Exhibit 4.10


 


THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY HAVE BEEN ACQUIRED SOLELY FOR IN
VESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE DISTRIBUTED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL, SATISFACTORY
IN FORM AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND ANY APPLICABLE STATE
SECURITIES LAWS.


 


WARRANT


 


	
  Warrant
  No. Banking Agreement/CityNet 1

  	
   

  	
  Dated: July 23, 2003

  



 


To Purchase Up to 1,000,000 Shares of Common Stock of


 


Universal Access Global Holdings Inc. (the “Company”)


 


1.                                       Number of Shares; Exercise Price; Term. This certifies that, in consideration for
services provided under the Financial Advisory/Investment Banking Agreement
dated December 13, 2002, by and between the Company and Broadmark Capital,
LLC, Broadmark Capital, LLC and its successors and assigns (in each case, the
“Holder”) is entitled, upon the terms and subject to the conditions hereinafter
set forth, at any time after the date hereof and at or prior to 11:59 p.m.
Central Time, on July 22, 2007 (the “Expiration Time”), but not
thereafter, to acquire from the Company, in whole or in part, from time to
time, up to 1,000,000 fully paid and nonassessable shares (the “Shares”) of
Common Stock, par value $0.01 per share of the Company (“Common Stock”), at a
purchase price of $0.22 per Share (the “Exercise Price”). The number of Shares,
type of security and Exercise Price are subject to adjustment as provided
herein, and all references to “Common Stock” and “Exercise Price” herein shall
be deemed to include any such adjustment or series of adjustments.


 


2.                                       Exercise of Warrant.


 


(a)                                  This
Warrant may be exercised by the Holder, in whole or in part, at any time, or
from time to time, prior to the Expiration Time, by the surrender of this
Warrant and the Notice of Exercise annexed hereto, each duly completed and
executed on behalf of the Holder, at the office of the Company in Chicago,
Illinois, (or such other office or agency of the Company as it may designate by
notice in writing to the Holder at the address of the Holder appearing on the
books of the Company), and upon payment of the Exercise Price for the Shares
thereby purchased (by cash, certified or cashier’s check or wire transfer
payable to the order of the Company, at the time of exercise in an amount equal
to the purchase price of the Shares thereby purchased). Thereupon, the Holder,
as holder of this Warrant, shall be entitled to receive from the Company a
stock certificate in proper form representing the number of Shares so purchased,
and a new Warrant in substantially identical form and dated as of such exercise
for the purchase of that number of Shares equal to the difference, if any,
between the number of Shares subject hereto and the number of Shares as to
which this Warrant is so exercised.


 


(b)                                 Cashless Exercise. Notwithstanding
any provisions in this Warrant to the contrary, if the fair market value of one
share of Common Stock is greater than the Exercise Price (at the


 

















 


date of
calculation as set forth below), in lieu of exercising this Warrant for cash,
the Holder may elect to receive shares equal to the value (as determined below)
of this Warrant (or the portion of the Warrant being canceled) by surrender of
this Warrant at the principal office of the Company together with the properly
endorsed Notice of Exercise and notice of such election in which event the
Company shall issue to the Holder a number of shares of Common Stock computed
using the following formula:


 


X = Y
(A-B)


A


 


Where:


 


X =                             the number of shares of Common Stock to be
issued to the Holder


 


Y =                              the number of shares of Common Stock
purchasable under the Warrant or, if only a portion of the Warrant is being
exercised, the number of Shares of Common Stock being purchased under Warrant


 


A =                            the “fair market value” (as defined below) of
one share of Common Stock


 


B =                              the Exercise Price per share


 


For
purposes of the above calculation, “fair market value” of one share of Common
Stock shall be determined in accordance with one of the following methods:


 


(i)                                     If
the Company’s Common Stock is listed on a national securities exchange or
included for quotation on the Nasdaq Stock Market (whether the Nasdaq National
Market or Nasdaq SmallCap Market), the closing price of the Common Stock on
such exchange or market on the date immediately preceding the date of exercise
of this Warrant;


 


(ii)                                  If the Company’s
Common Stock is actively traded on the over-the-counter market or an equivalent
market, the fair market value shall be the last reported sale price of the
Common Stock from the date immediately preceding the date of exercise of this
Warrant; or


 


(iii)                               If the Company’s Common
Stock is not listed on a national securities exchange or included for quotation
on the Nasdaq Stock Market, actively traded on the over-the-counter market or
otherwise admitted to unlisted trading privileges and closing prices are not so
reported, the current fair market value shall be determined by the Company’s
board of directors in good faith.


