10,001	)		(29,556	)		(1,148	)		-			(2,814	)		(5,575	)		-			(87,899	)		-			-			(141,438	)
Transfers			6,534			164,304			1,170,279			13,965			341,647			102,199			21,728			(1,824,414	)		-			-			3,758			-
Addition by acquisition			206,801			27,956			151,338			-			-			-			153			57,307			36,212			6,579			19			486,365
Balances at March 31, 2011			1,263,240			1,122,256			4,980,432			30,903			341,647			323,042			137,206			1,218,765			148,947			1,043,342			4,782			10,614,562
Depreciation:
Balances at April 1, 2009			-			(217,724	)		(1,107,817	)		(11,133	)		-			(126,580	)		(72,580	)		-			-			(467	)		(2,002	)		(1,538,303	)
Depreciation expenses			-			(43,550	)		(198,621	)		(2,026	)		-			(22,960	)		(10,503	)		-			-			(240,629	)		-			(518,289	)
Disposals			(954	)		6,505			33,016			68			-			15,553			4,332			-			-			-			2,002			60,522
Transfers			-			970			(795	)		-			-			(351	)		176			-			-			467			-			467
Addition by acquisition			-			-			-			-			-			-			-			-			-			-			-			-
Balances at March 31, 2010			(954	)		(253,799	)		(1,274,217	)		(13,091	)		-			(134,338	)		(78,575	)		-			-			(240,629	)		-			(1,995,603	)
	961		-			(46,053	)		(218,193	)		(2,133	)		(6,128	)		(18,348	)		(14,467	)		-			-			(371,230	)		-			(676,552	)
Disposals			(2,164	)		5,947			24,776			29			-			2,487			5,160			-			-			-			-			36,235
Transfers			-			6,285			(4,878	)		-			-			53			422			-			-			-			-			1,882
Addition by acquisition			-			-			-			-			-			-			-			-			-			-			-			-
Balances at March 31, 2011			(3,118	)		(287,620	)		(1,472,512	)		(15,195	)		(6,128	)		(150,146	)		(87,460	)		-			-			(611,859	)		-			(2,634,038	)
Net salvage value:
March 31, 2011			1,260,122			834,636			3,507,920			15,708			335,519			172,896			49,746			1,218,765			148,947			431,483			4,782			7,980,524
March 31, 2010			1,040,896			679,514			2,333,021			4,995			-			89,007			40,519			1,408,252			200,634			316,688			1,005			6,114,531
April 1, 2009			1,025,824			588,611			886,849			2,998			-			86,403			31,010			881,561			203,493			213,628			3,246			3,923,623

F-54

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Capitalization of borrowing costs

On March 31, 2011, borrowing costs capitalized amounted to R$ 70,543 (R$ 43,302 in 2010). The weighted average interest rate, used for capitalization of interest on the balance of construction in progress, was 9.13% at March 31, 2011 (6.47% in 2011).

15. Intangible assets

	Software license			Trademarks			Goodwill			Customer base			Favorable operating leases			Distribution rights			Others			Total
Cost or valuation:
Balances at April 1, 2009		66,090			341,221			2,214,077			266,443			-			59,404			-			2,947,235
Addition		7,139			-			-			-			-			42,607			-			49,746
Write-off		(5,972	)		-			(41,066	)		-			-			-			-			(47,038	)
Transfers		633			-			-			-			-			-			-			633
Addition by incorporation/acquisition		2,507			88,450			434,587			316,977			155,505			-			14,226			1,012,252
Others		-			-			15,554			-			-			-			-			15,554
Balances at March 31, 2010		70,397			429,671			2,623,152			583,420			155,505			102,011			14,226			3,978,382
Additions		33,709			-			-			-			-			68,280			30,157			132,146
Write-off		(6,103	)		-			-			-			-			-			(600	)		(6,703	)
Transfers		-			-			-			-			-			-			(1,546	)		(1,546	)
Addition by incorporation/acquisition		60			-			71,772			-			-			-			1,026			72,858
Others		-			-			2,297			-			-			-			-			2,297
Balances at March 31, 2011		98,063			429,671			2,697,221			583,420			155,505			170,291			43,263			4,177,434
Amortization		(37,379	)																				(37,379	)
Balances at April 1, 2009		(14,153	)		(49,134	)		-			(20,030	)		(6,479	)		(26,576	)		(2,433	)		(118,805	)
Amortization expense in the year		5,874			-			-			-			-			-			-			5,874
Addition by incorporation/acquisition		(2,186	)		-			-			-			-			-			(519	)		(2,705	)
Balances at March 31, 2010		(47,844	)		(49,134	)		-			(20,030	)		(6,479	)		(26,576	)		(2,952	)		(153,015	)
Amortization expense in the year		(16,924	)		(49,576	)		-			(21,008	)		(8,639	)		(35,811	)		(5,524	)		(137,482	)
Write-off		5,969			-			-			-			-			-			-			5,969
Transfers		(7,265	)		-			-			-			-			-			3,829			(3,436	)
Addition by incorporation/acquisition		(47	)		-			-			-			-			-			152			105
Balances at March 31, 2011		(66,111	)		(98,710	)		-			(41,038	)		(15,118	)		(62,387	)		(4,495	)		(287,859	)
Net book value:
Balances at March 31, 2011		31,952			330,961			2,697,221			542,382			140,387			107,904			38,768			3,889,575
Balances at March 31, 2010		22,553			380,537			2,623,152			563,390			149,026			75,435			11,274			3,825,367
Balances at April 1, 2009		28,711			341,221			2,214,077			266,443			-			59,404			-			2,909,856

	Annual amortization rate			3/31/2011		3/31/2010		4/1/2009
Intangible asset				thousand R$		thousand R$		thousand R$
Software license		20	%		31,952		22,553		28,711
Trademarks
Trademark Esso (a)		20	%		68,696		93,677		118,657
Trademark Mobil (b)		10	%		176,911		199,737		222,564
Trademark União (c)		2	%		85,354		87,123		-
Customer base (d)		3.45	%		247,907		257,176		266,443
Customer base (e)		3.70	%		294,475		306,214		-
Favorable operating leases (f)		5.56	%		140,387		149,026		-
Distribution rights	Straight line over contract term				107,904		75,436		59,404
Others					38,768		11,273		-
Total					1,192,354		1,202,215		695,779

F-55

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

(a) refers to the right to use the trademark Esso, arising from the acquisition of Cosan CL.

(b) refers to the right to use the trademark of Mobil lubricants arising from the acquisition of Cosan CL.

(c) refers to the right to use the trademark sugar União arising from the acquisition of Curupay.

(d) refers to the customer of Cosan CL acquired in its business combination.

(e) refers to the costumer base of Teaçu acquired in its business combination.

(f) refers to favorable lease contracts arising from the acquisition of Curupay.

Impairment testing for cash-generating units containing goodwill

For the purpose of impairment testing, goodwill is allocated to the operating segments of the Company, at which goodwill is monitored for purposes of internal administration, not above the Company's operating segments. Goodwill acquired through business combinations has been allocated to three cash-generating units, which are also operating segments that provide information, as shown below:

·     Sugar and ethanol cash-generating unit (“S&E”);

·     Distribution of fuels and lubricants cash-generating unit (“CCL”);

·     Logistic cash-generating unit (“RUMO”).

The combined value of goodwill allocated to each unit is as follows:

Carrying amount of goodwill	2011		2010		April 1, 2009
S&E cash-generating unit		1,877,883		1,818,338		1,447,279
CCL cash-generating unit		755,524		747,895		766,798
Rumo cash-generating unit		63,814		56,919		-
Total goodwill		2,697,221		2,623,152		2,214,077

As defined in the accounting policy described in note 2.3 (k), the Company tests annually the recoverable amount of goodwill.

F-56

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Nonfinancial long term assets, not subject to amortization, are reviewed whenever there are indications that the carrying value is not recoverable.

The Company uses the value in use method to determine the recoverable amount of the asset.  The value in use method is based on the projection of the expected cash flows of cash-generating units. In connection with the application of the value in use method, the key assumptions are sales prices of all commodities, operating costs, capital investment and discount rates.

Management determines its cash flows based on its annual budgets taking into account for each cash generating unit (i) S&E: the expected long-term sales price of commodities, productivity of agricultural areas, the performance of total recoverable sugar (“ATR”), and related costs, (ii) CCL: the expected growth in operations based on gross domestic product and other macroeconomic aspects, (iii) Rumo: expectations of the Brazilian sugar production destined designated mainly for export. All these cash flows are discounted at rates that reflect specific risks relating to assets relevant to each cash generating unit.

Management has not identified any impairments for its cash generating units. The determination of the recoverable amount depends on certain key assumptions as described above which are influenced by market conditions, technological and economic forces present at the time that the impairment test is undertaken and thus management cannot determine if impairment losses will occur in the future.

F-57

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

16. Loans and long-term debt

Description	Index	Average annual interest rate	2011	2010	April 1, 2009	Maturity date
Senior Notes Due 2014	Dollar (USD)	9.5%	576,814	631,246	-	July/2014
Senior Notes Due 2017	Dollar (USD)	7.0%	658,954	720,573	936,704	February/2017
Commercial promissory notes	DI – Interbank Deposits	3.0%	-	-	1,161,971	November/2009
BNDES	URTJLP	2.61%	1,308,034	1,053,337	230,504	October/2025
	Upon fixed	4.5%	242,508	-	-	July/2020
	UMBND	7.1%	38,947	-	-	July/2019
Bank Credit Notes	CDCA	0.6%+CDI	31,378	62,497	-	December/2011
ACC	Dollar (USD)	1.71%	228,229	296,375	143,250	March/2012
Perpetual Notes	Dollar (USD)	8.3%	1,236,209	810,896	1,054,119	November/2015
Resolution 2471 (PESA)	IGP-M	3.95%	674,392	603,504	579,856	April/2023
	Pre fixed	3.0%	114	121	129	October/2025
Rural Credits	Pre fixed	6.7%	92,352	-	-	October/2011
Pre Payments	Dollar (USD) + Libor	6.01%	736,472	976,277	-	February/2016
Credit Notes	125,0% CDI	-	303,719	380,140	-	February/2014
	Dollar (USD)	4.64%	314,105	182,831	-	February/2013
	Pre fixed	19.7%	10,142	-	-	October/2012
Finame	Pre fixed	4.92%	517,842	104,214	1,014	July/2020
	URTJLP	2.75%	187,336	94,775	43,653	March/2021
Others	Diverse	Diverse	74,482	59,272	533,833	Diverse
			7,232,029	5,976,058	4,685,033
Current			(957,134)	(839,529)	(1,452,297)
Non Current			6,274,895	5,136,529	3,232,736

All loans and long-term debt are guaranteed by promissory notes and endorsements, besides other guarantees, such as: i) Credit rights originated from energy contracts (BNDES); ii) CTN and land mortgages; and iii) underlying assets being financed (Finame).

Long-term debt has the following scheduled maturities:

	2011		2010		2009
13 to 24 months		745,454		612,101		389,602
25 to 36 months		762,649		748,966		49,799
37 to 48 months		1,010,797		235,191		83,140
49 to 60 months		777,963		849,737		23,882
61 to 72 months		878,092		113,057		19,447
73 to 84 months		222,289		825,623		16,676
85 to 96 months		453,711		109,472		943,421
Thereafter		1,423,940		1,642,382		1,706,769
		6,274,895		5,136,529		3,232,736

Resolution 2471 – Special Agricultural Financing Program (Programa Especial de Saneamento de Ativos), or PESA

From 1998 to 2000, the Company and its subsidiaries renegotiated their debts related to financing for agricultural costs with several financial institutions, reducing it to annual interest rates below 10%, ensuring the repayment of debt’s principal with assignment and transfer of Treasury Certificates, redeemable at the debt clearing, using the incentives promoted by Central Bank resolution No. 2471 of February 26, 1998. That debt is self-cleared by CTN, as mentioned in explanatory note 6.

F-58

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Senior Notes due on 2014

On August 4, 2009, the indirect subsidiary CCL Finance Limited issued Senior Notes in the international market in accordance with "Regulation S” and “Rule 144A” in the amount of US$ 350 million, which are subject to interest of 9.5% per year payable semiannually in February and August each year, beginning in February 2010.

Senior Notes due on 2017

On January 26, 2007, the wholly-owned indirect controlled Cosan Finance Limited issued Senior Notes in the international market in accordance with the "Regulations S” and “Rule 144A” in the amount of US$ 400 million, which are subject to interest at 7% per annum, payable semiannually in February and August of each year.

Promissory notes

On November 17, 2008, Cosan S.A. issued one series of 44 registered promissory notes. On November 12, 2009, Cosan S.A. fully paid this debt.

BNDES

Refers to the financing of cogeneration projects, as well the financing of greenfields (sugar and ethanol mills).

Perpetual Notes

On January 24 and February 10, 2006, Cosan S.A. issued perpetual notes which are listed on the Luxembourg Stock Exchange - EURO MTF. These notes bear interest at a rate of 8.25% per year, payable quarterly on May 15, August 15, November 15 and February 15 of each year, beginning May 15, 2006. These notes may, at the discretion of Cosan S.A., be redeemed on any interest payment date subsequent to February 15, 2011. The notes are guaranteed by Cosan and by Cosan S.A. Açúcar e Álcool.

On November 5, 2010 the subsidiary Cosan Overseas Limited issued $300,000 of perpetual notes in the foreign market, in accordance with “Regulation S”. These notes bear interest at a rate of 8.25% per year, payable quarterly.

Advances on Foreign Exchange Contracts (“ACC”), Pre payments and Credit Notes

ACC contracts, pre payments and credit notes have been signed with several financial institutions and will be cleared through exports made from 2011 to 2014. These transactions are subject to interest rates ranging from 1.0% to 6.25% per annum payable semiannually and on maturity.

F-59

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Finame

Finame borrowings are financing related to financing of machinery and equipment. These loans are subject to interest rates ranging from 1.15% to 9.73% per annum, payable monthly and are secured by underlying financed assets.

Covenants

The Company and its subsidiaries are subject to certain restrictive financial covenants set forth in existing loans and financing agreements. At March 31, 2011, Cosan was in compliance with its debt covenants.

17. Taxes payable

Cosan Limited is incorporated in Bermuda which has no income taxes. The following relates to Brazilian taxes of Cosan S.A. and its subsidiaries.

	2011			2010			April 1, 2009
ICMS – State VAT		72,265			49,197			24,847
IPI		30,661			6,379			25,776
INSS		25,309			23,891			20,376
PIS		7,229			8,129			6,113
COFINS		33,721			32,077			23,492
Recovery program – REFIS IV		670,645			665,470			-
Recovery program- REFIS (1)		-			-			273,507
Recovery program– PAES (1)		294			409			69,813
Income Tax		20,928			1,945			41,099
Others		23,303			21,219			12,333
		884,355			808,716			497,356
Current		(245,284	)		(215,862	)		(168,596	)
Non Current		639,071			592,854			328,760

(1) These tax recovery programs have been reassessed and transferred to the Tax Recovery from Brazilian Law No 11.941/09 and MP 470/09, except for the recovery program related to PAES – salário educação.

Maturities of long-term taxes payable are as follows:

	2011		2010		April 1, 2009
13 – 24 months		67,848		59,698		44,549
25 - 36 months		61,205		57,933		43,409
37 - 48 months		60,396		54,991		42,644
49 - 60 months		60,008		51,241		28,837
61 - 72 months		52,243		51,026		24,067
73 - 84 months		46,707		44,303		24,067
85 - 96 months		45,799		38,911		24,067
As from 97 months		244,865		234,751		97,120
		639,071		592,854		328,760

F-60

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Tax recovery program – Law 11.941/09 e Provisional Measure 470/09 (“Refis IV”)

On May 27, 2009 and October 13, 2009, Law 11.941 and MP 470 were approved by the Brazilian government creating a tax recovery program, permitting the taxpayer to settle its federal tax debts, previous recovery programs, and other federal taxes under court discussions with discounts on previously charged penalties and interest and in installments. Such discounts generated a gain of R$270,333, recorded in the income statement.

Additionally, it was permitted for the taxpayer to offset a portion of the penalties and interest due with its balance of income tax loss carry forwards. MP470 also allowed taxpayers to use tax losses to offset the principal balance related to IPI taxes.

18. Income taxes and social contribution

Cosan is incorporated in Bermuda which has no income taxes. The following relates to Brazilian income taxes of Cosan S.A. and its subsidiaries.

a) Reconciliation of income and social contribution tax expenses:

	2011			2010
Pretax income		1,182,164			1,505,797
Income tax and social security contribution at nominal rate (34%)		(401,936	)		(511,971	)
Adjustments made for determining the effective rate
Nontaxable income (loss) of the Company		(3,026	)		11,201
Equity pick up		8,563			1,421
Non deductible donations and contributions		(9,131	)		(4,167	)
Tax effect due tax recovery program – REFIS IV		-			59,038
Others		(8,978	)		21,174
Total of deferred and current taxes		(414,508	)		(423,304	)
Effective rate		35.13	%		28.12	%

F-61

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

b)     Deferred income and social contribution tax assets/liabilities:

	2011												2010			2009
Assets	Basis			IRPJ 25%			CSLL 9%			Total
Tax losses:
Tax losses		1,094,220			273,555			-			273,555			217,360			209,859
Negative social contribution		1,106,768			-			99,609			99,609			79,375			75,558
Temporary differences:
Provisions for legal proceedings and other  temporary differences		978,093			244,523			88,030			332,553			339,689			442,064
Temporary differences from IFRS adoption		28,284			7,071			2,545			9,616			49,715			81,737
		3,207,365			525,149			190,184			715,333			686,139			809,218
Liability
Temporary differences:
Exchange rate		(806,438	)		(201,610	)		(72,579	)		(274,189	)		(183,449	)		-
Depreciation		(18,384	)		(4,596	)		-			(4,596	)		-			-
Goodwill		(742,129	)		(185,532	)		(66,791	)		(252,323	)		(114,152	)		-
Temporary differences from IFRS adoption:
Business combination		(1,843,862	)		(460,965	)		(165,948	)		(626,913	)		(564,934	)		(361,548	)
Deemed cost		(366,150	)		(91,573	)		(32,953	)		(124,490	)		(124,490	)		(124,490	)
Others		(671,919	)		(167,982	)		(60,472	)		(228,454	)		(135,383	)		(43,931	)
		(4,448,882	)		(1,112,222	)		(398,743	)		(1,510,965	)		(1,122,408	)		(528,969	)
Total deferred taxes, net		(1,241,517	)		(587,073	)		(208,559	)		(795,632	)		(436,269	)		280,249

In assessing the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities and projected future taxable income in making this assessment. There is no expiration term for the net operating loss carry forwards. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that Cosan S.A. will realize the benefits of these deductible differences at March  31, 2011, as well as the net operating loss carry forwards. The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced. Income tax losses carry forward and social contribution tax losses may be offset against a maximum of 30% of annual taxable income earned, with no statutory limitation period.

F-62

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

19. Provision for judicial demands

	2011		2010		April 1, 2009
Tax		418,744		397,051		1,121,338
Civil		82,599		66,556		77,406
Labor		164,939		148,376		78,421
		666,282		611,983		1,277,165

	Tax			Civil			Labor			Total
Balance at March 31, 2010		397,051			66,556			148,376			611,983
Provision		36,103			61,217			38,818			136,138
Settlements		(6,648	)		(11,278	)		(27,901	)		(45,827	)
Write off		(45,094	)		(59,767	)		(4,418	)		(109,279	)
Addition from acquisition		14,722			3,404			4,882			23,008
Monetary variation		22,610			22,467			5,182			50,259
Balance at March 31, 2011		418,744			82,599			164,939			666,282

Judicial demands deemed as probable loss

a)     Tax

The major tax legal proceeding as of March 31, 2011, 2010 and April 1, 2009 are described as follows:

	2011		2010		April 1, 2009
Credit premium – IPI (i)		-		-		269,157
IPI credits (i)		-		-		92,722
Contribution to IAA (i)		-		-		84,904
IPC – 89 (ii)		80,273		86,503		81,546
Compensation with Finsocial (iii)		183,706		172,960		163,668
ICMS credits (iv)		56,880		60,240		46,226
PIS and COFINS		8,220		21,212		144,830
IPI		20,759		8,357		54,699
Income and social contribution taxes		2,093		789		43,463
Other		66,813		46,990		140,123
		418,744		397,051		1,121,338

(i) The Company and its subsidiaries opted to settle tax related claims in installments as provided by Brazilian Law No 11.941/09 and in MP 470/09 – Tax recovery program. The Company and its subsidiaries used accumulated tax losses to pay the related fines and interest. Consequently there was a full reduction of the claims related to IPI tax credit, as well as the installment payment of other federal taxes, that were recorded as Taxes Payable (Note 17).

F-63

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

(ii) In 1993 subsidiary Cosan CL filed a suit to challenge the balance sheet restatement index (IPC) established by the federal government in 1989, considering that such index did not reflect the actual inflation back then. The use of this index led the Company to supposedly overstate and overpay the income and social contribution taxes. Cosan CL obtained a favorable preliminary court ruling that allowed it to recalculate the financial position, using indexes that accurately measured the inflation over the period. In doing so the company adjusted the amounts of income and social contribution taxes payable and identified that overpayments for both taxes were offset in subsequent years until 1997. Despite the favorable court rulings, tax authorities issued a notice of infringement to the Company challenging all tax offsets performed in 1993 and some offsets in 1994 and 1997 which led the Company to record a provision in relation to those court rulings.

(iii) From June to December of 1994, the subsidiary Cosan CL used tax credits on COFINS taxes based on a favorable court ruling and compensated with other federal taxes. During 2008 the federal tax authorities in Brazil issued an assessment invalidating such compensation and therefore a provision related to this matter was recorded.

(iv) The provision for ICMS credits is comprised of: (a) tax assessment received, in which, despite the defense filed at the administrative and judicial levels, the legal counsel of the Company understand it is more likely than not that a loss will occur, (b) recovery of credits and financial charges on issues in which Company´s management has a differing view from the tax authorities.

b)     Civil and labor claims

The Company and its subsidiaries are parties to a number of civil claims related to (i) indemnity for physical and moral damages; (ii) public civil claims related to sugarcane stubble burning; and (iii) environmental matters.

The Company and its subsidiaries are also parties to a number of labor claims filed by former employees and service providers challenging, among other factors, the payment of additional hours, night shift premium and risk premium, employment inclusion, reimbursement of discounts from payroll, such as social contribution, trade union charges, among others.

F-64

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Judicial demands deemed as possible loss

a)     Tax claims

The main tax claims for which the unfavorable outcome is deemed possible and, therefore, no provision for legal claims was recorded, are as follows:

	2011		2010		April 1, 2009
Withholding income taxes (i)		194,498		182,824		161,440
ICMS – State VAT (ii)		490,896		322,340		178,390
IPI – Federal VAT (iii)		270,817		263,597		75,667
Compensation with IPI – IN 67/98 (iv)		181,292		174,867		157,525
Contribution to IAA – sugar &  ethanol institute		9,107		2,544		73,184
INSS - social security and other (v)		72,616		4,061		1,839
PIS and Cofins (vi)		163,129		143,556		35,953
Other		188,777		117,784		80,686
		1,571,132		1,211,573		764,684

(i)     Tax assessment – withholding income tax

In September 2006 the Federal Revenue Service served another notice of infringement on the Company, this time for failure to withhold and pay income tax at source on capital gains derived from the acquisition of a subsidiary.

(ii) ICMS – State VAT

Refers mainly to (i) Tax Assessment filed in view of the alleged lack of payment of ICMS and non-compliance with accessory obligation, in connection with the partnership and manufacturing upon demand, with Central Paulista Açúcar e Álcool Ltda., between May to December 2006 and May to December 2007; and (ii) ICMS levied on the remittances of crystallized sugar for export purposes. In accordance with the tax agent, such product is classified as semi-finished product and that, in accordance with the ICMS regulation, would be subject to taxation and (iii) ICMS levied on possible differences in terms of sugar and alcohol inventories, arising from magnetic tax files and Inventory Registry Books and (iv) ICMS concerning rate difference due to ethanol sales to companies located in other states, which, subsequently, had their registrations revoked and (v) disallowance of credit resulting from the acquisition of diesel used in the production process.

F-65

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

(iii) IPI – Federal VAT

SRF Normative Instruction n° 67/98 approved the procedure adopted by the industrial establishments which performed remittances without registries and payment of the IPI rate, in regard to transfers of sugarcane carried out between July 6, 1995 and November 16, 1997 and refined sugar between January 14, 1992 and November 16, 1997. Such rule was considered in proceedings filed by the Federal Revenue Secretariat against the Company, the unfavorable outcome of which is deemed as possible, in accordance with the opinion of the Company’s legal advisors.

(iv) Offsets against IPI credits – IN 67/98

SRF Normative Instruction No. 67/98 made it possible to obtain refund of IPI tax payments for sales of refined sugar from January 14, 1992 through November 16, 1997. In view of this rule, the Company applied for offsetting amounts paid during the relevant periods against other tax liabilities. However, the Federal Revenue Service denied its application for both reimbursement and offsetting of such amounts. The Company challenged this ruling in an administrative proceeding.

Upon being notified to pay tax debts resulting from offset transactions in light of certain changes introduced by IN SRF No. 210/02, the Company filed a writ of mandamus and applied for a preliminary injunction seeking to stay enforceability of offset taxes, in an attempt to prevent the tax authorities from demanding the relevant tax debts in court. The preliminary injunction was granted by court.

(v) Social Security Contribution

Refers mainly to tax assessment received and defended by the legal counsel, concerning social security contribution on: (i) stock option plan and (ii) export sales and (iii) resale of materials for companies under common control and suppliers.

(vi) PIS and COFINS

Refers mainly to the reversal of PIS and COFINS credits, provided by Laws 10.637/2002 and 10.833/2003, respectively. Those reversals arise from a differing interpretation of the laws by the Internal Revenue Service in regard to raw materials. Such discussions are still at the administrative level.

F-66

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

b)     Civil and labor

The main civil and labor claims for which the unfavorable outcome is deemed possible are as follows:

	2011		2010		April 1, 2009
Civil		377,608		235,010		145,936
Labor		302,289		255,483		73,080
		679,897		490,493		219,016

20. Commitments

Sales

Considering that Cosan S.A. is mainly engaged in the commodities market, sales are substantially performed at the price on the date of sale. However, Cosan S.A. has several agreements in the sugar market, which undertake to sell volumes of those products in future harvests.

The commitments for the sale of sugar, in tons, March 31, 2011 and 2010 are as follows:

Year	2011		2010
2011		-		2,005,434
2012		2,279,000		1,828,134
Total		2,279,000		3,833,568

F-67

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Purchases

Cosan S.A. has several commitments for the purchase of sugarcane from third parties in order to secure part of its production in subsequent years. The amount of sugarcane to be acquired has been calculated based on an estimate of the quantity to be ground by area. The amount to be paid by Cosan S.A. is determined at the end of each harvest, according to prices published by CONSECANA.

Purchase commitments by harvest in tons on March 31, 2011 and 2010 are as follows:

Year	2011		2010
2011		-		27,029,473
2012		25,129,648		23,600,912
2013		21,998,612		20,112,639
2014		18,060,914		16,345,120
2015		15,448,964		13,667,148
Thereafter		119,467,512		120,129,217
Total		200,105,650		220,884,509

On March 31, 2011, the regular capacity of sugarcane crushing for the next harvest, considering all Cosan S.A. units, is approximately 63 million tons (60 million tons in 2010 – non-audited information).

Cosan S.A. has contracts to purchase industrial equipment for maintenance with the purpose of expanding plants, such as to supply the cogeneration project of electricity, with the amount of R$ 396,536 on March 31, 2011.

Additionally, Cosan S.A. through its indirect subsidiary Rumo Logística has signed a commitment of railcars and locomotives purchasing, and improvements aimed at the expansion of logistics business to be made in future years as follows:

Year	2011		2010
2011		341,647		652,678
2012		178,431		126,892
2013		44,000		94,682
Total		564,078		874,252

Lease Agreements

Operating Leases

Cosan S.A. and its subsidiaries have operating leasing contracts on land used for planting sugarcane and the concession contract to operate the port terminal, which will end within 20 years.

F-68

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

The minimum payments related to these obligations are calculated on a straight-line basis, in accordance with the contracts. The costs for these contracts during the year ended March 31, 2011 and 2010 are as follows:

	2011		2010
Minimum installment		155,800		113,953
Variable installment		186,484		112,990
Total		342,284		226,943

The future minimum rentals to be paid regarding non-cancellable operating leases as of March 31, 2011 and 2010 are:

	2011		2010
Within 1 year		189,530		131,362
More than 1 year, less than 5 years		754,695		470,223
More than 5 years		1,379,313		1,354,501
Total		2,323,538		1,956,086

21. Equity

a)     Common stock

As of March 31, 2011 and March 31, 2010, Cosan Limited’s share capital consists of:

Shareholder	Class A shares and/or BDRs		%		Class B shares		%
Queluz Holding Limited		11,111,111		6.37		66,321,766		68.85
Usina Costa Pinto S.A. Açúcar e Álcool		-		-		30,010,278		31.15
Aguassanta Participações S.A.		5,000,000		2.87		-		-
Gávea Funds		33,333,333		19.12		-		-
Others		124,910,897		71.64		-		-
Total		174,355,341		100.00		96,332,044		100.00

Class B1 shares are entitle their holders to 10 votes per share and Class A shares entitle holders to 1 vote per share.

F-69

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

On September 19, 2008, Cosan S.A. undertook a capital subscription of 55,000,000 common shares which was completed on October 20, 2008.  Since a number of the noncontrolling interests did not exercise their subscription rights, the Company acquired 54,993,482 of the shares for R$879,896, and noncontrolling shareholders acquired the remaining 6,518 shares for R$104.  In connection with this subscription, the shareholders received one Subscription Warrant (Warrant) for each new share.  Each Warrant grants its holder the right to subscribe 0.6 common shares, with the distribution of fractional shares not being permitted. Therefore, the Company received Warrants which are valid through December 31, 2009 to purchase 32,996,089 additional common shares of Cosan S.A.. Since Cosan S.A. is a consolidated subsidiary, the Warrants recorded by Cosan S.A. have been eliminated in consolidation.

On September 14, 2009, the Company sold to third parties 10,000,000 of the Warrants for R$26,147, which resulted in a gain which is recorded as financial income.  At December 31, 2009, 54,987,552 warrants have been exercised, of which 44,993,482 were exercised by the Company, 9,994,070 were exercised by noncontrolling shareholders and the remaining 12,448 warrants expired. The exercise of the warrants of Cosan S.A. resulted in the issuance of 32,992,531 common shares, valued at R$527,880. Of this amount, the Company received 26,996,089 common shares valued at R$431,937.

b) Earnings per share

According to the IAS 33 – Earnings per share, the tables below present the reconciliation of the net income and the weighted average value per share used to the calculation of the basic and diluted earnings per share.

Cosan Limited does not present any dilutive potential shares outstanding, therefore the table below presents the calculation of basic and diluted earnings per share:

Basic and diluted:

	2011		2010
Numerator:
Net income – attributable to Cosan		470,906		706,094
Denominator:
Weighted average shares outstanding		270,687,385		270,687,385
Basic earnings per share	R$	1.74	R$	2.61

F-70

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

22. Gross sales

	2011			2010
Gross revenue from sales of products and services		19,783,250			16,685,884
Indirect taxes and deductions		(1,719,770	)		(1,349,829	)
Net revenue		18,063,480			15,336,055

23. Expense by nature

Reconciliation of expenses by nature

The expenses are presented in the consolidated results by function. The reconciliation of income by nature/purpose for the years ended March 31, 2011 and 2010 is detailed as follows:

a)     Expenses by Nature:

	2011			2010
Raw materials		(3,657,462	)		(3,902,508	)
Resale fuels		(10,084,103	)		(8,393,136	)
Payroll		(901,062	)		(694,939	)
Commercial expenses		(179,283	)		(221,332	)
Depreciation and amortization		(742,307	)		(644,635	)
Other expenses		(1,157,312	)		(779,183	)
		(16,721,529	)		(14,635,733	)

b)     Segregated by:

	2011			2010
Cost of goods sold		(15,150,079	)		(13,271,331	)
Selling		(1,026,000	)		(862,726	)
General & Administrative		(545,450	)		(501,676	)
		(16,721,529	)		(14,635,733	)

F-71

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

24. Financial results, net

	2011			2010
Financial expenses
Interest		(586,887	)		(556,466	)
Monetary variation (loss)		(81,341	)		(64,395	)
Other		(9,136	)		(1,527	)
		(677,364	)		(622,388	)
Financial Income
Interest		63,791			96,521
Monetary variation (income)		34,018			13,374
Investment income		90,345			52,530
Other		603			39,606
		188,757			202,031
Foreign exchange variation, net		282,705			558,977
Derivatives, net
Commodities derivatives		6,524			(186,268	)
Exchange rate and interest derivatives		34,984			517,216
Warrants in associate		13,248			23,873
		54,756			354,821
		(151,146	)		493,441

25. Other income (expense), net

	2011			2010
Other income
Gain on sale of aviation fuel distribution business		-			52,031
Gain on sale of fixed assets		43,708			-
Gain on sale of investments		6,704			-
Scrap and waste sales		6,950			6,417
Rental and leasing income		4,111			6,215
Other income		2,204			11,536
		63,677			76,199
Other expenses
Provision for judicial demands		(23,828	)		(25,829	)
Internal costs on Rumo transaction		(20,319	)		-
Donations		(12,335	)		-
Expenses on Zanin acquisition		(6,517	)		-
Assets’ non realization accrual		(5,696	)		-
Other expenses		(28,810	)		(12,847	)
		(97,505	)		(38,676	)
		(33,828	)		37,523

F-72

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

26. Financial instruments

Financial risk management

a) Overview

The Company is exposed to the following risk related to the use of financial instruments:

· price risk

· foreign exchange rates

· interest rates

· credit risk

· liquidity risk

This note presents information about the Company exposure for which risk above, the object of the Company’s risk management policies, the polices and processes for measurement, risk management and capital management.

b) Risk management structure

The Company has two committees related to risk management: (i) Risk management committee, formed by three Board Director´s members, one of them independent member, that meet, at least once by year, to discuss and determine the Company´s hedge policies; (ii) Executive risk committee, formed by management of the Company, that meets on a weekly basis to analyze the foreign exchange and commodities market trends.  The committee also reviews cover positions and the strategy of pricing exports of sugar in order to reduce the adverse effects of changes in sugar prices and the foreign exchange rate as well as monitoring the liquidity risks and counterparty (credit).

The Company is exposed to market risks, mainly related to the volatility of sugar prices and foreign exchange rates. Management analyzes these risks and uses financial instruments to hedge a portion of the risk exposure.

On March 31, 2011, 2010 and April 1, 2009, fair values related to transactions involving derivative financial instruments with the purpose of hedge or other purposes were measured at market value (fair value) by observables factors such as quoted prices in active markets or discounted cash flows based on market curves and are presented below:

F-73

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

	Notional							Fair value
	March 31,			March 31,		April 1, 2009		March 31,			March 31,			April 1,
	2011			2010				2011			2010			2009
Price risk
Commodity derivatives
Future contracts		1,308,033			1,177,437		423,691		(68,906	)		112,382			9,629
Options contracts		10,364			1,074,579		149,021		(17,484	)		(11,730	)		(6,728	)
Swap contracts		-			100,794		-		-			1,081			-
									(86,390	)		101,733			2,901
Exchange rate risk
Future contracts		(114,204	)		2,103,056		861,787		(117	)		471			7,384
Forward contracts		694,599			963,100		433,462		9,900			36,559			(53,330	)
Options contracts		345,00			671,502		-		-			15,719			-
Swap agreements		-			322,023		570,700		-			-			(6,828	)
									9,783			52,749			(52,774	)
Interest rate risk
Interest derivative		-			518,790				-			(624	)		-
Total									(76,607	)		153,858			(49,873	)
Total assets									55,682			230,561			17,022
Total liabilities									(132,289	)		(76,703	)		(66,895	)

c)     Price risk

This arises from the potential for fluctuations in the market prices of products sold by the Company, mainly raw material sugar - VHP (sugar #11) and white sugar (LIFFE sugar #5). These fluctuations in prices can cause substantial changes in the revenues of the Company.  To mitigate these risks, the Company constantly monitors the markets, seeking to anticipate changes in prices. The positions of the consolidated derivative financial instruments to hedge the price risk of commodities are shown in the table below:

Price risk: commodity derivatives outstanding on March 31, 2011
Derivatives	Long/Short	Market	Agreement		Maturity	Notional			Notional			Fair value
Composition of derivatives financial instruments designated in hedge accounting
Future	Short	NYBOT		#11	1-May-11		23,150	T		26,442			(392	)
Future	Short	NYBOT		#11	1-May-11		208,239	T		200,552			(2,154	)
Future	Short	NYBOT		#11	1-Jul-11		520,877	T		424,617			(43,705	)
Future	Short	NYBOT		#11	1-Oct-11		513,460	T		388,694			(56,734	)
Future	Short	NYBOT		#11	1-Mar-12		139,656	T		121,973			2,827
Sub-total of futures of Sugar Sold							1,405,382	T		1,162,278			(100,159	)
Composition of derivatives financial instruments not designated in hedge accounting
Future	Long	NYBOT		#11	1-May-11		(55,883 T	)		(49,591	)		4,807
Future	Long	NYBOT		#11	1-Jul-11		(7,620 T	)		(6,786	)		66
Future	Long	NYBOT		#11	1-Oct-11		(50,802 T	)		(40,314	)		3,758
Future	Long	NYBOT		#11	1-Mar-12		(84,027 T	)		(49,064	)		22,623
Sub-total of futures of Sugar Purchased							(198,333 T	)		(145,755	)		31,253
Call	Short	NYBOT/OTC		#11	1-Oct-11		43,182	T		985			(6,559	)
Call	Short	NYBOT		#11	1-Oct-11		55,883	T		3,651			(7,826	)
Call	Short	NYBOT		#11	1-Jul-12		101,605	T		1,177			(4,597	)
Sub-total of Call Sold							200,669	T		5,813			(18,981	)
Put	Long	NYBOT/OTC		#11	1-Oct-11		43,182	T		985			574
Put	Long	NYBOT/OTC		#11	1-Oct-11		55,883	T		3,566			923
Sub-total de Put Purchased							99,065	T		4,551			1,497
Total de Commodities										1,026,888			(86,390	)

F-74

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

The fair value of these derivatives was measured by observable factors, such as quoted prices in active markets and, in some cases, by means of models whose assumptions are observable in the market.

d)     Foreign Exchange risk

This arises from the possibility of fluctuations in the exchange rates of the foreign currencies used by the Company for the export revenues of products, imports, debt cash flow and other assets and liabilities denominated in a foreign currency.  The Company uses derivative transactions to manage the risks of cash flow coming from the export revenues denominated in U.S. dollars, net of other cash flows denominated in foreign currency. The table below demonstrates the consolidated positions outstanding on March 31, 2011 of derivatives used to hedge exchange rates:

Exchange risk : exchange derivatives outstanding on March 31, 2011
Derivatives	Long/Short	Market	Agreement	Maturity	Notional	Fair value
Composition of derivatives financial instruments designated in hedge accounting
Forward	Short	OTC/Cetip	NDF	1-Apr-11	166,150	3,279
Forward	Short	OTC/Cetip	NDF	31-May-11	117,782	2,094
Forward	Short	OTC/Cetip	NDF	1-Jul-11	84,645	1,349
Forward	Short	OTC/Cetip	NDF	1-Aug-11	85,300	1,422
Forward	Short	OTC/Cetip	NDF	3-Oct-11	396,618	11,046
Forward	Short	OTC/Cetip	NDF	2-Jan-12	91,075	3,744
Sub-total of Forward Sold					941,570	22,932
Composition of derivatives financial instruments not designated in hedge accounting
Future	Long	BMFBovespa	Commerc. U.S. dollar	2-May-11	(114,204)	(117)
Sub-total of Future Purchased					(114,204)	(117)
Forward	Long	OTC	NDF (Offshore)	4-May-11	(10,780)	(625)
Forward	Long	OTC	NDF (Offshore)	4-Aug-11	(11,014)	(619)
Forward	Long	OTC	NDF (Offshore)	4-Nov-11	(11,246)	(613)
Forward	Long	OTC	NDF (Offshore)	3-Feb-12	(11,489)	(604)
Forward	Long	OTC	NDF (Offshore)	4-May-12	(11,722)	(584)
Forward	Long	OTC	NDF (Offshore)	3-Aug-12	(11,978)	(586)
Forward	Long	OTC	NDF (Offshore)	1-Nov-12	(12,239)	(595)
Forward	Long	OTC	NDF (Offshore)	4-Feb-13	(12,504)	(595)
Forward	Long	OTC	NDF (Offshore)	3-May-13	(12,739)	(571)
Forward	Long	OTC	NDF (Offshore)	2-Aug-13	(12,997)	(534)
Forward	Long	OTC	NDF (Offshore)	4-Nov-13	(13,256)	(493)
Forward	Long	OTC	NDF (Offshore)	4-Feb-14	(13,521)	(462)
Forward	Long	OTC	NDF (Offshore)	2-May-14	(13,743)	(476)
Forward	Long	OTC	NDF (Offshore)	4-Aug-14	(14,002)	(617)
Forward	Long	OTC	NDF (Offshore)	4-Nov-14	(14,261)	(754)
Forward	Long	OTC	NDF (Offshore)	4-Feb-15	(14,497)	(872)
Forward	Long	OTC	NDF (Offshore)	4-May-15	(14,726)	(991)
Forward	Long	OTC	NDF (Offshore)	4-Aug-15	(15,003)	(1,152)
Forward	Long	OTC	NDF (Offshore)	4-Nov-15	(15,254)	(1,291)
Sub-total of Forward Purchased					(246,970)	(13,033)
Total of exchange					580,395	9,783

F-75

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

On March 31, 2011 and 2010, the Company had the following net exposure to the variation of U.S. dollar assets and liabilities denominated in U.S. dollars:

	2011						2010
		R$		US$ (in thousands)				R$		US$ (in thousands)
Bank accounts		78,353			48,108			127,755			71,732
Highly liquid investments		52,102			31,990			82,870			46,530
Restricted cash		126,872			77,898			44,972			25,251
Accounts receivable - foreign		7,556			4,639			148,655			83,467
Foreign currency-denominated loans		(583,068	)		(357,998	)		(829,363	)		(465,672	)
Export pre-payments		(736,472	)		(452,184	)		(976,277	)		(548,161	)
Senior Notes due in 2014		(576,814	)		(354,156	)		(631,246	)		(354,433	)
Senior Notes due in 2017		(658,954	)		(404,589	)		(720,573	)		(404,588	)
Perpetual bonds		(1,236,209	)		(759,016	)		(810,896	)		(455,303	)
Exchange exposure		(3,526,634	)		(2,165,308	)		(3,564,103	)		(2,001,177	)

e)     Effects of hedge accounting

In the beginning of the year ended at March 31, 2011, the Company formally designated its transactions subject to hedge accounting for cash flow hedges from sugar VHP (raw material) export revenue, documenting: (i) the relationship of the hedge, (ii) the Company’s purpose for taking the hedge and its risk management strategy, (iii) identification of the financial instrument, (iv) the transaction or item covered, (v) the nature of the risk being hedged, (vi) a description of the hedging relationship (vii) the demonstration of correlation between the hedge and the object of coverage, and (viii) the prospective analysis of hedge effectiveness. The Company has designated derivative financial instruments of Sugar # 11 (NYBOT or OTC) to cover the risk of price and Non-Deliverable Forwards (NDF) to cover exchange rate risk, as demonstrated in topics (b) and (c) of this Note.

The Company records gains and losses deemed effective for purposes of hedge accounting to a specific account in equity (“other comprehensive income”), until the object of coverage (hedged item) affects the profit and loss. On March 31, 2011, the amounts recorded in other comprehensive income related to hedge accounting are as follows:

				Expected period to affect P&L
Derivative	Market	Risk			2011/12		2010/11		Total
Future	OTC / NYBOT		#11		(353,930	)	2,798			(351,132	)
NDF	OTC / CETIP	USD			134,015		-			134,015
					(219,915	)	2,798			(217,117	)
(-) Deferred income tax					74,771		(951	)		73,819
					(145,144	)	1,847			(143,298	)

F-76

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

During the year ended March 31, 2011, the Company recorded the amount of R$15,568 on its results of operations due to hedged items that would no longer qualify to be designated under hedge accounting. Also, the Company recorded the amount of R$18,679 related to the gains and losses of the hedges’ ineffectiveness during the year ended March 31, 2011.

Cash flow hedge	2011
		-
Balance at March 31, 2010
Gain/(losses) of cash flow hedges for the period
Commodities futures and swap contracts		(572,161	)
Currency forward contracts		179,099
Reclassification adjustments for losses included in the income statement		175,945
Total before tax effect		(217,117	)
Tax effect on gain/(losses) of cash flow hedges for the period – 34%		73,819
Balance at March 31, 2011		(143,298	)

f)     Interest rate risk

The Company monitors fluctuations of the interest rates related to certain loan contracts, mainly those with Libor interest rate risk, and in the event of increased volatility of such rates, it may engage in transactions with derivatives so as to minimize such risks. At March 31, 2011, the Company has not presented interest rate risk derivatives outstanding (US$ 300,000, as March 31, 2010, which fair value was R$624).

g)     Credit risk

A significant portion of sales made by the Company is to a select group of best-in-class counterparts (i.e. trading companies, fuel distribution companies and large supermarket chains).

Credit risk is managed through specific rules of client acceptance including credit ratings and limits for customer exposure, including the requirement of a letter of credit from major banks and obtaining actual warranties on given credit, when applicable. Management believes that the risk of credit is covered by the allowance for doubtful accounts.

F-77

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

The Company buys and sells commodity derivatives in futures and options markets on the New York Board of Trade (NYBOT) and the London International Financial Futures and Options Exchange (LIFFE), as well as in the over-the-counter (OTC) market with selected counterparties. The Company buys and sells foreign exchange derivatives on BM&FBovespa and OTC contracts registered with CETIP (OTC clearing house) with banks Goldman Sachs & Co, Banco Santander S.A., Espirito Santo Investment do Brasil S.A., Deutsche Bank S.A. – Banco Alemão, Banco Bradesco S.A., Banco JP Morgan S.A., Banco Standard de Investimentos S.A., e Banco BTG Pactual S.A..

Guarantee margins – The Company’s derivative operations on commodity exchanges (NYBOT, LIFFE and BM&FBovespa) require an initial guarantee margin. The brokers with which the Company operates on these commodity exchanges offer credit limits for these margins. As of March 31, 2011, the total credit limit used as initial margin was R$136,420 (R$68,646 as of March 31, 2010). As a requirement to trade in BM&FBovespa, the Company posted on March 31, 2011, the amount of R$50,000 (R$83,042 as of March 31, 2010) as guarantee in the form of a settlement bond issued by a first-class banking institution. Over-the-counter derivative transactions of the Company are exempt from margin guarantees.

h) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulties in meeting the obligations associated with its financial liabilities that are settled with cash payments or other financial assets. The approach of the Company's liquidity management is to ensure, as much as possible, which always has sufficient liquidity to meet its obligations to win, under normal and stress, without causing unacceptable losses or risk damaging the reputation of the Company.

i) Fair value

The fair value of financial assets and liabilities is included in the price at which the instrument could be exchanged in a current transaction between parties willing to negotiate, and not in a forced sale or liquidation. The following methods and assumptions were used to estimate the fair value.

Cash and cash equivalents, accounts receivable, accounts payable and other short-term obligations approximate their respective carrying values due largely to short-term maturity of these instruments.

F-78

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

The fair value of marketable securities and bonds is based on price quotations on the date of the financial statements. The fair value of non-negotiable instruments, bank loans and other debts, obligations under finance leases, as well as other non-current financial liabilities are estimated by the discounted future cash flows using rates currently available for debt or deadlines and similar instruments.

The fair market value of Senior Notes due 2014 and 2017, described in note 16, at its market price is 116.25% 108.75% and, respectively, of its face value at 31 March 2011.

The fair market value of Perpetual bonds, described in note 16, at its market price is 100,6%, respectively, of its face value at 31 March 2011.

In respect of other loans and financing, their fair market values substantially approximate the amounts recorded in the financial statements due to the fact that these financial instruments are subject to variable interest rates.

The fair value of financial assets available for sale is obtained through quoted market prices in active markets, if any.

The Company enters into derivative financial instruments with various counterparties, primarily financial institutions with credit ratings of investment grade. The derivatives valued using valuation techniques with observable market data relate mainly to interest rate swaps, foreign exchange contracts and term contracts for commodities futures. The valuation techniques applied more often include pricing models for fixed-term contracts and swaps, with a present value calculations. The models incorporate various data, including credit quality of counterparties, the rates of currency spot and forward, interest rate curves and forward rate curves of the commodity underlying.

Fair value hierarchy

The Company has the following hierarchy to determine and disclose the fair value of financial instruments by the technical evaluation:

· Level 1: quoted prices in a active market to identical assets and liabilities;

· Level 2: other techniques for which all data that have significant effect on the fair value recorded are observable, directly or indirectly; and

· Level 3: techniques that use data that have significant effect on the fair value recorded that are not based on observable market data.

F-79

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Assets and Liabilities measured at fair value	Level 1			Level 2			Total
March 31, 2011
Warrants Radar		-			162,961			162,961
Derivative financial assets		35,577			20,105			55,682
Derivative financial liabilities		(122,084	)		(10,205	)		(132,289	)
		(86,507	)		172,861			86,354
March 31, 2010
Warrants Radar		-			149,713			149,713
Derivative financial assets		128,658			101,903			230,561
Derivative financial liabilities		(51,880	)		(24,823	)		(76,703	)
		76,778			226,793			303,571
April 1, 2009
Warrants Radar		-			125,841			125,841
Derivative financial assets		9,638			7,384			17,022
Derivative financial liabilities		(6,738	)		(60,157	)		(66,895	)
		2,900			73,068			75,968

j) Sensitivity analysis

Following is the sensitivity analysis of the fair value of financial instruments, in accordance with the types of risks deemed to be significant by the Company:

Assumptions for sensitivity analysis

For the analysis, the Company adopted three scenarios, being one probable and two that may have effects from impairment of the fair value of the Company’s financial instruments. The probable scenario was defined based on the futures sugar and US dollar market curves as of March 31, 2011, the same which determines the fair value of the derivatives at that date. Possible and remote scenarios were defined based on adverse impacts of 25% and 50% over the sugar and dollar price curves, which served as basis for the probable scenario.

F-80

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Sensitivity analysis

Following is the sensitivity analysis on the change in the fair value of the Company’s financial derivatives:

		Impacts on the result (*)
	Risk factors	Probable scenario			Possible scenario (25%)			Remote scenario (50%)
Price risk
Commodity derivatives
Futures agreements:
Sale Commitments	Increase in sugar price		(100,159	)		(312,284	)		(625,326	)
Purchase Commitments	Decrease in sugar price		(31,253	)		(44,252	)		(88,504	)
Sales Commitments	Increase in hydrated ethanol
Options agreements:
Call options sold	Increase in sugar price		(18,981	)		(26,125	)		(58,820	)
Put options purchased	Increase in sugar price		1,497			(1,246	)		(1,459	)
Exchange rate risk
Exchange rate derivatives
Futures agreements:
Sale Commitments	R$ / US exchange rate appreciation		(117	)		(28,094	)		(56,187	)
Purchase Commitments	R$ / US exchange rate depreciation		(22,932	)		(220,298	)		(440,597	)
Forward agreements:
Sale Commitments	R$ / US exchange rate appreciation		(13,033	)		(46,871	)		(92,877	)

(*) Result expected for up to 12 months as from March 31, 2011

i) Capital management

The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value.

Occasionally, the Company purchases its own shares on the market, the timing of these purchases depends on market prices.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2011 and 2010.

F-81

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

27. Pension and other post-employment benefits plan

a)     Pension plan

Defined benefit

The Company’s subsidiary Cosan CL has a noncontributory defined benefit pension plan (Previd Exxon) covering substantially all of its employees upon their retirement.

Defined contribution

The Company, through its subsidiary Cosan Alimentos S.A. ("Cosan Alimentos") sponsors a defined contribution plan, for all employees of that subsidiary. The Company does not have a legal or constructive obligation to pay further contributions if the fund does not have sufficient assets to pay all benefits owed.

During the years ended March 31, 2011 and 2010, the amount of contributions totaled R$4,701 and R$5,407 respectively.

b)     Actuarial liability

The actuarial liability on Previd Exxon demonstrated in non-current liabilities at March 31, 2011 amounting to R$24,380 ($0 in 2010 and R$ 65,108 on April 1, 2009).

Reconciliation of present value of defined benefit obligation and the fair value of plan assets, with assets and liabilities recognized on the balance sheet:

	2011			2010
Present value of actuarial obligation at beginning of the year		(325,534	)		(362,339	)
Interest cost		(35,107	)		(32,583	)
Current service cost		(4,445	)		(5,478	)
Benefits paid		24,637			18,985
Actuarial gain (loss) on obligation at beginning of the year		(43,374	)		55,881
Present value of actuarial obligation at end of the year		(383,823	)		(325,534	)
Fair value of plan assets at beginning of the year		347,703			297,231
Expect return on plan assets		35,918			31,046
Contribution received by the fund		8,702			8,403
Benefits paid		(24,637	)		(18,985	)
Gain in fair value of assets		(8,243	)		30,008
Fair value of plan assets at end of the year		359,443			347,703
Present value of liabilities in excess of fair value of assets		(51,703	)		(61,788	)
Actuarial gains and losses unrecognized		27,323			61,788
Actuarial liability		(24,380	)		-

F-82

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Total expense recognized in profit or loss:

Expense recognized in profit or loss	2011			2010
Current service cost		(4,445	)		(5,478	)
Interest on obligation		(35,107	)		(32,583	)
Curtailment gain		-			-
Expected return on plan assets		35,918			31,046
		(3,634	)		(7,015	)

Total amount recognized as other comprehensive income:

	2011			2010
Amount accumulated at 1 April		(42,056	)		-
Unrecognized gains		29,447			(63,721	)
Deferred income tax		(10,012	)		21,665
Amount accumulated at 31 March		(22,621	)		(42,056	)

Plan assets include:

	2011					2010
	Value		Percentage			Value		Percentage
CDBs – Bank deposits		268,864		74.80	%		261,690		74.83	%
Equity securities of Brazilian Public Entities		90,580		25.20	%		88,023		25.17	%
Total		359,444		100	%		349,713		100	%

Plan assets are represented by financial assets with quoted prices in an active market and therefore are included as a Level 1 fair value type. The total expected rate of return on assets is calculated based on market expectations existing at that date applicable to the period over which the obligation should be liquidated. These expectations are reflected in the following main assumptions.

The main assumptions used to determine the pension benefit obligations of the Company are as follows:

Defined benefit plan	2011	2010
Actuarial valuation method	Project unit credit	Project unit credit
Mortality table	AT 83 segregated by sex, decreased by 10%	AT 83 segregated by sex, decreased by 10%
Discount rate for actuarial liability	Interest: 10.77% p.a. + inflation: 4.50% p.a.	Interest: 11.08% p.a. + inflation: 4.50% p.a.
Expected rate of return on plan assets	Interest: 11.20% p.a. + inflation: 4.50% p.a.	Interest: 10.48% p.a. + inflation: 4.50% p.a.
Salary growth rare	6.07% + inflation: 4.50% p.a.	6.07% + inflation: 4.50% p.a.
Rate in increase of estimated benefits	0.00% p.a. + inflation: 4.50% p.a.	0.00% p.a. + inflation: 4.50% p.a.

During the year ended March 31, 2011 contributions to Previd Exxon – Sociedade Previdência Privada totaled R$ 8,702 (R$ 8,403 on March 31, 2010).

The Company expects contributions at the amount of R$ 9,458 to be paid in relation to its defined benefit plan in 2012.

F-83

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

28. Shared-based payments

In the ordinary and extraordinary general meeting held on August 30, 2005, the guidelines for the outlining and structuring of a stock option plan for Cosan S.A. officers and employees were approved, thus authorizing the issue of up to 5% of shares comprising Cosan S.A. share capital. This stock option plan was outlined to attract and retain services rendered by officers and key employees, offering them the opportunity to become shareholders of Cosan S.A.. On September 22, 2005, Cosan S.A. board of directors approved the distribution of stock options corresponding to 4,302,780 common shares to be issued or treasury shares held by Cosan S.A. related to 3.25% of the share capital at the time, authorized by the annual/extraordinary meeting. The remaining 1.75% remained to be distributed. On September 22, 2005, the officers and key employees were informed regarding the key terms and conditions of the share-based compensation arrangement.

On September 11, 2007, the board of directors approved an additional distribution of stock options, in connection with the stock option plan mentioned above, corresponding to 450,000 common shares to be issued or purchased by Cosan S.A. related to 0.24% of the share capital at September 22, 2005. The remaining 1.51% may still be distributed.

On August 7, 2009, the board of directors approved an additional distribution of stock options, in connection with the stock option plan mentioned above, corresponding to 165,657 common shares to be issued or purchased by Cosan S.A., due to changing in the management at that date.

According to the market value at the date of issuance, the exercise price is R$ 6.11 per share, without any discount. The exercise price was calculated before the valuation mentioned above based on an expected private equity agreement was not achieved. The options can be exercised after a waiting period of one year, considering a maximum percentage of 25% per annum of the total stock options offered by Cosan S.A. within a period of 5 years.

The exercise of options may be settled only through issuance of new common shares or treasury shares.

The employees that leave Cosan S.A. before the vesting period will forfeit 100% of their rights. However, if the employment is terminated by Cosan S.A. without cause, the employees will have right to exercise 100% of their options of that particular year plus the right to exercise 50% of the options of the following year.

On March 31, 2011 all stock options related to that plan were exercised by issuance of new shares.

F-84

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

The number and weighted average exercise price of stock options are the following:

	Shares			Weighted average exercise price
Outstanding April 1, 2009		1,470,832			6.11
Exercised (July 17, 2009)		(224,819	)		6.11
Option granted  (August 8, 2009)		165,657			6.11
Exercised (October 10, 2009)		(169,500	)		6.11
Exercised (December 15, 2009)		(571,194	)		6.11
Exercised (March 29, 2010)		(17,000	)		6.11
Outstanding March 31, 2010		653,976			6.11
Exercised (July 29, 2010)		(449,819	)		6.11
Exercised (September 17, 2010)		(91,717	)		6.11
Exercised (March 4, 2011)		(112,440	)		6.11
Outstanding March 31, 2011		-			-

The fair value of share-based awards was estimated using a binominal model with the following assumptions:

	Options granted on September 22, 2005			Options granted on September 11, 2007			Options granted on August 7, 2009
Grant price		6.11			6.11			6.11
Expected life (in years)		7.5			7.5		Immediate
Interest rate		14.52	%		9.34	%		(1	)
Expected Volatility		34.00	%		46.45	%		(1	)
Expected Dividend yield		1.25	%		1.47	%		(1	)
Weighted-average fair value at grant date		12.35			18.19			(1	)

(1) The options were fully vested at the date of issuance so the fair value was the quoted market price as of the grant date

Expected Term – Cosan S.A. expected term represents the period that Cosan S.A. share-based awards are expected to be outstanding and was determined based on the assumption that the officers will exercise their options when the exercise period is over. Therefore, this term was calculated based on the average of 5 and 10 years. Cosan S.A. does not expect any forfeiture as those options are mainly for officers, whose turnover is low.

Expected Volatility – For the options granted on September 22, 2005Cosan S.A. had its shares publicly-traded for less than 6 months as of April 30, 2006. Therefore, Cosan S.A. opted to substitute the historical volatility by an appropriate global industry sector index, based on the volatility of the share prices, and considering it as an assumption in its valuation model. Cosan S.A. has identified and compared similar public entities for which share or option price information is available to consider the historical, expected, or implied volatility of those entities’ share prices in estimating expected volatility based on global scenarios. For the options granted on September 11, 2007 Cosan S.A. used the volatility of its shares as an assumption in its valuation model since Cosan S.A. IPO in Brazil, in 2005.

F-85

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

Expected Dividends – As Cosan S.A. was a relatively new public entity, the expected dividend yield was calculated based on the current value of the stock at the grant date, adjusted by the average rate of the return to shareholders for the expected term, in relation of future book value of the shares.

Risk-Free Interest Rate – Cosan S.A. bases the risk-free interest rate used the SELIC - Special System Settlement Custody.

29. Segment information

a)     Segment information

The following information about segments is based upon information used by Cosan’s senior management to assess the performance of operating segments and to decide on the allocation of resources. The Company presents three segments: Sugar and Ethanol (“S&E”), Fuel distribution and lubricants (“CCL”) and sugar logistics (“Rumo”).

The S&E segment is primarily engaged in the production and marketing of a variety of products derived from cane sugar, including raw sugar (VHP), anhydrous and hydrated ethanol, and activities related to energy cogeneration from sugar cane bagasse.

The CCL segment includes the distribution and marketing of fuels and lubricants, mainly through franchised network of service stations under the brand "Esso" throughout the national territory.

The Rumo segment provides logistics services for the transport, storage and port lifting of sugar for both the S&E segment and third parties.

F-86

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

The following selected information result and segment assets that were measured in accordance with the accounting practices used in the preparation of consolidated information:

	2011
	S&E			CCL			RUMO			Adjustment and elimination			Consolidated
Financial position:
Property, plant and equipment		5,988,670			1,059,927			931,927			-			7,980,524
Intangible		2,298,743			1,232,546			358,286			-			3,889,575
Loans, net of cash and cash equivalents		(5,396,096	)		(450,632	)		(99,829	)		(13,692	)		(5,960,249	)
Other assets and liabilities, net		4,108,146			46,973			(173,826	)		(2,562,446	)		1,418,847
Total asset  (net of liabilities) allocated by segment		6,999,463			1,888,814			1,016,558			(2,576,138	)		7,328,697
Total asset		16,190,023			4,070,147			1,713,112			(2,760,845	)		19,212,437
Income statements (12 months):
Net sales		6,389,178			11,795,277			448,003			(568,978	)		18,063,480
Domestic market		3,678,207			11,795,277			448,003			(568,978	)		15,352,509
External market		2,710,971			-			-			-			2,710,971
Gross profit		1,988,662			781,120			131,469			12,150			2,913,401
Selling general and administrative expenses		(961,407	)		(575,008	)		(28,951	)		(6,084	)		(1,571,450	)
Other income (expense)		(65,415	)		31,777			9,936			(10,126	)		(33,828	)
Financial result, net		(101,755	)		(57,980	)		13,047			(4,458	)		(151,146	)
Income tax and social contribution		(305,977	)		(65,666	)		(42,865	)		-			(414,508	)
Net income		833,343			114,243			62,543			(242,473	)		767,656
Other selected data:
Additions to PP&E and biological assets (cash)		2,817,195			93,835			126,189			-			3,037,219
Depreciation and amortization  (including biological assets noncash effect)		1,266,142			72,701			20,157			-			1,359,000

	2010
	S&E			CCL			RUMO			Adjustment and elimination			Consolidated
Financial position:
Property, plant and equipment		4,795,522			1,016,263			302,745			-			6,114,531
Intangible		2,207,198			1,255,034			363,135			-			3,825,367
Loans, net of cash and cash equivalents		(4,345,015	)		(444,964	)		(107,199	)		31,886			(4,865,292	)
Other assets and liabilities, net		3,611,383			100,095			(92,671	)		(2,201,486	)		1,417,320
Total asset  (net of liabilities) allocated by segment		6,269,088			1,926,428			466,010			(2,169,600	)		6,491,926
Total asset		14,492,261			3,690,368			806,394			(2,571,781	)		16,417,242
Income statements (12 months):
Net sales		5,380,134			10,145,054			158,249			(347,382	)		15,336,055
Domestic market		4,648,436			10,145,054			158,249			(347,382	)		14,604,357
External market		731,698			-			-			-			731,698
Gross profit		1,341,599			692,732			30,393			-			2,064,724
Selling general and administrative expenses		(846,306	)		(490,041	)		(18,111	)		(9,944	)		(1,364,402	)
Gain on tax recovery program		270,333			-			-			-			270,333
Other income (expense)		(24,237	)		102,193			4,962			(45,395	)		37,523
Financial result, net		433,293			22,923			(1,057	)		38,282			493,441
Income tax and social contribution		(327,363	)		(88,245	)		(7,696	)		-			(423,304	)
Net income / (losses)		1,111,283			153,972			11,917			(194,679	)		1,082,493
Other selected data:
Additions to PP&E and biological assets (cash)		2,240,909			156,580			147,943			-			2,545,432
Depreciation and amortization (including biological assets noncash effect)		1,040,532			73,261			14,167			-			1,127,960

F-87

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

All non-current assets of the Company are located in Brazil.

b)     Detailed net sales per segment

	2011			2010
S&E
Sugar		3,853,404			3,377,832
Ethanol		2,203,737			1,747,646
Cogeneration		194,889			93,583
Other		137,148			161,073
		6,389,178			5,380,134
CCL
Fuels		10,902,267			9,437,316
Lubricants		822,420			634,045
Other		70,590			73,693
		11,795,277			10,145,054
Rumo
Port lifting		118,139			142,120
Logistics		305,780			16,129
Other		24,084			-
		448,003			158,249
Adjustment/elimination		(568,978	)		(347,382	)
Total		18,063,480			15,336,055

c)     Net sales per region

The percentage of net sales by geographic area for the years ended are as follows:

	2011			2010
Brazil		72.63	%		86.40	%
Europe		24.93	%		9.20	%
Latin America (Except Brazil)		0.20	%		2.80	%
Middle east and Asia		1.48	%		1.20	%
North America		0.74	%		0.30	%
Other		0.02	%		0.10	%
Total		100.0	%		100.0	%

The net sales from segments CCL and Rumo are derived only from the domestic market (Brazil), with no revenue from foreign customers.

F-88

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

d)     Concentration of customers

S&E

There are several clients in this segment, one of which represents more than 10% of the segment net sales during 2011 and 2010 - the SUCDEN Group (25% and 17%, respectively).

CCL

In this segment there are no clients that represent more than 10% of the net sales.

Rumo

In 2011, 55% of the segment net sales were generated from sales to the S&E segment (33% in 2010), with another customer with revenues of more than 10% of this segment, Sucden Group representing 11% (14% in 2010).

30. Reconciliation between USGAAP and IFRS as of and for the year ended March 31, 2010 (not required by IFRS)

The Company’s consolidated financial statements as of and for the year ended March 31, 2011 have been prepared in accordance with IFRS, which differs in certain significant respects from accounting principles generally accepted in the United States of America (“US GAAP”).   The Company previously prepared and published US GAAP consolidated financial statements for use in its annual report to shareholders on Form 20-F that is filed with the United States Securities and Exchange Commission (“SEC”).   In connection with the Company’s transition to IFRS, and disclosed required by the SEC in such situations, the fhe following tables present a reconciliation of the Company’s equity as of April 1, 2009 and March 31, 2010 and consolidated net income for the year ended March 31, 2010 as presented under US GAAP to that reported under IFRS.  Amounts are presented in Brazilian reais.

F-89

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

a) Reconciliation of equity

			March 31, 2010			April 1, 2009
	Note
US GAAP equity (U.S. dollars)				3,683,056			2,140,765
Exchange rate at year end				1.7810			2.3152
US GAAP equity in reais				6,559,522			4,956,299
IFRS adjustments:
Biological assets		a		(143,431	)		(188,302	)
Business combinations		b		(274,808	)		(516,170	)
Deemed cost		c		366,151			366,151
Borrowing costs		d		(175,185	)		(132,174	)
Warrants on equity method investment		e		149,713			125,841
Investment property in associate		f		67,691			44,868
Sale leaseback		g		182,533			188,866
Other adjustments				(15,947	)		7,514
Deferred income tax on IFRS adjustments		h		(224,313	)		(184,966	)
IFRS equity				6,491,926			4,667,927

b) Reconciliation of income

			March 31, 2010
	Note
US GAAP net income (U.S. dollars)				331,859
Average exchange rate for the period				1.8662
US GAAP net income				619,316
IFRS adjustments:
Biological assets		a		44,871
Business combinations		b		140,314
Borrowing costs		d		(43,011	)
Warrants on equity method investment		e		23,873
Investment property in associate		f		22,823
Sale leaseback		g		(6,333	)
Other adjustments				(27,377	)
Deferred income tax on IFRS adjustments		h		(68,382	)
IFRS net income				706,094

The significant adjustments from US GAAP as a consequence of the adoption of IFRS are described as follows:

a)     Biological assets

According to the IAS 41, biological assets of Cosan S.A. are measured at fair value at each reporting period, using the discounted cash flow method.

F-90

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

In accordance with US GAAP, the biological assets were recorded at their historical cost less amortization and were classified and presented in the statement of financial position as inventories or fixed assets. The costs classified in inventories related to maintenance costs of the crop to be harvested within 12 months, and the costs recognized in fixed assets related to the costs of the initial crop of sugarcane plants, which are amortized over five years, the estimated useful life.

The negative adjustment of biological assets to fair value as of the IFRS transition date was not considered an indicator of impairment of the previous carrying value of the previously classified inventory or fixed assets under US GAAP. Rather, such previous asset values were deemed recoverable as of April 1, 2009 based on the estimated future cash flows of all crops to be grown on the land as they are used to produce sugar and ethanol, as compared to the current fair value of biological assets which is based on the current status on crops in process.

b)     Business combinations

Under IFRS 3, all assets and liabilities of businesses acquired after the transition date, including any intangible assets are valued at their fair value at the date of transaction. In addition, purchases of businesses with payment in shares or other securities issued by the purchaser must also be measured at fair value for purposes of determining the purchase price, which consequently affects the value of goodwill calculated. Cosan considered the transition date for application of IFRS 3 to be December 1, 2008, the date of acquisition of Cosan CL.

The buyer must recognize contingent consideration at fair value at the acquisition date as part of the consideration for obtaining control of the acquiree.

 If the Company's interest in the fair value of identifiable assets and liabilities acquired exceeds the acquisition cost, such excess is recorded as an immediate gain in income.

Business combinations are treated in a similar manner under US GAAP, but as the primary GAAP used in the preparation of these IFRS financial statements was Brazilian GAAP, (i) business combinations effects accounted for under BR GAAP prior to December 1, 2008 have been reversed and (ii) goodwill amortization effects accounted for under BR GAAP prior to March 31, 2009 have been included.

c)     Deemed cost

Cosan S.A. elected to measure its farming land at fair value at the date of transition to IFRS. The adjustment was recorded against equity net of deferred taxes.

F-91

COSAN LIMITED

Notes to the consolidated financial statements (Continued)

Years ended March 31, 2011 and 2010

(In thousand Reais, unless otherwise stated)

d)     Borrowing costs

Under US GAAP, up to March 31, 2010, the Company capitalized borrowing costs, but as the primary GAAP used in the preparation of these IFRS financial statements was Brazilian GAAP, in which borrowing costs were not capitalized, Cosan has applied the transitional provisions in IAS 23 Borrowing Costs and capitalizes borrowing costs on assets where construction was commenced on or after the date of transition.

e)     Warrants on equity method investment

Cosan S.A. holds warrants on Radar, exercisable at any time up to maturity (August 2018). Such warrants permit Cosan S.A. to purchase additional shares, equivalent to 20% of total shares as of the date of exercise. The exercise of warrants will not change the classification of this investment as an equity investment. Those warrants were not considered to be a financial instrument under US GAAP up to March 31, 2010 as they cannot be net settled. Radar is a privately owned entity.   Under IFRS the warrants are treated as a separate financial instrument measured at fair value.

f)     Investment property in associate

Radar is an equity method investment of the Company that invests in farming land for rent and future appreciation. Under US GAAP, up to March 31, 2010, such land was recorded at cost. With the adoption of IFRS, Radar treated such land as investment property and elected to measure it at fair value. Fair value is measured at each reporting date, impacting the equity income of the Company in regard to Radar.

g)     Sale leaseback

On December 30, 2008, Cosan sold land to Radar resulting in a gain of R$188,866. The Company leased back the land. Under US GAAP this gain was deferred and was being amortized over the 19 year average term of the leases.

Under IFRS, since the sale price was based on the fair value of the land the gain was recorded on the transition date against accumulated earnings.

h)     Deferred income taxes

As required by IAS 12, all deferred income taxes have been reclassified to non-current assets or liabilities. Also, the balance of deferred income taxes was impacted by the adjustments previously mentioned.

F-92

EX-2.5

Exhibit 2.5

EXECUTION COPY

COSAN OVERSEAS LIMITED,

as Issuer

COSAN S.A. INDÚSTRIA E COMÉRCIO,

as Guarantor

THE BANK OF NEW YORK MELLON,

as Trustee, Registrar, New York Paying Agent and Transfer Agent

THE BANK OF NEW YORK MELLON (LONDON BRANCH),

as London Paying Agent

THE BANK OF NEW YORK MELLON (LUXEMBOURG) S.A.,

as Paying Agent and Transfer Agent

____________________

INDENTURE

Dated as of November 5, 2010

____________________

8.25% Perpetual Notes

TABLE OF CONTENTS

Page

ARTICLE 1

Definitions and Other Provisions of General Application

Section 1.01.  Definitions	1
Section 1.02.  Rules of Construction	14
Section 1.03.  Table of Contents; Headings	14
Section 1.04.  Form of Documents Delivered to Trustee	14
Section 1.05.  Acts of Holders	15

ARTICLE 2

The Notes

Section 2.01.  Form and Dating	16
Section 2.02.  Execution, Authentication and Delivery	16
Section 2.03.  Transfer Agents, Registrar and Paying Agents	18
Section 2.04.  Paying Agent to Hold Money in Trust	19
Section 2.05.  Payment of Principal and Interest; Principal and Interest Rights Preserved	19
Section 2.06.  Holder Lists	20
Section 2.07.  Transfer and Exchange	20
Section 2.08.  Book-Entry Provisions for the Global Note	22
Section 2.09.  Replacement Notes	23
Section 2.10.  Temporary Notes	23
Section 2.11.  Cancellation	23
Section 2.12.  Defaulted Interest	24
Section 2.13.  Common Code and ISIN Numbers	24
Section 2.14.  Open Market Purchases	24

ARTICLE 3

Redemption

Section 3.01.  Right of Redemption	24
Section 3.02.  Applicability of Article	26
Section 3.03.  Election to Redeem; Notice to Trustee	26

Section 3.04.  Notice of Redemption by the Company	26
Section 3.05.  Deposit of Redemption Price	27
Section 3.06.  Effect of Notice of Redemption	27

ARTICLE 4

Covenants

Section 4.01.  Payment of Principal and Interest Under the Notes	27
Section 4.02.  Maintenance of Office or Agency	27
Section 4.03.  Money for Note Payments to Be Held in Trust	28

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Section 4.04.  Maintenance of Corporate Existence	29
Section 4.05.  Payment of Taxes and Claims	29
Section 4.06.  Payment of Additional Amounts	30
Section 4.07.  Reporting Requirements	31
Section 4.08.[Intentionally Omitted].	32
Section 4.09.  Negative Covenants of the Company.	33
Section 4.10.  Repurchase upon Change of Control	33
Section 4.11.  Limitation on Liens	34
Section 4.12.  Notes Guaranty by CCL	36
Section 4.13.  Waiver of Certain Covenants	37

ARTICLE 5

Consolidation, Merger, Conveyance, Transfer or Lease

Section 5.01.  Limitation on Consolidation, Merger or Transfer of Assets.	37
Section 5.02.  Successor Substituted	38
Section 5.03.  Notes to Be Secured in Certain Events	38

ARTICLE 6

Events of Default and Remedies

Section 6.01.  Events of Default	39
Section 6.02.  Acceleration of Maturity, Rescission and Amendment	40
Section 6.03.  Collection Suit by Trustee	41
Section 6.04.  Other Remedies	42
Section 6.05.  Trustee May Enforce Claims Without Possession of Notes	42
Section 6.06.  Application of Money Collected	42
Section 6.07.  Limitation on Suits	42
Section 6.08.  Rights of Holders to Receive Principal and Interest	43
Section 6.09.  Restoration of Rights and Remedies	43
Section 6.10.  Trustee May File Proofs of Claim	43
Section 6.11.  Delay or Omission Not Waiver	43
Section 6.12.  Control by Holders	44
Section 6.13.  Waiver of Past Defaults and Events of Default	44
Section 6.14.  Rights and Remedies Cumulative	44
Section 6.15.  Waiver of Stay or Extension Laws	44

ARTICLE 7

Trustee and Agents

Section 7.01.  Duties of Trustee	45
Section 7.02.  Rights of Trustee and Agents	46
Section 7.03.  Individual Rights of Trustee and Agents	47
Section 7.04.  Trustee’s Disclaimer	47
Section 7.05.  Notice of Defaults and Events of Default	48
Section 7.06.  Compensation and Indemnity	48
Section 7.07.  Replacement of Trustee	49

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Section 7.08.  Successor Trustee by Merger	50
Section 7.09.  Eligibility; Disqualification	50

ARTICLE 8

Discharge of Indenture; Defeasance

Section 8.01.  Discharge of Liability on Notes	51
Section 8.02.  Conditions to Defeasance	51
Section 8.03.  Application of Trust Money	52
Section 8.04.  Repayment to Company	53
Section 8.05.  Indemnity for U.S. Governmental Obligations	53
Section 8.06.  Reinstatement	53

ARTICLE 9

Amendments

Section 9.01.  Without Consent of Holders	53
Section 9.02.  With Consent of Holders	54
Section 9.03.  Notation on or Exchange of Notes	55
Section 9.04.  Trustee to Sign Amendments	55
Section 9.05.  Payment for Consent	56

ARTICLE 10

Guarantee

Section 10.01.  The Notes Guaranty	56
Section 10.02.  Guaranty Unconditional	56
Section 10.03.  Discharge; Reinstatement	57
Section 10.04.  Waiver by the Guarantors	57
Section 10.05.  Subrogation and Contribution	57
Section 10.06.  Stay of Acceleration	57
Section 10.07.  Limitation on Amount of Guaranty	57
Section 10.08.  Execution and Delivery of Guaranty	58
Section 10.09.  Release of Guaranty	58

ARTICLE 11

Meetings Of Holders

Section 11.01.  Purposes for Which Meetings May Be Called	58
Section 11.02.  Manner of Calling Meetings	59
Section 11.03.  Call of Meetings by Company or Holders	59
Section 11.04.  Who May Attend and Vote at Meetings	59
Section 11.05.  Regulations May Be Made by Trustee; Conduct of the Meeting; Voting Rights; Adjournment	59
Section 11.06.  Voting at the Meeting and Record to Be Kept	60
Section 11.07.  Exercise of Rights of Trustee or Holders May Not Be Hindered or Delayed by Call of Meeting	60
Section 11.08.  Procedures Not Exclusive	60

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Section 11.09. Rules by Trustee and Agents 61

ARTICLE 12

Substitution of the Issuer

Section 12.01.  Substitution of the Issuer 61

ARTICLE 13

Miscellaneous

Section 13.01.  Provisions of Indenture and Notes for the Sole Benefit of Parties and Holders of Notes	62
Section 13.02.  Notices	62
Section 13.03.  Officers’ Certificate and Opinion of Counsel as to Conditions Precedent	64
Section 13.04.  Statements Required in Officers’ Certificate or Opinion of Counsel	64
Section 13.05.  Currency Indemnity	65
Section 13.06.  No Recourse Against Others	65
Section 13.07.  Legal Holidays	66
Section 13.08.  Governing Law	66
Section 13.09.  Consent to Jurisdiction; Waiver of Immunities	66
Section 13.10.  Successors and Assigns	67
Section 13.11.  Multiple Originals	67
Section 13.12.  Severability Clause	67
Section 13.13.  Force Majeure	67

EXHIBITS:

EXHIBIT A	–	Form of Note
EXHIBIT B	–	Form of Supplemental Indenture

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INDENTURE, dated as of November 5, 2010, among COSAN OVERSEAS LIMITED, an exempted company incorporated with limited liability under the laws of the Cayman Islands, as the issuer (the “Company”), COSAN S.A. INDÚSTRIA E COMÉRCIO, as the guarantor (“Cosan”), THE BANK OF NEW YORK MELLON, as Trustee, New York Paying Agent, Transfer Agent and Registrar, THE BANK OF NEW YORK MELLON (LONDON BRANCH), as London Paying Agent and THE BANK OF NEW YORK MELLON (LUXEMBOURG) S.A., as Paying Agent and Transfer Agent.

RECITALS

The Company has duly authorized the issue of 8.25% Perpetual Notes (the “Notes”), initially in an aggregate principal amount of U.S.$300,000,000 pursuant to Regulation S of the Securities Act (as defined herein), and has duly authorized the execution and delivery of this Indenture.

All things necessary have been done to make the Notes when executed and authenticated and delivered hereunder and duly issued, the valid obligations of the Company and Cosan, and to make this Indenture a valid agreement of the Company and Cosan.

In addition, Cosan has duly authorized the execution and delivery of this Indenture as guarantor of the Notes.

Cosan has done all things necessary to make its Notes Guaranty (as defined herein), when the Notes are executed by the Company and authenticated and delivered by the Trustee and duly issued by the Company, the valid obligations of Cosan, and to make this Indenture a valid agreement of Cosan.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Notes by the Holders (as defined herein) thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders, as follows:

ARTICLE 1

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.01. Definitions.

“Act”, when used with respect to any Holder, has the meaning specified in Section 1.05.

“Additional Amounts” has the meaning specified in Section 4.06.

“Advance Transaction” means an advance from a financial institution involving either (i) a foreign exchange contract (ACC – Adiantamento sobre Contrato de Câmbio) or (ii) an export contract (ACE – Adiantamento sobre Contrato de Exportação).

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“Affiliate” means, with respect to any specified Person, (a) any other Person which, directly or indirectly, is in control of, is controlled by or is under common control with such specified Person or (b) any other Person who is a director or officer (i) of such specified Person, (ii) of any subsidiary of such specified Person or (iii) of any Person described in clause (a) above. For purposes of this definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether by contract or otherwise and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Agent” means any Paying Agent, Registrar, Transfer Agent, Authenticating Agent or other agent appointed pursuant to this Indenture.

“Applicable Procedures” means the applicable procedures of Euroclear and Clearstream Banking, in each case to the extent applicable.

“Authenticating Agent” has the meaning specified in Section 2.02.

“Authorized Denomination” has the meaning specified in Section 2.02.

“Bankruptcy Law” means (i) Title 11, United States Code or any similar U.S. federal or state law for the relief of debtors or the administration or liquidation of debtors’ estates for the benefit of their creditors, and (ii) the Brazilian Bankruptcy Law or any similar Brazilian federal or state law for the relief of debtors or the administration or liquidation of debtors’ estates for the benefit of their creditors.

“Board of Directors” means, as the case may be, the Board of Directors (Conselho de Administração) of the Company or any Guarantor, as applicable, or any committee thereof dulyauthorized to act on behalf of such Board of Directors.

“Board Resolution” means a copy of a resolution certified by the Secretary, the Assistant Secretary or another Officer or legal counsel performing corporate secretarial functions of the Company or any Guarantor, as applicable, to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification and delivered to the Trustee.

“Brazil” means the Federative Republic of Brazil.

“Brazilian Bankruptcy Law” means Brazilian Federal Law No. 11,101.

“Brazilian Corporation Law” means Brazilian Federal Law No. 6.404/76, as amended by Brazilian Law No. 9.457/97 and Brazilian Law No. 10.303/01.

“Business Day” means any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in The City of New York, London, or São Paulo, Brazil.

“Capital Lease Obligations” means, with respect to any Person, any obligation which is required to be classified and accounted for as a capital lease on the face of a balance sheet of

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such Person prepared in accordance with GAAP; the amount of such obligation shall be the capitalized amount thereof, determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty.

“Capital Stock” means, with respect to any Person, any and all shares of stock, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated, whether voting or non-voting), such Person’s equity including any preferred stock, but excluding any debt securities convertible into or exchangeable for such equity.

“Cash Equivalents” means

(1)Brazilian reais, U.S. Dollars, or money in other currencies received in the ordinary course of business that are readily convertible into U.S. Dollars;

(2)any evidence of Debt with a maturity of 180 days or less issued or directly and fully guaranteed or insured by Brazil or the United States of America or any agency or instrumentality thereof, provided that the full faith and credit of Brazil or the United States of America is pledged in support thereof;

(3)(i) demand deposits, (ii) time deposits and certificates of deposit with maturities of one year or less from the date of acquisition, (iii) bankers’ acceptances with maturities not exceeding one year from the date of acquisition, and (iv) overnight bank deposits, in each case with any bank or trust company organized or licensed under the laws of Brazil or any political subdivision thereof or the United States or any state thereof having capital, surplus and undivided profits in excess of U.S.$500.0 million whose short-term debt is rated “A-2” or higher by S&P or “P-2” or higher by Moody’s;

(4)repurchase obligations with a term of not more than seven days for underlying securities of the type described in clauses (2) and (4) above entered into with any financial institution meeting the qualifications specified in clause (4) above;

(5)commercial paper rated at least P-1 by Moody’s or A-1 by S&P and maturing within six months after the date of acquisition; and

(6)money market funds at least 95% of the assets of which consist of investments of the type described in clauses (1) through (5) above.

“CCL” means Cosan Combustíveis e Lubrificantes S.A.

“Certificated Notes” means Notes in definitive registered non-global form.

“Change of Control” means:

(1) the merger or consolidation of Cosan with or into another Person or the merger of another Person with or into Cosan or the merger of any Person with or into a Subsidiary of Cosan,

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if Capital Stock of Cosan is issued in connection therewith, or the sale of all or substantially all the assets of Cosan to another Person (in each case, unless such other Person is a Permitted Holder) unless holders of a majority of the aggregate voting power of the Voting Stock of Cosan, immediately prior to such transaction, hold securities of the surviving or transferee Person that represent, immediately after such transaction, at least a majority of the aggregate voting power of the Voting Stock of the surviving Person; or

(2)any “person” or “group” (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act, other than Permitted Holders) is or becomes the “beneficial owner” (as such term is used in Rules 13d-3 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of Cosan; or

(3)occupation of a majority of the seats (other than vacant seats) on the Board of Directors of Cosan by Persons who were neither (i) nominated by the Permitted Holders or the Board of Directors of Cosan nor (ii) appointed by directors so nominated.

For the avoidance of doubt, the consummation of the Joint Venture will not be deemed a Change of Control. Notwithstanding the foregoing, a Change of Control will not be deemed to occur from any Option Exercise if within 360 days after the receipt of any Net Cash Proceeds from such Option Exercise, the Net Cash Proceeds are used to make Permitted Reinvestments.

“Clearing Agency” means one or more of Euroclear, Clearstream, or the successor of either of them, in each case acting directly, or through a custodian, nominee or depository.

“Clearstream Banking” means Clearstream Banking, société anonyme.

“Closing Date” means November 5, 2010 or such later date on which the Notes are issued hereunder.

“Common Depositary” means The Bank of New York Depository (Nominees) Limited or any successor thereto.

“Company” has the meaning set forth in the preamble of this Indenture until replaced by a successor thereof, and, thereafter, includes the successor for purposes of any provision contained herein.

“Company Order” means a written order signed in the name of the Company by a director of the Company.

“Corporate Trust Office” means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered (which office as of the date of this Indenture is located at 101 Barclay Street 4E, New York, New York 10286).

“Cosan” has the meaning set forth in the preamble of this Indenture until replaced by a successor thereof, and, thereafter, includes the successor for purposes of any provision contained herein.

“covenant defeasance option” has the meaning specified in Section 8.01.

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“Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

“CVM” means the Brazilian Securities Commission (Comissão de Valores Mobiliários).

“Debt” means, with respect to any Person, without duplication:

(i)the principal of and premium, if any, in respect of (a) indebtedness of such Person for money borrowed and (b) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable;

(ii)  all Capital Lease Obligations of such Person;

(iii)all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations of such Person and all obligations of such Person under any title retention agreement (but excluding trade accounts payable or other short term obligations to suppliers payable within 180 days, in each case arising in the ordinary course of business);

(iv)all obligations of such Person for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in clauses (i) through (iii) above) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the tenth Business Day following receipt by such Person of a demand for reimbursement following payment on the letter of credit);

(v)  all Hedging Obligations;

(vi)all obligations of the type referred to in clauses (i) through (iv) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any guarantee (other than obligations of other Persons that are customers or suppliers of such Person for which such Person is or becomes so responsible or liable in the ordinary course of business to (but only to) the extent that such Person does not, or is not required to, make payment in respect thereof);

(vii)all obligations of the type referred to in clauses (i) through (v) of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person), the amount of such obligation being deemed to be the lesser of the value of such property or assets or the amount of the obligation so secured; and

(viii)any other obligations of such Person which are required to be, or are in such Person’s financial statements, recorded or treated as debt under GAAP.

“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

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“defeasance trust” has the meaning specified in Section 8.02.

“Downstream Co.” means the downstream company of the Joint Venture which would conduct the supply, distribution and sale of the fuels in Brazil.

“Euroclear” means Euroclear Bank S.A./N.V.

“Event of Default” has the meaning specified in Section 6.01.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“Fitch” means Fitch, Ltd. and its successors.

“GAAP” means (i) International Financial Reporting Standards, (ii) accounting practices generally accepted in the United States or (iii) accounting practices prescribed by the Brazilian Corporation Law, the rules and regulations issued by the CVM and the accounting standards issued by the Brazilian Institute of Independent Accountants (Instituto dos Auditores Independentes do Brasil), in each case as in effect from time to time.

“Global Note” means a Regulation S global Note representing the Notes substantially in the form attached hereto as Exhibit A, which global Note will be offered and sold outside the United States in reliance on Regulation S and deposited with and registered in the name of the Common Depositary for Euroclear and/or Clearstream Banking and is exchangeable for a Certificated Note only in the limited circumstances described herein.

“guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Debt or other obligation of any Person and any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation of such Person (whether arising by virtue of partnership arrangements, or by agreement to keep well, to purchase assets, goods, securities or services, to take or pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for purposes of assuring in any other manner the obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however, that the term “guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “guarantee” used as a verb has a corresponding meaning.

“Guarantor” means (i) Cosan, (ii) upon consummation of the Joint Venture, CCL, (iii) any other entity that provides a Notes Guaranty, and (iv) any successor obligor under any Notes Guaranty pursuant to Section 5.01, in each case unless and until such Guarantor is released from its Notes Guaranty pursuant to this Indenture.

“Hedging Agreement ” means (i) any interest rate swap agreement, interest rate cap agreement or other agreement designed to protect against fluctuations in interest rates, (ii) any foreign exchange forward contract, currency swap agreement or other agreement designed to protect against fluctuations in foreign exchange rates or (iii) any commodity or raw material

6

futures contract or any other agreement designed to protect against fluctuations in raw material prices.

“Hedging Obligations” means, with respect to any Person, the obligations of such Person pursuant to any interest rate swap agreement, foreign currency exchange agreement, interest rate collar agreement, option or futures contract or other similar agreement or arrangement designed to protect such Person against changes in interest rates or foreign exchange rates.

“Holder” or “Noteholder” means the Person in whose name a Note is registered in the Register.

“Indenture” means this Indenture, as amended or supplemented from time to time in accordance with the provisions hereof.

“interest” on a Note means the interest on such Note (including any Additional Amounts payable by the Company in respect of such interest).

“Interest Payment Date” means the Payment Date of an installment of interest on the

Notes.

“issue ” means issue, assume, guarantee, incur or otherwise become liable for; provided, however, that any Debt or Capital Stock of a Person existing at the time such Person becomes aSubsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be issued by such Subsidiary at the time it becomes a Subsidiary; and the term “issuance” has a corresponding meaning.

“Issuer Substitution Documents” has the meaning specified in Section 12.01(a).

“Joint Venture” means (i), pursuant to the agreements dated as of August 25, 2010, the joint venture between Cosan and Shell and their respective subsidiaries whereby (a) Cosan has contributed its sugar and ethanol businesses, energy co-generation business, fuel distribution and retail businesses and its interest in certain ethanol logistics facilities and (b) Shell has contributed its Brazilian fuel distribution and retail businesses and its interest in certain companies involved in, among other things, the research and development of enzymes and the conversion of biomass into ethanol, and will additionally make, a cash contribution, or (ii) any similar or related transaction.

“legal defeasance option” has the meaning specified in Section 8.01(a).

“Lien” means any mortgage, pledge, security interest, conditional sale or other title retention agreement or other similar lien.

“Management Co.” means the management company of the Joint Venture which would be the Joint Venture’s face to the market and would facilitate the building of a unified corporate structure.

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“Marketable Securities” means publicly traded debt or equity securities that are listed for trading on a national securities exchange and that were issued by a corporation with debt securities rated at least “AA-” from S&P or “Aa3” from Moody’s, or the equivalent local rating in Brazil.

“Maturity” means, when used with respect to any Note, the date on which the outstanding principal of and interest on such Note becomes due and payable as therein or herein provided, whether by declaration of acceleration, call for redemption or otherwise.

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

“Net Cash Proceeds” means, with respect to any Option Exercise, the proceeds from such Option Exercise in the form of cash or Cash Equivalents (including (i) payments in respect of deferred payment obligations to the extent corresponding to, principal, but not interest, when received in the form of cash, and (ii) proceeds from the conversion of other consideration received when converted to cash), net of:

(1)fees and expenses related to such Option Exercise, including fees and expenses of counsel, accountants and investment bankers;

(2)provisions for taxes as a result of such Option Exercise taking into account the consolidated results of operations of Cosan and its Subsidiaries;

(3)payments required to be made to repay Debt (other than revolving credit borrowings) outstanding at the time of such Option Exercise that is secured by a Lien on the property or assets sold or conveyed; and

(4)appropriate amounts to be provided as a reserve against liabilities associated with such Option Exercise, including pension and other post-employment benefit liabilities, liabilities related to environmental matters and indemnification obligations associated with such Option Exercise, with any subsequent reduction of the reserve other than by payments made and charged against the reserved amount to be deemed a receipt of cash.

“Notes ” has the meaning specified in the first paragraph of the Recitals in this Indenture and shall be in the form of Note set forth in Exhibit A.

“Notes Guaranty” means the guarantee by the Guarantors of the obligations of the Company under the Notes and this Indenture.

“Offer to Purchase” has the meaning specified in Section 4.10(b).

“Offering Memorandum” means the preliminary offering memorandum and the final offering memorandum prepared by the Company and Cosan in connection with the sale of the Notes.

“Officer” means the president or chief executive officer, any vice president, the chief financial officer, the treasurer or any assistant treasurer, the secretary or any assistant secretary, or any director of the Company or any Guarantor, as applicable, or any other Person duly

8

appointed by the shareholders of the Company or any Guarantor, as applicable, or the Board of Directors to perform corporate duties.

“Officers’ Certificate” means a certificate signed by any director of the Company or any two Officers of the Guarantor, as applicable, and delivered to the Trustee.

“Opinion of Counsel ” means a written opinion of legal counsel of recognized standing (who may be an employee of or counsel to the Company or any Guarantor) and who shall be reasonably acceptable to the Trustee, which opinion is reasonably satisfactory to the Trustee.

“Option Exercise” has the meaning specified in Section 5.01.

“Outstanding” means, when used with respect to Notes, as of the date of determination, all Notes theretofore authenticated and delivered under this Indenture, except:

(i)  Notes theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

(ii)Notes for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee 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 Notes; provided that, if such Notes are to be redeemed pursuant to Article 3, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;

(iii)Notes, except to the extent provided in Sections 8.01 and 8.02, with respect to which the Company has effected legal defeasance and/or covenant defeasance as provided in Article 8; and

(iv)Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture, other than any such Notes in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Notes are held by a protected purchaser in whose hands such Notes are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite principal amount ofOutstanding Notes have given any request, demand, authorization, direction, consent, notice or waiver hereunder, Notes owned by the Company or any of its Affiliates shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, consent, notice or waiver, only Notes which a Responsible Officer of the Trustee has received written notice at its address specified herein of being so owned shall be so disregarded. Notes so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Company, or any other obligor upon the Notes or any of its Affiliates or such other obligor.

“Paying Agent ” means The Bank of New York Mellon, The Bank of New York Mellon (London Branch), The Bank of New York Mellon (Luxembourg) S.A., their respective

9

successors and any other Person authorized by the Company to pay the principal of or interest on any Notes on behalf of the Company hereunder.

“Payment Date” means the date on which payment of interest on and/or principal of the Notes is due.

“Payment Default” has the meaning specified in Section 6.01(d).

“Permitted Business” means any of the businesses in which Cosan and its Subsidiaries (including the Sugar and Ethanol Co. and the Downstream Co.) are engaged on the date of the Option Exercise, and any business reasonably related, incidental, complementary or ancillary thereto.

“Permitted Holders” means any or all of the following:

(1)an immediate family member of Mr. Rubens Ometto Silveira Mello or any Affiliate or immediate family member thereof; and

(2)any Person both the Capital Stock and the Voting Stock of which (or in the case of a trust, the beneficial interests in which) are owned 80% by Persons specified in clause (1).

“Permitted Reinvestment” has the meaning specified in Section 5.01.

“Person” means any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency, department or political subdivision thereof.

“principal” of a Note means the principal amount of such Note (including any Additional Amounts payable by the Company in respect of such principal).

“Proceeding” has the meaning specified in Section 13.09.

“Process Agent” has the meaning specified in Section 13.09.

“Productive Assets” means assets (including capital stock or its substantial equivalent or other investments) that are used or usable by Cosan and its Subsidiaries (including the Sugar and Ethanol Co. and the Downstream Co.) in Permitted Businesses (or in the case of capital stock or its substantial equivalent or other investments that represent direct, or indirect (via a holding company), ownership or other interests held by Cosan or any Subsidiary (including the Sugar and Ethanol Co. and the Downstream Co.) in entities engaged in Permitted Businesses).

