0001104659-15-000334.txt : 20150105 0001104659-15-000334.hdr.sgml : 20150105 20150105162433 ACCESSION NUMBER: 0001104659-15-000334 CONFORMED SUBMISSION TYPE: SC TO-T/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20150105 DATE AS OF CHANGE: 20150105 GROUP MEMBERS: FORTRESS CREDIT ADVISORS LLC GROUP MEMBERS: MF INVESTOR GP LLC GROUP MEMBERS: MF PARENT LP SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MICROFINANCIAL INC CENTRAL INDEX KEY: 0000827230 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS BUSINESS CREDIT INSTITUTION [6159] IRS NUMBER: 042962824 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-T/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-58187 FILM NUMBER: 15505176 BUSINESS ADDRESS: STREET 1: 16 NEW ENGLAND EXECUTIVE PARK STREET 2: SUITE 200 CITY: BURLINGTON STATE: MA ZIP: 01803 BUSINESS PHONE: 7819944800 MAIL ADDRESS: STREET 1: 16 NEW ENGLAND EXECUTIVE PARK STREET 2: SUITE 200 CITY: BURLINGTON STATE: MA ZIP: 01803 FORMER COMPANY: FORMER CONFORMED NAME: BOYLE LEASING TECHNOLOGIES INC DATE OF NAME CHANGE: 19980605 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MF Merger Sub Corp. CENTRAL INDEX KEY: 0001627877 IRS NUMBER: 472479459 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-T/A BUSINESS ADDRESS: STREET 1: C/O FORTRESS INVESTMENT GROUP STREET 2: 1345 AVENUE OF THE AMERICAS, FL 46 CITY: NEW YORK STATE: NY ZIP: 10105 BUSINESS PHONE: 212-798-6100 MAIL ADDRESS: STREET 1: C/O FORTRESS INVESTMENT GROUP STREET 2: 1345 AVENUE OF THE AMERICAS, FL 46 CITY: NEW YORK STATE: NY ZIP: 10105 SC TO-T/A 1 a14-26332_9sctota.htm SC TO-T

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE TO

(Rule 14d-100)

TENDER OFFER STATEMENT UNDER SECTION 14(d)(1)

OR SECTION 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No. 1)

MICROFINANCIAL INCORPORATED

(Names of Subject Company (Issuer))

MF MERGER SUB CORP.

(Name of Filing Persons (Offeror)) a wholly owned subsidiary of

MF PARENT LP

(Name of Filing Persons (Parent of Offeror))

MF INVESTOR GP LLC

FORTRESS CREDIT ADVISORS LLC

(Names of Filing Persons (Other Person))

COMMON STOCK, $0.01 PAR VALUE PER SHARE

(Title of Class of Securities)

595072109

(CUSIP Number of Class of Securities)

MF Merger Sub Corp.

c/o Fortress Investment Group

1345 Avenue of the Americas

46th Floor

New York, New York 10105

Attention: Constantine M. Dakolias

Telephone: (212) 798-6100

(Name, address and telephone number of person authorized to receive notices and communications on behalf of filing persons)

With a copy to:

David E. Zeltner

Milbank, Tweed, Hadley & McCloy LLP

One Chase Manhattan Plaza

New York, New York 10005

Telephone: (212) 530-5000

CALCULATION OF FILING FEE

Transaction Value*		Amount of Filing Fee**
$151,880,649.76		$17,649

* Estimated for purposes of calculating the filing fee only. The transaction valuation was calculated by adding the sum of (i) 14,433,154 shares of common stock, par value $0.01 per share (the “Shares”), of MicroFinancial Corporation (“MicroFinancial”) outstanding multiplied by the offer price of $10.20 per share, (ii) 130,239 Shares subject to outstanding restricted stock units, which reflects the maximum number of restricted stock units that may be outstanding at the time the offer is completed, multiplied by the offer price of $10.20 per share, (iii) 433,028 Shares issuable pursuant to outstanding options multiplied by the offer price of $10.20 per share less the weighted average exercise price for such options of $3.723 per share and (iv) 51,894 Shares (including Shares issuable pursuant to restricted stock units) to be issued to directors and certain members of management of MicroFinancial following December 13, 2014, multiplied by the offer price of $10.20 per share. The calculation of the filing fee is based on information provided by MicroFinancial as of December 12, 2014 (with respect to the number of Shares of common stock, restricted stock units and options) and September 30, 2014 (with respect to the exercise price of such options).

** The filing fee was calculated in accordance with Rule 0-11 under the Securities Exchange Act of 1934, as amended, and Fee Rate Advisory No. 1 for Fiscal Year 2015, issued August 29, 2014, by multiplying the Transaction Valuation by 0.0001162.

x Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount Previously Paid:	$17,649		Filing Party:	MF Merger Sub Corp.
Form or Registration No.:	Schedule TO		Date Filed:	December 19, 2014

¨ Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

x third-party tender offer subject to Rule 14d-1.

o issuer tender offer subject to Rule 13e-4.

¨ going-private transaction subject to Rule 13e-3.

¨ amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results of the tender offer:o

This Amendment No. 1 (this “Amendment”) amends and supplements the Tender Offer Statement on Schedule TO filed by MF Merger Sub Corp., a Massachusetts corporation (the “Offeror”), MF Parent LP, a Delaware limited partnership (“Parent”), MF Investor GP LLC, a Delaware limited liability company and Fortress Credit Advisors LLC, a Delaware limited liability company and an affiliate of Fortress Investment Group LLC, a Delaware limited liability company (“FIG”), with the Securities and Exchange Commission on December 19, 2014 (together with any subsequent amendments and supplements thereto, the “Schedule TO”). The Schedule TO relates to the offer by the Offeror for all of the outstanding shares of common stock, par value $0.01 per share (the “Common Stock” or the “Shares”) of MicroFinancial Incorporated (the “Company”) at a price of $10.20 per share net to the seller in cash without interest and less any applicable withholding taxes upon the terms and conditions set forth in the offer to purchase dated December 19, 2014 (the “Offer to Purchase”), a copy of which was filed with the Schedule TO as Exhibit (a)(1)(A), and in the related letter of transmittal (the “Letter of Transmittal”) which, together with any amendments or supplements, collectively constitute the “Offer.”

The information in the Offer to Purchase and the related Letter of Transmittal, including all schedules thereto, is incorporated herein by reference to all of the applicable items in the Schedule TO, except that such information is hereby amended and supplemented to the extent specifically provided herein. Capitalized terms used and not otherwise defined in this Amendment shall have the meanings assigned to such terms in the Schedule TO and the Offer to Purchase.

This Amendment is being filed to amend and supplement Items 11 and 12 as reflected below.

ITEM 11. ADDITIONAL INFORMATION.

Item 11 of the Schedule TO is hereby amended and supplemented as follows:

The information set forth in Section 11 — “The Merger Agreement and Other Agreements” of the Offer to Purchase is hereby amended and supplemented by adding the following sentence immediately after the final sentence of the last paragraph of the sub-section captioned “Company Conduct of Business Covenants”:

On January 2, 2015, the Company Board declared the Dividend of $0.08 per Share, payable on January 15, 2015 to holders of record of Shares at the close of business on January 12, 2015. Holders of Shares as of the record date will be entitled to receive the Dividend on Shares that are tendered in the Offer, whether tendered before or after the record date. The foregoing description is qualified in its entirety by reference to the Press Release issued by the Company on January 2, 2015 regarding the declaration of the Dividend, a copy of which is filed as Exhibit (a)(1)(H) to the Schedule TO, and is incorporated by reference herein.

The information set forth in Section 15 — “Certain Legal Matters; Regulatory Approvals” of the Offer to Purchase is hereby amended and supplemented by adding the following immediately after the final paragraph:

Litigation. On December 19, 2014, a purported shareholder of the Company filed a putative class action lawsuit in the Delaware Court of Chancery, captioned as Michael Zumbluskas v. MicroFinancial Inc., et al., Case No. 10479. That action was dismissed by the plaintiffs on or about December 22, 2014, and refiled in the Business Litigation Session of the Superior Court of Suffolk County, Massachusetts, captioned as Michael Zumbluskas v. MicroFinancial, Inc., et al., Civil Action No. 14-4026 (the “Zumbluskas Complaint”). In addition to the Company, the Zumbluskas Complaint names the individual members of the Company Board, Parent, the Offeror and FIG as defendants. The Zumbluskas Complaint purports to be brought individually and on behalf of similarly situated public shareholders of the Company and alleges claims for breaches of fiduciary duties against the Company Board in connection with the Transactions and that Parent, the Offeror, and FIG aided and abetted the purported breaches of fiduciary duties. The Zumbluskas Complaint seeks, among other things, certification of the putative class, certain forms of injunctive relief (including enjoining the consummation of the Transactions or any initiation or continuance of defensive measures that would inhibit a “market check” of the value of the Company), disclosure by the Company Board of all material information relating to the Transactions, rescission of the Transactions or the award of damages, in each case to the extent the Transactions are consummated, unspecified compensatory damages (including pre-judgment and post-judgment interest thereon), the costs and disbursements of the Zumbluskas Complaint, including reasonable attorneys’ and experts’ fees, and other relief that the court may deem just and

proper. Parent and the Offeror believe that the Zumbluskas Complaint is without merit and intend to defend vigorously against all claims asserted.

The foregoing description is qualified in its entirety by reference to the Zumbluskas Complaint, a copy of which is filed as Exhibit (a)(5)(A) to the Schedule TO, and is incorporated by reference herein.

On December 24, 2014, a second putative class action challenging the Transactions was filed by a purported shareholder of the Company. This action was filed in the Business Litigation Session of the Superior Court of Suffolk County, Massachusetts, and is captioned as Andrew James Dehn v. MicroFinancial Inc., et al., Civil Action No. 14-4042 (the “Dehn Complaint”). In addition to the Company, the Dehn Complaint names the individual members of the Company Board, Parent, the Offeror and FIG as defendants. The Dehn Complaint purports to be brought individually and on behalf of similarly situated public shareholders of the Company and alleges claims for breaches of fiduciary duties against the Company Board in connection with the Transactions and that Parent, the Offeror, and FIG aided and abetted the purported breaches of fiduciary duties. The Dehn Complaint seeks, among other things, certification of the putative class, preliminary and permanent relief, including injunctive relief enjoining the consummation of the Transactions, rescission of the Transactions and/or the award of actual and punitive damages (with pre-judgment and post-judgment interest), in each case to the extent the Transactions are consummated prior to the entry of a final judgment, an accounting for damages caused by the defendants and for all profits and any special benefits obtained by the defendants as a result of their alleged breaches of their fiduciary duties, the costs of the Dehn Complaint, including reasonable attorneys’ and experts’ fees and expenses, and other relief that the court may deem just and proper. Parent and the Offeror believe that the Dehn Complaint is without merit and intend to defend vigorously against all claims asserted.

The foregoing description is qualified in its entirety by reference to the Dehn Complaint, a copy of which is filed as Exhibit (a) (5) (B) to the Schedule TO, and is incorporated by reference herein.

ITEM 12. EXHIBITS

Item 12 of the Schedule TO is hereby amended and supplemented by adding the following exhibits:

(a)(1)(H)		Press Release issued by the Company on January 2, 2015 regarding the declaration of the quarterly cash dividend.

(a)(5)(A)		Complaint filed by Michael Zumbluskas, on behalf of himself and others similarly situated, on December 23, 2014, in the Superior Court of Suffolk County, Massachusetts.

(a)(5)(B)		Complaint filed by Andrew James Dehn, on behalf of himself and others similarly situated, on December 24, 2014, in the Superior Court of Suffolk County, Massachusetts.

SIGNATURES

After due inquiry and to the best of their knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: January 5, 2015

		MF Merger Sub Corp.


	By:	/s/ David E. King
		Name: David E. King
		Title: Director

		MF Parent LP

	By:	MF Investor GP LLC

	By:	/s/ David E. King
		Name: David E. King
		Title: Director

		MF Investor GP LLC


	By:	/s/ David E. King
		Name: David E. King
		Title: Director

		Fortress Credit Advisors LLC


	By:	/s/ Constantine M. Dakolias
		Name: Constantine M. Dakolias
		Title: President

EXHIBIT INDEX

Exhibit No.		Description

(a)(1)(A)		Offer to Purchase, dated December 19, 2014.*

(a)(1)(B)		Letter of Transmittal.*

(a)(1)(C)		Notice of Guaranteed Delivery.*

(a)(1)(D)		Letter from the Information Agent to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.*

(a)(1)(E)		Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.*

(a)(1)(F)		Press Release issued by the Company on December 15, 2014 (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by MicroFinancial Incorporated on December 16, 2014).*

(a)(1)(G)		Summary Advertisement to be published in the New York Times and dated December 19, 2014.*

(a)(1)(H)		Press Release issued by the Company on January 2, 2015 regarding the declaration of the quarterly cash dividend.

