AMENDMENT NO. 3
                         TO WAREHOUSING CREDIT AGREEMENT
                         (American Finance Group, Inc.)


         THIS  AMENDMENT  NO.  3 TO  WAREHOUSING  CREDIT  AGREEMENT  dated as of
November  3, 1997  (the  "Amendment"),  is  entered  into by and among  AMERICAN
FINANCE GROUP, a Delaware corporation ("Borrower"), FIRST UNION NATIONAL BANK OF
NORTH CAROLINA ("FUNB") 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  "Lender,"  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  Warehousing
Credit Agreement dated as of May 31, 1996, as amended by that Amendment No. 1 to
Warehousing Credit Agreement dated as of November 5, 1996 and that Amendment No.
2 to Warehousing  Credit  Agreement  dated as of October 3, 1997 (as so amended,
the "Credit  Agreement"),  pursuant to which  Lenders  have agreed to extend and
make available to Borrower certain advances of money.

         B. Borrowers  desire that Lenders and Agent amend the Credit  Agreement
to (i) extend the Commitment  Termination Date from November 3, 1997 to December
2, 1997 and (ii)  reduce the  Commitments  set forth on Schedule A to the Credit
Agreement from $50,000,000 to $35,000,000.

         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.

                           1.2  Commitment  Termination  Date. The definition of
"Commitment  Termination  Date" set forth in Section 1.1 of the Credit Agreement
is deleted and replaced with the following:

                  "Commitment Termination Date" means December 2, 1997.

         2.       LIMITATIONS ON AMENDMENTS.

                  (a)  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.

                  (b) 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 waived or 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) are true, accurate and complete in
all  material  respects  as of the date  hereof  and (ii) no Default or 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   articles   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 articles 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, Lender and Agent.

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

                  (c) The execution and delivery of an Assignment and Acceptance
by each of Fleet Bank, N.A., as an Assignor Lender, FUNB, as an Assignee Lender,
Borrowers and Agent,  pursuant to which Fleet Bank,  N.A. shall have assigned to
FUNB all of its Commitments under the Credit  Agreement,  which assignment shall
have been effected.

                  (d) Satisfaction, to the approval of Lenders and Agent, of all
conditions  precedent to the  effectiveness of Amendment No. 3 to Second Amended
and Restated  Warehousing  Credit  Agreement  dated as of the date hereof by and
among the Growth Funds, FSI, Lenders and Agent.

                  (e) Satisfaction, to the approval of Lenders and Agent, of all
conditions  precedent to the  effectiveness  of  Amendment  No. 4 to Amended and
Restated  Warehousing  Credit Agreement dated as of the date hereof by and among
TEC AcquiSub, Lenders and Agent.

         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
                                    J. Michael Allgood
                                    Chief Financial Officer


LENDERS                       FIRST UNION NATIONAL BANK OF
                              NORTH CAROLINA


                              By
                              Printed Name:
                              Title:


AGENT                         FIRST UNION NATIONAL BANK OF
                              NORTH CAROLINA, as Agent


                              By
                              Printed Name:
                              Title:










                                  ATTACHMENT I

                              [Revised Schedule A]





                                   SCHEDULE A

                                   COMMITMENTS



      LENDER                   COMMITMENT               PRO RATA SHARE

First Union National Bank      $35,000,000              35/35 x 100%
  of North Carolina






                          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. 3 to 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 the date hereof.

GUARANTOR                                   PLM INTERNATIONAL, INC.


                                            By
                                                     J. Michael Allgood
                                                     Chief Financial Officer