Exhibit 10.2

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT by and between MicroFinancial
Incorporated, a Massachusetts corporation, and its subsidiaries (the “Company”),
and Steven LaCreta (the “Executive”), dated as of February 1, 2013 (this
“Agreement”).

WHEREAS, Executive and the Company entered into an Employment Agreement dated as
of May 5, 2005, as amended December 24, 2008 (as amended from time to time, the
“2005 Employment Agreement”) to assure that the Company would have the continued
dedication of the Executive, notwithstanding the possibility, threat or
occurrence of a Change of Control of the Company;

WHEREAS, in order to encourage the Executive’s continued attention and
dedication to the Company, the Board of Directors of the Company (the “Board”),
has determined that it is in the best interests of the Company and its
shareholders to amend and restate the 2005 Employment Agreement, which provides
the Executive with additional severance arrangements whether or not a Change of
Control of the Company occurs and to make other amendments to the Original
Agreement, subject to the terms set forth herein; and

WHEREAS, in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement which shall amend and supersede in its
entirety the Original Agreement (and any and all prior oral and written
agreements and understandings with respect to the Original Agreement) as
follows:

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Certain Definitions.

(a) The “Effective Date” shall mean the first date during the Change of Control
Period (as defined in Section 1(b)) on which a Change of Control occurs.
Anything in this Agreement to the contrary notwithstanding, if a Change of
Control occurs and if the Executive’s employment with the Company is terminated
prior to the date on which the Change of Control occurs, and if it is reasonably
demonstrated by the Executive that such termination of employment (i) was at the
request of a third party who has taken steps reasonably calculated to effect the
Change of Control or (ii) otherwise arose in connection with or anticipation of
the Change of Control, then for all purposes of this Agreement the “Effective
Date” shall mean the date immediately prior to the date of such termination of
employment.

(b) The “Change of Control Period” shall mean the period commencing on the date
hereof and ending on third anniversary of the date of such date; provided,
however, that commencing on the first anniversary of the date hereof, and on
each annual anniversary of such date (such date and each annual anniversary
thereof shall be hereinafter referred to as the “Renewal Date”), the Change of
Control Period shall be automatically extended so as to terminate three
(3) years from such Renewal Date, unless at least sixty (60) days prior to the
Renewal Date the Company shall give notice to the Executive that the Change of
Control Period shall not be so extended.

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2. Change of Control. For the purpose of this Agreement, a “Change of Control”
shall mean:

(a) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”), including an acquisition pursuant to 11
U.S.C. § 1129 et passim, of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 50% or more of either (i) the then
outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”) or;

(b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board or
are divested of possession by appointment of a trustee pursuant to Chapter 7 or
11 of the United States Bankruptcy Code; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company’s shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board; or

(c) Approval by the shareholders of the Company, or, in the instance of
proceedings for the Company pursuant to Chapter 7 or Chapter 11 of the United
States Bankruptcy Code, approval by the bankruptcy judge, of a reorganization,
merger or consolidation, in each case, unless, following such reorganization,
merger or consolidation, more than 60% of, respectively, the then outstanding
shares of common stock of the corporation resulting from such reorganization,
merger or consolidation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be; or

(d) Approval by the shareholders, or, in the instance of proceedings for the
Company pursuant to Chapter 7 or Chapter 11 of the United States Bankruptcy
Code, approval by the bankruptcy judge, of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other disposition
of all or substantially all of the assets of the Company.

 

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3. Change of Control Employment Period. The Company hereby agrees to continue
the Executive in its employ, and the Executive hereby agrees to remain in the
employ of the Company, in accordance with the terms and provisions of this
Agreement, for the period commencing on the Effective Date and ending (subject
to the terms hereof) on the day following the first anniversary of such date
(the “Change of Control Employment Period”); provided, however, that the Change
of Control Employment Period shall be automatically extended upon its expiration
for successive periods of one (1) month each, in full accordance with the terms
and provisions of this Agreement.

4. Terms of Employment during Change of Control Employment Period.

(a) Position and Duties.

