Document:

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                                                                   EXHIBIT 10.14

[LETTERHEAD OF MICROFINANCIAL]
                                                                January 30, 2003

Richard F. Latour
_________________
_________________
_________________

Dear MI. Latour:

         You entered into an Employment Agreement, as may have been amended from
time to time, (the "Employment Agreement") effective June 12, 1998 with
MicroFinancial Incorporated, (f/k/a Boyle Leasing Technologies, Inc.), a
Massachusetts corporation (the "Company"). Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Employment
Agreement.

         This Letter Agreement (this "Letter") will summarize our understanding
and agreement with respect to certain amendments to the Employment Agreement as
follows:

         1.       Section 11(e) of the Employment Agreement is hereby amended in
its entirety and replaced with the following:

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

         2.       Section ll (h) of the Employment Agreement is hereby amended
in its entirety and replaced with the following:

                  "(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. 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 Executive 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:

                         [LETTERHEAD OF MICROFINANCIAL]

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                                    (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 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 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,

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devisees and legatees. If Executive should die while any amount would still be
payable to Executive hereunder if Executive 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 Executive
or, if there is no such designee, to the estate of Executive."

         3.       Except as expressly amended and clarified by this Letter, the
Employment Agreement is hereby ratified and confirmed in all respects.

         4.       This Letter shall be subject to all applicable provisions of
the Employment Agreement, including but not limited to, provisions relating to
governing law, arbitration and notices.

         5.       This Letter 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 Letter 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.

         6.       If the foregoing accurately summarizes our understanding and
agreement, please execute this Letter and its counterpart in the space provided
below.

                                                MICROFINANCIAL INCORPORATED

                                                By: /s/ Peter R. Bleyleben
                                                   -----------------------------
                                                   Its CHAIRMAN

/s/ Richard F. Latour
--------------------------
Richard F. Latour

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                              EMPLOYMENT AGREEMENT

         EMPLOYMENT AGREEMENT dated as of June 12, 1998 by and between Boyle
Leasing Technologies, Inc., a Massachusetts corporation, (the "Company") and
Richard F. Latour, (the "Executive") residing at 29 Cherubs Way, Hampstead, NH
03841.

                  WHEREAS Executive has served as Executive Vice President,
Chief Operating Officer and Chief Financial Officer of the Company pursuant to
an Employment Agreement dated September 26, 1997 (the "Original Employment
Agreement"); and

                  WHEREAS the Company desires to continue to employ Executive
and to enter into this Agreement embodying the terms of such continued
employment (the "Agreement"); and

                  WHEREAS Executive desires to accept such continued 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,
Executive shall be employed by the Company pursuant to the terms and conditions
of this Agreement for a period commencing on June 12, 1998 (the "Commencement
Date") and ending June 12,2001; provided that such period shall be automatically
extended for one year on June 12,2001 and June 12 of any succeeding year unless
a minimum of six months prior notice is given by either party to the other. The
period beginning on the Commencement Date and ending June 12,2001, or upon the
expiration of any renewal period, in either case in accordance with the
foregoing provision, shall be referred to as the "Employment Term".

         2.       Position. (a) The Executive shall continue to serve as
Executive Vice President, Chief Operating Officer and Chief Financial Officer of
the Company and in the event of an

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internal corporate restructuring, shall serve in a position or positions of
comparable authority and responsibility in any resulting entity. In such
positions, Executive shall have such duties and authority as shall be determined
from time to time by the Board of Directors of the Company (the "Board") or its
designee which shall not be less than that assigned to him on the Commencement
Date.

                  (b)      During the term of his employment hereunder,
Executive will devote substantially all of his business time and best efforts to
the performance of his duties hereunder and will not engage in any other
business, profession or occupation for compensation or otherwise which would
conflict with the rendition of such services either directly or indirectly,
without the prior written consent of the Board.

         3.       Base Salary. The Company shall pay Executive an annual base
salary (the "Base Salary") at the initial rate of $200,000 payable in arrears in
substantially equal installments not less frequently than monthly in accordance
with the Company's payroll practices during the Employment Term. The Company
shall increase (but not decrease) the Base Salary on each January 1 which occurs
during the Employment Term after June 12, 1998 by a percentage equal to the
percentage increase in the Consumer Price Index for all Urban Consumers for the
Northeast Region, class B metropolitan area, for the twelve (12) month period
ending on each such January 1. In addition to any automatic increases
hereunder, the Company, at any time, may in its sole discretion increase
Executive's Base Salary.

         4.       Incentive Compensation. (a) With respect to each fiscal year
during all of which Executive is employed with the Company, including the fiscal
year beginning January 1, 1998, he shall also be eligible to participate in the
Company's annual bonus program as such program may be modified by the Board of
Directors.