“Rating Agency” means S&P, Moody’s or Fitch; or if S&P, Moody’s or Fitch are not making rating of the notes publicly available, an internationally recognized U.S. rating agency or agencies, as the case may be, selected by Cosan and notified to the Trustee in writing, which will be substituted for S&P, Moody’s or Fitch, as the case may be.

“Rating Decline” means that at any time within 90 days (which period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible down

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grade by either Rating Agency) after the date of public notice of a Change of Control or Option Exercise, as applicable, or of Cosan’s intention or that of any Person to effect a Change of Control or Option Exercise, as applicable, the then-applicable rating of the Notes is decreased by either Rating Agency by one or more categories (i.e., notches); provided that any such Rating Decline is in whole or in part in connection with a Change in Control or Option Exercise, as applicable, as shall be notified by the Company to the Trustee in writing.

“Record Date” means with respect to any interest payment to be made on a Payment Date, the Business Day prior to such Payment Date; provided, that if the Notes are Certificated Notes, the definition herein shall mean 15 days prior to such Payment Date.

“Redemption Date” means, when used with respect to any Note to be redeemed pursuant to Article 3, the date fixed for such redemption by or pursuant to this Indenture.

“Redemption Price” means, when used with respect to any Notes to be redeemed pursuant to Article 3, the price at which it is to be redeemed pursuant to this Indenture.

“Register” has the meaning specified in Section 2.03.

“Registrar” means The Bank of New York Mellon, until a successor Registrar shall have become such pursuant to the applicable provisions of this Indenture, and, thereafter, “Registrar” shall mean such successor Registrar.

“Regulation S” means Regulation S under the Securities Act, as in effect from time to time.

“Relevant Date” means, with respect to any payment on a Note, whichever is the later of: (i) the date on which such payment first becomes due; and (ii) if the full amount payable has not been received by the Trustee or a Paying Agent on or prior to such due date, the date on which notice is given to the Holders that the full amount has been received by the Trustee.

“Responsible Officer” means any officer of the Trustee in Corporate Trust Administration with direct responsibility for the administration of this Indenture.

“S&P” means Standard and Poor’s Ratings Group and it’s successors.

“Securities Act” means the U.S. Securities Act of 1933, as amended.

“Securities Act Legend” means the following legend, printed in capital letters:

THIS NOTE (AND RELATED NOTES GUARANTIES) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER

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(1)REPRESENTS THAT IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT) AND

(2)AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY

(A) TO THE COMPANY,

(B)PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT,

(C)IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR

(D)PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH ABOVE, THE COMPANY RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY RULE 144 EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

THE FOREGOING LEGEND MAY BE REMOVED FROM THIS NOTE AFTER 40 DAYS BEGINNING ON AND INCLUDING THE LATER OF (A) THE DATE ON WHICH THE NOTES ARE OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) AND (B) THE ORIGINAL ISSUE DATE OF THIS NOTE.

“Shell” means Shell International Petroleum Company Limited.

“Significant Subsidiary” means any Subsidiary of Cosan which at the time of determination either (i) had assets which, as of the date of Cosan’s most recent quarterly consolidated balance sheet, constituted at least 10% of Cosan’s total assets on a consolidated basis as of such date or (ii) had revenues for the 12 month period ending on the date of Cosan’s most recent quarterly consolidated statement of income which constituted at least 10% of Cosan’s total revenues on a consolidated basis for such period; provided, however, that (i) the Sugar and Ethanol Co. and (ii) the Downstream Co. shall each constitute a Significant Subsidiary so long as Cosan beneficially owns, directly or indirectly, at least 49.0% of the shares of Capital Stock of such entity.

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“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the Holder thereof upon the happening of any contingency unless such contingency has occurred).

“Subordinated Debt” means any Debt of Cosan which is subordinated in right of payment to the Notes or any Notes Guaranty, as applicable, pursuant to a written agreement to that effect.

“Subsidiary” means any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) Cosan, (ii) Cosan and one or more Subsidiaries or (iii) one or more Subsidiaries; provided, however, that, for purposes of the covenant described under Section 4.11, any Subsidiary contemplated by the Joint Venture, including the Sugar and Ethanol Co., the Downstream Co. and the Management Co. and each of their respective subsidiaries shall not be deemed to be a Subsidiary, so long as Cosan does not own more than 60% of the voting power of shares of Capital Stock with respect to such entity.

“Substituted Issuer” has the meaning specified in Section 12.01.

“Sugar and Ethanol Co.” means the sugar and ethanol company of the Joint Venture which would conduct the production of sugar and ethanol, as well as all cogeneration activities.

“Total Consolidated Assets” means the total amount of consolidated assets of Cosan and its Subsidiaries (including Cosan’s proportionate equity interest in the Sugar and Ethanol Co. and the Downstream Co. and their respective subsidiaries) prepared in accordance with GAAP.

“Transfer Agent” means The Bank of New York Mellon, The Bank of New York Mellon (Luxembourg) S.A., their respective successors and any other Person authorized by the Company to effectuate the exchange or transfer of any Note on behalf of the Company hereunder.

“Trustee” means The Bank of New York Mellon, until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture and, thereafter, “Trustee” shall mean such successor Trustee.

“United States” and “U.S.” means the United States of America (including the States and the District of Columbia) and its territories, its possessions and other areas subject to its jurisdiction.

“U.S. Dollars” and “U.S.$” each mean the currency of the United States.

“U.S. Government Obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States (including any agency or

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instrumentality thereof) for the payment of which the full faith and credit of the United States is pledged and which are not callable at the issuer’s option.

“Voting Stock” means, with respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person.

“Wholly-Owned Subsidiary” means a Subsidiary of which at least 95% of the Capital Stock (other than directors’ qualifying shares) is owned by Cosan or another Wholly-Owned Subsidiary.

Section 1.02. Rules of Construction. (i) For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(i)the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

(ii)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 or other subdivision;

(iii)  “or” is not exclusive; and

(iv)  “including” means including, without limitation;

(v)any reference to an “Article”, a “Section” or an “Exhibit” refers to an Article, a Section or an Exhibit, as the case may be, of this Indenture.

(b)All accounting terms not otherwise defined herein shall have the meanings assigned to them in accordance with GAAP.

(c)For purposes of the definitions set forth in Article 1 and this Indenture generally, all calculations and determinations shall be made in accordance with GAAP and shall be based upon the consolidated financial statements of Cosan and its Subsidiaries prepared in accordance with GAAP.

Section 1.03. Table of Contents; Headings. The table of contents and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

Section 1.04. 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 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.

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Any certificate or opinion of an Officer of the Company or any Guarantor, as applicable, 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 any Guarantor, as applicable, stating that the information with respect to such factual matters is in the possession of the Company or any Guarantor, 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 instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Section 1.05. 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 agents 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 and, where it is hereby expressly required, to the Company or any Guarantor, as applicable. 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 conclusive in favor of the Trustee and the Company or any Guarantor, as applicable, if made in the manner provided in this Section 1.05.

(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 the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his 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 that the Trustee reviewing such instrument or writing deems sufficient.

(c)The principal amount and serial numbers of Notes held by any Person, and the date of holding the same, shall be proved by the Register.

(d)If the Company or any Guarantor, as applicable, solicits from the Holders of Notes any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company or such Guarantor may, at its option, by or pursuant to a Board Resolution, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company or such Guarantor, as applicable,

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shall not have any obligation to do so. Such record date shall be the record date specified in or pursuant to such Board Resolution, which shall be a date not earlier than the date 30 days prior to the first solicitation of Holders generally in connection therewith and not later than the date such solicitation is completed. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of Outstanding Notes have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Notes shall be computed as of such record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than eleven months after the record date.

(e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note 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 or the Company or any Guarantor in reliance thereon, whether or not notation of such action is made upon such Note.

ARTICLE 2

THE NOTES

Section 2.01. Form and Dating. The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Note set forth in Exhibit A, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have 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 notations, legends or endorsements as may be required to comply with any law, stock exchange rule, agreement to which the Company is subject, if any, or usage, provided that any such notation, legend or endorsement is in a form acceptable to the Company.

Each Global Note and Certificated Note shall be dated the date of its authentication.

The Notes shall be printed, lithographed or engraved or produced by any combination of these methods or may be produced in any other manner permitted by the rules of any stock exchange on which the Notes may be listed, if any, all as determined by the Officers executing such Notes, as evidenced by their execution of such Notes.

Section 2.02. Execution, Authentication and Delivery. (a) Any Director of the Company shall sign the Notes for the Company by manual or facsimile signature.

(i) If a Director whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.

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(ii)A Note shall not be valid until an authorized signatory of the Trustee or an Authenticating Agent manually signs the certificate of authentication on the Note upon Company Order. Such signature shall be conclusive evidence that the Note has been authenticated under this Indenture. Such Company Order shall specify the amount of the Notes to be authenticated and the date on which the original issue of Notes is to be authenticated.

(iii)The Trustee or an Authenticating Agent shall initially authenticate and deliver Notes in an aggregate principal amount of up to U.S.$300,000,000 on the Closing Date.

(iv)The Company may from time to time, without the consent of the Holders of the Notes, create and issue additional Notes having the same terms and conditions as the Notes in all respects, except for issue date, issue price and the first payment of interest thereon. Additional Notes issued in this manner shall be consolidated with and shall form a single series with the previously Outstanding Notes.

(v)The Notes shall be issued in fully registered form without coupons attached in minimum denominations of U.S.$100,000 and integral multiples of U.S.$1,000 in excess thereof (each, an “Authorized Denomination”).

(b)The Trustee may appoint an authenticating agent, with a copy of such appointment to the Company, to authenticate the Notes (the “Authenticating Agent”). Unless limited by the terms of such appointment, an Authenticating Agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by an Authenticating Agent. An Authenticating Agent has the same rights, protections, immunities and indemnities as the Registrar or any Transfer Agent or Paying Agent or agent for service of notices and demands.

(i)Any corporation into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, consolidation or conversion to which any Authenticating Agent shall be a party, or any corporation succeeding to the corporate trust business (including this transaction) of any Authenticating Agent, shall be the successor of such Authenticating Agent hereunder, without the execution or filing of any further act on the part of the parties hereto or such Authenticating Agent or such successor corporation.

(ii)Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and the Company. The Trustee may at any time terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and the Company. Upon receiving such notice of resignation or upon such a termination, the Trustee may appoint a successor Authenticating Agent reasonably acceptable to the Company and shall give written notice of such appointment to the Company.

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(iii) The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services and reimbursement for its reasonable expenses relating thereto.

Section 2.03. Transfer Agents, Registrar and Paying Agents. (a) Subject to such reasonable regulations as the Company may prescribe, the books of the Company for the exchange, registration, and registration of transfer of Notes shall be kept at the office of the Registrar (such books maintained in such office and in any other office or agency designated for such purpose being herein referred to as the “Register”) . The Company shall also cause the Trustee to maintain books for the exchange, registration and registration of transfer of Notes. The Trustee shall notify the Registrar and the Registrar shall notify the Trustee, when necessary, upon any exchange, registration or registration of transfer of any Notes and shall cause their respective books to be amended accordingly. The Company may have one or more co registrars and one or more additional Transfer Agents or Paying Agents. The terms “Transfer Agent” and “Paying Agent” include any additional transfer agent or paying agent, as the case may be. The term “Registrar” includes any co-registrar.

(i)For so long as the Notes are listed on the Euro MTF of the Luxembourg Stock Exchange and such stock exchange shall so require, the Company shall maintain a Paying Agent and Transfer Agent in Luxembourg.

(ii)The Company shall enter into any appropriate agency agreements with any Registrar, Transfer Agent or Paying Agent not a party to this Indenture, which shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of any such agent. If the Company fails to maintain a Registrar, Transfer Agent or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.06. The Company initially appoints the Trustee as Registrar, New York Paying Agent and Transfer Agent, The Bank of New York Mellon (London Branch) as Paying Agent in London and The Bank of New York Mellon (Luxembourg) S.A. as Paying Agent and Transfer Agent in Luxembourg in connection with the Notes.

(b)The Trustee shall keep a record of all the Notes and shall make such record available during regular business hours for inspection upon the written request of the Company provided a reasonable amount of time prior to such inspection. Such books and records shall include notations as to whether such Notes have been redeemed, or otherwise paid or cancelled, and, in the case of mutilated, destroyed, defaced, stolen or lost Notes, whether such Notes have been replaced. In the case of the replacement of any of the Notes, the Trustee shall keep a record of the Note so replaced, and the Notes issued in replacement thereof. In the case of the cancellation of any of the Notes, the Trustee shall keep a record of the Note so cancelled and the date on which such Note was cancelled. Each Transfer Agent shall notify the Trustee of any transfers or exchanges of Notes effected by it.

(c)All Notes surrendered for payment, redemption, registration of transfer or exchange shall be cancelled by the Trustee in accordance with Section 2.11.

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(d) The Paying Agents shall comply with applicable backup withholding tax and information reporting requirements under the U.S. Internal Revenue Code of 1986, as amended, and the U.S. Treasury Regulations promulgated thereunder with respect to payments made under the Notes (including, to the extent required, the collection of Internal Revenue Service Forms W-8 and W-9 and the filing of U.S. Internal Revenue Service Forms 1099 and 1096).

Section 2.04. Paying Agent to Hold Money in Trust . By 12:00 P.M. New York time, no later than one Business Day prior to each Payment Date on any Note, the Company shall deposit into the London Paying Agent’s account in The City of New York in immediately available funds a sum sufficient to pay such principal and interest when so becoming due (including any amounts under Section 4.06). The Company shall request that the bank through which such payment is to be made agree to supply to such Paying Agent by 12:00 P.M. (New York time) two Business Days prior to the due date from any such payment an irrevocable confirmation (by tested telex) of its intention to make such payment. The Company shall require each Paying Agent not a party to this Indenture to agree in writing that such Paying Agent shall hold in trust, for the benefit of Holders or the Trustee, all money held by such Paying Agent for the payment of principal and interest on the Notes and shall notify the Trustee of any default by the Company in making any such payment. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by it. Upon complying with this Section 2.04, the Paying Agent shall have no further liability for the money delivered to the Trustee.

Each payment in full of principal, Redemption Price, Additional Amounts and/or interest payable under the Notes and this Indenture in respect of any Note made by or on behalf of the Company to or to the order of the Paying Agent in the manner specified herein or in the Notes on the date due shall be valid and effective to satisfy and discharge the obligation of the Company to make payment of principal, Redemption Price, Additional Amounts and/or interest payable hereunder and under the Notes on such date, provided, however, that the liability of any Paying Agents hereunder shall not exceed any amounts paid to it by the Company, or held by it, on behalf of the Holders hereunder; and provided further that, in the event that there is a Default by the Paying Agent in any payment of principal, Redemption Price, Additional Amounts and/or interest in respect of any Note in accordance with the terms hereof, the Company shall pay on demand such further amounts as will result in receipt by the Holder of such amounts as would have been received by it had no such Default occurred.

Section 2.05. Payment of Principal and Interest; Principal and Interest Rights Preserved. (a) Except as otherwise provided herein for the redemption of the Notes, the paymentof principal of or interest on the Notes shall be allocated on a pro rata basis among all Outstanding Notes, without preference or priority of any kind among the Notes.

(b) Payments of principal in respect of any Note (whether upon redemption, declaration of acceleration or otherwise) shall be made only against presentation and, if the final payment, surrender of such Note at the Corporate Trust Office, at the offices of the Trustee and, subject to any fiscal or other laws and regulations applicable thereto, at the specified offices of any other Paying Agent appointed by the Company. Payment of interest on each Interest Payment Date with respect to any Note shall be made to the Person in whose name such Note is registered on the relevant Record Date.

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(c) Payments shall be made by U.S. Dollar check drawn on a bank in The City of New York and mailed to the Person entitled thereto at its address as it appears on the Register, or by wire transfer to a U.S. Dollar account maintained by the payee with a bank in The City of New York, provided that the Holder so elects by giving written notice to such effect designating such account, which is received by the Trustee or a Paying Agent no later than 15 days immediately preceding the relevant Payment Date. Unless such designation is revoked in writing, any such designation made by such Holder with respect to such Note shall remain in effect with respect to any future payments with respect to such Note payable to such Holder. The Company shall pay any administrative costs imposed by banks in connection with making payments by wire transfer.

Notwithstanding the provisions of this Section 2.05, payments on Notes registered in the name of any Clearing Agency or the Common Depositary shall be effected in accordance with the Applicable Procedures.

Section 2.06. Holder Lists. The Registrar shall preserve in as current a form as is reasonably practicable, the most recent list available to it of the names and addresses of Holders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee in writing, at least five Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders.

Section 2.07. Transfer and Exchange. (a) Interests of beneficial owners in the Global Notes may be transferred or exchanged for Certificated Notes in accordance with the rules and procedures of the Clearing Agencies, the provisions of this Section 2.07 of this Indenture and the provisions of Section 2.08. Beneficial interests in Global Notes shall be exchanged for one or more Certificated Notes if (a) any Clearing Agency (i) has notified the Company that it is unwilling or unable to continue as a Clearing Agency and (ii) a successor to the Clearing Agency is not appointed by the Company within 90 days of such notification, (b) any Clearing Agency so requests following an Event of Default hereunder and which Event of Default is continuing or (c) in whole (but not in part) at any time if the Company in its sole discretion so determines and notifies the Trustee in writing that it elects to issue Certificated Notes. Whenever all of a Global Note is exchanged for one or more Certificated Notes, it shall be surrendered by the Holder thereof to the Trustee for cancellation. Whenever a part of a Global Note is exchanged for one or more Certificated Notes, the Registrar shall cause an adjustment to be made to such Global Note such that the principal amount of such Global Note will be equal to the portion of such Global Note not exchanged. In the case of Certificated Notes issued in exchange for interests in a Global Note bearing the Securities Act Legend, such Certificated Notes shall bear the Securities Act Legend. Upon the transfer, exchange or replacement of Notes bearing such Securities Act Legend, or upon specific request for removal of the Securities Act Legend on a Note, the Company shall deliver only Notes that bear such Securities Act Legend, or shall refuse to remove such Securities Act Legend, as the case may be, unless there is delivered to the Company a certificate, or such satisfactory evidence as may reasonably be required by the Company, which may include an Opinion of Counsel, that neither the Securities Act Legend nor the restrictions on transfer set forth therein are required to ensure compliance with the provisions of the Securities Act. The Trustee shall exchange a Note bearing the Securities Act Legend for a Note not bearing such Securities Act Legend only if it has been directed to do so in writing by the Company, upon which direction it may conclusively rely.

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In connection with the exchange of interests in a Global Note for Certificated Notes pursuant to this Section 2.07, the Company shall execute, and the Trustee shall, upon receipt of a Company Order, authenticate and make available for delivery, to each beneficial owner in exchange for its beneficial interest in the Global Note, an equal aggregate principal amount of Certificated Notes of Authorized Denominations as specified by the relevant Clearing Agency.

(b)If interests in any Global Note are to be exchanged for Notes in the form of Certificated Notes pursuant to this Section 2.07, such Global Note shall be surrendered by the relevant Clearing Agency to the Trustee to be so exchanged, without charge, and the Trustee shall authenticate and deliver, upon such exchange of interests in such Global Note, an equal aggregate principal amount of Certificated Notes. The Certificated Notes exchanged pursuant to this Section 2.07 shall be registered by the Registrar in such names as the relevant Clearing Agency shall direct in writing in accordance with its records.

(c)Certificated Notes may be exchanged or transferred in whole or in part in the principal amount of Authorized Denominations by surrendering such Certificated Notes at the office of the Trustee or any Transfer Agent with a written instrument of transfer as provided in this Indenture in the form attached to the form of Note duly executed by the Holder thereof or his attorney duly authorized in writing. In exchange for any Certificated Note properly presented for transfer, the Trustee shall promptly authenticate and deliver or cause to be authenticated and delivered at the Corporate Trust Office of the Trustee or at the office of its duly appointed agent or at the office of any agent appointed by the Company, as the case may be, to the transferee or send by mail (at the risk of the transferee) to such address as the transferee may request, a Certificated Note or Notes in the name of such transferee and for the same aggregate principal amount as shall have been transferred. Subject to the minimum denomination requirements set forth herein, in the case of the transfer of any Certificated Note in part, the Trustee shall also promptly authenticate and deliver or cause to be authenticated and delivered at the Corporate Trust Office of the Trustee or at the office of its duly appointed agent or at the office of any Transfer Agent that may be appointed by the Company, as the case may be, to the transferor or send by mail (at the risk of the transferor) to such address as the transferor may request, a Certificated Note or Notes registered in the name of the transferor and for the aggregate principal amount that was not transferred. Certificated Notes will not be exchangeable for interests in Global Notes, except in accordance with this Section 2.07 and Section 2.08.

(d)Until exchanged in full, a Global Note shall in all respects be entitled to the same benefits under this Indenture as Certificated Notes authenticated and delivered hereunder. If, after any presentation thereof to the Trustee, the principal amount of Notes represented by any Global Note is reduced to zero, such Global Note shall be immediately cancelled and destroyed by the Trustee in accordance with Section 2.11.

(e)None of the Trustee or any Agent shall be required to register the transfer of or exchange of Certificated Notes for a period of 15 days preceding the due date for any payment of interest on the Note or during the period of 30 days ending on the due date for any payment of principal on the Note. None of the Trustee or any Agent shall register the transfer of or exchange any Notes previously called for redemption

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(f) Transfer, registration and exchange of any Note or Notes shall be permitted and executed as provided in this Section 2.07 without any charge to the Holder of any such Note or Notes other than any taxes or governmental charges or insurance charges payable on transfers or any expenses of delivery, but subject to such reasonable regulations as the Company, the Agents and the Trustee may prescribe.

The costs and expenses of effecting any exchange or registration of transfer pursuant to the foregoing provisions, except for the payment made by the Holders of a sum sufficient to cover any tax or other governmental charges or insurance charges that may be imposed in relation thereto, shall be borne by the Company.

(g) The Trustee or the Transfer Agent shall effect transfers of Global Notes and Certificated Notes. In addition, the Registrar shall keep the Register for the ownership, exchange and transfer of any Notes. The Transfer Agent shall give prompt notice to the Registrar and the Registrar shall likewise give prompt notice to the Trustee of any exchange or transfer of such Notes. The Trustee shall give prompt notice to the Company of any replacement, transfer, cancellation or destruction of the Notes.

(f) Neither the Trustee nor any Agent shall have any obligation or duty to monitor, determine or inquire as to compliance with any tax or securities laws with respect to any restrictions on transfer imposed under this Indenture or under applicable law (including any transfers between or among Clearing Agency participants, agent members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

Section 2.08. Book-Entry Provisions for the Global Note. The Global Notes initially shall (i) be deposited with and registered in the name of the Common Depositary for the Clearing Agencies and (ii) bear the Securities Act Legend.

Notwithstanding any other provisions of this Indenture, the Global Note may not be transferred as a whole except by a nominee for the Common Depositary to a successor nominee for the Common Depositary.

Insofar as any Global Note is registered in the name of the Common Depositary and held by the agent members of Euroclear or Clearstream Banking, the provisions of the “Operating Procedures of the Euroclear System” and the “Terms and Conditions Governing Use of Participants” of Euroclear and Clearstream Banking, respectively, shall be applicable to such Global Note. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee, any Agent hereunder, or any agent of the Company from giving effect to any written certification, proxy or other authorization furnished by Euroclear or Clearstream Banking, or impair, as between Euroclear or Clearstream Banking, as the case may be, and their respective agent members, the operation of customary practices governing the exercise of the rights of a Holder of any Note. A Global Note shall be transferable only as a whole to a successor Common Depositary.

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None of the Trustee or any Agent shall have any responsibility or obligation to any beneficial owner of an interest in a Global Note, an agent member of, or a participant in, any Clearing Agency or other Person with respect to the accuracy of the records of any Clearing Agency of any participant or agent member thereof, with respect to any ownership interest in any Global Notes or with respect to the delivery to any participant, agent member, beneficial owner or other Person (other than the Clearing Agencies) of any notice (including any notice of redemption) or the payment of any amount or delivery of any Notes (or other security or property) under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders in respect of the Notes shall be given or made only to or upon the order of the registered Holders (which shall be the Clearing Agencies or the Common Depositary in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Clearing Agencies subject to the applicable rules and procedures of the Clearing Agencies. The Trustee and each Agent may rely and shall be fully protected in relying upon information furnished by any Clearing Agency with respect to its agent members, participants and any beneficial owners.

Section 2.09. Replacement Notes. If any Note at any time becomes mutilated, defaced, destroyed, stolen or lost, such Note may be replaced at the cost of the applicant (including reasonable legal fees of the Company, the Trustee, the Transfer Agents, the Registrar and the Paying Agents) at the office of the Trustee or any Transfer Agent, upon provision of, in the case of destroyed, stolen or lost Notes, evidence satisfactory to the Trustee and the Company that such Note was destroyed, stolen or lost, together with such indemnity as the Trustee and the Company may require. Mutilated or defaced Notes must be surrendered before replacements shall be issued.

Each Note authenticated and delivered in exchange for or in lieu of any such Note shall carry rights to accrued and unpaid interest and to interest to accrue equivalent to the rights that were carried by such Note before such Note was mutilated, defaced, destroyed, stolen or lost.

Every replacement Note is an additional obligation of the Company and shall be entitled to the benefits at this Indenture.

Section 2.10. Temporary Notes. Subject to the provisions of Section 2.07(a), until Certificated Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of Certificated Notes but may have variations that the Company considers appropriate for temporary Notes. As necessary, the Company shall prepare and the Trustee shall authenticate Certificated Notes and deliver them in exchange for temporary Notes at the office or agency of the Company or the Trustee, without charge to the Holder. Until so exchanged, the temporary Notes shall be entitled to the same benefits under this Indenture as Certificated Notes.

Section 2.11. Cancellation. The Company at any time may deliver Notes to the Trustee for cancellation. The Transfer Agents and the Paying Agents shall forward to the Trustee any Notes surrendered to them for transfer, exchange or payment. The Trustee and no one else shall cancel and the Trustee shall destroy in accordance with its customary procedures (subject to the record-retention requirements of the Exchange Act) all Notes surrendered for transfer, exchange, payment or cancellation and, if so destroyed, deliver a certificate of such destruction to the

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Company unless the Company directs the Trustee in writing to deliver cancelled Notes to the Company. The Company may not issue new Notes to replace Notes it has redeemed, paid or delivered to the Trustee for cancellation.

Section 2.12. Defaulted Interest. If the Company defaults in a payment of interest on the Notes, the Company shall pay the defaulted interest (plus interest on such defaulted interest at the rate specified in Section 4.01 to the extent lawful) in any lawful manner not inconsistent with the requirements of any stock exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, if, after written notice given by the Company to the Trustee of the proposed payment pursuant to this Section 2.12, such manner of payment shall be deemed practicable by the Trustee.

The Company may pay the defaulted interest to the Persons who are Holders on a subsequent special record date, which date shall be at least five Business Days prior to the Payment Date of such defaulted interest. The Company shall fix or cause to be fixed any such special record date and Payment Date, and, at least 15 days before any such special record date, the Company shall deliver to each Holder, with a copy to the Trustee, a notice that states the special record date, the Payment Date and the amount of defaulted interest to be paid.

Section 2.13. Common Code and ISIN Numbers. The Company in issuing the Notes may use Common Codes and ISIN numbers (if then generally in use) and, if so, the Trustee shall use Common Codes and ISIN numbers in notices as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice and that reliance may be placed only on the other identification numbers printed on the Notes, and any such notice shall not be affected by any defect in or omission of such numbers. The Company shall promptly notify the Trustee of any change in Common Codes or ISIN numbers.

Section 2.14. Open Market Purchases. The Company or any of its Affiliates may at any time purchase Notes in the open market or otherwise at any agreed upon price. All Notes so purchased may not be reissued or resold, except in accordance with applicable securities and other laws.

ARTICLE 3

REDEMPTION

Section 3.01. Right of Redemption. (a) Except as described in this Section 3.01 and Paragraph 7 of the form of Note set forth in Exhibit A, the Notes may not be redeemed.

(b) Optional Redemption. The Notes shall be redeemable, at the option of the Company or Cosan, in whole or in part, on any Interest Payment Date on or after November 5, 2015, upon giving notice to the Holders (which notice shall be irrevocable) in accordance with Section 3.04, at 100% of the principal amount thereof, plus accrued interest and any Additional Amounts payable with respect thereto. Any redemption of Notes by the Company or Cosan pursuant to this Section 3.01(b) will be subject to either (i) there being at least U.S.$150.0

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million in aggregate principal amount of Notes Outstanding after such redemption or (ii) the Company or Cosan redeeming all of the then-Outstanding principal amount of the Notes.

(c) Redemption for Taxation Reasons. If as a result of any change in or amendment to the laws (or any rules or regulations thereunder) of the Cayman Islands, Brazil or any political subdivision or taxing authority thereof or therein affecting taxation, or any amendment to or change in an official interpretation, administration or application of such laws, treaties, rules, or regulations (including a holding by a court of competent jurisdiction), which change or amendment becomes effective or, in the case of a change in official position, is announced on or after the issue date of the Notes or on or after the date a successor assumes the obligations under the Notes, (i) the Company or any successor has or will become obligated to pay Additional Amounts, or (ii) any Guarantor or any successor has or will become obligated to pay Additional Amounts in excess of the Additional Amounts the Company or the Guarantors, or any successor, as applicable, would be obligated to pay if payments were subject to withholding or deduction at a rate of 15% or at a rate of 25% in case the Holder of the Notes is resident in a tax haven jurisdiction for Brazilian tax purposes (i.e., a country that does not impose any income tax or that imposes it at a maximum rate lower than 20% or where the laws impose restrictions on the disclosure of ownership composition or securities ownership) (the “Minimum Withholding Level”) as a result of the taxes, duties, assessments and other governmental charges describedbelow, the Company or any such Guarantor or any successor may, at its option, redeem all, but not less than all, of the Notes, at a Redemption Price equal to 100% of their principal amount, together with interest accrued to the Redemption Date, upon delivery of irrevocable notice to Holders pursuant to Section 3.04. The Company and the Guarantors or any successor shall not have the right to so redeem the Notes unless (a) the Company or any successor becomes obligated to pay Additional Amounts or (b) any Guarantor or any successor becomes obligated to pay the Additional Amounts above the Minimum Withholding Level. Notwithstanding the foregoing, none of the Company or any Guarantor or any successor shall not have the right to so redeem the Notes unless: (i) it has taken reasonable measures to avoid the obligation to pay Additional Amounts (provided, however for this purpose reasonable measures shall not include the Company or any such Guarantor, as the case may be, moving or changing jurisdiction); and (ii) it has complied with all necessary regulations of the Central Bank of Brazil to legally effect such redemption.

In the event that the Company or any Guarantor elects to so redeem the Notes pursuant to this Section 3.01(c), it will deliver to the Trustee: (i) an Officers’ Certificate, signed in the name of the Company or such Guarantor, as applicable, stating that the Company is entitled to redeem the Notes pursuant to their terms and setting forth a statement of facts showing that the condition or conditions precedent to the right of the Company or such Guarantor, as applicable, to so redeem have occurred or been satisfied; and (ii) an Opinion of Counsel to the effect that the Company or any successor has or will become obligated to pay Additional Amounts or any Guarantor or any successor has or will become obligated to pay Additional Amounts in excess of the Additional Amounts payable at the Minimum Withholding Level as a result of the change or amendment, that the Company or any such Guarantor, as the case may be, cannot avoid payment of such excess Additional Amounts by taking reasonable measures available to it and that all governmental requirements necessary for the Company to effect the redemption have been complied with.

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Section 3.02. Applicability of Article. Redemption of Notes at the option of the Company, as permitted by Section 3.01 or required by any provision of this Indenture, shall be made in accordance with such provision and this Article 3.

Section 3.03. Election to Redeem; Notice to Trustee. The election of the Company to redeem the Notes pursuant to Section 3.01(b) or 3.01(b) shall be evidenced by a Board Resolution. In case of any redemption of Notes at the election of the Company, the Company shall, at least 70 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee in writing of such Redemption Date.

Section 3.04. Notice of Redemption by the Company. In the case of redemption of Notes pursuant to Section 3.01(b), notice of redemption shall be delivered at least 30 but not more than 60 days before the Redemption Date to each Holder of any Note to be redeemed in accordance with Section 13.02 and such notice shall be irrevocable. In the case of redemption of Notes pursuant to Section 3.01(b), notice of redemption shall be delivered at least 30 but not more than 90 days before the Redemption Date to each Holder of any Note to be redeemed in accordance with Section 13.02 and such notice shall be irrevocable, provided, however that such notice pursuant to Section 3.01(b) may not be given earlier than 90 days prior to the earliest date on which (x) the Company or any successor would, but for such redemption, be obligated to pay any Additional Amounts, or (y) in the case of payments made under any Notes Guaranty, any Guarantor or any successor would, but for such redemption, be obligated to pay the Additional Amounts above the Minimum Withholding Level.

The notice shall state:

(i)    the Redemption Date;

(ii)    the Redemption Price;

(iii)  the name and address of the Trustee;

(iv) that Notes called for redemption must be surrendered to the Trustee to collect the Redemption Price;

(v)   that, unless the Company defaults in making such redemption payment or the Trustee or any Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Notes called for redemption ceases to accrue on and after the Redemption Date;

(vi)  the paragraph of the Notes pursuant to which the Notes called for redemption are being redeemed;

(vii)  the Common Code or ISIN number, if any; and

(viii)that no representation is made as to the correctness or accuracy of the Common Code or ISIN number, if any, listed in such notice or printed on the Notes.

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At the Company’s election and at its request, made in writing to the Trustee at least 70 days before a Redemption Date, the Trustee shall give the notice of redemption in the Company’s name and at the Company’s expense; provided that the Company shall deliver to the Trustee, an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

Section 3.05. Deposit of Redemption Price. By 12:00 P.M. (New York time), no later than one Business Day prior to the Redemption Date, the Company shall deposit with the Paying Agent money sufficient to pay the Redemption Price of and accrued interest on the Notes other than Notes that have been delivered by the Company to the Trustee at least 15 days prior to the Redemption Date for cancellation. The Company shall request that the bank through which such payment is to be made agree to supply to the Paying Agent by 12:00 P.M. (New York time) two Business Days prior to the due date from any such payment an irrevocable confirmation (by tested telex) of its intention to make such payment.

Section 3.06. Effect of Notice of Redemption. Notice of redemption having been given as aforesaid, the Notes shall, on the Redemption Date, become due and payable at the applicable Redemption Price (together with accrued interest, if any, to the Redemption Date), and from and after such date (except in the event of a default in the payment of the Redemption Price and accrued interest) such Notes shall cease to bear interest.

If any Note to be redeemed shall not be so paid upon surrender thereof in accordance with the Company’s instructions for redemption, the principal shall, until paid, bear interest from the Redemption Date at the rate borne by the Notes. Upon surrender to the Trustee, such Notes shall be paid at the applicable Redemption Price, plus accrued interest to the Redemption Date; provided, however, that installments of interest payable on or prior to the Redemption Date shallbe payable to the Holders of such Notes registered as such at the close of business on the relevant Record Date according to their terms.

ARTICLE 4

COVENANTS

Section 4.01. Payment of Principal and Interest Under the Notes. The Company shall punctually pay the principal of and interest on the Notes on the dates and in the manner provided in the form of Note set forth as Exhibit A. By 12:00 P.M. (New York time), no later than one Business Day prior to any Payment Date, the Company shall irrevocably deposit with the Trustee or with the Paying Agent money sufficient to pay such principal and interest.

The Company shall pay interest on overdue principal or installments of interest, to the extent lawful, at the rate borne by the Notes plus 1% per annum.

No interest shall be payable hereunder in excess of the maximum rate permitted by applicable law.

Section 4.02. Maintenance of Office or Agency. The Company shall maintain in each place of payment for the Notes an office or agency where Notes may be presented or surrendered

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for payment and where notices and demands to or upon the Company (other than the type contemplated by Section 13.09) in respect of the Notes and this Indenture may be served. The Corporate Trust Office of the Trustee shall be such office or agency of the Company, unless the Company shall designate and maintain some other office or agency for one or more of such purposes. The Company shall give prompt written notice to the Trustee of any change in the location of any such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

Section 4.03. Money for Note Payments to Be Held in Trust. If the Company shall at any time act as its own Paying Agent, it shall, on or before each due date of principal of or interest on any of the Notes, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and shall promptly notify the Trustee in writing of its action or failure so to act.

Whenever the Company shall have one or more Paying Agents for the Notes, it shall, before each due date of principal of or interest on any Notes, irrevocably deposit with a Paying Agent in accordance with this Indenture a sum sufficient to pay such principal and interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal or interest, and (unless such Paying Agent is the Trustee) the Company shall promptly notify the Trustee in writing of such action or any failure so to act.

Each Paying Agent, subject to the provisions of this Section 4.03, shall:

(i)hold all sums held by it for the payment of principal of or interest on Notes 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, however, such sums need not be segregated from other funds held by it, except as required by law;

(ii)give the Trustee written notice of any Default by the Company (or any other obligor upon the Notes) in the making of any payment of principal or interest; and

(iii)at any time during the continuance of any such Default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

The Company shall cause each Paying Agent not a party to this Indenture to execute and deliver an instrument in which such Paying Agent shall agree with the Company to act as a Paying Agent in accordance with this Section 4.03.

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 all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were

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held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such sums.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of principal of or interest on any Note and remaining unclaimed for two years after such principal or interest has become due and payable shall be paid to the Company at the written request of the Company, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, shall, upon request and 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 (i) London and (ii) so long as the Notes continue to be listed on the Euro MTF of the Luxembourg Stock Exchange, 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 shall be repaid to the Company.

Section 4.04. Maintenance of Corporate Existence. The Company shall, and shall cause each of its Subsidiaries to, (i) maintain in effect its corporate existence and all registrations necessary therefor, provided that these restrictions shall not prohibit any transactions permitted by Article 5 or Article 12; (ii) take all reasonable actions to maintain all rights, privileges, titles to property, franchises and the like necessary in the normal conduct of its business, activities or operations; and (iii) maintain or cause to be maintained in good repair, working order and condition (normal wear and tear excepted) all properties used in their business; provided, however, that neither the Company nor its Subsidiaries shall be prevented from discontinuingthose operations (including through the transfer or dissolution of a Subsidiary) or suspending the maintenance of those properties (including through the sale thereof) which, in the reasonable judgment of the Company are no longer necessary in the conduct of the Company’s business, or that of its Subsidiaries; and provided, further, that such discontinuation of operations or suspension of maintenance shall not be materially disadvantageous to the Holders of the Notes.

Section 4.05. Payment of Taxes and Claims. The Company shall, and shall cause each of its Subsidiaries to, pay all taxes, assessments and other governmental charges imposed upon it or any of its property in respect of any of its franchises, businesses, income or profits before any penalty or interest accrues thereon, and pay all claims (including claims for labor, services, materials and supplies) for sums which have become due and payable and which by law have or might become a Lien upon its property; provided, however, that any such payment shall not be required unless the failure to make such payment would have a material adverse effect upon the financial condition of the Company and its Subsidiaries considered as one enterprise or a material adverse effect on the performance of the Company’s obligations hereunder; and provided, further, that no such charge or claim need be paid while it is being contested in goodfaith by appropriate proceedings and if appropriate reserves or other provisions shall have been made therefor.

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Section 4.06. Payment of Additional Amounts. (a) All payments by the Company in respect of the Notes or the Guarantors in respect of the Notes Guaranties will be made without withholding or deduction for or on account of any present or future taxes, duties, assessments, or other governmental charges of whatever nature imposed or levied by or on behalf of the Cayman Islands, Brazil, or any authority therein or thereof in the case of payments under the Notes or under the Notes Guaranties, unless the Company or the Guarantors are compelled by law to deduct or withhold such taxes, duties, assessments, or governmental charges. In such event, the Company or the Guarantors will make such deduction or withholding, make payment of the amount so withheld to the appropriate governmental authority and pay such additional amounts as may be necessary to ensure that the net amounts receivable by Holders of Notes after such withholding or deduction shall equal the respective amounts of principal and interest which would have been receivable in respect of the Notes in the absence of such withholding or deduction (“Additional Amounts”). No such Additional Amounts shall be payable:

(i)to, or to a third party on behalf of, a Holder who is liable for such taxes, duties, assessments or governmental charges in respect of such Note by reason of the existence of any present or former connection between such Holder (or between a fiduciary, settlor, beneficiary, member or shareholder of such Holder, if such Holder is an estate, a trust, a partnership, or a corporation) and the Cayman Islands and/or Brazil, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in a trade or business or present therein or having, or having had, a permanent establishment therein, other than the mere holding of the Note or enforcement of rights and the receipt of payments with respect to the Note;

(ii)in respect of Notes surrendered (if surrender is required) more than 30 days after the Relevant Date except to the extent that payments under such Note would have been subject to withholdings and the Holder of such Note would have been entitled to such Additional Amounts, on surrender of such Note for payment on the last day of such period of 30 days;

(iii)where such Additional Amount is imposed on a payment to an individual and is required to be made pursuant to any law implementing or complying with, or introduced in order to conform to, any European Union Directive on the taxation of savings;

(iv)to, or to a third party on behalf of, a Holder who is liable for such taxes, duties, assessments or other governmental charges by reason of such Holder's failure to comply with any certification, identification or other reporting requirement concerning the nationality, residence, identity or connection with the Cayman Islands, Brazil, or a successor jurisdiction or applicable political subdivision or authority thereof or therein having power to tax, of such Holder, if (1) compliance is required by such jurisdiction, or any political subdivision or authority thereof or therein having power to tax, as a precondition to, exemption from, or reduction in the rate of, the tax, assessment or other governmental charge and (2) the Company or any of the Guarantors has given the Holders at least 30 days’ notice that Holders will be required to provide such certification, identification or other requirement;

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(v)in respect of any estate, inheritance, gift, sales, transfer, capital gains, excise or personal property or similar tax, assessment or governmental charge;

(vi)in respect of any tax, assessment or other governmental charge which is payable other than by deduction or withholding from payments of principal of or interest on the Note or by direct payment by the Company or the Guarantors in respect of claims made against the Company or the Guarantors; or

(vii)  in respect of any combination of the above.

(b)No Additional Amounts shall be paid with respect to any payment on a Note to a Holder who is a fiduciary, a partnership, a limited liability company or other than the sole beneficial owner of that payment to the extent that payment would be required by the laws of the Cayman Islands, Brazil or any political subdivision thereof to be included in the income, for tax purposes, of a beneficiary or settlor with respect to the fiduciary, a member of that partnership, an interestholder in a limited liability company or a beneficial owner who would not have been entitled to the Additional Amounts had that beneficiary, settlor, member or beneficial owner been the Holder.

(c)The Notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial interpretation. Except as specifically provided above, neither the Company nor the Guarantors shall be required to make a payment with respect to any tax, assessment or governmental charge imposed by any government or a political subdivision or taxing authority thereof or therein.

(d)In the event that Additional Amounts actually paid with respect to the Notes are based on rates of deduction or withholding of withholding taxes in excess of the appropriate rate applicable to the Holder of such Notes, and, as a result thereof such Holder is entitled to make claim for a refund or credit of such excess from the authority imposing such withholding tax, then such Holder shall, by accepting such Notes, be deemed to have assigned and transferred all right, title, and interest to any such claim for a refund or credit of such excess to the Company or the Guarantors, as applicable.

(e)Any reference in this Indenture or the Notes to principal, interest or any other amount payable in respect of the Notes by the Company or a Notes Guaranty by any Guarantor will be deemed also to refer to any Additional Amounts, unless the context requires otherwise, that may be payable with respect to that amount under the obligations referred to in this Section.

(f)The foregoing obligations of the Company and the Guarantors will survive termination or discharge of this Indenture.

Section 4.07. Reporting Requirements. (a) Cosan shall provide the Trustee with the following reports (and shall also provide the Trustee with sufficient copies, as required, of the reports referred to in clauses (i), (ii), and (iii) for distribution, at Cosan’s expense, to all Holders of Notes upon written request by the Holders therefor):

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(i)an English language version of its annual audited consolidated financial statements prepared in accordance with GAAP promptly upon such financial statements becoming available but not later than 120 days after the close of its fiscal year ending March 31;

(ii)an English language version of its unaudited quarterly financial statements prepared in accordance with GAAP promptly upon such statements becoming available but not later than 60 days after the close of each fiscal quarter (other than the last fiscal quarter of its fiscal year); and

(iii)without duplication, English language versions or summaries of such other reports or notices as may be filed or submitted by (and promptly after filing or submission by) Cosan with the Euro MTF of the Luxembourg Stock Exchange or any other stock exchange on which the Notes may be listed (in each case, to the extent that any such report or notice is generally available to security holders of the Company or the public in Brazil).

Delivery of the above reports to the Trustee is for informational purposes only and the Trustee’s receipt of such reports shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the compliance of the Company or any Guarantor with any the covenants in this Indenture (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

If Cosan makes available the reports described in clauses (i), (ii), and (iii) on Cosan’s website and notifies the Trustee in writing thereof, it will be deemed to have satisfied the reporting requirement set forth in such applicable clause.

(b)Cosan shall provide the Trustee simultaneously with the delivery of the financial statements referred to in clause (i) of Section 4.07(a), an Officers’ Certificate stating whether a Default or Event of Default exists on the date of such certificate and, if a Default or Event of Default exists, setting forth the details thereof and the action which Cosan is taking or proposes to take with respect thereto. As soon as practicable and in any event within 30 calendar days after any director or executive officer of the Company or any Guarantor becomes aware of the existence of a Default or Event of Default, Cosan shall provide the Trustee with an Officers’ Certificate setting forth the details thereof and the action which Cosan is taking or proposes to take with respect thereto.

(c)Within 60 days of the close of each of the first three fiscal quarters and within 90 days of the close of each fiscal year, for so long as any of the Notes remain Outstanding, (i) the Company may request from any Clearing Agency, a current list of the names and addresses of each participant which is a Holder of an interest in a Global Note and (ii) at the Company’s written request, the Trustee shall provide the Company with the names and addresses of each Holder of a Certificated Note, if any.

Section 4.08. [Intentionally Omitted].

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Section 4.09. Negative Covenants of the Company. This Indenture limits and restricts the Company from taking the following actions or engaging in the following activities or transactions:

(1)engaging in any business or entering into, or being a party to, any transaction or agreement, other than:

(a)the issuance, sale, redemption, repurchase or defeasance of the Notes, additional Notes and any other Debt not otherwise prohibited for Cosan by this Indenture and any activities incidentally related thereto;

(b)entering into cash management transactions, import and export financing transactions and any intercompany loans to Cosan and its Subsidiaries and any activities reasonably related thereto;

(c)entering into Hedging Agreements related to the Notes, additional Notes and any other Debt not otherwise prohibited for Cosan by this Indenture; and

(d)  as required by law.

(2)acquiring or owning any subsidiaries or other assets or properties, except (i) an interest in Hedging Agreements relating to its Debt and instruments evidencing interests in the foregoing, (ii) cash, Cash Equivalents or Marketable Securities, (iii) any assets related to import and export financing transactions, and (iv) the Notes, additional Notes and any other Debt not otherwise prohibited for Cosan by this Indenture;

(3)incurring any additional Debt, except for any additional Debt (i) incurred solely for the purpose of complying with its obligations under the Notes, (ii) the issuance of additional Notes, (iii) in respect of Hedging Agreements relating to its Debt or (iv) any other Debt not otherwise prohibited for Cosan by this Indenture;

(4)creating, assuming, incurring or suffering to exist any Lien upon any properties or assets whatsoever, except for any Liens permitted under Section 4.11; and

(5)entering into any consolidation, merger, amalgamation, joint venture, or other form of combination with any Person, or selling, leasing, conveying or otherwise disposing of any of its assets or receivables except (i) to the extent that it complies with the conditions set forth in Section 5.01 (substituting “the Company” for “Guarantor” and “Notes” for “Notes Guaranty” therein) and (ii) with an Affiliate of the Company solely for the purpose of reincorporating the Company in another jurisdiction (so long as reincorporation in such jurisdiction does not materially adversely affect the rights of the Holders of the Notes).

In addition, prior to the consummation of the Joint Venture, Cosan will covenant to beneficially own, directly or indirectly through any Subsidiary, at least 90% of the Capital Stock of the Company.

Section 4.10. Repurchase upon Change of Control.

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(a)Not later than 30 days following a Change of Control that results in a Rating Decline, the Company will make an Offer to Purchase all Outstanding Notes at a purchase price equal to 101% of the principal amount plus accrued interest to the date of purchase.

(b)An “Offer to Purchase” is a written offer delivered to the Holders (with a copy to the Trustee), which will specify the principal amount of Notes subject to the offer and the purchase price. The Offer to Purchase must specify an expiration date (the “expiration date”) not less than 30 days or more than 60 days after the date of the Offer to Purchase and a settlement date for purchase (the “purchase date”) not more than five Business Days after the expiration date. The Offer to Purchase must include information concerning the business of Cosan and its subsidiaries which the Company in good faith believes will enable the Holders to make an informed decision with respect to the Offer to Purchase. The Offer to Purchase will also contain instructions and materials necessary to enable Holders to tender Notes pursuant to the Offer to Purchase.

(c)A Holder may tender all or any portion of its Notes pursuant to an Offer to Purchase, subject to the requirement that if a Holder tenders only a portion of its Notes, it must hold Notes in an amount no less than U.S.$100,000 in principal amount and in multiples of U.S.$1,000 in excess thereof. Holders are entitled to withdraw Notes tendered up to the close of business on the expiration date by delivering notice of withdrawal to the Company. On the purchase date, the purchase price will become due and payable on each Note accepted for purchase pursuant to the Offer to Purchase, and interest on Notes purchased will cease to accrue on and after the purchase date.

(d)The Company agrees to obtain all necessary consents and regulatory approvals under the laws of the Cayman Islands and Brazil prior to making any Offer to Purchase. Any failure to obtain such consents and approvals will constitute an Event of Default under Section 6.01(c).

Section 4.11. Limitation on Liens. Cosan shall not, and shall not permit any Subsidiary to, create or suffer to exist any Lien upon any of its property or assets now owned or hereafter acquired by it or on any Capital Stock of any Subsidiary, securing any obligation unless contemporaneously therewith effective provision is made to secure the Notes and its Notes Guaranty equally and ratably with such obligation for so long as such obligation is so secured. The preceding sentence shall not require Cosan or any Subsidiary to equally and ratably secure the Notes and its Notes Guaranty if the Lien consists of the following:

(i)any Lien existing on the date of this Indenture, and any extension, renewal or replacement thereof or of any Lien referred to in clause (ii), (iii) or (iv) below; provided, however, that the total amount of Debt so secured is not increased;

(ii)any Lien on any property or assets (including Capital Stock of any Person) securing Debt incurred solely for purposes of financing the acquisition, construction or improvement of such property or assets after the date of this Indenture; provided that (A) the aggregate principal amount of Debt secured by the Liens shall not exceed (but may be less than) the cost (i.e., purchase price) of the property or assets so acquired, constructed or improved and (B) the Lien is incurred before, or within 365 days after the completion

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of, such acquisition, construction or improvement and does not encumber any other property or assets of Cosan or any Subsidiary; and provided, further, that to the extent that the property or asset acquired is Capital Stock, the Lien also may encumber other property or assets of the Person so acquired;

(iii)any Lien securing Debt for the purpose of financing all or part of the cost of the acquisition, construction or development of a project; provided that the Liens in respect of such Debt are limited to assets (including Capital Stock of the project entity) and/or revenues of such project; provided, further, that the Lien is incurred before, or within 365 days after the completion of, that acquisition, construction or development and does not apply to any other property or assets of Cosan or any Subsidiary;

(iv)any Lien existing on any property or assets of any Person before that Person’s acquisition (in whole or in part) by, merger into or consolidation with Cosan or any Subsidiary after the date of this Indenture; provided that the Lien is not created in contemplation of or in connection with such acquisition, merger or consolidation;

(v)any Lien imposed by law that was incurred in the ordinary course of business, including, without limitation, carriers’, warehousemen’s and mechanics’ liens and other similar encumbrances arising in the ordinary course of business, in each case for sums not yet due or being contested in good faith by appropriate proceedings;

(vi)any pledge or deposit made in connection with workers’ compensation, unemployment insurance or other similar social security legislation, any deposit to secure appeal bonds in proceedings being contested in good faith to which Cosan or any Subsidiary is a party, good faith deposits in connection with bids, tenders, contracts (other than for the payment of Debt) or leases to which Cosan or any Subsidiary is a party or deposits for the payment of rent, in each case made in the ordinary course of business;

(vii)any Lien in favor of issuers of surety bonds or letters of credit issued pursuant to the request of and for the account of Cosan or any Subsidiary in the ordinary course of business;

(viii)any Lien securing taxes, assessments and other governmental charges, the payment of which are not yet due or are being contested in good faith by appropriate proceedings and for which such reserves or other appropriate provisions, if any, have been established as required by GAAP;

(ix)minor defects, easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business and encumbrances consisting of zoning restrictions, licenses, restrictions on the use of property or assets or minor imperfections in title that do not materially impair the value or use of the property or assets affected thereby, and any leases and subleases of real property that do not interfere with the ordinary conduct of the business of Cosan or any Subsidiary, and which are made on customary and usual terms applicable to similar properties;

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(x)any rights of set-off of any Person with respect to any deposit account of Cosan or any Subsidiary arising in the ordinary course of business;

(xi)any Liens granted to secure borrowings from, directly or indirectly, (A) Banco Nacional de Desenvolvimento Econômico e Social–BNDES, or any other Brazilian governmental development bank or credit agency or (B) any international or multilateral development bank, government-sponsored agency, export-import bank or official export-import credit insurer;

(xii)any Liens on the inventory or receivables of Cosan or any Subsidiary securing the obligations of such Person under any lines of credit or working capital facility or in connection with any structured export or import financing or other trade transaction; provided that the aggregate principal amount of Debt incurred that is secured by receivables that shall fall due in any calendar year shall not exceed (A) with respect to transactions secured by receivables from export sales, 80% of Cosan’s consolidated gross revenues from export sales for the immediately preceding calendar year or (B) with respect to transactions secured by receivables from domestic (Brazilian) sales, 80% of Cosan’s consolidated gross revenues from sales within Brazil for the immediately preceding calendar year; and provided, further, that Advance Transactions shall not be deemed transactions secured by receivables for purpose of the above calculation;

(xiii)Liens securing Hedging Agreements; provided such Hedging Agreements are entered into for bona fide, non-speculative purposes;

(xiv)any Liens securing obligations under the documentation governing the establishment and operation of the Joint Venture pursuant to which Cosan will pledge, among others, certain dividends, interest on capital and shares to Shell or its Affiliates; and

(xv)in addition to the foregoing Liens set forth in clauses (i) through (xiv) above, Liens securing Debt of Cosan or any Subsidiary (including, without limitation, guarantees of Cosan or any Subsidiary) which in aggregate principal amount, at any time of determination, do not exceed 15% of Cosan’s Total Consolidated Assets; provided, that after the consummation of the Joint Venture and during the period the assets of the Sugar and Ethanol Co. and the Downstream Co. are permitted to be consolidated in the calculation of Total Consolidated Assets in a manner substantially consistent (as adjusted to reflect the then current equity ownership in such entity) with the consolidation of such assets on the date the Joint Venture is consummated, Liens securing Debt of Cosan or any Subsidiary permitted pursuant to this clause (xv) shall not exceed 7.5% of Cosan’s Total Consolidated Assets.

Section 4.12. Notes Guaranty by CCL. Upon consummation of the Joint Venture, Cosan will cause CCL to:

(a) execute and deliver to the Trustee within 10 Business Days a supplemental indenture to this Indenture, in substantially the form attached hereto as Exhibit B, pursuant to

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which CCL shall provide a Notes Guaranty unconditionally guaranteeing, on a senior unsecured basis, all of the Company’s obligations under the Notes and this Indenture; and

(b) deliver to the Trustee one or more Opinions of Counsel that such supplemental indenture (i) has been duly authorized, executed and delivered by CCL and (ii) constitutes a valid and legally binding obligation of CCL in accordance with its terms.

Section 4.13. Waiver of Certain Covenants . The Company and the Guarantors may omit in any particular instance to comply with any term, provision or condition set forth in Section 5.03 or Sections 4.07 (except clause (b) thereof) or 4.11, if before or after the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Notes, by Act of such Holders, waive such compliance in such instance with such term, provision or condition, 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 duties of the Trustee in respect of any such term, provisions or condition shall remain in full force and effect.

ARTICLE 5

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 5.01. Limitation on Consolidation, Merger or Transfer of Assets. No Guarantor shall consolidate with or merge with or into, or sell, convey, transfer, dispose of or lease all or substantially all its assets to, any Person, unless:

(i)the surviving Person (if not such Guarantor) shall be a Person organized and existing under the laws of Brazil, or the United States of America, any State thereof or the District of Columbia, or any other country that is a member country of the European Union or of the Organization for Economic Co-operation and Development on the date of this Indenture, and such Person expressly assumes, by an indenture supplemental to this Indenture, executed and delivered to the Trustee, all the obligations of such Guarantor under this Indenture and the Notes and the related Notes Guaranty;

(ii)the surviving Person (if not such Guarantor), if not organized and existing under the laws of Brazil, undertakes, in such supplemental indenture, to pay such Additional Amounts in respect of principal (and premium, if any) and interest as may be necessary in order that every net payment made in respect of the Notes and the related Notes Guaranty after deduction or withholding for or on account of any present or future tax, penalty, fine, duty, assessment or other governmental charge imposed by such other country or any political subdivision or taxing authority thereof or therein shall not be less than the amount of principal (and premium, if any) and interest then due and payable on the Notes and the related Notes Guaranty subject to the same exceptions set forth under Sections 4.06(i), 4.06(ii) and 4.06(iii) but replacing references in such clauses to Brazil with references to such other country;

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(iii)immediately prior to such transaction and immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and

(iv)such Guarantor shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture, if any, comply with this Indenture.

The Trustee shall be entitled to rely exclusively on and shall accept such Officers’ Certificate and Opinion of Counsel as sufficient evidence of the satisfaction of the conditions precedent set forth in this Section 5.01, in which event it shall be conclusive and binding on the Holders.

For the avoidance of doubt, this Section 5.01 will not apply to the consummation of the Joint Venture. Notwithstanding the foregoing, this Section 5.01 will not apply to any sale, conveyance, transfer or disposition resulting from the exercise of any put or call options (an “Option Exercise”) by Cosan, Shell or any other party to the definitive agreements to the Joint Venture if either (i) such Option Exercise does not result in a Rating Decline or (ii) within 360 days after the receipt of any Net Cash Proceeds from such Option Exercise, Cosan or any Subsidiary of Cosan uses the Net Cash Proceeds to (in each case, a “Permitted Reinvestment”):

(i)permanently repay Debt (other than Subordinated Debt) of Cosan or any Subsidiary of Cosan (and in the case of a revolving credit, permanently reduce the commitment thereunder by such amount), in each case owing to a Person other than Cosan or any Subsidiary of Cosan;

(ii)acquire all or substantially all of the assets of a Permitted Business, or a majority of the Voting Stock of another Person that thereupon becomes a Subsidiary engaged in a Permitted Business, or to make capital expenditures or otherwise acquire long-term assets that are to be used in a Permitted Business; or

(iii)  acquire Productive Assets for Cosan or any of its Subsidiaries.

Section 5.02. Successor Substituted. Upon any consolidation or merger, or any sale, assignment, conveyance, transfer, lease or disposition of all or substantially all of the properties and assets of any Guarantor in accordance with Section 5.01 in which such Guarantor is not the continuing obligor under this Indenture, the surviving or transferor Person shall succeed to, and be substituted for, and may exercise every right and power of, such Guarantor under this Indenture with the same effect as if such successor had been named as such Guarantor herein. When a successor assumes all the obligations of its predecessor under this Indenture, the Notes and the related Notes Guaranty, the predecessor shall be released from those obligations; provided that in the case of a transfer by lease, the predecessor shall not be released from thepayment of principal and interest on the Notes or the indemnification obligations owned to the Trustee by such predecessor.

Section 5.03. Notes to Be Secured in Certain Events. If, upon any such consolidation of any Guarantor with or merger of any Guarantor into any other corporation, or upon any

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conveyance, lease or transfer of the property of any Guarantor substantially as an entirety to any other Person, any property or assets of such Guarantor would thereupon become subject to any Lien, then unless such Lien could be created pursuant to Section 4.11 without equally and ratably securing the Notes, such Guarantor, prior to or simultaneously with such consolidation, merger, conveyance, lease or transfer, shall as to such property or assets, secure the Outstanding Notes (together with, if such Guarantor so determines, any other Debt of such Guarantor now existing or hereinafter created which is not subordinate in right of payment to the Notes) equally and ratably with or prior to the Debt which upon such consolidation, merger, conveyance, lease or transfer is to become secured as to such property or assets by such Lien, or shall cause such Notes to be so secured

ARTICLE 6

EVENTS OF DEFAULT AND REMEDIES

Section 6.01. Events of Default. The term “Event of Default” means, when used herein, 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, or as a result of any failure to obtain, any authorization, order, rule, regulation, judgment or decree of any governmental or administrative body or court):

(a)The Company defaults in any payment of interest (including any Additional Amounts) on any Note when the same becomes due and payable, and such Default continues for a period of 30 days;

(b)The Company defaults in the payment of the principal (including any Additional Amounts) of any Note when the same becomes due and payable upon redemption or otherwise;

(c)The Company fails to make an Offer to Purchase and therefore to accept and pay for the Notes tendered when and as required under Section 4.10;

(c)The Company or any Guarantor fails to comply with any of its covenants or agreements in the Notes or this Indenture (other than those referred to in clauses (a), (b) and (c) of this Section 6.01), and such failure continues for 60 days after the notice specified below;

(d)The Company, any Guarantor or any Significant Subsidiary defaults under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Debt for money borrowed by the Company, any such Guarantor or any such Significant Subsidiary (or the payment of which is guaranteed by the Company, any such Guarantor or any such Significant Subsidiary) whether such Debt or guarantee now exists, or is created after the date of this Indenture, which default (i) is caused by failure to pay principal of or premium, if any, or interest on such Debt after giving effect to any grace period provided in such Debt on the date of such default (“Payment Default”) or (i) results in the acceleration of such Debt prior to its express maturity and, in each case, the principal amount of any such Debt, together with the principal amount of any other such Debt under which there has been a Payment Default or the maturity of which has been so accelerated, totals U.S.$50,000,000 (or the equivalent thereof at the time of determination) or more in the aggregate;

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(e)One or more final judgments or decrees for the payment of money in excess of U.S.$50,000,000 (or the equivalent thereof at the time of determination) in the aggregate are rendered against the Company, any Guarantor or any Significant Subsidiary and are not paid (whether in full or in installments in accordance with the terms of the judgment) or otherwise discharged and, in the case of each such judgment or decree, either (ii) an enforcement proceeding has been commenced by any creditor upon such judgment or decree and is not dismissed within 30 days following commencement of such enforcement proceedings or (iii) there is a period of 60 days following such judgment during which such judgment or decree is not discharged, waived or the execution thereof stayed by reason of pending appeal or otherwise;

(f)An involuntary case or other proceeding is commenced against the Company, any Guarantor or any Significant Subsidiary with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect seeking the appointment of a trustee, receiver, síndico, liquidator, custodian or other similar official of it or any substantial part of its Property, and such involuntary case or other proceeding remains undismissed and unstayed for a period of 60 days; or an order for relief is entered against the Company, any Guarantor or any Significant Subsidiary under the bankruptcy laws now or hereafter in effect, and such order is not being contested by the Company, any Guarantor or any Significant Subsidiary, as the case may be, in good faith, or has not been dismissed, discharged or otherwise stayed, in each case within

60   days of being made;

(g)The Company, any Guarantor or any Significant Subsidiary (i) commences a voluntary case or other proceeding seeking liquidation, reorganization, concordata or other relief with respect to itself or its Debts under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (ii) consents to the appointment of or taking possession by a receiver, síndico, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company,any Guarantor or any Significant Subsidiary or for all or substantially all of the Property of the Company, any Guarantor or any Significant Subsidiary or (iii) effects any general assignment for the benefit of creditors (an Event of Default specified in clause (g) or (h) a “bankruptcy default”);

(h)Any event occurs that under the laws of the Cayman Islands or Brazil or any political subdivision thereof or any other country has substantially the same effect as any of the events referred to in any of clause (g) or (h); or

(i)Any Notes Guaranty ceases to be in full force and effect, other than in accordance the terms of this Indenture, or a Guarantor denies or disaffirms its obligations under its Notes Guaranty.

A Default under clause (d) of this Section 6.01 shall not constitute an Event of Default until the Trustee or the Holders of at least 25% in principal amount of the Outstanding Notes notify the Company (and the Trustee if given by the Holders) of the Default and the Company does not cure such Default within the time specified after receipt of such notice.

Section 6.02. Acceleration of Maturity, Rescission and Amendment. If an Event of Default (other than an Event of Default specified in Section 6.01(g), Section 6.01(h) or Section

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6.01(i)) occurs and is continuing, the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Notes may declare all unpaid principal of and accrued interest on all Notes to be due and payable immediately, by a notice in writing to the Company (and to the Trustee, if the notice is given by the Holders), stating that such notice is an “acceleration notice,” and upon any such declaration such amounts shall become due and payable immediately. If an Event of Default specified in Section 6.01(g), Section 6.01(h) or Section 6.01(i) occurs and is continuing, then the principal of and accrued interest on all Notes shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

At any time after a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter provided in this Article, the Holders of a majority in principal amount of the Outstanding Notes by written notice to the Company and the Trustee may rescind or annul such declaration if:

(i)the Company has paid or deposited with the Trustee a sum sufficient to pay (1) all overdue interest on Outstanding Notes, (2) all unpaid principal of the Notes that has become due otherwise than by such declaration of acceleration, (3) to the extent that payment of such interest on the Notes is lawful, interest on such overdue interest (including any Additional Amounts) as provided herein and (4) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

(ii)  all Events of Default have been cured or waived as provided in Section 6.13other than the nonpayment of principal that has become due solely because of acceleration.

No such rescission shall affect any subsequent Default or Event of Default or impair any right consequent thereto.

Section 6.03. Collection Suit by Trustee. If an Event of Default occurs and the Company fails to pay any amounts due and payable in connection therewith, the Trustee, in its own name as trustee of an express trust, (i) may institute a judicial proceeding for the collection of the whole amount then due and payable on such Notes for principal and interest (including Additional Amounts), and interest on any overdue principal and, to the extent that payment of such interest (including Additional Amounts) shall be legally enforceable, upon any overdue installment of interest (including Additional Amounts), at the rate borne by the Notes, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including, without limitation, the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, (ii) may prosecute such proceeding to judgment or final decree and (iii) may enforce the same against the Company or any other obligor upon the Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Notes, wherever situated.

If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders by any available proceeding at law

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or in equity, 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 6.04. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest (including Additional Amounts) on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

Section 6.05. Trustee May Enforce Claims Without Possession of Notes. All rights of action and claims under this Indenture or the Notes may be prosecuted and enforced by the Trustee without the possession of any of the Notes or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name and 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 the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Notes in respect of which such judgment has been recovered.

Section 6.06. Application of Money Collected. Any money collected by the Trustee pursuant to this Article 6 shall be applied in the following order:

FIRST: to the Trustee for amounts due to it hereunder (including, without limitation, under Section 7.06);

SECOND: to Holders for amounts due and unpaid on the Notes for principal and interest (including Additional Amounts), ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and interest (including Additional Amounts), respectively; and

THIRD: to the Company or, to the extent the Trustee collects any amounts from any Guarantor, to such Guarantor or as a court of competent jurisdiction may direct.

The Trustee may fix a record date and Payment Date for any payment to Holders pursuant to this Section 6.06. At least 15 days before such record date, the Company shall mail to each Holder and the Trustee a notice that states the record date, the Payment Date and amount to be paid.

Section 6.07. Limitation on Suits. A Holder may not pursue any remedy with respect to this Indenture or the Notes unless:

(i)the Holder has previously given to the Trustee written notice stating that an Event of Default has occurred and is continuing;

(ii)the Holders of at least 25% in principal amount of the Notes have made a written request to the Trustee to pursue the remedy in respect of such Event of Default;

(iii)such Holder or Holders has offered and provided to the Trustee security or indemnity reasonably satisfactory to the Trustee against any cost, loss, liability or expense to be incurred in compliance with such request;

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(iv)the Trustee does not comply with the request within 60 days after receipt of the request and the offer and provision of security or indemnity; and

(v)no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Notes outstanding.

A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.

Section 6.08. Rights of Holders to Receive Principal and Interest. Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest on the Notes held by such Holder, on or after the respective Payment Dates expressed in the Notes, or to institute suit for the enforcement of any such payment on or after such respective dates, shall not be impaired of affected without the consent of such Holder.

Section 6.09. Restoration of Rights and Remedies. If the Trustee 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 the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Guarantors, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

Section 6.10. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including, without limitation, any claim for the compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due to the Trustee hereunder) and the Holders allowed in any judicial proceedings relative to the Company or any Guarantor, their respective creditors or their respective properties, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.06. Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.11. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Note 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 6 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

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Section 6.12. Control by Holders. The Holders of a majority in principal amount of the Outstanding Notes may direct in writing the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee shall be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of the Holders if such request or direction conflicts with any law or with this Indenture or, subject to Section 7.01, if the Trustee determines it is unduly prejudicial to the rights of other Holders (it being understood that, subject to Sections 7.01 and 7.02, the Trustee shall have no duty to ascertain whether or not such actions or forbearance are unduly prejudicial to such Holders) or would involve the Trustee in personal liability or expense; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such request or direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all costs, losses, liabilities and expenses caused by taking or not taking such action.

Section 6.13. Waiver of Past Defaults and Events of Default. The Holders of a majority in principal amount of the Outstanding Notes by written notice to the Trustee may waive an existing Default or Event of Default and its consequences except (i) a Default or Event of Default in the payment of the principal of or interest on a Note or (ii) a Default or Event of Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Holder affected. When a Default or Event of Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any consequent right.

Section 6.14. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.09, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders 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 6.15. Waiver of Stay or Extension Laws. The Company and each Guarantor covenant (to the extent that it may lawfully do so) that it shall 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, the Notes or the Notes Guaranties, as applicable; and the Company and each Guarantor (to the extent that it may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.

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ARTICLE 7

TRUSTEE AND AGENTS

Section 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing and a Responsible Officer has actual knowledge thereof, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.

(b)Except during the continuance of an Event of Default, (i) the 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 the Trustee; and (ii) in the absence of bad faith on the part of the Trustee, the 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 the Trustee and conforming to the requirements of this Indenture. However, in the case of any certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of the mathematical calculations or other facts stated therein).

(c)The Trustee may not be relieved from liability for its own gross negligence, bad faith or willful misconduct, except that:

(i)  this Section 7.01(c) does not limit the effect of Section 7.01(b);

(ii)the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Trustee was grossly negligent in ascertaining the pertinent facts; and

(iii)the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.13  or exercising any trust or power conferred upon the Trustee under this Indenture.

(d)Neither the Trustee nor any Agent shall be liable for interest on any money received by it except as the Trustee and such Agent may agree in writing with the Company.

(e)Money held in trust by the Trustee or any Agent need not be segregated from other funds except to the extent required by law.

(f)No provision of this Indenture shall require the Trustee or any Agent to expend or risk its own funds or otherwise incur personal 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 to believe that repayment of such funds and/or adequate indemnity against such risk or liability is not satisfactorily assured to it.

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(g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01.

Section 7.02. Rights of Trustee and Agents . (a) The Trustee may rely upon, and shall be protected in acting or refraining from acting based upon, any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in any such document.

(b)Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate, the written advice of a qualified tax expert or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on any Officers’ Certificate, qualified tax expert’s written advice or Opinion of Counsel.

(c)The Trustee may act through agents and shall not be responsible for the willful misconduct or negligence of any agent appointed with due care.

(d)Any request, direction, order or demand of the Company or any Guarantor mentioned herein shall be sufficiently evidenced by an Officers’ Certificate of the Company or such Guarantor (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors of the Company or any Guarantor may be evidenced by a Board Resolution.

(e)The Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture at the request, order or direction of any of the Holders pursuant to the provisions of this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities that might be incurred thereby.

(f)The Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Indenture.

(g)The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided that the conduct of the Trustee does not constitute willful misconduct, gross negligence or bad faith.

(h)The Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture, the Notes and any Notes Guaranty shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

(i)The 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 unless requested in writing by the Holders of not less than a majority in aggregate principal amount of the Notes Outstanding; provided that if the payment within a reasonable time

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to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not satisfactorily assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require from the Holders indemnity satisfactory to the Trustee against such expenses or liabilities as a condition to proceeding; the expenses of every such investigation shall be paid by the Company or, if paid by the Trustee, shall be reimbursed by the Company upon demand.

(j)Neither the Trustee nor any Paying Agent shall be required to invest, or shall be under any liability for interest, on any moneys at any time received by it pursuant to any of the provisions of this Indenture, the Notes or any Notes Guaranty except as the Trustee or any Paying Agent may otherwise agree with the Company in writing. Such moneys need not be segregated from other funds except to the extent required by mandatory provisions of law.

(k)In no event shall the Trustee be liable for any special, indirect, consequential or punitive loss or damage of any kind whatsoever (including, but not limited to, lost profits), even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

(l)The permissive rights of the Trustee enumerated herein shall not be construed as duties of the Trustee.

(m)The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities as New York Paying Agent, Registrar and Transfer Agent hereunder, each Agent, and each other agent, custodian and other Person employed to act hereunder.

(n)With the delivery of this Indenture, each of the Company and the Guarantors is furnishing to the Trustee, and from time to time thereafter may furnish, an Officers’ Certificate identifying and certifying the incumbency and specimen signatures of its respective Officers. Until the Trustee receives a subsequent Officers’ Certificate, the Trustee shall be entitled to conclusively rely on the last such Officers’ Certificate delivered to it for purposes of determining the Officers of the Company and the Guarantors, as applicable.

(o)None of the Trustee or any Agent shall have any liability or responsibility with respect to, or obligation or duty to monitor, determine or inquire (i) as to the Company’s or any Guarantor’s compliance with any covenant under this Indenture (other than the covenant to make payment on the Notes), or (ii) as to whether or not any Rating Agency has adjusted the rating of the Notes.

Section 7.03. Individual Rights of Trustee and Agents. The Trustee and any Agent or any other agent of the Company or of the Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee, Agent or such other agent.

Section 7.04. Trustee’s Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of any offering materials, this Indenture, the

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Notes or any Notes Guaranty, it shall not be accountable for the Company’s use of the proceeds from the Notes, and it shall not be responsible for any statement of the Company in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Trustee’s certificate of authentication.

Section 7.05. Notice of Defaults and Events of Default . If a Default or Event of Default occurs and is continuing, and if it is known to the Responsible Officer, the Trustee shall mail to each Holder notice of the Default or Event of Default within 90 days after a Responsible Officer acquires actual knowledge of such Default or Event of Default. Except in the case of a Default or Event of Default in payment of principal of or interest on any Note, the Trustee may withhold the notice and shall be protected from withholding the notice if and so long as a Responsible Officer of the Trustee in good faith determines that withholding the notice is in the interests of Holders. For all purposes of this Indenture and the Notes, the Trustee shall not be deemed to have knowledge of a Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof.

Section 7.06. Compensation and Indemnity. The Company agrees to pay to the Trustee and each Agent from time to time such compensation as shall be agreed upon in writing for its services. The Trustee’s compensation shall not be limited by any law regarding compensation of a trustee of an express trust. The Company agrees to reimburse promptly the Trustee and each Agent upon request for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s and each Agent’s agents, counsel, accountants and experts. Payments of any such expenses by the Company to the Trustee or such Agent, as the case may be, shall be made free and clear of and without withholding or deduction for or on account of any present or future taxes, duties, assessments, fees or other governmental charges of whatever nature (and any fines, penalties or interest related thereto) imposed or levied by or on behalf of Brazil or any political subdivision or authority thereof or therein having power to tax, unless such withholding or deduction is required by law. In that event, the Company shall pay to the Trustee or such Agent, as the case may be, such Additional Amounts as may be necessary in order that every net payment made by the Company to the Trustee and such Agent, as the case may be, after deducting or withholding for or on account of any present or future tax, penalty, fine, duty, assessment or other governmental charge imposed upon or as a result of such payment by Brazil or any political subdivision or taxing authority thereof or therein shall not be less than the amount then due and payable to the Trustee or such Paying Agent, as the case may be. Each of the Company and the Guarantors shall, jointly and severally, indemnify, defend and hold each of the Trustee and the Agents harmless from and against any and all loss, claim, damage, cost, liability or expense (including, without limitation, reasonable attorneys’ fees and expenses) incurred by it without gross negligence or bad faith on its part arising out of and in connection with the administration of this Indenture, the performance of its respective duties hereunder and/or the exercise of its rights hereunder, including, without limitation, the costs and expenses of defending itself against any claim or liability and of complying with any process served upon it or any of its officers in connection with the exercise or performance of any of its powers or duties or exercise of its rights under this Indenture and any and all tax liabilities, which, for the avoidance of doubt, shall include both Brazilian and U.S. taxes and associated penalties, costs, claims, actions, damages,

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expenses or demands which any of them may incur or which may be made against any of them as a result of or in connection with the appointment of or the exercise of the powers, rights, obligations and duties hereunder. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company or any Guarantor of its obligations hereunder. The Trustee may have separate counsel and the Company shall pay the fees and expenses of such counsel.

To secure the payment obligations of the Company and the Guarantors in this Section 7.06, the Trustee shall have a lien prior to the Notes on all money or property held or collected by the Trustee or any Agent, except that held in trust to pay principal of and interest on particular Notes.

The obligations of the Company pursuant to this Section 7.06 shall survive the satisfaction and discharge of this Indenture, the payment of the Notes and/or the resignation or removal of the Trustee or any Agent. When the Trustee or any Agent incurs expenses after the occurrence of a bankruptcy default, the expenses are intended to constitute expenses of administration under the Bankruptcy Law.

The Company and each Guarantor acknowledges that the Paying Agents make no representations as to the interpretation or characterization of the transactions herein undertaken for tax or any other purpose, in any jurisdiction. The Company and each Guarantor represents that it has fully satisfied itself as to any tax impact of this Indenture before agreeing to the terms herein, and is responsible for any and all federal, state, local, income, franchise, withholding, value added, sales, use, transfer, stamp or other taxes imposed by any jurisdiction in respect of this Indenture.

The Company and each Guarantor agrees to pay any and all stamp and other documentary taxes or duties which may be payable in connection with the execution, delivery, performance and enforcement of this Indenture by the Trustee or any Agent.

Section 7.07. Replacement of Trustee. The Trustee may resign at any time by so notifying the Company in writing. The Holders of a majority in principal amount of the Outstanding Notes may remove the Trustee by so notifying the Trustee in writing and may appoint a successor Trustee. The Company shall remove the Trustee if:

(i)  the Trustee fails to comply with Section 7.09;

(ii)  the Trustee is adjudged a bankrupt or insolvent;

(iii)  a receiver or other public officer takes charge of the Trustee or its property;

or

(iv)   the Trustee otherwise becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee) the Company shall promptly appoint a successor Trustee.

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A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.06.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority in principal amount of the Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee fails to comply with Section 7.09, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

Notwithstanding the replacement of the Trustee pursuant to this Section 7.07, the Company’s obligation under Section 7.06 shall continue for the benefit of the retiring Trustee.

Section 7.08. Successor Trustee by Merger . If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business (including this transaction) or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.

In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such adopted certificates shall have the full force of all provisions within the Notes or in this Indenture relating to the certificate of the Trustee.

Section 7.09. Eligibility; Disqualification. The Trustee hereunder shall at all times be a corporation, bank or trust company organized and doing business under the laws of the United States or any state thereof (i) which is authorized under such laws to exercise corporate trust power, (ii) is subject to supervision or examination by governmental authorities, (iii) shall have at all times a combined capital and surplus of at least U.S.$50,000,000 as set forth in its most recent published annual report of condition and (iv) shall have a Corporate Trust Office in The City of New York. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 7.09, it shall resign immediately in the manner and with the effect specified in Section 7.07.

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ARTICLE 8

DISCHARGE OF INDENTURE; DEFEASANCE

Section 8.01. Discharge of Liability on Notes. When (i) the Company delivers to the Trustee all Outstanding Notes (other than Notes replaced pursuant to Section 2.09) for cancellation or (ii) all Outstanding Notes have become due and payable and the Company deposits in trust, for the benefit of the Holders, with the Trustee finally collected funds sufficient to pay at Maturity all Outstanding Notes and interest thereon (other than Notes replaced pursuant to Section 2.09), and if in any such case the Company pays all other sums payable hereunder by the Company, then this Indenture, and the obligations of the Company and the Guarantors pursuant hereto, shall, subject to Sections 8.01(b) and 8.06, cease to be of further effect.

(a)  Subject to Sections 8.01(b), 8.02 and 8.06, the Company at any time may terminate (i)all its obligations under this Indenture and the Notes (“legal defeasance option”) or (ii) its obligations under Sections 4.07 (other than clause (b)), 4.11, 5.01(iii) and 5.03 and the operation of Sections 6.01(a), 6.01(b), 6.01(c) and 6.01(d) (“covenant defeasance option”). The legal defeasance option may be exercised notwithstanding any prior exercise of the covenant defeasance option. Upon exercise by the Company of the legal defeasance option or the covenant defeasance option, each Guarantor’s obligations under its Notes Guaranty will terminate.

If the legal defeasance option is exercised, payment of the Notes may not be accelerated because of an Event of Default with respect thereto. If the covenant defeasance option is exercised, payment of the Notes may not be accelerated because of an Event of Default specified in Section 6.01(a), 6.01(b) or 6.01(c).

The Trustee shall acknowledge satisfaction and discharge of the Company’s obligations hereunder (except those specified in Section 8.01(b)) on written demand of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel (each stating that all conditions precedent herein provided relating to the satisfaction and discharge of this Indenture have been complied with) and at the cost and expense of the Company

(b) Notwithstanding Sections 8.01(a) and 8.01(b), the Company’s obligations pursuant to Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.09, 4.06, 7.06, 7.07, 8.04, 8.05 and 8.06 shall survive until the Notes have been paid in full. Thereafter, the obligations of the Company pursuant to Sections 7.06, 7.07, 8.04 and 8.05 shall survive. Furthermore, each Guarantor’s obligations to pay fully and punctually all amounts payable by the Company to the Trustee under this Indenture shall survive.

Section 8.02. Conditions to Defeasance. The Company may exercise the legal defeasance option or the covenant defeasance option only if:

(a) The Company irrevocably deposits or causes to be deposited with the Trustee as trust funds in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders (the “defeasance trust”) pursuant to an irrevocable trust and security agreement in form and substance satisfactory to the Trustee, money or U.S. Government Obligations, or a

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combination thereof, sufficient for the payment of principal of and interest on all the Notes to Maturity;

(b)The Company delivers to the Trustee a certificate from an internationally recognized firm of independent accountants expressing their opinion that the payments of principal of and interest on the Notes when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment and after payment of all federal, state and local taxes or other charges or assessments in respect thereof payable by the Trustee shall provide cash at such times and in such amounts as shall be sufficient to pay principal of and interest on all the Notes when due at Maturity;

(c)One hundred and twenty-three days pass after the deposit is made in accordance with the terms of Section 8.02(a) and during such 123-day period no Default or Event of Default specified in Section 6.01(h) occurs which is continuing at the end of the period;

(d)No Default or Event of Default has occurred and is continuing on the date of such deposit and after giving effect thereto;

(e)The deposit does not constitute a default or event of default under any other agreement binding on the Company;

(f)The Company delivers to the Trustee an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is not qualified as, a regulated investment company under the U.S. Investment Company Act of 1940, as amended;

(g)The Company delivers to the Trustee an Opinion of Counsel stating that, under Brazilian law, Holders (other than Brazilian Persons) shall not recognize gain for Brazilian tax purposes and payments from the defeasance trust to any such Holder shall not be subject to withholding payments under Brazilian law;

(h)The Company delivers to the Trustee an Opinion of Counsel, in form and substance reasonably satisfactory to Trustee, to the effect that, after the passage of 123 days following the deposit, the trust funds shall not be subject to any applicable bankruptcy, insolvency, reorganization or similar law affecting creditors’ rights generally; and

(i)The Company delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Notes as contemplated by this Article 8 have been complied with.

Before or after a deposit, the Company may make arrangements satisfactory to the Trustee for the redemption of Notes at a future date in accordance with Article 3.

Section 8.03. Application of Trust Money. The Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to Section 8.02. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent or Paying Agents and in accordance with this Indenture to the payment of principal of and interest on the Notes.

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Section 8.04. Repayment to Company. Upon termination of the trust established pursuant to Section 8.02, the Trustee and each Paying Agent shall promptly pay to the Company upon written request, any excess cash or U.S. Government Obligations held by them in accordance with Section 4.03.

Section 8.05. Indemnity for U.S. Governmental Obligations. The Company and each Guarantor, jointly and severally, agrees to pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.

Section 8.06. Reinstatement. If the Trustee or any Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article 8 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Company and the Guarantors under this Indenture, the Notes and the Notes Guaranties shall be revived and reinstated as though no deposit had occurred pursuant to this Article 8 until such time as the Trustee or such Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article 8; provided, however, that, if the Company or any Guarantor has made any payment of principal of or interest on any Notes because of the reinstatement of its obligations, the Company and the Guarantors shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or such Paying Agent.

ARTICLE 9

AMENDMENTS

Section 9.01. Without Consent of Holders. The Company, when authorized by a Board Resolution, and the Trustee may amend or supplement this Indenture or the Notes, without notice to or consent or vote of any Holder for the following purposes:

(i)to cure any ambiguity, omission, defect or inconsistency; provided that such amendment or supplement does not materially and adversely affect the rights of any Holder;

(ii)  to comply with Section 5.01;

(iii)  to provide for a Substituted Issuer in accordance with Article 12;

(iv)  to add to the covenants of the Company or the Guarantors for the benefit of the Holders;

(v)  to surrender any right herein conferred upon the Company or the Guarantors;

(vi)to evidence and provide for the acceptance of an appointment by a successor Trustee;

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(vii)  to provide for the issuance of additional Notes;

(viii)to provide for any Notes Guaranty of the Notes, to secure the Notes or to confirm and evidence the release, termination or discharge of any Notes Guaranty of or Lien securing the Notes when such release, termination or discharge is permitted by this Indenture; or

(ix)to make any other change that does not materially and adversely affect the rights of any Holder or to conform this Indenture to the description of the Notes in the Offering Memorandum.

Upon the written request of the Company, accompanied by a Board Resolution authorizing the execution of any supplemental indenture, and upon receipt by the Trustee of the documents described in Section 9.04, the Trustee shall join with the Company in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations which may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture which affects its own rights, duties or immunities under this Indenture or otherwise.

Each Guarantor must consent to any amendment or supplement under this Section 9.01.

Section 9.02. With Consent of Holders. Except as specified in Section 9.01, the Company, when authorized by a Board Resolution, and the Trustee, together, may amend or supplement this Indenture or the Notes with the written consent of the Holders of at least a majority in principal amount of the Outstanding Notes for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or modifying in any manner the rights of the Holders under this Indenture, and the Holders of at least a majority in principal amount of the Outstanding Notes may, except as set forth below, waive any past Default or compliance with any provision of this Indenture; provided, however, that, without the consent of each Holder affected, an amendment may not:

(i)  reduce the rate of or extend the time for payment of interest on any Note;

(ii)  reduce the principal of any Note;

(iii)reduce the amount payable upon the redemption of any Note or change the time at which any Note may be redeemed;

(iv)  change the currency for payment of principal of or interest on any Note;

(v)impair the right to institute suit for the enforcement of any payment on or with respect to any Note;

(vi)  waive a Default or Event of Default in payment of principal of and interest on the Notes;

(vii)reduce the principal amount of Notes whose Holders must consent to any amendment, supplement or waiver;

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(viii)  make any change in this first paragraph of this Section 9.02;

(ix)modify or change any provision of the Indenture affecting the ranking of the Notes or any Notes Guaranty in a manner adverse to the Holders of the Notes; or

(x)  make any change in any Notes Guaranty that would adversely affect the Noteholders.

Upon the written request of the Company, accompanied by a Board Resolution authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of the Holders as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.04 hereof, the Trustee shall join with the Company in the execution of such supplemental indenture but the Trustee shall not be obligated to enter into any such supplemental indenture which affects its own rights, duties or immunities under this Indenture or otherwise.

The Company shall mail to Holders prior written notice of any amendment proposed to be adopted under this Section 9.02.

It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof.

After an amendment under this Section 9.02 becomes effective, the Company shall mail to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02.

Each Guarantor must consent to the amendment, supplement or waiver under this Section 9.02.

Section 9.03. Notation on or Exchange of Notes. If an amendment changes the terms of a Note, the Company may require the Holder to deliver the Note to the Trustee. If so instructed by the Company in writing, the Trustee may place an appropriate notation on the Note regarding the changed terms and return it to the Holder. Alternatively, if the Company so determines, the Company in exchange for the Note shall issue and the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment.

Section 9.04. Trustee to Sign Amendments. The Trustee shall sign any amendment authorized pursuant to this Article 9 if the amendment, waiver or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. In signing such amendment, waiver or supplement, the Trustee shall be entitled to receive indemnity satisfactory to the Trustee and to receive, and shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that such amendment, waiver or supplemental indenture is authorized or permitted by this Indenture, that it is not inconsistent herewith, and

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that it shall be valid and binding upon the Company and the Guarantors in accordance with its terms.

Section 9.05. Payment for Consent. Neither the Company nor any of its Affiliates shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid or agreed to be paid to all Holders which so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement.

ARTICLE 10

GUARANTEE

Section 10.01. The Notes Guaranty. Subject to the provisions of this Article, each Guarantor hereby irrevocably and unconditionally guarantees, jointly and severally, on an unsecured basis, the full and punctual payment (whether at Maturity, upon redemption, acceleration, or otherwise) of the principal of, premium, if any, and interest on, and all other amounts payable under, each Note, and the full and punctual payment of all other amounts payable by the Company under this Indenture. Upon failure by the Company to pay punctually any such amount, each Guarantor shall forthwith on demand pay the amount not so paid at the place and in the manner specified in this Indenture.

Section 10.02. Guaranty Unconditional. The obligations of each Guarantor hereunder are unconditional and absolute and, without limiting the generality of the foregoing, will not be released, discharged or otherwise affected by:

(i)any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Company under this Indenture or any Note, by operation of law or otherwise;

(ii)  any modification or amendment of or supplement to this Indenture or any Note;

(iii)any change in the corporate existence, structure or ownership of the Company, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Company or its assets or any resulting release or discharge of any obligation of the Company contained in this Indenture or any Note;

(iv)the existence of any claim, set-off or other rights which the Guarantor may have at any time against the Company, the Trustee or any other Person, whether in connection with the Indenture or any unrelated transactions; provided that nothing herein prevents the assertion of any such claim by separate suit or compulsory counterclaim;

(v)any invalidity or unenforceability relating to or against the Company for any reason of this Indenture or any Note, or any provision of applicable law or regulation

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purporting to prohibit the payment by the Company of the principal of or interest on any Note or any other amount payable by the Company under the Indenture; or

(vi) any other act or omission to act or delay of any kind by the Company, the Trustee or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of or defense to such Guarantor’s obligations hereunder.

Section 10.03. Discharge; Reinstatement. Each Guarantor’s obligations hereunder will remain in full force and effect until the principal of, premium, if any, and interest on the Notes and all other amounts payable by the Company under this Indenture have been paid in full. If at any time any payment of the principal of, premium, if any, or interest on any Note or any other amount payable by the Company under this Indenture is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Company or otherwise, each Guarantor’s obligations hereunder with respect to such payment will be reinstated as though such payment had been due but not made at such time.

Section 10.04. Waiver by the Guarantors . Each Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against the Company or any other Person.

Section 10.05. Subrogation and Contribution. Upon making any payment with respect to any obligation of the Company under this Article, the Guarantor making such payment will be subrogated to the rights of the payee against the Company with respect to such obligation; provided that the Guarantor may not enforce either any right of subrogation, or any right toreceive payment in the nature of contribution, or otherwise, from any other Guarantor, with respect to such payment so long as any amount payable by the Company hereunder or under the Notes remains unpaid.

Section 10.06. Stay of Acceleration. If acceleration of the time for payment of any amount payable by the Company under this Indenture or the Notes is stayed upon the insolvency, bankruptcy or reorganization of the Company, all such amounts otherwise subject to acceleration under the terms of this Indenture are nonetheless payable by the Guarantors hereunder forthwith on demand by the Trustee or the Holders.

Section 10.07. Limitation on Amount of Guaranty. Notwithstanding anything to the contrary in this Article, each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Notes Guaranty of such Guarantor not constitute a fraudulent conveyance under applicable fraudulent conveyance provisions of the laws of Brazil, the United States Bankruptcy Code or any comparable provision of state law. To effectuate that intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of each Guarantor under its Notes Guaranty are limited to the maximum amount that would not render the Guarantor’s obligations subject to avoidance under applicable fraudulent conveyance provisions of the laws of Brazil, the United States Bankruptcy Code or any comparable provision of state law.

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Section 10.08. Execution and Delivery of Guaranty. The execution by each Guarantor of this Indenture (or a supplemental indenture in the form of Exhibit B) evidences the Notes Guaranty of such Guarantor, whether or not the Person signing as an Officer of such Guarantor still holds that office at the time of authentication of any Note.

Section 10.09. Release of Guaranty. The Notes Guaranty of a Guarantor will terminate upon:

(i)a sale or other disposition (including by way of consolidation or merger) of the Guarantor or the sale or disposition of all or substantially all the assets of the Guarantor (in each case other than to the Company or a Subsidiary) otherwise permitted by this Indenture;

(ii)if the Notes Guaranty was required pursuant to the terms of this Indenture, the cessation of the circumstances requiring the Notes Guaranty; or

(iii)  defeasance or discharge of the Notes, as provided in Article 8.

Upon delivery by the Company to the Trustee of an Officers’ Certificate and an Opinion of Counsel stating that all conditions precedent to the release of the Guarantor from its obligations under its Notes Guaranty have been satisfied, the Trustee will execute any documents reasonably requested by the Company in writing in order to evidence the release of the Guarantor from its obligations under its Notes Guaranty.

ARTICLE 11

MEETINGS OF HOLDERS

Section 11.01. Purposes for Which Meetings May Be Called. A meeting of Holders may be called at any time and from time to time pursuant to the provisions of this Article 11 for any of the following purposes:

(a)to give any notice to the Company or to the Trustee, or to give any directions to the Trustee, or to waive or to consent to the waiving of any Default or Event of Default hereunder and its consequences, or to take any other action authorized to be taken by Holders pursuant to any of the provisions of Article 6;

(b)  to remove the Trustee or appoint a successor Trustee pursuant to the provisions of Article 7;

(c)to consent to an amendment, supplement or waiver pursuant to the provisions of Section 9.02; or

(d)to take any other action authorized to be taken by or on behalf of the Holders of any specified aggregate principal amount of the Notes under any other provision of this Indenture, or authorized or permitted by law.

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Section 11.02. Manner of Calling Meetings. The Trustee may at any time call a meeting of Holders to take any action specified in Section 11.01, to be held at such time and at such place in The City of New York, New York or elsewhere as the Trustee shall determine. Notice of every meeting of Holders, setting forth the time and place of such meeting and in general terms the action proposed to be taken at such meeting, shall be delivered in accordance with Section 13.02 by the Trustee not less than 10 nor more than 60 days prior to the date fixed for a meeting.

Any meeting of Holders shall be valid without notice if the Holders of all Outstanding Notes are present in Person or by proxy, or if notice is waived before or after the meeting by the Holders of all Outstanding Notes, and if the Company and the Trustee are either present by duly authorized representatives or have, before or after the meeting, waived notice.

Section 11.03. Call of Meetings by Company or Holders. In case at any time the Company, pursuant to a Board Resolution, or the Holders of not less than 10% in aggregate principal amount of the Outstanding Notes shall have requested the Trustee to call a meeting of Holders to take any action specified in Section 11.01, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed the notice of such meeting within 20 days after receipt of such request, then the Company or the Holders of Notes in the amount above specified may determine the time and place in The City of New York, New York or elsewhere for such meeting and may call such meeting for the purpose of taking such action, by delivering or causing to be delivered notice thereof as provided in Section 11.02.

Section 11.04. Who May Attend and Vote at Meetings. To be entitled to vote at any meeting of Holders, a Person shall (i) be a registered Holder of one or more Notes, or (ii) be a Person appointed by an instrument in writing as proxy for the registered Holder or Holders of Notes. The only Persons who shall be entitled to be present or to speak at any meeting of Holders shall be the Persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.

Section 11.05. Regulations May Be Made by Trustee; Conduct of the Meeting; Voting Rights; Adjournment. Notwithstanding any other provision of this Indenture, the Trustee maymake such reasonable regulations as it may deem advisable for any action by or any meeting of Holders, in regard to proof of the holding of Notes and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, and submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall think appropriate. Such regulations may fix a record date and time for determining the Holders of record of Notes entitled to vote at such meeting, in which case those and only those Persons who are Holders of Notes at the record date and time so fixed, or their proxies, shall be entitled to vote at such meeting whether or not they shall be such Holders at the time of the meeting.

