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                                                                    EXHIBIT 10.2

                SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

      This SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT is dated as of July
15, 2005 by and between Microfinancial Incorporated, a Massachusetts
corporation, (the "Company") and Peter R. Bleyleben, (the "Director") residing
at 66 Norfolk Road, Chestnut Hill, MA 02467.

            WHEREAS Director has served as President and Chief Executive Officer
of the Company pursuant to an Employment Agreement dated June 12, 1998 (the
"Original Employment Agreement"), and was subsequently elected Chairman of the
Board of Directors of the Company ("Board") and served the Company pursuant to
an Amended and Restated Employment Agreement dated as of March 15, 2004 (the
"Amended and Restated Employment Agreement"); and

            WHEREAS the Company and the Director mutually desire to enter into
this Second Amended and Restated Agreement defining Director's responsibilities
(the "Agreement").

            WHEREAS Director desires to accept such employment and enter into
this Agreement;

            NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
parties agree as follows:

      1. Term of Employment. Subject to the provisions of Section 7, Director
shall be employed by the Company pursuant to the terms and conditions of this
Agreement for a period commencing on July 15, 2005 (the "Commencement Date") and
ending June 30, 2008 (the "Employment Term")

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      3. Position.

            (a) The Director shall serve as Non- Executive Chairman of the Board
      of the Company, or such other title as the Board may from time to time
      determine. In such position, Director shall have such duties,
      responsibilities and authority as shall be determined from time to time by
      the Board.

            (b) During the Employment Term, Director will devote that portion of
      his business time and best efforts to the performance of his duties
      hereunder as may be requested by the Board. Director may also engage in
      any other business, profession or occupation for compensation or
      otherwise, to the extent that such activities do not materially interfere
      with Director's responsibilities hereunder.

            (c) During the Employment Term, Director shall have access to a
      non-dedicated office at the Company, as designated by the President and
      Chief Executive Officer of the Company. Director shall also have such
      access, as may be determined by the Board from time to time, to the
      Company's information technology systems.

      3. Base Salary. The Company shall pay Director an annual base salary (the
"Base Salary") at the rate of $130,000 on the Commencement Date payable in
arrears in substantially equal installments not less frequently than monthly in
accordance with the Company's payroll practices during the Employment Term.

      4. Incentive Compensation.

            (a) Director shall not be eligible to participate in the Company's
      annual bonus or profit-sharing programs.

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            (b) Director shall be eligible to participate in the 1998 Equity
      Incentive Plan, and any other equity plan adopted by the Company from time
      to time (collectively "Option Plans"), on the same basis as other
      directors of the Company.

      5. Employee Benefits. Director shall be provided health, accident, and
disability insurance benefits (collectively " Benefits") during the Employment
Term on terms no less favorable in the aggregate (except for any changes thereto
required to comply with changes in applicable law) than those benefits which
were provided to Director by the Company immediately prior to the Commencement
Date, except as otherwise required hereunder. After the expiration of the
Employment Term, Director shall be eligible to participate in such health,
accident and disability plans as the Company may make available to other
directors of the Company from time to time. In the event of a Change of Control
(as defined in Section 11(b)(i) hereof), Director shall be entitled to receive
the Benefits until the earlier of his death or his 65th birthday.

      6. Business Expenses. Reasonable travel, entertainment and other business
expenses incurred by Director in the performance of his duties hereunder shall
be reimbursed by the Company in accordance with Company policies.

      7. Termination. This Agreement, and Director's employment hereunder, may
be terminated pursuant to the terms and conditions set forth herein. In the
event of any such termination, Director's rights and entitlements shall be
determined in accordance with the following provisions.

            (a) For Cause by the Company. The provisions of this Section 7(a)
      shall apply in the event that Director's employment hereunder is
      terminated by the Company for "Cause". For purposes of this Agreement,
      "Cause" shall mean (i) Director's willful

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      and continued failure substantially to perform his duties hereunder (other
      than as a result of total or partial incapacity due to physical or mental
      illness), (ii) the willful commission by Director of acts that are
      dishonest and demonstrably injurious to the Company, or (iii) an act or
      acts on Director's part constituting a felony under the laws of the United
      States or any state thereof. If Director is terminated for Cause, he shall
      be entitled to receive his Base Salary through the date of termination.
      All other benefits due Director pursuant to this Agreement following
      Director's termination of employment pursuant to this Section 7(a) shall
      be determined in accordance with the plans, policies and practices of the
      Company at the time of such termination. Any Notice of Termination (as
      defined in Section 7(d) hereof), communicating the termination of
      Director's employment pursuant to this Section 7(a), shall include a copy
      of a resolution duly adopted by the affirmative vote of not less than a
      majority of the entire membership of the Board at a meeting of the Board
      called and held for that purpose (after reasonable notice to Director and
      reasonable opportunity for Director, together with Director's counsel, to
      be heard before the Board prior to such vote), finding that in the good
      faith opinion of the Board that an event constituting Cause for
      termination in accordance with this Section 7(a) has occurred and
      specifying the particulars thereof in detail.

