Exhibit 10.1

DATED                                                     March 24, 2011

 

 

 

 

_____________________________________________________

SERVICE PROVIDER AGREEMENT

_____________________________________________________

 

 

 

 

 

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TABLE OF CONTENTS

1

TELUPAY RESPONSIBILITIES

1

2

CELLUSERV RESPONSIBILITIES

2

3

ACCEPTANCE

2

4

FEES

2

5

TERM

2

6

LIMITED USE

2

7

EXCLUSIVITY

3

8

MAINTENANCE SERVICES

3

9

ENHANCEMENTS AND MODIFICATIONS

3

10

CONFIDENTIALITY

3

11

TERMINATION

4

12

LIMITATION OF LIABILITY

4

13

TELUPAY SERVICES INDEMNITY

4

14

EMPLOYEE RECRUITING

5

15

RELATIONSHIP OF PARTIES

5

16

TAXES

5

17

DISPUTES

5

18

APPLICABLE LAW

5

19

ENTIRE AGREEMENT

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THIS SERVICE PROVIDER AGREEMENT

is made on March 24, 2011

BETWEEN:

(1)       TELUPAY SOLUTIONS LIMITED, incorporated in incorporated in Jersey,
whose registered address is First Floor, 17 The Esplanade, St. Helier, Jersey
JE2 3QA ("Telupay"); and

(2)       CELLUSERV, INC., a Guam corporation whose mailing address is 137
Murray Blvd., Suite 28, Hagåtña, Guam 96910 ("Celluserv")

Collectively known as "Parties"

RECITALS:

CelluServ

has established agreements and connectivity with Mobile Network Operators
("MNO") in Micronesia to sell and electronically distribute MNO Prepaid Airtime
and Prepaid Long Distance products ("MNO Prepaid Products").

Telupay

has the expertise and resources to provide services electronically distributing
MNO prepaid products and services provisioning the monetary settlement of sales
and commissions for said products and services ("Services").

Celluserv

shall avail of and Telupay shall provide Telupay Services (as defined below),
covering Micronesia which includes Guam, the Commonwealth of the Northern
Marianas, the Republic of Palau, the Federated States of Micronesia (Yap,
Pohnpei, Chuuk, and Kosrae), Truk, the Marshall Islands, Kiribati, and Wake
Island ("Territory").

Both Parties desire to create the basis for a close and long-term relationship
and, therefore, wish to establish this Agreement in which both Parties will
cooperate together to sell and electronically distribute products and services
to potential clients.

IT IS AGREED

as follows:

1       Telupay Responsibilities

1.1       Provide its services and related products based on the specifications
and functionality as outlined in Schedule A, to be utilized for the sale,
electronic processing, and settlement of MNO Prepaid Products and Services. This
includes the server-based transaction processing software, point-of-sale
software, mobile agent applet, pin repository and distribution software,
application program interface to MNO prepaid systems, website software, and
application program interface to Telupay Mobile Banking System (collectively the
"Telupay Services").

1.2       Make available to CelluServ application interfaces for all phone
applets that Telupay has licenses for and has developed as part of the Telupay
Services.

1.3       Deliver Telupay Services and install them on CelluServ servers and
equipment within the Territory.

1.4       Provide training services and manuals for each product described above
guided by Schedule A.

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2       Celluserv Responsibilities

2.1       Source and provide the hardware requirements at its own expense and be
responsible for ensuring that the hardware provided meets the Server Hardware
Requirements outlined by Telupay in Schedule "A".

2.2       Use its best effort to promote and market MNO Prepaid Products and
Services.

2.3       Provide Telupay's clients access to sell MNO Prepaid Products and
Services.

2.4       Provide Telupay authorized personnel with full, free, and safe 24/7
access to its equipment for purposes of support, including the use of computer
and data communication facilities, if required.

