PROMISSORY NOTE
                            FIRST UNION NATIONAL BANK


$5,000,000.00                                         San Francisco, California
                                                      July 15, 1998

         PLM INTERNATIONAL, INC., a Delaware corporation ("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 and in
immediately   available  funds,  the  principal  sum  of  Five  Million  Dollars
($5,000,000) or the aggregate  unpaid  principal  amount of all advances made to
Borrower by FUNB, whichever is less (each such advance being a "Loan"), together
with accrued and unpaid interest thereon, payable on the dates and in the manner
set forth below.  All amounts owed hereunder  shall be paid by Borrower in full,
free and clear of any deduction or withholding for taxes or otherwise.

1.  Principal.  The  outstanding  principal  amount  hereunder  shall be due and
payable in full on October  13, 1998 (the  "Maturity  Date").  Amounts  borrowed
hereunder may be repaid and, prior to the business day immediately preceding the
Maturity Date and subject to the applicable  terms and  conditions  precedent to
borrowings hereunder,  reborrowed. Each request for a Loan hereunder shall be in
the minimum dollar amount of One Hundred Thousand  Dollars  ($100,000) and shall
be requested by Borrower's  irrevocable written notice, in the form of a "Notice
of  Borrowing"  attached  hereto  as  Exhibit  A,  and  delivered  to  FUNB by a
responsible  officer of  Borrower  not later than 12:00 noon,  Charlotte,  North
Carolina  time, one (1) business day prior to the requested  funding date.  Each
request for a Loan hereunder shall  constitute a  reaffirmation  by Borrower and
the responsible officer of Borrower requesting the same that the representations
and  warranties  contained  in this Note are true,  correct and  complete in all
material respects to the same extent as though made on and as of the date of the
request,  except to the extent such representations and warranties  specifically
relate to an  earlier  date,  in which  event they  shall be true,  correct  and
complete in all material respects as of such earlier date.

2. Interest Rate and Payments.  Borrower further promises to pay interest on the
outstanding  principal amount hereof from the date hereof until payment in full,
which  interest  shall be payable at the rate per annum equal to the Prime Rate,
as the same may fluctuate on a daily basis,  or the maximum rate  permissible by
law, whichever is less. The "Prime Rate" shall be the rate of interest per annum
publicly  announced from time to time by FUNB as its prime rate.  Each change in
the Prime Rate shall be  effective as of the opening of business on the day such
change in the Prime Rate occurs.  Borrower  acknowledges that the rate announced
publicly  by FUNB as its  prime  rate is an index or base  rate  and  shall  not
necessarily  be the lowest  rate  charged to FUNB's  customers  or other  banks.
Interest  shall be payable  monthly in arrears on the first business day of each
calendar month  following the date first set forth above and shall be calculated
on the basis of a  360-day  year for the  actual  number  of days  elapsed.  Any
principal  repayment or interest  payment on the Loans  hereunder  not paid when
due,  whether at stated  maturity,  by  acceleration  or  otherwise,  shall bear
interest at a rate per annum which is determined by adding two percent (2.0%) to
the rate per annum otherwise applicable to such Loans.

3. Place of  Payments.  All amounts  payable  hereunder  shall be payable at the
office of FUNB at One First Union Center,  301 South College Street,  Charlotte,
North Carolina 28288, Attention:  Maria Ostrowski, or at such other place as the
holder hereof may designate in writing.

4. Prepayment;  Application of Payments and Notation on Books.  This Note may be
prepaid at any time without  penalty.  All money paid toward the satisfaction of
this  Note  shall be  applied  first to the  payment  of  interest  as  required
hereunder and then to the retirement of the principal. Each Loan made hereunder,
and all payments of principal and interest, shall be evidenced by notations made
by FUNB on its books and records; provided, however, that the failure by FUNB to
make such  notations  shall not limit or  otherwise  affect the  obligations  of
Borrower with respect to the  repayments of principal or payments of interest on
the Loans.  Absent manifest error,  the aggregate unpaid amount of each Loan set
forth on the books and  records of FUNB  shall be  presumptive  evidence  of the
principal amount owing and unpaid under this Note.

