Document:

<PAGE>

================================================================================

                        IKON RECEIVABLES FUNDING, LLC,
                                    Issuer

                     ___________________________________,
                                    Trustee

                                      and

                              IOS CAPITAL, INC.,
                                   Servicer

                            ______________________

                                   INDENTURE

                           Dated as of ______, ____

                            ______________________

                   $__________ in aggregate principal amount
                     of Lease-Backed Notes, consisting of:

             $__________of ______% Class [A-1] Lease-Backed
                        Notes

             $__________of ______% Class [A-2] Lease-Backed
                        Notes

             $__________of ______% Class [A-3a] Lease-Backed
                        Notes

             $__________of Class [A-3b] Lease-Backed Notes

             $__________of ______ Class [A-4] Lease-Backed Notes

===============================================================================
<PAGE>

                         IKON RECEIVABLES FUNDING, LLC

                 Reconciliation and Tie between the Indenture
                      dated as of ________, ____ and the
                    Trust Indenture Act of 1939, as amended

<TABLE>
<CAPTION>
       Trust Indenture Act Section                                                      Indenture Section
       ---------------------------                                                      -----------------
               <S>                                                                      <C>
               (S) 310  (a)(1)........................................................  (S)   8.07
                        (a)(2)........................................................        8.07
                        (a)(3)........................................................        Not Applicable
                        (a)(4)........................................................        Not Applicable
                        (b)...........................................................        8.07; 8.08; 7.07; 1.05; 1.06
                        (c)...........................................................        Not Applicable
                   311  (a)...........................................................        8.13
                        (b)...........................................................        8.13
                   312  (a)...........................................................        2.11
                        (b)...........................................................        12.02
                        (c)...........................................................        12.02
                   313  (a)...........................................................        8.14
                        (b)(1)........................................................        Not Applicable
                        (b)(2)........................................................        8.14
                        (c)...........................................................        8.14; 1.06
                        (d)...........................................................        8.14
                   314  (a)...........................................................        9.12; 9.09; 1.06
                        (b)...........................................................        Not Applicable
                        (c)(1)........................................................        12.04
                        (c)(2)........................................................        12.04
                        (c)(3)........................................................        12.01
                        (d)...........................................................        12.01
                        (e)...........................................................        12.05
                        (f)...........................................................        Not Applicable
                   315  (a)...........................................................        8.01(a)
                        (b)...........................................................        8.02; 1.06
                        (c)...........................................................        8.01(b)
                        (d)...........................................................        8.01(c)
                        (e)...........................................................        7.13
                   316  (a) (last sentence)...........................................        2.12
                        (a)(1)(A).....................................................        7.12
                        (a)(1)(b).....................................................        7.11
                        (a)(2)........................................................        Not Applicable
                   317  (a)(1)........................................................        7.03(c)
                        (a)(2)........................................................        7.04
                        (b)...........................................................        9.03(c)
                   318  (a)...........................................................        12.01, 12.02
                        (c)...........................................................        12.01
</TABLE>
                                      ii
<PAGE>

                                   INDENTURE

          This INDENTURE dated as of ________, 2001, is among IKON RECEIVABLES
FUNDING, LLC, a Delaware limited liability company (herein called the "Issuer"),
_________________________________, as trustee (herein called the "Trustee"), and
IOS CAPITAL, INC., as servicer (herein called the "Servicer").

                                   RECITALS

          The Issuer has duly authorized the issuance of $_____________ in
aggregate principal amount of its Lease-Backed Notes, consisting of $__________
aggregate principal amount of ______% Class [A-1] Lease-Backed Notes (the "Class
[A-1] Notes"), $__________ aggregate principal amount of ______% Class [A-2]
Lease-Backed Notes (the "Class [A-2] Notes"), $__________ aggregate principal
amount of ______% Class [A-3a] Lease-Backed Notes (the "Class [A-3a] Notes"),
$__________ aggregate principal amount of Class [A-3b] Lease-Backed Notes (the
"Class [A-3b] Notes") and $__________ aggregate principal amount of ______%
Class [A-4] Lease-Backed Notes (the "Class [A-4] Notes", together with the Class
[A-1] Notes, Class [A-2] Notes, and Class [A-3a] Notes, Class [A-3b], the
"Notes"), and to provide therefor the Issuer has duly authorized the execution
and delivery of this Indenture.  The Notes shall be entitled to payments of
interest and principal as set forth herein.

          [_______________________________________________________ (the
"Insurer"), has issued and delivered a financial guaranty insurance policy,
dated the Issuance Date (with endorsements, the "Policy"), pursuant to which the
Insurer guarantees Insured Payments, as defined in the Policy.]  [The Insurer
has also issued and delivered the Swap Insurance Policy (as defined herein)].

          [As an inducement to the Insurer to issue and deliver the Policy [and
the Swap Insurance Policy], the Issuer and the Insurer have executed and
delivered the Insurance and Indemnity Agreement, dated as of ______, 2001 (as
amended from time to time, the "Insurance Agreement") among IOS Capital, Inc.,
IKON Receivables 2 LLC, the Issuer and the Insurer.]

          [As an additional inducement to the Insurer to issue the Policy [and
the Swap Insurance Policy], and as security for the performance by the Issuer of
the Insurer Secured Obligations (as defined below) and as security for the
performance by the Issuer of the Trustee Secured Obligations, the Issuer has
agreed to assign the Asset Pool (as defined below) to the Trustee for the
benefit of the Issuer Secured Parties, as their respective interests may
appear.]
<PAGE>

          All things necessary to make the Notes, when executed by the Issuer
and authenticated and delivered hereunder, the valid obligations of the Issuer,
and to make this Indenture a valid agreement of the Issuer, in accordance with
its terms, have been done.

          NOW, THEREFORE, THIS INDENTURE WITNESSETH:

          For and in consideration of the premises and the purchase of the Notes
by the holders thereof, it is mutually covenanted and agreed, for the benefit of
all Noteholders, as follows:

                                GRANTING CLAUSE

          The Issuer hereby Grants to the Trustee on the Issuance Date, for the
benefit and security of the Issuer Secured Parties, all of the Issuer's right,
title and interest in and to (a) the Leases and all Lease Payments, [Renewal
Payments,] Casualty Payments, Retainable Deposits, Lease Purchase Amounts,
Termination Payments, Servicer Advances and other amounts now due or becoming
due with respect thereto since the Cut-Off Date (other than any prepayments of
rent required pursuant to the terms of any Lease at or before the commencement
of the Lease and any payments due before the Cut-Off Date) and all Additional
Leases and Substitute Leases and all Lease Payments, [Renewal Payments,]
Casualty Payments, Retainable Deposits, Lease Purchase Amounts, Termination
Payments, Servicer Advances and other amounts due or becoming due with respect
thereto since the effective date of their respective addition or substitution
(other than any prepayments of rent required by the terms of any Lease at or
before the commencement of the Lease and any payments due before the effective
date of such addition or substitution), (b) all rights to payment or performance
under any Lease Guaranty, (c) all rights and interests of the Issuer in any
collateral with respect to any Lease, including any security deposit (whether or
not they shall have become Retainable Deposits) and any security interest in any
Equipment securing the obligations of the related Lessees under the Leases, (d)
all interests of the Issuer in the Equipment (which, however, excludes any
ownership interests therein) at any time subject to any Lease, including the
security interest granted by the Seller to the Issuer pursuant to the Assignment
and Servicing Agreement in the Equipment, (e) all rights, remedies, claims,
powers and privileges of the Issuer under or with respect to the [Swap] and the
[Swap Documents], (f) all moneys from time to time on deposit in any of the
Transaction Accounts, including all investments and income from the investment
of such moneys, (g) all rights of the Issuer under the Assignment and Servicing
Agreement, and (h) all proceeds of any of the foregoing, whether in cash or
other property (collectively, the "Asset Pool").

          Such Grant is made in trust to the Trustee, for the benefit of the
Issuer Secured Parties.

          The Grant of the Asset Pool effected by this Indenture shall include
all rights, powers, and options (but none of the obligations) of the Issuer with
respect thereto, including, without limitation, the immediate and continuing
right to claim for, collect, receive, and give receipts for Lease Payments in
respect of the Leases and all

                                       2
<PAGE>

other moneys constituting part of the Asset Pool, to give and receive notices
and other communications, to make waivers or other agreements, to exercise all
rights and options, to bring judicial proceedings in the name of the Issuer or
otherwise, and generally to do and receive anything that the Issuer is or may be
entitled to do or receive under the Leases or with respect to any part of the
Asset Pool.

          [In addition, the Insurer shall cause the Policy to be issued to the
Trustee for the benefit of the Noteholders and shall cause the [Swap Insurance
Policy] to be issued.]

          The Trustee acknowledges such Grant, accepts the trusts hereunder in
accordance with the provisions hereof, and agrees to perform the duties herein
required to the best of its ability and to the end that the interests of the
Noteholders and the Insurer may be adequately and effectively protected as
hereinafter provided.

                                   ARTICLE I

                       DEFINITIONS AND OTHER PROVISIONS
                            OF GENERAL APPLICATION

          SECTION 1.01.  General Definitions.
                         -------------------

          Except as otherwise specified or as the context may otherwise require,
the following terms have the meanings set forth below for all purposes of this
Indenture, and the definitions of such terms are applicable to the singular as
well as to the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such terms.

          Acceleration Event:  if:  (i) a Servicer Event of Default has occurred
          ------------------
(regardless of whether the rights and obligations of the Servicer have been
terminated pursuant to Section 6.01); (ii) with respect to any Payment Date, the
Overcollateralization Balance is  less  than or equal to the
Overcollateralization Floor; (iii) for any three consecutive Due Periods, the
average of the Annualized Default Rates for those Due Periods is greater than
_____%,;  or (iv) for any three consecutive Due Periods, the average of the
Delinquency Rates for  those Due Periods is greater than ______%.

          Act:  with respect to any Noteholder, as defined in Section 1.04.
          ---

          Additional Lease:  as defined in Section 14 of the Assignment and
          ----------------
Servicing Agreement.

          Additional Principal:  with respect to each Payment Date equals the
          --------------------
excess, if any, of (i)(A) the Outstanding Principal Amount of the Notes plus the
Overcollateralization Balance as of the immediately preceding Payment Date after
giving effect to payments on such Payment Date minus (B) the Discounted Present
Value of the Performing Leases as of the related Determination Date, over (ii)
the Class A Principal Payment to be paid on such Payment Date.

                                       3
<PAGE>

          Affiliate:  with respect to any specified Person, any other Person
          ---------
which directly or indirectly controls, or is controlled by, or is under common
control with, such specified Person.  The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise.

          Annualized Default Rate: for any Due Period, the sum as of the related
          -----------------------
Determination Date of the Discounted Present Value of the Leases that became
Non-Performing Leases during such Due Period minus the sum of the recoveries on
Non-Performing Leases received during such Due Period, divided by the Discounted
Present Value of the Leases on the Determination Date immediately preceding that
Determination Date, multiplied by twelve

          Assignment and Servicing Agreement:  the Assignment and Servicing
          ----------------------------------
Agreement dated as of ________, ____ among the Issuer, the Seller and IOS
Capital, as the same may be amended or modified from time to time in accordance
with the provisions hereof and thereof.

          Authorized Officer:  with respect to any matter, any officer of or
          ------------------
other Person representing the Issuer, IOS Capital or the Servicer, as the case
may be, who is authorized to act for the Issuer, IOS Capital or the Servicer, as
the case may be.

          Available Funds:  with respect to any Payment Date, the following
          ---------------
amounts on deposit in the Collection Account on the related Determination Date:
(a) Lease Payments [(including Renewal Payments)] due during the immediately
preceding or any prior Due Period, (b) recoveries from Non-Performing Leases
(including amounts received from the Seller pursuant to Section 5.05 of the
Assignment and Servicing Agreement) to the extent IOS Capital has not
substituted Substitute Leases for such Non-Performing Leases; (c) late charges
received on delinquent Lease Payments not advanced by the Servicer; (d) proceeds
from purchases by IOS Capital of Leases as a result of breaches of
representations and warranties to the extent IOS Capital has not substituted
Substitute Leases for such Leases; (e) proceeds from the investment of funds in
the Collection Account, the Reserve Account and the Security Deposit Account;
(f) Casualty Payments; (g) Retainable Deposits; (h) Servicer Advances, if any,
in respect of the related Due Period; (i) any amounts paid by the [Counterparty]
to the Issuer pursuant to the [Swap Documents]; (j) Termination Payments to the
extent the Issuer does not reinvest such Termination Payments in Additional
Leases; (k) proceeds received for redemption of the Notes pursuant to Section
2.01(b); [(l) payments received from the Insurer pursuant to Section 3.07;] and
(m) to the extent there occurs an Available Funds Shortfall, funds, if any, on
deposit in the Reserve Account after making any distribution in respect of such
Payment Date from the Reserve Account to the Collection Account on account of
investment earnings pursuant to the first sentence of Section 3.04(b).

          Available Funds Shortfall:  as defined in Section 3.04(b).
          -------------------------

          Available Reserve Amount:  with respect to any Payment Date, the
          ------------------------
amount on deposit in the Reserve Account after making any distribution in
respect of

                                       4
<PAGE>

such Payment Date from the Reserve Account to the Collection Account on account
of investment earnings pursuant to the first sentence of Section 3.04(b).

          Benefit Plan:  as defined in Section 2.03(a).
          ------------

          Book-Entry Class [A-1] Notes:  the Class [A-1] Notes, evidenced by one
          ----------------------------
or more global notes registered in the name of DTC or its nominee, the ownership
and transfers of which shall be made through book entries by DTC as described in
Section 2.05.

          Book-Entry Class [A-2] Notes:  the Class [A-2] Notes, evidenced by one
          ----------------------------
or more global notes registered in the name of DTC or its nominee, the ownership
and transfers of which shall be made through book entries by DTC as described in
Section 2.05.

          Book-Entry Class [A-3a] Notes:  the Class [A-3a] Notes, evidenced by
          -----------------------------
one or more global notes registered in the name of DTC or its nominee, the
ownership and transfers of which shall be made through book entries by DTC as
described in Section 2.05.

          Book-Entry Class [A-3b] Notes:  the Class [A-3b] Notes, evidenced by
          -----------------------------
one or more global notes registered in the name of DTC or its nominee, the
ownership and transfers of which shall be made through book entries by DTC as
described in Section 2.05.

          Book-Entry Class [A-4] Notes:  the Class [A-4] Notes, evidenced by one
          ----------------------------
or more global notes registered in the name of DTC or its nominee, the ownership
and transfers of which shall be made through book entries by DTC as described in
Section 2.05.

          Book-Entry Note:  any Book-Entry Class [A-1] Note, Book-Entry Class
          ---------------
[A-2] Note, Book-Entry Class [A-3a], Book-Entry Class A-3b Note or Book-Entry
Class [A-4] Note.

          Business Day:  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 and the principal offices of [the Insurer and] the Servicer are located
are authorized or obligated by law or executive order to remain closed.

          Casualty Payment:  any payment pursuant to a Lease on account of the
          ----------------
loss, theft, condemnation, governmental taking, destruction, or damage beyond
repair of any item of Equipment subject thereto which results, in accordance
with the terms of the Lease, in a reduction in the number or amount of any
future Lease Payments due thereunder or in the termination of the Lessee's
obligation to make future Lease Payments thereunder.

          Cede & Co.:  the initial registered holder of the Class A Notes,
          ----------
acting as nominee of The Depository Trust Company.

                                       5
<PAGE>

          Class A Notes:  as defined in the Recitals hereto.
          -------------

          Class A Percentage:  ______%.
          ------------------

          Class A Principal Payment:  (a) while the Class [A-1] Notes are
          -------------------------
outstanding, (i) on all Payment Dates prior to the Payment Date in [__________,
200_, the lesser of (1) the amount necessary to reduce the Outstanding Principal
Amount on the Class [A-1] Notes to zero and (2) the difference between (A) the
Discounted Present Value of the Performing Leases as of the Determination Date
for the preceding Payment Date and (B) the Discounted Present Value of the
Performing Leases as of the related Determination Date, and (ii) on and after
the Payment Date in ________ 200_, the entire Outstanding Principal Amount of
the Class [A-1] Notes, and (b) after the Class [A-1] Notes have been paid in
full, the amount necessary to reduce the aggregate Outstanding Principal Amount
on the Class A Notes to the Class A Target Investor Principal Amount.

          Class A Target Investor Principal Amount:  with respect to each
          ----------------------------------------
Payment Date, an amount equal to the product of (a) the Class A Percentage and
(b) the Discounted Present Value of the Performing Leases as of the related
Determination Date.

          Class [A-1] Initial Principal Amount:  $__________.
          ------------------------------------

          Class [A-1] Note Interest Rate:  the rate at which interest accrues on
          ------------------------------
the Class [A-1] Notes, which rate shall be equal to ______% per annum.

          Class [A-1] Note Owner:  with respect to a Book-Entry Class [A-1]
          ----------------------
Note, the Person who is the beneficial owner of such Book-Entry Class [A-1]
Note, as reflected on the books of DTC, or on the books of a Person maintaining
an account with DTC (directly or as an indirect participant, in accordance with
the rules of DTC).

          Class [A-1] Noteholder:  Cede & Co. or a holder of a Definitive Class
          ----------------------
[A-1] Note.

          Class [A-1] Notes:  as defined in the Recitals hereto.
          -----------------

          Class [A-2] Initial Principal Amount:  $__________.
          ------------------------------------

          Class [A-2] Note Interest Rate:  the rate at which interest accrues on
          ------------------------------
the Class [A-2] Notes, which rate shall be equal to ______% per annum.

          Class [A-2] Note Owner:  with respect to a Book-Entry Class [A-2]
          ----------------------
Note, the Person who is the beneficial owner of such Book-Entry Class [A-2]
Note, as reflected on the books of DTC, or on the books of a Person maintaining
an account with DTC (directly or as an indirect participant, in accordance with
the rules of DTC).

          Class [A-2] Noteholder:  Cede & Co. or a holder of a Definitive Class
          ----------------------
[A-2] Note.

          Class [A-2] Notes:  as defined in the Recitals hereto.
          -----------------

                                       6
<PAGE>

          Class [A-3a] Initial Principal Amount:  $__________.
          -------------------------------------

          Class [A-3b] Initial Principal Amount:  $__________.
          -------------------------------------

          Class [A-3a] Note Interest Rate:  the rate at which interest accrues
          -------------------------------
on the Class [A-3a] Notes, which rate shall be equal to ______% per annum.

          Class [A-3b] Note Interest Rate:  the rate at which interest accrues
          -------------------------------
on the Class [A-3b] Notes, which rate shall be equal to LIBOR plus ______%.

          Class [A-3a] Note Owner:  with respect to a Book-Entry Class [A-3a]
          -----------------------
Note, the Person who is the beneficial owner of such Book-Entry Class [A-3a]
Note, as reflected on the books of DTC, or on the books of a Person maintaining
an account with DTC (directly or as an indirect participant, in accordance with
the rules of DTC).

          Class [A-3b] Note Owner:  with respect to a Book-Entry Class [A-3b]
          -----------------------
Note, the Person who is the beneficial owner of such Book-Entry Class [A-3b]
Note, as reflected on the books of DTC, or on the books of a Person maintaining
an account with DTC (directly or as an indirect participant, in accordance with
the rules of DTC).

          Class [A-3a] Noteholder:  Cede & Co. or a holder of a Definitive Class
          -----------------------
[A-3a] Note.

          Class [A-3b] Noteholder:  Cede & Co. or a holder of a Definitive Class
          -----------------------
[A-3b] Note.

          Class [A-3a] Notes:  as defined in the Recitals hereto.
          ------------------

          Class [A-3b] Notes:  as defined in the Recitals hereto.
          ------------------

          Class [A-4] Initial Principal Amount:  $__________.
          ------------------------------------

          Class [A-4] Note Interest Rate:  the rate at which interest accrues on
          ------------------------------
the Class [A-4] Notes, which rate shall be equal to ______% per annum.

          Class [A-4] Note Owner:  with respect to a Book-Entry Class [A-4]
          ----------------------
Note, the Person who is the beneficial owner of such Book-Entry Class [A-4]
Note, as reflected on the books of DTC, or on the books of a Person maintaining
an account with DTC (directly or as an indirect participant, in accordance with
the rules of DTC).

          Class [A-4] Noteholder:  Cede & Co. or a holder of a Definitive Class
          ----------------------
[A-4] Note.

          Class [A-4] Notes:  as defined in the Recitals hereto.
          -----------------

          Clearing Agency:  an organization registered as a "clearing agency"
          ---------------
pursuant to Section 17A of the Exchange Act, or any successor provision thereof.
The initial Clearing Agency shall be DTC.

                                       7
<PAGE>

          Clearing Agency Participant:  a broker, dealer, bank, other financial
          ---------------------------
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.

          Clearstream: shall mean Clearstream Banking, societe anonyme, a
          -----------
professional depository incorporated under the laws of Luxembourg and its
successors.

          Code:  as defined in Section 2.03(a).
          ----

          Collection Account:  the account or accounts by that name established
          ------------------
and maintained by the Trustee pursuant to Section 3.01(a).

          Commission:  the Securities and Exchange Commission.
          ----------

          Corporate Trust Office:  the principal corporate trust office of the
          ----------------------
Trustee located at ____________________, Attention:  Indenture Trust
Administration, or at such other address as the Trustee may designate from time
to time by notice to the Noteholders, [the Insurer], the Issuer and the
Servicer.

          [Counterparty]:  [_______________, or its permitted successors or
          --------------
assigns under the [Swap Documents].

          Cumulative Loss Amount: with respect to each Payment Date, an amount
          ----------------------
equal to the excess, if any, of (a) the total of (i) the Outstanding Principal
Amount of the Notes as of the immediately preceding Payment Date after giving
effect to all principal payments made on that day, plus (ii) the
Overcollateralization Balance as of the immediately preceding Payment Date,
minus (iii) the lesser of (A) the Discounted Present Value of the Performing
Leases as of the Determination Date relating to the immediately preceding
Payment Date minus the Discounted Present Value of the Performing Leases as of
the related Determination Date and (B) Available Funds remaining after the
payment of the Insurer Premium, amounts owing the Servicer, Interest Payments
and Reimbursement Amounts on such Payment Date, over (b) the Discounted Present
Value of the Performing Leases as of the related Determination Date.

          Cut-Off Date:  the opening of business on ________, 200__.
          ------------

          Default:  any occurrence that is, or with notice or the lapse of time
          -------
or both would become, an Event of Default.

          Deficiency Amount:  (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 October, 200__, 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 ____, [    ], 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 August, ____, any shortfall in the
sum of Available Funds (excluding amounts in the

                                       8
<PAGE>

Reserve Account) plus amounts on deposit in the Reserve Account to pay, on a pro
rata basis, the Outstanding Principal Amount of the Class [A-3a] Notes and the
Class [A-3b] Notes and (e) on the Payment Date in ______, 200_, 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).

          Definitive Note:  a definitive, fully registered Note issued pursuant
          ---------------
to Section 2.07.

          Delinquency Rate: for any Due Period, the sum as of the related
          ----------------
Determination Date of the Discounted Present Value of the Leases that are more
than 62 days delinquent, as of such Determination Date, divided by the
Discounted Present Value of the Leases on that Determination Date.

          Delinquent Lease:  as of any Determination Date, any Lease (other than
          ----------------
a Lease which became a Non-Performing Lease prior to such Determination Date)
with respect to which the Lessee has not paid all Lease Payments then due.

          Depository Agreement:  the letter of representations, between the
          --------------------
Issuer and the Depository Trust Company, as Clearing Agency.

          Determination Date:  with respect to any Payment Date, the fifth
          ------------------
Business Day immediately preceding such Payment Date.

          Discount Rate:  with respect to any Determination Date, ______%.
          -------------

          Discounted Present Value:  with respect to any Lease as of any date,
          ------------------------
an amount equal to the net present value of all remaining scheduled Lease
Payments, determined by discounting each such Lease Payment on a monthly basis
(assuming a calendar year consisting of twelve 30-day months), at a rate equal
to the Discount Rate, to the last day of the Due Period prior to the relevant
calculation date.  In determining the Discounted Present Value of any Lease on
any date, it will be assumed that Lease Payments are due on the last day of the
calendar month immediately preceding the relevant calculation date and the
future remaining Lease Payments will be calculated after giving effect to any
payments received prior to the date of calculation to the extent such payments
relate to Lease Payments due and payable by the Lessee with respect to the
related Due Period and any prior Due Period.

          Discounted Present Value of the Delinquent Leases: with respect to any
          -------------------------------------------------
Payment Date or Determination Date, the Discounted Present Value of the Leases
that are Delinquent Leases and as to which a Lease Payment, or any portion
thereof, was more than 62 days overdue as of the last day of the Due Period
immediately preceding such Payment Date or Determination Date.

          Discounted Present Value of the Performing Leases: the Discounted
          -------------------------------------------------
Present Value of the Leases, reduced by the discounted present value of all
future

                                       9
<PAGE>

remaining scheduled Lease Payments on the Non-Performing Leases, discounted at
the Discount Rate and otherwise determined in accordance with the definition of
"Discounted Present Value".

          DTC:  the Depository Trust Company.
          ---

          Due Period:  with respect to any Payment Date and the Determination
          ----------
Date with respect thereto, the period beginning on the first day and ending on
the last day of the calendar month prior to the month in which such Payment Date
and such Determination Date occur.

          Eligible Account:  either (a) an account maintained with a depository
          ----------------
institution or trust company acceptable to each of the Rating Agencies and (so
long as no Insurer Default has occurred and is continuing) the Insurer or (b) a
trust account or similar account acceptable to each of the Rating Agencies
maintained with a federal or state chartered depository institution, which may
be an account maintained with the Trustee.

          Eligible Investments:  any one or more of the following obligations or
          --------------------
securities:

          (a) direct non-callable obligations of, and non-callable obligations
     fully guaranteed by, the United States of America, or any agency or
     instrumentality of the United States of America the obligations of which
     are backed by the full faith and credit of the United States of America;

          (b) demand and time deposits in, certificates of deposits of, and
     bankers' acceptances issued by, any depository institution or company
     (including the Trustee acting in its commercial capacity) incorporated
     under the laws of the United States of America or any state thereof, having
     a combined capital and surplus of at least $__________, and subject to
     supervision and examination by federal and/or state banking authorities, so
     long as at the time of such investment or contractual commitment providing
     for such investment the commercial paper or other short-term debt
     obligations of such depository institution or company (or, in the case of a
     depository institution that is the principal subsidiary of a holding
     company, the commercial paper or other short-term debt obligations of such
     holding company) have the highest short-term credit ratings available from
     Moody's and S&P;

          (c) purchase obligations with respect to and collateralized by (i) any
     security described in clause (a) above or (ii) any other security issued or
     guaranteed by an agency or instrumentality of the United States of America,
     in each case entered into with a depository institution or company (acting
     as principal) of the type described in clause (b) above; provided that the
                                                              --------
     Trustee has taken delivery of such security;

          (d) commercial paper (including both non-interest bearing discount
     obligations and interest-bearing obligations) payable on demand or on a
     specified

                                      10
<PAGE>

     date not more than 270 days after the date of issuance thereof having the
     highest short-term credit ratings from Moody's and S&P at the time of such
     investment;

          (e) money market funds that redeem their shares on demand, invest only
     in other Eligible Investments, and are rated Aaa by Moody's and AAAm or
     AAAm-G by S&P (including funds for which the Trustee or any of its
     affiliates is investment manager or advisor);

          (f) demand notes payable on demand issued by an institution rated A2
     by Moody's and A-1+ by S&P at the time of such investment;

          (g) funding agreements or guaranteed investment contracts provided by
     issuers rated Aaa or P-1 by Moody's and A-1+ by S&P which provide, by their
     terms, for receipt by the Trustee on or prior to the next Payment Date of a
     predetermined fixed dollar amount which cannot vary or change; and

          (h) such other investments as may be approved by the Rating Agencies
     [and, so long as no Insurer Default has occurred and is continuing, the
     Insurer].

          Equipment:  each item of personal property, together with any
          ---------
replacement parts, additions, and repairs thereto, any replacements thereof, and
any accessories incorporated therein and/or affixed thereto, subject to a Lease
or, following expiration or termination of the Lease to which the same was
previously subject, remaining subject to the security interest granted by the
Seller to the Issuer pursuant to Section 1.02(b) of the Assignment and Servicing
Agreement.

          ERISA:  the Employee Retirement Income Security Act of 1974, as
          -----
amended.

          Euroclear:  the Euroclear System.
          ---------

          Event of Default:  as defined in Section 7.01.
          ----------------

          Exchange Act:  the Securities Exchange Act of 1934, as amended.
          ------------

          Excess Copy Charge:  with respect to any Lease, means the amount owing
          ------------------
by such Lessee under such Lease reflecting usage of the related Equipment in
excess of a specified copy amount per month.

          Financing Statement:  as defined in Section 14 of the Assignment and
          -------------------
Servicing Agreement.

          Governmental Authority: Any court or federal or state regulatory body,
          ----------------------
administrative agency or other tribunal or other governmental instrumentality.

          Grant:  grant, bargain, sell, convey, assign, transfer, mortgage,
          -----
pledge, create and grant a security interest in and right of set-off against,
deposit, set over and confirm.

                                      11
<PAGE>

          Holder:  a holder of a Note.
          ------

          [Indemnified Party:  as defined in Section 9.11.]
           -----------------

          Indenture:  this instrument as originally executed and as from time to
          ---------
time supplemented or amended pursuant to the applicable provisions hereof.

          Initial Payment Date:  ________, 200_.
          --------------------

          [Insurance Agreement:  as defined in the Recitals hereto.]
           -------------------

          [Insured Payments:  as defined in the Policy and any payments made by
           ----------------
the Insurer under the [Swap Insurance Policy].]

          [Insurer:  as defined in the Recitals hereto.]
           -------

          [Insurer Default:  the failure by the Insurer to make a payment
           ---------------
required under the Policy in accordance with the terms thereof.]

          [Insurer Premium:  any monthly premium fees due and payable to the
           ---------------
Insurer pursuant to the Insurance Agreement.]

          [Insurer Secured Obligations: all amounts and obligations which may at
           ---------------------------
any time be owed to or on behalf of the Insurer (or any agents, accountants or
attorneys for the Insurer) under this Indenture, the Insurance Agreement or any
other Transaction Document.]

          Interest Accrual Period:  means, with respect to the Class [A-3b]
          -----------------------
Notes, the period beginning on, and including, ________, 200 and ending on, but
excluding, the first Payment Date and each subsequent period beginning on, and
including, the last day of the Preceding Interest Accrual Period and ending on,
but excluding, the next following Interest Accrual Period.

          Interest Payments:  as defined in Section 2.01(c).
          -----------------

          IOS Capital:  IOS Capital, Inc., a Delaware corporation.
          -----------

          Issuance Date:  ________, ____.
          -------------

          Issuer:  the Person named as the "Issuer" in the first paragraph of
          ------
this instrument.

          Issuer Order or Issuer Request:  a written order or request delivered
          ------------------------------
to the Trustee and signed in the name of the Issuer by an Authorized Officer.

          Issuer Secured Parties:  each of the Trustee, in respect of the
          ----------------------
Trustee Secured Obligations, and the Insurer, in respect of the Insurer Secured
Obligations.

          [Late Payment Rate:  as defined in the Policy.]
           -----------------

                                      12
<PAGE>

          Lease:  collectively, (i) each lease agreement, conditional sale
          -----
contract and other agreement creating a contractual obligations to which the
Originator is a party, to the extent that such lease agreement, conditional sale
contract or other agreement is described in Exhibit A to the Assignment and
Servicing Agreement (as such Exhibit A may be amended from time to time in
accordance with the Assignment and Servicing Agreement), including, without
limitations, each Additional Lease and Substitute Lease; (ii) each schedule or
supplement to each such lease agreement, conditional sale contract or other
agreement (and each master lease agreement insofar as it relates to any such
schedule or supplement); and (iii) any and all amendments or modifications from
time to time to each such lease agreement, conditional sale contract or other
agreement, or to any schedule or supplement, in accordance with the Assignment
and Servicing Agreement.

          Lease Delinquency Payment:  any payment made with respect to a Lease
          -------------------------
in an amount equal to all or part of any specific Lease Payment due with respect
to such Lease (a) by the Servicer pursuant to Section 5.01 of the Assignment and
Servicing Agreement, (b) by a transfer from the Reserve Account pursuant to
Section 3.04, or (c) by the Issuer in its sole discretion.

          Lease Guaranty:  with respect to any Lease, any guaranty of payment or
          --------------
performance of the whole or any part of the liabilities or obligations of the
Lessee under such Lease.

          Lease Payment:  each fixed  periodic rental payment payable by a
          -------------
Lessee under a Lease.  Casualty Payments, Retainable Deposits, Termination
Payments, prepayments of rent required pursuant to the terms of a Lease,
payments becoming due before the Cut-Off Date and supplemental or additional
payments required by the terms of a Lease with respect to taxes, insurance,
maintenance (including, without limitation, any Maintenance Charges), security
deposits or other specific charges (including, without limitation, any Excess
Copy Charges) shall not be Lease Payments hereunder and, in calculating the
Discounted Present Value of the Leases and the Discounted Present Value of the
Performing Leases, the amount thereof shall not be included.

          Lease Purchase Amount:  at any date of determination with respect to
          ---------------------
any Lease, means the sum of (i) the Discounted Present Value of the Lease as of
the beginning of the Due Period relating to such date of determination (plus any
amounts previously due and unpaid) and (ii) the product of (x) the amount
described in the foregoing clause (i) and (y) one-twelfth of the Discount Rate.

          Lessee:  with respect to any Lease, the lessee thereunder.
          ------

          LIBOR:  the London interbank offered rate for one-month Eurodollar
          -----
deposits appearing on the Telerate Screen Page 3750.

          LIBOR Business Day: any day other than (i) a Saturday or a Sunday or
          ------------------
(ii) a day on which banking institutions in the State of New York or in the city
of London, England are required or authorized by law to be closed.

          Lien:  as defined in Section 14 of the Assignment and Servicing
          ----
Agreement.

                                      13
<PAGE>

          Maintenance Charges:  with respect to any Lease, the amount owing by
          -------------------
the Lessee under the terms of the related Lease in respect of maintenance
services being provided in connection therewith.

          Maturity:  with respect to any installment of principal of or interest
          --------
on any Note, the date on which such installment is due and payable as therein or
herein provided, whether at the Stated Maturity, by declaration of acceleration,
or otherwise.

          Moody's:  Moody's Investors Service, Inc. and any successors thereto.
          -------

          Non-Performing Lease:  as of any Determination Date, any Lease with
          --------------------
respect to which at any time following the Cut-Off Date or related Transfer
Date, as the case may be, either (a) a Lease Payment, or any portion thereof,
was 123 or more days overdue as of the last day of the Due Period with respect
to such Determination Date, unless on or before such Determination Date such
Lease Payment (or portion thereof) has been paid or (b) the Servicer has
accelerated the remaining payments or (c) the Servicer has determined such Lease
to be uncollectible in accordance with the Servicer's customary practices prior
to the last day of the Due Period with respect to such Determination Date.

          Noteholder:  at any time, any Person in whose name a Note is
          ----------
registered in the Note Register.

          Note Interest Rate:  the Class [A-1] Note Interest Rate, the Class [A-
          ------------------
2] Note Interest Rate, the Class [A-3a] Note Interest Rate, the Class [A-3b]
Note Interest Rate or the Class [A-4] Note Interest Rate, as the case may be.

          Note Owner:  the beneficial owner of a Note issued hereunder.
          ----------

          Note Register:  as defined in Section 2.03(a).
          -------------

          Note Registrar:  as defined in Section 2.03(a)
          --------------

          Notes:  any notes authorized by, and authenticated and delivered
          -----
under, this Indenture.

          [Notice of Claim:  as defined in the Policy.]
           ---------------

          Officers' Certificate:  with respect to the Issuer, the Seller or the
          ---------------------
Servicer, a certificate signed by the Chairman, the President or a Vice
President of the Issuer, the Seller or the Servicer, as the case may be, and by
another Vice President, the Treasurer, and Assistant Treasurer, the Secretary,
or an Assistant Secretary of the Issuer, the Seller or the Servicer, as the case
may be, who is not the same Person as the other officer signing such
certificate.

          Opinion of Counsel:  a written opinion, which shall be satisfactory in
          ------------------
form and substance to the Trustee [and the Insurer,] of counsel who may, except
as otherwise expressly provided in this Indenture, be inside or outside counsel
for the Issuer and who shall be satisfactory to the Trustee and the Insurer.

                                      14
<PAGE>

          Other Lease Payments:  all payments on or in respect of Leases which
          --------------------
are not Lease Payments, Lease Delinquency Payments, Casualty Payments,
Retainable Deposits or Termination Payments, including Maintenance Charges and
Excess Copy Charges.

          Outstanding:  with respect to the Notes, as of any date of
          -----------
determination, all Notes theretofore authenticated and delivered under this
Indenture except:

          (a) Notes theretofore cancelled by the Trustee or delivered to the
     Trustee for cancellation;

          (b) Notes or portions thereof for whose payment money in the necessary
     amount has been theretofore irrevocably deposited with the Trustee in trust
     for the holders of such Notes; and

          (c) Notes in exchange for or in lieu of which other Notes have been
     authenticated and delivered pursuant to this Indenture unless proof
     satisfactory to the Trustee is presented that any such Notes are held by a
     Person in whose hands the Note is a valid obligation;

[provided, however, that Notes which have been paid with proceeds of the Policy
 --------  -------
shall continue to remain Outstanding for purposes of this Indenture until the
Insurer has been paid as subrogee hereunder or reimbursed as to such payment
pursuant to the Insurance Agreement as evidenced by a written notice from the
Insurer delivered to the Trustee, and the Insurer shall be deemed to be the
Holder thereof to the extent of any payments thereon made by the Insurer and,]
provided further, that in determining whether the holders of the requisite
-------- -------
percentage of the Outstanding Principal Amount of the Notes have given any
request, demand, authorization, direction, notice, consent, or waiver hereunder,
Notes owned by the Issuer or any Affiliate of the Issuer shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent, or waiver, only Notes that a
Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Notes so owned by the Issuer or any Affiliate of the Issuer that
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Notes and that the pledgee is not the Issuer, any other
obligor upon the Notes, IOS Capital, the Seller or any Affiliate of any of the
foregoing Persons.

          Outstanding Class A Principal Amount:  The aggregate principal amount
          ------------------------------------
of the Class A Notes Outstanding at any time.

          Outstanding Class [A-1] Principal Amount:  the aggregate principal
          ----------------------------------------
amount of the Class [A-1] Notes Outstanding at any time.

          Outstanding Class [A-2] Principal Amount:  the aggregate principal
          ----------------------------------------
amount of the Class [A-2] Notes Outstanding at any time.

          Outstanding Class [A-3a] Principal Amount:  the aggregate principal
          -----------------------------------------
amount of the Class [A-3a] Notes Outstanding at any time.

                                      15
<PAGE>

          Outstanding Class [A-3b] Principal Amount:  the aggregate principal
          -----------------------------------------
amount of the Class [A-3b] Notes Outstanding at any time.

          Outstanding Class [A-4] Principal Amount:  the aggregate principal
          ----------------------------------------
amount of the Class [A-4] Notes Outstanding at any time.

          Outstanding Principal Amount:  the aggregate unpaid principal amount
          ----------------------------
of the Notes Outstanding at any time.

          Overcollateralization Balance:  with respect to each Payment Date is
          -----------------------------
an amount equal to the excess, if any, of (a) the Discounted Present Value of
Performing Leases as of the related Determination Date over (b) the Outstanding
Principal Amount of the Notes as of such Payment Date after giving effect to all
principal payments made on that day.

          Overcollateralization Floor:  with respect to any Payment Date, (a)
          ---------------------------
___% of the Discounted Present Value of the Leases as of the Cut-Off Date, plus
(b) the Cumulative  Loss Amount with respect to such Payment Date, minus (c) the
amount on deposit in the Reserve Account (after giving effect to withdrawals to
be made on account of such Payment Date).

          Paying Agent:  each agent of the Issuer appointed for the purpose of
          ------------
making payments on the Notes, including the Trustee.

          Payment Date:  the 15th day of each month (or the next Business Day
          ------------
thereafter if such day is not a Business Day), commencing on the Initial Payment
Date, and ending on the latest Stated Maturity.

          Person:  any individual, corporation, partnership, joint venture,
          ------
association, limited liability company, joint stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.

          [Policy:  the financial guaranty insurance policy No. ________ with
           ------
respect to the Notes, dated ________, ____, including any endorsements thereto,
issued by the Insurer to the Trustee for the benefit of the Noteholders.]

          [Preference Amounts:  as defined in the Policy.]
           ------------------

          Principal Payments:  as defined in Section 2.01(b).
          ------------------

          Preference Claim:  as defined in Section 4.02(b).
          ----------------

          Rating Agency:  each of S&P and Moody's.
          -------------

          Record Date:  with respect to any Payment Date, the last day of the
          -----------
calendar month immediately preceding such Payment Date.  The Record Date will be
the Issuance Date with respect to the first Payment Date.

                                      16
<PAGE>

          Reference Bank Rate:  will be determined on the basis of the rates at
          -------------------
which deposits in U.S. Dollars are offered by the reference banks (which shall
be three major banks that are engaged in transactions in the London interbank
market, selected by the Trustee) as of 11:00 A.M., London time, on the day that
is two LIBOR Business Days prior to the immediately preceding Payment Date to
prime banks in the London interbank market for a period of one month in amounts
approximately equal to the principal amount of the Class [A-3b] Notes then
outstanding.  The Trustee will request the principal London office of each of
the reference banks to provide a quotation of its rate.  If at least two such
quotations are provided, the rate will be the arithmetic mean of the quotations.
If on such date fewer than two quotations are provided as requested, the rate
will be the arithmetic mean of the rates quoted by one or more major banks in
New York City, selected by the Trustee, as of 11:00 A.M., New York City time, on
such date for loans in U.S. Dollars to leading European banks for a period of
one month in amounts approximately equal to the principal amount of the Class
[A-3b] Notes then outstanding.  If no such quotations can be obtained, the rate
will be LIBOR for the prior Payment Date.

          Registration Statement:  shall mean the Registration Statement (File
          ----------------------
No. 333-________), as amended and supplemented from time to time, relating to
the offering from time to time of up to $2,500,000,000 aggregate principal
amount of the Issuer's Lease-Backed Notes, which contemplates that the Issuer
will issue subsequent series of Lease-Backed Notes from time to time secured by
other asset pools.

          [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 hereof, 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 or in the case of Insured Payments made under
the [Swap Insurance Policy], 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.]

          [Renewal:  the renewal of a Lease on a month-to-month or quarter-to-
           -------
quarter basis as provided for in the related Lease.]

          [Renewal Payment:  any of the monthly payments (or, in the case of
           ---------------
quarterly Leases, the quarterly payments) received from a Lessee in connection
with a Renewal.]

          [Renewal Account:  the account by that name established and maintained
           ---------------
by the Trustee pursuant to Section 3.01.]

          [Renewal Account Deposit Period:  the period from the Payment Date on
           ------------------------------
which a Renewal Trigger Event has occurred until the Payment Date succeeding
such Payment Date on which no Renewal Trigger Event exists.]

          [Renewal Trigger Event:  will occur when the Renewal Trigger Ratio is
           ---------------------

                                      17
<PAGE>

less than 20%.]

          [Renewal Trigger Ratio:  with respect to any Payment Date, an amount
           ---------------------
equal to  (i) the aggregate number of Leases of which the obligors thereunder
have elected to extend the term of such Leases upon the expiration thereof
during the three preceding Due Periods, divided by (ii) the aggregate number of
Leases which have reached their stated expiration date during the three
preceding Due Periods.]

          Required Deposit Date:  as defined in Section 3.03(a).
          ---------------------

          Required Payments:  as defined in Section 3.04(b).
          -----------------

          Required Reserve Amount: as of any time, the lesser of (a) ______% of
          -----------------------
the initial Discounted Present Value of the Leases as of the Cut-Off Date and
(b) the then Outstanding Principal Amount of the Notes.

          Reserve Account:  the account by that name established and maintained
          ---------------
by the Trustee pursuant to Section 3.01.

          Responsible Officer:  with respect to the Trustee, any officer
          -------------------
assigned to the Corporate Trust Office of the Trustee, including any managing
director, vice president, assistant vice president, assistant treasurer,
assistant secretary or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
having direct responsibility for the administration of this Indenture, and also,
with respect to a particular matter, any other officer, to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.

          Retainable Deposits:  any security or other similar deposit which the
          -------------------
Servicer has determined in accordance with its customary servicing practices is
not refundable to the related Lessee.

          S&P:  Standard & Poor's Rating Services, a division of The McGraw-Hill
          ---
Companies Inc. and any successor thereto.

          Securities Act:  the Securities Act of 1933, as amended.
          --------------

          Security Deposit Account:  the account by that name established and
          ------------------------
maintained by the Trustee pursuant to Section 3.01.

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

          Servicer:  IOS Capital and any successor Servicer appointed pursuant
          --------
to the terms hereof and of the Assignment and Servicing Agreement and, to the
extent that it at any time is performing the functions of the Servicer, the
Trustee, subject to the terms of Section 5.01 hereof.

          Servicer Advance:  as defined in Section 5.01 of the Assignment and
          ----------------
Servicing Agreement.

                                      18
<PAGE>

          Servicer Event of Default:  as defined in Section 10.01 of the
          -------------------------
Assignment and Servicing Agreement.

          Servicer Order:  a written order or request delivered to the Trustee
          --------------
and signed in the name of the Servicer by an Authorized Officer.

          Servicing Fee:  the Servicing Fee payable pursuant to the Assignment
          -------------
and Servicing Agreement.

          Servicing Report:  as defined in Section 6.01(b) of the Assignment and
          ----------------
Servicing Agreement.

          Stated Maturity: The stated maturity date with respect to the Class
          ---------------
[A-1] Notes is the Payment Date in _____ ______ (the "Class [A-1] Stated
Maturity Date"), the stated maturity date with respect to the Class [A-2] Notes
is the Payment Date in ______ ______ (the "Class [A-2] Stated Maturity Date"),
the stated maturity date with respect to the Class [A-3a] Notes is the Payment
Date in _______ ______ (the "Class [A-3a] Stated Maturity Date"), the stated
maturity date with respect to the Class [A-3b] Notes is the Payment Date in
_____ _______ (the "Class [A-3b] Stated Maturity Date")and the stated maturity
date with respect to the Class [A-4] Notes is the Payment Date in _______ _____
(the "Class [A-4] Stated Maturity Date" and, together with the Class [A-1]
Stated Maturity Date, the Class [A-2] Stated Maturity Date, the Class [A-3a]
Stated Maturity Date, the Class [A-3b] Stated Maturity Date, the "Stated
Maturity Dates").