3       Acceptance

When Telupay determines the Telupay Services has been achieved , Telupay shall
provide written notification of such fact to CelluServ. CelluServ shall have an
acceptance period of thirty (30) working days, from the date of receipt of
Telupay's notice, in which to conduct tests to determine if the Telupay Services
has been achieved. On or prior to the expiration of this acceptance period,
CelluServ shall provide to Telupay a written notice of either, (1) acceptance,
or (2) notice of non-achievement and rejection of same.

4       Fees

CelluServ shall pay Telupay a Service Fee equivalent to TWENTY TWO and a HALF
percent (22.5%) of the gross transaction fees earned from MNO Prepaid Products
through its use of the Telupay Services less half of the total SMS, MMS, IP
Packet and other message or mobile transmission costs incurred for said
transactions covered by this Agreement. Service fees shall be paid and extracted
utilizing Telupay Services during the settlement process of all transactions
either real time or as part of the financial institution's daily end-of-day
batch process, or however the bank prefers its settlement procedures.

5       Term

This Agreement is for one (1) year and is automatically renewable for successive
like periods of one year for each anniversary of the Effective Date unless
either Party, at least three (3) months prior to the next anniversary date,
should give written notice of termination .

6       Limited Use

Telupay hereby grants to CelluServ access within the Territory to use the
Telupay Services (to include Program Disks and the computer programs contained
therein in machine-readable , object code form only), and the accompanying
Services Documentation which means to include the services and training manuals,
user instructions , technical literature and all other related materials in eye
readable format. CelluServ agrees that it will not assign, sublicense, transfer,
pledge, lease, rent, or share its rights under this Agreement, and that it may
not reverse assemble, reverse compile, or otherwise translate the Telupay
Services. CelluServ acknowledges and agrees that the Telupay Services and the
Services Documentation are proprietary products of Telupay, and that all right,
title, and interest in and to the Telupay Services and Services Documentation
shall remain with Telupay.

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7       Exclusivity

Within the contracted (1) year anniversary period counted from the Effective
Date, Telupay grants Celluserv exclusivity to engage and implement the Telupay
Services in the Territory. The exclusivity granted hereunder in favour of
Telupay shall ipso facto cease and terminate without need of notice should
commercial targets set by both Parties are not realized by Celluserv within the
term given and/or the option of accomplishing the commercial targets are clearly
viable with the participation of a third-party whose terms of engagement shall
be subject to a separate agreement with both Parties.

8       Maintenance Services

8.1       During the term of this Agreement, Telupay will provide maintenance
services for the Telupay Services to CelluServ on the following terms and
conditions:

(a)       Telupay will provide second-tier support to Celluserv during its
regular business hours: Monday - Friday, 9:00 AM. to 6:00 P.M (Territory time).

(b)       On-call Celluserv support is available on weekends or on all holidays
that the Celluserv observes to address emergency or critical situations wherein
Telupay Services' cease to function and Telupay Services cannot continue,
excluding dependencies from third-party service providers and other projects of
Celluserv that use the functionalities of Telupay Services, are not functioning
or functioning with the performance that makes it unusable.

8.2       CelluServ will receive all Telupay Services major version releases,
minor updates and point releases of the Telupay Services. Telupay will provide
installation, testing, and coordination of Telupay Services enhancements,
revisions, and fixes. Telupay will perform monthly system health checks to
ensure optimal system performance.

9       Enhancements and Modifications

During the term of this Agreement, CelluServ may request enhancements or changes
to the scope and functionality of the Telupay Services as described in Schedule
A CelluServ shall provide Telupay with written notification of the requested
change. Telupay will provide CelluServ with a written proposal describing the
specification changes, additional fees, and schedule impact of the proposed
changes. CelluServ prior to Telupay proceeding with these changes must approve
the proposal.

10       Confidentiality

CelluServ will use its best efforts to safeguard and maintain the
confidentiality of proprietary information of Telupay, Telupay Services and
Services Documentation. Likewise, Telupay will maintain the confidentiality of
any such proprietary or confidential information of CelluServ. Both Parties
agree that these obligations of non-disclosure shall survive the expiration,
termination, or rescission of this Agreement.

