Document:

<PAGE>

                                                                   Exhibit 10.11

                                            As of January 3, 2003

Leasecomm Corporation
950 Winter Street
Waltham, MA 02451
Attention: Richard F. Latour, President & Chief Executive Officer

         RE: FORBEARANCE AND MODIFICATION AGREEMENT

Ladies and Gentlemen:

     Reference is hereby made to those certain loans (the "Loans") made pursuant
to and as evidenced by, inter alia, (i) that certain Fourth Amended and Restated
Credit Agreement made as of August 22, 2000 by and among Leasecomm Corporation,
a Massachusetts corporation (the "Borrower"),Fleet National Bank, a national
banking association ("Fleet"), the other financial institutions from time to
time party thereto (together with Fleet, the "Lenders") and Fleet National Bank,
as agent for the Lenders (the "Agent") (hereinafter, as amended, the "Credit
Agreement") and (ii) the other Loan Documents (as that term is defined in the
Credit Agreement). Capitalized terms used herein without definition shall have
the meanings assigned to them in the Credit Agreement.

     The Borrower acknowledges and agrees that (a) as a result of (i) the
failure of the Borrower to comply with the financial covenant set forth in
Section 6.4 of the Credit Agreement for the period ending September 30, 2002,
(ii) the failure of the Borrower to comply with the borrowing base requirements
set forth in Section 2.8(c) of the Credit Agreement from September 30, 2002 to
December 31, 2002 and (iii) the Borrower's failure to repay the Loans on the
Borrowing Base Maturity Date, as required by Section 2.8(a) of the Credit
Agreement, certain Events of Default (the "Specific Defaults") exist under the
Loan Documents and (b) it will likely fail to comply with the borrowing base
requirements set forth in Section 2.8(c) of the Credit Agreement during the
Forbearance Period (as defined in Section 3 below) (the "Prospective Default"
together with the Specific Default, the "Specified Defaults"). The Borrower
agrees that, but for the terms of this Forbearance Agreement, the Agent and the
Lenders may, if they so elect, proceed to further enforce their rights and
remedies under the Loan Documents to collect the Borrower's indebtedness to the
Agent and the Lenders under the Loan Documents. In addition, the Borrower
acknowledges and agrees that, the Lenders are under no obligation to advance
additional funds to, or otherwise extend credit to or for the benefit of, the
Borrower pursuant to the Credit Agreement. Notwithstanding the foregoing, the
Borrower has now requested that the Agent and the Lenders forbear from enforcing
their rights and remedies under the Loan Documents (the "Forbearance") on the
terms and conditions set forth herein. In response to such request, the Agent
and the Lenders agree to refrain from enforcing such rights and remedies until
the Forbearance Termination Date (as hereinafter defined), upon the following
terms and conditions:

<PAGE>
                                      -2-

     SECTION 1. RATIFICATION OF EXISTING AGREEMENTS; TERMINATION OF COMMITMENT.
The Borrower agrees that the Obligations, as evidenced by or otherwise arising
under the Credit Agreement and the other Loan Documents, except as otherwise
expressly modified in this Forbearance Agreement upon the terms set forth
herein, are, by the Borrower's execution of this Forbearance Agreement, ratified
and confirmed in all respects. In addition, by the execution of this Forbearance
Agreement, the Borrower represents and warrants that no counterclaim, right of
set-off or defense of any kind exists or is outstanding as of the date with
respect to such Obligations. As of December 31, 2002, the aggregate principal
amount of the Loans is $126,555,646.60. Further, the parties agree that,
effective as of the date hereof, the Commitment shall be terminated and reduced
to $0.

     SECTION 2. REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties made by the Borrower in the Credit Agreement and the other Loan
Documents are true and correct on the date hereof as if made on and as of the
date hereof, except with respect to the occurrence of the Specified Defaults and
to the extent that any of such representations and warranties relate by their
terms to a prior date they shall be true and correct as of such prior date.
Additionally, the Borrower represents and warrants that it does not have any
Subsidiaries other than MFI Finance Corp. I and MFI Finance II LLC.

     SECTION 3. FORBEARANCE OBLIGATIONS. Subject to all of the other terms and
conditions set forth herein, the Agent and the Lenders agree to forbear from
exercising their rights and remedies under the Credit Agreement and the other
Loan Documents to collect the indebtedness of the Borrower to the Agent and the
Lenders under the Credit Agreement and the other Loan Documents until that date
(the "Forbearance Termination Date") which is the earliest to occur of (i)
January 24, 2003, (ii) the failure after the date hereof of any of the Companies
to comply with any of the terms or undertakings of this Forbearance Agreement,
(iii) the occurrence after the date hereof of any Default or Event of Default
other than the Specified Defaults, (iv) the occurrence of any further material
adverse change to the business, assets, financial condition or prospects of the
any of the Companies (the parties agree that reorganization, restructuring or
any charges associated with settlements (including, without limitation, tolling
agreements) with any Attorneys General shall not constitute a material adverse
change) and (v) the date that any of the Companies or any affiliate of any of
the Companies or any person or entity claiming by or through any of the
Companies joins in, assists, cooperates or participates as an adverse party or
adverse witness in any suit or other proceeding against the any Lender or any
affiliate of any Lender relating to the indebtedness referred to as the
Obligations or any amounts owing hereunder in connection with or related to any
of the transactions contemplated by the Credit Agreement, the other Loan
Documents, this Forbearance Agreement or any documents, agreements or
instruments executed in connection with this Forbearance Agreement) (each of the
foregoing conditions set forth in the immediately preceding items (i)-(v) being
referred to as a "Forbearance Termination Event"). On and after the Forbearance
Termination Date, the forbearance obligations of the Agent and the Lenders set
forth herein shall automatically, without the requirement of any notice,
terminate and the Agent and