          Substitute Lease:  as defined in Section 11.01(a) of the Assignment
          ----------------
and Servicing Agreement.

          [Swap]:  [that certain interest rate swap transaction governed by the
          ------
Swap Documents].

          [Swap Documents]:  [The ISDA Master Agreement dated as of ________,
          ----------------
2000 between the Issuer and the [Swap Counterparty], including the schedule
thereto and confirmations thereunder, as the same may be amended from time to
time as permitted therein and herein, in each case to the extent relating to the
Swap].

          [Swap Insurance Policy]:  [the financial guaranty insurance policy No.
          -----------------------
________ dated ________, 2001 with respect to the Issuer's obligations under the
Swap Documents, including any endorsements thereto, issued by the Insurer to the
[Counterparty].

          Telerate Screen Page 3750: means the display designated as page 3750
          -------------------------
on the Telerate Service (or such other page as may replace page 3750 on that
service for the purpose of displaying London interbank offered rates of major
banks).

          Termination Payment:  a payment payable by a Lessee under a Lease upon
          -------------------
the early termination of such Lease (but not on account of a casualty or a Lease
default) which may be agreed upon by the Servicer, acting in the name of the
Issuer, and the Lessee in accordance with the provisions of Section 5.02 of the
Assignment and Servicing Agreement.

                                      19
<PAGE>

          Transaction Accounts:  the Collection Account, the Reserve Account and
          --------------------
the Security Deposit Account.

          Transaction Documents:  this Indenture, the Assignment and Servicing
          ---------------------
Agreement [and the Insurance Agreement.]

          Transaction Payment Amount:  for each Required Deposit Date, the
          --------------------------
amount of all Lease Payments [(including Renewal Payments)], Lease Delinquency
Payments, Lease Purchase Amounts, recoveries relating to Non-Performing Leases,
Casualty Payments, Retainable Deposits, Termination Payments and other payments
on or in respect of a Lease received by the Servicer required to be deposited in
the Collection Account pursuant to Section 3.03(a) and required to be reported
by the Servicer for such Required Deposit Date in accordance with Section
6.01(c) of the Assignment and Servicing Agreement.

          Transfer Date:  With respect to any Substitute Lease or Additional
          -------------
Lease, the date of transfer thereof to the Issuer pursuant to the Assignment and
Servicing Agreement.

          Trustee:  the Person named as the "Trustee" in the first paragraph of
          -------
this instrument until a successor Person shall have become the Trustee pursuant
to the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean such successor Person; provided, that the provisions of Section 8.07 and
                            --------
Section 8.10, as applicable to any Person at any time serving as Trustee
hereunder, shall survive the termination of such Person's status as Trustee
hereunder and the succession of any other Person to such status.

          Trustee Secured Obligations:  all amounts and obligations which the
          ---------------------------
Issuer or the Servicer, as the case may be, may at any time owe to or on behalf
of itself or of the Trustee for the benefit of the Noteholders under this
Indenture or the Notes.

          Trust Indenture Act:  the Trust Indenture Act of 1939 as in effect on
          -------------------
the date on which this Indenture is qualified under the Trust Indenture Act,
except as provided in Section 10.06 or 12.01 hereof.

          Underwriting Agreement:  the Underwriting Agreement, among the Issuer,
          ----------------------
IOS Capital and the several underwriters named therein relating to the issuance
of the Notes.

          Uniform Commercial Code:  with respect to a particular jurisdiction,
          -----------------------
the Uniform Commercial Code, as in effect from time to time in such
jurisdiction, or any successor statute thereto.

          Warranty Lease:  a Lease subject to purchase by IOS Capital as a
          --------------
result of a breach of a representation or warranty in accordance with the
provisions of Section 5.04 of the Assignment and Servicing Agreement.

                                      20
<PAGE>

          SECTION 1.02.  Compliance Certificates and Opinions.
                         ------------------------------------

          Upon any written application or request (or oral application with
prompt written or telecopied confirmation) by the Issuer to the Trustee to take
any action under any provision of this Indenture, other than any request that
(a) the Trustee authenticate the Notes specified in such request, (b) the
Trustee invest moneys in any of the Transaction Accounts pursuant to the written
directions specified in such request, or (c) the Trustee pay moneys due and
payable to the Issuer hereunder to the Issuer's assignee specified in such
request, the Trustee shall require the Issuer to furnish to the Trustee and, so
long as no Insurer Default has occurred and is continuing, the Insurer, an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and that the request otherwise is in accordance with the terms of the Indenture,
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such requested action as to which other evidence of satisfaction of the
conditions precedent thereto is specifically required by any provision of this
Indenture, no additional certificate or opinion need be furnished.

          SECTION 1.03.  Form of Documents Delivered to Trustee and Insurer.
                         --------------------------------------------------

          In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

          Any certificate or opinion of an officer of the Issuer delivered to
the Trustee [or the Insurer] may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous.  Any such
Officer's Certificate or opinion and any Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Issuer as to such factual
matters unless such officer or counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with
respect to such matters are erroneous.  Any Opinion of Counsel may be based on
the written opinion of other counsel, in which event such Opinion of Counsel
shall be accompanied by a copy of such other counsel's opinion and shall include
a statement to the effect that such counsel believes that such counsel and the
Trustee [and the Insurer] may reasonably rely upon the opinion of such other
counsel.

          Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

                                      21
<PAGE>

          Wherever in this Indenture, in connection with any application or
certificate or report to the Trustee [or the Insurer], it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report.  The foregoing shall not, however, be
construed to affect the Trustee's or the Insurer's right to rely upon the truth
and accuracy of any statement or opinion contained in any such document as
provided in Section 8.01(a)(ii).

          Whenever in this Indenture it is provided that the absence of the
occurrence and continuation of a Default or Event of Default or Servicer Event
of Default is a condition precedent to the taking of any action by the Trustee
or the Insurer at the request or direction of the Issuer, then, notwithstanding
that the satisfaction of such condition is a condition precedent to the Issuer's
right to make such request or direction, the Trustee [and the Insurer] shall be
protected in acting in accordance with such request or direction if it does not
have knowledge of the occurrence and continuation of such Default or Event of
Default or Servicer Event of Default.  For all purposes of this Indenture,
neither the Trustee [nor the Insurer] shall be deemed to have knowledge of any
Insurer Default, Servicer Event of Default, Default or Event of Default nor
shall the Trustee [or the Insurer] have any duty to monitor or investigate to
determine whether such default has occurred (other than an Event of Default of
the kind described in Section 7.01(a) or 7.01(b)) unless, in the case of the
Trustee, a Responsible Officer of the Trustee shall have actual knowledge
thereof or shall have been notified in writing thereof by the Issuer, the
Servicer, [the Insurer] or any Noteholder.

          SECTION 1.04.  Acts of Noteholders, etc.
                         ------------------------

          (a)  Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Issuer [and/or the Insurer].  Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Noteholders signing such instrument or instruments.  Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 8.01)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Section 1.04.

          (b)  The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof.  Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall

                                      22
<PAGE>

also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.

          (c)  Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the holder of any Note shall bind every future holder of
the same Note and the holder of every Note issued upon the registration of
transfer thereof or in exchange therefore or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Issuer in
reliance thereon, whether or not notation of such action is made upon such Note.

          (d)  By accepting the Notes issued pursuant to this Indenture, each
Noteholder irrevocably appoints the Trustee hereunder as the special attorney-
in-fact for such Noteholder vested with full power on behalf of such Noteholder
to effect and enforce the rights of such Noteholder and the revisions pursuant
hereto for the benefit of such Noteholder; provided that nothing contained in
                                           --------
this Section 1.04(d) shall be deemed to confer upon the Trustee any duty or
power to vote on behalf of the Noteholders with respect to any matter on which
the Noteholders have a right to vote pursuant to the terms of this Indenture.

          SECTION 1.05.  Notices, etc., to Trustee, Servicer, [Issuer],
                         --------------------------------------------
Insurer and Rating Agencies.
---------------------------

          Any request, demand, authorization, direction, notice, consent,
waiver, Act of Noteholders, or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with, the Trustee,
the Issuer, [the Insurer] or the Servicer shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid or certified mail return receipt requested, or sent
by private courier or confirmed telecopy.  Unless otherwise specifically
provided herein, no such request, demand, authorization, direction, notice,
consent, waiver, Act of Noteholders or other document shall be effective until
received and any provision hereof requiring the making, giving, furnishing, or
filing of the same on any date shall be interpreted as requiring the same to be
sent or delivered in such fashion that it will be received on such date.  Any
such request, demand, authorization, direction, notice, consent, waiver, Act of
Noteholders, or other document shall be sent or delivered to the following
addresses:

         (a)   if to the Trustee, at the Corporate Trust Office (Number for
telecopy (___) ___-____), or at any other address previously furnished in
writing to the Issuer, the Insurer and the Servicer by the Trustee; or

         (b)   if to the Issuer, at IKON RECEIVABLES FUNDING, LLC, 1738 Bass
Road, P.O. Box 9115, Macon, Georgia 31208, Attention: Russell Slack (Number for
telecopy: (912) 471-2375), with a copy to, General Counsel, IKON Office
Solutions, Inc., 70 Valley Stream Parkway, Malvern, PA 19355, or at any other
address previously furnished in writing to the Trustee, the Insurer and the
Servicer by the Issuer; or

                                      23
<PAGE>

          (c)  if to the Servicer, at IOS Capital, Inc., 1738 Bass Road, P.O.
Box 9115, Macon, Georgia, 31208, Attention: Harry G. Kozee, Vice President -
Finance, with a copy to the General Counsel, (Number for telecopy: (912) 471-
2375), with a copy to, General Counsel, IKON Office Solutions, Inc., 70 Valley
Stream Parkway, Malvern, PA 19355, or at any other address previously furnished
in writing to the Trustee, the Insurer and the Servicer; or

          (d)  if to the Rating Agencies: to Standard and Poor's, 55 Water
Street, New York, New York 10041, Attention: Structured Finance Ratings, and to
Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007,
Attention: ABS Monitoring Department; or

          (e)  [if to the Insurer: to ___________________________________
_______________________________________________________________________
____________________________________].

          SECTION 1.06.  Notice to Noteholders; Waiver.
                         -----------------------------

          (a)  Where this Indenture provides for notice to Noteholders of any
event, or the mailing of any report to Noteholders, such notice or report shall
be sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid or certified mail return receipt
requested, or sent by private courier or confirmed telecopy to each Noteholder
affected by such event or to whom such report is required to be mailed, at its
address as it appears in the Note Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice or
the mailing of such report.  In any case where a notice or report to Noteholders
is mailed, neither the failure to mail such notice or report, nor any defect in
any notice or report so mailed, to any particular Noteholder shall affect the
sufficiency of such notice or report with respect to other Noteholders.  Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice.  Waivers of
notice by Noteholders shall be filed with the Trustee, but such filing shall not
be a condition precedent to the validity of any action taken in reliance upon
such waiver.

          (b)  In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to mail or send notice to
Noteholders, in accordance with Section 1.06(a), of any event or any report to
Noteholders when such notice or report is required to be delivered pursuant to
any provision of this Indenture, then such notification or delivery as shall be
made with the approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder.

          SECTION 1.07.  Effect of Headings and Table of Contents.
                         ----------------------------------------

          The Article and Section headings herein and in the Table of Contents
are for convenience only and shall not affect the construction hereof.

                                      24
<PAGE>

          SECTION 1.08.  Successors and Assigns.
                         ----------------------

          All covenants and agreements in this Indenture by the Issuer or the
Trustee shall bind its respective successors and permitted assigns, whether so
expressed or not.

          SECTION 1.09.  Benefits of Indenture.
                         ---------------------

          [The Insurer and its successors and assigns shall be a third-party
beneficiary to the provisions of this Indenture, and shall be entitled to rely
upon and directly to enforce the provisions of this Indenture so long as no
Insurer Default has occurred and is continuing.] Nothing in this Indenture or in
the Notes, express or implied, shall give to any other Person, other than the
parties hereto and their successors hereunder and the Noteholders, and any other
party secured hereunder, and any other Person with an ownership interest in any
part of the Asset Pool, any benefit or any legal or equitable right, remedy or
claim under this Indenture. [The Insurer may disclaim any of its rights and
powers under this Indenture, but not its duties and obligations under the Policy
or the [Swap Insurance Policy], upon delivery of a written notice to the
Trustee.]

          SECTION 1.10.  Recording of Indenture.
                         ----------------------

          If this Indenture is subject to recording in any appropriate public
recording offices, such recording is to be effected by the Issuer and at its
expense accompanied by an Opinion of Counsel (which may be counsel to the
Trustee or any other counsel reasonably acceptable to the Trustee and the
Insurer) to the effect that such recording is necessary either for the
protection of the Noteholders or any other Person secured hereunder or for the
enforcement of any right or remedy granted to the Trustee under this Indenture.

          SECTION 1.11.  GOVERNING LAW.
                         -------------

          THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. THIS INDENTURE IS SUBJECT TO
THE TRUST INDENTURE ACT OF 1939, AS AMENDED, AND SHALL BE GOVERNED THEREBY AND
CONSTRUED IN ACCORDANCE THEREWITH.

          SECTION 1.12.  Legal Holidays.
                         --------------

          In any case where any Payment Date or the Stated Maturity or any other
date on which principal of or interest on any Note is proposed to be paid shall
not be a Business Day, then (notwithstanding any other provision of this
Indenture or of the Notes) such payment need not be made on such date, but may
be made on the next succeeding Business Day with the same force and effect as if
made on such Payment Date, Stated Maturity, or other date on which principal of
or interest on any Note is proposed to be paid; provided that no interest shall
                                                --------
accrue for the period from and after such Payment Date, Stated Maturity, or any
other date on which principal of or interest on any Note is proposed to be paid,
as the case may be, until such next succeeding Business Day.

                                      25
<PAGE>

          SECTION 1.13.  Execution in Counterparts.
                         -------------------------

          This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

          SECTION 1.14.  Inspection.
                         ----------

          The Issuer agrees that, on reasonable prior notice, it will permit the
representatives of the Trustee or the Insurer or any Noteholder holding Notes,
or a beneficial interest therein, evidencing at least 25% of the Outstanding
Principal Amount of the Notes, during the Issuer's normal business hours, to
examine all of the books of account, records, reports and other papers of the
Issuer, to make copies thereof and extracts therefrom, to cause such books to be
audited by independent accountants selected by the Issuer and reasonably
acceptable to the Trustee and the Insurer or such Noteholder, as the case may
be, and to discuss the Issuer's affairs, finances and accounts with its
officers, employees and independent accountants (and by this provision the
Issuer hereby authorizes its accountants to discuss with such representatives
such affairs, finances and accounts), all at such reasonable times and as often
as may be reasonably requested for the purpose of reviewing or evaluating the
financial condition or affairs of the Issuer or the performance of and
compliance with the covenants and undertakings of the Issuer in this Indenture,
the Assignment and Servicing Agreement or any of the other documents referred to
herein or therein. Any expense incident to the exercise by the Trustee or the
Insurer at any time or any Noteholder during the continuance of any Default or
Event of Default, of any right under this Section 1.14 shall be borne by the
Issuer.

          SECTION 1.15.  Survival of Representations and Warranties.
                         ------------------------------------------

          The representations, warranties and certifications of the Issuer made
in this Indenture or in any certificate or other writing delivered by the Issuer
pursuant hereto shall survive the authentication and delivery of the Notes
hereunder.

                                  ARTICLE II

                                   THE NOTES

          SECTION 2.01.  General Provisions; Optional Redemption by Issuer.
                         -------------------------------------------------

          (a)   The Notes shall consist of $__________ principal amount of Class
[A-1] Notes, $__________ principal amount of Class [A-2] Notes, $__________
principal amount of Class [A-3a] Notes, $__________ principal amount of Class
[A-3b] Notes, $__________ principal amount of Class [A-4] Notes and the forms
thereof and of the Trustee's certificate of authentication shall be in
substantially the forms set forth in Exhibit A hereto, with such appropriate
insertions, omissions, substitutions, and other variations as are required or
permitted by this Indenture.

          The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $__________ of Notes, except for
Notes

                                      26
<PAGE>

authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 2.03, 2.04, or 10.05. The
Notes shall be issuable only in registered form and only in minimum
denominations of at least $1,000; provided that the foregoing shall not restrict
                                  --------
or prevent the transfer in accordance with Section 2.03 of any Note having a
remaining Outstanding Principal Amount of other than an integral multiple of
$1,000, or the issuance of a single Note of each Class, with a denomination less
than $1,000.

          (b)  For each Payment Date, payments of principal (the "Principal
Payments") on the Notes will be made in accordance with Sections 3.03(b), or
7.06, as applicable.  Except as otherwise provided in Section 7.02, no part of
the principal of any Note shall be paid prior to the Payment Date on which such
principal is due in accordance with the preceding provisions of this Section
2.01(b), except that the Issuer may redeem the Notes in their entirety
(including any unpaid interest due), without premium, as of any Payment Date on
which the Discounted Present Value of the Performing Leases is less than or
equal to ten percent (10%) of the aggregate Discounted Present Value of the
Leases as of the Cut-Off Date (after giving effect to all Principal Payments on
such Payment Date).  The Issuer will give written notice of any such redemption
to the Trustee and the Trustee shall give written notice to the Noteholders at
least 30 days before the Payment Date fixed for such prepayment by certified
mail return receipt requested, hand delivery or overnight courier.  Notice of
such prepayment having been so given, the remaining unpaid principal as of the
Payment Date fixed for prepayment together with all interest accrued and unpaid
to such Payment Date, shall become due and payable on such Payment Date.

          (c)  For each Payment Date, the interest due and payable (the
"Interest Payments") with respect to the Class [A-1] Notes, Class [A-2] Notes,
Class [A-3a] Notes, Class [A-3b] Notes and Class [A-4] Notes will be the
interest that has accrued on the respective Notes since the last Payment Date
or, in the case of the first Payment Date, since the Issuance Date, at the Class
[A-1] Note Interest Rate, Class [A-2] Note Interest Rate, Class [A-3a] Note
Interest Rate, Class [A-3b] Note Interest Rate and Class [A-4] Note Interest
Rate, respectively, applied to the then Outstanding Principal Amounts of the
Class [A-1] Notes, Class [A-2] Notes, Class [A-3a] Notes, Class [A-3b] Notes and
Class [A-4] Notes, respectively, on the preceding Payment Date. With respect to
the Class [A-1] Notes and the Class [A-3b] Notes, the interest will be
calculated on the basis of a year of 360 days and the actual number of days in
the related interest accrual period. With respect to all other Notes, the
interest will be calculated on the basis of a year of 360 days comprised of
twelve 30-day months. Interest Payments will be made in accordance with Sections
3.03(b), 3.04(b) and 7.06, as applicable.

          (d)  All payments made with respect to any Note shall be made in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts and shall be applied first
to the interest then due and payable on such Notes, then to the principal
thereof, and finally to premium, if any.

          (e)  All Class [A-1] Notes issued under this Indenture shall be in all
respects equally and ratably entitled to the benefits hereof without preference,
priority or distinction on account of the actual time or times of authentication
and delivery, all in

                                      27
<PAGE>

accordance with the terms and provisions of this Indenture. Payments of
principal and interest on the Class [A-1] Notes shall be made pro rata among all
Outstanding Class [A-1] Notes, without preference or priority of any kind.

          (f)  All Class [A-2] Notes issued under this Indenture shall be in all
respects equally and ratably entitled to the benefits hereof without preference,
priority or distinction on account of the actual time or times of authentication
and delivery, all in accordance with the terms and provisions of this Indenture.
Payments of principal and interest on the Class [A-2] Notes shall be made pro
rata among all Outstanding Class [A-2] Notes, without preference or priority of
any kind.

          (g)  All Class [A-3a] Notes and all Class [A-3b] Notes issued under
this Indenture shall be in all respects equally and ratably entitled to the
benefits hereof without preference, priority or distinction on account of the
actual time or times of authentication and delivery, all in accordance with the
terms and provisions of this Indenture. Payments of principal and interest on
the Class [A-3a] Notes and Class [A-3b] Notes shall be made pro rata among all
Outstanding Class [A-3a] Notes and Class [A-3b] Notes, without preference or
priority of any kind.

          (h)  All Class [A-4] Notes issued under this Indenture shall be in all
respects equally and ratably entitled to the benefits hereof without preference,
priority or distinction on account of the actual time or times of authentication
and delivery, all in accordance with the terms and provisions of this Indenture.
Payments of principal and interest on the Class [A-4] Notes shall be made pro
rata among all Outstanding Class [A-4] Notes, without preference or priority of
any kind.

          SECTION 2.02.  Execution, Authentication, Delivery, and Dating.
                         -----------------------------------------------

          (a)  The Notes shall be manually executed by the Issuer.

          (b)  Any Note bearing the signature of an individual who was at the
time of execution thereof a proper officer of the Issuer shall bind the Issuer,
notwithstanding that such individual ceases to hold such office prior to the
authentication and delivery of such Note or did not hold such office at the date
of such Note.

          (c)  No Note shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein,
executed by the Trustee by manual signature, and such certificate upon any Note
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder. Each Note shall be dated the date of
its authentication.

          (d)  The Notes may from time to time be executed by the Issuer and
delivered to the Trustee for authentication together with a Issuer Request to
the Trustee directing the authentication and delivery of such Notes and
thereupon the same shall be authenticated and delivered by the Trustee in
accordance with such Issuer Request.

                                      28
<PAGE>

          SECTION 2.03.  Transfer and Exchange.
                         ---------------------

          (a)   The Trustee is hereby appointed "Note Registrar" for the purpose
of registering Notes and transfers of Notes as herein provided. The Note
Registrar shall cause to be kept at the Corporate Trust Office a register (the
"Note Register") in which, subject to such reasonable regulations as the Trustee
may prescribe, the Issuer shall provide for the registration of Notes and of
transfers of Notes.

          The Trustee shall not register the transfer of any Note (other than
the transfer of a Note to the nominee of the Clearing Agency) unless the
transferee has executed and delivered to the Trustee a certification to the
effect that either (i) the transferee is not (A) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA or (b) a plan (as defined in Section 4975(e)(1) of the Internal Revenue
Code of 1986, as amended (the "Code")) that is subject to Section 4975 of the
Code (each of the foregoing, a "Benefit Plan"), and is not acting on behalf of
or investing the assets of a benefit Plan, or (ii) the transferee's acquisition
and continued holding of the Note will be covered by a U.S. Department of Labor
Prohibited Transaction Class Exemption. Each transferee of a Book-Entry Note
shall be deemed to make one of the foregoing representations.

          (b)   Subject to Section 2.03(a), upon surrender for registration of
transfer of any Note at the office designated pursuant to Section 9.02 for such
purpose, the Issuer shall execute and the Trustee upon request shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any authorized denominations and of a like
aggregate original principal amount. The Trustee shall make a notation on any
such new Note of the amount of principal, if any, that has been paid on such
Note.

          (c)   All Notes issued upon any registration of transfer or exchange
of Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.

          (d)   Every Note presented or surrendered for registration of transfer
or for exchange shall (if so required by the Issuer or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed, by the holder thereof
or his attorney duly authorized in writing.

          (e)   No service charge shall be made for any registration of transfer
or exchange of Notes, but the Issuer or the Trustee may require payment by the
transferor of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any registration of transfer or exchange
of Notes, other than exchanges pursuant to Section 10.05 not involving any
transfer.

          SECTION 2.04.  Mutilated, Destroyed, Lost and Stolen Notes.
                         -------------------------------------------

          (a)   If any mutilated Note is surrendered to the Trustee, the Issuer
shall execute and the Trustee shall authenticate and deliver in exchange
therefore a

                                      29
<PAGE>

replacement Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

          (b)   If (i) there shall be delivered to the Issuer and the Trustee
evidence to their satisfaction of the destruction, loss or theft of any Note and
(ii) there is delivered to the Issuer, the Trustee and (unless an Insurer
Default has occurred and is continuing) the Insurer such security or indemnity
as may be required by them to save each of them and any agent of either of them
harmless, then, in the absence of actual notice to the Issuer or the Trustee
that such Note has been acquired by a bona fide purchaser, the Issuer shall
execute and upon its written request the Trustee shall authenticate and deliver,
in lieu of any such destroyed, lost or stolen Note, a replacement Note of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.

          (c)   In case the final installment of principal on any such
mutilated, destroyed, lost or stolen Note has become or will at the next Payment
Date become due and payable, the Issuer in its discretion may, instead of
issuing a replacement Note, pay such Note.

          (d)   Upon the issuance of any replacement Note under this Section,
the Issuer or the Trustee may require the payment by the Noteholder of a sum
sufficient to cover any tax or other governmental charge that may be imposed as
a result of the issuance of such replacement Note.

          (e)   Every replacement Note issued pursuant to this Section 2.04 in
lieu of any destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the destroyed,
lost or stolen Note shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Notes duly issued hereunder.

          (f)   The provisions of this Section 2.04 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.

          SECTION 2.05.  Book-Entry Registration.
                         -----------------------

          Each of the Class [A-1] Notes, Class [A-2] Notes, Class [A-3a] Notes,
Class [A-3b] Notes and Class [A-4] Notes, upon original issuance, shall be
issued in the form attached as Exhibit A and delivered to The Depository Trust
Company, the initial Clearing Agency, by, or on behalf of, the Issuer. Each of
the Class [A-1] Notes, Class [A-2] Notes, Class [A-3a] Notes, Class [A-3b] Notes
and Class [A-4] Notes shall initially be registered on the Note Register in the
name of Cede & Co., the nominee of The Depository Trust Company, as the initial
Clearing Agency, and no Class [A-1] Note Owner, Class [A-2] Note Owner, Class
[A-3a] Note Owner, Class [A-3b] Note Owner or Class [A-4] Note Owner will
receive a definitive note representing such Note Owner's interest, except as
provided in Section 2.07. Unless and until Definitive Class [A-1] Notes,
Definitive Class [A-2] Notes, Definitive Class [A-3a] Notes, Definitive Class
[A-3b] Notes and/or Definitive Class [A-4] Notes ("Definitive Notes") have been
issued to the applicable Note Owners pursuant to Section 2.07:

                                      30
<PAGE>

          (a)   the provisions of this Section 2.05 shall be in full force and
effect with respect to the Class [A-1] Notes, Class [A-2] Notes, Class [A-3a]
Notes, Class [A-3b] Notes or the Class [A-4] Notes, as the case may be;

          (b)   the Issuer, the Servicer and the Trustee, and their officers,
directors, employees and agents, may deal with the Clearing Agency and the
Clearing Agency Participants for all purposes with respect to the Class [A-1]
Notes, Class [A-2] Notes, Class [A-3a] Notes, Class [A-3b]  Notes or  Class [A-
4] Notes, as the case may be (including the making of distributions on the Class
[A-1] Notes, Class [A-2] Notes, Class [A-3a] Notes, Class [A-3b] Notes and Class
[A-4] Notes, as the case may be), as the authorized representatives of the
respective Note Owners;

          (c)   to the extent that the provisions of this Section 2.05 conflict
with any other provisions of this Indenture, the provisions of this Section 2.05
shall control; and

          (d)   the rights of the respective Note Owners shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and shall be
limited to those established by law and agreements between such respective Note
Owners and the Clearing Agency and/or the Clearing Agency Participants.
Pursuant to the Depository Agreement, unless and until Definitive Notes, are
issued pursuant to Section 2.07, the initial Clearing Agency will make book-
entry transfers among the Clearing Agency Participants and receive and transmit
distributions of principal and interest on the related Class [A-1] Notes, Class
[A-2] Notes, Class [A-3a] Notes, Class [A-3b] Notes and Class [A-4] Notes, as
the case may be, to such Clearing Agency Participants.

          For purposes of any provision of this Indenture requiring or
permitting actions with the consent of, or at the direction of, holders of Class
[A-1] Notes, Class [A-2] Notes, Class [A-3a] Notes, Class [A-3b] Notes or Class
[A-4] Notes, as the case may be, evidencing a specified percentage of the
Outstanding Principal Amount of the Class [A-1] Notes, Class [A-2] Notes, Class
[A-3a] Notes, Class [A-3b] Notes or the Class [A-4] Notes, respectively, such
direction or consent may be given by Note Owners (acting through the Clearing
Agency and the Clearing Agency Participants) owning Class [A-1] Notes, Class [A-
2] Notes, Class [A-3a] Notes, Class [A-3b] Notes or Class [A-4] Notes evidencing
the requisite percentage of the Outstanding Principal Amount of such Notes,
respectively.

          SECTION 2.06.  Notice to Clearing Agency Noteholders.
                         -------------------------------------

          Whenever notice or other communication to the Class [A-1] Noteholders,
Class [A-2] Noteholders, Class [A-3a] Noteholders, Class [A-3b] Noteholders or
Class [A-4] Noteholders is required under this Agreement, unless and until
Definitive Notes shall have been issued to the related Note Owners pursuant to
Section 2.07, the Trustee shall give all such notices and communications
specified herein to be given to such Noteholders to the applicable Clearing
Agency which shall give such notices and communications to the related Class [A-
1] Note Owners, Class [A-2] Note Owners, Class [A-3a] Note Owners, Class [A-3b]
Note Owners or Class [A-4] Note Owners in accordance with its applicable rules,
regulations and procedures.

                                      31
<PAGE>

          SECTION 2.07.  Definitive Notes.
                         ----------------

          (a)   If (a) (i) the Servicer advises the Issuer in writing that DTC
is no longer willing or able to properly discharge its responsibilities under
the Depository Agreement with respect to the Notes and (ii) the Issuer is unable
to locate a qualified successor, (b) the Servicer, at its option, advises the
Issuer in writing that it elects to terminate the book-entry system with respect
to the Notes or (c) after the occurrence of an "Event of Default" under this
Indenture or a default by the Servicer under the Assignment and Servicing
Agreement, Noteholders evidencing not less than a majority of the aggregate
unpaid Outstanding Principal Amount of the Notes advise the Issuer in writing
that the continuation of a book-entry system with respect to the Notes is no
longer in the best interests of the Note Owners, then the Issuer shall notify
the Trustee and all Note Owners through the Clearing Agency, of the occurrence
of any such event and of the availability of Definitive Notes. Upon surrender by
DTC of the Notes, accompanied by registration and transfer instructions from DTC
for registration, the Issuer shall reissue such Notes as Definitive Notes to the
Noteholders. The Issuer shall not be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Notes, as the case may be,
all references herein to obligations imposed upon or to be performed by DTC
shall be deemed to be imposed upon and performed by the Issuer, to the extent
applicable with respect to such Definitive Notes, and the Issuer shall recognize
the holders of the relevant Definitive Notes as Noteholders hereunder.

          (b)   Definitive Notes will not be eligible for clearing or settlement
through DTC, Euroclear or Clearstream.

          SECTION 2.08.  Payment of Interest and Principal; Rights Preserved.
                         ---------------------------------------------------

          (a)   Any installment of interest or principal, payable on any Note
that is punctually paid or duly provided for by the Issuer on the applicable
Payment Date shall be paid to the Person in whose name such Note was registered
at the close of business on the Record Date for such Payment Date by wire
transfer of federal funds to the account and number specified in the Note
Register on such Record Date for such Person or, if no such account or number is
so specified, then by check mailed to such Person's address as it appears in the
Note Register on such Record Date.

          (b)   All reductions in the principal amount of a Note effected by
payments of installments of principal made on any Payment Date shall be binding
upon all holders of such Note and of any Note issued upon the registration of
transfer thereof or in exchange therefore or in lieu thereof, whether or not
such payment is noted on such Note.  All payments on the Notes shall be paid
without any requirement of presentment but each holder of any Note shall be
deemed to agree, by its acceptance of the same, to surrender such Note at the
Corporate Trust Office against payment of the final installment of principal of
such Note.

                                      32
<PAGE>

          SECTION 2.09.  Persons Deemed Owners.
                         ---------------------

          Prior to due presentment of a Note for registration of transfer, the
Issuer, the Trustee, [the Insurer], and any agent of the Issuer, the Trustee [or
the Insurer] may treat the registered Noteholder as the owner of such Note for
the purpose of receiving payment of principal of and interest on such Note and
for all other purposes whatsoever, whether or not such Note be overdue, and
neither the Issuer, the Trustee, [the Insurer] nor any agent of the Issuer, the
Trustee [or the Insurer] shall be affected by notice to the contrary.

          SECTION 2.10.  Cancellation.
                         ------------

          All Notes surrendered for registration of transfer or exchange or
following final payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The
Issuer may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
cancelled by the Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section, except as
expressly permitted by this Indenture. [Subject to the next sentence,] all
cancelled Notes held by the Trustee may be disposed of in the normal course of
its business or as directed by an Issuer Order. [Promptly following the date on
which all principal of and interest on the Notes has been paid in full and the
Notes have been surrendered to the Trustee, the Trustee shall, if the Insurer
has paid any amount in respect of the Notes under the Policy or otherwise which
has not been reimbursed to it, deliver such surrendered Notes to the Insurer.]

          SECTION 2.11.  Noteholder Lists.
                         ----------------

          The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders and shall otherwise comply with Section 312(a) of the Trust
Indenture Act.  In the event the Trustee no longer serves as the Note Registrar,
the Issuer (or any other obligor upon the Notes) shall furnish to the Trustee at
least five Business Days before each interest payment date (and in all events in
intervals of not more than 6 months) and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Noteholders, and the Issuer
shall otherwise comply with Section 312(a) of the Trust Indenture Act.

          SECTION 2.12.  Treasury Notes.
                         --------------

          In determining whether the Noteholders of the required Outstanding
Principal Amount of the Notes have concurred in any direction, waiver or
consent, Notes owned by the Issuer, any other obligor upon the Notes or an
Affiliate of the Issuer shall be considered as though not Outstanding, except
that for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes which a Responsible
Officer actually knows are so owned shall be so disregarded.

                                      33
<PAGE>

          SECTION 2.13.  CUSIP Numbers.
                         -------------

          The Issuer in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall indicate the "CUSIP" numbers of
the Notes in notices of redemption and related materials as a convenience to
Noteholders; provided that any such notice may state that no representation is
             --------
made as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of redemption and related materials.

                                  ARTICLE III

                  ACCOUNTS; INVESTMENT OF MONEYS; COLLECTION
                      AND APPLICATION OF MONEYS; REPORTS

          SECTION 3.01.  Transaction Accounts; Investments by Trustee.
                         --------------------------------------------

          (a)     On or before the Issuance Date, the Trustee shall establish in
the name of the Trustee for the benefit of the Noteholders [and the Insurer] to
the extent of their interests therein as provided in this Indenture the
following accounts, which accounts shall be Eligible Accounts maintained at the
Corporate Trust Office:

          (i)    Collection Account;

          (ii)   [Renewal Account]

          (iii)  Reserve Account; and

          (iv)   Security Deposit Account.

Subject to the further provisions of this Section 3.01(a), the Trustee shall,
upon receipt or upon transfer from another account, as the case may be, deposit
into such accounts all amounts received by it which are required to be deposited
therein in accordance with the provisions of this Indenture. All such amounts
and all investments made with such amounts, including all income and other gain
from such investments, shall be held by the Trustee in such accounts as part of
the Asset Pool as herein provided, subject to withdrawal by the Trustee in
accordance with, and for the purposes specified in the provisions of, this
Indenture.

          (b)     The Trustee shall hold in trust but shall not be required to
deposit in any account specified in Section 3.01(a) any payment received by it
until such time as the Trustee shall have identified to its reasonable
satisfaction the nature of such payment and, on the basis thereof, the proper
account or accounts into which such payment is to be deposited. In determining
into which of the accounts, if any, referred to above any amount received by the
Trustee is to be deposited, the Trustee may conclusively rely (in the absence of
bad faith on the part of the Trustee) on the advice of the Servicer. Unless the
Trustee is advised differently in writing by the Lessee making the payment or by
the Servicer in writing (with the Servicer's instruction controlling), the
Trustee shall assume that any amount remitted to it by such Lessee is to be
deposited into the Collection Account pursuant to Section 3.03. The Trustee may
establish from time to time such

                                      34
<PAGE>

deadline or deadlines as it shall determine are reasonable or necessary in the
administration of the Asset Pool after which all amounts received or collected
by the Trustee on any day shall not be deemed to have been received or collected
until the next succeeding Business Day.

          (c)   Neither the Servicer nor the Trustee shall have any right of
set-off with respect to the Collection Account, [the Renewal Account,] the
Reserve Account or the Security Deposit Account or any investment therein.

          (d)   So long as no Event of Default has occurred and is continuing,
all or a portion of the amounts in the Transaction Accounts, shall be invested
and reinvested by the Trustee pursuant to a Servicer Order in one or more
Eligible Investments. Subject to the restrictions on the maturity of investments
set forth in Section 3.01(f), each such Servicer Order may authorize the Trustee
to make the specific Eligible Investments set forth therein, to make Eligible
Investments from time to time consistent with the general instructions set forth
therein, or to make specific Eligible Investments pursuant to instructions
received in writing or by telegraph or facsimile transmission from the employees
or agents of the Servicer, identified therein, in each case in such amounts as
such Servicer Order shall specify. The Issuer agrees to report as income for
financial reporting and tax purposes (to the extent reportable) all investment
earnings on amounts in the Collection Account, [the Renewal Account,] the
Reserve Account or the Security Deposit Account. The Servicer agrees to give
appropriate and timely investment directions to the Trustee so that there will
not be more than two Business Days in any one calendar year at the end of which
funds in the Transaction Accounts are not invested, directly or indirectly,
pursuant to a Servicer Order in Eligible Investments that mature on or after the
opening of business on the next Business Day.

          (e)   In the event that either (i) the Servicer, shall have failed to
give investment directions to the Trustee by 9:30 A.M., New York City time on
any Business Day on which there may be uninvested cash or (ii) an Event of
Default shall be continuing, the Trustee shall promptly invest and reinvest the
funds then in the Collection Account, [the Renewal Account,] the Reserve Account
or the Security Deposit Account, as the case may be, to the fullest extent
practicable in Eligible Investments specified in clause (e) of the definition
thereof. All investments made by the Trustee shall mature no later than the
maturity date therefore permitted by Section 3.01(f) unless the Trustee shall
have received written confirmation from each Rating Agency, that the liquidation
of such Eligible Investments prior to their respective maturity dates, will not
result in the reduction or withdrawal of such Rating Agency's then-current
rating of the Notes.

          (f)   Unless payable on demand, no investment of any amount held in
the Transaction Accounts shall mature later than the Business Day immediately
preceding the Payment Date which is scheduled to occur immediately following the
date of investment. All income or other gains (net of losses) from the
investment of moneys deposited in the Transaction Accounts shall be deposited by
the Trustee in such account immediately upon receipt.

                                      35
<PAGE>

          (g)     Any investment of any funds in the Transaction Accounts and
any sale of any investment held in such accounts, shall be made under the
following terms and conditions:

          (i)    each such investment shall be made in the name of the Trustee
or in the name of a nominee of the Trustee, in each case in such manner as shall
be necessary to maintain the identity of such investments as assets of the Asset
Pool;

          (ii)   any certificate or other instrument evidencing such investment
shall be delivered directly to the Trustee or its agent and the Trustee shall
have sole possession of such instrument, and all income on such investment; and

          (iii)  the proceeds of any sale of an investment shall be remitted
by the purchaser thereof directly to the Trustee for deposit in the account in
which such investment was held.

          (h)     If any amounts are needed for disbursement from the
Transaction Accounts and sufficient uninvested funds are not collected and
available therein to make such disbursement, in the absence of a Servicer Order
for the liquidation of investments held therein in an amount sufficient to
provide the required funds, the Trustee shall select and cause to be sold or
otherwise converted to cash a sufficient amount of the investments in such
accounts.

          (i)    The Trustee shall not in any way be held liable by reason of
any insufficiency in the Transaction Accounts resulting from losses on
investments made in accordance with the provisions of this Section 3.01 (but the
institution serving as Trustee shall at all times remain liable for its own debt
obligations, if any, constituting part of such investments) or losses incurred
in respect of the liquidation of any Eligible Investment prior to its stated
maturity. The Trustee shall not be liable for the selection of any Eligible
Investment or any investment made by it in accordance with this Section 3.01 on
the grounds that it could have made a more favorable investment or a more
favorable selection for sale of an investment.

          SECTION 3.02.  Collection of Moneys.
                         --------------------

          (a)     On or before the Issuance Date, the Servicer shall designate a
lockbox for the receipt directly from Lessees of all payments under the Leases
and for the receipt from IOS Capital or the Lessees of security deposits in
respect of any of the Leases.  Amounts so received shall be deposited in the
Collection Account in accordance with the provisions of Section 3.03(a) or, in
the case of security deposits, the Security Deposit Account in accordance with
Section 3.08(a).

          (b)     The Trustee shall from time to time, in accordance with
instructions of the Servicer, withdraw from the Collection Account and pay to
the Servicer for appropriate application by the Servicer any amounts in the
Collection Account which the Servicer advises the Trustee in writing are Other
Lease Payments. Prior to such payment, the Trustee shall have rights to and an
interest in such amounts to the extent (but only to the extent) it is determined
that such amounts actually constitute Transaction Payment Amounts.

                                      36
<PAGE>

          (c)    If at any time the Issuer shall receive any amount referred to
in Section 3.03(a), it shall hold such payment in trust for the benefit of the
Trustee, the holders of the Notes [and the Insurer,] shall segregate such
payment from the other property of the Issuer, and shall, promptly (but in no
event later than the next following Business Day) upon receipt, deliver such
payment in the form received to the Trustee.

          SECTION 3.03.  Collection Account; Payments.
                         ----------------------------

          (a)     The Servicer shall within two Business Days of receipt (a
"Required Deposit Date") deposit the following funds, as received, into the
Collection Account:

          (i)    Lease Payments [(including Renewal Payments)];

          (ii)   recoveries from Non-Performing Leases to the extent IOS Capital
has not substituted Substitute Leases for such Non-Performing Leases;

          (iii)  late charges received on delinquent Lease Payments not advanced
by the Servicer;

          (iv)   proceeds from purchases by IOS Capital of Leases as a result of
breaches of representations and warranties of IOS Capital pursuant to Section
5.04 of the Assignment and Servicing Agreement to the extent IOS Capital has not
substituted Substitute Leases for such Leases;

          (v)    Casualty Payments;

          (vi)   Servicer Advances, if any;

          (vii)  [any amounts paid by the [Counterparty] to the Issuer pursuant
to the [Swap Documents];]

          (viii) Retainable Deposits;

          (ix)   Termination Payments to the extent the Issuer does not reinvest
such Termination Payments in Additional Leases; and

          (x)    proceeds for redemption of the Notes in the event  the Issuer
exercises its right to redeem the Notes in accordance with Section 2.01(b).

          (b)    Unless the Notes have been declared due and payable pursuant to
Section 7.02 and moneys collected by the Trustee are being applied in accordance
with Section 7.06, Available Funds on deposit in the Collection Account
(including the amounts, if any, deposited into the Collection Account from the
Reserve Account and the Security Deposit Account in accordance with the
provisions of Sections 3.04 and 3.08) shall be withdrawn by the Trustee as
directed by the Servicer in the related Servicing Report on or before each
Payment Date from the Collection Account, in the amounts required, for
application in the following order of priority, to make the following Required
Payments (all in accordance with the applicable Servicing Report):

                                      37
<PAGE>

          (i)    [to pay the Insurer the amounts then due and owing in respect
of the Insurer Premium;]

          (ii)   [to pay the [Counterparty] any amount due pursuant to the [Swap
Documents];]

          (iii)  to pay the Servicing Fee;

          (iv)   to reimburse unreimbursed Servicer Advances in respect of a
prior Payment Date;

          (v)    concurrently and pro rata:  (a) to make Interest Payments on
                                  --------
the Class [A-1] Notes; (b) to make Interest Payments on the Class [A-2] Notes;
(c) to make Interest Payments on the Class [A-3a] Notes; (d) to make Interest
Payments on the Class [A-3b] Notes; and (e) to make Interest Payments on the
Class [A-4] Notes;

          (vi)   [to pay the Insurer any Reimbursement Amounts due under the
terms of the Insurance Agreement];

          (vii)  to make the Class A Principal Payment (i) to the Class [A-1]
Noteholders only, until the Outstanding Principal Amount on the Class [A-1]
Notes is reduced to zero, then (ii) to the Class [A-2] Noteholders only, until
the Outstanding Principal Amount on the Class [A-2] Notes is reduced to zero,
then (iii) pro rata, to the Class [A-3a] Noteholders and the Class [A-3b]
Noteholders only, until the Outstanding Principal Amount on the Class [A-3a]
Notes and the Outstanding Principal Amount on the Class [A-3b] Notes has been
reduced to zero, and finally, (iv) to the Class [A-4] Noteholders until the
Outstanding Principal Amount on the Class [A-4] Notes is reduced to zero;

          (viii) if an Acceleration Event has occurred, to pay the Additional
Principal, if any, as an additional reduction of principal, to the Class A
Noteholders then receiving the Class A Principal Payment, in the order
established in clause (vii) above, until the Outstanding Principal Amount on all
of the Class A Notes has been reduced to zero;

          (ix)   to make a deposit to the Reserve Account in an amount equal to
the excess of the Required Reserve Amount over the Available Reserve Amount;

          (x)    [during a Renewal Account Deposit Period, to make a deposit to
the Renewal Account in an amount equal of the Required Renewal Amount over the
amount on deposit in the Renewal Account but not in excess of the amount of
Renewal Payments for the preceding Due Period; and]

          (xi)   to pay the Issuer, the balance, if any.

          (c)    Notwithstanding the foregoing, on any Payment Date the Servicer
shall instruct the Trustee to retain, and the Trustee shall retain, in the
Collection Account an amount equal to all Lease Payments received that were due
after the prior Due Period, and all Casualty Payments, and Termination Payments
received or realized after the

                                      38
<PAGE>

Determination Date for such Payment Date and shall not distribute any such
amounts on such Payment Date. If at any time any amount or portion thereof
previously distributed pursuant to this Section 3.03(c) shall have been
recovered, or shall be subject to recovery, in any proceeding with respect to
the Issuer or otherwise, then for purposes of determining future distributions
pursuant to this Section 3.03(c) such amount or portion thereof shall be deemed
to have not been previously so distributed.