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11       Termination

This Agreement may be terminated at any time through the Parties' mutual
agreement. If either Party materially breaches this Agreement, the other Party
may give written notice of its desire to terminate and the specific grounds for
termination and, if such default is capable of being cured and the Party in
default fails to cure the default within thirty (30) days of the notice, the
other party may terminate this Agreement. If such default is incapable of cure,
the other party may terminate this Agreement immediately upon written notice of
its desire to terminate. Either Party may terminate this Agreement for cause by
giving written notice of election to terminate. Such termination shall be
effective thirty (30) days from the mailing of written notice. Upon termination,
any Telupay Services hereunder shall be immediately revoked and Telupay
Services, Services Documentation and all affected products and supporting
materials will be returned to Telupay.

12       Limitation of Liability

In the event of either Party's failure to render agreed services, the aggrieved
Party's sole remedy is to cancel this agreement and obtain substitute services ,
thus , in such case the aggrieved Party waives the remedy of specific
performance. In no event shall either Party be liable to the other Party for any
loss or injuries to earnings, profits, or goodwill, or for any incidental,
special, punitive, or consequential damages of any person or entity whether
arising in contract, tort or otherwise, even if either Party has been advised of
the possibility of such damages.

13       Telupay Services Indemnity

If any developed software or portion thereof used for Telupay Services is
adjudged to infringe a United States Copyright, or in Telupay's opinion is
likely to become the subject of such a claim, Telupay shall, at its option,
either (a) procure for CelluServ the right to continue using the developed
software, or (b) modify or replace the developed software to make it
non-infringing. Telupay agrees to indemnify, defend, protect, save and hold
harmless CelluServ and CelluServ's subsidiaries or affiliates under its control,
and their directors, officers , employees and agents, against any and all
losses, liabilities, judgments, awards and costs (including legal fees and
expenses) arising out of or related to any claim, in whole or in part, that
CelluServ's use or possession of the software and other products or services
provided to CelluServ pursuant to this Agreement (the "Telupay Services")
infringes or violates the copyright, trade secret, patent or any other
proprietary right of any third party, including, but not limited to, any claim
that CelluServ negligently failed to conduct a proper patent office search, or
any other appropriate investigation related to Telupay Services. This
contractual obligation of indemnification shall apply even if the third party
alleges or establishes that CelluServ was partially negligent or otherwise at
fault in retaining Telupay's Services, or accepting information, ideas,
concepts, improvements, discoveries , inventions, or forms of expression of
ideas from Telupay, or that CelluServ was negligent in failing to ascertain
whether the information, ideas, concepts, improvements, discoveries ,
inventions, or forms of expression or ideas infringe the rights of third
parties. Telupay shall defend and settle at is sole expense , all suits or
proceedings arising, in whole or in part, out of the foregoing , provided that
CelluServ give Telupay immediate written notice of any such claim of which it
learns.

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14       Employee Recruiting

14.1       Each Party agrees not to employ or otherwise engage the other Party's
employees for a period of two (2) year following any employee's last involvement
in the performance of this Agreement unless agreed upon in writing by both
Parties. Should a Party violate this provision; the hiring Party will pay the
other Party the former employee's annual salary. Such payment shall be the other
Party's sole remedy with respect to the hiring Party. However, such payment does
not restrict the other Party's rights or remedies as they relate to such former
employee.

15       Relationship of Parties

The Parties are independent contractors, and nothing in this Agreement shall be
deemed or construed to create, or have been intended to create a partnership,
joint venture, employment or agency relationship between the parties. Each Party
agrees that it neither has nor will give the appearance or impression of
possessing the legal authority to bind or to commit any other Party in any way
except as provided in this Agreement.