 


3.                                       Issuance of Shares. Certificates for Shares purchased hereunder
shall be delivered to the Holder within a reasonable period of time after the
date on which this Warrant shall have been exercised in accordance with the
terms hereof. All Shares that may be issued upon the exercise of this Warrant
shall, upon such exercise, be duly and validly authorized and issued, fully
paid and nonassessable and free from all taxes, liens and charges in respect of
the issuance thereof (other than liens or charges created by or imposed upon
the Holder as the holder of the Warrant or taxes in respect of any transfer
occurring contemporaneously or otherwise specified herein). The Company agrees
that the Shares so issued shall be, and shall for all purposes be deemed to
have been, issued to the Holder


 


2

















 


as the record owner of such Shares as of the close of business on the
date on which this Warrant shall have been exercised or converted in accordance
with the terms hereof.


 


4.                                       No Fractional Shares or Scrip. No fractional Shares or scrip representing
fractional Shares shall be issued upon the exercise of this Warrant. In lieu of
any fractional Share to which the Holder would otherwise be entitled, the
Holder shall be entitled, at its option, to receive either (i) a cash payment
equal to the excess of fair market value for such fractional Share above the
Exercise Price for such fractional share (as determined in good faith by the
Company) or (ii) a whole Share if the Holder tenders the Exercise Price for one
whole Share.


 


5.                                       No Rights as Shareholders. This Warrant does not entitle the Holder
hereof to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof.


 


6.                                       Charges, Taxes and Expenses. Certificates for Shares issued upon
exercise of this Warrant shall be issued in the name of the Holder. Issuance of
certificates for Shares upon the exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax or other incidental expense
in respect of the issuance of such certificates, all of which taxes and
expenses shall be paid by the Company.


 


7.                                       Registration Rights. The Holder shall be entitled to the
following registration rights:


 


(a)                                  Piggyback Registration. If at any
time the Company proposes to file a registration statement under the Securities
Act of 1933, as amended (the “Securities Act”), with respect to a public
offering of the Company’s Common Stock (other than a registration statement
relating to the sale of securities to participants in a dividend reinvestment
plan, a registration on Form S-4 or similar or successor form thereto relating
to a business combination or similar transaction permitted to be registered on
such Form S-4, and a registration on Form S-8 or similar or successor form
thereto relating to the sale of securities to participants in a stock or
employee benefit plan) while any Shares are outstanding, the Company shall give
the Holder at least thirty (30) days’ prior written notice of the filing of
such registration statement (a “Piggyback Registration”) at the address that
appears on the records of the Company. 
The notice shall offer to include in the registration statement any and
all of the Registrable Shares (as defined below).  The Holder shall have until the 20th day after receipt
of such notice to send to the Company a written request that shall specify the
number of Registrable Shares which the Holder desires to have included in the
registration statement. Subject to Section 7(b), the Company shall
include in the filing for registration under the Act, the aggregate number of
Registrable Shares which the Holder requested to be included in such filing
concurrently with the registration of such other securities, all to the extent
required to permit the public offering and sale of the Registrable Shares. The
Company will use its reasonable efforts through its officers, directors,
auditors, and counsel to cause such registration statement to become effective
as promptly as reasonably practicable; provided, however, that the number of
Registrable Shares that may be registered pursuant to this Section 7(a) on any such
registration statement involving an underwriting shall be subject to those
reductions determined to be necessary by the underwriter of the offering
pursuant to Section 7(b).


 


“Registrable Shares” shall mean (i) any shares of Common Stock issuable
to the Holder upon the exercise of all or any portion of the Warrant, and (ii)
any other securities issued or issuable with respect to any such shares
described in clause (i) above by way of a stock


 


3

















 


dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation, sale of assets or other
reorganization, provided, however, that shares of Common Stock shall cease to
be Registrable Shares at the time that (i) such shares have been sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction, or (ii) such shares have been sold in a transaction exempt
from the registration and prospectus delivery requirements of the Securities
Act so that all transfer restrictions and restrictive legends with respect to
such shares are removed upon the consummation of such sale.