          (d)   The Servicer shall submit with the Servicing Report a
certificate (i) setting forth any amounts to be withdrawn (on an item-by-item
basis) from the Collection Account other than as provided in Section 3.03(b),
(ii) stating that none of such amounts are all or part of any amounts required
to be retained in the Collection Account pursuant to this Section 3.03 and (iii)
identifying the Lease or Leases to which such amounts relate.

          SECTION 3.04.  The Reserve Account.
                         -------------------

          (a)   On the Issuance Date, the Issuer has made an initial deposit of
$___________ into the Reserve Account.  On each Payment Date, the Trustee shall
transfer to the Collection Account from the Reserve Account such amounts as
shall be required by Section 3.04(b).

          (b)   Prior to each Payment Date the Trustee shall transfer from the
Reserve Account to the Collection Account the amount specified by the Servicer
in the related Servicing Report representing investment earnings on amounts held
in the Reserve Account as of the related Determination Date.  If by 12:00 noon,
New York City time, on the Business Day preceding any Payment Date, Available
Funds are insufficient to permit on such Payment Date all distributions required
by Section 3.03(b)(i) through 3.03(b)(vii) (such payments, the "Required
Payments" and such shortfall, an "Available Funds Shortfall"), then, to the
extent of the Available Reserve Amount, the Trustee shall transfer, not later
than the end of such Business Day, from the Reserve Account to the Collection
Account such amount to the extent available as shall be necessary to make on
such Payment Date all Required Payments.

          (c)   In the event that after giving effect to all the disbursements
required to be made on any Payment Date, the Available Reserve Amount exceeds
the Required Reserve Amount, the Trustee shall transfer, not later than the end
of business on such Payment Date, an amount equal to such excess to the Issuer.

          (d)   Upon the satisfaction and discharge of this Indenture, any
balance remaining in the Reserve Account, after all obligations to the
Noteholders hereunder have been fully satisfied, shall be paid to reimburse the
Trustee for any amounts owing to it arising from the performance of its
obligations under this Indenture and, then, to the Issuer.

          SECTION 3.05.  Reports by Trustee; Notices of Certain Payments.
                         -----------------------------------------------

          (a)   The Trustee shall within two Business Days after the request of
the Issuer, the Servicer, the Insurer or any Noteholder, deliver to the
requesting Person a written report setting forth the amounts on deposit in the
Collection Account, the Reserve

                                      39
<PAGE>

Account and the Security Deposit Account and identifying the investments
included therein.

          (b)   On or prior to each Payment Date, the Servicer shall provide to
the Trustee and the Trustee shall forward to [the Insurer,] each Rating Agency
and each Noteholder of record a statement setting forth at least the following
information as to the Notes to the extent applicable:

          (i)   the amount of Interest Payments and payments in reduction of
principal paid on such Payment Date with respect to all Class [A-1] Notes, Class
[A-2] Notes, Class [A-3a] Notes, Class [A-3b] and Class [A-4] Notes,
respectively;

          (ii)  the aggregate Outstanding Principal Amount of all Outstanding
Class [A-1] Notes, Class [A-2] Notes, Class [A-3a] Notes, Class [A-3b] Notes and
Class [A-4] Notes, respectively and the Pool Factor for each such Class after
giving effect to all payments reported under (i) above;

          (iii) the amount of the Servicing Fee and unreimbursed Servicer
Advances paid on such Payment Date pursuant to Section 3.03(b)(ii) and Section
3.03(b)(iii);

          (iv)  the amount on deposit in the Collection Account, the Reserve
Account and the Security Deposit Account, in each case after giving effect to
all of the withdrawals and applications or transfers required on or before such
Payment Date pursuant to Sections 3.02, 3.03, 3.04 and 3.08;

          (v)   the Discounted Present Value of Performing Leases and the
Discounted Present Value of Non-Performing Leases as of the last day of the
related Due Period; and

          (vi)  the aggregate Lease Purchase Amounts for Leases purchased by
the Originator pursuant to Section 5.04 of the Assignment and Servicing
Agreement during the related Due Period.

          (c)   With each report of the Trustee furnished pursuant to this
Section 3.05 following any Payment Date, the Trustee shall enclose a copy of the
relevant Servicing Report.

          (d)   Upon request of a Noteholder, the Trustee will provide
information as to the Outstanding Principal Amount of each Class of Notes to
such Noteholder.

          SECTION 3.06.  Trustee May Rely on Certain Information from Servicer.
                         -----------------------------------------------------

          Pursuant to Sections 5.01, 6.01 and 6.02 of the Assignment and
Servicing Agreement and Sections 3.02 through 3.05 hereof, the Servicer is
required to furnish to the Trustee [and/or the Insurer] from time to time
certain information and make various calculations which are relevant to the
performance of the Trustee's duties in this Article III and in Article IV of
this Indenture.  The Trustee [and the Insurer] shall be entitled to

                                      40
<PAGE>

rely in good faith on such information or calculations unless and until [the
Insurer or] a Responsible Officer of the Trustee, as the case may be, has actual
knowledge, or is advised by any Noteholder [or the Insurer] (either in writing
or orally with prompt written or telecopied confirmation), that such information
or calculations is or are incorrect.

          SECTION 3.07.  [Optional Deposits by the Insurer; Notice of Waivers.
                         ----------------------------------------------------

          (a)   The Insurer shall at any time, and from time to time, with
respect to a Payment Date, have the option (but shall not be required, except as
provided in Article IV) to deliver amounts to the Trustee for deposit into the
Collection Account for any of the following purposes: (i) to provide funds in
respect of the payment of fees or expenses of any provider of services to the
Issuer with respect to such Payment Date, or (ii) to include such amount as part
of the Available Funds for such Payment Date to the extent that without such
amount a draw would be required to be made on the Policy. Any amounts so
delivered by the Insurer shall be included in Reimbursement Amounts.

          (b)   If the Insurer waives any event that might trigger an event of
default under the Insurance Agreement and so notifies the Trustee in writing,
the Trustee shall notify the Rating Agencies of such waiver.]

          SECTION 3.08.  The Security Deposit Account
                         ----------------------------

          (a)   On the Issuance Date, the Issuer has made an initial deposit
into the Security Deposit Account of $___________ representing security deposits
in respect of the Leases as of the Issuance Date. The Servicer on behalf of the
Issuer shall within two Business Days of receipt thereof deposit into the
Security Deposit Account all additional security deposits received in respect of
the Leases from time to time in the Asset Pool.

          (b)   Prior to each Payment Date, the Trustee shall transfer from the
Security Deposit Account to the Collection Account the amounts specified by the
Servicer in the related Servicing Report representing (a) investment earnings on
amounts held in the Security Deposit Account as of the related Determination
Date and (b) Retainable Deposits.

          (c)   The Servicer shall be responsible for the payment of all amounts
held from time to time in the Security Deposit Account not required to be
transferred to the Collection Account in accordance with Section 3.08(b) to the
Lessees or other Persons entitled thereto in accordance with the related Lease
documentation.  From time to time, upon written request of the Servicer, the
Trustee shall release from the Security Deposit Account and from the Lien of
this Indenture such amounts as the Servicer shall determine to be necessary for
application as provided in the immediately preceding sentence.

          SECTION 3.09.  [Renewal Account.
                          ---------------

          (a)   On or before the Issuance Date, the Trustee shall establish the
Renewal Account in accordance with Section 3.01(a) hereof.

                                      41
<PAGE>

          (b)   The Servicer shall deposit all Renewal Payments into the
Collection Account. Prior to each Payment Date, the Trustee shall transfer from
the Renewal Account to the Collection Account the amount specified by the
Servicer in the related Servicing Report representing investment earnings on
amounts held in the Renewal Account. During a Renewal Account Deposit Period,
Available Funds remaining after the payment of the Required Payments and amounts
required to be deposited into the Reserve Account shall be deposited into the
Renewal Account to the extent the amount on deposit in the Renewal Account is
less than the Required Renewal Amount, but not in excess of the amount of
Renewal Payments for the preceding Due Period. Any amounts on deposit in the
Renewal Account in excess of the Required Renewal Amount will be deposited into
the Collection Account.

          (c)   In the event that Available Funds (exclusive of amounts on
deposit in the Reserve Account and the Renewal Account) are insufficient to pay
the Required Payments and amounts required to be deposited in the Reserve
Account on any Payment Date, the Trustee shall transfer from the Renewal Account
to the Collection Account an amount equal to the lesser of the funds on deposit
in the Renewal Account and the amount of such deficiency.

          (d)   Upon the satisfaction and discharge of this Indenture, any
balance remaining in the Renewal Account, after all obligations to the
Noteholders hereunder have been fully satisfied, shall be paid to reimburse the
Trustee for any amounts owing to it arising from the performance of its
obligations under this Indenture and then, to the Issuer.]

                                  [ARTICLE IV

                                   THE POLICY

          SECTION 4.01.  Claims Under Policy.
                         -------------------

          (a)   On each Determination Date, the Trustee shall determine from the
related Servicer Report with respect to the immediately following Payment Date
the Deficiency Amount, if any.  If the Trustee determines that a Deficiency
Amount would exist, the Trustee shall complete a Notice in the form of Exhibit A
to the Policy and submit such Notice to the Insurer no later than 12:00 noon New
York City time on the third Business Day preceding such Payment Date as a claim
for payment in an amount equal to the Deficiency Amount.  Amounts paid by the
Insurer pursuant to a claim submitted under this Section 4.01, shall be
deposited by the Trustee into the Collection Account for payment to Noteholders
on the related Payment Date pursuant to Section 3.03(b).

          (b)   Any notice delivered by the Trustee to the Insurer pursuant to
Section 4.01(a) shall specify the Deficiency Amount claimed under the Policy and
shall constitute a "Notice" (as defined in the Policy) under the Policy.  In
accordance with the provisions of the Policy, the Insurer is required to pay to
the Trustee the Deficiency Amount properly claimed thereunder by 12:00 noon, New
York City time, on the later of (i) the third Business Day  (as defined in the
Policy) following receipt on a Business Day

                                      42
<PAGE>

of the Notice of Claim, and (ii) the applicable Payment Date. Any payment made
under the Policy by the Insurer shall be applied solely to the payment of the
Notes as set forth in the Policy, and for no other purpose.

          (c)   The Trustee shall (i) receive as attorney-in-fact of each
Noteholder any Deficiency Amount from the Insurer and (ii) deposit the same in
the Collection Account for payment to Noteholders as provided in Section
3.03(b). For the purposes of clause (d) below, any Deficiency Amount disbursed
by the Trustee from claims made under the Policy shall not be considered payment
by the Issuer with respect to such Notes, and shall not discharge the
obligations of the Issuer with respect thereto. The Insurer shall be entitled to
receive the related Reimbursement Amount pursuant to Section 3.03(b) with
respect to each Insured Payment made by the Insurer.

          (d)   The Insurer shall, to the extent it makes any payment with
respect to the Notes, become subrogated to the rights of the recipients of such
payments to the extent of such payments. Subject to and conditioned upon any
payment with respect to the Notes by or on behalf of the Insurer, the Trustee
and the Noteholders shall assign to the Insurer all rights to the payment of
interest or principal with respect to the Notes which are then due for payment
to the extent of all payments made by the Insurer, and the Insurer may exercise
any option, vote, right, power or the like with respect to the Notes to the
extent that it has made payment pursuant to the Policy. To evidence such
subrogation, the Note Registrar (as defined in this Indenture) shall note the
Insurer's rights as subrogee upon the register of Noteholders upon receipt from
the Insurer of proof of payment by the Insurer of any Insured Payment (as
defined in the Policy). The foregoing subrogation shall in all cases be subject
to the rights of the Noteholders to receive all Insured Payments (as defined in
the Policy) in respect of the Notes.

          (e)   The Trustee shall keep a complete and accurate record of all
Policy proceeds deposited into the Collection Account and the allocation of such
funds to payment of interest on and principal paid in respect of any Note. The
Insurer shall have the right to inspect such records at reasonable times upon
one Business Day's prior notice to the Trustee.

          (f)   The Trustee shall be entitled to enforce on behalf of the
Noteholders the obligations of the Insurer under the Policy.  Notwithstanding
any other provision of this Indenture or any Transaction Documents, the
Noteholders are not entitled to make any claims under the Policy or institute
proceedings directly against the Insurer.

          SECTION 4.02.  Preference Claims.
                         -----------------

          (a)   In the event that the Trustee has received a certified copy of
an order of the appropriate court that any amount previously distributed to a
Noteholder in respect of any Note has been avoided in whole or in part as a
preference payment under applicable bankruptcy law, the Trustee shall so notify
the Insurer, shall comply with the provisions of the Policy to obtain payment by
the Insurer of such avoided payment, and shall, at the time it provides notice
to the Insurer, notify Holders of the Notes by mail that, in the event that any
Noteholder's payment is so recoverable, such Noteholder will

                                      43
<PAGE>

be entitled to payment pursuant to the terms of the Policy. The Trustee shall
furnish to the Insurer its records evidencing the payments of principal of and
interest on the Notes, if any, which have been made by the Trustee and
subsequently recovered from Noteholders, and the dates on which such payments
were made. Pursuant to the terms of the Policy, the Insurer will make such
payment on behalf of the Noteholder to the receiver or trustee in bankruptcy
named in the final order of the court exercising jurisdiction on behalf of the
Noteholder and not to any Noteholder directly (unless a Noteholder has returned
principal or interest on the Notes to such receiver or trustee in bankruptcy, in
which case the Insurer will make such payment to the Trustee for payment to such
Noteholder upon proof of such payment reasonably satisfactory to the Insurer).

          (b)   The Trustee shall promptly notify the Insurer of any proceeding
or the institution of any action (of which the Trustee has actual knowledge)
seeking the avoidance as a preferential transfer under applicable bankruptcy,
insolvency, receivership, rehabilitation or similar law (a "Preference Claim")
of any payment made with respect to the Notes. Each Holder, by its purchase of
Notes, and the Trustee hereby agrees that so long as an Insurer Default shall
not have occurred and be continuing, the Insurer may at any time during the
continuation of any proceeding relating to a Preference Claim direct all matters
relating to such Preference Claim, including, without limitation, (i) the
direction of any appeal of any order relating to any Preference Claim and (ii)
the posting of any surety, supersedeas or performance bond pending any such
appeal. In addition, and without limitation of the foregoing, as set forth in
Section 4.01(d), the Insurer shall be subrogated to, and each Noteholder and the
Trustee hereby delegate and assign, to the fullest extent permitted by law, the
rights of the Trustee and each Noteholder in the conduct of any proceeding with
respect to a Preference Claim, including, without limitation, all rights of any
party to an adversary proceeding action with respect to any court order issued
in connection with any such Preference Claim.

          SECTION 4.03.  Surrender of Policy.
                         -------------------

          The Trustee shall surrender the Policy to the Insurer for cancellation
upon the expiration of the Policy in accordance with the terms thereof.]

                                   ARTICLE V

                  RELEASE OF LEASES AND INTERESTS IN EQUIPMENT

          SECTION 5.01.  Release of Equipment.
                         --------------------

          Subject to the satisfaction of the provisions of Section 5.02, the
Trustee shall release the Trustee's security interest in the Issuer's interest
in the Equipment from the Lien of the Indenture upon receipt from the Servicer
of written certification of the occurrence of: (a) the sale of such Equipment
pursuant to Section 4.03(b) of the Assignment and Servicing Agreement, or (b)
the release of the related Lease from the Lien of this Indenture.

                                      44
<PAGE>

          SECTION 5.02.  Release of Leases Upon Final Lease Payment.
                         ------------------------------------------

          In the event that the Trustee shall have received notice (either in
writing or orally with prompt written or telecopied confirmation) from the
Servicer that the Trustee has received with respect  to any Lease (i) the final
Lease Payment [(including Renewal Payments)] due and payable under such Lease,
(ii) a Termination Payment in respect of such Lease, (iii) a Lease Purchase
Amount in respect of such Lease, (iv) a Casualty Payment under such Lease (and,
following such final Lease Payment, Casualty Payment, Lease Purchase Amount or
Termination Payment, no further payments (other than Other Lease Payments) on or
in respect of such Lease are or will be due and payable), or (iv) the full
amount of any recoveries with respect to any such Lease that is a Non-Performing
Lease, such Lease shall be released from the lien of this Indenture and returned
to the Issuer.

          SECTION 5.03.  Execution of Documents.
                         ----------------------

          The Trustee shall promptly execute and deliver such documents,
including without limitation partial releases and termination statements (which
shall be furnished to the Trustee by the Issuer), and take such other actions as
the Issuer, by Issuer Request, may reasonably request (including the return of
any Lease which has been released) to fully effectuate the release from this
Indenture of any Lease and interests in the related Equipment required to be so
released pursuant to Sections 5.01 or 5.02.

          SECTION 5.04.  Further Release of Collateral.
                         -----------------------------

          Notwithstanding any provision of this Indenture to the contrary, any
amounts properly retained by the Servicer pursuant to Section 4.03, 4.04 and
4.05 of the Assignment and Servicing Agreement are, without further action by
the Trustee released from the Lien of this Indenture.

                                   ARTICLE VI

                SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER

          SECTION 6.01.  Servicer Events of Default.
                         --------------------------

          If a Servicer Event of Default has occurred and is continuing, [the
Trustee shall, upon the written request of the Insurer (so long as no Insurer
Default has occurred and is continuing ) or] the holders of 66-2/3% of the then
Outstanding Principal Amount of the Notes [(if an Insurer Default has occurred
and is continuing)], give notice in writing to the Servicer of the termination
of all of the rights and obligations of the Servicer under the Assignment and
Servicing Agreement (but none of IOS Capital's obligations pursuant to Section 5
of the Assignment and Servicing Agreement, which shall survive such
termination).  On and after the giving of such written notice, all rights and
obligations of the Servicer under the Assignment and Servicing Agreement,
including, without limitation, the Servicer's right thereunder to receive the
Servicing Fee, but none of the Servicer obligations pursuant to Section 4
thereof, shall pass to, be vested in, and be assumed by the Trustee, and the
Trustee shall be authorized to, and shall, execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and

                                      45
<PAGE>

all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such termination and
of such passing, vesting, and assumption; provided that in performing the duties
                                          --------
of the Servicer under the Assignment and Servicing Agreement the Trustee shall
at all times be deemed to be acting as the Trustee hereunder and shall be
entitled to the full benefit of all the protections, benefits, immunities and
indemnities provided in this Indenture for or with respect to the Trustee,
including without limitation those set forth in Article VIII hereof.

          SECTION 6.02.  Substitute Servicer.
                         -------------------

          Notwithstanding the provisions of Section 6.01, the Trustee may, if it
shall be unwilling to continue to act as the successor to the Servicer in
accordance with Section 6.01, or shall, if it is unable to continue to so act
[or is so instructed in writing by the Insurer (if no Insurer Default has
occurred and is continuing)] or the holders of 66-2/3% of the then Outstanding
Principal Amount of the Notes (if an Insurer Default has occurred and is
continuing), appoint a successor to the Servicer in accordance with the
provisions of Section 10.03 of the Assignment and Servicing Agreement.

                                  ARTICLE VII

                          EVENTS OF DEFAULT; REMEDIES

          SECTION 7.01.  Events of Default.
                         -----------------

          "Event of Default," wherever used herein, means any one of the
following (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

          (a)   default in the payment of any Interest Payment on any Note when
the same becomes due and payable; or

          (b)   default in the payment of the principal of the Notes at Stated
Maturity; or

          (c)   default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere in
this Section specifically dealt with), or any representation or warranty of the
Issuer made in this Indenture proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such default
shall continue or not be cured, or the circumstance or condition in respect of
which such misrepresentation or warranty was incorrect shall not have been
eliminated or otherwise cured, for a period of 30 days (or for such longer
period, not in excess of 90 days, as may be reasonably necessary to remedy such
default if the Servicer delivers an Officer's Certificate to the Trustee to the
effect that the Issuer has commenced, or will promptly commence and diligently
pursue, all reasonable efforts to remedy such default and such default can be
remedied in 90 days or less) after there shall have been given, by registered or
certified mail, to the Issuer by

                                      46
<PAGE>

the Trustee or to the Issuer and the Trustee by the Holders of at least 25% of
the Outstanding Principal Amount of the Notes, a written notice specifying such
default or incorrect representation or warranty and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder; or

          (d)   the entry by a court having jurisdiction in the premises of (i)
a decree or order for relief in respect of the Issuer in an involuntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization, or other similar law or (ii) a decree or order adjudging the
Issuer a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment, or composition of or in respect
of the Issuer under any applicable federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator, or other
similar official of the Issuer or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 60 consecutive days; or

          (e)   the commencement by the Issuer of a voluntary case or proceeding
under any applicable federal or state bankruptcy, insolvency, reorganization, or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or order
for relief in respect of the Issuer in an involuntary case or proceeding under
any applicable federal or state bankruptcy, insolvency, reorganization, or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable federal or state law, or
the consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator, or similar official of the Issuer or of any substantial part of
its property, or the making by it of an assignment for the benefit of creditors,
or the Issuer's failure to pay its debts generally as they become due, or the
taking of corporate action by the Issuer in furtherance of any such action; or

          (f)   the occurrence and continuance of a Servicer Event of Default.

          The Issuer shall deliver to the Trustee and the Insurer and the Rating
Agencies, within three days after obtaining knowledge of the occurrence thereof,
written notice in the form of an Officer's Certificate of any event which with
the giving of notice and the lapse of time would become an Event of Default
under (c), (d), (e) or (f) above, its status and what action the Issuer is
taking or proposes to take with respect thereto.

          SECTION 7.02.  Acceleration of Maturity; Rescission and Annulment.
                         --------------------------------------------------

          (a)   If an Event of Default occurs and is continuing, then, subject
to the provisions of Section 7.02(c) below, and in every such case, the Trustee
may, and (if so directed by holders of 66-2/3% of the then Outstanding Principal
Amount of the Notes) shall, declare the unpaid principal amount of the Notes to
be immediately due and payable at par together with all accrued and unpaid
interest thereon, without presentment, demand, protest or notice of any kind,
all of which are hereby waived by the Issuer.

                                      47
<PAGE>

          (b)   Subject to Section 7.02(c) below, the holders of 66-2/3% of the
then Outstanding Principal Amount of the Notes may direct the time, method and
place of conducting any proceedings for any remedy available to the Trustee or
of exercising any trust or power conferred on it.

          (c)   [Subject only to provisions hereof expressly stated to be
applicable notwithstanding this Section 7.02 and notwithstanding any other
contrary provision of this Indenture, so long as the Policy remains in effect
and no Insurer Default has occurred and is continuing, and irrespective of any
contrary instruction from the holders of any Notes but subject to any further
conditions or requirements of this Indenture, the Trustee (i) shall not declare
the Notes to be immediately due and payable or waive any Event of Default or
exercise any remedies upon the occurrence of an Event of Default, except at the
written direction of the Insurer, (ii) shall upon the occurrence of an Event of
Default declare the Notes to be immediately due and payable or waive any such
Event of Default upon the written direction of the Insurer, and (iii) shall upon
the occurrence and continuance of an Event of Default, exercise or refrain from
exercising available remedies in accordance with the written direction and
control of the Insurer.]

          (d)   At any time after such an Event of Default has occurred and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, [the Insurer (if no Insurer
Default has occurred and is continuing) or] the holders of Notes evidencing 66-
2/3% of the then Outstanding Principal Amount of the Notes (if an Insurer
Default has occurred and is continuing) by written notice to the Issuer and the
Trustee, may rescind and annul such declaration and its consequences if the
Issuer has paid or deposited with the Trustee a sum sufficient to pay:

                     (i)    all Principal Payments on any Class A Notes which
                have become due otherwise than by such declaration of
                acceleration and interest thereon from the date when the same
                first became due until the date of payment or deposit at the
                appropriate Note Interest Rate,

                     (ii)   all Interest Payments due with respect to any Class
                A Notes and, to the extent that payment of such interest is
                lawful, interest upon overdue interest from the date when the
                same first became due until the date of payment or deposit at a
                rate per annum equal to the appropriate Note Interest Rates, and

                     (iii)  [all sums paid or advanced by the Trustee hereunder
                and all sums due to the Insurer and the reasonable compensation,
                expenses, disbursements, and advances of the Trustee and the
                Insurer and their respective agents and counsel;]

No such rescission shall affect any subsequent Event of Default or impair any
right consequent thereon.

                                      48
<PAGE>

          SECTION 7.03.  Remedies.
                         --------

          (a)   If an Event of Default occurs and is continuing of which a
Responsible Officer has actual knowledge, the Trustee shall immediately give
notice to each Noteholder and the Rating Agencies as set forth in Section 8.02.

          (b)   Following any acceleration of the Notes, the Trustee shall have
all of the rights, powers and remedies with respect to the Asset Pool as are
available to secured parties under the Uniform Commercial Code or other
applicable law. Such rights, powers and remedies may be exercised by the Trustee
in its own name as trustee of an express trust.

          (c)   If an Event of Default specified in Section 7.01(a) or 7.01(b)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Issuer for the whole
amount of principal and interest remaining unpaid.

          (d)   In exercising its rights and obligations under this Section
7.03, the Trustee may sell the assets in the Asset Pool; provided that, if the
                                                         --------
Event of Default involves other than non-payment of principal or interest on the
Notes, then such sale must be for an amount greater than or equal to amounts due
under clauses first through fourth in Section 7.06 unless directed otherwise by
              -----         ------
[the Insurer (if no Insurer Default has occurred and is continuing) or] the
holders of 66-2/3% of the then Outstanding Principal Amount of the Notes [(if an
Insurer Default has occurred and is continuing).] None of the Trustee, [the
Insurer] nor any Noteholder shall have any rights against the Issuer other than
to enforce the Lien of this Indenture and to sell the assets in the Asset Pool.

          SECTION 7.04.  Trustee Shall File Proofs of Claim.
                         ----------------------------------

          (a)   In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition,
or other judicial proceeding relative to the Issuer, the Seller, IOS Capital,
the Servicer or any other obligor upon the Notes or the other obligations
secured hereby or relating to the property of the Issuer, the Seller, IOS
Capital, the Servicer or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Issuer, the Seller, IOS
Capital or the Servicer for the payment of overdue principal or interest or any
such other obligation) shall by intervention in such proceeding or otherwise,

          (i)   file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Notes and any other obligation
secured hereby and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee, [the Insurer (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee and the Insurer and their respective agents and counsel)] and the
Noteholders allowed in such judicial proceeding, provided, however, that the
                                                 --------  -------
Trustee shall file such proof of claim [on behalf of the Insurer only upon the
Insurer's written direction and] on behalf of the Noteholders only at the
written

                                      49
<PAGE>

direction of the holders of not less than 66-2/3% of the then Outstanding
Principal Amount of the Notes; and

          (ii)  collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator, or
other similar official in any such judicial proceeding is hereby authorized by
each Noteholder [and the Insurer] to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments directly
to the Noteholders to pay to the Trustee [and the Insurer] any amount due them
for the reasonable compensation, expenses, disbursements and advances of the
Trustee [and the Insurer] and their respective agents and counsel, and any other
amounts due the Trustee under Section 7.06.

          (b)   Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any holder thereof or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any such
proceeding.

          SECTION 7.05.  Trustee May Enforce Claims Without Possession of Notes.
                         ------------------------------------------------------

          All rights of action and claims under this Indenture or the Notes may
be prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the holders
of the Notes [and the Insurer.]

          SECTION 7.06.  Application of Money Collected.
                         ------------------------------

          Any money collected by the Trustee pursuant to this Article following
an Event of Default, and any moneys that may then be held or thereafter received
by the Trustee shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of the entire amount due
on account of principal or interest, upon presentation of the Notes and
surrender thereof:

          first     to the payment of all costs and expenses of collection
          -----
     incurred by the Trustee, [the Insurer] and the Noteholders (including the
     reasonable fees and expenses of any counsel to the Trustee, [the Insurer]
     and the Noteholders) and all fees and expenses (including legal fees and
     expenses) owed to the Trustee under this Indenture and the Assignment and
     Servicing Agreement;

          second    to pay the [Counterparty] any amount due pursuant to the
          ------
     [Swap Documents];

                                      50
<PAGE>

          third     if the person then acting as Servicer under the Assignment
          -----
     and Servicing  Agreement is not IOS Capital or an Affiliate of IOS Capital,
     to the payment of all Servicing Fees and unreimbursed Servicer Advances
     then due to such Person;

          fourth    first, pro rata to the payment of all accrued and unpaid
          ------
     interest on the Outstanding Class [A-1] Principal Amount, Outstanding Class
     [A-2] Principal Amount, Outstanding Class [A-3a] Principal Amount,
     Outstanding Class [A-3b] Principal Amount and Outstanding Class [A-4]
     Principal Amount, respectively, to the date of payment thereof, including
     (to the extent permitted by applicable law) interest on any overdue
     installment of interest and principal from the maturity of such installment
     to the date of payment thereof at the rate per annum equal to the Class [A-
     1] Note Interest Rate, Class [A-2] Note Interest Rate and Class [A-3a] Note
     Interest Rate, Class [A-3b] Note Interest Rate and Class [A-4] Note
     Interest Rate, respectively, second, to the payment of the Outstanding
     Class [A-1] Principal Amount, third, to the payment of the Outstanding
     Class [A-2] Principal Amount, fourth, to the pro rata payment of the
     Outstanding Class [A-3a] Principal Amount and the Outstanding Class [A-3b]
     Principal Amount and fifth, to the payment of the Outstanding Class [A-4]
     Principal Amount; provided, that the Noteholders may allocate such payments
                       --------
     for interest, principal and premium at their own discretion, except that no
     such allocation shall affect the allocation of such amounts or future
     payments received by any other Noteholder;

          [fifth    to the payment of amounts then due the Insurer under this
           -----
     Indenture, including the Insurer Premium (other than amounts referred to in
     clause sixth below);]
            -----

          [sixth    to the payment to the Insurer of any Reimbursement Amounts;]
           -----

          seventh   if the Person then acting as Servicer is IOS Capital or an
          -------
     Affiliate of IOS Capital, to the payment of all Servicing Fees and
     unreimbursed Servicer Advances then due to such Person; and

          eighth    to the payment of the remainder, if any, to the Issuer or
          ------
     any other Person legally entitled thereto.

          SECTION 7.07.  Limitation on Suits.
                         -------------------

          None of the Noteholders [nor the Insurer] shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:

          (i)   such Noteholder [or the Insurer], as the case may be, has
previously given written notice to the Trustee of a continuing Event of Default;

          (ii)   the holders of not less than 66-2/3% of the then Outstanding
Principal Amount of the Notes [or the Insurer, as the case may be,] shall have
made

                                      51
<PAGE>

written request to the Trustee to institute proceedings in respect of such Event
of Default in its own name as Trustee hereunder;

          (iii) such Noteholder or Noteholders [or the Insurer], as the case may
be, have offered to the Trustee indemnity satisfactory to it against the costs,
expenses and liabilities to be incurred in compliance with such request;

          (iv)  the Trustee for 30 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;

          (v)   so long as any of the Notes remain Outstanding, no direction
inconsistent with such written request has been given to the Trustee during such
30-day period by the holders of 66-2/3% of the then Outstanding Principal Amount
of the Notes [or the Insurer], as the case may be; and

          (vi)  [in the case of any proceeding instituted by any Noteholder
without the written consent of the Insurer, an Insurer Default has occurred and
is continuing;]

it being understood and intended that no one or more Noteholders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb, or prejudice the rights of any other
Noteholders, or to obtain or to seek to obtain priority or preference over any
other Noteholders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the
Noteholders.  It is further understood and intended that so long as any portion
of the Notes remains Outstanding, IOS Capital shall not have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture
(other than for the enforcement of Sections 3.03(b), 3.04(b), 3.05, 3.06, 4.01
and 4.02 hereof) or for the appointment of a receiver or trustee (including,
without limitation, a proceeding under the Bankruptcy Code), or for any other
remedy hereunder.  Nothing in this Section 7.07 shall be construed as limiting
the rights of otherwise qualified Noteholders to petition a court for the
removal of a Trustee pursuant to Section 8.08(h) hereof.

          SECTION 7.08.  Unconditional Right of Noteholders to Receive
                         ---------------------------------------------
Principal and Interest.
----------------------

          Notwithstanding any other provision in this Indenture, other than the
provisions hereof limiting the right to recover amounts due on the Notes to
recoveries from the property of the Asset Pool, the holder of any Note shall
have the absolute and unconditional right to receive payment of the principal of
and interest on such Note on the Maturities for such payments, including the
Stated Maturity, and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Noteholder.

          SECTION 7.09.  Restoration of Rights and Remedies.
                         ----------------------------------

          If the Trustee[, the Insurer] or any Noteholder has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee, [the Insurer] or to such Noteholder, then
and in every such case, subject to any

                                      52
<PAGE>

determination in such proceeding, the Issuer, the Trustee, [the Insurer] and the
Noteholders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee, [the
Insurer] and the Noteholders continue as though no such proceeding had been
instituted.

          SECTION 7.10.  Rights and Remedies Cumulative.
                         ------------------------------

          Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost, or stolen Notes in Section 2.04 (f), no
right or remedy herein conferred upon or reserved to [the Insurer or to] the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise.  The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

          SECTION 7.11.  Delay or Omission Not Waiver.
                         ----------------------------

          No delay or omission of the Trustee, [the Insurer] or of any holder of
any Note to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein.  Every right and remedy given by this
Article or by law to the Trustee, [the Insurer] or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee, [the Insurer] or by the Noteholders, as the case may be.

          SECTION 7.12.  Control by Noteholders.
                         ----------------------

          [Except as may otherwise be provided in this Indenture regarding
control by the Insurer,] until such time as the conditions specified in Section
11.01(a)(i) have been satisfied in full, the holders of 66-2/3% of the then
Outstanding Principal Amount of the Notes shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee.
Notwithstanding the foregoing,

          (i)    no such direction shall be in conflict with any rule of law or
with this Indenture;

          (ii)   the Trustee shall not be required to follow any such direction
which the Trustee reasonably believes might result in any personal liability on
the part of the Trustee for which the Trustee is not indemnified to its
satisfaction; and

          (iii)  the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with any such direction; provided that the
                                                           --------
Trustee shall give notice of any such action to each Noteholder.

                                      53
<PAGE>

          SECTION 7.13.  Undertaking for Costs.
                         ---------------------

          All parties to this Indenture agree (and each holder of any Note by
its acceptance thereof shall be deemed to have agreed) that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the Trustee
[or the Insurer], to any suit instituted by any Noteholder, or group of
Noteholders, holding in the aggregate more than 10% of the then Outstanding
Principal Amount of the Notes, or to any suit instituted by any Noteholder for
the enforcement of the payment of the principal of or interest on any Note on or
after the Maturities for such payments, including the Stated Maturity as
applicable.

          SECTION 7.14.  Waiver of Stay or Extension Laws.
                         --------------------------------

          The Issuer covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

          SECTION 7.15.  Sale of Asset Pool.
                         ------------------

          (a)  The power to effect any sale of any portion of the Asset Pool
described pursuant to Section 7.03 shall not be exhausted by any one or more
sales as to any portion of the Asset Pool remaining unsold, but shall continue
unimpaired until the entire Asset Pool shall have been sold or all amounts
referred to in clauses first through fifth in Section 7.06 shall have been paid.
                       -----         -----
The Trustee may from time to time, upon directions in accordance with Section
7.12, postpone any public sale by public announcement made at the time and place
of such sale.  For any public sale of the Asset Pool, the Trustee shall have
provided each Noteholder with notice of such sale at least two weeks in advance
of such sale which notice shall specify the date, time and location of such
sale.

          (b)  To the extent permitted by applicable law, the Trustee shall not
in any private sale sell to a third party the Asset Pool, or any portion thereof
unless,

          (i)  until such time as the conditions specified in Section 11.01
have been satisfied in full, [the Insurer (if no Insurer Default has occurred
and is continuing) or] the holders of not less than 66-2/3% of the then
Outstanding Principal Amount of the Notes

                                      54
<PAGE>

[(if an Insurer Default has occurred and is continuing)] consent to or direct
the Trustee in writing to make such sale; or

          (ii)   the proceeds of such sale would be not less than the sum of
all amounts due to the Trustee hereunder and all amounts referred to in clause
first through third of Section 7.06 on the Payment Date next succeeding the date
-----         -----
of such sale.

The foregoing provisions shall not preclude or limit the ability of the Trustee
to purchase all or any portion of the Asset Pool at a private sale.

          (c)    In connection with a sale of all or any portion of the Asset
Pool:

          (i)    any one or more Noteholders [or the Insurer] may bid for and
purchase the property offered for sale, and upon compliance with the terms of
sale may hold, retain, and possess and dispose of such property, without further
accountability, and any Noteholder [or the Insurer], as the case may be, may, in
paying the purchase money therefore, deliver in lieu of cash any Outstanding
Notes or claims for interest thereon [(or, in the case of the Insurer, surrender
the Insurer's subrogation rights with respect to such Outstanding Notes or
claims for interest thereon)] for credit in the amount that shall, upon
distribution of the net proceeds of such sale, be payable thereon, and the
Notes, in case the amounts so payable thereon shall be less than the amount due
thereon, shall be returned to the Noteholders after being appropriately stamped
to show such partial payment;

          (ii)   the Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest, without representation,
warranty or recourse, in any portion of the Asset Pool in connection with a sale
thereof;

          (iii)  the Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Issuer to transfer and convey its interest in any
portion of the Asset Pool in connection with a sale thereof, and to take all
action necessary to effect such sale; and

          (iv)   no purchaser or transferee at such a sale shall be bound to
ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.

          (d)    The method, manner, time, place and terms of any sale of all or
any portion of the Asset Pool shall be commercially reasonable.

          (e)    The provisions of this Section 7.15 shall not be construed to
restrict the ability of the Trustee to exercise any rights and powers against
the Issuer or the Asset Pool that are vested in the Trustee by this Indenture,
including, without limitation, the power of the Trustee to proceed against the
collateral subject to the lien of this Indenture and to institute judicial
proceedings for the collection of any deficiency remaining thereafter.

          (f)    The purchase price received by the Trustee in respect of any
sale made in accordance with this Section 7.15 shall be deemed conclusive and
binding on the parties hereto, [the Insurer] and the Noteholders.

                                      55
<PAGE>

                                 ARTICLE VIII

                                  THE TRUSTEE

          SECTION 8.01.  Certain Duties and Responsibilities.
                         -----------------------------------

          (a)   Except during the continuance of an Event of Default known to
the Trustee:

          (i)   the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and the other Transaction
Documents to which it is a party, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and

          (ii)  in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case of
any such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements of
this Indenture.

          (b)   In case an Event of Default has occurred and is continuing to
the actual knowledge of a Responsible Officer of the Trustee, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his own affairs.

          (c)   No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own grossly negligent action, its own grossly
negligent failure to act, or its own willful misconduct, except that:

          (i)   this subsection shall not be construed to limit the effect of
subsection (a) of this Section;

          (ii)  the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was grossly negligent in ascertaining the pertinent facts;

          (iii) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction of
the Noteholders in accordance with Section 7.12 relating to the time, method,
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture; and

          (iv)  no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have

                                      56
<PAGE>

reasonable grounds for believing that repayment of such funds or indemnity
satisfactory to it, against such risk or liability is not assured to it.

          (d)   Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.

          SECTION 8.02.  Notice of Defaults or Events of Default.
                         ---------------------------------------

          Within two Business Days after a Responsible Officer obtaining
knowledge of the occurrence of any Default or Event of Default hereunder, the
Trustee shall transmit, by certified mail return receipt requested, hand
delivery or overnight courier, to (a) all Noteholders, as their names and
addresses appear in the Note Register, [(b) the Insurer] and (c) the Rating
Agencies, notice of such Default or Event of Default hereunder known to the
Trustee, unless such Default or Event of Default shall have been cured or
waived.

          SECTION 8.03.  Certain Rights of Trustee.
                         -------------------------

          (a)   Subject to the provisions of Section 8.01:

          (i)   the Trustee may conclusively rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, note,
debenture, other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed or presented by the proper party or
parties (and the Trustee need not investigate any fact or matter stated in the
document);

          (ii)  any request or direction or action of the Issuer mentioned
herein shall be sufficiently evidenced by an Issuer Order;

          (iii) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate;

          (iv)  the Trustee may consult with counsel as to legal matters and
the advice of any such counsel selected by the Trustee shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;

          (v)   the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Noteholders [or the Insurer] pursuant to this Indenture, unless such
Noteholders [or the Insurer] shall have offered to the Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction;

                                      57
<PAGE>

          (vi)   the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, note,
debenture, other evidence of indebtedness, or other paper or document, [unless
requested in writing to do so by the Insurer (so long as no Insurer Default has
occurred and is continuing) and having been indemnified to its satisfaction by
the Insurer against the costs, expenses and liabilities that it may incur in
making such investigation,] but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Issuer, personally or by agent or attorney;

          (vii)  the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
attorneys, custodians or nominees and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agent, attorney, custodian or
nominee appointed with due care by it hereunder;

          (viii) the Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers;

          (ix)   the Trustee shall not be required to give any bond or surety
in respect of the performance of its powers and duties hereunder;

          (x)    the Trustee shall not be bound to ascertain or inquire as to
the performance or observance of any covenants, conditions or agreements on the
part of the Issuer;

          (xi)   the permissive rights of the Trustee to do things enumerated
in this Indenture shall not be construed as a duty and the Trustee shall not be
answerable for other than its gross negligence or willful default; and

          (xii)  in the event that the Trustee is also acting as paying agent or
transfer agent and registrar hereunder, the rights and protections afforded to
the Trustee pursuant to this Article VIII shall also be afforded to such paying
agent or transfer agent or registrar.

          (b)    The recitals contained herein and in the Notes, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Issuer, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Notes, except to the extent provided by the Trustee's
certificate of authentication on the Notes. The Trustee shall not be accountable
for the use or application by the Issuer of the proceeds of the Notes.

                                      58
<PAGE>

          SECTION 8.04.  May Hold Notes.
                         --------------

          The Trustee, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with the Issuer with the same
rights it would have if it were not Trustee.

          SECTION 8.05.  Money Held in Trust.
                         -------------------

          Money and investments held by the Trustee shall be held in trust in
one or more trust accounts hereunder, but need not be segregated from other
funds except to the extent required by law.

          SECTION 8.06.  Compensation, Reimbursement, etc.
                         --------------------------------

          The Servicer agrees:

          (a)  to pay to the Trustee from time to time such compensation for all
services rendered by it hereunder as the Issuer and the Trustee may agree in
writing (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust); and

          (b)  to reimburse the Trustee upon its request, for all reasonable
expenses, disbursements, and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement, or advance as may be attributable to its
negligence or bad faith.

          SECTION 8.07.  Corporate Trustee Required; Eligibility.
                         ---------------------------------------

          There shall at all times be a Trustee hereunder which shall (a) be a
corporation organized and doing business under the laws of the United States of
America, any state thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers; (b) have a combined capital and surplus
of at least $50,000,000; (c) be subject to supervision or examination by federal
or state authority; and (d) at the time of appointment, shall have long-term
debt obligations (or, if the Trustee does not have outstanding long-term debt
obligations and is a subsidiary of a holding company, which holding company
shall have long-term obligations) having a credit rating of at least "A-" from
S&P and "Baa3" from Moody's.

          If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.  If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.

          This Indenture shall always have a Trustee who satisfies the
requirements of Section 310(a)(1) of the Trust Indenture Act.  The Trustee is
subject to the provisions

                                      59
<PAGE>

of Section 310(b) of the Trust Indenture Act regarding disqualification of a
trustee upon acquiring any conflicting interest.

          SECTION 8.08.  Resignation and Removal; Appointment of Successor.
                         -------------------------------------------------

          (a)  No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 8.09.

          (b)  The Trustee may resign at any time by giving written notice
thereof to the Issuer, [the Insurer (if no Insurer Default has occurred and is
continuing) and, if an Insurer Default has occurred and is continuing,] the
Noteholders, by mailing notice of resignation by first-class mail, postage
prepaid, to the Issuer [or the Insurer] at their respective addresses set forth
in the Assignment and Servicing Agreement and to Noteholders at their addresses
appearing on the Note Register.

          (c)  The Trustee may be removed at any time by written notice of [the
Insurer (if no Insurer Default has occurred and is continuing) or] the holders
of not less than 66-2/3% of the then Outstanding Principal Amount of the Notes
[(if an Insurer Default has occurred and is continuing)] delivered to the
Trustee and the Issuer.

          (d)  If the Trustee shall resign, be removed, or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Issuer, with the consent of [the Insurer (if no Insurer Default has occurred and
is continuing) or] the holders of 66-2/3% of the then Outstanding Principal
Amount of the Notes [(if an Insurer Default has occurred and is continuing)], by
an act of the Issuer, shall promptly appoint a successor Trustee.

          (e)  If no successor Trustee shall have been so appointed as
hereinbefore provided and accepted appointment in the manner hereinafter
provided within 30 days after any such resignation or removal, existence of
incapability, or occurrence of such vacancy, the Trustee, [the Insurer (if no
Insurer Default has occurred and is continuing) or] any Noteholder [(if an
Insurer Default has occurred and is continuing)] may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

          (f)  The Issuer shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to [the Insurer at
its address set forth in the Assignment and Servicing Agreement and to] all
Noteholders as their names and addresses appear in the Note Register and to each
Rating Agency. Each notice shall include the name of the successor Trustee and
the address of its Corporate Trust Office.

          (g)  The Issuer may remove the Trustee if the Trustee fails to comply
with Section 8.07 of this Indenture.

          (h)  If the Trustee after written request by any Noteholder who has
been a Noteholder for at least six months fails to comply with Section 310(b) of
the Trust Indenture Act, such Noteholder may petition any court of competent
jurisdiction, for the

                                      60
<PAGE>

removal of the Trustee and the appointment of a successor Trustee acceptable to
the Insurer.

          (i)  The Issuer (with the consent of the Insurer, if no Insurer
Default has occurred and is continuing) may and shall at the direction of [the
Insurer (if no Insurer Default has occurred and is continuing) or] the
Noteholders evidencing more than 25% of the aggregate Outstanding Principal
Amount of the Notes [(if an Insurer Default has occurred and is continuing),]
remove the Trustee if the Trustee ceases to be eligible to continue as such
under this Indenture and fails to resign after written request therefor.

