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                                                                     EXHIBIT 4.2

                   CERTIFICATE GUARANTY INSURANCE ENDORSEMENT

Attached to and forming                   Effective Date of Endorsement:
part of Policy No. AB0661BE               April 23, 2003
issued to:

BNY Midwest Trust Company,
as Trustee for the Holders of
IKON Receivables Funding, LLC Lease-Backed Notes

          For purposes of this Policy, the following terms shall have the
following meanings:

          "Business Day" shall mean any day that is not a Saturday, Sunday or
other day on which commercial banking institutions in the cities in which the
Corporate Trust Office of the Trustee and the principal offices of the Insurer
and the Servicer are located are authorized or obligated by law or executive
order to remain closed.

          "Certificate Insurance Policy" or "Policy" shall mean this Certificate
Guaranty Insurance Policy together with each and every endorsement hereto.

          "Deficiency Amount" shall mean (a) for any Payment Date, any shortfall
in the sum of Available Funds (excluding amounts in the Reserve Account) plus
amounts on deposit in the Reserve Account to pay the related Interest Payments
due on such Payment Date, (b) on the Payment Date in May 2004, any shortfall in
the sum of Available Funds (excluding amounts in the Reserve Account) plus
amounts on deposit in the Reserve Account to pay the Outstanding Principal
Amount of Class A-1 Notes, (c) on the Payment Date in November 2005, any
shortfall in the sum of Available Funds (excluding amounts in the Reserve
Account) plus amounts on deposit in the Reserve Account to pay the Outstanding
Principal Amount of the Class A-2 Notes, (d) on the Payment Date in December
2007, any shortfall in the sum of Available Funds (excluding amounts in the
Reserve Account) plus amounts on deposit in the Reserve Account to pay the
Outstanding Principal Amount of the Class A-3 Notes and (e) on the Payment Date
in July 2011, any shortfall in the sum of Available Funds (excluding amounts in
the Reserve Account) plus amounts on deposit in the Reserve Account to pay the
Outstanding Principal Amount of the Class A-4 Notes (in each case after taking
into account all payments to be made on such Payment Date, including payments
resulting from the application of funds in accordance with Section 3.07 of the
Indenture).

          "Due for Payment" shall mean, with respect to any Insured Amount, such
amount is due and payable pursuant to the terms of the Indenture.

          "First Payment Date" shall mean May 15, 2003.

          "Final Payment Date" shall mean, with respect to the Class A-1 Notes,
the Payment Date in May 2004, with respect to the Class A-2 Notes, the Payment
Date in November 2005, with respect to the Class A-3 Notes, the Payment Date in
December 2007, and with respect to the Class A-4 Notes, the Payment Date in July
2007.

          "Holder" shall mean any person who is the registered owner or
beneficial owner of any Note; provided, however, that for purposes of this
Policy, "Holder" does not and may not include the Issuer, the Seller, the
Servicer or their respective affiliates.

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          "Indenture" shall mean the Indenture dated as of April 1, 2003 among
IKON Receivables Funding, LLC, as Issuer, IOS Capital, Inc., as Servicer and BNY
Midwest Trust Company, as Trustee, as amended, supplemented or modified with the
consent of the Insurer from time to time.

          "Insolvency Proceeding" means the commencement, after the date hereof,
of any bankruptcy, insolvency, readjustment or debt, reorganization, marshaling
of assets and liabilities or similar proceedings by or against the Issuer as
debtor, or the commencement, after the date hereof, of any proceedings by or
against the Issuer as debtor for the winding up or the liquidation of its
affairs, or the consent after the date hereof to the appointment of a trustee,
conservator, receiver or liquidator in any bankruptcy, insolvency, readjustment
of debt, reorganization, marshaling of assets and liabilities or similar
proceedings relating to the Issuer as debtor.

