Document:

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                                                                    Exhibit 10.9

                            QUINTANA MARITIME LIMITED

                            2005 STOCK INCENTIVE PLAN

                                   I. PURPOSE

      The purpose of the QUINTANA MARITIME LIMITED 2005 STOCK INCENTIVE PLAN
(the "Plan") is to provide a means through which QUINTANA MARITIME LIMITED, a
Marshall Islands company (the "Company"), and its Affiliates may attract able
persons to serve as Directors or Consultants or to enter the employ of the
Company and its Affiliates and to provide a means whereby those individuals upon
whom the responsibilities of the successful administration and management of the
Company and its Affiliates rest, and whose present and potential contributions
to the Company and its Affiliates are of importance, can acquire and maintain
stock ownership, thereby strengthening their concern for the welfare of the
Company and its Affiliates. A further purpose of the Plan is to provide such
individuals with additional incentive and reward opportunities designed to
enhance the profitable growth of the Company and its Affiliates. Accordingly,
the Plan provides for granting Incentive Stock Options, options that do not
constitute Incentive Stock Options, Restricted Stock Awards, Performance Awards,
and Phantom Stock Awards, or any combination of the foregoing, as is best suited
to the circumstances of the particular employee, Consultant, or Director as
provided herein.

                                 II. DEFINITIONS

      The following definitions shall be applicable throughout the Plan unless
specifically modified by any paragraph:

      (a) "AFFILIATE" means any corporation, partnership, limited liability
company or partnership, association, trust or other organization which, directly
or indirectly, controls, is controlled by, or is under common control with, the
Company. For purposes of the preceding sentence, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any entity or organization, shall mean the
possession, directly or indirectly, of the power (i) to vote more than 50% of
the securities having ordinary voting power for the election of directors of the
controlled entity or organization, or (ii) to direct or cause the direction of
the management and policies of the controlled entity or organization, whether
through the ownership of voting securities or by contract or otherwise.

      (b)   "AWARD" means, individually or collectively, any Option,
Restricted Stock Award, Performance Award or Phantom Stock Award.

      (c)   "BOARD" means the Board of Directors of the Company.

      (d) "CODE" means the Internal Revenue Code of 1986, as amended. Reference
in the Plan to any section of the Code shall be deemed to include any amendments
or successor provisions to such section and any regulations under such section.

      (e) "COMMITTEE" means a committee of the Board that is selected by the
Board as provided in Paragraph IV(a).
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      (f) "COMMON STOCK" means the common stock, no par value, of the Company,
or any security into which such common stock may be changed by reason of any
transaction or event of the type described in Paragraph XI.

      (g)   "COMPANY" means Quintana Maritime Limited, a Marshall Islands
company.

      (h) "CONSULTANT" means any person who is not an employee or a Director and
who is providing advisory or consulting services to the Company or any
Affiliate. For purposes of clarity, the term "Consultant" shall include
non-employee executive officers of the Company.

      (i) "CORPORATE CHANGE" shall have the meaning assigned to such term in
Paragraph XI(c) of the Plan.

      (j)   "DIRECTOR" means an individual who is a member of the Board.

      (k) An "EMPLOYEE" means any person (including a Director) in an employment
relationship with the Company or any Affiliate.

      (l) "FAIR MARKET VALUE" means, as of any specified date, the mean of the
high and low sales prices of the Common Stock reported by (i) the National
Market System of NASDAQ on that date or (ii) if the Common Stock is listed on a
national stock exchange, reported on the stock exchange composite tape on that
date (or such other reporting service approved by the Committee); or, in either
case, if no prices are reported on that date, on the last preceding date on
which such prices of the Common Stock are so reported. If the Common Stock is
traded over the counter at the time a determination of its fair market value is
required to be made hereunder, its fair market value shall be deemed to be equal
to the average between the reported high and low or closing bid and asked prices
of Common Stock on the most recent date on which Common Stock was publicly
traded. In the event Common Stock is not publicly traded at the time a
determination of its value is required to be made hereunder, the determination
of its fair market value shall be made by the Committee in such manner as it
deems appropriate.

      (m)   "INCENTIVE STOCK OPTION" means an incentive stock option within
the meaning of section 422 of the Code

      (n)   "1934 ACT" means the Securities Exchange Act of 1934, as amended.

      (o) "OPTION" means an Award granted under Paragraph VII of the Plan and
includes both Incentive Stock Options to purchase Common Stock and Options that
do not constitute Incentive Stock Options to purchase Common Stock.

      (p) "OPTION AGREEMENT" means a written agreement between the Company and a
Participant with respect to an Option.

      (q)   "PARTICIPANT" means an employee, Consultant, or Director who has
been granted an Award.

      (r)   "PERFORMANCE AWARD" means an Award granted under Paragraph IX of
the Plan.

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      (s) "PERFORMANCE AWARD AGREEMENT" means a written agreement between the
Company and a Participant with respect to a Performance Award.

      (t) "PHANTOM STOCK AWARD" means an Award granted under Paragraph X of the
Plan.

      (u) "PHANTOM STOCK AWARD AGREEMENT" means a written agreement between the
Company and a Participant with respect to a Phantom Stock Award.

      (v) "PLAN" means the Quintana Maritime Limited 2005 Stock Incentive Plan,
as amended from time to time.

      (w) "RESTRICTED STOCK AGREEMENT" means a written agreement between the
Company and a Participant with respect to a Restricted Stock Award.

      (x) "RESTRICTED STOCK AWARD" means an Award granted under Paragraph VIII
of the Plan.

      (y) "RULE 16B-3" means SEC Rule 16b-3 promulgated under the 1934 Act, as
such may be amended from time to time, and any successor rule, regulation or
statute fulfilling the same or a similar function.

      (z) "STOCK APPRECIATION RIGHT" means a right to acquire, upon exercise of
the right, Common Stock and/or, in the sole discretion of the Committee, cash
having an aggregate value equal to the then excess of the Fair Market Value of
the shares with respect to which the right is exercised over the exercise price
therefor.

                 III. EFFECTIVE DATE AND DURATION OF THE PLAN

      The Plan shall become effective upon the date of its adoption by the
Board, provided the Plan is approved by the stockholders of the Company within
12 months thereafter. Notwithstanding any provision in the Plan, no Option shall
be exercisable, no Restricted Stock Award shall be granted, and no Performance
Award or Phantom Stock Award shall vest or become satisfiable prior to such
stockholder approval. No further Awards may be granted under the Plan after 10
years from the date the Plan is adopted by the Board. The Plan shall remain in
effect until all Options granted under the Plan have been exercised or expired,
all Restricted Stock Awards granted under the Plan have vested or been
forfeited, and all Performance Awards and Phantom Stock Awards have been
satisfied or expired.

                               IV. ADMINISTRATION

      (a) COMPOSITION OF COMMITTEE. The Plan shall be administered by a
committee of, and appointed by, the Board that shall be comprised solely of two
or more outside Directors (within the meaning of the term "outside directors" as
used in section 162(m) of the Code and applicable interpretive authority
thereunder and within the meaning of the term "Non-Employee Director" as defined
in Rule 16b-3).

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      (b) POWERS. Subject to the express provisions of the Plan, the Committee
shall have authority, in its discretion, to determine which employees,
Consultants or Directors shall receive an Award, the time or times when such
Award shall be made, the type of Award that shall be made, the number of shares
to be subject to each Option or Restricted Stock Award, the number of shares
subject to or the value of each Performance Award, and the value of each Phantom
Stock Award. In making such determinations, the Committee shall take into
account the nature of the services rendered by the respective employees,
Consultants, or Directors, their present and potential contribution to the
Company's success and such other factors as the Committee in its sole discretion
shall deem relevant.

      (c) ADDITIONAL POWERS. The Committee shall have such additional powers as
are delegated to it by the other provisions of the Plan. Subject to the express
provisions of the Plan, this shall include the power to construe the Plan and
the respective agreements executed hereunder, to prescribe rules and regulations
relating to the Plan, and to determine the terms, restrictions and provisions of
the agreement relating to each Award, including such terms, restrictions and
provisions as shall be requisite in the judgment of the Committee to cause
designated Options to qualify as Incentive Stock Options, and to make all other
determinations necessary or advisable for administering the Plan. The Committee
may correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any agreement relating to an Award in the manner and to the
extent it shall deem expedient to carry it into effect. The determinations of
the Committee on the matters referred to in this Paragraph IV shall be
conclusive.

