HUGO INTERNATIONAL TELECOM INC
SB-2, EX-10.10, 2000-08-11
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<PAGE>   1
                                                                   EXHIBIT 10.10

                                     DOLPHIN

                                     SERVICE

                                    PROVIDER

                                    AGREEMENT

                                       NB3

                                    FLEETCOMM

                              MobileRadio Networks

         Dolphin Telecommunications Ltd
         The Crescent
         Jays Close
         Basingstoke

         Hants RG22 4BS

Telephone:        01256 811822
Fax:              01256 474537
<PAGE>   2
                                                      Service Provider Agreement
                                                                    Page 2 of 17



         THIS AGREEMENT dated the 29th day of July, 1998 is made between:



         1.       DOLPHIN TELECOMMUNICATIONS LIMITED whose registered office is
                  The Crescent, Jays Close, Basingstoke, Hants RG22 4BS.
                  (Dolphin)

         2.       NATIONAL BAND THREE LIMITED whose registered office is c/o
                  Edge & Ellison, 18 Southampton Place, London, WC1A 2AJ. (NB3)

         3.       FLEETCOMM LIMITED T/A FLEETCOMM MOBILE RADIO NETWORKS, whose
                  registered office is at The Grange, Rawcliffe Road, Goole,
                  East Yorkshire DN14 6TY. (Fleetcomm)

         4        HUGO INTERNATIONAL LTD whose registered office is at 122a
                  Nelson Road, Whitton, Twickenham Middx Tw2 Fay (Service
                  Provider).

         WHEREAS           NB3 has been granted Licences, as hereinafter
                           defined, by the Secretary of State for Trade and
                           Industry to operate a nation-wide mobile radio
                           telecommunications system as specifically described
                           in such Licences; and

         WHEREAS           Fleetcomm has been granted Licences, as hereinafter
                           defined, by the Secretary of State for Trade and
                           Industry to operate a nation-wide mobile radio
                           telecommunications system as specifically described
                           in such Licences; and

         WHEREAS           The Service Provider wishes to provide to Subscribers
                           (as hereinafter defined) service made available by
                           means of the System (as hereinafter defined); and

         WHEREAS           Dolphin has purchased controlling interests in NB3
                           and Fleetcomm and


         WHEREAS           Dolphin wishes to procure the grant by NB3 and
                           Fleetcomm to the Service Provider of certain
                           non-exclusive rights to promote the use of the
                           Systems within the Coverage Area (as hereinafter
                           defined) and to grant access to the Systems to
                           Subscribers and the Service Provider wishes to accept
                           such grant all on the terms and conditions as follow.
<PAGE>   3
                                                      Service Provider Agreement
                                                                    Page 3 of 17

         NOW IT IS HEREBY AGREED:

1.       DEFINITIONS

                  In this Agreement, the following words and expressions shall
                  (unless the context otherwise requires) have the following
                  meanings:

         1.1      "NETWORK OPERATORS"       NB3 and Fleetcomm and Network
                                            Operator shall mean either of
                                            them.

         1.2      "LICENCES"                Licences granted to the Network
                                            Providers by the Secretary of State
                                            under the Telecommunications Act
                                            1984 ("T.Act Licence) and a Licence
                                            granted to the Network Providers by
                                            the Secretary of State under the
                                            Wireless Telegraphy Act 1949
                                            ("W.T. Act Licence").

         1.3      "SYSTEM"                  the telecommunications system
                                            specified in the T.Act Licence.

         1.4      "T.ACT"                   the Telecommunications Act 1984 and
                                            any regulations thereunder.

         1.5      "W.T.ACT"                 the Wireless Telegraphy Act 1949 and
                                            any regulations thereunder.

         1.6      "SCHEDULE OF CHARGES"     the Schedule of Charges for mobile
                                            radio telecommunications services as
                                            published by the Network Operators
                                            or Dolphin from time to time.

         1.7      "SERVICES"                such mobile radio telecommunications
                                            services as may be available from
                                            time to time by means of the System.