(i) During the Change of Control Employment Period, (A) the Executive’s position
(including status, offices, titles and reporting requirements), authority,
duties and responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and assigned at any
time during the 90-day period immediately preceding the Effective Date and
(B) the Executive’s services shall be performed at the location where the
Executive was employed immediately preceding the Effective Date or any office
which is the headquarters of the Company and is less than 35 miles from such
location.

(ii) During the Change of Control Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal business hours to
the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive’s reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Change of Control Employment Period it shall not be
a violation of this Agreement for the Executive to (A) serve on corporate, civic
or charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executive’s responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly understood and agreed that to
the extent that any such activities have been conducted by the Executive prior
to the Effective Date, the continued conduct of such activities (or the conduct
of activities similar in nature and scope thereto) subsequent to the Effective
Date shall not thereafter be deemed to interfere with the performance of the
Executive’s responsibilities to the Company.

(b) Compensation during Change of Control Employment Period.

(i) Base Salary. During the Change of Control Employment Period, the Executive
shall receive an annual base salary (“Annual Base Salary”), which shall be paid
in equal installments on a monthly basis, at least equal to twelve times the
highest monthly base salary paid or payable to the Executive by the Company and
its affiliated companies in respect of the twelve-month period immediately
preceding the month in which the Effective Date occurs. During the Change of
Control Employment Period, the Annual Base Salary shall be reviewed at least
annually and shall be increased at any time and from time to time as shall be
substantially consistent with increases in base salary generally awarded in the
ordinary course of business to

 

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other peer executives of the Company and its affiliated companies. Any increase
in Annual Base Salary shall not serve to limit or reduce any other obligation to
the Executive under this Agreement. Annual Base Salary shall not be reduced
after any such increase and the term Annual Base Salary as utilized in this
Agreement shall refer to Annual Base Salary as so increased. As used in this
Agreement, the term “affiliated companies” shall include any company controlled
by, controlling or under common control with the Company.

(ii) Annual Bonus. In addition to Annual Base Salary, the Executive may be
awarded, for each fiscal year ending during the Change of Control Employment
Period, an annual bonus (the “Annual Bonus”) in cash as determined in the
discretion of the Company’s President and Chief Executive Officer consistent
with the practices and procedures of the Company. Any such Annual Bonus shall be
paid no later than the end of the fourth month of the fiscal year next following
the fiscal year for which the Annual Bonus is awarded, unless the Executive
shall elect to defer the receipt of such Annual Bonus.

(iii) Incentive, Savings and Retirement Plans. During the Change of Control
Employment Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured with respect to
both regular and special incentive opportunities, to the extent, if any, that
such distinction is applicable), savings opportunities and retirement benefit
opportunities, in each case, less favorable, in the aggregate, than the most
favorable of those provided by the Company and its affiliated companies for the
Executive under such plans, practices, policies and programs as in effect at any
time during the 90-day period immediately preceding the Effective Date or if
more favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies.

(iv) Welfare Benefit Plans. During the Change of Control Employment Period, the
Executive and/or the Executive’s family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and
travel accident insurance plans and programs) to the extent applicable generally
to other peer executives of the Company and its affiliated companies, but in no
event shall such plans, practices, policies and programs provide the Executive
with benefits which are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect for the
Executive at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those provided generally
at any time after the Effective Date to other peer executives of the Company and
its affiliated companies.

 

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(v) Expenses. During the Change of Control Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable employment
expenses incurred by the Executive in accordance with the most favorable
policies, practices and procedures of the Company and its affiliated companies
in effect for the Executive at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.

(vi) Fringe Benefits. During the Change of Control Employment Period, the
Executive shall be entitled to fringe benefits in accordance with the most
favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the 90-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies.

(vii) Office and Support Staff. During the Change of Control Employment Period,
the Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing provided
to the Executive by the Company and its affiliated companies at any time during
the 90-day period immediately preceding the Effective Date or, if more favorable
to the Executive, as provided generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies.

(viii) Vacation. During the Change of Control Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated companies as
in effect for the Executive at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.