          "Insurance Agreement" shall mean the Insurance and Indemnity
Agreement, dated as of April 23, 2003, among IKON Receivables Funding, LLC, as
Issuer, IKON Receivables-2, LLC, as Seller, IOS Capital, LLC, as Originator and
Servicer, BNY Midwest Trust Company, as Trustee and Ambac Assurance Corporation,
as Insurer, as such agreement may be amended, modified or supplemented from time
to time.

          "Insured Amounts" shall mean, with respect to any Payment Date, the
Deficiency Amount for such Payment Date.

          "Insured Payments" shall mean, (i) with respect to any Payment Date,
the aggregate amount actually paid by the Insurer to the Trustee in respect of
Insured Amounts for such Payment Date and (ii) Preference Amounts for any given
Business Day.

          "Insurer" shall mean Ambac Assurance Corporation, a Wisconsin
domiciled stock insurance corporation, or any successor thereto, as issuer of
the Certificate Insurance Policy.

          "Issuer" means IKON Receivables Funding LLC, a Delaware limited
liability company.

         "Late Payment Rate" shall mean for any Payment Date, the greater of (i)
the rate of interest, as it is publicly announced by Citibank, N.A. at its
principal office in New York, New York as its prime rate (any change in such
prime rate of interest to be effective on the date such change is announced by
Citibank, N.A.) plus 2% and (ii) the then applicable highest rate of interest on
the Notes. The Late Payment Rate shall be computed on the basis of a year of 360
days and the actual number of days elapsed. In no event shall the Late Payment
Rate exceed the maximum rate permissible under any applicable law limiting
interest rates.

          "Nonpayment" shall mean, with respect to any Payment Date, an Insured
Amount is Due for Payment but has not been paid and will not (but for a draw
under this Policy) be paid on such date pursuant to the Indenture.

          "Notes" shall mean the Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes and the Class A-4 Notes authorized by, and authenticated and delivered
under, the Indenture.

          "Notice" shall mean the telephonic or telegraphic notice, promptly
confirmed in writing by telecopy substantially in the form of Exhibit A or B, as
applicable, to the Policy, the original of which is subsequently delivered by
registered or certified mail, from the Trustee specifying the amount of any
Insured Payment which shall be due and owing.

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          "Payment Date" shall mean the 15th day of each month (or if such day
is not a Business Day, the first Business Day immediately following) beginning
with the First Payment Date and ending, with respect to any Class of Notes, on
the Final Payment Date for such Class.

          "Preference Amount" means any payment of principal or interest on a
Note which has become Due for Payment and which was made to a Holder by or on
behalf of the Trustee which has been deemed a preferential transfer and
recoverable, or theretofore recovered, from its Holder pursuant to the United
States Bankruptcy Code in accordance with a final, nonappealable order of a
court of competent jurisdiction, provided that any Preference Amount that
constitutes interest on the principal amount of the Notes shall be limited to
the amount of interest on the unpaid principal amount of the Notes (calculated
at the rate determined in accordance with the definition of Interest Payment)
accrued as of the last day of the applicable interest accrual period with
respect to the Notes and shall not in any event include any interest on the
Notes accrued after such date or any interest on such interest amount.

          "Premium Percentage" shall have the meaning set forth in the Insurance
Agreement.

         "Reimbursement Amount" shall mean, as of any date, the sum of (x) (i)
all Insured Payments (including optional payments) paid by the Insurer, but for
which the Insurer has not been reimbursed prior to such date pursuant to Section
3.03(b) or 7.07 of the Indenture, plus (ii) interest accrued thereon, calculated
at the Late Payment Rate from the date the Trustee received the related Insured
Payments, or the date such Insured Payments were made, in the case of Insured
Payments consisting of Preference Amounts not made to the Trustee, and (y)
without duplication (i) any amounts then due and owing to the Insurer under the
Insurance Agreement or any other Company Document plus (ii) interest on such
amounts at the Late Payment Rate from the date such amounts were due.