         1.8      "COVERAGE AREA"           the approximate area shown in such
                                            coverage maps as may be published
                                            by the Network Operators or Dolphin
                                            from time to time.
<PAGE>   4
                                                      Service Provider Agreement
                                                                    Page 4 of 17

         1.9      "SUBSCRIBER"              the individual recipient of the
                                            Service Provider's services who is
                                            authorized by the Service Provider
                                            to use a Subscriber Number (as
                                            hereinafter defined).

         1.10     "SUBSCRIBER NUMBER"       such number(s) identified with a
                                            specific piece of Subscriber
                                            Equipment (as hereinafter defined)
                                            to be used by the Subscriber for
                                            the purposes of obtaining the
                                            Services.

         1.11     "SUBSCRIBER EQUIPMENT"    any mobile, transportable, portable
                                            or fixed mobile station apparatus
                                            which is approved under the T.Act
                                            and/or W.T.Act as applicable for use
                                            on and which is connected to the
                                            System.

         1.12     "REGISTRATION"            the process whereby the Network
                                            Operators cause the System to
                                            provide those Services to which a
                                            Subscriber elects to subscribe to a
                                            Subscriber Number. The words
                                            "Register" and "Registered" shall be
                                            construed accordingly.

         1.13     "AGREEMENT"               this agreement made between Dolphin
                                            and the Network Operators and the
                                            Service Provider relating to the
                                            provision of the Services and to
                                            which the Schedules of Charges and
                                            these terms and conditions apply.

         Words in the singular shall include the plural and vice versa where the
         context requires or admits.

         References to any statute or statutory instrument shall include any
         re-enactments, modifications or amendments thereto for the time being
         in force.

2.       DURATION

         This Agreement shall commence on the date hereof and shall continue
         until terminated in accordance with Section 8.

3.       LICENCES

         The Service Provider shall at its own expense obtain in its own name
         any licence required by the T.Act ,and/or the W.T.Act.
<PAGE>   5
                                                      Service Provider Agreement
                                                                    Page 5 of 17

4.       GRANT OF RIGHT

         The Network Operators respectively grant at the direction of Dolphin to
         the Service Provider the non-exclusive right during the term of the
         Agreement to provide Services within the Coverage Area to Subscribers
         by means of the System.

5.       UNDERTAKINGS OF THE SERVICE PROVIDER

         The Service Provider hereby undertakes to Dolphin and to the Network
         Operators and to each of them during the term of this Agreement:

         5.1      To use its best endeavours to promote the Services and not to
                  do anything which would reasonably be regarded as inconsistent
                  with this obligation.

         5.2      To provide its services (including Services) to Subscribers in
                  respect of the System in a proper and efficient manner.

         5.3      To employ such numbers of qualified management, sales and
                  technical personnel as will provide proper demonstration,
                  sales, advisory, repair and other relevant services to
                  Subscribers and potential Subscribers to the System.

         5.4      To comply with the requirements of the United Kingdom
                  legislation and regulations relating to telecommunications;
                  not to use the Services for improper or unlawful purposes; not
                  to cause the quality of the Services to be impaired; not to
                  cause the services of other Service Providers to be impaired;
                  and to impose binding obligations on its Subscribers to comply
                  with such undertakings and so far as it is possible to ensure
                  compliance by its Subscribers therewith.

         5.5      To comply with any code of practice issued pursuant to the
                  Licences and with any requirement under such Licences
                  applicable to Service Providers, in particular any
                  requirements related to confidentiality of Subscriber
                  information.

         5.6      To provide Dolphin or the Network Operators with such
                  information and cooperation that Dolphin or the Network
                  Operators may reasonably require and comply with reasonable
                  directions issued by Dolphin or the Network Operators with
                  respect to the use of the Services.

