Exhibit 10.21


 


UNIVERSAL ACCESS GLOBAL HOLDINGS INC.

(a Delaware corporation)

CONVERTIBLE PROMISSORY NOTE

(the “Note”)


 


THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.  THESE SECURITIES HAVE BEEN ACQUIRED SOLELY
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF.  THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED OR OTHERWISE DISTRIBUTED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THESE SECURITIES
UNDER THE SECURITIES ACT OF 1993, AS AMENDED, AND APPLICABLE STATE LAWS OR AN
OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND APPLICABLE LAWS.


 


	
  $1,000,000

  	
   

  	
  April 28, 2004

  



 


FOR VALUE RECEIVED, Universal Access Global H Inc., a corporation
organized under the laws of the State of Delaware (the “Company”), promises to pay to the order of
Lafayette Business Park, LLC (the “Holder”),
the principal sum of One Million Dollars ($1,000,000), in legal and lawful
money of the United States of America. Payment for all amounts due hereunder
shall be made at the principal office of Holder at the address of Holder set
forth below, or such other address as the Holder may hereafter direct in
writing.


 


This Convertible Promissory Note is being delivered to Holder in
connection with the execution by the Company and Holder of that Agreement (the
“Agreement”)
dated of even date herewith relating to the termination of the lease dated
April 1, 1999 by and between Holder and the Company’s wholly-owned subsidiary,
Universal Access, Inc., for the property commonly known as 1900 Lafayette
Street, Santa Clara, California and the lease dated August 31, 1999 by and
between Holder and Universal Access, Inc. for the property commonly known as
1940 Lafayette Street, Santa Clara, California.


 


The following is a statement of the rights of the Holder of this Note
and the conditions to which this Note is subject, and to which the Holder
hereof, by the acceptance of this Note agrees:


 


1.             Interest/Debt
Service.  Except as provided in Section
3.1 below, this Note shall be non-interest bearing. Unless this Note is
prepaid or converted as provided herein, the unpaid principal amount of this
Note shall be due and payable in one lump sum on the second anniversary of the
date first set forth above (the “Maturity
Date”).


 


2.             Events
of Default.  The occurrence of any
of the following events shall constitute an event of default under the Note (an
“Event of
Default”):


 

















 


2.1           Failure
to Pay.  The Company shall fail to
pay the principal due on the Maturity Date as required under the terms of this
Note and such default shall continue for a period of more than five (5)
business days after notice thereof to the Company.


 


2.2           Voluntary
Bankruptcy or Insolvency Proceedings. The Company shall (i) apply for
or consent to the appointment of a receiver, trustee, liquidator or custodian
of itself or of all or a substantial part of its property, (ii) be unable, or
admit in writing its inability, to pay its debts generally as they mature,
(iii) make a general assignment for the benefit of its creditors, (iv) be
dissolved or liquidated in full or in part, or (v) commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or consent to any such relief or to the
appointment of or taking possession of its property by any official in an
involuntary case or other proceeding commenced against it.


 


2.3           Involuntary
Bankruptcy or Insolvency Proceedings. 
Proceedings for the appointment of a receiver, trustee, liquidator or
custodian of the Company of all or a substantial part of the property thereof,
or an involuntary case or other proceedings seeking liquidation, reorganization
or other relief with respect to the Company or the debts thereof under any
bankruptcy, insolvency or other similar law now or hereafter in effect shall be
commenced and an order for relief entered or such proceeding shall not be
dismissed, discharged or stayed within ninety (90) days of commencement, or any
action under the laws of the state of the Company’s organization analogous to
any of the foregoing shall be taken with respect to the Company and shall
continue undismissed, or unstayed and in effect, for a period of ninety (90)
days.


 


3.             Remedies.


 


3.1           Default
Interest. From and after the occurrence of an Event of Default, which
remains uncured after the expiration of any applicable cure period, then from
the date of any such default and during the continuance thereof, this Note
shall bear interest at the default rate (hereafter the “Default Rate”) of ten percent
(10%) per annum. This Note shall continue to bear interest at the Default Rate
until such time as the default shall have been fully cured.


 


3.2           Acceleration.  Upon the occurrence of an Event of Default
referred to above, the principal amount then outstanding under this Note shall,
upon notice to the Company by Holder, be paid in cash immediately to the Holder
within a period not exceeding seven (7) days from the date of notice without
other or further presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Company.