          "Trustee" shall mean BNY Midwest Trust Company or its
successor-in-interest, in its capacity as trustee under the Indenture, or if any
successor trustee or any co-trustee shall be appointed as provided therein, the
"Trustee" shall also mean such successor trustee or such co-trustee, as the case
may be, subject to the provisions thereof.

          "Seller" means IKON Receivables-2 LLC, a Delaware limited liability
company.

          "Servicer" means IOS Capital LLC, a Delaware limited liability
company, and any successor Servicer appointed pursuant to the terms of the
Indenture and the Assignment and Servicing Agreement and, to the extent that it
is performing the functions of the Servicer, the Trustee, subject to the terms
of Section 5.01 of the Indenture.

          Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Indenture.

          Notwithstanding any other provision of this Policy, but subject to the
succeeding paragraph with respect to Preference Amounts, the Insurer will pay
any Insured Amount payable hereunder no later than 12:00 noon, New York City
time, on the later of the Payment Date on which the related Insured Amount is
due or the third Business Day following actual receipt in New York, New York on
a Business Day by the Insurer of a Notice appropriately completed and executed
by the Trustee at the address and in the manner provided in Section 6.02 of the
Insurance Agreement; provided that, if such Notice is received after 12:00 noon,
New York City time, on such Business Day, it will be deemed to be received on
the following Business Day. If any such Notice is not in proper form or is
otherwise insufficient for the purpose of making a claim under the Policy, it
shall be deemed not to have been received for purposes of this paragraph, and
the Insurer shall promptly so advise the Trustee in writing and the Trustee may
submit an amended Notice. If such an amended or corrected Notice is in proper
form and is otherwise sufficient

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for the purpose of making a claim under the Policy, it shall be deemed to have
been timely received on the Business Day of such resubmission subject to the
proviso above in this paragraph.

          The Insurer shall pay any Preference Amount when due to be paid
pursuant to the Order referred to below, but in any event no earlier than the
third Business Day following receipt by the Insurer of (i) a certified copy of a
final, non-appealable order of a court or other body exercising jurisdiction in
an Insolvency Proceeding to the effect that the Holder is required to return
such Preference Amount paid during the term of this Policy because the payments
of such amounts were avoided as a preferential transfer or otherwise rescinded
or required to be restored by the Holder (the "Order"), (ii) an opinion of
counsel satisfactory to Ambac and a certificate by or on behalf of the Holder
that the Order has been entered and is not subject to any stay, (iii) an
assignment, in form and substance satisfactory to the Insurer, duly executed and
delivered by the Holder, irrevocably assigning to the Insurer all rights and
claims of the Holder relating to or arising under the Indenture or otherwise
with respect to such Preference Amount and (iv) appropriate instruments to
effect the appointment of the Insurer as agent for such Holder in any legal
proceeding related to such preference payment, such instruments being in a form
satisfactory to the Insurer; and (v) a Notice in the form of Exhibit B
appropriately completed and executed by the Trustee; provided that (A) if such
documents are received by the Insurer after 12:00 noon New York City time on
such Business Day, they will be deemed to be received on the following Business
Day and (B) the Insurer shall not be obligated to pay any Preference Amount in
respect of principal for any Class of Notes prior to the Payment Date ending on
the Final Payment Date for such Class. Such payment shall be disbursed to the
receiver, conservator, debtor-in-possession or trustee in bankruptcy named in
the Order, and not to the Trustee or the Holder directly, unless the Trustee or
the Holder has made a payment of the Preference Amount to the court or such
receiver, conservator, debtor-in-possession or trustee in bankruptcy named in
the Order, in which case the Insurer will pay the Trustee, subject to the
delivery of (a) the items referred to in clauses (i), (ii), (iii), (iv) and (v)
above to the Insurer and (b) evidence satisfactory to the Insurer that payment
has been made to such court or receiver, conservator, debtor-in-possession or
trustee in bankruptcy named in the Order.

