Document:

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                                                                   EXHIBIT 10.38

                              AMENDED AND RESTATED
                                 PROMISSORY NOTE

$275,000.00                                       Chicago, Illinois
                                                  Effective as of August 4, 1999
                                                  Executed December 6, 1999

     FOR VALUE RECEIVED, Donna M. Shore ("Borrower") promises to pay to
Universal Access, Inc. (the "Lender") or order, at 100 North Riverside Plaza,
Suite 2200, Chicago, Illinois 60606, or such other place as the Lender or holder
hereof may from time to time designate, the principal sum of TWO HUNDRED
SEVENTY-FIVE THOUSAND Dollars ($275,000.00).

1.   Interest Rate. Interest shall accrue on the unpaid principal portion of
     this Note at the rate of six percent (6%) per annum, simple interest.

2.   Payment Schedule. Principal and accrued and unpaid interest, if any, shall
     be due and payable on August 4, 2004 (the "Maturity Date").

3.   Repayment of Indebtedness. On or before the Maturity Date, Borrower shall
     repay the entire principal and interest owing under this Note by one of the
     following methods (or, with respect to principal, the method described in
     the following sentence), to be selected in Borrower's sole discretion: (i)
     in cash or immediately available funds; or (ii) if the shares (the
     "Shares") of common stock (the "Common Stock") of Lender are no longer
     subject to the restrictions on transfer (the "Transfer Restrictions") set
     forth in the Amended and Restated Shareholders Agreement dated as of June
     30, 1999 by and among Lender and other parties thereto (as amended, the
     "Shareholders Agreement"), by delivering and transferring to Lender the
     number of shares of Common Stock whose Fair Market Value equals the entire
     principal and interest owing under this Note as of the Maturity Date. In
     addition to the repayment methods described in the previous sentence,
     Borrower may repay the entire principal amount owing under this Note by
     delivering and transferring to Lender 100,000 Shares, so long as the Shares
     are no longer subject to the Transfer Restrictions set forth in the
     Shareholders Agreement.

     The Fair Market Value of the Common Stock shall be determined (i) by
     reference to the national securities market or exchange on which the Common
     Stock is traded on the Maturity Date, or (ii) if the Common Stock is not
     traded on a national securities market or exchange on the Maturity Date, by
     the board of directors of Lender acting in good faith based upon a
     valuation report prepared by an independent valuation firm or consultant.
     Notwithstanding any provision of this Note, the Lender shall not be
     required to accept Shares or Common Stock in repayment of amounts due
     hereunder if the Lender is restricted by law or written agreement from
     doing so. The number of Shares referred to above shall be adjusted to give
     effect to any stock split, stock dividend or combination of the

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     Common Stock occurring after the date hereof. With respect to principal
     owing under this Note, this Note is with recourse to Borrowers' interest in
     the Shares but without recourse to Borrower personally. With respect to
     interest owing under this Note, this Note is recourse to Borrower
     personally.

     Any repayment under this paragraph 3 which is made in Shares shall include
     only Shares owned by Borrower for six months or more prior to the date of
     repayment (and shall not include any Shares acquired upon the exercise of
     any stock options granted to Borrower as of the date hereof), provided,
     however, that if such Shares were acquired pursuant to an incentive stock
     option plan as defined in Code Sections 422 or prior Code Section 422A of
     the Lender or any affiliate including any qualified stock option plan as
     defined in prior Code Section 422, then the applicable holding period
     requirements of said Sections 422 and 422A shall have been met with respect
     to such Shares.

4.   Prepayment. Borrower shall have the right to prepay all or any part of the
     unpaid balance hereof at any time, without premium or penalty.

5.   Security. Borrower agrees that at such time at the Shares are no longer
     subject to the transfer restrictions set forth in the Shareholders
     Agreement, or, if earlier, at such time as Borrower has obtained a waiver
     by the other parties to the Shareholders Agreement of the transfer
     restrictions on the Shares, then Borrower shall execute and deliver to
     Lender a Stock Pledge Agreement pursuant to which Borrower will pledge the
     Shares to Lender as a collateral security (the "Collateral") for the
     principal owing under this Note. Unless and until Borrower delivers to
     Lender a Stock Pledge Agreement, the Shares shall not be deemed to have
     been pledged or otherwise transferred to Lender. Borrower and Lender agree
     that the reference to the Shares set forth in this paragraph shall not
     constitute a "Transfer" as defined in the Shareholders Agreement.

