Document:

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                                                                    EXHIBIT 10.3

PAYMENT OF THE PRINCIPAL AMOUNT OF, ACCRUED INTEREST ON, FEES AND EXPENSES
RELATING TO, AND ANY OTHER INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATED
TO THE EXTENT AND IN THE MANNER PROVIDED IN THAT CERTAIN SUBORDINATION AGREEMENT
REFERRED TO BELOW. HOLDER AND ANY SUBSEQUENT HOLDER OF THIS NOTE, BY ACCEPTANCE
HEREOF, ACKNOWLEDGE AND AGREE TO BE BOUND BY SUCH SUBORDINATION AGREEMENT.

THIS NOTE AND THE SALE AND ISSUANCE OF THE SECURITIES ISSUABLE UPON CONVERSION
OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAW OF ANY STATE OR OTHER
JURISDICTION. SUCH SECURITIES SHALL HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE DISTRIBUTION THEREOF. SUCH SECURITIES
MAY NOT BE OFFERED, SOLD, PLEDGED, OR TRANSFERRED UNLESS (I) A REGISTRATION
STATEMENT UNDER THE ACT IS IN EFFECT AS TO SUCH SECURITIES AND SUCH OFFER, SALE,
PLEDGE, OR TRANSFER IS IN COMPLIANCE WITH APPLICABLE SECURITIES LAW OF ANY STATE
OR OTHER JURISDICTION OR (II) THERE IS AN OPINION OF COUNSEL OR OTHER EVIDENCE,
IN EITHER CASE, SATISFACTORY TO THE BORROWER, THAT AN EXEMPTION THEREFROM IS
AVAILABLE AND THAT SUCH OFFER, SALE, PLEDGE, OR TRANSFER IS IN COMPLIANCE WITH
APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION. THE CONVERSION OF
THIS NOTE IS SUBJECT TO THE APPLICABLE RE-QUIREMENTS OF THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED.

                SECURED SUBORDINATED CONVERTIBLE PROMISSORY NOTE

$5,000,000                                                        April 20, 2001

              FOR VALUE RECEIVED, the undersigned, FUTURELINK CORP, a Delaware
corporation ("Borrower"), promises to pay to PEQUOT PRIVATE EQUITY FUND II,
L.P., a Delaware limited partnership ("Holder"), the principal sum of FIVE
MILLION DOLLARS ($5,000,000), or such lesser amount advanced hereunder, with
interest from the date hereof, at the rate of ten percent (10%) per annum on the

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outstanding unpaid balance until paid or until Default (as defined in Section
4), both principal and interest being payable in lawful money of the United
States of America, at 500 Nyala Farm Road, Westport, Connecticut 06880, or at
such place as the Holder may designate in writing. The obligations of the
Borrower under this Note are secured as set forth in the Security Agreement
dated as of the date hereof between the Borrower, the subsidiary guarantors
named therein (the "Subsidiary Guarantors") and the Holder (as modified and
supplemented and in effect from time to time, the "Security Agreement"). The
principal under this Note shall be advanced by Holder to the Borrower as
follows:

       (i)    Upon the Borrower's request, the Holder shall advance to the
              Borrower on the date hereof the principal amount of THREE MILLION
              FIVE HUNDRED THOUSAND DOLLARS ($3,500,000) (the "Initial
              Advance"); and

       (ii)   Upon the Borrower's request, the Holder shall advance to the
              Borrower an additional principal amount of ONE MILLION FIVE
              HUNDRED THOUSAND DOLLARS ($1,500,000) (the "Subsequent Advance")
              upon the earlier to occur of (A) the closing of the next round of
              equity or convertible debt financing in which the Borrower
              receives aggregate gross proceeds of at least $5,000,000
              (excluding amounts received upon conversion of this Note,
              including amounts from both the Initial Advance and the Subsequent
              Advance) (a "Subsequent Financing") and (B) May 31, 2001. The
              obligation of the Holder to make the Subsequent Advance is subject
              to the condition that, both immediately prior to the making of
              such Subsequent Advance and after giving effect thereto and to the
              intended use thereof (a) no Default shall have occurred and be
              continuing, and (b) the representations and warranties made by the
              Borrower in Section 2 hereof shall be true and complete on and as
              of the date of the making of such Subsequent Advance with the same
              force and effect as if made on and as of such date. The request
              for the Subsequent Advance by the Borrower hereunder shall
              constitute a certification by the Borrower to the effect set forth
              in the preceding sentence.

       The principal and interest on this Note shall be due and payable as
follows:

       (i)    The entire unpaid balance shall be due and payable in full on June
              30, 2001 (the "Due Date"); and

       (ii)   Interest shall be due and payable on the Due Date. All
              computations of interest payable hereunder shall be on the basis
              of a 360-day year and actual days elapsed in the period of which
              such interest is payable.

              The principal under this Note and all interest accrued hereon may
not be prepaid without the written consent of the Holder.

ANY PAYMENT OF THE PRINCIPAL AMOUNT OF, ACCRUED INTEREST ON, FEES AND EXPENSES
RELATING TO, AND ANY OTHER INDEBTEDNESS

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EVIDENCED BY THIS NOTE SHALL BE SUBORDINATED TO THE EXTENT AND IN THE MANNER
PROVIDED IN THAT CERTAIN PEQUOT SUBORDINATION AGREEMENT BETWEEN HOLDER AND
FOOTHILL CAPITAL CORPORATION, A CALIFORNIA CORPORATION (THE "SUBORDINATION
AGREEMENT"). HOLDER AND ANY SUBSEQUENT HOLDER OF THIS NOTE, BY ACCEPTANCE
HEREOF, ACKNOWLEDGE AND AGREE TO BE BOUND BY THE SUBORDINATION AGREEMENT.

       1.     Optional Conversion.

              (a) Subject to Section 1(c), at the sole option of the Holder, the
Initial Advance and any accrued interest thereon may be converted into Units (as
defined in Exhibit A hereto), generally in accordance with the terms of Exhibit
A hereto (which terms shall be subject to the execution of definitive
agreements); provided, however, that the conversion price of the underlying
preferred stock and common stock shall be as set forth in Exhibit A hereto. The
Holder's option to convert this Note under this Section 1 may be exercised until
all amounts due under this Note are paid in full.

              (b) Subject to Section 1(c), at the sole option of the Holder, the
Subsequent Advance and any accrued interest thereon may be converted into Units
(as defined in Exhibit A hereto), generally in accordance with the terms of
Exhibit A hereto (which terms shall be subject to the execution of definitive
agreements); provided, however, that the conversion price of the underlying
preferred stock and common stock shall be as set forth in Exhibit A hereto.

              (c) The Holder's right to convert this Note shall commence upon
the earlier to occur of (i) the closing of a Subsequent Financing and (ii) May
31, 2001, and shall continue until all amounts due under this Note are paid in
full.

       2. Representations and Warranties of the Borrower. The Borrower hereby
represents and warrants to the Holder as follows:

              2.1. Organization and Qualification; Subsidiaries.

              (a) The Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware. The
Borrower has all requisite corporate power and authority to own, operate, lease
and encumber its properties and carry on its business as now conducted, and to
issue this Note and to enter into the Security Agreement. The issuance of this
Note and the transactions contemplated hereby (including Exhibit A hereto) have
been approved by a special disinterested committee of the Board of Directors of
the Borrower.

              (b) Each of the Subsidiary Guarantors is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, and has the corporate,
partnership or limited liability company power and authority to own its
properties and to carry on its business as it is now being conducted, and to
enter into the Subsidiary Guaranty dated as of the date

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hereof between the Subsidiary Guarantors and the Holder (the "Subsidiary
Guaranty") and the Security Agreement.

              (c) Each of the Borrower and the Subsidiary Guarantors is duly
qualified to do business and in good standing in each jurisdiction in which the
ownership of its property or the conduct of its business requires such
qualification, except for any failures to be so qualified or to be in good
standing as would not, individually or in the aggregate, reasonably be expected
to result in a material adverse effect on the financial condition, results of
operations, business or prospects of the Borrower and its Subsidiaries taken as
a whole (a "Material Adverse Effect").

              (d) Schedule 2.1(d) sets forth the name of each Subsidiary of the
Borrower (whether owned, directly or indirectly, through one or more
intermediaries). All of the outstanding shares of capital stock of, or other
equity interest in, each of the Subsidiary Guarantors are duly authorized,
validly issued, fully paid and nonassessable, and are owned, directly or
indirectly, by the Borrower free and clear of all Liens, except as set forth in
Schedule 2.1(d). The following information for each Subsidiary Guarantor is set
forth in Schedule 2.1(d), if applicable: (i) its name and jurisdiction of
incorporation or organization, and (ii) the type of and percentage interest held
by the Borrower in such Subsidiary Guarantor and the names of and percentage
interest held by the other interest holders, if any, in the Subsidiary
Guarantor. For purposes of this Note, "Subsidiary" shall mean with respect to
any person, any corporation, partnership, limited liability company, joint
venture, business trust or other entity, of which such person, directly or
indirectly, owns or controls 50% or more of the securities or other interests
entitled to vote in the election of directors or others performing similar
functions with respect to such corporation or other organization, or to
otherwise control such corporation, partnership, limited liability company,
joint venture, business trust or other entity.

              2.2. Authority Relative to Agreements; Board Approval.

              (a) The execution, delivery and performance of this Note and the
Security Agreement, have been duly and validly authorized by all necessary
corporate action on the part of the Borrower. This Note and the Security
Agreement have been duly executed and delivered by the Borrower for itself and
constitute the valid and legally binding obligations of the Borrower,
enforceable against the Borrower in accordance with their terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights or general principles of equity.

              (b) The respective Boards of Directors of each Subsidiary
Guarantor have approved the Security Agreement and the Subsidiary Guaranty and
the transactions contemplated thereby.

              (c) Except as set forth in Schedule 2.2(c), the issuance and sale
of the Note will not give any person the right to demand payment for its shares
or give rise to any preemptive or similar rights.

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              2.3. No Conflicts; No Defaults; Required Filings and Consents.
Except as set forth on Schedule 2.3, neither the execution and delivery by the
Borrower hereof nor the consummation by the Borrower of the transactions
contemplated hereby in accordance with the terms hereof will:

              (a) conflict with or result in a breach of any provision of the
Certificate of Incorporation or the Bylaws of the Borrower;

              (b) result in a breach or violation of, a default under, or the
triggering of any payment or other obligations pursuant to, or accelerate
vesting under, any employment agreement, any compensation plan or any grant or
award made under any of the foregoing;

              (c) violate or conflict with any statute, regulation, judgment,
order, writ, decree or injunction applicable to the Borrower or the Subsidiary
Guarantors;

              (d) violate or conflict with or result in a breach of any
provision of, or constitute a default (or any event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
or in a right of termination or cancellation of, or accelerate the performance
required by, or result in the creation of any lien upon any of the properties of
the Borrower or the Subsidiary Guarantors under, or result in being declared
void, voidable or without further binding effect, any of the terms, conditions
or provisions of any material note, bond, mortgage, indenture, deed of trust or
any license, franchise, permit, lease, contract, agreement or other instrument,
commitment or obligation to which the Borrower or any Subsidiary Guarantor is a
party, or by which the Borrower or any Subsidiary Guarantor or any of their
properties is bound or affected, other than with respect to the obtaining of
consents thereunder, the failure of which to obtain will not result in a
Material Adverse Effect; or

              (e) require any consent, approval or authorization of, or
declaration, filing or registration with, any government authority, other than
any filings required under the Securities Act of 1933, as amended (the
"Securities Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and state securities laws ("Blue Sky Laws").

              2.4. SEC and Other Documents; Financial Statements.

              (a) The Borrower has delivered or made available to the Holder
each registration statement, report, proxy statement or information statement
and all exhibits, amendments and supplements thereto prepared by it or relating
to its properties since December 31, 2000, which are listed on Schedule 2.4(a),
each in the form (including exhibits and any amendments and supplements thereto)
filed with the SEC (collectively, the "Borrower Reports"). The Borrower Reports
were filed with the SEC in a timely manner and constitute all forms, reports and
documents required to be filed by the Borrower under the Securities Act, the
Exchange Act and the rules and regulations promulgated thereunder (the
"Securities Laws"). As of their respective dates, the Borrower Reports (i)
complied as to form in all material respects with the applicable

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requirements of the Securities Laws and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading. There is no
unresolved violation asserted by any government authority with respect to any of
the Borrower Reports.

              (b) Each of the balance sheets included in or incorporated by
reference into the Borrower Reports (including the related notes and schedules)
fairly presented the financial position of the entity or entities to which it
relates as of its date and each of the statements of operations, stockholders'
equity (deficit) and cash flows included in or incorporated by reference into
the Borrower Reports (including any related notes and schedules) fairly
presented the results of operations, retained earnings or cash flows, as the
case may be, of the entity or entities to which it relates for the periods set
forth therein, in each case in accordance with United States generally accepted
accounting principles consistently applied during the periods involved, except
as may be noted therein and except, in the case of the unaudited statements, for
the absence of notes thereto, and subject to normal recurring year-end
adjustments which have not been and will not be material in nature or amount.

              2.5. Absence of Certain Changes or Events. Except as previously
disclosed in writing to Lender or otherwise disclosed in the Borrower Reports
filed with the SEC prior to the date hereof, since December 31, 2000, the
Borrower and each of its Subsidiaries has conducted its business only in the
ordinary course, and there has not been (a) any change, circumstance or event
that could reasonably be expected to result in a Material Adverse Effect, (b)
any declaration, setting aside or payment of any dividend or other distribution
with respect to the Borrower's common stock, (c) any commitment, contractual
obligation, borrowing, capital expenditure or transaction entered into by the
Borrower or any of its Subsidiaries outside the ordinary course of business, or
(d) any material change in the Borrower's accounting principles, practices or
methods.

              2.6. No Default. Immediately prior to the issuance of the Note and
after giving effect thereto, no Default shall have occurred and be continuing.

              2.7. No Undisclosed Liabilities. Except as and to the extent set
forth in the Borrower Reports and the Borrower's financial statements filed with
the SEC or in any Schedule hereto, none of the Borrower or any of its
Subsidiaries has any liabilities (nor do there exist any circumstance which are
likely to give rise to liabilities) other than liabilities incurred in the
ordinary course of business and consistent with past practice since December 31,
2000.