16       Taxes

The Parties each agree to be fully responsible for their respective tax
liabilities, obligations and consequences (including, without limitation,
reporting and payment obligations) arising from the transactions set out in this
Agreement. No Party shall have any liability or obligation to any other Party
for the proper reporting, calculation, assessment or payment of any taxes, fines
or penalties that may be required of or assessed against any other Party.

17       Disputes

Any controversy or claim arising out of or relating to this Agreement , or the
breach hereof, shall be brought in any court having competent jurisdiction on
Guam.

18       Applicable Law

The laws of the Territory of Guam shall govern this Agreement. Both Parties'
representatives warrant their respective authorities to bind Telupay and
CelluServ to this Agreement.

19       Entire agreement

Each Party acknowledges that it has read the Agreement , understands it, and
agrees to be bound by its terms. Both Parties agree that this is the complete
and exclusive statement of the Agreement between the Parties and that this
written Agreement supersedes and replaces all proposals oral or written and all
other communications between the Parties relating to the subject matter of this
Agreement.

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The Parties have executed and delivered this Agreement on the date set out on
the first page of this Agreement.

SIGNATORIES

SIGNED by

/s/ Jose Louis Romero-Salas

JOSE LUIS ROMERO-SALAS
for and on behalf of
TELUPA Y SOLUTIONS LIMITED
Address: First Floor, 17 The Esplanade, St. Helier,, Jersey JE2 3QA
E-Mail: info@telupay.com

SIGNED by

/s/ Ronald J. Schnabel

RONALD J. SCHNABEL
for and on behalf of
CELLUSERV, INC.
Address: 137 Murray Blvd., Suite 2B, Hagåtñia, Guam 96910
E-Mail:RSchnabel@Cognitive-IT.com

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Schedule A: Telupay Electronic Prepaid Load Distribution Software Technical
Description and Specifications

 

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TABLE OF CONTENTS

1.   This Document

2.   Scope

3.   Definition of Terms

4.   Overview

5.   Network Systems Architecture

a.     Network Diagram

b.     Logical Communications Flow Diagram

i.     Retailer/Agent-based purchase

ii.    MBS-based purchase

III.   Web portal-based purchase

6.   Server Hardware requirements

7.   Server application

a.     Back Office modules

b.     E-Pin Distribution

c.     Client Web Portal

d.     Consumer Web Portal

8.   Terminal Application

9.   Agent Applet

10.   Application Program Interfaces

 

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1.       This Document

This document describes the Electronic Prepaid Load Distribution System in
technical detail. These descriptions also include the technical specifications
of the various components of this system.

2.       Scope

This document describes the Electronic Prepaid Load Distribution System and
required interfaces only. Business processes are not covered.

3.       Definition of Terms

Host

- CelluServ's transaction processing servers.

MBS

- Mobile Banking System, is the product that is installed onto the bank's system
which handles the settlements on the bank side.

Retailer

- A retail institution such as a supermarket or department store that sells
Prepaid Load.

Agent

- A retailer of Prepaid Load that is mobile and can transact from any location
utilizing a mobile phone applet.

Applet

- A software program that is loaded on mobile phones for the purpose of selling
Prepaid Load.

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4.       Overview

        Components

Back office modules - used by CelluServ's staff to manage the system.

Retailer/Agent web portal - a website used by retailers/agents to view
transaction reports. It can also be used by retailers to manage clerk logins

Consumer web portal - a website used by consumers to purchase Prepaid Load.

Transaction processing - receives transactions sent by customers' mobile phones
and performs the required processing.

Reporting modules - provides CelluServ with reports on the operations and usage
of the system.

Terminal application - the software loaded onto a Point-of-Sale (POS) terminal
which is used by the retailers for sellin1 Prepaid Load.

Agent Applet - the J2ME-based application that is installed on agents' phones
which is utilized for the selling of Prepaid Load.

        Security features

        CelluServ's facility will provide first-level network protection using
their firewall.

All requests, data or SMS, originating from a mobile phone applet or POS
terminal, are encrypted with AES. The request messages are kept encrypted until
it reaches the server.