(a)(5)(A)		Complaint filed by Michael Zumbluskas, on behalf of himself and others similarly situated, on December 23, 2014, in the Superior Court of Suffolk County, Massachusetts.

(a)(5)(B)		Complaint filed by Andrew James Dehn, on behalf of himself and others similarly situated, on December 24, 2014, in the Superior Court of Suffolk County, Massachusetts.

(b)(1)		Bridge Loan Agreement, dated as of December 13, 2014, by and between Santander Bank, N.A., as Lender, and MF Merger Sub Corp., as Borrower.*

(b)(2)		Credit Agreement, dated as of December 13, 2014, by and among Santander Bank, N.A., as Agent, the Lenders party thereto, MF2 Holdings LLC and TimePayment Corp. (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K/A filed by MicroFinancial Incorporated on December 18, 2014).*

(b)(3)		Third Amended and Restated Credit Agreement, dated as of December 13, 2014, by and among Santander Bank, N.A., as Agent, the Lenders party thereto, MF2 Holdings LLC and TimePayment Corp. (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K/A filed by MicroFinancial Incorporated on December 18, 2014).*

(b)(4)		Escrow Agreement, dated as of December 13, 2014, by and among Santander Bank, N.A., MF2 Holdings LLC, TimePayment Corp. and BNY Mellon, N.A. (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K/A filed by MicroFinancial Incorporated on December 18, 2014).*

(d)(1)		Agreement and Plan of Merger, dated as of December 13, 2014, by and among MF Merger Sub Corp., MF Parent LP and MicroFinancial Incorporated (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by MicroFinancial Incorporated on December 16, 2014).*

(d)(2)		Commitment Letter, dated as of December 13, 2014, delivered by Fortress Credit Opportunities Fund III (A) LP, Fortress Credit Opportunities Fund III (B) LP, Fortress Credit Opportunities Fund III (C) L.P., Fortress Credit Opportunities Fund III (D) L.P. and Fortress Credit Opportunities Fund III (E) LP to MF Parent LP.*

(d)(3)		Tender and Support Agreement, dated as of December 13, 2014, by and among MF Parent LP, MF Merger Sub Corp., Torrence C. Harder, Torrence C. Harder Revocable Trust of 2006, Ashley J. Harder 2000 Irrevocable Trust, Lauren E. Harder 2001 Irrevocable Trust, Entrepreneurial Ventures, Inc., Harder Family 2011 LLC, Brian E. Boyle, Peter R. Bleyleben, Peter R Bleyleben Revocable Trust, Fritz von Mering and Alan Zakon.*

(d)(4)		Contribution, Non-Tender and Support Agreement, dated as of December 13, 2014, by and among MF Parent LP, Richard F. Latour, James R. Jackson, Jr. and Steven J. LaCreta.*

(d)(5)		Amended and Restated Employment Agreement by and between MicroFinancial Incorporated and Richard F. Latour, dated December 13, 2014 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by MicroFinancial Incorporated on December 16, 2014).*

(d)(6)		Amended and Restated Employment Agreement by and between MicroFinancial Incorporated and James R. Jackson, Jr., dated December 13, 2014 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by MicroFinancial Incorporated on December 16, 2014).*

(d)(7)		Amended and Restated Employment Agreement by and between MicroFinancial Incorporated and Steven J. LaCreta, dated December 13, 2014 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by MicroFinancial Incorporated on December 16, 2014).*

(d)(8)		Letter Agreement between MicroFinancial Incorporated and Fortress Investment Group LLC, dated July 25, 2014.*

(g)		None.

(h)		None.

* Previously filed with the Tender Offer Statement on Schedule TO filed with the Securities and Exchange Commission on December 19, 2014.

EX-99.(A)(1)(H) 2 a14-26332_9ex99da1h.htm EX-99.(A)(1)(H)

Exhibit (a)(1)(H)

Release January 2, 2015		Contact:
For Immediate Release		Richard Latour CEO
		Tel: 781-994-4800

- MicroFinancial Incorporated Announces Cash Dividend -

Burlington, MA— January 2, 2015 — MicroFinancial Incorporated (Nasdaq: MFI) announced today that its Board of Directors declared a cash dividend of $0.08 per common share payable on January 15, 2015, to holders of record of MFI common stock at the close of business on January 12, 2015 (the “record date”).

The pending tender offer for shares of MFI common stock by affiliates of Fortress Investment Group LLC will not affect shareholders’ right to receive the dividend. Tendered shares will not be accepted before January 21, 2015, so holders of shares as of the record date will be entitled to receive the dividend on shares that are tendered in the tender offer, whether tendered before or after the record date.

Additional Information and Where to Find It

This press release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any shares of MFI’s common stock. The solicitation and the offer to buy shares of MFI’s common stock is being made pursuant to an offer to purchase and related materials that affiliates of Fortress Investment Group LLC have filed with the Securities and Exchange Commission. Affiliates of Fortress Investment Group LLC have also filed a tender offer statement on Schedule TO, as amended, with the Securities and Exchange Commission in connection with the commencement of the offer, and MFI has filed a solicitation/recommendation statement on Schedule 14D-9, as amended, with respect to the offer. The tender offer statement (including an offer to purchase, a related letter of transmittal and other offer documents) and the solicitation/recommendation statement contain important information that should be read carefully and considered before any decision is made with respect to the tender offer. These materials (and all other materials filed by the affiliates of Fortress Investment Group LLC or MFI with the Securities and Exchange Commission) are available free of charge at the website of the Securities and Exchange Commission at www.sec.gov or from MacKenzie Partners, Inc., the Information Agent for the tender offer, at (800) 322-2885.

About MicroFinancial

MicroFinancial Inc. (Nasdaq:MFI), is a financial intermediary specializing in microticket leasing and financing. MicroFinancial has been operating since 1986, and is headquartered in Burlington, Massachusetts.

Statements in this release that are not historical facts are forward-looking statements. The Company cautions that a number of important factors could cause actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. Readers should not place undue reliance on forward-looking statements, which reflect the management’s view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. For a more complete description of the prominent risks and uncertainties inherent in the Company’s business or with respect to the tender offer, see the risk factors described in documents the Company files from time to time with the Securities and Exchange Commission.

EX-99.(A)(5)(A) 3 a14-26332_9ex99da5a.htm EX-99.(A)(5)(A)

Exhibit (a)(5)(A)

COMMONWEALTH OF MASSACHUSETTS

SUFFOLK COUNTY, SS.			SUPERIOR COURT DEPARTMENT OF THE TRIAL COURT
MICHAEL ZUMBLUSKAS, Individually		)
and on Behalf of All Others Similarly		)
Situated,		)
		)	Civil Action No. 14-4026 BLS
	Plaintiff,	)
		)
v.		)	JURY TRIAL DEMANDED
		)
MICROFINANCIAL, INC., PETER R.		)
BLEYLEBEN, BRIAN E. BOYLE,		)
TORRENCE C. HARDER, RICHARD F.		)
LATOUR, FRITZ von MERING, ALAN J.		)
ZAKON, MF PARENT LP, MF MERGER		)
SUB CORP. AND FORTRESS		)
INVESTMENT GROUP LLC,		)
		)
Defendants.

CLASS ACTION COMPLAINT

The allegations of the Complaint are based on the personal knowledge of Plaintiff Michael Zumbluskas (“Plaintiff”) as to himself and on information and belief (including the investigation of counsel and review of publicly available information) as to all other matters stated herein, as follows:

NATURE OF THE ACTION

1. This is a shareholder class action brought by Plaintiff on behalf of himself and all other similarly situated public shareholders of MicroFinancial Inc. (“MicroFinancial” or the “Company”) against MicroFinancial’s Board of Directors (“Board” or “Individual Defendants”) for breaches of fiduciary duty arising from their attempt to sell the Company to affiliates of Fortress Investment Group LLC (“Fortress” and collectively with affiliates, the “Acquisition Defendants”) in a cash-out tender offer of $10.20 per share (the “Proposed Transaction”)

pursuant to an Agreement and Plan of Merger, dated December 13, 2014 (the “Merger Agreement”).

2. The total equity value of the Proposed Transaction is approximately $147 million. The MicroFinancial Board has unanimously recommended the approval of the Merger Agreement and the Proposed Transaction. The Defendants expect to complete the Proposed Transaction during the first quarter of 2015.

3. As detailed herein, the Proposed Transaction undervalues MicroFinancial and deprives Plaintiff and the other public shareholders of the true value of their holdings in the Company and the right to participate in its future growth and profitability.

4. Indeed, the Proposed Transaction offers unfair and inadequate consideration that does not maximize stockholder value and is being advanced through an unfair process. The Board members have therefore breached their fiduciary duties owed to Plaintiff and a “Class” of similarly situated shareholders by failing to take all necessary steps to ensure that the Company’s public investors will receive the maximum realizable value for their shares of the Company.

5. In addition, the Merger Agreement contains preclusive deal protection devices that do not benefit the Company or its stockholders, but instead, Fortress. For example, pursuant to the Merger Agreement, the Board is prohibited from soliciting competing bids for the Company. Moreover, the Company is subject to a $6.5 million dollar termination fee payable to Fortress if the Proposed Transaction is terminated by the Company in favor of a superior proposal, while the Board must provide Fortress with any and all material terms and conditions of such offer within 48 hours after receipt. Fortress is then given three business days to subsequently change the terms of the Merger Agreement to match the alternative offer.

6. These deal protection provisions essentially “lock-up” the Proposed Transaction and prevent the Board from fulfilling its fiduciary duties to the Company’s public stockholders. The Proposed Transaction will deprive shareholders of adequate consideration in light of the Company’s promising prospects for growth, increased sales, and future profitability. More importantly, the Defendants intend to commence the tender offer on or before December 19, 2014, and the tender offer will expire as soon as 20 business days after commencement. Non-tendering shareholders may be cashed-out without having been given an opportunity to vote on the Proposed Transaction.

7. Moreover, the Proposed Transaction unfairly benefits the Independent Defendants, along with other top executives of MicroFinancial, as the Proposed Transaction will provide them with lavish change of control payments and stock sales. The Director Defendants have a fiduciary duty to act in the best interest of all of MicroFinancial’s shareholders - treating the shareholders’ interests with the same care and dedication as they would their own. They cannot cater exclusively to their own interests to the detriment of the entire class of stockholders or accept a bid merely because of its convenience.

8. Plaintiff seeks preliminary and permanent injunctive relief preventing the Individual Defendants, who are aided and abetted by the Acquisition Defendants, from inequitably and unlawfully depriving Plaintiff and the Class of their rights to realize full and fair value for their MicroFinancial stock, and to compel the Individual Defendants to carry out their fiduciary duties to maximize shareholder value on a sale of the Company. In the event that the Proposed Transaction is consummated, Plaintiff seeks to recover monetary damages from Defendants for their breaches of fiduciary duties or their aiding and abetting of such breaches.

JURISDICTION AND VENUE

9. Jurisdiction is proper under Mass. Gen. Laws Ch. 223A Section 2 because MicroFinancial maintains its headquarters in Burlington, Massachusetts and transacts business in the Commonwealth of Massachusetts. Through their service to MicroFinancial, the Individual Defendants (defined below) have transacted business in the Commonwealth of Massachusetts and under Mass. Gen. Laws Ch. 223A Section 2 jurisdiction is proper. The amount in controversy exceeds $25,000.

10. Moreover, pursuant to Superior Court Administrative Directive No. 09-1, Plaintiff is seeking admission into the Business Litigation Session of the Massachusetts Superior Court based on the fact that the litigation involves the merger of a corporation and the liability of certain officers and directors of that corporation.

11. Venue is proper pursuant to Mass. Gen. Laws Ch. 223 Sections 1, 8.

THE PARTIES

12. Plaintiff has owned the common stock of MicroFinancial since prior to the announcement of the Proposed Transaction herein complained of, and continues to own this stock.

13. MicroFinancial is a corporation organized and existing under the laws of the Commonwealth of Massachusetts with its principal executive offices located in Burlington, Massachusetts. MicroFinancial primarily operates through its wholly owned subsidiaries, TimePayment Corp. (“TimePayment”) and LeaseComm Corporation (“LeaseComm”). The Company’s common stock is traded on the NASDAQ Stock Exchange under the symbol “MFI.”