 


(b)                                 Underwritten Offering. If any Piggyback
Registration involves an underwritten offering, the Company shall so advise the
Holder as part of the notice given pursuant to Section 7(a). 
The Company shall (together with all other holders of Common Stock
proposing to distribute their securities through such underwriting), if
requested by the underwriter, enter into an underwriting agreement in customary
form with a managing underwriter selected for such underwriting by the Company. Notwithstanding any other
provision of this Section 7(b),
if the managing underwriter advises the Company in writing that the total
amount of securities requested to be included in such Piggyback Registration
exceeds the amount which can be sold in (or during the time of) such offering
without delaying or jeopardizing the success of the offering (including the
price per share of the securities to be sold), then the amount of securities to
be offered for the account of the Company and of any holder of securities
(including the Holder) shall be reduced to a number deemed satisfactory by such
managing underwriter or underwriters, provided, that the securities to be excluded
shall be determined in the following sequence:


 


(i)                                     in
the event the offering was proposed by or for the account of holders of
securities of the Company (the “Proposing Holders”): (A) first, securities
proposed to be offered for the account of the Company; (B) second, Registrable
Shares requested to be registered by the Holder and securities requested to be
registered by any other holders of securities of the Company other than
Proposing Holders or holders of “Registrable Shares” as defined in that
Registration Rights Agreement dated July 23, 2003 by and among the
Company, CityNet Telecommunications, Inc. and other stockholders (the “CityNet
Registrable Shares” and the holders of such shares shall be the “CityNet
Holders”), on a pro rata basis (based upon the number of shares of Common
Stock beneficially held by each such holder); (C) third, CityNet Registrable
Shares held by the CityNet Holders, on a pro rata basis (based upon the number of
CityNet Registrable Shares beneficially held by each such holder); and (D)
fourth, securities held by the Proposing Holders, on a pro rata basis (based upon
the number or of shares of Common Stock beneficially held by each such holder);
and


 


(ii)                                  in
the event the offering was proposed by or for the account of the Company: (A)
first, Registrable Shares requested to be registered by the Holder and
securities requested to be registered by any other holders of securities of the
Company other than CityNet Registrable Shares held by the CityNet Holders, on a
pro rata
basis (based upon the number of shares of Common Stock beneficially held by
each such holder); (B) second, CityNet Registrable Shares held by the CityNet
Holders on a pro rata basis (based upon the number of CityNet Registrable
Shares beneficially held by each such holder); and (C) third, securities
proposed to be offered for the account of the Company.


 


4

















 


(c)                                  No Liability. Nothing in this
Agreement shall create any liability on the part of the Company to the Holder
if the Company in its sole discretion should decide not to file a Registration
Statement proposed to be filed pursuant to Section 7(a) hereof or to withdraw such Registration
Statement subsequent to its filing, regardless of any action whatsoever that
the Holder may have taken, whether as a result of the issuance by the Company
of any notice hereunder or otherwise.


 


(d)                                 Expenses of Registration. All
Registration Expenses (defined below) incurred in connection with a Piggyback
Registration shall be borne by the Company. All Selling Expenses (defined
below) incurred in connection with a Piggyback Registration shall be borne by
Holder for the Registrable Shares so registered. For purposes of this Section 7(d):


 


(i)                                     “Registration
Expenses” shall mean all expenses incurred by the Company in connection with a
Piggyback Registration, including, without limitation, (i) all registration and
filing fees, including NASD filing fees, (ii) all fees and expenses of
compliance with securities or Blue Sky laws, (iii) printing expenses, (iv)
messenger, telephone and delivery expenses, (v) fees and disbursements of
counsel for the Company, (vi) fees and disbursements of all independent
certified public accountants of the Company (including expenses of any “cold
comfort” letters required in connection with this Warrant) and all other
persons retained by the Company in connection with such Piggyback Registration,
and (vii) fees and disbursements of underwriters customarily paid by the
issuers or sellers of securities.


 


(ii)                                  “Selling
Expenses” shall mean all underwriting discounts and selling commissions
applicable to the sale of the Registrable Shares in the Piggyback Registration
and all fees and disbursements of any special counsel (other than the Company’s
regular counsel) of the Holder.


