<PAGE>

                                                                  Execution Copy


                         AMBAC ASSURANCE CORPORATION,

                                      and

                            CHASE SECURITIES INC.,

                        BANC OF AMERICA SECURITIES LLC,

                          DEUTSCHE BANC ALEX. BROWN,

                             LEHMAN BROTHERS INC.

                                      AND

                           PNC CAPITAL MARKETS, INC.


                           INDEMNIFICATION AGREEMENT

                 $634,431,000 in aggregate principal amount of

            IKON RECEIVABLES, LLC LEASE-BACKED NOTES, SERIES 2000-2

                         Dated as of December 7, 2000
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                                TABLE OF CONTENTS

                                                                         Page
                                                                         ----



Section 1. Defined Terms....................................................1

Section 2. Other Definitional Provisions....................................1

Section 3. Representations and Warranties of the Underwriters...............1

Section 4. Representations and Warranties of the Insurer....................2

Section 5. Indemnification..................................................3

Section 6. Amendments, Etc..................................................4

Section 7. Notices..........................................................5

Section 8. Severability.....................................................5

Section 9. Governing Law....................................................5

Section 10. Counterparts....................................................5

Section 11. Headings........................................................5

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      INDEMNIFICATION AGREEMENT, dated as of December 7, 2000, by and among
Ambac Assurance Corporation, as Insurer, and Chase Securities Inc., Banc of
America Securities LLC, Deutsche Banc Alex. Brown, Lehman Brothers Inc. and PNC
Capital Markets, Inc., as the Underwriters.

      Section 1. Defined Terms. Unless the context clearly requires otherwise,
all capitalized terms used but not defined herein shall have the respective
meanings assigned to them in the Insurance and Indemnity Agreement, the
Certificate Guaranty Insurance Policy No. AB0409BE issued by the Insurer in
favor of the Trustee (the "Note Policy") or the Financial Guaranty Insurance
Policy No. SF0394BE issued by the Insurer in favor of Lehman Brothers Special
Financing Inc. (the "Swap Policy" and together with the Note Policy, the
"Policies"). For purposes of this Indemnification Agreement, the following terms
shall have the following meanings:

      "Indenture" means the Indenture dated as of December 1, 2000 among the
       ---------
Issuer, the Indenture Trustee and the Servicer.

      "Insurance and Indemnity Agreement" means the Insurance and Indemnity
       ---------------------------------
Agreement (as may be amended, modified or supplemented from time to time), dated
as of December 7, 2000, by and among the Insurer, the Seller, the Issuer, IOS
Capital, and the Indenture Trustee.

      "Insurer" means Ambac Assurance Corporation, a Wisconsin domiciled stock
       -------
insurance company, or any successor thereto, as issuer of the Policy.

      "Insurer Information" has the meaning given such term in Section 4.
       -------------------

      "Notes" means any notes authorized by, and authenticated and delivered
       -----
under the Indenture.

      "Underwriter Information" has the meaning given such term in Section 3.
       -----------------------

      "Underwriters" means Chase Securities Inc., Banc of America Securities
       ------------
LLC, Deutsche Banc Alex. Brown, Lehman Brothers Inc. and PNC Capital Markets,
Inc.

      Section 2. Other Definitional Provisions. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Indemnification
Agreement shall refer to this Indemnification Agreement as a whole and not to
any particular provision of this Indemnification Agreement, and Section,
subsection, Schedule and Exhibit references are to this Indemnification
Agreement unless otherwise specified. The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such terms.
The words "include" and "including" shall be deemed to be followed by the phrase
"without limitation."

      Section 3. Representations and Warranties of the Underwriters. Each of the
Underwriters, severally and not jointly, represents and warrants as of the
Closing Date as follows:
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      (a)   Offering Document. The Underwriters will not use, or distribute to
other broker-dealers for use, any Offering Document in connection with the offer
and sale of the Notes unless such Offering Document includes such information
relating to the Insurer as has been furnished by the Insurer for inclusion
therein and has been approved by the Insurer.

      (b)   Underwriter Information. As to each Underwriter, all material
provided in writing to the Company for inclusion in the Offering Document (as
revised from time to time, and as included in such Offering Document or any
other Offering Document), such information being the second, third, fifth and
sixth paragraphs of the section headed "Underwriting" in the Prospectus
Supplement dated November 29, 2000 with respect to the Notes (the "Underwriter
Information"), insofar as such information relates to such Underwriter, shall be
true and correct in all material respects.

      (c)   Compliance with Laws. Each Underwriter will comply in all material
respects with all legal requirements in connection with its offers and sales of
the Securities and will make such offers and sales in the manner provided in the
Offering Document.

      Section 4. Representations and Warranties of the Insurer. The Insurer
represents and warrants to the Underwriters as follows:

      (a)   Organization and Licensing. The Insurer is a duly organized and
validly existing Wisconsin stock insurance corporation.