                 V. SHARES SUBJECT TO THE PLAN; AWARD LIMITS;
                                     GRANT OF AWARDS

      (a) SHARES SUBJECT TO THE PLAN AND AWARD LIMITS. Subject to adjustment in
the same manner as provided in Paragraph XI with respect to shares of Common
Stock subject to Options then outstanding, the aggregate number of shares of
Common Stock that may be issued under the Plan, and the aggregate maximum number
of shares of Common Stock that may be issued under the Plan through Incentive
Stock Options, shall not exceed 3,000,000 shares. Shares shall be deemed to have
been issued under the Plan only to the extent actually issued and delivered
pursuant to an Award. To the extent that an Award lapses or the rights of its
holder terminate, any shares of Common Stock subject to such Award shall again
be available for the grant of an Award under the Plan. In addition, shares
issued under the Plan and forfeited back to the Plan, shares surrendered in
payment of the exercise price or purchase price of an Award, and shares withheld
for payment of applicable employment taxes and/or withholding obligations
associated with an Award shall again be available for the grant of an Award
under the Plan. Notwithstanding any provision in the Plan to the contrary, the
maximum number of shares of Common Stock that may be subject to Options,
Restricted Stock Awards and Performance Awards denominated in shares of Common
Stock granted to any one individual during the term of this Plan may not exceed
1,500,000 shares of Common Stock (subject to adjustment in the same manner as
provided in Paragraph XI with respect to shares of Common Stock subject to
Options then outstanding), and the maximum amount of compensation that may be
paid under all Performance Awards denominated in cash (including the Fair Market
Value of any shares of Common Stock paid in satisfaction of such Performance
Awards) granted to any one individual during any calendar year may not exceed
$2,000,000, and any payment due with respect to a

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Performance Award shall be paid no later than 10 years after the date of grant
of such Performance Award. The limitations set forth in the preceding sentence
shall be applied in a manner that will permit compensation generated under the
Plan to constitute "performance-based" compensation for purposes of section
162(m) of the Code, including, without limitation, counting against such maximum
number of shares, to the extent required under section 162(m) of the Code and
applicable interpretive authority thereunder, any shares subject to Options that
are canceled or repriced.

      (b) GRANT OF AWARDS. The Committee may from time to time grant Awards to
one or more employees, Consultants, or Directors determined by it to be eligible
for participation in the Plan in accordance with the terms of the Plan.

      (c) STOCK OFFERED. Subject to the limitations set forth in Paragraph V(a),
the stock to be offered pursuant to the grant of an Award may be authorized but
unissued Common Stock or Common Stock previously issued and outstanding and
reacquired by the Company. Any of such shares which remain unissued and which
are not subject to outstanding Awards at the termination of the Plan shall cease
to be subject to the Plan but, until termination of the Plan, the Company shall
at all times make available a sufficient number of shares to meet the
requirements of the Plan.

                                 VI. ELIGIBILITY

      Awards may be granted only to persons who, at the time of grant, are
employees, Consultants, or Directors. An Award may be granted on more than one
occasion to the same person, and, subject to the limitations set forth in the
Plan, such Award may include an Incentive Stock Option, an Option that is not an
Incentive Stock Option, a Restricted Stock Award, a Performance Award, a Phantom
Stock Award, or any combination thereof.

                               VII. STOCK OPTIONS

      (a) OPTION PERIOD. The term of each Option shall be as specified by the
Committee at the date of grant, but in no event shall an Option be exercisable
after the expiration of 10 years from the date of grant.

      (b) LIMITATIONS ON EXERCISE OF OPTION. An Option shall be exercisable in
whole or in such installments and at such times as determined by the Committee.

      (c) SPECIAL LIMITATIONS ON INCENTIVE STOCK OPTIONS. An Incentive Stock
Option may be granted only to an individual who is employed by the Company or
any parent or subsidiary corporation (as defined in section 424 of the Code) at
the time the Option is granted. To the extent that the aggregate fair market
value (determined at the time the respective Incentive Stock Option is granted)
of stock with respect to which Incentive Stock Options are exercisable for the
first time by an individual during any calendar year under all incentive stock
option plans of the Company and its parent and subsidiary corporations exceeds
$100,000, such Incentive Stock Options shall be treated as Options which do not
constitute Incentive Stock Options. The Committee shall determine, in accordance
with applicable provisions of the Code, Treasury Regulations and other
administrative pronouncements, which of a Participant's Incentive Stock Options
will not constitute Incentive Stock Options because of such limitation

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and shall notify the Participant of such determination as soon as practicable
after such determination. No Incentive Stock Option shall be granted to an
individual if, at the time the Option is granted, such individual owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or of its parent or subsidiary corporation, within the
meaning of section 422(b)(6) of the Code, unless (i) at the time such Option is
granted the option price is at least 110% of the Fair Market Value of the Common
Stock subject to the Option and (ii) such Option by its terms is not exercisable
after the expiration of five years from the date of grant. An Incentive Stock
Option shall not be transferable otherwise than by will or the laws of descent
and distribution, and shall be exercisable during the Participant's lifetime
only by such Participant or the Participant's guardian or legal representative.

      (d) OPTION AGREEMENT. Each Option shall be evidenced by an Option
Agreement in such form and containing such provisions not inconsistent with the
provisions of the Plan as the Committee from time to time shall approve,
including, without limitation, provisions to qualify an Incentive Stock Option
under section 422 of the Code. Each Option Agreement shall specify the effect of
termination of (i) employment, (ii) the consulting or advisory relationship, or
(iii) membership on the Board, as applicable, on the exercisability of the
Option. An Option Agreement may provide for the payment of the option price, in
whole or in part, by the delivery of a number of shares of Common Stock (plus
cash if necessary) having a Fair Market Value equal to such option price.
Moreover, an Option Agreement may provide for a "cashless exercise" of the
Option by establishing procedures satisfactory to the Committee with respect
thereto. Further, an Option Agreement may provide, on such terms and conditions
as the Committee in its sole discretion may prescribe, for the grant of a Stock
Appreciation Right in connection with the grant of an Option and, in such case,
the exercise of the Stock Appreciation Right shall result in the surrender of
the right to purchase a number of shares under the Option equal to the number of
shares with respect to which the Stock Appreciation Right is exercised (and vice
versa). In the case of any Stock Appreciation Right that is granted in
connection with an Incentive Stock Option, such right shall be exercisable only
when the Fair Market Value of the Common Stock exceeds the price specified
therefor in the Option or the portion thereof to be surrendered. The terms and
conditions of the respective Option Agreements need not be identical. Subject to
the consent of the Participant, the Committee may, in its sole discretion, amend
an outstanding Option Agreement from time to time in any manner that is not
inconsistent with the provisions of the Plan (including, without limitation, an
amendment that accelerates the time at which the Option, or a portion thereof,
may be exercisable).

      (e) OPTION PRICE AND PAYMENT. The price at which a share of Common Stock
may be purchased upon exercise of an Option shall be determined by the Committee
but, subject to adjustment as provided in Paragraph XI, such purchase price
shall not be less than the Fair Market Value of a share of Common Stock on the
date such Option is granted. The Option or portion thereof may be exercised by
delivery of an irrevocable notice of exercise to the Company, as specified by
the Committee. The purchase price of the Option or portion thereof shall be paid
in full in the manner prescribed by the Committee. Separate stock certificates
shall be issued by the Company for those shares acquired pursuant to the
exercise of an Incentive Stock Option and for those shares acquired pursuant to
the exercise of any Option that does not constitute an Incentive Stock Option.

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      (f) RESTRICTIONS ON REPRICING OF OPTIONS. Except as provided in Paragraph
XI, the Committee may not, without approval of the stockholders of the Company,
amend any outstanding Option Agreement to lower the option price (or cancel and
replace any outstanding Option Agreement with Option Agreements having a lower
option price).

      (g) STOCKHOLDER RIGHTS AND PRIVILEGES. The Participant shall be entitled
to all the privileges and rights of a stockholder only with respect to such
shares of Common Stock as have been purchased under the Option and for which
certificates of stock have been registered in the Participant's name.

      (h) OPTIONS AND RIGHTS IN SUBSTITUTION FOR OPTIONS GRANTED BY OTHER
EMPLOYERS. Options and Stock Appreciation Rights may be granted under the Plan
from time to time in substitution for options and such rights held by
individuals providing services to corporations or other entities who become
employees, Consultants, or Directors as a result of a merger or consolidation or
other business transaction with the Company or any Affiliate.

                          VIII. RESTRICTED STOCK AWARDS

      (a) FORFEITURE RESTRICTIONS TO BE ESTABLISHED BY THE COMMITTEE. Shares of
Common Stock that are the subject of a Restricted Stock Award shall be subject
to restrictions on disposition by the Participant and an obligation of the
Participant to forfeit and surrender the shares to the Company under certain
circumstances (the "Forfeiture Restrictions"). The Forfeiture Restrictions shall
be determined by the Committee in its sole discretion, and the Committee may
provide that the Forfeiture Restrictions shall lapse upon (i) the attainment of
one or more performance measures established by the Committee that are based on
(1) the price of a share of Common Stock, (2) the Company's earnings per share,
(3) the Company's market share, (4) the market share of a business unit of the
Company designated by the Committee, (5) the Company's sales, (6) the sales of a
business unit of the Company designated by the Committee, (7) the net income
(before or after taxes) of the Company or any business unit of the Company
designated by the Committee, (8) the cash flow return on investment of the
Company or any business unit of the Company designated by the Committee, (9) the
earnings before or after interest, taxes, depreciation, and/or amortization of
the Company or any business unit of the Company designated by the Committee,
(10) the economic value added, (11) the return on stockholders' equity achieved
by the Company, or (12) the total stockholders' return achieved by the Company,
(ii) the Participant's continued employment with the Company or continued
service as a Consultant or Director for a specified period of time, (iii) the
occurrence of any event or the satisfaction of any other condition specified by
the Committee in its sole discretion, or (iv) a combination of any of the
foregoing. The performance measures described in clause (i) of the preceding
sentence may be subject to adjustment for specified significant extraordinary
items or events, and may be absolute, relative to one or more other companies,
or relative to one or more indexes, and may be contingent upon future
performance of the Company or any Affiliate, division, or department thereof.
Each Restricted Stock Award may have different Forfeiture Restrictions, in the
discretion of the Committee.