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                  (b)      With respect to each performance period during which
Executive is employed by the Company, including the performance period beginning
January 1, 1998, the Executive shall also be eligible to participate in the
Company's profit-sharing plan as such plan may be modified by the Board of
Directors.

                  (c)      Executive shall be eligible to participate in the
1987 Stock Option Plan, the 1998 Equity Incentive Plan, and my other equity plan
adopted by the Company (collectively "Option Plans"), at a level consistent with
his position and responsibilities.

         5.       Employee Benefits. (a) Executive shall continue to be provided
employee benefits (including fringe benefits and other perquisites, profit
sharing plan participation and life, health, accident and disability insurance)
(collectively "Employee Benefits") 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 Executive by the Company
immediately prior to the Commencement Date, except as otherwise required
hereunder.

                  (b)      The Board of Directors shall determine the amount of
the payments, if any, to be awarded to the Executive under the Company's annual
bonus program and/or profit-sharing plan pursuant to their terms for the 1997
fiscal year and for which payments have not been made prior to the Commencement
Date.

                  (c)      Executive shall be entitled to a minimum of five (5)
weeks annual vacation, in accordance with the Company's current vacation
policies, which vacation shall be increased on the second anniversary of the
Commencement Date up to a maximum of six (6) weeks.

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

         7.       Termination. This Agreement, and Executive's employment may be
terminated by either party at any time. In the event of any such termination,
Executive'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 Executive's employment hereunder is
terminated by the Company for "Cause". For purposes of this Agreement, "Cause"
shall mean (i) Executive's willful 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
Executive of acts that are dishonest and demonstrably injurious to the Company,
or (iii) an act or acts on Executive's part constituting a felony under the laws
of the United States or any state thereof. If Executive is terminated for Cause,
he shall be entitled to receive his Base Salary through the date of termination,
and any accrued but unpaid mounts earned under any bonus program or
profit-sharing plan. All other benefits due Executive following Executive'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 subsection (i) of
this Section 7), communicating the termination of Executive'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 Executive and reasonable opportunity for Executive,
together with Executive's counsel, to be heard before

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the Board prior to such vote), finding that in the good faith opinion of the
Board that any event constituting Cause for termination in accordance with this
Section 7(a) has occurred and specifying the particulars thereof in detail.

                  (b)      Disability. The provisions of this Section 7(b) shall
apply in the event that Executive's employment terminates on account of
"Disability". For purposes of this Agreement, "Disability" shall mean
Executive's physical or mental incapacity, which results in his inability to
perform his duties for a period of six (6) consecutive months. Any question as
to the existence of the Disability of Executive as to which Executive and the
Company cannot agree, shall be determined in writing by a qualified independent
physician mutually acceptable to Executive and the Company.

         In the event of the Disability of Executive, the Company may terminate
the employment of Executive, by delivery of a Notice of Termination to the
Executive which Notice shall be effective not less than thirty (30) days after
the giving of such Notice. Upon termination of Executive's employment hereunder
as a result of Disability, Executive shall receive his Base Salary for a period
of twelve (12) months following such termination, and any and all accrued but
unpaid amounts earned by Executive under the annual bonus program or
profit-sharing plan as of the date of Disability. Any payments provided for in
this Section 7 (b) shall be offset put not below zero) by any payment of
disability benefits in lieu of Base Salary received by Executive under the
Company's employee benefit plans as then in effect. In addition, all options or
other awards issued under the Option Plans shall become fully vested and
exercisable as of the date of Disability.

                  (c)      Death. Upon termination of Executive's employment
hereunder as a result of Executive's death, Executive's estate shall receive his
Base Salary at the rate in effect at the

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time of Executive's death for a period of twelve (12) months following his
death, and any and all accrued but unpaid amounts earned by Executive under the
Company's annual bonus program or profit-sharing plan as of the date of death.
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,
except as provided in subsections 5(a) and 7(g), have no further obligation to
compensate Executive under this Agreement.

                  (d)      Without Cause by the Company. If Executive's
employment is terminated by the Company (including a termination of this
Agreement by the Company as provided in Section 1) without "Cause" (other than
by reason of Disability or death), Executive shall receive, as promptly as
practicable following such termination, but in any event not later than ten (10)
business days following such termination, a lump sum payment in cash equal to
the sum of:

                  (i) if not theretofore paid, the Executive's Base Salary
                  through the date of termination at the rate in effect on the
                  date of termination or, if higher, at the highest rate in
                  effect at any time within the 90-day period preceding the
                  Commencement Date; and

                  (ii) the product of (X) the annual bonus paid to the Executive
                  for the last full fiscal year ending during the Employment
                  Term and (y) the fraction obtained by dividing (a) the number
                  of days between the Commencement Date and the last day of the
                  last full fiscal year ending during the Employment Term and
                  (b) 365; and

                  (iii) in the case of compensation previously deferred by the
                  Executive, all amounts of such compensation previously
                  deferred and not yet paid by the Company.