The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders as provided in Section 11.03, in which case the Company or the Holders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent

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secretary of the meeting shall be elected by vote of the Holders of a majority in principal amount of the Notes represented at the meeting and entitled to vote.

At any meeting each Holder or proxy shall, subject to the provisions of Section 11.04, be entitled to one vote for each U.S.$1,000 principal amount of Notes held or represented by him or her; provided, however, that no vote shall be cast or counted at any meeting in respect of any Notes challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman may adjourn any such meeting if he is unable to determine whether any Holder or proxy shall be entitled to vote at such meeting. The chairman of the meeting shall have no right to vote other than by virtue of Notes held by him or instruments in writing as aforesaid duly designating him as the proxy to vote on behalf of other Holders. Any meeting of Holders duly called pursuant to the provisions of Section 11.02 or Section 11.03 may be adjourned from time to time by vote of the Holders of a majority in aggregate principal amount of the Outstanding Notes represented at the meeting and entitled to vote, and the meeting may be held as so adjourned without further notice.

Section 11.06. Voting at the Meeting and Record to Be Kept. The vote upon any resolution submitted to any meeting of Holders shall be by written ballots on which shall be subscribed the signatures of the Holders of Notes or of their representatives by proxy and the principal amount of the Notes voted by the ballot. The permanent chairman of the meeting shall appoint two inspectors of votes, who shall count all votes cast at the meeting for or against any resolution and shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to such record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more Persons having knowledge of the facts, setting forth a copy of the notice of the meeting and showing that such notice was mailed as provided in Section 11.02. The record shall be signed and verified by the affidavits of the permanent chairman and the secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting.

Any record so signed and verified shall be conclusive evidence of the matters therein stated.

Section 11.07. Exercise of Rights of Trustee or Holders May Not Be Hindered or Delayed by Call of Meeting. Nothing contained in this Article 11 shall be deemed or construedto authorize or permit, by reason of any call of a meeting of Holders or any rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee or to the Holders under any of the provisions of this Indenture or of the Notes.

Section 11.08. Procedures Not Exclusive. The procedures set forth in this Article 11 are not exclusive and the rights and obligations of the Company, the Trustee and the Holders under other Articles of this Indenture (including, without limitation, Articles 6, 7, 8 and 9) shall in no way be limited by the provisions of this Article 11.

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Section 11.09. Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or a meeting of Holders. The Agents may make reasonable rules for their functions.

ARTICLE 12

SUBSTITUTION OF THE ISSUER

Section 12.01. Substitution of the Issuer. The Company may, without the consent of any Holder of the Notes, be substituted by (a) Cosan or (b) any Wholly-Owned Subsidiary of Cosan as principal debtor in respect of the Notes (in that capacity, the “Substituted Issuer”); provided that the following conditions are satisfied:

(a)such documents will be executed by the Substituted Issuer, the Company, the Guarantors and the Trustee as may be necessary to give full effect to the substitution, including a supplemental indenture under which the Substituted Issuer assumes all of the Company’s obligations under this Indenture and the Notes and, unless all of the Guarantors’ then existing Notes Guaranties remain in full force and effect, substitute Notes Guaranties issued by the relevant Guarantors in respect of the Notes and this Indenture (collectively, the “Issuer Substitution Documents”);

(b)if the Substituted Issuer is organized in a jurisdiction other than the Cayman Islands, the Issuer Substitution Documents will contain covenants (1) to ensure that each Holder of the Notes has the benefit of a covenant in terms corresponding to the obligations of the Company in respect of the payment of Additional Amounts (but replacing references to the Cayman Islands with references to such other jurisdiction); and (2) to indemnify each Holder and beneficial owner of the Notes against all taxes or duties (a) which arise by reason of a law or regulation in effect or contemplated on the effective date of the substitution, which may be incurred or levied against such Holder or beneficial owner of the Notes as a result of the substitution and which would not have been so incurred or levied had the substitution not been made and (b) which are imposed on such Holder or beneficial owner of the Notes by any political subdivision or taxing authority of any country in which such Holder or beneficial owner of the Notes resides or is subject to any such tax or duty and which would not have been so imposed had the substitution not been made;

(c)the Company will deliver, or cause the delivery of, to the Trustee an Opinion of Counsel from internationally recognized counsel in the jurisdiction of organization of the Substituted Issuer and an Opinion of Counsel from United States counsel as to the validity, legally binding effect and enforceability of the Issuer Substitution Documents and certifying that all conditions precedent to the substitution of the Company have been satisfied, as well as an Officers’ Certificate as to compliance with the provisions described under this section;

(d)the Substituted Issuer will appoint a Process Agent in the Borough of Manhattan in The City of New York to receive service of process on its behalf in relation to any legal action or proceedings arising out of or in connection with the Notes, this Indenture and the Issuer Substitution Documents;

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(e)any credit rating assigned to the Notes will remain the same or be improved when the Substituted Issuer replaces and substitutes the Company in respect of the Notes;

(f)  no Event of Default has occurred or is continuing; and

(g)the substitution will comply with all applicable requirements under the laws of the jurisdiction of organization of the Substitute Issuer, the Cayman Islands and Brazil.

Upon the execution of the Issuer Substitution Documents and compliance with the conditions set forth in this Section 12.01 relating to the substitution, the Substituted Issuer will be deemed to be named in the Notes and this Indenture as the principal debtor in place of the Company and to have assumed all obligations of the Company under the Notes and this Indenture, and the Company will be released from all of its obligations under the Notes and this Indenture, including, without limitation, compliance with the covenants described under Section 4.09.

Not later than 10 Business Days after the execution of the Issuer Substitution Documents, the Substituted Issuer will give notice thereof to the Holders of the Notes in accordance with Section 13.02.

Notwithstanding any other provision of this Indenture, each Guarantor will (unless it is the Substituted Issuer) do or cause to be done all acts and things and promptly execute and deliver any documents or instruments, including any substitute Notes Guaranty and a legal opinion of internationally recognized Brazilian counsel, that may be required, or that the Trustee may reasonably request, to ensure that such Guarantor’s Notes Guaranty is in full force and effect for the benefit of the Holders and beneficial owners of the Notes following the substitution.

ARTICLE 13

MISCELLANEOUS

Section 13.01. Provisions of Indenture and Notes for the Sole Benefit of Parties and Holders of Notes. Nothing in this Indenture or the Notes, expressed or implied, shall be given toany Person other than the parties hereto and their successors hereunder and the Holders of the Notes any benefit or any legal or equitable right, remedy or claim under this Indenture or the Notes.

Section 13.02. Notices. Any request, demand, authorization, direction, notice, consent, waiver or other communication or document provided or permitted by this Indenture to be made upon, given, provided or furnished to, or filed with, any party to this Indenture shall be in English and in writing and shall, except as otherwise expressly provided herein, be deemed to have been received only upon actual receipt thereof by prepaid first class mail, courier or facsimile, addressed to the relevant party as follows:

To the Company:

c/o Cosan S.A. Indústria e Comércio

Av. Pres. Juscelino Kubitschek, 1726 - 6º andar

62

04543-000 – São Paulo, SP

Brasil

Attention: Marcelo Martins

Facsimile: (55 11) 3897-9799

With a copy to:

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, New York 10017 USA

Attention: Manuel Garciadiaz, Esq.

Facsimile: (212) 450-4800

To the Trustee, New York Paying Agent, Transfer Agent and Registrar:

The Bank of New York Mellon

101 Barclay Street, Floor 4 East

New York, New York 10286

Attention: International Corporate Trust

Telephone: (212) 815-5603

To the London Paying Agent:

The Bank of New York Mellon (London Branch)

One Canada Square

Canary Wharf

London E14 5AL

United Kingdom

To the Paying Agent and Transfer Agent in Luxembourg:

The Bank of New York Mellon (Luxembourg) S.A.

Vertigo Building – Polaris

2-4 Rue Eugene Ruppert

L-2453

Luxembourg

Notices or communications to a Guarantor will be deemed given if given to the Company

Any party by notice to the other parties may designate additional or different addresses for subsequent notices or communications.

Where this Indenture provides for the giving of notice to Holders, such notice shall be deemed to have been given upon (i) the mailing of first class mail, postage prepaid, of such notice to Holders of the Notes at their registered addresses as recorded in the Register; and (ii) for so long as the Notes are admitted to trading on the Euro MTF of the Luxembourg Stock Exchange and it is required by the rules of the Luxembourg Stock Exchange, notices to the

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Holders of the Notes shall be published (i) in English in a leading newspaper having general circulation in Luxembourg or, if such publication is not practicable, in one other leading English language daily newspaper with general circulation in Europe, such newspaper being published on each Business Day in morning editions, whether or not it shall be published in Saturday, Sunday or holiday editions or (ii) on the website of the Luxembourg Stock Exchange if allowed by the rules of the Luxembourg Stock Exchange.

The Company shall also cause all other such publications of such notices as may be required from time to time by applicable Brazilian law, including, without limitation, those required under the applicable regulations issued by the CVM.

Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed to a Holder in the manner provided above, it is duly given, whether or not the addressee receives it.

In respect of this Indenture, the Trustee shall not have any duty or obligation to verify or confirm that the Person sending instructions, directions, reports, notices or other communications or information by electronic transmission is, in fact, a Person authorized to give such instructions, directions, reports, notices or other communications or information on behalf of the party purporting to send such electronic transmission; and the Trustee shall not have any liability for any losses, liabilities, costs or expenses incurred or sustained by any party as a result of such reliance upon or compliance with such instructions, directions, reports, notices or other communications or information. Each other party agrees to assume all risks arising out of the use of electronic methods to submit instructions, directions, reports, notices or other communications or information to the Trustee, including, without limitation, the risk of the Trustee acting on unauthorized instructions, notices, reports or other communications or information, and the risk of interception and misuse by third parties.

Section 13.03. Officers’ Certificate and Opinion of Counsel as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee:

(i)an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.04) stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

(ii)an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.04) stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

Section 13.04. Statements Required in Officers’ Certificate or Opinion of Counsel. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include substantially:

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(i)a statement that each Person making or rendering such Officers’ Certificate or Opinion of Counsel has read such covenant or condition and the related definitions;

(ii)a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such Officers’ Certificate or Opinion of Counsel are based;

(iii)a statement that, in the opinion of each such Person, such Person has made such examination or investigation as is necessary to enable such Person to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(iv)a statement as to whether or not, in the opinion of each such Person, such covenant or condition has been complied with.

Section 13.05. Currency Indemnity. U.S. Dollars are the sole currency of account and payment for all sums payable by the Company or the Guarantors under or in connection with this Indenture, the Notes and the Notes Guaranties, including damages. Any amount received or recovered in a currency other than U.S. Dollars (whether as a result of, or of the enforcement of, a judgment or order of a court of any jurisdiction, in the winding-up or dissolution of the Company or otherwise) by any recipient in respect of any sum expressed to be due to it from the Company or any Guarantor shall only constitute a discharge to the Company or the Guarantors, as the case may be, to the extent of the U.S. Dollar amount which the recipient is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so). If that U.S. Dollar amount is less than the U.S. Dollar amount expressed to be due to the recipient, the Company shall indemnify such recipient against any loss sustained by it as a result, and if the amount of U.S. Dollars so purchased is greater that the sum originally due to such recipient, such recipient shall be deemed to have agreed to repay such excess. In any event, the Company shall indemnify the recipient against the cost of making any such purchase. For the purposes of this Section 13.05, it shall be sufficient for the recipient to certify in a satisfactory manner (indicating the sources of information used) that it would have suffered a loss had an actual purchase of U.S. Dollars been made with the amount so received in that other currency on the date of receipt or recovery (or, if a purchase of U.S. Dollars on such date had not been practicable, on the first date on which it would have been practicable, it being required that the need for a change of date be certified in the manner mentioned above) . These indemnities constitute a separate and independent obligation from the other obligations of the Company and the Guarantors, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by any Holder of a Note and shall continue in full force and effect despite any other judgment, order, claim or proof for a liquidated amount in respect of any sum due under any Note.

Section 13.06. No Recourse Against Others. No director, officer, employee or shareholder, as such, of the Company or the Trustee shall have any liability for any obligations of the Company or the Trustee, respectively, under this Indenture, the Notes or any Notes Guaranty or for any claim based on, in respect of or by reason of such obligations or their

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creation. By accepting a Note, each Holder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Notes.

Section 13.07. Legal Holidays. In any case where any Payment Date shall not be a Business Day, then (notwithstanding any other provision of this Indenture or of the Notes) payment of interest or principal need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the Payment Date; provided that no interest shall accrue for the period from and after such Payment Date.

Section 13.08. Governing Law. THIS INDENTURE, THE NOTES AND THE GUARANTEES SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

Section 13.09. Consent to Jurisdiction; Waiver of Immunities. (a) Each of the parties hereto hereby irrevocably submits to the non-exclusive jurisdiction of any New York state or U.S. federal court sitting in the Borough of Manhattan in The City of New York with respect to actions brought against it as a defendant in respect of any suit, action or proceeding or arbitral award arising out of or relating to this Indenture or the Notes or any transaction contemplated hereby or thereby (a “Proceeding”), and irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each of the parties hereto irrevocably waives, to the fullest extent it may do so under applicable law, trial by jury and any objection which it may now or hereafter have to the laying of the venue of any such Proceeding brought in any such court and any claim that any such Proceeding brought in any such court has been brought in an inconvenient forum. Each of the Company and the Guarantors irrevocably appoints National Corporation Research (the “Process Agent”), with an office at 10 East 40th Street, 10th Floor, New York, New York 10016, as its authorized agent to receive on behalf of it and its property service of copies of the summons and complaint and any other process which may be served in any Proceeding. If for any reason such Person shall cease to be such agent for service of process, each the Company and the Guarantors shall forthwith appoint a new agent of recognized standing for service of process in the State of New York and deliver to the Trustee a copy of the new agent’s acceptance of that appointment within 30 days. Nothing herein shall affect the right of the Trustee, the Paying Agent or any Holder to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against the Company and the Guarantors in any other court of competent jurisdiction.

(b) Each of the Company and the Guarantors hereby irrevocably appoints the Process Agent as its agent to receive, on behalf of itself and its property, service of copies of the summons and complaint and any other process which may be served in any such suit, action or proceeding brought in such New York state or U.S. federal court sitting in the Borough of Manhattan in The City of New York. Such service shall be made by delivering by hand a copy of such process to the Company or any Guarantor, as the case may be, in care of the Process Agent at the address specified above. Each of the Company and the Guarantors hereby irrevocably authorizes and directs the Process Agent to accept such service on its behalf. Failure of the Process Agent to give notice to the Company or any Guarantor, as the case may be, or failure of the Company or any Guarantor, as the case may be, to receive notice of such service of process shall not affect in any way the validity of such service on the Process Agent, the Company or the Guarantors. As an alternative method of service, each of the Company and the Guarantors also irrevocably consents to the service of any and all process in any such Proceeding

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by the delivery by hand of copies of such process to the Company or Guarantor, as the case may be, at its address specified in Section 13.02 or at any other address previously furnished in writing by the Company or the Guarantors to the Trustee. Each of the Company and the Guarantors covenants and agrees that it shall take any and all reasonable action, including the execution and filing of any and all documents, that may be necessary to continue the designation of the Process Agent above in full force and effect during the term of this Indenture, and to cause the Process Agent to continue to act as such.

(c)Nothing in this Section 13.09 shall affect the right of any party, including the Trustee, the Agents, any Holder or any other Person, to serve legal process in any other manner permitted by law or affect the right of any party to bring any action or proceeding against any other party or its property in the courts of other competent jurisdictions.

(d)Each of the Company and the Guarantors irrevocably agrees that, in any proceedings anywhere (whether for an injunction, specific performance or otherwise), no immunity (to the extent that it may at any time exist, whether on the grounds of sovereignty or otherwise) from such proceedings, from attachment (whether in aid of execution, before judgment or otherwise) of its assets or from execution of judgment shall be claimed by it or on its behalf or with respect to its assets, except to the extent required by applicable law, any such immunity being irrevocably waived, to the fullest extent permitted by applicable law. Each of the Company and the Guarantors irrevocably agrees that, where permitted by applicable law, it and its assets are, and shall be, subject to such proceedings, attachment or execution in respect of its obligations under this Indenture, the Notes or the Notes Guaranties, as applicable.

Section 13.10. Successors and Assigns. All covenants and agreements of the Company and the Guarantors in this Indenture, the Notes and the Notes Guaranties shall bind their respective successors and assigns, whether so expressed or not. All agreements of the Trustee in this Indenture shall bind its successors.

Section 13.11. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture.

Section 13.12. Severability Clause. In case any provision in this Indenture or in the Notes 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. To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any term or provision hereof invalid or unenforceable in any respect.

Section 13.13. Force Majeure. In no event shall the Trustee or any Agent 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, accidents, 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 and each Agent shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

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

COSAN OVERSEAS LIMITED as Issuer
By:	/s/ Marcelo Martins
	Name:	Marcelo Martins
	Title:	Director

COSAN S.A. INDÚSTRIA E COMÉRCIO as Guarantor
By:	/s/ Marcos Marinho Lutz
	Name:	Marcos Marinho Lutz
	Title:	Chief executive officer

By:	/s/ Marcelo Portela
	Name:	Marcelo Portela
	Title:	Legal officer

THE BANK OF NEW YORK MELLON as Trustee, Registrar, Transfer Agent and New York Paying Agent
By:	/s/ John T. Needham
	Name:	John T. Needham
	Title:	Vice-President

THE BANK OF NEW YORK MELLON (LONDON BRANCH) as London Paying Agent
By:	/s/ John T. Needham
	Name:	John T. Needham
	Title:	Vice-President

THE BANK OF NEW YORK MELLON (LUXEMBOURG) S.A., as Paying Agent and Transfer Agent
By:	/s/ John T. Needham
	Name:	John T. Needham
	Title:	Attorney-in-fact

EXHIBIT A

FORM OF NOTE

[FACE OF NOTE]

[TO BE INSERTED IF GLOBAL NOTE:]

[UNLESS THIS REGULATION S GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF EUROCLEAR BANK, AS OPERATOR OF THE EUROCLEAR SYSTEM (“EUROCLEAR”) OR CLEARSTREAM BANKING CORPORATION (“CLEARSTREAM”) TO THE COMPANY, OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY REGULATION S GLOBAL NOTE ISSUED IS REGISTERED IN THE NAME OF THE BANK OF NEW YORK DEPOSITORY (NOMINEES) LIMITED AS THE COMMON DEPOSITARY FOR EUROCLEAR AND CLEARSTREAM (THE “COMMON DEPOSITARY”) OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF EUROCLEAR AND CLEARSTREAM AND ANY PAYMENT IS MADE TO THE COMMON DEPOSITARY OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF EUROCLEAR AND CLEARSTREAM, ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, THE COMMON DEPOSITARY, HAS AN INTEREST HEREIN.

TRANSFERS OF THIS REGULATION S GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO THE COMMON DEPOSITARY OR SUCCESSOR THEREOF OR NOMINEES OF EUROCLEAR AND CLEARSTREAM OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE, AND TRANSFERS OF PORTIONS OF THIS REGULATION S GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO BELOW.]

THIS NOTE (AND RELATED NOTES GUARANTIES) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER

(1)           REPRESENTS THAT IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT) AND

(2)           AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND

A-1

ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY

(A)           TO THE COMPANY,

(B)           PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT,

(C)           IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR

(D)           PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH ABOVE, THE COMPANY RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY RULE 144 EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

THE FOREGOING LEGEND MAY BE REMOVED FROM THIS NOTE AFTER 40 DAYS BEGINNING ON AND INCLUDING THE LATER OF (A) THE DATE ON WHICH THE NOTES ARE OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) AND (B) THE ORIGINAL ISSUE DATE OF THIS NOTE.

A-2

COSAN OVERSEAS LIMITED

U.S.$300,000,000

8.25% Perpetual Notes

REGULATION S GLOBAL NOTE

Representing U.S.$300,000,000

8.25% Perpetual Notes

No. S-1

Common Code No. 055637334	Principal Amount
ISIN No.   XS0556373347	U.S.$300,000,000

COSAN OVERSEAS LIMITED, an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Company”, which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to The Bank of New York Depository (Nominees) Limited, or registered assigns, U.S.$300,000,000 (or such amount as may be reflected in the Schedule of Increases and Decreases attached hereto if a Global Note), upon presentment and surrender of this Note on such date or dates as the then relevant principal sum may become payable in accordance with the provisions hereof and in the Indenture.

Interest on the outstanding principal amount shall be borne at the rate of 8.25% per annum payable quarterly in arrears on each February 5, May 5, August 5 and November 5 of each year (each such date an “Interest Payment Date”), commencing on February 5, 2011, all subject to and in accordance with the terms and conditions set forth herein and in the Indenture; provided, however, that in the event that the Company shall at any time default on the payment of interest or such other amounts as any may be payable in respect of the Notes, the Company shall pay interest on overdue principal or installments of interest, to the extent lawful, at the rate borne by the Notes plus 1% per annum.

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

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Unless the certificate of authentication herein has been executed by the Trustee or Authenticating Agent by the manual signature of one of its authorized signatories, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.

Dated: _________________________

COSAN OVERSEAS LIMITED
By:
	Name:
	Title:

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TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

This is one of the Notes

referred to in the within

mentioned Indenture.

THE BANK OF NEW YORK MELLON,

as Trustee

By:
	Authorized Signatory

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SCHEDULE OF INCREASES AND DECREASES

Date of increase or decrease Aggregate principal amount of Notes transferred or exchanged or redeemed Current principal amount of this Note Authorized signature by or on behalf of the Registrar

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ASSIGNMENT FORM

To assign this Note, fill in the form below: For value received, (I) or (we) hereby sell, assign and transfer this Note to

(Insert Assignee’s Soc. Sec. or Tax I.D. no.)

(Print or Type Assignee’s Name, Address and Zip Code)

and irrevocably appoint  _________________________________________________________________________________  

Attorney to transfer this Note on the books of the Registrar with full power of substitution in the premises.

Date:

Your Signature: 1

(Sign exactly as your name appears on the face of this Note)

1 Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Association Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the U.S. Securities Exchange Act of 1934, as amended.

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[FORM OF REVERSE SIDE OF NOTE]

8.25% Perpetual Notes

TERMS AND CONDITIONS OF THE NOTES

This Note is one of a duly authorized issue of 8.25% Perpetual Notes of the Company. The Notes constitute unsecured unsubordinated obligations of the Company, initially in an aggregate principal amount of U.S.$300,000,000.

1.   Indenture; Notes Guaranty.

The Notes are, and shall be, issued under an Indenture, dated as of November 5, 2010 (the “Indenture”), among the Company, the Guarantors party thereto, The Bank of New York Mellon, as trustee, New York paying agent, transfer agent and registrar, The Bank of New York Mellon (London Branch), as paying agent in London, and The Bank of New York Mellon (Luxembourg) S.A., as paying agent and transfer agent in Luxembourg. The terms of the Notes include those stated in the Indenture. The Holders of the Notes shall be entitled to the benefit of, be bound by and be deemed to have notice of, all provisions of the Indenture. Reference is hereby made to the Indenture and all supplemental indentures thereto for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the Agents and the Holders of the Notes and the terms upon which the Notes, are, and are to be, authenticated and delivered. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. Copies of the Indenture and each Global Note shall be available for inspection at the offices of the Trustee.

The Company may from time to time, without the consent of the Holders of the Notes, create and issue additional Notes having the same terms and conditions as the Notes in all respects, except for issue date, issue price and the first payment of interest thereon. Additional Notes issued in this manner shall be consolidated with and shall form a single series with the previously outstanding Notes.

The Indenture imposes certain limitations on the creation of Liens by the Company or its Subsidiaries, and consolidation, merger and certain other transactions involving the Company. In addition, the Indenture requires, the maintenance of the existence of the Company and its Subsidiaries, the payment of certain taxes and claims and reporting requirements applicable to the Company.

2.   Interest.

The Notes bear interest at the rate per annum shown above from November 5, 2010, or from the most recent Interest Payment Date (as defined below) to which interest has been paid or provided for, payable quarterly in arrears on each February 5, May 5, August 5 and November 5 of each year (each such date, an “Interest Payment Date”), commencing on February 5, 2011. Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal or installments of interest, to the extent lawful, at the rate borne by the Notes plus 1% per annum.

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3.   Method of Payment.

Interest payments in respect of each Note shall be made on each Payment Date by the Paying Agents to the Persons shown on the Register on the Business Day prior to such Payment Date (each, a “Record Date”). If the Notes are Certificated Notes, the Record Date shall be 15 days prior to such Payment Date.

Payments in respect of each Note shall be made by U.S. Dollar check drawn on a bank in The City of New York and may be mailed to the Holder of such Note at its address appearing in the Register. Upon written application by the Holder to the specified office of any Paying Agent not less than 15 days before the due date for any payment in respect of a Note, such payment may be made by wire transfer to a U.S. Dollar account maintained by the payee with a bank in The City of New York. Payments in respect of Global Notes shall be effected in accordance with the Applicable Procedures of the relevant Clearing Agency.

All payments on this Note are subject in all cases to any applicable tax or other laws and regulations, but without prejudice to the provisions of Paragraph 5 hereof. Except as provided in Section 2.09 of the Indenture, no fees or expenses shall be charged to the Holders in respect of such payments.

If the Payment Date in respect of any Note is not a Business Day at the place in which it is presented for payment, the Holder thereof shall not be entitled to payment of the amount due until the next succeeding Business Day at such place and shall not be entitled to any further interest or other payment in respect of any such delay.

If the amount of principal or interest which is due on the Notes is not paid in full, the Registrar shall annotate the Register with a record of the amount of interest, if any, in fact paid.

4.   Registrar, Paying Agent and Transfer Agent.

The Trustee has been appointed as Paying Agent, Registrar and Transfer Agent. The Company may appoint and change any Registrar, Paying Agent or Transfer Agent without notice. For so long as the Notes are listed on the Euro MTF of the Luxembourg Stock Exchange and such stock exchange shall so require, the Company shall maintain a Paying Agent and a Transfer Agent in Luxembourg. The Bank of New York Mellon (Luxembourg) S.A. shall initially act as Paying Agent and Transfer Agent in Luxembourg.

5.   Additional Amounts.

All payments by the Company in respect of the Notes or the Guarantors in respect of the Notes Guaranties will be made without withholding or deduction for or on account of any present or future taxes, duties, assessments, or other governmental charges of whatever nature imposed or levied by or on behalf of the Cayman Islands or Brazil, or any authority therein or thereof in the case of payments under the Notes or under the Notes Guaranties, unless the Company or the Guarantors are compelled by law to deduct or withhold such taxes, duties, assessments, or governmental charges. In such event, the Company or the Guarantors will make such deduction or withholding, make payment of the amount so withheld to the appropriate governmental authority and pay such additional amounts as may be necessary to ensure that the

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net amounts receivable by Holders of Notes after such withholding or deduction shall equal the respective amounts of principal and interest which would have been receivable in respect of the Notes in the absence of such withholding or deduction (“Additional Amounts”). No such Additional Amounts shall be payable:

(i)to, or to a third party on behalf of, a Holder who is liable for such taxes, duties, assessments or governmental charges in respect of such note by reason of the existence of any present or former connection between such Holder (or between a fiduciary, settlor, beneficiary, member or shareholder of such Holder, if such Holder is an estate, a trust, a partnership, or a corporation) and the Cayman Islands and/or Brazil, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member or shareholder) being or having been a citizen or resident thereof or being or having been engaged in a trade or business or present therein or having, or having had, a permanent establishment therein, other than the mere holding of the Note or enforcement of rights and the receipt of payments with respect to the Note;

(ii)in respect of Notes surrendered (if surrender is required) more than 30 days after the Relevant Date except to the extent that payments under such Note would have been subject to withholdings and the Holder of such Note would have been entitled to such Additional Amounts, on surrender of such Note for payment on the last day of such period of 30 days;

(iii)where such Additional Amount is imposed on a payment to an individual and is required to be made pursuant to any law implementing or complying with, or introduced in order to conform to, any European Union Directive on the taxation of savings;

(iv)to, or to a third party on behalf of, a Holder who is liable for such taxes, duties, assessments or other governmental charges by reason of such Holder's failure to comply with any certification, identification or other reporting requirement concerning the nationality, residence, identity or connection with the Cayman Islands or Brazil, or a successor jurisdiction or applicable political subdivision or authority thereof or therein having power to tax, of such Holder, if (1)  compliance is required by such jurisdiction, or any political subdivision or authority thereof or therein having power to tax, as a precondition to, exemption from, or reduction in the rate of, the tax, assessment or other governmental charge and (2) the Company or any of the Guarantors has given the Holders at least 30 days’ notice that Holders will be required to provide such certification, identification or other requirement;

(v)in respect of any estate, inheritance, gift, sales, transfer, capital gains, excise or personal property or similar tax, assessment or governmental charge;

(vi)in respect of any tax, assessment or other governmental charge which is payable other than by deduction or withholding from payments of

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principal of or interest on the Note or by direct payment by the Company or the Guarantors in respect of claims made against the Company or the Guarantors; or

(vii)   in respect of any combination of the above.

No Additional Amounts shall be paid with respect to any payment on a Note to a Holder who is a fiduciary, a partnership, a limited liability company or other than the sole beneficial owner of that payment to the extent that payment would be required by the laws of the Cayman Islands or Brazil or any political subdivision thereof to be included in the income, for tax purposes, of a beneficiary or settlor with respect to the fiduciary, a member of that partnership, an interestholder in a limited liability company or a beneficial owner who would not have been entitled to the Additional Amounts had that beneficiary, settlor, member or beneficial owner been the Holder.

The Notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial interpretation. Except as specifically provided above, neither the Company nor the Guarantors shall be required to make a payment with respect to any tax, assessment or governmental charge imposed by any government or a political subdivision or taxing authority thereof or therein.

In the event that Additional Amounts actually paid with respect to the Notes are based on rates of deduction or withholding of withholding taxes in excess of the appropriate rate applicable to the Holder of such Notes, and, as a result thereof such Holder is entitled to make claim for a refund or credit of such excess from the authority imposing such withholding tax, then such Holder shall, by accepting such Notes, be deemed to have assigned and transferred all right, title, and interest to any such claim for a refund or credit of such excess to the Company or the Guarantor, as applicable.

Any reference in the Indenture or the Notes to principal, interest or any other amount payable in respect of the Notes by the Company or any Notes Guaranty by the Guarantors will be deemed also to refer to any Additional Amount, unless the context requires otherwise, that may be payable with respect to that amount under the obligations referred to in this Paragraph 5.

The foregoing obligations of the Company and the Guarantors will survive termination or discharge of the Indenture.

6.   Open Market Purchases.

The Company or any of its Affiliates may at any time purchase Notes in the open market or otherwise at any agreed upon price. All Notes so purchased may not be reissued or resold, except in accordance with applicable securities and other laws.

7.   Redemption.

Except as described in Section 3.01 of the Indenture and this Paragraph 7, the Notes may not be redeemed.

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The Notes shall be redeemable, at the option of the Company or Cosan, in whole or in part, on any Interest Payment Date on or after November 5, 2015, upon giving notice to the Holders (in accordance with the Indenture), at 100% of the principal amount thereof, plus accrued interest and any Additional Amounts payable with respect thereto. Any redemption of Notes by the Company or Cosan pursuant to this Section 3.01(b) will be subject to either (i) there being at least U.S.$150.0 million in aggregate principal amount of Notes Outstanding after such redemption or (ii) the Company or Cosan redeeming all of the then-Outstanding principal amount of the Notes.

If as a result of any change in or amendment to the laws (or any rules or regulations thereunder) of the Cayman Islands, Brazil or any political subdivision or taxing authority thereof or therein affecting taxation, or any amendment to or change in an official interpretation, administration or application of such laws, treaties, rules, or regulations (including a holding by a court of competent jurisdiction), which change or amendment becomes effective or, in the case of a change in official position, is announced on or after the issue date of the Notes or on or after the date a successor assumes the obligations under the Notes, (i) the Company or any successor has or will become obligated to pay any Additional Amounts or (ii) any of the Guarantors or any successor has or will become obligated to pay Additional Amounts in excess of the Additional Amounts the Guarantors or any successor would be obligated to pay if payments were subject to withholding or deduction at a rate of 15% or at a rate of 25% in case the Holder of the Notes is resident in a tax haven jurisdiction for Brazilian tax purposes (i.e., a country that does not impose any income tax or that imposes it at a maximum rate lower than 20% or where the laws impose restrictions on the disclosure of ownership composition or securities ownership) (the “Minimum Withholding Level”) as a result of the taxes, duties, assessments and other governmentalcharges described above, the Company or the Guarantors may, at their option, redeem all, but not less than all, of the Notes, at a Redemption Price equal to 100% of their principal amount, together with interest accrued to the Redemption Date, upon delivery of irrevocable notice to Holders in accordance with the Indenture. The Company and the Guarantors or any successor shall not have the right to so redeem the Notes unless (a) the Company becomes obligated to pay Additional Amounts or (b) any Guarantor becomes obligated to pay the Additional Amounts above the Minimum Withholding Level. Notwithstanding the foregoing, none of the Company or any Guarantor shall not have the right to so redeem the Notes unless: (i) it has taken reasonable measures to avoid the obligation to pay Additional Amounts (provided, however for this purpose reasonable measures shall not include the Company, the Guarantor or any successor, as the case may be, moving or changing jurisdiction); and (ii) it has complied with all necessary regulations of the Central Bank of Brazil to legally effect such redemption.

In the event that the Company or any successor elects to so redeem the Notes pursuant to the foregoing paragraph, it will deliver to the Trustee: (i) an Officers’ Certificate, signed in the name of the Company or any successor, stating that the Company or any successor is entitled to redeem the Notes pursuant to their terms and setting forth a statement of facts showing that the condition or conditions precedent to the right of the Company or any successor to so redeem have occurred or been satisfied; and (ii) an Opinion of Counsel to the effect that the Company or any successor has or will become obligated to pay Additional Amounts or any Guarantor or any successor to the Guarantor has or will become obligated to pay Additional Amounts in excess of the Additional Amounts payable at the Minimum Withholding Level as a result of the change or amendment, that the Company, any such Guarantor or any successor cannot avoid payment of

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such excess Additional Amounts by taking reasonable measures available to it and that all governmental requirements necessary for the Company or any successor to effect the redemption have been complied with.

8.  Repurchase upon Change of Control

(i)Not later than 30 days following a Change of Control that results in a Rating Decline, the Company will make an Offer to Purchase all Outstanding Notes at a purchase price equal to 101% of the principal amount plus accrued interest to the date of purchase.

(ii)An “Offer to Purchase” is a written offer delivered to the Holders (with a copy to the Trustee), which will specify the principal amount of Notes subject to the Offer to Purchase and the purchase price. The Offer to Purchase must specify an expiration date (the “expiration date”) not less than 30 days or more than 60 days after the date of the Offer to Purchase and a settlement date for purchase (the “purchase date”) not more than five Business Days after the expiration date. The Offer to Purchase must include information concerning the business of Cosan and its subsidiaries which the Company in good faith believes will enable the Holders to make an informed decision with respect to the Offer to Purchase. The Offer to Purchase will also contain instructions and materials necessary to enable Holders to tender Notes pursuant to the Offer to Purchase.

(iii)A Holder may tender all or any portion of its Notes pursuant to an Offer to Purchase, subject to the requirement that if a Holder tenders only a portion of its Notes, it must hold Notes in an amount no less than U.S.$100,000 in principal amount and in multiples of U.S.$1,000 in excess thereof. Holders are entitled to withdraw Notes tendered up to the close of business on the expiration date by delivering notice of withdrawal to the Company. On the purchase date, the purchase price will become due and payable on each Note accepted for purchase pursuant to the Offer to Purchase, and interest on Notes purchased will cease to accrue on and after the purchase date.

(iv)The Company agrees to obtain all necessary consents and regulatory approvals under the laws of the Cayman Islands and Brazil prior to making any Offer to Purchase. Any failure to obtain such consents and approvals will constitute an Event of Default under Section 6.01(c) of the Indenture.

9.  Denominations; Transfer; Exchange.

The Notes are in registered form without coupons in minimum denominations of U.S.$100,000 and integral multiples of U.S.$1,000 in excess thereof.

A Holder may transfer or exchange Notes in accordance with the Indenture. The Trustee or any Agent, as the case may be, may require a Holder, among other things, to furnish

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appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture.

Neither the Trustee nor any Agent, as the case may be, shall be required to register the transfer or exchange of any Notes selected for redemption or any Notes for a period of 15 days before a selection of Notes to be redeemed or before an Interest Payment Date.

10.   Persons Deemed Owners.

The registered Holder of this Note may be treated as the owner thereof for all purposes.

11.   Unclaimed Money.

Subject to applicable law, the Trustee and the Paying Agents shall pay to the Company upon written request any monies held by them for the payment of principal or interest that remains unclaimed for two years, and thereafter, Holders entitled to such monies must look to the Company for payment as general creditors.

12.   Defeasance.

Subject to the terms of the Indenture, the Company at any time may terminate certain of its obligations under the Notes and the Indenture if the Company irrevocably deposits in trust with the Trustee money or U.S. Government Obligations or a combination thereof sufficient for the payment of principal of and interest on all the Notes to Maturity or redemption. At such time, each Guarantor’s obligations under its Notes Guaranty will terminate.

13.   Amendment; Waiver.

Subject to certain exceptions set forth in the Indenture, the Indenture or the Notes may be amended or supplemented without notice to any Holder but with the written consent of the Holders of at least a majority in principal amount of the Notes then Outstanding, and any past Default or compliance with any provision may be waived with the consent of the Holders of at least a majority in principal amount of the Notes then Outstanding. However, subject to certain exceptions set forth in the Indenture, without the consent of each Holder of an Outstanding Note affected thereby, no amendment may, among other things:

(i)  reduce the rate of or extend the time for payment of interest on any Note;

(ii)  reduce the principal of any Note;

(iii)reduce the amount payable upon the redemption of any Note or change the time at which any Note may be redeemed;

(iv)  change the currency for payment of principal of or interest on any Note;

(v)impair the right to institute suit for the enforcement of any payment on or with respect to any Note;

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(vi)  waive a Default or Event of Default in payment of principal of and interest on the Notes;

(vii)reduce the principal amount of Notes whose Holders must consent to any amendment, supplement or waiver;

(viii)  make any change in this first paragraph of this Section; or

(ix)modify or change any provision of the Indenture affecting the ranking of the Notes or any Notes Guaranty in a manner adverse to the Holders of the Notes; or

(x)  make any change in any Notes Guaranty that would adversely affect the Noteholders.

The Company and the Trustee may, without the consent of any Holder of the Notes, amend the Indenture or the Notes to:

(i)to cure any ambiguity, omission, defect or inconsistency; provided that such amendment or supplement does not materially and adversely affect the rights of any Holder;

(ii)  to provide for a Substituted Issuer in accordance with Article 12 of the Indenture;

(iii)  to comply with Section 5.01 of the Indenture;

(iv)to provide for any Notes Guaranty of the Notes, to secure the Notes or to confirm and evidence the release, termination or discharge of any Notes Guaranty of or Lien securing the Notes when such release, termination or discharge is permitted by the Indenture;

(v)  to add to the covenants of the Company or the Guarantors for the benefit of the Holders;

(vi)  to surrender any right herein conferred upon the Company or the Guarantors;

(vii)to evidence and provide for the acceptance of an appointment by a successor Trustee;

(viii)  to provide for the issuance of additional Notes; or

(ix)to make any other change that does not materially and adversely affect the rights of any Holder or to conform the Indenture to the description of the Notes in the Offering Memorandum.

Each Guarantor must consent to any amendment, supplement or waiver.

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14.   Defaults and Remedies.

An “Event of Default” occurs if:

(a)The Company defaults in any payment of interest (including any Additional Amounts) on any Note when the same becomes due and payable, and such Default continues for a period of 30 days;

(b)The Company defaults in the payment of the principal (including any Additional Amounts) of any Note when the same becomes due and payable upon redemption or otherwise;

(c)The Company fails to make an Offer to Purchase and thereafter to accept and pay for the Notes tendered when and as required under Section 4.10 of the Indenture;

(d)The Company or any Guarantor fails to comply with any of its covenants or agreements in the Notes or the Indenture (other than those referred to in clauses (a), (b) and (c) above), and such failure continues for 60 days after the notice specified below;

(e)The Company, any Guarantor or any Significant Subsidiary defaults under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Debt for money borrowed by the Company, any such Guarantor or any such Significant Subsidiary (or the payment of which is guaranteed by the Company, any such Guarantor or any such Significant Subsidiary) whether such Debt or guarantee now exists, or is created after the date of this Indenture, which default (i) is caused by failure to pay principal of or premium, if any, or interest on such Debt after giving effect to any grace period provided in such Debt on the date of such default (“Payment Default”) or (i) results in the acceleration of such Debt prior to its express maturity and, in each case, the principal amount of any such Debt, together with the principal amount of any other such Debt under which there has been a Payment Default or the maturity of which has been so accelerated, totals U.S.$50,000,000 (or the equivalent thereof at the time of determination) or more in the aggregate;

(f)One or more final judgments or decrees for the payment of money in excess of U.S.$50,000,000 (or the equivalent thereof at the time of determination) in the aggregate are rendered against the Company, any Guarantor or any Significant Subsidiary and are not paid (whether in full or in installments in accordance with the terms of the judgment) or otherwise discharged and, in the case of each such judgment or decree, either (i) an enforcement proceeding has been commenced by any creditor upon such judgment or decree and is not dismissed within 30 days following commencement of such enforcement proceedings or (ii) there is a period of 60 days following such judgment during which such judgment or decree is not discharged, waived or the execution thereof stayed by reason of pending appeal or otherwise;

(g)An involuntary case or other proceeding is commenced against the Company, any Guarantor or any Significant Subsidiary with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect seeking the appointment of a trustee, receiver, síndico, liquidator, custodian or other similar

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official of it or any substantial part of its Property, and such involuntary case or other proceeding remains undismissed and unstayed for a period of 60 days; or an order for relief is entered against the Company, any Guarantor or any Significant Subsidiary under the bankruptcy laws now or hereafter in effect, and such order is not being contested by the Company, any Guarantor or any Significant Subsidiary, as the case may be, in good faith, or has not been dismissed, discharged or otherwise stayed, in each case within 60 days of being made;

(h)The Company, any Guarantor or any Significant Subsidiary (i) commences a voluntary case or other proceeding seeking liquidation, reorganization, concordata or other relief with respect to itself or its Debts under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (ii) consents to the appointment of or taking possession by a receiver, síndico, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company, any Guarantor or any Significant Subsidiary or for all or substantially all of the property of the Company, any Guarantor or any Significant Subsidiary or (iii) effects any general assignment for the benefit of creditors;

(i)Any event occurs that under the laws of the Cayman Islands or Brazil or any political subdivision thereof or any other country has substantially the same effect as any of the events referred to in any of clause (g) or (h); or

(j)Any Notes Guaranty ceases to be in full force and effect, other than in accordance the terms of the Indenture, or a Guarantor denies or disaffirms its obligations under any Notes Guaranty.

A Default under clause (d) above shall not constitute an Event of Default until the Trustee or the Holders of at least 25% in principal amount of the Outstanding Notes notify the Company (and the Trustee if given by the Holders) of the Default and the Company does not cure such Default within the time specified after receipt of such notice.

The Trustee is not to be charged with knowledge of any Default or Event of Default or knowledge of any cure of any Default or Event of Default unless either (i) a Responsible Officer of the Trustee with direct responsibility for the Indenture has actual knowledge of such Default or Event of Default or (ii) written notice of such Default or Event of Default has been given to the Trustee by the Company, any Guarantor or any Holder in accordance with the Indenture.

If an Event of Default (other than an Event of Default specified in clauses (g), (h) and (i) above) occurs and is continuing, the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Notes may declare all unpaid principal of and accrued interest on all Notes to be due and payable immediately, by a notice in writing to the Company, and upon any such declaration such amounts shall become due and payable immediately. If an Event of Default specified in clause (g), (h) or (i) above occurs and is continuing, then the principal of, and accrued interest on, all Notes shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

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The Trustee shall be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the Holders, unless such Holders shall have offered to the Trustee indemnity satisfactory to it. Subject to such provision for the indemnification of the Trustee, the Holders of a majority in aggregate principal amount of the Outstanding Notes shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee.

At any time after a declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as provided in the Indenture, the Holders of a majority in principal amount of the Outstanding Notes by written notice to the Company and the Trustee may rescind or annul a declaration of acceleration if (i) the Company has paid or deposited with the Trustee a sum sufficient to pay all overdue interest (including any Additional Amounts) on Outstanding Notes, all unpaid principal of the Notes that has become due otherwise than by such declaration of acceleration, interest on such overdue interest (including any Additional Amounts) as provided in the Indenture and all sums paid or advanced by the Trustee under the Indenture and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and (ii) all Events of Default have been cured or waived except nonpayment of principal that has become due solely because of acceleration.

No such rescission shall affect any subsequent Default or Event of Default or impair any right consequent thereto.

15.   Trustee Dealings with the Company.

Subject to certain limitations imposed by the Indenture, the Trustee in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.

16.   Governing Law.

THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

17.   No Recourse Against Others.

No director, officer, employee or shareholder, as such, of the Company or the Trustee shall have any liability for any obligations of the Company under the Notes or any obligations of the Company or the Trustee under the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Note, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Notes.

18.   Common Code and ISIN Numbers.

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused Common Codes or ISIN numbers, as

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applicable, to be printed on the Notes and has directed the Trustee to use Common Codes or ISIN numbers, as applicable, in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture, which includes the form of this Note. Requests may be made to:

Cosan Overseas Limited

Av. Pres. Juscelino Kubitschek, 1726 - 6º andar

04543-000 – São Paulo, SP

Brasil

Attention: Marcelo Martins

Facsimile: (55 11) 3897-9799

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EXHIBIT B

FORM OF SUPPLEMENTAL INDENTURE

dated as of __________, ____

among

COSAN OVERSEAS LIMITED

COSAN S.A. INDÚSTRIA E COMÉRCIO

the [ADDITIONAL GUARANTOR(S)] Party Hereto

and

THE BANK OF NEW YORK MELLON,

as Trustee, New York Paying Agent, Transfer Agent and Registrar

8.25% Perpetual Notes

B-1

THIS SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), entered into as of __________, ____, among Cosan Overseas Limited, an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Company”), Cosan S.A. Indústria e Comércio, as the original guarantor (“Original Guarantor”), [Existing Guarantor(s)], [Additional Guarantor(s)] (each an “Undersigned”), and The Bank of New York Mellon, as trustee, New York paying agent, transfer agent and registrar (the “Trustee”).

RECITALS

WHEREAS, the Company, the Original Guarantor, the Trustee, The Bank of New York Mellon (London Branch), and The Bank of New York Mellon (Luxembourg) S.A. entered into the Indenture, dated as of November 5, 2010 (the “Indenture”), relating to the Company’s 8.25% Perpetual Notes (the “Notes”);

WHEREAS, as a condition to the Trustee entering into the Indenture and the purchase of the Notes by the Holders, the Guarantors may execute a supplemental indenture in order to provide a Notes Guaranty unconditionally guaranteeing, on a senior unsecured basis, all of the Company’s obligations under the Notes and the Indenture.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and intending to be legally bound, the parties to this Supplemental Indenture hereby agree as follows:

Section 1. Capitalized terms used herein and not otherwise defined herein are used as defined in the Indenture.

Section 2. Each Undersigned, by its execution of this Supplemental Indenture, agrees to be a Guarantor under the Indenture and to be bound by the terms of the Indenture applicable to Guarantors, including, but not limited to, Article 10 thereof.

Section 3. This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York.

Section 4. This Supplemental Indenture may be signed in various counterparts which together will constitute one and the same instrument.

Section 5. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby. The Trustee makes no representation or warranty as to the validity or sufficiency of this Supplemental Indenture.

B-2

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

COSAN OVERSEAS LIMITED as Issuer
By:
	Name:
	Title:

COSAN S.A INDÚSTRIA E COMÉRCIO as Original Guarantor
By:
	Name:
	Title:

[ADDITIONAL GUARANTOR] as Guarantor
By:
	Name:
	Title:

By:
	Name:
	Title:

THE BANK OF NEW YORK MELLON as Trustee, New York Paying Agent, Transfer Agent and Registrar
By:
	Name:
	Title:

B-3

EX-4.4

Exhibit 4.4

COSAN S.A. INDÚSTRIA E COMÉRCIO

COSAN DISTRIBUIDORA DE COMBUSTÍVEIS LTDA.

COSAN LIMITED

HOUCHES HOLDINGS S.A.

SHELL BRASIL LIMITADA

SHELL BRAZIL HOLDING B.V.

SHELL OVERSEAS HOLDINGS LIMITED

RAIZEN ENERGIA S.A.

AMENDMENT AGREEMENT TO THE

 FRAMEWORK AGREEMENT

CONTENTS
Clause	Page

1. INTERPRETATION AND DEFINITIONS 2

3. CONDITIONS 3

2. AMENDMENTS TO THE FRAMEWORK AGREEMENT 3

4. GENERAL 27

5. COUNTERPARTS 28

6. GOVERNING LAW AND LANGUAGE 28

7. ARBITRATION 28

Schedule 1                      REMAINING COSAN RESTRUCTURING STEPS

Schedule 2                      REMAINING SHELL RESTRUCTURING STEPS

Schedule 3                      COSAN ASSETS

Schedule 4                      SHELL ASSETS

Schedule 5                      COSAN EXCLUDED ASSETS

Schedule 6                      SHELL EXCLUDED ASSETS

Schedule 7                      TRANSACTION DOCUMENTS

Schedule 8                      NEW CLAUSES 6.10 AND 6.11

Schedule 9                      RETAIL SUGAR

Schedule 10                    INTERIM COMMODITIES AND DERIVATIVES POLICIES

THIS AGREEMENT is dated 7th April 2011 between:

PARTIES

(1)	COSAN S.A. INDÚSTRIA E COMÉRCIO, a company organized and existing under the laws of Brazil, with its head office at Avenida Presidente Juscelino Kubitschek nº 1327, 4º andar, sala 01, Bairro Vila Nova Conceição, enrolled with the Brazilian tax registry under No. 50.746.577/0001-15 (“Cosan”);
(2)	COSAN DISTRIBUIDORA DE COMBUSTÍVEIS LTDA., a company organized and existing under the laws of Brazil, with its head office at Fazenda Pau D’Alho, s/nº, Prédio Administrativo Cosan, in the City of Barra Bonita, State of São Paulo, CEP 17340-000, enrolled with the Brazilian tax registry under No. 02.041.195/0001-43 (“Cosan Downstream Holdco”);
(3)	COSAN LIMITED, a company incorporated under the laws of Bermuda and whose registered office is at Crawford House, 50 Cedar Avenue, Hamilton HM 11, Bermuda (“Cosan Limited”);
(4)	HOUCHES HOLDINGS S.A., a company organized and existing under the laws of Brazil, with its head office at Rua Funchal, 418, Andar 11 Sala 09G, in the City of São Paulo, State of São Paulo, CEP 04.551-060, enrolled with the Brazilian tax registry under No. 10.773.432/0001-99 (the “Management Co”);
(5)	SHELL BRAZIL HOLDING B.V., a company incorporated under the laws of the Netherlands with registered number 27192050 0000 and whose registered office is at Carel van Bylandtlaan 30, 2596HR ‘s-Gravenhage, The Netherlands (“Shell”);
(6)	SHELL BRASIL LIMITADA, a company organized and existing under the laws of Brazil, with its head office at Avenida das Américas, 4.200, blocos 5 e 6, Barra da Tijuca in the City of Rio de Janeiro, State of Rio de Janeiro, CEP 22640-102, enrolled with the Brazilian tax registry under No. 33.453.598/0001-23 (“Shell Brasil Limitada” or the “Downstream Co”);
(7)	SHELL OVERSEAS HOLDINGS LIMITED, a company incorporated under the laws of England with registered number 00596107 and whose registered office is at Shell Centre, London, SE1 7NA (“Shell UK Co”); and
(8)	RAIZEN ENERGIA S.A. (formerly known as MILIMÉTRICA PARTICIPAÇÕES S.A.), a company organized and existing under the laws of Brazil, with its head office at Fazenda Pau D’Alho, s/nº, Prédio Administrativo Cosan, Sala 07, in the City of Barra Bonita, State of São Paulo, CEP 17340-000, enrolled with the Brazilian tax registry under No. 12.182.297/0001-32 (the “Sugar and Ethanol Co”),

each hereafter referred to as a “Party” and together as the “Parties”.

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RECITALS

(A)	Pursuant to the Framework Agreement (as defined below), the Parties have agreed to establish the Joint Venture to combine certain of the assets of Cosan and Shell, primarily in Brazil.
(B)	In accordance with the Framework Agreement, the Parties are working together towards the transfer of the Transfer Assets to the JV Entities and the establishment of the Joint Venture in accordance with the terms of the Transaction Documents.
(C)	As at the date of this Agreement certain conditions to Closing have not yet been satisfied, as further detailed in this Agreement. However, the Parties intend that, at or after Closing, Cosan and Shell will share the Economic Benefits and Burdens of the Cosan Transfer Assets and the Shell Transfer Assets for the Business Risk Sharing Period as if Closing had occurred on 1 April 2011 as further detailed in this Agreement.
(D)	No Transfer Assets will be contributed to the Joint Venture before the Closing Date and the provisions of the Framework Agreement relating to the contribution of the Transfer Assets (including Clause 2 and Schedule 7 of the Framework Agreement) shall remain.
(E)	Each of Cosan and Shell shall continue to manage and operate its respective business independently in accordance with the terms of the Framework Agreement and all applicable laws and regulations, and nothing in this Agreement shall affect the ability of either Cosan or Shell to exercise Control over its respective business.
(F)	The Parties have agreed to amend the Framework Agreement to reflect this intention and certain other matters as further set out in this Agreement.

THE PARTIES AGREE AS FOLLOWS:
1.	INTERPRETATION AND DEFINITIONS
1.1	Definitions
	1.1.1	In this Agreement “Framework Agreement” means the framework agreement dated 25 August 2010 made between the Parties.
	1.1.2	Unless a contrary indication appears, capitalized terms used in this Agreement shall have the same meanings given to them in the Framework Agreement.
1.2	Construction
	Clause 1.2 (Construction) of the Framework Agreement shall apply to this Agreement as if it were set out herein, but as if references in that clause to the Framework Agreement were references to this Agreement.

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2.	CONDITIONS
2.1	Fully Satisfied Conditions
	The Parties confirm that the conditions set out in Clauses 5.1.1(a), 5.1.1(b), 5.1.1(c), 5.1.2(d), 5.1.3(b) and 5.1.3(g) of the Framework Agreement have been satisfied, and each Party hereby irrevocably waives any right to assert the failure of any such condition as a basis for such Party’s right not to effect the Closing.
2.2	Waived Conditions
	The Cosan Parties irrevocably waive the conditions set out in Clauses 5.1.2(a) and 5.1.2(b)(i) of the Framework Agreement and the Shell Parties irrevocably waive the condition set out in Clauses 5.1.3(a), 5.1.3(c)(i), 5.1.3(e), 5.1.3(f)(ii) and 5.1.3(i) (subject to the Pasadena Waiver (as defined below)) of the Framework Agreement, and each Party hereby irrevocably waives any right to assert the failure of any such condition as a basis for such Party’s right not to effect the Closing.
2.3	Outstanding Conditions
	The Parties agree as follows:
	2.3.1	the obligations of the Cosan Parties and the Shell Parties to effect the Closing remain conditional upon the satisfaction or waiver by the Cosan Parties and the Shell Parties of the condition set out in Clause 5.1.1(d) of the Framework Agreement (as amended by Clause 3.6.1 of this Agreement);
	2.3.2	the obligations of the Cosan Parties to effect the Closing remain conditional upon the satisfaction or waiver by the Cosan Parties of the conditions set out in Clauses 5.1.2(b)(ii) and 5.1.2(c) of the Framework Agreement; and
	2.3.3	the obligations of the Shell Parties to effect the Closing remain conditional upon the satisfaction or waiver by the Shell Parties of the conditions set out in Clauses 5.1.3(c)(ii) (as amended by Clause 3.6.2 of this Agreement), 5.1.3(d), 5.1.3(f)(i) and 5.1.3(h) of the Framework Agreement.
2.4	Restructuring
	The Parties acknowledge and confirm that the Cosan Restructuring is in progress and that all steps of the Cosan Restructuring have been implemented other than those set out in Schedule 1 to this Agreement which remain outstanding and that the Shell Restructuring is in progress and that all steps of the Shell Restructuring have been imiplemented other than those set out in Schedule 2 to this Agreement which remain outstanding.
3.	AMENDMENTS TO THE FRAMEWORK AGREEMENT
3.1	Global Changes
3.1.1	Each reference to “Closing Date Exchange Rate” in the Framework Agreement is amended to read “Business Risk Sharing Date Exchange Rate”.

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3.1.2	Each reference to “Sugar Retail” in the Framework Agreement is amended to read “Retail Sugar”.
3.2	Definitions
	3.2.1	All references to “Closing” and “Closing Date” in the following definitions in Clause 1.1 of the Framework Agreement are amended to read “Business Risk Sharing” and “Business Risk Sharing Date”, respectively:
		“Accounts Payable”;
		“Accounts Receivable”;
		“Cosan Excess Debt”;
		“Debt”;
		“Pre-Closing Liabilities”; and
		“Rebranding Payment”.
	3.2.2	The definition of Agreed Form in Clause 1.1 of the Framework Agreement is amended by the deletion of the words “on or before the date of this Agreement”.
	3.2.3	The definition of Brazilian GAAP in Clause 1.1 of the Framework Agreement is amended by the insertion of the words “as at the date of the preparation of the relevant accounts” after the word “Brazil”.
	3.2.4	The definition of Closing Date Exchange Rate in Clause 1.1 of the Framework Agreement is deleted.
	3.2.5	The definition of Cosan Downstream IP in Clause 1.1 of the Framework Agreement is amended by the insertion of the parenthetical “(both formal and informal)” after “Intellectual Property”.
	3.2.6	The definition of Financial Risk Management Principles in Clause 1.1 of the Framework Agreement is deleted.
	3.2.7	The definition of HSSE and SD Transition Plan in Clause 1.1 of the Framework Agreement is amended by the deletion of the words “, to be adopted by each JV Entity at Closing”.
	3.2.8	The definition of Indemnifiable Matter in Clause 1.1 of the Framework Agreement is deleted and replaced by the insertion of a new definition as follows:
		““Indemnifiable Matter” means:
		(a)	any failure of any Warranty made by an Indemnifying Party in whole or in part to be true, accurate and not misleading on, and as of, the Business Risk Sharing Date; provided that each such Warranty shall, for this purpose, be read without any qualification therein relating to Material Adverse Change, materiality or immateriality or any similar qualification or standard;

4

	(b)	any failure of any Closing Warranty made by an Indemnifying Party in whole or in part to be true, accurate and not misleading on and as of the Closing Date; provided that each such Closing Warranty shall, for this purpose, be read without any qualification therein relating to Material Adverse Change, materiality or immateriality or any similar qualification or standard;
	(c)	any Covenant made by an Indemnifying Party which such Indemnifying Party has failed to fulfil in whole or in part in all material respects;
	(d)	any Notified Matter;
	(e)	all Cosan Pre-Closing Liabilities (where Cosan is the Indemnifying Party) or all Shell Pre-Closing Liabilities (where Shell is the Indemnifying Party); and/or
	(f)	in the case of Cosan being the Indemnifying Party, all Cosan Excluded Liabilities or, in the case of Shell being the Indemnifying Party, all Shell Excluded Liabilities,
	but excluding the Non-Contingent Liabilities except to the extent not paid in full when due by Cosan or Shell (as applicable);”
3.2.9	The definition of Longstop Date in Clause 1.1 of the Framework Agreement is deleted and replaced by the insertion of a new definition as follows:
	““Longstop Date” means the date which is 365 days or, at the election of either Cosan or Shell (by prior notice in writing to the Parties), 545 days, after the date of this Agreement, or, as otherwise agreed in writing between the Parties;”
3.2.10	The definition of Restricted Cash in Clause 1.1 of the Framework Agreement is amended by the insertion of the words “ but excluding any Margin Call Reserved Cash” immediately after the word “Cash”.
3.2.11	The definition of Retail and Aviation Lubricants Agency Prepayment in Clause 1.1 of the Framework Agreement is amended by replacing the words “equal to US$248,000,000” with the words “in the BRL equivalent of US$248,000,000 calculated on the Business Risk Sharing Date”.
3.2.12	The definition of Shell IT Agreement in Clause 1.1 of the Framework Agreement is deleted.
3.2.13	The definition of Third Party Claims in Clause 1.1 of the Framework Agreement is amended by the insertion of the words “or against” after the word “by”.

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3.2.14	The definition of Trading Risk Management Principles in Clause 1.1 of the Framework Agreement is amended by the insertion of the words “, in Agreed Form,” immediately after the words “trading risk management principles”.
3.2.15	Clause 1.1 of the Framework Agreement is amended by the insertion of the following definitions, in alphabetical order among the definitions otherwise contained in the Framework Agreement:
	“Accounting Calculation Date” means close of business on 31st March 2011;
	“Assignment and Assumption Agreement of Sugar Cane Supply Contracts” means the assignment agreement in the Agreed Form relating to any sugar-cane supply contracts related to the Cosan S&E Business of more than 365 days in original duration;
	“Business Risk Sharing” means the transfer of the Economic Benefits and Burdens subject to and in accordance with Clause 1A of this Agreement;
	“Business Risk Sharing Date” means 1st April 2011;
	“Business Risk Sharing Date Exchange Rate” means the BRL-US$ exchange rate as at the Business Risk Sharing Date determined in accordance with Clause 17 (Currency Conversion);
	“Business Risk Sharing Period” means the period from the Business Risk Sharing Date to the Closing Date (inclusive);
	“CDI Rate” means, with respect to the adjustment of any amount on any applicable date of determination, the percentage that corresponds to the accumulated variation of the Brazilian interbank rate for 1-day certificate of deposits (CDI) as calculated and disclosed by CETIP (Balcão Organizado de Ativos e Derivativos) during any given period as specified herein; it being understood that such calculation shall be that disclosed by CETIP at its url location (currently http://www.cetip.com.br/) or such other successor page or service as determined in good faith by Cosan and Shell for the purpose of performing accumulated calculations of CDI rates for such periods;
	“Closing Warranties” means the Cosan Closing Warranties and the Shell Closing Warranties and “Closing Warranty” shall be construed accordingly;
	“Cosan Closing Warranties” means the warranties set out in paragraphs 1, 3, 4.6, 7.1, 7.2, 8.4, 9.1.2, 9.2, 10.1, 10.2, 10.3, 11.2, 15 and 20 of Schedule 9;
	“Derivatives Policies” means the Interim Commodities and Derivatives Policies and the Treasury Policies;
	“Economic Benefits and Burdens” means the economic benefits of ownership, including all revenues, profits, income and appreciation, dividends and distributions, proceeds of any disposition, sale, liquidation or insurance claims and the associated burdens of ownership, including liabilities, losses, costs, Taxes and other chargesother than any such liabilities, losses, costs, Taxes or other charges caused by a breach of this Agreement;

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		“Interim Commodities and Derivatives Policies” means certain interim commodity trading policies and principles approved by Cosan and Shell, as set out in Schedule 20 (Interim Commodities and Derivatives Policies);
		“JV Capex Plan” means the quarterly capital expenditure plan included within the JV Operating Plan;
		“JV Operating Plan” means the business operating plan agreed by Cosan and Shell on or before the Business Risk Sharing Date and in Agreed Form;
		“Pasadena Waiver” means the side letter entered into on or about the Business Risk Transfer Date between Cosan and Shell relating to certain retail fuel stations owned and operated as at the Business Risk Transfer Date by Cosan (or one or more of its Affiliates);
		“Real Estate Assignment Agreement” means the assignment agreement relating to rural lease agreements executed between Cosan S.A. Indústria e Comércio and Cosan S.A. Açúcar e Álcool on 1 February 2011;
		“Shell Closing Warranties” means the warranties set out in paragraphs 1, 3, 4.6, 7.1, 7.2, 8.4, 9.1.2, 9.2, 10.1, 10.2, 10.3, 11.2, 15 and 20 of Schedule 10; and
		“Treasury Policies” means certain treasury policies, in Agreed Form, to be adopted by the Supervisory Boards at Closing.
3.3	Business Risk Sharing
	A new clause 1A is inserted immediately after Clause 1 of the Framework Agreement as follows:
	“1A BUSINESS RISK TRANSFER DATE
	1A.1 Business Risk Sharing
	1A.1.1	The Parties agree that while the steps set out in Schedule 7 do not occur before the Closing Date and none of the Cosan Transfer Assets, the Cosan Transfer Entities, the Cosan S&E Liabilities, the Cosan Downstream Liabilities or the Shell Transfer Assets, will be transferred to the Joint Venture on the Business Risk Sharing Date, Cosan and Shell will each implement accounting mechanisms separate from its other businesses to enable the Economic Benefits and Burdens of the Cosan Transfer Assets, the Cosan Transfer Entities, the Cosan S&E Liabilities and the Cosan Downstream Liabilities or the Shell Transfer Assets, the Shell Transfer Entities and the Shell Downstream Liabilities (as applicable) to be ascertainable.
	1A.1.2	At or after Closing, the Economic Benefits and Burdens of the Cosan Transfer Assets, the Cosan Transfer Entities, the Cosan S&E Liabilities, the Cosan Downstream Liabilities, the Shell Transfer Assets, the Shell Transfer Entities and the Shell Downstream Liabilities for the Business Risk Sharing Period shall be allocated to the JV Entities in accordance with the provisions of this Agreement as if Closing had occurred on the Business Risk Sharing Date.

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	1A.1.3	If Closing does not occur by the Longstop Date or this Agreement is otherwise terminated in accordance with its terms, the Parties agree that Clause 1A.1.1 and Clause 1A.1.2 shall cease to have any effect and the Economic Benefits and Burdens of the Cosan Transfer Assets, the Cosan Transfer Entities, the Cosan S&E Liabilities, the Cosan Downstream Liabilities, the Shell Transfer Assets, the Shell Transfer Entities and the Shell Downstream Liabilities shall not be allocated to the Joint Venture.
	1A.2	Operations
	During the Business Risk Sharing Period, Shell will continue to manage the Shell Transfer Assets and Cosan will continue to manage the Cosan Transfer Assets, the Cosan Transfer Entities, the Cosan S&E Liabilities, the Cosan Downstream Liabilities in each case in accordance with and subject to the covenants set out in Clause 7.6 and Clause 7.7, and all applicable Law.”
3.4	Clause 2
	3.4.1	Clause 2.4(a)(i) of the Framework Agreement is amended as follows:
		(a)	“plus interest accrued on such amount during the Business Risk Sharing Period at the CDI Rate” is inserted immediately after “US$191,866,000” in sub-clause (A); and
		(b)	all references to “Closing Date” in sub-clauses (B), (C) and (D) are amended to read “Business Risk Sharing Date”.
	3.4.2	Clause 2.4(b) of the Framework Agreement is deleted and replaced with the following new Clause 2.4(b):
		“(b) to the Downstream Co on the Closing Date, (i) the Rebranding Payment plus interest accrued on the Rebranding Payment during the Business Risk Sharing Period at the CDI Rate and (ii) the Retail and Aviation Lubricants Agency Prepayment (which, for the avoidance of doubt, shall not qualify as a contribution to the Downstream Co, but rather a payment that is required under the Retail Lubricants Agency Agreement and the Lubricants Agency Agreement) plus interest accrued on the Retail and Aviation Lubricants Agency Prepayment during the Business Risk Sharing Period at the CDI Rate,”
3.5	Clause 4
	Clause 4 of the Framework Agreement is deleted and replaced by the insertion of a new Clause 4 as follows:
	“4.	RETAIL SUGAR BUSINESS
	The Parties agree that the Retail Sugar Business shall be treated as follows:
	4.1 The Sugar and Ethanol Co and its Subsidiaries shall transfer to Cosan and its Affiliates, at any time up to 90 days after the Business Risk Transfer Date  (at the election of Cosan by written notice to the Sugar and Ethanol Co and Shell) (that date of such transfer, the “Carve-Out Date”), the assets set out in Schedule 18 and all the rights and obligations derived therefrom and any other assets not set out in Schedule 18 (collectively, the “Retail Sugar Assets”), all on an as-is basis, that are exclusively related to or exclusively used in the Retail Sugar Business; provided that, if on or before the 30th day following the date of this Agreement, Cosan, Shell and the Sugar and Ethanol Co agree that the transfer of the Retail Sugar Assets will not occur on or prior to the date falling 90 days following the date of this Agreement, the Carve-Out Date shall be amended to a later date as agreed to by such parties at such time.

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4.2           In consideration of the transfer of the assets set out in Schedule 18 (Retail Sugar Assets) on the Carve-Out Date, Cosan shall pay to the Sugar and Ethanol Co (i) a first instalment of US$55,000,000 (as adjusted in accordance with Clause 4.1.3 of this Agreement), on the Carve-Out Date and (ii) a second installment of BRL20,000,000 which shall be paid out over the two-year period following the Carve-Out Date as described in the third sentence of this Clause 4.2 below (collectively, and as adjusted in accordance with the terms hereof, the “Retail Sugar Price”), so that, with the proceeds of clause (ii), the Sugar and Ethanol Co can (A) make improvements at the Da Barra Mill located at Fazenda Pau D’Alho, Zona Rural, Barra Bonita, SP CEP 17340-000 and the Tarumã Mill located at Tarumã Fazenda Nova America, Agua da Alldeia, Tarumã, SP CEP 19820-000 to prioritize action and expenditures to ensure compliance with the HSSE and SD Standards and (B) construct a new warehouse at each such Mill. The Sugar and Ethanol Co shall use reasonable endeavors to meet the timetable requested by Cosan to make the improvements at such Mills.  Over the two-year period following the Carve-Out Date, as the Sugar and Ethanol Co incurs expenses with respect to the improvements and the construction projects, Cosan shall pay an amount to the Sugar and Ethanol Co equal to the amount of such expenses actually incurred by Sugar and Ethanol Co; provided that Cosan shall not be responsible for paying for any such expenses (i) incurred after the second anniversary of the Carve-Out Date and (ii) once it has paid the second installment of BRL20,000,000 of the Retail Sugar Price in full to the Sugar and Ethanol Co.  On a monthly basis, the Sugar and Ethanol Co shall send a report to Cosan in respect of any such expenses so incurred which shall be reimbursed upon receipt.

4.3           The Retail Sugar Price shall be adjusted (upwards or downwards) to account for any deviations, as of the Carve-Out Date, in Actual Inventory of the Retail Sugar Business and Actual Net Receivables of the Retail Sugar Business (in each case as defined in Schedule 18 (Retail Sugar Assets)) (calculated in BRL) from the Target Inventory of the Retail Sugar Business and the Target Net Receivables of the Retail Sugar Business (in each case as defined in Schedule 18 (Retail Sugar Assets)) that are set out in Schedule 18 (Retail Sugar Assets).  If there is any shortfall in the amount of Actual Inventory of the Retail Sugar Business or Actual Net Receivables of the Retail Sugar Business on the Carve-Out Date relative to the respective target amounts set out in Schedule 18 (Retail Sugar Assets) (such shortfall to be calculated on a net aggregated basis for all such calculations), then the Retail Sugar Price shall be adjusted downwards.  If there is an excess of Actual Inventory of the Retail Sugar Business or Actual Net Receivables of the Retail Sugar Business on the Carve-Out Date relative to the respective target amounts set out in Schedule 18 (Retail Sugar Assets) to this Agreement (such excess to be calculated on a net aggregated basis for all such calculations), then the Retail Sugar Price shall be adjusted upwards.

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4.4           If the Carve-Out Date occurs on or after the Closing, Cosan and the Sugar and Ethanol Co shall endeavour to reach agreement on the amount of each of the Actual Inventory of the Retail Sugar Business and the Actual Net Receivables of the Retail Sugar Business, as of the Carve-Out Date, as promptly as practicable thereafter and in any event within 45 days of the Carve-Out Date, and, for this purpose, shall grant each other reasonable access during normal business hours to their respective books, records and employees relating thereto.  If Cosan and the Sugar and Ethanol Co cannot reach agreement on the amount(s) of the Actual Inventory of the Retail Sugar Business and/or the Actual Net Receivables of the Retail Sugar Business, as of the Carve-Out Date, within 45 days of the Carve-Out Date, then the matter shall be referred to the Independent Auditor for resolution, the costs of whose review shall be split equally between Cosan and the Sugar and Ethanol Co (and whose determination will be final and binding on the Parties).

4.5           If the Carve-Out Date occurs prior to the Closing Date, Cosan and a member of the Transition Team shall endeavour to reach agreement on the amount of each of the Actual Inventory of the Retail Sugar Business and the Actual Net Receivables of the Retail Sugar Business, as of the Carve-Out Date, as promptly as practicable thereafter and in any event within 45 days of the Carve-Out Date, and, for this purpose, Cosan shall grant such designated member of the Transition Team reasonable access during normal business hours to Cosan’s and the Sugar and Ethanol Co’s respective books, records and employees relating thereto.  If Cosan and the designated member of the Transition Team cannot reach agreement on the amount(s) of the Actual Inventory of the Retail Sugar Business and/or Actual Net Receivables of the Retail Sugar Business, as of the Carve-Out Date, within 45 days of the Carve-Out Date, then the matter shall be referred to the Independent Auditor for resolution, the costs of whose review shall be split equally between Cosan and the Sugar and Ethanol Co (and whose determination will be final and binding on the Parties).

4. 6           The settlement of the adjustment to the Retail Sugar Price shall be on a net basis and shall be effected by a payment by either Cosan (if there is a excess of Actual Inventory of the Retail Sugar Business and the Actual Net Receivables of the Retail Sugar Business on a net aggregated basis over the targeted figures for such amount) or the Sugar and Ethanol Co (if there is a shortfall of Actual Inventory of the Retail Sugar Business and Actual Net Receivables of the Retail Sugar Business on a net aggregated basis below the targeted figures for such amount) to the other as promptly as possible after (but in any event within 2 Business Days after) the amount of the Actual Inventory of the Retail Sugar Business and Actual Net Receivables of the Retail Sugar Business as of the Carve-Out Date has been agreed in writing by the Parties or finally determined by the Independent Auditor.

4. 7           Between the Business Risk Sharing Date and the Carve-Out Date, the Economic Benefits and Detriments of the Retail Sugar Business shall be borne by Cosan with any income paid to or retained by Cosan, any losses reimbursed by Cosan to the Sugar and Ethanol Co to the extent paid or borne by Sugar and Ethanol Co and any funding requirements of the Retail Sugar Business provided by Cosan.

4. 8           Notwithstanding any other provision of this Agreement, Cosan shall hold the Sugar and Ethanol Co harmless from any and all Losses incurred or suffered by any JV Entity with respect of any act, fact, event, omission or other liability incurred on or before the Business Risk Sharing Date arising out of the Retail Sugar Business.

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4.9           Cosan shall be responsible for all compensation and benefits-related costs for the employees of the Retail Sugar Business set out in Schedule 19 (Retail Sugar Employees) (the “SRB Employees”) from and after the Business Risk Sharing Date until the Carve-Out Date.  On the Carve-Out Date, the SRB Employees shall be transferred by the Sugar and Ethanol Co to Cosan (or an affiliate of Cosan that is designated by Cosan) in the manner contemplated by Clause 3.1 of this Agreement.

4. 10           If Sugar and Ethanol Co owns the Retail Sugar Business after the Closing Date, but before the Carve-Out Date, then the Retail Sugar Business and the SRB Employees shall be directly managed by Colin Butterfield or his successor as designated by Cosan , in each case up and until the Carve-Out Date.

4.11           From and after the Carve-Out Date, the equipment inside the Sugar packaging rooms located at the Da Barra and the Tarumã Mills shall be leased by Cosan to the Sugar and Ethanol Co on a cost-free basis (comodato) for a term of 20 years, which shall be automatically extend for an additional 20 years if the Parties do not otherwise agree (such lease, the “Lease”).  The Sugar and Ethanol Co shall be responsible for maintaining and operating such equipment in accordance with the Tolling Agreement between Cosan and the Sugar and Ethanol to be entered into by the parties thereto.  At the end of the term of the Lease, Cosan shall have the right to remove such equipment from the Sugar packaging rooms at its cost and shall be responsible for any damages to such Sugar packaging rooms.

4.12           Cosan has the right, in its sole discretion, to expand its current production of Sugar at the Piedade Sugar refinery located at Rua Assis Carneiro, 80, Piedade, RJ, RJ 20740-260.  If, however, Cosan decides to cease production and operations at the Piedade Sugar refinery, it shall bear all costs and expenses associated with such cessation of production and operations.

4.13            Following the Carve-Out Date, the Sugar and Ethanol Co shall have the right to engage in White Label Marketing; provided that Sugar and Ethanol Co shall have no right to use the assets of the Retail Sugar Business in connection with White Label Marketing.  Cosan hereby waive any rights it may have against Sugar and Ethanol Co in connection with its engagement in White Label Marketing.

4.14           If the Carve-Out Date occurs after the Closing Date, Cosan hereby irrevocably waives any rights it may have against the Sugar and Ethanol Co for the use of the Retail Sugar Brands exclusively during the period from the Closing to the Carve-Out Date, on the terms herein agreed.

4.15           For the avoidance of doubt, the Contrato de Prestação de Serviços de Refino de Açúcar e Outras Avenças, between Açúcar Guarani S.A. and Cosan dated 13 December 2007, and the subsequent amendments thereto, shall be adhered to by Cosan in its entirety.

4.16           On the Carve-Out Date, the Framework Agreement shall be automatically amended, without further action or documentation and without the consent of any of the Parties, such that:

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	(a)	paragraph (a) of the definition of the “Business” set out in Clause 1.1 (Definitions) shall read: “the production, sale and trading of Sugar globally other than the Retail Sugar Business;”;
	(b)	a new subparagraph (vii) of the definition of “Cosan Excluded Assets” set out in Clause 1.1 (Definitions) shall be inserted, between the existing subparagraphs (vi) and (vii), which shall read: “all assets owned, held or used primarily in relation to the conduct of the Retail Sugar Business;” and the subsequent subparagraphs shall be renumbered accordingly;
	(c)	subparagraph  (vii) of the definition of “Cosan S&E Assets” set out in Clause 1.1 (Definitions) shall be deleted in its entirety and the subsequent subparagraphs shall be renumbered accordingly; and
	(d)	paragraph (a) of Clause 2.3.1 shall read: “to the Sugar and Ethanol Co: (i) the Cosan S&E Assets; (ii) the Cosan S&E Liabilities; and (iii) cash in an amount equal to the Agreed Retail Sugar Value, paid on the Closing Date in full (and accruing interest in respect of any day after which any such payment is due at the Default Interest Rate);”;  and
	(e)	Schedules 1 (Cosan Assets) and 2 (Cosan Excluded Assets) shall be deemed to be updated to reflect that the contents of Annex A are included in Schedule 1 and excluded from Schedule 2.
	4.17            On the Carve-Out Date, the Agreed Form of the Sugar and Ethanol Shareholders’ Agreement shall be automatically amended, without further action or documentation and without the consent of any of the Parties, such that:
	(a)	paragraph (a) of the definition of the “Business” set out in Section 8.01 therein shall read: “the production, sale and trading of Sugar globally other than the Retail Sugar Business”.
	(b)	paragraph (a)(i) of Section 8.02 is amended by the deletion of “and”  before sub-section (D) and the insertion of a new sub-section (E)  which shall read: “(E) Cosan (or any of its Affiliates) may construct, own, purchase, lease and operate its Sugar refineries only for the Retail Sugar Business and sell such refined Sugar; and””
3.6	Clause 5
	3.6.1	Clause 5.1.1(d) of the Framework Agreement is deleted and replaced by the insertion of a new Clause 5.1.1(d) as follows:
		“(d)  No injunction or court order shall have been granted by a Governmental Authority of competent jurisdiction prohibiting any Party from proceeding with Closing, in whole or in substantial part, and such injunction or order remains in effect and has not been lifted, overturned or released.”
	3.6.2	Clause 5.1.3(c)(ii) of the Framework Agreement is amended by the insertion of “; provided that in no event shall any Reg 540 Listing with respect to Cosan or any of its Affiliates, or any matters arising from or connected with any such Reg 540 Listing, have had or be reasonably be expected to result in a Material Adverse Change with respect to any of the Cosan Parties or the Joint Venture” immediately after “or the Joint Venture”.

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	3.6.3	Clause 5.2.1 of the Framework Agreement is amended by deleting the word “and” at the end of sub-clause (c) thereof, by adding the word “and” at the end of sub-clause (d) and by adding the following new sub-clause (e):
		“(e) take such steps as are commercially reasonable (including the filing and prosecution of lawsuits to the extent commercially reasonable) to have removed any injunction or other order issued by any Governmental Authority of competent jurisdiction relating to any of the Transaction Documents or any of the transactions contemplated hereby or thereby,”
	3.6.4	Clause 5.3.3 of the Framework Agreement is amended by the deletion of the words “the Financial Risk Management Principles,”.
3.7              Clause 6
	3.7.1	All references to “Closing Date” in the definitions of Cosan Downstream Variable Working Capital Adjustment, Cosan Downstream Working Capital Target, Shell Downstream Variable Working Capital Adjustment and Shell Downstream Working Capital Target in Clause 6.1 of the Framework Agreement are amended to read “Accounting Calculation Date”.
	3.7.2	Clause 6.1 of the Framework Agreement is amended by the insertion of the following definitions, in alphabetical order, among the definitions already contained in that Clause:
		“Allocated JV Derivatives” means all of the derivative positions and/or contracts set out in the Derivatives Schedule;
		“Cosan Commercial Debt” means the Cosan Debt to be contributed to the JV Entities at Closing pursuant to Clause 2.3 (Cosan Transfer Assets and Liabilities) in accordance with Clauses 6.6 (Actions after signing) and 6.9 (Actions after closing), other than BNDES, FINAME and FINEM debt of Cosan or its Affiliates and other than the Specified PESA Debt;
		“Derivatives Schedule” means a schedule, in a form agreed by the Parties and initialled for and on behalf of Cosan and Shell for identification purposes, setting out:
		(a)	the details of what the Parties agree to be all derivative positions and/or contracts, held by Cosan (or any of its Affiliates) (or to which any of the foregoing is a party) and which are related to the Cosan Transfer Assets, the Cosan S&E Business and/or the Cosan Downstream Business;
		(b)	the marked-to-market values thereof;
		(c)	the Realized Losses or Gains; and
		(d)	the Margin Call Reserved Cash;

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	“Effective Time” means 11.59 p.m. on the day immediately preceding the Business Risk Sharing Date;
	“JV Hedging Activities” has the meaning given to it in Clause 6.7.2;
	“Margin Call Reserved Cash” means the amount of any cash posted by Cosan (or any of its Affiliates) as credit support for its out-of-the-money Allocated JV Derivatives, to the extent required by a hedge counterparty under terms of any of the Allocated JV Derivatives which is not closed out or terminated by the Effective Time and is contributed to the Sugar and Ethanol Co pursuant to Clause 6.8.1A(a);
	“Prospective CFO” has the meaning given to it in Clause 6.7.2;
	“Prospective Finance Committee” means each of Marcelo Martins (or another person notified by Cosan to the other Parties) and Tim Morrison (or another person notified by Shell to the other Parties);
	“Realized Losses or Gains” means the amount of any actual cash losses or actual cash gains, realized by a Cosan Entity between the period from 12.01 a.m. on 15 March 2011 to the Effective Time, arising from the closing out or termination, during such period, of any of the Allocated JV Derivatives;
	“Specified Derivatives Debt” means a portion of the Cosan Entities’ Debt with equal or better terms than the average terms of the Cosan Commercial Debt, selected by Cosan in its sole discretion, not otherwise being contributed to a JV Entity at Closing pursuant to Clause 2.3 (Cosan Transfer Assets and Liabilities) in accordance with Clauses 6.6 (Actions after signing) and 6.9 (Actions after closing), with a net current value, as at the Business Risk Sharing Date, of BRL167,000,000;
	“Specified Margin Call Debt” means a portion of the Cosan Entities’ Debt with equal or better terms than the average terms of the Cosan Commercial Debt, selected by Cosan in its sole discretion, not otherwise being contributed to a JV Entity at Closing pursuant to Clause 2.3 (Cosan Transfer Assets and Liabilities) in accordance with Clauses 6.6 (Actions after signing) and 6.9 (Actions after closing), with a net current value, as at the Closing Date, equal, in BRL, to the amount of the Margin Call Reserved Cash;
	“Specified Realizations Cash” means an amount of cash, in BRL, not otherwise being contributed to a JV Entity at Closing pursuant to Clause 2.3 (Cosan Transfer Assets and Liabilities) in accordance with Clauses 6.6 (Actions after signing) and 6.9 (Actions after closing), equal to the amount of the Realized Losses or Gains;
3.7.3	“Specified Realizations Debt” means an amount of the Cosan Entities’ Debt, with equal or better terms than the average terms of the Cosan Commercial Debt, selected by Cosan in its sole discretion, not otherwise being contributed to a JV Entity at Closing pursuant to Clause 2.3 (Cosan Transfer Assets and Liabilities) in accordance with Clauses 6.6 (Actions after signing) and 6.9 (Actions after closing), with a net current value, as at the Business Risk Sharing Date, equal, in BRL, to the amount of the Realized Losses or Gains; and

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	“Tripartite Committee” has the meaning given to it in Clause 6.7.2.
3.7.4	Clause 6.5.6 of the Framework Agreement is deleted.
3.7.5	Clause 6.5.7 of the Framework Agreement is deleted.
3.7.6	Clause 6.6.1(b) of the Framework Agreement is deleted.
3.7.7	Clause 6.6.2 of the Framework Agreement is deleted.
3.7.8	Clause 6.7 of the Framework Agreement is renamed “Allocated JV Derivatives” and amended by the deletion of all provisions contained in Clauses 6.7.1 and 6.7.2 and the insertion in their place of the following paragraphs:
	6.7.1	Cosan represents and warrants to Shell that, as at the Effective Time, the marked-to-market values of the Allocated JV Derivatives, and the amounts of the Realized Losses or Gains and the Margin Call Reserved Cash, were each as specified in the Derivatives Schedule.  Cosan shall indemnify each JV Entity and shall save and hold it harmless against any Loss incurred or suffered by such JV Entity that arises out of or directly relates to any failure of the representation and warranty given  by Cosan in this Clause 6.7.1 to be true as at the Effective Time.
	6.7.2	The Parties acknowledge that Cosan and Shell have formed a committee (the “Tripartite Committee”) comprised of representatives of Cosan, Shell and the prospective management of the Joint Venture, chaired by the appointee to the prospective role of chief financial officer of the Joint Venture (the “Prospective CFO”) and have authorized and requested such committee to:
		(a)	oversee and advise on the JV Hedging Activities in respect of the Cosan S&E Business and the Cosan Downstream Business during the Business Risk Sharing Period (the “JV Hedging Activities”) on the basis that the foreign exchange and commodity price risk of the Cosan S&E Business and the Cosan Downstream Business should be hedged to an extent consistent with the Derivative Policies;
		(b)	meet on a weekly basis to provide specific guidance to Cosan on the JV Hedging Activities for the immediately following 7-day period; and
		(c)	notify the Prospective Finance Committee if it expects that the JV Hedging Activities are likely to result in any event of non-compliance with the Derivative Policies,
		and, for the avoidance of doubt, Cosan shall be permitted to consult with, and ask and receive advice from, the Tripartite Committee but shall not be obliged to follow any instructions given by the Tripartite Committee to it.

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6.7.3	The Parties shall ensure that the Monitoring Team shall review the degree to which the JV Hedging Activities have been carried out in a manner consistent with the Derivative Policies and Shell shall instruct the Monitoring Team to notify Shell and Cosan in writing if it believes there has been any non-compliance with the Derivative Policies during the Business Risk Sharing Period.
6.7.4	Cosan shall ensure that appropriate access to all of Cosan’s accounts, books, information and other material, together with reasonable rights of access to the trading team of Cosan (and its Affiliates) (including the right to ask questions related to the derivative activities conducted by Cosan (and its Affiliates)), in each case related to its derivative activities, is given to:
	(a)	each of the Tripartite Committee and the Monitoring Team so that it may assess and analyze the degree to which the JV Hedging Activities have been carried out in a manner consistent with the Derivative Policies; and
	(b)	the Tripartite Committee so that it may oversee and advise on the JV Hedging Activities.
6.7.5	Subject to Clause 6.7.6, Cosan covenants to the Sugar and Ethanol Co that:
	(a)	it will instruct and cause its (and its Affiliates’) officers and employees to carry out the JV Hedging Activities in a manner consistent with the Derivative Policies and to enforce the compliance by its (and its Affiliates’) officers and employees with such instructions in an active manner;
	(b)	it will prosecute and request indemnification from any officer or employee who knowingly takes action in violation of the Derivative Policies, to the extent such non-compliance has caused any Loss to Cosan (or any of its Affiliates) and to the extent permitted by Brazilian Law,
	and Cosan acknowledges that such covenants are made for the benefit of the Sugar and Ethanol Co and, therefore, any and all indemnification amounts recovered, if any, shall be allocated to the benefit of the Sugar and Ethanol Co and, in addition, that the Sugar and Ethanol Co will be entitled to directly request any such indemnification if so decided by it in its sole discretion.
6.7.6	If changes in market conditions render it commercially unreasonable for the officers and employees to follow the guidance of the Tripartite Committee or to comply with the Derivative Policies, in relation to the purchase or sale of any derivative instruments, Cosan (or any of its Affiliates) shall promptly report as such to the members of the Tripartite Committee and await further advice; provided that if Cosan (or any of its Affiliates) is unable to obtain advice or guidance from the Tripartite Committee in respect of any action that it believes should be taken, Cosan (or any of its Affiliates) shall not prosecute or request indemnification from any officer or employee who takes any commercially reasonable action which he or she determines, in good faith, to be in the interests of the Cosan S&E Business and/or the Cosan Downstream Business, in connection with the matter reported to the members of the Tripartite Committee pursuant to this Clause 6.7.6 and is within the applicable policy.

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3.7.1	Clause 6.8 (Contributed Derivatives) of the Framework Agreement is amended by the deletion of all provisions contained in Clause 6.8.1 to 6.8.9 (inclusive) and the insertion in their place of the following paragraphs:
	6.8.1	Cosan shall procure that each of:
		(a)	the Allocated JV Derivatives; and
		(b)	in addition to the Cosan Debt to be contributed to the JV Entities pursuant to Clause 2.3 (Cosan Transfer Assets and Liabilities) in accordance with Clauses 6.6 (Actions after signing) and 6.9 (Actions after closing):
			(i)	the Specified Derivatives Debt;
			(ii)	the Specified Margin Call Debt; and
			(iii)	(A) where the Realized Losses or Gains are losses, the Specified Realizations Debt or (B) where the Realized Losses or Gains are gains, the Specified Realizations Cash,
		is contributed to the Sugar and Ethanol Co at Closing; provided that in the case of paragraph (b)(iii)(B) above, the Specified Realizations Cash may instead be applied by Cosan by reducing the Cosan Debt to be contributed to the JV Entities pursuant to Clause 2.3 (Cosan Transfer Assets and Liabilities) in accordance with Clause 6.6 (Actions after signing) and 6.9 (Actions after closing) in the amount of the Specified Realizations Cash.
	6.8.2	Cosan covenants to Shell that, to the extent it (or any of its Affiliates) has received any cash, marketable securities or credit line as credit support from a hedge counterparty, in connection with a contract that is an Allocated JV Derivative, that remains in place as of the Effective Time, any right to such credit support shall be transferred to the Sugar and Ethanol Co together with the Allocated JV Derivatives such that the Sugar and Ethanol Co receives the full benefit thereof.

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		6.8.3	Cosan represents to Shell, at the date of this Agreement, that Cosan did not receive any gain in connection with any hedges that were terminated or closed out on or after 14 March 2011 and replaced with other Allocated JV Derivatives covering the same exposure, other than any gain to be transferred to Sugar and Ethanol Co at Closing.
	3.7.2	Clause 6.9 of the Framework Agreement is amended as follows:
		(a)	all references therein to “Closing Date” are amended to read “Accounting Calculation Date”;
		(b)	all references therein, to “contributed” are amended to read “deemed to have been contributed”;
		(c)	all references therein, to “a balance sheet” (or any corresponding defined terms therein referring to a balance sheet) are amended to read “a pro forma balance sheet”; and
		(d)	all references therein, to a payment being made 5 Business Days after a determination are amended to refer to the later of the Closing Date and 5 Business Days after such determination.
	3.7.3	A new Clause 6.9.1A is inserted immediately after Clause 6.9.1 of the Framework Agreement as follows:
		“6.9.1A  For the purposes of Clause 6.9.1, if any change made to Brazilian GAAP between the Signing Date and the Business Risk Transfer Date will have an impact on any of the calculations made for the purposes of the Cosan Fixed Working Capital Adjustment, the Cosan Downstream Variable Working Capital Adjustment, the Cosan Net Debt Adjustment, the Shell Fixed Working Capital Adjustment, the Shell Downstream Variable Working Capital Adjustment or the Shell Net Debt Adjustment, any such calculation shall be amended accordingly so that it is calculated in a manner consistent with Brazilian GAAP as at the Signing Date and as applied in the preparation of the Cosan Carve Out Balance Sheet or the Shell Carve Out Balance Sheet, as applicable.”
	3.7.4	The Framework Agreement is amended by inserting new Clauses 6.10 and 6.11 as set out in Schedule 8 to this Agreement immediately after Clause 6.9 of the Framework Agreement.
3.8	Clause 7
	3.8.1	Clause 7.2 of the Framework Agreement is deleted, renamed “Co-generation Products Contracts” and replaced by the insertion of:
		“The Parties acknowledge that the counterparty to any Co-generation Products contracts of Cosan and any direct or indirect Affiliate of Cosan shall be assigned to a Cosan Transfer Entity.”

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3.8.2	A new Clause 7.6.2(d) is inserted immediately after Clause 7.6.2(c) of the Framework Agreement as follows:
	“(d) in respect of the Business Risk Sharing Period only, subject to market conditions, intervening external developments, and elements outside of its control, (i) incur capital expenditures in all material respects in accordance with the JV Capex Plan in respect of the Cosan Downstream Business and the Cosan S&E Business for Cosan or in respect of the Shell Downstream Business for Shell; provided that the purchase price for the Zanin mill located at Fazenda São Joaquim, City of Araraquara, São Paulo or any other acquisition shall not count towards the capital expenditure required by this Clause (d), and (ii) shall use all reasonable endeavours to operate each such business in accordance with the JV Business Plan, subject to Clauses 7.6 and 7.7 of this Agreement.”
3.8.3	Clause 7.7.2(k) of the Framework Agreement is amended by replacing the phrase “other than in the ordinary course of business” with the phrase “other than as required by applicable Law”.
3.8.4	All references in Clause 7.9.4 of the Framework Agreement to “Closing” and “Closing Date” are amended to read “Business Risk Sharing” and “Business Risk Sharing Date” respectively.
3.8.5	A new Clause 7.9.8 is inserted immediately after Clause 7.9.7 of the Framework Agreement as follows:
	“The Parties agree that in the event of a conflict between the terms of a document effecting the Shell Restructuring and the provisions of this Clause 7.9, this Clause 7.9 shall prevail.”
3.8.6	New Clauses 7.11 and 7.12 are inserted immediately after Clause 7.10 of the Framework Agreement as follows:
	“7.11 Funding pre-Closing
	7.11.1 If any funding is required to operate the Cosan Downstream Business and/or the Cosan S&E Business as Cosan is managing them in the Business Risk Sharing Period in accordance with the provisions of this Agreement and all applicable laws and regulations, Cosan shall:
	(a)	firstly, use such cash as is on hand that it may elect to use for this purpose; and
	(b)	secondly, if any additional funding is required and subject to Clauses 7.6 and 7.7, obtain, or if applicable provide, such funding on such terms as are, in Cosan’s reasonable judgment, in the best interests of the Joint Venture.

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		7.11.2 If any funding is required to operate the Shell Downstream Business as Shell is managing it in the Business Risk Sharing Period in accordance with the provisions of this Agreement and all applicable laws and regulations, Shell shall:
		(a)	firstly, use such cash as is on hand that it may elect to use for this purpose; and
		(b)	secondly, if any additional funding is required and subject to Clauses 7.6 and 7.7, obtain, or if applicable provide, such funding on such terms as are, in Shell’s reasonable judgment,  in the best interests of the Joint Venture.
		7.11.3  If:
		(a)	Cosan, at the request of the Cosan Downstream Business and/or the Cosan S&E Business, provides funding to the Cosan Downstream Business and/or the Cosan S&E Business at any time in the Business Risk Sharing Period; or
		(b)	Shell, at the request of the Shell Downstream Business, provides funding to the Shell Downstream Business at any time in the Business Risk Sharing Period,
		such funding shall be provided by way of a shareholder loan with a maturity date of 3 months after the Closing Date and accruing interest at (i) the CDI Rate or (ii) if higher, the interest rate payable on a third party credit line provided to, or borrowing made by, Cosan or Shell (as applicable) and directly linked to such shareholder loan.
		7.11.4  If the Cosan Downstream Business and/or the Cosan S&E Business is provided with funding by a third party at any time in the Business Risk Sharing Period, such debt shall be contributed by Cosan to the Joint Venture at Closing and, for the avoidance of doubt, shall not affect the Cosan Net Debt Adjustment.
		7.11.5  If the Shell Downstream Business is provided with funding by a third party at any time in the Business Risk Sharing Period, such debt shall be contributed by Shell to the Joint Venture at Closing and, for the avoidance of doubt, shall not affect the Shell Net Debt Adjustment.
		7.12 Policies
		Each of Cosan and Shell shall use its reasonable endeavours to implement the principles set out in the Derivatives Policies during the Business Risk Sharing Period.”
3.9	Clause 8
	3.9.1	A new Clause 8.2A and a new Clause 8.2B are inserted immediately after Clause 8.2 of the Framework Agreement as follows:
		“8.2A  Capital Expenditure
		If Cosan fails to incur the expenditures required in the Cosan Expenditure Plan by 31st March 2011 in violation of Clause 6.4.1(e), to the extent the shortfall is agreed between Cosan and Shell (each acting reasonably), an amount equal to the agreed shortfall shall be deducted from the amount of cash to be paid by Shell at Closing to the Sugar and Ethanol Co pursuant to Clause 2.4(a)(i)(A).

