Document:

Exhibit 10.03

      THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT
      HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
      NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR
      ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
      SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE
      AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS,
      THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT.

                                                               Right to Purchase
                                                               XXX,XXX Shares
                                                               of Common Stock

                             STOCK PURCHASE WARRANT

      THIS CERTIFIES THAT, for value received, THE WARRANT HOLDER or its
registered assigns, is entitled to purchase form Universe2U Inc., a Nevada
corporation (the "Company"), at any time or from time to time during the period
specified in Paragraph 2 hereof, One Hundred Eighty-Five Thousand (185,000)
fully paid and nonassessable shares of the Company's Common Stock par value
$.00001 per share (the "Common Stock"), at an exercise price per share equal to
$0.30 (the "Exercise Price"). The term "Warrant Shares," as used herein, refers
to the shares of Common Stock purchasable hereunder. The Warrant Shares and the
Exercise Price are subject to adjustment as provided in Paragraph 4 hereof. The
term "Warrants" means this Warrant and the other warrants issued pursuant to
that certain Securities Purchase Agreement, dated June 25, 2002, by and among
the Company and the Buyers listed on the execution page thereof (the "Securities
Purchase Agreement"), including any additional warrants issuable pursuant to
Section 4(l) thereof.

      This Warrant is subject to the following terms, provisions, and
conditions:

2. Manner of Exercise; Issuance of Certificates; Payment for Shares. Subject to
the provisions hereof, this Warrant may be exercised by the holder hereof, in
whole or in part, by the surrender of this Warrant, together with a completed
exercise agreement in the form attached hereto (the "Exercise Agreement"), to
the Company during normal business hours on any business day at the Company's
principal executive offices (or such other office or agency of the Company as it
may designate by notice to the holder hereof), and upon (i) payment to the
Company in cash, by certified or official bank check or by wire transfer for the
account of the Company of the Exercise Price for the Warrant Shares specified in
the Exercise Agreement or (ii) if the resale of the Warrant Shares by the holder
is not then registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), delivery to the
Company of a written notice of an election to effect a "Cashless Exercise" (as
defined in Section 11(c) below) for the Warrant Shares specified in the Exercise
Agreement. The Warrant Shares so purchased shall be deemed to be issued to the
holder hereof or such holder's designee, as the record owner of such shares, as
of the close of business on the date on which this Warrant shall have been
surrendered, the completed Exercise Agreement shall have been delivered, and
payment shall have been made for such shares as set forth above. Certificates
for the Warrant Shares so purchased, representing the aggregate number of shares
specified in the Exercise Agreement, shall be delivered to the holder hereof
within a reasonable time, not exceeding three (3) business days, after this
Warrant shall have been so exercised. The certificates so delivered shall be in
such denominations as may be requested by the holder hereof and shall be
registered in the name of such holder or such other name as shall be designated
by such holder. If this Warrant shall have been exercised only in part, then,
unless this Warrant has expired, the Company shall, at its expense, at the time
of delivery of such certificates, deliver to the holder a new Warrant
representing the number of shares with respect to which this Warrant shall not
then have been exercised. In addition to all other available remedies at law or
in equity, if the Company fails to deliver certificates for the Warrant Shares
within three (3) business days after this Warrant is exercised, then the Company
shall pay to the holder in cash a penalty (the "Penalty") equal to 2% of the
number of Warrant Shares that the holder is entitled to multiplied by the Market
Price for each day that the Company fails to deliver certificates for the
Warrant Shares. For example, if the holder is entitled to 100,000 Warrant Shares
and the Market Price is $2.00, then the Company shall pay to the holder $4,000
for each day that the Company fails to deliver certificates for the Warrant
Shares. The Penalty shall be paid to the holder by the fifth day of the month
following the month in which it has accrued.

      Notwithstanding anything in this Warrant to the contrary, in no event
shall the holder of this Warrant be entitled to exercise a number of Warrants
(or portions thereof) in excess of the number of Warrants (or portions thereof)
upon exercise of which the sum of (i) the number of shares of Common Stock
beneficially owned by the holder and its affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the
unexercised Warrants and the unexercised or unconverted portion of any other
securities of the Company (including the Debentures (as defined in the
Securities Purchase Agreement)) subject to a limitation on conversion or
exercise analogous to the limitation contained herein) and (ii) the number of
shares of Common Stock issuable upon exercise of the Warrants (or portions
thereof) with respect to which the determination described herein is being made,
would result in beneficial ownership by the holder and its affiliates of more
than 4.9% of the then outstanding shares of Common Stock. For purposes of the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as

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amended, and Regulation 13D-G thereunder, except as otherwise provided in clause
(i) of the preceding sentence. The holder of this Warrant may waive the
limitations set forth herein by sixty-one (61) days written notice to the
Company. Notwithstanding anything to the contrary contained herein, the
limitation on exercise of this Warrant set forth herein may not be amended
without the written consent of the holder hereof and the Company.

3. Period of Exercise. This Warrant is exercisable at any time or from time to
time on or after the date on which this Warrant is issued and delivered pursuant
to the terms of the Securities Purchase Agreement and before 6:00 p.m., New
York, New York time on June 25, 2005 (the "Exercise Period").

4. Certain Agreements of the Company. The Company hereby covenants and agrees as
follows:

      A. Shares to be Fully Paid. All Warrant Shares will, upon issuance in
accordance with the terms of this Warrant, be validly issued, fully paid, and
nonassessable and free from all taxes, liens, and charges with respect to the
issue thereof.

      B. Reservation of Shares. During the Exercise Period, the Company shall
use reasonable commercial efforts at all times to have authorized, and reserved
for the purpose of issuance upon exercise of this Warrant, a sufficient number
of shares of Common Stock to provide for the exercise of this Warrant.

      C. Listing. The Company shall use reasonable commercial efforts to
promptly secure the listing of the shares of Common Stock issuable upon exercise
of the Warrant upon each national securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed (subject to
official notice of issuance upon exercise of this Warrant) and shall use similar
efforts to maintain, so long as any other shares of Common Stock shall be so
listed, such listing of all shares of Common Stock from time to time issuable
upon the exercise of this Warrant; and the Company shall use reasonable
commercial efforts to so list on each national securities exchange or automated
quotation system, as the case may be, and shall use similar efforts to maintain
such listing of, any other shares of capital stock of the Company issuable upon
the exercise of this Warrant if and so long as any shares of the same class
shall be listed on such national securities exchange or automated quotation
system.

      D. Certain Actions Prohibited. The Company will not, by amendment of its
charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, and (ii)
will take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

      E. Successors and Assigns. This Warrant will be binding upon any entity
succeeding to the Company by merger, consolidation, or acquisition of all or
substantially all the Company's assets.

      4. Antidilution Provisions. During the Exercise Period, the Exercise Price
and the number of Warrant Shares shall be subject to adjustment from time to
time as provided in this Paragraph 4.

      In the event that any adjustment of the Exercise Price as required herein
results in a fraction of a cent, such Exercise Price shall be rounded up to the
nearest cent.

      F. Adjustment of Exercise Price and Number of Shares upon Issuance of
Common Stock. Except as otherwise provided in Paragraphs 4(c) and 4(e) hereof,
if and whenever on or after the date of issuance of this Warrant, the Company
issues or sells, or in accordance with Paragraph 4(b) hereof is deemed to have
issued or sold, any shares of Common Stock for no consideration or for a
consideration per share (before deduction of reasonable expenses or commissions
or underwriting discounts or allowances in connection therewith) less than the
Market Price (as hereinafter defined) on the date of issuance (a "Dilutive
Issuance"), then immediately upon the Dilutive Issuance, the Exercise Price will
be reduced to a price determined by multiplying the Exercise Price in effect
immediately prior to the Dilutive Issuance by a fraction, (i) the numerator of
which is an amount equal to the sum of (x) the number of shares of Common Stock
actually outstanding immediately prior to the Dilutive Issuance, plus (y) the
quotient of the aggregate consideration, calculated as set forth in Paragraph
4(b) hereof, received by the Company upon such Dilutive Issuance divided by the
Market Price in effect immediately prior to the Dilutive Issuance, and (ii) the
denominator of which is the total number of shares of Common Stock Deemed
Outstanding (as defined below) immediately after the Dilutive Issuance.

