IKON OFFICE SOLUTIONS INC
EXHIBIT 10.2
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>6
<FILENAME>exhibit10-2.txt
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
                                                            Exhibit 10.2





               AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT

                           Dated as of March 31, 2003

                                      Among

                              IKON FUNDING-3, LLC,

                                 As Transferor,

                                IOS CAPITAL, LLC,

                       As Originator and Collection Agent,


                          GEMINI SECURITIZATION CORP.,

                             As Conduit Transferee,


                       THE SEVERAL FINANCIAL INSTITUTIONS
                                  PARTY HERETO
                               FROM TIME TO TIME,

                            As Alternate Transferees


                       DEUTSCHE BANK AG, NEW YORK BRANCH,
                             As Administrative Agent



<PAGE>





               AMENDED AND RESTATED RECEIVABLES TRANSFER AGREEMENT

                           Dated as of March 31, 2003

         IKON FUNDING-3,  LLC, a Delaware limited  liability  company  (together
with its successor and assigns,  the "Transferor"),  IOS CAPITAL,  LLC (formerly
IOS CAPITAL,  INC.), a Delaware  limited  liability  company  (together with its
successors  and assigns,  the  "Originator"  and in its  capacity as  collection
agent,  together  with  its  successors  and  assigns  in  such  capacity,   the
"Collection Agent"),  GEMINI SECURITIZATION CORP. (formerly TWIN TOWERS INC.), a
Delaware corporation (together with its successors and assigns,  "Gemini" or the
"Conduit  Transferee"),  the APA TRANSFEREES from time to time party hereto (the
"Alternate  Transferees")  and DEUTSCHE BANK AG, NEW YORK BRANCH  (together with
its  successors  and assigns,  "Deutsche  Bank"),  a branch  office of a foreign
banking corporation organized under the laws of Germany, as administrative agent
for the  benefit  of Gemini and the  Alternate  Transferees  (in such  capacity,
together with its successors and assigns in such capacity,  the  "Administrative
Agent"), agree as follows:

         PRELIMINARY  STATEMENTS.  Certain terms that are  capitalized  and used
throughout this Agreement are defined in Exhibit I to this Agreement. References
in Exhibits to "the Agreement" refer to this Agreement, as amended,  modified or
supplemented from time to time.

         This  Agreement  amends  and  restates  as of the  date  hereof  in its
entirety that certain Receivables Transfer Agreement, dated as of March 28, 2001
(the "Original  Receivables  Transfer  Agreement"),  among the  Transferor,  the
Collection  Agent,  the Conduit  Transferee,  the Alternate  Transferees and the
Administrative  Agent. Upon the  effectiveness of this Agreement,  the terms and
provisions of the Original  Receivables  Transfer  Agreement shall be superseded
hereby  in  their  entirety,  and each  reference  to the  Original  Receivables
Transfer Agreement in any other document, instrument or agreement shall mean and
be a reference to this Agreement.  Nothing  contained  herein,  unless expressly
herein stated to the contrary,  is intended to amend, modify or otherwise effect
any other  instrument,  document  or  agreement  executed  and or  delivered  in
connection with the Original Receivables Transfer Agreement.

         The  Transferor  desires  to  transfer  from  time to  time,  undivided
percentage interests in discrete pools of Receivables and Related Security,  and
the Conduit  Transferee  may desire to, and the APA  Transferees  (if requested)
shall, accept such transfer of such undivided percentage  interests,  subject to
the terms and conditions of this  Agreement.  Accordingly,  the parties agree as
follows:

                                    ARTICLE I

                          AMOUNTS AND TERMS OF TRANSFER

Section 1.01.  Facility.  Upon the terms and subject to the conditions set forth
herein,  prior to the Facility  Termination Date, (a) the Transferor may, at its
option from time to time, transfer to the Administrative Agent, on behalf of the
Active  Transferees,   and  (b)  the  Administrative  Agent  may,  in  its  sole
discretion, on behalf of Gemini, and the Administrative Agent shall on behalf of
the Alternate Transferees (in the event Gemini elects not to accept such

<PAGE>



transfer)  accept such transfer and  assignment  from the Transferor of, without
recourse except as provided herein,  undivided percentage ownership interests in
a pool of  Receivables,  together  with Related  Security and  Collections  with
respect thereto, from time to time (each, a "Transfer").  Under no circumstances
shall the  Administrative  Agent accept any Transfer if, after giving  effect to
such Transfer, the Aggregate Capital would exceed the Aggregate Commitment.

(a) The  Transferor  may,  upon at least 30 days'  notice to the  Administrative
Agent,  terminate  this facility in whole or, from time to time,  reduce in part
the unused  portion of the  Aggregate  Commitment;  provided  that each  partial
reduction shall be in the amount of at least $10 million or an integral multiple
thereof and that, unless terminated in whole, the Aggregate  Commitment shall in
no event be reduced  below $100  million.  Any such  reduction in the  Aggregate
Commitment  shall  simultaneously  reduce  the  respective  Commitments  of  the
Alternate Transferees Pro Rata.

Section  1.02.  Consideration  and Terms.  (a) On any date prior to the Facility
Termination Date, the Transferor may request a Transfer, which Transfer shall be
in a minimum amount of $10,000,000 and increments of $100,000 in excess thereof,
by  delivering to the  Administrative  Agent not later than 11:00 a.m. (New York
time),  three Business Days prior to such requested  Transfer (each, a "Transfer
Date"),  written notice in the form of Annex C specifying the proposed  Transfer
Date and setting forth  detailed  information  regarding the  Receivables  to be
included in such  Transfer,  including  an  addendum to Schedule II hereto.  The
total amount to be paid by the Active  Transferees  in respect of such  Transfer
shall be equal to the  Aggregate  Adjusted  Outstanding  Balance of the  Related
Contracts for the Receivables included in such Transfer (the "Consideration" for
such Receivables).

(b) Promptly upon receipt of such notice, the Administrative Agent shall deliver
a copy  thereof to each of the  Transferees.  By 3 p.m.  (New York City time) on
each Transfer Date, upon satisfaction of the applicable  conditions set forth in
Exhibit  II hereto,  (x) the Active  Transferees  shall  make  available  to the
Administrative  Agent their  respective Pro Rata shares of the  Consideration in
respect of such  Transfer  by  deposit of such  amounts in same day funds to the
Administrative  Agent's  Account  and,  after the receipt by the  Administrative
Agent of such funds, the  Administrative  Agent will cause such Consideration to
be paid to the Transferor in immediately available funds prior to 4:00 p.m. (New
York City time) to the  Transferor's  account no.  5603799977 at PNC Bank, N.A.,
Delaware (ABA#031-100-089); provided, however, that in the case of each Transfer
other than the initial  Transfer,  the  applicable  Consideration  may be netted
against  all  amounts  on  such  payments  of  Capital  to be  deposited  in the
Administrative  Agent's Account on such date by the Collection Agent pursuant to
Section 1.03 and (y) the Transferor  does hereby  (effective on the date of each
Transfer  automatically and without any further  documentation)  transfer to the
Administrative  Agent for the benefit of the applicable  Transferees  all of the
related  Receivables,  the  Related  Contracts,  the  Related  Security  and the
Collections in respect thereof.  The Active  Transferees  shall on or before the
tenth day of each month (or if such day is not a Business  Day, on the preceding
Business Day), notify the  Administrative  Agent, and the  Administrative  Agent
shall  notify the  Transferor,  of the Yield  accrued  with respect to the prior
Settlement Period or portion thereof.  Each Transfer to the Administrative Agent
on behalf of the Active  Transferees  hereunder  shall be allocated  Pro Rata to
each such Transferee.


                                        2
<PAGE>


(c) Each Alternate Transferee's obligation hereunder shall be several, such that
the failure of any Alternate Transferee to make a payment in connection with any
Transfer  hereunder  shall not relieve  any other  Alternate  Transferee  of its
obligation hereunder to make payment for any Transfer. Further, in the event any
Alternate  Transferee  fails to satisfy its  obligation  to accept a Transfer as
required   hereunder,   upon   receipt  of  notice  of  such  failure  from  the
Administrative  Agent,  subject to the limitations set forth herein, each of the
non-defaulting  Alternate  Transferees shall accept a transfer of its respective
Pro Rata share of such defaulting Alternate Transferee's applicable share of the
related Transfer  (determined without regard to the Commitment of the defaulting
Alternate  Transferee).  Notwithstanding  anything  in  this  paragraph  to  the
contrary,  no  Alternate  Transferee  shall be  required  to  accept a  transfer
pursuant to this  paragraph  for an amount which would cause the Capital of such
Alternate  Transferee  (after  giving  effect to such  transfer)  to exceed  its
Commitment.

Section 1.03. Settlement Procedures.  (a) Collection of the Receivables shall be
administered  by the  Collection  Agent,  in  accordance  with the terms of this
Agreement.  The  Transferor  shall provide to the  Collection  Agent on a timely
basis all information needed for such administration.

(b)      The  Collection  Agent  shall,  on each  day on which  Collections  are
         received by it or deposited in the  Collection  Account,  set aside and
         hold in trust (or, after the  establishment of the Collection  Account,
         hold  in  the  Collection   Account)  for  the  benefit  of  the  Hedge
         Counterparties and the Transferees,  and distribute such Collections on
         each Settlement Date in the following order of priority:

(i)      to the Hedge  Counterparties  in payment of the net amounts  payable to
         such Hedge  Counterparties by the Transferor under the Hedge Agreements
         (excluding any Hedge Breakage Costs payable thereunder);

(ii)     to the Collection  Agent, an amount equal to any Unreimbursed  Servicer
         Advances;

(iii)    to the Collection  Agent,  if the Collection  Agent is not IOS Capital,
         LLC,  an amount  equal to the  Collection  Agent Fee accrued but unpaid
         during the preceding  Settlement  Period,  together with any amounts in
         respect of the  Collection  Agent Fee that were due in respect of prior
         Settlement Periods that remain unpaid;

(iv)     to the Administrative  Agent's Account,  an amount equal to accrued and
         unpaid Yield and any fees payable pursuant to Section 1.04(a);

(v)      to the Administrative Agent's Account,

      1.    prior to the occurrence of a Trigger  Event,  an amount equal to the
            due and unpaid Principal Payment Amount, and

      2.    following the  occurrence and during the  continuation  of a Trigger
            Event, an amount equal to the outstanding  Aggregate  Capital (after
            giving effect to any other reduction in Aggregate  Capital occurring
            on such Settlement Date);


                                        3
<PAGE>


(vi)     to the Collection  Agent, if the Collection Agent is IOS Capital,  LLC,
         an amount equal to the  Collection  Agent Fee accrued but unpaid during
         the preceding  Settlement Period,  together with any amounts in respect
         of the  Collection  Agent  Fee  that  were  due  in  respect  of  prior
         Settlement Periods that remain unpaid;

(vii)    to the Hedge  Counterparties  in  payment of any Hedge  Breakage  Costs
         payable to such Counterparties under the Hedge Agreements.

(viii)   to the Administrative  Agent's Account,  in payment of any amounts then
         owed to the  Transferees,  the  Administrative  Agent  or any  Affected
         Person hereunder (other than in respect of Yield, fees or the repayment
         of Capital); and

(ix)     to the Transferor, any remaining amounts.

         Unless  a  Trigger  Event,  a  Potential   Trigger  Event,  a  Servicer
Termination Event or a Potential Servicer Termination Event has occurred, for so
long as the Originator is the Collection  Agent,  the Collection Agent shall not
be required to segregate Collections, but may commingle the Collections with its
own funds and make the  deposits and  payments  required to be made  pursuant to
this paragraph (b) on each Settlement Date.

            (c)   (i) Upon receipt of funds  deposited  into the  Administrative
                  Agent's  Account  pursuant to subsection  (b)(iv)  above,  the
                  Administrative  Agent shall distribute such funds, as follows:
                  Pro Rata to each  Transferee  in  payment of (x)  accrued  but
                  unpaid  Yield on the Capital of such  Transferee  and (y) fees
                  payable to the  Administrative  Agent (for the benefit of such
                  Transferee) pursuant to Section 1.04(a).

            (ii)  Upon  receipt  of  funds  deposited  into  the  Administrative
                  Agent's  Account  pursuant to  subsection  (b)(v)  above,  the
                  Administrative  Agent shall  distribute such funds Pro Rata to
                  each  Transferee  in  reduction to zero of all Capital of such
                  Transferee.

            (iii) Upon  receipt  of  funds  deposited  into  the  Administrative
                  Agent's Account  pursuant to subsection  (b)(viii)  above, the
                  Administrative  Agent  shall  distribute  such  funds  to  the
                  Transferees,  the Administrative Agent or any Affected Person,
                  as  applicable,  in payment of any other  amounts  owed by the
                  Transferor hereunder, pro rata based on the respective amounts
                  owed to such parties.

(d) For the purposes of this Section 1.03:

            (i)   Upon  discovery by the  Originator  or the  Transferor  or the
                  Administrative Agent of a breach of any of the representations
                  or  warranties  made  or  deemed  made  by the  Originator  in
                  paragraph (h) of Exhibit III with respect to any Receivable or
                  the Related  Security,  such party  shall give prompt  written
                  notice thereof to the other party,  as soon as practicable and
                  in  any  event  within  three  Business  Days  following  such
                  discovery.  The Transferor shall be deemed to have received on
                  such day a Collection in full of such Receivable and all other
                  Receivables  relating to the same  Contract,  in the amount of
                  the  Outstanding  Balance of such  Contract plus Yield accrued
                  and to  accrue  thereon  through  the end of the then  current
                  Settlement  Period,  and the  amount of each  such  Collection
                  shall be applied as provided in this Section 1.03; and

                                        4

<PAGE>


            (ii)  if  and  to  the  extent  the  Administrative   Agent  or  any
                  Transferee  shall be required for any reason to pay over to an
                  Obligor  any amount  received  on its behalf  hereunder,  such
                  amount shall be deemed not to have been so received but rather
                  to have been retained by the Transferor and, accordingly,  the
                  Administrative  Agent or such Transferee,  as the case may be,
                  shall have a claim  against the  Transferor  for such  amount,
                  payable when and to the extent that any  distribution  from or
                  on behalf of such Obligor is made in respect thereof.

(e)      Except as provided in paragraph (i) of Section 1.03(d), or as otherwise
         required by applicable law or the relevant  Contract,  all  Collections
         received  from an  Obligor of any  Receivables  shall be applied to the
         Receivables  of such  Obligor  in the  order  of the age of the due but
         unpaid  amounts with  respect to such  Receivables,  starting  with the
         oldest such due but unpaid amount,  unless such Obligor  designates its
         payment for application to specific Receivables.

(f)      The  Transferor  shall  forthwith  deliver to the  Collection  Agent an
         amount  equal to all  Collections  deemed  received  by the  Transferor
         pursuant to Section  1.03(d)(i)  above and the  Collection  Agent shall
         hold or distribute such Collections in accordance with Section 1.03(b).
         If Collections  are then being paid to the  Administrative  Agent,  the
         Collection  Agent shall forthwith  cause such deemed  Collections to be
         paid to the  Administrative  Agent.  If a  Trigger  Event or  Potential
         Trigger Event has occurred,  so long as the  Transferor  shall hold any
         Collections or deemed Collections required to be paid to the Collection
         Agent or the  Administrative  Agent, it shall hold such  Collections in
         trust and separate and apart from its own funds and shall  clearly mark
         its records to reflect such trust;  provided,  however,  that following
         the  establishment of the Collection  Account pursuant to Section 4.08,
         the Collection Agent shall deposit such Collections into the Collection
         Account within two (2) Business Days of receipt thereof.

(g)      The  Transferor  may reduce the  Aggregate  Capital upon  delivery of a
         notice in the form of Annex D at least ten Business  Days' (in the case
         of reductions in excess of  $25,000,000) or at least two Business Days'
         (in the case of  reduction  of  $25,000,000  or  less),  to the  Active
         Transferees  and  the   Administrative   Agent,  by  remitting  to  the
         Administrative  Agent's Account (i) cash and (ii) instructions to apply
         such cash to the Pro Rata  reduction of each  Transferee's  Capital and
         Yield accrued and to accrue thereon (until such cash can be used to pay
         the Commercial  Paper). The Transferor shall pay all breakage and other
         costs related to such Capital reduction,  (including any Hedge Breakage
         Costs);  provided,  however,  that  each  of the  Transferees  and  the
         Administrative  Agent shall use its reasonable best efforts to minimize
         any breakage costs.

(h)      The  Transferor  may,  upon at least ten  Business  Days' notice to the
         Administrative  Agent,   repurchase  all  of  the  Receivables  on  any
         Settlement   Date  (the   "Repurchase   Date")  by   remitting  to  the
         Administrative Agent's Account on or prior to such Repurchase Date, for
         distribution in accordance with  subsection  1.03(c) above,  cash in an
         amount  equal to the  Aggregate  Capital,  plus all  accrued and unpaid
         Yield  thereon,  and all other  amounts  which are  payable  under this
         Agreement  (including  any  Hedge  Breakage  Costs).  A  repurchase  of
         Receivables made pursuant to this subsection  1.03(h) shall include the
         Related Security and Collections with respect thereto.


                                        5
<PAGE>


Section 1.04.  Payment of Fees and Yield.  (a) Fees. The Transferor shall pay to
the  Administrative  Agent  certain fees (for its benefit and for the benefit of
the  Transferees)  in the amounts  and on the dates set forth in a separate  fee
agreement  dated as of March 28, 2001 (as  amended,  supplemented  or  otherwise
modified, the "Fee Letter") between the Transferor and the Administrative Agent.

(b)  Yield.  On or before  the tenth day of each  month (or if such day is not a
Business Day, on the preceding  Business  Day), the  Administrative  Agent shall
calculate the Tranche Rate  applicable to each Tranche funded or maintained by a
Transferee for each day in the prior  Settlement  Period and the  Administrative
Agent shall notify the Servicer of such rates.

(c) Collection  Agent Fee. The  Collection  Agent shall be entitled to receive a
fee (the  "Collection  Agent  Fee") of  one-twelfth  of 1.50%  per  month on the
average  daily  Aggregate  Capital  from  the  date  of the  first  Transfer  of
Receivables  until the date on which such Aggregate  Capital is reduced to zero,
payable  on each  Settlement  Date.  The  Collection  Agent Fee shall be payable
solely from Collections  pursuant to, and subject to the priority of payment set
forth in, Section 1.03.

Section 1.05.  Payments and  Computations,  Etc. (a) Unless otherwise  specified
herein,  all amounts to be paid or deposited by the Transferor or the Collection
Agent hereunder to or for the account of the Administrative Agent, Gemini or any
other  Transferee  shall be paid or deposited no later than 11:00 a.m. (New York
City time) on the day when due in same day funds to the  Administrative  Agent's
Account.  Upon  receipt  of  funds  deposited  into the  Administrative  Agent's
Account,  the  Administrative  Agent shall  distribute such funds to the Persons
entitled  thereto in accordance  with the provisions of this Agreement or retain
such funds for its own account, as appropriate.

(b) The Transferor  shall,  to the extent  permitted by law, pay interest on any
amount not paid or deposited by the Transferor  (whether as Collection  Agent or
otherwise)  when due  hereunder,  at an interest  rate per annum equal to 2% per
annum above the Base Rate, payable on demand.

(c) Unless  otherwise  specified  herein,  all  computations  of interest  under
subsection  (b) above and all  computations  of Yield,  fees,  and other amounts
hereunder shall be made on the basis of a year of 360 days for the actual number
of days elapsed.  Whenever any payment or deposit to be made hereunder  shall be
due on a day other than a Business Day, such payment or deposit shall be made on
the next succeeding Business Day and such extension of time shall be included in
the computation of such payment or deposit.