5. Conditions  Precedent.  The  effectiveness of this Note and the obligation of
FUNB  to make  any  Loan is  conditioned  upon  FUNB's  receiving,  in form  and
substance satisfactory to it, the following:

     (a)          Note.  This Note, duly executed and delivered by Borrower;

     (b) Corporate Documents. A certificate of a responsible officer of Borrower
(i) certifying that the certified copies of the certificate of incorporation and
bylaws of Borrower, attached as Exhibits A and B to the Certificate of Assistant
Secretary  of Borrower  dated as of December  2, 1997 and  delivered  to FUNB as
Agent under the AFG Agreement,  as defined below, are true and accurate,  remain
in full  force and  effect  and have not been  amended  since  that  date,  (ii)
attaching true and correct  copies of all  resolutions of the board of directors
of Borrower  authorizing or relating to the execution,  delivery and performance
of this Note and the  consummation of the transactions  contemplated  hereby and
(iii) setting forth the name, title and signature of the authorized  signers for
Borrower;

     (c)  Certificate of Officer.  A  certificate,  dated as of the date hereof,
and, as to each requested Loan, a certificate dated as of the date of such Loan,
of the Chief Financial Officer or Corporate Controller of Borrower to the effect
that (i) the  representations  and warranties of Borrower contained in Section 6
are true,  accurate and complete in all material  respects as of the date hereof
and (ii) no Event of Default or event  which with the  passage of time or notice
or both would become an Event of Default under this Note has occurred;

     (d)  Opinion.  An  original  favorable  opinion  of  counsel  on  behalf of
Borrower,  in form and  substance  satisfactory  to  FUNB,  dated as of the date
hereof and addressed to FUNB, together with copies of any officer's certificates
or legal  opinions  of other  counsel or law firm  specifically  identified  and
expressly relied upon by such counsel;

     (e)  Notice  of  Borrowing.  As to each  requested  Loan,  at least one (1)
business day before each Loan, a Notice of Borrowing;

     (f) No Event of Default.  As to each  requested  Loan,  no event shall have
occurred and be  continuing  or would result from the making of such Loan on the
requested  funding date which  constitutes an Event of Default or which with the
passage of time or notice or both  would  constitute  an Event of Default  under
this Note or under (and as separately defined in) the Growth Fund Agreement, the
TEC AcquiSub Agreement or the AFG Agreement, as each is defined below; and

     (g) Other  Documents.  Such  other  documents,  information  and items from
Borrower as reasonably requested by FUNB.

6.  Representations  and Warranties.  Borrower hereby warrants and represents to
FUNB as follows,  and agrees that each of said  warranties  and  representations
shall be deemed to continue until full,  complete and  indefeasible  payment and
performance of the obligations hereunder and shall apply anew to each borrowing:

     (a) Existence and Power. Borrower is a corporation, duly organized, validly
existing  and in good  standing  under the laws of the State of Delaware  and is
duly  qualified  and  licensed as a foreign  corporation  and  authorized  to do
business in each  jurisdiction  within the United  States where its ownership of
property and assets or conduct of business requires such qualification. Borrower
has the corporate power and authority, rights and franchises to own its property
and assets  and to carry on its  business  as now  conducted.  Borrower  has the
corporate power and authority to execute,  deliver and perform the terms of this
Note and all other instruments and documents contemplated hereby or thereby.

     (b) Note  Authorized;  Binding  Obligations.  The  execution,  delivery and
performance  of this Note have been duly  authorized by all necessary and proper
corporate  action on the part of Borrower  and this Note  constitutes  a legally
valid and  binding  obligation  of  Borrower,  enforceable  against  Borrower in
accordance  with its  terms,  except as  enforcement  thereof  may be limited by
bankruptcy,  insolvency or other laws  affecting the  enforcement  of creditors'
rights generally.