          SECTION 8.09.  Acceptance of Appointment by Successor.
                         --------------------------------------

          (a)  Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Issuer and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on request of the Issuer
or the successor Trustee, such retiring Trustee shall, upon payment of its
charges and expenses, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.  Upon request of any such
successor Trustee, the Issuer shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.

          (b)  No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.

          SECTION 8.10.  Merger, Conversion, Consolidation or Succession to
                         --------------------------------------------------
Business.
--------

          Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such Person
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.  In case any Notes shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion,
or consolidation to such authenticating Trustee may adopt such authentication
and deliver the Notes so authenticated with the same effect as if such successor
Trustee had itself authenticated such Notes.  The Trustee shall provide prompt
written notice to each Rating Agency of any event referenced in this Section
8.10.

                                      61
<PAGE>

          SECTION 8.11.  Co-Trustees and Separate Trustees.
                         ---------------------------------

          (a)   At any time or times, if the Issuer, the Trustee or any
Noteholder determines that it is necessary for the purpose of meeting the legal
requirements of any jurisdiction in which any of the Asset Pool may at the time
be located, the Issuer and the Trustee (with the written consent of the Insurer,
if no Insurer Default has occurred and is continuing) shall have power to
appoint, and, upon the written request of the Trustee [or the Insurer (if no
Insurer Default has occurred and is continuing)] or the holders of a majority of
the then Outstanding Principal Amount of the Notes [(if an Insurer Default has
occurred and is continuing),] the Issuer shall for such purpose join with the
Trustee in the execution, delivery, and performance of all instruments and
agreements necessary or proper to appoint, one or more Persons either to act as
co-trustee, jointly with the Trustee, of all or any part of such Asset Pool, or
to act as separate trustee of any such property, in either case with such powers
as may be provided in the instrument of appointment, and to vest in such Person
or Persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Section. If the
Issuer does not join in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Event of Default has occurred and is
continuing, the Trustee (if no Insurer Default has occurred and is continuing),
or the holders of a majority of the then Outstanding Principal Amount of the
Notes (if an Insurer Default has occurred and is continuing), alone shall have
power to make such appointment.

          (b)   Should any written instrument from the Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Issuer.

          (i)   Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms:

          (ii)  The Notes shall be authenticated and delivered and all rights,
powers, duties, and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder, shall be exercised, solely by
the Trustee.

          (iii) The rights, powers, duties, and obligations hereby conferred
or imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Trustee or by the Trustee and such co-trustee or separate trustee jointly, as
shall be provided in the instrument appointing such co-trustee or separate
trustee, except to the extent that, under any law of any jurisdiction in which
any particular act is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or separate
trustee.

          (iv)  The Trustee at any time, by an instrument in writing executed
by it, [with the concurrence of the Issuer evidenced by an Issuer Order and the
written concurrence of the Insurer (if no Insurer Default has occurred and is
continuing),] may

                                      62
<PAGE>

accept the resignation of or remove any co-trustee or separate trustee appointed
under this Section, and, in case an Event of Default has occurred and is
continuing, the Trustee shall have power to accept the resignation of, or
remove, any such co-trustee or separate trustee [without the concurrence of the
Issuer (if no Insurer Default has occurred and is continuing).] Upon the written
request of the Trustee, the Issuer shall join with the Trustee in the execution,
delivery and performance of all instruments and agreements necessary or proper
to effectuate such resignation or removal. A successor to any co-trustee or
separate trustee so resigned or removed may be appointed in the manner provided
in this Section.

          (v)   No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Trustee or any other such trustee
hereunder and the Trustee shall not be personally liable by reason of any act or
omission of any co-trustee or other such separate trustee hereunder selected by
the Trustee with due care or appointed in accordance with directions to the
Trustee pursuant to this Section 8.11.

          (vi)  Any Act of Noteholders delivered to the Trustee shall be deemed
to have been delivered to each such co-trustee and separate trustee.

          SECTION 8.12.  Acceptance by Trustee.
                         ---------------------

          The Trustee hereby acknowledges the conveyance of the Asset Pool and
the receipt of the Leases and the other assets in the Asset Pool granted by the
Issuer hereunder and declares that the Trustee, through a custodian, will hold
such Leases and other Asset Pool conveyed by the Issuer in trust, for the use
and benefit of all Noteholders and the Insurer subject to the terms and
provisions hereof.

          SECTION 8.13.  Preferential Collection of Claims Against the Issuer.
                         ----------------------------------------------------

          The Trustee is subject to Trust Indenture Act Section 311(a),
excluding any creditor relationship listed in Trust Indenture Act Section
311(b).  A Person who has resigned or been removed as Trustee shall be subject
to Trust Indenture Act Section 311(a) to the extent indicated therein.

          SECTION 8.14.  Reports by Trustee to Noteholders.
                         ---------------------------------

          To the extent required by the Trust Indenture Act, within 60 days
after each October 15, following the date of this Indenture, the Trustee shall
mail to the Insurer and to Noteholders a brief report dated as of such reporting
date that complies with Trust Indenture Act Section 313(a), if such a report is
required pursuant to Trust Indenture Act Section 313(a).  The Trustee also shall
comply with Trust Indenture Act Section 313(b).  The Trustee shall also transmit
by mail all reports as required by Trust Indenture Act Section 313(c).

          A copy of each such report required under Trust Indenture Act Section
313 shall, at the time of such transmission to Noteholders be filed with the
Commission and with each stock exchange or other market system on which the
Notes are listed.  The Issuer or any other obligor upon the Notes shall notify
the Trustee in writing if the Notes become listed on any stock exchange or
market trading system.

                                      63
<PAGE>

          SECTION 8.15.  No Proceedings.
                         --------------

          The Trustee hereby agrees that it will not, with respect to its fees
and expenses, directly or indirectly institute, or cause to be instituted,
against the Issuer any proceeding of the type referred to in Section 7.01(d) or
(e) so long as there shall not have elapsed one year plus one day since the
latest maturing Notes have been paid in full in cash, provided, however that
nothing herein shall prohibit the Trustee from filing proofs of claim or
otherwise participating in any such proceeding.

          SECTION 8.16.  Appointment and Powers.
                         ----------------------

          Subject to the terms and conditions hereof, each of the Issuer Secured
Parties hereby appoints _______________________________ as the Trustee with
respect to the Asset Pool and as initial Paying Agent, and _____________________
hereby accepts such appointment and agrees to act as Trustee with respect to the
Asset Pool for the Issuer Secured Parties, to maintain custody and possession of
the assets in the Asset Pool (except as otherwise provided herein and in the
Assignment and Servicing Agreement) and to perform the other duties of the
Trustee in accordance with the provisions of this Indenture and the Assignment
and Servicing Agreement. Each Issuer Secured Party hereby authorizes the Trustee
to take such action on its behalf, and to exercise such rights, remedies, powers
and privileges hereunder, as [the Insurer (if no Insurer Default has occurred
and is continuing) or] the holders of not less than 66 2/3% of the then
Outstanding Principal Amount of the Notes [(if an Insurer Default has occurred
and is continuing)] may direct and as are specifically authorized to be
exercised by the Trustee by the terms hereof, together with such actions,
rights, remedies, powers and privileges as are reasonably incidental thereto.
The Trustee shall act upon and in compliance with the written instructions of
[the Insurer or] the Noteholders given in accordance with the provisions of this
Indenture promptly following receipt of such written instructions; provided that
the Trustee shall not act in accordance with any instructions (i) which are not
authorized by, or in violation of the provisions of, this Indenture, (ii) which
are in violation of any applicable law, rule or regulation or (iii) for which
the Trustee has not received indemnity satisfactory to it. Receipt of such
instructions shall not be a condition to the exercise by the Trustee of its
express duties hereunder, except where this Indenture provides that the Trustee
is permitted to act only following and in accordance with such instructions.

          SECTION 8.17.  Performance of Duties.
                         ---------------------

          The Trustee shall have no duties or responsibilities except those
expressly set forth in this Indenture and the other Transaction Documents to
which the Trustee is a party or as directed in writing by the Insurer or the
Noteholders in accordance with this Indenture.  The Trustee shall not be
required to take any discretionary action hereunder except at the written
direction and with the indemnification of the Controlling Party and as provided
in Section 7.12.  The Trustee shall, and hereby agrees that it will, perform all
of the duties and obligations required of it under this Indenture and the other
Transaction Documents to which it is a party.

                                      64
<PAGE>

               SECTION 8.18.  [Control by the Insurer.
                               ----------------------

          The Trustee shall comply with notices and instructions given by the
Issuer only if accompanied by the written consent of the Insurer, except that if
any Event of Default has occurred and is continuing, the Trustee shall act upon
and comply with notices and instructions given by the Insurer alone in the place
and stead of the Issuer.]

                                  ARTICLE IX

                                   COVENANTS

          SECTION 9.01.  Payment of Principal and Interest.
                         ---------------------------------

          The Issuer will duly and punctually pay the principal of and interest
on the Notes in accordance with the terms of the Notes and this Indenture.

          SECTION 9.02.  Maintenance of Office or Agency; Chief Executive
                         ------------------------------------------------
Office.
------

          (a)  The Issuer will maintain at the Corporate Trust Office an office
or agency where Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Issuer in respect of the
Notes and this Indenture may be served. The Issuer hereby appoints the Trustee
as its agent to receive all such presentations, surrenders, notices and demands.

          (b)  The chief executive office of each of the Issuer, the Seller and
the Servicer, and the office at which each of the Issuer, the Seller and the
Servicer maintains its records with respect to the Leases, its interests in the
Equipment, and the transactions contemplated hereby, is currently located in
Macon, Georgia. None of the Issuer, the Seller or the Servicer will change the
location of such offices without giving the Trustee and the Insurer at least 30
days prior written notice thereof.

          SECTION 9.03.  Money for Payments to Noteholders to be Held in Trust.
                         -----------------------------------------------------

          (a)  All payments of amounts due and payable with respect to any Notes
that are to be made from amounts withdrawn from the Collection Account pursuant
to Section 3.03(b) or Section 7.06 shall be made on behalf of the Issuer by the
Trustee, and no amounts so withdrawn from the Collection Account for payments of
Notes shall be paid over to the Issuer under any circumstances except as
provided in this Section 9.03 or in Section 3.03(b), Section 3.04(b) or Section
7.06.

          (b)  In making payments hereunder, the Trustee will:

          (i)  allocate all sums received for payment to the Noteholders on
each Payment Date among such Noteholders pursuant to Section 3.03(b) or Section
7.06, as applicable, in accordance with the information known to the Trustee;

                                      65
<PAGE>

          (ii)   hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and pay such sums to such Persons as herein provided; and

          (iii)  comply with all requirements of the Code (or any successor
statutes), and all regulations thereunder, with respect to the withholding from
any payments made by it on any Notes of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting requirements in connection
therewith.

          Whenever the Issuer shall have one or more Paying Agents, it will,
prior to each due date of the principal of or interest on any Notes, deposit
with a Paying Agent a sum sufficient to pay the principal or interest so
becoming due, such sum to be held in trust for the benefit of the Noteholders
entitled to such principal or interest, and (unless such Paying Agent is the
Trustee) the Issuer will promptly notify the Trustee of its action or failure so
to act.

          The Issuer will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:

          (1)    hold all sums held by it for the payment of the principal of or
     interest on Notes in trust for the benefit of the Persons entitled thereto
     until such sums shall be paid to such Persons or otherwise disposed of as
     herein provided, and

          (2)    give the Trustee notice of any default by the Issuer (or any
     other obligor upon the Notes) in the making of any payment of principal or
     interest.

          (c)    Except as required by applicable law, any money held by the
Trustee in trust for the payment of any amount due with respect to any Note and
remaining unclaimed for three years after such amount has become due and payable
to the Noteholder shall be discharged from such trust and, subject to applicable
escheat laws, paid to the Issuer upon request; and such Noteholder shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Trustee with respect to such trust money shall
thereupon cease.

          SECTION 9.04.  Corporate Existence; Merger; Consolidation, etc.
                         -----------------------------------------------

          (a)    The Issuer will keep in full effect its existence and rights as
a limited liability company under the laws of the State of Delaware.

          (b)    The Issuer shall at all times observe and comply in all
material respects with (i) all laws applicable to it, (ii) all requisite and
appropriate organizational and other formalities in the management of its
business and affairs and the conduct of the transactions contemplated hereby and
by the Underwriting Agreement and the Assignment and Servicing Agreement.

                                      66

<PAGE>

     (c)    The Issuer shall not (i) consolidate or merge with or into any other
Person or convey or transfer its properties and assets substantially as an
entirety to any other Person or (ii) commingle its assets with those of any
other Person.

     9.05.  Protection of Asset Pool; Further Assurances.
            --------------------------------------------

            The Issuer will from time to time execute and deliver all such
supplements and amendments hereto and all such Financing Statements,
continuation statements, instruments of further assurance, and other
instruments, and will take such other action as may be necessary or advisable
to:

            (i)     Grant more effectively all or any portion of the Asset Pool;

            (ii)    maintain or preserve the Lien of this Indenture or carry out
more effectively the purposes hereof;

            (iii)   publish notice of, or protect the validity of, any Grant
made or to be made by this Indenture and perfect the security interest
contemplated hereby in favor of the Trustee in each of the Leases, and all other
property included in the Asset Pool;

            (iv)    enforce or cause the Servicer to enforce any of the Leases;
or

            (v)     preserve and defend title to the Leases (including the right
to receive all payments due or to become due thereunder), the interests in the
Equipment, or other property included in the Asset Pool and preserve and defend
the rights of the Trustee and the Noteholders in such Leases (including the
right to receive all payments due or to become due thereunder), interests in the
Equipment and other property against the claims of all Persons and parties.

The Issuer, upon the Issuer's failure to do so, hereby designates the Trustee
its agent and attorney-in-fact to execute any Financing Statement or
continuation statement required pursuant to this Section 9.05; provided,
                                                               --------
however, that such designation shall not be deemed to create a duty in the
-------
Trustee to monitor the compliance of the Issuer with the foregoing covenants;
and provided, further, that the duty of the Trustee to execute any instrument
    --------  -------
required pursuant to this Section 9.05 shall arise only if a Responsible Officer
of the Trustee has actual knowledge of any failure of the Issuer to comply with
the provisions of this Section 9.05.

            SECTION 9.06.  [Reserved].
                           ----------

            SECTION 9.07.  Performance of Obligations; Assignment and Servicing
                           ----------------------------------------------------
Agreement.
---------

            (a)   The Issuer will punctually perform and observe all of its
obligations and agreements contained in the Notes and the Transaction Documents.

            (b)   The Issuer will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any Lease or any other instrument included in the
Asset Pool, or which

                                      67
<PAGE>

would result in the amendment, hypothecation, subordination, termination, or
discharge of, or impair the validity or effectiveness of, any Lease or such
other instrument, except as expressly provided in this Indenture or the
Assignment and Servicing Agreement.

            (c)   If any Authorized Officer shall have knowledge of the
occurrence of a default under the Assignment and Servicing Agreement, the Issuer
shall promptly notify the Trustee and the Noteholders thereof, and shall specify
in such notice the action, if any, the Issuer is taking in respect of such
default. Unless consented to by the Insurer (if no Insurer Default has occurred
and is continuing) or the holders of 66 2/3% of the then Outstanding Principal
Amount of the Notes (if an Insurer Default has occurred and is continuing), the
Issuer may not waive any default under or amend the Assignment and Servicing
Agreement.

            SECTION 9.08.  Negative Covenants.
                           ------------------

            The Issuer will not:

            (a)   sell, transfer, exchange or otherwise dispose of any portion
of the Asset Pool except as expressly permitted by this Indenture;

            (b)   claim any credit on, or make any deduction from, the principal
of, or interest on, any of the Notes by reason of the payment of any taxes
levied or assessed upon any portion of the Asset Pool;

            (c)   engage in any business or activity other than in connection
with, or relating to the ownership of, the Leases and the interests in the
Equipment (and other leases to which the Originator is a party and the interests
in the equipment subject thereto assigned to the Issuer by the Seller in
connection with the issuance of other series of the Issuer's Lease-Backed Notes
as contemplated by the Registration Statement), the issuance of the Notes (and
other series of the Issuer's Lease-Backed Notes as contemplated by the
Registration Statement), and the specific transactions contemplated by the
Transaction Documents;

            (d)   become liable for, issue, incur, assume, or allow to remain
outstanding any indebtedness, or guaranty any indebtedness of any Person, other
than the Notes, except as contemplated by this Indenture, the Registration
Statement and the Assignment and Servicing Agreement;

            (e)   seek dissolution or liquidation in whole or in part or
reorganization of its business or affairs;

            (f)   (i) permit the validity or effectiveness of this Indenture or
any Grant hereby to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations under this Indenture,
except as may be expressly permitted hereby, (ii) permit any Lien to be created
on or to extend to or otherwise arise upon or burden the Asset Pool or any part
thereof or any interest therein or the proceeds thereof other than the lien of
this Indenture, or (iii) subject to Section

                                      68
<PAGE>

4.01(c) of the Assignment and Servicing Agreement, permit the lien of this
Indenture not to constitute a valid first priority security interest in the
Asset Pool; or

             (g)   make any loan or advance to any Affiliate of the Issuer or to
any other Person.

             SECTION 9.09.  Information as to Issuer.
                            ------------------------

             The Issuer shall deliver to the Trustee [and the Insurer] and, the
Trustee shall deliver to each Rating Agency and to each holder of Outstanding
Notes (and, upon the request of any Noteholder, to any prospective transferee of
any Notes):

             (a)   Notice of Event of Default - immediately upon becoming aware
of the existence of any condition or event which constitutes a Default or an
Event of Default, a written notice describing its nature and period of existence
and what action the Issuer is taking or proposes to take with respect thereto;
and

             (b)   Report on Proceedings - promptly upon the Issuer's becoming
aware of (i) any proposed or pending investigation of it by any Governmental
Authority or agency, or (ii) any pending or proposed court or administrative
proceeding which involves or may involve the possibility of materially and
adversely affecting the properties, business, prospects, profits or condition
(financial or otherwise) of the Issuer, a written notice specifying the nature
of such investigation or proceeding and what action the Issuer is taking or
proposes to take with respect thereto and evaluating its merits.

             SECTION 9.10.  Taxes.
                            -----

             (a)   The Issuer shall pay all taxes when due and payable or levied
against its assets, properties or income, including any property that is part of
the Asset Pool.

             (b)   The parties hereto agree that it is their mutual intent that,
for all applicable tax purposes, the Notes will constitute indebtedness.
Further, each party hereto and each Noteholder (by accepting and holding a Note)
hereby covenants to every other party hereto and to every other Noteholder to
treat the Notes as indebtedness for all applicable tax purposes in all tax
filings, reports and returns and otherwise, and further covenants that neither
it nor any of its Affiliates will take, or participate in the taking of or
permit to be taken, any action that is inconsistent with the treatment of the
Notes as indebtedness for tax purposes. All successors and assignees of the
parties hereto shall be bound by the provisions hereof.

             SECTION 9.11.  Indemnification.
                            ---------------

             The Issuer agrees to indemnify and hold harmless the Trustee (and
its officers, directors employees and agents), [the Insurer] and each Noteholder
(each an "Indemnified Party") against any and all liabilities, losses, damages,
penalties, costs and expenses (including costs of defense and legal fees and
expenses) which may be incurred or suffered by such Indemnified Party without
gross negligence or willful misconduct on the part of the Indemnified Party as a
result of claims, actions, suits or judgments asserted

                                      69
<PAGE>

or imposed against it and arising out of the transactions contemplated hereby or
by the Assignment and Servicing Agreement, including without limitation, any
claims resulting from any use, operation, maintenance, repair, storage or
transportation of any item of Equipment, whether or not in the Issuer's
possession or under its control, and any tort claims and any fines or penalties
arising from any violation of the laws or regulations of any Governmental
Authority; provided that, all amounts payable pursuant to this Section 9.11
           --------
shall be fully subordinated to amounts payable under the Notes, shall be without
recourse to the Issuer except to the extent that all amounts otherwise due and
payable under the terms of this Indenture have been fully paid and shall not, to
the extent that such amounts are unpaid, constitute a claim against the Issuer
except to the extent that all amounts otherwise due and payable under the terms
of this Indenture have been fully paid. This section shall survive the
termination of this Indenture and the earlier removal or resignation of the
Trustee.

             SECTION 9.12.  Commission Reports; Reports to Trustee; Reports to
                            --------------------------------------------------
Noteholders.
-----------

             To the extent it has not satisfied the following requirements by
reporting under Section 9.09 hereof, the Issuer shall:

             (a)   file with the Trustee [and the Insurer], within 15 days after
the Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports which the
Issuer may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act (or copies of such portions thereof as may be
prescribed by rules and regulations of the Commission); or, if the Issuer is not
required to file with the Commission information, documents or reports pursuant
to either Section 13 or Section 15(d) of the Exchange Act, then the Issuer will
file with the Trustee and with the Commission, in accordance with rules and
regulations prescribed by the Commission, such of the supplementary and periodic
information, documents and reports required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed in such rules and regulations;

             (b)   file with the Trustee, [the Insurer] and with the Commission,
in accordance with the rules and regulations prescribed by the Commission, such
additional information, documents and reports with respect to compliance by the
Issuer with the conditions and covenants provided for in this Indenture as may
be required by such rules and regulations; and

             (c)   furnish to [the Insurer and to] the Trustee for distribution
to the Noteholders, as the names and addresses of such Noteholders appear in the
Note Register, in the manner and to the extent provided in Section 8.14 hereof,
such summaries of any information, documents and reports required to be filed
with the Trustee pursuant to the provisions of Subsections (a) and (b) of this
Section 9.12 as may be required to be provided to such Noteholders by the rules
and regulations of the Commission under the provisions of the Trust Indenture
Act.

                                      70
<PAGE>

                                   ARTICLE X

                            SUPPLEMENTAL INDENTURES

             SECTION 10.01.  Supplemental Indentures Without Consent of
                             ------------------------------------------
Noteholders.
-----------

             (a)   Without the consent of any Noteholders, [the Issuer,] by an
Issuer Order, and the Trustee, at any time and from time to time, may, [with the
consent of the Insurer (if no Insurer Default has occurred and is continuing)]
enter into one or more indentures supplemental hereto, for any of the following
purposes:

             (i)      to add to the covenants of the Issuer for the benefit of
the Noteholders, or to surrender any right or power herein conferred upon the
Issuer;

             (ii)     to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision herein; or

             (iii)    to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or to better assure, convey and
confirm unto the Trustee any property subject or required to be subjected to the
lien of this Indenture; provided such action pursuant to this Section 10.01(a)
                        --------
shall not adversely affect the interests of the Noteholders in any respect or in
the reduction or withdrawal of the then current ratings of the Outstanding
Notes.

             (b)      The Trustee shall promptly deliver to each Noteholder and
each Rating Agency a copy of any supplemental indenture entered into pursuant to
Section 10.01(a).

             SECTION 10.02.  Supplemental Indentures with Consent of
                             ---------------------------------------
Noteholders.
-----------

             (a)      With the consent of [the Insurer (if no Insurer Default
has occurred and is continuing) or] the holders of not less than 66-2/3% of the
then Outstanding Principal Amount of the Notes and by Act of said Noteholders
delivered to the Issuer and the Trustee [(if an Insurer Default has occurred and
is continuing)], the Issuer, by an Issuer Order, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Noteholders under
this Indenture; provided, that[, subject to the express rights of the Insurer
                --------
under the Transaction Documents,] no supplemental indenture shall be entered
into if it would result in the reduction or withdrawal of the then current
ratings of the Outstanding Notes and no supplemental indenture shall, without
the consent of the holder of each Outstanding Note affected thereby:

             (i)      change the Stated Maturity of any Note or the Principal
Payments or Interest Payments due or to become due on any Payment Date with
respect to any Note, or change the priority of payment thereof as set forth
herein, or reduce the principal amount thereof or the Note Interest Rate
thereon, or change the place of payment where, or the coin or currency in which,
any Note or the interest thereon is payable, or impair the

                                      70
<PAGE>

right to institute suit for the enforcement of any such payment on or after the
Maturity thereof;

          (ii)   reduce the percentage of the Outstanding Principal Amount of
the Notes the consent of whose Noteholders is required for any such supplemental
indenture, for any waiver of compliance with provisions of this Indenture or
Events of Default and their consequences, or for any Act of Noteholders;

          (iii)  modify any of the provisions of this Section except to
increase any percentage or fraction set forth therein or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the holder of each Outstanding Note affected thereby;

          (iv)   modify or alter the provisions of the proviso to the
definition of the term "Outstanding"; or

          (v)    permit the creation of any Lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the Asset Pool or,
except as provided in Sections 5.01 or 5.02, terminate the lien of this
Indenture on any property at any time subject hereto or deprive any Noteholder
of the security afforded by the lien of this Indenture.

          (b)    The Trustee shall promptly deliver to [the Insurer and] each
Noteholder and each Rating Agency a copy of any supplemental indenture entered
into pursuant to this Section 10.02.

          SECTION 10.03.  Execution of Supplemental Indentures.
                          ------------------------------------

          In executing any supplemental indenture or any amendment, modification
or supplement to any other Transaction Document the Trustee [and the Insurer]
shall be entitled to receive, and (subject to Section 8.01) shall be, fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such instrument is authorized or permitted by this Indenture or such applicable
Transaction Document.  The Trustee may, but shall not be obligated to, enter
into any supplemental indenture which affects the Trustee's own rights, duties,
obligations, immunities or indemnities under this Indenture or otherwise.

          SECTION 10.04.  Effect of Supplemental Indentures.
                          ---------------------------------

          Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes, and every
Noteholder of Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.

          SECTION 10.05.  Reference in Notes to Supplemental Indentures.
                          ---------------------------------------------

          Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such

                                      72
<PAGE>

supplemental indenture. If the Issuer shall so determine, new Notes so modified
as to conform, in the opinion of the Issuer, to any such supplemental indenture
may be prepared and executed by the Issuer and authenticated and delivered by
the Trustee in exchange for Outstanding Notes.

             SECTION 10.06.  Compliance with Trust Indenture Act.
                             -----------------------------------

             Every amendment, supplement or waiver to this Indenture or the
Notes shall comply with the Trust Indenture Act as then in effect.

                                  ARTICLE XI

                          SATISFACTION AND DISCHARGE

             SECTION 11.01.  Satisfaction and Discharge of Indenture.
                             ---------------------------------------

             (a)   This Indenture shall cease to be of further effect (except as
to any surviving rights of registration of transfer or exchange of Notes herein
expressly provided for), and the Trustee, on demand of and at the expense of the
Issuer, shall execute proper instruments provided to it acknowledging
satisfaction and discharge of this Indenture, when

             (i)   100 days shall have elapsed since either

                   (A) all Notes theretofore authenticated and delivered (other
             than (1) Notes which have been destroyed, lost or stolen and which
             have been replaced or paid as provided in Section 2.04 and (2)
             Notes for whose payment money has theretofore been deposited in
             trust or segregated and held in trust by the Issuer and thereafter
             repaid to the Issuer or discharged from such trust, as provided in
             Section 9.03(c)) have been delivered to the Trustee for
             cancellation; or

                   (B) the final installments of principal on all such Notes not
             theretofore delivered to the Trustee for cancellation

                       (1)  have become due and payable, or

                       (2)  will become due and payable at their Stated
                            Maturity, as applicable, within one year,

             and the Issuer has irrevocably deposited or caused to be deposited
             with the Trustee as trust funds in trust for the purpose an amount
             sufficient to pay and discharge the entire indebtedness on such
             Notes not theretofore delivered to the Trustee for cancellation,
             for principal and interest to the date of such deposit (in the case
             of Notes which have become due and payable) or to the Stated
             Maturity thereof;

             (ii)   the Issuer has paid or caused to be paid all Insurer Secured
Obligations and all Trustee Secured Obligations; and

                                      73
<PAGE>

             (iii)  the Issuer has delivered to the Trustee [and the Insurer] an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.

At such time, the Trustee shall deliver to the Issuer or, upon an Issuer Order,
its assignee, all cash, securities and other property held by it as part of the
Asset Pool other than funds deposited with the Trustee pursuant to Section
11.01(a)(i)(B), for the payment and discharge of the Notes.

             (b)   Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Issuer to the Trustee under Sections 8.06 and
9.11, and, if money shall have been deposited with the Trustee pursuant to
Section 11.01(a)(i)(B), the obligations of the Trustee under Section 11.02 and
Section 9.03(c), shall survive.

             (c)   The Trustee shall provide prompt written notice to each
Rating Agency of any satisfaction and discharge of this Indenture pursuant to
this Article 11.

             SECTION 11.02.  Application of Trust Money.
                             --------------------------

             Subject to the provisions of Section 9.03(c), all money deposited
with the Trustee pursuant to Sections 11.01 and 9.03 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment to the Persons entitled thereto, of the principal and
interest for whose payment such money has been deposited with the Trustee.

                                  ARTICLE XII

                                 MISCELLANEOUS

             SECTION 12.01.  Trust Indenture Act Controls.
                             ----------------------------

             If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by operation of Trust Indenture Act Section 318(a), the
duties imposed by Section 318(c) shall control.

             SECTION 12.02.  Communication by Noteholders with Other
                             ---------------------------------------
Noteholders.
-----------

             Noteholders may communicate, pursuant to Trust Indenture Act
Section 312(b), with other Noteholders with respect to their rights under this
Indenture or the Notes. The Issuer, the Trustee, the Note Registrar and all
other parties shall have the protection of Trust Indenture Act Section 312(c).

             SECTION 12.03.  Location of Leases.
                             ------------------

             Subject to the provisions of Section 1.04(e) of the Assignment and
Servicing Agreement, the Servicer shall maintain the Leases at its office in
Macon, Georgia or at such other offices of the Servicer as shall from time to
time be identified by

                                      74
<PAGE>

prior written notice to the Trustee [and the Insurer]. Subject to the foregoing,
the Servicer may temporarily move individual Leases or any portion thereof
without notice as necessary to conduct collection and other servicing
activities.

             SECTION 12.04.  Officers' Certificate and Opinion of Counsel as to
                             --------------------------------------------------
Conditions Precedent.
--------------------

             Upon any request or application by the Issuer (or any other obligor
upon the Notes) to the Trustee to take any action under this Indenture or the
other Transaction Documents, the Issuer (or such other Obligor) shall furnish to
the Trustee [and the Insurer]:

             (a)   an Officers' Certificate (which shall include the statements
set forth in Section 12.05) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and

             (b)   an Opinion of Counsel (which shall include the statements set
forth in Section 12.05) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been complied with.

             SECTION 12.05.  Statements Required in Certificate or Opinion.
                             ---------------------------------------------

             Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

             (a)   a statement that the Person making such certificate or
opinion has read such covenant or condition;

             (b)   a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;

             (c)   a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and

             (d)   a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.

             SECTION 12.06.  Nonpetition.
                             -----------

             The Trustee shall not petition or otherwise invoke the process of
any Governmental Authority for the purpose of commencing or sustaining a case
against the Issuer under any federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or any substantial part of
its respective property, or ordering the winding up or liquidation of the
affairs of the Issuer, provided, however, that nothing herein shall

                                      75
<PAGE>

prohibit the Trustee from filing proofs of claim or otherwise participating in
any such proceedings instituted by any other Person.

                                      76
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.

                       IKON RECEIVABLES FUNDING, LLC,
                       as Issuer

                        By:   IKON Receivables Funding, Inc.,
                              its Manager

                        By:________________________
                        Name:
                        Title:

                       ____________________________
                       as Trustee

                       By:_________________________
                       Name:
                       Title:

                       IOS CAPITAL,  INC., as Servicer

                       By:_________________________
                       Name:
                       Title:

                                      77
<PAGE>

                               CLASS [A-1] NOTE

  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
  DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
  ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
  CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
  AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
  MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED
  REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
  OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
  HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                         IKON RECEIVABLES FUNDING, LLC

              ______% CLASS [A-1] LEASE-BACKED NOTE, SERIES _____

CUSIP NO.  _______________
No. R-1                                                            $____________

          IKON RECEIVABLES FUNDING, LLC, a limited liability company duly
organized and existing under the laws of Delaware (herein called the "Issuer",
which term includes any successor Person under the Indenture referred to
herein), for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of _______________________________________________
($_____________), payable in monthly installments beginning ________, 200_, in
accordance with the Indenture.  Interest will accrue on the unpaid principal
hereof from the date of issuance, at the rate of ______% per annum, until the
full amount of principal hereof is otherwise paid or made available for payment
and shall be computed on the basis of a year of 360 days and the actual number
of days in the period since the last Payment Date or with respect to the
________, 200_, Payment Date, since ________, 200_.

          Principal and interest on this Class [A-1] Note shall be paid on the
15th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing ________, 200_, either by check to the
registered address of the Holder of this Class [A-1] Note as of the relevant
Record Date or by wire transfer to an account at a bank in the United States as
the Holder shall specify, as provided more fully in the Indenture; provided,
                                                                   --------
that the final payment of principal and interest in respect of the Notes shall
be payable to the Holder of this Note only upon presentation and surrender of
this Note at the Corporate Trust Office of the Trustee or at the principal
office of any Paying Agent appointed pursuant to the Indenture.
<PAGE>

          This Class [A-1] Note is one of a duly authorized issue of Class A
Notes of the Issuer designated as its ______% Class [A-1] Lease-Backed Notes,
Series ____" (herein called the "Class [A-1] Notes") limited in aggregate
principal amount to $_________, issued under the Indenture, dated as of
________, 2001 (herein called the "Indenture"), among the Issuer, IOS Capital
Inc. as Servicer, and __________________, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Issuer, the Trustee and the Holders and of the
terms upon which the Class [A-1] Notes are authenticated and delivered.  Unless
otherwise defined herein, all capitalized terms used herein shall have the
meanings set forth in the Indenture.

          [The Class [A-1] Notes are entitled to the benefits of a financial
guarantee insurance policy issued by ____________________________ (the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of the Insured Payments with respect to the Class [A-1] Notes on each
Payment Date, all as more fully set forth in the Indenture.]

          The Stated Maturity of the Class [A-1] Notes is the Payment Date in
_____________, 200_ on which date the Outstanding Principal Amount of the Class
[A-1] Notes shall be due and payable.

          The Class [A-1] Notes are subject to redemption, without premium, at
the option of the Issuer as of any Payment Date on which the Discounted Present
Value of the Performing Leases is less than or equal to ten percent (10%) of the
aggregate Discounted Present Value of the Leases as of the Cut-Off Date after
giving effect to all principal Payment on such Payment Date.

          Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Class
[A-1] Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.

          This Class [A-1] Note will be secured by the pledge to the Trustee of
the Asset Pool.

          If an Event of Default under the Indenture occurs, the Trustee shall,
at the direction of the Insurer (if no Insurer Default has occurred and is
continuing) or of Holders of not less than 66 2/3% of the aggregate principal
amount of the Notes at the time Outstanding (if an Insurer Default has occurred
and is continuing), and, if an Insurer Default has occurred and is continuing,
may, declare due and payable in the manner and with the effect provided in the
Indenture, the principal of all the Class [A-1] Notes (but not less than all the
Class [A-1] Notes). Notice of such declaration will be given by mail to Holders,
as their names and addresses appear in the Note Register, as provided in the
Indenture. Upon payment of such principal amount together with all accrued
interest, the

                                     A-1-2
<PAGE>

obligations of the Issuer with respect to the payment of principal and interest
on this Class [A-1] Note shall terminate.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders under the Indenture at any time by the
Issuer and the Trustee with the consent of [the Insurer (with or without the
consent of any Holder of the Notes if no Insurer Default has occurred and is
continuing) or] the Holders of not less than 66-2/3% in aggregate principal
amount of the Notes at the time Outstanding [(if an Insurer Default has occurred
and is continuing).] The Indenture also contains provisions permitting [the
Insurer (with or without the consent of any Holder of the Notes if no Insurer
Default has occurred and is continuing) or] the Holders of not less than 66 2/3%
in aggregate principal amount of the Notes at the time Outstanding [(if an
Insurer Default has occurred and is continuing)], on behalf of all the Holders,
to waive compliance by the Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by [the Insurer (with or without the consent of any Holder of
the Notes if no Insurer Default has occurred and is continuing) or] the Holder
of this Class [A-1] Note [(if an Insurer Default has occurred and is
continuing)] shall be conclusive and binding upon such Holder and upon all
future Holders of this Class [A-1] Note and of any Class [A-1] Note issued upon
the registration of transfer hereof or in exchange here for or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Class [A-1]
Note or any Class [A-1] Note.

          As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class [A-1] Note is registrable in the
Note Register, upon surrender of this Class [A-1] Note for registration of
transfer at the office or agency of the Trustee in the City of Chicago, Illinois
and at any other office or agency maintained by the Issuer for that purpose,
duly endorsed by, or accompanied by a written instrument of transfer in the form
satisfactory to the Note Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Class [A-1]
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.

          The Class [A-1] Notes are issuable only in registered form without
coupons in minimum denominations of $1,000,000. As provided in the Indenture and
subject to certain limitations therein set forth, Class [A-1] Notes are
exchangeable for a like aggregate principal amount of Class [A-1] Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.

          No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

          The Issuer, the Trustee,[ the Insurer] and any agent of the Issuer,
the Trustee [or the Insurer] may treat the Person in whose name this Class [A-1]
Note is registered as the owner hereof for all purposes, whether or not this
Class [A-1] Note may

                                     A-1-3
<PAGE>

be overdue, and neither the Issuer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          Each Noteholder, by acceptance of this Note, covenants and agrees to
treat the Notes as indebtedness for purposes of federal income, state and local
income and franchise and any other income taxes.

          The Indenture and this Class [A-1] Note shall be deemed to be
contracts made under the laws of the State of New York and shall for all
purposes be governed by, and construed in accordance with, the laws of the State
of New York.

                                     A-1-4
<PAGE>

          IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.

Dated: _____, 200__

                              IKON RECEIVABLES FUNDING, LLC

                              By:  IKON Receivables Funding, Inc.,
                                   its Manager

                              By:__________________________
                                   Authorized Officer

                    Trustee's Certificate of Authentication
                    ---------------------------------------

          This is one of the Class [A-1] Notes referred to in the within
mentioned Indenture.

                              ____________________________,
                              as Trustee

                              By:_________________________
                                      Authorized Officer

                                     A-1-5
<PAGE>

                                ASSIGNMENT FORM
                                ---------------

          If you the holder want to assign this Class [A-1] Note, fill in the
form below and have your signature guaranteed:

I or we assign and transfer this Class [A-1] Note to:

--------------------------------------------------------

--------------------------------------------------------

--------------------------------------------------------

--------------------------------------------------------

                 (Print or type name, address and zip code and
                 social security or tax ID number of assignee)

and irrevocably appoint ____________, agent to transfer this Class [A-1] Note on
the books of the Issuer.  The agent may substitute another to act for him.

Dated:  ________________                  Signed: __________________________

                                                  __________________________

                                                  (sign exactly as the name
                                                  appears on the other side of
                                                  this Class [A-1] Note)
Signature Guarantee_________________________________________________________

Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes fully
negotiable, similar to a check endorsed in blank. Therefore, to safeguard a
signed Class [A-1] Note, it is recommended that you fill in the name of the new
owner in the "Assignee" blank. Alternatively, instead of using this Assignment
Form, you may sign a separate "power of attorney" form and then mail the
unsigned Class [A-1] Note and the signed "power of attorney" in separate
envelopes. For added protection, use certified or registered mail for a Class
[A-1] Note.

                                     A-1-6
<PAGE>

                                CLASS [A-2] NOTE

  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
  DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
  ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
  CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
  AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
  MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED
  REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
  OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
  HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                         IKON RECEIVABLES FUNDING, LLC

               ______% CLASS [A-2] LEASE-BACKED NOTE, SERIES ____

CUSIP NO. _______________

No. R-1                                                            $____________

          IKON RECEIVABLES FUNDING, LLC, a limited liability company duly
organized and existing under the laws of Delaware (herein called the "Issuer",
which term includes any successor Person under the Indenture referred to
herein), for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of _______________________________________________
($_____________), payable in monthly installments beginning on ________, 200,
in accordance with the Indenture.  Interest will accrue on the unpaid principal
hereof from the date of issuance, at the rate of ______% per annum, until the
full amount of principal hereof is otherwise paid or made available for payment
and shall be computed on the basis of a year of 360 days comprised of twelve
thirty day months.

          Principal and interest on this Class [A-2] Note shall be paid on the
15th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing ________, 200, either by check to the
registered address of the Holder of this Class [A-2] Note as of the relevant
Record Date or by wire transfer to an account at a bank in the United States as
the Holder shall specify, as provided more fully in the Indenture; provided,
                                                                   --------
that the final payment of principal and interest in respect of the Notes shall
be payable to the Holder of this Note only upon presentation and surrender of
this Note at the Corporate Trust Office of the Trustee or at the principal
office of any Paying Agent appointed pursuant to the Indenture.
<PAGE>

          This Class [A-2] Note is one of a duly authorized issue of Class A
Notes of the Issuer designated as its "______% Class [A-2] Lease-Backed Notes,
Series _____" (herein called the "Class [A-2] Notes") limited in aggregate
principal amount to $__________ issued under the Indenture, dated as of
________, 2001 (herein called the "Indenture"), among the Issuer, IOS Capital
Inc. as Servicer, and _________________ _________________, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Issuer, the Trustee and the Holders and
of the terms upon which the Class [A-2] Notes are authenticated and delivered.
Unless otherwise defined herein, all capitalized terms used herein shall have
the meanings set forth in the Indenture.

          [The Class [A-2] Notes are entitled to the benefits of a financial
guarantee insurance policy issued by ______________________________________ (the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of the Insured Payments with respect to the Class [A-2] Notes on each
Payment Date, all as more fully set forth in the Indenture.]

          The Stated Maturity of the Class [A-2] Notes is the Payment Date in
________, 200 on which date the Outstanding Principal Amount of the Class [A-2]
Notes shall be due and payable.

          The Class [A-2] Notes are subject to redemption, without premium, at
the option of the Issuer as of any Payment Date on which the Discounted Present
Value of the Performing Leases is less than or equal to ten percent (10%) of the
aggregate Discounted Present Value of the Leases as of the Cut-Off Date after
giving effect to all principal Payment on such Payment Date.

          Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Class
[A-2] Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.

          This Class [A-2] Note will be secured by the pledge to the Trustee of
the Asset Pool.

          If an Event of Default under the Indenture occurs, the Trustee shall,
at [the direction of the Insurer (if no Insurer Default has occurred and is
continuing) or of] Holders of not less than 66 2/3% of the aggregate principal
amount of the Notes at the time Outstanding [(if an Insurer Default has occurred
and is continuing)], and, [if an Insurer Default has occurred and is continuing,
may,] declare due and payable in the manner and with the effect provided in the
Indenture, the principal of all the Class [A-2] Notes (but not less than all the
Class [A-2] Notes). Notice of such declaration will be given by mail to Holders,
as their names and addresses appear in the Note Register, as provided in the
Indenture. Upon payment of such principal amount together with all accrued
interest, the obligations of the Issuer with respect to the payment of principal
and interest on this Class [A-2] Note shall terminate.

                                     A-2-2
<PAGE>

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders under the Indenture at any time by the
Issuer and the Trustee with the consent of [the Insurer (with or without the
consent of any Holder of the Notes if no Insurer Default has occurred and is
continuing) or] the Holders of not less than 66-2/3% in aggregate principal
amount of the Notes at the time Outstanding [(if an Insurer Default has occurred
and is continuing)]. The Indenture also contains provisions permitting [the
Insurer (with or without the consent of any Holder of the Notes if no Insurer
Default has occurred and is continuing) or] the Holders of not less than 66 2/3%
in aggregate principal amount of the Notes at the time Outstanding [(if an
Insurer Default has occurred and is continuing)], on behalf of all the Holders,
to waive compliance by the Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by [the Insurer (with or without the consent of any Holder of
the Notes if no Insurer Default has occurred and is continuing) or] the Holder
of this Class [A-2] Note [(if an Insurer Default has occurred and is
continuing)] shall be conclusive and binding upon such Holder and upon all
future Holders of this Class [A-2] Note and of any Class [A-2] Note issued upon
the registration of transfer hereof or in exchange here for or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Class [A-2]
Note or any Class [A-2] Note.

          As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class [A-2] Note is registrable in the
Note Register, upon surrender of this Class [A-2] Note for registration of
transfer at the office or agency of the Trustee in the City of Chicago, Illinois
and at any other office or agency maintained by the Issuer for that purpose,
duly endorsed by, or accompanied by a written instrument of transfer in the form
satisfactory to the Note Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Class [A-2]
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.

          The Class [A-2] Notes are issuable only in registered form without
coupons in minimum denominations of $1,000,000. As provided in the Indenture and
subject to certain limitations therein set forth, Class [A-2] Notes are
exchangeable for a like aggregate principal amount of Class [A-2] Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.

          No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

          The Issuer, the Trustee, [the Insurer] and any agent of the Issuer,
the Trustee [or the Insurer] may treat the Person in whose name this Class [A-2]
Note is registered as the owner hereof for all purposes, whether or not this
Class [A-2] Note may be overdue, and neither the Issuer, the Trustee nor any
such agent shall be affected by notice to the contrary.

                                     A-2-3
<PAGE>

          Each Noteholder, by acceptance of this Note, covenants and agrees to
treat the Notes as indebtedness for purposes of federal income, state and local
income and franchise and any other income taxes.

          The Indenture and this Class [A-2] Note shall be deemed to be
contracts made under the laws of the State of New York and shall for all
purposes be governed by, and construed in accordance with, the laws of the State
of New York.

                                     A-2-4
<PAGE>

          IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.

Dated: _____, 200

                                        IKON RECEIVABLES FUNDING, LLC

                                        By:  IKON Receivables Funding, Inc.,
                                              its Manager

                                        By:____________________________
                                                Authorized Officer

                    Trustee's Certificate of Authentication
                    ---------------------------------------

          This is one of the Class [A-2] Notes referred to in the within
mentioned Indenture.

                                        _______________________________
                                        as Trustee

                                        By:____________________________
                                                Authorized Officer

                                     A-2-5
<PAGE>

                                ASSIGNMENT FORM
                                ---------------

          If you the holder want to assign this Class [A-2] Note, fill in the
form below and have your signature guaranteed:

I or we assign and transfer this Class [A-2] Note to:

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

                 (Print or type name, address and zip code and
                 social security or tax ID number of assignee)

and irrevocably appoint ____________, agent to transfer this Class [A-2] Note on
the books of the Issuer.  The agent may substitute another to act for him.