Section 1.06. Increased Costs. (a) If the Administrative  Agent, any Transferee,
any other  entity  which  enters into a  commitment  to acquire  Receivables  or
interests  therein,  or any entity which provides  credit  enhancement or any of
their  respective   Affiliates  (each  an  "Affected  Person")  determines  that
compliance  with any law or  regulation  or any  guideline  or request  from any
central bank or other governmental authority (whether or not having the force of
law)  affects or would  affect the amount of capital  required or expected to be
maintained by such Affected Person and such Affected Person  determines that the
amount of such  capital  is  increased  by or based  upon the  existence  of any
commitment to accept transfers of or otherwise to maintain the


                                        6
<PAGE>


investment  in  Receivables  or  interests   therein   hereunder  or  under  any
commitments to a Transferee  related to this Agreement or to the funding thereof
or any  related  liquidity  facility  or  credit  enhancement  facility  (or any
participation therein) and other commitments of the same type, then, upon demand
by  such  Affected  Person  (with  a copy  to  the  Administrative  Agent),  the
Transferor shall immediately pay to the Administrative Agent, for the account of
such  Affected  Person  (as a  third-party  beneficiary),  from  time to time as
specified by such Affected Person,  additional  amounts sufficient to compensate
such Affected Person in the light of such circumstances, to the extent that such
Affected Person  reasonably  determines such increase in capital to be allocable
to the existence of any of such  commitments.  A certificate  as to such amounts
submitted to the Transferor and the Administrative Agent by such Affected Person
shall be conclusive and binding for all purposes, absent manifest error.

(b) If, due to either (i) the  introduction  of or any  change  (other  than any
change by way of  imposition or increase of reserve  requirements)  in or in the
interpretation of any law or regulation or (ii) compliance with any guideline or
request from any central bank or other  governmental  authority  (whether or not
having  the  force  of  law),  there  shall  be any  increase  in the  cost to a
Transferee of agreeing to accept the Transfer of or accepting such Transfers, or
maintaining the ownership of the Receivables or interests  therein in respect of
which Yield is computed by reference to the Eurodollar Rate, then upon demand by
such Transferee (with a copy to the Administrative  Agent), the Transferor shall
immediately pay to the Administrative  Agent, for the account of such Transferee
(as a  third-party  beneficiary),  from  time  to  time  as  specified  by  such
Transferee, additional amounts sufficient to compensate such Transferee for such
increased  costs. A certificate  as to such amounts  submitted to the Transferor
and the Administrative Agent by a Transferee shall be conclusive and binding for
all purposes, absent manifest error.

Section 1.07.  Requirements  of Law. In the event that any requirement of law or
any  change  therein  or in the  interpretation  or  application  thereof by the
relevant  governmental  authority  to a  Transferee  after  the date  hereof  or
compliance by a Transferee with any request or directive  (whether or not having
the force of law) from any central bank or other governmental authority:

(i)      does or shall subject such Transferee to any tax of any kind whatsoever
         with  respect  to this  Agreement  or change the basis of  taxation  of
         payments to such  Transferee  on account of  Collections,  Yield or any
         other amounts payable hereunder  (excluding taxes imposed on the income
         of such Transferee,  and franchise taxes imposed on such Transferee, by
         the  jurisdiction  under the laws of which such Transferee is organized
         or a political subdivision thereof); or

(ii)     does or shall impose,  modify or hold  applicable any reserve,  special
         deposit, compulsory loan or similar requirement against assets held by,
         or deposits or other  liabilities in or for the account of,  purchases,
         advances  or loans  by,  or other  credit  extended  by,  or any  other
         acquisition  of funds by, any office of such  Transferee  which are not
         otherwise  included in the  determination of the Eurodollar Rate or the
         Base Rate hereunder;


                                        7
<PAGE>


and  the  result  of any of the  foregoing  is to  increase  the  cost  to  such
Transferee of  maintaining  an interest in  Receivables  or to reduce any amount
receivable  hereunder,  then, in any such case,  the  Transferor  shall pay such
Transferee, upon its demand, any additional amounts necessary to compensate such
Transferee for such additional cost or reduced amount  receivable with regard to
such Transferee's Receivables.  All such amounts shall be payable as incurred. A
certificate  from such Transferee or the  Administrative  Agent, as the case may
be, to the Transferor certifying,  in reasonably specific detail, the basis for,
calculation of, and amount of such  additional  costs shall be conclusive in the
absence of manifest error.

Section  1.08.  Inability to Determine  Eurodollar  Rate.  In the event that the
Administrative  Agent  shall  have  determined  prior  to the  first  day of any
Settlement Period (which  determination shall be conclusive and binding upon the
parties hereto) by reason of  circumstances  affecting the interbank  Eurodollar
market,  either (a) dollar deposits in the relevant amounts and for the relevant
Settlement  Period are not available,  (b) adequate and reasonable  means do not
exist for ascertaining the Eurodollar Rate for such Settlement Period or (c) the
Eurodollar Rate determined  pursuant hereto does not accurately reflect the cost
to the Transferees (as conclusively  determined by the Administrative  Agent) of
maintaining  Receivables during such Settlement Period, the Administrative Agent
shall  promptly  give  telephonic  notice of such  determination,  confirmed  in
writing,  to the Transferor  prior to the first day of such  Settlement  Period.
Until such notice has been  withdrawn by the  Administrative  Agent,  no further
Tranches   shall  be  funded  or  maintained  at  the   Eurodollar   Rate.   The
Administrative  Agent agrees to withdraw  any such notice as soon as  reasonably
practicable  after  the  Administrative   Agent  is  notified  of  a  change  in
circumstances which makes such notice inapplicable.

Section 1.09. Breakage Costs. If (a) any payment of Capital as to which Yield is
computed  by  reference  to the  Eurodollar  Rate  or the CP Rate is made by the
Transferor to or for the account of any Transferee other than on the last day of
a Settlement Period, as a result of a payment pursuant to Sections 1.03, 1.10 or
3.03 or for any other reason, or (b) the Termination Date shall occur during any
Settlement  Period, or (c) any payment of Capital is made by the Transferor to a
Transferee  or an  Affected  Person  other than on the last day of a  Settlement
Period  upon a purchase  and  assumption  of rights and  obligations  under this
Agreement as a result of a demand by the Transferor,  the Transferor shall, upon
demand by such Transferee or Affected Person (with a copy to the  Administrative
Agent),  immediately  pay to the  Administrative  Agent for the  account of such
Transferee  or  Affected  Person  (as a  third-party  beneficiary)  any  amounts
required to compensate  such  Transferee or Affected  Person for any  additional
losses,  costs or  expenses  which it may  reasonably  incur as a result of such
payment, including,  without limitation, any loss (including loss of anticipated
profits),   costs  or  expenses   incurred  by  reason  of  the  liquidation  or
reemployment  of deposits or other funds acquired by such Transferee or Affected
Person to fund or maintain its interest in the Receivables.  A certificate as to
such amounts  submitted to the Transferor and the  Administrative  Agent by such
Transferee or Affected  Person shall be conclusive and binding for all purposes,
absent manifest error.

Section 1.10. Retransfer of Receivables. At any time after the Aggregate Capital
is  reduced  to  less  than  15% of the  highest  amount  of  Aggregate  Capital
outstanding on or prior to the Facility Termination Date, the Transferor may, at
its option,  upon not less than thirty days notice to the Administrative  Agent,
accept the retransfer from the Administrative Agent on the


                                        8
<PAGE>


Settlement  Date next succeeding such thirty day period or on such other date as
shall be mutually agreed to by the Administrative  Agent and the Transferor (the
"Retransfer Date"), of all of the Receivables and the Related Security then held
by the  Administrative  Agent  for an  amount  equal  to the  Aggregate  Capital
outstanding as at the  Retransfer  Date (after  application  of all  Collections
received on or prior to such date) plus any accrued and unpaid  Yield as at such
date plus any other amounts then owed by the  Transferor  under this  Agreement.
The  Transferor  shall be  entitled  to all  Collections  from  the  Receivables
retransferred  to the Transferor in accordance  with this Section 1.10 which are
received after the Retransfer Date and the Collection  Agent shall set aside and
hold in  trust  for,  and  shall  pay  forthwith  to,  the  Transferor  all such
Collections.  The terms and  provisions of this  Agreement  shall continue to be
effective or be reinstated, as the case may be, if any such payment is rescinded
or must otherwise be returned to the Transferor upon the insolvency,  bankruptcy
or  reorganization  of the Transferor or an Obligor or otherwise,  all as though
such payment had never been made. On the Retransfer Date:

            (i)   all  of  the  Receivables   and  Related   Security  shall  be
                  retransferred to the Transferor  without any representation or
                  warranty  other  than  that  they are  free  and  clear of any
                  Adverse  Claims  created by or through the  Transferees or the
                  Administrative Agent, and

            (ii)  the  Administrative  Agent  shall  deliver  to the  Transferor
                  executed  UCC-3   Termination   Statements,   terminating  the
                  interest of the  Administrative  Agent in all such Receivables
                  and Related Security,

thereupon the Transferor  shall be vested with all right,  title and interest in
such  Receivables and Related  Security,  and the  Administrative  Agent and the
Transferees  shall no longer  hold any  interest in any of such  Receivables  or
Related Security.

Section 1.11.  Security Interest.  As collateral security for the performance by
the  Transferor of all the terms,  covenants  and  agreements on the part of the
Transferor  (whether as  Transferor  or  otherwise)  to be performed  under this
Agreement  or any  document  delivered  in  connection  with this  Agreement  in
accordance  with the terms thereof,  including the punctual  payment when due of
all  obligations  of the  Transferor  hereunder or  thereunder,  whether for the
payment  of  Capital,  Yield,   indemnification   payments,  fees,  expenses  or
otherwise,  the Transferor  hereby assigns to the  Administrative  Agent for its
benefit and the ratable  benefit of the  Transferees,  and hereby  grants to the
Administrative Agent for its benefit and the ratable benefit of the Transferees,
a present and continuing  security  interest in, all of the Transferor's  right,
title and interest in and to:

(a) the Transfer Agreement, including, without limitation, (i) all rights of the
Transferor  to  receive  moneys due or to become  due under or  pursuant  to the
Transfer  Agreement,  (ii) all security  interests and property  subject thereto
from time to time  purporting  to secure  payment of monies due or to become due
under or pursuant to the Transfer Agreement,  (iii) all rights of the Transferor
to receive  proceeds of any  insurance,  indemnity,  warranty  or guaranty  with
respect to the Transfer  Agreement (except any rights that might arise under the
Support Agreement),  (iv) claims of the Transferor for damages arising out of or
for breach of or default under the Transfer Agreement,  and (v) the right of the
Transferor to compel performance and otherwise exercise all remedies thereunder,


                                        9
<PAGE>


(b) all  Receivables  and the Related  Security  and  Collections  with  respect
thereto, and

(c) to the extent not included in the foregoing,  all proceeds of any and all of
the foregoing.

Section  1.12.  Hedging  Requirements.  (a) The  Transferor  shall  cause  to be
maintained in full force and effect at all times one or more Hedge  Transactions
with  respect  to the  Receivables  (which,  if in the form of one or more  Swap
Agreements, shall have an aggregate notional amount in effect for all such Hedge
Transactions  of not less than 90% but not greater than 110% of the  outstanding
Aggregate Capital). Each Hedge Transaction shall:

            (i)   be entered into with a Hedge Counterparty and be governed by a
                  Hedge Agreement;

            (ii)  have a tenor and amortization  schedule reasonably  acceptable
                  to the Administrative Agent;

            (iii) provide for payments on each Settlement Date (x) which, in the
                  case of a Hedge  Transaction  in the form of a Cap  Agreement,
                  are made only by the Hedge Counterparty to the Transferor,  in
                  an amount  equal to the  current  notional  amount of such Cap
                  Agreement  applied to the excess,  if any, of one-month  LIBOR
                  over the Hedge Rate with respect thereto,  and (y) in the case
                  of a Hedge Transaction in the form of a Swap Agreement, are to
                  be made (1) by the Hedge  Counterparty to the Transferor in an
                  amount  equal  to the  current  notional  amount  of the  Swap
                  Agreement   applied  to  one-month   LIBOR,  and  (2)  by  the
                  Transferor  to the Hedge  Counterparty  in an amount  equal to
                  such  notional  amount  applied to the Hedge Rate with respect
                  thereto (which amounts may be netted, with the net amount paid
                  by one party to the other); and

            (iv)  require the Hedge  Counterparty  to find a  replacement  Hedge
                  Counterparty  to  execute  a new  Hedge  Agreement  reasonably
                  satisfactory  to the Agent  within  ten  Business  Days of any
                  downgrade of the ratings of the Hedge  Counterparty  below the
                  levels set forth in the  definition  of "Hedge  Counterparty",
                  which  replacement must meet the  qualifications  set forth in
                  the definition of "Hedge Counterparty."

(b)      In the event that a Hedge  Counterparty no longer satisfies the ratings
         requirement  specified  in the  definition  thereof and does not itself
         find a  replacement  acceptable  to the  Administrative  Agent that has
         executed a Hedge  Agreement as required under Section  1.12(a)(v),  the
         Transferor shall, within 15 Business Days following the failure of such
         Hedge  Counterparty  to satisfy  such  ratings  requirement,  provide a
         substitute  Person  satisfying  the  requirements  of the definition of
         "Hedge  Counterparty" to be substituted as the Hedge Counterparty under
         the  applicable  Hedge  Agreement(s)  or to  enter  into  a  new  Hedge
         Agreement reasonably satisfactory to the Administrative Agent.

(c)      The  Transferor  hereby  agrees  that it shall not,  without  the prior
         written  consent  of the  Administrative  Agent,  exercise  any  rights
         (including  termination  rights)  under  any Hedge  Agreement  or Hedge
         Transaction  that could  reasonably be expected to adversely effect the
         right of the Transferees to receive any payment  hereunder or under any
         such Hedge  Agreement;  provided,  that  nothing  herein shall have the
         effect of releasing the Transferor from any of its


                                       10
<PAGE>


         obligations under any Hedge Agreement or any Hedge Transaction,  nor be
         construed  as  requiring  the  consent  of  the   Transferees   or  the
         Administrative  Agent for the performance by the Transferor of any such
         obligations.

(d)      The Transferor  shall not execute any  assignment,  assumption,  credit
         support   annex,   extension,    amendment,    modification,    waiver,
         confirmation,  designation of "Reference  Market  Makers,"  schedule or
         other agreement in connection  with any Hedge  Agreement  without first
         obtaining the prior written consent of the Administration Agent. A copy
         of any such item  received by the  Transferor,  together with a copy of
         any  other  notice  or  communication  received  by the  Transferor  in
         connection   with  any  Hedge  Agreement  shall  be  forwarded  to  the
         Administrative Agent promptly on receipt.  Notice of (i) any assignment
         or transfer by a Hedge Counterparty of any of its rights or obligations
         under any Hedge  Agreement (ii) any assumption,  amendment,  extension,
         modification, waiver or event of default under any Hedge Agreement, and
         (iii) the Hedge  Counterparties  entering into any new Hedge  Agreement
         pursuant  to this  Section  1.12  shall be given by the  Administrative
         Agent to each Rating Agency.

(e)      The Transferor or the Servicer on its behalf shall promptly  forward to
         the  Administrative  Agent a copy of any notice  received  from a Hedge
         Counterparty  relating to any  downgrade,  withdrawal  or suspension of
         such Hedge  Counterparty's (or such Hedge  Counterparty's  guarantors')
         ratings.

(f)      The  Collection  Agent  shall  provide  the  Administrative  Agent with
         written notice confirming the amounts,  if any, to be paid to or by the
         Hedge  Counterparty on each  Settlement Date and any early  termination
         date (which notice may be contained in the Transferor Report).

                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES;
                            COVENANTS; TRIGGER EVENTS

Section 2.01.  Representations and Warranties;  Covenants. The Transferor hereby
makes the  representations  and  warranties,  and hereby  agrees to perform  and
observe the covenants, set forth in Exhibits III and IV, respectively, hereto.

Section 2.02.  Trigger Events. If any of the Trigger Events set forth in Exhibit
V hereto shall occur and be continuing,  the Administrative Agent may, by notice
to the Transferor, take either or both of the following actions: (x) declare the
Termination Date to have occurred,  and (y) designate  another Person to succeed
the Originator as the Collection Agent; provided,  that,  automatically upon the
occurrence of any event (without any  requirement for the passage of time or the
giving  of  notice)  described  in  paragraph  (h)  or  (m) of  Exhibit  V,  the
Termination  Date shall  occur,  the  Originator  (if it is then  serving as the
Collection Agent) shall cease to be the Collection Agent, and the Administrative
Agent  or its  designee  shall  become  the  Collection  Agent.  Upon  any  such
declaration  or  designation  or  upon  any  such  automatic  termination,   the
Transferees and the  Administrative  Agent shall have, in addition to the rights
and  remedies  which they may have under this  Agreement,  all other  rights and
remedies provided after default under the UCC of the appropriate jurisdiction or
jurisdictions and under other applicable law, which rights and remedies shall be
cumulative.


                                       11
<PAGE>


                                   ARTICLE III

                        INDEMNIFICATION, REPURCHASE, ETC.

Section 3.01.  Indemnities by the Transferor.  Without limiting any other rights
that the  Administrative  Agent  or any  Transferee  or any of their  respective
Affiliates or its agents (each,  an  "Indemnified  Party") may have hereunder or
under applicable law, the Transferor hereby agrees to indemnify each Indemnified
Party from and  against any and all claims,  losses and  liabilities  (including
reasonable attorneys' fees) (all of the foregoing being collectively referred to
as "Indemnified Amounts") arising out of or resulting from this Agreement or the
use of  proceeds  of any  Transfer  or the  acceptance  of the  transfer  of the
Receivables  or in  respect  of any  Receivable,  Related  Contract  or  Related
Security,  excluding,  however,  (a) Indemnified Amounts to the extent resulting
from gross  negligence  or willful  misconduct  on the part of such  Indemnified
Party,  (b)  recourse  (except  as  otherwise   specifically  provided  in  this
Agreement)  for  uncollectible  Receivables or (c) any income taxes or franchise
taxes imposed on such Indemnified  Party by the  jurisdiction  under the laws of
which such Indemnified Party is organized or any political  subdivision thereof,
arising  out of or as a  result  of  this  Agreement  or the  acceptance  of the
transfer of the Receivables or in respect of any Receivable, Related Contract or
Related  Security.  Without  limiting  or being  limited by the  foregoing,  the
Transferor  shall pay on demand to each  Indemnified  Party any and all  amounts
necessary  to  indemnify  such  Indemnified  Party from and  against any and all
Indemnified Amounts relating to or resulting from any of the following:

(i)      any  representation or warranty or statement made by the Transferor (or
         any of its officers) under or in connection with this Agreement and the
         other  Transaction  Documents  which shall have been  incorrect  in any
         material respect when made;

(ii)     the failure by the Transferor to comply with any  applicable  law, rule
         or regulation  (including,  without limitation,  usury or consumer law)
         with  respect to any  Receivable,  the related  Contract or the Related
         Security;  or the failure of any Receivable or the related  Contract to
         conform to any such applicable law, rule or regulation;

(iii)    the  failure  of the  Administrative  Agent  (for  the  benefit  of the
         Transferees) to acquire a valid and perfected  security interest in the
         Receivables and the Related Security and Collections in respect thereof
         under  Article 9 of the UCC of any  applicable  jurisdiction,  free and
         clear of any Adverse Claim;

(iv)     the failure to have filed, or any delay in filing, financing statements
         or  other  similar  instruments  or  documents  under  the  UCC  of any
         applicable  jurisdiction  or other  applicable laws with respect to any
         Receivables or the Related Security and Collections in respect thereof,
         whether at the time of the  transfer of an  interest  therein or at any
         subsequent time;

(v)      any  dispute,  claim,  offset  or  defense  (other  than  discharge  in
         bankruptcy  of the  Obligor)  of the  Obligor  to  the  payment  of any
         Receivable  (including,  without  limitation,  a defense  based on such
         Receivable or the related Contract not being a legal, valid and binding
         obligation of such Obligor  enforceable  against it in accordance  with
         its



                                       12
<PAGE>

         terms),  or any  other  claim  resulting  from the lease or sale of the
         related  Equipment  or  services  related  to  such  Receivable  or the
         furnishing  or failure to furnish such  Equipment or other  services or
         alleging  violation by the  Transferor of any laws in  connection  with
         such lease or sale activities;

(vi)     any failure of the  Transferor to perform its duties or  obligations in
         accordance  with the  provisions  hereof or to  perform  its  duties or
         obligations under the Related Contracts;

(vii)    any  products  or  personal  liability  claim  arising  out  of  or  in
         connection  with  any  Equipment  or  other  merchandise,  services  or
         activities which are the subject of any Related Contract;

(viii)   the  commingling by the Transferor or any of its Affiliates  (including
         without  limitation the Originator in its capacity as Collection Agent)
         of Collections of Receivables at any time with other funds;

(ix)     any  investigation,  litigation or proceeding related to this Agreement
         or the  use  of  proceeds  of any  Transfer  or the  acceptance  of the
         transfer  of  Receivables  or in  respect  of any  Receivable,  Related
         Security or Related Contract; or

(x)      any fine, penalty, tax or other charge asserted against any Indemnified
         Party by any  governmental  authority  or agency  or any  other  Person
         resulting  from any  Obligor's  use,  possession  or  ownership  of any
         Equipment.