14. Defendant Peter R. Bleyleben (“Bleyleben”) is a director of the Company. He was the Non-Executive Chairman of the Board of Directors of the Company from 2002

through 2012. He served as first President and later Chairman, Chief Executive Officer and director of the Company or its predecessor from 1987 until 2002.

15. Defendant Brian E. Boyle (“Boyle”) is a director of the Company. He served as Chief Executive Officer of the Company from 1985 to 1987 and Chairman of the Board from 1985 to 1995.

16. Defendant Torrence C. Harder (“Harder”) is a director of the Company.

17. Defendant Richard F. Latour (“Latour”) is a director of the Company. He has served as President, Chief Executive Officer, Treasurer, Clerk and Secretary of the Company since October 2002, and as President, Chief Operating Officer, Chief Financial Officer, Treasurer, Clerk and Secretary, as well as a director of the Company since February 2002.

18. Defendant Fritz von Mering (“von Mering”) is a director of the Company. He has served as Non-Executive Chairman of the Board since 2012.

19. Defendant Alan J. Zakon (“Zakon”) is a director of the Company.

20. Defendants Bleyleben, Boyle, Harder, Latour, von Mering, and Zakon are collectively referred to herein as the “Individual Defendants.”

21. Defendant Fortress is an alternative asset manager. Fortress raises, invests and manages private equity funds, hedge funds and publicly traded alternative investment vehicles. Fortress is a corporation organized and existing under the laws of the State of Delaware with its principal executive offices located in New York, New York.

22. Defendant MF Parent LP (“MF Parent”) is a Delaware limited partnership, and an affiliate of Fortress.

23. Defendant Merger Sub Corp. (“Merger Sub”) is a direct wholly owned subsidiary of MF Parent LP, and is a corporation duly organized for the purposes of facilitating the

Proposed Transaction under the laws of the Commonwealth of Massachusetts; along with being an affiliate of Fortress.

24. Defendants Fortress, MF Parent and Merger Sub are collectively referred to herein as the “Acquisition Defendants.”

25. MicroFinancial, the Individual Defendants and the Acquisition Defendants are collectively referred to herein as the “Defendants.”

INDIVIDUAL DEFENDANTS’ FIDUCIARY DUTIES

26. The Individual Defendants, as officers and/or directors of the Company, stand in a fiduciary relationship to Plaintiff and the Company’s other public stockholders and owes them the highest fiduciary obligations of good faith, due care and loyalty.

27. Under Massachusetts law, the directors and officers of a publicly traded corporation have fiduciary duties of loyalty, good faith, and due care to stockholders. To diligently comply with their fiduciary duties, the Individual Defendants may not take any action that:

(a) adversely affects the value provided to the Company’s stockholders;

(b) favors themselves or will discourage or inhibit alternative offers to purchase control of the Company or its assets;

(c) adversely affects their duty to search for and secure the best value reasonably available under the circumstances for the Company’s stockholders; and/or

(d) will provide the Individual Defendants with preferential treatment at the expense of, or separate from, the public stockholders.

28. In accordance with their duties of loyalty and good faith, the Individual Defendants are obligated to refrain from:

(a) participating in any transaction where the Individual Defendants’ loyalties are divided;

(b) participating in any transaction where the Individual Defendants receive, or are entitled to receive, a personal financial benefit not equally shared by the public stockholders of the Company; and/or

29. Plaintiff alleges herein that the Individual Defendants, separately and together, in connection with the Proposed Transaction, are knowingly and/or recklessly violating their fiduciary duties, including their duties of care, loyalty, and good faith owed to Plaintiff and other public stockholders of MicroFinancial.

CLASS ACTION ALLEGATIONS

30. Plaintiff brings this action as a class action, pursuant to Massachusetts Civil Procedure Rule 23, on behalf of all holders of the common stock of the Company (except the Defendants herein and any person, firm, trust, corporation, or other entity related to or affiliated with any of the Defendants) and their successors in interest, who are or will be threatened with injury arising from Defendants’ actions as more fully described herein (the “Class”).

31. This action is properly maintainable as a class action.

32. The Class is so numerous that joinder of all members is impracticable. As of November 7, 2014, there were an aggregate of 14,433,154 shares of MicroFinancial common stock outstanding, owned by hundreds, if not thousands, of stockholders.

33. There are questions of law and fact, which are common to the Class including, inter alia, the following: (a) whether the Individual Defendants have breached the fiduciary duties owed by them to Plaintiff and the members of the Class; and (b) whether the Class is entitled to injunctive relief or damages as a result of the wrongful conduct committed by Defendants, as alleged herein.

34. Plaintiff is committed to prosecuting this action and has retained competent counsel experienced in litigation of this nature. The claims of the Plaintiff are typical of the claims of other members of the Class, and Plaintiff has the same interests as the other members of the Class. Plaintiff will fairly and adequately represent the Class.

35. Defendants have acted in a manner that affects Plaintiff and all members of the Class alike, thereby making appropriate injunctive relief and/or corresponding declaratory relief with respect to the Class as a whole.

36. The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the Class, which would establish incompatible standards of conduct for Defendants, or adjudications with respect to individual members of the Class which would, as a practical matter, be dispositive of the interests of other members or substantially impair or impede their ability to protect their interests.

SUBSTANTIVE ALLEGATIONS

Background

37. MicroFinancial is a financial intermediary specializing in microticket and financing and has been operating since 1986. More specifically, MicroFinancial, through its subsidiaries, TimePayment and LeaseComm, provides leasing and financing services through

vendors to small businesses. Among other things, these affiliates lease and rent commercial equipment — automated teller machines, espresso machines, credit card terminals, computers, vending machines, water purification equipment, wireless communications devices, and more.

38. The Company’s services are provided through a network of independent vendors; these equipment vendors submit their clients financing applications to MicroFinancial via the Internet, telephone, fax, or e-mail.

The Proposed Transaction

39. On December 15, 2014, MicroFinancial and Fortress announced that they had entered into the Merger Agreement. Pursuant to the terms in the Merger Agreement, MicroFinancial would be sold to Merger Sub, a subsidiary of MF Parent, each an affiliate of funds managed by affiliates of Fortress. The Company would survive the Proposed Transaction as an indirect, wholly-owned subsidiary of Fortress. As explained in the December 15, 2014 announcement:

MicroFinancial Incorporated Enters Into Agreement to be Acquired by Funds Managed by Fortress Investment Group

BURLINGTON, Mass., Dec. 15, 2014 (GLOBE NEWSWIRE) — MicroFinancial Incorporated (Nasdaq:MFI) (“MicroFinancial” or the “Company”) has entered into a definitive agreement with MF Parent LP (“Parent”) and MF Merger Sub Corp. (“Purchaser”), each an affiliate of funds managed by affiliates of Fortress Investment Group LLC (NYSE:FIG), whereby Parent will acquire all of the outstanding shares of the Company for $10.20 per share in cash pursuant to an Agreement and Plan of Merger dated December 13, 2014 (the “Merger Agreement”).

Under the terms of the Merger Agreement, Purchaser will commence a tender offer for all shares of outstanding common stock of the Company for $10.20 per share in cash (the “Tender Offer”). The Tender Offer will expire on the 20th business day following and including the commencement date, unless extended in accordance with the terms of the Merger Agreement and the applicable rules and regulations of the Securities and Exchange Commission. The Company presently intends, subject to approval of the Company’s Board of Directors at the time, to declare a single quarterly cash dividend on its common stock in an amount expected to be $0.08 per share with a record date that is no later than January 12, 2015 and a payment date that is on or prior to the time of acceptance of shares of the Company’s common stock in the Tender Offer. Following

the completion of the Tender Offer, the parties will complete a second-step merger in which any remaining shares of the Company’s common stock will be converted into the right to receive the same price per share paid in the Tender Offer (the “Merger”).

The announcement follows a comprehensive review undertaken by the Company’s Board of Directors to maximize shareholder value. The Company’s Board of Directors unanimously approved the Merger Agreement and unanimously recommends that the Company’s shareholders tender their shares in the Tender Offer.

Richard F. Latour, the Chief Executive Officer of MicroFinancial, said “We believe that the share price of $10.20 per share represents a compelling value for our shareholders. This price represents a significant premium over the current trading price and our book value.”

The closing of the Tender Offer is subject to certain conditions, including the tender of a number of MicroFinancial shares that, together with other shares owned or to be acquired by Purchaser, represent at least two thirds of the total number of MicroFinancial’s outstanding shares on a fully diluted basis, and other customary conditions. There is no financing condition to the obligations to consummate the transaction.

40. Under the terms of the Merger Agreement, MicroFinancial stockholders will receive for each outstanding share of MicroFinancial common stock owned $10.20 in cash. According to the Defendants, the Proposed Transaction is currently expected to be completed in the first quarter of 2015. Once the Proposed Transaction is completed, MicroFinancial will become a part of Fortress, will cease to exist and will no longer be openly traded on the NASDAQ.

The Offer is Inadequate and Unfair

41. By all objective measures, MicroFinancial was a growing company prior to the announcement of the Proposed Transaction, and was poised for future growth and profitability as a stand-alone entity.

42. On January 29, 2014, the Company announced its financial results for the fourth quarter and the year ended December 31, 2013. Net income for the fourth quarter of 2013 increased to $2.5 million or $0.17 per diluted share as compared to $2.4 million or $0.16 per diluted share for the fourth quarter of 2012. Revenue in the fourth quarter of 2013 increased

by 3% to $15.8 million compared to $15.3 million in the fourth quarter of 2012. For the year ended December 31, 2013, net income increased 4.4% to $9.8 million versus net income of $9.4 million for the prior year. Revenue for the year ended December 31, 2013 increased 5.4% to $62.5 million compared to $59.3 million during 2012. The Company also announced that it was increasing its dividend payout to $0.25 per share in 2013 versus $0.24 per share in 2012. Commenting upon these results, Defendant Latour stated that “We are very pleased with our operating results for 2013.”

43. On April 15, 2014, BMO Capital rated MicroFinancial as a new market “perform” with a price target of $16 per share.

44. On April 16, 2014, MicroFinancial announced financial results for the first quarter ended March 31, 2014. Revenue for the quarter ended March 31, 2014 increased 2.6% to $15.7 million compared to $15.3 million in the first quarter of 2013. Commenting upon these results, Defendant Latour stated that “We are pleased with our overall financial performance for the quarter. Through the first three months of 2014, we are starting to see the improvements from the changes we made to our sales force structure at the end of 2013.”

45. On July 16, 2014, MicroFinancial announced financial results for the second quarter ended June 30, 2014. Net income for the quarter ended June 30, 2014 was $2.5 million or $0.17 per diluted share, which was equivalent to the $2.5 million of net income in the second quarter of 2013 or $0.17 per diluted share. However, the Company beat consensus analysts by $0.02 per share. Revenue for the second quarter increased to $15.8 million compared to $15.7 million for the same period in 2013. Commenting upon these results, Defendant Latour stated that “We are very pleased with our overall performance through the first six months

of 2014. During this period, we have continued to see an increased demand for the products and services we offer.”

46. On October 15, 2014, MicroFinancial announced financial results for the third quarter ended September 30, 2014. Net income for the quarter ended September 30, 2014 was $2.9 million or $0.20 per diluted share, compared to net income of $2.6 million or $0.18 per dilute share for the same period last year. Revenue for the third quarter increased 3.1% to $16.2 million compared to $15.7 million for the same period in 2013. Commenting upon these results. Defendant Latour stated that “We are very pleased with our overall performance through the first six months of 2014. During this period, we have continued to see an increased demand for the products and services we offer.”

47. Just as the Company’s successful sales force structure was taking hold, and as it was positioned for future growth, the Company announced its entry into the Proposed Transaction.

48. The $10.20 per share agreed to in the Proposed Transaction is an inadequate price, and Defendants’ claims that the transaction provides a great return for investors are false. The $10.20 per share price is considerably below analyst’s target price of $16 per share.

Preclusive Deal Protection Devices

49. As part of the Merger Agreement, Defendants agreed to certain onerous and preclusive deal protection devices that operate conjunctively to make the Proposed Transaction unfair and ensure that no competing offers will emerge for the Company.

50. By way of example, §7.2 of the Merger Agreement includes a “No Solicitation” provision barring the Company from soliciting interest from other potential acquirers in order to procure a price in excess of the amount offered by Fortress.

51. Pursuant to § 7.2 of the Merger Agreement, should an unsolicited bidder submit a bona fide proposal that is more favorable than the Proposed Merger terms (“Superior Proposal”), the Company must notify Fortress, within 48 hours, of the bidder’s identity and the material terms of the bidder’s offer.