<PAGE>
                                      -3-

the Lenders shall be free in their sole and absolute discretion to proceed to
enforce any or all of their rights and remedies set forth in this Forbearance
Agreement, the Credit Agreement, the other Loan Documents and applicable law,
including, without limitation, the right to demand the immediate repayment of
the Loans and all other Obligations in full. (The time period between the
Forbearance Closing Date and the Forbearance Termination Date is referred to
herein as the "Forbearance Period")

     SECTION 4. CONDITIONS TO FORBEARANCE OBLIGATIONS. The Agent, the Lenders
and the Borrower agree that the forbearance obligations of the Lenders herein
shall be effective upon the satisfaction of the following conditions precedent,
each in form and substance satisfactory to the Agent, on or prior to January 3,
2003 (the date of the satisfaction of such conditions precedent referred to
herein as the "Forbearance Closing Date"):

          (a) The Borrower and the Majority Lenders shall have executed and
delivered to the Agent this Forbearance Agreement.

          (b) The Borrower shall have executed and delivered to the Agent a fee
letter (the "Agent's Fee Letter").

          (c) The Agent shall have received the first monthly installment of the
fee described in the Agent's Fee Letter.

          (d) The Agent shall have received the Modification Fee (defined in
Section 6.5 below).

          (e) The Agent shall have received evidence that all corporate action
necessary for the valid execution and delivery by the Companies of this
Forbearance Agreement and the performance of the transactions contemplated
hereby and thereby shall have been taken.

          (f) The Agent and the Lenders shall have received payment for all fees
and expenses including, without limitation, reasonable legal fees and expenses,
for which invoices or reasonable estimates therefor have been provided to the
Borrower on or prior to the Forbearance Closing Date.

          (g) The representations and warranties of the Borrower in each of the
Loan Documents shall be true and correct as of the Forbearance Closing Date,
except with respect to the occurrence of the Specified Defaults waived herein
and to the extent that any of such representations and warranties relate by
their terms to a prior date they shall be true and correct as of such prior
date.

          (h) There shall have occurred no Default or Event of Default other
than the Specified Defaults.

     SECTION 5. AMENDMENTS TO CREDIT AGREEMENT. Without any prejudice or
impairment whatsoever to any of the rights and remedies of the Agent or any
Lender contained in the Credit Agreement or in any other Loan Documents (except

<PAGE>
                                      -4-

as provided for herein), the Borrower, the Lenders and the Agent agree that,
effective as of the date hereof, the Credit Agreement shall be amended as
follows:

     SECTION 5.1 DEFINITIONS. Section 1.1 of the Credit Agreement is hereby
amended as follows:

     (a) by adding the following definition in the appropriate alphabetical
location:

     "Companies. The Borrower and the Parent."

     (b) by amending the definition of Obligations contained therein to replace
the phrase "and the Conversion Term Loan" with the following phrase:

     ", the Conversion Term Loan and the indemnity described in Section 5.14
hereof"

     SECTION 5.2 CERTAIN ADDITIONAL COVENANTS. Section 5 of the Credit Agreement
is hereby further amended by adding the following new Sections 5.12, 5.13, 5.14,
5.15, 5.16 and 5.17 thereto in the correct numerical sequence:

          SECTION 5.12 CASH FLOW FORECAST AND BORROWING BASE PROJECTION. The
     Borrower shall deliver to the Agent and the Lenders, weekly, commencing on
     or before December 20, 2002, a 13 week forecast of cash flows, detailing
     all sources and uses of cash on a weekly basis, reasonably acceptable to
     the Agent and the Lenders, together with a bi-weekly Borrowing Base report.

          SECTION 5.13 2003 BUSINESS PLAN. The Borrower shall deliver to the
     Agent and the Lenders, by January 10, 2003, a business plan for 2003 (the
     "2003 Business Plan"), prepared by management and the Borrower's Consultant
     (as defined in Section 5.17 hereof), for the future operation and conduct
     of the business, including a plan to deal with the indebtedness owed to the
     Lenders. The 2003 Business Plan shall include monthly forecasts as to cash
     flow and collateral levels, as well as proforma profit and loss statements
     and balance sheets for the next twelve months. The Business Plan shall
     also: (i) list in detail all sources of revenue and expenses, including
     intended executive compensation, (ii) elaborate on the nature of all
     proposed capital expenditures and (iii) itemize all human resources
     actions, including impacts on staffing levels and severance costs.