         5.7      To ensure in respect of all Subscriber Equipment supplied by
                  it that the proposed Subscriber is properly instructed in the
                  operation thereof and to arrange repair, maintenance and after
                  sales service to a standard acceptable to Dolphin or the
                  Network Operators.
<PAGE>   6
                                                      Service Provider Agreement
                                                                    Page 6 of 17

         5.8      As required by the T.Act Licence and as published by Dolphin
                  or the Network Operators within their various Service Provider
                  codes of practice to provide within the terms and conditions
                  of the contract between the Service Provider and its
                  Subscribers, an inexpensive arbitration procedure by which
                  disputes with its Subscribers can be resolved.

         5.9      To characterize as "proposed" or "projected" and not
                  otherwise, to its Subscribers or potential Subscribers, the
                  "proposed" or "projected" System coverage and Services
                  characterized as such by Dolphin or the Network Operators in
                  their publications from time to time.

         5.10     Not to promote any rival service or system in preference to
                  the Services and the System nor to unfairly discount any such
                  service or system so as to promote sales of that service or
                  system in preference to the Services and the System.

         5.11     To accept as Subscribers without unfair discrimination and
                  upon the standard terms and conditions of trade of the Service
                  Provider from time to time, customers who have acquired
                  equipment approved under the T.Act and/or W.T.Act other than
                  from the Service Provider for use in connection with the
                  System.

6.       UNDERTAKINGS BY DOLPHIN AND THE NETWORK OPERATORS

         Dolphin and the Network Operators hereby undertakes to the Service
         Provider during the term of this Agreement:

         6.1      To operate and maintain the System retaining the right without
                  liability to the Service Provider, to modify, expand, improve,
                  suspend, maintain or repair the System or the Services even if
                  this requires suspension of operation of such.

         6.2      To give to the Service Provider non-binding periodic
                  forecasts, proposals and projections of the coverage of the
                  System and the Services to be offered thereon.

         6.3      To provide to the Service Provider such technical advice,
                  assistance and information related to the operation of the
                  system as the Service Provider may reasonably request. Dolphin
                  and the Network Operators receive the right at their sole
                  discretion to make reasonable charges for the provision of
                  such technical advice, assistance and information as it
                  considers to be beyond that which it would normally provide
                  without charge.
<PAGE>   7
                                                      Service Provider Agreement
                                                                    Page 7 of 17



         7.       CHARGES AND PAYMENT

         7.1      The Service Provider shall pay in respect of its Subscribers,
                  whether or not the Service Provider has received payment from
                  its Subscribers, the charges of Dolphin and the Network
                  Operators as set out in the Schedule of Charges as published
                  from time to time corresponding to those Services for which
                  each Subscriber Number is Registered. Dolphin and the Network
                  Operators reserve the right to modify the Schedule of Charges
                  at any time and will provide thirty days notice to the Service
                  Provider of each such modification, provided that this right
                  shall not be exercised unreasonably.

         7.2      Charges shall be incurred in respect of each Subscriber Number
                  from the date of Registration.

         7.3      The charges set out in the Schedule of Charges shall be
                  payable to Dolphin or the Network Operators by the Service
                  Provider at the times and in the manner set out therein.

         7.4      If the Service Provider fails to pay any such charge by the
                  due date for payment then Dolphin or the Network Operators
                  shall have the right to charge interest at the rate of two (2)
                  per cent above the then base rate of National Westminster Bank
                  plc from the date such charge falls due until the actual date
                  of receipt of payment by Dolphin or the Network Operators.

         7.5      Dolphin or the Network Operators may at any time as a
                  condition of the provision or continuance of provision of the
                  Services to the Service Provider require security for payment
                  in the form of bank guarantees or otherwise to the extent
                  Dolphin or the Network Operators at their sole discretion deem
                  appropriate. Failure to provide such security shall be deemed
                  to be a breach of this Agreement by the Service Provider.

8.       TERMINATION

         8.1      This Agreement shall terminate automatically and without
                  notice.

                  (i)      in the event either of the Licences or any other
                           licence in the name of Dolphin or the Network
                           Operators relating to the operation of the System or
                           any modification or replacement thereof expires, is
                           revoked, or is terminated, or

                  (ii)     in the event any of the parties shall become
                           insolvent or if a receiver is appointed in respect of
                           its assets or if any order shall be made or a
<PAGE>   8
                                                      Service Provider Agreement
                                                                    Page 8 of 17

                           resolution passed for its winding up (other than a
                           members voluntary winding up for purposes of
                           amalgamation or reconstruction).