All components are required to complete a transaction: registered phone number,
correct Applet key, and correct MPIN. Service will be locked out after a
consecutive number of incorrect MPIN attempts. The agent will have to contact
CelluServ's customer support to have their service re-activated.

Telupay's server does not store bank account information. All account numbers
are stored on the bank's MBS component and CelluServ will only use the ID
numbers assigned by the bank.

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5.       Network Systems Architecture

a.   Network Diagram

[image477.gif]

The core servers will be located within CelluServ's facility. Two sub networks
should be provided by CelluServ, one for production and one for staging and
development. The development server is where all enhancements will be installed
and tested before deploying to production.

CelluServ's facility will be connected to the MNO's via Virtual Private Networks
(VPNs). This connection will carry Prepaid Load requests, as well as CelluServ
requests and messages.

It will also be connected to the settlement bank via a VPN. This connection will
carry settlement request traffic. The same VPN can also be used by the bank for
MBS-based Prepaid Load purchases.

A web hosting provider, which houses the CelluServ Customer web portal, will
connect to the core servers via HTTPS.

POS terminals will connect to the core servers via GPRS. This connection allows
the terminal to log in, and request Prepaid Load from the server.

b.   Logical Communications Flow Diagram

i.   Retailer/Agent Purchase

[image478.gif]

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Communicates when a retailer or agent initiates a request from their device.

For terminals, the request goes through GPRS, which passes through their MNO.
The MNO forwards the request to CelluServ's server. The communication going
through the MNO is transparent to the user, and will appear as a direct Internet
connection.

When CelluServ receives the request, it performs validation on the request. If
the transaction is validated, it will then proceed to send settlement
instructions to the bank.

The bank sends a response back to CelluServ, which in turn returns the
transaction result back to the retailer/agent.

ii.   MBS Purchase

[image479.gif]

For MBS-based purchases, the bank client initiates the transaction. MBS sends
the request to CelluServ. From this point, the communication flow is the same as
described in section i.

iii.   Web Portal Purchase

[image480.gif]

Web Portal purchases are initiated by a customer requesting to purchase Prepaid
Load. The customer selects the desired product and the request is sent to
CelluServ's server to check for product availability. If available, the customer
then proceeds to pay via a payment gateway. Upon confirmation of the payment
gateway, the portal requests the transaction to CelluServ's core server. From
this point, the communication flow is the same as described in section i.

6.       Server Hardware requirements

Production servers

Processor

Quad-Core Intel® Xeon® Processor E5530 (2.40GHz, 8M Cache,1066MHz)

Memory

8GB PC3-10600R 4 x 2GB 2Rank Memory

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Operating System

RedHat Enterprise Linux 5

Storage

SATA Controller, 2 x 450GB Non-Hot Plug 3.5 SAS 15,000rpm Dual Port Hard Drive,
RAID Controller, 16X Half-Height SATA DVD-ROM Optical Drive, PCI-Express Gigabit
Ethernet Adapter

Hardware requirements vary, depending on the expected transaction rate. However,
the minimum requirements are that there should be at least two, to provide fail
over and high availability.

Development server

Processor

Dual-Core Intel® Xeon® Processor E5502 (1.865GHz, 4M Cache, 800MHz)

Memory

4GB PC3-10600E 4x1GB 1Rank Memory

Operating System

RedHat Enterprise Linux 5 or CentOS 5

Storage

SATA Controller, 2x 750GB 3G SATA 7200rpm

RAID Controller, 16X Half-Height SATA DVD-ROM Optical Drive, PCI-Express Gigabit
Ethernet Adapter

Development server specs are less stringent; however it should be powerful
enough that a stress test on that server will be able to estimate the production
hardware's transaction rate.

7.       Server application

a.   Back Office modules

Function

Description

Retailer Management

Allows for the management and input of retailer information and including
tracking the distribution of POS terminals.

Agent management

Allows for the management and input of Agent information and including tracking
the distribution of applets.