 


(e)                                  Qualification for sale. In
connection with a Piggyback Registration, the Company shall use its reasonable
best efforts to cause the Registrable Shares so registered to be registered or
qualified for sale under the securities or blue sky laws of such jurisdictions
as the Holder may reasonably request; provided, however, that the Company shall
not be required to qualify to do business in any state by reason of this Section 7(e) in which it is
not otherwise required to qualify to do business.


 


(f)                                    Effectiveness. In connection with
a Piggyback Registration, the Company shall prepare and file with the
Securities and Exchange Commission (the “Commission”) a registration statement
with respect to the Registrable Shares requested to be registered and use its
reasonable best efforts to cause such registration statement to become
effective, and shall keep effective any Piggyback Registration and shall from
time to time amend or supplement each applicable registration statement,
preliminary prospectus, final prospectus, application, document and
communication for such period of time as shall be required to permit Holder to
complete the offer and sale of the Registrable Shares covered thereby.  The Company shall in no event be required to
keep any such Piggyback Registration in effect for more than twelve (12) months
from the initial effective date of the Piggyback Registration; provided,
however, that, if during the twelve (12) month period of
effectiveness of the registration statement, the Company gives to the Holder a
Blackout Notice pursuant to Section 7(g),
the Company shall extend the effectiveness of 


 


5

















 


the registration statement for the same time
period as that set forth in the Blackout Notice.


 


(g)                                 Blackout Rights. Following the
effective date of any registration statement filed pursuant to Section 7(a), the Company
shall be entitled, from time to time, to notify the Holder to discontinue
offers or sales of shares pursuant to such registration statement for
Registrable Shares for the period of time stated in the written notice (the
“Blackout Notice”), if the Company determines, in its reasonable business
judgment, that the disclosure required in connection with the offers and sales
of the Registrable Shares could materially damage the Company’s ability to
successfully complete an acquisition, corporate reorganization, securities
offering or other voluntary transaction undertaken by the Company (which
information the Company would not be required to disclose at such time other
than in connection with the Holder’s registration statement) that is material
to the Company and its subsidiaries taken as a whole.  The time period for which the Holder must discontinue offers or
sales of shares pursuant to a Blackout Notice shall be for any period the
Company reasonably believes is necessary, and if, the Company is unable to
determine the duration of such period at the time the Blackout Notice is
issued, the Blackout Notice may state that the period extends “until the Holder
is otherwise notified by the Company;” provided that the Blackout Notice may
not exceed more than one hundred eighty (180) consecutive days within any
period of three hundred sixty-five (365) consecutive days.  The Blackout Notice shall be signed by an
authorized officer of the Company and shall certify the Company’s
determination.  The Holder agrees that
upon receipt of a Blackout Notice it shall discontinue offers or sales of
Registrable Shares pursuant to any such registration statement for the period
of time stated in the Blackout Notice.


 


(h)                                 Distribution of Registration Statement.
In connection with Piggyback Registration, the Company shall promptly furnish
to the Holder such number of copies of the registration statement and of each
amendment and supplement thereto (in each case, including all exhibits), such
reasonable number of copies of each prospectus contained in such registration
statement and each supplement or amendment thereto (including each preliminary
prospectus), all of which shall conform to the requirements of the Act and the
rules and regulations thereunder, and such other documents, as the Holder may
reasonably request to facilitate the disposition of the Registrable Shares
included in such registration.


 


(i)                                     Notification of Effectiveness.  The Company shall notify the Holder promptly
when such registration statement has become effective or a supplement to any
prospectus forming a part of such registration statement has been filed.


 


(j)                                     Other Notifications. The Company
shall promptly notify the Holder at any time when the prospectus included in
the Piggyback Registration, as then in effect, would include an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing, and at the reasonable request of
the Holder prepare and furnish to it such number of copies of a supplement to
or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Shares, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were made.


 


6

















 


(k)                                  Indemnification
by Company. Subject to the conditions set forth below, the Company agrees
to indemnify and hold harmless the Holder from and against any and all loss,
liability, charge, claim, damage, and expense whatsoever (which shall include,
for all purposes of this Section 7(k), but not be limited to,
reasonable attorneys’ fees and any and all reasonable expenses whatsoever
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation), as and when incurred, arising out
of, based upon, or in connection with any untrue statement or alleged untrue
statement of a material fact contained (A) in any registration statement,
preliminary prospectus, or final prospectus (as from time to time amended and
supplemented), or any amendment or supplement thereto, relating to the sale of
any of the Registrable Shares or (B) in any application or other document or
communication (in this Section 7(k) collectively called an
“Application”) executed by or on behalf of the Company and based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to register or qualify any of the Registrable Shares under the Act or
blue sky laws thereof or filed with the Commission or any securities exchange;
or any omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements made therein not misleading,
unless such statement or omission was made in reliance upon and in conformity
with written information furnished to the Company by or on behalf of the Holder
for inclusion in any registration statement, preliminary prospectus, or final
prospectus, or any amendment or supplement thereto, or in any Application, as
the case may be.