            (b) Death. Upon termination of Director's employment hereunder as a
      result of Director's death, Director's estate shall receive his Base
      Salary for the remaining period of the Employment Term. In addition, all
      options or awards under the Option Plans shall become fully vested and
      exercisable as of the date of death. Thereafter, the Company shall, have
      no further obligation to compensate Director or his estate under this
      Agreement.

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            (c) Gross-up Payments. In the event that Director receives any
      payments under this Agreement, or other payments subject to Section 4999
      of the Internal Revenue Code of 1986, as amended (the "Code"), which are
      considered "excess parachute payments" as defined in Section 280G of the
      Code, the Company shall make an additional gross-up payment to Director in
      an amount which results in Director being in the same after-tax position
      that he would have been in had no excise tax under Code Section 4999 been
      imposed.

            (d) Notice of Termination. Any purported termination of employment
      by the Company shall not be effective until communicated by written Notice
      of Termination to the other party hereto in accordance with Section 11(i)
      hereof. For purposes of this Agreement, a "Notice of Termination" shall
      mean a notice which shall indicate the specific termination provision in
      this Agreement relied upon and shall set forth in reasonable detail the
      facts and circumstances claimed to provide a basis for termination of
      employment under the provision so indicated.

      8. Noncompetition. (a) During the Employment Term, and for a two (2) year
period following termination of Director's employment hereunder, Director shall
not, directly or indirectly, (i) become under contract to or associated with,
employed by, render services to or own an interest (other than as a shareholder
owning not more than a 5% interest) in any microticket leasing business that is
in competition with the Company in the United States, (ii) solicit any officer
or employee of the Company or any of its affiliates to engage in any conduct
prohibited hereby for Director or to terminate any existing relationship with
the Company or such affiliate or (iii) assist any other person to engage in any
activity in any manner prohibited hereby to Director.

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            (b) It is expressly understood and agreed that although Director and
the Company consider the restrictions contained in this Section 8 to be
reasonable, if a final judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Agreement is an unenforceable restriction against Director, the provisions
of this Agreement shall not be rendered void but shall be deemed amended to
apply as to such maximum time and territory and to such maximum extent as such
court may judicially determine or indicate to be enforceable. Alternatively, if
any court of competent jurisdiction finds that any restriction contained in this
Agreement is unenforceable, and such restriction cannot be amended so as to make
it enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.

      9. Confidentiality. Director will not at any time (whether, during or
after his employment with the Company) disclose or use for his own benefit or
purposes or the benefit or purposes of any other person, firm, partnership,
joint venture, association, corporation or other business organization, entity
or enterprise other than the Company and any of its subsidiaries or affiliates,
any trade secrets, information, data, or other confidential information relating
to customers, development programs, costs, marketing, trading, investment, sales
activities, promotion, credit and financial data, manufacturing processes,
financing methods, plans, or the business and affairs of the Company generally,
or of any subsidiary or affiliate of the Company, provided that the foregoing
shall not apply to information which is not unique to the Company or which is
generally known to the industry or the public other than as a result of
Director's breach of this covenant. Director agrees that upon termination of his
employment with the Company, for any reason, he will return to the Company
immediately all memoranda, books, papers, plans, information, letters and other
data, both written and electronic, and all copies thereof or

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therefrom, in any way relating to the business of the Company and its
affiliates, except that he may retain personal notes, notebooks and diaries.
Director further agrees that he will not retain or use for his account at any
time any trade names, trademark or other proprietary business designation used
or owned in connection with the business of the Company or its affiliates.

      10. Specific Performance. Director acknowledges and agrees that the
Company's remedies at law for a breach or threatened breach of any of the
provisions of Sections 8 or 9 would be inadequate and, in recognition of this
fact, Director agrees that, in the event of such a breach or threatened breach,
in addition to any remedies at law, the Company, without posting any bond, shall
be entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available.

      11. Miscellaneous.

            (a) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts. In executing
this Agreement, Director voluntarily submits to the jurisdiction of the courts
of the Commonwealth of Massachusetts, and agrees that any action for enforcement
of this Agreement may be commenced in any court in Massachusetts having
jurisdiction over the subject matter hereof, and the power to grant the relief
described herein.