6.   Amendment of Note. This Note may be terminated or amended only by prior
     written consent of Lender and Borrower. This Note amends and restates in
     its entirety, effective as of August 4, 1999, the Promissory Note dated
     August 4, 1999 delivered by Borrower to Lender.

7.   Governing Law. This Note shall be governed by and construed in accordance
     with the internal laws of the State of Illinois, without giving effect to
     the conflict of law principles thereof, in which state it shall be
     performed, and shall be binding upon Borrower and his heirs and assigns.

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                                        BORROWER:

                                        /s/ DONNA M. SHORE
                                        ----------------------------------------
                                        Donna M. Shore

                                        LENDER:

                                        UNIVERSAL ACCESS, INC.

                                        By: /s/ PATRICK C. SHUTT
                                           -------------------------------------
                                           Name:  Patrick C. Shutt
                                           Title: President and Chief Executive
                                                     Officer
                                                  100 North Riverside Plaza
                                                  Suite 2200
                                                  Chicago, IL 60606<PAGE>   1
                                                                   EXHIBIT 10.39

                              EMPLOYMENT AGREEMENT

      THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is made as of this 1st day of
February 2000, by and between UNIVERSAL ACCESS, INC., a Delaware corporation
(the "COMPANY"), and William J. Coyne III (the "EMPLOYEE").

                                    RECITALS:

A.    The Company is in the telecommunications business.

B.    The Company desires to employ the Employee and Employee desires to be
employed by the Company as its Executive Vice President Sales, subject to the
terms, conditions and covenants hereinafter set forth.

C.    As a condition of the Company employing the Employee, and to the Company's
agreement to grant stock options to the Employee pursuant to the Company's stock
option plan, Employee has agreed not to divulge to the public the Company's
confidential information, not to solicit the Company's vendors, customers or
employees and not to compete with the Company, all upon the terms and conditions
hereinafter set forth.

      NOW, THEREFORE, in consideration of the foregoing and the agreements,
covenants and conditions set forth herein, the Employee and the Company hereby
agree as follows:

                                    ARTICLE I

                                   EMPLOYMENT

1.1   Employment. The Company hereby employs, engages, and hires Employee, and
Employee hereby accepts employment, upon the terms and conditions set forth in
this Agreement. The Employee shall serve as the Executive Vice President Sales
of the Company. The Employee shall have and fully perform the duties and
responsibilities required for such job title and position and to perform such
additional services and discharge such other responsibilities as may be, from
time to time, assigned or delegated by the Company.

1.2   Activities and Duties During Employment. Employee represents and warrants
to the Company that Employee is free to accept employment with the Company and
that Employee has no prior or other commitments or obligations of any kind to
anyone else which would hinder or interfere with the performance of this
Agreement.

1.3   Employee accepts the employment described in Article I of this Agreement
and agrees to devote his or her full time and efforts to the faithful and
diligent performance of the services described herein, including the performance
of such other services and responsibilities as the Company may, from time to
time, stipulate. Without limiting the generality of the

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foregoing, Employee shall devote not less than five (5) days per week to this
employment, and shall be present on the Company premises or actively engaged in
service to or on behalf of the Company during normal business hours Monday
through Friday, excluding periods of vacation and sick leave.

                                   ARTICLE II

                                      TERM

2.1   Term. The term of employment under this Agreement shall be one (1) year
(the "Initial Term"), commencing on the date of the Agreement. This Agreement
shall automatically renew for successive one year terms thereafter (each a
"Renewal Term") unless either party delivers notice of termination to the other
party not less than fifteen (15) days prior to the end of the Initial Term or
Renewal Term in question. The Initial Term and any Renewal Terms shall herein be
referred to as the "Employment Term".