         8.2      The Service Provider shall have the right to terminate this
                  Agreement by prior written notice to Dolphin:

                  (i)      in the event Dolphin or either of the Network
                           Operators shall commit a material breach of any of
                           the obligations on its part to be performed and (in
                           the case of a breach capable of remedy) shall fail to
                           remedy the same within thirty (30) days after notice
                           is given to Dolphin by the Service Provider requiring
                           such remedy, or

                  (ii)     for convenience of the Service Provider upon ninety
                           (90) days prior written notice to Dolphin.

         8.3      Dolphin shall have the right to terminate this Agreement by
                  prior written notice to the Service Provider:

                  (i)      in the event any payment becoming due to Dolphin or
                           either of the Network Operators is in arrears for
                           thirty (30) days after the same shall become payable

                  (ii)     in the event the Service Provider shall commit a
                           material breach of any of the obligations on its part
                           to be performed and (in the case of a breach of
                           remedy) shall fail to remedy the same within thirty
                           (30) days after notice is given to the Service
                           Provider by Dolphin or either of the Network
                           Operators requiring such remedy

                  (iii)    at any other time upon ninety (90) days prior written
                           notice to the Service Provider unless the cumulative
                           number of subscribers connected to the Services by
                           the Service Provider, net of disconnections , exceeds
                           500 in which case the notice period is extended to
                           two (2) years.

9.       RESULT OF TERMINATION

         9.1      Upon termination of this Agreement all monies then due from
                  the Service Provider to Dolphin or the Network Operators shall
                  become immediately due and payable. Additionally the Service
                  Provider shall immediately discontinue any use of the names
                  "Dolphin" or "National Band Three" or "Fleetcomm" and all
                  other trade names, signs, cards notices and other display or
                  advertising matter indicative of Dolphin, NB3 or Fleetcomm or
                  of their business or Services and shall make or cause to be
                  made such changes in trade names, signs, cards, notices and
                  other
<PAGE>   9
                                                      Service Provider Agreement
                                                                    Page 9 of 17

                  display or advertising matter so as to distinguish effectively
                  its business from the subject matter of the Agreement.

         9.2      Upon but not withstanding the termination of this Agreement by
                  Dolphin under Sub-section 8.3(i) or (ii) or by the Service
                  Provider under Section 8.2(ii), the Service Provider shall use
                  its best endeavour to assign its Subscribers (and contracts
                  with Subscribers for the Services) to another Service Provider
                  of Dolphin or any of its subsidiary or associated companies
                  and shall provide eventuality in its agreements with its
                  Subscribers. At any time in the circumstances described in
                  Condition 8 of the T.Act Licence, either before or after
                  termination of this Agreement, Dolphin may write to the
                  Service Providers present and former Subscribers to advise
                  them all other Service Providers of Dolphin or of its
                  subsidiary or associated companies from whom the Subscribers
                  may obtain the Services after termination of the Agreement;
                  and Dolphin or such companies may themselves provide Services
                  to the Subscribers or make arrangements for another Service
                  Provider to provide services to the subscribers in accordance
                  with Condition 8 of the T.Act Licence.

         9.3      Termination of the Agreement shall be without prejudice to any
                  claims or remedies that Dolphin and the Network Operators may
                  have against the Service Provider and vice versa accrued up to
                  the date of termination or available by reason of a breach of
                  Sections 9.2 or 14.

10.      PROVISION OF SERVICE

         10.1     Service shall comprise such Services provided at such times,
                  during such periods, in such circumstances and by such means
                  as Dolphin or the Network Operators may from time to time
                  consider reasonably appropriate.

         10.2     Dolphin and the Network Operators shall use all reasonable
                  endeavours to provide the Services in accordance with any
                  specifications and to any timescales issued by Dolphin or
                  either of the Network Operators from time to time but Dolphin
                  or the Network Operators cannot guarantee that such provision
                  will be fault free nor that it will precisely meet such
                  timescales.