      (b) OTHER TERMS AND CONDITIONS. Common Stock awarded pursuant to a
Restricted Stock Award shall be represented by a stock certificate registered in
the name of the Participant. Unless provided otherwise in a Restricted Stock
Agreement, the Participant shall have the right

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to receive dividends with respect to Common Stock subject to a Restricted Stock
Award, to vote Common Stock subject thereto and to enjoy all other stockholder
rights, except that (i) the Participant shall not be entitled to delivery of the
stock certificate until the Forfeiture Restrictions have expired, (ii) the
Company shall retain custody of the stock until the Forfeiture Restrictions have
expired, (iii) the Participant may not sell, transfer, pledge, exchange,
hypothecate or otherwise dispose of the stock until the Forfeiture Restrictions
have expired, and (iv) a breach of the terms and conditions established by the
Committee pursuant to the Restricted Stock Agreement shall cause a forfeiture of
the Restricted Stock Award. At the time of such Award, the Committee may, in its
sole discretion, prescribe additional terms, conditions or restrictions relating
to Restricted Stock Awards, including, but not limited to, rules pertaining to
the termination of employment or service as a Consultant or Director (by
retirement, disability, death or otherwise) of a Participant prior to expiration
of the Forfeitures Restrictions. Such additional terms, conditions or
restrictions shall be set forth in a Restricted Stock Agreement made in
conjunction with the Award.

      (c) PAYMENT FOR RESTRICTED STOCK. The Committee shall determine the amount
and form of any payment for Common Stock received pursuant to a Restricted Stock
Award, provided that in the absence of such a determination, a Participant shall
not be required to make any payment for Common Stock received pursuant to a
Restricted Stock Award, except to the extent otherwise required by law.

      (d) COMMITTEE'S DISCRETION TO ACCELERATE VESTING OF RESTRICTED STOCK
AWARDS. The Committee may, in its discretion and as of a date determined by the
Committee, fully vest any or all Common Stock awarded to a Participant pursuant
to a Restricted Stock Award and, upon such vesting, all restrictions applicable
to such Restricted Stock Award shall terminate as of such date. Any action by
the Committee pursuant to this Subparagraph may vary among individual
Participants and may vary among the Restricted Stock Awards held by any
individual Participant. Notwithstanding the preceding provisions of this
Subparagraph, the Committee may not take any action described in this
Subparagraph with respect to a Restricted Stock Award that has been granted to a
"covered employee" (within the meaning of Treasury Regulation section
1.162-27(c)(2)) if such Award has been designed to meet the exception for
performance-based compensation under section 162(m) of the Code.

      (e) RESTRICTED STOCK AGREEMENTS. At the time any Award is made under this
Paragraph VIII, the Company and the Participant shall enter into a Restricted
Stock Agreement setting forth each of the matters contemplated hereby and such
other matters as the Committee may determine to be appropriate. The terms and
provisions of the respective Restricted Stock Agreements need not be identical.
Subject to the consent of the Participant and the restriction set forth in the
last sentence of Subparagraph (d) above, the Committee may, in its sole
discretion, amend an outstanding Restricted Stock Agreement from time to time in
any manner that is not inconsistent with the provisions of the Plan.

                             IX. PERFORMANCE AWARDS

      (a) PERFORMANCE PERIOD. The Committee shall establish, with respect to and
at the time of each Performance Award, the number of shares of Common Stock
subject to, or the

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maximum value of, the Performance Award and the performance period over which
the performance applicable to the Performance Award shall be measured.

      (b) PERFORMANCE MEASURES. A Performance Award shall be awarded to a
Participant contingent upon future performance of the Company or any Affiliate,
division, or department thereof during the performance period. The Committee
shall establish the performance measures applicable to such performance either
(i) prior to the beginning of the performance period or (ii) within 90 days
after the beginning of the performance period if the outcome of the performance
targets is substantially uncertain at the time such targets are established, but
not later than the date that 25% of the performance period has elapsed; provided
such measures may be made subject to adjustment for specified significant
extraordinary items or events. The performance measures may be absolute,
relative to one or more other companies, or relative to one or more indexes. The
performance measures established by the Committee may be based upon (1) the
price of a share of Common Stock, (2) the Company's earnings per share, (3) the
Company's market share, (4) the market share of a business unit of the Company
designated by the Committee, (5) the Company's sales, (6) the sales of a
business unit of the Company designated by the Committee, (7) the net income
(before or after taxes) of the Company or any business unit of the Company
designated by the Committee, (8) the cash flow return on investment of the
Company or any business unit of the Company designated by the Committee, (9) the
earnings before or after interest, taxes, depreciation, and/or amortization of
the Company or any business unit of the Company designated by the Committee,
(10) the economic value added, (11) the return on stockholders' equity achieved
by the Company, (12) the total stockholders' return achieved by the Company, or
(13) a combination of any of the foregoing. The Committee, in its sole
discretion, may provide for an adjustable Performance Award value based upon the
level of achievement of performance measures.

      (c) AWARDS CRITERIA. In determining the value of Performance Awards, the
Committee shall take into account a Participant's responsibility level,
performance, potential, other Awards, and such other considerations as it deems
appropriate. The Committee, in its sole discretion, may provide for a reduction
in the value of a Participant's Performance Award during the performance period.

      (d) PAYMENT. Following the end of the performance period, the holder of a
Performance Award shall be entitled to receive payment of an amount not
exceeding the number of shares of Common Stock subject to, or the maximum value
of, the Performance Award, based on the achievement of the performance measures
for such performance period, as determined and certified in writing by the
Committee. Payment of a Performance Award may be made in cash, Common Stock, or
a combination thereof, as determined by the Committee. Payment shall be made in
a lump sum or in installments as prescribed by the Committee. If a Performance
Award covering shares of Common Stock is to be paid in cash, such payment shall
be based on the Fair Market Value of the Common Stock on the payment date or
such other date as may be specified by the Committee in the Performance Award
Agreement.

      (e) TERMINATION OF AWARD. A Performance Award shall terminate if the
Participant does not remain continuously in the employ of the Company and its
Affiliates or does not continue to perform services as a Consultant or a
Director for the Company and its Affiliates at

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all times during the applicable performance period, except as may be determined
by the Committee.

      (f) PERFORMANCE AWARD AGREEMENTS. At the time any Award is made under this
Paragraph IX, the Company and the Participant shall enter into a Performance
Award Agreement setting forth each of the matters contemplated hereby, and such
additional matters as the Committee may determine to be appropriate. The terms
and provisions of the respective Performance Award Agreements need not be
identical.

                             X. PHANTOM STOCK AWARDS

      (a) PHANTOM STOCK AWARDS. Phantom Stock Awards are rights to receive
shares of Common Stock (or the Fair Market Value thereof), or rights to receive
an amount equal to any appreciation or increase in the Fair Market Value of
Common Stock over a specified period of time, which vest over a period of time
as established by the Committee, without satisfaction of any performance
criteria or objectives. The Committee may, in its discretion, require payment or
other conditions of the Participant respecting any Phantom Stock Award. A
Phantom Stock Award may include, without limitation, a Stock Appreciation Right
that is granted independently of an Option.

      (b) AWARD PERIOD. The Committee shall establish, with respect to and at
the time of each Phantom Stock Award, a period over which the Award shall vest
with respect to the Participant.

      (c) AWARDS CRITERIA. In determining the value of Phantom Stock Awards, the
Committee shall take into account a Participant's responsibility level,
performance, potential, other Awards, and such other considerations as it deems
appropriate.

      (d) PAYMENT. Following the end of the vesting period for a Phantom Stock
Award (or at such other time as the applicable Phantom Stock Award Agreement may
provide), the holder of a Phantom Stock Award shall be entitled to receive
payment of an amount, not exceeding the maximum value of the Phantom Stock
Award, based on the then vested value of the Award. Payment of a Phantom Stock
Award may be made in cash, Common Stock, or a combination thereof as determined
by the Committee. Payment shall be made in a lump sum or in installments as
prescribed by the Committee. Any payment to be made in cash shall be based on
the Fair Market Value of the Common Stock on the payment date or such other date
as may be specified by the Committee in the Phantom Stock Award Agreement. Cash
dividend equivalents may be paid during or after the vesting period with respect
to a Phantom Stock Award, as determined by the Committee.

      (e) TERMINATION OF AWARD. A Phantom Stock Award shall terminate if the
Participant does not remain continuously in the employ of the Company and its
Affiliates or does not continue to perform services as a Consultant or a
Director for the Company and its Affiliates at all times during the applicable
vesting period, except as may be otherwise determined by the Committee.