          The term of the Policy shall commence on the date of issuance of the
Policy and, subject to the preceding paragraph in respect of Preference Amounts,
shall continue until the earliest of (x) payment in full of all Insured Amounts,
whether by the Insurer or any other Person, (y) with respect to any Class of
Notes, the close of business on the fifth Business Day following the Final
Payment Date for such Class and (z) the close of business on the fifth Business
Day following the last Final Payment Date for the Class A Notes. Solely the
Trustee on behalf of the Holders shall have the right to make a claim for an
Insured Payment under the Policy.

          This Policy does not cover shortfalls, if any, attributable to the
liability of the Issuer or the Trustee for withholding taxes, if any (including
interest and penalties in respect of that liability), any premium, fees,
prepayment penalty or other accelerated payment, which at any time may become
due on or with respect to any Note, including as a result of any Acceleration
Event, nor against any risk other than Nonpayment, including failure of the
Trustee to make any payment due to the Holders or of any Holder to apply any
funds to reduction of amounts owed under the Notes. This Policy does not cover,
and Insured Payments do not include, any shortfalls due to the application of
the Solders' and Sailors' Relief Act.

          The Insurer hereby agrees that if it shall be subrogated to the rights
of Holders by virtue of any previous payment under this Policy, no recovery of
such payment will occur unless the full amount of the Holders' allocable
distributions with respect to such payment can be made. In so doing, the Insurer
does not waive its rights to seek full payment of all Reimbursement Amounts owed
to it under the Indenture and the Insurance Agreement.

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          The terms and provisions of the Indenture constitute the instrument of
assignment referred to in the second paragraph of the face of this Policy.

          A premium will be payable on this Policy on each Payment Date as
provided in Section 3.03 of the Indenture, beginning with the First Payment
Date, in an amount equal to the Premium.

          THE INSURANCE PROVIDED BY THE POLICY IS NOT COVERED BY THE
PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW
YORK INSURANCE LAW.

          The Policy to which this Endorsement is attached and of which it forms
a part is hereby amended to provide that there shall be no acceleration payment
due under the Policy regardless of any acceleration of any of the Notes unless
such acceleration is at the sole option of the Insurer.

          Nothing herein contained shall be held to vary, alter, waive or extend
any of the terms, conditions, provisions, agreements or limitations of the above
mentioned Policy other than as above stated. To the extent the provisions of
this Endorsement conflict with the provisions in the above-mentioned Policy, the
provisions of this Endorsement shall govern.

          No waiver of any rights or powers of the Insurer, the Holders or the
Trustee or consent by any of them shall be valid unless signed by such person or
an authorized officer or agent thereof.

          This Policy is issued under the pursuant to, and shall be construed
and enforced under, the laws of the State of New York, without giving effect to
the conflict of laws principles thereof, as contemplated in Section 5-1401 of
the New York General Obligations Law.

       [Remainder of Page Intentionally Left Blank; Signatures to follow.]

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          IN WITNESS WHEREOF, the Ambac Assurance Corporation has caused this
Endorsement to the Policy to be signed by its duly authorized officers.

Attest:

-----------------------------------        ------------------------------------
Assistant Secretary                        First Vice President

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                                    EXHIBIT A

                  TO THE CERTIFICATE GUARANTY INSURANCE POLICY

                               Policy No. AB0661BE

                         NOTICE OF NONPAYMENT AND DEMAND

                         FOR PAYMENT OF INSURED AMOUNTS

                                           Date: [ ]

AMBAC ASSURANCE CORPORATION
One State Street Plaza
New York, New York 10004
Attention:  General Counsel

          Reference is made to Certificate Guaranty Insurance Policy No.
AB0661BE (the "Policy") issued by Ambac Assurance Corporation ("Ambac"). Terms
capitalized herein and not otherwise defined shall have the meanings specified
in the Policy and the Indenture, as the case may be, unless the context
otherwise requires.