         Executive shall in addition receive an amount equal to three (3) times
the Executive's annual Base Salary at the rate in effect at the time Notice of
Termination was given, or if higher, at the highest rate in effect at any time
within the ninety (90) day period preceding the

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Commencement Date. Such amount shall be paid to Executive in two (2) equal
payments, on the first and second anniversaries, respectively, of the
Executive's date of termination.

         No option or other award granted to Executive under the Option Plans
shall terminate prior to the expiration of the option term or award period
without regard to a termination of employment.

                  (e)      For Good Reason By Executive. The provisions of this
Section 7(e) shall apply in the event that the Executive terminates his
employment with the Company for "Good Reason". For purposes of this Agreement,
"Good Reason" means (without Executive's express prior written Consent):

                                    (i)      The assignment to Executive by the
                  Company of duties inconsistent with Executive's positions,
                  duties, responsibilities, titles or offices, or any removal of
                  Executive from or any failure to re-elect Executive to any of
                  such positions, except in connection with the termination of
                  Executive's employment for Cause, Disability, or as a result
                  of Executive's death or by Executive other than for Good
                  Reason;

                                    (ii)     A reduction by the Company in
                  Executive's Base Salary as in effect at the Commencement Date,
                  as the same may be increased according to the terns of this
                  Agreement;

                                    (iii)    A relocation of the Company's
                  principal executive offices to a location outside of the
                  metropolitan Boston, Massachusetts area or the Company's
                  requiring Executive to be based anywhere other than the
                  Company's principal executive offices, except for required
                  travel on the Company's business to an extent substantially
                  consistent with Executive's business travel obligations at the
                  Commencement Date, or any material reduction or adverse change
                  in the emoluments or perquisites of office provided to the
                  Executive at the Commencement Date;

                                    (iv)     A failure by the Company to
                  continue in effect fringe benefits and benefit or compensation
                  plans

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                  (including any profit sharing, bonus, life insurance, health,
                  accidental death or dismemberment or disability plan) with
                  terms which in the aggregate are as favorable as those fringe
                  benefits and plans to which Executive is entitled or in which
                  Executive is participating, as the case may be, at the
                  Commencement Date (or in the case of fringe benefits or plans
                  granted or adopted, as the case may be, after the date hereof
                  and providing a type of benefit not provided by the Company at
                  the Commencement Date, at the respective dates of grant or
                  adoption of such fringe benefits or plans);

                                    (v)      The failure by the Company to
                  obtain the specific assumption of this Agreement by any
                  successor or assign of the Company or any person acquiring a
                  substantial portion of the assets of the Company, or,
                  following any such assumption, assignment or acquisition by an
                  entity other than an affiliate of the Company, the occurrence
                  of any event Executive believes will impair his duties under
                  this Agreement; or

If Executive terminates his employment for "Good Reason", Executive shall be
entitled to the same payments he would have received if his employment had been
terminated by the Company without "Cause".

                  (f)      Gross-up Payments. In the event that Executive
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 Executive in an
amount which results in Executive being in the same after-tax position that he
would have been in had no excise tax under Code Section 4999 been imposed.

                  (g)      Without Good Reason by Executive. If Executive
voluntarily terminates his employment with the Company for any reason other than
"Good Reason", Executive shall be entitled to the same payments he would have
received if his employment had been terminated by the Company for Cause.

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                  (h)      Continuation of Benefits. Upon the termination of
Executive's employment other than as a result of death or for Cause, in addition
to any amounts due under Section 5(a) and (b) hereof and Sections (a) through
(f) of this Section 7, the Company shall provide Executive with a continuation
of those benefits denoted by an asterisk on Exhibit A hereto until the earlier
of Executive's death or 65th birthday; provided, however, that in the event that
Executive obtains other substantially comparable employment during such period,
Executive shall notify the Company and the amount of any benefits to which
Executive is entitled under this Section 7(h) shall be reduced (but not below
zero) by any such benefits provided by Executive's new employer.

                  (i)      Notice of Termination. Any purported termination of
employment by the Company or by Executive 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 Executive's employment hereunder,
Executive 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 my conduct prohibited hereby for Executive or to terminate any
existing relationship with the Company or

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such affiliate or (iii) assist any other person to engage in any activity in any
manner prohibited hereby to Executive. For purposes of this Section 8(a), in the
event of a termination of employment prior to expiration of the Employment Term,
determination of the duration of the Employment Term, shall be made without
regard to the automatic renewal provisions of Section 1 hereof.