              2.9. Disclosure. None of this Note, the Security Agreement nor any
certificate, instrument or written statement furnished or made to the Holder by
or on behalf of the Borrower pursuant to this Agreement contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein in light of the
circumstances under which they were made not misleading.

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       3. Representations and Warranties of the Holder. The Holder hereby
represents and warrants to the Borrower as follows:

              3.1. Authorization. The Holder is a duly incorporated and validly
existing limited partnership in good standing under and by virtue of the laws of
the State of Delaware and has all requisite power and authority to enter into
and perform its obligations under this Note and the transactions contemplated
hereby.

              3.2. Investment. The Holder is acquiring this Note, and, upon
conversion of this Note, will acquire Units comprised of (a) convertible notes
of the Borrower which are convertible into either (i) shares of Series B
convertible preferred stock of the Borrower which are, convertible into shares
of the Borrower's common stock or (ii) common stock of the Borrower, and (b)
warrants to purchase shares of the Borrower's common stock (collectively, the
"Securities"). The Holder is acquiring this Note and will acquire the Securities
for investment for its own account, not as a nominee or agent, and not with a
view to, or for resale in connection with, any distribution thereof. The Holder
understands that this Note and each of the Securities have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), or
registered or qualified under any applicable securities laws, by reason of a
specific exemption from the registration provisions of the Securities Act or
applicable state securities law.

              3.3. Disclosure of Information. The Holder has had full access to
all information it considers necessary or appropriate to make an informed
investment decision with respect to this Note and the Securities. The Holder
further has had an opportunity to ask questions and receive answers from the
Borrower regarding the terms and conditions of this Note and the Securities and
to obtain additional information necessary to verify any information furnished
to the Holder or to which the Holder had access.

              3.4. Investment Experience. The Holder understands that the
purchase of this Note and the Securities involves substantial risk and may
result in a complete loss of its investment. The Holder has experience as an
investor in securities of companies and acknowledges that it is able to fend for
itself, can bear the economic risk of its investment in this Note and Securities
and has such knowledge and experience in financial or business matters that it
is capable of evaluating the merits and risks of this investment in this Note
and Securities and protecting its own interests in connection with this
investment.

              3.5. Accredited Investor Status. The Holder is an "accredited
investor" within the meaning of Regulation D promulgated under the Securities
Act.

              3.6. Restricted Securities. The Holder understands that this Note
and each of the Securities are characterized as "restricted securities" under
the Securities Act inasmuch as they are being acquired from the Borrower in a
transaction not involving a public offering and that under the Securities Act
and applicable regulations thereunder such securities may not be resold without
registration under the Securities Act or an exemption from such registration.
The Holder is familiar with Rule 144 of the SEC, as

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presently in effect, and understands the resale limitations imposed thereby and
by the Securities Act. The Holder understands that the Borrower is under no
obligation to register or qualify under federal or state securities laws this
Note (but is so obligated with respect to shares of common stock underlying such
Note).

       4. Default. In the case of one or more of the following events (each, a
"Default") (i) the Borrower fails to pay when due any payment of principal or
interest hereof, or (ii) the Borrower applies for a trustee, receiver or other
custodian for it or a substantial part of its property; a trustee, receiver or
other custodian is appointed for the Borrower or for a substantial part of its
property; or any bankruptcy, reorganization, debt arrangement, or other case of
proceeding, is commenced in respect of the Borrower which continues for sixty
(60) days without being dismissed, bonded or discharged, or (iii) any of the
representations or warranties made herein or in the Security Agreement or the
Subsidiary Guaranty are untrue in any material respect, or (iv) any event or
condition shall occur which results in the acceleration of the maturity of any
indebtedness for borrowed money of the Borrower (A) owed to the Holder and/or
its affiliates or (B) in excess of $500,000 (other than with respect to (x) that
certain lease agreement, dated April 27, 2000, between FutureLink Corp. and GATX
Technology Services Corporation, (y) that Master Loan and Security Agreement,
dated November 3, 1999, among TransAmerica Business Credit Corporation,
FutureLink Distribution Corp., and FutureLink Micro Visions Corp. and that
certain Security Agreement, dated November 3, 1999, between TransAmerica
Business Credit Corporation and FutureLink Distribution Corp. and (z) (a) the
portion of that certain lease agreement number 12035 between EMC2 and FutureLink
Corp. (the "Master Lease") that has been assigned to Fleet Capital Leasing and
(b) the portion of the Master Lease that has been assigned to De Lage Landen
Financial Services, Inc.; provided, however, that this exception shall only
apply until the earlier of (I) June 30, 2001 and (II) with respect to any such
foregoing agreement, the taking of any remedial action by the lessor party to
such agreement against the Borrower or any Subsidiary Guarantor that impairs the
operations of the Borrower or any of its Subsidiaries to be determined by Holder
in its sole discretion) or (C) with respect to the Senior Indebtedness (as
defined in Section 6), or (v) the Borrower or any Subsidiary Guarantor breaches
any of the covenants or agreements contained in the Security Agreement, any
Subsidiary Guaranty or this Note (other than that covered by clause (i) above),
if and when applicable, if such breach remains uncured for a period of thirty
(30) days after receipt of written notice from the Holder of such breach; then,
upon the occurrence of any such event, the Holder may, without notice, declare
the unpaid principal and interest on this Note, and all other obligations of the
Borrower to the Holder, at once due and payable, whereupon such principal and
interest shall become at once due and payable. Failure to exercise this option
shall not constitute a waiver of the right to exercise the same at any other
time. The principal of this Note and any part thereof, and accrued interest, if
any, shall bear interest at the rate of twelve percent (12%) per annum
("Post-Default Rate") after Default until paid; provided, that if such
Post-Default Rate exceeds the maximum rate permitted by law, such Post-Default
Rate shall be reduced to the maximum rate of interest permitted by law.

       5. Use of Proceeds. The Borrower shall use the proceeds of this Note for
working capital and general corporate purposes. The Borrower may not transfer
any of

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the proceeds of this Note to, or use any of the proceeds for, FutureLink Europe
Limited, a company organized under the laws of England and Wales, and KNS
Holdings Limited, a company organized under the laws of England and Wales. The
proceeds of this Note shall not be used to make any payments with respect to any
Senior Indebtedness.

       6. Subordination. Notwithstanding anything to the contrary in this Note
or in the Security Agreement or in the Subsidiary Guaranty, all rights of the
Holder, its successors, transferees and assigns, and the indebtedness evidenced
by this Note, shall be subordinate to the rights of Foothill Capital
Corporation, a California Corporation, its successors, transferees and assigns
("Foothill") and the indebtedness of Borrower to Foothill under that certain
Loan and Security Agreement dated as of November 16, 2000, as amended, by and
among the Borrower, the subsidiaries named therein and Foothill (the "Foothill
Loan Agreement"), the "Loan Documents", the "UK Loan Agreement", and the "UK
Loan Documents" (as such terms are defined in the Foothill Loan Agreement) (the
"Senior Indebtedness").

       7. Senior Indebtedness. The Borrower agrees that the aggregate principal
amount of the Senior Indebtedness shall not exceed $25,000,000.

       8. Waiver of Certain Rights. Subject to notices required hereunder or
under the Security Agreement or any Subsidiary Guaranty and any applicable
notice periods, all parties to this Note, including maker and any sureties,
endorsers, or guarantors, hereby waive protest, presentment, notice of dishonor,
and notice of acceleration of maturity and agree to continue to remain bound for
the payment of principal, interest and all other sums due under this Note
notwithstanding any change or changes by way of release, surrender, exchange,
modification or substitution of any security for this Note or by way of any
extension or extensions of time for the payment of principal and interest; and
all such parties waive all and every kind of notice of such change or changes
and agree that the same may be without notice or consent of any of them.

       9. Enforcement. Upon Default the Holder may employ an attorney to enforce
the Holder's rights and remedies and the maker, principal, surety, guarantor and
endorsers of this Note hereby agree to pay to the Holder reasonable attorneys'
fees, plus all other reasonable expenses incurred by the Holder in exercising
any of the Holder's rights and remedies upon Default. The rights and remedies of
the Holder as provided in this Note shall be cumulative and may be pursued
singly, successively, or together against any other funds, property or security
held by the Holder for payment or security, in the sole discretion of the
holder. The failure to exercise any such right or remedy shall not be a waiver
or release of such rights or remedies or the right to exercise any of them at
another time.

       10. No Shareholder Rights. The Holder shall not be deemed a shareholder
of the Borrower by virtue of holding this Note. Nothing contained in this Note
shall be construed as conferring upon the Holder or any other person the right
to vote or to consent or to receive notice as a shareholder of the Borrower.

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       11. Expenses. The Borrower shall pay the expenses of the Holder
(including the legal fees and expenses of Dewey Ballantine LLP, counsel to the
Holder) incurred in connection with this Note and the transactions contemplated
hereby.

       12. Conditions to Closing. The Initial Advance is subject to the
satisfaction of each of the following conditions:

              (a) the execution and delivery of this Note by the Borrower and
the Holder;

              (b) the execution and delivery of the Security Agreement by the
Borrower, the Subsidiary Guarantors named therein and the Holder;

              (c) the execution and delivery of the Subsidiary Guaranty by each
of the Subsidiary Guarantors named therein;

              (d) receipt by the Holder of an opinion of counsel to the Borrower
and the Subsidiary Guarantors, in form a substance reasonably satisfactory to
the Holder;

              (e) appropriately completed and duly executed copies of Uniform
Commercial Code Financing Statements and such other documents (including, but
not limited to, filings with the United States Patent and Trademark Office,
United States Copyright Office and Canadian Patent and Trademark Offices) as the
Holder may have requested to perfect the security interests created pursuant to
the Security Agreement.

              (f) execution and delivery of the Subordination Agreement by
Foothill, the Holder and the acknowledgement thereof by the Holder and the
Subsidiary Guarantors;

              (g) execution and delivery of that certain Amendment Number Two to
Loan and Security Agreement, dated as of the date hereof, by and among Foothill,
the Borrower and certain of the Subsidiary Guarantors and the Reaffirmation and
Consent by certain of the Subsidiary Guarantors;

              (h) execution and delivery of that certain Amendment Number One to
Loan Agreement, dated as of the date hereof, between Foothill and FutureLink
Europe Limited, and that certain Reaffirmation and Consent by KNS Holdings
Limited, the Borrower, and certain of the Subsidiary Guarantors; and

              (i) all consents required for the issuance of this Note and the
consummation of the transactions contemplated hereby shall have been obtained or
waived.

       13. Miscellaneous. The following general provisions apply:

              (a) This Note, and the obligations and rights of the Borrower
hereunder, shall be binding upon and inure to the benefit of the Borrower, the
Holder, and their respective heirs, personal representatives, successors and
assigns, except that the

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Borrower may not assign or transfer any of its rights or obligations under this
Note without the prior written consent of the Holder. The Holder may not assign
or transfer this Note without the prior written consent of the Borrower (which
consent may not be unreasonably withheld); provided, that the Holder may assign
this Note, or any portion thereof, without the Borrower's consent to any
affiliate of the Holder or to JDS Capital Management, Inc. and/or its
affiliates. In connection with any permitted assignment of this Note, or any
portion thereof, the Borrower, at its own expense, upon surrender of this Note
shall promptly issue a new note or notes to replace this Note to reflect any
such assignment.

              (b) Changes in or amendments or additions to this Note may be
made, or compliance with any term, covenant, agreement, condition or provision
set forth herein may be omitted or waived (either generally or in a particular
instance and either retroactively or prospectively), upon written consent of the
Borrower and the Holder.

              (c) All payments shall be made in such coin and currency of the
United States of America as at the time of payment shall be legal tender therein
for the payment of public and private debts.

              (d) All notices, requests, consents and demands shall be made in
writing and shall be mailed postage prepaid, or delivered by reliable overnight
courier service, or delivered by hand, to the Borrower or to the Holder at their
respective addresses set forth below or to such other address as may be
furnished in writing to the other party hereto and shall be effective upon
receipt:

              If to the Borrower, at 2 South Pointe Drive, Lake Forest,
California 92630, Attention: Chief Financial Officer and General Counsel.

              If to Holder, at Pequot Capital Management, Inc., 500 Nyala Farm
Road, Westport, Connecticut 06880, Attention: Carol Holley and Amber Tencic.

              (e) This Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the laws of the State of New
York.

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              IN WITNESS WHEREOF, each party hereto has caused this instrument
to be executed in its corporate name by its duly authorized officer as of the
day and year first above written.

                                        BORROWER

                                        FUTURELINK CORP.

                                        By:  /s/ HOWARD E. TAYLOR
                                           -------------------------------------
                                           Howard E. Taylor, President
                                           and Chief Executive Officer

                                        HOLDER

                                        PEQUOT PRIVATE EQUITY FUND II, L.P.

                                        By:  Pequot Capital Management, Inc.,
                                             its Investment Manager

                                        By:  /s/ KEVIN E. O'BRIEN
                                           -------------------------------------
                                             Kevin E. O'Brien, General Counsel

                                       12
<PAGE>   13

                                 SCHEDULE 2.1(d)

                              LIST OF SUBSIDIARIES

1.     FutureLink Micro Visions Corp., a Delaware corporation, doing business as
       FutureLink

2.     FutureLink Pleasanton Corp., a Delaware corporation, doing business as
       FutureLink

3.     FutureLink Async Corp., a Delaware corporation, doing business as
       FutureLink

4.     FutureLink VSI Corp., a Maryland corporation, doing business as
       FutureLink

5.     FutureLink Madison Corp., a Delaware corporation, doing business as
       FutureLink

6.     FutureLink Canada Corp., an Ontario corporation, doing business as
       FutureLink

7.     KNS Holdings Limited, a U.K. corporation, which wholly owns FutureLink
       Europe Limited, a U.K. corporation

8.     3045207 Nova Scotia Company, a Nova Scotia unlimited liability company
       which wholly owns 1423280 Ontario Inc., an Ontario corporation

The former shareholders of Charon Systems Inc. ("Charon") hold 2,199,965 shares
of the capital stock of 1423280 Ontario Inc., which shares were issued in
connection with the Borrower's acquisition of Charon. These shares represent a
minority interest in 1423280 Ontario Inc. Each share so held by the former
Charon shareholders is convertible into one share of Borrower's common stock at
the option of the holders.

With respect to all other capital stock of each Subsidiary, the Borrower owns
all of the capital stock of each Subsidiary, provided that the Borrower has
granted a security interest in the capital stock of each Subsidiary to Foothill
Capital Corporation as security for the Foothill Indebtedness.