         10.3     Dolphin or either of the Network Operators reserves the right:

                  i.       having given reasonable notice, to change the number
                           allocated to a Service Provider's Subscriber or any
                           other code or number whatsoever allocated by Dolphin
                           or either of the Network Operators from time to time
                           for use in connection with the enjoyment of Service
                           from the System;
<PAGE>   10
                                                      Service Provider Agreement
                                                                   Page 10 of 17

                  ii.      in the event of war or the proclamation of an
                           emergency, to cease summarily to provide Service or
                           to temporarily suspend service to the Service
                           Provider and/or its Subscribers.

         10.4     Dolphin or the Network Operators shall give such instructions
                  concerning the use of Services as they consider appropriate
                  from time to time in the interests of safety, of the quality
                  of Service, of other Service Providers and/or Subscribers or
                  of the System as a whole, and any such instructions shall,
                  while they are in force be deemed to form part of this
                  Agreement. Dolphin or the Network Operators shall take such
                  steps as it considers appropriate to bring such instructions
                  to the notice of the Service Provider and its Subscribers.

11.      ALLOCATION AND REGISTRATION OF SUBSCRIBERS NUMBERS

         11.1     Upon the request of the Service Provider and subject to
                  available System capacity, Dolphin or one of the Network
                  Operators shall allocate a Subscriber Number for a Subscriber
                  and Register that Subscriber Number and the Service relating
                  thereto onto the System as soon as is reasonably practicable.

         11.2     Upon the request of the Service Provider the Network Operators
                  will reserve additional contiguous Subscriber Numbers for a
                  Subscriber to allow for future growth. The Network Operators
                  will reserve additional Subscriber Numbers up to thirty per
                  cent (30%) of the initial allocation without charge, but
                  reserves the right to charge for further Subscriber Numbers
                  reserved.

         11.3     Only those Services which the Service Provider specifically
                  requests shall be included within the registration

         11.4     Within seven working days of the registration of a Subscriber
                  Number, the Service Provider shall provide to Dolphin or the
                  relevant Network Operator information related to the
                  Subscriber using such Subscriber Number in the format of the
                  Service Order Form attached to this Agreement or as modified
                  by Dolphin from time to time. Such information shall not be
                  used by Dolphin or the Network Operators for any purposes
                  other than that related to the operation of the System and
                  compliance with the requirements of the Licences without the
                  prior written consent of the Service Provider.

         11.5     Once allocated by Dolphin or the relevant Network Operator,
                  the Service Provider shall not transfer or reallocate a
                  Subscriber Number between its Subscribers, nor shall it assign
                  or transfer a Subscriber Number to a third party without prior
                  written consent of Dolphin or the relevant
<PAGE>   11
                                                      Service Provider Agreement
                                                                   Page 11 of 17

                  Network Operator which consent shall not be unreasonably
                  withheld. The ownership of Subscriber Numbers allocated to the
                  Service Provider shall at all times be vested in Dolphin or
                  the relevant Network Operator. Under no circumstances may the
                  Service Provider or its Subscribers duplicate a Subscriber
                  Number, registered by Dolphin or either of the Network
                  Operators, for use on more than one piece of Subscriber
                  Equipment at the same time.

12.      CONNECTION OF OTHER TELECOMMUNICATIONS SYSTEMS AND APPARATUS

         12.1     Dolphin or the Network Operators shall at the written request
                  of the Service Provider and subject to the terms and
                  conditions of this Agreement, permit the connection to the
                  System of any telecommunications system or apparatus, which is
                  not a Specified Public Telecommunications System as defined in
                  the T.Act Licence, provided always that:

                  i        such telecommunications system or apparatus shall be
                           shown to comply with the Relevant Standards (as
                           hereinafter defined) or where none exists the
                           relevant Network Operator's standards for the time
                           being in force and shall have any licences and
                           approvals which may be necessary under the provisions
                           of the T.Act,

                  ii       W.T.Act or any other statutory provision for the time
                           being in force; and

                  iii      the Service Provider shall not make any alteration to
                           such telecommunication system, apparatus or signaling
                           protocol once connected to the System without the
                           prior written agreement of Dolphin or the relevant
                           Network Operator.