      G. Effect on Exercise Price of Certain Events. For purposes of determining
the adjusted Exercise Price under Paragraph 4(a) hereof, the following will be
applicable:

            1. Issuance of Rights or Options. If the Company in any manner
issues or grants any warrants, rights or options, whether or not immediately
exercisable, to subscribe for or to purchase Common Stock or other securities
convertible into or exchangeable for Common Stock ("Convertible Securities")
(such warrants, rights and options to purchase Common Stock or Convertible
Securities are hereinafter referred to as "Options") and the price per share for
which Common Stock is issuable upon the exercise

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of such Options is less than the Market Price on the date of issuance or grant
of such Options, then the maximum total number of shares of Common Stock
issuable upon the exercise of all such Options will, as of the date of the
issuance or grant of such Options, be deemed to be outstanding and to have been
issued and sold by the Company for such price per share. For purposes of the
preceding sentence, the "price per share for which Common Stock is issuable upon
the exercise of such Options" is determined by dividing (i) the total amount, if
any, received or receivable by the Company as consideration for the issuance or
granting of all such Options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise of all such
Options, plus, in the case of Convertible Securities issuable upon the exercise
of such Options, the minimum aggregate amount of additional consideration
payable upon the conversion or exchange thereof at the time such Convertible
Securities first become convertible or exchangeable, by (ii) the maximum total
number of shares of Common Stock issuable upon the exercise of all such Options
(assuming full conversion of Convertible Securities, if applicable). No further
adjustment to the Exercise Price will be made upon the actual issuance of such
Common Stock upon the exercise of such Options or upon the conversion or
exchange of Convertible Securities issuable upon exercise of such Options.

            2. Issuance of Convertible Securities. If the Company in any manner
issues or sells any Convertible Securities, whether or not immediately
convertible (other than where the same are issuable upon the exercise of
Options) and the price per share for which Common Stock is issuable upon such
conversion or exchange is less than the Market Price on the date of issuance,
then the maximum total number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities will, as of the date
of the issuance of such Convertible Securities, be deemed to be outstanding and
to have been issued and sold by the Company for such price per share. For the
purposes of the preceding sentence, the "price per share for which Common Stock
is issuable upon such conversion or exchange" is determined by dividing (i) the
total amount, if any, received or receivable by the Company as consideration for
the issuance or sale of all such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, payable to the Company
upon the conversion or exchange thereof at the time such Convertible Securities
first become convertible or exchangeable, by (ii) the maximum total number of
shares of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities. No further adjustment to the Exercise Price will be made
upon the actual issuance of such Common Stock upon conversion or exchange of
such Convertible Securities.

            3. Change in Option Price or Conversion Rate. If there is a change
at any time in (i) the amount of additional consideration payable to the Company
upon the exercise of any Options; (ii) the amount of additional consideration,
if any, payable to the Company upon the conversion or exchange of any
Convertible Securities; or (iii) the rate at which any Convertible Securities
are convertible into or exchangeable for Common Stock (other than under or by
reason of provisions designed to protect against dilution), the Exercise Price
in effect at the time of such change will be readjusted to the Exercise Price
which would have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed additional consideration
or changed conversion rate, as the case may be, at the time initially granted,
issued or sold.

            4. Treatment of Expired Options and Unexercised Convertible
Securities. If, in any case, the total number of shares of Common Stock issuable
upon exercise of any Option or upon conversion or exchange of any Convertible
Securities is not, in fact, issued and the rights to exercise such Option or to
convert or exchange such Convertible Securities shall have expired or
terminated, the Exercise Price then in effect will be readjusted to the Exercise
Price which would have been in effect at the time of such expiration or
termination had such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination (other than in respect of
the actual number of shares of Common Stock issued upon exercise or conversion
thereof), never been issued.

            5. Calculation of Consideration Received. If any Common Stock,
Options or Convertible Securities are issued, granted or sold for cash, the
consideration received therefor for purposes of this Warrant will be the amount
received by the Company therefor, before deduction of reasonable commissions,
underwriting discounts or allowances or other reasonable expenses paid or
incurred by the Company in connection with such issuance, grant or sale. In case
any Common Stock, Options or Convertible Securities are issued or sold for a
consideration part or all of which shall be other than cash, the amount of the
consideration other than cash received by the Company will be the fair value of
such consideration, except where such consideration consists of securities, in
which case the amount of consideration received by the Company will be the
Market Price thereof as of the date of receipt. In case any Common Stock,
Options or Convertible Securities are issued in connection with any acquisition,
merger or consolidation in which the Company is the surviving corporation, the
amount of consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving corporation as is
attributable to such Common Stock, Options or Convertible Securities, as the
case may be. The fair value of any consideration other than cash or securities
will be determined in good faith by the Board of Directors of the Company.

            6. Exceptions to Adjustment of Exercise Price. No adjustment to the
Exercise Price will be made (i) upon the exercise of any warrants, options or
convertible securities granted, issued and outstanding on the date of issuance
of this Warrant; (ii)

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upon the grant or exercise of any stock or options which may hereafter be
granted or exercised under any employee benefit plan, stock option plan or
restricted stock plan of the Company now existing or to be implemented in the
future, so long as the issuance of such stock or options is approved by a
majority of the independent members of the Board of Directors of the Company or
a majority of the members of a committee of independent directors established
for such purpose; or (iii) upon the exercise of the Warrants.

      H. Subdivision or Combination of Common Stock. If the Company at any time
subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company at any
time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock acquirable hereunder
into a smaller number of shares, then, after the date of record for effecting
such combination, the Exercise Price in effect immediately prior to such
combination will be proportionately increased.

      I. Adjustment in Number of Shares. Upon each adjustment of the Exercise
Price pursuant to the provisions of this Paragraph 4, the number of shares of
Common Stock issuable upon exercise of this Warrant shall be adjusted by
multiplying a number equal to the Exercise Price in effect immediately prior to
such adjustment by the number of shares of Common Stock issuable upon exercise
of this Warrant immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.

      J. Consolidation, Merger or Sale. In case of any consolidation of the
Company with, or merger of the Company into any other corporation, or in case of
any sale or conveyance of all or substantially all of the assets of the Company
other than in connection with a plan of complete liquidation of the Company,
then as a condition of such consolidation, merger or sale or conveyance,
adequate provision will be made whereby the holder of this Warrant will have the
right to acquire and receive upon exercise of this Warrant in lieu of the shares
of Common Stock immediately theretofore acquirable upon the exercise of this
Warrant, such shares of stock, securities or assets as may be issued or payable
with respect to or in exchange for the number of shares of Common Stock
immediately theretofore acquirable and receivable upon exercise of this Warrant
had such consolidation, merger or sale or conveyance not taken place. In any
such case, the Company will make appropriate provision to insure that the
provisions of this Paragraph 4 hereof will thereafter be applicable as nearly as
may be in relation to any shares of stock or securities thereafter deliverable
upon the exercise of this Warrant. The Company will not effect any
consolidation, merger or sale or conveyance unless prior to the consummation
thereof, the successor corporation (if other than the Company) assumes by
written instrument the obligations under this Paragraph 4 and the obligations to
deliver to the holder of this Warrant such shares of stock, securities or assets
as, in accordance with the foregoing provisions, the holder may be entitled to
acquire.