                  (b)      It is expressly understood and agreed that although
Executive 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 Executive,
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. Executive 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,

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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 Executive's breach of this covenant. Executive 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, and all copies thereof or therefrom, in any
way relating to the business of the Company and its affiliates, except that he
may retain personal notes, notebooks and diaries. Executive further agrees that
he will not retain or use for his account at my 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. Executive 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, Executive 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.

                  (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 Executive, including but not

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limited to the Original Employment Agreement and the Executive Performance
Incentive Plan. The parties hereto agree that as of the Commencement Date, the
Original Employment Agreement 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 Executive is otherwise entitled and which has already accrued, or been
granted, to Executive, pursuant to the terms of a plan, program or arrangement
of the Company, including without limitation, any outstanding award granted to
Executive under the Company's Executive Performance Incentive Plan for which the
performance period has not closed (or, if closed, payment has not been made)
prior to the Commencement Date. The Executive hereby agrees to provide any
consent, waiver or other documentation necessary to give effect to this
paragraph (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.

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                  (e)      Assignment. This Agreement shall not be assignable by
Executive and shall be assignable by the Company only to a direct or indirect
wholly-owned subsidiary of the Company.

                  (f)      Mitigation. The Executive 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
Executive as the result of employment by another employer after the termination
of his employment hereunder or otherwise, except to the extent set forth in
Section 7(h) of this Agreement.

                  (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 familiar with 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 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 purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets or 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

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the effectiveness of any such succession. 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. Prior to a Change in Control, the term "Company"
shall also mean any affiliate of the Company to which Executive 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. Following a Change in Control the term "Company" shall
not mean any affiliate of the Company to which Executive may be transferred
unless Executive shall have previously approved of such transfer in writing, in
which case 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.

                                    (ii)     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
Executive should die while any amount would still be payable to Executive
hereunder if Executive 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 Executive or, if there is no such
designee, to the estate of Executive,

                  (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

                                     - 14 -

<PAGE>

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
Executive on a quarterly basis for all costs and expenses incurred by Executive
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 Executive was without any justification for commencing or
continuing any such arbitration, action or proceeding, in which case Executive
shall repay to the Company any 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.

                                      - 15 -

<PAGE>

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

                                               /s/ Richard F. Latour
                                               ---------------------------------
                                               Richard F. Latour

                                               Boyle Leasing Technologies, Inc.

                                               /s/ Peter R. Bleyleben, President
                                               ---------------------------------
                                               Peter R. Bleyleben, President

                                      - 16 -<PAGE>

                                                                   EXHIBIT 10.40

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT by and between MicroFinancial Incorporated, a
Massachusetts corporation, and its subsidiaries (the "Company"), and John
Plumlee (the "Executive"), dated as of November 21, 2002 (this "Agreement").

         WHEREAS, Executive and the Company entered into an Employment Agreement
dated as of September 26, 1997 (as amended from time to time, the "Original
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 provide 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.

<PAGE>

         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. 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
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.

         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

                                     - 2 -

<PAGE>

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.

                                     - 3 -

<PAGE>

                  (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 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

                                     - 4 -

<PAGE>

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.

                           (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 absence of
the Executive from the Executive's duties with the Company on a full-time basis
for 180 consecutive business days as a result of incapacity due to mental or
physical illness which is determined to be

                                     - 5 -

<PAGE>

total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative (such
agreement as to acceptability not to be withheld unreasonably).

                  (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.

                  (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

                                     - 6 -

<PAGE>

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

                           (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

                                     - 7 -

<PAGE>

becomes reemployed 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 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

                                     - 8 -

<PAGE>

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), (c) and (d) of this
Agreement, the terms of Executive's employment and the continuing 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 pay to the Executive (1) the Executive's 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, 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 7(a)(i) shall be hereinafter referred to as the "Severance
Amount");

                  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)

                                     - 9 -

<PAGE>

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).

         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

                                     - 10 -

<PAGE>

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.

         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.

                  (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 required to be made hereunder.

                                     - 11 -

<PAGE>

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 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

                                     - 12 -

<PAGE>

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.

         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

                                     - 13 -

<PAGE>

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.

         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:

                  John Plumlee
                  c/o MicroFinancial Incorporated
                  950 Winter Street
                  Waltham, MA 02154

         If to the Company:

                  MicroFinancial Incorporated
                  950 Winter Street
                  Waltham, MA 02154
                  Attention: Richard F. Latour, President and Chief Executive
                             Officer

                                     - 14 -

<PAGE>

         With a copy to:

                  Gerald P. Hendrick, Esq.
                  Edwards & Angell, LLP
                  101 Federal Street
                  Boston, MA 02110

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.

                                     - 15 -

<PAGE>

         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.

                                  ______________________________________________
                                  John Plumlee

                                  MicroFinancial Incorporated

                                  By: __________________________________________

                                     Its:______________________________________

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