2.2   Termination. The Employment Term and employment of Employee may be
terminated as follows:

      (a)   By the Company immediately for "Cause." For the purpose of this
            Agreement, "Cause" shall mean (i) conduct amounting to fraud,
            embezzlement, or illegal misconduct in connection with Employee's
            duties under this Agreement; (ii) the conviction of Employee by a
            court of proper jurisdiction of (or his or her written, voluntary
            and freely given confession to) a crime which constitutes a felony
            (other than a traffic violation) or an indictment that results in
            material injury to the Company's property, operation or reputation;
            (iii) the willful failure of Employee to comply with reasonable
            directions of the Company or any of the policies of the Company
            after (a) written notice is delivered to the Employee describing
            such willful failure and (b) Employee has failed to cure or take
            substantial steps to cure such willful failure after a reasonable
            time period as determined by the Company in its reasonable
            discretion (not to be less than 15 days) unless the Employee, after
            discussion with counsel, in good faith believes, that the directions
            of the Company (or its actions or inactions in response to the
            Employee's written notice) are illegal; or (iv) willful misconduct
            or a material default by the Employee in the performance or
            observance of any promise or undertaking of Employee under this
            Agreement, which willful misconduct or default has continued for a
            period of ten (10) business days after written notice thereof from
            the Company to the Employee.

      (b)   Automatically, without the action of either party, upon the death of
            Employee ("Death").

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      (c)   By either party upon the Total Disability of the Employee. The
            Employee shall be considered to have a Total Disability for purposes
            of this Agreement if he or she is unable by reason of accident or
            illness to substantially perform his or her employment duties, and
            is expected to be in such condition for periods totaling six (6)
            months (whether or not consecutive) during any period of twelve (12)
            months. The determination of whether a Total Disability has occurred
            shall be determined by the Company, in good faith, at its sole
            discretion. Nothing herein shall limit the Employee's right to
            receive any payments to which Employee may be entitled under any
            disability or employee benefit plan of the Company or under any
            disability or insurance policy or plan. During a period of
            disability prior to termination hereunder, Employee shall continue
            to receive his or her full compensation (including base salary and
            bonus) and benefits, subject to offset to the extent of any
            disability insurance payments received by the Employee pursuant to
            any disability insurance policy maintained by or paid for by the
            Company.

       (d)  By the Employee upon ten (10) business days notice to the Company
            for Good Reason, which notice shall state the reason for
            termination. For the purpose of this Agreement, "Good Reason" shall
            mean any "Change in Control" (as hereinafter defined) or any
            material failure by the Company to comply with the provisions of
            this Employment Agreement, including but not limited to, failure to
            timely pay any part of Employee's compensation (including salary or
            bonus) or provide the benefits contemplated herein, and which is not
            remedied by the Company within ten (10) business days after receipt
            by the Company of written notice thereof from Employee; provided,
            that if such default is of a nature that it cannot be reasonably
            cured within ten (10) day period (but is curable), then if the
            Company shall have commenced an attempt to cure such default within
            such ten (10) day period, the period to cure the default shall be
            extended until the earlier of the date which is forty-five (45) days
            after receipt of notice or the Company has failed to diligently
            continue its efforts in a reasonable manner to cure its default.

            For purposes hereof, the term "Change in Control" shall mean the
            occurrence of any of the following:

            (1)   The Company: (a) consummates a merger or consolidation which
                  results in the voting securities of the Company outstanding
                  immediately prior thereto continuing to represent (either by
                  remaining outstanding or by being converted into voting
                  securities of the surviving entity) less than fifty percent
                  (50%) of the total voting power represented by the voting
                  securities of the Company of such surviving entity outstanding
                  immediately after such merger or consolidation; and (b)
                  following such event, the successor entity fails to employ
                  Employee as follows (hereinafter, the "Same Terms"): on
                  substantially identical terms as are required per this
                  Agreement for the remaining Employment Term, and the

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                  successor entity further continues to employ Employee in the
                  same city and with job responsibilities of a level
                  substantially equivalent to or greater than those presently in
                  force and effect;

            (2)   A plan of complete liquidation of the Company or an agreement
                  for the sale or disposition by the Company of (in one
                  transaction or a series of transactions) all or substantially
                  all of the Company's assets is consummated, and following such
                  event the successor entity (if any) fails to employ Employee
                  on the Same Terms; or

            (3)   Company consummates a plan of complete liquidation of the
                  Company or an agreement for the sale or disposition (in one
                  transaction or a series of transactions) by the Company of all
                  or substantially all of the Company's assets, and following
                  such event the successor entity (if any) fails to employ
                  Employee on the Same Terms;

                  provided, however, that a public offering of the stock of the
                  Company irrespective of the amount of voting securities owned
                  by present shareholders after such offering shall not be
                  deemed to constitute a Change of Control; and provided further
                  that if Employee agrees to be employed by a successor entity
                  on the Same Terms and the successor entity fails to do so, a
                  Change in Control shall be deemed to have occurred.