      (f) PHANTOM STOCK AWARD AGREEMENTS. At the time any Award is made under
this Paragraph X, the Company and the Participant shall enter into a Phantom
Stock Award

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Agreement setting forth each of the matters contemplated hereby, and such
additional matters as the Committee may determine to be appropriate. The terms
and provisions of the respective Phantom Stock Award Agreements need not be
identical.

                    XI. RECAPITALIZATION OR REORGANIZATION

      (a) NO EFFECT ON RIGHT OR POWER. The existence of the Plan and the Awards
granted hereunder shall not affect in any way the right or power of the Board or
the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's or any
Affiliate's capital structure or its business, any merger or consolidation of
the Company or any Affiliate, any issue of debt or equity securities ahead of or
affecting Common Stock or the rights thereof, the dissolution or liquidation of
the Company or any Affiliate or any sale, lease, exchange or other disposition
of all or any part of its assets or business or any other corporate act or
proceeding.

      (b) SUBDIVISION OR CONSOLIDATION OF SHARES; STOCK DIVIDENDS. The shares
with respect to which Awards may be granted are shares of Common Stock as
presently constituted, but if, and whenever, prior to the expiration of an Award
theretofore granted, the Company shall effect a subdivision or consolidation of
shares of Common Stock or the payment of a stock dividend on Common Stock
without receipt of consideration by the Company, the number of shares of Common
Stock with respect to which such Award may thereafter be exercised or satisfied,
as applicable (i) in the event of an increase in the number of outstanding
shares shall be proportionately increased, and the purchase price per share
shall be proportionately reduced, and (ii) in the event of a reduction in the
number of outstanding shares shall be proportionately reduced, and the purchase
price per share shall be proportionately increased. Any fractional share
resulting from such adjustment shall be rounded up to the next whole share.

      (c) RECAPITALIZATIONS AND CORPORATE CHANGES. If the Company recapitalizes,
reclassifies its capital stock, or otherwise changes its capital structure (a
"recapitalization"), the number and class of shares of Common Stock covered by
an Award theretofore granted shall be adjusted so that such Award shall
thereafter cover the number and class of shares of stock and securities to which
the Participant would have been entitled pursuant to the terms of the
recapitalization if, immediately prior to the recapitalization, the Participant
had been the holder of record of the number of shares of Common Stock then
covered by such Award. If (i) the Company shall not be the surviving entity in
any merger or consolidation (or survives only as a subsidiary of an entity),
(ii) the Company sells, leases or exchanges or agrees to sell, lease or exchange
all or substantially all of its assets to any other person or entity, (iii) the
Company is to be dissolved and liquidated, (iv) any person or entity, including
a "group" as contemplated by Section 13(d)(3) of the 1934 Act, acquires or gains
ownership or control (including, without limitation, power to vote) of more than
50% of the outstanding shares of the Company's voting stock (based upon voting
power), or (v) as a result of or in connection with a contested election of
Directors, the persons who were Directors of the Company before such election
shall cease to constitute a majority of the Board (each such event is referred
to herein as a "Corporate Change"), no later than (x) 10 days after the approval
by the stockholders of the Company of such merger, consolidation,
reorganization, sale, lease or exchange of assets or dissolution or such
election of Directors or (y) 30 days after a Corporate Change of the type
described in clause (iv), the Committee, acting in its sole discretion without
the consent or approval of any

                                      -11-
<PAGE>
Participant, shall effect one or more of the following alternatives, which
alternatives may vary among individual Participants and which may vary among
Options held by any individual Participant: (1) accelerate the time at which
Options then outstanding may be exercised so that such Options may be exercised
in full for a limited period of time on or before a specified date (before or
after such Corporate Change) fixed by the Committee, after which specified date
all unexercised Options and all rights of Participants thereunder shall
terminate, (2) require the mandatory surrender to the Company by selected
Participants of some or all of the outstanding Options held by such Participants
(irrespective of whether such Options are then exercisable under the provisions
of the Plan) as of a date, before or after such Corporate Change, specified by
the Committee, in which event the Committee shall thereupon cancel such Options
and the Company shall pay (or cause to be paid) to each Participant an amount of
cash per share equal to the excess, if any, of the amount calculated in
Subparagraph (d) below (the "Change of Control Value") of the shares subject to
such Option over the exercise price(s) under such Options for such shares, or
(3) make such adjustments to Options then outstanding as the Committee deems
appropriate to reflect such Corporate Change (provided, however, that the
Committee may determine in its sole discretion that no adjustment is necessary
to Options then outstanding), including, without limitation, adjusting an Option
to provide that the number and class of shares of Common Stock covered by such
Option shall be adjusted so that such Option shall thereafter cover securities
of the surviving or acquiring corporation or other property (including, without
limitation, cash) as determined by the Committee in its sole discretion.

      (d) CHANGE OF CONTROL VALUE. For the purposes of clause (2) in
Subparagraph (c) above, the "Change of Control Value" shall equal the amount
determined in clause (i), (ii) or (iii), whichever is applicable, as follows:
(i) the per share price offered to stockholders of the Company in any such
merger, consolidation, sale of assets or dissolution transaction, (ii) the price
per share offered to stockholders of the Company in any tender offer or exchange
offer whereby a Corporate Change takes place, or (iii) if such Corporate Change
occurs other than pursuant to a tender or exchange offer, the fair market value
per share of the shares into which such Options being surrendered are
exercisable, as determined by the Committee as of the date determined by the
Committee to be the date of cancellation and surrender of such Options. In the
event that the consideration offered to stockholders of the Company in any
transaction described in this Subparagraph (d) or Subparagraph (c) above
consists of anything other than cash, the Committee shall determine the fair
cash equivalent of the portion of the consideration offered which is other than
cash.

      (e) OTHER CHANGES IN THE COMMON STOCK. In the event of changes in the
outstanding Common Stock by reason of recapitalizations, reorganizations,
mergers, consolidations, combinations, split-ups, split-offs, spin-offs,
exchanges or other relevant changes in capitalization or distributions to the
holders of Common Stock occurring after the date of the grant of any Award and
not otherwise provided for by this Paragraph XI, such Award and any agreement
evidencing such Award shall be subject to adjustment by the Committee at its
sole discretion as to the number and price of shares of Common Stock or other
consideration subject to such Award. In the event of any such change in the
outstanding Common Stock or distribution to the holders of Common Stock, or upon
the occurrence of any other event described in this Paragraph XI, the aggregate
number of shares available under the Plan, the aggregate number of shares that
may be issued under the Plan through Incentive Stock Options, and the maximum
number of shares that may be subject to Awards granted to any one individual

                                      -12-
<PAGE>
may be appropriately adjusted to the extent, if any, determined by the
Committee, whose determination shall be conclusive. Notwithstanding the
foregoing, except as otherwise provided by the Committee, upon the occurrence of
a Corporate Change, the Committee, acting in its sole discretion without the
consent or approval of any Participant, may require the mandatory surrender to
the Company by selected Participants of some or all of the outstanding
Performance Awards and Phantom Stock Awards as of a date, before or after such
Corporate Change, specified by the Committee, in which event the Committee shall
thereupon cancel such Performance Awards and Phantom Stock Awards and the
Company shall pay (or cause to be paid) to each Participant an amount of cash
equal to the maximum value (which maximum value may be determined, if applicable
and in the discretion of the Committee, based on the then Fair Market Value of
the Common Stock) of such Performance Award or Phantom Stock Award which, in the
event the applicable performance or vesting period set forth in such Performance
Award or Phantom Stock Award has not been completed, shall be multiplied by a
fraction, the numerator of which is the number of days during the period
beginning on the first day of the applicable performance or vesting period and
ending on the date of the surrender, and the denominator of which is the
aggregate number of days in the applicable performance or vesting period.

      (f) STOCKHOLDER ACTION. Any adjustment provided for in the above
Subparagraphs shall be subject to any required stockholder action.

      (g) NO ADJUSTMENTS UNLESS OTHERWISE PROVIDED. Except as hereinbefore
expressly provided, the issuance by the Company of shares of stock of any class
or securities convertible into shares of stock of any class, for cash, property,
labor or services, upon direct sale, upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, and in any case whether or not
for fair value, shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number of shares of Common Stock subject to Awards
theretofore granted or the purchase price per share, if applicable.

                  XII. AMENDMENT AND TERMINATION OF THE PLAN

      The Board in its discretion may terminate the Plan at any time with
respect to any shares of Common Stock for which Awards have not theretofore been
granted. The Board shall have the right to alter or amend the Plan or any part
thereof from time to time; provided that no change in the Plan may be made that
would impair the rights of a Participant with respect to an Award theretofore
granted without the consent of the Participant, and provided, further, that the
Board may not, without approval of the stockholders of the Company, (a) amend
the Plan to increase the maximum aggregate number of shares that may be issued
under the Plan, increase the maximum number of shares that may be issued under
the Plan through Incentive Stock Options or change the class of individuals
eligible to receive Awards under the Plan, or (b) amend or delete Paragraph
VII(f).