      K. Distribution of Assets. In case the Company shall declare or make any
distribution of its assets (including cash) to holders of Common Stock as a
partial liquidating dividend, by way of return of capital or otherwise, then,
after the date of record for determining stockholders entitled to such
distribution, but prior to the date of distribution, the holder of this Warrant
shall be entitled upon exercise of this Warrant for the purchase of any or all
of the shares of Common Stock subject hereto, to receive the amount of such
assets which would have been payable to the holder had such holder been the
holder of such shares of Common Stock on the record date for the determination
of stockholders entitled to such distribution.

      L. Notice of Adjustment. Upon the occurrence of any event which requires
any adjustment of the Exercise Price, then, and in each such case, the Company
shall give notice thereof to the holder of this Warrant, which notice shall
state the Exercise Price resulting from such adjustment and the increase or
decrease in the number of Warrant Shares purchasable at such price upon
exercise, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. Such calculation shall be certified
by the Chief Financial Officer of the Company.

      M. Minimum Adjustment of Exercise Price. No adjustment of the Exercise
Price shall be made in an amount of less than 1% of the Exercise Price in effect
at the time such adjustment is otherwise required to be made, but any such
lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.

      N. No Fractional Shares. No fractional shares of Common Stock are to be
issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Market Price of a share of Common
Stock on the date of such exercise.

      O. Other Notices. In case at any time:

            1. the Company shall declare any dividend upon the Common Stock
payable in shares of stock of any class or make any other distribution
(including dividends or distributions payable in cash out of retained earnings)
to the holders of the Common Stock;

            2. the Company shall offer for subscription pro rata to the holders
of the Common Stock any additional shares of stock of any class or other rights;

            3. there shall be any capital reorganization of the Company, or
reclassification of the Common Stock, or consolidation or merger of the Company
with or into, or sale of all or substantially all its assets to, another
corporation or entity; or

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            4. there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company; then, in each such case, the Company
shall give to the holder of this Warrant (a) notice of the date on which the
books of the Company shall close or a record shall be taken for determining the
holders of Common Stock entitled to receive any such dividend, distribution, or
subscription rights or for determining the holders of Common Stock entitled to
vote in respect of any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up and (b) in the case of any
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up, notice of the date (or, if not then known, a
reasonable approximation thereof by the Company) when the same shall take place.
Such notice shall also specify the date on which the holders of Common Stock
shall be entitled to receive such dividend, distribution, or subscription rights
or to exchange their Common Stock for stock or other securities or property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, or winding-up, as the case may be. Such notice
shall be given at least 30 days prior to the record date or the date on which
the Company's books are closed in respect thereto. Failure to give any such
notice or any defect therein shall not affect the validity of the proceedings
referred to in clauses (i), (ii), (iii) and (iv) above.

      P. Certain Definitions.

            1. "Common Stock Deemed Outstanding" shall mean the number of shares
of Common Stock actually outstanding (not including shares of Common Stock held
in the treasury of the Company), plus (x) pursuant to Paragraph 4(b)(i) hereof,
the maximum total number of shares of Common Stock issuable upon the exercise of
Options, as of the date of such issuance or grant of such Options, if any, and
(y) pursuant to Paragraph 4(b)(ii) hereof, the maximum total number of shares of
Common Stock issuable upon conversion or exchange of Convertible Securities, as
of the date of issuance of such Convertible Securities, if any.

            2. "Market Price," as of any date, (i) means the average of the last
reported sale prices for the shares of Common Stock on the OTCBB for the five
(5) Trading Days immediately preceding such date as reported by Bloomberg, or
(ii) if the OTCBB is not the principal trading market for the shares of Common
Stock, the average of the last reported sale prices on the principal trading
market for the Common Stock during the same period as reported by Bloomberg, or
(iii) if market value cannot be calculated as of such date on any of the
foregoing bases, the Market Price shall be the fair market value as reasonably
determined in good faith by (a) the Board of Directors of the Company or, at the
option of a majority-in-interest of the holders of the outstanding Warrants by
(b) an independent investment bank of nationally recognized standing in the
valuation of businesses similar to the business of the corporation. The manner
of determining the Market Price of the Common Stock set forth in the foregoing
definition shall apply with respect to any other security in respect of which a
determination as to market value must be made hereunder.

            3. "Common Stock," for purposes of this Paragraph 4, includes the
Common Stock, par value $.00001 per share, and any additional class of stock of
the Company having no preference as to dividends or distributions on
liquidation, provided that the shares purchasable pursuant to this Warrant shall
include only shares of Common Stock, par value $.00001 per share, in respect of
which this Warrant is exercisable, or shares resulting from any subdivision or
combination of such Common Stock, or in the case of any reorganization,
reclassification, consolidation, merger, or sale of the character referred to in
Paragraph 4(e) hereof, the stock or other securities or property provided for in
such Paragraph.

      5. Issue Tax. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

5. No Rights or Liabilities as a Shareholder. This Warrant shall not entitle the
holder hereof to any voting rights or other rights as a stockholder of the
Company. No provision of this Warrant, in the absence of affirmative action by
the holder hereof to purchase Warrant Shares, and no mere enumeration herein of
the rights or privileges of the holder hereof, shall give rise to any liability
of such holder for the Exercise Price or as a shareholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.

6. Transfer, Exchange, and Replacement of Warrant.

      A. Restriction on Transfer. This Warrant and the rights granted to the
holder hereof are transferable, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the form attached
hereto, at the office or agency of the Company referred to in Paragraph 7(e)
below, provided, however, that any transfer or assignment shall be subject to
the conditions set forth in Paragraph 7(f) hereof and to the applicable
provisions of the Securities Purchase Agreement. Until due presentment for
registration of transfer on the books of the Company, the Company may treat the
registered holder hereof as the owner and holder hereof for all purposes, and
the Company shall not be affected by any notice to the contrary. Notwithstanding
anything to the contrary contained herein, the registration rights described in
Paragraph 8 are assignable only in accordance with the provisions of that
certain Registration Rights Agreement of even date herewith by and among the
Company and the other signatories thereto (the "Registration Rights Agreement").

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      B. Warrant Exchangeable for Different Denominations. This Warrant is
exchangeable, upon the surrender hereof by the holder hereof at the office or
agency of the Company referred to in Paragraph 7(e) below, for new Warrants of
like tenor representing in the aggregate the right to purchase the number of
shares of Common Stock which may be purchased hereunder, each of such new
Warrants to represent the right to purchase such number of shares as shall be
designated by the holder hereof at the time of such surrender.

      C. Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

      D. Cancellation; Payment of Expenses. Upon the surrender of this Warrant
in connection with any transfer, exchange, or replacement as provided in this
Paragraph 7, this Warrant shall be promptly canceled by the Company. The Company
shall pay all taxes (other than securities transfer taxes) and all other
expenses (other than legal expenses, if any, incurred by the holder or
transferees) and charges payable in connection with the preparation, execution,
and delivery of Warrants pursuant to this Paragraph 7.

      E. Register. The Company shall maintain, at its principal executive
offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof), a register for this Warrant, in which the Company
shall record the name and address of the person in whose name this Warrant has
been issued, as well as the name and address of each transferee and each prior
owner of this Warrant.

      F. Exercise or Transfer Without Registration. If, at the time of the
surrender of this Warrant in connection with any exercise, transfer, or exchange
of this Warrant, this Warrant (or, in the case of any exercise, the Warrant
Shares issuable hereunder), shall not be registered under the Securities Act of
1933, as amended (the "Securities Act") and under applicable state securities or
blue sky laws, the Company may require, as a condition of allowing such
exercise, transfer, or exchange, (i) that the holder or transferee of this
Warrant, as the case may be, furnish to the Company a written opinion of
counsel, which opinion and counsel are acceptable to the Company, to the effect
that such exercise, transfer, or exchange may be made without registration under
said Act and under applicable state securities or blue sky laws, (ii) that the
holder or transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the transferee be an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act; provided that no such opinion, letter or status as an "accredited investor"
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act. The first holder of this Warrant, by taking and holding the
same, represents to the Company that such holder is acquiring this Warrant for
investment and not with a view to the distribution thereof.