<PAGE>   14

                                 SCHEDULE 2.2(c)

Each of Pequot Private Equity Fund II, L.P., Pequot Partners Fund, L.P., Pequot
International Fund, Inc., Pequot Endowment Fund, L.P., Dimensional Partners Ltd.
and Dimensional Partners L.P., each as buyers under one or both of those certain
Securities Purchase Agreements by and between the Borrower, Pequot Private
Equity Fund II, L.P. and each of the other buyers and dated October 15, 1999 and
April 28, 2000, have certain preemptive rights which may be triggered by
execution of this Note and the transactions contemplated thereby.

Additionally, the terms of the optional conversion pursuant to Section 1 of the
Note may trigger anti-dilution provisions of several outstanding warrants to
purchase common stock of the Borrower and anti-dilution provisions contained in
the Borrower's Series A Preferred Stock Certificate of Designation.

                                       14
<PAGE>   15

                                  SCHEDULE 2.3

(a) -- (b)     None.

(d)    MATERIAL AGREEMENTS REQUIRING CONSENT OR WAIVER DUE TO TRANSACTIONS
       CONTEMPLATED BY NOTE

       The Borrower has requested in writing consent to the Note and the
       transactions contemplated hereby under the agreements marked with an
       asterisk (*).

1.     Microsoft Application Services Agreement, dated 12/23/00, between
       Microsoft Corporation and FutureLink Corp; prohibits a transaction that
       results in the transfer of 20% of any class of Borrower's capital stock
       to another entity and prohibits assignment of Maker's interest in such
       agreement.*

2.     Microsoft Direct Commercial Service License Agreement between Microsoft
       Corporation and FutureLink Distribution Corp., dated 5/21/99; prohibits
       assignment of Borrower's interest in such agreement.*

3.     Microsoft Alliance Agreement, dated 6/29/00, prohibits acquisition of
       direct or indirect control of Borrower.*

4.     Citrix Application Service Provider Agreement, and related "iLicense"
       Agreement dated 1/12/00 between Citrix Systems, Inc. and FutureLink
       Corp.; prohibits transfer or assignment of any rights under such
       agreement.*

5.     Loan and Security Agreement among Foothill Capital Corporation,
       FutureLink Corp., and certain of its Subsidiaries, dated 11/16/00, and
       related documents, including without limitation, the Loan and Security
       Agreement between Foothill Capital Corporation, and FutureLink Europe
       Limited, dated December 13, 2000 and the documents related thereto;
       prohibits incurrence of debt and prohibits the grant of a security
       interest in Borrower's assets. [The consent of Foothill Capital
       Corporation has been provided pursuant to the amendments to such
       agreements executed on the date hereof.]

6.     Master Loan and Security Agreement among TransAmerica Business Credit
       Corporation, FutureLink Distribution Corp., and FutureLink Micro Visions
       Corp., dated 11/3/99 and Security Agreement between TransAmerica Business
       Credit Corporation and FutureLink Distribution Corp., dated 11/3/99;
       prohibits granting a security interest in Borrower's assets securing the
       obligation, prohibits assigning

                                       15
<PAGE>   16

       Borrower's rights under such agreement, and prohibits a material change
       in Borrower's capital structure.*

7.     Master Lease and Financing Agreement between Compaq Financial Services
       and FutureLink Corp., dated 11/15/99; prohibits the incurrence of a
       substantial amount of debt, prohibits granting a security interest in the
       equipment leased to Borrower pursuant to such agreement, and prohibits
       assigning Borrower's rights under such agreement.*

8.     Master Lease Agreement between EMC(2) and FutureLink Corp., dated
       12/16/99; prohibits granting a security interest in the equipment leased
       to Borrower pursuant to such agreement and prohibits assigning Borrower's
       rights under such agreement.*

9.     Lease Agreement between GATX and FutureLink Corp., dated 10/6/00;
       prohibits granting a security interest in the equipment leased to
       Borrower pursuant to such agreement and prohibits assigning Borrower's
       rights under such agreement.*

10.    Lease Agreement dated April 27, 2000 between Olen Commercial Realty Corp.
       and FutureLink Micro Visions Corporation for 2 South Pointe Dr., Lake
       Forest, Ca.; prohibits a lien on Borrower's interest in the lease.*

11.    Lease Agreement dated August 8, 2000 between Transwestern Lexington, LLC
       and FutureLink Corp. for 360 Lexington Avenue, New York; prohibits a lien
       on Borrower's interest in the lease.*

12.    Lease Agreement related to 450 Main Street, Pleasanton, California
       facility; prohibits a lien on Borrower's interest in the lease.*

13.    Lease Agreement related to Walled Lake, Michigan facility; prohibits a
       lien on Borrower's interest in the lease.*

14.    Financing Agreement between Hewlett Packard and FutureLink Corp. dated as
       of May 22, 2000; prohibits granting a security interest in the equipment
       leased to Borrower pursuant to such agreement and prohibits assigning
       Borrower's rights under such agreement.*

15.    Master Lease Agreement between Data General Corporation and FutureLink
       MicroVisions Corp. dated as of September 28, 1999; prohibits granting a
       security interest in the equipment leased to Borrower pursuant to such
       agreement and prohibits assigning Borrower's rights under such
       agreement.*

                                       16
<PAGE>   17

16.    Security Agreement General and Purchase Money between Ingram Micro Inc.
       and FutureLink Distribution Corp. (now FutureLink Canada Corp.) dated as
       of May 12, 2000; prohibits granting a security interest in any assets of
       FutureLink Canada Corp.*

17.    General Security Agreement between Merisel Canada Inc. and Sysgold Ltd.
       (now FutureLink Canada Corp.) dated as of May 5, 1995; prohibits granting
       a security interest in any assets of FutureLink Canada Corp.*

18.    General Security Agreement between Tech Data Canada Inc. and Charon
       Systems Inc. (now FutureLink Canada Corp.) dated as of June 15, 2000;
       prohibits granting a security interest in any assets of FutureLink Canada
       Corp.*

(c) & (e)      REGULATORY CONSENTS OR APPROVALS

1.     Under the rules of the Nasdaq Stock Market, shareholder approval of the
       transactions contemplated by the Note (or a waiver of such approval by
       Nasdaq) may be required. The Borrower intends to seek a waiver of the
       shareholder approval requirements. In the alternative, the Borrower will
       seek shareholder approval at a special stockholders meeting.

2.     Under the rules of the Nasdaq Stock Market, a Notification Form: Listing
       of Additional Shares may have been required to be filed at least 15 days
       prior to the issuance of the Note. Such filing has not yet been made. The
       Borrower intends to make such filing as soon as practicable after the
       execution of this Note.

                                       17
<PAGE>   18

                                 SCHEDULE 2.4(a)

1.     Annual Report for the year ended December 31, 2000 on Form 10-KSB as
       filed on 4/2/01

2.     Current report on Form 8-K Filed on 4/2/01

3.     Registration Statement on Form S-8 Filed on 3/30/01

4.     Amendment No. 2 to Tender Offer on Schedule TO-I Filed on 3/19/01

5.     Amendment No. 1 to Tender Offer on Schedule TO-I Filed on 3/9/01

6.     Prospectus to Registration Statement on Form S-3 Filed Pursuant to Rule
       424(b)(3) Filed on 2/16/01

7.     Amendment No. 1 on Form S-3 to Registration Statement on Form SB-2 Filed
       on 2/12/01

8.     Tender Offer on Schedule TO-I Filed on 2/12/01

9.     Current Report on Form 8-K Filed on 2/9/01

                                       18
<PAGE>   19

                                                                       EXHIBIT A

UNITS:                              Each Unit shall consist of (i) a $100,000
                                    Senior Subordinated Convertible Note (the
                                    "Notes") and (ii) warrants to purchase 15%
                                    of the shares of Common Stock issuable upon
                                    conversion of the Notes as set forth below
                                    (the "Warrants"). Each $100,000 of principal
                                    and interest due and owing on the $5,000,000
                                    Secured Subordinated Convertible Promissory
                                    Note to which this Exhibit A is attached
                                    (the "Bridge Note") shall convert into one
                                    Unit. The Units issued on conversion of the
                                    Initial Advance (as defined in the Bridge
                                    Note) are referred to as the "First Tranche
                                    Units" and the Units issued on conversion of
                                    the Subsequent Advance (as defined in the
                                    Bridge Note) are referred to as the "Second
                                    Tranche Units." The holders of the Units are
                                    collectively referred to as the "Investor".
                                    Pequot Capital Management, Inc. and/or its
                                    affiliates and/or JDS Capital Management,
                                    Inc. and/or its affiliates shall also have
                                    the right to purchase a pro rata portion of
                                    up to an additional amount of $2,500,000 in
                                    the next round of equity or convertible debt
                                    financing in which the Company receives
                                    aggregate gross proceeds of at least
                                    $5,000,000 (for a total of up to $7,500,000)
                                    (the "Third Party Financing").

THE NOTES:

       Interest                     Rate: The Notes shall bear interest at 8%
                                    per annum, payable quarterly in cash, or, at
                                    the investors option, in kind.

       Maturity:                    The Maturity Date shall be the earlier of
                                    (i) 36 months from the date of issuance or
                                    (ii) upon a Liquidation Event (as
                                    hereinafter defined).

       Conversion:                  At any time on or prior to the Maturity
                                    Date, at the option of the holder, all or
                                    any portion of the principal amount of the
                                    Notes and all accrued and unpaid interest
                                    due on such Notes, may be converted into (i)
                                    the number of shares of one or more series
                                    of preferred stock of the Company (the "New
                                    Preferred Stock"), each senior to the
                                    outstanding Series A Preferred Stock of the
                                    Company and with the terms and conditions
                                    described herein, and, if the Third Party
                                    Financing occurs, with the exception of the
                                    Common Stock Conversion Price, on
                                    substantially the same terms and conditions
                                    as the

<PAGE>   20

                                    preferred stock to be issued in the Third
                                    Party Financing, equal to the portion of the
                                    principal and accrued and unpaid interest
                                    due on such Notes which the holder decides
                                    to convert, divided by the Preferred Stock
                                    Conversion Price or (ii) the number of
                                    shares of Common Stock of the Company
                                    ("Common Stock") equal to the portion of the
                                    principal and accrued and unpaid interest
                                    due on such Notes which the holder decides
                                    to convert, divided by the Common Stock
                                    Conversion Price.

       Conversion Price:            The Preferred Stock Conversion Price shall
                                    be $10.00.

                                    The Common Stock Conversion Price of the
                                    First Tranche Units shall be the average
                                    closing bid price of the Common Stock for
                                    the five trading days preceding the date of
                                    the Initial Advance (the "Initial Funding
                                    Date").

                                    The Common Stock Conversion Price of the
                                    Second Tranche Units shall be determined as
                                    follows: (a) if the Third Party Financing
                                    closes within 15 days of the Initial Funding
                                    Date, the Common Stock Conversion Price
                                    shall be the lower of the average closing
                                    bid price of the Common Stock for the five
                                    trading days preceding the Initial Funding
                                    Date and the five trading days preceding the
                                    closing date of the Third Party Financing
                                    (the "Third Party Financing Common Stock
                                    Conversion Price"); (b) if the Third Party
                                    Financing closes more than 15 days after the
                                    Initial Funding Date but on or before May
                                    30, 2001, the Common Stock Conversion Price
                                    shall be the lower of $0.60 and the Third
                                    Party Financing Common Stock Conversion
                                    Price and (c) if the Third Party Financing
                                    closes after May 30, 2001, the Common Stock
                                    Conversion Price shall be the same as the
                                    Common Stock Conversion Price of the First
                                    Tranche Units.

                                    Notwithstanding the preceding paragraph, if
                                    and solely to the extent necessary to comply
                                    with the Nasdaq Stock Marketplace Rules (the
                                    "Nasdaq Rules"), (a) the Common Stock
                                    Conversion Price for the Second Tranche
                                    Units shall be fixed at the average closing
                                    bid price of the Common Stock for the five
                                    trading days preceding the date of the
                                    Subsequent Advance and (b) if such Common
                                    Stock Conversion Price for the Second
                                    Tranche Units is less than the Common Stock
                                    Conversion Price for the First Tranche
                                    Units, the Company shall issue to the
                                    Investor special warrants to purchase
                                    additional shares of Common Stock in an

                                       2
<PAGE>   21

                                    amount equal to (i) the difference between
                                    the Common Stock Conversion Price for the
                                    First Tranche Units less the Common Stock
                                    Conversion Price for the Second Tranche
                                    Units (ii) multiplied by the number of
                                    shares of Common Stock into which the Second
                                    Tranche Units are convertible (the "Special
                                    Warrants"). The exercise price of the
                                    Special Warrants shall be equal to the
                                    Common Stock Conversion Price of the Second
                                    Tranche Units.

       Conversion Limitation:       In order to be in compliance with the Nasdaq
                                    Rules relating to shareholder approval of a
                                    transaction by an issuer other than a public
                                    offering, the holders of the Units
                                    (including the Investor) will agree not to
                                    convert the securities which comprise the
                                    Units into a number of shares of Common
                                    Stock which, together with any securities
                                    issued in connection with the Third Party
                                    Financing, in the aggregate, would result in
                                    the issuance of more than 19.9 % of the
                                    outstanding shares of Common Stock before
                                    the issuance of the Units (the "Conversion
                                    Limitation"), until the receipt of
                                    stockholder approval of the transaction or a
                                    waiver of such requirement from Nasdaq. The
                                    Company agrees to seek shareholder approval
                                    of the transactions contemplated by the Note
                                    and this Exhibit A or such a waiver as soon
                                    as reasonably practicable, but in no event
                                    later than June 30, 2001.

       Call Provision:              The Notes shall be callable by the Company,
                                    at such time as the closing bid price for
                                    the Common Stock of the Company has equaled
                                    or exceeded, in each case for the 30
                                    consecutive trading days prior to the
                                    Company's notice to holders to call such
                                    Notes, (i) twice the Common Stock Conversion
                                    Price during year one, (ii) two and a half
                                    times the Common Stock Conversion Price
                                    during year two, and (iii) three times the
                                    Common Stock Conversion Price during year
                                    three or beyond, provided the Common Stock
                                    of the Company is trading on a national
                                    securities exchange or the NASDAQ SmallCap
                                    or National Market System, and the shares
                                    underlying the Notes are fully registered
                                    for resale and not subject to any lock-up
                                    provisions. The Investor shall have the
                                    right to convert all of the Notes before the
                                    call date and the Company may not call the
                                    Notes if the Investor's right to convert
                                    such Notes is restricted in any way.

