CELLULAR TECHNICAL SERVICES CO INC
CONSIGNMENT AND AGENCY AGREEMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>ex10-1_form8k04082003.txt
<DESCRIPTION>CONSIGNMENT AND AGENCY AGREEMENT
<TEXT>

                                                                    Exhibit 10.1
                                                                    ------------


April 8, 2003


GTS PREPAID, INC.
10 EAST STOW ROAD, SUITE 200
MARLTON, NJ 08053

                  Re:    Consignment and Agency Agreement
                         --------------------------------

Dear Sir/Madam:

          Reference is made to that  certain  Consignment  and Agency  Agreement
(the "Agreement"),  dated December 11, 2002, between Cellular Technical Services
Company, Inc. ("CTS") and GTS Prepaid, Inc. ("GTS"). Unless otherwise defined in
this letter,  all capitalized  terms used in this letter shall have the meanings
ascribed to them in the Agreement.

          Intended  to be  legally  bound,  and  for  other  good  and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, CTS
and GTS hereby agree as follows:

          1. Pursuant to the Agreement,  CTS originally consigned to GTS a total
of  $153,567.89 of Inventory.  Of this amount,  $94,435.35 of Inventory has been
sold by GTS and will be paid to CTS pursuant to the terms set forth in Section 3
of this letter.  The balance of  $59,132.54  of consigned  Inventory is still on
hand as  consigned  Inventory  and,  pursuant  to the terms of Section 6 of this
letter, will either be paid to CTS within 30 days after it has been sold or will
be returned to CTS within 5 days of CTS's written request  therefor.  GTS hereby
confirms and acknowledges  that CTS is and shall remain the sole owner of all of
the Inventory and has retained and shall retain all right, title and interest in
and to the  Inventory.  Upon  the sale of any  Inventory  to a  customer  in the
ordinary course of GTS's business, title to such Inventory so sold shall pass to
such customer upon full payment for such Inventory sold.

          2.  Pursuant  to the  Agreement,  CTS  originally  assigned to GTS for
collection  a total of  $512,797.36  of  Accounts  Receivable.  Of this  amount,
$307,911.65  has been  collected by GTS and $48,862.55 of which has been paid to
CTS. The net amount of $259,049.10 will be paid to CTS pursuant to the terms set
forth in Section 3 of this letter.  CTS hereby  acknowledges and agrees that, as
of the date of this letter, all uncollected  Accounts  Receivable  ($204,885.79)
are owned by and in the possession of CTS. GTS hereby  acknowledges  that it has
no right, title or interest in any such Accounts Receivable.

          3. You  have  requested  and we have  agreed  to  convert  the  unpaid
proceeds of the  consignment  into a loan. The loan is in the sum of $353,484.45
(such  amount  together  with




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GTS Prepaid, Inc.
April 8, 2003
Page 2


interest  as  described  below   hereinafter,   the  "Financed  Amount")  (which
represents the sum of $94,435.35  plus  $259,049.10),  together with interest at
the rate of 15% per annum accruing from March 1, 2003, will be paid to CTS in 49
consecutive weekly installments beginning on the first Tuesday after the date of
this letter  until such amount is paid in full.  The first  payment will include
any accrued but unpaid  interest  incurred since March 1, 2003. An  amortization
schedule  showing the amounts of said weekly  installments is attached hereto as
Schedule "A".