5. Termination of Employment (During the Change of Control Employment Period)

(a) Death or Disability. The Executive’s employment shall terminate
automatically upon the Executive’s death if during the Change of Control
Employment Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Change of Control Employment Period
(pursuant to the definition of Disability set forth below), it may give to the
Executive written notice in accordance with Section 13(b) of this Agreement of
its intention to terminate the Executive’s employment. In such event, the
Executive’s employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the “Disability Effective
Date”), provided that, within the 30 days after such receipt, the Executive
shall not have returned to full-time performance of the Executive’s duties. For
purposes of this Agreement, “Disability” shall mean the Executive is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months.

 

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(b) Cause. The Company may terminate the Executive’s employment during the
Change of Control Employment Period for Cause. For purposes of this Agreement
(other than Section 7) “Cause” shall mean (i) a material breach by the Executive
of the Executive’s obligations under Section 4(a) of this Agreement (other than
as a result of incapacity due to physical or mental illness) which is
demonstrably willful and deliberate on the Executive’s part, which is committed
in bad faith or without reasonable belief that such breach is in the best
interests of the Company and which is not remedied in a reasonable period of
time after receipt of written notice from the Company specifying such breach or
(ii) the conviction of the Executive of a felony involving moral turpitude.

(c) Good Reason. The Executive’s employment may be terminated during the Change
of Control Employment Period by the Executive for Good Reason. For purposes of
this Agreement, “Good Reason” shall mean:

(i) the assignment to the Executive of any duties inconsistent in any respect
with the Executive’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities or any other action by
which results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;

(ii) any failure by the Company to comply with the provisions of Section 4(b) of
this Agreement, other than an isolated, insubstantial and inadvertent failure
not occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;

(iii) the Company’s requiring the Executive to be based at any office or
location other than that described in Section 4(a)(i)(B) of this Agreement;

(iv) any purported termination by the Company of the Executive’s employment
otherwise than as expressly permitted by this Agreement; or

(v) any failure by the Company to comply with and satisfy Section 12(c) of this
Agreement, provided that such successor has received at least ten days prior
written notice from the Company or the Executive of the requirements of
Section 12(c) of this Agreement.

For purposes of this Section 5(c), any good faith determination of “Good Reason”
made by the Executive shall be conclusive.

Any proposed termination of employment by Executive shall be presumed to be
other than for Good Reason unless (x) Executive first provides written notice to
the Company within ninety (90) days following the initial existence of the
purported Good Reason condition, (y) the Company has been provided a period of
thirty (30) days after receipt of Executive’s notice during which to cure,
rescind or otherwise remedy the actions, events or circumstances described in
such notice and (z) Executive’s termination of employment occurs within two
years following the initial existence of the purported Good Reason condition.

 

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(d) Notice of Termination. Any termination by the Company for Cause, or by the
Executive for Good Reason, shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 12(b) of this Agreement. For
purposes of this Agreement, a “Notice of Termination” means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than 15 days after the giving
of such notice). The failure by the Executive or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Good Reason or Cause shall not waive any right of the Executive or the Company
hereunder or preclude the Executive or the Company from asserting such fact or
circumstance in enforcing the Executive’s or the Company’s rights hereunder.

(e) Date of Termination. “Date of Termination” means (i) if the Executive’s
employment is terminated by the Company for Cause, or by the Executive for Good
Reason, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if the Executive’s employment is
terminated by the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies the Executive of
such termination and (iii) if the Executive’s employment is terminated by reason
of death or Disability, the Date of Termination shall be the date of death of
the Executive or the Disability Effective Date, as the case may be.

6. Obligation of the Company upon Termination (During the Change of Control
Employment Period).

(a) Good Reason; Other Than for Cause, Death or Disability. If, during the
Change of Control Employment Period, the Company shall terminate the Executive’s
employment other than for Cause, death or Disability or the Executive shall
terminate employment for Good Reason:

(i) the Company shall pay to the Executive in a lump sum in cash within 30 days
after the Date of Termination the aggregate of the following amounts: the sum of
(1) the Executive’s Annual Base Salary multiplied by 1.5, and (2) any
compensation or bonus previously deferred (together with any accrued interest or
earnings thereon) and any accrued vacation pay, in each case to the extent not
theretofore paid (the sum of the amounts described in clauses (1) and (2) of
this Section 6(a)(i) shall be hereinafter referred to as the “Change of Control
Severance Amount”); and