       Put Provision:               In the event that at the two-year
                                    anniversary of the closing of the First
                                    Tranche Units (the "Anniversary Date"), the
                                    average closing bid price of the Company's

                                       3
<PAGE>   22

                                    Common Stock for the 30 consecutive trading
                                    days immediately preceding such two-year
                                    anniversary (the "Average Trading Price") is
                                    less than the Common Stock Conversion Price,
                                    the Noteholder will have the right to
                                    accelerate the Maturity Date of the Notes to
                                    a date twenty days after the Anniversary
                                    Date (the "Put"). In the event of such Put,
                                    the Company shall have the option to pay
                                    such redemption price in cash or in shares
                                    of the Company's common stock valued at the
                                    Average Trading Price provided the shares to
                                    be issued are fully registered for resale
                                    pursuant to an effective registration
                                    statement and are not subject to any lock-up
                                    provisions.

       Security/Ranking:            The Notes shall be secured by substantially
                                    all of the assets of the Company and shall
                                    rank senior to any existing or future
                                    indebtedness but shall be subordinate to
                                    Senior Indebtedness (to be defined in the
                                    definitive documentation).

       Covenants:                   The Notes shall contain standard affirmative
                                    and negative covenants including
                                    restrictions on incurrence of debt, payment
                                    of dividends, mergers, increases in
                                    compensation, related party transactions,
                                    etc.

       Antidilution:                If the Third Party Financing closes on or
                                    before May 30, 2001 and the Third Party
                                    Financing Common Stock Conversion Price is
                                    less than the Common Stock Conversion Price
                                    for the First Tranche Units, then the Common
                                    Stock Conversion Price for the First Tranche
                                    Units shall be reduced to the Third Party
                                    Financing Common Stock Conversion Price and
                                    the number of shares of Common Stock into
                                    which the Units are convertible (the
                                    "Conversion Shares") shall be adjusted
                                    accordingly.

                                    Notwithstanding the preceding paragraph, if
                                    and solely to the extent necessary to comply
                                    with the Nasdaq Stock Marketplace Rules (the
                                    "Nasdaq Rules"), (a) the Common Stock
                                    Conversion Price for the First Tranche Units
                                    shall be fixed at the average closing bid
                                    price of the Common Stock for the five
                                    trading days preceding the Initial Funding
                                    Date and (b) if the Third Party Financing
                                    Common Stock Conversion Price is less than
                                    the Common Stock Conversion Price for the
                                    First Tranche Units, the Company shall issue
                                    to the Investor special warrants to purchase
                                    additional shares of Common Stock in an
                                    amount equal to (i) the Common Stock
                                    Conversion Price for the First Tranche Units
                                    less the Third Party Financing Common Stock
                                    Conversion

                                       4
<PAGE>   23

                                    Price (ii) multiplied by the number of
                                    shares of Common Stock into which the First
                                    Tranche Units are convertible (the
                                    "Additional Special Warrants"). The exercise
                                    price of the Additional Special Warrants
                                    shall be equal to the average closing bid
                                    price of the Common Stock for the five
                                    trading days preceding the closing date of
                                    the Third Party Financing.

                                    In the event that after the Initial Funding
                                    Date (except as provided in this Exhibit A)
                                    the Company issues any other shares of
                                    Common Stock, preferred stock, options,
                                    warrants or convertible securities at a
                                    purchase price, conversion price or exercise
                                    price (including any adjustments thereof)
                                    per share less then the fair market value
                                    (the "Purchase Price"), then the applicable
                                    Conversion Price and the number of
                                    Conversion Shares shall be adjusted on a
                                    weighted-average basis (subject to certain
                                    customary exceptions to be agreed to by the
                                    parties), unless any such issuance occurs
                                    within one-year after the initial closing of
                                    the First Tranche Units and the Purchase
                                    Price is below the Conversion Price, in
                                    which event the Conversion Price shall be
                                    automatically reduced to such lower price,
                                    and the number of Conversion Shares shall be
                                    adjusted accordingly. Notwithstanding the
                                    foregoing, no anti-dilution adjustment shall
                                    be applicable in the event that (i) the
                                    Purchase Price of any securities issued
                                    equals twice the Conversion Price and (ii)
                                    the Conversion Shares are fully registered
                                    for resale pursuant to an effective
                                    registration statement and are not subject
                                    to any lock-up provisions.

                                    Appropriate adjustments shall be made in the
                                    applicable Conversion Price and the number
                                    of Conversion Shares for stock splits,
                                    reverse splits, combinations,
                                    reclassifications and similar changes.

       Registration Rights:         The Company shall file a registration
                                    statement covering the shares of Common
                                    Stock underlying the Units (without giving
                                    effect to the potential anti-dilution
                                    calculations) within three months after the
                                    closing of the First Tranche Units, and
                                    shall use its best efforts to cause such
                                    registration statement to become effective
                                    within two months after such filing, subject
                                    to the lock-up provision set forth below.
                                    Unlimited piggyback registration rights. In
                                    the event that such registration statement
                                    is not effective within six months or the
                                    effectiveness and use thereof is suspended
                                    beyond certain mutually agreed periods then
                                    the applicable

                                       5
<PAGE>   24

                                    Conversion Price shall be reduced by 5% for
                                    each month, or portion thereof, until such
                                    time as the registration statement is
                                    effective or the suspension ceases and the
                                    prospectus may be used.

       Amendments/Waivers:          The provisions of the Notes may from time to
                                    time be amended, modified or waived, if such
                                    amendment, modification or waiver is in
                                    writing and consented to by the Company and
                                    the holders of not less than 50% in
                                    principal amount of the Notes.

       NEW PREFERRED STOCK:         The New Preferred Stock shall have the same
                                    covenants and antidilution rights as the
                                    Notes. The New Preferred Stock shall have
                                    customary terms, including, but not limited
                                    to, customary conversion rights and voting
                                    rights. In addition, the New Preferred Stock
                                    shall have the following terms:

       Original Issue Price:        The Original Issue Price for each share of
                                    New Preferred Stock shall be $10.00.

                                    Liquidation Value/Preference: Each share of
                                    New Preferred Stock shall be entitled to
                                    receive, in preference to holders of common
                                    stock and the holders of any shares of
                                    Series A Preferred Stock, an amount such
                                    that holders of each share of New Preferred
                                    Stock shall receive a compound annual return
                                    on the Original Issue Price equal to 33%,
                                    (the "Liquidation Preference"). In no event
                                    shall the holders of New Preferred Stock
                                    receive a return on the Original Issue Price
                                    of less than 15%, irrespective of the date
                                    of such a Liquidation Event. After payment
                                    in full of the Liquidation Preference, the
                                    holders of shares of New Preferred Stock
                                    shall be entitled to participation in the
                                    Company's remaining assets, and any assets
                                    available for distribution shall be
                                    distributed to the holders of the Common
                                    Stock and the holders of New Preferred Stock
                                    in proportion to the number of shares of
                                    Common Stock then held by them and the
                                    number of shares of Common Stock which they
                                    then have the right to acquire upon
                                    conversion of the shares of New Preferred
                                    Stock then held by them. A merger or
                                    consolidation, where existing stockholders
                                    do not retain more than 50% of the voting
                                    power or interest, a sale of all or
                                    substantially all of the Company's assets or
                                    an acquisition of 50% or more of the voting
                                    power or interest in the Company by a single
                                    person or Section 13D (except in a
                                    transaction provided in this Exhibit A)
                                    group shall be deemed to be a liquidation
                                    for purposes

                                       6
<PAGE>   25

                                    hereof except to the extent that such
                                    acquisition, merger or consolidation
                                    transaction involves the formation of a
                                    holding company or is an internal
                                    reorganization or reclassification, the
                                    effect of which is that more than 50% of the
                                    voting power remain constant ("Liquidation
                                    Event").

       Dividends:                   Holders of New Preferred Stock shall be
                                    entitled to receive, prior to any payments
                                    of dividends to holders of the Common Stock
                                    or other series of preferred stock of the
                                    Company, cumulative dividends payable
                                    quarterly in the amount of 8% per annum per
                                    share. To the extent that the dividend is
                                    not declared and paid quarterly, it shall
                                    accumulate. At the option of the holder,
                                    dividends may be paid in-kind or paid in
                                    cash.

WARRANTS; SPECIAL WARRANTS:         The Company shall issue seven-year Warrants
                                    to purchase a number of shares of Common
                                    Stock equal to 15% of the number of shares
                                    of Common Stock initially issuable upon
                                    conversion of the Notes, at an exercise
                                    price equal to 100% of the Common Stock
                                    Conversion Price (the "Warrant Exercise
                                    Price"). The Company shall issue seven year
                                    Special Warrants and Additional Special
                                    Warrants as described herein. The number of
                                    shares to be issued upon exercise of the
                                    Warrants, Special Warrants and Additional
                                    Special Warrants are hereinafter referred to
                                    as the Warrant Shares. The Warrants, Special
                                    Warrants and Additional Special Warrants
                                    shall contain the same anti-dilution rights
                                    as provided in the Notes and shall provide
                                    for cashless exercise.

                                       7<PAGE>   1

                                                                    EXHIBIT 10.4

THE RIGHTS OF THE SECURED PARTY UNDER THIS SECURITY AGREEMENT SHALL BE
SUBORDINATED TO THE EXTENT AND IN THE MANNER PROVIDED IN THAT CERTAIN PEQUOT
SUBORDINATION AGREEMENT BETWEEN THE SECURED PARTY AND FOOTHILL CAPITAL
CORPORATION, A CALIFORNIA CORPORATION (THE "SUBORDINATION AGREEMENT"). THE
SECURED PARTY AND SUBSEQUENT HOLDER OF THE NOTE (AS DEFINED BELOW), BY
ACCEPTANCE OF THEREOF, ACKNOWLEDGE AND AGREE TO BE BOUND BY THE SUBORDINATION
AGREEMENT.

                               SECURITY AGREEMENT

              SECURITY AGREEMENT dated as of April 20, 2001 ("Security
Agreement"), between FUTURELINK CORP., a Delaware corporation (the "Borrower"),
each of the subsidiaries of the Borrower listed under the caption "SUBSIDIARY
GUARANTORS" on the signature pages hereto (the "Subsidiary Guarantors" and
together with the Borrower, the "Securing Parties") and PEQUOT PRIVATE EQUITY
FUND II, L.P., a Delaware limited partnership (the "Secured Party").

              PRELIMINARY STATEMENTS.

              1. The Borrower has entered into a Secured Subordinated
Convertible Promissory Note in favor of the Secured Party, dated the date hereof
(as modified and supplemented and in effect from time to time, the "Note"),
which evidences one or more loans to be to be made by the Secured Party to the
Borrower in an aggregate principal amount of up to $5,000,000. Capitalized terms
used in this Security Agreement and not otherwise defined herein shall have the
meanings set forth in the Note.

              2. Each Subsidiary Guarantor will receive direct and indirect
benefits by reason of the availability of the loan extended pursuant to the
Note.

              3. It is a condition precedent to the obligation of the Secured
Party to enter into the Note and to provide a loan to the Borrower pursuant to
the Note that the Borrower and the Subsidiary Guarantors shall have granted the
security interest contemplated by this Security Agreement.

              NOW, THEREFORE, in consideration of the premises and in order to
induce the Secured Party to provide a loan to the Borrower as provided in the
Note, the Securing Parties hereby agree as follows:

              SECTION 1. Grant of Security. Each Securing Party hereby grants to
the Secured Party a security interest in and on all of such Securing Party's
right, title and interest in and to all of the following, whether now owned or
hereafter acquired or existing (the "Collateral"):

<PAGE>   2

              (a) The shares of capital stock of the respective corporations
identified on Schedule I hereto under the caption "Issuer" (the "Issuers")
represented by the certificates identified on Schedule I hereto under the name
of such Securing Party and all other shares of capital stock of whatever class
of the Issuers, now or hereafter owned by such Securing Party, in each case
together with the certificates evidencing the same (collectively, the "Pledged
Stock");

              (b) All shares, securities, money or property representing a
dividend on any of the Pledged Stock, or representing a distribution or return
of capital upon or in respect of the Pledged Stock, or resulting from a
split-up, revision, reclassification or other like change of the Pledged Stock
or otherwise received in exchange therefor, and any subscription warrants,
rights or options issued to the holders of, or otherwise in respect of, the
Pledged Stock;

              (c) Without affecting the obligations of such Securing Party under
any provision prohibiting such action hereunder or under the Note, in the event
of any consolidation or merger in which an Issuer is not the surviving
corporation, all shares of each class of the capital stock of the successor
corporation (unless such successor corporation is such Securing Party itself)
formed by or resulting from such consolidation or merger (the Pledged Stock,
together with all other certificates, shares, securities, properties or moneys
as may from time to time be pledged hereunder pursuant to clause (a) or (b)
above and this clause (c) being herein collectively called the "Stock
Collateral")

              (d) Except for the equipment subject to liens set forth on
Schedule 1(d) hereto in an aggregate amount not to exceed $23,000,000 and
Permitted Purchase Money Liens (as defined in Section 4(b)) (for so long as such
lessors and/or lenders set forth on Schedule 1(d) hereto maintain a security
interest in such equipment), all equipment in all of its forms, wherever
located, including, without limitation, all machinery and other goods,
furniture, furnishings, fixtures, office supplies and all other similar types of
tangible personal property and all parts thereof and all accessions thereto,
together with all parts, fittings, special tools, alterations, substitutions,
replacements and accessions thereto (any and all such equipment, parts and
accessions being the "Equipment");

              (e) All inventory in all of its forms, wherever located,
including, but not limited to, (i) all raw materials and work in progress,
finished goods, and materials used or consumed in manufacture or production,
(ii) goods in which such Securing Party has an interest in mass or a joint or
other interest or right of any kind (including, without limitation, goods in
which such Securing Party has an interest or right as consignee), and (iii)
goods which are returned to or repossessed by such Securing Party, and all
accessions thereto and products thereof and all documents and documents of title
relating to or covering any of the foregoing or any other assets ("Documents")
(any and all such inventory, accessions, products and Documents being the
"Inventory");