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	8.2B Transtion Plan Obligations
	If Cosan fails to comply with any of its obligations (including but not limited to capital expenditure, operational expenditure and specific actions) pursuant to the HSSE and SD Transition Plan prior to the Business Risk Sharing Date, it shall remedy such failure during the Business Risk Sharing Period.”
3.9.2	A new Clause 8.5.2A is inserted immediately after Clause 8.5.2 of the Framework Agreement as follows:
	“8.5.2A     Each of Cosan and Shell undertakes to hold the relevant JV Entities harmless from and against any Losses arising from any (i) breach of the Instrumento Particular de Contrato de Locação Atípica de Imóvel e Outras Avenças, entered into between Palermo Agrícola Ltda. and Cosan on 1st March 2010 (the “Built to Suit Agreement”) and (ii) any losses or damages caused to real property which is the subject of the Built to Suit Agreement, which are indemnifiable to Palermo Agrícola Ltda. under the Built to Suit Agreement.”
3.9.3	Clause 8.7.2 of the Framework Agreement is deleted and replaced by the insertion of a new Clause 8.7.2 as follows:
	“8.7.2           Each of the Cosan Parties warrants on the Business Risk Sharing Date and is deemed to warrant on the Closing Date, to each of the Shell Parties that each of the contracts provided to Shell under Clause 8.7.1 is on arms’ length terms and in accordance with market conditions, as of the Business Risk Sharing Date and the Closing Date respectively.”
3.9.4	Clause 8.7.3 of the Framework Agreement is deleted and replaced by the insertion of:
	“Cosan shall indemnify each JV Entity, the Shell Parties, Shell’s Affiliates and the directors, officers, employees, agents and representatives of the Shell Parties, Shell’s Affiliates and the JV Entities, (collectively, the “Clause 8 Indemnified Parties”) and shall save and hold them harmless against any Loss actually incurred or suffered by any of the Clause 8 Indemnified Parties that arise out of or relate to the warranty given or deemed to be given in Clause 8.7.2.”
3.9.5	Clause 8.7.4 of the Framework Agreement is deleted.
3.9.6	A new Clause 8.7A and a new Clause 8.7B are inserted immediately after Clause 8.7 of the Framework Agreement as follows:
	“8.7A Assignment of Real Estate Agreements
	8.7A.1 Each of the Cosan Parties warrants on the Business Risk Sharing Date and is deemed to warrant on the Closing Date, to each of the Shell Parties that the assignment of the agreements listed in the exhibit to the Real Estate Assignment Agreement and any subsequent additions thereto, are legal, valid and enforceable as of the Business Risk Sharing Date and the Closing Date respectively and encompass all the Real Estate Agreements that Cosan is required to assign to a JV Entity pursuant to this Agreement.

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	8.7A.2 Cosan shall indemnify the Clause 8 Indemnified Parties and shall save and hold them harmless against any Loss actually incurred or suffered by any of the Clause 8 Indemnified Parties that arise out of or relate to the warranty given or deemed to be given in Clause 8.7A.1 or, alternatively, Cosan shall be entitled, in lieu of such indemnification, to procure an alternative agreement or lease providing similar or greater benefits to the Sugar and Ethanol Co on substantially the same terms and conditions (or better to the Sugar and Ethanol Co), including in relation to the cost of transporting sugar cane, as the agreement which it replaces.
	8.7B Assignment of Sugar Cane Supply Contracts
	8.7B.1 Each of the Cosan Parties warrants on the Business Risk Sharing Date and is deemed to warrant on the Closing Date, to each of the Shell Parties that the assignment of the agreements listed in the exhibit to the Assignment and Assumption Agreement of Sugar Cane Supply Contracts and any subsequent additions thereto, is legal, valid and enforceable as of the date on which the Assignment and Assumption Agreement of Sugar Cane Supply Contracts is entered into.
	8.7B.2 Cosan shall indemnify the Clause 8 Indemnified Parties and shall save and hold them harmless against any Loss actually incurred or suffered by any of the Clause 8 Indemnified Parties that arise out of or relate to the warranty given or deemed to be given in Clause 8.7B.1 or, alternatively, Cosan shall be entitled, in lieu of such indemnification, to procure an alternative supply agreement providing similar or greater benefits to the Sugar and Ethanol Co on substantially the same terms and conditions (or better to the Sugar and Ethanol Co), including in relation to the cost of transporting sugar cane, as the agreement which it replaces.”
3.9.7	Clause 8.9 of the Framework Agreement is deleted and replaced by the insertion of a new Clause 8.9 as follows:
	“8.9          Ancillary agreements
	Notwithstanding any provision herein or in any Agreed Form document that such document is in Agreed Form, any reference to the Clifford Chance address in an Agreed Form document shall be amended to Clifford Chance, Rua Funchal 418, 15th Floor, CEP: 04551-060 São Paulo – SP, Brazil Attention: Anthony Oldfield, Fax: +55 (11) 3019 6001.”
3.9.8	Clause 8.11.1(f) of the Framework Agreement is deleted.
3.9.9	Clause 8.11.2 of the Framework Agreement is amended by the deletion of the words “,  including those costs incurred pursuant to the Shell IT Agreement”.

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	3.9.10	Clause 8.17.1 of the Framework Agreement is amended by the insertion of the parenthetical “(including, for the avoidance of doubt, any refund or reimbursement of Taxes which relates to a Tax payment or Tax year ending before the Closing Date)” immediately after “any payment properly due”.
	3.9.11	Clause 8.19.3 of the Framework Agreement is amended by the deletion of the words “once finalized in accordance with Clause 7.2 (Confirmation of Transfer Assets)”.
	3.9.12	A new Clause 8.24 of the Framework Agreement is inserted as follows:
		“8.24  Accounting year end
		At one of the first two meetings of each Supervisory Board after Closing, Cosan and Shell shall ensure that the board of the relevant JV Entity discuss the proposal to harmonise the accounting year end dates of each JV Entity, consider the steps required to achieve such harmonisation and endeavour to reach a decision as to what those steps will be.  If a Supervisory Board is unable to reach a decision by the conclusion of its second meeting after Closing, such decision will be made at the sole discretion of the CFO of the Joint Venture.”
	3.9.13	A new Clause 8.25 of the Framework Agreement is inserted as follows:
		“8.25        Trading Policy
		8.25.1    By 30 April 2011, the Parties shall negotiate in good faith and in accordance with the Transaction Documents the wording of the provisions of the Joint Venture’s Trading Policy regarding:   (i) trading by the Joint Venture of non-sugarcane ethanol in Brazil; and (ii) trading by the Joint Venture of non-sugarcane ethanol outside of Brazil (subject to the Global Ethanol Trading Agreement).
		8.25.2    In the event the Parties cannot agree such wording by 30 April 2011, the Parties shall refer the matter to the persons to be nominated by Cosan and Shell as the Shareholder Representatives pursuant to the Shareholders’ Agreements for resolution.”
3.10	Clause 9
	3.10.1	A new Clause 9.1.1A is inserted immediately after Clause 9.1.1 of the Framework Agreement as follows:
		“9.1.1A     Subject to Clause 9.1.7, immediately before the Business Risk Sharing Date, each of the Cosan Parties is deemed to warrant to each of the Shell Parties that, other than as set out in the Cosan Disclosure Letter and the Cosan Additional Information, the Cosan Warranties are true, accurate and not misleading by reference to the facts and circumstances on the Business Risk Sharing Date.”
	3.10.2	The reference to “Cosan Warranties” in Clause 9.1.2 of the Framework Agreement is amended to read “Cosan Closing Warranties”.

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	3.10.3	A new Clause 9.1.3A is inserted immediately after Clause 9.1.3 of the Framework Agreement as follows:
		“9.1.3A                      Subject to Clause 9.1.8, immediately before the Business Risk Sharing Date, each of the Shell Parties is deemed to warrant to each of the Cosan Parties that, other than as set out in the Shell Disclosure Letter and the Shell Additional Information, the Shell Warranties are true, accurate and not misleading by reference to the facts and circumstances on the Business Risk Sharing Date.”
	3.10.4	The reference to “Shell Warranties” in Clause 9.1.4 of the Framework Agreement is amended to read “Shell Closing Warranties”.
	3.10.5	Clause 9.2.1 of the Framework Agreement is amended by replacing the phrase “and (c)” with the phrase “(c) the date immediately before the Business Risk Sharing Date; and (d)”.
	3.10.6	Clause 9.2.2 of the Framework Agreement is amended by replacing the phrase “and (c)” with the phrase “(c) the date immediately before the Business Risk Sharing Date; and (d)”.
3.11	Clause 10
	3.11.1	Clause 10.1.1(c) of the Framework Agreement shall be deleted and replaced by the insertion of:
	“(c)	by either Cosan or Shell (by notice in writing to all Parties) if the Closing would violate any nonappealable final order, decree or judgment of any Governmental Authority of competent jurisdiction;”
	3.11.2	Clause 10.1.1(d) of the Framework Agreement is amended by deleting the parenthetical “(including the Warranties)” and sub-clause 10.1.1(d)(i) and 10.1(d)(ii) in their entirety and replacing sub-clause 10.1.1(d)(iii) with the following:
	“(i)	render any Condition contained in Clause 5.1.2(c), Clause 5.1.3(d), Clause 5.1.3(f)(i) or, Clause 5.1.3(h) incapable of being cured by the Longstop Date”
3.12	Clause 11
	3.12.1	Clause 11.4.1 of the Framework agreement is amended by the insertion of the parenthetical “(which, for the purposes of a Claim relating to Tax shall include the Cosan nominee member and the Shell nominee member of the Tax Coordination Committee, as defined in the Operating and Coordination Agreement)” after the words “shall be referred to the Claim Review Board”.
	3.12.2	A new Clause 11.1.8 of the Framework Agreement is inserted as follows:
		“11.1.8 No Party may make a claim under an indemnity granted pursuant to Clause 11.1.1 before the Closing Date.  If Closing does not happen, no Party may make a claim under an indemnity granted pursuant to Clause 11.1.1.”

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	3.12.3	Clause 11.3.2 of the Framework Agreement is amended by the deletion of sub-clauses (a) and (b) and their replacement by the insertion of a new sub-clause (a) as follows:
		“(a) by notice in writing to the other Parties on or before the Business Risk Sharing Date; and/or”
	3.12.4	A new Clause 11.3A of the Framework Agreement is inserted as follows:
		“11.3A Actions relating to shareholder
			11.3A.1       In respect of an Action in which a JV Entity is a plaintiff or a defendant and which relates to (i) the Cosan Downstream Business or the Cosan S&E Business before the Business Risk Sharing Date or (ii) the Cosan Excluded Assets:
			(a)               such JV Entity shall pay any amount which it receives (by way of award, damages, release of judicial deposit or otherwise) relating to such Action, to Cosan or its relevant Subsidiary; and
			(b)               Cosan or its relevant Subsidiary shall be liable in full for any external costs and expenses incurred by the JV Entity in respect of such Action.
			11.3A.2       In respect of an Action in which a JV Entity is a plaintiff or a defendant and which relates to (i) the Shell Downstream Business before the Business Risk Sharing Date or (ii) the Shell Excluded Assets:
			(a)               such JV Entity shall pay any amount which it receives (by way of award, damages, release of judicial deposit or otherwise) relating to such Action, to Shell or its relevant Subsidiary; and
			(b)               Shell or its relevant Subsidiary shall be liable in full for any external costs and expenses incurred by the JV Entity in respect of such Action.”
3.13	Clause 20
	3.13.1	Each reference in Clause 20.1 of the Framework Agreement to a copy to be provided to:
		“Clifford Chance Rua Helena 260, 6th Floor CEP: 04552-050 São Paulo – SP Brazil Attention: Anthony Oldfield Fax: +55 (11) 3049 3198”
		is amended to refer to a copy to be provided to:

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		“Clifford Chance Rua Funchal 418, 15th Floor CEP: 04551-060 São Paulo – SP Brazil Attention: Anthony Oldfield Fax: +55 (11) 3019 6001”
	3.13.2	Clause 20.1.1 is amended by the insertion of the words“, by hand delivery” immediately after the words “by fax”.
	3.13.3	The notice address in Clause 20.1.1(i) of the Framework Agreement for Cosan/Cosan Limited/Cosan Distribuidora de Combustíveis Ltda./ Milimétrica Participações is deleted and replaced by:
		“Cosan S.A. Indústria e Comércio Avenida Juscelino Kubitscheck 1327, 4th floor CEP: 04543-011 Sao Paulo – SP Brazil Attention: Diretor Juridico e Diretor Financeiro General Counsel and Chief Financial Officer Fax: +55 (11) 3897 9799”
	3.13.4	A new Clause 20.1.3 is inserted immediately following the existing Clause 20.1.2 of the Framework Agreement as follows:
		20.1.3      Notwithstanding any other provision of this Agreement, any notice required hereunder to be sent to the Prospective Finance Committee may be sent by email as follows:
		(a)	if to Marcelo Martins (or any alternative person notified in writing to the other Parties by Cosan), to an email address notified by Cosan to the other Parties; and
		(b)	if to Tim Morrison (or any alternative person notified in writing to the other Parties by Shell), to an email address notified by Shell to the other Parties,
		provided that such notice must also be sent in accordance with the provisions of Clause 20.1.1.
3.14	Schedules
	3.14.1	Schedule 1 (Cosan Assets) of the Framework Agreement is deleted and replaced by the insertion of the contents of Schedule 3 (Cosan Assets) to this Agreement.
	3.14.2	Schedule 2 (Shell Assets) of the Framework Agreement is deleted and replaced by the insertion of the contents of Schedule 4 (Shell Assets) to this Agreement.
	3.14.3	Schedule 3 (Cosan Excluded Assets) of the Framework Agreement is deleted and replaced by the insertion of the contents of Schedule 5 (Cosan Excluded Assets) to this Agreement.

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	3.14.4	Schedule 4 (Shell Excluded Assets) of the Framework Agreement is deleted and replaced by the insertion of the contents of Schedule 6 (Shell Excluded Assets) to this Agreement.
	3.14.5	The Parties agree that Schedule 1, Schedule 2, Schedule 3 and Schedule 4 of the Framework Agreement, as amended by this Agreement, are the final form of each such document, and each Party hereby irrevocably waives any right to amend or challenge any of them pursuant to any of Clauses 6.6, 6.9.3, 7.2 or 8.16 of the Framework Agreement.
	3.14.6	Schedule 7 (Closing Steps) is amended by the deletion of paragraph 9.1.12 (Transaction Documents) and of the immediately following paragraph described as 9 (Adoption of policies, principles, standards and plans) in their entirety and the insertion of a new paragraph 9.1.12 as follows:
		“9.1.12 Transaction Documents Execution (to the extent not previously executed), or adoption by each relevant JV Entity, of the documents and instruments referred to in Schedule 11 (Transaction Documents).”
	3.14.7	Schedule 11 (Transaction Documents) of the Framework Agreement is deleted and replaced by the insertion of the contents of Schedule 7 (Transaction Documents) to this Agreement.
	3.14.8	A new Schedule 18 (Retail Sugar Assets) and Schedule 19 (Retail Sugar Employees) are inserted immediately after Schedule 17 of the Framework Agreement in the form of Schedule 9 (Retail Sugar) to this Agreement.
	3.14.9	A new Schedule 20 (Interim Commodoties and Derivatives Policies) is inserted immediately after new Schedule 19 of the Framework Agreement in the form of Schedule 10 (Interim Commodoties and Derivatives Policies) to this Agreement.
4.	GENERAL
4.1	Construction
	4.1.1	The Framework Agreement and this Agreement shall hereafter be read and construed as one document and references in the Framework Agreement to ‘this Agreement’ or ‘the Framework Agreement’ shall be read and construed as references to the Framework Agreement as amended by this Agreement.
	4.1.2	Except where inconsistent with the provisions of this Agreement, the terms of the Framework Agreement are hereby confirmed and remain in full force and effect.
4.2	Clause 20 of the Framework Agreement
		Clause 20 (General) of the Framework Agreement (as amended by this Agreement) shall apply to this Agreement as if it was set out in this Agreement, but as if references in that clause to the Framework Agreement were references to this Agreement.

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5.	AGREED FORM DOCUMENTS
	The following documents which were in Agreed Form at the Signing Date, have been amended and new Agreed Form versions have been initialled on behalf of each of Cosan and Shell on or about the date of this Agreement:
	(a)	Aviation Commercial Services Agreement;
	(b)	Aviation Lubricants Agency Agreement;
	(c)	Business Plan;
	(d)	Global Ethanol Trading Agreement;
	(e)	Joint Venture Agreement;
	(f)	Retail Lubricants Agency Agreement;
	(g)	Shell Brand Licensing Agreement; and
	(h)	Sugar and Ethanol Shareholders’ Agreement.
6.	COUNTERPARTS
	This Agreement may be executed in any number of counterparts each of which when executed and delivered is an original, but all the counterparts together constitute the same document.
7.	GOVERNING LAW AND LANGUAGE
	7.1.1	This Agreement and all non contractual or other obligations arising out of or in connection with it are governed by English law.
	7.1.2	This Agreement is drawn up in the English language. If this Agreement is translated into another language, the English language text prevails.
8.	ARBITRATION
	8.1.1	Any dispute (a “Dispute”) arising from or connected with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement or the consequences of its nullity), will be referred to and finally resolved by arbitration under the Rules, which Rules are deemed to be incorporated by reference into this Clause 8.
	8.1.2	The tribunal will consist of three arbitrators two of whom will be nominated by the respective parties, and the third, who shall act as chairman, shall be a national of a member state of the Organisation for Economic Co-operation and Development (except the United States of America, England or the Netherlands) and nominated by the other two arbitrators together (but failing agreement within 30 days of the appointment of the second arbitrator, the third arbitrator shall be appointed by the ICC). The seat of the arbitration will be São Paulo, Brazil, and the language of the arbitration will be English.

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8.1.3	The parties agree that the arbitral tribunal will have power to award on a provisional basis any relief that it would have power to grant on a final award.
8.1.4	Without prejudice to the powers of the arbitrator provided by the Rules, statute or otherwise, the arbitrator will have power at any time, on the basis of written evidence and the submissions of the Parties alone, to make an award in favour of the claimant (or the respondent if a counterclaim) in respect of any claims (or counterclaims) to which there is no reasonably arguable defence, either at all or except as to the amount of any damages or other sum to be awarded.
8.1.5	The Parties agree to keep confidential all materials used in and all awards received as a result of any Dispute proceedings, except to the extent required to be disclosed by applicable Law.
8.1.6	The Parties exclude any rights to refer points of law or to appeal to the courts, to the extent that they can validly waive these rights.

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SIGNATURES

THIS AGREEMENT has been signed and executed as a DEED by the Parties and is delivered by them on the date specified above.

COSAN
Executed as a DEED by
for and on behalf of COSAN S.A. INDÚSTRIA E COMÉRCIO by	) ) /s/ Marcelo Eduardo Martins )
	Name: Marcelo Eduardo Martins Title:
and by	)
	) /s/ Marcelo de Souza Scarcela Portela
	)
	Name: Marcelo de Souza Scarcela Portela Title:
in the presence of
	Signature of witness
	Name of witness:
	Address of witness
	Occupation of witness
COSAN DOWNSTREAM HOLDCO
Executed as a DEED by
for and on behalf of COSAN DISTRUIBUIDORA DE COMPUSTÍVEIS LTDA. by		) ) /s/ Marcelo Eduardo Martins ) )
		Name: Marcelo Eduardo Martins Title:
and by		)
		) /s/ Marcelo de Souza Scarcela Portela
		)
		Name: Marcelo de Souza Scarcela Portela Title:
in the presence of
		Signature of witness
		Name of witness
		Address of witness
		Occupation of witness

30

COSAN LIMITED
Executed as a DEED by
for and on behalf of COSAN LIMITED by	) ) /s/ Marcelo Eduardo Martins )
	Name: Marcelo Eduardo Martins Title:
in the presence of
	Signature of witness /s/ Eleanor West
	Name of witness Eleanor West
	Address of witness Rua Funchal 418 15th Floor SP 04551-060, São Paulo, Brazil
	Occupation of witness Solicitor

MANAGEMENT CO
Executed as a DEED by
for and on behalf of HOUCHES HOLDINGS S.A. by	) ) /s/ R. Krug Fenz )
	Name: R. Krug Fenz Title:
and by	)
	) /s/ Richard M. Oblath
	)
	Name: Richard M. Oblath Title:
in the presence of
	Signature of witness
	Name of witness
	Address of witness
	Occupation of witness

31

SHELL
Executed as a DEED by
for and on behalf of SHELL BRAZIL HOLDING B.V. by	) ) /s/ Richard M. Oblath )
	Name: Richard M. Oblath Title:
in the presence of
	Signature of witness /s/ Eleanor West
	Name of witness Eleanor West
	Address of witness Rua Funchal 418 15th Floor SP 04551-060, São Paulo, Brazil
	Occupation of witness Solicitor

SHELL BRASIL LIMITADA
Executed as a DEED by
for and on behalf of SHELL BRASIL LIMITADA by	) ) /s/ R. Krug Fenz )
	Name: R. Krug Fenz Title:
and by	)
	) /s/ Richard M. Oblath
	)
	Name: Richard M. Oblath Title:
in the presence of
	Signature of witness
	Name of witness
	Address of witness
	Occupation of witness

32

SHELL UK CO
Executed as a DEED by
for and on behalf of SHELL OVERSEAS HOLDINGS LIMITED by	) ) /s/ Richard M. Oblath ) )
	Name: Richard M. Oblath Title:
in the presence of
	Signature of witness /s/ Eleanor West
	Name of witness Eleanor West
	Address of witness Rua Funchal 418 15th Floor SP 04551-060, São Paulo, Brazil
	Occupation of witness Solicitor

33

SUGAR AND ETHANOL CO
Executed as a DEED by
for and on behalf of RAIZEN ENERGIA S.A. by	) ) /s/ Marcelo Eduardo Martins )
	Name: Marcelo Eduardo Martins Title:
and by	)
	) /s/ Marcelo de Souza Scarcela Portela
	)
	Name: Marcelo de Souza Scarcela Portela Title:
in the presence of
	Signature of witness
	Name of witness
	Address of witness
	Occupation of witness

34

EX-4.5

Exhibit 4.5

COSAN S.A. INDÚSTRIA E COMÉRCIO

COSAN DISTRIBUIDORA DE COMBUSTÍVEIS LTDA.

COSAN LIMITED

RAÍZEN S.A.

SHELL BRASIL S.A.

SHELL BRAZIL HOLDING B.V.

SHELL OVERSEAS HOLDINGS LIMITED

RAÍZEN ENERGIA PARTICIPAÇÕES S.A.

AMENDMENT AGREEMENT TO THE FRAMEWORK AGREEMENT

CONTENTS
Clause	Page

1. INTERPRETATION AND CONSTRUCTION 3

2. FINAL CALCULATION DATE 3

3. TRANSACTION DOCUMENTS 3

4. TAX 4

5. ASSIGNMENTS OF SUGAR CANE SUPPLY CONTRACTS AND REAL ESTATE AGREEMENTS 4

6. COSAN TARGET NET DEBT 5

7. IOF 5

8. TRADING 6

9. REIMBURSEMENT OF TRANSITION TEAM EXPENSES 6

10. ASSUMPTIONS FOR ALLOCATION OF SHARES 9

11. SHAREHOLDER CONTROLLED MATTERS AND LEGAL COST SHARING 9

12. GENERAL 9

13. GOVERNING LAW AND LANGUAGE 10

SCHEDULE 1 11

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THIS AGREEMENT is dated 1 June 2011 between:

PARTIES

(1)	COSAN S.A. INDÚSTRIA E COMÉRCIO, a company organized and existing under the laws of Brazil, with its head office at Avenida Presidente Juscelino Kubitschek nº 1327, 4º andar, São Paulo – SP CEP 04543-011, enrolled with the Brazilian tax registry under No. 50.746.577/0001-15 (“Cosan”);
(2)	COSAN DISTRIBUIDORA DE COMBUSTÍVEIS LTDA., a company organized and existing under the laws of Brazil, with its head office at Fazenda Pau D’Alho, s/nº, Prédio Administrativo Cosan, in the City of Barra Bonita, State of São Paulo, CEP 17340-000, enrolled with the Brazilian tax registry under No. 02.041.195/0001-43 (“Cosan Downstream Holdco”);
(3)	COSAN LIMITED, a company incorporated under the laws of Bermuda and whose registered office is at Crawford House, 50 Cedar Avenue, Hamilton HM 11, Bermuda (“Cosan Limited”);
(4)	RAÍZEN S.A. (formerly known as HOUCHES HOLDINGS S.A.), a company organized and existing under the laws of Brazil, with its head office at Avenida Presidente Juscelino Kubitschek nº 1327, 6º andar, São Paulo – SP CEP 04543-011, enrolled with the Brazilian tax registry under No. 10.773.432/0001-99 (the “Management Co”);
(5)	SHELL BRAZIL HOLDING B.V., a company incorporated under the laws of the Netherlands with registered number 27192050 0000 and whose registered office is at Carel van Bylandtlaan 30, 2596HR ‘s-Gravenhage, The Netherlands (“Shell”);
(6)	SHELL BRASIL S.A. (formerly known as SHELL BRASIL LIMITADA), a company organized and existing under the laws of Brazil, with its head office at Avenida das Américas, 4200, blocos 5 e 6, Barra da Tijuca in the City of Rio de Janeiro, State of Rio de Janeiro, CEP 22640-102, enrolled with the Brazilian tax registry under No. 33.453.598/0001-23 (the “Downstream Co”);
(7)	SHELL OVERSEAS HOLDINGS LIMITED, a company incorporated under the laws of England with registered number 00596107 and whose registered office is at Shell Centre, London, SE1 7NA (“Shell UK Co”); and
(8)	RAÍZEN ENERGIA PARTICIPAÇÕES S.A. (formerly known as MILIMÉTRICA PARTICIPAÇÕES S.A.), a company organized and existing under the laws of Brazil, with its head office at Avenida Presidente Juscelino Kubitschek nº 1327, 6º andar, São Paulo – SP CEP 04543-011, enrolled with the Brazilian tax registry under No. 12.182.297/0001-32 (the “Sugar and Ethanol Co”),

each hereafter referred to as a “Party” and together as the “Parties”.

- 2 -

RECITALS

(A)	Pursuant to the Framework Agreement (as defined below), the Parties have agreed to establish the Joint Venture to combine certain of the assets of Cosan and Shell, primarily in Brazil.
(B)	As at the date of this Agreement all conditions to Closing have been satisfied and the Parties are working together to effect the Closing.
(C)	Certain issues have arisen which require certain clarifications or amendments to the Framework Agreement and the Parties have agreed to enter into this Agreement and, where applicable, to amend the Framework Agreement to reflect their common intention in relation to such matters.

THE PARTIES AGREE AS FOLLOWS:

1.	INTERPRETATION AND CONSTRUCTION
1.1	In this Agreement “Framework Agreement” means the framework agreement dated 25 August 2010 made between the Parties, as amended pursuant to an amendment agreement dated 7 April 2011.
1.2	Unless a contrary indication appears, capitalized terms used in this Agreement shall have the same meanings given to them in the Framework Agreement.
1.3	Clause 1.2 (Construction) of the Framework Agreement shall apply to this Agreement as if it were set out herein, but as if references in that clause to the Framework Agreement were references to this Agreement.
2.	FINAL CALCULATION DATE
2.1	The Parties acknowledge that they have agreed pursuant to a letter dated 31 May 2011 that the Closing Date shall be 1 June 2011.
2.2	Clause 1.1 of the Framework Agreement is amended by the inclusion of the following definition, in alphabetical order among the definitions otherwise contained in the Framework Agreement:
	““Final Calculation Date” means close of business on 31st May 2011;”
2.3	The Parties agree that all references to “Closing Date” in Clause 6.10 of the Framework Agreement are amended to read “Final Calculation Date”.
3.	TRANSACTION DOCUMENTS
3.1	Schedule 11 (Transaction Documents) of the Framework Agreement is deleted and replaced by the insertion of the contents of Schedule 1 (Transaction Documents) to this Agreement.

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4.	TAX
4.1	A new Clause 6.11.5 is inserted immediately after Clause 6.11.4 of the Framework Agreement as follows:
	“6.11.5 Tax
	(a)	If, after the Closing Date, Cosan or Shell pays any Tax incurred or accrued during the Business Risk Transfer Period in relation to a company or asset held by the Joint Venture after the Closing Date, the relevant Shareholder shall be reimbursed the amount of such Tax by the relevant JV Entity(ies) by wire transfer within ten Business Days of notification by the relevant Shareholder accompanied by evidence of the amount of Tax so paid and its relevance to the assets.
	(b)	If, after the Closing Date, any JV Entity uses any Tax benefit from any asset held by a Shareholder after the Closing Date, whether or not such benefit is booked in the accounts of the relevant JV Entity at the Closing Date, the relevant Shareholder shall be reimbursed the amount of such Tax benefit by the relevant JV Entity(ies); provided that the relevant JV Entity shall only be liable to reimburse such amount after the JV Entity has used such benefit to reduce any Tax which would otherwise be due and payable by it.
	(c)	For the avoidance of doubt, nothing in this Clause 6.11.5 shall affect the treatment of NOLs set out in Clause 6.11.4.”
5.	ASSIGNMENTS OF SUGAR CANE SUPPLY CONTRACTS AND REAL ESTATE AGREEMENTS
5.1	The definition of Assignment and Assumption Agreement of Sugar Cane Supply Contracts in Clause 1.1 of the Framework Agreement is deleted and replaced by the insertion of a new definition as follows:
	““Assignment and Assumption Agreement of Sugar Cane Supply Contracts” means the assignment agreement (Instrumento Particular de Contrato de Cessão de Contratos de Compra e Venda de Cana-de-Acucar) between Cosan and CAA dated 17 March 2011;”
5.2	The definition of Real Estate Agreements in Clause 1.1 of the Framework Agreement is deleted and replaced by the insertion of a new definition as follows:
	““Real Estate Agreements” means the real estate agreements described in Part J of Schedule 1 (Cosan Assets), item (xxiv), paragraphs I.A and II.A, under the headings “Rural Lease Agreements”;”

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5.3	The definition of Real Estate Assignment Agreement in Clause 1.1 of the Framework Agreement is deleted and replaced by the insertion of a new definition as follows:
	““Real Estate Assignment Agreements” means the assignment agreements, and the notices of assignment, each dated 1 February 2011, relating to the assignment of certain rural lease agreements by Cosan S.A. Indústria e Comércio to Cosan S.A. Açúcar e Álcool;”
5.4	Clause 8.7A.1 of the Framework Agreement is deleted and replaced by the insertion of a new clause as follows:
	“8.7A.1 Each of the Cosan Parties warrants on the Business Risk Sharing Date and is deemed to warrant on the Closing Date, to each of the Shell Parties that the Real Estate Assignment Agreements and any subsequent additions thereto, are legal, valid and enforceable as of the Business Risk Sharing Date and the Closing Date respectively and effect the assignment to a JV Entity of all the Real Estate Agreements that Cosan is required to assign to a JV Entity pursuant to this Agreement.”
6.	COSAN TARGET NET DEBT
	The definition of Cosan Target Net Debt is amended by the deletion of “US$2,524,000,000” and its replacement by “US$2,726,589,755”.
7.	IOF
7.1	The Parties acknowledge that at Closing, Downstream Co will have Debt owing to Shell or an Affiliate of Shell in a total aggregate amount of USD151 million (such amount being included in the Net Debt of Downstream Co).  In order to contribute the Downstream Co with zero Net Debt from Shell at Closing, Shell agrees that it will:
	7.1.1	procure that Cash in an amount of [BRL equivalent of USD129.5 million] (plus interest accrued on such amount at LIBOR plus 340 basis points until 24 June 2011) remains in the Downstream Co at Closing;
	7.1.2	procure that Downstream Co shall enter into a forward foreign exchange transaction with Citibank (or any other bank that may be agreed by Downstream Co and Shell) pursuant to which Downstream Co will pay to Citibank on the Closing Date, the Cash described in Clause 7.1.1 above and Citibank will pay USD129.5 million (plus the USD equivalent of the interest described in Clause 7.1.1 above) to Shell Finance (Netherlands) BV on 24 June 2011; and
	7.1.3	procure that Downstream Co shall create a receivable in its accounts from Shell Brasil Petróleo for USD21.5 million, such amount to be repaid, together with interest accrued on such amount on the same basis as the interest accrued on the Cash to be paid pursuant to Clause 7.1.1 above, to Downstream Co by Shell Brasil Petróleo on 31 March 2012.

- 5 -

7.2	Downstream Co agrees to pay to Shell Finance (Netherlands) BV on 31 March 2012, the amount Downstream Co receives from Shell Brasil Petróleo pursuant to the payment of the receivable described at Clause 7.1.3 above.
7.3	The Parties agree that any costs or expenses incurred by Shell, its Affiliates or the Joint Venture in connection with the steps set out in Clauses 7.1 and 7.2 above, including interest payments or any foreign exchange movements shall be borne, paid or reimbursed (as appropriate) by Shell.
8.	TRADING
	Clause 8.25 of the Framework Agreement is deleted and replaced with a new clause as follows:
	“8.25        Trading Policy
	8.25.1           Within 30 days after the Closing Date, the Parties shall negotiate in good faith and in accordance with the Transaction Documents the wording of the provisions of the Joint Venture’s Trading Policy regarding: (i) trading by the Joint Venture of non-sugarcane ethanol in Brazil; and (ii) trading by the Joint Venture of non-sugarcane ethanol outside of Brazil (subject to the Global Ethanol Trading Agreement).
	8.25.2           In the event the Parties do not agree such wording within 30 days after the Closing Date, either Party may refer the matter to arbitration, in accordance with the provisions of Clause 22 (Arbitration).
	8.25.3           The Parties shall procure that each JV Entity adopts the Interim Commodities and Derivatives Policies, which shall remain in force until the Parties agree the wording of the Joint Venture’s Trading Policy pursuant to Clause 8.25.1 above, or an arbitration award or settlement is reached pursuant to Clause 8.25.2 above (as the case may be).”
9.	REIMBURSEMENT OF TRANSITION TEAM EXPENSES
9.1	The Parties agree that any operational expenses and capital expenditures incurred by each Shareholder in connection with the activities of the Transition Team, other than activities taken on behalf of a Shareholder to fulfil such Shareholder’s obligations pursuant to a Transaction Document (the “Transition Costs”), shall be reimbursed by the Joint Venture to the relevant Shareholder.  The Parties acknowledge that due to the different corporate structures by which each Shareholder is contributing assets to the Joint Venture, the respective methods of reimbursement are also different.

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9.2	The “Shell Estimated Reimbursement Amount” is R$38,770,000.
	The “Cosan Estimated Reimbursement Opex Amount” is R$27,204,000.
	The “Cosan Estimated Reimbursement Capex Amount” is R$25,200,000.
9.3	At Closing:
	9.3.1	the Shell Estimated Reimbursement Amount shall be set off against the amount of cash to be contributed by Shell pursuant to Clause 2.4(a)(i) of the Framework Agreement such that the actual amount of cash so transferred by Shell at Closing shall be reduced by an amount equal to the Shell Estimated Reimbursement Amount;
	9.3.2	the amount of the Cosan Debt shall be increased by an amount equal to the Cosan Estimated Reimbursement Opex Amount; and
	9.3.3	Cosan shall contribute to the Joint Venture all assets acquired by it as a result of its capital expenditures in connection with the activities of the Transition Team (from 1 April 2010 to 31 March 2011 (inclusive)) and the amount of the Cosan Debt shall be increased by an amount equal to the Cosan Estimated Reimbursement Capex Amount.
9.4	Each of Cosan and Shell shall provide to the other together with the Cosan Final Balance Sheets or Shell Final Balance Sheets (as applicable):
	9.4.1	a list showing each former employee of the relevant Shareholder who was a member of the Transition Team and setting out the following for each former employee:
		(a)	the date on which the relevant former employee joined the Transition Team on a full-time basis (“Start Date”);
		(b)	annual salary;
		(c)	pro rata salary for the period from the Start Date to 31 March 2011 (inclusive) (the “Salary”);
		(d)	where the Start Date was in 2010, details of any bonus or other benefit paid to the relevant former employee in 2010 and a calculation of the pro rata bonus or other benefit for the period from the Start Date to 31 December 2010 (inclusive) (the “2010 Bonus”); and
		(e)	details of any bonus or other benefit to be paid to the relevant former employee in 2011 and a calculation of the pro rata bonus or other benefit for the period from either 1 January 2011 (where the Start Date was in 2010) or the Start Date (where the Start Date was in 2011) to 31 March 2011 (inclusive) (the “2011 Bonus”).

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	9.4.2	accounts showing the Transition Costs (including the aggregate Salary, 2010 Bonus and 2011 Bonus) incurred by the relevant Shareholder (from 1 April 2010 up to and including 31 March 2011).
9.5	The “Shell Actual Reimbursement Amount” shall be the aggregate of the operational expenses and the capital expenditure shown in the accounts provided by Shell pursuant to Clause ‎9.4.2 above.
	The “Cosan Actual Reimbursement Opex Amount” shall be the aggregate of the operational expenses shown in the accounts provided by Cosan pursuant to Clause 9.4.2 above.
	The “Cosan Actual Reimbursement Capex Amount” shall be the aggregate of the capital expenditure shown in the accounts provided by Cosan pursuant to Clause 9.4.2 above.
9.6	Any difference between the Shell Actual Reimbursement Amount and the Shell Estimated Reimbursement Amount, or the Cosan Actual Reimbursement Opex Amount and the Cosan Estimated Reimbursement Opex Amount, or the Cosan Actual Reimbursement Capex Amount and the Cosan Estimated Reimbursement Capex Amount shall be included and form part of the adjustments to be made pursuant to Clause 6.11 of the Framework Agreement.
9.7	Clause 6.11 of the Framework Agreement is amended by the insertion of a new sentence at the end of Clause 6.11.1 as follows:
	“If the amount contributed to the JV Entities by Cosan at Closing was greater than the Cosan Net Income, then the Joint Venture shall pay to Cosan an amount equal to such amount plus interest on such amount at the CDI Rate accrued from the Closing Date to the date of payment (inclusive).”
9.8	Clause 6.11 of the Framework Agreement is amended by the insertion of a new sentence at the end of Clause 6.11.2 as follows:
	“ If the amount contributed to the JV Entities by Shell at Closing was greater than the Shell Net Income, then the Joint Venture shall pay to Shell an amount equal to such amount plus interest on such amount at the CDI Rate accrued from the Closing Date to the date of payment (inclusive).”

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10.	ASSUMPTIONS FOR ALLOCATION OF SHARES
	The Parties acknowledge and agree that any assumptions, including but not limited to valuation, gross debt, net debt and allocation of debt or value between entities made in connection with the allocation of shares in the JV Entities at Closing have been made solely for the purpose of such allocation and shall not set a precedent for any assumptions to be made for any other purpose, nor supercede the operation or interpretation of the Framework Agreement.
11.	SHAREHOLDER CONTROLLED MATTERS AND LEGAL COST SHARING
11.1	Clause 11.3.2(a) of the Framework Agreement is deleted and replaced with a new sub-clause as follows:
	“(a)	by notice in writing to the other Parties at any time until (and including) the day which is 180 days after the Closing Date;”
11.2	A new Clause 8.26 is inserted immediately after Clause 8.25 of the Framework Agreement as follows:
	“8.26           Cosan and Shell shall negotiate in good faith and use their respective reasonable endeavours to agree a cost-sharing, information and management mechanism for the Joint Venture’s internal litigation structure within 180 days after the Closing Date.  During the first 90 days of this period, the internal litigation costs of the Joint Venture shall be allocated equally between the Shareholders.  During the following 90 days the internal litigation costs of the Joint Venture shall be borne 60 per cent. by Cosan and 40 per cent. by Shell.  If, within 180 days after the Closing Date the Parties have not entered into a written agreement to document this matter to their mutual satisfaction, the internal litigation costs of the Joint Venture shall be allocated to the Shareholders on the basis of the proportion of the total number of Third Party Claims (by number and not value) for which each Shareholder is the Indemnifying Party.”
12.	GENERAL
12.1	The Framework Agreement and this Agreement shall hereafter be read and construed as one document and references in the Framework Agreement to ‘this Agreement’ or ‘the Framework Agreement’ shall be read and construed as references to the Framework Agreement as amended by this Agreement.
12.2	Except where inconsistent with the provisions of this Agreement, the terms of the Framework Agreement are hereby confirmed and remain in full force and effect.
12.3	Clause 20 (General) of the Framework Agreement (as amended by this Agreement) shall apply to this Agreement as if it was set out in this Agreement, but as if references in that clause to the Framework Agreement were references to this Agreement.

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12.4	This Agreement may be executed in any number of counterparts each of which when executed and delivered is an original, but all the counterparts together constitute the same document.
13.	GOVERNING LAW AND LANGUAGE
13.1	This Agreement and all non contractual or other obligations arising out of or in connection with it are governed by English law.
13.2	This Agreement is drawn up in the English language. If this Agreement is translated into another language, the English language text prevails.
13.3	Any dispute (a “Dispute”) arising from or connected with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement or the consequences of its nullity), will be referred to and finally resolved by arbitration under the Rules, which Rules are deemed to be incorporated by reference into this Clause 13.
13.4	The tribunal will consist of three arbitrators one of whom will be nominated by Shell, one of whom will be nominated by Cosan, and the third, who shall act as chairman, shall be a national of a member state of the Organisation for Economic Co-operation and Development (except the United States of America, England or the Netherlands) and nominated by the other two arbitrators together (but failing agreement within 30 days of the appointment of the second arbitrator, the third arbitrator shall be appointed by the ICC). The seat of the arbitration will be São Paulo, Brazil, and the language of the arbitration will be English.
13.5	The parties agree that the arbitral tribunal will have power to award on a provisional basis any relief that it would have power to grant on a final award.
13.6	Without prejudice to the powers of the arbitrator provided by the Rules, statute or otherwise, the arbitrator will have power at any time, on the basis of written evidence and the submissions of the Parties alone, to make an award in favour of the claimant (or the respondent if a counterclaim) in respect of any claims (or counterclaims) to which there is no reasonably arguable defence, either at all or except as to the amount of any damages or other sum to be awarded.
13.7	The Parties agree to keep confidential all materials used in and all awards received as a result of any Dispute proceedings, except to the extent required to be disclosed by applicable Law.
13.8	The Parties exclude any rights to refer points of law or to appeal to the courts, to the extent that they can validly waive these rights.

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SCHEDULE 1

TRANSACTION DOCUMENTS

Primary documents

1.	Framework Agreement
2.	Amendment Agreement to the Framework Agreement dated 7 April 2011
3.	Amendment Agreement to the Framework Agreement dated the Closing Date
4.	Closing Date Amendment Letter
5.	Trading Agreement
6.	Joint Venture Agreement
7.	Downstream Shareholders’ Agreement
8.	Sugar and Ethanol Shareholders’ Agreement
9.	Operating and Coordination Agreement
10.	ROSM Agreement
11.	Downstream Byelaws
12.	S&E Byelaws
13.	Management Co Byelaws
14.	Compensation Agreement between the Sugar and Ethanol Co and ROSM in respect of the Downstream Co, in Agreed Form
15.	Compensation Agreement between the Downstream Co and ROSM in respect of the Sugar and Ethanol Co, in Agreed Form
16.	Assignment agreement relating to the Cosan Downstream Licensing Agreement, as referred to in Part B of Schedule 8 (Consents) of the Framework Agreement
17.	Consent letter in respect of the assignment agreement relating to the Cosan Downstream Licensing Agreement, as referred to in Part B of Schedule 8 (Consents) of the Framework Agreement
Structural documents
18.	Documentation in a form reasonably acceptable to Cosan and Shell to effect the transfer of the assets required to be transferred:
	(a)	pursuant to the Cosan Restructuring Plan;
	(b)	pursuant to the Shell Restructuring Plan; and
	(c)	at Closing in accordance with Clause 2 (Establishment of the Joint Venture)

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19.	Codexis Agreement
20.	Codexis Sublicence Agreement
21.	Cosan Additional Information
22.	Cosan Pledge Agreement
23.	Cosan Disclosure Letter
24.	Iogen Sublicence Agreement
25.	Share Swap Agreement
26.	Shell Additional Information
27.	Shell Disclosure Letter
28.	Shell Pledge Agreement
29.	Cosan Restructuring Plan
30.	Shell Restructuring Plan
Related party agreements and intra-Joint Venture documents
31.	Aviation Commercial Services Agreement
32.	Aviation Lubricants Agency Agreement
33.	Aviation Technical Services Agreement
34.	Ethanol Supply Agreement
35.	Global Ethanol Trading Agreement
36.	Global Hydrocarbons Trading Agreement
37.	Legal Cost Sharing Agreement
38.	Logistics Agreement
39.	Logistics Assignment Agreement
40.	Pasadena Waiver Letter
41.	Retail Lubricants Agency Agreement
42.	Share Assignment Agreements in respect of each member of the Supervisory Board of each of the Downstream Co, the Sugar and Ethanol Co, the Management Co and the CAA

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43.	Shell Brand Licensing Agreement
44.	Shell C&P SLA
45.	Shell Lease Agreement
46.	Lease agreement between Shell Brasil Petroleo Ltda and the Downstream Co
47.	Shell R&I SLA
48.	Shell S&D SLA
49.	Shell Software Licence Agreement
50.	a letter relating to certain matters ancillary to the Logistics Agreement from Cosan to the Sugar and Ethanol Co in Agreed Form
51.	a letter relating to certain matters ancillary to the Retail Lubricants Agency Agreement between the Downstream Co and Shell Brasil Petróleo in Agreed Form
52.	assignment agreements in respect of the Real Estate Agreements
53.	Shareholder Representative Appointment Notice from Cosan
54.	Shareholder Representative Appointment Notice from Shell
55.	Tax Coordination Committee Appointment Notice from Cosan
56.	Tax Coordination Committee Appointment Notice from Shell
57.	Tax Coordination Committee Appointment Notice from the JV Entities
58.	Claim Review Board Appointment Notice from Shell
59.	Claim Review Board Appointment Notice from Cosan
60.	SBLA Novation Agreement
61.	Cosan Software Licence Agreement
62.	Assignment and Assumption Agreement of Sugar Cane Supply Contracts
63.	Derivatives Schedule (as defined in Clause 6.1)
64.	Assignment and Assumption (Ispagnac) Agreement
65.	Sugar Services SLA
66.	Retail Brand Standards Variation Consent Letter
67.	Agreement relating to temporary employee arrangements (Instrumento particular de convênio para cessão de mão de obra e outras avenças) in respect of Shell employees

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68.	Agreement relating to temporary employee arrangements (Instrumento particular de convênio para cessão de mão de obra e outras avenças) in respect of Cosan employees
Principles, Standards, Policies and Plans
69.	General Business Principles
70.	HR Principles
71.	Code of Conduct
72.	HSSE and SD Standards
73.	HSSE and SD Transition Plan
74.	Treasury Policies
75.	Interim Commodities and Derivatives Policies
76.	Risk Management Policy
77.	Risk and Insurance Strategy
78.	Internal Audit Methodology
79.	Business Plan
80.	JV Operating Plan
81.	Manual of Authorities
82.	Cosan SLA
Corporate Documents
83.	All corporate actions that the parties consider reasonably necessary or desirable to effect the Closing (including the passing of appropriate board and shareholders’ resolutions).

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SIGNATURES

THIS AGREEMENT has been signed and executed as a DEED by the Parties and is delivered by them on the date specified above.

COSAN
Executed as a DEED by
for and on behalf of COSAN S.A. INDÚSTRIA E COMÉRCIO by	) ) /s/ Marcelo Eduardo Martins )
	Name: Marcelo Eduardo Martins Title:
and by	)
	) /s/ Marcos Marinho Lutz
	)
	Name: Marcos Marinho Lutz Title:
in the presence of
	Signature of witness
	Name of witness
	Address of witness
	Occupation of witness
COSAN DOWNSTREAM HOLDCO
Executed as a DEED by
for and on behalf of COSAN DISTRUIBUIDORA DE COMBUSTÍVEIS LTDA. by		) ) /s/ Rubens Ometto Silveira Mello ) )
		Name: Rubens Ometto Silveira Mello Title:
and by		)
		) /s/ Pedro Isamu Mizutani
		)
		Name: Pedro Isamu Mizutani Title:
in the presence of
		Signature of witness
		Name of witness
		Address of witness
		Occupation of witness

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COSAN LIMITED
Executed as a DEED by
for and on behalf of COSAN LIMITED by	) ) /s/ Marcelo Eduardo Martins )
	Name: Marcelo Eduardo Martins Title:
	)
	) /s/ Marcos Marinho Lutz
	)
	Name: Marcos Marinho Lutz Title:
and by	)
	) /s/ Rubens Ometto Silveira Mello
	)
	Name: Rubens Ometto Silveira Mello Title:
	Signature of witness
	Name of witness
	Address of witness
	Occupation of witness

MANAGEMENT CO
Executed as a DEED by
for and on behalf of RAÍZEN S.A. by	) ) /s/ Roby Krug Fenz )
	Name: Roby Krug Fenz Title: Attorney in Fact
and by	)
	) /s/ Richard M. Oblath
	)
	Name: Richard M. Oblath Title: Attorney in Fact
in the presence of
	Signature of witness
	Name of witness
	Address of witness
	Occupation of witness

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SHELL
Executed as a DEED by
for and on behalf of SHELL BRAZIL HOLDING B.V. by	) ) /s/ Roby Krug Fenz )
	Name: Roby Krug Fenz Title: Attorney in Fact
in the presence of
	Signature of witness /s/ Eleanor West
	Name of witness Eleanor West
	Address of witness Rua Funchal 418, 15th Floor SP 04551-060, Brazil
	Occupation of witness Solicitor

DOWNSTREAM CO
Executed as a DEED by
for and on behalf of SHELL BRASIL S.A. by	) ) /s/ Roby Krug Fenz )
	Name: Roby Krug Fenz Title: Attorney in Fact
and by	)
	) /s/ Richard M. Oblath
	)
	Name: Richard M. Oblath Title: Attorney in Fact
in the presence of
	Signature of witness
	Name of witness
	Address of witness
	Occupation of witness

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SHELL UK CO
Executed as a DEED by
for and on behalf of SHELL OVERSEAS HOLDINGS LIMITED by	) ) /s/ Roby Krug Fenz ) )
	Name: Roby Krug Fenz Title: Attorney in Fact
in the presence of
	Signature of witness /s/ Eleanor West
	Name of witness Eleanor West
	Address of witness Rua Funchal 418, 15th Floor SP 04551-060, Brazil
	Occupation of witness Solicitor

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SUGAR AND ETHANOL CO
Executed as a DEED by
for and on behalf of RAÍZEN ENERGIA PARTICIPAÇÕES S.A. by	) ) /s/ Pedro Isamu Mizutani )
	Name: Pedro Isamu Mizutani Title:
and by	)
	) /s/ Marcelo Eduardo Martins
	)
	Name: Marcelo Eduardo Martins Title:
in the presence of
	Signature of witness
	Name of witness
	Address of witness
	Occupation of witness

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EX-4.6

Exhibit 4.6

EXECUTION VERSION

COSAN S.A. INDÚSTRIA E COMÉRCIO COSAN LIMITED RAÍZEN COMBUSTÍVEIS S.A. RAÍZEN S.A. SHELL BRAZIL HOLDING B.V. SHELL OVERSEAS HOLDINGS LIMITED RAÍZEN ENERGIA PARTICIPAÇÕES S.A.
	JOINT VENTURE AGREEMENT

CONTENTS
Clause	Page

SECTION ONE: INTERPRETATION AND DEFINITIONS	3
SECTION TWO: EXERCISE PERIODS	24
SECTION THREE: YEAR TEN OPTIONS	25
SECTION FOUR: YEAR FIFTEEN OPTIONS	27
SECTION FIVE: DISQUALIFICATION OPTIONS	33
SECTION SIX: LOCK-UP	40
SECTION SEVEN: QUALIFIED LOCK-UP PERIOD OPTIONS	44
SECTION EIGHT: FUNDAMENTAL BREACH	46
SECTION NINE: OPTION COMPLETION	51
SECTION TEN: REPRESENTATIONS AND WARRANTIES	57
SECTION ELEVEN: COVENANTS OF THE PARTIES	58
SECTION TWELVE: GENERAL	62
SIGNATURES	68

THIS JOINT VENTURE AGREEMENT is dated 1 June 2011 between:

PARTIES

(1) COSAN S.A. INDÚSTRIA E COMÉRCIO, a company organized and existing under the laws of Brazil, with its head office at Avenida Presidente Juscelino Kubitschek, 1327 4 º andar, São Paulo – SP, CEP 04543-011, Brazil, enrolled with the Brazilian tax registry under No. 50.746.577/0001-15 ("Cosan");

(2) COSAN LIMITED, a company incorporated under the laws of Bermuda and whose registered office is at Crawford House, 50 Cedar Avenue, Hamilton HM 11, Bermuda ("Cosan Limited");

(3) RAÍZEN COMBUSTÍVEIS S.A., a company organized and existing under the laws of Brazil, with its head office at Avenida das Américas, 4200, Blocos 5 & 6, Barra da Tijuca, Rio de Janeiro – RJ, CEP 22640-102, Brazil, enrolled with the Brazilian tax registry under No. 33.453.598/0001-23 (the "Downstream Co");

(4) RAÍZEN S.A., a company organized and existing under the laws of Brazil, with its head office at Avenida Presidente Juscelino Kubitschek, 1327, 6 º andar (part), São Paulo – SP, CEP 04543-011, Brazil, enrolled with the Brazilian tax registry under No. 10.773.432/0001-99 (the "Management Co");

(5) SHELL BRAZIL HOLDING B.V., a company incorporated under the laws of the Netherlands with registered number 27192050 0000 and whose registered office is at Carel van Bylandtlaan 30, 2596HR 's-Gravenhage, The Netherlands ("Shell");

(6) SHELL OVERSEAS HOLDINGS LIMITED, a company incorporated under the laws of England with registered number 00596107 and whose registered office is at Shell Centre, London, SE1 7NA ("Shell UK Co"); and

(7) RAÍZEN ENERGIA PARTICIPAÇÕES S.A., a company organized and existing under the laws of Brazil, with its head office at Avenida Presidente Juscelino Kubitschek, 1327, 6 º andar, São Paulo – SP, CEP 04543-011, Brazil, enrolled with the Brazilian tax registry under No. 12.182.297/0001-32 (the "Sugar and Ethanol Co"),

each hereafter referred to as a "Party" and together as the "Parties".

RECITALS

(A) Pursuant to the terms of the Framework Agreement (as defined below), Cosan and Shell agreed to establish the Joint Venture (as defined below) to combine certain of their assets primarily in Brazil.

(B) Cosan and Shell have an equal economic interest in the Joint Venture and as a general principle, Cosan and Shell will share the profits, losses, access to cash flows and economic interest of the Joint Venture equally.

(C) The Joint Venture comprises the Sugar and Ethanol Co which holds the sugar, ethanol, energy cogeneration and certain other assets of the Joint Venture, the Downstream Co which holds the downstream and certain other assets of the Joint Venture, and the

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Management Co which forms the Joint Venture's single face to the market and will facilitate the building of a unified corporate culture.

(D) The voting capital of each of the Sugar and Ethanol Co and the Downstream Co is divided into common shares (comprising 98 per cent. of voting capital) and preferred 'A' shares (comprising 2 per cent. of voting capital); each of Cosan and Shell owns, directly or indirectly, 50 per cent. of the common shares in each of the Sugar and Ethanol Co and the Downstream Co; Cosan directly owns 100 per cent. of the preferred 'A' shares in the Sugar and Ethanol Co and Shell directly owns 100 per cent. of the preferred 'A' shares in the Downstream Co, such that Cosan directly owns 51 per cent. of the total voting capital of the Sugar and Ethanol Co and Shell directly owns 51 per cent. of the total voting capital of the Downstream Co; Cosan and Shell each own directly 50 per cent. of the shares of the Management Co; provided that, notwithstanding the foregoing, each member of the Supervisory Board (as defined below) of each of the Sugar and Ethanol Co, the Downstream Co and the Management Co holds one common share in such entity, in each case assigned to such member by whichever of  Cosan or Shell nominated the member to such position.

(E) Certain preferred 'B' and 'C' shares are allocated among Cosan and Shell and bear certain economic (but not voting) rights to compensate Cosan and/or Shell for contributing certain goodwill and NOLs (as defined in the Framework Agreement) to, as they render a tax benefit to, the Joint Venture.

(F) The Shareholders' Agreements (as defined below) in respect of each of the Sugar and Ethanol Co, the Downstream Co and the Management Co together govern the scope of the business of the Joint Venture, certain matters relating to governance (which as a general principle shall be shared between Cosan and Shell equally), acquisitions, dividends and distributions, as well as the general principles that shall govern Cosan's and Shell's relationship as shareholders of the Sugar and Ethanol Co.

(G) An Operating and Coordination Agreement (as defined below) sets out certain terms pertaining to the coordination of the Sugar and Ethanol Co, the Downstream Co and the Management Co, and specifies certain, principles, policies, targets and processes of the Joint Venture.

(H) ROSM has entered into the ROSM Agreement (as defined below) with Shell and Shell UK Co setting out certain rights and obligations in relation to his indirect interest in the Joint Venture and his activities in respect of the Business (as defined in the Framework Agreement).

(I) The Management Compensation Plan (as defined in the Framework Agreement) will reward certain members of the management of the Joint Venture for success in their respective roles.

(J) The Parties are entering into this Agreement to document their agreement relating to the rights and obligations in respect of their interests in the Joint Venture and to provide for certain options whereby Cosan or Shell may acquire the other's interest in the Joint Venture, certain lock-up provisions and remedies for fundamental breaches of the documentation governing the establishment and operation of the Joint Venture.

THE PARTIES HEREBY AGREE AS FOLLOWS:

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SECTION ONE: INTERPRETATION AND DEFINITIONS

1. INTERPRETATION AND DEFINITIONS

1.1 Capitalized terms used in this Agreement shall have the meanings ascribed to them as follows:

"Accrued Interest" means any interest accrued by a Payor pursuant to Clause ‎19.2.3 and any default interest accrued by a Payor pursuant to Clause ‎19.3.2‎(a);

"ADTV" means average daily trading volume;

"Affiliate" means, in relation to any Person, a Subsidiary of that Person or a Holding Company of that Person or any other Subsidiary of a Holding Company; provided that, no JV Entity shall be an Affiliate of any Shareholder;

"Anti-Corruption Law" means the US Foreign Corrupt Practices Act of 1977, the United Kingdom Prevention of Corruption Acts 1889 to 1916 and the Bribery Act 2010, Decree (Decreto) 4,410 of October 7, 2002 (Interamerican Convention Against Corruption) of Brazil, Decree (Decreto) 5,687 of January 31, 2006 (United Nations Convention Against Corruption) of Brazil, or any applicable law of similar effect;

"Arbitrator" means an arbitral panel as validly appointed in accordance with Clause ‎37;

"Base Value" means a value agreed in writing between Cosan and Shell, or failing such agreement within 14 days of the applicable Base Value Date (or within any period of time by which Cosan and Shell agree in writing to extend such initial 14 day period) the amount of:

(a) if x – y ≤ 0.1x, the arithmetic mean of the Midpoints of the Cosan JV Valuation Range and the Shell JV Valuation Range; or

(b) if x – y > 0.1x, the arithmetic mean of the Midpoints of:

(i) the Independent JV Valuation Range; and

(ii) that JV Valuation Range determined by the Cosan Valuer or the Shell Valuer whose Midpoint is closest (rounding upwards) to the Midpoint of the Independent JV Valuation Range; or

(c) if there is no Cosan Valuer and no Shell Valuer, the Midpoint of the Sole Valuer JV Valuation Range;

where:

"x" = the greater of the Midpoints of the Cosan JV Valuation Range and the Shell JV Valuation Range; and

"y" = the smaller of the Midpoints of the Cosan JV Valuation Range and the Shell JV Valuation Range;

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and, for the avoidance of doubt, if any JV Entity declares, pays or makes any dividend or other distribution between the applicable Base Value Date and the applicable Option Completion Date, the Base Value shall be adjusted downwards to take account of the reduced value of the JV Entity due to such declaration, payment or the making of such payment;

"Base Value Date" means, in relation to:

(a) the First Shell Call Options, the date which is 9 years and 6 months after the Closing Date;

(b) the Second Shell Call Option, the Cosan Total Call Option, the Cosan Partial Call Option and the Cosan Put Option, the date which is 14 years and 6 months after the Closing Date;

(c) the Unsolicited Call Option, the date of receipt by the relevant Party of the Third Party Offer Notice,

(d) the Cosan Fundamental Breach Option and the Shell Fundamental Breach Option, the date on which the relevant Party receives the applicable Breach Notice;

(e) the Disqualification Put Option:

(i) the date determined in accordance with Clause ‎10.5; or

(ii) if Shell is entitled to nominate another Person to purchase the Cosan Interest in accordance with Clause ‎10.9.2, the most recent date specified to determine the Base Value for such purpose, so long as such date is no more than 365 days before receipt by Cosan of a notice from Shell stating that Shell wishes to exercise such right, as further contemplated by Clause ‎10.9.2;

(f) the Disqualification Call Option, the date determined in accordance with Clause ‎11.5; and

(f) the Termination Call Option, the date determined in accordance with Clause ‎4.1;

"Beneficial Owner" of a security means any Person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares:

(a) voting power in, which includes the power to vote or to direct the voting of, such security; and/or

(b) investment power which includes the power to Transfer, or to direct the Transfer of, such security,

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and each of the terms "Beneficially Own" and "Beneficially Owned" has a corollary meaning;

"Breach Notice" has the meaning ascribed to it in Clause ‎14.1;

"Breach Notice Recipient" has the meaning ascribed to it in Clause ‎14.1;

"Breach Notice Sender" has the meaning ascribed to it in Clause ‎14.1;

"BRL" means real or, if there is more than one, reais, the lawful currency of Brazil;

"Business Day" means a day, other than a Saturday or Sunday or public holiday in São Paulo, Brazil and/or London, England;

"Byelaws" means, in relation to an entity, corporate byelaws or constitutional documents (including any Contrato social or Estatuto social);

"CEO" means, in relation to an entity, the chief executive officer (presidente executivo) of such entity;

"Chairperson" means the chairperson (presidente) of the relevant JV Entity;

"Closing" means the completion of the establishment of the Joint Venture in accordance with the terms of the Framework Agreement;

"Closing Date" means the date of this Agreement;

"Confidential Information" means any information concerning any Party, whether or not in the possession of another Party before the date of this Agreement, and which relates to trade secrets, proprietary information, the marketing of goods or services (including names, lists and other details of customers, sales targets, sales statistics, market share statistics, prices, market research reports and surveys, advertising or promotional materials and strategies), future projects, business development or planning, commercial relationships, negotiations and business strategy; provided that "Confidential Information" does not include information that:

(a) is or becomes generally available to the public other than as a result of a disclosure by a Party, any of its Affiliates or its or their Representatives in violation of this Agreement or any other Transaction Document;

(b) was available to such Party on a non-confidential basis prior to its disclosure to such Party or its Representatives; or

(c) becomes available to such Party on a non-confidential basis from a source other than a JV Entity after the disclosure of such information to such Party or any party's Representative by the JV Entity, which source is (at the time of receipt of the relevant information) not, to such Party's knowledge, bound by a confidentiality agreement with (or other confidentiality obligation to) such JV Entity or another Person;

provided, further that, notwithstanding anything to the contrary contained herein, Confidential Information in the possession of Cosan, Shell or any of their respective

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Subsidiaries prior to the date of this Agreement shall, notwithstanding the foregoing exceptions in paragraphs (a) or (c), remain Confidential Information hereunder and Cosan and Shell shall be obligated to keep or to cause to be kept such information confidential as fully as if they did not have access to such information prior to the date of this Agreement but only received it after the date of this Agreement;

"Confidentiality Agreement" means the confidentiality agreement dated 15 March 2008 made in contemplation of negotiations between Equilon Enterprises LLC and Cosan as amended on 26 February 2010;

"Control" means:

(a) the power of a Person (or Persons acting in concert) to secure that the affairs of another are conducted directly or indirectly in accordance with the wishes of that Person (or Persons acting in concert) whether by means of being the Beneficial Owner(s) of more than 50 per cent. of the issued share capital of or entitled to exercise more than 50 per cent. of the voting rights in that company, or having the right to appoint or remove a majority of the directors or otherwise control a majority of the votes at board meetings of that company by virtue of any rights attaching to securities held or powers conferred by the Byelaws, any shareholders' agreement or any other document regulating the affairs of that company and "Controlled by" shall be construed accordingly; provided that, notwithstanding the foregoing, (i) each JV Entity shall be under the Control of both Cosan and Shell, if such Party undertakes a Transfer in accordance with this Agreement, but still retains an interest, directly or indirectly, in a JV Entity and (ii) in no event shall any JV Entity be deemed an Affiliate or Subsidiary of any Shareholder or any of its respective Subsidiaries or Affiliates; and

(b) in respect of Cosan, Cosan Limited holding, both legally and beneficially, the majority of the voting rights and the majority of the entire issued share capital of Cosan;

"Controlling Interest" means, in relation to an entity, a direct or indirect interest in relation to such entity which confers Control;

"Cosan" has the meaning ascribed to it in the Parties section of this Agreement;

"Cosan Base Value" means the sum of the Cosan Downstream Co Value and the Cosan Sugar and Ethanol Co Value;

"Cosan Downstream Co Value" means the value of Cosan's legal and beneficial interest in the Downstream Co, as calculated from the Downstream Co Value;

"Cosan Downstream Valuation Range" means the Downstream Valuation Range determined by the Cosan Valuer in accordance with Clause ‎17;

"Cosan Fundamental Breach Option"means the right granted to Cosan in Clause ‎15.2;

"Cosan Fundamental Breach Option Exercise Period" means, where the Fundamental Breach has been committed by Shell (either as agreed between the

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Parties or as determined in accordance with Clause ‎14), the period commencing on the date of the Breach Notice to the date which is 90 days after such date;

"Cosan Interest" means Cosan's entire legal and beneficial, direct or indirect interest in each of the JV Entities in which Shell (or a Shell Affiliate) holds an interest at that time;

"Cosan JV Valuation Range" means the JV Valuation Range determined by the Cosan Valuer;

"Cosan Limited" has the meaning ascribed to it in the Parties section of this Agreement;

"Cosan Limited Collapse" has the meaning ascribed to it in Clause ‎12.5.3(a);

"Cosan Limited Interest" means any Controlling Interest of Cosan Limited in Cosan;

"Cosan Option Exercise Period" means, in respect of each of the Cosan Put Option, the Cosan Partial Call Option and the Cosan Total Call Option, the period from the lapse of the Second Shell Call Option Exercise Period to the date which is 60 days thereafter, or as extended in accordance with Clause ‎2;

"Cosan Options" means the Cosan Total Call Option, the Cosan Put Option and the Cosan Partial Call Option;

"Cosan Partial Call Option" means those rights granted to Cosan under Clause ‎8.2;

"Cosan Partial Disqualification Interest" has the meaning ascribed to it in Clause ‎10.2.2;

"Cosan Put Option" means those rights granted to Cosan under Clause ‎7.2;

"Cosan Person" has the meaning ascribed to it in Clause ‎12.5.3;

"Cosan Shareholder Representative" has the meaning ascribed to it in Section 4.01 (Shareholder Representatives) of the Shareholders' Agreement;

"Cosan Sugar and Ethanol Co Value" means the value of Cosan's legal and beneficial interest in the Sugar and Ethanol Co, as calculated from the Sugar and Ethanol Co Value;

"Cosan Sugar and Ethanol Valuation Range" means the Sugar and Ethanol Valuation Range determined by the Cosan Valuer in accordance with Clause ‎18;

"Cosan Total Call Option" means those rights granted to Cosan under Clause ‎6.2;

"Cosan Valuer" has the meaning determined in accordance with Clause ‎18.3;

"Cosan Warranty" means a statement contained in Schedule 2 and "Cosan Warranties" means all such statements;

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"Credit Rating Agency" means a credit rating agency as may be agreed between Cosan and Shell, or, failing such agreement within a reasonable period of time, as selected and specified by the Independent Selector whose selection shall be final and binding on Cosan and Shell (and whose fees, costs and expenses shall be borne by Cosan and Shell in equal proportions);

"Death Certificate" means a death certificate or medical certificate of the cause of death (including a Certidão de óbito), evidencing the death of a Person or the fact that a Person has been officially deemed deceased in absentia, issued by a governmental or other recognized regulatory body in any jurisdiction which has is authorized under the laws of such jurisdiction to issue such certificates;

"Deceased" means, in relation to a Person, that such Person is deceased (or officially deemed deceased in absentia) as certified pursuant to a Death Certificate;

"Default Interest Rate" means:

(a) in respect of BRL amounts, a per annum rate of interest equal to 2 per cent. above SELIC; and

(b) in respect of US$ amounts, a per annum rate of interest equal to 3 per cent. above LIBOR,

provided that if such rate is determined unenforceable, the Default Interest Rate shall be the next highest rate as would be enforceable under English Law, and the Parties acknowledge and agree that SELIC, as the interest rate standard in Brazil, is a reasonable benchmark for interest in relation to matters connected with a business, such as the Joint Venture, whose primary operations are in Brazil.

"Dispute" has the meaning ascribed to it in Clause ‎37.1;

"Dispute Notice" has the meaning ascribed to it in Clause ‎14.2.

"Disqualification Call Option" means the right granted to Shell by Clause ‎11.2;

"Disqualification Call Option Exercise Period" means the period from the lapse of the Disqualification Put Option Exercise Period to the date which is 30 days thereafter;

"Disqualification Notice Date" means the date that Shell is notified that ROSM has been determined either:

(a) to be Disqualified in accordance with Clause ‎9; or

(b) to be Deceased;

"Disqualification Put Option" means the right granted to Cosan by Clause ‎10.1;

"Disqualification Put Option Exercise Period" means the period from the Disqualification Notice Date to the date that is the later of:

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(a) 30 days after the Disqualification Notice Date or 90 days after notice is served by Shell pursuant to Clause ‎10.1 (as applicable);

(b) 90 days after the date that notice is delivered pursuant to Clause ‎9.2.1; provided that if ROSM is determined to be Deceased, such exercise period shall expire on the date which is 90 days after the date ROSM is determined to be deceased; and

(c) 10 Business Days after the applicable Option Price is finally determined;

"Disqualified" has the meaning ascribed to it in Clause ‎9.1;

"Downstream Co" has the meaning ascribed to it in the Parties section of this Agreement;

"Downstream Co Value" means a value agreed in writing between Cosan and Shell, or failing such arrangement within 14 days of the applicable Base Value Date (or within any period of time by which Cosan and Shell agree in writing to extend such initial 14 day period) the amount of:

(a) if x – y ≤ 0.1x, the arithmetic mean of the Midpoints of the Cosan Downstream Valuation Range and the Shell Downstream Valuation Range; or

(b) if x – y > 0.1x, the arithmetic mean of the Midpoints of:

(i) the Independent Downstream Valuation Range; and

(ii) whichever of the Cosan Downstream Valuation Range and the Shell Downstream Valuation Range has a closer Midpoint to the Midpoint of the Independent Downstream Valuation Range; or

(c) if there is no Cosan Valuer and no Shell Valuer, the Midpoint of the Sole Valuer Downstream Valuation Range; and

where:

"x" = the greater of the Midpoints of the Cosan Downstream Valuation Range and the Shell Downstream Valuation Range; and

"y" = the smaller of the Midpoints of the Cosan Downstream Valuation Range and the Shell Downstream Valuation Range;

and, for the avoidance of doubt, if the Downstream Co declares, pays or makes any dividend or other distribution between the date of the applicable Base Value Date and the applicable Option Completion Date, the Downstream Co Value shall be adjusted accordingly to take account of the declaration, payment or making of such payment;

"Downstream Retention Notice" means the notice substantially in the form set out in Schedule 6 as may be delivered from Shell to Cosan pursuant to Clause ‎6.5 specifying that Shell wishes to retain its interest in the Downstream Co;

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"Downstream Valuation Range" means an equity valuation range in respect of the Downstream Co determined in accordance with Clause ‎18;

"Encumbrance" means a mortgage, charge, pledge, lien, option, restriction, right of first refusal, right of pre-emption, third party right or interest, other encumbrance or security interest of any kind, or another type of preferential arrangement having similar effect (including, without limitation, a title transfer or retention arrangement, or any arrangement whereby title could be transferred to a third party);

"Ethanol" means ethanol and ethanol-based products, in each case, produced from sugarcane;

"Ethanol Supply Agreement" means the ethanol supply agreement dated the Closing Date between the Sugar and Ethanol Co and the Downstream Co, as amended, supplemented, restated or replaced which, for the avoidance of doubt, shall remain in force at all times in accordance with its terms, subject to the requirements of this Agreement;

"Executive Board" has, in respect of each JV Entity, the meaning ascribed to it in the Shareholders' Agreement in respect of such JV Entity (or, in the case of the Management Co, in the Operating and Coordination Agreement in respect of such JV Entity);

"Exercise Date" has the meaning ascribed to it in Clause ‎13.4.1(b)(ii);

"Exercise Notice" means, in respect of any Option, an exercise notice substantially in the form set out in Schedule 4;

"Expert" has the meaning ascribed to it in Clause ‎9.4.2;

"First Shell Call Options" means the Shell Total Call Option and the Shell Partial Call Option;

"First Shell Call Option Exercise Period" means the period commencing on the tenth anniversary of the Closing Date to the later of:

(a) the date which is 30 days after the tenth anniversary of the Closing Date; and

(b) 10 Business Days after the applicable Option Price is finally determined,

or as extended in accordance with Clause ‎2;

"Framework Agreement" means the framework agreement relating to the Joint Venture dated 25 August 2010 between Cosan, Cosan Distribuidora de Combustíveis Ltda., Cosan Limited, Management Co, Downstream Co, Shell, Shell UK Co and Sugar and Ethanol Co;

"Fundamental Breach" means where:

(a) a Party (other than a JV Entity) breaches any provision of this Agreement, the Operating and Coordination Agreement or any Shareholders' Agreement,

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whether such event or events amounts(s) to a repudiatory breach or breaches of the relevant agreement or not; and/or

(b) a Party (other than a JV Entity) is convicted (after any final appeal has been dismissed) of any violation of any Anti-Corruption Law;

(c) ROSM breaches any provision of the ROSM Agreement, whether such event or events amounts(s) to a repudiatory breach or breaches of such agreement or not; and/or

(d) Cosan has not established collective negotiations with its workers in accordance with the terms of the TAJ; and or

(e) Cosan has not informed all its suppliers of products and services of each of the terms of the TAJ,

and which, in any such case (i) has a Material Adverse Effect on the Joint Venture or any other Party (other than the Party, or any Affiliate of the Party, which committed the Fundamental Breach); and (ii) is not remedied, if capable of remedy, within 90 days of the Fundamental Breach Date; and/or

(f) a Party (other than a JV Entity) and/or ROSM becomes Insolvent; and/or

(g) Cosan does not pay all fines, including the initial fine, payable by it pursuant to the TAJ, provided that such obligations relate solely to Cosan , subject to a cure period (to the extent curable) within 15 days of receiving a notice asserting the same;

"Fundamental Breach Date" means the date on which the Parties receive a Breach Notice pursuant to Clause ‎14.1;

"Governmental Authority" means any international, supranational or national government, any state, provincial, local or other political subdivision thereof, any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions (including functions relating to the audit, imposition, assessment, management and collection of Taxes) of or pertaining to government, including any government authority, agency, department, board, commission or instrumentality of any nation or jurisdiction or any political subdivision thereof or any court;

"Holding Company" means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary;

"ICC" means the International Chamber of Commerce;

"IGP-M" means the Índice Geral de Preços de Mercado published by Fundação Getulio Vargas, a measure of inflation in Brazil;

"Independent Downstream Valuation Range" means the Downstream Valuation Range determined by the Independent Valuer in accordance with Clause ‎18;

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"Independent JV Valuation Range" means the JV Valuation Range determined by the Independent Valuer in accordance with Clause ‎18;

"Independent Selector" means the President for the time being of the Institute of Independent Auditors of Brazil (Instituto dos Auditores Independentes do Brasil) or, if such Person is unable or unwilling to act for any purpose required under this Agreement, such person as may be appointed by the ICC International Centre for Expertise in accordance with the provision for the appointment of experts under the Rules for Expertise of the ICC;

"Independent Sugar and Ethanol Valuation Range" means the Sugar and Ethanol Valuation Range determined by the Independent Valuer in accordance with Clause ‎18;

"Independent Valuer" means a Qualifying Accounting Firm (other than the auditors of any Party) determined in accordance with Clause  ‎18;

"Inflation Multiplier" means 1 + (a - b), where:

                                                               b

"a" = the IGP-M rate on the day the relevant tender offer completes; and

"b" = the IGP-M rate on the day of Closing

"Insolvent" means unable to pay its debts as they fall due, or is otherwise insolvent, and "Insolvency" shall have a corollary meaning;

"Investment Grade" means:

(a) a Rating of BBB- or higher by S&P and/or Baa3 or higher by Moody's; or

(b) if both S&P and Moody's cease to function or no longer provide a ratings service generally or decline to provide a Rating for a Person, a comparable investment grade Rating from an internationally recognised Credit Rating Agency of equivalent standing (other than S&P or Moody's),

provided that, if the Person to be rated does not have any rated senior unsecured debt that is outstanding at that time, then such Person's senior unsecured debt shall be deemed to be rated at those ratings as such Credit Rating Agency may assign the senior unsecured debt of that Person on a "shadow rating" or "indicative rating" basis within 6 months of such date;

"Joint Venture" means the Sugar and Ethanol Co, the Downstream Co and the Management Co, considered together;

"JV Entity" means any of, and/or any Subsidiary of, the Sugar and Ethanol Co, the Downstream Co and the Management Co;

"JV Valuation Range" means the sum of the Sugar and Ethanol Valuation Range and the Downstream Valuation Range as determined in accordance with Clause ‎18;

"LIBOR" means a rate equal to:

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(a) the applicable Screen Rate; or

(b) (if no Screen Rate is available) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to any Party at its request quoted by the Reference Banks to leading banks in the London interbank market,

as of the time on the Quotation Day for the offering of deposits in US$ and for a period of six-months (or the closest period if such period is not available);

"Liquid Securities" means securities:

(a) which are listed on a Recognised Stock Exchange;

(b) which have an ADTV for the preceding 90 days equal to or greater than US$50,000,000 (or  its equivalent in any currency); and

(c) which form no more than 20 per cent. of the total amount of the listed securities of such entity;

"Lock-Up Period" has the meaning ascribed to it in Clause ‎12.1;

"Losses" has the meaning ascribed to it in the Framework Agreement;

"Management Co" has the meaning ascribed to it in the Parties section of this Agreement;

"Material Adverse Effect" means, in relation to a Person, a material adverse effect on the business, operations, property, condition (financial or otherwise), prospects, reputation or results of operations of such Person;

"Memorandum of Understanding" means the memorandum of understanding between Cosan, Cosan Limited and Shell UK Co dated 31 January 2010;

"Midpoint" means, in relation to a range, the median of the lower and upper limits of such range;

"Minority Call Option Exercise Period" means the period commencing on the date which a shareholder becomes a Minority Shareholder to the later of:

(a) the date which is 30 Business Days thereafter; and

(b) 10 Business Days after the applicable Option Price is finally determined,

provided that such Option may only be exercised during the First Shell Call Option Exercise Period or after the fifteenth anniversary of the Closing Date (as applicable);

"Minority Shareholder" has the meaning ascribed to it in Clause ‎4.1;

"Moody's" means Moody's Investors Service, Inc;

"Non-Approval" has the meaning ascribed to it in Clause ‎10.9;

"Non-Approval Date" has the meaning ascribed to it in Clause ‎10.9;

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"Notice" means any Exercise Notice, Breach Notice or Default Notice served in accordance with any provision of this Agreement;

"Notifiable Persons" means Cosan, Cosan Limited, ROSM, Shell, and Shell UK Co; and "Notifiable Person" shall mean each of them;

"Operating and Coordination Agreement" means the operating and coordination agreement relating to the Joint Venture dated the date of this Agreement between Cosan, the Downstream Co, the Management Co, Shell and the Sugar and Ethanol Co;

"Option" means any of the Shell Partial Call Option, Shell Total Call Option, the Second Shell Call Option, the Cosan Put Option, the Cosan Total Call Option, the Cosan Partial Call Option, the Disqualification Put Option, the Disqualification Call Option, the Unsolicited Sale ROFR, the Unsolicited Call Option, the Cosan Fundamental Breach Option, the Shell Fundamental Breach Option and the Termination Call Option;

"Option Completion" means, in respect of any Option, the completion of such Option determined in accordance with the relevant Clause governing that Option under this Agreement;

"Option Completion Date" means, in respect of any Option Completion, the date of such Option Completion;

"Option Price" means, in respect of any Option, the price for that Option determined in accordance with the relevant Clause of this Agreement governing that Option;

"Other Party" means, in relation to Clause ‎4, (if the Minority Shareholder is Cosan), Shell, or (if the Minority Shareholder is Shell), Cosan;

"Party" has the meaning ascribed to it in the Parties section of this Agreement;

"Payee" means, in respect of the payment of an Option Price, the party to which payment is due;

"Payor" means, in respect of the payment of an Option Price, the party from which payment is due;

"Permitted Encumbrance"means any Encumbrance whose existence was consented to, in writing in advance, by the Cosan Shareholder Representative and the Shell Shareholder Representative;

"Preferred A Shares" means, in relation to either the Sugar and Ethanol Co or the Downstream Co, that class of shares which carries voting rights and fixed dividend rights;

"Principles and Standards" has the meaning ascribed to it in the Shareholders' Agreement;

"Qualified Lock-Up Period" has the meaning ascribed to it in Clause ‎12.2;

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"Qualifying Accounting Firm" means any of, or any Affiliate of or firm formally associated with, PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young, KPMG, Grant Thornton International or BDO International, or such accounting firm as may be agreed between Cosan and Shell;

"Qualifying Investment Bank" means an investment bank:

(a) acceptable to both Cosan and Shell; or

(b) in the event that Cosan and Shell cannot agree, an investment bank which is ranked in the top ten by value of mergers and acquisitions transactions in Brazil, or ranked in the top ten by value of mergers and acquisitions transactions in Latin America, each as published by Thomson Financial, announced between 1 January and 31 December for the year immediately preceding the date of calculation of the Base Value or the Downstream Co Value or the Sugar and Ethanol Co Value; or, in the event that such league table ceases to be published, an investment bank ranked in the top ten by value of the equivalent league table as published by Bloomberg (or if that ceases to be published, by Dealogic); or, in the event that all such league tables cease to be (or has not yet been) published, an investment bank ranked in the top ten by value of such other league table as Cosan and Shell may agree; or, failing such agreement within 10 Business Days of the need to select a Qualifying Investment Bank, such investment bank as the Independent Selector shall select (such decision being final and binding on the Parties);

"Qualifying Offeror" means a Person which:

(a) has, at the time of making a Third Party Offer, a Rating of Investment Grade and where the relevant Credit Rating Agency has indicated that such Rating will not be downgraded to lower than one level below Investment Grade as a result of the completion of such Third Party Offer;

(b) is not directly or indirectly Controlled by and not otherwise an Affiliate of (and is not itself) a Sanctioned Person;

(c) has not, and no director of which has, been convicted of any violation of any Anti-Corruption Law;

(d) agrees that the JV Entities will abide by the Principles and Standards; and

(e) enters into agreements with whichever of Cosan and/or Shell retains any such interest substantially in the form of this Agreement, the Shareholders' Agreement and the Operating and Coordination Agreement subject to any changes necessary to comply with the amended governance structure pursuant to the relevant Shareholders' Agreement;

"Qualifying Physician" means a medical doctor with at least 15 years' relevant experience, who:

(a) is registered to practise by the appropriate medical regulatory body:

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(i) in respect of those hospitals set out in Clauses (i) - (iii) below, in Brazil; or

(ii) in respect of those hospital set out in Clauses (iv) - (vi) below, in the USA; and

(b) is a chief or senior staff member at:

(i) Hospital Albert Einstein, São Paulo, Brazil;

(ii) Hospital Sírio Libanês, São Paulo, Brazil;

(iii) Hospital Oswaldo Cruz, São Paulo, Brazil;

(iv) Johns Hopkins Hospital, Baltimore, Maryland, USA;

(v) Methodist Hospital, Houston, Texas, USA;

(vi) New York Presbyterian University Hospital of Columbia and Cornell, New York, New York, USA; and

(c) is fluent in Portuguese;

"Qualifying Physician Notice" means a notice served pursuant to Clauses ‎9.2.2 and/or ‎9.2.3;

"Quotation Day" means, in relation to any period for which an interest rate is to be determined, the Business Day which is 2 Business Days before the first day of that period, unless market practice differs in the London interbank market, in which case the Quotation Day for that currency will be determined in accordance with market practice in the London interbank market (and if quotations would normally be given by leading banks in the London interbank market on more than one day, the Quotation Day will be the last of those days preceding the relevant period);

"Rating" means, in respect of a Person, a credit rating for its long-term senior unsecured debt;

"Recognised Stock Exchange" means any of the main markets of the London Stock Exchange, the New York Stock Exchange, BM&F Bovespa or the Hong Kong Stock Exchange, or any other stock market as may be mutually agreed between the Parties;

"Reference Banks" means the principal London offices of Barclays Bank PLC, HSBC Bank plc and the Royal Bank of Scotland plc or such other banks as may be agreed between Cosan and Shell;

"Register" means the Book of Registration of Transfer of Shares (Livro de Registro de Transferência de Ações);

"Reorganization" means:

(a) with respect to the Joint Venture, a variation to the Joint Venture's group structure and/or a variation in any JV Entity's issued share capital whether by

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way of capitalisation issue, rights issue, placing and/or open offer, sub-division, reduction, purchase, merger or otherwise or any alteration of the rights attached to any part of any JV Entity's issued share capital; and

(b) with respect to Cosan, Cosan Limited, Shell or Royal Dutch Shell, a variation of such Person's group structure and/or a variation in such Person's issued share capital whether by way of capitalisation issue, rights issue, placing and/or open offer, sub-division, reduction, purchase, merger or otherwise or any alteration of the rights attached to any part of such entity's issued share capital;

"Representatives" means any of a Person's Affiliates and the directors, officers, employees, agents, counsel, investment advisers, financing sources (subject to customary confidentiality obligations) of such Person and/or any of its Affiliates;

"ROSM" means Rubens Ometto Silveira Mello, a Brazilian citizen whose principal business address is located at Av. Presidente Juscelino Kubitschek, 1327, 4 º andar – CEP 04543-011 – São Paulo – SP Brazil;

"ROSM Agreement" means the agreement entered into between ROSM, Shell and Shell UK Co on 25 August 2010;

"ROSM Interest" means any direct or indirect Controlling Interest of ROSM in the Joint Venture;

"ROSM ROFR" has the meaning ascribed to it in the ROSM Agreement;

"Royal Dutch Shell" means Royal Dutch Shell plc, a company incorporated under the laws of England with registered number 04366849 and whose registered office is at Shell Centre, London, SE1 7NA;

"Rules" means the Arbitration Rules of the ICC;

"S&P" means Standard & Poor's Rating Services, a division of The McGraw Hill Companies, Inc.;

"Sanctioned Person" means:

(a) any country subject to the economic sanctions laws of the United States, the United Kingdom or the European Union (including at the date of this Agreement, Cuba, Iran, Myanmar, North Korea, Sudan and Syria); and/or

(b) any Person or entity on any list of restricted entities, Persons or organizations published by the United States government, the United Nations, the European Union or any member state thereof or Brazil, including but not limited to the following or any replacement of the following: (1) the Specially Designated Nationals and Blocked Persons List issued by the US Department of the Treasury's Office of Foreign Assets Control (OFAC), or the United States government's Denied Persons List, Entities List, Debarred Parties List, Excluded Parties List and Terrorism Exclusion List, (2) Her Majesty's Treasury's Consolidated List of Financial Sanctions Targets in the UK, (3) the European Union Restricted Person Lists issued pursuant to Council Regulation

- 17 -

(EC) No. 881/2002 of 27 May 2002, Council regulation (EC) No. 2580/2001 of 27 December 2001 and Council Common Position 2005/725/CFSP of 17 October 2005, and (4) the United Nations Consolidated List established and maintained by the 1267 Committee; and/or

(c) any Person or entity, other than one falling under the remit of paragraphs (a) and/or (b) above, that because of its domicile, ownership or activities is a Person with whom nationals of the United States, United Kingdom, European Union or Brazil are prohibited from doing business;

"Screen Rate" means in relation to London Interbank Offered Rate:

(a) the British Bankers' Association "Interest Settlement Rate" displayed on the appropriate page of the Reuters screen; or

(b) (if the page referred to in sub-paragraph (a) above is replaced or service ceases to be available) such other page or service displaying the appropriate rate as may be specified by a Qualifying Investment Bank whose identity is agreed between Cosan and Shell (or failing such agreement, a Qualifying Investment Bank selected by the Independent Selector) after consultation with the Person liable for relevant interest and the Person due to receive relevant interest who, together, shall pay in equal proportions the fees, costs and expenses of any Qualifying Investment Bank and/or the Independent Selector;

"Second Shell Call Option" means those rights granted to Shell under Clause ‎5.2;

"Second Shell Call Option Exercise Period" means the period commencing on the fifteenth anniversary of the Closing Date to the later of:

(a) the date which is 30 days after the fifteenth anniversary of the Closing Date; and

(b) 10 Business Days after the applicable Option Price is finally determined,

or as extended in accordance with Clause ‎2;

"SELIC" means the rate assessed by the Brazilian Special Liquidation and Custody System (Sistema Especial de Liquidação e Custódia) – Selic, published by the Central Bank of Brazil, obtained by calculating the adjusted weight average rate of one-day financing operations, backed by public federal bonds and traded in such system;

"Shares" means the shares of each common and preferred class of each JV Entity;

"Shareholders' Agreement" means each of the shareholders' agreements relating to:

(a) the Downstream Co, as entered into between, among others, Cosan, Shell and the Downstream Co; and

(b) the Sugar and Ethanol Co, as entered into between, among others, Cosan, Shell and the Sugar and Ethanol Co,

and "Shareholders' Agreements" shall mean both of them;

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"Shell" has the meaning ascribed to it in the Parties section of this Agreement;

"Shell Base Value" means the sum of the Shell Downstream Co Value and the Shell Sugar and Ethanol Co Value;

"Shell Brand Licensing Agreement" means the licence agreement for the branding of retail automotive fuel sites and commercial, marine and aviation fuels dated on or about the date hereof between Shell Brands International AG and Shell;

"Shell Downstream Co Value" means the value of Shell's legal and beneficial interest in the Downstream Co, as calculated from the Downstream Co Value;

"Shell Downstream Valuation Range" means the Downstream Valuation Range determined by the Shell Valuer in accordance with Clause ‎18;

"Shell Fundamental Breach Option"means the right granted to Shell pursuant to Clause ‎16.1;

"Shell Fundamental Breach Option Exercise Period" means, where the Fundamental Breach has been committed by Cosan (either as agreed between the Parties or as determined in accordance with Clause ‎14), the period commencing on date of service of the Breach Notice to the date which is 90 days after the Breach Notice;

"Shell Interest" means:

(a) if Shell does not deliver to Cosan a Downstream Retention Notice pursuant to this Agreement, the Shell Total Interest; and

(b) if Shell delivers to Cosan a Downstream Retention Notice pursuant to this Agreement, the Shell Partial Interest;

"Shell JV Valuation Range" means the JV Valuation Range determined by the Shell Valuer in accordance with Clause ‎18;

"Shell Partial Call Interest" means the number of whole Shares that is (or is closest to but not less than) half of the Shares held by Cosan in each JV Entity;

"Shell Partial Call Option" has the meaning ascribed to it in Clause ‎3.2.2;

"Shell Partial Interest" means Shell's:

(a) entire direct or indirect holding of shares in the Sugar and Ethanol Co; and

(b) such number of shares being (or being closest to but not less than) half of its holding of Preferred A Shares in the Downstream Co;

"Shell Securities" means publicly traded ordinary shares in:

(a) Royal Dutch Shell; or

(b)  any successor of Royal Dutch Shell;

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"Shell Shareholder Representative" has the meaning ascribed to it in the Shareholders' Agreement;

"Shell Sugar and Ethanol Co Value" means the value of Shell's legal and beneficial interest in the Sugar and Ethanol Co, as calculated from the Sugar and Ethanol Co Value;

"Shell Sugar and Ethanol Valuation Range" means the Sugar and Ethanol Valuation Range determined by the Shell Valuer in accordance with Clause ‎18;

"Shell Total Call Option" has the meaning ascribed to it in Clause ‎3.1.1;

"Shell Total Interest" means Shell's entire direct or indirect holding of shares in:

(a) the Sugar and Ethanol Co;

(b) the Management Co; and

(c) the Downstream Co;

"Shell UK Co" has the meaning ascribed to it in the Parties section of this Agreement;

"Shell Valuer" has the meaning determined in accordance with Clause ‎18.3;

"Shell Warranty" means a statement contained in Schedule 1 and "Shell Warranties" means all those statements;

"Sole Valuer" has the meaning determined in accordance with Clause ‎18.4;

"Sole Valuer Downstream Valuation Range" means the Downstream Valuation Range determined by the Sole Valuer in accordance with Clause ‎18;

"Sole Valuer JV Valuation Range" means the JV Valuation Range determined by the Sole Valuer in accordance with Clause ‎17;

"Sole Valuer Sugar and Ethanol Valuation Range" means the Sugar and Ethanol Valuation Range determined by the Sole Valuer in accordance with Clause ‎18;

"Subsidiary" means in relation to any Person, a Person:

(a) which is Controlled, directly or indirectly, by the first mentioned Person;

(b) where more than half the issued share capital of which is Beneficially Owned, directly or indirectly by the first mentioned Person; or

(c) which is a Subsidiary of another Subsidiary of the first mentioned Person;

"Sugar and Ethanol Co" has the meaning ascribed to it in the Parties section of this Agreement;

"Sugar and Ethanol Co Value" means a value agreed in writing between Cosan and Shell, or failing such arrangement within 14 days of the applicable Exercise Notice

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(or within any period of time by which Cosan and Shell agree in writing to extend such initial 14 day period) an amount of:

(a) if x – y ≤ 0.1x, the arithmetic mean of the Midpoints of the Cosan Sugar and Ethanol Valuation Range and the Shell Sugar and Ethanol Valuation Range; or

(b) if x – y > 0.1x, the arithmetic mean of the Midpoints of:

(i) the Independent Sugar and Ethanol Valuation Range; and

(ii) whichever of the Cosan Sugar and Ethanol Valuation Range and the Shell Sugar and Ethanol Valuation Range has a closer Midpoint to the Midpoint of the Independent Sugar and Ethanol Valuation Range; or

(c) if there is no Cosan Valuer and no Shell Valuer, the Midpoint of the Sole Valuer Sugar and Ethanol Valuation Range;

where:

"x" = the greater of the Midpoints of the Cosan Sugar and Ethanol Valuation Range and the Shell Sugar and Ethanol Valuation Range; and

"y" = the smaller of the Midpoints of the Cosan Sugar and Ethanol Valuation Range and the Shell Sugar and Ethanol Valuation Range;

and, for the avoidance of doubt, if the Sugar and Ethanol Co declares, pays or makes any dividend or other distribution between the date of the relevant Exercise Notice and the applicable Option Completion Date, the Sugar and Ethanol Co Value shall be adjusted accordingly to take account of the declaration, payment or making of such payment;

"Sugar and Ethanol Valuation Range" means an equity valuation range in respect of the Sugar and Ethanol Co determined in accordance with Clause ‎18;

"Sugar and Ethanol Voting Shares" means such number of shares being (or being closest to but not less than) half of Cosan's holding of Preferred A Shares in the Sugar and Ethanol Co;

"Supervisory Board" in respect of each JV Entity has the meaning ascribed to it in their respective Shareholders' Agreement;

"TAJ" has the meaning ascribed to it in the Framework Agreement;

"Tax" means any taxation, levies, duties, charges, contributions, withholdings or imposts of whatever nature (including any related fines, penalties, surcharges or interest) imposed, collected or assessed by, or payable to, a tax authority in any jurisdiction;

"Tender Offer" means any tender offer, or any other offer that may be required pursuant to applicable law, in respect of the shares in Cosan Limited or Cosan which may arise in connection with Closing or completion of the Shell First Call Option, the Shell Second Call Option, the Disqualification Call Option, the Disqualification Put

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Option, the Unsolicited Call Option or the Cosan Fundamental Breach Option or a Third Party Offer;

"Termination Call Option" has the meaning ascribed to it in Clause ‎4.1;

"Third Party Offer" means any bona fide offer from a Third Party Offeror (either in cash, or in a combination of cash and Liquid Securities), so long as no more than 50 per cent. of the aggregate value (based on the closing price of such securities on the date of the Third Party Offer Notice on the principal Recognised Stock Exchange on which those securities are traded) of all such consideration is in the form of Liquid Securities), made during the Qualified Lock-Up Period, for the entire interest of Cosan, Cosan Limited or ROSM (each as applicable) which Cosan, Cosan Limited or ROSM (respectively) wishes to accept;

"Third Party Offer Notice" means the notice in the form set out in Schedule 5 setting out the details of a proposed sale to a Third Party Offeror specifying:

(a) the shares proposed to be transferred pursuant to the relevant Third Party Offer;

(b) the identity of the Person(s) to whom it is proposed that the shares referred to in paragraph (a) above are transferred and the date of such Person(s)'s offer for such shares; and

(c) the price per share and all other terms on which the shares referred to in paragraph (a) above are proposed to be transferred;

"Third Party Offeror" means any Qualifying Offeror which wishes to buy from any of the Parties an interest, whether direct or indirect, in the Joint Venture, whether or not an Unsolicited Third Party Offeror;

"Third Party Warranty" means a statement contained in Schedule 3 and "Third Party Warranties" means all such statements;

"Transaction Documents" has the meaning ascribed to it in the Framework Agreement;

"Transfer" means, with respect to any securities:

(a) when used as a verb, to sell, assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise transfer any such securities or any participation or interest therein, whether directly or indirectly (including pursuant to a derivative transaction), or agree or commit to do any of the foregoing; and

(b) when used as a noun, a direct or indirect sale, assignment, disposition, exchange, pledge, encumbrance, hypothecation, or other transfer of any such securities or any participation or interest therein or any agreement or commitment to do any of the foregoing;

"Unsolicited Call Option" means the right granted to Shell pursuant to Clause ‎13.2.2;

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"Unsolicited Sale Exercise Period" means the period commencing on the date Shell receives the Unsolicited Third Party Offer Notice to the date which is 90 days after the date Shell receives the Unsolicited Third Party Offer Notice;

"Unsolicited Sale ROFR" means the right granted to Shell pursuant to Clause ‎13.2.2(a);

"Unsolicited Third Party Offer" has the meaning ascribed to it in Clause ‎13.1.1;

"Unsolicited Third Party Offer Notice" means a Third Party Offer Notice as may be delivered pursuant to Clause ‎13;

"Unsolicited Third Party Offeror" means any Person that is not an Affiliate of any Party that makes an unsolicited bona fide offer to buy all of the Cosan Limited Interest or the ROSM Interest;

"Valuation Range" means any of the Cosan Downstream Valuation Range; Cosan JV Valuation Range; Cosan Sugar and Ethanol Valuation Range; Downstream Valuation Range; Independent Downstream Valuation Range; Independent JV Valuation Range; Independent Sugar and Ethanol Valuation Range; JV Valuation Range; Shell Downstream Valuation Range; Shell JV Valuation Range; Shell Sugar and Ethanol Valuation Range; Sole Valuer Downstream Valuation Range; Sole Valuer JV Valuation Range; Sole Valuer Sugar and Ethanol Valuation Range and/or Sugar and Ethanol Valuation Range; and

"Valuers" means the Cosan Valuer, the Shell Valuer, the Sole Valuer and/or the Independent Valuer (as the case may be).