          4.    A. As security for the timely and full payment and  satisfaction
          of the Financed  Amount,  as and when due, GTS hereby  grants to CTS a
          continuing  security  interest in and to all to GTS' right,  title and
          interest in and to any and all of its assets and properties,  wherever
          located,  and any and all  accounts,  books and  record,  instruments,
          documents,  goods,  chattel,  paper,  inventory,  equipment,  contract
          rights, payment intangibles and other general intangibles,  investment
          property,  commercial tort claims, deposit accounts, fixtures, letters
          of credit, letter-of-credit rights, software, financial assets, money,
          supporting  obligations,  litigation  claims and rights and  insurance
          policies  and  rights of GTS  arising  out of or related  directly  or
          indirectly to all such assets and properties, in each case whether now
          existing or hereafter acquired or created,  whether owned beneficially
          or of record and whether  owned  individually,  jointly or  otherwise,
          together with the products and proceeds  thereof  (including,  without
          limitation,  all  insurance  proceeds),  all  supporting  obligations,
          payments and other distributions with respect thereto, and any and all
          substitutions   for  or   replacements   of   any  of  the   foregoing
          (collectively,  the "COLLATERAL").  In connection herewith, GTS hereby
          irrevocably authorizes CTS in its ----------  discretion:  (i) to file
          without  the  signature  of GTS  any  and  all  financing  statements,
          modifications and continuations  with respect to the Collateral;  (ii)
          to sign any such statement,  modification or continuation on behalf of
          GTS if CTS  determines  such  signature  necessary or desirable  under
          applicable  law;  and  (iii) to file a carbon,  photographic  or other
          reproduction  of  any  financing  statement  or  modification  of  any
          financing  statement or  modification  if CTS  determines  such filing
          necessary or desirable  under  applicable law. GTS shall reimburse CTS
          on demand for all costs and expense  incurred in  connection  with the
          preparation  and filing of any such  document.  GTS hereby  represents
          that the foregoing  security  interest and lien created in favor of it
          hereby is subject only to the  security  interest and lien in favor of
          Wilmington  Trust Company.  Upon the full payment and  satisfaction in
          full of the Financed Amount upon the request,  and at the expense,  of
          GTS,  CTS  will  authorize  the  filing  of any  and  all  termination
          statements  reasonably  necessary  to  effectuate  the  release of its
          security interest and lien created hereby,  provided that GTS shall be
          solely  responsible for the filing of all such termination  statements
          in any applicable jurisdictions.



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GTS Prepaid, Inc.
April 8, 2003
Page 3


          B.    Upon the failure of GTS to make any payments,  or to perform any
          of its obligations,  when due hereunder,  CTS may (i) demand immediate
          payment  of all  obligations  hereunder,  (ii)  take any  action  with
          respect to the offer,  sale or other  disposition of one or more items
          of Collateral  permitted under  applicable law, and  (iii)exercise  or
          enforce any and all of the rights,  powers,  privileges,  remedies and
          interests afforded to a secured party and/or seller of goods under any
          and all  provisions of applicable  law (including the UCC). If the net
          proceeds (after expenses)  received with respect to and in liquidation
          of the Collateral  shall be  insufficient to fully pay and satisfy all
          of GTS's  obligations  hereunder,  GTS acknowledges and agrees that it
          shall remain  liable for any  deficiency.  GTS shall  reimburse CTS on
          demand for any and all costs and expenses  incurred in connection with
          the  enforcement  or  adjudication  of this  Agreement or the exercise
          and/or enforcement of any of the rights, power,  privileges,  remedies
          and  interest  of  CTS  under  this  Agreement,   including   (without
          limitation)  the  disbursement,  expenses  and fees of  attorneys  and
          others.

          5. GTS may prepay,  in whole or in part, the principal  balance of the
Financed  Amount at any time or from time to time without premium or penalty but
with interest on the amount prepaid to the date of prepayment.