          SECTION 5.14 BANK ACCOUNTS; INDEMNITY. As of the Forbearance
     Termination Date, and at all times thereafter, the Borrower shall insure
     that all of its bank accounts are under the control of one of the Lenders.
     Additionally, the Borrower shall indemnify the Agent and the Lenders and
     hold the Agent and the Lenders harmless against any loss, cost or expense
     incurred by the Agent and/or the Lenders in providing any payroll, funds
     transfer and other cash management services to the Borrower.

<PAGE>
                                      -5-

          SECTION 5.15 LENDERS' CONSULTANT. The Lenders shall have the right to
     engage, either directly or through the Agent's counsel, Argus Management
     Corporation or such other firm as the Lenders may determine in their sole
     discretion (the "Lenders' Consultant") in order to conduct an audit of the
     Companies' business and operations and the satisfaction of the Loans. . The
     Companies agree to cooperate with the Lenders' Consultant and to pay the
     reasonable fees and expenses of such Lenders' Consultant. The scope of the
     Lenders' Consultant's audit shall include an examination of the Companies'
     enterprise valuation, testing of the Companies' 2002 and 2003 business
     plans and 13-week cash flow forecasts, and such other analysis as the
     Lenders shall reasonably request, including but not limited to:

     (a) a review of (i) the location of the Lenders' collateral; (ii) security
and perfection issues, including but not limited to, stamps on the Lenders'
leases; (iii) a test of delinquency rates; (iv) whether adequate collateral
monitoring systems have been put in place; (v) the Agent receiving electronic
copies of the Lenders' leases; (vi) the components of the current borrowing
base; (vii) the assets of the Companies; (viii) the services provided by the
servicer; (ix) the securitization collateral; (x) the dealer network,
specifically with a view toward the manner and feasibility of put-back of
leases (provided, however, that the Lenders' Consultant shall not contact any
dealers or any customers of dealers) and (xi) subordinated debt payments

     (b) a review of cash flows of the Companies, including but not limited to
(i) vet assumptions; (ii) operating expenses and (c) cash flows in connection
with securitizations.

     (c) a review of cash management of the Companies, including but not limited
to (i) segregation of Lender and securitization cash and (ii) the cost and
impact of instituting lockboxes

     (d) a review of financial reports of the Companies, including but not
limited to (i) the 13 week rolling cash flow forecast described in Section 5.12
herein; (ii)the 2003 business plan described in Section 5.13 herein and (iii)
taxes

     (e) after reviewing the report of the Lenders' Consultant, the Lenders will
consider amending the definition of "Borrowing Base" in the Credit Agreement
with a view towards reassessing the Borrower's availability thereunder to the
extent that it would be prudent to do so based upon the Lenders' Consultant's
report and after applying each Lender's customary underwriting criteria.

          SECTION 5.16 BORROWER'S CONSULTANT. The Borrower shall retain, at its
     sole cost and expense, the services of a financial consultant (the
     "Borrower's Consultant") acceptable to the Agent and the Lenders and on
     terms acceptable to the Agent and the Lenders (it being acknowledged that
     the Borrower's present arrangement is with Evan Blum of Balfour Capital
     Advisors). The duties of the Borrower's Consultant shall include, but are
     not limited to (i) conducting a review of the Borrower's business in
     connection

<PAGE>
                                      -6-

     with preparation of the reports delivered pursuant to Sections 5.12 and
     5.13 hereof and (ii) identify, contact and solicit interest from potential
     sources of a refinancing of the Borrower, contemplating a repayment of the
     Obligations in full. Such Borrower's Consultant shall prepare, and provide
     to the Lenders, copies of all marketing materials to be used in soliciting
     potential financing sources of the Borrower (including, without limitation,
     any so-called confidential information memorandum, or other "books"
     describing the Borrower to potential financing sources) and shall identify,
     contact and solicit interest from potential financing sources,
     contemplating a refinancing of the Borrower in an amount sufficient to
     repay the Obligations in full. The Borrower shall provide, and shall cause
     such Borrower's Consultant to provide, the Agent with information as to the
     progress of such refinancing efforts. The Borrower's Consultant shall
     furnish the Lenders with weekly written progress reports, commencing on
     Friday, January 10, 2003 and continuing on the first Friday of each week
     until the Obligations are paid in full. Semi-monthly verbal reports shall
     be incorporated into a regularly scheduled semi-monthly Leasecomm
     conference call to be held a 1:30 p.m., eastern standard time, on each
     Thursday during the Forbearance Period. All information made available to
     the Financial Consultant shall also be made available to the Agent and the
     Lenders."