(xi)     any failure of the Transferor or any Hedge  Transactions to comply with
         the requirements of Section 1.12.

Section 3.02.       [RESERVED]

Section 3.03.  Repurchase of Ineligible and Certain Other  Receivables.  (a) The
Transferor  shall,  upon  not less  than  two  Business  Days'  notice  from the
Administrative  Agent,  repurchase (at the repurchase price specified in Section
3.03(b) below) on the next succeeding Settlement Date:

            (i)   any Receivable that was not an Eligible Receivable at the time
                  of the related Transfer; or

            (ii)  any Receivable as to which the  Administrative  Agent (for the
                  benefit  of the  Transferees)  does not have a first  priority
                  perfected interest free and clear of any Adverse Claim.

(b)      Each  repurchase  of a Receivable  under  Section  3.03(a)  above shall
         include the  repurchase of all other  Receivables  relating to the same
         Contract.  The  repurchase  price  shall  be an  amount  equal  to  the
         Outstanding  Balance of the related  Contract  plus  accrued but unpaid
         Yield allocable thereto to the date of repurchase.  The proceeds of any
         such  repurchase  shall be deemed to be a Collection in respect of such
         Receivables received during the Settlement Period


                                       13
<PAGE>

         preceding such  Settlement  Date and the amount of each such Collection
         shall be applied as provided in Section 1.03.

                                   ARTICLE IV

                          ADMINISTRATION AND COLLECTION
                                 OF RECEIVABLES

Section 4.01. Designation of Collection Agent. The servicing, administration and
collection  of the  Receivables  shall be conducted by the  Collection  Agent so
designated  hereunder from time to time.  Until the  Administrative  Agent gives
notice to the  Transferor of the  designation  of a new  Collection  Agent,  the
Originator is hereby  designated as, and hereby agrees to perform the duties and
obligations of, the Collection  Agent pursuant to the terms hereof.  At any time
following the occurrence of a Trigger Event or a Servicer Termination Event, the
Administrative  Agent may  designate as Collection  Agent any Person  (including
itself) to succeed the  Originator or any successor  Collection  Agent,  if such
Person shall consent and agree to the terms hereof.  The  Collection  Agent may,
with the prior consent of the Administrative  Agent,  subcontract with any other
Person for the servicing,  administration or collection of the Receivables.  Any
such  subcontract  shall  not  affect  the  Collection   Agent's  liability  for
performance of its duties and obligations pursuant to the terms hereof.

Section 4.02. Duties of Collection Agent. (a) The Collection Agent shall take or
cause to be taken all such  actions as may be  necessary or advisable to collect
each Receivable from time to time, all in accordance with applicable laws, rules
and regulations,  with reasonable care and diligence, and in accordance with the
Credit and Collection Policy. The Transferor and the Administrative Agent hereby
appoint the Collection Agent,  from time to time designated  pursuant to Section
4.01,  as  agent  for  themselves  and  for the  Transferees  to  enforce  their
respective rights and interests in the Receivables, the Related Security and the
related Contracts.  In performing its duties as Collection Agent, the Collection
Agent  shall  exercise  the same care and apply  the same  policies  as it would
exercise  and  apply if it owned  such  Receivables  and  shall  act in the best
interests of the Transferor and the Transferees.

(b) The Collection Agent shall administer the Collections in accordance with the
procedures described in Section 1.03.

(c) The  Collection  Agent  shall  hold in  trust  for the  Transferor  and each
Transferee,  in  accordance  with their  respective  interests,  all  documents,
instruments and records (including, without limitation, computer tapes or disks)
which evidence or relate to Receivables.

(d) The Collection Agent shall, as soon as practicable  following receipt,  turn
over to the Transferor any cash collections or other cash proceeds received with
respect to  receivables  not  transferred  to the  Administrative  Agent and the
Transferees pursuant to this Agreement.

(e) The  Collection  Agent  shall,  from  time to  time  at the  request  of the
Administrative  Agent,  furnish to the Administrative  Agent (promptly after any
such  request) a  calculation  of the amounts  set aside for the  Administrative
Agent and the Transferees pursuant to Section 1.03.


                                       14
<PAGE>


(f) Prior to the 13th  calendar day of each month,  the  Collection  Agent shall
prepare and forward to the Administrative  Agent a Transferor Report relating to
the Receivables outstanding on the last day of the immediately preceding month.

(g) For any Settlement  Period,  if the  Collection  Agent  determines  that any
Periodic  Payment (or portion  thereof) which was due and payable  pursuant to a
Related Contract during such Settlement Period was not received prior to the end
of such Settlement  Period, the Collection Agent may make an Servicer Advance in
an amount up to the  amount of such  delinquent  Periodic  Payment  (or  portion
thereof),  to the extent that in its sole  discretion it determines  that it can
recover such amount from subsequent Collections under such Related Contract. Any
Servicer  Advances shall be treated by the Collection  Agent as Collections  and
made  available for  distribution  on each  Settlement  Date in accordance  with
Section  1.03(b).  Upon the  occurrence  of a  Servicer  Termination  Event  and
following the establishment of the Collection  Account pursuant to Section 4.08,
the  Collection  Agent shall deposit all Servicer  Advances into the  Collection
Account  within two (2) Business Days of the date on which the related  Periodic
Payment (or portion thereof) first became delinquent. The Collection Agent shall
be entitled to be reimbursed for Servicer  Advances pursuant to Section 1.03(b),
subject to the priority of payments set forth therein.

Section 4.03.       Certain Rights of the Administrative Agent.

         Following the  occurrence of a Trigger Event,  a Potential  Trigger
Event, a Servicer  Termination Event or a Potential Servicer Termination Event,

(a) The Administrative Agent may direct the Obligors that all payments under the
Related Contracts be made directly to the Administrative Agent or its designee.

(b) At the Administrative  Agent's request and at the Transferor's  expense, the
Transferor shall notify each Obligor of the interest of the Administrative Agent
in the  Receivables  under this  Agreement  and  direct  that  payments  be made
directly to the Administrative Agent or its designee.

(c) At the Administrative  Agent's request and at the Transferor's  expense, the
Transferor  and the  Collection  Agent shall (A) assemble all of the  documents,
instruments and other records (including, without limitation, computer tapes and
disks) that evidence or relate to the Receivables and the Related  Contracts and
Related  Security,  or that are otherwise  necessary or desirable to collect the
Receivables,  and shall make the same available to the Administrative Agent at a
place selected by the  Administrative  Agent or its designee,  and (B) segregate
all  cash,  checks  and  other  instruments  received  by it  from  time to time
constituting Collections in a manner acceptable to the Administrative Agent and,
promptly  upon  receipt,  remit all such  cash,  checks  and  instruments,  duly
indorsed or with duly executed  instruments of transfer,  to the  Administrative
Agent or its designee.

(d) The Transferor authorizes the Administrative Agent to take any and all steps
in the  Transferor's  name and on behalf of the Transferor that are necessary or
desirable,  in the determination of the Administrative Agent, to collect amounts
due  under  the  Receivables,   including,  without  limitation,  endorsing  the
Transferor's name on checks and other instruments


                                       15
<PAGE>

representing  Collections and enforcing the Receivables and the Related Security
and related Contracts.

Section 4.04. Rights and Remedies.  (a) If the Collection Agent fails to perform
any of its obligations under this Agreement,  the Administrative  Agent may (but
shall  not be  required  to)  itself  perform,  or cause  performance  of,  such
obligation;  and the  Administrative  Agent's  costs and  expenses  incurred  in
connection therewith shall be payable by the Transferor (if the Collection Agent
that fails to so perform is the Transferor or its designee).

(b) The Transferor and the Originator shall perform their respective obligations
under the Related  Contracts  to the same extent as if the  Receivables  had not
been transferred and the exercise by the  Administrative  Agent on behalf of the
Transferees  of  their  rights  under  this  Agreement  shall  not  release  the
Collection  Agent or the Transferor from any of their duties or obligations with
respect to any  Receivables  or Related  Contracts.  Neither the  Administrative
Agent nor the Transferees shall have any obligation or liability with respect to
any  Receivables  or Related  Contracts,  nor shall any of them be  obligated to
perform the obligations of the Transferor thereunder.

(c) In the event of any conflict  between the  provisions  of Article IV of this
Agreement  and Article VI of the  Transfer  Agreement,  the  provisions  of this
Agreement shall control.

      Section 4.05. Further Actions Evidencing Transfers.  The Originator agrees
from time to time, at its expense,  to promptly  execute and deliver all further
instruments  and  documents,  and to  take  all  further  actions,  that  may be
reasonably  necessary  or  desirable,  or  that  the  Administrative  Agent  may
reasonably request,  to perfect,  protect or more fully evidence the Receivables
transferred hereunder,  or to enable the Transferees or the Administrative Agent
to exercise and enforce their respective rights and remedies hereunder.  Without
limiting  the  foregoing,   the   Originator   will  upon  the  request  of  the
Administrative  Agent  (i)  execute  and file  such  financing  or  continuation
statements,  or amendments  thereto,  and such other  instruments and documents,
that may be reasonably necessary or desirable,  or that the Administrative Agent
may  reasonably  request,  to perfect,  protect or evidence  such  interests  in
Receivables; (ii) segregate the Related Contracts and other records in its lease
files pertaining to each  Receivable;  and (iii) mark its master data processing
records evidencing such Receivables and the Related Contracts, in each case in a
manner reasonably acceptable to the Administrative  Agent,  evidencing that such
Receivables have been transferred.

      Section 4.06.  Covenants of the Collection  Agent and the Originator.  (a)
Audits.  The Collection  Agent will,  from time to time during regular  business
hours as requested by the Administrative Agent, permit the Administrative Agent,
or its agents or  representatives  (including  independent  public  accountants,
which may be the Collection  Agent's  independent  public  accountants),  (i) to
conduct periodic audits of the Receivables, the Related Security and the related
books and records  and  collections  systems of the  Collection  Agent,  (ii) to
examine and make copies of and abstracts  from all books,  records and documents
(including,  without limitation,  computer tapes and disks) in the possession or
under the control of the Collection  Agent relating to the  Receivables  and the
Related Security,  including,  without  limitation,  the Related Contracts,  and
(iii) to visit the offices and properties of the Collection Agent for the


                                       16
<PAGE>


purpose of  examining  such  materials  described  in clause (ii) above,  and to
discuss  matters  relating to the  Receivables  and the Related  Security or the
Collection Agent's  performance  hereunder with any of the officers or employees
of the Collection Agent having knowledge of such matters.

(a) Change in Credit and Collection  Policy.  The  Originator  will not make any
change in the Credit and Collection Policy that would impair the  collectibility
of any  Receivable  or  the  ability  of the  Originator  (if  it is  acting  as
Collection Agent) to perform its obligations under this Agreement.

      Section 4.07.  Indemnities by the Collection  Agent.  Without limiting any
other  rights that the  Administrative  Agent,  any  Transferee  or any of their
respective  Affiliates (each, a "Special  Indemnified Party") may have hereunder
or under  applicable law, and in  consideration of its appointment as Collection
Agent, the Collection Agent hereby agrees to indemnify each Special  Indemnified
Party from and  against any and all claims,  losses and  liabilities  (including
reasonable attorneys' fees) (all of the foregoing being collectively referred to
as "Special  Indemnified  Amounts")  arising out of or resulting from any of the
following  (excluding,  however,  (a) Special  Indemnified Amounts to the extent
resulting  from  gross  negligence  or  willful  misconduct  on the part of such
Special Indemnified Party, (b) recourse for uncollectible Receivables or (c) any
income taxes or any other tax or fee measured by income incurred by such Special
Indemnified  Party  arising  out of or as a  result  of  this  Agreement  or the
ownership of interests in the Receivables or in respect of any Receivable or any
Contract):

(i)      any  representation or warranty or statement made or deemed made by the
         Collection Agent under or in connection with this Agreement which shall
         have been incorrect in any material respect when made;

(ii)     the failure by the Collection  Agent to comply with any applicable law,
         rule or regulation  with respect to any Receivable or Contract;  or the
         failure of any Receivable or Contract to conform to any such applicable
         law, rule or regulation;

(iii)    the failure to have filed, or any delay in filing, financing statements
         or  other  similar  instruments  or  documents  under  the  UCC  of any
         applicable  jurisdiction  or other  applicable laws with respect to any
         Receivables,  the  Related  Contracts  and  the  Related  Security  and
         Collections in respect thereof,  whether at the time of any transfer or
         reinvestment or at any subsequent time;

(iv)     any  failure  of  the  Collection   Agent  to  perform  its  duties  or
         obligations in accordance with the provisions of this Agreement;

(v)      the commingling of Collections at any time by the Collection Agent with
         other funds other than as specifically permitted herein;

(vi)     any action or omission by the  Collection  Agent  reducing or impairing
         the rights of the  Transferees  with respect to any  Receivable  or the
         value of any Receivable;


                                       17
<PAGE>


(vii)    any  Collection  Agent Fees or other costs and expenses  payable to any
         replacement Collection Agent, to the extent in excess of the Collection
         Agent Fees payable to the Collection Agent hereunder; or

(viii)   any claim brought by any Person other than a Special  Indemnified Party
         arising from any activity by the Collection  Agent or its Affiliates in
         servicing, administering or collecting any Receivable.

(ix)     any failure of the Transferor or any Hedge  Transactions to comply with
         the requirements of Section 1.12.

      Section 4.08.  Collection Account  Agreement.  Promptly (and, in any case,
within 10 days) following the occurrence of a Servicer  Termination  Event,  the
Collection Agent shall establish an account (the  "Collection  Account") with an
office or branch of a depository  institution or trust company  organized  under
the laws of the United States or any one of the states  thereof (or any domestic
branch of a foreign bank) and otherwise  acceptable to the Administrative  Agent
(the "Collection  Account Bank").  The Collection Account shall be maintained in
the name of the  Administrative  Agent as agent for the Transferees and shall be
at all times subject to a Collection Account Agreement.  Following establishment
of the Collection  Account,  the Collection Agent shall (i) transfer or cause to
be  transferred,  all  Collections  on deposit in each  Lock-Box  Account to the
Collection  Account  not later than the close of  business  on the second  (2nd)
Business Day after such Collections are received in such Lock-Box  Account,  and
(ii) promptly (but in no event later than two (2) Business Day after the receipt
thereof)  deposit all  Collections  received  directly  by it in the  Collection
Account.  Neither the  Transferor  nor the  Collection  Agent  shall  deposit or
otherwise  credit,  or cause or permit to be so deposited  or  credited,  to the
Collection Account cash or cash proceeds other than Collections.

                                    ARTICLE V

                                  MISCELLANEOUS

      Section  5.01.  Amendments,  Etc.  No  failure or delay on the part of the
Administrative  Agent or any Transferee in exercising any power, right or remedy
under this Agreement shall operate as a waiver thereof,  nor shall any single or
partial  exercise of any such power,  right or remedy preclude any other further
exercise thereof or the exercise of any other power, right or remedy. The rights
and remedies herein provided shall be cumulative and  nonexclusive of any rights
or remedies  provided by law. Any provision of this Agreement may be amended if,
but only if, such amendment is in writing and is signed by the  Transferor,  the
Collection Agent, the Administrative  Agent and the Required Transferees and, if
such amendment is material,  the Rating Agencies,  to the extent required by the
terms and  provisions of the commercial  paper program of Gemini,  have provided
written  confirmation  that such  amendment  will not result in a  reduction  or
withdrawal of the rating of the Commercial  Paper;  provided that the consent of
all of the Transferees hereto shall be required for any amendment,  modification
or  supplement  relating  to (i)  the  definitions  of  "Eligible  Receivables,"
"Facility  Termination  Date,"  "Required   Transferees,"   "Required  Balance,"
"Discount"  and  "Applicable  Percentage"  and any  defined  terms  incorporated
therein,  (ii) the reduction or  postponement of the time for payment of any fee
or other  amount  payable  to or on behalf  of such  Transferees  or (iii)  this
Section 5.01.


                                       18
<PAGE>


      Section 5.02. Notices, Etc. All notices,  demands and other communications
provided for hereunder  shall,  unless  otherwise  stated herein,  be in writing
(which shall include electronic  transmission),  shall be personally  delivered,
express couriered,  electronically  transmitted (in which case a hard copy shall
also be sent by regular  mail) or mailed by  registered  or  certified  mail and
shall, unless otherwise expressly provided herein, be effective when received at
the address  specified  below for the listed parties or at such other address as
shall be specified in a written notice furnished to the other parties hereunder.

         If to the Transferor:

                  IKON FUNDING-3, LLC
                  1738 Bass Road
                  Macon, Georgia 31210
                  Attention:        Russell Slack, President
                  Telephone:        (912) 471-2384
                  Telecopy:         (912) 471-2394

         If to the Originator or Collection Agent:

                  IOS CAPITAL, LLC
                  1738 Bass Road
                  Macon, Georgia 31210
                  Attention:        Harry G. Kozee
                  Telephone:        (912) 471-2306
                  Telecopy:         (912) 471-2388
         with a copy to:

                  IKON OFFICE SOLUTIONS, INC.
                  70 Valley Stream Parkway
                  Malvern, Pennsylvania 19355
                  Attention:        Jack Quinn
                  Telephone:        (610) 408-7165
                  Telecopy:         (610) 408-7022

         If to the Administrative Agent or the Alternate Transferees:

                  DEUTSCHE BANK AG, NEW YORK BRANCH
                  31 West 52nd Street
                  New York, NY 10017
                  Attention:        Margot Pilla
                  Telephone:        (212) 469-4663
                  Telecopy:         (212) 469-7973

                                       19
<PAGE>



                  with a copy to:

                  DEUTSCHE BANK ALEX. BROWN INC.
                  31 West 52nd Street
                  New York, NY 10017
                  Attention:        David McCollum
                  Telephone:        (212) 469-8925
                  Telecopy:         (212) 469-5160


         If to Gemini:

                  GEMINI SECURITIZATION CORP.
                  J. H.  Management Corporation
                  c/o Ropes & Gray
                  One International Place, Rm.  615
                  Boston, MA 02110
                  Attention:        President
                  Telephone:        (617) 951-7690
                  Telecopy:         (617) 951-7050

         With a copy to the Administrative Agent

      Section 5.03.  Assignability.  (a) This  Agreement  and each  Transferee's
rights and obligations  herein  (including  rights in the Receivables)  shall be
assignable  by  each   Transferee   and  its   successors  and  assigns  if  the
Administrative  Agent shall have received  confirmation  from each of the Rating
Agencies that such  assignment will not result in the withdrawal or downgrade of
the then-current  ratings of Gemini's  outstanding  Commercial Paper;  provided,
that no such confirmation shall be required if such assignment is made by Gemini
to any other  Transferee  hereunder  or to any  Transferee  that is a party to a
liquidity facility supporting the Commercial Paper. Each assignor of Receivables
or any interest therein shall notify the Administrative Agent and the Transferor
of any such assignment;  provided, that no such notice shall be required if such
assignment  is  made by  Gemini  to any  other  Transferee  hereunder  or to any
Transferee  that is a party to a liquidity  facility  supporting  the commercial
paper notes of Gemini.  Each assignor of Receivables may, in connection with the
assignment  or  participation,  disclose  to the  assignee  or  participant  any
information,  relating to the Transferor or the Receivables, which was furnished
to such  assignor  by or on behalf of the  Transferor  or by the  Administrative
Agent; provided that, prior to any such disclosure,  the assignee or participant
agrees to preserve the confidentiality of any confidential  information relating
to the Transferor received by it from any of the foregoing entities.

(b) This Agreement and the rights and  obligations of the  Administrative  Agent
herein shall be assignable by the  Administrative  Agent and its  successors and
assigns;  provided  that  any  costs  incurred  by the  Administrative  Agent in
connection with such assignment  shall be for the account of the  Administrative
Agent.


                                       20
<PAGE>


(c) The  Transferor  may not assign its rights or  obligations  hereunder or any
interest herein without the prior written consent of the  Administrative  Agent,
which consent will not be unreasonably withheld.