52. Under §7.2 of the Merger Agreement, should the Board determine that the unsolicited offer is a Superior Proposal, then, before the Board can change its recommendation to stockholders regarding the Proposed Transaction with Fortress, it must grant Fortress three business days in which the Company must negotiate in good faith with Fortress (if Fortress so desires) and allow Fortress to amend the terms of the Merger Agreement so that the Superior Proposal ceases to be a Superior Proposal and the Board is not obligated to change its recommendations to stockholders regarding the Proposed Transaction with Fortress. In other words, the Merger Agreement gives Fortress access to any rival bidder’s information and allows Fortress a free right to top any superior offer simply by matching it. Accordingly, no rival bidder is likely to emerge and act as a “stalking horse” because the Merger Agreement unfairly assures that any “auction” will favor Fortress and piggy-back upon the due diligence of the foreclosed second bidder.

53. Section 9.2 of the Merger Agreement also provides for a termination fee of $6.5 million payable to Fortress by MicroFinancial if the Company decides to pursue the competing offer, thereby essentially requiring that the competing bidder agree to pay a naked premium for the right to provide the Company’s public stockholders with a superior offer.

54. Any unsolicited competing bidder would have to incur the great expense of conducting due diligence and formulating a proposal within a very limited time frame, and yet, pursuant to the Merger Agreement, Fortress would have an opportunity to simply match it.

Further, a competing bidder will need to negotiate with the person or persons at MicroFinancial in charge of the Proposed Transaction and already heavily biased in favor of approving the Proposed Transaction. Even if another bidder is tenacious enough to navigate this obstacle course, that bidder will be further discouraged by having to pay the onerous termination fee to the Company (and by extension, the “successful” competing bidder) will be forced to pay.

55. In the process of considering and ultimately entering into the Merger Agreement with Fortress, the Individual Defendants have initiated a process to sell the Company which imposes heightened fiduciary responsibilities and requires enhanced scrutiny by the Court. However, the process initiated by the Board fails woefully short of the Board satisfying their fiduciary duty to maximize stockholder value. Additionally, as discussed supra, the deal protections agreed to by the Board further ensures that no likely bidder will emerge to salvage the Board from satisfying its fiduciary duties.

56. Ultimately, these preclusive deal protection provisions illegally restrain the Company’s ability to solicit or engage in negotiations with any third party regarding a proposal to acquire all or a significant interest in the Company. The circumstances under which the Board may respond to an unsolicited written bona fide proposal for an alternative acquisition that constitutes, or would reasonably be expected to constitute, a Superior Proposal are too narrowly circumscribed to provide a true or effective “fiduciary out” under the circumstances.

57. The Individual Defendants have violated their fiduciary duties owed to the public shareholders of MicroFinancial. The Individual Defendants’ agreement to the terms of the Proposed Transaction and its timing demonstrate a clear lack of due care and loyalty to the MicroFinancial public stockholders.

58. Plaintiff and other members of the Class have been and will be damaged in that they have not and will not receive their fair proportion of the value of MicroFinancial’s assets and business, and they will be prevented from obtaining fair and adequate consideration for their shares of MicroFinancial common stock.

59. Accordingly, the Court should preliminarily enjoin the Proposed Transaction until: (i) the Board conducts a proper process to maximize stockholder value; and (ii) the Individual Defendants disclose all material information to the Company’s public stockholders before the tender offer closes.

FIRST CAUSE OF ACTION

CLAIM FOR BREACH OF FIDUCIARY DUTY
AGAINST THE INDIVIDUAL DEFENDANTS

60. Plaintiff incorporates each and every allegation set forth above as if fully set forth herein.

61. By the acts, transactions and courses of conduct alleged herein, Individual Defendants have violated their fiduciary duties of good faith, loyalty, and due care at the expense of Plaintiff and other members of the Class.

62. As alleged herein, the Individual Defendants have failed to, inter alia:

(a) Adequately consider the Proposed Transaction, including whether it maximizes shareholder value;

(b) Apprise themselves of the true value of the Company, or the benefits associated with pursuing the Proposed Transaction or an alternative transaction, by, among other things, considering the merits of such transactions and engaging in an appropriate market check or canvas of the industry; and

(c) Otherwise take the steps necessary to comply with their fiduciary duties, such as by avoiding conflicts of interest and disclosing all material facts necessary to permit the Company’s public stockholders to make an informed decision with respect to the Proposed Transaction or any alternate transaction.

63. As such, unless the Individual Defendants’ conduct is enjoined by the Court, they will continue to breach their fiduciary duties to Plaintiff and the Company’s other public stockholders, and will further a process that inhibits the maximization of stockholder value and the disclosure of all material information to the Company’s public stockholders.

64. In light of the foregoing, the Individual Defendants must, as their fiduciary obligations require:

(a) Undertake an appropriate evaluation of MicroFinancial’s fair value;

(b) Evaluate the Proposed Transaction and other potential transactions;

(c) Enable public stockholders to consider the Proposed Transaction in a fair and non-coercive manner, without the threat of deal protection measures or mechanisms that could preclude or dissuade a value-maximizing transaction;

(d) Refrain from favoring the Individual Defendants’ interests over those of the Company’s public stockholders, to, among other things, ensure that conflicts of interest do not unfairly influence the stockholders’ decisions or available options; and

(e) Disclose all material facts necessary to permit the Company’s public shareholders to make an informed decision with respect to the Proposed Transaction or any alternate transaction.

65. Absent injunctive relief, Plaintiff and the Class will continue to suffer irreparable harm as result of the Individual Defendants’ breaches of fiduciary duty, for which Plaintiff and the Class have no adequate remedy at law.

SECOND CAUSE OF ACTION

CLAIM AGAINST THE ACQUISITION DEFENDANTS
FOR AIDING AND ABETTING BREACHES OF FIDUCIARY DUTIES

66. Plaintiff incorporates each and every allegation set forth above as if fully set forth herein.

67. The Acquisition Defendants have aided and abetted the Individual Defendants in the aforesaid breach of their fiduciary duties.

68. Such breaches of fiduciary duties could not and would not have occurred but for the conduct of the Acquisition Defendants, who, therefore, have aided and abetted such breaches in connection with the Proposed Transaction.

69. As a result of the unlawful actions of the Acquisition Defendants, Plaintiff and the other members of the Class will be irreparably harmed in that they will not receive the true value for MicroFinancial’s assets and business. Unless the Individual Defendants’ actions of are enjoined by the Court, the Acquisition Defendants will continue to aid and abet the Individual Defendants’ breaches of their fiduciary duties owed to Plaintiff and the members of the Class.

70. As a result of this conduct, Plaintiff and the other members of the Class have been and will be damaged in that they have been and will be prevented from obtaining a fair price for their MicroFinancial shares.

71. Absent injunctive relief, Plaintiff and the Class will continue to suffer irreparable harm as a result of the Individual Defendants’ breaches of fiduciary duty, for which Plaintiff and the Class have no adequate remedy at law.

RELIEF REQUESTED

WHEREFORE, Plaintiff and members of the Class demand judgment against Defendants as follows:

A. Declaring that this action is properly maintainable as a class action and certifying Plaintiff as the representative of the Class;

B. Preliminarily and permanently enjoining Defendants and their counsel, agents, employees and all persons acting under, in concert with, or for them, from proceeding with, consummating, or closing the Proposed Transaction;

C. Enjoining the Individual Defendants from initiating and/or continuing any defensive measures that would inhibit their ability to conduct a true auction or “market check” of the Company so as to test its true value in connection with a potential sale and/or to obtain the best possible price for MicroFinancial’s public stockholders.

D. Enjoining the Individual Defendants from consummating the Tender Offer and/or Proposed Transaction until the defendants disclose all material information encompassing the total mix of information available to the Company’s stockholders so that they can make an informed decision whether to tender their shares of stock in the Tender Offer.

E. In the event that the proposed transaction is consummated, rescinding it and setting it aside, or awarding monetary damages to the Class;

F. Awarding compensatory damages against Defendants, individually and severally, in an amount to be determined at trial, together with pre-judgment and post-judgment interest at the maximum rate allowable by law, arising from the proposed transaction;

G. Awarding Plaintiff the costs and disbursements of this action and a reasonable allowances for fees and expenses of Plaintiff s counsel and experts; and

H. Granting Plaintiff and the Class such other and further relief as the Court may deem just and proper.

Dated: December 23, 2014

	Respectfully submitted,


	/s/ Jason M. Leviton
	BLOCK & LEVITON LLP
	Jason M. Leviton (BBO# 678331)
	Mark A. Delaney (BBO# 652194)
	155 Federal Street
	Suite 1303
	Boston, MA 02110
	Tel: (617) 398-5600
	Fax: (617) 507-6020
	jason@blockesq.com
	mark@blockesq.com

	Counsel for Plaintiff

Of Counsel:

MILBERG LLP

Kent A. Bronson, Esq.

Arvind Khurana, Esq.

One Pennsylvania Plaza
New York, NY 10119
Tel: (212) 594-5300

Counsel for Plaintiff

EX-99.(A)(5)(B) 4 a14-26332_9ex99da5b.htm EX-99.(A)(5)(B)

Exhibit (a)(5)(B)

COMMONWEALTH OF MASSACHUSETTS

SUFFOLK, SS.	SUPERIOR COURT DEPARTMENT
	OF THE TRIAL COURT
ANDREW JAMES DEHN, On Behalf of Himself		)
and All Others Similarly Situated,		)
		)
Plaintiff,		)
		)	JURY TRIAL DEMANDED
v.		)
		)	CA.NO. 14-4042 B.L.S.
MICROFINANCIAL INC., PETER R.		)
BLEYLEBEN, BRIAN E. BOYLE, TORRENCE C.		)
HARDER, RICHARD F. LATOUR, FRITZ VON		)
MERING, ALAN J. ZAKON, MF PARENT LP, MF		)
MERGER SUB CORP., and FORTRESS		)
INVESTMENT GROUP LLC,		)
		)
		)
Defendants.		)
		)

STOCKHOLDER CLASS ACTION COMPLAINT

FOR BREACH OF FIDUCIARY DUTY

Plaintiff Andrew James Dehn (“Plaintiff”), by and through his attorneys, alleges upon information and belief, except for his own acts, which are alleged on knowledge, as follows:

NATURE OF THE ACTION

1. Headquartered in Burlington, Massachusetts, and founded in 1987, MicroFinancial Incorporated (“MicroFinancial” or the “Company”) is a specialized commercial/consumer finance company, providing equipment leasing and financing services with a primary focus on the microticket market in the United States. The Company offers financing alternatives to start-up businesses and established enterprises, and leases and rents commercial equipment for use in daily operations. It also finances various products, such as water filtration systems, food service equipment, security equipment, point of sale cash registers,

salon equipment, copiers, healthcare and fitness equipment, and automotive repair equipment. In addition, the Company offers consumer financings consisting of service contracts from dealers that primarily provide residential security monitoring services, as well as consumer leases for a range of consumer products.

2. On December 15, 2014, the Company and Fortress Investment Group LLC (“Fortress”) jointly announced that they had entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”), dated December 13, 2014, pursuant to which MF Merger Sub Corp. (“Merger Sub”) and MF Parent LP, affiliates of Fortress, will acquire MicroFinancial via a tender offer in a deal worth approximately $147 million (the “Tender Offer”). The Tender Offer is set to expire at midnight on January 7, 2015.

3. As a result of the merger, MicroFinancial stockholders are only anticipated to receive $10.20 per share in cash (the “Merger Consideration”) in exchange for each share of MicroFinancial stock they own (the “Proposed Transaction”). The closing of the Tender Offer is subject to certain conditions, including the tender of a number of MicroFinancial shares that, together with other shares owned or to be acquired by Fortress, represent at least two thirds of the total number of MicroFinancial’s outstanding shares on a fully diluted basis, and other customary conditions.

4. As described more fully herein, the Merger Consideration fails to adequately compensate MicroFinancial stockholders for their stake in the Company, despite its strategic positioning as a leader in an expanding marketplace. Despite the Company’s representation that the $10.20 per share Merger Consideration represents a “significant” premium “over current trading price and our book value,” in actuality, the Merger Consideration is only a meager 18% over the Company’s December 12, 2014 closing price of $8.30. Moreover, in recent months,

MicroFinancial has traded as high as $9.00 - representing a premium of only 11%. Additionally, for the past four financial quarters (fourth quarter of 2013 through the present), MicroFinancial has reported record level revenue: a 5.4% increase in the fourth quarter of 2013, a 2.6% increase in the first quarter of 2014, a $100,000 increase in the second quarter of 2014, and a 3.1% increase in the third quarter of 2014. Much of this success may be attributed to the Company’s recent contract expansions, with originations increasing 25.8% to $29.7 million in the most recent financial quarter.