          SECTION 5.17 PLEDGE OF COLLATERAL. The Borrower covenants that, as of
     Forbearance Closing Date, and at all times thereafter until the Obligations
     are repaid in full, the Borrower shall pledge all of its assets (both
     existing and after-acquired), including, without limitation, all leases
     (including previously unpledged leases), services contracts, rental
     contracts, equipment, accounts receivable and cash to the Agent, on behalf
     of the Lenders.

     SECTION 5.3 MERGER; CONSOLIDATION; SALE OR LEASE OF ASSETS. Section 7.4(ii)
of the Credit Agreement is hereby amended to read, in its entirety, as follows:

     "(ii) the sale, transfer, assignment or disposition of any Eligible
     Equipment, in the ordinary course of business, provided that the net
     proceeds thereof are used to prepay the Loans in accordance with Section
     2.9 hereof; and"

     SECTION 5.4 EVENTS OF DEFAULT. Section 8.l(b) of the Credit Agreement is
hereby amended by adding references to Sections 5.12, 5.13, 5.14, 5.15, 5.16 and
5.17 in the correct numerical sequence.

     SECTION 6. ADDITIONAL COVENANTS OF THE BORROWER, PARENT AND THE
SUBSIDIARIES. The Borrower covenants and agrees with and for the benefit of the
Agent and the Lenders that, notwithstanding anything to the contrary contained
in the Credit Agreement or any of the other Loan Documents:

     SECTION 6.1 SEGREGATION OF CASH. The Borrower shall work diligently and use
its best efforts to ensure that on or before the Forbearance Termination Date,
and at all times thereafter, all cash collateral of the Lenders is segregated
from all other cash and is clearly designated as cash collateral belonging to
the Lenders.

<PAGE>
                                      -7-

     SECTION 6.2 STAMPING OF LEASES. The Borrower shall work diligently and use
its best efforts to cause, within a reasonable period of time, and at all times
thereafter, the first page of each lease entered into by the Borrower (both
before and after the date hereof) as lessor, that constitutes part of the
Lenders' collateral is stamped with the legend set forth on Schedule A attached
hereto, stating that such lease is subject to a security interest in favor of
the Agent, provided however that the stamping process will begin on the
Forbearance Closing Date.

     SECTION 6.3 NEGATIVE PLEDGE: The Companies shall not create, incur, assume
or suffer to exist any mortgage, pledge, security interest, lien or other charge
or encumbrance upon or with respect to any of its property or assets, or assign
or otherwise convey any right to receive income, including the sale or discount
of accounts receivable with or without recourse during the Forbearance Period.

     SECTION 6.4 SUBORDINATED DEBT. Notwithstanding anything to the contrary
contained in the Subordinated Debt Documents, the Borrower and the Parent agree
that they will not make any cash payment of principal, interest or other amounts
on or in respect of the Subordinated Debt, in the aggregate, in excess of
$35,000 after the date hereof, provided that no payments in respect of the
Subordinated Debt shall be made after the date hereof until such time as the
Borrower has provided the Agent with fully executed copies of the Subordinated
Debt Documents.

     SECTION 6.5 MODIFICATION FEE. The Borrower shall pay to the Agent a fee
equal to $175,000 (the "Modification Fee") for the pro rata account of the
Lenders. The Modification Fee will be fully-earned as of the date hereof and
will be paid on or before the Forbearance Closing Date.

     SECTION 6.6 PAYMENTS DURING FORBEARANCE PERIOD. During the Forbearance
Period principal payments on the Loans shall be made as follows:

           PERIOD ENDING                          AMOUNT OF EACH PAYMENT
          ---------------                         ----------------------
          January 2, 2003                              $3,835,019.59

         SECTION 6.7 SECURITIZATION WAIVERS. The Borrower shall deliver to the
Agent, not later than January 10, 2003 (provided that the Agent may agree to
extend such time period if it has been provided with evidence that the Borrowers
are diligently pursuing their obligations hereunder) fully executed copies of
(i) waiver documents, in form and substance satisfactory to the Agent, in its
sole discretion, from Ambac Assurance Corporation ("Ambac")waiving any and all
defaults, events of default and servicer events of default under any documents
to which Ambac and any of the Companies or the Subsidiaries are party and (ii)
waiver documents, in form and substance satisfactory to the Agent, in its sole
discretion, from NM Rothschild & Sons Limited ("Rothschild") waiving any and all
defaults, events of default and

<PAGE>
                                        -8-

servicer events of default under any documents to which Rothschild and any of
the Companies or the Subsidiaries are party.

     SECTION 6.8 SECURITY DOCUMENTS. The Borrower shall deliver to the Agent,
not later than January 10, 2003 (provided that the Agent may agree to extend
such time period if it has been provided with evidence that the Borrowers are
diligently pursuing their obligations hereunder) fully executed copies of all
necessary modifications to the Security Documents, in form and substance
acceptable to the Agent, in its sole discretion, to reflect that the Agent, on
behalf of the Lenders, has a valid first priority security interest in all
assets of the Borrower including, without limitation, all leases (including
previously unpledged leases), service contracts, rental contracts, accounts
receivable and cash of the Borrower.