                               XIII. MISCELLANEOUS

      (a) NO RIGHT TO AN AWARD. Neither the adoption of the Plan nor any action
of the Board or of the Committee shall be deemed to give any individual any
right to be granted an

                                      -13-
<PAGE>
Option, a right to a Restricted Stock Award, a right to a Performance Award or a
right to a Phantom Stock Award, or any other rights hereunder except as may be
evidenced by an Award agreement duly executed on behalf of the Company, and then
only to the extent and on the terms and conditions expressly set forth therein.
The Plan shall be unfunded. The Company shall not be required to establish any
special or separate fund or to make any other segregation of funds or assets to
assure the performance of its obligations under any Award.

      (b) NO EMPLOYMENT/MEMBERSHIP RIGHTS CONFERRED. Nothing contained in the
Plan shall (i) confer upon any employee or Consultant any right with respect to
continuation of employment or of a consulting or advisory relationship with the
Company or any Affiliate or (ii) interfere in any way with the right of the
Company or any Affiliate to terminate his or her employment or consulting or
advisory relationship at any time. Nothing contained in the Plan shall confer
upon any Director any right with respect to continuation of membership on the
Board.

      (c) OTHER LAWS; WITHHOLDING. The Company shall not be obligated to issue
any Common Stock pursuant to any Award granted under the Plan at any time when
the shares covered by such Award have not been registered under the Securities
Act of 1933, as amended, and such other state and federal laws, rules and
regulations as the Company or the Committee deems applicable and, in the opinion
of legal counsel for the Company, there is no exemption from the registration
requirements of such laws, rules and regulations available for the issuance and
sale of such shares. No fractional shares of Common Stock shall be delivered,
nor shall any cash in lieu of fractional shares be paid. The Company shall have
the right to deduct in connection with all Awards any taxes required by law to
be withheld and to require any payments required to enable it to satisfy its
withholding obligations.

      (d) NO RESTRICTION ON CORPORATE ACTION. Nothing contained in the Plan
shall be construed to prevent the Company or any Affiliate from taking any
action which is deemed by the Company or such Affiliate to be appropriate or in
its best interest, whether or not such action would have an adverse effect on
the Plan or any Award made under the Plan. No Participant, beneficiary or other
person shall have any claim against the Company or any Affiliate as a result of
any such action.

      (e) RESTRICTIONS ON TRANSFER. An Award (other than an Incentive Stock
Option, which shall be subject to the transfer restrictions set forth in
Paragraph VII(c)) shall not be transferable otherwise than (i) by will or the
laws of descent and distribution, (ii) pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder, or (iii) with
the consent of the Committee.

      (F) GOVERNING LAW. THE PLAN SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE MARSHALL ISLANDS, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.

                                      -14-<PAGE>
                                                                    EXHIBIT 10.1

                                                                       page 1/18

                                SERVICE AGREEMENT ENTERED INTO ON THE ONE SIDE
                                BY CAIXA ECONOMICA FEDERAL AND ON THE OTHER SIDE
                                BY THE COMPANY GTECH BRASIL LTDA., AS FOLLOWS:

Under the terms of this instrument, CAIXA ECONOMICA FEDERAL, a
government-controlled financial institution created and established under the
terms of Decree-Law No. 759, dated 12/Aug/69, and Decree No. 66303, dated
06/March/70, currently governed by the bylaws approved by Decree No. 5056, dated
29/April/04, altered by Decree No. 5210, dated 21/Sept/04, registered under
corporate taxpayer No. CNPJ 00.360.305/0001-04, having its head office at the
following address: SBS, Quadra 4, Lotes 3/4, represented herein by its National
Manager Bid Tenders and Contracts, Mr. VALNEI BATISTA ALVES, a Brazilian,
married, bearer of individual I.D. No. RG 486.516 - SSP/DF and individual
taxpayer No. CPF 288.956.816-49, hereinafter referred to simply as CAIXA, on the
one side and on the other side the company GTECH BRASIL LTDA., having its head
office at the following address: Avenida Ceci, 1600 - Lote 2 - Barueri - Sao
Paulo, SP, registered under corporate taxpayer No. CNPJ 68.926.628/0001-00,
represented herein by its Directors FERNANDO ANTONIO DE CASTRO CARDOSO, a
Brazilian, married, a business administrator, bearer of individual I.D. No. RG
8.359.303-2 - SSP/SP and individual taxpayer No. CPF/MF 019.983.778-30, residing
and domiciled in the city of Barueri, Sao Paulo, and JOSE MARIA JUNQUEIRA
SAMPAIO MEIRELLES, a Brazilian, a lawyer, divorced bearer of individual I.D. No.
RG 7.142.728-SSP/SP, and individual taxpayer No. CPF/MF 106.235.608-01, residing
and domiciled in the capital city of Sao Paulo, hereinafter referred to simply
as GTECH, in view of the authorization by CAIXA's Board of Governors n(0)
1354/2005, dated 04/May/2005 - proceeding No. 5307.01.0002.0/2005 - Direct
Contracting grounded on Article 25, caput, of Law No. 8666/93, have between them
agreed upon the performance of the services comprising the object of this
instrument, with the parties being subject to the rules contained in Law No.
8666/93, dated 21/June/93 and its alterations, and MARE Normative Ruling No. 05,
dated 21/July/95, as well as the clauses set out below.

ARTICLE ONE - OBJECT

This Agreement has as its object the rendering of the following services, solely
to support the transactions to be effected through GTECH terminals currently
installed in the lottery network and at CAIXA locations during the period of
transition to the new operating model for CAIXA's Lotteries:

      I)    maintenance and operation of CAIXA'S on-line, real-time lottery
            system;

      II)   development, implementation and operation of applications to support
            new products and services delegated by or agreed with CAIXA;

      III)  pay-out of winning tickets in the Brazilian Federal Lottery and
            Brazilian Federal Instant Lottery;
<PAGE>
                                                                       page 2/18

      IV)   receipt of payment of public utility bills and other payments
            effected at Lottery Outlets, including the payment of social
            benefits;

      V)    the capture, transmission and processing of lottery and non-lottery
            transactions captured at lottery outlets;

      VI)   the rendering of services in receiving tax returns of exempt
            individuals;

      VII)  the sale of authorized numbers for enabling pre-paid cell phone
            service.

      VIII) the initial loading and the reloading of the SPTrans "Bilhete Unico"
            in the city of Sao Paulo [T.N.: reusable electronic bus pass];

      IX)   deactivation of Lottery Outlets, in accordance with schedule
            determined by CAIXA in Annex II, with guarantee of continuity,
            support, maintenance and perfect performance of all the services
            contracted for, until the new system and other services to replace
            them are duly installed and in full operation.

PARAGRAPH ONE - Characterization of the object, the specifications, technical
requirements and conditions for performance of the services, as well specific
obligations in relation to the object contracted for are contained in Annexes I
through V, which are an integral part of this agreement.

PARAGRAPH TWO - GTECH shall maintain a structure compatible with providing all
the infrastructure and resources needed for rendering the services throughout
the duration of this agreement, taking into consideration the schedule
stipulated by CAIXA in Annex II, so as to:

      I) maintain the online, real-time lottery system in operation for the
      perfect functioning of all GTECH terminals for the capture of lottery and
      non-lottery transactions, distributed among the Lottery Outlets, as well
      as maintaining in like operating condition all its interfaces with the
      various systems connected to it, including the generation of files and
      reports needed for management by CAIXA;

      II)maintain in operation the data transmission system, for the perfect
      functioning of all the terminals belonging to it and used for the capture
      of lottery and non-lottery transactions that are installed in the Lottery
      Outlets distributed throughout Brazilian territory;

      III) maintain in operation the system for remote support and rendering of
      on-site services for the perfect functioning of all its terminals
      installed in the Lottery Outlets distributed throughout Brazilian
      territory;

      IV) maintain the services of the Call Center for as long as this agreement
      is in effect for all Lottery Outlets having equipment connected to the
      GTECH system distributed throughout Brazilian territory;
<PAGE>
                                                                       page 3/18

      V) maintain the Lottery Outlets permanently supplied with consumables
      (wager slips and rolls of printer paper) and inked ribbons, so as to
      guarantee that the network of terminals belonging to GTECH continues in
      full activity;

      VI) maintain the structure for the development and maintenance of systems
      and applications, with specialists in its legacy systems to answer routine
      and emergency calls and for new developments that may be necessary.

PARAGRAPH THREE - During the period in which this agreement is in effect, GTECH
shall provide for the complete de-installation, deactivation and removal of its
equipment installed at Lottery Outlets and other locations, in accordance with
the schedule set down by CAIXA in Annex II, which shall be subject to
alterations, provided they are communicated to GTECH with 40 days' notice.