      (e)   By the Employee without Good Reason, and therefore in breach of this
            Agreement.

      (f)   By the Company other than for Cause, Death or Total Disability, in
            which event Employee's sole remedy and compensation as a result of
            such termination shall be as set forth in Section 2.4(c) below.

2.3   Cessation of Rights and Obligations: Survival of Certain Provisions. On
the date of expiration or earlier termination of the Employment Term for any
reason, all of the respective rights, duties, obligation and covenants of the
parties, as set forth herein, shall, except as specifically provided herein to
the contrary, cease and become of no further force or effect as of the date of
said termination, and shall only survive as expressly provided for herein.

2.4   Cessation of Compensation. In lieu of any severance under any severance
plan that the Company may then have in effect, and subject to (i) the receipt of
a full and unconditional release from Employee and (ii) any amounts owed by the
Employee to the Company under any contract, agreement or loan document entered
into after the date hereof which relates solely to his or her employment with
the Company (including, but not limited to, loans made by the Company to the
Employee), the Company shall pay to the Employee, and the Employee shall be
entitled to receive, the following amounts within thirty (30) days of the date
of a termination of his or her employment:

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      (a)   Voluntary Termination/Cause/Expiration of Term. Upon (i) Employee
            terminating his or her employment without Good Reason as provided in
            Section 2.2(e), (ii) the expiration of the Employment Term because
            the Employee or the Company elects to not extend the Employment
            Term, or (iii) a termination of the Employment Term for Cause by the
            Company as provided in Section 2.2(a), the Employee shall be
            entitled to receive his or her or her base salary (which shall
            include any of his or her unused vacation pay for the year of such
            termination) and expense reimbursements solely through the date of
            termination.

      (b)   Death or Total Disability. Upon the termination of the Employment
            Term by reason of the Death or Total Disability of the Employee, the
            Employee (or, in the case of Death, his or her estate) shall be
            entitled to receive his or her base salary (which shall include any
            of his or her unused vacation pay for the year of such termination)
            and expense reimbursements solely through the date of termination.

      (c)   Involuntary. Upon the termination of the Employment Term:

            (1)   by the Company for any reason other than Cause, Death or Total
                  Disability, or

            (2)   by the Employee for Good Reason,

                  the Employee shall be entitled to receive in a lump sum the
                  balance of his or her base salary for the lesser of the
                  remaining term of the Employment Term (exclusive of any
                  renewals of the then existing term) or a period of six (6)
                  months (the "Severance Term"), together with prorated vacation
                  pay and expense reimbursement through the date of termination.
                  In addition, Employee shall be entitled to payment by the
                  Company of the premiums for group health insurance coverage
                  otherwise payable by Employee under the Consolidated Omnibus
                  Budget Reconciliation Act of 1985 ("COBRA") for the Severance
                  Term. It shall be a condition to Employee's right to receive
                  the payments described above that Employee shall be in
                  compliance with all of the Employee's obligations which
                  survive termination hereof, including without limitation those
                  arising under Article IV hereof. The payments described above
                  are intended to be in lieu of all other payments to which
                  Employee might otherwise be entitled in respect of termination
                  of Employee's employment without Cause unless otherwise
                  required by law or under other agreements between the parties.
                  Notwithstanding anything to the contrary contained herein, to
                  the extent Employee receives any direct or indirect
                  compensation, consulting fees or health insurance from any
                  Third Parties (as hereinafter defined) during the Severance
                  Term or with respect to

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                  services performed during the Severance Term such compensation
                  shall be credited dollar for dollar against the Severance Term
                  payment obligations of Company under this Section 2.4(c).

2.5   Business Expenses.

      (a)   Reimbursement. The Company shall reimburse the Employee for all
            reasonable, ordinary, and necessary business expenses incurred by
            him or her in connection with the performance of his or her duties
            hereunder, including, but not limited to, ordinary and necessary
            travel expenses and entertainment expenses. The reimbursement of
            business expenses will be governed by the policies of the Company
            from time-to-time and the terms otherwise set forth herein.

