AMENDMENT NO. 2
              TO AMENDED AND RESTATED WAREHOUSING CREDIT AGREEMENT
                         (American Finance Group, Inc.)


         THIS  AMENDMENT  NO.  2 TO  AMENDED  AND  RESTATED  WAREHOUSING  CREDIT
AGREEMENT  dated as of June 8, 1998 (the  "Amendment"),  is entered  into by and
among AMERICAN FINANCE GROUP, INC., a Delaware corporation  ("Borrower"),  FIRST
UNION NATIONAL BANK ("FUNB"),  BANK OF MONTREAL ("BMO") and each other financial
institution  which may hereafter execute and deliver an instrument of assignment
pursuant to Section 11.10 of the Credit  Agreement  (as defined  below) (any one
financial institution individually, a "Lend ," and collectively, "Lenders"), and
FUNB, as agent on behalf of Lenders (not in its individual capacity,  but solely
as agent, "Agent").  Capitalized terms used herein without definition shall have
the same meanings herein as given to them in the Credit Agreement.

                                    RECITALS

A.   Borrower,  Lenders and Agent have  entered  into that  Amended and Restated
     Warehousing  Credit  Agreement  dated as of December 2, 1997, as amended by
     that certain  Amendment  No. 1 to Amended and Restated  Warehousing  Credit
     Agreement  dated as of June 1,  1998 (as the same may from  time to time be
     further amended,  the "Credit  Agreement"),  pursuant to which Lenders have
     agreed to extend and make available to Borrower certain advances of money.

B.   Borrower  desires  that  Lenders  and Agent amend the Credit  Agreement  to
     increase the  Commitments  set forth on Schedule A to the Credit  Agreement
     from  $55,000,000 to $60,000,000  for a period of thirty (30) days from the
     date first written above.

C.   Subject to the  representations  and  warranties  of Borrower  and upon the
     terms and  conditions  set forth in this  Amendment,  Lenders and Agent are
     willing to so amend the Credit Agreement.

                                    AGREEMENT

         NOW,  THEREFORE,   in  consideration  of  the  foregoing  Recitals  and
intending to be legally bound, the parties hereto agree as follows:

Section 1. Amendments.

     1.1  Commitment. The definition of "Commitment" set forth in Section 1.1 of
          the Credit Agreement is amended by deleting Schedule A in its entirety
          and replacing such schedule with a new Schedule A in the form attached
          to this Amendment as Attachment I.

2. LIMITATIONS ON AMENDMENTS.

     2.1  The  amendments  set forth in Section 1, above,  are effective for the
          purposes  set forth  herein and shall be limited  precisely as written
          and shall not be deemed to (i) be a consent to any  amendment,  waiver
          or modification of any other term or condition of any Loan Document or
          (ii)  otherwise  prejudice  any right or remedy which Lenders or Agent
          may now have or may have in the future under or in connection with any
          Loan Document.

     2.2  This  Amendment  shall be construed in connection  with and as part of
          the  Loan  Documents  and  all  terms,  conditions,   representations,
          warranties,  covenants and agreements set forth in the Loan Documents,
          except as herein amended,  are hereby ratified and confirmed and shall
          remain in full force and effect.

3. REPRESENTATIONS AND WARRANTIES. In order to induce Lenders and Agent to enter
into this Amendment,  Borrower  represents and warrants to each Lender and Agent
as follows:

     (a)  Immediately   after   giving   effect  to  this   Amendment   (i)  the
          representations and warranties  contained in the Loan Documents (other
          than those which expressly speak as of a different date which shall be
          true as of such different date) are true, accurate and complete in all
          material  respects as of the date hereof and (ii) no Event of Default,
          or event which constitutes a Potential Event of Default,  has occurred
          and is continuing;

     (b)  Borrower has the corporate  power and authority to execute and deliver
          this  Amendment  and to  perform  its  Obligations  under  the  Credit
          Agreement,  as amended by this  Amendment,  and each of the other Loan
          Documents to which it is a party;

     (c)  The  certificate  of  incorporation,  bylaws and other  organizational
          documents  of  Borrower  delivered  to  each  Lender  as  a  condition
          precedent  to the  effectiveness  of the  Credit  Agreement  are true,
          accurate  and  complete  and have not been  amended,  supplemented  or
          restated and are and continue to be in full force and effect;