ARTICLE TWO - GTECH'S OBLIGATIONS

The following are obligations of GTECH, in addition to the others provided for
in this agreement and its Annexes:

      I) to perfectly execute the services contracted for, using trustworthy and
      technically qualified personnel, within the agreed timeframes, complying
      with the established hours for service;

      II) to always deliver the services performed as checked and perfect,
      undertaking liability for any losses that defects or imperfections can be
      proven to have been caused to CAIXA or third parties, directly, in
      addition to redoing the incorrect work, when necessary, without onus or
      expense to CAIXA;

      III) to notify CAIXA immediately and in writing of any abnormalities it
      may note in the performance of the services;

      IV)to provide clarifications within the scope of this agreement as
      requested by CAIXA, whose complaints it undertakes to promptly remedy;

      V) to oversee, at its own expense and risk, the perfect performance of the
      services undertaken, independent of the oversight to be exercised by
      CAIXA;

      VI) to organize itself in such a way as to provide all the infrastructure
      necessary for providing the services set out herein, with the required
      quality and exactness;
<PAGE>
                                                                       page 4/18

      VII) to provide all the means necessary to guarantee full operability of
      the services, including consideration of circumstances such as strikes or
      stoppages of any kind, except for situations outside GTECH's control;

      VIII) to comply and enforce compliance with the norms regarding
      occupational health and safety as provided in the relevant legislation;

      IX) to undertake all measures and obligations established in the specific
      legislation regarding occupational accidents, especially when its
      employees are affected in the performance of the services or in connection
      with them, even if they occur at CAIXA's premises or at Lottery Outlets;

      X) to keep its employees duly identified by the use of employee ID badges
      when performing services at CAIXA's premises or at Lottery Outlets;

      XI) to accept, under the same contractual terms, increases or cuts that
      may be necessary, up to the limit of twenty-five percent (25%) of the
      initial updated value of this agreement;

      XII) during the contractual term, to maintain all SICAF registration and
      partial qualification conditions, as well as the other qualifications
      required under this Agreement, pursuant to Art. 55, XIII of Law No.
      8666/93;

      XIII) to allow all and any oversight by CAIXA in relation to the
      performance of the services, as well as fulfilling the obligations
      provided for expressly or implicitly in this Agreement;

      XIV) to maintain absolute secrecy as to the information contained in the
      documents or materials handled by its employees, dispensing special
      attention to their safekeeping, when necessary;

      XV) during the entire term of this Agreement, to provide CAIXA and the
      lottery retailers with permanent support and maintenance services for
      terminals and terminal applications already installed;

      XVI) to participate in weekly meetings in Brasilia or Sao Paulo, at
      CAIXA's discretion, to deliberate upon actions relating to development,
      operations, and maintenance, as well as those relating to the logistics of
      replacing GTECH's services;

      XVII) to comply with the deadlines established in the schedule defined by
      CAIXA in Annex II, with CAIXA being entitled to cancel de-installation by
      means of prior notice of five (5) business days of the scheduled date,. In
      the event of cancellation, the new date for de-installation shall be not
      less than 20 days of the originally scheduled date, unless otherwise
      agreed by the parties;
<PAGE>
                                                                       page 5/18

      XVIII) to maintain Technical Assistance Bases (TABs) and accredit
      technical representatives in order to provided maintenance and technical
      assistance services for GTECH equipment allocated to the performance of
      the services, for the time periods and conditions established herein,
      taking into consideration the de-installation schedule established by
      CAIXA;

      XIX) during the de-activation and replacement of the network, to guarantee
      CAIXA continuity, support and maintenance for the perfect execution of all
      the services contracted for until the network, the system and the other
      services that will replace them are duly installed and fully operational;

      XX) to maintain the entire on-line, real time lottery and financial
      services system, transferring to CAIXA in full the intelligence and
      respective logical and physical designs and operationalizing it jointly
      with CAIXA;

      XXI) to maintain the already existing terminals for the purpose of
      auditing and monitoring the system, at locations indicated by CAIXA;

      XXII) for auditing purposes, to allow unrestricted access to systems
      intelligence and operations by the employees designated by CAIXA;

      XXIII) when so requested, to supply CAIXA with files formatted for
      operational, auditing and control purposes, in compliance with the
      specifications stipulated by it.

ARTICLE THREE - GTECH'S LIABILITY

Following are the areas of GTECH's liability:

      I) all and any damage or losses it is proven to have caused to CAIXA or to
      third parties, even if unintentional, by itself, its directors, employees,
      representatives or agents, which liability shall not be precluded or
      diminished by the oversight or monitoring exercised by CAIXA;

      II) to be liable before CAIXA for any type of sanction, fine, penalty or
      any assessment or action it may suffer as a consequence of the provision
      of services, as well as for the labor contracts of its employees, even in
      those cases that involve judicial decisions, releasing CAIXA from any
      joint and several liability or responsibility;

      III) to be liable for losses, unauthorized reproductions and/or
      adulterations that may occur in documents and magnetic files during the
      period in which they are in its safekeeping.
<PAGE>
                                                                       page 6/18

PARAGRAPH ONE - GTECH authorizes CAIXA to deduct directly from the invoices for
payments that are due it, or from the contractual guarantee, the amount
corresponding to the aforementioned damages or losses, independent of any
judicial proceeding, prior defense in an administrative proceeding being ensured
it before the aforementioned deduction is effected.

PARAGRAPH TWO - The amount to be reimbursed to CAIXA in the event of losses for
which GTECH is liable shall be calculated using the TR index for the period
between the date of occurrence of the fact that gave rise to the loss or damage
and the date of the actual reimbursement to CAIXA, using the following formula:

            VIN
    VAT = ------- X IDF, where:
            IDI

-   VAT = restated amount
-   VIN = initial amount
-   IDI = cumulative TR index on the initial date
-   IDF = cumulative TR index on the final date

ARTICLE FOUR - CAIXA'S OBLIGATIONS

The following are CAIXA's obligations:

      I) to inform GTECH of changes in the addresses of Lottery Outlets, by
      means of keeping their registration data updated in the SIGEL;

      II) to input data and service requests for the Lottery Outlets in the
      SIGEL;

      III) to effect the payments due under the terms established in this
      agreement;

      IV) to notify GTECH of any irregularities encountered in the performance
      of the services;

      V) to oversee the Lottery Outlets so that they are legally licensed for
      the sale of wagers and the provision of financial services;

      VI) to authorize pay-out of lottery prizes;
<PAGE>
                                                                       page 7/18

      VII) to supply GTECH with the technical specifications for new products
      and services to be incorporated by GTECH into the network for the capture
      and processing of data, via SST, SSL or SJL;

      VIII) to homologate the applications developed by GTECH within a maximum
      timeframe of ten (10) consecutive days as of their presentation by GTECH,
      under penalty of such applications being considered tacitly homologated;

      IX) to oversee the Lottery Outlets to ensure that their electrical
      installations are in perfect working order and are provided with
      sufficient space to ensure that the installed terminals function normally;

      X) to notify GTECH within the timeframe stipulated in Article One,
      Paragraph Three of any alteration to the schedule set out in Annex II,
      under penalty of Caixa being liable for payment of the amount of four
      hundred Brazilian reals (R$ 400,00) per occurrence.

      XI) to make available the systems information required to authorize
      financial transactions, on line and in real time, under penalty of being
      required to pay for transactions that were not completed as a result of
      such contractual non-performance on CAIXA's part.

      XII) to make available to GTECH and notify the Lottery network before
      beginning the installation of new equipment, the telephone number(s) of
      CAIXA's Call Center that will take calls originating from the new
      equipment and services.

ARTICLE FIVE - FORM OF PAYMENT

CAIXA, after acceptance of the services, shall effect payment to GTECH monthly
on the sixth (6th) business day after presentation of the invoice(s) for the
services actually performed during the previous month, mandatorily by means of a
credit to a current account held by GTECH at one of CAIXA's branches.

PARAGRAPH ONE - The payment shall only be effected if GTECH is fully performing
all its contractual obligations.

PARAGRAPH TWO - The invoice(s) must contain all the elements required by law,
especially:

      I) complete identifying information for GTECH: GTECH's CNPJ (the same as
      indicated in the preamble to the agreement, taking into account the option
      of issuance by the branch/head office having the same base CNPJ number and
      the specific sequence number of the branch/head office), address, state or
      local taxpayer number, etc.;
<PAGE>
                                                                       page 8/18

      II) authorization for printing and CNPJ of the printer, printed at the
      foot of the invoice(s);

      III) complete identifying information for CAIXA;

      IV) brief description of all the services/items comprising the object of
      the agreement;

      V) the period to which it refers;

      VI) unit prices and totals for the services provided;

PARAGRAPH THREE - The invoices must also contain, for CAIXA's control purposes,
the process number that originated the contracting and the agreement number
(SIGES) provided by CAIXA.

PARAGRAPH FOUR - GTECH must attach to the invoice(s) the monthly reports
generated by the lottery system.

PARAGRAPH FIVE - Invoices not approved by CAIXA shall be returned to GTECH for
the necessary corrections, with the information that motivated their rejection,
with the timeframe for payment being counted from the date they are
re-submitted.

PARAGRAPH SIX - The return of invoices not approved by CAIXA under no
circumstances authorizes GTECH to suspend performance of the services or to fail
to make payments owed to its employees.

PARAGRAPH SEVEN - At the time of payment, an online consult will be made to the
SICAF to check all GTECH's information on file in the System.

PARAGRAPH EIGHT - If any irregularity is noted in the SICAF, GTECH will be
notified in writing to normalize its situation within the timeframe established
by CAIXA, and will be granted five (5) days as of notification by CAIXA to
present its defense, under penalty of application of the appropriate sanction.

