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                                                                     EXHIBIT 4.2


                   CERTIFICATE GUARANTY INSURANCE ENDORSEMENT

Attached to and forming                           Effective Date of Endorsement:
part of Policy #AB0559BE                          May 30, 2002
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 June, 2003, 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 February, 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 October,
2006, 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 November, 2009, 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 June 17, 2002.

         "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 May 1, 2002 among IKON
Receivables Funding, LLC, as Issuer, IOS Capital, Inc., as Servicer and BNY
Midwest Trust Company, as Trustee, as such Indenture may be amended, modified or
supplemented from time to time as set forth in the Indenture.

         "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 May 30, 2002, 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 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

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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.

         "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 November 15, 2009.

         "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.

         "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 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 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 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, 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 Trustee in writing
and the Trustee may submit an amended Notice.

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         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) 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 Trustee or otherwise with respect to such
Preference Amount and (iv) a Notice in the form of Exhibit B appropriately
completed and executed by the 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 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) 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.

         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 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. 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.

         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

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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.

         This Policy is issued under the pursuant to, and shall be construed
under, the laws of the State of New York, without giving effect to the conflict
of laws principles thereof.

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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 Velie                           /s/ Barry Schofield
---------------------------------           ------------------------------------
Assistant Secretary                         Vice President

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                                                                             A-1

                                    EXHIBIT A

                  TO THE CERTIFICATE GUARANTY INSURANCE POLICY

                               Policy No. AB0559BE

                         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. AB0559BE
(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

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

                                          By:  ____________________________
                                                         Trustee

                                          Title:___________________________
                                                         (Officer)

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                                                                             B-1

                                    EXHIBIT B

                  TO THE CERTIFICATE GUARANTY INSURANCE POLICY

                               Policy No. AB0559BE

                         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. AB0559BE
(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

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                  following account by bank wire transfer of federal or other
                  immediately available funds in accordance with the terms of
                  the Policy to:_______./1/

         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)

_______________
/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.