(d) Without  limiting any other rights that may be  available  under  applicable
law,  the rights of the  Transferees  may be enforced  through  them or by their
agents.

      Section 5.04. Costs,  Expenses and Taxes. (a) In addition to the rights of
indemnification  granted under Section 3.01 hereof, the Transferor agrees to pay
on demand all costs and expenses of the Administrative Agent and the Transferees
and their respective  Affiliates in connection with the preparation,  execution,
delivery,   amendment  and  administration   (including   periodic  auditing  of
Receivables)  of this  Agreement,  any transfer  agreement or similar  agreement
relating to the transfer of interests in Receivables and the other documents and
agreements  to  be  delivered  hereunder  and  thereunder,   including,  without
limitation,  the reasonable fees and  out-of-pocket  expenses of counsel for the
Administrative Agent, the Transferees and their respective Affiliates and agents
with respect thereto and with respect to advising the Administrative  Agent, the
Transferees  and their  respective  Affiliates and agents as to their rights and
remedies  under this  Agreement  and all costs and expenses,  if any  (including
reasonable  counsel  fees  and  expenses)  of  the  Administrative   Agent,  the
Transferees and their respective  Affiliates and agents,  in connection with the
enforcement  of this  Agreement,  and the other  documents and  agreements to be
delivered hereunder.

(b) The Transferor  shall pay any and all stamp and other taxes and fees payable
in  connection  with the  execution,  delivery,  filing  and  recording  of this
Agreement or the other  documents or agreements to be delivered  hereunder.  The
Transferor  agrees to save each Indemnified  Party harmless from and against any
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes and fees,  any and all stamp and other taxes and fees  payable in
connection with the execution,  delivery, filing and recording of this Agreement
or the other documents or agreements to be delivered  hereunder.  The Transferor
agrees to save each Indemnified  Party harmless from and against any liabilities
with  respect to or  resulting  from any delay in paying or omission to pay such
taxes and fees.

      Section 5.05.  No  Proceedings;  Limitation  on Payments.  (a) Each of the
Originator,  the Transferor,  the  Administrative  Agent, each Transferee,  each
assignee of a Receivable  or any  interest  therein and each entity which enters
into a commitment to acquire Receivables or interests therein hereby agrees that
it will not institute against, or join any other person in instituting  against,
Gemini any  proceeding  of the type referred to in paragraph (h) of Exhibit V so
long as any  Commercial  Paper issued by Gemini shall be  outstanding  and there
shall  not have  elapsed  one year  plus one day since the last day on which any
such Commercial Paper shall have been outstanding.  Each of the Originator,  the
Administrative  Agent,  each  Transferee,  each  assignee of a Receivable or any
interest  therein and each entity  which  enters  into a  commitment  to acquire
Receivables  or  interests  therein  hereby  agrees  that it will not  institute
against,  or join any other person in  instituting  against,  the Transferor any
proceeding  of the type referred to in paragraph (h) of Exhibit V so long as any
Commercial  Paper issued by Gemini to finance the Capital  shall be  outstanding
and  there  shall not have  elapsed  one year plus one day since the last day on
which any such Commercial Paper shall have been outstanding.


                                       21
<PAGE>


(b) Notwithstanding anything in this Agreement or any other Transaction Document
to the contrary,  Gemini shall have no obligation to pay any amount  required to
be paid by it  hereunder  or  thereunder  in excess of any amount  available  to
Gemini after paying or making provision for the payment of its Commercial Paper.
All payment  obligations of Gemini  hereunder are contingent on the availability
of funds in excess of the amounts  necessary to pay its  Commercial  Paper;  and
each of the Transferor,  the Collection Agent, the Administrative  Agent and the
Transferees  agree that they shall not have a claim under Section  101(5) of the
Bankruptcy  Code if and to the extent that any such payment  obligation  exceeds
the  amount  available  to  Gemini  to pay such  amount  after  paying or making
provision for the payment of its Commercial Paper.  Notwithstanding  anything in
this Agreement or any other Transaction Document to the contrary, the Transferor
shall have no obligation  to pay any amount  required to be paid by it hereunder
or thereunder in excess of any amount  available to the Transferor  after paying
or  making  provision  for  the  payment  of the  items  set  forth  in  Section
1.03(c)(i),  (ii) and the first clause of (iii). All payment  obligations of the
Transferor  hereunder are contingent on the  availability  of funds in excess of
the amounts  necessary to pay such items; and each of the Collection  Agent, the
Administrative  Agent,  the Transferees and the Affected Persons agree that they
shall not have a claim under Section 101(5) of the Bankruptcy Code if and to the
extent that any such  payment  obligation  exceeds the amount  available  to the
Transferor to pay such amounts after paying or making  provision for the payment
thereof.

(c) The  provisions of this Section 5.05 shall survive any  termination  of this
Agreement.

      Section 5.06.  Confidentiality.  Unless  otherwise  required by applicable
law, the  Transferor  agrees to maintain the  confidentiality  of this Agreement
(and all drafts  thereof) in  communications  with third parties and  otherwise;
provided,  that this  Agreement  may be  disclosed  to (a) third  parties to the
extent  such   disclosure   is  made   pursuant  to  a  written   agreement   of
confidentiality   in  form  and  substance   reasonably   satisfactory   to  the
Administrative  Agent,  and (b) the  Transferor's  legal counsel and auditors if
they agree to hold it confidential.

      Section  5.07.  GOVERNING  LAW. THIS  AGREEMENT  SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE  WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT  GIVING
EFFECT TO THE CONFLICT OF LAWS  PRINCIPLES  THEREOF),  EXCEPT TO THE EXTENT THAT
THE  PERFECTION  OF THE  INTERESTS  OF THE  TRANSFEREES  IN THE  RECEIVABLES  OR
REMEDIES  HEREUNDER,  IN  RESPECT  THEREOF,  ARE  GOVERNED  BY  THE  LAWS  OF  A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.

      Section 5.08. Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken  together  shall  constitute one and the
same agreement.  Delivery of an executed counterpart of a signature page to this
Agreement  by facsimile  shall be  effective as delivery of a manually  executed
counterpart of this Agreement.

      Section 5.09. Termination. (a) Except as provided in subsection (b) below,
this Agreement shall  terminate on the Termination  Date. Upon the occurrence of
the Termination


                                       22
<PAGE>


Date, the Administrative Agent will, at the Transferor's cost and expense,  take
such actions as are  reasonably  requested to terminate  this  Agreement and the
Transfer  contemplated  thereby (including,  without  limitation,  executing UCC
termination statements).

(b) The provisions of Sections 1.06,  1.07,  1.08,  1.09, 3.01, 4.07, 5.04, 5.05
and 5.06 shall survive any termination of this Agreement.

      Section 5.10. Tax Treatment. It is the intention of the Transferor and the
Administrative Agent that for federal,  state and local income and franchise tax
purposes,  the  Capital  will be  treated as  evidence  of  indebtedness  of the
Transferor secured by the Receivables,  the Related Security and Collections and
other proceeds thereof. The Transferor, the Administrative Agent, Gemini and the
other Transferees,  by entering into this Agreement, intend to treat the Capital
as indebtedness.

      Section 5.11.  Agent Conflict  Waiver.  The  Administrative  Agent acts in
various  capacities  with  respect  to the  maintenance  and  administration  of
Gemini's  commercial  paper  program  (including,  as  administrative  agent for
Gemini,  as  provider  of other  backup  facilities,  and as a provider of other
services  or  facilities  from time to time,  the  "Agent  Roles").  Each of the
parties  hereto  hereby  acknowledges  and  consents to any and all Agent Roles,
waives  any  objections  it may have to any  actual  or  potential  conflict  of
interest caused by the Administrative  Agent acting as the administrative  agent
for Gemini or as a related  Alternate  Transferee  or as a  liquidity  or credit
support  provider  under  Gemini's  commercial  paper  program  and acting as or
maintaining any of the Agent Roles, and agrees that in connection with any Agent
Role,  the  Administrative  Agent may take,  or refrain from taking,  any action
which it in its discretion deems appropriate.

         The provisions of this Agreement and all related Transaction  Documents
shall be construed to further such intentions of the parties hereto.



                            [signature pages follow]






                                       23
<PAGE>




         IN WITNESS  WHEREOF,  the  parties  have caused  this  Agreement  to be
executed by their respective officers thereunto duly authorized,  as of the date
first above written.

TRANSFEROR:                         IKON FUNDING-3 LLC


                                    By:  IKON FUNDING, INC., its Manager

                                     By: /s/ Kathleen Burns
                                         ---------------------------
                                          Name:  Kathleen Burns
                                          Title:    Treasurer


                                      S-1

<PAGE>



ORIGINATOR AND                      IOS CAPITAL, LLC
COLLECTION AGENT:

                                     By: /s/ Russell Slack
                                         --------------------------
                                         Name: Russell Slack
                                         Title:   President


                                      S-2

<PAGE>



CONDUIT TRANSFEREE:                 GEMINI SECURITIZATION CORP.


                                    By: /s/ R. Douglas Donaldson
                                        ----------------------------
                                         Name: R. Douglas Donaldson
                                         Title:   Treasurer



                                      S-3

<PAGE>



ADMINISTRATIVE AGENT:               DEUTSCHE BANK AG, NEW YORK BRANCH


                                    By: /s/ David McCollum
                                        -----------------------------
                                         Name:  David McCollum
                                         Title:    Director

                                    By: /s/ Aimee Sevilla
                                        -----------------------------
                                         Name: Aimee Sevilla
                                         Title:   Vice President



                                      S-4
<PAGE>



ALTERNATE TRANSFEREE:               DEUTSCHE BANK AG, NEW YORK BRANCH


                                    By:  /s/ David McCollum
                                         ----------------------------
                                         Name:  David McCollum
                                         Title:    Director

                                    By:  /s/ Aimee Sevilla
                                         ----------------------------
                                         Name:  Aimee Sevilla
                                         Title:    Vice President

                                    Commitment:  $300,000,000


                                      S-5

<PAGE>





                                    EXHIBIT I

                                   DEFINITIONS

         As used in the Agreement (including its Exhibits),  the following terms
shall have the following  meanings  (such  meanings to be equally  applicable to
both the singular and plural forms of the terms defined):

         "Active  Transferee"  means  Gemini,  except in the event  that  Gemini
elects not to accept a Transfer from the Transferor hereunder, in which case the
Alternate Transferees shall be considered the Active Transferees.

         "Administrative  Agent" shall have the meaning assigned to such term in
the preamble.

         "Administrative  Agent's  Account"  means the  special  account  of the
Administrative Agent designated as follows:

         Deutsche Bank AG
         ABA #026-003-780
         Account No.  104636460008
         Account Name: TTI
         Reference: Marlin

         "Adverse  Claim"  means a lien,  security  interest or other  charge or
encumbrance, or any other type of preferential arrangement.

         "Affected Person" has the meaning set forth in Section 1.06.

         "Affiliate" means, as to any Person, any other Person that, directly or
indirectly,  is in control of, is controlled by or is under common  control with
such Person or is a director or officer of such Person.

         "Aggregate  Adjusted  Outstanding  Balance" means,  with respect to any
Receivables  to  be   transferred   pursuant  to  Section  1.02,  the  aggregate
Outstanding  Balance  of the  Contracts  related  to such  Receivables  less the
Discount with respect to such Receivables.

         "Aggregate  Capital"  means,  at any time,  the sum of the  outstanding
Capital of each Transferee at such time.

         "Aggregate  Commitment"  means, at any time, the sum of the outstanding
Commitments of each Transferee at such time.

         "Agreement"  shall  have  the  meaning  assigned  to  such  term in the
preamble.

         "Alternate Transferees" shall have the meaning assigned to such term in
the preamble.

         "Applicable  Percentage"  means,  with  respect  to  the  Consideration
payable with respect to  Receivables,  a percentage  equal to the greater of (i)
15% or (ii) the  product of (a) three,  (b) the

                                    Exh. I-1


<PAGE>


weighted  average  life of such  Receivables  expressed  in years and  fractions
thereof and as reported in the most recent Transferor Report and (c) the average
of the Default Ratios for the twelve months preceding the related Transfer Date;
provided,  however,  that after the  occurrence of a Trigger Event or a Servicer
Termination Event, the Applicable Percentage for any date of determination shall
be the  greater of (i) the  percentage  calculated  above and (ii) a  percentage
equal  to (A)  the  product  of (x) the  aggregate  Outstanding  Balance  of the
Receivables  on the  date  of  occurrence  of such  Trigger  Event  or  Servicer
Termination Event, as the case may be, (y) the Applicable Percentage on the date
of occurrence of such Trigger Event or Servicer  Termination Event and (z) 0.25,
divided by (B) the aggregate Outstanding Balance of the Receivables on such date
of determination.

         "Base Rate" shall mean with  respect to Gemini,  a rate per annum equal
to the sum of (x) the greater of (i) the prime rate of interest announced by the
Administrative  Agent  from time to time,  changing  when and as said prime rate
changes (such rate not necessarily  being the lowest or best rate charged by the
Administrative  Agent)  and (ii) the sum of (A) 1.50% and (B) the rate  equal to
the weighted average of the rates on overnight  Federal funds  transactions with
members of the Federal  Reserve  System  arranged by Federal funds  brokers,  as
published  for such day (or,  if such day is not a  Business  Day,  for the next
preceding  Business  Day) by the Federal  Reserve Bank of New York,  or, if such
rate is not so published  for any day that is a Business Day, the average of the
quotations  for such day for such  transactions  received by the  Administrative
Agent from three Federal funds brokers of recognized standing selected by it and
(y) the Liquidity Margin.

         "Base Rate Tranche" means,  with respect to any  Transferee,  a Tranche
funded or maintained  by such  Transferee as to which Yield is calculated at the
Base Rate.

         "Business  Day" means any day on which (i) banks are not  authorized or
required to close in New York City and (ii) if this definition of "Business Day"
is utilized in connection with the Eurodollar Rate,  dealings are carried out on
the London interbank market.

         "Cap  Agreement"   means  a  Hedge  Agreement  under  which  the  Hedge
Counterparty  is only  required  to make  payments if and when  one-month  LIBOR
exceeds a  specified  level,  and which  does not  require  any  payment  by the
Transferor at any time.

         "Capital"  means,  with  respect  to  any  Transferee,   the  aggregate
Consideration paid by such Transferee for all Transfers that have occurred on or
prior to such date,  reduced  from time to time by  Collections  distributed  on
account  of  Receivables  and  applied  to reduce  Capital  pursuant  to Section
1.03(c)(iii)  of the Agreement;  provided,  that if such Capital shall have been
reduced by any distribution and thereafter all or a portion of such distribution
is rescinded or must otherwise be returned for any reason, such Capital shall be
increased by the amount of such rescinded or returned distribution, as though it
had not been made.

         "Closing Date" means March 28, 2001.

         "Collection  Account"  shall have the meaning  assigned to such term in
Section 4.08.


                                    Exh. I-2

<PAGE>


         "Collection  Account  Agreement"  means an agreement  providing for the
assumption of control by the Administrative  Agent of the Collection Account, in
form and substance satisfactory to the Administrative Agent.

         "Collection  Agent"  means  at any  time  the  Person  then  authorized
pursuant to Section 4.01 of the Agreement to administer and collect Receivables.

         "Collection  Agent Fee" has the meaning specified in Section 1.04(c) of
the Agreement.

         "Collections"  means,  with  respect  to any  Receivable,  (i) all cash
collections  and other cash  proceeds  of such  Receivable,  including,  without
limitation,  any proceeds  resulting from the  repurchase of such  Receivable by
IKON Office  Solutions,  Inc.  and all cash  proceeds of Related  Security  with
respect to such Receivable  (including,  without limitation,  payments under the
related Contract due upon or in connection with (a) Obligor's  default under the
Contract, (b) loss, theft or damage to the related Equipment,  or (c) renewal of
the  Contract),  (ii) any  Collection  of such  Receivable  deemed  to have been
received  pursuant to the Agreement and (iii) all amounts  received  pursuant to
any Hedge Agreement or Hedge Transaction;  provided,  that Collections shall not
include  collections  which represent the payment of (x) maintenance  charges or
(y) insurance premiums.

         "Commercial  Paper"  means the  short-term  promissory  notes of Gemini
issued by Gemini in the United States commercial paper market.

         "Commitment"  means,  respectively,  the  Commitment of each  Alternate
Transferee as set forth below such Alternate  Transferee's name on the signature
pages  hereof  or as set forth in the  assignment  agreement  or the  assumption
agreement pursuant to which such Alternate Transferee became a party thereto.

         "Conduit Transferee" has the meaning set forth in the preamble.

         "Consideration"  has the  meaning  set forth in Section  1.02(a) of the
Agreement.

         "Contract"  means a closed-end  lease agreement  between the Originator
and an Obligor having an original  lease/loan  term not exceeding 72 months,  in
substantially  the form of one of the  forms of  written  contract  set forth in
Annex A hereto or otherwise approved by the Administrative Agent, which has been
sold to  Transferor  pursuant to the  Transfer  Agreement,  pursuant to or under
which such Obligor shall be obligated to pay for the lease of Equipment.

         "CP  Rate"  shall  mean,  with  respect  to any CP  Tranche  funded  or
maintained by Gemini,  the rate  equivalent  to the weighted  average of (i) the
weighted  average of the  discount  rates on all of  Gemini's  Commercial  Paper
issued at a discount to fund or maintain  such CP Tranche  which is  outstanding
during the related  Settlement Period,  converted to an annual  yield-equivalent
rate on the basis of a 360-day year,  which rates shall include  dealer fees and
commissions  and (ii) the weighted  average of the annual interest rates payable
on all interest-bearing  Gemini Commercial Paper issued to fund or maintain such
CP Tranche which is outstanding  during the related  Settlement  Period,  on the
basis of a 360-day year, which rates shall include dealer fees and commissions;



                                    Exh. I-3


<PAGE>

         "CP Tranche" means a Tranche funded or maintained by Gemini as to which
Yield is calculated at the CP Rate.

         "Credit  and  Collection  Policy"  means those  receivables  collection
policies and practices of the  Originator in effect on the date of the Agreement
and  described  in  Schedule  I  hereto,  as  modified  in  compliance  with the
Agreement.

         "Debt" means (i)  indebtedness  for borrowed  money,  (ii)  obligations
evidenced  by  bonds,  debentures,  notes or other  similar  instruments,  (iii)
obligations  to pay the deferred  purchase  price of property or services,  (iv)
obligations  as  Obligor  under  leases  which  shall have been or should be, in
accordance with generally accepted  accounting  principles,  recorded as capital
leases,  (v) obligations under direct or indirect  guaranties in respect of, and
obligations  (contingent  or  otherwise)  to purchase or otherwise  acquire,  or
otherwise  to assure a creditor  against  loss in respect  of,  indebtedness  or
obligations  of others of the kinds  referred  to in clauses  (i)  through  (iv)
above,  and (vi)  liabilities in respect of unfunded vested benefits under plans
covered by Title IV of ERISA.

         "Default  Ratio"  means,  as of the  last day of each  calendar  month,
twelve (12) times the  percentage  equivalent  of a fraction,  the  numerator of
which is equal to the  excess of (x) the  aggregate  Outstanding  Balance of all
Receivables  that became Defaulted  Receivables  during such calendar month over
(y) the sum of all recoveries  received  during such calendar month with respect
to all  Receivables,  and the  denominator  of which  is equal to the  aggregate
Outstanding Balance of all Receivables which are Eligible  Receivables as of (i)
prior to the  Facility  Termination  Date,  the last day of the third  preceding
calendar month and (ii) on or after the Facility Termination Date, the first day
of such calendar month.

         "Defaulted Receivable" means a Receivable:

                  (i) as to which any payment,  or part thereof,  remains unpaid
         for more than 120 days from the original due date for such payment;

                  (ii) as to which  the  Obligor  thereof  or any  other  Person
         obligated thereon or owning any Related Security in respect thereof has
         taken any action, or suffered any event to occur, of the type described
         in paragraph (h) of Exhibit V;

                  (iii) which, consistent with the Credit and Collection Policy,
         would be written off the Transferor's books as uncollectible; or

                  (iv)  which is a  Delinquent  Receivable  and with  respect to
         which no Servicer Advance has been made by the Collection Agent.

