MASTER VENDOR AGREEMENT
                             -----------------------

      THIS MASTER VENDOR AGREEMENT (the "Agreement") is made this 7th day of
January, 2005, by and among KPCCD, INC. ("Purchaser"), NIMESH PATEL, ASHOK
PATEL, and KALA PATEL (collectively, the "Sellers") and PRIMA COMMUNICATIONS,
INC., a New York corporation (the "Master Vendor").

                                   Background:

      A. Sellers and SmartServ Online, Inc. ("SmartServ") are parties to that
certain Stock Purchase Agreement dated as of December 19, 2004 (the "Stock
Purchase Agreement"), whereby Sellers are selling to SmartServ, and SmartServ is
buying from Master Vendor, the Stock (as defined in the Stock Purchase
Agreement) of Purchaser.

      B. Sellers and Purchaser desire that Master Vendor shall sell to
Purchaser, and Purchaser shall buy from Master Vendor, the Inventory
(hereinafter defined), subject to the terms and conditions set forth in this
Agreement.

      C. This Agreement and performance hereunder is a condition precedent to
SmartServ's purchase and the Sellers' sale of such Stock, and but for this
Agreement SmartServ would not purchase and the Sellers would not sell the Stock
and pay or accept the purchase price with respect thereto.

      NOW, THEREFORE, for good and valuable consideration as more fully set
forth herein, and intending to be legally bound, Master Vendor and Purchaser
hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

      1.01. "Forecast" means the forecast of the Requirements during the Term
jointly prepared by Master Vendor and SmartServ, which is attached as Exhibit A.

      1.02. "Inventory" means the international long distance prepaid telephone
calling cards historically sold by Purchaser.

      1.03. "Master Vendor" has the meaning given to that term in the
introduction to this Agreement.

      1.04. "Purchaser" has the meaning given to that term in the introduction
to this Agreement.

      1.05. "Requirements" means the Inventory required by Purchaser at any time
and from time to time subject to the limitations provided herein and in any
event not to exceed the Forecast for any period.

      1.06. "Sellers" has the meaning given to that term in the introduction to
this Agreement.

      1.07. "Stock Purchase Agreement" has the meaning given to that term in the
Background section of this Agreement.

      1.08. Capitalized terms defined within the text of this Agreement shall
have the meanings ascribed to them herein.

<PAGE>

                                   ARTICLE II
                                TERM OF AGREEMENT

      2.01. Term. Subject to Section 2.02 hereof, the term of this Agreement
shall be and this Agreement shall be effective for a period of one (1) year
commencing on the date hereof (the "Term").

      2.02. Early Termination.

            (a) Notwithstanding anything to the contrary set forth herein, if
SmartServ or any majority-owned affiliate thereof at any time during the Term
receives equity financing in excess of $10,000,000 or closes an acquisition of
all or substantially all of the businesses of Telco Group, Inc. and affiliates
(either, a "Significant Event"), this Agreement shall automatically terminate
thirty (30) days after either such event, and Purchaser shall pay all amounts
due Master Vendor hereunder at such time of termination, and shall purchase from
Master Vendor and pay for all Inventory which Master Vendor at such time is
holding for future sale to KPCCD and all Inventory which Master Vendor at such
time has under legally binding order with its suppliers (collectively, the
"Additional Inventory").

            (b) If at the end of nine (9) months from the date hereof a
Significant Event has not occurred, SmartServ shall provide to Master Vendor and
its principals promptly, and in no event more than ten (10) business days after
such date, its business plan for the next twelve (12) months specifically
addressing, among other things, the payment to Master Vendor of all amounts
outstanding under this Agreement. If Master Vendor is not satisfied with the
business plan and the proposed arrangement for payment to it of all amounts then
due hereunder, in its sole and absolute discretion, Master Vendor shall have the
right to terminate this Agreement upon thirty (30) days prior written notice to
KPCCD. Notwithstanding anything to the contrary contained herein, upon the
effective date of such termination, Master Vendor shall be paid all amounts
outstanding hereunder and shall purchase from Master Vendor and pay for the
Additional Inventory.