      (b)   Accounting. The Employee shall provide the Company with an
            accounting of his or her expenses, which accounting shall clearly
            reflect which expenses were incurred for proper business purposes in
            accordance with the policies adopted by the Company and as such are
            reimbursable by the Company. The Employee shall provide the Company
            with such other supporting documentation and other substantiation of
            reimbursable expenses as will conform to Internal Revenue Service or
            other requirements. All such reimbursements shall be payable by the
            Company to the Employee within a reasonable time after receipt by
            the Company of appropriate documentation therefor.

2.6   Sole Compensation. Employee shall not be entitled to any other
compensation from the Company than as set forth in Article II hereof as a result
of termination of Employee's employment.

                                   ARTICLE III

                            COMPENSATION AND BENEFITS

3.1   Compensation. During the Employment Term of this Agreement, the Company
shall pay Employee such salary and bonus as set forth on Exhibit A.

3.2   Payment. All compensation shall be payable in intervals in accordance with
the general payroll payment practice of the Company. The compensation shall be
subject to such withholdings and deductions by the Company as are required by
law. On termination of the Employment Term, the Company shall be entitled to set
off against any monies owing by the Company to Employee the amount of any monies
owing from Employee to the Company.

3.3   Other Benefits. Employee shall be entitled to participate in any
retirement, pension, profit-sharing, stock option, health plan, insurance,
disability income, incentive compensation and welfare or any other benefit plan
or plans of the Company, which may now or hereafter be in

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effect and for which the Employee is eligible. Notwithstanding the forgoing, the
Company shall be under no obligation to institute or continue the existence of
any such benefit plan.

                                   ARTICLE IV

           CONFIDENTIALITY, NON-SOLICITATION AND NON-COMPETE AGREEMENT

4.1   Non-Disclosure of Confidential Information. Employee hereby acknowledges
and agrees that the duties and services to be performed by Employee under this
Agreement are special and unique and that as of a result of the employment
hereunder, Employee will acquire, develop and use information of a special and
unique nature and value that is not generally known to the public or to the
Company's industry, including but not limited to, certain records, phone
locations, documentation, software programs, price lists, contract prices for
purchase and sale of telephone access and telephone services, customer lists,
prospect lists, pricing on business proposals to new and existing customers,
network configuration, supplier pricing, equipment configurations, business
plans, ledgers and general information, employee records, mailing lists,
accounts receivable and payable ledgers, financial and other records of the
Company or its Affiliates, and other similar matters (all such information being
hereinafter referred to as "CONFIDENTIAL INFORMATION"). Employee further
acknowledges and agrees that the Confidential Information is of great value to
the Company and its Affiliates and that the restrictions and agreements
contained in this Agreement are reasonably necessary to protect the Confidential
Information and the goodwill of the Company. Accordingly, Employee hereby agrees
that:

      (a)   Employee will not, while employed by the Company or at any time
            thereafter, directly or indirectly, except in connection with
            Employee's performance of the duties under this Agreement, or as
            otherwise authorized in writing by the Company for the benefit of
            the Company, divulge to any person, firm, corporation, limited
            liability company, or organization, other than the Company
            (hereinafter referred to as "THIRD PARTIES"), or use or cause or
            authorize any Third Parties to use, the Confidential Information,
            except as required by law; and

      (b)   Upon the termination of Employee's employment for any reason
            whatsoever, Employee shall deliver or cause to be delivered to the
            Company any and all Confidential Information or documents containing
            Confidential Information, including notes, drawings, notebooks,
            notes, records, keys, data and other documents and materials
            belonging to the Company or its affiliates which is in his or her
            possession or under his or her control relating to the Company or
            its affiliates, regardless of the medium upon which it is stored,
            and will deliver to the Company upon such termination of employment
            any other property of the Company or its Affiliates which is in his
            or her possession or control.