     (c) No Conflict; Legal Compliance.  The execution,  delivery and payment of
this Note will not: (i)  contravene  any provision of Borrower's  certificate of
incorporation  or  bylaws;  (ii)  contravene,   conflict  with  or  violate  any
applicable law or regulation, or any order, writ, judgment,  injunction, decree,
determination   or  award  of  any  court  or  governmental   authority,   which
contravention,  conflict or  violation,  in the  aggregate,  may have a Material
Adverse Effect  ("Material  Adverse  Effect" means any set of  circumstances  or
events which has or could  reasonably  be expected to have any material  adverse
effect  whatsoever upon the validity or enforceability of this Note, is or could
reasonably be expected to be material and adverse to the condition (financial or
otherwise)  or business  operations  of  Borrower,  materially  impairs or could
reasonably be expected to  materially  impair the ability of Borrower to perform
its  obligations  hereunder or under any other  agreement  between  Borrower and
FUNB, or materially impairs or could reasonably be expected to materially impair
the ability of FUNB to enforce any of its legal  remedies  pursuant to this Note
or under  applicable  law);  or (iii)  violate  or result in the  breach  of, or
constitute a default under any indenture or other loan or credit  agreement,  or
other agreement or instrument to which Borrower is a party or by which Borrower,
or its  property  and  assets  may be  bound  or  affected.  Borrower  is not in
violation or breach of or default under any law, rule, regulation,  order, writ,
judgment, injunction, decree, determination or award or any contract, agreement,
lease,  license,  indenture  or other  instrument  to  which it is a party,  the
non-compliance  with,  the  violation  or breach of or the  default  under which
would, with reasonable likelihood, have a Material Adverse Effect.

7. Default.  The occurrence of any one or more of the following shall constitute
an "Event of Default" hereunder:

     (a)  Failure  to make  Payments.  Borrower  fails to pay  timely any of the
principal  amount due under this Note or any accrued  interest or other  amounts
due  hereunder  on the  date  the  same  becomes  due and  payable,  whether  by
acceleration  or otherwise  and such failure shall not have been cured to FUNB's
satisfaction within five (5) calendar days; or

     (b) Payments under Other  Agreements  with FUNB. Any of Borrower,  American
Finance  Group,  Inc.,  TEC AcquiSub,  Inc.,  PLM  Equipment  Growth Fund V, PLM
Equipment Growth Fund VI, PLM Equipment  Growth & Income Fund VII,  Professional
Lease Management Income Fund I, L.L.C.,  PLM Financial  Services,  Inc. fails to
pay any sum due FUNB under any  agreement  to which such  person is a party,  as
such sum shall become due and payable,  whether by acceleration or otherwise and
such failure shall not be cured to FUNB's  satisfaction within five (5) calendar
days; or

     (c)  Other  Agreements.  (i)  Borrower  defaults  in the  repayment  of any
principal of or the payment of any interest on any indebtedness of Borrower,  or
breaches  any term of any  evidence  of such  indebtedness  or  defaults  in any
payment in respect of any contingent  obligation in each case exceeding,  in the
aggregate outstanding principal amount,  $1,000,000 or (ii) Borrower breaches or
violates any term or provision of any  evidence of  indebtedness  or  contingent
obligation  under any loan  agreement,  mortgage,  indenture,  guaranty or other
agreement   relating  thereto  if  the  effect  of  such  breach  is  to  permit
acceleration  under  the  applicable  instrument,   loan  agreement,   mortgage,
indenture,  guaranty or other  agreement  and such  failure  shall not have been
cured within the applicable cure period,  or there is an acceleration  under the
applicable instrument, loan agreement,  mortgage,  indenture,  guaranty or other
agreement or such indebtedness otherwise becomes or is caused to become then due
and payable in its entirety; or

     (d) Breach of Covenants or Representations or Warranties. Borrower fails or
neglects to perform,  keep or observe any of the covenants  contained herein; or
any  representation or warranty made by or on behalf of Borrower in this Note or
any other agreement or any statement or certificate at any time given in writing
pursuant  hereto  or in  connection  herewith  shall  be  false,  misleading  or
incomplete in any material respect when made; or