5. Consequently, Wall Street analysts have target prices for the Company well north of the Merger Consideration, with at least one analyst at BMO Capital setting a target of $16.00 per share on April 15, 2014. Moreover, the financial analyses performed by Berenson & Company LLC (“Berenson”), MicroFinancial’s financial advisor in the transaction, indicate a value for the Company as high as $12.39 per share.

6. The Proposed Transaction is the product of a flawed process that was designed to ensure the sale of MicroFinancial to Fortress on terms preferential to the defendants and other MicroFinancial insiders and which subvert the interests of Plaintiff and the other public stockholders of the Company. In particular, several of the Board members and management are inherently conflicted in approving the Proposed Transaction by the promise of post-transaction employment and handsome salaries. Defendant Richard F. Latour (“Latour”), the Chief Executive Officer (“CEO”), James R. Jackson, Jr. (“Jackson”), the Chief Financial Officer, and Steven J. LaCreta (“LaCreta”), the Vice President, Legal and Vendor/Lessee Relations, all entered into amended and restated employment agreements (the “Employment Agreements”) with Fortress in order to continue their employment with the post-transaction entity “on

substantially the same economic terms as provided for in their existing agreements with the Company.”

7. These Employment Agreements will become effective upon the completion of the Proposed Transaction for a term of one year, with automatic renewals upon each succeeding anniversary of the closing unless either party gives at least 90 days notice prior to a scheduled expiration that the term will not be extended. Moreover, Fortress raised its intention to employ management and provide them with the ability to rollover their stock into shares of the new company early in the negotiating process before the terms of the Merger Agreement had even been finalized.

8. As alleged in further detail below, both the consideration MicroFinancial stockholders stand to receive via the Proposed Transaction and the process by which Defendants propose to consummate the Merger are fundamentally unfair to Plaintiff and the other public stockholders of the Company.

9. As such, MicroFinancial’s Board of Directors (the “Individual Defendants”) breached their fiduciary duties owed to MicroFinancial stockholders, and violated the applicable legal standards governing the Individual Defendants’ conduct.

10. In further breach of their fiduciary duties, on December 19, 2014, the Individual Defendants caused to be filed a Schedule 14D-9 Solicitation/Recommendation Statement (“14D- 9” or “Recommendation Statement”) with the United States Securities and Exchange Commission (“SEC”) that recommends shareholders tender their shares into the Tender Offer and support the Proposed Transaction. The 14D-9 is materially deficient and deprives MicroFinancial stockholders of the basic information required to make an intelligent, informed and rational decision in regards to the Tender Offer. The 14D-9 fails to disclose all material

information concerning the Proposed Transaction and contains additional materially misleading statements.

11. For these reasons and as set forth in detail herein, Plaintiff seeks to enjoin Defendants from taking any steps to consummate the Proposed Transaction or, in the event the Proposed Transaction is consummated, to recover damages resulting from the Individual Defendants’ violations of their fiduciary duties of loyalty, candor, good faith, and due care.

JURISDICTION AND VENUE

12. Jurisdiction is proper under Mass. Gen. Laws Ch. 223A Section 2. MicroFinancial is incorporated in Massachusetts and maintains its principal executive offices in Burlington, Massachusetts. The Defendants have sufficient minimum contacts with Massachusetts so as to render the exercise of jurisdiction by this Court permissible under the traditional notions of fair play and substantial justice.

13. Admission of this matter into the Business Litigation Session of the Massachusetts Superior Court is proper pursuant to Superior Court Administrative Directive No. 09-1, based on the fact the litigation involves the merger of a corporation and the liability of certain officers and directors of that corporation.

14. Venue is proper pursuant to Mass Gen. Laws Ch. 223 Sections 1, 8.

PARTIES

15. Plaintiff is, and at all times relevant hereto has been, a stockholder of the Company.

16. Defendant MicroFinancial is a corporation organized and existing under the laws of Massachusetts, with its principal executive offices located at 16 New England Executive Park, Suite 200, Burlington, Massachusetts 01803. MicroFinancial stock is traded on the NASDAQ Stock Exchange under the ticker symbol, “MFI”.

17. Defendant Peter R. Bleyleben (“Bleyleben”) is a director of the Company. Bleyleben previously served as the Non-Executive Chairman of the Board from 2002 through 2012, and also served as President and later Chairman, CEO and director of the Company or its predecessor from 1987 to 2002.

18. Defendant Brian E. Boyle (“Boyle”) is a director of the Company and has been since 1985. Boyle previously served as the CEO of the Company from 1985 to 1987 and Chairman of the Board from 1985 to 1995. He is currently the Chairman of the Compensation and Benefits Committee, a member of the Audit Committee, a member of the Nominating and Corporate Governance Committee, a member of the Credit Policy Committee, and a member of the Strategic Planning Committee.

19. Defendant Torrence C. Harder (“Harder”) is a director of the Company and has been since 1986. Harder also serves as the Chairman of the Credit Policy Committee, a member of the Audit Committee, and a member of the Strategic Planning Committee.

20. Defendant Richard F. Latour (“Latour”) is a director of the Company and has been since 2002. Latour also serves as MicroFinancial’s CEO, President, Treasurer, Secretary, and Clerk.

21. Defendant Fritz von Mering (“von Mering”) is a director of the Company and has been since 2004. Von Mering also serves as the Non-Executive Chairman of the Board, the Chairman of the Audit Committee, the Chairman of the Strategic Planning Committee, a member of the Nominating and Corporate Governance Committee, and a member of the Compensation and Benefits Committee.

22. Defendant Alan J. Zakon (“Zakon”) is a director of the Company and has been since 1988. Zakon also serves as the Chairman of the Nominating and Corporate Governance

Committee, a member of the Compensation and Benefits Committee, and a member of the Strategic Planning Committee.

23. Defendants Bleyleben, Boyle, Harder, Latour, von Mering, and Zakon are collectively referred to herein as the “Individual Defendants” and/or the “Board.”

24. Defendant Fortress is an alternative asset manager. Fortress raises, invests, and manages private equity funds, hedge funds, and publicly traded alternative investment vehicles. Fortress is a corporation organized and existing under the laws of the State of Delaware with its principal executive offices located in New York, New York.

25. Defendant MF Parent LP is a Delaware limited partnership, and an affiliate of Fortress.

26. Defendant Merger Sub is a direct wholly owned subsidiary of MP Parent LP, and is a corporation duly organized for the purposes of facilitating the Proposed Transaction and under the laws of Massachusetts, along with being an affiliate of Fortress.

27. Defendants Fortress, MF Parent LP and Merger Sub are collectively referred to herein as the “Acquisition Defendants.”

THE INDIVIDUAL DEFENDANTS’ FIDUCIARY DUTIES

28. By reason of the Individual Defendants’ positions with the Company as officers and/or directors, said individuals are in a fiduciary relationship with Plaintiff and the other shareholders of MicroFinancial and owe Plaintiff and the other members of the Class (defined herein) the duties of good faith, fair dealing, loyalty and full and candid disclosure.

29. By virtue of their positions as directors and/or officers of MicroFinancial, the Individual Defendants, at all relevant times, had the power to control and influence, and did control and influence and cause MicroFinancial to engage in the practices complained of herein.

30. Each of the Individual Defendants is required to act in good faith, in the best interests of the Company’s shareholders and with such care, including reasonable inquiry, as would be expected of an ordinarily prudent person. In a situation where the directors of a publicly traded company undertake a transaction that may result in a change in corporate control, the directors must take all steps reasonably required to obtain adequate value for shareholders and its constituents rather than use a change of control to benefit themselves, and to disclose all material information concerning the proposed change of control to enable the shareholders to make an informed voting decision. To diligently comply with this duty, the directors of a corporation may not take any action that:

(a) adversely affects the value provided to the corporation’s shareholders;

(b) contractually prohibits them from complying with or carrying out their fiduciary duties;

(d) will otherwise adversely affect their duty to search for and secure the best value reasonably available under the circumstances for the corporation’s shareholders; or

(e) will provide the directors and/or officers with preferential treatment at the expense of, or separate from, the public shareholders.

31. Plaintiff alleges herein that the Individual Defendants, separately and together, in connection with the Proposed Transaction, violated duties owed to Plaintiff and the other shareholders of MicroFinancial, including their duties of loyalty, good faith and independence, insofar as they, inter alia, engaged in self-dealing and obtained for themselves personal benefits,

including personal financial benefits, not shared equally by Plaintiff or the other shareholders of MicroFinancial common stock.

CLASS ACTION ALLEGATIONS

32. Plaintiff brings this action for himself and as a class action on behalf of all owners of MicroFinancial common stock as of December 15, 2014, the date MicroFinancial and Fortress announced the Proposed Transaction (the “Class”). Excluded from the Class are Defendants and their affiliates, immediate families, legal representatives, heirs, successors, or assigns and any entity in which Defendant have or had a controlling interest.

33. The Class is so numerous that joinder of all members is impracticable. While the exact number of Class members is unknown to Plaintiff at this time and can only be ascertained through discovery, Plaintiff believes that there are thousands of members in the Class. According to the Recommendation Statement, as of December 13, 2014, MicroFinancial has 14,433,154 million shares of MicroFinancial common stock outstanding. All members of the Class may be identified from records maintained by MicroFinancial or its transfer agent and may be notified of the pendency of this action by mail, using forms of notice similar to that customarily used in securities class actions.

34. Questions of law and fact in common to the Class include, inter alia, the following:

a. Whether the Individual Defendants breached their fiduciary duties of undivided loyalty or due care with respect to Plaintiff and the other members of the Class in connection with the Proposed Transaction;

b. Whether the Individual Defendants breached their fiduciary duty to secure and obtain the best price reasonably available under the circumstances for the benefit

of Plaintiff and the other members of the Class in connection with the Proposed Transaction;

c. Whether the Acquisition Defendants aided and abetted the Individual Defendants’ breaches of fiduciary duty;

d. Whether the Individual Defendants violated the federal securities laws; and

e. Whether Plaintiff and the other members of the Class would be irreparably harmed if the transactions complained of herein were consummated.

35. Plaintiff’s claims are typical of claims of the other members of the Class. Plaintiff and the other members of the Class have sustained damages as a result of Defendants’ wrongful conduct as alleged herein.

36. Plaintiff is committed to prosecuting this action, will fairly and adequately protect the interests of the Class, and has no interests contrary to or in conflict with those of the Class that Plaintiff seeks to represent.

37. The prosecution of separate actions by individual members of the Class would create the risk of inconsistent or varying adjudications for individual members of the Class and of establishing incompatible standards of conduct for the parties opposing the Class.

38. Conflicting adjudications for individual members of the Class might, as a practical matter, be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interest.

39. Defendants have acted on grounds generally applicable to the class, making it appropriate to grant final injunctive relief with respect to the Class as a whole.

FACTUAL BACKGROUND

Company Background and its Poise for Growth

40. With headquarters in Burlington, MA, MicroFinancial is a financial intermediary specializing in leasing and financing for products that are typically in the $500 to $50,000 and up price range. In essence, MicroFinancial is a financial intermediary specializing in microticket leasing which operates through its wholly-owned subsidiaries, TimePayment Corp. and Leasecomm Corp. Through its subsidiaries, the Company has provided leasing and financing alternatives for hundreds of thousands, mostly commercial, accounts nationwide beginning in 1986. Through its operating subsidiary TimePayment Corporation, it offers TimePayment Direct™, a web based application and credit approval process for its vendors which provides credit decisions usually within 2 - 3 minutes.

41. In 2013, MicroFinancial increased its net income to $9.8 million or $0.66 per diluted share as compared to $9.4 million or $0.64 per diluted share in 2012. The Company similarly reported increase in total revenue by 5.4% to $62.5 million as compared to $59.3 million in 2012; an increase in total cash received by customers by 7.4% or $9.0 million as compared to 2012, bringing total cash received to $130.8 million representing $8.86 per diluted share; reduced net charge-offs by 2.4% to $18.2 million in 2013 as compared to $18.6 million in 2012; and an increase dividend payout to $0.25 per share in 2013 versus $0.24 per share in 2012. Richard Latour, President and CEO, commented on the positive financial results:

We are very pleased with our operating results for 2013. We increased net income to $9.8 million, diluted earnings per share to $0.66, and cash receipts to $130.8 million. We successfully launched our new E-Commerce initiative in the fourth quarter of 2013 which provides our dealer base with an additional method to increase their on-line sales efforts and allows lessees a quick and efficient method to finance their on-line shopping carts from our approved vendor base. Our continued investments in sales and marketing initiatives resulted in an 8% growth in dollars of applications over last year to $446 million and a 4% increase in approved applications to $237 million in 2013. In addition, we repurchased

over 97,000 shares during 2013 at an average cost of approximately $7.28 per share and were able to increase the dividend payout rate to $0.25 per share for 2013 as compared to $0.24 in 2012.