4.2   Non-Solicitation Covenant. Employee hereby covenants and agrees that while
employed by the Company and for a period of one (1) year following the
termination of Employee's

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employment with the Company for any reason, Employee shall not (i) directly or
indirectly, contact, solicit, interfere with, or endeavor to entice away from
the Company or its Affiliates any person, firm, corporation, limited liability
company or other entity that was a customer of the Company at any time while
Employee was an employee of the Company or its Affiliates or who is a
"prospective customer" of the Company, or (ii) induce, attempt to induce or hire
any employee (or any person who was an employee during the year preceding the
date of any solicitation) of the Company or its Affiliates to leave the employ
of the Company or its Affiliates, or in any way interfere with the relationship
between any such employee and the Company or its Affiliates. For purposes
hereof, "prospective customer" shall mean any person or entity which has been
solicited for business by Employee or any officer or other employee of the
Company during the one year period preceding the date of termination of
Employee's employment with the Company, or if Employee is still employed by the
Company within the one year period preceding the event in question.

4.3   Non-Competition Covenant. Employee acknowledges that the covenants set
forth in this Section 4.3 are reasonable in scope and essential to the
preservation of the Business of the Company (as defined herein). Employee also
acknowledges that the enforcement of the covenant set forth in this Section 4.3
will not preclude Employee from being gainfully employed in such manner and to
the extent as to provide a standard of living for himself or herself, the
members of his or her family and the others dependent upon Employee of at least
the level to which Employee and they have become accustomed and may expect. In
addition, Employee acknowledges that the Company has obtained an advantage over
its competitors as a result of its name, location and reputation that is
characterized by near permanent relationships with vendors, customers,
principals and other contacts which it has developed at great expense.
Furthermore, Employee acknowledges that competition by him or her following the
termination or expiration of his or her employment would impair the operation of
the Company beyond that which would arise from the competition of an unrelated
third party with similar skills. Employee hereby agrees that he or she shall
not, during his or her employment and for a period of one (1) year after the end
of his or her employment, directly or indirectly, engage in or become directly
or indirectly interested in any proprietorship, partnership, firm, trust,
company, limited liability company or other entity, other than the Company
(whether as owner, partner, trustee, beneficiary, stockholder, member, officer,
director, employee, independent contractor, agent, servant, consultant, lessor,
lessee or otherwise) that competes with the Company in the Business of the
Company in the Restricted Territory (as defined herein), other than owning an
interest in a company listed on a recognized stock exchange in an amount which
does not exceed five percent (5%) of the outstanding stock of such corporation.
For purposes of this Agreement, (i) the term "Business of the Company" shall
include all business activities and ventures related to providing
telecommunications services or products in which the Company is engaged, plans
to engage in the next twelve (12) months following termination of Employee's
employment or has engaged in during the prior twelve (12) months, as determined
at any time during the employment of the Employee; and (ii) the term "Restricted
Territory" means the geographical area consisting of a seventy mile radius
surrounding each city (and including such city) in which the Company maintains
either an office or a telecommunications facility.

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4.4   Remedies.

      (a)   Injunctive Relief. Employee expressly acknowledges and agrees that
            the Business of the Company is highly competitive and that a
            violation of any of the provisions of Sections 4.1, 4.2 or 4.3 would
            cause immediate and irreparable harm, loss and damage to the Company
            not adequately compensable by a monetary award. Employee further
            acknowledges and agrees that the time periods and territorial areas
            provided for herein are the minimum necessary to adequately protect
            the Business of the Company, the enjoyment of the Confidential
            Information and the goodwill of the Company. Without limiting any of
            the other remedies available to the Company at law or in equity, or
            the Company's right or ability to collect money damages, Employee
            agrees that any actual or threatened violation of any of the
            provisions of Sections 4.1, 4.2 or 4.3 may be immediately restrained
            or enjoined by any court of competent jurisdiction, and that a
            temporary restraining order or emergency, preliminary or final
            injunction may be issued in any court of competent jurisdiction,
            without notice and without bond.

      (b)   Enforcement. It is the desire of the parties that the provisions of
            Sections 4.1, 4.2 or 4.3 be enforced to the fullest extent
            permissible under the laws and public policies in each jurisdiction
            in which enforcement might be sought. Accordingly, if any particular
            portion of Sections 4.1, 4.2 or 4.3 shall ever be adjudicated as
            invalid or unenforceable, or if the application thereof to any party
            or circumstance shall be adjudicated to be prohibited by or
            invalidated by such laws or public policies, such section or
            sections shall be (i) deemed amended to delete therefrom such
            portions so adjudicated or (ii) modified as determined appropriate
            by such a court, such deletions or modifications to apply only with
            respect to the operation of such section or sections in the
            particular jurisdictions so adjudicating on the parties and under
            the circumstances as to which so adjudicated.