         "Delinquency  Ratio" means,  as of the last day of each calendar month,
the percentage equivalent of a fraction,  the numerator of which is equal to the
aggregate  Outstanding  Balance  of all  Related  Contracts  having  one or more
Receivables that were Delinquent  Receivables on such day and the denominator of
which is equal to the aggregate  Outstanding Balance of all Related Contracts as
of the last day of the third preceding calendar month.

         "Delinquent  Receivable"  means a  Receivable  (that is not a Defaulted
Receivable):


                                    Exh. I-4

<PAGE>


                  (i) as to which any payment,  or part thereof,  remains unpaid
         for 60 or more days from the original due date for such payment; or

                  (ii) which,  consistent with the Credit and Collection Policy,
         would be classified as delinquent by the Originator or the Transferor.

         "Discount" means, with respect to any group of Receivables, the product
of (a) the aggregate  Outstanding  Balance of the Related Contracts  relating to
such  Receivables  and  (b)  the  Applicable   Percentage  in  respect  of  such
Receivables.

         "Eligible Receivable" means, at any time, a Receivable:

                  (i) the Obligor of which is (a) a United States resident,  (b)
         is not  the  Transferor  or any  Affiliate  thereof,  and  (c) is not a
         Governmental Obligor; provided, that Obligors with respect to Contracts
         having an aggregate  Outstanding  Balance of not greater than 3% of the
         aggregate  Outstanding  Balance  of  all  Eligible  Receivables  may be
         Governmental Obligors;

                  (ii) the  Obligor  of which  has not been  disapproved  by the
         Administrative Agent on or prior to the date of the Transfer and which,
         at the  time of the  Transfer,  is not  the  Obligor  of any  Defaulted
         Receivables;

                  (iii)  which is not a  Defaulted  Receivable  or a  Delinquent
         Receivable;  which  arises  under a  Contract  duly  authorized  by the
         parties  thereto  (which  parties had the legal  capacity to enter into
         such  Contract)  which is in full  force and  effect and which is legal
         valid  and  binding  obligation  of the  related  Obligor,  enforceable
         against such Obligor in accordance with its terms;

                  (iv) (a) which arises under a Contract  with a remaining  term
         of not  more  than  60  months;  provided,  that  Contracts  having  an
         aggregate  Outstanding  Balance of not greater than 5% of the aggregate
         Outstanding  Balance of all Eligible  Receivables  may have a remaining
         term of up to 72 months;

                  and

                  (b) which consist of  substantially  equal  monthly  payments;
         provided,   that  Receivables  having   substantially  equal  quarterly
         payments  shall in aggregate  not be greater than 25% of the  aggregate
         Outstanding Balance of all Eligible Receivables;

                  (v) which  arose  pursuant  to a  Contract  which is  "chattel
         paper" within the meaning of Section 9-102 of the UCC of the applicable
         jurisdictions  governing the perfection of the interest  created in the
         Receivables;

                  (vi) which is denominated and payable in United States dollars
         in the United States;

                  (vii)  which  arises  under a Contract  (a) which has not been
         amended,  modified,  or  altered  in any  material  respect  (except in
         writing and copies of any such writing is



                                    Exh. I-5


         attached to the  Contract) and (b) which has been duly  authorized  and
         which,  together with such Receivable,  is in full force and effect and
         constitutes the legal,  valid and binding  obligation of the Obligor of
         such Receivable enforceable against such Obligor in accordance with its
         terms  and is not  subject  to any  dispute,  offset,  counterclaim  or
         defense  whatsoever  (except as limited by applicable  bankruptcy law),
         (c) in respect of which, prior to the date it is transferred hereunder,
         the Equipment has been  delivered and accepted,  (d) which  pursuant to
         its terms may not be  canceled,  terminated  or prepaid by the  Obligor
         before the end of its stated term (other than  Contracts  which contain
         early  termination  or prepayment  clauses which require the Obligor to
         pay the  remainder of all scheduled  payments  under such Contract upon
         cancellation  or prepayment,  and, in the case of Contracts  related to
         Governmental Obligors, by reason of nonrenewal of appropriations),  (e)
         which,  if related to a  Governmental  Obligor,  has not been  canceled
         before  the  end  of  its  stated  term  by  reason  of  nonrenewal  of
         appropriations, and (f) which is not a consumer lease;

                  (viii) which, together with the Contract related thereto, does
         not contravene in any material  respect any laws,  rules or regulations
         applicable  thereto  (including,  without  limitation,  laws, rules and
         regulations relating to usury,  consumer protection,  truth in lending,
         consumer leasing,  fair credit billing,  fair credit  reporting,  equal
         credit  opportunity,  fair debt  collection  practices and privacy) and
         with respect to which none of the  Transferor,  the  Originator  or the
         related  Obligor is in violation of any such law, rule or regulation in
         any material respect;

                  (ix)  with  regard to which  there  exists  only one  executed
         original  Contract,  which is in the  possession  of  Transferor on the
         Transfer Date of such Receivable;

                  (x)  which  was  selected  for  transfer  by a  procedure  not
         designed to adversely affect the credit quality of the Receivables;

                  (xi) which represents  payments due to the Originator and does
         not represent any payments  payable for the account of any Person other
         than the Originator  under the Contract  relating to such Receivable or
         any sales or use tax payable under such Contract;

                  (xii) which was  originated  by the  Originator  in accordance
         with,  and otherwise  satisfies  all  applicable  requirements  of, the
         Credit and Collection Policy;

                  (xiii) which, after giving effect to the acquisition  thereof,
         would not  result  in the  aggregate  Outstanding  Balance  of  Related
         Contracts  of any  single  Obligor  exceeding  1.5%  of  the  aggregate
         Outstanding Balance of all Related Contracts;

                  (xiv) as to  which,  at or prior to the time of the  Transfer,
         the  Administrative  Agent has not  notified the  Transferor  that such
         Receivable (or class of  Receivables) is not acceptable for transfer to
         Gemini hereunder;

                  (xv) the transfer or  assignment of which does not require the
         Obligor's  consent,  and which does not contravene any applicable  law,
         rule or regulation;

                                    Exh. I-6

<PAGE>


                  (xvi) with  respect to which (a) the  related  Obligor has not
         been  released,  (b)  the  Related  Contract  has not  been  satisfied,
         canceled,  subordinated or rescinded,  and (c) no Equipment  subject to
         the Related Contract has been released from the Related Contract;

                  (xvii) which Equipment subject to the related Contract has not
         been  released  and such  Contract  requires  the  related  Obligor  to
         maintain  insurance on such Equipment in an amount  sufficient to fully
         insure such Equipment;

                  (xviii) which, after giving effect to the acquisition thereof,
         would not  result  in the  aggregate  Outstanding  Balance  of  Related
         Contracts of Obligors located in any single state exceeding 10% (except
         in the case of Texas, which may not exceed 21%, and California, Georgia
         and  Pennsylvania,  which  may  not  individually  exceed  15%)  of the
         aggregate Outstanding Balance of all Related Contracts;

                  (xix) which has an implied interest rate of at least 7.00% per
         annum;

                  (xx) which,  after giving effect to the  acquisition  thereof,
         would not result in (a) the  aggregate  Outstanding  Balance of Related
         Contracts secured by analog photocopiers exceeding 35% of the aggregate
         Outstanding  Balance of all  Related  Contracts,  or (b) the  aggregate
         Outstanding  Balance of Related  Contracts  secured by Equipment  other
         than photocopiers or facsimile  machines exceeding 10% of the aggregate
         Outstanding Balance of all Related Contracts;

                  (xxi) which has not been previously  financed  through another
         warehouse facility; and

                  (xxii) which, after giving effect to the acquisition  thereof,
         would not result in the remaining  weighted average life of all Related
         Contracts (weighted based on Outstanding Balance) exceeding 2.5 years.

         "Equipment"  with respect to any Receivable  means office,  business or
other  equipment  leased or sold to an Obligor by the  Originator  pursuant to a
Contract  (including any modifications or substitutions of equipment pursuant to
the original Contract giving rise to such Receivable).

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended from time to time, and the  regulations  promulgated  and rulings issued
thereunder.

         "Eurocurrency  Liabilities"  has the  meaning  assigned to that term in
Regulation  D of the Board of  Governors of the Federal  Reserve  System,  as in
effect from time to time.

         "Eurodollar  Rate" shall mean,  with respect to any Eurodollar  Tranche
funded or  maintained  by any  Transferee  (or any  liquidity or credit  support
provider of Gemini), the Liquidity Margin plus a rate per annum equal to the sum
(rounded upwards, if necessary,  to the next higher 1/100 of 1%) of (i) the rate
obtained by dividing (A) the applicable  LIBOR Rate by (B) a percentage equal to
100% minus the reserve  percentage  used for  determining  the  maximum  reserve
requirement  as specified in Regulation D (including,  without  limitation,  any
marginal, emergency, supplemental, special or other reserves) that is applicable
to the  Administrative


                                    Exh. I-7
<PAGE>


Agent  during  the  related  Settlement  Period in respect  of  eurocurrency  or
eurodollar  funding,  lending or  liabilities  (or, if more than one  percentage
shall be so applicable,  the daily average of such  percentage for those days in
such  Settlement  Period during which any such  percentage  shall be applicable)
plus  (ii) the then  daily net  annual  assessment  rate  (rounded  upwards,  if
necessary,  to the nearest 1/100 of 1%) as estimated by the Administrative Agent
for  determining  the current annual  assessment  payable by the  Administrative
Agent to the Federal Deposit Insurance Corporation in respect of eurocurrency or
eurodollar funding, lending or liabilities.

         "Facility  Termination  Date"  means the  earlier of (a) the  Scheduled
Termination Date and (b) the Termination Date.

         "Fee Letter" has the meaning set forth in Section 1.04.

         "Gemini" shall have the meaning assigned to such term in the preamble.

         "Governmental Obligor" means an Obligor that is the federal government,
the  government of any state or  governmental  subdivision  or any agency of the
federal government or the government of any state.

         "Hedge  Agreement"  means each  agreement  between the Transferor and a
Hedge  Counterparty  which governs one or more Hedge  Transactions  entered into
pursuant to Section 1.12, which agreement shall consist of a "Master  Agreement"
in a form  published by the  International  Swaps and  Derivatives  Association,
Inc., together with a "Schedule" thereto substantially in the form of Annex E or
such other form as the Administrative  Agent shall approve in writing,  and each
"Confirmation"  thereunder  confirming  the  specific  terms of each such  Hedge
Transaction.

         "Hedge  Breakage  Costs"  means  all  amounts  payable  under  a  Hedge
Agreement as a result of the early termination of a Hedge Transaction or portion
thereof.

         "Hedge   Collateral"  means  all  right,  title  and  interest  of  the
Transferor in each Hedge Agreement, each Hedge Transaction,  and all present and
future amounts  payable by a Hedge  Counterparty  to the Transferor  under or in
connection  with the respective  Hedge Agreement and Hedge  Transaction(s)  with
such Hedge Counterparty.

         "Hedge  Counterparty"  means  a  Person  reasonably  acceptable  to the
Administrative  Agent and having long term unsecured debt  obligations  rated at
least AA- by S&P and Aa3 by Moody's.

         "Hedge  Rate"  means,  with  respect  to any  Hedge  Agreement  and the
Receivables assigned thereto (a) if such Hedge Agreement is a Cap Agreement, the
fixed rate per annum  which  one-month  LIBOR must  exceed to result in payments
made thereunder by the Hedge  Counterparty  to the  Transferor,  and (b) if such
Hedge Agreement is a Swap  Agreement,  the fixed rate per annum which is applied
to the notional  amount of such Hedge  Agreement to calculate the payments to be
made by the  Transferor  thereunder  to the Hedge  Counterparty.  The Hedge Rate
applicable  to any  particular  Receivable  shall be (i) if more  than one Hedge
Transaction is then in effect, the Hedge Rate for the Hedge Transaction  entered
into  concurrently  with the  Transfer of such

                                    Exh. I-8

<PAGE>


Receivable and (ii) if only one Hedge  Transaction is then in effect,  the Hedge
Rate for such Hedge Transaction.

         "Hedge  Transaction"  means each interest rate swap or cap  transaction
between the Transferor and a Hedge  Counterparty  which is entered into pursuant
to Section 1.12 and is governed by a Hedge Agreement.

         "IKON Group" means,  collectively,  the Transferor,  the Originator and
the Parent.

         "Indemnified  Amounts" has the meaning specified in Section 3.01 of the
Agreement.

         "Indemnified  Party" has the meaning  specified  in Section 3.01 of the
Agreement.

         "Investment Grade" means, with respect to any entity's long-term public
senior  debt  securities,  a rating  of at least  "BBB-" by S& P and of at least
"Baa3" by Moody's.

         "LIBOR Rate" shall mean, with respect to any Eurodollar  Tranche funded
or maintained by any Transferee (or any liquidity or credit support  provider of
Gemini), the rate at which deposits in dollars are offered to the Administrative
Agent, in the London interbank market at approximately  11:00 a.m. (London time)
two Business  Days before the first day of the related  Settlement  Period in an
amount  approximately  equal to the  portion of Capital to which the  Eurodollar
Rate is to apply and for a period of time approximately  equal to the applicable
Settlement Period.

         "Liquidity  Agreement"  shall  mean  each  liquidity  agreement,  asset
purchase  agreement,  liquidity  asset  purchase  agreement,  or  other  similar
agreement pursuant to which any bank or group of banks or financial institutions
agrees to purchase or make loans secured by (or otherwise advance funds against)
all or any portion of Gemini's  interest in the  Receivables in order to support
Gemini's  repayment  of the  Commercial  Paper  issued to fund or maintain  such
interest.

         "Liquidity Margin" shall mean 1.50%.

         "Lock-Box  Account"  means  an  account  maintained  at a bank or other
financial institution for the purpose of receiving Collections.

         "Lock-Box Bank" means any of the banks or other financial  institutions
holding one or more Lock-Box Accounts.

         "Material  Adverse  Change"  means any set of  circumstances  or events
which (a) has or could  reasonably  be  expected  to have any  material  adverse
effect  whatsoever upon the validity or  enforceability  of the Agreement or any
other  Transaction  Document,  (b) is or  could  reasonably  be  expected  to be
material and adverse to the business,  properties,  assets, financial condition,
results of operations or prospects of the  Transferor,  the Collection  Agent or
the Originator or any of their successors or assigns (the "Transferor Parties"),
(c) impairs  materially or could reasonably be expected to impair materially the
ability of the  Transferor  Parties to duly and  punctually pay or perform their
respective obligations under the Agreement or any other Transaction Document, or
(d) impairs  materially or could reasonably be expected to impair

                                    Exh. I-9

<PAGE>


materially the ability of the  Administrative  Agent or any  Transferee,  to the
extent  permitted,  to enforce their legal remedies pursuant to the Agreement or
any other Transaction Document.

          "Moody's" means Moody's Investors Service, Inc. and any successor
thereto.

         "Obligor"  means a Person  obligated  to make  payments  pursuant  to a
Contract;  provided that in the event that any payments in respect of a Contract
are made by any  other  Person,  such  other  Person  shall be  deemed  to be an
Obligor.

         "Other  Corporations"  means the Parent,  the Originator and all of the
Parent's Subsidiaries except the Transferor.

         "Original  Receivables  Transfer  Agreement"  shall  have  the  meaning
assigned to such term in the preamble.

         "Originator"  shall  have  the  meaning  assigned  to such  term in the
preamble.

         "Outstanding  Balance" of any  Contract  or  Receivables  with  respect
thereto at any date means the net present value of the total  Periodic  Payments
due to Transferor  over the  remaining  term of the Contract or that have become
due and payable on or prior to such date but remain  unpaid on such date (net of
any security deposits or advance rental payments received by Transferor) and not
yet paid by the Collection  Agent pursuant to the provisions of Section 1.03(b),
discounted  monthly at the  Receivables  Discount Rate in effect on the Transfer
Date of such Contract or Receivable,  as determined by  subtracting  all amounts
representing  unearned  interest  from the  aggregate  amount  of such  Periodic
Payments.

         "Parent" means IKON Office Solutions, Inc., an Ohio corporation.

         "Periodic  Payments" means the aggregate base rental amounts coming due
on a periodic  basis  pursuant  to the  Contracts  giving  rise to  Receivables,
excluding  any  maintenance  charges  or,  with  respect to  Contracts  covering
photocopiers, any per copy charges.

         "Person" means an  individual,  partnership,  corporation  (including a
business trust), limited liability company, limited liability partnership, joint
stock company, trust, unincorporated association, joint venture or other entity,
or a government or any political subdivision or agency thereof.

         "Potential  Servicer  Termination  Event"  means an event  that but for
notice or lapse of time or both would constitute a Servicer Termination Event.

         "Potential  Trigger  Event" means an event that but for notice or lapse
of time or both would constitute a Trigger Event.

         "Principal  Payment Amount" means,  as of any Settlement  Date, (a) the
Aggregate Adjusted Outstanding Balance of all Related Contracts as of the end of
the  second  preceding   calendar  month,   minus  (b)  the  Aggregate  Adjusted
Outstanding  Balance of all Related  Contracts as of the end of the  immediately
preceding calendar month; provided, that for purposes of determining all amounts
in clauses (a) and (b) above, the Outstanding  Balance of any Receivable


                                   Exh. I-10

<PAGE>


that is a Defaulted Receivable as of the relevant date of determination shall be
deemed to be zero.

         "Pro Rata"  means,  with respect to any  Transferee,  pro rata based on
such  Transferee's  outstanding  Capital.  So  long  as  Gemini  is  the  Active
Transferee,  its Pro  Rata  share of any  amount  shall be equal to 100% of such
amount.

         "Program Fee" is defined in the Fee Letter.

         "Receivable"  means  the  obligations  of any  Obligor  under a Related
Contract,  and includes monies received  subsequent to the related Transfer Date
with  respect to (i) all  Periodic  Payments  and (ii) all  obligations  of such
Obligor to pay interest or finance charges and other obligations of such Obligor
(other  than  obligations  in respect of taxes or  insurance  or similar  escrow
arrangements  of any kind) with respect  thereto,  and all other payments (other
than in respect of taxes or  insurance  or similar  escrow  arrangements  of any
kind)  received by the  Transferor  pursuant  to such  Contract,  excluding  any
maintenance charges or, with respect to Contracts covering photocopiers, any per
copy  charges.  A  Receivable  arising  under a Related  Contract  for which the
Outstanding Balance has been collected shall no longer constitute a "Receivable"
outstanding hereunder.

         "Receivables  Discount  Rate" means,  for each  Receivable,  a rate per
annum equal to the sum of (i) the Hedge Rate applicable to such Receivable, (ii)
the Collection  Agent Fee rate (1.50%) and (iii) the "LIBOR Margin" as set forth
in the Fee letter.

         "Related  Contract" means a Contract  included in the List of Contracts
delivered to the Administrative  Agent on or prior to the date of each Transfer;
provided,  that  after  the  Outstanding  Balance  of  such  Contract  has  been
collected, it shall no longer constitute a "Related Contract" hereunder.

         "Related Security" means with respect to any Receivable:

                  (i) all Equipment related to such Receivable;

                  (ii) all security  interests or liens and property  (including
         without limitation  Equipment) securing or purporting to secure payment
         of such  Receivable,  whether  pursuant to the Contract related to such
         Receivable or otherwise,  together with all financing statements signed
         by an Obligor describing any collateral securing such Receivable;

                  (iii)  all  guaranties  (other  than the  Support  Agreement),
         insurance and other  agreements  supporting or securing payment of such
         Receivable  (or  insuring  for loss or  liability  with  respect to the
         related  Equipment),  whether  pursuant to the Contract related to such
         Receivable   or  otherwise  and  all  of  the   Originator's   and  the
         Transferor's  rights  (if any) to  recourse,  repurchase  or  indemnity
         against any Person with respect to such Receivable;

                  (iv) the related  Contract  and all other  books,  records and
         other information  (including,  without limitation,  computer programs,
         tapes,  discs,  punch  cards,  data

                                   Exh. I-11

<PAGE>

         processing  software  and  related property  and  rights)  relating  to
         such  Receivable  and the  related Obligor; and

                  (v) all related Hedge Collateral.

         "Required  Balance"  means,  with respect to any  Settlement  Date,  an
amount equal to (a) the Aggregate Capital on such Settlement Date divided by (b)
(i) one minus (ii) the Applicable Percentage.