42. This record-level financial success continued into 2014 when, on April 16, 2014, the Company reported first quarter 2014 results boasting that it increased cash received from customers by 11.5% to $34.6 million, representing $2.34 per diluted share as compared to the first quarter of 2013. In addition, the Company reported that total revenues increased by 2.6% to $15.7 million as compared to the same period last year. Revenue for the quarter ended March 31, 2014 increased 2.6% to $15.7 million compared to $15.3 million in the first quarter of 2013, due primarily to increases in rental income and income on service contracts. Defendant Latour again celebrated the results:

We are pleased with our overall financial performance for the quarter. Through the first three months of 2014, we are starting to see the improvements from the changes we made to our sales force structure at the end of 2013. We increased the number of lease applications processed by approximately 10% to 20,050 and increased our lease application dollars by approximately 17%. In addition, we increased new vendor approvals by approximately 33% for the quarter to 338 along with an increase in our lease originations by approximately 15% to $23.0 million as compared to the same period last year. Cash received from customers continues to improve and increased approximately 11.5% or $3.6 million to $34.6 million as compared to the first quarter of 2013. The average deal size increased slightly from approximately $4,600 in the first quarter of 2013 to $4,900 in the first quarter of 2014.

43. During the second quarter of 2014, the Company reported similarly positive results. Specifically, on July 16, 2014, MicroFinancial reported that contract originations increased by 16.3% to $27.8 million as compared to the same period the prior year. Revenue for the second quarter increased to $15.8 million compared to $15.7 million for the same period in 2013, driven primarily by growth in service contract revenues and rental income during the quarter. For the year to date, the Company had approved 748 new dealers and brokers year-to-

date which represents an increase of 37.5% over the same period last year. Defendant Latour lauded the results:

We are very pleased with our overall performance through the first six months of 2014. During this period, we have continued to see an increased demand for the products and services we offer. We realized a 15% increase in the number of lease applications processed for a total of 43,345 applications and a 19% increase in application dollars for a total of over $258 million. The number of contracts funded during the first half of 2014 increased to 10,422 representing $50.8 million which represents increases of approximately 13% and 16% over 2013 performance, respectively. In addition, cash received from customers continues to improve and increased approximately 9% to over $69 million. During the quarter, we also improved our technology platform through a complete revision of our TimePayment website which incorporates new functionality and features designed to improve the online experience for our vendors, brokers, and lessees.

44. Most recently, the Company announced third quarter 2014 results on October 15, 2014 for the nine months ended September 30, 2014. During this period, MicroFinancial reported that net income increased by 11.9% to $2.9 million or $0.20 per diluted share based upon 14,735,988 shares as compared to the same period last year. Revenue also increased by 3.1% to $16.2 million as compared to the same period last year; originations further increased by 25.8% to $29.7 million as compared to $23.6 million in the same period last year. Once again, Defendant Latour commented positively on the third quarter results:

We are very pleased with our overall performance through the first nine months of 2014. During this period, we have continued to see an increased demand for the products and services we offer. We realized a 21% increase in the number of lease applications processed for a total of 70,069 applications and a 20% increase in application dollars for a total of over $404 million. The number of contracts funded during the first nine months of 2014 increased to 16,624 representing $80.5 million which represents increases of approximately 17% and 19% over 2013 performance, respectively. Through September, we also increased the number of new vendor approvals for 2014 to a total of 1,108 which represents an increase of 40% over the 790 vendors approved over the same period in 2013.

45. Thus, as reflected in the Company’s recent financial results and concurrent press releases and statements, MicroFinancial is primed to continue returning exceptional financial results to its stockholders well into the future.

46. Not surprisingly, numerous Wall Street analysts have set target prices for the Company well north of the Merger Consideration, with an analysts at BMO Capital setting a target of $16.00 per share on April 15, 2014.

47. However, despite the financial strength of the Company, its position as premier player in the market, and the expected expansion of its client base, the Individual Defendants entered into the Merger Agreement with Fortress for inadequate consideration, thereby depriving MicroFinancial’s public stockholders of the opportunity to enjoy the Company’s promising long- term business prospects as a standalone company. Having failed to maximize the sale price for the Company, the Individual Defendants breached the fiduciary duties they owe to the Company’s public stockholders because the Company has been improperly valued and public stockholders will not receive adequate or fair value for their MicroFinancial common stock.

The Inadequate Process Leading Up To The Proposed Transaction

48. The process leading up to the Proposed Transaction was designed to favor Fortress and the Company managements’ post-employment interests over the interests of the Company’s stockholders. This was not the first time the Company had looked into a potential sale of MicroFinancial. After receiving two unsolicited inquiries from investment banks in January of 2012, the MicroFinancial Board decided to invite several independent advisors to present various strategic alternatives to the Board. Ultimately, Defendant Latour determined that none of the parties that had shown interest in MicroFinancial proposed a price per share that would “reflect an appropriate premium over the then current trading price of the Company’s common stock.” The value of the indications of interest the Company received and their

respective premiums are not disclosed in the Recommendation Statement. It is also not disclosed whether any of the indications of interests included post-employment positions for management with the continuing company.

49. After determining no viable bidders existed, the Board decided to focus on the Company’s internal growth strategies. A month after terminating the prior process, the Board began working with a new investment banker, Berenson & Company (“Berenson”), its financial advisor in the Proposed Transaction. Berenson first contacted defendant Latour in December 2013 to suggest introducing Latour to a potential buyer, “Party A”, for the Company. It is unclear why Berenson contacted Latour or why it thought the Company would be interested in an acquisition.

50. In mid-January of 2014, Berenson, Defendant Latour and Party A met. Party A had previously been contacted by the Initial Banker in 2012 but had not expressed an interest in the Company at that time. By the end of the month, there were contacts and meetings arranged by Berenson between MicroFinancial’s management team and Party A.

51. On February 4, 2014, the Company formally engaged Berenson as its financial advisor in the Proposed Transaction.

52. On February 14, 2014, Party A submitted a non-binding indication of interest to acquire the Company for $10.10. On March 7, 2014, Party A increased its offer to acquire the Company to $10.50 per share.

53. After deciding to pursue further a potential transaction with Party A, the Individual Defendants formed a purported Special Committee (the “Special Committee”) to manage the process with Party A in order “to enhance efficiency and to guard against the

appearance of any conflict between the interests of shareholders and those of management.” The Special Committee consisted of Defendants von Mering and Zakon.

54. On March 18, 2014, the Company and Party A issued a non-binding letter of intent for Party A to acquire the Company for $10.50 per share of the Company’s common stock, payable in the form of Party A stock. After conducting due diligence, however, Party A lowered its bid price to $9.50 per share of the Company’s common stock.

55. At this point in time, the Company authorized Berenson to commence an expanded process and entered into a revised engagement letter with Berenson. The Board also expanded the authority of the Special Committee to encompass the activities contemplated in the Berenson engagement letter. As previously acknowledged by the Recommendation Statement, however, the Special Committee was merely a way to fend off the appearance of impropriety when, in reality, the two person committee did very little to advance the process. Rather, Berenson and the Company’s conflicted management team led the strategic process and steered the deal towards Fortress.

56. Ultimately, Berenson contacted 61 potential buyers, consisting of 21 strategic parties and 40 financial sponsors. An undisclosed number of these parties had previously been contacted during the process in 2012. Receiving an overwhelming interest in the Company, thirty of the contacted parties, including Fortress, executed confidentiality agreements with the Company. Company A was also contacted to determine whether it was still interested in the Company.

57. The Company received several favorable indications of interest at this point in time. In the first half of August 2014, six potential buyers submitted indications of interest: Party B submitted a bid for $9.17 per share in cash; Party C offered a range of $9.75 to

$10.75 per share in cash; Fortress offered a range of $9.50 to $10.50 per share in cash; and three others submitted a bid for $7.72 per share in cash, $9.00 per share with half in stock and half in cash, and another offer was made to purchase the shares of the Company’s three principal shareholders. Company A also submitted an indication of interest for $9.75 per share, payable in the form of Party A stock, or $9.50 per share in cash.

58. Despite the multiple indications of interest, some higher than the Merger Consideration, the Board and Berenson gave preferential treatment to Fortress. At Berenson’s request, the Company’s management team and representatives of Fortress met on August 18, 2014 to discuss a strategic transaction. It is unclear at this point why Berenson wanted MicroFinancial’s management to meet with Fortress and not any of the other bidding parties.

59. Berenson then met with the Special Committee to discuss indications of interest and recommend a course of action. Abiding by Berenson’s wishes, the Special Committee agreed with Berenson to move forward in the process with Fortress and Parties B and C, while also maintaining communications with Party A. The Recommendation Statement does not disclose why the Company and Berenson did not pursue further contacts with the three bidding parties who offered $7.72 per share, $9.00 per share, and to acquire the principal three shareholders’ shares.

60. Company management met with Fortress, Party B, and Party C the week of September 11, 2014 to present its growth projections to the remaining, bidding parties. At the meeting with Fortress, Fortress was quick to indicate that its proposal would provide the opportunity for management to “roll over” a portion of its Company common stock and receive new equity incentives going forward. A few days later, Fortress again emphasized that it sought

to retain the current management team of MicroFinancial and submitted a revised non-binding letter of intent to acquire the Company for $10.10 per share. Now that management had been offered the golden ticket to continue with the combined company, there was no better offer in their minds.

61. The Company continued to meet with Fortress while neglecting the remainder of the interested parties until finally, in the beginning of October 2014, Party A had enough and indicated that it did not wish to increase its earlier bid. The Company and Berenson responded to inquiries and made a presentation to Company C at this time. For reasons unknown, Parties B and C withdrew from the process as well.

62. Making way for Fortress to move forward undeterred, the Company received a new non-binding indication of interest from Fortress on October 15, 2014 for $10.10 per share in cash.

63. On October 16, 2014, the Special Committee finally decided to involve itself in the process by meeting with Defendant Latour and representatives of Berenson. Despite Defendant Latour’s apparent conflict of interest due to his post-employment position, Fortress’s proposal was reviewed with him at that time. Unsurprisingly, the conflicted parties felt the proposal was “attractive.” After Berenson reported the status of other prospective purchasers, the Special Committee requested that Berenson contact Party A to give it an opportunity to improve its offer. It is unclear whether Berenson reached out to Party A at this time.

64. At an October 17, 2014 meeting of the Company’s Board of Directors, the Board confirmed that in order to “avoid the appearance of a potential conflict of interest, Mr. Latour would not have a negotiating role in the Company’s transaction and that management’s employment and equity arrangements would not be addressed with Fortress until the Board had

resolved the principal terms of the Company’s agreement.” It is unclear at this point what terms, if any, had already been negotiated concerning post-employment positions and equity awards.

65. On October 22, 2014, the Board instructed Berenson to reach out again to Party A and also approach Fortress to negotiate a higher bid. Party A informed Berenson that is was not increasing its bid at that time.

66. Two days later, on October 24, 2014, Fortress delivered a revised non-binding indication of interest for $10.20 per share in cash. After the Special Committee, Berenson, and the Company’s legal counsel reviewed the offer, it was executed that day.

67. Ultimately, on December 11, 2014, Berenson presented its fairness opinion to the Board, the post-employment agreements with senior management were approved, and the terms of the Merger Agreement were approved. On December 13, 2014, the Merger Agreement was executed and, on December 19, 2014, the Tender Offer commenced.

The Proposed Transaction

68. On December 15, 2014, MicroFinancial and Fortress issued a joint press release announcing the Proposed Transaction. The announcement stated in relevant part:

MicroFinancial Incorporated Enters Into Agreement to be Acquired by Funds Managed by Fortress Investment Group

BURLINGTON, Mass., Dec. 15, 2014 (GLOBE NEWSWIRE) - MicroFinancial Incorporated (Nasdaq:MFI) (“MicroFinancial” or the “Company”) has entered into a definitive agreement with MF Parent LP (“Parent”) and MF Merger Sub Corp. (“Purchaser”), each an affiliate of funds managed by affiliates of Fortress Investment Group LLC (NYSE:FIG), whereby Parent will acquire all of the outstanding shares of the Company for $10.20 per share in cash pursuant to an Agreement and Plan of Merger dated December 13, 2014 (the “Merger Agreement”).

regulations of the Securities and Exchange Commission. The Company presently intends, subject to approval of the Company’s Board of Directors at the time, to declare a single quarterly cash dividend on its common stock in an amount expected to be $0.08 per share with a record date that is no later than January 12, 2015 and a payment date that is on or prior to the time of acceptance of shares of the Company’s common stock in the Tender Offer. Following the completion of the Tender Offer, the parties will complete a second-step merger in which any remaining shares of the Company’s common stock will be converted into the right to receive the same price per share paid in the Tender Offer (the “Merger”).