                                       2
<PAGE>   3

              (f) All accounts, accounts receivable, contract rights, chattel
paper, instruments, acceptances, drafts, and other obligations of any kind,
whether or not arising out of or in connection with the sale or lease of goods
or the rendering of services, together with all ledger sheets, files, records
and documents relating to any of the foregoing, including all computer records,
programs, storage media and computer software useful or required in connection
therewith (the "Receivables"), and all rights now or hereafter existing in and
to all security agreements, leases, and other contracts securing or otherwise
relating to any such Receivables, and any and all such leases, security
agreements and other contracts (the "Related Contracts");

              (g) All rights under all contracts or agreements to which such
Securing Party is a party (other than contracts or agreements which by their
terms expressly prohibit the granting of any lien, charge, claim or encumbrance
of any nature whatsoever ("Lien") thereon);

              (h) All trademarks, trade names, trade styles, service marks,
prints and labels on which said trademarks, trade names, trade styles and
service marks have appeared or appear, designs and general intangibles of like
nature, now existing or hereafter adopted, all right, title and interest therein
and thereto, and all registrations and recordings thereof, including, without
limitation, applications, registrations and recordings in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof, or any other country or any political subdivision
thereof, together with the goodwill associated therewith, and all reissues,
amendments, extensions or renewals thereof and all licenses thereof (the
"Trademarks");

              (i) All copyrights, copyrighted works or any item which embodies
such copyrighted work of the United States or any other country, all
applications therefor, all right, title and interest therein and thereto, and
all registrations and recordings thereof, including, without limitation,
applications, registrations and recordings in the United States Copyright Office
or in any similar office or agency of the United States, any State thereof or
any other country or any political subdivision thereof, and all derivative
works, extensions or renewals thereof (the "Copyrights");

              (j) All letters patent of the United States or any other country,
and all applications therefor, all right, title and interest therein and
thereto, and all registrations and recordings thereof, including, without
limitation, applications, registrations and recordings in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State thereof or any other country or any political subdivision
thereof, and all reissues, continuations, divisionals, continuations-in-part or
extensions thereof and all licenses thereof (the "Patents");

              (k) All other tangible and intangible personal property and
fixtures; and

              (l) All proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds which constitute property of the types
described in clauses (a) through (k) of this Section 1) and, to the extent not
otherwise included, all payments under insurance (whether or not the Secured
Party is the loss payee thereof), or any

                                       3
<PAGE>   4

indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing items.

              Notwithstanding the foregoing, the Collateral does not and shall
not include any shares of capital stock of or other equity interests in KNS
Holdings Ltd. and FutureLink Europe Limited, each a company organized under the
laws of England and Wales.

              SECTION 2. Security for Obligations. The Collateral secures the
prompt and complete payment when due of (i) the outstanding principal and
interest on the Note, (ii) all other obligations of the Borrower under the Note,
and (iii) all obligations of the Borrower to the Secured Party specifically set
forth in this Security Agreement and not obligations under any agreement entered
into prior to the effective date of this Security Agreement (collectively, the
"Secured Obligations").

              SECTION 3. The Securing Parties Remain Liable. Anything herein to
the contrary notwithstanding, (a) each Securing Party shall remain liable under
the contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Security Agreement had not been executed, (b) the exercise by
the Secured Party of any of the rights hereunder shall not release such Securing
Party from any of its duties or obligations under the contracts and agreements
included in the Collateral, and (c) the Secured Party shall not have any
obligation or liability under the contracts and agreements included in the
Collateral by reason of this Security Agreement, nor shall the Secured Party be
obligated to perform any of the obligations or duties of such Securing Party
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.

              SECTION 4. Representations and Warranties. Each Securing Party
represents and warrants to the Secured Party as follows:

              (a) All of the Equipment and Inventory (i) were acquired in the
ordinary course of business and (ii) are owned by one of the Securing Parties
and located at the places specified on Schedule II hereto. The chief place of
business and chief executive office of each Securing Party and the office where
such Securing Party keeps its records concerning Receivables are located at the
address specified on Schedule II hereto. All originals of all chattel paper
which evidence Receivables shall be delivered to the Secured Party upon
termination of the Senior Indebtedness that is secured by such Receivables. None
of the Receivables is evidenced by a promissory note or other instrument.

              (b) Each Securing Party owns the Collateral free and clear of any
Lien, except for the Permitted Liens. As used herein, "Permitted Liens" shall
mean the security interest created by this Security Agreement, the security
interests existing in respect of the Senior Indebtedness, the liens listed on
Schedule 4(b) hereto, liens for unpaid taxes not yet delinquent, interests of
lessors under operating leases, purchase money liens, so long as such lien
attaches only to the asset purchased or acquired and the proceeds thereof and in
an aggregate amount not to exceed $2,000,000 as contemplated by the

                                       4
<PAGE>   5

Secured Parties' budget for the next six months from the date of this Security
Agreement, which has been provided to the Secured Party (the "Permitted Purchase
Money Liens"), liens arising by operation of law incurred in the ordinary course
of business and not in connection with the borrowing of money, liens arising
from deposits made in connection with obtaining worker's compensation or other
unemployment insurance, liens or deposits to secure performance of bids,
tenders, or leases incurred in the ordinary course of business and not in
connection with the borrowing of money, liens granted a security for surety or
appeal bonds in connection with obtaining such bonds in the ordinary course of
business, liens resulting from any judgment or award that is not a default and
easements, rights of way and zoning restrictions that do not materially
interfere with or impair the use or operation of the subject property. No
effective financing statement or other instrument similar in effect covering all
or any part of the Collateral is on file in any recording office, except for
financing statements filed with respect to the Permitted Liens.

              (c) No Securing Party conducts business under any name or trade
name other than its proper corporate name or FutureLink.

              (d) Each Securing Party has exclusive possession and control of
its respective Equipment and Inventory.

              (e) All material Related Contracts of each Securing Party are in
full force and effect, and such Securing Party and, to the such Securing Party's
knowledge, the other persons to each such Related Contract have performed in all
material respects their respective obligations under each such Related Contract.

              (f) Schedule III sets forth a complete and correct list of all
registered Patents, Trademarks and Copyrights and applications therefor owned by
each Securing Party on the date hereof. Such Securing Party has the right to use
all Patents, Trademarks, and Copyrights and all computer programs and other
rights, free from materially burdensome restrictions, which are necessary for
the operation of its business as presently conducted. There is not pending or
threatened any claim or litigation against or affecting such Securing Party
contesting the validity of any of the Patents, Trademarks or Copyrights or
computer program or other right.

              (g) This Security Agreement creates a valid Lien in the
Collateral, securing the payment of the Secured Obligations, and all other
actions necessary or desirable to perfect and protect such security interest as
requested by the Lender have been duly taken.

              (h) No authorization, approval or other action by, and no notice
to or filing with, any governmental or regulatory agency or authority is
required (1) for the grant by each Securing Party of the security interest
granted hereby or (2) for the execution, delivery or performance of this
Security Agreement by such Securing Party or (3) other than such filings as may
be required to be made with the United States Patent and Trademark Office,
United States Copyright Office or under the Uniform Commercial Code (the
"Code"), or with the Canadian federal and provincial governmental authorities,
for the perfection of or the exercise by the Secured Party of their respective
rights and

                                       5
<PAGE>   6

remedies hereunder.

              SECTION 5. Further Assurances.

              (a) After the Senior Indebtedness that is secured by the Stock
Collateral either (i) has been paid in full and the commitments to advance loans
thereunder have been terminated or (ii) the pledge of such Stock Collateral has
been released thereunder, each Securing Party shall, if any of the shares,
securities or moneys or property required to be pledged by such Securing Party
under clauses (a), (b) or (c) of Section 1 hereof are received by such Securing
Party, forthwith either (i) transfer and deliver to the Secured Party such
shares or securities so received by such Securing Party (together with the
certificates for such shares and securities duly endorsed in blank or
accompanied by undated stock powers duly executed in blank), all of which
thereafter shall be held by the Secured Party, pursuant to the terms of this
Security Agreement, as part of the Collateral, or (ii) take such other action as
the Secured Party shall deem necessary or appropriate to duly record the Lien
created hereunder in such shares, securities, moneys or property in said clauses
(a), (b) and (c).

              (b) Each Securing Party will cause the Stock Collateral to
constitute at all times the percentage of the total number of shares of each
class of capital stock of each Issuer then outstanding as set forth on Schedule
I hereto.

              (c) So long as no Default shall have occurred and be continuing,
the Securing Parties shall have the right to exercise all voting, consensual and
other powers of ownership pertaining to the Stock Collateral for all purposes
not inconsistent with the terms of this Security Agreement or the Note.

              (d) Unless and until a Default has occurred and is continuing, the
Securing Parties shall be entitled to receive and retain any dividends on the
Stock Collateral paid in cash out of earned surplus.

              (e) If any Default shall have occurred and the Senior Indebtedness
that is secured by the Stock Collateral either (i) has been paid in full and the
commitments to advance loans thereunder have been terminated, or (ii) the pledge
of such Stock Collateral has been released thereunder, then so long as such
Default shall continue, all dividends and other distributions on the Stock
Collateral shall be paid directly to the Secured Party to apply to payment of
the Secured Obligations.

              (f) Each Securing Party agrees that from time to time, at the
expense of such Securing Party, such Securing Party will promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or that the Secured Party may reasonably request,
in order to perfect and protect any security interest granted or purported to be
granted hereby or to enable the Secured Party to exercise and enforce its rights
and remedies hereunder with respect to any Collateral, including, but not
limited to, the filing of any additional financing statements that may be
required by the adoption of Revised Article 9 of the Uniform Commercial Code in
the State of New York. Without limiting the generality of the

                                       6
<PAGE>   7

foregoing, such Securing Party will: (1) subject to the termination of the
security interests existing under the Senior Indebtedness that is secured by
Receivables, if any Receivable shall be evidenced by a promissory note or other
instrument or chattel paper, deliver such promissory note or other instrument or
chattel paper to the Secured Party duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Secured Party; and (2) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Secured Party may request,
in order to perfect and preserve the security interest granted or purported to
be granted hereby.

              (g) Each Securing Party hereby authorizes the Secured Party to
file one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of such
Securing Party where permitted by law. A carbon, photographic or other
reproduction of this Security Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law.

              (h) Each Securing Party will furnish to the Secured Party from
time to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Secured Party may reasonably request, all in reasonable detail.

              (i) Subject to any claims under the Senior Indebtedness, each
Securing Party will defend the Collateral against all claims and demands of all
persons (other than the Secured Party) claiming an interest therein. Such
Securing Party will pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the Collateral,
except to the extent where there is a good faith contest to the validity
thereof. In connection with any such good faith contest such Securing Party
will, at the request of the Secured Party, promptly provide a bond, cash deposit
or other security reasonably satisfactory to protect the security interest of
the Secured Party should such good faith contest be unsuccessful.

              SECTION 6. As to Equipment, Inventory and Trademarks. Each
Securing Party shall:

              (a) Keep the Equipment and Inventory (other than Inventory sold in
the ordinary course of business) at the places therefor specified in Schedule II
hereto or, upon 30 days' prior written notice to the Secured Party, at such
other places in jurisdictions where all action required by Section 5 shall have
been taken with respect to the Equipment and Inventory;

              (b) Cause the Equipment necessary for the conduct of its business
to be maintained and preserved in the same condition, repair and working order
as when new, ordinary wear and tear excepted, and shall forthwith, or in the
case of any loss or damage to any of the Equipment as quickly as practicable
after the occurrence thereof, make or cause to be made all repairs,
replacements, and other improvements in connection

                                       7
<PAGE>   8

therewith which are necessary or desirable to such end;

              (c) Permit the Secured Party or any agent thereof to have access
to the Inventory and Equipment for purposes of inspection during normal business
hours and upon reasonable notice to the Securing Party;

              (d) Promptly notify the Secured Party in writing of any material
loss or damage to the Inventory or Equipment;

              (e) Not sell, assign, lease, mortgage, transfer or otherwise
dispose of any interest in the Inventory or Equipment, except in the ordinary
course of business;

              (f) Not use or permit the Inventory or Equipment to be used for
any unlawful purpose or in violation of any law or for hire;

              (g) Not permit the Equipment to become a part of or to be affixed
to any real property of any person;

              (h) Advise the Secured Party of all Trademarks, Patents and
Copyrights or applications for or registration of the same, created or obtained
by a Securing Party on or after the date of this Security Agreement; and

              (i) Take all reasonable steps to maintain and enforce the
Trademarks, Patents and Copyrights material to the conduct of its business,
including but not limited to (1) payment of all fees, (2) prosecuting infringers
if failure to do so would materially and adversely affect the business of a
Securing Party and (3) diligently pursuing any application or registration
material to the business of a Securing Party.

              SECTION 7. Insurance.

              (a) The Securing Parties shall, at their own expense, maintain
insurance with respect to the Equipment and Inventory in such amounts, against
such risks, in such form and with such insurers, as shall be reasonably
satisfactory to the Secured Party from time to time.

              (b) Reimbursement under any liability insurance maintained by such
Securing Party pursuant to this Section 7 may be paid directly to the person who
shall have incurred liability covered by such insurance. In case of any loss
involving damage to Equipment or Inventory when subsection (c) of this Section 7
is not applicable, such Securing Party shall make or cause to be made the
necessary repairs to or replacements of such Equipment or Inventory, and any
proceeds of insurance maintained by such Securing Party pursuant to this Section
7 shall be paid to such Securing Party as reimbursement for the costs of such
repairs or replacements.

              (c) Subject to the terms of the Senior Indebtedness, upon the
occurrence of any Default (as defined in the Note), all insurance payments in
respect of such Equipment or Inventory shall be paid to the Secured Party to be
applied to payment of the amounts due under the Note and hereunder.

                                       8
<PAGE>   9

              SECTION 8. As to Receivables.

              (a) Each Securing Party shall keep the Receivables (except the
originals of all chattel paper which evidences such Receivables, which after the
Senior Indebtedness that is secured by such Receivables is paid in full and the
commitments to advance loans thereunder have been terminated, shall promptly
deliver to the Secured Party) at its chief place of business and chief executive
office and the office where it keeps its records concerning the Receivables, at
the location therefor specified in Schedule II hereto or, upon 30 days' prior
written notice to the Secured Party, at such other locations in a jurisdiction
where all action required by Section 5 shall have been taken with respect to
Receivables. Such Securing Party will hold and preserve such records and will
permit representatives of the Secured Party to inspect and make abstracts from
such records.