     SECTION 6.9 PERFECTION CERTIFICATE. The Borrower shall deliver to the
Agent, not later than January 10, 2003 (provided that the Agent may agree to
extend such time period if it has been provided with evidence that the Borrowers
are diligently pursuing their obligations hereunder) an updated perfection
certificate, in form and substance acceptable to the Agent, executed by the
Borrower and, evidence that, among other things, there exists no liens or
security interests on the assets of the Borrower other than Permitted
Encumbrances.

     SECTION 6.10 AUTHORIZATION FILE STATEMENTS. The Borrower hereby irrevocably
authorizes the Agent at any time and from time to time during which any Loans
are outstanding, to file, in any filing office in any Uniform Commercial Code
jurisdiction where the filing of an initial financing statement is necessary or
desirable to perfect the interests of the Agent or the Lenders in the collateral
for the Obligations, any initial financing statements and amendments thereto
that (a) indicate the collateral (i) as all assets of the Borrower or words of
similar effect, regardless of whether any particular asset comprised in the
collateral falls within the scope of Article 9 of the Uniform Commercial Code of
the state or such jurisdiction, or (ii) as being of an equal or lesser scope or
with greater detail, and (b) provide any other information required by part 5 of
Article 9 of the Uniform Commercial Code of the state or such other jurisdiction
for the sufficiency or filing office acceptance of any financing statement or
amendment, including whether the Borrower is an organization, the type of
organization and any organization identification numbers issued to the Borrower.
The Borrower agrees to furnish any such information to the Agent as soon as
reasonably practicable upon the Agent's request. The Borrower also ratifies its
authorization for the Agent to have filed in any Uniform Commercial Code
jurisdiction any like initial financing statements or amendments thereto if
filed prior to the date hereof.

     SECTION 7. INTEREST RATES AND DEFAULT INTEREST.

     SECTION 7.1 INTEREST RATES. Notwithstanding the provisions of the Credit
Agreement, interest on the Loans shall accrue at a rate of the Alternate Base
Rate plus 1.00% per annum until the Obligations are paid in full. Further, no
new LIBOR Loans shall be permitted or made available during the Forbearance
Period.

<PAGE>
                                       -9-

     SECTION 7.2 DEFAULT INTEREST. Pursuant to Section 2.6(e) of the Credit
Agreement, due to the occurrence of the Specified Defaults the Loans currently
bear interest at a rate per annum equal to two percent (2.0%) (the "Default
Spread") above the rate of interest otherwise applicable to such Loans (the
"Default Rate"). Interest on the Loans shall continue to accrue at the Default
Rate through the Forbearance Termination Date; provided that, notwithstanding
the provisions of the Credit Agreement, the Default Spread shall be paid in full
on the Forbearance Termination Date.

     SECTION 8. COVENANT CALCULATION DURING FORBEARANCE PERIOD. The calculation
of any financial covenants set forth in Section 6 of the Credit Agreement for
the quarter ending December 31, 2002 shall not include reorganization,
restructuring or any charges associated with settlements (including, without
limitation, tolling agreements) with any Attorneys General.

     SECTION 9. NO PRESENT CLAIMS. The Companies acknowledge and agree that, as
of the date hereof: (a) none of the Companies or, to the knowledge of any of the
Companies, any of their affiliates has any claim or cause of action against any
of the Lenders or the Agent (or any of their directors, officers, employees,
attorneys or agents); (b) none of the Companies, or to the knowledge of any of
the Companies, any of their affiliates has offset rights, counterclaims or
defenses of any kind against any of their obligations, indebtedness or
liabilities to any of the Lenders or the Agent; and (c) each of the Lenders and
the Agent has heretofore properly performed and satisfied in a timely manner all
of its obligations to the Companies and, to the knowledge of each of the
Companies, each of their affiliates. The Lenders and the Agent wish (and the
Companies agree) to eliminate any possibility that any past conditions, acts,
omissions, events, circumstances or matters would impair or otherwise adversely
affect any of the rights, interests, contracts, collateral security or remedies
of the Lenders or the Agent. Therefore, Companies, each on its own behalf and on
behalf of each of its respective successors and assigns, hereby waives, releases
and discharges the Lenders and the Agent and all of their directors, officers,
employees, attorneys and agents, from any and all claims, demands, actions or
causes of action on or before the date hereof and arising out of or in any way
relating to the Loan Documents and any documents, instruments, agreements
(including this Forbearance Agreement), dealings or other matters connected with
the Loan Documents, including, without limitation, all known and unknown
matters, claims, transactions or things occurring on or prior to the date of
this Forbearance Agreement related to the Loan Documents. The waivers, releases,
and discharges in this paragraph shall be effective regardless of any other
event that may occur or not occur prior to, or on or after the date hereof.