 


If any action is brought against the Holder in respect of which
indemnity may be sought against the Company pursuant to the foregoing
paragraph, the Holder shall promptly notify the Company in writing of the institution
of such action (the failure to notify the Company within a reasonable time of
the commencement of any such action, to the extent prejudicial to the Company’s
ability to defend such action, shall relieve the Company of liability to the
Holder pursuant to this Section 7(k) and the Company shall promptly
assume the defense of such action, including the employment of counsel,
provided that the Holder shall have the right to employ his or her own counsel
in any such case, but the fees and expenses of such counsel shall be at the
expense of the Holder unless the employment of such counsel shall have been
authorized in writing by the Company in connection with the defense of such
action or the Holder shall have reasonably concluded that there may be one or
more legal defenses available to him or her which are different from or
additional to those available to the Company, in any of which events such fees
and expenses shall be borne by the Company and the Company shall not have the
right to direct the defense of such action on behalf of the Holder.
Notwithstanding anything in this Section 7(k) to the contrary, the
Company shall not be liable for any settlement of any such claim or action
effected without its written consent. 
The Company shall not, without the prior written consent of the Holder,
settle or compromise any action, or permit a default or consent to the entry of
judgment in or otherwise seek to terminate any pending or threatened action, in
respective of which indemnity may be sought hereunder, unless such settlement,
compromise, consent, or termination includes an unconditional release of the
Holder from all liability in respect of such action. The Company agrees
promptly to notify the Holder of the commencement of any litigation or
proceedings against the Company or any of its officers or directors in
connection with the sale of any Registrable Shares or any preliminary
prospectus, prospectus, registration statement, or amendment or supplement
thereto, or any application relating to any sale of any Registrable Shares.


 


7

















 


(l)                                     Indemnification by Holder. The
Holder agrees to indemnify and hold harmless the Company, each director of the
Company, each officer of the Company who shall have signed any registration
statement covering Registrable Shares held by the Holder, to the same extent as
the foregoing indemnity from the Company to the Holder in Section 7(k), but only with
respect to statements or omissions, if any, made in any registration statement,
preliminary prospectus, or final prospectus (as from time to time amended and
supplemented), or any amendment or supplement thereto, or in any Application,
in reliance upon and in conformity with written information furnished to the
Company with respect to the Holder by or on behalf of the Holder, for inclusion
in any such registration statement, preliminary prospectus, or final
prospectus, or any amendment or supplement thereto, or in any application, as
the case may be.  If any action shall be
brought against the Company or any other person so indemnified based on any
such registration statement, preliminary prospectus, or final prospectus or any
amendment or supplement thereto, or in any Application, and in respect of which
indemnity may be sought against the Holder pursuant to this Section 7(l), the Holder
shall have the rights and duties given to the Company, and the Company and each
other person so indemnified shall have the rights and duties given to the
Holder, by the provisions of Section 7(l).


 


(m)                               Termination of Registration Rights.
The covenants set forth in Section 7
of this Warrant shall terminate on the first date on which no Registrable
Shares remain outstanding.


 


(n)                                 Lock-Up. The Holder hereby agrees
that, if so requested by the Company or any representative of the underwriters
in connection with any registration of the offering of any securities of the
Company under the Act, the Holder shall not sell or otherwise transfer any
Registrable Shares during the same period requested in writing by the managing
underwriter and agreed to in writing by the Company and all of the executive
officers, directors and greater than ten percent stockholders of the Company
(the “Market Standoff Period”).  The
Company may impose stop-transfer instructions with respect to Shares subject to
the foregoing restrictions until the end of such Market Standoff Period.