PARAGRAPH NINE - In compliance with the legislation governing the withholding of
taxes at the source, such as a Law No. 10.833, dated 29/Dec/2003, and Law No.
9.430, dated 27/Dec/1996, when payment is made CAIXA shall withhold the taxes
due, such as Corporate Income Tax (IRPJ), Social Contribution on Net Income
(CSLL), Contribution to Finance Social Security (Cofins) and the PIS/PASEP
Contribution, as regulated by the authorized Treasury agency, and shall comply
with the following:

      I) should GTECH be supported by a judicial measure determining suspension
      of payment of the IRPJ or of any of the contributions referred to in this
      Paragraph, it must present to CAIXA, for each
<PAGE>
                                                                       page 9/18

      payment, proof that the exemption from withholding at the source continues
      to be supported by a judicial measure;

      II) should GTECH fall under any of the circumstances provided for in
      Article 25 of IRS Normative Ruling No. 480/04, there will be no
      withholding as provided for in this Paragraph, to which end it must
      present to CAIXA the documentation or declaration that proves such
      condition.

PARAGRAPH TEN - No payment shall exempt GTECH from its liability and
obligations, nor shall it imply permanent acceptance of the services.

PARAGRAPH ELEVEN - Non-payment of the invoice(s) due solely to CAIXA's fault
within the timeframe established herein shall be grounds for the indexing of the
respective amount by the TR, using the following formula:

            VIN
    VAT = ------- X IDF, where:
            IDI

-   VAT = restated amount
-   VIN = initial amount
-   IDI = cumulative TR index on the initial date
-   IDF = cumulative TR index on the final date

ARTICLE SIX -  PRICES

For the perfect performance of the services comprising the object of this
agreement and compliance with the other conditions stipulated herein, CAIXA
shall pay to GTECH the total prices indicated below:

      I) a fixed installment of four million, eight hundred nine thousand and
      sixty Brazilian reals (R$4.809.060,00) per month for data processing and
      for the corrective and evolutive maintenance of the systems, including
      research and development and other administrative expenses;

      II) the monthly unit price of four hundred Brazilian reals (R$400,00) per
      terminal active on the last day of the month for maintenance of the
      equipment at Lottery Outlets, including lottery and financial terminals;

      III) the monthly unit price of five hundred Brazilian reals (R$500,00) per
      Lottery Outlet active on the last day of the month for the capture and
      transport of data;
<PAGE>
                                                                      page 10/18

      IV) the unit price of three centavos (R$0,03) per transaction effected
      (whether lottery or financial) for the supply of consumables and
      logistics;

      V) the unit price of four hundred Brazilian reals (R$400,00) per
      deactivation of a Lottery Outlet and removal of all equipment;

      VI) the unit price of six hundred Brazilian reals (R$600,00) per terminal
      installed or removed, including "Caminhao da Sorte" for the installation
      or removal of terminals;

      VII) the unit price of one thousand Brazilian reals (R$1.000,00) per
      terminal relocated;

      VIII) the unit price of one thousand, five hundred Brazilian reals
      (R$1.500,00) per Lottery Outlet relocated due to Change of Address;

SOLE PARAGRAPH - The estimated monthly amount for the first period of thirty
days is twenty and six million, seventy and three thousand, seven hundred and
sixty and nine Brazilian reals and sixty and eight cents (R$26.073.769,68), and
the initial total estimated amount for the twelve (12) months of the agreement,
pursuant to the schedule contained in Annex II, is two hundred and thirty
million, seven hundred and ninety and four thousand, eight hundred and seventy
and eight Brazilian reals and ninety and four cents (R$230.794.878,94).

ARTICLE SEVEN - TERM

This Agreement shall have a term of twelve (12) months as of 15/May/2005 (ending
on 14/May/2006), and may be extended at CAIXA's sole discretion by means of 60
days' prior notice for the length of time required to completely replace and
deactivate the services comprising the object hereof, due respect being given to
the limit permitted in Law 8666/93, or rescinded under the circumstances
provided for herein. During the entire period of the possible extension of the
term of the contracting, the same conditions described herein shall apply.

ARTICLE EIGHT - OVERSIGHT

During the course of the performance of the services, it shall be up to CAIXA
itself or to whomever it may appoint to oversee faithful compliance with the
terms hereof.

SOLE PARAGRAPH - For the purposes of this Article, CAIXA shall register in a
report any deficiencies noted in the performance of the services, forwarding a
copy to GTECH for the immediate correction of the irregularities pointed out,
without prejudice to the application of the penalties provided for herein.
<PAGE>
                                                                      page 11/18

ARTICLE NINE -  APPLICABLE TAXES, CHARGES, INSURANCE, ETC.

GTECH shall be solely responsible for payment of the following:

      I) all taxes that may be owed as a consequence of the performance of
      the services comprising the object of this Agreement;

      II) the labor-related and Social Security contributions, premiums for
      insurance and work-related accident coverage, emoluments and any other
      expenses required for the performance of the services;

      III) all and any fees or emoluments due to any Federal, district, State,
      local or notary public agencies as a consequence of the performance of the
      services comprising the object of this Agreement.

ARTICLE TEN -  GUARANTEE

GTECH provides a guarantee on performance of the Agreement in the amount of
eleven million, five hundred thousand Brazilian reals (R$11.539.743,00),
equivalent to five percent (5%) of the total value contracted for, for a period
of twelve (12) months, and shall present to CAIXA within ten (10) days of the
date of signing of this instrument proof of a BANK SURETY containing:

      I) the period of validity, which must correspond to the period during
      which the Agreement is in force, PLUS AN ADDITIONAL 30 DAYS, which must be
      renewed in a timely manner if the term of the Agreement is extended or
      renewed;

      II) express confirmation from the guarantor that, as a joint debtor, it
      will make payment to CAIXA independent of judicial notification in the
      event the guaranteed party fails to fulfill its obligations;

      III) an express waiver by the guarantor of the benefits of order and of
      the rights provided for in Articles 827 and 838 of the New Civil Code;

      IV) a clause guaranteeing indexing of the guaranteed amount,
      pursuant to Article Two, Sub-Section XI;

      V) a bank surety that does not meet the requirements established in
      letters "a", "b", "c" and "d" above will not be accepted.
<PAGE>
                                                                      page 12/18

PARAGRAPH ONE - The failure to present proof of guarantee within the timeframe
above shall entitle CAIXA to unilateral rescission hereof, subjecting GTECH to
the applicable administrative sanctions.

PARAGRAPH TWO - The guarantee shall be released after the perfect performance of
this Agreement, within a period of up to thirty (30) days after its expiration
date, provided all its terms, articles and conditions are fulfilled.

PARAGRAPH THREE - Forfeiture of the guarantee in CAIXA's favor for breach of the
contractual obligations shall occur by operation of law after the appropriate
administrative proceeding, when applicable, without prejudice to the other
sanctions provided for herein.

PARAGRAPH FOUR - The guarantee must be topped up within a maximum of ten (10)
days whenever any amounts are deducted from it or when there is a redimensioning
of the volume of services, a contractual renegotiation or a price review, so
that it corresponds to 5% of the total amount contracted for.

PARAGRAPH FIVE - Substitution of the guarantee is permitted at any time, by
means of notification to Caixa and in compliance with the provisions of Law
8666/93.

ARTICLE ELEVEN -  ADMINISTRATIVE SANCTIONS

In the event of non-performance of the obligations undertaken, with prior
defense within regular proceedings guaranteed, GTECH shall be subject to the
following penalties, without prejudice to the applicable civil liability:

      I) warning;
      II) fine;
      III) temporary suspension of the right to participate in CAIXA bid
      tenders;
      IV) classification as "not in good standing".

PARAGRAPH ONE - A warning will be given in the event of faults or failure to
comply with contractual clauses that do not cause damage to CAIXA.

PARAGRAPH TWO - GTECH shall be subject to a fine of zero point 5 percent (0.5%)
on the amount of the average remuneration for the previous three (3) months,
applicable as of the third warning given.

PARAGRAPH THREE - The following fines shall be applied in the event of the
occurrences and/or situations described below, for which GTECH is to blame, on a
cumulative basis when need be:
<PAGE>
                                                                      page 13/18

      I) For the occurrence of ERBs:

            a)    A fine in the amount of one hundred Brazilian reals (R$100,00)
                  per business hour of delay in the event of noncompliance with
                  the timeframe for answering corrective maintenance calls for
                  stopped ERBs (no sales at the Lottery Outlet), as defined in
                  sub-item 3.1.5, IV of Annex I, per Lottery Outlet affected,
                  linked to the respective ERB;

            b)    Fine in the amount of fifty Brazilian reals (R$50,00) per
                  business hour of delay in the event of noncompliance with the
                  timeframe for answering corrective maintenance calls for ERBs
                  that are not stopped (slowness but the Lottery Outlet is able
                  to complete sales), as defined in sub-item 3.1.5, IV of Annex
                  I, per Lottery Outlet affected, linked to the respective ERB;

      II) Fine in the amount of one hundred Brazilian reals (R$100,00) per day
      of delay for the first two (2) days and two hundred Brazilian reals
      (R$200,00) per day of delay as of the third day of delay, in the event of
      noncompliance with the timeframe for answering corrective maintenance
      calls for Lottery Outlets, as defined in sub-item 3.1.5, III of Annex I;

      III) Fine in the amount of one hundred Brazilian reals (R$100,00) per day
      of delay in the event of noncompliance with the timeframe for removal of
      equipment, as established in the schedule in Annex II;

      IV) Fine of 0.16% per consecutive hour of stoppage, applied to the total
      amount(s) of the invoice(s) covering the entirety of the services
      comprising the object of this Agreement provided in the month in which the
      stoppage occurs in the processing services for more than two (2) hours
      daily, whether uninterrupted or not, within the hours of operation of the
      processing site;

      V) Fine of 0.002% calculated on the total amount(s) of the monthly
      invoice(s) covering the entirety of the services comprising the object of
      this Agreement provided in the month of the occurrence, per percentage
      point or fraction thereof under 80% when GTECH does not meet the monthly
      average service rate of answering 80% of calls to the Call Center in up to
      30 seconds, except for periods when the cause of the possible problems are
      other than the services provided by GTECH (e.g.: unavailability of CAIXA
      systems, sundry agreements, public utilities providers, etc.).