Dated:  ________________                    Signed:____________________________
                                                   (sign exactly as the name
                                                   appears on the other side of
                                                   this Class [A-2] Note)

Signature Guarantee___________________________________________________________

Important Notice: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes fully
negotiable, similar to a check endorsed in blank. Therefore, to safeguard a
signed Class [A-2] Note, it is recommended that you fill in the name of the new
owner in the "Assignee" blank. Alternatively, instead of using this Assignment
Form, you may sign a separate "power of attorney" form and then mail the
unsigned Class [A-2] Note and the signed "power of attorney" in separate
envelopes. For added protection, use certified or registered mail for a Class
[A-2] Note.

                                     A-2-6
<PAGE>

                               Class [A-3a] Note

  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
  DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
  ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
  CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
  AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
  MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED
  REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
  OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
  HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                         IKON RECEIVABLES FUNDING, LLC

              ______% Class [A-3a] LEASE-BACKED NOTE, SERIES ____

CUSIP NO.  _______________

No. R-1                                                           $_____________

          IKON RECEIVABLES FUNDING, LLC, a limited liability company duly
organized and existing under the laws of Delaware (herein called the "Issuer",
which term includes any successor Person under the Indenture referred to
herein), for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of _______________________________________________
($_____________), payable in monthly installments beginning on ________, 200,
in accordance with the Indenture.  Interest will accrue on the unpaid principal
hereof from the date of issuance, at the rate of ______% per annum, until the
full amount of principal hereof is otherwise paid or made available for payment
and shall be computed on the basis of a year of 360 days comprised of twelve
thirty day months.

          Principal and interest on this Class [A-3a] Note shall be paid on the
15th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing ________, 200, either by check to the
registered address of the Holder of this Class [A-3a] Note as of the relevant
Record Date or by wire transfer to an account at a bank in the United States as
the Holder shall specify, as provided more fully in the Indenture; provided,
                                                                   --------
that the final payment of principal and interest in respect of the Notes shall
be payable to the Holder of this Note only upon presentation and surrender of
this Note at the Corporate Trust Office of the Trustee or at the principal
office of any Paying Agent appointed pursuant to the Indenture.
<PAGE>

          This Class [A-3a] Note is one of a duly authorized issue of Class A
Notes of the Issuer designated as its "______% Class [A-3a] Lease-Backed Notes,
Series ____" (herein called the "Class [A-3a] Notes") limited in aggregate
principal amount to $__________, issued under the Indenture, dated as of
________, 2001 (herein called the "Indenture"), among the Issuer, IOS Capital
Inc. as Servicer, and ___________________, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Issuer, the Trustee and the Holders and of the
terms upon which the Class [A-3a] Notes are authenticated and delivered.  Unless
otherwise defined herein, all capitalized terms used herein shall have the
meanings set forth in the Indenture.

          [The Class [A-3a] Notes are entitled to the benefits of a financial
guarantee insurance policy issued by ____________________ (the "Insurer"),
pursuant to which the Insurer has unconditionally guaranteed payments of the
Insured Payments with respect to the Class [A-3a] Notes on each Payment Date,
all as more fully set forth in the Indenture.]

          The Stated Maturity of the Class [A-3a] Notes is the Payment Date in
________, 200, on which date the Outstanding Principal Amount of the Class [A-
3a] Notes shall be due and payable.

          The Class [A-3a] Notes are subject to redemption, without premium, at
the option of the Issuer as of any Payment Date on which the Discounted Present
Value of the Performing Leases is less than or equal to ten percent (10%) of the
aggregate Discounted Present Value of the Leases as of the Cut-Off Date after
giving effect to all principal Payment on such Payment Date.

          Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Class
[A-3a] Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.

          This Class [A-3a] Note will be secured by the pledge to the Trustee of
the Asset Pool.

          If an Event of Default under the Indenture occurs, the Trustee shall,
at the direction of [the Insurer (if no Insurer Default has occurred and is
continuing) or of] Holders of not less than 66-2/3% of the aggregate principal
amount of the Notes at the time Outstanding [(if an Insurer Default has occurred
and is continuing)], and, [if an Insurer Default has occurred and is
continuing,] may, declare due and payable in the manner and with the effect
provided in the Indenture, the principal of all the Class [A-3a] Notes (but not
less than all the Class [A-3a] Notes).  Notice of such declaration will be given
by mail to Holders, as their names and addresses appear in the Note Register, as
provided in the Indenture.  Upon payment of such principal amount together with
all

                                    A-3a-2
<PAGE>

accrued interest, the obligations of the Issuer with respect to the payment of
principal and interest on this Class [A-3a] Note shall terminate.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders under the Indenture at any time by the
Issuer and the Trustee with the consent of [the Insurer (with or without the
consent of any Holder of the Notes if no Insurer Default has occurred and is
continuing) or] the Holders of not less than 66-2/3% in aggregate principal
amount of the Notes at the time Outstanding [(if an Insurer Default has occurred
and is continuing)]. The Indenture also contains provisions permitting the
Insurer (with or without the consent of any Holder of the Notes if no Insurer
Default has occurred and is continuing) or the Holders of not less than 66-2/3
in aggregate principal amount of the Notes at the time Outstanding (if an
Insurer Default has occurred and is continuing), on behalf of all the Holders,
to waive compliance by the Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by [the Insurer (with or without the consent of any Holder of
the Notes if no Insurer Default has occurred and is continuing)] or the Holder
of this Class [A-3a] Note [(if an Insurer Default has occurred and is
continuing)] shall be conclusive and binding upon such Holder and upon all
future Holders of this Class [A-3a] Note and of any Class [A-3a] Note issued
upon the registration of transfer hereof or in exchange here for or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Class [A-3a] Note or any Class [A-3a] Note.

          As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class [A-3a] Note is registrable in the
Note Register, upon surrender of this Class [A-3a] Note for registration of
transfer at the office or agency of the Trustee in the City of Chicago, Illinois
and at any other office or agency maintained by the Issuer for that purpose,
duly endorsed by, or accompanied by a written instrument of transfer in the form
satisfactory to the Note Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Class [A-3a]
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.

          The Class [A-3a] Notes are issuable only in registered form without
coupons in minimum denominations of $1,000,000. As provided in the Indenture and
subject to certain limitations therein set forth, Class [A-3a] Notes are
exchangeable for a like aggregate principal amount of Class [A-3a] Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.

          No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

          The Issuer, the Trustee[, the Insurer] and any agent of the Issuer,
the Trustee [or the Insurer] may treat the Person in whose name this Class [A-
3a] Note is registered as the owner hereof for all purposes, whether or not this
Class [A-3a] Note

                                    A-3a-3
<PAGE>

may be overdue, and neither the Issuer, the Trustee nor any such agent shall be
affected by notice to the contrary.

          Each Noteholder, by acceptance of this Note, covenants and agrees to
treat the Notes as indebtedness for purposes of federal income, state and local
income and franchise and any other income taxes.

          The Indenture and this Class [A-3a] Note shall be deemed to be
contracts made under the laws of the State of New York and shall for all
purposes be governed by, and construed in accordance with, the laws of the State
of New York.

                                    A-3a-4
<PAGE>

          IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.

Dated: _____, 200

                                        IKON RECEIVABLES FUNDING, LLC

                                        By:  IKON Receivables Funding, Inc.,
                                              its Manager

                                        By:____________________________
                                                Authorized Officer

                    Trustee's Certificate of Authentication
                    ---------------------------------------

          This is one of the Class [A-2] Notes referred to in the within
mentioned Indenture.

                                        _______________________________
                                        as Trustee

                                        By:____________________________
                                                Authorized Officer

                                    A-3a-5
<PAGE>

                                ASSIGNMENT FORM
                                ---------------

          If you the holder want to assign this Class [A-3a] Note, fill in the
form below and have your signature guaranteed:

I or we assign and transfer this Class [A-3a] Note to:

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________

                 (Print or type name, address and zip code and
                 social security or tax ID number of assignee)

and irrevocably appoint ____________, agent to transfer this Class [A-3a] Note
on the books of the Issuer.  The agent may substitute another to act for him.

Dated:  ________________                    Signed: ____________________________

                                                    ____________________________

                                                      (sign exactly as the name
                                                      appears on the other side
                                                      of this Class [A-3a] Note)

Signature Guarantee ____________________________________________________________

Important Notice:   When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes fully
negotiable, similar to a check endorsed in blank.  Therefore, to safeguard a
signed Class [A-3a] Note, it is recommended that you fill in the name of the new
owner in the "Assignee" blank.  Alternatively, instead of using this Assignment
Form, you may sign a separate "power of attorney" form and then mail the
unsigned Class [A-3a] Note and the signed "power of attorney" in separate
envelopes.  For added protection, use certified or registered mail for a Class
[A-3a] Note.

                                    A-3a-6
<PAGE>

                               Class [A-3b] Note

  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
  DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
  ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
  CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
  AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
  MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED
  REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
  OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
  HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                         IKON RECEIVABLES FUNDING, LLC

                  Class [A-3b] LEASE-BACKED NOTE, SERIES ____

CUSIP NO.  _______________

No. R-1                                                            $____________

          IKON RECEIVABLES FUNDING, LLC, a limited liability company duly
organized and existing under the laws of Delaware (herein called the "Issuer",
which term includes any successor Person under the Indenture referred to
herein), for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of _______________________________________________
($_____________), payable in monthly installments on each Payment Date, in
accordance with the Indenture.  Interest will accrue on the unpaid principal
hereof from the date of issuance, for each Interest Accrual Period at the rate
per annum equal to the sum of __% and LIBOR for that Interest Accrual Period,
until the full amount of principal hereof is otherwise paid or made available
for payment and shall be computed on the basis of a year of 360 days and the
actual number of days in that Interest Accrual Period.  Interest accruing as
provided above for each Interest Accrual Period will be payable on the Payment
Date corresponding to that Interest Accrual Period.

          Principal and interest on this Class [A-3b] Note shall be paid on the
15th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing ________, 200, either by check to the
registered address of the Holder of this Class [A-3b] Note as of the relevant
Record Date or by wire transfer to an account at a bank in the United States as
the Holder shall specify, as provided more fully in the Indenture; provided,
                                                                   --------
that the final payment of principal and interest in respect of the Notes shall
be payable to the Holder of this Note only upon presentation and
<PAGE>

surrender of this Note at the Corporate Trust Office of the Trustee or at the
principal office of any Paying Agent appointed pursuant to the Indenture.

          This Class [A-3b] Note is one of a duly authorized issue of Class A
Notes of the Issuer designated as its "Class [A-3b] Lease-Backed Notes, Series
____" (herein called the "Class [A-3b] Notes") limited in aggregate principal
amount to $__________, issued under the Indenture, dated as of ________, 2001
(herein called the "Indenture"), among the Issuer, IOS Capital Inc. as Servicer,
and _________________________, as Trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Issuer, the Trustee and the Holders and of the terms upon which the Class
[A-3b] Notes are authenticated and delivered.  Unless otherwise defined herein,
all capitalized terms used herein shall have the meanings set forth in the
Indenture.

          [The Class [A-3b] Notes are entitled to the benefits of a financial
guarantee insurance policy issued by _________________________ (the "Insurer"),
pursuant to which the Insurer has unconditionally guaranteed payments of the
Insured Payments with respect to the Class [A-3b] Notes on each Payment Date,
all as more fully set forth in the Indenture.]

          The Stated Maturity of the Class [A-3b] Notes is the Payment Date in
________, 200, on which date the Outstanding Principal Amount of the Class [A-
3b] Notes shall be due and payable.

          The Class [A-3b] Notes are subject to redemption, without premium, at
the option of the Issuer as of any Payment Date on which the Discounted Present
Value of the Performing Leases is less than or equal to ten percent (10%) of the
aggregate Discounted Present Value of the Leases as of the Cut-Off Date after
giving effect to all principal Payment on such Payment Date.

          Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Class
[A-3b] Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.

          This Class [A-3b] Note will be secured by the pledge to the Trustee of
the Asset Pool.

          If an Event of Default under the Indenture occurs, the Trustee shall,
at the direction of [the Insurer (if no Insurer Default has occurred and is
continuing) or of] Holders of not less than 66-2/3% of the aggregate principal
amount of the Notes at the time Outstanding [(if an Insurer Default has occurred
and is continuing)], and, [if an Insurer Default has occurred and is
continuing], may, declare due and payable in the manner and with the effect
provided in the Indenture, the principal of all the Class [A-3b] Notes (but not
less than all the Class [A-3b] Notes).  Notice of such declaration will be

                                    A-3b-2
<PAGE>

given by mail to Holders, as their names and addresses appear in the Note
Register, as provided in the Indenture. Upon payment of such principal amount
together with all accrued interest, the obligations of the Issuer with respect
to the payment of principal and interest on this Class [A-3b] Note shall
terminate.

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders under the Indenture at any time by the
Issuer and the Trustee with the consent of [the Insurer (with or without the
consent of any Holder of the Notes if no Insurer Default has occurred and is
continuing) or] the Holders of not less than 66-2/3% in aggregate principal
amount of the Notes at the time Outstanding [(if an Insurer Default has occurred
and is continuing).]  The Indenture also contains provisions permitting [the
Insurer (with or without the consent of any Holder of the Notes if no Insurer
Default has occurred and is continuing)] or the Holders of not less than 66-2/3
in aggregate principal amount of the Notes at the time Outstanding [(if an
Insurer Default has occurred and is continuing)], on behalf of all the Holders,
to waive compliance by the Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences.  Any such
consent or waiver by the Insurer (with or without the consent of any Holder of
the Notes [if no Insurer Default has occurred and is continuing) or] the Holder
of this Class [A-3b] Note (if an Insurer Default has occurred and is
continuing)] shall be conclusive and binding upon such Holder and upon all
future Holders of this Class [A-3b] Note and of any Class [A-3b] Note issued
upon the registration of transfer hereof or in exchange here for or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Class [A-3b] Note or any Class [A-3b] Note.

          As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class [A-3b] Note is registrable in the
Note Register, upon surrender of this Class [A-3b] Note for registration of
transfer at the office or agency of the Trustee in the City of Chicago, Illinois
and at any other office or agency maintained by the Issuer for that purpose,
duly endorsed by, or accompanied by a written instrument of transfer in the form
satisfactory to the Note Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Class [A-3b]
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.

          The Class [A-3b] Notes are issuable only in registered form without
coupons in minimum denominations of $1,000,000.  As provided in the Indenture
and subject to certain limitations therein set forth, Class [A-3b] Notes are
exchangeable for a like aggregate principal amount of Class [A-3b] Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.

          No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

                                    A-3b-3
<PAGE>

          The Issuer, the Trustee, [the Insurer] and any agent of the Issuer,
the Trustee [or the Insurer] may treat the Person in whose name this Class [A-
3b] Note is registered as the owner hereof for all purposes, whether or not this
Class [A-3b] Note may be overdue, and neither the Issuer, the Trustee nor any
such agent shall be affected by notice to the contrary.

          Each Noteholder, by acceptance of this Note, covenants and agrees to
treat the Notes as indebtedness for purposes of federal income, state and local
income and franchise and any other income taxes.

          The Indenture and this Class [A-3b] Note shall be deemed to be
contracts made under the laws of the State of New York and shall for all
purposes be governed by, and construed in accordance with, the laws of the State
of New York.

                                    A-3b-4
<PAGE>

          IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.

Dated: _____, 200__

                                        IKON RECEIVABLES FUNDING, LLC

                                        By:  IKON Receivables Funding, Inc.,
                                             its Manager

                                        By:_________________________________
                                                  Authorized Officer

                    Trustee's Certificate of Authentication
                    ---------------------------------------

          This is one of the Class [A-3b] Notes referred to in the within
mentioned Indenture.

                                        _________________________________,
                                        as Trustee

                                        By:_____________________________
                                                  Authorized Officer

                                    A-3b-5
<PAGE>

                                ASSIGNMENT FORM
                                ---------------

          If you the holder want to assign this Class [A-3b] Note, fill in the
form below and have your signature guaranteed:

I or we assign and transfer this Class [A-3b] Note to:

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________

                 (Print or type name, address and zip code and
                 social security or tax ID number of assignee)

and irrevocably appoint ____________, agent to transfer this Class [A-3b] Note
on the books of the Issuer.  The agent may substitute another to act for him.

Dated:  ________________                    Signed: ___________________________

                                                    ___________________________

                                                      (sign exactly as the name
                                                      appears on the other side
                                                      of this Class [A-3b] Note)

Signature Guarantee ___________________________________________________________

Important Notice:  When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes fully
negotiable, similar to a check endorsed in blank.  Therefore, to safeguard a
signed Class [A-3b] Note, it is recommended that you fill in the name of the new
owner in the "Assignee" blank.  Alternatively, instead of using this Assignment
Form, you may sign a separate "power of attorney" form and then mail the
unsigned Class [A-3b] Note and the signed "power of attorney" in separate
envelopes.  For added protection, use certified or registered mail for a Class
[A-3b] Note.

                                    A-3b-6
<PAGE>

                               CLASS [A-4] NOTE

  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
  DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
  ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
  CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
  AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
  MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED
  REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
  OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
  HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                         IKON RECEIVABLES FUNDING, LLC

              ______% CLASS [A-4] LEASE-BACKED NOTE, SERIES ____

CUSIP NO.  _______________

No. R-1                                                            $____________

          IKON RECEIVABLES FUNDING, LLC, a limited liability company duly
organized and existing under the laws of Delaware (herein called the "Issuer",
which term includes any successor Person under the Indenture referred to
herein), for value received, hereby promises to pay to Cede & Co., or registered
assigns, the principal sum of _______________________________________________
($_____________), payable in monthly installments beginning on ________, 200,
in accordance with the Indenture.  Interest will accrue on the unpaid principal
hereof from the date of issuance, at the rate of ______% per annum, until the
full amount of principal hereof is otherwise paid or made available for payment
and shall be computed on the basis of a year of 360 days comprised of twelve
thirty day months.

          Principal and interest on this Class [A-4] Note shall be paid on the
15th day of each month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing ________, 200, either by check to the
registered address of the Holder of this Class [A-4] Note as of the relevant
Record Date or by wire transfer to an account at a bank in the United States as
the Holder shall specify, as provided more fully in the Indenture; provided,
                                                                   --------
that the final payment of principal and interest in respect of the Notes shall
be payable to the Holder of this Note only upon presentation and surrender of
this Note at the Corporate Trust Office of the Trustee or at the principal
office of any Paying Agent appointed pursuant to the Indenture.
<PAGE>

          This Class [A-4] Note is one of a duly authorized issue of Class A
Notes of the Issuer designated as its "______% Class [A-4] Lease-Backed Notes,
Series ____" (herein called the "Class [A-4] Notes") limited in aggregate
principal amount to $__________, issued under the Indenture, dated as of
________, 2001 (herein called the "Indenture"), among the Issuer, IOS Capital
Inc. as Servicer, and ______________________, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Issuer, the Trustee and the Holders and of the
terms upon which the Class [A-4] Notes are authenticated and delivered.  Unless
otherwise defined herein, all capitalized terms used herein shall have the
meanings set forth in the Indenture.

          [The Class [A-4] Notes are entitled to the benefits of a financial
guarantee insurance policy issued by _____________________________________ (the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of the Insured Payments with respect to the Class [A-4] Notes on each
Payment Date, all as more fully set forth in the Indenture.]

          The Stated Maturity of the Class [A-4] Notes is the Payment Date in
___________, 200 on which date the Outstanding Principal Amount of the Class
[A-4] Notes shall be due and payable.

          The Class [A-4] Notes are subject to redemption, without premium, at
the option of the Issuer as of any Payment Date on which the Discounted Present
Value of the Performing Leases is less than or equal to ten percent (10%) of the
aggregate Discounted Present Value of the Leases as of the Cut-Off Date after
giving effect to all principal Payment on such Payment Date.

          Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Class
[A-4] Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.

          This Class [A-4] Note will be secured by the pledge to the Trustee of
the Asset Pool.

          If an Event of Default under the Indenture occurs, the Trustee shall,
at the direction of [the Insurer (if no Insurer Default has occurred and is
continuing) or of] Holders of not less than 66-2/3% of the aggregate principal
amount of the Notes at the time Outstanding [(if an Insurer Default has occurred
and is continuing)], and, [if an Insurer Default has occurred and is
continuing,] may, declare due and payable in the manner and with the effect
provided in the Indenture, the principal of all the Class [A-4] Notes (but not
less than all the Class [A-4] Notes).  Notice of such declaration will be given
by mail to Holders, as their names and addresses appear in the Note Register, as
provided in the Indenture.  Upon payment of such principal amount together with
all accrued interest, the obligations of the Issuer with respect to the payment
of principal and interest on this Class [A-4] Note shall terminate.

                                     A-4-2
<PAGE>

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders under the Indenture at any time by the
Issuer and the Trustee with the consent of [the Insurer (with or without the
consent of any Holder of the Notes if no Insurer Default has occurred and is
continuing) or]the Holders of not less than 66-2/3% in aggregate principal
amount of the Notes at the time Outstanding [(if an Insurer Default has occurred
and is continuing).] The Indenture also contains provisions permitting [the
Insurer (with or without the consent of any Holder of the Notes if no Insurer
Default has occurred and is continuing) or]the Holders of not less than 66-2/3%
in aggregate principal amount of the Notes at the time Outstanding [(if an
Insurer Default has occurred and is continuing),]on behalf of all the Holders,
to waive compliance by the Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences.  Any such
consent or waiver by [the Insurer (with or without the consent of any Holder of
the Notes if no Insurer Default has occurred and is continuing) or] the Holder
of this Class [A-4] Note [(if an Insurer Default has occurred and is
continuing)] shall be conclusive and binding upon such Holder and upon all
future Holders of this Class [A-4] Note and of any Class [A-4] Note issued upon
the registration of transfer hereof or in exchange here for or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Class [A-4]
Note or any Class [A-4] Note.

          As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Class [A-4] Note is registrable in the
Note Register, upon surrender of this Class [A-4] Note for registration of
transfer at the office or agency of the Trustee in the City of Chicago, Illinois
and at any other office or agency maintained by the Issuer for that purpose,
duly endorsed by, or accompanied by a written instrument of transfer in the form
satisfactory to the Note Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Class [A-4]
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.

          The Class [A-4] Notes are issuable only in registered form without
coupons in minimum denominations of $1,000,000.  As provided in the Indenture
and subject to certain limitations therein set forth, Class [A-4] Notes are
exchangeable for a like aggregate principal amount of Class [A-4] Notes of a
different authorized denomination, as requested by the Holder surrendering the
same.

          No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

          The Issuer, the Trustee, the Insurer and any agent of the Issuer, the
Trustee or the Insurer may treat the Person in whose name this Class [A-4] Note
is registered as the owner hereof for all purposes, whether or not this Class
[A-4] Note may be overdue, and neither the Issuer, the Trustee nor any such
agent shall be affected by notice to the contrary.

                                     A-4-3
<PAGE>

          Each Noteholder, by acceptance of this Note, covenants and agrees to
treat the Notes as indebtedness for purposes of federal income, state and local
income and franchise and any other income taxes.

          The Indenture and this Class [A-4] Note shall be deemed to be
contracts made under the laws of the State of New York and shall for all
purposes be governed by, and construed in accordance with, the laws of the State
of New York.

                                     A-4-4
<PAGE>

          IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.

Dated: _____, 200__

                                   IKON RECEIVABLES FUNDING, LLC

                                   By: IKON Receivables Funding, Inc.,
                                       its Manager

                                   By:___________________________________
                                             Authorized Officer

                    Trustee's Certificate of Authentication
                    ---------------------------------------

          This is one of the Class [A-4] Notes referred to in the within
mentioned Indenture.

                                                  _____________________________,
                                                  as Trustee

                                                  By:___________________________
                                                          Authorized Officer

                                     A-4-5
<PAGE>

                                ASSIGNMENT FORM
                                ---------------

          If you the holder want to assign this Class [A-4] Note, fill in the
form below and have your signature guaranteed:

I or we assign and transfer this Class [A-4] Note to:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

                 (Print or type name, address and zip code and
                 social security or tax ID number of assignee)

and irrevocably appoint ____________, agent to transfer this Class [A-4] Note on
the books of the Issuer.  The agent may substitute another to act for him.

Dated:  ________________                    Signed: ____________________________
                                                      (sign exactly as the name
                                                      appears on the other side
                                                      of this Class [A-4] Note)

Signature Guarantee ____________________________________________________________

Important Notice:  When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Attorney", this Note becomes fully
negotiable, similar to a check endorsed in blank.  Therefore, to safeguard a
signed Class [A-4] Note, it is recommended that you fill in the name of the new
owner in the "Assignee" blank.  Alternatively, instead of using this Assignment
Form, you may sign a separate "power of attorney" form and then mail the
unsigned Class [A-4] Note and the signed "power of attorney" in separate
envelopes.  For added protection, use certified or registered mail for a Class
[A-4] Note.

                                     A-4-6
<PAGE>

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                                     Page
                                                                                                                     ----
<S>                                                                                                                  <C>
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.................................................      3

     SECTION 1.01.   General Definitions..........................................................................      3
     SECTION 1.02.   Compliance Certificates and Opinions.........................................................     21
     SECTION 1.03.   Form of Documents Delivered to Trustee and Insurer...........................................     21
     SECTION 1.04.   Acts of Noteholders, etc.....................................................................     22
     SECTION 1.05.   Notices, etc., to Trustee, Servicer, [Issuer], Insurer and Rating Agencies...................     23
     SECTION 1.06.   Notice to Noteholders; Waiver................................................................     24
     SECTION 1.07.   Effect of Headings and Table of Contents.....................................................     24
     SECTION 1.08.   Successors and Assigns.......................................................................     25
     SECTION 1.09.   Benefits of Indenture........................................................................     25
     SECTION 1.10.   Recording of Indenture.......................................................................     25
     SECTION 1.11.   GOVERNING LAW................................................................................     25
     SECTION 1.12.   Legal Holidays...............................................................................     25
     SECTION 1.13.   Execution in Counterparts....................................................................     26
     SECTION 1.14.   Inspection...................................................................................     26
     SECTION 1.15.   Survival of Representations and Warranties...................................................     26

ARTICLE II THE NOTES..............................................................................................     26

     SECTION 2.01.   General Provisions; Optional Redemption by Issuer............................................     26
     SECTION 2.02.   Execution, Authentication, Delivery, and Dating..............................................     28
     SECTION 2.03.   Transfer and Exchange........................................................................     29
     SECTION 2.04.   Mutilated, Destroyed, Lost and Stolen Notes..................................................     29
     SECTION 2.05.   Book-Entry Registration......................................................................     30
     SECTION 2.06.   Notice to Clearing Agency Noteholders........................................................     31
     SECTION 2.07.   Definitive Notes.............................................................................     32
     SECTION 2.08.   Payment of Interest and Principal; Rights Preserved..........................................     32
     SECTION 2.09.   Persons Deemed Owners........................................................................     33
     SECTION 2.10    Cancellation.................................................................................     33
     SECTION 2.11.   Noteholder Lists.............................................................................     33
     SECTION 2.12.   Treasury Notes...............................................................................     33
     SECTION 2.13.   CUSIP Numbers................................................................................     34

ARTICLE III ACCOUNTS; INVESTMENT OF MONEYS; COLLECTION AND APPLICATION OF MONEYS; REPORTS.........................     34

     SECTION 3.01    Transaction Accounts; Investments by Trustee.................................................     34
     SECTION 3.02    Collection of Moneys.........................................................................     36
     SECTION 3.03    Collection Account; Payments.................................................................     37
     SECTION 3.04    The Reserve Account..........................................................................     39
     SECTION 3.05    Reports by Trustee; Notices of Certain Payments..............................................     39
</TABLE>
                                       i
<PAGE>

<TABLE>
<S>                                                                                                                 <C>
     SECTION 3.06    Trustee May Rely on Certain Information from Servicer......................................     40
     SECTION 3.07    [Optional Deposits by the Insurer; Notice of Waivers.......................................     41
     SECTION 3.08    The Security Deposit Account...............................................................     41
     SECTION 3.09    [Renewal Account...........................................................................     41

[ARTICLE IV THE POLICY..........................................................................................     42

     SECTION 4.01    Claims Under Policy........................................................................     42
     SECTION 4.02    Preference Claims..........................................................................     43
     SECTION 4.03    Surrender of Policy........................................................................     44

ARTICLE V RELEASE OF LEASES AND INTERESTS IN EQUIPMENT..........................................................     44

     SECTION 5.01    Release of Equipment.......................................................................     44
     SECTION 5.02    Release of Leases Upon Final Lease Payment.................................................     45
     SECTION 5.03    Execution of Documents.....................................................................     45
     SECTION 5.04    Further Release of Collateral..............................................................     45

ARTICLE VI SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER......................................................     45

     SECTION 6.01    Servicer Events of Default.................................................................     45
     SECTION 6.02    Substitute Servicer........................................................................     46

ARTICLE VII EVENTS OF DEFAULT; REMEDIES.........................................................................     46

     SECTION 7.01    Events of Default..........................................................................     46
     SECTION 7.02    Acceleration of Maturity; Rescission and Annulment.........................................     47
     SECTION 7.03    Remedies...................................................................................     49
     SECTION 7.04    Trustee Shall File Proofs of Claim.........................................................     49
     SECTION 7.05    Trustee May Enforce Claims Without Possession of Notes.....................................     50
     SECTION 7.06    Application of Money Collected.............................................................     50
     SECTION 7.07    Limitation on Suits........................................................................     51
     SECTION 7.08    Unconditional Right of Noteholders to Receive Principal and Interest ......................     52
     SECTION 7.09    Restoration of Rights and Remedies.........................................................     52
     SECTION 7.10    Rights and Remedies Cumulative.............................................................     53
     SECTION 7.11    Delay or Omission Not Waiver...............................................................     53
     SECTION 7.12    Control by Noteholders.....................................................................     53
     SECTION 7.13    Undertaking for Costs......................................................................     54
     SECTION 7.14    Waiver of Stay or Extension Laws...........................................................     54
     SECTION 7.15    Sale of Asset Pool.........................................................................     54

ARTICLE VIII THE TRUSTEE........................................................................................     56

     SECTION 8.01    Certain Duties and Responsibilities........................................................     56
     SECTION 8.02    Notice of Defaults or Events of Default....................................................     57
     SECTION 8.03    Certain Rights of Trustee..................................................................     57
     SECTION 8.04    May Hold Notes.............................................................................     59
     SECTION 8.05    Money Held in Trust........................................................................     59
     SECTION 8.06    Compensation, Reimbursement, etc...........................................................     59
     SECTION 8.07    Corporate Trustee Required; Eligibility....................................................     59
</TABLE>
                                      ii
<PAGE>

<TABLE>
     <S>                                                                                                             <C>
     SECTION 8.08    Resignation and Removal; Appointment of Successor..........................................       60
     SECTION 8.09    Acceptance of Appointment by Successor.....................................................       61
     SECTION 8.10    Merger, Conversion, Consolidation or Succession to Business................................       61
     SECTION 8.11    Co-Trustees and Separate Trustees..........................................................       62
     SECTION 8.12    Acceptance by Trustee......................................................................       63
     SECTION 8.13    Preferential Collection of Claims Against the Issuer.......................................       63
     SECTION 8.14    Reports by Trustee to Noteholders..........................................................       63
     SECTION 8.15    No Proceedings.............................................................................       64
     SECTION 8.16    Appointment and Powers.....................................................................       64
     SECTION 8.17    Performance of Duties......................................................................       64
     SECTION 8.18    [Control by the Insurer....................................................................       65

ARTICLE IX COVENANTS............................................................................................       65

     SECTION 9.01    Payment of Principal and Interest..........................................................       65
     SECTION 9.02    Maintenance of Office or Agency; Chief Executive Office....................................       65
     SECTION 9.03    Money for Payments to Noteholders to be Held in Trust......................................       65
     SECTION 9.04    Corporate Existence; Merger; Consolidation, etc............................................       66
     SECTION 9.05    Protection of Asset Pool; Further Assurances...............................................       67
     SECTION 9.06    [Reserved].................................................................................       67
     SECTION 9.07    Performance of Obligations; Assignment and Servicing Agreement.............................       67
     SECTION 9.08    Negative Covenants.........................................................................       68
     SECTION 9.09    Information as to Issuer...................................................................       69
     SECTION 9.10    Taxes......................................................................................       69
     SECTION 9.11    Indemnification............................................................................       69
     SECTION 9.12    Commission Reports; Reports to Trustee; Reports to Noteholders.............................       70

ARTICLE X SUPPLEMENTAL INDENTURES...............................................................................       71

     SECTION 10.01   Supplemental Indentures Without Consent of Noteholders.....................................       71
     SECTION 10.02   Supplemental Indentures with Consent of Noteholders........................................       71
     SECTION 10.03   Execution of Supplemental Indentures.......................................................       72
     SECTION 10.04   Effect of Supplemental Indentures..........................................................       72
     SECTION 10.05   Reference in Notes to Supplemental Indentures..............................................       72
     SECTION 10.06   Compliance with Trust Indenture Act........................................................       73

ARTICLE XI SATISFACTION AND DISCHARGE...........................................................................       73

     SECTION 11.01   Satisfaction and Discharge of Indenture....................................................       73
     SECTION 11.02   Application of Trust Money.................................................................       74

ARTICLE XII MISCELLANEOUS.......................................................................................       74

     SECTION 12.01   Trust Indenture Act Controls...............................................................       74
     SECTION 12.02   Communication by Noteholders with Other Noteholders........................................       74
     SECTION 12.03   Location of Leases.........................................................................       74
</TABLE>
                                      iii
<PAGE>

<TABLE>
    <S>                                                                                                              <C>
     SECTION 12.04   Officers' Certificate and Opinion of Counsel as to Conditions Precedent....................       75
     SECTION 12.05   Statements Required in Certificate or Opinion..............................................       75
     SECTION 12.06   Nonpetition................................................................................       75
</TABLE>

SCHEDULES

     SCHEDULE 1      Leases

EXHIBITS

     EXHIBIT A       Forms of Notes and Trustee's Certificate of
                     Authentication

                                      iv<PAGE>

   ________________________________________________________________________
   ________________________________________________________________________

                              IOS CAPITAL, INC.,
                            ORIGINATOR AND SERVICER

                            IKON RECEIVABLES-2, LLC
                                    SELLER

                                      AND

                        IKON RECEIVABLES FUNDING, LLC,
                                    ISSUER

                           _________________________

                      ASSIGNMENT AND SERVICING AGREEMENT

                         Dated as of ___________, ____

                           _________________________

   _______________________________________________________________________
   _______________________________________________________________________

ALL RIGHT, TITLE AND INTEREST OF IKON RECEIVABLES FUNDING, LLC IN AND TO THIS
AGREEMENT HAS BEEN ASSIGNED TO AND IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF
___________________________, AS TRUSTEE, UNDER THE INDENTURE DATED AS OF
___________, ____, FOR THE BENEFIT OF THE PERSONS REFERRED TO THEREIN.
<PAGE>

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                                          Page
<S>                                                                                                                       <C>
R E C I T A L S.....................................................................................................        1

SECTION 1.  CAPITAL CONTRIBUTION....................................................................................        2
1.01  Capital Contribution of Leases, Etc...........................................................................        2
1.02  Capital Contribution of and Grant of Security Interest in Equipment...........................................        2
1.03  Contribution of Leases; Grant of Security Interest............................................................        2
1.04  Servicer to Act as Custodian..................................................................................        4
1.05  No Recourse to IKON Office Solutions, Inc. or Affiliates......................................................        5

SECTION 2.  REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR........................................................        5
2.01  Corporate Organization and Authority..........................................................................        5
2.02  Business and Property.........................................................................................        6
2.03  Financial Statements..........................................................................................        6
2.04  Equipment and Leases..........................................................................................        6
2.05  Payments......................................................................................................       10
2.06  Full Disclosure...............................................................................................       10
2.07  Pending Litigation............................................................................................       10
2.08  Title to Leases and Equipment.................................................................................       11
2.09  Transactions Legal and Authorized.............................................................................       11
2.10  Governmental Consent..........................................................................................       11
2.11  Taxes.........................................................................................................       12
2.12  Compliance with Law...........................................................................................       12
2.13  ERISA.........................................................................................................       12
2.14  Ability to Perform............................................................................................       13
2.15  Ordinary Course; No Insolvency................................................................................       13
2.16  Assets and Liabilities........................................................................................       13
2.17  Fair Consideration............................................................................................       13
2.18  Ability to Pay Debts..........................................................................................       13
2.19  Bulk Transfer Provisions......................................................................................       14
2.20  Transfer Taxes................................................................................................       14
2.21  Principal Executive Office....................................................................................       14
2.22  Servicing Provisions Customary................................................................................       14
2.23  Nonconsolidation..............................................................................................       14
2.24  Capital Contribution Treatment................................................................................       15

SECTION 3.  REPRESENTATIONS AND WARRANTIES OF THE SELLER............................................................       15
3.01  Corporate Organization and Authority..........................................................................       15
3.02  Business and Property.........................................................................................       16
3.03  Ownership and Security Interest...............................................................................       16
3.04  Title to Leases and Equipment.................................................................................       16
3.05  Transactions Legal and Authorized.............................................................................       16
</TABLE>

                                           i

<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                                        <C>
3.06  Governmental Consent..........................................................................................       17
3.07  Compliance with Law...........................................................................................       17
3.08  Assets and Liabilities........................................................................................       17
3.09  Fair Consideration............................................................................................       18
3.10  Ability to Pay Debts..........................................................................................       18
3.11  Bulk Transfer Provisions......................................................................................       18
3.12  Transfer Taxes................................................................................................       18
3.13  Principal Executive Office....................................................................................       18
3.14  Nonconsolidation..............................................................................................       18
3.15  Capital Contribution Treatment................................................................................       19

SECTION 4.  ADMINISTRATION OF LEASES................................................................................       19
4.01  Servicer to Act...............................................................................................       19
4.02  Lease Amendments and Modifications............................................................................       21
4.03  Non-Performing Leases.........................................................................................       22
4.04  Costs of Servicing; Servicing Fee; Administrative Expenses....................................................       23
4.05  Other Transactions............................................................................................       24

SECTION 5.  SERVICER ADVANCES AND ORIGINATOR'S AND SELLER'S SUPPORT.................................................       24
5.01  Late Lease Payments...........................................................................................       24
5.02  Early Termination Leases......................................................................................       24
5.03  Indemnification...............................................................................................       25
5.04  Purchases; Other Payments.....................................................................................       25
5.05  Seller's Obligation in Respect of Non-Performing Leases.......................................................       26
5.06  Payment Advices...............................................................................................       27

SECTION 6.  INFORMATION TO BE PROVIDED..............................................................................       27
6.01  Monthly Status Reports; Servicing Reports.....................................................................       27
6.02  Annual Independent Public Accountant's Report.................................................................       29

SECTION 7.  THE SERVICER............................................................................................       30
7.01  Merger or Consolidation of the Servicer.......................................................................       30
7.02  Limitation on Liability of the Servicer and Others............................................................       30
7.03  Servicer Not to Resign or Be Removed..........................................................................       30
7.04  Financial and Business Information............................................................................       31
7.05  Officers' Certificates........................................................................................       32
7.06  Inspection....................................................................................................       32
7.07  Servicer Records..............................................................................................       33

SECTION 8.  THE ORIGINATOR..........................................................................................       33
8.01  Merger or Consolidation of the Originator.....................................................................       33
8.02  Control of Seller.............................................................................................       33
8.03  Financial and Business Information............................................................................       33
8.04  Officers' Certificates........................................................................................       35
</TABLE>

                                      ii

<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                                        <C>
8.05  Books and Records.............................................................................................       35
8.06  Communications................................................................................................       35

SECTION 9.  THE SELLER..............................................................................................       35
9.01  Merger or Consolidation of the Seller.........................................................................       35
9.02  Control of Issuer.............................................................................................       35
9.03  Information...................................................................................................       36
9.04  Inspection....................................................................................................       36
9.05  Books and Records.............................................................................................       36
9.06  Communications................................................................................................       36

SECTION 10.  DEFAULT................................................................................................       37
10.01  Servicer Events of Default...................................................................................       37
10.02  Termination..................................................................................................       39
10.03  Trustee to Act; Appointment of Successor.....................................................................       39
10.04  Servicer to Cooperate........................................................................................       40
10.05  Notification to Noteholders..................................................................................       40
10.06  Remedies Not Exclusive.......................................................................................       41

SECTION 11.  SUBSTITUTION AND ADDITION OF LEASES....................................................................       41
11.01  Substitution and Addition....................................................................................       41
11.02  Procedure....................................................................................................       42
11.03  Objection and Purchase.......................................................................................       43
11.04  Originator's, Seller's and Servicer's Subsequent Obligations.................................................       44

SECTION 12.  ASSIGNMENT.............................................................................................       44
12.01  Assignment to Trustee........................................................................................       44
12.02  Assignment by Originator, Seller or Servicer.................................................................       44

SECTION 13.  NATURE OF OBLIGATIONS AND SECURITY THEREFOR............................................................       44
13.01  Obligations Absolute.........................................................................................       44
13.02  Security for Obligations.....................................................................................       45
13.03  Further Assurances; Financing Statements.....................................................................       45

SECTION 14.  DEFINITIONS............................................................................................       46

SECTION 15.  MISCELLANEOUS..........................................................................................       52
15.01  Continuing Obligations.......................................................................................       52
15.02  GOVERNING LAW................................................................................................       52
15.03  Successors and Assigns.......................................................................................       52
15.04  Modification.................................................................................................       52
15.05  No Proceedings...............................................................................................       53
15.06  Notices......................................................................................................       53
15.07  Counterparts.................................................................................................       53
</TABLE>

                                      iii

<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                                        <C>
15.08  Nonpetition Covenant.........................................................................................       53
15.09  Benefits of Agreement........................................................................................       54
</TABLE>

Schedule 1 -  Portfolio Detail

Exhibit A  -  Schedule of Leases and Equipment
Exhibit B  -  Form of Receivables Servicing Report

                                      iv
<PAGE>

                      ASSIGNMENT AND SERVICING AGREEMENT

          This ASSIGNMENT AND SERVICING AGREEMENT (this "Agreement" or this
"Assignment and Servicing Agreement") is made and dated as of ___________, ____,
among IKON RECEIVABLES FUNDING, LLC, a Delaware limited liability company, as
acquiror hereunder (the "Issuer"), IOS CAPITAL, INC., a Delaware corporation, as
originator of the Leases (in such capacity, the "Originator"), contributor of
the Leases to IKON Receivables-2, LLC and servicer hereunder (in such capacity,
the "Servicer"), and IKON Receivables-2, LLC, as contributor of the Leases to
the Issuer (the "Seller").

                                R E C I T A L S

          A.   The Originator wishes to contribute, transfer, assign, set over
and convey to the Seller, and the Seller wishes to acquire from the Originator,
all right, title and interest of the Originator in, to and under the Leases and
the Equipment subject to the Leases (such terms and all other capitalized terms
used herein having the meanings ascribed thereto in Section 14 hereof unless
otherwise indicated).

          B.   The Seller wishes to contribute, transfer, assign, set over and
convey to the Issuer, and the Issuer wishes to acquire from the Seller, (i) all
right, title and interest of the Seller in, to and under the Leases, and (ii)
all right, title and interest of the Seller in, to and under the covenants,
representations, warranties and other obligations of the Originator (including
the Originator's Purchase Obligation) under this Assignment and Servicing
Agreement.

          C.   The Seller wishes to grant a security interest to the Issuer, and
the Issuer wishes to accept the Seller's grant of a security interest to the
Issuer of, all right, title and interest of the Seller in and to the Equipment
subject to the Leases as security for the performance by the Seller of certain
of its obligations hereunder.

          D.   Pursuant to the Indenture, the Issuer is issuing one class of
______% Class [A-1] Lease-Backed Notes, Series ______ in the aggregate principal
amount of $__________ (the "Class [A-1] Notes"), one class of ______% Class [A-
2] Lease-Backed Notes, Series ______ in the aggregate principal amount of
$__________ (the "Class [A-2] Notes"), one class of ______% Class [A-3a] Lease-
Backed Notes, Series ______ in the aggregate principal amount of $__________
(the "Class [A-3a] Notes"), one class of Class [A-3b] Lease-Backed Notes (the
"Class [A-3b] Notes") in the aggregate principal amount of $__________, and one
class of ______% Class [A-4] Lease-Backed Notes, Series ______ in the aggregate
principal amount of $__________(the "Class [A-4] Notes" and, together with the
Class [A-1] Notes, the Class [A-2] Notes, the Class [A-3a] Notes and the Class
[A-3b] Notes, the "Notes"), the net proceeds of which are being used to fund the
Reserve Account established pursuant to the Indenture and to make distributions
by the Issuer to the Seller and by the Seller to the Originator.

          E.   Pursuant to the Indenture, the Issuer is granting, inter alia, to
                                                                  ----- ----
the Trustee, for the benefit of the holders from time to time of the Notes, a
security interest in all right, title and interest of the Issuer in, to and
under the Leases, the Equipment and this Assignment and Servicing Agreement.
<PAGE>

          SECTION 1.    CAPITAL CONTRIBUTION

          1.01  Capital Contribution of Leases, Etc.
                -----------------------------------

          (a)   By their execution and delivery of this Assignment and Servicing
Agreement, the Originator, in consideration for the membership interests in the
Seller, hereby contributes, transfers, assigns, sets over and conveys to the
Seller, and the Seller hereby acquires from the Originator, without recourse
(except to the extent of the Originator's Purchase Obligations as set forth
herein), all of the Originator's right, title and interest in and to each of the
Leases (including all Related Interests).

          (b)   By their execution and delivery of this Assignment and Servicing
Agreement, the Seller, in consideration for the membership interests in the
Issuer, hereby contributes, transfers, assigns, sets over and conveys to the
Issuer, and the Issuer hereby acquires from the Seller without recourse (except
to the extent of the Seller's Purchase Obligations as set forth herein), all of
the Seller's right, title and interest in and to each of (i) the Leases
(including all Related Interests), and (ii) the covenants, representations,
warranties and other obligations of the Originator (including the Originator's
Purchase Obligation) under this Assignment and Servicing Agreement.

          1.02  Capital Contribution of and Grant of Security Interest in
                ---------------------------------------------------------
Equipment.
---------

          (a)   The Originator and the Seller each acknowledge and confirm that
the Originator, as additional consideration for the beneficial interests in the
Seller, is also contributing and transferring to the Seller, and in connection
with each transfer and assignment of Additional Leases and Substitute Leases,
the Originator will contribute and transfer to the Seller, without recourse, all
right, title and interest of the Originator in and to each item of Equipment
subject to each Lease, Additional Lease and Substitute Lease. After such
contribution and transfer by the Originator to the Seller, all right, title and
interest of the Originator in and to each item of Equipment subject to each
Lease shall be vested in the Seller.