1.2 In this Agreement, a reference to:

1.2.1 a statutory provision includes a reference to: (a) the statutory provision as modified or re-enacted or both from time to time (whether before or after the date of this Agreement); and (b) any subordinate legislation made under the statutory provision (whether before or after the date of this Agreement);

1.2.2 a "company", "corporation" or "entity" includes any business entity (of whatever form) in any jurisdiction (including Brazilian sociedades empresariais and sociedades simples);

1.2.3 a "regulation" includes any regulation, rule, official directive, request, guideline, portaria, regulamento, decreto, resolução, deliberação, circular, carta-circular, instrução, instrução normativa, regimento, ato declaratório and/or despacho normativo (whether or not having the force of law) of any Governmental Authority;

1.2.4 "Person" includes a reference to any body corporate, unincorporated association, partnership or other business entity;

1.2.5 "Persons acting in concert" means, in relation to a Person, Persons which actively co-operate, pursuant to an agreement or understanding (whether formal or informal) with a view to obtaining or consolidating Control of that Person;

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1.2.6 a "Party" or a "Person", includes a reference to that Party's, or that Person's, legal personal representatives, successors or Affiliate(s);

1.2.7 unless otherwise specified, a time of day is a reference to São Paulo, Brazil time; and

1.2.8 a "Clause", "Paragraph" or "Schedule", unless the context otherwise requires, is a reference to a clause or paragraph of, or a schedule to this Agreement;

1.3 Italicized terms in parenthesis denote the Portuguese language words for names, concepts and other terms applicable in Brazil.

1.4 The Schedules form part of this Agreement and shall have the same force and effect as if set out in the body of this Agreement and references to this Agreement include the Schedules.

1.5 Words importing the singular shall include the plural and vice versa.

1.6 Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation", whether or not they are in fact followed by those words or words of like import.

1.7 References from or to any date mean, unless otherwise specified, from and including and to but excluding, respectively.

1.8 References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; provided that with respect to any agreement or contract listed in any schedules hereto, all such amendments, modifications or supplements must also be listed in the appropriate schedule.

1.9 The headings in this Agreement shall not affect the interpretation of this Agreement.

SECTION TWO: EXERCISE PERIODS

2. EXTENSION OF EXERCISE PERIODS

2.1 If a Breach Notice has been served and/or an Arbitrator is considering a claim in respect of a Fundamental Breach during any period in which an Option is exercisable, and such Option has not been exercised, such Option Exercise Period shall be extended to expire 30 days after the date of receipt of the Arbitrator's determination in respect of the alleged Fundamental Breach.

2.2 In the event that any of (i) the First Shell Call Option Exercise Period, (ii) the Second Shell Call Option Exercise Period or (iii) the Second Shell Call Option Exercise Period and the Cosan Option Exercise Period combined, is extended for a period in excess of six months in accordance with Clause ‎2.1, and the Arbitrator determines that no Fundamental Breach has occurred, the Party that was alleged to have committed the Fundamental Breach but which the Arbitrator determines was not in Fundamental Breach, (i) may elect to have the Base Value recalculated as of such later date, and (ii) notwithstanding anything else in this Agreement to the contrary shall be entitled to select which of the two Base Values calculated is used to

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determine the applicable Option Price.

SECTION THREE: YEAR TEN OPTIONS

3. FIRST SHELL CALL OPTIONS

3.1 This Clause ‎3 applies if:

3.1.1 no Cosan Fundamental Breach Option or Shell Fundamental Breach Option has been exercised; and

3.1.2 Shell holds, directly or indirectly, shares in any JV Entity.

3.2 Cosan undertakes to grant to Shell (as Cosan may at the time elect) an option to buy, and to require Cosan to sell, either:

3.2.1 the Cosan Interest and each of the rights attaching thereto (the "Shell Total Call Option"); or

3.2.2 the Shell Partial Call Interest and each of the rights attaching thereto (the "Shell Partial Call Option"),

such Options to be exercisable during the First Shell Call Option Exercise Period in accordance with this Clause ‎3.

3.3 In the event that Shell wishes to exercise a First Shell Call Option in accordance with this Clause ‎3, Cosan shall sell, and Shell shall buy, the Cosan Interest or the Shell Partial Call Interest (as applicable pursuant to Cosan's election in accordance with Clause ‎3.5) and each right attaching to such interest on the applicable Option Completion Date.

3.4 The Shell Total Call Option may be exercised only in respect of all (but not less than all) of the Cosan Interest and the Shell Partial Call Option may be exercised only in respect of all (but not less than all) of the Shell Partial Call Interest, each by the delivery by Shell to Cosan of an Exercise Notice relating to the First Shell Call Options at any time during the First Shell Call Option Exercise Period.

3.5 Cosan shall, within 10 Business Days of the date on which an Exercise Notice is received from Shell that is delivered pursuant to Clause ‎3.4, inform Shell in writing whether it is selling to Shell the Cosan Interest or the Shell Partial Call Interest.

3.6 The price to be paid in respect of the Shell Total Call Option shall be an amount equal to the Cosan Base Value, and the price to be paid in respect of the Shell Partial Option shall be an amount equal to 50 per cent. of the Cosan Base Value.

3.7 The Cosan Base Value shall be calculated as at the date which is 9 years and six months after the Closing Date.

3.8 If Shell exercises the Shell Total Call Option or the Shell Partial Call Option, it shall pay Cosan the Option Price:

3.8.1 in full on the applicable Option Completion Date; or

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3.8.2 if Shell so elects and specifies in the Exercise Notice, 50 per cent. on the Option Completion Date, and the remaining 50 per cent in equal quarterly instalments, commencing on the Option Completion Date, for a period of 33 months from such applicable Option Completion Date.

3.9 After Shell delivers an Exercise Notice in respect of a First Shell Call Option, Shell may only revoke such Exercise Notice with Cosan's prior written consent, failing which it shall be irrevocable.

3.10 Completion of the Shell Total Call Option or Shell Partial Call Option (as applicable) shall occur:

3.10.1 on the later of:

(a) the date which is 20 Business Days after receipt by Cosan of the Exercise Notice relating to the such Option; and

(b) where the Option Completion is subject to the approval of any applicable Governmental Authority, 5 Business Days after all necessary approvals have been received, and the requirement to obtain such approval shall be subject to the Parties' obligation to use their respective reasonable endeavours to consummate the transaction as promptly as reasonably practicable; and

3.10.2 in accordance with Clauses ‎19 and ‎20.

4. TERMINATION CALL OPTION

4.1 If a Party holds less than 10 per cent. of the then outstanding common shares of the Sugar and Ethanol Co and the Downstream Co considered as a whole (a "Minority Shareholder") for any reason at any time:

4.1.1 during the First Shell Call Exercise Period; and

4.1.2 during the Second Shell Call Option Exercise Period or Cosan Option Exercise Period; and

4.1.3 after the expiry of the Cosan Option Exercise Period,

then the Minority Shareholder shall grant the Other Party an Option to buy, and to require the Minority Shareholder to sell, the entire direct and indirect interest of that Minority Shareholder (the "Termination Call Option").

4.2 The Other Party may exercise the Termination Call Option by delivering an Exercise Notice to the Minority Shareholder during the relevant Minority Call Option Exercise Period.

4.3 The Termination Call Option may be exercised only in respect of all (but not less than all) of the Minority Shareholder's interest.

4.4 The price to be paid in respect of the Termination Call Option shall be an amount equal to the value of the Minority Shareholder's legal and beneficial interest in the

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Sugar and Ethanol Co, as calculated from the Sugar and Ethanol Co Value plus the value of the Minority Shareholder's legal and beneficial interest in the Downstream Co, as calculated from the Downstream Co Value.

4.5 The Downstream Co Value and the Sugar and Ethanol Co Value shall be calculated as at the date which is:

4.5.1 nine years and six months after the Closing Date (where an Exercise Notice is served pursuant to Clause ‎4.1.1); or

4.5.2 fourteen years and six months after the Closing Date (where an Exercise Notice is served pursuant to Clause ‎4.1.2); or

4.5.3 the date on which the Party becomes a Minority Shareholder (where an Exercise Notice is served pursuant to Clause ‎4.1.3).

4.6 After the Other Party delivers an Exercise Notice in respect of a Termination Call Option, the Other Party may only revoke such Exercise Notice with the Minority Shareholder's prior written consent, failing which it shall be irrevocable.

4.7 Completion of the Termination Call Option shall occur:

4.7.1 on the later of:

(a) the date which is 20 Business Days after receipt by the Minority Shareholder of the Exercise Notice relating to the such Option; and

(b) where the Option Completion is subject to the approval of any applicable Governmental Authority, 5 Business Days after all necessary approvals have been received, and the requirement to obtain such approval shall be subject to the Parties' obligation to use their respective reasonable endeavours to consummate the transaction as promptly as reasonably practicable; and

4.7.2 in accordance with Clauses ‎19 and ‎20.

SECTION FOUR: YEAR FIFTEEN OPTIONS

5. SECOND SHELL CALL OPTION

5.1 This Clause ‎5 applies if:

5.1.1 no Cosan Fundamental Breach Option or Shell Fundamental Breach Option has been exercised; and

5.1.2 Shell holds, directly or indirectly, shares in any JV Entity.

5.2 Cosan irrevocably grants to Shell an option to buy, and to require Cosan to sell, the Cosan Interest, such Option to be exercisable during the Second Shell Call Option Exercise Period in accordance with this Clause ‎5.

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5.3 In the event that Shell exercises the Second Shell Call Option in accordance with this Clause ‎5, Cosan shall sell, and Shell shall buy, the Cosan Interest and each right attaching to the Cosan Interest on the applicable Option Completion Date.

5.4 The Shell Call Option may be exercised only:

5.4.1 in respect of all (but not less than all) of the Cosan Interest; and

5.4.2 by the delivery by Shell to Cosan of an Exercise Notice relating to the Second Shell Call Option at any time during the Second Shell Call Option Exercise Period.

5.5 The price to be paid in respect of the Second Shell Call Option shall be an amount equal to the Cosan Base Value.

5.6 The Cosan Base Value shall be calculated as at the date which is 14 years and six months after the Closing Date; and

5.7 If Shell exercises the Second Shell Call Option, it shall pay Cosan the Option Price:

5.7.1 in full on the applicable Option Completion Date; or

5.7.2 if Shell so elects and specifies in the Exercise Notice, 50 per cent. on the Option Completion Date, and the remaining 50 per cent in equal quarterly instalments, commencing on the Option Completion Date, for a period of 33 months from such applicable Option Completion Date.

5.8 After Shell delivers an Exercise Notice in respect of a Second Call Option, Shall may only revoke such Exercise Notice with Cosan's prior written consent, failing which it shall be irrevocable.

5.9 Completion of the Second Shell Call Option shall occur:

5.9.1 on the later of:

(a) the date which is 20 Business Days after receipt by Cosan of the Exercise Notice relating to the Second Shell Call Option; and

(b) where the Option Completion is subject to the approval of any applicable Governmental Authority, 5 Business Days after all necessary approvals have been received, and the requirement to obtain such approval shall be subject to the Parties' obligation to use their respective reasonable endeavours to consummate the transaction as promptly as reasonably practicable; and

5.9.2 in accordance with Clauses ‎19 and ‎20.

6. COSAN TOTAL CALL OPTION

6.1 This Clause ‎6 applies if:

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6.1.1 no Cosan Fundamental Breach Option or Shell Fundamental Breach Option has been exercised;

6.1.2 Shell has not exercised the Shell Total Call Option, the Shell Partial Call Option or the Second Shell Call Option; and

6.1.3 Cosan holds, directly or indirectly, shares in any JV Entity.

6.2 Subject to Clause ‎6.5, Shell irrevocably grants to Cosan an option to buy, and to require Shell to sell the Shell Interest, such Option to be exercisable during the Cosan Option Exercise Period in accordance with this Clause ‎6.

6.3 In the event that Cosan exercises the Cosan Total Call Option in accordance with this Clause ‎6, Shell shall sell, and Cosan shall buy, the Shell Interest and each right attaching to such interest on the applicable Option Completion Date.

6.4 The Cosan Total Call Option may be exercised only:

6.4.1 in respect of all (but not less than all), subject to Clause ‎6.5, of the Shell Interest; and

6.4.2 by the delivery by Cosan to Shell of an Exercise Notice relating to the Cosan Total Call Option at any time during the Cosan Option Exercise Period.

6.5 At any time on or after the date on which Shell receives the Exercise Notice in respect of the Cosan Total Call Option for the Shell Interest, but before the date which is 30 days from such date, Shell shall be entitled to serve a Downstream Retention Notice.

6.6 If Shell does not deliver a Downstream Retention Notice pursuant to Clause ‎6.5 the price to be paid in respect of the Cosan Total Call Option will be an amount equal to 85 per cent. of the Shell Base Value.

6.7 If Shell does deliver a Downstream Retention Notice pursuant to Clause ‎6.5, the Cosan Total Call Option will relate solely to the Shell Partial Interest, and the provisions of this Clause ‎6.7 shall apply.

6.7.1 If the Ethanol Supply Agreement remains in force at the date of the delivery of the Downstream Retention Notice, Cosan and Shell shall:

(a) use their best endeavours to negotiate and agree to a contract for the supply of Ethanol to the Downstream Co at prices and on terms on an arms- length basis and based on then-current market practices;

(b) if Cosan and Shell fail to reach such agreement, Cosan and Shell shall procure that the existing Ethanol Supply Agreement remains in force and shall enter into such agreements as may be necessary to attain such result; and

(c) give the necessary approvals in respect of the Ethanol Supply Agreement,

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provided that, in either event, such contract shall provide for the supply of Ethanol to the Downstream Co for a period of not less than 10 years from the applicable Option Completion Date relating to the Cosan Total Call Option, which period may be extended for an additional period of 5 years upon written notice from Shell to Cosan not later than the date which is 1 year prior to the expiry of the initial 10 year period.

6.7.2 The price to be paid in respect of the Cosan Total Call Option will be an amount equal to 85 per cent. of the Shell Sugar and Ethanol Co Value.

6.8 If Cosan exercises the Cosan Total Call Option, it shall pay Shell the applicable Option Price:

6.8.1 in full on the applicable Option Completion Date; or

6.8.2 if Cosan so elects and specifies in the Exercise Notice, 50 per cent. on the Option Completion Date, and the remaining 50 per cent in equal quarterly instalments, commencing on the Option Completion Date, for a period of 33 months from such applicable Option Completion Date.

6.9 After Cosan delivers an Exercise Notice in respect of the Cosan Total Call Option, Cosan may only revoke such Exercise Notice with Shell's prior written approval, failing which it shall be irrevocable.

6.10 Completion of the Cosan Total Call Option shall occur:

6.10.1 on the later of:

(a) the date which is 20 Business Days after receipt by Shell of the Exercise Notice relating to the Cosan Total Call Option; and

(b) where the Option Completion is subject to the approval of any applicable Governmental Authority, 5 Business Days after all necessary approvals have been received, and the requirement to obtain such approval shall be subject to the Parties' obligation to use their respective reasonable endeavours to consummate the transaction as promptly as reasonably practicable; and

6.10.2 in accordance with Clauses ‎19 and ‎20.

7. COSAN PUT OPTION

7.1 This Clause ‎7 applies if:

7.1.1 no Cosan Fundamental Breach Option or Shell Fundamental Breach Option has been exercised;

7.1.2 Shell has exercised the Shell Partial Call Option but not the Second Shell Call Option; and

7.1.3 Cosan holds, directly or indirectly, shares in any JV Entity.

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7.2 Shell irrevocably grants to Cosan an option to sell to Shell, and to require Shell to buy the Cosan Interest, such Option to be exercisable during the Cosan Option Exercise Period in accordance with this Clause ‎7.

7.3 In the event that Cosan exercises the Cosan Put Option in accordance with this Clause ‎7, Cosan shall sell, and Shell shall buy, the Cosan Interest and each right attaching to such interest on the applicable Option Completion Date.

7.4 The Cosan Put Option may be exercised only:

7.4.1 in respect of all (but not less than all) the Cosan Interest; and

7.4.2 by the delivery by Cosan to Shell of an Exercise Notice relating to the Cosan Put Option at any time during the Cosan Option Exercise Period.

7.5 The price to be paid in respect of the Cosan Put Option will be an amount equal to the Cosan Base Value.

7.6 If Cosan exercises the Cosan Put Option, Shell shall pay Cosan the applicable Option Price:

7.6.1 in full on the applicable Option Completion Date; or

7.6.2 if Shell so elects and specifies in the Exercise Notice, 50 per cent. on the Option Completion Date, and the remaining 50 per cent in equal quarterly instalments, commencing on the Option Completion Date, for a period of 33 months from such applicable Option Completion Date.

7.7 After Cosan delivers an Exercise Notice in respect of the Cosan Put Option, Cosan may only revoke such Exercise Notice with Shell's prior written approval, failing which it shall be irrevocable.

7.8 Completion of the Cosan Put Option shall occur:

7.8.1 on the later of:

(a) the date which is 20 Business Days after receipt by Shell of the Exercise Notice relating to the Cosan Total Put Option; and

(b) where the Option Completion is subject to the approval of any applicable Governmental Authority, 5 Business Days after all necessary approvals have been received, and the requirement to obtain such approval shall be subject to the Parties' obligation to use their respective reasonable endeavours to consummate the transaction as promptly as reasonably practicable; and

7.8.2 in accordance with Clauses ‎19 and ‎20.

8. COSAN PARTIAL CALL OPTION

8.1 This Clause 8 applies if:

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8.1.1 no Cosan Fundamental Breach Option or Shell Fundamental Breach Option has been exercised;

8.1.2 Shell has exercised the Shell Partial Call Option but not the Second Shell Call Option (such Options having been applicable); and

8.1.3 Cosan holds, directly or indirectly, shares in any JV Entity and has not exercised the Cosan Put Option in accordance with Clause ‎7.

8.2 Shell irrevocably grants to Cosan an option to buy, and to require Shell to sell the Shell Partial Call Interest, such Option to be exercisable during the Cosan Option Exercise Period in accordance with this Clause ‎8.

8.3 In the event that the Cosan Partial Call Option applies in accordance with this Clause ‎8, Shell shall sell, and Cosan shall buy, the an amount of Shares equal to the Shell Partial Call Interest acquired by Shell pursuant to the Shell Partial Call Option and each right attaching to such interest on the applicable Option Completion Date.

8.4 The Cosan Partial Call Option may be exercised only:

8.4.1 in respect of all (but not less than all) of the Shell Partial Call Interest; and

8.4.2 by the delivery by Cosan to Shell of an Exercise Notice relating to the Cosan Partial Call Option at any time during the Cosan Option Exercise Period.

8.5 The price to be paid in respect of the Cosan Partial Call Option will be an amount equal to 85 per cent. of the Base Value multiplied by the quotient of the Shell Partial Call Interest and the total beneficial interest of the Parties in the Joint Venture.

8.6 If Cosan exercises the Cosan Partial Call Option, it shall pay Shell the applicable Option Price:

8.6.1 in full on the applicable Option Completion Date; or

8.6.2 if Cosan so elects and specifies in the Exercise Notice, 50 per cent. on the Option Completion Date, and the remaining 50 per cent in equal quarterly instalments, commencing on the Option Completion Date, for a period of 33 months from such applicable Option Completion Date.

8.7 After Cosan delivers an Exercise Notice in respect of the Cosan Partial Call Option, Cosan may only revoke such Exercise Notice with Shell's prior written approval, failing which it shall be irrevocable.

8.8 Completion of the Cosan Partial Call Option shall occur:

8.8.1 on the later of:

(a) the date which is 20 Business Days after receipt by Shell of the Exercise Notice relating to the Cosan Total Call Option; and

(b) where the Option Completion is subject to the approval of any applicable Governmental Authority, 5 Business Days after all

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necessary approvals have been received, and the requirement to obtain such approval shall be subject to the Parties' obligation to use their respective reasonable endeavours to consummate the transaction as promptly as reasonably practicable; and

8.8.2 in accordance with Clauses ‎19 and ‎20.

SECTION FIVE: DISQUALIFICATION OPTIONS

9. DISQUALIFICATION

9.1 For the purposes of this Clause ‎9, an individual is "Disqualified" if:

9.1.1 he lacks the mental capacity to perform the essential duties of his positions with respect to the Joint Venture;

9.1.2 such condition does not resolve itself within 30 consecutive days, as reasonably determined by the applicable Qualifying Physician or Expert in the medical speciality concerned with the condition causing the alleged incapacity (if known); and

9.1.3 the Qualifying Physician determines, in his expert opinion, that such condition is not likely to be temporary in nature (including, but not limited to, any such interim condition ordinarily occurring in the course of convalescence).

9.2 If any JV Entity or Shell (the "First Party") reasonably suspects that ROSM is Disqualified, the First Party shall:

9.2.1 notify each Notifiable Person in writing of such belief;

9.2.2 select a Qualifying Physician and deliver a Qualifying Physician Notice to the Notifiable Persons; and

9.2.3 instruct, on the date the Qualifying Physician Notice is delivered pursuant to Clause ‎9.2.2, the Qualifying Physician it has selected to:

(a) carry out a medical examination of ROSM, in the place where ROSM is then located (or, if the Qualifying Physician determines that the examination requires medical equipment or facilities located in a hospital or facility, then in a hospital or facility in, or nearest to, the city where he is then located), for the purposes of determining whether or not ROSM is Disqualified; and

(b) notify in writing, within 15 Business Days of examining ROSM, each of the Notifiable Persons of whether or not he or she considers ROSM to be Disqualified,

provided that, in any event, if the Qualifying Physician has been unable to carry out such medical examination of ROSM within 40 days of being instructed because ROSM has been unwilling to submit himself thereto ROSM shall, after the expiry of such period, be automatically determined to be Disqualified.

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9.3 If any Notifiable Person (other than a JV Entity) disputes the Qualifying Physician's determination that ROSM is Disqualified, such Notifiable Person shall:

9.3.1 send written notice, within 10 days from the date of receipt by such Notifiable Person of the notice from the Qualifying Physician delivered in accordance with Clause ‎9.2.3(b) to each of the other Notifiable Person that it disputes the determination;

9.3.2 select a second Qualifying Physician and send a Qualifying Physician Notice to each of the Notifiable Persons, each within 10 days from the date of sending written notice pursuant to Clause ‎9.3.1; and

9.3.3 instruct, on the date of the Qualifying Physician Notice delivered pursuant to Clause ‎9.3.2, the Qualifying Physician it has selected to:

(a) carry out a medical examination of ROSM, in the place where ROSM is then located (or, if the Qualifying Physician determines that the examination requires medical equipment or facilities located in a hospital or facility, then in a hospital or facility in the city where he is then located or nearest to), for the purposes of determining whether or not ROSM is Disqualified; and

(b) notify in writing, within 10 Business Days of examining ROSM, each of the Notifiable Persons, whether he or she considers ROSM to be Disqualified,

provided that, in any event, if the Qualifying Physician has been unable to carry out such medical examination of ROSM within 20 days of being instructed, whether because ROSM has been unwilling to submit himself thereto or otherwise, ROSM shall, after the expiry of such period, be automatically determined to be Disqualified.

9.4 If the second Qualifying Physician determines:

9.4.1 ROSM to be Disqualified, then the determination of ROSM as Disqualified shall, except in the case of manifest error, be final and the Parties shall not further dispute such determination;

9.4.2 ROSM not to be Disqualified, then the Parties shall refer the matter for final determination to an independent Qualifying Physician (the "Expert") in accordance with Clause ‎9.5.

9.5 If the Parties are required to refer a matter to an Expert pursuant to Clause ‎9.4.2:

9.5.1 Cosan and Shell shall:

(a) agree the identity of the Expert or, failing agreement within 5 days of the date that the last of Cosan and Shell receives the notice delivered by the second Qualifying Physician in accordance with Clause ‎9.3.3(b), the Expert shall be an independent Qualifying Physician nominated by the mutual agreement of the first and second Qualifying Physicians or, where such Qualifying Physicians are unable

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to reach agreement within 10 days, the Expert shall be appointed by the ICC International Centre for Expertise in accordance with the provision for the appointment of experts under the Rules for Expertise of the ICC;

(b) send written notice in writing to each Notifiable Person of the identity of the Expert selected in accordance with Clause ‎9.5.1(a);

(c) instruct, on the date of the notice referred to in Clause ‎9.5.1(b), the Expert to:

(i) act as an expert and not as an arbitrator;

(ii) carry out a medical examination of ROSM, in the place where he is then located (or, if the Qualifying Physician determines that the examination requires medical equipment or facilities located in a hospital or facility, then in a hospital or facility in or nearest to the city where he is then located), for the purposes of determining whether or not ROSM is Disqualified; and

(iii) notify in writing, within 10 Business Days of examining ROSM (if applicable) or being instructed, each of Cosan, the Joint Venture, Shell and ROSM, of whether he or she considers ROSM to be Disqualified;

provided that, in any event, if the Expert has been unable to carry out such medical examination of ROSM within 10 Business Days of being instructed, because ROSM has been unwilling to submit himself thereto, ROSM shall, after the expiry of such period, be automatically determined to be Disqualified.

9.5.2 Cosan and Shell:

(a) shall use their respective reasonable endeavours to provide the Expert with such information as may be desirable or necessary, in the opinion of the Expert, including any reports provided by the first and second Qualifying Physician for the purposes of carrying out such medical examination; and

(b) may, within 5 Business Days of the Expert's appointment, make written submissions to the Expert and/or send documents to him or her;

9.5.3 the decision of the Expert as notified to each of the Notifiable Persons in accordance with Clause ‎9.5.1(c)(iii), shall be final and binding on the Parties and the Expert shall not be required to give reasons for his or her decision.

9.6 The fees, costs and expenses of:

9.6.1 the first Qualifying Physician shall be borne by the First Party;

9.6.2 the second Qualifying Physician shall be borne by the Party requesting such Qualifying Physician; and

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9.6.3 any Expert shall be borne by the First Party where ROSM is determined not to be Disqualified, and by the Second Party where he is determined to be Disqualified in accordance with Clause ‎9.5.

10. DISQUALIFICATION PUT OPTION

10.1 Subject to sub-Clause ‎10.9, this Clause ‎10 applies:

10.1.1 prior to the expiry of the Cosan Option Exercise Period, where Shell holds, directly or indirectly, shares in each JV Entity and ROSM (or where Deceased, his estate) holds, directly or indirectly, shares in each JV Entity; and

10.1.2 after the expiry of the Cosan Option Exercise Period, where Shell holds, directly or indirectly, shares in the Downstream Co and ROSM (or where Deceased, his estate) holds an interest in the Downstream Co,

and where ROSM has been determined Disqualified or Deceased in accordance with Clause ‎9 or where Shell has served notice to Cosan stating that ROSM is missing and has not attended board meetings of any JV Entity for the consecutive period of 12 months.

10.2 Shell irrevocably grants to Cosan an option to sell to Shell, and to require Shell to buy:

10.2.1 where such Option is exercised prior to the expiry of the Cosan Option Exercise Period, the Cosan Interest; and

10.2.2 where such Option is exercised after the expiry of the Cosan Option Exercise Period, Cosan's entire legal and beneficial, direct or indirect interest in the Downstream Co and the Management Co (the "Cosan Disqualification Partial Interest"),

such Option to be exercisable during the Disqualification Put Option Exercise Period in accordance with this Clause ‎10.

10.3 In the event that Cosan exercises the Disqualification Put Option in accordance with this Clause ‎10, Cosan shall sell, and Shell shall buy, the Cosan Interest or the Cosan Disqualification Partial Interest (as applicable) and each right attaching to the Cosan Interest or Cosan Disqualification Partial Interest (as applicable) on the applicable Option Completion Date.

10.4 The Disqualification Put Option may be exercised:

10.4.1 prior to the expiry of the Cosan Option Exercise Period, in respect of all (but not less than all) of the Cosan Interest;

10.4.2 after the expiry of the Cosan Option Exercise Period, in respect of all (but not less than all) of the Cosan Disqualification Partial Interest; and

10.4.3 by the delivery by Cosan to Shell of the Exercise Notice relating to the Disqualification Put Option at any time during the Disqualification Put Option Exercise Period.

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10.5 Subject to Clause ‎10.9, the price to be paid in respect of the Disqualification Put Option will be an amount equal to the Cosan Base Value or the Cosan Downstream Co Value (as applicable), such Base Value or Downstream Co Value to be calculated as at the date (i) of delivery of the first Qualifying Physician Notice, (ii) of death as written on the Death Certificate or (iii) when notice is served by Shell on Cosan after ROSM has been missing and has not attended board meetings of any JV Entity for a consecutive period of twelve months (as applicable).

10.6 If Cosan exercises the Disqualification Put Option:

10.6.1 on or before the second anniversary of the Closing Date, Shell shall pay Cosan the applicable Option Price:

(a) in full on the applicable Option Completion Date; or

(b) if Shell so elects and specifies in the Exercise Notice, 50 per cent. on the Option Completion Date, and the remaining 50 per cent in equal quarterly instalments, commencing on the Option Completion Date, for a period of 45 months from such applicable Option Completion Date; or

10.6.2 after the second anniversary of the Closing Date but before the fourth anniversary of the Closing Date, Shell shall pay Cosan the applicable Option Price:

(a) in full on the applicable Option Completion Date; or

(b) if Shell so elects and specifies in the Exercise Notice, 50 per cent. on the Option Completion Date, and the remaining 50 per cent in equal quarterly instalments, commencing on the Option Completion Date, for a period of 33 months from such applicable Option Completion Date; or

10.6.3 on or after the fourth anniversary of the Closing Date, Shell shall pay Cosan the applicable Option Price in full on the applicable Option Completion Date.

10.7 After Cosan delivers an Exercise Notice in respect of the Disqualification Put Option, Cosan may only revoke such Exercise Notice with Shell's prior written approval, failing which it shall be irrevocable.

10.8 Completion of the Disqualification Put Option shall occur:

10.8.1 on the later of:

(a) the date which is 20 Business Days after receipt by Shell of the Exercise Notice relating to the Disqualification Put Option; and

(b) if Shell so elects, where the Option Completion is subject to the approval of any applicable Governmental Authority, 5 Business Days after all necessary approvals have been received, and the requirement to obtain such approval shall be subject to the Parties' obligation to use

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their respective reasonable endeavours to consummate the transaction as promptly as reasonably practicable; and

10.8.2 in accordance with Clauses ‎19 and ‎20.

10.9 In the event that the Option Completion is subject to the approval of any applicable Governmental Authority and such Governmental Authority provides written or other formal notification, prior to the Option Completion, that the Transfer of the Cosan Interest to Shell in connection with the exercise of the Disqualification Put Option is rejected (a "Non-Approval"), then:

10.9.1 Shell may (at its sole election) waive the requirement for such approval and complete the acquisition of the Cosan Interest; provided that the Option Completion may proceed whether or not the relevant Governmental Authority provides any notification in relation to the exercise of the Disqualification Put Option.

10.9.2 In the event that Shell does not waive such approval, Shell shall have a period of 5 years from the date of the Non-Approval (the "Non-Approval Date") to nominate any other Person to purchase (or otherwise purchase itself) the Cosan Interest in accordance with the following:

(a) Shell may exercise this right by providing notice to Cosan of such exercise;

(b) any such purchase by such Person (or Shell) shall be at the Cosan Base Value (as determined as of the Base Value Date in accordance with Clause ‎18) and must be completed as promptly as reasonably practicable, and in any event within 12 months of the date of the notice referred to in (a) above; provided that this period may be extended by a written agreement between the Parties;

(c) subject to (b) above, if a sale of the Cosan Interest to the relevant Person (or Shell) has not been completed prior to the expiry of the 5 year period, Cosan may sell the Cosan Interest to a Qualifying Offeror at any price;

(d) Cosan shall, for the benefit of the purchaser of the Cosan Interest under this Clause 10.9.2, give certain representations and warranties reasonably acceptable to Cosan and the purchaser but, in any event, no more onerous than the Cosan Warranties [NB: defined to only include warranties relating to title and the shares being unencumbered]; and

(e) each of the Cosan Fundamental Breach Option and the Shell Fundamental Breach Option shall continue to apply, and shall take precedence throughout the 5 year period over any other rights that Cosan or Shell may then have; provided that if, during the  5 year period, Shell has the right to exercise a Shell Fundamental Breach Option, the price to be paid by the relevant Person for the Cosan Interest, as contemplated in this Clause ‎10.9.2, shall be the Option Price in respect of the Shell Fundamental Breach Option or the Cosan

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Base Value as determined in accordance with paragraph (b) above, selected at Shell's sole discretion.

11. DISQUALIFICATION CALL OPTION

11.1 This Clause ‎11 applies if Cosan does not exercise the Disqualification Put Option (such Disqualification Put Option having been applicable in accordance with Clause ‎10).

11.2 Cosan irrevocably grants to Shell an option to buy, and to require Cosan to sell:

11.2.1 where such Option is exercised prior to the expiry of the Cosan Option Exercise Period, the Cosan Interest; and

11.2.2 where such Option is exercised after the expiry of the Cosan Option Exercise Period, the Cosan Disqualification Partial Interest,

such Option to be exercisable during the Disqualification Call Option Exercise Period in accordance with this Clause ‎11.

11.3 In the event that Shell exercises the Disqualification Call Option in accordance with this Clause ‎11, Cosan shall sell and Shell shall buy the Cosan Interest or the Cosan Disqualification Partial Interest (as applicable) and each right attaching to the Cosan Interest or Cosan Disqualification Partial Interest (as applicable) on the applicable Option Completion Date.

11.4 The Disqualification Call Option may be exercised:

11.4.1 prior to the expiry of the Cosan Option Exercise Period, in respect of all (but not less than all) of the Cosan Interest; or

11.4.2 after the expiry of the Cosan Call Exercise Period, in respect of all (but not less than all) of the Cosan Disqualification Partial Interest, and

11.4.3 by the delivery by Shell to Cosan of an Exercise Notice relating to the Disqualification Call Option at any time during the Disqualification Call Option Exercise Period.

11.5 The price to be paid in respect of the Disqualification Call Option will be an amount equal to the Cosan Base Value or Cosan Downstream Co Value (as applicable), such Base Value or Downstream Co Value to be calculated as at (i) the date of the first Qualifying Physician Notice,  (ii) the date of death as written on the Death Certificate, or (iii) when notice is served by Shell on Cosan after ROSM has been missing and has not attended board meetings of any JV Entity for the consecutive period of twelve months.

11.6 If Shell exercises the Disqualification Call Option:

11.6.1 on or before the second anniversary of the Closing Date, Shell shall pay Cosan the applicable Option Price:

(a) in full on the applicable Option Completion Date; or

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(b) if Shell so elects and specifies in the Exercise Notice, 50 per cent. on the Option Completion Date, and the remaining 50 per cent in equal quarterly instalments, commencing on the Option Completion Date, for a period of 45 months from such applicable Option Completion Date; or

11.6.2 after the second anniversary of the Closing Date but before the fourth anniversary of the Closing Date, Shell shall pay Cosan the applicable Option Price:

(a) in full on the applicable Option Completion Date; or,

(b) if Shell so elects and specifies in the Exercise Notice, 50 per cent. on the Option Completion Date, and the remaining 50 per cent in equal quarterly instalments, commencing on the Option Completion Date, for a period of 33 months from such applicable Option Completion Date; or

11.6.3 on or after the fourth anniversary of the Closing Date, Shell shall pay Cosan the applicable Option Price in full on the applicable Option Completion Date.

11.7 After Shell delivers an Exercise Notice in respect of the Disqualification Call Option, Shell may only revoke such Exercise Notice with Cosan's written consent, failing which it shall be irrevocable.

11.8 Completion of the Disqualification Call Option shall occur:

11.8.1 on the later of:

(a) the date which is 20 Business Days after receipt by Cosan of the relevant Exercise Notice; and

(b) where the Option Completion is subject to the approval of any applicable Governmental Authority, 5 Business Days after all necessary approvals have been received, and the requirement to obtain such approval shall be subject to the Parties' obligation to use their respective reasonable endeavours to consummate the transaction as promptly as reasonably practicable; and

11.8.2 in accordance with Clauses ‎19 and ‎20.

SECTION SIX: LOCK-UP

12. LOCK-UP PERIODS AND QUALIFIED LOCK-UP PERIOD

12.1 Other than in accordance with any of Clauses ‎3, ‎5, ‎6, ‎10, ‎11, ‎12.4, ‎12.5, ‎13, ‎15 or ‎16, or any provision of any other Transaction Document, during (i) the period from the Closing Date to the sixth anniversary of the Closing Date, (ii) the period from the date which is nine years and six months from the Closing Date to the expiry of the First Shell Call Option Exercise Period and (iii) the period from the date which is fourteen years and six months from the Closing Date to the Expiry of the Cosan Option Exercise Period (together the "Lock-Up Period"):

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12.1.1 Cosan undertakes to Shell and agrees that it shall not Transfer any part of its  direct or indirect interest in any JV Entity;

12.1.2 Cosan Limited undertakes to Shell and agrees that it shall not Transfer any part of its interest in Cosan; and

12.1.3 Shell undertakes to Cosan and agrees that it shall not Transfer any part of its direct or indirect interest in any JV Entity.

12.2 During (i) the period from the sixth anniversary of the Closing Date to the date which is nine years and six months from the Closing Date and (ii) the period from the expiry of the First Shell Call Option Exercise Period to the date which is fourteen years and six months from the Closing Date (together the "Qualified Lock-Up Period"), neither Cosan nor Cosan Limited shall solicit for sale their direct or indirect interest in the Joint Venture to any third party; provided that Cosan Limited may:

12.2.1 engage in negotiations or discussions with any Unsolicited Third Party Offeror and any of its Representatives that have submitted a bona fide proposal to Cosan Limited for a transaction that is permitted under Clause ‎13 that Cosan Limited is prepared to accept or recommend; and

12.2.2 furnish to such Third Party Offeror, or its Representatives, Confidential Information relating to any JV Entity, so long as, prior to providing such Confidential Information to an Unsolicited Third Party Offeror and/or its Representatives, Cosan Limited shall:

(a) inform Shell of the identity of the Unsolicited Third Party Offeror;

(b) provide Shell with a copy of the proposed confidentiality agreement (which shall be on terms no less favourable than those contained in the Confidentiality Agreement) to be entered into between the Third Party Offeror, Cosan Limited, Cosan, Shell and the JV Entities;

(c) provide Shell with a comprehensive list of all information which Cosan Limited is proposing to provide to such Unsolicited Third Party Offeror,

and Shell may, within 10 Business Days of being provided with the above information, object in writing to the provision of any such Confidential Information on the grounds that such Confidential Information is, in its reasonable opinion, commercially sensitive.  Where Shell does not object in writing before the expiry of the  10 Business Day period, Cosan Limited shall be permitted to pass such Confidential Information to the Third Party Offeror, pursuant to the entry by such Third Party Offeror into a confidentiality agreement in the form provided to Shell in accordance with Clause ‎12.2.2(b).

12.3 Notwithstanding Clause ‎12.2, if Shell has objected to the provision of any Confidential Information to a Third Party Offeror on the grounds that such Confidential Information is, in its reasonable opinion, commercially sensitive, upon Cosan Limited and the Third Party Offeror entering into definitive binding documentation (subject only to satisfactory due diligence) and the Third Party Offeror

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paying a non-refundable deposit of one (1) per cent. of the proposed purchase price to Cosan Limited (who shall promptly Transfer such deposit to the relevant JV Entity where the Third Party Offeror does not complete the transfer of such shares within nine months of the date of payment of such deposit) Cosan Limited shall be entitled to provide such information to the Third Party Offeror:

12.3.1 pursuant to a customary "clean room" or "clean team" arrangement or process, such arrangement or process to be run to the reasonable satisfaction  of the CEO of the relevant JV Entity; and

12.3.2 on the basis that the most commercially sensitive Confidential Information (as previously directed by Shell or, where no such direction was given, in Cosan Limited's reasonable opinion) be provided to the Third Party Offeror at the end of the due diligence process.

12.4 Other than in accordance with any of Clauses ‎10, ‎11, ‎12.5, ‎13, ‎15 or ‎16, or any provision of any other Transaction Document during the Qualified Lock-Up Period:

12.4.1 Cosan Limited shall be permitted to Transfer a Controlling Interest in Cosan; provided that such transfer is conducted in accordance with the provisions of Clause ‎13; and

12.4.2 Cosan shall not be permitted to Transfer its direct or indirect interest in any JV Entity to a third party; and

12.4.3 Shell shall not be permitted to Transfer any of the Shell Interest to a third party.

12.5 Nothing in Clauses ‎12.1 or ‎12.4 will prevent:

12.5.1 Royal Dutch Shell or any of its Affiliates from entering into a transaction which does not relate exclusively or predominantly to the Joint Venture assets in Brazil, provided that such transaction shall not result in a Transfer by Royal Dutch Shell of Control of the JV Entities (other than in connection with a Transfer of the entire global downstream business of Royal Dutch Shell) and that any Person who is proposed to acquire a direct or indirect interest in the JV Entities by virtue of any such transaction (other than an acquirer of Royal Dutch Shell or the disposal of the entire downstream business of Royal Dutch Shell) shall, as a condition to its ability to do so, be in compliance at the time of consummation of that transaction with (and shall after the consummation thereof thereafter agree to be obligated by) Section 11.02 of each Shareholders' Agreement;

12.5.2 Shell from effecting intra-group transfers to entities Controlled by Royal Dutch Shell; provided that:

(a) no such Transfer (other than group Reorganizations with the consent of Cosan, such consent not to be unreasonably withheld) shall relieve Shell (or any such subsequent transferee Subsidiary) of any of its obligations hereunder or enlarge, alter or change any right or obligation of any other Party hereto; and

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(b) Shell shall notify Cosan of the identity of any such proposed transferee;

(c) subject to Clause ‎12.5.2(d), any obligations of Shell to the Cosan are also assumed by the transferee; and

(d) Shell shall procure that if any such transferee ceases to be Controlled by Royal Dutch Shell, any obligations of it or of such transferee to Cosan shall be transferred to Shell or another entity Controlled by Royal Dutch Shell;

12.5.3 Cosan and/or Cosan Limited (the "Cosan Person") from undertaking intra-group transfers to entities Controlled by that Cosan Person or ROSM; provided that:

(a) Cosan Limited shall not merge into Cosan (and vice versa), either by way of an effective merger of such entities, share swap, share redemption, tender offer, or other form of control consolidation (the "Cosan Limited Collapse") other than with the prior written consent of Shell, which consent shall not be unreasonably withheld other than for business reasons as decided at Shell's sole discretion.  The Parties agree that it is the intention of Cosan Limited and Cosan to seek to effect a Cosan Limited Collapse within 2 years of Closing, subject to receipt of the necessary written consent from Shell;

(b) no such transfer shall relieve that Cosan Person of any of its obligations hereunder or enlarge, alter or change any right or obligation of any other Party hereto;

(c) the Cosan Person shall notify Shell of the identity of any such proposed transferee;

(d) subject to Clause ‎12.5.3(e), any obligations of the Cosan Person to Shell are also assumed by the transferee; and

(e) the Cosan Person shall procure that if it or such transferee ceases to be Controlled by that Cosan Person, any obligations of it or of such transferee to the Cosan Person shall be transferred to Cosan or another entity Controlled by Cosan Limited; and/or

12.5.4 Cosan Limited or its Affiliates from selling part of its direct or indirect equity interest in Cosan (whether before, during or after any Lock-Up Period, the Qualified Lock-Up Period or otherwise), provided that such sale does not effect a Transfer of its Control of Cosan.

12.6 Notwithstanding the other provisions of this Agreement, neither Cosan nor Shell shall effect any Transfer of its respective direct or indirect interest in the Joint Venture to any Third Party Offeror unless the Third Party Offeror is a Qualifying Offeror.

12.7 Notwithstanding the other provisions of this Agreement, Cosan Limited shall not effect any Transfer of the Cosan Limited Interest to any Third Party Offeror unless the Third Party Offeror is a Qualifying Offeror.

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SECTION SEVEN: QUALIFIED LOCK-UP PERIOD OPTIONS

13. UNSOLICITED SALE ROFR AND UNSOLICITED CALL OPTION

13.1 This Clause ‎13 applies if, during the Qualified Lock-Up Period:

13.1.1 Cosan Limited receives a Third Party Offer from an Unsolicited Third Party Offeror for the Cosan Limited Interest and Cosan Limited wishes to accept such offer (an "Unsolicited Third Party Offer"); or

13.1.2 ROSM receives an unsolicited bona fide offer from a third party (in accordance with the terms of the ROSM Agreement),

notwithstanding the provisions of Clause ‎12 and provided that no Breach Notice has been served.

13.2 Cosan Limited shall ensure that any binding agreement in relation to an Unsolicited Third Party Offer shall be conditional on:

13.2.1 Cosan Limited delivering a Third Party Offer Notice to Shell;

13.2.2 Cosan Limited procuring that Shell is offered each of the following rights:

(a) the right to acquire all (but not less than all) of the Cosan Limited Interest at the same price and on the same terms as the Cosan Limited Unsolicited Third Party Offer (as specified in the applicable Third Party Offer Notice) (an "Unsolicited Sale ROFR");

(b) the right to acquire the Sugar and Ethanol Voting Shares for BRL1; and

(c) the right to acquire all (but not less than all) of the Cosan Interest from Cosan at Base Value (the "Unsolicited Call Option"); and

13.2.3 Shell not exercising its rights pursuant to Clause ‎13.2.2.

13.3 Any bona fide offer from an Unsolicited Third Party Offeror in respect of the ROSM Interest shall only be valid and binding where such Unsolicited Third Party Offeror grants Shell each of the following rights:

13.3.1 the right to exercise the ROSM ROFR;

13.3.2 the right to acquire the Sugar and Ethanol Voting Shares for BRL1; and

13.3.3 the right to exercise an Unsolicited Call Option at Base Value.

13.4 During the Unsolicited Sale Exercise Period, Shell may by notice in writing to Cosan Limited (copied to Cosan) or ROSM (pursuant to the ROSM Agreement), as applicable, exercise:

13.4.1 the Unsolicited Sale ROFR or the ROSM ROFR (as applicable):

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(a) where the Unsolicited Third Party Offer is in cash, at the price and on the terms each as notified to it in the relevant Third Party Offer Notice; or

(b) where such offer consists of cash and Liquid Securities, on equivalent terms to those set out in the Third Party Offer Notice and at a price equal to:

(i) the amount of the cash consideration; plus

(ii) the value of the Liquid Securities, where such valuation shall be calculated as at the date of exercise by Shell of the Unsolicited Sale ROFR or the ROSM ROFR (as applicable) (the "Exercise Date") by reference to valuation specified in the Third Party Offer or, where no such valuation is specified, the closing price of such Liquid Securities at the close of business of the relevant stock exchange on the day prior to the Exercise Date and shall be payable in:

(A) cash; and/or

(B) Shell Securities (whose value shall not exceed the value of the Liquid Securities being offered, on a pro-rata basis), the value of which shall (i) be calculated using the closing price of such Shell Securities at the close of business of the relevant stock exchange on the day prior to the Exercise Date and (ii) not exceed the value of the Liquid Securities being offered, on a pro-rata basis; or

13.4.2 exercise the Unsolicited Call Option at Cosan Base Value; or

13.4.3 exercise the right to purchase the Sugar and Ethanol Voting Shares for BRL1 from the proposed transferor.

13.5 Ten Business Days after the Option Price has been calculated, Shell's Exercise Notice in respect of the Unsolicited Call Option shall become irrevocable, after which Shell may only revoke such Exercise Notice with Cosan's prior written consent.

13.6 Whilst the relevant shares are the subject of an Unsolicited Third Party Offer Notice, such shares may not be Transferred otherwise than in accordance with the terms of this Agreement without the prior written consent of Shell.

13.7 If Shell delivers an Exercise Notice in accordance with this Clause ‎13, Shell shall pay the applicable Option Price in full on the applicable Option Completion Date.

13.8 Completion of the Unsolicited Sale ROFR, Unsolicited Call Option or transfer of the Sugar and Ethanol Voting Shares (as applicable) shall occur:

13.8.1 on the later of:

(a) the date which is 20 Business Days after receipt by Cosan and/or Cosan Limited of the applicable Exercise Notice; and

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(b) the date specified in the applicable Exercise Notice;

(c) 10 Business Days after the date on which the applicable Option Price is finally determined; and

(d) where the Option Completion is subject to the approval of any applicable Governmental Authority, 5 Business Days after all necessary approvals have been received, and the requirement to obtain such approval shall be subject to the Parties' obligation to use their respective reasonable endeavours to consummate the transaction as promptly as reasonably practicable; and

13.8.2 in accordance with Clauses ‎19 and ‎20.

13.9 If Shell does not submit an Exercise Notice pursuant to this Clause ‎13 within the Unsolicited Sale Exercise Period, Shell shall be deemed not to have exercised the Unsolicited Sale ROFR, Unsolicited Call Option or its option to purchase the Sugar and Ethanol Voting Shares and, subject to this Clause ‎13.9, shall have no further rights under this Clause ‎13 in relation to the shares referred to in Clause ‎13.2.

13.10 If on the applicable Option Completion Date Shell fails to make the payment due at the price and on the terms determined in accordance with Clause ‎13.4, then Cosan Limited shall be entitled to transfer the legal and beneficial title to Cosan Limited Interest in accordance with Clause ‎13.9 as if Shell had not submitted a Exercise Notice, and Shell shall have no claim for damages or compensation (or otherwise) against Cosan or Cosan Limited in respect of the Cosan Limited Interest.

SECTION EIGHT: FUNDAMENTAL BREACH

14. FUNDAMENTAL BREACH

14.1 If a Party (other than a JV Entity) (the "Breach Notice Sender") alleges that any other Party (other than a JV Entity) (the "Breach Notice Recipient") or ROSM has committed a Fundamental Breach it shall notify the Breach Notice Recipient, the other Parties and ROSM giving details of the alleged Fundamental Breach and the reasons why it considers that a Fundamental Breach has occurred (a "Breach Notice").

14.2 Not later than 5 Business Days following receipt of a Breach Notice, the Breach Notice Recipient shall notify the Breach Notice Sender, the other Parties and ROSM if it disputes the existence of the Fundamental Breach alleged (a "Dispute Notice").

14.3 If the Breach Notice Recipient disputes the existence of the alleged Fundamental Breach, the matter shall be referred to the Cosan Shareholder Representative and the Shell Shareholder Representative, who shall use all reasonable endeavours to resolve the matter as early as possible and in any event within 20 days of the date of delivery of the Dispute Notice.

14.4 If a matter is not resolved in accordance with Clause ‎14.3, it may be referred by either the Breach Notice Sender or the Breach Notice Recipient (with written notice to the other) to arbitration to be finally resolved in accordance with Clause ‎37; provided that no such matter shall be presented for arbitration prior to the end of the 20 day

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cure period set out in Clause ‎14.3, other than by agreement between both Cosan and Shell.

14.5 In the event that a Breach Notice is delivered by a Party either: (i) after a Third Party Offer Notice has been delivered to the Other Party; or (ii) after the date on which such Party furnishes non-public information to a Third Party Offeror or its Representatives; and

14.5.1 a potential transfer to a Third Party Offer Notice is not completed; and

14.5.2 an Arbitrator determines in accordance Clause ‎37 that:

(a) the delivery of such Breach Notice was frivolous and vexatious in nature; and

(b) the reason the potential transfer to the Third Party Offeror did not complete was, in whole or in part, because of the serving of the Breach Notice,

then the Party serving the frivolous and vexatious Breach Notice shall be liable to the Other Party for any damages arising directly out of, or in connection with, the delivery of such a Breach Notice, as such Arbitrator shall decide.

14.6 Where damages are payable to an Other Party pursuant to Clause ‎14.5, the Party which served the frivolous and vexatious Breach Notice may elect to purchase the Other Party's shares for the same price and on the same terms as set out in the relevant Third Party Offer Notice in lieu of the payment of damages as determined by the Arbitrator pursuant to Clause 12.5 (plus interest accruing at the Default Interest Rate (the Parties acknowledge and agree that SELIC, as the interest rate standard in Brazil, is a reasonable benchmark for interest in relation to matters connected with a business, such as the Joint Venture, whose primary operations are in Brazil), compounded monthly, commencing on the date that such Arbitrator shall determine such interest should start to accrue).

15. COSAN FUNDAMENTAL BREACH OPTION

15.1 This Clause ‎15 applies if:

15.1.1 a Fundamental Breach has been committed by Shell (either as agreed between the Parties or as determined in accordance with Clause ‎14); and

15.1.2 Shell holds shares in any JV Entity.

15.2 Shell irrevocably grants to Cosan an option to buy, and to require Shell to sell, the Shell Interest, such option to be exercisable during the Cosan Fundamental Breach Option Exercise Period in accordance with this Clause ‎15.

15.3 In the event that Cosan exercises the Cosan Fundamental Breach Option in accordance with this Clause ‎15, Shell shall sell, and Cosan shall buy, the Shell Interest and each right attaching to the Shell Interest on the applicable Option Completion Date.

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15.4 The Cosan Fundamental Breach Option may be exercised only:

15.4.1 in respect of all (but not less than all) of the Shell Interest; and

15.4.2 by the delivery by Cosan to Shell of the Exercise Notice relating to a Cosan Fundamental Breach at any time during the Cosan Fundamental Breach Exercise Period.

15.5 The price to be paid in respect of the Cosan Fundamental Breach Option will be:

15.5.1 where the Shell Partial Call Option has been exercised and no Cosan Partial Call Option has been exercised, an amount equal to 90 per cent. of the Shell Base Value;

15.5.2 where Shell holds, directly or indirectly, shares in the Downstream Co and the Management Co only, an amount equal to 85 per cent. of the Shell Downstream Co Value; and

15.5.3 in all other circumstances, an amount equal to 85 per cent. of the Shell Base Value,

such Base Value or Downstream Co Value (as applicable) to be calculated as at the date of the Fundamental Breach Notice.

15.6 If Cosan exercises the Cosan Fundamental Breach Option, Cosan shall pay the applicable Option Price:

15.6.1 in full on the applicable Option Completion Date; or

15.6.2 if Cosan so elects and specifies in the Exercise Notice, 50 per cent. on the Option Completion Date, and the remaining 50 per cent in equal quarterly instalments, commencing on the Option Completion Date, for a period of 33 months from such applicable Option Completion Date.

15.7 Completion of the Cosan Fundamental Breach Option shall occur:

15.7.1 on the later of:

(a) the date which is 15 Business Days after receipt by Shell of the Cosan Exercise Notice relating to the Cosan Fundamental Breach Option; and

(b) where the Option Completion is subject to the approval of any applicable Governmental Authority, 5 Business Days after all necessary approvals have been received, and the requirement to obtain such approval shall be subject to the Parties' obligation to use their respective reasonable endeavours to consummate the transaction as promptly as reasonably practicable; and

15.7.2 in accordance with Clauses ‎19 and ‎20.

15.8 Effective as of the Option Completion Date in respect of any Cosan Fundamental Breach Option, Shell shall not have any liability to Cosan for any Losses (as defined

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in the Framework Agreement) that it may have incurred or suffered as a result of, or in connection with, the Fundamental Breach by Shell, except that, and only to the extent that, such Losses exceed 15 per cent. of the Base Value (or, where the Shell Partial Call Option has but the Cosan Partial Call Option has not been exercised, 10 per cent.).  As a result of such Losses, on and after the Option Completion Date in respect of any Cosan Fundamental Breach Option:

15.8.1 the exercise of the Cosan Fundamental Breach Option shall be deemed to have provided Cosan with the exclusive remedy for, or arising in connection with, the Fundamental Breach by Shell and any other related claim or matter where the Losses incurred or suffered by Cosan as a result of, or in connection with, the Fundamental Breach by Shell do not exceed 15 per cent. (or, where the Shell Partial Call Option has but the Cosan Partial Call Option has not been exercised, 10 per cent.) of the Base Value; and

15.8.2 the only remedy for Cosan in respect of any such Fundamental Breach by Shell where such Losses do exceed 15 per cent. of Base Value (or in respect of Clause ‎15.5.1, 10 per cent.) is to recover the extent of such excess.

16. SHELL FUNDAMENTAL BREACH OPTION

16.1 This Clause ‎16 applies if:

16.1.1 a Fundamental Breach has been committed by Cosan (either as agreed between the Parties or as determined in accordance with Clause ‎14); and

16.1.2 Cosan holds shares in any JV Entity.

16.2 Cosan irrevocably grants to Shell an option to buy, and to require Cosan to sell, the Cosan Interest, such option to be exercisable during the Shell Fundamental Breach Option Exercise Period in accordance with this Clause ‎16.

16.3 In the event that Shell exercises the Shell Fundamental Breach Option in accordance with this Clause ‎16, Cosan shall sell and Shell shall buy the Cosan Interest and each right attaching to the Cosan Interest on the applicable Option Completion Date.

16.4 The Shell Fundamental Breach Option may be exercised only:

16.4.1 in respect of all (but not less than all) of the Cosan Interest; and

16.4.2 by the delivery by Shell to Cosan of an Exercise Notice at any time during the Shell Fundamental Breach Option Exercise Period.

16.5 Other than where such Fundamental Breach relates to the Insolvency of ROSM, Cosan Limited or Cosan, the price to be paid in respect of the Shell Fundamental Breach Option will be an amount equal to 85 per cent. of the Cosan Base Value or, where Shell holds, directly or indirectly, shares in the Downstream Co and the Management Co only, 85 per cent. of the Cosan Downstream Co Value, such Cosan Base Value or Cosan Downstream Co Value to be calculated as at the date of the Fundamental Breach.

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16.6 Where such Fundamental Breach relates to the Insolvency of ROSM, Cosan Limited or Cosan, the price to be paid in respect of the Shell Fundamental Breach Option will be an amount equal to:

16.6.1 on or before the second anniversary of the Closing Date, 90 per cent.;

16.6.2 from the second anniversary of the Closing Date to the third anniversary of the Closing Date, 92 per cent.;

16.6.3 from the third anniversary of the Closing Date to the fourth anniversary of the Closing Date, 94 per cent.;

16.6.4 from the fourth anniversary of the Closing Date to the fifth anniversary of the Closing Date, 96 per cent.;

16.6.5 from the fifth anniversary of the Closing Date onwards, 98 per cent.,

of the Cosan Base Value or, where Shell holds, directly or indirectly, shares in the Downstream Co and the Management Co only, the Cosan Downstream Co Value, such Cosan Base Value or Downstream Co Value (as applicable) to be calculated as at the date of the Fundamental Breach Notice.

16.7 If Shell exercises the Shell Fundamental Breach Option, Shell shall pay the applicable Option Price:

16.7.1 in full on the Option Completion Date relating to a Shell Fundamental Breach; or

16.7.2 if Shell so elects and specifies in the Exercise Notice, 50 per cent. on the Option Completion Date, and the remaining 50 per cent in equal quarterly instalments, commencing on the Option Completion Date, for a period of 33 months from such applicable Option Completion Date.

16.8 Completion of the Shell Fundamental Breach Option shall occur:

16.8.1 on the later of:

(a) the date which is 15 Business Days after receipt by Cosan of the applicable Exercise Notice;

(b) the date on which the applicable Option Price is finally determined; and

(c) if Shell so elects, where the Option Completion is subject to the approval of any applicable Governmental Authority, 5 Business Days after all necessary approvals have been received, and the requirement to obtain such approval shall be subject to the Parties' obligation to use their respective reasonable endeavours to consummate the transaction as promptly as reasonably practicable; and

16.8.2 in accordance with Clauses ‎19 and ‎20.

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16.9 Effective as of the Option Completion Date in respect of any Shell Fundamental Breach Option, Cosan shall not have any liability to Shell for any Losses that it may have incurred or suffered as a result of, or in connection with, the Shell Fundamental Breach, except that and only to the extent that:

16.9.1 where Clause ‎16.5 applies, such Losses exceed 15 per cent.;

16.9.2 where Clause ‎16.6.1 applies, such Losses exceed 10 per cent.;

16.9.3 where Clause ‎16.6.2 applies, such Losses exceed 8 per cent.;

16.9.4 where Clause ‎16.6.3 applies, such Losses exceed 6 per cent.;

16.9.5 where Clause ‎16.6.4 applies, such Losses exceed 4 per cent.; and

16.9.6 where Clause ‎16.6.5 applies, such Losses exceed 2 per cent.,

of the Cosan Base Value or the Cosan Downstream Co Value.

16.10 As a result of any such Losses set out in Clause ‎16.9, on and after the Option Completion Date in respect of any Shell Fundamental Breach Option:

16.10.1 the exercise of the Shell Fundamental Breach Option shall be deemed for all purposes to have provided Shell with the exclusive remedy for or arising in connection with the Fundamental Breach by Cosan and any other related claim or matter where the Losses incurred or suffered by Shell as a result of, or in connection with, the Fundamental Breach by Cosan do not exceed the percentage set out in the applicable sub-clause of Clause 14.9 of the Base Value; and

16.10.2 the only remedy for Shell in respect of any such Fundamental Breach by Cosan where such Losses exceed the percentage set out in the applicable sub-clause of Clause ‎16.9 of the Base Value is to recover the extent of such excess.

SECTION NINE: OPTION COMPLETION

17. DETERMINATION OF VALID OPTION

In the event that more than one Notice is served concurrently, the Parties shall refer the issues arising from such Notice to arbitration in accordance with Clause ‎33 and shall instruct the arbitral tribunal to determine which, if any, of the events that any Party alleges occurred and thereby triggered the relevant Option, occurred first and only the Notice relating to such event shall be valid.

18. VALUATION AND BASE VALUE

18.1 Unless agreed by the Parties, the Base Value shall be calculated as of the applicable Base Value Date in accordance with this Clause ‎18, and the process contemplated by this Clause ‎18 shall be required to commence on each of the Base Value Dates.

18.2 In the event that the Base Value, the Downstream Co Value and/or the Sugar and Ethanol Co Value is required to be determined by a provision of this Agreement, the

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provisions of this Clause ‎18 shall apply.

18.3 Cosan shall select a Qualifying Investment Bank (the "Cosan Valuer") and shall notify Shell of such selection within 15 days of the date of the applicable Base Value Date. Shell shall select a Qualifying Investment Bank (the "Shell Valuer") and shall notify Cosan of such selection within 15 days of the applicable Base Value Date.

18.4 In the event that:

18.4.1 within 15 days of the Base Value Date (or within any period of time by which Cosan and Shell agree in writing to extend such initial 15 day period), Cosan or Shell fails to notify the other of its respective selection pursuant to Clause ‎18.3, then the Qualifying Investment Bank selected by whichever of Cosan and Shell did notify the other of its selection; or

18.4.2 within 15 days of the Exercise Notice Date (or within any period of time by which Cosan and Shell agree in writing to extend such initial 15 day period), Cosan and Shell have not selected two separate Qualifying Investment Banks (or if either or each of Cosan and Shell fails to be reasonably satisfied that appropriate information barriers will be erected in the event that they have selected the same Qualifying Investment Bank), then the Independent Valuer (to be appointed in accordance with Clause ‎18.5),

shall be the "Sole Valuer" and, for the avoidance of doubt, there shall be no Cosan Valuer and no Shell Valuer,

18.5 As required pursuant to Clause ‎18.4 and/or ‎18.11.2, Cosan and Shell shall, within 30 days of (a) the Parties failing to select two separate Qualifying Investment Banks pursuant to ‎18.4.2 or (b) receiving notice pursuant to Clause ‎18.11.1 agree upon a Qualifying Accounting Firm (other than the auditors of any Party) to act as the Independent Valuer.  Where Cosan and Shell fail to reach an agreement within such 30 day period, a Qualifying Accounting Firm with no audit relationship with any of Cosan, Shell or any of their respective Affiliates (and otherwise the firm with the least material relationship with each such Party, such materiality to be determined by reference to revenues received from Cosan, Shell and/or their Affiliates in the preceding twelve month period), shall be selected by the Independent Selector and appointed as the Independent Valuer.  The Independent Valuer's decision shall be final and binding on the Parties and for whose fees, costs and expenses Cosan and Shell shall be jointly liable in equal proportions.

18.6 Cosan shall be liable for the fees, costs and expenses of any Cosan Valuer and Shell shall be liable for the fees, costs and expenses of any Shell Valuer. Cosan and Shell shall be jointly liable for equal proportions of the fees, costs and expenses of any Sole Valuer selected as a result of the circumstances contemplated in Clauses ‎18.4.1 and ‎18.4.2.

18.7 Within 5 Business Days of the determination of the identity of the Cosan Valuer and the Shell Valuer or of the Sole Valuer (as the case may be):

18.7.1 Cosan shall instruct the Cosan Valuer and Shell shall instruct the Shell Valuer to each; or

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18.7.2 if a Sole Valuer is required in pursuant to Clause ‎18.4, Cosan and Shell shall together instruct the Sole Valuer to,

determine, in accordance with Clause ‎18.10, and depending on the requirements of the Option being exercised, the JV Valuation Range, the Downstream Valuation Range and the Sugar and Ethanol Valuation Range.

18.8 The Valuers, when calculating the Base Value, shall also calculate the Downstream Co Value and the Sugar and Ethanol Co Value.

18.9 If the Base Value and/or the Downstream Co Value and/or the Sugar and Ethanol Co Value is required to be determined pursuant to any provision of this Agreement, the JV Entities shall promptly provide the Valuers with such access, information and materials which the Valuers reasonably consider necessary or desirable for the carrying out of their respective valuations pursuant to Clause ‎18.7; provided that the Valuers shall enter into a confidentiality agreement with such JV Entity in a form to be agreed between Shell and Cosan (acting reasonably).

18.10 Any Cosan Valuer, Shell Valuer and/or Sole Valuer instructed in accordance with this Clause ‎18 shall be instructed to:

18.10.1 conduct due diligence in respect of the Joint Venture from information and materials provided by the management of the Joint Venture pursuant to Clause ‎18.9;

18.10.2 base its valuations on such benchmarks and methodologies as it deems relevant and which may include: (i) a discounted cash flow analysis of the Sugar and Ethanol Co and the Downstream Co discounted at a weighted average cost of capital (as all such terms are understood by the Person making the valuations at the time of making them), applicable to each of the Sugar and Ethanol Co and the Downstream Co, or similar valuation methodologies customary at such time, and (ii) relevant comparable multiples for the Sugar and Ethanol Co and the Downstream Co, to arrive to an enterprise value for each of the Sugar and Ethanol Co and the Downstream Co;

18.10.3 assume, for all purposes when determining a Valuation Range, that there is no  positive or negative value attributable to any of the following:

(a) the illiquidity of the shares of the Joint Venture;

(b) the size of the relevant Parties' respective ownership in the Joint Venture;

(c) the existence of one or more large or Controlling shareholders; or

(d) the terms and conditions of the documentation governing the Sugar and Ethanol Co and/or the Downstream Co including this Agreement, the Framework Agreement and the Shareholders' Agreements;

18.10.4 assume that both the Downstream Co and the Sugar and Ethanol Co operate on an arm's length basis in relation to each other, and that no Party shall seek to argue to the contrary;

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18.10.5 assume that the value of each Party's interest in the Management Co shall be BRL1;

18.10.6 where the Parties have agreed to declare and/or pay a dividend notwithstanding Clause ‎26, make appropriate adjustments so as not to include for the purposes of the valuation any part of the distributable reserves of the relevant JV Entities which relate to any dividend or other distribution declared but not paid or not made as at the date of the valuation;

18.10.7 make appropriate adjustments to the enterprise value as determined in order to arrive to an equity valuation range for each of the Sugar and Ethanol Co and the Downstream Co; and

18.10.8 if the Shell Brand Licensing Agreement has not been renewed, assume that the Shell Brand Licensing Agreement remains valid for 5 years from the date of the valuation with a unit fee per litre of fuel for each business covered by the Shell Brand Licensing Agreement equal to the unit fee per litre of the respective type of fuel applicable to such fuel in the final year of the un-renewed Shell Brand Licensing Agreement, converted to US$ at the then prevailing rate.  Where the remainder of the valuation model is prepared taking into account inflation in nominal terms, such assumed unit fee shall also be adjusted for Brazilian inflation each year after the expiry of the original term of the Shell Brand Licensing Agreement;

18.10.9 if the Ethanol Supply Agreement  between the Downstream Co and the Sugar & Ethanol Co is no longer in force, assume that the Ethanol Supply Agreement is force with the same terms and conditions as the latest version previously entered into by the parties, for a term of one year. For clarification, the Valuers shall deem the price applicable to the supply of ethanol for the additional term of one year to be the to lower of:  (i) the lowest of the average price of the previous 12 months of supply; or (ii) the price resulting from the application of the Ethanol Supply Agreement’s most favored nation provision, if it has one, and if not, as such provisions are understood in the market at the time

18.10.10 notify each of Cosan and Shell in writing of its JV Valuation Range, Downstream Valuation Range and Sugar and Ethanol Valuation Range within 40 Business Days of being instructed.

18.11 Cosan and Shell shall calculate the Base Value, the Downstream Co Value and the Sugar and Ethanol Value (as applicable):

18.11.1 within 10 Business Days of receiving notice of each of the Valuation Ranges; or

18.11.2 where an Independent Valuer has been appointed, within 10 Business Days of receiving notice of such Independent Valuer's Valuation.

18.12 Each of the Valuation Ranges shall be determined in US$.

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19. PAYMENTS

19.1 All payments due and payable from a Payor to a Payee shall be made in cleared funds, in US$, to the account of the Payee or as the Payee may direct with 5 Business Days' notice (or such shorter period as the Payor may agree) in writing to the Payor.

19.2 In respect of the payment of any Option Price payable in instalments:

19.2.1 the first instalment shall be due and payable on the applicable Option Completion Date;

19.2.2 subsequent instalments shall be due and payable on the date three calendar months following the applicable Option Completion Date until the date payment of the applicable Option Price has been made in full;

19.2.3 interest shall accrue on any unpaid amounts at LIBOR until the date payment of the applicable Option Price has been made in full;

19.2.4 notwithstanding Clauses ‎19.2.2 and ‎19.2.3, the Payor may prepay the Payee in full (with 3 Business Days' notice in writing to the Payee or such shorter period as the Payee may agree) in respect of any unpaid amounts (and any Accrued Interest) and any such prepayment shall discharge in full the Payor's obligations to the Payee in respect of payment of the applicable Option Price; and

19.2.5 the Payor shall, on the applicable Option Completion Date, enter into a share pledge agreement substantially in, and no less beneficial to the Payee than, the form set out in Schedule 7, pursuant to which the Payor shall pledge to the Payee, effective on the date thereof, all the shares transferred to the Payor on the applicable Option Completion Date, as security for the obligation of the Payor to pay the Payee the full amount of the applicable Option Price on the terms of this Agreement.

19.3 If the Payor fails to make the payment it owes to the Payee in accordance with the terms of this Agreement:

19.3.1 on the applicable Option Completion Date, then the Payee shall be entitled to:

(a) in the case of the First Shell Call Options, the Second Shell Call Option, the Cosan Options, the Disqualification Call Option, the Unsolicited Call Option, the Cosan Fundamental Breach Option and the Shell Fundamental Breach Option, retain the legal and beneficial title to the shares due to be transferred to the Payor on the Option Completion Date as if the Payor had failed to submit an Exercise Notice;

(b) retain any sums received in respect of any payment due from the Payor to it; and

(c) in the case of the Disqualification Put Option, sell the shares due to be transferred to the Payor on the Option Completion Date to any Person,

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and the Payor shall have no claim for damages or compensation (or otherwise) against the Payee in respect of the such shares; and/or

19.3.2 on or after any date on which an instalment in respect of the applicable Option Price is due in accordance with the terms of this Agreement, then:

(a) interest shall accrue on any unpaid amounts at the Default Interest Rate and compounded monthly (the Parties acknowledge and agree that SELIC, as the interest rate standard in Brazil, is a reasonable benchmark for interest in relation to matters connected with a business, such as the Joint Venture, whose primary operations are in Brazil); and

(b) after the expiry of any grace period to which the Payee may agree, if any, the Payee shall be entitled to enforce the pledge granted pursuant to Clause ‎19.2.5 in accordance with the terms thereof and apply the proceeds of such enforcement:

(i) in satisfaction of any amount due from the Payor to the Payee in respect of payment of any part of the applicable Option Price which remains outstanding (whether or not due and payable at such date); and

(ii) towards the payment of (1) any default interest accrued pursuant to Clause ‎19.3.2(b)(i), and (2) the fees, costs and expenses incurred by the Payee in connection with the enforcement of such security.

19.4 Notwithstanding anything in the Transaction Documents to the contrary, a Payor shall not be entitled to set-off all or part of an Option payment (or any accrued interest thereon) against an amount owing from a Payee (or any of its Affiliates) to such Payor (or any of its Affiliates), other than in connection with any Determined Indemnity Amount (as defined in the Framework Agreement) that is at that time (whether or not this is during a grace period in respect of such payment obligation) owing from such Payee (or any of its Affiliates) to such Payor (or any of its Affiliates).

20. OPTION COMPLETION

20.1 Each Option Completion shall take place by 11:00 a.m. on the date specified in the applicable Exercise Notice at the Management Co's registered office, or at such other place as may be agreed between the Payor and the Payee.

20.2 At each Option Completion the Payor shall pay to the Payee the applicable Option Price or, if applicable, the first instalment of payment of the applicable Option Price, and the Payee shall deliver (or cause to be delivered) to the Payor a receipt in respect of the same.

20.3 At each Option Completion the Payor and the Payee shall each execute an entry, in respect of the transfer of shares to be transferred to the Payor on the applicable Transfer Completion Date, in the pertinent Register of each of the Sugar and Ethanol Co, the Downstream Co and the Management Co (as applicable), formalizing the transfer of such shares and each of the Sugar and Ethanol Co, the Downstream Co and

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the Management Co (as applicable) shall do all things within its power necessary to effect the transfer and the registration of the transfer, including the update of the pertinent Register Book of Shares ("Livro de Registro de Ações Nominativas", under Brazilian law) of each of the Sugar and Ethanol Co, the Downstream Co and the Management Co (as applicable).

SECTION TEN: REPRESENTATIONS AND WARRANTIES

21. SHELL WARRANTIES

21.1 Shell warrants to Cosan that each Shell Warranty is true, accurate and not misleading at the date of this Agreement. Immediately before the applicable Option Completion Date relating to the Cosan Fundamental Breach or Cosan Call Option, Shell is deemed to warrant to Cosan that each Shell Warranty is true, accurate and not misleading by reference to the facts and circumstances as at the applicable Option Completion Date relating to the Cosan Fundamental Breach or Cosan Call Option (as applicable). For this purpose only, where there is an express or implied reference in a Shell Warranty to the "date of this Agreement", that reference is to be construed as a reference to, in relation to the applicable Completion Date.

21.2 Shell acknowledges that Cosan is entering into this Agreement in reliance on each Shell Warranty which has also been given as a representation and with the intention of inducing Cosan to enter into this Agreement.

21.3 At any time from the Closing Date until any Option Completion relating to the Cosan Fundamental Breach or Cosan Call Option, Shell shall notify Cosan promptly if it becomes aware of any fact or circumstance which constitutes or which would reasonably be expected to constitute a breach (whether repudiatory in nature or not) of Clause ‎21.1 or which would or might cause a Shell Warranty to be untrue, inaccurate or misleading if given in respect of the facts or circumstances as at any Option Completion Date.

21.4 Each Shell Warranty is to be construed independently and (except where this Agreement provides otherwise) is not limited by a provision of this Agreement or another Shell Warranty.

22. COSAN WARRANTIES

22.1 Cosan warrants to Shell that each Cosan Warranty is true, accurate and not misleading at the date of this Agreement. Immediately before the Option Completion Date relating to the Shell Fundamental Breach, the First Shell Call Option, the Second Shell Call Option or a Unsolicited Sale ROFR, Cosan is deemed to warrant to Shell that each Cosan Warranty is true, accurate and not misleading by reference to the facts and circumstances as at the applicable Option Completion Date. For this purpose only, where there is an express or implied reference in a Cosan Warranty to the "date of this Agreement", that reference is to be construed as a reference to the applicable Option Completion Date.

22.2 Cosan acknowledges that Shell is entering into this Agreement in reliance on each Cosan Warranty which has also been given as a representation and with the intention of inducing Shell to enter into this Agreement.

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22.3 At any time from the Closing Date until Cosan ceases to hold shares in each of the JV Entities, Cosan shall notify Shell promptly if it becomes aware of any fact or circumstance which constitutes or which would reasonably be expected to constitute a breach (whether repudiatory in nature or not) of Clause ‎22.1 or which would or might cause a Cosan Warranty to be untrue, inaccurate or misleading if given in respect of the facts or circumstances as at that date

22.4 Each Cosan Warranty is to be construed independently and (except where this Agreement provides otherwise) is not limited by a provision of this Agreement or another Cosan Warranty.

23. THIRD PARTY WARRANTIES

23.1 Cosan Limited and Cosan shall procure that, as a term and condition of any sale of the Cosan Limited Interest or the Cosan Interest to a Third Party Offeror, such Third Party Offeror will undertake and agree to warrant to Shell that each Third Party Warranty is true, accurate and not misleading immediately before the applicable Option Completion Date, by reference to the facts and circumstances as at that date.

23.2 Each Third Party Warranty is to be construed independently and (except where this Agreement provides otherwise) is not limited by a provision of this Agreement or another Third Party Warranty.

SECTION ELEVEN: COVENANTS OF THE PARTIES

24. FURTHER COVENANTS

24.1 Cosan Limited and Cosan agree, covenant and undertake to jointly and severally indemnify Shell for:

24.1.1 50 per cent. of the price that Shell, Shell UK Co, or any other Affiliate of Shell, may be required to pay for the purchase of any shares in Cosan or Cosan Limited pursuant to a Tender Offer arising out of or in connection with the Closing; and

24.1.2 the price that Shell, Shell UK Co, or any other Affiliate of Shell, may be required to pay for the purchase of any shares in Cosan or Cosan Limited pursuant to a Tender Offer arising out of or in connection with the completion of an Option and for the reasonable and documented third party fees, costs and expenses incurred by Shell in connection with any such Tender Offer, where such fees, costs and expenses shall be subject to a cap of  BRL8,750,000, as increased in line with Brazilian inflation by multiplying such figure by the Inflation Multiplier,

24.2 Where Shell may be required (or it is asserted that Shell may be required) to commence a Tender Offer for shares in Cosan as a result of the completion of an Option or a Third Party Offer:

24.2.1 Cosan Limited may request, in writing, to Shell that the validity of such Tender Offer be disputed;

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24.2.2 Shell agrees that it shall, on Cosan Limited's instructions and to the extent it is reasonably practicable without any prejudice to Shell, take such actions (for a period not exceeding two months, to be extended during the pendency of any injunction or other similar court order suspending any Tender Offer until resolved; provided that Shell shall not (i) be required to initiate further injunctions or similar court orders, or (ii) be prevented from complying with the Tender Offer upon the lifting of any such injunction or similar court order (the "Dispute Period")) as Cosan Limited may reasonably direct, to dispute that any such Tender Offer is required under applicable Law;

provided that (i) Cosan Limited agrees that it will pay all fees, costs and expenses in respect of any dispute and/or Tender Offer in addition to those payable pursuant to Clause ‎24.1.2 and (ii) nothing in this sub-Clause shall conflict with Shell's obligations to the Comissão de Valores Mobiliários ("CVM") or any other Governmental Authority or its obligations at Law.

24.3 Cosan Limited or Cosan (as applicable) shall retain all proceeds paid to it pursuant to completion of a Third Party Offer or Option for a period of 9 months from the date of completion of such Option or Third Party Offer, provided that (i) such proceeds may be used to pay any amounts owing to Shell pursuant to the guarantees and indemnities set out in the Transaction Documents and (ii) such period may be extended for a period equal to the longer of a Dispute Period and a dispute period arising in connection with the ROSM Agreement.

24.4 Shell agrees that, in the event that Shell is required to purchase, and purchases, from any Person any shares in Cosan and/or Cosan Limited as a consequence of any of the events contemplated in Clause ‎24.1, Shell shall procure that the legal and beneficial title to any such shares so purchased shall be transferred:

24.4.1 in respect of the shares in Cosan purchased by Shell, to Cosan Limited; and

24.4.2 in respect of the shares in Cosan Limited purchased by Shell, to Cosan Limited,

upon receipt by Shell of payment from Cosan and/or Cosan Limited (as the case may be) of a gross amount equal to the amount Shell was required to pay to purchase the shares referred to in Clause ‎24.1 plus any fees, costs or expenses payable pursuant to Clause ‎24.1.2.

24.5 In the event that the legal and beneficial title to any shares in Cosan and/or Cosan Limited are to be transferred in accordance with Clause ‎24.1, Cosan and/or Cosan Limited (as the case may be) shall assist with the registration of, and cause to be registered, the transfer of such shares.

24.6 Any payment made to Shell pursuant to this Clause ‎24 shall be made in cleared funds to the account of Shell or as Shell may direct in writing.

25. COMPLIANCE WITH AGREEMENT

25.1 Each of the Parties (other than each JV Entity) undertakes to the other Parties (other than each JV Entity) that it shall take all practicable steps including, without

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limitation, the exercise of votes it directly or indirectly controls at meetings of the board and general meetings of any JV Entity or any Affiliate of any JV Entity to ensure (insofar as it is able to do so) that the terms of this Agreement are complied with, including, for the avoidance of doubt, that no terms of this Agreement shall be breached, and to procure (insofar as it is able to do so) that the board of and any JV Entity or any Affiliate of any JV Entity complies with its obligations and that it shall do all such other acts and things as may be necessary or desirable to implement this Agreement.

25.2 If any provision of the Byelaws of any JV Entity at any time conflicts with any provision of this Agreement, this Agreement shall prevail and the parties shall whenever necessary exercise all voting and other rights and powers available to them to procure the amendment, waiver or suspension of the relevant provision of the Byelaws to the extent necessary to permit each relevant JV Entity and its affairs to be administered as provided in this Agreement.

26. NO DISTRIBUTIONS DURING EXERCISE PERIODS

Each of the JV Entities agrees that it shall not, and Cosan and Shell shall use their Control of each of the JV Entities to ensure that no JV Entity shall, pay, make or declare any dividend or other distribution during any of the First Shell Call Option Exercise Period, the Second Shell Call Option Exercise Period, the Cosan Option Exercise Period, the Disqualification Put Option Exercise Period, the Disqualification Call Option Exercise Period, the Unsolicited Sale Exercise Period, the Cosan Fundamental Breach Option Exercise Period and/or the Shell Fundamental Breach Option Exercise Period.

27. TRANSFER OF SHARES

Each of the Downstream Co, the Management Co and the Sugar and Ethanol Co covenants to each of the other Parties that it shall not assist with the registration of, or allow to be registered, any transfer of its shares to any Person other than in accordance with the terms of this Agreement.

28. ENCUMBRANCES

28.1 Other than arising under this Agreement, and subject to Clause ‎28.2, until the day after which the Cosan Call Option expires, no Party shall create or permit to subsist any Encumbrance (other than a Permitted Encumbrance) over its interest in Cosan or the Joint Venture (or any part thereof).

28.2 Cosan Limited shall be permitted to encumber such portion of the Cosan Limited Interest that, upon foreclosure or enforcement of any such Encumbrances, Cosan Limited would not Transfer of its Control in Cosan.

28.3 If any Encumbrance (other than a Permitted Encumbrance and subject to Clause ‎28.2) over any Party's interest in Cosan Limited, Cosan or the Joint Venture (or any part thereof) arises by virtue of operation of law or otherwise for the benefit of any Governmental Authority (including in connection with the collection of Tax), such Party shall use reasonable efforts to offer assets other than those constituting its

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interest in any of Cosan Limited, Cosan or the Joint Venture (or any part thereof) as substitute security to such body, agency or department.

29. REORGANIZATIONS

29.1 No Reorganization with respect to the Joint Venture shall take place unless agreed between Cosan and Shell. In the event that any such Reorganization is proposed, the Parties shall amend this Agreement on the date of the Reorganization to reflect the changed structure of the Joint Venture contemplated by the proposed Reorganization in a manner agreed between the Parties.

29.2 No Reorganization with respect to Shell shall take place if such Reorganization results in a loss of Control by Royal Dutch Shell in the Joint Venture, other than in connection with a Transfer of the entire global downstream business of Royal Dutch Shell.

29.3 No Reorganization with respect to Cosan Limited or Cosan shall take place (including the merger of Cosan Limited into Cosan) if such Reorganization results in the loss of Control by ROSM, Cosan Limited and/or Cosan in the Joint Venture, other than with the prior written permission of Shell, which consent shall not be unreasonably withheld other than for business reasons as decided at Shell's sole discretion.  Upon completion of a merger of Cosan Limited into Cosan, Cosan undertakes, covenants and agrees to ensure that another Person assumes the obligations of Cosan Limited pursuant to the Transaction Documents.  The Parties agree that it is the intention of Cosan Limited and Cosan to seek to effect a Cosan Limited Collapse within 2 years of Closing, subject to receipt of the necessary written consent from Shell.

29.4 For the avoidance of doubt, no provision of this Agreement or any Transaction Document shall prevent or restrict a Transfer of Royal Dutch Shell itself.

30. CONFIDENTIALITY

30.1 Each Party agrees that it shall, and shall cause any Person to whom Confidential Information is disclosed pursuant to this Agreement to, hold strictly confidential all Confidential Information and treat all Confidential Information with the same degree of care and confidentiality that it affords its own trade secrets and proprietary information.  Each Party agrees to use Confidential Information received from any JV Entity only in connection with its investment in the Joint Venture and the transactions contemplated by the Transaction Documents, and for no other purpose, except as otherwise expressly permitted by the Transaction Documents or agreed between Cosan and Shell and the relevant JV Entity.  Each Party agrees that it shall be responsible for any breach of the provisions of this Clause ‎30 by any of its Representatives to whom it discloses Confidential Information.

30.2 No Party shall disclose any Confidential Information to any Person, except:

30.2.1 to its own Representatives in the normal course of the performance of their duties;

30.2.2 to the extent required by applicable law (including complying with any oral or written questions, interrogatories, requests for information or documents,

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subpoena, civil investigative demand or similar process to which a Party is subject; provided that, unless otherwise prohibited by law, such Party shall give the relevant JV Entity prompt notice of such request(s), to the extent practicable, so that such JV Entity may seek an appropriate protective order or similar relief (and the Party shall cooperate with such efforts by such JV Entity, and shall in any event make only the minimum disclosure required by such law));

30.2.3 subject to Clauses ‎12.2, ‎12.3 and ‎18.8 or as otherwise contemplated by this Agreement; or

30.2.4 to the extent required to comply with the rules and regulations of any regulatory authority to whose jurisdiction such Party or any of its Affiliates is subject (which may include the U.S. Securities and Exchange Commission, the Brazilian Comissão de Valores Mobiliários, the UK's Financial Services Authority, the Netherlands' Autoriteit Financiële Markten or any stock exchange).

SECTION TWELVE: GENERAL

31. NOTICES

31.1 Any communication to be made under or in connection with this Agreement shall be made in the English language, in writing and, unless otherwise stated, may be made by fax or via courier service. The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with this Agreement is identified with its name below. Any Party may substitute such address, fax number or department or officer by notifying the other Parties with not less than five days' notice.

(i) Cosan / Cosan Limited / Raizen Energia Participações S.A.

Cosan S.A. Indústria e Comércio / Cosan Limited

Avenida Presidente Juscelino Kubitschek, 1327

4 º andar

São Paulo – SP

CEP 04543-011

Brazil

Attention: General Counsel

Fax: +55 (11) 23446498

Raízen Energia  Participações S.A.

Avenida Presidente Juscelino Kubitschek, 1327

6 º andar

São Paulo – SP

CEP 04543-011

Brazil

Attention: General Counsel

Fax: +55 (11) 23446263

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Copy to:

(A)	Davis Polk & Wardwell LLP 450 Lexington Avenue New York, New York  10017 United States of America Attention: John Amorosi; Manuel Garciadiaz Fax: +1 (212) 701-5800
(B)	Barbosa Mussnich & Aragão Av. Presidente Juscelino Kubitschek, 1.455 - 10º andar CEP: 04543-011 - Itaim Bibi, São Paulo – SP Brazil Attention: Paulo Cezar Aragão; Daniela Soares Fax: +55 (11) 2179-4597

(ii) Raízen Combustíveis S.A./ Raízen S.A.

Raízen S.A.

Avenida Presidente Juscelino Kubitschek, 1327

6 º andar

São Paulo – SP

CEP 04543-011

Brazil

Attention: CEO and General Counsel

Fax +55 (11) 23446222

Raízen Combustíveis S.A.

Avenida das Américas, 4200

Blocos 5 & 6

Barra da Tijuca

Rio de Janeiro – RJ

CEP 22640-102

(iii) Shell Overseas Holdings Limited / Shell Brazil Holding B.V.

Shell Overseas Holdings Limited

c/o Shell Centre

4 York Road

London SE1 7NA

United Kingdom

Attention: Associate General Counsel, Downstream Portfolio

Fax: +44 (20) 7021 3023

Shell Brazil Holding B.V.

Carel van Bylandtlaan 30, 2596HR 's-Gravenhage,

The Netherlands

Attention: President

Fax: +44 (20) 7934 7509

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Copy to:

(A)	Clifford Chance Rua Funchal 418 - 15º andar 04551-060 São Paulo – SP Brazil Attention: Anthony Oldfield Fax: +55 (11) 3019 6001
(B)	Souza, Cescon, Barrieu & Flesch Advogados Rua Funchal, 418, 11º andar CEP: 04551-060 São Paulo, SP Brazil Attention: Marcos Flesch Fax: +55 (11) 3089-6565

Any communication or document made or delivered by one Person to another under or in connection with this Agreement will only be effective: (i) if by way of fax, when received in legible form; (ii) if by way of courier service, when the courier service has recorded successful delivery at that address; and (iii) if a particular department or officer is specified as part of its address details provided under Clause ‎‎31.1, if addressed to that department or officer.

32. TERM AND TERMINATION

32.1 Other than:

32.1.1 to the extent that they have been performed; and

32.1.2 where this Agreement provides otherwise,

the obligations contained in this Agreement remain in force after Closing.

32.2 This Agreement shall terminate and be of no further force or effect with respect to any Party where such Party ceases to own any JV Securities (as defined in the Shareholder Agreements); provided that Clauses ‎30 to ‎37 shall survive termination.

33. NO RIGHT OF RESCISSION

The Parties shall have no right to terminate this Agreement (unless otherwise expressly agreed by them), and any right of rescission is hereby waived and excluded by the Parties.

34. GENERAL

34.1 This Agreement (a) may be executed in any number of counterparts, each of which is an original and all of which together evidence the same agreement, and (b) will not come into effect until each Party has executed at least one counterpart.

34.2 A variation of this Agreement is valid only if it is in writing and signed by or on behalf of each Party.

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34.3 The failure to exercise or delay in exercising a right or remedy provided by this Agreement or by law does not impair or constitute a waiver of the right or remedy or an impairment of or a waiver of other rights or remedies. No single or partial exercise of a right or remedy provided by this Agreement or by law prevents further exercise of the right or remedy or the exercise of another right or remedy.

34.4 A Person who is not a Party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement, but this does not affect any right or remedy of a third party which exists or is available apart from that Act. Notwithstanding the foregoing provision, Clauses ‎10, ‎11, ‎12, ‎24, ‎33, ‎34, ‎35 and ‎37 confer a benefit on ROSM and, subject to Clauses ‎34.2 and ‎37, are intended to be enforceable by ROSM by virtue of the Contracts (Rights of Third Parties) Act of 1999.

34.5 Each of the Parties agrees to perform (or procure the performance of) all such acts and things and/or to execute and deliver (or procure the execution and delivery of) all such documents, as may be required by law or as may be necessary or reasonably requested by the other any of the other Parties for giving full effect to this Agreement and securing to each of the other Parties the full benefit of the rights, powers and remedies conferred upon them by this Agreement.  Unless otherwise agreed, each Party shall be responsible for its own costs and expenses incurred in connection with the provisions of this Clause ‎34.

34.6 Without prejudice to any other rights or remedies that the other Party may have, each Party acknowledges and agrees that damages alone would not be an adequate remedy for any breach of the terms of this Agreement. Accordingly, any Party shall be entitled, without proof of special damages, to the remedies of injunction, specific performance or other equitable relief for any threatened or actual breach of the terms of this Agreement.

34.7 The rights and remedies contained in this Agreement are cumulative and (subject to the other provisions of this Agreement) not exclusive of rights or remedies provided by law.

34.8 This Agreement and each document referred to in it constitute the entire agreement and supersede any previous agreement between the Parties relating to the subject matter of this Agreement (including the Memorandum of Understanding); provided that nothing in this Clause ‎34.8 shall invalidate the Contractually Binding Clauses (as defined in the Memorandum of Understanding).

34.9 Each Party acknowledges and represents that it has not relied on or been induced to enter into this Agreement by a representation, warranty or undertaking (whether contractual or otherwise) given by any of the other Parties other than as set out in this Agreement or each document referred to in it.

34.10 None of the Parties is liable to any of the other Parties (in equity, contract or tort (including negligence), under the Misrepresentation Act 1967 or in any other way) for a representation, warranty or undertaking that is not set out in this Agreement or any document referred to in this Agreement.

34.11 The Parties agree that no adviser to a Party to this Agreement shall have any liability

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to the other Parties (in equity, contract or tort (including negligence), under the Misrepresentation Act 1967 or in any other way) for a representation, warranty or undertaking that is not set out in this Agreement or any document referred to in this Agreement.

34.12 The Parties consider that the provisions contained in this Agreement are reasonable, but if any provision is found to be unenforceable but for any part of it being deleted or any period or area of application reduced such provision shall apply with such modification as may be necessary to make it valid and effective.

34.13 Nothing in this Clause ‎34 shall have the effect of limiting or restricting any liability arising as a result of any fraud, wilful misconduct or wilful concealment.

34.14 Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assigned or novated by any Party pursuant to the Transfer of such Party's interest in any JV Entity, other than the provisions of Clauses ‎3, ‎12, ‎13, ‎18, ‎19 and ‎25 to ‎37.

34.15 Nothing in this Agreement shall constitute a partnership or other co-operative entity between any of the Parties, or constitute any Party the agent of any other Party for any purpose.