         12.2     Dolphin or the Network Operators will permit any connection so
                  made to remain until the termination or expiry of this
                  Agreement or until such earlier date as the Service Provider
                  may request except that Dolphin or either of the Network
                  Operators shall have the right summarily to disconnect any
                  such connection where:

                  i.       such telecommunication system or apparatus which
                           conformed at any Relevant Standard or where none
                           exists the Network Operator's standards in force at
                           the time of connection to the System, has ceased to
                           do so and does not conform to any new Relevant
                           Standard or where none exists the Network Operator's
                           standards which may become applicable from time to
                           time; or

                  ii.      such telecommunication system or apparatus is in the
                           opinion of Dolphin or the network operators liable to
                           cause death of, or personal injury to, or damage to
                           the property of Dolphin or the Network Operators and
                           their
<PAGE>   12
                                                      Service Provider Agreement
                                                                   Page 12 of 17

                           respective employees or any person involved in the
                           running of the System or materially to impair the
                           quality of the Service provided by means of the
                           System and the Director General of Telecommunications
                           has not expressed a contrary opinion.

         12.3     In this condition "Relevant Standards" means any standard
                  which may be specified in a licence granted under the W.TAct
                  or T.Act for the running of a system to which this condition
                  applies.

13.      LIMITATION OF LIABILITY

         13.1     For the avoidance of doubt Dolphin and the Network Operators
                  have no obligation or duty or liability in contract, tort, for
                  breach of statutory duty or otherwise beyond that of a duty to
                  exercise reasonable skill and care in the provision of the
                  System.

         13.2     In any event, Dolphin and the Network Operators undertake no
                  liability whatever whether in contract, tort (including
                  negligence or breach of statutory duty) or otherwise for the
                  acts or omissions of other providers of telecommunications
                  services or systems or for fault in or failures of their
                  apparatus.

         13.3     Dolphin and the Network Operators shall not be liable to the
                  Service Provider for any costs, damages or losses incurred or
                  sustained by it arising from operation or any failure
                  whatsoever of the System or failure by Dolphin or the Network
                  Operators to operate or the suspension or non-availability of
                  the System.

         13.4     The Service Provider shall indemnify Dolphin and the Network
                  Operators and hold each of them harmless in respect of any
                  claims, costs, losses or damages incurred by Dolphin or the
                  Network Operators in relation to any claim brought by any
                  Subscriber, third party, or by any customer or employee of the
                  Service Provider in the respect of the operation or failure of
                  operation of any kind of the System or arising directly or
                  indirectly from any breach of, or non-compliance with the
                  terms of this Agreement by the Service Provider or in respect
                  of any damage caused to the System by the Service Provider
                  and/or its Subscribers.

         13.5     In any event Dolphin or the Network Operators liability in
                  contract, tort (including negligence or breach of statutory
                  duty) or otherwise arising by reason of or in connection with
                  this Agreement or howsoever otherwise shall be limited to
                  pound sterling 1,000,000 for any one incident or series of
                  incidents and pound sterling 2,000,000 for any series of
                  incidents related or unrelated in any period of 12 months.

         13.6     Each provision of this condition is to be construed as a
                  separate limitation applying and surviving even if for any
                  reason one or other of the said provisions is
<PAGE>   13
                                                      Service Provider Agreement
                                                                   Page 13 of 17

                  held inapplicable or unreasonable in any circumstance and
                  shall remain in force notwithstanding termination of this
                  Agreement.

         13.7     Nothing in this clause shall exclude or restrict liability for
                  death or personal injury resulting from Dolphin or the Network
                  Operator's own negligence.