 

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(ii) for a minimum period that is the greater of the period commencing on the
Date of Termination through (x) the next applicable Renewal Date following the
Date of Termination or (y) the six month period following the Date of
Termination, or such longer period as any plan, program, practice or policy may
provide, the Company shall continue benefits to the Executive and/or the
Executive’s family at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies described in
Section 4(b)(v) of this Agreement if the Executive’s employment had not been
terminated in accordance with the most favorable plans, practices, programs or
policies of the Company and its affiliated companies as in effect and applicable
generally to other peer executives and their families during the 90-day period
immediately preceding the Effective Date or, if more favorable to the Executive,
as in effect generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies and their families,
provided, however, that if the Executive becomes re-employed with another
employer and is eligible to receive medical or other welfare benefits under
another employer provided plan, the medical and other welfare benefits described
herein shall be secondary to those provided under such other plan during such
applicable period of eligibility (such continuation of such benefits for the
applicable period herein set forth shall be hereinafter referred to as “Welfare
Benefit Continuation”). For purposes of determining eligibility of the Executive
for retiree benefits pursuant to such plans, practices, programs and policies,
the Executive shall be considered to have remained employed until the end of the
Change of Control Employment Period and to have retired on the last day of such
period; and

(iii) for a minimum period that is the greater of the period commencing on the
Date of Termination through (x) the next applicable Renewal Date following the
Date of Termination or (y) the six month period following the Date of
Termination, to the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive and/or the Executive’s family any other
amounts or benefits required to be paid or provided or which the Executive
and/or the Executive’s family is eligible to receive pursuant to this Agreement
and under any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies as in effect and applicable generally to
other peer executives and their families during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally thereafter with respect to other peer executives of the Company
and its affiliated companies and their families (such other amounts and benefits
shall be hereinafter referred to as the “Other Benefits”).

(b) Death. If the Executive’s employment is terminated by reason of the
Executive’s death during the Change of Control Employment Period, this Agreement
shall terminate without further obligations to the Executive’s legal
representatives under this Agreement, other than for (i) payment of the Change
of Control Severance Amount (which shall be paid to the Executive’s estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of
Termination) and the timely payment or provision of the Welfare Benefit
Continuation and Other Benefits (excluding, in each case, Death Benefits (as
defined below)) and (ii) payment to the Executive’s estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination of
an amount equal to the present value (determined

 

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as provided in Section 280G(d)(4) of the Internal Revenue Code of 1986, as
amended (the “Code”) of any cash amount to be received by the Executive or the
Executive’s family as a death benefit pursuant to the terms of any plan, policy
or arrangement of the Company and its affiliated companies, but not including
any proceeds of life insurance covering the Executive to the extent paid for
directly or on a contributory basis by the Executive (which shall be paid in any
event as an Other Benefit) (the benefits included in this clause (ii) shall be
hereinafter referred to as the “Death Benefits”).

(c) Disability. If the Executive’s employment is terminated by reason of the
Executive’s Disability during the Change of Control Employment Period, this
Agreement shall terminate without further obligation to the Executive, other
than for (i) payment of Change of Control Severance Amount (which shall be paid
to the Executive in a lump sum in cash within 30 days of the Date of
Termination) and the timely payment or provision of the Welfare Benefit
Continuation and Other Benefits (excluding, in each case, Disability Benefits
(as defined below)) and (ii) payment to the Executive in a lump sum in cash
within 30 days of the Date of Termination of an amount equal to the present
value (determined as provided in Section 280G(d)(4) of the Code) of any cash
amount to be received by the Executive as a disability benefit pursuant to the
terms of any plan, policy or arrangement of the Company and its affiliated
companies, but not including any proceeds of disability insurance covering the
Executive to the extent paid for directly or on a contributory basis by the
Executive (which shall be paid in any event as an Other Benefit) (the benefits
included in this clause (ii) shall be hereinafter referred to as the “Disability
Benefits”).