     (e) Insolvency;  Bankruptcy.  Borrower shall (i) cease to be solvent,  (ii)
admit in writing its  inability to pay its debts as they  mature,  (iii) make an
assignment  for the  benefit  of  creditors,  (iv)  apply for or  consent to the
appointment  of a  receiver,  liquidator,  custodian  or trustee for it or for a
substantial part of its properties or business, or such a receiver,  liquidator,
custodian or trustee  otherwise  shall be appointed  and shall not be discharged
within  sixty (60) days after such  appointment,  or a  bankruptcy,  insolvency,
reorganization or liquidation  proceedings or other proceedings for relief under
any  bankruptcy  law or any law for the relief of debtors shall be instituted by
or against  Borrower or any order,  judgment or decree shall be entered  against
Borrower decreeing its dissolution or division;  provided, however, with respect
to an  involuntary  petition in  bankruptcy,  such petition  shall not have been
dismissed within sixty (60) days after the filing of such petition; or

     (f) Material Adverse Effect.  There shall have been a change in the assets,
liabilities,  financial condition,  operations, affairs or prospects of Borrower
or  any  guarantor  of any of  Borrower's  obligations  to  FUNB  which,  in the
reasonable  determination of FUNB has, either  individually or in the aggregate,
had a Material Adverse Effect; or

     (g) Judgments, Writs and Attachments. There shall be a money judgment, writ
or warrant of attachment or similar  process  entered or filed against  Borrower
which (net of  insurance  coverage)  remains  unvacated,  unbonded,  unstayed or
unpaid  or  undischarged   for  more  than  sixty  (60)  days  (whether  or  not
consecutive) or in any event later than five (5) calendar days prior to the date
of any proposed sale thereunder; or

     (h) Legal  Obligations.  This Note or any other agreement  between Borrower
and FUNB shall for any reason  other than the full,  complete  and  indefeasible
satisfaction  of the  obligations  thereunder  cease to be,  or be  asserted  by
Borrower,  not to be,  a  legal,  valid  and  binding  obligation  of  Borrower,
enforceable against Borrower in accordance with its terms; or

     (i) Other Credit  Agreements.  Without  limiting the  generality of, and in
addition to the events described in this Section 7, the occurrence of any "Event
of Default"  (i) as defined  under the Third  Amended and  Restated  Warehousing
Credit  Agreement  dated  as of  December  2,  1997,  by and  among  each of PLM
Equipment  Growth Fund V, PLM Equipment  Growth Fund VI, PLM Equipment  Growth &
Income  Fund VII,  Professional  Lease  Management  Income Fund I,  L.L.C.,  PLM
Financial  Services,  Inc. and the Lenders and Agent named therein,  as the same
may from time to time be amended, modified,  supplemented,  renewed, extended or
restated (the "Growth Fund  Agreement")  or any other loan or security  document
related to the Growth Fund Agreement;  (ii) as defined in the Second Amended and
Restated Warehousing Credit Agreement dated as of December 2, 1997, by and among
TEC AcquiSub, Inc. and the Lenders and Agent named therein, as the same may from
time to time be amended, modified,  supplemented,  renewed, extended or restated
(the "TEC AcquiSub Agreement") or any other loan or security document related to
the TEC  AcquiSub  Agreement;  or (iii) as defined in the Amended  and  Restated
Warehousing  Credit  Agreement  dated as of December 2, 1997, as amended through
the date hereof,  by and among American Finance Group,  Inc. and the Lenders and
Agent  named  therein,  as the same may from  time to time be  further  amended,
modified,  supplemented,  renewed, extended or restated (the "AFG Agreement") or
any other loan or security document related to the AFG Agreement; or

     (j) Criminal  Proceedings.  A criminal  proceeding shall have been filed in
any court naming  Borrower as a defendant  for which  forfeiture  is a potential
penalty  under  applicable  federal  or  state  law  which,  in  the  reasonable
determination of FUNB, may have a Material Adverse Effect; or