     (d)  The  execution  and  delivery by Borrower  of this  Amendment  and the
          performance by Borrower of its Obligations under the Credit Agreement,
          as amended by this Amendment,  and each of the other Loan Documents to
          which  it is a  party  have  been  duly  authorized  by all  necessary
          corporate action on the part of Borrower;

     (e)  The  execution  and  delivery by Borrower  of this  Amendment  and the
          performance by Borrower of its respective Obligations under the Credit
          Agreement,  as amended by this  Amendment,  and each of the other Loan
          Documents  to which it is a party do not and will not  contravene  (i)
          any law or  regulation  binding  on or  affecting  Borrower,  (ii) the
          certificate  of  incorporation,   bylaws,   or  other   organizational
          documents  of  Borrower,  (iii) any order,  judgment  or decree of any
          court  or  other   governmental  or  public  body  or  authority,   or
          subdivision  thereof,  binding  on  Borrower  or (iv) any  contractual
          restriction binding on or affecting Borrower;

     (f)  The  execution  and  delivery by Borrower  of this  Amendment  and the
          performance by Borrower of its Obligations under the Credit Agreement,
          as amended by this Amendment,  and each of the other Loan Documents to
          which it is a party  do not  require  any  order,  consent,  approval,
          license,  authorization  or  validation  of, or filing,  recording  or
          registration  with, or exemption by any governmental or public body or
          authority,  or  subdivision  thereof,  binding on Borrower,  except as
          already has been obtained or made; and

     (g)  This Amendment has been duly executed and delivered by Borrower and is
          the  binding  Obligation  of  Borrower,   enforceable  against  it  in
          accordance  with  its  terms,  except  as such  enforceability  may be
          limited  by  bankruptcy,  insolvency,   reorganization,   liquidation,
          moratorium or other similar laws of general  application and equitable
          principles relating to or affecting creditors' rights.

4.  REAFFIRMATION.  Borrower hereby  reaffirms its  Obligations  under each Loan
Document to which it is a party.

5.  EFFECTIVENESS.  This Amendment shall become effective upon the last to occur
of:

     (a)  The  execution  and  delivery of this  Amendment,  whether the same or
          different copies, by each of Borrower, Lenders and Agent.

     (b)  The  execution  and delivery by Borrower to FUNB of a promissory  note
          substantially  in the form of Exhibit A hereto which  promissory  note
          shall be a "Note" under and as defined in the Credit Agreement.

     (c)  The execution and delivery by PLMI to Agent of the  Acknowledgment  of
          Amendment and Reaffirmation of Guaranty attached to this Amendment.

     (d)  The  delivery to Agent of a  certificate  of  secretary  or  assistant
          secretary  of  Borrower  and PLMI (i)  certifying  that the  certified
          copies of the certificate of  incorporation  and bylaws of Borrower or
          PLMI,  as the case may be,  delivered to Agent on the Closing Date are
          true and  accurate  and  remain in full  force and effect and have not
          been amended since the Closing Date,  (ii)  attaching true and correct
          copies of all  resolutions  of the board of  directors  of Borrower or
          PLMI, as the case may be, duly adopted by such board,  and relating to
          the  authorization,   execution,  delivery  and  performance  of  this
          Amendment  and  the  Credit   Agreement  as  amended  thereby  or  the
          Acknowledgement  of Amendment and  Reaffirmation of Guaranty and (iii)
          setting forth the name, title and signatures of the authorized signers
          for Borrower or PLMI, as the case may be.

     (e)  The delivery to Agent of an originally  executed  favorable opinion of
          counsel on behalf of Borrower  and  Guarantor,  in form and  substance
          satisfactory to Lenders,  dated as of the date hereof and addressed to
          Lenders,  together with copies of any officer's  certificate  or legal
          opinion  of other  counsel  or law firm  specifically  identified  and
          expressly relied upon by such counsel.

     (f)  The delivery to Agent of a  certificate,  dated as of the date hereof,
          of the Chief Financial Officer or Corporate  Controller of Borrower to
          the  effect  that  the  representations  and  warranties  of  Borrower
          contained in Section 4 of the Credit  Agreement  and in the other Loan
          Documents are true,  accurate and complete in all material respects as
          of the date hereof as though made on such date (other than those which
          expressly  speak as of a different date which shall be true as of such
          different  date) and no Event of Default or Potential Event of Default
          has occurred and is continuing.