              (b) Except as otherwise provided in this subsection (b), each
Securing Party shall continue to collect, at its own expense, all amounts due or
to become due to such Securing Party under the Receivables. In connection with
such collections, such Securing Party may take (and, at the discretion of the
Secured Party, shall take) such action as such Securing Party or the Secured
Party may deem necessary or advisable to enforce collection of the Receivables;
provided, however, that the Secured Party shall have the right at any time, upon
the occurrence and during the continuance of a Default upon written notice to
such Securing Party of its intention to do so, to notify the account debtors or
obligors under any Receivables of the assignment of such Receivables to the
Secured Party and to direct such account debtors or obligors to make payment of
all amounts due or to become due to such Securing Party thereunder directly to
the Secured Party and, upon such notification and at the expense of such
Securing Party, to enforce collection of any such Receivables, and to adjust,
settle or compromise the amount or payment thereof, in the same manner and to
the same extent as such Securing Party might have done. After receipt by such
Securing Party of the notice from the Secured Party referred to in the proviso
to the preceding sentence and as long as there is a Default, (1) all amounts and
proceeds (including instruments) received by such Securing Party in respect of
the Receivables shall be received in trust for the benefit of the Secured Party
hereunder, shall be segregated from other funds of such Securing Party and shall
be forthwith paid over to the Secured Party in the same form as so received
(with any necessary endorsement) to be held as cash collateral, or be applied as
provided by Section 13(b), as determined by the Secured Party, and (2) such
Securing Party shall not adjust, settle or compromise the amount or payment of
any Receivable, or release wholly or partly any account debtor or obligor
thereof, or allow any credit or discount thereon, other than any discount
allowed for prompt payment.

              SECTION 9. Transfer and Other Liens. Each Securing Party shall
not:

              (a) Sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except in the ordinary course of business.

              (b) Except for purchase money financing in the ordinary course of
business, create or suffer to exist any Lien upon or with respect to any of the
Collateral to

                                       9
<PAGE>   10

secure debt of any person.

              SECTION 10. Secured Party Appointed Attorney-in-Fact. Each
Securing Party hereby irrevocably appoints each Secured Party as such Securing
Party's attorney-in-fact, with full authority in the place and stead of such
Securing Party and in the name of such Securing Party, the Secured Party or
otherwise, to, after the occurrence and during the continuance of a Default,
take any action and to execute any instrument which the Secured Party may deem
necessary or advisable to accomplish the purposes of this Security Agreement,
including, without limitation:

              (a) to obtain and adjust insurance required to be paid to the
Secured Party pursuant to Section 7;

              (b) to ask, demand, collect, sue for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;

              (c) to receive, endorse, assign, and collect any and all checks,
notes, drafts and other negotiable and non-negotiable instruments, documents and
chattel paper, in connection with clause (a) or (b) above, and such Securing
Party waives notice of presentment, protest and non-payment of any instrument,
document or chattel paper so endorsed or assigned;

              (d) to file any claims or take any action or institute any
proceedings which the Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of the
Secured Party with respect to any of the Collateral; and

              (e) to sell, transfer, assign or otherwise deal in or with the
Collateral or the proceeds or avails thereof, as fully and effectually as if the
Secured Party were the absolute owner thereof.

              Each Securing Party hereby ratifies and approves all acts, other
than those which result from the Secured Party's gross negligence or willful
misconduct, of the Secured Party, as its attorney in-fact, pursuant to this
Section 10; and the Secured Party, as its attorney in-fact, will not be liable
for any acts of commission or omission, nor for any error of judgment or mistake
of fact or law other than those which result from the Secured Party's gross
negligence or willful misconduct. This power, being coupled with an interest, is
irrevocable so long as this Security Agreement remains in effect.

              Each Securing Party also authorizes the Secured Party, at any time
and from time to time, after the occurrence and during the continuance of a
Default, to communicate in its own name with any party to any contract,
agreement or instrument included in the Collateral with regard to the assignment
of such contract, agreement or instrument and other matters relating thereto.

              SECTION 11. Secured Party May Perform. If a Securing Party fails
to perform any agreement contained herein, the Secured Party may itself perform,
or cause

                                       10
<PAGE>   11

performance of, such agreement, and the expenses of the Secured Party incurred
in connection therewith shall be payable by the such Securing Party under
Section 14(b).

              SECTION 12. The Secured Party's Duties. The powers conferred on
the Secured Party hereunder are solely to protect their interest in the
Collateral and shall not impose any duty upon them to exercise any such powers.
Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Secured Party shall
not have any duty as to any Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining to
any Collateral.

              SECTION 13. Remedies. If any Default shall have occurred, then
during the continuance of such Default:

              (a) The Secured Party may exercise in respect of the Collateral,
in addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default under
the Code (whether or not the Code applies to the affected Collateral) and also
may (i) require each Securing Party to, and such Securing Party hereby agrees
that it will at its expense and upon the request of the Secured Party forthwith,
assemble all or part of the Collateral as directed by the Secured Party and make
it available to the Secured Party at a place to be designated by the Secured
Party which is reasonably convenient to both parties and (ii) to enter the
premises where any of the Collateral is located and take and carry away the
same, by any of its representatives, with or without legal process, to Secured
Party's place of storage, and (iii) without notice except as specified below,
sell the Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Secured Party's offices or elsewhere, for cash, on
credit or for future delivery and upon such other terms as the Secured Party may
deem commercially reasonable. Each Securing Party agrees that, to the extent
notice of sale shall be required by law, at least five (5) days' notice to such
Securing Party of the time and place of any public or private sale is to be made
shall constitute reasonable notification. The Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Secured Party may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place it was so adjourned.

              (b) All cash proceeds received by the Secured Party in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Secured Party, be held by the Secured
Party as collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Secured Party pursuant to Section 14) in
whole or in part by the Secured Party against, all or any part of Secured
Obligations in such order as the Secured Party shall elect. Any surplus of such
cash or cash proceeds held by the Secured Party and remaining after payment in
full of all the Secured Obligations to the Secured Party shall be paid over to
the respective Securing Party. If the proceeds of the sale of the Collateral are
insufficient to pay all of the Secured Obligations each Securing Party agrees to
pay upon demand any deficiency to the Secured Party.

                                       11
<PAGE>   12

              SECTION 14. Indemnity and Expenses.

              (a) Each Securing Party agrees to indemnify the Secured Party from
and against any and all claims, losses and liabilities arising out of or
resulting from this Security Agreement (including, without limitation,
enforcement of this Security Agreement), except claims, losses or liabilities
resulting from the Secured Party's gross negligence or willful misconduct.

              (b) Each Securing Party will upon demand pay to the Secured Party
the amount of any and all expenses, including the reasonable fees and out of
pocket disbursements of its counsel and of any experts and agents, which the
Secured Party may incur in connection with (1) filing or recording fees incurred
in connection with this Security Agreement, (2) the custody, preservation, use
or operation of, or the sale of, collection from, or other realization upon, any
of the Collateral, (3) the exercise or enforcement of any of the rights of the
Secured Party, or (4) the failure by such Securing Party to perform or observe
any of the provisions hereof. The Secured Party shall not be liable to such
Securing Party for damages as a result of delays, temporary withdrawals of the
Equipment from service or other causes other than those caused by the Secured
Party's gross negligence or willful misconduct.

              SECTION 15. Amendments; Etc. No amendment or waiver of any
provision of this Security Agreement nor consent to any departure by the
Securing Parties herefrom shall in any event be effective unless the same shall
be in writing and signed by the Secured Party, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.

              SECTION 16. Notices. All notices and other communications required
or permitted hereunder shall be in writing and shall be (i) mailed by registered
or certified mail, postage prepaid, (ii) delivered by reliable overnight courier
service, or (iii) otherwise delivered by hand or by messenger, addressed (A) if
to the Secured Party, to Pequot Capital Management, Inc., 500 Nyala Farm Road,
Westport, Connecticut 06880, Attention: Amber Tencic and Carol Holley, or at
such other address as any Secured Party shall have furnished to the Securing
Parties in writing, or (B) if to a Securing Party, to FutureLink Corp., 2 South
Pointe Drive, Lake Forest, California 92630, Attention: Chief Financial Officer
and General Counsel, or at such other address as such Securing Party shall have
furnished to the Secured Party in writing. All such notices and communications
shall be effective upon receipt.

              SECTION 17. Continuing Security Interest; Transfer of Notes. This
Security Agreement shall create a continuing security interest in the Collateral
and shall (1) remain in full force and effect until payment in full of the
Secured Obligations, (2) be binding upon each Securing Party and its successors
and assigns, and (3) inure to the benefit of the Secured Party and its
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (3), a Secured Party may assign or otherwise transfer
all or a portion of its rights and obligations under the Note to any other
person in accordance with the terms thereof, and such other person shall
thereupon become vested with all the benefits in respect thereof granted to the
Secured Party herein

                                       12
<PAGE>   13

or otherwise. Upon the payment in full of the Secured Obligation, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the Securing Parties. Upon any such termination, the Secured Party
will, at the Securing Parties' request, execute and deliver to the Securing
Parties such Uniform Commercial Code termination statements and such other
documentation as the Securing Parties shall reasonably request to effect the
termination and release of the Liens on the Collateral.

              SECTION 18. Subordination. Notwithstanding anything to the
contrary in this Security Agreement and in the Note, the indebtedness evidenced
by the Note, and all rights of the Secured Party hereunder, shall be subordinate
to the rights of the Senior Indebtedness.

              SECTION 19. Governing Law; Terms. This Security Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
except to the extent that the validity or perfection of the security interest
hereunder, or remedies hereunder, in respect of any particular Collateral are
governed by the laws of a jurisdiction other than the State of New York. Unless
otherwise defined herein or in the Note, terms used in Article 9 of the Uniform
Commercial Code in the State of New York are used herein as therein defined.

              SECTION 20. Miscellaneous. This Security Agreement is in addition
to and not in limitation of any other rights and remedies the Secured Party may
have by virtue of any other instrument or agreement heretofore,
contemporaneously herewith or hereafter executed by the Securing Parties or by
law or otherwise. If any provision of this Security Agreement is contrary to
applicable law, such provision shall be deemed ineffective without invalidating
the remaining provisions hereof. If and to the extent that applicable law
confers any rights in addition to any of the provisions of this Security
Agreement, the affected provision shall be considered amended to conform
thereto. The Secured Party shall not by any act, delay, omission or otherwise be
deemed to have waived any of its rights or remedies hereunder. A waiver by the
Secured Party of any right or remedy hereunder on any one occasion, shall not be
construed as a bar to or waiver of any such right or remedy which the Secured
Party would have had on any future occasion nor shall the Secured Party be
liable for exercising or failing to exercise any such right or remedy. This
Security Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument and the parties
hereto may execute this Security Agreement by signing any such counterpart.
Facsimile execution and delivery of this Security Agreement shall be legal,
valid and binding execution and delivery for all purposes.

         [The remainder of this page has been intentionally left blank.]

                                       13
<PAGE>   14

              IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed and delivered as of the date first above written.

                                   BORROWER

                                   FUTURELINK CORP., a Delaware corporation

                                   By:  /s/ HOWARD E. TAYLOR
                                      ------------------------------------------
                                      Howard E. Taylor, President
                                      and Chief Executive Officer

                                   SUBSIDIARY GUARANTORS

                                   FUTURELINK PLEASANTON CORP., a Delaware
                                   corporation

                                   By:  /s/ HOWARD E. TAYLOR
                                      ------------------------------------------
                                      Howard E. Taylor, President
                                      and Chief Executive Officer

                                   FUTURELINK MICRO VISIONS CORP., a Delaware
                                   corporation

                                   By:  /s/ HOWARD E. TAYLOR
                                      ------------------------------------------
                                      Howard E. Taylor, President
                                      and Chief Executive Officer

                                   FUTURELINK VSI CORP., a Maryland corporation

                                   By:  /s/ HOWARD E. TAYLOR
                                      ------------------------------------------
                                      Howard E. Taylor, President
                                      and Chief Executive Officer

                                       14
<PAGE>   15

                                   FUTURELINK MADISON CORP., a Delaware
                                   corporation

                                   By:  /s/ HOWARD E. TAYLOR
                                      ------------------------------------------
                                      Howard E. Taylor, President
                                      and Chief Executive Officer

                                   FUTURELINK ASYNC CORP., a Delaware
                                   corporation

                                   By:  /s/ HOWARD E. TAYLOR
                                      ------------------------------------------
                                      Howard E. Taylor, President
                                      and Chief Executive Officer

                                   3045207 NOVA SCOTIA COMPANY, a Nova Scotia
                                   corporation

                                   By:  /s/ HOWARD E. TAYLOR
                                      ------------------------------------------
                                      Howard E. Taylor, President
                                      and Chief Executive Officer

                                   1423280 ONTARIO INC., an Ontario corporation

                                   By:  /s/ HOWARD E. TAYLOR
                                      ------------------------------------------
                                      Howard E. Taylor, President
                                      and Chief Executive Officer

                                   FUTURELINK CANADA CORP., an Ontario
                                   corporation

                                   By:  /s/ HOWARD E. TAYLOR
                                      ------------------------------------------
                                      Howard E. Taylor, President
                                      and Chief Executive Officer

                                       15
<PAGE>   16

                                   SECURED PARTY

                                   PEQUOT PRIVATE EQUITY FUND II, L.P.,
                                   a Delaware limited partnership

                                   By:  Pequot Capital Management, Inc.,
                                        its Investment Manager

                                   By:  /s/ KEVIN E. O'BRIEN
                                      ------------------------------------------
                                      Kevin E. O'Brien, General Counsel

                                       16
<PAGE>   17

                     SCHEDULE 1(d) TO THE SECURITY AGREEMENT

                                 EXCLUDED LIENS

FUTURELINK CORP.

Transamerica Business Credit Corporation
-      Reg. #9935160743; collateral: equipment sold by TBCC
-      Reg. #0007461024; collateral: specific equipment

Compaq Financial Services Corporation
              -      Reg. #9934360283; collateral: equipment under lease
              -      Reg. #0197080; collateral: equipment under lease
              -      Reg. #1983803; collateral: equipment under lease

-      Reg. #20010202 1443 1530 0023; collateral: equipment under equipment
       schedule no. 100746000010

GATX Technology Services corporation
-      collateral: equipment under lease

EMC Corporation
-      Reg. #0001060733; collateral: specific equipment
-      Reg. #0001060743; collateral: specific equipment
-      Reg. #0007760039; collateral: specific equipment
              -      Reg. #0025061088; collateral: specific equipment
              -      Reg. #32260143; collateral: specific equipment
              -      Reg. #2007817; collateral: specific equipment

Fleet Business Credit Corporation
-      Reg. #0001060738; collateral: specific equipment

Hewlett Packard Company
              -      Reg. #0016060387; collateral: equipment under lease

FUTURELINK MADISON CORP.