14.      CONFIDENTIALITY

         All business or technical information disclosed by either party
         ("disclosing party") to the other ("receiving party") shall be treated
         as confidential unless expressly stated otherwise in writing and shall
         not be disclosed to third parties by the receiving party unless
         required to be disclosed by the terms of government licence or
         regulation under which Dolphin and the Network Operators operate the
         System without prior written consent of the disclosing party, provided
         that information shall not be regarded as confidential if (a) it is
         authorized to be disclosed by the disclosing party or (b) it is already
         known by the receiving party, or (c) it is disclosed by a third party
         without a breach of confidence, or (d) it is in the public domain. This
         undertaking shall survive termination of this Agreement for a period of
         five years from the date of such termination.

15.      INTELLECTUAL PROPERTY RIGHTS

         15.1     The Service Provider shall have the right to promote the
                  Services using the "Dolphin", "National Band Three" and
                  "Fleetcomm" trademarks provided always that the Service
                  Provider shall comply with such guide-lines and directions
                  issued by Dolphin and the Network Operators from time to time
                  in connection with such trademark and enter into such
                  agreements as may from time to time be required by Dolphin and
                  the Network Operators, in order to protect the rights of
                  Dolphin and the Network Operators therein.

         15.2     All intellectual property rights to the System and the
                  Services (whether copyright, patents, registered designs or
                  trademarks include the "National Band Three" trademark or
                  similar rights) shall be retained by Dolphin and the Network
                  Operators and the Service Provider shall acquire no rights
                  therein by reason of providing the Services to Subscribers, by
                  virtue of this Agreement, by principles of estoppel, or
                  otherwise.

         15.3     All intellectual property rights in the Service Provider's
                  services, other than the Services (whether copyright, patents,
                  registered designs, trademarks or similar rights) shall be
                  retained by the Service Provider and Dolphin and the Network
                  Operators shall acquire no rights therein by virtue of this
                  Agreement.
<PAGE>   14
                                                      Service Provider Agreement
                                                                   Page 14 of 17



16.       RELATIONSHIPS

         16.1     This Agreement governs the provision of Services by means of
                  the System to the Service Provider to the exclusion of all
                  other written or verbal representations, statements,
                  understandings, negotiations, proposals or agreements.

         16.2     It is hereby agreed and acknowledged that there shall be no
                  contractual relationship between Dolphin or the Network
                  Operators and the Service Provider's Subscribers by virtue of
                  the registration by the network operators of Subscribers as
                  users of the System and the use of the System by Subscribers
                  except insofar as is necessary for Dolphin and the Network
                  Operators to comply with Condition 8 of the T.Act licence.

         16.3     The Service Provider shall not represent itself to be the
                  agent of Dolphin and the Network Operators for any purpose and
                  shall not pledge the credit of Dolphin and the Network
                  Operators nor incur any other obligations or liabilities or
                  make any promise or representations on behalf of Dolphin and
                  the Network Operators . This Agreement shall not create a
                  partnership between the parties hereto.

         16.4     The Service Provider shall be free to determine the prices and
                  other terms and conditions applicable to the services provided
                  by the Service Provider to its Subscribers in connection with
                  the System, provided that no such term or condition
                  contravenes the conditions of the Agreement, and shall be
                  responsible for the making of charges to Subscribers and
                  collection thereof in respect of such services.

17.      TAXES

         The Service Provider shall be responsible for and shall indemnify
         Dolphin and the Network Operators and each of them against all taxes,
         levies and other payments of a similar nature (and in particular
         against all defaults of the same) imposed by any present or future law
         of the United Kingdom which may become payable (howsoever arising) as a
         result of the Service Provider providing any service to any Subscriber
         dependant on or relating to the Services. Such indemnity shall not
         include the licence fees payable by Dolphin or the Network Operators
         under the Licences or any tax on, or assessed by reference to, the
         profits of Dolphin and the Network Operators.