         "Required  Transferees"  shall mean the Transferees  having Commitments
which,  in the aggregate,  equals at least 66 2/3% of the Aggregate  Commitment,
or, if the  Commitments  have been  terminated,  having  Capital  which,  in the
aggregate, equals at least equal 66 2/3% of the Aggregate Capital; provided that
the  Commitment  or Capital of any  Alternate  Transferee  that has not paid all
amounts due and owing by it in respect of Transfers  (or portions  thereof) that
it was  obligated  to make,  shall  not be  included  in any  calculations  made
pursuant to this definition.

         "S&P"  means  Standard & Poor's  Ratings  Services,  a division  of the
McGraw-Hill Companies, Inc. and any successor thereto.

         "Scheduled  Termination Date" shall mean two Business Days prior to the
"Final Date" as defined in the Liquidity Agreement.

         "Servicer  Advance"  means,  with respect to any  Settlement  Date, the
amounts, if any, made available by the Collection Agent for distribution on such
Settlement  Date in  accordance  with  Section  1.03 in  respect  of  delinquent
Periodic Payments pursuant to Section 4.02(g).

         "Servicer Termination Event" means (i) any Trigger Event shall occur or
(ii) if the  Originator  is then acting as Collection  Agent,  any rating of the
long-term senior  unsubordinated  debt obligations of the Collection Agent shall
be withdrawn or reduced below  Investment  Grade (it being understood and agreed
that,  unless otherwise  remedied,  any Servicer  Termination  Event of the type
described  in this  clause  (ii)  shall be  deemed  to be  continuing  until the
Originator is replaced as Servicer).

         "Settlement  Date" means the fifteenth day of each calendar month,  or,
if such day is not a Business Day, the next succeeding Business Day.

         "Settlement  Period" means: (i) initially the period commencing on (and
including) the date of the initial  transfer or funding of such  Receivables and
ending  on (and  including)  the last day of the  calendar  month in which  such
Settlement  Period began,  and (ii) thereafter,  each calendar month,  provided,
that

                  (i) in the  case  of any  Settlement  Period  which  commences
         before the Facility  Termination Date and would otherwise end on a date
         occurring after the Facility  Termination  Date, such Settlement Period
         shall end on such  Facility  Termination  Date and the duration of each
         Settlement Period which commences on or after the Facility  Termination
         Date  shall  be  of  such   duration   as  shall  be  selected  by  the
         Administrative Agent; and


                                   Exh. I-12

<PAGE>


                  (ii) any  Settlement  Period  in  respect  of  which  Yield is
         computed by reference to the CP Rate may be  terminated at the election
         of, and upon notice thereof to the  Transferee,  by the  Administrative
         Agent at any time,  in which  case the  Receivables  allocated  to such
         terminated  Settlement  Period shall be  allocated to a new  Settlement
         Period  commencing on (and including) the date of such  termination and
         ending on (but excluding) the next following Settlement Date, and shall
         accrue  Yield  at  the  Eurodollar  Rate  or  the  Base  Rate,  in  the
         Administrative Agent's sole discretion.

         "Special Indemnified Amounts" has the meaning specified in Section 5.07
of the Agreement.

         "Special  Indemnified  Party" has the meaning specified in Section 5.07
of the Agreement.

         "Subsidiary"  means any corporation or other entity of which securities
having  ordinary  voting  power to elect a majority of the board of directors or
other  persons  performing  similar  functions  are  at  the  time  directly  or
indirectly  owned by the Transferor,  the Originator or the Parent,  as the case
may be, or one or more Subsidiaries, or by the Transferor, the Originator or the
Parent, as the case may be, and one or more Subsidiaries.

         "Support Agreement" means the operating agreement,  dated as of October
22,  1996,  between the  Originator  and the Parent,  as such  agreement  may be
amended or supplemented or otherwise modified from time to time.

         "Swap Agreement" means a Hedge Agreement other than a Cap Agreement.

         "Take-Out  Securitization"  means  a  securitization   transaction  the
proceeds of which are used to reduce the Aggregate Capital to zero.

         "Termination Date" means the earlier of (a) the date specified pursuant
to Section  2.02 of the  Agreement,  and (b) the date on which  each  Transferee
receives an amount  equal to its Capital  plus  accrued  Yield  thereon plus all
other amounts due to it under the Agreement and each of the Administrative Agent
and the Hedge Counterparties  receives all amounts due to it under the Agreement
and the Hedge Agreements.

         "Three-Month   Rolling  Average"  means,   with  respect  to  any  pool
performance  ratio,  the sum of the applicable ratio for the most recently ended
calendar  month and two  immediately  preceding  calendar  months (or such fewer
calendar months as have  previously  occurred since the Closing Date) divided by
three (or such smaller number).

         "Tranche"  shall mean with respect to any  Transferee,  each portion of
such  Transferee's  Capital  being  funded  or  maintained  by  reference  to  a
particular interest rate basis.

         "Tranche  Rate" means,  with  respect to any  Tranche,  the rate (which
shall be either the CP Rate,  Base Rate, or the  Eurodollar  Rate as selected at
the sole discretion of the Administrative Agent) at which such Tranche is funded
or maintained by the  applicable  Transferee;  it being  understood  that at all
times on and after  the  occurrence  and  continuation  of a Trigger  Event or a
Servicer  Termination  Event, the Tranche Rate with respect to any Tranche,  for
any Transferee  shall be equal to the Base Rate  applicable to such  Transferee,
plus 2.00% per annum.

                                   Exh. I-13

<PAGE>


         "Transaction  Document"  means  any  of  the  Agreement,  the  Transfer
Agreement and all other agreements and documents delivered and/or related hereto
or thereto.

         "Transfer" has the meaning specified in Section 1.01 of the Agreement.

         "Transfer  Agreement"  means  the  Transfer  Agreement  dated as of the
Closing Date between the Transferor and the Originator, as such agreement may be
amended from time to time.

         "Transfer  Date" has the meaning  specified  in Section  1.02(a) of the
Agreement.

         "Transferee" means Gemini and each Alternate Transferee, as applicable.

         "Transferor"  shall  have  the  meaning  assigned  to such  term in the
preamble.

         "Transferor  Report" means a report, in substantially the form of Annex
B hereto, furnished by the Collection Agent to the Administrative Agent pursuant
to Section 4.02 of the Agreement.

         "Trigger Event" has the meaning specified in Exhibit V.

         "UCC" means the Uniform  Commercial Code as from time to time in effect
in the specified jurisdiction.

         "Unreimbursed  Servicer  Advance" means, at any time, the amount of all
previous  Servicer  Advances  (or portions  thereof) as to which the  Collection
Agent has not been  reimbursed as of such time  pursuant to Section  1.03(b) and
which the  Collection  Agent has determined in good faith will not be ultimately
recoverable,  and with respect to which the  Collection  Agent has given written
certification to such effect (which  certification may take the form of an entry
on a Transferor Report identifying Unreimbursed Servicer Advances).

         "Yield" means, with respect to any Transferee:

                  (a) for any Tranche for any Settlement  Period with respect to
         any  Transferee  to the  extent  such  Tranche  will be  funded by such
         Transferee  during  such  Settlement  Period  through  the  issuance of
         Commercial Paper:

                                CPR x C x ED/360

                  (b) for any Tranche for any Settlement  Period with respect to
         any  Transferee  to the extent such  Tranche will not be funded by such
         Transferee  during  such  Settlement  Period  through  the  issuance of
         Commercial Paper:

                                TR x C x ED/Year

where:

  TR    =  the Eurodollar Rate or Base Rate, as applicable, for such Tranche
           for such Settlement Period with respect to such Transferee,


                                   Exh. I-14


<PAGE>


  C     =  the portion of the Capital and any capitalized interest allocated to
           such Tranche during such Settlement Period with respect to such
           Transferee,

  CPR   =  the CP Rate for the Tranche for such Settlement Period with respect
           to such Transferee,

  Ed    =  the actual number of days during such Settlement Period, and

  Year  =  if such Tranche is funded based upon: (i) the Eurodollar Rate,
           360 days, and (ii) the Base Rate, 365 or 366 days, as applicable,

provided, that no provision of the Agreement shall require the payment or permit
the  collection of Yield in excess of the maximum  permitted by applicable  law;
and provided further, that Yield for any Tranche shall not be considered paid by
any  distribution  to the  extent  that at any  time  all or a  portion  of such
distribution is rescinded or must otherwise be returned for any reason.

                                   - - - - - -

         Other Terms. All accounting terms not specifically defined herein shall
be construed in accordance with generally accepted  accounting  principles.  All
terms used in Article 9 of the UCC in the State of New York and not specifically
defined herein, are used herein as defined in such Article 9.


                                   Exh. I-15

<PAGE>



                                   EXHIBIT II

                             CONDITIONS OF TRANSFERS

         1. Conditions  Precedent to the Initial Transfer.  The initial Transfer
is subject to the conditions  precedent that the Administrative Agent shall have
received on or before the date of such  Transfer  the  following,  each  (unless
otherwise indicated) dated such date, in form and substance  satisfactory to the
Administrative Agent:

         (a) Certified  copies of the  resolutions  of the Board of Directors of
the Transferor approving the Transaction  Documents and all related actions, and
certified copies of all documents  evidencing other necessary  limited liability
company  action  and  governmental  approvals,  if  any,  with  respect  to  the
Transaction Documents and such actions.

         (b) Certified  copies of the  resolutions  of the Board of Directors of
the Originator approving the Transaction  Documents and all related actions, and
certified copies of all documents  evidencing other necessary  limited liability
company  action  and  governmental  approvals,  if  any,  with  respect  to  the
Transaction Documents and such actions.

         (c) A  certificate  of the  Secretary  or  Assistant  Secretary  of the
Transferor  certifying  the names and true  signatures  of the  officers  of the
Transferor, authorized to sign the Transaction Documents and the other documents
to be delivered by it thereunder.

         (d) A  certificate  of the  Secretary  or  Assistant  Secretary  of the
Originator  certifying  the names and true  signatures  of the  officers  of the
Originator  authorized to sign the Transaction Documents and the other documents
to be delivered by it thereunder.

         (e) A copy of the  organizational  documents of the  Transferor,  and a
certificate  as to the good standing of the  Transferor  from such  Secretary of
State or other official, dated on or about the Closing Date.

         (f)  Acknowledgment  copies or time  stamped  receipt  copies of proper
financing  statements,  duly filed on or before the  Initial  Transfer  (or such
later  date as  determined  by the  Administrative  Agent)  under the UCC of all
jurisdictions  that the  Administrative  Agent may reasonably  deem necessary or
desirable  in order to perfect  the  interests  contemplated  by the  Agreement,
including,  without  limitation,  any  financing  statements  filed  against the
Originator and the Transferor as the  Administrative  Agent may reasonably  deem
necessary  or  desirable  to perfect  the  interest  of the  Transferees  in the
Equipment.

         (g)  Acknowledgment  copies or time  stamped  receipt  copies of proper
financing  statements,  if any,  necessary to release all security interests and
other rights of any Person in the (i) Receivables,  Related Contracts or Related
Security  previously  granted by the  Transferor and the Originator and (ii) the
collateral security referred to in Section 1.11.

         (h) Completed requests for information, listing all effective financing
statements filed in the  jurisdictions  referred to in subsection (f) above that
name the  Transferor  as debtor,  together  with copies of such other  financing
statements  (none of which  shall  cover  any

                                   Exh. II-1

<PAGE>


Receivables,  Related  Contracts,  Related  Security or the collateral  security
referred to in Section 1.11).

         (i)  An  opinion  of  Mayer,  Brown,  Rowe  &  Maw,  addressed  to  the
Administrative  Agent  and the  Transferees,  in form and  substance  reasonably
acceptable  to the  Administrative  Agent,  regarding  the  "true  sale"  of the
Receivables and certain related assets between the Originator and the Transferor
and the non  substantive  consolidation  of the Originator and the Transferor in
the event of a  bankruptcy  of the  Originator  and such  other  matters  as the
Administrative Agent may reasonably request.

         (j)  An  opinion  of  Mayer,  Brown,  Rowe  &  Maw,  addressed  to  the
Administrative  Agent  and the  Transferees,  in form and  substance  reasonably
acceptable  to the  Administrative  Agent,  regarding  the  creation  of a valid
security  interest  by the  Originator  in  favor of the  Transferor  and by the
Transferor in favor of the  Administrative  Agent, on behalf of the Transferees,
and such other matters as the Administrative Agent may reasonably request.

         (k)  An  opinion  of  Mayer,  Brown,  Rowe  &  Maw,  addressed  to  the
Administrative  Agent  and the  Transferees,  in form and  substance  reasonably
acceptable to the Administrative Agent, regarding the perfection of the security
interests granted by the Originator to the Transferor,  and by the Transferor to
the Administrative Agent, on behalf of the Transferees, in the Equipment.

         (l) An opinion of special counsel to the  Originator,  addressed to the
Administrative  Agent  and the  Transferees,  in form and  substance  reasonably
acceptable to the Administrative Agent,  regarding the validity,  perfection and
first  priority  of the  security  interest  granted  by the  Originator  to the
Transferor, the validity, perfection and first priority of the security interest
granted  by the  Transferor  to  the  Administrative  Agent,  on  behalf  of the
Transferees,  and such other matters as the Administrative  Agent may reasonably
request.

         (m) An  opinion  of the  general  counsel  to the  Transferor  and  the
Originator,  addressed to the Administrative Agent and the Transferees,  in form
and substance reasonably acceptable to the Administrative  Agent,  regarding the
enforceability of the Transaction Documents to which each is a party.

         (n) An  opinion  of the  general  counsel  of the  Originator  and  the
Transferor,  addressed to the Administrative Agent and the Transferees,  in form
and substance  reasonably  acceptable  to the  Administrative  Agent,  regarding
certain corporate matters.

         (o) The Fee Letter duly executed by all parties thereto, and payment of
all fees  required  to be paid on the Closing  Date,  and  reimbursement  of the
Administrative  Agent and the  Transferees  for all costs  and  expenses  of the
closing of the transaction (including reasonable legal fees and costs).

         (p) The Transfer Agreement, duly executed by all parties thereto.

         (q)  Satisfactory  results of a review and audit by the  Administrative
Agent of the Originator's  collection,  operating and reporting systems,  Credit
and Collection Policy, historical receivables data and accounts.


                                   Exh. II-2


<PAGE>

         (r) The  following  financial  information  of the  Transferor  and the
Collection  Agent and  their  respective  Subsidiaries:  (i)  audited  financial
statements  prepared in accordance with GAAP on a consolidated and consolidating
basis (consolidating statements need not be audited by such accountants) for the
period  October 1, 1999 through  September  30, 2000 and (ii)  consolidated  and
consolidating  unaudited  financial  statements  for the  fiscal  quarter  ended
December 31, 2000.

         (s) A letter from each Rating Agency rating Gemini's  Commercial  Paper
confirming its rating of Gemini's  Commercial Paper or that such rating will not
be  withdrawn  or  downgraded  after  giving  effect  to the  Agreement  and the
transactions contemplated hereby.

         (t)  A  officer's  certificate  of  each  of  the  Originator  and  the
Transferor  certifying that the representations and warranties of the Originator
set forth in the  Transfer  Agreement  and of the  Transferor  set forth  herein
hereof are true and correct in all material respects as of the Closing Date.

         (u) A Pro Forma Transferor Report.

         Payment of the Consideration  for the initial Transfer  hereunder shall
constitute acknowledgment by the Administrative Agent that all of the conditions
set forth have been fulfilled or waived.

         2. Additional Conditions  Precedent.  Each Transfer shall be subject to
the further conditions precedent that:

         (a) on or prior  to the date of such  Transfer,  the  Collection  Agent
shall  have  delivered  to the  Administrative  Agent,  in  form  and  substance
satisfactory to the  Administrative  Agent, a completed  Transferor Report dated
within 30 days  prior to the date of such  Transfer  together  with a listing by
Obligor of all Receivables and such additional  information as may reasonably be
requested by the Administrative Agent;

         (b) on the date of such Transfer the following statements shall be true
(and   acceptance  of  the  proceeds  of  such   Transfer   shall  be  deemed  a
representation  and warranty by the  Transferor  that such  statements  are then
true):

                  (i)  The  representations  and  warranties  of the  Transferor
         contained  in  Exhibit  III are  correct  on and as of the date of such
         Transfer as though made on and as of such date;

                  (ii) The  representations  and  warranties  of the  Originator
         contained  in the  Transaction  Documents  are correct on and as of the
         date of such Transfer as though made on and as of such date;

                  (iii) No event has occurred and is continuing, or would result
         from such  Transfer,  that  constitutes  a Trigger  Event or  Potential
         Trigger Event;

                  (iv) The Facility Termination Date shall not have occurred;


                                   Exh. II-3


<PAGE>

                  (v) The  Aggregate  Capital  does  not  exceed  the  Aggregate
         Commitment;

                  (vi) The  Outstanding  Balance of all Eligible  Receivables is
         not less than the Required Balance.

                  (vii) After giving  effect to such  Transfer,  the  Transferor
         will be in  compliance  with  the  hedging  requirements  set  forth in
         Section 1.12.

         (c) the Administrative  Agent shall have received such other approvals,
opinions or documents as it may reasonably request; and

         (d) the  Administrative  Agent  shall  have  received  the  list of the
Related  Contracts  to be  included  in such  Transfer  that is  required  to be
delivered pursuant to paragraph (j) of Exhibit IV hereof.

                                   Exh. II-4


<PAGE>




                                   EXHIBIT III

                         REPRESENTATIONS AND WARRANTIES

         The Transferor represents and warrants as follows:

         (a) The Transferor is a limited liability company duly formed,  validly
existing  and in good  standing  under  the  laws of  Delaware  and has not been
organized under the laws of any other  jurisdiction.  It is duly qualified to do
business, and is in good standing, in every jurisdiction where the nature of its
business requires it to be so qualified.

         (b) The  execution,  delivery and  performance by the Transferor of the
Transaction  Documents (i) are within the Transferor's limited liability company
powers,  (ii) have been  duly  authorized  by all  necessary  limited  liability
company  action,  (iii) do not  contravene (1) the  Transferor's  organizational
documents, (2) any law, rule or regulation applicable to the Transferor, (3) any
contractual  restriction  binding on or affecting the Transferor or its property
or (4) any order,  writ,  judgment,  award,  injunction or decree  binding on or
affecting the  Transferor or its property,  and (iv) do not result in or require
the creation of any lien,  security interest or other charge or encumbrance upon
or with respect to any of its properties  (other than those created  pursuant to
the  Transaction  Documents);  and no transaction  contemplated by the Agreement
requires  compliance  with  any  bulk  sales  act or  similar  law.  Each of the
Transaction Documents has been duly executed and delivered by the Transferor.

         (c) No  authorization  or approval or other action by, and no notice to
or filing with, any  governmental  authority or regulatory  body is required for
the due execution, delivery and performance by the Transferor of the Transaction
Documents,  except  for the  filing of the UCC  financing  statements  which are
referred to therein.

         (d) Each of the Transaction  Documents constitutes the legal, valid and
binding  obligation  of the  Transferor  enforceable  against the  Transferor in
accordance with its terms.

         (e) The balance  sheets of the Originator  and its  Subsidiaries  as at
October 1, 1999 and September 30, 2000 and the related  statements of income and
retained  earnings of the  Originator and its  Subsidiaries  for the fiscal year
then ended,  copies of which have been  furnished to the  Administrative  Agent,
fairly present the financial condition of the Originator and its Subsidiaries as
at  such  date  and  the  results  of  the  operations  of  Originator  and  its
Subsidiaries for the period ended on such date, all in accordance with generally
accepted accounting  principles  consistently  applied,  and since September 30,
2000 there has been no  material  adverse  change in the  business,  operations,
property or financial or other  condition of the  Originator.  Since the date of
its  formation,  there has not been a material  adverse  change in the business,
operations, property or financial or other condition of the Transferor.

         (f) There is no pending or threatened  action or  proceeding  affecting
the Originator or any of its Subsidiaries before any court,  governmental agency
or arbitrator which would materially adversely affect the financial condition or
operations of the  Originator or any of its  Subsidiaries  or the ability of the
Transferor or the Originator to perform their respective  obligations  under the
Transaction  Documents,  or which  purports to affect the legality,  validity or

                                   Exh. III-1

<PAGE>


enforceability  of the  Transaction  Documents;  neither the  Originator nor any
Subsidiary is in default with respect to any order of any court,  arbitration or
governmental body.