7. Registration Rights. The initial holder of this Warrant (and certain
assignees thereof) is entitled to the benefit of such registration rights in
respect of the Warrant Shares as are set forth in Section 2 of the Registration
Rights Agreement.

8. Notices. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such holder at the address shown for such holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 30 West Beaver Creek
Road, Suite 109, Richmond Hill, Ontario, Canada L4B 3K1, Attention: Chief
Executive Officer, or at such other address as shall have been furnished to the
holder of this Warrant by notice from the Company. Any such notice, request, or
other communication may be sent by facsimile, but shall in such case be
subsequently confirmed by a writing personally delivered or sent by certified or
registered mail or by recognized overnight mail courier as provided above. All
notices, requests, and other communications shall be deemed to have been given
either at the time of the receipt thereof by the person entitled to receive such
notice at the address of such person for purposes of this Paragraph 9, or, if
mailed by registered or certified mail or with a recognized overnight mail
courier upon deposit with the United States Post Office or such overnight mail
courier, if postage is prepaid and the mailing is properly addressed, as the
case may be.

9. Governing Law. THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK
WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS ENTERED
INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH

                                       6
<PAGE>

DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER THIS WARRANT SHALL BE RESPONSIBLE
FOR ALL FEES AND EXPENSES, INCLUDING ATTORNEYS' FEES, INCURRED BY THE PREVAILING
PARTY IN CONNECTION WITH SUCH DISPUTE.

10. Miscellaneous.

      A. Amendments. This Warrant and any provision hereof may only be amended
by an instrument in writing signed by the Company and the holder hereof.

      B. Descriptive Headings. The descriptive headings of the several
paragraphs of this Warrant are inserted for purposes of reference only, and
shall not affect the meaning or construction of any of the provisions hereof.

      C. Cashless Exercise. Notwithstanding anything to the contrary contained
in this Warrant, if the resale of the Warrant Shares by the holder is not then
registered pursuant to an effective registration statement under the Securities
Act, this Warrant may be exercised by presentation and surrender of this Warrant
to the Company at its principal executive offices with a written notice of the
holder's intention to effect a cashless exercise, including a calculation of the
number of shares of Common Stock to be issued upon such exercise in accordance
with the terms hereof (a "Cashless Exercise"). In the event of a Cashless
Exercise, in lieu of paying the Exercise Price in cash, the holder shall
surrender this Warrant for that number of shares of Common Stock determined by
multiplying the number of Warrant Shares to which it would otherwise be entitled
by a fraction, the numerator of which shall be the difference between the then
current Market Price per share of the Common Stock and the Exercise Price, and
the denominator of which shall be the then current Market Price per share of
Common Stock. For example, if the holder is exercising 100,000 Warrants with a
per Warrant exercise price of $0.75 per share through a cashless exercise when
the Common Stock's current Market Price per share is $2.00 per share, then upon
such Cashless Exercise the holder will receive 62,500 shares of Common Stock.

      D. Remedies. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Warrant will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Warrant, that the
holder shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Warrant and
to enforce specifically the terms and provisions thereof, without the necessity
of showing economic loss and without any bond or other security being required.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       7
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

                                        UNIVERSE2U INC.

                                        By: /s/ Kim Allen
                                            ------------------------------------
                                            Kim Allen
                                            Chief Executive Officer

Dated as of June 25, 2002

                                       8
<PAGE>

                           FORM OF EXERCISE AGREEMENT

                                                   Dated: _________ __, 200_

To: Universe2U Inc.

      The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase _________ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check in the
amount of, or, if the resale of such Common Stock by the undersigned is not
currently registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended, by surrender of securities issued by the
Company (including a portion of the Warrant) having a market value (in the case
of a portion of this Warrant, determined in accordance with Section 11(c) of the
Warrant) equal to $ _________. Please issue a certificate or certificates for
such shares of Common Stock in the name of and pay any cash for any fractional
share to:

                                        Name:      _____________________________

                                        Signature:

                                        Address:   _____________________________
                                                   _____________________________

                                         Note:         The above signature
                                                       should correspond exactly
                                                       with the name on the face
                                                       of the within Warrant, if
                                                       applicable.

and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.

            The undersigned represents and warrants that all offers and sales by
the undersigned of the securities issuable to the undersigned upon conversion of
the Debentures shall be made pursuant to registration of the securities under
the Securities Act of 1933, as amended (the "Act"), or pursuant to an exemption
from registration under the Act, and in compliance with any applicable
prospectus delivery requirements.

<PAGE>

                               FORM OF ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock covered thereby set forth hereinbelow, to:

Name of Assignee                    Address                         No of Shares
----------------                    -------                         ------------

, and hereby irrevocably constitutes and appoints ____________________________
as agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.

Dated: _________ __, 200_

In the presence of:                           __________________________________

                                        Name: __________________________________

                                        Signature: _____________________________

                                        Title of Signing Officer or Agent
                                          (if any):

                                        Address: _______________________________
                                                 _______________________________
                                                 _______________________________

                                        Note:    The above signature should
                                                 correspond exactly with the
                                                 name on the face of the within
                                                 Warrant, if applicable.Exhibit 10.04

                               SECURITY AGREEMENT

      SECURITY AGREEMENT (this "Agreement"), dated as of June 25, 2002, by and
among Universe2U Inc., a Nevada corporation (the "Company"), the subsidiaries of
the Company signature hereto, and the secured parties signatory hereto and their
respective endorsees, transferees and assigns (collectively, the "Secured
Party").

                              W I T N E S S E T H:

      WHEREAS, pursuant to a Securities Purchase Agreement, dated the date
hereof between the Company and the Secured Party (the "Purchase Agreement"), the
Company has agreed to issue to the Secured Party and the Secured Party has
agreed to purchase from the Company certain of the Company's 12% Secured
Convertible Debentures, due one year from the date of issue (the "Debentures"),
which are convertible into shares of the Company's Common Stock, $.00001 par
value (the "Common Stock"). In connection therewith, the Company shall issue the
Secured Party certain Common Stock purchase warrants dated as of the date hereof
to purchase the number of shares of Common Stock indicated below each Secured
Party's name on the Purchase Agreement (the "Warrants");

      WHEREAS, in order to induce the Secured Party to purchase the Debentures,
the Company has agreed to execute and deliver to the Secured Party this
Agreement for the benefit of the Secured Party and to grant to it a security
interest in certain property of the Company to secure the prompt payment,
performance and discharge in full of all of the Company's obligations under the
Debentures and exercise and discharge in full of the Company's obligations under
the Warrants; and

      WHEREAS, the Company has agreed to fund the capital requirements of its
subsidiaries from time to time and the proceeds of this transaction will improve
the Company's ability to do so, thereby benefiting such subsidiaries.

      NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:

11.   Certain Definitions. As used in this Agreement, the following terms shall
      have the meanings set forth in this Section 1. Terms used but not
      otherwise defined in this Agreement that are defined in Article 9 of the
      UCC (such as "general intangibles" and "proceeds") shall have the
      respective meanings given such terms in Article 9 of the UCC.

