How to authenticate EWS Java API

We are using EWS Java API to use the outlook calendar on our Java application. I am having authentication issues on EWS.

I tried the application on the cloud outlook account that's supplied by rackspace and everything worked just fine so I know the credentials are accurate.

Here is the code:

import java.net.URI;
import java.net.URISyntaxException;
import microsoft.exchange.webservices.data.*;

public class TestClass {

    public static void main(String[] args) {
        TestClass obj = new TestClass();
        obj.testMethod();
    }

    public void testMethod() {
        ExchangeService service = new ExchangeService(
                ExchangeVersion.Exchange2007_SP1);
        ExchangeCredentials credentials = new WebCredentials("username",
                "password");

        service.setCredentials(credentials);

        try {
            service.setUrl(new URI("https://domain/EWS/Exchange.asmx"));
        } catch (URISyntaxException e) {
            e.printStackTrace();
        }

        EmailMessage msg;
        try {
            msg = new EmailMessage(service);
            msg.setSubject("hello world");
            msg.setBody(MessageBody
                    .getMessageBodyFromText("Sent using the EWS API"));
            msg.getToRecipients().add("test@test.com");
            msg.send();
        } catch (Exception e) {
            e.printStackTrace();
        }

    }

}

The url for rackspace is:https://connect.emailsrvr.com/EWS/Exchange.asmx When I put the username and password for this account and it works, I see the console spitting out this one:

Apr 05, 2013 1:40:28 PM org.apache.commons.httpclient.auth.AuthChallengeProcessor selectAuthScheme
INFO: NTLM authentication scheme selected

Our client is using ExchangeVersion.Exchange2007_SP1 whereas Rackspace is using ExchangeVersion.Exchange2010 But when I use the credentials(username, password and url) that o