            (c) This Agreement shall also terminate immediately and all amounts
outstanding hereunder shall be paid in full upon the termination of employment
of Nimesh Patel or Kala Patel for any reason (except upon a voluntary
termination of employment by Nimesh Patel or Kala Patel).

            (d) KPCCD may terminate this Agreement at any time upon five (5)
days prior written notice to Master Vendor, provided, at the effective time of
such termination KPCCD shall pay to Master Vendor all amounts outstanding
hereunder and shall purchase from Master Vendor and pay for the Additional
Inventory.

      2.03. Transition.

            (a) If a Significant Event shall have occurred and Master Vendor
shall have been paid in full for all amounts outstanding hereunder, commencing
at least thirty (30) days prior to expiration of the Term (or upon notice of an
early termination under Section 2.02(d) above, as the case may be) Master Vendor
shall take all necessary steps to transfer to Purchaser the vendor and supplier
relationships of Master Vendor covering the Inventory, and shall transfer all
related written information which may be useful or necessary to Purchaser, in
order to allow Purchaser to possess such relationships after expiration of this
Agreement and purchase its ongoing inventory requirements directly from such
vendors and suppliers.

            (b) If a Significant Event shall not have occurred (except upon an
early termination under Section 2.02(d)), Master Vendor shall only be required
to provide to Purchaser the names and contact information for its vendors and
suppliers and Master Vendor shall not be prohibited from using such information
for its own benefit or the benefit of any of its affiliates.


                                       2
<PAGE>

                                   ARTICLE III
                         SALE AND PURCHASE OF INVENTORY

      3.01. Agreement to Sell and Purchase Inventory. Subject to Section 3.03
hereof, Master Vendor shall sell to Purchaser all of Purchaser's Requirements of
Inventory in accordance with the Forecast.

      3.02. Quantity.

            (a) On or before the date hereof, Sellers and Master Vendor have
provided Purchaser with the Forecast of Inventory that will be needed by
Purchaser during the Term; it being understood that Sellers have owned and
operated Purchaser and Purchaser is relying on Seller's expertise in preparing
the forecast.

            (b) As orders from Purchaser's customers are received by Purchaser,
purchase orders will be placed with Master Vendor by Purchaser, and Master
Vendor will at the same time issue its invoice to Purchaser and deliver the
applicable Inventory to Purchaser.

            (c) To permit Master Vendor to plan for efficient operations,
Purchaser will provide to Master Vendor an updated Forecast of the Requirements
on a rolling monthly basis for the following three (3) month period, which
updated Forecast, to the extent it calls for an increase in the Forecast, shall
be subject to acceptance by Master Vendor. Purchaser shall not be required to
provide such updated Forecast for the first month following the date hereof.
Sellers shall be responsible and take such actions to ensure that Master Vendor
will be able to furnish Purchaser the Inventory to fulfill its obligations
hereunder in accordance with the Forecast.

                                   ARTICLE IV
                            PAYMENT OF PURCHASE PRICE

      4.01. Purchase Price. The purchase price for the Inventory (the "Purchase
Price") shall be an amount equal to the actual price paid by Master Vendor for
the Inventory plus all related costs, fees and expenses relating thereto,
including, without limitation, all shipping charges, taxes and insurance with
respect thereto, and giving effect to all allowances, rebates and discounts
provided to Master Vendor by its suppliers. Upon Purchaser's request, Master
Vendor shall provide Purchaser with copies of invoices and other related
documentation from Master Vendor's suppliers with respect to the foregoing.

      4.02. Time of Payment. Except as provided in Section 4.03, Purchaser shall
pay Master Vendor for Inventory within two (2) business days after Purchaser
receives payment therefor from its customer.

