RETENTION AGREEMENT


          This  RETENTION  AGREEMENT  ("Agreement")  is made and entered into on
this ______ day of April, 1999, by and between American Finance Group, Inc. (the
"Company") and ("Employee"). --------------------------------------------------

          WHEREAS,  the Company's  sole  shareholder,  PLM  International,  Inc.
("PLMI"),  recently  announced  publicly that its Board of Directors has engaged
Legg Mason Wood Walker,  Incorporated to explore strategic  alternatives for the
Company; and

         WHEREAS,  Employee is an "employee at will", and as such the Company is
not legally  obligated to continue  his/her  employment  for any fixed period of
time; and

         WHEREAS,  the  Company  desires  to assure  itself of the  services  of
Employee while such alternatives are explored and, if a change in control of the
Company  should  occur,  for a  period  of time  after  such  transfer  has been
consummated; and

         WHEREAS,  as an  additional  inducement  for  Employee to remain in the
employ of the  Company  both  before and after a change in control  transaction,
this  Agreement  provides  certain  incentives  for  Employee  to  remain in the
Company's  employ  during  such period and for  severance  benefits in the event
Employee's  employment is terminated  by the Company  without cause  following a
change in control transaction;

         NOW,  THEREFORE,  in  consideration  of the above premises and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Employee agree as follows:

          1. Retention  Bonus. The Company agrees to pay to Employee a retention
bonus under either of the following circumstances:

          (a)  In the absence of a Change in Control,  as  hereinafter  defined,
               during the period beginning on the date hereof and ending January
               3, 2000,  Employee  shall have  remained  employed by the Company
               continuously throughout such period; or

          (b)  In the event a Change in  Control  does  occur  during the period
               beginning on the date hereof and ending January 3, 2000, Employee
               shall have  remained  employed  by the  Company or its  successor
               continuously  throughout  the  period of six  consecutive  months
               beginning on the date of the Change in Control.

          The amount of the  retention  bonus payable under this Section 1 shall
be _____________  Dollars ($ ). The retention bonus shall be paid to Employee in
cash within  thirty  (30) days after the date on which  Employee  satisfies  the
conditions  of  either  Section  1(a)  or  Section  1(b)  above,   whichever  is
applicable.  No amount paid to Employee as a retention  bonus hereunder shall be
deemed to be in lieu of a bonus or incentive  compensation,  if any,  payable to
Employee  pursuant to any other  incentive  compensation  plan in which Employee
participates.

          2.       Severance Benefits.

          2.1  Termination  by the Company Other Than for Cause.  If the Company
terminates  Employee's  employment  hereunder  other  than for  Cause,  death or
disability  at any time  within  six (6)  months  following  a Change in Control
occurring  during the term of this Agreement,  the Company shall pay to Employee
the  following  severance  benefits  so long  as,  upon the  Company's  request,
Employee  enters  into a  Release  (the  "Release")  substantially  in the  form
attached  hereto as  Exhibit  A, and such  Release  is not  revoked  before  the
"Effective Date," as defined in the Release:

               (a)  The Company  shall pay to Employee on the  Effective  Date a
                    lump  sum  amount  equal to ( ) months  of  Employee's  Base
                    Salary  [or draw] at the time the notice of  termination  is
                    given, less customary payroll deductions; and

               (b)  Employee   shall   continue  to   participate  in  all  life
                    insurance,  medical,  health,  dental and disability  plans,
                    programs  or  arrangements   ("Insurance  Plans")  in  which
                    Employee  participated  immediately  prior  to the  date  of
                    termination  on the  same  terms  as  Employee  participated
                    immediately prior to the date of termination for the shorter
                    period of (i) months  from the date of  termination  or (ii)
                    Employee's  commencement  of full time employment with a new
                    company; provided that Employee's continued participation is
                    possible  under the  general  terms and  provisions  of such
                    plans  and  programs  and  Employee   will  continue  to  be
                    obligated  to pay the same  employee  portion of any premium
                    and any deductible and/or  co-payments  associated with such
                    Insurance  Plans as was  required  immediately  prior to the
                    date of  termination,  with  Employee's  right to  continued
                    group benefits after any period covered by the Company to be
                    determined in accordance with federal and state law.

          2.2 Other Termination.  If Employee's  employment is terminated by the
Company for Cause, death or disability or is voluntarily terminated by Employee,
no benefits will be payable under this Section 2.

          3. Definitions. As used in this Agreement:

          3.1  "Cause"  shall  mean:  (a) the  continued  failure by Employee to
perform his/her job functions or to abide by the Company's  policies (other than
any  failure  resulting  from  Employee's  incapacity  due to physical or mental
illness), which has not been cured within ten (10) days after written demand for
substantial  performance  is delivered by the Company to Employee,  which demand
specifically  identifies  the  manner in which  Employee  has not  substantially
performed  his/her job  functions or followed  the  Company's  policies;  (b) an
intentional   act  or  omission  by  Employee   which  is,  in  the   reasonable
determination of the Company, materially injurious to the Company, monetarily or
otherwise;  (c) the  conviction of Employee of, or his /her admission or plea of
nolo  contendere  to, a crime  involving  an act of moral  turpitude  which is a
felony or which  results or is intended to result,  directly or  indirectly,  in
gain or  personal  enrichment  of  Employee,  relatives  of  Employee,  or their
affiliates  at the expense of the Company;  or (d) the breach by Employee of any
material  covenant of this  Agreement  which has not been cured  within ten (10)
days after  written  notice  detailing  such  breach is given by the  Company to
Employee.