(d) Cause; Other than for Good Reason. If the Executive’s employment shall be
terminated for Cause during the Change of Control Employment Period, this
Agreement shall terminate without further obligations to the Executive other
than the obligation to pay to the Executive Annual Base Salary through the Date
of Termination plus the amount of any compensation previously deferred by the
Executive, in each case to the extent theretofore unpaid. If the Executive
terminates employment during the Change of Control Employment Period, excluding
a termination for Good Reason, this Agreement shall terminate without further
obligations to the Executive, other than the payment of the Executive’s Annual
Base Salary through the Date of Termination and any compensation previously
deferred by the Executive (together with any accrued interest or earnings
thereon) and any accrued vacation pay (in each case to be paid to the Executive
in a lump sum in cash within 30 days of the Date of Termination).

7. Terms of Employment; Obligation of the Company upon Termination of Employment
(Prior to the Effective Date).

(a) Terms of Employment; Obligation of the Company upon Termination of
Employment. The Executive and the Company acknowledge that the employment of the
Executive by the Company is “at will” and, prior to the Effective Date, may be
terminated by either the Executive or the Company at any time. Except as
specifically provided in Sections 7(b) and (c) of this Agreement, the terms of
Executive’s employment and the continuing

 

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participation of Executive in any plan, program, policy or practice provided by
the Company or any of its affiliated companies prior to the Effective Date or
upon Executive’s termination of employment prior to the Effective Date (either
by Executive or the Company) shall be governed by the then existing plan,
program, policy or practice of the Company or any of its affiliated companies.

(b) Other Than for Cause, Death or Disability. If, at any time prior to the
Effective Date, the Company shall terminate the Executive’s employment other
than for Cause (defined below), death or Disability, the Company shall (1) pay
to the Executive his Annual Base Salary multiplied by 1.5 payable over 18 months
at the same time that the Company pays other peer executives of the Company
generally, commencing on the first payroll date which is on or immediately after
the 30th day following the Executive’s termination of employment, and (2) pay to
the Executive any compensation or bonus previously deferred (together with any
accrued interest or earnings thereon) and any accrued vacation pay, in each case
to the extent not theretofore paid, in a lump sum payment within 30 days
following employment (the sum of the amounts described in clauses (1) and (2) of
this Section 7(b) shall be hereinafter referred to as the “Severance Amount”);
and (3) for a period equal to that period over which the Executive’s Annual Base
Salary shall be paid pursuant to Section 7(b) (1) hereof, the Company shall
continue health and dental benefits to the Executive and/or the Executive’s
family equal to those health and dental benefits in effect on the Date of
Termination; provided, however, that if Executive becomes re-employed with
another employer which provides medical or dental benefits of any kind (whether
equivalent to, or lesser than, those provided by the Company on the Date of
Termination), then Executive’s health or dental coverage with the Company shall,
respectively, cease upon the date Executive shall become eligible for either of
such benefits from Executive’s new employer. Executive covenants and agrees to
promptly notify the Company upon becoming so eligible. Solely for purposes of
Section 409A of the Code, each installment payment is considered a separate
payment.

For purposes of Section 7, “Cause” shall mean shall mean (i) a material breach
by the Executive of the Executive’s duties, responsibilities held, exercised and
assigned by the Company to the Executive (other than as a result of incapacity
due to physical or mental illness) which is demonstrably willful and deliberate
on the Executive’s part, which is committed in bad faith or without reasonable
belief that such breach is in the best interests of the Company and which is not
remedied in a reasonable period of time after receipt of written notice from the
Company specifying such breach or (ii) the conviction of the Executive of a
felony involving moral turpitude.

(c) Disability. If the Executive’s employment is terminated by reason of the
Executive’s Disability prior to the Effective Date, this Agreement shall
terminate without further obligation to the Executive, other than the payment by
the Company to Executive of an amount equal to (i) the Severance Amount minus
(ii) the amount Executive would be entitled to receive as a disability benefit
under the then existing plan, program, policy or practice of the Company or any
of its affiliated companies (which shall be paid to the Executive in accordance
with the then existing, plan, program, policy or practice of the Company or any
of its affiliated companies).