      (c)   Legal Fees. The Employee shall reimburse the Company for fifty
            percent (50%) of all reasonable costs and expenses, including, but
            not limited to, attorney's fees, incurred by the Company in
            connection with the enforcement of the provisions set forth in this
            Agreement.

4.5   Company. All references to the Company in this Article IV shall include
"Affiliates" of the Company, as that term is construed under Rule 405 of the
Securities Act of 1933, as amended.

4.6   Consideration. The undertakings of Employee pursuant to Sections 4.2 and
4.3 hereof are given to the Company in consideration for the payments, if any,
to be made pursuant to Section 2.4 hereof and the grant of the stock options
referenced in Exhibit A.

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                                    ARTICLE V

                                  MISCELLANEOUS

5.1   Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given, delivered and received
(a) when delivered, if delivered personally, (b) four days after mailing, when
sent by registered or certified mail, return receipt requested and postage
prepaid, (c) one business day after delivery to a private courier service, when
delivered to a private courier service providing documented overnight service,
and (d) on the date of delivery if delivered by telecopy, receipt confirmed,
provided that a confirmation copy is sent on the next business day by first
class mail, postage prepaid, in each case addressed as follows:

      To Employee at his or her home address as set forth on the books and
      records of the Company.

      To Company at:         Universal Access, Inc.
                             100 North Riverside Drive - Suite 2200
                             Chicago, Illinois 60606
                             Attn.: President
                             Tel: 312-660-5000
                             Fax: 312-660-5050

      With a copy to:        Shefsky & Froelich Ltd.
                             444 North Michigan Avenue
                             Suite 2500
                             Chicago, IL  60611
                             Attn.: Mitchell D. Goldsmith
                             Tel: 312-836-4006
                             Fax: 312-527-5921

Any party may change its address for purposes of this paragraph by giving the
other party written notice of the new address in the manner set forth above.

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<PAGE>   11

5.2   Entire Agreement; Amendments, Etc. This Agreement contains the entire
agreement and understanding of the parties hereto, and supersedes all prior
agreements and understandings relating to the subject matter hereof. Except as
provided in Section 4.4(b), no modification, amendment, waiver or alteration of
this Agreement or any provision or term hereof shall in any event be effective
unless the same shall be in writing, executed by both parties hereto, and any
waiver so given shall be effective only in the specific instance and for the
specific purpose for which given.

5.3   Benefit. This Agreement shall be binding upon, and inure to the benefit
of, and shall be enforceable by, the heirs, successors, legal representatives
and permitted assignees of Employee and the successors, assignees and
transferees of the Company. This Agreement or any right or interest hereunder
may not be assigned by Employee without the prior written consent of the
Company. No implication shall be drawn in favor or against either party based
upon the role of such party's counsel in the drafting of this Agreement.

5.4   No Waiver. No failure or delay on the part of any party hereto in
exercising any right, power or remedy hereunder or pursuant hereto shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder or pursuant thereto.

5.5   Severability. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law
but, if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement. If any part of any covenant or
other provision in this Agreement is determined by a court of law to be overly
broad thereby making the covenant unenforceable, the parties hereto agree, and
it is their desire, that the court shall substitute a judicially enforceable
limitation in its place, and that as so modified the covenant shall be binding
upon the parties as if originally set forth herein.

5.6   Compliance and Headings. Time is of the essence of this Agreement. The
headings in this Agreement are intended to be for convenience and reference
only, and shall not define or limit the scope, extent or intent or otherwise
affect the meaning of any portion hereof.

5.7   Governing Law. The parties agree that this Agreement shall be governed by,
interpreted and construed in accordance with the laws of the State of Illinois,
and the parties agree that any suit, action or proceeding with respect to this
Agreement shall be brought in the courts of Cook County in the State of Illinois
or in the U.S. District Court for the Northern District of Illinois. The parties
hereto hereby accept the exclusive jurisdiction of those courts for the purpose
of any such suit, action or proceeding. Venue for any such action, in addition
to any other venue permitted by statute, will be Cook County, Illinois. The
parties hereby waive their right to trial by jury on any such action.