MNO

This module is used to manage the MNO list.

Products

This module is used to manage the list of MNO Prepaid products.

Commercial Terms

This module is used to manage the percentage splits between CelluServ, the
settlement Bank, MNO, Retailer or Agent, and Telupay.

Transaction Logs

This module is used to view transactions recorded on the system. It is made
available for research in case of customer inquiries.

E-Load Transaction Server

This module is used to manage all aspects of an e-load transaction as an
interface with the MNO prepaid system and the Banking system to execute a
complete transaction cycle.

Manual Overrides

This module allows CelluServ to push manual transactions, such as a bank
settlement or a Prepaid Load purchase without settlement, in the event a
complete sale cycle did not complete normally.

Reports

Various reports based on selectable timeframes. Included are:

a.     Transaction Reports - Summary and Detail of transactions by MNO, MNO
Product, and Retailer/Agent.

b.     Settlement Report - Summary and detail reports of financial transactions.
This is used for reconciling with corresponding transaction reports.

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b.   Prepaid Load - PIN Distribution

Function

Description

PIN Loader

This module provides the carrier with a web-based GUI where a batch of PINs can
be uploaded using a CSV file.

PIN Dispenser

This module provides a web-service endpoint where a vendor can connect to and
retrieve PINs on demand. The web-service is REST-based.

Vendor Reports

a.     Transaction log - shows individual transactions done on the system. This
report is also used during settlement to reconcile with corresponding bank
transaction reports.

b.     Transaction Summary - Displays summary of transactions/statistics
performed on the system.

c.     Product Inventory Report - shows the number of PINS in the system. It
will display status of each particular product type, the quantities sold and
available.

Carrier Reports

a.     Transaction Log - shows individual transactions done on the system per
carrier. This report is also used during settlement to reconcile with
corresponding bank transaction reports.

b.     Transaction Summary - shows summary of transactions done on the system
per carrier.

c.   Retailer/Agent Web Portal

Function

Description

Terminals

Used by retailers to view the terminals assigned to them. This is a view only
function, and is only available to retailers' logins.

Clerks

Used by retailers to manage logins to the terminals issued to them. Retailers
may add, edit, and/or delete individual logins.

Transaction Log

Used to show transactions made through their account.

Reports

Various reports used to summarize transactions made through their account and
for reconciling transactions against corresponding third-party reports.

d.   Consumer Web Portal

Function

Description

Purchase Load

This module is used to dispense Prepaid Load via the web using credit card
payment.

Reports

a.     Transaction Detail - shows a detailed list of load purchase transactions
done on the web portal. Should be accessible only via a secure login.

b.     Transaction Summary - shows a summary of load purchase transactions done
on the web portal. Should be accessible only via a secure login.

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8.       Terminal application

The terminal application is a compiled application and is loaded onto the
terminal manually.

Function

Description

Purchase

Allows retailers to request purchase of Prepaid Load products including PIN and
Direct Top-up method.

Invoice

Allows retailers to reprint voucher of the last transaction

Reports

Includes:

a.     Transaction summary report; and

b.     Shift report

Update

This updates the terminal's product list.

9.       Agent Applet

The agent Applet is installed onto the agents' phones and can be a J2ME,
Blackberry and/or iPhone-based application.

Function

Description

Purchase

A menu driven application that allows agents to request purchase of Prepaid Load
products.

Transaction history

Displays the last 3 transactions the agent has made.

Change MPIN

This allows the agent to change their MPIN.

10.       Application Program Interfaces (API)

These interfaces provide CelluServ with application connectivity with the bank
MBS and MNO Prepaid system.

Function

Description

MNO API

Provides a direct interface to each MNO's Prepaid system. This gives retailers,
agents, and bank clients the ability to process Direct Top-up transactions .

MBS API

Provides an interface to Telupay's Mobile Banking System installed in financial
institutions for the settlement of all Prepaid Load transactions.

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