 


3.3           Cumulative
Remedies. Holder may institute such actions or proceedings in law or equity
as it shall deem expedient for the protection of its rights and may prosecute
and enforce its claims against all assets of the Company, and in connection
with any such action or proceeding shall be entitled to receive from the
Company payment of the principal amount and interest, if any, of this Note plus
reasonable expenses of collection, including, without limitation, attorneys’
fees and expenses.  No remedy herein
conferred upon the holder of this Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or otherwise.


 


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4.             Waivers.  Unless otherwise specifically set forth in
this Note, the Company and each surety, endorser, guarantor and other person
liable upon this Note waives (i) all 
notices, demands and presentments for payments, and (ii) all notices of
non-payment, default, intention to accelerate maturity, acceleration of
maturity, protest and dishonor.


 


5.             Prepayment.
The Company shall have the right to prepay all or any part of the outstanding
principal balance of this Note, at any time upon providing ten (10) business
days’ prior notice to the Holder, by wire transfer or delivery of good funds to
Holder.


 


6.             Conversion
Rights.


 


6.1           Voluntary
Conversion.  The Holder of this Note
has the right, at the Holder’s option, at any time, to convert this Note in
accordance with the provisions of Section 6.2 hereof, in whole or in
part, into fully paid and nonassessable shares of common stock of the Company
(the “Common Stock”).  The number of shares of Common Stock of the
Company into which this Note may be converted (“Conversion Shares”) shall be determined by dividing the
outstanding principal and interest, if any, elected by the Holder to be converted,
by the Conversion Price (as defined below) in effect at the time of such
conversion.  The “Conversion Price” shall be
equal to $2.50, subject to adjustment as provided in Section 7 below.


 


6.2           Conversion
Procedure.  The Holder may convert
this Note as provided in Section 6.1 by delivering to the Company a
Notice of Exercise (attached hereto) and surrendering this Note, duly endorsed,
to the Company at its principal corporate office. The Company shall, as soon as
practicable, thereafter, and at its expense, issue and deliver at such office
to the Holder of this Note a certificate or certificates representing the
Conversion Shares and, to the extent the Notice of Exercise specifies a
conversion of this Note in part and not in whole, the Company shall deliver to
Holder a replacement convertible promissory note (in form and substance similar
to this Note) for the amount of principal and interest, if any, that remains
outstanding after giving effect to the conversion of the principal and
interest, if any, specified in the Notice of Exercise (a “Replacement Note”).  Holder acknowledges that the certificates
for the Conversion Shares and Replacement Note, if any, will be legended, if
and as required by applicable state and federal securities laws.  Such conversion shall be deemed to have been
made on the date of the Company’s receipt of the Notice of Exercise, and the
person or persons entitled to receive the Conversion Shares shall be treated
for all purposes as the record holder or holders of such Conversion Shares as
of such date.


 


6.3           Automatic
Conversion. Upon the occurrence of a Change in Control Event (defined
below) that will result in the shareholders of the Company being entitled to
receive compensation (whether payable in cash, property or a combination
thereof) having a fair market value equal to or greater than $3.00 per share,
subject to adjustment as provided in Section 7.3 (the “Per Share
Price”), then the outstanding principal and interest, if any, of
this Note shall convert automatically into Conversion Shares at the Conversion
Price. Such conversion shall be deemed to occur immediately prior to the
closing of the Change in Control Event and the Holder shall be treated for all
purposes as the record holder or holders of such Conversion Shares as of such
date. A “Change in Control Event” shall mean: (1) the consummation of a merger
or consolidation of the Company; or (2) an agreement for the sale or
disposition by the Company of


 


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all or
substantially all of the Company’s assets; or (3) the liquidation, dissolution
or winding up of the Company.


 


6.4           Mechanics
and Effect of Conversion.  No
fractional Conversion Shares shall be issued upon conversion of this Note.  In lieu of the Company’s issuing any fractional
shares to the Holder upon the conversion of this Note, the Company shall pay to
the Holder cash in the amount of such fractional amount. Upon full conversion
of the Note, the Company shall deliver (i) stock certificates representing
ownership of the Conversion Shares, and (ii) a check payable to the Holder for
any fractional amount. Upon full conversion of this Note and timely performance
by the Company of its obligations related to such conversion, the Company shall
be forever released from all of its obligation and liabilities under this Note.