      (b)   Corporate Power. The Insurer has the corporate power and authority
to issue the Policies and execute and deliver this Indemnification Agreement and
the Insurance Agreement and to perform all of its obligations hereunder and
thereunder.

      (c)   Authorization; Approvals. Proceedings legally required for the
issuance of the Policies and the execution, delivery and performance of this
Indemnification Agreement and the Insurance and Indemnity Agreement have been
taken and licenses, orders, consents or other authorizations or approvals of any
governmental boards or bodies legally required for the enforceability of the
Policies have been obtained or are not material to the enforceability of the
Policies.

      (d)   Enforceability. The Policies, when issued, and this Indemnification
Agreement and the Insurance and Indemnity Agreement will each constitute a
legal, valid and binding obligation of the Insurer, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, reorganization, moratorium,
receivership and other similar laws affecting creditors' rights generally and by
general principles of equity and subject to principles of public policy limiting
the right to enforce the indemnification provisions contained therein and
herein, insofar as such provisions relate to indemnification for liabilities
arising under federal securities laws.

      (e)   Financial Information. The balance sheet of the Insurer as of
December 31, 1999 and the related statements of income, stockholder's equity and
cash flows for the three fiscal years ended December 31, 1999, and the
accompanying footnotes, and the unaudited balance sheet of the Insurer as of
September 30, 2000, and the unaudited related statements of income,
stockholder's equity and cash flows for the three month period ending September
30, 2000, fairly


                                       2
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present in all material respects the financial condition of the Insurer as of
such dates and for the periods covered by such statements in accordance with
generally accepted accounting principles consistently applied. Any future
financial statements of the Insurer incorporated by reference into the Offering
Document relating to the Notes will fairly present in all material respects the
financial condition of the Insurer as of their dated dates in accordance with
generally accepted accounting principles consistently applied. Since September
30, 2000, there has been no change in such financial condition of the Insurer
that would materially and adversely affect its ability to perform its
obligations under the Policies.

      (f)   Insurer Information. The information relating to the Insurer in the
Prospectus Supplement dated November 29,2000 as of the date hereof under the
caption "The Insurer and the Policy" and the financial statements of the Insurer
incorporated by reference into the Offering Document (together the "Insurer
Information") are true and correct in all material respects and do not contain
any untrue statement of a material fact.

      Section 5. Indemnification.

      (a)   Each of the Underwriters agrees, severally and not jointly, to pay,
and to protect, indemnify and save harmless, the Insurer and its officers,
directors, shareholders, employees, agents and each Person, if any, who controls
the Insurer within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act, from and against, any and all claims,
losses, liabilities (including penalties), actions, suits, judgments, demands,
damages, costs or expenses (including reasonable fees and expenses of attorneys,
consultants and auditors and reasonable costs of investigations) of any nature
arising out of or by reason of any untrue statement of a material fact contained
in the Underwriter Information with respect to such Underwriter or a breach of
any of the representations and warranties of such Underwriter contained in
Section 3.

      (b)   The Insurer agrees to pay, and to protect, indemnify and save
harmless, each of the Underwriters and its officers, directors, shareholders,
employees, agents and each Person, if any, who controls the Underwriters within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act from and against, any and all claims, losses,
liabilities (including penalties), actions, suits, judgments, demands, damages,
costs or expenses (including reasonable fees and expenses of attorneys,
consultants and auditors and reasonable costs of investigations) of any nature
arising out of or by reason of any untrue statement of a material fact contained
in the Insurer Information or a breach of any of the representations and
warranties of the Insurer contained in Section 4.

      (c)   If any action or proceeding (including any governmental
investigation) shall be brought or asserted against any Person (individually, an
"Indemnified Party" and, collectively, the "Indemnified Parties") in respect of
which the indemnity provided in this Section 5(a) or (b) may be sought from the
Underwriters, on the one hand, or the Insurer, on the other (each, an
"Indemnifying Party") hereunder, each such Indemnified Party shall promptly
notify the Indemnifying Party in writing, and the Indemnifying Party shall
assume the defense thereof, including the employment of counsel satisfactory to
the Indemnified Party and the payment of all expenses. The Indemnified Party
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof at the expense of the Indemnified Party;
provided,


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however, that the fees and expenses of such separate counsel shall be at the
expense of the Indemnifying Party if (i) the Indemnifying Party has agreed to
pay such fees and expenses, (ii) the Indemnifying Party shall have failed to
assume the defense of such action or proceeding and employ counsel reasonably
satisfactory to the Indemnified Party in any such action or proceeding or (iii)
the named parties to any such action or proceeding (including any impleaded
parties) include both the Indemnified Party and the Indemnifying Party, and the
Indemnified Party shall have been advised by counsel that there may be one or
more legal defenses available to it which are different from or additional to
those available to the Indemnifying Party (in which case, if the Indemnified
Party notifies the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense of such action or
proceeding on behalf of such Indemnified Party, it being understood, however,
that the Indemnifying Party shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time for the Indemnified Parties, which
firm shall be designated in writing by the Indemnified Party). The Indemnifying
Party shall not be liable for any settlement of any such action or proceeding
effected without its written consent to the extent that any such settlement
shall be prejudicial to the Indemnifying Party, but, if settled with its written
consent, or if there is a final judgment for the plaintiff in any such action or
proceeding with respect to which the Indemnifying Party shall have received
notice in accordance with this subsection (c), the Indemnifying Party agrees to
indemnify and hold the Indemnified Parties harmless from and against any loss or
liability by reason of such settlement or judgment.