          6. During the eight-week period following the date hereof,  GTS agrees
to use commercially reasonable efforts to sell for cash the remaining $59,132.54
of  consigned  Inventory  on hand.  The  proceeds  of any and all  sales of such
consigned Inventory,  whether or not in accordance with this Agreement,  are and
shall be and remain the property of CTS and shall be held in trust for CTS until
delivery to CTS in accordance  with the provisions of paragraphs 6 and 7 hereof.
Within  5 days  after  its  receipt  of any  cash  proceeds  of the sale of such
Inventory,  but in no event later than 30 days after the sale of such  Inventory
regardless of when GTS receives the cash  proceeds from such sale,  GTS will pay
an amount  equal to such cash  proceeds to CTS. In the event of a credit for any
such Inventory,  GTS will, within 10 days of receiving replacement products from
the vendor granting such credit, pay to CTS the dollar amount of such credit. If
at the end of such eight-week  period,  either the Inventory  remains unsold or,
despite GTS's commercially reasonable efforts, a credit has not been granted and
used by GTS, GTS will return all remaining Inventory to CTS. GTS hereby confirms
and ratifies the security interest and lien granted by it in favor of CTS in and
to any and all rights of GTS in such Inventory  pursuant to the  Agreement.  GTS
hereby  represents  and  warrants  that  such  security  interest  and lien is a
continuing,  first priority,  perfected  security  interest  subject to no other
security interests, liens or other encumbrances.

          7. All payments hereunder shall be made by GTS to CTS at the office of
CTS at 20 East Sunrise Highway,  Suite 201, Valley Stream,  NY 11581, or at such
other place as CTS may designate to GTS in writing.



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GTS Prepaid, Inc.
April 8, 2003
Page 4


          8.  Except for the  obligations  provided  herein  each of the parties
hereto hereby fully releases the other party hereto from any and all liabilities
or  obligations  either  party may have had to the other party prior to the date
hereof.

          9. Except as otherwise provided herein each of the parties hereto will
bear its own respective fees and expenses  (including,  without limitation,  all
legal fees and expenses)  related to the execution,  delivery and performance of
this letter.

          10. This  Agreement  shall be governed by and  construed in accordance
with the laws of the State of New Jersey without giving effect to its principles
of  conflicts  of law.  The  parties  agree that any action  hereunder  shall be
brought  in the  federal  or state  courts  located  in New Jersey and waive any
defense of forum non conveniens. This Agreement may be executed in counterparts,
each  of  which  shall  be an  original,  but  all of  such  counterparts  shall
constitute one and the same  instrument.  Each provision of this Agreement shall
be severable  from every other  provision of this  Agreement  for the purpose of
determining the legal  enforceability of any specific provision.  This Agreement
expresses  the entire  understanding  of the parties with respect to the subject
matter  hereof.  All terms defined in the UCC, and not otherwise  defined herein
shall have the meanings  respectively  assigned to them in the UCC. For purposes
hereof,  "UCC" shall mean the Uniform Commercial Code, as in effect from time or
time in the State of New Jersey or any other applicable jurisdiction. No failure
to delay by CTS in exercising any right, power or remedy under this letter shall
operate as a waiver  thereof;  nor shall any single or partial  exercise  of any
other right, power or remedy hereunder. No amendment, modification,  termination
or waiver of any  provision  hereunder or consent to any  departure by GTS there
from or release of any security  shall be effective  unless the same shall be in
writing and signed by CTS, and then such waiver  shall be effective  only in the
specific  instance  and for the specific  purpose for which  given.  This letter
shall  be  binding  upon  and  inure  to the  benefit  of GTS and CTS and  their
respective successors and assigns,  except that the parties may not assign their
rights hereunder without the prior written consent of the other party.

The parties waive any right to trial by jury in any action or  proceeding  based
on or pertaining to this letter or any other agreement  between the parties with
respect to the subject matter hereof.




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GTS Prepaid, Inc.
April 8, 2003
Page 5


          If you are in  agreement  with the  foregoing,  please so  indicate by
signing in the space  provided  below,  whereupon  this  letter  shall  become a
legally binding agreement.

                                              Very truly yours,

                                              CELLULAR TECHNICAL SERVICES
                                              COMPANY, INC.


                                              By: /s/ Stephen Katz
                                                  ------------------------------
                                                   Name:  Stephen Katz
                                                   Title: Chairman and Chief
                                                          Executive Officer



ACCEPTED AND AGREED TO:


GTS PREPAID, INC.


By: /s/ Randy Cherkas
    ----------------------
     Name: Randy Cherkas
     Title:   President








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