          3.2 "Change in Control"  shall mean the  occurrence  of any one of the
following  events:  (a) any person or group (a "Person"),  within the meaning of
Sections 13(d) or 14(d) of the Securities  Exchange Act of 1934, as amended (the
"Exchange Act"), acquiring "beneficial ownership" ("Beneficial  Ownership"),  as
defined in Rule 13d-3  under the  Exchange  Act,  of  securities  of the Company
representing  more than fifty percent (50%) of the combined  voting power of the
Company's then outstanding securities; provided, however, in determining whether
a Change in Control has  occurred,  voting  securities  which are  acquired in a
"Non-Control  Acquisition"  (as  hereinafter  defined)  shall not  constitute an
acquisition which would cause a Change in Control.  A "Non-Control  Acquisition"
shall mean an  acquisition  by (i) an employee  benefit plan (or trust forming a
part thereof)  maintained by (1) PLMI, (2) the Company or (3) any corporation or
other  Person of which a  majority  of its  voting  power or its  voting  equity
securities or equity interests is owned, directly or indirectly,  by PLMI or the
Company (for purposes of this definition,  a "Subsidiary"),  (ii) the Company or
its  Subsidiaries,  or  (iii)  any  Person  in  connection  with  a  Non-Control
Transaction"  (as  hereinafter   defined);   (b)  a  merger,   consolidation  or
reorganization  (collectively,  a "Transaction")  involving the Company , unless
such  Transaction is a "Non-Control  Transaction."  A "Non-Control  Transaction"
shall mean a Transaction  involving the Company where:  (i) the  stockholders of
the Company  immediately  before such Transaction  own,  directly or indirectly,
immediately  following  such  Transaction,  at least fifty  percent (50%) of the
combined  voting power of the outstanding  voting  securities of the corporation
resulting from such Transaction  (the "Surviving  Corporation") in substantially
the same proportion as their  ownership of the voting  securities of the Company
immediately  before  such  Transaction,  or (ii) no  Person,  other than (1) the
Company,  (2) PLMI, (3 any Subsidiary,  or (4) any employee benefit plan (or any
trust forming a part thereof)  maintained the Company,  PLMI, or any Subsidiary,
has Beneficial Ownership of more than fifty percent (50%) of the combined voting
power of the Surviving Corporation's then outstanding voting securities;  or (c)
the sale or other  disposition of all or substantially  all of the assets of the
Company to any Person or Persons  (other than a transfer to PLMI or a Subsidiary
of the Company or PLMI For purposes of this Agreement,  an event  constituting a
Change  in  Control  shall  be  deemed  to have  occurred  upon the  closing  or
consummation of such event.

          4. Successors; Binding Agreement.

               (a) The Company shall require any successors or assigns  (whether
direct or indirect by purchase,  merger,  consolidation  or otherwise) to all or
substantially  all of the  business  and/or  assets of the Company  expressly to
assume and agree to perform  this  Agreement  in the same manner and to the same
extent  that the Company  would be required to perform it if no such  succession
had taken  place,  and this  Agreement  shall  inure to the  benefit of any such
successor or assign.

               (b)  This  Agreement  shall  inure  to  the  benefit  of  and  be
enforceable  by  Employee's  executors,   administrators,   successors,   heirs,
distributes, devisees and legatees.

          5. Term.  This Agreement shall have a term beginning on the date first
written above and ending on June 30, 2000.

          6. Miscellaneous.

          6.1 The Company and Employee  hereby  acknowledge  and agree that they
have each been represented by independent counsel of their own choice throughout
all negotiations which preceded the execution of this Agreement. -

          6.2 Written  notices  required by this Agreement shall be delivered to
the  Company or  Employee in person or sent by  overnight  courier or  certified
mail, with a return receipt requested,  to the Company's  registered address and
to Employee's last shown address on the Company's records, respectively.  Notice
sent by certified  mail shall be deemed to be delivered two days after  mailing,
and all other notices shall be deemed to be delivered when received.

          6.3 This Agreement contains the full and complete understanding of the
parties  regarding the subject matter  contained herein and supersedes all prior
representations, promises, agreements and warranties, whether oral or written.

          6.4 This Agreement shall be governed by and  interpreted  according to
the laws of the Commonwealth of Massachusetts.

          6.5  The  captions  of the  various  sections  of this  Agreement  are
inserted only for  convenience  and shall not he  considered in construing  this
Agreement.

          6.6 This Agreement can be modified, amended or any of its terms waived
only writing signed by both parties.

          6.7 If any provision of this Agreement shall be held invalid,  illegal
or unenforceable, the remaining provisions of the Agreement shall remain in full
force and effect and the invalid,  illegal or  unenforceable  provision shall be
limited or eliminated  only to the extent  necessary to remove such  invalidity,
illegality or  unenforceability  in accordance  with the  applicable law at that
time.  Notwithstanding the foregoing  provision,  in the event that a payment is
made  pursuant to Section 2.1 and  Employee  has entered into a Release and such
Release is determined to be invalid, illegal or unenforceable,  Employee and the
Company shall negotiate in good faith and enter into a new release  covering the
released claims.

          6.8 No remedy made  available to either party by any of the provisions
of this  Agreement  is intended to be exclusive  of any other  remedy.  Each and
every remedy shall be cumulative  and shall be in addition to every other remedy
given hereunder as well as those remedies existing at law, in equity, by statute
or otherwise.

          6.9 Except for the  subject  matter  contained  herein,  the terms and
conditions of Employee's  employment with the Company remain unchanged.  Nothing
contained in this Agreement  shall give Employee the right to be retained in the
employ of the Company or any  affiliate of the Company or to interfere  with the
right of the Company to terminate Employee at any time for any reason.


          IN WITNESS WHEREOF, the parties have executed this document under seal
as of the date specified above.

                             THE COMPANY:
                             AMERICAN FINANCE GROUP, INC.



                              By:

                              Its:


                              ATTEST:

                              EMPLOYEE:

                              ATTEST:

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