      4.03. Positive Cash Flow. If Purchaser at any time does not have positive
cash flow basis, Purchaser may withhold payments of the Purchase Price in an
amount equal to the deficit in cash flow until such time as Purchaser has
positive cash flow; provided, the maximum dollar amount which may be withheld by
Purchaser hereunder shall be $ 150,000.00. By way of example, if Purchaser owes
Master Vendor $500,000, and has sold and collected $510,000 but has paid
expenses (or has expenses then immediately payable) of $20,000, Purchaser will
be deemed to have negative cash flow and will pay $490,000 to the Master Vendor
and defer the difference of $10,000 until Purchaser ahs sufficient positive cash
flow. Purchaser and Seller shall jointly reconcile cash flow on a weekly basis.

                                       3
<PAGE>

                                   ARTICLE V
                                 DELIVERY TERMS

      5.01. Delivery. Master Vendor shall deliver the Inventory at Purchaser's
place of business against presentation of written invoices therefore.

      5.02. Risk of Loss. Master Vendor assumes all risk of loss or damage to
Inventory until the delivery of the Inventory to Purchaser. Master Vendor, in
its sole discretion and at its sole cost and expense, may maintain insurance on
the Inventory in such amounts as Master Vendor deems necessary.

      5.03. Purchase Orders and Invoices. Purchase orders and corresponding
invoices shall clearly identify the product sold, quantity and item pricing. The
Inventory delivered by Master Vendor shall conform to the quantity and
description set forth on the Purchase Order. The invoice must be delivered to
Purchaser concurrently with the delivery of goods to Purchaser. It is understood
and agreed that Master Vendor and Purchaser will be conducting business from the
same facility located in Jackson Heights, New York.

      5.04. Defective and Non-Conforming Goods; Customer Returns; and Credits.

            5.04.1 Purchaser shall accept returns of defective and
                   non-conforming product from its customers in accordance with
                   the historic practices of KPCCD prior to the date hereof.

            5.04.2 Master Vendor shall accept returns of all such defective and
                   non-conforming products from Purchaser and shall issue a
                   credit for the full purchase price paid therefore.

                                   ARTICLE VI
                    REPRESENTATIONS, WARRANTIES AND COVENANTS

      6.01. Representations, Warranties and Covenants of Master Vendor. Master
Vendor hereby represents, warrants and covenants to Purchaser as follows:

            (a) Title. Master Vendor represents and warrants that it will
transfer to Purchaser good title to the Inventory, subject to no liens, claims,
security interests, pledges, hypothecations or other encumbrances or charges.
Master Vendor represents and warrants that it has full power and legal capacity
to execute and deliver this Agreement and to perform its obligations pursuant to
the terms of this Agreement.

            (b) Conflicts. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby do not, and will not,
violate, conflict with, or result in a breach of, or default under, any
agreement, indenture or other instrument, or any order or decree of any court or
other governmental body, to which Master Vendor is a party or by which Master
Vendor or any of its assets or properties, including without limitation the
Inventory, is bound.

            (c) Warranties. Purchaser will make the warranties to its customers
with respect to the Inventory in accordance with the historic practices of
Purchaser prior to the date hereof, and Master Vendor shall make those same
warranties to Purchaser hereunder with respect to the Inventory.

                                       4
<PAGE>

                                   ARTICLE VII
                                  MISCELLANEOUS

      7.01. Entire Agreement. This Agreement and the Stock Purchase Agreement
and Employment Agreements with Nimesh Patel and Kala Patel constitute the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersede all prior oral or written agreements, arrangements, and
understandings with respect thereto.

      7.02. Amendment. This Agreement may be modified, amended, superseded, or
canceled only by a written instrument signed by each of the parties hereto and
any of the terms, covenants, representations, warranties or conditions hereof
may be waived only by a written instrument executed by the party to be bound by
any such waiver.