          (b)   The Seller and the Issuer each acknowledge and confirm that the
Seller is granting a security interest to the Issuer, and in connection with
each transfer and assignment of Additional Leases and Substitute Leases the
Seller will grant a security interest to the Issuer, in all right, title and
interest of the Seller in and to each item of Equipment subject to each Lease,
Additional Lease and Substitute Lease, as security for the performance by the
Seller of its obligations under Section 5.05.  After such grant by the Seller to
the Issuer, the Issuer shall have a security interest in all right, title and
interest of the Seller in and to each item of Equipment subject to each Lease,
Additional Lease and Substitute Lease.

          1.03  Contribution of Leases; Grant of Security Interest.
                --------------------------------------------------

          It is the intention of the parties hereto that each transfer of
Leases, Additional Leases, Substitute Leases and Equipment by the Originator to
the Seller pursuant to Sections 1.01(a) and 1.02(a), and each transfer of
Leases, Additional Leases and Substitute Leases by the Seller to the Issuer
pursuant to Section 1.01(b), shall constitute an absolute assignment thereof by
way of capital contribution and not a loan.  Neither the Originator nor the
Seller shall take any action inconsistent with the treatment of such transfers
as absolute assignments by way of capital

                                       2
<PAGE>

contributions or with the Issuer's ownership of the Leases (including all
Related Interests). Each of the Originator, the Seller and the Issuer shall
indicate in its records that, and shall respond to any inquiries from third
parties by indicating that, (i) ownership of the Leases, Additional Leases,
Substitute Leases, including all Related Interests, is held by the Issuer and
pledged to the Trustee, pursuant to the Indenture, and (ii) ownership of each
item of Equipment subject to each Lease is held by the Seller (subject to the
security interest therein granted by the Seller to the Issuer hereunder and by
the Issuer to the Trustee pursuant to the Indenture). In the event, however,
that contrary to the expressed intentions of the parties, the transactions
evidenced by Sections 1.01(a), 1.01(b) and 1.02(a) do not constitute an absolute
transfer and assignment of assets pursuant to the provisions of such Sections,
then it is the intention of the parties hereto that this Assignment and
Servicing Agreement shall constitute a security agreement under applicable law
and that, effective as of the date hereof, the Originator shall be deemed to
have granted to the Seller, and the Seller shall be deemed to have granted to
the Issuer, first priority security interests, as follows:

                    (a)   Originator hereby grants to Seller a security interest
          in all of the Originator's right, title and interest in, to and under
          the following described property, whether such property (or
          Originator's right, title or interest therein) is now existing or is
          hereafter created, acquired or arising, and wherever located, as
          security for the payment and performance of all liabilities,
          indebtedness and obligations now or at any time or times hereafter
          owing by Originator to Seller, whether absolute or conditional, due or
          to become due, liquidated or unliquidated and arising under the terms
          of this Assignment and Servicing Agreement: (i) all Leases, including,
          without limitation, all Additional Leases and Substitute Leases; (ii)
          all amounts due or to become due at any time or times under or with
          respect to any of the Leases since the Cut-Off Date (other than any
          pre-payments of rent required pursuant to the terms of any Lease at or
          before the commencement of the Lease), including, without limitation,
          all Lease Payments, [Renewal Payments,] Casualty Payments, Retainable
          Deposits and Termination Payments; (iii) all rights to payment or
          performance under any Lease Guaranty; (iv) all rights and interests in
          any collateral with respect to any Lease, including any security
          deposit and any security interest in the Equipment securing the
          Lessee's obligations under any Lease; (v) all of the Originator's
          right, title and interest in and to any Equipment; (vi) all rights and
          benefits of Originator under this Assignment and Servicing Agreement;
          and (vii) all proceeds of any of the foregoing (collectively, the
          "Originator Collateral").

                    (b)   Seller hereby grants to Issuer a security interest in
          all of Seller's right, title and interest in, to and under the
          following described property, whether such property (or Seller's
          right, title or interest therein) is now existing or is hereafter
          created, acquired or arising, and wherever located, as security for
          the payment and performance of all liabilities, indebtedness and
          obligations now or at any time or times hereafter owing by Seller to
          Issuer, whether absolute or conditional, due or to become due,
          liquidated or unliquidated and arising under the terms of this
          Assignment and Servicing Agreement: (i) all Leases, including, without
          limitation, all Additional Leases and Substitute Leases; (ii) all
          amounts due or to become due at any time or times under or with
          respect to any Leases since the Cut-Off Date (other than any pre-
          payments of rent required pursuant to the terms of any Lease at or
          before the commencement of the Lease), including, without limitation,
          all Lease Payments, [Renewal Payments,] Casualty Payments, Retainable

                                       3
<PAGE>

          Deposits and Termination Payments; (iii) all rights to payment or
          performance under any Lease Guaranty; (iv) all rights and interests in
          any collateral with respect to any Lease, including any security
          deposit and any security interest in the Equipment securing the
          Lessee's obligations under any Lease; (v) all of the Seller's right,
          title and interest in and to any Equipment; (vi) all rights and
          benefits of Seller under this Assignment and Security Agreement; (vii)
          all interest of the Seller in any of the Originator Collateral,
          including, without limitation, the security interest granted by
          Originator to Seller in the Originator Collateral; and (viii) all
          proceeds of any of the foregoing (collectively, the "Seller
          Collateral").

          1.04  Servicer to Act as Custodian.
                ----------------------------

          (a)   The Servicer shall hold and acknowledges that it is holding the
Leases and all other assets in the Asset Pool that it may from time to time
receive hereunder as custodian for the Trustee, excluding any amounts
distributed to the Servicer by the Trustee in accordance with Section 3.03(b) of
the Indenture.

          (b)   The Servicer shall perform its duties under this Section 1.04 in
accordance with the standard set forth in Section 4.01 as such standard applies
to servicers acting as custodial agents.  The Servicer shall promptly report to
the Trustee any failure by it to hold the Leases as herein provided and shall
promptly take appropriate action to remedy any such failure but only to the
extent (i) any such failure is caused by the acts or omissions of the Servicer
and (ii) such remedial action is otherwise within its capabilities or control.
As custodian, the Servicer shall have the following powers and perform the
following duties:

          (A)   hold the Leases on behalf of the Trustee for the benefit of the
     Noteholders [and the Insurer], maintain accurate records pertaining to each
     Lease to enable it to comply with the terms and conditions of this
     Assignment and Servicing Agreement, and maintain a current inventory
     thereof;

          (B)   implement policies and procedures in accordance with the
     Servicer's normal business practices with respect to the handling and
     custody of the Leases so that the integrity and physical possession of the
     Leases will be maintained; and

          (C)   attend to all details in connection with maintaining custody of
     the Leases on behalf of the Issuer and for the Trustee on behalf of the
     Noteholders and the Insurer.

          (c)   In acting as custodian of the Leases, the Servicer agrees
further that it does not and will not have or assert any beneficial ownership
interest in such Leases. The Servicer shall mark conspicuously its master data
processing records evidencing each Lease with a legend, acceptable to the
Trustee [and the Insurer], evidencing that (i) all right, title and interest in
the Leases has been contributed and transferred to the Issuer and pledged by the
Issuer to the Trustee as provided in the Indenture, and (ii) a security interest
in all right, title and interest of the Seller in and to the related Equipment
has been granted by the Seller to the Issuer hereunder and pledged by the Issuer
to the Trustee as provided in the Indenture.

          (d)   Subject to the provisions of this Assignment and Servicing
Agreement, the Servicer agrees to maintain the Leases at its office at 1738 Bass
Road, Macon, Georgia or at such

                                       4
<PAGE>

other offices of the Servicer as shall from time to time be identified by prior
written notice to the Trustee [and the Insurer]. The Servicer shall keep the
originals of the Leases and related Lease files segregated from other leases,
records and files of the Servicer in a place where it is indicated that they are
being held for the Trustee; provided, however, that the originals of the Leases
                            --------  -------
and related Lease files in respect of obligors in the State of Florida need not
be so segregated provided that such Leases (and Lease files) are also retained
in imaged form and the Servicer is in compliance with the requirements of
Section 1.04(c). Notwithstanding the foregoing, the Servicer may temporarily
move individual Leases or any portion thereof and related Lease files without
notice as necessary to conduct collection and other servicing activities.

          (e)   Notwithstanding anything to the contrary contained herein, in
the event that the long-term debt rating assigned to the Servicer is downgraded
below BBB- by S&P or Baa3 by Moody's, the Servicer shall deliver the originals
of all of the Leases (and related Lease files), including the originals of any
Leases (and related Lease files) in imaged form, to the Trustee within three (3)
Business Days of receipt of written demand by the Insurer.

          1.05  No Recourse to IKON Office Solutions, Inc. or Affiliates.
                --------------------------------------------------------

          Notwithstanding anything to the contrary contained here, the
contributions and transfers of the Leases and Equipment pursuant to Sections
1.01(a), 1.01(b) and 1.02(a) are without representation or warranty by, or
recourse to or against, IKON Office Solutions, Inc. or any subsidiary or
Affiliate of IKON Office Solutions, Inc. other than the Originator and the
Seller, including any right to require IKON Office Solutions, Inc. or any such
subsidiary or Affiliate other than the Originator or the Seller to purchase or
acquire any Lease or item of Equipment for any reason or to compensate the
Originator, the Seller, the Issuer or any other Person for or in respect of any
Lease or item of Equipment (whether on account of the non-payment of any lease
or rental payment or for any other reason).

          SECTION 2.    REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR

          The Originator, as Originator and Servicer, hereby represents and
warrants as follows:

          2.01  Corporate Organization and Authority.
                ------------------------------------

                The Originator:

          (a)   is a corporation duly organized, validly existing and in good
                standing under the laws of its jurisdiction of incorporation,

          (b)   has all requisite power and authority and all necessary licenses
                and permits to own and operate its properties and to carry on
                its business as now conducted (except where the failure to have
                such licenses and permits would not have a material adverse
                effect on the Asset Pool or the business or condition (financial
                or otherwise) of the Originator or impair the enforceability of
                any Lease) and to enter into and perform its obligations

                                       5
<PAGE>

                under this Assignment and Servicing Agreement, and the
                transactions contemplated hereby, including performance of the
                duties of the Servicer and the Originator's support obligations
                hereunder, and

          (c)   has duly qualified and is authorized to do business and is in
                good standing as a foreign corporation in each jurisdiction
                where the character of its properties or the nature of its
                activities makes such qualification necessary (except where the
                failure to be so qualified or in good standing would not have a
                material adverse effect on the Asset Pool or the business or
                condition (financial or otherwise) of the Originator or impair
                the enforceability of any Lease).

          2.02  Business and Property.
                ---------------------

          The Prospectus accurately describes in all material respects the
general nature of the business of the Originator.

          2.03  Financial Statements.
                --------------------

          (a)   The consolidated balance sheet of the Originator and its
consolidated subsidiaries for the fiscal years ended September 30, ____ and
September 30, ____ and the related consolidated statements of income, retained
earnings and cash flow for the respective fiscal years ended on such dates, all
accompanied by reports thereon containing opinions without qualification, except
as therein noted, by [either PricewaterhouseCoopers, independent certified
public accountants, or Ernst & Young, independent certified public accountants],
and the unaudited interim consolidated balance sheets of the Originator and its
consolidated subsidiaries as of [__________, ____] and as of [__________, ____]
and the related consolidated statements of income, retained earnings and cash
flow for the three months ended [__________, _____] and [___________, ____],
respectively, have been prepared in accordance with generally accepted
accounting principles consistently applied, and present fairly the financial
position of the Originator and its subsidiaries as of such dates and the results
of their operations for such periods.

          (b)   Except as disclosed in the Prospectus and the financial
statements referred to in the preceding Section 2.03(a), since September 30,
____ there has been no change in the business, condition or prospects (financial
or otherwise) of the Originator except changes in the ordinary course of
business, none of which individually or in the aggregate has been materially
adverse. Neither the Originator nor any of its subsidiaries has any material
liabilities or obligations not incurred in the ordinary course of business other
than those disclosed in the financial statements referred to in Section 2.03(a)
or for which adequate reserves are reflected in such financial statements.

          2.04  Equipment and Leases.
                --------------------

          (a)   Prior to the date of each contribution and transfer of any
Leases and each contribution and transfer or grant of a security interest in the
related Equipment in accordance with Sections 1.01 and 1.02, the Originator
purchased each item of Equipment from the manufacturer or other supplier. The
Originator has paid in full, to the manufacturer or supplier,

                                       6
<PAGE>

as the case may be, the purchase price and any related charges in connection
with the acquisition of the Equipment. The contribution to the Seller and the
concurrent contribution to the Issuer of the Leases, the contribution of all of
the Originator's right, title and interest in each item of Equipment to the
Seller and the grant of a security interest in the Seller's interests in each
item of Equipment to the Issuer, do not violate the terms or provisions of any
Lease or any other agreement to which the Originator is a party or by which it
is bound.

          (b)   Immediately prior to the completion of each contribution and
transfer described in Sections 1.01(a), 1.01(b) and 1.02(a), the Originator will
(i) be the legal owner of the Leases (including all Related Interests) and (ii)
have good title to each item of Equipment.  Upon completion of each contribution
and transfer described in Sections 1.01(a), 1.01(b) and 1.02(a) and the grant of
the security interest described in Section 1.02(b), (i) the Issuer will be the
legal owner of the related Leases (including all Related Interests), (ii) the
Seller will have good title to each item of related Equipment, and (iii) the
Issuer will have a valid security interest in all of the Seller's right, title
and interest in and to each item of related Equipment.

          (c)   At the time of each transfer of a Lease hereunder, (A) each such
Lease (i) will be a triple-net lease (i.e., pursuant to which the Lessee is
                                      - -
unconditionally responsible for the payment of insurance, maintenance and taxes
with respect to the Equipment subject to the Lease); (ii) will be a legal, valid
and binding full recourse obligation of the Lessee thereunder, enforceable by
the Issuer (and by the Trustee as assignee of the Issuer) against such Lessee in
accordance with the terms thereof, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization or other similar laws relating to or
affecting the enforcement of creditors' rights and by general equity principles;
and (iii) provides that it is noncancellable by the Lessee; and (iv) will be in
full force and effect; (B) any and all requirements of any federal, state or
local law, including, without limitation, usury, truth-in-lending and equal
credit opportunity laws applicable to such Lease will have been complied with;
and (C) the Originator has no knowledge (after due inquiry) of any challenge,
dispute or claim by or against the Lessee under or affecting such Lease or of
the bankruptcy or insolvency of the applicable Lessee.  As of the initial
Determination Date, or the effective date of the transfer of any Additional
Lease or Substitute Lease, each Lessee has paid the first scheduled installment
of rent under its respective Lease.

          (d)   At the time that any Lease is contributed and transferred
hereunder, the Originator will have no knowledge that any item of the Equipment
subject thereto has suffered any loss or damage which has not been repaired.

          (e)   Each Lease requires the Lessee thereunder to maintain insurance
on the Equipment subject thereto in an amount sufficient to fully insure such
Equipment.

          (f)   In addition to the insurance maintained by the Lessees with
respect to the Equipment, the Originator (or an Affiliate of the Originator)
maintains (i) one or more casualty insurance policies which, in the aggregate,
are in an amount not less than the aggregate Outstanding Principal Amount of the
Notes, (ii) a general liability insurance policy in the aggregate amount of
$1,000,000 and (iii) an excess liability insurance policy in umbrella form in
the aggregate amount of $10,000,000. Each of such policies is in full force and
effect and covers all Equipment. All premiums in respect of such policies have
been paid. Each of the Trustee

                                       7
<PAGE>

and the Issuer are named as loss payees and additional insureds, as their
interests may appear, on such casualty and liability policies maintained by the
Originator and will be provided with copies of all such policies upon written
request.

          (g)  No Lease has outstanding rent which is more than 62 days past due
as of the Cut-Off Date.

          (h)  Each Lease was entered into by the Originator in accordance with
the Originator's regular credit approval process described in the Prospectus,
and no selection procedures adverse to the credit quality of the Asset Pool were
employed in selecting the Leases for contribution under this Assignment and
Servicing Agreement.

          (i)  Each Lease provides that the obligation of the Lessee to pay rent
thereunder throughout the term thereof is and will be unconditional without
regard to any event affecting the Equipment, the obsolescence of any Equipment,
any claim of such Lessee against the Issuer, the Originator or the Servicer or
any change in circumstance of such Lessee or any other circumstance whatsoever
except to the extent that in the event of a casualty of any item of Equipment,
the Lessee, at a minimum, is obligated to pay, in lieu of the future Lease
Payments with respect to such item, the outstanding principal or net book value
of the Leases and any applicable make whole premium.

          (j)  Each of the Leases provides that payments thereunder are not
subject to setoff or reduction.

          (k)  In the case of each Lease which consists of a master lease and
one or more exhibits or schedules thereto, the Originator has neither assigned
such master lease in its entirety, nor delivered physical possession of such
master lease, to any Person other than the Seller, the Issuer or the Trustee (or
the trustee under another indenture in a transaction substantially similar to
the transaction contemplated hereby, which other indenture provides that the
lien thereof on such master lease extends only to such master lease insofar as
it relates to lease schedules which are not part of the Asset Pool).

          (l)  As of the time of each contribution and transfer of Lease  s
hereunder, there are no facts or circumstances which give rise, or would give
rise at any time in the future, to any right of rescission, setoff, counterclaim
or defense, including the defense of usury, to obligations of any Lessee,
including the obligation of such Lessee to pay all amounts due with respect to
any Lease to which such Lessee is a party, and neither the operation of any of
the terms of any Lease or the exercise of any right thereunder will render such
Lease unenforceable in whole or in part or subject to any right of rescission,
setoff, counterclaim or defense, including the defense of usury, and no such
right of rescission, setoff, counterclaim or defense has been asserted with
respect thereto.

          (m)  As of the time of each contribution and transfer of Leases
hereunder, no Lease has been amended, altered or modified in any material
respect except in writing, and copies of all such writings are attached to the
Lease.

          (n)  As of the time of each contribution and transfer of Leases
hereunder, no Lessee will have been released, in whole or in part, from any of
its obligations in respect of any

                                       8
<PAGE>

Lease; no Lease will have been satisfied, cancelled or subordinated, in whole,
or in part, or rescinded, and no Equipment covered by any Lease will have been
released from such Lease, in whole or in part, nor has any instrument been
executed that would effect any such satisfaction, release, cancellation,
subordination or rescission.

          (o)  As of the time of each contribution and transfer of Leases
hereunder, each Lease was originated by the Originator in the ordinary course of
its business.

          (p)  The Leases do not violate any U.S. or state laws and no Lease was
originated in or is subject to the laws of any jurisdiction whose laws would
make any of the transfers and contributions under this Assignment and Servicing
Agreement unlawful.

          (q)  All parties to each Lease had authority and capacity to execute
such Lease.

          (r)  None of the Leases is a consumer lease.

          (s)  The final Lease Payment on each Lease is due and payable on or
prior to _____________ and, as of the Cut-Off Date, the maximum remaining term
of any Lease did not exceed ___ months.

          (t)  Each Lease agreement is "chattel paper" within the meaning of the
Uniform Commercial Code in the states of New York and Georgia, and there is only
one original of each Lease.

          (u)  Each Lease provides that it is noncancellable by the Lessee and
none of the Leases contains early termination options (except for Leases which
contain early termination or prepayment clauses which require the Lessee to pay
the remainder of all remaining Lease Payments under such Lease upon such
cancellation or prepayment);

          (v)  None of the Leases is subject to any guaranty by the Originator.

          (w)  The Leases have been transferred by the Originator to the Seller
and by the Seller to the Issuer, in each case free and clear of any liens and
are assignable without prior written consent of the Lessee.

          (x)  The Leases are U.S. dollar-denominated and the Lessor and each
Lessee is located in the United States.

          (y)  As of the Cut-Off Date, no more than two percent (3%) of the
Leases in the Asset Pool will consist of Leases with government entities as the
obligor.

          (z)  Each Lessee has represented to the Originator that it has
accepted the Equipment.

          (aa) No Lessee is a subject of an insolvency or bankruptcy proceeding
at the time of the transfer.

                                       9
<PAGE>

          (bb) No Lease is a Non-Performing Lease and each Lease is no more than
60 days past due at the time of transfer.

          (cc) Each Lease provides for periodic payments.

          (dd) All the Leases were originated in the United States.

          2.05 Payments.
               --------

          (a)  The aggregate amounts of Lease Payments payable by the Lessees
under the Leases during each Due Period, together with amounts on deposit in the
Reserve Account, are sufficient to cover the Servicing Fee, the premium due in
respect of the Policy and the principal and interest on the Notes, as such
payments become due and payable.

          (b)  The portfolio detail set forth in Schedule 1 hereto (i)
accurately sets forth, as of the Cut-Off Date, the amount of each Lease Payment
due under each of the Leases and the month in which such Lease Payment is to be
paid in accordance with the terms of the Lease under which the same is to be
paid, (ii) accurately sets forth, as of the Cut-Off Date, the information with
respect to the other characteristics of the Leases and the Equipment described
in such portfolio detail and (iii) is otherwise true and correct in all
respects.

          2.06 Full Disclosure.
               ---------------

          The Prospectus (including, without limitation, the statistical and
descriptive information with respect to the initial Leases, Lessees and
Equipment), as of the date of the Prospectus Supplement, does not contain any
untrue statement of a material fact or omit a material fact necessary to make
the statements contained therein, in light of the circumstances under which they
were made, not misleading; [provided, however, that no representation or
                            --------  -------
warranty is made with respect to the information set forth in the Prospectus
Supplement under the heading "The Insurer and the Policy" (including information
incorporated by reference therein).]  There is no fact peculiar to the
Originator or any Affiliate of the Originator or, to the knowledge of the
Originator, any Lease, Lessee or item of Equipment, which the Originator has not
or will not disclose in the Prospectus which materially affects adversely or, so
far as the Originator can now reasonably foresee, will materially affect
adversely the ability of the Originator to perform the transactions contemplated
by this Assignment and Servicing Agreement.

          2.07 Pending Litigation.
               ------------------

          There are no proceedings or investigations pending, or to the
knowledge (after due inquiry) of the Originator threatened, against or affecting
the Originator or any subsidiary in or before any court, governmental authority
or agency or arbitration board or tribunal, including, but not limited to, any
such proceeding or investigation with respect to any environmental or other
liability resulting from the ownership or use of any of the Equipment, which,
individually or in the aggregate, would materially and adversely affect the
properties, business, profits or condition (financial or otherwise) of the
Originator and its subsidiaries, or the ability of the Originator or the
Servicer to perform its obligations under this Assignment and Servicing

                                      10
<PAGE>

Agreement. The Originator is not in default with respect to any order of any
court, governmental authority or agency or arbitration board or tribunal.

          2.08 Title to Leases and Equipment.
               -----------------------------

          Immediately following the transfer and contribution by the Originator
to the Seller of the Leases and the Equipment, the transfer and contribution by
the Seller to the Issuer of the Leases and the security interest granted by the
Seller to the Issuer in all of the Seller's interest in the Equipment, in each
case as contemplated in Section 1, (a) the Leases  and the Equipment will be
free and clear of all Liens, except the rights of each Lessee under the related
Lease, the rights of the Seller and the Issuer hereunder and the Lien in favor
of the Trustee granted pursuant to the Indenture, and (b) there will be no
delinquent taxes or other outstanding charges affecting the Equipment which is
or may give rise to any Lien prior to, or equal or coordinate with, the Lien of
the Trustee under the Indenture.

          2.09 Transactions Legal and Authorized.
               ---------------------------------

          The contribution and transfer by the Originator to the Seller of the
Leases  and the Equipment and compliance by the Originator with all of the
provisions of this Assignment and Servicing Agreement:

          (a)  have been duly authorized by all necessary corporate action on
the part of the Originator, and do not require any stockholder approval, or
approval or consent of any trustee or holders of any indebtedness or obligations
of the Originator except such as have been duly obtained;

          (b)  are within the corporate powers of the Originator; and

          (c)  are legal and will not conflict with, result in any breach in any
of the provisions of, constitute a default under, or result in the creation of
any Lien upon any property of the Originator under the provisions of, any
agreement, charter instrument, by-law or other instrument to which the
Originator is a party or by which it or its property may be bound or result in
the violation of any law, regulation, rule, order or judgment applicable to the
Originator or its properties, or any order to which the Originator or its
properties is subject, of or by any government or governmental agency or
authority.

          2.10 Governmental Consent.
               --------------------

          Except for the filing of the Required Financing Statements, no
consent, approval or authorization of, or filing, registration or qualification
with, any governmental authority is necessary or required on the part of the
Originator in connection with the execution and delivery of this Assignment and
Servicing Agreement, the contribution and transfer of the Leases and Equipment
to the Seller contemplated hereby or the performance by the Originator of its
obligations hereunder.

                                      11
<PAGE>

          2.11 Taxes.
               -----

          (a)  All tax returns required to be filed by the Originator or any
subsidiary in any jurisdiction have in fact been filed, and all taxes,
assessments, fees and other governmental charges upon the Originator or any
subsidiary, or upon any of their respective properties, income or franchises,
shown to be due and payable on such returns have been paid.  To the best of the
Originator's knowledge all such tax returns were true and correct and neither
the Originator nor any subsidiary knows of any proposed additional tax
assessment against it in any material amount nor of any basis therefor.

          (b)  The provisions for taxes on the books of the Originator and each
of its subsidiaries are in accordance with generally accepted accounting
principles.

          2.12 Compliance with Law.
               -------------------

               The Originator:

               (a)  is not in violation of any laws, ordinances, governmental
                    rules or regulations to which it is subject;

               (b)  has not failed to obtain any licenses, permits, franchises
                    or other governmental authorizations necessary to the
                    ownership of its property or to the conduct of its business;
                    and

               (c)  is not in violation in any material respect of any term of
                    any agreement, charter instrument, by-law or other
                    instrument to which it is a party or by which it may be
                    bound,

               which violation or failure to obtain might materially adversely
               affect the Asset Pool or the business or condition (financial or
               otherwise) of the Originator and its subsidiaries.

          2.13 ERISA.
               -----

          (a)  The present value of all benefits vested under all "employee
pension benefit plans," as such term is defined in Section 3 of ERISA,
maintained by or contributed to by the Originator and its Related Persons (other
than multi-employer plans as such term is defined in Section 3 of ERISA), as
from time to time in effect (herein called the "Pension Plans"), does not exceed
the value of the assets of the Pension Plans allocable to such vested benefits;

          (b)  No Prohibited Transactions, Accumulated Funding Deficiencies, or
Reportable Events have occurred with respect to any Pension Plans that, in the
aggregate, could subject the Originator to any material tax, penalty or other
liability; and

          (c)  No notice of intent to terminate a Pension Plan under a distress
termination has been filed, nor has the PBGC instituted proceedings to
terminate, or appoint a trustee to administer, a Pension Plan and no event has
occurred or condition exists which might

                                      12
<PAGE>

constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan.

          2.14 Ability to Perform.
               ------------------

          At the date hereof, the Originator does not believe, nor does it have
any reasonable cause to believe, that it cannot (a) perform each and every
covenant contained in this Assignment and Servicing Agreement or (b) perform its
obligations hereunder as Servicer.

          2.15 Ordinary Course; No Insolvency.
               ------------------------------

          The transactions contemplated by the Notes, the Indenture and this
Assignment and Servicing Agreement are being consummated by the Originator in
furtherance of the Originator's ordinary business purposes and constitute a
practical and reasonable course of action by the Originator designed to improve
the financial position of the Originator, with no contemplation of insolvency
and with no intent to hinder, delay or defraud any of its present or future
creditors.  The Originator will not, either as a result of the transaction
contemplated by this Assignment and Servicing Agreement, or immediately before
or after such transaction, be insolvent or have an unreasonably small capital
for the conduct of its business and the payment of existing and anticipated
obligations.

          2.16 Assets and Liabilities.
               ----------------------

          (a)  Both immediately before and after any transfer and contribution
by the Originator to the Seller of Leases and Equipment contemplated by this
Assignment and Servicing Agreement, the present fair salable value of the
Originator's assets was or will be in excess of the amount that will be required
to pay the Originator's probable liabilities as they then exist and as they
become absolute and matured; and

          (b)  Both the Originator to the Seller of Leases and Equipment
contemplated by this Assignment and Servicing Agreement, the sum of the
Originator's assets was or will be greater than the sum of the Originator's
debts, valuing the Originator's assets at a fair salable value.

          2.17 Fair Consideration.
               ------------------

          The consideration received by the Originator, in exchange for the
contribution and transfer of the Leases and Equipment pursuant to this
Agreement, is fair consideration having value equivalent to or in excess of the
value of the assets being contributed by the Originator.

          2.18 Ability to Pay Debts.
               --------------------

          The Originator does not believe that it will incur debts beyond its
ability to pay or which would be prohibited by its charter documents or by-laws
as a result of the transactions contemplated by this Assignment and Servicing
Agreement or otherwise.  The Originator's assets and cash flow enable it to meet
its present obligations in the ordinary course of business as they become due.

                                      13
<PAGE>

          2.19 Bulk Transfer Provisions.
               ------------------------

          The contribution and transfer of the Leases and Equipment by the
Originator to the Seller, the contribution and transfer of the Leases by the
Seller to the Issuer and the grant of the security interest in the Seller's
interest in the Equipment by the Seller to the Issuer, in each case as
contemplated in Section 1, are not subject to the bulk transfer or any similar
statutory provisions in effect in any applicable jurisdiction.

          2.20 Transfer Taxes.
               --------------

          The contribution and transfer of the Leases and Equipment by the
Originator to the Seller, the contribution and transfer by the Seller to the
Issuer of the Leases and the grant by the Seller to the Issuer of a security
interest in the Seller's interest in the Equipment, in each case as contemplated
in Section 1, are not subject to and will not result in any tax, fee or
governmental charge payable by the Originator to any federal, state or local
government ("Transfer Taxes").  In the event that the Seller or the Issuer
receives actual notice of any Transfer Taxes arising out of any such
contribution and transfer or grant, on written demand by the Issuer, or upon the
Originator otherwise being given notice thereof, the Originator shall pay, and
otherwise indemnify and hold the Issuer, the Seller, the Trustee and the holders
of the Notes harmless, on an after-tax basis, from and against any and all such
Transfer Taxes (it being understood that the Seller, the Issuer, the holders of
the Notes and the Trustee shall have no obligation to pay such Transfer Taxes).

          2.21 Principal Executive Office.
               --------------------------

          The principal executive office of each of the Originator and the
Servicer is located at 1738 Bass Road, Macon, Georgia  31210.

          2.22 Servicing Provisions Customary.
               ------------------------------

          The servicing arrangements hereunder, including without limitation the
terms and conditions pursuant to which the Originator will act as Servicer and
the Servicing Fee to be paid to the Originator, are consistent with the
arrangements and customary practices of the Originator when providing comparable
services to non-affiliated entities and of other servicers in the equipment
leasing industry.

          2.23 Nonconsolidation.
               ----------------

          The Originator is and at all times since its incorporation has been
operated in such a manner that it would not be substantively consolidated with
either the Seller or the Issuer and such that the separate existence of any of
the Originator, the Seller or the Issuer would not be disregarded in the event
of a bankruptcy or insolvency of the Originator or the Seller or the Issuer, and
in such regard:

          (a)  the Originator is not involved in the day-to-day management of
the Seller or the Issuer;

                                      14
<PAGE>

          (b)  the Originator maintains separate corporate records and books of
account from the Seller and the Issuer and otherwise observes corporate
formalities and has a separate business office from the Seller and the Issuer;

          (c)  the financial statements and books and records of the Originator
prepared after the Issuance Date will reflect the separate existence of the
Seller and the Issuer;

          (d)  the Originator maintains its assets separately from the assets of
the Seller and the Issuer (including through the maintenance of a separate bank
account), the Originator's funds and assets, and records relating thereto, have
not been and are not commingled with those of the Seller and the Issuer and the
separate creditors of the Seller and the Issuer will be entitled to be satisfied
out of the Seller's and the Issuer's respective assets prior to any value in the
Seller or the Issuer becoming available to the Seller's or the Issuer's
equityholders or the Originator's creditors;

          (e)  all business correspondence of the Originator and other
communications are conducted in the Originator's own name and on its own
stationery; and

          (f)  neither the Seller nor the Issuer acts as an agent of the
Originator in any capacity and the Originator does not act as agent for the
Seller or the Issuer, but instead presents itself to the public as a corporation
separate from the Seller and the Issuer; provided that the Originator is the
                                         --------
Servicer hereunder and under agreements similar in nature to this Agreement.

          2.24 Capital Contribution Treatment.
               ------------------------------

          The Originator will treat the contribution and transfer to the Seller
of the Leases  and the Equipment as a capital contribution for financial
accounting and reporting purposes.

          SECTION 3. REPRESENTATIVES AND WARRANTIES OF THE SELLER

          The Seller hereby represents and warrants as follows:

          3.01 Corporate Organization and Authority.
               ------------------------------------

               The Seller:

               (a)  is a limited liability company duly organized, validly
                    existing and in good standing under the laws of its
                    jurisdiction of organization,

               (b)  has all requisite power and authority and all necessary
                    licenses and permits to own and operate its properties and
                    to carry on its business as now conducted and to enter into
                    and perform its obligations under this Assignment and
                    Servicing Agreement, and the transactions contemplated
                    hereby including its obligations under Section 5.05, and

               (c)  has duly qualified and is authorized to do business and is
                    in good standing as a foreign limited liability company in
                    each jurisdiction

                                      15
<PAGE>

                    where the character of its properties or the nature of its
                    activities makes such qualification necessary.

          3.02 Business and Property.
               ---------------------

          The Prospectus accurately describes, in all material respects, the
general nature of the business of the Seller.

          3.03 Ownership and Security Interest.
               -------------------------------

          Upon completion of each contribution and transfer described in
Sections 1.01(a), 1.01(b) and 1.02(a) and the grant of the security interest
described in Section 1.02(b), (i) the Issuer will be the legal owner of the
related Leases (including all Related Interests), (ii) the Seller will have good
title to each item of related Equipment, and (iii) the Issuer will have a valid
security interest in all of the Seller's right, title and interest in and to in
each item of related Equipment.

          3.04 Title to Leases and Equipment.
               -----------------------------

          Immediately following the transfer and contribution by the Originator
to the Seller of the Leases and the Equipment, the transfer and contribution by
the Seller to the Issuer of the Leases and the grant by the Seller to the Issuer
of the security interest in the Seller's interests in the Equipment, in each
case as contemplated in Section 1, (a) the Leases and the Equipment will be free
and clear of all Liens, except the rights of each Lessee under the related
Lease, the rights of the Seller and the Issuer hereunder and the Lien in favor
of the Trustee granted pursuant to the Indenture, and (b) there will be no
delinquent taxes or other outstanding charges affecting the Equipment which have
given or may give rise to any Liens prior to, or equal or coordinate with, the
Lien of Trustee under the Indenture.

          3.05 Transactions Legal and Authorized.
               ---------------------------------

          The contribution and transfer by the Seller of all of its right, title
and interest in and to the Leases and of the covenants, representations,
warranties and obligations of the Originator (including the Originator's
Purchase Obligation) under this Assignment and Servicing Agreement, the grant of
the security interest by the Seller to the Issuer in and to each item of
Equipment and compliance by the Seller with all of the provisions of this
Assignment and Servicing Agreement:

          (a)  have been duly authorized by all necessary action on the part of
the Seller, as a limited liability company, and do not require any member
approval, or approval or consent of any trustee or holders of any indebtedness
or obligations of the Seller except such as have been duly obtained;

          (b)  are within the powers of the Seller, as a limited liability
company; and

          (c)  are legal and will not conflict with, result in any breach in any
of the provisions of, constitute a default under, or result in the creation of
any Lien upon any property of the Seller under the provisions of, any agreement,
charter instrument, by-law or other

                                      16
<PAGE>

instrument to which the Seller is a party or by which it or its property may be
bound or result in the violation of any law, regulation, rule, order or judgment
applicable to the Seller or its properties, or any order to which the Seller or
its properties is subject, of or by any government or governmental agency or
authority.

          3.06 Governmental Consent.
               --------------------

          Except for the filing of Financing Statements in accordance with the
Filing Requirements, no consent, approval or authorization of, or filing,
registration or qualification with, any governmental authority is necessary or
required on the part of the Seller in connection with the execution and delivery
of this Assignment and Servicing Agreement, the contribution and transfer by the
Seller to the Issuer of the Leases and the grant of the security interest by the
Seller to the Issuer in the Seller's interest in the Equipment contemplated
hereby.

          3.07 Compliance with Law.
               -------------------

               The Seller:

               (a)  is not in violation of any laws, ordinances, governmental
                    rules or regulations to which it is subject;

               (b)  has not failed to obtain any licenses, permits, franchises
                    or other governmental authorizations necessary to the
                    ownership of its property or to the conduct of its business;
                    and

               (c)  is not in violation in any material respect of any term of
                    any agreement, charter instrument, by-law or other
                    instrument to which it is a party or by which it may be
                    bound,

               which violation or failure to obtain might materially adversely
               affect the Asset Pool or the business or condition (financial or
               otherwise) of the Seller and its subsidiaries.

          3.08 Assets and Liabilities.
               ----------------------

          (a)  Both immediately before and after any contribution and transfer
by the Seller to the Issuer of the Leases and the grant of the security interest
in the interests of the Seller in the Equipment contemplated by this Assignment
and Servicing Agreement, the present fair salable value of the Seller's assets
was or will be in excess of the amount that will be required to pay the Seller's
probable liabilities as they then exist and as they become absolute and matured;
and

          (b)  Both immediately before and after any contribution and transfer
by the Seller to the Issuer of the Leases and the grant of the security interest
in the interests of the Seller in the Equipment contemplated by this Assignment
and Servicing Agreement, the sum of the Seller's assets was or will be greater
than the sum of the Seller's debts, valuing the Seller's assets at a fair
salable value.

                                      17
<PAGE>

          3.09 Fair Consideration.
               ------------------

          The consideration received by the Seller, in exchange for the
contribution and transfer of the Leases, the grant of the security interest in
the interests of the Seller in the Equipment and the assignment and contribution
of the covenants, representations, warranties and obligations of the Originator
(including the Originator's Purchase Obligation) under this Assignment and
Servicing Agreement, is fair consideration having value equivalent to or in
excess of the value of the assets being contributed by the Seller.

          3.10 Ability to Pay Debts.
               --------------------

          The Seller does not believe that it will incur debts beyond its
ability to pay or which would be prohibited by its charter documents or limited
liability company agreement as a result of the transactions contemplated by this
Assignment and Servicing Agreement or otherwise.  The Seller's assets and cash
flow enable it to meet its present obligations in the ordinary course of
business as they become due.

          3.11 Bulk Transfer Provisions.
               ------------------------

          The contribution and transfer by the Seller to the Issuer of the
Leases and the grant by the Seller to the Issuer of the security interest in the
interests of the Seller in the Equipment pursuant to this Assignment and
Servicing Agreement are not subject to the bulk transfer or any similar
statutory provisions in effect in any applicable jurisdiction.

          3.12 Transfer Taxes.
               --------------

          The contribution and transfer by the Seller to the Issuer of the
Leases and the grant of the security interest by the Seller to the Issuer in the
Seller's interest in the Equipment pursuant to this Assignment and Servicing
Agreement are not subject to and will not result in any Transfer Taxes.  In the
event that the Issuer receives actual notice of any Transfer Taxes arising out
of any such contribution and transfer or pledge, on written demand by the
Issuer, or upon the Seller otherwise being given notice thereof, the Seller
shall pay, and otherwise indemnify and hold the Issuer, the Trustee and the
holders of the Notes harmless, on an after-tax basis, from and against any and
all such Transfer Taxes (it being understood that the Issuer, the holders of the
Notes and the Trustee shall have no obligation to pay such Transfer Taxes).

          3.13 Principal Executive Office.
               --------------------------

          The principal executive offices of the Seller are located at 1738 Bass
Road, Macon, Georgia  31210.  The Seller has no place of business in any state
other than the State of Georgia.

          3.14 Nonconsolidation.
               ----------------

          The Seller is and at all times since its incorporation has been
operated in such a manner that it would not be substantively consolidated with
the Originator or the Issuer and such that the separate existence of any of the
Originator, the Seller or the Issuer would not be

                                      18
<PAGE>

disregarded in the event of a bankruptcy or insolvency of the Seller or the
Issuer, and in such regard:

          (a)  the Seller is not involved in the day-to-day management of the
Originator or the Issuer;

          (b)  the Seller maintains separate corporate records and books of
account from the Originator and the Issuer and otherwise observes corporate
formalities and has a separate business office from the Originator and the
Issuer;

          (c)  the financial statements and books and records of the Seller
prepared after the Issuance Date will reflect the separate existence of the
Originator and the Issuer;

          (d)  the Seller maintains its assets separately from the assets of the
Originator and the Issuer (including through the maintenance of a separate bank
account), the Seller's funds and assets, and records relating thereto, have not
been and are not commingled with those of the Originator or the Issuer and the
separate creditors of the Originator and the Issuer will be entitled to be
satisfied out of the Originator's and the Issuer's respective assets prior to
any value in the Originator or the Issuer becoming available to the Originator's
or the Issuer's equityholders or the Seller's creditors;

          (e)  all business correspondence of the Seller and other
communications are conducted in the Seller's own name and on its own stationery;
and

          (f)  neither the Originator nor the Issuer acts as an agent of the
Seller in any capacity and the Seller does not act as agent for the Originator
or the Issuer, but instead presents itself to the public as a corporation
separate from the Originator and the Issuer.

          3.15 Capital Contribution Treatment.
               ------------------------------

          The Seller will treat the transfer to the Issuer of the Leases and
amounts owed by Lessees under the Leases and of its interests (other than its
ownership interest) in the Equipment as a capital contribution for financial
accounting and reporting purposes.

          SECTION 4.   ADMINISTRATION OF LEASES

          4.01 Servicer to Act.
               ---------------

          (a)  Notwithstanding the contribution and transfer by the Originator
of the Leases and the Equipment contemplated hereby, the Servicer, for the
benefit of the Issuer, will service and administer each Lease in accordance with
the terms thereof and of this Assignment and Servicing Agreement. The Servicer
shall take, or cause to be taken, all such actions as may be necessary or
advisable to service, administer and collect each Lease from time to time, all
in accordance with (i) customary and prudent servicing procedures for leases of
a similar type, (ii) all applicable laws, rules and regulations, and (iii)
without limitation as to its obligations under the preceding clauses (i) and
(ii), no less a standard of care than that which it applies to leases it
services for its own account. The Servicer shall provide the Lessees with
appropriate invoices and such other notices as may be required to ensure that
all Lease Payments, Casualty Payments

                                      19
<PAGE>

and Termination Payments on or in respect of each Lease are remitted by the
Lessees to the address specified by the Servicer. The Servicer shall deposit
such payments to the Collection Account within two Business Days of the receipt
thereof. Any other amount received by the Servicer from time to time from the
Originator, the Issuer or any Lessee which is subject to the Lien of the
Indenture shall be held in trust by the Servicer, as agent for the Trustee and
promptly turned over to the Trustee or deposited into the Collection Account for
application in accordance with the provisions of the Indenture.

     (b)  The Servicer shall do, and shall have full power and authority to do,
subject only to the specific requirements and prohibitions of this Assignment
and Servicing Agreement, any and all things in connection with the servicing and
administration of the Leases and the interests in the Equipment which are
consistent with the manner in which it services leases and equipment
constituting part of its own portfolio and consistent with the customary
practices of servicers in the equipment leasing industry, but in performing its
duties hereunder, the Servicer will act on behalf and for the benefit of the
Issuer, the Trustee and the holders of the Notes and the Insurer, subject at all
times to the provisions of the Indenture, without regard to any relationship
which the Servicer or any Affiliate of the Servicer may otherwise have with a
Lessee. The Servicer shall at all times act in accordance with the provisions of
each Lease, and shall observe and comply with all requirements of law applicable
to it. Except as permitted by the terms of any Lease following a default
thereunder, the Servicer shall not take any action which would result in the
interference with the Lessee's right to quiet enjoyment of the Equipment subject
to the Lease during the term thereof. The Servicer shall exercise with respect
to each item of Equipment all rights and remedies it, the Issuer or the Trustee
shall have against any vendor of the Equipment, subject to the provisions of any
Lease, and shall promptly pay all amounts realized from such actions to the
Trustee for deposit in the Collection Account, in accordance with the terms of
the Indenture.

     (c)  Without limiting the generality of the foregoing, the Servicer agrees
to (i) invoice each Lessee monthly (except quarterly, semi-annually or annually
in the case of Leases which provide for quarterly, semi-annual or annual Lease
Payments, respectively) for all Lease Payments required to be paid by such
Lessee in such manner and to the same extent as the Servicer does with respect
to leases held for its own account, (ii) maintain with respect to each Lease and
each item of Equipment, and with respect to each payment by each Lessee and
compliance by each Lessee with the provisions of each Lease, complete and
accurate records in the same form and to the same extent as the Servicer does
with respect to leases and equipment held for its own account (which records
shall be at least as complete and accurate as those maintained by the Servicer
as of the date of this Assignment and Servicing Agreement), and (iii) from time
to time execute, deliver and file (or cause the same to be done), and the
Servicer is hereby authorized and empowered to execute, deliver, and file on
behalf of the Originator, the Seller, the Issuer and the Trustee, any and all
tax returns with respect to sales, use, personal property and other taxes (other
than corporate income tax returns) and any and all reports or licensing
applications required to be filed in any jurisdiction with respect to any Lease
or any item of Equipment and, except as provided in the last sentence of this
Section 4.01(c), any Financing Statements and assignments of Financing
Statements and continuation statements as may from time to time be necessary
because of Lease substitutions, equipment replacements in accordance with the
provisions of any Lease or otherwise so that the transfer of the Leases and
Equipment from the Originator to the Seller, the transfer of the Leases from the
Seller to the

                                      20
<PAGE>

Issuer, the security interest granted by the Seller to the Issuer in the
Equipment and the security interest granted by the Issuer pursuant to the
Indenture in favor of the Trustee in each of the Leases and the Issuer's
interest in the Equipment, at all times will be perfected by such filings with
the appropriate Uniform Commercial Code filing offices. The Originator, the
Seller, the Issuer and the Servicer agree to file Financing Statements on Form
UCC-1 to perfect the ownership interest of the Issuer and the security interest
of the Trustee in the Leases, the ownership interest of the Seller in the
Equipment, the security interest in favor of the Issuer in the Equipment and the
security interest of the Trustee in the Issuer's interest in the Equipment. The
parties acknowledge that the Originator has not filed, and it is not
contemplated that the Originator, the Servicer, the Seller, the Issuer or any
other party will file, Financing Statements in order to perfect or to continue
in effect any security interest in any item of Equipment securing the
obligations of the Lessee under the Lease relating to such Equipment.