     SECTION 10. MARSHALLING. Neither the Agent nor the Lenders shall be
required to marshal any present or future collateral security for the Companies'
obligations to the Agent or such Bank under the Loan Documents or to resort to
such collateral security or other assurances of payment in any particular order,
and all of their rights in respect of such collateral security shall be
cumulative and in addition to all other rights, however existing or arising. To
the extent that they lawfully may, the Companies hereby agree that they will not
invoke any law relating to the

<PAGE>
                                      -10-

marshalling of collateral which might cause delay in or impede the Agent's or
such Bank's rights under any document, agreement or instrument evidencing or
securing the Borrower's obligations to the Agent and the Lenders under the Loan
Documents and, to the extent that it lawfully may, the Borrower hereby
irrevocably waives the benefits of all such laws.

     SECTION 11. NO WAIVER. Except as otherwise expressly provided for in this
Forbearance Agreement, nothing in this Forbearance Agreement shall extend to or
affect in any way any of the rights or obligations of the Borrower or any of the
Agent's or the Lenders' obligations, rights and remedies arising under the Loan
Documents. Neither the Agent nor any Bank shall be deemed to have waived any or
all of its rights or remedies with respect to any Default or Event of Default
existing on the date hereof or arising hereafter.

     SECTION 12. EXPENSES. The Borrower agrees to pay to the Agent and the
Lenders upon written demand therefor (i) an amount equal to any and all
reasonable out-of-pocket costs, expenses, and liabilities (including, without
limitation, fees, disbursements, expenses and liabilities of or relating to,
commercial finance examinations, collateral audits, appraisals, the Lender's
Consultant and collateral examinations referred to in Section 5.2 hereof,
Uniform Commercial Code and other lien searches and filing fees, and legal
counsel) incurred or sustained by the Agent or any of the Lenders in connection
with the preparation of this Forbearance Agreement, the documents and
instruments contemplated hereby, the administration or interpretation of the
Loan Documents, and (ii) from time to time any and all reasonable out-of-pocket
costs or expenses, legal fees, disbursements and other expenses hereafter
incurred or sustained by the Agent or any of the Lenders in connection with the
administration of credit extended by the Agent to the Borrower, the preservation
of or enforcement of their rights under the Loan Documents, in respect of the
collateral, and/or in respect of any of the Borrower's other obligations to the
Agent. The Lenders and the Borrower authorize the Agent and the Lenders to, with
prior written notice to the Borrower, to debit any accounts maintained by the
Borrower with such any such Lender for any fees, expenses, or other amounts due
and payable by the Borrower hereunder, under the Credit Agreement or any of the
other Loan Documents, provided that should the Agent or the Lenders debit any
such accounts during the Forbearance Period, they shall provide two Business
Days prior written notice of such debit to the Borrower.

     SECTION 13. MISCELLANEOUS.

     (a) This Forbearance Agreement shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Massachusetts.

     (b) This Forbearance Agreement shall constitute a Loan Document under the
Credit Agreement; the failure to comply with the covenants contained herein
shall constitute an Event of Default under the Credit Agreement; and all
obligations included in this Forbearance Agreement (including, without
limitation, all obligations for the payment of principal, interest, fees, and
other amounts and

<PAGE>
                                      -11-

expenses) shall constitute obligations under the Loan Documents and secured by
the collateral security for the Obligations.

<PAGE>

     If the foregoing terms are acceptable to you, we would request that you
indicate your agreement thereto by signing the counterpart of this letter
enclosed herewith and returning such counterpart to us.

                                        Yours sincerely,

                                        FLEET NATIONAL BANK, individually
                                        and as Agent

                                        By: /s/ Daniel D. Butler
                                            ------------------------------------
                                            Name:  DANIEL D. BUTLER
                                            Title: AUTHORIZED OFFICER

                                        BANKGROUP NORTH, INC.

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

                                        BROWN BROTHERS HARRIMAN & CO.

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

                                        CITIBANK

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

                                        CITIZENS BANK OF MASSACHUSETTS

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

                                        KEYBANK NATIONAL ASSOCIATION

<PAGE>

     If the foregoing terms are acceptable to you, we would request that you
indicate your agreement thereto by signing the counterpart of this letter
enclosed herewith and returning such counterpart to us.

                                        Yours sincerely,

                                        FLEET NATIONAL BANK, individually
                                        and as Agent

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

                                        BANKNORTH, NA

                                        By: /s/ Mark H. Lawley
                                            ------------------------------------
                                            Name: Mark H. Lawley
                                            Title: V.P.

                                        BROWN BROTHERS HARRIMAN & CO.

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

                                        CITIBANK

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

                                        CITIZENS BANK OF MASSACHUSETTS

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

                                        KEYBANK NATIONAL ASSOCIATION

<PAGE>

     If the foregoing terms are acceptable to you, we would request that you
indicate your agreement thereto by signing the counterpart of this letter
enclosed herewith and returning such counterpart to us.