      7.03. Severability. If a court of competent jurisdiction holds that there
is a conflict between any provisions hereof and any present or future statute,
law, ordinance, regulation, or other pronouncement having the force of law, the
latter shall prevail, but the provision of this Agreement affected thereby shall
be curtailed and limited only to the extent necessary to bring it within the
requirements of the law, and the remaining provisions of this Agreement shall
remain in full force and effect.

      7.04. Headings. The Article, Section and other headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning and interpretation of this Agreement.

      7.05. Counterparts. This Agreement may be executed in several counterparts
and all such counterparts so executed shall constitute one agreement, binding on
all of the parties hereto.

      7.06. Successors. Neither party may transfer or assign this Agreement or
any part hereof (by operation of law or otherwise) without the prior written
consent of the other party, and any such attempted transfer or assignment
without such consent shall be void. Subject to the preceding sentence, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective permitted assignees or successors in interest. An assigning
party shall continue to be bound to all of its obligations under this Agreement.

      7.07. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed given (i) if delivered
personally or sent by facsimile transmission (and a copy sent by mail), on the
date given, (ii) if delivered by a courier express delivery service, on the date
of delivery, or (iii) if by certified or registered mail, postage prepaid,
return receipt requested, three (3) days after mailing to the parties (or their
successors in interest or their assignees) at the addresses set forth in the
Purchase Agreement, or at such other address as such party may designate by
written notice in the manner aforesaid.

      7.08. Governing Law. This Agreement is governed by and shall be construed
in accordance with the law of the State of New York, without regard to any
principles of conflicts of law.

      7.09. Choice of Venue; Consent to Jurisdiction. In any action brought by
SmartServ in connection with a matter arising out of or relating to this
Agreement, each of the parties irrevocably consents to the exclusive
jurisdiction and venue of the courts of the State of New York, and the United
States District Court for the Eastern District of New York. In any action
brought by any party other than SmartServ in connection with a matter arising
out of or relating to this Agreement, each of the parties irrevocably consents
to the exclusive jurisdiction and venue of the courts of the Commonwealth of
Pennsylvania, and the United States District Court for the Eastern District of
Pennsylvania.

                                       5
<PAGE>

      7.10. Waiver. The waiver by any of the parties, express or implied, of any
right under this Agreement or with respect to any failure to perform under or
breach of this Agreement by the other party, shall not constitute or be deemed a
waiver of any other right under this Agreement or of any other failure to
perform under or breach of this Agreement by the other party, whether of a
similar or dissimilar nature.

      7.11. Force Majeure. Neither party to this Agreement shall be liable to
the other party for any loss, injury, delay, damages or other casualty suffered
or incurred by such other party due to riots, storms, fires, earthquakes,
floods, explosions, acts of God, war, governmental action, insurrection, or any
other similar cause which is beyond the reasonable control of such party. Any
such failure or delay by either party in the performance of any obligations
under this Agreement due to one or more of the foregoing causes shall not be
considered to be a breach of this Agreement. Any such failure or delay under
this section which lasts longer than sixty (60) days shall be grounds for either
party to terminate this Agreement without any penalty.

      7.12. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

                      [SIGNATURES APPEAR ON FOLLOWING PAGE]

                                       6
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date and year first written above.

                                    KPCCD, INC.



                                    By:/s/ Nimesh N. Patel
                                    --------------------------------------------
                                    Name:  Nimesh N. Patel
                                    Title:  Vice President



                                    /s/ Nimesh Patel
                                    --------------------------------------------
                                    NIMESH PATEL



                                    /s/ Ashok Patel
                                    --------------------------------------------
                                    ASHOK PATEL



                                    /s/ Kala Patel
                                    --------------------------------------------
                                    KALA PATEL

GUARANTEED BY:

SMARTSERV ONLINE, INC.


By:/s/ Robert M. Pons
---------------------------
Robert M. Pons, President

                                       7
<PAGE>

                                    Exhibit A

                                    Forecast

                                  See attached.