18.      FORCE MAJEURE

         Neither Dolphin nor the Network Operators nor the Service Provider
         shall be under any liability for any breach of any provision of the
         Agreement or any other failure hereunder if and to the extent that such
         breach or failure is as a result of Acts of God, war (whether
<PAGE>   15
                                                      Service Provider Agreement
                                                                   Page 15 of 17

         declared or not), sabotage, riot, explosion, Government control,
         restrictions or prohibitions or any other Government act or omission
         whether local or national, requirement to act in accordance with the
         Licences, act or default of any supplier, agent, or sub-contractor,
         industrial disputes of any kind, physical obstacles or atmospheric
         conditions or any other cause beyond the reasonable control of any
         party.

19.      WAIVER

         Any concession or waiver allowed by Dolphin or either Network Operator
         to the Service Provider shall only be valid if given by Dolphin or the
         Network Operator in writing and shall neither prevent Dolphin and/or
         the Network Operators from exercising any of its rights nor prejudice
         Dolphin and/or the Network Operators rights to take any subsequent
         action.

20.      NOTICES

         Any notice required or permitted to be given under this Agreement shall
         be in writing and may be given by any means reasonably calculated to
         reach the other party including, without limiting the generality of the
         foregoing, telex or first class post addressed to such party at its
         address as stated in this Agreement or such other address as shall have
         been notified to the first party as being the address for the receipt
         of such notices. Such notice if given by first class post shall be
         deemed to have been delivered not later than the second day after
         posting.

21.      HEADINGS AND INTERPRETATIONS

                  i.       The headings in these terms and conditions shall not
                           be deemed to be part hereof or be taken into
                           consideration in the interpretation of construction
                           hereof or of this Agreement.

                  ii.      If any of the works or provisions of these terms and
                           conditions shall be deemed to be invalid for any
                           reason then they shall be read as if the invalid
                           provisions had to that extent been deleted therefrom
                           and the validity of the remaining provisions of these
                           terms and conditions shall not be affected thereby.

22.      ASSIGNMENT OF AGREEMENT

         The Agreement shall not be assigned either in whole or in part by the
         Service Provider to any third party except with Dolphins prior written
         consent and in any event any purported assignment of the Agreement
         shall not have any force and effect unless such assignment
<PAGE>   16
                                                      Service Provider Agreement
                                                                   Page 16 of 17

         is to another Service Provider which has a subsisting Service Provider
         Agreement with Dolphin and/or any of its subsidiary or associated
         companies.

23.      SUB-CONTRACTING

         The Service Provider shall not sub-contract or delegate the performance
         of any of its obligations under this Agreement without the prior
         written consent of Dolphin Such consent shall not be unreasonably
         withheld where, in the opinion of Dolphin, the sub-contractor or
         delegate is sound and reputable.

24.      VARIATION

         Subject to the notification and publication provisions of the Licence
         Dolphin and the Network Operators shall have the right at any time to
         make amendments or variations to these terms and conditions:

                  i.       of a minor nature which are reasonably appropriate
                           for the provision of the Services

                  ii.      reasonably considered by Dolphin and the Network
                           Operators (after consultation with the Office of
                           Telecommunications) to be made necessary by any
                           provision of the Licences or changes thereof.

         Any amendments or variations referred to above shall take effect
         immediately upon publication by Dolphin and the Network Operators.

25.      GOVERNING LAW

         This Agreement shall be governed by and construed in accordance with
         English Law.
<PAGE>   17
                                                      Service Provider Agreement
                                                                   Page 17 of 17






         IN WITNESS WHEREOF the hands of the duly authorized representative of
         the parties the day, month and year first above written.

         Signed by:              D. W. Foden On Behalf of Hugo International LTD
                                 -----------------------------------------------

         Signature:              /s/  D. W. Foden
                                 -----------------------------------------------

         In the presence of:     Jan O'Hara
                                 -----------------------------------------------

                                 -----------------------------------------------

         Signature of Witness:   /s/  Jan O'Hara
                                 -----------------------------------------------





         Signed by:              /s/ signature unknown
                                 -----------------------------------------------




         For and on behalf of:      Dolphin Telecommunications Limited
                                 -----------------------------------------------



         In the presence of:        Alison Fisk
                                 -----------------------------------------------

                                ------------------------------------------------



         Signature of Witness:      /s/ Alison Fisk
                                 -----------------------------------------------


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