     (k) Action by Governmental  Authority.  Any court or governmental authority
enters a decree, order or ruling ("Government Action") which will materially and
adversely  affect  Borrower's  financial  condition,  operations  or  ability to
perform or pay its  obligations  arising  under this Note or any  instrument  or
agreement executed in relation hereto. Borrower shall have thirty (30) days from
the earlier of the date Borrower first discovers it is the subject of Government
Action or FUNB or any  agency  gives  notice of  Government  Action to take such
steps as are  necessary to obtain  relief from the  Government  Action.  For the
purpose of this paragraph, "relief from Government Action" means to discharge or
to obtain a dismissal of or release or relief from (i) any Government  Action so
that the affected  party or parties do not incur any  monetary  liability in the
case of Borrower,  or (ii) any  disqualification  of or other  limitation on the
operation of Borrower which in the reasonable  determination  of FUNB may have a
Material Adverse Effect; or

     (l) Governmental Decrees. Any court or governmental  authority,  including,
without  limitation,  the  Securities  and  Exchange  Commission,  shall enter a
decree,  order or ruling  prohibiting any of American  Finance Group,  Inc., TEC
AcquiSub,  Inc., PLM Equipment  Growth Fund V, PLM Equipment Growth Fund VI, PLM
Equipment Growth & Income Fund VII, Professional Lease Management Income Fund I,
L.L.C. or PLM Financial Services,  Inc. from releasing or paying to Borrower any
funds in the  form of  management  fees,  profits  or  otherwise  which,  in the
reasonable determination of FUNB may have a Material Adverse Effect.

8. Remedies.  Upon the occurrence and continuance of any Event of Default,  FUNB
shall have no further obligation to advance money or extend credit to or for the
benefit of Borrower. In addition, upon the occurrence and during the continuance
of an Event of  Default,  FUNB may do any one or more of the  following,  all of
which  are  hereby  authorized  by  Borrower:  (a)  declare  all  or  any of the
obligations  of Borrower  under this Note and any other  instrument  executed by
Borrower  in  relation  hereto  to be  immediately  due and  payable,  and  such
obligations shall immediately become due and payable and immediately collectible
by FUNB  pursuant to applicable  law;  provided that if such Event of Default is
under Section 7(f) or 7(g),  then all of the  obligations of Borrower  hereunder
shall become  immediately due and payable and collectible  forthwith without the
requirement  of any notice or other action by FUNB; and (b) exercise in addition
to all other  rights  and  remedies  granted  hereunder,  any and all rights and
remedies otherwise available at law or in equity.

9. Waiver;  Representations and Expenses. Borrower waives presentment and demand
for payment, notice of dishonor,  protest and notice of protest of this Note and
all other  notices or  demands  in  connection  with the  delivery,  acceptance,
performance,  default or  endorsement  of this Note, and shall pay all costs and
expenses of collection  when incurred by FUNB,  including,  without  limitation,
reasonable attorneys' fees, costs and other expenses. The right to plead any and
all  statutes of  limitations  as a defense to any demands  hereunder  is hereby
waived to the full extent permitted by law. No extension nor indulgence  granted
from  time to  time  shall  be  construed  as a  novation  of this  Note or as a
reinstatement of the indebtedness  evidenced hereby or as a waiver of the rights
of FUNB herein. The liability of Borrower shall be unconditional, without regard
to the liability of any other party,  and shall not be in any manner affected by
any  forbearance,  partial  action or delay on the part of FUNB in regard to the
exercise of any right, power or remedy under this Note.

10.  Indemnity.  Borrower  shall pay,  indemnify,  and hold FUNB and each of its
officers, directors,  employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified  Person")  harmless  from  and  against  any and  all  liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
charges, expenses or disbursements (including reasonable attorney's fees and the
allocated  cost of  in-house  counsel)  of any kind or  nature  whatsoever  with
respect to the execution, delivery, enforcement,  performance and administration
of this  Note  and any  other  documents  related  hereto,  or the  transactions
contemplated  hereby  and  thereby,  and  with  respect  to  any  investigation,
litigation or proceeding  (including any case,  action or proceeding  before any
court or other governmental  authority  relating to bankruptcy,  reorganization,
insolvency,  liquidation,  dissolution  or relief of  debtors  or any  appellate
proceeding)  related  to this  Note  or the  Loans  or the  use of the  proceeds
thereof,  whether  or not any  Indemnified  Person is a party  thereto  (all the
foregoing, collectively, the "Indemnified Liabilities"); provided, that Borrower
shall have no  obligation  hereunder to any  Indemnified  Person with respect to
Indemnified  Liabilities arising from the gross negligence or willful misconduct
of such Indemnified Person.