 


7.             Adjustments
to Conversion Price.


 


7.1           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 (other than a merger or consolidation that results in an
automatic conversion as described in Section 6.3), then, as part of such
merger or consolidation, lawful provision shall be made so that the Holder, as
the holder of this Note, shall thereafter be entitled to receive upon
conversion of this Note, during the period specified herein and upon payment of
the aggregate Conversion 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 Conversion Shares deliverable upon conversion of this Note would have
been entitled in such merger or consolidation if this Note 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 Note with respect to the rights and interests of the Holder
as the holder of this Note after the merger or consolidation.  This provision shall apply to successive
mergers or consolidations.


 


7.2           Reclassification,
Recapitalization, etc.  If the
Company at any time shall, by reclassification of securities, recapitalization,
automatic conversion, or other similar event affecting the number or character
of outstanding shares of Common Stock, or otherwise, change any of the
securities as to which purchase rights under this Note exist into the same or a
different number of securities of any other class or classes, this Note 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 conversion rights under this Note
immediately prior to such subdivision, combination, reclassification or other
change.


 


7.3           Split,
Subdivision or Combination of Common Stock.  If the Company, at any time while this Note remains outstanding,
shall split, subdivide or combine the securities as to which conversion rights
under this Note exist, the Conversion Price and Per Share Price shall be
proportionately increased or decreased as appropriate to adjust for the split,
subdivision or combination.


 


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8.             Registration
Rights.


 


8.1           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
Conversion Shares are issuable pursuant to this Note or are outstanding, the
Company shall give the Holder 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 or
all of the Registrable Shares (as defined below).   The Holder shall have until the 15th 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 8.2 and the proviso
below, the Company shall include in the filing for registration under the
Securities 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; provided, however, that if the
registration statement pursuant to which the Holder is exercising its rights
pursuant to this Section 8.1 is being filed by the Company as a result
of a demand received by the Company from shareholders (each a “Demanding
Shareholder”) exercising their demand registration rights pursuant
to the Registration Rights Agreement dated July 23, 2003 (the “Registration
Rights Agreement”) by and among the Company, CityNet
Telecommunications, Inc. (“CityNet”) and each party executing a Joiner
Agreement, then the aggregate number of Registrable Shares that may be
registered by the Holder pursuant to such registration statement shall be
limited to that number of shares equal to the product of: (1) the aggregate
Registrable Shares, multiplied by (2) a fraction, the numerator of which shall
be the aggregate amount of shares of Common Stock being requested to be
registered by the Demanding Shareholders, and the denominator of which shall be
the aggregate amount of “Registrable Shares” (as defined in the Registration
Rights Agreement) held by the Demanding Shareholders.  If any Piggyback Registration results from a demand by a
Demanding Shareholder, the Company shall so advise the Holder as part of the
notice given pursuant to this Section 8.1. The Company will use its
reasonable efforts through its officers, directors, auditors, and counsel to
cause the registration statement to become effective as promptly as reasonably
practicable.


 


“Registrable
Shares” shall mean (i) any shares of Common Stock issuable to the
Holder upon the conversion of all or any portion of this Note, and (ii) any
other securities issued or issuable with respect to any such shares described
in clause (i) above by way of a stock 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 are eligible to be sold by the Holder pursuant to Rule 144(k)
promulgated under the Securities Act, or (ii) such shares have been sold by the
Holder 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.


 


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8.2           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
8.1.  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 8.2, 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:


 


(a)                                  in the event the
offering was demanded or 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 (i)
Proposing Holders or (ii) holders of “Registrable Shares” as that term is
defined in the Registration Rights Agreement (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


 


(b)                                 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.


 


8.3           No
Liability. Nothing in this Note 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
8.1 hereof or to withdraw such Registration Statement subsequent to its
filing, regardless of any action whatsoever that the


 


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Holder may
have taken, whether as a result of the issuance by the Company of any notice
hereunder or otherwise.


 


8.4           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 8.4:


 


(a)                                  “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) 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.


 


(b)                                 “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.


 


8.5           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 8.5 in which it is not otherwise required to
qualify to do business.


 


8.6           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 8.7, the Company shall extend the
effectiveness of the registration statement for the same time period as that
set forth in the Blackout Notice.


 


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8.7           Blackout
Rights. Following the effective date of any registration statement filed
pursuant to Section 8.1, 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.


