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Leasecomm will cancel $24 million in judgments deceptively obtained against consumers 4

MONITORING COMPLIANCE OF DEALERS AND VENDORS

VI. IF IS FURTHER ORDERED that defendants are hereby permanently restrained and enjoined from:

A. Failing to take reasonable steps sufficient to monitor all dealers' and vendors' compliance with
paragraphs I and II of this Order. These steps shall include, at a minimum, establishing a procedure for
receiving, investigating, and responding to customer complaints, and ascertaining the number and
nature of customer complaints regarding transactions in which each dealer or vendor is involved.

B. Failing to take corrective action with respect to any dealer or vendor whom defendants determine is
not complying with this Order, which may include terminating defendants' business relationship with the
dealer or vendor.

DISTRIBUTION OF ORDER

VII. IT IS FURTHER ORDERED that, for a period of five years from the date of entry of this Order, defendants
shall:

A. Deliver a copy of this Order to all principals, officers, directors, and managers

B. Deliver a copy of this Order to all employees who collect from customers, and all employees who
respond to customer complaints or inquiries, and to all employees responsible for contacts with dealers
and vendors.

C. Deliver to all dealers and vendors a copy of those parts of this Order that include the first four pages
of this Order containing all definitions and the section entitled "Prohibitions on Misrepresentations and
Required Disclosures," and the page with the judge's signature.

D. Deliver to all assignees of financing contracts subject to section V of this Order a notice stating that a
federal court order prohibits enforcement of certain provisions of the financing contracts, if any, that
conflict with paragraphs III.A or III.B of this Order. This notice shall include the full text of paragraphs
III.A and III.B, including the section header.

E. Deliver to third party debt collectors a notice stating that distant forum collection suits and the
enforcement of certain contract language are now prohibited by federal court order, as set forth in
paragraphs I.B, III.A, and III.B.
F. Defendants shall seek to secure from each of these persons or entities described in Paragraphs
VII.A-E above a signed and dated statement acknowledging receipt of the Order or notice. Defendants
shall deliver the Order or notice to current personnel and dealers and vendors who are to receive the
Order within 30 days after the date of entry of this Order, to assignees of financing documents before
the assignment is made, to new personnel or dealers and vendors within 30 days after the person
assumes the relevant position or responsibilities or, in the case of a dealer or vendor, associates with
either of the defendants.

RECORD KEEPING

VIII. IT IS FURTHER ORDERED that, for a period of five years from the date of entry of this Order, defendants
and their agents, employees, officers, corporations, and those persons in active concert or participation with
them who receive actual notice of this Order by personal service or otherwise, are hereby restrained and
enjoined from failing to create and retain the following records:

A. As to each customer complaint concerning misrepresentation, fraud, or debt collection practices,
whether received directly or indirectly or through any third party, the records shall include, at a minimum,
to the extent available after reasonable efforts:

1. The customer's name, address, telephone number, and account number;

2. The written complaint, if any, or a summary of any verbal complaint, and the date of the
complaint;

3. The basis of the complaint, including the name of any person or entity complained of, and the
nature and result of any investigation conducted concerning any complaint;

4. Each response and the date of the response;

5. Any final resolution and the date of the resolution; and

6. In the event that no action is taken on the complaint, the reason for the inaction, or if action is
taken, the basis for taking the action.

B. As to each dealer or vendor:

1. Name, address, telephone number, and website address (if applicable); and

2. A listing of what defendants are financing and have financed.

COMPLIANCE REPORTING

IX. IT IS FURTHER ORDERED that, in order that compliance with the provisions of this Order may be monitored:

A. For a period of five years from the date of entry of this Order, defendants shall notify the Commission
of any changes in corporate structure that may affect compliance obligations arising under this Order,
including but not limited to a dissolution, assignment, sale, merger, or other action that would result in
the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affiliate
that engages in any acts or practices subject to this Order; the filing of a bankruptcy petition; or a
change in the corporate name or address, at least 30 days prior to the change, provided that, with
respect to any proposed change in the corporation about which defendants learn less than 30 days prior
to the date the action is to take place, defendants shall notify the Commission as soon as is practicable
after obtaining that knowledge.

B. One hundred eighty days after the date of entry of this Order, defendants shall provide a written
report to the FTC, sworn to under penalty of perjury, setting forth in detail the manner and form in which
they have complied and are complying with this Order. This report shall include, but not be limited to:

(1) Any changes required to be reported pursuant to subparagraph (A) above;

(2) A copy of each acknowledgment of receipt of this Order obtained by defendant pursuant to
paragraph VII above; and

(3) A list of persons or entities, including addresses and phone numbers, who declined to return
the acknowledgment of receipt required by paragraph VII above, and a description of the steps
defendants took in seeking the acknowledgment.