11. Governing Law; Amendment and Interpretation. This Note shall be governed by,
and construed and enforced in accordance  with, the laws of the North  Carolina,
excluding  conflict of laws  principles that would cause the application of laws
of any other  jurisdiction.  If any provision of this Note is held to be invalid
or unenforceable by a court of competent  jurisdiction,  the other provisions of
this  Note  shall  remain  in full  force  and  effect  and FUNB may at any time
thereafter  require payment in full of all amounts due hereunder.  This Note may
not be terminated, amended, supplemented, waived or modified orally, but only by
an instrument in writing executed by the party against which  enforcement of the
termination,  amendment,  supplement,  waiver or  modification  is  sought.  The
headings of Sections shall not be taken into account in  interpreting  the terms
of this Note.

12.  Successors  and  Assigns.  The  provisions  of this Note shall inure to the
benefit of and be binding on any  successor  to Borrower and shall extend to any
holder  hereof.  Borrower may not assign its rights or delegate its  obligations
hereunder.

13. Waiver of Jury Trial. TO THE EXTENT  PERMITTED BY APPLICABLE LAW,  BORROWER,
BY EXECUTION HEREOF, AND FUNB, BY ACCEPTANCE HEREOF, KNOWINGLY,  VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION  BASED ON THIS NOTE, OR ARISING OUT OF, UNDER OR IN  CONNECTION  WITH
THIS NOTE OR ANY AGREEMENT  CONTEMPLATED  TO BE EXECUTED IN CONNECTION WITH THIS
NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN)  OR ACTIONS OF ANY PARTY  WITH  RESPECT  HERETO.  THIS  PROVISION  IS A
MATERIAL INDUCEMENT TO FUNB TO ACCEPT THIS NOTE.



<PAGE>




         IN WITNESS  WHEREOF,  Borrower has caused this Note to be duly executed
and delivered as of the date first written above.

                                  PLM INTERNATIONAL, INC.



                                  By:
                                  Name:
                                  Title:








<PAGE>


                                    EXHIBIT A

                               NOTICE OF BORROWING

                            (PLM International, Inc.)

                                                              Date:


To:      First Union National Bank
         One First Union Center
         301 South College Street
         Charlotte, NC  28288

Re:      Promissory Note dated as of July 15, 1998 (as the same may from time to
         time be amended, modified, supplemented, renewed, extended or restated,
         the  "Note"),  by  PLM  International,  Inc.,  a  Delaware  corporation
         ("Borrower") in favor of First Union National Bank ("FUNB").

Ladies and Gentlemen:

The  undersigned  refers to the Note,  the terms defined  therein used herein as
defined,  and hereby gives you notice irrevocably,  pursuant to Section 1 of the
Note, of the borrowing of a Loan specified herein:

1.       The business day of the proposed borrowing is            , 199_.

2.       The aggregate amount of the proposed borrowing is $      .
                                                            ------

The  undersigned  hereby  certifies  that the  following  statements  are  true,
accurate  and  complete as of the date  hereof,  and will be true,  accurate and
complete on the date of the proposed  borrowing,  before and after giving effect
thereto and to the application of the proceeds therefrom:

                  (a) the  representations  and  warranties  of the Borrower set
forth in Section 6 of the Note are true, accurate and complete as though made on
and as of such date (except to the extent such  representations  and  warranties
relate to an earlier date, in which case they are true, accurate and complete as
of such date);

                  (b) no Event of  Default or event  which  with the  passage of
time or notice or both would  become an Event of  Default  has  occurred  and is
continuing, or would result from such proposed borrowing; and

                  (c) the  proposed  borrowing  will  not  cause  the  aggregate
principal amount of all outstanding Loans to exceed $5,000,000.

                                 PLM INTERNATIONAL, INC.,
                                 a Delaware corporation


                                 By:
                                 Name:
                                 Title:
                                 
                                 By:
                                 Printed Name:




<PAGE>