 


8.                                       Exchange and Registry of Warrant. This Warrant is exchangeable, upon the
surrender hereof by the Holder as the registered holder at the office or agency
of the Company referenced in Section 2 above, for a new Warrant in
substantially identical form and dated as of such exchange. The Company shall
maintain at the office or agency referenced in Section 2 above, a
registry showing the name and address of the Holder as the registered holder of
this Warrant. This Warrant may be surrendered for exchange or exercise, in
accordance with its terms, at the office of the Company, and the Company shall
be entitled to rely in all respects, prior to written notice to the contrary,
upon such registry.


 


9.                                       Loss, Theft, Destruction or Mutilation of
Warrant. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in the case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to it, and upon reimbursement
to the Company of all reasonable expenses incidental thereto, and upon
surrender and cancellation of this Warrant, if mutilated, the Company will make
and deliver a new Warrant of like tenor and dated as of such cancellation and
reissuance, in lieu of this Warrant.


 


10.                                 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking
of any action or the expiration of any right required or granted herein shall
be a Saturday or Sunday or


 


8

















 


shall be a legal holiday, then such action may be taken or such right
may be exercised on the next succeeding day not a Saturday or Sunday or a legal
holiday.


 


11.                                 Adjustments of Rights. The purchase price per Share and the number
of Shares purchasable hereunder are subject to adjustment from time to time as
follows:


 


(a)                                  Merger or Consolidation. If at any
time there shall be a merger or a consolidation of the Company with or into
another corporation when the Company is not the surviving corporation, then, as
part of such merger or consolidation, lawful provision shall be made so that
the Holder shall thereafter be entitled to receive upon exercise of this
Warrant, during the period specified herein and upon payment of the aggregate
Exercise Price then in effect, the number of shares of stock or other
securities or property (including cash) of the successor corporation resulting
from such merger or consolidation, to which the Holder as the holder of the
stock deliverable upon exercise of this Warrant would have been entitled in
such merger or consolidation if this Warrant had been exercised immediately
before such merger or consolidation. In any such case, appropriate adjustment
shall be made in the application of the provisions of this Warrant with respect
to the rights and interests of the Holder as the holder of this Warrant after
the merger or consolidation. This provision shall apply to successive mergers
or consolidations.


 


(b)                                 Reclassification, Recapitalization, etc.
If the Company, at any time shall, by subdivision, combination or
reclassification of securities, recapitalization, automatic conversion, or
other similar event affecting the number or character of outstanding Shares, or
otherwise, change any of the securities as to which purchase rights under this
Warrant exist into the same or a different number of securities of any other
class or classes, this Warrant shall thereafter represent the right to acquire
such number and kind of securities as would have been issuable as the result of
such change with respect to the securities that were subject to the purchase
rights under this Warrant immediately prior to such subdivision, combination,
reclassification or other change.


 


(c)                                  Split, Subdivision or Combination of Shares.
If the Company, at any time while this Warrant remains outstanding and
unexpired, shall split, subdivision or combine the securities as to which
purchase rights under this Warrant exist, the Exercise Price shall be
proportionately increased or decreased as appropriate to adjust for the split,
subdivision or combination.


 


(d)                                 Common Stock Dividends. If the
Company at any time while this Warrant is outstanding and unexpired shall pay a
dividend with respect to Common Stock payable in shares of Common Stock, then
the Exercise Price shall be adjusted, from and after the date of determination
of the shareholders entitled to receive such dividend, to that price determined
by multiplying the Exercise Price in effect immediately prior to such date of
determination by a fraction (i) the numerator of which shall be the total
number of shares of Common Stock outstanding immediately prior to such
dividend, and (ii) the denominator of which shall be the total number of shares
of Common Stock outstanding immediately after such dividend. This paragraph
shall apply only if and to the extent that, at the time of such event, this
Warrant is then exercisable for Common Stock.


 


(e)                                  Adjustment of Number of Shares.
Upon each adjustment in the Exercise Price pursuant to Section 11(c) or 11(d)
hereof, the number of Shares purchasable hereunder shall be adjusted, to the
nearest whole Share, to the product obtained by multiplying the number of
Shares purchasable immediately prior to such adjustment in the Exercise Price
by a


 


9

















 


fraction (i) the numerator of which shall be
the Exercise Price immediately prior to such adjustment, and (ii) the
denominator of which shall be the Exercise Price immediately after such
adjustment.