 

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8. Non-Exclusivity of Rights. Except as provided in Sections 6(a)(ii), 6(b),
6(c), 7(b) or 7(c) of this Agreement, nothing in this Agreement shall prevent or
limit the Executive’s continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company or any of its affiliated companies. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plan, policy, practice or program of or any contract or agreement with the
Company or any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, practice or
program or contract or agreement except as explicitly modified by this
Agreement.

9. Full Settlement; Resolution of Disputes.

(a) The Company’s obligation to make the payments provided for in this Agreement
and otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and, except as provided in Section 6(a)(ii) of this
Agreement, such amounts shall not be reduced whether or not the Executive
obtains other employment. The Company agrees to pay promptly as incurred, to the
full extent permitted by law, all legal fees and expenses which the Executive
may reasonably incur as a result of any contest (regardless of the outcome
thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement), plus in
each case interest on any delayed payment at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Code.

(b) If there shall be any dispute between the Company and the Executive (i) in
the event of any termination of the Executive’s employment by the Company,
whether such termination was for Cause, or (ii) in the event of any termination
of employment by the Executive, whether Good Reason existed, then, unless and
until there is a final, nonappealable judgment by a court of competent
jurisdiction declaring that such termination was for Cause or that the
determination by the Executive of the existence of Good Reason was not made in
good faith, the Company shall pay all amounts, and provide all benefits, to the
Executive and/or the Executive’s family or other beneficiaries, as the case may
be, that the Company would be required to pay or provide pursuant to
Section 6(a) of this Agreement as though such termination were by the Company
without Cause or by the Executive with Good Reason; provided, however, that the
Company shall not be required to pay any disputed amounts pursuant to this
paragraph except upon receipt of an undertaking by or on behalf of the Executive
to repay all such amounts to which the Executive is ultimately adjudged by such
court not to be entitled.

 

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10. Certain Additional Payments by the Company.

(a) Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that any payment or distribution by the Company to or for
the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this
Section 10) (a “Payment”) would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then the Executive shall be entitled to receive an additional
payment (a “Gross-Up Payment”) in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. Notwithstanding anything to
the contrary in this Section 10, the Gross-Up Payment shall in all events be
paid by the Company to the Executive not later than the last day of the calendar
year next following the calendar year in which the Executive remits the related
taxes, in accordance with the requirements set forth in Treas. Reg.
§1.409A-3(i)(1)(v).

(b) Subject to the provisions of Section 10(c) of this Agreement, all
determinations required to be made under this Section 10, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by Deloitte & Touche, LLP (the “Accounting Firm”) which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business
days of the receipt of notice from the Executive that there has been a Payment,
or such earlier time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, the Executive shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 10, shall be paid by the Company to the Executive within five days of
the receipt of the Accounting Firm’s determination. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with a written opinion that failure to report the Excise Tax on the
Executive’s applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made (“Underpayment”), consistent with the calculations

 

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required to be made hereunder. In the event that the Company exhausts its
remedies pursuant to Section 10(c) of this Agreement and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.

(c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:

(i) give the Company any information reasonably requested by the Company
relating to such claim,

(ii) take such action in connection with contesting such claim as the Company
shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company,

(iii) cooperate with the Company in good faith in order effectively to contest
such claim, and

(iv) permit the Company to participate in any proceedings relating to such
claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 10(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall

 

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advance the amount of such payment to the Executive, on an interest-free basis
and shall indemnify and hold the Executive harmless, on an after-tax basis, from
any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
the Executive with respect to which such contested amount is claimed to be due
is limited solely to such contested amount Furthermore, the Company’s control of
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

(d) If, after the receipt by the Executive of an amount advanced by the Company
pursuant to Section 10(c) of this Agreement, the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to
the Company’s complying with the requirements of Section 10(c) of this
Agreement) promptly pay to the Company the amount of such refund (together with
any interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by the Executive of an amount advanced by the Company pursuant to
Section 10(c) of this Agreement, a determination is made that the Executive
shall not be entitled to any refund with respect to such claim and the Company
does not notify the Executive in writing of its intent to contest such denial of
refund prior to the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.