35. GOVERNING LAW

This Agreement and all non contractual or other obligations arising out of or in connection with it are governed by English law.

36. GOVERNING LANGUAGE

This Agreement is drawn up in the English language. If this Agreement is translated into another language, the English language text prevails.

37. ARBITRATION

37.1 Any dispute (a "Dispute") arising from or connected with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement or the consequences of its nullity), will be referred to and finally resolved by arbitration under the Rules, which Rules are deemed to be incorporated by reference into this Clause ‎37.

37.2 The tribunal will consist of three arbitrators two of whom will be nominated by the respective parties, and the third, who shall act as chairman, shall be a national of a member state of the Organisation for Economic Co-operation and Development (except England or the Netherlands) and nominated by the other two arbitrators together (but failing agreement within 30 days of the appointment of the second arbitrator, the third arbitrator shall be appointed by the ICC). The seat of the arbitration will be São Paulo, Brazil, and the language of the arbitration will be English.

37.3 The parties agree that the arbitral tribunal will have power to award on a provisional basis any relief that it would have power to grant on a final award.

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37.4 Without prejudice to the powers of the arbitrator provided by the Rules, statute or otherwise, the arbitrator will have power at any time, on the basis of written evidence and the submissions of the Parties alone, to make an award in favour of the claimant (or the respondent if a counterclaim) in respect of any claims (or counterclaims) to which there is no reasonably arguable defence, either at all or except as to the amount of any damages or other sum to be awarded.

37.5 The parties agree to keep confidential all materials used in and all awards received as a result of any Dispute proceedings, except to the extent required to be disclosed by applicable law.

37.6 The Parties exclude any rights to refer points of law or to appeal to the courts, to the extent that they can validly waive these rights.

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SIGNATURES

THIS AGREEMENT has been signed and executed as a DEED by the Parties and is delivered by them on the date specified above.

COSAN

Executed as a DEED by

for and on behalf of	)
COSAN S.A. INDÚSTRIA	)
E COMÉRCIO	) /s/ Marcos Marinho Lutz
by	) /s/ Marcelo De Souza Scarcela Portela

Name: Marcos Marinho Lutz

Title:

Name: Marcelo De Souza Scarcela Portela

Title:

in the presence of
	Signature of witness
	Name of witness
	Address of witness
	Occupation of witness

- 68 -

COSAN LIMITED

Executed as a DEED by

for and on behalf of	)
COSAN LIMITED	) /s/ Rubens Ometto Silveira Mello
by	) /s/ Marcos Marinho Lutz

Name: Rubens Ometto Silveira Mello

Title:

Name: Marcos Marinho Lutz

Title:

in the presence of
	Signature of witness
	Name of witness
	Address of witness
	Occupation of witness

- 69 -

DOWNSTREAM CO

Executed as a DEED by

for and on behalf of	)
RAÍZEN COMBUSTÍVEIS S.A.	)
by	) /s/ Richard M. Oblath

Name: Richard M. Oblath

Title: Attorney in Fact

in the presence of

/s/ Nicholas Spurrell	Signature of witness
Nicholas Spurrell	Name of witness
Rua Funchal 418	Address of Witness
São Paulo
Solicitor	Occupation of witness

MANAGEMENT CO

Executed as a DEED by

for and on behalf of	)
RAÍZEN S.A.	)
by	) /s/ Richard M. Oblath

Name: Richard M. Oblath

Title: Attorney in Fact

in the presence of

/s/ Nicholas Spurrell	Signature of witness
Nicholas Spurrell	Name of witness
Rua Funchal 418	Address of Witness
São Paulo
Solicitor	Occupation of witness

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SHELL

Executed as a DEED by

for and on behalf of	)
SHELL BRAZIL HOLDING B.V. by	) )  /s/ Richard M. Oblath

Name: Richard M. Oblath

Title: Attorney in Fact

in the presence of

/s/ Nicholas Spurrell	Signature of witness
Nicholas Spurrell	Name of witness
Rua Funchal 418	Address of Witness
São Paulo
Solicitor	Occupation of witness

SHELL UK CO

Executed as a DEED by

for and on behalf of	)
SHELL OVERSEAS HOLDINGS LIMITED by	) ) ) /s/ Richard M. Oblath

Name: Richard M. Oblath

Title: Attorney in Fact

in the presence of

/s/ Nicholas Spurrell	Signature of witness
Nicholas Spurrell	Name of witness
Rua Funchal 418	Address of Witness
São Paulo
Solicitor	Occupation of witness

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SUGAR AND ETHANOL CO

Executed as a DEED by

for and on behalf of	)
RAÍZEN ENERGIA PARTICIPAÇÕES S.A.	)
by	) /s/ Pedro Izamu Mizutani /s/ Marcelo Eduardo Martins

Name: Pedro Izamu Mizutani

Title:

Name: Marcelo Eduardo Martins

Title:

in the presence of
	Signature of witness
	Name of witness
	Address of witness
	Occupation of witness

- 72 -

EX-4.7

Exhibit 4.7

OPERATING AND COORDINATION AGREEMENT

dated as of

June 1st , 2011

relating to

RAÍZEN ENERGIA PARTICIPAÇÕES S.A.

RAÍZEN COMBUSTÍVEIS S.A.

AND

RAÍZEN S.A.

TABLE OF CONTENTS

PAGE

ARTICLE 1

DEFINITIONS

Section 1.01. Definitions	5
Section 1.02. Other Definitional and Interpretative Provisions	11

ARTICLE 2

COORDINATION OF THE JOINT VENTURE

Section 2.01. Coordination Generally between the JV Entities	12
Section 2.02. Committees, Generally	12
Section 2.03. Tax Coordination Committee	12
Section 2.04. Roles and Responsibilities of Management Co	13
Section 2.05. Fees	13
Section 2.06. Shareholders	13

ARTICLE 3

GENERAL PRINCIPLES, STANDARDS, CODES OF CONDUCT AND PROCEDURES

Section 3.01. Policies and Procedures 13

ARTICLE 4

INCURRENCE OF INDEBTEDNESS; GUARANTEES; CURRENCY

Section 4.01. Funding of Joint Venture	14
Section 4.02. Funding from the Shareholders	14
Section 4.03. Cosan Guarantee of Debt	14
Section 4.04. Treasury Policy	15
Section 4.05. Currency	15
Section 4.06. Fiscal and Accounting Year	15

ARTICLE 5

INFORMATION; REPORTS; AUDITORS

Section 5.01. Information	16
Section 5.02. Reports	16
Section 5.03. Disclosure to Shareholders	17
Section 5.04. Shareholder Audit	18
Section 5.05. Auditors	18
Section 5.06. Withholding Competitively Sensitive Information	18

i

ARTICLE 6

INSURANCE

Section 6.01. Insurance Strategy	19
Section 6.02. Maintaining Insurance	19

ARTICLE 7

INTELLECTUAL PROPERTY

Section 7.01. Protection of JV Intellectual Property	19
Section 7.02. License Grants to Shareholders	19
Section 7.03. Grant-Backs to the JV Entities	20
Section 7.04. Other Rights Granted by Shell	21
Section 7.05. R&D Management Services	22

ARTICLE 8

ANNOUNCEMENTS

Section 8.01. Shareholders to Approve Announcements 22

ARTICLE 9

MISCELLANEOUS

Section 9.01. Binding Effect; Assignability; Benefit	22
Section 9.02. Confidentiality	23
Section 9.03. No Indirect Action	24
Section 9.04. Notices	24
Section 9.05. Waiver; Amendment	27
Section 9.06. Fees and Expenses	27
Section 9.07. Governing Language	27
Section 9.08. Governing Law	27
Section 9.09. Arbitration	27
Section 9.10. Specific Enforcement	28
Section 9.11. Fraud	28
Section 9.12. Counterparts	28
Section 9.13. Entire Agreement	28
Section 9.14. Severability	28
Section 9.15. Term; Termination	29

ii

Exhibit A	Joinder Agreement
Exhibit B	Cosan Guaranteed Debt

iii

OPERATING AND COORDINATION AGREEMENT

AGREEMENT dated as of  June 1, 2011 (this “Agreement”) among (i) Raízen Energia Participações S.A., a sociedade anônima organized and existing under the laws of Brazil, with administrative offices at Avenida President Juscelino Kubitschek, 1327, 6th floor - CEP 04543-011 - São Paulo, São Paulo enrolled with the Brazilian tax registry under 12.182.297/0001-32 (“Sugar and Ethanol Co”), (ii) Raízen Combustíveis S.A., a company organized and existingunder the laws of Brazil, with its head office at Avenida das Américas, 4200, Blocos 5 & 6, Barra da Tijuca, City of Rio de Janeiro, State of Rio de Janeiro, CEP 22640-102, Brazilenrolled with the Brazilian tax registry under No. 33.453.598/0001-23 (“Downstream Co ” and, together with Sugar and Ethanol Co, the “JV Entities” and each a “JV Entity”), (iii) Raízen S.A., a company organized and existing under the laws of Brazil, with its head office at Avenida Presidente Juscelino Kubistchek, 1327, 6o andar (part), City of Sao Paulo, State of Sao Paulo,CEP 04543-011, Brazil enrolled with the Brazilian tax registry under No. 10.773.432/0001-99 (the “Management Co”), (iv) Cosan S.A. Indústria e Comércio, a company organized and existing under the laws of Brazil, with its administrative office at at Avenida Presidente Juscelino Kubistchek, 1327, 4th floor(part), City of Sao Paulo, State of Sao Paulo,CEP 04543-011 enrolled with the Brazilian tax registry under No. 50.746.577/0001-15 (“Cosan”), (v) Cosan Distribuidora de Combustíveis Ltda, a company organized and existing under the laws of Brazil, with its head office at Fazenda Pau D'Alho, s/nº, Prédio Administrativo Cosan, in the City of Barra Bonita, State of São Paulo, CEP 17340-000, enrolled with the Brazilian tax registry under No. 50.746.577/0001-15 (“Cosan Downstream Holdco”), (vi) Shell Brazil Holding B.V., a company incorporated in the Netherlands (“Shell”) and (vii) with its head office at Avenida das Américas, 4200, Blocos 5, Barra da Tijuca, City of Rio de Janeiro, State of Rio de Janeiro, CEP 22640-102, Brazil, enrolled with the Brazilian tax registry under No. 11.296.069/0001-20 (“Shell S&E Holdco”). The terms “Cosan” and “Shell” shall each mean, if such entities or persons shall have Transferred any of their “JV Securities” to any of their respective “Permitted Transferees” (as such terms are defined below), those Persons and those Permitted Transferees, taken together, and any right, obligation or action that may be exercised or taken at the election of those Persons may be taken at the election of those Persons and those Permitted Transferees.

W I T N E S S E T H:

(A) Pursuant to the terms of the Framework Agreement (as defined below) Cosan and Shell agreed to establish the Joint Venture (as defined below) to combine certain of the assets of Cosan and Shell primarily in Brazil;

4

(B)Cosan and Shell have an equal economic interest in the Joint Venture and, as a general principle, Cosan and Shell will share the profits, losses, access to cash flows and economic interest of the Joint Venture on an equal basis;

(C)The Joint Venture comprises the Sugar and Ethanol Co which holds the sugar, ethanol, co-generation and certain other assets of the Joint Venture, the Downstream Co (as defined below) which holds the downstream and certain other assets of the Joint Venture, and the Management Co (as defined below) which forms the Joint Venture’s single face to the market and will facilitate the building of a unified corporate culture;

(D)The Joint Venture Agreement (as defined below) sets out certain options whereby Cosan or Shell may acquire the other’s interest in the Joint Venture, lock-up provisions and remedies for fundamental breaches of the documentation governing the establishment and operation of the Joint Venture;

(E)Shareholders’ Agreements (as defined below) in respect of each of the Sugar and Ethanol Co and the Downstream Co together govern the scope of the business of the Joint Venture, certain matters relating to governance (which shall be shared between Cosan and Shell equally), acquisitions, dividends and distributions, as well as the general principles that shall govern Cosan’s and Shell’s relationship as shareholders of the Sugar and Ethanol Co and Downstream Co; and

(F)The Parties desire to enter into this Agreement to set out certain terms relating to the coordination of the Sugar and Ethanol Co, the Downstream Co and the Management Co and to specify certain, principles, policies, targets and processes of the Joint Venture, including in respect of general business principles, sustainability principles, health, safety, security and environmental standards, a code of conduct for employees, operational procedures and indebtedness.

In consideration of the covenants and agreements contained herein and in the Framework Agreement, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.01. Definitions. (a) As used in this Agreement, the following terms shall have the following meanings:

“Affiliate” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of a Holding Company; provided that, for the purposes of this Agreement, no JV Entity shall beconsidered an Affiliate of any Shareholder.

5

“Beneficial Owner” means, in respect of a security, any Person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (a) voting power which includes the power to vote, or to direct the voting of, such security; and/or (ii) investment power which includes the power to dispose, or to direct the disposition of, such security; and each of the terms “Beneficially Own” and “Beneficially Owned” has a corollary meaning.

“Brazilian Corporation Law” shall mean Brazilian Federal Law no. 6,404 of December 15, 1976 (Lei Nº 6.404 de 15 de dezembro 1976).

“Business” has the meaning set forth in the S&E Shareholders’ Agreement and the Downstream Shareholders’ Agreement read together as one definition.

“Business Day” means a day other than a Saturday, Sunday or public holiday in São Paulo, Brazil.

“Business Plan” means the business plan for a five-year period relating to the Joint Venture, to be agreed by the Parties for adoption at Closing, and as renewed on an annual basis by the Supervisory Board in accordance with Annex D of the Shareholders’ Agreements.

“Byelaws” means the byelaws (estatuto social) of the Sugar and Ethanol Co or Downstream Co, as applicable, as amended from time to time.

“CEO” means chief executive officer.

“CFO” means chief financial officer.

“Closing” has the meaning set forth in the Framework Agreement.

“Closing Date” means the date of this Agreement.

“Codexis Sublicence Agreement” means a licence agreement relating to the sublicence of certain Codexis technology dated the date of this Agreement between Equilon Enterprises LLC dba Shell Oil Products US and the Sugar and Ethanol Co.

“Co-gen Products” means: (a) the steam and electricity generated from the inputs and by-products from the production of Sugar; (b) the feedstocks used for such co -generation; and (c) any related by-products resulting from such co-generation.

“Control” means the power of a Person (or Persons acting in concert) to secure that the affairs of a second Person are conducted, directly or indirectly, in

6

accordance with the wishes of the first Person (or first Persons acting in concert) whether by means of being the Beneficial Owner(s) of more than 50 per cent (or, in the case of Sugar and Ethanol Co., 50 per cent) of the issued share capital of or of the voting rights in the second Person, or having the right to appoint or remove a majority of the directors or otherwise control a majority of the votes at board meetings of the second Person by virtue of any rights attaching to securities held or powers conferred by the corporate byelaws (including any Contrato social or Estatuto social), shareholders’ agreement or any other document regulating theaffairs of the second Person; and “Controlled by” shall be construed accordingly.

“Downstream Shareholders’ Agreement” means the shareholders’ agreement in respect of the Downstream Co between Cosan and Shell entered into on the date of this Agreement.

“Ethanol” means ethanol and ethanol-based products, in each case, produced from sugarcane.

“Executive Board” means, as the context requires, the Executive Board of the Sugar and Ethanol Co as defined in the S&E Shareholders’ Agreement, the Executive Board of the Downstream Co as defined in the Downstream Shareholders’ Agreement or the executive board (diretoria) of the Management Co as specified in Section 2.04; and “Executive Boards” means more than one of them.

“Exit Date” means the date on which Cosan or Shell, as applicable, ceases to be a Shareholder of the relevant JV Entity.

“Exiting Shareholder” means Cosan or Shell, as applicable, after Cosan or Shell, as applicable, has ceased to be a Shareholder of the relevant JV Entity.

“Framework Agreement” means the Framework Agreement dated August 25, 2010 between Cosan, Cosan Downstream Holdco, Cosan Limited, the Downstream Co, Shell S&E Holdco, the Management Co, Shell Brazil Holding B.V., Shell Overseas Holdings Limited and Milimétrica Participações S.A.

“Governmental Authority” means any international, supranational or national government, any state, provincial, local or other political subdivision thereof, any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions (including functions relating to the imposition, management and collection of Taxes) of or pertaining to government, including any government authority, agency, department, board, commission or instrumentality of any nation or jurisdiction or any political subdivision thereof or any court.

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“Holding Company” means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.

“Intellectual Property” means any and all intellectual property rights, whether registered or not (including all registrations and pending applications for registration of such rights and the right to apply for registration or extension of such rights), including (i) patents, petty patents, utility models and design patents, (ii) registered and unregistered industrial designs, (iii) rights in knowhow, unpatented inventions, formulae, processes, technology (including software), technical documentation and information (including copyrights in any of the foregoing), (iv) database rights and (v) any rights of the same or similar effect or nature as any of the foregoing anywhere in the world. Notwithstanding the foregoing, Intellectual Property shall not include any trade marks, trading names, service marks, logos, the get up of products and packaging, geographical indications and applications, internet domain names or any other signs used in trade (including goodwill associated with any of the foregoing).

“Joint Venture” means the Sugar and Ethanol Co, the Downstream Co, the Management Co and their Subsidiaries, considered together.

“Joint Venture Agreement” means the joint venture agreement dated the date of this agreement, between Cosan, Cosan Downstream Holdco, Cosan Limited, the Downstream Co, Shell S&E Holdco, the Management Co, Shell, Shell Overseas Holdings Limited and Milimétrica Participações S.A.

“JV Securities” means: (i) the common and preferred shares of the Sugar and Ethanol Co, the Downstream Co and the Management Co held (directly or indirectly) by Cosan and Shell; (ii) any other equity or equity-linked security issued from time to time by the Sugar and Ethanol Co, the Downstream Co and the Management Co; and (iii) any options, warrants, or other rights to acquire any of the foregoing securities.

“Key Policies” means the “General Business Principles”, “Sustainable Development and HSSE Principles”, the “Employee Code of Conduct” and the “HR Principles”, as existing and having been adopted by the Sugar and Ethanol Co from time to time.

“Iogen Energy ” means Iogen Energy Corporation, a company incorporated in Canada, whose registered office is at 310 Hunt Club Road East, Ottawa, Ontario K1V 1C1 and whose corporation number is 2668998.

“Iogen Sublicence Agreement” means a licence agreement relating to the sublicence of certain Iogen technology dated the date of this Agreement between Shell Chemicals Canada Limited and the Sugar and Ethanol Co.

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“Parties” means the parties to this Agreement.

“Permitted Transferees” means any person to whom or which Cosan or Shell is permitted to transfer its interest, whether directly or indirectly, in the Joint Venture, pursuant to the Joint Venture Agreement.

“Person” means an individual, corporation (including a Brazilian sociedade anônima), limited liability company (including a Brazilian sociedade limitada), partnership, association, trust or other entity or organization (whetheror not Brazilian), including any type of Brazilian sociedade empresária and sociedade simple or any other entity regulated by Articles 40-69 of the BrazilianCivil Code, and including a governmental authority or political subdivision or an agency or instrumentality thereof.

“Qualifying Accounting Firm” means any of, or any Affiliate of or firm formally associated with, PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young, KPMG, Grant Thornton International or BDO International, or such other accounting firm as may be agreed between Cosan and Shell.

“ROSM” means Rubens Ometto Silveira Mello, a Brazilian citizen with commercial address at Avenida Presidente Juscelino Kubitschek, 1327, 4th floor, São Paulo, State of Sao Paulo, ZIP CODE 04543-011, Brazil. “S&E Shareholders’ Agreement” means the shareholders’ agreement in respect of theSugar and Ethanol Co between Cosan and Shell entered into on the date of this Agreement.

“Shareholder” means, at anytime, any Person (other than the JV Entities) who shall then be a party to or bound by this Agreement for so long as that person Beneficially Owns any JV Securities.

“Shareholders’ Agreements” means the Downstream Shareholders’ Agreement and the S&E Shareholders’ Agreement.

“Subsidiary” means, in relation to any Person, a Person (a) which is Controlled, directly or indirectly, by the first mentioned Person; (b) more than half the issued share capital of which is Beneficially Owned, directly or indirectly by the first mentioned Person; or (c) which is a Subsidiary of another Subsidiary of the first mentioned Person.

“Sugar” means sugar and sugar by-products, in each case, produced from sugarcane.

“Supervisory Board” means, as the context requires, the Supervisory Board (as defined in the S&E Shareholders’ Agreement) of the Sugar and Ethanol Co, the Supervisory Board (as defined in the Downstream Shareholders’

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Agreement) of the Downstream Co, the supervisory board (conselho de administração) of the Management Co as provided pursuant to Section 2.04 or allof them.

“Transaction Document” has the meaning set forth in the Framework Agreement.

“Transfer” means, with respect to any JV Securities: (a) when used as a verb, to sell, assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise transfer any JV Securities or any participation or interest therein, whether directly or indirectly (including pursuant to a derivative transaction), or agree or commit to do any of the foregoing; and (b) when used as a noun, a direct or indirect sale, assignment, disposition, exchange, pledge, encumbrance, hypothecation, or other transfer of any JV Securities or any participation or interest therein or any agreement or commitment to do any of the foregoing.

(b) Each of the following terms is defined in the Section set forth opposite that term:

Term	Section
Agreement	preamble
Applicable Project	7.04(a)
Cosan	preamble
Cosan Downstream Holdco	preamble
Cosan Guaranteed Debt	4.03
Dispute	9.09(a)
Downstream Co	preamble
External Auditors	5.05
Joinder Agreement	Exhibit A
Joining Party	Exhibit A
JV Entity	preamble
JV IP	7.02(a)
JV Project	7.05(b)
Management Co	preamble
Minimum Threshold Investment	7.04(a)
MOU	9.13
Operating and Coordination Agreement	Exhibit A
RI Strategy	6.01
Rules	9.09(a)
Shell	preamble
Shell S&E Holdco	preamble
Sugar and Ethanol Co	preamble
Tax Coordination Committee	2.02
Term	9.15

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Section 1.02.  Other  Definitional  and  Interpretative  Provisions. A reference to a statutory provision (including, in Brazil, a provision of a Lei Ordinária, Lei Complementar, Decreto, Decreto-Lei, Medida Provisória and anyother law under Brazilian law), includes a reference to: (a) the statutory provision as modified or re-enacted or both from time to time (whether before or after the date of this Agreement); and (b) any subordinate legislation made under the statutory provision by any Person (whether before or after the date of this Agreement). A reference to a “regulation” includes any regulation, rule, official directive, request, guideline, portaria, regulamento, decreto, resolução, deliberação, circular, carta-circular, instrução, instrução normativa , regimento, ato declaratório and/or despacho normativo (whether or not having the force oflaw) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organization. The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Annexes, Articles, Sections, Exhibits and Schedules are to Annexes, Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified. All Annexes, Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Annex, Exhibit or Schedule but not otherwise defined therein, shall have the meaning set forth in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; provided that with respect to any agreement or contract listed on any schedules hereto, all such amendments, modifications or supplements must also be listed in the appropriate schedule. References to “Persons acting in concert” means, in relation to a Person, Persons which actively co-operate, pursuant to an agreement or understanding (whether formal or informal) with a view to obtaining or consolidating Control of that Person. References to “he” or “him” shall be deemed to refer, in addition, to “she” and “her”, respectively. References from or to any date mean, unless otherwise specified, from and including and to but excluding, respectively and a time of day is a reference to São Paulo, Brazil time. References to “company”, “corporation” or “entity” include a reference to any business entity (of whatever form) in any jurisdiction (including Brazilian sociedades empresárias and

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sociedades simples). Italicized terms in parenthesis denote the Portugueselanguage words for names, concepts and other terms applicable in Brazil.

ARTICLE 2

COORDINATION OF THE JOINT VENTURE

Section 2.01. Coordination Generally between the JV Entities. The JV Entities shall act as if they were one company, with the Supervisory Board of each entity acting as an integrated supervisory board and the Executive Board of each entity acting as an integrated executive board. The Shareholders and the JV Entities have agreed that, subject to compliance with applicable laws, the Supervisory Board and the Executive Board of the JV Entities shall be identical in constitution, role and powers, and those boards shall operate in a harmonized manner consistent with all applicable law.

Section 2.02. Committees, Generally. Where the Shareholders’ Agreements provide for identical committees of the Supervisory Boards of the Downstream Co and the Sugar and Ethanol Co, the respective committees of the two Joint Venture entities shall be comprised of the same members and shall act as if they were one committee.

Section 2.03. Tax Coordination Committee. The Parties shall form a tax coordination committee to be comprised of a senior person charged with tax matters for the Joint Venture and a representative from each of Cosan and Shell (the “Tax Coordination Committee”). The Tax Coordination Committee will be responsible for calculating the direct and indirect costs and benefits of, providing reports and recommendations to the Supervisory Boards based on the principles prescribed in Section 9.01 of the Shareholders’ Agreements in relation to: (a) the payment of Distributions (as defined in the Shareholders’ Agreements) relating to goodwill and net operating loss carry-forwards contributed by Cosan and Shell to the JV Entities; and (b) whether the payment of any distributions should be by way of dividend or interest on capital and whether any inter-Shareholder payments will be required under, and in accordance with the provisions of, Section 9.01 of the Shareholders’ Agreements to make whole any Shareholder that is materially adversely effected by the payment of interest on capital. In performing the foregoing analysis as to whether a distribution should be made by way of dividend or interest on capital, the Tax Coordination Committee shall take into account the relative benefits and disadvantages of each form of distribution to each Shareholder, both directly and indirectly (including the impact on the Joint Venture) and their respective equity interests therein, all as further set forth in Section 9.01 of the Shareholders’ Agreements. The Tax Coordination Committee shall also be responsible for providing recommendations to the Supervisory Board for settling Tax consequences of indemnity payments as prescribed in Section 13.2 of the Framework Agreement.

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Section 2.04. Roles and Responsibilities of Management Co. The Management Co shall act as the public face to the market, media and investors for the JV Entities. Unless otherwise agreed by each of the Executive Boards, any announcement, briefing, broadcast, communication, publication or statement by the Joint Venture to the public (including to the media, governmental authorities or regulators and any body of investors) will be made in the name of, and by, the Management Co. Until amended or as otherwise agreed between the Shareholders, the JV Entities shall act in such a manner so as to use the Management Co to form a unified culture for the Joint Venture as a whole and to foster integration and common practices between the Sugar and Ethanol Co and the Downstream Co, in accordance with the applicable Business Plan. For the avoidance of doubt, in no event shall Management Co have any authority whatsoever to bind any JV Entity or to make any expenditures of any sort on behalf of any JV Entity, other than with the prior written consent of both of Cosan and Shell. The Management Co shall have a supervisory board (conselho de administração) and an executive board (diretoria) comprised of the same peopleappointed to the Executive Board and Supervisory Board of the Downstream Co and the Sugar and Ethanol Co.

Section 2.05. Fees. The Sugar and Ethanol Co and the Downstream Co shall fund all fees, costs and expenses, if any, of the Management Co in equal proportions; provided that the fees, costs and expenses of Management Co shall be limited to those expenses contemplated in the then current annual budget for the Joint Venture (and otherwise no more than US$50,000) and any additional expenses approved by the Supervisory Board.

Section 2.06. Shareholders. Cosan and Shell shall procure that each JV Entity shall do all the things required of such JV Entity pursuant to this Agreement; provided that, for the avoidance of doubt, in no event shall any breach or alleged breach of this Section 2.06 give rise to either a Fundamental Breach (as defined in the Joint Venture Agreement) or any liability whatsoever on the part of any Shareholder for any breach by any JV Entity of any of its obligations under this Agreement, and neither Cosan nor Shell shall assert or seek to assert to the contrary.

ARTICLE 3

GENERAL PRINCIPLES, STANDARDS, CODES OF CONDUCT AND PROCEDURES

Section 3.01. Policies and Procedures. Each JV Entity shall ensure that it conducts its business and affairs in accordance with applicable law and the Key Policies.

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ARTICLE 4

INCURRENCE OF INDEBTEDNESS; GUARANTEES; CURRENCY

Section 4.01. Funding of Joint Venture. (a) The Sugar and Ethanol Co and the Downstream Co shall seek any external financing, to the extent the Supervisory Board deems appropriate, as if they were one entity (where consistent with applicable law).

(b) The Sugar and Ethanol Co and the Downstream Co shall provide financial support to each other, including by way of advancing funds to each other and guaranteeing each other’s debt obligations and, in each case where approved by the Supervisory Board and where consistent with applicable law and the applicable Business Plan.

Section 4.02. Funding from the Shareholders. (a) Save as provided in the Shareholders’ Agreements, the Shareholders agree that the Joint Venture as a whole shall be financially autonomous and not dependent on cash contributions by either Cosan or Shell for its operations or growth and unless otherwise agreed by the Shareholders, neither Cosan nor Shell shall be required to provide, directly or indirectly, any support (including parent company guarantees or other financial support) for the funding requirements of the JV Entities.

(b) If Cosan and Shell consider that the provision of parent company guarantees would be advantageous, and if both Cosan and Shell agree in writing to provide any such guarantees, they shall do so in proportion to their ownership interest in the Joint Venture at such time, but if either Cosan or Shell is unable or unwilling to provide a guarantee (after having so agreed) that the other party provides (subject to the mutual agreement of both such parties), the other party shall be compensated in a manner to be agreed at that time.

Section 4.03. Cosan Guarantee of Debt. With respect to the debt set forth in Exhibit B (the “Cosan Guaranteed Debt”), Cosan and Shell shall (i) use, and shall cause the JV Entities to use, their respective reasonable endeavors, to secure the release of Cosan and/or its assets from any guarantees or pledges for which Cosan remains liable or to which any of Cosan’s asset are subject after the Closing Date (or to minimize the extent to which it may be so liable or its assets may be so subject) and (ii) take no action, and shall cause the Executive Boards, the Supervisory Board, the Downstream Co and/or the Sugar and Ethanol Co to refrain from taking any action, which would prevent and/or interfere with the release of Cosan and/or its assets from any Cosan Guaranteed Debt or the repayment of the Cosan Guaranteed Debt at the respective maturities thereof.

(b) In the event that the Downstream Co or the Sugar and Ethanol Co defaults on any Cosan Guaranteed Debt in accordance with its terms and Cosan or any of its Affiliates repays such Cosan Guaranteed Debt and/or performs its

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obligations under the corresponding guarantee, Shell shall, so long as it is a Shareholder at the time of such default, promptly pay, upon reasonable notice, to Cosan or any of its Affiliates 50% of any such payments made in respect of the principal and accrued interest of such Cosan Guaranteed Debt. Such notice shall include the details of any such payment and the terms to the debt to which it relates (including the maximum amount and maximum time period for which Shell will be liable).

Section 4.04. Treasury Policy. The JV Entities shall maintain a treasury policy which shall be endorsed by the Executive Board of each JV Entity which shall take into consideration the recommendations of the Finance Committee (as defined in the Shareholders’ Agreement), and such policy shall be reviewed bi-annually or when the circumstances in the Joint Venture changes materially. The policy shall:

(a) set out the relevant authorities for all borrowing, banking and investing activities as well as policies for determining the capital and financing structures, cash and risk management requirements and any controls framework required by law or regulation;

(b)confirm, in accordance with the Byelaws of the Downstream Co and the Sugar and Ethanol Co, the equity and dividend policy with specific gearing polices relating to all forms of external debt, rating processes, guarantees and the utilization of cash surpluses;

(c)specify policies relating to bank mandates and facilities, counterparty evaluation, financial advisors and business continuity plans;

(d)  address risk exposure management and the use of derivatives; and

(e)set out performance management procedures and the scope of treasury controls reviews.

Section 4.05. Currency. The currency utilized by each of the JV Entities for the purpose of economic and financial assessment, evaluation and reporting shall be the Brazilian Real.

Section 4.06. Fiscal and Accounting Year. The Parties and the JV Entities shall use their reasonable efforts to ensure that the fiscal and accounting year (exercicio social) of each JV Entity shall commence on January 1st of each calendar year by January 1, 2012 and in any case shall ensure that this is the case on January 1, 2013 if approved by a majority of the Supervisory Board. In the event that any fiscal and accounting year of any JV Entity does not commence on January 1st, the Parties shall ensure that such JV Entity shall hire the External Auditors to perform an additional audit in relation to its accounts for each

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financial year from (a) the date hereof to December 31st of this year and (b) from January 1st to December 31st in each subsequent year, in each case, within a scope to be determined by Shell (acting reasonably).

ARTICLE 5

INFORMATION; REPORTS; AUDITORS

Section 5.01. Information. Each of the JV Entities shall ensure that proper books and accounts are kept regarding all transactions entered into by it. Records of assets shall be compared and reconciled with existing assets at reasonable intervals and appropriate action taken in relation to any differences. All records of each JV Entity shall be retained for period of at least six years from the end of the year to which such record relates or such longer period as required by applicable law.

Section 5.02. Reports. Subject to Section 5.06, the JV Entities will provide to each of Cosan and Shell concurrently (for so long as they remain Shareholders), the following in respect of itself and on a consolidated basis incorporating any Subsidiaries:

(a)on a monthly basis, within 9 Business Days of the end of the month to which it relates, a high-level commentary providing an overview of agreed metrics including those in relation to revenues, costs, cash-flow, key performance indicators and any unusual activity, and on a quarterly basis, a report, within 15 Business Days of the end of the quarter to which it relates, showing, inter alia, the revenues, operating results, overall results and relevant cash flow information on a quarterly and year-to-date basis and performance compared to the applicable Business Plan; and such quarterly reports shall also describe the status of the implementation of the Joint Venture’s strategy, progress towards realizing synergies, and major projects as set out in the applicable Business Plan and update details of projected capital requirements;

(b)draft accounts of the Joint Venture for each month (in normal circumstances within 5 Business Days of the end of the period to which they relate);

(c)within 30 days after the end of each of the first three fiscal quarters of the Joint Venture, the unaudited consolidated balance sheet of the Joint Venture (subject to a limited review (revisão limitada) by the External Auditors) as at the end of such quarter and the related unaudited statement of operations and cash flow for such quarter and for the portion of the fiscal year then ended, in each case prepared in accordance with the accounting policies and principles then being applied by the Joint Venture;

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(d) audited accounts of the Joint Venture for each financial year promptly following their preliminary approval by the Supervisory Board (and which will be formally submitted to the Shareholders for approval);

(e)in respect of each annual accounting period, a management letter from the External Auditors setting out any material control weaknesses on the part of the Joint Venture identified during the audit process, or if there are none, stating that that is the case (delivered concurrently with the External Auditors’ certificate relating to the audited accounts for the relevant accounting period);

(f)a draft annual budget and Business Plan before the start of each financial year; and

(g)a forecast for the financial results, including operating results and cash-flow for the current fiscal year and the applicable quarter, within 10 Business Days of the second month of each quarter.

The accounts referred to in this Section 5.02 shall comprise at least a cash flow statement, a profit and loss account and a balance sheet and shall be prepared by the Joint Venture and audited by the External Auditors in accordance with applicable law and generally accepted accounting principles including, to the extent practicable after 2011, the International Financial Reporting Standards (IFRS) as adopted by the International Accounting Standards Board as adopted by the Brazilian Federal Council of Accountants (Conselho Federal de Contabilidade) and/or the Accounting Statements Committee (Comitê de Pronunciamentos Contábeis).

Section 5.03. Disclosure to Shareholders. Subject to Section 5.06, each of the JV Entities will provide to each of Cosan and Shell (for so long as they remain Shareholders) access to its books, records and other information at such time as may reasonably be requested. Each member of each Supervisory Board is irrevocably authorized by all relevant JV Entities (and the Shareholders shall cause the JV Entities to make such authorizations) to disclose any information or records belonging to or concerning such JV Entity and the Joint Venture, its affiliates or its or their business and assets to any Shareholder (for so long it remains a Shareholder) who has nominated him and to that Shareholder’s affiliates; provided that (a) such information and records are also provided or otherwise made available to the other Shareholders, (b) following such disclosure the relevant information and records shall be held in compliance with Section 6.02 of this Agreement and (c) such access shall be granted in a manner that does not unreasonably interfere with the conduct of the business of the Joint Venture or the performance of the obligations to the Joint Venture of its executives, senior managers and employees.

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Section 5.04. Shareholder Audit. Subject to Section 5.06, Cosan and Shell shall have the right of access to and audit of the JV Entities (and any Subsidiaries thereof), including to ensure that the policies of the JV Entities, as approved by the Supervisory Board, are being observed. Accordingly, each of Cosan and Shell (or its designated representatives) shall be entitled, in its discretion, not more than once every calendar year on not less than 30 days’ notice, at its own cost and expense, and at any additional time on not less than 30 days’ notice, to audit the books, records, operations or any aspect of the business of the Joint Venture in respect of any calendar year or part thereof; provided that (i)  such right is exercised within 24 months of the end of such calendar year and (ii)Cosan or Shell (as the case may be) observes the provisions of Section 6.02 of this Agreement and shares the results of such audit with the other party. Each JV Entity shall provide access during normal working hours of the Joint Venture to each of Cosan and Shell and its representatives to all information, assets, operations and premises of the Joint Venture necessary to give effect to this audit right and to such facilities, services and equipment reasonably necessary to give effect to such right. Any such audit shall only be conducted (x) in a manner that does not unreasonably interfere with the conduct of business of the Joint Venture or the performance of the obligations to the Joint Venture of its executives, senior managers and employees and (y) at the cost and expense of the party requesting that audit.

Section 5.05. Auditors. The JV Entities shall appoint as external auditors one of the Qualifying Accounting Firms as determined by the JV Entities (the “External Auditors”). Such appointment shall be made in accordance with applicable law including any legal or regulatory provisions restricting the appointment of firms who provide or have provided other services to the Joint Venture. The initial External Auditors shall be selected by competitive bidding process pursuant to which the Qualifying Accounting Firms will be asked to submit bids to the Shareholders and the JV Entities, with the initial External Auditors to be selected by the Shareholders and the JV Entities based on their determination as to which Qualifying Accounting Firms has offered the most attractive proposition.

Section 5.06. Withholding Competitively Sensitive Information. Notwithstanding anything in this Agreement that may be deemed to the contrary, none of the Sugar and Ethanol Co, the Downstream Co, the Management Co or any of their respective directors or officers shall provide or discuss any competitively sensitive information to or with any Shareholder, any director, officer or employee of any Shareholder or any Supervisory Board member if doing so would (i) present a conflict of interest in respect of the interests of the relevant Shareholder, (ii) risk placing the Sugar and Ethanol Co in a potentially competitively disadvantaged position or (iii) reasonably be expected to violate applicable antitrust or competition laws.

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ARTICLE 6

INSURANCE

Section 6.01. Insurance Strategy. Each JV Entity shall prepare, with assistance from the Shareholders, and submit to the Supervisory Board for annual approval, a Risk and Insurance Strategy (“RI Strategy”) for the operations of each JV Entity.

Section 6.02. Maintaining Insurance. Each JV Entity shall obtain and maintain, all insurance coverage as may be required by any applicable law, rule or regulation and such other insurance coverage as is determined by the Executive Board from time to time in accordance with the agreed RI Strategy. All insurances shall be placed with reputable underwriters, reinsured if applicable, having a financial strength reasonably satisfactory in all respects to the satisfaction of the Executive Board. All policies of insurance maintained by each JV Entity, shall contain a clause stating that they are primary to, and non-contributing with, any other policies of the relevant Shareholders.

ARTICLE 7

INTELLECTUAL PROPERTY

Section 7.01. Protection of JV Intellectual Property. Each JV Entity shall protect its Intellectual Property in such a way as it considers appropriate in its reasonable business judgment. Notwithstanding the foregoing, as part of the quarterly reports to be prepared by the JV Entities and provided to Cosan and Shell pursuant to Section 5.02(c), each JV Entity shall set out details of any material Intellectual Property it has developed since the preceding quarterly report was prepared (and, in the case of the first quarterly report, since the date of the formation of the Joint Venture). Within thirty (30) days following each quarterly presentation, the Shareholder Representatives (or their delegates) shall meet with the JV Entities at their mutual convenience to consider whether any Intellectual Property so specified as having been developed (to the extent owned by a JV Entity) should be registered with any authority in any jurisdiction and the Shareholder Representatives (or their delegates) may decide to recommend that the appropriate JV Entity register such rights to the extent they have not yet been registered.

Section 7.02. License Grants to Shareholders. (a) Each JV Entity hereby grants to each of Cosan and Shell a non-exclusive, worldwide, royalty-free, fully paid-up, freely sublicensable, freely transferable, unrestricted licence to all Intellectual Property developed by or on behalf of such JV Entity (in each case only during the period Cosan or Shell, as applicable, is a Shareholder) to the extent that such Intellectual Property is licensable or sublicensable by such JV Entity in accordance with the foregoing grant (such Intellectual Property being

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“JV IP”). With respect to any Intellectual Property (i) that is to be developed by a third party on behalf of any JV Entity and/or (ii) the development of which by or on behalf of any JV Entity is to be funded in whole or in part by any third party, the applicable JV Entity shall use its commercially reasonable endeavors to secure from such applicable third party the right and ability to pass licences of such Intellectual Property through to Cosan and Shell in accordance with the terms and conditions of this Section 7.02(a) (but subject to any relevant restrictions or other terms and conditions imposed by such third party); provided that such JV Entity shall not be required to secure such rights if doing so would cause the terms and conditions of such JV Entity’s arrangements with such third party to be less favorable to such JV Entity.

(b) Notwithstanding anything in Section 7.02(a) to the contrary, the licences granted to Cosan and Shell under Section 7.02(a) shall (i) be subject to the non-competition restrictions set out in Section 8.02 of each of the Shareholders’ Agreements, (ii) be perpetual and irrevocable, and (iii) survive Cosan or Shell, as applicable, becoming an Exiting Shareholder (but only with respect to such JV IP developed prior to the applicable Exit Date).

Section 7.03. Grant-Backs to the JV Entities. (a) Each of Cosan and Shell, on behalf of itself and its Affiliates, hereby grants to each JV Entity a perpetual, irrevocable, non-exclusive, worldwide, royalty-free, fully paid-up, freely sublicensable, freely transferable, unrestricted licence to any and all improvements to any JV IP of such JV Entity, which improvements are developed by or on behalf of Cosan or Shell, as applicable, or any of their respective Affiliates or direct or indirect sublicensees, as applicable, in each case to the extent that such improvements have application within the scope of the Business. For the avoidance of doubt, the grant-back licences to the JV Entities under this Section 7.03(a) shall be limited to improvements made to JV IP licensed to Cosan and Shell under Section 7.02.

(b) At a JV Entity’s option, such JV Entity shall have the right to make written, telephonic or other inquiries to Cosan and/or Shell, as applicable, regarding any improvements covered by the grants set forth in Section 7.03(a) and, on a JV Entity’s written request, Cosan and/or Shell, as applicable, shall provide sufficient information to enable the practice of any such improvements. Cosan and/or Shell, as applicable, shall make reasonable efforts to respond to those inquiries in a manner that reasonably enables the applicable JV Entity to practice the licences granted under Section 7.03(a). Not more than once per calendar half year (unless otherwise agreed by the Parties), each JV Entity shall have the right to request a review meeting with Cosan and/or Shell, as applicable, to discuss any improvements licensed to such JV Entity under Section 7.03(a). For the avoidance of doubt, the assistance provided under this Section 7.03(b) shall be provided at no cost to the JV Entities.

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Section 7.04. Other Rights Granted by Shell.

(a) Co-Investment Right. With respect to any current or futuretechnology development projects undertaken by Shell or any of its Affiliates (in each case whether alone or with third party research partners) related to the production of Sugar, Ethanol and/or Co-Gen Products (each such project being an “Applicable Project”), Sugar and Ethanol Co shall have a right of co-investment. On an Applicable Project-by-Applicable Project basis, Shell, acting reasonably and in good faith, shall offer Sugar and Ethanol Co a right to fund all or part of such Applicable Project. As long as Sugar and Ethanol Co funds up to a certain minimum threshold amount, to be mutually determined between Shell and Sugar and Ethanol Co on an Applicable Project-by-Applicable Project basis (the “Minimum Threshold Investment”), then Sugar and Ethanol Co shall enjoy full use and enjoyment, within the scope of the Business, of any and all technology and other Intellectual Property arising from such Applicable Project, on at least as favorable terms and conditions as enjoyed by Shell and/or its Affiliates with respect to such technology and/or other Intellectual Property. Notwithstanding the foregoing, the Parties acknowledge that, in each case, the Minimum Threshold Investment (i) shall represent an equitable allocation of funds as between Sugar and Ethanol Co and Shell (and its Affiliates), taking into account the anticipated benefit of the technology and/or other Intellectual Property to each of them based upon such factors as the territorial application of such technology and/or other Intellectual Property and the extent to which such technology and/or other Intellectual Property may be used both inside and outside of the Business, and (ii) shall not be greater than the amount to be invested by Shell and its Affiliates. Notwithstanding anything in this Section 7.04(a) to the contrary, for the avoidance of doubt, this Section 7.04(a) shall not apply to any projects which fall within the scope of Section 7.09 of the S&E Shareholders’ Agreement. For the avoidance of doubt, to qualify as an Applicable Project, the technology must relate primarily to the derivation of ethanol from Sugar; where a project relates primarily to the production of cellulosic ethanol from a feed material that is not derived from Sugar, the project shall not qualify as an Applicable Project.

(b) Additional Licences. With respect to any Intellectual Propertyowned or licensable by Shell or any of its Affiliates, which Intellectual Property is related to the production of Sugar, Ethanol and/or Co-Gen Products but to which the JV Entities do not otherwise have a licence or right to use, Shell and/or its Affiliates shall, upon the request of the applicable JV Entity, grant a licence in respect of such Intellectual Property to such applicable JV Entity, for use within the scope of the Business, on reasonable and non-discriminatory (RAND) terms and conditions (which in no event shall be any less favorable to such JV Entity than the most favorable terms and conditions granted by Shell and/or its Affiliates to any third party).

21

Section 7.05. R&D Management Services. With respect to any research and development project (a) funded by any JV Entity without Shell or any of its Affiliates as a co-investor (whether such project is funded by such JV Entity alone or co- funded with one or more third parties other than Shell or any of its Affiliates) or (b) co-funded with Shell and/or any of its Affiliates but where such JV Entity (alone or together with one or more third parties other than Shell and/or any of its Affiliates) funds greater than fifty percent (50%) of the cost of such project (each such project described in clause (a) or (b), being a “JV Project”), in each case such JV Entity shall have the option, but not the obligation, to have the alternative energies business of Shell or its Affiliates manage such JV Project at no cost to the JV Entities; provided that, at any time (with 90 days’ written notice to Shell) the relevant JV Entity may revoke the exercise of such right and may recover control of the management and oversight of such JV Project. For the avoidance of doubt, with respect to any JV Project whose cost is funded fifty percent (50%) or more by Shell or any of Shell's Affiliates, Shell (or an Affiliate of Shell as Shell elects) shall have the right to manage such JV Project in its sole discretion at no cost to the JV Entities.

ARTICLE 8

ANNOUNCEMENTS

Section 8.01. Shareholders to Approve Announcements. If any JV Entity wish to make any announcement relating to any (a) acquisition, disposal, issue or redemption of capital, (b) material change in policy, procedures or business activity, (c) financial results or projections, or (d) any other matter which may reasonably be expected to have a material affect on the public or market perception of, or to have any material financial impact on, Cosan or Shell, any such announcement must be in a form substantially agreed by Cosan and Shell unless otherwise required by Law or any competent judicial or applicable regulatory authority, including without limitation, any securities commission, competition authority and stock exchange; provided that Cosan and Shell are afforded an opportunity to agree in advance the form of the announcement wherever practicable and provided further that when any JV Entity makes an announcement such JV Entity shall provide a copy of such announcement to Cosan and Shell as soon as practicable after the making of such announcement.

ARTICLE 9

MISCELLANEOUS

Section 9.01. Binding Effect; Assignability; Benefit. (a) This Agreement shall inure to the benefit of and be binding upon the Parties and their respective heirs, successors, legal representatives and permitted assigns. Any Shareholder

22

that ceases to Beneficially Own at least one JV Security shall cease to be bound by the terms hereof (other than the provisions of Sections 7.02 and 7.03 and Article 9).

(b)Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by any Party pursuant to any Transfer of JV Securities or otherwise, except that: (i) any Permitted Transferee acquiring JV Securities or a Person acquiring JV Securities from any Shareholder in a Transfer; (ii) any Person acquiring JV Securities from any Shareholder in a Transfer in compliance with the Joint Venture Agreement shall, in each case, execute and deliver to the JV Entities an agreement to be bound by this Agreement in the form of Exhibit A hereto and shall thenceforth be a “Shareholder”; and (iii) any Person who acquires all or substantially all of the JV Securities of either Shell or Cosan in a Transfer in compliance with the Joint Venture Agreement shall, in each case, execute and deliver to the JV Entities an agreement to be bound by this Agreement in the form of Exhibit A hereto and shall thenceforth be a “Shareholder” and either (in the case of a direct or indirect purchase of the Cosan Interest (as defined in the Joint Venture Agreement)) “Cosan” or (in the case of a direct or indirect purchase of the Shell Interest (as defined in the Joint Venture Agreement)) “Shell” for all purposes under this Agreement.

(c)Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Parties, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

Section 9.02. Confidentiality.

(a) Each Party agrees that it shall, and shall cause any Person to whom Confidential Information is disclosed pursuant to paragraph (i) below to, hold strictly confidential all Confidential Information and treat all Confidential Information with the same degree of care and confidentiality that it affords its own trade secrets and proprietary information. Each Party agrees to use Confidential Information received from any JV Entity only in connection with its investment in the Joint Venture and the transactions contemplated by the Transaction Documents, and for no other purpose, except as otherwise expressly permitted by the Transaction Documents or agreed between Cosan and Shell and the relevant JV Entity. Each Party agrees that it shall be responsible for any breach of this Section 9.02 by any of its Representatives to whom it discloses Confidential Information. No Party shall disclose any Confidential Information to any Person, except: (i) to its own Representatives in the normal course of the performance of their duties; (ii) to the extent required by applicable law (including complying with any oral or written questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar

23

process to which a Party is subject; provided that, unless otherwise prohibited by law, such Party shall give the relevant JV Entity prompt notice of such request(s), to the extent practicable, so that such JV Entity may seek an appropriate protective order or similar relief (and the Party shall cooperate with such efforts by such JV Entity, and shall in any event make only the minimum disclosure required by such law)); (iii) to any Person to whom such Party is contemplating a Transfer (as defined in the Joint Venture Agreement) of any JV Securities in compliance with the requirements of the Joint Venture Agreement; (iv) to the extent required to comply with the rules and regulations of any regulatory authority to whose jurisdiction such Party or any of its Affiliates is subject (which may include the U.S. Securities and Exchange Commission, the Brazilian Comissão de Valores Mobiliários, the UK’s Financial Services Authority, the Netherlands’ Autoriteit Financiële Markten or any stock exchange); (v) as five of the six members of the Supervisory Board of the relevant JV Entity agree; provided that such Party shall give the relevant JV Entity and the other Parties advance notice in writing of any such disclosure; or (vi) in accordance with any other Transaction Document.

(b) The provisions of this Section 9.02 shall survive termination of this Agreement, but shall expire with respect to a Party on the second anniversary of the date on which such Party ceases to Beneficially Own at least one JV Security; provided, however, that: (i) with respect to any competitively sensitiveinformation, the provisions of this Section 9.02 shall survive indefinitely; and (ii) with respect to any information in relation to Iogen Energy and Codexis, the provisions of this Section 9.02 shall survive for a period of two years following the date on which the last of the disclosing Party or JV Entity and any of its Affiliates ceases to be a shareholder in Iogen Energy or Codexis, respectively.

Section 9.03. No Indirect Action. No Party shall (a) directly or indirectly, take any action or omit to take any action in either case with the intent to frustrate any of the rights of any other Party under this Agreement, and/or (b) take, or cause or permit to be taken, indirectly through an Affiliate or any other Person, any action which if taken, caused or permitted to be taken by such Party directly would constitute a violation of the terms and conditions of this Agreement.

Section 9.04. Notices. Any communication to be made under or in connection with this Agreement shall be made in the Portuguese and English languages (provided that the Portuguese version shall prevail in the event of conflict), in writing and, unless otherwise stated, may be made by fax via courier service. The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with this Agreement is identified with its name below. Any Party may substitute such address, fax number or department or officer by notifying the other Parties with not less than five days’ notice. Any communication or document made or

24

delivered by one person to another under or in connection with this Agreement will only be effective: (a) if by way of fax, when received in legible form; (b) if by way of courier service, when the courier service has recorded successful delivery at that address; and (c) if a particular department or officer is specified as part of its address details below, if addressed to that department or officer.

Sugar and Ethanol Co:

Raízen Energia Participações S.A.

Avenida Presidente Juscelino Kubischek, 1327, 6o andar

São Paulo – SP

CEP 04543-011

Brazil

Attention: President

Fax: +55 11 2344-6263

Downstream Co:

Raízen Combustíveis S.A.

Avenida das Americas, 4200

Bloco 5 & 6

Barra de Tijuca

CEP 22640-102

Rio de Janeiro – RJ

Brazil

Attention: President

Fax: +55 (21) 39847212

Management Co:

Raízen Energia Participações S.A.

Avenida Presidente Juscelino Kubischek, 1327, 6o andar (parte) São Paulo – SP

CEP 04543-011

Brazil

Attention: President

Fax: +55 11 2344-6263Cosan:

Cosan S.A. Indústria e Comércio

Avenida Presidente Juscelino Kubischek, 1327, 4o andar

São Paulo – SP

CEP 04543-011

25

Brazil

Attention: General Counsel and Chief Financial Officer

Fax: +55 (11) 23446498

Copy to:

Davis Polk & Wardwell LLP 450 Lexington Avenue

New York, New York 10017

Attention: John Amorosi; Manuel Garciadiaz

Fax: +1 (212) 701-5800

Barbosa Mussnich & Aragão

Av. Presidente Juscelino Kubitschek, 1.455 - 10º andar

Cep: 04543-011 - Itaim Bibi

Attention: Paulo Cezar Aragão; Daniela Soares

Fax: +55 (11) 2179-4597

Shell:

Shell Brasil Holding B.V.

c/o Shell Centre

4 York Road

London SE1 7NA

United Kingdom

Attention: Jorge Santos Silva; General Counsel

Fax: +44 (20) 7934 7509

Copy to:

Clifford Chance

Rua Funchal, 418, 15º andar

04551-060 São Paulo, SP Attention: Anthony Oldfield

Fax: +55 (11) 3049 3198

Souza, Cescon, Barrieu & Flesch Advogados

Rua Funchal, 418, 11º andar

04551-060 São Paulo, SP

Attention: Marcos Flesch

Fax: +55 (11) 3089 6565

Any Person that becomes a Shareholder shall provide its address and fax number to the JV Entities, which shall promptly provide that information to each other Shareholder.

26

Section 9.05. Waiver; Amendment. No provision of this Agreement may be amended, waived or otherwise modified except by an instrument in writing executed by the JV Entities with approval of the Supervisory Board and each Shareholder that is a Party at the time of that proposed amendment or modification. In addition, any Party may waive any provision of this Agreement with respect to itself by an instrument in writing executed by the Party against whom the waiver is to be effective.

Section 9.06. Fees and Expenses. All costs and expenses incurred in connection with the preparation of this Agreement and the other Transaction Documents, or any amendment or waiver hereof, and the transactions contemplated hereby shall be paid by the Party incurring such costs or expenses.

Section 9.07. Governing Language. This Agreement is drawn up in the Portuguese and English languages. If this Agreement is translated into another language, or if there is a conflict between the Portuguese and English versions, the Portuguese language text prevails.

Section 9.08. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the Federative Republic of Brazil, without regard to the Laws of any other jurisdiction that might be applied because of the conflicts of Laws principles of the Federative Republic of Brazil.

Section 9.09. Arbitration.

(a)Any dispute (a “Dispute”) arising from or connected with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement or the consequences of its nullity), will be referred to and finally resolved by arbitration under the Arbitration Rules of the ICC (the “Rules”), which Rules are deemed to be incorporated by reference into this Section 9.09

(b)The tribunal will consist of three arbitrators two of whom will be nominated by the respective parties, and the third, who shall act as chairman, shall be a national of a member state of the Organisation for Economic Co-operation and Development (except the United States of America, England or the Netherlands) and nominated by the other two arbitrators together (but failing agreement within 30 days of the appointment of the second arbitrator, the third arbitrator shall be appointed by the ICC). The seat of the arbitration will be São Paulo, Brazil, and the language of the arbitration will be English.

(c)The Parties that the arbitral tribunal will have power to award on a provisional basis any relief that it would have power to grant on a final award.

(d)Without prejudice to the powers of the arbitrator provided by the Rules, statute or otherwise, the arbitrator will have power at any time, on the basis

27

of written evidence and the submissions of the Parties alone, to make an award in favor of the claimant (or the respondent if a counterclaim) in respect of any claims (or counterclaims) to which there is no reasonably arguable defence, either at all or except as to the amount of any damages or other sum to be awarded.

(e)The Parties agree to keep confidential all materials used in and all awards received as a result of any Dispute proceedings, except to the extent required to be disclosed by applicable law.

(f)The Parties exclude any rights to refer points of law or to appeal to the courts, to the extent that they can validly waive these rights.

Section 9.10. Specific Enforcement. Each Party acknowledges that the remedies at law of the other Parties for a breach or threatened breach of this Agreement would be inadequate and, in recognition of this fact, any Party to this Agreement, without posting any bond, and in addition to all other remedies that may be available, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy that may then be available.

Section 9.11. Fraud. Nothing in this Agreement shall have the effect of limiting or restricting any liability arising as a result of any fraud, willful misconduct or willful concealment.

Section 9.12. Counterparts. This Agreement may be executed in any number of counterparts, each of which is an original and all of which together evidence the same agreement. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other Parties. Until and unless each Party has received a counterpart hereof signed by each other Party, this Agreement shall have no effect and no Party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).

Section 9.13. Entire Agreement. This Agreement and the other Transaction Documents constitute the entire agreement and supersede any previous agreement between the Parties relating to the subject matter of this Agreement (including the memorandum of understanding between Cosan, Cosan Limited and Shell International Petroleum Company Limited dated 31 January 2010 (the “MOU”).

Section 9.14. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid or unenforceable, a suitable and equitable provision shall

28

be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

Section 9.15. Term; Termination. The Parties hereby agree that this Agreement shall remain in full force and effect for a period that is the longer of (a) twenty years counted from the date hereof and (b) the period during which each of Cosan and Shell own, directly or indirectly, 40 per cent. of the voting capital of the Sugar and Ethanol Co (the “Term ”); provided that Sections 7.02 and 7.03 and Article 9 shall survive indefinitely. Further, except with respect to previously accrued rights and obligations and except for Sections 7.02 and 7.03 and Article 9, this Agreement shall terminate and be of no further effect with respect to any Shareholder when it ceases to be the Beneficial Owner of any JV Securities.

29

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their respective authorized officers as of the date first written above.

SUGAR AND ETHANOL CO
Executed by
RAÍZEN ENERGIA PARTICIPAÇÕES	)
S.A.	)	/s/ Pedro Izamu Mizutani
by	)
	Name: Pedro Izamu Mizutani
	Title:
and by	)
	) /s/ Marcelo Eduardo Martins
	)
	Name: Marcelo Eduardo Martins
	Title:

WITNESS 1:

/s/ Eleanor West

_____________________________________

Name: Eleanor West

Title: Solicitor

WITNESS 2:

/s/ Harsh Jain

_____________________________________

Name: Harsh Jain

Title: Trainee Solicitor

30

DOWNSTREAM CO
Executed by
RAÍZEN COMBUSTÍVEIS S.A.	)
by	)	/s/ Roby Krug Fenz
	Name: Roby Krug Fenz
	Title: Attorney in Fact

WITNESS 1:

/s/ Eleanor West

_____________________________________

Name: Eleanor West

Title: Solicitor

WITNESS 2:

/s/ Harsh Jain

_____________________________________

Name: Harsh Jain

Title: Trainee Solicitor

31

MANAGEMENT CO
Executed by
RAÍZEN S.A.	)
by	)	/s/ Roby Krug Fenz
	Name: Roby Krug Fenz
	Title: Attorney in Fact

WITNESS 1:

/s/ Eleanor West

_____________________________________

Name: Eleanor West

Title: Solicitor

WITNESS 2:

/s/ Harsh Jain

_____________________________________

Name: Harsh Jain

Title: Trainee Solicitor

32

COSAN
Executed by
COSAN S.A. INDÚSTRIA	)
E COMÉRCIO	)
by	) /s/ Marcelo Eduardo Martins
	Name: Marcos Marinho Lutz
	Title:
and by	) /s/ Marcelo Eduardo Martins
	)
	)
	Name: Marcelo Eduardo Martins
	Title:

WITNESS 1:

/s/ Eleanor West

_____________________________________

Name: Eleanor West

Title: Solicitor

WITNESS 2:

/s/ Harsh Jain

_____________________________________

Name: Harsh Jain

Title: Trainee Solicitor

33

COSAN DOWNSTREAM HOLDCO
Executed by
COSAN DISTRIBUIDORA DE	)
COMBUSTÍVEIS LTDA.	)
by	) /s/ Rubens Ometto Silveira Mello
	Name: /s/ Rubens Ometto Silveira Mello
	Title:
and by	) /s/ Pedro Izamu Mizutani
	)
	)
	Name: Pedro Izamu Mizutani
	Title:

WITNESS 1:

/s/ Eleanor West

_____________________________________

Name: Eleanor West

Title: Solicitor

WITNESS 2:

/s/ Harsh Jain

_____________________________________

Name: Harsh Jain

Title: Trainee Solicitor

34

SHELL
Executed by
SHELL BRAZIL HOLDING B.V.	)
by	)	/s/ Roby Krug Fenz
	Name: Roby Krug Fenz
	Title: Attorney in Fact

35

SHELL S&E HOLDCO Executed by
Executed by
ISPAGNAC PARTICIPAÇÕES LTDA.	)
by	)

/s/ Roby Krug Fenz

Name:  Roby Krug Kenz

Title:    Atytorney in Fact 

WITNESS 1:

/s/ Eleanor West

Name:  Eleanor West

Title:    Solicitor

WITNESS 2:

/s/ Harsh Jain

Name:  Harsh Jain

Title:    Trainee Solicitor

36

EX-4.8

Exhibit 4.8

SHAREHOLDERS’ AGREEMENT

dated as of

June 1st, 2011

of

RAÍZEN COMBUSTÍVEIS S.A.

TABLE OF CONTENTS

Page

ARTICLE 1

Definitions

Section 1.01.  Definitions	3
Section 1.02.  Other Definitional and Interpretative Provisions	12

ARTICLE 2

Bound Shares

Section 2.01.  Bound Shares 14

ARTICLE 3

Shareholders

Section 3.01.  Shareholders’ Meetings	14
Section 3.02.  Supervisory Board and Executive Board	14
Section 3.03.  Byelaw Provisions	15
Section 3.04.  Shareholders	15
Section 3.05.  Limited Proxy	15
Section 3.06.  Proxy by Management to the Shareholders	15

ARTICLE 4

Shareholder Representatives

Section 4.01.  Shareholder Representatives	16
Section 4.02.  Meetings of the Shareholder Representatives	16
Section 4.03.  Actions by the Shareholder Representatives	16
Section 4.04.  Expenses of the Shareholder Representatives	16

ARTICLE 5

Supervisory Board

Section 5.01.  Composition of the Supervisory Board	17
Section 5.02.  Chairperson	18
Section 5.03.  Supervisory Board Members to Be Shareholders	20
Section 5.04.  Removal of the Supervisory Board Members	20
Section 5.05.  Vacancies on the Supervisory Board	21
Section 5.06.  Meetings of the Supervisory Board	21
Section 5.07.  Proxies for Supervisory Board Members	22
Section 5.08.  Quorum of the Supervisory Board	22
Section 5.09.  Action by the Supervisory Board	22

i

Section 5.10.  Expenses and Compensation of Supervisory Board Members	23
Section 5.11.  Committees	23
Section 5.12.  Shareholder Indemnification Matters; Conflicts of Interest	23

ARTICLE 6

Executive Board

Section 6.01.  Executive Board	24
Section 6.02.  Meetings of the Executive Board	24
Section 6.03.  Action by the CEO	25
Section 6.04.  Removal of Executive Board Members	25
Section 6.05.  Vacancies on the Executive Board	25
Section 6.06.  Compensation	28
Section 6.07.  Committees	28

ARTICLE 7

Other Governance Matters

Section 7.01.  Manual of Authorities	28
Section 7.02.  Secondments	28
Section 7.03.  Dismissals	29
Section 7.04.  Subsidiary Governance	29
Section 7.05.  Senior Management	30
Section 7.06.  Indemnity Delinquency Period	30
Section 7.07.  Governance after any Completion of a Shell Partial Call Option	30

ARTICLE 8

Scope of the Downstream Co; Acquisitions; Business Opportunities

Section 8.01.  Scope of the Downstream Co	31
Section 8.02.  Restrictions	31
Section 8.03.  Acquisitions	32

ARTICLE 9

Distribution and Dividend Policy; Goodwill; NOLs; Pledge of Dividends; Capital Contributions

Section 9.01.  Distributions and Dividend Policy	32
Section 9.02.  Goodwill and NOL	33
Section 9.03.  Fiscal and Accounting Year	36
Section 9.04.  Agreed Capital Contributions	36
Section 9.05.  Capital Redemptions	38

ii

ARTICLE 10

Board Members’ Indemnity and Insurance

Section 10.01.  Board Members’ Insurance	39
Section 10.02.  Board Members’ Indemnity	39

ARTICLE 11

Miscellaneous

Section 11.01.  Binding Effect; Assignability; Benefit	39
Section 11.02.  Confidentiality	40
Section 11.03.  Notices	41
Section 11.04.  Waiver; Amendment; Termination	42
Section 11.05.  Fees and Expenses	43
Section 11.06.  Governing Language	43
Section 11.07.  Governing Law	43
Section 11.08.  Arbitration	43
Section 11.09.  Specific Enforcement	44
Section 11.10.  Fraud	44
Section 11.11.  Counterparts	44
Section 11.12.  Entire Agreement	44
Section 11.13.  Severability	44
Section 11.14.  Term; Termination	45
Section 11.15.  Records	45
Section 11.16.  Legends	45
Section 11.17.  Intervening Party	45
Section 11.18.  Legal Representative	45

Annex A	Responsibilities of the Shareholder Representatives
Annex B	Matters Requiring Shareholder Approval
Annex C	Responsibilities of the Chairperson
Annex D	Functions and Responsibilities of the Supervisory Board
Annex E	Functions and Responsibilities of the CEO
Annex F	Functions and Responsibilities of the Senior Management
Annex G	Committees of the Supervisory Board
Annex H	Joinder Agreement
Annex I	Share Assignment Agreement

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SHAREHOLDERS’ AGREEMENT

AGREEMENT dated as of June 1, 2011 (this “Agreement”) among (i) Cosan S.A. Indústria e Comércio, a company organized and existing under the laws of Brazil, with its administrative office at Avenida Presidente Juscelino Kubistchek, 1327, 4o andar, City of Sao Paulo, State of Sao Paulo, CEP 04543-011, Brazil enrolled with the Brazilian tax registry under No. 50.746.577/0001-15 (“Cosan”), (ii) Cosan Distribuidora de Combustíveis Ltda., a company organized and existing under the laws of Brazil, with its head office at Fazenda Pau D'Alho, s/nº, Prédio Administrativo Cosan, in the City of Barra Bonita, State of São Paulo, CEP 17340-000, enrolled with the Brazilian tax registry under No. 02.041.195/0001-43 (“Cosan Downstream Holdco”); (iii) Shell Brazil Holding B.V., a company incorporated in the Netherlands (“Shell”) and (iv) as intervening and consenting parties, (A) Raízen Combustíveis S.A., a company organized and existing under the laws of Brazil, with its head office at Avenida das Américas, 4200, Blocos 5 & 6, Barra da Tijuca, City of Rio de Janeiro, State of Rio de Janeiro, CEP 22640-102, Brazil, enrolled with the Brazilian tax registry under No. 33.453.598/0001-23 (“Downstream Co”) .  The terms “Cosan” and “Shell” shall each mean, if such entities or persons shall have Transferred any of their “JV Securities” to any of their respective “Permitted Transferees” (as such terms are defined below), those Persons and those Permitted Transferees, taken together, and any right, obligation or action that may be exercised or taken at the election of those Persons may be taken at the election of those Persons and those Permitted Transferees.

W I T N E S S E T H:

(A)    Pursuant to the terms of the Framework Agreement (as defined below) Cosan and Shell agreed to establish the Joint Venture (as defined below) to combine certain of the assets of Cosan and Shell primarily in Brazil;

(B)    Cosan and Shell have an equal economic interest in the Joint Venture and as a general principle, Cosan and Shell will share the profits, losses, access to cash flows and economic interest of the Joint Venture on an equal basis;

(C)    The Joint Venture comprises the Sugar and Ethanol Co which holds the sugar, ethanol, co-generation and certain other assets of the Joint Venture, the Downstream Co (as defined below) which holds the downstream and certain other assets of the Joint Venture, and the Management Co which forms the Joint Venture’s single face to the market and will facilitate the building of a unified corporate culture;

(D)    The voting capital of each of the Downstream Co and the Sugar and Ethanol Co will be divided into common shares (comprising 98 per cent. of voting capital) and preferred ‘A’ shares (comprising 2 per cent. of voting capital),

which will be held as follows: (i) each of Cosan and Shell will own, directly or indirectly, 50 per cent. of the common shares in each of the Downstream Co and the Sugar and Ethanol Co; (ii) Shell will directly own 100 per cent. of the preferred ‘A’ shares in the Downstream Co and Cosan will directly own 100 per cent. of the preferred ‘A’ shares in the Sugar and Ethanol Co; and (iii) as a consequence of (i) and (ii), Shell will directly own 51 per cent. of the total voting capital of the Downstream Co and Cosan will directly own 51 per cent. of the total voting capital of the Sugar and Ethanol Co; and Cosan and Shell will each own directly 50 per cent. of the shares of the Management Co; provided that, notwithstanding the foregoing, each member of the Supervisory Board (as defined below) of each of the Downstream Co, the Sugar and Ethanol Co and the Management Co will hold one common share in such entity, in each case assigned, or caused to be assigned, to such member by whichever of  Cosan or Shell nominated the member to such position;

(E)    The Downstream B Shares and the Downstream C Shares will be allocated among Cosan and Shell and will bear certain economic (but not voting) rights to compensate Cosan and/or Shell for contributing certain goodwill and net operating loss carry-forwards to, as they render a tax benefit to, the Downstream Co and/or its Subsidiaries;

(F)    Cosan and Shell have pledged certain rights to dividends and interest on capital to each other, and Cosan has pledged certain of its JV Securities (as defined below) to Shell, in each case as security for certain payment obligations;

(G)    A management compensation plan (the “Management Compensation Plan”) will be applied to reward the management of the Joint Venture for success in their respective roles;

(H)    The Joint Venture Agreement (as defined below) sets out certain options whereby Cosan or Shell may acquire the other’s interest in the Joint Venture, lock-up provisions and remedies for fundamental breaches of the documentation governing the establishment and operation of the Joint Venture;

(I)    An Operating and Coordination Agreement (as defined below) sets out certain terms relating to the coordination of the Sugar and Ethanol Co, the Downstream Co and the Management Co, and specifies certain principles, policies, targets and processes of the Joint Venture;

(J)    ROSM, who indirectly controls Cosan, has entered into an agreement with Cosan and Shell setting out certain obligations in relation to his indirect interest in the Joint Venture and his activities in respect of the Business (as defined below) of the Joint Venture;

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(K)    Shareholders’ agreements in respect of each of the Downstream Co (being this Agreement) and the Sugar and Ethanol Co together govern the scope of the business of the Joint Venture, certain matters relating to governance (which, as a general principle, shall be shared between Cosan and Shell equally), acquisitions, dividends and distributions, as well as the general principles that shall govern Cosan’s and Shell’s relationship as shareholders of the Downstream Co and the Sugar and Ethanol Co; and

(L)    The Parties (as defined below) desire to enter into this Agreement, pursuant to the terms of article 118 of the Brazilian Corporation Law (as defined below), to govern the scope of the business of the Downstream Co, the roles, rights and obligations of the shareholders, Shareholder Representatives and the members of the Supervisory Board and Executive Board and the CEO and Senior Management (as such terms are defined below) of the Downstream Co, certain matters relating to acquisitions, dividends and distributions, as well as the general principles that shall govern Cosan’s and Shell’s relationship as shareholders of the Downstream Co.

ACCORDINGLY, in consideration of the covenants and agreements contained herein and in the Framework Agreement, the Parties agree as follows:

ARTICLE 1

Definitions

Section 1.01.  Definitions.  (a) As used in this Agreement, the following terms shall have the following meanings:

“Adjusted Downstream Interest Expense Deduction” means, for any CIT Year, the lower of: (a) the Downstream Co’s actual interest expense deduction from the CIT Taxable Base as reflected in the Downstream Co’s CIT Tax Return for that CIT Year; and (b) 15 per cent. of an amount determined by adding back to the Downstream Co’s net profits calculated pursuant to Brazilian commercial Laws (lucro liquido contábil) for that CIT Year the Downstream Co’s interest expense,  the Downstream Co’s depreciation and amortization of assets expense, and the Downstream Co’s expense related to the liability for CIT (current and deferred) to the extent taken into account in determining such net profits, it being understood that, for purposes of items (a) and (b) above, the term “interest expense” shall be deemed to exclude any IOC that may be paid by the Downstream Co to its shareholders.

“Affiliate” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of a Holding Company; provided that, for the purposes of this Agreement, no JV Entity shall be considered an Affiliate of any Shareholder.

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“Anti-Corruption Law” means the US Foreign Corrupt Practices Act of 1977, the United Kingdom Prevention of Corruption Acts 1889 to 1916 and the United Kingdom Bribery Act of 2010, Decree (Decreto) 4,410 of October 7, 2002 (Interamerican Convention Against Corruption) of Brazil, Decree (Decreto) 5,687 of January 31, 2006 (United Nations Convention Against Corruption) of Brazil, or any applicable law of similar effect.

“Beneficial Owner” means, in respect of a security, any Person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (a) voting power which includes the power to vote, or to direct the voting of, such security; and/or (ii) investment power which includes the power to dispose, or to direct the disposition of, such security; and each of the terms “Beneficially Own” and “Beneficially Owned” has a corollary meaning.

“Brazilian Civil Code” shall mean Brazilian Federal Law no. 10.406 of January 10, 2002 (lei Nº 10.406, de 10 de janeiro 2002).

“Brazilian Corporation Law” shall mean Brazilian Federal Law no. 6,404 of December 15, 1976 (Lei Nº 6.404 de 15 de dezembro 1976).

“Business Day” means a day other than a Saturday, Sunday or public holiday in São Paulo, Brazil.

“Business Plan” means the business plan for a five-year period relating to the Joint Venture, the initial version of which was adopted by the Supervisory Board on the date hereof, and as renewed on an annual basis by the Supervisory Board in accordance with Annex D.

“Byelaws” means, in relation to any entity, the corporate byelaws (including any Contrato Social or Estatuto Social) of that entity.

“CIT” means the IRPJ and the CSLL, and any other Taxes that may be created in Brazil to replace the IRPJ and/or the CSLL, and/or that levy on income or profits earned by Brazilian companies;

“CIT Tax Return” means the specific Tax return concerning IRPJ and CSLL (Declaração de Informações Economico-Fiscais da Pessoa Jurídica) or any similar Tax return that may be required by future Brazilian Tax Laws in place of the Declaração de Informações Economico-Fiscais da Pessoa Jurídica.

“CIT Taxable Base” means for any JV Entity in any CIT Year, for the purposes of the IRPJ, its lucro real for that CIT Year and, for the purposes of the CSLL, its base de cálculo da CSLL for that CIT Year.

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“CIT Year” means each taxable period for CIT purposes of any entity, including each calendar-year beginning on 1 January and ending on 31 December and, where the context so requires, any shorter period beginning on the Closing Date and any short period beginning on 1 January and ending on the date of dissolution of the Joint Venture.

“Closing Date” means the date of this Agreement.

“Confidential Information” means any information concerning any Party or any of its Subsidiaries, whether or not in the possession of a Party before the date of this Agreement, and which relates to trade secrets, proprietary information, the marketing of goods or services (including names, lists and other details of customers, sales targets, sales statistics, market share statistics, prices, market research reports and surveys, advertising or promotional materials and strategies), future projects, business development or planning, commercial relationships, negotiations and business strategy; provided that “Confidential Information” does not include information that: (a) is or becomes generally available to the public other than as a result of a disclosure by a Party, any of its Affiliates or its or their Representatives in violation of this Agreement; (b) was available to such Party on a non-confidential basis prior to its disclosure to such Party or its Representatives; or (c) becomes available to such Party on a non-confidential basis from a source other than a JV Entity after the disclosure of such information to such Party or any Party’s Representative by the JV Entity, which source is (at the time of receipt of the relevant information) not, to such Party’s knowledge, bound by a confidentiality agreement with (or other confidentiality obligation to) such JV Entity or another Person; provided, further, that, notwithstanding anything to the contrary contained herein, Confidential Information in the possession of Cosan, Shell or any of their respective Subsidiaries prior to the date of this Agreement shall, notwithstanding the foregoing exceptions in paragraphs (a) or (c), remain Confidential Information hereunder and Cosan and Shell shall be obligated to keep, or to cause to be kept, such information confidential in accordance with the provisions of ‎Section 11.02 as fully as if they did not have access to such information prior to the date of this Agreement but only received it after the date of this Agreement.

“Control” means the power of a Person (or Persons acting in concert) to secure that the affairs of a second Person are conducted, directly or indirectly, in accordance with the wishes of the first Person (or first Persons acting in concert) whether by means of being the Beneficial Owner(s) of more than 50 per cent (or, in the case of the Joint Venture, 50 per cent.) of the issued share capital of or of the voting rights in the second Person, or having the right to appoint or remove a majority of the directors or otherwise control a majority of the votes at board meetings of the second Person by virtue of any rights attaching to securities held or powers conferred by the Byelaws, shareholders’ agreement or any other

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document regulating the affairs of the second Person; and “Controlled by” shall be construed accordingly.

“Control Framework” means a control framework to ensure compliance with reporting requirements (including in relation to section 404 of the Sarbanes-Oxley Act 2002 of the United States of America), as adopted by the Supervisory Board.

“Cosan Goodwill” means any ‘goodwill on acquisition of investments’ (ágio na aquisição de investimentos) that is a Cosan Transfer Asset or is recorded by a Cosan Transfer Entity on or before 30 June 2010 for CIT purposes and the value of which is determined immediately prior to Closing as if the CIT Year ended on the Closing Date (or, in the case of such goodwill that is not yet subject to amortization for CIT purposes on the Closing Date, on the date when it becomes subject to amortization for CIT purposes by means of a merger or other transaction).

“Cosan Goodwill NOL” means any NOL of any JV Entity generated after the Closing Date to the extent that such NOL was attributable to amortization of Cosan Goodwill.

“Cosan Limited” means Cosan Limited, a company incorporated under the laws of Bermuda and whose registered office is at Crawford House, 50 Cedar Avenue, Hamilton HM 11, Bermuda.

“Cosan Tax Savings” means, for the Downstream Co in any CIT Year, the combined applicable rates of CIT multiplied by the sum of: (a) the Downstream Co’s deduction for amortization of Cosan Goodwill to the extent that this deduction does not cause its CIT Taxable Base to be less than zero; and (b) the Downstream Co’s NOL deductions to the extent attributable to Cosan Goodwill NOL, it being understood that for this purpose any NOL deduction shall be attributed first, to any Cosan Goodwill NOL, second, to any Shell Pre-Closing NOL, and thereafter, to any NOL generated after the Closing Date that is not a Cosan Goodwill NOL, provided the CIT Taxable Base calculated for the purposes of paragraphs (a) and (b) above shall be the hypothetical amounts calculated under those paragraphs by using the Adjusted Downstream Interest Expense Deduction as Downstream Co’s interest expense deduction and disregarding the Downstream Co’s IOC expense.

“Cosan Transfer Assets” has the meaning set forth in the Framework Agreement.

“Cosan Transfer Entity” has the meaning set forth in the Framework Agreement.

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“CSLL” means the Brazilian Social Contribution on Net Profits (Contribuição Social sobre o Lucro Líquido).

“Default Interest Rate” means a per annum rate of interest equal to 2 per cent. above SELIC for payments in BRL and equal to 3 per cent. above LIBOR for payments in US$.

“Distribution” means a distribution by way of dividend payable in respect of shares, by way of IOC, by way of any other distribution of profits or reserves that may be agreed by the Parties, made, or to be made, by the Downstream Co in accordance with ‎Section 9.02;

“Downstream B Shares” means the preferred ‘B’ shares of the Downstream Co.

“Downstream Byelaws” means the Byelaws of the Downstream Co, as amended from time to time.

“Downstream C Shares” means the preferred ‘C’ shares of the Downstream Co.

 “Ethanol” means ethanol and ethanol-based products, in each case, produced from sugarcane.

“External Auditors” has the meaning set forth in the Operating and Coordination Agreement.

“Framework Agreement” means the Framework Agreement dated August 25, 2010 between Cosan, Cosan Distribuidora de Combustíveis Ltda., Cosan Limited, the Downstream Co, the Management Co, Shell, Shell Overseas Holdings Limited and Sugar and Ethanol Co.

“Governmental Authority” means any international, supranational or national government, any state, provincial, local or other political subdivision thereof, any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions (including functions relating to the audit, imposition, assessment, management and collection of Taxes) of or pertaining to government, including any government authority, agency, department, board, commission or instrumentality of any nation or jurisdiction or any political subdivision thereof or any court.

“Holding Company” means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.

“Indemnity Delinquency Period” means the period from the 15th Business Day after the date a Determined Indemnity Amount (as defined in the

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Framework Agreement) is due from Cosan or Shell (as the case may be) to an Indemnified Party (as defined in the Framework Agreement) until such Determined Indemnity Amount is paid in full in cash (and, for clarification, not pursuant to the Alternative Pledge Call Option (as defined in the Framework Agreement)).

“INSS” means the Brazilian Social Security Institute (Instituto Nacional do Seguro Social).

“IOC” means interest on capital (juros sobre capital proprio) that may be paid by Brazilian companies to shareholders.

“IRPJ” means the Brazilian Corporate Income Tax (Imposto de Renda Pessoa Jurídica).

“Joint Venture” means the Sugar and Ethanol Co, the Downstream Co and the Management Co and their Subsidiaries, considered together.

“Joint Venture Agreement” means the joint venture agreement dated the date of this agreement, between Cosan, Cosan Limited, the Downstream Co, the Management Co, Shell Brazil Holding B.V., Shell Overseas Holdings Limited and Sugar and Ethanol Co.

“JV Entity” means, after Closing, each of, and each of the Subsidiaries of and equity interests held by, the Downstream Co, the Management Co and/or the Sugar and Ethanol Co.

“JV Securities” means: (i) the common and preferred shares of the Downstream Co held (directly or indirectly) by Cosan and Shell; (ii) any other equity or equity-linked security issued from time to time by the Downstream Co; and (iii) any options, warrants, or other rights to acquire any of the foregoing securities.

“Key Policies” means the “General Business Principles”, “Sustainable Development and HSSE Principles”, the “Employee Code of Conduct” and the “HR Principles”, as existing and having been adopted by the Downstream Co from time to time.

“Level 3 Employee” means any employee of the Downstream Co employed at the level that reports directly to any member of the Senior Management.

“LIBOR” means a rate equal to (a) the applicable Screen Rate; or (b) (if no Screen Rate is available) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to any Party at its request quoted by the Reference Banks to leading banks in the London interbank market, in each case as

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of the time on the Quotation Day for the offering of deposits in US$ and for a period of six-months (or the closest period if such period is not available).

“Management Co” means Raízen S.A., a company organized and existing under the laws of Brazil, with its head office at Avenida Presidente Juscelino Kubistchek, 1327, 6o andar (part), City of Sao Pailo, State of Sao Paulo,CEP 04543-011, Brazil, enrolled with the Brazilian tax registry under No. 10.773.432/0001-99.

“NOL” means any net operating loss carry forward (prejuizo fiscal with respect to the IRPJ, and any base de cálculo negativa de CSLL with respect to the CSLL).

“Operating and Coordination Agreement” means the agreement dated the date of this Agreement between Cosan, Cosan Distribuidora de Combustíveis Ltda., the Downstream Co, Ispagnac Participações Ltda., the Management Co, Shell Brazil Holding B.V. and Sugar and Ethanol Co.

“Parties” means the parties to this Agreement.

“Permitted Transferees” means any person to whom or which Cosan or Shell is permitted to transfer its interest, whether directly or indirectly, in the Joint Venture, pursuant to the Joint Venture Agreement.

“Person” means an individual, corporation (including a Brazilian sociedade anônima), limited liability company (including a Brazilian sociedade limitada), partnership, association, trust or other entity or organization (whether or not Brazilian), including any type of Brazilian sociedade empresária and sociedade simple or any other entity regulated by Articles 40-69 of the Brazilian Civil Code, and including a Governmental Authority or political subdivision or an agency or instrumentality thereof.

“Qualifying Person” means any person who has not been convicted of any violation of any Anti-Corruption Law.

“Quotation Day” means, in relation to any period for which an interest rate is to be determined, two Business Days before the first day of that period, unless market practice differs in the London interbank market, in which case the Quotation Day for that currency and interest rate will be determined by HSBC Bank plc (or, if not available or willing, Bank of America) in accordance with market practice in the London interbank market (and, if quotations would normally be given by leading banks in the London interbank market on more than one day, the Quotation Day will be the last of those days preceding the relevant period).

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“Representatives” means any of a Person’s Affiliates and the directors, officers, employees, agents, counsel, investment advisers and financing sources subject to customary confidentiality obligations of such Person and/or of any of its Affiliates.

“ROSM” means Rubens Ometto Silveira Mello, a Brazilian citizen whose principal business address is located at Av. Presidente Juscelino Kubitschek, 1327, 4o andar - CEP 04543-011 – São Paulo – SP, Brazil.

“Screen Rate” means, in relation to the London Interbank Offered Rate, (a) the British Bankers’ Association “Interest Settlement Rate” displayed on the appropriate page of the Reuters screen; or (b) (if the page referred to in sub-paragraph (a) above is replaced or service ceases to be available) such rate as announced by HSBC Bank plc from time to time as in effect from time to time.

“SELIC” means the rate assessed by the Brazilian Special Liquidation and Custody System (Sistema Especial de Liquidação e Custódia) – SELIC, published by the Central Bank of Brazil, obtained by calculating the adjusted weight average rate of one-day financing operations, backed by public federal bonds and traded in such system.

“Shareholder” means, at anytime, any Person (other than the Downstream Co) who shall then be a party to or bound by this Agreement for so long as that person Beneficially Owns any JV Securities issued by the Downstream Co.

“Shareholders’ Meeting” means any meeting of the Shareholders.

“Shell Pre-Closing NOL” means the NOL of the Downstream Co determined to exist immediately prior to Closing as if the CIT Year ended on the Closing Date.

“Shell Tax Savings” means, in any CIT Year, the combined applicable rates of CIT multiplied by the hypothetical amount of the Downstream Co’s NOL deduction that would be attributable to any Shell Pre-Closing NOL if the Downstream Co’s CIT Taxable Base were calculated by using its Adjusted Downstream Interest Expense Deduction as its interest expense deduction, it being understood that for this purpose any NOL deduction shall be attributed first, to any Cosan Goodwill NOL, second, to any Shell Pre-Closing NOL, and thereafter, to any NOL generated after the Closing Date that is not a Cosan Goodwill NOL.

“Subsidiary” means, in relation to any Person, a Person: (a) which is Controlled, directly or indirectly, by the first mentioned Person; (b) more than half the issued share capital of which is Beneficially Owned, directly or indirectly

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by the first mentioned Person; or (c) which is a Subsidiary of another Subsidiary of the first mentioned Person.

“Sugar” means sugar and sugar by-products, in each case, produced from sugarcane.

“Sugar and Ethanol Co” means Raízen Energia Participações S.A., a company organized and existing under the laws of Brazil, with its head office at Avenida Presidente Juscelino Kubistchek, 1327, 6o andar, City of Sao Paulo, State of Sao Paulo,CEP 04543-011, Brazilenrolled with the Brazilian tax registry under No.12.182.297/0001-32.

“Sugar and Ethanol Co Shareholders’ Agreement” means the shareholders’ agreement dated the date of this Agreement, between Cosan, Ispagnac Participações Ltda., Sugar and Ethanol Co and Shell.

“Tax” means any past, present or future taxes, including (without limitation) IRPJ, CSLL, PIS, COFINS and ICMS and any and all other taxes, surtaxes, additional rates, levies, excise, imposts, duties, charges, contributions, social contributions, contributions on economic domain intervention, charges, tariffs, fees, deductions, or withholdings of whatever nature (including any related fines, penalties, surcharges or interest) that are imposed, levied, collected, withheld, assumed, assessed by or payable to any Governmental Authority, and that are levied (without limitation) on income, net worth, revenues, profits, turnover, capital gains, imports, exports, services, excise, royalties, ownership and transfer of real estate property, donations, bank account deposits and withdrawals, foreign exchange transactions, credit transactions, transactions related to bonds and securities, transactions related to insurance transactions, as well as “green” or environmental taxes, value-added taxes, and any and all other transactional or turnover tax.

“Transaction Document” has the meaning set forth in the Framework Agreement.

“Transfer” means, with respect to any JV Securities: (a) when used as a verb, to sell, assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise transfer any JV Securities or any participation or interest therein, whether directly or indirectly (including pursuant to a derivative transaction), or agree or commit to do any of the foregoing; and (b) when used as a noun, a direct or indirect sale, assignment, disposition, exchange, pledge, encumbrance, hypothecation, or other transfer of any JV Securities or any participation or interest therein or any agreement or commitment to do any of the foregoing.

(b)    Each of the following terms is defined in the Section set forth opposite that term:

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Term	Section
Affected Shareholder	‎5.01(d)
Agreement	preamble
Audit Committee	Annex G
Business	‎8.01
CEO	‎6.01
CFO	‎6.01
Chairperson	‎5.02(a)
COO (Downstream)	‎6.01
COO (Sugar and Ethanol)	‎6.01
Cosan	preamble
Cosan Downstream Holdco	preamble
CSR Committee	Annex G
Deadline	‎9.04(b)
Downstream Co	preamble
Direct Report	‎6.05(c)
Dispute	‎11.08(a)
Executive Board	‎6.01
Finance Committee	Annex G
Fiscal Board	Annex B
Interim CEO	‎6.05(b)
Internal Auditors	Annex G
Joinder Agreement	Annex H
Joining Party	Annex H
Management Compensation Plan	Recitals
Management Shares	‎3.06
Manual of Authorities	‎7.01
MOU	‎11.12
Non-Participating Party	‎9.04(b)
Participating Party	‎9.04(b)
Remuneration Committee	Annex G
Replacement Nominee	‎5.05(a)
Rules	‎11.08(a)
Senior Management	‎7.05
Shareholder Representative	‎4.01
Shareholders’ Agreement	Annex H
Shell	preamble
Supervisory Board	‎5.01(a)
Sustainable Development Remediation Plan	Annex G
Term	‎11.14

Section 1.02.  Other Definitional and Interpretative Provisions.  A reference to a statutory provision (including, in Brazil, a provision of a Lei

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Ordinária, Lei Complementar, Decreto, Decreto-Lei, Medida Provisória and any other law under Brazilian law), includes a reference to: (a) the statutory provision as modified or re-enacted or both from time to time (whether before or after the date of this Agreement); and (b) any subordinate legislation made under the statutory provision by any Person (whether before or after the date of this Agreement).  A reference to a “regulation” includes any regulation, rule, official directive, request, guideline, portaria, regulamento, decreto, resolução, deliberação, circular, carta-circular, instrução, instrução normativa, regimento, ato declaratório and/or despacho normativo (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organization. The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  References to “globally” shall be deemed to include Brazil.  The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.  References to Annexes, Articles, Sections, Exhibits and Schedules are to Annexes, Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified.  All Annexes, Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  Any capitalized terms used in any Annex, Exhibit or Schedule but not otherwise defined therein, shall have the meaning set forth in this Agreement.  Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular.  Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import.  “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form.  References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; provided that with respect to any agreement or contract listed on any schedules hereto, all such amendments, modifications or supplements must also be listed in the appropriate schedule.  References to any Person or a Party include the legal personal representatives, Affiliate(s), successors and permitted assigns of that Person or Party.  References to “Persons acting in concert” means, in relation to a Person, Persons which actively co-operate, pursuant to an agreement or understanding (whether formal or informal) with a view to obtaining or consolidating Control of that Person.  References to “he” or “him” shall be deemed to refer, in addition, to “she” and “her”, respectively.  References from or to any date mean, unless otherwise specified, from and including and to but excluding, respectively and a time of day is a reference to São Paulo, Brazil time.  References to “company”, “corporation” or “entity” include a reference to any business entity (of whatever form) in any jurisdiction (including Brazilian sociedades empresárias and sociedades simples).  

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Italicized terms in parenthesis denote the Portuguese language words for names, concepts and other terms applicable in Brazil.

ARTICLE 2

Bound Shares

Section 2.01.  Bound Shares.  This Agreement shall bind all JV Securities currently owned, directly or indirectly, by the Parties, as well as JV Securities issued by the Downstream Co that are subscribed or purchased or in any other way acquired by any of the Parties, their successors or Permitted Transferees, during the term of this Agreement, including, but not limited to, stock dividends deriving from dividend distributions, splitting, reverse splitting, or any shares, quotas or securities received by the Parties in exchange to or substitution of their JV Securities, by virtue of or in connection with any merger or reorganization of the Downstream Co or otherwise.

ARTICLE 3

Shareholders

Section 3.01.  Shareholders’ Meetings.  The Downstream Co will hold an annual Shareholders’ Meeting within the first four (4) months after the close of each fiscal year and an extraordinary Shareholders’ Meeting whenever the Downstream Co’s business so requires.  The general meetings of shareholders will be instated, on the first call, with the attendance of shareholders representing at least the percentage of the Downstream Co’s voting capital required under the Brazilian Corporation Law and, on the second call, with any number of shareholders present; provided that, (a) in order for a quorum to exist for the vote on any matter at any such meeting properly instated, shareholders representing at least 60% of the Downstream Co’s voting capital must be in attendance at such meeting, and (b) during the pendency of any Indemnity Delinquency Period or in the circumstances described in ‎Section 5.01(d) or ‎Section 9.04(b) in no event shall matters set forth in Parts 1 and 2 of Annex B be voted on at the same Shareholders Meeting.  The approval of any of the matters listed on Part 1 of Annex B hereto shall, at any Shareholders’ Meeting whether on first or second call, require the affirmative vote of Shareholders holding at least 75% of the Downstream Co’s total voting capital (taking into account the proxy granted pursuant to Sections ‎5.01(d), ‎7.06, 7.07 and ‎9.04(b), if applicable).

Section 3.02.  Supervisory Board and Executive Board.  Each of Cosan and Shell shall vote its JV Securities or execute proxies or written consents, as the case may be, and take all other necessary action (including causing the Downstream Co to call a special meeting of shareholders) in order to ensure that

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the composition of the Supervisory Board (and the identity of the Chairperson) is as set forth in this Agreement.  Each of Cosan and Shell shall cause its nominees to the Supervisory Board to take all necessary action to ensure that the composition of the Executive Board is as set forth in this Agreement.

Section 3.03.  Byelaw Provisions.  (a) Each Shareholder agrees to vote its JV Securities or execute proxies or written consents, as the case may be, and to take all other actions necessary: (i) to ensure that the Downstream Byelaws facilitate, and do not at any time conflict with, any provision of this Agreement, and (ii) to permit each Shareholder to receive the benefits, and exercise the rights, to which each such Shareholder is entitled under this Agreement.

(b)    The Downstream Byelaws shall provide for: (i) the elimination of the liability of each member of the Supervisory Board and the Executive Board to the maximum extent permitted by applicable law; and (ii) indemnification of each member of the Supervisory Board and the Executive Board for acts on behalf of the Joint Ventures to the maximum extent permitted by applicable law.

Section 3.04.  Shareholders.  Cosan and Shell shall use their respective (direct or indirect) shareholder votes in the Downstream Co (and any holding company) which they Beneficially Own, to procure that the Downstream Co shall fully comply with the terms of this Agreement, as further set forth in Article 118 of the Brazilian Corporation Law.

Section 3.05.  Limited Proxy.  For the limited purposes of Sections ‎5.01(d), ‎7.06, ‎7.07 and ‎9.03, the defaulting Shareholder under each such Section hereby grants to the other Shareholder an irrevocable and irreversible power-of-attorney, in accordance with the terms of Articles 684 and 685 of the Brazilian Civil Code, with the power to constitute a quorum and to vote the defaulting Shareholder's JV Securities.  The power-of-attorney referred to herein shall become effective immediately following the date which is 30 days after the defaulting Shareholder receives written notice from the non-defaulting Shareholder of its failure to make such payment within the specified period during which such payment was required to have been made, but only if the defaulting Shareholder has yet to satisfy all of its obligations referred to in that Section (together with any accrued interest) by such date.