      A. "Collateral" means the collateral in which the Secured Party is granted
a security interest by this Agreement and which shall include the following,
whether presently owned or existing or hereafter acquired or coming into
existence, and all additions and accessions thereto and all substitutions and
replacements thereof, and all proceeds, products and accounts thereof,
including, without limitation, all proceeds from the sale or transfer of the
Collateral and of insurance covering the same and of any tort claims in
connection therewith:

            1. All Goods of the Company, including, without limitations, all
machinery, equipment, computers, motor vehicles, trucks, tanks, boats, ships,
appliances, furniture, special and general tools, fixtures, test and quality
control devices and other equipment of every kind and nature and wherever
situated, together with all documents of title and documents representing the
same, all additions and accessions thereto, replacements therefor, all parts
therefor, and all substitutes for any of the foregoing and all other items used
and useful in connection with the Company's businesses and all improvements
thereto (collectively, the "Equipment"); and

            2. All Inventory of the Company; and

            3. All of the Company's contract rights and general intangibles,
including, without limitation, all partnership interests, stock or other
securities, licenses, distribution and other agreements, computer software
development rights, leases, franchises, customer lists, quality control
procedures, grants and rights, goodwill, trademarks, service marks, trade
styles, trade names, patents, patent applications, copyrights, deposit accounts,
and income tax refunds (collectively, the "General Intangibles"); and

            4. All Receivables of the Company including all insurance proceeds,
and rights to refunds or indemnification whatsoever owing, together with all
instruments, all documents of title representing any of the foregoing, all
rights in any merchandising, goods, equipment, motor vehicles and trucks which
any of the same may represent, and all right, title, security and guaranties
with respect to each Receivable, including any right of stoppage in transit; and

            5. All of the Company's documents, instruments and chattel paper,
files, records, books of account, business papers, computer programs and the
products and proceeds of all of the foregoing Collateral set forth in clauses
(i)-(iv) above.

      B. "Company" shall mean, collectively, the Company and all of the
majority-owned subsidiaries of the Company, a list of which is contained on
Schedule A, attached hereto.

      C. "Obligations" means all of the Company's obligations under this
Agreement and the Debentures, in each case, whether now or hereafter existing,
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated
or unliquidated, whether or not jointly owed with others, and whether or not
from time to time decreased or extinguished and later decreased, created or
incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from the Secured Party as a preference, fraudulent
transfer or otherwise as such obligations may be amended, supplemented,
converted, extended or modified from time to time.

<PAGE>

      D. "UCC" means the Uniform Commercial Code, as currently in effect in the
State of New York.

12.   Grant of Security Interest. As an inducement for the Secured Party to
      purchase the Debentures and to secure the complete and timely payment,
      performance and discharge in full, as the case may be, of all of the
      Obligations, the Company hereby, unconditionally and irrevocably, pledges,
      grants and hypothecates to the Secured Party, a continuing security
      interest in, a continuing lien upon, an unqualified right to possession
      and disposition of and a right of set-off against, in each case to the
      fullest extent permitted by law, all of the Company's right, title and
      interest of whatsoever kind and nature in and to the Collateral (the
      "Security Interest").

13.   Representations, Warranties, Covenants and Agreements of the Company. The
      Company represents and warrants to, and covenants and agrees with, the
      Secured Party as follows:

      A. The Company has the requisite corporate power and authority to enter
into this Agreement and otherwise to carry out its obligations thereunder. The
execution, delivery and performance by the Company of this Agreement and the
filings contemplated therein have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company.
This Agreement constitutes a legal, valid and binding obligation of the Company
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditor's rights generally.

      B. The Company represents and warrants that it has no place of business or
offices where its respective books of account and records are kept (other than
temporarily at the offices of its attorneys or accountants) or places where
Collateral is stored or located, except as set forth on Schedule A attached
hereto;

      C. The Company is the sole owner of the Collateral (except for
non-exclusive licenses granted by the Company in the ordinary course of
business), free and clear of any liens, security interests, encumbrances, rights
or claims (except for liens on the Collateral held by Laurentian Bank of Canada
and Josie Marie Boujos, together, the "Existing Lenders" and the other parties
listed on Schedule C, and is fully authorized to grant the Security Interest in
and to pledge the Collateral. There is not on file in any governmental or
regulatory authority, agency or recording office an effective financing
statement, security agreement, license or transfer or any notice of any of the
foregoing (other than those that have been filed in favor of the Secured Party
pursuant to this Agreement and other than those that have been filed in favor of
the Existing Lenders and the other parties listed on Schedule C covering certain
equipment) covering or affecting any of the Collateral. So long as this
Agreement shall be in effect, the Company shall not execute and shall not
knowingly permit to be on file in any such office or agency any such financing
statement or other document or instrument (or except to the extent filed or
recorded in favor of the Secured Party pursuant to the terms of this Agreement,
referred to in the previous sentence or as may be consented to by Secured
Parties holding a majority-in-interest of the Debentures).

      D. No part of the Collateral has been judged invalid or unenforceable. No
written claim has been received that any Collateral or the Company's use of any
Collateral violates the rights of any third party. There has been no adverse
decision to the Company's claim of ownership rights in or exclusive rights to
use the Collateral in any jurisdiction or to the Company's right to keep and
maintain such Collateral in full force and effect, and there is no proceeding
involving said rights pending or, to the best knowledge of the Company,
threatened before any court, judicial body, administrative or regulatory agency,
arbitrator or other governmental authority.

      E. The Company shall at all times maintain its books of account and
records relating to the Collateral at its principal place of business and its
Collateral at the locations set forth on Schedule A attached hereto and may not
relocate such books of account and records or tangible Collateral unless it
delivers to the Secured Party at least 20 days prior to such relocation (i)
written notice of such relocation and the new location thereof (which must be
within the United States) and (ii) evidence that appropriate financing
statements and other necessary documents have been filed and recorded and other
steps have been taken to perfect the Security Interest to create in favor of the
Secured Party valid, perfected and continuing liens in the Collateral.

      F. This Agreement creates in favor of the Secured Party a valid security
interest in the Collateral securing the payment and performance of the
Obligations and, upon making the filings described in the immediately following
sentence, a perfected security interest in such Collateral. Except for the
filing of financing statements on Form-1 under the UCC with the jurisdictions
indicated on Schedule B, attached hereto, no authorization or approval of or
filing with or notice to any governmental authority or regulatory body is
required either (i) for the grant by the Company of, or the effectiveness of,
the Security Interest granted hereby or for the execution, delivery and
performance of this Agreement by the Company or (ii) for the perfection of or
exercise by the Secured Party of its rights and remedies hereunder.

      G. On the date of execution of this Agreement, the Company will deliver to
the Secured Party one or more executed UCC financing statements on Form-1 with
respect to the Security Interest for filing with the jurisdictions indicated on
Schedule B, attached hereto and in such other jurisdictions as may be requested
by the Secured Party.

      H. The execution, delivery and performance of this Agreement does not
conflict with or cause a breach or default, or an event that with or without the
passage of time or notice, shall constitute a breach or default, under any
agreement to which the Company is a party or by which the Company is bound.
Other than consents of the Existing Lenders, which consents have been obtained,
no consent (including, without limitation, from stock

                                       2
<PAGE>

holders or creditors of the Company) is required for the Company to enter into
and perform its obligations hereunder.

      I. The Company shall at all times maintain the liens and Security Interest
provided for hereunder as valid and perfected liens and security interests in
the Collateral in favor of the Secured Party until this Agreement and the
Security Interest hereunder shall terminate pursuant to Section 11. The Company
hereby agrees to defend the same against any and all persons. The Company shall
use commercially reasonable efforts to safeguard and protect all Collateral for
the account of the Secured Party. At the request of the Secured Party, the
Company will sign and deliver to the Secured Party at any time or from time to
time one or more financing statements pursuant to the UCC (or any other
applicable statute) in form reasonably satisfactory to the Secured Party and
will pay the cost of filing the same in all public offices wherever filing is,
or is deemed by the Secured Party to be, necessary or desirable to effect the
rights and obligations provided for herein. Without limiting the generality of
the foregoing, the Company shall pay all fees, taxes and other amounts necessary
to maintain the Collateral and the Security Interest hereunder, and the Company
shall obtain and furnish to the Secured Party from time to time, upon demand,
such releases and/or subordinations of claims and liens which may be required to
maintain the priority of the Security Interest hereunder.