     (d)  The Servicer will maintain, or cause to be maintained, with respect
to the Leases and the Equipment casualty and liability insurance in amounts at
least as great as those described in Section 2.04(f).  Each such casualty and
liability policy (i) if maintained by the Servicer, shall name the Issuer and
Trustee as loss payees or additional insureds and (ii) if maintained by the
Lessee, shall name the Servicer or the Trustee as loss payee and additional
insured; provided that the Servicer shall cause all such policies to name the
         --------
Trustee and the Issuer as loss payees and additional insureds if (A) the
Originator is no longer the Servicer, (B) an Event of Default shall have
occurred and be continuing or (C) a Servicer Event of Default shall have
occurred and be continuing.

     (e)  On or prior to the Issuance Date, the Servicer will file the Required
Financing Statements and thereafter will file such additional Financing
Statements and continuation statements and assignments with respect to the
Leases and the Equipment as may be necessary because of equipment replacements
in accordance with the provisions of any Lease, purchases of Additional Leases
in accordance with Section 11 and Lease substitutions pursuant to Section 11
hereof or otherwise so that (i) the ownership interest and security interest
contemplated by this Agreement in favor of the Issuer, and the security interest
contemplated by the Indenture in favor of the Trustee, in the Leases will be
perfected by such filings with the appropriate Uniform Commercial Code filing
offices and (ii) the ownership interest contemplated by this Agreement in favor
of the Seller, and the security interest contemplated by this Agreement in favor
of the Issuer and by the Indenture in favor of the Trustee, in the Equipment,
will be perfected by such filings with the appropriate Uniform Commercial Code
filing offices.

     (f)  The Servicer shall pay Excess Copy Charges and Maintenance Charges,
if any, owing to IKON Office Solutions, Inc. in a timely fashion.

          4.02 Lease Amendments and Modifications.
               ----------------------------------

          In performing its obligations hereunder, the Servicer may, acting in
the name of the Issuer and without the necessity of obtaining the prior consent
of the Issuer, [the Insurer] or the Trustee, enter into and grant modifications,
waivers and amendments to the terms of any Lease except for modifications,
waivers or amendments that (a) are inconsistent with the servicing standards set
forth in Section 4.01 above, (b) would reduce the amount or extend the

                                      21
<PAGE>

time for payment of any Lease Payment, Casualty Payment or Termination Payment
to be made under a Lease (other than to permit termination of a Lease which does
not otherwise provide for termination by requiring the payment, in lieu of all
future Lease Payments with respect to the Lease or Equipment subject thereto, an
amount which equals or exceeds the Lease Purchase Amount for such Lease as of
such date) or the Lessee's absolute and unconditional obligation to make payment
of the same, (c) would reduce or adversely affect the Lessee's obligation to
maintain, service, insure and care for the Equipment or would permit the
alteration of any item of Equipment in any way which could adversely affect its
present or future value or (d) otherwise could adversely affect the interests of
any of the Seller, the Issuer, the Trustee, the Insurer or the holders of the
Notes.

          In addition, following the transfer of any Lease to the Issuer in
accordance herewith, the Servicer may make adjustments to such Lease which
modify one or more terms of such Lease, such as payment amount or payment date.
Such administrative adjustments may result in a re-booking of such Lease and the
assignment of a new Lease number, but will not be considered to be a
substitution or prepayment of such Lease.  Except to the extent the Originator
substitutes a Substitute Lease therefor in accordance with Section 11 hereof,
the Servicer may permit such adjustments so long as the following conditions
precedent have been satisfied:

               (i)    after giving effect to such adjustment and any additions
and substitutions pursuant to Section 11, the final payment on such Lease must
be on or prior to June 2005;

               (ii)   after giving effect to such adjustments and any additions
and substitutions pursuant to Section 11 the aggregate amount of Lease Payments
through the term of the Leases (including the Substitute Leases and the
Additional Leases) will not be materially less than the aggregate scheduled
Lease Payments of the Leases prior to such adjustment, substitution or addition;

               (iii)  after giving effect to such adjustments, additions and
substitutions pursuant to Section 11, the Discounted Present Value of the
Performing Leases must not be less than the Discounted Present Value of the
Performing Leases prior to such adjustment, addition and substitution; and

               (iv)   after giving effect to such adjustments, additions, and
substitutions pursuant to Section 11, the weighted average remaining term of the
Performing Leases must not be greater than the weighted average remaining term
of the Performing Leases prior to such adjustment, addition, and substitution.

          4.03 Non-Performing Leases.
               ---------------------

          (a)  Upon receipt of notice from the Issuer, the Trustee or any other
Person, or if the Servicer otherwise learns that any Lease is a Non-Performing
Lease, the Servicer will take such action as is appropriate, consistent with the
Servicer's administration of leases in its own portfolio and consistent with the
customary practices of servicers in the office equipment leasing industry,
including such action as may be necessary to cause, or attempt to cause, the
Lessee thereunder to cure such non-performance (if the same may be cured) or to
terminate or attempt to

                                      22
<PAGE>

terminate such Lease and to recover, or attempt to recover, all damages
resulting from such default.

          (b)   The Servicer will use its best efforts to sell or lease any
Equipment that is subject to a Non-Performing Lease in a timely manner and upon
the most favorable terms and conditions available at the time.  In the event of
an Early Lease Termination, any Substitute Leases in respect thereof must have a
Discounted Present Value equal to or greater than that of the Early Termination
Lease, monthly payments at least equal to those of the Early Termination Lease
through the remaining term of such Early Termination Lease and a remaining term
less than or equal to that of the Early Termination Lease.

          (c)   In the event that the Servicer is required to sell or lease any
item of Equipment pursuant to the provisions of this Section 4.03 at a time when
the Servicer has other similar items of equipment available to it, the Servicer
will not favor any such other item in its remarketing efforts.

          (d)   All amounts realized by the Servicer in the performance of its
duties under this Section 4.03 with respect to any Lease remaining subject to
the Lien of the Indenture and related Equipment (net of the Servicer's actual
out-of-pocket expenses reasonably incurred in such realization), including
amounts received by the Servicer pursuant to the provisions of Section 5.05,
shall be held in trust by the Servicer, as agent for the Trustee and deposited
into the Collection Account for application in accordance with the provisions of
the Indenture; provided that, to the extent that (i) the Servicer has made any
               --------
advances pursuant to Section 5.01 hereof with respect to any Lease which
thereafter became a Non-Performing Lease, and (ii) the Servicer has not
otherwise been fully reimbursed for such advances or payments, the Servicer
shall reimburse itself for such advances or payments from any amounts recovered
with respect to such Non-Performing Lease before depositing any such amounts
pursuant to this Section 4.03(d).  Any amounts properly retained by the Servicer
pursuant to this Section are, without further action by the Trustee, released
from the Lien of the Indenture.

          4.04  Costs of Servicing; Servicing Fee; Administrative Expenses.
                ----------------------------------------------------------

          (a)   All costs of servicing each Lease in the manner required by this
Section 4 shall be borne by the Servicer, but the Servicer shall be entitled to
retain, out of any amounts actually recovered by the Servicer in the performance
of its obligations under Section 4.03 hereof with respect to any Lease or the
interests in the Equipment subject thereto, the Servicer's actual out-of-pocket
expenses reasonably incurred in the course of such performance with respect to
such Lease or the interests in the Equipment. (For all purposes of this Section
4 the Servicer's "out-of-pocket expenses" means only those expenses incurred to
third parties (e.g., reasonable fees of outside counsel in a collection suit)
and not salaries, operating costs, overtime wages and other such "overhead"
costs or expenses of the Servicer.) In addition, the Servicer shall be entitled
to receive on each Payment Date following the Issuance Date a servicing fee with
respect to the Notes (the "Servicing Fee").  Any amounts properly retained by
the Servicer pursuant to this Section are, without further action by the
Trustee, released from the Lien of the Indenture.

                                      23
<PAGE>

          (b)   The amount of the Servicing Fee which the Servicer shall be
entitled to receive on each Payment Date following the original issuance of the
Notes shall be determined by multiplying one-twelfth of 0.75% by the lesser of
(i) the Discounted Present Value of the Performing Leases or (ii) the
Outstanding Principal Amount of the Notes, in each case at the Determination
Date for such Payment Date before application of payments with respect thereto.

          (c)   The Servicer agrees to pay, out of the Servicing Fee, all
Trustee Fees and expenses of the Trustee in connection with the Notes (including
the expenses relating to the preparation and delivery of reports to Noteholders)
and all fees of accountants in connection with the Notes.

          4.05  Other Transactions.
                ------------------

          Nothing in this Assignment and Servicing Agreement shall preclude the
Originator or the Servicer from entering into other leases or other financial
transactions with any Lessee or selling or discounting any such lease with any
Person.

          SECTION 5. SERVICER ADVANCES AND ORIGINATOR'S AND SELLER'S SUPPORT

          5.01  Late Lease Payments.
                -------------------

          On each Determination Date, the Servicer may, but will not be required
to, advance and remit to the Trustee for deposit in the Collection Account, in
such manner as will ensure that the Trustee will have immediately available
funds on account thereof by 11:00 A.M. New York City time on the second Business
Day prior to the next succeeding Payment Date, an amount (a "Servicer Advance")
equal to any Lease Payment due during the prior Due Period but unpaid prior to
such Determination Date with respect to any Lease.  In consideration of each
Servicer Advance the Servicer will be entitled to retain any late payment fees
recovered from the Lessee with respect to any Lease Payment covered by a
Servicer Advance.  In addition, the Servicer will be reimbursed for Servicer
Advances from Available Funds in the Collection Account in accordance with the
Indenture on the following Payment Date.  Any amounts properly retained by the
Servicer pursuant to this Section are, without further action by the Trustee,
released from the Lien of the Indenture.

          5.02  Early Termination Leases.
                ------------------------

          Following the Determination Date as of which any Lease first becomes
an Early Termination Lease the Originator may, but shall have no obligation to,
either (a) substitute one or more Eligible Leases and the Equipment subject
thereto for such Lease and the Equipment subject thereto pursuant to Section 11
hereof (if the Originator is then entitled to substitute Leases and Equipment in
accordance with the provisions of Section 11.01 hereof) on or before the second
Business Day prior to the next succeeding Payment Date, (b) purchase from the
Issuer such Lease and the Issuer's interest in the related Equipment by
remitting to the Trustee an amount equal to the Lease Purchase Amount in such
manner as will ensure that the Trustee will have immediately available funds
therefor by 11:00 A.M. New York City time on the second Business Day prior to
the next succeeding Payment Date or (c) transfer to the Issuer one or more
Additional Leases in consideration of the proceeds thereof in accordance with
Section 11 hereof.

                                      24
<PAGE>

Unless the Originator takes one of the actions set forth in the prior sentence,
the Servicer will not permit a voluntary termination of a Lease prior to its
stated maturity unless it receives a payment in connection with such termination
equal to at least the Lease Purchase Amount. Any Early Termination Lease and the
Issurer's interest in the Equipment subject thereto which is purchased, or for
which Additional Leases have been acquired or Substitute Leases transferred,
pursuant to this Section 5.02 shall nevertheless remain subject to the Lien of
the Indenture until such time as an Additional Lease or Additional Leases have
been acquired or Substitute Lease or Substitute Leases have been transferred in
accordance with the provisions of Section 11 hereof or the Lease Purchase Amount
has been paid.

          5.03  Indemnification.
                ---------------

          Subject to the provisions of Section 7.02, the Originator, in its
capacity as Servicer, agrees to indemnify and hold harmless the Issuer, the
Trustee (its officers, directors, employees and agents) and each holder of the
Notes (each an "Indemnified Party") against any and all liabilities, losses,
damages, penalties, costs and expenses (including costs of defense and legal
fees and expenses) which may be incurred or suffered by such Indemnified Party
(except to the extent arising out of the gross negligence or willful misconduct
on the part of the Indemnified Party) as a result of claims, actions, suits or
judgments asserted or imposed against it and arising out of the transactions
contemplated hereby or by the Indenture, including, without limitation, any
claims resulting from any use, operation, maintenance, repair, storage or
transportation of any item of Equipment, whether or not in the Servicer's
possession or under its control pursuant to this Assignment and Servicing
Agreement, and any tort claims and any fines or penalties arising from any
violation of the laws or regulations of the United States or any state or local
government or governmental authority; provided that the foregoing indemnity
                                      --------
shall in no way be deemed to impose on the Originator any obligation, other than
to the extent specifically set forth in this Agreement or the Indenture, to make
any payment with respect to any Lease or Equipment or principal or interest on
the Notes[, to pay or reimburse the Insurer in respect of any amount paid by the
Insurer on or in respect of the Notes or to reimburse the Issuer for any
payments on account of the Notes].  This Section 5.03 shall bind any successor
Servicer hereunder.  Nothing in this indemnification shall be construed as a
guaranty of any Lease or any Equipment by the Originator.  The obligations of
the Servicer hereunder shall survive the satisfaction and discharge of the
Indenture or the earlier resignation or removal of the Trustee thereunder.

          5.04  Purchases; Other Payments.
                -------------------------

          (a)   In the event that (i) any of the representations or warranties
made by the Originator in Sections 2.04, 2.05(b) and 2.08 hereof with respect to
any of the Leases or the Equipment subject thereto proves at any time to have
been inaccurate in any material respect as of the Issuance Date or related
transfer date, as the case may be, or (ii) any Lease shall be terminated in
whole or in part by a Lessee, or any amounts due with respect to any Lease shall
be reduced or impaired, as a result of (x) any action or inaction by the
Originator (other than any such action or inaction of the Originator, when
acting as Servicer, in connection with the enforcement of any Lease in a manner
consistent with the provisions of this Assignment and Servicing Agreement) or
(y) any claim by any Lessee against the Originator and, in any such case, the
event or condition causing such inaccuracy, termination, reduction, impairment
or claim

                                      25
<PAGE>

shall not have been cured or corrected within 30 days after the earlier of the
date on which the Originator is given notice thereof by the Issuer or the
Trustee or the date on which the Originator otherwise first has notice thereof,
the Originator will purchase such Lease and related Equipment interests by
paying to the Servicer for deposit into the Collection Account, not later than
the second Business Day after the Determination Date next following the
expiration of such 30-day period with respect to the events referenced in
Section 5.04(a)(i) and (ii), an amount equal to the Lease Purchase Amount, and
simultaneously with such purchase, the Originator shall reimburse the Servicer
for all amounts, if any, theretofore advanced by the Servicer pursuant to
Section 5.01 with respect to such Lease. Without limiting the generality of the
foregoing, it is agreed and understood that for purposes of this Section 5.04,
any inaccuracy in any representation or warranty with respect to (i) the
priority of the Lien of the Indenture with respect to any Lease or (ii) the
amount (if less than represented) of the Lease Payments, Casualty Payments or
Termination Payments under any Lease shall be deemed to be material.

          (b)   By the Issuance Date, the Originator and the Seller agree to
obtain and provide to the Trustee UCC searches against each of them from the
appropriate filing offices in Georgia confirming the absence of any UCC filings
(other than those in the process of being released pursuant to releases
delivered on the Issuance Date) against either of them with respect to the
Leases (including the right to receive all payments due or to become due
thereunder) and the Equipment, other than those naming the Seller or the Issuer
as the owner of the Leases or the Trustee as secured party. In the event the
Originator and Seller fail to provide any such searches required by the
preceding sentence of this Section 5.04(b) within the required time period or
any search reveals the existence of any conflicting Liens (which are not removed
within 30 days of receipt of such search), the Originator shall be required to
purchase not later than the third Business Day after the Determination Date
following the expiration of the time period during which such search was to be
obtained or such Lien released, as the case may be, any Lease as to which such
searches are not provided or with respect to which conflicting Liens with
respect thereto or any related Equipment are found to exist at the Lease
Purchase Amount for such Lease.

          (c)   The Originator's obligations under this Section 5.04 are the
full recourse obligations of the Originator and shall in no way be limited or
discharged by the application of any funds constituting part of the Asset Pool.

          (d)   In connection with any purchase of Leases and Equipment
interests pursuant to this Section 5.04, the Originator may reacquire from the
Seller the ownership interest of the Seller in such Equipment.

          5.05  Seller's Obligation in Respect of Non-Performing Leases.
                -------------------------------------------------------

          In the event that any Lease shall become a Non-Performing Lease, and
the Originator shall not have substituted one or more Substitute Leases therefor
in accordance with the provisions of Section 11, the Seller shall pay to the
Issuer in the manner provided in the next sentence an amount equal to the lesser
of (i) the amount of all recoveries by the Seller in respect of the sale, re-
lease or other disposition of any item of Equipment subject to such Non-
Performing Lease and (ii) the Discounted Present Value of such Non-Performing
Lease (the "Recourse Amount").  The amount of any such recoveries, up to the
Recourse Amount, shall be

                                      26
<PAGE>

deposited into the Collection Account within two Business Days of the receipt
thereof by the Seller or the Servicer. The Seller's obligations under this
Section 5.05 are secured by a security interest from the Seller to the Issuer in
all right, title and interest of the Seller in and to the Equipment subject to
the Leases (whether or not constituting Non-Performing Leases).

          5.06  Payment Advices.
                ---------------

          Each payment to the Servicer pursuant to any of the provisions of this
Assignment and Servicing Agreement shall be accompanied by written advice
containing sufficient information to identify the Lease and/or Equipment to
which such payment relates, the Section of this Assignment and Servicing
Agreement pursuant to which such payment is made, and the proper application
pursuant to the provisions of this Assignment and Servicing Agreement or the
Indenture of the amounts being paid.

          SECTION 6. INFORMATION TO BE PROVIDED

          6.01  Monthly Status Reports; Servicing Reports.
                -----------------------------------------

          (a)   Within five Business Days following each Payment Date, the
Servicer will send to the Issuer, the Trustee [and the Insurer] a written
report, signed by one of the Servicer's financial officers, (i) identifying each
Lease with respect to which any Lease Payment was 90 or more days overdue as of
the end of the immediately preceding Due Period, the Discounted Present Value of
such Lease as of such Payment Date, the amount advanced by the Servicer with
respect to such Lease pursuant to Section 5.01 hereof since the Servicer's
previous monthly report (or, in the case of the first such report, since the
Cut-Off Date), (ii) identifying each Lease with respect to which any Lease
Payment was 60 or more days overdue as of the end of the immediately preceding
Due Period, the Discounted Present Value of such Lease as of such Payment Date,
and the amount advanced by the Servicer with respect to such Lease pursuant to
Section 5.01 hereof since the Servicer's previous monthly report (or, in the
case of the first such report, since the Issuance Date), (iii) identifying each
Lease which became a Non-Performing Lease as of the preceding Determination Date
and specifying the Discounted Present Value of such Lease as of such
Determination Date (or, in the case of the first such report, subsequent to the
Cut-Off Date) and the aggregate Discounted Present Value of all such Non-
Performing Leases, and (iv) indicating the aggregate amount recovered by the
Servicer subsequent to the preceding Payment Date (or, in the case of the first
Payment Date, subsequent to the Cut-Off Date) and on or prior to such Payment
Date with respect to Lease Delinquency Payments and Lease Payments in respect of
Non-Performing Leases previously made by the Servicer (and the specific amounts
so recovered with respect to any Non-Performing Lease) as of the related
Determination Date. Each such report shall also describe generally what action
or actions the Servicer is then taking or proposes to take to recover from the
appropriate Lessees any amounts previously paid by the Servicer to the Trustee
pursuant to Section 5.01 hereof.

          (b)   On the Determination Date, the Servicer shall deliver to the
Trustee, each Rating Agency and the Insurer a servicing report signed by an
Authorized Officer of the Servicer (the "Servicing Report") duly completed and
dated, in substantially the form of Exhibit B hereto.

                                      27
<PAGE>

          (c)   The Servicing Report shall include, among other items, the total
amount of all Lease Payments, Casualty Payments, Retainable Deposits,
Termination Payments, Lease Purchase Amounts, recoveries related to Non-
Performing Leases and other payments received by the Servicer and deposited in
the Collection Account prior to the related Determination Date and on or
subsequent to the Determination Date preceding such Determination Date (or, in
the case of the first Determination Date, on or subsequent to the Cut-Off Date).
Such report shall indicate the amount of all Lease Payments received by the
Servicer and deposited in the Collection Account which are for any Due Period
other than the Due Period for such Determination Date and shall identify each
Lease with respect to which a Casualty Payment, Retainable Deposit, Termination
Payment or Lease Purchase Amount was made during such time period.  Such report
shall also indicate (i) the aggregate amount paid by the Servicer on or
subsequent to the most recent Determination Date pursuant to Section 5.01
hereof, and (ii) the aggregate amount reimbursed to the Servicer prior to the
most recent Determination Date and on or subsequent to the Determination Date
preceding such Determination Date (or, in the case of the first Determination
Date, on or subsequent to the Cut-Off Date) for any Servicer Advances made by
the Servicer pursuant to Section 5.01 hereof.  Such report shall also include
the amount of the distribution with respect to each class of Notes to be made on
the related Payment Date, the amount of such distribution allocable to
principal, the amount of such distribution allocable to interest, the Asset Pool
balance as of the close of business on the last day of the related Due Period,
the aggregate outstanding principal balance and the Pool Factor for each class
of Notes after giving effect to all distributions allocable to principal on such
Payment Date, the amounts paid to or retained by the Servicer, if any, with
respect to the related Due Period, and the amount of the aggregate Purchase
Amounts in respect of Leases that have been reacquired, if any, for such Due
Period.  The Servicer hereby represents and warrants that such calculations will
be correct and accurate, and the Servicer shall be fully responsible for, and
shall reimburse and indemnify each Indemnified Party for, any loss resulting
from such Indemnified Party's reliance on any such calculations which are not
correct.

          (d)   The Servicer shall deliver to the Issuer and the Trustee, with a
copy to each Rating Agency [and the Insurer], within 135 days following the end
of each fiscal year of the Servicer, beginning with the Servicer's fiscal year
ending September 30, 200__, an Officers' Certificate stating that the Servicer
has fulfilled its obligations under the Assignment and Servicing Agreement in
all material respects throughout the preceding twelve (12) months (or, in the
case of the first such certificate, the period from the Issuance Date) or if
there has been any material default under the Assignment and Servicing Agreement
or the Indenture, describing such default.

          (e)   The Servicer shall deliver to the Issuer and the Trustee, with a
copy to each Rating Agency [and the Insurer], within 120 days following the end
of each fiscal year of the Servicer, beginning with the Servicer's fiscal year
ending September 30, 200__, a report (the "Supplementary Report") signed by an
Authorized Officer on behalf of the Servicer and dated as of the last day of
such fiscal year, stating that (a) a review of the activities of the Servicer
and the Servicer's performance under the Assignment and Servicing Agreement and
the Indenture for the previous 12-month period (or, in the case of the first
such report, the period from the Issuance Date) has been made under such
officer's supervision and (b) nothing has come to such officer's attention to
indicate that a Servicer Event of

                                      28
<PAGE>

Default has occurred, or, if any Servicer Event of Default has occurred and is
continuing, specifying each such event known to the officer, the nature and
status thereof and the steps necessary to remedy such event.

          (f)   If any funds are to be withdrawn from the Collection Account
other than as provided in Section 3.03(b) of the Indenture, the Servicer shall
submit with the related Servicing Report the certificate required by Section
3.03(d) of the Indenture.

          (g)   Within the prescribed period of time for tax reporting purposes
after the end of each calendar year, the Servicer on behalf of the Issuer, will
provide to the Noteholders a statement containing the distribution amount with
respect to each class of Notes and the distribution amount allocable to interest
for that calendar year and any other information required by applicable tax
laws, for the purpose of the Noteholders' preparation of federal income tax
returns.

          (h)   The Servicer shall deliver to the Trustee and the Insurer and
each of the Rating Agencies, within three days after obtaining knowledge of the
occurrence thereof, written notice of any event which with the giving of notice
or the lapse of time would become an Event of Default under any of clauses (c),
(d), (e) or (f) of Section 7.01 of the Indenture, its status and what action the
Issuer or the Servicer is taking or proposes to take with respect thereto.

          6.02  Annual Independent Public Accountant's Report.
                ---------------------------------------------

          The Servicer shall cause a firm of independent public accountants (who
may also render other services to the Servicer, the Seller or the Originator) to
deliver to the Trustee, with a copy [to the Insurer] and each Rating Agency,
within 135 days following the end of each fiscal year of the Servicer, beginning
with the Servicer's fiscal year ending September 30, 2002, a written statement
to the effect that such firm has (a) obtained from the Servicer a copy of the
monthly status report pursuant to Section 6.01 for each of three months during
the previous calendar year, such three months to be selected at random by such
firm of independent public accountants; (b) compared the information contained
in such monthly status report and in the monthly summaries prepared by the
Servicer in support of such monthly status report to the computer printouts and
accounts prepared by the Servicer and supporting such reports; and (c) selected,
at random, 100 Leases included in the Asset Pool and compared the activity in
the files maintained by the Servicer for such Leases to the activity as reported
for those Leases to the monthly summaries prepared by the Servicer and
supporting the monthly status report, and that, on the basis of such examination
and comparison, such firm is of the opinion that the Servicer has prepared such
monthly status report and summaries in agreement with the computer printouts,
accounts and individual Lease files, except in each case for (x) such exceptions
as such firm shall believe to be immaterial and (y) such other exceptions as
shall be set forth in such statement.  In the event such firm of independent
public accountants requires the Trustee to agree to the procedures performed by
such firm, the Servicer shall direct the Trustee in writing to so agree; it
being understood and agreed that the Trustee shall deliver such letter of
agreement in conclusive reliance upon the direction of the Servicer, and the
Trustee makes no independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures.

                                      29
<PAGE>

          SECTION 7. THE SERVICER

          7.01  Merger or Consolidation of the Servicer.
                ---------------------------------------

          So long as the Notes remain outstanding, the Servicer will keep in
full force and effect its existence, rights and franchise as a corporation under
the laws of its jurisdiction of incorporation and will preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is necessary to protect the validity and enforceability
of any of the Leases or to permit performance of the Servicer's duties under
this Assignment and Servicing Agreement.

          So long as the Notes remain outstanding, the Servicer shall not merge
or consolidate with any other Person unless (i) the entity surviving such merger
or consolidation is a corporation organized under the laws of the United States
or any jurisdiction thereof and (ii) the surviving entity, if not the Servicer,
shall execute and deliver to the Issuer, the Servicer and the Trustee, in form
and substance satisfactory to each of them, (a) an instrument expressly assuming
all of the obligations of the Servicer hereunder and (b) an opinion of counsel
to the effect that (i) such Person is a corporation of the type described in the
preceding clause (i); (ii) such Person has effectively assumed the obligations
of the Servicer hereunder and (iii) all conditions precedent to such action have
been satisfied.  Upon the occurrence of any such merger or consolidation, the
Servicer shall give notice promptly to the Rating Agencies.

          7.02  Limitation on Liability of the Servicer and Others.
                --------------------------------------------------

          Neither the Servicer nor any of the directors, officers, employees or
agents of the Servicer shall incur any liability to the Issuer, the Trustee,
[the Insurer] or the holders of the Notes for any action taken or not taken in
good faith pursuant to the terms of this Assignment and Servicing Agreement with
respect to any Lease (including any Non-Performing Lease) or the Equipment
subject thereto; provided, however, that this provision shall not protect the
                 --------  -------
Servicer or any such person against any breach of warranties, representations or
covenants made by it herein or in any certificate delivered in conjunction with
the purchase of the Notes or for any liability which would otherwise be imposed
for any action or inaction resulting from willful misconduct or bad faith or for
negligence in the performance or nonperformance of its duties hereunder.

          7.03  Servicer Not to Resign or Be Removed.
                ------------------------------------

          The Servicer shall not resign from the servicing obligations and
duties hereby imposed on it except upon determination that such duties hereunder
are no longer permissible under applicable law.  Any such determination
permitting the resignation of the Servicer shall be evidenced by an opinion of
independent counsel to the Servicer, in form and substance satisfactory to [the
Insurer (so long as the Policy is outstanding) or] the Trustee [(if the Policy
is not outstanding)], to such effect delivered to the Trustee [and the Insurer]
with a copy to each Rating Agency.

          Except as provided in Section 10.02 hereof, the Servicer shall not be
removed or be replaced as Servicer with respect to any Lease or any of the
Equipment.

                                      30
<PAGE>

          No resignation or removal of the Servicer shall in any event (i)
become effective until the Trustee or a successor servicer shall have assumed
the Servicer's servicing responsibilities and obligations in accordance with
Section 10.02 hereof, or (ii) affect the Originator's obligations pursuant to
Section 5 hereof.

          7.04  Financial and Business Information.
                ----------------------------------

          The Servicer will deliver to the Issuer and the Trustee, and the
Trustee upon receipt thereof shall deliver to [the Insurer and] each Rating
Agency and upon request, to any holder of outstanding Notes evidencing not less
than 25% of the Outstanding Principal Amount of the Notes (and, upon the request
of any holder of Outstanding Notes evidencing not less than 25% of the
Outstanding Principal Amount of the Notes, to any prospective transferee of any
Notes):

          (a)   Quarterly Statements - within 45 days after the end of each of
                --------------------
the first three quarterly fiscal periods in each fiscal year of the Servicer, a
copy of:

          (1)   a consolidated balance sheet of the Servicer (or its parent) and
     its consolidated subsidiaries at the end of such quarter, and

          (2)   consolidated statements of income, retained earnings and cash
     flow of the Servicer (or its parent) and its consolidated subsidiaries for
     that quarter and for the portion of the fiscal year ending with such
     quarter,

accompanied by a certificate signed by a principal financial officer of the
Servicer stating that such financial statements present fairly the financial
condition of the Servicer and its consolidated subsidiaries and have been
prepared in accordance with generally accepted accounting principles
consistently applied;

          (b)   Annual Statements - within 135 days after the end of each fiscal
                -----------------
year of the Servicer, a copy of:

          (1)   a consolidated balance sheet of the Servicer (or its parent) and
     its consolidated subsidiaries, at the end of that year, and

          (2)   consolidated statements of income, retained earnings and cash
     flow of the Servicer (or its parent) and its consolidated subsidiaries for
     that year, setting forth in each case in comparative form the figures for
     the previous fiscal year,

all in reasonable detail and accompanied by an opinion of a firm of independent
certified public accountants of recognized national standing stating that such
financial statements present fairly the financial condition of the Servicer and
its consolidated subsidiaries and have been prepared in accordance with
generally accepted accounting principles consistently applied (except for
changes in application in which such accountants concur and footnote), and that
the examination of such accountants in connection with such financial statements
has been made in accordance with generally accepted auditing standards, and
accordingly included such tests of the accounting records and such other
auditing procedures as were considered necessary in the circumstances;

                                      31
<PAGE>

          (c)   Notice of Servicer Event of Default - immediately upon the
                -----------------------------------
Servicer's becoming aware of the existence of any condition or event which
constitutes a Servicer Event of Default, a written notice, by certified mail
return receipt requested, hand delivery or overnight courier, describing its
nature and period of existence and what action the Servicer is taking or
proposes to take with respect thereto;

          (d)   SEC and Other Reports - promptly upon their becoming available,
                ---------------------
one copy of each report (including the Servicer's annual report to shareholders
and reports on Form 8-K, 10-K, and 10-Q), proxy statement, registration
statement, prospectus and notice filed with or delivered to any securities
exchange, the Securities and Exchange Commission or any successor agencies; and

          (e)   Report on Proceedings - promptly upon the Servicer becoming
                ---------------------
aware of

          (1)   any proposed or pending investigation of it by any governmental
     authority or agency, or

          (2)   any court or administrative proceeding

which involves or may involve the possibility of materially and adversely
affecting the properties, business, prospects, profits or conditions (financial
or otherwise) of the Servicer, a written notice specifying the nature of such
investigation or proceeding and what action the Servicer is taking or proposes
to take with respect thereto and evaluating its merits.

          7.05  Officers' Certificates.
                ----------------------

          With each set of financial statements delivered pursuant to Section
7.04, the Servicer will deliver an Officers' Certificate stating (i) that the
officers signing such Officers' Certificate have reviewed the relevant terms of
this Assignment and Servicing Agreement and have made, or caused to be made
under such officers' supervision, a review of the activities of the Servicer
during the period covered by the statements then being furnished, (ii) that the
review has not disclosed the existence of any Servicer Event of Default or, if a
Servicer Event of Default exists, describing its nature and what action the
Servicer has taken and is taking with respect thereto, and (iii) that on the
basis of such review the officers signing such certificate are of the opinion
that during such period the Servicer has serviced the Leases in compliance with
the procedures hereof except as described in such certificate.

          7.06  Inspection.
                ----------

          The Servicer will permit, on reasonable prior notice, the
representatives of the Issuer, the Trustee, [the Insurer (so long as the Policy
is outstanding)] and[, if the Policy is no longer outstanding,] the holder of
any Notes evidencing not less than 25% of the Outstanding Principal Amount of
the Notes to inspect the servicing operations and discuss the servicing
operations of the Servicer with any of its officers or employees all at such
reasonable times and as often as may be reasonably requested for the purpose of
reviewing the Servicer or the Servicer's performance of its duties and
obligations hereunder.  Any expense incident to the exercise by the Issuer, the
Trustee[, the Insurer,] or any holder of the Notes during the continuance of any
Servicer Event of Default, or any event or condition which with the giving of

                                      32
<PAGE>

notice or the lapse of time or both would become a Servicer Event of Default, of
any right under this Section 7.06 shall be borne by the Servicer.

          7.07  Servicer Records.
                ----------------

          The Servicer will indicate in its records that it is servicing and
administering each Lease in its capacity as Servicer hereunder, and to the
extent it is in possession of any original Lease agreement, will hold such
Lease, subject to the provisions of the Indenture as custodian for the Trustee.

          SECTION 8. THE ORIGINATOR

          8.01  Merger or Consolidation of the Originator.
                -----------------------------------------

          So long as the Notes remain outstanding, the Originator will keep in
full force and effect its existence, rights and franchise as a corporation under
the laws of its jurisdiction of incorporation and will preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is necessary to protect the validity and enforceability
of any of the Leases or to permit performance of the Originator's duties under
this Assignment and Servicing Agreement.

          So long as the Notes remain outstanding, the Originator shall not
merge or consolidate with any other Person unless (i) the entity surviving such
merger or consolidation is a corporation organized under the laws of the United
States or any jurisdiction thereof and (ii) the surviving entity, if not the
Originator, shall execute and deliver to the Seller, the Issuer, the Servicer,
the Trustee [and the Insurer (so long as the Policy is outstanding)], in form
and substance satisfactory to each of them, (a) an instrument expressly assuming
all of the obligations of the Originator hereunder and (b) an Opinion of Counsel
to the effect that such Person is a corporation of the type described in the
preceding clause (i) and has effectively assumed the obligations of the
Originator hereunder.

          8.02  Control of Seller.
                -----------------

          So long as the Notes remain outstanding, the Originator will not (i)
sell, pledge or otherwise transfer any membership interest in the Seller held by
the Originator or any capital stock of IKON Receivables Funding, Inc. (the
manager of the Seller and the Issuer) held by the Originator or (ii) vote such
membership interests in the Seller in favor of any amendment to or alteration of
the certificate of formation or limited liability company agreement of the
Seller or any such capital stock of IKON Receivables Funding, Inc. in favor of
any amendment to or alteration of the certificate of incorporation or by-laws of
the Manager.

          8.03  Financial and Business Information.
                ----------------------------------

          The Originator will deliver to the Issuer, the Trustee [and the
Insurer (so long as the Policy is outstanding)]:

          (a)   Notice of Servicer Event of Default - immediately upon the
                -----------------------------------
Originator becoming aware of the existence of any condition or event which
constitutes a Servicer Event of

                                      33
<PAGE>

Default, a written notice (with a copy to each Rating Agency) describing its
nature and period of existence and what action the Originator is taking or
proposes to take with respect thereto;

          (b)   SEC and Other Reports - promptly upon their becoming available,
                ---------------------
one copy of each report (including the Originator's annual report to
shareholders and reports on Form 8-K, 10-K, and 10-Q), proxy statement,
registration statement, prospectus, prospectus supplement and notice filed with
or delivered to any securities exchange, the Securities and Exchange Commission
or any successor agencies;

          (c)   Report on Proceedings - promptly upon the Originator becoming
                ---------------------
aware of

          (1)   any proposed or pending investigation of it by any governmental
     authority or agency, or

          (2)   any court or administrative proceeding,

which involves or may involve the possibility of materially and adversely
affecting the properties, business, prospects, profits or condition (financial
or otherwise) of the Originator, a written notice specifying the nature of such
investigation or proceeding and what action the Originator is taking or proposes
to take with respect thereto and evaluating its merits;

          (d)   ERISA - (i) promptly and in any event within ten days after the
                -----
Originator knows or has reason to know of the occurrence of a Reportable Event
with respect to a Pension Plan with regard to which notice must be provided to
the PBGC, a copy of such materials required to be filed with the PBGC with
respect to such Reportable Event and in each such case a statement of the chief
financial officer of the Originator setting forth details as to such Reportable
Event and the action which the Originator proposes to take with respect thereto;
(ii) at least ten days prior to the filing by any plan administrator of a
Pension Plan of a notice of intent to terminate such Pension Plan, a copy of
such notice; (iii) upon request of the Issuer and the Trustee, and in no event
more than ten days after such request, copies of each annual report which is
filed on Form 5500, together with certified financial statements for the Pension
Plan (if any) as of the end of such year and actuarial statements on Schedule B
to such Form 5500; (iv) promptly and in any event within ten days after it knows
or has reason to know of any event or condition which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan, a statement of the chief financial
officer of the Originator describing such event or condition; (v) promptly and
in no event more than ten days after receipt thereof by the Originator or any
Related Person, each notice received by the Originator or any Related Person
concerning the imposition of any withdrawal liability under Section 4202 of
ERISA; and (vi) promptly after receipt thereof a copy of any notice the
Originator or any Related Person may receive from the PBGC or the Internal
Revenue Service with respect to any Pension Plan; provided, however, that this
                                                  --------  -------
subsection (vi) shall not apply to notices of general application promulgated by
the PBGC or the Internal Revenue Service or notices which would not require any
material payment by the Originator or any Related Person; and

          (e)   Requested Information - with reasonable promptness, any other
                ---------------------
data and information which may be reasonably requested by such parties from time
to time.

                                      34
<PAGE>

          Compliance by the Servicer with the requirements of Sections 7.04(c),
7.04(d) or 7.04(e) shall be deemed to be compliance by the Originator with the
corresponding requirements of Section 8.03(a), 8.03(b) or 8.03(c), as the case
may be, and vice versa, so long as IOS Capital is the Servicer hereunder.
            ---- -----

          8.04 Officers' Certificates.
               ----------------------

          With each set of financial statements delivered pursuant to Section
8.03, the Originator will deliver an Officers' Certificate stating that the
officers signing such Certificate have reviewed the relevant terms of this
Assignment and Servicing Agreement and have made, or caused to be made under
such officers' supervision, a review of the activities of the Originator during
the period covered by the income statements then being furnished and, so long as
the Originator is Servicer hereunder, that the review has not disclosed the
existence of any Servicer Event of Default or, if a Servicer Event of Default
exists, describing its nature and what action the Originator has taken and is
taking with respect thereto.

          8.05 Books and Records.
               -----------------

          The Originator will clearly mark its books and records to reflect the
contributions of Leases and Equipment pursuant to this Agreement.

          8.06 Communications.
               --------------

          The Originator will reply to all inquiries by third parties with
respect to the transactions contemplated by this Agreement by indicating that it
has transferred the Leases and its right, title and interest in the related
Equipment and that the Issuer now holds title to the Leases and such interests
(other than ownership interests) in the Equipment.

          SECTION 9. THE SELLER

          9.01 Merger or Consolidation of the Seller.
               -------------------------------------

          So long as the Notes remain outstanding, the Seller will keep in full
force and effect its existence, rights and franchise as a limited liability
company under the laws of its jurisdiction of organization and will preserve its
qualification to do business as a foreign limited liability company in each
jurisdiction in which such qualification is necessary to protect the validity
and enforceability of any of the Leases or to permit performance of the Seller's
duties under this Assignment and Servicing Agreement.

          So long as the Notes remain outstanding, the Seller shall not merge or
consolidate with any other Person.

          9.02 Control of Issuer.
               -----------------

          So long as any of the Notes remain outstanding, the Seller will not
(i) sell, pledge or otherwise transfer any of its membership interests in the
Issuer or (ii) vote such beneficial interests in favor of any amendment to or
alteration of the certificate of formation or limited liability company
agreement of the Issuer.

                                      35
<PAGE>

          9.03 Information.
               -----------

          The Seller will deliver to the Issuer, the Trustee [and the Insurer
(so long as the Policy is outstanding)]:

          (a)  Notice of Servicer Event of Default - immediately upon becoming
               -----------------------------------
aware of the existence of any condition or event which constitutes a Servicer
Event of Default, a written notice (with a copy to each Rating Agency)
describing its nature and period of existence and what action the Seller is
taking or proposes to take with respect thereto;

          (b)  Report on Proceedings - promptly upon the Seller's becoming aware
               ---------------------
of

          (1)  any proposed or pending investigation of it by any governmental
     authority or agency, or

          (2)  any court or administrative proceeding,

which involves or may involve the possibility of materially and adversely
affecting the properties, business, prospects, profits or condition (financial
or otherwise) of the Seller, a written notice specifying the nature of such
investigation or proceeding and what action the Seller is taking or proposes to
take with respect thereto and evaluating its merits;

          (c)  Requested Information - with reasonable promptness, any other
               ---------------------
data and information which may be reasonably requested by such parties from time
to time.

          9.04 Inspection.
               ----------

          The Seller will permit, on reasonable prior notice, the
representatives of the Issuer, the Servicer, the Trustee, [the Insurer (so long
as no Insurer Default has occurred and is continuing),] or[, if an Insurer
Default has occurred and is continuing,] any holder of the Notes evidencing not
less than 25% of the Outstanding Principal Amount of any class of Notes to
examine and discuss the operations of the Seller with any of its officers or
employees all at such reasonable times and as often as may be reasonably
requested for the purpose of reviewing Seller's performance of its duties and
obligations hereunder.  Any expense incident to the exercise by the Issuer, the
Trustee or any holder of the Notes during the continuance of any default by the
Seller in any of its obligations hereunder of any right under this Section 9.04
shall be borne by the Seller.

          9.05 Books and Records.
               -----------------

          The Seller will clearly mark its books and records to reflect each
contribution of a Lease and of its right, title, and interest (other than its
ownership interest) in the Equipment subject thereto to the Issuer.

          9.06 Communications.
               --------------

          The Seller will reply to all inquiries by third parties with respect
to the transactions contemplated by this Agreement by indicating that it has
contributed to the Issuer

                                      36
<PAGE>

the Leases and its right, title and interest (other than its ownership interest)
in the related Equipment.

          SECTION 10.  DEFAULT

          10.01  Servicer Events of Default.
                 ---------------------------

          The following events and conditions shall constitute Servicer Events
of Default hereunder:

                 (i)    failure on the part of the Servicer to deposit to the
          Collection Account, or other applicable account in accordance with the
          terms of the Indenture within three Business Days following the
          receipt thereof any monies received by the Servicer (including,
          without limitation, any Lease Payments on Performing Leases or Non-
          Performing Leases) and required to be deposited thereunder and
          hereunder;

                 (ii)   failure on the part of the Servicer to pay to the
          Trustee on the date when due in accordance with the terms hereof, any
          payment required to be made by the Servicer pursuant to Section 5
          hereof;

                 (iii)  failure on the part of either the Servicer or (so long
          as the Originator is the Servicer) the Originator to observe or
          perform in any material respect any other of their respective
          covenants or agreements in this Assignment and Servicing Agreement
          which failure continues unremedied for a period of 30 days after the
          earlier of (A) the date it first becomes known to any officer of the
          Originator or the Servicer, as the case may be, and (B) the date on
          which written notice thereof requiring the same to be remedied shall
          have been given to the Originator or the Servicer, as the case may be,
          by the Trustee, or to the Originator or the Servicer, as the case may
          be, and the Trustee by the Seller, the Issuer, [the Insurer] or any
          holder of the Notes;

                 (iv)   if any representation or warranty made by the Originator
          in this Assignment and Servicing Agreement or in any certificate or
          other writing delivered pursuant hereto or made by any successor
          Servicer in connection with such successor Servicer's assumption of
          the duties of the Servicer shall prove to be incorrect in any material
          respect as of the time when the same shall have been made; provided,
                                                                     --------
          however, that the breach of any representation or warranty made by the
          -------
          Originator or Servicer in this Assignment and Servicing Agreement will
          be deemed to be "material" only if it affects the Noteholders, the
          Insurer or the enforceability of the Indenture or of the Notes; and
          provided, further, that a material breach of any representation or
          --------  -------
          warranty made by the Originator in this Assignment and Servicing
          Agreement with respect to any of the Leases or the Equipment subject
          thereto will not constitute a Servicer Event of Default if the
          Originator purchases such Lease and the Issuer's interest in the
          Equipment in accordance with this Assignment and Servicing Agreement;

                                      37
<PAGE>

               (v)    the entry by a court having jurisdiction in the premises
          of (A) a decree or order for relief in respect of the Servicer in an
          involuntary case or proceeding under any applicable federal or state
          bankruptcy, insolvency, reorganization, or other similar law or (B) a
          decree or order adjudging the Servicer bankrupt or insolvent, or
          approving as properly filed a petition seeking reorganization,
          arrangement, adjustment, or composition of or in respect of the
          Servicer under any applicable federal or state law, or appointing a
          custodian, receiver, liquidator, assignee, trustee, sequestrator, or
          other similar official of the Servicer or of any substantial part of
          its property, or ordering the winding up or liquidation of its
          affairs, and the continuance of any such decree or order for relief or
          any such other decree or order unstayed and in effect for a period of
          60 consecutive days;

               (vi)   the commencement by the Servicer of a voluntary case or
          proceeding under any applicable federal or state bankruptcy,
          insolvency, reorganization, or other similar law or of any other case
          or proceeding to be adjudicated a bankrupt or insolvent, or the
          consent by it to the entry of a decree or order for relief in respect
          of the Servicer in an involuntary case or proceeding under any
          applicable federal or state bankruptcy, insolvency, reorganization, or
          other similar law or to the commencement of any bankruptcy or
          insolvency case or proceeding against it, or the filing by it of a
          petition or answer or consent seeking reorganization or relief under
          any applicable federal or state law, or the consent by it to the
          filing of such petition or to the appointment of or taking possession
          by a custodian, receiver, liquidator, assignee, trustee, sequestrator,
          or similar official of the Servicer or of any substantial part of its
          property, or the making by it of an assignment for the benefit of
          creditors, or the failure by the Servicer to pay its debts generally
          as they become due, or the taking of corporate action by the Servicer
          in furtherance of any such action;

               (vii)  the failure of the Servicer to make one or more payments
          due with respect to aggregate recourse debt or other obligations
          exceeding $5,000,000, or the occurrence of any event or the existence
          of any condition, the effect of which event or condition is to cause
          (or permit one or more Persons to cause) more than $5,000,000 of
          aggregate recourse debt or other obligations of the Servicer to become
          due before its (or their) stated maturity or before its (or their)
          regularly scheduled dates of payment so long as such failure, event or
          condition shall be continuing and shall not have been waived by the
          Person or Persons entitled to performance;

               (viii) a final judgment or judgments (or decrees or orders) for
          the payment of money aggregating in excess of $5,000,000 and any one
          of such judgments (or decrees or orders) has remained unsatisfied and
          in effect for any period of 60 consecutive days without a stay of
          execution;

               (ix)   so long as IOS Capital is the Servicer, a downgrading of
          the long-term debt rating assigned by Moody's or S&P to IOS Capital to
          Ba2 or below or BB or below, respectively;

                                      38
<PAGE>

                (x)   for any three consecutive Due Periods, the average of the
          Annualized Default Rates for such Due Periods shall be greater than
          8.00%; or

                (xi)  for any three consecutive Due Periods, the average of the
          Delinquency Rates for such Due Periods shall be greater than 10.00%.