                                       11
<PAGE>   12

5.8   Counterparts. This Agreement may be executed in one or more counterparts,
whether by original, photocopy or facsimile, each of which will be deemed an
original and all of which together will constitute one and the same instrument.

5.9   Recitals. The Recitals set forth above are hereby incorporated in and made
a part of this Agreement by this reference.

5.10  Arbitration. Except as expressly contemplated by Article IV, any dispute
arising between the parties pursuant to this Agreement shall be submitted to
binding arbitration. Any arbitration proceeding involving any provision hereof
will be conducted in Chicago, Illinois. Except as otherwise provided in this
Agreement, all arbitration proceedings will be conducted in accordance with the
then current National Rules for the Resolution of Employment Disputes of the
American Arbitration Association ("AAA"). One arbitrator shall conduct the
proceedings, and shall be elected in accordance with the procedures of the AAA.
The arbitrator shall allow such discovery as the arbitrator determines
appropriate under the circumstances. The arbitrator shall determine which party,
if either, prevailed and shall award the prevailing party its costs. Each party
shall bear his, her or its respective legal fees. The award and decision of the
arbitrator shall be conclusive and binding on all parties to this Agreement and
judgment on the award may be entered in any court of competent jurisdiction. The
parties acknowledge and agree that any arbitration award may be enforced against
either or both of them in a court of competent jurisdiction and each waives any
right to contest the validity or enforceability of such award. The parties
further agree to be bound by the provisions of any statute of limitations, which
would be applicable in a court of law to the controversy or claim which is the
subject of any arbitration proceeding initiated under this Agreement. The
parties further agree that they are entitled in any arbitration proceeding to
the entry of an order, by a court of competent jurisdiction pursuant to an
opinion of the arbitrator, for specific performance of any of the requirements
of this Agreement. The parties further agree that the arbitrator shall provide a
statement of reasons explaining the basis of the decision rendered.

5.11  Survival. Notwithstanding anything to the contrary contained herein, the
terms of Articles III, IV, and V hereof shall survive any termination of this
Agreement and remain in full force and effect thereafter.

                                       12
<PAGE>   13

      IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed and delivered as of the day and year first above written.

                                          UNIVERSAL ACCESS, INC.

                                          By:  /s/ PATRICK C. SHUTT
                                             -----------------------------------
                                          Its: CEO

                                          EMPLOYEE:

                                                /s/ WILLIAM J. COYNE III
                                          --------------------------------------
                                          NAME: William J. Coyne III

                                       13
<PAGE>   14

               EXHIBIT A - ECONOMIC TERMS OF EMPLOYMENT AGREEMENT
                             UNIVERSAL ACCESS, INC.

A.    Compensation.

      1.    During the Employment Term, the Company shall pay Employee such
            salary and benefits as shall be agreed upon each year between
            Employee and the Company. For the Initial Term, the Company shall
            pay Employee a base salary of $185,000 per year. Thereafter, the
            Company shall review the Employee's base salary annually.

      2.    Bonus. The Company may, at the Company's sole discretion, in
            addition to Employee's base salary, pay Employee an annual bonus
            with respect to each calendar year in the Employment Term up to
            $100,000 upon achieving standard sales objectives.

      3.    Other Benefits. Employee shall be entitled to participate in any
            retirement, pension, profit-sharing, stock option, health plan,
            insurance, disability income, incentive compensation, vacation and
            welfare or any other benefit plan or plans of the Company which may
            now or hereafter be in effect and for which he or she is eligible.

      4.    Vacation. Employee shall be entitled to up to four (4) weeks of paid
            vacation in each calendar year during the Employment Term, provided,
            however, that the Employee's 2000 calendar year vacation shall be
            prorated for the portion of the calendar year remaining after the
            date hereof; Employee shall be entitled to carry forward from one
            calendar year during the Employment Term to the next calendar year
            up to one additional week's vacation, to the extent it was accrued
            and not taken in the previous year (i.e. not more than five week's
            total vacation can be taken in any year).

      5.    Stock Options. Employee shall be entitled to options to purchase up
            to 450,000 shares of the Company's common stock at fair market value
            per share in accordance with the Company's stock option plan, as
            further specified in the form of stock option agreement between
            Employee and the Company.

                                       14

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