 


12.                                 Notice of Adjustments; Notices. Whenever the Exercise Price or number or
type of securities issuable hereunder shall be adjusted pursuant to Section 11
hereof, the Company shall issue and provide to the Holder as the holder of this
Warrant a certificate signed by an officer of the Company setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated and the Exercise
Price and number of Shares purchasable hereunder after giving effect to such
adjustment.


 


13.                                 Binding Effect; Governing Law. This Warrant shall be binding upon any
successors or assigns of the Company. This Warrant shall constitute a contract
under the laws of Illinois and for all purposes shall be construed in
accordance with and governed by the laws of said state, without giving effect
to the conflict of laws principles.


 


14.                                 Attorneys’ Fees. In any litigation, arbitration or court
proceeding between the Company and the Holder as the holder of this Warrant
relating hereto, the prevailing party shall be entitled to reasonable
attorneys’ fees and expenses incurred in enforcing this Warrant.


 


15.                                 Amendments. This Warrant may be amended and the observance of any term of this
Warrant may be waived only with the written consent of the Company and the
Holder as the holder hereof.


 


16.                                 Notice. All notices hereunder shall be in writing and shall be effective (a)
on the day on which delivered if delivered personally or transmitted by
facsimile or telegram or telecopier with evidence of receipt, (b) one business
day after the date on which the same is delivered to a nationally recognized
overnight courier service with evidence of receipt, or (c) five business days
after the date on which the same is deposited, postage prepaid, in the U.S.
mail, sent by certified or registered mail, return receipt requested, and
addressed to the party to be notified at the address indicated below for the
Company, or at the address for the Holder as set forth in the registry
maintained by the Company pursuant to Section 8, or at such other
address and/or facsimile or telecopier and/or to the attention of such other
person as the Company or the Holder may designate by ten-day advance written notice.


 


17.                                 Entire Agreement. This Warrant and the form attached hereto
contain the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior and contemporaneous arrangements or
undertakings with respect thereto.


 


10

















 


IN WITNESS WHEREOF, Universal Access Global Holdings Inc. has caused
this Warrant to be executed by its duly authorized officer.


 


	
  Dated:
  July 23, 2003

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  UNIVERSAL
  ACCESS GLOBAL HOLDINGS

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/
  Randall R. Lay

  	
   

  
	
   

  	
  Name:
  Randall R. Lay

  
	
   

  	
  Title:
  Chief Executive Officer

  



 


11

















 


FORM OF
NOTICE OF EXERCISE


 


To:
Universal Access Global Holdings Inc.


 


1.                                       The undersigned hereby elects to purchase
                     
shares (the “Shares”) of Common Stock, $0.01 par value of Universal Access
Global Holdings Inc. (the “Company”) pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price and any transfer
taxes payable pursuant to the terms of the Warrant, together with an investment
Representation Statement in form and substance satisfactory to legal counsel to
the Company.


 


2.                                       The Shares to be received by the undersigned
upon exercise of the Warrant are being acquired for its own account, not as a
nominee or agent, and not with a view to resale or distribution of any part
thereof, and the undersigned has no present intention of selling, granting any
participation in, or otherwise distributing the same, except in compliance with
applicable federal and state securities laws. The undersigned further
represents that it does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person or to any third person, with respect to the Shares. The undersigned
believes it has received all the information it considers necessary or
appropriate for deciding whether to purchase the Shares.


 


3.                                       The undersigned understands that the Shares
are characterized as “restricted securities” under the federal securities laws
inasmuch as they are being acquired from the Company in transactions not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act of
1933, as amended (the “Act”), only in certain limited circumstances. In this
connection, the undersigned represents that it is familiar with Rule 144 of the
Act, as presently in effect, and understands the resale limitations imposed
thereby and by the Act.


 


4.                                       The undersigned understands the certificates
evidencing the Shares may bear one or all of the following legends:


 


(a)                                  “THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS
SOLD PURSUANT TO RULE 144 OF SUCH ACT.”


 


(b)                                 Any
legend required by applicable state law.


 


5.                                       Please issue a certificate or certificates
representing said Shares in the name of the undersigned.


 


	
   

  	
  Broadmark
  Capital, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
								



 


1

















 


6.                                       Please issue a new Warrant for the
unexercised portion of the attached Warrant in the name of the undersigned.


 


	
   

  	
  Broadmark
  Capital, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
								



 


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