6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.

SECTION 7. CLAIMS,  COUNTERCLAIMS,  DEFENSES, RIGHTS OF SET-OFF. BORROWER HEREBY
REPRESENTS AND WARRANTS TO AGENT AND EACH LENDER THAT IT HAS NO KNOWLEDGE OF ANY
FACTS THAT WOULD SUPPORT A CLAIM, COUNTERCLAIM, DEFENSE OR RIGHT OF SET-OFF.

8. COUNTERPARTS. This Amendment may be signed in any number of counterparts, and
by different parties hereto in separate counterparts, with the same effect as if
the  signatures  to each such  counterpart  were upon a single  instrument.  All
counterparts shall be deemed an original of this Amendment.























         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first written above.

BORROWER                     AMERICAN FINANCE GROUP, INC.


                             By:
                                 Richard K. Brock
                                 Vice President & Corporate Controller


LENDERS                      FIRST UNION NATIONAL BANK

                             By:
                             Printed name:
                             Title:

                             BANK OF MONTREAL

                             By:
                             Printed name:
                             Title:



AGENT                        FIRST UNION NATIONAL BANK , as Agent

                             By:
                             Printed name:
                             Title:

By

Printed Name:

Title:



<PAGE>




                                  ATTACHMENT I

                               Revised Schedule A


<PAGE>




                                   SCHEDULE A

                                   COMMITMENTS


For the period from and including June 8, 1998 through July 8, 1998:

       LENDER                      COMMITMENT                PRO RATA SHARE

First Union National Bank          $45,000,000                    75%


Bank of Montreal                   $15,000,000                    25%



For the  period  from and  including  June 1,  1998  through  August  30,  1998,
excluding the period from June 8, 1998 through July 8, 1998:

        LENDER                     COMMITMENT                 PRO RATA SHARE

First Union National Bank          $40,000,000                     72.73%


Bank of Montreal                   $15,000,000                     27.27%



At all other times:

        LENDER                      COMMITMENT                  PRO RATA SHARE

First Union National Bank           $35,000,000                       70%


Bank of Montreal                    $15,000,000                       30%







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                                    EXHIBIT A

                            REVOLVING PROMISSORY NOTE
                           (First Union National Bank)

$45,000,000.00                                       San Francisco, California
                                                     Date:  June 8, 1998


         AMERICAN FINANCE GROUP, INC., a Delaware  corporation (the "Borrower"),
FOR VALUE RECEIVED, hereby unconditionally promises to pay to the order of First
Union National Bank  ("FUNB"),  in lawful money of the United States of America,
the aggregate principal amount of FUNB's Pro Rata Share of all Loans outstanding
under the Credit  Agreement  referred to below,  payable in the amounts,  on the
dates and in the manner set forth below.

         This  revolving  promissory  note  (the  "Note")  is one  of the  Notes
referred to in that certain Amended and Restated  Warehousing  Credit  Agreement
dated as of  December 2, 1997,  as amended by that  certain  Amendment  No. 1 to
Amended and Restated  Warehousing  Credit Agreement dated as of June 1, 1998 and
by that  certain  Amendment  No. 2 to Amended and  Restated  Warehousing  Credit
Agreement  dated as of even date  herewith (as the same may from time to time be
further amended,  modified,  supplemented,  renewed,  extended or restated,  the
"Credit  Agreement") by and among the Borrower,  FUNB, solely in its capacity as
agent (the  "Agent")  for FUNB and Bank of  Montreal  and such  other  financial
institutions  as shall from time to time  become  "Lenders"  pursuant to Section
11.10 of the Credit  Agreement  (such entities,  together with their  respective
successors and assigns being collectively  referred to herein as the "Lenders"),
and the Lenders.  All  capitalized  terms used but not defined herein shall have
the same meaning as given to them in the Credit Agreement.

     1.   Principal Payments.  Subject to the terms and conditions of the Credit
          Agreement,  the entire  principal amount  outstanding  under each Loan
          shall be due and  payable on the  Maturity  Date with  respect to such
          Loan,  with any and all  unpaid  and not  previously  due and  payable
          principal  amounts  under  the  Loans  being  due and  payable  on the
          Commitment Termination Date.