      J. The Company will not transfer, pledge, hypothecate, encumber, license
(except for non-exclusive licenses granted by the Company in the ordinary course
of business), sell or otherwise dispose of any of the Collateral without the
prior written consent of Secured Parties holding a majority-in-interest of the
Debentures, except in the ordinary course of business.

      K. The Company shall keep and preserve its Equipment, Inventory and other
tangible Collateral in good condition, repair and order and shall not operate or
locate any such Collateral (or cause to be operated or located) in any area
excluded from insurance coverage.

      L. The Company shall, within ten (10) days of obtaining knowledge thereof,
advise the Secured Party promptly, in sufficient detail, of any substantial
change in the Collateral, and of the occurrence of any event which would have a
material adverse effect on the value of the Collateral or on the Secured Party's
security interest therein.

      M. The Company shall promptly execute and deliver to the Secured Party
such further deeds, mortgages, assignments, security agreements, financing
statements or other instruments, documents, certificates and assurances and take
such further action as the Secured Party may from time to time request and may
in its sole discretion deem necessary to perfect, protect or enforce its
security interest in the Collateral including, without limitation, the execution
and delivery of a separate security agreement with respect to the Company's
intellectual property ("Intellectual Property Security Agreement") in which the
Secured Party has been granted a security interest hereunder, substantially in a
form reasonably acceptable to the Secured Party, which Intellectual Property
Security Agreement, other than as stated therein, shall be subject to all of the
terms and conditions hereof.

      N. The Company shall permit the Secured Party and its representatives and
agents to inspect the Collateral upon reasonable notice and at reasonable times,
and to make copies of records pertaining to the Collateral as may be requested
by the Secured Party from time to time.

      O. The Company will take all steps reasonably necessary to diligently
pursue and seek to preserve, enforce and collect any rights, claims, causes of
action and accounts receivable in respect of the Collateral.

      P. The Company shall promptly notify the Secured Party in sufficient
detail upon becoming aware of any attachment, garnishment, execution or other
legal process levied against any Collateral and of any other information
received by the Company that may materially affect the value of the Collateral,
the Security Interest or the rights and remedies of the Secured Party hereunder.

      Q. All information heretofore, herein or hereafter supplied to the Secured
Party by or on behalf of the Company with respect to the Collateral is accurate
and complete in all material respects as of the date furnished.

      R. Schedule A attached hereto contains a list of all of the majority-owned
subsidiaries of The Company.

14. Defaults. The following events shall be "Events of Default":

      A. The occurrence of an Event of Default (as defined in the Debentures)
under the Debentures;

      B. Any representation or warranty of the Company in this Agreement or in
the Intellectual Property Security Agreement shall prove to have been incorrect
in any material respect when made;

      C. The failure by the Company to observe or perform any of its obligations
hereunder or in the Intellectual Property Security Agreement for ten (10) days
after receipt by the Company of notice of such failure from the Secured Party;
and

      D. Any breach of, or default under, the Warrants.

15.   Duty To Hold In Trust. Upon the occurrence of any Event of Default and at
      any time thereafter, the Company shall, upon receipt by it of any revenue,
      income or other sums subject to the Security Interest, whether payable
      pursuant to the Debentures or otherwise, or of any check, draft, note,
      trade acceptance or other instrument evidencing an obligation to pay any
      such sum, hold the same in trust for the Secured Party and shall forthwith
      endorse and transfer any such sums or instruments, or both, to the Secured
      Party for application to the satisfaction of the Obligations.

16.   Rights and Remedies Upon Default. Upon occurrence of any Event of Default
      and at any time thereafter, the Secured Party shall have the right to
      exercise all of the remedies conferred hereunder and under the Debentures,
      and the Secured Party shall

                                       3
<PAGE>

      have all the rights and remedies of a secured party under the UCC and/or
      any other applicable law (including the Uniform Commercial Code of any
      jurisdiction in which any Collateral is then located). Without limitation,
      the Secured Party shall have the following rights and powers:

      A. The Secured Party shall have the right to take possession of the
Collateral and, for that purpose, enter, with the aid and assistance of any
person, any premises where the Collateral, or any part thereof, is or may be
placed and remove the same, and the Company shall assemble the Collateral and
make it available to the Secured Party at places which the Secured Party shall
reasonably select, whether at the Company's premises or elsewhere, and make
available to the Secured Party, without rent, all of the Company's respective
premises and facilities for the purpose of the Secured Party taking possession
of, removing or putting the Collateral in saleable or disposable form.

      B. The Secured Party shall have the right to operate the business of the
Company using the Collateral and shall have the right to assign, sell, lease or
otherwise dispose of and deliver all or any part of the Collateral, at public or
private sale or otherwise, either with or without special conditions or
stipulations, for cash or on credit or for future delivery, in such parcel or
parcels and at such time or times and at such place or places, and upon such
terms and conditions as the Secured Party may deem commercially reasonable, all
without (except as shall be required by applicable statute and cannot be waived)
advertisement or demand upon or notice to the Company or right of redemption of
the Company, which are hereby expressly waived. Upon each such sale, lease,
assignment or other transfer of Collateral, the Secured Party may, unless
prohibited by applicable law which cannot be waived, purchase all or any part of
the Collateral being sold, free from and discharged of all trusts, claims, right
of redemption and equities of the Company, which are hereby waived and released.

17.   Applications of Proceeds. The proceeds of any such sale, lease or other
      disposition of the Collateral hereunder shall be applied first, to the
      expenses of retaking, holding, storing, processing and preparing for sale,
      selling, and the like (including, without limitation, any taxes, fees and
      other costs incurred in connection therewith) of the Collateral, to the
      reasonable attorneys' fees and expenses incurred by the Secured Party in
      enforcing its rights hereunder and in connection with collecting, storing
      and disposing of the Collateral, and then to satisfaction of the
      Obligations, and to the payment of any other amounts required by
      applicable law, after which the Secured Party shall pay to the Company any
      surplus proceeds. If, upon the sale, license or other disposition of the
      Collateral, the proceeds thereof are insufficient to pay all amounts to
      which the Secured Party is legally entitled, the Company will be liable
      for the deficiency, together with interest thereon, at the rate of 15% per
      annum (the "Default Rate"), and the reasonable fees of any attorneys
      employed by the Secured Party to collect such deficiency. To the extent
      permitted by applicable law, the Company waives all claims, damages and
      demands against the Secured Party arising out of the repossession,
      removal, retention or sale of the Collateral, unless due to the gross
      negligence or willful misconduct of the Secured Party.

18.   Costs and Expenses. The Company agrees to pay all out-of-pocket fees,
      costs and expenses incurred in connection with any filing required
      hereunder, including without limitation, any financing statements,
      continuation statements, partial releases and/or termination statements
      related thereto or any expenses of any searches reasonably required by the
      Secured Party. The Company shall also pay all other claims and charges
      which in the reasonable opinion of the Secured Party might prejudice,
      imperil or otherwise affect the Collateral or the Security Interest
      therein. The Company will also, upon demand, pay to the Secured Party the
      amount of any and all reasonable expenses, including the reasonable fees
      and expenses of its counsel and of any experts and agents, which the
      Secured Party may incur in connection with (i) the enforcement of this
      Agreement, (ii) the custody or preservation of, or the sale of, collection
      from, or other realization upon, any of the Collateral, or (iii) the
      exercise or enforcement of any of the rights of the Secured Party under
      the Debentures. Until so paid, any fees payable hereunder shall be added
      to the principal amount of the Debentures and shall bear interest at the
      Default Rate.