NIA National Leasing Inc.
              -      Reg. #001924 (assigned to Leasevest Capital Corp.);
              collateral: specific equipment
              -      Reg. #001933 (assigned to Advanta Leasing Corp.);
              collateral: specific equipment
              -      Reg. #99PN07190 (assigned to Advanta Leasing Corp.);
              collateral: specific equipment
              -      Reg. #99PN01056 (assigned to Leasevest Capital Corp.);
              collateral: specific equipment

Unicyn Financial Corporation
              -      Reg. #173465 (assigned Green Tree Vendor Services
              Corporation); collateral:

<PAGE>   18

              specific equipment
              -      Reg. #99PN48889 (assigned Green Tree Vendor Services
              -      Corporation); collateral: specific equipment

FUTURELINK MICRO VISIONS CORP.

Hewlett Packard Company
              -      Reg. #9934260066; collateral: specific equipment

Transamerica Business Credit Corporation
              -      Reg. #9935160746; collateral: specific equipment
              -      Reg. #0007560143; collateral: specific equipment
              -      Reg. #0021760510; collateral: specific equipment

Data General Corporation
              -      Reg. #0006760426; collateral: specific equipment

FUTURELINK CANADA CORP.

Compaq Financial Services Canada Corporation
              -      Reg. #00071812051; collateral: computer equipment under
              lease
-      Reg. #20000203 1809 1531 0812; collateral: equipment under equipment
       schedule no. 100746000002
              -      Reg. #20000927 1831 1531 1981; collateral: equipment under
              equipment schedule no. 67440C
              -      Reg. #20000914 1810 1531 5881; collateral: equipment under
              equipment schedule no. 67440B
              -      Reg. #20000921 1808 1531 5096; collateral: equipment under
              lease no. 67280 dated 06/08/00
              -      Reg. #20000921 1808 1531 5097; collateral: equipment under
              lease no. 67243 dated 05/04/00
              -      Reg. #20000921 1808 1531 5098; collateral: equipment under
              lease no. 668890 dated 04/13/00
              -      Reg. #20000823 1756 1531 0470; collateral: equipment under
              lease no. 67243 dated 05/04/00
              -      Reg. #20000921 1808 1531 8632; collateral: equipment under
              lease no. 67280 dated 06/08/00
              -      Reg. #20000328 1802 1531 3186; collateral: equipment under
              lease no. 666889
              -      Reg. #19990820 1204 7029 3124; collateral: all goods
              provided by Compaq
              -      Reg. #20010226 1432 1530 1721; collateral: equipment under
              lease no. 67440I dated 02/05/01
              -      Reg. # 20010108 1449 1530 5408; collateral: equipment under
              lease no. 67440G dated 12/21/00
              -      Reg. #20010108 1449 1530 5411; collateral: equipment under
              lease no. 67440H dated 12/21/00
              -      Reg. #20001201 1137 1529 5896; collateral: equipment under
              lease no. 67440F dated 11/27/00
              -      Reg. #20001114 1117 1529 8113; collateral: equipment under
              lease no. 67440D dated 11/02/00
              -      Reg. #00092207711; collateral: equipment under lease no.
              100746 dated 11/15/99

<PAGE>   19

              -      Reg. #01020209530; collateral: equipment under lease
              no.100746 dated 11/1/5/99
              -      Reg. #00071812051; collateral: equipment under lease
              no.100746 dated 11/15/99

Ingram Micro Inc.
              -      Reg. #97101729933 (as amended); collateral: all present and
              after acquired personal property
              -      Reg. #20000913 1536 1826 0812; collateral: inventory,
              equipment, accounts
              -      Reg. #19931018 0901 0004 0957; collateral: general security
              agreement
              -      Reg. #19961015 1711 1826 0223; collateral: renewal
              -      Reg. #19990928 1441 1826 0656; collateral: renewal
              -      Reg. #00122815939; collateral: all present and after
              acquired personal property

Newcourt Financial Ltd.
              -      Reg. #98061517201; collateral: photocopier
              -      Reg. #99011902154; collateral: telephone system equipment
              -      Reg. #19990504 1811 1531 8522; collateral: inventory,
              equipment, accounts, other

Merisel Canada Inc.
              -      Reg. #95050916808 (as amended); collateral: all present and
              after acquired personal property
              -      Reg. #00050405422; collateral: computer hardware
              -      Reg. #19990315 0844 1192 0202; collateral: general security
              agreement
              -      Reg. #19990205 0849 1192 9831; collateral: computer
              equipment
              -      Reg. #19990315 0846 1192 0203; collateral: inventory,
              accounts, other

Bayshore Leasing Corporation
              -      Reg. #19980625 1703 1672 4888; collateral: equipment
              -      Reg. #19980304 1617 1672 4549; collateral: equipment

Tech Data Canada Inc.
              -      Reg. #20000720 1105 9075 0327; collateral: general security
              -      agreement
              -      Reg. #19971031 1059 0043 6715; collateral: inventory,
              accounts, other

National leasing Group Inc.
              -      Reg. #99011511476; collateral: telephone equipment system

Accel Capital Corp.
              -      Reg. #99033026792; collateral: office furniture

Hewlett Packard (Canada) Ltd.
              -      Reg. #99102217579; collateral: computer equipment described
              in leases

Transamerica Business Credit Corporation
              -      Reg. #99112400579; collateral: computer equipment
              -      Reg. #20001221 1746 8028 0522; collateral: equipment and
              other

Commcorp. Financial Services
              -      Reg. #97062504440; collateral: computer equipment

<PAGE>   20

Ikon Office Solutions, Inc.
              -      Reg. #9905270453; collateral: photocopier
              -      Reg. #99052704444; collateral: fax machine

<PAGE>   21

                     SCHEDULE 4(b) TO THE SECURITY AGREEMENT

                                 PERMITTED LIENS

FUTURELINK CORP.

1.     Transamerica Business Credit Corporation
       -      Reg. #9935160743; collateral: equipment sold by TBCC
       -      Reg. #0007461024; collateral: specific equipment

2.     Compaq Financial Services Corporation
       -      Reg. #9934360283; collateral: equipment under lease
       -      Reg. #0197080; collateral: equipment under lease
       -      Reg. #1983803; collateral: equipment under lease
       -      Reg. #20010202 1443 1530 0023; collateral: equipment under
       equipment schedule no. 100746000010

3.     GATX Technology Services corporation - collateral: equipment under lease

4.     Unisys Corporation

       -      Reg. #0007460404; collateral: computer and other equipment

5.     EMC Corporation
       -      Reg. #0001060733; collateral: specific equipment
       -      Reg. #0001060743; collateral: specific equipment
       -      Reg. #0007760039; collateral: specific equipment
       -      Reg. #0025061088; collateral: specific equipment
       -      Reg. #32260143; collateral: specific equipment
       -      Reg. #2007817; collateral: specific equipment

6.     Fleet Business Credit Corporation
       -      Reg. #0001060738; collateral: specific equipment

7.     Hewlett Packard Company
       -      Reg. #0016060387; collateral: equipment under lease

8.     Foothill Capital Corporation
       -      Reg. #1141646; collateral: all assets
       -      Reg. #1141646; collateral: unspecified
       -      Reg. #1141859; collateral: unspecified
       -      Reg. #0015441; collateral: unspecified
       -      Reg. #0029360241; collateral: all assets
       -      Reg. #0069566; collateral: all assets
       -      Reg. #04400008334; collateral: unspecified
       -      Reg. #2352954; collateral: unspecified
       -      Reg. 181063737; collateral: unspecified
       -      Reg. #18103C; collateral: all assets
       -      Reg. #2003324; collateral: all assets
       -      Reg. #00199631; collateral: all assets
       -      Reg. #0010167815; collateral: all assets
       -      Reg. #103060179; collateral: unspecified
       -      Reg. #2028617; collateral: unspecified
       -      Reg. #236314; collateral: unspecified

<PAGE>   22

       -      Reg. #102306; collateral: unspecified
       -      Reg. #96683; collateral: unspecified
       -      Reg. #20001208 1638 3033 0751; collateral: inventory, equipment,
              accounts, other

9.     Canon Financial Services, Inc.
       -      Reg. #0028860103; collateral: equipment under lease

10.    Leasing Technologies International Inc.
       -      Reg. #103060179; collateral: unspecified
       -      Reg. #20010114749; collateral: unspecified
       -      Reg. #014842; collateral: unspecified
       -      Reg. #047874; collateral: unspecified

11.    Macrolease International Corp.
       -      Reg. #103761012; collateral: unspecified

FUTURELINK PLEASANTON CORP.

1.     Foothill Capital Credit Corporation
       -      Reg. #029360255; collateral: all assets
       -      Reg. #0069550; collateral: all assets

FUTURELINK VSI CORP.

1.     Foothill Capital Credit Corporation
              -      Reg. #B2000-41064FS; collateral: all assets
              -      Reg. #0069516; collateral: all assets
              -      Reg. #04400008335; collateral: all assets
              -      Reg. #181063548; collateral: unspecified
              -      Reg. #0010167814; collateral: all assets
              -      Reg. #236316; collateral: unspecified
              -      Reg. #102305; collateral; unspecified

FUTURELINK MADISON CORP.

1.     NIA National Leasing Inc.
              -      Reg. #001924 (assigned to Leasevest Capital Corp.);
                     collateral: specific equipment
              -      Reg. #001933 (assigned to Advanta Leasing Corp.);
                     collateral: specific equipment
              -      Reg. #99PN07190 (assigned to Advanta Leasing Corp.);
                     collateral: specific equipment
              -      Reg. #99PN01056 (assigned to Leasevest Capital Corp.);
                     collateral: specific equipment

2.     Unicyn Financial Corporation
              -      Reg. #173465 (assigned Green Tree Vendor Services
                     Corporation); collateral: specific equipment
              -      Reg. #99PN48889 (assigned Green Tree Vendor Services
              -      Corporation); collateral: specific equipment

3.     Foothill Capital Credit Corporation
              -      Reg. #0002028619; collateral: all assets
              -      Reg. #0069581; collateral: all assets
              -      Reg. #2003325; collateral: all assets
              -      Reg. #00199635; collateral: all assets

<PAGE>   23

FUTURELINK ASYNC CORP.

1.     Foothill Capital Corp.
              -      Reg. #004284186; collateral: all assets
              -      Reg. #1605053; collateral: unspecified
              -      Reg. #AP285614; collateral: unspecified
              -      Reg. #33190334; collateral: all assets
              -      Reg. #0029360247; collateral: all assets
              -      Reg. #0069574; collateral: all assets
              -      Reg. #2352955; collateral: all assets
              -      Reg. #18102C; collateral: all assets

FUTURELINK MICRO VISIONS CORP.

1.     Hewlett Packard Company
              -      Reg. #9934260066; collateral: specific equipment

2.     Transamerica Business Credit Corporation
              -      Reg. #9935160746; collateral: specific equipment
              -      Reg. #0007560143; collateral: specific equipment
              -      Reg. #0021760510; collateral: specific equipment

3.     Data General Corporation
              -      Reg. #0006760426; collateral: specific equipment

4.     Foothill Capital Credit Corporation
              -      Reg. #11418549; collateral: all assets
              -      Reg. #0015870; collateral: unspecified
              -      Reg. #0000530293; collateral: all assets
              -      Reg. #20002970037; collateral: all assets
              -      Reg. #0013960669; collateral; all accounts and chattel
                     paper including paper and proceeds
              -      Reg. #0029960597; collateral: all assets
              -      Reg. #0002029935; collateral: all assets
              -      Reg. #0071363; collateral: all assets
              -      Reg. #4400008521; collateral: all assets
              -      Reg. #0000609295; collateral: all assets
              -      Reg. #0010237812; collateral: all assets
              -      Reg. #00131175; collateral: all assets
              -      Reg. #241507; collateral: all assets
              -      Reg. #104727; collateral: unspecified

FUTURELINK CANADA CORP.

1.     Compaq Financial Services Canada Corporation
              -      Reg. #00071812051; collateral: computer equipment under
                     lease
              -      Reg. #20000203 1809 1531 0812; collateral: equipment under
                     equipment schedule no. 100746000002
              -      Reg. #20000927 1831 1531 1981; collateral: equipment under
                     equipment schedule no. 67440C
              -      Reg. #20000914 1810 1531 5881; collateral: equipment under
                     equipment schedule no. 67440B
              -      Reg. #20000921 1808 1531 5096; collateral: equipment under
                     lease no. 67280 dated 06/08/00

<PAGE>   24

              -      Reg. #20000921 1808 1531 5097; collateral: equipment under
                     lease no. 67243 dated 05/04/00
              -      Reg. #20000921 1808 1531 5098; collateral: equipment under
                     lease no. 668890 dated 04/13/00
              -
              -      Reg. #20000823 1756 1531 0470; collateral: equipment under
                     lease no. 67243 dated 05/04/00
              -      Reg. #20000921 1808 1531 8632; collateral: equipment under
                     lease no. 67280 dated 06/08/00
              -      Reg. #20000328 1802 1531 3186; collateral: equipment under
                     lease no. 666889
              -      Reg. #19990820 1204 7029 3124; collateral: all goods
                     provided by Compaq
              -      Reg. #20010226 1432 1530 1721; collateral: equipment under
                     lease no. 67440I dated 02/05/01
              -      Reg. # 20010108 1449 1530 5408; collateral: equipment under
                     lease no. 67440G dated 12/21/00
              -      Reg. #20010108 1449 1530 5411; collateral: equipment under
                     lease no. 67440H dated 12/21/00
              -      Reg. #20001201 1137 1529 5896; collateral: equipment under
                     lease no. 67440F dated 11/27/00
              -      Reg. #20001114 1117 1529 8113; collateral: equipment under
                     lease no. 67440D dated 11/02/00
              -      Reg. #00092207711; collateral: equipment under lease no.
                     100746 dated 11/15/99
              -      Reg. #01020209530; collateral: equipment under lease
                     no.100746 dated 11/1/5/99
              -      Reg. #00071812051; collateral: equipment under lease
                     no.100746 dated 11/15/99