          10.02 Termination.
                -----------

          So long as a Servicer Event of Default shall be continuing, the
Trustee [(with the written consent of the Insurer, if no Insurer Default has
occurred and is continuing)] may, and, upon the written instructions of [the
Insurer (if no Insurer Default has occurred and is continuing) or] the holders
of 66-2/3% in Outstanding Principal Amount of the Notes [(if an Insurer Default
has occurred and is continuing)], shall, by notice in writing to the Servicer
terminate all of the rights and obligations of the Servicer (but not the
Originator's obligations which shall survive any such termination) under this
Assignment and Servicing Agreement.  On the receipt by the Servicer of such
written notice, all authority and power of the Servicer under this Assignment
and Servicing Agreement to take any action with respect to any Lease or
Equipment shall cease and the same shall pass to and be vested in the Trustee or
other successor Servicer appointed pursuant to and under this Section and the
Indenture; and, without limitation, the Trustee or such successor Servicer is
hereby authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and assignment of any Lease and the related
Equipment, or otherwise.

          10.03 Trustee to Act; Appointment of Successor.
                ----------------------------------------

          (a)   On and after the time the Servicer receives a notice of
termination pursuant to Section 10.02 hereof, the Trustee or other successor
Servicer, subject to the terms of Section 6.01 of the Indenture, shall be the
successor in all respects to the Servicer in its capacity as servicer of the
Leases under this Assignment and Servicing Agreement and, to such extent, shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof (but not the
obligations of the Originator contained in Section 5 hereof which shall survive
any such termination as above provided) and shall be entitled to receive from
the Issuer the Servicing Fee provided for in Section 4.04 hereof; provided that
                                                                  --------
the Trustee shall in no way be responsible or liable for any action or actions
of the Servicer before the time the Servicer receives such a notice of
termination.

          (b)   Notwithstanding the above, the Trustee (with the written consent
of the Insurer, if no Insurer Default has occurred and is continuing) may, if it
shall be unwilling to so act, or shall, if it is unable to so act, give notice
of such fact to [the Insurer (if no Insurer Default has occurred and is
continuing) or to] each holder of the Notes [(if an Insurer Default has occurred
and is continuing)] and (i) appoint an established institution satisfactory to
[the Insurer (if no Insurer Default has occurred and is continuing) or to] the
holders of 66-2/3% of the then Outstanding Principal Amount of the Notes [(if an
Insurer Default has occurred and is continuing)] as the successor to the
Servicer hereunder to assume all of the rights and obligations of the Servicer
hereunder, including, without limitation, the Servicer's right hereunder to
receive the Servicing Fee (but not the obligations of the Originator contained
in Section 5 hereof), or (ii)

                                      39
<PAGE>

if no such institution satisfactory to [the Insurer (if no Insurer Default has
occurred and is continuing) or to] the holders of 66-2/3% of the then
Outstanding Principal Amount of the Notes [(if an Insurer Default has occurred
and is continuing)] is so appointed within 60 days following the giving of such
notice, appoint a bank or other established institution, which has experience in
servicing lease contracts and equipment similar to the Leases and Equipment and
as to which each of S&P and Moody's has indicated in writing that the
appointment of such Person, as the successor to the Servicer hereunder will not
result in the reduction or withdrawal of such Rating Agency's then-current
rating of the Notes, or (iii) if no such institution is so appointed, petition a
court of competent jurisdiction to appoint an institution meeting such criteria
as the Servicer hereunder. Pending appointment of a successor to the Servicer
hereunder, the Trustee shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the Trustee shall cause such
successor to the Servicer to enter into a servicing agreement substantially in
the form of this Assignment and Servicing Agreement except that such agreement
shall not include any of the Originator's representations, warranties or
obligations and the Trustee may make arrangements for the compensation of such
successor out of payments on Leases as it and such successor shall agree;
provided, however, that no such compensation shall be in excess of that provided
--------  -------
for a successor to the Servicer in Section 4.04 hereof. In no event shall the
Trustee be liable for any servicing fee or for any difference in the amount of
the servicing fee payable hereunder and the amount necessary to induce any
successor Servicer to act as successor Servicer under this Agreement and the
transactions set forth or provided for herein. The Trustee shall provide the
Rating Agencies with prior written notice of the appointment of any successor to
the Servicer.

          10.04    Servicer to Cooperate.
                   ---------------------

          The Servicer hereby agrees to cooperate with the Trustee and any
successor to the Servicer appointed in accordance with Section 10.03 hereof, as
applicable, in effecting the termination and transfer of the responsibilities
and rights of the Servicer hereunder to the Trustee or any successor to the
Servicer, including, without limitation, the execution and delivery of
assignments of Financing Statements, and the transfer to the Trustee or the
successor to the Servicer for administration by it of all amounts which shall at
the time be held by the Servicer or thereafter received with respect to the
Leases.  The Servicer hereby agrees to transfer to any successor to the Servicer
its electronic records and all other records, correspondence and documents
relating to the Leases and Equipment in the manner and at such times as the
successor to the Servicer shall reasonably request.  The Servicer hereby
designates the Trustee and any successor to the Servicer its agent and attorney-
in-fact to execute transfers of Financing Statements and any other filings or
instruments which may be necessary or advisable to effect such transfer of the
Servicer's responsibilities and rights hereunder.

          10.05    Notification to Noteholders.
                   ---------------------------

          Upon any such termination or appointment of a successor to the
Servicer, the Issuer shall cause the Trustee to give prompt written notice
thereof to each Rating Agency and to each holder of the Notes in the manner
provided in the Indenture.

                                      40
<PAGE>

          10.06    Remedies Not Exclusive.
                   ----------------------

          Nothing in the preceding provisions of this Section 10 shall be
interpreted as limiting or restricting any rights or remedies which the Issuer,
the Trustee or any other Person would otherwise have at law or in equity on
account of the breach or violation of any provision of this Assignment and
Servicing Agreement by the Servicer, including, without limitation, the right to
recover full and complete damages on account thereof to the extent not
inconsistent with Section 7.02 hereof.

          SECTION 11.   SUBSTITUTION AND ADDITION OF LEASES

          11.01    Substitution and Addition.
                   -------------------------

          (a)      Subject to the satisfaction of the requirements set forth in
Section 11.01(b) hereof, the Originator will have the right (but not the
obligation) at any time to substitute one or more Eligible Leases and the
Equipment subject thereto (each, a "Substitute Lease") for a Lease (for purposes
of this Section 11 referred to as a "Predecessor Lease") and the Equipment
subject thereto if:

                   (i)   the Predecessor Lease became (A) a Non-Performing
          Lease, (B) a Warranty Lease or (C) an Adjusted Lease during the
          immediately preceding Due Period;

                   (ii)  the aggregate Discounted Present Value of the Non-
          Performing Leases that have become Predecessor Leases during the term
          of this Agreement shall not in the aggregate exceed 10% of the
          Discounted Present Value of the Leases on the Cut-Off Date; and

                   (iii) the aggregate Discounted Present Value of the Adjusted
          Leases and Warranty Leases that have become Predecessor Leases during
          the term of this Agreement shall not exceed 10% of the Discounted
          Present Value of the Leases on the Cut-off Date.

Subject to the satisfaction of the requirements set forth in Section 5 and
Section 11.01(b) hereof, in the event of an Early Lease Termination resulting in
the prepayment in full of the related Early Termination Lease, the Seller will
have the option to transfer to the Issuer an additional Eligible Lease (each, an
"Additional Lease"), together with all right, title and interest in and to the
Equipment (other than the Seller's ownership interests therein).

          (b)      Each transfer of Substitute Leases and addition of Additional
Leases will be subject to the satisfaction of the following conditions
precedent:

                   (i)   the final payment on such Substitute Lease or
          Additional Lease must be on or prior to _____________.

                   (ii)  after giving effect to such additions and substitutions
          and any adjustments pursuant to Section 5.02 hereof the aggregate
          amount of Lease Payments through the term of the Leases (including the
          Substitute Leases and the

                                      41
<PAGE>

          Additional Leases) will not be materially less than the aggregate
          Lease Payments of the Leases prior to such substitution or addition or
          adjustment; and

                 (iii)    after giving effect to such adjustments, additions
          and substitutions, the Discounted Present Value of the Performing
          Leases must not be less than the Discounted Present Value of the
          Performing Leases prior to such adjustment, substitution or addition.

                 (iv)     after giving effect to such adjustments, additions,
          and substitutions pursuant to Section 11, the weighted average
          remaining term of the Performing Leases must not be greater than the
          weighted average remaining term of the Performing Leases prior to such
          adjustment, addition, and substitution.

          (c)    Each addition and substitution pursuant to this Section 11.01
shall include the right to all Related Interests in respect of each Substitute
Lease being substituted or Additional Leases being transferred. At the time of
each such addition or substitution, all Lease Payments with respect to the
related Substitute Leases and/or Additional Leases actually received by the
Originator or the Seller which became due during the then current Due Period
shall be transferred to the Collection Account and all security deposits with
respect thereto shall be transferred to the Security Deposit Account.

          (d)    To the extent the Originator does not substitute a Substitute
Lease for Leases for which any of the representations and warranties made by the
Originator in Sections 2.04, 205(b) and 2.08 are breached, the Originator shall
purchase such Leases pursuant to the provisions of Section 5.04.

          11.02  Procedure.
                 ---------

          (a)    By 11:00 A.M. on the third Business Day following each
Determination Date, the Originator or the Seller, as the case may be, shall give
written notice to the Servicer of any substitution pursuant to Section 11.01 of
Substitute Leases for Predecessor Leases or addition of Additional Leases for
Early Termination Leases which have been prepaid in full during the preceding
Due Period. By 11:00 A.M. on the fourth Business Day following each Payment
Date, the Originator or the Seller, as the case may be, shall deliver to the
Servicer and the Trustee and, to the extent not included in the Servicer Report,
the Trustee shall promptly deliver to [the Insurer and] each Rating Agency (i) a
supplement to Exhibit A hereto setting forth the information shown thereon for
each such Substitute Lease and Additional Lease, (ii) an Officer's Certificate
(A) certifying that each such Substitute Lease and Additional Lease is an
"Eligible Lease", (B) specifying each Predecessor Lease for which a substitution
has been made and each Early Termination Lease which is being replaced by an
Additional Lease and the amount of each periodic Lease Payment under each such
Predecessor Lease and Early Termination Lease and the amount of each periodic
Lease Payment under each Additional Lease and Substitute Lease being transferred
thereby and (C) that all conditions precedent to such addition or substitution
have been satisfied and (iii) such additional information concerning such
Additional Leases, Substitute Leases, Early Termination Leases or Predecessor
Leases as may be needed for the Servicer to prepare its monthly reports pursuant
to Section 6.01 hereof and to otherwise carry out its duties as Servicer
hereunder.

                                      42
<PAGE>

          (b)    Subject to the provisions of Section 11.03, the delivery of any
Officer's Certificate and supplement to Exhibit A pursuant to Section 11.02(a)
shall be conclusive evidence, without further act or deed, that during the
immediately preceding Due Period (i) the Originator contributed as a
contribution to capital to the Seller pursuant to Section  11.01 hereof all of
the Originator's right, title and interest in and to the Substitute Leases and
Additional Leases identified in such supplement, and the related rights
described in Section 11.01 hereof, and contemporaneously the Seller contributed
as a contribution to capital to the Issuer pursuant to Section 11.01 hereof all
of the Seller's right, title and interest in and to the Substitute Leases and
Additional Leases identified in such supplement, and the related rights
described in Section 11.01 hereof, (ii) the Originator transferred to the
Seller, as a contribution of capital, all of the Originator's right, title and
interest in and to the Equipment subject to such Substitute Leases and
Additional Leases and contemporaneously the Seller pledged to the Issuer all of
the Seller's right, title and interest in and to the Equipment subject to such
Substitute Leases and Additional Leases, and (iii) the Issuer assigned and
transferred to the Seller, without representation or warranty, all of the
Issuer's right, title and interest in and to the Predecessor Leases and Early
Termination Leases identified in such Officer's Certificate and released its
security interest in the Equipment relating thereto and contemporaneously the
Seller assigned to the Originator, without representation or warranty, all of
the Seller's right, title and interest in and to the Predecessor Leases and
Early Termination Leases identified in such Officer's Certificate and all the
Seller's right, title and interest in and to the related Equipment.  The
Originator shall promptly deliver to the Servicer (or, if the Originator is the
Servicer, retain in accordance with this Assignment and Servicing Agreement in
its capacity as Servicer) the original executed copy of each Substitute Lease
and Early Termination Lease assigned to the Issuer pursuant to Section 11.01
hereof and the Issuer shall promptly request the Trustee (or, if the Servicer is
acting as the custodian, the Servicer) in writing to deliver to or upon the
order of the Seller the original executed counterpart of each Predecessor Lease
for which substitution has been made pursuant to Section 11.01 hereof and
contemporaneously the Seller shall promptly deliver to the Originator the
original executed counterpart of each Predecessor Lease for which substitution
has been made pursuant to Section 11.01 hereof.

          11.03  Objection and Purchase.
                 ----------------------

          If [the Insurer (if no Insurer Default has occurred and is continuing)
or] any holder of the Notes [(if an Insurer Default has occurred and is
continuing)] objects to any substitution of Leases within ten days of receipt of
the Servicer's monthly report providing notice thereof pursuant to Section 6.01
above, on the grounds either that any Substitute Lease or Additional Lease is
not an Eligible Lease within the meaning of the definition thereof or that such
substitution or addition is otherwise not permitted under the provisions of
Section 11.01 hereof, the Originator shall be entitled to present such
additional information as it deems appropriate in an effort to demonstrate that
such Lease is an Eligible Lease and that such substitution is permitted under
the provisions of Section 11.01 hereof.  Following such presentation, the
substitution shall remain effective if each person originally objecting to the
substitution withdraws the objection.  If the conditions specified in the
preceding sentence are not satisfied, or if at any time it is established that
any lease was not, at the time of substitution, an Eligible Lease, then the
Originator shall be required to purchase such Lease in accordance with the
provisions of Section 5.04 hereof.

                                      43
<PAGE>

          11.04    Originator's, Seller's and Servicer's Subsequent Obligations.
                   ------------------------------------------------------------

          Upon any substitution or addition of Leases in accordance with the
provisions of this Section 11, the Originator's, Seller's and the Servicer's
obligations hereunder with respect to the Predecessor Lease or the applicable
Early Termination Lease shall cease but the Originator, Seller and the Servicer
shall each thereafter have the same obligations with respect to the Substitute
Lease or Additional Lease substituted or added as it has with respect to all
other Leases subject to the terms hereof.

          SECTION 12.   ASSIGNMENT

          12.01    Assignment to Trustee.
                   ---------------------

          It is understood that this Assignment and Servicing Agreement and all
rights of the Issuer hereunder, but none of its duties or obligations, will be
assigned by the Issuer to the Trustee pursuant to the Indenture, for the benefit
of the holders from time to time of the Notes [and the Insurer] as provided in
the Indenture, and may be subsequently assigned by the Trustee to any successor
Trustee or as otherwise provided in the Indenture.  Each of the Originator, the
Seller and the Servicer hereby expressly agrees to each such assignment and
agrees that all of its duties, obligations, representations and warranties
hereunder shall be for the benefit of, and may be enforced by, the Trustee, [the
Insurer,] the holders from time to time of the Notes, and any successor to or
assignee of any thereof.

          12.02    Assignment by Originator, Seller or Servicer.
                   --------------------------------------------

          None of the respective rights or obligations of the Originator, the
Seller or the Servicer hereunder may be assigned (other than the assignment by
the Seller to the Issuer of the covenants, representations, warranties and
obligations of the Originator pursuant to Section 12.01 and the assignment by
the Issuer to the Trustee of the rights of the Issuer hereunder pursuant to the
Indenture as contemplated in Section 12.01) without the prior written consent of
the Issuer and the Trustee (acting upon the written instructions of [the Insurer
(if no Insurer Default has occurred and is continuing) or] the holders of 66-
2/3% of the then aggregate unpaid Outstanding Principal Amount of the Notes [(if
an Insurer Default has occurred and is continuing)]; provided, that nothing
                                                     --------
herein shall preclude the Servicer from performing its duties hereunder through
the use of agents to the extent that such use is consistent with the Servicer's
business practices in dealing with leases and equipment for its own account.

          SECTION 13.   NATURE OF OBLIGATIONS AND SECURITY THEREFOR

          13.01    Obligations Absolute.
                   --------------------

          The obligations of the Originator and Seller hereunder, and the rights
of the Trustee, as assignee of the Issuer, in and to all amounts payable by the
Originator or the Seller hereunder, shall be absolute and unconditional and
shall not be subject to any abatement, reduction, setoff, defense, counterclaim
or recoupment whatsoever, including, without limitation, abatements, reductions,
setoffs, defenses, counterclaims or recoupments due or alleged to be due to, or
by reason of, any past, present or future claims which the Originator or the
Seller may have against the Servicer, the Issuer, [the Insurer,] the Trustee,
and any holder of the Notes or any

                                      44
<PAGE>

other Person for any reason whatsoever; nor, except as otherwise expressly
provided herein, shall this Assignment and Servicing Agreement terminate, or the
respective obligations of the Issuer, the Originator, the Seller or the Servicer
be otherwise affected, by reason of any defect in any Lease or in any unit of
Equipment or in the respective rights and interests of the Issuer, the
Originator, the Seller, [the Insurer] and the Trustee therein, or by reason of
any Liens with respect to any Lease or any unit of Equipment, or any failure by
the Issuer or the Servicer to perform any of its obligations herein contained,
or by reason of any other indebtedness or liability, howsoever and whenever
arising, of the Issuer, the Servicer, the Trustee, [the Insurer,] or any holder
of the Notes to the Originator, the Seller or any other Person or by reason of
any insolvency, bankruptcy, or similar proceedings by or against the Originator,
the Seller, the Servicer, the Issuer, [the Insurer,] the Trustee or any other
Person or for any other cause whether similar or dissimilar to the foregoing,
any present or future law to the contrary notwithstanding, it being the
intention of the parties hereto that all obligations of the Originator or the
Seller hereunder and all amounts payable by the Originator or the Seller
hereunder shall continue to be due and payable in all events and in the manner
and at the times herein provided unless and until the obligation to perform or
pay the same shall be terminated or limited pursuant to the express provisions
of this Assignment and Servicing Agreement.

          13.02    Security for Obligations.
                   ------------------------

          As security for the full and timely performance by the Originator, the
Seller and the Servicer of each of their respective obligations hereunder, and
by the Issuer of each of its obligations hereunder and under the Notes and the
Indenture, each of the Originator and the Seller hereby pledges and grants to
the Trustee (as a precaution in the event that, contrary to the intent of the
parties to the transactions contemplated hereby, it is contended that either has
any continuing interest in any Lease, that the Originator has any continuing
interest in any Equipment or that the security interest granted to the Issuer by
the Seller in the Seller's interest in the Equipment is invalid or ineffective
in whole or in part) a first priority Lien on and security interest in all
right, title and interest of the Originator or the Seller now or hereafter
acquired in and to each Lease (including all Related Interests) and the
Originator's and the Seller's interests in each item of Equipment at any time
subject to the Indenture.  The foregoing security interest is granted upon and
is subject to the same terms and provisions as are set forth in the Indenture
and shall continue in full force and effect until the Indenture is discharged in
accordance with the terms thereof, notwithstanding any waiver or modification of
any of the terms hereof or thereof or of any of the Notes, whether with or
without the consent of the Originator or the Seller.

          13.03    Further Assurances; Financing Statements.
                   ----------------------------------------

          Each of the Originator, the Seller and the Servicer severally agrees
that at any time and from time to time, at its expense, it shall promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable or that the Issuer, the Trustee [or
the Insurer] may request to perfect and protect the assignments and security
interests granted or purported to be granted herein with respect to the Leases
and the Lease Payments or to enable the Issuer, the Trustee [or the Insurer] to
exercise and enforce its rights and remedies under this Agreement with respect
to any Leases and the Lease Payments and, subject to the penultimate sentence of
Section 1.04(d), the Equipment.  Without limiting the generality of the
foregoing, each of the Originator and the Seller shall execute and file such

                                      45
<PAGE>

financing or continuation statements, or amendments thereto, and such other
instruments or notices as may be necessary or desirable or that the Issuer, the
Trustee [or the Insurer] may request to protect and preserve the assignments and
security interests granted by this Agreement with respect to the Leases and,
subject to the penultimate sentence of Section 1.04(d), the Equipment.

          SECTION 14.   DEFINITIONS

          As used in this Assignment and Servicing Agreement, the following
terms have the respective meanings set forth below or set forth in the Section
hereof or in any other agreement indicated:

          Accumulated Funding Deficiency - a funding deficiency described in
          ------------------------------
Section 302 of ERISA.

          Additional Lease - Section 11.01(a) hereof.
          ----------------

          Adjusted Lease - a Lease which has had one or more non-credit related
          --------------
terms adjusted or modified by the Servicer.

          Affiliate - Section 1.01 of the Indenture.
          ---------

          Annualized Default Rate - for any Due Period, the sum of the
          -----------------------
Discounted Present Value as of the related Determination Date of all Leases that
became Non-Performing Leases during such Due Period minus the sum of the
recoveries on Non-Performing Leases received during such Due Period, divided by
the Discounted Present Value of the Leases on the Determination Date immediately
preceding such Determination Date, multiplied by twelve.

          Asset Pool - Granting Clause of the Indenture.
          ----------

          Authorized Officer - in respect of the Servicer, any officer of or
          ------------------
other Person representing the Servicer who is authorized to act for the
Servicer.

          Available Funds - Granting Clause of the Indenture.
          ---------------

          Base Prospectus - the prospectus, dated _______, 2001, included in the
          ---------------
Registration Statement.

          Business Day - any day that is not a Saturday, Sunday or other day on
          ------------
which commercial banking institutions in the city in which the Corporate Trust
Office or the Servicer is located are authorized or obligated by law or
executive order to remain closed.

          Casualty Payment - any payment pursuant to a Lease on account of the
          ----------------
loss, theft, condemnation, governmental taking, destruction, or damage beyond
repair of any item of Equipment subject thereto which results, in accordance
with the terms of the Lease, in a reduction in the number or amount of any
future Lease Payments due thereunder or in the termination of the Lessee's
obligation to make future Lease Payments thereunder.

                                      46
<PAGE>

          Class [A-1] Notes - the Issuer's ______% Class [A-1] Lease-Backed
          -----------------
Notes, Series 2000-1.

          Class [A-2] Notes - the Issuer's ______% Class [A-2] Lease-Backed
          -----------------
Notes, Series 2000-1.

          Class [A-3a] Notes - the Issuer's ______% Class [A-3a] Lease-Backed
          ------------------
Notes, Series 2000-1.

          Class [A-3b] Notes - the Issuer's Class [A-3b] Lease-Backed Notes,
          ------------------
Series 2000-1.

          Class [A-4] Notes - the Issuer's ______% Class [A-4] Lease-Backed
          -----------------
Notes, Series 2000-1.

          Code - the Internal Revenue Code of 1986, as amended.
          ----

          Collection Account - Section 1.01 of the Indenture.
          ------------------

          Corporate Trust Office - Section 1.01 of the Indenture.
          ----------------------

          Cut-Off Date - the opening of business on ________, ____.
          ------------

          Delinquency Rate - for any Due Period, the sum of the Discounted
          ----------------
Present Value as of the related Determination Date of all Leases that are 62 or
more days delinquent, as of such Determination Date, divided by the Discounted
Present Value of the Leases on such Determination Date.

          Determination Date - Section 1.01 of the Indenture.
          ------------------

          Discounted Present Value of the Delinquent Leases - Section 1.01 of
          -------------------------------------------------
the Indenture.

          Discounted Present Value of the Performing Leases - Section 1.01 of
          -------------------------------------------------
the Indenture.

          Due Period - with respect to any Payment Date and the related
          ----------
Determination Date with respect thereto, the calendar month prior to the month
in which such Payment Date and Determination Date occur.

          Early Lease Termination - the termination of a Lease by reason of the
          -----------------------
prepayment in full thereof prior to its original stated maturity.

          Early Termination Lease - a Lease as to which there has been an Early
          -----------------------
Lease Termination.

          Eligible Lease - a Lease that satisfies the representations and
          --------------
warranties set forth in Section 2.04, 2.05(b) and 2.08 and, in the case of a
Substitute Lease or Additional Lease, the applicable requirements of Section 11.

                                      47
<PAGE>

          Equipment - all units or items of equipment and related property from
          ---------
time to time subject to any Lease.

          ERISA - the Employee Retirement Income Security Act of 1974, as
          -----
amended.

          Event of Default - Section 1.01 of the Indenture.
          ----------------

          Excess Copy Charges - Section 1.01 of the Indenture.
          -------------------

          Financing Statement - a statement filed pursuant to the UCC which
          -------------------
evidences a perfected security interest in an asset.

          Governmental Authority: - any court or federal or state regulatory
          ----------------------
body, administrative agency or other tribunal or other governmental
instrumentality.

          Indemnified Party - Section 5.03 hereof.
          -----------------

          Indenture - the Indenture dated as of ___________, ____, between the
          ---------
Issuer and the Trustee, as the same may be supplemented, modified or amended
from time to time in accordance with the terms thereof.

          [Insurer - ___________________________________________]
          --------

          Issuance Date - _______, ____.
          -------------

          Issuer - IKON Receivables Funding, LLC.]
          ------

          Leases - collectively, (i) each lease agreement, conditional sale
          ------
contract and other agreement creating a contractual obligation to which the
Originator is a party, to the extent that such lease agreement, conditional sale
contract or other agreement is described in Exhibit A hereto (as such Exhibit A
                                            ---------                 ---------
may be amended from time to time in accordance with this Assignment and
Servicing Agreement), including, without limitation, each Additional Lease and
Substitute Lease; (ii) each schedule or supplement to each such lease agreement,
conditional sale contract or other agreement (and each master lease agreement
insofar as it relates to any such schedule or supplement); and (iii) any and all
amendments or modifications from time to time to each such lease agreement,
conditional sale contract or other agreement, or to any schedule or supplement,
in accordance with this Assignment and Servicing Agreement.

          Lease Delinquency Payment - Section 1.01 of the Indenture.
          -------------------------

          Lease Guaranty - with respect to any Lease, any guaranty of payment or
          --------------
performance of the whole or any part of the liabilities or obligations of the
Lessee under such Lease.

          Lease Payment - Section 1.01 of the Indenture.
          -------------

          Lease Purchase Amount - Section 1.01 of the Indenture.
          ---------------------

          Lessee - each lessee under a Lease.
          ------

                                      48
<PAGE>

          Lien - means a security interest, lien, charge, pledge, equity (except
          ----
the Seller's equity in any Equipment), or encumbrance of any kind other than tax
liens, mechanics liens, and any liens that attach to a Lease or any item of
Equipment by operation of law.

          Maintenance Charges - Section 1.01 of the Indenture.
          -------------------

          Non-Performing Lease - Section 1.01 of the Indenture.
          --------------------

          Noteholder - at any time, any Person in whose name a note is
          ----------
registered in the Note Register (as defined in the Indenture).

          Notes - the Class [A-1] Notes, the Class [A-2] Notes, the Class [A-3a]
          -----
Notes, the Class [A-3b] Notes and the Class [A-4] Notes issued pursuant to the
Indenture and all notes issued in exchange therefor pursuant to the Indenture.

          Officers' Certificate - with respect to the Seller, Servicer or
          ---------------------
Originator, a certificate signed by the Chairman, the President or a Vice
President, and by at least one other Person who is a Vice President, the
Treasurer, an Assistant Treasurer, the Secretary, or an Assistant Secretary, of
the Seller, Servicer or Originator, as the case may be.

          Originator - IOS Capital, Inc. and any successor thereto in accordance
          ----------
with the provisions hereof.

          Originator Collateral - Section 1.03 hereof.
          ---------------------

          Originator's Purchase Obligation - the obligation of the Originator to
          --------------------------------
purchase Leases and Equipment interests pursuant to Section 5.04.

          Other Lease Payments - Section 1.01 of the Indenture.
          --------------------

          Outstanding - Section 1.01 of the Indenture.
          -----------

          Outstanding Principal Amount - Section 1.01 of the Indenture.
          ----------------------------

          Payment Date - the 15th day of each calendar month (or the next
          ------------
Business Day thereafter if such day is not a Business Day).

          PBGC - the Pension Benefit Guaranty Corporation established pursuant
          ----
to Subtitle A of Title IV of ERISA.

          Pension Plan - Section 2.13 hereof.
          ------------

          Person - an individual, partnership, corporation, joint venture,
          ------
association, limited liability company, trust (including any beneficiary
thereof) or unincorporated organization, or a government or agency or political
subdivision thereof.

          [Policy - Section 1.01 of the Indenture.]
          --------

                                      49
<PAGE>

          Pool Factor - a seven-digit decimal, which the Servicer will compute
          -----------
on each Determination Date, for each class of Notes, indicating the remaining
outstanding principal balance of such class of Notes as of the applicable
Payment Date, as a fraction of the initial outstanding principal balance of such
class of Notes.  Each Pool Factor will be initially 1.0000000, and thereafter
will decline to reflect reductions in the outstanding principal balance of the
applicable class of Notes

          Predecessor Lease - Section 11.01 hereof.
          -----------------

          Prohibited Transaction - any transaction described in Section 406 of
          ----------------------
ERISA which is not exempt by reason of Section 408 of ERISA or the transitional
rules set forth in Section 414(c) of ERISA and any transaction described in
Section 4975(c) of the Code which is not exempt by reason of Section 4975(c)(2)
or Section 4975(d) of the Code, or the transitional rules of Section 2003(c) of
ERISA.

          Prospectus - the form of final prospectus (including the Base
          ----------
Prospectus and Prospectus Supplement) to be used in connection with the public
offering of the Notes as filed with the Securities and Exchange Commission
pursuant to Rule 424(b).

          Prospectus Supplement - the prospectus supplement relating to the
          ---------------------
offering of the Notes, dated __________, ____ accompanying the Base Prospectus.

          Purchase Obligation - the Originator's obligation to purchase any
          -------------------
Lease pursuant to the provisions of Section 5.04 hereof.

          Rating Agency - Standard & Poor's Ratings Services, a division of the
          -------------
McGraw-Hill Companies or Moody's Investors Service Inc. and their respective
successors.

          Registration Statement - the Registration Statement (File No. 333-
          ----------------------
_____), as amended and supplemented from time to time, relating to the offering
from time to time of up to $2,500,000,000 aggregate principal amount of the
Issuer's Lease-Backed Notes.

          Related Interests - with respect to any Lease, (i) all Lease Payments,
          -----------------
[Renewal Payments,] Casualty Payments, Retainable Deposits and Termination
Payments in respect of such Lease, (ii) all rights under any Lease Guarantees
with respect to such Lease, (iii) all rights and interests in any collateral
with respect to such Lease, including any security deposit (whether or not such
security deposit shall have become a Retainable Deposit) and any security
interest in the Equipment securing the obligations of the related Lessee under
such Lease, and (iii) all other amounts due or becoming due with respect to such
Lease or any of the foregoing, except Maintenance Charges and Excess Copy
Charges.

          Related Person - any Person (whether or not incorporated) which is
          --------------
under common control with the Originator or the Seller within the meaning of
Section 414(c) of the Internal Revenue Code of 1986, as amended, or of Section
4001(b) of ERISA.

          Renewal Payment - Section 1.01 of the Indenture.
          ---------------

                                      50
<PAGE>

          Reportable Event - any of the events set forth in Section 4043(c) of
          ----------------
ERISA or the regulations thereunder, a withdrawal from a Pension Plan described
in Section 4063 of ERISA, or a cessation of operations described in Section
4062(e) of ERISA.

          Required Financing Statements - Financing Statements filed in the
          -----------------------------
appropriate UCC filing offices (i) naming the Originator as debtor and the
Seller as secured party and the Originator Collateral as the collateral, (ii)
naming the Seller as debtor, the Issuer as secured party, the Trustee as
assignee and the Seller Collateral as the collateral, and (iii) naming the
Issuer as debtor and the Trustee as secured party and the assets comprising the
Asset Pool as the collateral.

          Reserve Account - Section 1.01 of the Indenture.
          ---------------

          Seller - IKON Receivables-2, LLC, a Delaware limited liability
          ------
company, and any successor.

          Seller Collateral - Section 1.03 hereof.
          -----------------

          Servicer - the corporation so identified in the first paragraph of
          --------
this Assignment and Servicing Agreement and any successor thereto in accordance
with the provisions hereof.

          Servicer Event of Default - Section 10.01 hereof.
          -------------------------

          Servicing Fee - Section 4.04(a) hereof.
          -------------

          Servicing Report - Section 6.01(b) hereof.
          ----------------

          Substitute Lease - Section 11.01(a) hereof.
          ----------------

          Supplementary Report - Section 6.01(e) hereof.
          --------------------

          Terminated Lease - a lease that is terminated prior to its original
          ----------------
stated maturity (but not on account of casualty or a Lease default).

          Termination Payment - a payment payable by a Lessee under a Lease upon
          -------------------
the early termination of such Lease (but not on account of a casualty or a Lease
default) which may be agreed upon by the Servicer, acting in the name of the
Issuer, and the Lessee in accordance with the provisions of Section 5.02 of this
Assignment and Servicing Agreement.

          Transaction Payment Amount - Section 1.01 of the Indenture.
          --------------------------

          Transfer Taxes - Section 2.20 hereof.
          --------------

          Trustee - _____________________________, and any successor thereto, as
          -------
Trustee under the Indenture.

          Trustee Fee - the fixed, scheduled fees and expenses from time to time
          -----------
payable to the Trustee pursuant to the fee agreement between the Issuer and the
Trustee.

                                      51
<PAGE>

          Underwriting Agreement - the Underwriting Agreement dated ___________,
          ----------------------
____ among the Issuer, IOS Capital and the several Underwriters named therein
for the purchase and sale of the Notes.

          Uniform Commercial Code or UCC - with respect to a particular
          ------------------------------
jurisdiction, the Uniform Commercial Code, as in effect from time to time in
such jurisdiction, or any successor statute thereto.

          Warranty Lease - Section 1.01 of the Indenture.
          --------------

          SECTION 15.  MISCELLANEOUS

          15.01  Continuing Obligations.
                 ----------------------

          This Assignment and Servicing Agreement shall continue in full force
and effect until, and shall terminate when, each of the Notes and any other
amounts due to any holder of the Notes and the Insurer have been paid in full
and all other obligations, if any, secured by the Lien of the Indenture have
been fully satisfied.

          15.02  GOVERNING LAW.
                 -------------

          THIS ASSIGNMENT AND SERVICING AGREEMENT 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.  IF ANY PROVISION OF THIS ASSIGNMENT AND
SERVICING AGREEMENT IS DEEMED INVALID, IT SHALL NOT AFFECT THE BALANCE OF THIS
ASSIGNMENT AND SERVICING AGREEMENT.

          15.03  Successors and Assigns.
                 ----------------------

          This Assignment and Servicing Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the Originator,
the Issuer, the Seller, and the Servicer and shall inure to the benefit of the
successors and assigns of the holders, from time to time, of the Notes.

          15.04  Modification.
                 ------------

          The terms of this Assignment and Servicing Agreement shall not be
waived, modified or amended without the written consent of the party against
whom such waiver, modification or amendment is claimed and, in any case, the
Trustee (acting upon the written instructions of [the Insurer (so long as no
Insurer Default has occurred and is continuing) or] the holders of 66-2/3% of
the then aggregate unpaid Outstanding Principal Amount of the Notes [(if an
Insurer Default has occurred and is continuing)]).

          15.05  No Proceedings.
                 --------------

          The Originator and the Seller each hereby agrees that it will not,
directly or indirectly, or direct or cause its officers, directors, or employees
to, aid, institute, or cause to be

                                      52
<PAGE>

instituted, against the Issuer, and the Originator hereby agrees that it will
not, directly or indirectly, or direct or cause its officers, directors or
employees to, aid, institute, or cause to be instituted, against the Seller, any
proceeding of the type referred to in Section 7.01(d) or (e) of the Indenture so
long as there shall not have elapsed one year plus one day since the latest
maturing Notes have been paid in full in cash.

          15.06  Notices.
                 -------

          All notices and other communications given in connection with this
Assignment and Servicing Agreement shall be sufficient for every Person
hereunder (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid or certified mail return receipt requested, or sent
by private courier or confirmed telecopy, in case of the Originator, to 1738
Bass Road, P.O. Box 9115, Macon, Georgia  31208, Attention:  Harry G. Kozee,
Vice President - Finance,  with a copy to the General Counsel (telecopy: (912)
471-2375), in the case of the Seller, to 1738 Bass Road, P.O. Box 9115, Macon,
Georgia 31208, Attention:  Robert McLain (telecopy:  (912) 471-2375,  and in the
case of the Issuer, the Servicer and the Trustee and the holders of the Notes,
to such addresses as are provided pursuant to Sections 1.05 and 1.06 of the
Indenture or to such other address as either party may specify to the other from
time to time in accordance with this Section 15.06.

          15.07  Counterparts.
                 ------------

          This Assignment and Servicing Agreement may be executed in any number
of counterparts, each counterpart constituting an original, but all together
constituting only one Agreement.

          15.08  Nonpetition Covenant.
                 --------------------

          Neither the Originator nor the Seller shall petition or otherwise
invoke the process of any Governmental Authority for the purpose of commencing
or sustaining a case against the Issuer under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Issuer or any
substantial part of its respective property, or ordering the winding up or
liquidation of the affairs of the Issuer.  Neither the Originator nor the Seller
shall petition or otherwise invoke the process of any Governmental Authority for
the purpose of commencing or sustaining a case against the Issuer under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of its respective property, or ordering
the winding up or liquidation of the affairs of the Issuer.

          15.09  Benefits of Agreement.
                 ---------------------

          The Trustee [and the Insurer] and their respective successors and
assigns shall be third-party beneficiaries to the provisions of this Agreement,
and shall be entitled to rely upon and directly to enforce such provisions [so
long, in the case of the Insurer, that no Insurer Default has occurred and is
continuing].  Nothing in this Agreement, express or implied, shall give to any
other Person any benefit or any legal or equitable right, remedy or claim under
this Agreement.  [The Insurer may disclaim any of its rights and powers under
this Agreement (in which case the

                                      53
<PAGE>

Trustee may exercise such rights and powers hereunder), but not its duties and
obligations under the Policy, upon delivery of a written notice to the Trustee
and the parties hereto.]

                  [Balance of Page Intentionally Left Blank]

                                      54
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Assignment
and Servicing Agreement as of the date and year first written above.

                                        IOS CAPITAL, INC., as
                                        Originator and Servicer

                                        By:________________________
                                           Name:
                                           Title:

                                        IKON RECEIVABLES-2, LLC

                                        By: IKON RECEIVABLES FUNDING, INC.,
                                            its Manager

                                            By:________________________
                                               Name:
                                               Title:

                                        IKON RECEIVABLES FUNDING, LLC

                                        By: IKON RECEIVABLES FUNDING, INC.,
                                            its Manager

                                            By:________________________
                                               Name:
                                               Title:

The undersigned hereby acknowledges receipt of a copy of the foregoing
Assignment and Servicing Agreement and agrees to, and to be bound by, each of
the provisions thereof applicable to the undersigned.

___________________________________,

not in its individual capacity, but
solely as Trustee
<PAGE>

By:__________________________
   Name:
   Title:

                                       2
<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

                        SCHEDULE OF LEASES AND EQUIPMENT

                         ON FILE WITH INDENTURE TRUSTEE

                                      A-1
<PAGE>

                                                                       EXHIBIT B
                                                                       ---------
                           FORM OF SERVICING REPORT

                         [TO BE UPDATED AND CONFORMED]

Line

1    Transaction Cash Flow - see computer detail

1/1  Beginning Net Present Value
1/2  Less: - current month
1/3  Add: Actual Interest Payment (Weighted Avg. A notes)
1/4  Add: 0.75% Servicing Component
1/5  Less: Current month Non-Performing
1/5a Less: Warranty Leases
1/6  Less: Amounts on Early Terminations
1/7  Add:  Amounts due to Substitutions
1/8  Add:  Amounts due to Additional leases (Prepaid leases)
1/9  Ending Net Present Value

2    Overdue Lease Payments - see computer detail

2/1  Beginning Balance
2/2  (Memo) Overdue Payments Received
2/3  Less: Reimbursed Per This Report
2/4  Less: Past Dues on Disqualified Leases - Early Terminations
2/5  Less: Past Dues on Disqualified Leases - Non-Performing and Warranty
2/6  Add:  Last Month's Current Payments that became Past due
2/7  Add:  Received on Replacements Leases
2/8  (MEMO) Net New  Advances
2/9  Ending Balance

3    Collection account-Advance Lease Payments

4/1  Beginning Balance
4/2  Less:  Applied to Current from Prepaid
4/3  Less:  Advance on Disqualified Leases
4/4  Add:  Received This Month
4/5  Add:  Received on Replacement Leases
4/6  Ending Balance

4    Cash Reserve Account

6/1  Beginning Balance
6/2  Less:  New Obligations:  Total Shortfall (B9)
6/3  Plus:  Interest earned on Cash Reserve Acct.
6/4  Ending Balance
6/5  ___% of Outstanding Note Value
6/6  Lesser of 1% of Discounted Present Value of Leases as of the Cut-Off Date
     and the Outstanding Principal Amount
6/7  Target Cash Reserve (Greater of 6/5 & 6/6)
6/8  Cash Reserve Release (6/4-6/7)
6/9  Ending Balance Cash Reserve Account

                                      B-1
<PAGE>

5    Non-Performing Leases

8/1  Beginning Balance of Non-Performing Leases
8/2  Plus Current Month Additions
8/3  Plus Past Due Payments on Non-Performing Leases
8/4  Less Current Month Recoveries
8/5  Ending Balance
     Cash Receipts

Line
A/1  Regular monthly payments
A/2  Overdue payments
A/3  Overdue Payments due on Early Termination and Termed Out Leases (From
     Originator)
A/4  Advance Payments of monthly rentals
A/5  Residual Values
A/6  Recoveries on Non-Performing Leases
A/7  Proceeds from investment of Collection Accounts funds
A/8  Casualty and Termination Payments
A/9  Servicer Advances
A/10 Total Receipts
     Disbursement Requirements
Line

B/1  Past Due Payments Collected, Due Servicer (COLLECTION ACCT)
B/2  Overdue Payments Advanced, on Disqualified Leases (COLLECTION ACCT)
B/3     Servicing Fee (COLLECTION ACCT)
B/4     Advanced Payments on Disqualified Leases (COLLECTION ACCT)
B/5       Total to Servicer
B/6  Collection Account - Advanced Rents (Monthly-Increase/(Decrease))
B/7  Net Cash Receipts
B/8  Shortfall
B/9  Draw on Cash Reserve
B/10 Total Available Funds

C    Noteholders

C/1  Class [A-1] Interest Paid ______%
C/2  Class [A-2] Interest Paid ______%
C/3  Class [A-3a] Interest Paid ______%
C/3  Class [A-3b] Interest Paid
C/4  Class [A-4] Interest Paid ______%
C/9  Beginning Class [A-1] Note Balance
C/10 Class [A-1] Note Value Target
C/11 Class [A-1] Principal Paid
C/12 Beginning Class [A-2] Note Balance
C/13 Class [A-2] Note Value
C/14 Ending Class [A-2] Note Balance
C/15 Class [A-2] Principal Paid
C/16 Beginning Class [A-3a Note Balance]
C/17 Class [A-3a] Note Value
C/18 Ending Class [A-3a] Note Balance
C/19 Class [A-3a] Principal Paid
C/20 Beginning Class [A-3b] Note Balance

                                      B-2
<PAGE>

C/21  Class [A-3b] Note Value
C/22  Ending Class [A-3b] Note Balance
C/23  Class [A-3b] Principal Paid
C/24  Beginning Class [A-4] Note Balance
C/25  Class [A-4] Note Value
C/26  Class [A-4] Principal Paid
C/27  Ending Class [A-4] Note Balance
C/28  Balance Available for Distribution to IOS Capital
D     Miscellaneous Tracking Items
D/1   % of Total Non-Performing and Warranty substituted as per Initial Outs,
      Note Value
D/2   (MEMO) Cumulative amounts on Early Lease Terminations due to modification
      of leases
D/3   (MEMO) Cumulative amounts of additional leases purchased

                                      B-3

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