Section 3.06.  Proxy by Management to the Shareholders.  If for any reason whatsoever any preferred non-voting shares held by the management of the Downstream Co under the Downstream Co Stock Option Plan (the “Management Shares”) after the date hereof acquire voting rights according to Paragraph 3 of Article 111 of the Brazilian Corporation Law (Law 6,404 of December 14, 1976) or are allowed or are required to vote on any matters as set forth in the Brazilian Corporation Law, the Shareholders acknowledge that the powers of attorney granted by such managers (under the terms of Articles 684 and

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685 of the Brazilian Civil Code) to the Shareholders to vote the Management Shares shall be exercised by Cosan in relation to fifty percent (50%) of any Management Shares and by Shell in relation to fifty percent (50%) of any Management Shares.  The Shareholders shall be entitled to vote the Management Shares as if the Management Shares were held by each of them.

ARTICLE 4

Shareholder Representatives

Section 4.01.  Shareholder Representatives.  Each of Cosan and Shell shall appoint one of its respective senior executives as a shareholder representative of that party in respect of the Downstream Co (each such individual, a “Shareholder Representative”).

Section 4.02.  Meetings of the Shareholder Representatives.  The two Shareholder Representatives shall meet at such times as may be requested by either Shareholder Representative or by Cosan or Shell, but only to: (a) resolve a deadlock at a Shareholders’ Meeting or at the Supervisory Board-level over any matters set forth in Annex B or Annex D, respectively, or any other matter as the Supervisory Board may agree; or (b) address any of the other matters set forth in Annex A.  All meetings of the Shareholder Representatives shall take place at a location or via teleconference as may be mutually agreed upon by the Shareholder Representatives.

Section 4.03.  Actions by the Shareholder Representatives.  The responsibilities of the Shareholder Representatives are summarized in Annex A hereto.  Actions or decisions by the Shareholder Representatives shall require the agreement of both Shareholder Representatives.  Cosan and Shell shall: (a) cause the Shareholder Representatives to notify the Supervisory Board of, and shall cause the Supervisory Board to effect or implement, any decision of the Shareholder Representatives which the Shareholder Representatives agree must be effected or implemented by the Supervisory Board; or (b) cause the Shareholders to call a Shareholders’ Meeting to effect or implement any decision of the Shareholder Representatives which the Shareholder Representatives agree must be implemented or effected by the Shareholders.  If the Shareholder Representatives are unable to reach a joint decision, such decision shall not be taken or effected, and the status quo shall prevail.

Section 4.04.  Expenses of the Shareholder Representatives.  Each of Cosan and Shell shall pay, respectively, all reasonable out-of-pocket expenses incurred by the Shareholder Representative nominated by it, in connection with the attendance of any meetings or the carrying out of any duties in such capacity as its Shareholder Representative.

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ARTICLE 5

Supervisory Board

Section 5.01.  Composition of the Supervisory Board.

(a)    The Downstream Co shall have a supervisory board (Conselho de Administração) (the “Supervisory Board”).

(b)    Subject to ‎Section 5.01(d), Section 5.01(e), ‎Section 7.06, ‎Section 7.07 and ‎Section 9.04, the Supervisory Board shall have six voting members, comprising:

(i)    three Qualifying Persons designated by Cosan in its sole discretion; provided that one of such three shall be ROSM while he is not Deceased or Disqualified (each as defined in the Joint Venture Agreement) or no longer willing to serve as a member of the Supervisory Board; and

(ii)    three Qualifying Persons designated by Shell in its sole discretion,

who shall each serve, subject to Sections ‎5.04 and ‎5.05, for a term of three years.

(c)    Subject to applicable law, there shall be no restriction on Cosan or Shell re-designating any then existing member of the Supervisory Board for any subsequent term of office.

(d)    The Parties hereto agree as follows:

(i)    If Shell fails to pay any amounts due and owing under clause 2.4(a) of the Framework Agreement at the time specified in that clause within 30 days of receipt of written notice from Cosan of a failure to make such timely payment, then interest shall accrue at the Default Interest Rate from the date of such receipt until payment is made and Shell will only be entitled to: (A) vote the JV Securities then Beneficially Owned by Shell at any Shareholders’ Meeting with respect to those matters set forth in Part 2 of Annex B (and Cosan shall otherwise be entitled to vote all of the JV Securities then Beneficially Owned by Shell at any Shareholders’ Meeting with respect to all other matters); and (B) have its remaining nominees on the Supervisory Board vote on those matters set forth in Part 4 of Annex D (and those nominees shall not be entitled to vote on any other matters whatsoever). The Chairperson of the relevant Shareholders’ Meeting shall refrain from counting any vote exercised in violation of this ‎Section 5.01(d).  Further, in such event, ‎Section 5.01(d) shall apply.  During the period from the date that any amount is owing by Shell in respect of any such amount (together

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with any accrued interest) is settled in full, any regular dividends due to Shell shall be set-off against amounts owing by Shell pursuant to the Shell Pledge Agreement; and

(ii)    If Shell makes any delinquent capital contribution in full (together with accrued interest) at any time on or before the date that is 90 days after the date that such capital contribution had been due, the governance rights of Cosan and Shell shall return to the status quo ante that pertained prior to such capital subscription contribution obligation.

(e)    If Shell’s or Cosan’s respective holdings of outstanding common shares of Downstream Co are reduced relative to the other such Shareholder for any reason (whether due to any of Section 5.01‎(d), ‎Section 7.06, ‎Section 7.07 or ‎Section 9.04 or otherwise) (the “Affected Shareholder”), then until such Section is no longer applicable, the following shall apply:

(i)    the size of the Supervisory Board may be increased or decreased by the other Shareholder; provided that, at any time after the completion of a Shell Partial Call Option (but before any completion of the Cosan Partial Call Option), in no event may the Supervisory Board contain less than eight members; and

(ii)    the Affected Shareholder shall be entitled to designate a number of Qualifying Persons to the Supervisory Board that is proportional at any such time to the percentage of then outstanding common shares held by such Affected Shareholder (or, as applicable, Cosan) (rounded downwards (but for this purpose, disregarding any rounding upwards effected in connection with the exercise and completion of any option under the Joint Venture Agreement), but in no event less than one.

Section 5.02.  Chairperson.  (a) Subject to Sections ‎5.02(d) and ‎5.02(f) the Shareholders shall appoint ROSM as the chairperson of the Supervisory Board (the “Chairperson”) and shall vote to ensure he is maintained in such position until at least the tenth anniversary of the Closing Date so long as he is willing and neither Deceased nor Disqualified (each as defined in the Joint Venture Agreement) but only for so long as he retains a Controlling interest (directly or indirectly) over Cosan’s interest in the Joint Venture.

(b)    If no Option (as defined in the Joint Venture Agreement) has been exercised by the expiry of the Cosan Option Exercise Period (as defined in the Joint Venture Agreement), the right of Cosan and Shell to appoint the Chairperson shall alternate between Cosan and Shell for three year periods, commencing immediately after the expiry of the Cosan Option Exercise Period

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(as defined in the Joint Venture Agreement).  For the initial three year period, Shell will appoint the Chairperson.

(c)    If Shell exercises the Shell Partial Call Option (as defined in the Joint Venture Agreement), upon completion of the Shell Partial Call Option: (i) the Shareholders shall procure that the role and responsibilities of the Chairperson shall be amended such that they shall be limited to those of chairing the meetings, and managing the affairs, of the Supervisory Board, together with any other roles and responsibilities required by Brazilian law for a chairperson of a sociedade anônima (provided that, for the avoidance of doubt, the Chairperson shall not have a casting or tie-breaking vote in the event of deadlock amongst the members of the Supervisory Board), and (ii) ROSM shall remain the Chairperson for so long as he is willing and neither Deceased nor Disqualified (each as defined in the Joint Venture Agreement), but only for so long as he retains a Controlling interest (directly or indirectly) over Cosan’s interest in the Joint Venture; provided that, if Cosan exercises the Cosan Partial Call Option (as defined in the Joint Venture Agreement), upon completion of the Cosan Partial Call Option, all of the governance rights described in this ‎Section 5.02(c) shall return to the status quo ante that pertained prior to its applicability, except that the right of Cosan and Shell to appoint the Chairperson shall alternate between Cosan and Shell (for each three year term), commencing immediately after the completion of the Cosan Partial Call Option.  For the initial such three year term, Shell will appoint the Chairperson.

(d)    If, prior to the expiry of the Cosan Option Exercise Period (as defined in the Joint Venture Agreement), ROSM is Deceased or Disqualified (each as defined in the Joint Venture Agreement) or no longer willing to serve as the Chairperson, then Shell shall have the right to designate any member of the Supervisory Board as the Chairperson (as ROSM’s replacement as Chairperson), and may, for the avoidance of doubt, replace such designee with any other member of the Supervisory Board in its sole discretion, until such time as the Joint Venture is terminated.

(e)    If either the Cosan Interest or the ROSM Interest (each as defined in the Joint Venture Agreement) is sold to an Unsolicited Third Party Offeror (as defined in the Joint Venture Agreement), immediately upon such sale (i) the Shareholders shall procure that the role and responsibilities of the Chairperson shall be amended such that they shall be limited to those of chairing the meetings, and managing the affairs, of the Supervisory Board, together with any other roles and responsibilities required by Brazilian law for a chairperson of a sociedade anônima; provided that, for the avoidance of doubt, the Chairperson shall not have a casting or tie-breaking vote in the event of deadlock amongst the members of the Supervisory Board; (ii) Shell will have the right to appoint, for an initial three year term, the Chairperson; (iii) following the expiry of such initial term, the Third Party Offeror shall have the right to appoint the Chairperson for a further

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three year term; and (iv) such right to appoint shall alternate every three years thereafter.

(f)    The responsibilities of the Chairperson are set forth in Annex C hereto.  The Chairperson shall not have a casting or tie-breaking vote in the event of deadlock amongst the members of the Supervisory Board.

Section 5.03.  Supervisory Board Members to Be Shareholders.  Each member of the Supervisory Board shall be a shareholder of the Downstream Co as set forth in this ‎Section 5.03.  Cosan shall assign one common share that it holds to each member of the Supervisory Board designated by Cosan pursuant to ‎Section 5.01(b), and Shell shall assign one common share that it holds to each member of the Supervisory Board designated by Shell pursuant to ‎Section 5.01(b), in each case, for so long as required in accordance with Brazilian Corporation Law.  The common shares assigned to the members of the Supervisory Board pursuant to this ‎Section 5.03 shall be deemed, for all purposes and effects of this Agreement, to be owned by the Shareholder assigning such common shares.  Each Shareholder undertakes to obtain from each member of the Supervisory Board designated by such Shareholder sufficient powers to exercise the voting rights attached to the assigned common shares in the Downstream Co’s Shareholders’ Meetings.  The common shares which were assigned to each member of the Supervisory Board shall automatically transfer back to Shareholder which assigned them in the event that such member of the Supervisory Board ceases, for any reason whatsoever, to be a member of the Supervisory Board.  Cosan and Shell will procure that all members of the Supervisory Board shall comply with all applicable law in relation to their eligibility to serve as members of the Supervisory Board for the purposes of complying with this ‎Section 5.03, each Shareholder will ensure that each of the members of the Supervisory Board which it nominates shall execute an agreement substantially in the form of the share assignment agreement attached hereto as Annex I.

Section 5.04.  Removal of the Supervisory Board Members.  (a) Each of Cosan and Shell agrees that, if at any time it is then entitled to vote for the removal of a member from the Supervisory Board, it shall not vote any of its JV Securities in favour of the removal of any member who shall have been designated pursuant to ‎Section 5.01or ‎Section 5.05, unless the Person entitled to designate or nominate that member shall have consented to his or her removal in writing; provided that, if the Person entitled to designate any member pursuant to ‎Section 5.01 shall request in writing the removal of such member, each Shareholder shall vote its JV Securities in favour of such removal.

(b)    If a Shareholder ceases to hold any JV Securities, such Shareholder shall procure the resignation of, or remove from office, any members of the Supervisory Board nominated by such Shareholder, at the time of, or immediately prior to, the time at which it ceases to hold such JV Securities.

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Section 5.05.  Vacancies on the Supervisory Board.  If there shall be any vacancy on the Supervisory Board (as a result of death, disability, retirement, resignation, removal or otherwise): (a) the Person or Persons entitled under ‎Section 5.01 to designate the member whose death, disability, retirement, resignation or removal resulted in that vacancy, subject to the provisions of ‎Section 5.01, may designate another individual (for the purposes of this ‎Article 5, the “Replacement Nominee”) to fill that vacancy and serve as a member of the Supervisory Board; and (b) subject ‎Section 5.01, each of Cosan and Shell shall procure that the Replacement Nominee is elected to the Supervisory Board. Whichever of Cosan and Shell has the right to designate a Replacement Nominee shall procure that one common share is transferred to such member of the Supervisory Board such that he or she shall become a shareholder of the Downstream Co in accordance with ‎Section 5.03.

Section 5.06.  Meetings of the Supervisory Board.  (a) The Supervisory Board shall hold a meeting at least once every calendar quarter and at any other time as may be requested by any three members of the Supervisory Board or the Chairperson.  Meetings shall be held at the headquarters of the Joint Venture or as may otherwise be agreed by the Supervisory Board. Any member of the Supervisory Board may attend any meeting via teleconference; provided that, unless (i) otherwise agreed by Cosan and Shell or (ii) the meeting is called with less than 10 Business Days’ notice pursuant to paragraph ‎(b) below, at least one member of the Supervisory Board nominated by each of Cosan and Shell shall attend in person.

(b)    Subject to the provisions of this Agreement, the Downstream Byelaws and all applicable law, the members of the Supervisory Board may regulate their proceedings as they think fit.  Every member of the Supervisory Board shall receive notice of a meeting at least 30 Business Days for regularly scheduled meetings, 10 Business Days for ad hoc meetings (including meetings to appoint the Interim CEO (as defined below) pursuant to ‎Section 6.05(b)) (and at least 3 Business Days’ notice for ad hoc meetings where any 3 members of the Supervisory Board or the Chairperson reasonably consider that the matter(s) to be discussed is of a commercially urgent nature) before the intended date of the meeting.  Notice of a meeting of the Supervisory Board is deemed to be duly given to a member of the Supervisory Board if it is sent in writing to him at his last known address or other address given by him to the Downstream Co for that purpose or given to him by electronic means to an address given by him to the Downstream Co for that purpose.  The notice shall state the time, date, place and agenda of the meeting, attaching copies, where possible, of the documents or proposals to be considered or discussed.  A member of the Supervisory Board may waive the requirement that notice be given to him of a meeting of directors or a committee of directors, either prospectively or retrospectively, and this requirement for notice can be dispensed with if all the members of the Supervisory Board are present at the meeting.

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(c)    The members of the Supervisory Board shall cause to be maintained minutes of all meetings of, and of all meetings of all committees of, the Supervisory Board.

(d)    The formal language of any meeting of the Supervisory Board shall be English (with contemporaneous interpretation into Portuguese at the request of any member of the Supervisory Board); provided that the minutes of the meetings shall be in English and Portuguese (but the Portuguese shall prevail).

Section 5.07.  Proxies for Supervisory Board Members.  Any member of the Supervisory Board may appoint any existing member of the Supervisory Board willing to act, without the approval of the other members of the Supervisory Board, to attend and vote at meetings in accordance with the instructions of such appointing member of the Supervisory Board. Such appointor may remove from office any such proxy so appointed by him.  Any member of the Supervisory Board voting by proxy shall formalize his vote in writing by letter, facsimile or e-mail promptly following the meeting at which the vote was cast by his proxy. Such letter, facsimile or e-mail shall be recorded in the book of minutes of meetings of the Supervisory Board.

Section 5.08.  Quorum of the Supervisory Board.  The quorum of the Supervisory Board shall be two-thirds of the members designated by Cosan and two-thirds of the members designated by Shell, except that, (i) in the circumstances described in ‎Section 5.12, the quorum of the Supervisory Board shall require all three members designated by either Shareholder that is not the Indemnifying Party or the conflicted Shareholder (as the case may be) and (ii) if the circumstances as described in ‎Section 5.01(d) shall apply, the quorum of the Supervisory Board shall be two-thirds of the members designated by the non-Affected Shareholder and two-thirds of the members designated by the Affected Shareholder (except that, if a quorum does not exist at a particular meeting due to the absence of any of the designees of the Affected Shareholder, then any Shareholder may require the meeting to be adjourned for no less than 3 Business Days, and at the resumed meeting on the matters to have been covered at the adjourned meeting only, the quorum of the Supervisory Board shall require only a majority of the members designated by the non-Affected Shareholder.  A person voting as a proxy for a member of the Supervisory Board shall, if his appointor is not present, be counted in the quorum in his own capacity and in his capacity as a proxy.

Section 5.09.  Action by the Supervisory Board.  Part 1 of Annex D hereto sets forth the functions of the Supervisory Board.  Subject to Sections ‎5.01(d), 5.01(e), ‎7.06, ‎7.07 and ‎9.04, actions of the Supervisory Board shall require the affirmative vote of at least, in respect of the matters set forth in Part 2 of Annex D, five of the six members, and, in respect of the matters set forth in Part 3 of Annex D, four of the six members of the Supervisory Board, in each case at which a

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quorum is present.  If the Supervisory Board cannot reach a decision in respect of any matter set forth in Annex D, such decision will be referred to the Shareholder Representatives for resolution pursuant to Annex A to the extent possible, where requested by any member of the Supervisory Board.

Section 5.10.  Expenses and Compensation of Supervisory Board Members.  The Shareholders shall cause the Downstream Co to pay all reasonable out-of-pocket expenses incurred by each member of the Supervisory Board in connection with attending regular and special meetings of the Supervisory Board and any committee thereof, and any such meetings of the board of directors of any Subsidiary of the Downstream Co and any committee thereof, in addition to any further compensation for the members of the Supervisory Board that may be approved from time to time by the Shareholders at any Shareholder meeting.

Section 5.11.  Committees.  The Supervisory Board shall create any committees required pursuant to any agreement between Cosan and Shell and may create and operate any other committees as it may determine; provided that the Supervisory Board shall create and maintain the committees as set out in, and in accordance with the provisions of, Annex G.  Designees of Cosan and Shell shall be entitled to equal representation on any committee of the Supervisory Board.

Section 5.12.  Shareholder Indemnification Matters; Conflicts of Interest. (a)Notwithstanding anything in this Agreement to the contrary, if the Downstream Co is an Indemnified Party (as defined in the Framework Agreement) and brings a Claim (as defined in the Framework Agreement) against a Shareholder who is the Indemnifying Party (as defined in the Framework Agreement), in no event shall the members of the Supervisory Board designated by the Indemnifying Party be entitled to vote on any matters presented to the Supervisory Board with respect to the bringing of such Claim; provided, however, that members of the Supervisory Board designated by the Indemnifying Party shall have the right to participate in any and all discussions concerning such Claim and shall have the opportunity to express their views and opinions with respect to such Claim.  The members of the Supervisory Board designated by the Indemnified Party shall have the sole power and authority to vote on all matters with respect to the bringing of such Claim.

(b)    In the event that any competitively sensitive information is to be discussed or reviewed at any meeting of the Supervisory Board and the participation in any such discussion or the receipt of any such information by any Supervisory Board member would (i) present a conflict of interest in respect of the interests of the Shareholder who appointed such member, (ii) wouldrisk placing the Downstream Co in a potentially competitively disadvantaged position or (iii) would reasonably be expected to violate applicable antitrust or competition laws, such member shall be required to recuse himself or herself from such

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discussion and shall not be entitled to receive such information; provided, however, that, on any vote in respect of any such matter, the other designees to the Supervisory Board of the Shareholder who also designated such member shall be entitled to exercise a proxy to vote on behalf of such member on that matter.  In connection with this ‎Section 5.12(b), each member of the Supervisory Board shall certify within 20 Business Days of the end of each fiscal year of the Downstream Co that he or she has not had access to commercially sensitive information of the JV Entities in the preceding fiscal year in violation of this Section.

(c)    Notwithstanding anything in this Agreement to the contrary, in no event shall the members of the Supervisory Board designated by Shell or Cosan have the right to vote on any transactions, actions or agreements between Downstream Co or any of its Subsidiaries, on the one hand, and such Shareholder or any of its Affiliates, on the other.

ARTICLE 6

Executive Board

Section 6.01.  Executive Board.  The Downstream Co shall have an executive board (Diretoria) (the “Executive Board”).  The Executive Board shall consist of the following voting members: (i) the chief executive officer (the “CEO”); (ii) the chief financial officer (the “CFO”); (iii) the chief operating officer in respect of the businesses operated by the Downstream Co (the “COO (Downstream)”); (iv) an executive officer who shall be the same person who is appointed as the chief operating officer of Sugar and Ethanol Co (the “COO (Sugar and Ethanol)”); and (v) such additional members as may be determined by approval of five of the six members of the Supervisory Board; provided that at no time shall there be more than eight members of the Executive Board.  The members of the Executive Board and all Joint Venture staff shall serve the interests of the Joint Venture, and no such member shall be deemed to represent any particular Shareholder.  Each member of the Executive Board shall be an executive of, or formally seconded to (subject to the approval of four of the six members of the Supervisory Board pursuant to Section ‎7.02), the Downstream Co and shall reside in Brazil.  Subject to ‎Section 6.04, each member of the Executive Board (other then the CEO) shall serve for a term of three years, and the CEO shall serve for a term of two years (subject in each case to re-election).

Section 6.02.  Meetings of the Executive Board.  (a) The Executive Board shall hold a meeting at least once every calendar month and at such other time as may be requested by the CEO.  Meetings shall be held at the headquarters of the Joint Venture or as may otherwise be agreed by the Executive Board.  Any member of the Executive Board may attend any meeting via teleconference unless the CEO notifies the other members that such meeting must be held with the attendance of all members in person.

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(b)    Subject to the provisions of this Agreement, the Downstream Byelaws and all applicable law, the members of the Executive Board may regulate their proceedings as they think fit.

(c)    The members of the Executive Board shall cause to be maintained minutes of all meetings of the Executive Board.

Section 6.03.  Action by the CEO.  Annex E hereto sets forth the functions of the CEO.  Except as set forth below, all actions and decisions of the CEO may only be taken  in compliance with the responsibilities and powers set forth in the Manual of Authorities. Subject to the above and the limitations set out in Annex F hereto, the CEO may delegate certain decision making powers or duties to the Senior Management (as defined below) in his sole discretion.

Section 6.04.  Removal of Executive Board Members.  (a)The CEO may be removed, with or without cause, prior to the end of his or her term, by an affirmative vote of five of the six members of the Supervisory Board.  Subject to ‎Section 6.05, any member of the Executive Board (other than the CEO) may be removed from his position on the Executive Board, with or without cause by either the CEO (in which case the Shareholders shall be obligated to cause all of the Supervisory Board members to vote for such individual’s removal) or upon an affirmative vote of five of the six members of the Supervisory Board.

(b)    At the end of any two-year term of office of the CEO, either Cosan or Shell may propose the removal of the CEO to the other Shareholder by providing the other Shareholder with notice setting forth in writing in reasonable detail a fully reasoned and good faith explanation of the reasonable grounds for such removal and evidence why and how the CEO has failed in his responsibilities (together with any supporting documentation deemed reasonably necessary by such Shareholder to support such removal), and in this case, (i) if the other Shareholder disagrees with this conclusion, it shall provide written notice to the notifying Shareholder of its disagreement, (ii) the Shareholder Representatives shall meet as promptly as practicable to discuss such matter and (iii) if the Shareholder Representatives are unable to resolve such disagreement within 20 Business Days of the initiating notice and the notifying Shareholder still wishes to effect the CEO’s removal, the notified Shareholder shall, upon receipt of notice to this effect, be obligated to cause all of the members of the Supervisory Board that it has appointed to vote for the removal of the CEO pursuant to ‎Section 6.04(a).

Section 6.05.  Vacancies on the Executive Board.(a) Subject to the remainder of this ‎Section 6.05 and to ‎Section 7.07, if any individual serving as CEO shall leave the employ of the Downstream Co or is otherwise no longer serving in that capacity (whether due to replacement, expiration of term or otherwise), then:

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(i)    the Supervisory Board shall discuss and define the profile(s) they consider desirable in a CEO;

(ii)    each Shareholder shall propose two candidates to become the CEO, taking into account such profile(s), which persons may be vetoed by the other Shareholder (but solely for reasons related to such person’s qualifications, experience, track record, personal profile, past compliance with the General Business Principles of the Joint Venture, and such person’s ability to represent the interests of the Joint Venture above those of either Shareholder);

(iii)    if the candidates proposed by a Shareholder are vetoed pursuant to paragraph ‎(ii) above, such Shareholder may propose additional candidates until both Shareholders have agreed on at least two mutually agreeable candidates; and

(iv)    the Chairperson shall nominate one of the proposed candidates for approval by the Supervisory Board, and the Shareholders shall procure that their respective appointees to the Supervisory Board shall vote to approve the appointment of the individual nominated by the Chairperson.

(b)    Until such time as the Supervisory Board elects the replacement CEO pursuant to Section ‎6.05(a), an interim CEO (the “Interim CEO”) shall serve in his or her place.  The Supervisory Board shall endeavour to appoint the Interim CEO by approval of five of the six members of the Supervisory Board within two weeks of such vacancy; provided that if the Supervisory Board does not approve an Interim CEO within such time, the COO (Sugar and Ethanol), the COO (Downstream) and the CFO shall elect the Interim CEO from among the members of the Executive Board by a simple majority vote, and the Shareholders shall procure that their respective appointees to the Supervisory Board shall vote to approve the appointment of the person so elected.  For the avoidance of doubt, there shall be no Interim CEO until a majority is obtained. The Interim CEO shall serve for a maximum of 90 days, at which time, if no replacement CEO has been elected, a new Interim CEO shall be selected using the same procedures described above in this ‎Section 6.05(b).  No member of the Executive Board shall serve twice as Interim CEO before every other member of the Executive Board has served once.

(c)    Subject to the remainder of this ‎Section 6.05 and to ‎Section 7.07, if any individual serving: (i) as a member of the Executive Board (other than CEO); or (ii) in any other position of the Joint Venture who reports directly to the CEO (each such individual, a “Direct Report”), shall leave the employ of the Downstream Co or is otherwise no longer serving in that capacity (whether due to replacement, expiration of term or otherwise), then the CEO shall submit to the

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Supervisory Board a nominee, who in the case of the CFO, the COO (Sugar and Ethanol) or the COO (Downstream) shall be selected from among two individuals submitted by: (A) in the case of the CFO, the Shareholder other than the Shareholder who submitted the nominee who was appointed the CEO; (B) in the case of the COO (Sugar and Ethanol), Cosan; and (C) in the case of the COO (Downstream), Shell.  Approval of such nominee shall require an affirmative vote of at least five out of the six members of the Supervisory Board.  The nominee shall be selected based on both individual merits and capabilities as well as potential contribution to the Executive Board (or, in the case of Direct Reports, his or her relevant team), with the objective of assembling the best team capable of delivering the Joint Venture strategy and Business Plan.  Members of the Supervisory Board may decline to approve any such nominee based only on lack of relevant qualifications, experience, track record, personal profile, past compliance with the General Business Principles of the Joint Venture, and/or such person’s ability to represent the interests of the Joint Venture above those of either Shareholder.  If the Supervisory Board declines to nominate the nominee, the CEO may submit a different candidate (selected from among two new individuals designated by the Shareholder entitled to do so under this paragraph ‎(c)) to be approved pursuant to the procedures specified in this paragraph ‎(c) above until an individual is approved to serve in such capacity by the Supervisory Board.  In the case of any other position on the Executive Board not otherwise addressed in this ‎Section 6.05(c), the process set forth above shall be followed save that the CEO shall not be required to select his nominee from any pool of persons selected by any Shareholder.

(d)    If no Option (as defined in the Joint Venture Agreement) has been exercised by the expiry of the Cosan Option Exercise Period (as defined in the Joint Venture Agreement), then: (i) Shell shall have the right to designate any person as the CEO (in replacement of the then serving CEO), for a three-year term (commencing immediately); (ii) Cosan shall have the right to designate the CFO (in replacement of the then serving CFO) for a three-year term (commencing immediately); and (iii) the right of each of Shell and Cosan to designate the CEO and CFO shall thereafter alternate between them for a period of three years for each such designating party. For the avoidance of doubt, ‎Section 6.05(c) will continue to apply in respect of all other positions on the Executive Board.

(e)    In the event ROSM is Deceased or Disqualified (in each case as defined in the Joint Venture Agreement) or unwilling to serve as the Chairperson prior to the expiry of the Cosan Option Exercise Period (as defined in the Joint Venture Agreement), then: (i) Shell shall have the right to designate any person as the CEO (in replacement of the then serving CEO), for both the remainder of the then current term and for all subsequent terms; (ii) ROSM (or his successor in law) shall thereafter have the right to designate the CFO (in replacement of the then serving CFO) for both the remainder of the then current term and for all

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subsequent terms.  For the avoidance of doubt, paragraph ‎(c) will continue to apply in respect of all other positions on the Executive Board.

(f)    If either the Cosan Interest or the ROSM Interest (each, as defined in the Joint Venture Agreement) is sold to an Unsolicited Third Party Offeror (as defined in the Joint Venture Agreement), immediately upon such sale, Shell will have the right to appoint the CEO (in replacement of the then serving CEO) for the then-current term, and the Third Party Offeror (as defined in the Joint Venture Agreement) will have the right to appoint the CFO (in replacement of the then serving CFO) for the then-current term.  Following the expiration of the then-current term, the Third Party Offeror shall have the right to appoint the CEO for a three year term and Shell shall have the right to appoint the CFO for a three year term, and such appointment rights with respect to the CEO and CFO shall alternate every three years thereafter.  For the avoidance of doubt, paragraph ‎(c) will continue to apply in respect of all other positions on the Executive Board.

(g)    Each Shareholder shall, and shall cause each member of the Supervisory Board to, approve the appointment or removal of any individual appointed or removed pursuant to, and in accordance with the other provisions of this ‎Section 6.05.

Section 6.06.  Compensation.  The members of the Executive Board shall be compensated in accordance with the decisions of the Supervisory Board taken pursuant to Annex D and as approved by the Shareholders in accordance with Annex B.

Section 6.07.  Committees.  The Executive Board shall create any committees required pursuant to agreement between Cosan and Shell and may create and operate any other committees as it may determine.

ARTICLE 7

Other Governance Matters

Section 7.01.  Manual of Authorities.  The Shareholders shall cause the Supervisory Board to adopt on the date of this Agreement, or as soon as practicable thereafter, a manual of authorities (the “Manual of Authorities”) in a form agreed by Cosan and Shell, consistent with the levels of authority set out in Annex D, Annex E and Annex F hereof. The Manual of Authorities shall set forth the extent and limitations of authority, in respect of the taking of decisions on behalf of the Downstream Co, which each executive of the Downstream Co has been granted and shall be registered at the Downstream Co’s headquarters.

Section 7.02.  Secondments.  (a) The Shareholders may provide secondees to serve as members of the Executive Board.  Subject to ‎Section 6.05, if a

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secondee of a Shareholder is nominated to serve as CEO, as any member of Senior Management or in any role reporting directly to any member of Senior Management, approval of such nominee shall require an affirmative vote of at least four of the six members of the Supervisory Board.

(b)    Subject to ‎Section 6.05, a secondee of a Shareholder may be appointed to serve in any capacity in the Joint Venture (other than those specified in ‎Section 7.02(a)) with approval of the CEO only.

(c)    Officers or employees of the Downstream Co or any of its Subsidiaries may be seconded to Cosan or Shell, or any of their respective Affiliates.  Cosan, Shell and the Downstream Co shall together consider opportunities for, and develop a plan in respect of, any such secondments on a yearly basis (with an initial meeting for such purpose being held within 180 days of the Closing Date).  In the event that Cosan or Shell agrees to accept a secondee from the Downstream Co or any of its Subsidiaries, the secondment policies, procedures and confidentiality obligations customary for secondees to the entity (and any specific department) to which such officer or employee is proposed to be seconded shall apply to the extent possible.

(d)    Unless otherwise agreed in writing between the Shareholders, all employees of Shell (or any of its Affiliates) transferred to the Joint Venture at Closing shall no longer be employees of Shell (or the relevant Affiliate), but shall be employees of the Joint Venture following Closing.

Section 7.03.  Dismissals.  (a) The CEO (or any person otherwise agreed by four or more members of the Supervisory Board) will ensure that any breach of the Key Policies by an employee of, or a secondee to, the Downstream Co, is investigated and, following such investigation, shall ensure that such action is taken as he (or his designate) considers appropriate in relation to such breach, which may include dismissal.

(b)    Subject to applicable law and any policies adopted by the Supervisory Board, any employee of the Downstream Co (other than a member of the Executive Board) may be removed, with or without cause, by the CEO.

Section 7.04.  Subsidiary Governance.  The senior management (and, where existent, the Conselho de Administração) of each subsidiary of the Downstream Co shall be selected (to the extent not restricted by any governing document of a subsidiary which is not wholly owned) by the CEO of the Downstream Co or his delegate; provided that a simple majority of the Supervisory Board may veto any such decision and select alternative persons for such roles.

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Section 7.05.  Senior Management.  The senior management of the Downstream Co, which shall include the members of the Executive Board, excluding the CEO, and any Direct Report (the “Senior Management”) have the right to make decisions in respect of the Downstream Co to the extent set out in Annex F hereto, without the need for further approval of the CEO or the Supervisory Board. Except as set forth in Annex F, all actions and decisions of the Senior Management may only be taken in compliance with the responsibilities and powers set forth in the Manual of Authorities.

Section 7.06.  Indemnity Delinquency Period.  During the Indemnity Delinquency Period, (a) Cosan will only be entitled to: (i) vote the shares in the Downstream Co then Beneficially Owned by Cosan at any meeting of the shareholders of Downstream Co with respect to those matters set out in Part 2 of Annex B (and Shell shall otherwise be entitled to vote all of the shares in the Downstream Co then Beneficially Owned by Cosan at any such meeting with respect to all other matters); and (ii) have its remaining nominees on the Supervisory Board of the Downstream Co vote on those matters set out in Part 4 of Annex D (and those nominees shall not be entitled to vote on any other matters whatsoever); (b) the chairperson of the relevant shareholders’ meeting shall refrain from counting any vote exercised in violation of the immediately preceding clause and, in this case, ‎Section 5.01(d) shall apply and (c) if Cosan makes payment in full of the relevant Determined Indemnity Amount (as defined in the Framework Agreement) (plus, as applicable, any accrued interest pursuant to clause ‎14.7 (Default interest) of the Framework Agreement) at any time on or before the date that is 90 days after the date on which the relevant Determined Indemnity Amount (as defined in the Framework Agreement) was determined, the governance rights of Cosan and Shell shall return to the status quo ante that pertained prior to such payment obligation.

Section 7.07.  Governance after any Completion of a Shell Partial Call Option.  If Shell exercises the Shell Partial Call Option (as defined in the Joint Venture Agreement), upon completion of the Shell Partial Call Option, (a) Shell shall have the right to remove, appoint and designate each member of the Executive Board (other than the CFO), and Cosan shall have the right to remove, appoint and designate the CFO, and (b) Cosan will only be entitled to: (i) have its remaining nominees on the Supervisory Board of the Sugar and Ethanol Co and the Downstream Co vote on those matters set out in Part 5 of Annex D (and those nominees shall not be entitled to vote on any other matters whatsoever); (ii) the chairperson of the relevant shareholders’ meeting shall refrain from counting any vote exercised in violation of paragraph (i) above; and (iii) in this case, ‎Section 5.01(d) shall apply; provided that, if Cosan exercises the Cosan Partial Call Option (as defined in the Joint Venture Agreement), upon completion of the Cosan Partial Call Option, all of the governance rights described in this ‎Section 7.07 shall return to the status quo ante that pertained prior to its applicability, except that:

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(i)    Shell shall have the right to designate (including the right to remove and replace) any person(s) as the Chairman and CEO (in replacement of the then serving Chairman and CEO), for a three-year term (commencing immediately);

(ii)    Cosan shall have the right to designate (including the right to remove and replace) the CFO (in replacement of the then serving CFO) for a three-year term (commencing immediately); and

(iii)    the right of each of Shell and Cosan to designate (including the right to remove and replace) the Chairman and CEO, on the one hand, and CFO, on the other, shall thereafter alternate between them (for each three year term) for each such designating party;

provided that, for the avoidance of doubt, in this case, ‎Section 6.05(c) will continue to apply in respect of all other positions on the Executive Board.

ARTICLE 8

Scope of the Downstream Co; Acquisitions; Business Opportunities

Section 8.01.  Scope of the Downstream Co.  The principal business of the Downstream Co will be:

(a)    the supply and distribution, commercialization and sale of fuel products within Brazil;

(b)    acting as an agent for the sale of retail and aviation lubricants within Brazil; and

(c)    the further development (and licensing) of Sugar and ethanol (and not only Ethanol) production-related technology globally, including in accordance with Article 7 of the Sugar and Ethanol Co Shareholders’ Agreement;

(together, the “Business”).

Section 8.02.  Restrictions.  For so long as both Cosan and Shell are Shareholders, none of the Shareholders (or any of their Affiliates) shall engage in the Business in Brazil other than through the Downstream Co (or another JV Entity); provided that any of the Shareholders (or any of their Affiliates) may engage in the further development of second-generation technology in Brazil (and, for the avoidance of doubt, Shell (or any of its Affiliates) may continue the Existing Academic Projects (as defined in the Sugar and Ethanol Co Shareholders’ Agreement) in Brazil).

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Section 8.03.Acquisitions.

(a)    To develop the Business, the Downstream Co will consider the acquisition of, or investment in, third party businesses or assets within the scope of the Business, whether directly, by way of joint venture or any other form of business combination (any such transaction, an “Acquisition”).

(b)    If any Shareholder or any of its Affiliates, or the Downstream Co, identifies any opportunity for an Acquisition, such Person shall refer the identified opportunity to the Executive Board of the Downstream Co for analysis before itself conducting any detailed analysis.

(c)    The Downstream Co shall not make or enter into any agreement to make any Acquisition without the prior approval of the Supervisory Board pursuant to Annex D or which would require any direct financing from Cosan and/or Shell; provided that, when considering any Acquisition, the Supervisory Board shall give due regard to whether the Acquisition would (i) be consistent with the policies of the Joint Venture then existent (including, for the avoidance of doubt, the Key Policies); (ii) in the reasonable opinion of the Supervisory Board, meet the internal rate of return and other operational thresholds which may be specified by the Supervisory Board; and (iii) would result in an increase to the leverage ratio beyond any limit specified by the Supervisory Board.

ARTICLE 9

Distribution and Dividend Policy; Goodwill; NOLs; Pledge of Dividends; Capital Contributions

Section 9.01.  Distributions and Dividend Policy.  Unless otherwise agreed by the Shareholders in accordance with the provisions of this Agreement and applicable law, the Shareholders shall ensure that the net profit registered in the fiscal year, computed after the deductions and adjustments provided for in the Brazilian Corporation Law, will be subject to the following allocation order:

first, five per cent (5%) of the net profit to the constitution of the legal reserve, until it reaches (x) twenty per cent (20%) of the capital stock or (y) thirty percent (30%) of the capital plus any capital surplus, and which will never exceed the lower amount of (x) and (y);

second, payment of dividends to the holders of the Downstream B Shares and the Downstream C Shares, the amount of which will be variable and calculated in accordance with ‎Section 9.02 and, if no such payment is due in accordance therewith, payment of fixed dividends to the holders of the Downstream B Shares and the Downstream C Shares in an amount of BRL 0.01 (one centavo) only;

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third, payment of fixed dividends to the holders of the preferred ‘A’ sharesin an amount of BRL 0.01 (one centavo) only;

fourth, payment of a mandatory dividend of 1% of the net profits;

fifth, payment to the Downstream Co’s statutory reserve (reserva estatutária) for operations and projects, in an amount agreed by the holders of 80per cent. of the voting shares of the Downstream Co; provided that in no event shall (a) such amount exceed 80% of net profits or (b) such statutory reserve exceed 80% of Downstream Co’s share capital; and

sixth, payment of the remaining amount as dividends to the holders of thecommon shares in accordance with any determination at the annual Shareholders’ Meeting (or as otherwise approved by the Shareholders);

provided that, in setting the payments of amounts under this Section 9.01, theShareholders agree that (a) the Downstream Co shall seek to maximize the amount of profits to be distributed to the Shareholders under this Section 9.01 and (b) the amount paid shall be consistent with the leverage ratio objectives and capital investment requirements of the Joint Venture as determined by the Supervisory Board.

Further, the decision to make any distribution pursuant to this Section 9.01 in the form of either IOC or dividends shall be made by the Supervisory Board; provided that (a) the Supervisory Board will decide whether to distribute profitsby way of IOC or by way of dividends; (b) the Supervisory Board shall determine the relative net Tax effects of paying IOC relative to dividends and shall select the option that is most beneficial for the Shareholders combined (including when taking into account any indirect Tax benefits to a shareholder by virtue of such Shareholder’s interest in the JV Entities) and (c) if paying distributions by way of IOC would result in one of the Shareholders receiving an amount, net of all actual Tax effects (including when taking into account any indirect Tax benefit by virtue of a Shareholder’s interest in the JV Entities), lower than that which it would have received had such distributions been paid as dividends, the other Shareholder shall make such payments to the first such Shareholder as necessary to ensure that such first Shareholder receives, net of actual Tax effects, an amount in cash per share no less than it would have received had such distributions been paid as dividends.

Section 9.02. Goodwill and NOL.

(a)          The Parties acknowledge that, as a result of the contributions to the Joint Venture made by or caused to be made by: (i) Cosan, the Downstream Co may be able to reduce its liability for CIT after the Closing Date due to amortization of Cosan Goodwill; and (ii) Shell, the Downstream Co may be able

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to reduce its liability for CIT after the Closing Date from the use of Shell Pre-Closing NOLs.

(b)          The amounts in BRL of Cosan Goodwill and Shell Pre-Closing NOLs of the Downstream Co, together with the anticipated approximate amounts of the Cosan Tax Savings and Shell Tax Savings, at the Closing Date, will be delivered in writing by Cosan to Shell (in the case of Cosan Goodwill and Cosan Tax Savings) and by Shell to Cosan (in the case of Shell Pre-Closing NOL and Shell Tax Savings) within 20 Business Days after Closing.

(c)          For each CIT Year: (i) the holders of the Downstream B Shares shall be entitled to a Distribution equal in the aggregate to the Cosan Tax Savings of the Downstream Co for such CIT Year, and (ii) the holders of the Downstream C Shares shall be entitled to a Distribution equal in the aggregate to the Shell Tax Savings of the Downstream Co for such CIT Year.

(d)          If, as a result of an audit by a Governmental Authority or of direct action taken by the Downstream Co before the initiation of an audit by a Governmental Authority purporting to investigate the respective Tax matter, the figure in respect of the CIT Taxable Base or NOL of the Downstream Co is different from the figure previously used in respect thereof to calculate the Cosan Tax Savings or Shell Tax Savings for the same CIT Year such that the actual Cosan Tax Savings or Shell Tax Savings, respectively, are: (i) greater than the amount in respect of which prior Distributions have been made for the same CIT Year, then the holders of the Downstream B Shares or Downstream C Shares (as the case may be) shall be entitled to an additional Distribution equal to such excess, which shall be paid in accordance with paragraph (g); or (ii) less than the amount in respect of which prior Distributions have been made for the same CIT Year, then the holders of the Downstream B Shares or Downstream C Shares (as the case may be) that received the excess amount pursuant to this Section 9.02 shall repay that amount (plus, solely if the amendment directly relates to the Cosan Goodwill or to the Shell Pre-Closing NOL (as the case may be), and not to other items of the CIT Taxable Base or NOL, any penalties, adjustments, costs and expenses incurred as a result of the related unpaid CIT or the repayment under this paragraph (ii)) to the Downstream Co so as to put it in the same after-Tax cash position as if there had been made no excess Distributions and no corresponding adjustments in the CIT Taxable Base or NOL; and in the case of (i) and (ii), any payments due to, or from, the Downstream Co shall be made as a single payment in BRL within 30 days of the date on which the revised figure for the actual Cosan Tax Savings or Shell Tax Savings (as the case may be) is finally determined (X) by means of a judicial decision, arbitral award or binding order of a Governmental Authority with competent jurisdiction (in each case without possibility of appeal or where the time for appeal has expired), or (Y) directly by the Downstream Co before the initiation of an audit by a Governmental Authority purporting to investigate the respective Tax matter.

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(e)          Notwithstanding the other provisions of this Section 9.02, the Distributions provided by paragraphs (c) and (d) for any CIT Year shall be reduced (but not below zero, except as contemplated in this Section 9.02) to the extent necessary so that, on a cumulative basis with respect to all CIT Years from the Closing Date through the end of such CIT Year, the aggregate Distributions with respect to: (i) the Downstream B Shares for all such CIT Years do not exceed the single Distribution with respect to the Downstream B Shares that would be determined under paragraphs (c) and (d) if all such CIT Years were treated as a single CIT Year, and (ii) the Downstream C Shares for all such CIT Years do not exceed the single Distribution with respect to the Downstream C Shares that would be determined under paragraphs (c) and (d) if all such CIT Years were treated as a single CIT Year.

(f)           If the reductions required pursuant to paragraph (e) exceed the amount of any Distribution otherwise due to holders of Downstream B Shares or Downstream C Shares (as the case may be): (i) such excess amount shall be applied in the calculation of Distributions in any subsequent CIT Years to reduce any Distributions otherwise then due to holders of Downstream B Shares or Downstream C Shares (as the case may be); and (ii) upon the termination of the Joint Venture, the holders of Downstream B Shares or Downstream C Shares (as the case may be) at the time of such termination, shall promptly pay any remaining excess amount (after applying the provisions of paragraph (f)(i) above) to the Downstream Co (or to any successor in law) so as to put the Downstream Co (or any successor in law) in the same after-Tax cash position as if there had been no excess Distributions and no corresponding adjustments in the CIT Taxable Base or NOL; provided that any such remaining excess amount shall first be applied to offset amounts, if any, owed to such holders of Downstream B Shares or Downstream C Shares (as the case may be) by the Downstream Co.

(g)         Each Distribution provided for under this Section 9.02 shall be: (i) unless otherwise specified herein paid as a single payment in BRL and made within 20 Business Days of the statutory deadline for filing the CIT Tax Return with respect to that CIT Year for the Downstream Co; and (ii) in case of a Distribution to holders of Downstream B Shares and holders of Downstream C Shares, payable as dividends.

(h)          The Downstream Co shall maintain: (i) management accounts in a form sufficient for the purposes of determining the amounts of any Distributions in any CIT Year; and (ii) records of the amounts of any Distributions paid with respect to any CIT Year to the holders of Downstream B Shares and Downstream C Shares.

(i)         For the CIT Year in which: (A) any final amortization or deductions on account of Cosan Goodwill and Cosan Goodwill NOL are realized or are to be realized, the amount of Cosan Tax Savings provided under Section 9.02(c) in

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respect of such CIT Year shall be paid to the holders of the Downstream B Shares in full redemption of the outstanding Downstream B Shares (to the extent such Cosan Tax Savings have not previously been paid as Distributions), and (B) any final deductions on account of Shell Pre-Closing NOL are realized or are to be realized, the amount of Shell Tax Savings provided under Section 9.02(c) in respect of such CIT Year shall be paid to the holders of the Downstream C Shares in full redemption of the outstanding Downstream C Shares (to the extent such Shell Tax Savings have not previously been paid as Distributions).

(j)           If in any fiscal year the Downstream B Shares or the Downstream C Shares, as the case may be, are to acquire voting rights in view of the provisions of Paragraph First of Article 111 of the Brazilian Corporation Law, Cosan and Shell shall initiate good faith discussions to agree on the most expedient and cost-effective solution for all Parties to maintain at all times the same economic rights, equity interests and voting interests as if such shares had not acquired voting rights. Until a solution is agreed and implemented by the Shareholders, as applicable (i) the holders of the Downstream B Shares shall refrain from exercising any voting rights acquired by the Downstream B Shares and (ii) the holders of the Downstream C Shares shall refrain from exercising any voting rights acquired by the Downstream C Shares.

Section 9.03. Fiscal and Accounting Year. The Parties and the Downstream Co shall use reasonable efforts to ensure that the fiscal and accounting year (exercicio social) of the Downstream Co shall commence by January 1, 2012 and, in any event, shall ensure that this is the case from January 1, 2013 if approved by a majority of the Supervisory Board. In the event that any fiscal and accounting year of the Downstream Co does not commence on January 1st, the Downstream Co undertakes to hire the External Auditors to perform an additional audit in relation to its accounts for each financial year from (a) the date hereof to December 31st of this year and (b) from January 1st to December 31st in each subsequent year, in each case, within a scope to be determined by Shell (acting reasonably).

Section 9.04. Agreed Capital Contributions.

(a)          If:

(i)         Cosan and Shell agree that the Downstream Co requires further equity capital;

(ii)        either Cosan or Shell, together with a majority of the Executive Board, reasonably determines that it is likely that the Downstream Co will default on any of its material debt obligations and/or become unable to pay its debts as they fall due or is otherwise determined

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to be insolvent, in each case, within 90 days, and therefore requires further equity capital; or

(iii)      after completion of the Shell Partial Call Option, but before any completion of the Cosan Partial Call Option (in each case, as defined in the Joint Venture Agreement), the Supervisory Board determines that the Downstream Co requires further equity capital based on the then current Business Plan or due to any unforeseen capital requirement (including a potential default or insolvency event within 90 days) that may arise after the preparation of such Business Plan (in this latter case, as determined by the Supervisory Board);

then the Downstream Co shall immediately serve notice on Cosan and Shell requiring a capital contribution, by way of subscription for common shares by Cosan and Shell in equal proportions, in an amount, in the case of the scenario contemplated in paragraph (i) above, as agreed between Cosan and Shell, in the case of the scenario contemplated in paragraph (ii) above, the minimum amount that such parties agree would be reasonably necessary to ensure that the Downstream Co remains solvent for the following 12 month period or, in the case of the scenario contemplated in paragraph (iii) above, pro rata between Cosan and Shell in accordance with their holdings of common shares in the Downstream Co at such time and in the manner contemplated by Section 9.04(d).

(b)          In the circumstances contemplated by paragraphs (i) or (ii) of Section 9.04(a), if either Cosan or Shell (the “Non-Participating Party”) does not, within 20 Business Days of the capital call (the “Deadline”), confirm in writing it will make such a contribution in full or confirms that it will make a contribution in part, the other (the “Participating Party”) will be entitled to subscribe for additional shares equal in value to the amount of the Non-Participating Party’s shortfall. Within 30 days of the lapse of the Deadline, the Non-Participating Party will only be entitled to: (i) vote the JV Securities then Beneficially Owned by it at any Shareholders’ Meeting with respect to those matters set forth in Part 2 of Annex B (and the Participating Party shall otherwise be entitled to vote all of the JV Securities then Beneficially Owned by the Non-Participating Party at any Shareholders’ Meeting with respect to all other matters); and (ii) have its remaining nominees on the Supervisory Board vote on those matters set forth in Part 4 of Annex D (and those nominees shall not be entitled to vote on any other matters whatsoever). The chairperson of the relevant Shareholders’ Meeting shall refrain from counting any vote exercised in violation of this Section 9.04(b). Further, in such event, the Non-Participating Party shall remove, and the Participating Party shall replace, one of the individuals appointed by the Non- Participating Party from his or her position pursuant to Section 5.01(b). For the purposes of determining the price of any capital contribution, the Downstream Co shall be valued on a fair market value basis based on its Base Value (as defined in the Joint Venture Agreement) utilizing the procedures and

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terms and conditions set forth and referred to in clause 18 (Valuation and Base Value) of the Joint Venture Agreement; provided that, if the funds to be providedfrom a capital call are required more urgently than within the period it would take for such a valuation to be completed, funds may be paid on account by way of a loan by the Shareholder to the Downstream Co convertible into shares upon completion of such valuation.

(c)          If, prior to the expiry of a period of six months from the Deadline, the Non-Participating Party is willing and able to purchase shares in the Downstream Co in an amount equal to its shortfall in respect of the original capital contribution call, then, within 30 days of written notice to the Participating Party and the Downstream Co, it shall buy from the Participating Party, and the Participating Party shall sell to the Non-Participating Party, such common shares as necessary to return Cosan and Shell to the state of being equal shareholders, at a price that is based on the Base Value (as defined in the Joint Venture Agreement) at the price paid by the Participating Party when the capital call was originally made (together with interest accruing at the Default Interest Rate from the date of the original capital call to the date of payment). Upon and after payment in respect of such share purchase within the specified six-month period, the governance rights of Cosan and Shell shall return to the status quo ante that pertained prior to such capital contribution obligation.

(d)         In the circumstances contemplated by paragraph (iii) of Section 9.04(a):

(i)            the Downstream Co shall give Cosan notice of any proposed issuance by the Downstream Co of any JV Securities (together with its material terms and conditions and intended use of proceeds) at least 20 Business Days prior to the proposed issuance date;

(ii)           Cosan shall be entitled to purchase up to its pro rata share of the JV Securities proposed to be issued based on its then current percentage ownership of the outstanding common shares of the Downstream Co; and

(iii)           for the purposes of determining the price of any capital contribution, the Downstream Co shall be valued on a fair market value basis.

Section 9.05. Capital Redemptions. Unless otherwise required by applicable law, the Downstream Co shall only effect the redemption of its share capital in accordance with the provisions of Section 9.02, of a Transaction Document or if otherwise agreed in writing by the Shareholders.

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ARTICLE 10

BOARD MEMBERS’ INDEMNITY AND INSURANCE

Section 10.01. Board Members’ Insurance. The Downstream Co shall purchase, and maintain at the Downstream Co’s own cost, directors’ and officers’ liability insurance in favour of the former and current members of the Supervisory Board and the Executive Board of the Downstream Co on terms and conditions customary for the industry in which the Downstream Co operates but, in any event, with an indemnity limit of no less than US$10 million and otherwise in an amount determined by the Supervisory Board.

Section 10.02. Board Members’ Indemnity. The Downstream Co shall indemnify each member of the Supervisory Board and the Executive Board to the maximum extent permissible by applicable law against all losses and liabilities incurred by him in connection with the execution and discharge of the duties of his office including any loss and liability incurred by him as a former or current director or other officer of the Downstream Co in defending any claim or proceedings (whether civil or criminal) in which judgment is given in his favour or in which he is acquitted or in connection with any application under applicable law in which relief is given to him by the court.

ARTICLE 11

MISCELLANEOUS

Section 11.01. Binding Effect; Assignability; Benefit. (a) This Agreement shall inure to the benefit of and be binding upon the Parties and their respective heirs, successors, legal representatives and permitted assigns. Any Shareholder that ceases to Beneficially Own at least one JV Security shall cease to be bound by the terms hereof (other than the provisions of Section 11.02, Section 11.03, Section 11.04, Section 11.06, Section 11.07 and Section 11.08).

(b)     Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by any Party pursuant to any Transfer of JV Securities or otherwise, except that: (i) any Permitted Transferee acquiring JV Securities or a Person acquiring JV Securities from any Shareholder in a Transfer; (ii) any Person acquiring JV Securities from any Shareholder in a Transfer in compliance with the Joint Venture Agreement; and (iii) any Person who acquires all or substantially all of the JV Securities of either Shell or Cosan in a Transfer in compliance with the Joint Venture Agreement, shall, in each case, execute and deliver to the Downstream Co an agreement to be bound by this Agreement in the form of Annex H hereto and shall thenceforth be a “Shareholder” and either (in the case of a direct or indirect purchase of the Cosan Interest (as defined in the Joint Venture Agreement) “Cosan” or (in the

39

case of a direct or indirect purchase of the Shell Interest (as defined in the Joint Venture Agreement) “Shell” for all purposes under this Agreement.

(c)     Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Parties, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

Section 11.02. Confidentiality.

(a)     Each Party agrees that it shall, and shall cause any Person to whom Confidential Information is disclosed pursuant to paragraph (i) below to, hold strictly confidential all Confidential Information and treat all Confidential Information with the same degree of care and confidentiality that it affords its own trade secrets and proprietary information. Each Party agrees to use Confidential Information received from any JV Entity only in connection with its investment in the Joint Venture and the transactions contemplated by the Transaction Documents, and for no other purpose, except as otherwise expressly permitted by the Transaction Documents or agreed between Cosan and Shell and the relevant JV Entity. Each Party agrees that it shall be responsible for any breach of the provisions of this Section 11.02 by any of its Representatives to whom it discloses Confidential Information. No Party shall disclose any Confidential Information to any Person, except: (i) to its own Representatives in the normal course of the performance of their duties; (ii) to the extent required by applicable law (including complying with any oral or written questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process to which a Party is subject; provided that, unless otherwise prohibited by law, such Party shall give the relevant JV Entity prompt notice of such request(s), to the extent practicable, so that such JV Entity may seek an appropriate protective order or similar relief (and the Party shall cooperate with such efforts by such JV Entity, and shall in any event make only the minimum disclosure required by such law)); (iii) to any Person to whom such Party is contemplating a Transfer (as defined in the Joint Venture Agreement) of any JV Securities in compliance with the requirements of the Joint Venture Agreement; (iv) to the extent required to comply with the rules and regulations of any regulatory authority to whose jurisdiction such Party or any of its Affiliates is subject (which may include the U.S. Securities and Exchange Commission, the Brazilian Comissão de Valores Mobiliários, the UK’s Financial Services Authority or the UK Listing Authority, the Netherlands’ Autoriteit Financiële Markten or any stock exchange); (v) as five of the six members of the SupervisoryBoard of the relevant JV Entity agree; provided that such Party shall give the relevant JV Entity and the other Parties advance notice in writing of any such disclosure; or (vi) in accordance with any other Transaction Document.

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(b)    The provisions of this Section 11.02 shall survive termination of this Agreement, but shall expire with respect to a Party on the second anniversary of the date on which such Party ceases to Beneficially Own at least one JV Security; provided, however, that with respect to any competitively sensitive information,the provisions of this Section 11.02 shall survive indefinitely.

Section 11.03. Notices. Any communication to be made under or in connection with this Agreement shall be made in the Portuguese and English languages (provided that the Portuguese version shall prevail in the event of conflict), in writing and, unless otherwise stated, may be made by fax via courier service. The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with this Agreement is identified with its name below. Any Party may substitute such address, fax number or department or officer by notifying the other Parties with not less than five days’ notice. Any communication or document made or delivered by one person to another under or in connection with this Agreement will only be effective: (a) if by way of fax, when received in legible form; (b) if by way of courier service, when the courier service has recorded successful delivery at that address; and (c) if a particular department or officer is specified as part of its address details below, if addressed to that department or officer.

Downstream Co:

Raízen Combustíveis S.A.

Avenida das Américas, 4200, Blocos 5 & 6, Barra da Tijuca

Rio de Janeiro – RJ

CEP 22640-102

Attention: President

Fax: +55 (21) 39847212

Cosan:

Cosan S.A. Indústria e Comércio

Avenida Presidente Juscelino Kubistchek, 1327, 4o andar

Sao Paulo – SP

CEP 04543-011

Brazil

Attention: General Counsel and Chief Financial Officer

Fax: +55 (11) 23446498

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Copy to:

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, New York 10017

Attention: John Amorosi; Manuel Garciadiaz

Fax: +1 (212) 701-5800

Barbosa Mussnich & Aragão

Av. Presidente Juscelino Kubitschek, 1.455 - 10º andar

Cep: 04543-011 - Itaim Bibi

Attention: Paulo Cezar Aragão; Daniela Soares

Fax: +55 (11) 2179-4597

Shell:

Shell Brasil Holding B.V.

c/o Shell Centre

4 York Road

London SE1 7NA

United Kingdom

Attention: Jorge Santos Silva; General Counsel

Fax: +44 (20) 7934 7509

Copy to:

Clifford Chance

Rua Funchal, 418, 15º andar

04551-060 São Paulo, SP

Attention: Anthony Oldfield

Fax: +55 (11) 3049 3198

Souza, Cescon, Barrieu & Flesch Advogados

Rua Funchal, 418, 11º andar

04551-060 São Paulo, SP

Attention: Marcos Flesch

Fax: +55 (11) 3089-6565

Any Person that becomes a Shareholder shall provide its address and fax number to the Downstream Co, which shall promptly provide that information to each other Shareholder.

Section 11.04. Waiver; Amendment; Termination. No provision of this Agreement may be amended, waived or otherwise modified, except by an instrument in writing executed by the Downstream Co with approval of the

42

Supervisory Board and each Shareholder that is a Party at the time of that proposed amendment or modification. In addition, any Party may waive any provision of this Agreement with respect to itself by an instrument in writing executed by the Party against whom the waiver is to be effective.

Section 11.05. Fees and Expenses. All costs and expenses incurred in connection with the preparation of this Agreement and the other Transaction Documents, or any amendment or waiver hereof, and the transactions contemplated hereby shall be paid by the Party incurring such costs or expenses.

Section 11.06. Governing Language. This Agreement is drawn up in the Portuguese and English languages. If this Agreement is translated into another language, or if there is a conflict between the Portuguese and English versions, the Portuguese language text prevails.

Section 11.07. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the Federative Republic of Brazil, without regard to the Laws of any other jurisdiction that might be applied because of the conflicts of Laws principles of the Federative Republic of Brazil.

Section 11.08. Arbitration.

(a)          Any dispute (a “Dispute”) arising from or connected with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement or the consequences of its nullity), will be referred to and finally resolved by arbitration under the Arbitration Rules of the ICC (the “Rules”), which Rules are deemed to be incorporated by reference into this Section 11.08.

(b)          The tribunal will consist of three arbitrators two of whom will be nominated by the respective parties, and the third, who shall act as chairperson, shall be a national of a member state of the Organisation for Economic Co-operation and Development (except the United States of America, England or the Netherlands) and nominated by the other two arbitrators together (but failing agreement within 30 days of the appointment of the second arbitrator, the third arbitrator shall be appointed by the ICC). The seat of the arbitration will be São Paulo, Brazil, and the language of the arbitration will be English.

(c)          The Parties agree that the arbitral tribunal will have power to award on a provisional basis any relief that it would have power to grant on a final award.

(d)          Without prejudice to the powers of the arbitrator provided by the Rules, statute or otherwise, the arbitrator will have power at any time, on the basis of written evidence and the submissions of the Parties alone, to make an award in favour of the claimant (or the respondent if a counterclaim) in respect of any

43

claims (or counterclaims) to which there is no reasonably arguable defence, either at all or except as to the amount of any damages or other sum to be awarded.

(e)          The Parties agree to keep confidential all materials used in and all awards received as a result of any Dispute proceedings, except to the extent required to be disclosed by applicable law.

(f)          The Parties exclude any rights to refer points of law or to appeal to the courts, to the extent that they can validly waive these rights.

Section 11.09. Specific Enforcement. Each of the Parties acknowledges that the remedies at law of the other Parties for a breach or threatened breach of this Agreement would be inadequate and, in recognition of this fact, any Party to this Agreement, without posting any bond, and in addition to all other remedies that may be available, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy that may then be available.

Section 11.10. Fraud. Nothing in this Agreement shall have the effect of limiting or restricting any liability arising as a result of any fraud.

Section 11.11. Counterparts. This Agreement may be executed in any number of counterparts, each of which is an original and all of which together evidence the same agreement. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other Parties. Until and unless each Party has received a counterpart hereof signed by each other Party, this Agreement shall have no effect and no Party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).

Section 11.12. Entire Agreement. This Agreement and the other Transaction Documents constitute the entire agreement and supersede any previous agreement between the Parties relating to the subject matter of this Agreement (including the memorandum of understanding between Cosan, Cosan Limited and Shell International Petroleum Company Limited dated 31 January 2010 (the “MOU”).

Section 11.13. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid or unenforceable, a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and the remainder of this Agreement and the application of such provision to other

44

Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

Section 11.14. Term; Termination. The Shareholders hereby agree that this Agreement shall remain in full force and effect for a period that is the longer of (a) twenty years counted from the date hereof and (b) the period during which each of Cosan and Shell own, directly or indirectly, 40 per cent. of the voting capital of the Downstream Co (the “Term”) . Further, except with respect to previously accrued rights and obligations, this Agreement shall terminate and be of no further effect with respect to any Shareholder when it ceases to be the Beneficial Owner of any JV Securities, except for Article 9.

Section 11.15. Records. For the purposes of Article 118 and its paragraphs of the Brazilian Corporation Law, the Shareholders hereby agree that an executed copy of this Agreement shall be kept at the headquarters of the Downstream Co. This Agreement shall be enforced against third parties and the Downstream Co itself upon registration of this latter in the Downstream Co’s headquarters.

Section 11.16. Legends. Promptly after the execution of this Agreement and as long as it remains in effect, the Shareholders and the Downstream Co shall cause the register of nominative shares related to the JV Securities to bear a legend as follows:

“All of the [ ] shares owned by this Shareholder, including any Transfer (as defined in the Shareholders’ Agreement) of any such shares, are bound by and subject to the provisions of (i) the Shareholders’ Agreement filed at Raízen Combustíveis S.A.’s headquarters and (ii) the Joint Venture Agreement, which provides for certain lock-up provisions, call options, put options and rights of first refusal, an extract of which is filed at the Downstream Co’s headquarters, dated as of […].”

Section 11.17. Intervening Party. The Downstream Co is intervening party to this Agreement and shall (a) observe, enforce and be bound by its provisions (including the arbitration provisions set forth in Section 11.08, in accordance with any applicable laws (including the Brazilian Corporation Law)), and (b) refrain from registering, enforcing or acting in any other manner whatsoever in connection with any actions or omissions in breach of this Agreement or any applicable laws (including the Brazilian Corporation Law).

Section 11.18. Legal Representative. Shell appoint Silvio Costa Rodrigues Neto, a citizen of Brazil, married, lawyer, registered with the OAB of

45

Rio de Janeiro under no. 39902, with IFP no. 3811235, CPF no. 628964827-68 and with an office at Avenida das Américas, 4200, Bloco 5, 6º andar, Barra da Tijuca, Rio de Janeiro – RJ, CEP 22640-102, Brazil , and Cosan appoints Marcelo de Souza Scarcela Portela, a citizen of Brazil, married, lawyer, registered with the OAB of São Paulo under no. 75.709, with ID card no. RG/SSP/SP 6.762.668, CPF no. 023.502.188-13 and with an office at Avenida Presidente Juscelino Kubitschek, 1327, 4 º andar, São Paulo – SP, CEP 04543-011, Brazil, as representatives before the Downstream Co for the purposes of §10 of article 118 of Brazilian Corporation Law.

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

DOWNSTREAM CO
Executed by
RAÍZEN COMBUSTÍVEIS S.A.	)
as an intervening and consenting party by	) /s/ Alvaro Alexandre F. Fone
	Name: Alvaro Alexandre F. Fone
	Title: Attorney in Fact

WITNESS 1:

/s/ Deborah C. Giacomo

Name:  Deborah Christina Giacomo

Title:  CPF 400.614.998-03

WITNESS 2:

/s/ Nathalia Cayres Cipelli

Name: Nathalia Cayres Cipelli

Title:  CPF: 328.665.758-14

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COSAN
Executed by
COSAN S.A. INDÚSTRIA	)
E COMÉRCIO	)  /s/ Marcelo Eduardo Martins
by	)
	Name:  Marcelo Eduardo Martins
	Title:
and by	)
	)  /s/ Marcos Marinho Lutz
	)
	Name:  Marcos Marinho Lutz
	Title:

WITNESS 1:

/s/ Deborah C. Giacomo

Name:  Deborah Christina Giacomo

Title:  CPF 400.614.998-03

WITNESS 2:

/s/ Nathalia Cayres Cipelli

Name:  Nathalia Cayres Cipelli

Title:  CPF: 328.665.758-14

48

SHELL

Executed by

SHELL BRAZIL HOLDING B.V.	)  /s/ Roby Krug Fenz
by	)
	Name:  Roby Krug Fenz
	Title:  Attorney in Fact

WITNESS 1:

/s/ Deborah C. Giacomo

Name:  Deborah Christina Giacomo

Title:  CPF 400.614.998-03

WITNESS 2:

/s/ Nathalia Cayres Cipelli

Name:  Nathalia Cayres Cipelli

Title:  CPF: 328.665.758-14

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COSAN DOWNSTREAM HOLDCO

Executed by

COSAN DISTRIBUIDORA DE COMBUSTÍVEIS LTDA.	)  /s/ Pedro Izamu Mizutani
by	)

Name:  Pedro Izamu Mizutani

Title:

and by	) /s/ Rubens Ometto Silveira Mello
	)
	)

Name:  Rubens Ometto Silveira Mello

Title:

WITNESS 1:

/s/ Deborah C. Giacomo

Name:  Deborah Christina Giacomo

Title:  CPF 400.614.998-03

WITNESS 2:

/s/ Nathalia Cayres Cipelli

Name:  Nathalia Cayres Cipelli

Title:  CPF: 328.665.758-14

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EX-4.9

Exhibit 4.9

SHAREHOLDERS’ AGREEMENT

dated as of

June 1st, 2011

of

RAÍZEN ENERGIA PARTICIPAÇÕES S.A.

TABLE OF CONTENTS

	Page
ARTICLE 1 Definitions
Section 1.01.  Definitions	3
Section 1.02.  Other Definitional and Interpretative Provisions	13
ARTICLE 2 Bound Shares
Section 2.01.  Bound Shares	15
ARTICLE 3 Shareholders
Section 3.01.  Shareholders’ Meetings	15
Section 3.02.  Supervisory Board and Executive Board	15
Section 3.03.  Byelaw Provisions	16
Section 3.04.  Shareholders	16
Section 3.05.  Limited Proxy	16
Section 3.06.  Proxy by Management to the Shareholders	16
ARTICLE 4 Shareholder Representatives
Section 4.01.  Shareholder Representatives	16
Section 4.02.  Meetings of the Shareholder Representatives	17
Section 4.03.  Actions by the Shareholder Representatives	17
Section 4.04.  Expenses of the Shareholder Representatives	17
ARTICLE 5 Supervisory Board
Section 5.01.  Composition of the Supervisory Board.	17
Section 5.02.  Chairperson	19
Section 5.03.  Supervisory Board Members to Be Shareholders	20
Section 5.04.  Removal of the Supervisory Board Members	21
Section 5.05.  Vacancies on the Supervisory Board	21
Section 5.06.  Meetings of the Supervisory Board	22
Section 5.07.  Proxies for Supervisory Board Members	23
Section 5.08.  Quorum of the Supervisory Board	23
Section 5.09.  Action by the Supervisory Board	23
Section 5.10.  Expenses and Compensation of Supervisory Board Members	23
Section 5.11.  Committees	24
Section 5.12.  Shareholder Indemnification Matters; Conflicts of Interest	24

ARTICLE 6 Executive Board
Section 6.01.  Executive Board	25
Section 6.02.  Meetings of the Executive Board	25
Section 6.03.  Action by the CEO	26
Section 6.04.  Removal of Executive Board Members	26
Section 6.05.  Vacancies on the Executive Board	26
Section 6.06.  Compensation	29
Section 6.07.  Committees	29
ARTICLE 7 Other Governance Matters
Section 7.01.  Manual of Authorities	29
Section 7.02.  Secondments	29
Section 7.03.  Dismissals	30
Section 7.04.  Subsidiary Governance	31
Section 7.05.  Senior Management	31
Section 7.06.  Indemnity Delinquency Period	31
Section 7.07.  Governance after any Completion of a Shell Partial Call Option	32
Section 7.08.  Iogen Energy.	32
Section 7.09.  Iogen Co-Investment Rights in US and Canada.	34
Section 7.10.  Codexis	35
Section 7.11.  Further Assurances with Respect to the Sublicences	36
Section 7.12.  CTC.	36
ARTICLE 8 Scope of the Sugar and Ethanol Co; Acquisitions; Business Opportunities
Section 8.01.  Scope of the Sugar and Ethanol Co	37
Section 8.02.  Restrictions.	37
Section 8.03.  Acquisitions.	38
Section 8.04.  Permitted Acquisitions	39
ARTICLE 9 Distribution and Dividend Policy; Goodwill; NOLs; Pledge of Dividends; Capital Contributions
Section 9.01.  Distributions and Dividend Policy	40
Section 9.02.  Goodwill and NOL.	41
Section 9.03.  Fiscal and Accounting Year	43
Section 9.04.  Agreed Capital Contributions.	43
Section 9.05.  Capital Redemptions	45

ii

ARTICLE 10 Board Members’ Indemnity and Insurance
Section 10.01.  Board Members’ Insurance	46
Section 10.02.  Board Members’ Indemnity	46
ARTICLE 11 Miscellaneous
Section 11.01.  Binding Effect; Assignability; Benefit	46
Section 11.02.  Confidentiality.	47
Section 11.03.  Notices	48
Section 11.04.  Waiver; Amendment; Termination	49
Section 11.05.  Fees and Expenses	50
Section 11.06.  Governing Language	50
Section 11.07.  Governing Law	50
Section 11.08.  Arbitration.	50
Section 11.09.  Specific Enforcement	51
Section 11.10.  Fraud	51
Section 11.11.  Counterparts	51
Section 11.12.  Entire Agreement	51
Section 11.13.  Severability	51
Section 11.14.  Term; Termination	52
Section 11.15.  Records	52
Section 11.16.  Legends	52
Section 11.17.  Intervening Party	52
Section 11.18.  Legal Representative	52

Annex A                      Responsibilities of the Shareholder Representatives

Annex B                      Matters Requiring Shareholder Approval

Annex C                      Responsibilities of the Chairperson

Annex D                      Functions and Responsibilities of the Supervisory Board

Annex E                      Functions and Responsibilities of the CEO

Annex F                      Functions and Responsibilities of the Senior Management

Annex G                      Committees of the Supervisory Board

Annex H                      Joinder Agreement

Annex I                      Share Assignment Agreement

iii

SHAREHOLDERS’ AGREEMENT

AGREEMENT dated as of June 1st, 2011 (this “Agreement”) among (i) Cosan S.A. Indústria e Comércio, a company organized and existing under the laws of Brazil, with its administrative office at Fazenda Pau D’Alho, Barra Bonita, São Paulo, Brazil enrolled with the Brazilian tax registry under No. 50.746.577/0001-15 (“Cosan”), (ii) Ispagnac Participações Ltda., a company incorporated under the laws of Brazil with registered number 27192050 0000 and whose registered office is at the City of Rio de Janeiro, State of Rio de Janeiro,  Avenida das Américas, No. 4200, Bloc 6, 1st floor, Barra da Tijuca, ZIP CODE 22640-102 (“Ispagnac”), and (iii) as intervening and consenting parties, (A) Raízen Energia Participações S.A., a sociedade anônima organized and existing under the laws of Brazil, with administrative offices at Avenida Presidente Juscelino Kubitschek,1327, 6º andar, sala 01, in the City of São Paulo, State of São Paulo, CEP 04543-011, enrolled with the Brazilian tax registry under 12.182.297/0001-32 (“Sugar and Ethanol Co”) and (B) Shell Brazil Holding B.V., a company incorporated in the Netherlands (“Shell”).  The terms “Cosan” and “Shell” shall each mean, if such entities or persons shall have Transferred any of their “JV Securities” to any of their respective “Permitted Transferees” (as such terms are defined below), those Persons and those Permitted Transferees, taken together, and any right, obligation or action that may be exercised or taken at the election of those Persons may be taken at the election of those Persons and those Permitted Transferees.

W I T N E S S E T H:

(A)           Pursuant to the terms of the Framework Agreement (as defined below) Cosan and Shell agreed to establish the Joint Venture (as defined below) to combine certain of the assets of Cosan and Shell primarily in Brazil;

(B)           Cosan and Shell have an equal economic interest in the Joint Venture and as a general principle, Cosan and Shell will share the profits, losses, access to cash flows and economic interest of the Joint Venture on an equal basis;

(C)           The Joint Venture comprises the Sugar and Ethanol Co which holds the sugar, ethanol, co-generation and certain other assets of the Joint Venture, the Downstream Co (as defined below) which holds the downstream and certain other assets of the Joint Venture, and the Management Co (as defined below) which forms the Joint Venture’s single face to the market and will facilitate the building of a unified corporate culture;

(D)           The voting capital of each of the Sugar and Ethanol Co and the Downstream Co will be divided into common shares (comprising 98 per cent. of voting capital) and preferred ‘A’ shares (comprising 2 per cent. of voting capital), which will be held as follows: (i) each of Cosan and Shell will own, directly or indirectly, 50 per cent. of the common shares in each of the Sugar and Ethanol Co and the Downstream Co; (ii) Cosan will directly own 100 per cent. of the preferred ‘A’ shares in the Sugar and Ethanol Co and Shell will directly own 100 per cent. of the preferred ‘A’ shares in the Downstream Co; and (iii) as a consequence of (i) and (ii), Cosan will directly own 51 per cent. of the total voting capital of the Sugar and Ethanol Co and Shell will directly own 51 per cent. of the total voting capital of the Downstream Co; and Cosan and Shell will each own directly 50 per cent. of the shares of the Management Co; provided that, notwithstanding the foregoing, each member of the Supervisory Board (as defined below) of each of the Sugar and Ethanol Co, the Downstream Co and the Management Co will hold one common share in such entity, in each case assigned, or caused to be assigned, to such member by whichever of  Cosan or Shell nominated the member to such position;

(E)           Certain preferred ‘B’ shares will be allocated to Cosan and will bear certain economic (but not voting) rights to compensate Cosan for contributing certain goodwill and net operating loss carry-forwards to, as they render a tax benefit to, the Sugar and Ethanol Co and/or its Subsidiaries;

(F)           Cosan and Shell have pledged certain rights to dividends and interest on capital to each other, and Cosan has pledged certain of its JV Securities (as defined below) to Shell, in each case as security for certain payment obligations;

(G)           A management compensation plan (the “Management Compensation Plan”) will be applied to reward the management of the Joint Venture for success in their respective roles;

(H)           The Joint Venture Agreement (as defined below) sets out certain options whereby Cosan or Shell may acquire the other’s interest in the Joint Venture, lock-up provisions and remedies for fundamental breaches of the documentation governing the establishment and operation of the Joint Venture;

(I)           An Operating and Coordination Agreement (as defined below) sets out certain terms relating to the coordination of the Sugar and Ethanol Co, the Downstream Co and the Management Co, and specifies certain principles, policies, targets and processes of the Joint Venture;

(J)           ROSM, who indirectly controls Cosan, has entered into an agreement with Cosan and Shell setting out certain obligations in relation to his indirect interest in the Joint Venture and his activities in respect of the Business (as defined below) of the Joint Venture;

(K)           Shareholders’ agreements in respect of each of the Sugar and Ethanol Co (being this Agreement) and the Downstream Co together govern the scope of the business of the Joint Venture, certain matters relating to governance (which, as a general principle, shall be shared between Cosan and Shell equally), acquisitions, dividends and distributions, as well as the general principles that shall govern Cosan’s and Shell’s relationship as shareholders of the Sugar and Ethanol Co and the Downstream Co; and

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(L)           The Parties (as defined below) desire to enter into this Agreement, pursuant to the terms of article 118 of the Brazilian Corporation Law (as defined below), to govern the scope of the business of the Sugar and Ethanol Co, the roles, rights and obligations of the shareholders, Shareholder Representatives and the members of the Supervisory Board and Executive Board and the CEO and Senior Management (as such terms are defined below) of the Sugar and Ethanol Co, certain matters relating to acquisitions, dividends and distributions, as well as the general principles that shall govern Cosan’s and Shell’s relationship as shareholders of the Sugar and Ethanol Co.

ACCORDINGLY, in consideration of the covenants and agreements contained herein and in the Framework Agreement, the Parties agree as follows:

ARTICLE 1

Definitions

Section 1.01.  Definitions.  a) As used in this Agreement, the following terms shall have the following meanings:

“Affiliate” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of a Holding Company; provided that, for the purposes of this Agreement, (a) no JV Entity shall be considered an Affiliate of any Shareholder and (b) Vertical Trading LLP shall be considered an Affiliate of Cosan.

“Anti-Corruption Law” means the US Foreign Corrupt Practices Act of 1977, the United Kingdom Prevention of Corruption Acts 1889 to 1916 and the United Kingdom Bribery Act of 2010, Decree (Decreto) 4,410 of October 7, 2002 (Interamerican Convention Against Corruption) of Brazil, Decree (Decreto) 5,687 of January 31, 2006 (United Nations Convention Against Corruption) of Brazil, or any applicable law of similar effect.

“Beneficial Owner” means, in respect of a security, any Person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (a) voting power which includes the power to vote, or to direct the voting of, such security; and/or (ii) investment power which includes the power to dispose, or to direct the disposition of, such security; and each of the terms “Beneficially Own” and “Beneficially Owned” has a corollary meaning.

3

“Brazilian Civil Code” shall mean Brazilian Federal Law no. 10.406 of January 10, 2002 (lei Nº 10.406, de 10 de janeiro 2002).

“Brazilian Corporation Law” shall mean Brazilian Federal Law no. 6.404 of December 15, 1976 (Lei Nº 6.404 de 15 de dezembro 1976).

“Business Day” means a day other than a Saturday, Sunday or public holiday in São Paulo, Brazil.

“Business Plan” means the business plan for a five-year period relating to the Joint Venture, the initial version of which was adopted by the Supervisory Board on the date hereof, and as renewed on an annual basis by the Supervisory Board in accordance with Annex D.

“Byelaws” means, in relation to any entity, the corporate byelaws (including any Contrato Social or Estatuto Social) of that entity.

“CIT” means the IRPJ and the CSLL, and any other Taxes that may be created in Brazil to replace the IRPJ and/or the CSLL, and/or that levy on income or profits earned by Brazilian companies;

“CIT Tax Return” means the specific Tax return concerning IRPJ and CSLL (Declaração de Informações Economico-Fiscais da Pessoa Jurídica) or any similar Tax return that may be required by future Brazilian Tax Laws in place of the Declaração de Informações Economico-Fiscais da Pessoa Jurídica.

“CIT Taxable Base” means for any JV Entity in any CIT Year, for the purposes of the IRPJ, its lucro real for that CIT Year and, for the purposes of the CSLL, its base de cálculo da CSLL for that CIT Year.

“CIT Year” means each taxable period for CIT purposes of any entity, including each calendar-year beginning on 1 January and ending on 31 December and, where the context so requires, any shorter period beginning on the Closing Date and any short period beginning on 1 January and ending on the date of dissolution of the Joint Venture.

“Closing Date” means the date of this Agreement.

“Codexis” means Codexis, Inc., a company incorporated in Delaware, whose principal office is at 200 Penobscot Drive, Redwood City, California 94063, United States of America.

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“Codexis Sublicence Agreement” means a licence agreement relating to the sublicence of certain Codexis technology in Agreed Form to be dated the Closing Date between Equilon Enterprises LLC doing business as Shell Oil Products US and the Sugar and Ethanol Co (or any of its Subsidiaries as assignee with the consent of Shell).

“Co-gen Products” means: (a) steam and electricity generated from the inputs and by-products from the Sugar production process; (b) the feedstocks used for such co-generation; and (c) any related by-products resulting from such co-generation.

“Confidential Information” means any information concerning any Party or any of its Subsidiaries, whether or not in the possession of a Party before the date of this Agreement, and which relates to trade secrets, proprietary information, the marketing of goods or services (including names, lists and other details of customers, sales targets, sales statistics, market share statistics, prices, market research reports and surveys, advertising or promotional materials and strategies), future projects, business development or planning, commercial relationships, negotiations and business strategy; provided that “Confidential Information” does not include information that: (a) is or becomes generally available to the public other than as a result of a disclosure by a Party, any of its Affiliates or its or their Representatives in violation of this Agreement; (b) was available to such Party on a non-confidential basis prior to its disclosure to such Party or its Representatives; or (c) becomes available to such Party on a non-confidential basis from a source other than a JV Entity after the disclosure of such information to such Party or any Party’s Representative by the JV Entity, which source is (at the time of receipt of the relevant information) not, to such Party’s knowledge, bound by a confidentiality agreement with (or other confidentiality obligation to) such JV Entity or another Person; provided, further, that, notwithstanding anything to the contrary contained herein, Confidential Information in the possession of Cosan, Shell or any of their respective Subsidiaries prior to the date of this Agreement shall, notwithstanding the foregoing exceptions in paragraphs (a) or (c), remain Confidential Information hereunder and Cosan and Shell shall be obligated to keep, or to cause to be kept, such information confidential in accordance with the provisions of Section 11.02 as fully as if they did not have access to such information prior to the date of this Agreement but only received it after the date of this Agreement.

“Control” means the power of a Person (or Persons acting in concert) to secure that the affairs of a second Person are conducted, directly or indirectly, in accordance with the wishes of the first Person (or first Persons acting in concert) whether by means of being the Beneficial Owner(s) of more than 50 per cent (or, in the case of the Joint Venture, 50 per cent.) of the issued share capital of or of the voting rights in the second Person, or having the right to appoint or remove a majority of the directors or otherwise control a majority of the votes at board meetings of the second Person by virtue of any rights attaching to securities held or powers conferred by the Byelaws, shareholders’ agreement or any other document regulating the affairs of the second Person; and “Controlled by” shall be construed accordingly.

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“Control Framework” means a control framework to ensure compliance with reporting requirements (including in relation to section 404 of the Sarbanes-Oxley Act 2002 of the United States of America), as adopted by the Supervisory Board.

“Cosan Goodwill” means any ‘goodwill on acquisition of investments’ (ágio na aquisição de investimentos) that is a Cosan Transfer Asset or is recorded by a Cosan Transfer Entity on or before 30 June 2010 for CIT purposes and the value of which is determined immediately prior to Closing as if the CIT Year ended on the Closing Date (or, in the case of such goodwill that is not yet subject to amortization for CIT purposes on the Closing Date, on the date when it becomes subject to amortization for CIT purposes by means of a merger or other transaction).

“Cosan Goodwill NOL” means any NOL of any JV Entity generated after the Closing Date to the extent that such NOL was attributable to amortization of Cosan Goodwill.

“Cosan Limited” means Cosan Limited, a company incorporated under the laws of Bermuda and whose registered office is at Crawford House, 50 Cedar Avenue, Hamilton HM 11, Bermuda.

“Cosan Pre-Closing NOL” means any NOL of any Cosan Transfer Entity, determined to exist immediately prior to Closing as if the CIT Year ended on the Closing Date.

“Cosan Tax Savings” means, for each Subsidiary of the Sugar and Ethanol Co in any CIT Year, the combined applicable rates of CIT multiplied by the sum of: (a) that JV Entity’s deduction for amortization of Cosan Goodwill to the extent that this deduction does not cause its CIT Taxable Base to be less than zero; and (b) that JV Entity’s NOL deductions to the extent attributable to either any Cosan Goodwill NOL or any Cosan Pre-Closing NOL, it being understood that for this purpose any NOL deduction shall be attributed first, to any Cosan Goodwill NOL, second, to any Cosan Pre-Closing NOL, and thereafter, to any NOL generated after the Closing Date that is not a Cosan Goodwill NOL, provided that the CIT Taxable Base of each Subsidiary of the Sugar and Ethanol Co calculated for the purposes of paragraphs (a) and (b) above shall be the hypothetical amounts calculated under those paragraphs by disregarding that JV Entity’s  IOC expense.

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“Cosan Transfer Assets” has the meaning set forth in the Framework Agreement.

“Cosan Transfer Entity” has the meaning set forth in the Framework Agreement.

“CSLL” means the Brazilian Social Contribution on Net Profits (Contribuição Social sobre o Lucro Líquido).

“CTC Interests” means the equity interests and voting rights held by Cosan, together with its Subsidiaries, in CTC –Centro de Technologia Canavieira or its succesor entity, but excluding, for the sake of clarity, all such interests and rights transferred to the Sugar and Ethanol Co at the Closing pursuant to the Framework Agreement.

“CTC Shareholders’ Agreement” means the Shareholders’ Agreement  in respect of CTC dated 12 January 2011 among the shareholders named therein.

“Default Interest Rate” means a per annum rate of interest equal to 2 per cent. above SELIC for payments in BRL and equal to 3 per cent. above LIBOR for payments in US$.

“Distribution” means a distribution by way of dividend payable in respect of shares, by way of IOC, by way of redemption of shares or by way of any other distribution of profits or reserves that may be agreed by the Parties, made, or to be made, by the Sugar and Ethanol Co in accordance with Section 9.02;

“Downstream Co” means Raízen Combustíveis S.A., a company organized and existing under the laws of Brazil, with its head office at Avenida das Américas, 4.200, blocos 5 e 6, Barra da Tijuca in the City of Rio de Janeiro, State of Rio de Janeiro, CEP 22640-102, enrolled with the Brazilian tax registry under No. 33.453.598/0001-23.

“Ethanol” means ethanol and ethanol-based products, in each case, produced from sugarcane.

“External Auditors” has the meaning set forth in the Operating and Coordination Agreement.

“Existing Academic Projects" means the research projects and related activities carried out pursuant to: (a) an agreement (or future agreement) with Embrapa Agrobiologia relating to soil "C" balance and greenhouse gas emissions; and (b) an agreement between Shell Brasil Limitada and Universidade Estadual De Campinas – UNICAMP dated 5 September 2008.

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“Framework Agreement” means the Framework Agreement dated August 24, 2010 between Cosan, Cosan Distribuidora de Combustíveis Ltda., Cosan Limited, the Downstream Co, the Management Co, Shell, Shell Overseas Holdings Limited and Sugar and Ethanol Co.

“Governmental Authority” means any international, supranational or national government, any state, provincial, local or other political subdivision thereof, any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions (including functions relating to the audit, imposition, assessment, management and collection of Taxes) of or pertaining to government, including any government authority, agency, department, board, commission or instrumentality of any nation or jurisdiction or any political subdivision thereof or any court.

“Holding Company” means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.

“Indemnity Delinquency Period” means the period from the 15th Business Day after the date a Determined Indemnity Amount (as defined in the Framework Agreement) is due from Cosan or Shell (as the case may be) to an Indemnified Party (as defined in the Framework Agreement) until such Determined Indemnity Amount is paid in full in cash (and, for clarification, not pursuant to the Alternative Pledge Call Option (as defined in the Framework Agreement).

“INSS” means the Brazilian Social Security Institute (Instituto Nacional do Seguro Social).

“IOC” means interest on capital (juros sobre capital proprio) that may be paid by Brazilian companies to shareholders.

“Iogen Corp” means Iogen Corporation, a company incorporated in Canada, whose registered office is at 310 Hunt Club Road East, Ottawa, Ontario K1V 1C1 and whose corporation number is 3831680.

“Iogen Energy” means Iogen Energy Corporation, a company incorporated in Canada, whose registered office is at 310 Hunt Club Road East, Ottawa, Ontario K1V 1C1 and whose corporation number is 2668998.

“Iogen Shareholders’ Agreement” means the Amended and Restated Shareholders’ Agreement dated July 1, 2008 between SOIBV, Iogen Corp, and Iogen Energy, as amended on April 15, 2010.

“Iogen Shares” means all of the common (but not the preferred) shares in Iogen Energy held by SOIBV on the date of the Framework Agreement.

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“Iogen Sublicence Agreement” means a licence agreement relating to the sublicence of certain Iogen Energy technology dated the date of this Agreement between Shell Chemicals Canada Limited and the Sugar and Ethanol Co.

“IRPJ” means the Brazilian Corporate Income Tax (Imposto de Renda Pessoa Jurídica).

“Joint Venture” means the Sugar and Ethanol Co, the Downstream Co and the Management Co and their Subsidiaries, considered together.

“Joint Venture Agreement” means the joint venture agreement dated the date of this agreement, between Cosan, Cosan Limited, the Downstream Co, the Management Co, Shell Brazil Holding B.V., Shell Overseas Holdings Limited and Sugar and Ethanol Co.

“JV Entity” means, after Closing, each of, and each of the Subsidiaries of and equity interests held by, the Downstream Co, the Management Co and/or the Sugar and Ethanol Co.

“JV Securities” means: (i) the common and preferred shares of the Sugar and Ethanol Co held (directly or indirectly) by Cosan and Shell; (ii) any other equity or equity-linked security issued from time to time by the Sugar and Ethanol Co; and (iii) any options, warrants, or other rights to acquire any of the foregoing securities.

“Key Policies” means the “General Business Principles”, “Sustainable Development and HSSE Principles”, the “Employee Code of Conduct” and the “HR Principles”, as existing and having been adopted by the Sugar and Ethanol Co from time to time.

“Level 3 Employee” means any employee of the Sugar and Ethanol Co employed at the level that reports directly to any member of the Senior Management.

“LIBOR” means a rate equal to (a) the applicable Screen Rate; or (b) (if no Screen Rate is available) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to any Party at its request quoted by the Reference Banks to leading banks in the London interbank market, in each case as of the time on the Quotation Day for the offering of deposits in US$ and for a period of six-months (or the closest period if such period is not available).

“Management Co” means Houches Holdings S.A., a company organized and existing under the laws of Brazil, with its head office at Rua Funchal, 418, Andar 11 Sala 09G, in the City of São Paulo, State of São Paulo, CEP 04.551-060, enrolled with the Brazilian tax registry under No. 10.773.432/0001-99.

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“NOL” means any net operating loss carry forward (prejuizo fiscal with respect to the IRPJ, and any base de cálculo negativa de CSLL with respect to the CSLL).

“Operating and Coordination Agreement” means the agreement dated the date of this Agreement between Cosan, Cosan Distribuidora de Combustíveis Ltda., the Downstream Co, Ispagnac Participações Ltda., the Management Co, Shell Brazil Holding B.V. and Sugar and Ethanol Co.

“Parties” means the parties to this Agreement.

“Permitted Transferees” means any person to whom or which Cosan or Shell is permitted to transfer its interest, whether directly or indirectly, in the Joint Venture, pursuant to the Joint Venture Agreement.

“Person” means an individual, corporation (including a Brazilian sociedade anônima), limited liability company (including a Brazilian sociedade limitada), partnership, association, trust or other entity or organization (whether or not Brazilian), including any type of Brazilian sociedade empresária and sociedade simple or any other entity regulated by Articles 40-69 of the Brazilian Civil Code, and including a Governmental Authority or political subdivision or an agency or instrumentality thereof.

“Qualifying Person” means any person who has not been convicted of any violation of any Anti-Corruption Law.

“Quotation Day” means, in relation to any period for which an interest rate is to be determined, two Business Days before the first day of that period, unless market practice differs in the London interbank market, in which case the Quotation Day for that currency and interest rate will be determined by HSBC Bank plc (or, if not available or willing, Bank of America) in accordance with market practice in the London interbank market (and, if quotations would normally be given by leading banks in the London interbank market on more than one day, the Quotation Day will be the last of those days preceding the relevant period).

“Representatives” means any of a Person’s Affiliates and the directors, officers, employees, agents, counsel, investment advisers and financing sources subject to customary confidentiality obligations of such Person and/or of any of its Affiliates.

“Retail Sugar Business” has the meaning set forth in the Framework Agreement.

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“ROSM” means Rubens Ometto Silveira Mello, a Brazilian citizen whose principal business address is located at Av. Presidente Juscelino Kubitschek, 1327, 4th floor - CEP 04543-011 – São Paulo – SP, Brazil.

“S&E B Shares” means the preferred ‘B’ shares of the Sugar and Ethanol Co.

“S&E Byelaws” means the Byelaws of the Sugar and Ethanol Co, as amended from time to time.

“SCCL” means Shell Chemicals Canada Limited, a company incorporated in Canada, whose registered office is at 400 4th Ave. S.W., Calgary, Alberta T2P 0J4 and whose corporation number is 3705862.

“Screen Rate” means, in relation to the London Interbank Offered Rate, (a) the British Bankers’ Association “Interest Settlement Rate” displayed on the appropriate page of the Reuters screen; or (b) (if the page referred to in sub-paragraph (a) above is replaced or service ceases to be available) such rate as announced by HSBC Bank plc from time to time as in effect from time to time.

“SELIC” means the rate assessed by the Brazilian Special Liquidation and Custody System (Sistema Especial de Liquidação e Custódia) – SELIC, published by the Central Bank of Brazil, obtained by calculating the adjusted weight average rate of one-day financing operations, backed by public federal bonds and traded in such system.

“Shareholder” means, at anytime, any Person (other than the Sugar and Ethanol Co) who shall then be a party to or bound by this Agreement for so long as that person Beneficially Owns any JV Securities issued by the Sugar and Ethanol Co.

“Shareholders’ Meeting” means any meeting of the Shareholders.

“Shell Trading” means Shell Western Supply and Trading Limited or any of its Affiliates as it may specify.

“SOIBV” means Shell Overseas Investments B.V., a company incorporated in The Netherlands whose registered office  is at Carel van Bylandtlaan  30, 2596HR-Gravenhage, and with company number 27104660  0000.

“Subsidiary” means, in relation to any Person, a Person: (a) which is Controlled, directly or indirectly, by the first mentioned Person; (b) more than half the issued share capital of which is Beneficially Owned, directly or indirectly by the first mentioned Person; or (c) which is a Subsidiary of another Subsidiary of the first mentioned Person.

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“Sugar” means sugar and sugar by-products, in each case, produced from sugarcane.

“Tax” means any past, present or future taxes, including (without limitation) IRPJ, CSLL, PIS, COFINS and ICMS and any and all other taxes, surtaxes, additional rates, levies, excise, imposts, duties, charges, contributions, social contributions, contributions on economic domain intervention, charges, tariffs, fees, deductions, or withholdings of whatever nature (including any related fines, penalties, surcharges or interest) that are imposed, levied, collected, withheld, assumed, assessed by or payable to any Governmental Authority, and that are levied (without limitation) on income, net worth, revenues, profits, turnover, capital gains, imports, exports, services, excise, royalties, ownership and transfer of real estate property, donations, bank account deposits and withdrawals, foreign exchange transactions, credit transactions, transactions related to bonds and securities, transactions related to insurance transactions, as well as “green” or environmental taxes, value-added taxes, and any and all other transactional or turnover tax.