19.   Responsibility for Collateral. The Company assumes all liabilities and
      responsibility in connection with all Collateral, and the obligations of
      the Company hereunder or under the Debentures and the Warrants shall in no
      way be affected or diminished by reason of the loss, destruction, damage
      or theft of any of the Collateral or its unavailability for any reason.

20.   Security Interest Absolute. All rights of the Secured Party and all
      Obligations of the Company hereunder, shall be absolute and unconditional,
      irrespective of: (a) any lack of validity or enforceability of this
      Agreement, the Debentures, the Warrants or any agreement entered into in
      connection with the foregoing, or any portion hereof or thereof; (b) any
      change in the time, manner or place of payment or performance of, or in
      any other term of, all or any of the Obligations, or any other amendment
      or waiver of or any consent to any departure from the Debentures, the
      Warrants or any other agreement entered into in connection with the
      foregoing; (c) any exchange, release or nonperfection of any of the
      Collateral, or any release or amendment or waiver of or consent to
      departure from any other collateral for, or any guaranty, or any other
      security, for all or any of the Obligations; (d) any action by the Secured
      Party to obtain, adjust, settle and cancel in its sole discretion any
      insurance claims or matters made or arising in connection with the
      Collateral; or (e) any other circumstance which might otherwise constitute
      any legal or equitable defense available to the Company, or a discharge of
      all or any part of the Security Interest granted hereby. Until the
      Obligations shall have

                                       4
<PAGE>

      been paid and performed in full, the rights of the Secured Party shall
      continue even if the Obligations are barred for any reason, including,
      without limitation, the running of the statute of limitations or
      bankruptcy. The Company expressly waives presentment, protest, notice of
      protest, demand, notice of nonpayment and demand for performance. In the
      event that at any time any transfer of any Collateral or any payment
      received by the Secured Party hereunder shall be deemed by final order of
      a court of competent jurisdiction to have been a voidable preference or
      fraudulent conveyance under the bankruptcy or insolvency laws of the
      United States, or shall be deemed to be otherwise due to any party other
      than the Secured Party, then, in any such event, the Company's obligations
      hereunder shall survive cancellation of this Agreement, and shall not be
      discharged or satisfied by any prior payment thereof and/or cancellation
      of this Agreement, but shall remain a valid and binding obligation
      enforceable in accordance with the terms and provisions hereof. The
      Company waives all right to require the Secured Party to proceed against
      any other person or to apply any Collateral which the Secured Party may
      hold at any time, or to marshal assets, or to pursue any other remedy. The
      Company waives any defense arising by reason of the application of the
      statute of limitations to any obligation secured hereby.

21.   Term of Agreement. This Agreement and the Security Interest shall
      terminate on the date on which all payments under the Debentures have been
      made in full and all other Obligations have been paid or discharged. Upon
      such termination, the Secured Party, at the request and at the expense of
      the Company, will join in executing any termination statement with respect
      to any financing statement executed and filed pursuant to this Agreement.

22.   Power of Attorney; Further Assurances.

      A. The Company authorizes the Secured Party, and does hereby make,
constitute and appoint it, and its respective officers, agents, successors or
assigns with full power of substitution, as the Company's true and lawful
attorney-in-fact, with power, in its own name or in the name of the Company, to,
after the occurrence and during the continuance of an Event of Default, (i)
endorse any notes, checks, drafts, money orders, or other instruments of payment
(including payments payable under or in respect of any policy of insurance) in
respect of the Collateral that may come into possession of the Secured Party;
(ii) to sign and endorse any UCC financing statement or any invoice, freight or
express bill, bill of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with accounts, and
other documents relating to the Collateral; (iii) to pay or discharge taxes,
liens, security interests or other encumbrances at any time levied or placed on
or threatened against the Collateral; (iv) to demand, collect, receipt for,
compromise, settle and sue for monies due in respect of the Collateral; and (v)
generally, to do, at the option of the Secured Party, and at the Company's
expense, at any time, or from time to time, all acts and things which the
Secured Party deems necessary to protect, preserve and realize upon the
Collateral and the Security Interest granted therein in order to effect the
intent of this Agreement, the Debentures and the Warrants, all as fully and
effectually as the Company might or could do; and the Company hereby ratifies
all that said attorney shall lawfully do or cause to be done by virtue hereof.
This power of attorney is coupled with an interest and shall be irrevocable for
the term of this Agreement and thereafter as long as any of the Obligations
shall be outstanding.

      B. On a continuing basis, the Company will make, execute, acknowledge,
deliver, file and record, as the case may be, in the proper filing and recording
places in any jurisdiction, including, without limitation, the jurisdictions
indicated on Schedule B, attached hereto, all such instruments, and take all
such action as may reasonably be deemed necessary or advisable, or as reasonably
requested by the Secured Party, to perfect the Security Interest granted
hereunder and otherwise to carry out the intent and purposes of this Agreement,
or for assuring and confirming to the Secured Party the grant or perfection of a
security interest in all the Collateral.

      C. The Company hereby irrevocably appoints the Secured Party as the
Company's attorney-in-fact, with full authority in the place and stead of the
Company and in the name of the Company, from time to time in the Secured Party's
discretion, to take any action and to execute any instrument which the Secured
Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including the filing, in its sole discretion, of one or more
financing or continuation statements and amendments thereto, relative to any of
the Collateral without the signature of the Company where permitted by law.

23.   Notices. All notices, requests, demands and other communications hereunder
      shall be in writing, with copies to all the other parties hereto, and
      shall be deemed to have been duly given when (i) if delivered by hand,
      upon receipt, (ii) if sent by facsimile, upon receipt of proof of sending
      thereof, (iii) if sent by nationally recognized overnight delivery service
      (receipt requested), the next business day or (iv) if mailed by
      first-class registered or certified mail, return receipt requested,
      postage prepaid, four days after posting in the U.S. mails, in each case
      if delivered to the following addresses:

         If to the Company:             Universe2U Inc.
                                        30 West Beaver Creek Road, Suite 109
                                        Richmond Hill, Ontario, Canada L4B 3K1
                                        Attention: Kim Allen
                                        Facsimile: 905-709-5264

                                       5
<PAGE>

         With copies to:                Keith Moskowitz, Esq.
                                        Ehrenreich Eilenberg & Krause LLP
                                        11 East 44th Street, 17th Floor
                                        New York, New York 10017
                                        Facsimile: 212-986-2399

         If to the Secured Party:       AJW Partners, LLC
                                        New Millennium Capital Partners II, LLC
                                        AJW/New Millennium Offshore, Ltd.
                                        Pegasus Capital Partners, LLC
                                        1044 Northern Boulevard
                                        Suite 302
                                        Roslyn, New York 11576
                                        Attention: Corey Ribotsky
                                        Facsimile: 516-739-7115

         With copies to:                Ballard Spahr Andrews & Ingersoll, LLP
                                        1735 Market Street, 51st Floor
                                        Philadelphia, Pennsylvania  19103
                                        Attention: Gerald J. Guarcini, Esq.
                                        Facsimile: 215-864-8999

24.   Other Security. To the extent that the Obligations are now or hereafter
      secured by property other than the Collateral or by the guarantee,
      endorsement or property of any other person, firm, corporation or other
      entity, then the Secured Party shall have the right, in its sole
      discretion, to pursue, relinquish, subordinate, modify or take any other
      action with respect thereto, without in any way modifying or affecting any
      of the Secured Party's rights and remedies hereunder.

25.   Miscellaneous.

      A. No course of dealing between the Company and the Secured Party, nor any
failure to exercise, nor any delay in exercising, on the part of the Secured
Party, any right, power or privilege hereunder or under the Debentures shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

      B. All of the rights and remedies of the Secured Party with respect to the
Collateral, whether established hereby or by the Debentures or by any other
agreements, instruments or documents or by law shall be cumulative and may be
exercised singly or concurrently.