 


8.8           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 Securities 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.


 


8.9           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.


 


8.10         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.


 


8.11         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


 


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loss,
liability, charge, claim, damage, and expense whatsoever (which shall include,
for all purposes of this Section 8.11, 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 8.11 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 Securities 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 8.11 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 8.11 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.


 


8.12         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


 


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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
8.11, 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 8.12, 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 8.12.


 


8.13         Termination
of Registration Rights. The covenants set forth in Section 8 of this
Note shall terminate on the first date on which no Registrable Shares remain
outstanding.


 


8.14         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 Securities Act, the Holder
shall not, directly or indirectly, sell or otherwise transfer any Registrable
Shares during the same period (the “Market Standoff Period”) requested in
writing by the managing underwriter and agreed to in writing by the Company and
all of its executive officers, directors, greater than five percent
shareholders of the Company and all other shareholders having shares registered
pursuant to such registration statement; provided, however, that no shareholder
shall be subject to the restrictions of this Section 8.14, if the
shareholder beneficially owns less than 3% of the outstanding Common Stock of
the Company (assuming conversion of all convertible securities of the Company
beneficially owned by such shareholder) and if the shareholder is not at such
time an affiliate (as defined below) of the Company or any of its directors and
does not at such time have power to designate or select one or more members of
the Board of Directors of the Company. 
The Company may impose stop transfer instructions with respect to shares
subject to the foregoing restrictions until the end of such Market Standoff Period.
For purposes of this Section, an “affiliate” of a person (or entity) shall mean
(i) any person or entity who directly or indirectly is in control of, is
controlled by or is under common control with such first person (or entity);
(ii) any person who is a director or executive (as defined in Rule 3b-7
promulgated under the Exchange Act) of such first person (or entity) described
in clause (i) above; or (iii) any person who is an immediate family member of
any person described in clause (ii) above.


 


9.             Reservation
of Stock. The Company shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock solely for the purpose of
effecting the conversion of the Note, such number of shares of Common Stock as
shall from time to time be sufficient to effect the conversion of the Note; and
if at any time the number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the conversion of the entire outstanding
principal and interest, if any, of this Note, in addition to such other
remedies as shall be available to the holder of this Note, the Company will use
its best efforts to take such


 


10

















 


corporate
action as may be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purposes.


 


10.           Assignment.  This Note shall be binding upon the Company
and its successors, assigns, heirs and representatives, and shall inure to the
benefit of the Holder and its permitted successors and assigns.


 


11.           Waiver
and Amendment.  Any provision of
this Note may be amended, waived or modified upon the written consent of the
Company and the Holder of this Note. 
The Company hereby waives any and all defenses it may have to the
enforcement by the Holder of this Note.


 


12.           Transfer
of this Note or Securities Issuable on Conversion Hereof.  This Note may not be sold, transferred,
assigned or otherwise disposed of by the Holder without the prior written consent
of the Company which consent shall not unreasonably be withheld.  As a condition to the Company’s consent to
any transfer, the Company may require the Holder to provide the Company with a
written opinion, to the effect that such offer, sale, transfer or other
distribution may be effected without registration or qualification (under any
federal or state law then in effect) under any federal or state security act.


 


13.           Notices.  All notices or other communications required
or permitted hereunder shall be in writing and shall be deemed given, delivered
and received (i) when delivered, if delivered personally, (ii) four days after
mailing, when sent by registered or certified mail, return receipt requested
and postage prepaid, and (iii) one business day after delivery to a private
courier service, when delivered to a private courier service providing
documented overnight service, in each case addressed to a party at its address
set forth below, or to such other address as the party to receive such notice may
have designated to all other parties by notice in accordance herewith: 


 


	
  If to
  Company:

  	
   

  	
  Universal
  Access Global Holdings Inc.

  
	
   

  	
   

  	
  Attention:  Chief Executive Officer

  
	
   

  	
   

  	
  233 South
  Wacker Drive, Suite 600

  
	
   

  	
   

  	
  Chicago, IL
  60606

  
	
   

  	
   

  	
  Telephone:  (312) 660-5000

  
	
   

  	
   

  	
   

  
	
  With a copy
  to:

  	
   

  	
  Shefsky
  & Froelich Ltd.