      VI) Fine in the amount of one hundred Brazilian reals (R$100,00) per day
      and per Lottery Outlet in the event of proven failure to supply
      consumables for the terminals belonging to GTECH;

      VII) Fine of fifty thousand Brazilian reals (R$50.000,00) per hour of
      delay in the event of noncompliance with the hours for transmission of
      files to CAIXA defined in Annex III, due to GTECH's fault, with the sole
      exception of partial burst files where a grace period of up to two (2)
      hours will be allowed from the time established in the aforementioned
      Annex;
<PAGE>
                                                                      page 14/18

      VIII) Fine in the amount of fifty thousand Brazilian reals (R$50.000,00)
      per occurrence in the event of incomplete, improper or incorrect
      transmission of the content of files forwarded to CAIXA, proven to be the
      sole fault of GTECH.

PARAGRAPH FOUR - The fines provided for in the sub-sections above are applicable
independent of the deduction referred to in Article Three, Paragraph One.

PARAGRAPH FIVE - The fine(s) applied shall be deducted from the payment of the
first invoice payable after conclusion of the procedure for applying the
respective penalty, from the amount of the contractual guarantee, or collected
directly from GTECH, administratively and/or judicially.

PARAGRAPH SIX - If the amount of the fine is greater than the amount of the
guarantee pledged, in addition to losing the latter, GTECH shall be liable for
the difference, which shall be deducted from payments that may be owed by CAIXA
or, when necessary, collected administratively and/or judicially.

PARAGRAPH SEVEN - The penalty of temporary suspension from tendering bids and
contracting with CAIXA for a period of up to two (2) years may be applied in the
following situations, even if such facts do not result in losses to CAIXA:

      I) recurrence of noncompliance with contractual timeframes;

      II) total or partial non-performance of a contractual obligation;

      III) rescission of the Agreement.

PARAGRAPH EIGHT - The penalty of classification as "not in good standing" may be
applied if GTECH fails to fulfill or only partially fulfills a contractual
obligation, provided such facts are proven to result in losses to CAIXA.

PARAGRAPH NINE - The penalties of temporary suspension from tendering bids and
contracting with CAIXA and classification as "not in good standing" may be
applied, furthermore, if GTECH is found guilty in final judgment of tax fraud in
the payment of any taxes or fails to fulfill its tax or Social Security
obligations.

PARAGRAPH TEN - The sanctions provided for in Sub-Sections I, III and IV of the
heading of this Article may be applied together with that in Sub-Section II of
the aforementioned heading.
<PAGE>
                                                                      page 15/18

PARAGRAPH ELEVEN - The penalties provided for herein, after final judgment in an
administrative proceeding during which GTECH shall be guaranteed ample defense,
shall be entered into the SICAF.

PARAGRAPH TWELVE - The lack of equipment or material resources for the
maintenance of the facilities currently installed may not be alleged as a cause
of force majeure and shall not exempt GTECH from the penalties to which it is
subject for the non-performance of the obligations established herein.

PARAGRAPH THIRTEEN - GTECH shall be exempt from administrative sanctions in the
following cases:

      I) Proven improper use of the equipment on the part of the Lottery
      retailers;

      II) Identification of problem(s) in the electrical installations of the
      Lottery Outlets;

      III) Acts of God and force majeure as provided for in the Brazilian Civil
      Code.

ARTICLE TWELVE - CRIMINAL OFFENSES

Criminal offenses as typified in Law 8666/93 shall be the object of judicial
proceedings, as provided for in law, without prejudice to the other applicable
sanctions.

ARTICLE THIRTEEN - NON-PERFORMANCE AND RESCISSION OF THE AGREEMENT

The total or partial non-performance of the Agreement is grounds for its
rescission, with contractual consequences as well as those provided for in law.

PARAGRAPH ONE - The following constitute grounds for rescission of the
Agreement, independent of notification or judicial or extra-judicial summons, at
CAIXA's discretion:

      I) non-performance by GTECH, in whole or in part, of any of its
      obligations/responsibilities provided for herein;

      II) the transfer of this agreement, in whole or in part, without the prior
      consent of CAIXA;

      III) the recurring commission of grave faults or grave failures in the
      performance of the services;

      IV) declaration of bankruptcy on the part of GTECH;

      V) dissolution of GTECH;
<PAGE>
                                                                      page 16/18

      VI) corporate alterations or modification of the purpose or structure of
      GTECH that jeopardizes performance of the Agreement;

      VII) slowness of performance that leads CAIXA to presume non-performance
      of the service;

      VIII) other grounds stipulated in Art. 78 of Law No. 8666/03.

PARAGRAPH TWO - In the event of rescission of the Agreement, all GTECH's
activities in relation to the services contracted for shall cease, and they
shall be taken over by CAIXA, which will perform them itself or through third
parties.

PARAGRAPH THREE - Rescission of the agreement shall entail, independent of any
judicial or extra-judicial proceeding on CAIXA's part, the retention and
assumption of credits deriving from the Agreement, up to the limit of losses
proven to have been caused to CAIXA, without prejudice to the sanctions provided
for in this Agreement and in the Law.

ARTICLE FOURTEEN - ACKNOWLEDGEMENT OF CAIXA'S RIGHTS

GTECH declares its awareness that this Agreement may be the object of
administrative rescission and hereby expresses its full knowledge of CAIXA's
rights in such a situation, as provided for in Articles 77 through 80 of Law No.
8666/93.

ARTICLE FIFTEEN - BUDGETARY RESOURCES

The expenses arising from this contracting shall be covered by the budgetary
allotment provided for in item No. 5303 - 11 - Expenses for the Performance of
Data Processing Services, and 5605-09 - Expenses for On Line Lottery the amount
of which is allocated in the SIPLO as Commitment NO. 2711/2005/MZ.

ARTICLE SIXTEEN - FINAL PROVISIONS

The parties are further bound by the following provisions:

      I)    in counting the time periods established in this Agreement, the
            starting date shall be excluded and the due date shall be included;

      II)   in order to meet the needs of the service dictated by law or by
            regulatory acts governing banking or lottery services, CAIXA may
            alter, either permanently or temporarily, the hours for performance
            of the
<PAGE>
                                                                      page 17/18

            services as the case may be by means of prior notice to GTECH and by
            agreement between the parties in other circumstances;

      III)  it is prohibited for GTECH to pledge this Agreement in guarantee or
            use it for any financial operations without the prior express
            authorization of CAIXA;

      IV)   CAIXA and GTECH are aware that they, their directors, employees or
            representatives must maintain the most absolute secrecy in relation
            to the data, information or documents of any nature that may be
            shown, handled or in any way gained knowledge of as a consequence of
            the services comprising the object of this Agreement, and that they
            are consequently, by law, civilly and criminally liable for their
            undue disclosure, careless or incorrect utilization, without
            prejudice to liability for losses and damages to which they give
            rise and the contractual sanctions imposed;

      V)    GTECH must ensure that any equipment belonging to it and existing at
            Lottery Outlets that are not a part of the services described
            herein, even those for access to CAIXA's institutional site, are
            physically and logically isolated from CAIXA's network;

      VI)   GTECH allows Caixa or Lottery Entrepreneur to remove GTECH's
            equipments from counter, in case of GTECH's technician will not be
            present at the moment of the installation of the new equipments,
            keeping these in the lottery outlet under the guard and
            responsibility of lottery entrepreneur.

ARTICLE SEVENTEEN - JURISDICTION

The Federal Courts of the Judicial District of Brasilia shall be the venue for
the settlement of any disputes arising from this Agreement.

IN WITNESS WHEREOF, the parties sign this instrument in two counterparts of
equal content and form, in the presence of two witnesses.

Brasilia/DF                                 ,     May, 12              ,  2005
--------------------------------------------      ---------------------
Place/date

----------------------------------------    ------------------------------------
CAIXA ECONOMICA FEDERAL                     Signature for GTECH
                                            Name GTECH

WITNESSES
<PAGE>
                                                                      page 18/18

----------------------------------------    ------------------------------------
Name:                                       Name:
     -----                                       -----
Taxpayer I.D./CPF:                          Taxpayer I.D./CPF:
                  -----                                       -----

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