                                        Yours sincerely,

                                        FLEET NATIONAL BANK, individually
                                        and as Agent

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

                                        BANKGROUP NORTH, INC.

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

                                        BROWN BROTHERS HARRIMAN & CO.

                                        By: /s/ Jared S. Keyes
                                            ------------------------------------
                                            Name:  Jared S. Keyes
                                            Title: Managing Director

                                        CITIBANK

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

                                        CITIZENS BANK OF MASSACHUSETTS

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

                                        KEYBANK NATIONAL ASSOCIATION

<PAGE>

     If the foregoing terms are acceptable to you, we would request that you
indicate your agreement thereto by signing the counterpart of this letter
enclosed herewith and returning such counterpart to us.

                                        Yours sincerely,

                                        FLEET NATIONAL BANK, individually
                                        and as Agent

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

                                        BANKGROUP NORTH, INC.

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

                                        BROWN BROTHERS HARRIMAN & CO.

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

                                        CITIBANK

                                        By: /s/ George V. Milbury
                                            ------------------------------------
                                            Name:  George V. Milbury
                                            Title: Vice President

                                        CITIZENS BANK OF MASSACHUSETTS

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

                                        KEYBANK NATIONAL ASSOCIATION

<PAGE>

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

                                        NATIONAL CITY BANK

                                        By: /s/ Michael J. Labrum
                                            ------------------------------------
                                            Name:  Michael J. Labrum
                                            Title: Senior Vice President

                                        U.S. BANK NATIONAL ASSOCIATION

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

                                        UNION BANK OF CALIFORNIA

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

ACCEPTED and AGREED as of
December     , 2002:

Borrower:

LEASECOMM CORPORATION

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

Parent:

MICROFINANCIAL INCORPORATED, as guarantor under the Parent Guarantee (the
undersigned acknowledges the above agreement and agrees that this Forbearance
Agreement shall not impair or limit the undersigned's obligations in respect
of the Parent Guarantee)

<PAGE>

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

                                        NATIONAL CITY BANK

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

                                        U.S. BANK NATIONAL ASSOCIATION

                                        By: /s/ Joseph P. Howard
                                            ------------------------------------
                                            Name:  Joseph P. Howard
                                            Title: Vice President

                                        UNION BANK OF CALIFORNIA

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

ACCEPTED and AGREED as of
December     , 2002:

Borrower:

LEASECOMM CORPORATION

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

Parent:

MICROFINANCIAL INCORPORATED, as guarantor under the Parent Guarantee (the
undersigned acknowledges the above agreement and agrees that this Forbearance
Agreement shall not impair or limit the undersigned's obligations in respect
of the Parent Guarantee)

<PAGE>

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

                                        NATIONAL CITY BANK

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

                                        U.S. BANK

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

                                        UNION BANK OF CALIFORNIA

                                        By: /s/ Cecilia M. Valente
                                            ------------------------------------
                                            Name:  CECILIA M. VALENTE
                                            Title: SENIOR VICE PRESIDENT

ACCEPTED and AGREED as of
December     , 2002:

Borrower:

LEASECOMM CORPORATION

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

Parent:

MICROFINANCIAL INCORPORATED, as guarantor under the Parent Guarantee (the
undersigned acknowledges the above agreement and agrees that this

<PAGE>

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

                                        NATIONAL CITY BANK

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

                                        U.S. BANK

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

                                        UNION BANK OF CALIFORNIA

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

ACCEPTED and AGREED as of
December     , 2002:

Borrower:

LEASECOMM CORPORATION

By: /s/ Peter Bleyleben
    ------------------------------------
    Name:  Peter Bleyleben
    Title: President

Parent:

MICROFINANCIAL INCORPORATED, as guarantor under the Parent Guarantee (the
undersigned acknowledges the above agreement and agrees that this Forbearance
Agreement shall not impair or limit the undersigned's obligations in respect
of the Parent Guarantee)

By: /s/ James R. Jackson
    ------------------------------------
    Name:  James R. Jackson
    Title: CFO

<PAGE>

                                   SCHEDULE A

                                     LEGEND

THIS LEASE, THE UNDERLYING EQUIPMENT RELATING TO THIS LEASE AND THE PROCEEDS OF
THIS LEASE ARE SUBJECT TO A SECURITY INTEREST IN FAVOR OF FLEET NATIONAL BANK,
AS AGENT, FOR THE BENEFIT OF FLEET NATIONAL BANK AND THE FINANCIAL INSTITUTIONS
PARTY TO THAT CERTAIN FOURTH AMENDED AND RESTATED CREDIT AGREEMENT, MADE AS OF
AUGUST 22, 2000, AS AMENDED.<PAGE>

                                                                   EXHIBIT 10.12

                                January 24, 2003

Leasecomm Corporation
950 Winter Street
Waltham, MA 02451
Attention: Richard F. Latour, President & Chief Executive Officer

         Re:      Forbearance and Modification Agreement

Ladies and Gentlemen:

         Reference is hereby made to that certain letter agreement captioned
Forbearance and Modification Agreement (the "Forbearance Agreement"), dated as
of January 3, 2003, by and among Leasecomm Corporation, a Massachusetts
corporation (the "Borrower"), Fleet National Bank, a national banking
association ("Fleet"), the other financial institutions from time to time party
thereto (together with Fleet, the "Lenders") and Fleet National Bank, as agent
for the Lenders (the "Agent") (the "Forbearance Agreement"). Capitalized terms
used and not defined herein shall have the meanings ascribed thereto in the
Forbearance Agreement.