      (d)   To provide for just and equitable contribution if the
indemnification provided by the Indemnifying Party is determined to be
unavailable or insufficient to hold harmless any Indemnified Party (other than
due to application of this Section), each Indemnifying Party shall contribute to
the losses incurred by the Indemnified Party on the basis of the relative fault
of the Indemnifying Party, on the one hand, and the Indemnified Party, on the
other hand. The relative fault of each Indemnifying Party, on the one hand, and
each Indemnified Party, on the other, shall be determined by reference to, among
other things, whether the breach of, or alleged breach of, any of its
representations and warranties set forth within the control of, the Indemnifying
Party or the Indemnified Party, and the parties relative intent, knowledge,
access to information and opportunity to correct or prevent such breach. No
person guilty of fraudulent misrepresentation (within the meaning Section
(11)(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. No Underwriter shall be
responsible for any amount in excess of an amount equal to the excess of the
sales price to the public of the Notes purchased by such Underwriter over the
price paid therefor by such Underwriter.

      Section 6. Amendments, Etc. This Indemnification Agreement may be amended,
modified, supplemented or terminated only by written instrument or written
instruments signed by the parties hereto.


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<PAGE>

      Section 7. Notices. All demands, notices and other communications to be
given hereunder shall be in writing (except as otherwise specifically provided
herein) and shall be mailed by registered mail or personally delivered and
telecopied to the recipient as follows:

                  (a)      To the Insurer:

                           Ambac Assurance Corporation
                           One State Street Plaza
                           New York, New York    10004
                           Attention:  Structured Finance Department
                           Facsimile:  (212) 208-3547

                  (b)      To the Underwriters:

                           c/o Chase Securities Inc.
                           270 Park Avenue
                           New York, New York 10017
                           Attention:  Global Securitized Finance
                           Facsimile:  (212) 834-6562


      A party may specify an additional or different address or addresses by
writing mailed or delivered to the other parties as aforesaid. All such notices
and other communications shall be effective upon receipt.

      Section 8. Severability. In the event that any provision of this
Indemnification Agreement shall be held invalid or unenforceable by any court of
competent jurisdiction, the parties hereto agree that such holding shall not
invalidate or render unenforceable any other provision hereof. The parties
hereto further agree that the holding by any court of competent jurisdiction
that any remedy pursued by any party hereto is unavailable or unenforceable
shall not affect in any way the ability of such party to pursue any other remedy
available to it.

      Section 9. Governing Law. This Indemnification Agreement shall be governed
by and construed in accordance with the laws of the State of New York (without
giving effect to the conflict of laws provisions thereof).

      Section 10. Counterparts. This Indemnification Agreement may be executed
in counterparts by the parties hereto, and all such counterparts shall
constitute one and the same instrument.

      Section 11. Headings. The headings of Sections and the Table of Contents
contained in this Indemnification Agreement are provided for convenience only.
They form no part of this Indemnification Agreement and shall not affect its
construction or interpretation.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


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      IN WITNESS WHEREOF, the parties hereto have executed this Agreement, all
as of the day and year first above mentioned.

                              Ambac Assurance Corporation,
                                   as Insurer

                              By: /s/ Barry Schofield
                                  -------------------
                              Name: Barry Schofield
                              Title: Vice President


                                      S-1
<PAGE>

                             Chase Securities Inc.,
                                as an Underwriter

                              By: /s/ Brad Dansker
                                 -----------------
                              Name: Brad Dansker
                              Title: Vice President


                                      S-2
<PAGE>

                             Banc of America Securities LLC,
                                 as an Underwriter

                             By: /s/ Erik J. Priede
                                 -------------------
                             Name: Erik J. Priede
                             Title: Vice President


                                      S-3
<PAGE>

                             Deutsche Banc Alex. Brown,
                                  as an Underwriter

                             By: /s/ Christine Beaudet
                                 ---------------------
                             Name: Christine Beaudet
                             Title: Director

                             By: /s/ Ruben Arilez
                                 ----------------
                             Name: Ruben Arilez
                             Title: Vice President


                                      S-4
<PAGE>

                             Lehman Brothers Inc.
                               as an Underwriter

                             By: /s/ Henry Domenici
                                -------------------
                             Name: Henry Domenici
                             Title: Vice President


                                      S-5
<PAGE>

                             PNC Capital Markets, Inc.,
                                  as an Underwriter

                             By: /s/ Mark Falcione
                                 -----------------
                             Name: Mark Falcione
                             Title: Director


                                      S-6