         (g) No  proceeds  of any  Transfer  will be used to acquire  any equity
security of a class which is registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended.

         (h) Each  Receivable  transferred  by the  Transferor  hereunder  is an
Eligible Receivable on the date of the related Transfer,  and the Transferor has
the right to transfer such Receivable and all Related Security together with the
Contract  related thereto,  free and clear of any Adverse Claim,  other than the
effect of the  Agreement and the  transactions  contemplated  hereby.  Upon each
Transfer,  the  Administrative  Agent (for the benefit of the Transferees)  will
acquire a valid and perfected first priority  interest in each Receivable and in
the Related  Security  (except to the extent noted above) and  Collections  with
respect thereto. No effective financing statement or other instrument similar in
effect covering any Related  Contract or any Receivable or the Related  Security
or Collections  with respect  thereto is on file in any recording  office except
for those filed in favor of the  Administrative  Agent relating to the Agreement
and those filed by the Transferor pursuant to the Transfer Agreement.

         (i) Each Transferor Report (if prepared by the Originator or one of its
Affiliates,  or to the extent that information  contained therein is supplied by
the Transferor, the Originator or any Affiliate thereof), information,  exhibit,
financial  statement,  document,  book,  record  or  report  furnished  or to be
furnished at any time by or on behalf of the Transferor or the Originator to the
Administrative  Agent or any  Transferee in connection  with the Agreement is or
will be accurate in all material respects as of its date or (except as otherwise
disclosed to the Administrative Agent or the Transferees, as the case may be, at
such time) as of the date so furnished,  and no such  document  contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary in order to make the statements  contained  therein,  in
the light of the circumstances under which they were made, not misleading.

         (j) The principal place of business and chief  executive  office of the
Transferor and the office where the Transferor keeps its records  concerning the
Receivables are located at the respective addresses identified on Exhibit VI.

         (k) The Outstanding Balance with respect to each Receivable,  as of the
date of Transfer of such  Receivable,  is correctly set forth on Schedule II (as
supplemented pursuant to Section 1.02(a)).

         (l)  Schedule II (as  supplemented  pursuant to Section  1.02(a))  sets
forth  accurately  and  completely in all material  respects,  as of the date of
Transfer  of  each  Receivable,  the  information  with  respect  to  each  such
Receivable transferred on such date.

         (m) Each  Contract  giving rise to a  Receivable  provides for Periodic
Payments that will fully amortize such  Receivable over the term of the Contract
related thereto and the Transferor has not extended the maturity or adjusted the
Outstanding Balance of any Receivable,  or amended, modified or waived the terms
of any  Receivable  or any  Contract  relating to any  Receivable  such that the
interests of the Administrative Agent or the Transferees would be materially and
adversely affected thereby.

                                   Exh. III-2

<PAGE>


         (n) The  Transferor  is not known by and does not use any  tradename or
doing-business-as name.

         (o) The  Transferor was formed on February 16, 2001. The Transferor has
no Subsidiaries.

         (p) (i) The fair value of the  property  of the  Transferor  is greater
than the total amount of liabilities,  including contingent liabilities,  of the
Transferor,  (ii) the present fair salable value of the assets of the Transferor
is not  less  than  the  amount  that  will  be  required  to pay  all  probable
liabilities of the Transferor on its debts as they become  absolute and matured,
(iii) the  Transferor  does not intend to,  and does not  believe  that it will,
incur debts or liabilities  beyond the Transferor's  abilities to pay such debts
and  liabilities  as they  mature and (iv) the  Transferor  is not  engaged in a
business  or a  transaction,  and is not  about to  engage  in a  business  or a
transaction,  for which the Transferor's property would constitute  unreasonably
small capital.

         (q) With respect to each Receivable, the Transferor shall have received
such  Receivable  from the  Originator  in  exchange  for  payment  (made by the
Transferor to the  Originator in accordance  with the provisions of the Transfer
Agreement)  of  cash in an  amount  which  constitutes  fair  consideration  and
reasonably  equivalent  value.  Each such transfer  referred to in the preceding
sentence  shall not have been made for or on account of an antecedent  debt owed
by the  Originator to the  Transferor and no such transfer is or may be voidable
or subject to avoidance under any section of the Federal Bankruptcy Code.

         (r)  With  respect  to  each  Receivable  transferred  hereunder,  such
Receivable is representative of all of the Receivables owned by the Transferor.

         (s) Schedule III sets forth  accurately  and completely in all material
respects,  as of the Closing Date,  the identity of all Lock-Box  Banks to which
the Obligors have been instructed to make payments in respect of the Receivables
and  the  account  numbers  of all  accounts  into  which  Collections  will  be
deposited.

                                   Exh. III-3

<PAGE>


                                   EXHIBIT IV

                                    COVENANTS

         Until the  Termination  Date,  unless the  Administrative  Agent  shall
otherwise consent in writing:

         (a)  Compliance  with Laws,  Etc.  The  Transferor  will  comply in all
material  respects with all applicable laws,  rules,  regulations and orders and
preserve  and  maintain  its  limited  liability  company   existence,   rights,
franchises,  qualifications and privileges except to the extent that the failure
so to comply with such laws, rules and regulations or the failure so to preserve
and maintain such existence,  rights, franchises,  qualifications and privileges
would not materially  adversely affect the  collectibility of the Receivables or
the ability of the Transferor to perform its  obligations  under the Transaction
Documents.

         (b) Offices, Records and Books of Account. The Transferor will keep its
principal place of business and chief  executive  office and the office where it
keeps  its  records  concerning  the  Receivables  (and all  original  documents
relating  thereto) at the  respective  addresses  set forth on Exhibit VI of the
Agreement or, upon 30 days' prior written notice to the Administrative Agent, at
any other locations in jurisdictions  where all actions reasonably  requested by
the Administrative  Agent to protect and perfect the interest in the Receivables
have been taken and completed.  The Transferor  also will maintain and implement
administrative  and operating  procedures  (including,  without  limitation,  an
ability to recreate records  evidencing the Receivables and Related Contracts in
the event of the  destruction of the originals  thereof),  and keep and maintain
all documents,  books,  records and other  information  reasonably  necessary or
advisable for the collection of all Receivables (including,  without limitation,
records adequate to permit the daily  identification  of each Receivable and all
Collections of and adjustments to each Receivable).

         (c) Performance  and Compliance  with Related  Contracts and Credit and
Collection Policy. The Transferor will, at its expense, timely and fully perform
and comply with all material  provisions,  covenants and other promises required
to be observed by it under the Related Contracts, and timely and fully comply in
all material  respects with the Credit and  Collection  Policy in regard to each
Receivable and the Related Contract.

         (d)  Sales,  Liens,  Etc.  The  Transferor  will not sell,  assign  (by
operation of law or otherwise)  or otherwise  dispose of, or create or suffer to
exist any Adverse Claim upon or with respect to, its interest in any  Receivable
transferred to the  Administrative  Agent or the Transferees under the Agreement
or any Related Security, Related Contract or Collections, or assign any right to
receive income in respect thereof.

         (e) Extension or Amendment of the Receivables. The Transferor will not,
and will not permit the  Collection  Agent to, extend the maturity or adjust the
Outstanding  Balance  of any  Receivable  or  otherwise  modify the terms of any
Receivable,  or  amend,  modify or waive any term or  condition  of any  Related
Contract such that the interests of the Administrative  Agent or the Transferees
would be materially and adversely affected thereby.

                                    Exh. IV-1


<PAGE>

         (f)  Change  in  Business  or Credit  and  Collection  Policy.  (i) The
Transferor  will not make any change in the character of its business,  and (ii)
the  Transferor  will not make,  and will not permit the Originator to make, any
change  in the  Credit  and  Collection  Policy  that  would,  in  either  case,
materially adversely affect the collectibility of the Receivables or the ability
of the  Transferor or the  Originator to perform  their  respective  obligations
under the Transaction Documents.

         (g) Change in Payment Instructions to Obligors;  List of Lock-Box Banks
and  Related  Accounts.   The  Transferor  will  not  make  any  change  in  its
instructions to Obligors of Related Contracts  regarding  payments to be made to
the Transferor unless the Administrative Agent shall have received notice of and
agreed to such addition, termination or change. On or prior to the Closing Date,
the  Transferor  will  provide the  Administrative  Agent a list of all Lock-Box
Banks to which  the  Obligors  have been  instructed  to make  payments  and the
account numbers of all accounts into which  Collections are deposited,  and will
promptly notify the Administrative Agent of any change in the foregoing.

         (h) Further Action  Evidencing the Transfer.  The Transferor  will from
time to time, execute and deliver all further instruments and documents and take
all further action that the Administrative Agent may reasonably request in order
to perfect, protect or more fully evidence the interest in the Receivables,  the
Related Contracts, and the Related Security and Collections with respect thereto
transferred  to the  Administrative  Agent (for the benefit of the  Transferees)
under the Agreement or to enable the  Administrative  Agent or any Transferee to
exercise or enforce any of its rights under the Transaction  Documents.  Without
limiting the generality of the foregoing, the Transferor will, or will cause the
Collection  Agent to,  (i)  execute  and file  such  financing  or  continuation
statements,  or  amendments  thereto  or  assignments  thereof,  and such  other
instruments  or notices,  as may be necessary or  appropriate  and (ii) upon the
occurrence of a Trigger Event, a Potential Trigger Event, a Servicer Termination
Event or a Potential  Servicer  Termination  Event, (x) mark  conspicuously each
Related  Contract  with  a  legend,  acceptable  to  the  Administrative  Agent,
evidencing  that an  interest  in the  Receivable  has been  transferred  to the
Administrative  Agent (for the benefit of the Transferees)  under the Agreement;
and (y) code the Collection  Agent's master data processing  records  evidencing
Receivables and Related Contracts to the foregoing effect. The Transferor hereby
authorizes  the   Administrative   Agent  to  file  one  or  more  financing  or
continuation  statements,   and  amendments  thereto  and  assignments  thereof,
relative to all or any of the Receivables and the Related  Security  without the
signature  of the  Transferor  where  permitted  by law.  A  photocopy  or other
reproduction of the Agreement shall be sufficient as a financing statement where
permitted  by law. If the  Transferor  fails after  notice to perform any of its
agreements or obligations under the Transaction  Documents,  the  Administrative
Agent may (but shall not be required to) itself  perform,  or cause  performance
of, such agreement or obligation,  and the expenses of the Administrative  Agent
incurred in connection therewith shall be payable as provided in the Agreement.

         (i)  Assembly of  Documents.  The  Transferor  will,  or will cause the
Collection  Agent  to,  at the  Administrative  Agent's  request  following  the
occurrence of a Trigger Event, a Potential Trigger Event, a Servicer Termination
Event or a Potential  Servicer  Termination  Event,  (A) assemble all documents,
instruments and other records (including, without limitation, computer tapes and
disks) which evidence or relate to the  Receivables,  and the Related  Contracts
and Related Security,  or which are otherwise  necessary or desirable to collect
the Receivables,  and make the same available to the  Administrative  Agent at a
place selected by the  Administrative

                                    Exh. IV-2

<PAGE>

Agent or its designee,  and (B) segregate all cash, checks and other instruments
received  by  it  or  the  Collection  Agent  from  time  to  time  constituting
Collections of Receivables in a manner  acceptable to the  Administrative  Agent
and shall,  promptly upon receipt,  remit all such cash, checks and instruments,
duly  endorsed  or  with  duly  executed   instruments   of  transfer,   to  the
Administrative Agent or its designee.

         (j) Delivery of List of Related  Contracts.  The Transferor  will on or
prior  to the  date of each  Transfer,  deliver  to the  Administrative  Agent a
complete and accurate list of each Related Contract,  together with the contract
number, the name of the Obligor and the Outstanding Balance thereof.

         (k)  Reporting  Requirements.   The  Transferor  will  provide  to  the
Administrative  Agent (in multiple  copies,  if requested by the  Administrative
Agent) the following:

                  (i) as soon as available and in any event within 60 days after
         the  end of the  first  three  quarters  of  each  fiscal  year  of the
         Originator, balance sheets of the Originator and its Subsidiaries as of
         the end of such quarter and statements of income and retained  earnings
         of the Originator and its Subsidiaries for the period commencing at the
         end of the  previous  fiscal  year  and  ending  with  the  end of such
         quarter, certified by the chief financial officer of the Originator;

                  (ii) as soon as  available  and in any event  within  120 days
         after  the end of each  fiscal  year of the  Originator,  a copy of the
         annual  report for such year for the  Parent  and the Annual  Report on
         Form 10-K for the Originator and its Subsidiaries, containing financial
         statements  for such year  audited by Price  Waterhousecoopers  LLP, or
         other independent public  accountants  acceptable to the Administrative
         Agent;

                  (iii) as soon as  possible  and in any event  within five days
         after the  occurrence of each Trigger Event,  Potential  Trigger Event,
         Servicer  Termination Event or Potential Servicer  Termination Event, a
         statement  of the chief  financial  officer of the  Transferor  setting
         forth details of such Trigger Event,  Potential Trigger Event, Servicer
         Termination Event or Potential Servicer  Termination Event, as the case
         may be, and the action that the  Transferor  has taken and  proposes to
         take with respect thereto;

                  (iv) promptly after the sending or filing  thereof,  copies of
         all reports that the  Originator  sends to any of its  securityholders,
         and  copies  of  all  reports  and  registration  statements  that  the
         Originator or any  Subsidiary  files with the  Securities  and Exchange
         Commission or any national securities exchange;

                  (v) promptly after the filing or receiving thereof,  copies of
         all reports and notices that the  Originator or any Affiliate of either
         thereof  files under  ERISA with the  Internal  Revenue  Service or the
         Pension Benefit Guaranty Corporation or the U.S. Department of Labor or
         that the  Originator or any Affiliate of either  thereof  receives from
         any of the foregoing or from any multiemployer plan (within the meaning
         of  Section  4001(a)(3)  of  ERISA)  to  which  the  Originator  or any
         Affiliate of either thereof is or was, within the preceding five years,
         a contributing  employer,  in each case in respect of the assessment of
         withdrawal  liability  or an event or  condition  which  could,  in the
         aggregate,

                                    Exh. IV-3

<PAGE>


         result in the  imposition  of liability  on the  Originator  and/or
         any such Affiliate in excess of $5,000,000;

                  (vi) at least ten  Business  Days  prior to any  change in the
         Transferor's or Originator's  name, a notice setting forth the new name
         and the effective date thereof;

                  (vii)  promptly,  from time to time,  such other  information,
         documents,  records  or  reports  respecting  the  Receivables  or  the
         condition or operations, financial or otherwise, of the Transferor, the
         Originator or any of its subsidiaries as the  Administrative  Agent may
         from time to time reasonably request;

                  (viii)  promptly  after  the  Transferor   obtains   knowledge
         thereof,  notice of any (a)  litigation,  investigation  or  proceeding
         which may exist at any time between the  Transferor  or the  Originator
         and any  governmental  authority which, in either case, if not cured or
         if  adversely  determined,  as the case may be,  would  have a material
         adverse  effect on the business,  operations,  property or financial or
         other condition of the Transferor or the Originator;  (b) litigation or
         proceeding  adversely affecting the Transferor's ability to perform its
         obligations under the Transaction Documents or the Originator's ability
         to perform their  obligations  under the  Transaction  Documents or (c)
         litigation or  proceeding  adversely  affecting  the  Transferor or the
         Originator in which in the case of the Originator,  the amount involved
         is  $10,000,000  or more  and not  covered  by  insurance  or in  which
         injunctive or similar relief is sought;

                  (ix)  promptly  after  the  occurrence  thereof,  notice  of a
         material  adverse  change  in the  business,  operations,  property  or
         financial or other condition of the Transferor or the Originator;

                  (x) promptly after the Transferor  obtains knowledge  thereof,
         notice of any "Event of Termination",  "Incipient Event of Termination"
         or "Facility Termination Date" under the Transfer Agreement;

                  (xi) so long as any Capital shall be  outstanding,  as soon as
         possible and in any event no later than the day of occurrence  thereof,
         notice that the Originator has stopped  selling or  contributing to the
         Transferor,   pursuant  to  the  Transfer   Agreement,   newly  arising
         Receivables;

                  (xii) at the time of the delivery of the financial  statements
         provided for in clauses (i) and (ii) of this  paragraph,  a certificate
         of the chief  financial  officer or the treasurer of the  Transferor to
         the effect that, to the best of such  officer's  knowledge,  no Trigger
         Event, Potential Trigger Event, Servicer Termination Event or Potential
         Servicer  Termination  Event has occurred and is continuing  or, if any
         such Trigger Event, Potential Trigger Event, Servicer Termination Event
         or Potential Servicer Termination Event has occurred and is continuing,
         specifying the nature and extent thereof; and

                  (xiii) promptly after receipt  thereof,  copies of all notices
         received  by the  Transferor  from the  Originator  under the  Transfer
         Agreement.


                                    Exh. IV-4

<PAGE>


         (l)  Separateness.  (i) The Transferor shall at all times be managed by
an entity which has at least one independent director,  who (x) is not currently
and has not been during the five years  preceding  the date on which such Person
became an independent director, an officer, director or employee of an Affiliate
of the  Originator  or any Other  Corporation,  (y) is not a  current  or former
officer or employee of the  Originator and (z) is not a stockholder of any Other
Corporation or any of their respective Affiliates.

                  (ii) The  Transferor  shall not direct or  participate  in the
         management of any other entity's operations.

                  (iii) The Transferor shall conduct its business from an office
         separate from that of any other entity (but which may be located in the
         same facility as one or more of the Other Corporations).

                  (iv)  The   Transferor   shall  at  all  times  be  adequately
         capitalized in light of its contemplated business.

                  (v) The  Transferor  shall at all  times  provide  for its own
         operating expenses and liabilities from its own funds.

                  (vi) The Transferor shall maintain its assets and transactions
         separately  from those of any other  entity and reflect such assets and
         transactions in financial  statements  separate and distinct from those
         of any other  entity  and  evidence  such  assets and  transactions  by
         appropriate  entries in books and records  separate and  distinct  from
         those of any other entity.  The Transferor shall hold itself out to the
         public under the  Transferor's  own name as a legal entity separate and
         distinct from all other entities.  The Transferor shall not hold itself
         out  as  having  agreed  to  pay,  or as  being  liable,  primarily  or
         secondarily, for, any obligations of any other entity.

                  (vii) The Transferor shall not become liable as a guarantor or
         otherwise  with respect to any Debt or  contractual  obligation  of any
         other entity.

                  (viii)  The   Transferor   shall  not  make  any   payment  or
         distribution  of assets  with  respect to any  obligation  of any other
         entity or grant an  Adverse  Claim on any of its  assets to secure  any
         obligation of any other entity.

                  (ix)  The  Transferor  shall  not  make  loans,   advances  or
         otherwise extend credit to any other entity.

                  (x) Each of the  Transferor's  sole member and  manager  shall
         hold regular duly noticed meetings of its respective Board of Directors
         and make and retain minutes of such meetings.

                  (xi) The  Transferor  shall  have  bills  of sale (or  similar
         instruments  of  assignment)  and,  if  appropriate,   UCC-1  financing
         statements, with respect to all assets purchased from any other entity.


                                    Exh. IV-5

<PAGE>


                  (xii) The Transferor  shall not engage in any transaction with
         any  of  the   Other   Corporations,   except  as   permitted   by  its
         organizational documents.

         (m) Transfer Agreement.  The Transferor will not amend, waive or modify
any provision of the Transfer Agreement or waive the occurrence of any "Event of
Termination"  under  the  Transfer  Agreement,  without  in each  case the prior
written consent of the Administrative  Agent. The Transferor will perform all of
its obligations  under the Transfer  Agreement in all material respects and will
enforce the  Transfer  Agreement  in  accordance  with its terms in all material
respects.

         (n) Nature of Business.  The Transferor will not engage in any business
other than the purchase of Receivables,  Related  Security and Collections  from
the  Originator  and  the  transactions   contemplated  by  the  Agreement.  The
Transferor will not create or form any Subsidiary.

         (o)  Mergers,  Etc.  The  Transferor  will  not  merge  with or into or
consolidate  with or into, or convey,  transfer,  lease or otherwise  dispose of
(whether  in  one  transaction  or  in  a  series  of   transactions),   all  or
substantially all of its assets (whether now owned or hereafter acquired) to, or
acquire  all or  substantially  all of the  assets  or  capital  stock  or other
ownership interest of, or enter into any joint venture or partnership  agreement
with, any Person,  other than as  contemplated by the Agreement and the Transfer
Agreement.