10A. Compliance with Section 409A. Notwithstanding anything to the contrary in
this Agreement, if Executive is determined by the Company to be a “specified
employee” within the meaning of Code Section 409A(a)(2)(B)(i) at the time of his
separation from service with the Company and if any payment or benefit to which
he shall become entitled to under this Agreement would be considered deferred
compensation subject to interest and additional tax imposed pursuant to
Section 409A(a) of the Code as a result of the application of
Section 409A(a)(2)(B)(i) of the Code, no such payment or benefit payable or
provided to Executive shall be paid or provided to Executive prior to the
earlier of (i) the expiration of the six (6) month period following the date of
Executive’s “separation from service” (as such term is defined by Code
Section 409A and the regulations promulgated thereunder), or (ii) the date of
Executive’s death, but only to the extent such delayed commencement is otherwise
required in order to avoid a prohibited distribution under Code
Section 409A(a)(2). The payments and benefits to which Executive would otherwise
be entitled during the first six (6) months following his separation from
service shall be accumulated and paid or provided, as applicable, in a lump sum,
on the first payroll date that is six (6) months and one day following
Executive’s separation from service and any remaining payments or benefits will
be paid in accordance with the normal payment dates specified for them herein.
Further, if any insurance or benefits continued by the Company pursuant to this
Agreement are taxable to Executive, any payment by the Company for any such
insurance or benefits shall equal the cost of such insurance or benefit, shall
be paid on a monthly basis and shall comply with the requirement that
non-qualified deferred compensation be paid on a specified date or pursuant to a
fixed schedule.

 

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11. Confidential Information; Non-Compete. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive’s employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive’s employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it. In no event shall an asserted violation of the
provisions of this Section 11 constitute a basis for deferring or withholding
any amounts otherwise payable to the Executive under this Agreement. For a
period of twelve months from and after the Date of Termination, the Executive
shall not, directly or indirectly, be or become employed or associated with any
microticket leasing business in the United States which is in competition with
the Company.

12. Successors.

(a) This Agreement is personal to the Executive and without the prior written
consent of the Company shall not be assignable by the Executive otherwise than
by will or the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by the Executive’s legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns.

(c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.

 

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13. Bankruptcy Proceedings. The Company agrees that within three (3) days of the
entry of an order for relief with respect to the Company pursuant to the
provisions of Chapter 7 or Chapter 11 of the United States Bankruptcy Code, it
will seek approval of the bankruptcy court having jurisdiction over its affairs
for the assumption of this Agreement pursuant to the provisions of Section 365
of the United States Bankruptcy Code.

14. Miscellaneous.

(a) This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.

(b) This Agreement amends and supersedes in its entirety all prior agreements
and understandings, whether oral or written, with respect to the provisions of
the Original Agreement.

(c) All notices and other communications hereunder shall be in writing and shall
be given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:

If to the Executive:

Steven LaCreta

c/o MicroFinancial Incorporated

16 New England Executive Park

Suite 200

Burlington, MA 01803

If to the Company:

MicroFinancial Incorporated

Attention: Richard F. Latour, President and Chief Executive Officer

16 New England Executive Park

Suite 200

Burlington, MA 01803

 

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With a copy to:

Gerald P. Hendrick, Esq.

Edwards Wildman Palmer LLP

111 Huntington Avenue

Boston, MA 02199

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

(d) The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement.

(e) The Company may withhold from any amounts payable under this Agreement such
Federal, state or local taxes as shall be required to be withheld pursuant to
any applicable law or regulation.

(f) The Executive’s or the Company’s failure to insist upon strict compliance
with any provision hereof or any other provision of this Agreement or the
failure to assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 5(c)(i)-(v) of this Agreement,
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.

(g) This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together constitute one instrument.
Counterparts of this Agreement (or applicable signature pages hereof) that are
manually signed and delivered by facsimile transmission shall be deemed to
constitute signed original counterparts hereof and shall bind the parties
signing and delivering in such manner.

 

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IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.

 

Steven LaCreta

MicroFinancial Incorporated

By:

   

 

 

Name: Richard Latour

 

Title: Chief Executive Officer