  
	
   

  	
   

  	
  Attention:  Cezar M. Froelich

  
	
   

  	
   

  	
  444 North
  Michigan Avenue, Suite 2500

  
	
   

  	
   

  	
  Chicago,
  Illinois  60611

  
	
   

  	
   

  	
  Telephone:  (312) 527-4000

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If to
  Holder:

  	
   

  	
  Lafayette
  Business Park, LLC

  
	
   

  	
   

  	
  Attention:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone:

  



 


11

















 


14.           No
Shareholder Rights.  Nothing
contained in this Note shall be construed as conferring upon the Holder or any
other person the right to vote or to consent or to receive notice as a shareholder
in respect of meetings of shareholder for the election of directors of the
Company or any other matters or any rights whatsoever as a shareholder of the
Company, and no distributions or dividends in cash or in kind shall be payable
or accrued in respect of this Note or the interest represented hereby or the
Conversion Shares obtainable hereunder until, and only to the extent that, this
Note shall have been converted.


 


15.           Failure
or Indulgency Not Waiver.  No
failure or delay on the part of the Holder hereof in the exercise of any power,
right, or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right of privilege preclude other
or further exercise thereof or of any other right, power or privilege.  All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.


 


16.           Attorneys’
Fees.  The Company shall pay all
attorneys’ fees and other costs incurred by the Holder in enforcing the terms
of this Note.


 


17.           Governing
Law; Venue. The parties agree that this Note shall be governed by,
interpreted and construed in accordance with the laws of the State of
California, and the parties agree that any suit, action or proceeding with respect
to this Note shall be brought in the courts of Santa Clara County in the State
of California or in the U.S. District Court for the Northern District of
California.  The parties hereto accept
the sole and exclusive jurisdiction of those courts for the purpose of any such
suit, action or proceeding.


 


18.           Headings;
References.  All headings used
herein are used for convenience only and shall not be used to construe or
interpret this Note.  Except where
otherwise indicated, all references herein to Sections refer to Sections
hereof.


 


19.           Entire
Agreement. This Note, together with the Agreement, contains the entire
agreement and understanding of the parties hereto, and supersedes all prior
agreements and understandings relating to the subject matter hereof.


 


[Signature Page
Follows]


 


12

















 


IN WITNESS WHEREOF, the parties hereto have
caused their duly authorized officers to execute and deliver this Convertible
Promissory Note as of the date first written above.


 


	
   

  	
  UNIVERSAL ACCESS GLOBAL

  HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Randall R. Lay

  
	
   

  	
   

  	
  Randall Lay, CEO

  



 


13

















 


NOTICE OF EXERCISE


 


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


 


1.             The
Holder hereby elects to (check one):


 


o    
convert the entire outstanding principal and interest, if any, under the
attached Convertible Promissory Note dated April     , 2004
issued by the Company in favor of Holder (the “Note”) for
                      
shares of common Stock of the Company (the “Conversion
Shares”) pursuant to the terms of the Note; or


 


o    
convert that portion of outstanding principal and interest, if any, under the
Note equal to
$              
[insert dollar amount of principal and interest, if any, to be converted] for
                
Conversion Shares.


 


Capitalized terms used herein and not otherwise defined shall have the
meaning set forth in the Note.


 


2.             Upon
delivery of the Notice of Exercise and surrender of the Note, the Company shall
issue to Holder the Conversion Shares and a Replacement Note, if applicable.


 


3.             The
Conversion Shares to be received by the Holder upon exercise of the Note 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 Holder 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 Holder 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 Conversion Shares.  The Holder believes it has received all the
information it considers necessary or appropriate for deciding whether to
purchase the Conversion Shares.


 


4.             The
undersigned understands that the Conversion 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
Holder 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.


 


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


 


(a)           “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 INVESTMENT AND NOT WITH A VIEW TO, OR
IN CONNECTION WITH, THE


 


14

















 


 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 EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND ANY APPLICABLE
STATE SECURITIES LAWS.”


 


(b)           Any
legend required by applicable state law.


 


6.             Please
issue a certificate or certificates representing said Conversion Shares in [the name of
the Holder]  [insert other name if not Holder].


 


7.             The
undersigned hereby covenants that he, she or it shall not sell, pledge or
otherwise transfer or dispose of any Conversion Shares except in accordance
with applicable state and federal securities laws.  


 


 


	
   

  	
  HOLDER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Print Name of Holder)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  



 


15