          The Trustee hereby certifies as follows:

          1.   The Trustee is the Trustee under the Indenture for the Holders.

          2.   The relevant Payment Date is [date].

          3.   Payment on the Notes in respect of the Payment Date is due to be
               received on _________ under the Indenture, in an amount equal to
               $________.

          4.   There is a Deficiency Amount of $_______ in respect of the Notes,
               which amount is an Insured Amount which is Due for Payment
               pursuant to the terms of the Indenture.

          5.   The Trustee has not heretofore made a demand for the Insured
               Amount in respect of the Payment Date.

          6.   The Trustee hereby requests the payment of the Insured Amount
               that is Due for Payment be made by Ambac under the Policy and
               directs that payment under the Policy be made to the following
               account by bank wire transfer of federal

               or other immediately available funds in accordance with the terms
               of the Policy to:_____________ Trustee's account number.

          7.   The Trustee hereby agrees that, following receipt of the Insured
               Payment from Ambac, it shall (a) hold such amounts in trust and
               apply the same directly to the distribution of payment on the
               Notes when due; (b) not apply such funds for any other purpose;
               (c) deposit such funds to the Collection Account; and (d)
               maintain an accurate record of

                                       A-1

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               such payments with respect to each Note and the corresponding
               claim on the Policy and proceeds thereof.

                                        By:
                                           --------------------------------
                                                        Trustee

                                        Title:
                                              -----------------------------
                                                       (Officer)

                                       A-2

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                                    EXHIBIT B

                  TO THE CERTIFICATE GUARANTY INSURANCE POLICY

                               Policy No. AB0661BE

                         NOTICE OF NONPAYMENT AND DEMAND

                        FOR PAYMENT OF PREFERENCE AMOUNT

                                           Date: [ ]

AMBAC ASSURANCE CORPORATION
One State Street Plaza
New York, New York 10004
Attention:  General Counsel

          Reference is made to Certificate Guaranty Insurance Policy No.
AB0661BE (the "Policy") issued by Ambac Assurance Corporation ("Ambac"). Terms
capitalized herein and not otherwise defined shall have the meanings specified
in the Policy and the Indenture, as the case may be, unless the context
otherwise requires.

          The  Trustee hereby certifies as follows:

          1.   The Trustee is the Trustee under the Indenture for the Holders.

          2.   A payment previously made on the Notes has become a Preference
               Amount, as indicated by the attached Order.

          3.   The Holder of the applicable Notes has certified that the Order
               has been entered and is not subject to stay.

          4.   The amount of the Preference Amount is $______, and consists of
               interest on the Notes in the amount of $______ paid on _______,
               _______, [and principal paid on the Notes in the amount of
               $______ paid on ______, _______.]

          5.   Neither the Trustee nor the Holder has heretofore made a demand
               for such Preference Amount.

          6.   The Trustee hereby requests the payment of the Insured Payment be
               made by Ambac under the Policy and directs that payment under the
               Policy be made to the following account by bank wire transfer of
               federal or other immediately available funds in accordance with
               the terms of the Policy to:_______./1/

----------
/1/       The account of the relevant receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Order, unless the
Holder or Trustee has already paid such Preference Amount to such party, in
which case, the account of the Trustee.

                                       B-1

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          7.   The Trustee hereby agrees that if such Insured Payment is made to
               it, following receipt of such Insured Payment from Ambac, it
               shall (a) hold such amounts in trust and apply the same directly
               to the Holder for payment of the Preference Amount; (b) not apply
               such funds for any other purpose; and (c) maintain an accurate
               record of such payments with respect to each Note and the
               corresponding claim on the Policy and proceeds thereof.

                                      By:
                                         ------------------------------------
                                                        Trustee

                                      Title:
                                            ---------------------------------
                                                       (Officer)

                                       B-2