“Trading Agreement” means a sale and purchase agreement for biofuels dated the date hereof between the Sugar and Ethanol Co and Shell Western Supply and Trading Limited.

“Transaction Document” has the meaning set forth in the Framework Agreement.

“Transfer” means, with respect to any JV Securities: (a) when used as a verb, to sell, assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise transfer any JV Securities or any participation or interest therein, whether directly or indirectly (including pursuant to a derivative transaction), or agree or commit to do any of the foregoing; and (b) when used as a noun, a direct or indirect sale, assignment, disposition, exchange, pledge, encumbrance, hypothecation, or other transfer of any JV Securities or any participation or interest therein or any agreement or commitment to do any of the foregoing.

(b)           Each of the following terms is defined in the Section set forth opposite that term:

Term	Section
Acquisition	8.03(a)
Affected Shareholder	5.01(e)
Agreement	preamble
Amendment	7.12(a)
Audit Committee	Annex G
Business	8.01(e)
CEO	6.01

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CFO	6.01
Chairperson	e)
Codexis Funding Arrangements	7.10
COO (Downstream)	6.01
COO (Sugar and Ethanol)	6.01
Cosan	preamble
CSR Committee	Annex G
Deadline	9.04(b)
Direct Report	6.05(c)
Dispute	11.08(a)
Equilon	7.10
Executive Board	6.01
Finance Committee	Annex G
Fiscal Board	Annex B
INPI	7.11
Interim CEO	6.05(b)
Internal Auditors	Annex G
Iogen Funding Arrangements	7.08(b)(i)
Joinder Agreement	Annex H
Joining Party	Annex H
Management Compensation Plan	Recitals
Management Shares	1
Manual of Authorities	7.01
MOU	11.12
Non-Participating Party	9.04(b)
Participating Party	9.04(b)
Remuneration Committee	Annex G
Replacement Nominee	f)i)
Rules	11.08(a)
Senior Management	7.05
Shareholder Representative	4.01
Shareholders’ Agreement	Annex H
Shell	preamble
Shell Budget Approval Period	7.08(b)
Shell BV	preamble
Sugar and Ethanol Co	preamble
Supervisory Board	5.01(a)
Sustainable Development Remediation Plan	Annex G
Term	11.14

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Section 1.02.  Other Definitional and Interpretative Provisions.  A reference to a statutory provision (including, in Brazil, a provision of a Lei Ordinária, Lei Complementar, Decreto, Decreto-Lei, Medida Provisória and any other law under Brazilian law), includes a reference to: b) the statutory provision as modified or re-enacted or both from time to time (whether before or after the date of this Agreement); and c) any subordinate legislation made under the statutory provision by any Person (whether before or after the date of this Agreement).  A reference to a “regulation” includes any regulation, rule, official directive, request, guideline, portaria, regulamento, decreto, resolução, deliberação, circular, carta-circular, instrução, instrução normativa, regimento, ato declaratório and/or despacho normativo (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organization. The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  References to “globally” shall be deemed to include Brazil.  The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.  References to Annexes, Articles, Sections, Exhibits and Schedules are to Annexes, Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified.  All Annexes, Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  Any capitalized terms used in any Annex, Exhibit or Schedule but not otherwise defined therein, shall have the meaning set forth in this Agreement.  Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular.  Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import.  “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form.  References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; provided that with respect to any agreement or contract listed on any schedules hereto, all such amendments, modifications or supplements must also be listed in the appropriate schedule.  References to any Person or a Party include the legal personal representatives, Affiliate(s), successors and permitted assigns of that Person or Party.  References to “Persons acting in concert” means, in relation to a Person, Persons which actively co-operate, pursuant to an agreement or understanding (whether formal or informal) with a view to obtaining or consolidating Control of that Person.  References to “he” or “him” shall be deemed to refer, in addition, to “she” and “her”, respectively.  References from or to any date mean, unless otherwise specified, from and including and to but excluding, respectively and a time of day is a reference to São Paulo, Brazil time.  References to “company”, “corporation” or “entity” include a reference to any business entity (of whatever form) in any jurisdiction (including Brazilian sociedades empresárias and sociedades simples).  Italicized terms in parenthesis denote the Portuguese language words for names, concepts and other terms applicable in Brazil.

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ARTICLE 2

Bound Shares

Section 2.01.  Bound Shares.  This Agreement shall bind all JV Securities currently owned, directly or indirectly, by the Parties, as well as JV Securities issued by the Sugar and Ethanol Co that are subscribed or purchased or in any other way acquired by any of the Parties, their successors or Permitted Transferees, during the term of this Agreement, including, but not limited to, stock dividends deriving from dividend distributions, splitting, reverse splitting, or any shares, quotas or securities received by the Parties in exchange to or substitution of their JV Securities, by virtue of or in connection with any merger or reorganization of the Sugar and Ethanol Co or otherwise.

ARTICLE 3

Shareholders

Section 3.01.  Shareholders’ Meetings.  The Sugar and Ethanol Co will hold an annual Shareholders’ Meeting within the first four (4) months after the close of each fiscal year and an extraordinary Shareholders’ Meeting whenever the Sugar and Ethanol Co’s business so requires.  The general meetings of shareholders will be instated, on the first call, with the attendance of shareholders representing at least the percentage of the Sugar and Ethanol Co’s voting capital required under the Brazilian Corporation Law and, on the second call, with any number of shareholders present; provided that, i) in order for a quorum to exist for the vote on any matter at any such meeting properly instated, shareholders representing at least 60% of the Sugar and Ethanol Co’s voting capital must be in attendance at such meeting, and ii) during the pendency of any Indemnity Delinquency Period or in the circumstances described in Section 5.01(d) or Section 9.04(b) in no event shall matters set forth in Parts 1 and 2 of Annex B be voted on at the same Shareholders Meeting.  The approval of any of the matters listed on Part 1 of Annex B hereto shall, at any Shareholders’ Meeting whether on first or second call, require the affirmative vote of Shareholders holding at least 75% of the Sugar and Ethanol Co’s total voting capital (taking into account the proxy granted pursuant to Sections 5.01(d), 7.06, 7.07 and 9.04(b), if applicable).

Section 3.02.  Supervisory Board and Executive Board.  Each of Cosan and Shell shall vote its JV Securities or execute proxies or written consents, as the case may be, and take all other necessary action (including causing the Sugar and Ethanol Co to call a special meeting of shareholders) in order to ensure that the composition of the Supervisory Board (and the identity of the Chairperson) is as set forth in this Agreement.  Each of Cosan and Shell shall cause its nominees to the Supervisory Board to take all necessary action to ensure that the composition of the Executive Board is as set forth in this Agreement.

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Section 3.03.  Byelaw Provisions.  d) Each Shareholder agrees to vote its JV Securities or execute proxies or written consents, as the case may be, and to take all other actions necessary: (1) to ensure that the S&E Byelaws facilitate, and do not at any time conflict with, any provision of this Agreement, and (2) to permit each Shareholder to receive the benefits, and exercise the rights, to which each such Shareholder is entitled under this Agreement.

(a)      The S&E Byelaws shall provide for: ii) the elimination of the liability of each member of the Supervisory Board and the Executive Board to the maximum extent permitted by applicable law; and iii) indemnification of each member of the Supervisory Board and the Executive Board for acts on behalf of the Joint Ventures to the maximum extent permitted by applicable law.

Section 3.04.  Shareholders.  Cosan and Shell shall use their respective (direct or indirect) shareholder votes in the Sugar and Ethanol Co (and any holding company) which they Beneficially Own, to procure that the Sugar and Ethanol Co shall fully comply with the terms of this Agreement, as further set forth in Article 118 of the Brazilian Corporation Law.

Section 3.05.  Limited Proxy.  For the limited purposes of Sections 5.01(d), 7.06, 7.07 and 9.04(b), the defaulting Shareholder under each such Section hereby grants to the other Shareholder an irrevocable and irreversible power-of-attorney, in accordance with the terms of Articles 684 and 685 of the Brazilian Civil Code, with the power to constitute a quorum and to vote the defaulting Shareholder's JV Securities.  The power-of-attorney referred to herein shall become effective immediately following the date which is 30 days after the defaulting Shareholder receives written notice from the non-defaulting Shareholder of its failure to make such payment within the specified period during which such payment was required to have been made, but only if the defaulting Shareholder has yet to satisfy all of its obligations referred to in that Section (together with any accrued interest) by such date.

ARTICLE 4

Shareholder Representatives

Section 4.01.  Shareholder Representatives.  Each of Cosan and Shell shall appoint one of its respective senior executives as a shareholder representative of that party in respect of the Sugar and Ethanol Co (each such individual, a “Shareholder Representative”).

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Section 4.02.  Meetings of the Shareholder Representatives.  The two Shareholder Representatives shall meet at such times as may be requested by either Shareholder Representative or by Cosan or Shell, but only to: iv) resolve a deadlock at a Shareholders’ Meeting or at the Supervisory Board-level over any matters set forth in Annex B or Annex D, respectively, or any other matter as the Supervisory Board may agree; or v) address any of the other matters set forth in Annex A.  All meetings of the Shareholder Representatives shall take place at a location or via teleconference as may be mutually agreed upon by the Shareholder Representatives.

Section 4.03.  Actions by the Shareholder Representatives.  The responsibilities of the Shareholder Representatives are summarized in Annex A hereto.  Actions or decisions by the Shareholder Representatives shall require the agreement of both Shareholder Representatives.  Cosan and Shell shall: vi) cause the Shareholder Representatives to notify the Supervisory Board of, and shall cause the Supervisory Board to effect or implement, any decision of the Shareholder Representatives which the Shareholder Representatives agree must be effected or implemented by the Supervisory Board; or vii) cause the Shareholders to call a Shareholders’ Meeting to effect or implement any decision of the Shareholder Representatives which the Shareholder Representatives agree must be implemented or effected by the Shareholders.  If the Shareholder Representatives are unable to reach a joint decision, such decision shall not be taken or effected, and the status quo shall prevail.

Section 4.04.  Expenses of the Shareholder Representatives.  Each of Cosan and Shell shall pay, respectively, all reasonable out-of-pocket expenses incurred by the Shareholder Representative nominated by it, in connection with the attendance of any meetings or the carrying out of any duties in such capacity as its Shareholder Representative.

ARTICLE 5

Supervisory Board

Section 5.01.  Composition of the Supervisory Board.

(a)      The Sugar and Ethanol Co shall have a supervisory board (Conselho de Administração) (the “Supervisory Board”).

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(b)      Subject to Section 5.01(d), Section 5.01(e), Section 7.06, Section 7.07 and Section 9.04, the Supervisory Board shall have six voting members, comprising:

(i)      three Qualifying Persons designated by Cosan in its sole discretion; provided that one of such three shall be ROSM while he is not Deceased or Disqualified (each as defined in the Joint Venture Agreement) or no longer willing to serve as a member of the Supervisory Board; and

(ii)      three Qualifying Persons designated by Shell in its sole discretion,

who shall each serve, subject to Sections 5.04 and 5.05, for a term of three years.

(c)      Subject to applicable law, there shall be no restriction on Cosan or Shell re-designating any then existing member of the Supervisory Board for any subsequent term of office.

(d)      The Parties hereto agree as follows:

(i)      If Shell fails to pay to the Sugar and Ethanol Co in full each of its capital subscription contribution obligations (together with accrued interest as specified in the Framework Agreement) existing on the Closing Date pursuant to the relevant Boletim de Subscrição within 30 days of receipt of written notice from Cosan of a failure to make payment at the relevant time that such amount is due thereunder, then interest shall accrue at the Default Interest Rate from the date of such receipt until payment is made and Shell will only be entitled to: (1) vote the JV Securities then Beneficially Owned by Shell at any Shareholders’ Meeting with respect to those matters set forth in Part 2 of Annex B (and Cosan shall otherwise be entitled to vote all of the JV Securities then Beneficially Owned by Shell at any Shareholders’ Meeting with respect to all other matters); and (2) have its remaining nominees on the Supervisory Board vote on those matters set forth in Part 4 of Annex D (and those nominees shall not be entitled to vote on any other matters whatsoever). The Chairperson of the relevant Shareholders’ Meeting shall refrain from counting any vote exercised in violation of this Section 5.01(d).  Further, in such event, Section 5.01(e) shall apply.  During the period from the date that any amount is owing by Shell in respect of any capital subscription contribution obligation to the date such amount (together with any accrued interest) is settled in full, any regular dividends due to Shell shall be set-off against amounts owing by Shell pursuant to the Shell Pledge Agreement; and

(ii)      If Shell makes any delinquent capital contribution in full (together with accrued interest) at any time on or before the date that is 90 days after the date that such capital contribution had been due, the governance rights of Cosan and Shell shall return to the status quo ante that pertained prior to such capital subscription contribution obligation.

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(e)      If Shell’s or Cosan’s respective holdings of outstanding common shares of Sugar and Ethanol Co are reduced relative to the other such Shareholder for any reason (whether due to any of Section 5.01(d), Section 7.06, Section 7.07 or Section 9.04 or otherwise) (the “Affected Shareholder”), then until such Section is no longer applicable, the following shall apply:

(i)      the size of the Supervisory Board may be increased or decreased by the other Shareholder; provided that, at any time after the completion of a Shell Partial Call Option (but before any completion of the Cosan Partial Call Option), in no event may the Supervisory Board contain less than eight members; and

(ii)      the Affected Shareholder shall be entitled to designate a number of Qualifying Persons to the Supervisory Board that is proportional at any such time to the percentage of then outstanding common shares held by such Affected Shareholder (or, as applicable, Cosan) (rounded downwards (but for this purpose, disregarding any rounding upwards effected in connection with the exercise and completion of any option under the Joint Venture Agreement), but in no event less than one.

Section 5.02.  Chairperson.  e) Subject to Sections 5.02(c) and 5.02(e) the Shareholders shall appoint ROSM as the chairperson of the Supervisory Board (the “Chairperson”) and shall vote to ensure he is maintained in such position until at least the tenth anniversary of the Closing Date so long as he is willing and neither Deceased nor Disqualified (each as defined in the Joint Venture Agreement) but only for so long as he retains a Controlling interest (directly or indirectly) over Cosan’s interest in the Joint Venture.

(a)      If no Option (as defined in the Joint Venture Agreement) has been exercised by the expiry of the Cosan Option Exercise Period (as defined in the Joint Venture Agreement), the right of Cosan and Shell to appoint the Chairperson shall alternate between Cosan and Shell for three year periods, commencing immediately after the expiry of the Cosan Option Exercise Period (as defined in the Joint Venture Agreement).  For the initial three year period, Shell will appoint the Chairperson.

(b)      If Shell exercises the Shell Partial Call Option (as defined in the Joint Venture Agreement), upon completion of the Shell Partial Call Option: (i) the Shareholders shall procure that the role and responsibilities of the Chairperson shall be amended such that they shall be limited to those of chairing the meetings, and managing the affairs, of the Supervisory Board, together with any other roles and responsibilities required by Brazilian law for a chairperson of a sociedade anônima (provided that, for the avoidance of doubt, the Chairperson shall not have a casting or tie-breaking vote in the event of deadlock amongst the members of the Supervisory Board), and (ii) ROSM shall remain the Chairperson for so long as he is willing and neither Deceased nor Disqualified (each as defined in the Joint Venture Agreement), but only for so long as he retains a Controlling interest (directly or indirectly) over Cosan’s interest in the Joint Venture; provided that, if Cosan exercises the Cosan Partial Call Option (as defined in the Joint Venture Agreement), upon completion of the Cosan Partial Call Option, all of the governance rights described in this Section 5.02(b) shall return to the status quo ante that pertained prior to its applicability, except that the right of Cosan and Shell to appoint the Chairperson shall alternate between Cosan and Shell (for each three year term), commencing immediately after the completion of the Cosan Partial Call Option.  For the initial such three year term, Shell will appoint the Chairperson.

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(c)      If, prior to the expiry of the Cosan Option Exercise Period (as defined in the Joint Venture Agreement), ROSM is Deceased or Disqualified (each as defined in the Joint Venture Agreement) or no longer willing to serve as the Chairperson, then Shell shall have the right to designate any member of the Supervisory Board as the Chairperson (as ROSM’s replacement as Chairperson), and may, for the avoidance of doubt, replace such designee with any other member of the Supervisory Board in its sole discretion, until such time as the Joint Venture is terminated.

(d)      If either the Cosan Interest or the ROSM Interest (each as defined in the Joint Venture Agreement) is sold to an Unsolicited Third Party Offeror (as defined in the Joint Venture Agreement), immediately upon such sale (i) the Shareholders shall procure that the role and responsibilities of the Chairperson shall be amended such that they shall be limited to those of chairing the meetings, and managing the affairs, of the Supervisory Board, together with any other roles and responsibilities required by Brazilian law for a chairperson of a sociedade anônima; provided that, for the avoidance of doubt, the Chairperson shall not have a casting or tie-breaking vote in the event of deadlock amongst the members of the Supervisory Board; (ii) Shell will have the right to appoint, for an initial three year term, the Chairperson; (iii) following the expiry of such initial term, the Third Party Offeror shall have the right to appoint the Chairperson for a further three year term; and (iv) such right to appoint shall alternate every three years thereafter.

(e)      The responsibilities of the Chairperson are set forth in Annex C hereto.  The Chairperson shall not have a casting or tie-breaking vote in the event of deadlock amongst the members of the Supervisory Board.

Section 5.03.  Supervisory Board Members to Be Shareholders.  Each member of the Supervisory Board shall be a shareholder of the Sugar and Ethanol Co as set forth in this Section 5.03.  Cosan shall assign one common share that it holds to each member of the Supervisory Board designated by Cosan pursuant to Section 5.01(b), and Shell shall assign one common share that it holds to each member of the Supervisory Board designated by Shell pursuant to Section 5.01(b), in each case, for so long as required in accordance with Brazilian Corporation Law.  The common shares assigned to the members of the Supervisory Board pursuant to this Section 5.03 shall be deemed, for all purposes and effects of this Agreement, to be owned by the Shareholder assigning such common shares.  Each Shareholder undertakes to obtain from each member of the Supervisory Board designated by such Shareholder sufficient powers to exercise the voting rights attached to the assigned common shares in the Sugar and Ethanol Co’s Shareholders’ Meetings.  The common shares which were assigned to each member of the Supervisory Board shall automatically transfer back to Shareholder which assigned them in the event that such member of the Supervisory Board ceases, for any reason whatsoever, to be a member of the Supervisory Board.  Cosan and Shell will procure that all members of the Supervisory Board shall comply with all applicable law in relation to their eligibility to serve as members of the Supervisory Board for the purposes of complying with this Section 5.03, each Shareholder will ensure that each of the members of the Supervisory Board which it nominates shall execute an agreement substantially in the form of the share assignment agreement attached hereto as Annex I.

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Section 5.04.  Removal of the Supervisory Board Members.  f) Each of Cosan and Shell agrees that, if at any time it is then entitled to vote for the removal of a member from the Supervisory Board, it shall not vote any of its JV Securities in favour of the removal of any member who shall have been designated pursuant to Section 5.01or Section 5.05, unless the Person entitled to designate or nominate that member shall have consented to his or her removal in writing; provided that, if the Person entitled to designate any member pursuant to Section 5.01 shall request in writing the removal of such member, each Shareholder shall vote its JV Securities in favour of such removal.

(a)      If a Shareholder ceases to hold any JV Securities, such Shareholder shall procure the resignation of, or remove from office, any members of the Supervisory Board nominated by such Shareholder, at the time of, or immediately prior to, the time at which it ceases to hold such JV Securities.

Section 5.05.  Vacancies on the Supervisory Board.  If there shall be any vacancy on the Supervisory Board (as a result of death, disability, retirement, resignation, removal or otherwise): i) the Person or Persons entitled under Section 5.01 to designate the member whose death, disability, retirement, resignation or removal resulted in that vacancy, subject to the provisions of Section 5.01, may designate another individual (for the purposes of this Article 5, the “Replacement Nominee”) to fill that vacancy and serve as a member of the Supervisory Board; and ii) subject Section 5.01, each of Cosan and Shell shall procure that the Replacement Nominee is elected to the Supervisory Board. Whichever of Cosan and Shell has the right to designate a Replacement Nominee shall procure that one common share is transferred to such member of the Supervisory Board such that he or she shall become a shareholder of the Sugar and Ethanol Co in accordance with Section 5.03.

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Section 5.06.  Meetings of the Supervisory Board.  g) The Supervisory Board shall hold a meeting at least once every calendar quarter and at any other time as may be requested by any three members of the Supervisory Board or the Chairperson.  Meetings shall be held at the headquarters of the Joint Venture or as may otherwise be agreed by the Supervisory Board. Any member of the Supervisory Board may attend any meeting via teleconference; provided that, unless (1) otherwise agreed by Cosan and Shell or (2) the meeting is called with less than 10 Business Days’ notice pursuant to paragraph (a) below, at least one member of the Supervisory Board nominated by each of Cosan and Shell shall attend in person.

(a)      Subject to the provisions of this Agreement, the S&E Byelaws and all applicable law, the members of the Supervisory Board may regulate their proceedings as they think fit.  Every member of the Supervisory Board shall receive notice of a meeting at least 30 Business Days for regularly scheduled meetings, 10 Business Days for ad hoc meetings (including meetings to appoint the Interim CEO (as defined below) pursuant to Section 6.05(b) (and at least 3 Business Days’ notice for ad hoc meetings where any 3 members of the Supervisory Board or the Chairperson reasonably consider that the matter(s) to be discussed is of a commercially urgent nature) before the intended date of the meeting.  Notice of a meeting of the Supervisory Board is deemed to be duly given to a member of the Supervisory Board if it is sent in writing to him at his last known address or other address given by him to the Sugar and Ethanol Co for that purpose or given to him by electronic means to an address given by him to the Sugar and Ethanol Co for that purpose.  The notice shall state the time, date, place and agenda of the meeting, attaching copies, where possible, of the documents or proposals to be considered or discussed.  A member of the Supervisory Board may waive the requirement that notice be given to him of a meeting of directors or a committee of directors, either prospectively or retrospectively, and this requirement for notice can be dispensed with if all the members of the Supervisory Board are present at the meeting.

(b)      The members of the Supervisory Board shall cause to be maintained minutes of all meetings of, and of all meetings of all committees of, the Supervisory Board.

(c)      The formal language of any meeting of the Supervisory Board shall be English (with contemporaneous interpretation into Portuguese at the request of any member of the Supervisory Board); provided that the minutes of the meetings shall be in English and Portuguese (but the Portuguese shall prevail).

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Section 5.07.  Proxies for Supervisory Board Members.  Any member of the Supervisory Board may appoint any existing member of the Supervisory Board willing to act, without the approval of the other members of the Supervisory Board, to attend and vote at meetings in accordance with the instructions of such appointing member of the Supervisory Board. Such appointor may remove from office any such proxy so appointed by him.  Any member of the Supervisory Board voting by proxy shall formalize his vote in writing by letter, facsimile or e-mail promptly following the meeting at which the vote was cast by his proxy. Such letter, facsimile or e-mail shall be recorded in the book of minutes of meetings of the Supervisory Board.

Section 5.08.  Quorum of the Supervisory Board.  The quorum of the Supervisory Board shall be two-thirds of the members designated by Cosan and two-thirds of the members designated by Shell, except that, (i) in the circumstances described in Section 5.12, the quorum of the Supervisory Board shall require all three members designated by either Shareholder that is not the Indemnifying Party or the conflicted Shareholder (as the case may be) and (ii) if the circumstances as described in Section 5.01(e) shall apply, the quorum of the Supervisory Board shall be two-thirds of the members designated by the non-Affected Shareholder and two-thirds of the members designated by the Affected Shareholder (except that, if a quorum does not exist at a particular meeting due to the absence of any of the designees of the Affected Shareholder, then any Shareholder may require the meeting to be adjourned for no less than 3 Business Days, and at the resumed meeting on the matters to have been covered at the adjourned meeting only, the quorum of the Supervisory Board shall require only a majority of the members designated by the non-Affected Shareholder.  A person voting as a proxy for a member of the Supervisory Board shall, if his appointor is not present, be counted in the quorum in his own capacity and in his capacity as a proxy.

Section 5.09.  Action by the Supervisory Board.  Part 1 of Annex D hereto sets forth the functions of the Supervisory Board.  Subject to Sections 5.01(d), 5.01(e), 7.06, 7.07 and 9.04, actions of the Supervisory Board shall require the affirmative vote of at least, in respect of the matters set forth in Part 2 of Annex D, five of the six members, and, in respect of the matters set forth in Part 3 of Annex D, four of the six members of the Supervisory Board, in each case at which a quorum is present.  If the Supervisory Board cannot reach a decision in respect of any matter set forth in Annex D, such decision will be referred to the Shareholder Representatives for resolution pursuant to Annex A to the extent possible, where requested by any member of the Supervisory Board.

Section 5.10.  Expenses and Compensation of Supervisory Board Members.  The Shareholders shall cause the Sugar and Ethanol Co to pay all reasonable out-of-pocket expenses incurred by each member of the Supervisory Board in connection with attending regular and special meetings of the Supervisory Board and any committee thereof, and any such meetings of the board of directors of any Subsidiary of the Sugar and Ethanol Co and any committee thereof, in addition to any further compensation for the members of the Supervisory Board that may be approved from time to time by the Shareholders at any Shareholder meeting.

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Section 5.11.  Committees.  The Supervisory Board shall create any committees required pursuant to any agreement between Cosan and Shell and may create and operate any other committees as it may determine; provided that the Supervisory Board shall create and maintain the committees as set out in, and in accordance with the provisions of, Annex G.  Designees of Cosan and Shell shall be entitled to equal representation on any committee of the Supervisory Board.

Section 5.12.  Shareholder Indemnification Matters; Conflicts of Interest.(a)Notwithstanding anything in this Agreement to the contrary, if the Sugar and Ethanol Co is an Indemnified Party (as defined in the Framework Agreement) and brings a Claim (as defined in the Framework Agreement) against a Shareholder who is the Indemnifying Party (as defined in the Framework Agreement), in no event shall the members of the Supervisory Board designated by the Indemnifying Party be entitled to vote on any matters presented to the Supervisory Board with respect to the bringing of such Claim; provided, however, that members of the Supervisory Board designated by the Indemnifying Party shall have the right to participate in any and all discussions concerning such Claim and shall have the opportunity to express their views and opinions with respect to such Claim.  The members of the Supervisory Board designated by the Indemnified Party shall have the sole power and authority to vote on all matters with respect to the bringing of such Claim.

(b)      In the event that any competitively sensitive information is to be discussed or reviewed at any meeting of the Supervisory Board and the participation in any such discussion or the receipt of any such information by any Supervisory Board member would (i) present a conflict of interest in respect of the interests of the Shareholder who appointed such member, (ii) would risk placing the Sugar and Ethanol Co in a potentially competitively disadvantaged position or (iii) would reasonably be expected to violate applicable antitrust or competition laws, such member shall be required to recuse himself or herself from such discussion and shall not be entitled to receive such information; provided, however, that, on any vote in respect of any such matter, the other designees to the Supervisory Board of the Shareholder who also designated such member shall be entitled to exercise a proxy to vote on behalf of such member on that matter.  In connection with this Section 5.12(b), each member of the Supervisory Board shall certify within 20 Business Days of the end of each fiscal year of the Sugar and Ethanol Co that he or she has not had access to commercially sensitive information of the JV Entities in the preceding fiscal year in violation of this Section.

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(c)      Notwithstanding anything in this Agreement to the contrary, in no event shall the members of the Supervisory Board designated by Shell or Cosan have the right to vote on any transactions, actions or agreements between Sugar and Ethanol Co or any of its Subsidiaries, on the one hand, and such Shareholder or any of its Affiliates, on the other.

ARTICLE 6

Executive Board

Section 6.01.  Executive Board.  The Sugar and Ethanol Co shall have an executive board (Diretoria) (the “Executive Board”).  The Executive Board shall consist of the following voting members: (i) the chief executive officer (the “CEO”); (ii) the chief financial officer (the “CFO”); (iii) the chief operating officer in respect of the businesses operated by the Sugar and Ethanol Co (the “COO (Sugar and Ethanol)”); (iv) an executive officer who shall be the same person who is appointed as the chief operating officer of the Downstream Co (the “COO (Downstream)”); and (v) such additional members as may be determined by approval of five of the six members of the Supervisory Board; provided that at no time shall there be more than eight members of the Executive Board.  The members of the Executive Board and all Joint Venture staff shall serve the interests of the Joint Venture, and no such member shall be deemed to represent any particular Shareholder.  Each member of the Executive Board shall be an executive of, or formally seconded to (subject to the approval of four of the six members of the Supervisory Board pursuant to Section 7.02), the Sugar and Ethanol Co and shall reside in Brazil.  Subject to Section 6.04, each member of the Executive Board (other then the CEO) shall serve for a term of three years, and the CEO shall serve for a term of two years (subject in each case to re-election).

Section 6.02.  Meetings of the Executive Board.  h) The Executive Board shall hold a meeting at least once every calendar month and at such other time as may be requested by the CEO.  Meetings shall be held at the headquarters of the Joint Venture or as may otherwise be agreed by the Executive Board.  Any member of the Executive Board may attend any meeting via teleconference unless the CEO notifies the other members that such meeting must be held with the attendance of all members in person.

(a)      Subject to the provisions of this Agreement, the S&E Byelaws and all applicable law, the members of the Executive Board may regulate their proceedings as they think fit.

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(b)      The members of the Executive Board shall cause to be maintained minutes of all meetings of the Executive Board.

Section 6.03.  Action by the CEO.  Annex E hereto sets forth the functions of the CEO.  Except as set forth below, all actions and decisions of the CEO may only be taken  in compliance with the responsibilities and powers set forth in the Manual of Authorities. Subject to the above and the limitations set out in Annex F hereto, the CEO may delegate certain decision making powers or duties to the Senior Management (as defined below) in his sole discretion.

Section 6.04.  Removal of Executive Board Members.  (a)The CEO may be removed, with or without cause, prior to the end of his or her term, by an affirmative vote of five of the six members of the Supervisory Board.  Subject to Section 6.05, any member of the Executive Board (other than the CEO) may be removed from his position on the Executive Board, with or without cause by either the CEO (in which case the Shareholders shall be obligated to cause all of the Supervisory Board members to vote for such individual’s removal) or upon an affirmative vote of five of the six members of the Supervisory Board.

(b)      At the end of any two-year term of office of the CEO, either Cosan or Shell may propose the removal of the CEO to the other Shareholder by providing the other Shareholder with notice setting forth in writing in reasonable detail a fully reasoned and good faith explanation of the reasonable grounds for such removal and evidence why and how the CEO has failed in his responsibilities (together with any supporting documentation deemed reasonably necessary by such Shareholder to support such removal), and in this case, (i) if the other Shareholder disagrees with this conclusion, it shall provide written notice to the notifying Shareholder of its disagreement, (ii) the Shareholder Representatives shall meet as promptly as practicable to discuss such matter and (iii) if the Shareholder Representatives are unable to resolve such disagreement within 20 Business Days of the initiating notice and the notifying Shareholder still wishes to effect the CEO’s removal, the notified Shareholder shall, upon receipt of notice to this effect, be obligated to cause all of the members of the Supervisory Board that it has appointed to vote for the removal of the CEO pursuant to Section 6.04(a).

Section 6.05.  Vacancies on the Executive Board.i) Subject to the remainder of this Section 6.05 and to Section 7.07, if any individual serving as CEO shall leave the employ of the Sugar and Ethanol JV or is otherwise no longer serving in that capacity (whether due to replacement, expiration of term or otherwise), then:

(i)      the Supervisory Board shall discuss and define the profile(s) they consider desirable in a CEO;

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(ii)      each Shareholder shall propose two candidates to become the CEO, taking into account such profile(s), which persons may be vetoed by the other Shareholder (but solely for reasons related to such person’s qualifications, experience, track record, personal profile, past compliance with the General Business Principles of the Joint Venture, and such person’s ability to represent the interests of the Joint Venture above those of either Shareholder);

(iii)                 if the candidates proposed by a Shareholder are vetoed pursuant to paragraph (ii) above, such Shareholder may propose additional candidates until both Shareholders have agreed on at least two mutually agreeable candidates; and

(iv)                 the Chairperson shall nominate one of the proposed candidates for approval by the Supervisory Board, and the Shareholders shall procure that their respective appointees to the Supervisory Board shall vote to approve the appointment of the individual nominated by the Chairperson.

(b)      Until such time as the Supervisory Board elects the replacement CEO pursuant to Section 1)i), an interim CEO (the “Interim CEO”) shall serve in his or her place.  The Supervisory Board shall endeavour to appoint the Interim CEO by approval of five of the six members of the Supervisory Board within two weeks of such vacancy; provided that if the Supervisory Board does not approve an Interim CEO within such time, the COO (Sugar and Ethanol), the COO (Downstream) and the CFO shall elect the Interim CEO from among the members of the Executive Board by a simple majority vote, and the Shareholders shall procure that their respective appointees to the Supervisory Board shall vote to approve the appointment of the person so elected.  For the avoidance of doubt, there shall be no Interim CEO until a majority is obtained. The Interim CEO shall serve for a maximum of 90 days, at which time, if no replacement CEO has been elected, a new Interim CEO shall be selected using the same procedures described above in this Section 6.05(b).  No member of the Executive Board shall serve twice as Interim CEO before every other member of the Executive Board has served once.

(c)      Subject to the remainder of this Section 6.05 and to Section 7.07, if any individual serving: i) as a member of the Executive Board (other than CEO); or ii) in any other position of the Joint Venture who reports directly to the CEO (each such individual, a “Direct Report”), shall leave the employ of the Sugar and Ethanol JV or is otherwise no longer serving in that capacity (whether due to replacement, expiration of term or otherwise), then the CEO shall submit to the Supervisory Board a nominee, who in the case of the CFO, the COO (Sugar and Ethanol) or the COO (Downstream) shall be selected from among two individuals submitted by: (A) in the case of the CFO, the Shareholder other than the Shareholder who submitted the nominee who was appointed the CEO; (B) in the case of the COO (Sugar and Ethanol), Cosan; and (C) in the case of the COO (Downstream), Shell.  Approval of such

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nominee shall require an affirmative vote of at least five out of the six members of the Supervisory Board.  The nominee shall be selected based on both individual merits and capabilities as well as potential contribution to the Executive Board (or, in the case of Direct Reports, his or her relevant team), with the objective of assembling the best team capable of delivering the Joint Venture strategy and Business Plan.  Members of the Supervisory Board may decline to approve any such nominee based only on lack of relevant qualifications, experience, track record, personal profile, past compliance with the General Business Principles of the Joint Venture, and/or such person’s ability to represent the interests of the Joint Venture above those of either Shareholder.  If the Supervisory Board declines to nominate the nominee, the CEO may submit a different candidate (selected from among two new individuals designated by the Shareholder entitled to do so under this paragraph (c)) to be approved pursuant to the procedures specified in this paragraph (c) above until an individual is approved to serve in such capacity by the Supervisory Board.  In the case of any other position on the Executive Board not otherwise addressed in this Section 6.05(c), the process set forth above shall be followed save that the CEO shall not be required to select his nominee from any pool of persons selected by any Shareholder.

(d)      If no Option (as defined in the Joint Venture Agreement) has been exercised by the expiry of the Cosan Option Exercise Period (as defined in the Joint Venture Agreement), then: (i) Shell shall have the right to designate any person as the CEO (in replacement of the then serving CEO), for a three-year term (commencing immediately); (ii) Cosan shall have the right to designate the CFO (in replacement of the then serving CFO) for a three-year term (commencing immediately); and (iii) the right of each of Shell and Cosan to designate the CEO and CFO shall thereafter alternate between them for a period of three years for each such designating party. For the avoidance of doubt, Section 6.05(c) will continue to apply in respect of all other positions on the Executive Board.

(e)      In the event ROSM is Deceased or Disqualified (in each case as defined in the Joint Venture Agreement) or unwilling to serve as the Chairperson prior to the expiry of the Cosan Option Exercise Period (as defined in the Joint Venture Agreement), then: (i) Shell shall have the right to designate any person as the CEO (in replacement of the then serving CEO), for both the remainder of the then current term and for all subsequent terms; (ii) ROSM (or his successor in law) shall thereafter have the right to designate the CFO (in replacement of the then serving CFO) for both the remainder of the then current term and for all subsequent terms.  For the avoidance of doubt, paragraph (c) will continue to apply in respect of all other positions on the Executive Board.

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(f)      If either the Cosan Interest or the ROSM Interest (each, as defined in the Joint Venture Agreement) is sold to an Unsolicited Third Party Offeror (as defined in the Joint Venture Agreement), immediately upon such sale, Shell will have the right to appoint the CEO (in replacement of the then serving CEO) for the then-current term, and the Third Party Offeror (as defined in the Joint Venture Agreement) will have the right to appoint the CFO (in replacement of the then serving CFO) for the then-current term.  Following the expiration of the then-current term, the Third Party Offeror shall have the right to appoint the CEO for a three year term and Shell shall have the right to appoint the CFO for a three year term, and such appointment rights with respect to the CEO and CFO shall alternate every three years thereafter.  For the avoidance of doubt, paragraph (c) will continue to apply in respect of all other positions on the Executive Board.

(g)      Each Shareholder shall, and shall cause each member of the Supervisory Board to, approve the appointment or removal of any individual appointed or removed pursuant to, and in accordance with the other provisions of this Section 6.05.

Section 6.06.  Compensation.  The members of the Executive Board shall be compensated in accordance with the decisions of the Supervisory Board taken pursuant to Annex D and as approved by the Shareholders in accordance with Annex B.

Section 6.07.  Committees.  The Executive Board shall create any committees required pursuant to agreement between Cosan and Shell and may create and operate any other committees as it may determine.

ARTICLE 7

Other Governance Matters

Section 7.01.  Manual of Authorities.  The Shareholders shall cause the Supervisory Board to adopt on the date of this Agreement, or as soon as practicable thereafter, a manual of authorities (the “Manual of Authorities”) in a form agreed by Cosan and Shell, consistent with the levels of authority set out in Annex D, Annex E and Annex F hereof. The Manual of Authorities shall set forth the extent and limitations of authority, in respect of the taking of decisions on behalf of the Sugar and Ethanol Co, which each executive of the Sugar and Ethanol Co has been granted and shall be registered at the Sugar and Ethanol Co’s headquarters.

Section 7.02.  Secondments.  j) The Shareholders may provide secondees to serve as members of the Executive Board.  Subject to Section 6.05, if a secondee of a Shareholder is nominated to serve as CEO, as any member of Senior Management or in any role reporting directly to any member of Senior Management, approval of such nominee shall require an affirmative vote of at least four of the six members of the Supervisory Board.

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(a)      Subject to Section 6.05, a secondee of a Shareholder may be appointed to serve in any capacity in the Joint Venture (other than those specified in 1)j)) with approval of the CEO only.

(b)      Subject to Section 7.02(d), officers or employees of the Sugar and Ethanol Co or any of its Subsidiaries may be seconded to Cosan or Shell, or any of their respective Affiliates.  Cosan, Shell and the Sugar and Ethanol Co shall together consider opportunities for, and develop a plan in respect of, any such secondments on a yearly basis (with an initial meeting for such purpose being held within 180 days of the Closing Date).  In the event that Cosan or Shell agrees to accept a secondee from the Sugar and Ethanol Co or any of its Subsidiaries, the secondment policies, procedures and confidentiality obligations customary for secondees to the entity (and any specific department) to which such officer or employee is proposed to be seconded shall apply to the extent possible.

(c)      Unless otherwise agreed in writing between the Shareholders, all employees of Shell (or any of its Affiliates) transferred to the Joint Venture at Closing shall no longer be employees of Shell (or the relevant Affiliate), but shall be employees of the Joint Venture following Closing.

(d)      Without limiting the generality of Section 7.02(b), Shell shall ensure that the Sugar and Ethanol Co and each of its Subsidiaries may second any of its respective employees to the research and development team within Shell or any of Shell’s Affiliates which manages and oversees any project or programme funded in whole or in part by the Sugar and Ethanol Co or any of its Subsidiaries; provided that, in each case, i) any such secondee signs any secondment, confidentiality and/or employment agreements which are customary and appropriate in the circumstances, ii) subject to paragraph i) above, the business receiving the secondee and the Sugar and Ethanol Co shall each be liable for 50 per cent. of any salary or secondment allowance of such secondee for the duration of his secondment and any other costs relating thereto; and iii) under this Section 7.02(d), any such secondee may only fill a role exclusively relating to projects or programmes funded in whole or in part by the Sugar and Ethanol Co or any of its Subsidiaries and not any role with wider responsibilities within Shell or the Affiliate of Shell to which he is seconded (provided that Shell shall not deviate from its customary practices relating to (a) secondments from non-Affiliates or (b) allocation of staffing responsibilities, in either case in a manner which limits the positions for which such a secondee is eligible).

Section 7.03.  Dismissals.  k) The CEO (or any person otherwise agreed by four or more members of the Supervisory Board) will ensure that any breach of the Key Policies by an employee of, or a secondee to, the Sugar and Ethanol, is investigated and, following such investigation, shall ensure that such action is taken as he (or his designate) considers appropriate in relation to such breach, which may include dismissal.

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(a)      Subject to applicable law and any policies adopted by the Supervisory Board, any employee of the Sugar and Ethanol Co (other than a member of the Executive Board) may be removed, with or without cause, by the CEO.

Section 7.04.  Subsidiary Governance.  The senior management (and, where existent, the Conselho de Administração) of each subsidiary of the Sugar and Ethanol Co shall be selected (to the extent not restricted by any governing document of a subsidiary which is not wholly owned) by the CEO of the Sugar and Ethanol Co or his delegate; provided that a simple majority of the Supervisory Board may veto any such decision and select alternative persons for such roles.

Section 7.05.  Senior Management.  The senior management of the Sugar and Ethanol Co, which shall include the members of the Executive Board, excluding the CEO, and any Direct Report (the “Senior Management”) have the right to make decisions in respect of the Sugar and Ethanol Co to the extent set out in Annex F hereto, without the need for further approval of the CEO or the Supervisory Board. Except as set forth in Annex F, all actions and decisions of the Senior Management may only be taken in compliance with the responsibilities and powers set forth in the Manual of Authorities.

Section 7.06.  Indemnity Delinquency Period.  During the Indemnity Delinquency Period, l) Cosan will only be entitled to: (1) vote the shares in the Sugar and Ethanol Co then Beneficially Owned by Cosan at any meeting of the shareholders of Sugar and Ethanol Co with respect to those matters set out in Part 2 of Annex B (and Shell shall otherwise be entitled to vote all of the shares in the Sugar and Ethanol Co then Beneficially Owned by Cosan at any such meeting with respect to all other matters); and (2) have its remaining nominees on the Supervisory Board of the Sugar and Ethanol Co vote on those matters set out in Part 4 of Annex D (and those nominees shall not be entitled to vote on any other matters whatsoever); m) the chairperson of the relevant shareholders’ meeting shall refrain from counting any vote exercised in violation of the immediately preceding clause and, in this case, Section 5.01(e) shall apply and n) if Cosan makes payment in full of the relevant Determined Indemnity Amount (as defined in the Framework Agreement) (plus, as applicable, any accrued interest pursuant to clause ‎14.7 (Default interest) of the Framework Agreement) at any time on or before the date that is 90 days after the date on which the relevant Determined Indemnity Amount (as defined in the Framework Agreement) was determined, the governance rights of Cosan and Shell shall return to the status quo ante that pertained prior to such payment obligation.

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Section 7.07.  Governance after any Completion of a Shell Partial Call Option.  If Shell exercises the Shell Partial Call Option (as defined in the Joint Venture Agreement), upon completion of the Shell Partial Call Option, (a) Shell shall have the right to remove, appoint and designate each member of the Executive Board (other than the CFO), and Cosan shall have the right to remove, appoint and designate the CFO, and (b) Cosan will only be entitled to: (i) have its remaining nominees on the Supervisory Board of the Sugar and Ethanol Co and the Downstream Co vote on those matters set out in Part 5 of Annex D (and those nominees shall not be entitled to vote on any other matters whatsoever); (ii) the chairperson of the relevant shareholders’ meeting shall refrain from counting any vote exercised in violation of paragraph (i) above; and (iii) in this case, Section 5.01(e) shall apply; provided that, if Cosan exercises the Cosan Partial Call Option (as defined in the Joint Venture Agreement), upon completion of the Cosan Partial Call Option, all of the governance rights described in this Section 7.07 shall return to the status quo ante that pertained prior to its applicability, except that:

(A)     Shell shall have the right to designate (including the right to remove and replace) any person(s) as the Chairman and CEO (in replacement of the then serving Chairman and CEO), for a three-year term (commencing immediately) e;

(B)      Cosan shall have the right to designate (including the right to remove and replace) the CFO (in replacement of the then serving CFO) for a three-year term (commencing immediately); and

(C)      the right of each of Shell and Cosan to designate (including the right to remove and replace) the Chairman and CEO, on the one hand, and CFO, on the other, shall thereafter alternate between them (for each three year term) for each such designating party;

provided that, for the avoidance of doubt, in this case, Section 6.05(c) will continue to apply in respect of all other positions on the Executive Board.

Section 7.08.  Iogen Energy.

(a)      Shareholder Rights Generally.

Upon the transfer of the Iogen Shares to the Sugar and Ethanol Co pursuant to clause 7.9 (Iogen) of the Framework Agreement (or as soon as reasonably practicable thereafter) Shell shall take such steps as may be necessary to ensure that all shareholder rights then held by SOIBV or any of its Affiliates with respect to Iogen Energy under the terms and conditions of the amended and restated shareholders' agreement dated 1 July 2008 between SOIBV, Iogen Corp, and Iogen Energy, as amended 15 April 2010 shall transfer to the Sugar and Ethanol Co and shall be exercised by the Sugar and Ethanol Co in its sole discretion; provided that (1) subject to paragraph (b) below, while Shell is committed to fund Iogen Energy pursuant to paragraph (b) below, each of Shell and any Affiliate of Shell shall retain any rights it has in respect of the allocation of funds and the management of the budget of Iogen Energy, and (2) following the expiry of the period for which Shell is committed to fund Iogen Energy pursuant to paragraph (b) below, Shell shall ensure that all such rights are promptly transferred to the Sugar and Ethanol Co.

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(b)      Funding and Budget.

(i)      Shell shall ensure that SCCL or an Affiliate of Shell continues to fund Iogen Energy in accordance with the terms and conditions of, and in compliance with, the amended and restated joint development and funding agreement dated July 1, 2008, as amended, between Iogen Energy, Iogen Corporation and SCCL (the “Iogen Funding Arrangements”), from the date of this Agreement until 31 December 2014; provided that Shell shall, and shall cause its Affiliates to: (3) in considering any decisions regarding (i) the funding of Iogen Energy from the date of this Agreement until December 31, 2014, and/or (ii) the approval of the budget of Iogen Energy, in each case, act reasonably, in good faith and taking into account the interests of the Joint Venture; (4) subject of all applicable confidentiality obligations, keep the Supervisory Board apprised of all material decisions relating to Shell’s, or its Affiliate’s, funding of Iogen Energy and, in the event that Shell and its Affiliates cease funding (in accordance with the terms and conditions of, and in compliance with, the Iogen Funding Arrangements), of the reasons for the cessation of funding (including the details of any research and development targets not met by Iogen Energy); and (5) notify the Sugar and Ethanol Co in writing if Shell and its Affiliates decide to cease funding Iogen Energy in accordance with the terms and conditions of, and in compliance with, the Iogen Funding Arrangements.

(ii)      From the date of any transfer of Iogen Shares to the Sugar and Ethanol Co in accordance with clause 7.9.1 of the Framework Agreement until the earliest of: (a) the redemption or cancellation of all remaining class A preferred shares, series 1 of Iogen Energy held by SOIBV; (b) the date on which Shell and its Affiliates cease to fund Iogen Energy, as notified to the Sugar and Ethanol Co in writing pursuant to Section 7.08(b)(i)(C); and (c) December 31, 2014 (such period being the “Shell Budget Approval Period”), the Supervisory Board shall have the right to approve the annual budget of Iogen Energy but shall exercise such right only in accordance with the direction of SOIBV or its Affiliate; provided that, for the avoidance of doubt, upon the expiration of the Shell Budget Approval Period the Supervisory Board shall no longer be required to act in respect of such rights in accordance with the direction of SOIBV or its Affiliate, and shall have the right to approve the budget in its sole discretion.

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(c)      Nomination of Directors.  While SOIBV or any of its Affiliates retains any interest in Iogen Energy, Shell shall ensure that Shell, Cosan and the Sugar and Ethanol Co shall each have the right to nominate one of the three directors of Iogen Energy which SOIBV has the right to nominate pursuant to the Iogen Shareholders’ Agreement.  Upon the transfer of the Iogen Shares to the Sugar and Ethanol Co, pursuant to clause 7.9 (Iogen) of the Framework Agreement, if the Sugar and Ethanol Co or any of its Affiliates has the right to nominate directors pursuant to the Iogen Shareholders’ Agreement, the Sugar and Ethanol Co shall ensure that Shell, Cosan and the Sugar and Ethanol Co shall each have the right to nominate one of the three directors of Iogen Energy which SOIBV; provided that, the party which controls the rights of appointment of directors of Iogen Energy may decline to appoint any Person nominated by the other parties but, in any such case, such other party, shall have the right to nominate an alternative Person for the position until a nominee acceptable to the appointing party is nominated.  Notwithstanding anything in this Agreement to the contrary, from and following the completion of Shell’s funding of Iogen Energy on behalf of the Sugar and Ethanol Co pursuant to and in accordance with Section 7.08(b), and if the Sugar and Ethanol Co or any of its Affiliates has the right to nominate directors pursuant to the Iogen Shareholders’ Agreement, the Sugar and Ethanol Co shall have the right to nominate the three directors of Iogen Energy in its sole discretion.

Section 7.09.  Iogen Co-Investment Rights in US and Canada.

(a)      In the event that Shell (or its Affiliate) proposes to initiate front end development or equivalent pre-construction development of a cellulosic biofuel facility, other than the First Production Facility that will be licensed under any Iogen Technology (a “Qualifying Facility”), Shell (or Shell's Affiliate) shall provide at least 120 days' written notice to the Sugar and Ethanol Co of its intention to make such an investment, offering the Sugar and Ethanol Co the right to co-invest with Shell in such plant.  Such right to co-invest shall include: ii) the right of the Sugar and Ethanol Co to purchase an interest in the Qualifying Facility, such interest being (at the Sugar and Ethanol Co's election) (a) no more than 49 per cent. of the total investment minus any proportion which Iogen Corp or its assignee has elected to invest pursuant to its option to do so under the Iogen TLA and (b) no less than 10 per cent of the total investment; iii) the entering into of terms and conditions relating to the Qualifying Facility being no more onerous on the Sugar and Ethanol Co than on Shell (or its Affiliate) (and which may include future funding obligations); and iv) the right of the Sugar and Ethanol Co to receive preferential rates in respect of royalties for the use of any technology developed by the Qualifying Facility, such royalties being calculated on the same basis as any royalties payable by Shell (or its Affiliate).  The Parties acknowledge that, pursuant to the Iogen TLA, no preferential rate will be available to either Shell or the Sugar and Ethanol Co once the annual nameplate ethanol capacity of all facilities then in operation in which Iogen Corp has not co-invested, licensed to Shell, any of its Affiliates and the Sugar and Ethanol Co under the Iogen TLA, exceeds one billion US gallons.

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(b)      Shell shall, promptly on the written request of the Sugar and Ethanol Co, provide the Sugar and Ethanol Co with further information of the investment proposal in sufficient detail (to the extent available and subject to applicable confidentiality provisions) to enable the Sugar and Ethanol Co to decide on whether it wishes to co-invest with Shell (or Shell's Affiliate) in the plant, and shall negotiate in good faith with the Sugar and Ethanol Co in respect of any co-investment.  In addition, Shell shall notify the Sugar and Ethanol Co in writing, promptly upon becoming aware, of the extent to which Iogen Corp or its assignee will co-invest (or not) in the Qualifying Facility in accordance with the Iogen TLA and, therefore, the percentage investment available to the Sugar and Ethanol Co.  The Sugar and Ethanol Co shall, within 60 days of receipt of the details referred to above (including details of the percentage investment available to it), confirm in writing to Shell if it wishes to exercise its right to co-invest in the Qualifying Facility.  Following receipt of such confirmation by Shell, Shell and the Sugar and Ethanol Co shall take such steps as may be necessary to enter into the co-investment arrangement in accordance with subparagraphs ii) to iv) of paragraph (a) above.

(c)      For the avoidance of doubt, the provisions of this Section 7.09 shall not apply to any investment by Shell or any of its Affiliates with respect to Iogen technology or plants outside of the USA or Canada and shall not apply to any investments in Codexis technology or facilities.

Section 7.10.  Codexis.  Shell shall ensure that Equilon Enterprises LLC dba Shell Oil Products US (“Equilon”) continues to fund Codexis in accordance with the terms and conditions of, and in compliance with, the amended and restated collaborative research agreement between Codexis and Equilon effective November 1, 2006, as amended, (the “Codexis Funding Arrangements”) from the date of this Agreement until December 31, 2014; provided, that Shell shall, and shall cause its Affiliates, to: (i) in considering any decisions regarding the funding of any research and development programmes of Codexis existing at the date of this Agreement, from the date of this Agreement until December 31, 2014, act reasonably, in good faith and taking into account the interests of the Joint Venture; (ii) subject to all applicable confidentiality obligations, keep the Supervisory Board apprised of all material decisions relating to Shell’s or any of its Affiliate’s funding of Codexis and, in the event that Shell and its Affiliates cease funding (in accordance with the terms and conditions of, and in compliance with, the Codexis Funding Arrangements), of the reasons for the cessation of funding (including the details of any research and development targets not met by Codexis); and (iii) notify the Sugar and Ethanol Co in writing if Shell and its Affiliates decide to cease funding Codexis in accordance with the terms and conditions of, and in compliance with, the Codexis Funding Arrangements.

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Section 7.11.  Further Assurances with Respect to the Sublicences.  In the event that, due to any laws, rules or regulations of the National Institute of Industrial Property in Brazil (Instituto Nacional da Propiedade Industrial) (or any successor body or any other relevant governmental authority) (“INPI”), the Sugar and Ethanol Co would lose its right to use the technology licensed to it under the Codexis Sublicence Agreement and/or the Iogen Sublicence Agreement, as applicable (in each case, o) prior to the natural expiry of such licence under the terms and conditions of the relevant agreement and p) in the absence of any termination of such licence by the applicable Shell Affiliate, in accordance with the terms and conditions of the relevant agreement, due to a breach by the Sugar and Ethanol Co), then Shell shall, and shall cause its relevant Affiliates to, to use best efforts to resolve any deficiencies due to any laws, rules or regulations of INPI and to cooperate with Sugar and Ethanol Co to ensure that its right to use the technology licensed to it under the Codexis Sublicence Agreement and/or the Iogen Sublicence Agreement is sustained and that the Sugar and Ethanol Co retains whatever rights have been licensed to it by Shell or its Affiliates, respectively, on substantially the same terms and conditions as contemplated in the versions of such agreements attached in agreed form to the Framework Agreement.

Section 7.12.  CTC.

(a)      Cosan and the Sugar and Ethanol Co shall use their respective reasonable best efforts to procure an amendment to Section 2.1.2 of the CTC Shareholders’ Agreement to enable each of them to act individually with respect to their rights as shareholders of CTC thereunder (the “Amendment”).

(b)      Notwithstanding the provisions of Section 7.12(a) and pursuant to Section 3.2 of the CTC Shareholders’ Agreement, Cosan and the Sugar and Ethanol Co agree that they shall jointly appoint the COO to serve as their representative on the board of directors of CTC for the first two initial successive two year terms and (to the extent agreed by each of Cosan and the Sugar and Ethanol Co in respect of any subsequent term) any subsequent term.  In the event that there is a disagreement between Cosan and the Sugar and Ethanol Co with respect to the appointment of the COO for any subsequent term, then the right to appoint the representative on the board of directors of CTC shall alternate between Cosan and the Sugar and Ethanol Co for a two-year period, with Cosan having the first right of appointment.

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(c)      Except as set forth in Section 7.12(d), Cosan and the Sugar and Ethanol Co shall consult with each other on all matters which require a shareholder vote or a vote of their member on the board of directors of CTC as provided under the terms of the CTC Shareholders’ Agreement or the by-laws of CTC; provided that the Sugar and Ethanol Co shall make the final determination with respect to all such matters.

(d)      Notwithstanding the foregoing provisions of this Section 7.12, if the Amendment  has occurred, with respect to any matter that requires the vote of the shareholders of CTC that relates to the payment of dividends by CTC, the initial public offering of CTC, the merger of CTC with another entity or any matter which bears upon the economic ownership of equity in CTC, Cosan and the Sugar and Ethanol Co shall be free to vote individually as shareholders of CTC and shall not be required to consult with each other or vote together as a block.  

ARTICLE 8

Scope of the Sugar and Ethanol Co; Acquisitions; Business Opportunities

Section 8.01.  Scope of the Sugar and Ethanol Co.  The principal business of the Sugar and Ethanol Co will be:

(a)      the production, sale and trading of Sugar globally, other than the Retail Sugar Business to the extent retained by Cosan (or any of its Subsidiaries) pursuant to Clause 4 of the Framework Agreement;

(b)      the production of Ethanol globally, the sale of Ethanol within any country in which the Joint Venture produces it, and the trading of Ethanol globally, subject to compliance with the Global Ethanol Trading Agreement;

(c)      the further development (and licensing) of Sugar and ethanol (and not only Ethanol) production-related technology globally, including in accordance with Article 7 of this Agreement;

(d)      the production and sale of Co-Gen Products, at the Sugar and Ethanol facilities of the Joint Venture; and

(e)      investment in, and the operation of, Sugar-related or ethanol-related (and not only-Ethanol-related) logistics infrastructure including pipelines within Brazil and within any other countries in which the Joint Venture produces Sugar and/or ethanol (and not only Ethanol),

(together, the “Business”).

Section 8.02.  Restrictions.

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(a)      For so long as both Cosan and Shell are Shareholders, none of the Shareholders (or any of their Affiliates) shall:

(i)      engage in the Business in Brazil other than through the Sugar and Ethanol Co (or another JV Entity); provided that: (1) for the avoidance of doubt, any of the Shareholders (or any of their Affiliates) may sell or trade non-sugarcane ethanol in Brazil; (2) any of the Shareholders (or any of their Affiliates) may engage in the further development of second-generation technology in Brazil (and, for the avoidance of doubt, Shell (or any of its Affiliates) may continue the Existing Academic Projects in Brazil); (3) Cosan (or any of its Affiliates) may carry on any business engaged in the  investment in, and/or the operation of, Sugar-related storage and transportation assets in Brazil; and (4) Cosan may own the CTC Interest; and

(ii)      engage in the production of Sugar and Ethanol outside of Brazil other than through any JV Entity; provided that any of the Shareholders (or any of their Affiliates) may engage in: (5) such production outside of Brazil in accordance with Section 8.04; (6) the further development of, or production of ethanol from, second-generation technology outside of Brazil; and (7) Cosan, Shell and any of their respective Subsidiaries may engage, outside of Brazil, in the retail sugar business to the extent retained by Cosan (or any of its Subsidiaries) pursuant to Clause 4 of the Framework Agreement.

(b)      For so long as both Cosan and Shell are Shareholders, Cosan, its Affiliates and each JV Entity may only sell Ethanol outside of Brazil subject to compliance with the Global Ethanol Trading Agreement; provided that, (i) notwithstanding the foregoing, Cosan and its Affiliates may also purchase and sell ethanol (including Ethanol) in any country in which Cosan or such Affiliate has a fuels distribution business but only for the purpose of the sale of ethanol by, and in the course of, such distribution business and (ii) for the sake of clarity, Cosan and its Affiliates may also purchase and sell ethanol (but not Ethanol) in connection with trading operations, so long as such operations do not effect any purchases and sales of Ethanol.

(c)      Once Cosan or one of its Subsidiaries has commenced operations relating to the sale and trading of Sugar outside of Brazil, Cosan, Shell and the Sugar and Ethanol Co will hold good faith discussions regarding possible collaboration or business arrangements between such operations and the Sugar and Ethanol Co that will create value for both such parties.

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Section 8.03.Acquisitions.

(a)      To develop the Business, the Sugar and Ethanol Co will consider the acquisition of, or investment in, third party businesses or assets within the scope of the Business, whether directly, by way of joint venture or any other form of business combination (any such transaction, an “Acquisition”).

(b)      If any Shareholder or any of its Affiliates, or the Sugar and Ethanol Co, identifies any opportunity for an Acquisition, such Person shall refer the identified opportunity to the Executive Board of the Sugar and Ethanol Co for analysis before itself conducting any detailed analysis.

(c)      The Sugar and Ethanol Co shall not make or enter into any agreement to make any Acquisition without the prior approval of the Supervisory Board pursuant to Annex D or which would require any direct financing from Cosan and/or Shell; provided that, when considering any Acquisition, the Supervisory Board shall give due regard to whether the Acquisition would ii) be consistent with the policies of the Joint Venture then existent (including, for the avoidance of doubt, the Key Policies); iii) in the reasonable opinion of the Supervisory Board, meet the internal rate of return and other operational thresholds which may be specified by the Supervisory Board; and iv) would result in an increase to the leverage ratio beyond any limit specified by the Supervisory Board.

Section 8.04.  Permitted Acquisitions.  (a) A Shareholder will be permitted to make an Acquisition of a mill to be used for the production of Sugar and/or Ethanol outside Brazil if, at a meeting of the Supervisory Board, all three appointees of such Shareholder to the Supervisory Board voted in favour, and at least two of the other members of the Supervisory Board voted against, the Sugar and Ethanol Co making such Acquisition; provided that Shell Trading shall have the right, but not the obligation, to buy any ethanol and not only Ethanol produced by such mill at the price specified in Section 8.04(b).

(b)      Any ethanol required to be sold to Shell Trading pursuant to Section 8.04(a), shall be so sold as follows: where the delivery is to be made (i) outside of the country of production, such ethanol shall be sold subject to the rights of “first look” and “last look” of Shell Trading to purchase such ethanol in the manner contemplated by the Shell Trading Agreement, mutatis mutandis (or as may otherwise be agreed by both Shareholders, the Joint Venture and Shell Trading), (ii) within the country of production, the price shall be the most relevant local market price (consistent with the category of ethanol produced for sale) minus a discount of no less than one per cent. and no more than three per cent. minus the actual costs of freight and associated delivery costs.

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ARTICLE 9

Distribution and Dividend Policy; Goodwill; NOLs; Pledge of Dividends; Capital Contributions

Section 9.01.  Distributions and Dividend Policy.  Unless otherwise agreed by the Shareholders in accordance with the provisions of this Agreement and applicable law, the Shareholders shall ensure that the net profit registered in the fiscal year, computed after the deductions and adjustments provided for in the Brazilian Corporation Law, will be subject to the following allocation order:

first, five per cent (5%) of the net profit to the constitution of the legal reserve, until it reaches (x) twenty per cent (20%) of the capital stock or (y) thirty percent (30%) of the capital plus any capital surplus, and which will never exceed the lower amount of (x) and (y);

second, payment of dividends to the holders of the S&E B Shares, the amount of which will be variable and calculated in accordance with Section 9.02 and, if no such payment is due in accordance therewith, payment of fixed dividends to the holders of the S&E B Shares in an amount of BRL 0.01 (one centavo) only;

third, payment of fixed dividends to the holders of the preferred ‘A’ shares in an amount of BRL 0.01 (one centavo) only;

fourth, payment of a mandatory dividend of 1% of the net profits;

fifth, payment to the Sugar and Ethanol Co’s statutory reserve (reserva estatutária) for operations and projects, in an amount agreed by the holders of 80 per cent. of the voting shares of the Sugar and Ethanol Co; provided that in no event shall (a) such amount exceed 80% of net profits or (b) such statutory reserve exceed 80% of Sugar and Ethanol Co’s share capital; and

sixth, payment of the remaining amount as dividends to the holders of the common shares in accordance with any determination at the annual Shareholders’ Meeting (or as otherwise approved by the Shareholders);

provided that, in setting the payments of amounts under this Section 9.01, the Shareholders agree that v) the Sugar and Ethanol Co shall seek to maximize the amount of profits to be distributed to the Shareholders under this Section 9.01 and vi) the amount paid shall be consistent with the leverage ratio objectives and capital investment requirements of the Joint Venture as determined by the Supervisory Board.

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Further, the decision to make any distribution pursuant to this Section 9.01 in the form of either IOC or dividends shall be made by the Supervisory Board; provided that (a) the Supervisory Board will decide whether to distribute profits by way of IOC or by way of dividends; (b) the Supervisory Board shall determine the relative net Tax effects of paying IOC relative to dividends and shall select the option that is most beneficial for the Shareholders combined (including when taking into account any indirect Tax benefits to a shareholder by virtue of such Shareholder’s interest in the JV Entities) and (c) if paying distributions by way of IOC would result in one of the Shareholders receiving an amount, net of all actual Tax effects (including when taking into account any indirect Tax benefit by virtue of a Shareholder’s interest in the JV Entities), lower than that which it would have received had such distributions been paid as dividends, the other Shareholder shall make such payments to the first such Shareholder as necessary to ensure that such first Shareholder receives, net of actual Tax effects, an amount in cash per share no less than it would have received had such distributions been paid as dividends.

Section 9.02.  Goodwill and NOL.

(a)      The Parties acknowledge that, as a result of the contributions to the Joint Venture made by or caused to be made by Cosan, certain Subsidiaries of the Sugar and Ethanol Co may be able to reduce their liability for CIT after the Closing Date due to amortization of Cosan Goodwill and from the use of Cosan Pre-Closing NOLs.

(b)      The amounts in BRL of Cosan Goodwill and Cosan Pre-Closing NOLs and the names of the corresponding Subsidiaries of the Sugar and Ethanol Co that may be eligible to utilize them, together with the anticipated approximate amounts of the Cosan Tax Savings, at the Closing Date, will be delivered in writing by Cosan to Shell within 20 Business Days after Closing.

(c)      For each CIT Year, the holders of the S&E B Shares shall be entitled to a Distribution equal in the aggregate to the Cosan Tax Savings of all Subsidiaries of the Sugar and Ethanol Co for such CIT Year.

(d)      If, as a result of an audit by a Governmental Authority or of direct action taken by a Subsidiary of the Sugar and Ethanol Co before the initiation of an audit by a Governmental Authority purporting to investigate the respective Tax matter, the figure in respect of the CIT Taxable Base or NOL of any Subsidiary of the Sugar and Ethanol Co is different from the figure previously used in respect thereof to calculate the Cosan Tax Savings for the same CIT Year such that the actual Cosan Tax Savings are: (i) greater than the amount in respect of which prior Distributions have been made for the same CIT Year, then the holders of the S&E B Shares shall be entitled to an additional Distribution equal to such

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excess, which shall be paid in accordance with paragraph (g); or (ii) less than the amount in respect of which prior Distributions have been made for the same CIT Year, then the holders of the S&E B Shares that received the excess amount pursuant to this Section 9.02 shall repay that amount (plus, solely if the amendment directly relates to the Cosan Goodwill or to the Cosan Pre-Closing NOL (and not to other items of the CIT Taxable Base or NOL), any penalties, adjustments, costs and expenses incurred as a result of the related unpaid CIT or the repayment under this paragraph (ii)) to the Sugar and Ethanol Co so as to put the Sugar and Ethanol Co in the same after-Tax cash position as if there had been made no excess Distributions and no corresponding adjustments in the CIT Taxable Base or NOL; and in the case of (i) and (ii), any payments due to, or from, the Sugar and Ethanol Co shall be made as a single payment in BRL within 30 days of the date on which the revised figure for the actual Cosan Tax Savings is finally determined (X) by means of a judicial decision, arbitral award or binding order of a Governmental Authority with competent jurisdiction (in each case without possibility of appeal or where the time for appeal has expired), or (Y) directly by a Subsidiary of the Sugar and Ethanol Co before the initiation of an audit by a Governmental Authority purporting to investigate the respective Tax matter.

(e)      Notwithstanding the other provisions of this Section 9.02, the Distributions provided by paragraphs (c) and (d) for any CIT Year shall be reduced (but not below zero, except as contemplated in this Section 9.02) to the extent necessary so that, on a cumulative basis with respect to all CIT Years from the Closing Date through the end of such CIT Year, the aggregate Distributions with respect to the S&E B Shares for all such CIT Years do not exceed the single Distribution with respect to the S&E B Shares that would be determined under paragraphs (c) and (d) if all such CIT Years were treated as a single CIT Year.

(f)      If the reductions required pursuant to paragraph (e) exceed the amount of any Distribution otherwise due to holders of S&E B Shares: (i) such excess amount shall be applied in the calculation of Distributions in any subsequent CIT Years to reduce any Distributions otherwise then due to holders of S&E B Shares; and (ii) upon the termination of the Joint Venture, the holders of S&E B Shares at the time of such termination, shall promptly pay any remaining excess amount (after applying the provisions of paragraph (f)(i) above) to the Sugar and Ethanol Co (or to any successor in law) so as to put the Sugar and Ethanol Co (or any successor in law) in the same after-Tax cash position as if there had been no excess Distributions and no corresponding adjustments in the CIT Taxable Base or NOL; provided that any such remaining excess amount shall first be applied to offset amounts, if any, owed to such holders of S&E B Shares by the Sugar and Ethanol Co.

(g)      Each Distribution provided for under this Section 9.02 shall be: (i) unless otherwise specified, paid as a single payment in BRL and made within 20 Business Days of the statutory deadline for filing the CIT Tax Return with respect to that CIT Year for the Sugar and Ethanol Co and its Subsidiaries; and (ii) payable as dividends in respect of the S&E B Shares.

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(h)      The Sugar and Ethanol Co shall maintain: (i) management accounts in a form sufficient for the purposes of determining the amounts of any Distributions in any CIT Year; and (ii) records of the amounts of any Distributions paid with respect to any CIT Year to the holders of S&E B Shares.

(i)      For the CIT Year in which any final amortization or deductions on account of Cosan Goodwill, Cosan Goodwill NOL and Cosan Pre-Closing NOL are realized or are to be realized, the Cosan Tax Savings provided under Section 9.02(c) in respect of such CIT Year shall be paid to the holders of the S&E B Shares in full redemption of the outstanding S&E B Shares (to the extent such Cosan Tax Savings have not previously been paid as Distributions).

(j)      If in any fiscal year the S&E B Shares are to acquire voting rights in view of the provisions of Paragraph First of Article 111 of the Brazilian Corporation Law, Cosan and Shell shall initiate good faith discussions to agree on the most expedient and cost-effective solution for all Parties to maintain at all times the same economic rights, equity interests and voting interests as if the S&E B Shares had not acquired voting rights.  The holders of the S&E B Shares shall refrain from exercising any voting rights acquired by the S&E B Shares until a solution is agreed and implemented by the Shareholders.

Section 9.03.  Fiscal and Accounting Year.  The Parties and the Sugar and Ethanol Co shall use reasonable efforts to ensure that the fiscal and accounting year (exercicio social) of the Sugar and Ethanol Co shall commence by January 1, 2012 and, in any event, shall ensure that this is the case from January 1, 2013 if approved by a majority of the Supervisory Board.  In the event that any fiscal and accounting year of the Sugar and Ethanol Co does not commence on January 1st, the Sugar and Ethanol Co undertakes to hire the External Auditors to perform an additional audit in relation to its accounts for each financial year from (a) the date hereof to December 31st of this year and (b) from January 1st to December 31st in each subsequent year, in each case, within a scope to be determined by Shell (acting reasonably).

Section 9.04.  Agreed Capital Contributions.

(a)      If:

(i)       Cosan and Shell agree that the Sugar and Ethanol Co requires further equity capital;

(ii)      either Cosan or Shell, together with a majority of the Executive Board, reasonably determines that it is likely that the Sugar and Ethanol Co will default on any of its material debt obligations and/or become unable to pay its debts as they fall due or is otherwise determined to be insolvent, in each case, within 90 days, and therefore requires further equity capital; or

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(iii)     after completion of the Shell Partial Call Option, but before any completion of the Cosan Partial Call Option (in each case, as defined in the Joint Venture Agreement), the Supervisory Board determines that the Sugar and Ethanol Co requires further equity capital based on the then current Business Plan or due to any unforeseen capital requirement (including a potential default or insolvency event within 90 days) that may arise after the preparation of such Business Plan (in this latter case, as determined by the Supervisory Board);

then the Sugar and Ethanol Co shall immediately serve notice on Cosan and Shell requiring a capital contribution, by way of subscription for common shares by Cosan and Shell in equal proportions, in an amount, in the case of the scenario contemplated in paragraph (i) above, as agreed between Cosan and Shell, in the case of the scenario contemplated in paragraph (ii) above, the minimum amount that such parties agree would be reasonably necessary to ensure that the Sugar and Ethanol Co remains solvent for the following 12 month period or, in the case of the scenario contemplated in paragraph (iii) above, pro rata between Cosan and Shell in accordance with their holdings of common shares in the Sugar and Ethanol Co at such time and in the manner contemplated by Section 9.04(d).

(b)      In the circumstances contemplated by paragraphs (i) or (ii) of Section 9.04(a), if either Cosan or Shell (the “Non-Participating Party”) does not, within 20 Business Days of the capital call (the “Deadline”), confirm in writing it will make such a contribution in full or confirms that it will make a contribution in part, the other (the “Participating Party”) will be entitled to subscribe for additional shares equal in value to the amount of the Non-Participating Party’s shortfall.  Within 30 days of the lapse of the Deadline, the Non-Participating Party will only be entitled to: (i) vote the JV Securities then Beneficially Owned by it at any Shareholders’ Meeting with respect to those matters set forth in Part 2 of Annex B (and the Participating Party shall otherwise be entitled to vote all of the JV Securities then Beneficially Owned by the Non-Participating Party at any Shareholders’ Meeting with respect to all other matters); and (ii) have its remaining nominees on the Supervisory Board vote on those matters set forth in Part 4 of Annex D (and those nominees shall not be entitled to vote on any other matters whatsoever).  The chairperson of the relevant Shareholders’ Meeting shall refrain from counting any vote exercised in violation of this Section 5.01(d). Further, in such event, the Non-Participating Party shall remove, and the Participating Party shall replace, one of the individuals appointed by the Non-Participating Party from his or her position pursuant to Section 5.01(b).  For the purposes of determining the price of any capital contribution, the Sugar and Ethanol Co shall be valued on a fair market value basis based on its Base Value (as defined in the Joint Venture Agreement) utilizing the procedures and terms and conditions set forth and referred to in clause 18 (Valuation and Base Value) of the Joint Venture Agreement; provided that, if the funds to be provided from a capital call are required more urgently than within the period it would take for such a valuation to be completed, funds may be paid on account by way of a loan by the Shareholder to the Sugar and Ethanol Co convertible into shares upon completion of such valuation.

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(c)      If, prior to the expiry of a period of six months from the Deadline, the Non-Participating Party is willing and able to purchase shares in the Sugar and Ethanol Co in an amount equal to its shortfall in respect of the original capital contribution call, then, within 30 days of written notice to the Participating Party and the Sugar and Ethanol Co, it shall buy from the Participating Party, and the Participating Party shall sell to the Non-Participating Party, such common shares as necessary to return Cosan and Shell to the state of being equal shareholders, at a price that is based on the Base Value (as defined in the Joint Venture Agreement) at the price paid by the Participating Party when the capital call was originally made (together with interest accruing at the Default Interest Rate from the date of the original capital call to the date of payment).  Upon and after payment in respect of such share purchase within the specified six-month period, the governance rights of Cosan and Shell shall return to the status quo ante that pertained prior to such capital contribution obligation.

(d)      In the circumstances contemplated by paragraph (iii) of Section 9.04(a):

(i)      the Sugar and Ethanol Co shall give Cosan notice of any proposed issuance by the Sugar and Ethanol Co of any JV Securities (together with its material terms and conditions and intended use of proceeds) at least 20 Business Days prior to the proposed issuance date;

(ii)      Cosan shall be entitled to purchase up to its pro rata share of the JV Securities proposed to be issued based on its then current percentage ownership of the outstanding common shares of the Sugar and Ethanol Co; and

(iii)                 for the purposes of determining the price of any capital contribution, the Sugar and Ethanol Co shall be valued on a fair market value basis.

Section 9.05.  Capital Redemptions.  Unless otherwise required by applicable law, the Sugar and Ethanol Co shall only effect the redemption of its share capital in accordance with the provisions of Section 9.02, a Transaction Document or if otherwise agreed in writing by the Shareholders.

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ARTICLE 10

Board Members’ Indemnity and Insurance

Section 10.01.  Board Members’ Insurance.  The Sugar and Ethanol Co shall purchase, and maintain at the Sugar and Ethanol Co’s own cost, directors’ and officers’ liability insurance in favour of the former and current members of the Supervisory Board and the Executive Board of the Sugar and Ethanol Co on terms and conditions customary for the industry in which the Sugar and Ethanol Co operates but, in any event, with an indemnity limit of no less than US$10 million and otherwise in an amount determined by the Supervisory Board.

Section 10.02.  Board Members’ Indemnity.  The Sugar and Ethanol Co shall indemnify each member of the Supervisory Board and the Executive Board to the maximum extent permissible by applicable law against all losses and liabilities incurred by him in connection with the execution and discharge of the duties of his office including any loss and liability incurred by him as a former or current director or other officer of the Sugar and Ethanol Co in defending any claim or proceedings (whether civil or criminal) in which judgment is given in his favour or in which he is acquitted or in connection with any application under applicable law in which relief is given to him by the court.

ARTICLE 11

Miscellaneous

Section 11.01.  Binding Effect; Assignability; Benefit.  q) This Agreement shall inure to the benefit of and be binding upon the Parties and their respective heirs, successors, legal representatives and permitted assigns.  Any Shareholder that ceases to Beneficially Own at least one JV Security shall cease to be bound by the terms hereof (other than the provisions of Sections 7.08 through 7.11, Section 11.02, Section 11.03, Section 11.04, Section 11.06, Section 11.07 and Section 11.08).

(a)      Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by any Party pursuant to any Transfer of JV Securities or otherwise, except that: i) any Permitted Transferee acquiring JV Securities or a Person acquiring JV Securities from any Shareholder in a Transfer; ii) any Person acquiring JV Securities from any Shareholder in a Transfer in compliance with the Joint Venture Agreement; and iii) any Person who acquires all or substantially all of the JV Securities of either Shell or Cosan in a Transfer in compliance with the Joint Venture Agreement, shall, in each case,execute and deliver to the Sugar and Ethanol Co an agreement to be bound by this Agreement in the form of Annex H hereto and shall thenceforth be a “Shareholder” and either (in the case of a direct or indirect purchase of the Cosan Interest (as defined in the Joint Venture Agreement) “Cosan” or (in the case of a direct or indirect purchase of the Shell Interest (as defined in the Joint Venture Agreement) “Shell” for all purposes under this Agreement.

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(b)      Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the Parties, and their respective heirs, successors, legal representatives and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

Section 11.02.  Confidentiality.

(a)      Each Party agrees that it shall, and shall cause any Person to whom Confidential Information is disclosed pursuant to paragraph (i) below to, hold strictly confidential all Confidential Information and treat all Confidential Information with the same degree of care and confidentiality that it affords its own trade secrets and proprietary information.  Each Party agrees to use Confidential Information received from any JV Entity only in connection with its investment in the Joint Venture and the transactions contemplated by the Transaction Documents, and for no other purpose, except as otherwise expressly permitted by the Transaction Documents or agreed between Cosan and Shell and the relevant JV Entity.  Each Party agrees that it shall be responsible for any breach of the provisions of this Section 11.02 by any of its Representatives to whom it discloses Confidential Information.  No Party shall disclose any Confidential Information to any Person, except: (i) to its own Representatives in the normal course of the performance of their duties; (ii) to the extent required by applicable law (including complying with any oral or written questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process to which a Party is subject; provided that, unless otherwise prohibited by law, such Party shall give the relevant JV Entity prompt notice of such request(s), to the extent practicable, so that such JV Entity may seek an appropriate protective order or similar relief (and the Party shall cooperate with such efforts by such JV Entity, and shall in any event make only the minimum disclosure required by such law); (iii) to any Person to whom such Party is contemplating a Transfer (as defined in the Joint Venture Agreement) of any JV Securities in compliance with the requirements of the Joint Venture Agreement; (iv) to the extent required to comply with the rules and regulations of any regulatory authority to whose jurisdiction such Party or any of its Affiliates is subject (which may include the U.S. Securities and Exchange Commission, the Brazilian Comissão de Valores Mobiliários, the UK’s Financial Services Authority or the UK Listing Authority, the Netherlands’ Autoriteit Financiële Markten or any stock exchange); (v) as five of the six members of the Supervisory Board of the relevant JV Entity agree; provided that such Party shall give the relevant JV Entity and the other Parties advance notice in writing of any such disclosure; or (vi) in accordance with any other Transaction Document.

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(b)      The provisions of this Section 11.02 shall survive termination of this Agreement, but shall expire with respect to a Party on the second anniversary of the date on which such Party ceases to Beneficially Own at least one JV Security; provided, however, that: (i) with respect to any competitively sensitive information, the provisions of this Section 11.02 shall survive indefinitely; and (ii) with respect to any information in relation to Iogen Energy and Codexis, the provisions of this Section 11.02 shall survive for a period of two years following the date on which the last of the disclosing Party or JV Entity and any of its Affiliates ceases to be a shareholder in Iogen Energy or Codexis, respectively.

Section 11.03.  Notices.  Any communication to be made under or in connection with this Agreement shall be made in the Portuguese and English languages (provided that the Portuguese version shall prevail in the event of conflict), in writing and, unless otherwise stated, may be made by fax via courier service. The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with this Agreement is identified with its name below. Any Party may substitute such address, fax number or department or officer by notifying the other Parties with not less than five days’ notice.  Any communication or document made or delivered by one person to another under or in connection with this Agreement will only be effective: (a) if by way of fax, when received in legible form; (b) if by way of courier service, when the courier service has recorded successful delivery at that address; and (c) if a particular department or officer is specified as part of its address details below, if addressed to that department or officer.

Sugar and Ethanol Co:

Raízen Energia Participações S.A.

Avenida Presidente Juscelino Kubitschek 1327, 6º andar, sala 01,
CEP: 04543-011 – São Paulo/SP

Attention: President

Fax:  +55 (11) 23446222

Cosan:

Cosan S.A. Indústria e Comércio

Fazenda Pau D’Alho, s/nº

Barra Bonita – SP

CEP 17340-000

Brazil

Attention: General Counsel and Chief Financial Officer

Fax: +55 (11) 3897 97 99

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Copy to:

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, New York  10017

Attention: John Amorosi; Manuel Garciadiaz

Fax:  +1 (212) 701-5800

Barbosa Mussnich & Aragão

Av. Presidente Juscelino Kubitschek, 1.455 - 10º andar

Cep: 04543-011 - Itaim Bibi

Attention: Paulo Cezar Aragão; Daniela Soares

Fax: +55 (11) 2179-4597

Shell:

Ispagnac Participações Ltda.

Avenida das Américas, No. 4200, Bloc 6

1st floor, Barra da Tijuca, ZIP CODE 22640-102,

City of Rio de Janeiro, State of Rio de Janeiro,

Attention: President

Fax: +55 (21) 39847212

Copy to:

Clifford Chance

Rua Funchal, 418, 15º andar

04551-060 São Paulo, SP

Attention: Anthony Oldfield

Fax: +55 (11) 3049 3198

Souza, Cescon, Barrieu & Flesch Advogados

Rua Funchal, 418, 11º andar

04551-060 São Paulo, SP

Attention: Marcos Flesch

Fax: +55 (11) 3089-6565

Any Person that becomes a Shareholder shall provide its address and fax number to the Sugar and Ethanol Co, which shall promptly provide that information to each other Shareholder.

Section 11.04.  Waiver; Amendment; Termination.  No provision of this Agreement may be amended, waived or otherwise modified, except by an instrument in writing executed by the Sugar and Ethanol Co with approval of the Supervisory Board and each Shareholder that is a Party at the time of that proposed amendment or modification.  In addition, any Party may waive any provision of this Agreement with respect to itself by an instrument in writing executed by the Party against whom the waiver is to be effective.

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Section 11.05.  Fees and Expenses.  All costs and expenses incurred in connection with the preparation of this Agreement and the other Transaction Documents, or any amendment or waiver hereof, and the transactions contemplated hereby shall be paid by the Party incurring such costs or expenses.

Section 11.06.  Governing Language.  This Agreement is drawn up in the Portuguese and English languages. If this Agreement is translated into another language, or if there is a conflict between the Portuguese and English versions, the Portuguese language text prevails.

Section 11.07.  Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the Federative Republic of Brazil, without regard to the Laws of any other jurisdiction that might be applied because of the conflicts of Laws principles of the Federative Republic of Brazil.

Section 11.08.  Arbitration.

(a)      Any dispute (a “Dispute”) arising from or connected with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement or the consequences of its nullity), will be referred to and finally resolved by arbitration under the Arbitration Rules of the ICC (the “Rules”), which Rules are deemed to be incorporated by reference into this Section 11.08.

(b)      The tribunal will consist of three arbitrators two of whom will be nominated by the respective parties, and the third, who shall act as chairperson, shall be a national of a member state of the Organisation for Economic Co-operation and Development (except the United States of America, England or the Netherlands) and nominated by the other two arbitrators together (but failing agreement within 30 days of the appointment of the second arbitrator, the third arbitrator shall be appointed by the ICC). The seat of the arbitration will be São Paulo, Brazil, and the language of the arbitration will be English.

(c)      The Parties agree that the arbitral tribunal will have power to award on a provisional basis any relief that it would have power to grant on a final award.

(d)      Without prejudice to the powers of the arbitrator provided by the Rules, statute or otherwise, the arbitrator will have power at any time, on the basis of written evidence and the submissions of the Parties alone, to make an award in favour of the claimant (or the respondent if a counterclaim) in respect of any claims (or counterclaims) to which there is no reasonably arguable defence, either at all or except as to the amount of any damages or other sum to be awarded.

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(e)      The Parties agree to keep confidential all materials used in and all awards received as a result of any Dispute proceedings, except to the extent required to be disclosed by applicable law.

(f)      The Parties exclude any rights to refer points of law or to appeal to the courts, to the extent that they can validly waive these rights.

Section 11.09.  Specific Enforcement.  Each of the Parties acknowledges that the remedies at law of the other Parties for a breach or threatened breach of this Agreement would be inadequate and, in recognition of this fact, any Party to this Agreement, without posting any bond, and in addition to all other remedies that may be available, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy that may then be available.

Section 11.10.  Fraud.  Nothing in this Agreement shall have the effect of limiting or restricting any liability arising as a result of any fraud.

Section 11.11.  Counterparts.  This Agreement may be executed in any number of counterparts, each of which is an original and all of which together evidence the same agreement.  This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other Parties.  Until and unless each Party has received a counterpart hereof signed by each other Party, this Agreement shall have no effect and no Party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).

Section 11.12.  Entire Agreement.  This Agreement and the other Transaction Documents constitute the entire agreement and supersede any previous agreement between the Parties relating to the subject matter of this Agreement (including the memorandum of understanding between Cosan, Cosan Limited and Shell International Petroleum Company Limited dated 31 January 2010 (the “MOU”).

Section 11.13.  Severability.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.  If any provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid or unenforceable, a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and  the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.

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Section 11.14.  Term; Termination.  The Shareholders hereby agree that this Agreement shall remain in full force and effect for a period that is the longer of (a) twenty years counted from the date hereof and (b) the period during which each of Cosan and Shell own, directly or indirectly, 40 per cent. of the voting capital of the Sugar and Ethanol Co (the “Term”); provided that Section 7.08 through 7.11 shall survive indefinitely. Further, except with respect to previously accrued rights and obligations, this Agreement shall terminate and be of no further effect with respect to any Shareholder when it ceases to be the Beneficial Owner of any JV Securities, except for Sections 7.08 through 7.11 and Article 9.

Section 11.15.  Records.  For the purposes of Article 118 and its paragraphs of the Brazilian Corporation Law, the Shareholders hereby agree that an executed copy of this Agreement shall be kept at the headquarters of the Sugar and Ethanol Co.  This Agreement shall be enforced against third parties and the Sugar and Ethanol Co itself upon registration of this latter in the Sugar and Ethanol Co’s headquarters.

Section 11.16.  Legends.  Promptly after the execution of this Agreement and as long as it remains in effect, the Shareholders and the Sugar and Ethanol Co shall cause the register of nominative shares related to the JV Securities to bear a legend as follows:

“All of the [  ] shares owned by this Shareholder, including any Transfer (as defined in the Shareholders’ Agreement) of any such shares, are bound by and subject to the provisions of (i) the Shareholders’ Agreement filed at Raízen Energia Participações S.A.’s headquarters and (ii) the Joint Venture Agreement, which provides for certain lock-up provisions, call options, put options and rights of first refusal, an extract of which is filed at the Sugar and Ethanol Co’s headquarters, dated as of […].”

Section 11.17.  Intervening Party.  The Sugar and Ethanol Co is intervening party to this Agreement and shall (a) observe, enforce and be bound by its provisions (including the arbitration provisions set forth in Section 11.08, in accordance with any applicable laws (including the Brazilian Corporation Law), and (b) refrain from registering, enforcing or acting in any other manner whatsoever in connection with any actions or omissions in breach of this Agreement or any applicable laws (including the Brazilian Corporation Law).

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Section 11.18.  Legal Representative.  Shell appoints Silvio Costa Rodrigues Neto, a citizen of Brazil, married, lawyer, registered with the OAB of Rio de Janeiro under no. 39902, with IFP no. 3811235, CPF no. 628964827-68 and with an office at Avenida das Américas, 4200, Bloco 5, 6º andar, Barra da Tijuca, Rio de Janeiro – RJ, CEP 22640-102, Brazil, and Cosan appoints Marcelo de Souza Scarcela Portela, a citizen of Brazil, married, lawyer, registered with the OAB of São Paulo under no. 75.709, with ID card no. RG/SSP/SP 6.762.668, CPF no. 023.502.188-13 and with an office at Avenida Presidente Juscelino Kubitschek, 1327, 4 º andar, São Paulo – SP, CEP 04543-011, Brazil, as representatives before the Sugar and Ethanol Co for the purposes of §10 of article 118 of Brazilian Corporation Law.

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

SUGAR AND ETHANOL CO
Executed by
RAÍZEN ENERGIA PARTICIPAÇÕES S.A.	)
as an intervening and consenting party	)
by	) /s/ Pedro Isamu Mizutani
	Name: Pedro Isamu Mizutani
	Title:
and by	)
	) /s/ Marcelo Eduardo Martins
	)
	Name: Marcelo Eduardo Martins
	Title:
WITNESS 1:
/s/ Deborah Christina Giacomini
Name: Deborah Christina Giacomini
Title:
WITNESS 2:
/s/ Nathalia Cayres Cipelli
Name: Nathalia Cayres Cipelli
Title:

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COSAN
Executed by
COSAN S.A. INDÚSTRIA	)
E COMÉRCIO	)/s/ Marcos Marinho Lutz
by	)
	Name: Marcos Marinho Lutz
	Title:
and by	)
	)/s/ Marcelo Eduardo Martins
	)
	Name: Marcelo Eduardo Martins
	Title:
WITNESS 1:
/s/ Deborah Christina Giacomini
Name: Deborah Christina Giacomini
Title:
WITNESS 2:
/s/ Nathalia Cayres Cipelli
Name: Nathalia Cayres Cipelli
Title:

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SHELL
Executed by
Ispagnac Participações Ltda.	)
by	) /s/ Matias de Oliveira Lopes
	Name: Matias de Oliveira Lopes
	Title: Officer
and by	)
	)
	)
	Name:
	Title:
WITNESS 1:
/s/ Deborah Christina Giacomini
Name: Deborah Christina Giacomini
Title:
WITNESS 2:
/s/ Nathalia Cayres Cipelli
Name: Nathalia Cayres Cipelli
Title:

56

SHELL BV
Executed by
ISPAGNAC PARTICIPAÇÕES LTDA.	)
by	)/s/ Matias de Oliveira Lopes
	Name: Matias de Oliveira Lopes
	Title: Officer
and by	)
	)
	)
	Name:
	Title:
WITNESS 1:
/s/ Deborah Christina Giacomini
Name: Deborah Christina Giacomini
Title:
WITNESS 2:
/s/ Nathalia Cayres Cipelli
Name: Nathalia Cayres Cipelli
Title:

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EX-8.1

EXHIBIT 8.1

SUBSIDIARIES OF THE REGISTRANT

Name	Jurisdiction of Incorporation
Cosan S.A. Indústria e Comércio	Brazil
Cosan Operadora Portuária S.A.	Brazil
Administração de Participações Aguassanta Ltda.	Brazil
Agrícola Ponte Alta S.A.	Brazil
Cosan Distribuidora de Combustíveis Ltda.	Brazil
Cosan S.A. Bioenergia	Brazil
Barra Bioenergia S.A.	Brazil
Cosan International Universal Corporation	British Virgin Islands
Cosan Finance Limited	Cayman Islands
Da Barra Alimentos S.A.	Brazil
Docelar Alimentos Bebidas S.A. (former Bonfim Nova Tamoio – BNT Agrícola Ltda.)	Brazil
Cosan S.A. Açúcar e Álcool	Brazil
Cosan Centroeste S.A. Açúcar e Álcool	Brazil
Benálcool S.A. Açúcar e Álcool	Brazil
Vertical UK LLP	British Virgin Islands
Cosan Lubrificants e Especialidades S.A.	Brazil
Radar Propriedades Agrícolas S.A.	Brazil
Águas da Ponte Alta S.A.	Brazil
Vale da Ponta Alta S.A.	Brazil
Barrapar Participações S.A.	Brazil
Unimodal Ltda.	Brazil
Aliança Industria e Comercio de Açúcar e Álcool S.A.	Brazil
Bio Investments Negócios e Participações S.A.	Brazil
Agrobio Investimentos e Participações S.A.	Brazil
Proud Participações S.A.	Brazil
Executive Participações Ltda	Brazil
Iputi Empreendimentos e Participações Ltda	Brazil
Blueway Trading Importadora e Exportadora Ltda	Brazil

Name	Jurisdiction of Incorporation
CCL Finance Limited	Cayman Islands
Cosan Overseas Limited	Cayman Islands
Cosan Cayman Limited	Cayman Islands
Cosan Cayman Finance Limited	Cayman Islands
CCL Cayman Finance Limited	Cayman Islands
Cosan Alimentos S.A.	Brazil
Cosan Energia S.A.	Brazil
Copsapar Participações S.A.	Brazil
Novo Rumo Logística S.A.	Brazil
Rumo Logística S.A.	Brazil
Teaçu Armazéns Gerais S.A.	Brazil
Pasadena Empreendimentos e Participações S.A.	Brazil
TEAS Terminal Exportador de Álcool de Santos S.A.	Brazil
Cosan Biotecnologia Ltda	Brazil
Cosan Araraquara Açúcar e Álcool Ltda (former Usina Zanin Açúcar e Álcool Ltda)	Brazil
Logispot Armazéns Gerais S.A.	Brazil
Anniston Pte. Ltd	Singapore
Commonwealth Carriers S.A.	British Virgin Islands
Island S Management Corp	British Virgin Islands
Broeder Limited	British Virgin Islands

2

EX-12.1

EXHIBIT 12.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Rubens Ometto Silveira Mello, certify that:

1.     I have reviewed this annual report on Form 20 F of Cosan Limited;

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 company as of, and for, the periods presented in this report;

4.     The company’s other certifying officer(s) 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 company 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 company, 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 company’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 company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5.     The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’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 company’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 company’s internal control over financial reporting.

Date:       September 30, 2011

By:	/s/ Rubens Ometto Silveira Mello
	Name:	Rubens Ometto Silveira Mello
	Title:	Chief Executive Officer

EX-12.2

EXHIBIT 12.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Marcelo Eduardo Martins, certify that:

1.     I have reviewed this annual report on Form 20 F of Cosan Limited;

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 company as of, and for, the periods presented in this report;

4.     The company’s other certifying officer(s) 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)) for the company 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 company, 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 company’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 company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5.     The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’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 company’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 company’s internal control over financial reporting.

Date:       September 30, 2011

By:	/s/ Marcelo Eduardo Martins
	Name:	Marcelo Eduardo Martins
	Title:	Chief Financial and Investor Relations Officer

EX-13.1

EXHIBIT 13.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE U.S. SARBANES-OXLEY ACT OF 2002

The certification set forth below is being submitted in connection with the Annual report on Form 20-F for the fiscal year ended March 31, 2011 ( the “Report”) for the purposes of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities and Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

I, Rubens Ometto Silveira Mello, the Chief Executive Officer of Cosan Limited, certify that, to the best of my knowledge:

1.      the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.      the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:           September 30, 2011

By:	/s/ Rubens Ometto Silveira Mello
	Name:	Rubens Ometto Silveira Mello
	Title:	Chief Executive Officer

EX-13.2

EXHIBIT 13.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE U.S. SARBANES-OXLEY ACT OF 2002

The certification set forth below is being submitted in connection with the Annual report on Form 20-F for the fiscal year ended March 31, 2011 ( the “Report”) for the purposes of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities and Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

I, Marcelo Eduardo Martins, the Chief Financial and Investor Relations Officer of Cosan Limited, certify that, to the best of my knowledge:

1.      the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.      the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:          September 30, 2011

By:	/s/ Marcelo Eduardo Martins
	Name:	Marcelo Eduardo Martins
	Title:	Chief Financial and Investor Relations Officer