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                                                                     Exhibit 4.2

Ambac                                   Assurance Corporation
                                        Ambac One State Street Plaza, 15th Floor
                                        New York, New York 10004
                                        Telephone: (212) 668-0340

Certificate Guaranty Insurance Policy

Insured Obligations:                    Policy Number:  AB0473BE
$595,200,000 Ikon Receivables, LLC
Lease-Backed Notes, Series 2001-1
consisting of
$168,000,000 Class A-1 Notes,
$41,000,000 Class A-2 Notes,            Premium:
$260,000,000 Class A-3 Notes and
$126,200,000 Class A-4 Notes            Payable as set forth in the endorsement
                                        attached hereto and made a part hereof.

Ambac Assurance Corporation (Ambac), a Wisconsin stock insurance corporation, in
consideration of the payment of the premium and subject to the terms of this
Policy, hereby agrees unconditionally and irrevocably to pay to the Trustee for
the benefit of the Holders of the Insured Obligations, that portion of the
Insured Amounts which shall become Due for Payment but shall be unpaid by reason
of Nonpayment.

Ambac will make such payments to the Trustee from its own funds on the later of
(a) one (1) Business Day following notification to Ambac of Nonpayment or (b)
the Business Day on which the Insured Amounts are Due for Payment. Such payments
of principal or interest shall be made only upon presentation of an instrument
of assignment in form and substance satisfactory to Ambac, transferring to Ambac
all rights under such Insured Obligations to receive the principal of and
interest on the Insured Obligation. Ambac shall be subrogated to all the
Holders' rights to payment on the Insured Obligations to the extent of the
insurance disbursements so made. Once payments of the insured Amounts have been
made to the Trustee, Ambac shall have no further obligation hereunder in respect
of such Insured Amounts.

In the event the Trustee for the Insured Obligations has notice that any payment
of principal or interest on an Insured Obligation which has become Due for
Payment and which is made to a Holder by or on behalf of the Trustee has been
deemed a preferential transfer and 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, such Holder will be
entitled to payment from Ambac to the extent of such recovery if sufficient
funds are not otherwise available.

This Policy is noncancelable by Ambac for any reason, including failure to
receive payment of any premium due hereunder. The premium on this Policy is not
refundable for any reason. This Policy does not insure against loss of any
prepayment or other acceleration payment which at any time may become due in
respect of any Insured Obligation, other than at the sole option of Ambac, nor
against any risk other than Nonpayment, including failure of the Trustee to make
any payment due Holders of Insured Amounts.

To the fullest extent permitted by applicable law, Ambac hereby waives and
agrees not to assert any and all rights and defenses, to the extent such rights
and defenses may be available to Ambac, to avoid payment of its obligations
under this Policy in accordance with the express provisions hereof.

Any capitalized terms not defined herein shall have the meaning given such terms
in the endorsement attached hereto or in the Agreement.

In witness whereof, Ambac has caused this Policy to be affixed with its
corporate seal and to be signed by its duly authorized officers in facsimile to
become effective as their original signatures and binding upon Ambac by virtue
of the countersignature of its duly authorized representative.

                                     [SEAL]

/s/ Robert J. Genader                   /s/ Anne G. Gill
President                               Secretary

Effective Date: June 28, 2001           /s/ Barry Schofield
                                        Authorized Representative

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                                                                  Execution Copy

                   CERTIFICATE GUARANTY INSURANCE ENDORSEMENT

Attached to and forming                 Effective Date of Endorsement:
part of Policy #AB0473BE                June 28, 2001
issued to:

SunTrust Bank,
as Indenture Trustee for the Holders of
IKON Receivables, LLC Lease-Backed Notes

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

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

     "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 July 16, 2001.

     "Holder" shall mean any person who is the registered owner or beneficial
owner of any Note.

     "Indenture" shall mean the Indenture dated as of June 1, 2001 among IKON
Receivables, LLC, as Issuer, IOS Capital, Inc., as Servicer and SunTrust Bank,
as Indenture Trustee, as such Indenture may be amended, modified or supplemented
from time to time as set forth in the Indenture.

     "Indenture Trustee" shall mean SunTrust Bank 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 "Indenture Trustee"
shall also mean such successor trustee or such co-trustee, as the case maybe,
subject to the provisions thereof.

     "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 Indenture
Trustee as debtor, or the commencement, after the date hereof, of any
proceedings by or against the Indenture Trustee 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 Indenture Trustee as debtor.

     "Insurance Agreement" shall mean the Insurance and Indemnity Agreement,
dated as of June 28, 2001, among IKON Receivables, LLC, as Issuer, IKON
Receivables-1,

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LLC, as Seller, IOS Capital, Inc., as Originator and Servicer, SunTrust Bank, as
Indenture 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 Indenture 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.

     "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 pursuant to 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 Indenture Trustee specifying the amount
of any Insured Payment which shall be due and owing.

     "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 on October 15, 2008.

     "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 Indenture 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.

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

                                       2

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     "Reimbursement Amount" shall mean, as of any date, the sum of (x) (i) all
Insured 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 7.06 of the
Indenture, plus (ii) interest accrued thereon, calculated at the Late Payment
           ----
Rate from the date the Indenture 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 Indenture Trustee and (y)
without duplication (i) any amounts then due and owing to the Insurer under the
Insurance Agreement plus (ii) interest on such amounts at the Late Payment Rate
                    ----
from the date such amounts were due.

     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, 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 receipt in New York, New York on a
Business Day by the Insurer of a Notice; 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 Indenture Trustee
in writing and the Indenture Trustee may submit an amended Notice.

     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 such
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) 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
against the estate of the Indenture Trustee or otherwise with respect to such
Preference Amount and (iv) a Notice appropriately completed and executed by the
Indenture Trustee. Such payment shall be disbursed to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Order, and not to the
Indenture Trustee or the Holder directly, unless the Indenture 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 Indenture Trustee, subject to
the delivery of (a) the items referred to in clauses (i), (ii), (iii) and (iv)
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.

                                        3

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     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.

     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 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.

     This Policy is issued under and pursuant to, and shall be construed under,
the laws of the State of New York.

                                       4

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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:

/s/ Melissa L. Velie                    /s/ Barry Schofield
----------------------------            ----------------------------
Assistant Secretary                     Vice  President

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                                    EXHIBIT A

                  TO THE CERTIFICATE GUARANTY INSURANCE POLICY

                               Policy No. AB0473BE

                         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. AB0473BE
(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 Indenture Trustee hereby certifies as follows:

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

     6.   The Indenture 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

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          with the terms of the Policy to:____________ Indenture Trustee's
          account number.

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

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

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

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                                                                             B-1

                                    EXHIBIT B

                  TO THE CERTIFICATE GUARANTY INSURANCE POLICY

                               Policy No. AB0473BE

                         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. AB0473BE
(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 Indenture Trustee hereby certifies as follows:

     1.   The Indenture Trustee is the Indenture 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 Indenture Trustee nor the Holder has heretofore made a
          demand for such Preference Amount.

     6.   The Indenture 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

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                                                                             B-2

          of federal or other immediately available funds in accordance with the
          terms of the Policy to:__________./1/

     7.   The Indenture 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:
                                       -----------------------------------------
                                                  Indenture Trustee

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

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