            (b) Entire Agreement/Amendments. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and,
subject to the exception noted below, supersedes any and all prior
understandings, agreements, contracts and arrangements, whether written or oral,
between the Company and Director, including but not limited to the Original
Employment Agreement, the Amended and Restated Employment

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Agreement, and the Executive Performance Incentive Plan. The parties hereto
agree that as of the Commencement Date, all prior understandings, agreements,
contracts and arrangements, whether written or oral, shall be null and void and
of no further force or effect and any and all current and future obligations of
either party thereunder are fully and forever discharged. Notwithstanding
anything to the contrary contained herein, this Agreement shall in no way reduce
or diminish any benefit to which Director is otherwise entitled and which has
already accrued, or been granted to, Director, pursuant to the terms of a plan,
program or arrangement of the Company, prior to the Commencement Date. The
Director hereby agrees to provide any consent, waiver or other documentation
necessary to give effect to this Section 11(b). This Agreement may not be
altered, modified, or amended except by written instrument signed by the parties
hereto.

            (c) No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver of such party's rights or deprive such party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.

            (d) Severability. In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.

            (e) Assignment. This Agreement is personal to Director and without
the prior written consent of the Company shall not be assignable by Director
other than by will or the laws of decent and distribution. This Agreement shall
inure to the benefit of and be binding upon the Company and its successors and
assigns.

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            (f) Mitigation. The Director shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation earned by
Director as the result of employment by another employer after the termination
of his employment hereunder or otherwise.

            (g) Arbitration. Except where equitable relief is sought, any
dispute, controversy or claim arising out of or relating to this Agreement, or
the breach hereof, shall be settled by arbitration in accordance with the rules
of the American Arbitration Association by a single arbitrator. The arbitrator
shall be an individual with experience in the leasing and finance industry. The
arbitrator's award shall be final and binding upon both parties, and judgment
upon the award may be entered in any court of competent jurisdiction in any
state of the United States or country or application may be made to such court
for a judicial acceptance o the award and an enforcement as the law of such
jurisdiction may require or allow.

            (h) Successors; Binding Agreement.

                              (i) The Company will require any successor
(whether direct or indirect, by Change of Control, or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume 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. Such assumption and agreement shall be obtained prior to the
effectiveness of any such succession. In the event that any such successor
(whether direct, indirect, by Change of Control, or otherwise) shall fail or
refuse to assume and agree to perform all of its obligations under this
Agreement, the Company shall (x) pay to the Director those amounts to which the
Director would have been entitled under this Agreement, in full, prior to

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any transaction with a successor; and (y) arrange, at the Company's cost and
expense, to provide contractual coverage with a reputable carrier for a
continuation of the Benefits, in accordance with the Section 5 hereof. 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. The term
"Company" shall also mean any affiliate of the Company to which Director may be
transferred and the Company shall cause such successor employer to be considered
the "Company" bound by the terms of this Agreement and this Agreement shall be
amended to so provide. As used in this Agreement, "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. Section 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

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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.

                  (ii) 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

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jurisdiction over its affairs for the assumption of this Agreement pursuant to
the provisions of Section 365 of the United States Bankruptcy Code.

                  (iii) This Agreement shall inure to the benefit of and be
binding upon personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Director should die
while any amount would still be payable to Director hereunder if Director had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the devisee, legatee or
other designee of Director or, if there is no such designee, to the estate of
Director.

            (i) Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the execution page of this Agreement, provided
that all notices to the Company shall be directed to the attention of the Board
with a copy to Managing Partner, Edwards & Angell, 101 Federal Street, Boston,
MA 02110, or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of address
shall be effective only upon receipt.

            (j) Legal Fees and Expenses. The Company shall reimburse Director on
a quarterly basis for all costs and expenses incurred by Director to enforce or
protect his rights under this Agreement (including fees and expenses incurred in
connection with an arbitration) unless it shall ultimately be determined by a
final judgment of an arbitrator or a court of competent jurisdiction that
Director was without any justification for commencing or continuing any such
arbitration, action or proceeding, in which case Director shall repay to the
Company any

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amounts of reimbursement paid under this Section 11(j) and in the event of an
arbitration, shall also pay one half (1/2) of the fees of the arbitrator.

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

                                                _______________________________
                                                Peter R. Bleyleben

                                                MicroFinancial, Incorporated

                                                _______________________________
                                                By: Richard F. Latour
                                                Its: President

Approved by the
Board of Directors on
July 14, 2005

___________________________________
Alan J. Zakon, in his capacity as
Presiding Director, and Chairman of the
Compensation and Benefits Committee

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