         (p)  Distributions,  Etc. The  Transferor  will not declare or make any
dividend  payment or other  distribution of assets,  properties,  cash,  rights,
obligations  or  securities  on  account  of  any  membership  interest  in  the
Transferor,  or return any capital to its members as such, or purchase,  retire,
defease, redeem or otherwise acquire for value or make any payment in respect of
any membership interest in the Transferor or any warrants,  rights or options to
acquire any such shares, now or hereafter outstanding;  provided,  however, that
the  Transferor  may  declare  and  pay  cash  distributions  on its  membership
interests to its members so long as (i) no Trigger  Event or  Potential  Trigger
Event  shall  then  exist  or  would  occur  as  a  result  thereof,  (ii)  such
distributions are in compliance with all applicable law including the law of the
state of  Delaware,  and  (iii)  such  distribution  have been  approved  by all
necessary and appropriate action of the Transferor.

         (q) Debt. The Transferor  will not incur any Debt,  other than any Debt
incurred pursuant to the Agreement and the Transfer Agreement.

         (r) Limited Liability Company Agreement.  The Transferor will not amend
or delete Section 5.1 or 5.5 of its Limited Liability Company Agreement.

         (s) Changes in Name, Identity,  Corporate Structure and Jurisdiction of
Organization.  The Transferor  shall not change its name,  identity or corporate
structure or change the location of its  jurisdiction of organization  unless it
shall have: (i) given the Administrative Agent at least (60) days' prior written
notice  thereof and (ii)  delivered to the  Administrative  Agent all  financing
statements,  instruments and other documents required to maintain the perfection
and  first  priority  of the sale and  assignment  of the  Receivables,  Related
Security and Collections from the Transferor to the Administrative Agent for its
benefit and the ratable benefit of the Transferees pursuant to this Agreement.


                                    Exh. IV-6

<PAGE>


         (t) Covenant of the Transferor and the Originator.  Until the latest of
the Facility  Termination  Date, the date on which no Capital of or Yield on any
Receivable  shall  be  outstanding  or the date all  other  amounts  owed by the
Transferor  hereunder to the Transferees or the Administrative Agent are paid in
full,  each of the  Transferor  and the  Originator  will,  at their  respective
expense,  from time to time during  regular  business  hours as requested by the
Administrative   Agent,  permit  the  Administrative  Agent  or  its  agents  or
representatives  (including  independent  public  accountants,  which may be the
Transferor's or the Originator's independent public accountants), (i) to conduct
periodic audits of the  Receivables,  the Related Security and the related books
and records and collections systems of the Transferor or the Originator,  as the
case may be, (ii) to examine and make  copies of and  abstracts  from all books,
records and documents (including, without limitation,  computer tapes and disks)
in the possession or under the control of the Transferor or the  Originator,  as
the case may be,  relating to Receivables and the Related  Security,  including,
without limitation, the Contracts, and (iii) to visit the offices and properties
of the  Transferor  or the  Originator,  as the case may be, for the  purpose of
examining such materials  described in clause (ii) above, and to discuss matters
relating to the Receivables and the Related  Security or the Transferor's or the
Originator's  performance under the Transaction Documents or under the Contracts
with any of the officers or employees of the  Transferor or the  Originator,  as
the case  may be,  having  knowledge  of such  matters.  In  addition,  upon the
Administrative  Agent's request at least once per year, the Transferor  will, at
its expense, appoint independent public accountants (which may, with the consent
of the  Administrative  Agent, be the Transferor's  regular  independent  public
accountants), or utilize the Administrative Agent's representatives or auditors,
to prepare and deliver to the Administrative Agent a written report with respect
to the  Receivables  and the Credit and Collection  Policy  (including,  in each
case, the systems,  procedures and records relating thereto) on a scope and in a
form reasonably requested by the Administrative Agent.


                                    Exh. IV-7

<PAGE>



                                    EXHIBIT V

                                 TRIGGER EVENTS

         Each of the following,  unless waived in writing by the  Administrative
Agent  (other than as set forth in clauses  (h) or (n),  neither of which can be
waived), shall be a "Trigger Event":

         (a) The Collection  Agent (if the Originator or any of its  Affiliates)
(i) shall fail to perform or observe any term,  covenant or agreement  under the
Agreement  (other than as referred to in clause (ii) of this  paragraph (a)) and
such failure shall remain  unremedied  for three  Business Days after receipt of
notice or  actual  knowledge  thereof  or (ii)  shall  fail to make when due any
payment or deposit to be made by it under the Agreement; or

         (b) The Transferor or the Originator  shall fail (i) to transfer to the
Administrative  Agent when requested any rights  pursuant to the Agreement which
the  Transferor or the Originator  then has as Collection  Agent or otherwise or
(ii) to make any payment  required  under Section 1.03 or 3.03 of the Agreement;
or

         (c)  Any  representation  or  warranty  made by the  Transferor  or the
Originator  (or  any  of  their  respective   officers)  under  the  Transaction
Documents,  or any  information  or report  delivered by the  Transferor  or the
Originator  pursuant  to the  Transaction  Documents  shall  prove to have  been
incorrect or untrue in any material respect when made or delivered; or

         (d) The  Transferor  shall fail to perform or observe  any other  term,
covenant or agreement  contained in the Transaction  Documents on its part to be
performed or observed and any such failure shall remain  unremedied for ten days
after  written  notice  thereof  shall have been given to the  Transferor by the
Administrative Agent; or

         (e) The Originator shall fail to perform or observe any term,  covenant
or agreement contained in the Transaction  Documents on its part to be performed
or observed and any such  failure  shall  remain  unremedied  for ten days after
written  notice  thereof  shall  have  been  given  to  the  Originator  by  the
Administrative  Agent (or,  with respect to a failure to deliver the  Transferor
Report  pursuant to Section  4.02 of the  Agreement  such  failure  shall remain
unremedied for three days, without a requirement for notice); or

         (f) Any member of the IKON Group or any  Subsidiary  thereof shall fail
to pay any  principal  of or  premium  or  interest  on any of its Debt which is
outstanding in a principal amount of at least  $10,000,000 in the aggregate when
the same  becomes  due and  payable  (whether by  scheduled  maturity,  required
prepayment,  acceleration, demand or otherwise), and such failure shall continue
after the  applicable  grace  period,  if any,  specified  in the  agreement  or
instrument  relating to such Debt;  or any other event shall occur or  condition
shall  exist under any  agreement  or  instrument  relating to any such Debt and
shall  continue  after the applicable  grace period,  if any,  specified in such
agreement  or  instrument,  if the  effect  of such  event  or  condition  is to
accelerate,  or to permit the acceleration of, the maturity of such Debt; or any
such Debt shall be  declared  to be due and  payable,  or required to be prepaid
(other than by a regularly scheduled required prepayment),  redeemed,  purchased
or defeased,  or an offer to repay, redeem,  purchase

                                    Exh. V-1

<PAGE>


or defease  such Debt shall be  required  to be made,  in each case prior to the
stated maturity thereof; or

         (g) Any Transfer shall for any reason cease to create,  or the interest
of  the  Administrative  Agent  (for  the  benefit  of the  Transferees)  in any
Receivable  shall  for any  reason  cease to be,  a valid  and  perfected  first
priority  interest in each  Receivable and the Related  Security and Collections
with respect thereto;  or the security interest created pursuant to Section 1.11
shall for any reason cease to be a valid first priority security interest in the
collateral security referred to in such Section; or

         (h) Any  member  of the IKON  Group  or any  Subsidiary  thereof  shall
generally  not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general assignment for
the benefit of creditors;  or any  proceeding  shall be instituted by or against
any such member or any of its  Subsidiaries  seeking to adjudicate it a bankrupt
or insolvent, or seeking liquidation,  winding up, reorganization,  arrangement,
adjustment,  protection, relief, or composition of it or its debts under any law
relating to bankruptcy,  insolvency or reorganization  or relief of debtors,  or
seeking  the entry of an order  for  relief or the  appointment  of a  receiver,
trustee,  custodian or other similar official for it or for any substantial part
of its property and, in the case of any such  proceeding  instituted  against it
(but not instituted by it), either such proceeding  shall remain  undismissed or
unstayed  for a  period  of 30  days,  or any  of the  actions  sought  in  such
proceeding  (including,  without  limitation,  the entry of an order for  relief
against, or the appointment of a receiver,  trustee,  custodian or other similar
official for, it or for any  substantial  part of its property)  shall occur; or
any member of the IKON Group or any of its Subsidiaries shall take any corporate
action to authorize any of the actions set forth above in this paragraph (h); or

         (i) As of the  last  day of any  calendar  month:  (i) the  Three-Month
Rolling Average Delinquency Ratio exceeds 10.00% or (ii) the Three-Month Rolling
Average Default Ratio exceeds 12.00%; or

         (j) There  shall  have  occurred  any  material  adverse  change in the
business, operations, property or financial or other condition of the Originator
since September 30, 2000, or the Transferor since the date of its formation;  or
there shall have occurred any event which may  materially  adversely  affect the
collectibility  of the  Receivables,  the ability of the Collection Agent or the
Transferor to collect the  Receivables  or the ability of the  Originator or the
Transferor  to  perform  its  respective   obligations   under  the  Transaction
Documents; or

         (k) An "Event of  Termination"  or  "Facility  Termination  Date" shall
occur under the Transfer Agreement,  or the Transfer Agreement shall cease to be
in full force and effect; or

         (l) All of the members'  interests of the Transferor  shall cease to be
owned, directly or indirectly, by the Originator; or

         (m) On any Settlement  Date, (a) the aggregate  Outstanding  Balance of
all Eligible Receivables is less than (b) the Required Balance; or

         (n) The Transferor shall fail to comply with the covenant  contained in
clause (k)(x) of Exhibit IV; or


                                    Exh. V-2

<PAGE>


         (o)  The   Transferor   shall   have   failed  to  effect  a   Take-Out
Securitization  at least once in each consecutive  18-month period following the
initial Transfer.






                                    Exh. V-3

<PAGE>




                                   EXHIBIT VI

         The  principal  place of business  and chief  executive  offices of the
Transferor are located at:

                               IKON FUNDING-3, LLC
                                 1738 Bass Road
                              Macon, Georgia 31210

         The  original  records  concerning  the  Receivables  (and all original
documents  related  thereto) are located at the offices of the Collection  Agent
at:

                                IOS CAPITAL, LLC
                                 1738 Bass Road
                              Macon, Georgia 31210

                                   Exh. VI-1

<PAGE>






                                                               ANNEX A

                                Form of Contract




                                   Exh. VI-2


<PAGE>




13048963 01705248

                                                               ANNEX B

                            Form of Transferor Report




                                   Exh. VI-3

<PAGE>




                                                               ANNEX C

                              FORM TRANSFER NOTICE

                              ______________, _____




DEUTSCHE BANK AG, NEW YORK BRANCH
31 West 52nd Street
New York, NY 10017
Attention: David McCollum


Ladies and Gentlemen:

         Reference  is  hereby  made to the  Amended  and  Restated  Receivables
Transfer  Agreement,  dated as of March __, 2003 (as  amended,  supplemented  or
otherwise modified,  the "Amended and Restated Receivables Transfer Agreement"),
among IKON Funding-3,  LLC, as Transferor,  IOS Capital,  LLC, as Originator and
Collection  Agent,  Gemini  Securitization  Corp.,  as Conduit  Transferee,  the
Alternate  Transferees from time to time party thereto and Deutsche Bank AG, New
York Branch,  as Administrative  Agent.  Capitalized terms used in this Transfer
Notice and not otherwise defined herein shall have the meanings assigned thereto
in the Amended and Restated Receivables Transfer Agreement.

         This letter  constitutes a Transfer  Notice pursuant to Section 1.02(a)
of the Amended and  Restated  Receivables  Transfer  Agreement.  The  Transferor
desires  to  effect a  Transfer  on  ____________,  _____ for  Consideration  of
$___________.1  The  aggregate  Outstanding  Balance  of the  Receivables  to be
transferred in connection  herewith is  $____________,  as shown on the attached
addendum  to  Schedule  II to the  Amended  and  Restated  Receivables  Transfer
Agreement.

         The  Transferor  hereby  represents and warrants as of the date hereof,
and as of the date of Transfer, as follows:

                  (i)  The  representations  and  warranties  of the  Transferor
         contained  in  Exhibit  III are  correct  on and as of the  date of the
         Transfer as though made on and as of such date;

                  (ii) The  representations  and  warranties  of the  Originator
         contained  in the  Transaction  Documents  are correct on and as of the
         date of the Transfer as though made on and as of such date;


-------------------------------------
1. Minimum account of $10,000,000 and increments of $100,000 in excess thereof.


                                    Exh. VI-4

<PAGE>


                  (iii) No event has occurred and is continuing, or would result
         from the  Transfer,  that  constitutes  a Trigger  Event,  a  Potential
         Trigger Event,  a Servicer  Termination  Event or a Potential  Servicer
         Termination Event;

                  (iv) The Facility Termination Date shall not have occurred;

                  (v) The  Aggregate  Capital  does  not  exceed  the  Aggregate
         Commitment;

                  (vi)  The  outstanding  Outstanding  Balance  of all  Eligible
         Receivables is not less than the Required Balance; and

                  (vii)  After  giving  effect to such  Transfer,  it will be in
         compliance with the hedging requirements set forth in Section 1.12.

         Attached hereto is a true and correct  schedule  setting forth detailed
information  regarding the Receivables to be included in the proposed  Transfer,
including  an addendum to  Schedule II to the Amended and  Restated  Receivables
Transfer Agreement.

         IN WITNESS WHEREOF,  the undersigned has caused this Transfer Notice to
be executed by its duly authorized officer as of the date first above written.

                                     IKON FUNDING-3, LLC


                                     By:
                                        ------------------------------
                                     Name:
                                     Title:



                                    Exh. VI-5

<PAGE>





                                                               ANNEX D

                             FORM OF PAYDOWN NOTICE

                              ______________, _____




DEUTSCHE BANK, AG, NEW YORK BRANCH
31 West 52nd Street
New York, NY 10017
Attention: David McCollum


Ladies and Gentlemen:

         Reference  is  hereby  made to the  Amended  and  Restated  Receivables
Transfer  Agreement,  dated as of March __, 2003 (as  amended,  supplemented  or
otherwise modified,  the "Amended and Restated Receivables Transfer Agreement"),
among IKON Funding-2,  LLC, as Transferor,  IOS Capital,  LLC, as Originator and
Collection  Agent,  Gemini  Securitization  Corp.,  as Conduit  Transferee,  the
Alternate  Transferees from time to time party thereto and Deutsche Bank AG, New
York Branch,  as Administrative  Agent.  Capitalized terms used in this Transfer
Notice and not otherwise defined herein shall have the meanings assigned thereto
in the Amended and Restated Receivables Transfer Agreement.

         This letter constitutes a Paydown Notice pursuant to Section 1.03(g) of
the Amended and Restated Receivables Transfer Agreement.  The Transferor desires
to reduce the Aggregate  Capital on  ____________,  _____2 by the application of
$___________  in cash to pay the  Aggregate  Capital  and Yield  accrued  and to
accrue (until such cash can be used to pay Commercial  Paper notes) with respect
to such Aggregate Capital,  together with all costs related to such reduction of
Capital.

         IN WITNESS WHEREOF,  the undersigned has caused this Transfer Notice to
be executed by its duly authorized officer as of the date first above written.

                                     IKON FUNDING-3, LLC


                                      By:_______________________________
                                      Name:
                                     Title:


-------------------------------------
2 Notice must be given at least ten Business Days' prior to the requested
paydown date, in the case of reductions in excess of $25,000,000, or at least
two Business Days' prior to the requested paydown date, in the case of
reductions of $25,000,000 or less.

                                   Exh. VI-6

<PAGE>





                                                               ANNEX E

                             FORM OF HEDGE AGREEMENT



                                   Exh. VI-7


<PAGE>





                                   SCHEDULE I

                          CREDIT AND COLLECTION POLICY


                                     Sch.-I

<PAGE>





                                   SCHEDULE II

                               LIST OF RECEIVABLES



                                    Sch.-II

<PAGE>




                                  SCHEDULE III

                             LIST OF LOCK-BOX BANKS
                             AND COLLECTION ACCOUNTS


Lock-box bank:                First Union National Bank, Philadelphia
Lock-boxes:                   Atlanta #931742
                              Atlanta  #931750  Atlanta  #740540 Atlanta #740541
                              Dallas   #650016  Dallas  #650073  Dallas  #850074
                              Dallas #850014 Langhorne #41564
Collection Account:           Account number 2000002649085 of IOS Capital, LLC
                              at First Union National Bank,
                              Philadelphia



                                    Sch.-III

<PAGE>



                                TABLE OF CONTENTS
                                                                      Page



                                    ARTICLE I
                          AMOUNTS AND TERMS OF TRANSFER

Section 1.01.    Facility.................................................1

Section 1.02.    Consideration and Terms..................................2

Section 1.03.    Settlement Procedures....................................3

Section 1.04.    Payment of Fees and Yield................................6

Section 1.05.    Payments and Computations, Etc...........................6

Section 1.06.    Increased Costs..........................................6

Section 1.07.    Requirements of Law......................................7

Section 1.08.    Inability to Determine Eurodollar Rate...................8

Section 1.09.    Breakage Costs...........................................8

Section 1.10.    Retransfer of Receivables................................8

Section 1.11.    Security Interest........................................9

Section 1.12.    Hedging Requirements....................................10

                                   ARTICLE II
            REPRESENTATIONS AND WARRANTIES; COVENANTS; TRIGGER EVENTS

Section 2.01.     Representations and Warranties; Covenants..............11

Section 2.02.     Trigger Events.........................................11

                                   ARTICLE III
                        INDEMNIFICATION, REPURCHASE, ETC

Section 3.01.     Indemnities by the Transferor..........................12

Section 3.02.     [RESERVED].............................................13

Section 3.03.     Repurchase of Ineligible and Certain Other
                  Receivables ...........................................13


                                   ARTICLE IV
                  ADMINISTRATION AND COLLECTION OF RECEIVABLES

Section 4.01.     Designation of Collection Agent........................14

Section 4.02.     Duties of Collection Agent.............................14

Section 4.03.     Certain Rights of the Administrative Agent.............15

Section 4.04.     Rights and Remedies....................................16

Section 4.05.     Further Actions Evidencing Transfers...................16

Section 4.06.     Covenants of the Collection Agent and the Originator
                  (a) Audits ............................................17

Section 4.07.     Indemnities by the Collection Agent....................17

Section 4.08.     Collection Account Agreement...........................18


                                       i

<PAGE>
                               Table of Contents
                                   (continued)

                                    ARTICLE V
                                  MISCELLANEOUS

Section 5.01.     Amendments, Etc........................................19

Section 5.02.     Notices, Etc...........................................19

Section 5.03.     Assignability..........................................20

Section 5.04.     Costs, Expenses and Taxes..............................21

Section 5.05.     No Proceedings; Limitation on Payments.................22

Section 5.06.     Confidentiality........................................22

Section 5.07.     GOVERNING LAW..........................................23

Section 5.08.     Execution in Counterparts..............................23

Section 5.09.     Termination............................................23

Section 5.10.     Tax Treatment..........................................23

Section 5.11.     Agent Conflict Waiver..................................23

                                       ii


<PAGE>



                                    EXHIBITS

EXHIBIT I.........--       Definitions
EXHIBIT II........--       Conditions of the Transfer
EXHIBIT III.......--       Representations and Warranties
EXHIBIT IV........--       Covenants
EXHIBIT V.........--       Form of Paydown Notice
EXHIBIT VI........--       Principal Place of Business and Location of Records

                                     ANNEXES

ANNEX A  --.......Form of Contract
ANNEX B  --.......Form of Transferor Report
ANNEX C  --.......Form of Transfer Notice
ANNEX D  --.......Form of Paydown Notice
ANNEX E  --.......Form of Hedge Agreement

                                    SCHEDULES

SCHEDULE I........--       Credit and Collection Policy

SCHEDULE II.......--       List of Receivables

SCHEDULE III......--       List of Lock-Box Banks and Collection Accounts||


                                      -iii-






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