C. For the purposes of this Order, defendants shall, unless otherwise directed by the Commission's
authorized representatives, mail all written notifications or other communications to the Commission to:

Director, Northwest Region
Federal Trade Commission
915 2nd Avenue, Room 2896
Seattle, WA 98174

COMPLIANCE MONITORING

X. IT IS FURTHER ORDERED that, for the purpose of monitoring and investigating compliance with any provision
of this Order:

A. Within 30 days of receipt of written notice from a representative of the Commission, defendants shall
submit additional written reports, sworn to under penalty of perjury; produce documents for inspection
and copying; and appear for deposition.

B. In addition, the Commission is authorized to monitor compliance with this Order by all other lawful
means, including but not limited to the following:

(1) obtaining discovery from any person, without further leave of court, using the procedures
proscribed by Fed. R. Civ. P. 30, 31, 33, 34, 36, and 45;

(2) posing as customers to defendants, defendants' employees, any other entity managed or
controlled in whole or in part by defendants, and defendants' dealers and vendors, without the
necessity of identification or prior notice.

Provided that nothing in this Order shall limit the Commission's lawful use of compulsory process,
pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1, to obtain any documentary
material, tangible things, testimony, or information relevant to unfair or deceptive acts or practices in or
affecting commerce (within the meaning of 15 U.S.C. § 45(a)(1)).

C. Defendants shall permit representatives of the Commission to interview any employer, consultant,
independent contractor, representative, agent, or employee who has agreed to such an interview, relating
in any way to any conduct subject to this Order. The person interviewed may have counsel present.

ACKNOWLEDGMENT OF RECEIPT OF ORDER BY DEFENDANT

XI. IT IS FURTHER ORDERED that each defendant, within 10 days of receipt of this Order as entered by the
Court, must submit to the Commission a truthful sworn statement acknowledging receipt of this Order.

RETENTION OF JURISDICTION

XII. IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this matter for purposes of construction,
modification, and enforcement of this Order.

SO ORDERED, this ______ day of __________, 2003.

UNITED STATES DISTRICT JUDGE

The parties consent to the terms and conditions of the Stipulated Permanent Injunction as set forth above and
consent to its entry.

FOR DEFENDANTS:

MICROFINANCIAL INCORPORATED
By: Richard F. Latour
President & CEO

LEASECOMM CORPORATION
By: Richard F. Latour
Exec. V.P. COO/CFO

RICHARD J. MCCARTHY, BBO # 328600
Edwards & Angell, LLP
101 Federal St.
Boston, MA 02110
617.439.4444
617.439.4170 (fax)
FOR PLAINTIFF FTC:

Dated: May 22, 2003

WILLIAM E. KOVACIC
General Counsel

RANDALL H. BROOK
ROBERT J. SCHROEDER

Attorneys for the
Federal Trade Commission
915 2nd Avenue, Ste. 2896
Seattle, WA 98174
206.220.4487 (Brook)
206.220.4477 (Schroeder)
206.220.6366 (fax)

ATTACHMENT A - NOTICE TO CUSTOMERS

(Customer's Name and address or, if applicable, Customer's Attorney's Name and Address)

Dear (Addressee):

Enclosed is a Satisfaction of Judgment which is being filed with the court in which Leasecomm obtained its initial
judgment against you. This filing concludes this legal proceeding. You may use the enclosed Satisfaction of
Judgment document to show that this debt to Leasecomm is no longer outstanding.

In addition, beginning [the date Order entered] you have no further obligations to make payments on this
judgment to Leasecomm. If you made any payments after [the date Order entered], they will be returned to
you.

This action is being taken as part of a settlement between Leasecomm Corporation and the Federal Trade
Commission, the States of Massachusetts, Florida, Illinois, Texas, North Dakota, North Carolina, Kansas and the
District Attorney's Office for Ventura County, California.

If you have any questions, contact Leasecomm at phone [number] or visit www.ftc.gov/[Leasecomm page to be
specified by FTC].