     2.   Interest  Rate. The Borrower  further  promises to pay interest on the
          sum of the daily unpaid principal  balance of all Loans outstanding on
          each day in lawful  money of the United  States of  America,  from the
          Closing Date until all such  principal  amounts shall have been repaid
          in full, which interest shall be payable at the rates per annum and on
          the dates determined pursuant to the Credit Agreement.

     3.   Place of Payment.  All amounts  payable  hereunder shall be payable to
          the Agent,  on behalf of FUNB,  at the office of First Union  National
          Bank,  One First Union Center,  301 South College  Street,  Charlotte,
          North Carolina 28288, Attention: Elisha Sabido, or such other place of
          payment as may be specified by the Agent in writing.

     4.   Application of Payments; Acceleration.  Payments on this Note shall be
          applied in the manner  set forth in the Credit  Agreement.  The Credit
          Agreement contains  provisions for acceleration of the maturity of the
          Loans upon the  occurrence of certain  stated events and also provides
          for  mandatory  and optional  prepayments  of  principal  prior to the
          stated maturity on the terms and conditions therein specified.

          Each Advance made by FUNB to the Borrower constituting FUNB's Pro Rata
Share of a Loan  pursuant to the Credit  Agreement  shall be recorded by FUNB on
its  books  and  records.  The  failure  of FUNB to record  any  Advance  or any
repayment or prepayment  made on account of the principal  balance thereof shall
not limit or otherwise  affect the  obligations  of the Borrower under this Note
and under the Credit Agreement to pay the principal,  interest and other amounts
due and payable hereunder and thereunder.

     5.   Default.  The  Borrower's  failure to pay timely any of the  principal
          amount due under this Note or any accrued  interest  or other  amounts
          due under this Note on or within five (5) calendar days after the date
          the same becomes due and payable shall constitute a default under this
          Note.  Upon  the  occurrence  of a  default  hereunder  or an Event of
          Default  under the Credit  Agreement,  all unpaid  principal,  accrued
          interest and other amounts  owing  hereunder  shall,  at the option of
          Required  Lenders,  be immediately  collectible by the Lenders and the
          Agent pursuant to the Credit Agreement and applicable law.

     6.   Waivers.  The  Borrower  waives  presentment  and demand for  payment,
          notice of  dishonor,  protest and notice of protest of this Note,  and
          shall pay all costs of collection when incurred by or on behalf of the
          Lenders,  including,  without limitation,  reasonable attorneys' fees,
          costs and other expenses as provided in the Credit Agreement.

     7.   Governing  Law.  This Note shall be  governed  by, and  construed  and
          enforced in accordance  with, the laws of the State of North Carolina,
          excluding conflict of laws principles that would cause the application
          of laws of any other jurisdiction.

     8.   Successors and Assigns. The provisions of this Note shall inure to the
          benefit of and be binding on any  successor  to the Borrower and shall
          extend to any holder hereof.


BORROWER                             AMERICAN FINANCE GROUP, INC.,
                                     a Delaware corporation


                                     By
                                         Richard K. Brock
                                         Vice President & Corporate Controller




<PAGE>



                          ACKNOWLEDGEMENT OF AMENDMENT
                          AND REAFFIRMATION OF GUARANTY
                                   (PLMI/AFG)


     SECTION  1.  PLM  International,  Inc.  ("PLMI")  hereby  acknowledges  and
confirms  that it has reviewed and  approved  the terms and  conditions  of this
Amendment  No.  2  to  Amended  and  Restated   Warehousing   Credit   Agreement
("Amendment").

     SECTION 2. PLMI  hereby  consents  to this  Amendment  and agrees  that its
Guaranty  of the  Obligations  of  Borrower  under the  Credit  Agreement  shall
continue in full force and effect,  shall be valid and enforceable and shall not
be impaired or  otherwise  affected by the  execution  of this  Amendment or any
other document or instrument delivered in connection herewith.

     SECTION 3. PLMI  represents and warrants that,  after giving effect to this
Amendment,  all  representations  and  warranties  contained in its Guaranty are
true, accurate and complete as if made on the date hereof.

GUARANTOR                  PLM INTERNATIONAL, INC.


                           By
                               Richard K. Brock
                               Vice President & Corporate Controller





<PAGE>