         Effective as of the date hereof:

         (i)      Section 3(i) of the Forbearance Agreement is amended by
                  deleting the date "January 24, 2003" and substituting in lieu
                  thereof the date "February 7, 2003."

         (ii)     The Forbearance Agreement is hereby amended by deleting
                  Section 7.2 and substituting in lieu thereof the following:

         "Pursuant to Section 2.6(e) of the Credit Agreement, due to the
         occurrence of the Specified Defaults the Loans currently bear interest
         at a rate per annum equal to two percent (2.0%) (the "Default Spread")
         above the rate of interest otherwise applicable to such Loans (the
         "Default Rate"). Interest on the Loans shall continue to accrue at the
         Default Rate through the Forbearance Termination Date; provided that,
         notwithstanding the provisions of the Credit Agreement, an amount equal
         to the Default Spread which has accrued as of January 24, 2003 shall be
         paid on January 24, 2003 and an amount equal to the Default Spread
         which accrues from and after January 24, 2003 until the Forbearance
         Termination Date shall be paid in full on the Forbearance Termination
         Date."

<PAGE>

         (iii)    Section 6.6 of the Forbearance Agreement is hereby amended by
                  deleting the table and substituting in lieu thereof the
                  following table:

<TABLE>
<CAPTION>
PERIOD ENDING     AMOUNT OF PAYMENT
-----------------------------------
<S>               <C>
January 2, 2003    $  3,835,019.59
-----------------------------------
February 1, 2003   $  3,835,019.59
-----------------------------------
</TABLE>

         Except as set forth herein, all of the terms and conditions of the
Forbearance Agreement and the Credit Agreement and the other Loan Documents (in
each case, as amended by the Forbearance Agreement) shall remain in full force
and effect. As consideration for the Lenders entering into this letter
agreement, each of the Companies renews and affirms, effective as of the date
hereof, their acknowledgments and agreements contained in the Forbearance
Agreement.

                                       2

<PAGE>

         If the foregoing terms are acceptable to you, we would request that you
indicate your agreement thereto by signing the counterpart of this letter
enclosed herewith and returning such counterpart to us.

                                       Yours sincerely,

                                       FLEET NATIONAL BANK, individually and as
                                       Agent

                                       By: /s/ Daniel D. Butler
                                           ----------------------------------
                                           Name:  Daniel D. Butler
                                           Title: Authorized Officer

                                       BANKNORTH, N.A.

                                       By: /s/ Mark H. Lawley
                                           ----------------------------------
                                           Name:  Mark H. Lawley
                                           Title: V.P.

                                       BROWN BROTHERS HARRIMAN & CO.

                                       By: /s/ Jared S. Keyes
                                           ----------------------------------
                                           Name:  Jared S. Keyes
                                           Title: Managing Director

                                       CITIBANK

                                       By: /s/ George V. Milbury
                                           ----------------------------------
                                           Name:  George V. Milbury
                                           Title: Vice President

                                       CITIZENS BANK OF MASSACHUSETTS

                                       By: /s/ Authorized Signatory
                                           ----------------------------------
                                           Name:
                                           Title:

<PAGE>

                                       KEYBANK NATIONAL ASSOCIATION

                                       By: /s/ Authorized Signatory
                                           ----------------------------------
                                           Name:
                                           Title:

                                       NATIONAL CITY BANK

                                       By: /s/ Michael J. Labrum
                                           ----------------------------------
                                           Name:  Michael J. Labrum
                                           Title: Senior Vice President

                                       U.S. BANK

                                       By: /s/ Joseph P. Howard
                                           ----------------------------------
                                           Name:  Joseph P. Howard
                                           Title: Vice President

                                       UNION BANK OF CALIFORNIA

                                       By: /s/ Cecilia M. Valente
                                           ----------------------------------
                                           Name:  Cecilia M. Valente
                                           Title: Senior Vice President

ACCEPTED and AGREED as of
January 24, 2003:

Borrower:

LEASECOMM CORPORATION

By: /s/ Peter Bleyleben
    --------------------------------
    Name:  Peter Bleyleben
    Title: President

Parent:

MICROFINANCIAL INCORPORATED

By: /s/ James R. Jackson
    --------------------------------
    Name:  James R. Jackson
    Title: CFO

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}]]