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69. The Proposed Transaction undervalues MicroFinancial’s prospects and is the result of an entirely unfair sales process. Should the Proposed Transaction close, MicroFinancial stockholders will receive just $10.20 per share for their Company holdings, a meager premium which does not adequately compensate stockholders for the Company’s recent financial and developmental milestones.

The Merger Agreement Unfairly Deters Competitive Offers and is Unduly Beneficial to Fortress

70. The Proposed Transaction is also unfair because, as part of the Merger Agreement, Defendants agreed to certain onerous and preclusive deal protection devices that operate conjunctively to make the Proposed Transaction a fait accompli and ensure that no competing offers will emerge for the Company.

71. First, Section 7.2(d) of the Merger Agreement broadly provides that neither MicroFinancial, nor any of its affiliates, may solicit or proactively seek a competing and better offer, nor can they provide information to, or engage in discussions with, any potential bidder for the Company. The section states that the Company or and of its subsidiaries or affiliates shall not:

Seller shall not, and shall cause the Seller Subsidiaries and its and their respective directors, officers and employees not to, and shall use reasonable best efforts to cause all of its and their respective other Representatives not to, (i) directly or indirectly initiate, solicit, or knowingly encourage or knowingly facilitate any inquiries regarding, or the submission of any indication of interest, proposal or offer that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal, (ii) directly or indirectly participate in any discussions or negotiations regarding, or furnish any non-public information to any Person (other than Parent or Purchaser) in connection with, or take any other action intended to, or that would reasonably be expected to, facilitate the making of any proposal or offer that constitutes, or could reasonably be expected to lead to, any Acquisition Proposal, (iii) enter into any letter of intent or agreement related to an Acquisition Proposal (other than a confidentiality agreement as contemplated by Section 7.2(c)), or (iv) approve or recommend an Acquisition Proposal.

72. Additionally, although Section 7.2 provides for a qualified “fiduciary out,” this caveat requires that the Company keep Fortress informed of any competing proposals. Specifically, that Section obligates the Company to:

[N]otify Parent promptly (but in any event within forty-eight (48) hours) of the receipt of any inquiries, proposals or expressions of interest with respect to, or that would reasonably be expected to lead to, an Acquisition Proposal, together with all material terms and conditions thereof (including an unredacted copy or, if such Acquisition Proposal is not in writing, a written description of such material terms and conditions) and the identity of the Person such inquiry, proposal or expression of interest. Seller shall (i) keep Parent reasonably informed of the status (including any material change to the financial terms, conditions, or other material terms) of any such inquiries, proposals or expressions of interest, and any related negotiations or discussions, with respect to an Acquisition Proposal, on a reasonably current basis (and otherwise no later than 24 hours after the occurrence of any material occurrence, change, development, discussion or negotiations) and (ii) provide to Parent, as soon as practicable and in any event within 24 hours after receipt or delivery thereof, copies of all draft agreements (and any other written material relating to any Acquisition Proposal or, where no such written materials are available, a summary of the material terms and conditions thereof). Seller

shall not, and shall cause the Seller Subsidiaries not to, enter into any agreement with any Person subsequent to the date of this Agreement, and neither Seller nor any Seller Subsidiary is party to any agreement, in each case that prohibits from providing any information to Parent in accordance with, or otherwise complying with, this Section 7.2.

73. Accordingly, no rival bidder is likely to emerge and act as a stalking horse in light of the potential risks associated with disseminating a rival bidder confidential information and the ability of Fortress to easily piggy-back upon the due diligence of the foreclosed second bidder.

74. Furthermore, Section 7.2(f) grants Fortress five-days to amend the terms of the Proposed Transaction in response to a competing bid, which in turn gives Fortress unfettered access to confidential, non-public information about competing proposals from third parties which Fortress can use to prepare a matching bid. Additionally, this section requires that MicroFinancial consider any revisions to the Proposed Transaction made by Fortress:

If Seller Board receives a Superior Proposal that did not result from a breach of this Section 7.2(e), provided that Seller Board determines, in good faith, after consultation with outside counsel and its financial advisor, that the failure to take such action would violate its fiduciary duties under applicable Law, the Seller Board may make an Adverse Recommendation Change and/or Seller may terminate this Agreement ...provided that prior to so making an Adverse Recommendation Change or terminating this Agreement, (i) Seller gives Parent at least three (3) Business Days’ prior written notice of its intention to take such action, specifying, in reasonable detail, the reasons therefor, and the material terms and conditions of, and the identity of the Person making, any such Superior Proposal and a copy of the Superior Proposal and any proposed Acquisition Agreements and financing commitments relating thereto, (ii) Seller negotiates, and uses reasonable best efforts to cause its Representatives to negotiate, in good faith with Parent during such notice period, to the extent Parent wishes to negotiate, to enable Parent to propose revisions to the terms of this Agreement such that it would cause such Superior Proposal to no longer constitute a Superior Proposal, (iii) upon the end of such notice period, Seller Board considers in good faith any revisions to the terms of this Agreement proposed in writing by Parent, and determines, in good faith, after consultation with outside counsel and its financial advisor, that the Superior Proposal would continue to constitute a Superior Proposal even if the revisions proposed by Parent were to be given effect and (iv) in the event of any change to any of the financial terms (including the form, amount and timing of payment of consideration) or any other material terms

of such Superior Proposal, Seller shall, in each case, deliver to Parent an additional notice consistent with that described in clause.

75. In effect, this provision obligates the Board to grant Fortress three business days in which the Company must “use reasonable best efforts” to negotiate “in good faith” with Fortress and allow Fortress to amend the terms of the Merger Agreement. Put another way, this revision and notice provision essentially ensures that no superior bidder will emerge, as any potential suitor will be unlikely to expend the time, cost and effort to perform due diligence and make a superior proposal while knowing that Fortress will be informed of its bid and the details and terms thereof and can easily top it. As a result, the matching rights provision unreasonably favors Fortress, to the detriment of MicroFinancial public stockholders.

76. Pursuant to the Merger Agreement, MicroFinancial has also granted Fortress a “Top-Up” option that ensures that Fortress gains the shares necessary to effectuate a short-form merger. Pursuant to the Merger Agreement, if Fortress receives 90% of the shares outstanding through its Tender Offer, it can effect a short-form merger. In the event Fortress fails to acquire the 90% required, the Merger Agreement also contains a “Top-Up” provision that grants Fortress an option to purchase additional shares from the Company in order to reach the 90% threshold required to effectuate a short-form merger.

77. Compounding matters, Section 9.2 of the Merger Agreement requires the Company to pay a termination fee of $6.5 million if the Proposed Transaction is terminated for various reasons, thereby essentially requiring that a competing bidder agree to pay a naked premium for the right to provide the stockholders with a superior offer.

78. Essentially, any unsolicited competing bidder would have to incur the great expense of conducting due diligence and formulating a proposal within a very limited time frame, just to be met by Fortress’s matching rights and the Board’s good faith obligation to

consider that matching bid. Further, Section 5.02 provides that, as a condition and inducement of the agreement, each of Defendant Latour, James R. Jackson, Jr., the Chief Financial Officer, and Steven J. LaCreta, the Vice President, Legal and Vendor/Lessee Relations, have entered into Employment Agreements with the Company in order to continue their employment with the Company following the Proposed Transaction on substantially the same economic terms as provided for in their existing agreements with the Company. Thus, in conjunction with the matching rights provision, an emerging bidder will be forced to negotiate with a Board already heavily biased in favor of approving the Proposed Transaction and contractually obligated to do so. Even if a bidder is able to withstand these impediments, that bidder will be further discouraged by having to pay the onerous termination fee to the Company.

79. And finally, Section 8.01 reveals that on December 13, 2014, in connection with the execution of the Merger Agreement, each of the non-executive directors of MicroFinancial (the “Supporting Stockholders”), who hold 5,014,674 shares in the aggregate, or 34.7% of the shares of MicroFinancial common stock outstanding, entered into a Tender and Support Agreement with Parent and Merger Sub (the “Support Agreement”). Pursuant to the Support Agreement, the Supporting Stockholders have agreed, among other things, to tender their shares in the Tender Offer and to vote (or cause to be voted) their shares against certain other transactions. More specifically, Section 8.01 requires a Supporting Stockholder to abstain from voting shares in favor of any alternative proposal which would frustrate the Proposed Transaction, and to further affirmatively vote against any such alternative proposal. This section further precludes any such stockholder from withdrawing shares in support of the tender offer until the offer expires or is terminated. This provision further evidences the heavy burden a

prospective topping bidder will face in negotiations with a Board that is contractually obligated to approve the Proposed Transaction.

80. Ultimately, these preclusive deal protection provisions illegally restrain the Company’s ability to solicit or engage in negotiations with any third party regarding a proposal to acquire all or a significant interest in the Company. The narrow circumstances under which the Board may respond to alternative proposals and the Company’s inability to terminate the Merger Agreement if it accepts a superior proposal fail to provide an effective “fiduciary out” under the Merger Agreement.

81. Accordingly, Plaintiff seeks injunctive and other equitable relief to prevent the irreparable injury that the Company’s stockholders will continue to suffer absent judicial intervention. In the event that the Proposed Transaction is consummated, Plaintiff seeks to recover monetary damages from Defendants for their breaches of fiduciary duties or their aiding and abetting of such breaches.

Management Stands to Receive Financial Windfalls from the Proposed Transaction

82. As of December 13, 2014, MicroFinancial’s executive officers and directors beneficially owned, in the aggregate, 5,709,083 shares of MicroFinancial common stock. Once tendered in favor of the Proposed Transaction, MicroFinancial’s executive officers and directors will receive an aggregate of approximately $58,232,647 in cash.

83. Additionally, as a result of the Proposed Transaction, Company stock options and restricted shares will no longer be subject to their restrictions and will become fully redeemable for the stated Merger Consideration, thus resulting in a substantial financial boon for senior management that would not exist had the Company continued as an independent entity. As of December 13, 2014, MicroFinancial’s executive officers held vested options to purchase an aggregate of 433,028 shares of MicroFinancial common stock:

Name	Number of Shares Subject to Vested Stock Options (#)	Cash Consideration for Vested Stock Options ($)		Number of Shares Subject to Unvested Stock Options (#)	Cash Consideration for Unvested Stock Options ($)	Restricted Stock Units (#)	Total Value of Restricted Stock Units ($)(1)
Richard F. Latour	188,376	$	1,173,856	—	—	61,176	$	666,822
James R. Jackson, Jr.	112,317	$	735,330	—	—	32,705	$	357,221
Steven J. LaCreta	68,179	$	458,314	—	—	18,413	$	201,383
Stephen J. Constantino	64,156	$	437,192	—	—	17,945	$	196,272

(1) Amounts in this column are inclusive of accrued dividends of $842,827 (Mr. Latour), $23,630 (Mr. Jackson), $13,570 (Mr. LaCreta) and $13,233 (Mr. Constantino) which become payable upon vesting of the restricted stock units, representing dividends on underlying shares since the grant date, and assume a single quarterly dividend of $0.08 per share payable prior to the Acceptance Time as contemplated under the Mercer Agreement. Declaration of such a dividend remains subject to the discretion of the MicroFinancial Board.