      C. This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and is intended to supersede all prior
negotiations, understandings and agreements with respect thereto. Except as
specifically set forth in this Agreement, no provision of this Agreement may be
modified or amended except by a written agreement specifically referring to this
Agreement and signed by the Company and Secured Parties holding a
majority-in-interest of the Debentures.

      D. In the event that any provision of this Agreement is held to be
invalid, prohibited or unenforceable in any jurisdiction for any reason, unless
such provision is narrowed by judicial construction, this Agreement shall, as to
such jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other jurisdiction.

      E. No waiver of any breach or default or any right under this Agreement
shall be considered valid unless in writing and signed by the party giving such
waiver, and no such waiver shall be deemed a waiver of any subsequent breach or
default or right, whether of the same or similar nature or otherwise.

      F. This Agreement shall be binding upon and inure to the benefit of each
party hereto and its successors and assigns.

      G. Each party shall take such further action and execute and deliver such
further documents as may be necessary or appropriate in order to carry out the
provisions and purposes of this Agreement.

      H. This Agreement shall be construed in accordance with the laws of the
State of New York, except to the extent the validity, perfection or enforcement
of a security interest hereunder in respect of any particular Collateral which
are governed by a jurisdiction other than the State of New York in which case
such law shall govern. Each of the parties hereto irrevocably submit to the
exclusive jurisdiction of any New York State or United States Federal court
sitting in Manhattan county over any action or proceeding arising out of or
relating to this Agreement, and the parties hereto hereby irrevocably agree that
all claims in respect of such action or proceeding may be heard and determined
in such New York State or Federal court. The parties hereto agree that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. The parties hereto further waive any objection to venue in the
State of New York and any objection to an action or proceeding in the State of
New York on the basis of forum non conveniens.

      I. EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A
JURY TRAIL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT. THE SCOPE

                                       6
<PAGE>

OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER OF THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS
AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES
THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS WAIVER IN
ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY ON THIS
WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A JURY TRIAL
FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING THAT,
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF A
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

      J. This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and, all of which taken
together shall constitute one and the same Agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       7
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed on the day and year first above written.

                                        UNIVERSE2U INC.

                                        By: /s/ Kim Allen
                                            ------------------------------------
                                            Kim Allen
                                            Chief Executive Officer

                                        1418276 ONTARIO INC.

                                        By: /s/ Angelo Boujos
                                            ------------------------------------
                                        Name: Angelo Boujos
                                        Title: Chairman

                                        UNIVERSE2U CANADA INC.

                                        By: /s/ Angelo Boujos
                                            ------------------------------------
                                        Name: Angelo Boujos
                                        Title: Chairman

                                        CABLETEC COMMUNICATIONS INC.

                                        By: /s/ Angelo Boujos
                                            ------------------------------------
                                        Name: Angelo Boujos
                                        Title: Chairman

                                        UNIVERSE2U RIGHT-OF-WAYS AGENCY INC.

                                        By: /s/ Angelo Boujos
                                            ------------------------------------
                                        Name: Angelo Boujos
                                        Title: Chairman

                                        COASTAL NETWORK SERVICES INC.

                                        By: /s/ Angelo Boujos
                                            ------------------------------------
                                        Name: Angelo Boujos
                                        Title: Chairman

                                        COASTAL NETWORKS INC.

                                        By: /s/ Angelo Boujos
                                            ------------------------------------
                                        Name: Angelo Boujos
                                        Title: Chairman

                                        MULTILINK NETWORK SERVICES INC.

                                        By: /s/ Angelo Boujos
                                            ------------------------------------
                                        Name: Angelo Boujos
                                        Title: Chairman

                                        MULTILINK NETWORKS INC.

                                        By: /s/ Angelo Boujos
                                            ------------------------------------
                                        Name: Angelo Boujos
                                        Title: Chairman

                                        AJW PARTNERS, LLC
                                        By: SMS Group, LLC

                                        By: /s/ Corey S. Ribotsky
                                            ------------------------------------
                                            Corey S. Ribotsky
                                            Manager

                                        NEW MILLENNIUM CAPITAL PARTNERS II, LLC
                                        By: First Street Manager II, LLC

                                        By: /s/ Corey S. Ribotsky
                                            ------------------------------------
                                            Corey S. Ribotsky
                                            Manager

                                        AJW/NEW MILLENNIUM OFFSHORE, LTD.
                                        By: First Street Manager II, LLC

                                        By: /s/ Corey S. Ribotsky
                                            ------------------------------------
                                            Corey S. Ribotsky
                                            Manager

                                        PEGASUS CAPITAL PARTNERS, LLC
                                        By: Pegasus Manager, LLC

                                        By: /s/ Corey S. Ribotsky
                                            ------------------------------------
                                            Corey S. Ribotsky
                                            Manager

                                       8
<PAGE>

                                   SCHEDULE A

Principal Place of Business of the Company:

        30 West Beaver Creek
        Suite 109
        Richmond Hill, Ontario
        L4B 3K1

Locations Where Collateral is Located or Stored:

        30 West Beaver Creek
        Suite 109
        Richmond Hill, Ontario
        L4B 3K1

List of Subsidiaries of the Company:

        1418276 Ontario Inc., incorporated in Ontario
        Universe2U Canada Inc., incorporated in Ontario
        CableTec Communications Inc., incorporated in Ontario
        Universe2U Right-of-ways Agency Inc., incorporated in Delaware
        Coastal Network Services Inc., incorporated in Delaware
        Coastal Networks Inc., incorporated in Nevada
        MultiLink Network Services Inc., incorporated in Delaware
        MultiLink Networks Inc., incorporated in Nevada

      The following subsidiaries were merged into Universe2U Canada Inc.,
      January 1, 2002:

        Fiber Optics Corporation of Canada Inc., incorporated in Ontario
        Canadian Cable Consultants Inc., incorporated in Ontario
        Photonics Engineering & Design, Inc., incorporated in Ontario

                                   SCHEDULE B

Jurisdictions:

        Province of Ontario
        State of Nevada

                                   SCHEDULE C

Other Liens:

      6. The Company has granted security interests in certain of its assets in
favor of Laurentian Bank of Canada (General Security Agreement dated February
22, 2002, PPSA registration 2002 0221 1412 00044476) and Josie Marie Boujos
(General Security Agreement dated February 19, 1999 PPSA registration 19990319
1647 0043 6372) in connection with loan facilities entered into with each of
them.

      7. Certain of the Company's vehicles and equipment is held pursuant to
specific leases (including leases with GMAC Leaseco Limited, Summit Lease, a
division of Summit Ford (1982) Limited, Wajax Finance Ltd., Newcourt Financial
Ltd, Brandt Industries Ltd, AT&T Capital Canada, Royal Bank of Canada, Ford
Credit Canada Leasing Ltd, Ford Credit Canada Ltd and GT Group Telecom Services
Corp.). The Company has granted security interests in certain of its assets in
favor of the lessors.

      8. The Company has granted a security interest in an insurance policy in
favor of AIG Corporatoin Canada.

      9. There are a number of liens that have been filed against certain of the
Company's assets in respect of leased vehicles and equipment that have been
returned to the respective lessor and for which we have no continuing
obligation. The Company is entitled to have these liens discharged and released.
The Company will endeavor to cause the same to be released as soon as
practicable.

      10. In 2002, a judgment was rendered in the amount of approximately
$34,579.00 CDN in favor of Her Majesty the Queen, as represented by the Ministry
of Finance, against Cabletec Communications Inc. for unpaid taxes. A lien has
been filed against certain of the Company's assets in respect of such judgment.

                                       9

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