2.     Ingram Micro Inc.
              -      Reg. #97101729933 (as amended); collateral: all present and
                     after acquired personal property
              -      Reg. #20000913 1536 1826 0812; collateral: inventory,
                     equipment, accounts
              -      Reg. #19931018 0901 0004 0957; collateral: general security
                     agreement
              -      Reg. #19961015 1711 1826 0223; collateral: renewal
              -      Reg. #19990928 1441 1826 0656; collateral: renewal
              -      Reg. #00122815939; collateral: all present and after
                     acquired personal property

3.     Newcourt Financial Ltd.
              -      Reg. #98061517201; collateral: photocopier
              -      Reg. #99011902154; collateral: telephone system equipment
              -      Reg. #19990504 1811 1531 8522; collateral: inventory,
                     equipment, accounts, other

4.     Merisel Canada Inc.
              -      Reg. #95050916808 (as amended); collateral: all present and
                     after acquired personal property
              -      Reg. #00050405422; collateral: computer hardware
              -      Reg. #19990315 0844 1192 0202; collateral: general security
                     agreement
              -      Reg. #19990205 0849 1192 9831; collateral: computer
                     equipment
              -      Reg. #19990315 0846 1192 0203; collateral: inventory,
                     accounts, other

5.     Maramello Motors Ltd.
              -      Reg. #199990205 1801 1531 9831; collateral: vehicle

6.     The Bank of Nova Scotia;
              -      Reg. #199990205 1801 1531 9831; collateral: vehicle

7.     Bayshore Leasing Corporation
              -      Reg. #19980625 1703 1672 4888; collateral: equipment
              -      Reg. #19980304 1617 1672 4549; collateral: equipment

<PAGE>   25

8.     Tech Data Canada Inc.
              -      Reg. #20000720 1105 9075 0327; collateral: general security
              -      agreement
              -      Reg. #19971031 1059 0043 6715; collateral: inventory,
                     accounts, other

9.     National leasing Group Inc.
              -      Reg. #99011511476; collateral: telephone equipment system

10.    Accel Capital Corp.
              -      Reg. #99033026792; collateral: office furniture

11.    Hewlett Packard (Canada) Ltd.
              -      Reg. #99102217579; collateral: computer equipment described
                     in leases

12.    Transamerica Business Credit Corporation
              -      Reg. #99112400579; collateral: computer equipment
              -      Reg. #20001221 1746 8028 0522; collateral: equipment and
                     other

13.    Commcorp. Financial Services Inc.
              -      Reg. #97062504440; collateral: computer equipment

14.    Ikon Office Solutions, Inc.
              -      Reg. #9905270453; collateral: photocopier
              -      Reg. #99052704444; collateral: fax machine

15.    Foothill Capital Corporation
              -      Reg. #20001103 1705 3033 0693; collateral: equipment,
                     inventory, accounts
              -      Reg. #01-0009068-001; collateral: all present and after
                     acquired personal property
              -      Reg. #00110803343: collateral: all present and after
                     acquired personal property

3045207 NOVA SCOTIA COMPANY

1.     Foothill Capital Corporation
              -      Reg.#3668864; collateral: all present and after acquired
                     personal property

1423280 ONTARIO INC.

1.     Foothill Capital Corporation
              -      Reg. #20001122 1452 3033 0735; collateral: accounts, other
              -      Reg. #20001103 1705 3033 0694; collateral: inventory,
                     equipment, accounts, other

<PAGE>   26

                                   SCHEDULE I

                                       TO

                               SECURITY AGREEMENT

                                  Pledged Stock

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
                                                                               TOTAL SHARES                 JURISDICTION
                                     NO. OF                                     OF CAPITAL      PLEDGOR'S         OF
                                   SHARES HELD                 CERTIFICATE        STOCK        PERCENTAGE   INCORPORATION
PLEDGOR            ISSUER          BY PLEDGOR       CLASS         NO.(S)       OUTSTANDING     OWNERSHIP
-------------------------------------------------------------------------------------------------------------------------
<S>             <C>                <C>             <C>         <C>             <C>             <C>          <C>
FutureLink      FutureLink             500         Common           2              500            100%       Delaware
Corp.           Pleasanton
                Corp.
-------------------------------------------------------------------------------------------------------------------------

FutureLink      FutureLink             100         Common           1              100            100%       Delaware
Corp.           Madison Corp.
-------------------------------------------------------------------------------------------------------------------------

FutureLink      FutureLink             500         Common           2              500            100%       Delaware
Corp.           Micro Visions
                Corp.
-------------------------------------------------------------------------------------------------------------------------

FutureLink      FutureLink             500         Common           2              500            100%       Delaware
Corp.           ASYNC Corp.
-------------------------------------------------------------------------------------------------------------------------

FutureLink      FutureLink             500         Common           2              500            100%       Maryland
Corp.           VSI Corp.
-------------------------------------------------------------------------------------------------------------------------

FutureLink      3045207 Nova        7,500,100      Common          2,3          7,500,100         100%       Nova Scotia,
Corp.           Scotia Company                                                                               Canada
-------------------------------------------------------------------------------------------------------------------------

1423280         FutureLink             100         Common          C-1             100            100%       Ontario,
Ontario Inc.    Canada Corp.                                                                                 Canada
-------------------------------------------------------------------------------------------------------------------------

3045207         1423280             7,500,000      Class C       CCVP-16      12,161,156.387     61.85%      Ontario,
Nova Scotia     Ontario Inc.                       Voting                                                    Canada
Company
-------------------------------------------------------------------------------------------------------------------------

FutureLink      1423280           2,426,191.387    Common          C-2        12,161,156.387     20.00%      Ontario,
Corp.           Ontario Inc.                                                                                 Canada
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>   27

                        SCHEDULE II TO SECURITY AGREEMENT

                      LOCATIONS OF INVENTORY AND EQUIPMENT
                         AND PRINCIPAL PLACE OF BUSINESS

The (i) principal place of business for each secured party is and (ii) with
respect to each subsidiary, in addition to documents which may be maintained at
FutureLink Corp.'s principal place of business, documents related to and
evidence of Receivables is maintained at:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
           ENTITY                            STREET                  CITY          COUNTY           STATE         ZIP     COUNTRY
---------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>                           <C>           <C>                <C>            <C>       <C>
FutureLink Corp.                   2 South Pointe Dr.            Lake Forest   Orange             California     92630     USA

FutureLink Micro Visions Corp.     2 South Pointe Dr.            Lake Forest   Orange             California     92630     USA

FutureLink VSI Corp.               6980 Muirkirk Meadows Dr.     Beltsville    Prince George's    Maryland       20705     USA

FutureLink Async Corp.             2065 E West Maple Rd.         Walled Lake   Oakland            Michigan       48390     USA
                                   Ste C-304

FutureLink Madison Corp.           360 Lexington Ave.            New York      New York           New York       10017     USA
                                   7th Floor

FutureLink Pleasanton Corp.        5976 W Las Positas            Pleasanton    Alameda            California     94588     USA
                                   Blvd. Ste 122

FutureLink Canada Corp.            300, 250 6th Avenue SW        Calgary       N/A                Alberta        T2P 3H7   Canada

3045207 Nova Scotia Company        2 Gibbs Road                  Totonto       N/A                Ontario        M9B6L6    Canada

1423280 Ontario Corp.              2 Gibbs Road                  Totonto       N/A                Ontario        M9B6L6    Canada
</TABLE>

In addition to the foregoing locations:

FutureLink Corp maintains Equipment and Inventory at the following locations:

379 Thornall Street, 6th Floor
Edison, Middlesex County, NJ 08837

FutureLink Micro Visions Corp. maintains Equipment and Inventory at the
following locations:

1640 S. Sepulveda Blvd.
Los Angeles, Los Angeles County, California 90025

6301 N.W. 5th Way, Suite 2700
Fort Lauderdale, Browcord County, Fl 33309

<PAGE>   28

365 Northridge Road
Atlanta, De Klab County, GA 30350

<PAGE>   29

FutureLink Canada Corp. maintains Equipment and Inventory at the following
Locations:

60 Meg Drive
London, Ontario, Canada N6E3T6

8585 Decarie, Bureau 301
Ville Mont-Royal, Quebec, Canada H4P 2J4

2750, rue Einstein Est, Bureau 316
Quebec, Quebec, Canada G1P 4R1

2 Gibbs Rd.
Toronto, Ontario, Canada M9B 6L6

FutureLink Madison Corp. maintains Equipment and Inventory at the following
location:

80 Wolf Road, Ste. 308
Albany, Albany County, NY  12205

FutureLink Pleasanton Corp. maintains Equipment and Inventory at the following
location:

450 Main St.
Pleasanton, Alameda County, California  94566

FutureLink VSI Corp. maintains Equipment and Inventory at the following
location:

4050 Innslake Drive, Ste. 160
Glen Allen, Menrico County, VA 23060

6946 Forest Hill, 1st Floor
Richmond, Richmond County, VA 23225

<PAGE>   30

                       SCHEDULE III TO SECURITY AGREEMENT

                              INTELLECTUAL PROPERTY

TRADEMARKS
Applications:
For U.S. applications the applicant FutureLink Distribution Corp. is now
FutureLink Corp.
For Canadian applications and registrations the applicant FutrueLink
Distribution
Corporation (Corp.) is now FutureLink Canada Corp.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
                                                                      APPLICATION   APPLICATION
   APPLICANT        TYPE     JURISDICTION             MARK                DATE           NO.
-----------------------------------------------------------------------------------------------
<S>                 <C>      <C>                 <C>                  <C>           <C>
FutureLink          Word        U.S.A.           APPLICATION PORTAL      3/26/99      75/669/151
Distribution
Corp.
-----------------------------------------------------------------------------------------------
FutureLink          Word        U.S.A.           FLINK                   2/18/98      75/436/229
Distribution
Corp.
-----------------------------------------------------------------------------------------------
FutureLink          Word        U.S.A.           FUTURELINK              2/18/98      75/436/228
DistributionCorp.
-----------------------------------------------------------------------------------------------
FutureLink          Mark        U.S.A.           FUTURELINK             4/1/9/00      76/029/805
Corp.
-----------------------------------------------------------------------------------------------
FutureLink          Word        U.S.A.           FUTURESERVE             2/18/98      75/436/227
Distribution
Corp.
-----------------------------------------------------------------------------------------------
FutureLink          Word        U.S.A.           THE COMPUTER            3/26/99      75/668/792
Distribution                                     UTILITY CO
Corp.
-----------------------------------------------------------------------------------------------
FutureLink          Word        U.S.A.           THE COMPUTER            3/26/99      75/669/152
Distribution                                     UTILITY SERVICE
Corp.
-----------------------------------------------------------------------------------------------
FutureLink          Word        U.S.A.           W.A.T.C.H.              9/10/98      75/551/171
Distribution
Corp.
-----------------------------------------------------------------------------------------------
FutureLink          Word        U.S.A.           WIDE AREA THIN          9/10/98      75/551/172
Corp.                                            CLIENT HOOKUP
-----------------------------------------------------------------------------------------------
FutureLink          Word        U.S.A.           WORLD'S FIRST           9/10/98      75/551/170
Distribution                                     COMPUTER UTILITY
Corp.                                            COMPANY
-----------------------------------------------------------------------------------------------
FutureLink          Word        U.S.A.           THE WORLD'S ASP         8/25/99      75/785/866
Distribution
Corp.
-----------------------------------------------------------------------------------------------
FutureLink          Word        U.S.A.           KICKING ASP             8/25/99      75/785/867
Distribution
Corp.
-----------------------------------------------------------------------------------------------
</TABLE>

<PAGE>   31

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
                                                                      APPLICATION   APPLICATION
   APPLICANT        TYPE     JURISDICTION             MARK                DATE           NO.
-----------------------------------------------------------------------------------------------
<S>                 <C>      <C>                 <C>                  <C>           <C>
FutureLink          Word        Canada           KICKING ASP             9/13/99       1028504
Distribution
Corporation
-----------------------------------------------------------------------------------------------
FutureLink          Word        Canada           THE WORLD'S ASP         9/13/99       1028508
Distribution
Corporation
-----------------------------------------------------------------------------------------------
FutrueLink          Word        Canada           WIDE AREA THIN          7/21/98        884924
Distribution                                     CLIENT HOOKUP
Corp.
-----------------------------------------------------------------------------------------------
FutureLink          Word        Canada           THE ASP                 9/13/99       1028509
Distribution
Corporation
-----------------------------------------------------------------------------------------------
FutureLink          Word        Canada           THE WORLD'S FIRST       3/1/99        1006728
Distribution                                     COMPUTER UTILITY
Corporation                                      COMPANY
-----------------------------------------------------------------------------------------------
</TABLE>

Registrations:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
                                                                  REGISTRATION      REGISTRATION
  REGISTRANT        TYPE    JURISDICTION          MARK                DATE               NO.
-----------------------------------------------------------------------------------------------
<S>                 <C>     <C>               <C>                 <C>               <C>
FutureLink          Word      Canada          FUTURESERVE            1/27/00        TMA522,392
Distribution
Corporation
-----------------------------------------------------------------------------------------------
FutureLink          Word      Canada          FLINK                  9/7/00         TMA532,325
Distribution
Corporation
-----------------------------------------------------------------------------------------------
FutureLink          Word      Canada          FUTURELINK            11/10/00        TMA537044
Distribution
Corporation
-----------------------------------------------------------------------------------------------
FutureLink          Mark      Canada          FUTURELINK DESIGN     11/10/00        TMA537045
Distribution
Corporation
-----------------------------------------------------------------------------------------------
FutureLink          Mark      Canada          FUTURELINK DESIGN     11/20/00        TMA537296
Distribution
Corporation
-----------------------------------------------------------------------------------------------
FutureLink          Word      Canada          W.A.T.C.H.            11/23/00        TMA537673
Distribution
Corp.
-----------------------------------------------------------------------------------------------
</TABLE>

<PAGE>   32

Patents
Registered:  None
Applications:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
                                                            APPLICATION    APPLICATION
    APPLICANT          RELATED TO         JURISDICTION         DATE            NO.
----------------------------------------------------------------------------------------
<S>                <C>                    <C>               <C>            <C>
Charon Systems     UniPrint Software         Canada
Inc. (Now
FutureLink
Canada Corp.)
----------------------------------------------------------------------------------------
</TABLE>

Copy Rights
Registered:  None
Applications:  None

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00024-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00024-of-00352.parquet"}]]