84. MicroFinancial’s executive officers and directors also stand to receive certain equity awards from the vesting of restricted stock units:

Name	Time-Based Vesting RSUs (#)	Performance-Based Vesting RSUs (#)	Value at Merger Price ($)
Richard F. Latour	7,228	7,228	$	147,451
James R. Jackson, Jr.	4,908	2,454	75,092
Steven J. LaCreta	3,263	816	41,606
Stephen J. Constantino	3,150	787	40,157

85. As illustrated below, the golden parachute awards for the executive officers of MicroFinancial are sizeable:

	Golden Parachute Compensation(1)
Name	Cash($)(2)	Equity($)(3)	Perquisites/ Benefits($)(4)	Tax Reimbursement ($)(5)	Total ($)
Richard F. Latour	1,117,459	1,989,286	203,595	749,964	4,060,304
James R. Jackson, Jr.	374,115	1,168,233	31,270	—	1,573,618
Steven J. LaCreta	248,474	701,629	31,270	—	981,373
Stephen J. Constantino	240,056	673,936	31,270	—	945,262

86. MicroFinancial has also entered into employment agreements with each of its executive officers. With respect to Defendant Latour, upon a change-in-control of MicroFinancial, Latour will receive severance payments equal to three times his highest base salary during the employment period; a prorated payment of his base salary to the date of

termination and a prorated percentage of the annual bonus amount paid to him for the prior year; his outstanding stock options and other equity awards will remain outstanding, without termination; and he will receive a continuation of health and disability benefits. With respect to the remainder of senior management—Jackson, LaCreta and Constantino—each will receive an annual base salary of not less than twelve times the highest monthly base salary paid or payable to the executive within the twelve months preceding the change of control, as well as participation in bonus, incentive and benefits plans generally no less favorable than those provided or available prior to the change of control; continued health benefits; and each executive will receive, in a lump sum, the aggregate of the following amounts: (i) 150% of annual base salary; (ii) any other compensation or bonus previously deferred with any accrued interest or earnings on those amounts; and (iii) any accrued vacation pay.

87. Additionally, Defendant Latour, Jackson and LaCreta have agreed not to tender their shares of MicroFinancial in the Tender Offer, but have agreed to contribute certain of the shares to Fortress in exchange for limited partnership interests of Fortress. Shares of MicroFinancial common stock owned by Defendant Latour, Jackson and LaCreta that are not contributed to Fortress will not be tendered in the Tender Offer, but will be converted into the right to receive the merger consideration under the Merger Agreement.

88. Finally, as agreed to in their Employment Agreements, Defendant Latour, Jackson and LaCreta will continue on in their lucrative positions with the combined company. Each Employment Agreement will become effective upon the completion of the Proposed Transaction for a term of one year and will automatically renew upon each succeeding anniversary of the closing. Defendant Latour will receive an initial base salary of $368,639, with annual increases; Jackson’s initial base salary will be $250,327; and LaCreta’s initial base salary will be $166,419.

Each continuing executive will be eligible to participate in an annual bonus program, with the following bonus awards: Defendant Latour’s agreement sets his annual bonus at 80% of his annual salary for 2015 and 120% of his annual salary thereafter; Jackson’s agreement sets his target annual bonus at 40% of his annual salary for 2015 and 60% of his annual salary thereafter; and LaCreta’s agreement sets his target annual bonus at 25% of his annual salary for 2015 and 37.5% of his annual salary thereafter. Moreover, in lieu of the Company’s current discretionary bonus plan, pursuant to the Employment Agreements each continuing executive will receive quarterly payments during 2015 of $41,454 for Defendant Latour, $17,766 for Jackson, and $8,883 for LaCreta. Each executive will also receive “profits interests” for up to 12% of the fully diluted, outstanding equity of Fortress.

The Recommendation Statement Omits Material Information

89. In order to secure shareholder approval of this unfair deal, on December 19, 2014, the Recommendation Statement was filed with the SEC, which includes materially misleading and incomplete statements in connection with the Proposed Transaction. Compounding the defective sales process utilized by the Individual Defendants, the Recommendation Statement fails to provide the Company’s stockholders with material information and/or omits material information thereby precluding the stockholders from making a fully informed decision regarding the upcoming vote on the Proposed Transaction.

90. The Registration Statement fails to address the misstatements and omissions raised by Plaintiff herein.

91. The omitted information described herein, if and when disclosed, would significantly alter the totality of information available for consideration by the average MicroFinancial shareholder. Specifically, the Recommendation Statement fails to provide the Company’s shareholders with material information and/or provides materially misleading

information regarding: (i) the process leading to the Merger; (ii) the financial analyses performed by MicroFinancial’s financial advisor, Berenson; and (iii) the Company’s financial projections. As such, if MicroFinancial shareholders vote based upon the inadequate Recommendation Statement, they will be irreparably harmed.

92. In particular, the Recommendation Statement fails to fully and fairly disclose the following material information about the process that led to the Merger:

a. Whether the Company was looking to be acquired when it received two unsolicited inquiries from investment banks on January 31, 2012, the basis for selecting the Initial Banker as its advisor, and the Initial Banker’s identity;

b. The basis for concluding, around late September 2012, to continue the Company’s internal growth strategies and to terminate its engagement of Initial Banker, but then engaging in discussions with Berenson only one month later regarding strategic alternatives;

c. Whether Berenson was one of the financial advisors the Company reached out to in January 2012, the basis for engaging Berenson in February 2014, and whether the Company considered any other financial advisors at that time;

d. The criteria used to select the 61 parties contacted by Berenson in June and July of 2014, who derived the list of parties, and the number of parties on the list that were previously contacted by the Initial Banker;

e. Whether the Company received any indications of interest in August 2014 that it did not deem “credible” and, if so, what the indications were;

f. Whether the Company followed up with the “three others” who submitted indications of interest in August of 2014 for $7.72 per share in cash, $9.00 per share with half in stock and half in cash, and an offer to purchase the shares from the Company’s three largest shareholders, and the reason(s) for not following up with any of the three parties, or the nature of any discussions that resulted from following up with them;

g. The nature of discussions held between Fortress and the Company in September of 2014 regarding continuing employment of MicroFinancial’s management team;

h. The basis for Party B and Party C’s withdrawal from the process in October 2014; and

i. Who the “other prospective purchasers” discussed on October 16, 2014 were and the status of their interest in the Company at that time.

93. The Recommendation Statement also fails to disclose material information about the financial analyses performed by Berenson in rendering its fairness opinion.

94. Specifically, the description of Berenson’ s Comparable Companies Analysis on pages 31-32 of the Recommendation Statement is materially misleading and deficient because it fails to disclose the multiples observed for each comparable company or, at a minimum, the high and low, in addition to the mean and median;

95. The description of Berenson’s Selected Transactions Analysis on pages 32-33 of the Recommendation Statement is materially misleading and deficient because it fails to disclose the multiples observed for each comparable company or, at a minimum, the high and low, in addition to the mean and median:

96. The description of Berenson’s Discounted Cash Flow Analysis on page 33 of the Recommendation Statement is materially misleading and deficient because it fails to disclose: (a) the basis for the discount rate range of 12.0%-16.0%; (b) the basis for the cost of equity of 13.2%; (c) the basis for the exit multiples of 12.0x-16.0x; (d) how stock-based compensation was treated; and (e) the weighted average cost of capital calculation.

97. Additionally, the Recommendation Statement fails provide complete and accurate financial projections and information related thereto, as created by Company management.

98. The information provided on pages 34-36 of the Recommendation Statement is materially misleading and deficient because it fails to disclose: unlevered free cash flows; NOLs: taxes or tax rates; gross profit; EBITDA; Capital expenditures; changes in net working capital; Stock-based compensation expense; and any other adjustments to unlevered free cash flow.

CLAIMS FOR RELIEF

COUNT I
Breach of Fiduciary Duties
(Against the Individual Defendants)

99. Plaintiff repeats and realleges each and every allegation contained above as if fully set forth herein.

100. The Individual Defendants’ recommendation of the Proposed Transaction will result in change of control of the Company, which imposes heightened fiduciary responsibilities to maximize MicroFinancial’s value for the benefit of the shareholders and requires enhanced scrutiny by the Court.

101. The Individual Defendants have violated their fiduciary duties of care, loyalty, candor, and food faith owed to public shareholders of MicroFinancial.

102. By the acts, transactions, and courses of conduct alleged herein, the Individual Defendants are attempting to deprive unfairly Plaintiff and other members of the Class of the true value of their investment in MicroFinancial, or have otherwise failed to secure the best price reasonable under the circumstances for Plaintiff and other members of the Class.

103. As demonstrated by the allegations above, the Individual Defendants failed to exercise the care required, and breached their duties of loyalty, good faith, candor and independence owed to the shareholders of MicroFinancial because, among other reasons, they failed to take steps to reasonably inform themselves of the value of the Company by conducting a sufficient market check, they failed to obtain the maximized value of the Company for MicroFinancial’s shareholders, and they failed to fully advise MicroFinancial’s shareholders of the material information they need to cast a fully-informed vote. The Individual Defendants dominate and control the business and corporate affairs of MicroFinancial and are in possession of private corporate information concerning MicroFinancial’s assets, business and future

prospects. Thus, there exists an imbalance and disparity of knowledge and economic power between them and the public shareholders of MicroFinancial which makes it inherently unfair for the Individual Defendants to benefit their own interests to the exclusion of obtaining maximized shareholder and constituent value.

104. As a result of the Individual Defendants’ breaches of their fiduciary duties, Plaintiff and the Class will suffer irreparable injury in that they have not received and will not receive their fair portion of the value of MicroFinancial’s assets and will be prevented from benefiting from a value-maximizing transaction.

105. Unless enjoined by this Court, the Individual Defendants will continue to breach their fiduciary duties owed to Plaintiff and the Class, and may consummate the Proposed Transaction, to the irreparable harm of the Class.

106. Moreover, the Individual Defendants have failed to fully disclose to Plaintiff and the Class all material information necessary to make an informed decision regarding the Proposed Transaction.

107. By reason of the foregoing acts, practices, and course of conduct, the Individual Defendants have failed to exercise ordinary care and diligence in the exercise of their fiduciary obligations towards Plaintiff and the other members of the Class.

108. As a result of the actions of the Individual Defendants, Plaintiff and the Class will suffer irreparable injury in that they have not and will not receive their fair portion of the value of MicroFinancial’s assets and businesses and have been and will be prevented from obtaining a fair price for their common stock.

109. Unless the Individual Defendants are enjoined by the Court, they will continue to breach their fiduciary duties owed to Plaintiff and the members of the Class, all to the irreparable harm of the members of the Class.

110. Plaintiff and the members of the Class have no adequate remedy at law. Only through the exercise of this Court’s equitable powers can Plaintiff and the Class be fully protected from the immediate and irreparable injury which the Individual Defendants’ actions threaten to inflict.

COUNT II
Aiding and Abetting
(Against the Acquisition Defendants)

111. Plaintiff repeats and realleges each and every allegation contained above as if fully set forth herein

112. As alleged in more detail above, Acquisition Defendants are well aware that the Individual Defendants have not sought, and are not seeking, to obtain the best available transaction for the Company’s public stockholders.

113. Indeed, Acquisition Defendants have caused the Board to accept inadequate consideration, has extracted unreasonably preclusive deal protection terms, and has otherwise aided and abetted the Individual Defendants’ breaches of fiduciary duties.

114. As a result, Plaintiff and the Class members are being harmed.

115. Plaintiff and the Class have no adequate remedy at law.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff demands judgment against Defendants jointly and severally, as follows:

(A) Declaring this action to be a proper class action and certifying Plaintiff as the Class representative and Plaintiff’s counsel as Class counsel;

(B) Declaring that the Individual Defendants have breached their fiduciary duties;

(C) Declaring that the Merger Agreement and Proposed Transaction were entered into in breach of the Individual Defendants’ fiduciary duties and is therefore unlawful and unenforceable;

(D) Preliminarily and permanently enjoining Defendants and all those acting in concert with them from consummating the Proposed Transaction or performing the same until such time, as any, that the Individual Defendants have adequately undertaken all appropriate and available methods to maximize shareholder value;

(E) In the event that the Proposed Transaction is consummated prior to the entry of this Court’s final judgment, rescinding the Merger Agreement and Proposed Transaction, and/or awarding actual and punitive damages, with pre- and post-judgment interest to Plaintiff and the other members of the Class;

(F) Directing that Defendants account to Plaintiff and the other members of the Class for all damages caused by them and account for all profits and any special benefits obtained as a result of their breaches of their fiduciary duties;

(G) Awarding Plaintiff the costs of this action, including a reasonable allowance for the fees and expenses of Plaintiff’s attorneys and experts; and

(H) Granting Plaintiff and the other members of the Class such further relief as the Court deems just and proper.

Dated: December 23, 2014	Respectfully submitted


	/s/ Jason M. Leviton
	BLOCK & LEVITON LLP
	Jason M. Leviton (BBO# 678331)
	Mark A. Delaney (BBO# 652194)
	155 Federal Street
	Suite 1303
	Boston, MA 02110
	Tel: (617) 398-5600
	Fax: (617) 507-6020
	jason@blockesq.com
	mark@blockesq.com

	Counsel for Plaintiff

OF COUNSEL:

LEVI & KORSINSKY, LLP
Shannon L. Hopkins, Esq. (BBO# 657485)
Stephanie A. Bartone, Esq. (BBO# 684270)
733 Summer Street, Suite 304
Stamford, CT 06901
Tel: (212) 363-7500
Fax: (866) 367-6510