ATTACHMENT B - NOTICE TO CUSTOMERS

OFFICIAL NOTICE OF IMPORTANT CHANGES IN LEASECOMM CONTRACTS

From the Federal Trade Commission, the States of Massachusetts, Florida, Illinois,
Texas, North Dakota, North Carolina, Kansas, and Ventura County, California.
And from the Leasecomm Corporation

(Customer's Name and address or, if applicable, Customer's Attorney's Name and Address)

Dear (Addressee):

Leasecomm Corporation has agreed to settle proposed cases against it by various government agencies by
making certain changes in its contracts and debt collection procedures. These changes may directly benefit you if
there is a payment dispute between you and Leasecomm.

1. Leasecomm's existing contract says that it may sue you in Massachusetts if you fail to pay on your contract,
regardless of where you live. Leasecomm has agreed to disregard this provision if it files a suit against you. If
you dispute your Leasecomm debt and Leasecomm sues you, it will only file the suit in the county where you
live or where you signed the contract.

[Alternate ¶ 1 if distant forum, SBI suit pending]

1. Leasecomm's existing contract says that it may sue you in Massachusetts, regardless of where you live.
Nonetheless, Leasecomm has agreed to dismiss or transfer collection suits like the one against you to a court in
your county. Leasecomm will ask the court's permission to transfer the suit to your county, or to dismiss the suit
without prejudice. "Without prejudice" means that Leasecomm may refile the suit in your county.

[Add next paragraph if required by local court rules]

You should receive, from Leasecomm or the court, copies of all legal papers relating to its request to transfer
the suit or to dismiss it without prejudice. If you do not complete the papers necessary to show you agree to
transfer the suit or dismiss it without prejudice, Leasecomm may proceed with the suit in Massachusetts.
Leasecomm may not ask that you agree to anything in connection with the transfer or dismissal other than
transferring or dismissing the suit. Nor may Leasecomm charge you any fees or costs because of the transfer or
dismissal.

[Alternate ¶ 1 for distant forum, non-SBI suit pending]

1. Leasecomm's existing contract says that it may sue you in Massachusetts, regardless of where you live.
Nonetheless, Leasecomm has agreed to offer to transfer collection suits like the one against you to a court in
your county. The lawsuit against you is being suspended to give you time to reply to this offer.

If you want to have the suit heard in a local court, Leasecomm will ask the current court's permission to transfer
the suit to your county, or to dismiss the suit without prejudice. "Without prejudice" means that Leasecomm may
refile the suit in your county. Leasecomm may not ask that you agree to anything in connection with the transfer
or dismissal other than transferring or dismissing the suit for refiling in your county. Leasecomm may not charge
you any fees or costs because of the transfer or dismissal.

If you wish to have the suit transferred, you must return the enclosed request form within45 days. If
Leasecomm does not receive the attached form signed by you within that 45-day period, Leasecomm will
resume the pending action in Massachusetts. You will no longer have an opportunity to transfer the case or have
the case dismissed without prejudice to refiling in your local county. Because it is important that Leasecomm
receive your response within 45 days, Leasecomm strongly recommends that if you decide to return the
attached form, you send it by certified mail, return receipt requested, or some other form of mailing that would
provide you with a record of Leasecomm's receipt of the documents.

[Add next paragraph if required by local court rules]

If you request the suit be transferred, you should receive, from Leasecomm or the court, copies of all legal
papers relating to its request to transfer the suit or to dismiss it without prejudice. If you do not complete the
papers necessary to show you agree to transfer the suit or dismiss it without prejudice, Leasecomm may
proceed with the suit in Massachusetts.

2. Leasecomm's contract with you may state that you recognize Leasecomm's "right to enforce the lease free
from any defenses offsets or counterclaims". Leasecomm has agreed not to enforce this provision. This means
that no debt collector or lawsuit may say that you have given up all your defenses or claims. You may still want
to ask a lawyer for advice about whether you do have defenses or claims.

3. Your contract with Leasecomm may direct that payments be automatically deducted from a bank account. If
you are having payments deducted from a personal bank account, please let Leasecomm know whether you
want to stop using automatic payments and how you want to make payments in the future. Leasecomm is
required to make this change if the automatic deductions come from a personal account, but not if they come
from a business account. There is no charge for making this change. [If specified in by the contract, the following
may be used: As stated in your contract, there is an additional charge of $___ for payments not deducted
automatically from your bank account or credit/debit card.]

For further information, contact Leasecomm at phone 206-220-6350 or visit www.ftc.gov/.

John T. Reed on real-estate-investment information | Real estate investment page | Order form | Real estate investment books
Copyright by John T. Reed 2003, a.k.a. John Reed, Jack Reed, 342 Bryan Drive, Alamo, CA 94507, Voice: 925-820-7262, Fax: 925-820-1259, Email: johnreed@johntreed.com

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